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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 43
Third Party Claims: Consequences of Failure to Notify

204. As in cases where an alleged breach relates to non-conforming goods (Article 35), a buyer alleging breach of an obligation under Articles 41-42 must give the seller timely and specific notice thereof. Article 43(1) provides:

'The buyer loses the right to rely on the provisions of article 41 or article 42 if he does not give notice to the seller specifying the nature of the right or claim of the third party within a reasonable time after he has become aware or ought to have become aware of the right or claim.' [page 112]

If the buyer becomes aware of a conflicting third-party right or claim fails to provide the seller with timely and specific notice of same, the buyer loses 'the right to rely' on the provisions of Articles 41 or 42. As a starting point, at least, the buyer loses the right to assert all the various remedies otherwise provided under the Convention for seller's breach (the right to require performance, to avoid, to claim damages or a proportionate reduction, etc.);[l] this starting point is, however, modified in cases where buyer can provide a 'reasonable excuse' for his failure to notify in accordance with Article 39(1).[2]

1. Regarding the various remedies generally available to buyer for seller's breach, see infra No. 208 et seq. (re. Section III of Ch. II) and infra No. 278 et seq. (re. Ch. V).
2. Regarding excuses under Article 44, see infra No. 206 et seq.

7. Seller Aware of Third Party Right or Claim

205. By virtue of Article 43(1) a buyer who fails to notify the seller of a given third party right or claim may lose the right to rely thereon. Conversely, a seller who is aware of the right or claim concerned ought not be permitted to enjoy the protection which this rule provides. For this reason, Article 43(2) provides that the seller is not entitled to rely on the provisions of the preceding paragraph (1) if he knew of the right or claim of the third party and the nature of it.

In contrast with the slightly more buyer-friendly rule in Article 40,[1] Article 43(2) precludes the seller from relying on the buyer's failure to notify only in cases where the seller actually knew of the right or claim of the third party; a showing that the seller 'could not have been unaware' will not suffice. [page 113]

1. Supra No. 196.

Pace Law School Institute of International Commercial Law - Last updated April 5, 2005