[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).]
66. Article 5 of the CISG regulates the applicability of the Convention to claims which fall under the heading of 'product liability'. Article 5 provides as follows:
1. Liability for Death or Personal Injury
67. Within domestic systems, the area of law known as 'product(s) liability' regulates the liability of sellers (hereunder manufacturers, producers and others) for personal injury and/or property damage caused by the sale of defective goods to any person. In some systems, product liability claims are seen as grounded in delictual (tort) principles; other systems, which also view such claims as contractually based, sometimes allow the two rule sets to compete.[l]
Clearly, a product liability claim advanced by any person who is not a party to a CISG contract cannot be governed by the CISG, in that all third party claims against the seller in such a situation would lie outside the CISG by virtue of Article 4. And as regards the CISG question of inter partes product liability, Article 5 expressly excludes CISG application as regards the seller's liability to any person (including the buyer) for death or personal injury caused by the goods. Therefore, a CISG seller's liability for death or personal injury - both as regards the injury to the buyer and to third parties - must be governed by non-Convention law, typically the law of delict applicable by virtue of the rules of private international law.
2. Damage to Buyer's Property Distinguished
68. This leaves a narrow, yet commercially significant product liability question within the CISG regime: the seller's liability to the buyer for damage to the buyer's property caused by the seller's delivery of non-conforming goods, for example, the sale and delivery of a corrosive chemical in leaky containers causing damage to the floor of buyer's warehouse. Note in this connection that goods which would be regarded as 'defective' in a product liability context are also describable as goods which do 'not conform' under Article 35 of the CISG, and note further that delivery of non-conforming goods renders a CISG seller liable for all 'loss ... suffered by the other party as a consequence of the breach'.
3. Competition Between Convention and Domestic Delictual Rules
69. Because such claims for buyer's property damage traditionally have been regulated by domestic rules of delict (tort, negligence, strict product liability, etc.), a question arises as to whether the application of these older rules should now be displaced by the new CISG regime,[l] or whether the two rule-sets should be permitted to 'compete'. Although there would seem to be good reason to at least allow some degree of competition (concurrent claims), the question will ultimately have to be resolved by the various national courts on a case-by-case basis. [page 46]