International Sales

CISG, Part III

Obligations and Remedies
 CISG, Part III:
• Chapter I: General provisions: art. 25 – 29
• Chapter II: Obligations of the Seller, art.
30 – 52
• Chapter III: Obligations of the Buyer, art.
53 – 65
• Chapter IV: Passing of Risk
• Chapter V: Provisions Common to the
Obligations of the Seller and the Buyer,
art. 71 - 88
 Definition of a sale
• A sale implies that property is transferred
from one owner to another via payment

• An International sale is when seller and

buyer have their place of business in
different states
 Classification of Sales
According to:
1) Parties: a. Commercial sale (B to B)
b. Consumer sale (B to C)
c. Private sale (e.g. P to P)
2) Items: a. Specific
b. Generic
3) Delivery: a. Cash and carry (over the counter)
b. Delivery sale
c. Consignment sale
4) Payment: a. Cash sale
b. Credit sale
 CISG
• CISG does not explicitly classify like the Danish
Sales Act

• CISG does not apply:

- in consumer sales
- on stocks, shares etc.
- of ships, aircrafts etc.
 Obligations of the parties:
• Seller: to deliver, handing over papers
- at the right time (when?)
- in the right place (where?)
- the right quality and amount (what?)

• Buyer: to pay, taking delivery

- at the right time (when?)
- in the right place (where?)
- the right amount (what?)
 CISG, Part III:
• Chapter II: Obligations of the Seller, art.
30 – 52
• Sec. I: Delivery of the Goods and Handing
over Documents, art. 31 – 34
• Sec. II: Conformity of the Goods and Third
party Claims, art. 35 – 44
• Sec. III: Remedies for Breach of Contract
by the Seller, art. 45 - 52
 Obligations of the Seller:
Delivery:

The seller’s actions to bring the goods in

the buyer’s possession, including handing
over documents.

No definition of delivery in CISG!

Art. 30 - 34
 Obligations of the Seller:
• In the right place (where to deliver?)

- the agreed place (according to the contract)

CISG art. 31:

- Consignment sale: handing the goods over to
the first foreign carrier

- Placing the goods at buyer’s disposal in seller’s

place of business or the place where the goods
were at the conclusion of the contract
 Obligations of the Seller:
• At the right time: (when to deliver?)

• CISG art. 33:

- on the agreed time
- if a period of time has been agreed, seller
decides when to deliver within the period
- or else within reasonable time (estimate)
 Obligations of the Seller:

Seller shall deliver goods in the right quality

(conformity) and amount (art. 35.1)
 Obligations of the Seller:

Definition of conformity (art 35.2):

•are fit for the ordinarily purposes
•are fit for any particular purposes
•possess the qualities as per model or sample
•are contained or packaged in the usual
manner
 Obligations of the Seller:
Defective title

Seller shall deliver goods free of third party

rights or claims (art. 41)
 Seller’s Breach of Contract:
Seller’s failure of performance:

• Delay:
- delivery too late or no delivery at all

• Defects (lack of conformity):

- actual defects – quality or quantity

• Defective title (third party claims):

- ‘legal defects’
 Seller’s Breach of Contract:
• CISG art. 45 – 52
• Art. 45. 1:
”If the seller fails to perform any of his
obligations under the contract or this
convention, the buyer may:
a. exercise the rights provided in art. 46 –
52
b. claim damages as provided in art. 74 –
77”
Buyer’s Remedies in Event of
Seller’s Breach of Contract
Delay:

• Affirm - and claim delivery within a reasonable

additional period of time, art. 46.1 + art. 47

• Avoidance (rescission), art. 49 ( only if

fundamental, CISG art. 25 = of severe
inconvenience to a buyer) or no delivery
within additional period of time

• Claim damages (if economic loss is suffered)

art. 74 – 77 (exemption art. 79)
Buyer’s Remedies in Event of
Seller’s Breach of Contract
Damages:
• Strict liability (art. 74,1)
• Only foreseeable damages (art. 74,2)
• Claimant has obligation to mitigate the
losses (art. 77)
• Exemption from liability (art. 79):
• an impediment beyond his control and which
could not reasonably be expected (‘force
majeure’)
Buyer’s Remedies in Event of
Seller’s Breach of Contract
Defects (lack of conformity):
• Affirm, art. 46.1 and claim:
- replacement delivery, art. 46.2 (art. 25)
- subsequently delivery, art. 51
- repair, art. 46.3
- proportional reduction of the price, art. 50
or
• Avoidance, art. 49 (if fundamental, CISG
art. 25)
• Claim damages if economic loss is
suffered, art. 74 – 77 (exemption art. 79)
Sellers Right to Remedy/Cure

Seller has a right to remedy/cure (art. 48)

• if he can do so without unreasonable

delay and inconvenience
 Buyer’s Duty to Inspect and
Give Notice
• Buyer shall inspect the goods asap (art.
38)

• Buyer shall give notice on defects within a

reasonable time after he has or ought to
have discovered the defect.

• Notice shall be given at the latest after 2

years
 Obligations of the Buyer:
• Payment and taking delivery, art. 53, at
the right time: (when?)

- at the agreed time

- when seller is placing the goods at his

disposal (delivery)
 Obligations of the Buyer:
• Payment (and taking delivery) in the right
place: (where?)

- at the agreed place

- at seller’s place of business

art. 57
 Obligations of the Buyer:
• Payment of the right sum: (what?)

- the agreed sum

- Art. 55:
“.., the parties are considered, in the absence of any indication to
the contrary, to have impliedly made reference to the price
generally charged at the time of the conclusion of the contract for
such goods …”
Seller’s Remedies in Event of
Buyer’s Breach of Contract
• Affirm - and claim payment within a
reasonable additional period of time, art. 62
+ 63.1

• Avoidance – if fundamental, art. 64 and take

back the goods

• Claim damages – if economic loss, art. 74

77
 Preservation of the Goods:
• Art. 85 – 88

Seller’s obligations to preserve the goods

in case of buyer’s delay in taking delivery
 Anticipatory Breach

• When a party will not (or cannot) perform

his obligations at the due date (Art. 71 –
73

• The other party may suspend the

performance of his obligations
 Delivery/Passing of risk
• Delivery is a “crucial point” of a sale!

• Delivery is decisive for:

- passing of the risk, art. 67 - 69

- delay
- defects, art. 36
 Passing of the Risk
• Who is carrying the risk of the accidental loss?
(damage or destruction of the goods)

• Delivery and passing of the risk generally “go

together” - CISG art. 66 – 70

Delivery
________________I_______________

Seller’s risk Buyer’s risk

 Delivery/Passing of the Risk
Art. 67: Consignment sale:
The risk is passing to the buyer when the
marked goods are handed over to the first
foreign carrier
 Incoterms 2020

• If agreed transportation clauses they will influence the

passing of the risk

• The clauses are about costs and risk

- who is arranging the transport?
- who is paying for the transport?
- who is carrying the risk of the goods during transport?
 Incoterms 2020

1) EXW
2) FCA
FAS
FOB
3) CFR
CIF
CPT
CIP
4) DAP
DPU
DDP