UNCITRAL Digest of Case Law on the United Nations

UNCITRAL Digest of Case Law on the United Nations
UNCITRAL
UNCITRAL: Digest of Case Law on the United Nations Convention on the International Sale of Goods
UNCITRAL
Digest of Case Law on the United Nations
Convention on the International Sale of Goods
FOR UNITED NATIONS USE ONLY
United Nations publication
ISBN 978-92-1-133790-7
Sales No. E.08.V.15
*0851939*
Printed in Austria
V.08-51939—September 2008—680
UNITED NATIONS
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW
UNITED NATIONS
Further information may be obtained from:
UNCITRAL secretariat, Vienna International Centre,
P.O. Box 500, 1400 Vienna, Austria
Telephone: (+43-1) 26060-4060
Internet: http://www.uncitral.org
Telefax: (+43-1) 26060-5813
E-mail: [email protected]
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW
UNCITRAL
Digest of Case Law
on the United Nations Convention
on the International Sale of Goods
UNITED NATIONS
New York, 2008
Note
Symbols of United Nations documents are composed of capital letters combined with
figures. Mention of such a symbol indicates a reference to a United Nations document.
UNITED NATIONS PUBLICATION
Sales No. E.08.V.15
ISBN 978-92-1-133790-7
This publication has not been formally edited.
Contents
Introduction to the Digest of Case Law on the United Nations Sales Convention. . . . . . . . . . . . . . . . . . . . . ix
The Convention as a Whole; Overview of Digest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
Preamble. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Part one
Sphere of applications and general provisions
Chapter I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Sphere of application (articles 1-6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Chapter I of part I: sphere of application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Article 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Article 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Article 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Article 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Article 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Article 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chapter II (articles 7-13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
General provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Article 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Article 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Article 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Article 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Article 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Article 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Article 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Part two
Formation of the contract
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Permitted reservations by contracting States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Exclusivity of part II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
iii
Validity of contract; formal requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Incorporating standard terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Commercial letters of confirmation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Interpretation of statements or conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Article 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Article 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Article 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Article 17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Article 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Article 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Article 20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Article 21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Article 22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Article 23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Article 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Part three
Sale of goods
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Permitted reservations by Contracting States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Part III, Chapter I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
General provisions (articles 25-29). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Article 25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Article 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Article 27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Article 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Article 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Part III, Chapter II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Obligations of the seller (articles 30-52). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Article 30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section I of Part III, Chapter II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Delivery of the goods and handing over of documents (articles 31-34). . . . . . . . . . . . . . . . . . . 93
Article 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Article 32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Article 33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Article 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
iv
Section II of Part III, Chapter II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Conformity of the goods and third party claims (articles 35-44). . . . . . . . . . . . . . . . . . . . . . . . 103
Article 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Article 36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Article 37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Article 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Article 39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Article 40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Article 41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Article 42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Article 43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Article 44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Section III of Part III, Chapter II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Remedies for breach of contract by the seller (articles 45-52). . . . . . . . . . . . . . . . . . . . . . . . . . 149
Article 45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Article 46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Article 47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Article 48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Article 49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Article 50. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Article 51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Article 52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Part III, Chapter III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Obligations of the buyer (articles 53-65) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Article 53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Section I of Part III, Chapter III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Payment of the price (articles 54-59) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175
Article 54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
Article 55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Article 56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
Article 57. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Article 58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
Article 59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Section II of Part III, Chapter III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Taking delivery (article 60) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Article 60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
v
Section III of Part III, Chapter III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
Article 61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Article 62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
Article 63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Article 64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Article 65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
Part III, Chapter IV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Passing of risk (articles 66-70) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Article 66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Article 67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Article 68. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Article 69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Article 70. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
Part III, Chapter V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
Provisions common to the obligations of the seller and of the buyer (articles 71-88). . . . . . . 209
Section I of Part III, Chapter V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Anticipatory breach and instalment contracts (articles 71-73). . . . . . . . . . . . . . . . . . . . . . . . . . . 211
Article 71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Article 72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Article 73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
Section II of Part III, Chapter V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
Damages (articles 74-77). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
Article 74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
Article 75. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Article 76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
Article 77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Section III of Part III, Chapter V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Interest (article 78). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245
Article 78. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246
Section IV of Part III, Chapter V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Exemption (articles 79-80). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Article 79. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
Article 80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262
Section V of Part III, Chapter V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
vi
Effects of avoidance (articles 81-84). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
Article 81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268
Article 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
Article 83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
Article 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
Section VI of Part III, Chapter V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Article 85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
Article 86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284
Article 87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286
Article 88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287
Part four
Final provisions
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
Discussion of Part IV elsewhere in this Digest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
Authentic Text and Witness Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
Index I. Case list by country and court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
Index II. Case list by country. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
vii
Introduction to the Digest of Case Law
on the United Nations Sales Convention
Note by the Secretariat
of well-known domestic concepts and calls for autonomous
and independent interpretation.
1. The United Nations Convention on the International
Sale of Goods, 1980 (the Convention, or CISG) has become
in 25 years an important tool for international trade. The
Convention provides a uniform framework for contracts of
sale of goods between parties whose places of business are
in different States. By defining rights and obligations of
the parties in a transparent and easily understandable manner, the Convention furthers predictability in international
trade law, thus reducing transaction costs.
6. Another technique used by the Convention’s drafters
to achieve flexibility is the adoption of rules more easily
adaptable to the different trades than the equivalent domestic requirements. Thus, for instance, article 39 of CISG
demands that the notice of non-conformity of goods shall
be given within a “reasonable” time, instead of indicating
a strict deadline to give such notice.
2. The Convention has, as at 31 December 2007, 70 States
parties, which come from all legal traditions, have very
different economies, and together account for over two
thirds of global commercial exchanges.1 The number of
academic works dedicated to the Convention grows constantly,2 as does the amount of related case law—currently,
well over 1,000 cases are available from various sources.
Its contribution to the goal of unification of international
trade law is definitely significant.
7. The combination of substantive provisions, terminology and drafting techniques reflected in the Convention
ensures its high level of adaptability to evolving commercial practices.
8. The approach taken by the drafters of the Convention
is aimed at facilitating the harmonization of international
trade law. However, it also increases the need for a uniform
interpretation of its text in the different jurisdictions where
it is enacted. Therefore, the issue of uniform interpretation
of the Convention by reference to both domestic and foreign case law requires particular attention. In this respect,
it should be recalled that article 7 (1) of the Convention
sets a uniform standard for interpretation of its provisions
by stating: “In the interpretation of this Convention, regard
is to be had to its international character and to the need
to promote uniformity in its application […].”5
3. One reason for the wide acceptance of the Convention
stems from its flexibility. The drafters of the Convention
achieved this flexibility through the use of different techniques, and, in particular, by adopting a neutral terminology, by promoting the general observance of good faith in
international trade, by establishing as a rule that the general
principles on which the Convention is based should be used
when filling any gap in the set of standards created by the
Convention,3 and by recognizing the binding effects of
agreed usages and established practice.4
9. While this provision is paramount to set common
standards for interpretation, the goal of uniform interpretation benefits greatly from the adequate diffusion of judicial
decisions and arbitral awards, presented in a systematic and
objective way. The positive effects of such material are
manifold and reach beyond providing guidance during dispute resolution. For example, it provides valuable assistance to drafters of contracts under the Convention and
facilitates its teaching and study. Moreover, it highlights
the international nature of the Convention’s provisions and
thus fosters participation to the Convention by an even
larger number of States.
4. The drafters of the Convention took special care in
avoiding the use of legal concepts typical of a given legal
tradition, concepts often accompanied by a wealth of wellestablished case law and related literature that would not
be easy to transplant in different legal cultures. This drafting style results from a deliberate choice to ensure that the
Convention would promote harmonization of substantive
law by the largest number of States, regardless of their
legal tradition.
5. Article 79 of CISG offers an example of this drafting
style, as it does not refer to terms typical of the various
domestic systems such as “hardship”, “force majeure” or
“Act of God”, but provides instead a factual description of
the circumstances that may excuse failure to perform. The
choice of breaking down sophisticated legal concepts, often
bearing elaborate domestic interpretative records, into their
factual components is evident in the replacement of the
term “delivery of goods” with a set of provisions relating
to performance and passing of risk. Similarly, the use of
the notion of “avoidance of the contract” in the Convention
introduces a legal concept that may overlap on a number
10. The United Nations Commission on International
Trade Law (UNCITRAL), in accordance with its mandate,6
has undertaken the preparation of the tools necessary for a
thorough understanding of the Convention and for its uniform interpretation.
11. UNCITRAL has established a reporting system for
case law on UNCITRAL texts (CLOUT).7 CLOUT was
established in order to assist judges, arbitrators, lawyers,
and parties to business transactions, by making available
decisions of courts and arbitral tribunals interpreting
ix
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
UNCITRAL texts; and in so doing, to further the uniform
interpretation and application of those texts.
12. CLOUT covers case law related to conventions and
model laws prepared by UNCITRAL, although the
majority of its cases refers to the Convention, and to the
UNCITRAL Model Law on International Commercial
Arbitration, 1985.
13. A network of national correspondents, appointed by
the governments that are party to at least one UNCITRAL
convention or have enacted at least one UNCITRAL model
law, monitors the relevant judicial decisions in the respective countries and reports them to the UNCITRAL Secretariat in the form of an abstract. So called voluntary
contributors can also prepare abstracts for the attention of
the Secretariat, which decides on their publication in agreement with the national correspondents. The Secretariat edits
and indexes all of the abstracts received and publishes them
in the CLOUT series.
14. The network of national correspondents ensures coverage of a large number of domestic jurisdictions. The
availability of CLOUT in the six official languages of the
United Nations—a unique feature among CISG case law
reporters—greatly enhances the dissemination of the information. These two elements are key to promote uniformity
of interpretation on the widest possible scale.
15. In light of the large number of CISG-related cases
collected in CLOUT, the Commission requested a tool specifically designed to present selected information on the
interpretation of the Convention in a clear, concise and
objective manner.8 This request originated the UNCITRAL
Digest of Case Law on the United Nations Convention on
the International Sale of Goods.
16. The goal of uniform interpretation of CISG has greatly
benefited from CLOUT, and it is expected that the Digest
will further support it.
17. The Digest presents the information in a format based
on chapters corresponding to CISG articles. Each chapter
contains a synopsis of the relevant case law, highlighting
common views and reporting any divergent approach. The
Digest is meant to reflect the evolution of case law and,
therefore, updates will be periodically released. While the
CLOUT system reports cases in the form of abstracts, the
present Digest makes reference also to the full text of the
decision whenever this is useful to illustrate the point.
18. The Digest is the result of the cooperation between the
national correspondents and the UNCITRAL Secretariat. Its
first draft, prepared in 2004, greatly benefited from the
contribution of Professor Franco Ferrari of the Università
degli Studi di Verona, Facoltà di Giurisprudenza; Professor
Harry Flechtner of the University of Pittsburgh School of
Law; Professor Ulrich Magnus of the Universität Hamburg,
Fachbereich Rechtswissenschaft; Professor Peter Winship
of the Southern Methodist University School of Law; and
Professor Claude Witz, Lehrstuhl für französisches Zivilrecht, Universität des Saarlandes. Before being published
in the current format, the Digest was further updated and
edited by the UNCITRAL Secretariat.
Notes
1
United Nations Convention on Contracts for the International Sale of Goods, 1980, United Nations Treaty Series, vol. 1498, p. 3.
CISG is deposited with the Secretary-General of the United Nations. Authoritative information on its status can be obtained from the
United Nations Treaty Collection on the Internet, at http://untreaty.un.org. Similar information is also provided on UNCITRAL’s website
at http://www.uncitral.org.
2
UNCITRAL prepares yearly a Bibliography of recent writings related to the work of UNCITRAL (for the year 2007, see United Nations
document A/CN.9/626 of 25 May 2007), available on UNCITRAL’s website at http://www.uncitral.org.
3
Art. 7 CISG: “(1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote
uniformity in its application and the observance of good faith in international trade.
(2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with
the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the
rules of private international law.”
4
Art. 9 CISG: “(1) The parties are bound by any usage to which they have agreed and by any practices which they have established
between themselves.
(2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of
which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties
to contracts of the type involved in the particular trade concerned.”
5
This clause served as a model for similar provisions in other uniform legislative texts. See, for example, United Nations Convention
on the Assignment of Receivables in International Trade, art. 7 (1) (“regard is to be had to its ... international character”; UNCITRAL
Model Law on Electronic Commerce, art. 3 (“regard is to be had to its international origin”); UNCITRAL Model Law on Cross-border
Insolvency, art. 8 (“regard is to be had to its international origin”).
Introduction
xi
6
UNCITRAL should be active, inter alia, in “[…] promoting ways and means of ensuring a uniform interpretation and application of
international conventions and uniform laws in the field of the law of international trade [and] collecting and disseminating information
on national legislation and modern legal developments, including case law, in the field of the law of international trade; […]”: General
Assembly resolution 2205 (XXI) of 17 December 1966, available on UNCITRAL’s website at http://www.uncitral.org.
7
Report of the United Nations Commission on International Trade Law on the work of its twenty-first session, New York, 11-20 April
1988, United Nations document A/43/17, paras. 98-109. CLOUT reports are published as United Nations documents A/CN.9/SER.C/
ABSTRACTS/1 to A/CN.9/SER.C/ABSTRACTS/72. The seventy-two CLOUT reports are also available on UNCITRAL’s website at
http://www.uncitral.org/clout/showSearchDocument.do?lf=898&lng=en.
8
Report of the United Nations Commission on International Trade Law on its thirty-fourth session, 25 June-13 July 2001, A/56/17,
paras. 391, 395, available on the UNCITRAL website http://www.uncitral.org/english/sessions/unc/unc-34/A-56-17e.pdf
The Convention as a Whole; Overview of Digest*
Overview of the Convention
Chapter IV (“Passing of risk”) includes articles 66-70.
Finally, Chapter V (“Provisions common to the obligations
of the seller and of the buyer”) encompasses articles 71-88,
and is arranged into six sections: Section I (“Anticipatory
breach and instalment contracts,” articles 71-73); Section II
(“Damages,” articles 74-77); Section III (“Interest,” article 78); Section IV (“Exemption,” article 79-80); Section
V (“Effects of avoidance,” articles 81-84); and Section VI
(“Preservation of the goods,” articles 85-88).
1. The United Nations Convention on Contracts for the
International Sale of Goods (the “CISG” or “Convention”)
is a convention or multi-lateral treaty that contains uniform
legal rules to govern international sale of goods. It has, at
the time of this writing, attracted an extremely large and
diverse group of Contracting States.1 Where the CISG governs a transaction under its rules of applicability (see articles 1-6 of the Convention), the rules of the Convention
bind the parties to the transaction except to the extent that
the parties have effectively excluded the CISG or derogated
from its provisions (see article 6).
6. The last Part of the Convention is Part IV (“Final
provisions”), which consists of articles 89-101.
7. The following summarizes the structure of the
Convention:
The Structure of the Convention
Preamble
2. The text of the Convention is introduced by a Preamble2
and concludes with an Authentic Text and Witness clause.3
In between are the 101 substantive articles of the CISG,
which are organized into four Parts.
Part I (“Sphere of application and general provisions”) —
articles 1-13
Chapter I (“Sphere of application”) — articles  1-6
Chapter II (“General provisions”) — articles 7-13
3. Part I (“Sphere of application and general provisions”),
which encompasses articles 1-13 of the Convention, is subdivided into two Chapters: Chapter I (“Sphere of application”), which covers articles 1-6, and Chapter II (“General
provisions”), which includes articles 7-13.
Part II (“Formation of contract”) — articles 14-24
Part III (“Sale of goods”) — articles 25-88
Chapter I (“General provisions”) — articles 25-29
4. Articles 14-24 comprise Part II of the Convention
(“Formation of contract”). Part II is not further subdivided.
Chapter II (“Obligations of the seller”) —
articles 30-52
5. The largest part of the Convention is Part III (“Sale of
goods”), which covers articles 25-88. Part III is organized
into five chapters. Chapter I (“General provisions”) consists
of articles 25-29. Chapter II (“Obligations of the seller”)
is comprised of articles 30-52, and itself is subdivided into
Section I (“Delivery of goods and handing over of documents,” articles 31-34), Section II (“Conformity of goods
and third party claims,” articles 35-44), and Section III
(“Remedies for breach of contract by the seller,” articles  45-52). Chapter III (“Obligations of the buyer”) incorporates articles 53-65, and in turn is subdivided into
Section  I (“Payment of the price,” articles 54-59), Section
II (“Taking delivery,” article 60), and Section III (“Remedies for breach of contract by the buyer,” articles 61-65).
 Section I (“Delivery of goods and handing
over of documents”) — articles 31-34
 Section II (“Conformity of goods and third
party claims”) — articles 35-44
 Section III (“Remedies for breach of contract
by the seller”) — articles 45-52
*The present Digest was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts
and other citations listed in the footnotes. The abstracts are intended
to serve only as summaries of the underlying decisions and may not
reflect all the points made in the Digest. Readers are advised to
consult the full texts of the listed court and arbitral decisions rather
than relying solely on the CLOUT abstracts.
Chapter III (“Obligations of the buyer”) —
articles 53-65
 Section I (“Payment of the price”) —
articles 54-59
 Section II (“Taking delivery”) — article 60
 Section III (“Remedies for breach of contract
by the buyer”) — articles 61-65
Chapter IV (“Passing of risk”) — articles  66-70
Chapter V (“Provisions common to the obligations
of the seller and of the buyer”) — articles 71-88
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
 Section I (“Anticipatory breach and instalment
contracts”) — articles 71-73
 Section II (“Damages”) — articles 74-77
 Section III (“Interest”) — article 78
 Section IV (“Exemption”) — article 79-80
 Section V (“Effects of avoidance”) —
articles  81-84
 Section VI (“Preservation of the goods”) —
articles 85-88
Part IV (“Final provisions”) — articles 89-101
Authentic Text and Witness clause
Overview of the Digest
8. The background to and general approach of the
Digest is described in the “Introduction to the Digest
of case law on the United Nations Sales Convention,”
Document A/CN.9/562. The Digest itself is comprised
of sections covering each of the subdivisions of the
Convention (starting with this section, which covers
the Convention as a whole, and including sections for
each of the various clauses, Parts, Chapters and Sections described in paragraphs 2-7 above, including the
Preamble and the Witness clause), and each of the
individual articles that comprise the Convention except
for the individual articles in Part IV (“Final provisions,” articles 89-101).
Notes
1
For information on the States that have become parties to the Convention, see the website of the United Nations Commission on
International Trade law at http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_status.html.
2
See the Digest discussion of the Preamble infra.
3
See the Digest discussion of the Witness.
Preamble
The States Parties to this Convention,
Bearing in mind the broad objectives in the resolutions adopted by the sixth special
session of the General Assembly of the United Nations on the establishment of a New
International Economic Order,
Considering that the development of international trade on the basis of equality and
mutual benefit is an important element in promoting friendly relations among States,
Being of the opinion that the adoption of uniform rules which govern contracts for the
international sale of goods and take into account the different social, economic and legal
systems would contribute to the removal of legal barriers in international trade and
promote the development of international trade,
Have agreed as follows: . . . .
Overview
of the CISG, as well as anticipated results of its adoption.
The third clause also describes particular aspects of the
Convention that advance those goals — specifically, the
status of the CISG as a set of “uniform rules” (emphasis
added) for international sales, and its success in “tak[ing]
into account the different social, economic and legal systems.” The emphasis here on uniformity and on transcendence of particular legal and socio-economic traditions is
amplified in Article 7(1) of the substantive CISG, which
mandates that the Convention be interpreted with regard
“to its international character and to the need to promote
uniformity in its application.”
1. The preamble to the CISG declares its background,
nature, general purposes and approaches. It begins by
stating that the parties to the Convention are States, and
ends by averring that the Convention is an agreement of
such States. Between these two statements are three main
clauses, the first two of which place the CISG in the context
of broader international programmes and goals, and the third
of which focuses on the specific purposes and methods of
the Convention.
2. The first of the main clauses of the Preamble (“Bearing
in mind . . .”) suggests that the CISG is consistent with
the “broad objectives” of the United Nations resolutions to
establish a “New International Economic Order.” The
second (“Considering that . . .”) indicates that the CISG
project promotes “friendly relations among States” by fostering “the development of international trade on the basis
of equality and mutual benefit.” The latter theme is continued
in the third clause, which declares that promoting “the development of international trade,” along with “the removal of
legal barriers in international trade,” are particular purposes
Use of Preamble in Decisions
3. Although the Preamble does not contain substantive
rules of sales law, it has been invoked by tribunals in the
course of resolving disputes governed by the Convention.
Specifically, the Preamble has been cited to support the
conclusion that certain domestic law causes of action
related to a transaction governed by the CISG were
pre-empted by the Convention.1
Notes
1
CLOUT case No. 433 [Federal District Court, Northern District of California, United States, 30 July 2001] (see full text of decision)
(the court cited language from the second main clause of the Preamble (“the development of international trade on the basis of equality
and mutual benefit”) and the third main clause of the Preamble (“the adoption of uniform rules which govern contracts for the international sale of goods and take into account the different social, economic and legal systems would contribute to the removal of legal
barriers in international trade and promote the development of international trade”) as revealing an intent that the CISG supersede internal
domestic law on matters within its scope); CLOUT case No. 579 [Federal District Court, Southern District of New York, United States,
May 10, 2002] (see full text of decision) (the court cited language from the third main clause of the Preamble (“the adoption of uniform
rules which govern contracts for the international sale of goods and take into account the different social, economic and legal systems
would contribute to the removal of legal barriers in international trade and promote the development of international trade”) in support
of its holding that the CISG preempted contract claims based on internal domestic law).
xv
Part one
Sphere of applications
and general provisions
Chapter I
Sphere of application (articles 1-6)
Overview
3. Several provisions of Chapter 1 implicate final provisions of the Convention, found in Part IV of the CISG
covering articles 89-101. For example, application of
article  1, the main provision governing the Convention’s
applicability, may be affected by, inter alia, articles 92
(declarations that a State is not bound by Part II or by
Part  III of the Convention),1 article 93 (federal-state
clause),2 article 94 (declarations by States with harmonized sales law that the Convention does not apply to
sales between parties located in those States),3 article 95
(declarations that a State is not bound by article  1  (1)  (b)),4
article 99 (time at which the Convention enters into
force), 5 and article 100 (temporal rules for applying
the Convention). Similarly, both article 11 (which
eliminates writing and other formality requirements)
and article 12 (which creates an exception to the
applicability of article 11 and other anti-formality
rules of the Convention) must be applied in light of
article  96 (declarations that the anti-formality rules of
the Convention do not apply where a party is located
in the declaring State).
1. Part 1 of the Convention addresses the question—preliminary to all others under the CISG—of the applicability
of the Convention, as well as general matters such as interpretation and formality requirements. It is divided into two
chapters: Chapter I, “Sphere of application,” encompasses
articles 1-6 of the CISG; Chapter II, “General provisions,”
covers articles 7-13.
Chapter I of Part I:
sphere of application
2. Chapter 1 of Part I of the CISG contains provisions
defining the scope of the Convention. Articles 1-3 identify
transactions to which the CISG does and does not apply.
Articles 4 and 5 describe issues that are and are not
addressed in the Convention. Article 6 contains a broad
principle of party autonomy that can affect both the transactions and the issues that are governed by the CISG.
Notes
1
See the Digest for article 1, paragraph 19.
2
Id.
3
See the Digest for Part II, paragraph 4.
4
See the Digest for article 1, paragraph 23.
5
See the Digest for article 1, paragraph 19.
3
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 1
1. This Convention applies to contracts of sale of goods between parties whose
places of business are in different States:
(a) When the States are Contracting States; or
(b) When the rules of private international law lead to the application of the law
of a Contracting State.
2. The fact that the parties have their places of business in different States is to
be disregarded whenever this fact does not appear either from the contract or from any
dealings between, or from information disclosed by, the parties at any time before or at
the conclusion of the contract.
3. Neither the nationality of the parties nor the civil or commercial character of
the parties or of the contract is to be taken into consideration in determining the application of this Convention.
Overview
1. This article provides some of the rules for determining
whether the Convention applies. Article 1 should be read
in connection with articles 2 and 3, which respectively
narrow and extend the Convention’s substantive sphere of
application.
Convention prevails over recourse to
private international law
2. Both the Convention and the private international law
rules of a forum address international contracts. Before
examining the Convention’s substantive, international and
territorial sphere of application, therefore, its relationship
to private international law rules must be explored. According to case law, courts of Contracting States must determine
whether the Convention applies before resorting to private
international law.1 In other words, recourse to the Convention prevails over recourse to the forum’s private international law.2 This is so because, as a substantive law
convention,3 the CISG’s rules are more specific and lead
directly to a substantive solution,4 whereas resort to private
international law requires a two-step approach (identification of the applicable law and application thereof).
Contracts governed by the Convention
3. The Convention applies to contracts for the sale of
goods. Although the Convention does not provide any definition of this type of contract,5 a description can be derived
from articles 30 and 53.6 Thus, a contract for the sale of
goods covered by the Convention can be defined as a contract “pursuant to which one party (the seller) is bound to
deliver the goods and transfer the property in the goods
sold and the other party (the buyer) is obliged to pay the
price and accept the goods”.7 Thus, as one court put it, the
essence of the contract lies in goods being exchanged for
money.8
4. The Convention covers contracts for the delivery of
goods by installments,9 as can be derived from article 73
of the Convention, and contracts providing for the delivery
of the goods sold directly from the supplier to the seller’s
customer.10 Pursuant to article 29, contracts modifying a
sales contract also fall within the substantive sphere of
application of the Convention.11
5. Article 3 contains a special rule which extends—within
certain limits—the Convention’s substantive sphere of
application to contracts for the sale of goods to be manufactured or produced as well as to contracts pursuant to
which the seller is also bound to deliver labour or
services.
6. Most courts considering the issue have concluded that
the Convention does not apply to distribution agreements,12
as these agreements focus on the “organization of the distribution” rather than the transfer of ownership of goods.13
The various contracts for the sale of goods concluded in
execution of a distribution agreement, can, however, be
governed by the Convention,14 even where the distribution
agreement was concluded before the entry into force of the
Convention.15
7. Franchise agreements also fall outside the Convention’s
sphere of application.16
Goods
8. The Convention does not define “goods”. Nevertheless,
pursuant to article  7  (1), the concept of “goods” should be
interpreted autonomously, in light of the Convention’s
Part one. Sphere of application and general provisions
“international character” and “the need to promote uniformity in its application”, rather than by referring to
domestic law for a definition.17
9. According to case law, “goods” in the sense of the
Convention are items that are, at the moment of delivery,18
“moveable and tangible”,19 regardless of whether they are
solid,20 used or new,21 inanimate or alive.22 Intangibles, such
as intellectual property rights, an interest in a limited liability company,23 or an assigned debt,24 have been considered
not to fall within the Convention’s concept of “goods”. The
same is true for a market research study.25 According to
one court, however, the concept of “goods” is to be
interpreted “extensively,”26 perhaps suggesting that the
Convention might apply to goods that are not tangible.
10. Whereas the sale of computer hardware clearly falls
within the sphere of application of the Convention,27 the
issue is not so clear when it comes to software. Some courts
consider only standard software to be “goods” under the
Convention;28 another court concluded that any kind of
software, including custom-made software, should be considered “goods”.29
Internationality and place of business
11. The Convention’s sphere of application is limited to
contracts for the international sale of goods. According to
article 1  (1), a contract for the sale of goods is international
when the parties have—at the moment of the conclusion
of the contract30—their relevant place of business in different States.31
12. The concept of “place of business” is critical in the
determination of internationality. The Convention, however,
does not define it, although it does address the problem of
which of a party’s multiple places of business is to be taken
into account in determining internationality (article 10).
13. According to one court, “place of business” can be
defined as “the place from which a business activity is de
facto carried out [...]; this requires a certain duration and
stability as well as a certain amount of autonomy”.32
Another court has concluded that a liaison office cannot be
considered a “place of business” under the Convention.33
14. The internationality requirement is not met where the
parties have their relevant place of business in the same
country. This is true even where they have different nationalities, as article 1  (3) states that “the nationality of the
parties [...] is [not] to be taken into consideration in determining the application of this Convention”.34 Also, the fact
that the place of the conclusion of the contract is located
in a different State from the State in which the performance
takes place does not render the contract “international”.35
For the purposes of the Convention’s applicability, the parties’ civil or commercial character is also irrelevant.36
15. Where a contract for the sale of goods is concluded
through an intermediary, it is necessary to establish who
the parties to the contract are in order to determine whether
the contract is international. As the issue of who is party
to a contract is not dealt with in the CISG,37 the question
5
must be answered by reference to the law applicable by
virtue of the rules of private international law of the forum.
The places of business of the parties as determined in this
fashion are the ones relevant to analyzing whether the contract is international.38
16. According to article 1  (2), internationality is irrelevant where “the fact that the parties have their places
of business in different States [...] does not appear either
from the contract or from any dealings between, or from
information disclosed by, the parties at any time before
or at the conclusion of the contract”.39 Thus, the Convention protects the parties’ reliance upon what appears to
be a domestic setting for a transaction. The party that
asserts that the Convention is not applicable because the
internationality of the contract was not apparent must
prove its assertion.40
Autonomous applicability
17. The internationality of a contract for the sale of goods,
by itself, is not sufficient to make the Convention applicable.41 Article 1  (1) lists two additional alternative criteria
for applicability, one of which has to be met in order for
the Convention to apply. According to the criterion set forth
in article 1  (1) (a), the Convention is “directly”42 or “autonomously”43 applicable, i.e. without the need to resort to the
rules of private international law,44 when the States in which
the parties have their relevant places of business are Contracting States. As the list of Contracting States grows, this
criterion is leading to application of the Convention in an
increasing number of cases.45
18. In order for the Convention to be applicable by virtue
of article 1  (1)  (a), the parties must have their relevant
place of business in a Contracting State. “If the two States
in which the parties have their places of business are Contracting States, the Convention applies even if the rules of
private international law of the forum would normally designate the law of a third country.”46 This is so unless the
reason that the third country’s law would apply is a choice
of law agreement that the parties intended to exclude the
Convention.47
19. The time when a State becomes a Contracting State
is determined by article 99 and temporal rules for applying
the Convention under article 1 (1) (a) are given in article  100. For the Convention to apply by virtue of article  1  (1)  (a), one must also take into account whether the
States in which the parties have their relevant place of
business have declared either an article 92 or an article 93
reservation. Where one State has made an article 92 reservation declaring that it is not bound by a specified part of
the CISG, the Convention as a whole cannot be applicable
by virtue of article 1  (1) (a). Rather, one must determine
on the basis of article 1  (1) (b) whether the part of the
Convention to which the reservation relates applies to the
transaction.48 The same is true mutatis mutandis if a party
is located in a territory of a Contracting State as to which
the State has declared, pursuant to article 93, that the
Convention does not extend.49
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Indirect applicability
20. In Contracting States the Convention can also be
applicable—by virtue of article 1  (1) (b)—where only one
(or neither) party has its relevant place of business in Contracting States,50 as long as the rules of private international
law lead to the law of a Contracting State.51 Since the relevant rules of private international law are those of the
forum,52 it will depend on the domestic rules of private
international law whether the parties are allowed to choose
the applicable law, whether one has to look into the rules
of private international of the law designated by the rules
of private international of the forum (renvoi), etc.
21. Where the private international law rules of the forum
are based upon the 1980 Rome Convention on the Law
Applicable to Contractual Obligations,53 the parties’ choice
of the law of a Contracting State can lead to the applicability of the Convention by virtue of article 1  (1) (b),54 since
article 3 of the Rome Convention recognizes party autonomy.55 This is also true where the rules of private international law of the forum are those laid down in the 1955
Hague Convention on the Law Applicable to International
Sales,56 as article 257 of this convention also obliges judges
to follow the choice of law made by the parties.58
22. The Convention may be selected by the parties as the
law applicable to the contract.59 Where the parties did not
make a choice of law or where their choice is not valid,
one has to resort to the criteria set forth by the rules of
private international law of the forum to determine whether
the Convention is applicable by virtue of article 1  (1) (b).
Thus, under article 4  (1) of the 1980 Rome Convention,
one has to apply the law “most closely connected” to the
contract;60 according to article 4  (2), it is presumed that the
contract is most closely connected with the country where
the party who is to effect the performance which is characteristic of the contract has its habitual residence at the
time of conclusion of the contract. For this reason, the
Convention has often been applied by courts in contracting
States to the Rome Convention when the seller, i.e. the
party that has to effect the characteristic performance,61 had
its place of business in a Contracting State to the Convention.62 Under the 1955 Hague Convention, absent a choice
of law the law of the seller applies,63 except in cases where
the seller receives the order for the goods in the buyer’s
country, in which case the law of the buyer governs.64
23. At the 1980 Diplomatic Conference, a delegate argued
that countries with special legislation on international trade
should be allowed to avoid “the effect which article 1  (100) (b)
would have on the application of their special legislation”.65
As a consequence, article 95 was introduced to give Contracting States the opportunity to choose not to be bound
by article 1  (1) (b).66 Judges located in Contracting States
that have declared an article 95 reservation will not apply
the Convention by virtue of article 1  (1) (b); this does not,
however, affect the Convention’s applicability in such
States by virtue of article 1  (1) (a).67
24. Although the Convention does not bind non-Contracting-States, it has been applied in courts of non-Contracting
States where the forum’s rules of private international law
led to the law of a Contracting State.68
Notes
1
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision).
For this interpretation, see CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December 1999]; Landgericht Zwickau, Germany,
19  March 1999, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/519.htm; CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998]; CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September
1997]; CLOUT case No. 84 [Oberlandesgericht Frankfurt am Main, Germany, 20 April 1994] (see full text of the decision).
2
3
CLOUT case No. 424 [Oberster Gerichtshof, Austria, 9 March 2000], also available on the Internet at http://www.cisg.at/6_31199z.
htm; Tribunale d’appello, Lugano, Switzerland, 8 June 1999, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do
=case&id=483&step=FullText.
4
For this approach, see CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case
No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza Italiana, 2003, 896 ff.
5
See CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (see full text of the decision).
See Rechtbank Rotterdam, Netherlands, 1 November 2001, Nederlands Internationaal Privaatrecht, 2002, No. 114; available on the
Internet at Kantonsgericht Wallis, Switzerland, 11  March 1996, Unilex; CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002],
also in Giurisprudenza Italiana, 2003, 896 ff.
6
7
See CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (see full text of the decision); for a reference to the
buyer’s obligation mentioned in the definition cited in the text, see Rechtbank Koophandel, Hasselt, Belgium, 2 May 1995, available on
the Internet at http://www.law.kuleuven.be/ipr/eng/cases/1995-05-02.html .
8
CLOUT case No. 328 [Kantonsgericht des Kantons Zug, Switzerland, 21 October 1999] (see full text of the decision).
See CLOUT case No. 293 [Schiedsgericht der Hamburger freundlichen Arbitrage, Germany, 29 December 1998], also in Internationales Handelsrecht, 2001, 337; CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998]; CLOUT
case No. 238 [Oberster Gerichtshof, Austria, 12 February 1998]; CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer
Hamburg, Germany, 21 March, 21 June 1996] (see full text of the decision); Landgericht Ellwangen, Germany, 21 August 1995, unpublished; CLOUT case No. 154 [Cour d’appel Grenoble, France, 22 February 1995].
9
10
See CLOUT case No. 269 [Bundesgerichtshof, Germany, 12 February, 1998] (see full text of the decision); CLOUT case No. 261
[Berzirksgericht der Sanne, Switzerland, 20 February 1997].
Part one. Sphere of application and general provisions
7
11
See CLOUT case No. 297 [Oberlandesgericht München, Germany, 21 January 1998]; CLOUT case No. 133 [Oberlandesgericht
München, Germany, 8 February 1995]; CLOUT case No. 303 [Arbitration—International Chamber of Commerce, award No. 7331 1994],
Journal du droit international, 1995, 1001ff.; CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990].
12
See CLOUT case No. 297 [Oberlandesgericht München, Germany, 21 January 1998] (see full text of the decision); CLOUT case
No. 295 [Oberlandesgericht Hamm, Germany, 5 November 1997]; CLOUT case No. 273 [Oberlandesgericht München, Germany, 9 July
1997] (see full text of the decision); CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July 1996]; CLOUT case No. 126
[Fovárosi Biróság, Hungary, 19 March 1996]; CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see
full text of the decision); Hof Amsterdam, Netherlands, 16 July 1992, Nederlands Internationaal Privaatrecht 1992, Nr. 420; CLOUT
case No. 420 [Federal District Court, Eastern District of Pennsylvania, United States of America, 29 August 2000]; Hof Arnhem, Netherlands, 27 April 1999, Nederlands Internationaal Privaatrecht 1999, Nr.  245, available on Uniles; Rechtsbank Gravenhage, Netherlands,
2 July 1997, Nederlands Internationaal Privaatrecht 1999, n. 68, 78-80, available on Unilex. One court has applied the CISG to a
distributorship agreement. See CLOUT case No. 379 [Corte di Cassazione, Italy, 14  December 1999]. For a case in which the issue was
raised but not resolved, see CLOUT case No. 187 [Federal District Court, Southern District of New York, United States, 23 July 1997].
See also CLOUT case No. 480 [Cour d’appel Colmar, France, 12 June 2001] (“collaboration agreement” under which supplier was
required to deliver to the buyer at least 20,000 covers for truck air conditioners, with the possibility of additional quantities depending
on the needs of the buyer’s customer, was a contract for sale governed by the CISG; the title that the parties chose for their agreement
was not dispositive, and the fact that the quantity might be increased beyond the stated amount depending on the needs of the buyer’s
customer did not prevent application of the Convention; the contract designated the parties as buyer and seller, specified the precise
goods and a method for calculating the price, set a minimum quantity of goods to be delivered by the seller, and implied an obligation
for buyer to take delivery, so it was a “contract for the sale of goods” for purposes of applying the Convention).
13
CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (see full text of the decision). But see CLOUT
case No. 630 [Court of Arbitration of the International Chamber of Commerce, Zurich, Switzerland, July 1999] (holding that a framework
agreement was governed by the CISG because it provided for future sales and deliveries) (see full text of the decision).
14
See CLOUT case No. 295 [Oberlandesgericht Hamm, Germany, 5 November 1997]; CLOUT case No. 273 [Oberlandesgericht
München, Germany, 9 July 1997] (see full text of the decision); CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July
1996]; CLOUT case No.  204 [Cour d’appel Grenoble, France, 15 May 1996]; CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see full text of the decision); ICC Arbitral Award, Milan, Italy, December 1998, nr. 8908, in ICC International
Court of Arbitration Bulletin, vol. 10, no.  2, pp. 83-87 (Fall 1999), available on Unilex; ICC Arbitral Award 1997, Paris, 23 January
1997, nr. 8611/HV/JK, unpublished, available on Unilex.
15
CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see full text of the decision).
16
See CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997].
17
See the Digest for article 7, paragraph 2.
See CLOUT case No. 152 [Cour d’appel Grenoble, France, 26 April 1995] (see full text of the decision); CLOUT case No. 608
[Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza Italiana, 2003, 896 ff.
18
19
See CLOUT case No. 328 [Kantonsgericht des Kantons Zug, Switzerland, 21 October 1999] (see full text of the decision); CLOUT
case No. 380 [Tribunale di Pavia, Italy, 29 December 1999] (see full text of the decision); CLOUT case No. 168 [Oberlandesgericht
Köln, Germany, 21  March 1996] (see full text of the decision); CLOUT case No. 122 [Oberlandesgericht Köln, Germany, 26 August
1994]; CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (see full text of the decision); CLOUT case No. 608
[Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza Italiana, 2003, 896 ff.
20
See CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996], applying the Convention to the international sale of
propane gas.
21
See CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996] (used car); Landgericht Köln, Germany, 16 November
1995, unpublished.
22
See CLOUT case No. 100 [Rechtbank Arnhem, Netherlands, 30 December 1993] (live lambs); CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998] (live fish); CLOUT case No. 312 [Cour d’appel Paris, France, 14 January 1998] (circus elephants).
Compare CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (chinchilla pelts); CLOUT case No.  227 [Oberlandesgericht Hamm, Germany, 22 September 1992] (bacon). For a decision that deems animals to be “goods” in the sense of the Convention, see Landgericht Flensburg, Germany, 19 January 2001, Internationales Handelsrecht, 2001, 67 et seq.
23
See CLOUT case No. 161 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
20 December 1993].
24
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision).
25
See CLOUT case No. 122 [Oberlandesgericht Köln, Germany, 26 August 1994].
26
CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see full text of the decision).
See Landgericht München, Germany, 29 May 1995, Neue Juristische Wochenschrift 1996, 401 f.; Landgericht Heidelberg, Germany,
3 July 1992,Unilex.
27
28
See CLOUT case No. 122 [Oberlandesgericht Köln, Germany, 26 August 1994] (see full text of the decision); CLOUT case No.  131
[Landgericht München, Germany, 8 February 1995].
29
See CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see full text of the decision).
See Oberlandesgericht Dresden, Germany, 27 December 1999, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/
urteile/text/511.htm.
30
31
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996] (see full text of the decision); CLOUT case No. 106 [Oberster Gerichtshof, Austria,
10 November 1994] ; CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza Italiana, 2003, 896 ff.
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
32
Oberlandesgericht Stuttgart, Germany, 28 February 2000, Internationales Handelsrecht, 2001, 66; CLOUT case No. 608 [Trib. Rimini,
Italy, 26 November 2002], also in Giurisprudenza Italiana, 2003, 896 ff.; for a similar definition see CLOUT case No. 106 [Oberster
Gerichtshof, Austria, 10 November 1994] (see full text of the decision); for a court decision stating that the phrase “place of business”
requires the parties to “really” do business out of that place, see CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000],
also available on the Internet at http://www.cisg.law.pace.edu/cisg/text/000413g1german.html.
33
See CLOUT case No. 158 [Cour d’appel Paris, France, 22 April 1992].
34
For references to the irrelevance of the parties’ nationality, see CLOUT case No. 445 [Bundesgerichtshof, Germany, 31  October
2001], also in Internationales Handelsrecht, 2002, 14 et seq.; Rechtbank Koophandel Veurne, Belgium, 25 April 2001, available on the
Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2001-04-25.htm; Court of Arbitration of the Bulgarian Chamber of Commerce
and Industry, award No. 56/1995, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=421&step=
FullText.
35
See Oberlandesgericht Köln, Germany, 27 November 1991, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/.
36
See CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Internationales Handelsrecht, 2002, 16.
37
For court decisions stating that issues of agency law and related matters are not dealt with by the Convention, see CLOUT case
No.  378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 189 [Oberster Gerichtshof, Austria,
20 March 1997] (see full text of the decision); CLOUT case No. 335 [Appellationsgericht Tessin, Switzerland, 12 February 1996], also
in Schweizerische Zeitschrift für europäisches und internationales Recht 1996, 135 ff.; CLOUT case No. 334 [Obergericht des Kantons
Thurgau, Switzerland, 19 December 1995]; Landgericht Kassel, Germany, 22 June 1995, unpublished; see CLOUT Case No. 410 [Amtsgericht Alsfeld, Germany, 12 May 1995] also in Neue Juristische Wochenschrift Rechtsprechungs-Report 1996, 120 f.; CLOUT case
No.  80 [Kammergericht Berlin, Germany, 24 January 1994] (see full text of the decision); CLOUT case No. 95 [Zivilgericht Basel-Stadt,
Switzerland, 21 December 1992] (see full text of the decision); CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September
1990].
38
See Oberlandesgericht Köln, Germany, 13 November 2000, available on the Internet at http://www.cisg.law.pace.edu/cisg/
text/001113g1german.html.
39
For a reference to this provision, see CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also available on the
Internet at http://www.cisg.at/10_34499g.htm; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the
decision).
40
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision).
41
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision).
42
See Bundesgericht, Switzerland, 11 July 2000, available on the Internet at http://www.cisg.law.pace.edu/cisg/text/000711s1german.
html; CLOUT case No. 261 [Berzirksgericht der Sanne, Switzerland, 20 February 1997].
43
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 189 [Oberster
Gerichtshof, Austria, 20 March 1997] (see full text of the decision).
44
See CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996] (see full text of the decision).
45
For recent court decisions applying the Convention by virtue of art. 1  (1) (a), see Hof Beroep Gent, Belgium, 31 January 2002,
available on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-01-31.html; CLOUT case No. 398 [Cour d’appel Orléans,
France, 29 March 2001] (see full text of the decision); Landgericht Trier, Germany, 7 December 2000, Internationales Handelsrecht
2001, 35; CLOUT case No. 431 [Oberlandesgericht Oldenburg, Germany, 5 December 2000], also in Recht der internationalen Wirtschaft
2001, 381 f.; CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also in Internationales Handelsrecht 2001, 30  ff.;
Tribunal Commercial Montargis, France, 6 October 2000, available on the Internet at http://witz.jura.uni-sb.de/CISG/decisions/061000v.htm;
CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also in Internationales Handelsrecht 2001, 42 ff.; CLOUT
case No. 429 [Oberlandesgericht Frankfurt am Main, Germany, 30 August 2000], also in Recht der internationalen Wirtschaft 2001,
383  f.; Sixth Civil Court of First Instance, City of Tijuana, State of Baja California, Mexico, 14 July 2000, Internationales Handelsrecht
2001, 38 f.; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 427
[Oberster Gerichtshof, Austria, 28 April 2000], also in Zeitschrift für Rechtsvergleichung 2000, 188 f.; CLOUT case No. 426 [Oberster
Gerichtshof, Austria, 13 April 2000], also in Zeitschrift für Rechtsvergleichung 2000, 231; CLOUT case No. 397 [Audiencia Provincial
de Navarra, Spain, 27 March 2000] , Revista General de Derecho 2000, 12536 ff.; see CLOUT case No. 425 [Oberster Gerichtshof,
Austria, 21 March 2000], also in Internationales Handelsrecht 2001, 40 f.; CLOUT case No. 424 [Oberster Gerichtshof, Austria, 9 March
2000], also in Internationales Handelsrecht 2001, 39 f.; Oberlandesgericht Stuttgart, Germany, 28 February 2000, Internationales Handelsrecht 2001, 65 ff.; CLOUT case No. 395 [Tribunal Supremo, Spain, 28 January 2000] (see full text of the decision); Hanseatisches
Oberlandesgericht Hamburg, Germany, 26 January 2000, OLG-Report Hamburg 2000, 464 f.; CLOUT case No.  416, [Minnesota [State]
District Court, United States, 9 March 1999] (see full text of the decision); CLOUT case No. 430 [Oberlandesgericht München, Germany,
3  December 1999], also in Internationales Handelsrecht 2001, 25 f.; CLOUT case No. 359 [Oberlandesgericht Koblenz, 18  November
1999], also in OLG-Report Koblenz 2000, 281; Oberster Gerichtshof, Austria, 12  November 1999, Zeitschrift für Rechtsvergleichung
2000, 78; CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999] (see full text of the decision); CLOUT case No. 313
[Cour d’appel Grenoble, France, 21 October 1999], also available on the Internet at http://witz.jura.uni-sb.de/CISG/ decisions/211099.
htm; CLOUT case No. 328 [Kantonsgericht des Kantons Zug, Switzerland, 21  October 1999] (see full text of the decision); Amtsgericht
Stendal, Germany, 12 October 1999, unpublished; CLOUT case No. 332 [OG Kanton Basel-Landschaft, Switzerland, 5  October 1999],
also in Schweizerische Zeitschrift für europäisches und internationales Recht 2000, 115 f.; CLOUT case No. 341 [Ontario Superior Court
of Justice, Canada, 31 August 1999] (see full text of the decision); CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August
1999], also in Zeitschrift für Rechtsvergleichung 2000, 31 f.; Oberster Gerichtshof, Austria, 29 June 1999, Transportrecht-Internationales
Handelsrecht 1999, 48 ff.; CLOUT case No. 333 [Handelsgericht des Kantons Aargau, Switzerland, 11 June 1999] (see full text of the
decision); CLOUT case No. 336 [Appelationsgericht Kanton Tessin, Switzerland, 8 June 1999], see also Schweizerische Zeitschrift für
europäisches und internationales Recht 2000, 120; CLOUT case No. 315 [Cour de Cassation, France, 26 May 1999] (see full text of
the decision); CLOUT case No. 265 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry,
Hungary, 25 May 1999]; CLOUT case No. 314 [Cour d’appel Paris, France, 21 May 1999]; Oberster Gerichtshof, Austria, 19 March
1999, Zeitschrift für Rechtsvergleichung 2000, 33; CLOUT case No. 418 [Federal District Court, Eastern District of Louisiana, United
Part one. Sphere of application and general provisions
9
States, 17  May 1999] (see full text of the decision); CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] see
also, Transportrecht-Internationales Handelsrecht 2000, 22 f.; CLOUT case No. 325 [Handelsgericht des Kantons Zürich, Switzerland,
8 April 1999] (see full text of the decision); CLOUT case No.  271 [Bundesgerichtshof, Germany, 24 March 1999]; Landgericht Zwickau,
Germany, 19 March 1999, unpublished; CLOUT case No. 306 [Oberster Gerichtshof, Austria, 11  March 1999]; CLOUT case No. 327
[Kantonsgericht des Kantons Zug, Switzerland, 25  February 1999] (see full text of the decision); CLOUT case No. 331 [Handelsgericht
des Kantons Zürich, Switzerland, 10  February 1999] (see full text of the decision); CLOUT case No.  243 [Cour d’appel Grenoble,
France, 4 February 1999] (see full text of the decision); CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschaftlichen Arbitrage, 29  December 1998]; CLOUT case No. 339 [Landgericht Regensburg, Germany, 24 September 1998] (see full
text of the decision); CLOUT case No. 645 [Corte di Appello, Milano, Italy, 11 December 1998], also in Rivista di Diritto Internazionale
Privato e Processuale 1999, 112 ff.; Comisión para la protección del comercio exterior de Mexico, Mexico, 30 November 1998, unpublished; CLOUT case No. 346 [Landgericht Mainz, Germany, 26  November 1998]; CLOUT case No. 270 [Bundesgerichtshof, Germany,
25  November 1998]; CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28  October 1998] (see full text of the decision); CLOUT case No. 419 [Federal District Court, Northern District of Illinois, United States, 27 October 1998] (see full text of the
decision); CLOUT case No. 244 [Cour d’appel Paris, France, 4 March 1998] (see full text of the decision); CLOUT case No. 240
[Oberster Gerichtshof, Austria, 15 October 1998]; CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22  September 1998],
see also Transportrecht-Internationales Handelsrecht 2000, 23 ff.; CLOUT case No.  252 [Handelsgericht des Kantons Zürich, Switzerland,
21  September 1998] (see full text of the decision); CLOUT case No. 263 [Bezirksgericht Unterrheintal, Switzerland, 16 September 1998]
(see full text of the decision); CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (see full text of the
decision); CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (see full text of the decision); Oberlandesgericht
Bamberg, Germany, 19 August 1998, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 644 [Corte
di Cassazione, Italy, 7 August 1998], also in Unilex; CLOUT case No. 344 [Landgericht Erfurt, Germany, 29 July 1998] (see full text
of the decision); CLOUT case No. 242 [Cour de Cassation, France, 16 July 1998] (see full text of the decision); CLOUT case No. 305
[Oberster Gerichtshof, Austria, 30 June 1998] (see full text of the decision); CLOUT case No.  255 [Tribunal Cantonal du Valais, Switzerland, 30 June 1998] (see full text of the decision); CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United
States, 29 June 1998] (see full text of the decision); CLOUT case No. 256 [Tribunal Cantonal du Valais, Switzerland, 29 June 1998]
(see full text of the decision); Oberster Gerichtshof, Austria, 25 June 1998, Zeitschrift für Rechtsvergleichung 1999, 248 f.; CLOUT case
No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998] (see full text of the decision); CLOUT case No. 237 [Arbitration—Arbitration
Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of the decision); CLOUT case No. 290 [Oberlandesgericht
Saarbrücken, Germany, 3  June 1998] (see full text of the decision); CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May
1998] (see full text of the decision); Landgericht Aurich, Germany, 8 May 1998, available on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/; Corte di Cassazione, Italy, 8 May 1998, Rivista di Diritto Internazionale Privato e Processuale 1999, 290 ff.: CLOUT
case No. 413 [Federal District Court, Southern District of New York, United States, 6 April 1998] (see full text of the decision); CLOUT
case No. 272 [Oberlandesgericht Zweibrücken, Germany, 31 March 1998] (see full text of the decision); CLOUT case No. 245 [Cour
d’appel Paris, France, 18 March 1998] (see full text of the decision); CLOUT case No. 232 [Oberlandesgericht München, Germany, 11
March 1998]; CLOUT case No. 421 [Oberster Gerichtshof, Austria, 10  March 1998], see also in Zeitschrift für Rechtsvergleichung 1998,
161 f.; Hoge Raad, Netherlands, 20  February 1998, Nederlands Juristenblad 1998, 566 f.; CLOUT case No. 269 [Bundesgerichtshof,
Germany, 12 February 1998] (see full text of the decision); Arbitration Court attached to the Bulgarian Chamber of Commerce and
Industry, award No.  11/1996, unpublished; Landgericht Bückeburg, Germany, 3  February 1998, available on the Internet at http://www.
jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 288 [Oberlandesgericht München, Germany, 28 January 1998] (see full text of the decision); CLOUT case No. 259 [Kantonsgericht Freiburg, Switzerland, 23 January 1998] (see full text of the decision); CLOUT case No.  297
[Oberlandesgericht München, Germany, 21  January 1998] (see full text of the decision); Trbi. Comm. Besançon, France, 19 January
1998, available on the Internet at http://witz.jura.uni-sb.de/CISG/decisions/190198v.htm; CLOUT case No. 253 [Cantone del Ticino
Tribunale d’appello, Switzerland, 15 January 1998] (see full text of the decision); CLOUT case No. 312 [Cour d’appel, France, 14 January 1998]; CLOUT case No. 257 [Tribunal Cantonal du Vaud, Switzerland, 24 December 1997] (see full text of the decision); CLOUT
case No.  254 [Handelsgericht des Kantons Aargau, Switzerland, 19  December 1997] (see full text of the decision); Trib. Grande Instance
Colmar, France, 18  December 1997, unpublished; Landgericht Bayreuth, Germany, 11 December 1997, available on the Internet at http://
www.jura.uni-freiburg.de/ipr1/cisg/; Schiedsgericht der Börse für landwirtschaftliche Produkte in Wien, award No. S 2/97, Zeitschrift für
Rechtsvergleichung 1988, 211 ff.; CLOUT case No. 220 [Kantonsgericht Nidwalden, Switzerland, 3 December 1997] (see full text of
the decision); CLOUT case No. 221 [Zivilgericht des Kantons Basel-Stadt, Switzerland, 3  December 1997] (see full text of the decision);
CLOUT case No. 207 [Cour de Cassation, France, 2 December 1997] (see full text of the decision); CLOUT case No. 295 [Oberlandesgericht Hamm, Germany, 5  November 1997]; CLOUT case No. 246 [Audiencia Provincial de Barcelona, Spain, 3  November 1997] (see
full text of the decision); CLOUT case No. 247 [Audiencia Provincial de Córdoba, Spain, 31 October 1997] (see full text of the decision); CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997] (see full text of the decision); Trib. Comm. Paris,
France, 28 October 1997, http://witz.jura.uni-sb.de/CISG/decisions/281097v.htm; Landgericht Erfurt, Germany, 28 October 1997, available
on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 218 [Kantonsgericht Zug, Switzerland, 16 October 1997]
(see full text of the decision); Landgericht Hagen, Germany, 15 October 1997, available on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/; CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28  October 1998] (see full text of the decision); Hof
s’Hertogenbosch, Netherlands, 2 October 1997, Nederlands Internationaal Privaatrecht 1998, No. 103; Hoge Raad, Netherlands, 26  September 1997, Nederlands Juristenblad 1997, 1726 f.; CLOUT case No. 217 [Handelsgreicht des Kantons Aargau, Switzerland, 26 September 1997] (see full text of the decision); CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15  September 1997]; CLOUT case
No. 307 [Oberster Gerichtshof, Austria, 11 September 1997] (see full text of the decision); Oberster Gerichtshof, Austria, 8 September
1997, Unilex; CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (see full text of the decision); CLOUT case
No. 216 [Kantonsgericht St. Gallen, Switzerland, 12 August 1997] (see full text of the decision); Landgericht Göttingen, Germany,
31  July 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Hof s’Hertogenbosch, Netherlands, 24 July 1997,
Nederlands Internationaal Privaatrecht 1998, No. 125; CLOUT case No. 187 [Federal District Court, Southern District of New York,
United States, 23 July 1997] (see full text of the decision); CLOUT case No. 236 [Bundesgerichtshof, Germany, 23 July 1997] (see full
text of the decision); Landgericht Saarbrücken, Germany, 18 July 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/
cisg/; Rechtbank Arnhem, Netherlands, 17 July 1997, Nederlands Internationaal Privaatrecht 1998, No. 107; CLOUT case No. 273
[Oberlandesgericht München, Germany, 9 July 1997] (see full text of the decision); CLOUT case No. 287 [Oberlandesgericht München,
Germany, 9 July 1997]; CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (see full text of the decision);
CLOUT case No. 172 [Fovárosi Biróság, Hungary, 1 July 1997] (see full text of the decision); CLOUT case No. 235 [Bundesgerichtshof,
10
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Germany, 25 June 1997] (see full text of the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997];
Landgericht München, Germany, 23 June 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Landgericht Hamburg, Germany, 19 June 1997, Recht der internationalen Wirtschaft 1997, 873  f.; CLOUT case No. 239 [Oberster Gerichtshof, Austria,
18 June 1997]; CLOUT case No.  173 [Fovárosi Biróság, Hungary, 17 June 1997] (see full text of the decision); Hof Arnhem, 17 June
1997, Nederlands Internationaal Privaatrecht 1997, No. 341; Landgericht Paderborn, Germany, 10 June 1997, available on the Internet
at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 174 [Arbitration—Arbitration Court attached to the Hungarian Chamber
of Commerce and Industry, Hungary, 8 May 1997]; Landgericht München, Germany, 6 May 1997, available on the Internet at http://
www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997] (see full text of the
decision); Landgericht Frankenthal, Germany, 17 April 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/;
CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997] (see full text of the decision); Rechtbank Zwolle, Netherlands,
5 March 1997, Nederlands Internationaal Privaatrecht 1997, No. 230; CLOUT case No. 261 [Berzirksgericht der Sanne, Switzerland,
20 February 1997]; CLOUT case No. 396 [Audencia Provincial de Barcelona, Spain, 4 February 1997] (see full text of the decision);
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997] (see full text of the decision); Pretura Torino, Italy,
30 January 1997, Giurisprudenza Italiana 1998, 982 ff., also available on the INTERNET at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/970130i3.html; CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (see full text of the decision); CLOUT case No. 311 [Oberlandesgericht Köln, Germany, 8 January 1997] (see full text of the decision); CLOUT case No. 206
[Cour de Cassation, France, 17 December 1996] (see full text of the decision); Rechtbank Koophandel Kortrijk, Belgium, 16 December
1996, Unilex; CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996]; Landgericht München, Germany, 9 December
1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 229 [Bundesgerichtshof, Germany,
4 December 1996] (see full text of the decision); Rechtbank Rotterdam, Netherlands, 21 November 1996, Nederlands Internationaal
Privaatrecht 1997, No. 223; Amtsgericht Koblenz, Germany, 12  November 1996, available on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/; Oberlandesgericht Wien, Austria, 7 November 1996, unpublished; Landgericht Heidelberg, Germany, 2 October 1996,
available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Oberlandesgericht Düsseldorf, Germany, 13 September 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July
1996] (see full text of the decision); CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland, 10 July 1996] (see full
text of the decision); Land-gericht Paderborn, Germany, 25 June 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/
cisg/; Amtsgericht Bottropp, Germany, 25 June 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Landgericht
Hamburg, Germany, 17 June 1996, Unilex; CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996] (see full text of
the decision); CLOUT case No. 143 [Fovárosi Biróság, Hungary, 21 May 1996]; CLOUT case No. 204 [Cour d’appel Grenoble, France,
15 May 1996]; Arbitration Court attached to the Bulgarian Chamber of Commerce and Industry, award No. 56/1995, unpublished;
Landgericht Aachen, Germany, 19 April 1996, Unilex; Landgericht Duisburg, Germany, 17 April 1996, Recht der internationalen Wirtschaft 1996, 774 ff.; CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996] (see full text of the decision); CLOUT case
No. 337 [Landgericht Saarbrücken, Germany, 26 March 1996]; Tribunale di Busto Arsizio, Italy, 31 December 2001, Rivista di Diritto
Internazionale Privato e Processuale 2003, pp. 150-155 (UNILEX) (Ecuador and Italy); Corte d’Appello di Milano, Italy, 23 January
2001, Rivista di Diritto Internazionale Privato e Processuale, 2001, 1008 ff. (Finland and Italy, question not regarding part II of
Convention).
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 15.
46
47
For an analysis of the issue of exclusion of the Convention, see the Digest for article 6.
See CLOUT case No. 309 [Østre Landsret, Denmark, 23 April 1998]; CLOUT case No. 143 [Fovárosi Biróság, Hungary, 21 May
1996]; CLOUT case No. 228 [Oberlandesgericht Rostock, Germany, 27 July 1995]; ICC Court of Arbitration, award No. 7585/92;
Unilex.
48
49
Upon accession to the Convention Canada declared, pursuant to article 93, that the Convention would be applicable in some but not
all of its territorial units. Since accession Canada has extended the application of the Convention to specific territorial units not covered
by its original accession
50
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 15.
51
For cases referring to art. 1 (1) (b), see CLOUT case No. 631 [Supreme Court of Queensland, Australia, [2000] QSC 421 (17 November 2000)] (Malaysian and Australian parties chose law applying in Brisbane); Cámara Nacional de Apelaciones en lo Comercial,
Argentina, 24 April 2000, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/000424a1.html; CLOUT case
No. 400 [Cour d’appel Colmar, France, 24 October 2000]; Trib. Pavia, Italy, 29 December 1999, Corriere giuridico 2000, 932 f.; CLOUT
case No. 348 [Oberlandesgericht Hamburg, Germany, 26  November 1999] (see full text of the decision); CLOUT case No. 294 [Oberlandesgericht Bamberg, Germany, 13 January 1999] (see full text of the decision); CLOUT case No. 251 [Handelsgericht des Kantons
Zürich, Switzerland, 30 November 1998]; CLOUT case No. 274 [Oberlandesgericht Celle, Germany, 11 November 1998]; CLOUT case
No. 309 [Østre Landsret, Denmark 23 April 1998]; Corte d’Appello Milano, Italy, 20 March 1998, Rivista di Diritto Internazionale
Privato 1998, 170 ff.; CLOUT case No. 238 [Oberster Gerichtshof, Austria, 12  February 1998] ; CLOUT case No. 224 [Cour de Cassation, France, 27 January 1998] (see full text of the decision); Hoge Raad, Netherlands, 7 November 1997, Nederlands Internationaal
Privaatrecht 1998, No. 91; Rechtbank Koophandel, Kortrijk, Belgium, 6 October 1997, Unilex; CLOUT case No. 283 [Oberlandesgericht
Köln, Germany, 9 July 1997]; Rechtbank Zutphen, Netherlands, 29  May 1997, Nederlands Internationaal Privaatrecht 1997, No. 110;
CLOUT case No. 227 [Oberlandesgericht Hamm, Germany, 22 September 1992] (see full text of the decision); CLOUT case No. 214
[Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997] (see full text of the decision); Rechtbank Koophandel, Kortrijk,
Belgium, 6 January 1997, Unilex; CLOUT case No. 205 [Cour d’appel Grenoble, France, 23 October 1996], also in Unilex; Rechtbank
Koophandel, Hasselt, Belgium, 9  October 1996, Unilex; Schiedsgericht der Handelskammer Hamburg, Germany, Arbitration, 21 June
1996, Recht der internationalen Wirtschaft 1996, 771 ff.; Hof Leeuwarden, Netherlands, 5 June 1996, Nederlands Internationaal
Privaatrecht 1996, No. 404; Landgericht Oldenburg, Germany, 27 March 1996, available on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/; CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg, Germany, 21 March, 21 June 1996];
Landgericht Bad Kreuznach, Germany, 12 March 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT
case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision); Landgericht Siegen , Germany, 5 December
Part one. Sphere of application and general provisions
11
1995, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Rechtbank Koophandel, Hasselt, Belgium, 8  November 1995,
Unilex; Landgericht Hamburg, Germany, 23 October 1995, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Rechtbank Koophandel, Hasselt, Belgium, 18 October 1995, Rechtskundig Weekblad 1995, 1378 f.; Trib. comm. Nivelles, Belgium, 19  September 1995, Unilex; Rechtbank Almelo, Netherlands, 9 August 1995, Nederlands Internationaal Privaatrecht 1995, No. 520; CLOUT
case No. 276 [Oberlandesgericht Frankfurt am Main, Germany, 5 July 1995] (see full text of the decision); CLOUT case No. 262 [Kanton
St. Gallen, Gerichtskommission Oberrheintal, Switzerland, 30 June 1995]; Landgericht Kassel, Germany, 22  June 1995, available on the
Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 152 [Cour d’appel Grenoble, France, 26 April 1995]; Amtsgericht
Wangen, Germany, 8 March 1995, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Rechtbank Zwolle, Netherlands,
1 March 1995, Nederlands Internationaal Privaatrecht 1996, No. 95; Rechtbank Middelburg, Netherlands, 25 January 1995, Nederlands
Internationaal Privaatrecht 1996, No. 127; CLOUT case No. 155 [Cour de Cassation, France, 4 January 1995] (see full text of the
decision); Amtsgericht Mayen, Germany, 6 September 1994, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Landgericht Düsseldorf, Germany, 25 August 1994, Unilex; CLOUT case No. 302 [ICC Court of Arbitration, award No. 7660/JK], see also
Unilex; CLOUT case No. 93 [Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, 15 June
1994]; CLOUT case No. 94 [Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, 15 June
1994]; CLOUT case No. 92 [Arbitration—Ad hoc tribunal, 19 April 1994]; CLOUT case No. 120 [Oberlandesgericht Köln, Germany,
22 February 1994] (see full text of the decision); CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994];
CLOUT case No. 80 [Kammergericht Berlin, Germany, 24 January 1994] ; CLOUT case No. 100 [Rechtbank Arnhem, Netherlands,
30 December 1993]; CLOUT case No. 156 [Cour d’appel Paris, France, 10  November 1993] (see full text of the decision); CLOUT
case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993]; CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany,
2 July 1993]; CLOUT case No. 25 [Cour d’appel Grenoble, France, 16 June 1993]; CLOUT case No. 201 [Richteramt Laufen des
Kantons Berne, Switzerland, 7 May 1993]; CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March 1993]; CLOUT
case No. 99 [Rechtbank Arnhem, Netherlands, 25 February 1993]; CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany,
13 January 1993] (see full text of the decision); CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993]; CLOUT
case No. 95 [Zivilgericht Basel-Stadt, Switzerland, 21 December 1992] (see full text of the decision); CLOUT case No.  317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992]; CLOUT case No. 227 [Oberlandesgericht Hamm, Germany 22 September 1992]
(see full text of the decision); CLOUT case No. 56 [Canton of Ticino Pretore di Locarno-Campagna, Switzerland, 27 April 1992] (see
full text of the decision); CLOUT case No. 158 [Cour d’appel Paris, France, 22 April 1992] ; CLOUT case No. 98 [Rechtbank Roermond, Netherlands, 19 December 1991]; CLOUT case No.  55 [Canton of Ticino Pretore di Locarno-Campagna, Switzerland, 16  December
1991, cited as 15 December in CLOUT case No. 55]; CLOUT case No. 316 [Oberlandesgericht Koblenz, Germany, 27  September 1991];
CLOUT case No. 2 [Oberlandesgericht Frankfurt am Main, Germany, 17  September 1991] (see full text of the decision).
52
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision).
53
For the text of this Convention, see Official Journal L 266 , 9 October 1980, 1 et seq.
See Hof Beroep, Gent, Belgium, 15 May 2002, available on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-05-15.
html; CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996] (see full text of the decision); ICC Court Arbitration,
award No. 8324/95, Journal du droit international 1996, 1019 ff.; Rechtbank s’Gravenhage, Netherlands, 7 June 1995, Nederlands Internationaal Privaatrecht 1995, Nr. 524; CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993]; CLOUT case
No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993].
54
55
See article 3 of the Rome Convention:
“1. A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law
applicable to the whole or a part only of the contract.
2. The parties may at any time agree to subject the contract to a law other than that which previously governed it, whether
as a result of an earlier choice under this article or of other provisions of this Convention. Any variation by the parties of the
law to be applied made after the conclusion of the contract shall not prejudice its formal validity under article 9 or adversely
affect the rights of third parties.
3. The fact that the parties have chosen a foreign law, whether or not accompanied by the choice of a foreign tribunal, shall
not, where all the other elements relevant to the situation at the time of the choice are connected with one country only, prejudice
the application of rules of the law of that country which cannot be derogated from by contract, hereinafter called “mandatory
rules”.
4. The existence and validity of the consent of the parties as to the choice of the applicable law shall be determined in
accordance with the provisions of articles 8, 9 and 11.”
56
1955 Hague Convention on the Law Applicable to International Sale of Goods, 510 U.N.T.S.  149, No. 7411 (1964).
See article 2 of the Hague Convention: “A sale shall be governed by the domestic law of the country designated by the Contracting
Parties. Such designation must be contained in an express clause, or unambiguously result from the provisions of the contract. Conditions affecting the consent of the parties to the law declared applicable shall be determined by such law.”
57
58
For cases applying the United Nations Sales Convention by virtue of a choice of law acknowledged by the judges on the grounds
of article 2 of the 1995 Hague Convention, see Trib.  Comm. Bruxelles, Belgium, 13 November 1992, Unilex.
59
See, for example, Netherlands Arbitration Institute, Arbitral Award, 15 October 2002, available on Unilex.
For cases referring to “closest connection”, see CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994]
(see full text of the decision); Landgericht Düsseldorf, Germany, 25 August 1994, available on the Internet at http://www.unilex.info/
case.cfm?pid=1&do=case&id=150&step=FullText; Rechtbank Roermond, Netherlands, 6 May 1993, Unilex; CLOUT case No. 316 [Oberlandesgericht Koblenz, Germany, 27 September 1991] (see full text of the decision); CLOUT case No. 1 [Oberlandesgericht Frankfurt
am Main, Germany, 13 June 1991] (see full text of the decision).
60
61
For cases expressly pointing out that the seller is the party that has to effect the characteristic performance, see Landgericht Berlin,
Germany, 24 March 1998, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=440&step=FullText;
Landgericht München, Germany, 6 May 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/341.htm;
12
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Rechtbank Amsterdam, Netherlands, 5 October 1994, Nederlands Internationaal Privaatrecht, 1995, No. 231; CLOUT case No. 81
[Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision); CLOUT case No. 317 [Oberlandesgericht
Düsseldorf, Germany, 12 March 1993] (see full text of the decision); CLOUT case No. 6 [Landgericht Frankfurt am Main, Germany,
16 September 1991] (see full text of the decision); Landgericht Frankfurt am Main, Germany, 2 May 1990, available on the Internet at
http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/183.htm.
62
For cases applying the Convention on the basis of the presumption referred to in the text, see, e.g. Cour d’appel Mons, Belgium,
8  March 2001, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2001-03-08.htm; Landgericht Bad Kreuznach,
Germany, 12 March 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/517.htm; Landgericht Frankfurt
am Main, Germany, 6 July 1994, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=189&step=FullText;
CLOUT case No.  50 [Landgericht Baden-Baden, Germany, 14 August 1991] (see full text of the decision).
63
See Rechtbank Hasselt, Belgium, 9 October 1996, Unilex; Rechtbank Hasselt, Belgium, 8  November 1995, Unilex; CLOUT case
No. 152 [Cour d’appel Grenoble, France, 26 April 1995]; Rechtbank Hasselt, Belgium, 18 October 1995, Rechtskundig Weekblad 1995,
1378 f.; Trib. Comm. Bruxelles, Belgium, 5 October 1994, Unilex; KG Wallis, Switzerland, 6 December 1993, Unilex; CLOUT case
No. 201 [Richteramt Laufen des Kantons Berne, Switzerland, 7 May 1993]; CLOUT case No. 56 [Canton of Ticino Pretore di LocarnoCampagna, Switzerland, 27 April 1992] (see full text of the decision).
64
Cour de Cassation, France, 26 June 2001, available on the Internet at http://witz.jura.uni-sb.de/CISG/decisions/2606011v.htm; Trib.
Verona, Italy, 19 December 1997, Rivista Veronese di Giurisprudenza Economica e dell’Impresa 1998, 22 ff.
65
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981,
229.
66
To date the following States have declared an article 95 reservation: China, Czech Republic, Saint Vincent and the Grenadines, Singapore, Slovakia, United States of America. When it acceded to the Convention Canada declared an article 95 reservation with respect
to a single province – British Columbia – but it later withdrew that declaration. Germany has declared that it will not apply article  1  (1) (b)
in respect of any State that has made a declaration that it would not apply article  1  (1) (b).
67
See CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7  December 1999]; CLOUT case
No.  416 [Minnesota [State] District Court, United States, 9  March 1999]; CLOUT case No. 419 [Federal District Court, Northern District
of Illinois, United States, 27 October 1998]; CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States,
29 June 1998]; CLOUT case No. 413 [Federal District Court, Southern District of New York, United States, 6 April 1998]; CLOUT
case No. 187 [Federal District Court, Southern District of New York, United States, 23 July 1997]; CLOUT case No.  138 [Federal Court
of Appeals for the Second Circuit, United States, 6 December 1995]; CLOUT case No. 86 [Federal District Court, Southern District of
New York, United States 22  September 1994]; CLOUT case No. 85 [Federal District Court, Northern District of New York, United
States, 9 September 1994]; CLOUT case No. 24 [Federal Court of Appeals for the Fifth Circuit, United States, 15 June 1993]; CLOUT
case No. 23 [Federal District Court, Southern District of New York, United States, 14 April 1992].
68
See Rechtbank Koophandel, Kortrijk, Belgium, 16 December 1996, Unilex; Rechtbank Koophandel, Hasselt, Belgium, 9 October
1996, Unilex; Rechtbank Koophandel, Hasselt, Belgium, 8 November 1995, Unilex; Rechtbank Koophandel, Hasselt, Belgium, 18 October
1995, Rechtskundig Weekblad 1995, 1378 f.; Trib. Comm. Nivelles, Belgium, 19 September 1995, Unilex; Trib. Comm. Bruxelles,
Belgium, 5 October 1994, Unilex; Rechtbank Koophandel, Hasselt, Belgium, 16 March 1994, Unilex; Rechtbank Koophandel, Hasselt,
Belgium, 23  February 1994, Unilex; Trib. Comm. Bruxelles, Belgium, 13 November 1992, Unilex; CLOUT case No. 98 [Rechtbank
Roermond, Netherlands, 19 December 1991]; Amtsgericht Ludwigsburg, Germany, 21 December 1990, available on the Internet at http://
www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990]; Rechtbank
Dordrecht, Netherlands, 21 November 1990, Nederlands Internationaal Privaatrecht 1991, No. 159; Landgericht Hildesheim, Germany,
20 July 1990, published at the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Landgericht Frankfurt am Main, Germany, 2 May
1990, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 7 [Amtsgericht Oldenburg in Holstein,
Germany, 24 April 1990]; CLOUT case No. 46 [Landgericht Aachen, Germany, 3 April 1990]; Oberlandesgericht Koblenz, Germany,
23  February 1990, Recht der internationalen Wirtschaft 1990, 316 ff.; Rechtbank Alkmaar, Netherlands, 8 February 1990, Nederlands
Internationaal Privaatrecht 1990, No. 460; Rechtbank Alkmaar, Netherlands, 30  November 1989, Nederlands Internationaal Privaatrecht
No. 289; CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989]; CLOUT case No. 3 [Landgericht München, Germany,
3 July 1989].
Part one. Sphere of application and general provisions
13
Article 2
This Convention does not apply to sales:
(a) Of goods bought for personal, family or household use, unless the seller, at
any time before or at the conclusion of the contract, neither knew nor ought to have
known that the goods were bought for any such use;
(b) By auction;
(c) On execution or otherwise by authority of law;
(d) Of stocks, shares, investment securities, negotiable instruments or money;
(e) Of ships, vessels, hovercraft or aircraft;
(f) Of electricity.
Overview
1. This provision identifies sales that are excluded from
the Convention’s sphere of application. The exclusions are
of three types: those based on the purpose for which the
goods were purchased, those based on the type of transaction, and those based on the kinds of goods sold.1
Consumer sales
2. According to article 2 (a), a sale falls outside the Convention’s sphere of application if it relates to goods which
at the time of the conclusion of the contract are intended
to be used personally, in the family or in the household. It
is the buyer’s intention at the time of the conclusion of the
contract that is relevant,2 rather than the buyer’s actual use
of the goods.3 Thus, the purchase of a car4 or a recreational
trailer5 for personal use falls outside the Convention’s
sphere of application.6
3. If the goods are purchased by an individual for a commercial or professional purpose, the sale does not fall outside the Convention’s sphere of application. Thus, the
following situations are governed by the Convention: the
purchase of a camera by a professional photographer for
use in his business; the purchase of a soap or other toiletries
by a business for the personal use of its employees; the
purchase of a single automobile by a dealer for resale.7
4. If goods are purchased for the aforementioned “personal, family or household use” purposes, the Convention
is inapplicable “unless the seller, at any time before or at
the conclusion of the contract, neither knew nor ought to
have known that the goods were bought for any such use”.8
If this “unless” clause is satisfied the CISG applies, provided the other requirements for its applicability are met.
This narrows the reach of the article 2 (a) exception, and
leads to the possibility of a conflict between domestic
consumer protection law and the Convention in those cases
where applicability of the domestic law does not require
that the seller either knew or ought to have known of the
buyer’s intended use.9
Other exclusions
5. The exclusion of sales by auction (article 2 (b)) covers
auctions resulting from authority of law as well as private
auctions. Sales at commodity exchanges do not fall under
the exclusion, as they merely constitute a particular way
of concluding the contract.
6. Under article 2 (c) sales on judicial or administrative
execution or otherwise by authority of law are excluded
from the Convention’s sphere of application as such sales
are normally governed by mandatory laws of the State
under whose authority the execution is made.
7. The exclusion of sales of stocks, investment securities,
and negotiable instruments (article 2 (d)) is intended to
avoid a conflict with mandatory rules of domestic law.10
Documentary sales do not fall within this exclusion.
8. Under article 2 (e) sales of ships,11 vessels, aircraft,12
and hovercraft are also excluded from the Convention.
However, sales of parts of ships, vessels, aircraft, and hovercraft—including essential components, such as engines13—
may be governed by the Convention since exclusions from
the Convention’s sphere of application must be interpreted
restrictively. According to one arbitral tribunal, the sale of
a decommissioned military submarine is not excluded by
article 2 (e).14
9. Although the sale of electricity is excluded from the
Convention’s sphere of application (article 2 (f)), a court
has applied the Convention to a sale of propane gas.15
14
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Notes
1
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 16
(hereinafter “Official Records”).
2
See CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Internationales Handelsrecht, 2002, 16.
3
See CLOUT case No. 190 [Oberster Gerichtshof, Austria, 11 February 1997].
See CLOUT case No. 213 [Kantonsgericht Nidwalden, Switzerland, 5 June 1996]; CLOUT case No. 190 [Oberster Gerichtshof,
Austria, 11 February 1997].
4
5
See Rechtbank Arnhem, 27 May 1993, Nederlands Internationaal Privaatrecht, 1994, No. 261.
See, however, Landgericht Düsseldorf, 11 October 1995, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg, applying
the Convention on the sale of a generator destined for personal use.
6
7
For these examples, see Official Records, supra note 1, at 16.
8
See CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Internationales Handelsrecht, 2002, 16.
9
Id.
For decisions excluding the Convention’s applicability to the sale of shares, see CLOUT case No. 260, Switzerland, 1998; Zurich
Chamber of Commerce Arbitral Tribunal, ZHK 273/95, Yearbook Commercial Arbitration, 1998, 128 ff.
10
For cases of inapplicability of the Convention to contract for the sale of ships, see Tribunal of International Commercial Arbitration
at the Russian Federation Chamber of Commerce and Industry, Russian Federation, award in case No. 236/1997 of 6 April 1998 available on the Internet at http://cisgw3.law.pace.edu/cases/980406r1.html; Yugoslav Chamber of Economy Arbitration Proceeding 15 April
1999, award No. T-23/97, available on the Internet at http://cisgw3.law.pace.edu/cases/990415y1.html.
11
For the inapplicability of the Convention to a contract for the sale of an aircraft, see Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation, award in case No. 255/1996 of 2 September
1997, available on the Internet at http://cisgw3.law.pace.edu/cases/970902r1.html.
12
13
See CLOUT case No. 53 [Legfelsóbb Biróság, Hungary, 25 September 1992].
See Russian Maritime Commission Arbitral Tribunal, 18 December 1998, available on the Internet at http://cisgw3.law.pace.edu/cisg/
text/draft/981218case.html.
14
15
See CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996].
Part one. Sphere of application and general provisions
15
Article 3
1. Contracts for the supply of goods to be manufactured or produced are to be
considered sales unless the party who orders the goods undertakes to supply a substantial
part of the materials necessary for such manufacture or production.
2. This Convention does not apply to contracts in which the preponderant part
of the obligations of the party who furnishes the goods consists in the supply of labour
or other services.
Overview
1. This provision makes clear that the Convention’s sphere
of application encompasses some contracts that include acts
in addition to the supply of goods.1
Contracts for the sale of goods to be
manufactured or produced
2. Under paragraph 1 of article 3, the Convention applies
to contracts for the sale of goods to be manufactured or
produced.2 This makes clear that the sale of such goods is
as much subject to the provisions of the Convention as the
sale of ready-made goods.3 This aspect of the Convention’s
sphere of application is, however, subject to a limitation:
contracts for goods to be manufactured or produced are not
governed by the Convention if the party who “orders” the
goods supplies a “substantial part” of the materials necessary for their manufacture or production.4 Article 3 does
not provide specific criteria for determining when the materials supplied by the buyer constitute a “substantial part”.
One decision suggests that a purely quantitative test should
be used in this determination.5
3. A different—albeit related—issue is whether providing
instructions, designs or specifications used for producing
goods is the supply of “materials necessary” for the goods’
manufacture or production; if so, a sales contract in which
the buyer supplies such information is excluded from the
Convention’s sphere of application if the “substantial part”
criterion is met. In one case, a court held that the Convention was inapplicable, on the grounds of article 3 (1), to a
contract under which the seller had to manufacture goods
according to the buyer’s design specifications.6 The court
deemed the plans and instructions that the buyer transmitted to the seller to constitute a “substantial part of the
materials necessary” for the production of the goods. Other
courts have found that design specifications are not considered “materials necessary for the manufacture or production of goods” within the meaning of article 3 (1).7
Contracts for the delivery
of labour and services
4. Article 3 (2) extends the Convention’s sphere of application to contracts in which the seller’s obligations
include—in addition to delivering the goods, transferring
the property and handing over the documents8—a duty to
provide labour or other services, as long as the supply of
labour or services does not constitute the “preponderant
part” of the seller’s obligations.9 It has been held that work
done to produce the goods themselves is not to be considered the supply of labour or other services for purposes
of article 3 (2).10 In order to determine whether the obligations of the seller consist preponderantly in the supply of
labour or services, a comparison must be made between
the economic value of the obligations relating to the supply
of labour and services and the economic value of the obligations regarding the goods,11 as if two separate contracts
have been made.12 Thus, where the obligation regarding the
supply of labour or services amounts to more than
50  per  cent of the obligations of the seller, the Convention
is inapplicable. It is on this basis that a court decided that
a contract for a market study did not fall under the Convention’s sphere of application.13 On the other hand, a contract for the dismantling and sale of a second-hand hangar
was deemed to fall within the Convention’s sphere of application on the ground that the value of the dismantling services amounted to only 25 per cent of the total value of the
contract.14
5. One court has stated that, because a clear calculation
comparing the values of the goods and the services covered
by a contract would not always be possible, other factors—such as the circumstances surrounding the conclusion
of the contract and the purpose of the contract—should
also be taken into account in evaluating whether the obligation to supply labour or services is preponderant.15 Another
court referred to the essential purpose of the contract as
a criterion relevant in determining whether or not the
Convention was applicable.16
Notes
1
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 16.
16
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
2
See Hof van Beroep Gent, Belgium, 15 May 2002, available on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-05-15.
html; CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002 (see full text of the decisions); Oberster Gerichtshof,
18 April 2001, available on the Internet at http://www.cisg.at/7_7601d.htm; Saarländisches Oberlandesgericht Saarbrücken, 14 February
2001, Internationales Handelsrecht, 2001, 64; Oberlandesgericht Stuttgart, Germany, 28 February 2000, available on the Internet at http://
www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/583.htm; CLOUT case No. 630 [Court of Arbitration of the International Chamber of
Commerce, Zurich, Switzerland, July 1999]; CLOUT case No. 325 [Handelsgericht des Kantons Zürich, Switzerland, 8 April 1999];
CLOUT case No. 331 [Handelsgericht des Kantons Zürich, Switzerland, 10 February 1999]; CLOUT case No. 252 [Handelsgericht des
Kantons Zürich, Switzerland, 21 September 1998] (see full text of the decision); CLOUT case No. 337 [Landgericht Saarbrücken, Germany, 26 March 1996]; CLOUT case No. 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and
Industry, Hungary, 5  December 1995]; Hof s’Hertogenbosch, Netherlands, 9 October 1995, Nederlands Internationaal Privaatrecht, 1996,
No. 118; Landgericht Oldenburg, Germany, 9 November 1994, Recht der internationalen Wirtschaft, 1996, 65 f.; CLOUT case No. 167
[Oberlandesgericht München, Germany, 8 February 1995] (see full text of the decision); CLOUT case No. 262 [Kanton St. Gallen,
Gerichtskommission Oberrheintal, Switzerland, 30 June 1995]; Landgericht Memmingen, Germany, 1 December 1993, Praxis des internationalen Privat- und Verfahrensrechts, 1995, 251 f.; CLOUT case No. 302 [ICC Court of Arbitration Award 7660/JK], see also ICC
Court of Arbitration Bulletin, 1995, 69 ff.; ICC Court of Arbitration Award No. 7844/1994, ICC Court of Arbitration Bulletin, 1995,
72  ff.; CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993]; CLOUT case No. 95 [Zivilgericht
Basel-Stadt, Switzerland, 21  December 1992] (see full text of the decision).
3
See also United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official
Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee,
1981, 17.
4
For the applicability of the CISG in cases where reference was made to article 3 (1), but where the courts stated that the “substantial
part of the materials necessary” was provided by the seller, see Landgericht München, 27 February 2002, available on the Internet at
http://131.152.131.200/cisg/urteile/654.htm; CLOUT case No. 313 [Cour d’appel Grenoble, France, 21 October 1999]; Landgericht Berlin,
Germany, 24 March 1998, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=440&step=FullText.
5
See CLOUT case No. 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
5 December 1995] (see full text of the decision).
6
See CLOUT case No. 157 [Cour d’appel Chambéry, France, 25 May 1993].
See CLOUT case No. 331 [Handelsgericht des Kantons Zürich, Switzerland, 10 February 1999] (see full text of the decision); CLOUT
case No. 2 [Oberlandesgericht Frankfurt am Main, Germany, 17 September 1991] (see full text of the decision).
7
8
For a definition of a contract for the sale of goods under the Convention, see the text of the Digest relating to art. 1.
See Hof Arnhem, Netherlands, 27 April 1999, Nederlands Internationaal Privaatrecht, 1999, No. 245; CLOUT case No. 327 [Kantonsgericht des Kantons Zug, Switzerland, 25 February 1999]; CLOUT case No. 287 [Oberlandesgericht München, Germany, 9 July
1997] (see full text of the decision); CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997]; CLOUT
case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995]; CLOUT case No. 152 [Cour d’appel Grenoble, France,
26 April 1995]; CLOUT case No. 105 [Oberster Gerichtshof, Austria, 27 October 1994]; CLOUT case No. 201 [Richteramt Laufen des
Kantons Berne, Switzerland, 7 May 1993]; for a decision in which article 3 (2) was cited, but in which the court did not resolve the
issue of whether the contract was one for the sale of goods or one for the supply of labour and services, see Rechtbank Koophandel
Hasselt, 19  September 2001, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2001-09-19.htm.
9
10
CLOUT case No. 481 [Court d’ Appel Paris, France, 14 June 2001]. See also CLOUT case No. 541 [Oberster Gerichtshof, Austria,
14  January 2002 (see full text of the decisions) (approving lower appeals court’s approach that applied the Convention to contract for
the sale of specially manufactured goods and rejected trial court’s holding that the Convention was inapplicable because the services
used to produce the goods constituted the preponderant part of the seller’s obligations)
11
See CLOUT case No. 327 [Kantonsgericht des Kantons Zug, Switzerland, 25 February 1999].
For an implicit affirmation of the principle referred to in the text, see CLOUT case No. 26 [Arbitration—International Chamber of
Commerce no. 7153 1992].
12
13
See CLOUT case No. 122 [Oberlandesgericht Köln, Germany, 26 August 1994].
14
See CLOUT case No. 152 [Cour d’appel Grenoble, France, 26 April 1995] (see full text of the decision).
15
See CLOUT case No. 346 [Landgericht Mainz, Germany, 26 November 1998].
See Cass. civ., Italy, 9 June 1995, no. 6499, Foro padano, 1997, 2 ff., available on the Internet at http://www.unilex.info/dynasite.
cfm?dssid=2376&dsmid=13354&x=1 and at http://www.cisg.law.pace.edu/cgi-bin/isearch.
16
Part one. Sphere of application and general provisions
17
Article 4
This Convention governs only the formation of the contract of sale and the rights
and obligations of the seller and the buyer arising from such a contract. In particular,
except as otherwise expressly provided in this Convention, it is not concerned with:
(a) The validity of the contract or of any of its provisions or of any usage;
(b) The effect which the contract may have on the property in the goods sold.
Overview
1. The first sentence of article 4 lists matters as to which
the Convention’s provisions prevail over those of domestic
law—i.e. the formation of contract and the rights and obligations of the parties1; the second sentence contains a nonexhaustive list of issues with which, except where the
Convention expressly provides otherwise, it is not concerned—namely the validity of the contract or any of its
provisions or any usage, as well as the effect which the
contract may have on the property in the goods sold. The
issues referred to in the second part of article 4 were
excluded from the Convention because dealing with them
would have delayed the conclusion of the Convention.2
2. Matters not governed by the Convention are to be settled either in conformity with the applicable uniform rules3
or the applicable domestic law.4
Issues dealt with by the Convention
3. As far as formation of the contract is concerned, the
Convention merely governs the objective requirements for
concluding the contract.5 The issue of whether a contract
is validly formed, however, is subject to the applicable
national rules, except for those issues for which the Convention provides exhaustive rules.6 Thus issues such as
capacity to contract7 and the consequences of mistake,
duress and fraud are left to the applicable domestic law.8
Where, however, one party errs concerning the quality of
the goods to be delivered or the solvency of the other party,
the rules of the otherwise-applicable law give way to those
of the Convention, since the Convention exhaustively deals
with those matters.
4. Although article 4 does not mention the issue as one
governed by the Convention, some courts9 (albeit not all)10
have concluded that burden of proof questions come within
the scope of the Convention.11 This view is based on the
fact that the Convention includes at least one provision,
article 79, that expressly deals with the burden of proof.12
The issue is therefore governed by the Convention, albeit—
outside of situations governed by article 79 or any other
provision that expressly addresses the issue—not expressly
settled in it; thus article 7 (2) requires the question to be
resolved in conformity with the general principles on which
the Convention is based.13 The following general principles
for allocating the burden of proof have been identified: the
party that wants to derive beneficial legal consequences
from a legal provision has to prove the existence of the
factual prerequisites of the provision;14 the party claiming
an exception has to prove the factual prerequisites of that
exception.15
5. These principles have led courts to conclude that a
buyer who asserts that goods are non-conforming has the
burden of proving the non-conformity as well as the existence of a proper notice of non-conformity.16 Similarly, two
courts decided that the buyer had to pay the price and was
not entitled to damages or to avoidance of the contract for
non-conformity of the goods under article 35 because the
buyer had not proved the non-conformity.17 In one case, a
court decided that the buyer had lost the right to rely upon
a non-conformity because it did not prove that it gave
timely notice thereof to the seller.18
6. The aforementioned general principles have been used
to allocate the burden of proof under article 42 of the CISG.
Article 42 provides that the seller must deliver goods which
are free from any third-party right or claim based on industrial property or other intellectual property, of which the
seller knew or could not have been unaware. In two cases
courts held that the buyer had the burden of proving that
the seller knew or could not have been unaware of the
third-party industrial or intellectual property rights.19
7. The Convention’s general principles on burden of proof
were also the basis for several decisions dealing with damages issues. One court stated that “according to the Convention the damaged buyer has the burden of proving the
objective prerequisites of his claim for damages. Thus, he
has to prove the damage, the causal link between the
breach of contract and the damage as well as the foreseeability of the loss”.20 Other cases have stated more
generally that the party claiming damages has to prove
the losses suffered.21
Validity of the contract and of usages
8. Although the Convention generally leaves issues concerning the validity of the contract to the applicable national
law,22 in at least one respect the Convention’s provisions
18
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
may contradict domestic validity rules.23 Article  11 provides that a contract for the international sale of goods need
not be concluded in or evidenced by writing and is not
subject to any other requirement of form; in some legal
systems form requirements for a contract for the sale of
goods are considered to be a matter of contractual validity.
For the question whether domestic law requirements of
“consideration” or “causa” are matters of “validity” beyond
the scope of the Convention, see paragraph 10 of the Digest
for Part II of the Convention.
9. The issue of whether a contract was validly concluded
by a third person acting on behalf of one of the parties is
left to the applicable national law, since agency is not governed by the Convention.24 The same is true for the validity
of standard contract terms.25
10. The validity of usages—which is not dealt with by the
Convention,26 but is left to the applicable domestic law27—
must be distinguished from the question of how usages are
defined, under what circumstances they bind the parties, and
what their relationship is with the rules set forth in the
Convention. The latter issues are dealt with in article 9.28
Effect on the property in the goods sold
11. The Convention makes clear that it does not govern
the passing of the property in the goods sold.29 During the
drafting process, it was deemed impossible to unify the
rules on this point.30 Thus the effect of a sales contract on
the property in the goods is left to the applicable national
law, to be determined by the rules of private international
law of the forum.
