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2012 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods

Digest of Article 2 case law [reproduced with permission of UNCITRAL] [*]

[Text of article
Overview
Consumer sales
Other exclusions]

Article 2

This Convention does not apply to sales:
(a) Of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use;
(b) By auction;
(c) On execution or otherwise by authority of law;
(d) Of stocks, shares, investment securities, negotiable instruments or money;
(e) Of ships, vessels, hovercraft or aircraft;
(f) Of electricity.

Overview

1. This provision identifies an exhaustive list [1] of sales that are excluded from the Convention's sphere of application. This provision requires courts to determine whether the sale compares to one of the kinds excluded from the Convention's sphere of application before applying the Convention.[2]

2. The exclusions referred to in article 2 are of three types: those based on the purpose for which the goods were purchased, those based on the type of transaction, and those based on the kinds of goods sold.[3]

Consumer sales

3. According to article 2 (a), a sale falls outside the Convention's sphere of application when it relates to goods which at the time of the conclusion of the contract are intended to be used exclusively [4] for personal, family or household use.[5] It is the buyer's intention at the time of the conclusion of the contract that is relevant,[6] rather than the buyer's actual use of the goods.[7] Thus, the purchase of a car,[8] a motorcycle [9] or a recreational trailer [10] for exclusive personal use may fall outside the Convention's sphere of application [11] as may the sale of leisure boats [12] (which is also excluded pursuant to article 2(e)).[13] The same is true as regards "the purchases by tourists, border inhabitants, or by mail order for the purposes of personal, family or household use".[14]

4. If the goods are purchased for a commercial or professional purpose, such as furniture to be used in a law firm [15] or a used car to be resold by a car retailer,[16] the sale does not fall outside the Convention's sphere of application,[17] even in those cases where the use to which the individual intends to put the goods is also a personal, household or family use,[18] since only the intended exclusive personal, family or household use excludes the sale from the Convention's sphere of application. Thus, the following situations are governed by the Convention: the purchase of a camera by a professional photographer for use in his business; the purchase of a piece of soap or other toiletries by a business for the personal use of its employees; the purchase of a single automobile by a dealer for resale.[19]

5. If goods are purchased for the aforementioned "personal, family or household use" purposes, the Convention is inapplicable "unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use".[20] This means that the Convention does not apply only if the personal, family or household use was known to the seller or was apparent.[21] To determine whether the intended personal, family or household use was apparent, resort is to be had, inter alia, to objective elements,[22] such as the nature of the goods,[23] the quantity of the goods [24] and the delivery address.[25] In case law, it has been pointed out that the Convention does not impose upon the seller an obligation to make inquiries into the intended use of the goods.[26]

6. If this "unless" clause is satisfied the CISG applies, provided the other requirements for its applicability are met. This narrows the reach of the article 2 (a) exception, and leads to the possibility of a conflict between domestic consumer protection law and the Convention in those cases where applicability of the domestic law does not require that the seller either knew or ought to have known of the buyer's intended use.[27]

Other exclusions

7. The exclusion of sales by auction (article 2(b)) covers auctions resulting from authority of law as well as private auctions.[28] Sales at commodity exchanges do not fall under the exclusion, since they merely constitute a particular way of concluding the contract.

8. Under article 2(c) sales on judicial or administrative execution or otherwise by authority of law are excluded from the Convention's sphere of application as such sales are normally governed by mandatory laws of the State under whose authority the execution is made.

