CISG

Acceptance:

Article 18 (1) A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance. (2) An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise. (3) However, if, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price, without notice to the offeror, the acceptance is effective at the moment the act is performed, provided that the act is performed within the period of time laid down in the preceding paragraph.

Acceptance with Conflicting Terms:

Article 19 (1) A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer. (2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance. (3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.

Late Acceptance:

Article 21 (1) A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect. (2) If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without delay, the offeror orally informs the offeree that he considers his offer as having lapsed or dispatches a notice to that effect.

1) Delivery Nature / place

Article 31 If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists: (a) if the contract of sale involves carriage of the goods—in handing the goods over to the first carrier for transmission to the buyer; (b) if, in cases not within the preceding subparagraph, the contract relates to specific goods, or unidentified goods to be drawn from a specific stock or to be manufactured or produced, and at the time of the conclusion of the contract the parties knew that the goods were at, or were to be manufactured or produced at, a particular place—in placing the goods at the buyer's disposal at that place; (c) in other cases—in placing the goods at the buyer's disposal at the place where the seller had his place of business at the time of the c onclusion of the contract.

1) Delivery Carriage

Article 32 (1) If the seller, in accordance with the contract or this Convention, hands the goods over to a carrier and if the goods are not clearly identified to the contract by markings on the goods, by shipping documents or otherwise, the seller must give the buyer notice of the consignment specifying the goods. 10 United Nations Convention on Contracts for the International Sale of Goods (2) If the seller is bound to arrange for carriage of the goods, he must make such contracts as are necessary for carriage to the place fixed by means of transportation appropriate in the circumstances and according to the usual terms for such transportation. (3) If the seller is not bound to effect insurance in respect of the carriage of the goods, he must, at the buyer's request, provide him with all available information necessary to enable him to effect such insurance.

1) Delivery Time

Article 33 The seller must deliver the goods: (a) if a date is fixed by or determinable from the contract, on that date; (b) if a period of time is fixed by or determinable from the contract, at any time within that period unless circumstances indicate that the buyer is to choose a date; or (c) in any other case, within a reasonable time after the conclusion of the contract.

1) Delivery Documents

Article 34 If the seller is bound to hand over documents relating to the goods, he must hand them over at the time and place and in the form required by the contract. 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. However, the buyer retains any right to claim damages as provided for in this Convention.

Exceptions to the rule: As mentioned, the consequences of not giving notice are drastic - the complete loss of remedy. There are two exceptions:

1) Art. 40: The fraudulent party is never protected by the CISG, in this case a seller who knew of the nonconformity or could not have been unaware cannot require a buyer to give notice. 2) Art. 44: Where a "reasonable excuse" is present, the buyer may retain the right to claim a reduction in price. THIS IS ALL, no other remedies are retained. There is as yet very limited use of 44 in case law, which is unsurprising.

Structure

1) Identify contracts 2) Goods in contract (arts 2) 3) Choice of law 1(1)(A), 1(1)(B) 4) Reservations 5) Formation (offer, acceptances etc) 6) Duties of buyer 7) Duties of the seller (conformity) 8) Breach (type of breach/effect) 9) Remedies (Avoidance, Damages, Curing, Qualifying)

Reservations of the CISG

1) Reservations which may prohibit the application of the CISG: -Art. 93; the CISG may not extend to all the territories of a Federal State. -Art. 94; the CISG may not apply between States who reciprocally agree this. -Art. 95; the CISG cannot apply through Art. 1.1.(b), only 1.1(a). It says that any state may declare that they are not bound by 1(1)(b) ( art 1). If they are not bound by 1(1)(b) then they are not bound by the rules on international private law. Countries that chose this reservation = US, China , Slovakia, Singapore. This means that if there is dispute for example with America and a non CISG country the courts find that American law is applicable then they do not apply the CISG, but if it is with a CISG country and the courts find that American law is applicable then CISG is applied. The New York courts are not bound by 1(1)b. Not every country understands art 95 in the same way, e.g. Germany, 2) Reservations which limit the application of the CISG: -Art. 92; where either Part II or Part III is excluded. This reflects the fact that the CISG is a "double-convention", embodying both the ULF (formation) and ULIS (substantive regulations), and it is possible to ratify only one aspect. 3) Reservations which alter the content of the CISG: -Art. 96; where Art. 11 on oral contracts can be made inapplicable, requiring writing.

