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Published in J. Herbots editor / R. Blanpain general editor, International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192. Reproduced with permission of the publisher Kluwer Law International, The Hague.

[For more current case annotated texts by this author, see Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed. (2003) and Lookofsky, Understanding the CISG in the USA, 2d ed. (2004).]

excerpt from

The 1980 United Nations Convention on Contracts
for the International Sale of Goods

Joseph Lookofsky

Article 36
Time of Conformity Determination

  1. Introduction
  2. The General Rule
  3. Subsequent Non-Conformity

1. Introduction

179. As discussed in the foregoing (No. 164 et seq.) Article 35 sets forth the conditions which must be satisfied in order for the goods to 'conform' to the contract and the CISG. Article 36 provides a rule which defines the point in time at which the conformity of the goods is to be judged.

2. The General Rule

180. The general rule is set forth in Article 36, paragraph (1):

'The seller is liable in accordance with the contract and this Convention for any lack of conformity which exists at the time when the risk passes to the buyer, even though the lack of conformity becomes apparent only after that time.'

This rule is tied to the rules regarding the 'passing of risk' set forth in Articles 66 et seq.[1] And it is logical that the CISG conformity determination takes place as of the passing of 'risk', in that, according to Articles 66 et seq., the risk passes at the point in time when the seller delivers the goods, i.e. performs his primary obligation under the CISG contract of sale.

Although the 'risk' (of accidental loss or destruction) usually passes to the buyer when the seller hands the goods over to a carrier (for transmission to the buyer),[2] [page 99]

Article 36(1) makes it clear that the seller remains liable for any non-conformity existing at that particular point in time, i.e., even if the non-conformity in question first becomes discoverable by the buyer at a later point in time.[3] And in this connection it is important to note that goods will generally not be considered fit for ordinary and/or special purposes unless they are of such quality that they remain fit for such purposes for a reasonable period of time after delivery.[4] If, however, the goods are fit (conforming) when delivered, but are later damaged by the carrier's or some other third person's negligent act, the seller will have performed his obligations, and the buyer's only recourse will be against the carrier or such other person.

1. See infra No. 265 et seq.
2. Id.
3. Regarding time limitations which may preclude the buyer from asserting non-conformity discovered after delivery, see Articles 38-44, discussed infra No. 189 et seq.
4. Compare infra No. 181 regarding lack of conformity which 'occurs' after delivery.

3. Subsequent Non-Conformity

181. Paragraph (2) of Article 36 purports to provide a supplement to the general rule:

'The seller is also liable in accordance with the contract and this Convention for any lack of conformity which occurs after the time indicated in the preceding paragraph and which is due to a breach of any of his obligations, including a breach of any guarantee that for a period of time the goods will remain fit for their ordinary purpose or for some particular purpose or will retain specified qualities or characteristics.'

As already emphasized in connection with the discussion of Article 35 above, CISG goods are not considered fit for ordinary or particular purposes unless they are fit and remain fit (for such purposes) for a 'reasonable' time, i.e., the period during which such goods normally/usually remain fit, assuming normal use. Article 36(1) shows that the relevant time for the entire non-conformity determination is the time at which the goods are delivered; conversely, it is not the point in time at which the non-conformity 'appears' (becomes apparent). For example, if the seller delivers washing machines which - due to a latent defect - are not capable of running more than a few weeks, such machines should be described as non-conforming as of the date of their delivery (even though this non-conformity might first be discovered later, when the machines break down).

Article 36(2) expressly covers situations where, due to seller's breach, a given non-conformity occurs after delivery. This would seem to be a rule of extremely limited application which will render the seller liable in certain unusual situations not covered by the rule in paragraph (1). It would, for example, cover the situation where the seller - during the course of an attempt to cure a given non-conformity in goods previously delivered - bungles the job, thus giving rise to a (second) non-conformity (which did not 'exist' at the time of delivery). [page 100]

Apart from such cases, the main thrust of the rule in Article 36(2) seems difficult to understand.[1] Article 36(2) seems mainly directed at a breach of a guarantee (that the goods will remain fit or will retain specified qualities or characteristics). But in those cases where the seller breaches a guarantee of this kind, the breach already 'occurs' at the time of delivery, in that a seller who delivers washing machines which are guaranteed to last 3 years commits a breach at the moment he delivers goods not capable to lasting 3 years.[2] And since such 'guaranty' -breaches should be seen as falling within the general rule in Article 36(1), there was hardly any real need for the 'clarifying' guaranty-provision in the paragraph (2) rule.[3] Hopefully, this provision will not cause more trouble than it was designed to avoid. [page 101]

1. Accord: Schwenzer in Schlechtriem, Commentary (1998) at 292.
2. See supra No. 165. See also, e.g., the COMPRIMEX award of 29 April 1996 reported [at <http://cisgw3.law.pace.edu/cases/960429m1.html> and] in UNILEX (seller liable for non-conformity - inadequate packaging - which existed when the risk passed, even though the non-conformity first became apparent later on).
3. See A/CONF./97/5, Secretariat's Commentary to Article 34(2) of the 1978 Draft Convention, indicating that the drafters found it necessary to 'clarify' the rule in Article 36(1).

Pace Law School Institute of International Commercial Law - Last updated April 4, 2005
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