Source: http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem10.html
Timestamp: 2019-04-20 02:52:51+00:00

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Published in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 6, pages 6-1 to 6-35. Reproduction authorized by Juris Publishing.
My lecture has as topic the obligations of the seller, and only the obligations of the seller, excluding the remedies in case of their breach. In order to make the seller's obligations clear, however, it will be inevitable every now and then to infringe upon Professor Ziegel's topic, namely, the field of remedies. I am not doing this in order to readopt the ULIS concept of providing for the buyer's remedies in close [page 6-1] connection with the respective regulations of the seller's obligations  -- which was criticized with good reason -- but because the United Nations Convention, unfortunately, does not fully carry out its own intent to make a clear distinction: In Chapter 2, section II, articles 35 to 44, the seller's obligation to deliver goods conforming to the contract is stated; yet articles 39, 43 and 44 deal with the buyer's remedies for non-conformity of the goods, in particular, with examination, notification and the consequences of failure to notify.
The substance of the seller's obligations is determined by what the parties have agreed upon. The Convention may be derogated from, a basic principle which is expressed in article 6 but is restated in a whole range of provisions on the seller's obligations, such as article 30 ("as required by the conttact"), article 32(1) ("in accordance with the contract") and article 35 ("required by the contract"). The reiteration of the principle of freedom of contract in some provisions involves the danger that lawyers inexperienced in dealing with codification might draw the conclusion e contrario: they might argue that other provisions constitute cogent law because they do not contain an explicit reservation for party autonomy. But I assume that this concern is unfounded, and that the basic principle of party autonomy can be made use of not only by individual agreements, but also by using standardized contract forms or referring to customary trade terms or designations from which follow more detailed provisions. Examples are the incorporation of Incoterms and similar national abbreviations, and also the reference to one of several contract texts familiar to the parties (for example, in the grain trade) by simply citing a certain call number, as is customary in some areas of international trade.
Of course, if the subject matter of a contract is described [page 6-2] in such summary formulas, the problem of divergent interpretations may arise. For this reason, the suggestion came up during the Vienna Conference to lay down a set of uniform rules of interpretation for the most important trade terms. This problem, however, could not be solved by the Conference and, in my opinion, it may be solved, just as any other interpretation problem, via article 8.
The proposition that the parties are free to agree on everything, and that the rules of the Convention are designated merely to fill gaps the parties may have left open, needs some qualification.
One limitation follows from the requirement that the object of the sales contract be sufficiently definite or at least determinable. A sales contract which does not fix or make provision for determining the goods sold has, in my view, not been validly concluded. This is not the result of any prohibition, but it follows from the rules on contract formation, since a proposal for concluding a contract which leaves the article of purchase open is not sufficiently definite to constitute a valid offer within the meaning of aticle 14(1). It is, therefore, not necessary to have recourse to a domestic law which may prohibit indefinite obligations in order to render such an obligation invalid via article 4(a).
The reference to article 4, however, indicates an important limit to party autonomy: Contracts which the national law forbids are invalid if this is the consequence prescribed by that law. If, for example, a national law declares a contract concluded in violation of an export ban to be void, then party autonomy is limited to that extent. A similar result should follow where a contract is subject to authorization by a government agency and this authorization is denied.
Difficulties arise, however, where domestic laws not only prohibit a certain provision but substitute a mandatory rule. [page 6-3] If, for example, a national law holds that the time and date of delivery may not be left to the seller's discretion and that, in case an indeterminate delivery date has been agreed upon, the seller is liable to deliver immediately, it is uncertain which rule should govern. We can start with the assumption that the time of delivery clause, according to the domestic law made applicable by article 4(a), is invalid. But whether this affects the entire contract will depend primarily on the national rule and its reach, and secondarily on the intention of the parties. Assuming that the contract is separable and the invalidity is limited to this single clause, we still have to find out whether the seller is now, according to the national rule, under an obligation to deliver immediately, or whether article 33(c), according to which he has to deliver within a reasonable time, controls. I think that the gap which has been created by application of the national rule is to be filled with provisions of the Convention. A domestic law which does not restrict itself to declaring certain clauses void but prescribes the content of international sale contracts would violate the Convention. In case of doubt, I think we should start out from the assumption that national laws are weaker and must yield to the international norm. Moreover, a national legislature which would adopt conflicting legislation would violate the obligations which its government has incurred by signing the Convention.
The same principles must govern if national laws set out to shape the seller's obligations in another respect, as when they prescribe certain standards to be met by the goods from which the parties may not deviate in domestic commerce. If, for example, sales contracts for medical drugs are subject under national law to mandatory requirements as to the composition of the drugs and the information carried on the packages or enclosures, parties engaged in international commerce may nevertheless agree otherwise by virtue of the Convention. Again, if a national law prescribes that the packaging of certain luxuries contain a warning of health [page 6-4] hazards, parties in international commerce have to be at liberty to agree on different packaging. It is quite another question, of course, whether a country that has adopted such rules would allow non-complying goods to be imported and distributed.
Even though, therefore, the seller's obligations can in principle be freely determined by the parties, and the Convention is applicable only so long as the parties have not come to an agreement or their agreement is invalid, we still have to clarify whether the rules on the seller's obligations have a function in addition to the filling of gaps. Please allow me a brief account of the German law to illustrate this problem. Over the past twenty years, our courts, like those of other countries, have increasingly sought tools and standards to control and to redress the imbalance arising from the use of preformulated standard contracts. In 1976 our legislature stepped in and passed the so-called Standard Terms Act which basically merely codified the results the courts had reached previously. The decisive problem for the courts, however, was not to develop control devices but to find the proper standards for control: Under what circumstances is a clause contained in a standard form so unconscionable that it has to be deemed invalid? To meet this problem, the German courts had ruled that the result depends upon how far the contractual stipulation deviates from the policy underlying the statutory regulation at issue. Applying this formula, the statutory regulation thus becomes the yardstick against which the stipulation is measured. Legal writers have also recognized that standard terms in international contracts must be judged by how far they depart from the statutory regulations of the Hague Uniform Sales Law (ULIS). The same will apply to the United Nations Convention if it comes into force in the Federal Republic. Let me explain this with a concrete example: If the seller's standard terms provide that the [page 6-5] buyer must give notice of any lack of conformity on the very same day he receives the goods lest he lose all remedies, then such a stipulation would depart so far from the policy of articles 39 and 44 that a German court would presumably declare this contract clause invalid under section 9(2) no. 1 of the Standard Terms Act, provided German law is subsidiarily applicable.