9. The exclusion of sales of stocks, investment securities, and negotiable instruments (article 2(d)) is intended to avoid a conflict with mandatory rules of domestic law.[29] Documentary sales do not fall within this exclusion. The sale of money is also excluded pursuant to article 2(d). One arbitral tribunal applied the Convention to the sale of souvenir coins.[30]

10. Under article 2(e) sales of ships [31] (including sailboats [32] and leisure boats [33]), vessels, aircraft,[34] and hovercraft are also excluded from the Convention. However, sales of parts of ships, vessels, aircraft, and hovercraft -- including essential components, such as engines [35] -- may be governed by the Convention since exclusions from the Convention's sphere of application must be interpreted restrictively. According to one arbitral tribunal, the sale of a decommissioned military submarine is not excluded by virtue of article 2 (e).[36]

11. Although the sale of electricity is excluded from the Convention's sphere of application (article 2(f)), a court has applied the Convention to the sale of propane gas.[37]


NOTES

* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.uncitral.org/pdf/english/clout/CISG-digest-2012-e.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:

   -    To enhance access to contents by computer search engines, we present in html rather than pdf;
 
   -    To facilitate direct focus on aspects of the Digests of most immediate interest, we inserted linked tables of contents at the outset of most presentations;
 
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   -    To enable researchers to themselves keep the case citations provided in the Digests constantly current, we have created a series of tandem documents, UNCITRAL Digest Cases + Added Cases. The new cases and other cases that are cited in these updates are coded in accordance with UNCITRAL's Thesaurus.

In addition, this presentation introduces each section of the UNCITRAL Digest with a Google search button. This is to help you access doctrine (relevant material from the over 1,400 commentaries, monographs and books on the CISG and related subjects that we present on this database) as well as the texts of the cases that UNCITRAL cites in its Digests and that we present in our updates to UNCITRAL's Digests.

1. For an express reference to the list being exhaustive, see [GERMANY Oberlandesgericht Schleswig-Holstein 29 October 2002].

2. For a court decision referring to the lack of applicability of any of the exclusions listed in article 2 as a requirement for the Convention to apply, see [UNITED STATES District Court, Southern District of New York, 29 May 2009]; [GERMANY Oberlandesgericht München 14 January 2009]; [GERMANY Landgericht Landshut 12 June 2008]; [UNITED STATES District Court, Southern District of New York, 23 August 2006]; [GERMANY Landgericht Gera 29 June 2006]; CLOUT case No. 880 [SWITZERLAND Tribunal Cantonal de Vaud 11 April 2002]; [GERMANY Oberlandesgericht Hamm 12 November 2001]; CLOUT case No. 480 [FRANCE Cour d'appel de Colmar 12 June 2001]; [GERMANY Landgericht Landshut, 5 April 1995]; [GERMANY Amtsgericht Cloppenburg 14 April 1993]. For similar reasoning, albeit relating solely to the exclusion provided for in article 2(a), see [GERMANY Oberlandesgericht Hamm 2 April 2009 (Car case)]; [SWITZERLAND Obergericht Aargau 3 March 2009]; [NETHERLANDS Hof s'Gravenhage 17 February 2009]; [GREECE Polimeles Protodikio Athinon, 2009 (docket No. 4505/2009)]; [SWITZERLAND Bundesgericht 16 December 2008]; [GERMANY Landgericht Bamberg 23 October 2006]; [NETHERLANDS Rechtbank Arnhem 1 March 2006]; [GERMANY Landgericht Neubrandenburg 3 August 2005]; [GERMANY Landgericht Kiel 27 July 2004]; CLOUT case No. 590 [GERMANY Landgericht Saarbrücken 1 June 2004]]; CLOUT case No. 549 [SPAIN Audiencia Provincial de Valencia 7 June 2003]; [NETHERLANDS Hof s'Hertogenbosch 25 February 2003]; [GERMANY Landgericht Saarbrücken 25 November 2002]; [GERMANY Landgericht Saarbrücken 2 July 2002]; [GERMANY Landgericht München 20 February 2002]; CLOUT case No. 341 [CANADA Ontario Superior Court of Justice 31 August 1999]; CLOUT case No. 410 [GERMANY Amtsgericht Alsfeld 12 May 1995]; [GERMANY Landgericht Oldenburg 15 February 1995]; [GERMANY Landgericht Oldenburg 9 November 1994]; CLOUT case No. 199 [SWITZERLAND Tribunal Cantonal du Valais 29 June 1994]; CLOUT case No. 201 [SWITZERLAND Gerichtspräsident Laufen 7 May 1993].

