Barry Nicholas [**]
Since the U.N. Convention on Contracts for the International Sale of Goods has been in force for more than a year and since the states which have ratified or acceded to it include the United States, Australia, France and Italy and may soon include other members of the EEC, the time may be opportune for lawyers in this country to take account of its provisions and of its advantages and disadvantages.
The U.N. Convention was adopted at the conclusion, on April 11, 1980, of a Diplomatic Conference of 62 states convened in the Neue Hofburg in Vienna by the Secretary-General of the United Nations. It was open for signature until September 30, 1981 and since then has been open for accession. Article 99 provided that the Convention would enter into force 12 months after 10 states had deposited instruments of ratification, accession, etc. The requisite number was reached in December 1987 and the Convention therefore became effective on January 1, 1988. At the time of the April 1988 meeting of the United Nations Committee on International Trade Law (UNCITRAL) the following 16 states had ratified or acceded to the Convention: Argentina, Australia, Austria, China, Egypt, Finland, France, Hungary, Italy, Lesotho, Mexico, Sweden, Syria, United States, Yugoslavia, Zambia. It was reported that the Federal Republic of Germany and The Netherlands had initiated the legal process leading to ratification and that the matter was under active consideration by a number of other states. At the end of 1988 there had been one further ratification, that of Norway.
The Convention is, of course, intended to supersede the Uniform Laws on International Sales which were the subject-matter of two Conventions adopted at The Hague in 1964: one relating to the Uniform Law on the International Sale of Goods (U.L.I.S.) and the [page 201] other relating to the Uniform Law on the Formation of Contracts for the International Sale of Goods (U.L.F.). In what follows, unless it is necessary to specify one or the other, U.L.I.S. and U.L.F. will be referred to collectively as The Hague Uniform Laws. The two Conventions were ratified by Belgium, The Gambia, the Federal Republic of Germany, Israel, Italy, Luxembourg, The Netherlands, San Marino and the United Kingdom. The United Kingdom's ratification, however, was subject to the reservation that U.L.I.S. would be applicable only to contracts in which the parties chose it as the law of the contract. A German commentator has remarked of this reservation that it raised the question whether a state which resorts to it can really be said to have ratified at all. Certainly the United Kingdom's ratification seems to have had no practical result. There has been no reported case in the English or Scottish courts involving the Hague Uniform Laws and it is a reasonable assumption that British businessmen have had little or no recourse to them. Correspondingly little notice has been taken of them in legal literature in this country and one might easily imagine that they have from the beginning been an equally dead letter everywhere else. This would, however, be a misconception. That France, which had played a very large part in the drafting of the Laws, did not ratify was a disappointment, but the other five original members of the EEC all did so and some 180 reported decisions in their courts  show that the Uniform Laws have been important in practice. There has also been a substantial literature, including notably a massive German commentary.
Nevertheless, though the Hague Uniform Laws obtained this currency in Western Europe, they manifestly failed to attract support elsewhere and now that France and Italy have gone over to the U.N. Convention and the Federal Republic of Germany and The Netherlands are likely to follow, it is clear that the Hague Uniform Laws will soon be of no more than historical interest. In this context, however, "historical" may mean more than "academic," depending on the attitude of each jurisdiction to the relevance of travaux préparatoires. A little must therefore be said about the genesis of the U.N. Convention.
The Convention is the child of UNCITRAL, which was set up in 1966 to promote "the progressive harmonisation and unification of the law of international trade." One of the subjects to which at its first meeting, in 1968, it decided to give its attention was that of international sales. The replies to a questionnaire made it fairly clear that the Hague Uniform Laws, in spite of a gestation period of 35 [page 202] years (interrupted by the Second World War), were unlikely to obtain wide acceptance. The central reason for this was that they were by then seen as having a narrowly West European origin. Only 28 states were represented at The Hague and 19 of them were from Western Europe. The U.S.S.R. was not there; Latin America and the Third World were virtually unrepresented (which encouraged the belief that the Uniform Laws favoured the sellers of manufactured goods in developed countries); the United States, though well represented at The Hague, had not taken part in the earlier stages. UNCITRAL therefore set up a widely representative Working Group of 14 states to produce a new text which would be "capable of wider acceptance by countries of different legal, social and economic systems." The Working Group (on which the United Kingdom was represented throughout) was authorised to proceed either by modifying the Hague Uniform Laws or by elaborating a new text, but in practice it started from the Uniform Laws, though the eventual text was often a long way from this starting point. The Working Group completed its task in nine annual sessions. The resulting text was then revised by full meetings of UNCITRAL in 1977 and 1978 and the UNCITRAL text was itself revised by the Diplomatic Conference in 1980.
The U.N. Convention can therefore be said to be a radically revised version of the Hague Uniform Laws and the history of the revision may be relevant, even in this country .The successive texts are set out, with a convenient concordance, in the Appendices to the first commentary on the Convention to be published. The text of the Convention itself is included as an insert in the more concise commentary by Peter Schlechtriem. The most recent commentary, by 18 contributors from 15 countries  contains the text in all six U.N. languages and also the unofficial translations into German and Italian. All these books also provide extensive references to the relevant records and reports.
Since, however, the Hague Uniform Laws have been little noticed in this country, only occasional reference is made to them in what follows. The U.N. Convention is treated as far as possible as an independent text. Moreover, while a summary is given of the principal provisions of the Convention, more extended discussion is confined to those features which differ most markedly from English law or which [page 203] are most likely to cause difficulty. For the rest the reader should refer in the first place to the three Commentaries referred to above.
Structure of the Convention
There are not, as there were at The Hague, two separate conventions, but the single convention is divided, as far as its substantive provisions are concerned, into three parts. Part I (Articles 1-13) defines the Convention's sphere of application and contains provisions as to interpretation, usages and requirements of contractual form. Part II (Articles 14-24) deals with the Formation of the Contract and Part III (Articles 25-88) contains the main body of rules on Sale of Goods. Part IV (Articles 89-101) provides the public international law framework. In particular, Article 92 permits a Contracting State to declare that it will not be bound by Part II or Part III. (The Scandinavian states have indicated that they will exclude Part II when they ratify). Other articles allow special provision for federal states (93) and for states parties to regional arrangements providing uniform rules, such as Comecon (94), Other recognised reservations allow (95) the exclusion of Article 1(1)(b)  and (96) the exclusion of those provisions which allow freedom of contractual form. There is no provision for a reservation such as that under which the United Kingdom ratified U.L.I.S. and Article 98 lays down that no reservations are permitted except those expressly authorised in the Convention.
The concluding paragraph of the Convention provides that the texts in the six U.N. languages (Arabic, Chinese, English, French, Russian and Spanish) are equally authentic.
EXAMINATION OF THE CONVENTION
PART I -- SPHERE OF APPLICATION AND GENERAL PROVISIONS
When is a sale international?
The answer to this question is provided by Article 1, but this, like everything else in the Convention (save as provided by Article 12), is subject to the power to contract out. Parties to whose contract the Convention otherwise applies are bound by it unless they have excluded its provisions in whole or in part (Article 6).
Article 1(1) provides:
"This Convention applies to contracts of sale of goods between parties whose places of business
are in different States:
(a) when the States are Contracting States; or [page 204]
(b) when the rules of private international law lead to the application of the law of a Contracting State."
As we have seen, Article 95 allows a state to ratify or accede to the Convention on terms that it will not be bound by Article l(l)(b), The United States has made this reservation.
If we ignore the provision in (b) for the moment, a sale is international if the parties have their places of business  in different States. No other criterion, whether of the nationality of the parties or the location or intended movement of the goods, is relevant, If, for example, buyer has places of business in both Contracting State X and Contracting State Y and buyer's branch in State X places an order with seller, located in State Y, for the delivery of goods to buyer's branch in State Y, the Convention applies, but if buyer's branch in State Y places an order for delivery to buyer's branch in State X, the Convention probably does not apply. (Article 10 provides that if a party has more than one place of business, the relevant place is that which has "the closest relationship to the contract and its performance".) The rule in Article l(l)(a) can therefore be criticised as being, according to the circumstances, either too wide or too narrow, but it has the merit of clarity and simplicity.
This cannot be said of the rule in (b), which requires reference to "the rules of private international law" (presumably of the forum state), with the uncertainty which that introduces. The United States had a further reason for excluding the rule, a reason which, it may be thought, would apply to the United Kingdom also. In Appendix B to the Legal Analysis of the Convention which accompanied the Letter of Submittal  from the Secretary of State to the President, recommending that the President submit the Convention to the Senate for its advice and, consent to ratification, this further reason was expressed thus:
"this provision would displace our own domestic law more frequently than foreign law. By its terms, subparagraph (l)(b) would be relevant only in sales between parties in the United States (a Contracting State) and a non-Contracting State, (Transactions that run between the United States and another Contracting State are subject to the Convention by virtue of subparagraph (l)(a)). Under subparagraph (l)(b), when private international law points to the law of a foreign non-Contracting State the Convention will not displace that foreign law, since [page 205] subparagraph (l)(b) makes the Convention applicable only when 'the rules of private international law lead to the application of the law of a Contracting State.' Consequently, when those rules point to United States law, subparagraph (l)(b) would normally operate to displace United States law (the Uniform Commercial Code) and would not displace the law of foreign non-Contracting States.
"If United States law were seriously unsuited to international transactions, there might be an advantage in displacing our law in favor of the uniform international rules provided by the Convention. However, the sales law provided by the Uniform Commercial Code is relatively modern and includes provisions that address the special problems that arise in international trade."
Sale of goods
Article 1(1) confines the Convention to "contracts of sale of goods." There is no definition of a sale, but the statements of the obligations of seller (Article 30) and buyer (Article 53) imply a conventional definition. Article 2 excludes (a) "sales of goods bought for personal, family or household use," i.e. consumer sales (where there might be a conflict between the Convention and mandatory rules of domestic law for the protection of consumers ), (b) auction sales and (c) sales "on execution or otherwise by authority of law." As far as the meaning of "goods" is concerned, Article 2 also excludes sales of (d), "stocks, shares, investment securities, negotiable instruments or money"; (e) "ships, vessels, hovercraft, or aircraft"; (f) "electricity." In (e) the exclusion of "ships" and "vessels" gave rise to much discussion. In U.L.I.S. the exclusion was confined to registered ships and vessels, but this was rejected because national requirements for registration vary widely. There remains the question of the meaning of "ship" or "vessel." Does it include, e.g. a rowing-boat? Honnold  argues that it must, since no feasible line can be drawn. Schlechtriem  makes a partial return to the idea of registration by arguing that the policy behind the exclusion of ships and vessels is their special character. It may be added that the existence of equally valid versions in six languages multiplies the difficulty. The French translation is navires, bateaux. A rowing-boat is surely a bateau? [page 206]
Article 3 deals with the familiar question of the distinction between sale and contracts for services. A contract in which one party undertakes to supply goods to be manufactured or produced is a sale unless the other party supplies "a substantial part" of the materials involved; and a contract in which "the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or other services" is not a sale. This obviously leaves a lot to be settled by interpretation, particularly in the case of large, complex transactions, such as turn-key contracts. It also leaves open the question whether the transaction is to be construed as one contract or more than one. Of course, just as the parties may contract out of the Convention, they may also agree that it shall apply to a transaction to which it is, or may be, otherwise inapplicable.
