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Reproduced with permission of the author.

Passing of Property Under Contracts for the International Sale of Goods:
Should the CISG Regulate the Transfer of Property?

Tran Quoc Thang
Durham University LL.M 2004

CHAPTER ONE: INTRODUCTION

1. General Background

In our modern society today, no one can deny that international trade plays an important role in the development of nations and their businesses. Of crucial important factors in promoting international trade lies the law which applies to sales contracts between sellers and buyers in different nations. In any normal sale, the key concern is certainty: the seller wants to make sure he get full payment in exchange for delivery of the goods, and the buyer wants to make sure he get the goods of agreed quality in exchange for payment.[1] In a domestic sale, it is relatively easy for the seller and buyer to achieve such purposes since they may know each other well and, more importantly, their contract is often governed by a uniform domestic sales law under a uniform legal system. However, the issue becomes more complicated in modern commercial transactions when the seller and buyer are located in different countries with different social values and different legal systems. This often leads the uncertainty of the law applicable to their contract, and thus, can create distrust among parties and seriously undermine international trade.[2]

The above difficulties can therefore justify for the need for the uniform international law to govern international trade.[3] There are two common methods of unification of law: unification of the rules of substantive law and unification of the rules of choice of law.[4] The former sets out uniform substantive law to be applied to a particular contract or dispute while the later lays down uniform rules to refer the contract or dispute to subject to the law of a particular country (e.g. the seller's or buyer's country).[5] In this regard, the United Nations Convention on Contracts for The International Sale of Goods (the 'CISG' or the 'Convention') belongs to the first method to unify the substantive law on international sale. The Convention was signed in Vienna in 1980 by various nations and came into force as of 1 January 1988. As of 16 April 2004, 63 states including major trading ones like the US, Australia, and New Zealand and most EU nations have adopted the Convention (however, the UK has not yet adopted it).[6]

While the CISG is considered as a great success in terms of the number of adopting nations, it also has drawbacks.[7] In particular, among the scope of application, Article 4 states that the Convention is 'not concerned with the effect which the contract may have on the property in the goods sold'.[8] As a result, the CISG does not govern the passing of property. In this regard, this paper seeks to answer two questions: (i) should the CISG regulate the transfer of property? and (ii) if so, how should it regulate?, all examined in light of the current trend of global harmonisation.

It should be noted from the beginning that the CISG excludes 'transfer of property' issue without defining the meaning of 'property'. This is one drawback of the CISG and may cause serious problems since 'property' may be interpreted differently under different legal systems.[9] For example, under English common law, property may mean either general property (or ownership or title) or special property (or possession); and each of the two is 'hard to explain'.[10] In contrast, under Vietnamese civil law, property absolutely and clearly means ownership only, which comprises three rights: right to possess, right to use and right to dispose of the asset.[11] As a result, under Vietnamese law, the relationship between possession and ownership is quite clear (where 'possession' may be regarded as 'included' in the 'ownership' or 'property') while under English law, such relationship is quite complicated ('possession' is relatively independent from and equally stands together with 'ownership').[12] To avoid this problem, 'property' adopted in this paper, unless otherwise stated, refers to 'general property' or 'ownership' only.[13]

2. Structure of the Paper

Despite the uniformity goal of the CISG, most all scholars have agreed on the exclusion of 'transfer of property' issue from the CISG's scope of application. They offered two main reasons, ie it was 'not regarded possible to unify the rule on this point nor was it regarded necessary to do so'.[14] However, in my own opinion, such exclusion clause represents an unfortunate point and undermines the uniformity goal of the CISG.[15] The absence of rules on transfer of property may lead to serious problems, especially in the case of insolvency of either a seller or buyer or in the case of title conflicts related to the disposal of the goods by either a dishonest seller or buyer to a third party.[16]

One paramount purpose of the CISG is to create and ensure legal uniformity and certainty.[17] In addition, it is also designed to facilitate international trade on the basis of equality and mutual benefits.[18] Against these criteria, I will argue in this paper that there is a clear need for the CISG to regulate the transfer of property, especially under the current globalisation trend. However, the ultimate goal of the CISG can only be achieved by both regulating the passing of property and making other necessary changes in the CISG. This may call for state nations to reconsider amending the CISG in the years to come. All this will provide an answer to the first question 'should the CISG regulate the transfer of property?' and is dealt with in chapter 2.

Chapter 3 will answer the second question 'how should the CISG regulate the transfer of property?'. In order to do this, I will make a relatively comparative study of various legal systems on the regulation on the transfer of property. Advantages and disadvantages of each legal system are evaluated in order to draw one theory on regulation on the passing of property which is most likely to be adopted by and beneficial to state nations. This is followed by chapter 4 (conclusion) where some of my personal opinions on this issue are offered.[19]

CHAPTER 2: A 'NEED' FOR CISG REGULATION ON TRANSFER OF PROPERTY

In this chapter, the first section examines briefly why states need to harmonise rules on international trade and the common methods of unification. This will justify why the CISG came into existence and why not all matters in international trade are regulated by the CISG. The second section answers the question why the CISG should regulate the transfer of property instead of excluding it. Problems associated with this 'transfer of property' exclusion are discussed. The last section examines whether it is advisable, and, more importantly, practical for state nations to reconsider this issue in order to amend the CISG under the current situation.

3. Harmonisation and Methods of Unification

(a) Harmonisation

In order to consider whether the CISG should regulate the 'transfer of property', one should start with the most basic and simplest question: why should nations harmonise rules on international trade? This is because if the rules of private international law can satisfactorily resolve all legal problems in the international trade without harmonisation of laws, no one needs to bother introducing the CISG or, of course, regulating the transfer of property under the CISG.

Extensive and intensive literature has discussed the issue of harmonisation of legal rules on international trade.[20] A brief summary of their opinions is sufficient in this paper. A majority of academics advocate for the harmonisation efforts. Gopalan has listed 10 main reasons for the harmonisation of national laws on international trade.[21] Among them, the key reason is to ensure the certainty and uniformity of the law applicable to international sale contracts.[22] While recognising that to oppose harmonisation 'is increasingly a dying breed', the author also points out 11 reasons on which those opponents may base their argument.[23] The main 'opposing' reason may be that the pursuit of uniformity is 'idealistic since national laws are premised on different traditions and assumptions'.[24] However, under the current trend of increasing and speedy international trade, benefits of harmonisation clearly outweigh these criticisms.[25] As Professor David has correctly put it, 'today the problem is not whether international unification of law will be achieved; it is how it can be achieved'.[26] The next sub-section examines such 'how' question.

