3.3 SELLER'S RIGHT TO SPECIFIC PERFORMANCE: CISG ART. 62

3.3.1 Rationale of Art. 62

Much of what was said above of the buyer's right to compel performance applies to the seller's right to compel performance under Art. 62. Because there are fewer buyer's obligations, Art. 62 is conceptually simpler than Art. 46.  ¹¹⁷  Art. 62 sets forth in broad terms: "The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement."

Like Art. 46, Art. 62 recognizes that the seller's primary concern is to obtain performance, it thus also represents the pacta sunt servanda principle. "The rationale behind Article 62 is the same as Article 46: to promote respect for the agreement and to ensure there is adequate compensation. Damages may take time to be assessed and may be inadequate because they do not compensate for certain expenses suffered by the innocent party. Another rationale behind Article 62 is the difficult task of the seller to dispose of goods when the buyer refuses to take delivery. [...] The right of the seller to enforce performance eliminates the expense and delay of seeking another buyer or negotiating a substitute transaction. This is an especially important right in cases where the goods have reached the destination port and the buyer refuses to take delivery. In such a situation the seller may not be able to resell the goods in that market because it may be a foreign market, unknown to the seller. In this way, specific performance provides a more appropriate form of compensation than damages because it gives a seller exactly what he expected from the contract. "  ¹¹⁸ 

3.3.2 General Application

It follows from the plain language of Art. 62 that the seller may require the performance by the buyer of any obligation such as payment of price, taking delivery or any other obligation that arises from the contract. However, it is said that this is simply what may be demanded of the buyer, "the addition of a provision allowing specific performance in favour of the seller is unlikely to have a significant practical effect except in exceptional circumstances."  ¹¹⁹ 

Knapp states that the seller's right to performance "contrasts with other remedies provided in Article 61 because it does not create any new right to the seller or a new obligation of the buyer. It is simply a pursuance of their initial rights and obligations under the contract. Hence, the intention of Article 62 is to emphasize that the mere non-performance by the buyer of his obligations does not cause an ipso facto avoidance of the contract and that the contractual obligations continue in force even if not performed in due time."  ¹²⁰  Nonetheless, Treitel combined several of the unclear points to illustrate a situation where it would be appropriate for a seller to seek specific performance. A seller could have contracted to supply all of the requirements of the buyer's manufacturing business over an extended period of time (therefore the goods are neither specific nor necessarily ascertained) for a contracted price. The seller may have made a significant initial investment and the market price might vary in such a way as to make any damage award speculative. Under these circumstances, the seller has some justification to seek specific performance.  ¹²¹ 

Art. 62 is limited, similarly as in Art. 46(1), to situations where the seller has not resorted to an inconsistent remedy with the right to require performance. Consequently, if the seller declares the contract avoided under Art. 64 he loses the right to require performance of the buyer's obligations.  ¹²²  In this respect, it is to be noted that the ground for declaring the contract avoided is irrelevant: It is the remedy, not the reason for resorting to it, that is inconsistent with a requirement for, e.g., taking delivery.  ¹²³  Knapp further notes that the seller's election of Nachfrist avoidance procedure (Article 63) is inconsistent only so long as the Nachfrist period lasts.  ¹²⁴  On the other hand, the exercise of the right to obtain performance does not exclude transition to other rights which are also inconsistent with it when the right to require performance does not lead to the intended result.  ¹²⁵  In particular, claiming damages is not excluded by requiring performance as it is expressly provided in Art. 61(2) that "[t]he seller is not deprived of any right he may have to claim damages by exercising his right to other remedies."

3.3.3 Potential Problems

The biggest potential problem with Art. 62 is what happens when a seller tries to force a buyer to accept goods he or she does not want, or to pay for goods that have been delivered but not accepted. It is clear that if the buyer has received conforming goods he is under an obligation to perform his obligations under the contract and pay the price for the goods. But can the seller require the buyer to pay the price where the buyer has not received the goods or has not accepted them and does not even wish to receive the goods? Art. 62 does not give a clear answer to this question.

In this respect, Sevón submits: "If payment is not made in time, the seller may require the buyer to pay the price. Such a requirement may be presented irrespective of an extension of the delay. Even if the delay amounts to a fundamental breach of contract, the seller may choose to require payment. He may do so even if he has the right to sell the goods under the provisions on preservation of the goods in Article 88. If he chooses to sell the goods or is under an obligation to do so, thereafter he may claim the balance between the price and the proceeds from the sale."  ¹²⁶  This indicates strongly an interpretation that the seller may require the buyer to pay the price even where the seller has not received the goods. On the other hand, as Art. 62 expressly provides that the seller may require the buyer to take delivery, it is obvious that a buyer who is unwilling to receive the goods is still obliged to perform and take the delivery. "If the buyer has neither paid the price nor taken delivery, the remedy may be used together with, or separately from, a requirement for payment. Situations can be envisaged where the seller is more anxious to receive payment than to force the buyer to take delivery of the goods. He may therefore present these requirements simultaneously or separately."  ¹²⁷ 

However, the right of the seller to require performance by the buyer is limited by Art. 28, as is discussed above. Thus, the domestic rules in this question may be decisive and lead to another solution, which follows from the relation between Arts. 62 and 28 on specific performance. "In considering the CISG provisions that govern the right to compel payment of price as one type of specific performance, the CISG is markedly different from some domestic laws. In certain domestic systems, the right to compel payment of the price when the buyer has accepted the goods is presented as a right to collect a debt. This right to collect, however, does not fall under the rules regulating specific performance. Another difference between domestic systems and the CISG is that certain domestic legal systems provide that the seller cannot force the buyer to accept the goods unless he is unable to resell them after reasonable effort. The CISG gives the seller the right to compel acceptance without the aforementioned condition."  ¹²⁸ 

A further point, as regards the seller's right to require performance by the buyer, is of relevance. According to Art. 85, if the buyer is in delay in taking delivery of the goods the seller must take such steps as are reasonable in the circumstances to preserve them. Consequently, if the seller is in possession of the goods and the buyer has failed to take the delivery, Art. 85 sets forth an obligation to the seller to preserve the goods. Furthermore, Art. 85 leads to another important provision, i.e. the provision in Art. 88(2), which states that: "If the goods are subject to rapid deterioration or their preservation would involve unreasonable expense, a party who is bound to preserve the goods in accordance with article 85 or 86 must take reasonable measures to sell them." Therefore, although Art. 62 does not directly obligate the seller to sell the goods in case the buyer is in breach, such obligation may still arise on the seller.  ¹²⁹  It is said that that Arts. 85 and 88 will eventually force a seller into resale when the buyer is especially reluctant to take the goods.  ¹³⁰ 

Given the potential problems concerning the seller's right to specific performance under Art. 62, it is recommended by Enderlein and Maskow: "When the buyer neither pays nor takes delivery of the goods, the seller will, just to mention the most important options, do the following [...]: Where he is still in possession of the goods he may, to the extent that the relevant conditions are given, resell them by way of self-help or emergency sale and require the buyer to pay the costs and damages (lower sales price) (Articles 85, 87 and above all Article 88; Article 74 fol). He can also, without setting a Nachfrist -- however, a Nachfrist is more effective so as not to have to prove the fundamentality of the breach of contract -- make the contract void (Article 63 fol) and claim damages, typically after a substitute sale."  ¹³¹