(i) Validity and passing of property
Article 4 provides affirmatively that the Convention "governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer" and negatively that, except as otherwise expressly provided, "it is not concerned with (a) the validity of the contract or any of its provisions or of any usage; (b) the effect which the contract may have on the property in the goods sold." Domestic law will therefore regulate the excluded matters.
The passing of property was excluded because of the difficulty of reconciling national differences and, more especially, because the subject flows over into other areas outside the law of contract. The Convention does, however, regulate, as between the parties, a number of related matters, such as the seller's obligation to deliver goods free of third party claims  and the passing of risk.
Validity was excluded for several reasons. Questions of illegality and capacity belong fairly obviously to domestic law. Questions of mistake, fraud, unconscionability, etc., presented other difficulties. There are wide differences of approach between national systems and especially between common law and civil law and even if agreement could have been reached on a form of words, interpretations by national courts would almost certainly have destroyed the apparent unity.
There remains the question whether any particular issue is one of validity or one which is expressly provided for in the Convention. For example, some questions which in English law would be regarded as involving the seller's liability for defects (non-conformity), may in French law be seen as raising also an issue of either fraud or mistake. [page 207] The question must be answered, Honnold suggests, by applying the test of "whether the domestic rule is invoked by the same operative facts that invoke a rule of the Convention." By this test recourse to the domestic law of mistake would be excluded where a remedy is available under the Convention for non-conformity, but recourse to the domestic law of fraud would be open. Similarly recourse to domestic law would not be available where the goods had perished before the contract was made, since the operative facts are covered by Articles 30 (seller's duty to delivery) and 79 (impediment excusing a party from damages).
(ii) Liability for death or personal injury
Article 5 provides that the Convention "does not apply to the liability of the seller for death or personal injury caused by the goods to any person." This exclusion is important for those systems, such as French law, which exclude recourse to tort remedies between parties in a contractual relationship. In such systems the contractual remedy provides greater protection in case of personal injury than is accorded by the Convention, which is drafted with commercial damage in mind. In particular, Article 4 has the effect of excluding the short time limit for making a claim which is laid down by Article 39.
While, as we have seen, it is not open to States to ratify the Convention on terms that it applies only if the parties have chosen it as the law of the contract, the dominant theme of the Convention is the primacy of the contract. Article 6 provides that, subject only to Article 12, the parties are free to exclude or vary the provisions of the Convention in whole or in part. It is unfortunate that the text does not say that the exclusion may be implied, though this seems to be the more natural interpretation. Even if this is accepted, however, it will leave an area of doubt as to the readiness with which courts will make the implication. If, for example, the parties, who have their places of business in State X and State Y respectively (both being Contracting States), provide that the law of State X is to be the governing law, does this constitute an exclusion of the Convention? The wise course will be to make the exclusion explicit. [page 208]
Interpretation and the filling of gaps
(i) Interpretation of the Convention
Article 7 provides:
"(1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.
"(2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."
The reference to the Convention's international character and to the promotion of uniformity poses, of course, the question of the extent to which national courts are willing to have regard to the background of the Convention (including the travaux préparatoires), to the case-law of domestic tribunals as it develops and to doctrinal writing. There is no space for a discussion of this subject here, but it is obviously fundamental to the success of the Convention in practice.
The place of good faith was the subject of considerable controversy. In the Working Group it was proposed that the parties should be required to "observe the principles of fair dealing" and to "act in good faith" in the course of the formation of the contract. Objection was made to this especially by common law states, on the ground that although good faith and fair dealing were desirable and were indeed required by the domestic law of some states  the use of such undefined and elastic terms in a Convention which would be interpreted by courts of different traditions was bound to lead to discordant results. It was proposed as an alternative that good faith should be applied to the interpretation of the contract. This formulation would have approximated to the well-known "general clause" of the German Civil Code (B.G.B., s.242), which requires performance in good faith and which has been used in a very creative way by the German courts as a "maid of all work" to adapt and develop the law. This proposal also, however, was regarded by the common law states as posing too great a threat to commercial certainty. The present text was eventually adopted as a compromise.
Those who favour a provision such as B.G.B., s.242 may still argue, however, that it is embodied in the Convention. Eörsi, for example, argues that it is impossible to separate interpretation of the [page 209] Convention from interpretation of the contract; and Schlechtriem  suggests that since a number of articles require the parties to conform to the standard of reasonableness or the reasonable person; this can be regarded as one of the "general principles on which [the Convention] is based" envisaged in Article 7(2). Such a general principle, he suggests, could play the part of a "general clause" such as B.G.B., s.242.
This provision for reference to the "general principles" for the purpose of filling gaps was included in the hope of discouraging too precipitate a recourse to domestic law (provided for in the second part of Article 7(2)) It has to be said, however, that a court's view both as to whether there is a gap (as opposed on the one hand to something which, on a proper construction of the text, is already covered and on the other hand to something which is altogether outside the scope of the Convention) and as to whether there is a relevant general principle, will depend on how restrictive or extensive an approach it adopts to matters of construction. In particular, lawyers from codified systems are accustomed to finding general principles in the enacted law, whereas the common lawyer expects such principles to be found in the unenacted law. At least, however, it is clear that Article 7(2) requires a court to decide that there is no relevant general principle to be found in the Convention before it can have recourse to domestic law. And Article 7(1) requires it to have regard to the need to promote uniformity in the application of the Convention.
(ii) Interpretation of statements and conduct of the parties
The substance of Article 8, though not perhaps its formulation, is not likely to cause difficulty to an English lawyer. It starts, in paragraph (1), from the proposition that a party's statements or conduct "are to be interpreted according to his intent," but then confines this to the case where "the other party knew or could not have been unaware what that intent was." Paragraph (2) provides that in other cases such statements and conduct "are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances." This, as Feltham puts it, "is intended to ensure that the statements of a tractor salesman from a developed country to a Nusquamian [page 210] peasant are to be interpreted as they would be understood by the reasonable Nusquamian peasant."
Finally, paragraph (3) provides that in determining a party's intent or a reasonable person's understanding
"due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties."
This would entitle an English court to ignore what is left of the so-called parol evidence rule. In particular, it rejects the rule laid down by the House of Lords  that evidence of the subsequent conduct of the parties is inadmissible.
Usages and practices
The extent to which usages should be incorporated into the contract was the source of a good deal of difficulty. Developing countries and to some extent socialist countries viewed them with suspicion as the products of the developed, capitalist world and were therefore anxious to restrict the extent to which a party could be bound by a usage to which he had not agreed. The formulation in Article 9 therefore starts from the proposition (paragraph (1)) that the parties are bound by "any usage to which they have agreed and by any practices which they have established among themselves." Paragraph (2), however, sets up a presumption (rebuttable by evidence of contrary agreement) that the parties have
"made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned."
A party is therefore bound by a usage of which he did not know only if it is widely known and regularly observed in the particular branch of international trade involved and (which is likely in the ordinary case to follow from the foregoing) he ought to have known of it. It should be noted that if a usage Is confined to domestic trade it is not applicable, even if the parties were familiar with it.
This was from the very beginning one of the most difficult and controversial issues. U.L.I.S. had provided that neither writing nor any other form was required, though of course either party might [page 211] make his participation in the contract conditional on a formal requirement. The U.S.S.R., however, wished to protect its own rule, which it regarded as vital to the functioning of its foreign trade arrangements, that all international trade contracts should be in writing. This position, the polar opposite of the U.L.I.S. provision, was, however, unacceptable to most other States. The outcome was a compromise which maintains (Article 11) freedom from form as the basic rule, but (Article 12 and Article 96) allows a Contracting State "whose legislation requires contracts of sale to be concluded in or evidenced in writing" to make a declaration that any provision of the Convention that allows "a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention" to be made otherwise than in writing shall not apply where any party has his place of business in a State making the declaration. Of course it does not automatically follow that the formal requirements of the declaring State will apply. That will be so only if, under conflicts principles, the applicable law is that of the declaring State. Article 12, as we have seen, is the only provision in the Convention which the parties cannot exclude under Article 6.
PART II -- FORMATION OF THE CONTRACT
The Convention adopts the familiar analysis in terms of offer and acceptance. It was recognised that this analysis can only artificially be made to apply to some situations, but this is well known and lawyers are accustomed to the artificiality. To have attempted a different analysis would have added greatly to the difficulties of drafting. The detailed application of the analysis in the Convention does, however, present a number of stumbling blocks for the English lawyer.
The first sentence of Article 14(1) provides that "A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance." This was uncontroversial. But when is a proposal "sufficiently definite?" This raises in particular the problem of the fixed price. In some systems of law the price must be either determined or objectively determinable at the time of the formation of the contract. The U.S.S.R. and France among the developed countries were especially insistent on this. The French Cour de Cassation has in a series of decisions in recent years been particularly strict. It has, for example, declared void for lack of a fixed price a clause in a "solus" agreement made by a brewery for the supply of beer at the price usually charged [page 212] in the locality at the time of delivery. Some developing countries also were hostile to the freedom which a laxer rule would give to suppliers of manufactured goods from developed countries.
The answer given to the problem by the Convention is doubly obscure. The second sentence of Article 14(1) provides:
"A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price."
It is not clear whether this is a statement of necessary or merely of sufficient conditions, but the former seems the more natural interpretation, i.e. the word "only" is to be read into the sentence after the word "definite."
At first sight Article 55 might seem to offer an escape from this very rigid rule:
"Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned."
In view of Article 14(1), how can a contract be validly concluded without fixing or making provision for determining the price? The most obvious answer derives from the fact that Article 55 comes from Part III of the Convention. If a State has acceded to the Convention in respect of Part III and not of Part II, the question whether a contract has been validly concluded will be governed by the applicable domestic law and if that is, for example, English law there will be no problem.
If Article 55 is confined to this one situation it is unlikely to be of much importance. Honnold, however, regards it as also resolving the ambiguity of the second sentence of Article 14(1), which is therefore a statement only of sufficient conditions. But one may wonder whether courts in jurisdictions hostile to open price contracts will take this view.
If one assumes that Article 55 does not resolve the ambiguity in the second sentence of Article 14(1) and if one construes that sentence to state necessary conditions, there remains the question of the meaning of "expressly or implicitly fixes or makes provision for [page 213] determining ... the price." This seems to be more flexible than the French cases mentioned above. A reference to a catalogue which lists prices or to a particular market at the time either of the contract or of delivery must surely be sufficient. If the catalogue reserves the right to change prices or if the contract refers, as in the French brewery case referred to above, to the price charged in the area at the time of delivery, it can be argued that this constitutes "provision for determining the price." It is possible, however, that a French court might rely on Article 4(a), which excludes questions of validity from the scope of the Convention and hold that the requirement of French law that a party's obligation should have a fixed "object" is fundamental to the validity of this contract.
