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GUIDE TO CISG ARTICLE 31

Secretariat Commentary (closest counterpart to an Official Commentary)


Guide to the use of this commentary

The Secretariat Commentary is on the 1978 Draft of the CISG, not the Official Text, which re-numbered most of the articles of the 1978 Draft. The Secretariat Commentary on article 29 of the 1978 Draft is quoted below with the article references contained in this commentary conformed to the numerical sequences of the Official Text, e.g., article 29 [draft counterpart of CISG article 31].

To the extent it is relevant to the Official Text, the Secretariat Commentary on the 1978 Draft is perhaps the most authoritative source one can cite. It is the closest counterpart to an Official Commentary on the CISG. A match-up of this article of the 1978 Draft with the version adopted for the Official Text is necessary to document the relevancy of the Secretariat Commentary on this article. See the match-up for this article for a validation of citations to this Secretariat Commentary. This match-up indicates that article 29 of the 1978 Draft and CISG article 31 are identical.


Text of Secretariat Commentary on article 29 of the 1978 Draft
[draft counterpart of CISG article 31]   [Absence of specified place for delivery]

PRIOR UNIFORM LAW

ULIS, articles 19(2) and 23.

COMMENTARY

1. The seller's primary obligation is to "deliver the goods" as required by the contract and this Convention.

2. Article 29 [draft counterpart of CISG article 31] states how and where the seller's obligation to deliver is fulfilled. Article 31 [draft counterpart of CISG article 33] states when the seller is obligated to deliver. Articles 78 to 82 [draft counterpart of CISG articles 66 to 70] deals with the related problems of the passage of the risk of loss.

[Audit states: "In terms of the civil law, the Convention eliminates the concept of délivrance. Under French law, délivrance implies delivery of conforming goods and, therefore, combines delivery and conformity. This concept was incorporated in the ULIS, which was first drafted in French. Under article 19 of the ULIS, délivrance, the main obligation of the seller, included conformity of the goods. This concept was alien to common law lawyers; it was alleged that the term could not be accurately translated into English and other languages. ... It was translated simply as 'delivery', a term that did not convey the same meaning. Evident practical difficulties ensued. If the seller delivered goods which later proved to be nonconforming, he was deemed not to have discharged his obligation 'to deliver' although the buyer had physical possession of the goods and could use them. Also, to complicate matters even further, the passing of risk from the seller to the buyer was governed by this very peculiar notion of delivery. In the Vienna Convention, 'delivery' has been used for what it means in English: the handing over of the goods. ... Delivery is accomplished by the physical acts that the seller must perform in order to discharge his obligation, such as handing over the goods together with the necessary documents to a carrier. ... Conformity is regulated by a separate set of provisions. ..." Bernard Audit,"The Vienna Sales Convention and the Lex Mercatoria", Lex Mercatoria and Arbitration, Carbonneau ed., Transnational (1990), p. 147. See also Michael R. Will, Bianca-Bonell Commentary, Milan: Giuffrè (1987) pp. 336-337.]

"The goods" which must be delivered

3. In order for the seller to deliver "the goods", in the case of specific goods, he must deliver the exact goods called for in the contract. In the case of unidentified goods, he must deliver goods which generally conform to the description of the type of goods called for by the contract. Therefore, if the contract calls for the delivery of corn, the seller has not delivered if he provides potatoes. However, the seller has delivered "the goods" if he does the appropriate act called for by subparagraphs (a) to (c) in respect of the specific goods described in the contract or, in the case of unidentified goods, of goods which conform to the generic description int eh contract even though they re non-conforming or are not delivered at the time require or by the means of transportation specified. Therefore, the handing over to the carrier of No. 3 grade corn when No. 2 grade was called for or the handing over to the carrier of five tons when 10 tons were called for would constitute deliver of "the goods". Even though "the goods" had been "delivered", the buyer would be able to exercise any rights which he might have because of the seller's failure to "deliver the goods...as required by the contract and this Convention" [see footnote 1]. Among the buyer's rights would be the right to avoid the contract where the failure of the seller amounted to a fundamental breach [see footnote 2]. Nevertheless, the seller would have "delivered the goods".

