MEMORANDUM FOR RESPONDENT

THE NAMES OF THE MOOTERS OF THE TEAM.

1. Nguyn Th V;
2. L Trung;
3. Nguyn Ngc Thy Tin;
4. Nguyn Thy Trang.
WORD COUNT OF THE MEMORANDUM.
- 3,855 words.

THE TEAMS INDIVIDUAL MOOT NUMBER: 124

MEMORANDUM FOR RESPONDENT

1

 VIETNAM

INTERNATIONAL

ARBITRATION

JURISDICTION OVER THE DISPUTE.

CENTRE

(VIAC)

HAS

A. There is an arbitration clause in the Contract in compliance with Article II 1958

United Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (hereinafter called 1958 New York Convention).
Apparently, as for dispute settlement, the Contract No. 1407/2015 concluded on 14 July
20151 (hereinafter called Contract) provided that Any dispute arising out of or in relation with
this Contract shall be resolved by arbitration 2 Therefore, this clause is to choose arbitration to
settle their dispute. It is also contained in the Contract and thus is in form of an arbitration
agreement which shall be in writing. Since all elements are met as stipulated by Article II (1) and
(2) 1958 New York Convention,3 it is reasonable to consider there is an arbitration agreement in
the Contract.
B. VIAC indisputably has the jurisdiction over the dispute.
Firstly, the arbitration agreement in the Contract evidently mentioned VIAC shall resolve
the dispute. Furthermore, the arbitration agreement is also in compliance with VIAC rules. Since
the number of arbitrators which shall be three complies with Article 10(1), the place of
arbitration which is Ho Chi Minh City (Vietnam) is in consistent with Article 20, and the
language of arbitration which is English conform to Article 21(2).4
Secondly, the Tribunal has jurisdiction to hear this dispute since it was submitted within
the limitation period which is set at four years5 provided by Article 8 1974 Convention on the
Limitation Period in the International Sale of Goods.
APPLICABLE LAW.
1 Moot Problem, para. 3, lines 1-2.
2 Moot Problem, para. 3, lines 9-10.
3 Under Article II (1) and (2) 1958 New York Convention, an arbitration agreement is an agreement in writing
signed by the parties under which the parties undertake to submit to arbitration all or any differences which have
arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not,
concerning a subject matter capable of settlement by arbitration.

4 Moot Problem, para. 3, lines 9-13.

5 According to Article 8 1974 Convention on the Limitation Period in the International Sale of Goods: The
limitation period shall be four years.

CLAIMANTs and RESPONDENTs places of business are respectively located in Cagar

and Ragar, both of which are signatories without reservations to the United Nations Convention
on Contracts for the International Sales of Goods (hereinafter called "CISG"). In the absence of a
choice of law clause, the present dispute is governed by the CISG pursuant to Article 1(1) (a)
CISG.
ISSUE (i).
A. RESPONDENTS DELIVERY WAS IN CONFORMITY WITH THE CONTRACT.
(1) RESPONDENTs delivery fulfilled the quality requirements of the goods agreed by both
parties.
To determine the agreed quality requirements, it is not the samples but what was stated
explicitly in the Contract that should be taken into account.
Firstly, the samples were rejected since CLAIMANT did not accept the dispatched
samples that were old stock and differed in size. 6 Therefore, the conclusion of the Contract is not
based upon the samples.
Secondly, the parties had never stipulated the size of the mushrooms. Although
RESPONDENT promised that he would provide the mushrooms with better quality than the
samples, it should not be interpreted that the mushrooms would be in bigger size than the
samples. Since there are various elements to assess mushrooms quality (such as fragrance, color,
size, etc), also, the parties had never done business with each other before, in accordance with
Article 8(1) CISG, RESPONDENT could not know and should not be expected to know such
expectation of CLAIMANT about the size of the mushrooms, unless CLAIMANT clearly
expressed it to RESPONDENT. Moreover, under the circumstances that CLAIMANT had
rejected the samples because they were old stocks and differed in size, it is reasonable that such
better quality should be interpreted as fresher mushrooms and similar in size.
Furthermore, in the fax on 24 August 2015, RESPONDENT did notice CLAIMANT of
the delivery which is comparatively small but even size. 7 CLAIMANT, however, made no
opposition to that small size of the mushrooms.
6 Moot Problem, para. 3, lines 2-3.
7 Moot Problem, para. 4, line 5.
4