Thus, the Convention is not just a gap-filler. It may under certain circumstances also be a yardstick for the validity of clauses that the parties have not really agreed upon but that one has imposed upon the other through the use of standard terms or other means.
This sounds very much like the corresponding article 18 ULIS. But the two formulations -- "the seller must deliver the goods" (article 30 CISG) and "the seller shall effect delivery of the goods" (article 18 ULIS) -- are, so to speak, codificatory worlds apart. As is well known, ULIS attempted to encode in the one concept of délivrance a whole range of issues, such as performance and risk of loss, due date for payment of the purchase price (article 71 ULIS) and limitation of the seller's obligations to goods identified to the contract in case of a sale of unascertained goods. Although the questions of when the contract has been performed and when the risk has passed often require parallel answers, Ernst Rabel's idea -- which he worked out under the influence of Scandinavian models -- of solving these problems by the all-encompassing notion of délivrance was an argument for criticizing ULIS. UNCITRAL, therefore, abandoned this highly abstract and ill-defined concept (article 19 ULIS) at an early stage, and the Convention understands "delivery" in a purely descriptive sense; the legal meaning of the term is illustrated in the following provisions.
Article 30 not only obliges the seller to deliver, but also to hand over all documents relating to the goods and to transfer the property in them. How exactly this obligation to transfer the property is to be met lies beyond the scope of the Convention and is thus governed by domestic law. Domestic law, therefore, determines whether the property passes when the contract is concluded, which documents may be [page 6-7] necessary for the transfer of property, and so on. For certain provisions, there may arise quite complicated combinations of domestic law and obligations founded on the Convention: If the seller promises to transfer the property only after full payment of the purchase price, then this is primarily an admissible modification of his obligation under the Convention to transfer the property. The questions, however, whether the seller can retain title at all despite delivery of the goods, and whether title passes automatically with payment of the balance of the purchase price or whether another transfer act will be necessary, are subject to the regulations of domestic law. Particularly complicated may be those cases in which a reservation of title is stipulated in favor of the seller, not only to secure the balance of the purchase price, but also to secure other claims of the seller which are not subject to the Convention. Where there is such an agreement, it is doubtful whether and to what extent the seller's obligation to transfer the property is still governed by the Convention in the first place: An obligation to transfer the property against payment of all debts the buyer may still have -- such as those stemming from contracts of manufacture not subject to the Convention or from sales contracts dealing with the kind of goods mentioned in article 2 -- may constitute a security arrangement that bears little relation to a typical sale. It is quite conceivable that such a contract exceeds the boundary to financing agreements. If the seller, after the time within which the buyer has to make regular instalment payments has elapsed is not bound to transfer the property automatically but only upon the "buyer's" request, it is questionable whether the arrangement is an instalment sale at all, or whether it is really a lease not subject to the Convention.
It is not my topic here to analyze the scope of the Convention. As mentioned above, however, I wanted to show that far-reaching modifications of the seller's basic obligations to deliver and to transfer the property may bring [page 6-8] up the question whether we are still dealing with a sales contract within the scope of the Convention.
The obligation of the seller to deliver can be broken down to the following aspects: where, when and how.
As for the place of delivery, the Convention distinguishes between four possibilities and itself provides for three of these: It distinguishes between a contract involving carriage (article 31(a)) and one where the seller has to place the goods at the buyer's disposal at a certain place (article 31(b)). If the parties have elected neither alternative, the goods must be placed at the buyer's disposal at the seller's place of business. Beyond that, the first clause of article 31 provides for the possibility that the seller is bound to deliver "at any other particular place," in other words, at a place contractually agreed upon, which will be the case quite frequently.
In a number of instances, an agreement is entered into to the effect that the seller is bound to deliver at the buyer's place of business, a provision that may be stipulated by the Incoterm "delivery duty paid (place of buyer's business)." On the other hand, the place of business of the buyer's customer, to whom the buyer has already resold the goods, may be designated. In both cases the seller's obligation involves transporting the goods. If the goods are damaged in transit, the seller has breached the contract, which can trigger the remedies of articles 45 and following. In case of loss or damage in transit, the seller can ward off damage claims only if he can rely on article 79(1) where the carriage is performed by his own people, or on article 79(2) where he avails himself of an independent carrier. In such cases, the risk passes according to article 69. The contractual stipulation [page 6-9] of a delivery to the buyer's or his customer's place of business may have appeared to be so unusual to the drafters of the Convention -- who may primarily have considered overseas transactions -- that this "obligation to transport the goods to the buyer's place" has not been specifically provided for. Those who live close to a national border in Europe, however, are used to seeing trucks which haul goods from the manufacturer or wholesaler to the buyer and which the seller runs and operates specifically for this purpose.
The situation where the contract calls for the buyer to come for the goods, as contemplated in article 31(b), would seem much less frequent in international trade. On the one hand, this happens where the buyer, in the absence of alternative provisions in the contract, is bound to pick up specific goods such as a machine or a car at the place where the parties knew these were located at the time the contract was made. On the other hand, it may concern goods not yet identified or goods to be manufactured or produced which, in case of doubt, are to be placed at the buyer's disposal at the place where they are to be drawn from a stock or to be manufactured or produced; examples might be a certain quantity of rocks from a quarry, a certain quantity of wine from the next crop in a certain vineyard, and the like. In these cases, the assumption of a corresponding intention to be inferred from the parties' knowledge of the warehouse or place of manufacture (absent any different contractual provisions) is decisive for the buyer's obligation to come for the goods and for the location of the place to which the buyer is to come.
The seller has complied with his obligations in these cases when he places the goods at the buyer's disposal. While the seller has thus performed once he has "placed at buyer's disposal" and is no longer under an obligation to deliver, under article 69(1) the risk may pass at some later time. A [page 6-10] similar situation may arise when the seller has "placed at buyer's disposal" at a place other than his place of business, and the buyer does not yet know that the goods are ready to be picked up (article 69(2)). In these cases the seller's obligation is, in my view, terminated by performance; if the goods are destroyed, the seller does not have to deliver, nor can he claim the purchase price. If, after performance, the goods are destroyed other than accidentally, the seller may be liable for damages because of a violation of his duty under article 85 to preserve the goods as is reasonable in the circumstances.