Article 11 (contract does not need to be in writing, unless reservation 96)

A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses. See Art. 96 reservation = where Art. 11 on oral contracts can be made inapplicable, requiring writing.

Exemptions

A person is not liable for failure to perform if this is due to an impediment beyond his control, rendering the performance impossible. This impediment is what we understand under force majeure. (Art. 79)

Article 23

An international contract of sale comes into existence "when the acceptance of an offer becomes effective in accordance with the provisions of the Convention"

Offer:

Article 14 (1) A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price. (An offer is a definite expression of the offeror's will (intention to be bound), addressed to one or more specific persons. ) (2) A proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary is clearly indicated by the person making the proposal. (A proposal that is not addressed to one or more identified persons is only an offer if this is clearly indicated) The sending of price lists, catalogues and the placing of advertisements and the like are in principle not offers (cf. Hungarian Supreme Court, September 25, 1992 (1993) ZEuP 79).

Withdrawing the Offer:

Article 15 (1) An offer becomes effective when it reaches the offeree. (2) An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer. "Reaches" is defined in Art. 24. -'For the purposes of this Part of the Convention, an offer, declaration of acceptance or any other indication of intention "reaches" the addressee when it is made orally to him or delivered by any other means to him personally, to his place of business or mailing address or, if he does not have a place of business or mailing address, to his habitual residence.'

Revoking the Offer:

Article 16 (1) Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance. (2) However, an offer cannot be revoked: (a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or (b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

2) Conformity of the goods

Article 35 (1) 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. (2) Except where the parties have agreed otherwise, the goods do not conform with the contract unless they: (a) are fit for the purposes for which goods of the same description would ordinarily be used; I. United Nations Convention on Contracts for the International Sale of Goods 11 (b) 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 and judgement; (c) possess the qualities of goods which the seller has held out to the buyer as a sample or model; (d) are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods. (3) The seller is not liable under subparagraphs (a) to (d) of the preceding paragraph for any lack of conformity of the goods if, at the time of the conclusion of the contract, the buyer knew or could not have been unaware of such lack of conformity.

to examine the goods

Article 38 (1) The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances. (2) If the contract involves carriage of the goods, examination may be deferred until after the goods have arrived at their destination. (3) If the goods are redirected in transit or redispatched by the buyer without a reasonable opportunity for examination by him and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch, examination may be deferred until after the goods have arrived at the new destination.

The key elements of Article 39(1) are timeliness and specificity.

Article 39 (1) The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it. (2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time limit is inconsistent with a contractual period of guarantee.

3) Rights and claims of third parties.

Article 41 The seller must deliver goods which are free from any right or claim of a third party, unless the buyer agreed to take the goods subject to that right or claim. However, if such right or claim is based on industrial property or other intellectual property, the seller's obligation is governed by article Article 42 (1) The seller must deliver goods which are free from any right or claim of a third party based on industrial property or other intellectual property, of which at the time of the conclusion of the contract the seller knew or could not have been unaware, provided that the right or claim is based on industrial property or other intellectual property: I. United Nations Convention on Contracts for the International Sale of Goods 13 (a) under the law of the State where the goods will be resold or otherwise used, if it was contemplated by the parties at the time of the conclusion of the contract that the goods would be resold or otherwise used in that State; or (b) in any other case, under the law of the State where the buyer has his place of business. (2) The obligation of the seller under the preceding paragraph does not extend to cases where: (a) at the time of the conclusion of the contract the buyer knew or could not have been unaware of the right or claim; or (b) the right or claim results from the seller's compliance with technical drawings, designs, formulae or other such specifications furnished by the buyer.

Buyers Remedies Specific performance remedy

Article 46 (1) The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement. (2) If the goods do not conform with the contract, the buyer may require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under article 39 or within a reasonable time thereafter. (3) If the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard to all the circumstances. A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter.

Buyers Remedies Additional period for performance

Article 47 (1) The buyer may fix an additional period of time of reasonable length for performance by the seller of his obligations. (2) Unless the buyer has received notice from the seller that he will not perform within the period so fixed, the buyer may not, during that period, resort to any remedy for breach of contract. However, the buyer is not deprived thereby of any right he may have to claim damages for delay in performance Article 48 (1) Subject to article 49, the seller may, even after the date for delivery, remedy at his own expense any failure to perform his obligations, if he can do so without unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. However, the buyer retains any right to claim damages as provided for in this Convention. (2) If the seller requests the buyer to make known whether he will accept performance and the buyer does not comply with the request within a reasonable time, the seller may perform within the time indicated in his request. The buyer may not, during that period of time, resort to any remedy which is inconsistent with performance by the seller. (3) A notice by the seller that he will perform within a specified period of time is assumed to include a request, under the preceding paragraph, that the buyer make known his decision. (4) A request or notice by the seller under paragraph (2) or (3) of this article is not effective unless received by the buyer.

