Cite as Maskow, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 383-393. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.
1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision
The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.
1. History of the provision
1.1. - In substance this article corresponds exactly to Article 65 of ULIS, adapted to the drafting style of the Convention. During the Vienna Conference no amendments were submitted and no discussion took place with respect to this article.
2. Meaning and purpose of the provision
2.1. - This article is the counterpart of Article 30, which defines the obligations of the seller (compare also KNÜPFER, in Papers of a Seminar on the Convention on the Limitation Period and on the Convention on Contracts for the International Sale of Goods Prepared within the Framework of the UN-Commission for International Trade Law, Council for Mutual Economic Assistance -- Secretariat, Moscow, 1983 (Russ.), 152). Both articles taken together can be understood as a definition of the «contract of sale of goods» in the sense of Article 1(1). Since this phrase describes the basic subject matter of the Convention, both parts of its definition determine the scope of application of the Convention.
That this definition is split into two parts is typical of the drafting style of the Convention and reflective of its structure -- separate chapters for the obligations of the seller and of the buyer. [page 383]
The definition as a whole corresponds to definitions of a contract of sale of goods in most legal systems. At the same time it takes into consideration the requirements of modern international trade. This is particularly evident in its first part (Article 30) in which, instead of using «handing over» or a similar expression, the definition employs the more general term «delivery». Thereby, the typical case in which the contract of sale involves carriage of goods is covered; and all the more so in mentioning the handing over of documents.
The two parts of the definition do not correspond to one another perfectly. A strict correspondence is evident only between the obligation of the seller to deliver on the one hand and the obligation of the buyer to take delivery on the other.
2.2. - The most important obligations of the parties are expressed in Articles 30 and 53. These obligations are essential for a contract to be a sales contract. In some juridisctions a distinction is made between main and subsidiary obligations. This distinction is relevant for the legal consequences in case of a breach of contract (see, e.g., § 289 of the Democratic Republic of Germany Law on International Commercial Contracts). The Convention does not make such a distinction. The legal effects of a breach of contract do not depend on the nature of the obligation broken, but on the consequences of the breach, i.e., «the detriment to the other party» (Article 25). On the other hand, the detriment will typically be greater when a main obligation has been broken. By enumerating the most important obligations of the parties, Article 30 and 53 give an indication of obligations whose breach is more likely to result in a fundamental breach of the contract.
2.3. - In addition to these main obligations the buyer has many others. The Convention deals with them first in a general manner. Article 61(1) makes the remedies of the seller contingent on a failure by the buyer «to perform any of his obligations under the contract or this Convention». Other obligations of the buyer are then mentioped expressly in Article 62. Article 81 mentions «the rights and obligations of the parties consequent upon the avoidance of the contract», thus indicating other obligations of the buyer. [page 384]
The Convention treats a few obligations indirectly in the context of the consequences arising from failure to perform them. Examples are the obligations of the buyer to furnish technical drawings (Article 42(2)(b)) and his obligation to specify the form of the goods (Article 65). In both cases contractual stipulations are presupposed.
Besides these, other obligations of the buyer may be determined by usage (see Article 9) or become part of the contract as the intent of a party (see Article 8(3)).
The obligations mentioned in Article 53 are primary obligations which are to be fulfilled in the normal performance of the contract. The buyer also has secondary obligations which apply when normal performance is disturbed. These obligations are regulated in detail by the Convention. The buyer has to give notice to the seller of an impediment causing a failure to perform (Article 79). The buyer has certain obligations to preserve the goods under specified conditions (Articles 85 et seq.). And, the buyer may have an obligation to examine the goods (Article 38).
The most important way of fixing the other obligations of the buyer is by way of contractual stipulation. Since these obligations vary from contract to contract, the Convention wisely refrained from regulating them.
Experience shows that parties are commonly able to agree on their primary obligations. On the other hand they often fail to foresee the legal consequences of a breach, particularly those concerning other obligations. For this reason the strength of the Convention lies in its exhaustive treatment of the seller's remedies in the case of a breach of any obligation by the buyer, whether the obligation is provided for in the Convention or in the contract.
2.4. - The buyer's obligations as created by Article 53 to pay the price and to take delivery are of a very complex nature. They include a number of different acts which could be seen as the subject-matter of different obligations. The Convention gives further details for the payment of the price in Articles 54 to 59 and for taking delivery in Article 60. The obligation of the buyer to take the necessary steps to effect payment has become part of his obligation to pay (see commentary on Article 54, infra, §§ 1.1., 2.3.). But, the parties' contract plays a role at least as [page 385] important as that of the Convention in defining the exact scope of these main duties of the buyer. Virtually all international sale of goods contracts pay particular attention to the choice of trade terms and to the conditions of payment. Frequently reference is made to the appropriate rules of the International Chamber of Commerce (INCOTERMS, Uniform Rules for Collections, Publications no. 322 of the International Chamber of Commerce, Uniform Customs and Practice for Documentary Credits, Publications no. 400 of the International Chamber of Commerce) so that the obligations of the buyer pursuant to these instruments become part of his obligations according to Article 53.