Article 31(b) also applies to stored goods and goods at sea. In these cases, "to place at the disposal of the buyer" means that he may dispose by instructing the buyer and/or by handing over the corresponding documents. Also, in this instance performance of the obligation to deliver may occur at a time other than the passing of the risk.
Article 31(c) contains an escape provision according to which the seller, in case of doubt, has to place at buyer's disposal at his own place of business.
The most important case in international trade, however, is the so-called sale involving carriage in which the seller is only under an obligation to organize transportation by carrier(s) and to hand the goods over to the first carrier for transmission to the buyer (article 31(a)). According to article 67(1), as soon as the seller has handed the goods over to the first carrier he has not only fulfilled his obligation to deliver but he has also shifted the risk of loss to the buyer. But according to article 32(2), the seller must not only hand over to the first carrier but also arrange for the shipment; in other words, he must conclude the contracts necessary for transportation appropriate in the circumstances and according to the usual terms for such transportation. Whether he is also under a duty to provide for adequate insurance depends on the sales contract; for this question also, the use of Incoterms will in many cases furnish detailed provisions. In any event, the seller must, at the buyer's request, provide [page 6-11] him with all available information necessary to effect insurance, if the seller is not bound to provide for insurance himself (article 32(3)). If the goods sold, when handed over to the carrier, are not yet clearly identified to the contract by shipping documents, appropriate stamps or markings on the goods or on their packaging or otherwise, the seller must make this identification by sending the buyer notice of the consignment specifying the goods (article 32(1)). A violation of this obligation to specify primarily prevents the risk from passing to the buyer (article 67(2)); beyond that, it can also trigger all remedies for breach of contract.
To be sure, delivery in the described manner amounts to performance of the contractual obligation only if goods which conform to the contract have been placed at the buyer's disposal or handed over to the first carrier. Article 19(1) ULIS expressly included this in the definition of "délivrance." If the seller hands over goods which do not correspond to the description required by the contract, there may have been delivery within the meaning of articles 31 and following, but at the same time there is a breach of contract that may trigger the buyer's remedies laid down in articles 45 and following. In my opinion, there is delivery even when goods entirely different from the ones ordered have been handed over, as when, because of a reading mistake, chloral aluminum instead of aluminum chlorate is delivered, or -- to take a case decided recently by the House of Lords -- worthless autumn cabbage seed instead of the winter cabbage seed actually ordered is furnished. The view of the UNCITRAL Secretariat's Commentary that where [page 6-12] something entirely different has been delivered there is no delivery within the meaning of articles 30 and following seems to me to be mistaken and even dangerous. The danger lies in the risk of transferring to the Convention a most unfortunate controversy from German legal science and practice, namely, the question whether "merely defective" goods (a "peius") have been delivered, or whether there is no delivery at all because an "aliud" has been handed over. At first sight, the problem appears to be purely academic since both cases constitute a breach of contract, and the remedies of articles 45 and following make no distinction between the delivery of merely non-conforming goods and the "delivery" of an aliud which really is no delivery at all. But the distinction would immediately gain practical relevance if the buyer, according to article 39, lost his rights because he failed to give timely notice of the non-conformity. If one were to argue that the remedies of article 45 and their loss by failure to give notice presuppose delivery in the narrower sense of placing at the buyer's disposal or handing over goods that are not entirely an aliud then, as in German law, the problem of distinguishing between aliud and mere defect would also burden the Convention. A buyer who has failed to give timely notice could maintain that steel beams not conforming to the contractual description, or winter wheat delivered instead of summer wheat, could not be regarded as deliveries and therefore a prerequisite for his obligation to give notice of the lack of conformity was missing. This situation should be avoided by assuming delivery whenever the goods handed over to the buyer or carrier have been selected for the purpose of performing the sales contract in question.
In most if not necessarily all cases, a sales contract subject to the Convention will require transportation of the goods across one or several borders. Consequently, the problem arises whether it is part of the seller's duties to obtain the requisite export and import licenses, to pay or effect payment of any export or import taxes, and the like. The [page 6-13] Convention does not address these issues itself. They will usually have been considered by the parties and the respective obligations will have been fixed by the terms of the contract. The use of Incoterms may help to settle these questions. Where the parties have not come to an agreement, article 9 may step in because the parties have referred to a usage, or because they have in the past established practices as between themselves that remove any doubts. By way of exception, an international trade usage as considered in article 9(2) may clarify who has to bear those expenditures. As a last possibility, the parties may resort to interpretation of the contract according to article 8; applying article 8(3), the determination of the place for delivery may give important information about the parties' intent as to who shall be burdened with the public law duties mentioned above. If, for example, they have agreed on an obligation to be discharged only at the buyer's place of business so that the seller is bound to deliver the goods to that place at his own risk and expense, their intent will normally have been that the seller should provide for licenses and pay all taxes. In the case of a sale involving carriage where the seller, under article 31(a), is obliged to arrange for transportation and to hand over to the first carrier, it would seem that he is bound to comply with any export duties arising at the border or at least to have the carriers comply with them. It would seem that this interpretation is supported by the thought underlying articles 35, 41 and 42, namely, that the seller must provide for goods that can be used according to the contractual purposes, which means that their use is hampered neither by non-conformity nor by rights or claims of third parties. To draw an analogy to these provisions, as [page 6-14] does Honnold, seems to be dangerous, however, because the seller could then assert that the buyer was aware of this handicap (compare articles 35(3) and 43(2)).
The obligations of the parties with respect to taxes and authorizations might be difficult to ascertain, by way of construction, in a case where the seller is bound only to place the goods at the buyer's disposal at his own place of business or another particular place and the buyer thus has to come for the goods. For these cases, it will be impossible to set up a general rule according to which the seller would have to make sure that the goods are fit for export, expecially in view of the fact that the buyer does not always intend to take the goods across a border. Starting out from the assumption that the seller has completed his principal obligation by placing the goods at buyer's disposal, I would like to presume that, in case of doubt, it is up to the buyer to obtain export authorizations or to pay import taxes and the like.
If the seller does not live up to his obligation to deliver at a certain place, he may have breached the contract. Whether there really is a breach, however, depends on yet another factor: time. Therefore, Honnold is right in saying: "In most cases, questions as to 'place' and 'time' will merge into a single issue: Did the goods get to the agreed place on time?" Article 30 ULIS, therefore, takes into account that goods first delivered to a wrong place can still be brought to the agreed placed on time, that is, before the delay in delivery can amount to a fundamental breach of contract. Under the Convention, insofar as the seller is willing and able to deliver at the right place within a reasonable time, [page 6-15] the interpretation of the term "fundamental breach of contract" in article 25 should lead to the same solution as article 30 ULIS.
