Go to Database Directory || Go to Database Bibliography || Go to Bianca-Bonell List of Abbreviations || Go to Bianca-Bonell Bibliography

Cite as Date-Bah, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 316-318. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.

Article 41

Samuel K. Date-Bah

1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision

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 42.

1. History of the provision

Article 52 of ULlS dealt with the same problem as Article 41 of the Convention. The text of the ULlS provision was as follows:

  1. Where the goods are subject to a right or claim of a third person, the buyer, unless he agreed to take the goods subject to such right or claim, shall notify the seller of such right or claim; unless the seller already knows thereof, and request that the goods should be freed therefrom within a reasonable time or that other goods free from all rights and claims of third persons be delivered to him by the seller.

  2. If the seller complies with a request made under paragraph 1 of this article and the buyer nevertheless suffers a loss, the buyer may claim damages in accordance with Article 82.

  3. If the seller complies with a request made under paragraph 1 of this article and a fundamental breach of contract results thereby, the buyer may declare the contract avoided and claim damages in accordance with Articles 84 to 87. If the buyer does not declare the contract avoided or if there is no fundamental breach of contract, the buyer shall have the right to claim damages in accordance with Article 82.

  4. The buyer shall lose his right to declare the contract avoided if he fails to act in accordance with paragraph 1 of this Article within a reasonable time from the moment when he became aware or ought to have become aware of the right or claim of the third person in respect of the goods.

The UNCITRAL Working Group adopted as Article 25 of the Sales Draft the following provision: [page 316]

"The seller must deliver goods which are free from the right or claim of a third person, unless the buyer agreed to take the goods subject to such right or claim."

When the Committee considered this text, it decided that Article 25 should be revised to deal expressly with rights or claims of third parties based on industrial or intellectual property. The reason for this decision was that the issues raised by third party claims based on industrial property were considered different from those based on other legal rights (compare the discussion in Official Records, II, 324). Accordingly, a Special Working Group was set up in the course of the session to redraft Article 25. This Group came up with the following formulation:

"(1) The seller must deliver goods which are free from the right or claim of a third party, other than one based on industrial or intellectual property, unless the buyer agreed to take the goods subject to that right or claim.

"(2) The seller must deliver goods which are free from any right or claim of a third party, of which at the time of the conclusion of the contract the seller knew or could not have been unaware, if that right or claim is based on industrial or intellectual property:
(a) under the law of the State where the goods will be used if it was contemplated that the goods will be used in that State; or
(b) in any case under the law of the State where the buyer has his place of business.

"(3) The obligation of the seller under paragraph (2) of this article 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 specificatlons furnished by the buyer.

"(4) Failure by the buyer to give notice of the right or claim has the same consequences as failure to give notice of lack of conformity under Article 23."

Although this proposal of the Special Working Group was accepted in substance, it was decided to divide the formulation into two articles.

The first paragraph of the Special Working Group's formulation was to be one article and paragraphs (2) to (4) were, to become a separate article. This decision of the Commission led to [page 317] Articles 41 and 42 of the Convention. Of course, the original proposals, of the Special Working Group were subjected to drafting improvements in the course of their passage through the Drafting Group of UNCITRAL and through the Vienna Conference.

2. Meaning and purpose of the provision

     2.1. - This article, like Article 52 of ULIS, requires that the goods sold be delivered free from not only the rights of third parties, but also the claims of such third parties (with a due exception being made for rights or claims based on industrial property or other intellectual property, the latter constituting the subject-matter of Article 42). The requirement that the goods be delivered free from the claims of third parties means that the obligation of the article is breached not only when third parties pursue valid claims against the buyer, but even when such clanns are invalid. Even such invalid claims may lead to expensive litigation against which, under this rule, the buyer is entitled to seek protection and indemnification from the seller. If a third party asserts a claim over the goods and the buyer gives notice to the seller specifying the nature of the claim of the third party within reasonable time after he has become aware or ought to have become aware of the claim (in accordance with Article 43), then it becomes the duty of the seller to ensure that the claim is settled or defeated; otherwise he will be in breach of contract. These observations apply a fortiori to the rights of third parties over the goods.

The buyer's right to receive goods which are free from any right or claim of a third party may, however, be qualified if the buyer agrees to take the goods subject to that right or claim. [page 318]


Pace Law School Institute of International Commercial Law - Last updated January 28, 2005
Go to Database Directory || Go to Bibliography
Comments/Contributions