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Article 31. Place for Delivery

TEXT OF ARTICLE 31

If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists:

(a) if the contract of sale involves carriage of the goods - in handing the goods over to the first carrier for transmission to the buyer;

(b) if, in cases not within the preceding subparagraph, the contract relates to specific goods, or unidentified goods to be drawn from a specific stock or to be manufactured or produced, and at the time of the conclusion of the contract the parties knew that the goods were at, or were to be manufactured or produced at, a particular place - in placing the goods at the buyer's disposal at that place;

(c) in other cases - in placing the goods at the buyer's disposal at the place where the seller had his place of business at the time of the conclusion of the contract.


OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

31A Contracts involving carriage of goods (art. 31(a))

31A1 Obligation to hand goods to first carrier

31B Contracts not involving carriage and parties knew location of goods

31B1 Goods to be placed at disposal at known place (art. 31(b))

31C Other cases

31C1 Goods at buyer's disposal at seller's place of business

31D Other issues

[N.B. Article 31 deals with contractual obligations of the parties. Passing of risk of damage or loss is governed by Chapter IV: articles 66-70.]


DESCRIPTORS

Delivery ; Jurisdiction


CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES

UNCITRAL has identified relevant cases in Digests containing case annotations for each article of the CISG. UNCITRAL cites 22 cases in its Digest of Art. 31 case law:

Austria      3           Germany      9           Spain   1
European Court    1 Italy      2 Switzerland        1
France      3 Netherlands      2 TOTAL:   22

Presented below is a composite list of Art. 31 cases reporting UNCITRAL Digest cases and other Art. 31 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 13 April 2000 citation reported below. Cases are coded to the UNCITRAL Thesaurus.

English texts and full-text English translations of cases are provided as indicated. In most instances researchers can also access UNCITRAL abstracts and link to Unilex abstracts and full-text original-language case texts sourced from Internet websites and other data, including commentaries by scholars to the extent available.
 

Netherlands 29 July 2009 Rechtbank [District Court] Arnhem (___ v. Omnibus Trading B.V.)

Netherlands 1 July 2009 Rechtbank [District Court] Rotterdam (Sarens N.V. v. Gemax D.O.O.)

Switzerland 26 June 2009 Bundesgerichtshof [Federal Supreme Court] (Graffiti preservative case) 31A [translation available]
 

Germany 9 July 2008 Bundesgerichtshof [Federal Supreme Court] (Airbag parts case)

Switzerland 19 May 2008 Cour supreme du canton [Appellate Court] Berne
 

Germany 20 December 2007 Oberlandesgericht [Appellate Court] Oldenburg (Industrial tools case) [translation available]

Netherlands 21 August 2007 Gerechtshof [Appellate Court] Arnhem

Italy 24 June 2007 Corte di Cassazione [Supreme Court]

Switzerland 19 June 2007 Handelsgericht [Commercial Court] Aargau (Railway rails case) [translation available]

Germany 11 June 2007 Oberlandesgericht [Appellate Court] Dresden (Airbag parts case) 31A [translation available]

Spain 16 May 2007 Tribunal Supremo [Supreme Court] (Water apparatus case)

Germany 7 March 2007 Landgericht [District Court] Siegen (Smith pieces case)

Italy 3 January 2007 Court Supremo di Cassazione [Supreme Court] (Bourjois S.A.S. v. Gommatex Poliuretani S.p.A.) 31A
 

Italy 9 December 2006 Tribunale [District Court] Verona (Specchiasol S.r.l v. Labofatorios Vendrell S.A.)

Germany 23 October 2006 Landgericht [District Court] Bamberg (Plants case) [translation available]

Netherlands 29 September 2006 Gerechtshof [Appellate Court] 's-Gravenge (All Trade B.V. v. CM Supplies (UK) Limited) 31A

Italy 27 September 2006 Court Supremo di Cassazione [Supreme Court] (Saneco S.A. v. Toscoline S.r.l.) 31A

Germany 20 September 2006 Landgericht [District Court] Krefeld (Charcoal case) 31A [translation available]

China September 2006 CIETAC Arbitration Award [CISG 2006/14] (Spare parts case) [translation available]

Italy 24 August 2006 Tribunale [District Court] di Rovereto (Euroflash Impression S.a.s. v. Arconvert S.p.A.)

Netherlands 15 August 2006 Gerechtshof [Appellate Court] Arnhem

Slovak Republic 27 June 2006 District Court Nitra (Children's equipment case) [translation available]

Slovak Republic 26 May 2006 Supreme Court (Wafers case) [translation available]

Switzerland 23 May 2006 Tribunal cantonal [Higher Cantonal Court] Valais (Suits case) [translation available]

Slovak Republic 17 May 2006 District Court Nitra (Agricultural products case) [translation available]

Slovak Republic 27 February 2006 District Court Nitra (L.-K S.r.l. v. N. S.r.l.) [translation available]

China February 2006 CIETAC Arbitration Award [CISG 2006/16] (Fluorite case) [translation available]

Italy 10 January 2006 Tribunale [District Court] Padova (Merry-go-rounds case) [translation available]
 

Switzerland 19 September 2005 Kantonsgericht Wallis / Tribunal cantonal Valais [Canton Appellate Court]

Germany 3 August 2005 Landgericht [District Court] Neubrandenburg (Pitted sour cherries case) [translation available]

Germany 13 May 2005 Landgericht [District Court] Freiburg (PVC light panel case) 31A [translation available]
 

Austria 14 December 2004 Oberster Gerichtshof [Supreme Court] 31A [translation available]

Germany 26 October 2004 Landgericht [District Court] Saarbrücken [translation available]

Italy 20 September 2004 Corte Suprema di Cassazione [Supreme Court] [translation available]

Italy 28 August 2004 Tribunale [District Court] Rovereto 31A [translation available]

Belgium 4 June 2004 Rechtbank van Koophandel [District Court] Kortrijk [translation available]

Austria 1 June 2004 Oberlandesgericht [Appellate Court] Wein 31B1 [detailed abstract available]

China June 2004 CIETAC Arbitration Award [CISG 2004/08] (Citric acid case) [translation available]

Germany 28 May 2004 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]

Netherlands 12 May 2004 Rechtbank [District Court] 's-Hertogenbosch

Germany 23 March 2004 Landgericht [District Court] München
 

Switzerland 11 December 2003 Kantonsgericht [District Court] Zug 31A [detailed abstract available]

Germany 10 December 2003 Oberlandesgericht [Appellate Court] Karlsruhe [translation available]

Belgium 4 December 2003 Rechtbank van Koophandel [District Court] Kortrijk

Belgium 11 September 2003 Hof van Beroep [Appellate Court] Gent

Switzerland 19 August 2003 Tribunal Cantonal [Appellate Court] Valais [translation available]

Belgium 7 May 2003 Rechtbank van Koophandel [District Court for Commercial Matters] Hasselt
 

Germany 19 December 2002 Oberlandesgericht [Appellate Court] Karlsruhe 31C [translation available]

Germany 17 December 2002 Landgericht [District Court] Giessen [translation available]

France 28 November 2002 Cour d’appel [Appellate Court] Versailles 31A

Italy 18 October 2002 Court Supremo di Cassazione [Supreme Court] (Janssen Cosmeceutical Care GmbH v. Munda Alberto)

Germany 4 October 2002 Oberlandesgericht [Appellate Court] Koblenz 31A [translation available]

Switzerland 25 February 2002 Kantonsgericht [District Court] Schaffhausen [translation available]

Russia 24 January 2002 Arbitration Award No. 27/2001 31A [translation available]
 

Germany 12 November 2001 Oberlandesgericht [Appellate Court] Hamm (Memory module case) 31A [translation available]

Germany 16 July 2001 Oberlandesgericht [Appellate Court] Köln 31A ; 31B ; 31C [translation available]

France 26 June 2001 Cour de Cassation [Supreme Court] [E 99-14.844]

Spain 18 June 2001 Audiencia Provincial [Appellate Court] Murcia 31A [translation available]

Spain 15 June 2001 Audiencia Provincial [Appellate Court] Baleares [translation available]

Belgium 19 April 2001 Rechtbank van Koophandel [District Court] Kortrijk 31A

France 29 March 2001 Cour d'appel [Appellate Court] Orléans 31A1 [translation available]

Denmark 15 February 2001 Højesteret [Supreme Court] 31A [translation available]

Germany 16 January 2001 Landgericht [District Court] Aachen
 

France 6 October 2000 Tribunal de commerce [District Court] Montargis

Italy 3 July 2000 Tribunale [District Court] Reggio Emilia 31A [translation available]

* Italy 19 June 2000 Suprema Corte di Cassazione [Supreme Court] 31A

Switzerland 26 May 2000 Tribunal cantonal [Appellate Court] Vaud (Asphalt case)

* Germany 13 April 2000 Amtsgericht [Lower Court] Duisburg 31A [translation available]

Belgium 29 March 2000 Hof van Beroep [Appellate Court] Gent

Italy 10 March 2000 Court Supremo di Cassazione [Supreme Court] (Krauss Maffei AG v. Bristol Meyer Squibb S.p.A.)
 

* Germany 3 December 1999 Oberlandesgericht [Appellate Court] München 31B1 [translation available]

Germany 28 October 1999 Oberlandesgericht [Appellate Court] Braunschweig [translation available]

Spain 20 October 1999 Audiencia Provincial [Appellate Court] Alecante 31A

Germany 12 October 1999 Amtsgericht [Lower Court] Stendal

* Austria 29 June 1999 Oberster Gerichtshof [Supreme Court] [translation available]

Netherlands 21 May 1999 Hoge Raad [Supreme Court] 31A

Switzerland 8 April 1999 Handelsgericht [Commercial Court] Zürich [translation available]

* Germany 24 March 1999 Landgericht [District Court] Flensburg 31A1 [translation available]

ICC March 1999 International Court of Arbitration, Case 9978

* Switzerland 10 February 1999 Handelsgericht [Commercial Court] Zürich 31A1 [translation available]
 

Germany 29 December 1998 Hamburg Arbitration award [translation available]

* Germany 22 September 1998 Oberlandesgericht [Appellate Court] Oldenburg [translation available]

* Austria 10 September 1998 Oberster Gerichtshof [Supreme Court] [2 Ob 208/98x] 31A

* Austria 10 September 1998 Oberster Gerichtshof [Supreme Court] [2 Ob 221/98h] 31A

France 16 July 1998 Cour de Cassation [Supreme Court] 31A1 [translation available]

* Germany 23 June 1998 Oberlandesgericht [Appellate Court] Hamm 31C [translation available]

Japan 19 March 1998 Tokyo Chiho Saibansho [District Court]