Apart from this possibility of discordant approaches by different jurisdictions, the matter is likely to be practically important (if what is said in the first part of the preceding paragraph is correct) only when there is no reference, even by implication, to a price, e.g. where a buyer places an urgent order by telephone. Even then, of course, if the parties have had business dealings before, it may be possible to find a "practice" under Article 9.
Article 14(1) is expressed in terms of an offer being a proposal "addressed to one or more specific persons." Article 14(2) provides that proposals not so addressed are to be considered merely as invitations to make offers unless the contrary is clearly indicated by the person making the proposal. A mail order catalogue may be sent to specific persons, but the "proposals" in it are not addressed only to those persons, but to anyone who may see the catalogue.
Withdrawal and revocation of an offer; firm offers
Starting from the rule that an offer becomes effective when it reaches the offeree (Article 15(1)) and an acceptance becomes effective when it reaches  the offeror (Article 18(2)), the Convention makes a distinction between withdrawing and revoking an offer. Withdrawal occurs before the offer is effective, revocation afterwards. Withdrawal is effective if it reaches the offeree before or at the same time as the offer (Article 15(2)). Revocation is effective if it reaches the offeree before he has dispatched an acceptance (Article 16(1)). So far there is nothing (except the terminology) to disturb the English lawyer. But Article 16(2) introduces the question of the irrevocable (or firm) offer. Here common law and civil law are in disagreement. Civil law systems in [page 214] general regard an offer as irrevocable either for the period indicated for its acceptance or, if there is no such period, for a reasonable time. For the common law, of course, the doctrine of consideration stands in the way of such an approach, though American law  has moved further in the civil law direction than English law. In the Convention consideration has no place. Article 16(2) declares an offer to be irrevocable.
"(a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is
(b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer."
The provision in (b), though not accepted in England, is known in the United States, but (a) may contain a trap for the unwary common lawyer. For the common lawyer, stating a fixed time for acceptance is prima facie no more than an indication that after that time the offer, unless revoked meanwhile, will lapse. For the civil lawyer it indicates that the offer is irrevocable until that time. In order to state the civil law view unequivocally the text of (a) would have to run: "if it indicates a fixed time for acceptance or otherwise indicates that it is irrevocable." The formulation as it stands is ambiguous. The common lawyer can lay the stress on the need for an indication of irrevocability, the civil lawyer can treat the fixing of a time as providing such an indication. The ambiguity is not the result of an oversight. At the Vienna conference a United Kingdom amendment designed to clarify the text in the common law sense was rejected, but so also was a West German amendment in the opposite sense. A trader in a common law country which adheres to the Convention will be wise to make his meaning clear on this point.
Postal transactions 
There are three familiar questions.
(a) If the offer is revocable, when does the offeror lose the power to revoke? Here the Convention has the same rule as the common law: the dispatch of an acceptance bars revocation (Article 16(1)). It must be noticed, however, that the dispatch is relevant [page 215] only for this purpose. As has been said already, it is the moment of receipt which is relevant for the effectiveness of the acceptance as such.
(b) Up to what moment can the offeree withdraw his acceptance? The Convention, contrary to the predominant common law view, allows withdrawal up to the moment when the acceptance reaches the offeror (Articles 22 and 18(2)). It can be objected that, since Article 16 prevents the offeror from revoking his offer once the acceptance has been dispatched, this allows the offeree to speculate at the expense of the offeror during the time that the acceptance is in transit.
(c) At what point does the risk of loss of an acceptance or delay in its transmission pass to the offeror? Here again the common law applies the rule of dispatch, but the Convention applies the general rule that an acceptance is effective on receipt. It is therefore for the offeree to inquire if he receives no response to his acceptance, whereas under the common law the burden is on the offeror.
The general rule, then, is that acceptance is effective when it reaches the offeror, provided that it does so within the time he has fixed or, if no time is fixed, within a reasonable time (Article 18(2)). Article 21 addresses the problem of the late acceptance. Prima facie it follows from the general rule that a late acceptance has no effect, but Article 21(1) provides that the offeror may nevertheless make it effective by so informing the offeree without delay. While this does enable the offeror to take advantage of any market changes in his favour, it is of course balanced by the fact that the offeree could in the meanwhile have withdrawn his acceptance under Article 22.
Article 21(2) makes special provision for the case where the acceptance
"shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time."
In this case the burden is on the offeror to inform the offeree without delay that he considers his offer to have lapsed. To this [page 216] extent the risk is shifted on to the offeror. The question does not, of course, arise in the common law, where the acceptance would have been effective from the moment of dispatch.
"The battle of the forms" 
The Convention makes a very small contribution to this problem. Article 19(1) states the traditional "mirror image" rule, that an acceptance which adds to or modifies the "terms of the offer constitutes only a counter-offer. Article 19(2) and (3) then qualify this as follows:
"(2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.
"(3) Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially."
Since paragraph (2) is confined to such differences as do not "materially alter" the terms of the offer, its effect is likely to be no more than to put on the offeror the burden of objecting "without undue delay" to merely verbal differences between offer and reply. A court which is tempted to enlarge the scope of the paragraph by a restrictive interpretation of what constitutes a material alteration will run up against paragraph (3), which is so widely drafted as to include most alterations about which there could be any difference of opinion. Virtually any standard form is likely to come within paragraph (3). An arbitration clause, for example, relates to the "settlement of disputes."
Granted, however, that even within domestic systems any solution to the problem is controversial, it was not to be expected that an international body would be able to make a radical contribution. Nor perhaps was it to be desired. It may indeed be thought that it would have been better, in the interests of certainty, to have left paragraph (1) unqualified. As they stand, however, paragraphs (1) and (2) are likely to do no more than to provide a [page 217] court with a justification for ignoring minor distortions in the mirror.
PART III - SALE OF GOODS
(i) Fundamental breach
Part III begins - and a common lawyer can hardly complain at this - with a matter relevant to remedies. "Fundamental breach" is a central concept in the Convention's system of remedies. It is a pre-requisite of avoidance of the contract by either party  and also of the buyer's right to require delivery of substitute goods in case of non-conformity. And it is also important in the rules governing risk.
Article 25 provides:
"A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and reasonable person of the same kind in the same circumstances would not have foreseen such a result."
Since any attempt to define so broad a concept is bound to attract criticism, it may be useful to give also the text as it had been agreed by UNCITRAL  in 1978:
"A breach by one of the parties is fundamental if it results in substantial detriment to the other party unless the party in breach did not foresee and had no reason to foresee such a result."
The change from one to the other was the outcome of a lengthy debate at Vienna, in which a number of views emerged, but it would seem that the purpose of the change in the first part was to replace a broad definition in terms of unfocussed detriment by one which looked to the injured party's expectations under the particular contract. It approximates, it has been suggested,  to the German test of whether the injured party can be said to have no further interest in the performance of the contract. An English lawyer may find (perhaps misleading) similarities with the test propounded by Diplock L.J. in Hong Kong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd., viz., whether the breach deprives the injured party of "substantially the whole benefit which it was the intention [page 218] of the parties as expressed in the contract that he should obtain. ..." And no doubt lawyers from other systems will find an appropriate echo of something familiar. It has been rightly remarked  that "a general concept can only be defined exactly if the cases of application can be listed one by one." Otherwise one is tempted to say that a circular definition is as good as any, For what a court has to decide is whether the breach is of such seriousness as to justify avoidance  and it is likely to do so according to the methods to which it is accustomed.
The second part of the article does not specify the time at which the party in breach had to foresee or should have foreseen the result, but since the detriment is defined in terms of expectation under the contract, it might seem that the conclusion of the contract, not the moment of breach, should be the determining time. On the other hand, a United Kingdom proposal in Vienna  to incorporate this into the text was withdrawn for lack of support and it can be argued that if, after the conclusion of the contract but before the time of breach, detriment of the type specified becomes foreseeable, the breach may be fundamental.
(ii) Risk or delay or error in communication
We have seen that in the case of the transmission of an acceptance of an offer, the "receipt principle" puts the risk of loss, etc., on the offeree (i.e. the person sending the acceptance). Article 27 lays down the opposite principle (i.e. the "dispatch principle") as governing "any notice, request or other communication" unless otherwise expressly provided in the Convention. The risk therefore is prima facie on the person to whom the communication is addressed.
(iii) Specific performance
In systems outside the common law, specific performance (including other remedies requiring performance in kind, such as the claim for payment of the price by the buyer or for repair or the delivery of substitute goods by the seller) is the logically prior remedy. Performance is what has been promised and it is performance therefore which the promisee is entitled to require. On this view damages are in principle only a substitute for actual performance. This way of looking at the matter is adopted by the Convention, but Article 28 preserves the position of common law jurisdictions by providing that: [page 219]
"a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar Contracts of sale not governed by this Convention."
In jurisdictions to which this provision does not apply, however, the priority of the specific remedies remains. In particular, they are not excluded simply because the aggrieved party could reasonably have been expected to make a substitute contract. To the common law mind this is surprising, but the omission was not due to an oversight. A proposal to rectify it was made at the Vienna conference, but was rejected. The reasoning behind the rejection is well expressed by Professor Will  from the standpoint of a German lawyer. The proposal, he says "would have done away with the remedy for all practical purposes and encouraged sellers to take their contractual obligations too lightly."
Though the gulf of principle between common law and civil law is thus profound, the difference in practice is probably less. For even in non-common law jurisdictions litigants very often prefer the remedy of damages to that of specific performance.
(iv) Modification and termination of the contract
Mere agreement is sufficient; there is no requirement of consideration (Article 29(1)).
Article 29(2) provides that a contract in writing which requires that any modification or termination shall also be in writing, cannot be modified or terminated in any other way, save that "a party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct."
Obligations of the seller
(i) Delivery of goods and documents and transfer of property
The seller is bound to transfer the property in the goods, but what he must do in order to discharge this obligation is, as we have seen, a matter for the applicable domestic law. The Convention contains detailed provisions concerning the delivery of goods and the handing over of any documents relating to them (Articles 31- 34), but these do not seem likely to cause difficulty for English lawyers.
(ii) Conformity of the goods
It is also unlikely that the substantive (as opposed to the remedial) provisions of the Convention in this [page 220] matter will cause difficulty for English lawyers. There is of course no talk of conditions and warranties, but the practical results and much of the detailed language are familiar. The general obligation of the seller is expressed in Article 35(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."
Paragraph (2) goes into more detail. It opens with the requirement, in sub-paragraph (a), that the goods should be "fit for the purposes for which goods of the same description would ordinarily be used." This is close to the definition of merchantable quality in section 14(6) of the Sale of Goods Act 1979 ("fit for the purpose or purposes for which goods of that kind are commonly bought"), but without the further elaboration which follows in that subsection and without of course resolving the difficulties which have been made in this country in recent years against the criterion of fitness for purpose.
