Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 249-250. Reproduced with permission of the publisher, Kluwer Law International, The Hague.
§ 217 A. The Commercial Setting
When the seller lacks sufficient knowledge of the buyer to justify a delivery on credit, an exchange of goods for the price can be efficiently arranged by the use of a document that controls delivery of the goods, such as a negotiable or "order" bill of lading. See Art. 58, infra at §333. Such documentary exchanges are accepted by standard statements of trade practice and by domestic law. Even when the seller delivers on credit, the contract (including practices or usage) may require the delivery of additional documents such as an insurance policy and invoices.
§ 218 B. The Convention
The above commercial practices provide the setting for the following provision:
"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."[page 249]
In the preparation of ULIS and in UNCITRAL this question arose: When the law refers to the delivery or handing over of "goods," should the law also refer to delivery effected by "documents of title?" It was found this would have called for many references to delivery by documents; the first sentence of the present article was included to provide a simpler and less cluttered text. This sentence merely states that the seller must perform the contract—a statement that would have been unnecessary but for the drafting problem arising from references to delivery of "goods."
The second and third sentences of Article 34 were added at the 1980 Diplomatic Conference to make clear that the seller’s right to "cure" a defective delivery of goods extended to the delivery of documents. As we shall see (Art. 37, infra at §244), a seller who has made a defective delivery before the date of delivery may deliver a "missing part" or "make up any deficiency in the quantity of the goods" or "deliver goods in replacement" or "remedy" (repair) the lack of conformity. This language dealt so specifically with the special problems of "goods" that it seemed hazardous to rely on the assumption that references to delivery of "goods" extended to "documents." The second and third sentences of Article 34 were modelled closely on the "cure" provisions of Article 37. The discussion of Article 37, infra at §244, will be generally applicable to the provisions of Article 34 with respect to "cure" of defects in documents. Cure of documents after the date for delivery is considered at Article 48, §295, infra.[page 250]
FOOTNOTES: Chapter on Article 34
1. See Incoterms (1990) e.g. CFR (formerly C&F), CIF, CPT, CIP et al., description of documents at A8; GAFTA Contract NO. 30 (Grain in Bulik) 13 ("Payment...in exchange for Shipping Documents") 14 (listing of Shipping Documents). (U.S.A.) UCC 2–310(b): "if the seller is authorized to send the goods he may ship them under reservation and may tender the documents of title". Cf. UCC 2–505, 2–507(2); Swedish Sales Act 14–15, 71(2).
2. The first sentence of Art. 34 is the same as Art. 32 of the 1978 Draft, cf. ULIS 50. The second and third sentences were added at the 1980 Diplomatic Conference in the deliberations on draft article 35 that became Art. 37. O.R. 309–340, 426 (Report of Drafting Committee transferring proposal from draft article 35 (Art. 37) to draft article (Art. 34), Docy. Hist. 530–531, 647.
3. Rep. S-G, IV YB 39–40, Docy. Hist. 116–117; 4th WG, VI YB 64, 70, Docy. Hist. 142, 148. See: Schlechtriem, Com. (1998) 269–273 (Huber).
4. At the Diplomatic Conference an amendment to expand the "cure" provisions now in Art. 37 was adopted and referred to the Drafting Committee. S.R. 14 paras. 49–72, O.R. 309–310, 426, Docy. Hist. 530–531, 647.