* France 18 March 1998 Cour d'appel [Appellate Court] Paris 31C [translation available]

* France 4 March 1998 Cour d'appel [Appellate Court] Paris 31C1 [translation available]
 

* France 2 December 1997 Cour de Cassation [Supreme Court] 31A [translation available]

Germany 5 November 1997 Oberlandesgericht [Appellate Court] Hamm 31A [translation available]

* Spain 31 October 1997 Audiencia Provincial [Appellate Court] Cordoba 31A

France 28 October 1997 Tribunal de commerce [District Court] Paris

* Netherlands 26 September 1997 Hoge Raad [Supreme Court] 31A1

China 18 August 1997 CIETAC Arbitration Award [CISG/1997/26] (Vitamin C case) [translation available]

Netherlands 24 July 1997 Gerechtshof [Appellate Court] 's Hertogenbosch 31A1

Belgium 29 May 1997 Rechtbank van Koophandel [District Court] Gent

Austria 4 March 1997 Oberlandesgericht [Appellate Court] Wien (Vienna)

* Germany 8 January 1997 Oberlandesgericht [Appellate Court] Köln 31B1 [translation available]

Belgium 6 January 1997 Rechtbank van Koophandel [District Court] Kortrijk 31A1
 

* Germany 11 December 1996 Bundesgerichtshof [Federal Supreme Court] 31B [translation available]

Germany 19 April 1996 Landgericht [District Court] Aachen

Germany 3 April 1996 Bundesgerichtshof [Federal Supreme Court] 31D [translation available]

Germany 27 March 1996 Landgericht [District Court] Oldenburg (Clothes case) [translation available]

Germany 8 March 1996 Oberlandesgericht [Appellate Court] Hamburg

Netherlands 5 March 1996 Arrondissementsrechtbank [District Court] Breda
 

Argentina 31 October 1995 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court]

* Netherlands 9 October 1995 Gerechtshof [Appellate Court] 's Hertogenbosch 31A1

Germany 22 September 1995 Oberlandesgericht [Appellate Court] München

Germany 10 May 1995 Landgericht [District Court] Landshut

Germany 27 April 1995 Landgericht [District Court] Schleswig-Holstein

Germany 5 April 1995 Landgericht [District Court] Landshut [translation available]

France 29 March 1995 Cour d'appel [Appellate Court] Grenoble 31A ; 31C1 [translation available]

Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 1720/94] [translation available]
 

* European Court of Justice 29 June 1994 (Custom Made Commercial v. Stawa Metallbau)

Germany 27 April 1994 Landgericht [District Court] Oldenburg

Argentina 18 March 1994 Juzgado Nacional de Primera Instancia en lo Comercial [National Commercial Court of First Instance]
 

* Germany 14 May 1993 Landgericht [District Court] Aachen 31B ; 31C [translation available]
 

Germany 24 November 1992 Landgericht [District Court] Krefeld (Shoes case) [translation available]

* Germany 20 November 1992 Oberlandesgericht [Appellate Court] Karlsruhe (Frozen chicken case) 31A1 [translation available]

* Italy 19 November 1992 Corte Costituzionale [Constitutional Court] 31A1 [translation available]

Germany 13 January 1992 Landgericht [District Court] Baden-Baden
 

Germany 23 February 1990 Oberlandesgericht [Appellate Court] Koblenz 31C1


CASE DIGEST AND ANALYSIS
-   UNCITRAL's case law digest; and
-   An analysis of CISG jurisprudence

The UNCITRAL Digest of case law on the United
Nations Convention on the International Sale of Goods
[*]

A/CN.9/SER.C/DIGEST/CISG/31 [8 June 2004]
Reproduced with the permission of UNCITRAL

[Text of Article 31
Digest of Article 31 case law
-    Meaning and purpose of the provision
-    General remarks
-    Carriage involved (lit. a)
-    Goods at a particular place (lit. b)
-    Other cases (lit. c)
-    Contractual modifications of the conventional place of performance
-    Consequences
-    Burden of proof]
ARTICLE 31

If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists:

     (a) if the contract of sale involves carriage of the goods — in handing the goods over to the first carrier for transmission to the buyer;
     (b) if, in cases not within the preceding subparagraph, the contract relates to specific goods, or unidentified goods to be drawn from a specific stock or to be manufactured or produced, and at the time of the conclusion of the contract the parties knew that the goods were at, or were to be manufactured or produced at, a particular place — in placing the goods at the buyer's disposal at that place;
     (c) in other cases — in placing the goods at the buyer's disposal at the place where the seller had his place of business at the time of the conclusion of the contract.                     

DIGEST OF ARTICLE 31 CASE LAW

Meaning and Purpose of the Provision

1. The article specifies the place of performance of the seller’s duty of delivery. The provision fixes where the seller has to deliver the goods and what the seller has to do for that purpose. Article 31 addresses three different cases for which different rules apply. The general rules, however, appears to be that the seller’s place of business is preferred as the regular place of performance.[1]

General Remarks

2. Under some procedural rules, such as the ones based upon article 5(1) of the 1968 Brussels and 1988 Lugano Conventions,[2] article 31 can be the basis for jurisdiction.[3] Such jurisdiction also extends to claims concerning the breach of the duty to deliver, as well as claims relating to the delivery of non-conforming goods.[4]

3. The rules formulated in article 31 apply only when the parties have not agreed otherwise, as party autonomy prevails over article 31.[5] Many of the court decisions concerning article 31 therefore deal with the construction of contract terms in order to decide whether those terms fix a place of performance or merely allocate the costs of transportation. If one of the Incoterms is included in the contract this term defines the place of performance and excludes the Convention’s rule.[6]

4. Article 31 has also been used to determine the place of performance where the buyer has to return the goods after the contract has been avoided (art. 81(2)).[7] Therefore in case of doubt and if not otherwise foreseen in the contract the buyer has to deliver back the goods at his place of business.[8]

Carriage involved (lit. a)

5. The first alternative of article 31 presupposes that a carriage of the goods be involved. For distant sales it has been held that article 31(a) ordinarily applies.[9] A carriage of the goods is generally involved if the parties have envisaged (or if it is clear from the circumstances [10]) that the goods be transported by independent carrier(s) from the seller to the buyer. Therefore, shipment contracts (e.g., under the Incoterms FOB, CIF or other F- or C-terms) as well as destination contracts (e.g. Incoterm EXW) involve a carriage of the goods.[11]

6. The provision by implication further requires that it is neither the seller’s nor the buyer’s own obligation under the contract to bring the goods from the place of the seller (or from where they are) to the place of the buyer (or wherever specified by the buyer).[12] It does not imply that the seller itself must deliver the goods to the place of destination of the transport. On the contrary, the seller has duly performed its duty of delivery when the goods are handed over to the carrier.[13] If several subsequent carriers are involved handing over to the first carrier constitutes delivery.[14]

7. Handing over means that the goods are taken in possession by the carrier.[15] The handing over of the documents relating to the goods does not appear to substitute the handing over of the goods themselves and could not constitute their delivery unless otherwise agreed upon by the parties.[16]

Goods at a particular place (lit. b)

8. The second alternative of article 31 requires first that no carriage of the goods in the sense of article 31(a) is involved so that it is the buyer’s task to get possession of the goods. Secondly, specific goods or goods of a specific stock or goods to be manufactured or produced are required. The third requirement is that both parties knew when the contract was concluded that the goods were (or were to be manufactured or produced) at a particular place. If those conditions are met the seller has to place the goods at the buyer’s disposal at that place.[17]

9. To place the goods at the buyer’s disposal means that “the seller has done that which is necessary for the buyer to be able to take possession.”[18] The seller has therefore to prepare everything necessary under the circumstances so that the buyer has nothing else to do other than to take the goods at the place of delivery.[19]

Other cases (lit. c)

10. Article 31(c) is a “residuary rule”.[20] The provision covers those cases which do not fall under para. (a) or (b) and for which the contract does not provide a particular place of performance. In that situation the seller has to place the goods at its place of business at the buyer’s disposal.

Contractual modifications of the conventional place of performance

11. Many decisions relate to the construction of contract clauses which may or may not modify the place of performance as provided in article 31. The courts generally look at all the circumstances of the case. The meaning of certain formulations can therefore vary with the circumstances. In respect of the Incoterm EXW (“ex works”) it has been stated that it does not vary the place of performance under article 31(a) or (c).[21] As far as the Incoterm DDP (“delivered, duty paid”) it has been decided that the place of delivery is at the buyer’s place of business.[22] However, the parties can agree upon a different place of delivery at any time. If the buyer requests that the goods be delivered to another firm processing the goods for the buyer, the place of business of that other firm is then the place to which the goods have to be delivered.[23] The clause “free delivery (buyer’s place of business)” has been interpreted in different ways. Two courts considered that clause to be a mere allocation of costs which left the place of performance unchanged.[24] Other courts stated the contrary.[25] The contract clause “pricing ex work Rimini/Italy” as such has been held not to change the place of performance under article 31 in a case where an Italian seller had to deliver a plant to manufacture windows to a German buyer.[26] But the additional contract provision that the seller had to erect and to run the plant for a certain period at the buyer’s place of business led to the conclusion that that was the location of the place of delivery.[27] If the seller is obliged to install the delivered goods at a particular place or to erect at a particular place the plant that it sold, that place has been regarded as the place of delivery.[28]

Consequences

12. When the seller has delivered the goods it has fulfilled its duty of delivery and is no longer responsible for the goods. Courts regularly conclude the risk of subsequent damage to, or loss of, the goods passes onto the buyer, unless such damage or loss is intentionally or negligently caused by the seller. Therefore if the seller has handed over the goods to the first carrier any delay in the transmission of the goods is the risk of the buyer who may or may not have a claim against the carrier.[29] Similarly if goods are loaded on board a vessel in the designated port the seller has performed its duty of delivery.[30]

Burden of proof

13. The party asserting that a particular place of performance – other than the place provided for in article 31 – had been agreed upon must prove such agreement.[31]


FOOTNOTES

* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.

[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.]

1. In Italy the constitutionality of the corresponding domestic rule has been attacked but has been rejected – among others based upon article 31(a) CISG: CLOUT case No. 91 [ITALY Corte Constituzionale [Constitutional Court] 19 November 1992, available online at <http://cisgw3.law.pace.edu/cases/921119i3.html>].

2. Under that article jurisdiction is founded at the place at which the obligation has been actually performed or had to be performed. The place where the obligation had to be performed has to be determined according to the applicable law or – where uniform law applies – by the latter, see CLOUT case No. 298 [EUROPEAN COURT OF JUSTICE Custom Made Commercial v. Stawa Metallbau case No. C-288/92 of 29 June 1994, available online at <http://cisgw3.law.pace.edu/cases/940629eu.html>].

