Issues Expressly Regulated by Cisg

Topics: Contract, Contractual term, Breach of contract Pages: 8 (3211 words) Published: April 22, 2013
The first sentence of Article 4 CISG defines broadly the two main areas of law governed by the CISG, the “formation of the contract” and the “rights and obligations of the seller and the buyer”.  The wording of the first sentence of Article 4 has been criticised as being too narrow, since it does not mention matters clearly covered by the Convention such as the interpretation of statements regulated in Article 8 or the modification of contracts mentioned in Article 29.9 At the same time, matters which are considered in many jurisdictions to relate to the formation of contracts are not covered by the Convention. Sellers Obligations

A seller must correspond to the terms of the contract as agreed upon by the parties to the contract.  In the absence of said terms a seller “must deliver the goods, hand over any documents relating to them and transfer the property in the goods, as required by the contact”.  These obligations would include, but not be limited to, the following: a seller delivering the goods, providing any documentation, and transferring the property but not the passing of title.  It must be noted; the passing of ownership is not regulated by the CISG but is governed by domestic law.  Case law establishes that courts will facilitate the actions of the parties to establish obligations but will limit recovery for failure to fulfil obligations. The obligations of performance of a seller under a contract are set forth under Articles 31-34 CISG. Time and Place of Delivery

In practice, time and place of delivery are often agreed to by the parties via the contract or by a subsequent Purchase Order (Kling & Freitag GmbH v. Societa Reference Laboratory S.r.1. (2004)).  These terms are of essence, as they not only serve for business purpose but place of delivery is relevant under the CISG because it determines the passage of risk and conformity of goods.  In some states it also determines jurisdictional issues. Therefore, Article 31 CISG governing the seller’s duty to deliver applies only if the parties did not agree on a specific place for a delivery. Parties’ contractual autonomy prevails over Article 31 CISG. Further, a party asserting a verbal agreement as to place of delivery has the burden of establishing the terms based on Articles 8 or 9 CISG. However, if various documents are exchanged between the parties with different terms or there is a verbal agreement coupled with party practice based on Article 8 CISG that still fails to resolve this issue, courts have resorted to Article 31 CISG to establish the place of performance of the seller’s duty to deliver the goods.  Seller’s Delivery of Goods

Article 31 CISG establishes the standard of performance by the seller. Where the parties have agreed upon a place of delivery in a contract, then the implicit language in Article 31 CISG provides that the seller is bound to deliver to this place. In essence, this test can be established via physical evidence, for example, a contract or verbal testimony and other evidence facilitating Articles 8 and 9 CISG. Hence, Article 31 CISG, which determines the place of “delivery,” applies only if the parties have not stipulated otherwise to delivery. For example, a provision in a contract regarding cost of freight fails to establish derogation from Article 31(a). If however, the seller is not bound by the terms of a contract and the contract of sale involves carriage of the goods, delivery consists in handing the goods over to the first carrier for transmission to the buyer. The seller has the obligation to deliver the goods and delivery consists in handing them to an independent carrier. The obligation of the seller is fulfilled upon transfer to the first carrier.  Further, it must be noted, failure to present evidence of delivery by lack of signature of buyer can forfeit rights of seller to payment. In essence, liability for carrier’s failure to perform will not lie with the seller unless the seller has contractually...
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