Therefore, the final quality standards for the delivery were thick mushrooms produced in
2015 and in similar size, no size requirement. Granted that the delivered goods were fresh
mushrooms produced in 2015 and similar in size (80% were of 1,5 cm), 8 RESPONDENTs
delivery was consistent with the agreed quality standards.
Additionally, even if the samples were decided to be the basic of the Contract, it should
not prevail. In the case of a sample or model where the contract describes the quality of the
goods in a different manner than is shown by the sample or model, only if there is not a different
description in the contract will the sample or model prevail. Otherwise, the sample should not
prevail in any case if the description in the contract was clear and unambiguous. 9 Since the
Contract clearly described the quality of the mushrooms as 2015 fresh goods and in similar
size, the Contracts description should prevail.
Therefore, RESPONDENTs delivery met the mushrooms quality agreed by both parties.
(2) RESPONDENTs failure of packaging of the goods was not regarded as non-conformity.
Although the seller is obliged to deliver goods which conform in quantity, quality and to
contractual specifications according to trade practices; differences in quantity and contractual
requirements can only be regarded as non-conforming goods under Article 35 CISG if the defects
reach a certain level of seriousness.10 A failure of goods to conform to the contract is not a breach
if the non-conforming goods are equal in value and utility to conforming goods.11

8 Moot Problem, para. 6, line 4.

9 Fritz Enderlein, Professor of Law, Petar Sarcevic & Paul Volken eds., International Sale of Goods: Dubrovnik
Lectures,

Oceana

(1996),

Ch.

5,

p.

133-201.

[Available

at:

http://www.cisg.law.pace.edu/cisg/biblio/enderlein1.html#if].

10 Germany 21 April 2004 Appellate Court Dsseldorf [15 U 88/03] (Mobile car phones case).[Available at:
http://cisgw3.law.pace.edu/cases/040421g3.html].

11 Switzerland 30 November 1998 Commercial Court Zrich (Lambskin coat case).[Available at:
http://cisgw3.law.pace.edu/cases/981130s1.html]

When examining the goods, CLAIMANT only claimed that the mushrooms were smaller
than the samples provided.12 None of deterioration of the mushrooms was found which shows
that the mushrooms were well preserved and protected despite being packed in gunny sacks.
Moreover, in the case at hand, CLAIMANT succeeded in selling the goods,13 thus, the
defective goods did not deprive CLAIMANT of his purpose of purchasing them. Since
CLAIMANT is a retail company,14 being able to sell the goods means RESPONDENTs failure
to pack the goods in the required manner did not affect the CLAIMANTs aim to buy the goods.
In addition, RESPONDENTs resale of the goods under the Contract to others constituted de
facto acceptance of the gunny bag packing.
Thus, RESPONDENTs failure in packaging should not be regarded as non-conforming
goods under Article 35 CISG.
B. CLAIMANT DID NOT MAKE PROPER NOTICE OF NON-CONFORMITY TO
RESPONDENT.
As discussed above, the goods are in conformity with the Contract, so CLAIMANT is not
entitled to make notice of non-conformity.
Should the Tribunal consider the goods are non-conforming, CLAIMANT still failed to
make proper notice of non-conformity to RESPONDENT in accordance with Article 39(1)
CISG.
(1) CLAIMANT did not notice the non-conformity within a reasonable time after he ought to
have discovered it.
As a matter of facts, the delivery was on 24 September 2015, however, it was four days
later that CLAIMANT took the goods, unpacked and examined them. 15 Nonetheless, since
CLAIMANT did not supply any evidence proving he had difficulties examining the goods

12 Moot Problem, para. 6.

13 Moot Problem, para. 8, line 1.
14 Moot Problem, para. 1, lines 2-3.
15 Moot Problem, para. 5, lines 1-2.
6

immediately after arriving, CLAIMANT must have examined the mushrooms on the date of
delivery.
And if the examination had been conducted without delay, visible defect in package and
size would have been revealed immediately, CLAIMANT thus ought to have discovered the nonconformity at the moment of delivery. Moreover, the Contract stipulated that any claim should be
filed as soon as possible upon the arrival of the goods at the port of destination. 16 Therefore, the
period of giving notice which starts to run from 24 September 2015 to 12 October 2015 is
nineteen days.
The reasonable time for giving notice after the buyer discovered or ought to have
discovered the lack of conformity varies depending on the circumstances. 17 One of the factors to
be taken into consideration is whether the goods are perishable or durable.
In common sense, fresh mushrooms are perishable goods due to their high moisture
content, and such nature of the goods indicates need for speed; notice of lack of conformity must
often be given within hours or at least within a few days. 18 In several relevant cases, where the
goods are perishable, some decisions have suggested very short presumptive notice periods
which are usually under nineteen days. 19 The notice of CLAIMANT, which was given within
nineteen days, therefore, is not in a reasonable time.
16 Moot Problem, para. 3, lines 6-7.