3. E.g., CLOUT case No. 268 [GERMANY Bundesgerichtshof [Supreme Court] 11 December 1996, available online at <http://cisgw3.law.pace.edu/cases/961211g1.html>]; [NETHERLANDS Hoge Raad [Supreme Court] 26 September 1997, available online at <http://cisgw3.law.pace.edu/cases/970926n1.html>]; CLOUT case No. 207 [FRANCE Cour de Cassation [Supreme Court] 2 December 1997, available online at <http://cisgw3.law.pace.edu/cases/971202f1.html>]; CLOUT case No. 242 [FRANCE Cour de Cassation [Supreme Court] 16 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980716f1.html>]; [AUSTRIA Oberster Gerichtshof [Supreme Court] 10 September 1998, available online at <http://cisgw3.law.pace.edu/cases/980910a3.html>].

4. CLOUT case No. 268 [GERMANY Bundesgerichtshof [Supreme Court] 11 December 1996, available online at <http://cisgw3.law.pace.edu/cases/961211g1.html>] (see full text of the decision); [NETHERLANDS Gerechtshof [Appellate Court] 's-Hertogenbosch 9 October 1995, available online at <http://cisgw3.law.pace.edu/cases/951009n1.html>]; CLOUT case No. 244 [FRANCE Cour d'appel [Appellate Court] Paris 4 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980304f1.html>]; CLOUT case No. 245 [FRANCE Cour d'appel [Appellate Court] Paris 18 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980318f1.html>].

5. [GERMANY Oberlandesgericht [Appellate Court] München 3 December 1999, available online at <http://cisgw3.law.pace.edu/cases/991203g1.html>].

6. CLOUT case No. 244 [FRANCE Cour d'appel [Appellate Court] Paris 4 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980304f1.html>] (see full text of the decision); CLOUT case No. 245 [FRANCE Cour d'appel [Appellate Court] Paris 18 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980318f1.html>].

7. [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

8. Id.

9. Compare CLOUT case No. 360 [GERMANY Amtsgericht [Lower Court] Duisburg 13 April 2000, available online at <http://cisgw3.law.pace.edu/cases/000413g1.html>].

10. [NETHERLANDS Hoge Raad [Supreme Court] 26 September 1997, available online at <http://cisgw3.law.pace.edu/cases/970926n1.html>].

11. See the Secretariat Commentary to (then) article 29; Commentary on the draft Convention on Contracts for the International Sale of Goods, A/CONF.97/5, reproduced in United Nations Conference on Contracts for the International Sale of Goods: Official Records, at p. 29, paras. 5.

12. See also the Secretariat Commentary to (then) article 29, at p. 29, paras. 5 and 8.

13. CLOUT case No. 331 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 10 February 1999, available online at <http://cisgw3.law.pace.edu/cases/990210s1.html>].

14. Id.

15. CLOUT case No. 247 [SPAIN Audiencia Provincial [Appellate Court] Cordoba 31 October 1997, available online at <http://cisgw3.law.pace.edu/cases/971031s4.html>] (loading on board).

16. Secretariat Commentary to (then) article 29, at p. 29, para.  9.

17. See, e.g., CLOUT case No. 47 [GERMANY Landgericht [District Court] Aachen 14 May 1993, available online at <http://cisgw3.law.pace.edu/cases/930514g1.html>] (place of manufacture of ear devices corresponds to the place of delivery under article 31 (b)).

18. Secretariat Commentary to (then) article 29, at p. 30, para. 16.

19. CLOUT case no. 338 [GERMANY Oberlandesgericht [Appellate Court] Hamm 23 June 1998, available online at <http://cisgw3.law.pace.edu/cases/980623g1.html>].

20. Secretariat Commentary to (then) article 29, at p. 30, para. 15.

21. CLOUT case No. 244 [FRANCE Cour d'appel [Appellate Court] Paris 4 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980304f1.html>] (see full text of the decision); CLOUT case No. 245 [FRANCE Cour d'appel [Appellate Court] Paris 18 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980318f1.html>]. With the same result for a German clause "ex work", see CLOUT case No. 311 [GERMANY Oberlandesgericht [Appellate Court] Köln 8 January 1997, available online at <http://cisgw3.law.pace.edu/cases/970108g1.html>] and [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

22. CLOUT case No. 340 [GERMANY Oberlandesgericht [Appellate Court] Oldenburg 22 September 1998, available online at <http://cisgw3.law.pace.edu/cases/980922g1.html>].

23. Id.

24. CLOUT case No. 268 [GERMANY Bundesgerichtshof [Supreme Court] 11 December 1996, available online at <http://cisgw3.law.pace.edu/cases/961211g1.html>]; [AUSTRIA Oberster Gerichtshof [Supreme Court] 10 September 1998, available online at <http://cisgw3.law.pace.edu/cases/980910a3.html>].

25. CLOUT case No. 317 [GERMANY Oberlandesgericht [Appellate Court] Karlsruhe 20 November 1992, available online at <http://cisgw3.law.pace.edu/cases/921120g1.html>]; [GERMANY Oberlandesgericht [Appellate Court] Köln 8 January 1997, available online at <http://cisgw3.law.pace.edu/cases/970108g1.html>].

26. [GERMANY Oberlandesgericht [Appellate Court] München 3 December 1999, available online at <http://cisgw3.law.pace.edu/cases/991203g1.html>].

27. Id.

28. [ITALY Corte di Cassazione [Supreme Court] 19 June 2000, available online at <http://cisgw3.law.pace.edu/cases/000619i3.html>].

29. CLOUT case No. 331 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 10 February 1999, available online at <http://cisgw3.law.pace.edu/cases/990210s1.html>]; similarly CLOUT case No. 377 [GERMANY Landgericht [District Court] Flensburg 24 March 1999, available online at <http://cisgw3.law.pace.edu/cases/990324g2.html>].

30. CLOUT case No. 247 [SPAIN Audiencia Provincial [Appellate Court] Cordoba 31 October 1997, available online at <http://cisgw3.law.pace.edu/cases/971031s4.html>].

31. CLOUT case No. 360 [GERMANY Amtsgericht [Lower Court] Duisburg 13 April 2000, available online at <http://cisgw3.law.pace.edu/cases/000413g1.html>].


ANALYSIS OF CISG CASE LAW

Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*]

excerpt from

The Interpretive Turn in International Sales Law:
An Analysis of Fifteen Years of CISG Jurisprudence

Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene,
Virginia Maurer and Marisa Pagnattaro

[...]

1. Place of Delivery: Article 31

The place where the seller is obligated to deliver the goods matters in a variety of contexts. The language of Article 31 makes clear that a contract that requires delivery to a third-party carrier is effective when the goods are handed over to the first carrier, and not when they cross the border into international commerce, nor when they arrive or are handed over to the buyer.[533] This applies, however, only where the parties have not agreed otherwise. Typically, they do agree otherwise. [534]

Most national courts interpret the place of delivery under Article 31 as the place of performance of delivery for purposes of determining jurisdiction where the CISG governs the place of delivery. [535] In a 1998 case, the French Court of Appeals in Paris [536] addressed a situation in which the buyer, a French company, ordered winter clothing from a German seller. The goods were subject to a contract specifying the INCOTERM "ex works," which the French court determined to be the defendant's principal place of business in Germany. It declined jurisdiction in favor of the courts of Germany.[537] Where the parties have not specified a place for delivery, French courts have, consistent with Article 31(a), identified the place of delivery to be the place where the goods were handed over to the first carrier for transmission to the buyer.[538] In these cases, the French courts [page 387] have observed that the place of performance of the obligation to deliver goods and the place of performance of the obligation to deliver conforming goods must be the same. [539]

In a pair of 1998 cases, the Austrian Supreme Court ruled that the identification of the place of delivery under Article 31 was not conclusive under the Lugano Convention on Jurisdiction and the Enforcement of Judgment in Civil and Commercial Matters.[540] In the first case, the parties identified delivery terms as "free construction site Vienna" and in the second as "free domicile Klagenfurt." The German sellers in both cases claimed that the place of performance of the delivery obligation were the respective towns in Austria, and that they could, therefore, bring suit in Austria. The court rejected this claim, and refused jurisdiction, arguing that "according to Article 31 CISG, terms like the ones used in the contract in question were insufficient to constitute a place of performance and entail jurisdiction of the courts in the Austrian cites mentioned therein."[541] In the absence of clear delivery terms, Article 31(a) would identify the place of delivery in Germany, where the goods were handed over to the first carrier. These cases are inconsistent with the French decisions on analogous facts. However, they may be distinguishable because of the lack of clarity in identifying the seller's obligation of delivery in the contracts under review by the Austrian courts.

In a 1996 German Supreme Court case,[542] the German seller delivered almond paste to a French buyer. The buyer brought an action for damages in a French court, while the seller brought an action in a German court seeking a declaration of non-obligation to pay damages. The German appellate court examined the various pieces of communication between the parties, in particular communiqués in which the price was quoted "duty unpaid, untaxed, delivery being free to the door of the place of the buyer's business." The appellate court held that the parties did not intend this language to alter the place of performance but rather to relate to transportation costs and the allocation of risk. Thus, the court upheld [page 388] jurisdiction of the German courts. The court interpreted the term "delivery being free to the door of the place of the buyer's business" under Article 31 as being the handing over to the first carrier or at seller's place of business.[543]

Determination of the place of delivery under Article 31 is relevant to the buyer's obligation to pay and to the passing of the risk of loss under CISG Articles 67-69. In a German case,[544] the sellers were located in Austria and customarily placed manufactured furniture in a warehouse in Hungary and then sent invoices to the buyer. According to a series of contracts governing various partial deliveries of furniture, the buyer was to take possession of the goods at the manufacturing works and load the furniture into railway wagons or trucks. The buyer would pay the sellers based on the delivery invoices after taking delivery of the furniture. However, no delivery was taken; the manufacturer went bankrupt, the warehouse closed, and the furniture disappeared. Seller sued for the purchase price, which was denied on the ground that delivery had not occurred under Article 31(b). The delivery was due at buyer's demand, which had not been made, and the sellers had failed to place the furniture at the buyer's disposal. Thus, the buyer's obligation to pay did not arise and the risk of loss of the goods did not pass to the buyer.[545] [page 389]

[...]


FOOTNOTES

* For a subsequent text on this subject by these authors, see Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer & Marisa Pagnattaro, "International Sales Law: A Critical Analysis of CISG Jurisprudence", Cambridge University Press (2005) 241 p.

[...]

533. See generally Dubrovnik Lectures, supra note 512, at 1132-33.

534. Where, for example, the parties agreed to delivery frei Haus, delivery occurs where the goods are handed over to the buyer at the buyer's place of business. LG Aachen 43 O 136/92, May 14, 1993 (F.R.G.), available at [<http://cisgw3.law.pace.edu/cases/930514g1.html>].