Sub-paragraph (b) is very close to section 14(3) of the Sale of Goods Act 1979 (fitness for purpose made known to the seller) and sub-paragraph (c) is equivalent to section 15(2)(a) of the Act (sale by sample). Sub-paragraph (d) provides for adequate packaging.
The requirement of conformity must be satisfied at the moment that the risk passes, though the lack of conformity may become apparent only later (Article 36(1)). The question of how long the conformity must last (often referred to as "durability") is dealt with, rather confusingly, in terms of a lack of conformity which occurs after the passing of the risk (Article 36(2)). The seller is liable if this lack of conformity is "due to a breach of any of [the seller's] obligations, including a breach of any guarantee that for a period of time the goods will remain fit. ..." At the Vienna meeting there was discussion of the question whether the "guarantee" could be implied  and whether the "period of time" must be fixed by the guarantee, but in the ordinary case it should be possible to attribute a failure of durability to a breach of the [page 221] seller's obligation to deliver goods which are "fit" as defined in Article 35.
The English lawyer will find more to surprise him in the provisions as to when the buyer will lose (wholly or in part) the right to rely on a lack of conformity. This was one of the most contentious questions at the Vienna meeting. National systems vary widely in their answers. English law, with its complex interrelationship between acceptance, examination and the doing of an act inconsistent with the ownership of the seller, does not provide a persuasive model. Many civil law systems provide that the right to rely on a lack of conformity is lost by the lapse of time (either a fixed period or a reasonable time) from either delivery or the moment when the buyer discovered or should have discovered the lack of conformity. Moreover, whereas in English law what is lost is the right to reject and treat the contract as repudiated, in these systems all remedies arising out of the lack of conformity are barred. Where the period of time in question is quite short and, particularly where the starting-point is the moment of delivery, the effect on the buyer can therefore be harsh. On the other hand, the more the period is extended, the more insecure is the position of the seller, particularly in the event of re-sales.
There is therefore inevitably a tension between the interests of the buyer and the seller and this tension was accentuated at the Vienna meeting by the fact that the bloc of developing countries not unreasonably saw themselves as predominantly buyers of manufactured goods and sellers of primary products. And it is of course in regard to manufactured goods that the question under consideration is particularly important. There was therefore much debate. The outcome was a not altogether happy compromise. The basic rule is that the buyer must examine the goods as soon as is practicable and he loses his right to rely on the lack of conformity if he does not give notice of it to the seller (1) within a reasonable time after he has discovered it or ought to have done so, (2) in any case, within two years of the actual handing over of the goods (Article 39). As far as (1) is concerned, what is a reasonable time will obviously depend to some extent on the buyer's circumstances, but even apart from this he is allowed by Article 44 (but always subject to the limit of two years) to have recourse to the remedies of reduction of price  or damages (except for loss of profit) if "he has a reasonable excuse for his failure to give notice." To take [page 222] advantage of this concession the buyer must therefore be able to show that although he knew, or should have known, of the lack of conformity he nevertheless had a reasonable excuse for not giving notice. This combination of circumstances is not likely to occur frequently, but the formulation is broad enough to offer opportunities for dispute and for variant interpretations.
None of this will of course disentitle the buyer "if the lack of conformity relates to facts of which [the seller] knew or could not have been unaware and which he did not disclose to the buyer" (Article 40).
The basic rule that the buyer must examine the goods as soon as is practicable receives some elaboration for the (normal) case where the contract involves carriage of the goods and for the (not uncommon) case where "the goods are redirected in transit or redispatched by the buyer without a reasonable opportunity for examination by him. " In the first case the examination may be deferred until after the goods have arrived at their destination and in the second case until after they have arrived at the new destination, provided that "at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch" (Article 38(2), (3)). It is perhaps unfortunate that it is not made expressly clear that this provision covers the case where the redirection or redispatch is due to re-sale by the buyer, but this is the common-sense interpretation. The question is therefore whether the seller could reasonably foresee that the goods might be re-sold while in transit. The elaboration of modern packaging, particularly of high-technology products, and the widespread use of containers will make it easy for the buyer to show that there was "no reasonable opportunity for examination by him."
The provisions as to conformity are followed by similar provisions (Articles 41-) relating to the requirement that the goods be "free from any right or claim of a third party," including rights or claims based on industrial property or other intellectual property. There is nothing, however, to correspond to the two-year outer limit of Article 39(2).
Obligations of the buyer
The provisions as to the buyer's obligations to pay the price and take delivery of the goods (Articles 53, 54, 56-60) are not likely to present difficulties for English lawyers. [page 223]
Remedies of buyer and seller
These are dealt with separately in the Convention (Articles 45-52, 61-65), but may conveniently be considered together here.
(i) Repair or delivery of substitute goods
We have seen already  that the Convention accords priority in presentation to specific remedies. In addition to specific performance it provides two remedies unknown to the common law (Article 46). In case of lack of conformity the buyer may request the seller to repair the goods, unless this is in all the circumstances unreasonable. Or, if the lack of conformity constitutes a fundamental breach, he may request the seller to deliver substitute goods. In both cases the buyer's request must be made in conjunction with the notice of lack of conformity which is required by Article 39  or within a reasonable time thereafter. The buyer who contemplates resorting to these remedies obviously takes the risk that, if the matter comes to litigation, the court may hold that to require repair was unreasonable or that the lack of conformity was not sufficiently serious to constitute a fundamental breach. Unless repair or replacement is very difficult to obtain otherwise, he is likely to prefer the remedy of damages.
(ii) Seller's right to cure
On the other hand, the seller has a right to cure "any failure to perform his obligations" (including of course a failure to deliver conforming goods) and he can do so not only as in English law, before the time fixed for performance (Article 37), but also after (Article 48). The exercise of this right is subject to its not causing the buyer unreasonable inconvenience or unreasonable expense and to the buyer's right to damages. In the second case the exercise of the right is subject also to its not causing unreasonable delay  and, more importantly, to the buyer's right to avoid. The right to avoid, which obviously could nullify the right to cure, can only be exercised of course if the breach is fundamental and that in turn may depend on whether the breach can be cured within the limits of Article 48. Beyond this, the precise relationship between the two rights remains controversial. The seller can clarify the position by asking the buyer to make known whether he will accept late performance within a period specified by the [page 224] seller. If the buyer does not respond within a reasonable time, the seller is entitled to go ahead and perform. In the meantime the buyer may not resort to any remedy inconsistent with the seller's performance.
Another procedural device which will be strange to the common lawyer is the right of either party to fix an additional period of time of reasonable length for performance by the other party (Articles 47(1), 49(1)(b), 63(1), 64(l)(b)). This additional period is often referred to in the literature as the Nachfrist, from its partial similarity to a German institution of that name. During the period named the party fixing the period cannot resort to any remedy for breach of contract. Apart from this the direct legal effect is confined to cases of failure by the seller to deliver or by the buyer to take delivery or to pay the price. In these three cases, if the failure remains unremedied on the expiry of the Nachfrist, the other party is entitled to avoid the contract regardless of whether the breach is fundamental or not. In other words, the Nachfrist relieves that party from the risk that the original breach might be held not to have been fundamental (or rather substitutes for that risk the smaller risk that the length of the Nachfrist itself may be held to be unreasonable). A party may fix a Nachfrist (or indeed a series of them) in other cases also, but the only advantage is to give him time to consider what course of action to adopt in relation to the breach (and to encourage the other party to perform).
(iv) Reduction of price
This remedy, deriving from the actio quanti minoris of Roman law, is familiar to civil lawyers, but can cause difficulty for those from the common law tradition. In the form in which it appears in the Convention (Article 50), it entitles the buyer, in case of non-conformity of the goods, to reduce the price "in the same proportion as the value that the goods actually delivered had at the time of delivery bears to the value that conforming goods would have had at that time." If, for example, the contract price is £12,000, but at the time of delivery the market value of conforming goods has risen to £15,000 and the value of the goods actually delivered is £5,000, the buyer can refuse to pay more than one-third of the agreed price, i.e. £4,000 (or can reclaim £8,000 if the price had been paid in advance). In this case, however, the buyer will be better advised to claim damages (Article 74) based on his expectation interest, since the net price to him will then be £2,000. On the other hand, if the market value has fallen between contract and delivery, the balance of advantage may [page 225] be different. If the price is, again, £12,000 and the market value of conforming goods at the time of delivery is £4,000, the reduced price will be £6,000, whereas an award of damages will yield £8,000. In this case, however, the breach is obviously fundamental and the buyer will usually be advised to avoid the contract and recover the price. Normally therefore the remedy of reduction of price will be advantageous only if the breach is not fundamental. If, say, the contract price is £12,000, the market value at the time of delivery has fallen to £8,000 and the actual value of the goods is £7,500, the buyer will pay £11,150, whereas damages will yield £11,500. Reduction of price also has the advantage over damages that (assuming the price not to have been paid in advance) the buyer does not need to resort to a court.
A more important, though rarer, situation will arise when the buyer cannot resort to the remedy of damages because the lack of conformity is "due to an impediment beyond his control" (Article 79). In this situtation the restitutionary remedy of reduction of price protects the buyer.
Resort to the remedy of reduction of price or to any other remedy is not an obstacle to a claim for damages. (Article 45(2)). The buyer may therefore both reduce the price and claim damages for any consequential loss.
(v) Avoidance of the contract
A party may declare the contract avoided (a) if a failure by the other party to perform any of his obligations amounts to a fundamental breach  or (b) if the seller fails to deliver or the buyer to pay the price or take delivery of the goods within a Nachfrist fixed by the other party. The party avoiding the contract must do so within a reasonable time. The general rule is that this time runs from the moment when he knew or ought to have known of the breach or from the expiry of the Nachfrist. In the case of delay, however, either in delivery by the seller or in the payment of the price or the taking of delivery by the buyer, the other party is not required to take the risk of deciding how much delay will constitute a fundamental breach, but can, if he wishes, wait until the delayed performance is actually made. In these cases, therefore, the time runs from this moment. Alternatively, of course, the aggrieved party can fix a Nachfrist.
Avoidance of the contract releases both parties from their obligations under it, subject to any damages which may be due. [page 226] A party who has performed in whole or in part may claim restitution of anything supplied or paid. In form this entitles the seller to the return of goods delivered, but the extent to which this is attainable in practice will be limited by the restriction on specific remedies in Article 28  and by the fact that any question of the property in the goods or of the rights of creditors, will be governed by domestic law.