17 CISG Advisory Council Opinion No. 2, Examination of the Goods and Notice of Non-Conformity Articles 38
and 39. [Available at: http://www.cisg.law.pace.edu/cisg/CISG-AC-op2.html]

18 John Honnold, Uniform Law for International Sales Under the 1980 United Nations Convention (Third Edition
(1999)), p. 280.[Available at: http://www.cisg.law.pace.edu/cisg/biblio/honnold.html#oo4];
Peter Schlechtriem Ingeborg Schwenzer, Commentary on the UN Convention on the International Sale of Goods 1st
ed. Oxford University Press, 1998, p. 314-315.

19 Germany 14 August 2006 Appellate Court Kln (Potatoes case) (notice with respect to perishable goods due
within 24 hours).[Available at: http://cisgw3.law.pace.edu/cases/060814g1.html];

(2) CLAIMANT did not notice the non-conformity within a reasonable time after he has
discovered it
Even if the reasonable time to give notice commences after CLAIMANT actually
discovered the non-conforming goods, which means the period is now fifteen days (from 28
September 2015 to 12 October 2015), the period is still not considered reasonable. Recent
judicial practice on Article 39 CISG shows that if a buyer does not have any specific reasons for
a delay, it must give notice of non-conformity promptly after it learned about the defects. 20

Greece 2003 Decision 14953/2003 of the Single-Member Court of First Instance of Thessalonika (Shock absorber
case) (for consumables the reasonable period corresponds to a few days or sometimes even a few hours").
[Available at: http://cisgw3.law.pace.edu/cases/030001gr.html];
Germany 22 August 2002 Appellate Court Schleswig (Live sheep case) (notice of lack of conformity of live sheep
generally due in three to four days after delivery).
[Available at: http://cisgw3.law.pace.edu/cases/020822g2.html];
Germany 3 June 1998 Appellate Court Saarbrcken (Flowers case) (in sales of fresh flowers, notice should be given
on day of delivery).
[Available at: http://cisgw3.law.pace.edu/cases/980603g1.html];
Germany 21 October 1994 Lower Court Riedlingen (Ham case), where the court stated that the buyer should have
examined ham within three days and given notice within further three days. Although the goods in that case were
perishable, the court did not specifically mention this factor in setting out its time limits.
[Available at: http://cisgw3.law.pace.edu/cases/941021g1.html]

20 Spain 19 December 2007 Appellate Court Pontevedra (Frozen and cooked seafood case).[Available at:
http://cisgw3.law.pace.edu/cases/071219s4.html];
Netherlands 2 January 2007 Appellate Court 's-Hertogenbosch (Trees).
[Available at: http://cisgw3.law.pace.edu/cases/070102n1.html];
Israel 17 March 2009 Supreme Court (Ceramic floor tiles).
[Available at: http://cisgw3.law.pace.edu/cases/090317i5.html];

Courts and scholarly writings agree that a period of fourteen days or even less is considered
reasonable to give notice of any lack of conformity.21
Also, as discussed above, the notice of non-conformity in case of perishable goods must
be given promptly (hours or maximum a few days). Moreover, when measuring from the date the
goods were delivered; one court which also dealt with fresh mushrooms has decided that notice
given in fifteen days is untimely.22 Therefore, fifteen days are untimely.
(3) It is inadmissible if CLAIMANT utilizes Noble Month to allege the notice were given in
reasonable time
Noble month is a doctrine which applies an average of one month to determine the
reasonable time in Article 39(1) CISG. However, no fixed period, whether fourteen days, one
month or otherwise, should be considered as reasonable in the abstract without taking into
account the circumstances of the case.23 Also, a period of one month to give notice must be
rejected, as it is not universally accepted. 24 Additionally, Noble month was developed solely
Netherlands 18 July 2006 Appellate Court Arnhem (Potting soil case).
[Available at: http://cisgw3.law.pace.edu/cases/060718n1.html];
Switzerland 9 March 2006 Kantonsgericht [District Court] Appenzell-Auserrhoden (Fitness equipment case).
[Available at: http://cisgw3.law.pace.edu/cases/060309s1.html]

