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Reproduced with the permission of Oceana Publications

Article 35 [Conformity of the goods]

(1) The seller must deliver goods which are of the quantity [3], quality [4] and description [5] required by the contract and which are contained or packaged [6] in the manner required by the contract [1].

(2) Except where the parties have agreed [2] otherwise, the goods do not conform [7] with the contract unless they:

(a) are fit for the purposes for which goods of the same description would ordinarily be used [8];

(b) are fit for any particular purpose [9] expressly or impliedly made known [11] to the seller at the time of the conclusion of the contract [10], except [12] where the circumstances show that the buyer did not rely [13], or that it was unreasonable for him to rely [14], on the seller's skill and judgement;

(c) possess the qualities of goods, which the seller [15] has held out to the buyer as a sample or model [16];

(d) are contained or packaged [17] in the manner usual for such goods or, where there is no such manner [18], in a manner adequate to preserve and protect the goods.

(3) The seller is not liable under subparagraphs (a) to (d) [19] 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 [20] not have been unaware of such lack of conformity.

[WORDS AND PHRASES, CONCEPTS

[COMMENTARY]

[1] [seller must deliver goods in the manner required by the contract]

With regard to the quantity, the quality and the description of the goods, as well as their packaging or container, the provisions of the contract are to be referred to. The general provisions of the Convention can only be used as a supplement. Specific requirements may be deduced, however, from the purpose and the circumstances of the contract, and from usage even if there is no direct agreement. The parties' agreement is complemented by a number of objective standards by which the fulfilment of the contract is judged (Bianca/BB,272).

Where do the requirements of the contract ensue from? Do presentations by the seller concerning the quality of the goods become terms of the contract? In many legal systems a distinction is made between descriptions of the quality and promised characteristics, e.g. under American law between representations and promises. According to Honnold (251) such a distinction was, however, not included in the CISG because Article 8 does not provide for a distinction between different types of statements. Thus, the requirements of the contract are not only express assurances (see Welser /Doralt, 109). Posch (Doralt, 151), in contrast, believes the English text indicates that an express assurance is referred to.

[2] [subparagraphs (a) to (d) apply whenever the parties have not agreed otherwise]

Subparagraphs (a) to (d) apply whenever the parties have not agreed otherwise. They contain such provisions which the parties agree by reason or usage. If they are not to apply they must be disclaimed (Hyland/Freiburg, 338). What we are talking here about are the so-called disclaimers. Under some legal systems the exclusion of qualitative standards as are required by law is invalid. But questions of validity are not covered by the scope of application of the Convention (Article 4). Honnold (257 fol), therefore, warns that domestic law should be brought in through the backdoor. Where clauses regarding the limitation of liability are invoked, domestic law will probably have to be called in (Hyland/Freiburg, 313). In this context, attention should be drawn again to the problem of contradictory business conditions (Article 19, note 10).

[3] [seller must deliver goods which are of the quantity … required by the contract]

The CISG treats differing quantities (partial deliveries, lesser than agreed quantities) as a lack of conformity (and not as partial late delivery) having the consequence that differing quantities under Article 39 generally must be notified. A difference has to be made, however, whether or not the documents allow for a minimum quantity. Notice has to be given only when the seller really delivers less than indicated in the documents. If the documents correspond with the actually delivered quantity, the result is an incomplete performance of probably partial late delivery. The seller may not invoke that notice has not been given if he was aware of the lack of conformity, e.g. if he himself made out the documents in accordance [page 141] with the actually delivered quantity. (Analogous to Article 40, even though it is a condition for that Article to be invoked that the seller has not disclosed the non-conformity to the buyer.)

If parts are missing in a delivery it is not important under the CISG, if the same legal consequences follow, whether there is a lack in quality or in quantity. (Compare Article 51 which makes reference to Articles 46 to 50. As to a quantity greater than provided for in the contract, compare Article 52.)

[4] [ … of the quality … required by the contract]

The question of whether insignificant differences in quality have to be considered remains open. A relevant Australian proposal (O.R., 77) was not successful. (Concerning the possibility of an additional period of time for delivery in this case compare Article 47, note 3).

[5] [ … of the description … required by the contract; aliud (totally different goods) vs. peius (non-conforming goods)]

As regards the description of the goods, the parties in general determine the content of their obligations in describing the goods. The description of the goods as in the offer, is binding for the seller without the need of a specific promise. Even if the offer relates to an advertisement illustrating the goods and their quality, this illustration constitutes part of the offer and becomes binding when the offer is accepted.

The description of the goods may also be part of an offer made by the buyer. If the seller raises no objection, he is bound in the contract by this description (Bianca/BB, 273).