(vi) Remedies in cases of partial performance or excessive performance
The cases dealt with in Articles 51 and 52 are those in which the seller (a) delivers only part of the goods, (b) delivers all the goods, but some are non-conforming, (c) delivers before the date fixed, (d) delivers more than was contracted for. As far as (a) and (b) are concerned, Article 51 provides that the remedies discussed above apply in respect of the undelivered or non-conforming part. Assume, for example, that the contract is for 100 tons of wheat and seller delivers 100, but 10 are seriously defective. If the defectiveness of the 10 tons constitutes a fundamental breach of the entire contract (i.e. if the delivery of only 90 tons of conforming wheat substantially deprives buyer of what he is entitled to expect under the contract), buyer can avoid the contract (and claim damages). On the more probable assumption, however, that the defectiveness of the 10 tons does not constitute a fundamental breach of the entire contract, buyer may either (i) require seller to deliver substitute goods  for the 10 tons, or (ii) accept the full 100 tons and reduce the price  in respect of the 10 tons, or (iii) "avoid the contract" in respect of the 10 tons. This last may cause difficulty to an English lawyer, since a partial avoidance seems odd. And the expression is indeed unsatisfactory. What is meant is that if the defectiveness of the 10 tons is such as to deprive buyer of what he is entitled to expect with respect to the 10 tons, he may reject them and refuse any substitute delivery, without prejudice to the rights and duties of the parties as far as the 90 tons are concerned. Of course his right to do this is subject to seller's right to cure  if he can satisfy the requirements of Article 48.
The situation will be essentially the same if seller delivers only 90 tons (all conforming), save obviously that buyer's options are [page 227] fewer. Assuming that the non-delivery of the 10 tons does not amount to a fundamental breach of the entire contract, buyer may either fix a Nachfrist  with respect to the 10 tons (on the expiry of which he may refuse to accept any later delivery) or he may simply await events. In both cases of course he can claim damages.
In case (c), i.e. premature delivery, the buyer may refuse to take delivery of the goods (Article 52(1)), but, if he does so, he may be obliged to "take possession of them on behalf of the seller, provided that this can be done without payment of the price and without unreasonable inconvenience or unreasonable expense" (Article 86(2)). If he does so take possession (or if he decides to reject after having taken possession), "he must take such steps to preserve them as are reasonable in the circumstances" (Article 86(1)).
In case (d), i.e. delivery of more than the contract requires, the buyer may take delivery of the whole or may reject the excess (or any part of it). If he accepts any part of the excess he must pay for it at the contract rate (Article 52). Of course it may be impracticable to take delivery only of the contract quantity. The Convention does not expressly deal with this, but if the burden thrown on the buyer is substantial, the excess delivery may constitute a fundamental breach. If there is no fundamental breach, the buyer will have to accept the whole delivery and claim damages.
There are several obstacles in the way of any easy comparison between the provisions of the Convention and English law. First, there can be a great practical difference between the criteria in the two systems for determining whether the buyer can avoid the contract (or, in the language of the Sale of Goods Act, treat it as repudiated) particularly as a result of the fixed categorisation by the Sale of Goods Act of certain terms as conditions and the treatment by the courts of even a small breach of such conditions as ground for treating the contract as repudiated. Secondly, the rule in section 11(4) of the Act (that where the buyer has accepted the goods or part of them he cannot reject them and treat the contract as repudiated)  prima facie stands in the way of any partial avoidance. But this in turn is modified by section 30(4) which, as it has been interpreted by the courts, on the one hand allows partial acceptance and partial avoidance where the contract [page 228] quantity is delivered, but includes goods which are of a different description, and yet on the other hand does not allow it where the contract quantity includes goods which are defective. Thirdly, the Convention does not make a distinction between the cases where the contract is or is not severable, though in practice this question may be relevant in determining whether a breach is fundamental or not.
These special features of English law have, however, been widely criticized  and the Law Commission  has made proposals for reform. It was therefore not to be expected that they would be reflected in any fresh codification. The provisions of the Convention are much closer to the law as it is in the United States.
(vii) Seller's right to make specification
Article 65 makes special provision for the case in which the buyer places an order for goods but leaves until later the detailed specification of what is to be supplied and then fails to make the specification, thus making performance of the contract impossible. In these circumstances the seller's normal recourse, if Article 65 did not exist, would be to avoid the contract (assuming the breach to be fundamental) and/or to claim damages. Article 65, however, allows him to "make the specification himself in accordance with the requirements of the buyer that may be known to him." If he wishes to do this he must inform the buyer of the details of the specification and allow him a reasonable time within which to make a different specification. If the buyer fails to respond, he is bound by the seller's specification. This provision (the substance of which is to be found also in U.L.I.S) was the subject of controversy at the Vienna meeting. The objectors (led by the United Kingdom and the United States) maintained  that the provision was not in line with commercial practice and that the normal remedies of avoidance and damages would give the seller sufficient protection. Moreover, to make goods which were presumably not now wanted by the buyer and for which there would probably be no market was on the one hand wasteful and might on the other hand conflict with the seller's "duty" to mitigate damage. Against this it was argued that the provision kept the interests of the parties in balance by giving the [page 229] seller a carefully limited protection against abuse by the buyer. The conflict of view probably reflects the contrast between the primacy accorded by the civil law to specific remedies and the emphasis placed by the common law on damages, The German Commercial Code  has a provision similar to Article 65 and it is in the common law that the idea of mitigation is most fully worked out. Indeed in the French family of systems it is hardly developed at all.
Article 74 states the general rule in terms of foreseeability:
"Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract."
This embraces both the rules in Hadley v. Baxendale  (save that "a possible consequence" without any qualification may be said to be a weaker requirement than that which results from recent English decisions).
There then follow two articles stating special rules for most of the cases in which the contract is avoided and damages are claimed in addition to the avoidance. The general rule of Article 74 is therefore either residual, in the sense that it applies in situations which are not covered by the special rules, or supplementary, in the sense that, though the special rules apply, there is an additional head of damage not covered by them.
Article 75 applies where the contract has been avoided and the aggrieved party has made a substitute transaction (either a "cover" purchase of replacement goods by the buyer or a resale by the seller). In these two cases the aggrieved party can recover the difference between the contract price and the price in the substitute transaction, provided that the transaction was made "in a reasonable manner and within a reasonable time after avoidance." This method of assessment by reference to the actual price secured can be termed "concrete," by contrast with the abstract method, which refers to the market price. [page 230]
The abstract method is applied where the contract has been avoided, but there has been no substitute transaction (Article 76). And it is of course the abstract method which is embodied in the Sale of Goods Act (sections 50(2), 51(3)) as the prima facie measure in all sales, whether or not there has been a substitute transaction. In theory at least, therefore, the law of the Convention diverges from English law in cases to which Article 75 applies, i.e. when there has been a substitute transaction. The divergence will, however, be limited by the requirement that the substitute transaction must have been made "in a reasonable manner and within a reasonable time. " For if the seller re-sells at less than the market price (or the buyer makes a cover purchase at more than the market price), he will have difficulty in showing that he acted reasonably. On the other hand, if the seller re-sells at more than the market price, the Convention  debars him from having recourse to the abstract measure. This seems harsh  in that it gives to the party in default the benefit of a good bargain made by the aggrieved party, but the rule was adopted in the interest of certainty and to prevent abuse. Of course it will not be easy or even possible to identify the substitute transaction if the party making it is frequently in the market for such transactions. If the substitute transaction cannot be identified, the abstract measure of Article 76 will apply.
The moment at which the market price is to be calculated is in general the time of the avoidance of the contract, whereas the moment under the Sale of Goods Act  is (broadly) the time at which performance was due. The draft submitted to the Vienna conference was in substance quite close to this, but was rejected as being too uncertain. The practical difference between the two criteria is in fact in the ordinary case not great, since an aggrieved party who delays in avoiding the contract at a time when the market is changing may be held to have been in breach of his duty to mitigate. The uncertainty under the Convention's rule will therefore relate to whether the aggrieved party should have avoided earlier, whereas under the Sale of Goods Act's formulation it relates to when the performance was due. In one case, however, the practical difference between the two criteria is considerable, namely that of avoidance for anticipatory breach. The Sale of [page 231] Goods Act rule does give rise to difficulties in this case  and the likelihood of similar difficulties was one of the arguments adduced at Vienna in favour of the text actually adopted. To the general rule that the relevant moment is the time of avoidance there is an exception for the case in which the aggrieved party has avoided the contract after taking over the goods. In this case the market price is to be calculated at the time of that taking over. The purpose of this special rule was to prevent the buyer from speculating at the expense of the seller by holding defective goods until a fall in the market makes avoidance advantageous. The risk of such speculation is, however, small in view of the fact that the buyer will lose his right to avoid if he does not do so within a reasonable time after he knew or ought to have known of the breach. Moreover, if the buyer neither knew nor ought to have known of the breach until some time after the taking over, the rule has the curious result that the value of the goods is assessed by reference to a time when the buyer could not have avoided the contract.
In all the cases governed by Articles 75 and 76 further damages may of course be recovered under Article 74.
Article 77 provides for the aggrieved party's duty to mitigate his loss. As in English law, the consequence of a failure to do so is limited to a reduction in the damages recoverable by the other party. At Vienna the United States tried  to extend the scope of the consequence to include "a corresponding modification or adjustment of any other remedy." This would have applied, for example, to the seller's action for the price (which in the Convention  is seen as a form of specific performance) or to his claim for repair or the provision of substitute goods; but the proposal did not secure a majority.
(x) Anticipatory breach
The Convention adopts the doctrine of anticipatory breach in the wide form in which it is known in the common law. An express repudiation by the defaulting party is not necessary. It is sufficient that it is "clear" that he will default. The prospective default must, however, be such as to amount to a fundamental breach in order to entitle the aggrieved party to avoid the contract. [page 232]
(xi) Adequate assurance performance
Article 71 provides for the case in which, while it is not clear that one party will commit a fundamental breach of contract so as to justify avoidance for anticipatory breach, nevertheless the other party has good reason to fear that the first party will be unable to perform. In this case the other party may suspend performance or stop the goods in transit. He must resume performance if the other party "provides adequate assurance of his performance."
This provision gave rise to much debate. The causes of concern were that it could operate harshly, particularly against small businesses with limited credit backing, and that the assessment of ability to perform might be left too much to the subjective opinion of the first party. Though there is nothing of the kind in English law, apart from the tightly circumscribed right of stoppage in transit, there is a comparable provision in the United States Uniform Commercial Code  and another in the German Civil Code.
The formulation which eventually emerged is:
"(1) A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of;
(a) a serious deficiency in his ability to perform or in his creditworthiness; or
(b) his conduct in preparing to perform or in performing the contract."
In paragraph (1) there are two main problems of interpretation.
(a) What degree of certainty is required by "it becomes apparent," as opposed to the requirement for anticipatory breach under Article 72 that it be "clear" that the party in question will default? The difference of wording was deliberate  and was based in part on what was seen as a difference of meaning in the French text, which has il est manifeste in Article 72 and il apparaît in Article 71, the former being stronger than the latter. And this indeed might seem to be appropriate in view of the more drastic nature of avoidance as compared with suspension of performance. On the other hand, it can be argued  that such degrees of certainty cannot in practice be distinguished. [page 233]
(b) The second problem is that of the meaning to be given to "a substantial part of his obligations" and the relationship of this to the requirement in Article 72 of a prospective fundamental breach. Here the contrast in the severity of the respective consequences does call for a less demanding interpretation of Article 71.