Buyers Remedies avoidance of the contract

Article 49 (1) The buyer may declare the contract avoided: (a) if the failure by the seller to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or (b) in case of non-delivery, if the seller does not deliver the goods within the additional period of time fixed by the buyer in accordance with paragraph (1) of article 47 or declares that he will not deliver within the period so fixed. (2) However, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided unless he does so: (a) in respect of late delivery, within a reasonable time after he has become aware that delivery has been made; (b) in respect of any breach other than late delivery, within a reasonable time: (i) after he knew or ought to have known of the breach; (ii) after the expiration of any additional period of time fixed by the buyer in accordance with paragraph (1) of article 47, or after the seller has declared that he will not perform his obligations within such an additional period; or (iii) after the expiration of any additional period of time indicated by the seller in accordance with paragraph (2) of article 48, or after the buyer has declared that he will not accept performance.

Buyers Remedies reduction of price

Article 50 If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time. However, if the seller remedies any failure to perform his obligations in accordance with article 37 or article 48 or if the buyer refuses to accept performance by the seller in accordance with those articles, the buyer may not reduce the price.

Buyers Remedies Remedies for partial delivery

Article 51 (1) If the seller delivers the goods before the date fixed, the buyer may take delivery or refuse to take delivery. (2) If the seller delivers a quantity of goods greater than that provided for in the contract, the buyer may take delivery or refuse to take delivery of the excess quantity. If the buyer takes delivery of all or part of the excess quantity, he must pay for it at the contract rate.

1) Delivery Premature delivery / excessive quantity

Article 52 (1) If the seller delivers the goods before the date fixed, the buyer may take delivery or refuse to take delivery. (2) If the seller delivers a quantity of goods greater than that provided for in the contract, the buyer may take delivery or refuse to take delivery of the excess quantity. If the buyer takes delivery of all or part of the excess quantity, he must pay for it at the contract rate.

1) Taking delivery

Article 53 The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention. Article 60 The buyer's obligation to take delivery consists: (a) in doing all the acts which could reasonably be expected of him in order to enable the seller to make delivery; and (b) in taking over the goods.

2) Payment of the price The obligation to pay covers four elements: (1) the determination of the price, (2) the place of payment and (3) the moment of payment, as well as (4) the method of payment.

Article 54 The buyer's obligation to pay the price includes taking such steps and complying with such formalities as may be required under the contract or any laws and regulations to enable payment to be made. Article 55 Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, 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 sold under comparable circumstances in the trade concerned. Article 56 If the price is fixed according to the weight of the goods, in case of doubt it is to be determined by the net weight. Article 57 (1) If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller: (a) at the seller's place of business; or (b) if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place. (2) The seller must bear any increase in the expenses incidental to payment which is caused by a change in his place of business subsequent to the conclusion of the contract. Article 58 (1) If the buyer is not bound to pay the price at any other specific time, he must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the 18 United Nations Convention on Contracts for the International Sale of Goods contract and this Convention. The seller may make such payment a condition for handing over the goods or documents. (2) If the contract involves carriage of the goods, the seller may dispatch the goods on terms whereby the goods, or documents controlling their disposition, will not be handed over to the buyer except against payment of the price. (3) The buyer is not bound to pay the price until he has had an opportunity to examine the goods, unless the procedures for delivery or payment agreed upon by the parties are inconsistent with his having such an opportunity. Article 59 The buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or compliance with any formality on the part of the seller.

Sellers remedies (same as buyers remedies)

Article 61 (1) If the buyer fails to perform any of his obligations under the contract or this Convention, the seller may: (a) exercise the rights provided in articles 62 to 65; (b) claim damages as provided in articles 74 to 77. (2) The seller is not deprived of any right he may have to claim damages by exercising his right to other remedies. (3) No period of grace may be granted to the buyer by a court or arbitral tribunal when the seller resorts to a remedy for breach of contract.

Sellers remedies Specific performance

Article 62 -but also see art 28 The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement.