21 Hong kong [ICC Award No. 9083 (1999); OGH, 14 January 2002; OGH, 27 August 1999; LG
Tbingen, 19 June 2003; Honsell/MAGNUS, Art. 39 para. 22; REINHART, Art. 39 para. 5;
Staudinger/MAGNUS, Art. 39 para. 49; KAROLLUS, pp. 27, 28].
22 CISG Advisory Council Opinion No. 2, Examination of the Goods and Notice of Non-Conformity Article 38
and 39. [Available at: http://www.cisg.law.pace.edu/cisg/CISG-AC-op2.html]

23 UNCITRAL Digest of Case law on the United Nations Convention on the Contracts for the International Sale of
Goods.[Available at: https://www.uncitral.org/pdf/english/clout/CISG-digest-2012-e.pdf]

24

Daniel

Girsberger,

The

Time

Limits

of

Article

http://www.cisg.law.pace.edu/cisg/biblio/girsberger.html]

39

CISG

(2005/2006),

p.247.[Available

at:

by the courts of one region and seems out of tune with both the letter and the spirit of the flexible
CISG rules.25
Furthermore, Noble month is not to be taken too literally as always being one month. It
is intended as a yardstick, an outer framework of one month for notification, which can then be
altered depending on the specific factors concerning the goods including perishability. 26 The
circumstances of the case at hand relating to perishable goods, Noble month, thus, in general,
could not be applied.
(4) CLAIMANT failed in providing proper related certification (SGS inspection report) after
giving notice of non-conformity.
As stipulated by the Contract, when filing the claim, CLAIMANT was bound to provide
a certification supporting his claim issued by any independent person but with RESPONDENTs
approval.27 As a matter of facts, the inspection report was issued by SGS Company; however, the
Company has never been approved by RESPONDENT. CLAIMANT, therefore, violated his
obligation of providing certification supporting his claim on non-conformity.

ISSUE II.
A. CLAIMANT DOES NOT HAVE THE RIGHT TO DECLARE THE CONTRACT
AVOIDED.

25 Joseph M. Lookofsky, Understanding the CISG, 3rd (worldwide) edition (The Hague: Wolters Kluwer, 2008),
p.87;Sanna Kuoppala, Examination of the Goods under the CISG and the Finnish Sale of Goods Act (Turku, 2000),
para. 4.4.1.4. [Available at: http://www.cisg.law.pace.edu/cisg/biblio/kuoppala.html];
Daniel Girsberger, The Time Limits of Article 39 CISG, 25 Journal of Law and Commerce 1 (2005/2006), p.17.
[Available at: http://www.cisg.law.pace.edu/cisg/biblio/girsberger.html];
Harry M. Flechtner, Funky Mussels, a Stolen Car, and Decrepit Used Shoes: Non-Conforming Goods and Notice
thereof under the United Nations Sales Convention, 26 Boston University International Law Journal (2008).
[Available at: http://www.cisg.law.pace.edu/cisg/biblio/flechtner8.html]

26 Dr. Camilla B. Andersen, Article 39 of the CISG and its noble month for notice-giving; a (gracefully) ageing
doctrine, p. 187.

27 Moot Problem, para. 3, lines 7-8.

10

RESPONDENT delivered goods in conformity with the Contract, thus did not commit
any breach under the Contract. Therefore, CLAIMANT is not entitled to avoid the Contract
under Article 49 CISG.
Should the Tribunal decide that there was a breach of Contract, CLAIMANT, also, could
not declare the Contract avoided since it did not amount to a fundamental breach under Article
25 CISG due to following reasons:
(1) CLAIMANT was not substantially deprived of what it was entitled to expect under the
Contract.
(a) CLAIMANTs expectation was not what it was entitled to expect under the Contract.
In order to rank as fundamental, a breach must nullify or essentially depreciate the
aggrieved party's justified contract expectations.28 A partys expectations under a contract are to
be discerned from the terms of the Contract and other circumstances preceding the contract, such
as contractual negotiations.29
In the case at hand, since the Contract clearly stated the requirements of the mushrooms
which were 2015 fresh goods and in similar size, 30 and the parties had never stipulated the size
of the mushrooms when consulting about the quality of the mushrooms, CLAIMANT is not
entitled to expect the mushrooms must be in bigger size than that of the samples. Though
RESPONDENT promised to provide CLAIMANT with the mushrooms which are better quality
than the samples,31 there is variety of elements to assess the quality of mushrooms (such as
fragrance, color, size, etc). Additionally, CLAIMANT and RESPONDENT had never done

