Unwinding of Contract

Abstract This chapter examines the legal mechanisms for unwinding international commercial contracts, focusing on invalidity and avoidance under the CISG and PICC. It distinguishes between unwinding due to invalidity, where contracts fail to meet essential validity requirements, and avoidance, which terminates a valid contract due to breach. The chapter analyses restitution and the return of benefits under both instruments, including the treatment of goods, monetary compensation, and allocation of risk when restitution in kind is impossible. It explores how domestic laws, unjust enrichment principles, and property rules interact with the CISG and PICC frameworks. Special attention is given to the unwinding of long-term contracts and the preservation, sale, or disposition of goods under CISG Articles 85 to 88 CISG.