Paragraph (2) provides for stoppage in transit and paragraph (3) requires the party who suspends performance to give immediate notice and to continue with performance if the other party gives adequate assurance of his performance. If he does not give such assurance, the aggrieved party will be able to avoid under Article 72 if in the particular circumstances the failure to give the assurance can be said to make it "clear" that the other party will commit a fundamental breach.
This matter is dealt with in Article 79, under the heading of "Exemptions." The article is one of the longest in the Convention and its drafting took up a great deal of time, but the outcome is in several ways unsatisfactory.
The main provision is in paragraph (1):
"A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and he could not reasonable be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences."
The meaning of the words "is not liable" is elaborated in paragraph (5):
"Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention."
This differs in a number of ways from the English law of impossibility and frustration.
(a) The effect is to provide the non-performing party with a defence against an action for damages, not to terminate the contract. To this we shall return.
(b) Again, the exemption from liability is in relation to the performance of "any of his obligations," not just to the performance of the contract as a whole. The non-performing party may therefore adduce an "impediment" within the meaning of paragraph (1) as a defence against an action for damages for partial non-performance. This may arise, for example, where the impediment causes delay in delivery .The other party cannot claim damages (but, if the delay amounts to a fundamental breach, he may avoid the contract). The defence may even avail, on one view, if the seller delivers defective [page 234] goods, i.e. if he is in breach of his obligation to deliver conforming goods. The difficulty here is to show that the defect is attributable to the requisite "impediment." The most likely case is that in which, in the state of technical knowledge at the time of the contract, the seller could not have discovered the defect. The impediment here would have to be the seller's ignorance, but to allow this to suffice would be to accept that a party can escape from liability for non-performance of any obligation simply by showing that he was not at fault. (Of course, even if it were conceded that the exemption applied, the buyer could still reduce the price or avoid the contract if the defect were such as to make the breach fundamental).
(c) The preceding discussion leads to a consideration of the central requirement that the non-performance be "due to an impediment beyond his control ..." The latter part ("beyond his control ...") echoes the French requirement that force majeure must be unforeseeable, insurmountable and irresistible, but this should present no difficulty to an English lawyer. The words "due to an impediment" are obviously very elastic and elasticity is particularly undesirable in an area such as this in which national systems differ very widely in the scope which they allow to doctrines variously labelled as impossibility, impracticability, force majeure, etc. But, as in the case of fundamental breach, it has to be conceded that concepts such as these, which are necessarily broad, cannot be precisely tied down in a legislative formula. The probability remains that this formula will be differently interpreted in different national courts. After much discussion in the drafting bodies the only substantial change in the formula between U.L.I.S. and the Convention was the substitution of "impediment" for "circumstances," as suggesting an event which was both subsequent to the conclusion of the contract and external to the seller and to the goods. One purpose of the change was to exclude questions of non-conformity from the ambit of the article.
(d) The formulation in terms of an impediment to performance excludes cases of frustration, as opposed to impossibility. A hypothetical case will show where the gap lies. Seller agrees in [page 235] January 1987 to manufacture and supply to buyer by June 1 certain equipment, both parties knowing that the equipment could only be manufactured at seller's factory at X. On February 1 this factory is burned down. Seller tells buyer that the factory will be rebuilt by December 1988. If one assumes that the fire qualifies as an exempting impediment within the meaning of paragraph (1), seller is not liable in damages for the delay. Paragraph (5) preserves buyer's right to avoid the contract if the prospective delay constitutes a fundamental breach. But seller has no complementary protection. He cannot avoid the contract if, owing to changed circumstances (e.g. enormous cost increases), performance in December 1988 would be radically different from performance in June 1987. He could of course argue that the increase in costs is itself an exempting impediment, but a court is unlikely to accept such an argument, and in any case buyer may be able to claim specific performance. To this question we must now turn.
(e) As we have seen, paragraph (5) leaves unaffected every remedy except that of damages. Reduction of price poses no problem and we have seen that the right to avoid can be useful. It is the right to compel performance that presents the difficulty. Of course in so far as the impediment makes performance actually impossible, any court will presumably refuse specific performance on the basis of Article 28. If, however, the impediment does not make the performance physically impossible, but is nevertheless held to fall within paragraph (1), it would seem that paragraph (5) preserves the remedy of specific performance (in courts in which it would normally be available). A proposed amendment which would have excluded this possibility was rejected at Vienna.
It may be added that the remedies available are in any case of course designed to deal with cases of breach, whereas Article 79 is not concerned with breach in any ordinary sense. The problems presented are those of adjusting the rights of two innocent parties -- of balancing benefits received against expenses incurred. The Convention does not attempt anything like the Law Reform (Frustrated Contracts) Act 1943.
(f) Paragraph (2) makes special provision (which is not found in U.L.I.S. or, I believe, in any domestic system) for the case where the failure to perform is due to a failure by a sub-contractor: [page 236]
"If the party's failure is due to the failure of a third person whom he has engaged to perform
the whole or a part of the contract, that party is exempt from liability only if:
(a) he is exempt under the preceding paragraph; and
(b) the person whom he has so engaged would be so exempt if the provisions of that paragraph were applied to him."
Suppose, for example, that seller contracts to make and supply a machine to buyer's specification and that he sub-contracts to X, who has a good reputation in the trade, the making of a component part. If X fails to deliver the component in time and buyer claims damages from seller for the consequential delay, it will not be sufficient (as it would be under paragraph (1) alone) for seller to say that X's production process is beyond his control and that he could not reasonably have been expected to anticipate X's failure. or to overcome it. He must also show that X's failure was beyond X's own control and that X could not have been expected to anticipate it or to overcome it.
This is obviously, in principle at least, a considerable tightening of the limits of exemption. Indeed in cases where the seller did not choose the sub-contractor, the rule of paragraph (2) may be harsh. This is particularly so where the sub-contractor was imposed on the seller by the buyer. In this case the seller's only protection seems to lie in Article 80:
"A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party's act or omission."
It would be necessary, however, to show that the buyer should have foreseen the possibility of the sub-contractor's default and that his failure to do so caused (at least to some extent) the seller's failure to perform.
The practical importance of the passing of risk is such that it will usually be regulated by the contract, either expressly or by the use of trade terms. In this context therefore it is more even than usually necessary to bear in mind Articles 6 and 9 of the Convention. Subject to this, the Convention provides, in Article 67, a primary rule for cases in which the sale involves carriage of the goods (which is obviously the typical situation in international [page 237] sales), a special rule for goods sold while in transit (Article 68) and, in Article 69, a residual rule for other cases.[67a] The passing of property is irrelevant to the passing of risk, both because, as we have seen, the Convention is not concerned with the passing of property and because this is commonly the case in international sales.
Article 67 deals only with cases in which "the contract of sale involves carriage of the goods." This has to mean  not simply that as a consequence of the sale the goods will be moved from one place to another, since this is true of virtually every international sale, but (a) that the contract requires or authorises the seller to arrange for the goods to be carried and (b) that the carriage will be by a third party, rather than by the seller or the buyer or their servants. In such cases, if the seller is not bound to hand over the goods at a particular place, the risk passes "when the goods are handed over to the first carrier for transmission to the buyer in accordance with the contract of sale. "If the seller is bound to hand over the goods to a carrier at a particular place, "the risk does not pass to the buyer until the goods are handed over to the carrier at that place." This will including both the case in which the seller carries the goods to "that place" in his own transport and the case in which he entrusts this to an independent carrier. (If the contract of sale involves carriage, but requires the seller to cause the goods to be handed over to the buyer at a particular place, the matter is governed by the residual rule in Article 69 and the risk will pass when the buyer takes over the goods. The policy of the article is that risk should pass at the beginning of the agreed transit, the buyer being normally in a better position than the seller to assess any damage which has occurred in transit and to pursue claims in respect of it. If the seller is not obliged by the terms of the contract to insure the goods, he is obliged by Article 32(3) of the Convention "at the buyer's request, to provide him with all available information necessary to enable him to effect such insurance."
Article 68 makes special provision for goods sold in transit (i.e. while already in the hands of a carrier). This was the subject of [page 238] considerable controversy at Vienna  and the interpretation of the resulting compromise is likely to give rise to difficulties and inconsistencies. The UNCITRAL draft provided for the risk to pass retroactively from the time when the goods were handed over to the carrier. The arguments in favour of this were that it represented the usual practice in international trade, that the matter was essentially one of trading and insurance techniques, the parties being more concerned with the sale of documents than with the sale of the goods themselves and that if the risk were to pass from the moment when the contract was made (i.e. while the goods were in transit), it would be necessary to establish exactly when the damage occurred and this would often be difficult or impossible. But the draft was vehemently opposed, particularly by representatives of developing countries, on the ground that it was both irrational and unjust to put the risk on the buyer before he had entered into the contract. It was also suggested that the buyer could have no insurable interest until that moment.
The final text states as the primary rule the position advocated by the opponents of the original draft, but provides for the rule in the draft to apply "if the circumstances so indicate":
"The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller."
Here everything turns on what is covered by "if the circumstances so indicate." One of those who took part in the discussions from which the text emerged  suggested that one such circumstance would be the inclusion in the contract of sale of a provision requiring the seller to transfer an insurance policy to the buyer. Since contracts for the sale of goods in transit do customarily include such a provision, this interpretation would give the rule in the second sentence a wide application.
Article 69 provides the residual rules:
"(1) In cases not within articles 67 and 68, 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 [page 239] disposal and he commits a breach of contract by failing to take delivery. .
"(2) However, if the buyer is bound to take over the goods at a place other than a place of business of the seller, 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.
"(3) If the contract relates to goods not then identified, the goods are considered not to be placed at the disposal of the buyer until they are clearly identified to the contract."
Here again the general policy is that the seller should bear the risk so long as he has control of the goods. Paragraph (2) provides for two types of case. In the first the buyer is to take over the goods from a third party, most commonly from a public warehouse. Here the policy considerations are different. The seller is in no better position than the buyer to protect and insure the goods or to pursue any claims arising. The policy is therefore that the buyer should bear the risk as soon as he is in a position to collect the goods. The paragraph also applies to the case in which the contract of sale involves carriage of the goods, but which is not covered by Article 67 because the seller is required to hand the goods over to the buyer at a particular place  (as in an ex ship contract).
