CISG Advisory Council Opinion No. 6 [*]
Calculation of Damages under CISG Article 74[**]
Opinion [Black letter text]
Comments
Annex: Case Overview
Article 74 CISG
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. 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.
OPINION
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Article 74 reflects the general principle of full compensation.
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The aggrieved party has the burden to prove, with reasonable certainty, that it suffered loss. The aggrieved party also has the burden to prove the extent of the loss, but need not do so with mathematical precision.
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3.
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The aggrieved party is entitled to non-performance damages, which is typically measured by the market value of the benefit of which the aggrieved party has been deprived through the breach, or the costs of reasonable measures to bring about the situation that would have existed had the contract been properly performed.
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A.
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The aggrieved party is entitled to any net gains prevented as a result of the breach.
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B.
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Lost profits recoverable under Article 74 may include loss of profits that are expected to be incurred after the time damages are assessed by a tribunal.
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C.
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Lost profits include those arising from lost volume sales.
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The aggrieved party is entitled to additional costs reasonably incurred as a result of the breach and of measures taken to mitigate the loss.
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5.
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Under Article 74, the aggrieved party cannot recover expenses associated with litigation of the breach.
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