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Rights and Obligations of the Seller and Buy er

Sellers Obligations

A seller must correspond to the terms of the contract as agreed upon by the parties to the contract. [1] 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". [2] 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. [3] It must be noted; the passing of ownership is not regulated by
the CISG but is governed by domestic law. [4] Case law establishes that courts will facilitate the actions of
the parties to establish obligations but will limit recovery for failure to fulfil obligations. [5] 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)). [6] 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. [7] 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. [8] 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. [9] 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. [10] 

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. [11] 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. [12] For example, a provision in a contract regarding cost of freight fails to establish
derogation from Article 31(a) CISG. 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. [13] 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. [14] 

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 undertaken the obligation to carry out the carriage of goods."[T]he seller
has performed his duty to deliver the goods even where they do not meet their description or are defective
in other respects" under subsection (a) of Article 31 CISG and the risk of loss passes at such time. [15] 

It must be highlighted, if there are no specific or indentified goods, Article 31(c) CISG then provides that
the seller has the obligation to place the goods at the buyer’s disposal at the sellers place of business.
Often referred to as the “residue clause," Article 31(c) CISG lays down the principle that the seller must
perform where its place of business is at the time of conclusion of the contract. [16] The seller’s delivery
obligation is satisfied by placing the goods at the buyer’s disposal at the seller’s place of
business. [17] Furthermore this duty to offer the goods ready and fit for carriage includes all necessary
packaging. [18] 

Furthermore, it must be highlighted that there are no provisions under the CISG, dealing specifically with
the passing of title. The Convention concerns itself with risk rather than title. Title is therefore left to
national law and, when it is necessary to determine which national law applies one refers to the rules of
private international law (Article 7(2) CISG). It is significant, moreover, that the CISG under Article 67(1)
adds: “the fact that the seller is authorised to retain the documents controlling the disposition of the
goods does not affect the passage of risk".

Article 32 CISG supplements Article 31 CISG when the sale involves carriage of goods. In accordance with
Article 32 CISG, there must be identification of the goods by the fixing of labels or the address of the
receiver if the goods are not clearly identified by markings on the goods, by shipping documents or
otherwise, and the seller is required to provide the buyer notice of the consignment specifying the
goods. [19] As per Article 67(1) CISG, when these conditions have been met, the risk passes to the buyer
at the point of handing over the goods to the first carrier. If the seller is bound to arrange for carriage of
goods, Article 32 (2) CISG provides that the seller must make such contracts that are necessary for
carriage to the place fixed by means of transportation appropriate in the circumstance and according to
the usual terms for such transportation. [20] 

Sellers Delivery of Documentation

Based on party autonomy, the terms of the contract control this issue and can range form documents of
title, bills of lading, warehouse receipts, insurance policies, invoices, certificate of origin, and certificate of
control or quality. [21] Therefore, if a seller is bound to hand over these types of documents that relate to
the goods, the seller must hand them over at the time and place, and in the form as required by the
contract. [22] 

However, courts have found that documentation may be in essence waived if the buyer fails to provide
notice of nonconformity pursuant to Article 39(1) [23] CISG or if the actions of buyer mandate that the
seller hand over “delivery orders" instead of other documentation. [24] Under Article 34 CISG, if the seller
has handed over documents before that time, he may, up to that time, cure any lack of conformity in the
documents, if the exercise of this right does not cause the buyer unreasonable inconvenience or
unreasonable expense. [25] However, the buyer retains any right to claim damages as provided under the
CISG.

Time for Delivery

The time for delivery of the goods is of the essence under the CISG, because the obligation of the buyer to
pay for the goods arises upon delivery. Article 33 CISG provides for three circumstances regarding time of
delivery. Under subsection (a) of Article 33 CISG, the seller is under duty to deliver the goods on the date
“fixed or determinable from the contract"; [26] Article 33 (b) CISG provides that the seller must deliver the
goods on any date within the period so fixed, “unless circumstances indicate that the buyer is to choose a
date" within that period. [27] If the date cannot be ascertained due to ambiguity or absence in a contract,
courts will determine whether the seller delivered the goods within a reasonable time after the conclusion
of the contract. [28] In determining ‘reasonable time’, regard must be given to the “nature of goods, the
distance covered, and the parties’ statements during negotiations". [29] 

Furthermore, a breach of an obligation under Article 33 CISG qualifies as a fundamental breach in light of
Article 25 [30] CISG if the parties had agreed upon a fixed delivery date and if both parties are clearly
aware of the fact that delivery should take place at that certain date. Hence, time must be of the essence
or equivalent language. A fundamental breach can occur for non-deliverance, delivery after stated date, or
failure to deliver after additional time is given provided said time is reasonable. [31] However, it must be
stressed a buyer’s tolerance of the late delivery may be considered equivalent to the granting of an
“additional period of time" and thereby precluding buyer from declaring avoidance under Article 49
CISG. [32] 

Conformity of the Goods

At the heart of many international sale transaction disputes is the question whether the goods delivered
conform to the contract. Article 35 CISG is at the very core of the CISG and presents a unified approach on
the obligations of the seller in respect of the goods delivered to the buyer. [33] 

Accordingly, Article 35(1) CISG provides that “the seller must deliver goods which are of the quantity,
quality and description required by the contract and which are contained or packaged in the manner
required by the contract". [34] Thus the decisive factor for determining whether the goods conform to the
contract is the contractual description of the goods. The characteristics are therefore not based on
objective standards of quality but rather on the denomination and description of the required quality in the
contract. [35] In one illustrative CISG case [36] on Article 35(1) CISG, a Turkish company had promised to
deliver 1,000 tons of fresh cucumbers to a buyer doing business in Germany, but the seller allegedly
delivered less than that amount. Since the CISG applied, the seller was obligated to deliver goods of the
quantity required by the contract, and thus delivery of less than 1,000 tons constituted a contractual
breach.

