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Reproduced with permission of 11 Vindobona Journal of International Commercial Law and Arbitration (2007/1) 81-97

Features of Article 35 in the Vienna Convention;
Equivalence, Burden of Proof and Awareness

Thomas Neumann [*]

  1. Purpose of Paper
  2. Understanding Art. 35 CISG
  3. Case Law
  4. The Theory of Equivalence
  5. The Basis for Art. 35 CISG
  6. Burden of Proof Governed by CISG
  7. Non-Conformity
  8. Intention and Interpretation
  9. Unreasonable Reliance or No Reliance
  10. Awareness of the Buyer
  11. Conclusion

1. PURPOSE OF PAPER

1. The focus of this paper is the similarities and differences that appear in the scope of section (1) and (2)(b) of Art. 35 CISG in certain situations. It will be investigated to what extent the two sections apply equally and if a party will have an advantage from distinguishing between the two sections. However, the paper is limited to the situations stated below.

2. Throughout the paper an example will be used as a point of reference. The example is: The Buyer contacts the Seller to purchase goods. When doing so, the Buyer has in mind a specific idea of how he wants to use the goods. The Buyer's specific idea is not stipulated directly in the contract with the Seller. This paper concerns only fact situations matching this and its focus is limited to sections (1) and (2)(b) of Art. 35 CISG.

2. UNDERSTANDING ART. 35 CISG

3. From the structure of Art. 35, it is obvious that the duties of the Seller are primarily determined from the terms of the contract. The CISG acts only as a gap-filling device, due to the Convention hierarchy.[1] Having the contract as a starting point in Art. 35, merely expresses the widely accepted party autonomy.

Art. 35 CISG:

(1) The seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract.

(2) Except where the parties have agreed otherwise, the goods do not conform with the contract unless they:

(a) are fit for the purposes for which goods of the same description would ordinarily be used;

(b) are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller's skill and judgement;

(c) possess the qualities of goods which the seller has held out to the buyer as a sample or model;

(d) are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods.

(3) The seller is not liable under subparagraphs (a) to (d) of the preceding paragraph for any lack of conformity of the goods if at the time of conclusion of the contract the buyer knew or could not be unaware of such a lack of conformity.

4. According to section (1) of Art. 35 CISG, the Seller must deliver as required by the contract. From a literal approach to section (1), it seems that only expressly stated requirements in the contract are used to determine the duties of the Seller. However, this understanding is too narrow. Statements made by a party are to be interpreted according to the intention of that party if the receiver of the intention knew or could not be unaware of that intention.

5. In addition, the intention of a party will be interpreted in accordance with the understanding that a reasonable receiver of the information would have had. This follows from Art. 8 CISG which is located in Chapter II of the Convention containing general provisions and thereby making it applicable to all statements, including those regarding the determination of contract content.[2] The result of using Art. 8 in determining the content of the agreement is that both express and implied statements constitute duties for the Seller. Also implied statements that the Seller could not be unaware of or that a reasonable Seller would have understood[3] impose duties with which he must comply. Compared with the example given in paragraph 2 of this paper, a duty for the Seller to deliver goods conforming with the specific idea that the Buyer had in mind might be derived from the contract and the circumstances without the need to use section (2) of Art. 35 as a gap-filling device. The result is a duty under Art. 35(1) for the Seller to comply with the implied specific idea that the Buyer had in mind if this idea has been made known to the Seller or if he could not have been unaware of it.

6. Where a contract is deemed too unclear to settle the duties of the Seller, section (2) of Art. 35 will apply as a gap-filling device. According to section (2), the Seller has to deliver goods fit for ordinary use (a) or with a particular purpose of the goods if such a purpose was made known to the Seller (b). Furthermore, the Seller must deliver in accordance with a sample or model (c) and packed in an adequate manner (d). In the example given supra para. 2 of this paper, the Buyer had a specific idea in mind regarding how he intended to use the goods. If the contract is deemed unclear thus making section (2) of Art. 35 relevant, the issue is whether the Seller will have a duty to deliver goods fit for that specific idea (particular purpose) for the requirements of section (2)(b) to be fulfilled.

7. From a literal approach to the provision, it is required that the particular purpose is made known to the Seller at the time of conclusion of the contract. In addition, it is stated that the particular purpose can be made known to the Seller both expressly and impliedly. By allowing the duties of the Seller to be derived from implied intentions, it is acknowledged that the particular purpose does not need to be based on an express contractual agreement.[4] This is in accordance with the fact that the second sentence of Art. 35 only applies in situations of unclear contractual agreements. Determining the duties of the Seller from the implied intentions of the Buyer requires an interpretation of the statements of the Buyer. The Convention provides the tools for such interpretation in Art. 8. It states that the intention of the Buyer is understood according to the intention where the Seller knew or could not be unaware of that intention.

