UNCITRAL Digest of Article 31 case law

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>].