Views differ when it comes to the delivery of an aliud. While Article 33, subparagraphs (a) and (b) of ULIS describes non-conformity and false deliveries as being lack of conformity, thus treating a false delivery expressly as a delivery of defective goods, this was not included in the CISG. We believe, however, that the legal situation is still the same, no matter how significant the deviation may be (see also Schlechtriem, 54 fol referring to Huber, 483 fol). The same opinion is represented by Welser (Doralt, 111); undecided Bydlinski (Doralt, 133); c. Bianca/BB, 273 fol).

Hyland (Freiburg, 305 fol) gives an extensive statement on the scope of the deficiency and on the difference between aliud and peius.

The solution according to which the delivery of an aliud constitutes non-conformity under the CISG, is supported by the fact that any deviation from the description of the goods as given under the contract can be remedied by not giving notice (Schlechtriem, 54). The Secretariat's commentary, which draws a distinction between bad delivery and false delivery (O.R., 29), is therefore inconsistent. [page 142]

As far as the delivery of an aliud is concerned, the Secretariat's commentary (O.R., 32) points out that at least the general description must be met for an aliud to be a non-conformity. The obligation to deliver would not be fulfilled, if the seller delivered, e.g. potatoes instead of corn. (Agreeing Bianca/BB, 273; likewise Binder/Doralt, 146.) Such commentary by the Secretariat does not refer to the difference between the delivery of non-conform[ing] goods and an aliud but rather to a limitation of the notion aliud. According to Lüderitz (Freiburg, 185) the distinction between "aliud" and "defective delivery" is back to its origins. How can the tendering of goods that are "completely different" from those described in the contract constitute a delivery?

Should the seller deliver goods which have absolutely nothing to do with the goods desired by the buyer, then under the legal systems of many countries this does not constitute a delivery. The German BGB/Commercial Code considers the delivery of an aliud as no delivery (see R. Knoepfle, "Aliud-Lieferung beim Gattungskauf: Nichterfüllungs- oder Gewährleistungsrecht?", NJW, 1989/14, p. 871 fol) while 378 of the German Commercial Code makes a distinction between aliuds that may or may not be approved.

Some authors hold the same to apply to the CISG. A gross aliud would, therefore, be no delivery but would have to be treated as a delivery of unordered goods (see Neumayer/Doralt, 136; agreeing Loewe, 51). Though there is something to be said for this opinion, there are several factors that speak against it. For one, the need to give notice (since the seller does not have to be aware of the false delivery) and the possibility of curing it through not giving notice. But also, the theoretical and practical difficulty to differentiate between lacking quality and aliud, on the one hand, and a "simple" and a "gross" aliud, on the other.

The fact that no notice was given over a period of one year was reason for the Court of Arbitration to the Polish Chamber of Foreign Trade in the proceedings A. 737 /70 (ruling of May 10, 1971) to reject any claims by the buyer because of the delivery of an aliud (Collection of Awards 1960-1978, p. 75 fol).

[6] [packaging requirements: cross-reference]

Requirements in respect to the packing partly follow from agreed delivery clauses. For further comments compare note 17.

[7] [conform to the contract = conformity of the goods]

The wording "conform with the contract" and conformity of the goods are identical. [page 143]

[8] [goods must be fit for ordinary use]

The goods must be fit for ordinary use. Goods are detrimental to an ordinary use when they lack specific ordinary characteristics or when they have defects which impede their material use. Goods are also unfit for ordinary use when the defects, though not affecting the material use of the goods, considerably lessen their trade value (Bianca/BB, 274).

The goods can be more or less fit for ordinary use. The seller must on the whole deliver goods of average fitness. The fitness of the goods is measured against the standards of the seller's country (Bianca/BB, 274). Average fitness does not necessarily mean that the goods have to be of average quality. In some legal systems the seller has the right to deliver goods whose quality is below average. Under common law the goods must be merchantable. However, any goods are merchantable whether they are of high or low quality (Bianca/BB, 281). (Article 33, paragraph 1, subpara. (d) of ULIS requires the goods to have the characteristics needed for their commercial use, which includes their resale; c. Lüderitz/Freiburg, 185).

Hence the quality may be more or less good, but at least it must not be much below the standard that can reasonably be expected according to the price and other circumstances (Bianca/BB, 281). Since the requirement of ordinary use of the goods can be met in quite varying quality, one may safely assume that the buyer can only insist on a certain minimum (dti, 32).

The CISG does not prescribe any quality standards; e.g. cars can be traded for resale, but also for scrapping (Honnold, 252).

If the goods in question are only from time to time used for other purposes (e.g. after converting a printing machine) the buyer has no rights if he has not indicated a specific use. If the goods in the buyer's country or another country of destination have to meet special conditions, for instance with regard to the fulfilment of specific test or security regulations, the seller has to take these into account only if the buyer informs him accordingly in advance (c. note 11). The CISG stipulates nothing with respect to qualitative prerequisites which may be mandatory in the buyer's country or in the country of destination. An obligation of the seller to fulfil those requirements would have to be expressly agreed in the contract (Bianca/BB, 282). (Such requirements could also be as under subpara. (b) fitness for a particular purpose].