Clause (a) of article 33 first reiterates the self-evident statement that the relevant time for delivery is primarily the date fixed by or determinable from the contract. The rule of paragraph (b) is similarly unambiguous: If a certain period of time is fixed, the seller is basically at liberty to choose at which date within this time span he wants to deliver, unless the buyer is to choose a date. Finally, the auxiliary rule of paragraph (c) corresponds to the respective rules of numerous domestic laws, such as UCC 2-309(1). Even where it is established, as in German law, that in case of doubt the buyer may demand immediate performance (BGB § 271(1)), the hardship of such a provision is softened somewhat by the requirement of good faith according to which the special circumstances of the particular case have to be taken into account.
The circumstances which play a part in construing the term "reasonable time" are determined, of course, by such factors as how much time the arrangement of transportation requires; whether the seller, as the buyer must have known, has to procure or manufacture the goods himself; and so forth.
Documents play an important role in the sale of goods. If [page 6-16] I may choose a simplistic classification, we have, on the one hand, documents which represent the goods and which are frequently, for the parties, the real object of the sale; they are dealing in documents, not in goods. On the other hand, there are documents which are of no importance as far as the power of disposition over the goods (such as bills of lading or warehouse receipts) and over their value (an insurance policy, for instance) is concerned, but which are relevant to their usefulness (certificates of origin, test certificates, handling instructions and the like). In view of the diversity of procedures involving such documents -- direct handing-over, consignment, delivery by the carrier, deposit with a bank and so on -- the drafters of the Convention had to confine themselves to pronouncing the self-evident rule that the seller is bound to deliver the documents at the time and place in the form required by the contract. Obligations in regard to documents are normally to be found in Incoterms. In many cases appropriate regulations will be contained in commercial usages to which the parties have referred or which are deemed to have impliedly been incorporated as international usages (article 9).
Moreover, the contract will often determine which documents relate to the goods. This is especially true for documents which do not, like bills of lading, warehouse receipts or other shipping documents, represent the goods, but are ancillary documents like certificates of origin, test reports and the like; whether and to what extent these are to be supplied is a question that can only be answered by the contract, not by the Convention.
The buyer has purchased the goods for some purpose. He wants to consume, use or resell them. His expectations with respect to the goods can be frustrated if the goods do not possess the features necessary for the use intended by the buyer, or if a third party claims a right to possession or prohibits their use by virtue of a patent or other industrial or intellectual property right. In all these cases, the question arises whether and to what extent the seller has to take responsibility for the intended and uninhibited use. Continental legal systems, drawing on their Roman heritage, distinguish strictly between defects in quality and the seller's obligation to procure good title. I think I can, therefore, take this classification as a basis for the following outline.
When Ernst Rabel, in the course of preparing the first drafts for a uniform sales law, compiled and analyzed the legal rules regulating the seller's obligation with respect to the quality of the goods sold, he came to the conclusion that, while these are practical questions of everyday commerce, to the lawyer they are full of unsolved difficulties. The "irregularities and lack of clarity" were essentially caused by the irrational survival of a doctrine rooted in antiquity. Subsequently, Rabel uncovered the roots that are at the basis of the development of the seller's responsibility for the quality of goods in the most influential legal systems, the Roman, Anglo-American and German laws. He also exposed the common core of all legal systems: that the seller shall assume responsibility that the goods sold conform to the contractual agreement. The seller's obligation and liability, therefore, are not derived from any special warranty nor is he always liable for certain objective characteristics of the goods sold. This opinion of Rabel subsequently shaped the [page 6-19] further development of German law, even though it is again under attack. It lay also at the basis of the first drafts of the later Hague uniform law (ULIS). Nothing describes this basic principle better than the statement by Lord Justice Brett in 1877: "The governing principle ... is that the thing offered or delivered under a contract of purchase and sale must answer the description of it which is contained in words in the contract, or which would be so contained if the contract were accurately drawn out." This is the starting point stated in article 35(1), supplemented by the obvious obligations to deliver the quantity, quality and description required by the contract and to contain or package the goods in the manner required by the contract.
In many cases, however, the quality and description required by the contract are not expressly fixed by the parties, so that an interpretation of the contract becomes necessary in order to find out the exact definition of the seller's obligations. For these details of the seller's obligations to be obtained via interpretation, the purposes for which the buyer wants to use the goods have overriding significance. If a car is sold, the seller's obligations with respect to its qualities will depend on whether it is to be employed as a road vehicle, used as scrap metal, or exhibited in the Museum of Modern Art. Consequently article 35(2) uses this purpose as the basis for construction. Where the parties have not agreed on certain specific qualities, the goods must primarily be fit for the purposes for which goods of the same description would ordinarly be used (subparagraph (a)). A buyer who orders sand of a certain grain size can normally expect only the qualities requisite for sand as a building material, but not the purity requisite for the [page 6-20] purpose, unknown to the seller, of using it in children's sandboxes.
It has to be added, however, that "ordinary use" will be defined by the standards of the country or region in which the buyer intends to use the goods. In Europe, gasoline for the operation of cars is still understood as leaded gasoline, whereas the expectations of an American buyer who stocks up on gas on the Rotterdam spot market might be directed toward unleaded gasoline. In order to avoid uncertainty it would be advisable in such cases for a buyer to name not only his purpose but also the place where he intends to use the goods purchased.
"Ordinary use" must be distinguished from the "particular purpose" which is decisive for the qualities of the goods where the buyer has made it expressly or impliedly known to the seller at the time of conclusion of the contract (subparagraph (b)). Thus, if the German buyer has ordered building equipment which is not to be operated in Germany under normal climatic conditions in Middle Europe but is destined for use on an Antarctic expedition or on a pipeline-laying job in Siberia in winter, it has to have those special qualities that make it fit for operation in severe cold, on frozen soil or ice. But the buyer cannot content himself with informing the seller of the particular purpose if he did not rely on the special skills and judgment of the seller, or if it would be unreasonable for him to trust that the seller knows and is able to supply the qualities necessary for this particular purpose. Thus, if in our example the German buyer purchases the tractors from an Alsatian agricultural supplier trading in used tractors, the mere indication of the intended use would probably not be enough to obligate the seller to modify the tractors accordingly. If, in such a case, the buyer wants to make sure, he should not rely on interpretation of the contract on the basis of the indicated purpose, but should insist on an unambiguous stipulation that the machinery purchased is fit for operation under arctic conditions. In other words, when buying from experts the buyer may [page 6-21] assume that the qualities requisite for the particular purpose are impliedly warranted, whereas the seller upon whose skill and judgment the buyer did not or could not rely is responsible for such particular qualities only in case of an express warranty. One may fairly ask, of course, whether supplementation of the contract through article 35(2)(a) and (b) would not follow from the application of the general interpretative rule of article 8, in particular paragraphs (2) and (3); but, in view of the fact that the Convention addresses laymen, the express rule of article 35(2) makes sense even if it merely reiterates the result already reached by applying the general provisions.