8. Article 8 provides the general rule on interpretation of statements and, by having recourse to this article, uniformity of the Convention is promoted. Article 8 applies equally in interpreting unilateral acts of a party as well as interpreting a mutual contract.[5] It is not restricted to certain acts or statements but is applicable to all acts and statements both prior to and subsequent to the conclusion of contract.[6] The result is a duty under both Art. 35 (1) and (2)(b) for the Seller to comply with the implied specific idea that the Buyer had in mind, if this has been made known to the Seller, or if the Seller could not be unaware of it, cf. Art. 8.

9. In section (2)(b), it is stated that the Seller only has to comply with the particular purpose made known to him if the Buyer relied on the Seller's skill and judgment and it was reasonable for the Buyer to do so. The duty to comply with a particular purpose is based on the principle of fairness,[7] meaning that only when the Buyer reasonably relied on the Seller's skills and judgment is the duty to comply with that purpose imposed on the Seller. Reliance occurs when the Seller is a professional or an expert within the field of which the Buyer intends to use the goods, no matter that the Buyer himself holds knowledge in the same area.[8] On the other hand, there is no reliance in cases in which the Buyer acts contrary to advice from the Seller, for example, by insisting on a particular brand or method of production[9] and thereby having influence on the manufacture or specifications of the goods.[10] The requirement of reasonableness in the Buyers reliance on the Seller's skills is generally not fulfilled if the Seller is merely an intermediary[11] in the procurement of the goods or the skills and judgment capacity is uncommon in the Seller's branch of trade.[12] From the wording of section (2)(b), reasonableness of the Buyer's reliance on the Seller is a requirement for imposing a duty on the Seller.

10. A Buyer purchasing goods relies on the Seller's skills to the same extent regardless of the qualification of the purchase under Art. 35(1) or (2)(b). It would seem far-fetched to claim that a Buyer who has made his specific intentions impliedly known to the Seller under Art. 35(1) CISG does not rely on the Seller's skills when the order is placed to the same extent as mentioned above in para. 9 concerning Art. 35(2)(b).

11. The question now is whether the Buyer's reliance on the Seller's skills and judgment under section (1) of Art. 35 is required to be reasonable since it does not appear from the wording of either section (1) of Art. 35 nor from Art. 8. This does not appear from the wording of section (1). However, it appears from Art. 7(1), that in interpreting the CISG regard is to be had to its international character, the need to promote uniformity and the observance of good faith. Reading reasonableness into every article of the CISG promotes good faith, uniformity and gives regard to the international character of the CISG.[13] The principle of reasonableness is linked with the principle of good faith[14] and is to be found in other transnational legal systems, for example; 'reasonableness' is directly defined in both PECL 1:302 and the CENTRAL List of Lex Mercatoria principles, rules and standards No. I.2 as well as being mentioned numerous[15] times in UPICC and CISG. The standard of 'reasonableness' seems fundamental and can be traced back hundreds of years in time.[16] This confirms that the principle of "reasonableness" truly is a basic international principle. It is also one of the general principles underlying the CISG.[17] This is confirmed inter alia in a court decision from Switzerland dated 29 October 2003.[18] Here a Buyer was allowed to pay the Seller through a third party since the circumstances were to be understood this way by a reasonable person.

12. Reading a requirement of reasonableness into the Buyer's reliance on the Seller's skills in section (1) of Art. 35 is in harmony with promoting good faith, it gives regard to the international character of the CISG, and by avoiding introducing domestic standards it secures uniformity. The result is that reasonableness in the Buyer's reliance on the Seller's skills is required under Art. 35(1) to impose a duty on the Seller to comply with the implied intention that the Buyer has made known to the Seller, or that the Seller could not be unaware of.

3. CASE LAW

13. It is confirmed in case law that Art. 8 is used to interpret the agreement under Art. 35(1). In the Textile printing machine case,[19] the parties had expressly stipulated in their written agreement that a used machine should be able to use stencils from 641 mm to 1018 mm. The Supreme Court of Switzerland refers to Art. 8(2) and, in light of non-contractual circumstances, finds that '641 mm to 1018 mm' is to be understood as only '641mm', meaning that it was agreed, in spite of the wording of the contract, that the machine would only hold stencils at 641 mm. The non-contractual circumstance considered by the Court was the fact that the Buyer had earlier inspected the machine and later informed the Seller that he would take over the machine complete and operating as viewed. The case shows that the duties of the Seller according to section (1) of Art. 35 must be seen in the light of Art. 8.

14. In the Spanish paprika case,[20] the German Court found the goods did not conform according to Art. 35(1). The result was based on non-contractual circumstances. Specifically; Buyer and Seller had a long standing business relation, the Seller had regularly exported to the Buyer's country before, and the Seller was informed by the Buyer that the paprika was to be controlled by an independent institute. These circumstances, which are not spelled out in the contract between the parties, imposed a duty on the Seller to deliver paprika that was in compliance with the German food safety laws. By not doing so, the Seller breached his obligations under Art. 35(1). The case confirms that non-contractual circumstances can be used to impose duties on the Seller without moving from section (1) of Art. 35 to section (2).

