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Reproduced with the permission of Oceana Publications

excerpt from

INTERNATIONAL SALES LAW

United Nations Convention on Contracts for the International Sale of Goods

Convention on the Limitation Period in the International Sale of Goods

Commentary by
Prof. Dr. jur. Dr. sc. oec. Fritz Enderlein
Prof. Dr. jur. Dr. sc. oec. Dietrich Maskow

Oceana Publications, 1992

Article 31 [Absence of specified place for delivery]

[TEXT OF THE UNIFORM LAW]

If the seller is not bound to deliver the goods at any other particular place [1], his obligation to deliver [2] consists:

(a) if the contract of sale involves carriage [3] of the goods - in handing the goods over [5] to the first carrier [4] for transmission to the buyer;
(b) if, in cases not within [6] 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 [7] 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 [9] at that place [8];
(c) in other cases - in placing the goods at the buyer's disposal [9] at the place where the seller had his place of business [10] at the time of the conclusion of the contract.

[WORDS AND PHRASES, CONCEPTS

1. place of delivery; comparison with Incoterms
2. further obligations of seller in context of transporting the goods
3. when the contract of sale involves carriage
4. definition of the term carrier
5. seller's obligation to dispatch the goods
6. in cases not within (para. (a) of Art. 31) the preceding subparagraph
7. at the time of the conclusion of the contract, the parties knew
8. goods placed at buyer's disposal at that place
9. placing the goods at the buyer's disposal
10. at the place where the seller had his place of business at the time of the conclusion of the contract ]

[COMMENTARY]

[1] [place of delivery; comparison with Incoterms]

The place of delivery is the place where delivery has to be made. If the seller at the time of delivery delivers at the place of delivery, he fulfills his obligation. Of importance is the place of delivery where the passing of the risk is concerned (Article 67 fol), but also in regard to other questions. Generally, the parties reach agreement in their contract on where delivery shall take place. Therefore, the provisions under Article 31 will relatively seldom apply.

Rather often the parties refer to customary delivery clauses, in particular to the INCOTERMS. As to whether the INCOTERMS may be invoked to interpret basic delivery clauses without such reference being made, compare Handbuch 1, 99 fol.

In accordance with the INCOTERMS [1990], the place of delivery is determined as follows: [page 129]

* EXW (Ex Works) - the seller's premises;
* FCA (Free Carrier) - the named departure point;
* FAS (Free Alongside Ship) - the named port of shipment, buyer may name the loading area;
* FOB (Free on board) - the named port of shipment;
* CIF and CFR (Cost, insurance and freight; Cost and freight) - the named port of destination;
* DES (Delivered Ex Ship) - the named port of destination;
* DEQ (Delivered Ex Quay) - the usual quay at the named port of destination;
* DAF (Delivered at frontier) - the named point at the frontier in the seller's country;
* DDP and DDU(Delivered Duty Paid/Delivered Duty Unpaid); - the named place in the country of importation;
* FRC (Free Carrier) - the named place or point (mostly in the seller's country);
* CPT and CIP (Carriage paid to; Carriage and insurance paid to) - the named point of destination (mostly in the buyer's country).

(Concerning the INCOTERMS compare also Handbuch 1, 99 fol; Handbuch 3, 393 fol).

As can be seen, the place of delivery and the place of dispatch or destination need not be identical. The place of destination is the place where the goods are transported to; it is the final destination of a dispatch. But the place of delivery is that place where the seller has to fulfil his obligation to deliver; the place where the obligations of the seller finally end (Lüderitz/Freiburg, 182). Therefore, there is no difference between the place of destination and the address to which the goods are sent (c. note 11).

The place of destination is of importance for the examination of the goods (Article 38, paragraphs 2 and 3). The place of destination may also be the result of usages and practices (Honnold, 235).

The delivery clauses, in most cases, settle further questions which could not be considered in the CISG, e.g. who should be responsible for providing the export or import licenses, who should pay export taxes etc. [page 130]

Under the INCOTERMS the seller is not generally responsible for providing the export license, i.e. he is not responsible where the clauses "EXW" and "FAS" apply. In those instances, he has to grant assistance only at the request and the cost of the buyer. Conversely, the seller sometimes is responsible for providing an import license in the country of import, i.e. where the clauses "DEQ" and "DDP" apply.

It is to be taken into consideration also that the providing of an export license, e.g. where "FOB" applies, is considered as a kind of guarantee; and in the event of denial of such license it is not permitted to invoke force majeure (F. Eisemann/W. Melis, INCOTERMS, 1980 edition. Commentary, Vienna, 1982, p. 194).