2.5. - The obligation of the buyer to pay the price implies that a monetary performance is required. The impression that the price involves payment in money is strengthened by certain provisions concerning payment.
Given the importance of Article 53 in defining a cqntract of sale (see § 2.1., supra), doubts may arise as to whether different types of linked operations not involving a monetary exchange such as barter, buy-back, compensation, and counter-purchase fall outside the Convention's scope of application.
The applicability of the Convention is rather clear in the case of compensation and counter-purchase. In compensation contracts the seller accepts that the value of the goods delivered will be offset wholly or partially by counter-deliveries, which usually are agreed upon in a separate contract. That the first contract contains elements beyond those of a sales contract does not prevent application of the Convention to the sales elements. Counter-purchase is here seen as the making of several related contracts covering deliveries in both directions. The application of the Convention to these contracts does not raise any particular problems. In principle, this would also hold true for contracts according to which a certain amount of money is agreed upon as the price, but for which repayment can be made in whole or in part, by the delivery of products manufactured with the equipment sold («buy-back» agreement). But what about a genuine barter contract which provides for a direct exchange of goods with no money and not third party involvement? As for application of ULIS, the conclusion has been drawn, though half-heartedly and admitting certain exceptions, that such contracts do not [page 386] fall within the scope of the Convention (see VON CAEMMERER, in DÖLLE, Einheitliches Kaufrecht, 350; but without reservation HERBER, in DÖLLE, Einheitliches Kaufrecht, 9). On the other hand, in genuine barter contracts both parties are sellers. Therefore, the Convention would not necessarily be excluded. Admittedly, this would raise some theoretical problems concerning the mutual dependance of the performance of the parties (see in particular Article 56), since the assumptions are different from those of sales contracts in the strict sense. On a practical level this problem would commonly be solved by the contract itself. Nevertheless, both interpretations seem admissible according to the text of the Convention. It is therefore advisable for parties to barter contracts to agree upon the application of the Convention to avoid misunderstandings.
The problem of whether barter contracts are covered has also been discussed in connection with the General Conditions of Delivery of Goods between Organisations of the Member Countries of the Council for Mutual Economic Assistance 1968/1975 (version of 1979); there, too, different opinions have been expressed (see, as to the former version, KEMPER-STROHBACH-WAGNER, Die Allgemeinen Lieferbedingungen des. RGW 1968 in der Spruchpraxis sozialistischer Aussenhandelsschiedsgerichte. Berlin (Staatsverlag der Deutschen Demokratischen Republik), 1975, 46).
2.6. - The obligation to take delivery, not enforceable under ULIS (see Articles 66 et seq.), is enforceable under the present Convention (Article 62), subject to the provision of Article 28. This is of little practical importance since the seller will almost always prefer either to claim for the price or, where this seems to be futile, to avoid the contract.
3. Problems concerning the provision
3.1. - The Convention prescribes only the place and time for making delivery (Articles 31 and 33). The place and time for taking delivery have to be derived from these provisions. This in principle is possible since, as has been pointed out earlier, the seller's obligation to deliver the goods corresponds to the buyer's obligation to take delivery. But this does not necessarily mean that the place and time of making delivery and of taking delivery are identical. [page 387]
The Convention distinguishes between contracts involving carriage of the goods (Article 31(a)) and those in which the goods must be placed at the buyer's disposal, either at a known particular place where they are, or where they are or are to be manufactured or produced or at the seller's place of business (Articles 31(b)(c)). As a third possibility the Convention leaves it open to the parties to agree on a particular place for delivery (Article 31 introductory clause). The contract doubtlessly involves carriage of the goods when the seller has to arrange for transportation; as in C.&F. and C.I.F. contracts. In these cases the buyer has to take delivery at the agreed upon port of destination at the time the goods arrive, provided they are shipped in conformity with the contract. Since the seller has already fulfilled his obligation to deliver when he handed over the goods to the relevant carrier, the place and time for making delivery and for taking delivery differ.
