Art 46 par 3 and Art 48, consider, why it exists.

How they
work
Introduction
This paper delves into the nuances of Articles 46(3) and 48 of the United Nations Convention on
Contracts for the International Sale of Goods (CISG), exploring their purpose, functionality, and
the balance they create in international sales law. It critically examines how these articles provide
remedies for non-conforming goods, offering a deep understanding of the buyer's rights to repair
and the seller's proactive steps to address contract violations.

Two Forms of Remedies Under Article 46 CISG – Substitute Delivery

and Repair
Under Articles 46(2) and (3) CISG, buyers may require the seller to remedy the lack of
conformity by reparation of the goods, or delivery of substitute goods if the lack of conformity
constitutes a fundamental breach of the contract. Requests for reparation or substitution must be
made in combination with a notice within the time limitation according to Article 39 CISG or a
reasonable time thereafter. The buyer must also grant a reasonable period for the seller to repair
or deliver substitute goods. Only if such period has passed with the seller’s refusal or non-
performance, the buyer can avoid the contract under Article 49 CISG. After substitution or
repair, the buyer must still follow with examination and notice requirements under Articles 38,
39, and 43 CISG (particularly for third-party rights or claims under Articles 41 and 42 CISG). If
the lack of conformity keeps going even after the sellers’ repair or substitute delivery, the
remedies under Article 45 CISG are available once again for the buyer, including repair and
substitute delivery.

Article 46(3) CISG

Repair of Non-conforming Goods
Article 46(3) illustrates the buyer's right to require the seller to repair non-conforming goods.
This is applicable unless the buyer finds such repair unreasonable.
Purpose
The existence of this provision serves a pragmatic purpose. It offers a remedy that can be easier
to use and less catastrophic than replacement or contract avoidance, particularly in cases where
the non-conformity is minor or can be easily fixed. This provision balances the interests of both
parties. It allows sellers an opportunity to fix issues without losing the wholesale, and buyers can
get the expected value without the complexity of returning goods or finding replacements.
Functioning
The buyer must request the repair (buyer’s Initiative), typically close by or soon after notifying
the seller of the non-conformity (as per Article 39). The validity of the repair request is case-
specific. Factors include the nature of the goods, the extent of the defect, and the cost and
implementation ability of the repair.
Seller's Obligation
If the repair is regarded as reasonable, the seller is obligated to repair at their own cost. Repairs
are generally done where the goods are currently located.
In this key, the CISG Advisory Council opines that a fundamental breach does not exist if the
delivered goods can still be used as planned and if it is unreasonable for the buyer to refuse the
repair.

Furthermore, leading court decisions (for example, Frozen Meat Case, Swiss Federal
Supreme Court 1998) held that a non-conformity breach about the goods quality is not
fundamental if the buyer can still use or resell the goods with reasonable effort or facilities, even
with a discount.
Analogy and lack of conformity do not amount to a fundamental breach if the defects are not
major and easily repairable, or at least where the seller spends speedy repair without
discomforting the buyer (Floating Center Case, Commercial Court Canton Zurich 1995).
As was the case in SCAF Sociedad de Construçoes Aquino & Filho Lda. v. Fundicio Benito
2000, S.L., where the Court of Appeal of Barcelona declared that there was no breach of contract
as the seller had respected Articles 46(2) and 46(3) CISG by recognize the defects of the goods
and offering to replace them free of charge.
Another option is to take to contract avoidance due to a fundamental breach (Article 25) of the
contract by the seller. However, this solution should be available only as a last resort (ultima
ratio), according to the opinion of Ingeborg Schwenzer states in “Current Issues on the CISG and
Arbitration”.

Article 48 CISG - Seller’s Initiative to Remedy Non-conforming Goods

Article 48 considers the seller's right to remedy any inability to perform its obligations, including
delivering non-conforming goods, at its own initiative and expense. Article 48 (1) gives the seller
the so-called right to “cure”, which allows the seller to correct any incapacity to perform its
obligations under the contract or under the Convention, and to do so even after the date for the
performance required under the contract, provided that the realization of that right does not cause
the buyer unreasonable discomfort. If the seller has made an early non-conforming delivery
(Article 37) in comparison, permits the seller to cure up to the required date for delivery.
Purpose
This article exists to provide sellers with the opportunity to rectify their failures before the buyer
exercises other remedies, like demanding replacement or reducing the price. It serves as a
preventive measure, allowing sellers to address issues proactively, which can preserve business
relationships and reduce the need for litigation or arbitration.
Functioning
The seller can voluntarily (Seller’s Initiative) take steps to make the goods conform either by
repairing or replacing them, without waiting for a demand from the buyer. Notification: The
seller must notify the buyer of their intention to remedy and must do so without unreasonable
delay.
Buyer’s Response
The buyer may fix a reasonable period for performance. If the seller’s efforts are unsatisfactory
or untimely, the buyer can resort to other remedies. However, sometimes buyers are not
interested in “cure” proceedings and want to avoid the contract. In this case, the buyer will have
to endure responsibility for damages incurred by the seller, as in the case of ICC Court of
Arbitration N7754. It held that the buyer was not entitled to terminate the contract, because it had
denied the seller the opportunity to cure the defects in the goods (Art. 1184(3) French Civil Code
and Art. 48 CISG).
Balance of Interests
This provision balances the seller's interest in correcting their breach with the buyer's interest in
receiving goods that conform to the contract.

Why They Exist and How They Work Together

Both articles are developed to maintain the consistency of the contract and easier the
performance of contractual obligations while balancing the interests of both parties. They
provide flexible solutions to deal with non-conformities without immediately resorting to
contract termination. Article 46(3) allows buyers to seek a practical remedy when faced with
non-conforming goods, and Article 48 provides sellers to take the initiative to correct their
issues. This dual approach promotes mutual problem-solving in international sales transactions.
By providing these remedies, the CISG aims to support the principles of good faith and fair
dealing in international trade, providing both parties can navigate non-conformity issues in a
manner that minimizes losses and saves business relationships. Together, Articles 46(3) and 48 of
the CISG represent the Convention's inclusive goal of promoting predictability and fairness in
international trade, by offering structured yet flexible solutions for dealing with non-conforming
goods.
Conclusion
Articles 46(3) and 48 of the CISG realize the Convention's liabilities to fairness and
predictability in international trade. By activating buyers to seek repairs and allowing sellers to
proactively remedy contract breaches, these provisions simplify a cooperative approach to
resolving disputes over non-conforming goods. This dual mechanism not only supports
contractual integrity but also justifies the principles of good faith and fair dealing, providing both
parties can effectively manage non-conformity challenges while minimizing losses and keeping
business relationships.