28 UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of
Goods (2012 Edition), Article 25, para. 3. [Available at: https://www.uncitral.org/pdf/english/clout/CISG-digest2012-e.pdf]

29 Ferrari, Fundamental Breach of Contract Under the UN Sales Convention 25 Years of Article 25 CISG (Spring
2006) 25 J. Law and Commerce, p.497.[Available at: http://www.cisg.law.pace.edu/cisg/biblio/ferrari14.html]

30 Moot Problem, para. 3, lines 1-3.

31 Moot Problem, para. 2, lines 4-6.
11

business with each other before,32 thus, RESPONDENT cannot be expected to know such a
special requirement of mushrooms size. CLAIMANTs expectation of the bigger size of the
mushrooms thus was not reasonable under the Contract.
In regard to the package of the mushrooms, CLAIMANT is entitled to expect the
mushrooms to be packed in boxes. Nonetheless, it was pointed out that, where the seller fails in
his duty to pack or insure the goods but they arrive safely, there is no detriment. 33 Since
detriment is the first criterion to determine whether a breach is fundamental, RESPONDENTs
divergent package manner which caused no injury to CLAIMANT thus is considered nonfundamental breach.
(b) CLAIMANTs purpose to conclude the Contract was not substantially deprived.
A fundamental breach will be determined by the factor, inter alia, whether the purpose of
the contract is frustrated by the breach. 34 Also, the substantiality of the detriment to the buyer
may be ascertained by having regard to the purpose for which the goods are bought.35 Courts
have held that a party has been substantially deprived of what he is entitled to expect where
nonconforming goods cannot be repaired, used or resold with reasonable effort. 36 Additionally, a
32 Moot Problem, para 1, lines 4-5.
33 Robert Koch, The Concept of Fundamental Breach of Contract under the United Nations Convention on
Contracts

for

the

International

Sale

of

Goods

(CISG),

p.

263.[Available

at:

http://www.cisg.law.pace.edu/cisg/biblio/koch.html#III]

34 Peter Huber, Alastair Mullis, The CISG: A new text book for students and practitioners, Sellier.
European Law Publisher, Munich, 2007, p. 214.
35 CISG Advisory Council Opinion No. 5, The buyer's right to avoid the contract in case of non-conforming goods
or documents, part 4 (4.3).[Available at: http://www.cisg.law.pace.edu/cisg/CISG-AC-op5.html#1]

36

France

23

January

1996

Supreme

Court (artificially

sugared

wine);

[Available

http://cisgw3.law.pace.edu/cases/960123f1.html]
Germany 18 January 1994 Appellate Court Frankfurt (shoes with cracked leather);
[Available at: http://cisgw3.law.pace.edu/cases/940118g1.html]
Germany 5 April 1995 District Court Landshut (T-shirts that shrink by two sizes after the first washing);

12

at:

non-conformity relating to quality remains a mere non-fundamental breach of contract as long as

the buyer, without unreasonable inconvenience, can use the goods or resell them, even if the
resale requires a rebate.37
As a matter of facts, CLAIMANT is a retail company, which distributes products to
grocery stores throughout the country,38 thus CLAIMANTs purpose of purchasing the
mushrooms was to resell them. Apparently, CLAIMANT did succeed in selling the mushrooms
despite the low price. Therefore, CLAIMANTs purpose is not frustrated.
(c) RESPONDENT could not foresee the consequences of the alleged breach.
A breach is fundamental unless the party in breach can prove that he did not foresee and
had no reason to foresee such a result. 39 The actual foreseeability of the detriment caused by the
breach will depend on the breaching party's knowledge of the facts surrounding the transaction.40
As a matter of facts, the size of the mushrooms was never stipulated both in the Contract
and during consultation. Moreover, RESPONDENT and CLAIMANT had never done business

[Available at:http://cisgw3.law.pace.edu/cases/950405g1.html]
Switzerland 18 May 2009 Bundesgericht [Federal Supreme Court] (packaging machine reached only one-third of
the agreed level of production).
[Available at: http://cisgw3.law.pace.edu/cases/090518s1.html]

