UNCITRAL Digest of Article 41 case law

DIGEST OF ARTICLE 41 CASE LAW

In general

1. Article 41 governs the seller’s duty to deliver goods of which the buyer will enjoy undisturbed possession and ownership. Although under article 4(b) questions concerning "the effect which the contract may have on the property in the goods sold" is beyond the scope of the CISG, article 41 makes it clear that the seller’s obligation to give the buyer clear property rights in the goods, so that the buyer is free from third party rights or claims, is a matter governed by the Convention, and that the seller will be in breach of its duties if it does not meet the requirements imposed by article 41. The basic statement of the seller’s obligation is found in the first sentence of article 41: the seller must deliver goods that "are free from any right or claim of a third party ... ". An exception to this obligation arises, however, if the buyer "agreed to take the goods subject to that right or claim". The second sentence of article 41 mandates a distinction between third party rights or claims based on "industrial or other intellectual property" and other rights or claims of third parties. Only the latter are within the scope of article 41, whereas the former are governed by article 42 of the Convention.

Application of Article 41

2. There have been relatively few decisions applying article 41; they have tended to focus on what constitutes a breach of the seller’s obligations under the provision. In one, the court stated that a seller would violate article 41 if it delivered goods subject to a restriction, imposed by the seller’s own supplier, on the countries in which the buyer could resell the goods, unless the buyer had previously consented to the restriction.[1] In another, an arbitration panel indicated that article 41 required a seller to arrange for its wholly-owned subsidiary, which had obtained a court order putting under arrest the vessel in which the goods were loaded, to avoid or lift the effects of the order.[2]

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. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>] (see full text of the decision).

2. [ICC Court of Arbitration, case No. 8204 of 1995, available online at <http://cisgw3.law.pace.edu/cases/958204i1.html>].