(b) Methods of Unification

Unification of law is commonly misunderstood as 'an endeavour to distil the lowest common denominator out of a varied medley of national legal systems'.[27] In fact, it should mean to provide the same rules with the same solutions everywhere.[28] Clearly, this true purpose, although desired by all nations and businesses, is not easy to be achieved in practice.[29] Thus, lawyers have for a long time developed two common ways to unify laws: unification of conflict of laws and unification of substantial law (both of which are 'complementary rather than conflicting'). Although the former is considered as particularly desirable, it often creates 'numerous difficulties for those who must apply the law'. For example, how can an English or German judge discover and apply the law of Liberia or Cambodia? As a result, the good approach should be 'to be flexible' in unifying the rules of conflict of laws and unifying the rules of substantial law.[30]

There are several methods of unifications: by international conventions or treaties (eg the CISG); by model laws (eg the UNCITRAL Model Law on International Commercial Arbitration); by Lex Mercatoria (eg the INCOTERMS); or by mixed forms (eg the UNIDROIT Principles for International Commercial Contracts). General advantages and disadvantages, as well as difficulties in maintaining uniform laws in practice (mainly due to the absence of the international tribunal) can be found elsewhere.[31]

For the relevant purpose of this paper, the exclusion of transfer of property from the CISG's scope of application is examined. The CISG is one type of international conventions on unification of substantial law, which (once ratified by state nations) has binding force upon the concerned parties. Thus, the CISG is essentially different from other model laws (or soft laws) which have no binding force (of course, unless the trading parties have actually incorporated or referred to these laws in their sales contracts).[32] Clearly conventions like the CISG are more desirable and effective but more difficult to be achieved than soft laws.[33] As a result, in order to be feasible, the CISG should not regulate every matter in international trade; i.e. it should leave some issues to the rules of private international law.[34] These 'opt-out' matters may be divided into 'gaps praetor legem' and 'gaps intra legem'. While both types of gaps are also mentioned in Article 7(2) of the CISG, the former 'must be filled in conformity with the Convention's general principles' and the latter 'must be filled by the concepts of law of the country to which the rules of private international law of the forum lead'.[35] The 'transfer of property' issue, in most all cases, falls into gaps intra legem which domestic law of a certain country (as referred to by the rules of private international law) should govern.[36] This has led to problems faced by parties in the international trade when their contract is governed by the CISG. The next section will discuss these problems which will justify the 'need' for regulation on the transfer of property under the CISG.

4. A 'Need' for the CISG Regulation on the Transfer of Property

The absence of the regulation on the transfer of property under the CISG has created problems. These problems can be categorised into three groups: problems affecting the uniformity purpose of the CISG; problems related to the CISG's rule on the transfer of risk; and problems related to third party complexities.[37] These will be examined in turn below.

(a) Uniformity

The CISG's paramount goal of uniformity may be seriously undermined by the absence of provisions on the transfer of property by several ways: by the wording of Article 4; by the effects of Article 4(b) on other provisions in the CISG; and more importantly, by the unsatisfactory results of the rules of conflict of law on this issue.

(i) The Wording of Article 4

In order to understand the wording of Article 4 on the 'transfer of property' issue, one needs first to distinguish between 'contractual effects of the transfer' and 'proprietary effects of the transfer'.[38] The contractual effects of the transfer refers to the rights and obligations of each party relating to the property (or title) of the goods. Examples are: whether the seller has a duty to transfer good title to the buyer or whether the seller is liable to the buyer for defects in the quality of the goods. These mainly relate to the contractual relationship between the seller and the buyer and thus, are 'matters of contract'. As a result, the contractual effects of the transfer are governed by the law applicable to their contract. The CISG is often viewed as the law governing this area of the contract between both parties.[39]

In contrast, the proprietary effects of the transfer of property refer to the validity of the transfer and its effects on the proprietary rights of the seller and buyer and related third parties.[40] Questions such as whether the seller has 'the power to pass a good title to the buyer' or what acts are 'required to cause property to pass' (e.g. whether property passes to the buyer by mere agreement or by agreement together with delivery of the goods) belong to this area. This area is not often governed by the law applicable to the contract (unless the parties have specifically chosen such law to govern the proprietary effects).[41] Thus, a France-based seller may sign a sales contract with an England-based buyer for selling the specific goods situated in Germany. If the contract only states that the applicable law is English law, this does not by itself mean that English law will govern the proprietary effects of the transfer of property, eg when property passes. The law governing such proprietary effects should be governed by the rules of private international law and might be lex situs, ie the law of the country where the goods are situated; or lex loci actus, i.e the law of the place where the transfer takes place.[42] If the forum is in England, then it is very likely that the English court will use lex situs law and as a result, they will refer to German law to be used to decide the time of the transfer.[43] Under German law, the property may only be transferred upon delivery of the goods (even if these goods are specific and both parties have already agreed to such transfer).[44] This result is quite different from the same court's decision if English law is applied to decide the proprietary effects (where property for specific goods normally passes at the moment the contract is made).[45]

It is commonly understood that the CISG only governs the contractual effects of the transfer of property and it seems to definitely exclude its proprietary effects.[46] However, as Professor Ferrari rightly comments that the insertion of the phrase 'In particular' and 'except as otherwise expressly provided in this Convention' in Article 4 makes the delimitation between matters included and those excluded from the Convention's sphere of application 'not very clear'. One main drawback immediately following from such insertion is that even when there is a dispute which is apparently excluded from the CISG's scope of application (eg proprietary effects of the transfer of property); 'the Convention's applicability should not be excluded a priori - rather, one has to examine whether the CISG expressly provides for a solution'.[47] In addition to this shortcoming, there are other negative effects created by this property exclusion on other provisions of the CISG. These effects will be discussed next.

(ii) Effects of Article 4(b) on Other CISG Provisions

One may observe that authors advocating for the 'property exclusion' from the CISG's scope of application often give the same or similar main reason for such exclusion. According to their view, 'property question will of course remain very important but only for the purpose of determining the rights of buyer and seller vis-à-vis third parties and vice versa'.[48] However, in my opinion, such view is in fact not very accurate and sometimes is quite misleading. The owner of the goods (no matter he is the seller or buyer) has the ownership of the goods or property right over the goods not only in relation with the other party in the contract but also in relation to any other third parties. This is why the owner of a chattel is often described as having his ownership over the chattel 'against the world at large'. On this point, various legal families in the world all seem to arrive at the same conclusion. For example, under English law, the 'relativity of ownership' has been firmly recognised.[49] Ownership can be regarded as the 'greatest possible interest in a thing' recognised by law and consisting of 'a bundle of rights and incidents in respect of the thing'.[50] In this regard, Professor Battersby has brilliantly pointed out the similarities and differences between a concept of 'property' and 'title' as used under the SGA 1979.[51] According to his view, 'relative title' is the key to understanding the above two concepts. In a normal sale, these two concepts may be regarded similar, meaning the ownership of the goods. However, they may have different meanings when there is some defect in the seller's title upon his sale to the buyer. That seller's title is therefore not perfect (eg a sale by a seller in possession or by a buyer in possession).[52] Under these exceptions to the nemo dat rule, the (second) bona fide buyer can receive a new perfect title which is distinct from the seller's previous imperfect title. In other words, the seller's property has improved after the sale and such improved property is called 'title' under the SGA 1979.[53]

