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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 85 [Seller's obligation to preserve]

[TEXT OF THE UNIFORM LAW]

If the buyer is in delay in taking delivery [1] of the goods or, where payment of the price and delivery of the goods are to be made concurrently, if he fails to pay the price [2], and the seller is either in possession of the goods [3] or otherwise able to control their disposition [4] , the seller must take such steps as are reasonable in the circumstances to preserve them [5]. He is entitled [6] to retain them until he has been reimbursed his reasonable expenses by the buyer [7].

[WORDS AND PHRASES, CONCEPTS

1. if the buyer is in delay in taking delivery of the goods
2. or, where payment of the price and delivery of the goods are to be made concurrently, if he fails to pay the price
3. and the seller is either in possession of the goods
4. or otherwise able to control their disposition
5. the seller must take such steps as are reasonable in the circumstances to preserve them
6. he is entitled to retain them
7. until he has been reimbursed his reasonable expenses by the buyer ]

[COMMENTARY]

[1] [if the buyer is in delay in taking delivery of the goods ]

It is decisive here that the seller cannot deliver, and it is, therefore, sufficient that the buyer does not fulfil one of the two elements of his obligation to take delivery under Article 60. The non-taking of delivery may also hide a rejection bf the goods by the buyer (notes 2, 8 and 10 of Article 86) which the seller does not accept so that he continues to proceed according to the contract.

[2] [or where payment of the price and delivery of the goods are to be made concurrently, if he fails to pay the price ]

This amendment was added at the diplomatic conference at the proposal of the FRG (O.R., 398, 139). It presupposes the right of the buyer to retain the goods (Article 58). Non-payment becomes manifest when the goods are tendered. Then the risk has in general already passed to the buyer (Article 67) so that there will be every reason to substantiate an obligation of the seller to preserve the goods. Where the delivery is hindered by non-payment of a sum that was due and/or there is no payment security, it may be supposed that the seller, because of his right to retain the goods, does not even initiate delivery .The risk will not pass in this event so that it will be on the seller to take care of the goods already since he still bears the risk. [page 352] 2

[3] [ and the seller is either in possession of the goods ]

This is the case, in particular, when he has not handed them over to a carrier for delivery to the buyer. Preservation in this context generally requires the least additional expenses.

[4] [ or otherwise able to control their disposition ]

This happens mainly when the seller has already handed over the goods to the carrier, but is still in possession of the documents on whose basis he can instruct the carrier on how to proceed with the goods and/or when he can induce the holder of the documents, like in a particular bank, a trusty forwarding agent or others, to give such instructions and/or take steps.

[5] [ the seller must take such steps as are reasonable in the circumstances to preserve them]

      [5.1] This half-sentence characterizes the substance of the preservation obligation. It is of relevance when the risk (like under Article 68; c. also note 2) has already passed to the buyer (Schlechtriem, 104; also Honnold, 457).

      [5.2] What is to be considered as "steps as are reasonable in the circumstances" will have to be determined using the measure which the CISG applies (e.g. Article 8, paragraph 2) to flesh out such vague descriptions. It amounts to taking such steps as they would be taken by a reasonable person in the same circumstances.

Steps to be taken with priority are described in Articles 87 and 88. They can be applied in such a way that they constitute performance surrogates in the meaning of the subsidiary applicable law, not only steps to preserve the goods. The call for instructions of the buyer and their implementation, where they are appropriate, may be such a step. But this will be more seldom the case than in regard to the steps to be taken by the buyer to preserve the goods, because the seller can preserve the goods which are still in his possession and his further stocks.

      [5.3] The duration of the period for preservation can be deduced by reverse conclusion from Article 88, paragraph 1 (note 2.2. on it). It will continue to exist, however, as long as there is no resale.

[6] [he is entitled to retain them ]

Where steps to preserve the goods have been taken, not only does the buyer have to create the original conditions in regard to taking delivery and payment, but he must also, where there is doubt, refund the reasonable expenses concurrently when the seller requires so. But the latter can also pursue a refunding separately if he wants to avoid another delay after the buyer has removed the decisive obstacles. The seller must, in accordance with the principle of good faith, be considered as having the obligation not to make the delivery dependent on the reimbursement of expenses for the steps he has taken to preserve the goods; where the buyer procures [page 353] an appropriate security, (in this sense Barrera Graf/BB, 618 fol) when they are completely irrelevant.

[7] [ until he has been reimbursed his reasonable expenses by the buyer]

The reimbursement of expenses is no payment of damages even though the two may overlap. This is of importance where the buyer can exempt himself from damages he caused in breaching the contract. But he must always pay the expenses for measures taken to preserve the goods.

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Pace Law School Institute of International Commercial Law - Last updated September 25, 2002
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