15. There is also support in case law for consideration of non-contractual circumstances in determining the duty of the Seller to comply with a particular purpose in accordance with Art. 35(2)(b). In the Globe case,[21] the German Court found that non-contractual circumstances imposed a duty on the Seller to deliver goods with a long-term operational life. The written contract between the parties was silent concerning operational life. However, from the fact that the goods were expensive to produce and transport, that they were highly sophisticated and that the Seller knew that the goods were to be used in the Buyer's branches, it was impliedly agreed that the Seller had a duty to deliver goods with a long-term operational life. The case shows that non-contractual circumstances can impose duties on the Seller according to Art. 35(2)(b).

16. Finally, in the Cheese labeling case,[22] the French Court found that a Seller had a duty to deliver cheese labeled according to French marketing regulations, cf. Art. 8(1). The agreement on labelling was in dispute. The Court stated that 'it is thus appropriate to ascertain what the intent of the contracting parties was from the indications which they have been able to provide.' The circumstances then considered were that the parties had prior dealings and that the Seller knew that the cheese was destined for the French market. According to Art. 8(1) this imposed a duty on the Seller. The Court found that the Seller delivered non-conforming goods by not complying with the French marketing regulations. Even more interestingly, the Court refers only to Art. 35 as a whole and not to either section (1) or (2). The Court briefly mentions that labeling is regulated by Art. 35 but this is true for both section (1) and (2).

4. THE THEORY OF EQUIVALENCE

17. Using Art. 8, duties derived from section (1) of Art. 35 CISG include implied as well as express intentions. The use of Art. 8 in connection with section (1) of Art. 35 is confirmed in the Textile printing machine case.[23] From the wording of section (2)(b) in Art. 35, it is seen that duties here are also derived from implied intentions.

18. Case law confirms that it is possible to derive the duties of the Seller from non-contractual circumstances both under section (1) as confirmed in the Spanish paprika case[24] and under section (2)(b) as confirmed in the Globe case.[25]

19. Finally, the duty of the Seller to comply with the Buyer's specific idea of how he intends to use the goods applies under section (1) only to the extent that the Buyer reasonably could rely on the Seller's skill and judgment. This is required in section (1) as it promotes good faith, uniformity and gives regard to the international character of CISG. The Seller's duty is limited the same way under section (2)(b) but here the requirement appears directly from the wording of the provision as well as from the arguments concerning section (1) regarding the need to promote good faith, uniformity and give regard to the conventions international character.

20. By acknowledging the above, it is seen that the sphere of application of section (1) and (2)(b) of Art. 35 is equivalent in situations in which a Buyer has impliedly made known to the Seller a specific intention of how to use the goods, or where the Seller could not have been unaware of such intention. This could explain why the Court in the Cheese labeling case[26] does not distinguish between the two sections of Art. 35. The scope of section (1) and (2)(b) in this case is identical -- leaving no need to distinguish between them. Neither the Seller nor the Buyer will benefit from such a distinction if sphere of application is equivalent and if the distinction does not affect the legal position of a party in other relations. This and the basis for Art. 35 will be investigated below.

5. THE BASIS FOR ART. 35 CISG

21. Art. 35(2)(b) is modelled on 2-315 UCC and section 14(3) of the UK Sale of Goods Act 1979.[27] The provisions are virtually identical in the three bodies of law, all requiring that the Seller comply with a particular purpose that has been made known to the Seller or that the Seller could not be unaware of.

22. From the wording of UK Sale of Goods Act section 14(3), it appears that the Seller has a duty to comply with a particular purpose that the Buyer has expressly or impliedly made known to the Seller. The duty is limited by the Buyer's reasonable reliance on the Seller's skill and judgment. The similarity with Art. 35(2)(b) of the CISG is striking.

23. As demonstrated above, Art. 35(1) and the contractual duties also includes implied intentions due to the use of Art. 8 CISG. In section 14(1) of the UK Sale of Goods Act, it is stipulated that there is, as a starting point, no implied condition or warranty concerning the quality of the goods supplied under a contract of sale. At least from the wording of section 14(1) the possibility to impose a duty from implied intentions of the Buyer by using non-contractual circumstances seems excluded. Thereby, the equivalence between contractual duties and the gap-filling rule as it is found in the CISG is not to be found in the UK Sale of Goods Act 1979.

24. UCC 2-315 matches both Art. 35(2)(b) CISG and UK Sale of Goods Act section 14(3) by imposing a duty on the Seller to comply with a particular purpose that he has reason to know. The duty is also here limited by the Buyer's reasonable reliance on the Seller's skill and judgment.

