Please enable JavaScript.
Coggle requires JavaScript to display documents.
Week 5: Obligations of Seller and Buyer under CISG - Coggle Diagram
Week 5: Obligations of Seller and Buyer under CISG
Seller Obligations
Art 35
The seller must deliver the conforming goods "of the quantity, quality, description and packaged in the manner required by the contract..."
Goods do not conform unless they are:
Fit for ordinary purpose
FIt for the purpose made expressly or impliedly known to the S at the time of the conclusion of the contract, unless...
Posses the qualities of the goods in sample
Packaged in a manner adecquate to preserve and protect the goods
S is liable for non - conformity that exists at the time the risk passes, even if the non - conformity is not apparent until later on
S is liable for non - conformity that arises after the risk passes only is it is due to a breach of S' obligations that ocusrred before the risk passed to the buyer
Art 30
To deliver goods and hand over any documents of title
Art 33
To deliver goods and or by the date fixed or determinable in contract or within a reasonable period after the conclusion of the contract
Art 41-42
Deliver goods free from any third party rights
Buyer Obligations
Art 53
Must pay for goods and take delivery as agreed in the contract and under provisions of CISG
Art 55
To pay the price at the end of the time agreed
Art 58
B does not have to pay until B has inspected the goods. Unless otherwise agreed or procedures for payment indicate otherwise
Art 38
B must inspect the goods on a short a period as practicable and where goods are n-c, B must give notice of n-c to S in a reasonable time
B loses right of action for breach of contract if B does not inspect the goods / provide notice to S of any n-c within a reasonable period of time (art39). Notice must cearly specify the nature of the non conformity
S cannot rely on b's failure to notify, if S knew of the lack of conformity when goods were delivered
If B can show reasonable excuse as to why the goods were not inspected / notice not provided in reasonable time, then B may still be able to claim damages
What is a " short period as predictable" / "reasonable period of time"
Chicago Prime v Northam (courts agreed with Chicago Prime)
Rear View Mirrors case. It couldnt have been apparent that the electrical mirrors werent functional until installed months later
CISG Framework for remedies and fundamental breach
Availability of remedies reflects the aim of the CISG " to preserve the contract", which takes into account the costs and the inconvencience of terminated contracts and returns of goods
Therefore, the remedies available depend on the nature and seriousness of the breach. There are two tiers of remedies
Fundamental breach
If there is a fundamental breach the remedies of avoiding the contract and demanding substitute goods are available
Corrective remedies and damages are available for any breach (both fundamental and non fundamental)
Remedies include
Avoid / Terminate contract (arts 49 & 64 (see also 51))
B can demand replacement goods (46(2))
Corrective remedies (table 1)
S can volunteer to replace goods (46(3))
B can reduce price (50)
B can provide S with more time (47 & 63)
S has the right to "make up" shortcomings of an early delivery (37)
S can "complete" specifications of an order (65)
S may make up /remedy/ repair order (48)
S or B can "suspend" the contract in some circs (71)
Injured party can claim damages (74 & 77)
Additional damages. provisions (74 - 77)
Avoiding the contract is also available for anticipatory fundamental breach (72 ,73)
A breach is fundamental if: "Results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not forsee and a reasonable person of the same kind in the same circumstances would not have forseen such a result"
Determine by a two part test
Has it resulted in substantial deprivation of what a party is entitled to expect under contract? and
This focuses on the degree of detriment suffered by the injured party measured against what was agreed in the contract
eg. delivery of non conforming goods will always result in a breach of contract, but when is it fundamental?
Did the party in breach forsee and would a reasonable person of the same kind in same circumstances forsee that the breach would cause substantial deprivation?
There is no fundamental breach if the seller can show that they or a reasonable seller in the same circ would not have forseen that the results of their breach would substantially deprive the B of what they were entitled to expect
Focus is on wether the substantial negative impact of the breach is forseeable