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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 57
Place of Payment

242. The contract ordinarily determines the place of payment.[1] As to cases where the contract is silent on this particular point, Article 57(1) provides:

'If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller:
a) at the seller's place of business;[2] or [page 130]
b) if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place.'

The place of payment may be significant in an international context, inter alia, if currency export restrictions are involved. More important from a practical point of view is the fact that the place of payment, as determined by the contract or the Convention's gap-filling rule in Article 57, often determines whether a given forum court enjoys (extraterritorial) jurisdiction to decide disputes which relate to the international buyer's CISG obligation to pay the price.[3]

1. See generally Sevón, L., in Dubrovnic Lectures (Sarcevic and Volken ed., New York, 1986) [available at <http://www.cisg.law.pace.edu/cisg/biblio/sevon1.html>].
2. According to Article 57(2): 'The seller must bear any increase in the expenses incidental to payment which is caused by a change in his place of business subsequent to the conclusion of the contract.' 3. Regarding the 'place of performance' of the 'obligation in question' under Article 5(1) of the EC Jurisdiction and Judgments Convention, see Lookofsky, J., Transnational Litigation and Commercial Arbitration (1992), Ch. 2.2.2(A). The European Court's landmark 1976 decision in Tessili (id. at 33) has not been disturbed by the advent of the CISG, but it is now the CISG which often determines the place of performance of the obligation in question in international sales cases: for numerous cases applying Article 57 in this jurisdictional context, see generally [cisgw3 database] CLOUT and UNILEX. While some might rightly criticize the workings of Article 5(1) of the Jurisdiction & Judgments Convention in general, the 'regional harmonization' of procedural law by the application of CISG Article 57 seems hardly 'inconsistent' with the loftier goals of CISG Article 7; for a contrary view see Honnold, Uniform Law (1999) at 362 [available at <http://www.cisg.law.pace.edu/cisg/biblio/honnold.html>] and compare the critique of Hager in Schlechtriem, Commentary (1998) at 466.
[page 131]


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