25. The extent to which the UCC allows implied intentions to impose a duty on the Seller before turning to the gap-filling rule in 2-315 is determined by several provisions. In 2-314(3), it is stipulated that other implied warranties may arise from the course of dealing thereby allowing non-contractual circumstances to impose a duty. This has similarities with Art. 9 in the CISG but not with Art. 8. However, UCC 1-201(3) defines an "agreement" as the bargain of the parties in fact as found by their language or by implication from other circumstances including course of dealing and usage of trade. This provision seem more open to non-contractual circumstances and is more similar to Art. 8 CISG than Art. 14(1) of the UK Sale of Goods Act.

26. At least from its wording, the UCC shows a greater similarity with the starting point of the CISG than Art. 14(1) of the UK Sale of Goods Act. In addition, this shows that it is mainly the use of Art. 8 CISG together with Art. 35(1) CISG that causes the theory of equivalence in cases of a specific implied idea of how the Buyer intends to use the goods. The equivalence does not seem to appear to the same extent in the national laws from which the CISG was inspired. This could explain why the theory of equivalence was not prevented or foreseen when drafting the CISG. If Art. 35(1) and Art. 35(2)(b) CISG in particular situations are identical, would it then be irrelevant for a party to choose whether he wants to assert one or the other? This will be dealt with in the following sections.

6. BURDEN OF PROOF GOVERNED BY CISG

27. A party claiming non-performance will have to choose if he wants to assert section (1) or (2)(b) of Art. 35 CISG in certain situations. Even though the scope of the two sections is similar, it is of utmost importance to consider possible advantages and disadvantages caused by differences in the burden of proof in the two sections.

28. The first hurdle is to consider if the CISG governs burden of proof at all. Art. 4 states that the Convention governs the formation of the contract, and the rights and obligations of the parties. In addition, the provision expressly excludes questions of validity and property in the goods. As seen, the burden of proof is neither expressly included nor excluded from the scope of the Convention, cf. Art. 4.

29. Several reasons support the conclusion that burden of proof falls within the scope of the Convention. First of all, the CISG actually contains the word 'proved' in Art. 11 and the word 'proves' in Art. 79. The latter provision is the strongest indication of a direct regulation of burden of proof. The CISG expressly deals with burden of proof in Art. 79.[28] In Art. 79, it is stipulated that: 'A party is not liable for any failure to perform [...] if he proves that [...]'. The wording expressly indicates who bears the burden of proof and it would therefore seem far-fetched to claim that the CISG is not at all concerned with the burden of proof. Even though a few courts have excluded the burden of proof from the CISG, the majority of court decisions acknowledge that burden of proof is within the scope of the CISG.[29]

30. Secondly, the CISG contains a number of provisions that include some sort of legal presumption. A provision containing a legal presumption also regulates the burden of proof as one of the parties must bring proof to shift the presumption.[30] An example of such a legal presumption in the CISG is in Art. 35(2)(a). It is seen from the wording of this provision that unless otherwise agreed, there is a default duty for the Seller to deliver goods that are fit for ordinary use. It is, in other words, presumed that goods must be fit for ordinary use. The Seller can remove the duty by proving that something other than that was agreed upon, but as a starting point the Seller must deliver in accordance with section (2)(a). In this way, the legal presumption also regulates the burden of proof.

31. Thirdly, the effect of Art. 7 CISG is that one should fill the gaps of the CISG using the general principles underlying the Convention before turning to domestic law. This will favor an autonomous concept of the Convention, give regard to its international character and promote uniformity as required by Art. 7 and as described supra in para. 11.[31]

32. In the Tribunale de Vigevano case,[32] the Court promotes one of the most important goals of the CISG, uniformity, by the extensive use of foreign case law[33]. The editorial remarks on the case show that the judge was aware of the important goal of uniformity by stating that 'foreign jurisprudence should be taken into consideration with 'regard' to promoting uniform application of the CISG and the observance of good faith, as mandated by Art. 7(1).' The decision is an impressive example of how the international character of CISG is achieved in highly debated issues by extensive use of references to foreign case law.[34]

33. No matter how convincing and illustrative the Tribunale de Vigevano case[35] may be, there is no question that there does not exist a supra-national court from which binding precedents (stare decisis) officially can be derived. There is, however, some evidence of an ipso facto stare decisis -- an adherence to foreign decisions where such decisions are widely referred to by courts as exemplified in the Tribunal de Vigevano case.

34. As already described, reference to foreign court decisions promotes uniformity and gives regard to the international character of the CISG by staying within the body of the Convention instead of turning to highly varied domestic laws. As an example, ipso facto stare decisis is seen both by widely used references to cases like the New Zealand mussels case[36] as well as the extensive use of references to foreign decisions in the Tribunale de Vigevano case. In the latter case, the Court referred to numerous foreign decisions and awards[37] thereby truly giving regard to the international character of the CISG and the need to promote uniformity.

