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Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods

Professor Jacob S. Ziegel, University of Toronto
July 1981

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Article 39

(1) The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.

(2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee.

COMMENT

1. Both limbs of art. 39 have no counterparts in the provincial Acts, but the principle underlying art. 39(1) has been adopted in UCC 2-607.

2. Art. 37(1). The motivating force behind art. 39(1) is the belief that the seller will be substantially prejudiced if he is not notified of the non-conformity within a reasonable time after the buyer knew or ought to have discovered it. A similar provision often appears in the contract itself. Note however that proof of actual prejudice to the seller is not required in art. 39(1).

3. The absence of a notice requirement in the provincial Acts has not attracted adverse comment from Canadian merchants. Again, American courts operating under the Uniform Sales Act showed growing reluctance to apply the requirement to consumer transactions. A similar difficulty may arise under art. 39 with respect to non-merchants generally who may not be aware of the statutory requirement. Its adoption must tend to encourage litigation. I am not therefore enthusiastic about art. 39(1). However, the Americans have long had a similar requirement and one can hardly argue that it is alien to the common law world. Moreover, the exclusion of consumer transactions from CISG will remove many, though by no means all, of the past difficulties.

4. Art. 39(2). From a common law perspective this is quite a novel provision. The provincial Sale of Goods Acts do not contain any prescription periods for the bringing of an action by the seller or buyer and do not impose a time limit after which the buyer is precluded from complaining about a delivery of non-conforming goods. The only limitation is that imposed in the provincial Limitations Acts, which generally require an action for breach of contract to be brought within 6 years. [However, in at least one Province shorter periods have been recommended in recent proposals to revise the Limitations Act.] Art. 39(2), it will be noted, cuts off all rights of the buyer after two years.

5. Art. 39(2) attracted much debate at Vienna. Some delegations wanted to omit it altogether or at least to provide substantial room for relief when it would operate harshly. Other delegates felt however that sellers needed to know where they stood and that two years was long enough to enable the buyer to discover the non-conformity and make his complaint. It was this school of thought that won the day and the only concession made was the one that now appears in art. 44. Art. 44 extends the period of time for giving notice of a non-conformity where the buyer has "a reasonable excuse" for his failure to give earlier notice. However, art. 44 only applies to art. 39(1) notices and it does not affect the prescription period in art. 39(2).

6. I remain unenthusiastic about art. 39(2). It is not difficult to conceive of circumstances in which an important defect in the goods may not come to light more than 2 years after they have entered the stream of commerce. I am particularly concerned because many Canadian importers may not appreciate the presence of art. 39(2) and the need to exclude it in their contract if they do not wish it to apply.

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Pace Law School Institute of International Commercial Law - Last updated April 23, 1999
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