12. The Convention does not govern the validity of a
retention of title clause.31
Other issues not dealt with
by the Convention
13. The Convention itself expressly lists several examples
of issues with which it is not concerned.32 There are many
other issues not governed by the Convention. Courts have
identified the following additional issues as beyond the
Convention’s scope of application: the validity of a choice
of forum clause,33 the validity of a penalty clause,34 the
validity of a settlement agreement,35 an assignment of
receivables,36 assignment of a contract,37 set-off38 (at least
where the receivables do not all arise from contracts governed by the Convention),39 the statute of limitations,40 the
issue of whether a court has jurisdiction41 and, generally,
any other issue of procedural law,42 an assumption of
debts,43 an acknowledgement of debts,44 the effects of the
contract on third parties45 as well as the issue of whether
one is jointly liable.46 According to some courts, the
Convention does not deal with tort claims.47
14. One court has found that estoppel issues are not governed by the Convention,48 but other courts have concluded
that estoppel should be regarded as a general principle of
the Convention.49 A court has also ruled that the question
of priority rights in the goods as between the seller and a
third party creditor of the buyer was, under CISG article
4, beyond the scope of the Convention and was governed
instead by applicable national law, under which the third
party creditor prevailed.50
15. According to some courts, the issue of the currency
of payment is not governed by the Convention and, in the
absence of a choice by the parties,51 is left to applicable
domestic law.52 One court found that, absent an agreement
of the parties on the matter, the currency of payment is the
currency of the place of payment as determined on the
basis of article 57.53
Notes
1
CLOUT case No. 241 [Cour de Cassation, France, 5 January 1999].
See Report of the Working Group on the International Sale of Goods on the work of its ninth session (Geneva, 19-30 September
1977) (A/CN.9/142), reproduced in the UNCITRAL Yearbook, 1978, at p. 65, paras. 48-51, 66, 69.
2
3
See CLOUT case No. 202 [Cour d’appel Grenoble, France, 13 September 1995], stating that the assignment of receivables is not
governed by the Convention and applying the 1988 UNIDROIT Convention on International Factoring as the assignment fell under its
sphere of application (see full text of the decision).
4
See CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993].
5
See CLOUT case No. 95 [Zivilgericht Basel-Stadt, Switzerland, 21 December 1992] (see full text of the decision).
See CLOUT case No. 47 [Landgericht Aachen, Germany, 14 May 1993] (see full text of the decision). See also paragraph 8 of the
Digest for Part II of the Convention.
6
7
See CLOUT case No. 605 [Oberster Gerichtshof, Austria, 22 October 2001], also available on the Internet at http://www.cisg.at/
1_4901i.htm; CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990].
8
See Schiedsgericht der Handelskammer Zürich, Switzerland, award No. 273/95, available on the Internet at http://www.unilex.info/
case.cfm?pid=1&do=case&id=396&step=FullText.
9
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December
1999]; CLOUT case No. 331 [Handelsgericht des Kantons Zürich, Switzerland, 10 February 1999]; CLOUT case No. 196 [Handelsgericht
des Kantons Zürich, Switzerland, 26 April 1995]; CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September
1993].
10
See CLOUT case No. 261 [Berzirksgericht der Sanne, Switzerland, 20 February 1997]; CLOUT case No. 103 [Arbitration—
International Chamber of Commerce no. 6653 1993].
Part one. Sphere of application and general provisions
19
11
For a decision which refers to the issue of what law governs burden of proof without resolving the matter, see CLOUT case No.  253
[Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998].
12
For this line of argument, see Bundesgerichtshof, Germany, 9 January 2002, Internationales Handelsrecht, 2002, 19; CLOUT case
No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December 1999].
13
See CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993].
For references to this principle, see CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; Landgericht Frankfurt, 6  July
1994, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria,
1 July 1994] (see full text of the decision); CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Guirisprudenza
italiana, 2003, 896 ff.
14
15
CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Guirisprudenza italiana, 2003, 896 ff.
See CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998]; CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text of the decision).
16
17
See Landgericht Düsseldorf, Germany, 25 August 1994, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT
case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994].
18
See Rechtbank Koophandel Hasselt, Belgium, 21 January 1997, Unilex.
See Rechtbank Zwolle, Netherlands, 1 March 1995, Nederlands Internationaal Privaatrecht, 1995, No. 95; Hof Arnhem, Netherlands,
21 May 1996, Nederlands Internationaal Privaatrecht, 1996, No. 398.
19
CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text of the decision); for another
case dealing with the issues of damages and burden of proof, see CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland,
5 February 1997], stating that a buyer is generally entitled to interest on the loss of profit, but that in the case at hand the buyer lost
his right to interest as he did not prove the time in which the profit would have been made (see full text of the decision).
20
See CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December 1999]; CLOUT case No. 210 [Audienca Provincial Barcelona,
Spain, 20 June 1997]; Landgericht Düsseldorf, Germany, 25 August 1994, available on the Internet at http://www.jura.uni-freiburg.de/
ipr1/cisg/.
21
22
See CLOUT Case No. 579 [Federal] Southern District Court for New York, United States of America, 10 May 2002], 2002 U.S.
Dist. LEXIS 8411 (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.), also available on the Internet at http://cisgw3.law.pace.edu/
cases/020510u1.html; CLOUT case No. 433 [[Federal] Northern District Court for California, 21 July 2001], 2001 U.S. Dist. LEXIS
16000, 2001 Westlaw 1182401 (Asante Technologies, Inc. v. PMC-Sierra, Inc.), also available at http://www.cisg.law.pace.edu/cisg/wais/
db/cases2/010727u1.html; CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also available at http://www.cisg.
at/8_2200v.htm; Hof van Bereop Antwerpen, Belgium, 18 June 1996, available on the Internet at http://www.law.kuleuven.ac.be/int/
tradelaw/WK/1996-06-18.htm.
23
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10  March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 17.
24
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 333 [Handelsgericht des Kantons Aargau, Switzerland, 11 June 1999] (see full text of the decision); Landgericht Berlin, 24 March 1999, available
on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=440&step=FullText; CLOUT case No. 251 [Handelsgericht des
Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision); CLOUT case No. 189 [Oberster Gerichtshof, Austria,
20 March 1997] (see full text of the decision); CLOUT case No. 335 [AG Tessin, Switzerland, 12 February 1996], also in Schweizerische
Zeitschrift für europäisches und internationales Recht, 1996, 135 ff.; CLOUT case No. 334 [Obergericht des Kantons Thurgau, Switzerland, 19 December 1995]; CLOUT case No. 80 [Kammergericht Berlin, Germany, 24 January 1994] (see full text of the decision).
25
See CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also available on the Internet at http://www.cisg.
at/8_2200v.htm; Rechtbank Zutphen, Netherlands, 29 May 1997, Nederlands Internationaal Privaatrecht, 1998, No. 110; AG Nordhorn,
Germany, 14 June 1994, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/.
26
See CLOUT case No. 425 [Oberster Gerichtshof, 21 March 2000], also in Internationales Handelsrecht 2001, 40 et seq.
27
Id.
28
See CLOUT case No. 240 [Oberster Gerichtshof, Austria, 15 October 1998].
See CLOUT case No. 613 [ [Federal] Northern District for Illinois, USA 28 March 2002], also in 2002 Westlaw 655540 (Usinor
Industeel v. Leeco Steel Products, Inc.), and on the Internet at http://cisgw3.law.pace.edu/cases/020328u1.html. But see CLOUT case
No.  632 [[Federal] Bankruptcy Court, United States 10 April 2001] (citing CISG article 53 in support of the proposition that payment
or non-payment of the price was significant in determining whether title to goods had passed to the buyer).
29
30
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10  March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 17.
31
See CLOUT case No. 308 [Federal Court of Australia, 28 April 1995]; CLOUT case No. 226 [Oberlandesgericht Koblenz, Germany,
16 January 1992].
32
In addition to the issues listed in art. 4, art. 5 provides that the “Convention does not apply to the liability of the seller for death
or personal injury caused by the goods to any person.” See Digest art. 5.
33
See Camara Nacional de los Apelaciones en lo Comercial, Argentina, 14 October 1993, Unilex.
See Rechtbank van Koophandel Hasselt, 17 June 1998, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/1998-06-17.htm; Hof van Beroep Antwerpen, Belgium, 18 June 1996, available on the Internet at http://www.law.kuleuven.ac.be/
int/tradelaw/WK/1996-06-18.htm; Hof Arnhem, Netherlands, 22 August 1995, Nederlands Internationaal Privaatrecht, 1995, No.  514;
CLOUT case No. 104 [Arbitration—International Chamber of Commerce no. 7197 1993].
34
20
35
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
See CLOUT case No. 47 [Landgericht Aachen, Germany, 14 May 1993] (see full text of the decision).
See CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also available on the Internet at http://www.cisg.
at/8_2200v.htm; Oberster Gerichtshof, Austria, 25 June 1998, Zeitschrift für Rechtsvergleichung, 2000, 77; CLOUT case No. 269 [Bundesgerichtshof, Germany, 12 February 1998] (see full text of the decision); CLOUT case No. 334 [Obergericht des Kantons Thurgau,
Switzerland, 19 December 1995]; Trib. Comm. Nivelles, Belgium, 19 September 1995, Unilex; CLOUT case No. 132 [Oberlandesgericht
Hamm, Germany, 8 February 1995]; BG Arbon, Switzerland, 9 December 1994, Unilex.
36
37
See CLOUT case No. 124 [Bundesgerichtshof, Germany, 15 February 1995] (see full text of the decision).
See CLOUT case No. 605 [Oberster Gerichtshof, 22 October 2001], also in Internationales Handelsrecht, 2002, 27; CLOUT case
No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] also in Internationales Handelsrecht, 2001, 114 f.; CLOUT case No. 232 [Oberlandesgericht München, Germany,
11 March 1998]; CLOUT case No. 259 [Kantonsgericht Freiburg, Switzerland, 23 January 1998]; Landgericht Hagen, Germany,
15 October 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Landgericht München, Germany, 6 May 1997,
available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/341.htm; CLOUT case No. 273 [Oberlandesgericht
München, Germany, 9 July 1997] (see full text of the decision); CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany,
24 April 1997] (see full text of the decision); CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July 1996]; Landgericht
Duisburg, Germany, 17 April 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 289 [Oberlandesgericht Stuttgart, Germany, 21 August 1995]; Landgericht München, Germany, 20 March 1995, available on the Internet at http://
www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/164.htm; Rechtbank Middelburg, Netherlands, 25 January 1995, Nederlands Internationaal
Privaatrecht, 1996, No. 127; Amtsgericht Mayen, Germany, 19 September 1994, available on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/; CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993]; CLOUT case No. 125 [Oberlandesgericht
Hamm, Germany, 9  June 1995]; Rechtbank Roermond, Netherlands, 6 May 1993, Unilex; CLOUT case No. 99 [Rechtbank Arnhem,
Netherlands, 25 February 1993].
38
For the application of the Convention to set-off in respect of receivables arising out of contracts governed by the Convention, see
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000], also in Internationales Handelsrecht, 2001, 114 f.; CLOUT
case No. 273 [Oberlandesgericht München, Germany, 9 July 1997] (see full text of the decision).
39
40
See Rechtbank van Koophandel Ieper, 29 January 2001, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/2001-01-29.htm; CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also available on the Internet at http://
www.cisg.at/8_2200v.htm; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT
case No. 297 [Oberlandesgericht München, Germany, 21 January 1998] (see full text of the decision); Oberster Gerichtshof, Austria,
25  June 1998, Zeitschrift für Rechtsvergleichung, 2000, 77; CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September
1997]; CLOUT case No. 249 [Cour de Justice Genève, Switzerland, 10 October 1997]; Landgericht Düsseldorf, Germany, 11 October
1995, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 125 [Oberlandesgericht Hamm, Germany,
9 June 1995]; CLOUT case No. 302 [ICC Court of Arbitration, award No. 7660/KJ], see also ICC Court of Arbitration Bulletin, 1995,
69 ff. But see CLOUT case No. 482 (Cour d’appel Paris, France, 6 November 2001) (stating that the limitations period was a matter
governed by but not expressly settled in the Convention, but resolving the issue by reference to applicable domestic law).
41
See CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text of the decision).
42
Bundesgericht, Switzerland, 11 July 2000, available on the Internet at http://www.cisg.law.pace.edu/cisg/text/000711s1german.html.
43
See Oberster Gerichtshof, Austria, 24 April 1997, Zeitschrift für Rechtsvergleichung, 1997, 89  ff.
44
See CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
See CLOUT case No. 613 [ [Federal] Northern District for Illinois, USA 28 March 2002] ,also in 2002 Westlaw 655540 (Usinor
Industeel v. Leeco Steel Products, Inc.) and on the Internet at http://cisgw3.law.pace.edu/cases/020328u1.html; CLOUT case No. 269
[Bundesgerichtshof Germany, 12 February 1998].
45
46
See Landgericht München, Germany, 25 January 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/.
CLOUT Case No. 579 [[Federal] Southern District Court for New York, 10 May 2002], also in 2002 U.S. Dist. LEXIS 8411 (Geneva
Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.), and on the Internet at http://cisgw3.law.pace.edu/cases/020510u1.html; CLOUT case
No. 420 [Federal District Court, Eastern District of Pennsylvania, 29 August 2000].
47
48
Arrondissementsrechtbank Amsterdam, Netherlands, 5 October 1994, Nederlands Internationaal Privaatrecht, 1995, No. 231.
See CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision); CLOUT case No.  94
[Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, 15 June 1994]; CLOUT case No.  93
[Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, 15 June 1994] (see full text of the
decision); Hof s’Hertogenbosch, 26 February 1992, Nederlands Internationaal Privaatrecht, 1992, No. 354.
49
50
CLOUT case No. 613 [[Federal] Northern District for Illinois] also in 2002 Westlaw 655540 (Usinor Industeel v. Leeco Steel Products, Inc.) and available on the Internet at http://cisgw3.law.pace.edu/cases/020328u1.html.
For a case expressly referring to the fact that the parties are free to choose the currency, since the Convention does not deal with
the issue, see CLOUT case No. 84 [Oberlandesgericht Frankfurt am Main, Germany, 20 April 1994] (see full text of the decision).
51
See CLOUT case No. 605 [Oberster Gerichtshof, 22 October 2001], also available on the Internet at http://www.cisg.at/1_4901i.htm;
CLOUT case No. 255 [Tribunal Cantonal du Valais, Switzerland, 30 June 1998]; CLOUT case No. 251 [Handelsgericht des Kantons
Zürich, Switzerland, 30 November 1998] (see full text of the decision).
52
53
CLOUT case No. 80 [Kammergericht Berlin, Germany, 24 January 1994]; see, however, Landgericht Berlin, 24 March 1998, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=440&step=FullText, expressly stating that only a minority
view holds that the Convention deals with the issue by resorting implicitly, i.e. by referring to the currency of the place of payment of
the price.
Part one. Sphere of application and general provisions
21
Article 5
This Convention does not apply to the liability of the seller for death or personal
injury caused by the goods to any person.
Overview
1. Pursuant to this provision, the Convention does not
deal with liability for death or personal injury caused by
the goods to any person,1 regardless of whether the injured
party is the buyer or a third party. Consequently, national
law applies to those matters.
Scope of the exclusion
2. Article 5 declares that the Convention does not govern
liability for death or personal injury “to any person”.
Although this can be read to exclude a buyer’s claim
against the seller for pecuniary loss resulting from the buyer’s liability to third parties for personal injury caused by
the goods, one court has applied the Convention to such a
claim.2
3. A claim for damage to property caused by non-conforming goods is not excluded by article 5.3 Unlike some
legal systems, however, the Convention requires a buyer to
notify the seller of the lack of conformity, as specified in
article 39, in order to preserve the claim.4 Where the damage to property is not “caused by the goods”, as where the
buyer’s property is damaged by delivery of the goods, the
liability issue must be settled on the basis of applicable
domestic law.
Notes
1
See CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text of the decision).
2
See CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993] (see full text of the decision).
3
See CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995].
4
See CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995].
22
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 6
The parties may exclude the application of this Convention or, subject to article  12,
derogate from or vary the effect of any of its provisions.
Introduction
1. According to article 6 of the Convention, the parties
may exclude the Convention’s application (totally or partially) or derogate from its provisions. Thus even if the
Convention would otherwise be applicable, in order to
decide whether it applies in a particular case one must
determine whether the parties have excluded the Convention or derogated from its provisions.1 According to several
courts, opting-out requires a clear expression of intent by
the parties.2
2. By allowing the parties to exclude the Convention or
derogate from its provisions, the drafters affirmed the principle that the primary source of rules for international sales
contracts is party autonomy.3 Thus the drafters clearly
acknowledged the Convention’s non-mandatory nature4 and
the central role that party autonomy plays in international
commerce—specifically, in international sales.5
Derogation
3. Article 6 distinguishes between excluding application
of the Convention entirely and derogating from some of its
provisions. The former is not subject to any express limitations in the Convention, but the latter is. Where one party
to a contract governed by the Convention has its place of
business in a State that has made a reservation under article  96,6 the parties may not derogate from or vary the effect
of article 12. In such cases, therefore, any provision “that
allows a contract of sale or its modification or termination
by agreement or any offer, acceptance or other indication
of intention to be made in any form other than in writing
does not apply” (article 12). Otherwise, the Convention
does not expressly limit the parties’s right to derogate from
any provision of the Convention.7
4. Although the Convention does not expressly so state,
the parties cannot derogate from the public international
law provisions of the Convention (i.e. articles 89-101)
because those provisions address issues relevant to Contracting States rather than private parties. This issue, however, has not yet been addressed by case law.
Express exclusion
5. The parties can expressly exclude application of the
Convention. Express exclusions come in two varieties:
exclusion with and exclusion without indication by the
parties of the law applicable to their contract. Where the
parties expressly exclude the Convention and specify the
applicable law, which in some countries can occur in the
course of legal proceedings,8 the law applicable will be that
designated by the rules of private international law of the
forum,9 resulting (in most countries) in application of the
law chosen by the parties.10 Where the parties expressly
exclude the Convention but do not designate the applicable
law, the governing law is to be identified by means of the
private international law rules of the forum.
Implicit exclusion
6. A number of decisions have considered whether application of the Convention can be excluded implicitly. Many
courts admit the possibility of an implicit exclusion.11 Although
there is no express support for this view in the language of
the Convention, a majority of delegations were opposed to a
proposal advanced during the diplomatic conference which
would have permitted total or partial exclusion of the Convention only if done “expressly”.12 An express reference to the
possibility of an implicit exclusion was eliminated from the
text of the Convention merely “lest the special reference to
‘implied’ exclusion might encourage courts to conclude, on
insufficient grounds, that the Convention had been wholly
excluded”.13 According to some court decisions14 and an arbitral award,15 however, the Convention cannot be excluded
implicitly, based on the fact that the Convention does not
expressly provide for that possibility.
7. A variety of ways in which the parties can implicitly
exclude the Convention—for example, by choosing the
law16 of a Non-contracting State as the law applicable to
their contract17—have been recognized.
8. More difficult problems are posed if the parties choose
the law of a Contracting State to govern their contract. An
arbitral award18 and several court decisions19 suggest that
such a choice amounts to an implicit exclusion of the Convention, because otherwise the choice would have no practical meaning. Most court decisions20 and arbitral awards,21
however, take a different view. They reason that the Convention is the law for international sales in the Contracting
State whose law the parties chose; and that the parties’
choice remains meaningful because it identifies the national
law to be used for filling gaps in the Convention.22 According to this line of decisions, the choice of the law of a
Contracting State, if made without particular reference to
the domestic law of that State, does not exclude the Convention’s applicability. Of course, if the parties clearly
chose the domestic law of a Contracting State, the Convention must be deemed excluded.23
Part one. Sphere of application and general provisions
23
9. The choice of a forum may also lead to the implicit
exclusion of the Convention’s applicability. Where there
was evidence that the parties wanted to apply the law of
the chosen forum and that forum was located in a Contracting State, however, two arbitral tribunals have applied the
Convention.24
11. According to one court decision, the fact that the parties incorporated an Incoterm into their agreement does not
constitute an implicit exclusion of the Convention.30
10. The question has arisen whether the Convention’s
application is excluded if the parties litigate a dispute solely
on the basis of domestic law, despite the fact that all
requirements for applying the Convention are satisfied. In
those jurisdictions where a judge must apply the correct
law even if the parties have relied on law that does not
apply in the case (jura novit curia), the mere fact that the
parties based their arguments on domestic law has not by
itself lead to the exclusion of the Convention.25 Another
court has found that, if the parties are not aware of the
Convention’s applicability and argue on the basis of a
domestic law merely because they wrongly believe that law
applies, judges should apply the Convention.26 In one country which does not recognize the principle of jura novit
curia, a court has applied domestic sales law where the
parties argued their case under that law.27 This approach
has also been adopted by a court28 and an arbitral tribunal29
sitting in countries that acknowledge the principle jura
novit curia.
12. Although the Convention expressly empowers the parties to exclude its application in whole or in part, it does
not declare whether the parties may designate the Convention as the law governing their contract when it would not
otherwise apply. This issue was expressly addressed in the
1964 Hague Convention relating to a Uniform Law on the
Formation of Contracts for the International Sale of Goods,
which contained a provision, article 4, that gave the parties
the power to “opt in”. The fact that the Convention contains
no comparable provision does not necessarily mean that
the parties are prohibited from “opting in”. A proposal by
the former German Democratic Republic during the diplomatic conference31 that the Convention should apply even
where the preconditions for its application were not met,
provided the parties wanted it to be applicable, was rejected;
it was noted during the discussions, however, that the proposed text was unnecessary in that the principle of party
autonomy was sufficient to allow the parties to “opt in” to
the Convention.
Opting-in
Notes
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 338 [Oberlandesgericht Hamm, Germany,
23 June 1998]; CLOUT case No. 223 [Cour d’appel Paris, France, 15 October 1997] (see full text of the decision); CLOUT case No. 230
[Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision); CLOUT case No. 190 [Oberster Gerichtshof,
Austria, 11 February 1997] (see full text of the decision); CLOUT case No. 311 [Oberlandesgericht Köln, Germany, 8 January 1997]
(see full text of the decision); CLOUT case No. 211 [Tribunal Cantonal Vaud, Switzerland, 11 March 1996] (see full text of the decision); CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (see full text of the decision); CLOUT case No. 106
[Oberster Gerichtshof, Austria, 10 November 1994] (see full text of the decision); CLOUT case No. 199 [Tribunal Cantonal Valais,
Switzerland, 29 June 1994] (see full text of the decision); CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November
1992] (see full text of the decision).
1
2
CLOUT case No. 433 [[Federal] Northern District Court of California, 27 July 2001], Federal Supplement (2nd Series) vol. 164, p.  1142
(Asante Technologies v. PMC-Sierra), also available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/010727u1.html;
Tribunal de Commerce Namur, Belgium, 15 January 2002, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/
2002-01-15.htm.
3
For a reference to this principle, see CLOUT case No. 229 [Bundesgerichtshof, Germany, 4  December 1996] (see full text of the
decision).
4
For an express reference to the Convention’s non-mandatory nature, see CLOUT case No. 647 [Cassazione civile, Italy, 19 June
2000], also in Giurisprudenza italiana, 2001, 236; see CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also in
Internationales Handelsrecht, 2001, 41; CLOUT case No. 240 [Oberster Gerichtshof, Austria, 15 October 1998] (see full text of the
decision); Handelsgericht Wien, 4 March 1997, unpublished; CLOUT case No. 199 [KG Wallis, 29 June 1994], also in Zeitschrift für
Walliser Rechtsprechung, 1994, 126.
5
CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also in Internationales Handelsrecht, 2001, 32.
See article 96: “A Contracting State whose legislation requires contracts of sale to be concluded in or evidenced by writing may at
any time make a declaration in accordance with article 12 that any provision of article 11, article 29, or Part II of this Convention, that
allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention to be
made in any form other than in writing, does not apply where any party has his place of business in that State.”
6
7
For example, a court has stated that article 55, relating to open-price contracts, is only applicable where the parties have not agreed
to the contrary (CLOUT case No. 151 [Cour d’appel, Grenoble, France, 26 February 1995]), while another court observed that article  39,
relating to the notice requirement, is not mandatory and can be derogated from (Landgericht Gießen, Germany, 5 July 1994, Neue
Juristische Wochenschrift Rechtsprechungs-Report, 1995, 438). Similarly, the Austrian Supreme Court has concluded that article 57 also
can be derogated from (CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994]).
This is true for instance in Germany, as pointed out in case law; see, for example, CLOUT case No. 122 [Oberlandesgericht Köln,
Germany, 26 August 1994]; CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993] (see full text of the
decision); this is also true in Switzerland, see CLOUT case No. 331 [Handelsgericht Kanton Zürich, 10 February 1999], also in
Schweizerische Zeitschrift für Internationales und Europäisches Recht, 2000, 111.
8
24
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
9
See CLOUT case No. 231 [Bundesgerichtshof, Germany, 23 July 1997] (see full text of the decision); Oberlandesgericht Frankfurt,
Germany, 15 March 1996, Neue Juristische Wochenschrift Rechtsprechungs-Report, 1997, 170 ff.
Where the rules of private international law of the forum are those laid down either in the 1955 Hague Convention on the Law
Applicable to International Sales of Goods Convention, 510 U.N.T.S. 149, in the 1980 Rome Convention on the Law Applicable to
Contractual Obligations (United Nations, Treaty Series, vol. 1605, No. 28023), or in the 1994 Inter-American Convention on the Law
Applicable to Contractual Obligations (Organization of American States Fifth Inter-American Specialized Conference on Private International Law: Inter-American Convention on the Law Applicable to International Contracts, March 17, 1994, OEA/Ser.K/XXI.5, CIDIPV/doc.34/94 rev. 3 corr. 2, March 17, 1994, available on the Internet at http://www.oas.org/juridico/english/Treaties/b-56.html), the law
chosen by the parties will govern.
10
11
See CLOUT case No. 605 [Oberster Gerichtshof, Austria, 22 October 2001], also available on the Internet at http://www.cisg.at/
1_7701g.htm; Cour de Cassation, France, 26 June 2001, available on the Internet at http://witz.jura.uni-sb.de/CISG/decisions/2606012v.
htm; CLOUT case No. 483 [Audiencia Provincial de Alicante, Spain, 16 November 2000]; CLOUT case No. 378 [Tribunale di Vigevano,
Italy, 12 July 2000]; Oberlandesgericht Dresden, Germany, 27  December 1999, available on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/urteile/text/511.htm; CLOUT case No. 273 [Oberlandesgericht München, Germany, 9 July 1997] (see full text of the decision); Landgericht München, Germany, 29 May 1995, Neue Juristische Wochenschrift, 1996, 401 f.; CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995] (see full text of the decision).
12
Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No. E.81.IV.3), 85‑86.
13
Ibid., 17.
See Landgericht Landshut, Germany, 5 April 1995, available on the Internet at: http://www.jura.uni-freiburg.de/iprl/Convention/;
[Federal] Court of International Trade, United States, 24 October 1989, 726 Fed. Supp. 1344 (Orbisphere Corp. v. United States), available on the Internet at: http://cisgw3.law.pace.edu/cases/891024u1.html.
14
15
See CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and
Industry, Russian Federation, award in case No. 54/1999 of 24 January 2000], also referred to on the Internet at http://www.cisg.law.
pace.edu/cisg/wais/db/cases2/000124r1.html.
16
Whether such a choice is to be acknowledged at all depends on the rules of private international law of the forum.
See CLOUT case No. 483 [Audiencia Provincial de Alicante, Spain, 16 November 2000] (the parties implicitly excluded application
of the Convention by providing that their contract should be interpreted in accordance with the law of a Non-contracting State and by
submitting their petitions, statements of defence, and counterclaims in accordance with the domestic law of the forum (a Contracting
State)); CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993] (see full text of the decision).
17
18
See CLOUT case No. 92 [Arbitration—Ad hoc tribunal, 19 April 1994].
See Cour d’Appel Colmar, France, 26 September 1995, available on the Internet at: http://witz.jura.uni-sb.de/cisg/decisions/260995.
htm; CLOUT case No. 326 [Kantonsgericht des Kantons Zug, Switzerland, 16 March 1995]; CLOUT case No. 54 [Tribunale Civile de
Monza, Italy, 14 January 1993].
19
20
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002 (see full text of the decision approving lower appeals court
reasoning); Hof van Beroep Gent, 15 May 2002, available on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-05-15.html;
CLOUT case No. 482 [Cour d’appel Paris, France, 21 November 2001]; CLOUT case No. 631 [Supreme Court of Queensland, Australia,
17 November 2000]; CLOUT case No. 429 [Oberlandesgericht Frankfurt, 30 August 2000], also available on the Internet at http://cisgw3.
law.pace.edu/cisg/text/000830g1german.html; CLOUT case No. 630 [Court of Arbitration of the International Chamber of Commerce,
Zurich, Switzerland, July 1999] (see full text of the decision); CLOUT case No. 270 [Bundesgerichtshof, Germany, 25  November 1998];
CLOUT case No. 297 [Oberlandesgericht München, Germany, 21 January 1998] (see full text of the decision); CLOUT case No. 220
[Kantonsgericht Nidwalden, Switzerland, 3 December 1997]; CLOUT case No. 236 [Bundesgerichtshof, Germany, 23 July 1997]; CLOUT
case No. 287 [Oberlandesgericht München, Germany, 9 July 1997]; CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany,
25 June 1997] (see full text of the decision); CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997]
(see full text of the decision); CLOUT case No. 206 [Cour de Cassation, France, 17 December 1996] (see full text of the decision);
CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996], also in Neue Juristische Wochenschrift Rechtsprechungs-Report,
1996, 1146 f.; CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9 June 1995]; Rechtbank s’Gravenhage, the Netherlands,
7 June 1995, Nederlands Internationaal Privaatrecht, 1995, No.  524; CLOUT case No. 167 [Oberlandesgericht München, Germany,
8 February 1995] (see full text of the decision); CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994]; CLOUT
case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993]; CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany,
8 January 1993].
21
See ICC Court of Arbitration, award No. 9187, available on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=46
6&step=FullText; CLOUT case No.  166 [Arbitration—Schiedsgericht der Handelskammer Hamburg, 21 March, 21 June 1996]; Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary, 17  November 1995, Unilex; ICC Court of Arbitration, France, award No. 8324, Journal du droit international, 1996, 1019 ff.; ICC Court of Arbitration, France, award No. 7844, Unilex;
CLOUT case No. 302 [ICC Court of Arbitration, France, award No. 7660[also inUnilex; CLOUT case No. 300 [ICC Court of Arbitration, France, award No. 7565], Journal du droit international, 1995, 1015 ff.; CLOUT case No. 103 [Arbitration—International Chamber
of Commerce no. 6653 1993]; CLOUT case No. 93 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen
Wirtschaft—Wien, 15 June 1994].
22
CLOUT case No. 575 [B.P. Petroleum International Ltd. v. Empresa Estatal Petroleos de Ecuador (Petroecuador), 02‑20166, United
States Court Of Appeals For The Fifth Circuit, 2003] U.S. App. LEXIS 12013, June 11, 2003.
23
CLOUT case No. 429 [Oberlandesgericht Frankfurt, Germany, 30 August 2000], also available on the Internet at http://cisgw3.law.
pace.edu/cisg/text/000830g1german.html; Oberlandesgericht Frankfurt, Germany, 15 March 1996, available on the Internet at http://www.
jura.uni-freiburg.de/ipr1/cisg/urteile/text/284.htm.
Part one. Sphere of application and general provisions
25
24
CLOUT case No. 293 [Schiedsgericht der Hamburger freundlichen Arbitrage, Germany, 29 December 1998] also in Internationales
Handelsrecht, 2001, 36-37; CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg, 21 March, 21 June 1996]
(see full text of the decision).
25
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 125 [Oberlandesgericht Hamm, Germany,
9 June 1995]; Landgericht Landshut, Germany, 5 April 1995, Unilex.
26
See CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995] (see full text of the decision).
27
[Oregon Court of Appeals, United States], 12 April 1995, 133 Or. App. 633 (GPL Treatment Ltd. v. Louisiana-Pacific Group).
28
Cour de Cassation, France, 26 June 2001, available on the Internet at http://witz.jura.uni-sb.de/CISG/decisions/2606012v.htm.
29
ICC Court of Arbitration, award No. 8453, ICC Court of Arbitration Bulletin, 2000, 55.
CLOUT case No. 605 [Oberster Gerichtshof, Austria, 22 October 2001], also available on the Internet at http://www.cisg.at/1_7701g.
htm.
30
31
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No. E.81.IV.3), 86, 252-253.
Part one. Sphere of application and general provisions
27
Chapter II (articles 7-13)
General provisions
Overview
1. Chapter II of Part I of the CISG contains provisions
addressed to general issues under the Convention. Two of
those provisions focus on interpretation: article 7 deals with
interpretation of the Convention and article 8 speaks to
interpretation of the parties’ statements and conduct. Article 9 addresses the parties’ legal obligations arising from
usages and practices established between them. Two other
provisions in Chapter II are terminological, focusing on
issues concerning the meaning of “place of business” (article 10) and “writing” (article 13).
2. The two remaining provisions of Chapter II deal with
the Convention’s informality principle: article 11 provides
that the Convention does not require a writing or impose
other formal requirements on contracts within its scope,
and article 12 states limitations on that principle.
28
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 7
1. In the interpretation of this Convention, regard is to be had to its international
character and to the need to promote uniformity in its application and the observance
of good faith in international trade.
2. Questions concerning matters governed by this Convention which are not
expressly settled in it are to be settled in conformity with the general principles on
which it is based or, in the absence of such principles, in conformity with the law
applicable by virtue of the rules of private international law.
Overview
1A. Article 7 is divided into two subparts: article 7 (1)
specifies several considerations to be taken into account in
interpreting the Convention; article 7 (2) describes the
methodology for dealing with the Convention’s “gaps”—
i.e., “matters governed by this Convention which are not
expressly settled in it”.
decisions and arbitral awards.9 Two decisions have each
cited two foreign cases,10 and several cases have cited a
single foreign decision.11 More recently, a court referred to
37  foreign court decisions and arbitral awards.12
4. Two courts have stated that foreign court decisions
have merely persuasive, non‑binding authority.13
Interpretation of the Convention
in general
Observance of good faith
in international trade
1. Because national rules on sales diverge sharply in conception and approach, in interpreting the Convention it is
important for a forum to avoid being influenced by its own
domestic sales law.1 Article 7, paragraph 1 therefore provides that, in the interpretation of the Convention, “regard
is to be had to its international character and to the need
to promote uniformity in its application”.
5. Article 7 (1) also requires that the Convention be interpreted in a manner that promotes the observance of good
faith in international trade.14 It has been held that requiring
notice of avoidance where a seller has “unambiguously and
definitely” declared that it will not perform its obligations
would be contrary to this mandate.15 Although good faith
is expressly referred to only in article 7 (1), relating to the
Convention’s interpretation, there are numerous rules in the
Convention that reflect the good faith principle. The following provisions are among those that manifest the
principle:
The Convention’s international
character
2. According to a number of courts, article 7 (1)’s reference to the Convention’s international character2 forbids
fora from interpreting the Convention on the basis of
national law;3 instead, courts must interpret the Convention
“autonomously”.4 Nevertheless, some courts have stated
that case law interpreting domestic sales law, although “not
per se applicable,” may inform a court’s approach to the
Convention where the language of the relevant articles of
the Convention tracks that of the domestic law.5 According
to case law, reference to the Convention’s legislative
history,6 as well as to international scholarly writing, is
admissible in interpreting the treaty.7
Promoting uniform application
3. The mandate imposed by article 7 (1) to regard the
need to promote uniform application of the Convention has
been construed to require fora interpreting the CISG to take
into account foreign decisions that have applied the
Convention.8 In one case, a court cited 40 foreign court
• A
rticle 16 (2) (b), which makes an offer irrevocable if
it was reasonable for the offeree to rely upon the offer
being held open and the offeree has acted in reliance
on the offer;
• Article 21 (2), which deals with a late acceptance that
was sent in such circumstances that, had its transmission
been normal, it would have reached the offeror in due
time;
• Article 29 (2), which in certain circumstances precludes
a party from invoking a contractual provision that
requires modifications or terminations of the contract to
be in writing;
• Articles 37 and 46, on the right of a seller to cure nonconformities in the goods;
• Article 40, which precludes a seller from relying on the
buyer’s failure to give notice of non-conformity in
accordance with articles 38 and 39 if the lack of conformity relates to facts of which the seller knew or could
not have been unaware and which he did not disclose
to the buyer;
Part one. Sphere of application and general provisions
• A
rticle 47 (2), article 64 (2), and article 82, on the loss
of the right to declare the contract avoided;
• Articles 85 to 88, which impose on the parties obligations to preserve the goods.16
29
6. Under article 7 (2), gaps in the Convention—i.e. questions the Convention governs but for which it does not
expressly provide answers—are filled, if possible, without
resorting to domestic law, but rather in conformity with the
Convention’s general principles. Only where no such general
principles can be identified does article 7 (2) permit reference
to the applicable national law.17 Matters the Convention does
not govern at all are resolved by direct recourse to applicable
national law.18 Issues beyond the Convention’s scope are discussed in the Digest for article 4.
goods, one court stated that “if the purchase price is payable at the place of business of the seller”, as provided by
article 57 of the Convention, then “this indicates a general
principle valid for other monetary claims as well”.26 In an
action for restitution of excess payments made to a seller,
a court stated that there was a general principle that “payment is to be made at the creditor’s domicile, a principle
that is to be extended to other international trade contracts
under article 6.1.6 of the UNIDROIT Principles”.27 The
Supreme Court of another State, which had previously
adopted the reverse position, discovered a general principle
of the Convention under which, upon avoidance of a contract, “the place for performance of restitution obligations
should be determined by transposing the primary obligations—through a mirror effect—into restitution obligations”.28 One decision, however, denies the existence of a
Convention general principle for determining the place for
performance of all monetary obligations.29
General principles of the Convention
Currency of payment
Party autonomy
12. One court has observed that the question of the currency of payment is governed by, although not expressly
settled in, the Convention.30 According to one view, the
court noted, a general principle underlying the CISG is
that, except where the parties have agreed otherwise, the
seller’s place of business controls all questions relating to
payment, including the question of currency. However, the
court also noted the view that there was no pertinent Convention general principle, and thus that applicable domestic
law governed the matter. The Court did not choose which
alternative was the correct approach because, on the facts
of the case, each led to the same the result (payment was
due in the currency of the seller’s place of business).
Gap-filling
7. According to several courts, one of the general principles
upon which the Convention is based is party autonomy.19
Good faith
8. Good faith has also been found to be a general principle of the Convention.20 That general principle has led a
court to state that a buyer need not explicitly declare a
contract avoided if the seller has refused to perform its
obligations, and that to insist on an explicit declaration in
such circumstance would violate the principle of good faith,
even though the Convention expressly requires a declaration of avoidance.21 In another case, a court required a party
to pay damages because the party’s conduct was “contrary
to the principle of good faith in international trade laid
down in article 7 CISG”; the court also stated that abuse
of process violates the good faith principle.22
9. A more recent court decision stated that the general
principle of good faith requires the parties to cooperate
with each other and to exchange information relevant for
the performance of their respective obligations.23
Estoppel
10. According to some decisions, estoppel is also one of
the general principles upon which the Convention is
based—specifically, a manifestation of the principle of
good faith.24 According to one court, however, the Convention is not concerned with estoppel.25
Place of payment of monetary obligations
11. A significant number of decisions hold that the Convention includes a general principle relating to the place
of performance of monetary obligations. Thus in determining the place for paying compensation for non-conforming
Burden of proof
13. According to some decisions,31 the question of which
party bears the burden of proof is a matter governed by,
albeit not explicitly settled in, the Convention. The issue
is therefore to be settled in conformity with the general
principles on which the Convention is based, provided pertinent general principles underlie the Convention.32 According to various decisions, article 79 (1)33 and (according to
one court decision) article 2 (a) evidence such general principles, which have been summarized as follows: a party
attempting to derive beneficial legal consequences from a
provision has the burden of proving the existence of the
factual prerequisites required to invoke the provision;34 a
party claiming an exception has to prove the factual prerequisites of that exception.35 According to some courts,
however, burden of proof is a matter not governed by the
Convention, and is instead left to domestic law.36
Full compensation
14. According to some decisions the Convention is also
based upon a principle of full compensation for losses in
the event of breach.37 One court restricted this general principle to cases in which, as a result of a breach, a contract
is avoided.38
30
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Informality
15. Several tribunals have stated that the principle of
informality, evidenced in article 11, constitutes a general
principle upon which the Convention is based;39 from this
principle it follows, inter alia, that the parties are free to
modify or terminate their contract orally, in writing, or in
any other form. An implied termination of the contract has
been held possible,40 and it has been held that a written
contract may be modified orally.41
Dispatch of communications
16. The dispatch rule in article 27 applies to communications between the parties after they have concluded a
contract. Under this rule, a notice, request or other communication becomes effective as soon as the declaring party
releases it from its own sphere of control using an appropriate means of communication. This rule applies to a
notice of non‑conformity or of third-party claims (arts. 39,
43); to demands for specific performance (art. 46), price
reduction (art. 50), damages (art. 45, para. 1 (b)) or interest
(art. 78); to a declaration of avoidance (arts. 49, 64, 72,
73); to a notice fixing an additional period for performance
(arts. 47, 63); and to other notices provided for in the
Convention, such as those described in article  32 (1), article  67  (2), and article 88. Case law states that the dispatch
principle is a general principle underlying Part III of the
Convention, and thus also applies to any other communication the parties may have provided for in their contract
unless they have agreed that the communication must be
received to be effective.42
Mitigation of damages
17. Article 77 contains a rule under which a damage
award can be reduced by the amount of losses that the
aggrieved party could have mitigated by taking measures
that were reasonable in the circumstances. The mitigation
of damages principle has also been considered a general
principle upon which the Convention is based.43
proceeds) to be offset.45 According to other courts, however,
the issue of set-off is not governed of the Convention.46
Right to interest
20. An arbitral tribunal has stated that entitlement to interest on all sums in arrears (see article 78) also constitutes
a general principle of the Convention.47 According to some
tribunals, the Convention is based upon a general principle
under which entitlement to interest does not require a formal notice to the debtor in default.48 Other decisions, however, state that interest on sums in arrears is due only if a
formal notice has been given to the debtor.49
Favor contractus
21. Commentators have also suggested that the Convention is based upon the favor contractus principle, pursuant
to which one should adopt approaches that favor finding
that a contract continues to bind the parties rather than that
it has been avoided. This view appears to have been adopted
by two courts: one court expressly referred to the principle
of favor contractus;50 the other merely stated that avoidance
of the contract constitutes an “ultima ratio” remedy.51
22. Several decisions have identified article 40 as embodying a general principle of the Convention applicable to resolve
unsettled issues under the Convention.52 According to an arbitration panel, “Article 40 is an expression of the principles of
fair trading that underlie also many other provisions of the
Convention, and it is by its very nature a codification of a
general principle”.53 Thus, the decision asserted, even if article  40 did not apply directly where goods failed to conform
to a contractual warranty clause, the general principle underlying article 40 would be indirectly applicable to the situation
by way of article 7 (2). In another decision, a court derived
from article 40 a general principle that even a very negligent
buyer deserves more protection than a fraudulent seller; it then
applied the principle to hold that a seller that had misrepresented the age and mileage of a car could not escape liability
under article 35 (3)54 even if the buyer could not have been
unaware of the lack of conformity at the time of the conclusion of the contract.55
Binding usages
18. Another general principle, recognized by case law, is
that informing article 9 (2), under which the parties are
bound, unless otherwise agreed, by a usage of which they
knew or ought to have known and which in international
trade is widely known to, and regularly observed by, parties
to contracts of the type involved in the particular trade
concerned.44
Set-off
19. One court has suggested that the issue of set-off is governed by, although not expressly settled in, the Convention;
and that the Convention contains a general principle within
the meaning of article 7 (2) that permitts reciprocal claims
arising under the Convention (in the case, the buyer’s claims
for damages and the seller’s claim for the balance of the sale
UNIDROIT Principles and Principles of
European Contract Law
23. One arbitral tribunal,56 in deciding the rate of interest
to apply to payment of sums in arrears, applied the rate
specified in both article 7.4.9 of the UNIDROIT Principles
of International Commercial Contracts and in article 4.507
of the Principles of European Contract Law, arguing that
such rules had to be considered general principles on which
the Convention is based. [here] In other cases,57 arbitral
tribunals referred to the UNIDROIT Principles of International Commercial Contracts to corroborate results under
rules of the Convention; one court also referred to the UNIDROIT Principles of International Commercial Contracts
in support of a solution reached on the basis of the Convention.58 According to another court, the UNIDROIT Principles can help determine the precise meaning of general
principles upon which the CISG is based.59
Part one. Sphere of application and general provisions
31
Notes
1
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10  March-11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, p. 17.
2
For references in case law to the need to take the Convention’s international character into account in the interpretation of the Convention, see CLOUT case No. 418 [Federal District Court, Eastern District of Louisiana, United States, 17 May 1999] (see full text of
the decision); CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1995] (see full text
of the decision); CLOUT case No. 84 [Oberlandesgericht Frankfurt am Main, Germany, 20 April 1994] (see full text of the decision);
CLOUT case No. 201 [Richteramt Laufen des Kantons Berne, Switzerland, 7 May 1993] (see full text of the decision).
See CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29  June 1998] (see full text of the
decision); CLOUT case No. 413 [Federal District Court, Southern District of New York, United States, 6 April 1998] (see full text of
the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision); CLOUT case
No. 171 [Bundesgerichtshof, Germany, 3 April 1996] (see full text of the decision); CLOUT case No. 201 [Richteramt Laufen des
Kantons Berne, Switzerland, 7  May 1993] (see full text of the decision).
3
4
CLOUT case No. 333 [Handelsgericht des Kantons Aargau, Switzerland, 11 June 1999]; CLOUT case No. 271 [Bundesgerichtshof,
Germany, 24 March 1999] (see full text of the decision); CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland,
26  September 1997] (see full text of the decision).
CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1995] (see full text of the decision); for a more recent case stating the same, see CLOUT Case No. 580 [[Federal] Court of Appeals (4th Circuit), 21 June 2002], 2002
U.S. App. LEXIS 12336 (Schmitz-Werke GmbH & Co. v. Rockland Industries, Inc.; Rockland International FSC, Inc.).
5
6
See Landgericht Aachen, Germany, 20 July 1995, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/ (referring to
the legislative history of article 78); CLOUT case No. 84 [Oberlandesgericht Frankfurt am Main, Germany, 20 April 1994] (see full text
of the decision).
CLOUT case No. 426 [Oberster Gerichtshof, Austria, 13 April 2000], also published on the Internet at http://www.cisg.at/2_10000w.
htm.
7
8
See, for example, Audiencia Provincial de Valencia, Spain, 7 June 2003.
9
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000].
See Rechtbank Koophandel Hasselt, 2 December 1998, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/1998-12-02.htm; Trib. Cuneo, 31 January 1996, UNILEX.
10
See CLOUT case No. 613 [[Federal] Northern District Court for Illinois, 28 March 2002],also in 2002 Westlaw 655540 (Usinor
Industeel, v. Leeco Steel Products, Inc.), and published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=746&
step=FullText; Rechtbank Koophandel Hasselt, 6 March 2002, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/2002-03-06s.htm; CLOUT case No. 631 [Supreme Court of Queensland, Australia, 17 November 2000] (see full text of the decision); CLOUT case No. 426 [Oberster Gerichtshof, Austria, 13 April 2000], also published on the Internet at http://www.cisg.at/
2_10000w.htm; CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December 1999] (see full text of the decision); CLOUT case No.  205
[Cour d’appel Grenoble, France, 23 October 1996] (see full text of the decision).
11
12
CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002], in Giurisprudenza italiana, 2003, 896 ff.
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December
1999]. See also CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza italiana, 2003, 896 ff.
13
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10  March-11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, p. 18.
14
15
CLOUT case No. 595 [Oberlandesgericht München, Germany, 15 September 2004].
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records, Documents
of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, p.  18.
16
17
See ICC International Court of Arbitration, Award No. 8611/HV/JK, published on the Internet at http://www.jura.uni-freiburg.de/
ipr1/cisg/.
18
See, e.g., CLOUT case No. 482 [Cour d’appel Paris, 6 November 2001], also published on the Internet at http://witz.jura.uni-sb.de/
CISG/decisions/061101v.htm, expressly referring to article 7 of the Convention when stating that issues not governed by the Convention
have to be solved by means of the applicable law; for a similar statement, see also Camara Nacional de Apelaciones en lo Comercial,
Argentina, 24 April 2000, published on the Internet at http://www.uc3m.es/uc3m/dpto/PR/dppr03/cisg/sargen10.htm (stating the same);
CLOUT case No. 333 [Handelsgericht des Kantons Aargau, Switzerland, 11 June 1999]; Rechtbank Zutphen, Netherlands, 29 May 1997,
published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=353&step=FullText (stating the same); Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation, award in case No.
38/1996 of 28 March 1997, published in English on the Internet at http://cisgw3.law.pace.edu/cases/970328r1.html; Amtsgericht Mayen,
Germany, 6 September 1995, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/382.htm (stating the same);
CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993] (stating the same) (see full text of the
decision).
See Hof Beroep Gent, Belgium, 15 May, 2002, published on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-05-15.html;
Rechtbank Koophandel Ieper, Belgium, 29 January 2001, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2001-01-29.
htm; CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also in Internationales Handelsrecht, 2001, 32; see also CLOUT
case No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza italiana, 2003, 896 ff.
19
See Hof Beroep Gent, Belgium, 15 May 2002, published on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-05-15.
html; Bundesgerichtshof, Germany, 9 January 2002, Internationales Handelsrecht, 2002, 17; CLOUT case 445 [Bundesgerichtshof,
20
32
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Germany, 31 October 2001], also in Internationales Handelsrecht, 2002, 14 ff.; CLOUT case No. 297 [Oberlandesgericht München,
Germany, 21 January 1998] (see full text of the decision); CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland,
30  November 1998] (see full text of the decision); CLOUT case No. 645 [Corte d’Appello Milano, Italy, 11 December 1998], also
published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=359&step=FullText; Compromex Arbitration, Mexico,
30 November 1998, published on the Internet at http://www.uc3m.es/cisg/rmexi3.htm; CLOUT case No. 277 [Oberlandesgericht Hamburg,
Germany, 28 February 1997]; Rechtbank Arnhem, 17 July 1997, published on the Internet at http://www.unilex.info/case.cfm?pid=1&d
o=case&id=355&step=FullText; Landgericht München, Germany, 6 May 1997, published on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/urteile/text/341.htm (stating the same); CLOUT case No. 337 [Landgericht Saarbrücken, Germany, 26  March 1996]; CLOUT
case No. 166 [Arbitration - Schiedsgericht der Handelskammer Hamburg, 21 March, 21 June 1996] (see full text of the decision); CLOUT
case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995] (see full text of the decision); ICC International Court of Arbitration,
Award No. 8128/1995, Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, award No. VB/94124, published
on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=217&step=FullText; CLOUT case No.  154 [Cour d’appel Grenoble, France, 22 February 1995]; Renard Constructions v. Minister for Public Works, Court of Appeal, New South Wales, Australia,
12 March 1992, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=57&step= FullText.
21
See CLOUT case No. 277 [Oberlandesgericht Hamburg, Germany, 28 February 1997].
22
CLOUT case No. 154 [Cour d’appel Grenoble, France, 22 February 1995].
23
CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Internationales Handelsrecht, 2002, 14 ff.
See Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation, award in case No. 302/1996 of 27  July 1999, published in English on the Internet at http://cisgw3.law.pace.edu/cases/990727r1.
html; CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision); CLOUT case No.  94
[Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien, 15 June 1994]; CLOUT case No. 93
[Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien, 15 June 1994] (see full text of the
decision); Hof s’Hertogenbosch, Netherlands, 26 February 1992, Nederlands Internationaal Privaatrecht, 1992, No. 354.
24
25
Rechtbank Amsterdam, Netherlands, 5 October 1994, Nederlands Internationaal Privaatrecht, 1995, No. 231.
26
CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany 2 July 1993].
27
Cour d’appel Grenoble, 23 October 1993, Revue critique de droit international privé, 1997, 756.
28
Oberster Gerichtshof, Austria, 29 June 1999, Transportrecht-Internationales Handelsrecht, 1999, 48.
29
CLOUT case No. 312 [Cour d’appel Paris, France, 14 January 1998].
Landgericht Berlin, Germany, 24 March 1998, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
440&step=FullText.
30
31
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 380 [Tribunale di Pavia, Italy, 29 December
1999]; CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text of the decision); CLOUT
case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993].
32
See CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993].
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; Bundesgerichtshof, Germany, 9 January 2002, Unilex; CLOUT
case No. 380 [Tribunale di Pavia, Italy, 29 December 1999].
33
34
For references to this principle, see CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; Landgericht Frankfurt, 6  July
1994, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria,
1 July 1994] (see full text of the decision).
35
See CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000].
See CLOUT case No. 261 [Berzirksgericht der Sanne, Switzerland, 20 February 1997]; CLOUT case No. 103 [Arbitration-International
Chamber of Commerce no. 6653 1993]; in one case, a state court referred to the problem of whether the Convention is based upon a
particular general principle in respect of the issue of burden of proof or whether the issue is one not governed by the Convention, but
left the issue open; see CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998].
36
CLOUT case No. 424 [Oberster Gerichtshof, Austria, 9 March 2000], also published on the Internet at http://www.cisg.at/6_31199z.
htm; CLOUT cases Nos. 93 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien,
15 June 1994] and 94 [Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien, 15 June 1994].
37
38
CLOUT case No. 424 [Oberster Gerichtshof, Austria, 9 March 2000], also published on the Internet at http://www.cisg.at/6_31199z.
htm.
See Compromex Arbitration, Mexico, 29 April 1996, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&
id=258&step=FullText and http://www.uc3m.es/cisg/rmexi2.htm.
39
40
Oberster Gerichtshof, Austria, 29 June 1999, Zeitschrift für Rechtsvergleichung, 2000, 33.
41
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
Landgericht Stuttgart, Germany, 13 August 1991, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/33.
htm (according to the contract the notice of non-conformity had to be by registered letter. The court held that that meant that the notice
had to be received by the other party. Moreover, the declaring party had also to prove that the notice had been received by the other
party). See also CLOUT case No. 305 [Oberster Gerichtshof, Austria, 30 June 1998].
42
43
Landgericht Zwickau, 19 March 1999, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/519.htm; ICC
Court of Arbitration, award No. 8817, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=398&step=
FullText; see also CLOUT case No. 608 [Trib. Rimini, Italy, 26 November 2002], also in Giurisprudenza italiana, 2003, 896 ff.
Part one. Sphere of application and general provisions
33
44
Rechtbank Koophandel Ieper, Belgium, 29 January 2001, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/2001-01-29.htm.
45
CLOUT case No. 348 [Oberlandesgericht Hamburg, Germany, 26 November 1999].
See CLOUT case No. 605 [Oberster Gerichtshof, 22 October 2001], also in Internationales Handelsrecht, 2002, 27; CLOUT case
No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000], in Internationales Handelsrecht, 2001, 114 f.; CLOUT case No. 232 [Oberlandesgericht München, Germany,
11  March 1998]; CLOUT case No. 259 [Kantonsgericht Freiburg, Switzerland, 23 January 1998]; Landgericht Hagen, Germany,
15 October 1997, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; Landgericht München, Germany, 6 May 1997,
available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/341.htm; CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997] (see full text of the decision); CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July
1996] (see full text of the decision); Landgericht Duisburg, Germany, 17 April 1996, available on the Internet at http://www.jura.unifreiburg.de/ipr1/cisg/; CLOUT case No. 289 [Oberlandesgericht Stuttgart, Germany, 21 August 1995]; Landgericht München, Germany,
20 March 1995, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/164.htm; Rechtbank Middelburg, Netherlands, 25 January 1995, Nederlands Internationaal Privaatrecht, 1996, No.  127; Amtsgericht Mayen, Germany, 19 September 1994,
available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/; CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany,
17 September 1993]; CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9  June 1995]; Rechtbank Roermond, Netherlands, 6
May 1993, Unilex; CLOUT case No. 99 [Rechtbank Arnhem, Netherlands, 25 February 1993].
46
47
ICC Court of Arbitration, award No. 8908, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
401&step=FullText.
48
CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997] (see full text of the decision); CLOUT
case No. 80 [Kammergericht Berlin, Germany, 24  January 1994] (see full text of the decision); CLOUT case No. 56 [Canton of Ticino
Pretore di Locarno Campagna, Switzerland, 27 April 1992] (see full text of the decision).
49
Arbitral Tribunal at the Bulgarian Chamber of Commerce and Industry, award No. 11/1996, published on the Internet at http://www.
unilex.info/case.cfm?pid=1&do=case&id=420&step=FullText; Landgericht Zwickau, Germany, 19 March 1999, published on the Internet
at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/519.htm.
50
CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998] (see full text of the decision).
CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also published on the Internet at http://www.cisg.at/8_2200v.
htm.
51
52
See the Digest for art. 40, para. 11.
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
53
54
Article 35 (3) provides that a seller is not liable for a lack of conformity under Article  35 (2) “if at the time of the conclusion of
the contract the buyer knew or could not have been unaware of such lack of conformity”.
55
CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996].
See ICC Court of Arbitration, award No. 8128, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
207&step=FullText.
56
57
ICC Court of Arbitration, March 1998, award No. 9117, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=ca
se&id=399&step=FullText; ICC Court of Arbitration, award No. 8817, published on the Internet at http://www.unilex.info/case.cfm?pid
=1&do=case&id=398&step=FullText.
58
CLOUT case No. 205 [Cour d’appel Grenoble, France, 23 October 1996] (see full text of the decision).
See Rechtbank Zwolle, Netherlands, 5 March 1997, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=
case&id=332&step=FullText.
59
34
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 8
1. For the purposes of this Convention statements made by and other conduct of
a party are to be interpreted according to his intent where the other party knew or could
not have been unaware what that intent was.
2. If the preceding paragraph is not applicable, statements made by and other
conduct of a party are to be interpreted according to the understanding that a reasonable
person of the same kind as the other party would have had in the same
circumstances.
3. In determining the intent of a party or the understanding a reasonable person
would have had, due consideration is to be given to all relevant circumstances of the
case including the negotiations, any practices which the parties have established between
themselves, usages and any subsequent conduct of the parties.
Introduction
1. Whereas article 7 addresses interpretation of and gap-filling for the Convention itself, article 8 (which according to
one arbitral tribunal states rules that correspond to principles
generally accepted in international commerce1) is concerned
with the interpretation of statements and other conduct of the
parties—provided (as expressly pointed out by the Supreme
Court of one Contracting State) that the statements or conduct
relate to a matter governed by the Convention.2 Therefore,
whenever a party’s statement or conduct relates to a matter
governed by the Convention, the interpretative criteria set forth
in article 8 are to be used, whether the statements or conduct
relate to matters governed by Part II (on “Formation”) or Part
III (on “Rights and Obligations of the Parties”). This view,
supported by legislative history,3 has been adopted in decisions: courts have resorted to the criteria set forth in article 8
to interpret statements and conduct relating to the process of
formation of contract,4 the performance of the contract,5 and
its avoidance.6
2. Where article 8 applies, it precludes application of
domestic interpretative rules because article 8 exhaustively
addresses the issue of interpretation.7
3. According to both legislative history8 and case law,9
article 8 governs not only the interpretation of unilateral
acts of each party but also “is equally applicable to the
interpretation of ‘the contract’, when the document is
embodied in a single document”.10
courts to interpret the ‘statements ... and other conduct of
a party ... according to his intent’ as long as the other party
‘knew or could not have been unaware’ of that intent. The
plain language of the Convention, therefore, requires an
inquiry into a party’s subjective intent as long as the other
party to the contract was aware of that intent”12 or could
not have been unaware of it.13
5. A party that asserts article 8 (1) applies—i.e., that the
other party knew or could not have been unaware of the
former party’s intent—must prove that assertion.14
6. The subjective intent of a party is irrelevant unless it
is manifested in some fashion; this is the rationale behind
one court’s statement that “the intent that one party secretly
had, is irrelevant”.15
7. Under article 8, courts must first attempt to establish
the meaning of a party’s statement or conduct by looking
to the intent of that party, as an arbitral tribunal has emphasized16; however, “most cases will not present a situation
in which both parties to the contract acknowledge a subjective intent [...]. In most cases, therefore, article 8 (2) of the
[Convention] will apply, and objective evidence will provide the basis for the court’s decision.”17 According to one
arbitral tribunal, application of article 8 (1) requires either
that the parties have a close relationship and know each
other well, or that the import of the statements or conduct
was clear and easily understood by the other party.18
Objective interpretation
Subjective intent of the party
(article 8, paragraph 1)
4. Paragraphs 1 and 2 of article 8 set forth two sets of
criteria. According to one court,11 article 8 (1) permits “a
substantial inquiry into the parties’ subjective intent, even
if the parties did not engage in any objectively ascertainable
means of registering this intent”. Article 8 (1) “instructs
8. Where it is not possible to use the subjective intent
standard in article 8 (1) to interpret a party’s statements or
conduct, one must resort to “a more objective analysis”19
as provided for in article 8 (2).20 Under this provision, statements and other conduct of a party are to be interpreted
according to the understanding that a reasonable person of
the same kind as the other party would have had in the
Part one. Sphere of application and general provisions
same circumstances.21 One court has characterized the
result of an interpretation based on this criterion as a “reasonable interpretation”.22
9. Article 8 (2) has been applied in a variety of decisions.
In one case, a court inferred a buyer’s intention to be bound
to a contract, as well as the quantity of goods that the buyer
intended to acquire under that contract, by interpreting the
buyer’s statements and conduct according to the understanding that a reasonable person of the same kind as the
seller would have had in the same circumstances.23 The
court found that, absent any relevant circumstance or practice between the parties at the time the contract was concluded (which must always be taken into account), the
buyer’s intention to be bound, as well as a definite quantity
of goods to be sold under the contract, could be deduced
from the buyer’s request to the seller to issue an invoice
for goods that had already been delivered.
10. Article 14 (1) of the Convention provides that a proposal for concluding a contract must be sufficiently definite
in order to constitute an offer, and that it is sufficiently
definite if it indicates the goods and expressly or implicitly
fixes or makes provision for determining the quantity and
the price. One court has stated that, in determining whether
a proposal satisfies this standard, it is sufficient if the
required content would be perceived in the proposal by “‘a
reasonable person of the same kind’ as the other party
(offeree) . . . ‘in the same circumstances’”.24
11. In determining the quality of the goods required by the
parties’ agreement, one Supreme Court has stated that, since the
parties had a different understanding of the meaning of the contract, the contract language should be interpreted under article
8 (2)—i.e., “according to the understanding that a reasonable
person of the same kind as the other party would have had in
the same circumstances”. The court noted that the buyer was
an expert and knew that it had not been offered a new machine,
but instead one built fourteen years prior to the conclusion of
the contract. Although the goods did not conform to the latest
technical standards, the Supreme Court reasoned that, under
the standard of article 8 (2), the buyer concluded the contract
with full knowledge of the technical limitations of the machinery and its accessories. For these reasons, the Supreme Court
found that the machine tendered to the buyer conformed with
the contract.25
12. Another court applied article 8 (2) to determine
whether a contract permitted the buyer to satisfy its obligation for the price of goods by offering, after the payment
period specified in the contract had expired, to ship its own
goods to the seller. Looking first to the language of the
contract and then to the interpretation suggested by the
parties’ interests in the contract, the court found that the
buyer was required to satisfy its obligations by the end of
the contractual payment period: “the [buyer] could not have
been unaware that it would have been commercially unreasonable for the [seller] to grant a respite in payment beyond
the agreed period” merely because the buyer offered to ship
goods to satisfy its payment obligations.26
13. Article 8 (2) has also been used to determine whether
a seller had implicitly waived, through its behaviour, its
right to argue that the buyer’s notice of lack of conformity
35
in the goods was not timely (see article 39).27 The fact that
the seller negotiated with the buyer over the lack of conformity after receiving the notice, the court stated, did not
necessarily waive the late-notice argument, but should
instead be evaluated in conjunction with the other circumstances of the case. In the case at hand, however, the seller
“negotiated over the amount and manner of a settlement of
damages for practically 15 months—[...] without expressly
or at least discernibly reserving the objection to the delay”
and even “offered through legal counsel to pay compensatory damages that amount to practically seven times the
value of the goods”.28 In such circumstances, the court
stated, “the [buyer] could only reasonably understand that
the [seller] was seeking a settlement of the affair and would
not later refer to the allegedly passed deadline as a defence
to the [buyer’s] reimbursement claim”. Thus under article  8  (2) and article 8 (3), the court held, the seller had
waived its right to rely on the untimeliness of the notice.
Another court has stated that a waiver of the seller’s right
to argue that the buyer’s notice of non-conformity was
untimely cannot be assumed merely because the seller
remained willing to inspect the goods at the buyer’s
request.29 This follows, the court suggested, both from the
need for certainty in commercial transactions and from the
principle of good faith, which also applies when interpreting the parties’ statements or other conduct.
14. One court employed article 8 (2) to interpret a “franco
domicile” provision in a contract, finding that the clause
addressed not only the cost of transport but also the passing
of risk. The court interpreted the provision in line with the
understanding that a reasonable person would have had in
the same circumstances as those of the parties. In the
court’s view, a buyer entitled to delivery of goods “franco
domicile” would not be concerned with transporting the
goods or with insurance on them during carriage. The fact
that the seller obtained transport insurance, the court argued,
also indicated that the seller was prepared to take the risk
during carriage, as did the fact that that it had used its own
means of transport in previous transactions with the buyer.
The court therefore concluded that the parties intended to provide for the passage of risk at the buyer’s place of business,
and accordingly to deviate from article 31 (a) CISG.30
15. Another court invoked article 8 (2) to determine whether
the conduct of a party established that an agreement as to the
purchase price had been reached.31 The buyer took delivery
of the goods without contesting the price specified by the
seller. The court, applying article 8 (2), interpreted this conduct
as acceptance of the seller’s price.
16. The interpretive standard in article 8 (2) has also been
applied in determining whether a loss suffered by the
aggrieved party should be considered foreseeable under
article 74 of the Convention.32
Considerations relevant in interpreting
statements or other conduct of a party
17. According to article 8 (3), in determining a party’s
intent or the understanding a reasonable person would have
had, due consideration is to be given to all relevant circumstances of the case. Such circumstances specifically
36
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
include33 the negotiations, any practices which the parties
have established between themselves, usages, and any subsequent conduct of the parties.34 Several decisions35 have
noted that these criteria should be taken into account when
interpreting a statement or other conduct under the standards of either article 8 (1)36 or article 8 (2).37
furthermore, gave the court good grounds to conclude that
the contract covered that quantity.
18. The express reference in article 8 (3) to the parties’
negotiations as an element to be taken into account in interpreting their statements or other conduct did not prevent
one court from indicating that the “parol evidence rule”
applies in transactions governed by the Convention.38 This
rule, which despite its name applies to both parol and written evidence, seeks to give legal effect to the contracting
parties’ intentions if they have adopted a written agreement
as the final (a “partial integration”), or even final and complete (a “complete integration”), expression of their agreement. If the written agreement is determined to be a
complete integration, the parol evidence rule prohibits a
party from introducing evidence of prior agreements or
negotiations that would contradict, or even would add consistent additional terms to, the writing. Decisions by other
courts in the same State take a contrary position.39 One of
those courts40 stated that “the parol evidence rule is not
viable in CISG cases in light of article 8 of the Convention”41 because “article 8 (3) expressly directs courts to
give ‘due consideration [...] to all relevant circumstances
of the case including the negotiations’ to determine the
intent of the parties. Given article  8  (1)’s directive to use
the intent of the parties to interpret their statements and
conduct, article 8 (3) is a clear instruction to admit and
consider parol evidence regarding the negotiations to the
extent they reveal the parties’ subjective intent”. According
to another court, article 8 (3) “essentially rejects [...] the
parol evidence rule”.42 Yet another court stated that “contracts governed by the CISG are freed from the limits of
the parol evidence rule and there is a wider spectrum of
admissible evidence to consider in construing the terms of
the parties’ agreement”.43
22. In addition to the elements expressly catalogued in
article 8 (3), the good faith principle referred to in article  7  (1) (where it is mentioned as pertinent to the interpretation of the Convention itself) must also, according to
one court, be taken into account in interpreting statements
or other conduct of the parties.48
19. After pointing out the problems that may arise under the
Convention with respect to parol evidence, a court has stated
that the parties can avoid such problems by including in their
written agreement a merger clause that extinguishes prior agreements and understandings not expressed in the writing.44
20. As several courts have pointed out45, subsequent conduct by the parties may show what a statement was intended
to mean when it was made. In one case,46 a court referred
to a buyer’s subsequent conduct to infer an intention to be
bound to a contract, as well as to determine the quantity
of goods covered by that contract, under the interpretive
approach in article 8 (2) (i.e., the understanding that a reasonable person of the same kind as the seller would have
had in the same circumstances). The court held that, absent
any relevant contrary circumstance or practice between the
parties, a party’s intention to be bound could be shown by
its conduct after the conclusion of the contract. In particular, it held that the buyer’s request to the seller to issue an
invoice for textiles the seller had delivered to a third party
(as contemplated by the parties’ arrangement) was sufficient evidence of the buyer’s intention to be bound. The
fact that the buyer delayed two months before complaining
about the quantity of goods delivered to the third party,
21. According to one court, reference to the circumstances
listed in article 8 (3) may lead to the conclusion that a
party’s silence amounted to acceptance of an offer.47
Standard contract terms and
the language of statements
23. Article 8 has also been invoked in addressing the
question whether standard contract terms employed by one
party became part of a contract. In one case,49 the Supreme
Court of a Contracting State held that the question was
governed by the Convention’s rules on interpretation rather
than by domestic law. Citing article 8 of the Convention,
the court stated that whether a party’s standard contract
terms are part of its offer must be determined by reference
to how a “reasonable person of the same kind as the other
party” would have understood the offer; under this criterion, the court asserted, standard terms become part of an
offer only if the offeree is able “to become aware of them
in a reasonable manner,” and if the intention to incorporate
such terms is “apparent to the recipient of the offer”. In
addition, according to the court, the Convention “requires
the user of general terms and conditions to transmit the
text or make it available to the other party”.50
24. In reaching similar conclusions regarding the incorporation of standard terms under the Convention, another
court also addressed the issue of the language in which the
standard terms are expressed.51 The court stated that incorporation of standard terms must be determined by interpreting the contract in light of article 8. To be effective, the
court averred, a  reference by one party to its standard terms
must be sufficient to put a reasonable person of the same
kind as the other party in a position to understand the reference and to gain knowledge of the standard terms. According to the court, one relevant circumstance is the language
in which the standard terms are written. In the case before
the court, the seller’s standard contract terms were not in
the language of the contract, and the court asserted that the
seller should have given the buyer a translation. Because
the seller had not done so, its standard contract terms did
not become part of the contract. A  similar approach was
adopted by another court, which stated that standard contract terms written in a language different from that of the
contract do not bind the other party.52
25. The language issue was also dealt with in another
decision53 in which the court held that a case-by-case
approach must be employed in determining the effectiveness of a notice written in a language other than the language in which the contract was made or the language of
the addressee. Under article 8 (2) and article 8 (3), the
court asserted, the question must be evaluated from the
Part one. Sphere of application and general provisions
perspective of a reasonable person, giving due consideration to usages and practices observed in international trade.
The mere fact that a notice was in a language that was
neither that of the contract nor that of the addressee did
not necessarily prevent the notice from being effective: the
notice language might be one normally used in the pertinent trade sector, and thus potentially binding on the parties
under article 9; or, as in the case before the court, the
37
recipient might reasonably have been expected to request
from the sender explanations or a translation.
26. Another court54 has held that, if a party accepts statements relating to the contract in a language different from
the one used for the contract, the party is bound by the
contents of such statements; it is the party’s responsibility
to acquaint itself with those contents.
Notes
1
CLOUT case No. 303 [Arbitration-International Chamber of Commerce no. 7331 1994] (see full text of the decision).
2
See Oberster Gerichtshof, 24 April 1997, published on the Internet at http://www.cisg.at/2_10997m.htm.
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 18,
stating that “Article [8] on interpretation furnishes the rules to be followed in interpreting the meaning of any statement or other conduct
of a party which falls within the scope of application of this Convention. Interpretation of the statements or conduct of a party may be
necessary to determine whether a contract has been concluded, the meaning of the contract, or the significance of a notice given or other
act of a party in the performance of the contract or in respect of its termination”.
3
4
See CLOUT case No. 429 [Oberlandesgericht Frankfurt, Germany, 30 August 2000], also published on the Internet at http://cisgw3.
law.pace.edu/cisg/text/000830g1german.html; CLOUT case No. 424 [Oberster Gerichtshof, Austria, 9  March 2000], also published on
the Internet at http://www.cisg.at/6_31199z.htm; Landgericht Zwickau, Germany, 19 March 1999, published on the Internet at http://
www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/519.htm; CLOUT case No. 189, Austria, 1997; CLOUT case No. 176 [Oberster Gerichtshof,
Austria, 6 February 1996]; CLOUT case No. 334 [Obergericht des Kantons Thurgau, Switzerland, 19 December 1995]; CLOUT case
No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December 1995] (see full text of the decision); CLOUT case No. Vibracoes106 [Oberster Gerichtshof, Austria, 10 November 1994].
5
CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998] (dealing with the issue of whether the offer to pay damages
on the seller’s part constitutes a waiver of the seller’s right to rely on articles 38 and 39).
6
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997] (dealing with the issue of whether a certain conduct
amounted to avoidance of the contract) (see full text of the decision).
7
CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990] (see full text of the decision).
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 18.
8
9
CLOUT case No. 303 [Arbitration-International Chamber of Commerce no. 7331 1994] (see full text of the decision).
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 18;
see Bundesgericht, Switzerland, 22 December 2000, published on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/001222s1.
html.
10
11
CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29 June 1998].
CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29 June 1998] (internal citation in quoted
material omitted) (see full text of the decision); for other cases in which the part of article 8 (1) referred to in the text was cited, see
CLOUT case No. 313 [Cour d’appel Grenoble, France, 21 October 1999] (see full text of the decision); CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996]. For an express reference to the “subjective” interpretation, see CLOUT case No. 429 [Oberlandesgericht Frankfurt, Germany, 30 August 2000], also published on the Internet at http://cisgw3.law.pace.edu/cisg/text/000830g1german.
html.
12
13
For references to this part of article 8, paragraph 1, see CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997]
(see full text of the decision).
14
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (see full text of the decision).
15
CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990] (see full text of the decision).
ICC Court of Arbitration, award No. 8324, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=240&step=
FullText.
16
17
CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit United States, 29 June 1998] (see full text of the
decision).
18
ICC Court of Arbitration, award No. 8324, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=240&step=
FullText.
19
Id.; for other cases that refer expressly to interpretation under article 8 (2) as being on a more “objective” basis, see CLOUT case
No. 607 [Oberlandesgericht Köln, 16 July 2001], also published on the Internet at http://www.cisg.law.pace.edu/cisg/text/010716g1german.
html; Bundesgericht, Switzerland, 22  December 2000, published on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/001222s1.html; CLOUT case No. 429 [Oberlandesgericht Frankfurt, Germany, 30 August 2000], also published on the Internet
at http://cisgw3.law.pace.edu/cisg/text/000830g1german.html; CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit,
38
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
United States, 29 June 1998] (see full text of the decision); Hoge Raad, Netherlands, 7 November 1997, published on the Internet at
http://www.unilex.info/case.cfm?pid=1&do=case&id=333&step=FullText; CLOUT case No. 409 [Landgericht Kassel, Germany, 15  February 1996], also published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/190.htm.
20
It may well be that neither article 8 (1) nor article  8  (2) leads to an interpretation wanted by a party: see Hoge Raad, Netherlands,
7 November 1997, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=333&step=FullText.
21
Landgericht Zwickau, Germany, 19 March 1999, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/519.
htm; CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997]; Hoge Raad, Netherlands, 7 November 1997, published on
the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=333&step=FullText; CLOUT case No.  215 [Bezirksgericht St. Gallen
Switzerland 3 July 1997] (see full text of the decision); CLOUT case No. 166 [Arbitration - Schiedsgericht der Handelskammer Hamburg,
21 March, 21  June 1996] (see full text of the decision); Arbitration Court of the Chamber of Commerce and Industry of
Budapest, Arbitration, award No. Vb 94124, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=217&
step=FullText; CLOUT case No.  308 [Federal Court of Australia 28 April 1995] (see full text of the decision); CLOUT case No. 106
[Oberster Gerichtshof, Austria, 10 November 1994].
22
CLOUT case No. 273 [Oberlandesgericht München, Germany, 9 July 1997].
23
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (see full text of the decision).
24
CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994].
Bundesgericht, Switzerland, 22 December 2000, published on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/001222s1.
html.
25
26
Oberlandesgericht Dresden, Germany, 27 December 1999, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/
text/511.htm (internal citations to Convention omitted).
27
CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998].
28
Id. (internal citations to Convention omitted) (see full text of the decision).
29
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision).
30
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992].
31
CLOUT case No. 151 [Cour d’appel Grenoble, France, 26 February 1995].
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14 January 2002], also published on the Internet at http://131.152.131.200/
cisg/urteile/643.htm.
32
33
According to the Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna,
10  March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 18, the list to be found in article 8, paragraph 3 is not an
exhaustive list of elements to be taken into account in interpreting statements or other conduct by the parties.
34
For references to article 8, paragraph 3, see CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997]; CLOUT
case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994].
35
In arbitration, see ICC Court of Arbitration, award No. 8324/1995, published on the Internet at http://www.unilex.info/case.cfm?pid
=1&do=case&id=240&step=FullText.
36
CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996], expressly stating that the elements referred to in article  8,
paragraph 3 have to be taken into account when interpreting a statement or other conduct by a party in the light of article 8, paragraph  1
(see full text of the decision).
37
CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994].
38
CLOUT case No. 24 [Federal Court of Appeals for the Fifth Circuit, United States, 15 June 1993].
See CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29 June 1998]; CLOUT case No. 578
[Federal Western District Court for Michigan, United States of America, 17 December 2001] also in 2001 Westlaw 34046276 (Shuttle
Packaging Systems v. Tsonakis), and on the Internet at http://cisgw3.law.pace.edu/cases/011217u1.html; CLOUT case No. 419 [Federal
District Court, Northern District of Illinois, United States, 27 October 1998].
39
40
CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29 June 1998].
41
Id. (see full text of the decision).
CLOUT case No. 23 [Federal District Court, Southern District of New York, United States, 14 April 1992] (see full text of the
decision).
42
43
CLOUT case No. 413 [Federal District Court, Southern District of New York, United States, 6 April 1998] (see full text of the decision).
CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29 June 1998] (see full text of the
decision).
44
45
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997]; CLOUT case No. 5 [Landgericht Hamburg, Germany,
26 September 1990] (see full text of the decision).
46
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (see full text of the decision).
47
CLOUT case No. 23 [Federal District Court, Southern District of New York, United States, 14 April 1992].
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision); Arbitral
Tribunal of the Hamburg Chamber of Commerce, Arbitration, 21 June 1996, published on the Internet at http://www.unilex.info/case.
cfm?pid=1&do=case&id=196&step=FullText.
48
49
CLOUT case 445 [Bundesgerichtshof, Germany, 31 October 2001], also published on the Internet at http://www.unilex.info/case.
cfm?pid=1&do=case&id=736&step=Abstract.
Part one. Sphere of application and general provisions
50
Id.
51
See CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997].
39
Rechtbank Koophandel Hasselt, Belgium, 2 June 1999, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/
1999-06-02.htm.
52
53
CLOUT case No. 132 [Oberlandesgericht Hamm, Germany, 8 February 1995].
CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996], also published on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/urteile/text/190.htm.
54
40
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 9
1. The parties are bound by any usage to which they have agreed and by any
practices which they have established between themselves.
2. The parties are considered, unless otherwise agreed, to have impliedly made
applicable to their contract or its formation a usage of which the parties knew or ought
to have known and which in international trade is widely known to, and regularly
observed by, parties to contracts of the type involved in the particular trade
concerned.
Introduction
1. This provision describes the extent to which parties to
an international sales contract governed by the CISG are
bound by usages, as well as by practices that the parties
have established between themselves.1 Usages to which the
parties have “agreed”, along with practices that the parties
have established, are covered by article 9 (1); usages that
the parties “have impliedly made applicable to their contract” are addressed in article 9 (2).
2. The validity of usages is outside the Convention’s
scope;2 the Convention addresses only their applicability.3
As a consequence, the validity of usages is governed by
applicable domestic law.4 If a usage is valid, it prevails over
the provisions of the Convention, regardless of whether the
usage is governed by article 9 (1) or by article 9 (2).5
Usages agreed to and practices
established between the parties
3. Under article 9 (1), the parties are bound by any usage
to which they have agreed. Such an agreement need not be
explicit,6 but—as one court has stated7—may be implicit.
4. According to the same court, article 9 (1)—unlike article
9(2)—does not require that a usage be internationally accepted
in order to be binding; thus the parties are bound by local
usages to which they have agreed as much as by international
usages.8 The same court (in a different case) has stated that
usages need not be widely known in order to be binding under
article 9 (1) (as opposed to article  9  (2)).9
5. According to article 9 (1), the parties are also bound
by practices established between themselves—a principle
that, according to one arbitral tribunal, “was extended to
all international commercial contracts by the UNIDROIT
Principles”.10 Article 1.9 (1) of those Principles provides
that “the parties are bound by any usage to which they
have agreed and by any practices which they have established between themselves.”
6. Several decisions provide examples of practices binding under article 9 (1). An arbitral panel has found that a
seller was required to deliver replacement parts promptly
because that had become “normal practice” between the
parties.11 In another case, an Italian seller had been filling
the buyer’s orders for many months without inquiring into
the buyer’s solvency; thereafter, the seller assigned its foreign receivables to a factor and, because the factor did not
accept the buyer’s account, the seller suspended its business
relationship with the buyer; a court held that, based on a
practice established between the parties, the seller was
required to take the buyer’s interest into account in restructuring its business, and thus the seller was liable for abruptly
discontinuing its relationship with the buyer.12 In a different
decision, the same court ruled that a seller could not invoke
the rule in CISG article 18 which provides that silence does
not amount to acceptance because the parties had established a practice in which the seller filled the buyer’s orders
without expressly accepting them.13
7. The Convention does not define when practices become
“established between the parties”. According to some
courts, a practice is binding on the parties pursuant to article 9 (1) only if the parties’ relationship has lasted for some
time and the practice has appeared in multiple contracts.
One court asserted that article 9 (1) “would require a conduct regularly observed between the parties […] [of] a
certain duration and frequency [...]. Such duration and frequency does not exist where only two previous deliveries
have been handled in that manner. The absolute number is
too low”.14 Another court dismissed a seller’s argument that
reference on two of its invoices to the seller’s bank account
established a practice between the parties requiring the
buyer to pay at the seller’s bank. The court held that, even
if the invoices arose from two different contracts between
the parties, they were insufficient to establish a practice
under article 9 (1) of the Convention. According to the
court, an established practice requires a long lasting relationship involving more contracts of sale.15 Another court
has stated that one prior transaction between the parties did
not establish “practices” in the sense of article  9 (1).16
According to a different court, however, “[i]t is generally
possible that intentions of one party, which are expressed
in preliminary business conversations only and which are
not expressly agreed upon by the parties, can become
“practices” in the sense of article 9 of the Convention
already at the beginning of a business relationship and
Part one. Sphere of application and general provisions
thereby become part of the first contract between the parties. This, however, requires at least (article 8) that the
business partner realizes from these circumstances that the
other party is only willing to enter into a contract under
certain conditions or in a certain form”.17
8. Several courts have stated that the party alleging the
existence of a binding practice or usage bears the burden of
proving that the requirements of article 9 (1) are met.18
Binding international trade usages
(Article 9 (2))
9. By virtue of article 9 (2), parties to an international
sales contract may be bound by a trade usage even in the
absence of an affirmative agreement thereto, provided the
parties “knew or ought to have known” of the usage and
the usage is one that, in international trade, “is widely
known to, and regularly observed by, parties to contracts
of the type involved in the particular trade concerned.” One
court has construed article 9 (2) as providing that “the
usages and practices of the parties or the industry are automatically incorporated into any agreement governed by the
Convention, unless expressly excluded by the parties”.19
10. Usages that are binding on the parties pursuant to
article  9 (2) prevail over conflicting provisions of the Convention.20 On the other hand, contract clauses prevail over
conflicting usages, even if the usages satisfy the requirements of article 9 (2), because party autonomy is the primary source of rights and obligations under the Convention,
as the introductory language of article 9 (2) confirms.21
11. As noted in paragraph 9 of this Digest, to be binding
under article 9 (2) a usage must be known by (or be one
that ought to have been known to) the parties, and must
be widely known and regularly observed in international
trade. According to one court this does not require that a
usage be international: local usages applied within commodity exchanges, fairs and warehouses may be binding
under article 9 (2) provided they are regularly observed
with respect to transactions involving foreign parties.22 The
court also stated that a local usage observed only in a particular country may apply to a contract involving a foreign
party if the foreign party regularly conducts business in
that country and has there engaged in multiple transactions
of the same type as the contract at issue.
12. The requirement that the parties knew or ought to
have known of a usage before it will be binding under
article 9 (2) has been described as requiring that the parties
either have places of business in the geographical area
where the usage is established or continuously transact
business within that area for a considerable period.23
According to an earlier decision by the same court, a party
to an international sales contract need be familiar only with
those international trade usages that are commonly known
to and regularly observed by parties to contracts of the
same specific type in the specific geographic area where
the party has its place of business.24
13. There is no difference in the allocation of burden of
proof under article 9 (1) and (2):25 the party that alleges
41
the existence of a binding usage has to prove the required
elements, at least in those legal systems that consider the
issue one of fact.26 If the party that bears the burden fails
to carry it, an alleged usage is not binding. Thus where a
buyer failed to prove the existence of an international trade
usage to treat a party’s silence after receiving a commercial
letter of confirmation as consent to the terms in the letter,
a contract was found to have been concluded on different
terms.27 In another case, a party’s failure to prove an alleged
usage that would have permitted the court to hear the party’s claim led the court to conclude that it lacked jurisdiction.28 Similarly, a court has held that, although the
Convention’s rules on concluding a contract (articles 14-24)
can be modified by usages, those rules remained applicable
because no such usage had been proven.29 Where a buyer
failed to prove a trade usage setting the place of performance in the buyer’s country, furthermore, the place of performance was held to be in the seller’s State.30 And the
European Court of Justice has stated that, in order for
silence in response to a letter of confirmation to constitute
acceptance of the terms contained therein, “it is necessary
to prove the existence of such a usage on the basis of the
criteria set out” in article 9 (2) of the Convention.31
14. There are several examples of fora finding that the
parties are bound by a usage pursuant to article 9 (2). In
one case, an arbitral tribunal held that a usage to adjust the
sales price was regularly observed by parties to similar
contracts in the particular trade concerned (minerals).32 In
another decision, a court held that a bill of exchange given
by the buyer had resulted in a modification of the contract,
pursuant to article 29 (1) of the Convention, which postponed the date of payment until the date the bill of exchange
was due;33 the court indicated that an international trade
usage binding under article 9 (2) supported its holding. In
yet another case, a court stated that there was a usage in
the particular trade concerned which required the buyer to
give the seller an opportunity to be present when the buyer
examined the goods.34
15. Several decisions have referred to usages when
addressing the question of the interest rate to be applied to
late payments. One court has twice invoked international
usages binding under article 9 (2) of the Convention to
solve the issue. In the first decision, the court stated that
payment of interest “at an internationally known and used
rate such as the Prime Rate” constituted “an accepted usage
in international trade, even when it is not expressly agreed
between the parties”.35 In the second decision, the court
adopted the same position and commented that the “Convention attributes [to international trade usages] a hierarchical position higher than that of the provisions of the
Convention”.36
Letters of confirmation, INCOTERMS,
and the UNIDROIT Principles
16. Several cases have invoked article 9 in determining
whether silence in response to a letter of confirmation signifies agreement to the terms contained in the letter. In
response to an argument seeking recognition of a usage
that such silence constituted consent to terms in a confirmation, one court stated that “[d]ue to the requirement of
42
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
internationality referred to in article 9 (2) CISG, it is not
sufficient for the recognition of a certain trade usage if it
is only valid in one of the two Contracting States. Therefore, [in order to bind the parties], the rules on commercial
letters of confirmation would have to be recognized in both
participating States and it would have to be concluded that
both parties knew the consequences [...]. It is not sufficient
that the trade usage pertaining to commercial letters of
confirmation exists only at the location of the recipient of
the letter […]”.37 Because the contractual effects of silence
in response to a letter of confirmation were not recognized
in the country of one party, the court found that the terms
in the confirmation had not become part of the contract.
Although the court noted that domestic doctrines attributing
significance to silence in response to a confirmation had
no relevance in the context of international sales law, the
court nevertheless suggested that “a letter of confirmation
can have considerable importance in the evaluation of the
evidence”. Another court noted that a letter of confirmation
binds the parties only “if this form of contract formation
can be qualified as commercial practice under article 9 of
the Convention”.38 The court held that such a usage, binding
under article 9 (2), existed in the case: both parties were
located in countries in which “the contractual effect of commercial communications of confirmation” was recognized;
furthermore, the “parties recognized the legal effects of such
a communication” and for that reason should have expected
that “they might be held to those legal effects”.39 Yet another
court rejected the idea that domestic rules on the effects of
silence in response to a letter of confirmation can be relevant
when the Convention is applicable.40
17. One court has commented on the relationship between
article 9 (2) and INCOTERMS.41 After asserting that
“INCOTERMS are incorporated into the Convention
through article 9 (2)”, the court stated that, pursuant to
article 9 (2), “INCOTERMS definitions should be applied
to the contract despite the lack of an explicit INCOTERMS
reference in the contract.” Thus by incorporating a “CIF”
term in their contract, the court held, the parties intended
to refer to the INCOTERMS definition thereof.42 Similar
statements occur in an arbitral award43 and in a decision
of a court in a different State.44 In the latter decision, the
court interpreted an FOB clause by referring to the INCOTERMS even though the parties had not expressly referenced the INCOTERMS.
18. One court has held that the UNIDROIT Principles of
International Commercial Contracts constitute usages of the
kind referred to in article 9 (2) of the Convention.45 Similarly, an arbitral tribunal stated that the UNIDROIT Principles reflect international trade usages.46
Notes
1
See also United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official
Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee,
1981, 19.
2
CLOUT case No. 605 [Oberster Gerichtshof, Austria, 22 October 2001], also published on the Internet at http://www.cisg.at/1_4901i.
htm.
3
See CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.
at/10_34499g.htm.
4
See CLOUT case No. 425[Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.
at/10_34499g.htm; CLOUT case No. 240 [Oberster Gerichtshof, Austria, 15  October 1998] (see full text of the decision).
5
See Rechtbank Koophandel Ieper, Belgium, 18 February 2002, published on the Internet at http://www.law.kuleuven.ac.be/int/trade
law/WK/2002-02-18.htm; Rechtbank Koophandel Veurne, Belgium, 25 April 2001, published on the Internet at http://www.law.kuleuven.
ac.be/int/tradelaw/WK/2001-04-25.htm; Rechtbank Koophandel Ieper, Belgium, 29 January 2001, published on the Internet at http://www.
law.kuleuven.ac.be/int/tradelaw/WK/2001-01-29.htm; CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.at/10_34499g.htm; Juzgado Nacional de Primera Instancia en lo Comercial No. 10, Argentina,
6 October 1994, published on the Internet at http://www.uc3m.es/uc3m/dpto/PR/dppr03/cisg/sargen8.htm.
6
For a case in which the parties expressly chose to be bound by trade usages, see China International Economic and Trade Arbitration
Commission, Arbitration, award relating to 1989 Contract #QFD890011, published on the Internet at http://www.cisg.law.pace.edu/
cases/900000c1.html (in the case at hand the parties chose to be bound by a FOB clause).
7
CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.at/10_34499g.
htm.
8
Id.
9
CLOUT case No. 240 [Oberster Gerichtshof, Austria, 15 October 1998] (see full text of the decision).
ICC Court of Arbitration, award No. 8817, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
398&step=FullText.
10
11
ICC Court of Arbitration, award No. 8611/HV/JK, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id
=229&step= FullText.
12
CLOUT case No. 202, France [Cour d’appel Grenoble, France, 13 September 1995] (see full text of the decision).
13
CLOUT case No. 313 [Cour d’appel Grenoble, France, 21 October 1999] (see full text of the decision).
14
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (see full text of the decision).
15
CLOUT case No. 221 [Zivilgericht des Kantons Basel-Stadt, Switzerland, 3 December 1997] (see full text of the decision).
16
Landgericht Zwickau, Germany, 19 March 1999, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/519.htm.
Part one. Sphere of application and general provisions
17
43
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (see full text of the decision); CLOUT case No. 347 [Oberlandesgericht Dresden, Germany, 9 July 1998].
18
19
CLOUT case No. 579 [U.S. [Federal] District Court, Southern District of New York, 10 May 2002], also published on the Internet
at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020510u1.html#vi.
20
CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.at/10_34499g.
htm; CLOUT case No. 240 [Oberster Gerichtshof, Austria, 15  October 1998].
21
See CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13  January 1993] (see full text of the decision).
22
CLOUT case No. 175 [Oberlandesgericht Graz, Austria, 9 November 1995].
CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.at/10_34499g.
htm.
23
24
CLOUT case No. 240 [Oberster Gerichtshof, Austria, 15 October 1998] (see full text of the decision).
25
See paragraph 8 supra.
CLOUT case No. 425 [Oberster Gerichtshof, Austria, 21 March 2000], also published on the Internet at http://www.cisg.at/10_34499g.
htm.
26
27
See CLOUT case No. 347 [Oberlandesgericht Dresden, Germany, 9 July 1998].
28
CLOUT case No. 221 [Zivilgericht des Kantons Basel-Stadt, Switzerland, 3 December 1997].
29
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
Hjesteret, Denmark, 15 February 2001, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=751&step=
FullText.
30
31
Mainschiffahrts-Genossenschaft eb (MSG) v. Les Gravihres Rhinanes SARL, 20 February 1997, European Community Reports I 927
n.34 (1997).
32
ICC Court of Arbitration, award No. 8324, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
240&step=FullText.
33
CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990] (see full text of the decision).
See Helsinki Court of Appeal, Finland, 29 January 1998, published on the Internet at http://www.utu.fi/oik/tdk/xcisg/tap4.
html#engl.
34
35
Juzgado Nacional de Primera Instancia en lo Comercial No. 10, Argentina, 23 October 1991, published on the Internet at http://
www.unilex.info/case.cfm?pid=1&do=case&id=184&step=FullText.
36
Juzgado Nacional de Primera Instancia en lo Comercial No. 10, Argentina, 6 October 1994, published on the Internet at http://www.
unilex.info/case.cfm?pid=1&do=case&id=178&step=FullText.
37
CLOUT case No. 276 [Oberlandesgericht Frankfurt am Main, Germany, 5 July 1995].
38
CLOUT case No. 95 [Zivilgericht Basel-Stadt, Switzerland, 21 December 1992].
39
Id.
Landgericht Frankfurt, Germany, 6 July 1994, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
189&step=FullText.