35. The prevailing view in scholarly writings appears to be that burden of proof is at least implicitly governed by the CISG.[38] The burden of proof is a lacunae intra legem (matter governed but not settled) that has to be dealt with by means of general principles of the CISG in order to promote uniformity of the Convention.[39] The CISG indirectly deals with the burden of proof and the majority of legal writers and court decisions opine that burden of proof is, in a basic sense, covered by the CISG.[40] The scholarly opinions, the demonstrative case law and the arguments in favor provide distinct support for an ipso facto stare decisis which seems to be the correct approach to the burden of proof issue. Burden of proof should be considered within the scope of the CISG to the extent that the substantive issue is governed by the Convention.

36. The general principle concerning burden of proof that is identified in case law is as follows: The party deriving legal benefit from a legal provision or an exemption has to prove the existence of the factual prerequisites of the provision.[41] In the Tribunale de Vigevano case, the Court confirmed that a party who raises a claim also bears the burden of proof[42] by stating that 'The burden of proof rests upon the one who affirms, not the one who denies.'

37. Regarding burden of proof as within the scope of the Convention, the following will evaluate the extent to which a party may have an advantage by alleging non-conformity pursuant to Art. 35(1) or to Art. 35(2)(b) in situations where the theory of equivalence applies.

7. NON-CONFORMITY

38. Under Art. 35(1), the Buyer must prove that the goods do not fulfil the contract.[43] The same is true under Art. 35(2)(b) where the Buyer must prove that the goods are not fit for the particular purpose.[44] Claiming non-conformity will be a legal benefit to the Buyer and therefore he has to prove the existence of facts supporting his claim. This is the main principle concerning burden of proof as described supra para. 36 and confirmed in the Tribunal de Vigevano case.[45]

39. There are exceptions to this rule in cases where the Buyer either rejects or gives immediate notice on receipt of the goods.[46] These exceptions, however, seem to apply equally in cases of non-conformity no matter whether section 35(1) or (2)(b) is used. Consequently, the burden of proving non-conformity of the goods is the same under (1) and (2)(b) of Art. 35. As a result, the starting point under both section (1) and (2)(b) of Art. 35 is that it is the Buyer who has to prove that the goods are not in conformity with the contract.

40. Under both sections, it seems that there is a legal presumption that the Seller must deliver either according to the contract (section (1)) or the particular purpose (section (2)(b)). In both cases, the Seller can escape this presumption by showing that something else was agreed.

8. INTENTION AND INTERPRETATION

41. Determining conformity of the goods with the contract is closely linked to the agreement between the parties. It is therefore of interest to determine who bears the burden of proving intentions and the interpretation of the intentions of the parties. As described supra para. 8, Art. 8 is used inter alia to determine the content of the agreement between the parties. Since it is for the Buyer to prove if the goods do not conform, the Buyer will have to support this by proving that the goods do not conform with the intentions that form part of the agreement. This is a natural consequence of the main principle of benefit and burden of proof as described supra para. 36.

42. The acting party must prove that addressee knew the real intent.[47] The intention of the offeror prevails under Art. 8(1) if the offeror can show that the offeree either knew or could not be unaware of the intention.[48] A Buyer claiming non-conformity must prove that the Seller was aware of or could not be unaware of the particular purpose,[49] since this is the support he needs for the claim according to the main principle of benefit and burden of proof. Under Art. 8(1), it is not enough to prove the intention but also that its interpretation is unmistakeable should be proved.[50] The burden is less onerous since it is merely necessary for the Buyer to prove that the Seller 'could not be unaware' of the intention,[51] which is more objective than 'ought to have known' the intent. All relevant circumstances are to be considered, cf. art. 8(3).[52]

43. In Art. 35(2)(b), it appears directly from the wording of the provision that the particular purpose can be impliedly made known to the Seller. From the theory of equivalence as described supra para. 20, this is understood as an intention of which the Seller knew or could not be unaware of. Art. 8 CISG applies to interpreting the intentions of any party and is not restricted to or excluded from being used in interpreting intentions related to section (1) and (2)(b) of Art. 35 CISG. Using Art. 8 in interpreting all statements will promote uniformity of the Convention since introduction of national standards will be avoided. In other words, the possibility of having an implied intention constitute a duty of the Seller results from recourse to Art. 8. Due to the theory of equivalence and the wide scope of Art. 8, the burden of proving intent under section (2)(b) is the same as the burden under section (1) of Art. 35 CISG. Therefore, it is for the Buyer to prove that the Seller knew or could not be unaware of the intent of a particular purpose under Art. 35, sections (1) and (2)(b).

44. In the event that the Buyer cannot prove that the Seller knew or could not have been unaware of the intention, the standard of a reasonable person in Art 8(2) will apply. In Art. 8(2) the general rule of burden of proof applies so that the party who benefits must bear the burden of proof.[53] The offeror's intention will then prevail under Art. 8(2) if he can show that this would have been the understanding of a reasonable person in the same circumstances as the offeree.[54] To the same extent, a Seller can prove that a reasonable person in his place would have had a certain understanding. As described, Art. 8 applies equally to situations of interpretation of statements. The standard of a reasonable person will therefore be used in interpreting statements in connection with both section (1) and (2)(b) of Art. 35. Due to the recourse to Art. 8, the burden of proof in regard to intention and interpretation of intention is the same no matter whether proceeding under section (1) or (2)(b) of Art. 35.

