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Reproduced with the permission of Oceana Publications

Article 86 [Buyer's obligation to preserve] [1]

[TEXT OF THE UNIFORM LAW]

(1) If the buyer has received the goods [2] and intends to exercise any right under the contract or this Convention to reject them [3] , he must take such steps to preserve them as are reasonable in the circumstances [4]. He is entitled to retain them until he has been reimbursed his reasonable expenses by the seller [5].

(2) If goods dispatched to the buyer [6] have been placed at his disposal at their destination [7] and he exercises the right to reject them [8], he must take possession of them on behalf of the seller [9] , provided that this can be done without payment of the price and without unreasonable inconvenience or unreasonable expense [10]. This provision does not apply if the seller or a person authorized to take charge of the goods on his behalf is present at the destination [11]. If the buyer takes possession of the goods under this paragraph, his rights and obligations are governed by the preceding paragraph [12].

[WORDS AND PHRASES, CONCEPTS

[COMMENTARY]

[1] [buyer has already received the goods vs. situation in which the goods have only been tendered to him]

The article deals with two different situations: first, the buyer has already received the goods (note 2) and second, the goods have only been tendered to him (notes 6 and 7). The latter is provided for in greater detail, i.e. the obligation to preserve the goods is tied to additional conditions because the buyer is required additional activities in this case.

[2] [if the buyer has received the goods …]

We believe that the term "received" has the same meaning as the terms "take over" in Article 60, subpara. (b) (notes 7.1. and 7.2. of that article) for what matters is that the buyer has indeed taken possession of the goods. It is regrettable that different terms are used. The receipt or taking over of the goods on the face hardly differs from the taking possession of the goods under paragraph 2. But the [page 354] latter is done only after the right to rejection has been exercised (note 8).

[3] [… and intends to exercise any right under the contract or this Convention to reject them …]

      [3.1] The view was expressed at the diplomatic conference that the right to reject the goods is given only when there are the prerequisites for an avoidance of the contract or for the right to delivery of substitute goods (O.R., 399; so also believes Schlechtriem, 104). These are in particular the cases of Articles 49 and 46, paragraph 2, but probably also of Articles 72 and 73, hence without any doubt the most important and typical applications. From an overall point of view, however, this approach is too narrow for Article 52. It grants a right to refuse to take delivery of the goods, which is not linked with an avoidance of the contract, but which also leads to a right to rejection in the event of early and excess delivery. The right to suspension of obligations under Article 71 could lead to a right to rejection, e.g. when the buyer refuses to take over, as agreed, parts for a machine form a company that has declared bankruptcy as partial deliveries before he has a security for that the rest will also be delivered. Therefore, we have in another context (note 2 of Article 60) interpreted the right to reject the goods in broader terms, so to speak as an expression of general principles that underlie the Convention and are reflected in the cited articles. Article 86, however, does not offer an independent basis for the ascertainment of a general right to rejection because of a breach of contract. Barrera Graf (BB, 621) nonetheless seems to hold such a view. Such a right has to be provided for in the Convention or in a contract.

      [3.2] The period within which the right to reject will have to be exercised depends on the norms which provide for it, hence in particular, the periods fixed for the avoidance of a contract or the claim for delivery of substitute goods. The facts given under this article are based on the assumption that rejection is made after the receipt of the goods so that the affirmation by Barrera Graf (BB, 622) that the buyer will have to manifest his intention at the moment of receipt, is not convincing.

The intention to exercise the right to reject the goods has to be manifested vis-à-vis the seller. Where this is not done, the buyer has to take charge of the goods as being his own. Only after such manifestation this provision will become applicable, all the more so since under Article 70 and 82, paragraph 2, subpara. (a) the effects of the risk will, at least in that case, fundamental breach of contract, be on the seller. [page 355]

[4] [… he must take such steps to preserve them as are reasonable in the circumstances]

Reference is made here to the same steps as described in note 5 of Article 85. In most cases, the buyer will in his own interest preserve the goods in order not to lose his right to avoid the contract (Article 82, paragraph 1; Schlechtriem, 104).

[5] [he is entitled to retain them until he has been reimbursed his reasonable expenses by the seller]

Compare notes 6 and 7 of Article 85.