40
41
CLOUT Case No. 447 [Federal District Court, Southern District of New York, United States of America, 26 March 2002], also
published on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020326u1.html.
42
Id.
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation,
award in case No. 406/1998 of 6 June 2000, , published on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/000606r1.
html.
43
44
Corte d’appello Genova, Italy, 24 March 1995, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
198&step=FullText.
45
International Arbitration Court of the Chamber of Commerce and Industry of the Russian Federation, Russian Federation, award in
case No. 229/1996 of 5 June 1997, summarized on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=669&step=
Abstract.
46
ICC Court of Arbitration, award No. 9333, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
400&step=Abstract.
44
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 10
For the purposes of this Convention:
(a) If a party has more than one place of business, the place of business is that
which has the closest relationship to the contract and its performance, having regard to
the circumstances known to or contemplated by the parties at any time before or at the
conclusion of the contract;
(b) If a party does not have a place of business, reference is to be made to his
habitual residence.
Overview
1. Article 10 provides two rules that address the location
of party: if a party has multiple places of business, the rule
in article 10 (a) identifies which is relevant for purposes
of the Convention; article 10 (b), on the other hand, states
that a party which does not have a place of business is
deemed located at the party’s habitual residence.1 These
rules are helpful, as the location of the relevant place of
business is important under various provisions of the Convention, including the main provision governing the convention’s applicability (article 1).2
Application of article 10 (a)
2. Article 10 (a) has been cited in various decisions,3 but
it has actually been applied in determining the relevant
place of business in only a few cases. One court used the
provision to decide whether a contract concluded between
a seller in France and a buyer with places of business both
in the United States of America and in Belgium was governed by the Convention.4 The court reasoned that, since
the invoice was sent to the buyer’s Belgian place of business and since it was in Dutch (a language known only at
the buyer’s Belgian offices), the Belgian place of business
was most closely connected to the contract and its performance; the Convention, therefore, applied. The court also
noted that, because the Convention was in force in the
United States of America, the Convention would apply even
if the buyer’s relevant place of business was in that
country.
3. Another court5 employed article 10 (a) to determine
whether a sales contract was international under the Convention. The contract arose out of a purchase order sent by
a buyer with its place of business in France to an individual,
also located in France, that represented the seller, which
had its offices in Germany. In deciding whether the contract
was “between parties whose places of business are in different States” for purposes of article 1 of the Convention,
the court noted that “the order confirmations emanating
from the seller, the invoices, and the deliveries of the goods
were made from the seat of the seller in Germany”; thus
even assuming that the seller had a place of business in
France, the court reasoned, “the place of business ‘which
has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the
conclusion of the contract’ […] is indeed the place of business whose seat is in [Germany].” Thus, the court concluded, “[t]he international character of the disputed
contract is as a consequence established.”
4. In another case6 a court was called upon to decide
whether the Convention applied to the claim of a German
manufacturer of floor covering who demanded that the
Spanish buyer pay for several deliveries. The buyer argued
that it had contracted only with an independent company
located in Spain, thus raising the question whether there
was an international sales contract within the meaning of
article 1 of the Convention. As the buyer was aware, the
Spanish company with whom it allegedly dealt had links
with the German plaintiff, including the fact that members
of the Spanish company’s board overlapped with those of
the German seller. The court concluded that the contract
was an international one subject to the Convention. It found
that the German manufacturer rather than the Spanish company was the buyer’s contracting partner and, because the
Spanish company lacked legal authority to bind the German
seller, the Spanish company did not constitute a separate
place of business of the seller. Even if the Spanish company
was such a place of business, the court reasoned, the seller’s German place of business had the closest relationship
to the contract and its performance given the German manufacturer’s “control over the formation and performance of
the contract, which the [buyer] was well aware of.” Thus
the court found that the seller’s German place of business
was the relevant one under article  10 (a).
5. In another decision7 the court invoked article 10 (a) in
holding that, if a party has multiple places of business, it is
not always the principal one that is relevant in determining
whether a contract is governed by the Convention.
Application of article 10 (b)
6. Article 10 (b) has been cited in only once decision, in
which the court merely described the text of the provision.8
Part one. Sphere of application and general provisions
45
Notes
1
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 19.
2
For provisions referring to a party’s “place of business”, see articles 1 (1), 12, 20 (2), 24, 31 (c), 42 (1) (b), 57 (1) (a) and (2),
69  (2), 90, 93 (3), 94 (1) and (2), and 96.
3
See CLOUT case No. 433 [[Federal] Northern District Court of California, 27 July 2001], Federal Supplement (2nd Series) vol. 164,
p.1142 (Asante Technologies v. PMC-Sierra), also available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/010727u1.
html (merely quoting the text of article 10 (a)); Tribunal of International Commercial Arbitration at the Russian Federation Chamber of
Commerce and Industry, Russian Federation, award in case No. 2/1995 of 11 May 1997, published on the Internet at http://cisgw3.law.
pace.edu/cases/970511r1.html (citing article 10 (a) in deciding that a party’s relevant place of business was in Switzerland rather than
in England—without, however, specifying any reason for the decision).
4
Rechtbank Koophandel Hasselt, Belgium, 2 June 1999, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/
1999-06-02.htm.
5
CLOUT case No. 400 [Cour d’appel Colmar, France, 24 October 2000] (see full text of the decision).
Oberlandesgericht Stuttgart, Germany, 28 February 2001, published on the Internet at http://www.cisg.law.pace.edu/cisg/text/
000228g1german.html.
6
7
CLOUT case No. 261 [Berzirksgericht der Sanne, Switzerland, 20 February 1997].
8
CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (see full text of the decision).
46
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 11
A contract of sale need not be concluded in or evidenced by writing and is not subject
to any other requirement as to form. It may be proved by any means, including
witnesses.
Introduction
1. Subject to article 12, article 11 provides that a contract
of sale need not be concluded in writing and is not subject
to any other specific requirement as to form.1 The provision
thus establishes the principle of freedom from form requirements2—or in other words, as one court has stated, “[u]nder
article 11 CISG, a contract of sale can be concluded informally”.3 According to case law this means that a contract
can be concluded orally4 and through the conduct of the
parties.5 Article 11 has also been invoked in holding that
a party’s signature was not required for a valid contract.6
2. As was noted in the Digest for article 7,7 several tribunals have stated that the freedom-from-form-requirements
rule that article 11 establishes with regard to concluding a
contract constitutes a general principle upon which the
Convention is based.8 Under this principle, the parties are
free to modify or terminate their contract in writing, orally,
or in any other form. Even an implied termination of the
contract has been held possible,9 and it has been held that
a written contract may be orally modified.10
3. As the Convention’s drafting history states, despite the
informality rule in article 11 “[a]ny administrative or criminal sanctions for breach of the rules of any State requiring
that such contracts be in writing, whether for purposes of
administrative control of the buyer or seller, for purposes
of enforcing exchange control laws, or otherwise, would
still be enforceable against a party which concluded the
non-written contract even though the contract itself would
be enforceable between the parties.”11
Form requirements and evidence
of the contract
4. Article 11 also frees the parties from domestic requirements relating to the means to be used in proving the existence of a contract governed by the Convention. Indeed, as
various courts have emphasized, “the contract can be proven
by any means”.12 As a consequence, domestic rules requiring
a contract to be evidenced in writing in order to be enforceable are superseded; one court, for instance, stated that
“[u]nder the CISG, evidence of the oral conversations
between [seller] and [buyer], relating to the terms of the
purchase [. . .], could be admitted to establish that an agreement had been reached between [the parties].”13
5. It is up to those presiding over the tribunal to determine—within the parameters of the procedural rules of the
forum—how to evaluate the evidence presented by the parties.14 It is on this basis that one court15 stated that a judge
may attribute more weight to a written document than to
oral testimony.
6. For comments on the applicability of the parol evidence
rule under the Convention, see the Digest for article  8.16
Limits to the principle of
freedom-from-form-requirements
7. According to article 12, the Convention’s elimination
of form requirements does not apply if one party has its
relevant place of business in a State that made a declaration
under article 96.17 Different views exist as to the effects of
an article 96 reservation. According to one view, the mere
fact that one party has its place of business in a State that
made an article 96 reservation does not necessarily mean
that the domestic form requirements of that State apply.18
Under this view, the rules of private international of the
forum will dictate what, if any, form requirements must be
met: if those rules lead to the law of a State that made an
article 96 reservation, then the form requirements of that
State must be complied with; but if the applicable law is
that of a Contracting State that did not make an article 96
reservation, the freedom-from-form-requirements rule laid
down in article 11 would apply, as several decisions have
stated.19 According to an opposing view, however, the fact
that one party has its relevant place of business in a State
that made an article 96 reservation subjects the contract to
writing requirements, and the contract can only be modified
in writing.20
Notes
1
See CLOUT case No. 424 [Oberster Gerichtshof, Austria, 9 March 2000], also published on the Internet at http://www.cisg.at/6_31199z.
htm; CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (see full text of the decision); CLOUT case No. 176
[Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision); CLOUT case No. 308 [Federal Court of Australia,
28 April 1995] (see full text of the decision); CLOUT case No. 137 [Oregon [State] Supreme Court, United States, 11 April 1996]; for
similar statements, see United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980,
Part one. Sphere of application and general provisions
47
Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 20.
2
See Bundesgericht, Switzerland, 15 September 2000, published on the Internet at http://www.bger.ch/index.cfm?language=german&
area=Jurisdiction&theme=system&page=content&maskid=220.
3
CLOUT case No. 95 [Zivilgericht Basel-Stadt, Switzerland, 21 December 1992] (see full text of the decision).
See CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit United States 29  June 1998] (see full text of the decision); CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision); CLOUT case No. 134
[Oberlandesgericht München, Germany, 8 March 1995]; for an example of a case where an oral contract was held to be valid, see
CLOUT case No. 120 [Oberlandsgericht Köln, Germany, 22 February 1994], also published on the Internet at http://www.jura.uni-freiburg.
de/ipr1/cisg/urteile/text/127.htm.
4
5
For this statement, see Hof van Beroep Gent, Belgium, 15 May 2002, published on the Internet at http://www.law.kuleuven.be/ipr/
eng/cases/2002-05-15.html; CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March 1995].
6
CLOUT case No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December 1995].
7
See para. 15 of the Digest for article 7
See Compromex Arbitration, Mexico, 29 April 1996, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&
id=258&step=FullText and at http://www.uc3m.es/cisg/rmexi2.htm; CLOUT case No.176 [Oberster Gerichtshof, Austria, 6 February 1996]
(see full text of the decision).
8
9
CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], Zeitschrift für Rechtsvergleichung, 2000, 33.
Hof van Beroep Gent, Belgium, 15 May 2002, published on the Internet at http://www.law.kuleuven.be/ipr/eng/cases/2002-05-15.
html; CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
10
11
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 20.
12
See Rechtbank van Koophandel Hasselt, Belgium, 22 May 2002, published on the Internet at http://www.law.kuleuven.ac.be/int/
tradelaw/WK/2002-05-22.htm; Rechtbank van Koophandel Kortrijk, Belgium, 4 April 2001, published on the Internet at http://www.law.
kuleuven.be/ipr/eng/cases/2001-04-04.html; CLOUT case No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December
1995]; CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March 1995].
13
CLOUT case No. 414 [Federal District Court, Southern District of New York, United States, 8 August 2000] (see full text of the
decision).
14
See Rechtbank van Koophandel Kortrijk, Belgium, 4 April 2001, published on the Internet at http://www.law.kuleuven.be/ipr/eng/
cases/2001-04-04.html; LG Memmingen, 1  December 1993, published on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/
text/73.htm.
15
Rechtbank van Koophandel Hasselt, Belgium, 22 May 2002, published on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/2002-05-22.htm.
16
See paragraph 18 of the Digest for article 8.
See Rechtbank van Koophandel, Hasselt, Belgium, 2 May 1995, published on the Internet at http://www.law.kuleuven.be/ipr/eng/
cases/1995-05-02.html.
17
18
Rechtbank Rotterdam, the Netherlands, 12 July 2001, Nederlands Internationaal Privaatrecht, 2001, No. 278.
Rechtbank Rotterdam, the Netherlands, 12 July 2001, Nederlands Internationaal Privaatrecht, 2001, No. 278; Hoge Raad, the Netherlands, 7 November 1997, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=333&step=FullText; CLOUT
case No.  52 [Fovárosi Biróság, Hungary 24 March 1992].
19
20
The High Arbitration Court of the Russian Federation, Arbitration, 16 February 1998, referred to on the Internet at http://cisgw3.
law.pace.edu/cases/980216r1.html; Rechtbank van Koophandel Hasselt, Belgium, 2 May 1995, published on the Internet at http://www.
law.kuleuven.be/ipr/eng/cases/1995-05-02.html.
48
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 12
Any provision of article 11, article 29 or Part II of this Convention that allows a contract
of sale or its modification or termination by agreement or any offer, acceptance or other
indication of intention to be made in any form other than in writing does not apply
where any party has his place of business in a Contracting State which has made a
declaration under article 96 of this Convention. The parties may not derogate from or
vary the effect of this article.
Introduction
1. Some States consider it important that contracts and
related matters—such as contract modifications, consensual contract terminations, and even communications that
are part of the contract formation process—be in writing.
Articles 12 and 96 of the Convention permit a Contracting
State to make a declaration that recognizes this policy: a
reservation under article 96 operates, as provided in article 12, to prevent the application of any provision of article 11, article 29 or Part II of the Convention that allows
a contract of sale or its modification or termination by
agreement or any offer, acceptance, or other indication of
intention to be made in any form other than in writing
where any party has his place of business in that Contracting State.1 Article 96, however, limits the availability of
the reservation to those Contracting States whose legislation requires contracts of sale to be concluded in or evidenced by writing.
2. As provided in the second sentence of article 12, and
as confirmed by both the drafting history of the provision2
and case law, article 12—unlike most provisions of the
Convention—cannot be derogated from.3
Sphere of application and effects
3. Both the language and the drafting history of article 12 confirm that, under the provision, an article 96
reservation operates only against the informality effects
of article 11, article 29, or Part II of this Convention;
thus article 12 does not cover all notices or indications
of intention under the Convention, but is confined to
those that relate to the expression of the contract itself,
or to its formation, modification or termination by
agreement.4
4. Article 12 provides that the Convention’s freedomfrom-form-requirements principle is not directly applicable
where one party has its relevant place of business in a State
that made a declaration under article 96,5 but different
views exist as to the further effects of such a reservation.
According to one view, the mere fact that one party has its
place of business in a State that made an article 96 reservation does not necessarily bring the form requirements of
that State into play;6 instead, the applicable form requirements—if any—will depend on the rules of private international of the forum. Under this approach, if PIL rules
lead to the law of a State that made an article 96 reservation, the form requirements of that State will apply; where,
on the other hand, the law of a contracting State that did
not make an article 96 reservation is applicable, the freedom-from-form-requirements rule of article 11 governs.7
The opposing view is that, if one party has its relevant
place of business in an article 96 reservatory State, writing
requirements apply.8
Notes
1
For this statement, albeit with reference to the draft provisions contained in the 1978 Draft Convention, see United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April 1980, Official Records, Documents of the Conference
and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981,  20.
2
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10  March–11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 20:
“Since the requirement of writing in relation to the matters mentioned in article 11 [draft counterpart of the Convention’s article 12] is
considered to be a question of public policy in some States, the general principle of party autonomy is not applicable to this article.
Accordingly, article 11 [draft counterpart of the Convention’s article 12] cannot be varied or derogated from by the parties.”
3
CLOUT case No. 482 [Cour d’appel, Paris, France, 6 November 2001], also published on the Internet at http://witz.jura.uni-sb.de/
CISG/decisions/061101v.htm; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12  July 2000], expressly stating that article 12—
as well as the final provisions—cannot be derogated from (see full text of the decision).
4
See United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 20.
5
See Rechtbank van Koophandel Hasselt, Belgium, 2 May 1995, published on the Internet at http://www.law.kuleuven.be/ipr/eng/
cases/1995-05-02.html .
Part one. Sphere of application and general provisions
6
49
Rechtbank Rotterdam, the Netherlands, 12 July 2001, Nederlands Internationaal Privaatrecht, 2001, No. 278.
Rechtbank Rotterdam, the Netherlands, 12 July 2001, Nederlands Internationaal Privaatrecht, 2001, No. 278; Hoge Raad, the Netherlands, 7 November 1997, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=333&step=FullText; CLOUT
case No.52 [Fovárosi Biróság Hungary 24 March 1992].
7
8
The High Arbitration Court of the Russian Federation, Arbitration, 16 February 1998, referred to on the Internet at http://cisg3w.
law.pace.edu/cases/980216r1.html; Rechtbank van Koophandel Hasselt, Belgium, 2 May 1995, published on the Internet at http://www.
law.kuleuven.be/ipr/eng/cases/1995-05-02.html.
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 13
For the purposes of this Convention “writing” includes telegram and telex.
Overview
1. The purpose of article 13 of the Convention, which is based on article 1 (3) (g) of
the 1974 UNCITRAL Convention on the Limitation Period in the International Sale of
Goods, is to ensure that communications taking the form of a telegram or telex are
treated as “writings”, and thus (in their form) can satisfy applicable writing requirements
if such exist.
Application
2. The provision has rarely been referred to in case law. One court, in deciding whether
avoidance of a lease contract via telefax met a writing requirement in applicable domestic
law, stated that, had the Convention governed, the telefax would be considered sufficient
on the basis of article 13; but the court also held that article 13 applied only to international sales contracts, and should not be extended by analogy to leases or other nonsales contracts.1 The same court later reaffirmed its view that article 13 should not be
applied by analogy, reasoning that the provision contains an exception and that exceptions must be interpreted restrictively.2
Notes
1
See Oberster Gerichtshof, Austria, 2 July 1993, published on the Internet at http://www.unilex.info/case.cfm?pid=1&do=case&id=
165&step=FullText.
2
Oberster Gerichtshof, Austria, 26 April 1997, published on the Internet at http://www.cisg.at/6_51296.htm.
Part two
formation of
the contract
Overview
State. CISG article 94 (2). Such a non-Contracting State
may, when it becomes a Contracting State, declare that the
Convention shall continue to be inapplicable to sales contracts (of the formation thereof) with persons in the earlierdeclaring Contracting State. CISG article 94 (3). Denmark,
Finland, Norway and Sweden made declarations that the
Convention—including its contract-formation rules—is
inapplicable with respect to contracts between parties
located in those states or in Iceland. When Iceland became
a Contracting State it declared that it would continue this
arrangement.
1. Part II of the Sales Convention sets out rules for the
formation of an international sales contract. Timing requirements for the application of these rules are set out in article  100  (a). Under the rules of Part II, a contract is
concluded when an acceptance of an offer becomes effective. CISG article 23. The first four articles of Part  II (articles 14-17) deal with the offer, while the following five
articles (articles  18-22) deal with the acceptance. The final
two articles (articles 23-24) address the time when a contract is concluded and when a communication “reaches”
the addressee, respectively. One court has described these
provisions as embodying “a liberal approach to contract
formation and interpretation, and a strong preference for
enforcing obligations and representations customarily relied
upon by others in the industry”.1
Exclusivity of Part II
5. Part II sets out rules for the conclusion of a contract.
Part II does not state that compliance with its provisions
is the exclusive way to conclude an enforceable contract
governed by the Sales Convention. Article 55 in Part III of
the Convention recognizes that a contract may be validly
concluded even though it does not expressly or implicitly
fix or make provision for determining the price. Several
cases have examined the relation of article 55 to the requirement in article 14 that a proposal to conclude a contract
must expressly or implicitly fix or make provision for determining the price. See the Digests for articles 14 and 55.
2. A number of decisions have applied the offer-acceptance paradigm of Part II to proposals to modify a sales
contract (article 29)2 or to proposals to terminate the contract.3 Several decisions have distinguished between the
conclusion of the sales contract and an agreement to arbitrate disputes arising under that contract.4
Permitted reservations by
Contracting States
6. The parties’ conduct may establish that they intended
a mutually-binding arrangement even if Part II does not
govern. One court, recognizing that Finland had made an
article 92 declaration, nevertheless applied the principles
underlying the Convention rather than national contract law
and found that the conduct of a Finnish seller and a German buyer evidenced an enforceable contract.10
3. A Contracting State may declare that it is not bound
by Part II of the Sales Convention. CISG article 92. Denmark, Finland, Iceland, Norway and Sweden have made
this declaration. Where this declaration comes into play, a
majority of decisions apply the forum’s rules of private
international law to determine whether the parties have
concluded a contract. The relevant national law may be
either domestic contract law (which will be the case if the
applicable national law is that of a declaring State)5 or the
Convention (which will be the case if the applicable
national law is that of a Contracting State).6 Several decisions do not go through a private international law analysis.
One decision expressly rejects a private international law
analysis and instead applies the principles underlying Part
II of the Convention.7 Several decisions apply Part II, without analysis, to a contract between a party with a place of
business in a Contracting State that has made a declaration
and one that has a place of business in a Contracting State
that has not done so.8 In the absence of a dispute about
whether a contract had been concluded, one court declined
to analyse the effect of article 92.9
7. Several decisions have recognized that one party’s
promise may be enforced under the applicable national law
doctrine of promissory estoppel. One court found that a
supplier would be bound by its promise to supply raw
materials when in reliance on this promise the promisee
sought and received administrative approval to manufacture
generic drugs.11 Another court considered a similar claim
but concluded that the party seeking to enforce a promise
had not established its case.12
Validity of contract;
formal requirements
4. Two or more Contracting States that have the same or
closely-related legal rules on sales matters may declare that
the Convention is not to apply to sales contracts or to their
formation where the parties have their places of business
in these States. CISG article 94 (1). A Contracting State
may also make such a declaration if it has the same or
closely-related legal rules as those of a non-Contracting
8. Part II governs the formation of the contract of sale
but, except as otherwise expressly provided by the Convention, is not concerned with the validity of the contract or
any of its provisions or of any usage. CISG article 4 (a).
Consequently, domestic law applicable by virtue of the
rules of private international law will govern issues of
validity. See paragraph 3 of the Digest for article 4.
53
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
9. The Convention expressly provides that a contract of
sale need not be concluded in writing and is not subject to
any other requirement as to form. CISG article 11. Thus
article 11 prevents the application of domestic law formality
requirements to the conclusion of a contract under the CISG.
See the paragraphs 1 and 8 of the Digest for article  11. A
Contracting State may declare that this rule does not apply
where any party has his place of business in that State. CISG
articles 12, 96. See also the Digest for article  12.
used by the parties in their prior dealings, or customary in
the trade.24 Several other decisions give no effect to standard terms when they are not translated into the language
of the other party.25 Another decision refers to the “general
principle” that ambiguities in the standard terms are to be
interpreted against the party relying upon them.26
10. Part II is silent on the need for “consideration” or a
“causa”. One case found, applying domestic law under article 4 (a) of the Convention, that a buyer seeking to enforce
a contract had alleged sufficient facts to support a finding
that there was “consideration” for an alleged contract.13
13. In a few Contracting States there is a recognized
usage of trade that gives effect to a letter of confirmation
sent by a merchant to another merchant notwithstanding
the recipient’s silence. The commercial letter of confirmation may conclude the contract or, if the contract had
already been concluded, establish the terms of the contract
in the absence of intentional misstatement by the sender or
prompt objection to its terms. Courts have disagreed about
the effect to be given to these usages when the transaction
is governed by the Convention. Several decisions have
refused to give effect to a local trade usage that would give
effect to the letter of confirmation because the usage was
not international.27 However, one court found, without
analysis of the scope of the trade usage, that the recipient
was bound,28 and another court gave effect to the usage,
under both paragraphs (1) and (2) of article  9, when the
seller and buyer each had its place of business in a jurisdiction that recognized such a usage.29 Another court applied
the contract formation provisions of the Convention to find
that the recipient of the letter of confirmation had accepted
its terms by accepting the goods.30 Yet another court concluded that the Convention was silent on the effect of a
confirmation letter that incorporated standard terms; the
court therefore applied domestic law to determine whether
the standard terms were applicable.31 Even if a letter of
confirmation is not given full effect, it may be relevant for
the evaluation of evidence of the parties’ intent.32
Incorporating standard terms
11. The Convention does not include special rules addressing the legal issues raised by the use of standard contract
terms prepared in advance for general and repeated use.14
Some Contracting States have adopted special legal rules
on the enforceability of standard terms15. Notwithstanding
these special rules, a majority of courts apply the provisions
of Part II of the Convention and its rules of interpretation
in article 8 to determine whether the parties have agreed
to incorporate standard terms into their contract.16 Several
of these decisions expressly conclude that the Convention
displaces recourse to national law on the issue of whether
the parties have agreed to incorporate standard terms into
their contract.17 Nevertheless, several courts have applied
the special national legal rules to determine the enforceability of standard terms in contracts otherwise governed by
the Convention,18 while several others have noted that the
standard terms would be enforceable under either national
law or the Convention.19 Several decisions recognize, however, that the Convention does not govern the substantive
validity of a particular standard term—a matter left to
applicable national law by virtue of article 4 (a).20
12. Several decisions rely on the Convention’s rules on
interpretation to require the user of standard terms to send
a copy of the terms to the other party or otherwise make
them reasonably available.21 One decision expressly rejects
the proposal that a party has an obligation to search out
standard terms referred to by the other party on the grounds
that to do so would contradict the principle of good faith
in international trade and the parties’ general obligations to
cooperate and to share information.22 A decision held that
a seller’s standard terms were incorporated into the contract
where the buyer was familiar with those terms from the
parties’ prior dealings and the seller had expressly referred
to the terms in his offer.23 Another decision relies on article  24 to conclude that standard terms do not “reach” the
addressee unless in a language agreed to by the parties,
Commercial letters of confirmation
Interpretation of statements or conduct
14. A person may make a proposal for concluding a contract or may accept such a proposal by a statement or by
conduct. CISG articles 14 (1) and 18 (1). Numerous cases
apply the rules of article 8 to the interpretation of a party’s
statements or other conduct before the conclusion of a
contract.33
15. Several courts have had to identify the party proposing to conclude a contract governed by the Convention.
They have usually done so by interpreting the statements
or conduct of the parties in accordance with article 8 of
the Convention.34 The issue may also arise when an agent
acts for a principal.35 Whether a person is entitled to bring
a legal action to enforce contractual obligations is a distinct
issue.36
Notes
1
[Federal] Southern District Court of New York, United States, 10 May 2002, Federal Supplement (2nd Series) 201, 236 at 283.
2
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision); CLOUT
case No. 347 [Oberlandesgericht Dresden, Germany, 9  July 1998]; CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland, 10 July 1996]; CLOUT case No. 133 [Oberlandesgericht München, Germany, 8 February 1995] (see full text of the decision);
CLOUT case No. 203 [Cour d’appel, Paris, France, 13 December 1995].
Part two. Formation of the contract
55
3
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994]; CIETAC award No. 75, 1 April 1993, Unilex, also
available on the INTERNET at http://www.cisg.law.pace.edu/cgi-bin/isearch..
4
Tribunal Supremo, Spain, 26 May 1998, available on the Internet at http://www.uc3m.es/cisg/respan10.htm (conclusion of sales contract
established but not agreement to arbitrate); Tribunal Supremo, Spain, 17 February 1998, available on the Internet at http://www.uc3m.
es/cisg/respan8.htm (conclusion of sales contract established under Sales Convention but agreement to arbitrate not established under
1958 New York Convention).
5
Turku Hovioikeus (Court of Appeal), Finland, 12 April 2002, available on the Internet at http://cisgw3.law.pace.edu/cases/020412f5.
html (transaction between Finnish seller and German buyer; Finnish law applicable); CLOUT case No. 143 [Fovárosi Biróság, Hungary
21  May 1996] (transaction between Swedish seller and Hungarian buyer; Swedish law applicable); CLOUT case No. 228 [Oberlandesgericht Rostock, Germany, 27 July 1995] (transaction between Danish seller and German buyers; Danish law applicable). See also
CLOUT case No. 419 [Federal District Court, Northern District of Illinois, United States, 27  October 1998] (transaction between Swedish seller and US buyer; although US state law would apply to contract formation, the issue before the court was whether domestic
parol evidence rule excluded testimony and art. 8 (3)—in Part I—preempted that rule).
6
CLOUT case No. 309 [Østre Landsret Denmark, 23 April 1998] (transaction between Danish seller and French buyer; French law
applicable); CLOUT case No. 301 [Arbitration—International Chamber of Commerce No. 7585 1992] (transaction between Italian seller
and Finnish buyer; Italian law applicable).
7
CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March 1995] (contract between Finnish seller and German buyer).
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (contract between Danish seller and German buyer)
(see full text of the decision); Chansha Intermediate Peoples’ Court Economic Chamber, China, 1995, Unilex (negotiations between
Chinese seller and Swedish buyer); CLOUT case No. 121 [Oberlandesgericht Frankfurt a.M., Germany, 4  March 1994] (negotiations
between German seller and Swedish buyer).
8
9
CLOUT case No. 201 [Richteramt Laufen des Kantons Berne, Switzerland, 7 May 1993] (contract between Finnish seller and German buyer) (see full text of the decision). See also Hjesteret (Supreme Court), Denmark, 15 February 2001, available on the Internet at
http://www.cisg.dk/hdl5022001danskversion.htm (transaction between Italian seller and Danish buyer; issue of whether court had
jurisdiction resolved by reference to art. 31).
10
CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March 1995].
[Federal] Southern District Court of New York, United States, 21 August 2002, 2002 Westlaw 1933881, 2002 US Dist. LEXIS 15442
(accepting that claim stated an enforceable cause of action for promissory estoppel when it alleged breach of “(1) a clear and definite
promise, (2)  the promise is made with the expectation that the promisee will rely on it, (3) the promisee in fact reasonably relied on
the promise, and (4) the promisee suffered a definite and substantial detriment as a result of the reliance”).
11
12
CLOUT case No. 173 [Fovárosi Biróság,, Hungary, 17 June 1997] (considering and rejecting a claim that there had been a breach
of promise that would be enforceable if the promise reasonably induced the other party to change its position in reliance on the
promise).
13
[Federal] Southern District Court of New York, United States, 10 May 2002, Federal Supplement (2nd Series) 201, 236 at 283 ff.
(quoting definition of consideration as “bargained-for exchange of promises or performance”).
14
15
For a definition of “standard terms” see art. 2.19 (2) of the UNIDROIT Principles of International Commercial Contracts (1994).
See, e.g., the German Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen (AGBG) [Unfair Contract Terms Act].
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision, approving reasoning of lower
appeals court); CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Neue Juristische Wochenschrift, 2001,
370 ff.; CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (standard terms in purported acceptance);
Rb  ‘s-Hertogenbosch, Netherlands, 2 October 1998, Unilex (in ongoing relationship buyer not bound by seller’s amended general conditions because seller failed to inform buyer of amendment); CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit,
United States, 29 June 1998] (standard terms on back of seller’s form not enforceable if both parties know buyer did not intend to
incorporate them in contract) (see full text of the decision); CLOUT case No. 272 [Oberlandesgericht Zweibrücken, Germany, 31  March
1998] (applying art. 8 to determine whether standard terms incorporated in contract); CLOUT case No. 232 [Oberlandesgericht München,
Germany, 11 March 1998] (buyer, by performing contract, accepted seller’s standard terms that modified buyer’s offer) (see full text of
the decision); CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997]; CLOUT case No. 176 [Oberster Gerichtshof,
Austria, 6 February 1996] (buyer did not agree to ‘framework agreement’ drafted by seller to govern subsequent sales); CLOUT case
No. 203 [Cour d’appel, Paris, France, 13 December 1995] (standard term on back of form not binding on recipient); Tribunal Commercial Nivelles, Belgium, 19 September 1995, Unilex (buyer should have been aware that seller’s offers incorporated standard terms);
Cámara Nacional de Apelaciones en lo Comercial, Argentina, 14 October 1993, Unilex (standard terms on back of “pro forma” invoice
accepted by other party when recipient objected to one part of invoice but not to standard terms). See also Rechtbank van Koophandel
Hasselt, Belgium, 18 October 1995 (seller’s standard terms in invoice sent with goods a unilateral act to which buyer had not consented).
For analysis of the effect of conflicting terms when each party uses standard terms (the so-called “battle of the forms”), see the Commentary to article 19.
16
17
CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Neue Juristische Wochenschrift, 2001, 370 ff.; CLOUT
case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997]. See also CLOUT case No. 541 [Oberster Gerichtshof, Austria,
14  January 2002 (approving reasoning of lower appeals court that applied Convention provisions exclusively in determining whether
seller’s standard terms were incorporated into the contract) (see full text of the decision).
18
CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (applying German law as the law applicable by virtue
of the forum’s rules of private international law) (see full text of the decision); Landgericht Duisburg, Germany, 17 April 1996, Unilex
(applying Italian law as the law applicable by virtue of the forum’s private international law rules); Landgericht München, Germany,
29  May 1995, Unilex (applying German law as the law applicable by virtue of the forum’s rules of private international law); Rechtbank
van Koophandel Hasselt, Belgium, 24 January 1995, Unilex (applying German law as the law applicable by virtue of the forum’s private
international law rules).
56
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
19
CLOUT case No. 361 [Oberlandesgericht Braunschweig, Germany, 28 October 1999] (standard terms enforceable under both applicable domestic law and the Convention) (see full text of the decision); Gerechtshof ’s-Hertogenbosch, Netherlands, 24 April 1996, Unilex
(standard terms enforceable under both applicable domestic law and the Convention).
20
CLOUT case No. 428 [Oberster Gerichtshof, Austria, 7 September 2000], also in Unilex (validity of standard terms determined by
national law subject to condition that any derogation from Convention’s fundamental principles ineffective even if valid under applicable
national law); CLOUT case No. 272 [Oberlandesgericht Zweibrücken, Germany, 31 March 1998] (national law, rather than Convention,
determines validity of exemption clause in standard terms); CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997]
(national law governs validity of standard term limiting liability); Amtsgericht Nordhorn, Germany, 14 June 1994, Unilex (standard terms
on back of form incorporated in contract but validity of terms to be determined under domestic law). See also CLOUT case No. 230
[Oberlandesgericht Karlsruhe, Germany, 25  June 1997] (citing both art. 4 and art. 14 ff., court leaves open issue of whether standard
terms were enforceable). See generally paragraph 1 of the Digest for article 4.
21
CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Neue Juristische Wochenschrift, 2001, 370 ff.; Hof
Arnhem, Netherlands, 27 April 1999, Unilex (deposit of standard terms in Dutch court did not bind non-Dutch party but standard terms
printed in Dutch on back of invoice are binding); Rb ’s-Hertogenbosch, Netherlands, 2 October 1998, Unilex (if numerous prior sales
between parties have been subject to the general conditions of one party and that party amends those general conditions, that party must
inform the other party of the changes).
22
CLOUT case No. 445 [Bundesgerichtshof, Germany, 31 October 2001], also in Neue Juristische Wochenschrift, 2001, 370 ff.
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002 (see full text of the decision approving reasoning of lower
appeals court).
23
24
CLOUT case No. 132 [Oberlandesgericht Hamm, Germany, 8 February 1995] (discussion of “language risk” in light of art. 8).
CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997] (in transaction between German seller and Italian
buyer seller’s standard terms in German language not incorporated in contract and validity of those in Italian language determined by
German law as the as the law applicable by virtue of the forum’s private international law rules); Amtsgericht Kehl, Germany, 6 October
1995, Unilex (standard terms in German language only sent by a German buyer to an Italian seller).
25
26
CLOUT case No. 165 [Oberlandesgericht Oldenburg, Germany, 1 February 1995] (see full text of the decision).
CLOUT case No. 347 [Oberlandesgericht Dresden, Germany, 9 July 1998]; CLOUT case No. 276 [Oberlandesgericht Frankfurt a.
M., Germany, 5 July 1995]. See also Landgericht Duisburg, Germany, 17 April 1996, Unilex (doubts existence of international usage
recognizing incorporation of standard terms into contract by letter of confirmation); Opinion of Advocate General Tesauro, EC Reports,
1997, I-911 ff. (adopting by analogy article 9 (2)’s standard for an “international usage”).
27
28
Oberlandesgericht Saarbrücken, Germany, 14 February 2001, Unilex.
29
CLOUT case No. 95 [Zivilgericht Basel-Stadt, Switzerland, 21 December 1992].
CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany. 13 January 1993] (citing art.  18 (1)) (see full text of the
decision).
30
31
Arrondissemenetsrechttbank Zutphen, Netherlands, 29 May 1997, Unilex. See also Rechtbank van Koophandel Hasselt, Belgium,
24  January 1995, Unilex (German law applicable to issue of whether standard terms referred to in letter of confirmation are effective).
32
CLOUT case No. 276 [Oberlandesgericht Frankfurt a.M., Germany, 5 July 1995].
See, e.g., CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7 December 1999] (art. 8) (see
full text of the decision); CLOUT case No. 306 [Oberster Gerichtshof, Austria, 11 March 1999] (citing art. 8 (1)); CLOUT case No.  413
[Federal District Court, Southern District of New York, United States, 6 April 1998] (art. 8 (3)) (see full text of the decision); Hoge
Raad, Netherlands, 7 November 1997, Unilex (arts. 8 (1), (2)); CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997]
(art. 8 (2)); Landgericht Oldenburg, Germany, 28 February 1996, Unilex (art. 8 (2)); CLOUT case No. 334 [Obergericht des Kantons
Thurgau, Switzerland, 19 December 1995] (art. 8 (1), (2) and (3)); CLOUT case No.  308 [Federal Court of Australia, 28 April 1995]
(arts. 8 (1), (2)) (see full text of the decision); CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (art. 8 (2),
(3)); CLOUT case No. 23 [Federal District Court, Southern District of New York, United States, 14 April 1992] (art.  8  (3)); CLOUT
case No. 227 [Oberlandesgericht Hamm Germany, 22  September 1992] (art.  8 (2)).
33
34
Oberlandesgericht Frankfurt, Germany, 30 August 2000, Unilex (citing art. 8, court states that invoice intended by sender to be offer
on its behalf rather than on behalf of its parent company with whom recipient had been dealing did not bind the recipient who was
unaware of this intent and it was not established that a reasonable person in position of recipient would so understand the communication); Oberlandesgericht Stuttgart, Germany, 28 February 2000, available on the Internet at http://www.cisg-online.ch/cisg/urteile/583.htm
(citing art. 8 (1) and (3), court states that negotiations and subsequent conduct of the parties indicated that buyer intended to conclude
the contract with foreign company rather than local company with same Board members); Hoge Raad, Netherlands, 7 November 1997,
Unilex (citing arts. 8 (1) and (2)), court concludes no contract had been concluded when a person, intending to make an offer, made a
payment to a seller who did not know and could not have been aware that the payor was making a payment on its own behalf rather
than on behalf of a buyer with whom the seller had ongoing business relations and reasonable person in same circumstances would not
so understand communication). See also Comisión para la Protección del Comercio Exterior de México, Mexico, 29 April 1996, Unilex
(without express reference to art. 8, commission refers to surrounding circumstances to identify seller); CLOUT case No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December 1995] (citing art. 14 (1), court concludes that buyer’s unsigned fax to seller
clearly indicated an intent to purchase the equipment and that seller thought buyer rather than sister company was the purchaser); CLOUT
case No. 276 [Oberlandesgericht Frankfurt a.M., Germany, 5 July 1995] (circumstances establish defendant and not unnamed third person
was party to contract) (see full text of the decision); Landgericht Memmingen, Germany, 1 December 1993, Unilex (citing art. 11, court
applies forum’s rule on proof as to which company seller had contracted with); CLOUT case No. 95 [Zivilgericht Basel-Stadt, Switzerland, 21 December 1992] (defendant bound even if she was subject to control of another firm) (see full text of the decision).
CLOUT case No. 239 [Oberster Gerichtshof, Austria, 18 June 1997] (remand to determine whether purported buyer was an agent);
CLOUT case No. 416 [Minnesota [State] District Court, United States, 9 March 1999] (finding from documents and circumstances that
35
Part two. Formation of the contract
57
defendant was a seller rather than an agent); CLOUT case No. 334 [Obergericht des Kantons Thurgau, Switzerland, 19 December 1995]
(citing art. 8, court concludes manufacturer rather than its distributor was party to contract); CLOUT case No. 5 [Landgericht Hamburg,
Germany, 26  September 1990] (citing art. 8 (1), court states that seller did not know and could not have been aware of buyer’s intent
to refer to “AMG GmbH” when buyer referred to “AMG Import Export”, a non-existent company; agent bound under applicable law of
agency).
36
See, e.g., CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997] (lessee, to whom the buyer/lessor assigned
its rights as buyer, avoided contract); CLOUT case No. 334 [Obergericht des Kantons Thurgau, Switzerland, 19 December 1995]
(although manufacturer rather than its distributor was original party to contract, distributor could enforce the contract because manufacturer had assigned its claim for breach to distributor); CLOUT case No. 132 [Oberlandesgericht Hamm, Germany, 8 February 1995]
(assignee enforces seller’s claim).
58
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 14
(1) A proposal for concluding a contract addressed to one or more specific persons
constitutes an offer if it is sufficiently definite and indicates the intention of the offeror
to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the
goods and expressly or implicitly fixes or makes provision for determining the quantity
and the price.
(2) A proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary is clearly indicated
by the person making the proposal.
Overview
1. Article 14 sets out the conditions on which a proposal
to conclude a contract constitutes an offer that, if accepted
by the addressee, will lead to the conclusion of a contract
under the Convention. This article has been applied to
determine whether a statement or other conduct rejecting
an offer constitutes a counter-offer (see article 19 (1)).1 The
principles set out in this article—i.e., the person making
the proposal must intend to be bound, and the proposal
must be sufficiently definite—have been applied, together
with those in other articles of Part II, notwithstanding that
Part II was not applicable by virtue of a declaration under
article 92.2 For discussion of whether Part II of the Convention provides the exclusive way to conclude a contract
governed by the Convention, see the Digest for Part II.
2. The identity of the person making a proposal or of the
person to which the proposal is made may be uncertain.
Decisions have applied article 14 and the rules of interpretation in article 8 to this issue.3
Addressees of proposal
3 The first sentence of paragraph (1) focuses on proposals that are addressed to one or more specific persons.
Under the applicable law of agency, the maker of an offer
addressed to an agent may be bound by the acceptance of
the principal.4 One decision states that article 14 (1) rather
than the law of agency governs the issue of identifying
whether a manufacturer or its distributor is party to the
contract.5
indicate the intention of the proponent to be bound if the
addressee accepts the proposal. The intent may be shown
by interpretation of a statement or act in accordance with
paragraphs (1) or (2) of article 8.6 By virtue of paragraph (3) of article 8, this intent may be established by all
the relevant circumstances, including statements or other
conduct during negotiations and the conduct of the parties
after the alleged conclusion of the contract.7 A buyer was
found to have indicated its intent to be bound when it sent
the seller an “order” that stated “we order” and that called
for “immediate delivery”.8 A communication in the English
language sent by a French seller to a German buyer was
interpreted by the court as expressing the seller’s intent to
be bound.9 Where both parties had signed an order designating a computer programme and its price, the buyer was
unable to establish that the order merely indicated an intention to describe details of a contract to be concluded at a
later time rather than an intention to conclude the contract
by means of the order.10 Another buyer’s order specifying
two sets of cutlery and the time for delivery was likewise
interpreted as indicating an intent to be bound in case of
acceptance, notwithstanding buyer’s argument that it had
merely proposed future purchases.11
Definiteness of proposal
Indication of intent to be bound
by acceptance
6. To be deemed an offer, a proposal to conclude a contract not only must indicate an intent to be bound by an
acceptance but also must be sufficiently definite.12 The second sentence of paragraph (1) provides that a proposal is
sufficiently definite if it indicates the goods and expressly
or implicitly fixes or makes provision for determining the
quantity and the price. Practices established between the parties may supply the details of quality, quantity and price left
unspecified in a proposal to conclude a contract.13 Decisions
have applied the rules of interpretation in article 8 to determine
whether a communication or act is sufficiently definite. One
court has concluded that, if the intent to be bound by an
acceptance is established, a proposal is sufficiently definite
notwithstanding the failure to specify the price.14
5. The first sentence of paragraph (1) provides that, to
constitute an offer, a proposal to conclude a contract must
7. Article 14 does not require that the proposal include all
the terms of the proposed contract.15 If, for example, the
4. Paragraph (2) provides for proposals other than ones
addressed to one or more specific persons. There are no
reported decisions applying paragraph (2)
Part two. Formation of the contract
parties have not agreed on the place of delivery16 or the mode
of transportation17 the Convention may fill the gap.
Indication of the goods
8. To be sufficiently definite under the second sentence
of paragraph (1) a proposal must indicate the goods. There
is no express requirement that the proposal indicate the
quality of the goods. One court found that a proposal to
buy “chinchilla pelts of middle or better quality” was sufficiently definite because a reasonable person in the same
circumstances as the recipient of the proposal could perceive the description to be sufficiently definite.18 Another
court assumed that an offer to purchase monoammoniumphosphate with the specification “P 205 52% +/- 1%, min
51%” was a sufficiently definite indication of the quality
of the goods ordered.19 If, however, the parties are unable
to agree on the quality of the goods ordered there is no
contract.20
59
varying quality to be sold “at a price between 35 and
65  German Marks for furs of medium and superior quality”
because the price could be calculated by multiplying the
quantity of each type by the relevant price;29 no specific
agreement on price where a course of dealing between the
parties established the price;30 a proposal that prices were
to be adjusted to reflect market prices;31 agreement on a
provisional price to be followed by establishment of a
definitive price after the buyer resold the goods to its customer, because such an arrangement was regularly observed
in the trade.32
12. The following proposals were found to be insufficiently definite: a proposal that provided for several alternative configurations of goods but did not indicate a proposed
price for some elements of the alternative proposals;33 an
agreement that the parties would agree on the price of additional goods ten days before the new year.34
13. One court has concluded that, if the intent to be
bound by an acceptance is established, a proposal is sufficiently definite notwithstanding the failure to specify the
price.35
Fixing or determining the quantity
9. To be sufficiently definite under the second sentence
of paragraph (1) a proposal must expressly or implicitly
fix or make provision for determining the quantity. The
following quantity designations have been found sufficiently definite: a reference to “700 to 800 tons” of natural
gas when usage in the natural gas trade treated the designation as adequate;21 “a greater number of Chinchilla furs”
because the buyer accepted the furs tendered without objection;22 “three truck loads of eggs” because the other party
reasonably understood or ought to have understood that the
trucks should be filled to their full capacity;23 “20 truck
loads of tinned tomato concentrate” because the parties
understood the meaning of these terms and their understanding was consistent with the understanding in the
trade;24 “10,000 tons +/-5%”.25 A court has found that a
buyer’s proposal that expressly designated no specific quantity was sufficiently definite because, under an alleged customary usage, the proposal would be construed as an offer
to purchase the buyer’s needs from the offeree.26 Another
court found that the seller’s delivery of 2,700 pairs of shoes
in response to the buyer’s order of 3,400 pairs was a counter-offer accepted by the buyer when it took delivery; the
contract was therefore concluded for only 2,700  pairs.27
10. A distribution agreement specifying terms on which
the parties would do business and obliging the buyer to
order a specified amount was found not sufficiently definite
because it did not state a specific quantity.28
Fixing or determining the price
11. To be sufficiently definite under the second sentence
of paragraph (1) a proposal must expressly or implicitly
fix or make provision for determining not only the quantity
but also the price. Proposals with the following price designations have been found sufficiently definite: pelts of
Relevance of price formula in article 55
14. Article 14 states that a proposal to conclude a contract
is sufficiently definite if it “fixes or makes provision for
determining” the price. Article 55 provides a price formula
that applies “[w]here a contract has been validly concluded
but does not expressly or implicitly fix or make provision
for determining the price”. The price supplied by article  55
is “the price generally charged at the time of the conclusion
of the contract for such goods sold under comparable
circumstances in the trade concerned.”
15. Most decisions have declined to apply article 55.36
Several have concluded that article 55 was not applicable
because the parties had expressly or implicitly fixed or
made provision for determining the price, thereby satisfying the definiteness requirement set out in article 14 (1).37
One tribunal found that where the parties had agreed to fix
the price at a later time but had not done so, the proposal
was not sufficiently definite under article 14 (1) and that
article 55 was not applicable because of the parties’ agreement to fix the price at a later time.38 In another case where
the proposal to conclude a contract failed to fix the price,
the court declined to apply article 55 to fix the price
because there was no market price for the airplane engines
concerning which the parties were negotiating.39 Another
court also found that, to the extent the price formula of
article 55 might be applicable, the parties had derogated
from that formula by their agreement.40
16. When enforcing an agreement notwithstanding the
fact that the parties had not fixed the price in their original
negotiations, one court has invoked article 55. In that case,
the court stated that the price set out in a corrected invoice
issued by the seller at the request of the buyer and to which
the buyer did not object was to be interpreted as the price
charged under comparable circumstances in the trade concerned, as provided in the article 55 formula.41
60
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Notes
1
CLOUT case No. 121 [Oberlandesgericht Frankfurt, Germany, 4 March 1994] (a buyer’s purported acceptance that included both
screws for which the seller had stated the price and additional screws for which the seller had not stated the price was a counter-proposal
that was not sufficiently definite because the price of the latter screws were not fixed or determinable). See also CLOUT case No. 189
[Oberster Gerichtshof, Austria, 20 March 1997] (stating that a counter-offer must satisfy the conditions of article 14).
2
CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March 1995] (applying the general principles of Part II rather than
the national law applicable by virtue of private international law to transaction between Finnish seller and German buyer).
3
CLOUT case No. 429 [Oberlandesgericht Frankfurt, Germany, 30 August 2000], also in Unilex; Oberlandesgericht Stuttgart, Germany,
28 February 2000, available on the Internet at http://www.cisg-online.ch/cisg/urteile/583.htm; Hoge Raad, Netherlands, 7 November 1997,
Unilex; CLOUT case No. 334 [Obergericht des Kantons Thurgau, Switzerland, 19 December 1995]; CLOUT case No. 330 [Handelsgericht
des Kantons St. Gallen, Switzerland, 5 December 1995]; CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990].
See paragraph 15 of the Digest for Part II.
CLOUT case No. 239 [Oberster Gerichtshof, Austria, 18 June 1997] (if offeror knew that addressee was acting as agent, then offeror
should expect proposal to be transmitted to the principal; if offeror did not know or was unaware that addressee was an agent, the offeror
was not bound by principal’s acceptance; case remanded to determine whether the addressee was agent and whether offeror knew of
this).
4
CLOUT case No. 334 [Obergericht des Kantons Thurgau, Switzerland, 19 December 1995] (interpreting the statements and acts of
the parties in accordance with art. 8, manufacturer rather than its dealer was party to contract; manufacturer had, however, assigned its
claim for breach to dealer).
5
6
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (see full text of the decision).
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997] (stressing the parties’ conduct subsequent to conclusion
of the contract).
7
8
CLOUT case No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December 1995] (see full text of the decision).
9
Oberlandesgericht Hamburg, Germany, 4 July 1997, Unilex (“We can only propose you”; “First truck could be delivered”).
10
CLOUT case No. 131 [Landgericht München, Germany, 8 February 1995].
11
CLOUT case No. 217 [Handelsgericht des Kantons Aargau Switzerland 26 September 1997].
12
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7  December 1999] (conditions satisfied).
CLOUT case No. 52 [Fovárosi Biróság, Hungary, 24 March 1992] (citing art. 9 (1), court concludes that prior sales transactions
between the parties supplied details unstated in telephone order).
13
14
CLOUT case No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December 1995] (fax “ordering” software devices
sufficiently definite notwithstanding failure to mention price).
15
See also CLOUT case No. 131 [Landgericht München, Germany, 8 February 1995] (contract for purchase of software enforceable
even if parties intended further agreement with respect to use of software).
16
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (art. 31 (a) applies when buyer unable to establish parties
agreed on different place).
17
CLOUT case No. 261[Bezirksgericht der Sanne, Switzerland, 20 February 1997] (seller deemed authorized to arrange transportation
under art. 32 (2) when buyer was unable to establish that parties agreed on transport by truck).
18
CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994].
CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997] (remanding to lower court, however, to determine whether an
apparently contradictory response was sufficiently definite).
19
20
CLOUT case No. 135 [Oberlandesgericht Frankfurt a.M., Germany 31 March 1995] (no agreement on quality of test tubes).
21
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
22
CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (citing art. 8 (2), (3)) (see full text of the decision).
23
Landgericht Oldenburg, Germany, 28 February 1996, Unilex (citing art. 8 (2)).
24
Oberlandesgericht Hamburg, Germany, 4 July 1997, Unilex.
CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997] (remanding to lower court to determine whether other
elements of acceptance were sufficiently definite).
25
26
CLOUT case No. 579 [Federal] Southern District Court of New York, United States, 10 May 2002, Federal Supplement (2nd Series)
201, 236 ff.
27
CLOUT case No. 291 [Oberlandesgericht Frankfurt a.M., Germany, 23 May 1995].
CLOUT case No. 187 [Federal District Court, Southern District of New York, United States, 23  July 1997] (see full text of the
decision).
28
29
CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994].
30
CLOUT case No. 52 [Fovárosi Biróság, Hungary, 24 March 1992] (citing art. 9 (1)).
CLOUT case No. 155 [Cour de Cassation. France, 4 January 1995], affirming, CLOUT case No.  158 [Cour d’appel, Paris, France,
22 April 1992] (“à revoir en function de la baisse du marché”).
31
32
ICC award No. 8324, 1995, Unilex.
Part two. Formation of the contract
33
61
CLOUT case No. 53 [Legfelsóbb Biróság, Hungary, 25 September 1992] (see full text of the decision).
CLOUT case No. 139 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and
Industry, Russian Federation, award in case No. 309/1993 of 3 March 1995]; Federation Chamber of Commerce and Industry, Russian
Federation, award in case No. 304/1993 of 3 March 1995, published in Rozenberg, Practika of Mejdunarodnogo Commercheskogo
Arbitrajnogo Syda: Haychno-Practicheskiy Commentariy 1997, No. 21 [46–54] (citing art. 8).
34
35
CLOUT case No. 330 [Handelsgericht des Kantons St. Gallen, Switzerland, 5 December 1995] (fax “ordering” software devices
sufficiently definite notwithstanding failure to mention price).
36
See also Oberlandesgericht Frankfurt a.M., Germany, 15 March 1996, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/284.htm (citing articles 14 and 55 when expressing doubt parties had undertaken obligations), affirmed, CLOUT case No. 236
[Bundesgerichtshof, VIII ZR 134/96, 23 July 1997] (no citation to articles 14 or 55); CLOUT case No. 410 [Landgericht Alsfeld, Germany, 12  May 1995] (court indicates that buyer did not allege circumstances from which a lower price could be established in accordance
with article 55) (see full text of the decision).
37
CLOUT case No. 343 [Landgericht, Darmstadt, Germany 9 May 2000] (parties’ agreement as to price enforceable even if price different from that of the market); CLOUT case No. 106 [Oberster Gerichtshof, Austria, 10 November 1994] (transaction between a German
seller and an Austrian buyer; parties had fixed the price in a contract concluded by offer and acceptance; the court therefore reversed
an intermediate court’s application of article 55).
38
CLOUT case No. 139 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and
Industry, Russian Federation, award in case No. 309/1993 of 3 March 1995] (transaction between a Ukrainian seller and an Austrian
buyer; court found that buyer may have separate claim for seller’s failure to propose a price during the designated time).
39
CLOUT case No. 53 [Legfelsóbb Biróság,, Hungary, 25 September 1992] (transaction between a U.S. seller and a Hungarian
buyer).
40
CLOUT case No. 151 [Cour d’appel, Grenoble, France, 26 February 1995] (buyer had accepted invoices with higher than market
prices).
41
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland 3 July 1997] (transaction between a Dutch seller and Swiss buyer;
buyer’s subsequent conduct interpreted as establishing buyer’s intent to conclude a contract).
62
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 15
(1) An offer becomes effective when it reaches the offeree.
(2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches
the offeree before or at the same time as the offer.
Overview–Article 15 (1)
1. Paragraph (1) of article 15 provides that an offer becomes effective when it reaches the offeree. Article 24 defines
when a revocation “reaches” the offeree. Although paragraph (1) has been cited1, no reported decision has interpreted it.
Overview–Article 15 (2)
2. Paragraph (2) provides that an offeror may withdraw its offer if the withdrawal reaches the offeree before or at the
same time as the offer. After the offer reaches the offeree, the offeror may no longer withdraw the offer, but may be entitled
to revoke the offer in accordance with article 16. There are no reported cases applying paragraph (2).
Notes
1
CLOUT Case No. 430 [Oberlandesgericht München, Germany, 3 December 1999], see also Unilex (citing arts. 14, 15(1), 18 and
23); CLOUT case No. 308 [Federal Court of Australia, 28 April 1995] (citing arts. 8, 11, 15 (1), 18 (1) and 29 (1) when holding that
parties had concluded contract with a retention of title clause). The following decisions cite article 15 in general, but because they do
not involve withdrawal of an offer—the issue addressed in article 15(2)—the citations effectively refer to paragraph (1) of article 15:
CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (citing arts. 14, 15 and 18 when finding that parties had
concluded a contract); Landgericht Oldenburg, Germany, 28  February 1996, Unilex (citing arts. 14, 15, 16, 17, 18 and 19); CLOUT case
No. 291 [Oberlandesgericht Frankfurt a.M., Germany, 23 May 1995] (citing arts. 14, 15, 18 (3), 19 (1) and (3)) (see full text of the
decision); Landgericht Krefeld, Germany, 24 November 1992, Unilex (citing arts. 15 and 18).
Part two. Formation of the contract
63
Article 16
(1) Until a contract is concluded an offer may be revoked if the revocation reaches
the offeree before he has dispatched an acceptance.
(2)However, an offer cannot be revoked:
(a) If it indicates, whether by stating a fixed time for acceptance or otherwise,
that it is irrevocable; or
(b) If it was reasonable for the offeree to rely on the offer as being irrevocable
and the offeree has acted in reliance on the offer.
Overview—Article 16 (1)
1. Paragraph (1) of article 16 sets out rules for the effective revocation of an offer. “Revocation” of an offer under
article 16 (1) is distinguished from “withdrawal” of an offer
under article 15 (2): withdrawal refers to a retraction of an
offer that reaches the offeree before or at the same time as
the offer reaches the offeree, whereas revocation refers to
a retraction of an offer that reaches the offeree after the
offer has reached the offeree.1 Until a contract is concluded,
article 16 (1) empowers an offeror to revoke the offer provided the revocation reaches the offeree before he has dispatched an acceptance, unless the offer cannot be revoked
by virtue of article 16 (2). Under articles 18 and 23, a
contract is not concluded until the offeree’s indication of
assent reaches the offeror (except where article 18  (3)
applies); thus the rule of article 16 (1) precluding revocation from the time an acceptance is dispatched may block
revocation for a period before the contract is concluded.
Although there have been citations to article 16,2,there are
no reported cases interpreting paragraph (1).
Overview—Article 16 (2)
2. Subparagraph (a) of paragraph (2) provides that an
offer cannot be revoked if it indicates that it is irrevocable,
whether by stating a fixed time for acceptance or otherwise.
There are no reported cases applying this subparagraph.
3. Subparagraph (b) of paragraph (2) provides that an offer
cannot be revoked if the offeree relied on the offer and it was
reasonable for him to do so. This subparagraph has been cited
as evidence of a general principle of estoppel (“venire contra
factum proprium”).3 It has also been held that domestic legal
rules on promissory estoppel are not pre-empted except when
the Sales Convention provides the equivalent of promissory
estoppel, as it does in subparagraph (b).4
Notes
1
Article 24 defines when an offer or other expression of intention—presumably including a withdrawal or a revocation of an offer—
“reaches” the offeree.
2
The following decision cites article 16 but because the case did not involve irrevocability of the offer—see para. 2—the citation
effectively refers to paragraph (1) of article 16: Landgericht Oldenburg, Germany, 28 February 1996, Unilex (citing arts. 14, 15, 16, 17,
18 and 19).
CLOUT case No. 94 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft-Wien, Austria,
15  June 1994] (seller’s continued requests for information about complaints induced buyer to believe that seller would not raise defence
that notice of nonconformity was not timely).
3
4
CLOUT case No. 579 [Federal] Southern District Court of New York, United States, 10 May 2002, Federal Supplement (2nd Series)
201, 236 (finding limited to scope of promissory estoppel as claimed by buyer).
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 17
An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror.
Overview
1. Article 17 states that an offer terminates when a rejection reaches the offeror. This is true whether or not the offer is
irrevocable. Article 24 defines when a revocation “reaches” the offeror. Although article 17 has been cited,1 there are no
reported cases interpreting it.
Notes
1
Landgericht Oldenburg, Germany, 28 February 1996, Unilex (citing arts. 14, 15, 16, 17, 18 and  19).
Part two. Formation of the contract
65
Article 18
(1) A statement made by or other conduct of the offeree indicating assent to an offer
is an acceptance. Silence or inactivity does not in itself amount to acceptance.
(2) An acceptance of an offer becomes effective at the moment the indication of assent
reaches the offeror. An acceptance is not effective if the indication of assent does not
reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable
time, due account being taken of the circumstances of the transaction, including the
rapidity of the means of communication employed by the offeror. An oral offer must be
accepted immediately unless the circumstances indicate otherwise.
(3)However, if, by virtue of the offer or as a result of practices which the parties have
established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price,
without notice to the offeror, the acceptance is effective at the moment the act is performed, provided that the act is performed within the period of time laid down in the
preceding paragraph.
Overview
1. Article 18 is the first of five articles that deal with the
acceptance of an offer. Paragraph (1) of article 18 addresses
what constitutes the acceptance of an offer, while paragraphs (2) and (3) determine when an acceptance is effective. Article 19 qualifies article 18 by providing rules for
when a purported acceptance so modifies an offer that the
reply is a counter-offer.
2. Decisions have applied article 18 not only to offers to
conclude a contract but also to acceptance of counter-offers,1
proposals to modify the contract2 and proposals to terminate
the contract.3 The provisions of article 18 have also been
applied to matters not covered by the Sales Convention.4
6. An indication of assent may be made by an oral or
written statement11 or by conduct.12 The following conduct
has been found to indicate assent: buyer’s acceptance of
goods;13 third party’s taking delivery of goods;14 issuance
of letter of credit;15 signing invoices to be sent to a financial
institution with a request that it finance the purchase;16
sending a reference letter to an administrative agency.17
Silence or inactivity as
assent to an offer
3. Pursuant to article 18 (1), an offeree accepts an offer by
a statement or other conduct indicating assent. Whether or
not the statement or conduct indicates assent is subject to
interpretation in accordance with the rules of paragraphs  (1)
and (2) of article 8.5 All the circumstances, including negotiations prior to conclusion of the contract and the course of
performance after conclusion, are to be taken into account
in accordance with paragraph (3) of article 8.6 If a statement
or conduct indicating assent to an offer cannot be found,
there is no contract under Part II of the CISG.7
7. In the absence of other evidence indicating assent to
an offer, an offeree’s silence or inactivity on receiving an
offer does not amount to an acceptance.18 By virtue of
article  9 (1), however, parties are bound by practices established between themselves and these practices may indicate
assent to an offer notwithstanding the silence or inactivity
of the addressee.19 Parties are also bound by usages as
provided in paragraphs (1) and (2) of article 9, and these
usages may give rise to acceptance of an offer notwithstanding the addressee’s silence or inactivity.20 One court
stated that a course of dealing between the parties required
an offeree to object promptly to an offer, and that the party’s delay in objecting constituted acceptance of the offer.21
A buyer’s failure to exercise any remedy under the Convention in response to the seller’s proposal that the buyer
examine the delivered goods and resell them was construed
as acceptance of an offer to terminate the contract.22
4. Only the offeree of a proposal to conclude a contract
is entitled to accept the offer.8
Effectiveness—time limits for acceptance
5. Whether an offeree’s reply indicating assent to an offer
but modifying that offer is an acceptance or a counter-offer
is determined by article 19.9 Whether a counter-offer is
accepted is then determined by article 18.10
8. Paragraph (2) of article 18 provides that, except in the
circumstances set out in paragraph (3), an acceptance
becomes effective at the moment the indication of assent
reaches the offeror provided it does so within the time limit
Indication of assent to an offer
66
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
for acceptance. The acceptance “reaches” the offeror when
article 24 is satisfied. By virtue of article, 23 a contract is
concluded when the acceptance becomes effective.23
9. To be effective, however, the acceptance must reach
the offeror within the time limits set by paragraph (2) of
article 18 as modified by article 21 on late acceptance.
Article 20 provides rules of interpretation for determining
the time limits for acceptance. As provided in article 21,
an offer cannot be accepted after the time limit expires
unless the offeror informs the offeree without delay that
the acceptance is effective.24
Effectiveness by performance of act
10. An acceptance is effective at the moment the
offeree performs an act indicating assent to the offer,
provided the offeree is authorized, by virtue of the offer
or as a result of practices which the parties have established between themselves or of usage, to indicate its
acceptance of the offer by an act without notice to the
offeror. Several decisions have cited paragraph (3)
rather than paragraph (1) for the proposition that a contract may be concluded by the performance of an act
by the offeree.25
Notes
1
CLOUT case No. 291 [Oberlandesgericht Frankfurt a.M., Germany, 23 May 1995] (delivery of 2,700 pairs of shoes in response to
order of 3,400 pairs was a counter-offer accepted by buyer when it took delivery).
2
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (no acceptance in communications
regarding modification) (see full text of the decision); CLOUT case No. 347 [Oberlandesgericht Dresden, Germany, 9 July 1998] (proposal to modify in commercial letter of confirmation not accepted) (see full text of the decision); CLOUT case No.  193 [Handelsgericht
des Kantons Zürich, Switzerland, 10 July 1996] (proposal to modify not accepted by silence of addressee); CLOUT case No. 133
[Oberlandesgericht München, Germany, 8 February 1995] (proposal to modify time of delivery not accepted) (see full text of the decision); CLOUT case No. 203 [Cour d’appel, Paris, France, 13 December 1995] (proposal to modify in letter of confirmation not
accepted).
3
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994] (acceptance of proposal to terminate contract); CIETAC
award No. 75, China, 1 April 1993, Unilex (acceptance of proposal to terminate), also available on the INTERNET at http://www.cisg.
law.pace.edu/cgi-bin/isearch.
4
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995] (applying art. 18 to determine whether retention of title clause
accepted).
5
CLOUT case No. 429 [Oberlandesgericht Frankfurt a.M., Germany, 30 August 2000], also in Unilex (sending of promissory note
interpreted as not an acceptance).
6
See, e.g., Comisión para la Protección del Comercio Exterior de México, Mexico, 29 April 1996, Unilex (alleged seller’s letter in
reply to offer, letter of credit naming it as payee, and subsequent conduct of the parties evidenced conclusion of contract); CLOUT case
No. 23 [Federal District Court, Southern District of New York, United States, 14 April 1992] (course of dealing created duty to respond
to offer).
7
CLOUT case No. 173 [Fovárosi Biróság, Hungary, 17 June 1997] (no clear agreement to extend distribution contract); CLOUT case
No. 135 [Oberlandesgericht Frankfurt a.M., Germany, 31  March 1995] (correspondence did not reach agreement on quality of glass
ordered).
8
CLOUT case No. 239 [Oberster Gerichtshof, Austria, 18 June 1997] (remand to determine whether the offer was made to a mercantile
agent).
9
CLOUT case No. 242 [Cour de Cassation, France, 16 July 1998] (reply with different jurisdiction clause was a material modification
under art. 19 and therefore a counter-offer); CLOUT case No. 227 [Oberlandesgericht Hamm, Germany, 22 September 1992] (reply with
reference to “unwrapped” bacon a counter-offer under art. 19 and not acceptance under art. 18).
10
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (buyer, by performing contract, accepted seller’s
standard terms that modified buyer’s offer) (see full text of the decision); CLOUT case No. 227 [Oberlandesgericht Hamm, Germany,
22 September 1992] (buyer accepted counter-offer when its reply did not object to counter-offer).
11
CLOUT case No. 395 [Tribunal Supremo, Spain, 28 January 2000] (faxed unconditional acceptance); CLOUT case No. 308 [Federal
Court of Australia, 28 April 1995] (statement in offeree’s letter interpreted as an acceptance) (see full text of the decision).
12
CLOUT case No. 429 [Oberlandesgericht Frankfurt a.M., Germany, 30 August 2000], see also Unilex (sending fax and promissory
note could be acts indicating acceptance, but interpretation of documents showed no such acceptance): CLOUT case No. 291 [Oberlandesgericht Frankfurt a.M., Germany, 23 May 1995] (seller’s delivery of fewer pairs of shoes than ordered was a counter-offer accepted
by buyer taking delivery).
13
CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993] (buyer’s acceptance of goods indicated assent to
offer, including standard terms in letter of confirmation) (see full text of the decision).
14
CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland, 10 July 1996] (third party taking delivery for third party
was act accepting increased quantity of goods sent by seller) (see full text of the decision).
15
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7  December 1999] (pleading stated cause
of action by alleging facts showing parties concluded contract of sale).
16
Cámara Nacional de Apelaciones en lo Comercial, Argentina, 14 October 1993, Unilex.
CLOUT case No. 579 [Federal] Southern District Court of New York, United States, 10 May 2002, Federal Supplement (2nd Series)
201, 236 ff.
17
Part two. Formation of the contract
67
18
CLOUT case No. 309 [Østre Landsret Denmark, 23 April 1998] (parties had no prior dealings); CLOUT case No. 224 [Cour de
Cassation, France, 27 January 1998] (without citation of the Sales Convention, court of cassation finds that court of appeal did not ignore
rule that silence does not amount to an acceptance); CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland, 10 July
1996] (no acceptance where addressee was silent and there was no other evidence of assent).
19
CLOUT case No. 313 [Cour d’appel, Grenoble, France, 21 October 1999] (in prior transactions seller had filled buyer’s without
notifying the buyer); CLOUT case No. 23 [Federal District Court, Southern District of New York United States 14 April 1992] (course
of dealing created duty to respond to offer).
20
Gerechtshof ’s-Hertogenbosch, Netherlands, 24 April 1996, Unilex; CLOUT case No. 347 [Oberlandesgericht Dresden, Germany
9  July 1998] (buyer who sent commercial letter of confirmation did not establish existence of international usage by which silence constitutes assent). See also Opinion of Advocate General Tesauro, EC Reports, 1997, I-911 ff. (commercial letter of confirmation enforceable
notwithstanding recipient’s silence if international usage established).
21
CLOUT case No. 23 [Federal District Court, Southern District of New York, United States, 14 April 1992]. See also CLOUT case
No. 313 [Cour d’appel, Grenoble, France 21 October 1999] (seller with manufacturing samples and original material in its possession
should have questioned buyer about absence of order from buyer).
22
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994].
CLOUT case No. 203 [Cour d’appel, Paris, France, 13 December 1995] (contract concluded before receipt of letter of confirmation
so no acceptance of the standard terms referred to in letter).
23
24
ICC award No. 7844/1994, The ICC International Court of Arbitration Bulletin (Nov. 1995) 72‑73.
CLOUT case No. 416 [Minnesota [State] District Court, United States 9 March 1999] (if Convention applicable, party accepted by
performance under art. 18 (3)) (see full text of the decision); CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland,
10 July 1996] (third party taking delivery of greater number of goods than had been contracted for was an acceptance under art. 18 (3),
but not acceptance of seller’s proposal to modify price); CLOUT case No. 291 [Oberlandesgericht Frankfurt a.M., Germany, 23 May
1995] (delivery of goods could constitute an acceptance of an order under art. 18 (3), but because the delivered quantity differed materially from the order the acceptance was a counter-offer under art. 19).
25
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 19
(1) A reply to an offer which purports to be an acceptance but contains additions,
limitations or other modifications is a rejection of the offer and constitutes a counter-offer.
(2)However, a reply to an offer which purports to be an acceptance but contains
additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the
contract are the terms of the offer with the modifications contained in the acceptance.
(3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s
liability to the other or the settlement of disputes are considered to alter the terms of
the offer materially.
Overview
1. Article 19 qualifies article 18 by providing that a purported acceptance which modifies the offer is a rejection
of the offer and is considered instead to be a counter-offer.1
Paragraph (1) of article 19 states this basic proposition,
while paragraph (2) makes an exception for immaterial
modifications to which the offeror does not object. Paragraph (3) lists matters which are considered material.
Material modifications
2. Paragraph (1) provides that a reply to an offer that adds
to, limits or otherwise modifies the offer is a rejection of
the offer. Several decisions have reviewed the parties’
exchange of multiple communications and have concluded,
without specifying the modifications, that at no point was
there an acceptance of an offer.2
3. Paragraph (3) lists matters that, if they are the subject
of a modification in a reply to an offer, render the modification material. Modifications relating to the following
listed matters have been found to be material: price;3 payment;4 quality and quantity of the goods;5 place and time
of delivery;6 settlement of disputes.7 One decision has
stated, however, that modifications of matters listed in paragraph (3) are not material if the modifications are not considered material by the parties or in the light of usages.8
Immaterial modifications
4. Paragraph (2) provides that a reply with immaterial
modifications of the offer constitutes an acceptance (and
that the resulting contract includes the modified terms of
the reply) unless the offeror notifies the offeree without
undue delay that the offeror objects to the modifications.9
One court has stated that modifications that favour the
addressee are not material and do not have to be accepted
expressly by the other party.10
5. The following modifications have been found to be
immaterial: language stating that the price would be modified by increases as well as decreases in the market price,
and deferring delivery of one item;11 seller’s standard term
reserving the right to change the date of delivery;12 a
request that buyer draft a formal termination agreement;13
a request to treat the contract confidential until the parties
make a joint public announcement;14 a provision requiring
that buyer reject delivered goods within a stated period.15
Conflicting standard terms
6. The Convention does not have special rules to address
the issues raised when a potential seller and buyer both use
standard contract terms prepared in advance for general and
repeated use (the so-called “battle of the forms”). Several
decisions conclude that the parties’ performance notwithstanding partial contradiction between their standard terms
established an enforceable contract.16 As for the terms of
these contracts, several decisions would include those terms
on which the parties substantially agreed, and replace those
standard terms that (after appraisal of all the terms) conflict17 with the default rules of the Convention; several other
decisions give effect to the standard terms of the last person
to make an offer or counteroffer that is then deemed
accepted by subsequent performance by the other party.18
Another decision refused to give effect to the standard
terms of either party: the seller was not bound by the buyer’s terms on the back of the order form in the absence of
a reference to them on the front of the form, while the
seller’s terms–included in a confirmation letter sent after
the contract was concluded—were not accepted by the
buyer’s silence.19
Part two. Formation of the contract
69
Notes
1
But see CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997] (the reply must satisfy the definiteness requirements
of art. 14 (1) in order to be a counter-offer). For discussion of the article 14 (1) definiteness requirement, see paragraphs 6 and 7 of the
Digest for article 14.
See, e.g., CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (no agreement on termination
of contract) (see full text of the decision); CLOUT case No.  173 [Fovárosi Biróság, Hungary, 17 June 1997] (no clear agreement to
extend distribution contract).
2
3
Oberster Gerichtshof, Austria, 9 March 2000, Unilex; CLOUT case No. 417 [Federal District Court, Northern District of Illinois.
United States, 7 December 1999] (see full text of the decision); CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland,
10 July 1996] (see full text of the decision).
4
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (time of payment) (see full text of the decision).
CLOUT case No. 291 [Oberlandesgericht Frankfurt a.M., Germany, 23 May 1995] (delivery of fewer pairs of shoes than ordered);
CLOUT case No. 135 [Oberlandesgericht Frankfurt a.M., Germany, 31 March 1995] (difference in quality of glass test tubes); CLOUT
case No. 121 [Oberlandesgericht Frankfurt a.M., Germany. 4 March 1994] (acceptance ordering additional kinds of screws); CLOUT
case No. 227 [Oberlandesgericht Hamm, Germany 22 September 1992] (acceptance offering to sell “unwrapped” rather than wrapped
bacon).
5
CLOUT case No. 413 [Federal District Court, Southern District of New York, United States, 6 April 1998] (delivery terms) (see full
text of the decision); CLOUT case No. 133 [Oberlandesgericht München, Germany, 8 February 1995] (time of delivery) (see full text
of the decision).
6
7
CLOUT case No. 242 [Cour de Cassation, France, 16 July 1998] (differing choice-of-forum clause); CLOUT case No. 23 [Federal
District Court, Southern District of New York, United States, 14 April 1992] (inclusion of arbitration clause) (see full text of the
decision).
8
CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997].
9
Tribunal Commercial de Nivelles, Belgium, 19 September 1995, Unilex.
10
CLOUT case No. 189 [Oberster Gerichtshof, Austria, 20 March 1997].
CLOUT case No. 158 [Cour d’appel, Paris, France 22 April 1992], affirmed, CLOUT case No.  155 [Cour de Cassation, France,
4  January 1995] (affirming with no specific reference to the Convention) (see full text of the decision).
11
12
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (delivery clause interpreted in accordance with
art.  33  (c)).
13
CIETAC award No. 75, China, 1 April 1993, Unilex, also available on the Internet at http://www.cisg.law.pace.edu/cgi-bin/ isearch.
Fováosi Biróság (Metropolitan Court), Budapest, Hungary, 10 January 1992, English-language trans. available on the Internet at
http://cisgw3.law.pace.edu/cases/920110hl.html, reversed on other grounds, CLOUT case No. 53 [Legfelsóbb Biróság, Hungary, 25  September 1992].
14
15
CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991] (see full text of the decision).
Bundesgerichtshof, Germany, 9 January 2002, available on the Internet at http://www.rws-verlag.de/bgh-free/volltex5/vo82717.htm;
Landgericht Kehl, Germany, 6  October 1995, Unilex (parties’ performance established that parties either derogated from art.  19 or waived
enforcement of conflicting standard terms); CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (buyer
accepted standard terms that differed from its offer by performing contract) (see full text of the decision).
16
Bundesgerichtshof, Germany, 9 January 2002, available on the Internet at http://www.rws-verlag.de/bgh-free/volltex5/vo82717.htm; Landgericht Kehl, Germany, 6  October 1995, Unilex (enforcing only standard terms that the parties had in common).
17
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (by performing buyer accepted standard terms that
differed from its offer); ICC award No. 8611, 1997, Unilex (if standard terms were considered a counter-offer, recipient accepted those
terms by taking delivery of goods along with an invoice to which the standard terms were attached). See also Hof ’s-Hertogenbosch,
Netherlands, 19  November 1996 (seller’s acceptance stated that its standard terms applied only to the extent they did not conflict with
buyer’s standard terms).
18
19
CLOUT case No. 203 [Cour d’appel, Paris, France, 13 December 1995].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 20
(1) A period of time for acceptance fixed by the offeror in a telegram or a letter
begins to run from the moment the telegram is handed in for dispatch or from the date
shown on the letter or, if no such date is shown, from the date shown on the envelope.
A period of time for acceptance fixed by the offeror by telephone, telex or other means
of instantaneous communication, begins to run from the moment that the offer reaches
the offeree.
(2) Official holidays or non-business days occurring during the period for acceptance are included in calculating the period. However, if a notice of acceptance cannot
be delivered at the address of the offeror on the last day of the period because that day
falls on an official holiday or a non-business day at the place of business of the offeror,
the period is extended until the first business day which follows.
Overview
1. Article 20 sets out rules for calculating the time in which an offeree must accept an offer.
2. Paragraph (1) defines when a time period for acceptance begins to run. The paragraph distinguishes between communications that involve a delay between dispatch and receipt (sentence 1) and instantaneous communications (sentence 2).
There are no reported cases applying this paragraph.
3. Paragraph (2) addresses the effect of official holidays and non-business days on the calculation of the time period.
There are no reported cases applying this paragraph.
Part two. Formation of the contract
71
Article 21
(1) A late acceptance is nevertheless effective as an acceptance if without delay
the offeror orally so informs the offeree or dispatches a notice to that effect.
(2) If a letter or other writing containing a late acceptance shows that it has been
sent in such circumstances that if its transmission had been normal it would have reached
the offeror in due time, the late acceptance is effective as an acceptance unless, without
delay, the offeror orally informs the offeree that he considers his offer as having lapsed
or dispatches a notice to that effect.
Overview
1. Article 21 provides that a late acceptance is nevertheless effective if the conditions set out in paragraphs (1) or (2) are
satisfied. Other provisions of Part II of the Convention defined when an acceptance is late. Thus article 18 (2) requires a
timely acceptance to reach the offeror within the time period specified in that paragraph and calculated as provided in
article 20; article 24 defines when a revocation “reaches” the offeree. Article 18(3), however, identifies circumstances in
which an acceptance is effective when the offeree performs “an act, such as one relating to the dispatch of the goods or
payment of the price, without notice to the offeror […]”.
2. Paragraph (1) provides that a late acceptance is effective if the offeror notifies the offeree without delay that the acceptance is effective.1
3. Paragraph (2) provides that a “letter or other writing containing a late acceptance” is nevertheless effective as an
acceptance if the writing shows that it would normally have reached the offeror within the time period for acceptance,
unless the offeror notifies the offeree without delay that he considers the offer to have lapsed. There are no reported cases
applying paragraph (2).
Notes
ICC Court of Arbitration award No. 7844/1994, The ICC International Court of Arbitration Bulletin (Nov. 1995) 72-73 (reference to
Austrian law and Convention for proposition that a late acceptance would not be effective unless the offeror notified offeree without
delay that the acceptance is effective).
1
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 22
An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the
same time as the acceptance would have become effective.
Overview
1. Article 22 provides that an offeree may withdraw its acceptance if the withdrawal reaches the offeror before or at the
same time as the acceptance becomes effective. An acceptance is generally effective at the moment it reaches the offeror
in accordance with article 18 (2) (although in certain circumstances an acceptance by an act is effective when the act is
performed, as provided in article 18 (3)). Article 24 defines when an acceptance and a withdrawal of an acceptance “reaches”
the offeror. There are no reported cases applying this article.
Part two. Formation of the contract
73
Article 23
A contract is concluded at the moment when an acceptance of an offer becomes
effective in accordance with the provisions of this Convention.
Introduction
1. Article 23 provides that a contract is concluded when
an acceptance of an offer becomes effective. Except as
provided in article 18 (3), an acceptance is effective at the
moment it reaches the offeror in accordance with article
18 (2). The exception in article 18 (3) provides that an
acceptance is effective at the moment the offeree performs
an act if, by virtue of the offer or as a result of practices
which the parties have established between themselves or
of usage, the offeree is authorized to indicate its acceptance
of the offer by an act without notice to the offeror.
One decision concluded that an offer that conditioned the
contract on the approval of the parties’ respective Governments, when properly interpreted, did not postpone conclusion of the contract under the Convention.2 Another
decision found that a supplier and a potential subcontractor had agreed to condition the conclusion of the sales
contract on the future award of a sub-contract by the main
contractor.3
3. Once a contract is concluded, subsequent communications may be construed as proposals to modify the contract.
Several courts subject these proposals to the Convention’s
rules on offer and acceptance.4
Interpretation and the time of
conclusion of a contract
Place of conclusion of a contract
2. A contract is concluded when the communications
between and actions of the parties, as provided in article  18
and as interpreted in accordance with article 8, establish
that there has been an effective acceptance of an offer.1
4. Article 23 does not address where a contract is concluded. One court deduced from article 23 that the contract
was concluded at the place of business where the acceptance reached the offeror.5
Notes
1
Comisión para la Protección del Comercio Exterior de México, Mexico, 29 April 1996, Unilex (contract concluded when acceptance
reached buyer-offeror); CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March 1995] (although Part II not applicable
because of art. 92 declaration, court finds contract concluded by intention of the parties); CLOUT case No. 158 [Cour d’appel, Paris,
France, 22 April 1992] (contract concluded when acceptance reached offeror); CLOUT case No. 5 [Landgericht Hamburg, Germany,
26  September 1990] (exchange of communications, interpreted in accordance with art. 8, established parties’ intent to conclude contract)
(see full text of the decision).
2
Fovárosi Biróság (Metropolitan Court), Budapest, Hungary, 10 January 1992, English-language trans. available on the Internet at
http://cisgw3.law.pace.edu/cases/920110hl.html, reversed on other grounds, CLOUT case No. 53 [Legfelsóbb Biróság, Hungary 25  September 1992] (see full text of the decision).
3
ICC award No. 7844/1994, The ICC International Court of Arbitration Bulletin (Nov. 1995) 72‑73.
CLOUT case No. 395 [Tribunal Supremo, Spain, 28 January 2000] (proposal to modify price not accepted); CLOUT case No. 193
[Handelsgericht des Kantons Zürich, Switzerland, 10 July 1996] (proposal to modify price not accepted by silence, citing art. 18 (1));
CLOUT case No.  203 [Cour d’appel, Paris, France 13 December 1995] (confirmation letter sent after contract concluded not
accepted).
4
5
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995] (German law applied because acceptance reached offeror at its
place of business in Germany) (see full text of the decision).
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 24
For the purposes of the Part of the Convention, an offer, declaration of acceptance or
any other indication of intention “reaches” the addressee when it is made orally to him
or delivered by any other means to him personally, to his place of business or mailing
address or, if he does not have a place of business or mailing address, to his habitual
residence.
Overview
Other communications
1. Article 24 defines, for the purposes of Part II (governing formation of the contract), when a communication
reaches the other party. Part II of the Convention refers to
the time when a communication “reaches” the other party
in articles 15  (1) (time when an offer becomes effective),
15  (2)  (withdrawal of offer), 16  (1) (revocation of acceptance), 17 (rejection of an offer), 18  (2)  (time when an
acceptance becomes effective), 20  (1) (commencement of
time period for acceptance if an offer is made via instantaneous means of communication), 21  (2) (late acceptance
that normally would have arrived in time), and 23 (time of
conclusion of contract).
4. Any other communication reaches the addressee
when it is delivered to the addressee personally or to his
business or mailing address. If the addressee does not
have a place of business or mailing address, a communication reaches the addressee when it is delivered to
his habitual residence. A communication delivered to the
relevant address is effective even if the addressee has
changed its address.2
Scope of article 24
2. Article 24 applies only to communications made before
or at the time the contract is concluded. For communications
after the contract is concluded, article 27 provides that the
addressee bears the risk of non-receipt or of delay or error.1
Oral communications
3. An oral communication reaches the addressee when it
is made to him. There are no reported cases applying this
provision.
Language of communication
5. Article 24 does not expressly address whether a communication in a language that the addressee is unable to
understand “reaches” the addressee. Under paragraphs (1)
and (2) of article 8, a party’s communication is to be interpreted in accordance with the common understanding of
the parties or, absent such a common understanding, in
accordance with the understanding that a reasonable person
of the same kind as the other party would have had in the
same circumstances. One court has stated that, pursuant to
article 8, a communication does not “reach” the addressee
unless the language of the communication was agreed to
by the parties, used by the parties in their prior dealings,
or customary in the trade.3 Several other courts have given
no effect to standard terms when they were not translated
into the language of the other party.4
Notes
1
But see Arrondissementsrechtbank, Amsterdam, Netherlands, 5 October 1994, Unilex (applying art. 24 to seller’s letter responding to
buyer’s explanation for partial rejection of the goods).
2
Arrondissementsrechtbank, Amsterdam, Netherlands, 5 October 1994, Unilex (seller’s letter in response to buyer’s explanation for
partial rejection of the goods “reached” the buyer even though buyer did not actually receive it because of change of address).
3
CLOUT case No. 132 [Oberlandesgericht Hamm, Germany, 8 February 1995] (discussion of “language risk” in light of art. 8).
CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997] (standard terms stated exclusively in German language
sent by a German seller to an Italian buyer); Amtsgericht Kehl, Germany, 6 October 1995, Unilex (standard terms stated exclusively in
German language sent by a German buyer to an Italian seller).
4
Part three
SALE OF GOODS
Overview
that State would primarily be those in Part II on formation
of the contract. No Contracting State has made such a
declaration. Two or more Contracting States that have the
same or closely-related legal rules on sales matters may
declare that the Convention is not to apply to sales contracts (or to their formation) where the parties have their
places of business in these States. CISG article  94 (1). A
Contracting State may also make such a declaration if it
has the same or closely-related legal rules on matters governed by the Convention as those of a non-Contracting
State. CISG article 94 (2). Such a non-Contracting State
may, when it becomes a Contracting State, declare that
the Convention shall continue to be inapplicable to sales
contracts (of the formation thereof) with persons in the
earlier-declaring Contracting State. CISG article 94 (3).
Denmark, Finland, Norway and Sweden made declarations that the Convention—including Part III thereof—is
inapplicable with respect to contracts between parties
located in those states or in Iceland. When Iceland became
a Contracting State it declared that it would continue this
arrangement.
1. If an international sales contract has been formed,
Part  III of the Sales Convention contains rules stating the
substantive obligations of the parties created by the contract. Timing requirements for the application of these rules
are set out in article 100 (b). Part III of the Convention is
comprised of Chapter I, “General Provisions” (articles 2529); Chapter II, “Obligations of the Seller” (articles 30-52);
Chapter III, “Obligations of the Buyer” (articles 53-65);
Chapter IV, “Passing of Risk” (articles 66-70); and Chapter V, “Provisions Common to the Obligations of the Seller
and of the Buyer” (articles 71-88).
Permitted reservations
by Contracting States
2. Under article 92 of the Sales Convention, a Contracting
State may declare that it is not bound by Part III of the
Convention, in which case the Convention rules binding on
77
Part III, Chapter I
General provisions (articles 25-29)
Overview
1. Chapter I of Part III of the Convention, entitled “General Provisions,” encompasses four articles—articles 25-29. The
first two of those articles deal with matters relating to avoidance of contract: article 25 defines a “fundamental breach,”
which is a prerequisite for avoidance of contract under articles 49 (1) (a), 51 (2), 64 (1) (a), 72 (1), and 73 (1) and (2)
(as well as a prerequisite for a buyer to require delivery of substitute goods under article 46 (2)); article 26 states that
effective avoidance of contract requires notice to the other party. The remaining provisions of Chapter I cover a variety of
matters. Article 27 addresses whether a notice under Part III is effective despite a delay or error in transmission or its
failure to arrive. Article 28 permits a court to refuse to order specific performance in circumstances in which it would not
do so under its own domestic law. Finally, article 29 governs modifications of contracts to which the Convention applies.
79
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 25
A breach of contract committed by one of the parties is fundamental if it results
in such detriment to the other party as substantially to deprive him of what he is
entitled to expect under the contract, unless the party in breach did not foresee
and a reasonable person of the same kind in the same circumstances would not have
foreseen such a result.
Introduction
1. Article 25 defines the term “fundamental breach,”
which is used in various provisions of the Convention. A
fundamental breach as here defined is a prerequisite for
certain remedies under the Convention, including a party’s
right to avoid the contract under articles 49 (1) (a) and
64  (1)  (a), and a buyer’s right to require delivery of replacements for goods that failed to conform to the contract (article 46 (2)). The phrase is also used in other provisions of
the Convention in connection with avoidance of contract
(see articles 51 (2), 72 (1), 73 (1) and (2)). A fundamental
breach also impacts the operation of the passage-of-risk
provisions of the Convention—see article 70 and paragraph  13 of the Digest for Part III, Section III, Chapter IV.
In general article 25 defines the border between situations
giving rise to “regular” remedies for breach of contract—
like damages and price reduction—and those calling for
more drastic remedies, such as avoidance of contract.
Definition of fundamental
breach in general
2. A fundamental breach requires, first, that one party has
committed a breach of contract. Breach of any obligation
under the contract can suffice—provided the other requirements for a fundamental breach are present—irrespective
of whether the duty was specifically contracted for between
the parties or if, instead, it followed from the provisions
of the Convention. Even the breach of a collateral duty can
give rise to a fundamental breach. For example, where a
manufacturer had a duty to reserve goods with a particular
trademark exclusively for the buyer, and the manufacturer
displayed the trademarked goods at a fair for sale (continuing
to do so even after a warning by the buyer), the manufacturer
was found to have committed a fundamental breach.1
3. In order to rank as fundamental, a breach must be of
a certain nature and weight. The aggrieved party must
have suffered such detriment as to substantially deprive
it of what it was entitled to expect under the contract.
The breach must therefore nullify or essentially depreciate
the aggrieved party’s justified contract expectations. What
expectations are justified depends on the specific contract
and the risk allocation envisaged by the contract provisions, on customary usages, and on the provisions of the
Convention. For example, buyers cannot normally expect
that delivered goods will comply with regulations and
official standards in the buyer’s country.2 Therefore, e.g.,
the delivery of mussels with a cadmium content exceeding
recommended levels in the buyer’s country has not been
regarded as a fundamental breach (or, indeed, as a breach
at all) since the buyer could not have expected that the
seller would meet those standards and since the consumption of the mussels in small portions as such did not
endanger a consumer’s health.3
4. Article 25 provides further that a breach is fundamental
only if the substantial deprivation of expectations caused
by the breach was reasonably foreseeable to the breaching
party. However, the provision does not mention the time at
which the consequences of the breach must have been foreseeable. One court has decided that the time of conclusion
of contract is the relevant time.4
Specific fundamental breach situations
5. Courts have decided whether certain typical fact patterns constitute fundamental breaches. It has been determined on various occasions that complete failure to perform
a basic contractual duty constitutes a fundamental breach
of contract unless the party has a justifying reason to withhold its performance. This has been decided in the case of
final non-delivery5 as well as in the case of final nonpayment.6 However, if only a minor part of the contract is
finally not performed (e.g., one delivery out of several
deliveries is not made), the failure to perform is a simple,
non-fundamental breach of contract.7 On the other hand a
final and unjustified announcement of the intention not to
fulfil one’s own contractual obligations has been found to
constitute a fundamental breach.8 Likewise, the buyer’s
insolvency and placement under administration has been
held to constitute a fundamental breach under article 64
since it deprives the unpaid seller of what it was entitled
to expect under the contract, namely payment of the full
price.9 Similarly, a buyer’s refusal to open a letter of credit
as required by the contract has been held to constitute a
fundamental breach.10 It has also been determined that nondelivery of the first instalment in an instalment sale gives
the buyer reason to believe that further instalments will not
be delivered, and therefore a fundamental breach of contract was to be expected (article 73 (2)).11
Part three. Sale of goods
6. As a rule late performance—whether late delivery of
the goods or late payment of the price—does not in itself
constitute a fundamental breach of contract.12 Only when
the time for performance is of essential importance either
because it is so contracted13 or due to evident circumstances
(e.g., seasonal goods)14 does delay as such amount to a
fundamental breach.15 But even if a delay is not fundamental
breach, the Convention allows the aggrieved party to fix an
additional period of time for performance; if the party in
breach fails to perform during that period, the aggrieved
party may then declare the contract avoided (articles 49 (1) (b)
and 64  (1)  (b)).16 Therefore in such a case, but only in
that case, the lapse of the additional period turns a nonfundamental delay in performance into a sufficient reason
for avoidance.