535. Societe Anton Huber GmbH & Co. KG v. SA Polyspace, E 99-14.844, Cour de cassation, Jun. 21, 2001 (Fr.), available at <http://cisgw3.law.pace.edu/cases/010626f1.html> (The European Community Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters [Brussels Convention 1968] identified the place of delivery as the place of performance for purposes of determining jurisdiction.); see Michael Joachim Bonell & Fabio Liguori, The U.N. Convention on the International Sale of Goods: A Critical Analysis of Current International Case Law -- 1997 (Part 1), 2 Uniform L. Rev., 385, 385-95 (1997) (discussing jurisdiction cases based on identifying the place of performance of delivery under art. 31) [available at <http://cisgw3.law.pace.edu/cisg/biblio/libo1.html>].

536. Ste Franco-africaine de distribution textile v. Ste More and More Textilfabrik GmbH, 97/25212 CA Paris, Mar. 18, 1998 (Fr.), available at <http://cisgw3.law.pace.edu/cases/980318f1.html> [English translation by Charles Sant 'Elia].

537. Societe Laborall v. S.A. Matis, 97/24418 CA Paris, Mar. 4, 1998 (Fr.), available at <http://cisgw3.law.pace.edu/cases/980304f1.html> [English translation by Charles Sant 'Elia]. In the same month, this court ruled similarly on a contract where goods sold by an Italian manufacturer to a French buyer subject to a contract specifying delivery "ex works." See Societe TCE Diffusion S.a.r.l. v. Societe Elettrotecnica Ricci, 514 CA d'Orleans, Mar. 29, 2001 (Fr.), available at <http://cisgw3.law.pace.edu/cases/010329f1.html> [English translation by Yvonne P. Salmon] (declining jurisdiction in favor of Milan, Italy, the place of delivery under CISG art. 3).

538. Societe Mode jeune diffusion v. Societe Maglificio il Falco di Tiziana Goti e Fabio Goti et al, 95-20.809 Court of cassation, Dec. 2, 1997 (Fr.), available at <http://cisgw3.law.pace.edu/cases/971202f1.html> [English translation by Charles Sant 'Elia]; CA Paris, 95-018179, Dec. 13, 1995, supra note 260.

539. Where the obligation in question is the obligation to pay, CISG, supra note 4, at art. 57, may be used to identify the place of the obligation to pay, and jurisdiction over disputes based on the obligation to pay may be resolved with reference to Article 57. See, e.g., CA 93/2821 Mar. 29, 1995, supra note 160.

540. OGH 206208/98x, Sept. 10, 1998 (Aus.), available at <http://cisgw3.law.pace.edu/cases/980910a4.html>.

541. Willibald Posch & Thomas Petz, Austrian Cases on the UN Convention for the International Sale of Goods, 6 Vinobona J. Int'l Com. L. & Arb. 1, 14-15 (2002) [available at <http://cisgw3.law.pace.edu/cisg/biblio/posch-petz.html>].

542. BGH VIII ZR 145/95, Dec. 11, 1996 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/961211g1.html>.

543. Another example of confusion in this area is reflected in a German appellate court opinion in which the parties stipulated "ex works on lorry." See OLG Koln 27 U 58/96, [Jan. 8, 1997] (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/970108g1.html> [English translation by Ruth M. Janal, translation edited by Camilla Baasch Andersen] (finding that, notwithstanding the language "ex works on lorry," the parties had agreed that the buyer's place of business in Germany would be the place of performance). In this case, however, it appears that the seller actually delivered the goods to the buyer's principal place of business using its own people rather than a third-party carrier. Id.

544. OLG Hamm 19 U 127/97, Jun. 23, 1998 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/980623g1.html>.

545. Id.

[...]

Go to complete text of Analysis of Fifteen Years of CISG Jurisprudence


ANNOTATED COMPARATIVES
 -  PECL comparative

Place of Performance:
Comparative analysis of Articles 31 and 57. of the CISG
and counterpart provisions in Article 7:101 of the PECL

Chengwei Liu [*]
November 2004

  1. General: place of performance
  2. Place determinable from the contract, usage or established practice
  3. Creditor's place for money obligation
  4. Debtor's place for other obligations

I. General: place of performance

a. The place where a party must perform a contractual obligation is important in a variety of contexts.[1] In the Convention, of particular relevance are Articles 31 and 57, which, respectively, specify the place where goods are to be delivered and the place where payment is to be made. In particular, CISG Art. 31 "covers three cases, numbered (a) to (c), or rather four cases, if we include the introduction to the article. The first case is that the seller is bound to deliver the goods at a particular place (the introduction). The three other cases (a, b and c) presuppose that he is not so bound. Under rule (a), if the contract of sale involves carriage of the goods, delivery consists in handing the goods over to the first carrier for transmission to the buyer. The other two cases […] refer to two different situations in which the contract does not involve carriage of goods. The gist of rules (b) and (c) is that the goods are delivered at the seller's place of business."[2] Under CISG Art. 57(1), "[i]n the absence of agreement, payment must be made at the seller's place of business (Article 57(1)(a)). Where there is an agreement for immediate payment - 'cash against documents' - payment is to be made at the place where the goods or the documents are transferred (Article 57(1)(b)). In a sale involving carriage, if immediate payment has not been agreed upon, the seller's place of business remains the place of payment."[3] Furthermore, CISG Art. 57(2) anticipates the possibility that the seller might change its place of business following the conclusion of the contract, in which case any increase in the expenses incidental to payment caused by the change in the place of business is to be borne by the seller.[4]

b. Resembling to a substantial extent the CISG approach, the counterpart PECL provisions in Art. 7:101 also contemplate that, above all, where the place of performance is fixed in the agreement or determinable from the agreement, such an agreement prevails (introduction of para. (1)). Rules are however needed to cover cases where the contract is silent on the matter and circumstances do not indicate where performance should take place. PECL Art. 7:101(1) provides two solutions. The general rule is that a party is to perform its obligations at its own place of business (Art. 7:101(1)(b)). The second rule is specific to monetary obligations where the converse solution applies, namely that the obligor is to perform its obligations at the obligee's place of business (Art. 7:101(1)(a)). These solutions may not be the most satisfactory in all cases, but they do reflect the need for rules where the parties have not made any other arrangement or where the circumstances do not indicate otherwise.[5] In applying such solutions, on the other hand, if the party at whose place of business performance is to be made has more than one place of business, the place of performance is that which has the closest connection with the contract and its performance having regard to the circumstances known to or contemplated by the parties at the conclusion of the contract.[6] This is a clear rule in PECL Art. 7:101(2). Although no counterpart rule is found under CISG Arts. 31 and 57, a general rule to that effect has already been introduced in CISG Art. 10(a).[7] However, it remains difficult to give an exact definition of the term "place of business". In most cases it is a party's permanent and regular place for the transaction of general business and not a temporary place of sojourn during sales negotiations.[8] In any event, if a party has no place of business, performance is to be7 effected at his habitual residence. This is a "factual" not a "legal" concept. A person has his habitual residence at the place where he actually lives, regardless of whether he has a permit to live in the country, and whether he sometimes goes to another place to stay for some time, provided that he normally returns to the first place.[9] This is the rule contemplated by PECL Art. 7:101(3). Although no counterpart rule is found in the Convention, it again follows from the general rule of CISG Art. 10(b)[10] that the place of business referred to in CISG Arts. 31 and 57. includes a party's habitual residence where that party has no place of business.[11]

c. Hence, in general, there is no difference in substance between the CISG and the PECL as regards the place of performance. In addition, it is to be noted from the outset that many of the court decisions concerning CISG Arts. 31 and 57. have referred to these rules for the determination of the jurisdiction (particularly that under Art. 5(1) of the 1968 Brussels and 1988 Lugano Conventions).[12] Most national courts interpret the place of delivery under Art. 31 as the place of performance of delivery for purposes of determining jurisdiction where the CISG governs the place of delivery.[13] However, it has been appropriately noted [see Austria 10 September 1998 Oberster Gerichtshof [Supreme Court]] that when the parties agreed on a certain place for delivery, they would envisage aspects such as the costs of the carriage of goods, the modalities of delivery, and the bearing of risk. It would be inappropriate to combine these issues with matters of jurisdiction, especially, if the place for delivery is neither the place of business of the seller, nor that of the buyer.[14] In this case, the Supreme Court of Austria has added, however, that it is a matter of interpretation whether a contractual term fixing the place for delivery is, at the same time, intended to determine special jurisdiction under Art. 5 No. 1 of the Lugano Convention.[15] It has been noted, on the other hand, the issue of whether Art. 57. grants jurisdiction to national courts with respect to disputes concerning payment of the purchase price independent of national laws remains unresolved. Regardless of the ultimate resolution of this issue, "parties to sales transactions subject to the CISG are well-advised to utilize choice of forum provisions. Unlike some other provisions, there is broad consensus among national courts with respect to the enforceability of forum selection agreements".[16]

d. In order to supplant the operation of CISG Arts. 31 and 57, however, "the forum selection agreement must comply with stringent requirements established by national courts. The forum selection provision should be express. Past practices between the parties in prior transactions are usually not sufficient to overcome this requirement. In addition, the mention of bank accounts and other commercial relationships in states other than where the delivery of the goods occurs is insufficient to constitute a forum selection agreement in the absence of an express intent by the parties. Finally, usage of the trade in question also fails to constitute a forum selection agreement in most circumstances. Such usages would only serve to select the forum if it was widely known in the trade that certain actions undertaken by the parties to the transaction had the indelible effect of selecting an exclusive forum for the resolution of disputes between the parties".[17]

II. Place determinable from the contract, usage or established practice

e. Very often the place of performance is fixed in the agreement or determinable from the agreement.[18] Neither CISG Arts. 31 and 57. nor PECL Art. 7:101 denies the fact that the place where an obligation is to be performed is often determined by an express term of the contract or is determinable from it. It is obvious, for instance, that an obligation to build must be performed on the construction site, and that an obligation to transport goods must be performed in accordance with the agreed route.[19] In this respect, it is the principle of contract freedom (party autonomy) that underlies both the Convention and the PECL; therefore, where parties have agreed on a particular place of performance, such an agreement prevails over the provisions of either the Convention or the PECL.