It should, however, not be sufficient if the buyer informed the seller of the country where the goods are to be used, in order to bind the seller, to meet the requirements under that country's law (Bianca/BB, 283). [page 144]

After all, fitness for ordinary purpose includes that the goods remain fit for a reasonable period of time even if no express guarantee was granted for them (Bianca/BB, 289). Such an interpretation can be expected at least in the Common Law countries (dti., 33).

A specific problem relates to the period of durability or fitness which plays a role in the foodstuffs and the pharmaceutical industries. Since no general standards have emerged yet in this respect, a relevant agreement in the contract should be recommended.

[9] [fitness for particular purpose]

The seller can take account of the purpose of the goods only if he is aware of it at the time of concluding the contract. It is, therefore, recommendable that the buyer makes this purpose known to the seller to secure probable claims. If the seller wants to avoid the agreement in regard of the quality of the goods, he must contradict it (Lüderitz/Freiburg, 186). If the seller is aware of the purpose of the goods, the principle of fairness requires him to conform to it (Bianca/BB, 275).

[10] [made known to the seller]

It is insufficient for the buyer to make the purpose of the goods known to the seller at a later date.

[11] [expressly or implicitly made known]

If the buyer has named the purpose of the goods in the offered contract and the seller has agreed, the result would be an agreement to which paragraph 1 of Article 35 applies. Make known is less than contractually agreed (see Huber, 480 fol). Welser (Doralt, 109) sees a problem in such interpretation "because hardly can something not conform with a contract that had not become a term of the contract". What matters here is that the purpose which is made known becomes a term of the contract by invoking the Convention. Hyland believes there will be difficulties when the seller is supposed to know the particular purpose intended by the buyer, but actually is not aware of it. We would, however, interpret "make known" in such a way that the seller was able to take note of it. While "expressly ... made known" does not cause any problem, disputes can be foreseen when it comes to interpreting "impliedly made known". In the proceedings SG 373/84 at the Court of Arbitration to the Chamber of Foreign Trade of the former GDR, the question was dealt with whether the seller by inspecting the production facilities became aware of their cleaning regime and thus of the conditions required to ensure anti-rust protection (see RiA, 111; Supplement to AdW-Dokumentationen, 1989/22, p. XIV).

[12] [buyer's knowledge]

The buyer may, for instance, have greater knowledge with regard to the goods he wants to buy than the seller. [page 145]

[13] [buyer's reliance on seller's skill and judgement]

Whether or not the seller gave a judgement in the process is irrelevant. The buyer may, e.g. indicate the purpose for which the goods must be fit, and at the same time have ordered them according to particular technical specifications. The seller may have an obligation to advise the buyer in this context. If the buyer, contrary to the advice of the seller, insists on his order, it is obvious that he does not rely on the judgement of the seller.

If the buyer participates in choosing the goods, inspects the goods before he buys them, selects the manufacturing process, hands over the specifications or insists on a particular brand, he does (c. the examples mentioned from the British Sale of Goods Act) not rely on the skill of the seller (Hyland/Freiburg, 321).

Honnold (253 fol) believes that the buyer has to prove that the seller was aware of the particular purpose, and then the seller has to prove that the buyer did not rely on the skill of the seller (agreeing Hyland/Freiburg, 322).

[14] [seller not manufacturer, only trading agent without special knowledge]

This refers to when the seller is not the manufacturer of the goods but only a trading agent who indicates that he has no special knowledge, or when the required judgement capacity in the seller's trade branch is not common under normal circumstances (Bianca/BB, 276).

[15] [quality of sample or model held out to the buyer]

Whether, as in this case, the seller has held out to the buyer, or whether the buyer has held out to the seller a sample or model, both events constitute contractual agreements having the approval of the other party, to which Article 35, paragraph 1 should apply. Under American law this is express and not implied warranty (Honnold, 254). (As to the differences between express and implied warranty see in extenso A. Henselmann, Zum Kaufrecht der USA, Aktuelle Beitrage der Staats- und Rechtswissenschaft, Heft 178, Potsdam-Babelsberg 1978.)

[16] [sample or model]

A sample is normally taken from an existing quantity while a model serves as a model for manufacturing goods (see Honnold, 255). The submission of a model or sample is a factual description of the goods and, therefore, excludes the application of subparagraphs 1 and 2 (ordinary purpose, particular purpose) (Bianca/BB, 276). Since goods possess numerous characteristics it is sometimes difficult to decide which are the characteristics intended to be shown by a sample or model (Hyland/Freiburg, 324). [page 146]

The seller is bound only if he has not pointed out in which way the goods will deviate from the submitted model. If the description of the goods in the contract and the model do not conform with each other, it may not be deduced, from the fact that without a description in the contract the model replaces an agreement; that the model shall have priority over contractual agreements.

