Remedies III—Avoidance: Price Reduction

Abstract This chapter analyses the remedies of contract avoidance and price reduction in international sales contracts under the CISG and PICC. It clarifies the conceptual distinctions between avoidance, termination, rescission, and invalidity, and explains why avoidance is a last-resort remedy, justified only in cases of fundamental breach or after an additional period (nachfrist) for deliver (CISG) or performance (PICC). The chapter examines avoidance in various contexts: non-delivery, delayed payment, non-conforming goods, defects in title, documentary sales, and anticipatory breach, as well as its application in instalment and long-term contracts. It also addresses partial avoidance, suspension of performance, stoppage in transit, and the requirement to declare avoidance within a reasonable time. Finally, it explores the price reduction remedy as an alternative to avoidance, illustrating its calculation and interaction with other remedies, and its role in maintaining contractual balance despite non-conforming goods.