f. Many CISG decisions dealing with Art. 31 have refer to the parties' autonomy. For instance, a German Appellate Court [8 January 1997 Oberlandesgericht Köln] held that "the legal consequences of Art. 31 CISG only come into play if the seller is 'not bound to deliver the goods at any other particular place.'"[20] Similarly, another German Appellate Court [3 December 1999 Oberlandesgericht Münichen] held that according to CISG Art. 31 "the contractual agreement prevails";[21] and the Supreme Court of Italy [10 March 2000 Suprema Corte di Cassazione] has held that "the parties' contractual autonomy prevails over that provision [CISG Art. 31]".[22] Of particular frequency and significant relevance, the parties agreement will normally spell out the seller's shipping obligations quite precisely by adopting a recognized trade term such as FOB, CIF, etc.,[23] which are defined in the ICC INCOTERMS. Rather often the parties refer to customary delivery clauses, in particular to INCOTERMS.[24] INCOTERMS, properly invoked, can be very useful to define precisely some of the central steps that the parties should take.[25] It has been noted that if a contract contains an explicit reference to INCOTERMS, no problem arises. The INCOTERMS are so complete that there is likely no need to supplement them with the rules of the Convention. They have been "derogated" by the contract. If a trade term is used but there is no explicit reference to INCOTERMS, and if it is not indicated by any other fact (such as the "previous course of dealing" of the parties) that INCOTERMS or some other set of provisions are to apply, it is, however, more uncertain whether Art. 31 of the Convention has any significance.[26]

g. The position is the same under Art. 57 CISG.[27] Because of the importance of the question at hand, the contract will usually contain specific provisions on the mode and place of payment. Accordingly, the rule in CISG Art. 57 is expressly stated to apply only if "the buyer is not bound to pay the price at any other particular place".[28] This result is also reached through the operation of CISG Art. 6,[29] which can be regarded as an orientation of the parties towards an agreement of the place of payment.[30] However, the express reiteration of the principle (in CISG Art. 57) emphasizes the importance that the contract will usually attach to the place of payment of the price.[31] Enderlein and Maskow state in this respect: "The parties, in general, attach great attention to the terms of payment which include the place of payment. Where an express agreement of the place of payment is lacking, an implicit agreement may be inferred from the way in which the payment is made. This may be done considering non-governmental codifications for specific categories of payment (Uniform Customs and Practices for Documentary Credits -- Article 9 fol; Uniform Rules for Collections -- Articles 11 and 12) which become binding through the agreements between the parties, business conditions of the banks engaged or directly as an established practice."[32] Thus, a German court [24 November 1998 Landgericht [District Court] Bielefeld] held: "According to Art. 57 CISG, which governs the contract between the parties, the place of performance is the [seller]'s place of business -- however, only if the [buyer] is not bound to pay the purchase price at any other particular place. The place of performance is primarily to be determined by the agreement between the parties (Art. 6 CISG), respectively by any usage to which they have agreed to and any practices, which they have established between themselves (emphasis added)."[33]

h. Indeed, it is also the case for CISG Art. 31 (and PECL Art. 7:101(1), too) that the place of performance may be determined according to the applicable usage and practice established between them. Generally speaking, from either CISG Art. 9 or its counterpart PECL Art. 1:105, it follows: "Usages and practices may fix a different place of performance, [...]. It is probably a universal usage that a customer of a bank who wishes to draw his money will have to come to the bank. However, if the bank agrees to send the money to a customer the money will travel at the bank's risk."[34] On the other hand, the ruling is also of significance in [Italy 7 August 1998 Corte di Cassazione], where the Italian Supreme Court ruled that the derogation contemplate under CISG Art. 57(1), "cannot consist of a mere practice; the practice may simply be the consequence of a mere tolerance by the seller and, as such, incapable of establishing a place of performance different from the legal one".[35] The reason of particular relevance is that, under either CISG Art. 31 or Art. 57, the alleging party is under an obligation to prove its claims agreement on the place of performance, namely to establish the existence of a relevant agreement, usage or practice. That is to say, the party asserting that a particular place of performance - other than the place provided for in Arts. 31 and 57 - had been agreed upon (or established by a usage or practice) must prove such agreement.[36]

i. Thus, regarding the application of CISG Art. 57, the Italian Supreme Court [7 August 1998 Corte di Cassazione] ruled that the wording of CISG Art. 57(1) "clearly indicates that the buyer must be 'bound' to pay at a different place, which is to say, obliged (the word is repeated in the subsequent Article 58 CISG), by virtue of a title that may be legal or contractual"; therefore, "in the absence of undisputed facts capable of justifying a derogation from the legal rule regarding the place of performance, such place ([...]) must be determined on the ground of the general rule set out in Article 57(1) CISG".[37] In a similar line, a German Appellate Court [16 July 2001 Oberlandesgericht Köln] dealing with CISG Art. 31 stated: "The contract between [seller] and [buyer] was concluded orally and does not explicitly determine the place of performance. The parties undisputedly agreed on a delivery 'free farm', but this simply means that the [seller] was to bear the costs of transport. Under Art. 8(1) and (2) CISG, a contractual clause is to be interpreted according to the parties' hypothetical intent or, in case that intent cannot be determined, according to the understanding that a reasonable person of the same kind would have had in the circumstances. As there are insufficient grounds to determine the hypothetical intentions of the parties, the clause 'free farm' needs to be interpreted under objective criteria. Following the prevailing opinion, the similar clause 'free house' does not possess an unambiguous meaning in trade; rather, the clause is to be interpreted following the circumstances of each individual case (citations omitted). However, there are no objective criteria which could decide the place of delivery in the present case. Thus, the Court falls back on the general principles of Art. 31 CISG."[38]

j. Regarding the burden of proof, the ruling of a German court [13 April 2000 Amtsgericht [Lower Court] Duisburg], which deals with the proof under CISG Art. 31 but seems to apply mutatis mutandis to that under CISG Art. 57, provides some guidance: The onus of proof is on "the party who contends that the parties derogated from the Convention by agreeing on a different place of performance". The wording of Art. 31 "does not lead to a shift in the burden of proof"; the stipulation that "if the seller is not bound to deliver the goods at any particular place, his obligation to deliver consists" in the acts referred to in paras. (a)-(c) is "simply a clarification". This interpretation "finds its first footing in the wording of the provision itself. The use of the word 'particular' shows that the [contending buyer] bears the onus of submission and proof that a place for the handing over of the goods was agreed on." This is "further supported by the structure of Art. 31 CISG. The paragraphs (a) and (b) provide the rules for special instances, followed by the general rule in paragraph (c). It would be inconsistent with this structure to apply paragraph (c) only if the [challenged] seller proves that a particular place of performance has not been defined." Finally the interpretation "corresponds to the systematic position of Art. 31 CISG and its corresponding purpose. The provision applies to cases in which the parties failed to form a contractual agreement (citation omitted). Keeping this in mind, it would be unreasonable if the provision at the same time put the burden of proof on the seller. If that was the case, Art. 31 CISG would deviate from the general rule that each party bears the onus of proof for the provisions which are favorable to him and which he therefore relies upon (emphasis added). In the case of an agreement stipulating the [buyer's] place of business as the place of performance, the favored party is the buyer. Were Art. 31 CISG to be interpreted as putting the burden of proof on the seller, the provision would effectively restrict its own sphere of application. That is not the purpose of Art. 31 CISG."[39]

k. In any event, if "there is no basis for letting the [performing party] bear the risk of any disagreement between the parties",[40] namely where the contending party has not proved that it derogated from Arts. 31 and 57 CISG by agreeing with the other party on a particular place and where it neither submits, nor is it evident that a trade usage or business practice in the meaning of Art. 9 CISG existed between the parties to that effect, the general rule set out in CISG Arts. 31 and 57 applies. Indeed, the Convention gives general but useful answers to questions that the parties have not answered by contract provisions, by invoking relevant usages or by incorporating established practice or trade terms such as the ICC INCOTERMS. In addition, the Convention provides a way to avoid or resolve disputes in a wide range of situations, not mentioned in, e.g., INCOTERMS, when a party fails to perform his duties under the contract.[41]

III. Creditor's place for money obligations

l. In many systems the place of performance for money obligations, if it has not been agreed expressly, is the creditor's residence or place of business.[42] It is held that in commercial transactions "the general rule would seem to be that payment is to be made at the place where the creditor resided or carried on business at the time of the contract."[43] This is also the approach adopted under both CISG Art. 57 and PECL Art. 7:101(1)(a), which each confirms that: "If the place of performance is not fixed or determinable from the contract the place of performance of a money obligation is the creditor's place of business. 'The debtor must seek the creditor'. This rule will leave the debtor with a free choice of how it will send or transfer the money to the creditor, which, when the debtor carries the risk of transmission, will have no right to interfere with the mode of transportation or transfer used."[44]

m. It is stated that the determination of the place of payment, as it is made in CISG Art. 57(1), "entails generally four essential consequences for the buyer: First, he must initiate the payment so early that it arrives on the settlement date (Article 58) at the place of payment. He thus bears the risk of a delay insofar as he is not exempted from liability under Articles 79 and 80. Second, he must take all measures and go through all the formalities at a commercial level and vis-à-vis the authorities so that the payment can be made at the place of payment, i.e. exceptionally also the fulfillment of formalities in the seller's country (Article 54). Third, he must bear the cost of the payment procedure up to this place. Fourth, he also bears the risks up to this place, i.e. when the initiated payment procedure is not successful because of the bankruptcy of a bank engaged it has to be repeated."[45] It is thus "a question of considerable importance in international trade because of the widespread existence of exchange controls and other restrictions on the transfer of funds".[46] As it is stated in the Secretariat Commentary: "It is important that the place of payment be clearly established when the contract is for the international sale of goods. The existence of exchange controls may make it particularly desirable for the buyer to pay the price in his country whereas it may be of equal interest to the seller to be paid in his own country or in a third country where he can freely use the proceeds of the sale."[47] Thus, the principle on which the CISG is based, "characterizes the obligation of payment as an obligation to be performed at the creditor's place of business in order to ensure that the seller can indeed dispose of the proceeds of the transaction without having to confront the foreign exchange rules of other countries".[48]