7. If defective goods are delivered, the buyer can avoid
the contract when the non-conformity of the goods is properly regarded as a fundamental breach of contract (article
49 (1) (a)). It therefore is essential to know under what
conditions delivery of non-conforming goods constitutes a
fundamental breach. Court decisions on this point have
found that a non-conformity concerning quality remains a
mere non-fundamental breach of contract as long as the
buyer—without unreasonable inconvenience—can use the
goods or resell them even at a discount.17 For example, the
delivery of frozen meat that was too fat and too moist, and
that consequently was worth 25.5 per cent less than meat
of the contracted quality (according to an expert opinion),
was not regarded as a fundamental breach of contract since
the buyer had the opportunity to resell the meat at a lower
price or to otherwise process it.18 On the other hand, if the
non-conforming goods cannot be used or resold with reasonable effort this constitutes a fundamental breach and
entitles the buyer to declare the contract avoided.19 This
has been held to be the case as well where the goods suffered from a serious and irreparable defect although they
were still useable to some extent (e.g., flowers which were
supposed to flourish the whole summer but did so only for
part of it).20 Courts have considered a breach to be fundamental without reference to possible alternative uses or
resale by the buyer when the goods had major defects and
conforming goods were needed for manufacturing other
products.21 The same conclusion has been reached where
the non-conformity of the goods resulted from added substances the addition of which was illegal both in the country of the seller and the buyer.22
81
8. Special problems arise when the goods are defective but
repairable. Some courts have held that easy repairability precludes finding a fundamental breach.23 Courts are reluctant to
consider a breach fundamental when the seller offers and effects
speedy repair without any inconvenience to the buyer.24
9. The violation of other contractual obligations can also
amount to a fundamental breach. It is, however, necessary
that the breach deprive the aggrieved party of the main
benefit of the contract and that this result could have been
foreseen by the other party. Thus, a court stated that there
is no fundamental breach in case of delivery of incorrect
certificates pertaining to the goods if either the goods were
nevertheless merchantable or if the buyer itself could—at the
seller’s expense—easily acquire the correct certificates.25 The
unjustified denial of contract rights of the other party—e.g.,
a refusal to recognize the validity of a retention of title clause
and the seller’s right to possession of the goods,26 or the
unjustified denial of a valid contract after having taken possession of samples of the goods27—can amount to a fundamental breach of contract. The same is true when resale
restrictions have been substantially violated.28
10. A delay in accepting the goods will generally not
constitute a fundamental breach, particularly when the
delay is only for a few days.29
11. The cumulation of violations of several contractual
obligations makes a fundamental breach more probable, but
does not automatically constitute a fundamental breach.30
In such cases, the existence of a fundamental breach
depends on the circumstances of the case as well as on
whether the breach resulted in the aggrieved party losing
the main benefit of, and its interest in, the contract.31
Burden of proof
12. Article 25 regulates to some extent the burden of proving its elements. The burden with regard to the foreseeabiity
element of article 25 lies with the party in breach:32 this
party must prove that it did not foresee the substantial detrimental effect of its breach, and that a reasonable person of
the same kind in the same circumstances would not have
foreseen such an effect. On the other hand, the aggrieved
party has to prove that the breach substantially deprived it
of what it was entitled to expect under the contract.33
Notes
1
CLOUT case No. 2 [Oberlandesgericht Frankfurt a.M., Germany, 17 September 1991]; see also CLOUT case No. 217 [Handelsgericht
des Kantons Aargau, Switzerland, 26 September 1997].
2
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995]; see CLOUT case No. 418 [Federal District Court, Eastern District of Louisiana, United States 17 May 1999] (in the same sense and relying on CLOUT case No. 123 [Bundesgerichtshof, Germany,
8 March 1995]); CLOUT case No. 426 [Oberster Gerichtshof, Austria, 13 April 2000], also in Internationales Handelsrecht 2001,
117.
3
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995].
4
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997] (see full text of the decision).
CLOUT case No. 90 [Pretura circondariale di Parma, Italy, 24 November 1989] (only partial and very late delivery); CLOUT case
No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995] (see full text of the decision).
5
6
CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994].
7
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997].
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8
See CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995]. In that case the seller gave notice that he had sold
the specified good to another buyer. See also CLOUT case No. 595 [Oberlandesgericht München, Germany, 15 September 2004] (seller’s
refusal to deliver on the assumption that the contract had been cancelled was a fundamental breach) (see full text of the decision); Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce, Russia, awadr in case No.387/1995 of
4 April 1997, Unilex (final refusal to pay the price).
9
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995].
CLOUT case No. 631 [Supreme Court of Queensland, Australia, 17 November 2000], citing CLOUT case No. 187 [Federal District
Court, Southern District of New York, United States, 23 July 1997] (see full text of the decision).
10
11
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997].
Corte di Appello di Milano, Italy, 20 March 1998, Unilex (late delivery); CLOUT case No. 275 [Oberlandesgericht Düsseldorf,
Germany, 24 April 1997] (late delivery); CLOUT case No. 301 [Arbitration—International Chamber of Commerce No. 7585 1992] (late
payment).
12
13
CLOUT case No. 277 [Oberlandesgericht Hamburg, Germany, 28 February 1997] (the late delivery under a CIF sale was held to be
a fundamental breach of contract).
14
Corte di Appello di Milano, Italy, 20 March 1998, Unilex (the buyer had ordered seasonal knitted goods and pointed to the essential
importance of delivery at the fixed date, although only after conclusion of the contract); ICC International Court of Arbitration, France,
award No. 8786, January 1997, ICC International Court of Arbitration Bulletin 2000, 70.
15
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997] (late delivery constitutes a fundamental breach when
the buyer would prefer non-delivery instead and the seller could have been aware of this).
16
See, e.g. CLOUT case No. 301 [Arbitration—International Chamber of Commerce No. 7585 1992].
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996]; CLOUT case No. 248 [Schweizerisches Bundesgericht,
Switzerland, 28 October 1998].
17
18
CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998].
CLOUT case No. 150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine); CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994] (shoes with splits in the leather) (see full text of the decision); Landgericht Landshut,
Germany, 5 April 1995, Unilex (T-shirts which shrink by two sizes after first washing).
19
20
CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994].
See CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1993, 3 March 1995]
(compressors with lower cooling capacity and higher power consumption than the goods contracted-for, which were required for the
manufacture of air conditioners by the buyer); CLOUT case No.  150 [Cour de Cassation, France, 23 January 1996] (artificially sugared
wine) (see full text of the decision); CLOUT case No. 315 [Cour de Cassation, France, 26 May 1999] (metal sheets absolutely unfit for
the foreseen kind of manufacture by the buyer’s customer) (see full text of the decision); see also Tribunale di Busto Arsizio, Italy,
13  December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available on Unilex (delivery
of a machine totally unfit for the particular use made known to the seller and that was incapable of reaching the promised production
level represented a “serious and fundamental” breach of the contract, since the promised production level was an essential condition for
the conclusion of the contract; the lack of conformity therefore was a basis for avoidance).
21
22
Compare CLOUT case No. 150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine which is forbidden under
EU-law and national laws) (see full text of the decision); CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (watered
wine) (see full text of the decision).
23
Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995, Schweizerische Zeitschrift für Internationales und Europäisches
Recht 1996, 51.
24
CLOUT case No. 152 [Cour d’appel, Grenoble, France, 26 April 1995]; CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany,
31 January 1997].
25
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996].
26
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995].
27
CLOUT case No. 313 [Cour d’appel, Grenoble, France, 21 October 1999] (see full text of the decision).
CLOUT case No. 2 [Oberlandesgericht Frankfurt a.M., Germany, 17 September 1991]; CLOUT case No. 154 [Cour d’appel,
Grenoble, France, 22 February 1995]; CLOUT case No. 82 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994], (see full text
of the decision); CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997].
28
29
CLOUT case No. 243 [Cour d’appel, Grenoble, France, 4 February 1999].
30
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996] (see full text of the decision).
31
Id. (see full text of the decision).
32
Id. (see full text of the decision).
33
Id. (see full text of the decision).
Part three. Sale of goods
83
Article 26
A declaration of avoidance of the contract is effective only if made by notice to the
other party.
Overview
1. Article 26 provides that avoidance of contract must be
declared by the party who intends to terminate the contract,
and that the declaration must be effected by notice to the
other party. The Convention does not provide for an automatic (ipso facto) avoidance of contract.1 It has nevertheless
been held that notice of avoidance is unnecessary where a
seller has “unambiguously and definitely” declared that it
will not perform its obligations, since notice in such a situation would be a “mere formality,” the date of avoidance
can be determined from the obligor’s declaration of the
intention not to perform, and requiring notice of avoidance
would be contrary to the mandate in article 7(1) to interpret
the Convention in a fashion that promotes the observance
of goods faith in international trade.2
2. The purpose of the notice requirement is to ensure that
the other party becomes aware of the status of the contract.
Form of notice
3. The notice need not be given in a particular form (see
also article 11). It therefore can be made in writing or even
orally.3 Also, a notice in a statement of claim filed with a
court suffices.4
4. Article 26 does not mention the possibility of implicit
notice, but several courts have dealt with this issue. One
court found that the buyer’s mere purchase of substitute
goods did not constitute a valid (implicit) notice of declaration of avoidance;5 another court decided that the buyer did
not give valid notice of avoidance by sending back the
delivered goods without further explanation.6
Contents of notice
5. The notice must express with sufficient clarity that the
party will not be bound by the contract any longer and considers the contract terminated.7 Therefore, an announcement
that the contract will be avoided in the future if the other
party does not react,8 or a letter demanding either price
reduction or taking the delivered goods back,9 or the mere
sending back of the goods10 does not constitute a valid
notice because it does not state in unequivocal terms that
the originating party believes that the contract is avoided.
The same is true if a party merely requests damages,11 or
if it declares avoidance with respect to a different contract.12
It appears, however, that the phrase “declaration of avoidance” or even the term “avoidance” need not be used, nor
need the relevant provision of the Convention be cited,
provided that a party communicates the idea that the contract is presently terminated because of the other side’s
breach. Thus, one court found that the buyer effectively
gave notice by declaring that it could not use the defective
goods and that it placed them at the disposal of the seller.13
The same was ruled with respect to a letter in which the
buyer stated that no further business with the seller would
be conducted.14 A buyer’s written refusal to perform combined with a demand for repayment has also been deemed
sufficient notice of avoidance.15 Notice of non-conformity
of the goods and notice of avoidance can be combined and
expressed in one declaration.16
Addressee of the notice
6. The notice must be directed to the other party, which
is normally the other party to the original contract, or its
authorized agent. If the contractual rights have been
assigned to a third party the declaration must be addressed
to this new party.17
Time for communication of notice
7. In certain circumstances, articles 49 (2) and 64 (2)
require that notice of avoidance be communicated within
a reasonable time. It has been held that notice after several
months is clearly not reasonable under article 49 (2).18 To
meet any applicable time limit, dispatch of the notice
within the period is sufficient (see article 27).
Notes
1
See CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision); CLOUT case No. 294
[Oberlandesgericht Bamberg, Germany, 13 January 1999]; ICC Court of Arbitration, France, award No. 9887, ICC International Court
of Arbitration Bulletin 2000, 109.
2
CLOUT case No. 595 [Oberlandesgericht München, Germany, 15 September 2004].
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3
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996].
4
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995].
5
CLOUT case No. 294 [Oberlandesgericht Bamberg, Germany, 13 January 1999].
6
CLOUT case No. 6 [Landgericht Frankfurt a.M., Germany, 16 September 1991].
7
Id.
8
Landgericht Zweibrücken, Germany, 14 October 1992, Unilex.
9
Oberlandesgericht München, Germany, 2 March 1994, Recht der Internationalen Wirtschaft 1994, 515.
10
CLOUT case No. 6 [Landgericht Frankfurt a.M., Germany, 16 September 1991].
11
CLOUT case No. 176 [Oberlandesgericht München, Germany, 8 February 1995].
12
CLOUT case No. 6 [Landgericht Frankfurt a.M., Germany, 16 September 1991] (see full text of the decision).
13
CLOUT case No. 235 [Bundesgerichtshof, Germany 25 June 1997].
14
CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschatlichen Arbitrage 29 December 1998].
15
CLOUT case No. 594 [Oberlandesgericht Karlsruhe, Germany 19 December 2002].
16
CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997].
17
CLOUT case No. 6 [Landgericht Frankfurt a.M., Germany, 16 September 1991] (see full text of the decision).
See CLOUT case No. 124 [Bundesgerichtshof, Germany, 15 February 1995] (notice after 5  months: too late); CLOUT case No. 84
[Oberlandesgericht Frankfurt a.M., Germany, 20 April 1994] (2 months: too late); CLOUT case No. 83 [Oberlandesgericht München,
Germany, 2  March 1994] (4 months: too late); CLOUT case No. 6 [Landgericht Frankfurt a.M., Germany, 16 September 1991] (1 day:
in time) (see full text of the decision).
18
Part three. Sale of goods
85
Article 27
Unless otherwise expressly provided in this Part of the Convention, if any notice, request
or other communication is given or made by a party in accordance with this Part and
by means appropriate in the circumstances, a delay or error in the transmission of the
communication or its failure to arrive does not deprive that party of the right to rely on
the communication.
Overview
1. Article 27 states that, in general, the dispatch principle
applies to all kinds of communications provided for in
Part  III of the Convention (articles 25-89). Under this principle the declaring party has only to dispatch its communication by using an appropriate means of communication;
the addressee then bears the risk of correct and complete
transmission of the communication.1
The dispatch principle
2. The dispatch principle is the general principle of the
Convention applicable to communications after the parties
have concluded their contract. According to the principle,
a notice, request or other communication becomes effective
as soon as the declaring party releases it from its own
sphere by an appropriate means of communication. This
rule applies to notice of non-conformity or of third-party
claims (articles 39, 43); to requests for specific performance (article 46), price reduction (article 50), damages
(article 45 (1) (b)) or interest (article 78); to a declaration
of avoidance (articles 49, 64, 72, 73); to the fixing of an
additional period for performance (articles 47, 63); and to
other notices, as provided for in articles 32 (1), 67 (2)
and 88. As a general principle for Part  III of the Convention, the dispatch principle applies as well to any other
communication the parties may provide for in their contract
unless they have agreed that the communication has to be
received to be effective.2
3. Some provisions of Part III of the Convention, however, expressly provide that a communication becomes
effective only when the addressee “receives” it (see articles  47 (2), 48 (4), 63 (2), 65, 79 (4)).
Appropriate means of communication
4. The declaring party must use appropriate means of
communication in order for a notice to benefit from the
rule of article 27. In one case a court stated that giving
notice to a self-employed broker who did not act as a commercial agent for the seller was not an appropriate means
of communication with the seller: the notice would only
be deemed given by appropriate means if the buyer assured
itself about the reliability of the self-employed broker; the
buyer also had to indicate to the broker its function as a
messenger, as well as the importance of the notice, and
had to control the performance of the commission.3
5. Article 27 does not explicitly deal with how the language
of a communication impacts its appropriateness. In order to
be effective, however, the communication must be in the language the parties have explicitly chosen, or that has previously
been used among them, or that the receiving party understands
or has communicated that it understands.4
6. It has been held that article 27 does not govern oral
communications.5 One court stated that such communications are effective if the other party can hear and—with
respect to language—understand them.6
Effect of appropriate and inappropriate
communications
7. Where the declaring party uses an inappropriate means
of transmission the communication is generally considered
ineffective. Therefore, e.g., the buyer loses its remedies for
non-conformity in the delivered goods if the buyer transmits the notice of non-conformity to the wrong person.7
Burden of proof
8. It has been held that the declaring party must prove
actual dispatch of the communication as well as the time
and method of dispatch.8 If the parties have agreed on a
specific form of communication the declaring party must
also prove that it used the agreed form.9 However the
declaring party does not need to prove that the communication reached the addressee.10
Notes
CLOUT case No. 540 [Oberlandesgericht Graz, Austria, 16 September 2002]; CLOUT case No. 305 [Oberster Gerichtshof, Austria,
30 June 1998].
1
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2
Landgericht Stuttgart, Germany, 13 August 1991, Unilex (according to the contract, notice of non-conformity had to be by registered
letter; as a result, the court held, the notice had to be received by the other party and the declaring party had the burden of proving that
the notice had been received by the other party). See also CLOUT case No. 305 [Oberster Gerichtshof, Austria, 30 June 1998].
3
CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996].
CLOUT case No. 132 [Oberlandesgericht Hamm, Germany, 8 February 1995]; Amtsgericht Kehl, Germany, 6 October 1995, Unilex;
CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996] (see full text of the decision).
4
5
CLOUT case No. 305 [Oberster Gerichtshof, Austria, 30 June 1998] (see full text of the decision).
6
Id.
7
See CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996] (see full text of the decision).
CLOUT case No. 305 [Oberster Gerichtshof, Austria, 30 June 1998]; Landgericht Stuttgart, Germany, 13 August 1991, Unilex; CLOUT
case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (see full text of the decision).
8
9
10
Landgericht Stuttgart, Germany, 13 August 1991, Unilex.
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (see full text of the decision).
Part three. Sale of goods
87
Article 28
If, in accordance with the provisions of this Convention, one party is entitled to require
performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect
of similar contracts of sale not governed by this Convention.
Overview: meaning and purpose
of the provision
1. The article constitutes a compromise between legal
systems that deal differently with the right of a party to
claim specific performance of the contract. According to
article 28, a court is not obliged to grant specific performance under the Convention if it would not do so for similar
sales contracts under its domestic law.
2. “Specific performance” means requiring the other party
to perform its obligations under the contract through court
action. For example, the buyer may obtain a court order
requiring the seller to deliver the quantity and quality of
steel contracted for.1
3. There is little case law on this provision; only one
case has been reported thus far.2 In that case, a court
stated that that where the Convention entitles a party to
claim specific performance, article 28 allows the seized
court to look to the availability of such relief under its
own substantive law in a like case.3 If the national law
would also grant specific performance in the case, no conflict with the Convention and no problem arises.4 If the
national law would, however, disallow specific performance, alternative relief—in most cases, damages—could
be granted instead. Article 28, however, merely provides
that the court “is not bound” to adopt the solution of its
national law regarding specific performance in the context
of an international sale of goods governed by the
Convention.
Notes
1
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7  December 1999].
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7  December 1999] is apparently the only
CISG case to consider this issue.
2
3
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7  December 1999]: “Simply put, [CISG
Article 28] looks to the availability of such relief under the UCC.”
4
That was the outcome in CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7 December
1999].
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Article 29
(1) A contract may be modified or terminated by the mere agreement of the
parties.
(2) A contract in writing which contains a provision requiring any modification
or termination by agreement to be in writing may not be otherwise modified or terminated by agreement. However, a party may be precluded by his conduct from asserting
such a provision to the extent that the other party has relied on that conduct.
Overview: meaning and purpose
of the provision
1. Article 29 addresses modification (which includes an
addition to)1 and termination of an already concluded contract by agreement of the parties. According to article  29
(1), the mere consent of the parties is sufficient to effect
such a modification or termination. If, however, the parties
have agreed in writing that a modification or termination of
their contract must be done in writing, paragraph 2 provides
that the contract cannot be otherwise modified or terminated—although a party’s conduct may preclude it from
asserting such a provision to the extent that the other party
has relied on that conduct.
2. Article 29 (1) is intended to abolish the common
law doctrine of “consideration” as a requirement for modification or termination of contracts governed by the
Convention. 2
4. Interpretation of the parties’ agreement to modify or
terminate a contract is governed by the Convention’s rules
on construction—in particular article 8.
5. The agreement of both parties is all that is required in
order to modify or terminate their contract.8 No form
requirements need be met9 unless the reservation concerning form applies (arts. 11, 12, 96)10 or the parties have
agreed otherwise. According to one decision, when a State’s
article 96 reservation comes into play, modifications agreed
upon only orally are invalid.11 In all other cases it follows
from article 11, which evidences a general principle of informality in the Convention, that the parties are free to modify
or terminate their contract in any form, whether in writing,
orally, or in any other form. Even an implied termination of
the contract has been held possible;12 it has also been held
that a written contract may be orally changed.13
Form agreements
Modification or termination
by mere agreement
3. In order to modify a contract provision or terminate
their contract, the parties must reach agreement. The existence of such an agreement is determined on the basis of
the provisions in Part II (articles 14-24) of the Convention.3
Article 29 provides that a contract can be modified or terminated “by the mere agreement of the parties”. In line
with article 18 (1), it has been stated that silence of one
party in response to a proposal by the other to modify a
contract does not in itself constitute acceptance of such
proposal;4 it has also been stated, however, that there was
agreement to terminate a contract where a buyer refused
to pay due to alleged non-conformities in the goods, the
seller subsequently offered to market the goods itself, and
the buyer failed to reply to the offer.5 One court stated that,
although article  29 provides that a contract can be modified
purely by agreement of the parties, modification of the
purchase price did not result merely from the general mood
of a meeting.6 The acceptance without comment of a bill
of exchange as payment has, however, been regarded as
implied consent to postponement of the date for payment
until the maturity of the bill.7
6. According to article 29 (2), if a written contract contains
a provision requiring modification or termination of the contract to be in writing (a “no oral modification”-clause or
“written modification”-clause), then the parties cannot modify or terminate the contract in a different manner.14 An oral
amendment is ineffective in such a case unless the second
sentence of article 29(2) were to apply.15
7. A so-called merger clause, according to which all prior
negotiations have been merged into the contract document,
has been treated like a “no oral modification”-clause, so
that no evidence of oral agreements prior to the written
contract could be adduced in order to modify or terminate
that contract.16
Abuse of “no oral modification” clause
8. Article 29 (2) (2) provides that a party may be precluded by its conduct from invoking a “no oral modification” clause “to the extent that the other party has relied
on that conduct”. It has been stated that the provision is
an expression of the general good faith principle that governs the Convention (art. 7 (1)).17
Part three. Sale of goods
89
Notes
1
See CLOUT case No. 86 [Federal District Court, Southern District of New York, United States, 22 September 1994] (see full text
of the decision).
2
See Secretariat Commentary to (then) article 27 (‘overcoming the common law rule that “consideration” is required’) Commentary
on the draft Convention on Contracts for the International Sale of Goods, A/CONF.97/5, reproduced in United Nations Conference on
Contracts for the International Sale of Goods: Official Records, at p. 28, paras. 2-3.
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994]; to the same effect see CLOUT case No. 153 [Cour
d’appel, Grenoble, France, 29 March 1995], and CLOUT case No. 332 [Obergericht des Kantons, Basel-Landschaft Switzerland 11 June
1999].
3
4
CLOUT case No. 120 [Oberlandesgericht Köln Germany 22 February 1994]; CLOUT case No.  332 [Obergericht des Kantons BaselLandschaft, Switzerland, 11 June 1999].
5
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994].
6
CLOUT case No. 153 [Cour d’appel, Grenoble, France, 29 March 1995].
7
CLOUT case No. 5 [Landgericht Hamburg, Germany, 26 September 1990] (see full text of the decision).
8
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996].
CLOUT case No. 413 [Federal District Court, Southern District of New York, United States, 6 April 1998] (see full text of the decision); CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], Zeitschrift für Rechtsvergleichung 2000, 33.
9
10
For a similar case see Rechtbank van Koophandel, Hasselt, Belgium, 2 May 1995, available on the Internet at http://www.law.
kuleuven.be/ipr/eng/cases/1995-05-02.html.
11
Information Letter No. 29 of the High Arbitration Court of the Russian Federation, Russian Federation, 16 February 1998, Unilex
(abstract).
CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], Zeitschrift für Rechtsvergleichung 2000, 33.
12
13
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
14
ICC Court of Arbitration, Switzerland, March 1998, ICC International Court of Arbitration Bulletin, 2000, 83.
15
CLOUT case No. 86 [Federal District Court, Southern District of New York, United States, 22  September 1994].
16
ICC Court of Arbitration, Switzerland, March 1998, ICC International Court of Arbitration Bulletin, 2000, 83.
CLOUT case No. 94 [Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft–Wien, 15 June
1994].
17
Part three. Sale of goods
91
Part III, Chapter II
Obligations of the seller (articles 30-52)
Overview
1. The provisions in Chapter II of Part III of the Convention, entitled “Obligations of the seller,” contain a comprehensive
treatment of the Convention’s rules on the seller’s duties under an international sales contract governed by the CISG. The
chapter begins with a single provision describing in broad strokes the seller’s obligations (article 30), followed by three
sections that elaborate on the constituent elements of those obligations: Section I, “Delivery of the goods and handing over
of documents” (articles 31-34); Section II, “Conformity of the goods and third party claims” (articles 35-44); and Section
III, “Remedies for breach of contract by the seller” (articles 45-52). Chapter II of Part III generally parallels Chapter III
(“Obligations of the buyer”, articles 53-65) of Part III in both structure and focus.
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 30
The seller must deliver the goods, hand over any documents relating to them and transfer
the property in the goods, as required by the contract and this Convention.
Overview: Meaning and purpose
of the provision
1. Article 30 identifies and summarizes the main duties
that the seller is obliged to fulfil. The seller is also bound
to perform any additional obligations provided for in the
contract, as well as duties mandated by a usage or practice
between the parties as provided in article 9. Such additional
obligations could include, for example, a contractual duty
to deliver exclusively to the buyer.1
Obligation to deliver
2. Article 30 provides that the seller is obliged to deliver
the goods. In several instances parties to a contract governed by the Convention have specified the duty to deliver
by using a price-delivery term (such as one defined in the
Incoterms), which then prevails over the rules of the
Convention.2
Obligation to hand over documents
3. Article 30 obliges the seller to hand over documents
relating to the goods, but does not itself impose a duty on
the seller to arrange for the issuance of such documents.3
Obligation to transfer property
4. Although the Convention “is not concerned with the
effect which the contract may have on the property in the
goods sold” (article 4 (b)), the seller’s principal obligation
under article 30 is to transfer the property in the goods to
the buyer. Whether the property in the goods has in fact
been transferred to the buyer is not a question governed by
the Convention; it must be determined by reference to the
law designated by the rules of private international law of
the forum. In addition, the effect of a retention of title
clause on the property in the goods is not governed by the
Convention,4 but rather by the law designated by the rules
of private international law of the forum. One court has
stated, however, that whether a retention of title clause has
been validly agreed upon, and whether an alleged retention
of title constitutes a breach of contract, must be determined
by reference to the rules of the Convention.5
Other obligations
5. The Convention itself provides for seller obligations not
mentioned in article 30. These include the duties described
in Chapter V (articles 71-88, on obligations common to the
buyer and the seller), and obligations derived from usages
or practices between the parties as provided in article 9.
Notes
1
See, e.g., CLOUT Case No. 2 [Oberlandesgericht Frankfurt, Germany, 17 September 1991], Neue Juristische Wochenschrift 1992,
633.
2
Compare, e.g., CLOUT case No. 244 [Cour d’appel, Paris, France, 4 March 1998] (Incoterm EXW used) (see full text of the decision); CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998] (Incoterm DDP used). See also paragraphs  3,
5 and 11 of the Digest for article 31.
3
The seller’s obligation to hand over documents relating to the goods is further particularized in article 34
4
CLOUT case No. 226 [Oberlandesgericht Koblenz, Germany, 16 January 1992].
5
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995].
Part three. Sale of goods
93
Section I of Part III, Chapter II
Delivery of the goods and handing over of documents (articles 31-34)
Overview
1. Section I of Chapter II (“Obligations of the seller”) in
Part III (“Sale of goods”) of the Convention contains provisions elaborating on two of the seller’s primary obligations
described in article 30 of the CISG: the obligation to deliver
the goods, and the obligation to hand over documents relating to the goods. Of the four articles within Section I, the
first three (articles 31-33) focus on the seller’s obligation
to deliver the goods and the final article (article 34) deals
with the seller’s obligation to hand over documents. The
provisions dealing with delivery of the goods contain rules
governing the place of delivery (article 31),1 the seller’s
supplementary delivery obligations where carriage of the
goods is involved (article 32),2 and the time for delivery
(article 33). Several of the rules within these articles are
addressed specifically to delivery by carrier.3 The Section  I
provision dealing with handing over of documents (article  34) addresses the time and place of such handing over,
the form of the documents, and curing lack of conformity
in the documents. Provisions dealing with conformity of
delivered goods (as well as with the effect of third party
claims to delivered goods) are contained in a different division—Section II (articles 35-44)—of Part III Chapter II.
Relation to other parts
of the Convention
2. The provisions of Section I interrelate with the Convention’s rules on passing of risk (articles 66-70).4 They
may also apply to obligations beyond the seller’s obligation
to deliver goods and hand over documents, such as a buyer’s obligation to return goods5 or a seller’s non-delivery
duties linked to the time of delivery.6 The Section I rules
may also be relevant to legal rules outside the Convention,
including jurisdictional laws keyed to the place of delivery
of goods.7
3. Under CISG article 6, party autonomy generally prevails over the rules of the Convention, and that is true of
the rules in Section I.8
Notes
1
Article 31 and decisions applying it also shed light on what constitutes delivery. See the Digest for art. 31, paras. 1, 7, 9 and 10.
The matters covered in article 32 are the seller’s obligation to give notice of shipment (art. 32 (1)), to arrange for appropriate means
of delivery using “usual” terms (art. 32 (2)), and to provide information the buyer needs to effect insurance if the seller itself is not
obligated to insure the shipment (art. 32 (3)).
2
3
See arts. 31 (a), 32,
4
See the Digest for Chapter IV of Part III, para. 2.
5
See the Digest for art. 31, para. 4.
6
See the Digest for art. 33, para. 2.
7
See the Digest for art. 31, para. 2.
8
See the Digest for art. 30, para. 2; the Digest for article 31, para. 3; the Digest for article 33, para. 1.
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 31
If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists:
(a) If the contract of sale involves carriage of the goods—in handing the goods
over to the first carrier for transmission to the buyer;
(b) If, in cases not within the preceding subparagraph, the contract relates to
specific goods, or unidentified goods to be drawn from a specific stock or to be manufactured or produced, and at the time of the conclusion of the contract the parties knew
that the goods were at, or were to be manufactured or produced at, a particular place—in
placing the goods at the buyer’s disposal at that place;
(c) In other cases—in placing the goods at the buyer’s disposal at the place where
the seller had his place of business at the time of the conclusion of the contract.
Overview
Sales involving carriage (article 31 (a))
1. The article specifies the place of performance of the
seller’s duty of delivery. The provision fixes where the
seller has to deliver the goods and what the seller has to
do for that purpose. Article 31 addresses three different
cases for which different rules apply. The general rule,
however, appears to be that the seller’s place of business
is the presumed place of delivery.1
5. The first alternative of article 31 applies only if the
contract involves carriage of the goods. For sales at a
distance it has been held that article 31 (a) ordinarily is
applicable.9 Carriage of the goods is presumed to be
involved if the parties have envisaged (or if it is clear
from the circumstances)10 that the goods will be transported by independent carrier(s) from the seller to the
buyer. Therefore, shipment contracts (e.g., contracts that
include price-delivery terms such as FOB, CIF or other
F- or C-terms as defined in the Incoterms) as well as
destination contracts (e.g., contracts that include DES or
other D-terms as defined in the Incoterms) involve carriage of the goods.11
General remarks
2. Under some procedural rules, such as the ones based
upon article 5 (1) of the 1968 Brussels and 1988 Lugano
Conventions,2 article 31 can be the basis for jurisdiction.3
Such jurisdiction extends to claims concerning breach of
the duty to deliver, as well as claims relating to the delivery
of non-conforming goods.4
3. The rules formulated in article 31 apply only when the
parties have not agreed otherwise, as party autonomy prevails over article 31.5 Many court decisions applying article  31 deal with the construction of contract terms in order
to decide whether those terms fix a place of performance
or merely allocate the costs of transportation. If a pricedelivery term (such as a term defined in the Incoterms) is
included in the contract, it defines the place of performance
and excludes the Convention’s rule.6
4. Article 31 has also been used to determine the place
of delivery when the buyer must return goods after the
contract has been avoided (article 81 (2)).7 This has led to
the result that, if not otherwise provided for in the contract,
the buyer must re-deliver the goods at the buyer’s place of
business.8
6. Article 31 (a) only applies if it is neither the seller’s
nor the buyer’s own obligation under the contract to transport the goods from the seller’s place of business (or from
where they are located) to the buyer’s place of business
(or wherever specified by the buyer).12 When applicable,
article  31  (a) does not imply that the seller itself must
deliver the goods to the destination. On the contrary, the
seller has duly performed its duty of delivery under article
31  (a) when the goods are handed over to the carrier.13 If
several carriers are involved in delivering the goods, handing over to the first carrier constitutes delivery under
article  31  (a).14
7. “Handing over,” as the phrase is used in article 31 (a),
means that the carrier is given possession of the goods.15
The handing over of documents relating to the goods does
not appear to constitute handing over the goods themselves,
and does not constitute delivery of the goods unless otherwise agreed by the parties.16
Part three. Sale of goods
Sale of goods located at a particular
place (article 31 (b))
8. The second alternative of article 31 applies when three
requirements are met: first, delivery as per the contract must
not involve carriage of the goods in the sense of article  31  (a)—so that it is the buyer’s task to get possession
of the goods; second, the goods sold must be specific
goods, goods of a specific stock, or goods to be manufactured or produced; third, both parties must have known
when the contract was concluded that the goods were
located at (or were to be manufactured or produced at) a
particular place. If those conditions are met, article 31 (b)
requires the seller to place the goods at the buyer’s disposal
at that particular place.17
9. Placing the goods at the buyer’s disposal means that
“the seller has done that which is necessary for the buyer
to be able to take possession.”18 The seller must therefore
arrange everything necessary for delivery in the circumstances, so that the buyer need do nothing other than take
over the goods at the place of delivery.19
Other cases (article 31 (c))
10. Article 31 (c) is a “residuary rule”.20 The provision
covers those cases which do not fall under paragraph (a)
or (b) and for which the contract does not provide a particular place of performance. Where article 31 (c) applies,
the seller must put the goods at the buyer’s disposal at the
place where the seller had its place of business when the
contract was concluded.
Contractual provisions for
the place of performance
11. Many decisions involve the construction of contract
clauses that may or may not modify the place of performance as provided in article 31. In interpreting such clauses,
the courts generally look at all the circumstances of the
case. The meaning of certain formulations can therefore
vary with the circumstances. With respect to the term EXW
(“ex works”), it has been stated that it does not vary the
place of performance provided for in article 31 (a) or (c).21
95
Under the term DDP (“delivered, duty paid”), it has been
held that the place of delivery is the buyer’s place of business.22 However, the parties can agree upon a different
place of delivery at any time. If the buyer requests that the
goods be delivered to another firm that will process them
for the buyer, the place of business of that other firm is
then the place to which the goods must be delivered.23 The
clause “free delivery (buyer’s place of business)” has been
interpreted in different ways. Two courts considered that
clause to be a mere allocation of costs that did not address
the place of performance.24 Other courts have stated the
contrary.25
A contract clause “pricing ex work Rimini/Italy” has been
held not to change the place of performance provided for
in article 31 where an Italian seller was to deliver a facility
to manufacture windows to a German buyer.26 An additional
contract provision requiring the seller to erect and run the
plant for a certain period at the buyer’s place of business,
however, led to the conclusion that the place of delivery
was that place.27 If the seller is obliged to install the delivered goods at a particular place or to erect at a particular
place a facility that it sold, that place has been regarded as
the place of delivery.28
Consequences of delivery
12. When the seller has delivered the goods it has fulfilled
its duty of delivery and is no longer responsible for the
goods. Courts regularly conclude that the risk of subsequent
damage to or loss of the goods passes to the buyer, unless
such damage or loss is intentionally or negligently caused
by the seller.29 Therefore if the seller has handed over the
goods to the first carrier, any delay in the transmission of
the goods is at the risk of the buyer, who may or may not
have a claim against the carrier.30 Similarly, if goods are
loaded on board a vessel in the designated port the seller
has performed its duty of delivery.31
Burden of proof
13. A party asserting that the contract provides for a place
of delivery other than the place provided for in article 31
must prove such agreement.32
Notes
1
In Italy the constitutionality of the corresponding domestic rule has been attacked, but has been upheld, based—among other
reasons—on its correspondence to the rule of CISG article 31 (a). CLOUT case No. 91 [Corte Constituzionale, Italy, 19 November
1992].
2
Under that article, jurisdiction exists at the place at which the obligation has actually been performed or should have been performed.
The place where the obligation should have been performed must be determined according to the applicable law, whether that law is
domestic or uniform international law. See CLOUT case No. 298 [European Court of Justice, C-288/92, 29 June 1994].
3
E.g., CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996]; Hoge Raad, the Netherlands, 26 September 1997,
Unilex; CLOUT case No. 207 [Cour de Cassation, France, 2  December 1997]; CLOUT case No. 242 [Cour de Cassation, France, 16  July
1998]; Oberster Gerichtshof, Austria, 10 September 1998, Unilex.
4
CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996] (see full text of the decision); Gerechtshof ’s-Hertogenbosch,
the Netherlands, 9 October 1995, Unilex; CLOUT case No. 244 [Cour d’appel, Paris, France, 4 March 1998]; CLOUT case No. 245
[Cour d’appel, Paris, France, 18 March 1998].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
5
CLOUT case No. 430 [Oberlandesgericht München, Germany, 3 December 1999], also in Recht der Internationalen Wirtschaft 2000,
712.
6
CLOUT case No. 244 [Cour d’appel, Paris, France, 4 March 1998] (see full text of the decision); CLOUT case No. 245 [Cour
d’appel, Paris, France, 18 March 1998].
7
Oberster Gerichtshof, Austria, 29 June 1999, Transportrecht—Internationales Handelsrecht 1999, 48. See also CLOUT case No. 594
[Oberlandesgericht Karlsruhe, Germany 19 December 2002] (principle of article 31 (c) applied to determine when buyer fulfilled its
obligations under agreement to return nonconforming goods to the seller; because seller was responsible for carriaqge of the goods,
damage to goods that occurred during transport back to the seller was seller’s responsibility).
8
Id.
9
See CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000].
10
Hoge Raad, the Netherlands, 26 September 1997, Unilex.
See the Secretariat Commentary to (then) article 29; Commentary on the draft Convention on Contracts for the International Sale
of Goods, A/CONF.97/5, reproduced in United Nations Conference on Contracts for the International Sale of Goods: Official Records,
at p. 29, para. 5.
11
12
See also the Secretariat Commentary to (then) article 29, at p. 29, paras. 5 and 8.
CLOUT case No. 331 [Handelsgericht des Kantons Zürich, Switzerland, 10 February 1999]. This is consistent with the Convention’s
rules on passing of risk in this situation. See article 67 (1).
13
14
Id. The Convention’s rules on passsing of risk confirm this point. See article 67 (1).
15
CLOUT case No. 247 [Audiencia Provincial de Córdoba, Spain, 31 October 1997] (loading on board).
Secretariat Commentary to (then) article 29, at p. 29, para. 9. Specifics of the seller’s obligation to hand over documents are provided
by Article 34.
16
17
See, e.g., CLOUT case No. 47 [Landgericht Aachen, Germany, 14 May 1993] (place of manufacture of ear devices corresponds to
the place of delivery under article 31 (b)).
18
Secretariat Commentary to (then) article 29, at p. 30, para. 16.
19
CLOUT case no. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
20
Secretariat Commentary to (then) article 29, at p. 30, para. 15.
CLOUT case No. 244 [Cour d’appel, Paris, France, 4 March 1998] (see full text of the decision); CLOUT case No. 245 [Cour
d’appel, Paris, France, 18 March 1998]. For the same result in contracts that included the German clause “ex works”, see CLOUT case
No. 311 [Oberlandesgericht Köln, Germany, 8 January 1997], and Oberster Gerichtshof, Austria, 29 June 1999, Transportrecht—
Internationales Handelsrecht 1999, 48.
21
22
CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998].
23
Id.
CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996]; Oberster Gerichtshof, Austria, 10 September 1998,
Unilex.
24
25
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992]; CLOUT case No. 311 [Oberlandesgericht Köln,
Germany, 8 January 1997], also in Unilex.
26
CLOUT case No. 430 [Oberlandesgericht München, Germany, 3 December 1999], also in Recht der Internationalen Wirtschaft 2000,
712.
27
Id.
28
CLOUT case No. 646 [Corte di Cassazione, Italy, 10 March 2000], see also Recht der Internationalen Wirtschaft 2001, 308.
29
See the Convention’s rules on passing of risk (Part III, Chapter IV, Articles 66-70).
CLOUT case No. 331 [Handelsgericht des Kantons Zürich, Switzerland, 10 February 1999]; similarly CLOUT case No. 377 [Landgericht Flensburg, Germany, 24 March 1999].
30
31
CLOUT case No. 247 [Audiencia Provincial de Córdoba, Spain, 31 October 1997].
32
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000].
Part three. Sale of goods
97
Article 32
(1) If the seller, in accordance with the contract or this Convention, hands the
goods over to a carrier and if the goods are not clearly identified to the contract by
markings on the goods, by shipping documents or otherwise, the seller must give the
buyer notice of the consignment specifying the goods.
(2) If the seller is bound to arrange for carriage of the goods, he must make such
contracts as are necessary for carriage to the place fixed by means of transportation
appropriate in the circumstances and according to the usual terms for such
transportation.
(3) If the seller is not bound to effect insurance in respect of the carriage of the
goods, he must, at the buyer’s request, provide him with all available information necessary to enable him to effect such insurance.
Overview: Meaning and purpose
of the provision
1. When the contract involves carriage of the goods (i.e.,
transporting the goods via a third party), Article 32 sets
forth obligations of the seller beyond those specified in
article 31.
2. The article states three rules: If goods are not clearly
identified (by markings on the goods, shipping documents,
or other means) as the goods covered by the contract when
they are handed over to a carrier, the seller must specify
the goods in a notice to the buyer of the consignment (paragraph 1).1 When the seller is bound to arrange for carriage
of the goods, he must make reasonable arrangments (paragraph 2); if the seller is not bound to arrange for insurance
covering the carriage of goods, he must nevertheless, at the
buyer’s requrest, provide the buyer “all available information” needed for the buyer to procure such insurance (paragraph 3).
3. One decision has applied article 32 (2).2 This provision
requires a seller who is under a duty to arrange for carriage
of the goods to choose “means of transportation appropriate
in the circumstances and according to the usual terms for
such transportation”, but the provision does not otherwise
oblige the seller to employ a particular mode of transport.
Under article 6 of the Convention, of course, the parties
could agree to a specific type of carrier. According to the
decision, the buyer in the case had failed to meet the burden
of proving an agreement to transport the goods by a particular means (truck), so that the choice of the mode of
transportation was left to the seller.3
Burden of proof
4. The party asserting an alleged agreement that would
modify or go beyond the rules of article 32 has the burden
of proving that such an agreement was concluded. Failing
sufficient proof, article  32 applies.4
Notes
1
The rules of article 32 (1) also relate to the Covnention’s rules on the passing of risk where carriage of the goods is involved. See
article 67 (2).
2
See CLOUT case No. 261 [Bezirksgericht der Sanne, Switzerland, 20 February 1997].
3
Id.
4
Id. (the buyer failed to prove an agreement that the goods would be transported to Moscow by truck).
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Article 33
The seller must deliver the goods:
(a) If a date is fixed by or determinable from the contract, on that date;
(b) If a period of time is fixed by or determinable from the contract, at any time
within that period unless circumstances indicate that the buyer is to choose a date; or
(c) In any other case, within a reasonable time after the conclusion of the
contract.
Overview
1. Article 33 specifies the time at or within which the
seller must deliver the goods. Under articles 33 (a) and
(b), the time of delivery is governed first by the provisions
of the contract, consistently with the general principle of
party autonomy adopted in the Convention.1 If no delivery
date or delivery period can be inferred from the contract,
article  33  (c) states a default rule requiring delivery
“within a reasonable time after the conclusion of the
contract.”
2. Although article 33 addresses only the duty to
deliver, its approach is applicable to other duties of the
seller, which also must be performed at the time provided in the contract or, absent such a provision, within
a reasonable time.
Delivery date fixed or determinable
from the contract
3. Article 33  (a) presupposes that the parties have fixed a
date for delivery,2 or that such a date can be inferred from
the contract (e.g., “15 days after Easter”) or determined by
reference to a usage or practice as provided in article 9. In
that case the seller must deliver on that fixed date.3 Delivery
at a later time constitutes a breach of contract.
4. According to one court, article 33  (a) also applies
where the parties did not at the time of contract conclusion
fix a specific date of delivery, but instead agreed that the
seller should deliver at the request of the buyer.4 If the
buyer does not request delivery, however, the seller is not
in breach.5
Fixed period for delivery
5. Article 33  (b) applies where either the parties have
fixed a period of time during which the seller can deliver
the goods, or such a period can be inferred from the contract. In such cases, article 33 (b) provides that the seller
may deliver at any date during that period.
6. For purposes of article 33 (b), a period for delivery is
fixed, e.g., by a contract clause providing for delivery
“until: end December”.6 Under this clause, delivery at some
point between the conclusion of the contract and the end
of December would conform to the contract, whereas delivery after 31 December would constitute a breach of contract. Similarly, if delivery is to be “effected in 1993-1994”,7
delivery any time between 1 January 1993 and 31  December 1994 constitutes timely performance.8 Where the contract provides for a delivery period the right to choose the
specific date of delivery generally rests with the seller.9 For
the buyer to have the right to specify a delivery date within
the period, an agreement to that effect is necessary,10 as the
last clause of article 33 (b) suggests. In one case, a court
assumed arguendo that a contract provision calling for for
delivery in “July, August, September + -” might require
delivery of one third of the contracted-for quantity during
each of the specified months.11
Delivery within a reasonable time after
conclusion of the contract
7. Article 33 (c) applies where a specific time or period
for delivery cannot be derived from the contract or from
usages or practices between the parties. In that case, article  33 (c) requires the seller to deliver “within a reasonable
time after the conclusion of the contract”. “Reasonable”
means a time adequate in the circumstances. Delivery of a
bulldozer two weeks after the seller received the first instalment on the price has been held reasonable.12 Where a
contract concluded in January contained the delivery term
“April, delivery date remains reserved”,13 the court held that
article 33 (c) applied and delivery was due within a reasonable time after the contract was concluded because a concrete delivery date or period could not be determined from
the contract: because the buyer had made it clear that he
needed delivery by 15 March, the reasonable time was held
to have expired before 11 April.14
What constitutes delivery
8. To timely fulfil the obligation to deliver, the seller must
perform, in compliance with the deadlines established
Part three. Sale of goods
under article 33, all delivery obligations required by the
contract or under articles 31, 32 or 34. Unless otherwise
agreed, article 33 does not require that the buyer be able
to take possession of the goods on the date of delivery.15
Consequences of late delivery
9. Delivery after the date or period for delivery is a breach
of contract to which the Convention’s rules on remedies
apply. If timely delivery was of the essence of the contract,
late delivery amounts to a fundamental breach, and the
contract can be avoided as provided in Article 49.16 According to one decision, a one day delay in the delivery of a
small portion of the goods does not constitute a fundamental breach even where the parties had agreed upon a fixed
99
date for delivery.17 The parties, however, can provide in
their contract that any delay in delivery is to be treated as
a fundamental breach.18
10. A seller’s declaration that it would not be able to
deliver the goods on time, it has been held, constituted an
anticipatory breach of contract in the sense of article 71.19
Burden of proof
11. A party asserting that a date or a period for delivery
has been agreed upon must prove such agreement.20 A buyer
who asserts that it has the right to choose a specific delivery
date within an agreed period for delivery must prove an
agreement or circumstances supporting the assertion.21
Notes
1
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
2
See the example in Corte di Appello di Milano, Italy, 20 March 1998, Unilex (“Delivery: 3rd  December, 1990”).
3
See the Secretariat Commentary to (then) article 31, p. 31, para. 3.
4
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998] (see full text of the decision).
Id. (contract provided that the seller would deliver according to delivery schedules drawn up by the buyer, but the buyer apparently
never provided the schedules) (see full text of the decision).
5
6
70.
See the case in ICC Court of Arbitration, January 1997, award No. 8786, ICC International Court of Arbitration Bulletin 2000,
7
See ICC Court of Arbitration, France, March 1998, award No. 9117, ICC International Court of Arbitration Bulletin 2000, 83.
8
Id.
9
Id.
10
Id.; impliedly also CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
11
CLOUT case No. 7 [Amtsgericht Oldenburg in Holstein, Germany, 24 April 1990].
CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997]. Another decision found that the seller delivered
within a reasonable time despite the seasonal (Christmas-related) character of the goods: CLOUT case No. 210 [Audienca Provincial,
Barcelona, Spain, 20 June 1997].
12
13
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999].
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (the court found that the the buyer’s offer, which
required delivery by “March 15”, was not materially altered by the seller’s acceptance stating a delivery term of “April, delivery date
reserved”.; since the offeror did not object to the terms of the acceptance, a contract had been formed under article 19 (2) and the varying term in the acceptance became part of the contract).
14
15
See the Secretariat Commentary to (then) article 31, p. 31, para. 2; also Landgericht Oldenburg, Germany, 27 March 1996,
Unilex.
16
ICC Court of Arbitration, January 1997, award No. 8786, ICC International Court of Arbitration Bulletin 2000, 70.
17
Landgericht Oldenburg, Germany, 27 March 1996, Unilex.
ICC Court of Arbitration, January 1997 award No. 8786, ICC International Court of Arbitration Bulletin 2000, 70 (the general conditions of the buyer, to which the parties had agreed, provided that any delay in delivery constituted a fundamental breach of
contract).
18
19
ICC Court of Arbitration, January 1997, award No. 8786, ICC International Court of Arbitration Bulletin 2000, 72.
20
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (see full text of the decision).
21
ICC Court of Arbitration, France, March 1998, award No. 9117, ICC International Court of Arbitration Bulletin 2000, 90.
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Article 34
If the seller is bound to hand over documents relating to the goods, he must hand them
over at the time and place and in the form required by the contract. If the seller has
handed over documents before that time, he may, up to that time, cure any lack of
conformity in the documents, if the exercise of this right does not cause the buyer
unreasonable inconvenience or unreasonable expense. However, the buyer retains any
right to claim damages as provided for in this Convention.
Overview: Meaning and purpose
of the provision
1. Article 34 addresses the seller’s duty to deliver documents relating to the goods being sold, where such an obligation exists.
2. According to the first sentence of article 34, the documents must be tendered at the time and place, and in the
form, required by the contract. The second sentence provides that, if the seller has delivered non-conforming documents before the agreed time, he has the right to cure the
defects if this would not cause the buyer unreasonable
inconvenience or expense. Under the final sentence of the
provision, however, the buyer can claim any damages suffered despite the seller’s cure.
Handing over of documents
6. Article 34 requires that the place, time and manner
of handing over the documents comply with the contract.5 Where price-delivery terms (such as Incoterms)
are agreed upon, they will often fix these modalities.
With regard to the Incoterm CFR (“cost, freight”), one
arbitral tribunal has held that that clause does not render
the time for handing over documents of the essence of
the contract.6 If neither the contract nor trade usages nor
practices between the parties provide specific modalities
for handing over the documents, the seller must tender
the documents “in such time and in such form as will
allow the buyer to take possession of the goods from the
carrier when the goods arrive at their destination, bring
them through customs into the country of destination
and exercise claims against the carrier or insurance
company.”7
Documents relating to the goods:
definition and obligation to deliver
3. Article 34 applies when “the seller is bound to hand
over documents relating to the goods,” but the provision
does not specify when the seller has that obligation nor
does it further define the documents to which it refers. The
contract generally provides for what documents must be
handed over, which it can do, e.g., by incorporating particular price-delivery terms, including price-delivery terms
defined in the Incoterms. In one case the court concluded
that, under an FOB term the seller is obliged to provide
the buyer with an invoice stating the quantity and value of
the goods.1 Trade usages and practices between the parties
may also dictate which documents must be provided.
4. “Documents relating to the goods” in the sense of article
34 include, in the main, documents that give their holders
control over the goods, such as bills of lading, dock receipts
and warehouse receipts,2 but they also include insurance policies, commercial invoices, certificates (e.g., of origin, weight,
contents or quality), and other similar documents.3
5. It has been found that the seller is usually not obliged
to procure customs documents for the export of the goods,
unless the parties agree otherwise.4
Non-conforming documents
7. The handing over of non-conforming documents constitutes a breach of contract to which the normal remedies
apply.8 Provided the breach is of sufficient gravity it can
amount to a fundamental breach, thus permitting the buyer
to declare the contract avoided.9 However, delivery of nonconforming documents (a false certificate of origin and a
faulty certificate of chemical analysis) has been found not
to constitute fundamental breach if the buyer itself can
easily cure the defect by requesting accurate documents
from the producer.10
Early tender of documents
8. If the seller has handed over non-conforming documents before the time the documents are due, article 34
permits the seller to cure the lack of conformity provided
the cure is accomplished by the due date and the buyer
is not caused unreasonable inconvenience or expense.
The cure may be effected by delivery of conforming
documents.11
Part three. Sale of goods
101
Notes
1
COMPROMEX Arbitration, Mexico, 29 April 1996, Unilex.
Secretariat Commentary to (then) article 32, p. 31, para. 2; see also CLOUT case No. 216 [Kantonsgericht St. Gallen, Switzerland,
12 August 1997] (see full text of the decision).
2
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996] (certificate of origin and certificate of analysis); see also Secretariat
Commentary to (then) article 32, p. 31, para. 2.
3
4
CLOUT case No. 216 [Kantonsgericht St. Gallen, Switzerland, 12 August 1997].
5
See also ICC Court of Arbitration, France, March 1995, award No. 7645, ICC International Court of Arbitration Bulletin 2000,
34.
6
Id.
7
Secretariat Commentary to (then) article 32, p. 31, para. 3.
8
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996].
9
Id.
10
Id.
11
ICC Court of Arbitration, France, March 1998, award No. 9117, ICC International Court of Arbitration Bulletin 2000, 90.
Part three. Sale of goods
103
Section II of Part III, Chapter II
Conformity of the goods and third party claims (articles 35-44)
Overview
1. The second section of Chapter II of Part III of the
Convention contains provisions addressing some of the
most important seller obligations under a contract for
sale—in particular, the obligation to deliver goods that conform to the requirements of the contract and of the Convention in terms of quantity, quality, description and packaging
(article 35), as well as the duty to ensure that the goods
are free from third party claims to ownership rights (article  41) and to intellectual property rights (article 42). Other
provisions connected to the question of conformity are
included in the section, including an article governing the
relation between the timing of a defect’s occurrence and
the division of responsibility therefor between the seller
and the buyer (article 36), and a provision addressing the
seller’s right to cure a lack of conformity if goods are
delivered before the date required for delivery.
2. The section also includes provisions regulating the procedure that a buyer must follow in order to preserve claims
that the seller has violated the obligation to deliver conforming goods or to deliver goods free from third party
claims. These include a provision governing the buyer’s
duty to examine the goods following delivery (article 38)
and provisions requiring the buyer to give notice of alleged
violations of the seller’s obligations (articles 39 and 43 (1)),
as well as provisions excusing or relaxing the consequences
of a buyer’s failure to give the required notice (articles 40,
43 (2), and 44). Articles 38 and 39 have proven to be
among the most frequently-invoked (and most controversial) provisions in litigation under the Convention.
Relation to other parts
of the Convention
3. In general, the provisions in Section II of Part III,
Chapter II work in tandem with, and frequently are invoked
together with, the articles governing an aggrieved buyer’s
remedies, found in the next section (Section III, articles
45-52). Several individual provisions of Section II have a
special relation to articles or groups of articles elsewhere
in the Convention. Thus article 36, addressing the seller’s
liability for a lack of conformity in terms of when the
non-conformity occurs, is closely connected to Chapter IV
of Part III on passing of risk (articles 66-70); article 37
(seller’s right to cure a lack of conformity before the date
for delivery required under the contract) functions as a
companion to article 48 (seller’s right to cure a lack of
conformity after the required delivery date), and also is
connected to article 52 (1) (buyer’s option to accept or
refuse early delivery). The section II provisions on notice
(articles 39 and 43), of course, are subject to the rule in
article 27 that notice in accordance with Part III of the
Convention and dispatched by means appropriate in the
circumstances is effective despite “a delay or error in the
transmission … or its failure to arrive ….”
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 35
(1) The seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required
by the contract.
(2) Except where the parties have agreed otherwise, the goods do not conform
with the contract unless they:
(a) Are fit for the purposes for which goods of the same description would ordinarily be used;
(b) Are fit for any particular purpose expressly or impliedly made known to the
seller at the time of the conclusion of the contract, except where the circumstances show
that the buyer did not rely, or that it was unreasonable for him to rely, on the seller’s
skill and judgement;
(c) Possess the qualities of goods which the seller has held out to the buyer as a
sample or model;
(d) Are contained or packaged in the manner usual for such goods or, where there
is no such manner, in a manner adequate to preserve and protect the goods
(3) The seller is not liable under subparagraphs (a) or (d) of the preceding paragraph for any lack of conformity of the goods if at the time of the conclusion of the
contract the buyer knew or could not have been unaware of such lack of conformity.
Introduction
1. Article 35 of the CISG states standards for determining
whether goods delivered by the seller conform to the contract in terms of type, quantity, quality, and packaging,
thereby defining the seller’s obligations with respect to
these crucial aspects of contractual performance. Two
courts have stated that the unitary notion of conformity
defined in article 35 displaces the concepts of “warranty”
found in some domestic laws.1
2. In general, a failure by the seller to deliver goods that
meet the applicable requirements of article 35 constitutes
a breach of the seller’s obligations,2 although it has been
stated that a failure of goods to conform to the contract is
not a breach if the non-conforming goods are equal in value
and utility to conforming goods.3 A seller’s breach of its
obligations under article 35, furthermore, can in proper
circumstances rise to the level of a fundamental breach of
contract as defined in article 25 of the Convention, thus
justifying the buyer in avoiding the contract under article  49 (1) of the Convention.4
Article 35 (1)
3. Article 35 (1) requires a seller to deliver goods that meet
the specifications of the contract in terms of description,
quality, quantity and packaging. Thus it has been found
that a shipment of raw plastic that contained a lower percentage of a particular substance than that specified in the
contract, and which as a result produced window blinds
that did not effectively shade sunlight, did not conform to
the contract, and the seller had therefore breached its obligations.5 It has also been found that a shipment of goods
containing less than the quantity specified in the contract
lacks conformity under article 35 (1); the court noted that
a lack of “conformity” encompasses both a lack of quality
in the goods delivered and a lack of quantity.6 A used car
that had been licensed two years earlier than indicated in
the car’s documents and whose odometer did not state the
full mileage on the car was found to be non-conforming
under article 35 (1).7 On the other hand, one court has
concluded that there was no violation of article 35 (1) when
the seller delivered shellfish containing a high level of cadmium because the parties did not specify a maximum cadmium level in their agreement.8
4. In ascertaining, for purposes of article 35 (1), whether
the contract requires goods of a particular quantity, quality
or description, or requires that the goods be contained or
packaged in a particular manner, one must refer to general
rules for determining the content of the parties’ agreement.9
In this connection, one court, on appeal of the decision
concerning shellfish with high cadmium levels mentioned
in the previous paragraph, found that the seller had not
Part three. Sale of goods
impliedly agreed to comply with recommended (but not
legally mandatory) domestic standards for cadmium in the
buyer’s country.10 As the court reasoned, the mere fact the
seller was to deliver the shellfish to a storage facility
located in the buyer’s country did not constitute an implied
agreement under article 35  (1) to meet that country’s standards for resaleability, or to comply with its public law provisions governing resaleability.11
Article 35 (2): Overview
5. Article 35  (2) states standards relating to the goods’
quality, function and packaging that, while not mandatory,
are presumed to be a part of sales contracts. In other words,
these standards are implied terms that bind the seller even
without affirmative agreement thereto. If the parties do not
wish these standards to apply to their contract, they can
(in the words of article 35) “agree[...] otherwise.”12 Unless
the parties exercise their autonomous power to contract out
the standards of article  35  (2), they are bound by them.13
An arbitral tribunal has found that an agreement as to the
general quality of goods did not derogate from article  35  (2)
if the agreement contained only positive terms concerning
the qualities that the goods would possess, and not negative
terms relieving the seller of responsibilities.14 One court
applied domestic law to invalidate a particular contract
clause that attempted to exclude the seller’s liability for a
lack of conformity in the goods: the court held that the
question of the validity of such a clause is an issue beyond
the scope of the CISG, and is governed by the domestic
law applicable under private international law rules.15
6. Article 35  (2) is comprised of four subparts. Two of
the subparts (article  35  (2)  (a) and article 35  (2)  (d)) apply
to all contracts unless the parties have agreed otherwise.
The other two subparts (article 35  (2)  (b) and article  35  (2)  (c)) are triggered only if certain factual predicates
are present. The standards stated in these subparts are
cumulative—that is, the goods do not conform to the contract unless they meet the standards of all applicable
subparts.
Article 35 (2) (a)
7. Article 35  (2)  (a) requires the seller to deliver goods
“fit for the purposes for which goods of the same description would ordinarily be used.” It has been held that this
standard was violated when the seller delivered a refrigeration unit that broke down soon after it was first put into
operation.16 The standard was also found violated when the
seller delivered wine that had been diluted with 9 per cent
water, causing domestic authorities to seize and destroy the
wine,17 and when the seller delivered chaptalized wine.18 It
was also found violated where the seller substituted a different component in a machine without notifying the buyer
and without giving the buyer proper instructions for installation; as a result, the machine failed after three years of
use, thus disappointing the buyer’s expectation for “long,
continuous operation of the [machine] without failure.”19
8. The standard of article 35  (2)  (a), however, requires
only that the goods be fit for the purposes for which they
105
are ordinarily used. It does not require that the goods be
perfect or flawless, unless perfection is required for the
goods to fulfil their ordinary purposes.20 One court has
raised but not resolved the issue of whether article 35  (2)  (a)
requires goods of average quality, or goods of merely “marketable” quality.21
9. Several decisions have discussed whether conformity
with article 35  (2)  (a) is determined by reference to the
quality standards prevailing in the buyer’s jurisdiction.
According to one decision, the fact that the seller is to
deliver goods to a particular jurisdiction and can infer that
they will be marketed there is not sufficient to impose the
standards of the importing jurisdiction in determining suitability for ordinary purposes under article 35  (2)  (a).22 Thus
the fact that mussels delivered to the buyer’s country contained cadmium levels exceeding the recommendations of
the health regulations of the buyer’s country did not establish that the mussels failed to conform to the contract under
article 35  (2)  (a).23 The court indicated that the standards
in the importing jurisdiction would have applied if the same
standards existed in the seller’s jurisdiction, or if the buyer
had pointed out the standards to the seller and relied on
the seller’s expertise.24 The court raised but did not determine the question whether the seller would be responsible
for complying with public law provisions of the importing
country if the seller knew or should have known of those
provisions because of “special circumstances”—e.g., if the
seller maintained a branch in the importing country, had a
long-standing business connection with the buyer, often
exported into the buyer’s country, or promoted its products
in the importing country.25 A court from a different country,
citing the aforementioned decision, refused to overturn an
arbitral award that found a seller in violation of article  35  (2)  (a) because it delivered medical devices that
failed to meet safety regulations of the buyer’s jurisdiction:26 the court concluded that the arbitration panel acted
properly in finding that the seller should have been aware
of and was bound by the buyer’s country’s regulations
because of “special circumstances” within the meaning of
the opinion of the court that rendered the aforementioned
decision. A different court has found that a seller of cheese
was required to comply with the buyer’s country’s standards because it had had dealings with the buyer for several
months, and therefore must have known that the cheese
was destined for the market in the buyer’s country;27 the
seller, therefore, violated its obligations under CISG article  35 when it delivered cheese that did not have its composition marked on the packaging, as required by the
buyer’s country’s marketing regulations.
Article 35 (2) (b)
10. Article 35  (2)  (b) requires that goods be fit for “any
particular purpose expressly or impliedly made known to
the seller at the time of the conclusion of the contract.”
The article 35  (2)  (b) obligation arises only if one or more
particular purposes were revealed to the seller by the time
the contract was concluded. In addition, the requirements
of article 35  (2)  (b) do not apply if “the circumstances show
that the buyer did not rely, or that it was unreasonable for
him to rely, on the seller’s skill and judgement.” With
regard to the latter reliance element, one court has stated
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
that in the usual case, a buyer cannot reasonably rely on
the seller’s knowledge of the importing country’s public
law requirements or administrative practices relating to the
goods, unless the buyer pointed such requirements out to
the seller.28 The court therefore found that mussels with
cadmium levels exceeding the recommendations of German
health regulations did not violate the requirements of article  35  (2)  (b) where there was no evidence that the buyer
had mentioned the regulations to the seller. By so holding,
the court affirmed the decision of a lower court that the
seller had not violated article 35  (2)  (b) because there was
no evidence that the parties implicitly agreed to comply
with the buyer’s country’s health recommendations.29 On
the other hand, one court has found that a seller violated
article 35  (2)  (b) when it delivered skin care products that
did not maintain specified levels of vitamin A throughout
their shelf life.30 The court found that the buyer intended
to purchase products with the specified vitamin levels, that
“the special purpose . . . was known by the [seller] with
sufficient clarity,” and that “the buyer counted on the seller’s expertise in terms of how the seller reaches the required
vitamin A content and how the required preservation is
carried out.”
Article 35 (2) (c)
11. Article 35  (2)  (c) requires that, in order to conform to
the contract, goods must “possess the qualities of goods
which the seller has held out to the buyer as a sample or
model.” Several courts have found that delivered goods
violated this provision.31 Article 35  (2)  (c), by its terms,
applies if the seller has held out a sample or model to the
buyer, unless the parties “have agreed otherwise.” One
court has nevertheless indicated that the goods must conform to a model only if there is an express agreement in
the contract that the goods will do so.32 On the other hand,
it has been held that the provision applies even if it is the
buyer rather than the seller that has provided the model,
provided that the parties agreed that the goods should conform to the model.33
Article 35 (2) (d)
12. Article 35  (2)  (d) supplements the last clause of article  35  (1), which requires that the goods be “contained or
packaged in the manner required by the contract.” Several
cases have found that improperly packaged goods failed to
conform to the contract under article 35  (2)  (d). Where a
seller sold cheese that it knew would be resold in the buyer’s country, and the cheese was delivered in packaging
that did not comply with that country’s food labelling regulations, the goods were deemed non-conforming under article 35  (2)  (d).34 In another case, a seller of canned fruit was
found to have violated article 35 where the containers were
not adequate to prevent the contents from deteriorating after
shipment.35
Article 35 (3)
13. Article 35  (3) relieves the seller of responsibility for a
lack of conformity under article 35  (2) to the extent that
the buyer “knew or could not have been unaware” of the
non-conformity at the time the contract was concluded.36
Under this provision, a buyer has been held to have assumed
the risk of defects in a used bulldozer that the buyer
inspected and tested before purchasing.37 One court has
stated that, under article 35  (3), a buyer who elects to purchase goods despite an obvious lack of conformity must
accept the goods “as is.”38 The rule of article  35  (3), however, is not without limits. Where a seller knew that a used
car had been licensed two years earlier than indicated in
the car’s documents and knew that the odometer understated the car’s actual mileage but did not disclose these
facts to the buyer, the seller was liable for the lack of
conformity even if the buyer (itself a used car dealer)
should have detected the problems.39 Citing articles 40
and  7  (1), the court found that the Convention contains a
general principle favouring even a very negligent buyer
over a fraudulent seller.
Burden of proof
14. A number of decisions have discussed who bears the
burden of proving that goods fail to conform to the contract
under article 35. One court has twice indicated that the
seller bears that burden.40 On the other hand, several tribunals have concluded that the buyer bears the burden of
proving lack of conformity, although the decisions adopt
different theories to reach that result. For example, after
noting that the CISG does not expressly address the burden
of proof issue, one arbitral tribunal applied domestic law
to allocate the burden to the buyer as the party alleging a
lack of conformity.41 Other courts have concluded that the
Convention itself, although it does not expressly answer
the burden of proof question, contains a general principle
that the party who is asserting or affirming a fact bears the
burden of proving it, resulting in an allocation of the burden
to a buyer who asserts that goods did not conform to the
contract.42 Some decisions suggest that the burden of proof
varies with the context. Thus, one court has stated that the
buyer bears the burden of proving a lack of conformity if
it has taken delivery of the goods without giving immediate
notice of non-conformity.43 Similarly, another court has
indicated that the seller bears the burden of proving that
goods were conforming at the time risk of loss passed, but
the buyer bears the burden of proving a lack of conformity
after the risk shifted if it has accepted the goods without
immediately notifying the seller of defects.44
Evidence of lack of conformity
15. Several decisions address evidentiary issues relating to
a lack of conformity under article 35. Direct evidence that
the standards of article 35 were violated has been adduced
and accepted by courts in several instances. Thus a showing
that delivered wine had been seized and destroyed by
authorities in the buyer’s country because it had been
diluted with water was accepted by the court as establishing
that the wine did not conform with the contract for sale.45
Similarly, one court has found that, once the buyer established that a refrigeration unit had broken down shortly
after it was first put into operation, the seller was presumed
to have violated article  35  (2)  (a) and thus bore the burden
Part three. Sale of goods
of showing it was not responsible for the defects.46 Expert
opinion has also been accepted as establishing a lack of
conformity,47 although the results of an investigation into
the quality of the goods have been held insufficient to
establish a lack of conformity where the buyer ignored a
trade usage requiring that the seller be permitted to be
present at such investigations.48 On the other hand, it has
been found that the early failure of a substituted part in a
machine did not by itself establish that the machine was
not in conformity with the contract, since the failure might
have been due to improper installation.49 Furthermore, a
buyer’s failure to complain of obvious defects at the time
the goods were received has been taken as affirmative evidence that the goods conformed to the contract.50 In another
case, deliveries of allegedly non-conforming chemicals had
been mixed with earlier deliveries of chemicals; thus, even
though the buyer showed that glass produced with the
chemicals was defective, it could not differentiate which
deliveries were the source of the defective chemicals; and
107
since the time to give notice of non-conformity for the
earlier deliveries had expired, the buyer failed to prove a
lack of conformity.51 Another court has held, as an alternative ground for dismissing the buyer’s claim, that the evidence did not establish whether the goods’ non-conformities
arose before or after risk of loss passed to the buyer.52
Finally, it has been found that a seller’s offer to remedy
any defects in the goods did not constitute an admission
that the goods lacked conformity.53
Jurisdictional issues
16. For purposes of determining jurisdiction under article  5  (1) of the Brussels Convention, several courts have
concluded that the conformity obligation imposed on the
seller by CISG article 35 is not independent of the obligation to deliver the goods, and both obligations are performed at the same place.54
Notes
CLOUT case No. 256 [Tribunal Cantonal du Valais, Switzerland, 29 June 1998] (see full text of the decision); CLOUT case No. 219
[Tribunal Cantonal Valais, Switzerland, 28 October 1997] (see full text of the decision).
1
See, e.g., CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision), (stating that a fundamental breach of contract “can be caused by a delivery of goods that do not conform with the contract”); Landgericht Paderborn,
Germany, 25 June 1996, Unilex (stating that the seller had breached its obligations by delivering goods that failed to conform to the
technical specifications of the contract).
2
3
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998].
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision); CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994]. See also Tribunale di Busto Arsizio, Italy, 13 December 2001, published in Rivista
di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available on Unilex (delivery of a machine totally unfit for the
particular use made known to the seller and which was incapable of reaching the promised production level represented a “serious and
fundamental” breach of the contract, because the promised production level had been an essential condition for the conclusion of the
contract; the breach was therefore a basis for avoiding the contract).
4
5
Landgericht Paderborn, Germany, 25 June 1996, Unilex.
6
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997].
7
CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996].
8
CLOUT case No. 84 [Oberlandesgericht Frankfurt a.M., Germany, 20 April 1994].
Such general rules include the CISG provisions pertaining to the meaning and content of a contract for sale, including article 8
(standards for determining a party’s intent) and article 9 (usages and practices to which the parties are bound).
9
10
CLOUT case no. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision).
11
Id. (see full text of the decision).
The parties’ power to contract out of the implied standards of article 35 (2) (i.e., to agree otherwise) is a specific application of the
parties’ power under article 6 to “derogate from or vary the effect of any of [the Convention’s] provisions.” See CLOUT case No. 229
[Bundesgerichtshof, Germany, 4 December 1996]. (“If the [buyer] has warranty claims against the seller—and of what kind—primarily
depends upon the warranty terms and conditions of [seller], which became part of the contract. They have priority over the CISG provisions (CISG Art. 6).”) (see full text of the decision).
12
One court of first instance has held that machinery was sold “as is”—in effect, without the protections of article  35 (2) (a)—because
it was second-hand, but the court of appeal chose not to rely on this approach and instead affirmed this portion of the lower court decision on other grounds. See Oberlandesgericht Köln, Germany, 8 January 1997, Unilex, affirming in relevant part Landgericht Aachen,
Germany, 19 April 1996.
13
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce 5 June 1998] (see full text of the
decision).
14
CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996]. See also Supermicro Computer, Inc. v. Digitechnic, S.A.,
145 F. Supp. 2d 1147 (N.D. Cal. 2001), wherein a United States District Court declined to hear a dispute that was already subject to
litigation in France because resolving the matter would require the court to determine the validity of a warranty disclaimer clause under
the CISG (145 F. Supp. 2d at 1151).
15
16
CLOUT case No. 204 [Cour d’appel, Grenoble, France, 15 May 1996].
17
CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995].
108
18
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Cour de Cassation, France, 23 January 1996, Unilex.
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
19
20
ICC Arbitration Case No. 8247, June 1996, International Court of Arbitration Bulletin, vol. 11, p. 53 (2000) (microcrystalline
chemicals that had solidified but could easily be re-transformed into crystals did not fail to conform to the contract); CLOUT case
No.  252 [Handelsgericht des Kantons Zürich, Switzerland, 21 September 1998] (one misplaced line of text, which did not interfere with
the comprehensability of the text, did not render an art exhibition catalogue non-conforming); CLOUT case No. 341 [Ontario Superior
Court of Justice, Canada, 31 August 1999] (shipments containing a small percentage of defective picture frame mouldings did not fail
to conform to the contract when the evidence indicated that shipments from any supplier would include some defective mouldings) (see
full text of the decision).
21
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision). One court has stated that, to
comply with article 35 (2) (a), goods must be of average quality, and not merely marketable; see Landgericht Berlin, Germany,
15 September 1994, Unilex. Compare Netherlands Arbitration Institute, Arbitral Award, No. 2319, 15 October 2002, Unilex (rejecting
both average quality and merchantability tests, and applying a “reasonable quality” standard).
22
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (“a foreign seller can simply not be required to know the not
easily determinable public law provisions and/or administrative practices of the country to which he exports, and . . . the purchaser,
therefore, cannot rationally rely upon such knowledge of the seller, but rather, the buyer can be expected to have such expert knowledge
of the conditions in his own country or in the place of destination, as determined by him, and, therefore, he can be expected to inform
the seller accordingly”). The court raised but did not resolve the issue of whether goods must meet the standards of the seller’s own
jurisdiction in order to comply with article 35 (2) (a) (see full text of the decision).
Id. Compare CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000], where a Swiss purchaser of video recorders
complained that the German seller had only supplied instruction booklets in German and not in the other languages spoken in Switzerland. The court rejected the argument because the recorders had not been produced specially for the Swiss market and the buyer had
failed to stipulate for instruction booklets in other languages.
23
24
In a later decision involving vine wax that failed to protect vines grafted using the wax, the German Supreme Court found that the
wax did not meet the requirements of article 35 (2) (a) because it “did not meet the industry standards—of which both parties were
aware and which both parties applied...”. CLOUT case No. 272 [Oberlandesgericht Zweibrücken, Germany, 31  March 1998] (see full
text of the decision).
25
One court has concluded that, in the following circumstances, a Spanish seller of pepper agreed that the goods would comply with
German food safety laws: the seller had a long-standing business relationship with the German buyer; the seller regularly exported into
Germany; and in a previous contract with the buyer the seller had agreed to special procedures for ensuring compliance with German
food safety laws; Landgericht Ellwangen, Germany, 21 August 1995, Unilex. The court, citing article 35 (1), found that pepper products
containing ethylene oxide at levels exceeding that permitted by German food safety laws did not conform to the contract; it therefore
ruled in favour of the buyer, who had argued (presumably on the basis of article  35  (2)  (a)) that the pepper products “were not fit for
the purposes for which the goods would ordinarily be used and not fit to be sold in Germany.”
26
CLOUT case No. 418 [Federal District Court, Eastern District of Louisiana, United States, 17  May 1999].
27
CLOUT case No. 202 [Cour d’appel, Grenoble, France 13 September 1995].
28
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995].
CLOUT case No. 84 [Oberlandesgericht Frankfurt a.M., Germany, 20 April 1994], opinion described in CLOUT case No. 123
[Bundesgerichtshof, Germany, 8 March 1995].
29
30
Helsinki Court of First Instance, Finland, 11 June 1995, affirmed by Helsinki Court of Appeal, Finland, 30 June 1998, English
translation available on the Internet at (http://www.cisg.law.pace.edu/cisg/wais/db/cases2/980630f5.html); see also Tribunale di Busto
Arsizio, Italy, 13 December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available
on Unilex.
CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994] (holding that the goods (shoes) failed to conform
to a sample supplied by the seller, but that the lack of conformity was not shown to be a fundamental breach) (see full text of the decision); CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6 December 1993, 3 March 1995] (finding
that air conditioner compressors delivered by the seller did not conform to the contract, and that such lack of conformity constituted a
fundamental breach: “The agreement between Delchi and Rotorex was based upon a sample compressor supplied by Rotorex and upon
written specifications regarding cooling capacity and power consumption . . . The president of Rotorex . . . conceded in a May 17, 1988
letter to Delchi that the compressors supplied were less efficient than the sample . . . .”) (see full text of the decision).
31
32
Landgericht Berlin, Germany, 15 September 1994, Unilex.
33
CLOUT case No. 175 [Oberlandesgericht Graz, Austria, 9 November 1995] (see full text of the decision).
34
CLOUT case No. 202 [Cour d’appel, Grenoble, France, 13 September 1995] (see full text of the decision).
Conservas La Costella S.A. de C.V. v. Lanín San Luis S.A. & Agroindustrial Santa Adela S.A., Arbitration Proceeding before Compromex (Comisión pare la Protección del Comercio Exterior de Mexico), Mexico, 29 April 1996, Unilex. The Compromex decision did
not specifically cite CISG article 35 (2) (d).
35
36
Article 35(3) only relieves the seller of responsibility for non-conformity under article  35 (2) (a)–(d). A lack of conformity under
article 35 (1) (which requires the goods to be of “the quantity, quality and description required by the contract”) is not subject to the
rule of article  35  (3). Nevertheless, a buyer’s awareness of defects at the time the contract is concluded should presumably be taken into
account in determining what the parties’ agreement requires as to the quality of the goods. Secretariat Commentary to (then) Article 33
of the Convention, p.  32, para. 14.
Part three. Sale of goods
109
37
CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997]. After the buyer inspected the bulldozer, the parties
agreed that the seller would replace three specific defective parts. The seller replaced the parts before delivering the machine, but the
buyer then complained of other defects (see full text of the decision).
38
CLOUT case No. 256 [Tribunal Cantonal du Valais, Switzerland, 29 June 1998] (see full text of the decision).
39
CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996].
Rechtbank van koophandel Kortrijk, Belgium, 6 October 1997, Unilex; Rechtbank van koophandel Kortrijk, Belgium, 16 December
1996, available on the Internet at (http://www.law.kuleuven.ac.be/int/tradelaw/WK/1996-12-16.htm).
40
41
CLOUT case No. 103 [Arbitration—International Chamber of Commerce No. 6653 1993]. A Swiss court has acknowledged the view
that the burden of proving a lack of conformity should be allocated by applying domestic law, but it neither adopted nor rejected this
approach because the contrary view led to the same result (buyer bore the burden). CLOUT case No. 253 [Cantone del Ticino Tribunale
d’appello, Switzerland, 15 January 1998].
42
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (containing an extended discussion of the issue). To the same
general effect, see CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993]. One court has noted the
view that the Convention contains a general principle allocating the burden to the buyer, but it neither adopted nor rejected this approach
because the contrary view led to the same result (buyer bore the burden). CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello,
Switzerland, 15  January 1998]; see also Netherlands Arbitration Institute, Arbitral Award, No. 2319, 15  October 2002, Unilex. Without
expressly discussing the issue, several decisions appear to have impliedly adopted the view that the CISG allocated the burden of proving lack of conformity to the buyer. See CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria, 1  July 1994] (buyer failed to
prove that the goods did not conform to the contract); Landgericht Düsseldorf, Germany, 25 August 1994, Unilex (buyer failed to prove
lack of conformity).
43
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision). One court has found that, because
it was shown that a refrigeration unit had broken down soon after it was first put into operation, the seller bore the burden of proving
that it was not responsible for the defect. CLOUT case No. 204 [Cour d’appel, Grenoble, France, 15 May 1996].
44
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998]. See also CLOUT case No. 486
[Audiencia Provincial de La Coruña, Spain, 21 June 2002] (stating that buyer has burden of proving lack of conformity in delivered
goods, but not explaining the grounds for the statement).
45
CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (see full text of the decision).
46
CLOUT case No. 204 [Cour d’appel, Grenoble, France 15 May 1996].
CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991] (see full text of the decision). But see CLOUT case
No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] where the court rejected expert opinion evidence offered by the seller because
under Italian civil procedure law only an expert appointed by the court can offer such an opinion (see full text of the decision). For
cases in which courts appointed experts to evaluate the conformity of the goods, see CLOUT case No. 123 [Bundesgerichtshof, Germany,
8  March 1995] (reporting that the trial court had obtained an expert opinion of public health authorities on the cadmium level in mussels) (see full text of the decision); CLOUT case No. 271 [Bundesgerichtshof, Germany, 24  March 1999] (expert opinion that damage
to vines was caused by defective vine wax) (see full text of the decision); Rechtbank van Koophandel, Kortrijk, Belgium, 6 October
1997, Unilex (appointing judicial expert to determine the conformity of yarn); Rechtbank van Koophandel, Kortrijk, Belgium, 16 December 1996, available on the Internet at (http://www.law.kuleuven.ac.be/int/tradelaw/WK/1996-12-16.htm).
47
48
Helsinki Court of Appeal, Finland, 29 January 1998, available on the Internet at (http://www.utu.fi/oik/tdk/xcisg/tap4.html#engl).
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
49
50
CLOUT case No. 341 [Ontario Superior Court of Justice, Canada, 31 August 1999] (see full text of the decision).
51
CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991] (see full text of the decision).
CLOUT case No. 481 [Court d’ Appel Paris, France, 14 June 2001], affirmed on appeal in CLOUT case No. 494 [Court de Cassation, France, 24 September 2003]. Compare CLOUT case No. 486 [Audiencia Provincial de La Coruña, Spain, 21 June 2002] (stating
that buyer had not sufficiently proved that the seller delivered nonconforming goods where a pre-shipment inspection reported that they
were conforming).
52
53
CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland, 9 September 1993] (see full text of the decision).
CLOUT case No. 245 [Cour d’appel, Paris, France, 18 March 1998]; CLOUT case No. 244 [Cour d’appel, Paris, France, 4 March
1998]; CLOUT case No. 203 [Cour d’appel, Paris, France, 13 December 1995].
54
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 36
(1) The seller is liable in accordance with the contract and this Convention for
any lack of conformity which exists at the time when the risk passes to the buyer, even
though the lack of conformity becomes apparent only after that time.
(2) The seller is also liable for any lack of conformity which occurs after the time
indicated in the preceding paragraph and which is due to a breach of any of his obligations, including a breach of any guarantee that for a period of time the goods will remain
fit for their ordinary purpose or for some particular purpose or will retain specified
qualities or characteristics.
Overview
1. Article 36 deals with the time at which a lack of conformity in the goods must have arisen in order for the seller
to be liable for it. Article 36 (1) states a general rule that
the seller is liable for a lack of conformity that exists at
the time risk of loss for the goods passes to the buyer.1
Article 36 (2) extends the seller’s responsibility in certain
circumstances by providing that the seller is liable for a
lack of conformity occurring even after risk has passed if
the non-conformity is caused by a breach by the seller of
its obligations, including a breach of a guarantee of the
future performance or qualities of the goods.2 Several decisions illustrate the operation of the two paragraphs of article 36. A flower shop that purchased daisy plants refused
to pay the price when the buyer’s own customers complained that the plants did not bloom throughout the summer as expected: a court of appeals affirmed the seller’s
right to the price because (1) the buyer failed to prove,
pursuant to article 36 (1), that the plants were defective
when the risk passed to the buyer, and (2) the buyer failed
to prove that the seller had guaranteed the future fitness of
the goods under article  36 (2).3 Another court concluded
that the seller was not liable under article 36 (1) for damage to pizza boxes that occurred while the boxes were
being shipped by carrier because risk of loss had passed
to the buyer when the goods were handed over to the first
carrier; the result was not changed by article 36 (2) because
the damage was not due to any breach by the seller.4
Article 36 (1) overview
2. Article 36 (1) provides that the seller is liable “in
accordance with the contract and this Convention for any
lack of conformity which exists at the time when the risk
passes to the buyer.” The principle of seller responsibility
for defects existing before risk passes is reinforced by the
final clause of article 36  (1), which confirms the seller’s
liability “even though the lack of conformity becomes
apparent only after [the time risk passes to the buyer].”
Thus it is the time that the lack of conformity comes into
existence, not the time it is discovered (or should have been
discovered), that is critical for the rule in article 36  (1).5
One court decision involving the sale of cocoa beans from
Ghana illustrates the general operation of article 36  (1).6
The contract provided that risk would shift to the buyer
when the goods were handed over to the first carrier. It
also required the seller to supply, before the goods were
shipped, a certificate from an independent testing agency
confirming that the beans met certain quality specifications.
The independent agency tested the goods some three weeks
before they were packed for shipment, and issued the
required certificate. When the goods arrived, however, the
buyer’s own testing revealed that the cocoa beans were
below contract-quality. The court stated that the seller
would be liable for the lack of conformity in three situations: (1) if the pre-shipment certificate of quality from the
independent agency were simply mistaken and the goods
thus lacked conformity at the time they were inspected;
(2) if the deterioration in the quality of the goods occurred
in the three week gap between inspection and shipment; or
(3) if the defects otherwise existed when the goods were
shipped but the defects would only become apparent after
they were delivered to the buyer.
Seller’s liability for defects
existing when risk passed
3. The basic principle of article 36  (1), that the seller is
liable for a lack of conformity that exists at the time risk
passes to the buyer, has been affirmed in several decisions.7
Conversely, the principle that the seller is not normally
liable for a lack of conformity arising after risk has passed
has also been invoked in several decisions. For example,
where a contract for the sale of dried mushrooms included
a “C & F” clause, and the mushrooms deteriorated during
shipment, one court found that the lack of conformity arose
after risk of loss had passed and the seller was therefore
not responsible for it under article 36  (1).8
Defects not apparent
until after risk passed
4. Article 36  (1) states that a seller is liable for a lack of
conformity existing when risk passed to the buyer “even
Part three. Sale of goods
though the lack of conformity becomes apparent only after
that time.” This principle has been applied in several cases.
Thus where a refrigeration unit that had been sold installed
on a truck trailer failed within 15 days of delivery, the court
found that a lack of conformity had existed at the time risk
passed even though the non-conformity did not become
apparent until the unit had been put into use.9 On the other
hand, a buyer of a painting said to be by a specific artist
sued the seller when the party to whom the buyer resold
the painting determined that it could not be attributed to
that artist.10 The court stated that the seller was not liable
because, under article 36  (1), the seller was only responsible for non-conformities existing at the time risk of loss
passed to the buyer, and there was no indication at that
time that the artist indicated was not the painter.11
Burden of proof regarding
the time a defect arose
5. Under article 36  (1), the parties’ rights often hinge on
whether a lack of conformity existed at the time the risk
of loss passed to the buyer. For this reason, the question
of which party bears the burden of proof on this issue is
a critical one.12 A court has noted that some CISG scholars
suggest the question should be settled by reference to
domestic law applicable under the rules of private international law, whereas other scholars argue that the CISG
itself contains a general principle (controlling under CISG
article  7  (2)) that the party asserting the non-conformity
(i.e., the buyer) bears the burden; in the particular case
the court did not have to resolve this disagreement because
both approaches placed the burden on the buyer.13 In
another case, a lower court had dismissed a buyer’s claim
because it was not clear whether the goods’ lack of conformity arose before or after risk passed to the buyer; the
buyer appealed, arguing that article 36, in conjunction
with article 7 (2), allocates to the seller the burden of
proving that the goods were conforming when risk passed;
the appeals court, however, held that the lower court
111
decision had not reversed the burden of proof and dismissed the appeal.14 Other courts appear to have taken a
factual approach to the question. Thus, one court has concluded that a buyer who accepts goods upon delivery
without promptly objecting to their quality bears the burden of proving that they did not conform to the contract.15
On the other hand, a court from a different country found
that where a refrigeration unit broke down shortly after
it was delivered, the defect was presumed to have existed
when the goods were shipped, and the seller bore the
burden of proving it was not responsible for the lack of
conformity.16
Article 36 (2)
6. Article 36  (2) provides that a seller is liable for a lack
of conformity arising after the time that risk passed to the
buyer, but only if the lack of conformity is due to a breach
by the seller. An arbitral tribunal has invoked this provision
in finding a seller liable for the lack of conformity of
canned fruit that deteriorated during shipment because of
inadequate packaging, even though the buyer bore transit
risk under the FOB term in the contract.17 On the other
hand, a court has found that the seller was not responsible
for damage to pizza boxes occurring after risk of loss
passed to the buyer because the buyer did not demonstrate
that the damage was due to any breach by the seller.18
Article 36  (2) specifically mentions that the seller will be
responsible for post-risk non-conformities if they result
from “breach of any guarantee that for a period of time
the goods will remain fit for their ordinary purpose19 or for
some particular purpose20 or will retain specified qualities
or characteristics.” Another court has placed the burden of
proving the existence of an express guarantee of future
performance on the buyer, and concluded that a seller of
plants was not liable under article 36  (2) for the failure of
the plants to bloom throughout the summer because the
buyer did not prove that the seller had guaranteed future
performance of the plants.21
Notes
1
Rules on risk of loss, including rules on when risk shifts from the seller to the buyer, are given in articles 66-70 of the
Convention.
2
The substance of the two paragraphs of article 36 constitutes a mirror image of article 66, which provides: “Loss of or damage to
the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage
is due to an act or omission of the seller.”
3
CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994].
4
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (see full text of the decision).
Under article 39 (1), in contrast, the time of discovery of a lack of conformity is critical: that article provides that a buyer loses its
right to rely on a lack of conformity if it fails to “give notice to the seller specifying the nature of the of the lack of conformity within
a reasonable time after he has discovered it or ought to have discovered it.”
5
6
CLOUT case No. 253, Switzerland, 1998 (see full text of the decision).
CLOUT case No. 204 [Cour d’appel, Grenoble, France, 15 May 1996], reversed on other grounds by CLOUT case No. 241 [Cour
de Cassation, France, 5 January 1999]; CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998]
(see full text of the decision).
7
8
CLOUT case No. 191 [Cámara Nacional de Apelaciones en lo Comercial, Argentina, 31 October 1995]. To similar effect, see CLOUT
case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994] (see full text of the decision); CLOUT case No. 360 [Amtsgericht
Duisburg, Germany, 13 April 2000].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
9
CLOUT case No. 204 [Cour d’appel, Grenoble, France 15 May 1996], reversed on other grounds by CLOUT case No. 241 [Cour
de Cassation, France, 5 January 1999]. See also CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January
1998] (see full text of the decision); Conservas L Costeña S.A. de C.V. v. Lanín San Lui S.A. & Agroindustrial Santa Adela S.A.,
Compromex Arbitration, Mexico, 29 April 1996, Unilex.
10
Arrondissementsrechtbank Arnhem, the Netherlands, 17 July 1997, Unilex. On appeal, the court found that the CISG was inapplicable
but affirmed the result on the basis of domestic law. Gerechtshof Arnhem, the Netherlands, 9 February 1999, Unilex.
11
This statement was an alternative holding. The court also reasoned that the seller was not liable because any claim against the buyer
by its own buyer was time-barred.
12
This question is closely related to the general question of which party bears the burden of proof when the buyer claims the goods
do not conform to the contract under article 35. See the Digest for article 35, para. 15.
13
CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998].
CLOUT case No. 494 [Cour de Cassation, France, 24 September 2003], on appeal from CLOUT case No. 481 [Court d’ Appel Paris,
France, 14 June 2001].
14
15
CLOUT case No. 377 [Landgericht Flensburg, Germany, 24 March 1999].
CLOUT case No. 204 [Cour d’appel, Grenoble, France, 15 May 1996], reversed on other grounds by CLOUT case No. 241 [Cour
de Cassation, France, 5 January 1999].
16
17
Conservas L Costeña S.A. de C.V. v. Lanín San Lui S.A. & Agroindustrial Santa Adela S.A., Compromex Arbitration, Mexico,
29 April 1996, Unilex.
18
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000].
Article 35 (2) (a) of the CISG provides that, unless otherwise agreed, goods do not conform to the contract unless they “are fit for
the purposes for which goods of the same description would ordinarily be used.” This provision does not, however, expressly require
that goods be fit for ordinary purposes for any specified “period of time.”
19
20
Article 35 (2) (b) of the Convention provides that, unless otherwise agreed, goods do not conform to the contract unless they “are
fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where
the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller’s skill and judgement.” This
provision does not, however, expressly require that goods be fit for particular purposes for any specified “period of time”.
21
CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994].
Part three. Sale of goods
113
Article 37
If the seller has delivered goods before the date for delivery, he may, up to that date,
deliver any missing part or make up any deficiency in the quantity of the goods delivered,
or deliver goods in replacement of any non-conforming goods delivered or remedy any
lack of conformity in the goods delivered, provided that the exercise of this right does
not cause the buyer unreasonable inconvenience or unreasonable expense. However, the
buyer retains any right to claim damages as provided for in this Convention.
Overview
1. Article 37 of the CISG deals with non-conforming
deliveries made by the seller before the date specified in
the contract. The first sentence of article 37 specifies that,
in the case of a delivery of insufficient quantity, the seller
can cure by “deliver[ing] any missing part” or by “mak[ing]
up any deficiency in the quantity of the goods delivered.”
In the case of a delivery of goods deficient in quality, the
seller can cure by delivering replacement goods1 or by
“remedy[ing] any lack of conformity in the goods delivered.”2 The second sentence of article 37 specifies that the
buyer retains any right to damages provided by the Convention, although the amount of such damages presumably
must reflect any cure accomplished by the seller under the
first sentence of the provision. The second sentence of article 37 was invoked by an arbitral tribunal where a seller
had made a delivery of confectionary products before the
buyer had furnished a banker’s guarantee required by the
contract.3 Although the buyer accepted the delivery, it failed
to pay for the goods, arguing that the seller had breached
the contract by delivering before the guarantee was in place
and that this default should be considered a fundamental
breach of contract justifying the buyer’s non-payment. The
arbitral tribunal, however, ruled that the breach by the seller
did not permit the buyer to refuse to pay, noting that under
the last sentence of article 37 the buyer could claim damages for any losses caused by the early delivery.
