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St. Thomas Law Review

Reza Beheshti

First Page

413

Document Type

Article

Abstract

This article strives to analyze the rules concerning monetary damages under two different legal regimes for the sale of goods: the Sale of Goods Act of 1979 ("SGA") and the Proposal for a Common European Sales Law in 2011 ("CESL"). It is not the purpose of this article to provide an exhaustive exposition of the doctrines of either regime. Instead, the focus will be on the central aspects of monetary damages, such as the aim of damages and general rules governing the measure of damages. It should be noted that inevitably there will be some references to the commentaries on the United Nations Convention on Contracts for the International Sale of Goods of 1980 ("CISG"), as there is only a limited (though growing) body of literature concerning the CESL. Moreover, the CESL has textual uniformity with the CISG; this fact can particularly be seen on the rules governing damages. As Loss and Schelhaas have stated: "[t]he right to means that CESL does not provide commercial contracts with any better opportunities than does CISG in this regard."' This might be seen a rational reason for applying the CISG to cases where the parties have chosen the CESL as the governing legal regime. Damages are examined in the context of international sales of "manufactured goods." Manufactured goods can be broadly classified in two groups: first, similar manufactured goods produced in large volumes; second, manufactured goods conforming to the special orders of buyers (reflected in contract terms), i.e. unique or bespoke goods. The former group constitutes the larger part of manufactured goods, and this will be taken into account in this article. Manufactured goods produced in large volumes are strictly neither "fungible goods" nor "unique goods." These goods are something between these two categories of goods. In other words, they have characteristics of both fungible and unique goods, but in nature they are different. Their difference arises from the fact that they have been manufactured on the basis of the special orders and that their equivalent could also be found in the market. They are similar to unique goods, as they have been produced on the basis of special orders reflected in the contract terms. They are similar to fungible goods, as their equivalents can be found in the market. They can therefore be called "innominate goods." A helpful example of these sorts of goods are cars. Additionally, this article will attempt to explore those aspects of the law of damages that shed light on the degree to which the criteria of an evaluative framework are satisfied. This novel evaluative framework consists of tests of certainty, performance interest, efficiency, and the norms of relational theory of contract. These criteria will be explained later. The existing differences between the rules governing damages under these two legal regimes are compared on the basis of this evaluative framework in order to identify which system has adopted the better approach for compensating buyers of "innominate goods." In the following section, the law of damages under the SGA and the CESL will be outlined, with the central aspects being identified and explained in the context of those two legal regimes. In the second substantive part of this article, the major differences between the laws of damages under these two legal regimes will be compared and evaluated.

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