9. UNREASONABLE RELIANCE OR NO RELIANCE

45. As described supra paras. 9-12, the duties of the Seller only apply to the extent that the Buyer reasonably relied on the Seller's skills and judgment both under section (1) and (2)(b). The question now is: Who bears the burden of proving either the existence or deficiency of a reasonable reliance?

46. Reliance appears when the Seller is an expert in the area or holds himself as such no matter if the Buyer himself holds knowledge in the same area.[55] Reliance is not justified in situations in which the Seller informs that he is merely an intermediary, does not possess the required knowledge, where the skills required are not usual in the branch of trade, or where the Buyer acts contrary to advice from the Seller.[56] It seems natural that a Buyer under normal circumstances should be able to rely on a Seller to the extent that the Seller does not indicate inadequacies. In other words, there is a presumption that a Buyer relies on the skills of the Seller if nothing else is indicated and that the Buyer should be able to do so. By presuming that a Buyer by default should be able to rely on the skills of a Seller, it is acknowledged that the Seller bears the burden of proving that the exception of either no reliance or unreasonable reliance applies. This follows from the main principle of benefit and burden of proof as described supra para. 36.

47. Concerning Art. 35(2)(b), the Seller must prove that the Buyer did not rely on, or that it was unreasonable for him to rely on, the Seller's skills and judgment.[57] It seems far-fetched to claim that the reliance on the Sellers skills and judgment is different depending on whether one is proceeding under either section (2)(b) or (1). Where a Buyer contacts a Seller for the purpose of purchasing goods that comply with the particular intention the Buyer has in mind, as already demonstrated, the Seller's acceptance of the order with this implied intention understood imposes a duty on the Seller no matter whether one is proceeding under section (1) or (2)(b). Claiming that the Buyers reliance on the Seller to deliver conforming goods is different depending on which of these provisions applies seems fictitious. In addition, it is for the Buyer under both section (1) and (2)(b) to prove the non-conformity, as well as his intention and its unmistakeable interpretation. If the Buyer succeeds in doing so, he has proved the facts supporting his claim and the burden then shifts onto the Seller, who has to prove that the presumption of reliance does not apply resulting in benefit for the Seller. Separating the burden of proof, depending on which of these sections of Art. 35 applies seems contradictory to this main rule of benefit and burden of proof, since the starting point in the two sections is the same. As a consequence of applying the main rule of burden of proof, the burden to prove that the Buyer did not rely on, or that it was unreasonable for the Buyer to rely on, the Seller's skill and judgment is on the Seller under both section (1) and (2)(b) of Art. 35.

10. AWARENESS OF THE BUYER

48. The Seller is not liable for a non-conformity under section (2) (a)-(d) if the Buyer knew of or could not be unaware of such lack of conformity, cf. section (3) of art. 35 CISG. This exemption is by its wording limited to obvious lack of conformity and requires more than gross negligence by the Buyer.[58] There is no doubt that section (3) applies in connection with section (2) since this appears from the wording. The question is whether section (3) applies in connection with section (1) as well.

49. On one side, some authors argue that extending section (3) analogously to section (1) is unjustified based on the need to keep a clear distinction between conformity according to Convention criteria and contractual provisions.[59] In addition, it appear from the wording that section (3) does not seem to apply to section (2) and the Norwegian proposal to include section (1) in its scope was rejected.[60]

50. On the other hand, case law shows that section (3) has been applied in connection with section (1). In the Caterpillar bulldozer case,[61] the Court found that a second-hand bulldozer was in conformity with the contract, cf. Art. 35(1), and that the Buyer by inspecting the bulldozer and being informed of defects before conclusion of the contract was aware of the non-conformity, thereby removing the Seller's liability, cf. Art. 35(3).

51. Another example is the Used car odometer case,[62] where the Court clearly presumes that Art. 35(3) can be used in connection with section (1). The Court states that the difference in mileage and year of first registration between the contract and reality constituted a non-conformity, cf. Art. 35(1). In addition, the Court states that because the Seller should have had knowledge of this and did not disclose it to the Buyer, the Seller lost the right to rely on section (3). This presumes, as a starting point, that section (3) can be asserted in connection with section (1), but because the behavior of the Seller has the characteristics of fraud, he deserves no advantage compared with even a negligent Buyer.

52. In the Resale of sport items case,[63] the Court ruled that a Buyer who buys goods despite their manifest lack of conformity is deemed to have accepted the goods as they are, cf. Art. 35(3). The principle found in 35(3) can also be derived from Art. 36 and the principle of good faith. It seems to be in harmony with good faith and fair dealing to find that any Buyer who is aware of a certain characteristic of the goods is supposed to have accepted these characteristics if he does not object to these before concluding the contract. This reasoning also seems to be the background for the result in the Caterpillar bulldozer case[64].

