MEMORANDUM FOR CLAIMANT

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Rheinische Friedrich-Wilhelms-Universität Bonn A. RESPONDENT’s breach of contract entitles CLAIMANT to claim damages 81. RESPONDENT repudiated and thereby breached the contract pursuant to Art. 72 CISG and subsequently failed to perform its obligations as set forth in Artt. 53 et seq. CISG. Both the repudiation [Art. 72 CISG] and the subsequent failure to perform any obligations [Art. 61(1)(b)] give CLAIMANT the right to claim damages. Though Art. 72 CISG does not explicitly provide a right to claim damages, it is clear that in case of an anticipatory repudiation the aggrieved party is entitled to recover against the other party damages it suffered as a consequence of the other party’s repudiation [Downs Investments v. Perwaja Steel (Australia)]. Since it is a basic principle of the CISG that damages are payable in respect of any breach of contract, it was decided at an early stage of the drafting of the CISG that no express provision would be necessary [Schlechtriem et al, Art. 72 note 25, 35 with reference to the legislative history]. 82. In any event, CLAIMANT is entitled to claim damages as a consequence of RESPONDENT’s anticipatory breach. B. CLAIMANT suffered lost volume damages in the amount of $ 575,477.98 as a consequence of RESPONDENT’s breach 83. As provided in Art. 74 CISG, CLAIMANT is entitled to recover its lost profit (a.). CLAIMANT has to be given this loss of profit as compensation for its lost volume damages (b.). These damages were a consequence of RESPONDENT’s breach (c.). The profit CLAIMANT lost is 22% of the contract price, i.e. $ 575,477.98 (d.). a. CLAIMANT is entitled to recover its loss of profit 84. CLAIMANT’s damages have to be calculated according to Art. 74 CISG. This article provides the basic rule for the calculation of damages for losses suffered by one party as a result of the other party’s breach [Schlechtriem et al, Art. 74 note 2]. The rule seeks to place the injured party in the same economic position it would have been in had the other party properly performed its contractual obligations [Secretariat Commentary on Art. 70 of the 1978 Draft Convention; Delchi Carrier SpA v. Rotorex Corporation (U.S.); Honnold et al, Art. 74 note 503]. In other words, CLAIMANT has to be given the benefit of its bargain, 29
Rheinische Friedrich-Wilhelms-Universität Bonn which consists inter alia of the expectation interest [cf. Sutton, Ohio State Journal 1989, III.B.1.]. As explicitly stated in Art. 74 CISG, this includes CLAIMANT’s loss of profit. b. CLAIMANT was in a lost volume situation 85. RESPONDENT’s breach of contract diminished the total volume of sales CLAIMANT could have carried out by one, namely the sale to RESPONDENT. Therefore, it put CLAIMANT in a lost volume situation [cf. OGH, 28 April 2000 (Austria); Honnold et al, Art. 74 note 503, Saidov, I.2.(c)]. Due to RESPONDENT’s breach, CLAIMANT suffered lost volume damages because it lost the (additional) profit it would have earned from the contract with RESPONDENT. 86. CLAIMANT has to be compensated for its lost volume damages since any subsequent sale of polypropylene film to other customers cannot be regarded as a replacement for the contract between CLAIMANT and RESPONDENT [cf. OGH, 28 April 2000 (Austria); Neri v. Retail Marine Corp. (U.S.); Saidov, I 2. (c)]. The polypropylene film is a standard product that CLAIMANT would not have manufactured specifically for RESPONDENT [Procedural Order 2, Clarification No. 53]. CLAIMANT had the manufacturing capacity to produce the 1350 tons for RESPONDENT in addition to any quantity to be produced for other customers [Procedural Order 2, Clarification No. 54]. Thus, CLAIMANT had the capacity to supply any quantity to other customers independently from its contract with RESPONDENT. For this reason, there is no causal connection between RESPONDENT’s breach and any subsequent transaction. CLAIMANT would have made other sales in any event. Accordingly, in order to put CLAIMANT in the position it would have been in had the contract with RESPONDENT been performed, it has to be awarded the additional profit it would have earned from the contract with RESPONDENT. c. CLAIMANT’s loss of profit was a consequence of RESPONDENT’s breach 87. RESPONDENT’s breach directly caused CLAIMANT’s lost volume damages. CLAIMANT would not have suffered a loss of profit but for RESPONDENT’s repudiation of the contract. 30
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On Behalf of TENTH ANNUAL WILLEM C.
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Rheinische Friedrich-Wilhelms-Unive
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Page 19 and 20: Belgium Rheinische Friedrich-Wilhel
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MEMORANDUM FOR CLAIMANT

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