However, if the parties have not agreed otherwise, the goods only conform with the contract if they are fit
for the purposes for which goods of the same description would ordinarily be used (Article 35(2) (a)
CISG). In essence, under the CISG, the presumption is that goods “are fit for the purpose for which goods
of the same description would ordinarily be used" and are “fit for any particular purpose expressly or
impliedly made known to the seller at the time of the conclusion of the contract". [37] However, this
presumption is subject to an express agreement among the parties to the contrary. [38] 

Furthermore, it must be stressed goods do not conform with the contract unless they are fit for any
particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the
contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for
him to rely, on the seller’s skill or judgement. [39] A seller will also breach its obligation if the goods do not
possess the qualities held out to the buyer in a sample or model (Article 35(2)(c) CISG), or if the goods are
not packaged in a manner used for goods or that is adequate to preserve and protect the goods (Article
35(2)(d CISG).

It must be highlighted, if the buyer had knowledge or could have been aware of any lack of conformity at
the conclusion of the contract; the seller is not liable for breach of contract (Article 35(3) CISG). In
addition, if the buyer fails to adhere to the procedural requirements of the CISG, courts will dismiss a
buyer’s claim of nonconformity. [40] Although, it must be stressed the burden of proof is on the buyer to
slow lack of conformity. [41] 

Buyer’s Obligations

The characteristics of an international sale of goods contract consists of the obligation of the seller
delivering the goods and transfer the property in the goods to the buyer, which for its part agrees to pay
the price for the goods and take delivery of them. [42] The primary “obligation of a buyer under the
contract of sale is to pay the price for the goods delivered". [43] According to Article 6 CISG, a buyer is
under the obligation to pay the purchase price at the deadline agreed and to take delivery of the goods. In
lack of a contrary provision in the contract, place of performance shall be the seller’s place of business. In
addition to these duties, pursuant to Article 38 CISG, a buyer must examine the goods or cause them to be
examined. Further, in cases of nonconformity, the seller must be notified within a reasonable period of
time in pursuant to Article 39 CISG.

Payment and Take Delivery

The CISG regulates international sale of goods, which can be defined as a contract by which the seller
agrees to deliver the goods and transfer the property in the goods to the buyer, which for its part agrees
“to pay the price for the goods and take delivery of them". [44] This approach is consistent with the
understanding that the seller and the buyer have reciprocal obligations toward concluding sales
contracts. [45] According to Article 6 CISG a buyer is obliged to pay the purchase price at the deadline
agreed and to take delivery of the goods. Where there is no express agreement in the contract between the
parties, Article 53 CISG provides that the “buyer must pay the price for the goods and take delivery of them
as required by the contract and this Convention". [46] Proof of delivery is established by means of seller
testimony, or invoices as copies of an export bill of lading, as well as communications and/or agreement
between the parties. [47] Courts have concluded that this evidence in the field of commerce and general
life experiences confirms that it is very likely that the buyer received exactly the goods that were ordered
and for which the invoice was sent. [48] 

Furthermore, it can be said a buyer’s obligation to pay the price of the goods also includes taking such
steps and complying with such formalities as may be required under the express terms of the contract as
well as any laws and regulations to enable payment to be made (Article 54 CISG). As such, failure to
establish a letter of credit, make payment, or comply with terms of a contract is failure by the buyer to
meet its primary “obligation to pay the price" as prescribed by Article 54 CISG. [49] 

Take Delivery

In parallel with a buyer’s duty to pay, a buyer also has a duty to take delivery. [50] This obligation consists
in carrying out all the acts that could reasonably be expected of a buyer in order to enable the seller to
make delivery and in taking over the goods. [51] Further, preparatory measures ‘such as the provisions of
plans or data, are also part of the cooperation required of the buyer since ultimately they serve to enable
the seller to make delivery". [52] Should the buyer fail to possession of the goods when delivered, the seller
is required to care for the goods until the buyer takes delivery. The buyer is thereafter liable to reimburse
the seller for all reasonable expenses relating to the upkeep of the goods (Articles 85 & 87 CISG).

Buyer’s Obligation upon Delivery

Pursuant to the provisions of the CISG, a buyer must examine or have goods examined within a period as
short as practical under the circumstances and if defects are found it must notify the seller about them
within a reasonable period of time, exactly stating the kind of deficiency (Article 38(1) & 39(1) CISG). The
CISG requires “examination and notice to be distinguished and kept separate, even when the facts of the
case would permit them to be combined into a single period for giving notice". [53] Further it must be
stressed that “the close link between Articles 38 and 39 CISG does not, however, lead to the conclusion to
recover for defective goods, the buyer must previously inspect them. In fact, lack of inspection by the
buyer does not necessarily involve the loss of the right to rely on the lack of conformity of the goods, as
long as the defects are notified (to the seller) in a timely manner, that is, before ‘a reasonable period’ has
elapsed". [54] Finally it must be noted, “[i]t is up to buyer, who received the goods without reservation, to
provide evidence of the alleged nonconformity," as well of the fact that this nonconformity existed before
the risk passed to the buyer. [55] Where the buyer has failed to provide evidence and notice of non-
conforming goods, he will lose the right to rely on lack of conformity. [56] 

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