53. It is hard to decide to what extent section (3) should apply to section (1), since there are good arguments for both points of view. A strong indication that it should not be applied is that it was actively rejected when drafting the CISG. On the other hand, one must acknowledge that case law has actually applied section (3) in connection with section (1) and that this seems to be in harmony with the principle of good faith.

11. CONCLUSION

54. As demonstrated in this paper, there are great similarities between the scope and burden of proof under section (1) and (2)(b) of Art. 35 in cases involving a duty to comply with an implied intention of the Buyer. However, there is still the unsettled question of the limitation of the Seller's liability under section (3). Minor uncertainties appear in regard to whether burden of proof is governed by the CISG, but the arguments in favor seem better founded than arguments for applying section (3) in connection with section (1) of Art. 35.

55. I provide a chart of the legal conclusions reached in this paper. From the chart it appears that Art. 35(1) and Art. 35(2)(b) in the majority of issues show great similarities. Consequently the subsumption under one or the other seems without importance in the particular situation set forth supra para 2.

Art. 35(1)   Art. 35(2)(b)  
Duties of the Seller derived from expressly stated intentions? Yes Yes
Duties of the Seller derived from impliedly stated intentions?   Yes Yes
Duties of the Seller depending on a reasonable reliance? Yes Yes
Non-contractual circumstances used to determine duties? Yes Yes
Is Art. 8 used to interpret statements? Yes Yes
Who must prove non-conformity? Buyer Buyer
Who must prove intention and its interpretation? Beneficiary Beneficiary
Who must prove unreasonable or no reliance? Seller Seller
Is the Sellers liability limited by Art. 35(3)? Uncertain Yes


FOOTNOTES

* Student, Ba. Jur. at University of Aarhus. The author wishes to express his sincere thanks to LL.D. Petri Keskitalo, University of Tromso, PhD René Franz Henschel, Aarhus School of Business and fellow law student Lauren Sanders, The Australian National University for their support.

1. See Joseph Lookofsky, Understanding CISG in the USA, 2nd, 2004, Kluwer Law International, at p. 64; René Franz Henschel, The Conformity of Goods in International Sales, 2005, Thomson, Gad Jura, at p. 147; Peter Schlechtriem and Ingeborg Schwenzer, Commentary on the UN Convention on the International Sale of Goods, 2nd English, 2005, at p. 413.

2. René Franz Henschel, The Conformity of Goods in International Sales, at p. 148; Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, 1992, Oceana Publications, at p. 47.

3. René Franz Henschel, The Conformity of Goods in International Sales, at p. 161; Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 413.

4. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 421.

5. UN General Assembly, UNCITRAL Digest of Case Law on the CISG Art. 8, 2004, <http://www.uncitral.org/uncitral/en/case_law/digests/cisg.html>.

6. Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 44.

7. C. M. Bianca and Michael Joachim Bonell, Commentary on International Sales Law, 1987, Dott. A. Giuffré Editore, Milan, at p. 271; Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 109.

8. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 422.

9. Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 109.

10. René Franz Henschel, The Conformity of Goods in International Sales, at p. 237.

11. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 422.

12. C. M. Bianca and Michael Joachim Bonell, Commentary on International Sales Law, at p. 275.

13. Albert. H. Kritzer, Reasonableness -- Overview Comments, <http://www.cisg.law.pace.edu/cisg/text/reason.html>.

14. Joseph Lookofsky, Understanding CISG in the USA, at p. 35.

15. Reasonableness is referred to in 38 articles in UPICC and in 28 articles in CISG.

16. According to Larry DiMatteo, The Counterpoise of Contracts: The Reasonable Person Standard and the Subjectivity of Judgement, South Carolina Law Review Winter 1997 p. 293-355, the principle is referred to by inter alia Saint Thomas Aquinas in the 13th hundred and the Greek philosopher Aristotle in the 4th hundred BC.

17. Joseph Lookofsky, Understanding CISG in the USA, at p. 36; C. M. Bianca and Michael Joachim Bonell, Commentary on International Sales Law, at p. 81.

18. Tribunale d'appello Lugano, Contone del Ticino, Switzerland, 29 October 2003, cisg-online.ch no: 912

19. Roland Schmidt GmbH v. Textil-Werke Blumenegg AG, Bundesgericht, Switzerland 22 December 2000, Cisg-online.ch number: 628

20. Landgericht Ellwangen, Germany 21 August 1995, Cisg-online.ch number: 279.

21. Landgericht München, Germany 27 February 2002, Cisg-online.ch number: 654.

22. M. Caiato Roger v. La Société Francaise de Factoring, Appelate Court Grenoble, France 13 September 1995, Cisg-online.ch number: 157.

23. Roland Schmidt GmbH v. Textil-Werke Blumenegg AG, Bundesgericht, Switzerland 22 December 2000, Cisg-online.ch number: 628.