Notes
1
A seller’s right under article 37 to deliver goods to replace non-conforming goods should be compared to a buyer’s right under article  46 (2) of the CISG to require the seller to deliver goods in substitution for non-conforming goods.
2
A seller’s right under article 37 to “remedy” non-conforming goods should be compared to a buyer’s right under article 46 (3) of
the CISG to require the seller to repair non-conforming goods.
3
CLOUT case No. 141 [Arbitration-Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce
and Industry, Russian Federation, award in case No. 200/1994 of 25 April 1995].
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Article 38
(1) The buyer must examine the goods, or cause them to be examined, within as
short a period as is practicable in the circumstances.
(2) If the contract involves carriage of the goods, examination may be deferred
until after the goods have arrived at their destination.
(3) If the goods are redirected in transit or redispatched by the buyer without a
reasonable opportunity for examination by him and at the time of the conclusion of the
contract the seller knew or ought to have known of the possibility of such redirection
or redispatch, examination may be deferred until after the goods have arrived at the new
destination.
Overview
1. Article 38 directs a buyer to whom goods have been
delivered to examine them or cause them to be examined.
Much of the text of article 38 focuses on the time when
this examination should take place. Thus article 38  (1)
specifies the general rule that the examination must occur
“within as short a period as is practicable in the circumstances.” Article 38  (2) provides a special rule for cases
involving carriage of goods, permitting the examination to
be deferred until the goods arrive at their destination. With
respect to the relationship between articles  38  (1) and
38  (2), one court has explained that normally the place of
examination is the place where the seller’s delivery obligation is performed under article 31 of the Convention, but
if the contract involves carriage of the goods the examination may be deferred until the goods reach their destination.1 Article 38  (3) contains another special rule, applicable
if the buyer redirects goods while they are in transit or
redispatches goods before having a reasonable opportunity
to examine them: in such cases, examination may be
deferred until after the goods arrive at their “new destination,” provided the seller was on notice of the possibility
of such redirection or redispatch when the contract was
concluded.
2. As the Secretariat Commentary relating to article 382
and numerous cases3 aver, the time when a buyer is required
to conduct an examination of the goods under article 38 is
intimately connected to the time when the buyer “ought to
have discovered” a lack of conformity under article 39—an
occurrence that starts the clock running on the buyer’s obligation to give notice of the non-conformity under the latter
provision. The examination obligation imposed by article
38, therefore, can have very serious consequences: if a
buyer fails to detect a lack of conformity because it did
not conduct a proper and timely examination, and as a
result fails to give the notice required by article 39, the
buyer will lose remedies—quite possibly all remedies—for
the lack of conformity.4
3. The obligation to examine under article 38 (and to give
notice of lack of conformity under article 39) applies not
just to non-conformities under CISG article  35, but also to
non-conformities under contractual provisions that derogate
from article 35.5 The examination mandated by article 38,
furthermore, should ascertain not only that the quality,
quantity, capabilities and features of the goods conform to
the seller’s obligations, but also that the goods are accompanied by documentation required by the contract.6
4. According to several opinions, the purpose of the article 38 examination obligation, in conjunction with the
notice requirement imposed by article 39, is to make it
clear, in an expeditious fashion, whether the seller has properly performed the contract.7 In this regard, article 38 is
similar to rules commonly found in domestic sales law;
indeed, article 38 has been applied as a matter of “international trade usage” even though the States of neither the
buyer nor the seller had, at the time of the transaction,
ratified the Convention8 Article 38, however, is a provision
of international uniform law distinct from similar domestic
rules,9 and is to be interpreted (pursuant to article 7 (1))
from an international perspective and with a view to promoting uniformity in its application.10 It has been asserted
that the requirements of article 38 are to be strictly
applied.11
Article 38 (1) in general
5. Article 38 (1) mandates that the buyer “examine the
goods, or cause them to be examined, within as short a
period as is practicable in the circumstances.” The meaning
of the phrase specifying the time within which the examination must be conducted—“as short a period as is practicable in the circumstances”—has been addressed in many
decisions.12 The text of article 38 (1) does not expressly
specify the type or method of examination required, and
this issue has also generated substantial comment in the
cases.13
6. Under article 6 of the Convention, the parties can derogate from or vary the effect of any provision of the CISG.
This principle has been applied to article 38, and an agreement concerning the time and/or manner of the examination
Part three. Sale of goods
of goods has been found to supersede the usual rules of
article 38.14 On the other hand, it has been found that contractual provisions addressing the terms and duration of
warranties, the buyer’s obligation to give notice of defects
occurring after delivery, and the buyer’s rights if the seller
did not cure defects, did not displace the provisions of
article 38.15 Derogation from article 38 can also occur by
trade usage,16 although the express terms of the agreement
may negate the applicability of a usage.17
7. After the goods have been delivered, the seller may
waive its right to object to the propriety of the buyer’s
examination of the goods,18 or it may be estopped from
asserting such right.19 On the other side, it has been asserted
that a buyer may lose its rights to object to a lack of conformity if the buyer takes actions indicating acceptance of
the goods without complaining of defects that it had discovered or should have discovered in its examination.20
8. Evidentiary questions can play a crucial role in determining whether a buyer has met its obligations under article  38 (1). Several decisions have asserted that the buyer
bears the burden of proving that it conducted a proper
examination.21 In determining whether an adequate examination was conducted, furthermore, it has been asserted that
a tribunal should consider both “objective” and “subjective”
factors, including the buyer’s “personal and business situation.”22 Some decisions appear in fact to take into account
the buyer’s subjective circumstances in judging the adequacy of an examination, at least where such considerations
suggest a high standard for the examination.23 Other decisions, however, have refused to consider the buyer’s particular situation when it was invoked to argue for a low
standard for the examination.24
Method of examination
9. By stating that the buyer must either examine the goods
or “cause them to be examined,” article 38 (1) implies that
the buyer need not personally carry out the examination.
In a number of cases, examinations were (or should have
been) conducted by a person or entity other than the buyer,
including the buyer’s customer,25 subcontractor,26 or an
expert appointed by the buyer.27 It has also been held, however, that the buyer bears ultimate responsibility under article 38 for examinations carried out by others.28
10. Except for implying that the examination need not be
carried out by the buyer personally, article 38 (1) is silent
about the method the buyer should employ in examining
the goods. In general, it has been asserted, the manner of
inspection will depend on the parties’ agreement, trade
usages and practices;29 in the absence of such indicators, a
“reasonable” examination, “thorough and professional”, is
required, although “costly and expensive examinations are
unreasonable.”30 It has also been asserted that the extent
and intensity of the examination are determined by the type
of goods, packaging and the capabilities of the typical
buyer.31 The issues relating to the method or manner of
examination that have been addressed in decisions include:
the impact of the buyer’s expertise on the level of examination required;32 whether spot testing or “sampling” is
required33 or adequate34 the effect of the packaging or
115
shipping condition of the goods on the type of examination
the buyer should conduct;35 whether an outside expert can
or must be utilized;36 and whether the presence or absence
of defects in earlier deliveries or transactions should affect
the manner of examination.37
Time period for examination
11. Article 38 (1) states that the buyer must examine the
goods “within as short a period as is practicable in the
circumstances.” It has been asserted that the purpose of the
article 38 (1) deadline for examination is to allow the buyer
an opportunity to discover defects before the buyer resells,38
and to permit prompt clarification of whether the buyer
accepts the goods as conforming;39 the period for examination, however, has been interpreted in a fashion that serves
other purposes—for example, to mandate examination
before the condition of the goods so changes that the opportunity to determine if the seller is responsible for a lack of
conformity is lost.40
12. Except where the contract involves carriage of the
goods (a situation governed by article 38  (2), discussed
below) or where the goods are redirected in transit or redispatched (circumstances addressed in article  38  (3), discussed below), the time for the buyer’s examination as a
rule begins to run upon delivery of the goods41—which in
general corresponds to the time risk of loss passes to the
buyer.42 Requiring the buyer to conduct an examination
after delivery, therefore, is consistent with article  36  (1) of
the Convention, which establishes the seller’s liability for
any lack of conformity existing when the risk passes.
Where the lack of conformity is a hidden or latent one not
reasonably discoverable in the initial examination, however,
decisions have indicated that the period for conducting an
examination to ascertain the defect does not begin to run
until the defects reveal (or should reveal) themselves. Thus
where a buyer alleged a lack of conformity in a grinding
device that suffered a complete failure approximately two
weeks after being put into service (approximately three
weeks after delivery), one court indicated that the period
for examining the goods with respect to this defect began
to run at the time of the failure.43
13. The mandate in article 38  (1) to examine the goods
“within as short a period as is practicable” has indeed been
applied in a strict fashion in several cases.44 It has also
been asserted that the phrase is to be strictly interpreted.45
In light of the requirement in article 38  (1) that the time
period for examination must be “practicable in the circumstances,” however, decisions have also recognized that the
standard is a flexible one, and that the period for examination will vary with the facts of each case.46 According to
one court, the short period for the examination depends on
the size of the buyer’s company, the type of the goods to
be examined, their complexity or perishability or their character as seasonal goods, the amount in question, the efforts
necessary for an examination, etc. Furthermore, the objective and subjective circumstances of the concrete case must
be considered—in particular the buyer’s personal and business situation, the features of the goods, the quantity of
goods delivered, and the chosen legal remedy.47
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14. As the aforementioned statement indicates, the perishable nature of goods is a factor that tribunals have considered in determining the period for examination.48 Other
factors that the decisions recognize as relevant include the
professionalism and/or expertise of the buyer,49 the timing
and nature of the buyer’s expected use or resale of the
goods,50 the buyer’s knowledge of the seller’s need for
speedy notice of lack of conformity,51 whether the goods
had passed a pre-delivery inspection,52 whether there were
non-business days during the period for examination,53 the
complexity of the goods,54 the difficulty of conducting an
examination,55 whether there were defects in prior deliveries,56 the fact that the buyer had requested expedited delivery of the goods,57 and the obviousness (or non-obviousness)
of the lack of conformity.58
15. Although the flexibility and variability of the period
within which the buyer must examine the goods is widely
recognized, several decisions have attempted to establish
presumptive time periods for the buyer’s examination. Thus
some opinions have asserted that the general base-line
period for examination (which might be lengthened or
shortened by particular circumstances) is one week after
delivery.59 Other decisions have set presumptive examination periods ranging from three or four days60 to a month.61
Based on the facts of the particular case, examinations have
been found timely when they were conducted within
approximately two weeks of the first delivery under the
contract,62 within a few days after delivery at the port of
destination,63 and on the day of delivery.64 An examination
by an expert was also deemed timely when it was conducted and completed at an unspecified time following
delivery, but where arrangements to have the expert examine the goods were initiated before the goods arrived at
their destination.65 Examinations in the following periods
have been found to be untimely in the particular circumstances: four months after the delivery of the second of
two engines (20 months after the delivery of the first
engine);66 over two months after delivery, which was almost
two months after the buyer had a particular opportunity to
examine the goods;67 seven weeks after delivery;68 more
than 10 days following delivery;69 beyond one week to
10  days after delivery;70 beyond one week following delivery;71 more than a few days after delivery;72 after three or
four days following delivery;73 beyond three days after
delivery;74 after the day of arrival at the port of destination;75 any time later than immediately following
delivery.76
Latent lack of conformity
16. The issue of the buyer’s obligation to examine the
goods for a hidden or latent lack of conformity not discernible during an initial inspection77 is an important one: article 39  (1) of the Convention requires the buyer to give
notice of a lack of conformity “within a reasonable time
after [the buyer] discovered or ought to have discovered
it” (emphasis added). Tribunals have adopted different
approaches to examination for latent defects, apparently
varying with the view taken of the nature of the examination required by article 38. Some decisions appear to conceive of the article 38 examination as an ongoing or
repeated process involving a continuous search for all
non-conformities, including latent ones. Such decisions
seem to treat the question of when the buyer ought to have
found any defect, including a latent one not discoverable
in an initial examination, as an issue governed by article 38, on the apparent assumption that article 38 requires
the buyer to continue examining the goods until all defects
are revealed. Thus some decisions indicate that the period
for an article 38 examination for latent defects does not
begin to run until such defects should reveal themselves,78
whereas the period for examination of obvious defects
begins to run immediately upon delivery.79 These opinions
apparently contemplate multiple or continuous examinations under article  38. Other decisions appear to conceive
of the examination required by article  38 as a single discrete event to occur shortly after delivery. For tribunals
adopting this approach, the question of when latent defects
should be discovered if they are not reasonably discernible
in the initial article 38 examination is an issue beyond the
scope of article 38.80
17. Illustrating this approach, one decision has emphasized that the article 38 examination occurs upon delivery
of the goods, and failure to discern a lack of conformity
that was not discoverable at the time does not violate
article 38.81
Article 38 (2)
18. As was noted previously, under article 38  (1) the
period for the buyer to examine the goods as a rule begins
to run upon delivery of the goods.82 Where such delivery
is to occur, in turn, is governed by the sales contract or, in
the absence of a contractual provision addressing this question, by the default rules stated in article  31.83 In many
transactions in which the goods will be delivered to the
buyer by means of a third-party carrier, the place of delivery will be where the seller hands over the goods to the
carrier for transportation.84 In such cases, it will often not
be convenient or even possible for the buyer to examine
the goods at the point of delivery, and thus in fairness the
period for examination should not begin running at that
point. For this reason, in transactions involving “carriage
of goods” (i.e., transportation by third-party carrier), article
38  (2) permits the buyer to defer the examination “until
after the goods have arrived at their destination.” This rule
has been applied in several cases. In one transaction involving goods to be transported from Tallinn, Estonia to Abu
Dhabi in the United Arab Emirates, the court found that
the buyer could postpone examination until the goods
arrived at Abu Dhabi even though the contract provided for
delivery FOB Tallinn.85 On the other hand, article 38 (2)
is subject to the contrary agreement of the parties.86 Thus
where a contract between a seller and a buyer provided
that the goods were to be delivered “free on refrigerated
truck Turkish loading berth (Torbali)” and from there to be
shipped to the buyer’s country by carrier, the court found
that the parties’ agreement had excluded article 38  (2) and
the buyer was required to conduct the article 38 examination in Turkey rather than at the place of arrival, because
the contract contemplated that a representative of the buyer
would inspect the goods at the Turkish loading dock and
the buyer was responsible for making arrangements for
transporting the goods to its country.87
Part three. Sale of goods
Article 38 (3)
19. Article 38  (3) permits a buyer in certain circumstances to defer examination of the goods until after the
time that the period for examination would otherwise have
commenced.88 Specifically, where the goods are “redirected in transit” or “redispatched by the buyer without a
reasonable opportunity for examination by him,”89 article
38  (3) permits examination to be deferred “until after the
goods have arrived at the new destination,” provided the
seller “knew or ought to have known of the possibility of
such redirection or redispatch” when the contract was
concluded. Under this provision, an examination of a
delivery of rare hard woods that the buyer (with the
seller’s knowledge) redispatched to the buyer’s customer
117
could be deferred until the goods arrived at the customer’s
facilities.90 Several decisions, however, have strictly construed the requirements for article 38  (3) to apply. Thus
it has been stated that the provision only applies if the
goods are delivered directly from the seller to the end
customer or if the buyer acts simply as an intermediary
between the seller and the end customer, and the provision
was held inapplicable where the buyer received and stored
the goods in its own warehouse without knowing in
advance whether and when they would be resold.91 It has
also been stated that article 38  (3) allows a deferred examination only if all (rather than just a part) of a delivery
of goods is redispatched, or redirected in transit, and then
only if the buyer does not have a reasonable opportunity
to examine the delivery.92
Notes
1
Landgericht Landshut, Germany, 5 April 1995.
2
Secretariat Commentary to draft counterpart to final Article 38, p. 34, para. 2.
E.g., CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995]; CLOUT case No 378 [Tribunale di Vigevano, Italy, 12  July
2000]; ICC Arbitration Case No. 8247, June 1996, International Court of Arbitration Bulletin, vol. 11, p. 53 (2000); CLOUT case No.  81
[Oberlandesgericht Düsseldorf, Germany, 10 February 1994]; CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8  January
1993].
3
See, e.g., CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003]; CLOUT case No. 4 [Landgericht Stuttgart, Germany,
31 August 1989]; Hoge Raad, the Netherlands, 20 February 1998, Unilex; CLOUT case No. 364 [Landgericht Köln, Germany 30  November 1999]; CLOUT case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland, 27 April 1992] (see full text of the
decision). For further information concerning the effect of failure to give timely notice, see the Digests for arts. 39, 40 and 44.
4
5
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998].
6
Gerechtshof Arnhem, the Netherlands, 17 June 1997, Unilex.
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm; CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (see full text of the decision). The buyer’s obligation
to examine goods under Article 38 has also been linked to the principle of good faith in the performance of international sales contracts.
Arrondissementsrechtbank Zwolle, the Netherlands, 5 March 1997, Unilex.
7
8
CLOUT case No. 45 [Arbitration—International Chamber of Commerce No. 5713 1989].
9
CLOUT case No. 230, Germany, 1997 (see full text of the decision).
10
CLOUT case No. 284 [Oberlandesgericht Köln, Germany 21 August 1997] (see full text of the decision).
11
CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision).
See the discussion in paras. 11–14 infra. The time frame specified in article 38 (1) is subject to articles 38(2) and 38(3), which state
special rules applicable to particular situations. See paras.  16–17 infra. See also the discussion of latent defects in para. 15 infra.
12
13
See the discussion in paras. 9–10 infra.
CLOUT case No. 94 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft–Wien, 15 June
1994] (agreement as to time and manner of examination); CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also
available on the Internet at http://www.cisg.at/1_22399x.htm; Arrondissementsrechtbank Zwolle, the Netherlands, 5 March 1997, Unilex
(agreement as to time).
14
15
CLOUT case No. 229 [Bundesgerichtshof, Germany, 4 December 1996].
Helsinki Court of Appeal, Finland, 29 January 1998, available on the Internet at http://www.utu.fi/oik/tdk/xcisg/tap4.html#engl;
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm; Arrondissementsrechtbank Zwolle, the Netherlands, 5 March 1997, Unilex; CLOUT case No. 170 [Landgericht Trier, Germany,
12  October 1995] (see full text of the decision); CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998].
16
17
CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993].
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (approving analysis of lower appeals court that held the seller
waived its right to object that buyer had not immediately examined the goods when it accepted late notice of lack of conformity and
offered a remedy) (see full text of the decision); CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998] (seller impliedly
waived it rights because it had negotiated for a period of 15 months over the amount of damages for non-conforming goods without
reserving the right to rely on articles 38 and 39, it had paid for an expert at buyer’s request, and it had offered damages amounting to
seven times the price of the goods); CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997], (seller waived rights by agreeing to give a credit for goods that the buyer showed were non-conforming). But see CLOUT case No. 94 [Arbitration—Internationales
Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft– Wien, 15 June 1994] (seller had not waived its rights under
articles  38 and 39 merely by failing to object immediately to the timeliness of buyer’s notice; the seller’s intention to waive must be
18
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
clearly established); CLOUT case No. 251 [Handelsgericht des Kantons. Zürich, Switzerland, 30 November 1998] (the fact that seller,
at the buyer’s request, examined goods that the buyer claimed were non-conforming did not mean that seller waived its right to claim
late notice of the non-conformity).
CLOUT case No. 94 [Arbitration— Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft–Wien, 15 June
1994] (seller was estopped from asserting its rights under arts. 38 and 39 because (1) it engaged in conduct that the buyer could justifiably interpret as indicating the seller accepted the validity of buyer’s complaint of lack of conformity, and (2)  buyer relied upon the
indication that seller would not raise a defence based on arts. 38 or  39).
19
CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000]; CLOUT case No. 337 [Landgericht Saarbrücken, Germany,
26 March 1996]. But see CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998] (acceptance of
pre-shipment certificate showing proper quality of cocoa beans, for purposes of drawing on letter of credit, did not deprive the buyer of
right to examine goods after delivery and to contest their quality) (see full text of the decision).
20
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland 30 November 1998]; CLOUT case No. 97 [Handelsgericht
des Kantons Zürich, Switzerland 9 September 1993]; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case
No. 423 [Oberster Gerichtshof, Austria, 27 August 1999] also available on the Internet at http://www.cisg.at/1_22399x.htm. See also
Landgericht Duisburg, Germany, 17 April 1996, Unilex (holding in favour of seller because buyer had not produced evidence of timely
examination of goods and timely notice of defect).
21
22
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm.
23
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (because buyer was an experienced merchant, it
should have conducted an expert examination and detected defects) (see full text of the decision); CLOUT case No. 4 [Landgericht
Stuttgart, Germany, 31 August 1989] (in light of its expertise and the fact that it had found defects in the first delivery, buyer should
have conducted a more thorough examination).
24
Hoge Raad, the Netherlands, 20 February 1998, Unilex (despite buyer’s summer vacation, it should not have delayed examining the
goods when its customer complained in July); CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (fact
that buyer’s manufacturing facilities were still under construction and that buyer was disorganized should not be considered in determining whether the buyer conducted a proper examination).
25
CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995] (buyer’s customer should have examined goods and
discovered defect sooner than it did); CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994] (examination by
buyer’s customer, to whom the goods had been transhipped, was timely and proper) (see full text of the decision).
26
CLOUT case No. 359 [Oberlandesgericht Koblenz, Germany, 18 November 999] (third party to whom buyer transferred the goods
(fibreglass fabrics) for processing was supposed to conduct the article  38 examination; because buyer unjustifiably delayed transferring
the goods to the third party, the examination was late).
27
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999]; CLOUT case No. 423 [Oberster Gerichtshof, Austria,
27 August 1999], also in Unilex. See also CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (approving approach
of lower appeals court which stated that use of experts to examine technically complicated goods may be required) (see full text of the
decision).
28
CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995].
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm. For discussion of contractual provisions and usages relating to examination, see para. 6 supra.
29
30
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm. See also Landgericht Paderborn, Germany, 25 June 1996, Unilex (holding that the buyer did not need to conduct special chemical
analyses of plastic compound). See also CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of decision
approving approach of lower appeals court).
31
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997], reversed on other grounds by CLOUT case No. 270
[Bundesgerichtshof, Germany, 25 November 1998].
32
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (see full text of the decision); CLOUT case No. 4
[Landgericht Stuttgart, Germany, 31 August 1989] (see full text of the decision) (in view of his expertise, merchant buyer should have
conducted “a more thorough and professional examination”).
CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003] (see full text of the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (requiring test use of goods for defects that would only become apparent upon use
and asserting that random testing is always required), reversed on other grounds by CLOUT case No. 270 [Bundesgerichtshof, Germany,
25 November 1998]; CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (see full text of the decision);
CLOUT case No. 98 [Rechtbank Roermond, Netherlands, 19 December 1991] (buyer required to thaw and examine a portion of shipment of frozen cheese) (see full text of the decision); CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also
available on the Internet at http://www.cisg.at/1_22399x.htm; CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993]; CLOUT case No.  285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (buyer should have conducted a test by
processing a sample of delivered plastic using its machinery) (see full text of the decision); CLOUT case No. 251 [Handelsgericht des
Kantons Zürich, Switzerland, 30  November 1998]; CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994];
CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989] (spot checking of delivery of shoes not sufficient where defects
had been discovered in an earlier delivery).
33
34
CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (taking samples of wine for examination the day after delivery
was adequate; buyer did not have to examine for dilution with water because that is not generally done in the wine trade); CLOUT case
No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998] (examination of random samples of live fish after delivery would have been
sufficient); CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (spot checking of wrapped medical devices
would be adequate) (see full text of the decision). But see Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (examination of
Part three. Sale of goods
119
delivery of fish by sample would not be sufficient where the buyer had ready opportunity to examine entire shipment when it was processed and buyer had discovered lack of conformity in another shipment by the seller).
35
CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991] (fact that delivery consisted of frozen cheese did
not excuse buyer from obligation to examine: buyer should have thawed and examined a portion of shipment); CLOUT case No. 292
[Oberlandesgericht Saarbrücken, Germany, 13 January 1993] (fact that doors had been delivered wrapped in plastic sheets on pallets and
buyer contemplated sending them on to its customers did not prevent buyer from examining goods: buyer should have unwrapped a
sample of the doors); Rechtbank van Koophandel Kortrijk, Belgium, 6 October 1997, Unilex (not reasonable to expect buyer of yarn to
unroll the yarn in order to examine it before processing); CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (buyer should have removed a sample of medical devices from shipping boxes and examined them through transparent wrapping) (see full text of the decision).
36
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999]; CLOUT case No. 423 [Oberster Gerichtshof, Austria,
27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.htm; Landgericht Ellwangen, Germany, 21 August 1995,
Unilex.
37
Landgericht Ellwangen, Germany, 21 August 1995, Unilex; CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989]
(spot checking of delivery of shoes not sufficient where defects had been discovered in an earlier delivery).
38
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998].
39
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision).
CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (immediate examination of chemicals required where
the chemicals were going to be mixed with other substances soon after delivery); Rechtbank Zwolle, the Netherlands, 5 March 1997,
Unilex (examination was due quickly where shipment of fish was to be processed by the buyer, because the processing would make it
impossible to ascertain whether the fish were defective when sold); Arrondissementsrechtsbank ’s-Hertogenbosch, the Netherlands,
15  December 1997, Unilex (examination of furs not conducted until they had already undergone processing was not timely).
40
41
E.g., CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003]; CLOUT case No. 541 [Oberster Gerichtshof, Austria,
14  January 2002] (approving approach of lower appeals court which stated that examination period begins as soon as the goods are made
available to the buyer at the place of delivery) (see full text of the opinion); CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993] (where the contract provided for delivery of cucumbers “free on refrigerated truck Turkish loading berth,” the
German buyer should have examined the goods when they were loaded in Turkey, instead of waiting until they had been forwarded to
Germany); CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (asserting that the period for examining
the goods under art. 38 and giving notice under art. 39 begins upon delivery to the buyer); CLOUT case No. 378 [Tribunale di Vigevano,
Italy, 12 July 2000] (buyer’s time for examining goods begins to run upon delivery or shortly thereafter, except where the defect can
only be discovered when the goods are processed); CLOUT case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland,
27 April 1992] (buyer must examine goods upon delivery); Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (examination due
at the time of delivery or shortly after). The German Supreme Court has suggested that an article 38 examination of machinery should
be conducted both at the time of delivery and at the time of installation; see CLOUT case No.  319 [Bundesgerichtshof, Germany,
3  November 1999] (see full text of the decision). In a decision involving the sale and installation of sliding gates, one court held that
the defects in the gates should have been discovered when installation of the gates was substantially complete, even though some minor
work remained unperformed by the seller; see CLOUT case No. 262 [Kanton St. Gallen, Gerichtskommission Oberrheintal, Switzerland,
30 June 1995]. The court did not actually cite article 38—instead, it discussed the article 39 (1) obligation to give notice of a lack of
conformity within a reasonable time after the non-conformity was discovered or should have been discovered—but the decision clearly
implies that the time for the buyer’s examination of the goods commenced even before seller had completed all its duties. Where elevator
cables were delivered on incorrectly-sized reels, a court has held that the buyer should have examined the goods for defects at the time
he rewound the cables on proper-sized reels (which occurred eight days after delivery); thus the subsequent discovery of obvious defects
in the cables by the buyer’s customer was, with respect to the buyer obligations under article 38 (1), untimely. CLOUT case No. 482
[Cour d’appel Paris, France, 6 November 2001].
42
See CISG art. 69.
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999] (see full text of the decision). See also CLOUT case No.  541
[Oberster Gerichtshof, Austria, 14  January 2002] (approving approach of lower appeals court whichheld that defects could not be discovered until the goods were put into provisional operation) (see full text of the decision); CLOUT case No 378 [Tribunale di Vigevano,
Italy, 12 July 2000] (“the time when the buyer is required to examine the goods under Art. 38(1) . . . as a rule is upon delivery or
shortly thereafter and only exceptionally may be later, for instance when the defect is discoverable only by processing the goods.”);
Hoge Raad, the Netherlands, 20 February 1998, Unilex (implying that the period for examining for latent defects in floor tiles began to
run when buyer’s customer complained, some seven months after seller delivered the tiles to buyer); Landgericht Düsseldorf, Germany,
23 June 1994, Unilex (suggesting that period to examine engines for latent defects did not begin until buyer had installed and put goods
into operation); Rechtbank van Koophandel Kortrijk, Belgium, 27 June 1997, available on the Internet at http://www.law.kuleuven.ac.be/
int/tradelaw/WK/1997-06-27.htm (time for examination of goods and notice of lack of conformity was extended for goods that had to
be processed before defects could be discovered). But see CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003] (stating
that, even if defects in fabrics would not be revealed until they were dyed, buyer should have conducted preliminary spot testing by
dyeing samples of the fabric).
43
44
ICC Arbitration Case No. 8247, June 1996, International Court of Arbitration Bulletin, vol. 11, p. 53 (2000) (buyer should have
examined a large shipment of a chemical compound on the day it arrived in the port of destination); Landgericht Landshut, Germany,
5 April 1995, Unilex (asserting that buyer’s obligation to examine the goods must be complied with immediately, even if the goods are
not perishable); CLOUT case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland, 27 April 1992] (because both buyer
and seller were merchants, buyer should have examined the goods immediately upon delivery) (see full text of the decision); Hof Arnhem,
the Netherlands, 17 June 1997, Unilex (buyer, who was a dealer in medical equipment, should have checked immediately after delivery
whether documents necessary to satisfy regulations were present); CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany,
3  June 1998] (buyer must examine flowers on the day of delivery); CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany,
10  February 1994] (examination of shirts was required immediately following delivery).
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45
CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision); CLOUT case No.  251
[Handelsgericht des Kantons Zürich, Switzerland, 30  November 1998].
46
See, e.g., CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision).
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm. The opinion continues by asserting that “the reasonable periods pursuant to arts. 38 and 39 CISG are not long periods.” For other
statements on the flexible standard for the time for examination and/or the factors that should be considered in determining whether
examination was timely, see CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (indicating that a
tribunal should consider “the nature of the goods, the quantity, the kind of wrapping and all other relevant circumstances”) (see full text
of the decision); Tribunale Civile di Cuneo, Italy, 31 January 1996, Unilex (asserting that scholars discussing Article 38 have indicated
that the time frame is “elastic, leaving space to the interpreter and in the end to the judge, in terms of reasonableness, so that the elasticity will be evaluated in accordance with the practicalities of each case”); CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany,
10 February 1994] (in determining the time for examining the goods “the circumstances of the individual case and the reasonable possibilities of the contracting parties are crucial”) (see full text of the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (asserting that, although the “median” time for an examination of durable goods is three to four days, “[t]his figure
can be corrected upward or downward as the particular case requires”) (see full text of the decision).
47
48
CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998] (flowers); CLOUT case No. 98 [Rechtbank Roermond,
the Netherlands, 19 December 1991] (cheese); Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (fish).
49
CLOUT case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland, 27 April 1992] (see full text of the decision);
Hof Arnhem, the Netherlands, 17 June 1997, Unilex.
CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (immediate examination of chemicals required where
the chemicals were going to be mixed with other substances soon after delivery); Rechtbank Zwolle, the Netherlands, 5 March 1997,
Unilex (examination was due quickly where shipment of fish was to be processed by the buyer; processing would make it impossible
to ascertain whether the fish were defective when sold); Arrondissementsrechtsbank ’s-Hertogenbosch, the Netherlands, 15 December
1997, Unilex (examination of furs not conducted until they had already undergone processing was not timely).
50
51
Landgericht Köln, Germany, 11 November 1993, Unilex, reversed on other grounds by CLOUT case No. 122 [Oberlandesgericht
Köln, Germany, 26 August 1994] (see full text of the decision).
52
Compare Helsinki Court of First Instance, 11 June 1995, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/980630f5.html#proceed (existence of pre-delivery tests showing acceptable vitamin content for skin care products excused buyer
from testing for vitamin content immediately after delivery) with CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May
1998] (buyer was not entitled to rely on pre-importation veterinarian’s inspection certificate certifying health of live fish: buyer should
have examined samples of fish after delivery).
53
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994] (buyer’s examination was timely, taking into account
the fact that two days of the period were weekend days) (see full text of the decision); Amtsgericht Riedlingen, Germany, 21 October
1994, Unilex (3 days for examining delivery of ham was sufficient even though Christmas holidays interfered with examination). But
see Hoge Raad, the Netherlands, 20 February 1998, Unilex (despite buyer’s summer vacation, it should not have delayed in examining
the goods when its customer complained in July).
Landgericht Düsseldorf, Germany, 23 June 1994, Unilex (where the goods consisted of two engines to be used for manufacturing
hydraulic presses and welding machines, buyer had more than the usual time for an examination in order to determine conformity with
technical specifications; because buyer delayed examining the goods until some four months after delivery of the second engine (16  months
after delivery of first engine), however, the examination was untimely).
54
55
CLOUT case No. 315 [Cour de Cassation, France, 26 May 1999] (time for examination took into account the difficulty of handling
the metal sheets involved in the sale); Rechtbank van Koophandel Kortrijk, Belgium, 27 June 1997, Unilex (period for examination was
longer for goods that had to be processed before defects could be discovered (in this case, yarn to be woven)); Rechtbank van Koophandel
Kortrijk, Belgium, 6 October 1997, Unilex (buyer of crude yarn did not have to examine goods until they were processed; it would be
unreasonable to expect buyer to unroll the yard in order to examine it before processing); Landgericht Düsseldorf, Germany, 23 June
1994, Unilex (buyer had longer than normal period to examine engines to be used in its manufacturing process because buyer had to
install and put goods into operation in order to discover defects). Compare CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany,
10 February 1994] (the time for examination depends on the circumstances of the particular case, in this case, involving a sale of shirts,
“it was easily possible to examine the shirts—at least by way of sampling—immediately after their delivery”) (see full text of the decision). But see CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991] (fact that sale involved frozen cheese
did not excuse buyer from prompt examination, buyer could thaw and examine a sample of delivery) (see full text of the decision).
56
Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (buyer should have examined fish before processing and selling them to
its customers given that buyer had already discovered lack of conformity in a previous shipment by the seller); Rechtbank van Koophandel
Kortrijk, Belgium, 27 June 1997, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/1997-06-27.htm (“defects
in prior shipments a factor to consider in determining timeliness of examination”).
57
CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003].
Amtsgericht Riedlingen, Germany, 21 October 1994, Unilex (defects in under-seasoned ham were easily discernible, and thus buyer
should have examined goods and discovered defects quickly); Landgericht Köln, Germany, 11 November 1993, Unilex, reversed on other
grounds in CLOUT case No. 122 [Oberlandesgericht Köln, Germany, 26 August 1994] (mistake in business report was easily discoverable, and thus examination was required to be quick) (see full text of the decision); CLOUT case No. 359 [Oberlandesgericht Koblenz,
Germany, 18 November 1999] (where defects are easy to discover, the time for examination should not exceed one week); CLOUT case
No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (where chemicals were to be mixed with other substances and defects
were easily discernible, immediate examination of the goods was required). See also Tribunale Civile di Cuneo, Italy, 31 January 1996,
Unilex (time period for notice (and, perhaps, examination) is reduced if defects are easily recognizable); CLOUT case No. 482 [Cour
d’appel Paris, France, 6 November 2001] (see full text of decision).
58
Part three. Sale of goods
121
59
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (approving approach of lower appeals court which had
asserted: “As a rough assessment for orientation purposes, an inspection period of one week (five work days) can apply”) (see full text
of the decision); CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany 11 September 1998] (“Generally speaking, examination
of the goods by the buyer should occur within a week after delivery”); CLOUT case No. 284 [Oberlandesgericht Köln, Germany,
21 August 1997] (where chemicals were to be mixed with other substances and defects were easily discernible, immediate examination
of the goods was required); CLOUT case No. 359 [Oberlandesgericht Koblenz, Germany, 18 November 1999] (“where defects are easy
to discover . . the examination period should not exceed a period of one week”); Landgericht Mönchengladbach, Germany, 22 May
1992, Unilex (generally allowing one week for examination of goods). Compare CLOUT case No. 423 [Oberster Gerichtshof, Austria,
27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.htm (unless special circumstances suggest otherwise,
buyer has a total of approximately 14 days to examine and give notice of defects).
60
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997]. Compare Landgericht Düsseldorf, Germany, 23 June
1994 (a few working days).
61
CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997].
62
CLOUT case No. 315 [Cour de Cassation, France, 26 May 1999] (see full text of the decision).
China International Economic and Trade Arbitration Commission (CIETAC) Arbitration, China, 23 February 1995, Unilex, see also
http://www.cisg.law.pace.edu/cisg/wais/db/cases2/950223c1.html.
63
64
CLOUT case No. 46 [Landgericht Aachen, Germany, 3 April 1990] (see full text of the decision).
65
CLOUT case No. 45 [Arbitration—International Chamber of Commerce, No. 5713 1989] (see full text of the decision).
66
Landgericht Düsseldorf, Germany, 23 June 1994 Unilex.
CLOUT case No. 482 [Cour d’appel Paris, France, 6 November 2001] (buyer should have examined elevator cables delivered on
incorrectly-sized reels at the time he rewound the cables on proper-sized reels (which occurred eight days after delivery); discovery by
the buyer’s customer of obvious defects in the cables some two months thereafter was, with respect to the buyer obligations under article  38 (1), untimely.
67
68
CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003].
69
CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (see full text of the decision).
70
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland 30 November 1998].
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998]; Landgericht Mönchengladbach, Germany, 22 May
1992, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/56.htm; CLOUT case No. 359 [Oberlandesgericht
Koblenz, Germany, 18 November 1999].
71
72
Landgericht, Köln, Germany, 11 November 1993, Unilex.
73
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997].
Amtsgericht Riedlingen, Germany, 21 October 1994, Unilex; Landgericht Landshut, Germany, 5 April 1995, Unilex (examination for
proper quantity of sports clothing).
74
75
ICC Arbitration Case No. 8247, 1996, Unilex.
76
CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994].
For the distinction between latent and obvious (patent) defects, see CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August
1989]; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 284 [Oberlandesgericht Köln, Germany
21 August 1997] (see full text of the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997].
77
78
See footnote 43 supra and accompanying text discussing CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999] (period for
examination to discover latent defects in grinding device did not begin until device broke down approximately three weeks after delivery).
79
See footnote 41 supra and accompanying text; footnote 56 supra and accompanying text.
Under this approach, the question of the timely discovery of such latent defects is an issue governed not by article 38 but by the
requirement in article 39 (1) that the buyer notify the seller of a lack of conformity “within a reasonable time after [the buyer] discovered
or ought to have discovered it.” In other words, even though this approach posits that a latent defect might not be reasonably discoverable
during the examination required by article 38, the buyer still is charged with taking reasonable action to discover such defects under
article 39. For further discussion related to this issue, see the discussion infra of article 39.
80
81
Landgericht Paderborn, Germany, 25 June 1996 (see full text of the decision). For other decisions that may take a similar approach
to the relationship between the article 38 examination and discovery of latent defects, see CLOUT case No. 280 [Oberlandesgericht
Jena, Germany, 26 May 1998] (failure to examine goods as provided in art. 38 would be irrelevant if the buyer could show that an
expert examination would not have detected the defect); CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also
available on the Internet at http://www.cisg.at/1_22399x.htm (suggesting that, if buyer had conducted a thorough and professional postdelivery examination of the goods that did not reveal a latent lack of conformity, buyer would have satisfied its obligations under art.  38);
Landgericht Ellwangen, Germany, 21 August 1995, Unilex (suggesting that buyer satisfied its art. 38 obligations by examining the goods
without a chemical analysis that, when conducted later, revealed a latent defect).
82
See footnote 41 supra and accompanying text.
See Landgericht Landshut, Germany, 5 April 1995, Unilex (stating that the art. 38 examination must usually be conducted at the
place for the performance of the obligation to deliver under art.  31).
83
84
This will be true, for example, if the parties agree to any of the various trade terms under which the buyer bears the risk of loss
while the goods are in transit—e.g., Free Carrier (FCA) named point under the Incoterms. The same result would occur in transactions
involving carriage of the goods if the parties have not agreed upon the place of delivery: in such cases, article 31 (a) provides that
delivery occurs when the seller hands the goods over to the first carrier for transmission to the buyer
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85
Helsinki Court of Appeal, Finland, 29 January 1998, available on the Internet at http://www.utu.fi/oik/tdk/xcisg/tap4.html#engl. For
other cases applying article 38(2), see CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision);
ICC Arbitration Case No. 8247, June 1996, International Court of Arbitration Bulletin, vol. 11, p. 53 (2000); Tribunale Civile di Cuneo,
Italy, 31 January 1996, Unilex; Landgericht Landshut, Germany, 5 April 1995, Unilex; China International Economic and Trade Arbitration Commission (CIETAC) Arbitration, China, 1995, Unilex (under a CIF contract, where delivery to the buyer occurs when the goods
pass the ship’s rail at the port for loading, the buyer’s time for examination did not start until the goods arrived at the port of
destination).
86
Not only does article 6 of the CISG provide that the parties may “derogate from or vary the effect of any of [the Convention’s]
provisions,” but article 38 (2) itself is phrased in permissive (“examination may be deferred”) as opposed to mandatory fashion.
87
CLOUT case No. 48, Germany, 1993 (see full text of the decision).
Unless article 38 (3) applies, the time for the buyer to examine the goods usually commences when the goods are delivered or, in
the case of goods transported by a third-party carrier, when the goods arrive at their destination. See para. 18 supra
88
89
According to a statement of a delegate from the Netherlands at the 1980 Vienna Diplomatic Conference at which the final text of
the CISG was adopted, the distinction between “redirected in transit” and “redispatched” is as follows: “’Redispatched’ implied that the
goods had reached their first destination and had subsequently been sent on. ‘Redirected in transit’ implied that they had never reached
their first destination.” Summary Records of the United Nations Conference on Contracts for the International Sale of Goods, 16th meeting of Committee 1, A/CONF.97/C.1/SR.16, reproduced in Official Records of the United Nations Conference on Contracts for the
International Sale of Goods, Vienna, 10 March–11 April 1980, at. p. 320, para.  18; Note to Secretariat Commentary on Article 38 (Article  36 of the draft Convention) available on the internet at http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-38.html.
90
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994], see also Unilex.
91
CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993].
92
CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (see full text of the decision).
Part three. Sale of goods
123
Article 39
(1) The buyer loses the right to rely on a lack of conformity of the goods if he
does not give notice to the seller specifying the nature of the lack of conformity within
a reasonable time after he has discovered it or ought to have discovered it.
(2) In any event, the buyer loses the right to rely on a lack of conformity of the
goods if he does not give the seller notice thereof at the latest within a period of two
years from the date on which the goods were actually handed over to the buyer, unless
this time limit is inconsistent with a contractual period of guarantee.
Overview
Consequences of failure to give notice
1. Under article 39, a buyer who claims that delivered
goods do not conform to the contract has an obligation to
give the seller notice of the lack of conformity. The provision is divided into two subsections addressing different
time periods for the required notice: article 39 (1) requires
that notice of lack of conformity be given within a reasonable time after the buyer has discovered or ought to have
discovered the lack of conformity; article 39 (2) specifies
that, in any event, the buyer must give the seller notice of
the claimed lack of conformity within two years of the date
on which the goods were actually handed over to the buyer,
unless this time limit is inconsistent with a contractual
period of guarantee.
3. Both article 39 (1) and article 39 (2) state that failure
to give the requisite notice results in the buyer losing the
right to rely on the lack of conformity. This appears to
mean that the buyer loses the right to any remedy for the
non-conformity, including, e.g., the right to require the
seller to repair the goods,7 the right to claim damages,8 the
right to reduce the price,9 and the right to avoid the contract.10 One court, however, appears to have permitted the
buyer to partially avoid the contract based on a lack of
conformity that had not been timely noticed.11 It should
also be noted that a buyer’s remedies for a lack of conformity concerning which it has not given proper notice may
be restored in whole or in part under CISG articles 40
and  44.12
Scope of article 39
2. The notice obligation imposed by article 39 applies
if the buyer claims that delivered goods suffer from a lack
of conformity. The concept of conformity is defined in
article  35. The great majority of decisions applying the
article  39 notice requirements involve claims that the
goods were defective or otherwise not of conforming
quality under article 35. Nevertheless, the article 39 notice
obligation has been applied not only to breaches of the
quality obligations imposed by article 35, but also to a
breach of a contractual warranty made in derogation of
article 35.1 It has also been applied where the claimed
lack of conformity was a failure to provide proper instruction manuals to accompany the goods.2 Several decisions
have found that article 39 requires notice when the buyer
claims that an inadequate quantity (as opposed to quality)
of goods was delivered.3 One court has also applied the
article  39 notice requirement when the buyer complained
that delivery of seasonal goods was late,4 although that
decision has not been followed in other cases.5 Each separate lack of conformity is subject to the notice requirement, and the fact that the buyer may have given proper
notice as to one defect does not necessarily mean it has
given valid notice as to all claimed non-conformities.6
Burden of proof
4. There appears to be a consensus in reported decisions
that the buyer bears the burden of proving that it gave the
required article 39 notice of non-conformity. This position
has been adopted both expressly13 and by implication.14
Although several decisions have invoked domestic legal
rules to justify allocating the burden to the buyer,15 a larger
number have based their allocation on the general principles underlying the CISG.16 A decision by an Italian court,
for example, expressly rejected reliance on domestic law
in determining the burden of proof, and discovered in provisions such as article 79 (1) a general CISG principle (in
the sense of article 7 (2)) requiring the buyer to prove valid
notice.17
Form of notice
5. Article 39 does not specify the form of notice required,
although the parties can by agreement require a particular
form.18 Notice in written form has often been found satisfactory, and the contents of a series of letters have been
combined in order to satisfy the article 39 requirement.19
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Oral notice that occurred when the seller, at the buyer’s
suggestion, inspected the goods on the premises of the buyer’s customer has been deemed adequate both in form and
content.20 Oral notice by telephone has also been found
sufficient,21 although in several cases evidentiary issues
have caused a buyer’s claim to have given telephonic notice
to fail.22 One court has found that a buyer claiming to have
given notice by telephone must prove when the call took
place, to whom the buyer spoke, and what was said during
the conversation; the buyer’s failure to prove these elements
prevented it from establishing that the article  39 notice
requirement was satisfied.23 An earlier decision had similarly found that a buyer’s claim of telephonic notice had
not been sufficiently substantiated because the buyer had
not proven the date of the call, the party spoken to, or the
information conveyed concerning the lack of conformity.24
In one decision, moreover, a court appeared to impose special requirements for sufficient oral notice by stating that,
if the seller failed to respond to telephone notice given to
the seller’s agent, the buyer was obliged to follow-up with
written notice to the seller.25 Finally, a court has rejected
a buyer’s argument that it gave implied notice of lack of
conformity when it refused to pay the seller, holding that
the notice required by article 39 must be express.26
To whom must notice be given
6. Article 39 states that the required notice of lack of
conformity must be given to the seller.27 Thus it has been
stated that communications between the buyer and its customer concerning defects in the goods did not satisfy the
article 39 notice requirement because they did not involve
the seller.28 Notice of defects conveyed by the buyer to an
independent third party who had acted as an intermediary
in the formation of the contract but who had no further
relationship to the seller was found not to have been given
by means appropriate in the circumstances within the
meaning of article 27, and thus the buyer bore the risk
when the notice was not received by the seller.29 Similarly,
notice given to an employee of the seller who was not
authorized to receive such communications but who promised to transmit the information to the seller was found to
be insufficient when the employee in fact did not inform
the seller; the court noted that, when notice is not given to
the seller personally, the buyer must ensure that the seller
actually receives the notice.30 On the other hand, it has been
found that notice given to an agent of the seller would
satisfy article 39, although the question of the recipient’s
agency status and authority were matters beyond the scope
of the CISG to be determined under applicable domestic
law.31
Agreements relating to notice
7. Article 39 is subject to the parties’ power under article  6 to derogate from or vary the effect of any provision
of the Convention. A significant number of decisions have
involved agreements relating to the buyer’s obligation to
give the seller notice of claims that the goods do not conform to the requirements of the contract.32 Such agreements
have generally been enforced, and buyers have several
times lost the right to complain of a lack of conformity
because they failed to comply with the terms of such an
agreement.33 A few decisions, however, appear reluctant to
enforce contractual provisions governing notice: they rely
on the standards of article 39 even though the parties’ contract included clauses addressing notice of defects,34 and/or
they suggest that the contract provisions are enforceable
only to the extent they are judged reasonable by the standards of article 39.35 Of course to be enforceable under any
approach, terms relating to notice of lack of conformity
must have become part of the parties’ agreement under
applicable contract formation rules, which in the case of
the CISG are found in Part II of the Convention. Thus it
has been found that, although the parties can derogate from
article 39, they had not done so where a clause requiring
the buyer to give notice within eight days of delivery was
illegible and appeared on documents unilaterally generated
by the seller after the contract was concluded.36 Parties also
have been found not to have derogated from article 39 just
by agreeing to an 18-month contractual warranty,37 or to a
guaranty agreement that did not expressly address the buyer’s obligation to give notice of lack of conformity.38 On
the other hand, it has been recognized that a trade usage
relating to notice of defects can derogate from article 39
if the trade usage is binding on the parties under CISG
article 9.39 A decision has also held that a seller’s standard
term requiring the buyer to give written notice of claimed
defects in the goods within eight days of delivery was
incorporated into the contract where the buyer was familiar
with the term from the parties’ prior dealings and the seller
had expressly referred to its standard terms in his offer.40
To the extent an agreement by the parties relating to notice
of non-conformity fails to address particular issues, the
provisions of article 39 have been invoked to fill the
gaps.41
Waiver by the seller or the buyer
8. Although article 39 gives a seller the right to prevent
a buyer from relying on a lack of conformity if the buyer
does not give the seller timely and proper notice thereof,
a seller can waive this right by leading the buyer to think
that the seller would not object to the buyer’s notice. Thus
where the seller, after receiving notice from the buyer that
the delivered goods were not conforming, declared that it
would give credit for the goods if the buyer’s complaints
about defects were confirmed, one court found that the
seller had waived its right to object to the timeliness of the
buyer’s notice.42 On the other hand, a court invoked domestic law and a policy to encourage amicable settlements in
concluding that a seller had not waived its right to claim
that notice was untimely: the fact that the seller had
accepted return of the goods in order to examine them and
had granted the buyer a provisional pro forma credit for
the price did not constitute a waiver, the court held.43
Another court has found that the mere fact that the seller
examined the goods, at the buyer’s request, after receiving
the buyer’s complaint of lack of conformity did not constitute a waiver of the right to argue that the buyer’s notice
of non-conformity was late.44 A court has stated that a seller
can waive its rights under article 39 either expressly or
impliedly, and that implied waiver requires specific indications that would lead the buyer to understand that the seller’s actions constituted a waiver; the court went on to
Part three. Sale of goods
conclude that, although the seller in the case had not waived
its right to object to the timeliness of notice of a lack of
conformity merely by entering into settlement negotiations
with the buyer over the non-conformity, the seller’s willingness to negotiate—in combination with the extended period
during which such negotiations continued (15 months), the
failure of the seller to reserve its rights under article 39
during that time, and the seller’s actions in acceding to the
buyer’s request to pay for an expert to examine the goods
and in offering the buyer damages equal to seven time the
price for the goods—supported the conclusion that the
seller had waived its right to object to late notice.45 Another
court has distinguished between waiver of a seller’s article  39 rights and estoppel from asserting such rights: it
concluded that the seller had not waived its right to object
to late notice because the intention of parties to waive rights
had to be very clearly established, and the mere fact that
the seller did not immediately reject the notice as late at
the time it was given was not sufficient evidence of waiver;
on the other hand, by remaining in communication with
the buyer in order to keep informed of the buyer’s customer’s complaints, and by making statements to the buyer
indicating that the seller would not raise the defence of late
notice, the seller became estopped from invoking that
defence when the buyer relied on the impression that the
seller would not complain of untimely notice.46
9. Buyers have also been deemed to have waived (or to
be estopped from exercising) their rights under article 39
when they affirmatively indicated acceptance of delivered
goods and/or acknowledged an obligation for the price
without raising objection to defects that were apparent.
Thus a buyer was found to have lost its right to complain
about missing parts and defects that should have been discovered when it agreed to the amount of a disputed balance
remaining on the purchase price and signed bills of
exchange for that balance.47 Similarly, a buyer who negotiated a reduction in the price of video recorders on the basis
of certain defects lost its right to object to other defects
known to the buyer at the time the price-reduction was
agreed to.48 And a buyer who paid outstanding invoices
with bank checks and then stopped payment on the checks
before they were honoured was deemed to have lost its
right to complain of defects known when the checks were
provided.49
Article 39 (1)—Purposes
10. Article 39 (1) requires a buyer who claims that the
goods do not conform to the contract to give notice to the
seller specifying the nature of the lack of conformity within
a reasonable time after he has discovered it or ought to
have discovered it. This requirement has been deemed to
serve several different purposes. A number of decisions
indicate that a purpose is to promote prompt clarification
as to whether a breach has occurred.50 It has also been
suggested that the required notice is designed to give the
seller the information needed to determine how to proceed
in general with respect to the buyer’s claim,51 and more
specifically to facilitate the seller’s cure of defects.52 One
decision states that the purpose is to promote the quick
settlement of disputes and to assist the seller in defending himself.53 Another decision similarly suggests that
125
article  39 (1) assists the seller in defending himself against
invalid claims.54 The notice requirement has also been associated with a buyer’s obligation of good faith.55 Another
decision asserts that the purpose of Article 39 (1) notice is
to permit a seller to prepare to defend itself against the
allegations of lack of conformity and also, on the particular
facts of the case, to serve the public health by allowing the
seller to take measures against the spread of a virus allegedly infecting the goods (fish eggs).56
Contents of notice; specificity required
11. The notice required by article 39 (1) must “specify
the nature of the lack of conformity. . .”. This language has
been interpreted and applied in a large number of decisions.
Several have made general pronouncements concerning the
specificity requirement. It has been said that notice of the
mere fact of a lack of conformity is insufficient, but that
the buyer must specify the precise nature of the defects;57
that notice should indicate both the nature and the extent
of the lack of conformity, and should convey the results of
the buyer’s examination of the goods;58 that notice should
be specific enough to allow the seller to comprehend the
buyer’s claim and to take appropriate steps in response,
i.e., to examine the goods and arrange for a substitute delivery or otherwise remedy the lack of conformity;59 that the
purpose of the specificity requirement is to enable the seller
to understand the kind of breach claimed by the buyer and
to take the steps necessary to cure it, such as initiating a
substitute or additional delivery;60 that notice should be sufficiently detailed that misunderstanding by the seller would
be impossible and the seller could determine unmistakably
what the buyer meant;61 that the notice should be sufficiently specific to permit the seller to know what item was
claimed to lack conformity and what the claimed lack of
conformity consisted of.62 Several decisions have emphasized that the notice should identify the particular goods
claimed to be non-conforming;63 one such decision found
that, even though the piece of agricultural machinery that
the buyer claimed was defective was the only one of its
type that the buyer had purchased from the seller, the specificity requirement was not satisfied where the notice
failed to identify the serial number or the date of delivery,
because the seller should not be forced to search its files
for the records of the machine in question.64 A number of
decisions have noted that each claimed non-conformity
must be specifically described, and the fact that notice may
be sufficiently specific as to one defect does not mean that
the notice requirement for other claimed defects is satisfied.65 The specificity requirement has been applied to oral
notice of lack of conformity.66 On the other hand, several
decisions have warned against setting up an overly-demanding standard of specificity.67 It has also been suggested that
different standards of specificity are required of different
kinds of buyers, with expert buyers expected to provide
more detailed notice.68 In the case of machinery and technical equipment, it has been found that the specificity requirement is satisfied by a description of the symptoms of a
lack of conformity, and that an explanation of the underlying causes is not required.69
12. The following descriptions of a lack of conformity
have been found to be sufficiently specific to satisfy
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article  39 (1): notice informing a shoe seller that the buyers’
customer had received an alarming number of complaints
about the goods, that the shoes had holes, and that the outer
sole and heel of the children’s shoes became loose;70 notice
to a seller of a machine for processing moist hygienic tissues that the buyer’s customer had found steel splinters in
semi-finished products produced by the machine, resulting
in patches of rust on the finished products;71 notice that
floor tiles suffered from serious premature wear and discoloration;72 notice that occurred when the seller was actually shown the nonconforming goods on the premises of
the buyer’s customer.73
13. The following descriptions in notices have been found
not to satisfy article  39  (1) because they were insufficiently
specific:74 notice that stones for the facade of a building
were mislabelled, that some stones and sills were not the
proper size, and that the glue provided for mounting the
stones was defective, where the notice failed to specify
which specific items were unlabelled, the quantity and specific items that were of the wrong size, and the exact quantity of stones treated with the defective glue;75 notice that
flowering plants were in miserable condition and suffered
from poor growth (the court noted that the latter might
refer to either the size or the appearance of the plants);76
notice that cotton cloth was of bad quality;77 notice that
furniture had wrong parts and much breakage;78 notice of
poor workmanship and improper fitting as to fashion
goods;79 notice that failed to specify that cheese was
infested with maggots;80 notice that the quality of fabric
was objectionable and the dimensions of the delivered cloth
prevented it from being cut in an economical fashion,
where the notice failed to specify the nature of the quality
problems and failed to indicate what dimensions would
permit economical cutting;81 notice that agricultural machinery failed to function properly but that did not specify the
serial number or the delivery date of the machine;82 notice
that truffles had softened when they in fact contained
worms, even though most professional sellers would understand that softness implied worms;83 notice that shoes were
not of the quality required by the contract, but which did
not describe the nature of the defects;84 notice that frozen
bacon was rancid, but which did not specify whether all
or only a part of the goods were spoiled;85 notice that documentation for a printer was missing, where it was ambiguous whether the buyer was referring to the entire printing
system or just the printer component of system;86 notice
that sheets of vulcanized rubber for shoe soles had problems or contained defects;87 notice stating that leather goods
did not conform to the buyer’s specifications, could not be
sold to the buyer’s customers, and 250 items were badly
stamped;88 notice that five reels of blankets were missing,
but which did not specify the design of the missing blankets
and therefore did not permit seller to cure.89
14. Beyond the specificity requirement discussed above,
the CISG does not further define the contents of the notice
required by article 39 (1). One court has stated that, so
long as the notice precisely describes defects in the goods
reported by the buyer’s customer, the notice need not claim
that such defects constitute a breach by the seller, and may
even express doubts that the customer’s complaints were
justified.90 On the other hand, another court has concluded
that a buyer who merely requested the seller’s assistance
in addressing problems with computer software had not
given notice of lack of conformity as required by
article  39  (1).91
Timely notice in general
15. Article 39 (1) requires the buyer to give notice of lack
of conformity within a reasonable time after he has discovered or ought to have discovered it. This limitation on
the time in which notice must be given, it has been asserted,
is to be determined on the basis of the interests of good
business, so that neither side has an unfair advantage and
the rapid settlement of disputes is promoted.92 Framing the
time for notice in terms of a reasonable time is designed
to promote flexibility,93 and the period varies with the facts
of each case.94 Several decisions have indicated that the
reasonable time standard is a strict one.95 The time for a
buyer to give notice of lack of conformity under article 39
has been distinguished from the time within which he must
give notice of the remedy (such as avoidance of contract)
he is pursuing; a buyer’s notice of remedy, it was suggested,
need not be given until a reasonable time after article 39
notice.96 A different decision, however, asserts that the reasonable time for giving notice of lack of conformity under
article 39 (1) is the same as the reasonable time for giving
notice of avoidance under article  49  (2)  (b).97
When time for notice begins to run—
relation to article 38
16. The reasonable time within which the buyer must give
notice under article  39  (1) commences at the moment the
buyer discovered or ought to have discovered the lack of
conformity. Thus the period for the buyer’s notice begins
to run at the earlier of two moments: the time the buyer
actually (or subjectively) discovered the non-conformity,
and the time the buyer theoretically should have discovered
(ought to have discovered) the non-conformity.98
17. The time when the buyer actually discovered the lack
of conformity can be shown if the buyer admits the time
at which it became subjectively aware of the defects99 or
there are objective facts proving when the buyer acquired
such knowledge.100 Complaints that the buyer received from
customers to whom the goods were resold may establish
actual knowledge: it has been found that the time for giving
notice of lack of conformity commences, if it has not
started previously, when the buyer receives such complaints,101 even if the buyer doubts their accuracy.102
18. As was earlier noted in the discussion of article 38,103
the time at which the buyer should have discovered a lack
of conformity for purposes of article 39 (1) is closely connected to the buyer’s obligation under article 38 to examine
the goods. In the case of a non-conformity that should
reasonably have been discovered by the buyer upon the
initial examination of the goods, the buyer’s time for giving
notice begins to run from the time such examination should
have been conducted. As one court stated, “[t]he point in
time at which the buyer was obligated to have determined
the breach of contract is governed by the provisions regulating the duty to examine. In this context, CISG article 38
Part three. Sale of goods
127
provides that the goods must be examined within as short
a period of time as the circumstances permit”.104 Thus in
cases in which an initial examination following delivery
should have revealed the lack of conformity, the buyer’s
reasonable time for giving notice begins after the period
for examining the goods under article 38 has run, and the
deadline for buyer’s notice should accommodate both the
period for examination under article 38 and a further reasonable time for notice under article 39 (1). Many decisions
have recognized these two separate components of the time
for the buyer’s notice of non-conformities,105 although some
decisions do not appear to acknowledge the distinction.106
article 38);119 eight days following discovery;120 two weeks
(following one week for examination).121 A theory that in
normal circumstances the reasonable time for giving notice
is one month following the time the defect was or ought
to have been discovered—sometimes referred to as the
noble month approach—has been accepted in several decisions.122 Where the goods are perishable, some decisions
have suggested very short presumptive notice periods.123
19. In the case of latent defects not reasonably detectable
before some period of actual use, the time when the buyer
should discover the lack of conformity occurs later than
the time for the initial examination of the goods immediately following delivery.107 One decision raised the question
whether the time for giving notice of latent defects should
ever start before the buyer acquires actual knowledge of
the defects, although the decision avoided resolving the
issue.108 Other decisions, however, have determined that the
reasonable time for giving notice of latent defects commenced at a time when the buyer should have discovered
the defects, whether or not the buyer had actual knowledge
of the defects at that time.109 Some decisions appear to recognize that the discovery of latent defects may be a process
that occurs over a period of time, and have suggested that
the buyer’s notice need only convey the information reasonably available to the buyer at the time of the notice, to be
supplemented by information in later notices.110
21. It is clear that the reasonable time for notice will vary
with the circumstances of the particular case.124 Decisions
have identified a variety of factors that will impact the
length of the notice period. A frequently cited factor relates
to the obviousness of the lack of conformity—a patent,
easily noticeable defect tends to shorten the period for
notice.125 The nature of the goods is another frequentlycited factor:126 goods that are perishable127 or seasonal128
require earlier notice of defects; notice with respect to durable or non-seasonal goods, in contrast, is subject to a longer
notice period.129 The buyer’s plans to process the goods130
or otherwise handle them in a fashion that might make it
difficult to determine if the seller was responsible for a
lack of conformity131 may also shorten the time for notice.
Trade practices132 as well as usages established between the
parties133 can also influence the time for notice, as can the
buyer’s awareness that the seller itself was operating under
a deadline that would require prompt notice of defects.134
An expert or professional buyer has been found to be subject to a shorter period for notice.135 One court has stated
that notice should have been given within as short a period
as was practicable where quick notice was required for
public health reasons—to permit the seller to take measures
against the spread of a virus allegedly infecting the goods
(fish eggs).136 The fact that the buyer asked for expedited
delivery of the goods has been cited as a factor that shortens the time for giving notice of lack of conformity.137
Presumptive periods for notice
20. Although the time period set in article 39 (1) for the
buyer to give notice—within a reasonable time after the
buyer discovers or ought to have discovered the non-conformity—is designed to be flexible111 and will vary with
the circumstances of the case,112 a number of decisions have
attempted to establish specific presumptive time periods as
general guidelines or default rules. Courts adopting this
approach usually contemplate that the presumptive notice
periods they put forward will be adjusted to reflect the facts
of the particular case.113 The suggested presumptive periods
vary considerably both in length and in the approach taken
to measuring the period. Several decisions propose presumptive periods measured from the time goods are delivered, so that the periods encompass not only the time for
giving notice after discovery of the lack of conformity, but
also the time for the buyer to discover the non-conformity
in the first place. In this vein, presumptive periods of
8  days after delivery (in the case of durable, non-seasonal
goods),114 14  days for examination and notice,115 from two
weeks to one month after delivery,16 and one month after
delivery117 have been suggested. Other decisions distinguish
between the time for discovering the lack of conformity
and the time for giving notice following discovery, often
proposing presumptive periods for both components and
frequently indicating particular categories of goods to
which the period would apply. The following have been
suggested as the presumptive reasonable time for giving
notice: a few days after discovery of the lack of conformity;118 one week (following one week for examination under
Factors influencing reasonable
time for notice
Application of reasonable time standard
22. It has been found that a buyer who did not give any
notice of a lack of conformity before filing suit against the
seller had failed to meet the requirements for timely notice
under article 39 (1), and had lost the right to rely on the
lack of conformity.138 Even where the buyer did provide
notice, the notice has been found too late in many instances.
As measured from the date the goods were delivered,
notices given at the following times have been found
untimely on the facts of particular cases: over two years;139
24 months;140 one year;141 nine months;142 seven to eight
months;143 four months;144 three and one-half months;145
three months;146 more than two and one-half months;147 two
months;148 two months in the case of one delivery and
approximately seven weeks in the case of another delivery;149 seven weeks;150 six weeks;151 one month;152 25  days;153
24 days;154 23 days;155 21 days;156 20 days;157 19 days;158
16  days;159 almost two weeks;160 any time beyond the day
of delivery (involving perishable flowers).161 As measured
from the date that the buyer discovered or ought to have
discovered the lack of conformity, notices given at the
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following times have been found too late on the facts of
particular cases: seven months;162 almost four months;163
more than two months;164 six weeks;165 32  days;166 slightly
more than one month;167 one month (by fax) and three
weeks (by telephone);168 four weeks;169 three weeks;170
approximately two weeks;171 seven days.172 On the other
hand, a number of decisions have found that the buyer gave
notice in timely fashion. On the facts of particular cases,
notices given at the following times have been found to be
within the reasonable time mandated by article 39 (1): one
day after the goods were handed over to the buyer;173 one
day after the goods were examined;174 three days after
delivery;175 seven days after the buyer learned of the
defects;176 within eight  days after the goods were examined;177 eight days after an expert’s report identified defects
in the goods;178 11 days after delivery;179 a series of notices,
one given two weeks after an initial provisional test on the
goods, another given a month after a second test, and final
notices given six months after delivery of one machine and
eleven months after delivery of another machine;180 19 days
after delivery;181 19–21 days after the examination of the
goods;182 four weeks after the buyer hypothetically ought
to have known of the lack of conformity;183 within one
month of delivery.184
Article 39 (2)
23. Article 39 (2) establishes an absolute cut-off date for
notice of lack of conformity—two years from the date the
goods were actually handed over to the buyer, subject to
an exception where such a time limit would be inconsistent
with a contractual period of guarantee.185 Without such a
limit the time for notice might not have a clear end under
the flexible and variable time standards in article 39 (1).
In the case of latent defects, for example, the time the buyer
discovers or ought to discover the lack of conformity, and
thus the moment that the buyer’s reasonable time for giving
notice under article 39 (1) commences, could be long after
the goods are delivered. In such cases, absent a contractual
guarantee period that protects the buyer for a longer time,
article 39 (2) will cut-off the buyer’s right to give notice
at two years after the goods were actually handed over, and
thus prevent the buyer from preserving its rights to rely on
a lack of conformity which is not discovered and noticed
before that point.186 Unlike the period for notice established
in 39 (1), which is designed to be flexible and to vary with
the circumstances, the two-year limit in article 39 (2) is
precise and non-variable (except where the contractual
period of guarantee exception applies). Indeed, the apparent
purpose of article 39 is to provide a specific, predictable
period beyond which a seller can be confident that claims
of a lack of conformity in the goods will not be legally
cognizable.
24. The rather limited number of decisions applying article 39 (2) have addressed several aspects of the provision.
Thus several decisions have indicated that notice which is
not specific enough to satisfy article 39 (1) will not constitute adequate notice under article 39 (2), even though
the latter provision does not expressly incorporate the language in article 39 (1) requiring that the notice specify the
nature of the lack of conformity.187 Several other decisions
have explored the relationship between article 39 (2) and
rules specifying a deadline for commencing litigation based
on breach of a sales contract (statutes of limitation or prescription periods). One court which considered this question struggled to reconcile a one-year limitations period in
domestic law with the two-year notice period in article  39  (2), eventually opting to extend the domestic limitations period to two years.188 Other decisions were at pains
to distinguish between the rule of article 39 (2), which
establishes a deadline for giving notice of lack of conformity, and a statute of limitations or prescription period, which
establishes deadlines for commencing litigation.189 A
number of decisions have involved claims that the parties
had derogated from article 39 (2) by agreement. Thus an
arbitral tribunal found that the parties had derogated from
article 39 (2) by agreeing to a maximum guarantee period
of 18 months, although the tribunal also explained that the
prescription period for a buyer who has given timely notice
was not governed by article 39 (2), and was a matter
beyond the scope of the CISG to be subject to domestic
law.190 On the other hand, an arbitral panel has determined
that a clause requiring that disputes be submitted to arbitration within 30 days after the parties reached an impasse in
negotiations did not operate as a derogation from article  39  (2).191 Yet another arbitral decision found that the
parties had not derogated from the two-year cut-off in article 39 (2) just because the seller may have orally represented to the buyer that the goods (sophisticated machinery)
would last 30 years.192 This decision presumably implies
that such a representation does not constitute a contractual
period of guarantee within the meaning of article 39 (2),
because otherwise the clause would have extended the cutoff period for notice. Another decision also dealt with the
meaning of the phrase contractual period of guarantee, finding that a clause fixing a deadline for submitting disputes
to arbitration did not create such a contractual guarantee
period.193
Notes
1
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998].
2
CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000] (see full text of the decision).
CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993] (see full text of the decision); CLOUT case No. 282
[Oberlandesgericht Koblenz, Germany, 31 January 1997]; Landgericht Landshut, Germany, 5 April 1995, Unilex.
3
4
Amtsgericht Augsburg, Germany, 29 January 1996, Unilex.
Note that the CISG provision governing time of delivery (art. 33) is not found in the section of the CISG entitled “Conformity of
the goods and third party claims” (Section II of Part III, Chapter I), but rather is located in the section entitled “Delivery of the goods
and handing over of documents” (Section I of Part III, Chapter II).
5
Part three. Sale of goods
129
6
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision); Landgericht Landshut, Germany,
5 April 1995, Unilex; Landgericht Bielefeld, Germany, 18 January 1991, Unilex; CLOUT case No. 423 [Oberster Gerichtshof, Austria,
27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.htm; CLOUT case No. 597 [Oberlandesgericht Celle,
Germany, 10  March 2004].
7
CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995].
CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991]; CLOUT case No.  230 [Oberlandesgericht Karlsruhe,
Germany, 25 June 1997] (see full text of the decision), reversed on other grounds by CLOUT case No. 270 [Bundesgerichtshof, Germany,
25 November 1998].
8
9
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (see full text of the decision); CLOUT case No. 273
[Oberlandesgericht München, Germany, 9 July 1997]. Compare also CLOUT case No. 46 [Landgericht Aachen, Germany, 3 April 1990]
(finding that buyer had the right to reduce the price under art. 50 because it had given proper notice of lack of conformity) (see full
text of the decision).
10
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998]; CLOUT case No. 282 [Oberlandesgericht Koblenz,
Germany, 31 January 1997] (see full text of the decision).
11
CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991].
12
See the Digests for arts. 40 and 44.
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 251 [Handelsgericht des Kantons Zürich,
Switzerland, 30 November 1998]; CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also in Unilex; CLOUT case
No. 305 [Oberster Gerichtshof, Austria, 30 June 1998]; Pretura di Torino, Italy, 30 January 1997, Unilex, also available on the
internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/970130i3.html; CLOUT case No. 196 [Handelsgericht des Kantons Zürich,
Switzerland, 26 April 1995] (see full text of the decision); CLOUT case No. 97 [Handelsgericht des Kantons Zürich, Switzerland,
9  September 1993].
13
Rechtbank ’s-Gravenhage, the Netherlands, 7 June 1995, Unilex; Landgericht Marburg, Germany, 12 December 1995, Unilex; Landgericht Duisburg, Germany, 17 April 1996, Unilex; CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998];
CLOUT case No. 289 [Oberlandesgericht Stuttgart, Germany, 21 August 1995]; CLOUT case No. 291 [Oberlandesgericht Frankfurt a.
M., Germany, 23 May 1995], (see full text of the decision); CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February
1994] (see full text of the decision); ICC Award No. 8611 of 1997, Unilex; Arbitral Panel of the Zurich Chamber of Commerce, award
No. ZHK 273/95, 31 May 1996, Unilex.
14
Pretura di Torino, Italy, 30 January 1997, Unilex, also available on the INTERNET at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/970130i3.html.
15
16
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]; CLOUT case No. 251 [Handelsgericht des Kantons Zürich,
Switzerland, 30 November 1998]; CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text
of the decision); CLOUT case No. 97 [Handelsgericht des Kantons Zürich Switzerland 9 September 1993].
17
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000].
CLOUT case No. 222 [Federal Court of Appeals for the Eleventh Circuit, United States, 29 June 1998], in which the buyer had
signed an order form containing a clause requiring complaints of defects in the goods to be in writing and made by certified letter. The
decision proceeds on the premise that, if this clause became part of the parties’ contract, the buyer’s oral notice of lack of conformity
would not have been valid. The court remanded the case to determine whether the clause had in fact been incorporated into the
agreement.
18
19
CLOUT case No. 225 [Cour d’appel, Versailles, France, 29 January 1998] (see full text of the decision).
CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003] (see full text of the decision) (stating that the Convention does not require buyer’s notice to be in a particular form).
20
21
Landgericht Frankfurt, Germany, 9 December 1992, Unilex. This is one of the very rare decisions in which a particular telephonic
notice was held to satisfy the notice requirement in fact. Another decision recognized the theoretical validity of telephone notice while
finding on its particular facts that the requirements of article 39 had not been satisfied. Landgericht Frankfurt, Germany, 13 July 1994,
Unilex. Some decisions have found that telephonic notice failed to satisfy article 39 in some respect (e.g., because it was given too late)
without commenting on the form of the notice. CLOUT case No. 411 [Landgericht Bochum, Germany, 24 January 1996], also in Unilex;
Rechtbank van Koophandel Kortrijk, Belgium, 16 December 1996, Unilex.
22
Landgericht Marburg, Germany, 12 December 1995, Unilex; Amtsgericht Kehl, Germany, 6  October 1995, Unilex; CLOUT case
No.  4 [Landgericht Stuttgart, Germany, 31 August 1989] (see full text of the decision).
23
Landgericht Frankfurt, Germany, 13 July 1994, Unilex.
24
CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989] (see full text of the decision).
25
Rechtbank van Koophandel Kortrijk, Belgium, 27 June 1997, Unilex.
Landgericht Aachen, Germany, 28 July 1993, Unilex, reversed on other grounds by the Oberlandesgericht Köln, Germany, 22 February 1994, Unilex [see also CLOUT case No. 120].
26
27
Article 39 (1) requires the buyer to give notice “to the seller,” and article 39 (2) states that the buyer must “give the seller
notice.”
28
CLOUT case No. 220 [Kantonsgericht Nidwalden, Switzerland, 3 December 1997] (see full text of the decision).
CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996], see also Unilex. The court also noted that the notice must
be specifically directed to the seller.
29
30
CLOUT case No. 411 [Landgericht Bochum, Germany, 24 January 1996], also in Unilex.
130
31
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
CLOUT case No. 364 [Landgericht Köln, Germany 30 November 1999].
See, e.g., CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (term requiring buyer to give written notice of
claimed defects within eight days of delivery (although seller was found to have waived its rights under this term) (see full text of the
decision).
32
33
CLOUT case No. 336 [Canton of Ticino Tribunale d’appello, Switzerland, 8 June 1999]; Landgericht Gießen, Germany, 5 July 1994,
Unilex; Landgericht Hannover, Germany, 1 December 1993, Unilex; CLOUT case No. 303 [Arbitration—International Chamber of Commerce No. 7331 1994] (see full text of the decision); CLOUT case No. 94 [Arbitration—Internationales Schiedsgericht der Bundeskammer
der gewerblichen Wirtschaft–Wien, 15 June 1994]; CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991]. See
also CLOUT case No. 305 [Oberster Gerichtshof, Austria, 30 June 1998] (remanding to determine whether contractual provision governing time for giving notice of defects had been complied with); but see Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (the
court notes that the seller’s standard term setting the time for giving notice of defects was part of the contract, but the court apparently
did not apply the term; its analysis of whether the buyer gave notice within a reasonable time, however, was influenced by the term).
34
CLOUT case No. 232 [Oberlandesgericht München Germany 11 March 1998] (see full text of the decision); CLOUT case No. 292
[Oberlandesgericht Saarbrücken, Germany, 13 January 1993] (see full text of the decision).
35
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (see full text of the decision); CLOUT case No. 303
[ArbitrationInternational Chamber of Commerce No.  7331 1994] (see full text of the decision).
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision). In CLOUT case No. 222 [Federal
Court of Appeals for the Eleventh Circuit, United States, 29  June 1998] the court ruled that, although the parties had each signed a form
with a provision requiring the buyer to give written notice of defects within 10 days of delivery, evidence showing the parties did not
subjectively intend to be bound by the provision should have been admitted under CISG article 8 (1). One court has held that a term
requiring the buyer to give notice of defects within 30 days of delivery bound the buyer because it had been incorporated into the contract under the rules of article 19 of the CISG; see CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991] (see
full text of the decision). Another court found that under article 18 (1) a buyer accepted terms on the seller’s order confirmation, including a clause requiring notice of defects to be given within eight days after delivery, by accepting delivery of the goods; see CLOUT
case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13  January 1993] (see full text of the decision).
36
37
CLOUT case No. 237 [ArbitrationArbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of the
decision).
38
CLOUT case No. 542 [Oberster Gerichtshof, Austria, 17 April 2002] (see full text of the decision).
CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993]. On the facts of the particular case, the court
found that the parties’ agreement to a clause requiring notice within eight days of delivery excluded the applicability of any such trade
usage.
39
40
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002 (see full text of the decision approving reasoning of lower
appeals court).
41
CLOUT case No. 229 [Bundesgerichtshof, Germany, 4 December 1996] (agreement requiring the buyer to give immediate notice of
defects that arose after delivery of the goods did not govern the obligation to notify of defects existing at delivery; the latter was therefore
regulated by article 39 (1)); ICC Arbitration Case No. 8611, 1997, Unilex (because the parties’ agreement regarding notice of defects
did not address, e.g., the specificity with which the notice must describe the claimed defect, the court supplemented the agreement by
reference to article  39  (1)).
42
CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997]. See also CLOUT case No. 542 [Oberster Gerichtshof, Austria,
17 April 2002] (buyer argued seller had waived its right to object to late notice under article 39 (1) through a course of dealing in which
seller had failed to object to the buyer’s repeated untimely notice, although the court rejedcted the argument); CLOUT case No. 541
[Oberster Gerichtshof, Austria, 14  January 2002 (approving holding of lower appeals court that seller had waived his right to object to
timeliness of notice of defects under contract clause requiring notice within eight days of delivery when seller accepted the buyer’s late
notice and offered a remedy) (see full text of the decision).
43
CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March 1993]. The court indicated that waiver by the seller of
its article 39 rights would only be deemed to occur in clear circumstances, as where the seller unconditionally accepted return of the
goods by the buyer.
44
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998].
45
CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998].
CLOUT case No. 94 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft–Wien, 15 June
1994]. According to the court, the buyer had relied on the impression that the seller would not object to late notice because the buyer
refrained from taking immediate legal action against its customer or the seller.
46
47
CLOUT case No. 337 [Landgericht Saarbrücken, Germany, 26 March 1996].
48
CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000].
49
Arrondissementsrechtsbank Hof’s-Hertogenbosch, the Netherlands, 26 February 1992, Unilex.
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm; CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993] (see full text of the decision); CLOUT case No.  284
[Oberlandesgericht Köln, Germany, 21 August 1997] (see full text of the decision); CLOUT case No. 3 [Landgericht München, Germany,
3 July 1989] (see full text of the decision).
50
51
CLOUT case No. 337 [Landgericht Saarbrücken, Germany, 26 March 1996]; CLOUT case No.  378 [Tribunale di Vigevano, Italy,
12  July 2000] (see full text of the decision).
Part three. Sale of goods
131
52
CLOUT case No. 344 [Landgericht Erfurt, Germany, 29 July 1998]; CLOUT case No. 3 [Landgericht München, Germany, 3 July
1989] (see full text of the decision). See also CLOUT case No 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997] (implying
that purpose of notice is to facilitate cure by the seller).
53
CLOUT cae No. 409 [Landgericht Kassel, Germany, 15 February 1996], see also Unilex.
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm.
54
55
Rechtbank Zwolle, 5 March 1997, the Netherlands, 1997, Unilex.
56
CLOUT case No. 486 [Audiencia Provincial de La Coruña, Spain, 21 June 2002].
Landgericht Hannover, Germany, 1 December 1993, Unilex. Compare CLOUT case No. 597 [Oberlandesgericht Celle, Germany,
10  March 2004] (stating that notice “must describe the non-conformity as precisely as possible”) (see full text of the decision).
57
58
CLOUT case No. 344 [Landgericht Erfurt, Germany, 29 July 1998] (see full text of the decision).
Id. See also CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003] (stating that buyer’s notice should permit
the seller to react to the claim of lack of conformity in an appropriate fashion, and to chose among the several responses available to
it, such as curing the lack of conformity, replacing the nonconforming goods, or demanding the opportunity to examine the goods himself) (see full text of the decision); CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (approving approach of lower
appeals court which had stated: “Notice must specify the nature of the lack of conformity adequately enough to put the seller in a position to be able to reasonably react to it”) (see full text of the decision).
59
60
CLOUT case No. 229 [Bundesgerichtshof, Germany, 4 December 1996] (see full text of the decision). For a similar statement, see
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3  November 1999] (see full text of the decision); see also CLOUT case No. 282
[Oberlandesgericht Koblenz, Germany, 31 January 1997] (implying that the purpose of the specificity requirement is to permit the seller
to remedy the lack of conformity).
61
Id.
62
See also CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999].
CLOUT case No. 319 [Bundesgerichtshof Germany, 3 November 1999]; ICC Arbitration Award No. 8611, 1997, Unilex; CLOUT
case No. 282 [Oberlandesgericht Koblenz, Germany, 31  January 1997]; Landgericht München, Germany, 20 March 1995, Unilex.
63
64
Landgericht Marburg, Germany, 12 December 1995, Unilex.
CLOUT case No. 597 [Oberlandesgericht Celle, Germany, 10  March 2004]; CLOUT case No. 541 [Oberster Gerichtshof, Austria,
14  January 2002]; CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision); Landgericht
Bielefeld, Germany, 18 January 1991; CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the
Internet at http://www.cisg.at/1_22399x.htm.
65
66
CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989] (see full text of the decision). See also CLOUT case No. 593
[Oberlandesgericht Karlsruhe, Germany, 6 March 2003].
67
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision) (stating that, after giving initial
notice of lack of conformity the buyer need notify the seller of additional details only if they are discoverable within the examination
period at reasonable cost); CLOUT case No. 229 [Bundesgerichtshof, Germany, 4 December 1996] (see full text of the decision); CLOUT
case No. 252 [Handelsgericht des Kantons Zürich, Switzerland, 21  September 1998].
68
CLOUT case No. 252 [Handelsgericht des Kantons Zürich, Switzerland, 21 September 1998]; CLOUT case No. 344 [Landgericht
Erfurt, Germany, 29 July 1998] (see full text of the decision).
69
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999]. See also Hoge Raad, the Netherlands, 20 February 1998,
Unilex (implying that a description of symptoms rather than the causes of defects in floor tiles would be sufficient); Tribunale di Busto
Arsizio, Italy, 13  December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available
on Unilex (buyer was under no duty to indicate the specific cause of the malfunction in a machine, particularly where the seller could
not provide the necessary information).
70
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also in Unilex.
71
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999] (see full text of the decision).
72
Hoge Raad, the Netherlands, 20 February 1998, Unilex.
73
CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003].
For other decisions holding that buyer’s notice lacked sufficient specificity, see CLOUT case No. 337 [Landgericht Saarbrücken,
Germany, 26 March 1996]; CLOUT case No. 336 [Canton of Ticino Tribunale d’appello, Switzerland, 8 June 1999]; ICC Arbitration
case No. 8611 of 1997; CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989] (see full text of the decision); CLOUT
case No. 252 [Handelsgericht des Kantons Zürich, Switzerland, 21  September 1998] (see full text of the decision).
74
75
CLOUT case No. 364 [Landgericht Köln, Germany, 30 November 1999].
76
CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998].
77
Rechtbank van Koophandel Kortrijk, Belgium, 16 December 1996, Unilex.
78
CLOUT case No. 220 [Kantonsgericht Nidwalden, Switzerland, 3 December 1997].
79
CLOUT case No. 3 [Landgericht München, Germany, 3 July 1989].
80
CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991].
81
CLOUT case No. 339 [Landgericht Regensburg, Germany, 24 September 1998].
82
Landgericht Marburg, Germany, 12 December 1995, Unilex.
132
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
CLOUT case No. 411 [Landgericht Bochum, Germany, 24 January 1996], also in Unilex.
83
84
Landgericht Hannover, Germany, 1 December 1993, Unilex.
85
Landgericht München, Germany, 20 March 1995, Unilex.
86
CLOUT case No. 229 [Bundesgerichtshof, Germany, 4 December 1996].
87
CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000].
88
CLOUT case No. 273 [Oberlandesgericht München, Germany, 9 July 1997] (see full text of the decision).
89
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997].
90
Hoge Raad, the Netherlands, 20 February 1998, Unilex.
91
CLOUT case No. 131 [Landgericht München, Germany, 8 February 1995].
92
CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March 1993] (see full text of the decision).
93
Tribunale Civile di Cuneo, Italy, 31 January 1996, Unilex.
Id.; CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March 1993] (see full text of the decision); CLOUT case
No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision); CLOUT case No. 378 [Tribunale di
Vigevano, Italy, 12 July 2000]; CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003].
94
95
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also available on the Internet at http://www.cisg.at/1_22399x.
htm; CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March 1993] (see full text of the decision); CLOUT case No.  81
[Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision); CLOUT case No. 251[Handelsgericht des
Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision).
96
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision).
CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (see full text of the decision). See also
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (distinguishing between late notice of lack of conformity under
article 39 (1) and late notice of avoidance under article 49 (2) (b), but suggesting that the periods for both notices should be limited in
the interest of promoting prompt clarification of the legal relationship between the parties) (see full text of the decision).
97
For decisions in which the buyer’s notice was found to be too late because it should have discovered the defects before it in fact
did, see, e.g., CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003]; CLOUT case No. 378 [Tribunale di Vigevano, Italy,
12 July 2000]; CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989]; CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994]; CLOUT case No. 482 [Cour d’appel Paris, France, 6 November 2001].
98
99
This was the case in the decision of the Landgericht Berlin, Germany, 16 September 1992, Unilex.
An example of such objective evidence can be found in Helsinki Court of First Instance, Finland, 11 June 1995, and Helsinki Court
of Appeals, Finland, 30 June 1998, Unilex, where the buyer commissioned a chemical analysis of the goods which revealed their defects.
See also CLOUT case No. 486 [Audiencia Provincial de La Coruña, Spain, 21 June 2002] (buyer of fish eggs who sent them to an
expert for analysis should have known that they were infected with a virus, at the latest, by the end of the normal time for incubation
and diagnosis of the virus).
100
101
CLOUT case No. 210 [Audienca Provincial Barcelona, Spain, 20 June 1997].
102
Hoge Raad, the Netherlands, 20 February 1998, Unilex.
103
See the Digest for art. 38 at para. 2.
CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision). Accord, CLOUT
case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000]. For decisions finding that the buyer’s notice came too late because the buyer
should have discovered the lack of conformity during the initial examination of the goods, see CLOUT case No. 81 [Oberlandesgericht
Düsseldorf, Germany, 10 February 1994] (the buyer should have examined and discovered the lack of conformity within a few days
after delivery, and therefore buyer’s notice given more than two months after delivery was too late); CLOUT case No. 262 [Kanton St.
Gallen, Gerichtskommission Oberrheintal, Switzerland, 30 June 1995] (buyer’s time for giving notice of lack of conformity began to run
upon delivery and substantial installation of sliding gates, even though the seller had not entirely completed its duties; notice given a
year after delivery was too late); Pretura di Torino, Italy, 30 January 1997, Unilex, also available on the internet at http://www.cisg.law.
pace.edu/cisg/wais/db/cases2/970130i3.html; ICC Arbitration Case No. 8247, June 1996, International Court of Arbitration Bulletin
vol. 11, p. 53 (2000); CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993]; CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995]; Arrondissementsrechtsbank ’s‑Hertogenbosch, the Netherlands, 15 December 1997, Unilex; CLOUT
case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989].
104
105
E.g., CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003]; CLOUT case No. 123 [Bundesgerichtshof, Germany,
8 March 1995] (see full text of the decision); CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30  November
1998]; CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11  September 1998]; Landgericht Düsseldorf, Germany, 23 June
1994, Unilex; Landgericht Mönchengladbach, Germany, May 22 1992, Unilex; Amtsgericht Riedlingen, Germany, 21  October 1994,
Unilex.
106
E.g., Tribunal commercial de Bruxelles, Belgium, 5 October 1994, Unilex; CLOUT case No.  256 [Tribunal Cantonal du Valais,
Switzerland, 29 June 1998] (concluding that notice given seven to eight months after delivery was too late, without distinguishing time
for examination and discovery) (see full text of the decision).
107
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision approving approach of lower
appeals court); Landgericht Paderborn, Germany, 25 June 1996, Unilex; Landgericht Ellwangen, Germany, 21 August 1995, Unilex;
Helsinki Court of First Instance, Finland, 11 June 1995, and Helsinki Court of Appeals, Finland, 30 June 1998, Unilex. In the case of
latent defects not reasonably discoverable in an initial examination, it is not clear whether the obligation to examine under article 38
remains relevant to determining when the buyer ought to have discovered the non-conformity; see the Digest for art. 38 at para. 15.
Part three. Sale of goods
108
133
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999].
CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003]; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July
2000] (even supposing that the defects could not have been discovered at delivery, the buyer should have discovered them at the latest
when processing the goods, and should have given notice immediately thereafter; the buyer in fact waited until it received complaints
from its own customer before notifying the seller); Landgericht Düsseldorf, Germany, 23 June 1994, Unilex.
109
110
CLOUT case No. 225, France, 1998; Hoge Raad, the Netherlands, 20 February 1998, Unilex; Tribunale di Busto Arsizio, Italy,
13  December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available on Unilex.
111
Tribunale Civile di Cuneo, Italy, 31 January 1996, Unilex.
Id.; see also CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March 1993]; CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (see full text of the decision); CLOUT case No. 378 [Tribunale di Vigevano, Italy,
12  July 2000]; CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003].
112
113
E.g., CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003] (asserting that the time for giving notice varies
with the circumstances of the case, but generally ranges from two weeks to one month) (see full text of the decision); CLOUT case
No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (approving approach of lower appeals court that has set set a period of one
week for notice as “a rough norm for orientation”, resulting in a total presumptive period of 14 days for examining the goods and giving
notice) (see full text of the decision); CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also in Unilex (suggesting
a presumptive period of 14 days for examining the goods and giving notice “[i]nsofar as there are no specific circumstances militating
in favour of a shorter or longer period”); CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997]; CLOUT case
No.  164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary, 5 December 1995]
(see full text of the decision).
114
CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995] (see full text of the decision).
115
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also in Unilex.
116
CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003].
CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997]; CLOUT case No. 232 [Oberlandesgericht
München, Germany, 11 March 1998] (see full text of the decision).
117
118
Landgericht Landshut, Germany, 5 April 1993 Unilex database (presumptive time period for defects that are not hidden).
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision approving approach of lower
appeals court); CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998]; Landgericht Mönchengladbach, Germany, 22 May 1992. The latter case indicated that the presumptive periods it proposed applied where the goods were textiles.
119
120
CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998]; CLOUT case No. 230 [Oberlandesgericht Karlsruhe,
Germany, 25 June 1997], reversed on other grounds, CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998] (presumptive period applicable to non-perishable goods).
121
CLOUT case No. 359 [Oberlandesgericht Koblenz, Germany, 18 November 1999] (applicable to case of obvious defects); CLOUT
case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (also proposing presumptive period of seven to
10  days for examination).
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995]; CLOUT case No. 289 [Oberlandesgericht Stuttgart, Germany,
21 August 1995]; Amtsgericht Augsburg, Germany, 29  January 1996; CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November
1999]. See also CLOUT case No. 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry,
Hungary, 5 December 1995] (suggesting acceptance of a notice period of approximately one month in general, but finding that facts of
particular case required quicker notice) (see full text of the decision).
122
123
CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998] (in sales of fresh flowers, notice should be given
on day of delivery); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision), reversed
on other grounds CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998] (asserting that notice of defects in perishable
goods often due in a few hours). See also Amtsgericht Riedlingen, Germany, 21 October 1994, Unilex, where the court stated that the
buyer should have examined ham within 3 days and given notice within further three days. Although the goods in that case were perishable, the court did not specifically mention this factor in setting out its time limits.
124
Tribunale Civile di Cuneo, Italy, 31 January 1996, Unilex; CLOUT case No. 310 [Oberlandesgericht Düsseldorf, Germany, 12 March
1993]; CLOUT case No. 81 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994]; CLOUT case No. 378 [Tribunale di Vigevano,
Italy, 12 July 2000].
Rechtbank van Koophandel Kortrijk, Belgium, 16 December 1996, Unilex; CLOUT case No 310 [Oberlandesgericht Düsseldorf,
Germany, 12 March 1993] (see full text of the decision): CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997]
(see full text of the decision); Landgericht Landshut, Germany, 5 April 1995, Unilex; Landgericht Berlin, Germany, 16 September 1992,
Unilex; Amtsgericht Riedlingen, Germany, 21 October 1994, Unilex; Tribunale Civile di Cuneo, Italy, 31 January 1996, Unilex; Landgericht Berlin, Germany, 30  September 1993, Unilex. Consideration of the obviousness of the defect may be more relevant to determining
when the reasonable time for notice should commence (i.e., when the buyer ought to have discovered the lack of conformity) than to
the question of the duration of the reasonable time.
125
126
CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991]; Pretura di Torino, Italy 30 January 1997, Unilex
(referring to the “nature and value of the goods”), also available on the INTERNET at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/
970130i3.html; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000].