Similarly, under Vietnam Civil Code, this 'ownership against the world' concept can also be inferred from Article 173 (defining ownership) and Article 175 (protecting ownership).[54] As a result, any relationship between the seller and buyer regarding the property question always relate to other third parties either directly or indirectly in all cases. This means that if one admits that the property question is important in determining the rights of the seller and the buyer vis-à-vis third parties, such question in fact remains important in all cases even in cases no such third parties has been directly involved.[55]

Article 30 of the CISG states the seller must deliver the goods and transfer the property in the goods to the buyer. Clearly, these are the two essential obligations of the seller, without them there cannot be any sale.[56] However, since the property question is excluded in Article 4(b); there are several problems in ensuring that the seller has actually carried out his essential obligation to transfer the property to the buyer. First, the definition of property (which is not defined in the CISG) itself may lead to litigation since the concept of property may be interpreted differently in different legal systems. For example, an English seller may argue that when he transfers possession of the goods to the buyer; he has already transferred the property in the goods to the buyer.[57]

Second, the seller's obligation to ensure the goods free from any right or claim of a third party provided in Article 41 does not of itself guarantee that the buyer become the true owner of the goods in a real sense. A true owner of the goods has a real right in the goods which he himself can assert against any third party's claim or right. However, by virtue of Article 41, the buyer can only have a personal right in the goods, ie he may assert his property right against a third party's claim or right only via the seller.[58] There are some consequences following this situation. For the seller, at least during the duration of the applicable statute of limitations, every time when there is a third party's proprietary claim (even frivolous claim), he has a burden of demonstrating to the buyer's satisfaction that such claim is invalid or frivolous.[59] If the buyer is not satisfied with the settlement, he may exercise his remedies under Article 45 (which includes requesting the seller to replace the goods).[60] For the buyer, after receiving the goods, he may not be certain of his ownership since again every time there is a third party's claim, he has to go back to request the seller to protect his interest. In this way, the buyer's ownership depends on the seller's performance of his obligation under Article 41; and therefore, the buyer's rights are in fact something less than a real ownership. This may be regarded as 'conflicting' with Article 30 since under Article 30 the seller has an obligation to transfer the property to the buyer but what the buyer has received is something less than property. Thus, in this regard the CISG is treacherous since it 'promises' more than it can actually fulfil. In addition, the seller is often situated in a foreign country; thus the buyer may find it very difficult to contact and request the seller to perform his obligations, especially some years after the sale. Further, if the seller changes his place of business, simply closes down his business or goes bankrupt; the buyer will often be left helpless. As a result, by excluding (or in fact partially regulating) the property question, the CSIG has actually created more problems and expenses to the parties instead of facilitating international trade.

The above discussion examines the issue of property transfer mostly 'within' the CISG. However, this issue is in practice often governed by the rules of private international law with even more problems which the next text will discuss.[61]

(iii) Conflict of Laws

Although when the applicable law to an international sale contract is the CISG, the transfer of property under that contract is normally not governed by the CISG but by a certain domestic law.[62] Such domestic law may be chosen by both parties in their contract;[63] or in the case of absence of such stipulation in the contract, by rules of private international law.[64] This text only deals with problems in deciding what domestic law will apply to the property question in the contract where the applicable law is the CISG and both parties have not chosen the specific domestic law to govern this property issue.[65] In this case, the property question is governed by the rules of private international law. This situation may seriously undermine the uniformity and certainty goal of the CISG, especially when there is conflict of laws.

Firstly, it is quite apparent that the co-existence of the two bodies of law (the CISG and a certain domestic law) to govern the contractual effects of property transfer and its proprietary effects in itself obscures the CISG's uniformity goal.[66] Clearly this represents an unfortunate point of the Convention where participating countries have come to agreement on results rather than words.[67]

Secondly, choosing a correct domestic law raises several problems. In real life, business people in international trade may normally either forget to state 'applicable law' in their contract or they just state the law applicable to their contract without stipulating the domestic law to govern the 'property transfer'. Therefore, the CISG normally applies to their contract while the question 'what law governs property issues?' is often left open.[68] This leads to problems regarding the question: how will the court decide the law to apply to such 'proprietary effect' issue?

As noted above, there has been no 'uniform universal rule' in the world so far under which the courts of every country should follow.[69] Thus, the court of each country will decide such question according to its own country's conflict of laws rule and the final result may be different from country to country.[70] In respect of the goods where the parties know of their places at the time of transfer (ie the time of signing the contract), there are several rules in determining the law to govern the property question. This may be the lex situs, the lex loci actus, or the applicable law of the transfer.[71] While the second and third rules rarely differ, each is often much different from the first rule. The more difficult situation is when there is a conflict between the applicable law of the transfer and the lex situs. 'The tendency of Anglo-American courts in such circumstances is undoubtedly to prefer the lex situs'.[72] In fact, this lex situs law is also adopted in many other countries even in different legal families like Japan and Vietnam.[73] However, in some other countries (like France), the lex situs is not applicable. This point is illustrated in Dicey and Morris on Conflict of laws as follows.[74]

A agrees to sell specific goods in France to B. The applicable law is English law. By English law, title passes to the buyer when the contract is made. By French domestic law no title passes to the buyer because the agreement is formally invalid by French law. If the forum is in France, by the French conflict of laws rule, the formal validity of the transfer is governed by English law. This means English domestic law is applied to determine the validity of property; and B is therefore the owner of the goods. If the forum is in England, by English conflict of laws rule, the formal validity of the transfer is governed by French law (lex situs).[75] This means French domestic law is applied to determine the validity and passing of property; and B is therefore not the owner of the goods.

As a result, in the same case with the same facts but the proceedings in different courts will lead to different judgements. Clearly, this has undermined the uniformity and certainty goal of the CISG.[76]

In the case of transfer of the goods in transit, the situation is even more complicated. Suppose an England-based seller agrees to sell goods to an Argentina-based buyer (the goods are in transit from England to Argentina) and the CISG is the applicable law of the contract.[77] If there is a dispute as to the property question (i.e. the buyer became bankrupt and the unpaid seller seeks to recover the goods); which law should govern the transfer of property issue? Will it be English law because it is the law of the seller's country and departure of goods? Or will it be Argentina law because it is the law of the buyer's country and the destination? Or will it be the applicable law of the contract (but in fact the CISG does not govern this property issue)? And in the case the transfer takes place while the goods are situated on the high sea, will it be the law of the flag of the carrying vessel?[78] In this case, if the forum is in England, the English conflict of law rule will apply to determine which law will govern the property question. In this case, the lex situs become 'least plausible' and in fact, there is a lack of English authority on this point.[79] However, if both parties do not know the situs of the goods while the transfer takes place, the English court will be very likely to apply the applicable law to determine such property question.[80] However, in this case the applicable law is the CISG which does not govern the property question. Thus, this case would get into a deadlock situation, especially when no document of title is used.[81] Clearly, in this case if the CISG does regulate the transfer of property, the court would easily make its decision which is fairly understandable and acceptable to both parties.