Sellers remedies Additional period for performance

Article 63 (1) The seller may fix an additional period of time of reasonable length for performance by the buyer of his obligations. (2) Unless the seller has received notice from the buyer that he will not perform within the period so fixed, the seller may not, during that period, resort to any remedy for breach of contract. However, the seller is not deprived thereby of any right he may have to claim damages for delay in performance.

Sellers remedies Avoidance/rescission of the contract (have to make a notice of this avoidance under art 26, effects of avoidance art 81-84) Damages 74-77

Article 64 (1) The seller may declare the contract avoided: (a) if the failure by the buyer to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or (b) if the buyer does not, within the additional period of time fixed by the seller in accordance with paragraph (1) of article 63, perform his obligation to pay the price or take delivery of the goods, or if he declares that he will not do so within the period so fixed. (2) However, in cases where the buyer has paid the price, the seller loses the right to declare the contract avoided unless he does so: (a) in respect of late performance by the buyer, before the seller has become aware that performance has been rendered; or (b) in respect of any breach other than late performance by the buyer, within a reasonable time: (i) after the seller knew or ought to have known of the breach; or (ii) after the expiration of any additional period of time fixed by the seller in accordance with paragraph (1) of article 63, or after the buyer has declared that he will not perform his obligations within such an additional period. Article 65 (1) If under the contract the buyer is to specify the form, measurement or other features of the goods and he fails to make such specification either on the date agreed upon or within a reasonable time after receipt of a request from the seller, the seller may, without prejudice to any other rights he may have, make the specification himself in accordance with the requirements of the buyer that may be known to him. (2) If the seller makes the specification himself, he must inform the buyer of the details thereof and must fix a reasonable time within which the buyer may make a different specification. If, after receipt of such a communication, the buyer fails to do so within the time so fixed, the specification made by the seller is binding.

1) Taking delivery Passing of risk if contract involves carriage if goods in transit,

Article 66 Loss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller. Article 67 (1) If the contract of sale involves carriage of the goods and the seller is not bound to hand them over at a particular place, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer in accordance with the contract of sale. If the seller is bound to hand the goods over to a carrier at a particular place, the risk does not pass to the buyer until the goods are handed over to the carrier at that place. The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of the risk. (2) Nevertheless, the risk does not pass to the buyer until the goods are clearly identified to the contract, whether by markings on the goods, by shipping documents, by notice given to the buyer or otherwise. (1) If under the contract the buyer is to specify the form, measurement I. United Nations Convention on Contracts for the International Sale of Goods 21 Article 68 The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller. Article 69 (1) In cases not within articles 67 and 68, the risk passes to the buyer when he takes over the goods or, if he does not do so in due time, from the time when the goods are placed at his disposal and he commits a breach of contract by failing to take delivery. (2) However, if the buyer is bound to take over the goods at a place other than a place of business of the seller, the risk passes when delivery is due and the buyer is aware of the fact that the goods are placed at his disposal at that place. (3) If the contract relates to goods not then identified, the goods are considered not to be placed at the disposal of the buyer until they are clearly identified to the contract. Article 70 If the seller has committed a fundamental breach of contract, articles 67, 68 and 69 do not impair the remedies available to the buyer on account of the breach.

Anticipatory breaches

Article 71 (1) A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of: (a) a serious deficiency in his ability to perform or in his creditworthiness; or (b) his conduct in preparing to perform or in performing the contract. (2) If the seller has already dispatched the goods before the grounds described in the preceding paragraph become evident, he may prevent the handing over of the goods to the buyer even though the buyer holds a document which entitles him to obtain them. The present paragraph relates only to the rights in the goods as between the buyer and the seller. (3) A party suspending performance, whether before or after dispatch of the goods, must immediately give notice of the suspension to the other party and must continue with performance if the other party provides adequate assurance of his performance.

Anticipatory Breach (fundamental breach)

Article 72 (1) If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided. (2) If time allows, the party intending to declare the contract avoided must give reasonable notice to the other party in order to permit him to provide adequate assurance of his performance. (3) The requirements of the preceding paragraph do not apply if the other party has declared that he will not perform his obligations.

a delivery by instalments breach

Article 73 (1) In the case of a contract for delivery of goods by instalments, if the failure of one party to perform any of his obligations in respect of any instalment constitutes a fundamental breach of contract with respect to that instalment, the other party may declare the contract avoided with respect to that instalment. (2) If one party's failure to perform any of his obligations in respect of any instalment gives the other party good grounds to conclude that a fundamental breach of contract will occur with respect to future instalments, he may declare the contract avoided for the future, provided that he does so within a reasonable time.