127
CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991]; CLOUT case No.  290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998]; CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision). See
also Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (citing perishable nature of goods as factor mandating a short period
for examination under art. 38, which in turn meant that buyer’s notice was given beyond a reasonable time from when it should have
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
discovered the defects); CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003] (dicta stating that perishability
of the goods would shorten reasonable time for notice, although the goods in the case were not perishable).
128
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also in Unilex; Amtsgericht Augsburg, Germany, 29  January
1996, Unilex.
129
CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995] (see full text of the decision). See also CLOUT
case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28  October 1998] (noting that the appeals court did not review lower court’s
decision that notice was timely because the goods consisted of frozen rather than fresh meat).
Arrondissementsrechtsbank ’s-Hertogenbosch, the Netherlands, 15 December 1997, Unilex; Rechtbank van Koophandel Kortrijk,
Belgium, 16 December 1996, Unilex; see also Rechtbank Zwolle, the Netherlands, 5 March 1997, Unilex (citing buyer’s plans to process
goods as factor mandating a short period for examination under art. 38, which in turn meant that buyer’s notice was given beyond a
reasonable time from when it should have discovered the defects).
130
131
CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997].
Rechtbank van Koophandel Kortrijk, Belgium, 16 December 1996, Unilex; Rechtbank Zwolle, the Netherlands, 5 March 1997,
Unilex.
132
133
CLOUT case No 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
5  December 1995] (see full text of the decision).
134
Landgericht Köln, Germany, 11 November 1993, Unilex.
Gerechtshof Arnhem, the Netherlands, 17 June 1997, Unilex; CLOUT case No. 232 [Oberlandesgericht München, Germany, 11  March
1998] (see full text of the decision).
135
136
CLOUT case No. 486 [Audiencia Provincial de La Coruña, Spain, 21 June 2002].
137
CLOUT case No. 634 [Landgericht Berlin, Germany 21  March 2003].
CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997] (see full text of the decision). See also CLOUT
case No. 341 [Ontario Superior Court of Justice, Canada, 31 August 1999], where on disputed evidence the court concluded the buyer
had not given the seller notice of lack of conformity.
138
139
CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (see full tet of the decision).
140
Landgericht Düsseldorf, Germany, 23 June 1994, Unilex.
CLOUT case No. 262 [Kanton St. Gallen, Gerichtskommission Oberrheintal, Switzerland 30  June 1995]; CLOUT case No. 263
[Bezirksgericht Unterrheintal, Switzerland, 16 September 1998].
141
142
Tribunal commercial de Bruxelles, Belgium, 5 October 1994, Unilex.
143
CLOUT case No. 256 [Tribunal Cantonal du Valais, Switzerland, 29 June 1998].
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (see full text of the decision); CLOUT case No.  378
[Tribunale di Vigevano, Italy, 12 July 2000].
144
145
CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997]; Landgericht Berlin, Germany, 16 September
1992, Unilex.
146
Hof Arnhem, the Netherlands, 17 June 1997, Unilex; Rechtbank van Koophandel Kortrijk, Belgium, 27 June 1997, Unilex; CLOUT
case No. 167 [Oberlandesgericht München, Germany, 8  February 1995].
147
CLOUT case No. 292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993].
Rechtbank van Koophandel Kortrijk, Belgium, 16 December 1996, Unilex; CLOUT case No. 81 [Oberlandesgericht Düsseldorf,
Germany, 10 February 1994].
148
149
CLOUT case No. 423 [Oberster Gerichtshof, Austria, 27 August 1999], also in Unilex.
150
CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003].
151
Amtsgericht Kehl, Germany, 6 October 1995, Unilex.
152
Landgericht Mönchengladbach, Germany, 22 May 1992, Unilex.
CLOUT case No. 359 [Oberlandesgericht Koblenz, Germany, 18 November 1999]; CLOUT case No. 310 [Oberlandesgericht
Düsseldorf, Germany, 12 March 1993].
153
154
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997].
155
Tribunale Civile di Cuneo, Italy, 31 January 1996, Unilex.
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998]; Landgericht Köln, Germany, 11 November 1993,
Unilex, reversed on grounds that CISG was inapplicable by CLOUT case No. 122 [Oberlandesgericht Köln, Germany, 26 August
1994].
156
157
Amtsgericht Riedlingen, Germany, 21 October 1994, Unilex; Landgericht Berlin, Germany, 16  September, 1992, Unilex.
158
Landgericht Landshut, Germany, 5 April 1995, Unilex.
159
CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989].
160
CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (see full text of the decision).
161
CLOUT case No. 290 [Oberlandesgericht Saarbrücken, Germany, 3 June 1998].
Pretura di Torino, Italy 30 January 1997, Unilex, also available on the INTERNET at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/970130i3.html.
162
Part three. Sale of goods
163
Hoge Raad, the Netherlands, 20 February 1998, Unilex.
164
Landgericht Berlin, Germany, 16 September, 1992, Unilex.
165
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of the decision).
135
CLOUT case No 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
5  December 1995] (see full text of the decision).
166
167
CLOUT case No. 486 [Audiencia Provincial de La Coruña, Spain, 21 June 2002] (involving special circumstances requiring that
notice be given as soon as was practicable).
168
ICC Arbitration Case No. 8247, 1996, Unilex.
CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998]; CLOUT case No. 196 [Handelsgericht des Kantons Zürich,
Switzerland, 26 April 1995] (see full text of the decision).
169
170
Arrondissementsrechtsbank ’s-Hertogenbosch, the Netherlands, 15 December 1997, Unilex.
171
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997].
CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993]. Several other decisions have found that the buyer’s
notice was untimely, although the precise time of the buyer’s notice is not clear. In this respect see CLOUT case No. 210 [Audienca
Provincial Barcelona, Spain, 20 June 1997]; CLOUT case No. 339 [Landgericht Regensburg, Germany, 24  September 1998]; CLOUT
case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland, 27 April 1992]; Rechtbank Zwolle, the Netherlands, 5 March
1997, Unilex.
172
173
CLOUT case No. 229 [Bundesgerichtshof, Germany, 4 December 1996] (see full text of the decision).
174
CLOUT case No. 46 [Landgericht Aachen, Germany, 3 April 1990] (see full text of the decision).
175
Landgericht Bielefeld, Germany, 18 January 1991, Unilex.
Helsinki Court of First Instance, Finland, 11 June 1995, and Helsinki Court of Appeals, Finland, 30 June 1998, available on the
Internet at http://www.utu.fi/oik/tdk/xcisg/tap5.html#engl.
176
177
CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994], also Unilex (noting that buyer examined goods at the
beginning of July and gave notice on or before July 8, which the court held was timely, particularly in light of fact that July 4 and 5
were weekend days).
178
CLOUT case No. 45 [Arbitration—International Chamber of Commerce No. 5713 1989] (see full text of the decision).
179
CLOUT case No. 593 [Oberlandesgericht Karlsruhe, Germany, 6 March 2003].
CLOUT case No. 225 [Cour d’appel, Versailles, France, 29 January 1998] (see full text of the decision); see also Tribunale di Busto
Arsizio, Italy, 13 December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available
on Unilex (notice made immediately after installation of machinery reasonable, followed by subsequent notices regarding further
discoveries made by the buyer).
180
181
Landgericht Frankfurt, Germany, 9 December 1992, Unilex.
182
CLOUT case No. 315 [Cour de Cassation, France, 26 May 1999] (see full text of the decision).
183
CLOUT case No. 319 [Bundesgerichtshof, Germany, 3 November 1999].
CLOUT case No. 202 [Cour d’appel, Grenoble, France, 13 September 1995]. Several other decisions have found that the buyer’s
notice was timely, although the precise period found reasonable by the court is not clear; see CLOUT case No. 98 [Rechtbank Roermond,
the  Netherlands 19 December 1991]; Landgericht Paderborn, Germany, 25 June 1996, Unilex.
184
185
The buyer’s obligation to give notice under article 39 (2) is also subject to article 40, which prevents the seller from invoking article  39 “if the lack of conformity relates to facts of which he knew or could not have been unaware and which he did not disclose to
the buyer”.
186
See Landgericht Marburg, Germany, 12 December 1995, Unilex, where the court invoked article  39 (2) to deny the buyer any remedy
for a claimed lack of conformity.
187
CLOUT case No. 344 [Landgericht Erfurt, Germany, 29 July 1998]; Landgericht Marburg, Germany, 12 December 1995, Unilex.
Both of these cases held that, because the notice given by the buyer was not specific enough to satisfy article 39 (1), the two-year period
in article 39 (2) had elapsed before proper notice was given. Neither court, apparently, considered the possibility that the buyer’s notice
might have been sufficient to satisfy article 39 (2) even though it did not comply with the specificity requirement in article 39 (1).
188
CLOUT case No. 249 [Cour de Justice, Genève, Switzerland, 10 October 1997].
CLOUT case No. 202 [Cour d’appel, Grenoble, France, 13 September 1995] (see full text of the decision); CLOUT case No. 302
[Arbitration—International Chamber of Commerce No. 7660 1994]; CLOUT case No. 300 [ArbitrationInternational Chamber of Commerce No. 7565 1994].
189
190
CLOUT case No. 302 [Arbitration—International Chamber of Commerce No. 7660 1994].
191
CLOUT case No. 300 [Arbitration—International Chamber of Commerce No. 7565 1994].
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
192
193
CLOUT case No. 300 [Arbitration—International Chamber of Commerce No. 7565 1994].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 40
The seller is not entitled to rely on the provisions of articles 38 and 39 if the lack
of conformity relates to facts of which he knew or could not have been unaware
and which he did not disclose to the buyer.
Overview
1. Article 40 relieves the buyer from the consequences of
failing to meet the requirements of articles 38 (which
governs the buyer’s obligation to examine delivered goods)
and 39 (which regulates the buyer’s obligation to notify the
seller of lack of conformity in delivered goods). The relief
provided by article 40 is available only if the buyer’s failure
to meet its examination and/or notice obligations relates to
a lack of conformity that is known to the seller, or of which
the seller “could not have been unaware.”
Article 40 in general
2. In an arbitral award that discusses article 40 at length
the panel asserts that the provision expresses a principle of
fair trading found in the domestic laws of many countries,
and underlying many other provisions of the CISG; that
article 40 constitutes “a safety valve” for preserving the
buyer’s remedies for non-conformity in cases where the
seller has himself forfeited the right of protection, granted
by provisions on the buyer’s timely examination and notice,
against claims for such remedies; that the application of
article 40 “results in a dramatic weakening of the position
of the seller, who loses his absolute defences based on
often relatively short-term time limits for the buyer’s examination and notice of non-conformity, and instead is faced
with the risk of claims only precluded by . . . general
prescription rules . . .”; and that article 40 should be
restricted to “special circumstances” so that the protections
offered by time limits for claims do not become “illusory.”1
A dissenting opinion from the same arbitration would limit
the application of article 40 even further to “exceptional
circumstances”.2 It has also been held that article 40 must
be applied independently to each separate lack of conformity claimed by the buyer. Thus a seller can be precluded
by article 40 from relying on articles 38 and 39 with respect
to one non-conformity, but permitted to raise defences
based on articles 38 and 39 with respect to a different
non-conformity.3
Scope and effect of article 40
3. According to several court decisions, when its requirements are satisfied, article 40 prevents a seller from relying
on a buyer’s non-compliance with article 38 and/or article  39;4 in other cases, a buyer’s invocation of article 40
has failed.5 It has also been found that article 40 applies
to contractual examination and notice provisions agreed to
in derogation of articles 38 and 39—i.e., it excuses a buyer
who has failed to comply with a contract clause governing
examination of goods or a contractual provision requiring
notice of non-conformity.6 Alternatively, it has been posited
that, even if article 40 were not directly applicable to such
contractual examination and notice provisions, the principle
of article 40 would apply indirectly under CISG article  7  (2)
to fill this gap in the Convention.7 A court has also concluded that the general principle embodied in article 40
prevents a seller who knowingly and fraudulently misrepresented the mileage and age of a used car from escaping
liability under article 35 (3), a provisions that shields a
seller from liability for a lack of conformity of which the
buyer knew or could not have been unaware at the time of
the conclusion of the contract.8
Requirement that the seller knew or
could not have been unaware of facts
related to a lack of conformity:
in general
4. Article 40 applies with respect to a lack of conformity
that relates to “facts of which [the seller] knew or could
not have been unaware.” The nature of the requirement of
seller awareness has been examined in several decisions. It
was discussed at length in an arbitration decision in which
a majority of the arbitrators indicated that the level of seller
awareness required by the provision was not clear, although
in order to prevent the protections of article 39 from
becoming illusory article 40 required something more than
a general awareness that goods manufactured by a seller
“are not of the best quality or leave something to be
desired.”9 The decision states that there is a “general consensus that fraud and similar cases of bad faith” will meet
the requirements of article 40, and that the requisite awareness exists if the facts giving rise to the lack of conformity
“are easily apparent or detected.”10 With respect to situations in which the seller does not have actual knowledge
of a lack of conformity, the arbitration decision indicates
that there is a split between those who assert that the
requirements of article 40 are met if the seller’s ignorance
is due to “gross or even ordinary negligence”, and those
who would require something more, approaching “deliberate negligence”.11 Similarly, according to the tribunal, there
is a split between those who argue that a seller is under
no obligation to investigate for possible non-conformities,
and those who assert that the seller must not “ignore clues”
and may have a duty to examine the goods for lack of
Part three. Sale of goods
conformity “in certain cases”.12 A majority of the tribunal
concluded that the level of seller awareness of nonconformities that is required to trigger Article 40 is “conscious disregard of facts that meet the eyes and are of
evident relevance to the non-conformity”. A dissenting
arbitrator agreed with the standard, although he believed
that it required a higher degree of “subjective blameworthiness” on the seller’s part than had been proven in the case.13
One court has indicated that the requirements of Article 40
are satisfied if the seller’s ignorance of a lack of conformity
is due to gross negligence.14 Another decision asserts that
article 40 requires that the seller have notice not only of
the facts giving rise to the lack of conformity, but also that
those facts would render the goods non-conforming.15
Requirement that the seller knew or
could not have been unaware of facts
related to a lack of conformity:
burden of proof
5. Several decisions have indicated that the buyer bears
the burden of proving that the seller knew or could not
have been unaware of a lack of conformity.16 Some decisions have noted, however, that the “could not have been
unaware” language of article 40 reduces the evidentiary
burden associated with proving the seller’s actual knowledge of a lack of conformity.17 An arbitral tribunal has
asserted that the result of this language is a shifting burden of proof: “If the evidence [adduced by the buyer] and
the undisputed facts show that it is more likely than not
that the seller is conscious of the facts that relate to the
non-conformity, it must be up to the seller to show that
he did not reach the requisite state of awareness”.18
According to another decision, the buyer must prove that
the seller had notice not only of the facts underlying a
lack of conformity, but also that those facts rendered the
goods non-conforming.19
Requirement that the seller knew or
could not have been unaware of facts
related to a lack of conformity:
application (evidence)
6. Although producing sufficient evidence that the seller
knew or had reason to know of a lack of conformity can
be a difficult task, buyers in several cases have successfully
borne the burden. Where the seller admitted that it was
aware of a defect, obviously, a court found that the requirement of article 40 was satisfied.20 Even without such an
admission, a buyer succeeded in establishing the awareness
element where the seller, while manufacturing a complex
piece of industrial machinery (a rail press), had replaced a
critical safety component (a lock plate) with a part that the
seller had not previously used for such an application: the
fact that the seller drilled several unused trial holes for
positioning the substitute lock plate on the rail press evidenced both that it was aware that it was improvising by
using a part that did not fit properly, and that it realized
proper positioning of the substitute plate was critical, yet
the seller never tried to ascertain that the buyer properly
installed the plate; as a result, the majority concluded, the
seller had “consciously disregarded apparent facts which
137
were of evident relevance to the non-conformity”, and article 40 excused the buyer’s failure to give timely notice of
the defect.21 The tribunal also indicated that the article 40
“knew or could not have been unaware” requirement would
be satisfied where the non-conformity in identical or similar
goods had previously resulted in accidents that had been
reported to the seller or to the “relevant branch” of the
seller’s industry.22 In another decision, a court found that
the seller “could not have been unaware” that wine it sold
had been diluted with water, because the non-conformity
resulted from an intentional act.23 Another court found that,
because of the nature of the non-conformity (some of the
jackets that seller had shipped were not the models that the
buyer had ordered), the seller necessarily knew of the lack
of conformity.24 In another decision, the court continued
the proceedings in order to permit the buyer to prove that
the seller knew or could not have been unaware that the
cheese it sold was infested with maggots: the court stated
that the buyer would carry its burden by proving that the
maggots were present when the cheese was frozen before
shipment.25
7. In several other decisions, however, the court concluded that the article 40 requirement concerning seller’s
awareness of a lack of conformity had not been met. This
was the case where the buyer simply failed to produce
evidence that the seller was or should have been aware
of the lack of conformity.26 Where the seller sold a standard product suitable for use in modern equipment, but the
product failed when processed by the buyer in unusuallyold machinery, the court found that the buyer had not
shown that the seller knew or could not have been unaware of the problem because the buyer had not informed
the seller that it planned to employ obsolete processing
equipment.27 In another decision, the court relied on the
fact that the buyer had re-sold the goods to its own customers in order to conclude that the defects complained
of were not obvious; the buyer, therefore, had failed to
show that the seller could not have been unaware of the
lack of conformity.28 Another court found that, although
some of the picture frame mouldings supplied by the
seller were non-conforming, it was not clear whether the
number exceeded the normal range of defective mouldings
tolerated in the trade, and there was insufficient evidence
to conclude that the seller was aware, or should have been
aware, of the defects.29 Another decision by an arbitral
tribunal rejected a buyer’s argument that the nature and
volume of the defects in the goods and the seller’s procedure for inspecting its production established that the
article 40 prerequisites relating to the seller’s awareness
of a lack of conformity were satisfied.30
Requirement that the seller knew or
could not have been unaware of facts
related to a lack of conformity:
time as of which seller’s awareness
is determined
8. Article 40 does not specify the time as of which it
should be determined whether the seller knew or could not
have been unaware of a lack of conformity. One decision
has indicated that this determination should be made as of
the time of delivery.31
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Seller’s disclosure of
lack of conformity
9. Article 40 states that the relief it provides a buyer that
has failed to comply with its obligations under articles 38
and/or 39 does not apply if the seller disclosed the lack of
conformity to the buyer. The seller’s obligation under article 40 to disclose known non-conformities on pain of losing
its protections under articles 38 and 39 has been discussed
in only a small number of decisions,32 and has actually
been applied in even fewer. In one arbitral proceeding, the
majority opinion asserted that, “to disclose in the sense of
Article 40 is to inform the buyer of the risks resulting from
the non-conformity”.33 Thus where the seller, when manufacturing a complex industrial machine, had replaced a
critical safety component (a lock plate) with a different part
that required careful installation to function properly, the
tribunal found that the seller had not adequately disclosed
the lack of conformity for purposes of article 40 where the
disclosure to the buyer was limited to a difference in the
part numbers appearing on the substitute lock plate and in
the service manual: “even if [seller] had informed [buyer]
of the exchange as such (and without any further information on proper installation or the risks involved in the
arrangement, etc.) this would not be enough . . .”.34 It has
also been held that the fact the goods were loaded for
shipment in the presence of representatives of the buyer
was not adequate disclosure for purposes of article 40
where the goods’ lack of conformity was not readily apparent to observers.35 In another arbitration proceeding, however, the tribunal held that the seller had sufficiently
disclosed a lack of conformity, thus preventing the buyer
from invoking article 40, although the particular facts that
supported this conclusion are unclear.36 Another decision
suggested that, although the buyer bears the burden of proving that the seller “knew or could not have been unaware”
of a lack of conformity within the meaning of article 40,
it is the seller who bears the burden of proving adequate
disclosure to the buyer.37
Derogation and waiver
10. Nothing in the CISG expressly excepts article 40 from
the power of the parties, under article 6, to “derogate from
or vary the effect of any of [the Convention’s] provisions”.
An arbitration panel, however, has concluded that, because
article 40 expresses fundamental “principles of fair dealing” found in the domestic laws of many countries and
underlying many provisions of the CISG itself, a derogation from article 40 should not be implied from a contractual warranty clause that derogates from articles 35,
38 and 3938—even though the provisions expressly derogated from are closely associated and generally work in
tandem with article 40. Indeed, the majority opinion suggests that, despite article 6, “even if an explicit derogation
was made—a result of drafting efforts and discussions
that stretch the imagination—it is highly questionable
whether such derogation would be valid or enforceable
under various domestic laws or any general principles for
international trade”.39 On the other hand, a buyer was
found to have waived its right to invoke article 40 when
the buyer negotiated with the seller a price reduction
based on certain defects in the goods, but did not at that
time seek a reduction for other defects of which it then
had knowledge.40
Article 40 as embodying general
principles underlying the CISG
11. Under article 7 (2) of the CISG, questions within the
scope of the Convention that are not expressly settled in it
are to be resolved “in conformity with the general principles on which [the Convention] is based . . .”.41 Several
decisions have identified article 40 as embodying a general
principle of the Convention applicable to resolve unsettled
issues under the CISG. According to an arbitration panel,
“Article 40 is an expression of the principles of fair trading
that underlie also many other provisions of CISG, and it
is by its very nature a codification of a general principle”.42
Thus, the decision asserted, even if article 40 did not
directly apply to a lack of conformity under a contractual
warranty clause, the general principle underlying article 40
would be indirectly applicable to the situation by way of
article 7 (2). In another decision, a court derived from article 40 a general CISG principle that even a very negligent
buyer deserves more protection than a fraudulent seller, and
then applied the principle to conclude that a seller could
not escape liability under article 35 (3)43 for misrepresenting the age and mileage of a car even if the buyer could
not have been unaware of the lack of conformity.44
Notes
1
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of the
decision).
2
Id.
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (buyer’s late notice of non-conformity
prevented it from asserting that the colour and weight of jackets that the seller had delivered did not conform to the contract; the seller,
however, was aware that some jackets were a different model than specified in the contract, and article 40 precluded seller from relying
on late notice with regard to this lack of conformity) (see full text of the decision); Landgericht Landshut, Germany, 5 April 1995,
Unilex (seller admitted pre-delivery knowledge that the goods (clothes) suffered a shrinkage problem, so that art. 40 prevented seller
from relying on arts. 38 and 39 as a defence to buyer’s claim for this lack of conformity; but buyer failed to prove that seller was aware
or could not have been unaware that some items were missing from delivery boxes, and seller could use late notice as a defence as to
this non-conformity).
3
4
In the following cases, the tribunal found that article 40 precluded the seller from relying on articles 38 and/or 39: CLOUT case No.  45
[Arbitration—International Chamber of Commerce No. 5713 1989]; CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm
Part three. Sale of goods
139
Chamber of Commerce, 5 June 1998]; CLOUT case No. 170 [Landgericht Trier, Germany, 12  October 1995]; Landgericht Landshut, Germany,
5 April 1995, Unilex. In the following cases, the tribunal found that further proceedings were required to determine whether article 40 prevented
the seller from relying on articles 38 and 39: CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991].
5
In the following cases, the tribunal found that the requirements to apply article 40 had not been established: CLOUT case No. 285
[Oberlandesgericht Koblenz, Germany, 11 September 1998]; CLOUT case No. 341 [Ontario Superior Court of Justice, Canada, 31 August
1999]; CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998]; Landgericht Landshut, Germany, 5 April 1995,
Unilex (re some but not all non-conformities); CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the
decision); Arbitration Case  56/1995 of the Bulgarska turgosko-promishlena palata, Bulgaria, 24 April 1996, Unilex; CLOUT case No.  230
[Oberlandesgericht Karlsruhe, Germany, 25 June 1997]; CLOUT case No.  270 [Bundesgerichtshof, Germany, 25 November 1998].
6
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998].
7
Id.
8
CLOUT case No. 168 [Oberlandesgericht Köln, Germany 21 March 1996].
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of the
decision).
9
10
For another decision suggesting that article 40 applies in cases where the seller has acted in bad faith with respect to an undisclosed
lack of conformity, and in which the obviousness of a lack of conformity rebutted any argument that the seller was unaware of it, see
CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (see full text of the decision)
11
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision). See CLOUT case No. 597 [Oberlandesgericht Celle, Germany, 10  March 2004] (stating that the phrase “could not have
been unaware” requires, at a minimum, “gross negligence” by the seller in failing in failing to discover a lack of conformity).
12
Id. See also CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (seller argued that he was unaware
of the lack of conformity because he was under the mistaken impression that goods of the type delivered would conform to the contract;
court held that the argument would not prevent application of article 40 because the seller was not permitted to “ignore clues” that the
buyer valued the particular type of goods specified in the contract) (see full text of the decision).
13
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (dissenting opinion)
(see full text of the decision).
14
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998] (see full text of the decision).
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997]; CLOUT case No.  270 [Bundesgerichtshof Germany
25 November 1998].
15
16
CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991]; CLOUT case No.  237 [Arbitration—Arbitration
Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of the decision). Other decisions have implied that the
buyer bore the burden of proving that seller was on notice of a lack of conformity within the meaning of article 40: CLOUT case
No.  378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe,
Germany, 25 June 1997]; Landgericht Landshut, Germany, 5 April 1995, Unilex. The last case distinguishes between the burden of
proving that the seller knew or could not have been unaware of a lack of conformity (which the buyer bears) and the burden of proving
that the seller disclosed the lack of conformity to the buyer (which the court suggests the seller bears).
17
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision); CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full text of the decision).
18
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
19
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997].
20
Landgericht Landshut, Germany, 5 April 1995, Unilex.
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
21
22
Id.
23
CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (see full text of the decision).
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision). See also
CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (seller could not have been unaware that the goods
delivered were from a different manufacturer than that specified in the contract because the difference was manifest).
24
25
CLOUT case No. 98 [Rechtbank Roermond, the Netherlands, 19 December 1991]. In an arbitral award, the tribunal found that article  40 excused the buyer from failing to perform its obligations under articles 38 and 39 because the seller knew or could not have been
unaware of the lack of conformity. The decision, however, does not specify the facts that supported this conclusion, indicating only very
generally that “it clearly transpires from the file and the evidence that the Seller knew and could not be unaware” of the lack of conformity. See CLOUT case No. 45 [Arbitration—International Chamber of Commerce No. 5713 1989].
26
Landgericht Landshut, Germany, 5 April 1995, Unilex.
27
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (see full text of the decision).
28
CLOUT case No. 232 [Oberlandesgericht München, Germany, 11 March 1998].
CLOUT case No. 341 [Ontario Superior Court of Justice, Canada, 31 August 1999] (see full text of the decision). This situation
may illustrate a seller’s “general awareness” of defects that, as mentioned in para. 4 supra, an arbitration tribunal has indicated is insufficient to satisfy the requirements of Article 40; see CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber
of Commerce, 5 June 1998] (see full text of the decision).
29
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30
CLOUT case No. 474 [Tribunal of International Court of Commercial Arbitration of the Chamber of Commerce and Industry,
Russian Federation, Russian Federation, award in case No. 54/1999 of 24 January 2000], also in Unilex.
31
Landgericht Landshut, Germany, 5 April 1995, Unilex.
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (recognizing a seller’s duty to warn of known
non-conformities under art. 40, but finding no such duty in the case because the goods were in fact conforming); CLOUT case No. 237
[Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of the decision); Arbitration
Case 56/1995 of the Bulgarian Chamber of Commerce and Industry, 24 April 1996, Unilex. See also Landgericht Landshut, Germany,
5 April 1995, Unilex, which indicates that the seller bears the burden of proving adequate disclosure.
32
33
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
34
Id. (see full text of the decision).
35
CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (see full text of the decision).
36
Arbitration Case 56/1995 of the Bulgarian Chamber of Commerce and Industry, 24 April 1996, Unilex.
37
Landgericht Landshut, Germany, 5 April 1995, Unilex.
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce 5 June 1998] (see full text of the
decision).
38
39
Id. (see full text of the decision). Note that, under CISG article 4 (a), questions concerning the “validity” of a contract or its provisions are beyond the scope of the Convention, and thus are governed by other law as determined by the rules of private international
law.
40
CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000]. Contrast CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004], where the court found that the parties’ agreement as to the final payment due under the contract
was not intended to civer a lack of conformity of which the buyer was unaware and which met the requirements of article 40, and thus
buyer had not by such agreement waived its right to invoke article 40 (see full text of the decision).
41
In the absence of general CISG principles that would settle an unresolved issue, article 7 (2) directs that the question be settled “in
conformity with the law applicable by virtue of the rules of private international law”.
42
CLOUT case No. 237 [Arbitration—Arbitration Institute of the Stockholm Chamber of Commerce, 5 June 1998] (see full text of
the decision).
43
Article 35 (3) provides that a seller is not liable for a lack of conformity under article 35 (2) “if at the time of the conclusion of
the contract the buyer knew or could not have been unaware of such lack of conformity”.
44
CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996].
Part three. Sale of goods
141
Article 41
The seller must deliver goods which are free from any right or claim of a third
party, unless the buyer agreed to take the goods subject to that right or claim.
However, if such right or claim is based on industrial property or other intellectual
property, the seller’s obligation is governed by article 42.
Overview
1. Article 41 governs the seller’s duty to ensure that the
goods it delivers are not subject to rights or claims by a
third party. Freedom from such rights or claims permits the
buyer to enjoy undisturbed possession and ownership of
the goods. Under article 4 (b) of the Convention, questions
concerning “the effect which the contract may have on the
property in the goods sold” are beyond the scope of the
CISG. Article 41, however, makes it clear that the seller’s
obligation to give the buyer clear property rights in the
goods—so that the buyer is free from third party rights or
claims—is a matter governed by the Convention: the seller
will be in breach of its duties under the Convention if it
does not meet the requirements imposed by article 41. The
basic statement of the seller’s obligation is found in the
first sentence of article 41: the seller must deliver goods
that “are free from any right or claim of a third party . . .”.
An exception to this obligation arises, however, if the buyer
“agreed to take the goods subject to that right or claim”.
The second sentence of article 41 mandates a distinction
between third party rights or claims based on “industrial
or other intellectual property” and other rights or claims of
third parties. Only the latter are within the scope of article 41, whereas the former are governed by article 42 of
the Convention.
Application of article 41
2. There have been relatively few decisions applying article 41; they have tended to focus on what constitutes a
breach of the seller’s obligations under the provision. In
one, the court stated that a seller would violate article 41
if it delivered goods subject to a restriction, imposed by
the seller’s own supplier, on the countries in which the
buyer could resell the goods, unless the buyer had previously consented to the restriction.1 In another, an arbitration
panel indicated that article 41 required a seller to arrange
for its wholly-owned subsidiary, which had obtained a court
order putting under arrest the vessel in which the goods
were loaded, to avoid or lift the effects of the order.2
Notes
1
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision).
2
ICC Arbitration Case No. 8204 of 1995, Unilex.
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Article 42
(1) The seller must deliver goods which are free from any right or claim of a
third party based on industrial property or other intellectual property, of which at the
time of the conclusion of the contract the seller knew or could not have been unaware,
provided that the right or claim is based on industrial property or other intellectual
property:
(a) Under the law of the State where the goods will be resold or otherwise used,
if it was contemplated by the parties at the time of the conclusion of the contract that
the goods would be resold or otherwise used in that State; or
(b) In any other case, under the law of the State where the buyer has his place
of business.
(2) The obligation of the seller under the preceding paragraph does not extend to
cases where:
(a) At the time of the conclusion of the contract the buyer knew or could not
have been unaware of the right or claim; or
(b) The right or claim results from the seller’s compliance with technical drawings,
designs, formulae or other such specifications furnished by the buyer.
Overview
Application of article 42
1. Article 42 states the seller’s duty to deliver goods
that are free from intellectual property rights or claims
of third parties. A seller is in breach if it delivers goods
in violation of article 42, but the seller’s obligation to
deliver goods free of third party rights or claims based
on intellectual property is subject to three significant
limitations. First, the seller is only liable under article  42 if the third party’s right or claim is one “of
which at the time of the conclusion of the contract the
seller knew or could not have been unaware”.1 Second,
the seller is only liable if the third party’s right or claim
is based on the law of the State designated by articles  42  (1)  (a) or (b), whichever alternative is applicable. The third limitation on the seller’s obligations
under article 42 is stated in article 42 (2), and appears
to be based on assumption of risk principles: the seller
is not liable if the third party’s right or claim is one
of which the buyer “knew or could not have been unaware” 2 when the contract was concluded, or if the right
or claim arose from the seller’s compliance with technical specifications (“technical drawings, designs, formulae or other such specifications”) that the buyer itself
supplied to the seller.
2. Few decisions have applied Article 42. In one case, both
the lower court and the appeals court emphasized that the
buyer bears the burden of proving that, at the time the contract was concluded, the seller knew or could not have been
unaware of the third party intellectual property right or claim
that the buyer alleges produced a violation of article 42.3
Another decision involved a transaction governed by the
1964 Hague Convention on the Uniform Law for International Sales (“ULIS”), but the court invoked CISG article  42  (2) in deciding the case: the seller had delivered goods
with a symbol that infringed a third party’s well-known
trademark, but the court found that the seller was not liable
to the buyer because the buyer could not have been unaware
of the infringement, and the buyer had itself specified attachment of the symbol in the designs that the buyer supplied
the seller.4 Similarly, a court found that a buyer, as a professional in the field, could not have been unaware that shoelaces used on the footware seller delivered violated a third
party’s trademark, and the buyer had in fact acted “with
complete knowledge” of those trademark rights; the court
therefore held that, under article 42 (2) (a) the buyer could
not recover from the seller the payments buyer had made to
compensate the holder of the trademark.5
Notes
1
The phrase “knew or could not have been unaware” as a standard for a party’s responsibility for awareness of facts is also used in
articles 8 (1), 35 (3), 40 and 42 (2) (a).
2
The phrase “knew or could not have been unaware” as was noted above, is also used in article  42  (1), and it appears in articles 8  (1),
35 (3), and 40.
Part three. Sale of goods
143
3
Hof Arnhem, the Netherlands, 21 May 1996, Unilex; Rechtbank Zwolle, the Netherlands, 1  March 1995 (final decision) and 16 March
1994 (interim decision), Unilex.
4
Supreme Court of Israel, 22 August 1993, Unilex.
5
CLOUT case No. 479 [Cour de Cassation, France 19 March 2002] (see full text of the decision).
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Article 43
(1) The buyer loses the right to rely on the provisions of article  41 or article 42
if he does not give notice to the seller specifying the nature of the right or claim of the
third party within a reasonable time after he has become aware or ought to have become
aware of the right or claim.
(2) The seller is not entitled to rely on the provisions of the preceding paragraph
if he knew of the right or claim of the third party and the nature of it.
Overview
Application of article 43
1. Article 43 (1) imposes on the buyer a notice requirement
with respect to claims that the seller breached articles 41 or 42.
In certain circumstances, Article 43 (2) provides for a defence
if a buyer has failed to give the notice required by article 43 (1).
The provisions of article 43 parallel in many ways the notice
requirement and defence thereto that articles 39 and 40 establish
with respect to breaches of article 35.
2. At the time this is written there is little of note in the
available case law concerning the proper construction of
article 43. Presumably those called upon to interpret article  43 (1) or 43 (2) may look for guidance from the numerous decisions that apply the parallel provisions of article  39
and 40, although the differences between those provisions
and article 43 should certainly be kept in mind.
Part three. Sale of goods
145
Article 44
Notwithstanding the provisions of paragraph (1) of article 39 and paragraph (1) of article  43, the buyer may reduce the price in accordance with article 50 or claim damages,
except for loss of profit, if he has a reasonable excuse for his failure to give the required
notice.
Overview
1. When it applies, Article 44 softens—although it does
not eliminate—the consequences suffered by a buyer that
has failed to give the notice called for by either article  39  (1)
(which requires notice of lack of conformity in delivered
goods) or article 43 (1) (which requires notice of third party
claims relating to the goods).1 Normally, a buyer that does
not comply with these notice provisions loses its remedies
against the seller for the alleged lack of conformity or third
party claim. Under article 44, however, if a buyer has “a
reasonable excuse” for its failure to give proper notice
under articles 39 (1) or 43 (1), some of the buyer’s remedies are restored: “the buyer may reduce the price in
accordance with article 50 or claim damages, except for
loss of profit . . .”. However other remedies that the buyer
would have if it had satisfied the notice requirements are
not restored, such as remedies associated with avoidance
of contract. Thus in one decision in which the buyer had
a “reasonable excuse”, as per article 44, for its failure to
give proper notice under article 39 (1), an arbitral panel
permitted the buyer to recover damages for a lack of conformity, although pursuant to article 44 the tribunal denied
any damages for loss of profit.2 In another arbitration ruling, a buyer that had failed to notify the seller of a lack
of conformity within the time permitted by the contract
was permitted to reduce the price as per article 50, although
the panel noted that the buyer would be denied remedies
premised on avoidance of the contract.3
Scope of article 44
2. The relief granted by article 44 is restricted to failure
to comply with the notice requirements of articles 39  (1)
or 43  (1). Article 44 does not by its terms grant a buyer
relief from the two-year cut-off of notice of lack of conformity imposed by article 39  (2). A buyer that has failed
to meet the notice deadline imposed by article  39  (2) cannot
apply article 44 to escape the consequences, even if the
buyer has a “reasonable excuse” for the failure. In addition
a court has found that, because article 44 does not refer to
the buyer’s obligation to examine goods under article 38,
a buyer cannot invoke article 44 if the reason it failed to
comply with the notice requirements of article 39  (1) is
because it did not examine the goods in a timely fashion,
even if the buyer has a reasonable excuse for the tardy
examination.4 On appeal, however, this decision was
reversed on other grounds,5 and at least two other decisions
appear to contradict it: they applied article 44 where a
buyer gave untimely notice because it delayed its examination of the goods but had a reasonable excuse for the delay.6
Apparently taking an expansive view of the scope of article  44, one of the latter decisions applied the provision to
a buyer that failed to meet a deadline for notice of a lack
of conformity that was imposed not by article  39  (1), but
by a contractual provision.7
“Reasonable excuse” requirement:
in general
3. Article 44 applies if the buyer “has a reasonable
excuse” for failing to give the notice required by either
article 39  (1) or article 43  (1). These notice provisions
incorporate flexible standards in order to accommodate differing circumstances in the wide variety of transactions to
which the CISG applies. Article 44 comes into play only
if the flexible notice standards of articles  39  (1) and 43  (1)
are not satisfied. Therefore, the “reasonable excuse” standard must take an even more particularized and “subjective”
approach to the buyer’s circumstances, and several decisions appear to have adopted this view.8 Thus although one
decision indicated that a reasonable excuse under article 44
requires that the buyer have acted “with the care and diligence required under the circumstances”, the court stressed
that this should be assessed by reference to the buyer’s
“concrete possibilities”.9 Another decision emphasized the
particular situation of the buyer by asserting that an individual engaged in business (an independent trader, artisan
or professional) is more likely to have a reasonable excuse
for failing to give required notice than is a business entity
engaged in a fast-paced business requiring quick decisions
and prompt actions.10 Yet another decision implied that the
small size of the buyer’s operation, which did not permit
it to spare an employee full time to examine the goods,
might form the basis for a reasonable excuse for delayed
notice, although the court found that the buyer’s claimed
excuse was not in fact the cause of its failure to begin
examining the goods until more than three months after it
should have.11
“Reasonable excuse” requirement:
burden of proof
4. It has been expressly asserted that the buyer bears
the burden of proving the applicability of article 44—in
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particular, the burden of proving the existence of a “reasonable excuse” for the buyer’s failure to comply with the
notice requirements of articles 39  (1) or 43  (1).12 Several
other decisions appear to have implied the same rule when
they held that a lack of sufficient evidence of a reasonable
excuse meant that the buyer’s article 44 argument should
be rejected.13
“Reasonable excuse” requirement:
application
5. Article 44 has been invoked in a number of decisions,
but seldom successfully: in a substantial majority of decisions, the deciding tribunal found that the “reasonable
excuse” requirement was not satisfied.14 In one case, for
example, a buyer argued that it had a reasonable excuse
for failing to give timely notice of a non-conformity because
the goods had been held up in customs when they arrived
in the buyer’s country, and the installation of processing
machinery needed for a trial run of the goods had been
delayed. The court, however, ruled that the buyer had failed
to show that it could not have gotten access to the goods
in order to examine them when they first arrived in the port
of destination; furthermore, the buyer had failed to show
that the delay in the installation of the processing machinery was not due to its own neglect.15 In another case the
buyer argued that the seller had delivered fish of a different
type than the buyer had ordered. The buyer also argued
that the fish had other non-conformities, and that its reasonable excuse for not giving timely notice of the additional
non-conformities was that it considered the contract avoided
because seller had delivered the wrong type of fish. The
court, however, found that the buyer had acquiesced in the
seller’s written description of the fish that were delivered;
thus the buyer could not object to the type of fish supplied,
and its excuse for failing to give notice of the other nonconformities was also not valid under article 44.16 Another
decision asserted that, because the buyer’s business was in
general fast-paced, requiring quick decisions and prompt
action, the buyer did not have a reasonable excuse for failing to give timely notice of a lack of conformity.17 Another
court found that a buyer who did not examine furs until
they had been processed by a third party, and who as a
result failed to give timely notice of a lack of conformity
in the furs, did not have a reasonable excuse for its late
notice because an expert could have examined a sample of
the goods when they were delivered, and there existed
means of communication between the parties that were
adequate to convey prompt notice.18 It has also been held
that the buyer’s decision to store goods for several years
before they were installed, which delayed discovery of
the lack of conformity, was not a “reasonable excuse”
under article 44 because the buyer had not brought these
circumstances forward during contract negotiations, and
thus they did not become part of the basis of the parties’
legal relationship.19 And it has been held that giving
notice of one non-conformity did not give a buyer a
reasonable excuse for failing to notify the seller of other
non-conformities.20
6. In at least two arbitration cases, however, a buyer successfully pleaded a reasonable excuse for failing to satisfy
the article 39  (1) notice requirement, and as a result was
able to invoke the remedies that article 44 preserves for
the buyer. In one decision, coke fuel was examined by an
independent inspector, appointed jointly by both parties, at
the time it was loaded on the carrier, and the inspector
issued a certificate of analysis. When the delivery arrived,
however, the buyer discovered that the delivery differed in
both quantity and quality from the certificate of analysis,
and the buyer thereupon notified the seller of the problem.
The tribunal ruled that the buyer’s notice was not timely
under article 39  (1), but that the erroneous certificate of
analysis gave the buyer a reasonable excuse for the delay:
because the certificate was the product of an independent
body appointed by both parties, the buyer was not bound
by it or responsible for its errors, and thus it could invoke
article 44.21 In another arbitration proceeding, a provision
of the contract required claims of non-conformity to be
brought forward within 50 days of the date stamped on a
bill of lading issued when the goods were dispatched.
Inspection of the goods at the port of shipment became
unfeasible, and the buyer did not examine the goods until
they arrived at their destination. As a result, the buyer did
not give notice of lack of conformity within the 50-day
deadline, but the court found that the buyer had a reasonable excuse for the delay and applied article 44 to permit
the buyer to reduce the price of the goods pursuant to
article 50 of the Convention.22
Notes
1
Article 44 is not the only provision that limits the impact of a buyer’s failure to give the required notice. Articles 40 and 43 (2) contain similar (but not identical) provisions excusing the buyer’s failure to notify based upon the seller’s awareness of a lack of conformity
or of a third party’s claim to the goods.
2
ICC Arbitration No. 9187, June 1999, Unilex.
CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry,
Russian Federation, award in case No. 54/1999 of 24 January 2000], also in Unilex.
3
4
CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997]. In other words, according to this decision only a failure
or delay in actually dispatching notice is subject to the “reasonable excuse” doctrine of article 44; failure to comply with the article  38  (1)
examination requirement, no matter what the reason, is not within the scope of article 44. Note that the “dispatch principle” of article  27,
under which a delay or error in transmitting a notice or its failure to arrive does not deprive the notice of effect, apparently would apply
to notice under articles 39  (1) or 43  (1).
5
CLOUT case No. 270 [Bundesgerichtshof, Germany, 25 November 1998]. In this appeal the court found that the seller had waived
its right to rely on the buyer’s failure to give proper notice, and for this reason the court expressly left open the issue of whether buyer
could invoke article 44.
Part three. Sale of goods
147
6
ICC Arbitration No. 9187, June 1999, Unilex; CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian
Federation Chamber of Commerce and Industry, Russian Federation, award in case No. 54/1999 of 24 January 2000], also in Unilex.
7
Id.
All of the decisions discussed in this paragraph concluded that the buyer did not have a reasonable excuse and thus was not entitled
to the benefits of article 44. See also CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (stating that
article 44 applies if “in the circumstances of the particular case” the buyer deserves “a degree of understanding and leniency”) (see the
full text of the decision).
8
9
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (see full text of the decision). See also CLOUT
case No. 542 [Oberster Gerichtshof, Austria, 17 April 2002] (asserting that, although article 44 excuse applies only if the buyer’s failure
to give timely notice is “due to reasons that would have excused an average buyer in the normal course of business conducted in good
faith,” the provision also requires that “the buyer acted with the diligence subjectively expected by it according to the circumstances”).
10
CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995] (see full text of the decision).
11
CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (see full text of the decision).
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998] (see full text of the decision); CLOUT case
No.  292 [Oberlandesgericht Saarbrücken, Germany, 13 January 1993] (see full text of the decision).
12
13
CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998] (see full text of the decision); CLOUT case No. 303 [Arbitration—International Chamber of Commerce No.  7331  1994] (see full text of the decision); CLOUT case No. 378 [Tribunale di Vigevano,
Italy, 12 July 2000] (see full text of the decision); ICC Arbitration Case No. 8611, 1997, Unilex.
14
In the following cases, the court found that they buyer did not have a reasonable excuse for its failure to satisfy the notice requirement of article 39  (1): CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004]; CLOUT case No. 542
[Oberster Gerichtshof, Austria, 17 April 2002] (asserting that, as an exception to the article 39 (1) notice requirement, article 44 must
be interpreted strictly); Arrondissementsrechtsbank ’s‑Hertogenbosch, the Netherlands, 15 December 1997, Unilex; CLOUT case No. 285
[Oberlandesgericht Koblenz, Germany, 11 September 1998]; CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998]
(see full text of the decision); CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995]; CLOUT case No. 192
[Obergericht des Kantons Luzern, Switzerland, 8 January 1997] (see full text of the decision); CLOUT case No. 303 [Arbitration—International Chamber of Commerce No. 7331 1994]; CLOUT case No. 230 [Oberlandesgericht Karlsruhe, Germany, 25 June 1997] (see full
text of the decision); CLOUT case No. 378 [Tribunale di Vigevano, Italy, 12 July 2000] (see full text of the decision); ICC Arbitration
Case No. 8611, 1997, Unilex; CLOUT case No. 273 [Oberlandesgericht München, Germany, 9 July 1997]; CLOUT case No. 292
[Oberlandesgericht Saarbrücken, Germany 13 January 1993] (see full text of the decision); CLOUT case No. 263 [Bezirksgericht Unterrheintal, Switzerland, 16 September 1998] (see full text of the decision); Sø og Handelsretten, Denmark, 31 January 2002, available on
the Internet at http://cisgw3.law.pace.edu/cases/020131d1.html.
The number of cases in which a buyer was able successfully to invoke article 44, in contrast, is quite small. See ICC Arbitration No.
9187, June 1999, Unilex; CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber
of Commerce and Industry, Russian Federation, award in case No. 54/1999 of 24 January 2000], also in Unilex. It should be noted,
however, that in one decision in which the court found article 44 inapplicable the court nevertheless implied that the buyer had adduced
facts that would have constituted a reasonable excuse had they been causally connected to the buyer’s failure to satisfy the article 39  (1)
notice requirement. See CLOUT case No. 192 [Obergericht des Kantons Luzern, Switzerland, 8 January 1997].
15
CLOUT case No. 285 [Oberlandesgericht Koblenz, Germany, 11 September 1998].
16
Sø og Handelsretten, Denmark, 31 January 2002, available on the Internet at http://cisgw3.law.pace.edu/cases/020131d1.html.
17
CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995] (see full text of the decision).
18
Arrondissementsrechtsbank ’s-Hertogenbosch, the Netherlands, 15 December 1997, Unilex.
19
CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004].
20
CLOUT case No. 597 [Oberlandesgericht Celle, Germany, 10  March 2004]
21
ICC Arbitration No. 9187, June 1999, Unilex.
CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and
Industry, Russian Federation, award in case No. 54/1999 of 24 January 2000], also in Unilex. In another case, a court implied that the
small size of the buyer’s operation, which did not permit it to spare an employee full time to examine the goods, might constitute a
reasonable excuse for delayed notice, although the court found that the buyer’s excuse in this case was not causally connected to its
failure to even begin examining the goods until more than three months after it should have. See CLOUT case No. 192 [Obergericht
des Kantons Luzern, Switzerland, 8 January 1997].
22
Part three. Sale of goods
149
Section III of Part III, Chapter II
Remedies for breach of contract by the seller (articles 45-52)
Overview
1. The provisions in Section III of Part III, Chapter II of
the Convention address various aspects of the remedies
available to a buyer that has suffered a breach of contract
by the seller: they catalogue those remedies and authorize
their use (article 45 (1)); they define their availability and
operation (articles 45 (2) and (3), 46, 48, and 50); they
provide for an aggrieved buyer’s right to avoid the contract
(articles 47 and 49), thereby regulating the buyer’s choice
between alternative sets of remedies; and they define the
operation of the buyer’s remedies in certain special circumstances (articles 51 and 52).
Relation to other parts
of the Convention
2. The current section on buyer’s remedies is paralleled
by the Convention’s section on seller’s remedies (Section  III
of Part III, Chapter III, articles 61-65). Many of the individual provisions in these sections parallel each other. Thus
article 45, which catalogues the buyer’s remedies, parallels
article 61, which catalogues the seller’s remedies; article  46, which authorizes the buyer to require performance
by the seller, parallels article 62, which authorizes the seller
to require the buyer’s performance; article 47, which permits the buyer to fix an additional period of time for the
seller to perform, parallels article 63, which permits the
seller to fix an additional period of time for the buyer to
perform; and article 49, which governs the buyer’s right to
avoid the contract, parallels article 64, which governs the
seller’s right to avoid.
3. Given that remedies play a central role in any system
of legal rules for transactions, it is not surprising that the
provisions in Section III have important connections to a
variety of other parts and individual articles of the Convention. For example, the buyer’s right to require performance
under article 46 is subject to the rule in article 28 relieving
a court of the obligation to order specific performance in
circumstances in which it would not do so under its own
law. Article 48, which establishes the seller’s right to cure
a breach after the required time for delivery has passed, is
closely related to the rule in article 37, permitting the seller
to cure up to the required time for delivery. The Section
III provisions on the buyer’s right to avoid the contract
have close connections to many provisions elsewhere in the
CISG, including, inter alia, the definition of fundamental
breach (article 25), the requirement that avoidance be
effected by notice (article 26), the rules authorizing avoidance of contract in certain special circumstances (articles  72
and 73), the articles providing for damages conditioned
upon avoidance (articles 75 and 76), the provisions dealing
with a buyer’s obligation to preserve goods in its possession
if it intends to “reject” them (articles 86-88)1, and, of
course, the provisions of Section V of Part III, Chapter V
on “effects of avoidance”. There is a particularly close connection between article 45 (1) (a), which authorizes an
aggrieved buyer to recover damages, and the provisions
defining how damages are to be calculated, which are found
in Section II of Part III, Chapter V (articles 74-77).2
Notes
1
A buyer’s obligation under articles 86-88 to preserve goods in its possession may also come into play if the buyer invokes its right
to demand substitute goods under article 46(2).
2
Indeed, article 45 (1) (a) itself cross-references articles 74-76.
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Article 45
(1) If the seller fails to perform any of his obligations under the contract or this
Convention, the buyer may:
(a) Exercise the rights provided in articles 46 to 52;
(b) Claim damages as provided in articles 74 to 77.
(2) The buyer is not deprived of any right he may have to claim damages by
exercising his right to other remedies.
(3) No period of grace may be granted to the seller by a court or arbitral tribunal
when the buyer resorts to a remedy for breach of contract.
Introduction
1. This provision gives an overview of the remedies available to the buyer when the seller has committed a breach
by non-performance of any of its duties under the contract
or the Convention.1 In its paragraph (1)  (a), the provision
simply refers to other provisions, namely articles 46-52,
which specify the conditions under which the rights provided by those provisions may be exercised. On the other
hand, article  45  (1)  (b) constitutes the basis for the buyer’s
right to claim damages and as such has great practical
importance.2 As far as the amount of damages is concerned,
it is to be adjudicated according to articles 74-76. Article  45  (2) allows the combination of the right to damages
with other remedies. Article 45  (3) limits the ability of
courts and arbitral tribunals to grant periods of grace; such
grace periods would interfere with the remedial system of
the Convention.
2. Article 45 does not enumerate the buyer’s remedies
exhaustively. The Convention provides for further remedies,
e.g., in articles 71-73 or 84  (1). Nevertheless, article 45 is
exhaustive in the sense that it preempts the buyer from
invoking remedies for breach of contract otherwise available under the applicable domestic law, since the Convention
excludes recourse to domestic law where the Convention
provides a solution.3
Non-performance of an obligation as a
prerequisite for remedies
3. The availability of any remedy to the buyer presupposes that the seller has failed to perform an obligation
deriving either from the contract, from trade usages, from
practices between the parties or from the Convention. Even
if an additional duty not specifically addressed in the Convention—for instance, the duty to extend a bank guaranty
in favour of the buyer4—has been breached, the buyer is
entitled to the remedies available under the Convention.
The extent of the seller’s failure to perform is irrelevant
for the purposes of deciding whether the buyer is entitled
to remedies. Of course, some remedies are available to the
buyer only where the breach is fundamental. Generally, the
reasons for the seller’s breach are irrelevant, except to the
extent the seller can claim an exemption under article  79  (5).
In particular, article 45  (1) does not require that the seller
have acted with negligence, fault or intent in order for the
buyer to claim the remedies mentioned in the provision.
4.However, if the seller’s responsibility for a remedy for
a breach depends on further conditions—in particular, on
a timely and proper notice by the buyer (see articles 38,
39, 43)—then the additional conditions must be satisfied
in order for the buyer to preserve its right to the remedy.
Rights under articles 46-52
5. Article 45  (1)  (a) merely refers to articles 46-52.
Although all the remedies provided for in these articles
require that a breach of an obligation has occurred, the
provisions make distinctions as to the kind of breach. Thus
articles 46  (2), 49  (1)  (a) and 51  (2) require a fundamental
breach. Article 49  (1)  (b) applies only in case of nondelivery, and it is doubtful whether article 50 applies to
cases other than delivery of non-conforming goods. Article
51 addresses partial non-performance; article 52 deals with
early delivery and excess delivery.
Claim of damages
6. Article 45  (1)  (b) lays down the substantive conditions
for a claim to damages by the buyer.5 In case of breach of
a contractual obligation of any sort by the seller, the buyer
who has suffered loss as a result of that breach can claim
damages. Thus, for example, the buyer can claim damages
for losses caused by the delivery of defective goods.6 A buyer
can also claim damages for an ensuing loss when the seller
declares in advance that it will be unable to deliver on time,
thereby committing an anticipatory breach of contract in the
sense of article 71.7 However, if the contract or the Convention imposes further conditions on the buyer’s entitlement to
damages—such as the requirement of notice under articles
38, 39, and 43—these conditions must also be satisfied.8
Part three. Sale of goods
7. In contrast to many national systems, the right to claim
damages under the Convention does not depend on any
kind of fault, breach of express promise, or the like; it
presupposes merely an objective failure of performance.9
Only under the conditions described in article 79 or in a
case falling within article 80 is the seller exempted from
liability for damages.10
8. Articles 74-77 to which article 45  (1)  (b) refers provide
rules for the calculation of the amount of damages, but those
provisions do not form a basis for a claim of damages.11
9. The decisions that have applied article 45  (1)  (b) evidence no difficulty with the application of this provision
as such.12 Problems may arise as to the existence and extent
of an obligation of the seller or to the amount of damages,
but since both aspects are dealt with by other provisions
(articles 30-44 and 74-77 respectively), article 45  (1)  (b)
is merely referred to in these cases, without being discussed
in detail.13
Cumulation of remedies (45  (2))
10. The right to claim damages is the remedy that is
always available to the buyer if a breach of contract has
caused the buyer any damage. This right can be invoked
along with any other remedy in order to compensate for
losses that occur despite the other remedy.14 The amount of
damages, however, depends on the other remedy to which
the buyer has resorted.15
No grace periods (45  (3))
11. Article 45  (3) limits the ability of courts and arbitral
tribunals to grant a period of grace and to extend the time
151
for performance when the buyer holds the seller liable for
a breach of contract.16 Although this possibility could be
regarded as a matter of procedural law and therefore outside the Convention’s scope of application, article 45 (3)
nevertheless explicitly excludes it. The provision is
addressed to courts and arbitral tribunals. The parties themselves are free to extend or otherwise modify the period
for performance at any time.
Further questions
12. The place of performance for all rights and claims
under article 45 follows the place of performance of the
primary obligation—to deliver, to hand over documents,
et cetera—which has been breached.17 Therefore it is
important to determine the place of performance of the
primary obligation.
13. The Convention does not deal with the statute of limitations.18 The prescription period applicable to the rights
and claims provided for in article 45 must thus be determined by reference to the applicable national law or—
where it governs—to the United Nations Convention on the
Limitation Period in the International Sale of Goods.
Burden of proof
14. Because the other parts of article 45 do not grant concrete rights on the basis of which the buyer can sue, the
question of the burden of proof under the provision is only
relevant for a claim to damages under article 45  (1)  (b). For
damage claims the burden is on the buyer, who must prove
a breach of an obligation by the seller as well as the losses
caused by that breach. According to article 79, the burden
is on the seller to prove any exempting circumstances.19
Notes
1
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 37 (“index to the remedies available to the buyer”).
2
See, e.g., CLOUT case No. 85 [Federal District Court, Northern District of New York, United States, 9 September 1994] (appellate
decision: CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6 December 1993, 3 March 1995]);
CLOUT case No. 140 [Arbitration-Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce
and Industry award No. 155/1994 of 16 March 1995]; CRCICA Arbitration Cairo, Egypt, 3 October 1995, Unilex; CLOUT case No.  166
[Arbitration—Schiedsgericht der Handelskammer Hamburg, 21 March, 21 June 1996] (see full text of the decision); ICC Court of Arbitration, France, award No. 8247, ICC International Court of Arbitration Bulletin, 2000, 53; CLOUT case No. 236 [Bundesgerichtshof,
Germany, 23  July 1997]; CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998] (see full text of the
decision). See also the Digest for art. 74, para 9.
3
Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc., United States, 10 May 2002, available on the Internet at http://www.cisg.
law.pace.edu/cisg/wais/db/cases2/020510u1.html.
4
See CRCICA Arbitration Cairo, Egypt, 3 October 1995, Unilex.
5
A parallel provision, article 61  (1)  (b), entitles the seller to claim damages for any breach of contract by the buyer.
See for example CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9 June 1995] (seller who had delivered and installed
defective windows was held liable to compensate buyer’s costs of replacing the defective windows).
6
7
ICC Court of Arbitration, award No. 8786, January 1997 ICC International Court of Arbitration Bulletin, 2000, 70.
See, e.g., ICC Court of Arbitration, France, award No. 8247, ICC International Court of Arbitration Bulletin 2000, 53; CLOUT case
No. 364 [Landgericht Köln, Germany, 30 November 1999]; see also Official Records of the United Nations Conference on Contracts
for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No.  E.81.IV.3), 34-36.
8
9
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 37.
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10
For an instance in which the article 79 exemption was found not inapplicable, see CLOUT case No. 140 [Arbitration-Tribunal of
International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, award No. 155/1994 of 16 March
1995].
11
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 37. See also the Digest for art. 74, para 9.
12
See, e.g., the decisions cited above in footnote 2.
See as examples: CLOUT case No. 82 [Oberlandesgericht Düsseldorf, Germany, 10  February 1994] (see full text of the decision);
CLOUT case No. 83 [Oberlandesgericht München, Germany, 2 March 1994] (see full text of the decision); CLOUT case No. 168
[Oberlandesgericht Köln, Germany, 21 March 1996] (see full text of the decision); ICC Court of Arbitration, France, award No. 8247,  ICC
International Court of Arbitration Bulletin, 2000, 53; CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February
1997]; CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997], also in Unilex; CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschatlichen Arbitrage, 29 December 1998]; CLOUT case No. 348 [Oberlandesgericht Hamburg,
Germany, 26 November 1999].
13
14
See the Digest for article 46, para. 9.
15
See the Digests for articles 74-76.
Granting such grace periods is possible, e.g., under art. 1184 para. 3 and art. 1244 of the French Code civil and in legal systems
which have been influenced by the French civil code.
16
17
Bundesgerichtshof, Germany, 11 December 1996; CLOUT case No. 268 [Bundesgerichtshof, Germany, 11 December 1996]; Gerechtshof ’s-Hertogenbosch, Netherlands, 9 October 1995, Unilex; Cour d’appel de Paris, France, 4 March 1998; CLOUT case No. 244 [Cour
d’appel, Paris, France, 4 March 1998]; CLOUT case No. 245 [Cour d’appel, Paris, France, 18 March 1998].
18
See the Digest for article 4, para. 13.
19
See the Digest for article 79, para. 20.
Part three. Sale of goods
153
Article 46
(1) The buyer may require performance by the seller of his obligations unless the
buyer has resorted to a remedy which is inconsistent with this requirement.
(2) If the goods do not conform with the contract, the buyer may require delivery
of substitute goods only if the lack of conformity constitutes a fundamental breach of
contract and a request for substitute goods is made either in conjunction with notice
given under article 39 or within a reasonable time thereafter.
(3) If the goods do not conform with the contract, the buyer may require the seller
to remedy the lack of conformity by repair, unless this is unreasonable having regard
to all the circumstances. A request for repair must be made either in conjunction with
notice given under article  39 or within a reasonable time thereafter.
Overview
1. Article 46 gives the buyer a general right to require
the seller to perform its contractual obligations in kind.
Paragraphs 2 and 3 deal with replacement and repair of
non-conforming goods (in the sense of article 35), and
articulate some restrictions on these specific remedies;
paragraph 1 applies to all other cases.
2. The right to require performance is subject to the
restriction regarding specific performance set forth in article 28. If the seized court would not, on the facts of the
case before, grant such remedy under its own national law,
it will not be bound to do so under the Convention.1 Therefore the courts of those jurisdictions that restrict the availability of specific performance may refuse to grant specific
performance of the obligation in dispute, except in circumstances where the court would grant the remedy under its
own domestic law, and may award only damages.
3. The fact that the right to performance is provided for
first among the remedies described in articles 46-52 reflects
that, under the Convention, the contractual bond should be
preserved as far as possible; avoidance of the contract
should be available only as a last resort (ultima ratio)2, and
only if the continuation of the contract would no longer be
tolerable because of a severe breach of contract by the
seller (see article 49). The same approach applies when the
buyer has breached the contract (articles 62 and 64).
4. Despite its importance, the right to require performance
has not been the subject of much case law. In practice
aggrieved parties have preferred to pursue other remedies—
in particular the right to claim damages.
General requirements
5. The right to require performance of an obligation presupposes that the obligation exists and has thus far not been
fulfilled.
6. Furthermore to invoke his rights under article 46 the
buyer must “require” performance. This calls for a clear
demand that the disputed obligation should be fulfilled.3 Article 46 (2) and (3) specify that notice of a “request” for the
remedies they describe must be given within a reasonable
time. The buyer is also entitled to set an additional period
of time for performance in accordance with article 47.
The general right to require
performance (article 46 (1))
7. Except in cases governed by article 46 (2) and (3), the
buyer has a general right under article 46 (1) to require the
seller’s performance, in kind, of any obligation that is due.
Thus the buyer is entitled to request that the goods be
delivered, that the seller procure a stipulated bank guaranty,
or that the seller respect an exclusive sales obligation.4 The
buyer could demand and, subject to the restrictions imposed
by article 28, employ the assistance of the courts to obtain
performance of these and other seller obligations.
8. If performance in kind is impossible—e.g., the contract
covers a unique good that is destroyed before delivery—then
the buyer’s right to require performance is also extinguished.
9. Article 46 (1) restricts the right to compel performance
when the buyer has already resorted to a remedy inconsistent with requiring performance. Such inconsistency exists
when the buyer has avoided the contract, and also when
the buyer has reduced the price pursuant to article 50.5 The
buyer can, however, combine a request for performance and
a claim for any remaining damage—e.g., damage caused
by delayed performance.6 The buyer having once requested
performance can still opt for a different remedy, e.g., can
declare the contract avoided if all the requirements for
avoidance are met. Only if the buyer has fixed an additional
period of time for performance under article 47 is the buyer
for that period excluded from requesting other remedies
(although the buyer retains the right to recover damages
for delayed performance by the seller)—see article  47  (2).
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10. The general right to require performance under article  46(1) need not be asserted within a particular period of
time apart from the normal period of limitation imposed
by applicable national law7 or, so far as it applies, by the
United Nations Convention on the Limitation Period in the
International Sale of Goods. Article 46 (2) and (3), in contrast, limit the time within which the buyer must make a
request for the remedies provided in these provisions; article 46 (1) requires a clear declaration that the buyer requests
the performance of a contractual obligation,8 but it does
not limit the time for such notice.
Delivery of substitute goods
(article 46 (2))
11. Article 46 (2) applies if (a) the seller has delivered
non-conforming goods; (b) the non-conformity constitutes
a fundamental breach of contract; and (c) the buyer has
requested replacement of the non-conforming goods “either
in conjunction with notice given under article 39 or within
a reasonable time thereafter.” If these conditions are met,
article 46 (2) entitles the buyer to require delivery of substitute goods.
12. Whether the goods are non-conforming must be determined by reference to article 35; a lack of conformity exists
if the goods are defective, different from the goods required
by the contract (aliud), improperly packaged, or deficient
in quantity.9
13. A seller commits a fundamental breach by delivering
non-conforming goods if the non-conformity substantially
deprives the buyer of what the buyer is entitled to expect
under the contract (article 25). A fundamental breach for
purposes of article 46 (2) must be determined in the same
way as it for purposes of avoidance of contract under article  49 (1)(a), and in accordance with the general definition
in article 25. Leading court decisions on what constitutes
a fundamental breach (although rendered in respect of article 49) have held that a non-conformity concerning quality
is not a fundamental breach of contract if the buyer can,
without unreasonable inconvenience, use the goods or resell
them, even with a rebate.10 Thus, e.g., the delivery of frozen
meat that contained too much fat and water—and which
therefore, according to expert opinion, was worth 25.5 per  cent
less than meat of the contracted-for quality—was deemed
not to constitute a fundamental breach of contract because
the buyer could resell the meat at a lower price or could
process it in an alternative manner.11 If non-conforming
goods cannot be used or resold with reasonable effort, however, there is a fundamental breach.12 The same is true
where the goods suffer from a serious defect, even thought
they can still be used to some extent (e.g. flowers that
should have flourished the whole summer but in fact did
so only for a small part of the season),13 or where the goods
have major defects and the buyer requires the goods for
its manufacturing processes.14 Similarly, where the nonconformity resulted from the adulteration of the goods in
a fashion that was illegal in the states of both the seller
and the buyer, a fundamental breach was found.15
14. Special problems arise with the fundamental breach
standard when the goods are defective—even seriously
defective—but reparable. Several courts have found that,
if the defects are easily repaired, the lack of conformity is
not a fundamental breach.16 At least where the seller offers
and effects speedy repair without any inconvenience to the
buyer, courts will not find that the non-conformity is a
fundamental breach.17 This is in line with seller’s right to
cure as provided for in article 48 of the Convention.
15. Article 46 (2) requires the buyer to give the seller
notice requesting substitute goods, and to do so within a
limited time. The request for substitute goods can be coupled with the notice of lack of conformity under article  39,
in which case the time limits under that provision apply;18
it can, however, also be given within a reasonable time
after the article 39 notice.
16. The right to require delivery of substitute goods is
subject to the buyer’s obligation to return the delivered
goods in substantially the condition in which he received
them, pursuant to article 82 (1). Article 82 (2), however,
provides for substantial exceptions to this restitutionary
obligation.
Repair (article 46 (3))
17. Article 46 (3) provides the buyer with a right to
demand repair if the delivered goods do not conform to
the contract under the standards of article 35. The remedy is available, however, only if it is reasonable in light
of all the circumstances. The buyer must also request
repair within the same time limits as those applicable to
notice under article 46 (2)—i.e., “in conjunction with
notice given under article 39 or within a reasonable time
thereafter.”19
18. Article 46 (3) applies only if the lack of conformity
can be cured by repair. A request for repair would be unreasonable if the buyer could easily repair the goods himself,
but the seller remains liable for the costs of such repair.20
19. Repair is effectively provided if after repair the goods
can be used as agreed.21 If the repaired goods subsequently
become defective the buyer must give notice of the
defects.22 It has been held that the time limits of Article 39
apply to this notice,23 but a request to repair the new defects
can be given within a reasonable time thereafter.24 A first
notice within two weeks, a second notice after a month,
and further notices after six and eleven months have been
regarded as notices within a reasonable time.25
Notes
1
2
See the Digest for art. 28.
See CLOUT case No. 428 [Oberster Gerichtshof, 7 September 2000], also available on the Internet at http://www.cisg.at/8_2200v.htm.
Part three. Sale of goods
155
3
The commentary on the draft Convention prepared by the UNCITRAL secretariat contained an example of an ambiguous request that
could be interpreted as either a demand for performance or a modification of the delivery date:
“Example 42A: When the goods were not delivered on the contract date, 1 July, Buyer wrote Seller ‘Your failure to deliver on 1  July
as promised may not be too serious for us but we certainly will need the goods by 15 July.’ Seller subsequently delivered the goods by
15 July.”
Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April 1980
(United Nations publication, Sales No.  E.81.IV.3), 38.
4
See the following cases (where, however, the buyers had resorted to other remedies—namely damages or (as far as possible) avoidance): ICC Court of Arbitration, award No. 8786, January 1997, ICC International Court of Arbitration Bulletin 2000, 70 (late delivery);
CRCICA Arbitration Cairo, Egypt, 3 October 1995, Unilex (extension of bank guaranty); CLOUT case No. 2 [Oberlandesgericht Frankfurt
a.M., Germany, 17 September 1991] (breach of exclusive sales agreement).
5
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 38, at para. 7.
6
Id at para. 4.
7
See for example CLOUT case No. 346 [Landgericht Mainz, Germany, 26 November 1998].
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 38, at paras. 4-5.
8
9
See the Digest for art. 35.
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996]; CLOUT case No. 248 [Schweizerisches Bundesgericht,
Switzerland, 28 October 1998].
10
11
CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998].
CLOUT case No. 150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine); CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994] (shoes with fissures in leather); Landgericht Landshut, Germany, 5 April 1995, Unilex
(T-shirts which shrink by two sizes after first washing).
12
13
CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994].
See CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1993, 3 March 1995]
(compressors with lower cooling capacity and higher power consumption than those contracted for, needed by the buyer to manufacture
air conditioners); CLOUT case No.150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine); CLOUT case No. 315
[Cour de Cassation, France, 26 May 1999] (metal sheets absolutely unfit for the anticipated use by the buyer’s customer) (see full text
of the decision).
14
15
CLOUT case No. 150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine, which is forbidden under EU law
and national laws); CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (artificially sugared wine).
16
CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995].
CLOUT case No. 152 [Cour d’appel, Grenoble, France, 26 April 1995]; CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany,
31 January 1997].
17
18
See the Digest for art. 39, paras. 15-22.
19
See CLOUT case No. 225 [Cour d’appel, Versailles, France, 29 January 1998]. See also para. 15 above.
20
CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9 June 1995] (see full text of the decision).
21
CLOUT case No. 152 [Cour d’appel, Grenoble, France, 26 April 1995].
22
Landgericht Oldenburg, Germany, 9 November 1994, Unilex.
23
Id.
24
CLOUT case No. 225 [Cour d’appel, Versailles, France, 29 January 1998] (see full text of the decision).
25
Id.
156
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 47
(1) The buyer may fix an additional period of time of reasonable length for performance by the seller of his obligations.
(2) Unless the buyer has received notice from the seller that he will not perform
within the period so fixed, the buyer may not, during that period, resort to any remedy
for breach of contract. However, the buyer is not deprived thereby of any right he may
have to claim damages for delay in performance.
Overview
1. Article 47  (1) gives the buyer the right to fix an additional period of time—beyond that provided for in the contract—within which the seller must perform its obligations.
The provision thus complements the right to require performance under article 46, but it has a particular association
with the right to avoid the contract under article 49. In fact,
article 47 has practical significance primarily in connection
with the latter provision: article 49  (1)  (b) provides that, if
the seller fails to deliver by the expiration of the additional
period of time fixed in accordance with article 47, the buyer
can declare the contract avoided. Thus the fixing of an
additional period of time paves the way for the avoidance
of the contract. This mechanism for avoiding the contract,
however, applies only in cases of non-delivery.1
2. Article 47  (2) states that a buyer who fixes an additional period of time pursuant to the provision binds itself
not to resort to other remedies during that period, although
it retains the right to claim damages for delay in performance that occurs during the period. This binding effect is
intended to protect the seller who, in response to the buyer’s notice fixing an additional period for performance, may
as a result prepare the performance during that period, perhaps at considerable expense, and thus should be entitled
to expect that the buyer will accept the requested performance if it is not otherwise defective.2 Only if the seller
informs the buyer that it will not perform during the additional period is the buyer be free to resort to other available
remedies during the period, since in that case the seller
needs no protection.
Where the seller has not delivered the goods by the due
date, however, the buyer can benefit from fixing an additional period for the seller to perform his delivery obligations: the seller’s failure to deliver within the period
properly so fixed allows the buyer to avoid the contract
without having to show that the seller’s delay was a fundamental breach.4 There are even cases stating that, if a
buyer has not granted an additional period of time in a late
delivery situation, the buyer has no right to avoid the
contract.5
5. The additional period of time fixed by the buyer must
be of reasonable length to satisfy the requirements of article  47 (1). An additional period of two weeks for the delivery of three printing machines from Germany to Egypt was
deemed to be too short, whereas a period of seven weeks
was regarded as reasonable.6 In a Danish-German car sale
an additional period of three to four weeks for delivery was
found to be reasonable.7 If the buyer fixes an unreasonably
short period for delivery courts have substituted a reasonable period.8 Courts have also found the reasonableness
requirement satisfied if the buyer, having previously fixed
an unreasonably short period, thereafter waits for delivery
until a reasonable period time has expired before dispatching its notice of avoidance.9
Fixing of additional period of time
(Article 47 (1))
6. The buyer must make clear that the seller has to perform within the additional time fixed in order to properly
invoke article 47 and be entitled to avoid the contract if
the seller does not deliver with the additional time.10 A
clear expression that the buyer is granting a final deadline
is necessary (e.g. “final delivery date: 30 September
2002”).11 It has therefore been decided that a mere reminder
demanding prompt delivery is not sufficient, since no additional time period for delivery had been fixed.12 On the
other hand, it has been held sufficient for purposes of article 47  (1) if the buyer accepts a new delivery date proposed
by the seller provided the buyer makes clear that performance by that date is essential.13 The same result was reached
in a case where the buyer accepted several requests from
the seller to extend the time for delivery.14 Where a buyer
tolerated the late delivery of several instalments of an instalment sale, it was held that the buyer’s behaviour was equivalent to the granting of an additional period of time.15
4. The buyer is entitled, but not obliged, to fix an additional
period for the seller’s performance under article  47  (1).3
7. There is generally no requirement as to the form the
buyer must employ in fixing the additional period of time—
3. Article 47 allows the buyer to fix an additional period
of time for performance of any obligation the seller has
not performed. The provision thus can be applied to all
obligations the seller has agreed to fulfil. The granting of
an addition period under article 47 functions as a step
toward avoidance of the contract, however, only if the seller
has violated its duty to deliver the goods.
Part three. Sale of goods
an approach that is consistent with article 11; where a reservation under article 96 is applicable, however, form
requirements may have to be met. Where such a reservation
does not apply, it is irrelevant whether the buyer’s extension
of time was communicated in writing or orally, or was done
by implication.16
Effect of fixing an additional
period of time (Article 47 (2))
8. The fixing of an additional period of time under article  47 (1) initially benefits the seller, who thereby gains an
157
extension of time for performance. Article 47  (2) provides
that the buyer may not avoid the contract or reduce the
price (see article 50) while the additional period of time
lasts, unless the seller has declared that it is not able or
willing to perform within the additional period17 or has
made its performance dependant of conditions not stipulated in the contract.18 If the seller performs during the
additional period of time the buyer must accept the performance. The buyer nevertheless retains the right to claim
damages for losses caused by the delay of performance. If
the seller does not perform within the additional period,
the buyer may resort to any available remedy, including
avoidance.
Notes
1
See the Digest for art. 49, para. 15.
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 39-40.
2
3
Oberlandesgericht Hamburg, Germany, 4 July 1997, Unilex.
4
See art. 49 (1) (b).
See, e.g., CLOUT case No. 7 [Amtsgericht Oldenburg in Holstein, Germany, 24 April 1990]; CLOUT case No. 82 [Oberlandesgericht
Düsseldorf, Germany, 10 February 1994]; CLOUT case No. 120 [Oberlandesgericht Köln, Germany, 22 February 1994].
5
6
CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995].
7
CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (see full text of the decision).
CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995] (see full text of the decision); Landgericht Ellwangen,
Germany, 21 August 1995, Unilex; CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April 1999] (see full text of the
decision).
8
9
Landgericht Ellwangen, Germany, 21 August 1995, Unilex; CLOUT case No. 362 [Oberlandesgericht Naumburg, Germany, 27 April
1999] (see full text of the decision).
10
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 39, paras. 6–7.
11
Id., para. 7.
12
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997].
13
CLOUT case No. 277 [Oberlandesgericht Hamburg, Germany, 28 February 1997] (see full text of the decision).
14
CLOUT case No. 225 [Cour d’appel, Versailles, France, 29 January 1998].
15
CLOUT case No. 246 [Audiencia Provincial de Barcelona, Spain, 3 November 1997].
16
See the decisions cited in the preceding paragraph.
17
See CLOUT case No. 293 [ArbitrationSchiedsgericht der Hamburger freundschatlichen Arbitrage, 29 December 1998].
18
Id.
158
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 48
(1) Subject to article 49, the seller may, even after the date for delivery, remedy
at his own expense any failure to perform his obligations, if he can do so without
unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. However, the
buyer retains any right to claim damages as provided for in this Convention.
(2) If the seller requests the buyer to make known whether he will accept performance and the buyer does not comply with the request within a reasonable time, the seller
may perform within the time indicated in his request. The buyer may not, during that
period of time, resort to any remedy which is inconsistent with performance by the
seller.
(3) A notice by the seller that he will perform within a specified period of time
is assumed to include a request, under the preceding paragraph, that the buyer make
known his decision.
(4) A request or notice by the seller under paragraph (2) or (3) of this article is
not effective unless received by the buyer.
Introduction
1. Article 48  (1) gives the seller the so-called right to
“cure,” which allows the seller to correct any failure to
perform its obligations under the contract or under the Convention, and to do so even after the date for performance
required under the contract, provided that the exercise of
that right does not cause the buyer unreasonable inconvenience. 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.
The right to remedy a failure of
performance (article 48 (1))
2. Article 48  (1) permits the seller to cure any failure of
performance of any contractual obligation. This right to
cure, however, is “subject to article 49”, the provision governing the buyer’s general right to avoid the contract.
Avoidance of the contract, therefore, excludes the seller’s
right to cure. Generally, it is for the buyer to decide whether
or not the contract should be avoided. The buyer may exercise a right to avoid without restriction from the seller’s
right to cure.1 This approach is supported by article 48  (2)
according to which the seller may ask whether the buyer
will accept a cure.2 Therefore the buyer who is entitled to
avoid the contract need not wait to see if the seller will
cure, but may declare the contract avoided as soon as it
suffers a fundamental breach3 (but see the notice procedure
discussed in paragraphs 7-9, infra). There are courts, however, that have adopted the view that the buyer must first
allow the seller to cure any breach (even a fundamental
one) before avoiding, and who deny that there is a fundamental breach where the buyer has not given the seller the
opportunity to remedy the failure of performance.4 It should
be noted, however, that a breach is rarely fundamental
when the failure of performance could easily be remedied.5
This rule, however, should not be misunderstood to mean
that in each case the seller must be offered an opportunity
to cure before the buyer can avoid the contract.6
3. The right to cure is only granted in certain circumstances—specifically, where the seller’s failure to perform
can be remedied without unreasonable delay, without
unreasonable inconvenience to the buyer, and without
uncertainty that the seller will compensate any costs the
buyer may have advanced. It has been held that these conditions are satisfied if, e.g., defective motors can easily be
cured in a short time and at minimal costs.7
4. It has been concluded, based on articles 46 and 48, that
the seller is responsible for costs that the buyer incurs in connection with the seller’s cure of defects in delivered goods.8
5. The willingness of the seller to cure a failure of performance has been taken into account as a factor in determining whether a lack of quality amounts to a fundamental
breach of contract.9
Right to claim damages
6. Even if the seller cures a failure of performance, the
last sentence of article 48 (1) provides that the buyer retains
the right to claim damages for losses suffered despite the
cure. Therefore it has been held that a buyer was entitled
to 10 per cent of the overall value of the sale as estimated
damages when delivery was delayed and the buyer had to
arrange for transportation of the goods.10
Part three. Sale of goods
Request to remedy a failure of
performance (article 48 (2)-(4))
7. Under article 48 (2), the seller may give the buyer
notice of its willingness to cure a failure of performance
within a particular time, and may request that the buyer
“make known whether he will accept” the cure. According
to article 48  (3), a notice indicating the seller’s willingness
to cure is deemed to include such a request. If the buyer
does not respond to such a request within a reasonable time
(or, presumably, consents to the request),11 the seller may
cure within the time indicated and, pursuant to article  48  (2),
the buyer may not during that period, resort to remedies
inconsistent with the seller’s curing performance.
159
8. A request for the buyer’s response to a proposed cure
by the seller under article 48  (2) or (3) must specify the
time within which the seller will perform. Without such a
time frame for the proposed cure, the request does not have
the effect specified in article 48 (2).12
9. As an exception to the dispatch principle in article 27,
under article 48 (4) the buyer must receive a request for the
buyer’s response to a proposed cure (or a notice of intent to
cure deemed to include such a request under article 48 (3)),
or the request or notice will not have the effect specified in
article 48 (2). Article 27, however, applies to the buyer’s
reply, which is therefore effective whether or not received,
provided it is dispatched by appropriate means.13
Notes
1
See, e.g., CLOUT, case No. 90 [Pretura circondariale de Parma, Italy, 24 November 1989] (see full text of the decision); CLOUT
case No. 2 [Oberlandesgericht Frankfurt a.M., Germany, 17  September 1991] (see full text of the decision); CLOUT case No. 165
[Oberlandesgericht Oldenburg, Germany, 1 February 1995]; CLOUT case No. 235 [Bundesgerichtshof, Germany, 25  June 1997]; CLOUT
case No. 304 [Arbitration—International Chamber of Commerce No.  7531 1994].
2
See CLOUT case No. 304 [Arbitration—International Chamber of Commerce No. 7531 1994] (see full text of the decision).
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 41:
“
5. If there has been a fundamental breach of contract, the buyer has an immediate right to declare the contract avoided. He need
not give the seller any prior notice of his intention to declare the contract avoided or any opportunity to remedy the breach under
[then] article 44 6. However, in some cases the fact that the seller is able and willing to remedy the non-conformity of the goods
without inconvenience to the buyer may mean that there would be no fundamental breach unless the seller failed to remedy the nonconformity within an appropriate period of time.”
3
4
See, e.g., CLOUT case No. 339 [Landgericht Regensburg, Germany, 24 September 1998].
5
See for example ICC Court of Arbitration, France, award No. 7754, ICC International Court of Arbitration Bulletin 2000, 46.
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 41, para. 6 (“in some cases”).
6
7
ICC Court of Arbitration, France, award No. 7754, ICC International Court of Arbitration Bulletin 2000, 46.
8
CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9 June 1995] (costs for replacing defective windows).
9
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997].
CLOUT case No. 151 [Cour d’appel, Grenoble, France, 26 February 1995] (sale of a dismantled second-hand hangar of which certain
parts were defective and had to be repaired twice).
10
11
See also Amtsgericht Nordhorn, Germany, 14 June 1994, Unilex.
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 41, para. 14.
12
13
Id., para. 16.
160
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 49
(1) The buyer may declare the contract avoided:
(a) If the failure by the seller to perform any of his obligations under the contract
or this Convention amounts to a fundamental breach of contract; or
(b) In case of non-delivery, if the seller does not deliver the goods within the
additional period of time fixed by the buyer in accordance with paragraph (1) of article  47 or declares that he will not deliver within the period so fixed.
(2)However, in cases where the seller has delivered the goods, the buyer loses
the right to declare the contract avoided unless he does so:
that
(a) In respect of late delivery, within a reasonable time after he has become aware
delivery has been made;
(b) In respect of any breach other than late delivery, within a reasonable time:
(i) After he knew or ought to have known of the breach;
(ii) After the expiration of any additional period of time fixed by the buyer in
accordance with paragraph (1) of article 47, or after the seller has declared
that he will not perform his obligations within such an additional period; or
(iii) After the expiration of any additional period of time indicated by the seller
in accordance with paragraph (2) of article 48, or after the buyer has declared
that he will not accept performance.
Overview
1. Article 49 specifies the conditions under which the
buyer is entitled to declare the contract avoided. Avoidance
under article 49 is available in two situations: 1) if the
seller’s failure to perform its contractual obligations
amounts to a fundamental breach of contradct as defined
in article 25 (article  49  (1)  (a)); or 2) if the seller fails to
deliver the goods within an additional period of time fixed
in accordance with article 47 (article 49  (1)  (b)).
2. Avoidance of the contract is a remedy of last resort
(ultima ratio) that is available when the buyer can no longer
be expected to continue the contract.1 A contract is avoided
only when the buyer provides notice of avoidance (article  26). In cases of non-delivery, the buyer is entitled to
avoid the contract at any time after all prerequisites for
avoidance have been met. If the seller has delivered the
goods, however, the buyer loses the right to avoid the contract if the buyer does not exercise it within the reasonable
time periods specified in article 49  (2).
Avoidance in general
3. The buyer must declare the contract avoided by means
of a notice (article 26). No specific form is prescribed for
that notice, although form requirements may be relevant if
the reservation under articles  12 and 96 applies. The notice
must clearly express that the buyer now treats the contract
as at an end. A mere announcement of future termination,
a statement urging delivery, or returning the goods without
comment does not suffice.2 Commencing a law suit claiming avoidance of contract has been treated as notice of
avoidance.3
4. Where a buyer wishes to avoid because the seller has
delivered goods that are non-conforming or subject to third
party rights, not only must the seller’s breach constitute a
fundamental breach of contract but also the buyer must
have given notice of the lack of conformity or of the thirdparty claim in accordance with articles 39 and 43 (1)
(unless such notice was excused under articles 40 or 43  (2)).
The buyer loses the right to avoid the contract if he fails
to comply with the notice requirement.4
Avoidance for fundamental breach
(article 49 (1) (a))
5. Under article 49  (1)  (a) any fundamental breach as
defined in article 25 justifies the avoidance of the contract.
Thus in order for the buyer to have proper grounds to
avoid the contract under article 49 (1) (a), the seller must
have failed to perform an obligation (i.e., have breached),
and the seller’s non-performance must substantially
deprive the buyer of what he was objectively entitled
to expect under the contract. The consequences of the
seller’s non-performance must be determined in light of
all of the circumstances of the case.
Part three. Sale of goods
6. A fundamental breach requires, first, that the seller has
violated a duty it was obliged to perform either under the
contract, according to trade usages or practices established
between the parties, or under the Convention. The seller’s
non-performance of an agreed-upon duty beyond the core
duty of delivering conforming goods (see article 30) can
suffice—for instance, the violation of duties under an
exclusive sales contract.5 Breach of an additionally-agreed
duty entitles the buyer to avoid the contract if the breach
is fundamental, i.e. if it deprives the buyer of the main
benefit of the contract. In order to be “fundamental,” the
breach must frustrate or essentially deprive the buyer of its
justified contract expectations; what expectations are justified depends on the specific contract and the risk allocation
envisaged by the contract provisions, on usages and established practices between the parties (where they exist), and
on the additional provisions of the Convention. For instance,
buyers are not normally justified in expecting that delivered
goods will comply with regulations and official standards
in the buyer’s country.6 Unless otherwise agreed, it is generally the standards in the seller’s country that determine
whether goods are fit for their ordinary purpose (article  35  (2)  (a)).7 Therefore, e.g.,  the delivery of mussels
with a cadmium level exceeding standards in the buyer’s
county was not regarded as a breach, let alone a fundamental breach, since the buyer could not reasonably have
expected the seller to meet those standards (which were
not shown to apply in the country of the seller) and since
the consumption of the mussels in small amounts did not
endanger a consumer’s health.8
7. A fundamental breach occurs only if the party in breach
could reasonably foresee the substantial deprivation of
expectations resulting from the breach (article 25). Even if
the seller did not in fact foresee that the breach would
deprive the buyer of most or all of the benefit of the contract, the breach remains fundamental if a reasonable person in the same conditions would have foreseen such a
result. Article 25 does not state the time as of which the
foreseeability of the consequences of the breach should be
determined. One decision has determined that the time of
the conclusion of the contract is the relevant time.9
Specific instances of fundamental breach
8. Guidelines have developed in case law that may help,
to some extent, in determining whether or not a breach of
contract qualifies as fundamental. It has been found on
various occasions that final non-delivery by the seller constitutes a fundamental breach of contract unless the seller
has a justifying reason to withhold its performance.10 However, if only a minor part of the contract is left unperformed—e.g., one of several instalments is not supplied—the
breach is not fundamental unless the performed part is,
absent the missing performance, of no use to the buyer.11
On the other hand, the serious, definitive and unjustified
refusal of the seller to fulfil its contractual obligations
amounts to a fundamental breach.12 It has been also held
that a complete and final failure to deliver the first instalment in an instalment sale gives the buyer reason to
believe that further instalments will not be delivered, and
that therefore a fundamental breach of contract was to be
expected.13
161
9. As a rule, late performance does not by itself constitute a fundamental breach of contract.14 Only when the
time for performance is of essential importance—either
because that is so stipulated between the parties15 or
because timely performance is critical in the circumstances (e.g., seasonal goods)16—will delay amount to a
fundamental breach.
10. A fundamental breach has also been found where the
length of a delay in performance approached, in its effect,
non-performance—for instance where the agreed delivery
date was one week and the seller had delivered only one
third of the goods after two months.17 Even if a delay in
delivery is not shown to be a fundamental breach, article  47
of the Convention allows the buyer to fix an additional
reasonable period of time for delivery beyond the contractual due date, and if the seller fails to deliver by the
end of the additional period the buyer may declare the
contract avoided under article 49 (1) (b).18 A seller’s failure to deliver within an additional period set pursuant to
article 47, therefore, is the equivalent of a fundamental
breach of contract.
11. The most challenging issues in determining whether
a breach is fundamental arise with respect to the delivery
of defective goods. Court decisions on this point have
concluded that a non-conformity relating to quality
remains a mere non-fundamental breach of contract as
long as the buyer, without unreasonable inconvenience,
can use the goods or resell them, even if the resale requires
a rebate.19 Thus, e.g., the delivery of frozen meat with an
excessive fat and water content—and which, therefore,
was worth 25.5 per cent less than meat of the contractedfor quality, according to expert opinion—was not regarded
as a fundamental breach of contract since the buyer could
resell the meat at a lower price or could otherwise make
use of it.20 On the other hand, if the non-conforming
goods cannot be used or resold using reasonable efforts,
the delivery constitutes a fundamental breach and entitles
the buyer to declare the contract avoided.21 The buyer was
also permitted to avoid the contract where the goods suffered from a serious defect that could not be repaired,
even though they were still useable to some extent (e.g.
flowers which should bloom the whole summer but did
so only for part of the season).22 A fundamental breach
has also been found, without reference to whether resale
or alternative use was possible for the buyer, when the
goods had major defects and the buyer required the goods
for manufacturing its own products.23 The same result was
reached where the non-conformity resulted from the seller
adding substances to the goods, the addition of which was
illegal in the country of both the seller and the buyer.24
The rules governing the delivery of non-conforming goods
apply equally if the seller delivers the wrong goods (i.e.,
an aliud).25
12. Special problems arise when the goods are defective,
even seriously defective, but repairable. Some courts have
held that a lack of conformity that can easily be repaired
does not constitute a fundamental breach.26 If the seller
offers and effects speedy repair or replacement without
inconvenience to the buyer, several decisions have denied
a fundamental breach.27 This is consistent with the seller’s
right to cure under article 48 of the Convention. If repair
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
is delayed or causes the buyer unreasonable inconvenience, however, a breach that would otherwise qualify as
fundamental remains fundamental. Furthermore, a fundamental brach cannot be denied merely because the buyer
did not first request the seller to cure the defective
performance.28
13. Defects in documents relating to the goods constitute
a fundamental breach if they fundamentally impair the buyer’s ability to resell or otherwise deal in the goods.29 If the
buyer itself can easily cure the defects in the document,
e.g. by requesting new documents, however, the breach will
not be considered fundamental.30
14. Violation of contractual obligations other than the
aforementioned ones can also amount to a fundamental
breach. Such a breach is fundamental if it deprives the
buyer of the main benefit of the contract and that result
could reasonably have been foreseen by the seller. Thus a
court has held that the delivery of false certificates of origin
did not constitute a fundamental breach if the goods were
nevertheless merchantable and if the buyer itself could easily get the correct certificates.31 Likewise, the unjustified
denial of contract rights of the other party—e.g. denying
the validity of a retention of title clause and of the seller’s
right to possession of the goods,32 or the unjustified denial
of a valid contract after having taken possession of the
goods33—can amount to a fundamental breach of contract.
Avoidance has also been permitted when resale restrictions
were violated in a substantial fashion.34
Avoidance for non-delivery during
additional period of time
(article 49  (1)  (b))
15. Article 49  (1)  (b) states a second ground for avoidance of contract, applicable only in cases of non-delivery:
the buyer can avoid if the seller does not deliver within the
additional period of time for delivery that the buyer has
fixed under article 47  (1). The buyer can also avoid the
contract if the seller declares that it will not deliver within
the additional period so fixed.