Also in the above case, if the forum is in Argentina, its conflict of law rule will stipulate which law will govern the property issue. In this case, such law 'might' be the law of the country to which the goods are destined (ie Argentina law).[82] The court decision in this case would, of course, be much different from the above case where the forum is in England.[83] All the above two cases have demonstrated that the rules of private international law do not offer sufficient or uniform regulation on the transfer of property; and thus, seriously undermine the uniformity and certainty goal of the CISG.[84]

Thirdly, even when the court has settled the question of what domestic law will govern the property question, the next problem will arise. The reason is that such governing domestic law is often 'foreign' to the forum and then the court in question may find it difficult to obtain, understand and apply foreign laws. For example, suppose a France-based seller agrees to sell goods situated in England to a Germany-based buyer. If both parties do not otherwise state in their contract, the CISG will automatically apply to their contract (since Germany and France have already acceded to the Convention). In the case of disputes over property questions (which is out of the Convention's scope of application) and suppose the forum in Germany use the lex situs to refer to English law to govern the property question. But how can a German judge understand and accurately apply English law on the transfer of property.[85] In particular, for some unsettled points under English law which are still controversial among English academics, to expect a German judge with no previous knowledge of common law to understand and accurately apply English law on these points is utopian.[86] In addition, even when a learned German judge can accurately apply English law on the transfer of property, how can he understand and accurately apply domestic laws of other 100 countries under various legal systems on this same point where hundreds of thousands of traders in these countries make sales contracts everyday? This deficiency of the rules of private international law clearly presses for the need for the CISG to regulate the transfer of property. As Professor Honnold rightly says:

The rules of private international law were neither clear nor uniform; hence there would be doubt and dispute over which law was applicable. In addition, the domestic law would be foreign to one of the parties, and in most cases would be unsuited to the problems of international trade.[87]

The above discussion has examined the problems in deciding what domestic law will govern the property question in the case of its absence from the CISG's scope of application. The problems have proven to seriously damage the uniformity and certainty goal of the CISG. In addition, when a certain domestic law has already been chosen or decided, other problems will arise which will also damage the CISG's goal of maintaining uniformity, certainty and facilitating international trade on the basis of equality between the seller and the buyer.[88] These will be discussed below.

(b) Interaction with the CISG's Rule on the Transfer of Risk

The CISG provides a uniform rule on the passing of risk without giving the similar uniform rule on the transfer of property.[89] Visser has discussed this problem and he has concluded that it has caused the 'inequality' between the seller and the buyer.[90] This part will examine this 'inequality' problem. First, it will start by giving Visser's view (mainly represented by his example). Then, some counter-examples are offered. Finally, I will give some personal comments on this issue.

(i) Visser's Example

After giving an excellent account of the rules of various legal systems on the passing of property and risk, the author comes to a conclusion of the inequality problem by giving an example.[91] Suppose a French seller agrees to sell goods to a foreign buyer and the CISG applies to their contract. Under the CISG, in respect of clearly identified goods, the risk passes to the buyer at the time of delivery (ie either when the buyer takes over the goods or when the goods are handed over to the first carrier).[92] It is further assumed that the rules of private international law lead to apply French law to govern the 'property transfer' question. Under French law, property passes at the time of the conclusion of the contract. Visser concludes that this leads to an inequitable result to the seller (in favour of the buyer) since property passes to the buyer before the risk.[93]

(ii) Counter-Examples

Visser's above example together with his article's title ('Favour Emptoris: Does the CISG Favour the Buyer?') seem to suggest that the absence of an uniform rule on the transfer of property under the CISG leads to an 'inequitable' result in favour of the buyer at the expense of the seller. In his view, the CISG favours the buyer since the buyer becomes the owner of the goods before delivery (thus, it is unfair to the seller since he has to bear the risk from the time of conclusion of the contract to the time of delivery). However, I will show below that the buyer may only become the owner of the goods after delivery.[94]

Suppose in Visser's example, the rules of private international law lead to apply English domestic law to govern the property question.[95] In the case of the sale of specific goods or unascertained goods (which are subsequently appropriated to the contract), if the seller reserves the right of disposal, property will not pass to the buyer notwithstanding the delivery of the goods to the buyer.[96] Since such reservation may be express or implied (ie by the terms of the contract or appropriation), in addition to the most frequently used reservation (payment or tender of price) 'the seller is at liberty to reserve the right of disposal on whatever conditions he himself wishes to impose'.[97] In this case, clearly under the CISG the risk of loss may pass to the buyer before or on delivery; but property may only be transferred to him later. During this interval, if the goods are lost or damaged (not due to the seller's or carrier's fault), then the buyer has to bear the consequences.[98] In addition, under English law, the seller may unilaterally and effectively reserve the right of disposal of the goods and impose conditions to be fulfilled before property will pass (even when such reservation is caused by the seller's breach of the contract).[99] Under Visser's reasoning, this obviously results in 'more inequality' to the buyer (but not the seller).

(iii) Comments

The above analysis has shown that under the CISG and the rules of private international law, property may pass to the buyer either before or after the passing of risk. In fact, attaching the concept of 'equality' to the time differences between the passing of property and the passing of risk can be misleading. Equality is a concept more subjective than objective and such concept may be understood and interpreted differently under different legal systems which are premised on different social values and origins.[100] In Visser's above example, his concept of equality has its origin from the traditional principle res perit domino.[101] This principle was developed from the old time where a sale transaction was quite simple. In that old time, a typical transaction begins with all three incidents of a sale (property, possession and risk) rested with the seller and is completed when all these three incidents have passed simultaneously and irrevocably to the buyer.[102] However, in our modern sales transactions, these three incidents are normally not rested in one person (especially property and possession are often separated); thus, such old res perit domino principle may not be relevant. In fact, the modern legal trend (advocated by many distinguished academics) is that risk should be separated from property and a person with actual (not legal or constructive) possession should bear the risk.[103] In my opinion, this modern trend should be welcomed as it is more appropriate and practical; and it has in fact been adopted in the CSIG.[104]

As a result, it is not logical or appropriate to raise an issue of inequality out of the time difference in the passing of property and that of risk.[105] Despite this, the above cases have shown the incompatibility in the CISG when there is a uniform rule on the transfer of risk but not on the transfer of property. Together with the rules of private international law, the final result is the uncertainty where the parties may not be certain of the time of the passing of property (as it may happen before, on, or after the passing of risk).[106] These problems will undermine the uniformity, certainty and trade promotion goal of the CISG, especially when coupled with the 'third party complexities' problem. This problem is examined next.

(c) Third Party Complexities

When discussing the consequences of the absence of a uniform rule on the transfer of property under the CISG (in fact, under any domestic law also), almost all academics mention the serious problems associated with third parties' involvement. Immense literature has written about or mentioned this issue to a certain extent (more or less).[107] In fact, I fully support their view that the effects of the property exclusion from the CISG's scope of application on third parties' rights and obligations are the main and most significant reason why the CISG should regulate the transfer of property. However, here it is sufficient to summarise their views on this point under three common cases (ie title conflict, insolvency, and tort) in order to justify the need for the CISG regulation on the property question.