24. Landgericht Ellwangen, Germany 21 August 1995, Cisg-online.ch number: 279.

25. Landgericht München, Germany 27 February 2002, Cisg-online.ch number: 654.

26. M. Caiato Roger v. La Société Francaise de Factoring, Appelate Court Grenoble, France 13 September 1995, Cisg-online.ch number: 157.

27. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 421.

28. Stefan Kröll, Selected Problems Concerning the CISG's Scope of Application, Journal of Law and Commerce Vol. 25 2005-06 p. 39-57, <http://www.cisg.law.pace.edu/cisg/biblio/kroll.html>, at section 3. a.

29. UN General Assembly, UNCITRAL Digest of Case Law on the CISG Art. 4, 2004, <http://www.uncitral.org/uncitral/en/case_law/digests/cisg.html>.

30. René Franz Henschel, The Conformity of Goods in International Sales, at p. 111.

31. See also: Albert. H. Kritzer, Reasonableness -- Overview Comments, <http://www.cisg.law.pace.edu/cisg/text/reason.html>.

32. Rheinland Versicherung v. Atlarex and Allianz Subalpina, Tribunale de Vigevano, Italy, 12 July 2000, Cisg-online.ch no: 493.

33. Francesco G. Mazzotta, The International Character of the UN Convention on Contracts for the International Sale of Goods: An Italian Case Example, 2003, <http://www.cisg.law.pace.edu/cisg/biblio/mazzotta.html>, at section: "The Decision".

34. Francesco G. Mazzotta, The International Character of the UN Convention on Contracts for the International Sale of Goods: An Italian Case Example, 2003, <http://www.cisg.law.pace.edu/cisg/biblio/mazzotta.html>, at section "The Decision".

35. Rheinland Versicherung v. Atlarex and Allianz Subalpina, Tribunale de Vigevano, Italy, 12 July 2000, Cisg-online.ch no: 493.

36. René Franz Henschel, Conformity of the Goods in International Sales Governed by CISG Art. 35: Caveat Venditor, Caveat Emptor and Contract Law as Background Law and as a Competing Set of Rules, Nordic Journal of Commercial Law issue 2004 #1, at section 4.1 last paragraph; Bundesgerichtshof, Germany, 8 March 1995, Cisg-online.ch no: 144.

37. Throughout the text of the decision, references are made to American, Austrian, Dutch, French, German, Italian and Swiss cases as well as ICC arbitral awards. More than 50 references to decisions are made.

38. Franco Ferrari, Burden of Proof under the CISG, Review of the Convention on Contracts for the International Sale of Goods, Kluwer International 2000-2001, 1-8, <http://www.cisg.law.pace.edu/cisg/biblio/ferrari5.html>, at section II.

39. Franco Ferrari, Burden of Proof under the CISG, at section III, last para.

40. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 72 and p. 140.

41. UN General Assembly, UNCITRAL Digest of Case Law on the CISG Art. 4, 2004, <http://www.uncitral.org/uncitral/en/case_law/digests/cisg.html>.

42. Francesco G. Mazzotta, The International Character of the UN Convention on Contracts for the International Sale of Goods: An Italian Case Example, 2003, <http://www.cisg.law.pace.edu/cisg/biblio/mazzotta.html>, at section 3, last para.

43. René Franz Henschel, The Conformity of Goods in International Sales, at p. 112. UNCITRAL Digest Art. 4.

44. René Franz Henschel, The Conformity of Goods in International Sales, at p. 219 and p. 238.

45. Rheinland Versicherung v. Atlarex and Allianz Subalpina, Tribunale de Vigevano, Italy, 12 July 2000, Cisg-online.ch no: 493.

46. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 432.

47. Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 48.

48. C. M. Bianca and Michael Joachim Bonell, Commentary on International Sales Law, at p. 98.

49. René Franz Henschel, The Conformity of Goods in International Sales, at p. 219.

50. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 140.

51. Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 48.

52. Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 48.

53. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 140.

54. C. M. Bianca and Michael Joachim Bonell, Commentary on International Sales Law, at p. 99.

55. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 422.

56. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 422-423.

Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 102-103.

57. René Franz Henschel, The Conformity of Goods in International Sales, at p. 238.

Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 103.

58. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 426.

Fritz Enderlein and Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods; Convention on the Limitation Period in the International Sale of Goods, at p. 104.

59. C. M. Bianca and Michael Joachim Bonell, Commentary on International Sales Law, at p. 279.

60. Schlechtriem and Schwenzer, Commentary on the UN Convention on the International Sale of Goods, at p. 428.

61. Tribunal Cantonal Valais, Switzerland, 28 October 1997, Cisg-online.ch no: 328.

62. Oberlandsgericht Köln, Germany, 21 May 1996, Cisg-online.ch no: 254.

63. Tribunal Cantonal Valais, Switzerland, 29 June 1998, Cisg-online.ch no: 420.

64. Tribunal Cantonal Velais, Switzerland, 28 October 1997, Cisg-online.ch number: 328.


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