When the goods have to be put at the buyer's disposal, this necessarily includes so informing the buyer. This information may already be contained in the contract (for example, if the goods are stored); if not, it must be given by the seller pursuant to Article 27. While not prescribed by the Convention, this is but a simple necessity corresponding to commercial usage (see also INCOTERMS, EX WORKS, A.4). To this extent a corresponding legal obligation exists. On the other hand it seems to go a bit too far to establish a general principle of communications (see HONNOLD, Uniform Law, 160, note 2; TALLON, in GALSTON and SMIT, International Sales, 7-15). The buyer has to take delivery at the respective place within a reasonable period after this communication since he cannot be required to take delivery immediately. Article 69(1) which mentiones a «due time» for taking over the goods may be seen as a hint in this direction (see HUBER, UNCITRAL-Entwurf, 515). INCOTERMS also impute that the buyer has reserved to himself a period within which to take delivery of the goods (see, e.g. INCOTERMS, EX WORKS, B.4). Many contracts cover this problem insofar as it is relevant. In this case place and time of making delivery and of taking delivery are identical.
If a place for delivery is specified, then the seller is accordingly bound to deliver either at the place of final destination or, more frequently, at a place through which the goods pass on their way from seller to buyer. The latter result is that contemplated [page 388] by most of the currently used trade terms. If the terms F.A.S. or F.O.B. are agreed upon, the place for delivery is the port. The common denominator of all these cases, in which handing over of the goods does not occur at the buyer's place, is that the buyer has to arrange for transportation, at least in part. As it is frequently difficult to fix, at the making of the contract, an exact date at which the goods shall be at the place of handing over, certain procedures are agreed upon in order to fix that date later, and to maintain a certain flexibility (compare also INCOTERMS, F.A.S., B.4.; F.O.B., B.4). The buyer has to take delivery at the agreed place and at the time indicated. Where delivery occurs at a place en route, taking delivery by the buyer often includes providing means of transportation from that point on, particularly if the means of transportation changes there (see e.g., INCOTERMS EX SHIP, B.1.; EX QUAI, B.1.). In these cases the exact timing is of special importance. The problem is lessened if the seller has to arrange transportation from that point on (see e.g., INCOTERMS F.O.R./F.O.T.s, A.2, A.3; F.O.B. airport, A.3) or if he has to deliver at the final destination (buyer's place of business, factory, or store). In addition, in all these cases delivery and taking delivery are coincident.
For the details of taking delivery, including the exact place and time, the buyer must observe the regulations of the different kinds of carriers and of port and customs authorities as well as the usages prevailing at the place of destination. This conclusion can be based on Article 9(2), if the local usage to be observed meets the requirements of that provision.
For the contents of the obligation to take delivery, see commentary on Article 60 infra, §§ 2.3. to 2.6.
Where the seller is bound to hand over documents relating to the goods, he has to do so at the time and place required by the contract (Article 34). The obligation to take delivery includes the buyer's taking the documents at that place and time.
3.2. - The seller's obligation to deliver the goods (Article 30 et seq.) requires him to deliver the goods conforming to the contract. The question arises whether the buyer has a reciprocal right to refuse taking delivery if the seller -- speaking vaguely for the time being -- partially or fully fails to conform with his obligations relating to delivery, as created by the contract and the [page 389] Convention. From the commercial point of view the answer is important in many respects; in particular because of the link between delivery and payment (Article 58(1)(2)), but also in respect of the passing of the risk (Article 69). In spite of this importance the question is not clearly regulated by the Convention.
With respect to ULIS the opinion has been expressed that a right of the buyer to refuse taking delivery existed, though neither by that convention was it expressly granted (MERTENS-REHBINDER, Internationales Kaufrecht, 234). How can this question be solved according to the present Convention?
We are speaking here about refusal without avoidance of the contract. Obviously, if the requisites for avoidance are met and the buyer has declared the contract avoided before taking delivery according to Article 49 or 51 of the Convention, he is no longer obliged to take delivery. But such requisites may not be met or the buyer may not want to declare the contract avoided, but rather demand goods fully conforming with the contract. By refusing to take delivery of goods not fully corresponding to the contractual conditions the buyer can force the seller to fulfil his obligations. The seller would face delay, and in order to avoid the negative consequences of delay, he would strengthen his efforts to perform. Since taking delivery and payment of the price generally are linked, at least partially, the buyer would have the further advantages of paying later, and not for non-conforming goods. Action is required on the seller's part in order to obtain payment.
Article 52 allows the buyer to refuse taking delivery of goods delivered before the date fixed or of excess quantities. The Convention mentions no other concrete grounds for refusal. Article 86 presupposes that the buyer may exercise a right under the contract or the Convention to reject the goods. We assume that a refusal to take delivery of the goods as presupposed in Article 86 is basically the same right of refusal of the goods as under Article 52. Articles 46(1) and 47(1) are at least consistent with the assumption of the buyer's right to refuse taking delivery under certain conditions. On the other hand it is not provided for among the remedies of the buyer, except for special cases (Article 52). The question should be answered by interpreting the Convention as a whole, taking into account the general principles on which it is based (Article 7(2)). The merits of each case must be discussed individually on a case-by-case basis. [page 390]
3.2.1. - The buyer is obviously not obliged to take delivery if the seller fails to fulfil his obligations concerning the place of delivery (Article 31), or to specify the goods by notice (Article 32(1)). The buyer may refuse to do so and require performance according to Article 46(1), and fix an additional period pursuant to Article 47(1). Delivery occuring before the date fixed is covered by Article 52(1). Refusing to take delivery in case of delay not constituting a ground for avoiding the contract makes no sense, since this would lead to even later delivery. Therefore, refusal is only possible when the contract is legitimately avoided (Articles 49, 51).