(i) Title Conflict

Suppose a German seller signs a contract to sell goods to a French buyer where the CISG is the applicable law of the contract and the contract itself has no stipulation regarding property issues. Since the CISG does not regulate the property question, it is very difficult and sometimes impossible to find answers to questions regarding third parties such as: is the seller required to have good title in order to pass property to the buyer? If the seller continuing in possession sells the goods to a second buyer (such buyer is either in good faith or not), is such sale valid and can the second buyer receive good title? If the buyer in possession (to whom property has not passed) sells the goods to a second buyer even when the seller has not been paid for the price, can the second buyer get good title?[108] Clearly, these questions are very important to the seller and the buyer, as well as the third party (second buyers). This problem will be much less serious when the CISG regulates the transfer of property which will be dealt with in chapter 3.

(ii) Insolvency

Professor Bridge has rightly commented that in the case of insolvency of one of the contracting party, 'the friction between the CISG and the governing law would be very great if the CISG were to apply'.[109] For example, in the case of the buyer's insolvency and the secured creditor or buyer's insolvency representative is demanding the goods (in which the property has already passed to the buyer), the unpaid seller may not invoke Article 30 to exercise a lien over the goods. The seller may invoke Article 25 (fundamental breach) to request the buyer to make restitution. However, under this situation, the seller is very likely to be subject to the governing property law; and may only 'submit his personal claim, which may be worth little, for the value of the goods'.[110] This result may be regarded as unfair to the seller as it derives him of his reasonable expectation under the contract. The similar situation would also arise if the already paid seller becomes insolvent and the secured creditors or seller's insolvency representative is demanding the goods (in which property has not yet passed under the governing property law).[111] This again will cause trouble to the buyer.

(iii) Tort

The owner's action in tort when his ownership rights are infringed is well recognised in most all legal systems.[112] The reason behind this right to defend may be that the owner has the greatest possible interest in the chattel and his right can be defended against the world.[113] This means if property has passed to the buyer and the goods are then damaged, lost or misdelivered, the buyer normally has a right to sue the carrier or any persons who have caused such effects on the goods.[114] Of course, if the property has not passed, the seller normally has the same defending right. Since the CISG does not govern the transfer of property, such defending right of the buyer (and the seller) may be seriously undermined. This problem will become even more serious in the case of the conflict of laws where the question on what law is to govern the proprietary effects in itself leads to litigation.[115]

The above analyses under this second section have demonstrated that various and serious problems can arise due to the CISG's property exclusion. This has clearly justified for the need to regulate the transfer of property under the CISG. That deals only with one 'unnecessity' reason of the opposing view. The other reason, ie whether it is impossible to unify the rules on the transfer of property under the CISG, will be examined in the next section and in Chapter 3.[116]

5. Practical Feasibility on Unification

This paper examines the property issue of the CISG under the current and future trend of the law on international trade rather than looking back at this issue in the 1980 year context. As a result, while the above two sections of this chapter have shown that the CISG should regulate the 'transfer of property' question, this section will discuss whether it is useful and, more importantly, possible for all nations concerned to amend the CISG and incorporate property issues into its scope of application.[117] This is done by examining the 'feasibility' question from legal, political, current trends, conflict of law unification as well as the 'uniformity purpose' perspectives of the CISG.

(a) Legal Perspective

The question regarding whether it is possible or feasible for state nations to unify rules on the transfer of property from a legal perspective is discussed in details in chapter 3. It is sufficient to note here that the gap among many legal systems may not be 'so big' as originally thought of; and thus, it is more likely for nations to unify on this point of law.

(b) Political Perspective

It is commonly agreed among academics that politics plays a very important role in nations' efforts to unify laws.[118]

It is easy to recognise that the world politics nowadays is much different from that in the 1980 context. After the collapse of the Soviet socialist countries block in early 1990s, politics or political philosophies among various nations are getting closer to one another in nature.[119] As a result, one big political obstruction to the harmonisation program for the CISG which existed before 1980 has now become almost non-existent. This means that it is more likely and more feasible for nations to consider amending the CISG to make it a more effective tool for its uniformity goal.

(c) 'Current Trend' Perspective

'Globalisation' is the modern trend of the world today, and it happens in the economic, political as well as legal aspects.[120] While this paper does not intend to discuss this globalisation issue, it is relevant to point out that harmonisation of law has currently increasingly been undertaken on the regional and global scale. For example, the current work on the Principles of European Contract Law (1998 version) is one of many EU nations' efforts to harmonise the law. Some scholars have also argued for the need to harmonise rules on the transfer of property in corporeal movables in a future European Civil Code which, in my opinion, should also extend to the CISG.[121]

In addition, the incredibly increasing use of internet trading or e-commerce has urged nation states to create and harmonise laws to regulate this emerging trading style.[122] The CISG is very likely to apply to such e-contracts since a contract of sale under the CISG 'need not be concluded in or evidenced by writing and is not subject to any other requirement as to form'.[123] However, the CISG has clearly not provided answers or any solutions to many questions raised by the internet trading.[124] As a result, the need for state nations to consider amending the CISG becomes more desirable.[125]

(d) Conflict of Laws Unification

One may argue that suppose it is necessary to unify rules on the transfer of property, why not unify rules on the conflict of laws on this point instead of regulating it under the CSIG? There are many reasons for not unifying rules of conflict of laws. The most important reason is that such unification way will lead to very unsatisfactory and uncertain results, mainly due to differences in various domestic substantial laws on the property transfer.[126] Second, making a new international convention on this point is very difficult, time-consuming and its interaction with the CISG is very likely to bring more problems and complexities to the parties rather than to help them.[127] Finally, regulating the transfer of property under the CISG can take less time and efforts and can make the regulation on the transfer of property fit into the CISG's context.[128]

(e) Maintain the Uniformity and Certainty Goal

Despite the success in the number of the acceding states, the CISG has been criticised by many academics for not achieving its uniformity goal.[129] While there is no need to discuss this unsuccessful point here, one should note that each and every article in the CISG often has a close relation with other articles. A relationship between article 4(b) on property question and other articles on the passing of risk discussed in section 4 above is a clear example.[130] Therefore, while I have argued for the need to regulate the 'transfer of property' under the CISG, the uniformity and certainty goal of the CISG can only be achieved if and only if all concerned states amend the provisions regarding the property question under the CISG as well as making other necessary changes in other provisions. Failing this, a partial amendment on the transfer of property under the CISG would even create more trouble than resolving the property transfer problems discussed in this paper.[131]

In summary, this chapter 2 has argued that the CISG should regulate the transfer of property question. The reasons offered include the non-uniformity and uncertaity that the absence of property transfer regulation under the CISG may create; the incompatibilities between the passing of risk and the passing of property; and the unsatisfactory results that the current rules of private international law have brought about. Regarding the two arguments of the opposing view, the first 'unnecessary' argument has been examined and rejected.[132] The second argument (ie it is not possible to unify the rule on the transfer of property under the CISG) has partly been examined with the conclusion that it is now more likely or more feasible for concerned states to amend the CISG to make it a better legal tool. The remaining part of such argument (ie the differences among various legal systems on the transfer of property are too big to unify or 'big gap' question) will be discussed in the next chapter.