For a German lawyer, the provisions of article 35 CISG must appear to be superior to the Civil Code (BGB). The sophisticated differentiation between specific and generic goods is absent and, above all, there need not be a distinction as to whether non-conformity means only effects in the goods or whether, in the case of particularly gross deviations from the contractual description, there is an aliud. Of course, the principal relevance of all this lies in the field of remedies.
Unfortunately, the Vienna Conference rejected an Australian proposal to the effect that minor differences in quality or quantity should, as in article 33 ULIS, be regarded as immaterial. Maybe it was feared that such a provision could be a temptation for national tribunals to excuse quality defects too generously. On the other hand, the corresponding provision of the German Civil Code (§ 459(1) cl. 2) has raised no problems in its practical application.
Article 35(2)(c) states a rule that can be found in a number of domestic laws in a similar form. Section 2-313(1)(c) UCC and section 15 of the English Sale of Goods Act (1893) both consider the qualities of a sample or model to be contractually promised, just as § 494 BGB does. Here [page 6-22] too, the contractual promise would follow from interpretation according to article 8 of the Convention.
The obligation under article 35(2)(d) to package in the manner usual for such goods or, where there is no such usual manner, in a manner adequate to preserve and protect the goods, surely helps to reduce uncertainty. German law still takes trouble to construe a so-called secondary contractual obligation distinguishing it from the rules governing the quality of the goods themselves.
According to article 35(3), the seller is not liable if the buyer knew of the lack of conformity or could not have been unaware of it. Honnold rightly points out that the case that will normally fall within paragraph (3) is the sale of specific goods which do not possess "ordinary" qualities within the meaning of article 35(2)(a). In German law, the corresponding provision of § 460 BGB is sometimes understood as meaning that a purchase with knowledge of the non-conformity amounts to an implied waiver of remedies. For the Convention, the idea suggests itself that the presumption of corresponding promises in article 35(2)(a-d) cannot hold where the parties knew the condition of the goods and the buyer thus could not expect the seller to impliedly warrant the ordinary or particular qualities requisite for the contractual purpose. A problem that paragraph (3) poses is that it refers only to paragraph (2). What if certain qualities have expressly been agreed upon in the contract, and yet the buyer knows or could not have been unaware that they are missing? If a buyer is purchasing a machine to produce wires which, according to the contractual description, can draw wires of up to 2 mm gauge, but the machine in reality can only manufacture wires of up to 1 mm, and if on the basis of an inspection and the type plate the buyer knew or could not overlook this fact, it is an open question whether he can still [page 6-23] hold the seller liable. It would seem that in such a case only a corrective interpretation according to article 8(3), by which the contractual description loses its character as an obligation, can help.
The possibility that an interpretation of the contract can, under certain circumstances, reduce or exclude any of the seller's obligations under article 35 brings up the next question, namely, whether and to what extent the seller can exclude or limit his obligations and his liability by warranty disclaimers. The freedom of contract as laid down in article 6 supports such disclaimer clauses; the same is true for the formulation in article 35(2) according to which the implied provisions of that paragraph do not apply "where the parties have agreed otherwise." But domestic laws can prohibit such disclaimer clauses and lead via article 4(a) to their invalidity. As mentioned above, one also has to take into account domestic rules that employ the underlying policy of the statutory provisions from which the parties want to deviate, as a yardstick for the admissibility of contractual provisions. If, for instance, the seller in his printed standard terms attempts to exclude any obligation with respect to the fitness of the goods, German law would declare such a provision void for the simple reason that it negates the principal obligations of the seller under the law.
According to article 36(1), the conforming qualities of the goods must exist at the time when the risk passes to the buyer. If they are absent at that time -- which is regulated in articles 66 to 70 and which is the topic of Professor Honnold's report -- the seller is liable regardless of when the lack of conformity becomes apparent. Conversely, the seller is not liable if the deficiencies come into existence only after that tinie. This provision, which is analogous to the rules in a range of Continental legal systems, couples obligation and [page 6-24] liability on the part of the seller with the passing to the buyer of the risk to pay even though he does not obtain the goods, or goods in the promised condition. Thus, if a machine sold by a German manufacturer to an American buyer FOB Hamburg is damaged by water during shipment, the seller is free from responsibility for the damage because he fully performed his obligations and all risks passed to the buyer when the machine passed the ship's rail in Hamburg harbor; the buyer, on the other hand, has lost his remedies and must pay the full price (article 66). To those scholars interested in the dogmatic basic structures of a law of sales, this (adequate) regulation shows that the buyer's remedies and the risk-of-loss rules are (and should be) in the final analysis based on the same principles of risk distribution.