n. Furthermore, CISG Art. 57(1)(b) (no counterpart rule is found under PECL Art. 7:101) specifically deals with the place of payment when payment is to be made against the handing over of the goods or of documents. It "provides that payment must be made at the place where the handing over takes place. This rule will be applied most often in the case of a contract stipulation for payment against documents. The documents may be handed over directly to the buyer, but they are often handed over to a bank which represents the buyer in the transaction. The 'handing over' may take place in either the buyer's or the seller's country or even in a third country."[49] The Austrian Supreme Court [10 November 1994 Oberster Gerichtshof] has held that CISG Art. 57(1)(b) "ties up to the principle of mutual simultaneous performance laid down in Article 58 CISG (emphasis added); it is only reasonably applied where intermediaries (e.g., a warehouse-keeper or carrier) are used and payment is to be made to these intermediaries. Otherwise payment must be made to the seller. In this case, after delivery of the goods, the buyer has to pay the purchase price at the seller's place of business (citation omitted)."[50] Thus, the German Supreme Court in [4 December 1996 Bundesgerichtshof] has ruled that "the regulation of CISG Art. 57(1)(b), according to which, under certain circumstances, the payment must take place at the location of the handover of the goods, does not apply because the conditions of payment agreed upon [...] do not contain a reciprocal and simultaneous [performance] provision in the sense of the mentioned rule (emphasis added)."[51] According to Enderlein and Maskow, if the payment is bound only to the handing over of the goods, the place of payment under the CISG is the place where the goods are handed over to the first carrier, the place where the goods are made available or the place of business of the seller (Art. 31);[52] where payment is to be made against the handing over ... of documents, the documents mentioned here are obviously the same as under Art. 58, i.e. the documents which entitle to dispose of the goods.[53] Payment is to be made only against the handing over of the documents if the seller has determined it pursuant to Art. 58 or if the terms of payment "cash against documents" or "payment according to letter of credit" have been agreed. Where the documents are to be handed over is made dependent in the Convention on the agreement between the parties (Art. 34). But regularly established practices and/or rules referred to by the parties in one form or another intervene here.[54]

o. CISG Art. 57(1) has attracted a vast amount of comment in case law.[55] For instance, the Italian Supreme Court [7 August 1998 Corte di Cassazione] has held: "The meaning of this provision [CISG Art. 57(1)] is clear enough: it sets out a general rule whereby the buyer has to pay the seller at the place of business of the latter; the buyer, however, may be obliged to pay the price 'at any other particular place', but the existence of such an obligation must obviously descend from a certain source; if, finally, payment is to be made against the handing over of the goods or the documents, the place of payment coincides with the place where the handing over takes place."[56] This Article provides, according to the Italian Supreme Court [14 December 1999 Corte di Cassazione], "a general rule, which does not approve the payment in any place other than seller's place of business, unless defined otherwise by the parties, law or convention regulation".[57] That is to say, as a Belgian Appellate Court [15 May 2002 Hof van Beroep Gent] explained: "According to article 57(1) CISG, without any contrary stipulation the payment of the price - which undoubtedly is the principal obligation of the buyer - has to be made at the place of business of the seller."[58]

p. Regarding the respective application of the variants indicated in CISG Art. 57(1), a German court [19 January 2001 Landgericht [District Court] Flensburg] has held: "According to Art. 57(1)(a) CISG, the obligation to pay the purchase price under a sales contract is generally an obligation to be performed at the creditor , i.e., the [seller] , place of business, provided that (i) a seller performed in advance his delivery duties under the relevant sales contract; and (ii) the obligations of the parties are not to be performed concurrently pursuant to Art. 57(1)(b) CISG."[59] And the Austrian Supreme Court [22 October 2001 Oberster Gerichtshof] has held: "Failing an agreement to the contrary, the interpretative rule of Art. 57(1)(a) CISG determines that the [buyer] was bound to pay the price at the [seller's] place of business in Hungary (the [seller's] place of business needs to be established under Art. 10 CISG). The purchase price is a debt payable at the creditor's place of business (annotation omitted). That the prerequisites of Art. 57(1)(b) are met (place where the handing over of the goods takes place), was neither submitted nor has it been established."[60] It is similarly analyzed by a German court [20 September 2002 Landgericht [District Court] Göttingen] that: "According to Art. 57(1)(a) CISG, the buyer is obliged to pay the purchase price at the seller's place of business, unless the parties provided otherwise. The parties have not provided for a specific provision on the place of performing [buyer]'s payment obligation under their sales contract. Further, payment of the purchase price was not to be effected concurrently with provision of the goods (Art. 57(1)(b) CISG)."[61] A German Court of Appeal [10 December 2003 Oberlandesgericht Karlsruhe] has also held that according to CISG Art. 57(1)(a), "the buyer has to pay the purchase price at the seller's place of business if - as is the case here - nothing else has been agreed and the payment is also not to be made against the handing over of the goods or of documents."[62]

q. Moreover, Enderlein and Maskow note: "The rule only mentions the 'price', but is to be applied, as we believe, also to other payments under the contract, like the payment of damages, liquidated damages, interests and reimbursement of expenses. Since there is not regularly a direct dependence between performance and counter-performance, and in particular no contemporaneous performance, this refers above all to subpara. (a) with the 'seller' having to be read as the 'obligee' and the 'buyer' as 'obligor'."[63] Thus, the decision of a German court [17 December 2002 Landgericht [District Court] Giessen] "joins the opinion commonly adapted nowadays that for place of performance of an obligation to repay the purchase price (emphasis added), an obligation not specifically regulated in the CISG, one may look to Art. 57(1)(a) CISG by way of analogy."[64] A German Appellate Court [10 December 2003 Oberlandesgericht Karlsruhe] ruled: "Even if the freight costs (emphasis added) are shown separately, they form a part of the purchase price in the sense of the CISG (Art. 31 CISG; annotation omitted), which thus, also pursuant to Art. 57(1)(a) CISG, has to be paid at the [buyer]'s place of business."[65] Another German Appellate Court [2 July 1993 Oberlandesgericht Düsseldorf] has held that the basic solution with regard to the sales price in CISG Art. 57(1)(a) is used as "a gap filler under Art. 7(2) of the CISG"[66] in determining the place of performance for the obligation to pay damages; where the court stated: "The place of performance for the indemnification claim pursuant to Arts. 45, 74 of the CISG, however, is not set forth by the CISG. It is determined from the Convention's general principles which are derived from Art. 7(2) of the CISG. Art. 57(1)(a) of the CISG provides [...] that the duty to tender payment of the purchase is an obligation to be performed at the seller's place of business. Accordingly, the place of performance is where the seller maintains its principle place of business (citation omitted). Therefore, if the place where payment is to be tendered [...] is the seller's place of business, it then seems to be appropriate to recognize this as a general rule governing the place of performance for all claims for payment under the CISG. The reasoning behind a rule governing the place of performance for claims for the purchase price are just as applicable to other claims for payment (emphasis added). The claim that seller should be required to take over buyer's liability to buyer's sub-purchaser pursuant to Arts. 45, 74 is keyed to payment of money (citation omitted). Consequently, performance is to be tendered at the seller's principal place of business."[67]

r. The case law on the question at issue [68] also indicates, albeit not uniformly, that the rule established by CISG Art. 57(1) (referring above all to subpara. (a)), establishing payment of the price at the seller's place of business as a general principle, can be applied also to other monetary obligations emerging from the contract of sale, such as compensation due from a party who has been in breach of contract, or return of the sale price by the seller following avoidance of the contract. A German Appellate Court [28 October 1999 Oberlandesgericht Braunschweig] has generally held: "Under Art. 57(1) CISG, the place of performance for the [buyer's] obligation to pay the purchase price is the seller's place of business. The secondary obligations under Art. 61 CISG - including the above-mentioned claim for damages - follow the primary obligation of payment of the purchase price. Consequently, the place of performance for a remedy [of monetary nature] for breach of contract is also determined by Art. 57(1)(a) CISG" (citation omitted).[69]

s. In addition, it is to be noted that payment is usually made only after the seller has received an invoice. The relevant provision in CISG Art. 57(1) only speaks of the situation where the buyer is bound to pay at a particular place. This would seem to have a bearing on a clause in the seller's invoice stating that payment is to be made to the seller's account in a certain bank. The invoice may indicate which place of business the seller considers to be relevant, and such a statement may be interpreted as acceptance of payment being made at that place. On the other hand, the buyer is not bound by such an indication. It may well be that the seller, for his own convenience, wishes payment to be made at a particular place. If such a clause is not based on the contract it may be interpreted as a statement by the seller that he will accept payment to have been adequately made if made in time to that account. It is clear that the seller cannot unilaterally impose on the buyer an obligation to make payment in such a manner. Article 57 of the Convention is thus applicable irrespective of such a clause in the invoice.[70]

t. The above comments and decisions focusing on CISG Art. 57(1) to a large part apply mutatis mutandis to the consequences under PECL Art. 7:101(1)(a). A slight difference (except for the absence of a rule similar to CISG Art. 57(1)(b)) is found, however, that the place referred to in PECL Art. 7:101(1)(a) is expressly limited to "at the time of the conclusion of the contract"; whereas under the Convention, this reference must be deduced from the text of Art. 57(2), the idea underlying which is to be deduced vice versa from the PECL wording "at the time of the conclusion of the contract". If one accepts the soundness of the proposition that the debtor must "follow" the creditor's place of business, "then it seems reasonable to allow the [debtor] to claim reimbursement for any additional expenses incurred by him because of a change in the [creditor]'s place of business".[71] This is made clear in CISG Art. 57(2).[72] In providing that the seller must bear any increase in the expenses incidental to payment which is caused by a change in its place of business subsequent to the conclusion of the contract, Art. 57(2) seems to impose on the buyer the obligation to pay the price at the seller's new address (cf. infra. para. u). This being so, it is necessary that the seller should have informed the buyer of the change in a timely manner. Under Art. 80 of the Convention the seller has no right to rely on any delay in payment of the price caused by late notification of the change of address.[73]

u. Although no counterpart is found under the PECL expressly resembling CISG Art. 57(2), it is submitted that a similar result may be reached with the emphasis on the wording in PECL Art. 7:101(1)(a) of "at the time of the conclusion of the contract", particularly on the basis of the PECL Comment, where it is clearly stated that: "The place of performance is the party's place of business (or his habitual residence) at the time of the conclusion of the contract. If after that time the party moves to another place, the first place remains the place of performance. However, if the party chooses to move the place of performance to its new place, good faith requires that it should be permitted to do so unless it will cause an unreasonable inconvenience for the other party or where the party which moves does not notify the other party in due time, see Article 1:201. If as a result of a change of the place of performance, there is any increase in the expense of performance, this increase must be borne by the party which has changed the place of performance. If as a result of the change of the place of performance, the risk of transportation is perceptibly increased, the party whose change of place of performance increases the risk of transportation will have to carry that risk."[74] Indeed, it has been codified in Art. 6.1.6(2) of the UNIDROIT Principles, which establishes a general rule that each party must bear any increase of expenses occasioned by a change in its place of business.[75]

