Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 245-247. Reproduced with permission of the publisher, Kluwer Law International, The Hague.
§ 212 As we have just seen, in international sales the seller usually completes his obligations with respect to delivery of the goods by "handing over the goods to the first carrier for transmission to the buyer." Art. 31, supra at §208. Any provision of the agreement (including usage and any practice between the parties) is decisive; to the extent that there is no agreement with respect to shipping arrangements, Article 32 applies.
"(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.
§ 213 A. Identification of the Shipment
The specific goods (e.g., specific bags of sugar) that will be supplied are usually not identified when the contract is made; the seller may supply any goods that conform to the agreed qualities and characteristics. In these situations it is sometimes said that the contract calls for "generic" goods or that the goods are "unascertained" or "unidentified."[page 245]
At some stage in the performance of each sales contract, specific goods will be designated or "identified" as those which are provided pursuant to that contract. As we shall see in examining the rules on risk in Chapter IV (Arts. 67(2) and 69(3)), casualty loss will not fall on the buyer unless (at the very least) the goods have been "identified" to the buyer’s contract.
Article 32(1) deals with a different question—the obligation of a seller who ships goods to provide the buyer with information that he needs. Often the contract (especially when the seller is to be paid on presentation of documents specified in a letter of credit) provides that the seller will arrange for insurance, and will transfer a policy or certificate of insurance to the buyer (or to the buyer’s bank) when payment is made. Occasionally, however, the buyer will need to take out insurance on goods in transit; even if the buyer has general coverage under a "blanket" policy, it is important to be clear as to which goods are in transit to him.
This identification usually is effected by naming the buyer in the documents issued by the carrier—the consignment note or bill or lading; where possession of the shipping document controls the delivery of the goods (e.g., the shipping document is an "order" or "negotiable" bill of lading) the document will normally give the buyer’s name as the person the carrier is to notify concerning arrival of the shipment. Even if the shipping document does not connect the buyer and the goods, this may be done by identifying marks on the goods. If the goods are not clearly identified in one of these ways, under Article 32(1) "the seller must give the buyer notice of the consignment specifying the goods."
What are the consequences of failure by the seller to give such a timely notice of the consignment? If the goods are lost or damaged before the goods are identified to the contract, the consequences can be serious by virtue of the rules on risk of loss in Chapter IV. (See Arts. 67(2) and 69(3), infra at §363 and §373.) The seller’s failure to comply with the identification or notice provisions of the contract or of Article 32(1) will, of course, constitute a breach of contract. The remedies for the breach depend on its seriousness. In any event, the seller will be liable to the buyer for damages that result (Arts. 45 and 74); if the seller’s breach is "fundamental" (Art. 25, supra ), the buyer may be able to "avoid the contract" (Art. 49)— i.e., he may reject the goods.[page 246]
§ 214 B. Transportation Arrangements
Paragraph (2) applies whenever "the seller is bound to arrange for carriage of the goods." The contract may call for the seller to make shipping arrangements even though, under the contract, the buyer bears the risk of increase in freight rates or of the unavailability of shipping space. Article 32(2) merely articulates the seller’s duty to make appropriate "arrangements"—arrangements for the type and means of transport and the terms of the contract with the carrier. As was noted with respect to paragraph (1), above, failure to perform these duties is a breach of contract; the remedy depends on the seriousness of the breach. Unless the contract or usage (Art. 9) provides otherwise the seller’s duty to "arrange" for shipping does not make the seller liable if space or facilities for carriage are unavailable.
§ 215 C. Information Necessary for Insurance
Paragraph (3) articulates a duty of cooperation that, in most cases, probably could be established as an aspect of applicable usages or practices. Cf. (U.S.A.) UCC 2–311; Options and Cooperation Respecting Performance; UCC 2–319(1)(c) and (3) (buyer’s duty to give needed instructions to seller); (U.K.) SGA (1893) 32(3).[page 247]
FOOTNOTES: Chapter on Article 32
1. Art. 32 is the same as Art. 30 of the 1978 Draft except for drafting changes in paragraph (1). Paragraph (1) is based on ULIS 19(3); paragraphs (2) and (3) are based on ULIS 54(1) and (2). See, in general, Schlechtriem, Com. (1998) 252–260 (Huber).
2. Cf: Dölle, Kommentar (Huber) Art. 19 at 122, p. 184; Meriens & Rehbinder Art. 19 at 14, p. 150.
3. The statement that the seller "must" give notice is the form of expression used throughout the Convention for expressing a contractual duty. Saying that a party "must" (F. doit; Sp. debera ) do a specified act carries no implication as to the importance of the obligation or the seriousness of failure to perform this duty. The phrase in Article 32(1).—"in accordance with the contract or this Convention"—also seems to have no special significance, for the seller’s duty to identify or notify would not be lightened by his failure to perform some other act "in accordance with" his contractual duties.
4. Art. 32(2) is similar to the rules of domestic law: (U.S.A.) UCC 2–504(a); (U.K.) SGA (1893) 32(2) (first sentence).
5. Other examples of the duty to cooperate by providing needed information are collected in the commentary to Art. 7(2), supra at §100.