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GUIDE TO CISG ARTICLE 82

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 67 of the 1978 Draft is quoted below with the article references contained in this commentary conformed to the numerical sequence of the Official Text, e.g., article 67 [draft counterpart of CISG article 82].

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 67 of the 1978 Draft and CISG article 82 are substantially identical.


Text of Secretariat Commentary on article 67 of the 1978 Draft
[draft counterpart of CISG article 82]   [Buyer's loss of right to avoid or to require delivery of substitute goods]

PRIOR UNIFORM LAW

ULIS, article 79.

COMMENTARY

Loss of Right by Buyer to Avoid or Require Substitute Goods, Paragraph (1)

1. Article 67 [draft counterpart of CISG article 82] states that "the buyer loses his right [the right] to declare the contract avoided or to require the seller to deliver substitute goods if it is impossible for him to make restitution of the goods substantially in the condition in which he received them".

[Enderlein & Maskow state: "Th[is] norm relates merely to the right of the buyer to avoid the contract." Fritz Enderlein & Dietrich Maskow, "International Sales Law" [Enderlein & Maskow Commentary], Oceana (1992) p. 346. In this vein, Barrera Graf indicates that the buyer retains the right to reduce the sales price under Article 50. Jorge Barrera Graf, "The Vienna Convention on International Sales Contracts and Mexican Law: A Comparative Study", 1 Ariz. J. Int'l & Comp. L. 150 (1982).]

2. The rule in paragraph (1) recognizes that the natural consequences of the avoidance of the contract or the delivery of substitute goods is the restitution of that which has already been delivered under the contract. Therefore, if the buyer cannot return the goods, or cannot return them substantially in the condition in which he received them, he loses his right to declare the contract avoided under article 45 [draft counterpart of CISG article 49] or to require the delivery of substitute goods under article 42 [draft counterpart of CISG article 46].

3. It is not necessary that the goods be in the identical condition in which they were received; they need be only in "substantially" the same condition. Although the term "substantially" is not defined, it indicates that the change in condition of the goods must be of sufficient importance that it would no longer be proper to require the seller to retake the goods as the equivalent of that which he had delivered to the buyer even though the seller had been in fundamental breach of the contract [see footnote 1].

[Enderlein & Maskow add that the buyer must, however, return the exact goods, not substitute goods. Enderlein & Maskow Commentary, p. 346. Tallon, on the other hand, believes that "if the goods are generic goods the buyer may always supply substitute goods" Denis Tallon, Bianca-Bonell Commentary, Guiffrè: Milan (1987), p. 608.]

Exceptions, Paragraph (2)

4. Paragraph (2) states three exceptions to the above rule. The buyer should be able to avoid the contract or require substitute goods even though he cannot make restitution of the goods substantially in the condition in which he received them (1) if the impossibility of doing so is not due to his own act or omission, (2) if the goods or part of them have perished or deteriorated as a result of the normal examination of the goods by the buyer provided for in article 36 [draft counterpart of CISG article 38], and (3) if part of the goods have been sold in the normal course of business or have been consumed or transformed by the buyer in the course of normal use before the lack of conformity with the contract was discovered or ought to have been discovered.

[The first exception does not apply if, due to buyer's "act or omission", it is impossible to make the required restitution. Honnold states: "This phrase also appears in articles 66 and 80 and in each setting poses this question: What standard governs whether an 'act or omission' is wrongful?

"Violations of obligations imposed by the contract and the Convention clearly make one responsible for the consequences. In the setting of article 82 when a buyer has received seriously defective goods does the 'act or omission' standard make the seller responsible whenever the goods (e.g.) are stolen or are damaged by fire or storm? Can the answer be developed from inferences drawn from the Convention or does domestic tort law apply?

"Invoking domestic law can undermine choices that are implicit in article 82. Suppose, for example, that domestic tort law makes one absolutely responsible for damage to goods while in one's custody or possession. This result may be appropriate for commercial warehouses or operators of motor vehicles but would be inconsistent with decisions of the Convention on the rights of a buyer who has received seriously defective goods. ... [S]ubparagraphs (2)(b) and (2)(c) are based on the premise that the aggrieved buyer's remedies should be strongly protected. This concern is also suggested by the nuanced language of subparagraph (2)(a); if the buyer's remedies were to be foreclosed whenever the defective goods are subject to casualty this sweeping result could have been stated simply and clearly. A less strict standard with respect to a buyer's responsibility for defective goods is also evidenced by the closely comparable provision of article 86(1): 'If the buyer has received the goods and intends to exercise any right under the contract or the Convention to reject them, he must take such steps to preserve them as are reasonable in the circumstances' -- a duty of reasonable care but not a standard of absolute liability for loss.

"On the other hand, suppose that domestic tort law imposes little or no responsibility for care. This approach may be appropriate when one is asked gratuitously to hold another's goods but is not appropriate to the duties owed to the other party to a consensual transaction -- especially in an international sale when the party whose goods are at risk is in another country. ...

"Basing the standard on provisions of the Convention rather than domestic tort law supports these values: (1) The solution is more likely to be appropriate to the needs of international sales. (2) In addition, this approach conforms to article 7(1)'s mandate to interpret the Convention with regard 'to its international character and to the need to promote uniformity in its application,' and responds to article 7(2)'s invitation to settle questions not expressly settled in the Convention 'in conformity with the general principles on which it is based ....'." John O. Honnold,"Uniform Law for International Sales under the 1980 United Nations Convention", 2d ed., Kluwer Law International (1991), pp. 566-568.]

The third exception "preserves the buyer's remedies when the buyer has sold or consumed the goods -- a result that may seem surprising since the buyer may have received benefits from the goods. However under article 84(2) ... the buyer 'must account to the seller' for the benefits it has received." Id. at 566.]

5. A fourth exception to the rule states in article 67(1) [draft counterpart of CISG article 82(1)] is to be found in article 82 [draft counterpart of CISG article 70] which states that if the seller has committed a fundamental breach of contract, the passage of the risk of loss under article 79, 80 or 81 [draft counterpart of CISG article 67, 68 or 69] does not impair the remedies available to the buyer on account of such breach [see footnote 2] (OFFICIAL RECORDS, p. 58).

[Enderlein & Maskow believe that if restitution becomes impossible after the buyer has declared the contract avoided, one should proceed "analogously to how one would have proceeded before the declaration of avoidance." Enderlein & Maskow Commentary, p. 346. Another matter they address is the situation in which "the buyer himself is in a position to restitute the goods in the manner required, but ... he is prevented from doing so because of foreign trade rules". They state: "The right to avoid the contract remains in our view untouched, but its realization may be thwarted insofar as concurrent restitution (article 81, paragraph 2) cannot be made. This may also happen when the price cannot be refunded. Applying the underlying legal idea of article 71 ... we are of the opinion that an avoidance is blocked when it is clear that there can be no concurrent restitution." Id. at 347.]


FOOTNOTES

1. The buyer may require the delivery of substitute goods under article 42 [draft counterpart of CISG article 46] or, with the exception of article 45(1)(b) [draft counterpart of CISG article 49(1)(b)], declare the avoidance of the contract only if the seller is in fundamental breach of the contract.

2. See para. 2 of the commentary to article 82 [draft counterpart of CISG article 70].


Pace Law School Institute of International Commercial Law - Last updated August 30, 2006
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