IV. Debtor's place for other obligations

v. It seems to be generally accepted that for obligations other than money obligations the place of performance is, unless otherwise agreed, the debtor's residence or place of business.[76] This is clearly stipulated in PECL Art. 7:101(1)(b), and also explained in the Official Comment on that provision: "As far as obligations other than money obligations are concerned the place of performance is the debtor's place of business. This is in conformity with the general principle that in cases of doubt the debtor is implied to have undertaken the least burdensome obligation."[77]

w. Under the Convention, Art. 31, which states the obligation to deliver "in a dispositive rule"[78] due to its being preconditioned by parties' particular agreement, specifies the place of performance of the seller's duty of delivery. The provision fixes where the seller has to deliver the goods and what the seller has to do for that purpose. Art. 31 addresses three different cases for which different rules apply. The general rules, however, appears to be that the seller's place of business is preferred as the regular place of performance.[79] This is supported by the ruling of a German Appellate Court [16 July 2001 Oberlandesgericht Köln], which held that "Art. 31(b) and (c) regulate the buyer's duty to collect the goods, whereas Art. 31(a) specifies the seller's obligation to deliver, if the contract involves the carriage of the goods, as complied with when handing the goods over to the first carrier for transmission. Thus, the provisions of the CISG set the general principle that the place of performance for the obligation to deliver is the seller's place of business (citations omitted)."[80] Unlike the general distinction between money obligations and other obligations, however, "Art. 31 CISG, which deals with the content of the seller's delivery obligation, distinguishes between contracts that involve the carriage of goods and such contracts where carriage is not necessary (emphasis added). Art. 31 CISG does not include a situation where the seller himself has to deliver the goods to one of the buyer's places of business. Such a form of delivery of the goods owed is not provided for in Art. 31. In doubtful cases, such an obligation cannot be assumed: If the contract requires carriage of the goods at all, it is an obligation to dispatch the goods; in other cases the goods are to be placed at the buyer's disposal at the seller's place of business (citation omitted)."[81]

x. Among the three paragraphs of CISG Art. 31, para. (a) refers to the contract of sales involving carriage. According to Enderlein and Maskow, this happens regularly in the international sale of goods, unless the goods are already in the possession of the buyer (e.g., in the event of a sale of an object that had originally been leased or goods that were available for inspection) or the buyer himself collects the goods from the seller (e.g., in the event of the clause Ex Works). International sales contracts usually involve several carriers. A carrier is the collective term used for the different means of transportation (see, for instance, multimodal carrier). Here carriage is always transport by one or several independent carriers. Insofar as the parties have their own vehicles and therewith transport the goods, this does not fall under carriage. The goods may, however, also be handed over to a carrier which was hired by the buyer, if the clause FOB was agreed, in which case the buyer will have to provide a means of transportation. To what extent a forwarding agent can be considered as the carrier depends on whether he himself undertakes to transport the goods.[82] In any event, if the seller has not undertaken to perform any part of the transportation, his duties should not depend on where it is possible to find an independent carrier.[83] The principal function of Art. 31(a) is to provide a rule for the cases in which it is clear that the seller has a duty of transportation but no further indication of the extent of his duties can be found. The rule that handing over the goods to the first carrier, rather than shipping the goods in a ship, constitutes delivery makes the Convention rule coincide with the trade terms already defined in the ICC INCOTERMS.[84]

y. In cases not within para. (a) of Art. 31, which "means that there is neither an arrangement under the contract as to the place of delivery nor is carriage an obligation of the seller",[85] Art. 31(b) applies, which covers future goods - goods to be manufactured or produced at a particular place - and goods to be drawn from a specific stock as well as specific goods.[86] The second alternative of Art. 31 requires, first, that no carriage of the goods in the sense of Art. 31(a) is involved so that it is the buyer's task to get possession of the goods. Secondly, specific goods or goods of a specific stock or goods to be manufactured or produced are required. The third requirement is that both parties knew when the contract was concluded that the goods were (or were to be manufactured or produced) at a particular place. If those conditions are met, the seller has to place the goods at the buyer's disposal at that place.[87] In other cases, not covered by subparagraphs (a) and (b) of Art. 31,[88] Art. 31(c) "reduces the seller's liability to place the goods at the buyer's disposal at the place where the seller had his place of business at the time of the conclusion of the contract".[89] Although subparagraph (c) is "a residuary rule" to cover those situations not discussed in subparagraphs (a) and (b), it does not state a rule for "all other cases." In particular, the contract may provide for delivery to be made at the buyer's place of business or at some other particular place not mentioned in this Article. The opening phrase of Art. 31 recognizes that in all such cases delivery would be made by handing over the goods or by placing them at the buyer's disposal, whichever is appropriate, at the particular place provided in the contract.[90]

z. The gist of the rules in subparas (b) and (c) (of CISG Art. 31) is that the goods are delivered at the seller's place of business.[91] However, both rules require the goods to be placed at the buyer's disposal, which means that "the seller has done that which is necessary for the buyer to be able to take possession. Normally, this would include the identification of the goods to be delivered, the completion of any pre-delivery preparation, such as packing, to be done by the seller, and the giving of such notification to the buyer as would be necessary to enable him to take possession."[92] In general, "the obligation to deliver in such circumstances consists of taking all steps necessary under the contract",[93] so that the buyer has nothing else to do other than to take the goods at the place of delivery.[94] In addition, if the goods are in the possession of a bailee, such as a warehouseman or a carrier, they might be placed at the disposal of the buyer by such means as the seller's instructions to the bailee to hold the foods for the buyer or by the seller handing over to the buyer in appropriate form the documents which control the goods.[95]


FOOTNOTES

* Chengwei Liu: LL.M. of Renmin University of China; from Global Law Office, Beijing; <lexway@mail.com>.

1. See Comment A on PECL Art. 7:101 at <http://cisgw3.law.pace.edu/cisg/text/peclcomp31.html#cnpc>, where it is made clear: "The place of performance is significant in several respects. A party who is to perform services will have to bear the inconvenience and the costs of presenting himself at the place and tendering performance there. For a debtor to tender or offer performance at a wrong place will often constitute a non-performance. In a contract for the delivery of goods the party who is to perform will in general have to bear the costs and carry the risk of the goods until they have been put at the disposal of the creditor at the place of performance. A creditor who is unable to receive performance in due time because it mistook the place of performance may also fail to perform the contract or bear the risk of a non-performance by the other party […]."

2. See Jan Hellner, "The Vienna Convention and Standard Form Contracts": Petar Sarcevic & Paul Volken eds, International Sale of Goods: Dubrovnik Lectures, Oceana (1986), Ch. 10, pp. 343-344. Also available online at <http://cisgw3.law.pace.edu/cisg/biblio/hellner.html>.

3. See Peter Schlechtriem, Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods, Manz, Vienna (1986), pp. 81-82. Also available online at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem-57.html>.

4. See Digest 2 on CISG Art. 57. in "The UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods" (June 2004). Available online at <http://cisgw3.law.pace.edu/cisg/text/anno-art-57.html>.

5. Cf. Art. 6.1.6 (Place of performance) of the UNIDROIT Principles and its Comment (specifically Comment 2).

6. Supra n. 1, Comment F.

7. CISG Art. 10(a) reads: "For the purposes of this Convention: (a) if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract."

8. Supra n. 1, Comment E.

9. Supra n. 1, Comment G.

10. CISG Art. 10(a) reads: "For the purposes of this Convention: (b) if a party does not have a place of business, reference is to be made to his habitual residence."

11. See Jacob S. Ziegel, "Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods", Comment 2 (c). Available online at <http://cisgw3.law.pace.edu/cisg/text/ziegel31.html>.

12. For relevant decisions, see Digest 2 on CISG Art. 31 (infra n. 36); Digests 4, 5 on CISG Art. 57 (supra n. 4).

13. See Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer and Marisa Pagnattaro, "The Interpretive Turn in International Sales Law: An Analysis of Fifteen Years of CISG Jurisprudence": 34 Northwestern Journal of International Law and Business (Winter 2004), p. 387; also available online at <http://cisgw3.law.pace.edu/cisg/biblio/dimatteo3.html>.

14. Citing Willibald Posch & Thomas Petz in "Austrian Cases on the UN Convention on Contracts for the International Sale of Goods": 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 1-24, at 14-15. Available online also at <http://cisgw3.law.pace.edu/cases/980910a4.html>.

15. Citing Willibald Posch & Thomas Petz; id.

16. See Larry A. DiMatteo etc., supra. n. 13; pp. 373-374.

17. Id., pp. 374-375.

18. Supra n. 1, Comment B.

19. Supra n. 5, Comment 1.

20. See Germany 8 January 1997. Oberlandesgericht [Appellate Court] Köln; case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/970108g1.html>.

21. See Germany 3 December 1999 Provincial Court of Appeal München; case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/991203g1.html>.

22. See Italy 10 March 2000 Supreme Court; case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/000310i3.html>.

23. See Ziegel, supra n. 11.

24. See Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods, Oceana Publication (1992), p. 129. Also available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html>.

25. See John O. Honnold, "Uniform Law and Uniform Trade Terms -- Two Approaches to a Common Goal": Horn & Schmitthoff eds, Transnational Law of International Commercial Transactions (Kluwer 1982), p. 170.

26. See Hellner, supra n. 2.

27. See Ulrich G. Schroeter, "Vienna Sales Convention: Applicability to 'Mixed Contracts' and Interaction with the 1968 Brussels Convention", 5 Vindobona Journal of International Commercial Law and Arbitration (2001), p. 81. Available online at <http:// cisgw3.law.pace.edu/cisg/biblio/schroeter1.html>. Schroeter, however, submits that contracting parties "only rarely seem to include a clause on the place of payment in their contract". (Ibid.)

28. See Secretariat Commentary on Art. 53 of the 1978 Draft [draft counterpart of CISG Art. 57]; Comment 1. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-57.html>.

29. CISG Art. 6 reads: "The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions." Under the PECL, the counterpart rule is Art. 1:102, which reads under the title "Freedom of Contract": "(1) Parties are free to enter into a contract and to determine its contents, subject to the requirements of good faith and fair dealing, and the mandatory rules established by these Principles. (2) The parties may exclude the application of any of the Principles or derogate from or vary their effects, except as otherwise provided by these Principles."

30. See Enderlein and Maskow, supra n. 24, at p. 216.

31. Supra n. 28, at fn. 1.

32. Supra n. 30.

33. The court held: "According to the payment procedure established between the parties during many years, the place of performance for the payment of the price is the [buyer]'s place of business. From the start of their business relations, it was the [seller] who bore the cost of the money transfer. Under the CISG, the issue of which party bears the cost of the money transfer is determined by the place of performance for the payment obligation (citations omitted). It follows vice versa that the place of performance is the [buyer]'s place of business if the parties established the practice that the [seller] was to bear the cost of the money transfer." (See Germany 24 November 1998 Landgericht [District Court] Bielefeld; case presentation including English translation available online at <http://cisgw3.law.pace.edu/cases/981124g1.html>.) Cf. Germany 7. December 2000 District Court Trier, where similarly the court, taking into account the parties' ordinary course of business, holds that the parties implicitly agreed on a specific manner of payment, which consists in the seller direct debiting of buyer's bank account in the Netherlands. By this agreement the court held that the parties have established a practice between them under which the place of payment was at the buyer's bank in the Netherlands. (See the UNILEX abstract at <http://www.unilex.info/case.cfm?pid=1&do=case&id=800&step=Abstract>.)