[2] [further obligations of seller in context of transporting the goods]

Further obligations of the seller in the context of transporting the goods are contained in Article 32.

The supplier has fulfilled his obligation to deliver even when the goods delivered do not conform with the contract. According to ULIS the term delivery comprises the handing over of goods which are in conformity with the contract. The handing over of goods which fail to conform with the contract does, therefore, not constitute a delivery (Bianca/BB, 269; Honnold, 238); and even less so the performance of an aliud.

[3] [when the contract of sale involves carriage]

This happens regularly in the international sale of goods, unless the goods are already in the possession of the buyer (e.g. in the event of a sale of an object that had originally been leased or goods that were available for inspection) or the buyer himself collects the goods from the seller (e.g. in the event of the clause ex works). Here carriage is always transport by one or several independent carriers. Insofar as the parties have their own vehicles and therewith transport the goods, this does not fall under carriage (Honnold, 236). This is of significance in cases where the seller may be discharged, hence whether the risk is passed or not (Article 66 fol). Schlechtriem (Doralt, 195) is against making the passing of risk dependent on whether the seller hires a dependent division of a company or an independent subsidiary for the transport of the goods.

[4] [definition of the term carrier]

A carrier is the collective term used for the different means of transportation (see, for instance, multimodal carrier). The place of delivery where the clauses "FCA", "CPT" and. "CIP" are applied is the first carrier, whereas the named port of shipment and/or destination is the place of delivery (even if transportation by ship is not the first means of transportation, where the clauses "FOB", "CIF" and "CFR" are concerned). It is, therefore, not sufficient for the seller, in the case of FOB, to hand over the goods to the railway [page 131] company as the first carrier. To what extent a forwarding agent can be considered as the carrier depends on whether he himself undertakes to transport the goods (see also Loewe, 52).

[5] [seller's obligation to dispatch the goods]

Most of the time the seller has an obligation to dispatch the goods. Distance sales and sales by delivery to a place other than the place of performance are, in most instances, treated equally (critical remarks - with reference to Schlechtriem and Enderlein - by Lüderitz/Freiburg, 191, who doubts the conclusion that also where carriage is performed by independent carriers the seller has to arrange for carriage if there is doubt).

As to the obligation to be performed at the debtor's place of business where the debtor must, however, dispatch the goods or remit the money, compare Article 32, paragraph 2.

The goods may, however, also be handed over to a carrier which was hired by the buyer, if the clause "FOB" was agreed, in which case the buyer will have to provide a means of transportation. International sales contracts usually involve several carriers. (Concerning the possibilities of multimodal carriage compare Handbuch 3, section 5.6, 306 fol).

[6] [in cases not within (para. (a) of Art. 31) the preceding subparagraph]

This means that there is neither an arrangement under the contract as to the place of delivery nor is carriage an obligation of the seller.

[7] [at the time of the conclusion of the contract, the parties knew]

It should suffice that the buyer had knowledge of it. It is self-evident that the seller is aware of it.

[8] [good placed at buyer's disposal at that place]

That place may be a warehouse or a production facility. Where a warehouse is used, but also in other cases, there might be a need to hand over documents in the form of a claim or directive for delivery. (Schlechtriem, 54). The INCOTERMS, too, contain for instance the clause "ex works" (ex factory, ex mill, ex plantation, ex warehouse etc.). If there is agreement to apply the INCOTERMS, then delivery has to be made at a specific place because of this agreement (c. note 1), and subpara. (b) need not be invoked.

[9] [placing the goods at the buyer's disposal]

To place at the disposal means that the seller must have the goods available at that place (Schlechtriem, 54; Welser/Doralt, 107).

Having them ready at that place, the seller has done his share. The initiative to take possession of the goods now rests with the buyer (Lando/BB, 254). Lando (BB, 254) holds that subpara. (b) of Article 31 also refers to the trade terms "FAS", "Ex Ship" and "Ex Quay". Subpara. (b), however, only applies if no specific place was agreed [page 132] on (c. note 8). When the seller places the goods at the disposal of the buyer, he has to inform him accordingly so that the latter can take possession of the goods. For this to come true, the goods have, if necessary, to be clearly identified to the contract and appropriately wrapped.

[10] [at the place where the seller had his place of business at the time of the conclusion of the contract]

10. Here reference is made to the obligation to be performed at the debtor's place of business. When the seller changes his place of business after the conclusion of a contract, he nonetheless has the obligation to place the goods at the disposal of the buyer at the agreed place and/or to bear the additional costs or the risks that are likely to be incurred. (As to the bearing of the risk in this case, see Article 69, paragraph 1). [page 133]

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Pace Law School Institute of International Commercial Law - Last updated August 9, 2002
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