Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 347-348. Reproduced with permission of the publisher, Kluwer Law International, The Hague.
Paragraph (1) of this article deals with a situation that seldom causes serious difficulty—the enthusiastic seller who delivers too soon; paragraph (2) addresses the more complex consequences of delivering an excess quantity.
"(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."
§319 A. Early Delivery
Applying paragraph (1) may call for interpretation of the contract. If the contract calls for delivery "not later than June 1," a delivery on May 20 would not necessarily occur "before the date fixed." The option given the buyer to "refuse to take delivery" would apply only if the date of delivery was inconsistent with the contract, as where the contract permitted delivery "between May 25 and June 1."
The buyer’s option to refuse an early delivery need not be based on a showing of inconvenience or "fundamental breach" (Art. 25). However, the buyer could gain little by an unreasonable refusal to take an early delivery. The option that Article 52(1) gives the buyer is not avoidance of the contract but the right to refuse the early delivery; the seller may retender the goods at a date that is authorized by the contract. (Similarly, under Article 37 the seller may cure defects in delivery "up to" the date for delivery.) [page 347]
§320 B. Excess Quantity
When the market falls after the making of the contract, the seller may be tempted to take advantage of the high contract price and deliver a larger quantity than the contract specified; if the buyer "takes delivery of all or part of the excess quantity, he must pay for it at the contract rate (Art. 52(2)), unless the parties agree otherwise (Art. 6). Under paragraph (2) the buyer may "refuse to take delivery of the excess quantity." Questions of interpretation may arise if the seller’s tender does not give the buyer the opportunity to accept the quantity specified in the contract and refuse the rest.
Example 52A. A contract called for the shipment of 1,000 bags of sugar at $50 per bag, a total of $50,000. Seller shipped an excess quantity, 1,200 bags. All of the sugar was shipped under a single negotiable bill of lading. Seller (through a correspondent bank) tendered his bill of lading in exchange for payment of a sight draft for $60,000—the price for 1,200 bags.
Under these circumstances the seller’s demand for cash outlay of more than that called for by the contract would probably be a "fundamental breach." Payment of $60,000 followed by a rejection of the 200 excess bags and a claim for the refund of 10,000 may subject the buyer to hazards with respect to the seller’s financial responsibility and the burdens and delays of litigation. See Art. 25, supra at §181. On the other hand, the buyer may be obliged to accept the tender when the excess in quantity is trivial or is consistent with the practices established by the parties or usage (Art. 9), or when the seller does not demand full payment in exchange for delivery.
Of course, parties who are acting in good faith can normally make an arrangement that would meet the needs of both. The seller could wire authorization for reduction in the draft or for delivery to an intermediary (e.g., a sugar dealer at the point of destination) who, after satisfying the bank’s interest in the draft, could take delivery of the shipment and permit the buyer to take the agreed quantity in exchange for the appropriate payment. A seller’s refusal to make a reasonable arrangement would give the buyer reason for concern about a prompt refund and would be an added reason supporting rejection of the entire shipment.[page 348]
FOOTNOTES: Chapter on Article 52
1. This article is the same as Art. 48 of the 1978 Draft. Paragraph (1) is similar to ULIS 29 except for deletion of a provision that a seller who accepts "may reserve" the right to claim damages. Paragraph (2) is similar to ULIS 47.
2. Although the buyer is privileged to refuse an early delivery, if the seller is not present and other conditions specified by Art. 86(2) are met, the buyer may be obliged to take possession of the goods on behalf of the seller. See Ch. V, Sec. VI, Preservation of the Goods, and Art. 86, infra at §455. For conflicting views on whether the rejection of an early delivery must be reasonable see Will, B-B Commentary 380. On buyer’s possible claim for storage expenses for early delivery see id. 381.
3. See Secretariat Commentary on draft Art. 48, para. 9, O.R. 44, Docy, Hist. 434.