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Cite as Maskow, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 431-434. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.

Article 59

Dietrich Maskow

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

ARTICLE 59

The buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or compliance with any formality on the part of the seller.

1. History of the provision

     1.1. - This provision corresponds in substance to Article 60 of ULIS, but language is more general and more exact. Article 59 assumes that in one way or another the date of payment is fixed for every contract, while Article 60 of ULIS, taken literally, referred only to certain methods for payment and did not mention determination of the date of payment by the Convention. Article 59 also specifies how the date of payment may be agreed upon by the parties by mentioning that it can be fixed by or be determinable from the contract. This makes it clear that this agreement may be express or implied. In addition to stylistic improvements («any formality» instead of «any other formality» addition of the words «on the part of the seller»), the scope of that last half of the sentence has been broadened by the inclusion of the word «request».

     1.2. - During the Vienna Conference a joint proposal was submitted to add two new articles (see Official Records, I, 123). The first (Article 55 bis) dealt with partial payments and was not put to a vote, mainly since these problems were considered unimportant or already covered by the existing text (see Official Records, II, 370). The second (Article 55 ter) allowed the seller to refuse payment before the appointed date. Although the discussion evinced a certain sympathy toward this proposal, it was narrowly defeated by one vote (see Official Records, II, 370 et seq.). Nevertheless, the idea as such was not rejected, and it seems that [page 431] in practice a solution along the lines of the proposal could be derived from the Convention.

2. Meaning and purpose of the provision

     2.1. - Article 59 states that the price must be paid at the date agreed upon or determined by the Convention. It goes on to clarify that no requests or other formalities are needed in order to determine this date or to create the obligation to pay. This latter part of the obligation is, in practice, the more important one.

     2.2 - Following the general approach of the Convention (see in particular Article 6), priority is given to the parties' agreement relating to the date of payment. The parties may agree either on a certain calendar date for payment or make payment dependent on certain conditions, in particular on certain activities in the course of performance of the contract.

     2.3. - Absent an agreement to the contrary, the buyer has to pay the full price at the fixed date. If he pays only part of the price of the goods delivered, the seller is entitled to reject payment and exercise his remedies. If the seller accepts partial payment, he may nevertheless withhold the goods or documents until full payment has been made, when delivery and payment are concurrent conditions. If he does not or is not entitled to do so, he may rely on his remedies for his claim for the rest of the price.

     2.4. - The same points are true for earlier payment. Since the buyer is obliged to pay at the fixed date as indicated in Article 59, the seller is not obliged to accept payment before that date. Just as Article 52(1) expressly permits for the symmetrical case of delivery, the seller may reject payment, but according to the principle of good faith he must do so immediately. On the other hand, nothing prevents the seller from accepting earlier payment. When he does so and suffers a loss because of currency fluctuations, the question may arise as to whether he is entitled to damages. At the Vienna Conference it was felt that this depended on the terms of acceptance (see Official Records, II, 370). It is clear that if the seller only accepts earlier payment as [page 432] fulfillment of the contract under an appropriate reservation he may claim for losses caused by currency fluctuations subsequent to payment, but prior to the due date. Where the seller simply takes payment and does not react at all, it must be assumed that he has accepted earlier payment; in principle, he is guarding himself against the possibility of detrimental devaluations of the currency received. The seller then would have no right to claim damages, when he does not (immediately) refuse payment prior to the due date or accept under reservation. But the situation is not entirely clear. The interpretation should follow Article 52(1), though the situation is somewhat distinguishable from that of deliveries, in which mostly the buyer has to act (see Article 60).

     2.5. - In some legal systems like the French law and the other national laws influenced by it, a formal reminder is required to put the debtor in delay, while other legal systems (that of the Federal Republic of Germany, for instance) require an informal reminder, at least when the date for performance is not determined according to the calendar. As the last part of Article 59 makes clear, such national rules do not apply within the scope of the Convention. That means that the due date should be determined in such a manner that either the date itself or the facts on which it depends are known to both parties, but at least to the buyer in order to enable him to fulfil his obligations. The facts on which the date of payment depends should also be chosen in such a way that evidence is available in case of litigation. These requirements usually are fulfilled if the date of payment is determined by Article 58 of the Convention, but they should also be observed when deviating clauses are agreed upon.

If the facts on which the determination of the date of payment depends become known to the buyer only immediately before that date, it might be difficult for him to make payment. In general the Convention contains no provisions to avoid such difficulties. In some case usages according to Article 9 may allow the buyer a short additional period to prepare himself for payment (see commentary on Article 58, supra, § 2.4.). But, difficulties can be avoided by agreeing in advance to exchange information, such as a notice for special cases as foreseen in Article 32(1). It goes without saying that generally the buyer must prepare himself for payment based on the dates of the seller's performance. [page 433]

3. Problems concerning the provision

     3.1. - The question may arise as to whether an invoice is also a request or a formality in the sense of Article 59. Where the invoice is part of the documents controlling disposition of the goods (in particular, where the buyer has to clear the goods through customs authorities) (see commentary on Article 58, supra, § 3.1.), the buyer may refuse to pay if no invoice is submitted. Similarly, the invoice doubtlessly has to be considered a precondition to payment if the price or a part of the price to be paid is not definite. This would be the case when modifications of the price depending on certain conditions are agreed upon or when the price includes components not determinable at the conclusion of the contract. But when such special conditions do not exist the question is open. Generally, the invoice should be looked upon as a precondition for payment. Absent a contractual stipulation to the contrary, the sending or handing over of invoices should be viewed as a usage in the sense of Article 9(2). Both parties need the invoice for their bookkeeping. Often invoices are required in order to obtain the authorizations necessary under currency regulations. Therefore, the buyer should not be considered in delay of payment as long as no invoice has been submitted. When special forms of invoices (confirmation by a consulate) are required this must be agreed upon in the contract, since generally such requirements are not covered by usage. [page 434]


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