37 UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of
Goods (2012 Edition), Article 49, para. 16.[Available at: http://www.cisg.law.pace.edu/cisg/text/digest-201249.html]

38 Moot Problem, para. 1, lines 2-4.

39 GUIDE TO CISG ARTICLE 25, Secretariat Commentary - Text of Secretariat Commentary on
article 23 of the 1978 Draft [draft counterpart of CISG article 25] [Fundamental breach],
para. 4.[Available at: http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-25.html]

40 Andrew Babiak, Defining "Fundamental Breach" Under the United Nations Convention on Contracts for the
International Sale of Goods, p.122.[Available at: http://www.cisg.law.pace.edu/cisg/biblio/babiak.html]

13

with each other before.41 Thus, RESPONDENT and a reasonable person of the same kind in the
same circumstances could not foresee that the small mushrooms might cause CLAIMANT any
damages. As for the package of the goods, since CLAIMANT did not mention any further
purposes of packing the goods in boxes rather than to preserve and protect the mushrooms,
RESPONDENT, indeed well preserved and protected the goods, was unlikely to foresee and
could not have foreseen the defects might deprive CLAIMANT of what he was entitled to expect
under the Contract.
(d) In any case, a fundamental breach should not be concluded since avoidance is only a last
resort remedy.
It should be noted that the threshold for establishing a fundamental breach is a high one
since avoidance is a remedy of last resort under the CISG. 42 One Court recently held that: "It is
hereby important that one of the underlying principles for the implementation of the CISG is that
a declaration of avoidance of a sales contract should be the mere ultima ratio, i.e., last resort".43
Therefore, as the CISG practice evidently evidences, avoidance in an international sales
context is regarded as a particular severe - and therefore "exceptional" - remedy, and many courts
have indeed showed great reluctance to allow a party injured by a breach to avoid and thus put an
end to the whole CISG contractual relationship. 44 The aforementioned principle is similarly
evidenced in a case where the Court held that the contract shall be avoided only in exceptional

41 Moot Problem, para.1, lines 4-5.

42 Ulrich Magnus, The Remedy of Avoidance of Contract under CISG General Remarks and Special Case (200506) 25 J. of Law and Commerce, p.423.[Available at: http://www.cisg.law.pace.edu/cisg/biblio/magnus2.html]

43

Germany

27

February

2002

District

Court

Mnchen

(Globes

case).[Available

at:

http://cisgw3.law.pace.edu/cases/020227g1.html]

44 Joseph Lookofsky, The 1980 United Nations Convention on Contracts for the International Sale of Goods, p.
123.[Available at: http://www.cisg.law.pace.edu/cisg/biblio/liu7.html]

14

circumstances and that the right to declare a contract avoided is the aggrieved party's most
serious remedy. 45
Thus, this remedy should only be granted to the buyer if his legitimate interests cannot be
satisfied by any other means.46 It is also the ruling in the case, where the Court found that, in
determining, in the absence of express contractual stipulations, whether the aggrieved party's
right to avoidance is justified, and regard is to be had to the CISG's tendency to limit avoidance
of contract". 47
In the alternative, as a matter of facts, CLAIMANT could have exercised other relevant
remedies (e.g. price reduction under Article 50 CISG) that could compensate CLAIMANTs
detriment to a certain extent. To sum up, the Tribunal should not confirm a fundamental breach
since avoidance should be the last resort.
(2) Furthermore, CLAIMANT did not give RESPONDENT any opportunities to cure the
defective goods, thus RESPONDENTs breach did not constitute a fundamental one.
Some legal writers when look exclusively at the curability of a given breach determine
fundamental breach by looking at whether cure is possible at all. In their view, there is no
fundamental breach when the breach is curable. 48 Additionally, there are courts that have adopted
45

Switzerland

28

October

1998 Bundesgericht (Federal

Supreme

Court).[Available

at:

http://cisgw3.law.pace.edu/cases/981028s1.html]

46 Peter Huber, Alastair Mullis, The CISG: A new text book for students and practitioners, Sellier.
European Law Publisher, Munich, 2007, p. 209.
47

Germany

April

1996

Supreme

Court

(Cobalt

sulphate

case).[Available

at:

http://cisgw3.law.pace.edu/cases/960403g1.html]

48 Robert Koch, The Concept of Fundamental Breach of Contract under the United Nations Convention on
Contracts

for

the

International

Sale

of

http://cisgw3.law.pace.edu/cisg/biblio/koch.html]

15

Goods

(CISG),

p.