[Schlechtriem disagrees with the conclusion that "if the contract calls for the delivery of corn, the seller has not delivered if he provides potatoes." He states "There is delivery even when goods entirely different from the ones ordered have been handed over, as when, because of a reading mistake, chloral aluminum instead of aluminum chlorate is delivered, or -- to take a case decided recently by the House of Lords -- worthless autumn cabbage seed instead of the winter cabbage seed actually ordered is furnished. The view of the UNCITRAL Secretariat's Commentary that where something entirely different has been delivered there is not delivery within the meaning of Article 30 and following seems to me to be mistaken and even dangerous. The danger lies in the risk of transferring to the Convention a most unfortunate controversy from German legal science and practice, namely, the question whether 'merely defective' goods (a "peius") have been delivered, or whether there is no delivery at all because an "aliud" has been handed over. At first sight, the problem appears to be purely academic since both cases constitute a breach of contract, and the remedies of Articles 45 and following make no distinction between the delivery of merely non-conforming goods and the "delivery' of an aliud which really is not delivery at all. But the distinction would immediately gain practical relevance if the buyer, according to Article 39, lost his rights because he failed to give timely notice of the non-conformity. If one were to argue that the remedies of Article 45 and their loss by failure to give notice presuppose delivery in the narrower sense of placing at the buyer's disposal or handing over goods that are not entirely an aliud then, as in German law, the problem of distinguishing between aliud and mere defect would also burden the Convention. A buyer who has failed to give timely notice could maintain that steel beams not conforming to the contractual description, or winter wheat delivered instead of summer wheat, could not be regarded as deliveries and therefore a prerequisite for his obligation to give notice of the lack of conformity was missing. This situation should be avoided by assuming delivery whenever the goods handed over to the buyer or carrier have been selected for the purpose of performing the sales contract in question." Peter Schlechtriem, in Galston & Smit, "International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), pp. 6-12/13.]

Where the contract of sale involves the carriage of goods, subparagraph (a)

4. Where the contract of sales involves the carriage of goods, the general rule is that the seller's obligation to deliver the goods consists of handing them over the first carrier for transmission to the buyer.

[Honnold states that Article "31(a) ... refers to transport by a 'carrier' to which the seller 'hands the goods over' for 'transmission to the buyer.' This language shows that 'carrier' does not include transport facilities, such as delivery trucks, operated by the parties'." John O. Honnold, "Uniform Law for International Sales under the 1980 United Nations Convention" [Honnold Text], 2d ed., Kluwer Law International p. 288.]

5. The contract of sale involves the carriage of goods if the seller is required or authorized to send the goods to the buyer. Both shipment contracts (e.g. CIF, FOB, FOR) and destination contracts (e.g. Ex-Ship, Delivered at...) are contracts of sales which involve carriage of the goods.

6. In any cases where the contract of sale involves the carriage of goods, the contract wither, explicitly or by the use of a trade term specifies the place at which the goods are to be delivered. Where this is the case, the seller's obligation to deliver does not consist of handing the goods over the first carrier but in doing the act specified in the contract.

7. Therefore, if the contract is a destination contract, the seller's obligation to deliver consists of placing the goods at the disposal of the buyer at the place of destination. Similarly, if the contract is FOB or CIF named port of shipment, the seller's obligation to deliver as determined by the contract consists of placing the goods on board a vessel at the named port of shipment [see footnote 3]. This is the case even though the seller may need to provide for transport from an inland point to the port of shipment.

8. However, if the contract does not require the seller to deliver the goods at any other particular place and the goods are to be transported by two or more carriers, delivery of the goods is made by handing them over "to the first carrier for transmission to the buyer". Therefore, in such a case if the goods are shipped rom an inland point by rail or truck to a port where they are to be loaded aboard a ship, delivery is effected when the goods are handed over the railroad or trucking firm.

9. The delivery of the goods is effected by handing over the goods to the carrier, not by handing over the documents to the buyer. Even if the seller never handed over the documents to the buyer as required by the contract, he would have delivered the goods when they were handed over to the carrier. Of course the seller would be subject to any remedies provided by the contract and this Convention for his failure to hand over the documents.

["The provision that the seller's responsibility is not discharged until he has 'handed over' the goods to the carrier (as contrasted with leaving the goods on an unattended dock pending arrival of the carrier) means that the seller remains responsible until the carrier has taken possession of the goods and thereby has assumed some responsibility for them. ..." Honnold Text, 2d ed., p. 289.]

