[简答题]Within the context of the UN Convention on Contracts for the International Sale of Goods, explain the meaning of, and rules relating to, damages for breach of contract. (10 marks)

参考答案: Damages are the monetary compensation that a party in breach of contract has to pay to compensate the innocent party for any loss suffered by them, including loss of profit. The issue of damages is dealt with in section II of the UN Convention on Contracts for the International Sale of Goods (CISG). The general position is stated in Article GD, which provides that damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. However, any such loss must have been reasonably foreseeable by the party in breach, or in the words of Article GD ‘Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.’In addition to this general provision CISG also details two particular situations. Thus Article GE applies where the innocent party has avoided the contract and, if they are the buyer, has bought goods in replacement or, if they are the seller, has resold the goods. In such circumstances the innocent party may recover the difference between the contract price and the price in the substitute transaction. This award is in addition to any other damages recoverable under Article GD. It should be noted that the innocent party must act reasonably and if they re-sell at less than the market price, or buy at more than the market price they will be required to demonstrate that such action was reasonable. Article GF on the other hand deals with the situation where the innocent party has avoided the contract but has not made a purchase or resale under Article GE. In this situation they may recover the difference between the price fixed by the contract and the current price at the time of avoidance, as well as any further damages recoverable under Article GD. However, if the party claiming damages has taken over the goods before seeking to avoid the contract, then the current price is that operative at the time they took over the goods rather than at the time of avoidance. The reason for this provision is to prevent a buyer from holding onto defective goods until a fall in the market makes avoidance advantageous. Further it should also be noted that in any case the buyer will lose their right to avoid if they do not do so within a reasonable time after they knew, or ought to have known, of the breach. Article GF also provides that the current price is the price prevailing at the place where delivery of the goods should have been made or, if there is no current price at that place, the price at such other place as serves as a reasonable substitute. In the latter situation allowance should be made for any difference in the cost of transporting the goods. Finally Article GG sets out the need for the party claiming damages on a breach of contract to take reasonable measures to mitigate the loss, including loss of profit, resulting from the breach. If the claimant fails to mitigate the loss then the party in breach may claim a reduction in the damages by the amount by which the loss should have been mitigated.