228.[Available

at:

the view that the buyer must first allow the seller to cure any breach (even a fundamental one)
before avoiding, and who denies that there is a fundamental breach where the buyer has not
given the seller the opportunity to remedy the failure of performance.49
Here, after finding the non-conforming mushrooms, CLAIMANT sent to RESPONDENT
the notice of non-conforming goods and simultaneously declared to place the goods at
RESPONDENTs disposal and asked for compensation, without giving RESPONDENT any
chances to cure the defects. Granted that CLAIMANT failed to perform its obligation to give
RESPONDENT the opportunity to remedy the failure of performance, there was no fundamental
breach.
From all mentioned above, RESPONDENTs delivery does not establish a fundamental
breach under Article 25 CISG, therefore, CLAIMANT is precluded from the right of avoidance
of the Contract under Article 49 CISG.
B. CLAIMANT DID NOT MAKE DECLARATION OF AVOIDANCE IN
REASONABLE TIME
If the fundamental breach involves non-conformity and the buyer has not notified the
seller in accordance with Article 39 of the CISG, the right to avoid is already lost. 50 As discussed
in ISSUE (i) (B), CLAIMANT failed to notify RESPONDENT within a reasonable time under
Article 39 CISG; furthermore, RESPONDENTs breach did not constitute fundamentality.
CLAIMANT thus was precluded from the right to declare the Contract avoided.
Should the Tribunal hold that there was a fundamental breach, then CLAIMANT bears
the burden of proving that the declaration avoidance and dispatched the required notice pursuant

49 UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of
Goods (2012 Edition), Article 48, para. 2.[Available at: https://www.uncitral.org/pdf/english/clout/CISG-digest2012-e.pdf]

50 Peacock/ Darren, Avoidance and the Notion of Fundamental Breach Under the CISG: An English Perspective
[2003] IntTBLawRw 4; (2003) 8 International Trade and Business Law Review 95.[Available at:
http://www.austlii.edu.au/au/journals/IntTBLawRw/2003/4.html]

16

to Article 26 CISG. 51 Nonetheless, in any case, CLAIMANTs declaration of avoidance was not
given within a reasonable time after he knew the breach pursuant to Article 49(2) (b) (i) CISG.
According to Fritz Enderlein and Dietrich Maskow, a reasonable time in this case more or less
means immediately in order to avoid the possibility of increased expense and risk associated with
care and redisposition of unwanted goods. 52 CLAIMANT notified RESPONDENT more than
two weeks after he discovered the non-conforming goods on 24 September 2015.53 This time
period cannot be regarded as reasonable since it was not immediate; therefore, CLAIMANTs
declaration to avoid was not within a reasonable time.
ISSUE (iii).
CLAIMANT DOES NOT FULFIL ITS OBLIGATION TO MITIGATE THE LOSS.
(1) CLAIMANT sold the mushrooms at a very unreasonable low price, thus failed to take
reasonable measures in the circumstances to mitigate the losses provided by Article 77
CISG.
Article 77 CISG requires the aggrieved party to perform such measures as are
reasonable in the circumstances to mitigate the loss. To define reasonableness, Zeller suggests
that this is not a question of law but rather a question of fact as every case will have different
circumstances.54 In Opie's opinion, these circumstances include the amount of time within
51 UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of
Goods

(2012

Edition),

Article

26,

para.

9,Article

49,

para.

25.[Available

at:

https://www.uncitral.org/pdf/english/clout/CISG-digest-2012-e.pdf]

52 Peacock/ Darren, Avoidance and the Notion of Fundamental Breach Under the CISG: An English Perspective
[2003] IntTBLawRw 4; (2003) 8 International Trade and Business Law Review 95.[Available at:
http://www.austlii.edu.au/au/journals/IntTBLawRw/2003/4.html]

53 Moot Problem, paras. 5-6.

54 Bruno Zeller, Comparison between the provisions of the CISG on mitigation of losses (Art.
77)

and

the

counterpart

provisions

of

http://www.cisg.law.pace.edu/cisg/text/peclcomp77.html]

17

PECL

(Art.