CHAPTER 3: HOW SHOULD THE CISG REGULATE THE 'TRANSFER OF PROPERTY'?

This chapter examines the widely-held opposing argument that the differences in various legal systems on the transfer of property are 'too large to bridge'.[133] In other words, those opposing academics consider it impossible to unify the rule on the transfer of property under the CISG. However, it must be pointed out from the beginning that such view is very subjective because there are in fact no criteria to judge whether a certain difference between any two legal systems on this point of law is 'too large' or 'too small'.[134] As a result, the same difference may be considered by one academic as 'too large' but by another as 'too small'. The truth is that no one can accurately argue that it is possible (or impossible) to unify the rule on the property question under the CISG since it is a more practical (rather than theoretical) question of possibility.[135] One clear example is that even there was a very big gap between common law and civil law systems regarding certain remedies, it was in fact possible to unify the rule on this point under the CISG.[136] As the practical question on the possibility for states to unify the rule on this point of law has been examined earlier with a positive result, this chapter focuses only on the theoretical aspect of such possibility.[137] In particular, I will make a relatively comparative study of various legal systems on the transfer of property and attempt to suggest a way to unify the rule on this point.[138]

Since the Roman time, it has been widely recognised by most all legal systems that four requirements must be satisfied in order to make a voluntary transfer of property valid. They are: (i) the transferor needs to have a disposition right (normally property); (ii) there needs to be a valid cause (ie a sales contract in this context); (iii) there needs to be an act of transfer (ie by contract/agreement or delivery); and (iv) the goods often need to be sufficiently identified. Those requirements can loosely be called power, intent, formalities and identification respectively.[139] The remaining part of this chapter will analyse the transfer of property under various legal systems from those four perspectives, all examined in the context of the CISG in order to suggest some principles for unification.[140] On close examination of these issues, it will be shown below that contrary to the common thought of many scholars, the 'big gap' among various legal systems on the transfer of property is in fact not such 'big'.

Since the act of transfer seems to represent the most important and fundamental difference among various legal systems, discussion on this requirement deserves the most space of this chapter and will be discussed first.[141] Then, the issue of identification, valid cause, and disposition right will be examined in turn.

6. The Act of Transfer of Property

The legal principle on the act of transfer of property (or formalities) lies in the heart of the passing of property under a sales contract and probably represents the most fundamental gap among different legal systems.[142] In some systems, the passing of property only requires mere consent of the parties (ie under their contract) without the act of delivery while in others it requires not only the consent of the parties but also the delivery of the goods (chattels) by the seller to the buyer.[143] This section will first provide a brief discussion on the difference between a personal right and a real right regarding the transfer of property. Then it will discuss the two basic principles on the act of transfer (hereinafter called 'delivery' and 'consent' principles). Finally, reasons why the 'delivery' principle should be adopted under the CISG are offered.

(a) Personal Rights and Real Rights

Although there may be differences to some extent under various legal systems, rights under a sales contract are often classified as 'real rights' and 'personal rights'.[144] A personal right is the right of the obligee to demand performance of an obligation from the obligor. Thus, a personal right is valid and effective as between the obligor and obligee only and cannot be asserted against third parties.[145] In addition, a personal right normally cannot survive the obligor's bankruptcy; ie in such case the obligee normally cannot request for the chattel from the trustee, thus placing the former in an equal position as other unsecured creditors.[146] In contrast, a real right is a 'proprietary interest in a thing, which can be declared against the world'.[147] Such proprietary interest is mainly related to ownership or property and its dismemberments (normally the right to use, right to possess and right to dispose of the chattel).[148] Thus, a real right can be asserted against third parties. This is especially important in the case of the obligor's bankruptcy since the 'real right' holder can normally reclaim the chattel from the trustee.[149] In short, Professor Goode rightly comments that the distinction between real rights and personal rights is similar to the 'distinction between property and obligation, between what I own and what I am owed'.[150] As a result, a transfer of property under a sales contract in all contexts may have personal as well as proprietary effects.[151]

(b) The 'Delivery' and 'Consent' Principles

The formalities of the transfer of property under all legal systems often require a sales contract itself and 'any additional requirements'.[152] This means that on this point, all legal systems share the same requirement of a contract (either oral or written) but differ in the above additional requirements. Thus, below discussion just focuses on differences in such additional requirements.

The major distinction is the delivery requirement, ie some countries require an act of delivery of the chattel for the transfer of property ('delivery' principle) while others do not ('consent' principle).[153] Countries of the first category include German, Switzerland, Austria, Nordic countries, the Netherlands, and Spain. In order to make the transfer of property valid, in addition to 'consent' to such transfer expressly or impliedly provided in the sales contract, the law in these countries often requires the delivery of possession of the chattel. Such delivery may be physical (ie actual delivery of the chattel) or constructive (eg delivery of documents of title like a B/L). The second category includes England, France, Belgium, Luxembourg, Italy, and Poland. For a valid transfer of property, these countries' law does not require any act of delivery and mere consent by the parties (often incorporated in their sales contract) would suffice.[154] Some common features of each category as well as comments on this categorization are provided below.

(i) 'Consent' Principle

The law of the countries under this 'consent' principle often allows the parties to agree on the timing and manner of the transfer of property. Since such agreement on the transfer is normally interpreted from the terms of the underlying sales contract, either express or implied, the result is that property often passes at the conclusion of the contract.[155] Only when the parties have specifically agreed otherwise (often in their contract), may property pass according to such agreement.[156]

However, this principle is subject to a number of exceptions.[157] First, such principle applies only to specific goods, but not to generic and future goods. In this latter case (which is more common nowadays), property normally passes only after the goods have been appropriated to the contract. In fact, such appropriation in most cases happens upon delivery of the goods to the carrier or buyer (ie upon delivery).[158] Second, delivery plays a major role in the case of sale by the seller in possession and by the buyer in possession. If the chattel is sold twice by the seller and has in fact been delivered to the second buyer, this second buyer's title would normally prevail provided that he is bona fide.[159] Under English law, a buyer in possession (even without ownership) may effectively transfer the goods to a second buyer. Provided that the goods has been delivered to him and he is bona fide; the second buyer would receive good title.[160]

(ii) 'Delivery' Principle

Under this principle, the law requires delivery of the chattels for the transfer of property. The key point here is that the delivery itself should be considered a separate legal act.[161] This means that the delivery comprises two steps: a conclusion of a 'further legal agreement' on transfer of property and a factual or constructive delivery of possession of the chattel.[162] Due to this 'legal act' or 'further legal agreement', it clearly calls for an examination of the capacity of the parties, validity of that agreement and also acceptance of delivery.[163] This point represents a key difference from the 'consent' principle where delivery itself is not regarded a separate legal act.