Goods at or to be manufactured or produced at a particular place, subparagraph (b)

10. If, 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 and the contract does not require or authorize the shipment of the goods, the seller's obligation to deliver the goods consists of placing the goods at the buyer's disposal at the place at which the goods were located or at the place at which they were to be manufactured or produced.

11. There are a number of different situations envisaged by this subparagraph. The first is that the goods are specified goods. For example, if the contract was for the sale by one dealer to another dealer of a specific painting which the parties knew was at a particular location, delivery would be effected by the seller placing the painting at the buyer's disposal at that location. The same solution is given if 10 tons of scrap steel are to be drawn from a specific pile of scrap steel or if 100 chairs are to be manufactured in a particular factory.

12. If the goods are already in transit at the time of the conclusion of the contract, the contract of sale is not one which "involves" the carriage of goods under subparagraph (a) of this article but is one which involves goods which are at a particular place and which are therefore subject to this subparagraph. This is true whether the sale is of an entire shipment under a given bill of lading, in which case the goods are specified goods, or whether the sale is of only a part of the goods covered by a given bill of lading. Otherwise, if the contract of sale of goods already in transit were held to "involve the carriage of goods", thereby making it subject to article 29(a) [draft counterpart of CISG article 31(a)], the seller would never "deliver the goods" because the goods would not be handed over the carrier "for transmission to the buyer". However, by virtue of article 80 [draft counterpart of CISG article 68] the risk of loss [would pass to the buyer at the time of conclusion of the contract unless the circumstances indicate otherwise, in which event, the risk of loss] would pass to the buyer at the time the goods were handed over to the carrier who issued the documents controlling the disposition of the goods even though the handing over took place prior to the conclusion of the contract of sale.

13. Both parties must know of the location of the specific goods, of the location of the specific stock from which the goods to be delivered are to be drawn, or of the place at which the goods are to be manufactured or to be produced. They must have actual knowledge; it does not suffice if one or the other party ought to have such knowledge but did not. Moreover, they must have this knowledge at the time of the conclusion of the contract.

[Folsom, Gordon & Spanogle state that "Where carriage of the goods is not 'involved', the buyer may or may not be told where the goods are or will be. Absent a contrary provision in the contract, in such a transaction if buyer is told the location of the goods, he is expected to pick them up at that location; otherwise at seller's place of business. Under Article 31(b) and (c) seller's obligation is to put the goods 'at buyer's disposal' at the appropriate place. The Convention is not clear as to whether this requires notification to buyer, but it would require notification to any third party bailees to allow buyer to take possession." International Business Transactions in a Nut Shell, 3d ed.,West (1988), p. 85.]

In other cases, subparagraph (c)

14. In other cases, not covered by subparagraphs (a) and (b), the seller's obligation to deliver consists of placing the goods at the buyer's disposal where the seller had his place of business at the time of the conclusion of the contract. If the seller had more than one place of business, the place at which delivery is to be made is governed by article 9(a) [draft counterpart of CISG article 10(a)].

15. 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 article 29 [draft counterpart of CISG article 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.

Placed at the disposal of the buyer

16. Goods are placed at the disposal of the buyer when 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.

17. 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.

Effect of reservation of title

18. Delivery is effected under this article and risk of loss passes under article 79, 80 or 81 [draft counterpart of CISG article 67, 68 or 69] even thought he seller reserves title to the goods or otherwise reserves an interest in the goods if such reservation of title or other interest is for the purpose, inter alia, of securing the payment of the price [see footnote 4]. (OFFICIAL RECORDS, pp. 29-30).


FOOTNOTES

1. Article 28 [draft counterpart of CISG article 30]. Buyer's remedies for seller's breach are set forth in article 41 [draft counterpart of CISG article 45].

2. Article 45(1)(a) [draft counterpart of CISG article 49(1)(a)]. For the effect of a fundamental breach by seller on the passing of the risk of loss, see article 82 [draft counterpart of CISG article 70].

3. E.G. see Incoterms [(1976)], FOB condition A.2; CIF condition A.4. ("Incoterms", ICC publication No. 274).

4. Article 79(1) [draft counterpart of CISG article 67(1)] provides, inter alia, "The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of risk."


Pace Law School Institute of International Commercial Law - Last updated August 29, 2006
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