[6] [if goods dispatched to the buyer …]

It is obviously assumed that a contract is referred to here which provides for carriage of the goods (Article 67). It is of no relevance in this case what should be considered as place of delivery or place of risk passing. According to Eberstein (Dölle, 587) it is not necessary (under the identical wording of ULIS) that transmission of the goods has been agreed, e.g. the seller finally dispatches the goods because the buyer does not fetch it as agreed. While agreeing to his idea because in that event measures might have to be taken to preserve the goods, we see problems involved in this interpretation for there is actually no place of destination in the meaning of the following text (note 7). One might agree with the author, however, in those cases where there is no doubt about the destination.

[7] [… have been placed at his disposal at their destination …]

Reference is made hereby to the contractual place of destination. If the goods are delivered at a completely different place, there will, in our view, be no obligation of the buyer to preserve them for it will have to be assumed that he has no representation there. Where the buyer has delivered the goods to a third party in a distance sale, it will be problematic to determine whether or not that third party has to assume the obligation of the preservation of the goods. In the case of deliveries at construction sites or similar places, the buyer will have to have an appropriate representative ready.

It is spelled out in the Secretariat's Commentary (O.R., 62) that the buyer need not take possession of the goods when he has already rejected the documents. We believe that there is no reason for doing that. On the contrary, when the rest of the conditions are fulfilled, he may be obligated to take possession of the documents in order to be able to take charge of the goods.

[8] [… and he exercises the right to reject them …]

Regarding the right to rejection, compare note 3.1. It will have to be exercised at the latest at the time when the goods are tendered to him because the obligation to preserve the goods will commence at the same time, at least, however, before the buyer has taken possession of the goods. Otherwise the conditions of the case under paragraph 1 are fulfilled. It will, in particular, be the so-called rights to refuse receipt of the goods as mentioned in note 3.1. which will be of relevance here. [page 356]

[9] [… he must take possession of them on behalf of the seller …]

The buyer physically takes possession of the goods after having made it clear that he does not intend to take them over. The passing of the risk is tied to the taking over of the goods only in the cases referred to in Article 69 which are not relevant here. But a justified rejection of the goods should have such effects on the seller which are similar to those involved in the risk bearing (Article 70 and note 1 of it).

[10] [… provided that this can be done without payment of the price and without unreasonable inconvenience or unreasonable expense]

      [10.1] The obligation to preserve the goods does not apply in particular when the payment term "cash against documents" is used. The case in which the goods can be obtained only against payment is in our view identical to the one in which security will have to be procured as a condition for the taking possession of the goods, e.g. "documents against acceptance". When the payment was made earlier, e.g. from a letter of credit, or when it is not tied to the taking possession of the goods, an obligation to preserve the goods will arise.

      [10.2] Unreasonable inconvenience may, for instance, be caused when the buyer in a distance sale has the goods sent to a third party who cannot be expected to receive them or when he himself has no facilities for preserving the goods at the place of destination (but compare notes 7 and 12).

      [10.3] Unreasonable expense is incurred in the cases described in Article 88, paragraph 2, so that a concurrence is caused between the two provisions. We believe that the concern of the overall rule is best met when the approach of Article 88, paragraph 2, is given priority and this part of Article 86, paragraph 2, is not interpreted in such a way as to pretend that in this case there will be no obligation of preservation and thus no obligation of an emergency sale.

[11] [this provision does not apply if the seller or a person authorized to take charge of the goods on his behalf is present at the destination]

These are the seller's own duly authorized employees or his trade representatives. Unlike Honnold (460), we believe that a bank, which is only to present the documents on behalf of the seller, does in general not meet these requirements.

[12] [if the buyer takes possession of the goods under this paragraph, his rights and obligations are governed by the preceding paragraph]

This amendment was included at the suggestion of Australia (O.R., 139). It relates to the steps to be taken to preserve the goods and the right to retain them, hence "... take such steps as are reasonable in the circumstances ..." It is in the same sense that the relevant Article 92 ULIS, in which the amendment is missing, was interpreted (Eberstein/Dölle, 586). [page 357]

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