However, there are also three exceptions where no delivery is required for the passing of property. First, when the seller reserves some user right (eg hiring back the chattel from the buyer), no delivery is necessary. Second, when the buyer is already in possession of the chattel, mere agreement would suffice to convert the buyer from a mere holder into an owner. Third, when the chattel is in the custody of a third person (eg warehouseman); then mere agreement between the seller and buyer may pass property and convert that third person from a custodian for the seller into that for the buyer. In these three cases, it can be said that there is constructive delivery only (ie no physical delivery).[164]

(iii) Comments

Despite the above, the distinction between the above two categories (one requires delivery and one does not) is not clear-cut. There are borderline cases where the law of a country may not fall absolutely into any of the above two categories. For example, in some countries (eg the US and Vietnam) the law presumes that the property passes at the time of physical delivery unless the parties agree otherwise.[165] Since this 'borderline' law does not make delivery as a compulsory requirement for the passing of property (while under the law of the countries in the 'delivery principle' category such delivery is compulsory); it should not be placed under this category. In addition, although this 'borderline' law respects the parties' autonomy in deciding the time for passing of property, such law shows a preference for the 'delivery' principle. This means in the absence of agreement between the parties, property will pass at the time of delivery of the chattel (while in this case, the law of the countries in the 'consent principle' category often states that property passes at the conclusion of the contract). As a result, this 'borderline' law should not be fallen into this category either. In fact, this 'borderline' law represents a good combination of the parties' autonomy principle and the preference for the 'delivery' principle.[166]

In addition, on closer examination, it has revealed that each of the above two main categories may be divided further.[167] Under the 'delivery principle' category, apart from countries which require only delivery for the passing of property; some other countries in South Africa requires both delivery and payment as pre-conditions for such transfer (ie the old Roman law).[168] Under the 'consent principle' category, there are two distinct approaches represented by the French and the English. As Professor Dalhuisen rightly comments, these two approaches look similar on their face (ie in both cases property normally passes at the conclusion of the contract), but are in fact not the same in essence. The English approach is based entirely on 'contractual freedom' where the parties can freely decide the timing and manner for the transfer of property. Only in the case of absence of the parties' agreement on such transfer, will the law intervene to decide (normally at the conclusion of the contract).[169] In contrast, the French approach is based more strictly on compulsory law which provides that the transfer of property 'is normally at the time the contract of sale is concluded'. This means there is almost no chance for the parties to create proprietary rights in private nor can they decide the modalities of the property transfer under French law. As a result, the English approach gives the parties more freedom than the French one.[170]

From the above analysis, there appears to be five distinct approaches: the English, the French, the US/Vietnamese, the German, and the South Africa. From the contractual freedom perspective, the parties' contractual freedom decreases along the spectrum, with the English approach representing the highest level of freedom (where parties may freely decide the timing and manner of the transfer) and the South African approach representing the least (where the transfer must be subject to both delivery and payment).[171] Similarly, from the legal compulsion perspective, the compulsory requirement increases from the English approach to the South African approach. Under the above two main categories, the English and French approaches belong to the 'consent' principle (where property often passes at the conclusion of the contract); the German and South African approaches belong to the 'delivery' principle (where at least delivery is required by law before the transfer of property); and the US/Vietnamese approach represents the 'borderline' approach.[172]

Having examined the above two main principles, the below subsection will propose and explain why the 'delivery' principle (in particular, the 'borderline' approach) should be adopted under the CISG.

(c) 'Delivery' Principle Under the CISG

In this part, reasons for adopting the 'delivery' principle (over the 'consent' principle) are first offered. Then, it will argue that the 'borderline' approach should be specifically applied in the CISG.[173]

(i) 'Delivery' Over 'Consent'

Under the CISG, the rule for the transfer of property should rely on the 'delivery' principle due to the following reasons.

First, the major shortcoming of the 'consent' principle is that it fails to apply to a vast majority of modern sales transactions; or in other words, property does not usually pass until delivery.[174] Modern sales often do not relate to specific goods (ie specifically identifiable to the contract), but mainly to unascertained and future goods which, under various legal systems following this principle, must be appropriated to the contract before passing of property. In practice, such appropriation often happens upon delivery; thus, property often passes upon delivery.[175]

Second, the 'consent' principle is a 'treacherous rule since it "promises" more than it can fulfil'.[176] The reason is that this principle mainly governs the legal relation between the seller and the buyer, but this relation can be easily agreed upon and incorporated in the terms of a sales contract between the two parties under either the 'delivery' or 'consent' principle. And, this principle is seriously undermined by other subsidiary rules regarding the two parties' relationship with third parties. Under all these subsidiary rules, delivery plays a major role in passing of property. [177]

Third, even in the case of specific (or ascertained) goods where the 'consent' principle is thought to have the most influence; what the buyer have received in practice is not 'property' in its real sense.[178] In fact, as Theriot comments, in this case, the buyer's rights are something less than 'ownership' or 'property'.[179] The reason is that before delivery, although the buyer has received the so-called property under the 'consent' principle, such buyer cannot assert his property right against third parties (eg a second bona fide buyer can effectively received good title or property via the purchase from the seller in possession).[180] In this sense, the buyer's property right is very much similar to a mere personal right (ie a right to demand performance of the seller's obligation), and not a real right which is a key feature associated with property.[181] Only after delivery, can the buyer's property right become fully effective as a real right, which again stresses the importance of delivery.[182]

Forth, one rationale behind the 'consent' principle under the case discussed in the preceding paragraph is to ensure the buyer's right to recover the chattel from the seller instead of merely recovering damages. This rational has its true sense only under some legal systems where it is very difficult or impossible to get specific performance remedy (eg the English law).[183] However, under the CISG where specific performance is favoured (ie 'as of right' of the buyer), the above rationale has lost its importance.[184] As a result, in this regard there is little or no difference between the buyer's right to property before delivery and his right to specific performance under the CISG.[185]

Fifth, on all above four demerits, the 'delivery' principle offers a solution which not only cures such demerits but is also 'clearer and must less subject to exceptions'. In addition, academics from countries under the 'consent' principle have also highly criticised their own principle. This presses for the need to adopt the 'delivery' principle.[186]

Finally, one may find it surprising to observe that although these two principles seem to differ significantly today, the law of the countries following these principles all share the same origin with the notion of seisin (physical possession).[187] Under this notion, English law originally required physical delivery of the goods for passing of property. It only started to abolish this requirement by the end of the 19th century.[188] In France, delivery was also originally required for the transfer of property. However, it later became a practice to include a clause ('clause de desaisine') under which legal possession was transferred immediately at the conclusion of the contract. As a result, property passed at the same time without physical delivery (such rule still prevails until now). Delivery has, of course, still played an important role in the USA and other delivery-requiring countries like Germany and the Netherlands.[189] As a result, the fact that the 'delivery' principle is also familiar to the countries under the 'consent' principle will make it easier for them to accept the insertion of the 'delivery' principle into the CISG.[190] In addition, my proposed rule below will very likely and practically receive more acceptances from many countries since such rule in fact lies between the two main principles.[191] The next text examines such rule.