In Germany and, in particular, in consumer-report magazines, it is sometimes rather maliciously observed that modern mass-produced products are designed to remain useful just so long as the contractual or statutory term of warranty is in force, and no longer. How long goods have to last and remain useful, however, is a tricky issue that cannot be solved in an international convention. In Vienna, this question was debated most controversially because some developing countries demanded that a "reasonable period, as the case may be" be fixed for the implied warranties of fitness for use. The wording finally found in the Convention's text, to be sure, is not free from doubt; it does not say unambiguously whether the substitution of "a period of time" in article 36(2) for "a specific period'" in the UNCITRAL draft means that the period of usefulness shall be determined by the court called upon to decide the particular case -- having due regard, of course, to all the circumstances -- or whether this period must be fixed by the terms of the contract for whose interpretation article 8 may be applied. The prevailing view of the Conference, however, was that "a [page 6-25] period of time" should stand for a period determined by the contract, and not just determinable by local courts. If I am right, the dispute was about a fictitious problem or, at best, a problem of burden of proof. If, after the risk has passed, defects appear due to external impact, no one will hold the seller responsible on the ground that the goods delivered have lost one or another of the promised qualities by this misfortune. It is, of course, possible that the seller may give a special guarantee to the effect that he will fix defects caused by external impact -- the buyer's conduct or impact by third parties or forces of nature -- even after the risk has passed, but such guarantees are rare. On the other hand, where defects or mere non-conformity follow from simple use or weather conditions after the passage of risk and these can be attributed to inherent characteristics of the goods present at the time when the risk passed, we may have an ordinary breach of the seller's obligation to deliver conforming goods. For the terms of the contract or, secondarily, the Convention's provisions on ordinary purposes (article 35(2)(a)) and particular purposes made known to the seller (article 33(2)(b)) also determine for how long the goods shall remain useful and what qualities they have to have at the time the risk passes in order to last that long. Therefore, the rule of article 36(2) according to which the "seller is also liable for any lack of conformity which occurs after the time indicated in the preceding paragraph and which is due to a breach of any of his obligations, including a breach of any guarantee that for a period of time the goods will remain fit" ordinarily involves nothing but relaxation of the buyer's burden of proof. If defects appear during the ordinary time of use or during an expressly stipulated period of time, the seller can ward off liability only if he can prove that they were caused by an external impact and that they did not originate in the condition of the goods. The real problem, [page 6-26] of course, is to know what normal lifespan under normal conditions of use has to be, depending upon the ordinary or particular purpose for which the goods are to be fit according to the contract, and what features and qualities they must have, therefore, in order to last and to function that long. But this defies regulation in a sales convention.
The seller's obligations correspond to the rights of the buyer. A violation by the seller of his obligations and thus of the rights of the buyer triggers the buyer's remedies. In the historical development of the law, to be sure, the remedies always came first, whether as writs or as actiones. Therefore, rights and obligations of the parties were at first nothing but reflections of remedies, before lawyers assigned them a significance of their own. That, in turn, allows me to reiterate that the obligations of the seller have to remain abstract without the remedies of the buyer; in any event, their presentation cannot be concluded without looking at what happens in the case of a breach of the seller's obligations with respect to the conformity of the goods. This touches upon three different frontiers.
If the goods do not correspond to the contractual description, the buyer can according to article 46(2) require delivery of substitute goods where the lack of conformity constitutes a fundamental breach of contract, or he can require the seller to remedy the lack of confonnity by repair, unless this is unreasonable (article 46 (3)). This is clearly a remedy from which results the corresponding obligation of the seller to deliver substitute goods or to repair, upon the buyer's request. However, not only is the seller obliged to cure if the buyer demands this as a remedy, but he is also entitled to do so. Two situations have to be distinguished: If [page 6-27] the seller has delivered before the date of delivery, article 37 expressly grants him this right to cure, provided the exercise of this right does not cause the buyer unreasonable inconvenience or unreasonable expense. In legal literature, this right to cure is seen as a possibility for the seller to avert avoidance of the contract by the buyer by reason of a fundamental breach due to the non-conformity. The provision is actually unnecessary because, up to the date of delivery, a fundamental breach can only occur in the form of an anticipatory breach within the meaning of article 72(1). In order to prevent avoidance before the delivery date, therefore, all that is needed is a notification and the possibility for the seller to cure until the date for delivery has passed. It seems that the importance of article 37 is that it expressly lays down limits -- obvious in themselves -- to the right to cure, on the one hand, and a liability for damages in sentence 2, on the other hand. Of course, the damages addressed in sentence 2 comprise only the buyer's expenses in making repairs, in returning the non-conforming goods, and so on, but not the damages originating in the non-conformity itself. Before the date for delivery has passed, the seller has not yet breached the contract, so that any losses, as by a resale at a lower price, can result in damage claims only where the terms of article 72(1) are met. Likewise, articles 45 and following and 74 to 77, but not article 37 (sentence 2), apply where the substitute goods offered by way of cure have deficiencies which cause further damage.
The seller can cure even after the date for delivery (article 48(1)). As in the case discussed above, this article (sentence 1) provides for a buyer's damage claims, but these perform a function which differs from those reserved in article 37 (sentence 2). Now we are dealing with damages which may really originate in the defect because the fact that the goods were non-conforming at the date of delivery in itself constitutes a breach of the contract. Thus, if an operating loss [page 6-28] arises from defects of the machine delivered which defects are later cured by repair, this loss can be recovered under article 45(1)(b) in connection with articles 74 to 77; article 48(1)(sentence 2) only confirms this result.
It is unclear whether the right to cure "subsequently" can be cut off by an avoidance by the buyer -- as is suggested by the words "subject to article 49" in article 48 -- or whether the offer and capacity of the seller to proceed with a subsequent cure always preclude a fundamental breach and thus the prerequisite for avoidance. In my view, however, the question has to be answered in the affirmative.
If the terms of the contract and their interpretation are decisive for the obligations of the seller, the question comes up whether and to what extent "mistakes" of the parties call for the application of the respective remedies of domestic law. Similar issues arise when there has been a "misrepresentation" in connection with a description of the quality of the goods. The questions -- familiar from German law -- of the conflict between the remedies for mistake and those for non-conformity may also be asked in connection with the Convention. In its context, admittedly, we encounter much more serious complications resulting from the diversity of domestic rules regarding mistake and misrepresentation. In my view, there are two levels to be distinguished. In cases of fraud or fraudulent misrepresentation, national remedies remain in full force because they are basically sanctions for tortious behavior which clearly is not a matter of sales law. ULIS had such a provision in article 89: "In case of fraud, damages shall be determined by the rules applicable in respect of contracts of sale not governed by the present Law." But where it is not a matter of tortious conduct, the domestic remedies for mistakes in communication or motivation should be disregarded. This obviously must be true [page 6-29] for mistakes concerning the goods and their qualities because only with respect to this setting does the Convention supply an express, unified regulation. As to the financial situation of the parties and their respective capacities to perform it is rather doubtful whether article 71(1) contains an exclusive uniform regulation or not, leaving room for domestic rules of avoidance and the like.
Among the remedies of the buyer and the preconditions for their exercise should be included the provision that the buyer must examine the goods (article 38) and give notice to the seller of any non-conformity (article 39). But, in connection with this obligation, the Convention sets up another collateral obligation, namely, that the seller is not entitled to rely on a failure to examine and notify if he did not disclose to the buyer any facts which are relevant to the lack of conformity and of which he knew or could not have been unaware (article 40); in other words, the seller is under an obligation to give notice to the buyer of any non-conformity he was or could have been aware of. This applies to cases where, after the contract has been concluded, a deterioration of the goods occurs, which fact has become known to the seller or could not escape his notice. If, however, the non-conformity is already present at the time the contract is made, domestic rules governing fraud will generally be applicable.
