[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
Joseph Lookofsky
IV. Contracts Involving Carriage: the CISG Gap-Filling Rule
269. Most international sales contracts involve carriage of the goods. For such cases, but only insofar as the contract does not contain a trade term which prevails,[1] Article 67(1) of the CISG Convention provides the gap-filling rule:
In most sales contracts involving carriage of the goods, the seller is not bound to hand them over at any 'particular place,' so in most such carriage cases the risk passes to the buyer when the goods are 'handed over' to the first carrier.[2] In other words, in most carriage cases, transit risks fall on the buyer, and practical considerations accord with this general CISG rule: the buyer will be in a better position to inspect goods damaged by transit related risks and make claims against the carrier or insurer concerned.[3]
Goods are only considered as 'handed over to the first carrier' if that carrier is a third party; if the seller delivers using means of transportation and personnel under his own control,[4] the goods are not 'handed over [to a] carrier' in the Article 67(1) sense,[5] and the risk does not pass until the buyer actually 'takes over the goods.'[6] If the seller arranges for carriage by two successive (independent) carriers, the risk usually passes when the goods are handed over to the first of these; however, if the seller is contractually bound to hand the goods over at the transshipment point, the risk passes first at that 'particular place.'
270. Article 67(1) concludes with the observation that the seller's retention of documents controlling the disposition of the goods does not affect the passage of the risk. However, since a trade term (Incoterm, etc.) will often be included in a [page 143] documentary sales contract,[1] Article 67(1) will not be likely to control the risk issue in such transactions.[2]
V. Goods Not Identified to the Contract
271. In certain situations, the buyer will deserve some assurance that the goods which have been damaged or lost were actually the same goods which the seller intended the buyer to receive: e.g. where the seller regularly ships large quantities of fungible goods, the buyer should only bear the risk if it is clear that the goods damaged in a given shipment were 'his.' Therefore, Article 67(1) operates only with respect to 'identified' goods; the risk does not pass to the buyer unless and until the goods are clearly 'identified' to the contract: by markings on the goods, by shipping documents, by notice given to the buyer or otherwise.[1] Thus, in sales involving the carriage of bulk goods, a particular buyer only bears the risk as to his undivided share in the bulk if that share has somehow been 'identified' to the contract in question.[2]
Pace Law School
Institute of International Commercial Law - Last updated April 5, 2005