Mitigation

Both buyer and seller must minimize a loss to their business partner Article 77 A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated.

Does it govern English law?

England is not a party to the convention so it is not applicable we have English law instead.

Fundamental Breaches / avoidance

For the choice of remedy it is important to know whether there is a so-called "fundamental breach of contract" (Art. 25). A fundamental breach of contract has three elements: • There has to be a detriment. • The detriment must substantially deprive the non-breaching party. • The result of the breach must be foreseeable. If there is a fundamental breach, the non breaching party is entitled to "avoid" the contract

Article 10

For the purposes of this Convention: (a) if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract; (b) if a party does not have a place of business, reference is to be made to his habitual residence.

Specificity A number of cases on specificity of the notice of lack of conformity have rejected notices framed simply in general terms -- "not in order," "defective quality or delivery of wrong goods", "inferior and poor quality", "poor workmanship", or general expressions of dissatisfaction ("not as we imagined") -- have been held insufficient

In Bundesgerichshof of 3 November 1999, the German Supreme Court stated: "By means of Article 39(1), pursuant to which the buyer must specify 'the nature of the lack of conformity', the seller shall be enabled to get an idea of the lack of conformity in order to take the necessary steps. In that context, the buyer, in any case, must specify the deviation of quality. Concerning machinery and technical equipment, only an explanation of the symptoms can be demanded, not an explanation of the underlying cause. Here the buyer gave notice to the seller . . . that a customer had found steel splinters in semi-finished tissue that had been produced using the grinding device and that, as a result, when processing the goods into moist tissues, patches of rust occurred. At the same time, the buyer expressed the suspicion that the grinding device delivered on April 7, 1993 was defective . . . Thus, the lack of conformity of the shipment was sufficiently specified in accordance with the buyer's state of knowledge at that time, so that the seller was able to learn . . . the delivery item as well as the lack of conformity with the contract."

'Timeliness' The definition of "reasonable time" has varied greatly over the past decade of transnational CISG practice.

In Oberster Gerichtshof of 27August 1999, the Supreme Court of Austria stated that the short period for the examination depends on the size of the buyer's company, the type of goods which have to be examined (this case involved a purchase of trekking shoes), their complexity and perishable nature. The physical and mental elements of the facts of the concrete case have to be considered, in particular buyer's personal and business situation, characteristic features of the goods, the quantity of goods delivered, the type of legal remedy selected. The court held: - Although the periods for the examination to be made and for the notice to be given have to be judged less rigidly than pursuant to the Austrian Commercial Code [§ 377 HGB ("immediately"), the reasonable periods pursuant to the CISG are not long periods; and that - The reasonable period pursuant to Article 39 CISG has to be adapted according to the circumstances. Insofar as no specific -- above mentioned -- circumstances speak for a shorter or longer period, one has to start from a total period of approximately 14 days for the examination and notice. In Cour de Cassation of 26 May 1999, a quantity of laminated sheets was delivered on 28 October 1992, some tests were conducted between 9 and 11 November 1992, faxes were exchanged with seller's agent on 16 and 19 November 1992, and notice of lack of conformity provided on 1 December 1992. The Supreme Court of France affirmed a ruling of the Cour d'appel d'Aix-en-Provence of 21 November 1996 which held that the buyer of the laminated sheets who took forty days to examine them "has caused the goods to be examined within a short and normal time given the heavy handling the sheets required and the irreducible time imposed by the check" and that buyer had brought the defects to the seller's attention dans un délai raisonable, within the reasonable time required by Article 39(1) CISG. In Bundesgerichtshof of 3 November 1999, a case involving machinery for the manufacture of tissues, the Supreme Court of Germany set one month as its "regular" benchmark period. In a recent commentary on the case, this was regarded as a welcome relaxation of harsher standards set in earlier lower court decisions, with the commentator, nevertheless, pointing out: - "The reasonableness of the period depends mainly on the goods, but also on the type of the business and other circumstances. For certain goods, significantly shorter notice periods are advocated and applied by the courts; of course, these shorter periods must also not be misunderstood as standard periods. In the case of perishable goods or goods whose price fluctuates greatly, the buyer's right to give notice within four weeks would put the seller at an unreasonable disadvantage (compare Court of Appeals of Saarbrücken 3 June 1998 (flower business: 'on the same day'); Court of Appeals of Düsseldorf 8 January 1993 (cucumbers: 'seven days was already untimely'). - "Also in the case of an unambiguous identification of the defect, for example by experts, a faster reaction by the buyer could be 'reasonable" (in the case at issue, he gave notice three days after receipt of the expert's opinion!). But above all, when applying international uniform law, the Federal Court of Germany ("BGH") cannot, as it can for German law, claim the last word and suggest with the term 'regular' a ruling with precedential effect; instead, it must -- Article 7(1) CISG -- in the interest of keeping legal uniformity, consider how foreign case law and legal scholars interpret the reasonable period.

