Rapporteur: Professor John Y. If the contract is avoided and if, in a reasonable manner and within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the difference between the contract price and the price in the substitute transaction as well as any further damages recoverable under article Article 76 CISG 1 If the contract is avoided and there is a current price for the goods, the party claiming damages may, if he has not made a purchase or resale under article 75, recover the difference between the price fixed by the contract and the current price at the time of avoidance as well as any further damages recoverable under article If, however, the party claiming damages has avoided the contract after taking over the goods, the current price at the time of such taking over shall be applied instead of the current price at the time of avoidance.
Rather, they provide aggrieved parties with alternative methods that may be used to measure damages when a contract has been avoided. An aggrieved party entitled to damages under Article 75 may also recover any further damages under Article If the contract does not fix a price or there is no current price within the meaning of Article 76, damages may be calculated under Article An aggrieved party entitled to damages under Article 76 may also recover any further damages under Article If the aggrieved party has avoided the contract but has not entered into a substitute transaction, then Article 76 permits the abstract calculation of damages under certain conditions.
However, these provisions are not mandatory in nature; aggrieved parties can choose whether to calculate damages pursuant to them. Accordingly, recovery under these provisions should not place the aggrieved party in a better position than it would have been in had the contract been performed.
If the contract is declared avoided for breach by the buyer, the seller is free to resell the goods. As a rule, it will be in his interest to do so. Analogously, if the contract is avoided for breach by the seller, the buyer will be interested in purchasing the same goods from another seller if possible.
If the non-breaching party succeeds in reselling or replacing the goods, his effective loss will thereby be diminished. Article 75 takes this into account and sets forth special rules for calculating damages in such cases. All the circumstances surrounding the substitute transaction will be evaluated; therefore, a transaction that was carried out above the market price may, nevertheless, meet the reasonableness standard.