Paragraph (3) presents a problem in relation to a case such as Sterns v. Vickers, in which there is a sale of an undifferentiated part of a bulk in a warehouse and the seller gives to the buyer a delivery order entitling him to collect the relevant quantity immediately. The policy of paragraph (2) requires that the risk should pass at once, but the words of paragraph (3) suggest that the risk would not pass until there has been some act of identification. This conflict seems to be due to a drafting oversight and the problem is best dealt with as it expressly was in U.L.I.S. Article 98(3): "Where unascertained goods are of such a kind that the seller cannot set aside a part of them until the buyer takes delivery, it shall be sufficient for the seller to do all acts necessary to enable the buyer to take delivery."
MERITS AND DEMERITS OF THE CONVENTION
There can be little doubt that in 1980 there was not much enthusiasm for the Convention among British trading and professional bodies. Their attitude would have been different if it had been possible, as it had been in the case of U.L.I.S., for the United Kingdom to accede to the Convention on terms that it [page 240] should apply only to contracts in which the parties had chosen it as the law of the contract, but there was never the remotest likelihood that such an option would be conceded.
It is not difficult to see a reason, apart from the natural conservatism of lawyers, for the lack of enthusiasm. At present many international commercial contracts are made according to English law and litigated or submitted to arbitration in London. We are fortunate in that we have a highly developed statutory and common law in commercial matters and that many standard form contracts, for example of international commodity trade associations, specify English law as the law of the contract. Of course, even if the United Kingdom were to accede to the Convention, it would still be possible to exclude its application to any particular contract (it is understood that at least one major trader already does so as a matter of standard form) and to provide that the applicable law should be the domestic law of England, but the fact that the Convention can be excluded is not an argument for acceding to it.
The argument for acceding to any convention such as this is that it provides an escape from the possible difficulties of determining the proper law and, if the proper law is not English, the possible pitfalls of an unfamiliar foreign system, in which the law of sale may be ill-adapted to modern commercial transactions. In his letter to the President of the United States, recommending that the Convention be transmitted to the Senate for its advice and consent to ratification, the Secretary of State put the matter thus:
"Sales transactions that cross international boundaries are subject to legal uncertainty -- doubt as to which legal system will apply and the difficulty of coping with unfamiliar foreign law. The sales contract may specify which law will apply, but our sellers and buyers cannot expect that foreign trading partners will always agree on the applicability of United States law. Insistence by both parties on this sensitive point can prolong and jeopardize the making of the contract."
Of course, acceptance of the Convention will not altogether remove the need for recourse to the rules of conflict of laws when issues arise which lie outside the Convention. The matter of validity, for example, can, as we have seen, raise difficult questions in this connection.
There is therefore a prudential argument in favour of the United Kingdom's acceding to the Convention and the argument presumably becomes stronger as the number of our trading partners who are [page 241] themselves parties to the Convention increases. But what of the intrinsic merits of the Convention?
The drafting would no doubt not satisfy the draftsmen at Westminster. This is partly because it reflects different national styles (including the British) in different articles, but also because it reflects the difficulty of international drafting, in which a stylistic improvement may be misunderstood, and opposed, as an alteration of substance. In general, however, the Convention does, I believe, compare well with many other international texts. A more important drawback of the Convention is the fact that the versions in all the six U.N. languages are equally authentic. This is, however, only one aspect of the much larger problem of securing uniformity of interpretation by a potentially very large number of national courts, when there is no court with power to give a final ruling. As a mitigation of this problem UNCITRAL is considering  the possibility of producing a review of case-law under the Convention, comparable to the Uniform Law Review produced by UNIDROIT.
Uniformity of interpretation will be particularly difficult to secure where very wide concepts are used, such as "the general principles on which [the Convention] is based," or "the observance of good faith in international trade," or fundamental breach, but difficulties such as this are inherent in any codification. What would in an ideal world have been avoidable are the compromises in which a text was left in a consciously ambiguous form in order to secure the appearance of agreement. These, as we have seen, include the provisions on the definiteness of the goods and, more particularly, the price, on firm offers, on risk in respect of goods sold in transit  and on good faith. Divergences of interpretation in these cases seem almost unavoidable. Moreover, the provisions on definiteness of price and firm offers, along with the possibility for Contracting States to declare that writing is essential, will constitute traps for unwary traders.
A number of provisions, particularly in the area of remedies, as we have seen, are quite novel for the English lawyer and some may be thought undesirable, such as the elasticity of the provisions as to when the buyer loses the right to rely on the non-conformity [page 242] of the goods  or the right of the seller to make a specification for the goods if the buyer does not. Others may perhaps be conceded to be an improvement on the present state of English law, such as the remedial provisions for cases of partial performance or excessive performance.
In sum one may conclude, as Mr. Feltham did just after the Convention had been completed, that "given the difficulty of achieving agreement across a large number of nations, common law and civil law, capitalist and socialist, developed and developing, the code is probably as good as can be expected." Indeed after 17 ratifications and accessions and the prospect of more, one may venture to delete "probably." [page 243]
* In citations the following abbreviations are used, in addition to those in nn.4, 5 and 6, infra.
Atiyah, Sale -- P. S. Atiyah, The Sale of Goods (7th ed., 1985).
Benjamin -- Benjamin's Sale of Goods, A. G. Guest (ed.) (3rd ed., 1987).
Galston-Smit -- International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Nina M. Galston and Hans Smit (eds.) (New York, 1984).
O.R. -- Official Records of the U.N. Conference on Contracts for the International Sale of Goods, Vienna, March 10 -- April 11, 1980.
Treitel, Contract -- G. H. Treitel, The Law of Contract (7th ed., 1987).
Treitel, Remedies -- G. H. Treitel, Remedies for Breach of Contract: A Comparative Account (1988).
U.C.C. -- Uniform Commercial Code (United States).
** Principal of Brasenose College, Oxford.
1. Report of UNCITRAL on the work of its 21st session -- Official Records of the General Assembly, 43rd Session, 1988, Supplement 17 (A/43/17) s.66. It is there reported that the expectation was expressed that, within a few years, at least 40 or 50 states would become parties to the Convention.
2. Schlechtriem (infra, 0.5), 18 n. 5a.
3. H. Dölle (ed.), Kommentar zum Einhtilichen Kaufrecht (1976).
4. John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention (Kluwer, Antwerp. etc., 1982). Cited here as Honnold, Commentary.
5. Uniform Sales Law -- The U.N. Convention on Contracts for the International Sale of Goods (Manz, Vienna, 1986). Cited here as Schlechtriem, Sales Law.
6. C. M. Bianca and M. J. Bonell (eds.) Commentary on the International Sales Law (Giuffrè, Milan, 1987). Cited here as Bianca-Bonell.
7. For a convenient succinct account see Feltham, "The United Nations Convention on Contracts for the International Sale of Goods"  J.B.L. 346.
9. Infra, p. 212.
10. See further infra, p. 208.
11. The term is left undefined. Art. 10 makes provision for situations in which a party (a) has more than one place of business, (b) has no place of business (reference then being made to his habitual residence). Art. 1(2) provides that "The fact that the parties have their places of business in different States is to be disregarded whenever this fact docs not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract."
12. It is reproduced as App. 1.4 to Galston-Smit.
13. Since the purpose for which the goods are bought may not be evident, there is a proviso: "unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use." But this is not free from difficulty. See Honnold, Commentary, s.50; Schlechtriem. Sales Law, pp. 28 et seq.; Khoo in Bianca,-Bonell, p. 39.
14. Art. 5(1)(b).
16. At p. 30.
17. The U.K. unsuccessfully moved an amendment at Vienna to substitute "the supply of labour or other services represents the major part in value of the seller's obligations" (OR 241 et seq.).
18. Arts. 41-43.
19. Arts. 66-70.
20. See observations of the U.K. representative, (1978) IX UNCITRAL Yearbook 102-104.
21. Commentary, s.65.
22. Schlechtriem. Sales Law, 33; id., Galston-Smit, 6-6, 6-24.
23. Infra, p. 222.
24. Infra, p. 212.
25. Winship in Galston-Smit, 1-33 et seq. At Vienna the U.K. unsuccessfully moved an amendment to make it clear that exclusion could be implied (O.R. 248 et seq.).
26. (1978) IX UNCITRAL Yearbook 35 et seq.; Eörsi (1979) 27 Am. J. Comp. L. 311 at p. 313; id. (1983) 31 Am. J. Comp. L. 333 at p. 348.
27. Including the U.C.C. (§ 1-203).
28. (1978) IX UNC1TRAL Yearbook 36 (s.54).
29. See, e.g. N. Horn, H. Kötz, H. G. Leser, German Private and Commercial Law (1982), Chap. 8.
30. Galston-Smit, 2-8, 9; cf. Honnold, Commentary, s.95.
31. Sales Law, 39.
32. D. Tallon, D. Harris eds., Le contrat aujourd' hui: comparaisons franco-anglaises (1987), 209-210.
33. This curious phrase occurs in five places, but does not seem to differ in meaning from "knew or ought to have known" (or an equivalent phrase with another verb), which is more frequently used.
34. Op. cit. supra, n.7, 349.
35. James Miller & Partners v. Whitworth Street Estates (Manchester) Ltd.  A.C. 583. The Convention's provision accords with American law: U.C.C. §§ 2-207(3), 208(1); E. Allan Farnsworth, Contracts (1982), 514.
36. Art. 15.
37. Eörsi in Galston-Smit, 2-31 et seq.
38. The offeror's intention is to be determined of course in accordance with Art. 8, supra.
39. See Tallon in Galston-Smit, 7-11ff. The underlying policy seems to have been that of protecting the supposedly weaker party.
40. Supra, p. 204.
41. Commentary, s.137.
42. See Farnsworth in Galston-Smit. 3-9; Eörsi in Wiener Übereinkommen von 1980 über den internationalen Warenkauf (ed. Schweizerisches Institut für Rechtsvergleichung, 1985), 47; Stöffel, ibid, 62 et seq.
43 Sevón in International Sale of Goods -- Dubrovnik Lectures, P. Sarcevic, P. Volken eds., 208.
44. Schlechtriem, Sales Law, 52; contra, Tallon, loc. cit. supra, n.39.
45. Code civil Arts. 1108, 1129; Tallon, loc. cit. supra, n.39.
46. Supra, at p. 211.
47 On the meaning or "reach" see Art. 24.
48. Especially U.C.C. § 2-205.
49. Drennan v. Star Paving Co. 51 Cal. 2d 409, 333 P. 2d 757 (1958); American Restatement of Contracts, 2d, s.87.
50. Eörsi in Bianca-Bonell, 156 et seq.
51. Eörsi in Bianca-Bone1l, 154, 158.
52. O.R. 278, 280.
53. The statement of a fixed time for acceptance in a contract between traders who are both in common law countries would presumably not be treated as indicating that the offer is irrevocable: Feltham op. cit. supra, n. 7, 352.
54. Farnsworth in Galton-Smit. 3-12.
55. Farnsworth in Bianca-Bonell. 196.
56. If the late acceptance were construed as a counter-offer, as no doubt it would be in English law (cf. American Restatement of Contracts, 2d. s.70), the time at which the contract became effective would of course be different: Farnsworth in Bianca-Bonell, 190 et seq.
