Bis, lektion 2 cisg
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Transcript of Bis, lektion 2 cisg
Ulla Terese Kræmer
BUSINESS LAW Ulkr@easj .dk
lesson two
Today's topic:
CISG, part III
Obligations of the Parties
The substantial rules of sales
A sale implies that property is transferred from one owner to another against payment
An international sale is when seller and buyer have their place of business in different states.
DEFINITION OF A SALE
In consumer sales
By auctions
On stocks, shares ect.
Of ships, aircrafts etc.
CISG DOES NOT APPLY:
Seller: To deliver, handing over papers – chapter II
At the right time (when?) In the right place (where?) The right quality and amount (what?)
Buyer: to pay, taking delivery – chapter III
At the right time (when?) In the right place (where?) The right amount (what?)
OBLIGATIONS OF THE PARTIES
No help in CISG
”The seller’s actions to bring the goods in the buyer’s possession,
including handling over documents.”
DEFINITION OF DELIVERY?
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)
RIGHT TIMEWHEN?
Art. 31
The agreed place (according to the contract)
Consignment sale: Handing the goods over to the fi rst foreign carrier (passing of risk)
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
IN THE RIGHT PLACEWHERE TO DELIVER?
Art. 35Conformity of the goods
The agreed quality/amount – art 35(1) (warrants or guarantees – a matter of words)
Oral agreements The parol evidence rule: ”Once a written agreement has been duly executed (signed) then it
cannot be altered or annulled by any oral evidence that may contradict the terms of the agreement”
in contrary to Art. 8 and 11 in CISG
Conclusion Art. 8 and 11 require only due consideration
THE RIGHT QUALITY/AMOUNTWHAT TO DELIVER?
Markedsføringsøkonomi | Erhvervsret10
Basic qualities Defi nition of quality/conformity – art 35(2)
Fit for the purposes – bowling balls must be suitable for bowling etc. – resalable – ordinary use – compliance with regulatory standards in the buyer’s country
Fit for the specific purpose the seller knew – Sometimes buyer use the goods in an unusual way and if the seller knows this, he must deliver the goods which can be used for this purpose
Similar to the sample/model that the seller presented to the buyer
Packaged: in a usual manner – adequate to protect the goods
QUALITY/CONFORMITY – ART 35(2)
Seller’s failure of preformance:
Delay: Delivery too late or no delivery at all
Defects: Actual defects – quality or quantity
Defective title (third party claims):
Legal defects – sale of goods with third person’s right
SELLER’S BREACH OF CONTRACT
Markedsføringsøkonomi | Erhvervsret12
SELLER’S BREACH OF CONTRACT
• Art. 45-52
Definition of Seller’s Breach of Contract, art. 45(1)
”If the seller fails to perform any of his obligation under the contract or this convention, the buyer may:
• Exercise the rights provided in art. 46-52• Claim damages as provided in art. 74-77
Markedsføringsøkonomi | Erhvervsret13
What will you do, if the contract does not specify neither the time nor place
of delivery?
QUESTION FOR YOU:
Markedsføringsøkonomi | Erhvervsret14
BREAK
The seller is liable for any lack of conformity which exists at the time when the risk passes to the buyer – even if the defect is fi rst discovered much later
Burden of proof?
Time for notice in case of non-conformity?
1. Reasonable time: Buyer must inform the seller within reasonable time after he has – or ought to have – discovered the defect. (art. 39(1))
2. Examination: Buyer are obliged to inspect the goods – most courts require the buyer to move quickly (art. 38)
3. Two years of notice (limitation period) – cut of rule – after that time the buyer is barred from a non-conformity claim against the seller. (Art. 39(2))
NOTICE OF NON-CONFORMITY
Reasonable intensive examination
Random sampling
Stress test
The more expensive - the greater intensivitetNot expect the buyer to uncover defects discoverable only by experts
INTENSITY OF EXAMINATION?
Specificity requirement
”poor workmanship” - ”improper fi tting”
But timely notice of a serious non-conformity which do not initially specify the defect with suffi cient precision – the buyer schould be given a chance to provide supplementary specifi cation
Art. 40 can be used in situations where the result will be unfair for seller – a narrow ”safty valve” – used in exceptional circumstances
Art. 44 ”safty valve” for courts/arbitral tribunal if a buyer have reasonable excuse for failing to notifi the seller in accordance with art. 39(1)
SPECIFY THE NATURE OF THE LACK OF CONFORMITY
What are Third-party claims?
It’s a legal defect, since the buyer dos not get the full title to the goods
The mere assertion by a third party of such claim constitutes a breach by seller
The buyer must notice the seller in ”reasonable” time – art. 43
FREE OF THIRD-PARTY CLAIMS ART. 41
Payment and taking delivery – art. 53
At the right time – when?
At the agreed time
When seller is placing the goods at his disposal or documents are handed over
Art. 58 + 59
OBLIGATIONS OF THE BUYER, WHEN?
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, WHERE?
Payment of the right sum
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…”
Open price term: If an open-price contract is pheld, because the parties intended to be bound, the price-gab can be filled bu the price ”generally charged” at the time of the conclusion of the contract.
OBLIGATIONS OF THE BUYER, WHAT?
Obligation to receive the goods – art. 60
Refusal of receipt = Breach af contract
Arrangement of payment: e.g. documentary credit
Examination of the goods – art. 38
OBLIGATIONS OF THE BUYER
All the acts in order to enable the seller to make delivery
Taking over the goods
Obligatet to accept the seller’s performance
– if not = breach of contract
OBLIGATIONS OF THE BUYER TO TAKE DELIVERY
BREAK
. Delivery is a ”crucial point” of a sale!
Who should pay in the event taht the goods are lost, damaged or destroyed?
Delivery is decisive for:
Passing of the risk – art. 67-69
Delay
Defects – art. 36
PASSING OF RISK
Who is carrying the risk of accidental loss?
(damage or destruction of the goods)
Delivery and passing of the risk generally ”go together” – art. 66-70
Delivery
Seller’s risk Buyer’s risk
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
MarkedFoeign
PASSING OF THE RISK
INCOTERMS (THE INTERNATIONAL CHAMBER OF COMMERCE)
The risk passes when the buyer actually takes over the goods(as in a retail outlet)
Collect within a given period?
The risk will not pas until the period has passed
In a warehouse (a place other than seller’s place) within a given period?
Before the period has passedRemember identifi cation of the goods!
NON-CARRIER CASES ART. 69
What is a fundamental breach?1. Work in 5 groups for 15 minutes, describe the concept of a
fundamental breach – please put your names on the paper .2. Give your reply to another group - and so on – until your reply have
been to all 5 groups3. When you receive another group's reply – you have 5 minutes to add
additional points
4. I will then copy the 5 documents and give you a copy to the next lesson, where we will be reviewing “remedies for breach”
FUNDAMENTAL BREACH?
SEE YOU NEXT WEEK