3. United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 16.

4. For an express reference to the need for this requirement to be met to exclude the Convention's applicability pursuant to article 2(a), see CLOUT case No. 992 [DENMARK Rettin i Københaven, 19 October 2007].

5. For this statement in case law, see [GERMANY Oberlandesgericht Hamm 2 April 2009 (Car case)].

6. See CLOUT case No. 445 [GERMANY Bundesgerichtshof 31 October 2001].

7. See CLOUT case No. 190 [AUSTRIA Oberster Gerichtshof 11 February 1997].

8. See CLOUT case No. 190 [AUSTRIA Oberster Gerichtshof 11 February 1997]; CLOUT case No. 213 [SWITZERLAND Kantonsgericht Nidwalden 5 June 1996].

9. [NETHERLANDS Rechtbank Harleem 15 December 2005].

10. See [NETHERLANDS Rechtbank Arnhem 27 May 1993].

11. See, however, [GERMANY Landgericht Düsseldorf 11 October 1995] (applying the Convention to the sale of a generator destined for personal use).

12. [GREECE Efetio Pireos 2008 (docket number 520/2008)].

13. Ibid.

14. See CLOUT case No. 904 [SWITZERLAND Tribunal Cantonal du Jura 3 November 2004].

15. [GERMANY Landgericht Bamberg 13 April 2005].

16. [GERMANY Landgericht Köln 16 November 1995].

17. For an express statement to this effect, see See CLOUT case No. 904 [SWITZERLAND Tribunal Cantonal du Jura 3 November 2004].

18. See CLOUT case No. 843 [FINLAND Korkein oikeus 14 October 2005].

19. For these examples, see United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 16.

20. See [GERMANY Oberlandesgericht Hamm 2 April 2009 (Car case)]; CLOUT case No. 445 [GERMANY Bundesgerichtshof 31 October 2001].

21. See [GERMANY Oberlandesgericht Stuttgart 31 March 2008], applying the Convention to the sale of a car, since the intended personal use was not apparent.

22. For this statement, see [GERMANY Oberlandesgericht Hamm 2 April 2009 (Car case)].

23. For an express reference to the nature of the goods as an element to be taken into account when determining whether the personal, family or household use was apparent, see [GERMANY Oberlandesgericht Hamm 2 April 2009 (Car case)]; [AUSTRIA Oberster Gerichtshof 10 September 2003 (Christmas decoration)].

24. See CLOUT case No. 904 [SWITZERLAND Tribunal Cantonal du Jura 3 November 2004].

25. Ibid.

26. [GERMANY Oberlandesgericht Hamm 2 April 2009 (Car case)].

27. CLOUT case No. 445 [GERMANY Bundesgerichtshof 31 October 2001].

28. For a court not applying the Convention due to the sale being a sale by private auction, see [GERMANY Bundesgerichtshof 2 October 2002].

29. For decisions excluding the Convention's applicability to the sale of shares, see CLOUT case No. 260 [SWITZERLAND Cour de Justice de Genève 9 October 1998]; [SWITZERLAND 31 May 1996 Zurich Chamber of Commerce Arbitral Tribunal, ZHK 273/95].

30. CLOUT case No. 988 [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 2000 (Arbitral award No. CISG/2000/17)].

31. For cases of inapplicability of the Convention to contract for the sale of ships, see [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russian Federation, 6 April 1998]; [SERBIA Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce 15 April 1999].

32. See [NETHERLANDS Rechtbank Middleburg 2 April 2008].

33. [GREECE Efetio Pireos, 2008 (docket number 520/2008)]. See [NETHERLANDS Hof Leeuwarden 31 August 2005] applying the Convention to the sale of a boat.

34. For the inapplicability of the Convention to a contract for the sale of an aircraft, see [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, 2 September 1997].

35. See CLOUT case No. 53 [HUNGARY Legfelsóbb Biróság 25 September 1992].

36. See [RUSSIA Maritime Commission Arbitration proceeding 1/1998, 18 December 1998].

37. See CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof 6 February 1996].


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