57. For a suggestion that he could not have withdrawn see Farnsworth in Bianca-Bonell, 193 et seq.
58. The shift may in practice be greater, since the offeror may have difficulty in determining whether the acceptance would have reached him in time and may therefore be well advised to inform the offeree anyway: Farnsworth in Bianca-Bonell, 193.
59. See, e.g. Treitel, Contract, 16-18.
60. Hellner in Dubrovnik Lectures, supra, n.43, 339 et seq.
61. Arts. 49(1)(a), 51(2), 64(1)(c), 72(1), (2); infra, p. 226.
62. Art. 46(2); infra, p. 224.
63. Art. 70; infra, n. 67a (2nd).
64. Art. 23.
65. Schlechtriem, Sales Law, 59.
66.  2 Q.B. 26 at p. 66; cf. 72. See also Will in Bianca-Bonell, 213.
67. Eörsi (1983) 31 Am. J. Comp. L. 337; cf. Treitel, Remedies, 350 et seq.
68.This is in substance the test repeatedly laid down by the French Cour de Cassation; Nicholas, French Law of Contract (1982), 238 at n.2.
69. Schlechtriem, Sales Law, 60.
70. O.R. 302.
71. Feltham, op. cit. supra, n.7, 353; Honnold, Commentary, s.183.
72. Art. 18(2), supra, p. 216.
73. As in Arts. 47(2); 48(2)(3); 63(2); 65(2); 79(4). As always, of course, this can be varied by agreement or by usage.
74. O.R. 330f; cf. U.L.I.S. Art. 25.
75. Bianca-Bonell, p. 334; for a common-law view see Treitel, Remedies, 73 et seq.
76. K. Zweigert & H. Kötz, An Introduction to Comparative Law (1977), 11.142 et seq. ; Tallon In Tallon & Harris, op. cit. supra, 0.32, 288.
77. This is of course subject to Arts. 12 and 96 (supra, p. 212).
78. Supra, at p. 207.
79. Benjamin, ss.796-799; Law Com. No. 160 (Cmnd. 137) paras. 2.10-2.13 (1987). The difficulties are greater in consumer sales. The formula used in Art. 35(2)(a) of the Convention is almost exactly that in U.C.C. § 2-314(2)(c). Since goods of widely differing qualities may satisfy this formula, the buyer can presumably insist only on the minimum; cf. Taylor v. Combined Buyers Ltd.  N.Z.L.R. 627, 645 per Salmond J.
80. The UNCITRAL draft required the guarantee to be express. At Vienna it was agreed to delete this word, but a proposal to specify that the guarantee could be implied was rejected: O.R. 312 et seq.
81. The French text has une certain période, which the French delegate distinguished from une période certaine as not referring to a specific period. The Drafting Committee was requested to align the English text on the French: O.R. 315.
82. See also infra. pp. 227 et seq.
83. Sale of Goods Act 1979. ss.11(4), 34, 35; Atiyah, Sale, 389-404.
84. Sale of Goods Act 1979, s.11(4).
85. Infra, p. 225.
86 Honnold, Commentary, 284.
87. Schlechtriem, Sales Law, 69; contra, Bianca in Bianca-Bonell, 302, who leaves the matter to the basic rule that the buyer must examine the goods as soon as is practicable (Art. 38(1)).
88. Supra, at p. 219.
89. Supra, at p. 222.
90. Treitel, Remedies, 45, 73 et seq.
91. Treitel, Remedies, 372 et seq.; cf. U.C.C. § 2-508(2).
92. Or unreasonable uncertainty of reimbursement by the seller of expenses advanced by the buyer.
93. Will in Bianca-Bonell, 349 et seq.; Treitel, Remedies, 373; Honnold, Commentary, ss.184, 296. On the problem of the relationship with the seller's right to require substitute goods see Will in Bianca-Bonell, 355 et seq.
94. Art. 48(2), (3), (4).
95. Treitel, Remedies, 48 et seq., 327 et seq.
96. Supra, at p. 218.
97. Or declares that he will not do so (Art. 49, 64).
98. There is nothing corresponding to Sale of Goods Act 1979, s.11(4); see further infra, p. 288.
99. Art. 81(1).
1. And is therefore wider than English law: Benjamin, s.1247.
2. Supra, at p. 219.
3. Art. 4, supra, p. 207; also Art. 82(2)(c).
4. Art. 25, supra, p. 218.
5. Art. 46(2), supra, p. 224,
6. Art. 50, supra, p. 225.
7. Art. 49, supra, p. 226. In all these cases he can in addition claim damages.
8. Honnold, Commentary, s.315.
9. Honnold, Commentary, s.296; contra, Ziegler in Galston-Smit, 9-22.
10. Supra, p. 224.
11. Supra, p. 225.
12. Cf. Benjamin. s.602.
13. Contrast Sale of Goods Act 1979, s.30(2).
14. See, e.g. Arcos Ltd. v. E.A. Ronaasen & Son  A.C. 470; Re Moore & Co. Ltd. and Landauer & Co.  2 K.B. 519; Benjamin, s.771.
15. As to severability, see the end of this paragraph.
16. Atiyah, Sale, 406 et seq.
17. On contracts for delivery by instalments see Art. 73.
18. Atiyah, Sale, 97 et seq.; Benjamin, ss.880-884.
19. See Law Com. No. 160 (Cmnd. 137) (1987).
20. U.C.C. § 2-601.
21. It is assumed of course that there is a completed contract satisfying Art. 14, supra.
22. Art. 67.
23. O.R. 372 et seq.
24. Art. 77, infra, p. 223; cf. White & Carter (Councils) Ltd. v. McGregor  A.C. 413; Atiyah. Salt, 415 et seq.; Benjamin, s.l286; Treitel, Contract, 782 et seq.
25. Supra, p. 219.
26. s.375(2) sentence 2.
27. Treitel, Remedies, 179 et seq.
28. (1854) 9 Exch. 341.
29. The Heron II  1 A.C. 350; H. Parsons (Livestock) Ltd. v. Uttley Ingham & Co. Ltd.  Q.B. 791.
30. Treitel, Remedies, 111 et seq. Art. 76 speaks of the "current price," but at least in capitalist economic systems this will be the market price: Treitel, Remedies, 113; Honnold, Commentary, s.414.
31. Art. 76(1).
32. Treitel, Remedies, 114 at n. 15, 113 after n. 10.
33. Honnold, Commentary, s.414.
34. Art. 76(1) first sentence; see also Art. 76(2) as to the place at which the price is to be calculated.
35. ss.50(3), 51(3); cf. s.53(3).
36. O.R. 395; Schlechtriem, Sales Law 98; Knapp in Bianca-Bonell 556.
37. Benjamin, ss.l308, 1942.
38. Art. 76(1) second sentence.
39. Art. 49(2).
40. Schlechtriem, Sales Law, 98; Treitel, Remedies, 379 et seq.
41. O.R. 396.
42. Art. 62.
43. Honnold, Commentary, s.419.
44. For a comparison of the Convention with the common law and with civil law systems see Treitel, Remedies, 379 et seq.
45. The aggrieved party must give notice if time allows, unless the other party has declared that he will not perform: Art. 72(2), (3).
46. O.R. 374 et seq.
47. Sale of Goods Act 1979, s.44.
48. § 2-609.
49. s.321. And there are similar provisions in some other systems and also in U.L.I.S. See generally Treitel, Remedies, 405 et seq.
50. O.R. 431; Bennett in Bianca-Bonell, 521 et seq. ; Schlechtriem, Sales Law, 95.
51. Schlechtriem, Sales Law, 96.
52. Art. 35, supra, pp. 220 et seq.
53. Not just the existence of the defect, since the reasoning would then be circular: Nicholas in Einheitliches Kaufrecht u. nationales Obligalionenrecht. Schlechtriem (ed.) (1987), 287 et seq. and Galston-Smit, 5-10 et seq.
54. Nicholas, French Law of Contract (1982), 193-204.
55. Supra, p. 218.
56. Tallon in Bianca-Bonell, 591 et seq.
57. Art. 74(1).
58. Nicholas, (1979) 27 Am. J. Comp. L. 240 and Galston-Smit, 5-10 et seq.
59. Nicholas in Galston-Smit, s.16-s.18.
60. Para. (3) provides that the exemption has effect for as long as the impediment exists. A proposal was made at Vienna (O.R. 381f.) that the non-performing party should be permanently exempted if at the end of the period of temporary exemption circumstances had "so radically changed that it would be manifestly unreasonable to hold him liable." The proposal was, however, rejected, apparently out of a reluctance to embark on the problems of frustration or imprévision.
61. Nicholas in Galston-Smit, 5-18, et seq.
62. Schlechtriem, Sales Law, 102 et seq.
63. This was the term used in the Working Party's draft, but it was replaced by "a third person whom he had engaged etc." because the term "sub-contractor" seemed likely to cause difficulty in some systems; (1977) VIII UNCITRAL Yearbook 56 (para. 448). This phrase may, however, be given a wider meaning (Schlechtriem, Sales Law, 103 n.431a).
64. Schlechtriem, Sales Law, 103.
65. This is placed, with Art. 79, under the heading of "Exemptions," but it has a general application. It was added at Vienna: see Honnold, Commentary, s.436.
66. Arts. 66-70.
67. Supra, pp. 208 and 211.
67a. Art. 70 reverses the incidence of risk in case of fundamental breach by the seller; but there are difficulties: see Nicholas in Bianca-Bonell 508 et seq.
68. Art. 4, supra, p. 207.
69. Benjamin, ss.1515, 1694.
70. And not with all such sales; see what follows.
71. Nicholas, op. cit. supra, n.67a, 489 et seq. (s.2.2).
72. Schlechtriem, Sales Law, 88.
73. Nicholas, op. cit., 491 et seq.
74. See further infra, p. 239.
75. cf. Sale of Goods Acts 1979. s.18 rule 5(2).
76. O.R. 213-218.
77. O.R. 215.
78. For difficulties in the third sentence of the article see Nicholas. op. cit. supra, n.67a (2nd), 499 et seq.
79. Supra, p. 238.
80. Benjamin, s.1940.
81.  1 K.B. 78; Benjamin, ss.1551 et seq.
82. Nicholas, op. Cit., supra, n.67a (2nd), 505.
83. Supra, pp. 202 and 204.
84. Supra, p. 205.
85. Honnold in Einheitliches Kaufrecht (supra, n.53 (2nd)), 128 et seq.
86. Art. 7(2).
87. Art. 7(1).
88. Art. 25.
89. Supra, pp. 212 et seq.
90. Supra, pp. 214 et seq.
91. Supra, pp. 238 et seq.
92. Supra, p. 212.
93. Supra, p 212.
94. Supra, pp. 224 et seq.
95. Supra, pp. 222 et seq.
96. Supra, p. 229.
97. Supra, pp. 227 et seq.
98. Op. cit. supra, n. 7 (1st), 361.