Amend article 80 [became CISG article 68] by adding a new paragraph after paragraph (1). The second paragraph reads as follows:
"(2) The provisions of paragraph (1) do not apply where the goods are lost or damaged before the conclusion of the contract."] [relates to provision that became CISG article 4(a)]
38. Mr. VENKATASUBRAMANYAN (India) introduced an amendment (A/CONF.97/C.1/L.244) to add a second paragraph to article 80 [became CISG article 68 ]. His delegation would have preferred to drop that article altogether, but had assumed, for purposes of its proposal, that it would be kept, which had proved to be the case. Article 80 [became CISG article 68 ] did not provide for the case, which had occurred in practice, where the goods, sold during transit between two ports, were completely lost in a shipwreck. Buyer and seller were both unaware of the loss at the time of the conclusion of their contract. In his delegation's view, there would be no contract in such a case, since the parties had assumed that the goods existed whereas in fact they no longer did. It would be advisable to take that possibility into account in article 80 [became CISG article 68 ] which was why his delegation proposed that the second paragraph should read: "The provisions of paragraph (1) do not apply where the goods are lost or damaged before the conclusion of the contract ".
39. Mr. ZIEGEL (Canada) said that the Indian representative had raised the very important question of the interaction between article 80 [became CISG article 68 ] and the provisions of national law governing the validity of the contract [referred to in CISG article 4(a) ]. Common law systems provided that where the parties were mistaken about the existence of the goods at the time of the conclusion of the contract, it was no longer valid. That was the rule of "res extincta", which the Indian amendment was designed to preserve. If it was not accepted, and given that the Convention was not concerned with the validity of the contract, could a contracting party, against whom article 80 [became CISG article 68 ] was invoked maintain that the contract was invalid because the goods had not existed at the time of its conclusion and that article 80 [became CISG article 68 ] was no longer operative? During the consideration of previous articles, some delegations had asked whether a buyer, having noted a lack of conformity of the goods, could declare that, owing to an error as to the nature of the goods, he did not regard himself as bound by the contract or by the provisions which would otherwise have been applicable (article 37 [became CISG article 39 ] in the case in point). The same question arose again with article 80 [became CISG article 68 ]. The Committee should therefore decide whether or not article 80 [became CISG article 68 ] prevailed over any other contrary provision of national law concerning the validity of the contract in the event of a mistake by the parties as to its purpose.
40. The CHAIRMAN noted that one part of the Convention was aimed at unifying the law, but that it could be circumvented by the provisions of national law. One answer to that situation, admittedly an inadequate one, was provided by article 6 of the Convention [became CISG article 7 ], which dealt with the interpretation and application of the provisions of the Convention.
41. Observing that the Indian amendment (A/CONF.97/C.1/L.244) commanded only limited support, he said that if there were no objections he would take it that the Committee wished to reject it and adopt article 80 [became CISG article 68 ] with the change proposed by the United States.
42. It was so decided.
(. . .)