[17] [packing]

These provisions regarding packaging are minimum requirements. The seller is free to provide better protection for the goods at his own cost. This is influenced not only by the category of the goods themselves, but also the means and duration of transport, the route, and the country of destination (climatic conditions etc.). Whether or not interior packaging is required apart from exterior packaging, or vice-versa, or whether the goods are contained instead of packaged also depends on the means of transportation used and the category of goods involved.

An adequate manner also includes that the seller reckoned with a foreseeable delay in transport and the possibility of a redirection in transit or a redispatch (Article 38) in case where he became aware of it at the time of concluding the contract (Bianca/BB, 278).

It does not matter whether the packaging is part of the goods, but the obligation to package the goods depends on what is customary. The seller has an obligation to package the goods not only when the goods are dispatched, but also under Article 31, subparagraphs (b) and (c) if the seller only has to place the goods at the disposal of the buyer. Also in these cases, the goods have to be packaged so as to allow the buyer to load and transport them. If the buyer himself is to provide for packaging, a clear relevant clause has to be agreed in the contract (Bianca/BB, 277).

[18] [contained or packaged in the manner usual for such goods]

This may relate in particular to new goods, but also to such which have to be manufactured in a special way.

[19] [exclusion of seller's liability: reference exclusively to qualitative requirements under para. 2]

The exclusion of liability of the seller refers exclusively to the qualitative requirements under paragraph 2. Qualitative requirements agreed upon under paragraph 1 as well as differing quantities and false deliveries, which under paragraph 1 also do not conform to the contract, have not been included here. It is hardly imaginable that the buyer should be aware of false deliveries when the contract is concluded.

We could imagine that paragraph 3 be applied analogously to the requirements under the contract pursuant to paragraph 1. Norway at the Diplomatic Conference spoke out in favour of an inclusion of paragraph 1 into paragraph 3, but without success (O.R., 426 fol). [page 147]

Bianca (BB, 280) is against the analogy suggested by us for he believes that the distinction has to be kept clear between contractual clauses (Article 35, paragraph 1) and the criteria of the CISG and/or usages (Article 35, paragraph 2). Hyland (Freiburg, 326), however, agrees that similar principles can be effective also vis-a-vis express guarantee. Welser (Doralt, 109 fol), too, is in favour of adopting the same yardstick. According to Loewe (56), it is not detrimental to the buyer if he was not, and need not be, aware of the deficiency, provided the seller committed himself to deliver according to the characteristics required.

[20] [exclusion of seller's liability: buyer's opportunity to examine goods at time of conclusion of contract; could not have been unaware: meaning of phrase]

Here the CISG proceeds on the assumption that the offer of the seller relates to specific goods with a specific quality and that the buyer purchases the goods as they are, provided that he had reasonable opportunity to examine them at the time of the conclusion of the contract (Bianca/BB, 278).

Such examination does in no way include complex or detailed methods. The seller remains responsible for latent defects. He even remains responsible for apparent defects which are not detected during spot checks (Bianca/BB, 279).

The buyer has, however, no obligation to inspect the goods before the conclusion of the contract. There is no solution offered in the CISG for the eventuality that the seller invites him to inspect the goods and he falls to do so. Under domestic law there would be different results in such an event (see Hyland/Freiburg, 325).

The CISG provides no information on the yardstick against which "have to be aware" should be measured. There are several formulations in regard to it. Apart from "knew/has become aware" (see Article 43, paragraph 2; Article 49, paragraph 2; Article 64, paragraph 2, subpara. (a)) there is "could not have been unaware" (like in Article 35, paragraph 3 and further in Articles 40; 42, paragraphs 1 and 2) as well as "knew or ought to have known" (see Article 38, paragraph 3; Article 39, paragraph 1; Article 43, paragraph 1; Article 49, paragraph 2, subpara. (b); Article 64, paragraph 2; Article 68 and : Article 79, paragraph 4).

The wording "could not have been aware" is often qualified as gross negligence (so Herber/Doralt, 141). According to Huber (479) this should not suffice. Welser (Doralt, 109) holds that there should be an objective and clearly recognizable deficiency of the goods, which must be obvious to the average buyer. [page 148]

Circumstances which suggest that the buyer could not have been unaware would be given, for instance, if the seller had sold in the past to the buyer poor quality goods without complaints from the buyer; or if the price corresponds to the price generally paid for poor quality goods (Bianca/BB, 279).

It is, however, not absolutely excluded for the seller to bear responsibility. If the buyer is aware of the non-conformity of the goods at the time of the conclusion of the contract, but insists on faultless quality, the responsibility will remain with the seller for he must be expected to remedy the deficiency.

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