Period of time for declaration of
avoidance when goos have been
delivered (article 49  (2))
16. Generally the buyer is not required to declare the
contract avoided within a certain period of time; he can do
so at any time if a ground for avoidance exists.35 This principle is, however, subject to a limitation under article 49  (2)
if the goods have been delivered. In such a case, the buyer
must declare avoidance within a reasonable time. The
moment as of which the reasonable time begins to run
differs depending on whether the breach involves late delivery or a different kind of breach. In case of late delivery
the period starts when the buyer becomes aware that delivery was made (article 49  (2) (a)). In case of other breaches
the reasonable period of time for declaring the contract
avoided starts running when the buyer becomes aware or
ought to have been aware of the breach;36 if, however, the
buyer has fixed an additional period for delivery in accordance with article 47  (1), or if the seller has set a period for
cure in accordance with article 48 (2), the buyer’s reasonable time for avoidance begins to run from the expiration
of the fixed period. Five months after the buyer was informed
of the breach has been found not to constitute a reasonable
period for declaring avoidance under article  49  (2)  (b);37 an
avoidance declaration made eight weeks after the buyer
became aware of the breach has been held too late;38 and
avoidance eight months after the latest time that the buyer
knew or ought to have known of the seller’s alleged breach
has been deemed untimely.39 On the other hand, five weeks
has been regarded as a reasonable period of time to declare
the contract avoided under article  49  (2)  (b).40 A declaration
of avoidance made after several extensions of time for performance had been granted was found to be timely,41 as was
a declaration given within 48 hours after late delivery of an
isntallment.42 A declaration of avoidance made three weeks
after notice of lack of conformity under article 39, furthermore, was considered timely.43
Burden of proof
17. It has been observed that, to justify avoidance of contract,
the burden is on the buyer to prove that the seller’s breach of
contract was fundamental and substantially deprived the buyer
of what he was entitled to expect under the contract.44
Notes
1
See, e.g., CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996] (see full text of the decision); CLOUT case No. 428
[Oberster Gerichtshof, Austria, 7 September 2000], Internationales Handelsrecht 2001, 42; see also Tribunale di Busto Arsizio, Italy,
13  December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150-155, also available on Unilex.
2
CLOUT case No. 6 [Landgericht Frankfurt a.M., Germany, 16 September 1991]; CLOUT case No. 282 [Oberlandesgericht Koblenz,
Germany, 31 January 1997].
3
See CLOUT case No. 481 [Court d’ Appel Paris, France, 14 June 2001].
See, e.g., CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995]. A buyer who has “a reasonable
excuse” for failing to give the notice required by articles 39 (1) or 43 (1) retains certain remedies, but not the right to avoid the contract.
See the Digest for art. 44, para. 1.
4
5
See, e.g., CLOUT case No. 2 [Oberlandesgericht Frankfurt a.M., Germany, 17 September 1991]; CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997]; CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September
1997]; CLOUT case No. 154 [Cour d’appel, Grenoble, France, 22 February 1995] (failure to disclose destination of goods sold).
Part three. Sale of goods
163
6
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995]. See also CLOUT case No. 418 [Federal District Court, Eastern
District of Louisiana, United States, 17 May 1999] (citing CLOUT case No. 123); CLOUT case No. 426 [Oberster Gerichtshof, Austria,
13 April 2000], also in Internationales Handelsrecht 2001, 117.
7
See the decisions cited in footnote 5.
8
CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995].
9
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997].
CLOUT case No. 90 [Pretura circondariale de Parma, Italy, 24 November 1989] (partial and very delayed delivery); CLOUT case
No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995].
10
11
CLOUT case No. 275 [Oberlandesgericht Düsseldorf Germany, 24 April, 1997].
See CLOUT case No. 136 [Oberlandesgericht Celle, Germany, 24 May 1995] (see full text of the decision) (seller gave notice that
he had sold the goods to another buyer). Cf. Tribunal of International Commercial Arbitration at the Russian Federation Chamber of
Commerce, Russia, award in case No. 387/1995 of 4 April 1997, Unilex (buyer’s final refusal to pay the price).
12
13
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997].
Landgericht Oldenburg, Germany, 23 March 1996, Unilex (one day delay in dispatch of seasonal goods not a fundamental breach);
Corte di Appello di Milano, Italy, 20 March 1998, Unilex (late delivery); CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany,
24 April 1997] (late delivery).
14
CLOUT case No. 277 [Oberlandesgericht Hamburg, Germany, 28 February 1997] (on the facts of the particular case late delivery
under a CIF sale was found to be a fundamental breach of contract).
15
16
Corte di Appello di Milano, Italy, 20 March 1998, Unilex (buyer ordered seasonal knitted goods and pointed out the essential importance of delivery at the contract date, although it did so only after conclusion of the contract); ICC Court of Arbitration, France, award
No.  8786, ICC International Court of Arbitration Bulletin 2000, 70.
17
CLOUT case No. 90 [Pretura circondariale di Parma, Italy, 24 November 1989].
18
See, e.g., CLOUT case No. 82 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994]; para. 15 infra.
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996]; CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998].
19
20
CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998].
CLOUT case No. 150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine); CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994] (shoes with cuts or cracks in the leather); Landgericht Landshut, Germany, 5 April
1995, Unilex (T-shirts which shrink by two sizes after the first washing).
21
22
CLOUT case No. 107 [Oberlandesgericht Innsbruck, Austria, 1 July 1994]; see also Tribunale di Busto Arsizio, Italy, 13 December
2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available on Unilex (declaration of
avoidance before waiting for result of seller’s attempt to cure would be contrary to good faith).
23
See CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1993, 3 March 1995]
(compressors with lower cooling capacity and higher power consumption than those contracted for, where buyer needed the compressors
for manufacturing its air conditioners); CLOUT case No.  150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine);
CLOUT case No. 315 [Cour de Cassation, France, 26 May 1999] (metal sheets unfit for the manufactureing processes of the buyer’s
customer); see also Tribunale di Busto Arsizio, Italy, 13 December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also available on Unilex (delivery of a machine totally unfit for the particular purpose that was made known to
the seller, and which was incapable of reaching the promised production level, represented a “serious and fundamental” breach of the
contract, since the promised production level had been an essential condition for the conclusion of the contract; the breach therefore
justified avoidance of the contract).
CLOUT case No. 150 [Cour de Cassation, France, 23 January 1996] (artificially sugared wine, forbidden under EU-law and national
laws); CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (artificially sugared wine).
24
25
CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], Unilex. See CLOUT case No. 597 [Oberlandesgericht Celle,
Germany, 10  March 2004] (see full text of the decision).
26
CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995].
CLOUT case No. 152 [Cour d’appel, Grenoble, France, 26 April 1995]; CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany,
31 January 1997].
27
28
See Digest, article 48.
29
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996].
30
Id.
31
Id.
32
CLOUT case No. 308 [Federal Court of Australia, 28 April 1995].
CLOUT case No. 313 [Cour d’appel, Grenoble, France, 21 October 1999] (seller retained pattern samples) (see full text of the
decision).
33
34
CLOUT case No. 2 [Oberlandesgericht Frankfurt a.M., Germany, 17 September 1991]; CLOUT case No. 154 [Cour d’appel, Grenoble, France, 22 February 1995]; CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997]; CLOUT case No.  217
[Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
35
But see also CLOUT case No. 133 [Oberlandesgericht München, Germany, 8 February 1995], where the court denied the buyer’s
right to declare the contract avoided after 2½ years even thoiugh the goods had not been delivered. The court based its decision on the
principle of good faith.
36
One court grappled with the question of when the reasonable time under article 49 (2) began to run where the buyer had reeived
delivery of allegedly-nonconfomring goods. It was unclear whether the lack of conformity arose during the seller’s production of the
goods as a result of transporting the goods (the buyer bore the risk of damage occurring during transportation), and the buyer arranged
to have experts examine the goods to determine the source of the problem. The court suggested that the reasonable time might begin
to run as soon as the buyer discovered the goods were defective, even before the experts had an opportunity to determine the cause: the
court noted that only examination by a judicial expert would definitively establish the source of the nonconformity, and thus the period
for declaring avoidance could not depend on the buyer being certain that the seller was responsible. The court did not rely solely on
this view, however, as it noted that the buyer’s avoidance was too late even if the reasonable time commenced when the last report by
the experts was issued. See CLOUT case No. 481 [Court d’ Appel Paris, France, 14 June 2001].
37
CLOUT case No. 124 [Bundesgerichtshof, Germany, 15 February 1995]; see also CLOUT case No. 83 [Oberlandesgericht München,
Germany, 2 March 1994] (four months).
38
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997].
39
CLOUT case No. 481 [Court d’ Appel Paris, France, 14 June 2001].
40
CLOUT case No. 165 [Oberlandesgericht Oldenburg, Germany, 1 February 1995].
41
CLOUT case No. 225 [Cour d’appel, Versailles, France, 29 January 1998].
42
CLOUT case No. 246 [Audiencia Provincial de Barcelona, Spain, 3 November 1997] (delayed).
CLOUT case No. 348 [Oberlandesgericht Hamburg, Germany, 26 November 1999] (see full text of the decision); see also Tribunale
di Busto Arsizio, Italy, 13 December 2001, published in Rivista di Diritto Internazionale Privato e Processuale, 2003, 150–155, also
available on Unilex (a “reasonable time” for art. 49 purposes differs from a “reasonable time” for art. 39 purposes both in starting point
and duration; the time for notice of non-conformity under article 39 begins to run as soon as the lack of conformity is discovered (or
ought to have been discovered), but avoidance can be declared only after it appears that the non-conformity amounts to a fundamental
breach that cannot be otherwise remedied).
43
44
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996] (see full text of the decision).
Part three. Sale of goods
165
Article 50
If the goods do not conform with the contract and whether or not the price has already
been paid, the buyer may reduce the price in the same proportion as the value that the
goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time. However, if the seller remedies any failure to
perform his obligations in accordance with article 37 or article 48 or if the buyer refuses
to accept performance by the seller in accordance with those articles, the buyer may not
reduce the price.
Overview
1. Article 50 provides for the remedy of price reduction
when the seller has delivered goods that do not conform
with the contract. In these circumstances, the buyer then
may reduce the price in proportion to the reduced value of
the goods. The remedy is, however, not available if the
seller has cured the defects in the goods under articles 37
or 48, or if the buyer has refused the seller the opportunity
for such cure.
Prerequisites for price reduction
2. Article 50 applies when goods that have been delivered
do not conform with the contract.1 Non-conformity is to
be understood in the sense of article 35, i.e., defects as to
quantity,2 quality, description (aliud) and packaging. In
addition, defects in documents relating to the goods can be
treated as a case of non-conformity.3 The remedy of price
reduction is, however, not available if the breach of contract
is based upon late delivery4 or the violation of any obligation of the seller other than the obligation to deliver conforming goods.
3. Price reduction applies whether the non-conformity constitutes a fundamental or a simple breach of contract, whether or
not the seller acted negligently, and whether or not the seller
was exempted from liability under article 79. The remedy does
not depend on whether the buyer has paid the price.5
4. Price reduction presupposes, however, that the buyer
has given notice of the lack of conformity of the goods in
accordance with article 39 (or 43).6 Without due notice the
buyer is not allowed to rely on the lack of conformity and
loses all remedies.7 Article 44 establishes an exception
where the buyer can reasonably excuse its failure to give
notice of defects, in which case the buyer retains the right
to reduce the price under article 50 (or to claim damages
other than damages for loss of profit).8
5. It has been observed that article 50 requires that the
buyer express its intention to reduce the price.9
6. The second sentence of Article 50 states the more or
less self-evident rule that the remedy of price reduction is
not available if the seller has remedied any lack of conformity either under article 37 (cure in case of early delivery) or under article 48 (cure after date for delivery). The
same result obtains if the buyer refuses to accept performance when the seller has offered cure in accordance with
articles 37 or 48.10
7. As provided in article 45  (2), an aggrieved buyer can
combine different remedies; consequently, the buyer can
claim price reduction along with a damages claim. However, where damages are claimed in combination with price
reduction, damages can only be awarded for loss other than
the reduced value of the goods, since this loss is already
reflected in the price reduction.11
Calculation of price reduction
8. The amount of price reduction must be calculated as
a proportion: the contract price is reduced in the same proportion as the value that the non-conforming delivered
goods bears to the value that conforming goods would
have. The relevant value is determined as of the date of
actual delivery at the place of delivery.12
Place of performance
9. The place of performance of the remedy of price reduction is where the goods were delivered.13
Notes
1
[Federal] Southern District Court of New York, 6 April 1994, Unilex; CLOUT case No. 377 [Landgericht Flensburg, Germany,
24  March 1999] (see full text of the decision).
2
Including the weight of the goods; see [Federal] Southern District Court of New York, 6 April 1994, Unilex.
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
3
Article 48, to which article 50 refers, covers the cure of non-conforming documents; see Digest of art. 48, para. 2.
4
Landgericht Düsseldorf, Germany, 5 March 1996, Unilex.
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 42, para. 5.
5
6
CLOUT case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland, 27 April 1992].
CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993]; CLOUT case No. 273 [Oberlandesgericht München,
Germany, 9 July 1997]; CLOUT case No. 303 [ArbitrationInternational Chamber of Commerce No. 7331 1994]; CLOUT case No. 343
[Landgericht Darmstadt, Germany, 9 May 2000] (see full text of the decision).
7
8
In this respect, see, e.g., CLOUT case No. 303 [ArbitrationInternational Chamber of Commerce No. 7331 1994]; CLOUT case
No.  273 [Oberlandesgericht München, Germany, 9  July 1997].
CLOUT case No. 83 [Oberlandesgericht München, Germany, 2 March 1994].
9
10
CLOUT case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997].
11
CLOUT case No. 248 [Schweizerisches Bundesgericht, Switzerland, 28 October 1998] (see full text of the decision).
CLOUT case No. 56 [Canton of Ticino Pretore di Locarno Campagna, Switzerland, 27 April 1992]; CLOUT case No. 175 [Oberlandesgericht Graz, Austria, 9 November 1995] (see full text of the decision).
12
13
CLOUT case No. 295 [Oberlandesgericht Hamm, Germany, 5 November 1997].
Part three. Sale of goods
167
Article 51
(1) If the seller delivers only a part of the goods or if only a part of the goods
delivered is in conformity with the contract, articles 46 to  50 apply in respect of the
part which is missing or which does not conform.
(2) The buyer may declare the contract avoided in its entirety only if the failure
to make delivery completely or in conformity with the contract amounts to a fundamental
breach of the contract.
Overview
1. Article 51 deals with partial non-delivery and delivery
of partially non-conforming goods. The general rule is that
the buyer’s remedies can be applied to that part of the
contract that was not performed. The rest of the contract
can remain unimpaired. In particular the entire contract
cannot be declared avoided unless the partial nonperformance amounts to a fundamental breach of the
entire contract.1
Prerequisites
2. Article 51 presupposes that the seller has breached the
contract either by delivering fewer goods than contracted
for or by delivering goods that, in part, do not conform
with the contract under article 35.2 the application of article  51 requires that the delivered goods consist of separable
parts, e.g., some tons of cucumber,3 a shipment of tiles,4
textiles,5 quantities of stainless steel wire,6 scaffold fittings7
or even a complete automatic assembly line for batteries
for which the contracted spare parts were missing.8 In case
of a defective piece of machinery, article 51 has been found
to apply when the piece forms an independent part of the
contracted-for goods.9
3. The availability of remedies pursuant to article 51 presupposes that the buyer has given notice of the lack of
conformity as required by article 39.10 This notice requirement applies in cases where the seller has delivered only
a part of the goods.11
Remedies for partial non-performance
4. With regard to a non-conforming part of delivered
goods, article 50 provides that the buyer is entitled to any
of the remedies referred to in articles 46-50. The requirements for these provisions to apply must, however, be satisfied in each case. Thus if the buyer wants to declare
avoidance with regard to a part of delivered goods that do
not conform with the contract then the lack of quality must
constitute a fundamental breach—i.e., the non-conforming
goods must be of no reasonable use to the buyer.12 On the
other hand, the fixing of an additional period of time for
the delivery of conforming goods cannot help establish a
right of avoidance because article  49  (1)  (b) applies only
in case of non-delivery, but not in case of delivery of defective goods.13 Partial delay in delivery does not generally
constitute a fundamental partial breach of contract, and
therefore does not entitle the buyer to avoid the part of the
cotract relating to the delayed portion. The buyer may,
however, fix an additional period of time for delivery of
the missing part, and may declare the contract partially
avoided when delivery is not effected during the period so
fixed (article 49 (1) (b)). Partial non-delivery by the contractual delivery date amounts to a fundamental breach with
regard to the missing part only if the buyer has a special
interest in delivery exactly on time, and if the seller could
foresee that the buyer would prefer non-delivery instead of
late delivery.14
5. Article 51  (1) refers only to the remedies provided for
in articles 46-50. This does not mean that the remedy of
damages, wich is authorized in article 45 (1) (b), is excluded.
On the contrary, this remedy remains unimpaired and can
be exercised in addition to or instead of the remedies referred
to in article 51  (1). Even if the buyer has lost its right to
declare a part of the contract avoided because of lapse of
time, it may still claim damages under article 74.15
Avoidance of the entire contract
(article 51 (2))
6. As provided in article 51  (2), in case of partial nondlievery or partial non-conforming delivery the buyer can
avoid the entire contract only if the seller’s breach constitutes a fundamental breach of the entire contract. Thus to
juistify avoidance of the whole contract the partial breach
must deprive the buyer of the main benefit of the whole
contract (article 25). Such an effect from a partial breach,
however, is the exception rather than the rule.16
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Notes
1
CLOUT case No. 302 [Arbitration—International Chamber of Commerce No. 7660 1994] (see full text of the decision).
2
Article 35, however, also covers delivery of a smaller quantity of goods than that contracted for.
3
CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993].
4
CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991].
5
CLOUT case No. 82 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994].
6
CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997].
7
CLOUT case No. 304 [Arbitration—International Chamber of Commerce No. 7531 1994].
8
CLOUT case No. 302 [Arbitration—International Chamber of Commerce No. 7660 1994].
9
Id.
CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993]; CLOUT case No. 50 [Landgericht Baden-Baden,
Germany, 14 August 1991].
10
11
CLOUT case No. 48 [Oberlandesgericht Düsseldorf, Germany, 8 January 1993].
See CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997] (parts of delivered steel wire were sub-standard and therefore
not useable for the buyer’s purposes) (see full text of the decision); for details compare the Digest for article 49, footnotes 16, 17.
12
13
See the Digest for article 49, footnote 21.
14
CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997].
CLOUT case No. 82 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994]; Tribunal of International Commercial Arbitration
at the Russian Federation Chamber of Commerce, Russian Federation, award in case No. 251/1993 of 23 November 1994, Unilex.
15
16
CLOUT case No. 302 [Arbitration—International Chamber of Commerce No. 7660 1994].
Part three. Sale of goods
169
Article 52
(1) If the seller delivers the goods before the date fixed, the buyer may take
delivery or refuse to take delivery.
(2) If the seller delivers a quantity of goods greater than that provided for in the
contract, the buyer may take delivery or refuse to take delivery of the excess quantity.
If the buyer takes delivery of all or part of the excess quantity, he must pay for it at
the contract rate.
Introduction
1. Even where the seller does more than is required by
the contract there is an issue of non-performance. Article  52
addresses two such situations—namely, if the seller delivers
goods too early (article 52 (1)) or delivers too many goods
(article 52 (2)). In both cases article 52 provides that the
buyer is entitled to refuse delivery of the goods. If the
buyer accepts a greater quantity of goods than that provided
for in the contract, article 52 (2) provides that the buyer is
bound to pay the contract price for the excess quantity.
Early delivery (article 52 (1))
2. If the seller delivers the goods before the time for delivery stipulated in the contract the buyer may refuse the tender. Early delivery occurs if the contract stipulates a certain
date or period at or during which delivery must be effected
(e.g., “delivery during the 36th week of the year”) and
delivery is made prior to that date. Under a term such as
“delivery until 1 September”, any delivery before that date
would be in accordance with the contract.1 If the buyer has
rightfully refused the goods because of early delivery, the
seller must redeliver the goods at the correct time.2 Pursuant
to article 86, if the buyer intends to reject goods delivered
early he may be responsible for the goods in the interim.3
3. If, however, the buyer takes over goods that are delivered early, the buyer is obliged to pay the contract price.4
Any remaining damage (additional storage costs and the
like) may be recovered according to article 45 (1) (b),
unless the acceptance of the early tendered goods amounts
to an agreement to modify the delivery date.5
4. The rules regarding early delivery also apply if documents relating to the goods are tendered prematurely.
Delivery of excess quantity
(article 52 (2))
5. If the seller delivers a greater quantity of goods than
stipulated, the buyer is entitled to reject the excess. According to case law, there is not a delivery of excess goods
where the contract allows for delivery “+/-10 per cent” and
delivery remains within those limits.6 If the buyer does not
wish to take and pay the contract price for excess goods
he must give notice of the incorrect quantity because it
constitutes a non-conformity to which the notice requirement of article 39 applies. After a rightful refusal to take
the excess quantity, the buyer must preserve the excess
goods pursuant to article 86. If the buyer takes all or part
of the excess quantity, however, it is obliged to pay at the
contract rate for the excess part.7 If the buyer cannot separately reject the excess quantity, the buyer can avoid the
entire contract if the delivery of the excess quantity amounts
to a fundamental breach of contract;8 if the buyer cannot
avoid and thus must take delivery of the excess, the buyer
must pay for it but (provided the notice requirement of
article 39 is satisfied) can claim compensation for any damages he suffers from the breach.9
Notes
1
See the Digest for article 33, para. 6.
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 44, para. 5.
2
3
Id., para. 4.
CLOUT case No. 141 [Arbitration-Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce
and Industry, Russian Federation, award in case No. 200/1994 of 25 April 1995] (dispatch, in mid-December, of chocolates for Christmas,
before buyer transmitted bank guarantee which was supposed to establish the delivery date; buyer obliged to pay full price).
4
5
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 44, para. 6.
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6
CLOUT case No. 341 [Ontario Superior Court of Justice, Canada, 31 August 1999].
7
Id. (see full text of the decision).
See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April
1980 (United Nations publication, Sales No.  E.81.IV.3), 44, para. 9.
8
9
Id.
Part three. Sale of goods
171
Part III, Chapter III
Obligations of the buyer (articles 53-65)
Overview
1. Chapter III of Part III of the Convention contains provisions addressing the buyer’s obligations under an international sales contract governed by the CISG. Both the
structure and the focus of the chapter parallel Chapter II
(“Obligations of the seller”, articles 30-52) of Part III. Thus
Chapter III open with a single provision describing in general terms the fundamental duties of the buyer (article 53).
This is followed by three sections that collect provisions
addressing those duties in greater detail: Section I, “Payment of the price” (articles 54-59), Section II, “Taking
delivery” (article 60), and Section III, “Remedies for breach
of contract by the buyer” (articles 61-65).
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Article 53
The buyer must pay the price for the goods and take delivery of them as required by
the contract and this Convention.
Introduction
1. Article 53 states the principal obligations of the buyer,
and serves as an introduction to the provisions of Chapter  III.
As the Convention does not define what constitutes a “sale
of goods”, article 53, in combination with article 30, also
sheds light on this matter.1 The principal obligations of the
buyer are to pay the price for and take delivery of the goods
“as required by the contract and this Convention”. From this
phrase, as well as from article 6 of the Convention, it follows
that, where the contract provides for the performance to take
place in a manner that differs from that set forth in the
Convention, the parties’ agreement prevails.
Other obligations of the buyer
2. According to the Convention, the contract may impose
on the buyer obligations other than paying the price and
taking delivery,2 such as an obligation to provide security
for payment of the price, an obligation to supply materials
needed for the manufacture or production of the goods (see
article 3  (1)), or an obligation to submit specifications
regarding the form, measurement or other features of the
goods (article  65).
Illustrations from case law
3. Because it merely states the obligations of the buyer—
which are treated more fully in subsequent provisions—
article 53 has raised no particular difficulties for the courts.
There have been numerous court decisions citing article 53
in connection with judgments requiring the buyer to pay
the price.3 Cases applying article 53 to other obligations of
the buyer are less common.4
Notes
1
Tribunale di Rimini, Italy, 26 November 2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/021126i3.
html; Kantonsgericht Schaffhausen, Switzerland, 25 February 2002, available on the Internet at
2
http://www.cisg-online.ch/cisg/urteile/723.htm; Cour d’appel de Colmar, France, 12 June 2001, available on the Internet at http://witz.
jura.uni sb.de/CISG/decisions/120601v.htm; Tribunal Cantonal de Vaud, Switzerland, 11 March 1996, available on the Internet at http://
www.cisg.law.pace.edu/cisg/wais/db/cases2/960311s1.html; CLOUT case No. 480 [Cour d’appel Colmar, France, 12 June 2001].
3
See articles 61  (1) and 62.
Landgericht Mönchengladbach, Germany, 15 July 2003, Internationales Handelsrecht 2003, 229; Landgericht Tübingen, Germany,
18  June 2003, Internationales Handelsrecht 2003, 236; CLOUT case No. 634 [Landgericht Berlin, Germany 21 March 2003]; Rechtbank
van Koophandel Veurne, Belgium, 19 March 2003, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2003-0319.htm; Hof van Beroep Gent, Belgium, 2 December 2002, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/
WK/2002-12-02.htm; Tribunale di Rimini, Italy, 26  November 2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/
db/cases2/021126i3.html; Landgericht Saarbrücken, Germany, 25 November 2002, available on the Internet at http://www.cisg-online.
ch/cisg/urteile/718.htm; Handelsgericht Aargau, Switzerland, 5  November 2002, available on the Internet at http://www.cisg-online.ch/
cisg/urteile/715.htm; Oberlandesgericht Köln, Germany, 14 October 2002, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/709.htm; Oberlandesgericht Rostock, Germany, 25  September 2002, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/672.htm; Landgericht Göttingen, Germany, 20 September 2002, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/655.htm; Oberlandesgericht Schleswig, Germany, 22 August 2002,available on the Internet at http://www.cisg.law.pace.edu/cisg/
wais/db/cases2/020822g2.html; Cámara Nacional de Apelaciones en lo Comercial de Buenos Aires, Argentina, 21 July 2002, available
on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020721a1.html; Landgericht Saarbrücken, Germany, 2 July 2002,
available on the Internet at http://www.cisg-online.ch/cisg/urteile/713.htm; Amtsgericht Viechtach, Germany, 11 April 2002, available on
the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020411g1.html; Landgericht München, Germany, 27 February 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/654.htm; Kantonsgericht Schaffhausen, Switzerland, 25  February 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/723.htm; Landgericht München, Germany, 20 February 2002, available on
the Internet at http://www.cisg-online.ch/cisg/urteile/712.htm; CLOUT case No. 432 [Landgericht Stendal, Germany, 12  October  2000],
also in Internationales Handelsrecht, 2001, 30; CLOUT case No. 327 [Kantonsgericht des Kantons Zug, Switzerland, 25 February 1999];
CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998] (see full text of the decision); CLOUT case No.  318
[Oberlandesgericht Celle, Germany, 2 September 1998]; CLOUT case No.  288 [Oberlandesgericht München, Germany, 28 January 1998];
CLOUT case No. 236 [Bundesgerichtshof, Germany, 23 July 1997]; CLOUT case No. 273 [Oberlandesgericht München, Germany,
4
Part three. Sale of goods
173
9  July 1997]; CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany, 24 April 1997]; ICC Court of Arbitration, Case No. 8716,
February 1997, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/978716i1.html ; CLOUT case No. 163
[Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary, 10 December 1996] (see full
text of the decision); CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July 1996]; Landgericht Duisburg, Germany,
17 April 1996, Recht der internationalen Wirtschaft, 1996, 774; CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996];
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation,
22  January 1996, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/960122r1.html#cabc ; Amtsgericht Wangen,
Germany, 8 March 1995, available on the Internet at http://www.cisg-online.ch/cisg/urteile/195.htm; CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany 17  September 1993] (see full text of the decision); CLOUT case No. 104 [Arbitration—International Chamber
of Commerce No. 7197 1993] (see full text of the decision); CLOUT case No. 26 [Arbitration—International Chamber of Commerce
No. 7153/1992] (see full text of the decision); CLOUT case No. 46 [Landgericht Aachen, Germany, 3 April 1990] (see full text of the
decision). See also CLOUT case No. 632 [[Federal] Bankruptcy Court, United States 10 April 2001] (holding that buyer’s obligation to
pay the price under CISG article 53 was a significant factor in determining whether title to goods had passed to the buyer. CLOUT case
No. 133 [Oberlandesgericht München, Germany, 8 February 1995].
Part three. Sale of goods
175
Section I of Part III, Chapter III
Payment of the price (articles 54-59)
Overview
1. Section I of Chapter III (“Obligations of the buyer”) in Part III (“Sale of goods”) of the Convention consists of six
articles addressing one of the fundamental buyer obligations described in article 53 of the CISG: the obligation to pay the
price. Although the amount of the price that the buyer must pay is usually specified in the contract, two articles in Section  I
contain rules governing the amount of the price in particular special circumstances: article 55 specifies a price when one
is not fixed or provided for in the contract, and article 56 specifies the way to determine the price when it is “fixed according to the weight of the goods”. The remaining four provisions in Section I relate to the manner of paying the price: they
include rules on the buyer’s obligation to take steps preparatory to and to comply with formalities required for paying the
price (article 54); provisions on the place of payment (article 57) and the time for payment (article 58); and an article
dispensing with the need for a formal demand for payment by the seller (article 59).
Relation to other parts
of the Convention
2. In terms of general subject matter, the provisions of Section I of Chapter III parallel those in Section I (“Delivery of
the goods and handing over of document”, articles 31-34) of Chapter II (“Obligations of the seller”). Thus just as articles  31
and 33 of that earlier section address the place and time at which a seller should perform its delivery obligations, articles  57
and 58 of the current section govern the place and time at which the buyer should perform its payment obligations. Article  55 of the current section has a special relation to article 14 (1) (which addresses what constitutes an offer to enter into
a contract for sale), as is discussed in the Digest for article 55.1 In some decisions, furthermore, article 57 (place for payment) has been associated with the provisions governing avoidance of contract, in particular the rule of article 81 (2) providing for restitutionary obligations upon avoidance.2 Some provisions in the current section have a special relation to
matters beyond the scope of the Convention. Thus article 54, which give the buyer responsibility for taking preliminary
steps necessary to effecting payment, interacts with non-Convention rules on letters of credit, security, bank guarantees,
and bills of exchange.3 Article 57, which governs the place at which the buyer should pay the price, has a special relationship to some jurisdictional rules.4
Notes
1
See the Digest for art. 55, paras. 1, 3-4.
2
See the Digest for art. 57, paras 6-8.
3
See the Digest for art 54, para. 1.
4
See the Digest for art. 57, paras. 4-5.
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Article 54
The buyer’s obligation to pay the price includes taking such steps and complying with
such formalities as may be required under the contract or any laws and regulations to
enable payment to be made.
Introduction
1. This provision deals with actions preparatory to payment of the price which are specified in the contract or in
applicable laws and regulations. For example, the contract
may provide for the opening of a letter of credit, the establishment of security for or a bank guarantee of payment,
or the acceptance of a bill of exchange. Preparatory actions
required under applicable laws or regulations might include,
for example, an administrative authorization needed to
transfer funds.
2. Article 54 has two important effects. First, unless otherwise specified in the contract article 54 assigns responsibility for the tasks it references to the buyer, who must
thus bear the costs thereof. Indeed, one court decision suggests that the costs associated with payment are generally
the responsibility of the buyer.1 Furthermore, the steps for
which the buyer is responsible under article 54 are obligations, violation of which permits the seller to resort to the
remedies specified in articles 61 et seq.; they are not considered merely “conduct in preparing to perform or in performing the contract” as described in article 71 (1)). Thus
failure to perform those steps constitutes a breach, not merely
a factor in a possible anticipatory breach of contract.2
Scope of the buyer’s obligations
3. The question arises whether article 54 merely obliges
the buyer to perform the steps necessary to satisfy the preconditions for payment, but does not make the buyer
responsible for the result, or whether the buyer breaches
his obligations if the necessary outcome is not attained. A
number of decisions follow the principle that the buyer is in
breach of an obligation to provide a letter of credit if he does
not deliver the letter of credit opened on behalf of the seller,
without inquiring into the efforts the buyer undertook.3
4. Questions arise under article 54 with regard to administrative measures that may be required under applicable
laws or regulations in order to effect payment. Under one
possible interpretation of article 54, a distinction should be
drawn between measures of a commercial nature, as to
which the buyer assumes a commitment to achieve the
needed result, and administrative measures, with regard to
which the buyer takes on only an obligation to employ best
efforts. The rationale for the distinction is that the buyer
cannot guarantee, for example, that administrative authorities will approve a transfer of funds, so that the buyer
should only be obliged to carry out the steps needed to
obtain the relevant administrative authorization. The argument against this distinction is that, under article 54, the
buyer is responsible as a matter of law if a prerequisite
to payment, whatever its nature, is not satisfied, subject
to the possibility of exemption under article 79 of the
Convention.
Currency of payment
5. Article 54 says nothing about the currency of payment. On this issue the intention of the parties is the
primary consideration (article 6), along with commercial
usages (article 9  (2)) and any practices the parties have
established between themselves (article 9  (1)). In those
cases where the currency of payment cannot be determined by reference to these considerations, the appropriate approach is unclear.
6. Most decisions refer to the currency of the seller’s
place of business or to the currency of the place where
payment is to be made.4 These decisions tend to rely on
the general principles on which the Convention is based
(article 7  (2)), and thus to define the currency of payment
as the currency where the seller’s place of business is
located, since this is generally the place where the obligation to pay the price is discharged (article 57) and the place
where delivery of the gods occurs (article 31  (c)). One
court, however, has held that the currency of payment
should be determined by the law applicable to matters
beyond the scope of the Convention.5
Notes
1
Landgericht Duisburg, Germany, 17 April 1996, Recht der Internationalen Wirtschaft, 1996, 774, concerning costs associated with
payment of the price by cheque.
2
CLOUT case No. 631 [Supreme Court of Queensland, Australia, 17 November 2000].
Part three. Sale of goods
177
3
Supreme Court of Queensland, Australia, 17 November 2000, available on the Internet at http://www.austlii.edu.au/au/cases/qld/
QSC/2000/421.html; CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (the buyer, however, was not deemed in
breach of its obligations because the seller failed to indicate the port of embarkation, and that fact was needed, under the contract, for
establishing the letter of credit); CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1993]; Xiamen
Intermediate People’s Court, China, 31 December 1992, abstract available on the Internet at http://www.unilex.info/case.cfm?pid=1&do
=case&id=212&step=Abstract. Similarly, it was decided in arbitration that a buyer who failed to effect payment for equipment delivered
was liable if he merely gave instructions to his bank to make a transfer to the seller, but had not ensured that the payment would in
fact be made in convertible currency: see CLOUT case No. 142 [Arbitration-Tribunal of International Commercial Arbitration at the
Russian Federation Chamber of Commerce and Industry, award No. 123/1992 of 17  October  1995].
4
See CLOUT case No. 80 [Kammergericht Berlin, Germany, 24 January 1994], (see full text of the decision) (in case of doubt, the
currency of payment is that of the place of payment); CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993],
(currency of the place where the seller has his place of business is the currency in which the price should be paid); CLOUT case No.  52
[Fovárosi Biróság, Hungary, 24 March 1992], (court compelled the buyer to pay the seller in the seller’s currency without stating a
reason). See also the Digest for art. 57, para. 3.
5
CLOUT case No. 255 [Tribunal Cantonal du Valais, Switzerland, 30 June 1998].
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Article 55
Where a contract has been validly concluded but does not expressly or implicitly fix or
make provision for determining the price, the parties are considered, in the absence of
any indication to the contrary, to have impliedly made reference to the price generally
charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.
Introduction
1. As is revealed by the Convention’s travaux préparatoires, the interplay of articles 14 and  55 is one of the most
difficult questions raised by the Convention.1
Priority of the intention of the parties
2. Court and arbitral decisions consistently hold that, in
determining the applicability of article  55 (as with other
provisions of the Convention), one must refer first and foremost to the intention of the parties. Article 55 does not
empower a judge or arbitrator to establish a price when the
price has already been determined,l or made determinable,
by the contracting parties.2 Article 55 of the Convention is
also inapplicable when the parties have made their contract
subject to subsequent agreement on the price.3
Salvage of a contract specifying no price
3. One court concluded that a proposal to sell aircraft
engines did not meet the requirements of article 14 of the
Convention because it did not include the price for all the
types of aircraft engines among which the buyer could
choose under the proposal, and that the contract allegedly
resulting from the proposal was therefore invalid.4 This
decision suggests that article 55 does not rescue a contract
that is invalid due to the absence of a price term, and that
article 14 of the Convention thus prevails over article 55.
Under this interpretation of article 55, the provision is
applicable only if the contract of sale was validly concluded
without a price, and under article 14 of the Convention a
price provision may be required to make the contract
valid.
4. On the other hand, one court invoked article 55 to
determine the price of raw materials where the price had
not been agreed upon beforehand by the parties.5 Arbitrators, confronted with the difficulties presented by articles  14
and 55, have also given precedence to article 55 and indicated a willingness to establish a missing price with a view
to rendering the contract effective.6
Determining the price under article 55
5. Where article 55 applies, the parties are presumed to
have intended “the price generally charged at the time of
the conclusion of the contract for such goods sold under
comparable circumstances in the trade concerned”. Implementing this provision should not be particularly difficult
when the goods consist of raw materials or semi-finished
products. The situation changes when the contract involves
manufactured products. Thus the Supreme Court of a State
concluded that the price of aircraft engines could not be
determined under article 55 because there was no market
price for the goods.7 It has also been held that a current
price for purposes of recovering damages under article 76
can be established using the methodology in article 55 for
determining the price in a contract that does not expressly
or implicitly fix or make provision for determining the
price.8
Notes
1
1980 Vienna Diplomatic Conference, Summary Records of Meeting of the First Committee, 8th  meeting, Monday, 17 March 1980.
See also the Digest for article 14, paras. 13-16.
2
CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000]; CLOUT case No. 151 [Cour d’appel, Grenoble, France,
26  February 1995].
3
ICC Court of Arbitration, award No. 8324, Journal du droit international, 1996, 1019; CLOUT case No. 106 [Oberster Gerichtshof,
Austria, 10 November 1994].
4
CLOUT case No. 139 [Arbitration-Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce
and Industry, Russian Federation, award in case No. 309/1993 of 3 March 1995].
5
CLOUT case No. 53 [Legfelsóbb Biróság, Hungary, 25 September 1992].
6
CLOUT case No. 215 [Bezirksgericht St. Gallen, Switzerland, 3 July 1997]. See on this case, Digest, article 14, No. 16.
Part three. Sale of goods
179
7
See ICC Court of Arbitration, 1999, award No.9187, Bulletin of the ICC International Court of Arbitration, 2001, 60 (“Sale without
prior fixing of a price is common in international trade, as is shown by the Vienna Convention of 11 April 1980 on the international
sale of goods (art.  55) [.  .  .]”).
8
CLOUT case No. 53 [Legfelsóbb Biróság, Hungary, 25 September 1992].
9
CLOUT case No. 595 [Oberlandesgericht München, Germany, 15 September 2004].
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Article 56
If the price is fixed according to the weight of the goods, in case of doubt it is to be
determined by the net weight.
Overview
1. Article 56 provides that, if the parties fix the price according to the weight of the goods, and it is unclear whether
they intended to refer to gross weight or net eight, it is net weight—the weight remaining after subtracting the weight of
the packaging—that governs the price. This is a rule of interpretation applied in the absence of contractual stipulations,
usages or practices established between the parties on the matter
2. Court decisions referring to article 56 have been extremely rare.1
Notes
1
See [Federal] Bankruptcy Court for the Northern District of Ohio, United States, 10 April 2001, Victoria Alloys, Inc. v. Fortis Bank
SA/NV, 2001 Bankr. LEXIS 309.
Part three. Sale of goods
181
Article 57
(1) If the buyer is not bound to pay the price at any other particular place, he
must pay it to the seller:
(a) At the seller’s place of business; or
(b) If the payment is to be made against the handing over of the goods or of
documents, at the place where the handing over takes place.
(2) The seller must bear any increase in the expenses incidental to payment which
is caused by a change in his place of business subsequent to the conclusion of the
contract.
Introduction
1. Article 57 (1) defines the place where payment is to
be made. Absent a different agreement between the parties,
the price is to be paid at the seller’s place of business
(article 57 (1) (a)) or, if the parties agreed that the price
would be payable against the handing over of the goods or
of documents, at the place where such handing over takes
place (article 57 (1) (b)). Several decisions have determined
that the burden of proof of payment of the price rests on
the buyer.1
2. After the conclusion of the contract, the seller might
change its place of business, which under article 57 (1) (a)
may be the place for payment. In that case, article 57 (2)
provides that any increase in the expenses incidental to
payment that is caused by the change is to be borne by the
seller.
Determination of the place of
payment of the price
3. Article 57  (1) has attracted a large amount of comment
in case law. The provision has been referred to, for example, in determining the currency of payment.2
4. Article 57  (1) plays an important role in the practice
of countries whose legal systems provide for jurisdictional
competence at the place of performance of obligations.3
This is the case in Europe, for example. Article  5.1 of the
1968 Brussels Convention, which is binding for the countries of the European Union and relates to jurisdiction and
the enforcement of judgements in civil and commercial
matters, permits the plaintiff to sue the defendant “in matters relating to a contract, in the courts for the place of
performance of the obligation in question”. This same provision was incorporated in the Convention of Lugano of
16 September 1988, which is binding on the countries of
the European Free Trade Association (EFTA). The combined effect of article 5.1 of the Brussels and Lugano Conventions and article 57 of the Sales Convention is that, with
respect to an international sale of goods governed by the
Convention, a seller can bring an action against a defaulting
buyer in the court having jurisdiction at the seller’s place
of business. This approach is prevalent in countries of the
European Union because the European Community Court
of Justice eliminated doubts as to its validity by confirming
that the place where the obligation to pay the price is to
be performed “must be determined on the basis of the substantive law provisions governing the obligation at issue
according to the rules of conflict of the jurisdiction in
which the action was brought, even if those rules indicate
that a unified substantive law, such as the 1964 Hague
Convention relating to the Uniform Law on the International Sale of Goods, must apply to the contract”.4 Decisions applying article 57 of the CISG Convention in
connection with the implementation of article 5.1 of the
Brussels5 and Lugano6 Conventions have been numerous.
5. On 1 March 2002, in the countries of the European
Union (with the exception of Denmark), Council Regulation No. 44/2001 of 22 December 2000 on jurisdiction and
the recognition and enforcement of judgments in civil and
commercial matters7 entered into force, replacing the Brussels Convention. For those European States article 57 of
the United Nations Convention on Contracts for the International Sale of Goods will thus cease to play the role it
has hitherto played in the determination of jurisdiction. In
fact, the question of special competence in contractual matters is substantially revised by the new text. Although the
prior basic rule is retained (article 5.1  (a)), the regulation
specifies, substantively, the place of performance for two
types of contracts—namely contracts for the sale of goods
and contracts for the provision of services—unless otherwise agreed between the parties (article 5.1  (b)). For sales
of goods, the place in question is “the place in a Member
State where, under the contract, the goods were delivered
or should have been delivered”. The aim of the authors
of this rule was to regroup such actions, whatever the
obligations at issue might be, and to avoid making it too
easy for the seller to sue the buyer before the courts of
the seller’s domicile or place of business. When the
place of delivery is not in a Member State, article 5.1  (b)
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
does not apply, in which case the basic rule of article  5.1  (a) of the Council Regulation is applicable and
article 57 of the CISG regains all its importance. Council
Regulation No. 44/2001 of 22 December 2000 applies
every time the defendant is domiciled (article 2) or has
its statutory seat, its central administration, or its principle place of business (article 60) in a Member State,
whatever its nationality. A similar rule exists in the 1968
Convention of Brussels (articles 2 and 53) and in the
1988 Convention of Lugano adopted by the member
states of the EFTA (articles  2 and 53).
Application of article 57 (1) to sums of
money other than the price
6. Case law is not uniform on the question whether the
rule of article  57  (1), establishing payment of the price at
the seller’s place of business as a default principle, should
also be applied to other monetary obligations arising out
of a contract of sale governed by the CISG, such as the
obligation of a party in breach to pay compensation, or a
seller’s obligation to return the sale price following avoidance of the contract.
7. Certain decisions on this question refer to the national
law governing the contract. Thus the Supreme Court of one
State held that article 57 of the Convention was not applicable to claims for restitution of the sale price following
amicable avoidance of the contract, and stated that the place
for bringing such claims should be determined by the law
applicable to the avoided contract.8 According to another
decision, article 57 does not establish a general principle
with regard to the place for restitution of the price following avoidance of a contract because the provision could be
interpreted as embodying the principle of payment at the
seller’s domicile, or of payment at the creditor’s domicile.9
These decisions seem to be based on the idea that the
solution lies in the applicable national law determined by
choice-of-law rules.
8. Decisions that resolve the issue by discovering and
applying a general principle of the Convention (see article  7  (2)) are more numerous. Thus in determining the
place for payment of compensation for non-conforming
goods a court has stated that “if the purchase price is payable at the place of business of the seller”, as provided in
article 57 (1) of the Convention, then “this indicates a general principle valid for other monetary claims as well”.10
Another court, in an action for restitution of excess payments received by the seller, stated that there was a general
principle under which “payment is to be made at the creditor’s domicile, a principle that is be extended to other international trade contracts under article 6.1.6 of the UNIDROIT
Principles”.11 The Supreme Court of another State, which
had previously adopted a different approach, decided that
the gap in the Convention with respect to the performance
of restitution obligations should be filled by reference to a
general principle of the Convention according to which “the
place for performance of restitution obligations should be
determined by transposing the primary obligations—
through a mirror effect—into restitution obligations”.12
Change in the seller’s place of business
9. By providing that the seller must bear any increase in
the expenses incidental to payment that is caused by a
change in its place of business subsequent to the conclusion
of the contract, article 57  (2) makes clear that the buyer must
pay the price at the seller’s new address. For this reason, the
seller must inform the buyer of the change in a timely manner. Under article 80 of the Convention the seller has no
right to rely on any delay in payment of the price that is
caused by late notification of the change of address.
10. Does article 57  (2) remain applicable when the seller
assigns the right to receive payment of the purchase price
to another party? According to one decision, assignment of
the right to receive the purchase price results in transferring
the place of payment from the business premises of the
assignor to those of the assignee.13
Notes
CLOUT case No. 273 [Oberlandesgericht München, Germany, 9 July 1997]; see also Court of Tijuana, Mexico, 14 July 2000, Internationales Handelsrecht, 2001, 38 (decided on the basis of Mexican procedural law).
1
2
See the Digest for art. 54, para. 6.
It is rare for article 57  (1) to be applied except in connection with the question of jurisdiction. See, however, CLOUT case No. 605
[Oberster Gerichtshof, Austria, 22 October 2001], also available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/011022a3.html; the Digest for art. 54, para. 6.
3
4
CLOUT case No. 298 [European Court of Justice, C-288/92, 29 June 1994].
See in particular Bundesgerichtshof, Germany, 30 April 2003, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/030430g1.html; Rechtbank van Koophandel Veurne, Belgium, 19 March 2003, available on the Internet at http://www.law.kuleuven.
ac.be/int/tradelaw/WK/2003-03-19.htm; Bundesgerichtshof, Germany, 2 October 2002, available on the Internet at http://www.cisg-online.
ch/cisg/urteile/700.htm; Hof van Beroep Gent, Belgium, 15 May 2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/
wais/db/cases2/020515b1.html; Hof van Beroep Gent, Belgium, 31 January 2002, available on the Internet at http://www.law.kuleuven.
ac.be/int/tradelaw/WK/2002-01-31.htm; Bundesgerichtshof, Germany, 7 November 2001, available on the Internet at http://www.cisg.law.
pace.edu/cisg/wais/db/cases2/011107g1.html; Cour de cassation, 1re  chambre civile, France, 26 June 2001, Recueil Dalloz, 2001, Jurisprudence, 2593; Landgericht Flensburg, Germany, 19 January 2001, available on the Internet at http://www.cisg-online.ch/cisg/urteile/619.
htm; CLOUT case No. 379 [Corte di Cassazione S.U., Italy, 14  December 1999]; CLOUT case No. 343 [Landgericht Darmstadt, Germany, 9 May 2000] (see full text of the decision); Landgericht Trier, Germany, 7 December 2000, Inter-nationales Handelsrecht, 2001,
35; CLOUT case No. 320 [Audencia Provincial de Barcelona, Spain, 7 June 1999] (see full text of the decision); CLOUT case No. 274
5
Part three. Sale of goods
183
[Oberlandesgericht Celle, Germany, 11 November 1998]; CLOUT case No. 223 [Cour d’appel, Paris, France, 15 October 1997] (see full
text of the decision); CLOUT case No. 287 [Oberlandesgericht München, Germany, 9 July 1997]; CLOUT case No. 284 [Oberlandesgericht Köln, Germany, 21 August 1997] (see full text of the decision); CLOUT case No. 162 [Østre Landsret, Denmark, 22 January
1996]; CLOUT case No. 205 [Cour d’appel, Grenoble, France, 23 October 1996]; Landgericht Siegen, Germany, 5 December 1995,
available on the Internet at http://www.cisg-online.ch/cisg/urteile/287.htm; Gerechtshof ’s-Hertogenbosch, the Netherlands, 9  October
1995, Nederlands International Privaatrecht 1996, No. 118; Oberlandesgericht München, Germany, 28 June 1995, available on the
Internet at http://www.cisg online.ch/cisg/urteile/406.htm; CLOUT case No. 153 [Cour d’appel, Grenoble, France, 29  March 1995] (see
full text of the decision); Rechtbank Middelburg, the Netherlands, 25 January 1995, Nederlands International Privaatrecht, 1996, No.  127;
Hof ’s-Hertogenbosch, 26 October 1994, Nederlands International Privaatrecht, 1995, No. 261; CLOUT case No. 156 [Cour d’appel,
Paris, France, 10 November 1993] (see full text of the decision) CLOUT case No 25 [Cour d’appel, Grenoble, France, 16 June 1993].
6
Handelsgericht Aargau, Switzerland, 5 November 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/715.htm;
Landgericht Freiburg, Germany, 26 April 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/690.htm; CLOUT case
No. 221 [Zivilgericht des Kantons Basel-Stadt, Switzerland, 3 December 1997]; CLOUT case No. 194 [Bundesgericht, Switzerland, 18
January, 1996].
7
Official Journal of the European Community, Legislation, 16 January 2001.
CLOUT case No. 421 [Oberster Gerichtshof, Austria, 10 March 1998], also in Österreichische Zeitschrift für Rechtsvergleichung,
1998, 161.
8
9
CLOUT case No. 312 [Cour d’appel, Paris, France, 14 January 1998].
CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993]. To similar effect, see Oberster Gerichtshof, Austria,
18  December 2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/021218a3.html; Landgericht Gießen,
Germany, 17 December 2002, Internationales Handelsrecht, 2003, 276.
10
11
CLOUT case No. 205 [Cour d’appel, Grenoble, France 23 October 1996] (see full text of the decision).
12
CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], Transportrecht-Internationales Handelsrecht, 1999, 48.
13
CLOUT case No. 274 [Oberlandesgericht Celle, Germany, 11 November 1998].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 58
(1) If the buyer is not bound to pay the price at any other specific time, he must
pay it when the seller places either the goods or documents controlling their disposition
at the buyer’s disposal in accordance with the contract and this Convention. The seller
may make such payment a condition for handing over the goods or documents.
(2) If the contract involves carriage of the goods, the seller may dispatch the goods
on terms whereby the goods, or documents controlling their disposition, will not be
handed over to the buyer except against payment of the price.
(3) The buyer is not bound to pay the price until he has had an opportunity to
examine the goods, unless the procedures for delivery or payment agreed upon by the
parties are inconsistent with his having such an opportunity.
Introduction
1. Article 58 defines the time when the price becomes
due in the absence of any particular contractual stipulation
on the question.1 Where it fixes the time at which payment
of the price may be demanded, article 58 also determines
the point in time at which interest based on article 78 of
the Convention starts to accrue, as has been noted in a
number of decisions.2
Simultaneous payment of the price and
handing over of the goods or
documents (article 58 (1))
2. The Convention does not require the seller, in the
absence of a particular agreement on the subject, to grant
credit to the buyer. Article 58  (1) establishes a default rule
of simultaneous handing over of the goods (or of documents controlling their disposition) and payment of the
price: the buyer must pay the price when the seller places
either the goods or documents controlling their disposition
at his disposal. As stated in the second sentence of article  58  (1), the seller may refuse to hand over the goods or
documents controlling their disposition to the buyer if the
latter does not pay the price at that time. The seller thus
has the right to retain the goods (or the documents controlling their disposition) in these circumstances.
3. The inverse of the principle established in article 58  (1)
also applies: unless otherwise agreed, the buyer is not
bound to pay the price until the goods or documents controlling their disposition have been handed over. Article  58  (3) grants the buyer the complementary right to
examine the goods prior to payment, although only to the
extent that contractual provisions concerning delivery and
the modalities of payment are consistent with the right.3
4. Contract terms, international usages and practices
established between the parties may all result in derogation
from the rule of simultaneous exchange of goods and price,
a rule that applies (according to article 58 (1)) only “if the
buyer is not bound to pay the price at any other specific
time”. One court found that the parties had derogated from
the principle of simultaneous performance in a case where
they had agreed on payment of 30 per cent of the price
upon ordering of the goods, 30 per cent at the beginning
of assembly, 30 per cent upon completion of installation,
and the final 10 per cent due after successful start-up of
the facility.4
5. The place for handing over the goods or documents
depends on the relevant terms of the contract and, where
no such terms exist, on the rules established by the Convention (article 31). For the sale of goods at the place specified
in article 31  (b) or (c)), the price becomes payable when
the seller has placed the goods at the disposal of the buyer
in the agreed place or at the seller’s place of business, and
has given the buyer the opportunity to examine the goods.
Article 58  (2) covers the case of sales involving a contract
of carriage.5
6. Article 58  (1), like article 58  (2), places delivery of the
goods and handing over of documents controlling their disposition on an equal level, on the grounds that they will
have the same effect. One court found that handing documents controlling the disposition of the goods over to the
buyer caused the price to become due, as provided in article  58  (1).6 The difficulty is determining exactly what is
meant by “documents controlling the disposition of the
goods”. It has been held that certificates of origin and quality,7 as well as customs documents,8 do not constitute documents controlling the disposition of the goods within the
meaning of article 58  (1), and that their non-delivery therefore did not justify a buyer’s refusal to pay the price.
Part three. Sale of goods
185
Sales involving a contract of carriage
(article 58 (2))
The buyer’s right to examine the goods
in advance (article 58 (3))
7. Article 58  (2) deals with a sale involving a contract
with a third party to transport the goods. Under the provision, the seller may dispatch the goods on terms whereby
the goods, or the documents controlling their disposition,
will not be handed over to the buyer except against payment of the price. Thus, article 58  (2) does not entitle the
seller to condition handing over the goods on advance payment of the price by the buyer, in the absence of a particular contractual provision to that effect. Thus absent an
agreement otherwise, the buyer is not required to pay the
price until the moment when the goods or documents controlling their disposition are handed over to him by the
carrier.
8. In principle, unless the buyer agrees to payment in
advance it is not bound to pay the price until afforded an
opportunity to examine the goods. The right to prior examination may be excluded by a contractual stipulation to that
effect or by modalities of delivery or payment that are
incompatible with such examination, such as clauses involving “payment against handing over of documents” or “payment against handing over of the delivery slip”.
9. Article 58 (3) says nothing about whether the buyer is
entitled to suspend payment of the price if examination
reveals that the goods are not in conformity with the contract. No court decisions have yet addressed this issue.
Notes
Landgericht Mönchengladbach, Germany, 15 July 2003, Internationales Handelsrecht 2003, 229; Kantonsgericht Schaffhausen,
Switzerland, 25 February 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/723.htm; CLOUT case No. 197 [Tribunal
cantonal du Valais, Switzerland, 20 December 1994].
1
2
See Landgericht Mönchengladbach, Germany, 15 July 2003, Internationales Handelsrecht 2003, 229; Amtsgericht Viechtach, Germany,
11 April 2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020411g1.html; CLOUT case No. 228 [Oberlandesgericht Rostock, Germany, 27 July 1995]; CLOUT case No. 123 [Bundesgerichtshof, Germany, 8 March 1995] (see full text of
the decision); CLOUT case No.  79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994] (see full text of the decision); CLOUT
case No. 1 [Oberlandesgericht Frankfurt a.M., Germany, 13 June 1991] (see full text of the decision).
3
See infra, para. 8 et seq.
CLOUT case No. 194 [Bundesgericht, Switzerland, 18 January 1996] (see full text of the decision). See also Handelsgericht Aargau,
Switzerland, 5 November 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/715.htm.
4
5
See infra, para. 7.
6
CLOUT case No. 216 [Kantonsgericht St. Gallen, Switzerland, 12 August 1997].
7
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996].
8
CLOUT case No. 216 [Kantonsgericht St. Gallen, Switzerland, 12 August 1997].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 59
The buyer must pay the price on the date fixed by or determinable from the contract
and this Convention without the need for any request or compliance with any formality
on the part of the seller.
Dispensing with formalities prior to
payment of the price
1. Under article 59 the buyer must pay the price as soon
as it is becomes due without the need for any notice or
compliance with any other formality by the seller.1 As a
result, one decision has noted, if the buyer defaults on its
obligation to pay the price the seller can resort to the remedies provided under the Convention, and without prior
demand for payment.2 Furthermore, the interest provided
for under article 78 begins to accumulate as soon as the
price becomes due.3
Dispensing with formalities prior to
settlement of other monetary
obligations
2. It has been asserted that article 59 embodies a general
principle (within the meaning of article 7  (2)) that is valid
for any and all monetary claims by one party to a sales
contract against the other. Such claims would include those
for restitution of the price following avoidance of the contract, for payment of compensation, and for repayment of
sums expended for conservation of the goods (see articles 85-86). No decisions have yet addressed this issue.
Notes
1
For applications of this principle, see Landgericht Berlin, Germany, 21 March 2003, available on the Internet at http://www.cisg.law.
pace.edu/cisg/wais/db/cases2/030321g1.html; Handelsgericht Aargau, Switzerland, 5 November 2002, available on the Internet at
http://www.cisg-online.ch/cisg/urteile/715.htm; Cámara Nacional de Apelaciones en lo Comercial de Buenos Aires, Argentina, 21 July
2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020721a1.html; Kantonsgericht Schaffhausen,
Switzerland, 25 February 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/723.htm; CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also in Internationales Handelsrecht, 2001, 30; CLOUT case No. 297 [Oberlandesgericht
München Germany 21 January 1998] (see full text of the decision); CLOUT case No. 273 [Oberlandesgericht München Germany 9 July
1997]; CLOUT case No. 163 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
10 December 1996] (see full text of the decision); Amtsgericht Augsburg, Germany, 29  January 1996, available on the Internet at
http://www.cisg-online.ch/cisg/urteile/172.htm; CLOUT case No. 197 [Tribunal Cantonal Valais, Switzerland, 20 December 1994] (see
full text of the decision); Landgericht Hannover, Germany, 1 December 1993, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/244.htm; Amtsgericht Ludwigsburg, Germany, 21  December 1990, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/17.htm; CLOUT case No. 7 [Amtsgericht Oldenburg in Holstein, Germany, 24 April 1990] (see full text of the decision); CLOUT
case No. 46 [Landgericht Aachen, Germany, 3 April 1990] (see full text of the decision).
2
CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see full text of the decision).
See, e.g., Oberlandesgericht Rostock, Germany, 25 September 2002, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/672.htm (see also, in an implicit manner, Tribunal de commerce de Namur, Belgium, 15 January 2002, available on the Internet
at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2002-01-15.htm); CLOUT case No. 275 [Oberlandesgericht Düsseldorf, Germany,
24 April 1997]; CLOUT case No. 409 [Landgericht Kassel, Germany, 15  February 1996], also available on the Internet at http://www.
cisg-online.ch/cisg/urteile/190.htm; Landgericht München, Germany, 25 January 1996, available on the Internet at http://www.cisg-online.
ch/cisg/urteile/278.htm; Amtsgericht Kehl, Germany, 6 October 1995, Recht der internationalen Wirtschaft, 1996, 957; CLOUT case No.
410 [Landgericht Alsfeld, Germany, 12 May 1995]; CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18  January 1994]
(see full text of the decision); Landgericht Berlin, Germany, 6  October 1992, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/173.htm; Landgericht Mönchengladbach, Germany, 22 May 1992, available on the Internet at http://www.cisg-online.ch/cisg/
urteile/56.htm; Pretore della giurisdizione di Locarno Campagna, Switzerland, 16 December 1991, Schweizerische Zeitschrift für internationales und europäisches Recht, 1993, 665; CLOUT case No. 7 [Amtsgericht Oldenburg in Holstein, Germany, 24 April 1990] (see
full text of the decision).
3
Part three. Sale of goods
187
Section II of Part III, Chapter III
Taking delivery (article 60)
Overview
1. The second section (“Taking delivery”) of Chapter III of Part III consists of a single provision (article 60) that describes
the constituent aspects of the remaining fundamental obligation of the buyer described in Article 53—the obligation to take
delivery of the goods.
Relation to other parts of
the Convention
2. Several aspects of the buyer’s obligation to take delivery are not addressed in Section II and instead are controlled by
provisions governing the seller’s obligation to make delivery.1 Thus article 31, which regulates the place for seller to make
delivery, and article 33, which governs the time for seller to deliver, presumably apply also to the buyer’s obligation to
take delivery.
Notes
1
These provisions are found in Section I of Chapter II of Part III: “Delivery of the goods and handing over of documents”
(articles  31-34).
188
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 60
The buyer’s obligation to take delivery consists:
(a) In doing all the acts which could reasonably be expected of him in order to
enable the seller to make delivery; and
(b) In taking over the goods
Introduction
1. Article 60 defines the components of the buyer’s obligation to take delivery of the goods, one of the two basic
obligations of the buyer set forth in article 53. The obligation to take delivery involves the two elements described
in the provision.
Duty to cooperate
2. Article 60  (a) imposes on the buyer a duty to cooperate: the buyer must “do all the acts which could reasonably
be expected of him in order to enable the seller to make
delivery”.1 The specific content of this duty to cooperate
will vary with the terms of the contract. To illustrate the
operation of article 60  (a), if the place of delivery is the
buyer’s place of business, he must ensure that the seller
has access to those premises; and if the seller is required
to, e.g., install equipment, the site must be appropriately
prepared for that purpose.
Buyer’s duty to take over the goods
3. Article 60  (b) sets out the second element of the buyer’s obligation to take delivery, namely the duty to take
over the goods at the place where the seller is to deliver
them.2 The arrangements for taking over the goods depend
on the form of delivery agreed upon by the parties. For
example, when the obligation to deliver consists in putting
the goods at the disposal of the buyer in the seller’s place
of business (article 31  (c)), the buyer must either remove
the goods or have them removed by a third party of its
own choice.
Right to reject the goods
4. Article 60 does not specify when the buyer is entitled
to reject the goods. Other articles of the Convention provides for two specific cases: where the seller delivers before
the fixed date for delivery (article 52  (1)), and where the
seller delivers a quantity of goods greater than that provided for in the contract (article 52  (2)). In addition, the
buyer has the right to reject the goods if the seller commits
a fundamental breach of contract (defined in article 25),
which gives the buyer the right to declare the contract
avoided (article 49  (1)  (a)) or to demand delivery of substitute goods (article  46  (2)). The buyer also has a right to
avoid (and thus a right to reject delivery) if the seller failed
to deliver within an additional time period set in accordance
with article 47 (see article 49 (1) (b)). As was noted in one
decision, however, the buyer is required to take delivery of
the goods if the seller fails to perform its obligations but
the breach is not a fundamental breach.3 If the buyer intends
to reject goods he is required to take reasonable steps to
preserve them, and may even be obligated to take possession
of the goods for this purpose, but he is entitled to reimbursement for the expenses of preservation (article 86).
Notes
1
US District Court for the Southern District of New York, United States, 10 May 2002, available on the Internet at http://www.cisg.
law.pace.edu/cisg/wais/db/cases2/020510u1.html.
2
CLOUT case No. 47 [Landgericht Aachen, Germany, 14 May 1993] (see full text of the decision).
3
CLOUT case No. 79 [Oberlandesgericht Frankfurt a.M., Germany, 18 January 1994] (see full text of the decision).
Part three. Sale of goods
189
Section III of Part III, Chapter III
Remedies for breach of contract by the buyer (articles 61-65)
Overview
1. The remedies available to a seller that has suffered a
breach of contract by the buyer are addressed in Section  III
of Chapter III of Part III. The first provision in the section,
article 61, catalogues those remedies and authorizes an
aggrieved seller to resort to them. The remaining provisions
of the section address particular remedies or prerequisites
to remedies: the seller’s right to require the buyer to perform (article 62), the seller’s right to set an additional
period for the buyer’s performance (article 63), the seller’s
right to avoid the contract (article 64), and the seller’s right
to set specifications if the buyer fails to do so in timely
fashion (article 65).
Relation to other parts of
the Convention
2. The subject matter of the current section—“Remedies
for breach of contract by the buyer”—obviously parallels
that of Section III of Chapter II of Part III—“Remedies for
breach of contract by the seller” (articles 45-52). Many
individual provisions within these sections form matched
pairs. Thus article 61, which catalogs the seller’s remedies,
closely parallels article 45, which catalogs the buyer’s remedies. Other provisions in the current section that have
analogues in the section on buyer’s remedies include article  62, seller’s right to require buyer’s performance (parallel to article 46); article 63, seller’s right to fix an additional
period for buyer to perform (parallel to article 47); and
article 64, seller right to avoid the contract (parallel to
article 49).
3. As was the case with the provisions on buyers’ remedies,1 the articles governing sellers’ remedies operate in
conjunction with a variety of provisions outside the current
section. Thus the seller’s right to require performance by
the buyer is subject to the rule in article 28 relieving a
court from the obligation to order specific performance in
circumstances in which it would not do so under its own
law. The authorization in article 61 (1) (b) for a seller to
claim damages for a buyer’s breach operates in connection
with (and, indeed, expressly refers to) articles 74-76, which
specify how damages are to be measured. Article 49, stating
when an aggrieved seller can avoid the contract, is part of
a network of provisions that address avoidance, including
the definition of fundamental breach (article 25), the
requirement of notice of avoidance (article 26), provisions
governing avoidance in certain special circumstances (articles 72 and 73), measures of damages available only if the
contract has been avoided (articles 75 and 76), and the
provisions of Section V of Part III, Chapter V on “effects
of avoidance”.
Notes
1
See para. 3 of the Introduction to Part III, Chapter II, Section III in the current Digest.
190
UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 61
(1) If the buyer fails to perform any of his obligations under the contract or this
Convention, the seller may:
(a) Exercise the rights provided in articles 62 to 65;
(b) Claim damages as provided in articles 74 to 77.
(2) The seller is not deprived of any right he may have to claim damages by
exercising his right to other remedies.
(3) No period of grace may be granted to the buyer by a court or arbitral tribunal
when the seller resorts to a remedy for breach of contract.
Remedies available to the seller
(Article 61 (1))
1. Article 61 (1) describes in general terms the various
remedies available to the seller when the buyer does not
perform one of its obligations. In stating that the seller may
“exercise the rights provided in articles 62 to 65”, article  61  (1)  (a) merely refers to these provisions without
independently giving them legal force: each of the referenced provisions itself authorizes an aggrieved seller to
exercise the rights described therein, so that those rights
would be available to the seller even absent the reference
in article  61  (1)  (a).1 On the other hand, in providing that
the seller may “claim damages as provided in articles 74
to 77”, article 61  (1)  (b) provides the legal basis for the
seller’s right to claim such compensation; articles 74 to 77
merely specify the way in which damages, once they are
found to be awardable, are to be measured. It is thus
correct to cite article 61 (1)  (b) as the source of a seller’s
right to claim damages, as a number of court and arbitrational decisions have done,2 and not to refer merely to, e.g.,
article 74 of the Convention.
2. Failure on the part of the buyer to perform any one of
its obligations is the only prerequisite for recourse to the
remedies referred to in article 61 (1). Thus, as one decision
stated, an aggrieved seller’s recourse to remedies is not
subject to a requirement that the seller prove the buyer was
at fault.3
3. Article 61 (1) mentions only the principal remedies
available to an aggrieved seller. Other remedies in addition
to those referred to in this provision may be available when
a seller suffers a breach by the buyer. These remedies are
set out in articles 71, 72, 73, 78 and 88 of the
Convention.
4. As reflected in case law, the main difficulty in applying
article 61 (1) arises in cases in which the contract of sale
imposes on the buyer obligations not provided for by the
Convention. As suggested by the heading of the section of
the Convention in which article 61 appears (Section III of
Part III, Chapter III—“Remedies for breach of contract by
the buyer”), failure by the buyer to perform any of its
obligations gives the seller recourse to the remedies provided in the Convention, even when the failure relates to
a contractual obligation created by an exercise of party
autonomy. Thus in these cases there is no need to look to
the national law governing the contract in order to determine the seller’s remedies, as the approach adopted in several decisions confirms.4 In one decision, however, the court
resorted to national law.5
Claiming damages in combination with
other remedies (article 61 (2))
5. Article 61 (2) provides that the seller is not deprived
of any right to claim damages by choosing to exercise its
right to other remedies. This provision is contrary to the
legal tradition of certain countries, including that of Germany before the reform of the law of obligations which
entered into force on 1  January 2002 and which authorized
combined remedies.6
Refusal of a period of grace
(article 61 (3))
6. Under article 61 (3), a judge or arbitrator is deprived of
the power to grant the buyer a period of grace for performance of its obligations, including the obligation to pay the
price. The forbidden measures were judged contrary to the
best interests of international trade.7 Only the seller can grant
the buyer an extension of time for performance.8 An issue
yet to be resolved is whether article 61 (3) creates an obstacle
to the application of insolvency laws that grant a defaulting
buyer a period of grace for making payment.9
Part three. Sale of goods
191
Notes
1
Article 61 (1) (a) is, nevertheless, cited in some decisions: Landgericht Mönchengladbach, Germany, 15 July 2003, Internationales
Handelsrecht 2003, 229; Kantonsgericht Zug, Switzerland, 12 December 2002, available on the Internet at http://www.cisg-online.ch/
cisg/urteile/720.htm; Handelsgericht St. Gallen, Switzerland, 3 December 2002, available on the Internet at http://www.cisg-online.ch/
cisg/urteile/727.htm; Cámara Nacional de Apelaciones en lo Comercial de Buenos Aires, Argentina, 21 July 2002, available on the
Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/020721a1.html.
See Landgericht Berlin, Germany, 21 March 2003, available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/
cases2/030321g1.html; Cour de Justice, Genève, Switzerland, 13 September 2002, available on the Internet at http://www.cisg-online.ch/
cisg/urteile/722.htm; Cour d’appel de Colmar, France, 12 June 2001, available on the Internet at http://witz.jura.uni-sb.de/CISG/
decisions/120601v.htm; CLOUT case No. 169 [Oberlandesgericht Düsseldorf, Germany, 11 July 1996]; CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg 21 March, 21 June 1996]; CLOUT case No. 47 [Landgericht Aachen, Germany,
14 May 1993]; CLOUT case No. 227 [Oberlandesgericht Hamm, Germany, 22 September 1992].
2
3
CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (see full text of the decision).
See CLOUT case No. 154 [Cour d’appel, Grenoble, France, 22 February 1995] (breach of a re-export prohibition) (see full text of
the decision); CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997] (violation of an exclusivity
agreement); CLOUT case No. 311 [Oberlandesgericht Köln, Germany, 8 January 1997] (breach of an agreement to correct a lack of
conformity within an agreed period of time); CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1993]
(failure to open a letter of credit); CLOUT case No. 261 [Berzirksgericht der Sanne, Switzerland, 20 February 1997]; CLOUT case
No.  631 [Supreme Court of Queensland, Australia, [2000] QSC 421 (17 November 2000)].
4
5
Bundesgerichtshof, Germany, 5 February 1997, Neue Juristische Wochenschrift, 1997, 1578.
German courts have succeeded in departing from their national law and granting damages in conjunction with other remedies such
as avoidance of contract; see the following decisions (applying article  45 (2), which with respect to buyer’s remedies incorporates the
same principle as article 61 (2): CLOUT case No. 348 [Oberlandesgericht Hamburg, Germany, 26  November 1999]; CLOUT case
No. 345 [Landgericht Heilbronn, Germany, 15 September 1997]; Landgericht Landshut, Germany, 5 April 1995, available on the Internet
at http://www.cisg-online.ch/cisg/urteile/193.htm; Landgericht München, Germany, 20 March 1995, Recht der internationalen Wirtschaft,
1996, 688; CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991]; implicitly, see CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997].
6
7
United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March–11 April 1980, Official Records,
Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981,
p.  48.
8
For the seller’s right to fix an additional period of time for the buyer to perform, see article 63.
One court avoided this question by holding that the contract in question was a distribution agreement not governed by the CISG. See
CLOUT case No. 187 [Federal District Court, Southern District of New York, United States, 23 July 1997].
9
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 62
The seller may require the buyer to pay the price, take delivery or perform his other
obligations, unless the seller has resorted to a remedy which is inconsistent with this
requirement.
Limitations on the seller’s right
to require performance
Overview
1. Article 62 entitles the seller to require the buyer to
perform its obligations. This remedy is generally recognised in civil law systems, whereas common law systems
generally allow for the remedy (often under the designation
“specific performance”) only in limited circumstances.1
2. Article 62 is a remedy for sellers who have a special
interest in performance by the buyer, particularly in performance of the obligation to take delivery of the goods.
Examples of recourse to this remedy where a buyer has
refused to take delivery, however, are rare in case law.2
Cases in which article 62 is invoked as a remedy for the
buyer’s failure to pay the purchase price, on the other hand,
are numerous.3
3. The right to require performance under article 62 is
subject to two kinds of limitations. One such limitation is
expressed in article 62 itself: a seller is deprived of the
right if he has resorted to a remedy that is inconsistent with
requiring performance, as where the seller has declared the
contract avoided (article 64) or fixed an additional period
of time for performance (article 63). The second limitation
derives from article 28 of the Convention, under which a
court is not bound to order specific performance on behalf
of a seller, even if that would otherwise be required under
article 62, if the court would not do so under its domestic
law in respect of similar contracts not governed by the
Convention.
Notes
1
For further comments on matter, see the Digest for article 28, para 1.
For a general statement on the remedy, see CLOUT case No. 133 [Oberlandesgericht München, Germany, 8  February 1995] (see full
text of the decision).
2
3
See Landgericht Mönchengladbach, Germany, 15 July 2003, Internationales Handelsrecht 2003, 229; Hof van Beroep Gent, Belgium,
2 December 2002, available on the Internet at http://www.law.kuleuven.ac.be/int/tradelaw/WK/2002-12-02.htm; Cámara Nacional de
Apelaciones en lo Comercial de Buenos Aires, Argentina, 21 July 2002, available on the Internet at http://www.cisg.law.pace.edu/cisg/
wais/db/cases2/020721a1.html; Landgericht München, Germany, 27 February 2002, available on the Internet at http://www.cisg-online.
ch/cisg/urteile/654.htm; CLOUT case No. 344 [Landgericht Erfurt, Germany, 29 July 1998]; CLOUT case No. 273 [Oberlandesgericht
München, Germany, 9 July 1997]; CLOUT case No. 376 [Landgericht Bielefeld, Germany, 2 August 1996]; CLOUT case No. 135
[Oberlandesgericht Frankfurt a.M., Germany, 31 March 1995]; CLOUT case No. 134 [Oberlandesgericht München, Germany, 8 March
1995]; CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1993].
Part three. Sale of goods
193
Article 63
(1) The seller may fix an additional period of time of reasonable length for performance by the buyer of his obligations.
(2) Unless the seller has received notice from the buyer that he will not perform
within the period so fixed, the seller may not, during that period, resort to any remedy
for breach of contract. However, the seller is not deprived thereby of any right he may
have to claim damages for delay in performance.
Introduction
1. In permitting the seller to fix an additional period
of time for the buyer to perform, article 63 grants the
seller a right equivalent to that granted to the buyer in
article 47: the two provisions are conceived in the same
fashion and worded in comparable terms. The principal
purpose of article 63, parallel to that of article 47, is to
clarify the situation that arises when a buyer has not
performed one of his fundamental obligations—to pay
the price or to take delivery of the good—in the required
time: if a seller facing this situation fixes an additional
period of time, pursuant to article 63, for the buyer to
perform, and the additional period elapses without result,
the seller is entitled to declare the contract avoided without having to prove that the buyer’s delay in performance
is a fundamental breach of contract (article 64 (1) (b)).
Thus article 63 is especially useful when it is unclear
whether the buyer’s delay has become a fundamental
breach.1
2. Article 63 (1) requires that the additional period of
time fixed by the seller be of reasonable length. Decisions
addressing what constitutes a reasonable length of time are
rare.2 Article 63 (2) specifies that, during the additional
period that a seller has fixed he may not resort to remedies
for the buyer’s breach (although he retains the right to
claim damages resulting from the buyer’s delay); this limitation does not apply, however, if the buyer declares that
he will not perform within the additional period.
Illustrations of recourse to
an additional period of time
3. Sellers have in fact invoked article 63 and fixed an
additional period of time for the buyer to perform, thereby
giving tribunals the opportunity to apply the provision.
Examples in case law include granting an additional period
to pay the price,3 to secure issuance of a letter of credit,4
and to take delivery of the goods.5
Notes
1
CLOUT case No. 243 [Cour d’appel, Grenoble, France, 4 February 1999].
CLOUT case No. 645 [Corte di Appello di Milano, Italy, 11 December 1998], available on the Internet at http://www.cisg.law.pace.
edu/cisg/wais/db/cases2/ 981211i3.html.
2
3
Oberster Gerichtshof, Austria, 28 April 2000, also available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/
000428a3.html.
4
CLOUT case No. 261 [Bezirksgericht der Sanne, Switzerland, 20 February 1997]; CLOUT case No. 301 [Arbitration—International
Chamber of Commerce No. 7585 1992]; Supreme Court of Queensland, Australia, 17 November 2000, available on the Internet at
http://www.austlii.edu.au/au/cases/qld/QSC/2000/421.html. In the latter case, however, the fixing of an additional period of time by the
seller was inconsequential, since the court found that a fundamental breach of contract had occurred. For a case involving the granting
of an additional period of time for the opening of a letter of credit required under a distribution agreement, see CLOUT case No.  187
[Federal District Court, Southern District of New York, United States, 21 July 1997].
5
CLOUT case No. 47 [Landgericht Aachen, Germany, 14 May 1993].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 64
(1) The seller may declare the contract avoided:
(a) If the failure by the buyer to perform any of his obligations under the contract
or this Convention amounts to a fundamental breach of contract; or
(b) If the buyer does not, within the additional period of time fixed by the seller
in accordance with paragraph (1) of article 63, perform his obligation to pay the price
or take delivery of the goods, or if he declares that he will not do so within the period
so fixed.
(2)However, in cases where the buyer has paid the price, the seller loses the right
to declare the contract avoided unless he does so:
(a) In respect of late performance by the buyer, before the seller has become
aware that performance has been rendered; or
(b) In respect of any breach other than late performance by the buyer, within a
reasonable time:
(i) After the seller knew or ought to have known of the breach; or
(ii) After the expiration of any additional period of time fixed by the seller in
accordance with paragraph (1) of article 63, or after the buyer has declared
that he will not perform his obligations within such an additional period.
Introduction
1. Article 64 identifies situations in which the seller may
declare the contract avoided because the buyer is in breach
of one or more of its obligations. The rules mirror those
of article 49 governing the buyer’s right to declare the contract avoided for breach by the seller. The effects of avoidance are governed by articles 81 to 84. In all cases,
avoidance requires a declaration by the seller as specified
in article 26.
Requirements for the right to declare
the contract avoided (paragraph (1))
2. Article 64 (1) specifies two cases in which the seller
has the right to declare the contract avoided: if the buyer
has committed a fundamental breach, or if the buyer fails
to pay the price or to take delivery of the goods (or declares
that he will not do so) within an additional period of time
for performance fixed by the seller pursuant to article 63.
The case of fundamental breach of
contract (article 64 (1) (a))
3. The first situation in which the seller can avoid the
contract under article 64 (1) is where the buyer has committed a fundamental breach of contract as defined in
article 25.1 This requires that the breach of contract cause
such damage to the seller that he is substantially deprived
of what he was entitled to expect under the contract. One
arbitral award found that, “according to both the general
framework of the Convention and its interpretation in case
law, the notion of fundamental breach is usually construed
narrowly in order to prevent an excessive use of the avoidance of the contract”.2 Case law affords several illustrations of fundamental breaches involving the three
conceivable types of contract violations, namely failure
to pay the purchase price, failure to take delivery of the
goods, and failure to perform other obligations specified
in the contract.
4. Thus it has been held that a definitive failure to pay
the price constitutes a fundamental breach of contract.3 One
decision declared that delay in opening a letter of credit
does not in itself constitute a fundamental breach of contract4 whereas another decision stated that refusal on the
part of the buyer to open the letter of credit does constitute
a fundamental breach.5
5. A buyer’s final refusal to take delivery, or his return
of the goods to the seller in the absence of a fundamental
breach by the seller, have been judged to constitute a fundamental breach of contract.6 Generally, a mere delay of a
few days in the delivery of the goods is not deemed a
fundamental breach.7
6. Non-performance of obligations that arise from the
contract—as opposed to being imposed by the Convention—may also constitute a fundamental breach, as is demonstrated by decisions involving the buyer’s violation of a
Part three. Sale of goods
re-export prohibition8 and a seller’s breach of an exclusive
rights clause.9
Buyer’s failure to pay or to take
delivery within an additional
period of time fixed by the seller
(article 64 (1) (b))
7. If the buyer does not perform its obligation to pay the
price or to take delivery of the goods within the additional
period of time for performance that a seller has fixed under
article 63 (1), or if the buyer declares that it will not do
so within the period so fixed, the seller may declare the
contract avoided under article 64 (1) (b).10
8. The buyer’s obligation to pay the price encompasses
taking the necessary steps for that purpose, as provided in
article 54. It has been decided that the buyer’s failure to
take those steps within the additional period of time granted
to him by the seller pursuant to article 63 permits the seller
to avoid under article 64 (1) (b).11
195
Timing of the declaration of avoidance
of the contract (article 64 (2))
9. Article 64 (2) addresses the time within which a
seller must exercise a right to declare the contract
avoided. The provision makes clear that the seller’s right
to declare avoidance is not subject to time limitations as
long as the buyer has not paid the price. Once the price
has been paid, however, the seller’s right to avoid must
be exercised within specified periods. In cases of late
performance by the buyer, the seller loses the right to
declare the contract avoided unless he does so before he
becomes aware that the buyer has (tardily) performed
(article 64 (2) (a)). For other kinds of breaches, the right
to avoid is lost upon the expiration of a reasonable
period of time measured from either the time the seller
knew or ought to have known of the breach (article  64  (2)  (b)  (i)) or from the end of an additional
period of time the seller has fixed in accordance with
article  63  (1) (article 64  (2)  (b)  (ii)). There are, as of
the time this is written, no decisions which have applied
the rules in article 64 (2).
Notes
1
See the Digest for art. 25.
2
ICC Court of Arbitration, award No. 9887, ICC International Court of Arbitration Bulletin, 2000, 118.
Id.; see also CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994]. Similarly, Tribunal cantonal du Valais,
Switzerland, 2 December 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/733.pdf; CLOUT case No. 578 [US
District Court for the Western District of Michigan, United States, 17 December 2001], also available on the Internet at http://www.cisg.
law.pace.edu/cisg/wais/db/cases2/011217u1.html.
3
4
Landgericht Kassel, 21 September 1995, available on the Internet at http://www.cisg-online.ch/cisg/urteile/192.htm.
Supreme Court of Queensland, Australia, 17 November 2000, available on the Internet at http://www.austlii.edu.au/au/cases/qld/
QSC/2000/421.html.
5
6
See Kantonsgericht Zug, Switzerland, 12 December 2002, available on the Internet at http://www.cisg-online.ch/cisg/urteile/720.htm;
CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997] (failure to take delivery) (see full text of
the decision); CLOUT case No. 227 [Oberlandesgericht Hamm, Germany, 22 September 1992] (refusal to take delivery of more than
half of the goods).
7
CLOUT case No. 243 [Cour d’appel, Grenoble, France, 4 February 1999].
8
CLOUT case No. 154 [Cour d’appel, Grenoble, France, 22 February 1995].
9
Compare CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997].
See the cases cited in the Digest for art. 63, footnotes 3-5. See also Handelsgericht St. Gallen, Switzerland, 3 December 2002,
available on the Internet at http://www.cisg-online.ch/cisg/urteile/727.htm; Oberlandesgericht Graz, Austria, 24 January 2002, available
on the Internet at http://www.cisg-online.ch/cisg/urteile/801.pdf.
10
11
CLOUT case No. 261 [Bezirksgericht der Sanne, Switzerland, 20 February 1997] (failure to open a letter of credit within the additional period of time fixed by the seller under article 63).
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 65
(1) If under the contract the buyer is to specify the form, measurement or other
features of the goods and he fails to make such specification either on the date agreed
upon or within a reasonable time after receipt of a request from the seller, the seller
may, without prejudice to any other rights he may have, make the specification himself
in accordance with the requirements of the buyer that may be known to him.
(2) If the seller makes the specification himself, he must inform the buyer of the
details thereof and must fix a reasonable time within which the buyer may make a different specification. If, after receipt of such a communication, the buyer fails to do so
within the time so fixed, the specification made by the seller is binding.
Introduction
1. Article 65 applies in cases where the contract leaves it
to the buyer to specify features of the goods sold, such as
dimensions, colour or shape. The provision addresses the
problems that arise if the buyer fails to provide promised
specifications by the date agreed upon or within a reasonable period of time after receipt of a request by the seller
for the information.
The seller’s right to make specifications
2. Where the buyer fails to timely provide the required
information concerning the form, measurement or features
of the goods, article 65 (1) gives the seller the right to
decide upon the missing specifications “in accordance with
the requirements of the buyer that may be known to him.”
The seller, however, is not obliged to make the specification.
He may prefer to rely on the remedies available in case
the buyer’s conduct constitutes a breach of contract.
Implementation of the right
to make specifications
3. Article 65 (2) regulates the seller’s exercise of his right
to make specification on behalf of the buyer under article  65 (1). It requires the seller to inform the buyer of the
details of the seller’s specification, and to allow the buyer
a reasonable period of time to make a different specification. If the buyer fails to take advantage of the right to
provide a different specification within a reasonable time
after receiving the seller’s notice, the seller’s specification
is binding. It has been decided that, if a seller makes a
specification without fulfilling the requirements of the first
part of article 65 (2), the buyer retains the right to make
its own specification.1
Notes
1
Landgericht Aachen, Germany, 19 April 1996, available on the Internet at http://www.cisg-online.ch/cisg/urteile/165.htm.
Part three. Sale of goods
197
Part III, Chapter IV
Passing of risk (articles 66-70)
Overview
1. Chapter IV of Part III of the Convention deals with
the passing to the buyer of the risk of loss of or damage
to goods. The first article of the chapter (article 66) states
the consequences for the buyer after such risk passes to
the buyer. The following three articles (articles 67-69) set
out rules for when the risk passes to the buyer. The final
article of the chapter (article 70) states the allocation of
the risk of loss or damage if the seller commits a fundamental breach.
2. As a general rule, a seller that satisfies its obligation
to deliver goods or documents (see Section I of Chapter II
of Part III (articles 31-34), entitled “Delivery of the goods
and handing over of documents”) will cease to bear the
risk of loss or damage. The language used in chapter IV
and in articles 31-34 is often identical. One decision therefore concludes that the same interpretation should be given
to the word “carrier” in articles 31 and 67.1
3. The rules in chapter IV apply without regard to whether
the seller or the buyer owns the goods.2 Chapter IV therefore displaces domestic sales law that allocates risk to the
“owner” of the goods, although the outcome may be the
same in any particular case under both the Convention and
the domestic law.3
do so by expressly incorporating into their agreement trade
terms, such as the International Chamber of Commerce’s
Incoterms.10 They may agree to vary a standard trade term,11
adopt a trade term that is local,12 or use a trade term in
connection with the price rather than delivery.13 The parties
may also agree to the allocation of risk by incorporating
the standard terms or general business conditions of the
seller or buyer.14 In accordance with article 6, the parties’
agreement will govern even if it derogates from the provisions of Chapter IV that would otherwise apply. Notwithstanding article 6, however, a German court interpreted a
trade term set out in a French seller’s general business
conditions in accordance with German law because the
seller had used a clause common in German commerce,
drafted in the German language, and the buyer was
German.15
7. The Convention’s rules in article 8 on the interpretation
of statements and acts of the parties apply to agreements
relating to risk. Thus, one court found that the parties had
agreed that the seller would deliver the goods at the buyer’s
place of business because, in accordance with article 8 (2),
a reasonable person in the same circumstances as the buyer
would understand use of the German term “frei Haus”
(“free delivery”) to mean delivery at the buyer’s place of
business.16
Nature of risk
Other binding rules on passing of risk
4. Chapter IV deals with loss of or damage to the goods
sold. This is stated expressly in the first clause of article  66
and implicitly in the other articles. The loss of goods
includes cases where the goods cannot be found,4 have been
stolen, or have been transferred to another person.5 Damage
to the goods includes total destruction, physical damage,6
deterioration,7 and shrinkage of the goods during carriage
or storage.
8. Article 9 (1) provides that parties are bound by any
practices, including those allocating risk of loss or damage,
that they have established between themselves. Courts have
occasionally looked to the prior practices of the parties for
evidence of the parties’ intent with respect to risk of loss.17
One court has concluded, however, that conduct by one
party with respect to risk on two prior occasions is insufficient to establish a binding practice.18
5. Several courts have applied provisions of Chapter IV
to the passing of risks other than the risk of loss of or
damage to goods. These risks include the risk of delay by
the carrier after the seller has handed over the goods to the
carrier8 and the risk that the attribution of a painting is
incorrect.9
9. The seller and buyer may also be bound by trade
usages with respect to risk of loss or damage. Under article  9 (1), they are bound if they agree to a usage, whether
international or local. They are also bound under article  9  (2) by widely-observed international usages which
they know or should know unless they agree otherwise. If
the parties expressly incorporate an incoterm into their contract, article 9 (1) makes the definition of the term by the
International Chamber of Commerce binding, but the Incoterms are so widely-used courts may enforce the ICC’s
definition of a term even absent express incorporation of
those definitions.19
Parties’ agreement on passing of risk
6. The seller and buyer may agree on when the risk of
loss or damage passes to the buyer. They will frequently
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Burden of establishing
the passing of risk
10. Article 66 and the other provisions of Chapter IV are
silent on who has the burden of establishing that the risk
of loss or damage has passed to the buyer.20 One court has
endorsed the view that the burden is on the party that
argues that the risk has passed.21 The issue of who bears
the risk arises, however, in the context of actions to enforce
obligations of the seller (e.g. to deliver conforming goods)
or buyer (e.g. to pay for the goods) under other provisions
of the Convention.
11. The cases place the burden upon a seller that brings
an action to recover the price in accordance with article  62.
In several cases sellers failed to establish that they had
delivered the goods and therefore the buyers were found
not to be obliged to pay. In one case, the court found that
a bill of lading that accurately described the goods sold
but did not indicate the name of the buyer as the recipient
was insufficient proof.22 In a second case, the court found
that a stamped but unsigned receipt was not sufficient proof
of delivery at the buyer’s place of business as required by
the contract of sale.23
12. Where damaged goods are delivered and there is a
dispute over whether the damage occurred before or after
the risk of loss passed to the buyer, the buyer has the burden of establishing that the damage occurred before risk
passed to it. Thus, where a seller produced a bill of lading
with the master’s annotation “clean on board” and the buyer
produced no evidence that deterioration occurred before the
seller handed over the goods to the carrier, the buyer bore
the risk of the deterioration.24
Risk of loss or damage following
termination or avoidance
13. If the parties agree to terminate the contract after the
risk has passed to the buyer, it has been held that the risk
rules implicit in the Convention’s provisions on the effects
of avoidance of contract (Section V of Part III, Chapter V,
articles 81 through 84), including the rules with respect to
restitution following avoidance, supersede the risk provisions of Chapter IV.25 When the goods are returned following termination of the contract, the obligations of the parties
should mirror the obligations of the parties in the performance of the terminated contract: if the seller agreed to
deliver goods “ex factory”, then when goods are returned
following termination the risk passes to the seller when the
buyer hands over the goods to a carrier at the buyer’s place
of business.26 It has also been held that, where the seller
was responsible for carriage of the goods, the principle of
article 31 (c) determined when risk of loss passed back to
the seller for nonconforming goods that the buyer was (with
the agreement of the seller) returning to the seller; thus
risk returned to the seller when the buyer placed the goods
at the seller’s disposal, properly packaged for shipment, at
the buyer’s place of business.27
Notes
1
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (see full text of the decision).
CLOUT case No. 447 [Federal Southern District Court of New York, United States, 26 March 2002], also in 2002 Westlaw  465312
(St. Paul Guardian Ins. Co. v. Neuromed Medical Systems & Support GmbH).
2
3
CLOUT case No. 163 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
10  December 1996] (Yugoslav law that risk passes with title and that title passes on handing over goods yields same result as Convention) (see full text of the decision).
See, e.g., CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998] (goods could not be found at insolvent
warehouse).
4
See, e.g., CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998] (insolvent processor of raw salmon
transferred processed salmon to other customers)
5
6
See, e.g., CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (physical damage).
See, e.g., CLOUT case No. 377 [Landgericht Flensburg, Germany, 24 March 1999] (deterioration); CLOUT case No. 191 [Cámara
Nacional de Apelaciones en lo Comercial, Argentina, 31 October, 1995] (deterioration).
7
8
CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997] (buyer bears risk of subsequent delay) (see full text
of the decision).
9
Kunsthaus Math. Lempertz OHG v. Wilhelmina van der Geld, Arrondissementsrechtbank Arnhem, the Netherlands, 17 July 1997,
Unilex, affirmed on other grounds, Hof Arnhem, 9  February 1999 (Convention not applicable).
10
Not all trade terms address the issue of risk of loss or damage. See, e.g., CLOUT case No. 247 [Audiencia Provincial de Córdoba,
Spain, 31 October 1997] (“CFFO” allocates cost of shipment to the destination, but has no relevance to passing of risk).
11
See, e.g., CLOUT case No. 191 [Cámara Nacional de Apelaciones en lo Comercial, Argentina, 31  October 1995] (“C & F”) (see
full text of the decision).
12
See, e.g., CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992] (“frei Haus”).
13
See, e.g., CLOUT case No. 283 [Oberlandesgericht Köln, Germany, 9 July 1997] (“list price ex works”).
See, e.g., CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992] (French seller’s general business conditions enforced). Whether the parties have agreed to standard terms or general conditions is left to the applicable rules on contract formation and the validity of such terms and conditions.
14
Part three. Sale of goods
15
199
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992].
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992] (art. 69 rather than art. 67 governed passing of
risk).
16
17
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992] (seller’s practice of delivering in its own trucks
used to interpret parties’ agreement).
18
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (practice permitting buyer to offset value of physical
damage).
