Published by Manz, Vienna: 1986. Reproduced with their permission.

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III. The Sphere of Application

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G. Products Liability (Article 5)

A proposal sponsored by Finland, France, and the United States [89] to exclude from the Convention claims based on death or personal injury caused by the goods was accepted in Vienna and embodied in Article 5.

The basic idea is simple: the Convention does not govern products liability. Domestic law, therefore, remains in force. To the extent products liability is characterized as non-contractual under domestic law, Article 5 merely states the obvious. This was understood to be the interpretation in ULIS as well, even though it was never written as a rule. However, since some legal systems resolve problems of product liability in contract,[90] this Article was needed to ensure that these domestic rules would still apply when the Convention is enacted. Therefore the contractual remedies of "positive Vertragsverletzung" or § 463 BGB under German law or the responsibility of the "vendeur professionel" under Articles 1645 and 1646 of the French Civil Code are applicable in case of death or personal injury. A buyer's claims based on death or personal injury are not limited to the injuries suffered by the buyer himself, but also include the buyer's own liability for damages due to the death or personal injuries of his customers. This result is required by the fact that Article 5 leaves untouched liability claims which sound in contract, including the typical claims which permit recovery against the original producer by following the chain of sale back to its origin.[91]

Liability for death or personal injury is only one - although probably the most important - field of products liability. Liability for damage caused to property is not excluded by Article 5. The Conference considered whether a broader term, such as "claims based on product liability,"[92] could be used, but no agreement could be reached as to the extent to which the Convention should apply to property damage caused by defective goods which are used as foreseen by the contract. Semi-finished products ruined by a defective machine and raw materials wasted because they were combined with unsuitable materials are typical cases where the buyer's contract expectations are frustrated and which therefore belong [page 34] to the core of the matter to be regulated by sales law. In my opinion, damages in those circumstances should be governed by the Convention and compensated in conformity to the provisions set forth in Article 74.[92a] The question of whether a concurrent action in tort would lie must be decided by domestic law.[page 35]

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FOOTNOTES

* The author of this book participated at the Conference as a member of the delegation from the Federal Republic of Germany. The views expressed here are personal to the author and do not necessarily represent the position of the F.R.G. or its delegation.

89. A/Conf. 9/C.1/L.4 at 20, 21, 51 (= O.R. 85).

90. See A/Conf. 97/8/Add. 4 at 6-7 (reasons for the French proposal). Practically speaking, the concern was not only for the preservation of a doctrinal structure but also for the system that follows the chain of sales back to its origin. If damages from defective products fall strictly under CISG, then the buyer's or re-seller's claims for damages, based on liability to his customer would, in some cases, not arise or be known until the period for making claims against a foreign seller had already passed. See Article 39(2); cf. A/Conf. 97/8/Add. 4 at 6.

91. See also supra note 90.

92. See A/Conf. 97/C.1/SR.3 at 3 et seq. (= O.R. 245 et seq.) (discussion in the First Committee).

92a. Accord Honnold, Commentary § 73.

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