34. Official Comment on PECL Art. 7:101, Comment H, supra note 1.

CISG Art. 9 reads: "(1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves. (2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned." PECL Art. 1:105 reads: "(1) The parties are bound by any usage to which they have agreed and by any practice they have established between themselves. (2) The parties are bound by a usage which would be considered generally applicable by persons in the same situation as the parties, except where the application of such usage would be unreasonable."

35. See Italy 7. August 1998 Supreme Court; case presentation including English translation available online at <http://cisgw3.law.pace.edu/cases/980807i3.html>.

36. See Digest 13 on CISG Art. 31 in "The UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods" (June 2004). Available online at <http://cisgw3.law.pace.edu/cisg/text/anno-art-31.html>.

37. Supra n. 35.

38. See Germany 16 July 2001 Provincial Court of Appeal Köln; case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/010716g1.html>.

39. See Germany 13 April 2000 Amtsgericht [Lower Court] Duisburg; case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/000413g1.html>.

40. See Denmark 15 February 2001 Hjesteret [Supreme Court] (Damstahl A/S v. A.T.I. S.r.l), case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/010215d1.html>.

41. See Honnold, supra n. 25, at p. 171.

42. Supra n. 1, Note 1. It is also noted that: "In some of the laws the debtor's residence or place of business is the place of performance of a money obligation, see SPANISH CC art. 1171(3); FRENCH, BELGIAN and LUXEMBOURG Civil Codes art. 1247(3), except that if the price for goods is payable on delivery it is payable at the place of delivery, arts. 1609 and 1651. The debtor who sends money to the creditor bears the risk of loss or delay, see for Belgian law Cass. 6 Jan. 1972, Arr. Cass., 441; Cass. 23 Sept. 1982, Pas. I, 118; similarly Luxembourg District Court 31 Jan. 1874, 1, 128." (Ibid.)

43. See Benjamin's Sale of Goods, Guest ed. (1975); p. 705.

44 Supra n. 1, Comment C.

45. See Enderlein and Maskow, supra n. 24, at pp. 214-215.

46. See Ziegel, supra. n. 11.

47. Supra n. 28, Comment 2. It is also noted, on the other hand, that "[t]his Convention does not govern the extent to which exchange control regulations or other rules of economic public order may modify the obligations of the buyer to pay the seller at a particular time or place or by a particular means. The buyer's obligations to take the steps which are necessary to enable the price to be paid are set forth in article 50 [draft counterpart of CISG article 54]. The extent to which the buyer may be relieved of liability for damages for his failure to pay as agreed because of exchange control regulations or the like is governed by article 65 [draft counterpart of CISG article 79] [For the extent to which the seller may be relieved of the duty to deliver the goods if the buyer does not pay as agreed, see articles 54(1), 60, 62, 63 and 64 [draft counterpart of CISG articles 58(1), 64, 71, 72 and 73].]." (Supra n. 28, Comment 3.)

48. Supra n. 30.

49. Supra n. 28, Comment 5.

50. See Austria 10 November 1994 Supreme Court, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/941110a3.html>.

51. See Germany 4 December 1996 Bundesgerichtshof [Federal Supreme Court], case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/961204g1.html>.

52. See Enderlein and Maskow, supra. n. 24, at p. 218.

53. Schlechtriem wants to interpret the documents referred to in Art. 58 in the meaning of Arts. 30 and 34 because the right of the seller to refuse performance is at stake; see Schlechtriem, supra n. 3.) In the opinion of Enderlein and Maskow, Arts. 30 and 34, however, refer to documents which relate to the goods. An extended version of the term "documents" is used there which may include certificates relating to quality and analysis, operating manuals, technical descriptions and drawings. Enderlein and Maskow are also in favor of a functional interpretation and not of a limitation of the relevant documents to mere documents of title without wanting to consider the two groups of documents as identical. Reference is made here in the first place to shipping documents, like bills of lading, warehouse certificates, combined transport documents, international forwarding notes, etc., i.e. the so-called documents of title. Depending on the basis for delivery agreed, the documents can also be such which only certify the taking over of the goods (quay receipt, mate's receipt, forwarding agent's receipt) and/or such which prove the conclusion of a freight or storage contract which serve to substantiate an obligation to deliver (sender copies of the waybill in transportation by way of railroad, motor traffic, airship and inland navigation). The requirements for those documents are determined according to the rules applicable to the respective category of performance. The category of transportation documents which will have to be presented can usually be inferred from the INCOTERMS referred to. Where the buyer has to pay customs duties to obtain the goods, the seller has to provide the necessary documents, such as invoices (if agreed having account of specific form requirements -- consular invoices) and certificates of origin. Depending on what is agreed in the contract other documents are added, like insurance documents, certificates of quality, etc. The Uniform Customs and Practices for Documentary Credits contain the requirements which most of these documents will have to meet. (See Enderlein and Maskow, supra n. 24, at pp. 219-220.)

54. See Enderlein and Maskow, supra n. 24, at p. 220. According to the authors, the places determined according to the handing over of the documents are different in the case of specific terms of payment. In the event of the term "cash against documents", the documents have to be submitted as a rule at the buyer's (Article 8, Uniform Rules for Collections). However, the buyer has to be considered as obligated to satisfy all formalities which are necessary to allow transfer of the payment to the seller's country. But he is obliged only insofar as that one depends on him and, in particular, only to the extent to which he is legally entitled and actually in a position to do so. Where a letter of credit is agreed, all banks engaged act on behalf of the buyer, hence the issuing bank and also other banks engaged by it, including the bank in the seller's country which notifies the seller of the opening of the letter of credit, its place of business is also the place of payment, which again entails the consequences described under note 1.2. This is also in line with the Uniform Customs and Practices for Documentary Credits according to which the bank sending the notification is under certain circumstances entitled to make the payment pursuant to the conditions prescribed (Article 2, (ii); Article 11, subpara. (d). Where a payment made under a reservation is reclaimed later, because the bank where the letter of credit is issued does not pay, the payment is considered as not having been made. (See Enderlein and Maskow, supra n. 24, at pp. 220-221.)

55 Supra n. 4, Digest 3.

56. Supra n. 35.

57. See Italy 14 December 1999 Supreme Court, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/991214i3.html>.

58. See Belgium 15 May 2002 Hof van Beroep [Appellate Court] Gent, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/020515b1.html>.

59. See Germany 19 January 2001 District Court Flensburg, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/010119g1.html>.

60. See Austria 22 October 2001 Supreme Court, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/011022a3.html>.

61. See Germany 20 September 2002 District Court Göttingen, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/020920g1.html>.

62. See Germany 10 December 2003 Appellate Court Karlsruhe, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/031210g1.html>.

63. See Enderlein and Maskow, supra. n. 24, at p. 215.

64. See Germany 17. December 2002 District Court Giessen, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/021217g1.html>.

65. Supra n. 62.

66 See Peter Schlechtriem, "Commentary on Oberlandesgericht Düsseldorf 2 July 1993": International Contract Manual: Guide to UN Convention, Suppl. 9 (Kluwer: April 1994), case presentation also available online at <http://cisgw3.law.pace.edu/cases/930702g1.html>.

67. See Germany 2 July 1993 Provincial Court of Appeal Düsseldorf, case presentation available online at <http://cisgw3.law.pace.edu/cases/930702g1.html>.

68. In this respect, see Digests 6 to 8; supra n. 4.

69. See Germany 28 October 1999 Provincial Court of Appeal Braunschweig, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/991028g1.html>.

70. See Leif Sevn, "Obligations of the Buyer under the UN Convention on Contracts for the International Sale of Goods": Petar Sarcevic & Paul Voken eds. International Sale of Goods: Dubrovnik Lectures, Oceana (1986), p. 213, also available online at <http://cisgw3.law.pace.edu/cisg/biblio/sevon1.html>; see also Leif Sevn in "Obligations of the Buyer under the Vienna Convention on the International Sale of Goods": Suomalainen Lakimiesten Yhdistys: - Tidskrift utgiven av Juridiska Föreningen i Finland [Finnish Law Society] 126 (1990), p. 333, also available online at <http://cisgw3.law.pace.edu/cisg/text/sevon57.html>.

71. See Ziegel, supra n. 11.

72. Supra n. 28, Comment 6.

73. Supra n. 4, Digest 9.

74. Supra n. 1, Comment I.

75. This Article reads: "A party must bear any increase in the expenses incidental to performance which is caused by a change in its place of business subsequent to the conclusions of the contract." According to its Comment (specifically Comment 3), "[i]n view of the importance of the parties' respective places of business for the application of para. (1), it is necessary to cater for the situation where a party changes its location after the conclusion of the contract, a move which may involve additional expense for the performing party. The rule established in para. (2) is that each party must bear any such increase of expenses occasioned by a change in its place of business." "It is moreover possible that a party's move may entail other inconvenience for the other party. The obligation to act in good faith (Art. 1.7) and the duty to cooperate (Art. 5.3) will often impose on the moving party an obligation to inform the other party in due time so as to enable the latter to make such arrangements as may be necessary."

76. Supra n. 1, Note 2.

77 Supra n. 1, Comment D.

78. See Russia 24 January 2002 Arbitration proceeding 27/2001, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/020124r1.html>.

79. Supra n. 36, Digest 1.

80. Supra n. 38.

81. See Switzerland 10 February 1999 Handelsgericht [Commercial Court] Zrich, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/990210s1.html>.

82. See Enderlein and Maskow, supra n. 24, at pp. 131-132.

83. See Hellner, supra. n. 2, at p. 345.

84. See Hellner, supra. n. 2, at p. 346.

85. Supra. n. 82.

86. See Ziegel, supra. n. 11.

87. Supra n. 36, Digest 8.

88. See Secretariat Commentary on Art. 29 of the 1978 Draft [draft counterpart of CISG Art. 31]; Comment 14. Available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-31.html>.

89. See Germany 19 December 2002 Appellate Court Karlsruhe, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/021219g1.html>.

90. Supra n. 88, Comment 15.

91. See Hellner, supra n. 2.

92. Supra n. 88; Comment 16.

93. See Germany 23 June 1998 Provincial Court of Appeal Hamm, case presentation including English translation is available online at <http://cisgw3.law.pace.edu/cases/980623g1.html>.

94. Supra n. 36, Digest 9.

95. Supra n. 88, Comment 17.


Pace Law School Institute of International Commercial Law - Last updated September 14, 2009
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