3.2.2. - The most complicated seems to be whether the buyer may refuse to take delivery where the goods do not correspond with the contractual specifications in respect of quantity (i.e., delivery of a quantity smaller than that provided for in the contract) or quality, or are not free of rights or claims of third parties (whether or not based on industrial or intellectual property). It goes without saying that the buyer is entitled to refuse if the goods delivered are substantially different from the goods agreed upon in the contract. Furthermore, refusal seems to be allowed where delivery of substitute goods is legitimately required (Article 46(2)). But what about when the conditions are met for requiring remedy of the non-conformity of the goods and the buyer so requires? Is he obliged to take delivery of non-conforming goods in order to have them repaired later or may he reject them until repair is made? The answer is not clear. In the light of the principles of the Convention, one might conclude that the buyer is not obliged to take delivery, since it is one of the principles of the Convention that the seller has to deliver in full conformity with his obligations and the buyer only has to accept such performances. This view would also be supported by the link between payment and delivery (Article 58(1)(2)) and by Article 58(3). Article 58(3) offers the general rule that the buyer is not bound to pay the price until he has had an opportunity to examine the goods. This right would gain higher importance if the buyer were also entitled to reject non-conforming goods. Insofar as the buyer does not take delivery he has to preserve the goods (Article 86) which secures the interests of the seller. [page 391]
On the other hand, it could be argued that the buyer might not be in a position to take possession of the goods (Article 86(2)) without taking delivery, and that refusal to take delivery might also contradict the principle to mitigate losses of the other party (see Article 77). Of course this problem becomes relevant only when the buyer has become aware of the lack of conformity between the time of the conclusion of the contract (see Article 35(3)) and taking of delivery. Therefore, it has to be considered that the Convention makes a distinction between reception and taking delivery of the goods (Article 86(1); see commentary on Article 60, infra, § 2.5.). Frequently, the buyer in practice has no opportunity to examine the goods before taking delivery (see commentary on Article 59(3), infra, § 2.8.). The problem can also be covered by special contractual clauses or by usages according to Article 9. Where this is not the case the solution should be derived from the Convention and not from the national law (see Article 7(2)). Refusal to take delivery should in general be allowed when the goods offered are not in conformity with the contract; however, rejection of the goods must be proportionate to the degree of the deviation from the contract and its consequences for the buyer. In principle, minor defects should not entitle the buyer to reject the goods. This result deduced from the principles of the Convention as expressed in the relevant provisions accords with the principles of good faith (Article 7(1)).
The situation is even less clear in respect of rights or claims of third parties, since the legal consequences of such breaches in particular are not covered by the Convention. But since the concept of breach of contract is a general one, not dependent on the individual form of the breach, the Convention is applicable also to such breaches; and in particular the special rules concerning the lack of conformity seem to fit best here. Therefore, the above conclusions as to the refusal to take delivery in cases of lack of conformity should apply to lack of freedom from third party claims as well.
3.2.3. - Where only a part of the goods is delivered or only a part is in conformity with the contract, the buyer is obliged, as a converse of Article 51(1), to take delivery of the conforming parts delivered and may refuse to take delivery of the parts not in conformity with the contract according to the principles already [page 392] dealt with. Although the buyer is, under exceptional circumstances, entitled to avoid the contract in its entirety (Article 51(2)) which includes the right to refuse to take delivery (insofar as this has not yet taken place), he does not seem to be entitled to refuse taking partial delivery until complete delivery in conformity with the contract is offered. But this solution is not without a doubt. Certainly it would not apply in cases in which incomplete goods are delivered which have to be treated as non-conforming goods.
In the case of documentary sales the obligation to accept the documents is part of the obligation to take delivery, but the documents may be rejected according to the same principles as elaborated for goods (see also Article 36). But again the Convention does not deal expressly with this problem.
3.2.4. - Without trying to be exhaustive, a further group of cases will be mentioned. If the seller makes the taking of delivery by the buyer dependent on additional conditions contrary to the terms of the contract (e.g., instead of payment within thirty days after delivery he requires cash against docunients), the buyer is not obliged to take delivery (but see Article 71). [page 393]