The seller can deliver goods which do not have to be free from third-party rights if and only if the buyer has agreed to take them thus encumbered. In order to exclude liability, therefore, it is not enough for the buyer to be aware of such rights -- as is the case with non-conformity (article 35(3)). On the other hand, an agreement can also be implied. but the buyer's knowledge that a warehousemen or carrier has a lien on the goods is not always sufficient to constitute agreement. Nevertheless, it would appear that the buyer's consent must be assumed when the seller informs him that he not only retains title until full payment of the purchase price, but that he has assigned title to his own bank as security and that the buyer must pay the balance of the price directly to the bank.
Even more difficult to assess is the obligation of the seller to convey good title not only free from any security interest or lien, but also free from any claim of a third party, like the claim that the goods have already been sold to this third party. This obligation is based on the principle that the buyer shall enjoy quiet possession and use of the goods, unprejudiced and undisturbed by such third-party claims. The seller is thus under an obligation to fight off such claims at his own expense. This obligation exists even, and particularly, [page 6-31] where the third party's claims are of doubtful merit. It is true, however, that the seller cannot be held liable if the claims put forward by a third party are obviously unfounded, frivolous or vexatious. Yet difficulties are to be expected in the provision's practical application. If a third party asserts an unjustified claim that does not display its lack of merit on its face, the resulting detriment to the buyer may well constitute a fundamental breach of the contract that would authorize avoidance. If the seller now fights off the unfounded claim in legal proceedings lasting for years, the question arises whether he can require performance of the contract after this litigation has been successfully completed. In such cases, it would be hard to deny the buyer's right to consider this long-standing uncertainty a fundamental breach. Third-party claims, therefore, constitute a considerable risk to the seller, and it is not altogether inconceivable that a buyer who regrets having concluded the contract might conspire with a third party in order to provoke avoidance. But on weighing carefully whether the risk of unjustified litigation should be carried by the seller or the buyer, the Convention's solution seems to me to have its merit. It should also be taken into account that such third-party claims are likely to be subject to domestic law and that the controlling law will in many cases be that of the seller's country. Above all, however, the seller has better access than the buyer to the case history of the goods from which such claims may have arisen, and it is therefore easier for him to investigate.
Not included in the notion of third-party claims are administrative restrictions upon use, such as restrictions based on national protective legislation for the benefit of employees or consumers, on environmental protection laws, and so on. If the importing country prohibits the operation of a chemical plant because it emits too many pollutants, there may be non-conformity under aticle 35, but not article 41. The practical import of this distinction is that" where [page 6-32] article 35(2) is applied, the buyer's mere knowledge suffices to free the seller from all liability.
Another case not falling under article 41 is the sovereign seizure of the goods before delivery, for example, because the export of the goods in question would violate an export ban. In this case, there may be a breach of the obligation to deliver under article 30.
A particularly interesting provision is article 42 which obliges the seller, to some extent, to deliver goods which are free from third-party claims based on a patent or other industrial or intellectual property. UCC section 2-312(3) imposes upon the seller a warranty "that the goods shall be delivered free of any rightful claim of any third person by way of infringement or the like." Similarly, German law treats as defective title the case where a third person claims a patent right. In my view, however, it is more natural to put such infringements by a real or alleged claim of a third person on a level equal to non-conformity, because the seller's responsibility for the freedom from adverse claims is not absolute but, quite simply, conditioned upon a corresponding impairment of the goods' usefulness. The seller is not liable merely on the ground that there may exist a patent or other right based on industrial property anywhere in the world; rather, he can only be held liable if such a right exists or is claimed under the law of the State where the goods are to be used, whether by resale or otherwise (article 41(1)(a)). And if this State is not apparent from the contract, the seller is responsible only for the freedom from such claims under the law of the State where the buyer has his place of business (article 42(1)(b)). This emphasizes the fact that the seller's obligations are determined by the place where the goods are to be used, just as according to article 35(2) the intended use of the goods determines conformity unless the parties have agreed on something else. Admittedly, article 42 restricts [page 6-33] the seller's responsibility even further: he is liable for the freedom from rights or claims based on industrial or other intellectual property in a given country only if it was contemplated by the parties at the time of conclusion of the contract that the goods would be resold or otherwise used in that country. This rule also runs parallel to article 35 according to which the seller has to warrant any particular qualities only if they have been agreed upon, or if the particular purpose has been made known to him by the buyer prior to the conclusion of the contract. Apart from that, he is liable only for the "usual case," that is, use in the State of the buyer. Beyond that, article 42(1) protects the seller also insofar as it is a prerequisite to his liability that he knew or could not have been unaware of the right or claim at the time of conclusion of the contract. This, in fact, involves an element of fault because even if the seller knew in which State the goods were to be used or resold, he may avoid liability if he has relied on the trustworthy information of a lawyer to the effect that in this State there are no such rights which might infringe on use or resale.
Moreover, the seller is not liable -- again in accordance with the rules regarding non-conformity -- where at the time of the conclusion of the contract the buyer knew or could not have been unaware of the right or claim (article 42(2)(a), or where the right or claim results from the seller's compliance with technical drawings, designs, formulae or other specifications furnished by the buyer (article 42-2)(b)). It must be added, however, that the buyer must have required the seller to comply with these specifications; if they were mere proposals to the seller and he was free to choose alternatives, it seems questionable whether he can take the specifications suggested by the buyer although he knows that they violate a patent.
Moreover, where there is a responsibility for freedom of the goods from third-party rights. or claims, whatever these are based on -- property, lien, sale to a third party, industrial or intellectual property -- the buyer must always give notice [page 6-34] within a reasonable time (article 43(1)). This notice must specify the nature of the right or claim of the third party. Unlike the notice of non-conformity, this notice is not subject to a cut-off period of two years as mentioned in article 39(2). On the other hand, as does article 40, article 43(2) states that the seller is not entitled to rely on a failure to give notice if he knew of the right or claim of the third party. At least for the rights or claims based on intellectual or industrial property, the obligation to give timely notice admittedly plays a role only in the borderline cases where the seller could not have been unaware of the right -- as a condition for his responsibility under article 42(1) -- but not where he positively knew of it (article 43(2)).
