Published by Manz, Vienna: 1986. Reproduced with their permission.

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D. Place of Business (Article 10)

Even though the concept of "place of business" plays a central role in the Convention,[131] the Convention does not define the term.[132] As in German law, it can be assumed that a "place of business" is an establishment of some duration and with certain authorized powers. On the other hand, commercial management of the enterprise is not necessary, since the Convention does not require the place of business to be the main office. For the problems that can arise when a major enterprise has multiple places of business, Article 10(a) should provide an appropriate solution.[132a] Granted, it is not always easy to attach the contract to one of several places of business solely on the basis of the criterion of the "closest relationship to the contract and its performance". A good example is when the contract is negotiated and is to be performed by one place of business, but the formation of the contract is concluded in another place, such as in a multinational's headquarters in a different country. The provision that the circumstances as known to or contemplated by the parties must be taken into account defies further normative description.[133]

The difficulties that, in connection with the determination of the place of business, arise with the term "party" when a state is a contracting party should be clarified with the help of the interpretation proposed by the Finnish delegation, that the party would be the governmental authority that is dealing with the business involved.

The use of the "habitual residence" of a party as an alternative to "place of business" will rarely be applied to legal transactions governed by the Convention. It certainly does not apply merely because a party does some act outside of its place of business. [page 43]

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FOOTNOTES

* The author of this book participated at the Conference as a member of the delegation from the Federal Republic of Germany. The views expressed here are personal to the author and do not necessarily represent the position of the F.R.G. or its delegation.

131. See Article 1(1) (prerequisites for application); see also Articles 31(c), 42(1)(b), 57(1)(a), 57(2), 90, 93(3), 94, 96.

132. See A/Conf. 97/C.1/SR.7 at §66 (= O.R. 269) (complaints by Dabin (Belgium)). See also A/Conf. 97/L.3 (= O.R. 203) (motion); A/Conf. 97/SR.6 (= O.R. 199 et seq.) (discussion in the Plenary).

132a. The German Federal Court has used CISG Article 10(a) in the interpretation of "place of business" in ULIS Article 1. Judgment of June 2, 1982, BGH, 82 WM 846 = 83 IPRax 212.

133. Even if final approval must be given by company headquarters, the location of the headquarters is not considered a "place of business" if the other party need not have taken account of it. See Secretariat's Commentary at 50 §§ 6, 8. For "unforeseeable" delivery from or to a certain place of business, see id.

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