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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 5
Product Liability

  1. Liability for Death or Personal Injury
  2. Damage to Buyer’s Property Distinguished
  3. Competition between Convention and Domestic Delictual Rules

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:

'This Convention does not apply to the liability of the seller for death or personal injury caused by the goods to any person.'

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.[2] 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.

1. See Zweigert & Kötz, An Introduction to Comparative Law (Oxford 1998) 671-678. Even those systems which generally allow competition (concurrence) between contractual and delictual claims usually decline to admit delictuaIly based product liability claims for 'pure economic loss'; see id. at 625-628 and, e.g. East River S.S. Corp. v. Transamerica Delaval, Inc., 476 US 858 (1986).
2. Supra No. 62 et seq. [page 45]

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.[1] 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,[2] 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]

1. See, e.g., the decision of Handelsgericht Zürich (Switzerland), 26 April 1995, No. HG 920670, reported in UNILEX: contract for the sale and installation of tank; damages caused to buyer's premises by leak of salt water was question governed by CISG.
2. Goods delivered in unsuitable packaging do not conform under Article 35(d). Re. Article 35 generally see infra No. 161 et seq.
3. Regarding Article 74 see infra No. 289 et seq. Regarding the issue of a possible liability 'exemption' for unknowable defects under Article 79, see infra No. 298 et seq.

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'.[2] Although there would seem to be good reason to at least allow some degree of competition (concurrent claims),[3] the question will ultimately have to be resolved by the various national courts on a case-by-case basis. [page 46]

1. As already indicated, due to the operation of Articles 4 and 5, the liability for death or personal injury to any person as well as property damage suffered by third parties will continue to be regulated by domestic rules of delict.
2. Such competition would, of course, not provide plaintiffs with a double recovery but might, e.g. mean a more favourable position vis-à-vis notice requirements, statutes of limitation, etc.
3. Lookofsky, J., supra No. 65, note 2 (1991) at 414-415; compare, e.g., Ziegel, J., 'The Remedial Provisions in the Vienna Sales Convention: Some Common Law Perspectives' in International Sales (Galston & Smit ed. New York. 1984) at 9-7 [available at <http://www.cisg.law.pace.edu/cisg/biblio/ziegel6.html>] ('debatable') and Herber, R. in Schlechtriem, P., Commentary on the UN Convention on the International Sale of Goods (Oxford 1998) at 50 (arguing that some competing tort claims should be precluded); compare also Honnold, J., Uniform Law for International Sales (1999) at 72-76 [available at <http://www.cisg.law.pace.edu/cisg/biblio/honnold.html>].

Pace Law School Institute of International Commercial Law - Last updated April 1, 2005
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