A complicated problem may arise if the buyer requires the seller to remedy the "encumbrance" of the goods by a patent or other industrial property right of a third party. Is there an obligation of the seller to cure by fighting off the infringement claim or replacing the offending part of a machine by another non-patented part? Can the buyer demand such "performance" only under restrictions similar to those mentioned in article 46(2) and (3)? This again is a matter of remedies and therefore not my topic, but it seems to me that the question depends on the characterization of the seller's obligation under article 42.
1. See articles 21 to 32 ULIS on time and place of delivery, and 33 to 48 ULIS on conformity.
2. Cf. for art. 8 ULIS comment by Stoll in H. Dölle, Kommentar zum Einheitlichen Kaufrecht art. 74 no. 52 (1976).
3. See F. von Westphalen, Wertpapiermitteilungen 1314 (1978); P. Schlechtriem, Gedächtnisschrift Jürgen Rödig 257 (1978).
3a. Judgment of Apr. 29, 1982; IPRax 1983, 231 ff.
4. Cf. 3 UNCITRAL Yearbook (1972) and Report of the Secretary General in ide at 32 ff.; see also J. Honnold, Uniform Law for International Sales 238-239 no. 210 (1982).
5. For this clause, cf. Ramberg, Incoterms 1980, in The Transnational Law of International Commercial Transactions 137, 138 ff., 142 and 404 (ed. N. Horn & C. Schmitthoff 1982).
6. Cf. UNCITRAL Commentary, A/Conf.97/5 p. 83, 83 ff., under no. 12.
7. See UNCITRAL Commentary, supra note 6, at p. 86, under no. 3.
8. Cf. George Mitchell (Chesterhall) Ltd. v. Finney Lock Seeds Ltd.,  3 W.L.R. 163 (H.L.). In Germany there are numerous cases of delivery of the wrong seed where it was open to question whether there was any delivery at all, raising the issue of breach, or whether the goods were so different from those contracted for that the rules usually governing contracts no longer applied (see the reasons given by Parker, J., in the court of first instance in the English case cited above).
9. See Honnold, op. cit. supra note 4, at 240 no. 211.
10. When the contract is silent, modern practices governing export sales indicate that the seller's responsibility to dispatch goods to a foreign destination calls for him to deal with export licenses and export taxes." Honnold, op. cit. supra note 4, at 241 no. 211.
11. Honnold, op. cit. supra note 4, at 241 no. 211 note 13.
12. Honnold, op. cit. supra note 4, at 239 no. 211.
13. ULIS art. 30(1)(sentence 1): "Where failure to deliver the goods at the place fixed amounts to a fundamental breach of contract, and failure to deliver the goods at the date fixed would also amount to a fundamental breach, the buyer may either require performance of the contract by the seller or declare the contract avoided."
14. In this context, it must be reiterated that, as stated in UCC 1-102(4), the express reference to the possibility of agreement on a certain term by virtue of party autonomy does not exclude the possibility of varying other provisions also. Cf. Honnold, op. cit. supra note 4, at 245 no. 216 note 2.
15. Cf. comment by Vollkommer in O. Jauemig, Bürgerliches Gesetzbuch § 271 note 3a (2d ed. 1981).
16. Cf. the Vienna Conference discussions in connection with the passing of risk. A/Conf.97/C.1/SR 32 p. 9.
17. A 6 (C&F) and A 7 (CIF): "A clean bill of lading is one which bears no superimposed clauses expressly declaring a defective condition of the goods or packaging. The following clauses do not convert a clean into an unclean bill of lading: a) Clauses which do not expressly state that the goods or packaging are unsatisfactory, e.g. 'second-hand cases', 'used drum', etc.; b) clauses which emphasize carrier's nonliability for risks arising through the nature of the goods or the packaging; c) clauses which disclaim on the part of the carrier knowledge of contents, weight, measurement, quality, or technical specification of the goods." The Transnational Law of International Transactions 390, 396 (1982).
18. 2 Das Recht des Warenkaufs 101 (1958).
19. Cf. Knöpfle, Zur Probematik des subjectiven Fehlerbegriffes im Kaufrecht, JZ 78, 121, once again propagating an "objective" definition of defect.
20. Randall v. Newson, 2 Q.B. 102 (C.A. 1877), quoted in Honnold, op. cit. supra note 4, at 249 no. 222 note 1.
21. To this effect see Honnold, op. cit. supra note 4, at 253 no. 226 (art. 35(2)(b)).
22. See the recent case BGH March 3, 1983, BGHZ 87,88.
23, Cf. comment by Metzger in Reichsgerichtsräte-Kommentar § 460 note 1.
24. The answer is apparently different for UCC 2-316 and its consideration in the application of the Convention. See Honnold, op. cit. supra note 4, at 259 no. 234.
25. Cf. Swedish Sales Law art. 44; German Civil Code § 459(1). For the solution under the UCC see Honnold, op. cit. supra note 4, at 268 no. 243 note 3.
26. Cf. A/Conf.97/C.1/SR 15 pp. 2 ff.
27. For the language problems concerning the term "certain" see A/Conf.97/C.1/SR 15 pp. 5 ff.
28. Pakistan's request to lay down "implied warranties for a reasonable period as the case may be" was therefore unnecessary because in the cases falling under art. 35(2)(a) and (b), the qualities promised constitute a warranty of the lifetime requisite for the goods or the purpose.
29. To the contrary see Honnold, op. cit. supra note 4, at 272 no. 247.
30. See P. Schlechtriem, Einheitliches UN-Kaufrecht 69 (1981).
31. Cf. comment by Stumpf in Dölle, op. cit. supra note 2, art. 34 no. 3.
32. To the same effect see Honnold, op. cit. supra note 4, at 265 no. 240.
33. See P. Schlechtriem, Einheitliches UN-Kaufrecht 84 (1981).
34. Accord: Honnold, op. cit. supra note 4, at 283 no. 260 note 10.
35. See UNCITRAL Commentary 105 under 5. For the UNCITRAL discussions, see 3 UNCITRAL Yearbook 68 no. 90 (1972).
36. Cf. UNCITRAL Commentary 104 under 2. According to ULIS art. 52(1) (sentence 1), the buyer was deemed to have agreed when he accepted the goods with positive knowledge of the third party's rights. Cf. comment by Neumayer in Dölle, op. cit. supra note 2, art. 52 no. 12.
37. Cf. comment by Neumayer, supra note 36, art. 52 no. 9.

References: e contrario
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 art. 74
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