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Reproduced with permission from Suomalainen Lakimiesten Yhdistys: - Tidskrift utgiven av Juridiska Föreningen i Finland [Finnish Law Society] 126 (1990) 327-343

excerpt from

Obligations of the Buyer under the Vienna Convention on the International Sale of Goods [*]

Leif Sevón, Director General, jur.lic.

(. . .)

Article 55 caused considerable difficulties during the elaboration of the Convention and still seems to do so. Article 55 deals with the problem how to calculate the price if a validly concluded contract does not fix the price or make provisions for determining it. In such cases the parties are considered to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.

Article 55 causes particular difficulties in relation to Article 14. Article 14 deals with offers. According to it a proposal for concluding a contract of sale constitutes an offer only if it fixes or makes provisions for determining the price. One may ask, how can one envisage a contract of sale if there has been no proposal sufficiently definite to constitute an offer.

Obviously, a contract can be concluded through other mechanisms than those indicated in Part II of the Convention on formation of contracts. Accordingly, one may distinguish between the requirements for an offer and those for a contract.

First, let's have a look at the situations, in which the relation between Article 55 and Article 14 may cause problems. This is certainly not the case in the vast majority of large contracts. In those, the question on price is usually dealt with in detail. This is also the case with most contracts in writing. A large majority of the oral contracts do also contain provisions on the price. Even if the parties have not explicitly agreed on the price there would seem to be a strong presumption in favour of the buyer's accepting the price appearing from the seller's price list.

Nevertheless, there seem to be some contracts where this is not the case. If goods are ordered urgently, e.g. spare parts for a machine [page 330] which has broken down, the price may have been left totally open. Let's assume that a ship has lost its propeller during a voyage and that a new one is urgently ordered from a nearby shipyard without any discussion whatsoever on the price. In such a case a rule according to which there is no contract if it does not at least provide a method for determining the price, may lead to odd results. In the example mentioned above there seems to have been no offer of the kind envisaged in Article 14. Nevertheless, the seller manufactured and delivered the propeller, the buyer took delivery of it, installed it and used it. Both parties would be surprised if told that there never was a contract.

It is not conceivable that a buyer who has taken delivery of the goods should be in the position to invoke the inexistence of the contract even if he would no longer need the goods. This would seem to apply also to any other such conduct of the buyer subsequent to the ordering of the goods, which would give the seller an impression of consent. This would seem to follow not only from good sense but also from the requirement of loyalty between the parties and from the need to promote good faith in international trade.

The problem would thus be reduced to the question whether the buyer could invoke the non-existence of a contract if doing so before expressing or indicating a consent to the existence of the contract, whether by taking delivery or in some other manner.

One way of resolving the problem would be by means of a fiction that there is some kind of understanding on what the buyer shall pay. But if you manage to construe a solution on the basis of such a fiction in a case where there have been no previous dealings between the parties, no price list on propellers exist etc., then you may have overcome even greater problems of construction than those provided by Article 55.

From a practical point of view, the problem might be solved in the following way. When dealing with buyers from countries requiring the price to be settled in, or determinable from the contract, sellers ought to be careful not to start production of the goods or dispatching them until the price has been agreed upon. Buyers, on the other hand, should be certain that the price has been agreed upon in order not to find themselves lacking remedies in case of delay in delivery by the seller. From a Nordic point of view the problem would be resolved [page 331] by making the law of one of the Nordic countries applicable to the question whether a contract has been concluded or not. This would seem to follow from making Nordic law applicable to the contract as a whole. As the Nordic countries have made a reservation in respect of Part II of the Convention Article 14 would not govern the conclusion of the contract, which in this respect would be governed by Nordic contract law. As a contract could validly be concluded without fixing or making provision for determining the price Article 55 would not cause problems of the kind referred to above.

Under Article 55 the buyer shall pay the price generally charged at the time of the conclusion of the contract. The seller is thus not entitled to claim the higher price of the time of delivery, unless he has ensured himself such a right under the contract. The price is to be determined on the basis of comparable contracts in terms of i.a. place of delivery and conditions of payment. The provision does not refer to the prices generally charged by the seller. It was felt important to eliminate the possibility of the seller charging excessive prices. If he does not, due account can also be taken of the prices charged by the seller.[page 332]

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Pace Law School Institute of International Commercial Law - Last updated January 27, 2000

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