A Study on the Utilizing of Adequate Assurance Demand for Contract Performance Prior to the Contract Performance Date in International Sales Contracts

A Study on the Utilizing of Adequate Assurance Demand for Contract Performance Prior to the Contract Performance Date in International Sales Contracts

Purpose - This research aims to explore the use of adequate assurance in international sales contracts. It further examines the practical efficiency of the right of a party to request such assurance, exercised in good faith, in response to an anticipatory breach of the contract by the other party. Design/Methodology - The research methodology involves analyzing a case study focused on decisions made under Articles 71 and 72 of the UN Sales Convention, which pertain to the issue of adequate assurance. Findings - The findings suggest that demanding adequate assurance serves a dual purpose; it not only confirms the other party’s willingness and ability to perform under the contract but also safeguards the expected profits of the party acting in good faith. Such assurance is crucial in preventing a situation wherein time elapses without meaningful progress, especially when a party suspends performance. Originality/value - In international sales contracts, from the conclusion of the contract to the performance date, implementing an adequate assurance demand regime proves beneficial in situations where there is an increased risk of contract default by the other party. This approach is particularly relevant when the other party indicates an intention not to fulfill their obligations, as well as in the context of continuous supply contracts.