Go to Database Directory || Go to Database Bibliography || Go to Bianca-Bonell List of Abbreviations || Go to Bianca-Bonell Bibliography

Cite as Sono, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 324-328. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.

Article 44

Kazuaki Sono

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

ARTICLE 44

Notwithstanding the provisions of paragraph (1) of article 39 and paragraph (1) of article 43, the buyer may reduce the price in accordance with article 50 or claim damages, except for loss of profit, if he has a reasonable excuse for his failure to give the required notice.

1. History of the provision

     1.1. - This provision has been added at the Vienna Conference as a part of the compromise solution with those representatives who considered that the rules contained in Article 39 were too harsh on buyers (see §§ 1.9. to 1.13. of this commentary at Article 39). Accordingly there is no comparable provision in ULIS. Article 44 is an important modification to the rules contained in Articles 39(1) and 43(1), and to Article 39 in particular.

     1.2. - Articles 39 and 44 are probably the most heatedly debated among all the provisions in the Vienna Convention. The present text derives from a joint-proposal of Finland, Ghana, Nigeria, Pakistan and Sweden whose representatives endeavoured so devotedly to find a break-through for the success of the Vienna Convention.

     1.3. - The joint-sponsors of a new provision originally proposed the addition of the following (note that the quoted text has been modified by this writer to reflect the number[ing] of [the] articles in the final text of the Vienna Convention for ease of reference):

"Notwithstanding the provisions of paragraph (1) of article 39 and paragraph (1) of article 43, the buyer may declare the price reduced in accordance with article 50 or claim damages except for loss of profit if he has a reasonable excuse for his failure to give the required notice. However, [page 324] the seller shall be entitled to set off, in any claim by the buyer pursuant to this paragraph, any foreseeable financial loss caused him by the buyer's failure to give the notice" (Official Records, I, 108).

     1.4. - Subsequently, in the light of ensuing discussion, the delegation from Finland, one of the sponsors, asked that a vote be taken on the joint-proposal as a whole, and also a vote on the same but omitting the last sentence. The First Commitee rejected the original joint-proposal by 18 votes in favour and 22 against. It however adopted the provision of the joint-proposal without the last sentence by 21 votes in favour and 19 against (Official Records, I, 108; II, 347), which is essentially the same as the present text of Article 44. Thereafter, the Plenary adopted Article 44 jointly with Article 39 by 43 votes to none, with 4 abstentions (Official Records, II, 208).

     1.5. - There seems to be two reasons why it was proposed to vote on the joint-proposal without the last sentence as well as on the whole and why the final text does not contain the last sentence. One was strategic and the other was technical; and the two were inseparable. Since the joint-proposal was for a compromise solution, some technical difficulties seemed inevitable and they had been pointed out during the discussion particularly by those representatives opposed to such compromise. However, many of them tended to base their opposition to the original joint-proposal on the technical and practical difficulties in application that the last sentence had presented (Official Records, II, 321322, 344-346).

     1.6. - At that time, the general inclination of the Conference was toward finding some solution to solve the dead-lock. The last minute proposal to consider only the first sentence of the joint-proposal as a compromise solution was, therefore, sufficient to attract support at least on the first sentence especially from those representatives who were still uncertain as to how to react. At the same time, it was becoming clear by the time of the voting that the purport of the original joint-proposal could indeed be attained even without the second sentence through the application of Article 77 which imposed upon a party the general duty to mitigate damages. [page 325]

2. Meaning and purpose of the provision

     2.1. - Under Article 39(1), the buyer's failure to give a timely notice of non-conformity of the goods will deprive the buyer of his right to rely on the lack of conformity against the seller. Thus, the sanction against the failure to give the adequate notice is drastic, i.e., the loss of remedy. At the same time, the very existence of this sanction may ensure that the buyer will give adequate notice. Such notice is necessary for the protection of the seller who would have to take necessary steps in that regard (see commentary on Article 39, supra, § 2.3.).

     2.2. - However, where the buyer has a reasonable excuse for his failure to give the required notice, it may be too harsh to deprive this innocent party of all remedies because of that failure since it was after all the seller that did not conform to the contract. In some developing countries, it is said that illiterate traders will learn of the notice requirement only after they consult lawyers about the seller's breach. It is also said that under the law of some developing countries there is no obligation on the buyer to give a written notice of non-conformity. While it would be desirable to make the international traders in those parts of the world appreciate the need for notice, permitting the seller, for example, to collect the full price of the goods may be unfair in such situations (DATE-BAH, The Standpoint of Developing Countries, 39, 48).

     2.3. - On the other hand, it is nevertheless true that the seller would often suffer if the buyer fails to give adequate notice. The seller should be protected at least to the extent of such suffering. Article 44 balances these considerations.

     2.4. - Under Article 44, the buyer who has a reasonable excuse for his failure to give the required notice will be afforded some limited remedies: the buyer may reduce the price in accordance with Article 50 or claim damages under Article 74 except for his loss of profit such as the profit that he would have gained by resale had the goods conformed to the contract. These are the only residual remedies that the buyer may pursue. Accordingly the buyer can no longer require the seller to cure the [page 326] lack of conformity as a matter of right under Article 46. Most importantly, the buyer cannot avoid the contract under Article 49 even if the avoidance would have been otherwise possible.

     2.5. - However, the exception granted to the buyer with a reasonable excuse and the remedies accorded to him under Article 44 will in fact be subject to a further qualification, i.e., Article 77. The claim for damages by the buyer will often encounter the seller's claim that he suffered a loss because of the buyer's failure to inform him in due time of the non-conformity or the assertion of the right over the goods by a third party. For example, the seller may assert that he lost recourse to the supplier of the goods because of the lateness in notice. The seller, therefore, may claim that the reduction of the price should not be permitted to the extent of his suffering upon the theory that the buyer failed to mitigate damages under Article 77.

3. Problems concerning the provision

     3.1. - There may indeed be a number of situations where the seller suffers because of the very lack of adequate notice of non-conformity, e.g., loss of recourse to third parties, loss of timeliness to cope properly with a legal proceeding against the assertion by a third party of his right, increase in the examination expenses to verify the claim, increase in cost for the collection of evidence, or even loss of evidence with regard to testing and testimony of relevant witness. These are of course matters which the seller would have to bear the burden of proving, but it must be noted that the remedies available to the buyer under Article 44 would therefore have to anticipate various counter-claims based on Article 77.

     3.2. - It may further be noted that, the more time that passes after the discovery of non-conformity, the more it would often become difficult for the buyer to convince others that the non-conformity in question, whether apparent or not, did exist at the time when the risk of the goods passed to the buyer. The seller is liable, in the absence of a special agreement, only for such non-conformities (see commentary on Article 39, supra, § 2.2.). [page 327]

     3.3. - It may therefore be concluded that the chance of the buyer's success under Article 44 would in fact be good only in exceptional situations. Moreover, «in any event», the buyer will lose his right to rely on the lack of non-conformity two years after the actual handing over of the goods to him (Article 39(2)). It should, however, be remembered that the rules in Articles 39, 43(1), and 44 are not mandatory in the sense that the parties can always derogate from them through their contractual arrangements. [page 328]


Pace Law School Institute of International Commercial Law - Last updated January 31, 2005
Go to Database Directory || Go to Bibliography
Comments/Contributions