9:505),

part

II.[Available

at:

which the action was undertaken to diminish an avoidable loss and whether a substitute
transaction was conducted on an arm's length basis. Also, the reasonableness of the measures is
to be interpreted taking into account the competing interests of the parties, as well as
commercial customs and the principle of good faith. Furthermore, different types of factors are
to be considered such as perishability of the goods, etc. 55
In the case at hand, although CLAIMANT sold the mushrooms, however, he failed to do
so in a reasonable time, thus, caused the substantial derogation on the price of mushrooms.
CLAIMANT definitely was able to sell the goods earlier, nevertheless, it was not until 28 th
December, which means seventy seven days after the date CLAIMANT gave notice of nonconforming goods and declared the Contract avoided (12 October 2015), 56 that the mushrooms
were sold. It was reasonable that after sending two faxes on 28 October 2015 and 20 November
2015 and receiving no response from RESPONDENT, CLAIMANT should have immediately
sold them; however, only thirty nine days later did CLAIMANT sold the mushrooms.
Even if, CLAIMANT alleges he had to wait until the acceptance of RESPONDENT
about SGS inspection that he was able to sell the goods, it was unacceptable. Since CLAIMANT
indeed just sent two sacks of mushrooms for SGS inspection, CLAIMANT, therefore, should
have sold the remain of mushrooms to mitigate the loss before receiving RESPONDENTs reply.
Finally, CLAIMANT was aware and should not have been unaware that the fresh
mushrooms were perishable goods, the delay in reselling them made the mushrooms deteriorate,
thus, significantly influenced the price of the mushrooms. Indeed, CLAIMANT sold it at the
price of US $120 per sack,57 which was 60% lower than the purchase price. This loss would have
been immensely reduced if CLAIMANT had sold the goods earlier. Since CLAIMANT failed to
satisfactorily mitigate the loss, he should be precluded from recovering those avoidable losses.

55 Elisabeth Opie, Commentary on the manner in which the UNIDROIT Principles may be used to interpret or
supplement Article 77 of the CISG, part III. [Available at: http://www.cisg.law.pace.edu/cisg/principles/uni77.html]

56 Moot Problem, para. 6.

57 Moot Problem, para. 8, line 2.
18

(2) CLAIMANT did not give notice of the intention to sell the goods to RESPONDENT under
Article 88(2) CISG.
Other articles of the Convention may require parties to take specific measures to protect
against losses. Articles 85 to 88 CISG provide, for example, that buyers and sellers must take
reasonable steps to preserve goods in their possession following breach.58
Since CLAIMANT was holding the mushrooms at the time of the dispute, he must take
such steps to preserve them as are reasonable in the circumstances pursuant to Article 86(1)
CISG.59 As a result, CLAIMANT is required to fully perform its obligations under Article 88(2)
CISG.60
Nonetheless, it was found that CLAIMANT failed to give notice to RESPONDENT of
his intention to sell although it was possible. It was such a long period from 12 October 2015, the
date CLAIMANT gave notice of non-conformity and declared the Contract avoided to 28
December 2015 when he actually sold the mushrooms. During that period, CLAIMANT always
desired to sell the goods as it was his duty under Article 86 CISG and he was definitely able to
notify RESPONDENT of his intention to sell the mushrooms. Indeed, CLAIMANT had sent
three faxes to RESPONDENT, however, none of them mentioned that CLAIMANT would sell
the mushrooms, hence violation of Article 88(2) CISG.
From all mentioned above, CLAIMANT did not fulfill its obligation to mitigate the loss.
REQUEST FOR RELIEF
58 2012 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods,
Article 77, para. 4.[Available at: http://www.cisg.law.pace.edu/cisg/text/digest-2012-77.html]

59 See Article 86(1) CISG: If the buyer has received the goods and intends to exercise any right under
the contract or this Convention to reject them, he must take such steps to preserve them as are reasonable
in the circumstances. He is entitled to retain them until he has been reimbursed his reasonable expenses
by the seller.
60 See Article 88(2) CISG: 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. To the extent possible he must give notice to the other
party of his intention to sell.
19

In the light of above submissions, RESPONDENT respectfully requests the Tribunal to

find that:
(1) RESPONDENTs delivery was in conformity with the Contract.
(2) CLAIMANT did not have the right to declare the Contract avoided.
(3) CLAIMANT did not fulfill its obligation to mitigate the loss.
RESPECTFULLY SUBMITTED,
RESPONDENT.

20