Go to Database Directory || Go to Bibliography

Case note

Randers County Court, Denmark
BS 2-2229/2002 decided 8 July 2004

Comments on Issues Relating to the Passing of Risk

Joseph Lookofsky [*] & René Franz Henschel [**]
December 2004

CISG Articles 66-70 regulate the passing of risk. Article 69 [1] provides the gap-filling rules for "non-carriage" cases, and this includes cases where the goods are delivered by transportation and personnel under the seller's control.[2] If the buyer is bound to take over the goods at the seller's place of business, 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, cf. Article 69(1).

However, if the buyer is bound to take over the goods at a place other than seller's place of business 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, Article 69(2).[3] This seems to have been the situation in case number BS 2-2229/2002 decided by the County Court of Randers (Denmark) on 8 July 2004, where a Danish seller (S) agreed to sell and deliver, inter alia, a mobile grain dryer to buyer (B) in Germany.[4]

The dryer was to be delivered by truck to Wiesenbad, Germany, a few kilometers from the field where B intended to use the machine. Upon arrival of the truck in Wiesenbad, the driver (an employee of S) requested B to help unload the dryer. After B's personnel, using their own tractor and chain, had successfully lifted the dryer down from the truck and then driven a few meters, the chain holding the dryer broke, causing substantial damage to it.

Making a general reference to CISG "Article 69", the court in Randers found it "natural" to interpret the contract between the parties to mean that delivery of the dryer took place "at the latest" when B "took possession" of it, i.e., when the dryer was unloaded from the truck by B's personnel. For this reason, and since the court found that the accident was not attributable to S (or its personnel), the court held B liable to S for the agreed price.

However, since (interpretation of) the express terms of the contract hardly seem to provide a clear solution to the risk-of-loss issue, the true basis of the court's decision on this point must be sought - not within the express terms of the contract, but rather -- on the basis of Article 69 which contains the default rules which allocate the risk of (accidental) loss in a case like this. Unfortunately, the court's opinion does not indicate whether Article 69(1) or 69(2) was applied, but as Article 69(1) applies only to delivery at the place of business of the seller, the court must be assumed to have based its decision on Article 69(2) which requires that 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. This requirement seems surely to have been met in the circumstances of this case, so the court in Randers seems to have reached the right result as regards the application of Article 69(2). This is fortunate, since it appears that this Danish decision would seem to represent the first piece of CISG case law to have been reported on this particular point.


FOOTNOTES

* Professor of Law, University of Copenhagen.

** Assistant Professor, Aarhus School of Business. External Associate Professor, Aarhus University.

1. See Annoted Text of Article 69 on the Pace Database available at <http://cisgw3.law.pace.edu/cisg/text/anno-art-69.html#ud*> and the UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods, Article 69, also available at <http://cisgw3.law.pace.edu/cisg/text/anno-art-69.html#ud*>.

2. See Joseph Lookofsky: Understanding the CISG in Scandinavia, 2d ed. (Copenhagen, 2002), p. 114 et seq.; Günter Hager in Peter Schlechtriem: Kommentar zum Einheitlichen UN-Kaufrecht, p. 651 et seq.

3. See relevant case law an Article 69(2):

    -     Germany Oberlandesgericht (Provincial Appellate Court) Hamm 23 June 1998, case presentation including English translation available at: <http://cisgw3.law.pace.edu/cases/980623g1.html>; see also Unilex at <http://www.unilex.info/case.cfm?pid=1&id=448&do=case>
    -     Germany Oberlandesgericht (Provincial Appellate Court) Oldenburg 22 September 1998, case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/980922g1.html>; see also Unilex at <http://www.unilex.info/case.cfm?pid=1&id=506&do=case>
    -     ICC Court of Arbitration case 7197 of 1992, available at <http://cisgw3.law.pace.edu/cases/927197i1.html> and Unilex at <http://www.unilex.info/case.cfm?pid=1&id=37&do=case>

4. For the full text of the Randers County Court decision, see: <http://www.cisg.dk/RETTEN_I_RANDERS_8_JULI_2004.HTM>


Pace Law School Institute of International Commercial Law -- Last updated December 23, 2004
Go to Database Directory || Go to Bibliography
Comments/Contributions