Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 523-525. Reproduced with permission of the publisher, Kluwer Law International, The Hague.
§ 455 Article 85 dealt with the seller’s duty to preserve the goods; the present article is concerned with the duty of the buyer.
"(1) If the buyer has received the goods and intends to exercise any right under the contract or this Convention to reject them, he must take such steps to preserve them as are reasonable in the circumstances. He is entitled to retain them until he has been reimbursed his reasonable expenses by the seller,
"(2) If goods dispatched to the buyer have been placed at his disposal at their destination and he exercises the right to reject them, he must take possession of them on behalf of the seller, provided that this can be done without payment of the price and without unreasonable inconvenience or unreasonable expense. This provision does not apply if the seller or a person authorized to take charge of the goods on his behalf is present at the destination. If the buyer takes possession of the goods under this paragraph, his rights and obligations are governed by the preceding paragraph."
The buyer’s duty to preserve goods has its clearest application in cases like the following:
Example 86A. Seller shipped to a distant Buyer; the bill of lading called for delivery to "Buyer", not to "order of Seller" or to "Seller". Thus, Seller did not retain control over the goods by a negotiable bill of lading (contrast Example 85A, supra §454). When the goods reached Buyer it rightfully rejected them on the ground that they were seriously defective.
In such cases Buyer will normally "receive" the goods for inspection (Para. (1)). Even if the goods are still in the possession of the carrier, the goods were consigned to Buyer; he did not need the bill of lading in order to take delivery. Thus, under Para. (2), the goods were at Buyer’s "disposal at their destination." If Seller has no agent in or near Buyer’s city, Article 86 requires Buyer to take reasonable steps to preserve the [page 523] goods since it is difficult for a seller to preserve and dispose of the goods that have been rejected at a remote destination.
Some of the limits set by this article may be illustrated as follows:
Example 86B. The transaction called for payment at destination in exchange for a bill of lading made out to the "order of Seller", a document that, as in Example 85A (Article 85 at §454, supra), controlled the disposition of the goods. Buyer refused to accept and pay for the goods.
Example 85A posed the question whether the seller had a duty to preserve the goods. Does Article 86 place such a duty on the buyer? The answer is No. Paragraph (1) is not applicable since the buyer has not "received" the goods. And paragraph (2) is not applicable since the buyer can only get possession by paying the price.
There have been decades of experience with rules similar to Article 86. See, e.g., (U.S.A.) Uniform Commercial Code §2-603.
In the prior example (86A), the duties imposed by Article 86 ;apply since the rejected goods are in the buyer’s "possession or control"; on the other hand, this standard relieves the buyer of duties in Example 86B.
"Rejection" of goods. Article 86(1) refers to the buyer’s exercise of "any right under the contract or this Convention to reject" the goods. The term "reject" has not appeared earlier in the Convention; this broad term is used here to assure that the buyer’s duty to preserve the goods will apply whenever the buyer may refuse to accept the goods—i.e., "reject" them. Thus, a buyer’s declaration that the contract is avoided because of the tender of seriously defective goods (Arts. 25, 26, 49) terminates buyers obligation to "take delivery" of the goods (Arts. 53, 60(b)); in other words the buyer may "reject" the goods. Similar consequences follow from avoidance after the buyer has received the goods (Art. 81(2)). Under Article 46(2) when non-conformity of the goods constitutes a fundamental breach the buyer may "require delivery of substitute goods", a remedy that involves rejection and return of the initial delivery. Pursuant to Article 51 all these remedies that amount to "rejection" may be applied to a "part of the goods".
Article 86 in referring to "any right" to "reject" the goods refers to all these remedies regardless of whether the buyer "has received" the goods (Art. 86(1)), or whether goods, after dispatch to the buyer, have been placed at the buyer’s "disposal".
Intent to reject. Article 86(1) states that the buyer must protect the goods if the buyer has received the goods "and intends to" reject them. [page 524] This language could be read to mean that there is no duty to protect the goods before the buyer forms an intent to reject—e.g., a buyer receives the goods on Monday, leaves them in the rain on Tuesday and forms (and/or declares) an intent to reject them on Wednesday. Cf. Barrera Graf, B-B Commentary §2.3, p. 622. In spite of awkward drafting, Article 86(1) probably requires reasonable steps to preserve goods while they are in the buyer’s possession during the period leading up to a decision to reject. In any event, under Article 82(1) a buyer loses its right to avoid the contract (Art. 49), or to require the delivery of substitute goods (Art. 46(2)), if the buyer cannot return the goods "in substantially the same condition" as when they were received; as we have seen, inability so to return the goods is not excused by Article 86(2)(c) since the damage to the goods would be due to the buyer’s "act or omission". See Schlechtriem, 1986 Commentary 109. This result is reinforced by the Convention’s rules on risk of loss. Under nearly all of the situations envisaged in Article 86, risk has passed to the buyer under Articles 67 (handling over the carrier), 68 (making of contract or handling over to carrier), or 69 (buyer’s taking over the goods).
Decision: FR. C. de Cass. ("Sup. Ct."), 4 January 1995, Fauba v. Fujitsu. In reviewing a decision of the Court of Appeals, Paris, the Cour de Cassation addressed the duties of a buyer who has received an excess quantity in a shipment by the seller. The court rejected S’s claim that B should pay for the excess quantity, noting that, under Art. 86(1), B’s duties were confined to preserving the goods. (See, accord, Art. 52.) Articles 86–88 do not require a buyer to bear the expense of redelivering excessive quantities to the seller. CLOUT 155, UNILEX D. 1995.1. [The above decision was also noted at Art. 55, §325.3, regarding definiteness of agreement on the price.]
See: Schlechtriem, Com. (1998), 671–675 (Eberstein).[page 525]
FOOTNOTES: Chapter on Article 86
1. This article is substantially the same as Article 75 of the 1978 Draft. The last sentence of paragraph (2) was added for clarity. O.R. 399–400, Docy. Hist. 620–621. Cf. ULIS 92.
2. White & Summers §S3 at pp. 365–366 reviews the case law under UCC 2–603. Ont. Law Ref. Com., II Sales 476–477 recommended adoption of rules based on the UCC.