19
See, e.g., CLOUT case No. 447 [Federal Southern District Court of New York, United States, 26 March 2002], also in 2002 Westlaw
465312 (St. Paul Guardian Ins. Co. v. Neuromed Medical Systems & Support GmbH )(“CIF”); CLOUT case No. 253 [Cantone del Ticino
Tribunale d’appello, Switzerland, 15  January 1998] (“CIF”) (see full text of the decision); CLOUT case No. 340 [Oberlandesgericht
Oldenburg, Germany, 22 September 1998] (“DDP”) (see full text of the decision); CLOUT case No. 176 [Oberster Gerichtshof, Austria,
6 February 1996] (“FOB”).
20
CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998] (finding it unnecessary to decide
whether to apply CISG general principles, which would place burden on buyer, or to apply national law because the result was the same
under each alternative).
21
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
22
CLOUT case No. 283 [Oberlandesgericht Köln, Germany, 9 July 1997].
23
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992].
24
CLOUT case No. 247 [Audiencia Provincial de Córdoba, Spain, 31 October 1997].
25
CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], available on the Internet at www.cisg.at/1_7499k.htm.
26
CLOUT case No. 422 [Oberster Gerichtshof, Austria, 29 June 1999], available on the Internet at www.cisg.at/1_7499k.htm.
27
CLOUT case No. 594 [Oberlandesgericht Karlsruhe, Germany 19 December 2002] (see full text of the decision).
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 66
Loss of or damage to the goods after the risk has passed to the buyer does not discharge
him from his obligation to pay the price, unless the loss or damage is due to an act or
omission of the seller.
Introduction
1. Article 66 provides that the buyer is not discharged
from the obligation to pay the price if the goods are lost
or damaged after the risk has passed to the buyer unless
the loss or damage was caused by the seller. Article 66
does not create the obligation to pay the purchase price;
that obligation is set out in article 53. Article 66 is also
silent as to when the risk of loss or damage passes. The
parties’ contract and articles 67-70 set out rules for determining when the risk passes.
Consequence of passing of risk to buyer
2. Once it has been established that the risk passed before
loss or damage to the goods occurred, decisions routinely
require the buyer to pay the price unless it is established
that the seller was responsible for the loss or damage.1
Most, but not all, of these decisions cite both article 53
and article 66.2 Several decisions cite article 66 for the
proposition that a buyer is not obligated to pay the price
for lost or damaged goods if the seller is unable to establish
that risk had passed.3
3. Other articles explicitly or implicitly state the consequences for the buyer of bearing the risk. If, for example,
the buyer takes delivery of goods without notifying the
seller of lack of conformity and the goods are later discovered to be non-conforming, the buyer bears the burden of
establishing that the goods did not conform at the time the
risk of loss passed.4
Exception when loss or damage due to
seller’s acts or omissions
4. Although the buyer normally is not discharged from
its obligation to pay the price if the goods are lost or damaged after the risk has passed to the buyer, the last clause
of article 66 provides an exception to this non-dischargability rule if it is established that the loss or damage was due
to an act or omission of the seller. An arbitral tribunal found
that the seller’s failure to give the carrier agreed instructions on the temperature at which the goods were to be
stored during carriage caused the goods to be damaged
through melting and leakage, and the buyer was therefore
not responsible for the damage.5 Several cases place the
burden of showing this exception on the buyer; in none of
these cases has the buyer carried this burden.6
5. This exception to the buyer’s obligation to pay is distinct from the seller’s continuing liability under article  36  (1) for nonconformities that exist at the time the
risk of loss passes even if they do not become apparent
until a later time; the exception in article 66 (2) is also
distinct from the seller’s liability under article 36 (2) for
nonconformities that arise subsequent to passage of risk
if the seller has guaranteed the goods against these
nonconformities.
Notes
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (obligation to pay not discharged where goods suffered damage after risk passed to buyer); CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998] (risk had passed to
the buyer upon delivery of raw salmon to processing plant, and buyer’s obligation to pay therefore was not discharged even though the
plant sent the processed salmon to other customers) (see full text of the decision); CLOUT case No. 338 [Oberlandesgericht Hamm,
Germany, 23 June 1998] (buyer not obliged to pay for goods that had disappeared from warehouse because risk had not shifted to buyer
under art. 69 (2)); CLOUT case No. 163 [ArbitrationArbitration Court attached to the Hungarian Chamber of Commerce and Industry,
Hungary, 10 December 1996] (risk having passed to buyer under FOB term, buyer’s obligation to pay was not discharged even if buyer
was unable to make proper use of goods because of subsequent UN embargo); CLOUT case No. 191 [Cámara Nacional de Apelaciones
en lo Comercial, Argentina, 31 October 1995] (obligation to pay was not discharged despite deterioration of goods during transit because
risk had passed on shipment and buyer was unable to establish that seller was responsible for the deterioration).
1
The following cases cite both article 53 and article 66: CLOUT case No. 377 [Landgericht Flensburg, Germany, 24  March 1999];
CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998] (see full text of the decision); CLOUT case No.  338
[Oberlandesgericht Hamm, Germany, 23 June 1998]; CLOUT case No. 163 [Arbitration—Arbitration Court attached to the Hungarian
Chamber of Commerce and Industry, Hungary, 10 December 1996] (see full text of the decision).
2
Part three. Sale of goods
201
3
CLOUT case No. 283 [Oberlandesgericht Köln, Germany, 9 July 1997] (under articles 66 and 67  (1) buyer had no obligation to pay
the price for goods buyer did not receive where seller did not establish delivery to first carrier); CLOUT case No. 317 [Oberlandesgericht
Karlsruhe, Germany, 20 November 1992] (under articles 66 and 67  (1) buyer had no obligation to pay the price for goods it did not
receive because risk of loss had not passed under “Frei Haus” trade term).
4
CLOUT case No. 377 [Landgericht Flensburg, Germany, 24 March 1999].
5
CIETAC arbitral award, 23 February 1995, Unilex, see also http://www.cisg.law.pace.edu/cisg/wais/db/cases2/950223c1.html.
CLOUT case No. 163 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
10  December 1996] (see full text of the decision); CLOUT case No. 191 [Cámara Nacional de Apelaciones en lo Comercial, Argentina,
31  October 1995].
6
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 67
(1) If the contract of sale involves carriage of the goods and the seller is not
bound to hand them over at a particular place, the risk passes to the buyer when the
goods are handed over to the first carrier for transmission to the buyer in accordance
with the contract of sale. If the seller is bound to hand the goods over to a carrier at a
particular place, the risk does not pass to the buyer until the goods are handed over to
the carrier at that place. The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of the risk.
(2) Nevertheless, the risk does not pass to the buyer until the goods are clearly
identified to the contract, whether by markings on the goods, by shipping documents,
by notice given to the buyer or otherwise.
Overview
1. Article 67 provides rules governing the time at which
the risk of loss or damage passes to the buyer if the contract
of sale involves carriage of the goods.1 In general, the risk
passes to the buyer when the seller hands over the goods
to the specified carrier. The risk passes without regard to
whether the seller or the buyer has title to the goods,2 and
without regard to who is responsible for arranging transport
and insurance.3 The consequence of the passing of the risk
on the buyer’s obligation to pay is dealt with in article 66.
The effect on the passing of risk in cases where the seller
commits a fundamental breach is addressed in article 70.
2. Article 67 states a generally-accepted international rule.
A constitutional court, hearing a challenge to a similar
domestic rule on the ground that it was inconsistent with the
constitutional principle of equality, cited articles 31 and 67
of the Convention as evidence of general acceptance.4
3. Under article 6 the parties may agree to derogate from
the provisions of article 67, or they may be bound by
usages of trade or a course of dealing that derogate (article  9). If the parties’ agreement is consistent with article  67,
courts frequently cite the article. This is also true when the
parties agree on trade terms that address the passage of
risk. Decisions have found the terms “CIF”,5 “C & F”6 and
“list price ex works”7 to be consistent with article 67 (1).
If the trade term is inconsistent with article 67 (1), the
parties’ agreement prevails in accordance with article 6.
Thus, although the goods in the particular case were handed
over to a third-party carrier, a court did not apply article  67
in a case where the parties agreed that the goods would be
delivered “frei Haus” (“free delivery”), which the court
construed to mean that the seller undertook to deliver the
goods to the buyer’s place of business.8
Contracts of sale involving
carriage of goods
4. Article 67 does not define when a contract of sale
involves carriage of goods. A similar formula is used in
article 31 (a), which provides that if the contract of sale
involves carriage of goods the seller satisfies its obligation
to deliver the goods when it hands them over to the first
carrier. Given the identical language in the two provisions,
they should be read to cover the same transactions.9
5. Article 68 sets out special rules for passage of risk
when goods are sold in transit. Therefore, a sale of goods
in transit is not a contract “involving the carriage of goods”
within the meaning of article 67.
6. A contract of sale involves the carriage of goods when
it expressly or implicitly provides for subsequent carriage.
The contract may expressly provide that the goods are to
be carried by, e.g., including details with respect to the
manner of carriage. This is often done most efficiently by
incorporating trade terms, such as the International Chamber of Commerce’s Incoterms (e.g. “CIF”), which spell out
the obligation of the seller to deliver the goods by a carrier.
Other terms of the contract may, however, imply that the
goods are to be carried. An arbitral tribunal found that the
contract involved carriage when it provided that “the buyer
shall pick up the fish eggs at the seller’s address and bring
the goods to his facilities in Hungary” and the price was
stated to be “FOB Kladovo”.10
7. Article 67 refers to “carriage of the goods” and does
not expressly require that the goods be carried by a thirdparty carrier. One decision assumes that delivery to a
freight forwarder is the equivalent of delivery to the “first
carrier”.11
Allocation of risk
8. Paragraph (1) of article 67 sets out separate rules for
two different situations: first, if the seller is not bound to
hand the goods over to the carrier at a particular place (first
sentence of article 67 (1)), and second, if the seller is so
bound (second sentence). In both cases, the risk passes to
the buyer when the seller hands over the goods to the specified carrier.
Part three. Sale of goods
– If the seller is not bound to hand over the goods
to the carrier at a particular place
9. If the seller is not bound to hand over the goods to a
carrier at a particular place, the risk of loss or damage
passes when the goods are handed over to the first carrier.
This rule is consistent with the seller’s obligation to deliver
the goods as set out in article 31 (a). In the absence of
proof that the parties agreed on delivery at another location,
one court found that the seller delivered and the risk passed
when the seller handed over the goods to the first carrier.12
Another court found that the risk had passed when a seller
handed over the goods to a carrier in a timely fashion and
therefore the seller was not responsible for any subsequent
delay in delivery.13
10. Where the parties agreed that the goods would be
delivered “frei Haus” (“free delivery”), a court construed
the term to mean that the seller undertook to deliver the
goods to the buyer’s place of business even though actual
delivery of the goods in the case involved carriage. The
court therefore did not apply article 67 (1).14
– Where seller is bound to hand over goods
to carrier at particular place
11. The second sentence of paragraph (1) provides that
if the seller is bound to hand over goods to a carrier at a
203
particular place, the risk passes when the goods are handed
over to the carrier at that place. An agreement by a seller
whose place of business is inland to send the goods from
a port falls within paragraph (1). There are no reported
decisions interpreting this provision.
Retention of documents by seller
12. The third sentence of paragraph (1) provides that the
passage of risk under article 67 is not affected by the seller’s retention of documents controlling the disposition of
the goods. There are no reported decisions interpreting this
provision.
Identification of goods
13. Paragraph (2) of article 67 conditions the passage of
risk on clear identification of the goods to the contract of
sale.15 This rule is designed to protect against the possibility
that a seller will identify to the contract goods that have
already suffered casualty. One court found that the requirement that the goods be clearly identified was satisfied by
the description of the goods in the shipping documents.16
Another court noted that the parties to a CIF contract
agreed that the risk of loss would pass when cocoa beans
clearly identified to the contract of sale were handed over
to the carrier at the port of shipment.17
Notes
1
See CLOUT case No. 447 [Federal] Southern District Court of New York, United States, 26 March 2002 (plaintiffs’ experts wrongly
asserted that Convention did not include rules on passage of risk).
2
CLOUT case No. 447 [Federal] Southern District Court of New York, United States, 26 March 2002 (passage of risk and transfer of
title need not occur at the same time).
3
CLOUT case No. 247 [Audiencia Provincial de Córdoba, Spain, 31 October 1997] (risk passes without regard to who must arrange
for transport or insurance).
4
CLOUT case No. 91 [Corte Costituzionale, Italy, 19 November 1992].
5
CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998] (see full text of the decision).
6
CLOUT case No. 191 [Cámara Nacional de Apelaciones en lo Comercial, Argentina, 31 October 1995].
7
CLOUT case No. 283 [Oberlandesgericht Köln, Germany, 9 July 1997].
8
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992].
9
See, e.g., CLOUT case No. 360, Germany, 2000 (the word “carrier” means the same in both art.  31 and art. 67).
CLOUT case No. 163 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
10  December 1996].
10
11
CLOUT case No. 283 [Oberlandesgericht Köln, Germany, 9 July 1997].
12
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000].
13
CLOUT case No. 219 [Tribunal Cantonal Valais, Switzerland, 28 October 1997].
14
CLOUT case No. 317 [Oberlandesgericht Karlsruhe, Germany, 20 November 1992].
15
Article 32 (1) requires the seller to notify the buyer of the consignment of the goods if they are not otherwise clearly identified.
16
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000].
17
CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998].
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 68
The risk in respect of goods sold in transit passes to the buyer from the time of the
conclusion of the contract. However, if the circumstances so indicate, the risk is assumed
by the buyer from the time the goods were handed over to the carrier who issued the
documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods
had been lost or damaged and did not disclose this to the buyer, the loss or damage is
at the risk of the seller.
Overview
1. Article 68 provides rules for the time when risk passes if goods are sold while in transit. The general rule is that the
risk passes from the time the contract of sale is concluded. If, however, the circumstances so indicate, the risk is deemed
to have passed when the goods were handed over to the carrier. Only if the seller knew or ought to have known that the
goods were lost or damaged at the time the contract was concluded and did not inform the buyer will the risk remain with
the seller. Although article 68 has been cited in reported decisions, these decisions do not interpret its contents.1
Notes
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany 23 June 1998] (affirming lower court without reference to art. 68);
Schiedsgericht der Börse für landwirtschaftliche in Wien, Austria, 10 December 1997, Unilex (citing art. 68); CLOUT case No. 170
[Landgericht Trier, Germany, 12 October 1995] (citing art. 68).
1
Part three. Sale of goods
205
Article 69
(1) In cases not within articles 67 and 68, the risk passes to the buyer when he
takes over the goods or, if he does not do so in due time, from the time when the goods
are placed at his disposal and he commits a breach of contract by failing to take
delivery.
(2)However, if the buyer is bound to take over the goods at a place other than
a place of business of the seller, the risk passes when delivery is due and the buyer is
aware of the fact that the goods are placed at his disposal at that place.
(3) If the contract relates to goods not then identified, the goods are considered
not to be placed at the disposal of the buyer until they are clearly identified to the
contract.
Overview
1. Article 69 provides residual rules on the time of passing of risk in cases not covered by the preceding two articles of the Convention. Paragraph (1) covers cases where
delivery is to take place at the seller’s place of business,
while paragraph (2) addresses all other cases. The consequence of the passing of the risk on the buyer’s obligation
to pay is dealt with in article 66. The effect on the passing
of risk in cases where the seller commits a fundamental
breach is addressed in article 70.
2. Article 69 applies only if the preceding two articles of
the Convention do not apply.1 Article 67 governs cases
where the contract of sale involves carriage of goods, and
cases falling within that provision are thus beyond the
scope of article 69. If the contract of sale is silent as to
the carriage of goods, however, article 69 rather than article  67 will govern the passing of risk. This is true whether
or not the buyer arranges for subsequent transportation of
the goods by its own vehicles or by a third-party carrier.
Which article applies in a particular case often turns on
interpretation of the parties’ agreement. A court concluded
that a contract term “list price ex works” was not inconsistent with article 67 (1) where the goods were to be taken
by a third-party carrier from Japan.2 An arbitral tribunal
also applied article 67 (1) to a contract providing that “the
buyer has to pick up the fish eggs at the seller’s address
and take the goods to his facilities in Hungary” and that
the price was “FOB Kladovo”.3 On the other hand, with
respect to a contract where the seller agreed to deliver the
goods under the “DAF” (“Delivery at Frontier”) Incoterm,
an arbitral tribunal found that article 69 (2) rather than
article 67 governed the issue of when risk passed.4
Taking over goods at seller’s
place of business
3. When goods are to be delivered at the seller’s place of
business, paragraph (1) of article 69 provides that the risk
passes to the buyer when it takes over the goods. A court
has applied the paragraph to the passing of risk in the sale
of a painting at an auction.5
4. If the buyer fails to take over the goods, paragraph (1)
provides that the risk passes when the goods have been
placed at the buyer’s disposal and the buyer’s failure to
take them over breaches the contract. Under paragraph (3),
goods are at the buyer’s disposal when they are clearly
identified to the contract. There are no reported cases
applying this provision.
Taking over goods at other locations
5. Paragraph (2) of article 69 addresses the passing of
risk in cases where the buyer is bound to take over the
goods at a place other than the seller’s place of business.
In these cases, the risk passes when the buyer is aware that
the goods are placed at its disposition and delivery is due.
Under paragraph (3), goods are at the buyer’s disposal
when they are clearly identified to the contract.
6. Paragraph (2) covers a variety of cases, including cases
involving delivery of goods stored in a third party’s warehouse, delivery at some place other than the seller’s or buyer’s place of business, and delivery at the buyer’s place of
business.6 In one case, a court found that the risk that furniture stored in a warehouse would be lost had not passed
to the buyer; the buyer had been issued storage invoices but
delivery was not yet due because, by the parties’ agreement,
delivery was due only on the buyer’s demand and it had not
yet made a demand.7 Another case found, however, that risk
of loss had passed when the seller delivered raw salmon to
a third party processor because the buyer acquiesced in the
delivery and delivery was due.8 In another case, an arbitral
tribunal found that the seller, who had stored the goods following the buyer’s failure to open an agreed letter of credit,
bore the risk of loss because the seller had not delivered the
goods “DAF” (“Delivery at Frontier”) as agreed, nor had the
seller placed the goods at the buyer’s disposal.9
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Notes
1
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (art. 69 (1) applies only if preceding two articles do not
apply) (see full text of the decision).
2
CLOUT case No. 283 [Oberlandesgericht Köln, Germany, 9 July 1997].
CLOUT case No. 163 [Arbitration—Arbitration Court attached to the Hungarian Chamber of and Industry, Hungary, 10 December
1996].
3
4
CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1992].
Kunsthaus Math. Lempertz OHG v. Wilhelmina van der Geld, Arrondissementsrechtbank Arnhem, the Netherlands, 17 July 1997,
Unilex, affirmed on other grounds, Hof Arnhem, 9  February 1999 (Convention not applicable).
5
6
CLOUT case No. 360 [Amtsgericht Duisburg, Germany, 13 April 2000] (paragraph (2) covers cases where buyer takes over goods
at place other than seller’s place of business).
7
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
8
CLOUT case No. 340 [Oberlandesgericht Oldenburg, Germany, 22 September 1998].
9
CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1993] (see full text of the decision).
Part three. Sale of goods
207
Article 70
If the seller has committed a fundamental breach of contract, articles 67, 68 and 69 do
not impair the remedies available to the buyer on account of the breach.
Overview
1. Under article 70, even though risk of loss or damage to the goods has passed to the buyer as provided in the preceding
three articles, the buyer retains its remedies unimpaired if the seller has committed a fundamental breach of contract. There
are no reported cases applying this article.
Part three. Sale of goods
209
Part III, Chapter V
Provisions common to the obligations of the seller and of the buyer
(articles 71-88)
Overview
1. Chapter V, which contains provisions applicable with respect to both the seller’s obligations and the buyer’s obligations,
is the final chapter of Part III (“Sale of Goods”), and thus is the last chapter of the Convention containing substantive rules
for international sales.1 It’s six constituent sections are: Section I—“Anticipatory breach and instalment contracts”;
Section II—“Damages”; Section III—“Interest”; Section IV—“Exemption”; Section V—“Effects of avoidance”; and
Section VI—“Preservation of the goods”.
Notes
1
Part IV of the Convention, the sole subsequent remaining division, contains “Final provisions” addressing such matters as the
depository for the Convention, relation of the Convention to other international agreements, ratification, acceptance or approval of
the Convention, declarations and reservations, effective dates, and denunciation of the Convention.
Part three. Sale of goods
211
Section I of Part III, Chapter V
Anticipatory breach and instalment contracts (articles 71-73)
Overview
1. The first section of Chapter V of Part III of the Convention contains three provisions, applicable to both buyers and sellers, that address avoidance (or partial
avoidance) of contract or suspension of performance
under a contract in certain special situations—specifically,
where a party has in some fashioned threatened future
non-performance of its obligations (articles 71, 72 and,
in certain respects, article 73 (2)) or where there is a
breach of an instalment contract (article 73). Thus under
the first two articles of the section, an aggrieved party
may suspend its obligations (article 71) or avoid the contract (article 72) before the time for performance is due
if the conditions of these articles are satisfied. Where the
parties have entered into a contract by which the goods
are to be delivered in instalments, an aggrieved party may
avoid the contract with respect to a single instalment,
future instalments, or the contract as a whole as provided
in the third article (article 73).
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UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods
Article 71
(1) A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of:
(a) A serious deficiency in his ability to perform or in his creditworthiness; or
(b)His conduct in preparing to perform or in performing the contract.
(2) If the seller has already dispatched the goods before the grounds described in
the preceding paragraph become evident, he may prevent the handing over of the goods
to the buyer even though the buyer holds a document which entitles him to obtain them.
The present paragraph relates only to the rights in the goods as between the buyer and
the seller.
(3) A party suspending performance, whether before or after dispatch of the goods,
must immediately give notice of the suspension to the other party and must continue
with performance if the other party provides adequate assurance of his performance.
Introduction
1. Article 71 authorizes a seller or a buyer to suspend
performance of its obligations under the sales contract if
the party is unlikely to receive a substantial part of the
counter-performance promised by the other party. The suspending party does not breach the contract if the suspension
is rightful.1 If, however, the suspension is not authorized
by article 71, the suspending party will breach the contract
when it fails to perform its obligations.2 The right to suspend exists until the time for performance is due, but once
the date for performance has passed the aggrieved party
must look to other remedies under the Convention.3 The
right continues until the conditions for suspension no longer
exist, there is a right to avoid the contract, or the other
party gives adequate assurance of performance in accordance with article 71 (3).4 The Convention’s rules on the
right to suspend displace domestic sales law rules that permit the suspension of a party’s obligation.5
2. The right to suspend under article 71 is to be distinguished from the right to avoid the contract under article  72.6 Unlike avoidance of the contract, which terminates
the obligations of the parties (see article 81), the suspension
of contractual obligations recognizes that the contract continues and encourages mutual reassurance that both parties
will perform. The preconditions for exercise of the right to
suspend and the right to avoid differ, as do the obligations
with respect to communications between the two parties.
3. The right to suspend under article 71 applies both to
contracts of sale calling for a single delivery and to instalment contracts governed by article 73. When the preconditions of both articles are satisfied, the aggrieved party may
choose between suspending performance under article 71
and avoiding the contract with respect to future instalments
under article 73 (2).7 If a party chooses to suspend performance with respect to future instalments it must give a notice
in accordance with article 71 (3).8
4. The parties may agree, pursuant to article 6, to exclude
application of article  71 or to derogate from its provisions.
One decision found that by agreeing to take back equipment, repair it, and then redeliver it promptly, the seller
had implicitly agreed to derogate from article 71, and therefore could not suspend its obligation to redeliver the equipment because of the buyer’s failure to pay past debts.9
Preconditions of suspension
5. A party is entitled to suspend its obligations under
paragraph (1) of article 7110 if it becomes apparent that the
other party will not perform a substantial part of its obligations11 and if the non-performance is the result of the causes
set out in subparagraphs (a)12 or (b).13 It is not necessary
that the failure amount to a fundamental breach.14
6. A party was found to be entitled to suspend its obligations when confronted with the following circumstances:
seller’s refusal to perform with respect to certain items;15
seller’s inability to deliver goods free of restrictions
imposed by seller’s supplier;16 buyer’s failure to pay for
the goods;17 buyer’s non-payment or delayed payment of
the price under one or more earlier sales contracts;18 buyer’s
failure to open an effective bank guarantee.19 A buyer’s
failure to open a letter of credit gives rise to the right to
avoid the contract under article 64 and the buyer is not
limited to the remedies of articles  71 and 72.20
7. A buyer was found not to be entitled to suspend its
obligations in the face of the following circumstances:
Part three. Sale of goods
seller’s nonconforming delivery of only 420 kg out of
22,400 kg;21 partial delivery by the seller;22 prior nonconforming deliveries where buyer sought to suspend payment
for current conforming deliveries.23 Several decisions
observe that buyer’s submissions to the court failed to indicate that the seller would not perform a substantial part of
its obligations.24
8. A seller was found not entitled to suspend its obligations where the buyer had not paid the purchase price for
two deliveries and the buyer had cancelled a bank payment
order.25 Suspension was also found unjustified where the
seller had not established that the buyer would be unable
to take delivery or to pay for the goods, notwithstanding
that the goods might not conform with health standards
issued by the government in the buyer’s place of
business.26
Stoppage in transit
9. Paragraph (2) of article 71 authorizes a seller that has
already dispatched the goods to stop the handing over of
the goods to the buyer. There are no reported cases applying this paragraph.27
Notice of suspension
10. Paragraph (3) of article 71 requires a suspending party
to give notice of the suspension immediately28 to the other
213
party.29 The paragraph does not specify what constitutes
notice. The following statements or acts have been found
to be sufficient notice: buyer’s refusal to pay the costs of
warehousing furniture when it had earlier agreed to contribute to these costs;30 a letter in which the buyer refused
to accept nonconforming items and offered to return them.31
The following circumstances have been found not to constitute sufficient notice: buyer’s failure to pay the price;32
a letter from the buyer complaining of defective goods
delivered under different contracts than the one as to which
it claimed to be suspending performance.33
11. Paragraph (3) does not expressly state the sanction
for failing to give immediate notice of suspension. Decisions uniformly conclude that in the absence of due notice
the aggrieved party may not rely on its right to suspend
performance.34 One decision held further that the seller
breached the contract by suspending delivery without
immediately giving notice of the suspension to the buyer,
and that the buyer was therefore entitled to damages.35
Adequate assurance of performance
12. Paragraph (3) requires a party that has suspended its
performance to end its suspension and resume performance
if the other party gives adequate assurance that it will perform. The paragraph does not elaborate on the form and
manner of this assurance and does not state when the assurance must be given. There are no reported cases addressing
adequate assurance under this paragraph.36
Notes
1
CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000] (stating that suspension under art. 71 is not a breach but
exercise of a unilateral right to modify time for performance) (see full text of the decision).
2
CLOUT case No. 51 [Amtsgericht Frankfurt a.M., Germany, 31 January 1991] (buyer entitled to damages because seller failed to
give immediate notice that it was suspending delivery).
3
CLOUT case No. 630 [Court of Arbitration of the International Chamber of Commerce, Zurich, Switzerland, July 1999] (buyer not
entitled to suspend obligation to pay after it had taken delivery of goods even though lower quantity of goods were delivered than contracted for).
4
CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also available on the Internet at http://cisgw3.law.pace.edu/
cisg/text/001012g1german.html (suspension not breach but exercise of a right to modify time for performance).
5
CLOUT case No. 238 [Oberster Gerichtshof, Austria, 12 February 1998] (see full text of the decision).
ICC award No. 8786, January 1997, Unilex (buyer did not suspend obligations but avoided contract under art. 72 (1)); ICC award
No. 8574, September 1996, Unilex (buyer’s purchase of substitute goods not a suspension of its obligations).
6
7
CLOUT case No. 238 [Oberster Gerichtshof, Austria, 12 February 1998].
Tribunal of International Commercial Arbitration at the Federation Chamber of Commerce and Industry, Russian Federation, award
in case No. 302/1996 of 27  July 1999, published in Rozenberg, Practika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda:
Haychno-Practicheskiy Commentariy 1999–2000, No. 27 [141–147].
8
9
CLOUT case No. 311 [Oberlandesgericht Köln, Germany, 8 January 1997] (see full text of the decision).
The following decision recognizes the applicability of the Convention and the right to suspend but fails to cite art. 71: Maglificio
Dalmine v. Coveres, Tribunal Commercial de Bruxelles, Belgium, 13 November 1992, Unilex (seller entitled to suspend delivery because
buyer failed to pay price under prior contract).
10
11
Oberlandesgericht Dresden, Germany, 27 December 1999, Unilex (noting that there must be a mutual, reciprocal relationship between
the obligation suspended and the counter-performance).
12
The following cases cite subparagraph (a): CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998]; CLOUT case
No. 238 [Oberster Gerichtshof, Austria, 12 February 1998] (remand to consider further allegation of uncreditworthiness); Arbitration
award No.  273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex.
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13
The following cases cite subparagraph (b): Malaysia Dairy Industries v. Dairex Holland, Rb ‘s‑Hertogenbosch, the Netherlands,
2  October 1998, Unilex; CLOUT case No. 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and
Industry, Hungary, 5 December 1995] (see full text of the decision); Landgericht Berlin, Germany, 15  September 1994, Unilex.
14
Landgericht Berlin, Germany, 15 September 1994, Unilex. But see Shuttle Packaging Systems v. Tsonakis, see CLOUT case no. 578
[Federal] Western District Court of Michigan, United States, 17 December 2001] also in 2001 Westlaw 34046276, 2001 US Dist. LEXIS
21630 (aggrieved party must show fundamental breach to be entitled to suspend; seller entitled to suspend non-competition clause because
buyer’s failure to pay was a fundamental breach).
15
Landgericht Berlin, Germany, 15 September 1994, Unilex (citing art. 71 (1) (b)).
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998] (citing art.  71  (1)  (a)); Oberlandesgericht Linz, Austria,
23 May 1995, available on the Internet at http://cisgw3.law.pace.edu/cases/950523a3.html, affirmed on other grounds, CLOUT case
No.  176 [Oberster Gerichtshof, Austria, 6 February 1996].
16
17
CLOUT case No. 164 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
5  December 1995] (citing art. 71 (1) (b), court found seller justified in suspending its obligation to repair non-conforming goods) (see
full text of the decision). See also ICC award No. 8611, 23 January 1997, Unilex (noting that seller’s failure to perform occurred before
it would have been entitled to suspend performance under art. 71 (1) (b) because of buyer’s non-payment).
18
J.P.S. BVBA v. Kabri Mode BV, Rechtbank van Koophandel Hasselt, Belgium, 1 March 1995, Unilex (seven-month delay in payment);
Maglificio Dalmine v. Coveres, Tribunal Commercial de Bruxelles, Belgium, 13 November 1992, Unilex (without citing art. 71).
19
Arbitral award VB/94124, Hungary, 17 November 1995, Unilex (bank guarantee opened with a date that had already expired).
CLOUT case No. 176 [Oberster Gerichtshof, Austria, 6 February 1996] (see full text of the decision); but see Arbitral award VB/94124,
Hungary, 17 November 1995, Unilex (right to suspend under art. 71 when ineffective bank guarantee opened).
20
21
CLOUT case No. 227 [Oberlandesgericht Hamm, Germany, 22 September 1992] (see full text of the decision).
CLOUT case No. 630 [ICC award No. 9448, July 1999], also in Unilex (buyer not entitled to suspend obligation to pay after it had
taken delivery of goods even though it did not receive the fully quantity contracted for); CLOUT case No. 275 [Oberlandesgericht
Düsseldorf, Germany, 24 April 1997] (buyer not entitled to suspend payment for part of goods not delivered).
22
23
BV BA. J.P. v. S. Ltd., Hof van Beroep Gent, Belgium, 26 April 2000, available on the Internet at http://www.law.kuleuven.ac.be/int/
tradelaw/WK/2000-04-28.htm.
24
Oberlandesgericht Dresden, Germany, 27 December 1999, Unilex; Arbitration award No.  273/95, Zurich Handelskammer, Switzerland,
31 May 1996, Unilex.
25
CLOUT case No. 238 [Oberster Gerichtshof, Austria, 12 February 1998] (art. 71 (1) (a) covers cases where a party is subject to an
insolvency proceeding or has completely ceased to pay but not where payment is slow).
26
Malaysia Dairy Industries v. Dairex Holland, Rb ’s-Hertogenbosch, the Netherlands, 2 October 1998, Unilex (buyer offered to take
delivery of the goods in Free Trade zone).
27
CLOUT case No. 51 [Amtsgericht Frankfurt a.M., Germany, 31 January 1991] (unnecessary to decide whether seller entitled to stop
goods in transit because seller failed to give requirred notice).
28
BV BA. J.P. v. S. Ltd., Hof van Beroep Gent, Belgium, 26 April 2000, available on the Internet at http://www.law.kuleuven.ac.be/int/
tradelaw/WK/2000-04-28.htm (notice not “immediate” when deliveries to which it related were made seven and 14 months earlier).
29
See ICC award No. 8611, 23 January 1997, Unilex (notice not necessary under circumstances of case).
30
CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998].
31
Landgericht Berlin, Germany, 15 September 1994, Unilex.
CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also available on the Internet at http://cisgw3.law.pace.edu/
cisg/text/001012g1german.html (suspension not breach but a unilateral right to modify time for performance).
32
33
BV BA. J.P. v. S. Ltd., Hof van Beroep Gent, Belgium, 26 April 2000, available on the Internet at (citing art. 73 (1) for implicit
affirmation of this point).
34
CLOUT case No. 432 [Landgericht Stendal, Germany, 12 October 2000], also available on the Internet at http://cisgw3.law.pace.edu/
cisg/text/001012g1german.html (party may not rely on para. (1)); Tribunal of International Commercial Arbitration at the Russian
Federation Chamber of Commerce and Industry, Russian Federation, award in case No. 302/1996 of 27 July 1999, published in Rozenberg, Practika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda: Haychno-Practicheskiy Commentariy 1999–2000, No. 27
[141–147]; CLOUT case No. 51 [Amtsgericht Frankfurt a.M., Germany, 31 January 1991] (seller may not rely on right to stop goods
in transit pursuant to para. (2)).
35
CLOUT case No. 51 [Amtsgericht Frankfurt a.M., Germany, 31 January 1991].
A similar reference to adequate assurance is made in article 72 (2), and cases construing that phrase under article 72 that may be
found relevant under article 71. ICC award No. 8786, January 1997, Unilex; CLOUT case No. 130 [Oberlandesgericht Düsseldorf,
Germany, 14 January 1994] (see full text of the decision).
36
Part three. Sale of goods
215
Article 72
(1) If prior to the date for performance of the contract it is clear that one of the
parties will commit a fundamental breach of contract, the other party may declare the
contract avoided.
(2) If time allows, the party intending to declare the contract avoided must give
reasonable notice to the other party in order to permit him to provide adequate assurance
of his performance.
(3) The requirements of the preceding paragraph do not apply if the other party
has declared that he will not perform his obligations.
Introduction
1. Article 72 entitles a seller or a buyer to avoid the contract if it becomes clear before the date for performance
that the other party will commit a fundamental breach.
However, article 49 rather than article 72 applies if, at or
after the date for performance, a party’s failure to perform
or nonconforming performance amounts to a fundamental
breach. Thus a buyer who has not declared the contract
avoided before the date for performance may not avoid the
contract under article 72 but must act instead under articles  45 and 49.1
2. The right of an aggrieved party to avoid the contract
under article 72 is to be distinguished from the right to
suspend its obligations under article 71.2 Both articles are
concerned with predicting whether there will be a breach
but the preconditions for the more drastic remedy of avoidance are more stringent than those for suspension, both as
to the seriousness of the predicted breach and the probability that the breach will occur. The notification requirements
of the two provisions also differ. Article 72 requires “reasonable” prior notice only if time allows, and excuses the
notice if the other party has declared that it will not perform; article 71, in contrast, requires immediate notice of
suspension with no exceptions.3
3. Article 72 entitles an aggrieved party to avoid a contract
before the date for performance if the contract is for (inter
alia) a single delivery, while article 73 provides special rules
on avoidance with respect to future instalments if the contract is an instalment contract. Several decisions recognize
that, in an instalment contract, the aggrieved party might act
under either article as to future instalments.4
Preconditions for avoidance
4. Paragraph (1) sets out the principal precondition for a
rightful avoidance under article 73: it must be clear prior
to the date for performance that the party required to perform will commit a fundamental breach. A very high probability that there will be a fundamental breach rather than
complete certainty is required.5 One decision has stated that
a claim of anticipatory repudiation must allege “(1) that
the defendant intended to breach the contract before the
contract’s performance date and (2) that such breach was
fundamental”.6
5. A party that declares that it will not perform its obligations satisfies this precondition.7 Allegations, if proved, that
the seller stated it would “no longer feel obligated” to perform and would “sell the material elsewhere” would entitle
the buyer to avoid the contract.8 Conditioning delivery on
new demands beyond those agreed upon is an anticipatory
repudiation of the contract.9
6. The preconditions of paragraph (1) were also found to
have been satisfied in the following circumstances: the
buyer failed to pay for prior shipments;10 the buyer failed
to open a letter of credit;11 the seller failed to reduce the
price and to commit to deliver fashion goods on time;12 the
seller deliberately terminated delivery of goods.13
7. The preconditions were found not satisfied in the following circumstances: the seller held back the goods
because of a dispute between the parties;14 the seller
expressed an interest in stopping deliveries but also agreed
to continue negotiations;15 the buyer failed to pay one
instalment.16
Notice of intent to avoid
8. Where the requirements of article 72 (1) have been met,
paragraph (2) of article 72 requires the aggrieved party to
give the other party prior notice that he intends to avoid the
contract, in order to permit the other side a chance to provide
adequate assurances that he will perform.17 This notice is
required, however, only “if time allows”. This notice is different from the declaration of avoidance governed by article 26, which must also be given if the aggrieved party does
not receive adequate assurances and decides to proceed to
avoidance.18 One decision concluded that if the aggrieved
party is relying on article 72 it must declare the contract
avoided prior to the date for performance.19
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Adequate assurance of performance
9. As was just noted, the purpose of the notice required
under article 72 (2) is to allow the recipient an opportunity
to provide adequate assurance of performance.20 The Convention does not prescribe the form assurance must take.
There is no requirement that the aggrieved party post a
bond.21
Notes
1
CLOUT case No. 171 [Bundesgerichtshof, Germany, 3 April 1996]; CLOUT case No. 124 [Bundesgerichtshof, Germany, 15 February
1995].
2
ICC award No. 8786, January 1997, Unilex (buyer did not suspend obligations but avoided contract under art. 72 (1)); ICC award
No. 8574, September 1996, Unilex (buyer’s purchase of substitute goods not a suspension of its obligations).
3
ICC award No. 8574, September 1996, Unilex (noting differences as to notice).
EP S.A.v FP Oy, Helsinki Court of Appeal, Finland, 30 June 1998, Unilex (where two separate orders for skincare ointment were to
be filled from the same batch of product and there was a fundamental breach with respect to the quality of the first delivery, the aggrieved
buyer could avoid as to the second delivery either under either article 72 or, if the two orders constituted instalments of an instalment
contract, under article 73 (2)); Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex (fundamental
breach as to future instalments is covered by both arts. 72 and 73).
4
5
Landgericht Berlin, Germany, 30 September 1992, Unilex (very high probability rather than complete certainty required). See also
Arbitration award No. S2/97, Schiedsgericht der Börse für Landwirtschaftliche Produkte–Wien, Austria, 10 December 1997, Unilex
(“good grounds” under art. 73 means high probability, a less severe test than that found in art. 72 (1)).
6
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7 December 1999] (citing arts. 25 and 72)
(see full text of the decision).
7
See art. 72 (3) (excusing the aggrieved party from giving the other side an opportunity to provide adequate assurances of his performance, as normally required under article 72 (2), “if the other party has declared that he will not perform his obligations”).
8
CLOUT case No. 417 [Federal District Court, Northern District of Illinois, United States, 7 December 1999].
CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschaftlichen Arbitrage, 29 December 1998] (see full text of
the decision).
9
10
CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994], affirming with modifications, Landgericht Krefeld,
28 April 1993, Unilex; Landgericht Berlin, Germany, 30 September 1992, Unilex.
11
CLOUT case No. 631 [Supreme Court of Queensland, Australia, 17 November 2000].
12
ICC award No. 8786, January 1997, Unilex.
13
Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex.
14
CLOUT case No. 261 [Bezirksgericht der Sanne, Switzerland, 20 February 1997].
15
ICC award No. 8574, September 1996, Unilex.
16
Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex.
17
EP S.A.v FP Oy, Helsinki Court of Appeal, Finland, 30 June 1998, Unilex (timing and content of fax gave prior notice).
ICC award No. 8574, September 1996, Unilex (noting difference between art. 72 notice and declaration of avoidance, and finding
that declaration of avoidance was not timely); CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994] (seller
gave notice of intent to avoid followed by notice of avoidance when it heard nothing from buyer) (see full text of the decision).
18
19
CLOUT case No. 124 [Bundesgerichtshof, Germany, 15 February 1995].
CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994] (buyer failed to respond to demand for adequate
assurance) (see full text of the decision).
20
21
ICC award No. 8786, January 1997, Unilex.
Part three. Sale of goods
217
Article 73
(1) In the case of a contract for delivery of goods by instalments, if the failure
of one party to perform any of his obligations in respect of any instalment constitutes
a fundamental breach of contract with respect to that instalment, the other party may
declare the contract avoided with respect to that instalment.
(2) If one party’s failure to perform any of his obligations in respect of any instalment gives the other party good grounds to conclude that a fundamental breach of contract will occur with respect to future instalments, he may declare the contract avoided
for the future, provided that he does so within a reasonable time.
(3) A buyer who declares the contract avoided in respect of any delivery may, at
the same time, declare it avoided in respect of deliveries already made or of future
deliveries if, by reason of their interdependence, those deliveries could not be used for
the purpose contemplated by the parties at the time of the conclusion of the contract.
Introduction
1. This article provides special rules for instalment contracts.
These rules set out when a seller or a buyer is entitled to declare
the contract avoided with respect to a single instalment, future
instalments, or the contract as a whole.1 In accordance with
article 26 a declaration of avoidance is effective only if the
aggrieved party gives notice to the other party.
2. Article 73 does not preclude application of other articles of the Convention. When a seller fails to deliver an
instalment or a buyer fails to pay for an instalment, the
aggrieved party is entitled under article 47 or article 64 to
give the breaching party an additional period of time and
to avoid the instalment if that party fails to perform within
the additional time.2 When some but not all instalments are
delivered, article 51 on partial delivery and article 73 may
be applicable.3 An aggrieved party may have both the right
to suspend its performance under article 71 (1) and the
right to avoid the contract as to future instalments under
article 73 (2).4 An aggrieved party may also be able to
avoid its contractual obligations to make further deliveries
under either article 72 or article  73.5
What constitutes an instalment
contract
3. An instalment contract is one that provides for delivery
of goods in separate lots.6 The goods do not have to be
fungible, so that an instalment contract may cover delivery
of different kinds of goods in each instalment (e.g., men’s
lambskin coats and women’s lambskin coats).7 One decision states that an instalment contract need not determine
the quantity of individual instalments under article 73 as
precisely as partial deliveries under article 51.8
4. Several decisions have characterized separate contracts
between parties that have an ongoing relationship as an
instalment contract governed by article 739 or have concluded that the aggrieved party might act under either article 73 or another article, such as article 7110 or article 72.11
One decision also applies article 73 to separate yearly supply contracts for aluminium between the same parties.12
Another decision, however, distinguishes an instalment
contract from a distribution or framework agreement: the
latter may provide for non-sales matters such as exclusive
representation in a geographical area or an agreement without any determinable quantity.13
Avoidance as to a single instalment
5. Paragraph (1) entitles a party to declare a contract
avoided as to a single instalment if the other party commits
a fundamental breach (see article 25) with respect to that
instalment. The same standards for determining whether a
party commits a fundamental breach apply both to a contract that requires a single delivery and to a contract that
requires delivery by instalments. The aggrieved party was
found to be entitled to avoid as to an instalment in the
following cases: when the seller failed to deliver the promised goods;14 when the seller conditioned delivery of an
instalment on satisfaction of new demands.15 On the other
hand, the aggrieved party was found not to be entitled to
avoid as to an instalment where the buyer delayed paying
the price for the instalment.16
Avoidance of contract as to
future instalments
6. Paragraph (2) of article 73 entitles an aggrieved party
to avoid the contract as to future instalments if the party
has good grounds to conclude that the other party will
commit a fundamental breach of contract (see article 25)
with respect to the future instalments.
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7. An aggrieved buyer was found to have the right to
avoid as to future instalments in the following cases:
where the seller made no delivery despite accepting payment;17 where the seller failed to deliver first instalment;18
where the seller declared that he would not make further
deliveries;19 where the seller refused to make further
delivery of cherries because of a dramatic increase in the
market price for cherries;20 where seller’s late delivery of
three instalments caused disruption of buyer’s production;21 where the seller delivered poor quality goods;22
where the buyer had good grounds to believe that the
seller would be unable to deliver peppers that satisfied
food safety regulations.23
8. In the following cases it was found that the seller had
good grounds to avoid the contract: where the buyer’s failure to open a letter of credit gave the seller good grounds
to conclude that the buyer would not pay;24 where the buyer
continued to breach a contract term that prohibited the
buyer from reselling the goods in specified markets.25
9. To avoid as to future instalments under article 73 (2) an
aggrieved party must declare avoidance (by notice to the other
party—see article 26) within a reasonable time. A buyer who
was entitled to avoid the contract as to future instalments
effectively avoided the contract when it gave notice to the
seller within 48 hours of the third late delivery.26
Avoidance of contract as to
interdependent instalment
10. If a party intends to avoid as to an instalment under article  73 (1), paragraph (3) authorizes additional avoidance as to
past or future instalments that are so interdependent with the
avoided instalment that they could not serve the purposes contemplated by the parties at the time the contract was concluded. If a party avoids as to instalments under paragraph  (3),
it must notify the other party at the same time that it declares
avoidance of the instalment under article  73  (1). There are no
reported cases applying this paragraph.
Notes
1
See also ICC award No. 8740, 1996, Unilex (buyer duly avoided as to last instalment when total delivery of coal was less than contract amount).
2
Schiedsgericht der Börse für Landwirtschaftliche Produkte–Wien, Austria, 10 December 1997, Unilex (buyer’s failure to take delivery);
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997]; Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex (buyer’s failure to pay for instalment); Landgericht Ellwangen, Germany, 21 August
1995, Unilex (seller’s failure to deliver to third party as agreed).
3
CLOUT case No. 630 [Court of Arbitration of the International Chamber of Commerce, Zurich, Switzerland, July 1999] (both articles  51 and 73 applicable but buyer did not establish right to withhold payments); ICC award No. 8128, 1995, Unilex.
4
See CLOUT Case No. 578 [Federal Western District Court of Michigan, United States, 17 December 2001] (Shuttle Packaging Systems
v. Tsonakis) (citing arts. 71–73 for remedies available in instalment transaction); CLOUT case No. 630 [ICC award No. 9448, July 1999]
see above (buyer not entitled to suspend because he had taken partial delivery of goods); CLOUT case No. 238 [Oberster Gerichtshof,
Austria, 12 February 1998] (in addition to right to avoid as to instalments under art. 73, seller has right to suspend under art. 71 (1)
but seller failed to establish its right in this case).
EP S.A.v FP Oy, Helsinki Court of Appeal, Finland, 30 June 1998, Unilex (where two separate orders for skincare ointment were to
be filled from the same batch of product and there was a fundamental breach with respect to the quality of the first delivery, the aggrieved
buyer could avoid as to the second delivery either under either article 72 or, if the two orders constituted instalments of an instalment
contract, under article 73 (2)); Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex (fundamental
breach as to future instalments is covered by both articles 72 and 73).
5
6
ICC award No. 9887, August 1999, Unilex (chemical substance); CLOUT case No. 251 [Handelsgericht des Kantons Zürich,
Switzerland, 30 November 1998] (lambskin coats); CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschaftlichen
Arbitrage, 29 December 1998] (cheese); CLOUT case No. 238 [Oberster Gerichtshof, Austria, 12 February 1998] (umbrellas); CLOUT
case No. 246 [Audiencia Provincial de Barcelona, Spain, 3 November 1997] (manufactured springs); CLOUT case No. 214 [Handelsgericht
des Kantons Zürich, Switzerland, 5 February 1997] (sunflower oil); CLOUT case No. 154 [Cour d’appel, Grenoble, France, 22 February
1995] (jeans); Arbitration award No. Vb 94124, Chamber of Commerce and Industry of Budapest, Hungary, 17 November 1995, Unilex
(mushrooms); Chansha Intermediate Peoples’ Court Economic Chamber, case No. 89, China, 18  September 1995, Unilex (molybdenum
iron alloy), also available on the Internet at http://www.cisg.law.pace.edu/cisg/wais/db/cases2/950918c1.html; Landgericht Ellwangen,
Germany, 21 August 1995, Unilex (peppers); ICC award No. 8128, 1995, Unilex (chemical fertilizer).
7
CLOUT case No. 251 [Handelsgericht des Kantons Zürich, Switzerland, 30 November 1998] (see full text of the decision).
CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg, 21 March, 21  June 1996] (see full text of the
decision).
8
9
Schiedsgericht der Börse für Landwirtschaftliche Produkte—Wien, Austria, 10 December 1997, Unilex (from economic perspective
two contracts for barley concluded on the same day calling for delivery during the same time period are part of same transaction and
therefore governed by art.  73).
10
CLOUT case No. 238 [Oberster Gerichtshof, Austria, 12 February 1998] (attempted suspension under art. 73 rather than art. 71).
EP S.A.v FP Oy, Helsinki Court of Appeal, Finland, 30 June 1998, Unilex (where two separate orders for skincare ointment were
to be filled from the same batch of product and there was a fundamental breach with respect to the first delivery, the aggrieved buyer
could avoid as to the second delivery either under either article 72 or, if the two orders constituted instalments of an instalment contract,
under article 73 (2)); Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex (fundamental breach as
to future instalments is covered by both articles 72 and 73).
11
Part three. Sale of goods
219
12
Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex (fundamental breach as to future instalments is covered by both articles 72 and 73).
13
CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg 21 March, 21  June 1996] (leaving open whether
contract in case before the court was an instalment contract) (see full text of the decision).
14
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997].
15
CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschaftlichen Arbitrage, 29 December 1998].
16
Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex.
17
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997].
Arbitration award No. 273/95, Zürich Handelskammer, Switzerland, 31 May 1996, Unilex (failure to deliver first instalment gave the
buyer good grounds for concluding that later instalments would not be delivered).
18
19
CLOUT case No. 293 [Arbitration—Schiedsgericht der Hamburger freundschaftlichen Arbitrage, 29 December 1998].
CLOUT case No. 265 [Arbitration—Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, Hungary,
25  May 1999].
20
21
CLOUT case No. 246 [Audiencia Provincial de Barcelona, Spain, 3 November 1997].
22
ICC award No. 9887, August 1999, Unilex.
23
Landgericht Ellwangen, Germany, 21 August 1995, Unilex.
24
Arbitration award No. Vb 94124, Chamber of Commerce and Industry of Budapest, Hungary, 17  November 1995, Unilex.
CLOUT case No. 154 [Cour d’appel, Grenoble, France, 22 February 1995] (resale of jeans in Africa and South America; also citing
art. 64 (1)).
25
26
CLOUT case No. 246 [Audiencia Provincial de Barcelona, Spain, 3 November 1997].
Part three. Sale of goods
221
Section II of Part III, Chapter V
Damages (articles 74-77)
Overview
1. Articles 45 (1) (b) and 61 (1) (b) of the CISG provide
that an aggrieved buyer and an aggrieved seller, respectively, may claim damages as provided in articles 74 to 77
if the other party “fails to perform any of his obligations
under the contract or this Convention.” Articles 74 to 77,
which comprise Section II of Chapter V of Part III, set out
the damage formulas that apply to the claims of both
aggrieved sellers and aggrieved buyers. These damage provisions are exhaustive and exclude recourse to domestic
law.1
2. Article 74 establishes the general formula applicable
in all cases where an aggrieved party is entitled to recover
damages. It provides that “damages for breach of contract”
comprise all losses, including loss of profits, caused by the
breach, to the extent that these losses were foreseeable by
the breaching party at the time the contract was concluded.
An aggrieved party may claim under article 74 even if
entitled to claim under article 75 or 76.2 The latter articles
explicitly provide that an aggrieved party may recover additional damages under article 74.
3. Articles 75 and 76 apply only in cases where the contract has been avoided. Article 75 measures damages concretely by reference to the price in a substitute transaction,
while article 76 measures damages abstractly by reference
to the current market price. Article 76 (1) provides that an
aggrieved party may not calculate damages under article  76
if it has concluded a substitute transaction under article  75.3
If, however, an aggrieved party concludes a substitute transaction for less than the contract quantity, both articles 75
and 76 may apply.4
4. Pursuant to article 77, damages recoverable under articles 74, 75 or 76 are reduced if it is established that the
aggrieved party failed to mitigate losses. The reduction is
the amount by which the loss should have been mitigated.
5. Several courts have deduced general principles from
the provisions of Section II. Decisions assert that full compensation to an aggrieved party is a general principle on
which the Convention is based.5 Another decision states
that the Convention prefers “concrete” calculation of damages by reference to actual transactions or losses over
abstract calculation by reference to the market price.6 It has
been stated that the purpose of money damages under the
Convention is to put the aggrieved party in the economic
position he would have been in had the contract been properly performed (protection of indemnity and expectation
interests) or, as an alternative, to compensate the aggrieved
party for expenses he reasonably incurred in reliance on
the contract when the purpose of those expenses is lost
because of the breach.7
Relation to other articles
6. Article 6 provides that parties may agree to derogate
from or vary the provisions of the Convention, including
the damage provisions set out in Section II of Chapter V.
Several decisions implicitly rely on article 6 when enforcing contract terms limiting8 or liquidating9 damages. One
decision concluded that where the parties had agreed that
an aggrieved party was entitled to a “compensation fee” if
the contract was avoided because of the acts of the other
party, the aggrieved party was entitled to recover both the
compensation fee and damages under article 75.10 Another
decision concluded that a post-breach agreement settling a
dispute with respect to a party’s non-performance displaces
the aggrieved party’s right to recover damages under the
damage provisions of the Convention.11 The validity of contract terms that address damages is governed by applicable
domestic law rather than the Convention (article 4 (a)).
7. A party who fails to perform is exempt from damages
if he proves that the requirements of article 79 or article  80
are satisfied. Under article 79, the nonperforming party
must show that “the failure was due to an impediment
beyond his control” and “that he could not reasonably be
expected to have taken the impediment into account at the
time of the conclusion of the contract or to have avoided
or overcome it or its consequences”. If the exempt party
does not give timely notice of the impediment and its effect
as required by article 79 (4), however, he will be liable for
damages resulting to the other party from such non-receipt
(article 79 (4)). Under article 80, an aggrieved party may
not rely on a breach by the other party to the extent that
the breach was caused by the aggrieved party’s act or
omission.
8. Article 44 provides that a party who fails to give due
notice of non-conformity as required by articles 39 or 43
nevertheless has the option to recover damages “except for
loss of profit” if he establishes a reasonable excuse for his
failure.
9. Article 50 authorizes an aggrieved buyer to reduce the
price according to a stated formula when it receives and
keeps non-conforming goods. The buyer may waive its
right to damages under articles 74 to 76 by claiming instead
reduction of the price under article 50.12
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10. If the contract is avoided, an aggrieved party who
claims damages under article 75 or 76 is also subject to
articles 81 to 84 on the effects of avoidance. Although
avoidance generally releases the parties from their obligations under the contract, a party’s right to damages survives
avoidance (article 81 (1)).13
of damages or a reduction in damages. The same opinion
concludes, however, that applicable domestic law rather than
the Convention governs how a judge should reach his opinion (e.g. the weight to be given evidence) as this is a matter
not governed by the Convention.18
11. Other articles of the Convention may require a party
to take specific measures to protect against losses. Articles 85 to 88, for example, state when and how a buyer or
seller must preserve goods in their possession.14 The party
taking such measures is entitled by these articles to recover
reasonable expenses.15
Set off
Burden of proof
12. Although none of the damage formulas in articles 74,
75 and 76 expressly allocates the burden of proof, one court
has concluded that the Convention recognizes the general
principle that the party who invokes a right bears the burden
of establishing that right, and that this principle excludes
application of domestic law with respect to burden of proof.16
Thus, the court opined, an aggrieved party claiming damages
under articles 74, 75 and 76, or the breaching party claiming
a reduction in damages under article 77,17 will bear the burden of establishing his entitlement to as well as the amount
13. Although the Convention does not address the issue
of whether a counterclaim may be set off against a claim
under the Convention,19 the Convention does determine
whether a counterclaim arising from the sales contract
exists.20 If such a counterclaim does exist, then it may be
subject to set off against a claim arising under the
Convention.21
Jurisdiction; place of payment
of damages
14. Several decisions have concluded that, for the purposes of determining jurisdiction, damages for breach of
contract are payable at the claimant’s place of business.22
These decisions reason that the Convention includes a general principle that a creditor is to be paid at its domicile
unless the parties otherwise agree.
Notes
1
CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997] (recourse to national law on damages excluded).
CLOUT case No. 427 [Oberster Gerichtshof, Austria, 28 April 2000] (aggrieved party may claim under article 74 even if it could
also claim under articles 75 or 76).
2
See ICC award No. 8574, September 1996, Unilex (no recovery under article 76 because the aggrieved party had entered into substitute transactions within the meaning of article 75). See, however, CLOUT case No. 227 [Oberlandesgericht Hamm, Germany, 22  September 1992] (damages calculated under article 76 rather than article 75 where aggrieved seller resold goods for one-fourth of contract
price and for less than current market price).
3
CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994]. See also ICC award No. 8740, October 1996,
Unilex (aggrieved buyer who was unable to establish the market price was not entitled to recover under article 76, and was entitled to
recover under article 75 only to the extent it had made substitute purchases); but compare CIETAC award, China, 30 October 1991,
available on the Internet at http://cisgw3.law.pace.edu/cases/911030c1.html (aggrieved buyer who had made purchases for only part of
the contract quantity nevertheless awarded damages under article 75 for contract quantity times the difference between the contract price
and the price in the substitute transaction).
4
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision); CLOUT case No. 93 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, Austria, 15 June 1994] (citing article 74
for general principle within meaning of art. 7 (2)).
5
6
CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg, 21 March, 21  June 1996] (CISG favors concrete
calculation of damages over the reference to market price in the article 76 formula) (see full text of the decision). See also CLOUT
case No. 348 [Oberlandesgericht Hamburg, Germany, 26 November 1999] (damages not awarded under article  76 because they could be
calculated by reference to actual transactions).
7
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision).
Hovioikeus [Court of Appeal] Turku, Finland, 12 April 2002, available (in English translation) on the Internet at http://cisgw3.law.
pace.edu/cases/020412f5.html (warranty term limiting recovery of damages enforceable).
8
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation,
award in case No. 302/96 of 27 July 1999, published in Rozenberg, Practika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda:
Haychno-Practicheskiy Commentariy Moscow (1999–2000) No. 27 [141–147] (liquidated damages substantiated; aggrieved buyer’s damages calculated on basis of lost profits); Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation, award in case No.  251/1993 of 23  November 1994, Unilex (damages for delay granted only to
extent of contract clause stipulating penalty for delay).
9
10
11
CLOUT case No. 301 [Arbitration—International Chamber of Commerce No. 7585 1992].
CIETAC award No. 75, China, 1 April 1993, Unilex, also available on the INTERNET at http://www.cisg.law.pace.edu/cgi-bin/isearch.
Part three. Sale of goods
223
12
CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and
Industry, Russian Federation, award in case No. 54/1999 of 24 January 2000].
13
CLOUT case No. 166 [Arbitration—Schiedsgericht der Handelskammer Hamburg, 21 March, 21  June 1996] (damage provisions
prevail over consequences of avoidance under articles 81–84).
14
CIETAC award, China, 6 June 1991, available on the Internet at http://www.cietac-sz.org.cn/cietac/index.htm (splitting cost of freight
for return of goods between buyer who failed to return goods in a reasonable manner and seller who did not cooperate in return).
15
See, e.g., CLOUT case No. 304 [Arbitration—International Chamber of Commerce No. 7531 1994] (awarding damages under article  74 for expenses incurred to preserve goods under articles 86, 87 and 88 (1)). See also CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1993] (awarding damages for expenses incurred in preserving perishable goods even though not
required to do so by articles 85 to 88) (see full text of the decision).
16
FCF S.A. v. Adriafil Commerciale S.r.l., Bundesgericht, Switzerland, 15 September 2000, available on the Internet at http://www.
bger.ch. See also CLOUT case No. 217 [Handelsgericht des Kantons Aargau, Switzerland, 26 September 1997] (aggrieved party has
burden of establishing loss); ICC award No. 7645, March 1995, Unilex (“Under general principles of law” the party claiming damages
has burden of establishing existence and amount of damages caused by the breach of the other party). See generally CLOUT case
No.  378 [Tribunale di Vigevano, Italy, 12 July 2000] (deriving from article 79 a general principle that claimant has burden of establishing
its claim).
17
Article 77 of the Convention expressly provides that the party in breach may claim a reduction if the other party fails to take
measures to mitigate the loss.
18
FCF S.A. v. Adriafil Commerciale S.r.l., Bundesgericht, Switzerland, 15 September 2000, available on the Internet at http://www.
bger.ch (construing article 8 of Swiss Civil Code). See also CLOUT case No. 261 [Bezirksgericht der Sanne, Switzerland, 20 February
1997] (domestic law, rather than the Convention, determines how damages are to be calculated if the amount cannot be determined);
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5  February 1997] (domestic law determines whether estimate
of damages for future losses is sufficiently definite).
19
CLOUT case No. 288 [Oberlandesgericht München, Germany 28 January 1998] (applicable law, not the Convention, determines
whether set off permitted); CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993] (applicable domestic law
determines whether set off allowed). But see CLOUT case No. 630 [Court of Arbitration of the International Chamber of Commerce,
Zurich, Switzerland, July 1999] (appearing to suggest that, because the Convention itself does not provide set-off as a remedy for
aggrieved buyers, buyer was not entitled to set off damages against its liability for the price of delivered goods).
20
CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9 June 1995] (set-off permitted under applicable national law; counterclaim determined by reference to Convention). But see CLOUT case No. 170 [Landgericht Trier, Germany, 12 October 1995] (counterclaim arose under Convention; set off permitted under Convention).
21
CLOUT case No. 348 [Oberlandesgericht Hamburg, Germany, 26 November 1999] (buyer’s counterclaim offset against seller’s claim
for price); CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (buyer damages set off against price); CLOUT
case No. 273 [Oberlandesgericht München, Germany, 9 July 1997] (buyer’s counterclaim would have been allowable as set off but seller
had not breached). See also CLOUT case No. 280 [Oberlandesgericht Jena, Germany, 26 May 1998] (implicitly recognizing the possibility that buyer’s tort claim could be raised in order to be set off against seller’s claim for the price, but applying CISG notice provisions
to bar tort claim). But see CLOUT case No. 630 [Court of Arbitration of the International Chamber of Commerce, Zurich, Switzerland,
July 1999] (appearing to suggest that, because the Convention itself does not provide set-off as a remedy for aggrieved buyers, buyer
was not entitled to set off damages against its liability for the price of delivered goods).
22
CLOUT case No. 205 [Cour d’appel, Grenoble, France, 23 October 1996] (deriving from article 57 (1) a general principle that the
place of payment is the domicile of creditor); CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993] (deriving
general principle on place of payment from article 57 (1)).
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Article 74
Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such
damages may not exceed the loss which the party in breach foresaw or ought to have
foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the
breach of contract.
Overview
1. Article 74 sets out the Convention’s general formula
for the calculation of damages. The formula is applicable
if a party to the sales contract breaches its obligations under
the contract or the Convention.1 The first sentence of article  74 provides for the recovery of all losses, including loss
of profits, suffered by the aggrieved party as a result of the
other party’s breach. The second sentence limits recovery
to those losses that the breaching party foresaw or could
have foreseen at the time the contract was concluded. The
formula applies to the claims of both aggrieved sellers and
aggrieved buyers.
2. The Convention determines the grounds for recovery
of damages, but domestic procedural law may apply to the
assessment of evidence of loss.2 Applicable domestic law
also determines whether a party may assert a right to set
off in a proceeding under the Convention (see paragraph  37
below). Domestic substantive law may also govern issues
relevant to the determination of the amount of damages,
such as the weighing of evidence.3
the amount by which the loss should have been mitigated.
See the Digest for article 77.
7. Article 78 expressly provides for the recovery of interest in specified cases but states that its provisions are “without prejudice to any claim for damages recoverable under
Article 74”. Several decisions have awarded interest under
article  74.9 Interest has been awarded as damages where
the circumstances were not covered by article  78 because
the interest claim did not relate to sums in arrears.10
8. An aggrieved seller may require the buyer to pay the
price pursuant to article  62. An abstract of an arbitral opinion suggests that the tribunal awarded the seller the price
as damages under article 74.11
Right to damages
3. One tribunal has derived from the damage formula in
article 74 a general principle of full compensation. Pursuant
to article 7 (2), the tribunal used this general principle to
fill the gap in article 78, which provides for the recovery
of interest in stated circumstances but does not indicate
how the rate of interest is to be determined.4
9. Article 74 provides a general formula for the calculation of damages. The right to claim damages is set out in
articles 45 (1) (b) and 61 (1) (b). These paragraphs provide
that the aggrieved buyer and the aggrieved seller, respectively, may claim damages as provided in articles 74 to 77
if the other party “fails to perform any of his obligations
under the contract or this Convention”. Thus, the article 74
formula may be used for calculating damages for breach
of obligations under the Convention as well as breach of
provisions of the sales contract.12
4. In accordance with article 6 a seller and buyer may
agree to derogate from or vary article 74. Several decisions
enforce contract terms limiting5 or liquidating6 damages.
The validity of these contract terms is, by virtue of article  4  (a), governed by applicable domestic law rather than
the Convention.7
10. Article 74 states that damages may be awarded for
“breach of contract” that causes loss, without any qualification as to the seriousness of the breach or the loss. An
abstract of one arbitral award suggests nevertheless that
damages may be recovered under article 74 for “fundamental non-performance”.13
Relation to other articles
5. An aggrieved party may choose to claim under article  74 even if entitled to claim under articles 75 and 76.8
The latter provisions explicitly provide that an aggrieved
party may recover additional damages under article 74.
6. Damages recoverable under articles 74 are reduced if
it is established that the aggrieved party failed to mitigate
these damages as required by article 77. The reduction is
11. Under articles 45 and 61 an aggrieved party is entitled to recover damages without regard to the “fault” of
the breaching party. Several decisions consider whether
claims based on a party’s negligence are covered by the
Convention. An arbitral award concluded that an aggrieved
buyer failed to notify the seller of non-conformity in a
timely manner as required by article 39 of the Convention,
and the tribunal applied domestic civil law to divide the
loss equally between the seller and the buyer on the
ground that the Convention did not govern the issue of
joint contribution to harm.14 A court decision concluded
Part three. Sale of goods
that the Convention did not cover a claim that the alleged
seller had made a negligent misrepresentation inducing the
conclusion of the sales contract.15
12. When an aggrieved buyer fails, without excuse,16 to
give timely notice to a breaching seller in accordance with
articles 39 or 43, the aggrieved buyer loses its right to rely
on the seller’s breach when making a claim for damages.17
Under article 44 of the Convention, however, if the buyer
has a “reasonable excuse” for failing to give the required
notice, the aggrieved buyer may nevertheless recover damages other than lost profits.18
13. Article 79 excuses a breaching party from the payment of damages (but not from other remedies for nonperformance) if he proves that his non-performance was
due to an impediment that satisfies the conditions of paragraph (1) of article 79. Paragraph (4) of article 79 provides,
however, that the breaching party will be liable for damages
resulting from the other party’s non-receipt of a timely
notice of the impediment and its effects.
14. Article 80 provides that an aggrieved party may not rely
on a breach by the other party to the extent that the breach
was caused by the aggrieved party’s act or omission.
Types of losses
15. The first sentence of article 74 provides that an
aggrieved party’s damages consist of a monetary sum to
compensate him for “loss, including loss of profit, suffered
. . . as a consequence of the breach”. Except for the explicit
inclusion of lost profits, article 74 does not otherwise classify losses. Decisions sometimes refer to the classification
of damages under domestic law.19 It has been held that a
buyer who has received non-conforming goods and has not
avoided the contract is entitled to recover damages under
article 74 measured by the difference between the value of
the goods the buyer contracted for and the value of the
non-conforming goods that were actually delivered.20
– Losses arising from death or personal injury
16. Article 5 provides that losses arising from death or
personal injury are excluded from the Convention’s coverage. However, when deciding on its jurisdiction, one court
implicitly assumed that the Convention covers claims by a
buyer against its seller for indemnification against claims
by a sub-buyer for personal injury.21
– Losses arising from damage to other property
17. Article 5 does not exclude losses for damage to property other than the goods purchased.22
– Losses arising from damage to
non-material interests
18. Article 74 does not exclude losses arising from damage to non-material interests, such as the loss of an
225
aggrieved party’s reputation because of the other party’s
breach. Some decisions have implicitly recognized the right
to recover damages for loss of reputation or good will,23
but at least one decision has denied such recovery under
the Convention.24 One court found claims for both loss of
turnover and loss of reputation to be inconsistent.25
– Losses arising from change in value of money
19. Article 74 provides for recovery of “a sum equal to
the loss” but does not expressly state whether this formula
covers losses that result from changes in the value of
money. Several courts have recognized that an aggrieved
party may suffer losses as a result of non-payment or delay
in the payment of money. These losses may arise from
fluctuations in currency exchange rates or devaluation of
the currency of payment. Tribunals differ as to the appropriate solution. Several decisions have awarded damages to
reflect currency devaluation26 or changes in the cost of living.27 On the other hand, several other decisions refused to
award damages for such losses. One decision concluded
that a claimant that is to receive payment in its own currency is generally not entitled to recover losses from currency devaluation, but went on to suggest that a claimant
might recover damages for currency devaluations if it was
to be paid in foreign currency and it had a practice of
converting such currency immediately after payment.28
Another court stated that while devaluation of the currency
in which the price was to be paid could give rise to damages recoverable under the Convention, no damages could
be awarded in the case before it because future losses could
be awarded only when the loss can be estimated.29
Expenditures by aggrieved party
20. Many decisions have recognized the right of an
aggrieved party to recover reasonable expenditures incurred
in preparation for or as a consequence of a contract that
has been breached. The second sentence of article 74 limits
recovery to the total amount of losses the breaching party
could foresee at the time the contract was concluded (see
paragraphs 32-34 below). Although the Convention does
not expressly require that expenditures be reasonable several decisions have refused to award damages when the
expenditures were unreasonable.30
21. Decisions have awarded incidental damages to an
aggrieved buyer who had made reasonable expenditures for
the following purposes: inspection of non-conforming
goods;31 handling and storing non-conforming goods;32 preserving goods;33 shipping and customs costs incurred when
returning the goods;34 expediting shipment of substitute
goods under an existing contract with a third party;35 installing substitute goods;36 sales and marketing costs;37 commissions;38 hiring a third party to process goods;39 obtaining
credit;40 delivering and taking back the non-conforming
goods to and from a sub-buyer;41 reimbursing sub-buyers
on account of non-conforming goods;42 moving replacement coal from stockpiles;43 loss incurred in sub-chartering
a ship that had been chartered to transport goods under a
contract that the seller properly avoided.44 Several decisions
have awarded buyers who took delivery of non-conforming
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goods the reasonable costs of repair as damages.45 At least
one decision implicitly recognizes that an aggrieved buyer
may recover incidental damages, although in the particular
case the buyer failed to establish such damages.46 Another
decision assumed that the Convention governed a buyer’s
claim for indemnification for expenses incurred in reimbursing a sub-buyer for personal injury caused to an
employee.47
22. Decisions may recognize that an aggrieved buyer may
recover for particular types of expenditure but deny recovery in a particular case. Some decisions explicitly recognize
that recovery is possible for the type of expenditure but
deny recovery for failure of proof, lack of causation, or
their unforeseeability by the breaching party. Thus one
decision recognized the potential recovery of a buyer’s
advertising costs but declined to award damages because
the buyer failed to carry its burden of proof.48 Other decisions may implicitly assume the right to recover particular
expenditures. When deciding on its jurisdiction, one court
implicitly assumed that the Convention covers claims by a
buyer against its seller for indemnification of a sub-buyer’s
claim for personal injury.49
23. Aggrieved sellers have recovered damages for the following incidental expenses: storage of goods at the port of
shipment following the buyer’s anticipatory breach;50 storage and preservation of undelivered machinery;51 the cost
of modifying a machine in order to resell it;52 costs related
to the dishonour of the buyer’s cheques.53 A seller who has
delivered non-conforming goods and subsequently cures
the non-conformity is not entitled to recover the cost of
cure.54
– Expenditures for debt collection; attorney’s fees
24. Decisions are split on whether the cost of using a debt
collection agency other than a lawyer may be recovered as
damages. One decision awarded the seller the cost,55 but
several other decisions state that an aggrieved party may
not recover compensation for the cost of hiring a debt collection agency because the Convention does not cover such
expenses.56
25. A number of courts and arbitral tribunals have considered whether an aggrieved party may recover the costs
of a lawyer hired to collect a debt arising from a sales
contract. Several decisions award damages to compensate
for legal fees for extra-judicial acts such as the sending of
collection letters.57 One decision distinguished between the
extra-judicial fees of a lawyer in the forum and similar fees
of a lawyer in another jurisdiction it included the fees of
the former in the allocation of litigation costs under the
forum’s rules and awarded the fees of the latter as damages
under article 74 of the Convention.58
26. Decisions are split as to whether attorney’s fees for
litigation may be awarded as damages under article 74.59
Citing article 74, several arbitral tribunals have awarded
recovery of attorney’s fees for the arbitration proceedings.60
In a carefully reasoned award, another arbitral tribunal concluded that a supplemental interpretation of the arbitration
clause by reference to both article 74 and local procedural
law authorized the award of attorney’s fees before a tribunal
consisting of lawyers.61 Another court stated that, in principle, legal costs could be recovered, although the court
denied them in the particular case.62 Many cases award
attorney’s fees without indicating whether the award is for
damages calculated under article 74 or is made pursuant
to the tribunal’s rules on the allocation of legal fees.63 Several decisions have limited or denied recovery of the amount
of the claimant’s attorney’s fees on the grounds that the
fees incurred were unforeseeable64 or that the aggrieved
party had failed to mitigate these expenses as required by
article 77.65 An appellate court in the United States reversed
a decision awarding attorney’s fees as damages under article 74 on the ground, inter alia, that the Convention did
not implicitly overturn the “American rule” that the parties
to litigation normally bear their own legal expenses, including attorneys’ fees.66
Lost profits
27. The first sentence of article 74 expressly states that
damages for losses include lost profits. Many decisions
have awarded the aggrieved party lost profits67. When calculating lost profits, fixed costs (as distinguished from variable costs incurred in connection with fulfilling the specific
contract) are not to be deducted from the sales price.68 One
decision awarded a seller who had been unable to resell
the goods the difference between the contract price and the
current value of those goods.69
28. The second sentence of article 74 limits the damages
that can be awarded for losses caused by the breach to
losses that the breaching party foresaw or should have foreseen at the time the contract was concluded. One decision
reduced the recovery of profits because the breaching seller
was not aware of the terms of the buyer’s contract with its
sub-buyer.70
29. Damages for lost profits will often require predictions
of future prices for the goods or otherwise involve some
uncertainty as to actual future losses. Article 74 does not
address the certainty with which these losses must be
proved. One decision required the claimant to establish the
amount of the loss according to the forum’s “procedural”
standards as to the certainty of the amount of damages.71
30. Evidence of loss of profits, according to one decision,
might include evidence of orders from customers that the
buyer could not fill, evidence that customers had ceased to
deal with the buyer, and evidence of loss of reputation as
well as evidence that the breaching seller knew or should
have known of these losses.72
– Damages for “lost volume” sales
31. In principle, an aggrieved seller who resells the goods
suffers the loss of a sale when he has the capacity and
market to sell similar goods to other persons because, without the buyer’s breach, he would have been able to make
two sales. Under these circumstances a court has concluded
that the seller was entitled to recover the lost profit from
the first sale.73 Another court, however, rejected a claim for
Part three. Sale of goods
a “lost sale” because it did not appear that that the seller
had been planning to make a second sale at the time the
breached contract was negotiated.74 An aggrieved buyer
may have a similar claim to damages. A court concluded
that a buyer could recover for damages caused by its inability to meet the market demand for its product as a result
of the seller’s delivery of non-conforming components.75
Foreseeability
32. The second sentence of article 74 limits recovery of
damages to those losses that the breaching party foresaw
or could have foreseen at the time the contract was concluded as a possible consequence of its breach. It has been
noted that it is the possible consequences of a breach, not
whether a breach would occur or the type of breach, that
is subject to the foreseeability requirement of article 74;
and it has been suggested that article 74 does not demand
that the specific details of the loss or the precise amount
of the loss be foreseeable.76
33. Decisions have found that the breaching party could
not have foreseen the following losses: rental of machinery
by buyer’s sub-buyer;77 processing goods in a different
country following late delivery;78 an exceptionally large
payments to freight forwarder;79 attorney’s fees in dispute
with freight forwarder;80 the cost of resurfacing a grinding
machine where that cost exceeded price of wire to be
ground;81 lost profits where breaching seller did not know
terms of contract with sub-buyer;82 the cost of inspecting
the goods in the importing country rather than exporting
country.83
34. On the other hand, several decisions have explicitly
found that claimed damages were foreseeable. One decision
states that the seller of goods to a retail buyer should foresee that the buyer would resell the good,84 while an arbitration tribunal found that a breaching seller could have
foreseen the buyer’s losses because the parties had corresponded extensively on supply problems.85 Another decision concluded that a breaching buyer who failed to pay
the price in advance, as required by the contract, could
foresee that an aggrieved seller of fungible goods would
lose its typical profit margin.86 A majority of another court
awarded ten per cent of the price as damages to a seller
227
who had manufactured the goods to the special order of
the buyer; the majority noted that a breaching buyer could
expect such a seller’s profit margin.87 It has also been held
that a buyer could foresee that its failure to establish a
letter of credit as required by the sales contract would leave
the seller with a chartered vessel, intended to transport the
goods, that it could not use; the loss the seller incurred in
sub-chartering that vessel was thus recoverable under article 74.88
Burden and standard of proof
35. Although none of the damage formulae in articles 74,
75 and 76 expressly allocates the burden of proof, those
decisions that address the issue agree, more or less
expressly, that the party making the claim bears the burden
of establishing its claim.89 One court gave effect to a
national law rule that, if a breaching seller acknowledges
defects in the delivered goods, the burden of establishing
that the goods conformed to the contract shifts to the
seller.90 Another decision expressly placed the burden of
establishing damages on the claimant.91
36. Several decisions state that domestic procedural and
evidentiary law rather than the Convention governs the
standard of proof and the weight to be given evidence when
determining damages.92
Set off
37. Although the Convention does not address the issue
of whether a counterclaim may be set off against a claim
under the Convention,93 the Convention does determine
whether a counterclaim arising from a sales contract exists94
and, if it does, the counterclaim may then be subject to set
off against a claim arising under the Convention.95
Jurisdiction; place of payment of
damages
38. Several decisions have concluded that, for the purpose
of determining jurisdiction, damages for breach of contract
are payable at the claimant’s place of business.96
Notes
Articles 45 (1) (b) and 61 (1) (b) provide that the aggrieved buyer and the aggrieved seller, respectively, may recover damages as
provided in articles 74 to 77 if the other party fails to perform as required by the contract or the Convention.
1
Helsingin hoviokeus [Helsinki Court of Appeals], Finland, 26 October 2000, available in English translation on the Internet at http://
cisgw3.law.pace.edu/cases/001026f5.html (grounds for recovery determined under the CISG but calculation of damages made under
article  17 of the Finnish Law of Civil Procedure); CLOUT case No. 261 [Bezirksgericht der Sanne, Switzerland, 20 February 1997]
(applicable domestic law determines how to calculate damages when amount cannot be determined); CLOUT case No. 85 [Federal District Court, Northern District of New York, United States, 9 September 1994] (referring to “sufficient evidence [under common law and
law of New York] to estimate the amount of damages with reasonable certainty”), affirmed CLOUT case No. 138 [Federal Court of
Appeals for the Second Circuit, United States, 6 December 1993, 3 March 1995].
2
3
See, e.g., CLOUT case No. 377 [Landgericht Flensburg, Germany, 24 March 1999] (aggrieved seller recovers damages under article  74
for losses caused by the buyer’s delay in payment but applicable domestic law determines whether payment was delayed because Convention is silent on time of payment).
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4
CLOUT case No. 93 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, 15 June
1994] (deriving general principle from article 74 for purposes of filling gap in article 78, in accordance with article 7 (2)). See also
CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6 December 1993, 3 March 1995] (article 74 is
“designed to place the aggrieved party in as good a position as if the other party had properly performed the contract”) (see full text
of the decision).
5
Hovioikeus Turku, Finland, 12 April 2002, available (in English translation) on the Internet at http://cisgw3.law.pace.edu/cases/
020412f5.html (contract term limiting recovery of damages is enforceable).
6
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, award in
case No. 302/1996, 27 July 1999, published in Rozenberg, Practika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda: HaychnoPracticheskiy Commentariy Moscow (1999–2000) No. 27 [141–147] (liquidated damage clause displaces remedy of specific performance;
amount of liquidated damages was reasonable and foreseeable under article 74 as measure of expected profit); Tribunal of International
Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, award in case No. 251/93 of 23 November
1994, Unilex (damages for delay granted only to extent of contract penalty for delay clause).
7
See CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (term in seller’s general conditions limiting damages not validly incorporated into contract) (see full text of the decision); CLOUT case No. 345 [Landgericht Heilbronn, Germany,
15  September 1997] (validity of standard term excluding liability determined by domestic law, but reference in domestic law to nonmandatory rule replaced by reference to equivalent Convention provision).
8
CLOUT case No. 427 [Oberster Gerichtshof, Austria, 28 April 2000] (aggrieved party may claim under article 74 even if it could
also claim under articles 75 or 76). See also CLOUT case No. 140 [Tribunal of International Commercial Arbitration at the Russian
Federation Chamber of Commerce and Industry, Russia, award in case No. 155/1994 of 16 March 1995] (citing article 74, the tribunal
awarded buyer the difference between contract price and price in substitute purchase) ; CLOUT case No. 93 [Arbitration—Internationales
Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, Austria, 15 June 1994] (awarding seller, without citation of specific Convention article, difference between contract price and price in substitute transaction).
See, e.g., Van Dongen Waalwijk Leder BV v. Conceria Adige S.p.A., Gerechtshof ’s‑Hertogenbosch, the Netherlands, 20 October 1997,
Unilex (interest awarded under both articles 74 and 78); Pretura di Torino, Italy, 30 January 1997, Unilex (aggrieved party entitled to
statutory rate of interest plus additional interest it had established as damages under article 74); also available on the Internet at http://
www.cisg.law.pace.edu/cisg/wais/db/cases2/970130i3.html; CLOUT case No. 193 [Handelsgericht des Kantons Zürich, Switzerland, 10
July 1996] (seller awarded interest under article 74 in amount charged on bank loan to seller that was needed because of buyer’s nonpayment); Amtsgericht Koblenz, Germany, 12 November 1996, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/
text/400.htm (bank certificate established that aggrieved seller was paying higher interest rate than official rate under applicable law);
Käräjäoikeus of Kuopio, Finland, 5 November 1996, available on the Internet at http://www.utu.fi/oik/tdk/xcisg/tap6.html (breaching party
could foresee aggrieved party would incur interest charges, but not the actual rate of interest in Lithuania); CLOUT case No. 195 [Handelsgericht des Kantons Zürich, Switzerland, 21 September 1995] (seller entitled to higher interest under article 74 if he established
damages caused by non-payment); CLOUT case No. 281 [Oberlandesgericht Koblenz, Germany, 17 September 1993]; CLOUT case
No.  130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994] (damages includes interest paid by aggrieved seller on bank loans);
CLOUT case No. 104 [Arbitration—International Chamber of Commerce No. 7197 1993] (interest awarded at commercial bank rate in
Austria); Landgericht Berlin, Germany, 6 October 1992, available on the Internet at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/
text/173.htm (assignee of aggrieved party’s claim entitled to recover 23% interest rate charged by assignee); CLOUT case No. 7 [Amtsgericht Oldenburg in Holstein, Germany, 24 April 1990] (seller recovered price and interest at the statutory rate in Italy plus additional
interest as damages under article 74). See also CLOUT case No. 377 [Landgericht Flensburg, Germany, 24 March 1999] (aggrieved
party had right to recover damages under the Convention for losses resulting from delay in payment but applicable domestic law determines when delay becomes culpable); CLOUT case No. 409 [Landgericht Kassel, Germany, 15 February 1996] (failure to establish
additional damages under article 74); CLOUT case No. 132 [Oberlandesgericht Hamm, Germany, 8 February 1995] (claimant awarded
statutory interest rate under article 78 but claimant failed to establish payment of higher interest rate for purposes of recovering damages
under article  74).
9
See, e.g., Stockholm Chamber of Commerce Arbitration Award, Sweden, 1998, Unilex (aggrieved buyer entitled to recover interest
on reimbursable costs it incurred following sub-buyer’s rightful rejection of goods).
10
11
ICC award No. 8716, February 1997, (Fall 2000) ICC International Court of Arbitration Bulletin, vol. 11, No. 2, pp. 61-63 (damages
awarded in amount of price).
12
See, e.g., CLOUT case No. 51 [Amtsgericht Frankfurt a.M., Germany, 31 January 1991] (seller’s failure to notify the buyer that the
seller was suspending performance in accordance with article 71 (3) was itself a breach of the Convention entitling buyer to
damages).
13
ICC award No. 8716, February 1997, (Fall 2000) ICC International Court of Arbitration Bulletin, vol. 11, No. 2, pp. 61-63.
Bulgarian Chamber of Commerce and Industry arbitration case No. 56/1995, Bulgaria, 24 April 1996, Unilex (setting a 50/50 division of the 10 percent of price held back by buyer because of non-conformity of goods).
14
15
Geneva Pharmaceuticals Tech. Corp. v. Barr Laboratories, Inc., United States, 10 May 2002, Unilex (domestic law “tort” claim of
negligent misrepresentation not preempted by Convention). See also CLOUT case No. 420 [Federal District Court, Eastern District of
Pennsylvania, United States, 29 August 2000] (Convention does not govern non-contractual claims).
16
See CISG arts. 40 (buyer’s failure is excused when seller could not have been unaware of non-conformity and failed to disclose
nonconformity to buyer) and 44 (preserving spedified remedies for the buyer if he has “reasonable excuse” for failure to notify). See
also CLOUT case No. 294 [Oberlandesgericht Bamberg, Germany, 13 January 1999] (buyer need not give notice declaring avoidance
of contract when seller stated it would not perform); CLOUT case No. 94 [Arbitration—Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft—Wien, Austria, 15 June 1994] (seller estopped from asserting buyer’s failure to give timely notice).
See, e.g., CLOUT case No. 364 [Landgericht Köln, Germany, 30 November 1999] (failure to give sufficiently specific notice);
CLOUT case No. 344 [Landgericht Erfurt, Germany, 29 July 1998] (failure to give sufficiently specific notice); CLOUT case No. 280
17
Part three. Sale of goods
229
[Oberlandesgericht Jena, Germany, 26 May 1998] (failure to satisfy article 39 bars both CISG and tortious claims for damages); CLOUT
case No. 282 [Oberlandesgericht Koblenz, Germany, 31 January 1997] (failure to give sufficiently specific notice); CLOUT case No.  196
[Handelsgericht des Kantons Zürich, Switzerland, 26 April 1995] (failure to give timely notice); CLOUT case No. 192 [Obergericht des
Kantons Luzern, Switzerland, 8 January 1997] (failure to give timely notice); CLOUT case No. 167 [Oberlandesgericht München, Germany, 8 February 1995] (failure to notify); CLOUT case No. 82 [Oberlandesgericht Düsseldorf, Germany, 10 February 1994] (failure
to notify); CLOUT case No. 50 [Landgericht Baden-Baden, Germany, 14 August 1991] (failure to give timely notice of non-conformity);
CLOUT case No. 4 [Landgericht Stuttgart, Germany, 31 August 1989] (failure to examine and notify of non-conformity of goods).
18
CLOUT case No. 474 [Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and
Industry, Russia, award in case No. 54/1999 of 24 January 2000].
19
See, e.g., CLOUT case No. 427 [Oberster Gerichtshof, Austria, 28 April 2000] (loss of profit in case was “positive damage”) (see
full text of the decision); CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit United States 6 December 1995]
(“incidental and consequential” damages) (see full text of the decision) affirming CLOUT case No. 85 [Federal District Court, Northern
District of New York, United States, 9 September 1994].
20
CLOUT case No. 596 [Oberlandesgericht Zweibrücken, Germany, 2 February 2004] (see full text of the decision).
21
CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993].
See CLOUT case No. 196 [Handelsgericht des Kantons Zürich, Switzerland 26 April 1995] (recovery for damage to house in which
a container for “weightless floating” installed).
22
23
Helsingin hoviokeus, Finland, 26 October 2000, available in English translation on the Internet at http://cisgw3.law.pace.edu/cases/
001026f5.html (recovery of good will calculated in accordance with national rules of civil procedure); CLOUT case No. 331 [Handelsgericht des Kantons Zürich, Switzerland, 10 February 1999] (stating that article 74 includes recovery for loss of goodwill but aggrieved
party did not substantiate claim) (see full text of the decision); CLOUT case No.  313 [Cour d’appel, Grenoble, France, 21  October 1999]
(no recovery under CISG for loss of good will unless loss of business proved); CLOUT case No. 210 [Audienca Provincial Barcelona,
Spain, 20 June 1997] (aggrieved party did not provide evidence showing loss of clients or loss of reputation) (see full text of the
decision).
24
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce, Russia, award in case No. 304/93,
of 3 March 1995 (“moral harm” not compensable under CISG).
25
CLOUT case No. 343 [Landgericht Darmstadt, Germany 9 May 2000] (damaged reputation insignificant if there is no loss of turnover
and consequent lost profits) (see full text of the decision).
26
Gruppo IMAR S.p.A. v. Protech Horst BV, Arrondissementsrechtbank Roermond, the Netherlands, 6  May 1993, Unilex (damages in
amount of devaluation because payment not made when due).
27
See, e.g., Maglificio Dalmine s.l.r. v. S.C. Covires Tribunal commercial de Bruxelles, Belgium, 13 November 1992, Unilex (failure
to pay price; court allowed revaluation of receivable under Italian law to reflect change in cost of living in seller’s country).
28
CLOUT case No. 130 [Oberlandesgericht Düsseldorf, Germany, 14 January 1994] (seller did not establish its loss from devaluation
of currency in which price was to be paid).
29
CLOUT case No. 214 [Handelsgericht des Kantons Zürich, Switzerland, 5 February 1997] (citing general principle of tort law).
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002] (see full text of the decision); CLOUT case No. 235 [Bundesgerichtshof, Germany, 25 June 1997] (expense of resurfacing grinding machine not reasonable in relation to price of wire to be ground);
Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce, Russia, award in case No.  375/93
of 9 September 1994 (recovery of storage expenses shown to be in amounts normally charged).
30
31
Stockholm Chamber of Commerce Arbitration Award, Sweden, 1998, Unilex (examination).
Stockholm Chamber of Commerce Arbitration Award, Sweden, 1998, Unilex (storage); CLOUT case No. 138 [Federal Court of
Appeals for the Second Circuit, United States, 6 December 1995] (reversing CLOUT case No. 85 decision that denied recovery of storage costs).
32
33
CLOUT case No. 304 [Arbitration—International Chamber of Commerce No. 7531 1994].
CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1995] (reversing CLOUT case
No. 85 decision that denied recovery of shipping costs and customs duties).
34
35
CLOUT case No. 138 [Federal Court of Appeals for the Second Circuit, United States, 6  December 1995] (affirming CLOUT case
No. 85 decision that awarded costs of expediting shipment of goods under existing contract).
36
CLOUT case No. 125 [Oberlandesgericht Hamm, Germany, 9 June 1995].
Helsingin hoviokeus [Helsinki Court of Appeal], Finland, 26 October 2000, available in English translation on the Internet at http://
cisgw3.law.pace.edu/cases/001026f5.html (damages recovered for sales and marketing expenses of aggrieved buyer).
37
38
CLOUT case No. 253 [Cantone del Ticino Tribunale d’appello, Switzerland, 15 January 1998] (commissions) (see full text of the
decision).
39
CLOUT case No. 311 [Oberlandesgericht Köln, Germany, 8 January 1997].
40
CLOUT case No. 304 [Arbitration—International Chamber of Commerce No. 7531 1994].
CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (recovery allowed for handling complaints and for
costs of unwrapping, loading and unloading returned non-conforming goods from buyer’s customers); Stockholm Chamber of Commerce
Arbitration Award, Sweden, 1998, Unilex (freight, insurance and duties connected with delivery to sub-buyer; storage with forwarder;
freight back to aggrieved buyer; storage before resale by aggrieved buyer; examination).
41
42
CLOUT case No. 168 [Oberlandesgericht Köln, Germany, 21 March 1996] (buyer entitled to damages in amount of compensation
paid to sub-buyer for non-conforming goods); Landgericht Paderborn, Germany, 25 June 1996, Unilex (damages for reimbursement of
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sub-buyer’s travel expenses to examine product, costs of examination, cost of hauling defective products, costs of loss on a substitute
purchase). See also CLOUT case No. 302 [Arbitration—International Chamber of Commerce No. 7660 1994] (no indemnity awarded
because third party’s pending claim against buyer was not yet resolved).
43
ICC award No. 8740, October 1996, Unilex (cost of moving replacement coal from stockpiles recoverable).
44
CLOUT case No. 631 [Supreme Court of Queensland, Australia, 17 November 2000].
CLOUT case No. 541 [Oberster Gerichtshof, Austria, 14  January 2002]; CLOUT case No. 138 [Federal Court of Appeals for the
Second Circuit, United States, 6  December 1995] (expenses incurred when attempting to remedy the non-conformity) (see full text of
the decision), affirming CLOUT case No. 85 [Federal District Court, Northern District of New York, United States, 9 September 1994];
Nova Tool and Mold Inc. v. London Industries Inc., Ontario Court-General Division, Canada, 16 December 1998, Unilex (reimbursing
expenses of having third party perform regraining that had been overlooked by seller, and of repairing non-conforming goods); CLOUT
case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993] (cost of repair).
45
46
CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (advertising costs not sufficiently particularized) (see
full text of the decision).
47
CLOUT case No. 49 [Oberlandesgericht Düsseldorf, Germany, 2 July 1993] (relying on the Convention but without analysis of article  5, court concluded that it had jurisdiction in action by buyer against its supplier to recover