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GUIDE TO CISG ARTICLE 86

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 86 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 75 [draft counterpart of CISG article 86].

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 75 of the 1978 Draft and CISG article 86 are substantially identical.


Text of Secretariat Commentary on article 75 of the 1978 Draft
[draft counterpart of CISG article 86]   [Buyer's obligation to preserve goods]

PRIOR UNIFORM LAW

ULIS, article 92.

COMMENTARY

1. Article 75 [draft counterpart of CISG article 86] sets forth the buyer's obligation to preserve goods which he intends to reject.

2. Paragraph (1) provides that if the goods have been received by the buyer and he intends to reject them, he must take reasonable steps to preserve them. The buyer may retain those goods until he has been reimbursed his reasonable expenses by the seller.

[Honnold notes: "The term 'reject' has not appeared earlier in the Convention; this broad term is used here to assure that the buyer's duty to preserve the goods will apply whenever the buyer may refuse to accept the goods -- i.e., 'reject' them. Thus, a buyer's declaration that the contract is avoided because of the tender of seriously defective goods (arts. 25, 26, 49) terminates buyer's obligation to 'take delivery' of the goods (arts. 53, 60(b)); in other words the buyer may 'reject' the goods. Similar consequences follow from avoidance after the buyer has received the goods (art. 81(2)). Under article 46(2) when non-conformity of the goods constitutes a fundamental breach the buyer may 'require delivery of substitute goods', a remedy that involves rejection and return of the initial delivery. Pursuant to article 51 all these remedies that amount to 'rejection' may be applied to a 'part of the goods'." John O. Honnold, "Uniform Law for International Sales under the 1980 United Nations Convention", 2d ed., Kluwer Law International (1991), p. 581.]

[Enderlein & Maskow state: "The view was expressed at the diplomatic conference that the right to reject the goods is given only when there are the prerequisites for an avoidance of the contract or for the right to delivery of substitute goods [OFFICIAL RECORDS, p. 399] ... These are in particular the cases of articles 49 and 46, paragraph 2, but probably also of articles 72 and 73, hence without any doubt the most important and typical applications. From an overall point of view, however, this approach is too narrow for article 52. It grants a right to refuse to take delivery of the goods, which is not linked with an avoidance of the contract, but which also leads to a right to rejection in the event of early and excess delivery. The right to suspension of obligations under article 71 could lead to a right to rejection, e.g. when the buyer refuses to take over, as agreed, to partial deliveries before he has a security for that the rest will also be delivered. Therefore, we have in another context (... article 60) interpreted the right to reject the goods in broader terms, so to speak, as an expression of general principles that underlie the Convention and are reflected in the cited articles. Article 86, however, does not offer an independent basis for the ascertainment of a general right to rejection because of a breach of contract. Barrera Graf [Bianca-Bonell Commentary, p. 621] nonetheless seems to hold such a view. Such a right has to be provided for in the Convention or in a contract." Fritz Enderlein & Dietrich Maskow, "International Sales Law" [Enderlein & Maskow Commentary], Oceana (1992), p. 355.]

3. Paragraph (2) provides for the same result where goods which have been dispatched to the buyer have been placed at his disposal at their destination and he exercises his right to reject them [see footnote 1]. However, since the goods are not in the buyer's physical possession at the time he exercises his right to reject them, it is not as clear that he should be required to take possession of them on behalf of the seller. Therefore, paragraph (2) specifies that the buyer need take possession only if "he can do so [this can be done] without payment of the price and without unreasonable inconvenience or unreasonable expense" and only if the seller or a person authorized to take charge of the goods for him is not present at the place of destination.

4. Paragraph (2) is applicable only if goods which have been dispatched to the buyer "have been placed at his disposal at their destination." Therefore, the buyer is obligated to take possession of the goods only if the goods have physically arrived at their destination prior to his rejection of them. He is not obligated to take possession of the goods under paragraph (2) if before the arrival of the goods he rejects the shipping documents because they indicate that the goods do not conform to the contract.

[Enderlein & Maskow state: "It is spelled out in the Secretariat's Commentary ... that the buyer need not take possession of the goods when he has already rejected the documents. We believe that there is no reason for doing that. On the contrary, when the rest of the conditions are fulfilled, he may be obligated to take possession of the documents in order to be able to take charge of the goods." Enderlein & Maskow Commentary, p. 356.]

Example 75A: After the goods were received by Buyer he rejected them because of their failure to conform to the contract. Buyer is required by article 75(1) [draft counterpart of CISG article 86(1)] to preserve the goods for the Seller.

Example 75B: The goods were shipped to Buyer by railroad. Prior to taking possession, Buyer found on examination of the goods that there was a fundamental breach of the contract in respect of their quality. Even though Buyer has the right to avoid the contract under article 45(1)(a) [draft counterpart of CISG article 49(1)(a)], by virtue of article 75(2) [draft counterpart of CISG article 86(2)] he is obligated to take possession of the goods and to preserve them, provided that this may be done without payment of the price and without unreasonable inconvenience or unreasonable expense and provided that Seller or a person authorized to take possession on his behalf is not present at the place of destination.

Example 75C: The contract provided for delivery on CIF terms. When the bill of exchange was presented to Buyer, he dishonoured it because the accompanying documents were not in conformity with the contract of sale. In this example Buyer is not obligated to take possession of the goods for two reasons. If the goods have not arrived and been put at his disposal at the place of destination at the time Buyer dishonours the bill of exchange, the provisions of article 75(2) [draft counterpart of CISG article 86(2)] do not apply at all. Even if article 75(2) [draft counterpart of CISG article 86(2)] were to apply, because Buyer could take possession of the goods only by paying the bill of exchange, he would not be required by article 75(2) [draft counterpart of CISG article 86(2)] to take possession and preserve the goods [see footnote 2] (OFFICIAL RECORDS, p. 72).


FOOTNOTES

1. Para. (2) states that the buyer "must take possession of [the goods] on behalf of the seller". Once possession is taken, the obligation to preserve the goods arises out of para. (1).

[Enderlein & Maskow state: "The obligation to preserve the goods does not apply ... when the payment term 'cash against documents' is used. The case in which the goods can be obtained only against payment is in our view identical to the one in which security will have to be procured as a condition for the taking possession of the goods, e.g. 'documents against acceptance.' When the payment was made earlier, e.g. from a letter of credit, or when it is not tied to the taking possession of the goods, an obligation to preserve the goods will arise." Enderlein & Maskow Commentary, p. 357.]

2. Compare Example 74B [found in Secretariat Commentary on article 74 [draft counterpart of CISG article 85].


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