"Curing" the breach

Not all breaches are going to be so fundamental as to justify avoidance. And even if they are, a buyer or a seller may, for purely economic reasons, decide not to avoid the contract. The CISG therefore gives to a buyer (Art. 47) or a seller (Art. 63) the possibility to the other side to have more time to comply with their obligations; i.e. to grant the other side a period to cure the breach. However, If it becomes clear that the seller is not going to fulfill his obligations, the buyer may then suspend or rescind the contract; qualifying the breach for avoidance regardless of the initial fundamentality of the breach. Art. 48 also gives the seller the right to remedy his own breaches: The seller has a right to cure "any failure to perform his obligations" (including of course a failure to deliver conforming goods) and he can do so not only as in English law, before the time fixed for performance (Article 37), but also after (Article 48).

Obligations of the seller

Obviously, transfer property & documents But under the CISG the seller MUST also: 1) Deliver goods, which are 2) conforming, and 3) free of 3rd party rights.

Structure of the CISG

Preamble: = a series of statements of why they decided to enter the convention, it explains the objective and purpose of the treaty. The preamble of the treaty is not binding in law. But when it comes to interpreting the other provisions, which are binding, we can relate them back to the preamble. Part I: General Rules of the Convention. Arts. 1-5 concerns the application; Arts. 6 & 9 explain the hierarchy (the 3 C's: Contract, Custom, Convention), Arts. 7 - 8 the interpretation and gap-filling. Part II: Formation of Contract. Offer, acceptance, revocation, Part III: Substantive Rules: Obligations of the Buyer and the Seller, non-conformities, delivery, notices, remedies, etc. Part IV: Rules of ratification and entry into force, including the reservations. NOTE that the reservations are significant!

Buyers Remedies:

Specific performance - Article 46 Additional period for performance -Article 47, 48 Avoidance/rescission of the contract- (art 49) -art 2, effects of avoidance art 21-24 Reduction of Price -Art 50 Remedies for partial delivery - art 51 Damages -art 74-77

Open Price Contract:

The CISG does not require the price to be fixed for a contract to be valid. Implied or explicit provisions for determining the price must be contained in an offer for it to be definite (Art. 14), but a contract with no price is valid as Art. 55 determines the consequences of no price term agreed. (Parties are deemed to have an agreement at market price)

Nachfrist

The Civil Code of Germany states that where there is a default by one party "the other party may give him a reasonable time within which to perform his part with a declaration that that he will refuse to accept the performance after the expiration of the period" (called a Nachfrist) may "withdraw from the contract". The CISG adopts a version of this concept.

Obligations of the buyer

The buyer MUST: 1) take delivery of the goods 2) pay the purchase price.

Article 5

This Convention does not apply to the liability of the seller for death or personal injury caused by the goods to any person.

Article 4

This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in this Convention, it is not concerned with: • (a) the validity of the contract or of any of its provisions or of any usage; • (b) the effect which the contract may have on the property in the goods sold.

Purpose

attempt at governing a uniform and harmonizing the rules applicable to international transactions.

1) Delivery

is the physical hand-over of goods to the buyer.

Breach

see below

Formation of the contract

see below

Article 2 - This Convention does not apply to sales: needs to have a contract for sales of goods not services

• (a) of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use; • (b) by auction; • (c) on execution or otherwise by authority of law; of stocks, shares, investment securities, negotiable instruments or • (d) money; • (e) of ships, vessels, hovercraft or aircraft; they are considered real estate in certain countries. • (f) of electricity. • St Albans District Council v International Computers ltd- tangible property being sold like a disc then it is sales of goods

Sphere of Application

• Article 1- (1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States: (only international) (a) when the States are Contracting States; (both countries have ratified) or (b) when the rules of private international law lead to the application of the law of a Contracting State. (where one of the parties hasn't ratified it but their Courts decide to use the CISG) (2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.