Availability of the Disgorgement of Profits Under the CISG

Abstract

The United Nations Convention on Contracts for the International Sale of Goods (CISG or the Convention) does not expressly state whether the remedy of disgorgement of profits can be awarded in cases of breach of contract. In this article, we argue that the disgorgement of profits is available both as a method for the calculation of damages under Art. 74 and as a remedy on its own when the remedy of compensatory damages fails to fulfill its functions. Therefore, we argue that the disgorgement of profits is in line with Art. 7(1) and Art. 7(2) of the Convention. However, the availability of the disgorgement of profits shall not be understood as undermining the primacy of compensatory damages and should be accepted only in exceptional cases, namely where second sales of non-substitutable goods and breaches of certain contractual stipulations make the calculation of loss impossible or impracticable.