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

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D. The Passing of Risk

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3. Local Purchase (Article 69(1))

Sales involving carriage and sales of goods in transit so predominate the scheme of the Uniform Law for International Sales that all other cases are considered only in the residual provision (Article 69). When the goods are to be picked up at the seller's place of business, the principle is that the risk generally passes to the buyer when he takes over the goods. At any event, the risk passes when the goods are placed at the disposal of a buyer who then fails to take delivery. Whether the buyer is at fault for the delay in taking delivery is irrelevant.[372] In the sale of bulk [page 90] commodities, the goods must be clearly identified to the contract in question before placing them at the buyer's disposal passes the risk to the buyer.

Article 69(1) expressly concerns only cases in which the buyer has delayed taking delivery. It should also be interpreted to include those situations in which the goods could not be delivered because of other breaches of the contract by the buyer, such as when the buyer has not obtained a required import license in a timely fashion. The Federal Republic of Germany's proposal to have the risk pass in all cases where the buyer's breach prevents normal delivery [373] found no support because it was assumed that the cases covered by the German proposal were already included.[374]

4. Other Places of Delivery (Article 69(2))

If a seller is not to deliver the goods at his place of business but rather at another place, including - as in a sale to destination - at the buyer's place of business,[375] the risk passes to the buyer at the earliest moment when the buyer could have taken delivery. Where delivery is to be made at a place which is not the buyer's place of business, such as in the case of warehoused goods, risk passes only when delivery is due and the buyer is in a position to pick up the goods [376] and aware that the goods have been placed at his disposal.[377] Where the buyer does not know - for example, from receipt of a warehouse document or a notice of release, etc. - that and where the goods are available, the risk does not pass until the buyer has been notified (Article 67(2)).[page 91]

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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.

372. See Article 79(5).

373. This included those cases of sales involving carriage (Article 67), where for example, the buyer neglects his responsibility to name a particular ship.

374. See A/Conf. 97/C.1/SR.32 at 8 (= O.R. 407). The discussion also concerned a similar Australian motion for the case that the seller does not tender completely because the buyer refuses to pay. The arguments for rejecting both motions contradict each other to some extent. Thus, in my opinion, it has still not been decided whether the risk really passes to the buyer where the seller neither dispatches the goods nor places them at the buyer's disposal due to the buyer's delay in payment or his failure to provide a letter of credit. My impression is that the consequences of these motions were not fully appreciated. The solution can be found on the basis of Article 7(2). A general principle can be derived from Article 67 and 69, namely that the seller no longer bears the risk once he has relinquished control over the goods in accordance with the contract or has been prevented from doing so by the buyer's acts or omissions which are not in accordance with the contract. The risk should therefore pass in this case not only when the buyer does not take delivery of the goods - the buyer's failure to take delivery would normally keep the risk from passing - but also when the buyer, in violation of the contract, fails to cooperate or fulfill the necessary delivery requirements.

375. The case is not explicitly regulated, but the solution follows from Article 67(2). Cf. Huber at 456; Hartley, supra note 36, § 8.21.

376. For the case of warehoused goods, this requires a valid claim against the warehouseman or an order that he release the goods. See Dölle (Neumayer) Article 97 § 10 (for ULIS); Honnold, Commentary § 377 (for CISG).

377. Cf. Secretariat's Commentary at 205 § 6.

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