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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 68

The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller.

COMMENT

1. Article 68 deals with the time for the transfer of risk of loss where the goods are sold in transit. The draft version of the article provided that the risk of loss was assumed by the buyer from the time the goods were handed over to the carrier who issued the documents controlling their disposition. This departure from the control test was justified in the [Secretariat] Commentary (p.203) on the practical ground that it is normally difficult to determine the precise moment in time when goods in transit suffered casualty and that it is more convenient for the buyer to pursue a claim for such loss or damage against the carrier and the insurance company than it is for the seller.

2. The retroactivity rule was opposed at Vienna by a number of countries and a compromise was struck. The adopted version of art. 68 prima facie only transfers the risk from the time of the conclusion of the contract, but "if the circumstances so indicate" the transfer of risk may be deemed retroactive to the date of shipment. The article does not indicate what circumstances will satisfy the displacement of the ordinary rule but it is clear that it does not require an express agreement and in practice, especially in documentary sales, a finder of fact may readily draw the implication.

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