(ii) 'Borderline' Approach

Having adopted the 'delivery' principle, one should ask how such principle can fit into the CISG context. This is a very important question since even a very good and effective principle or rule may produce negative effects if it is put into the wrong context.[192] In this regard, one should note that one main principle underlying the CISG is party autonomy.[193] Under Article 6, the parties may exclude the application of the CISG in its entirety or derogate or vary the effect of any of its provisions. This means that even if the CISG is amended to regulate the transfer of property (ie delivery is required for the passing of property); it is very likely that the party may effectively exclude such requirement and stipulate specifically the timing and manner of the transfer.[194] As a result, the 'consent' principle should not be absolutely ignored.

For the two main reasons (ie the advantages of the 'delivery' principle and the 'party autonomy' principle), the rule under the CISG should make the transfer of property subject to delivery of possession of the goods and to the parties' agreement on such transfer.[195] Delivery in this sense should mean not only physical delivery but also constructive delivery.[196]

However, on closer examination, in my opinion there appears to be two options: (a) to make the transfer of property subject to delivery and only in exceptional cases the parties may vary this rule (eg by specifically and expressly stipulating in their contract); or (b) to make transfer of property subject to the parties' agreement and only in exceptional case (ie in the absence of such agreement), property automatically passes upon delivery.[197] Clearly option (a) is closer to the 'delivery' principle as it gives parties less freedom to deviate from that ordinary rule. Since the 'delivery' principle is the preferred solution and it applies to a vast majority of modern transactions, option (a) should be chosen.[198] In addition, one should note that there are two ways to exclude the application of the CISG (whether partial or total): the implicit and explicit exclusion. While the explicit exclusion is often allowed under the CISG, it is very difficult but still possible for the parties to make an implicit exclusion.[199] As a result, option (a) if adopted will both promote the preferred 'delivery' principle and help the court interpret the parties' intention more uniformly.[200]

Having examined the two main principles regarding the transfer of property, it is now necessary to turn to the identification question on which various legal systems seem to be easier to be unified.

7. Identification

The passing of property does not only depend on the 'delivery' or 'consent' principle but also depends on the identification of the goods. On this point, various legal systems seem to share one common feature of sufficient identification.[201] Since specific goods are normally regarded as sufficiently identified, identification of the goods is mainly related to generic and future goods (which are the most common types of modern trading nowadays). Professor Dalhuisen brilliantly summarises that in all cases the circumstances will decide when the transfer of property is complete and delivery can reduce all associated problems.[202]

Therefore, the rule for the transfer of property under the CISG should follow this common principle, ie no property can pass if the goods have not yet sufficiently identified to the contract. It is interesting to observe that such common principle is also similar to the rule on the passing of risks under the CISG where normally risks cannot pass unless the goods have been 'clearly identified to the contract'.[203] This means that the proposed rule if adopted would easily fit into the CISG's context.

8. Valid Cause: Abstract or Causal System?

The third requirement for a valid transfer of property in all legal systems is that such transfer must be supported by a valid cause which is usually a sales contract. However, the consequences of the invalidity of such sales contract regarding the proprietary effects vary from country to country.[204] As a result, this section first focuses on detailed examination of those consequences among different legal systems which represent an abstract or causal system. Then, a proposed rule for unification is offered.

(a) Abstract and Causal Systems of Property Transfer

Since a valid cause is always required, in all legal systems any valid transfer of property always requires two agreements: a sales contract and an agreement on property transfer (hereinafter called a 'contract' and 'transfer agreement' respectively). The only fundamental difference is that some systems regard the transfer agreement as legally separate from the contract while other systems do not.[205] The former are hereinafter called 'separation' systems, and the latter 'unity' systems. In the unity systems, the transfer agreement and the contract are considered the one legal act only in which the transfer agreement is often incorporated or embodied into the contract, either by express or implied terms or by law, and there is no need for any separate agreement. Thus, the validity of the contract is the same as the validity of the transfer agreement. In the separation systems, although the transfer agreement may be either embodied into or physically separated from the contract, the legal separation between the two is well recognised by law. It means that the validity of the contract is different from the validity of the transfer agreement of which one may affect the other.[206] This calls for an examination of the relationship between the validity of the contract and that of the transfer agreement in all systems.[207]

In the case of invalidity of the transfer agreement, the result is quite clear in all legal systems: it prevents the seller from transferring property to the buyer although the seller's obligations under the sales contract may not be affected.[208] As a result, one only needs to examine the effects of the invalidity of the contract on the transfer agreement.

The initial or subsequent invalidity of the contract may or may not invalidate the transfer agreement. Under Professor Drobnig's approach, for countries (eg the Netherlands) where invalidity of the contract invalidates the transfer agreement, they belong to a causal system. For others where such causal invalidating is not possible (ie the transfer agreement still survives the invalidity of the contract like Germany), they belong to an abstract system.[209] However, while this approach may prove to be helpful in resolving validity problems associated with the transfer of property mainly before the buyer has physically received the goods, in my opinion it fails to provide solutions to similar problems after the buyer's physical receipt of the goods (which case is even more important). For example, under above causal system when the transfer agreement is held to be invalid (due to invalidity of the contract); how can the unpaid seller reclaim the goods (and property) from the buyer especially in the buyer's bankruptcy? Is the seller entitled to have a revindication right to reclaim the goods from the trustee or just a personal retrieval right?[210]

That goes to Professor Dalhuisen's different approach which is mainly based on the revindication right. In his opinion, if invalidity of the contract automatically invalidates the transfer agreement (ex tunc), it gives the seller a revindication right (in rem remedy). Thus, in the case of the buyer's bankruptcy, the seller would reclaim the chattels from the trustee. Countries following this principle belong to a causal system. In contrast, when invalidity of the contract cannot invalidate or does not automatically invalidate the transfer agreement (ex nunc), the seller would not have a revindication right. In this case, the seller may only have personal right (either damages or retrieval remedies) which is clearly not good in the buyer's bankruptcy. Countries subject to this principle is classified as abstract system. A common example is that if a contract is rescinded for payment default, under a causal system such contract is considered voided from beginning (and title reverts automatically and retroactively to the seller); but under an abstract system, such rescission of the contract is only effective from the moment it is invoked (and title cannot revert automatically and retroactively, but it just rests in the seller with a personal right).[211] In addition, although delivery is often considered important in classifying abstract/causal systems (eg where no delivery is required for property transfer, the automatic retransfer of property back to the seller would follow more easily upon rescission of the contract), the delivery itself does not necessarily leads to an abstract system.[212]

Clearly, Dalhuisen's classification approach to abstract/causal systems is fundamentally different from that of Drobnig. The former is fuller (as it applies to all countries) and goes to the root of the issue, ie whether the unpaid seller can reclaim the goods in the case of the buyer's bankruptcy?[213] Under the latter approach, even under a causal system if the invalidity of the transfer agreement does not give the seller such revindication right (real right) to reclaim the goods from the trustee but only a mere personal retrieval right, his situation is very much similar to the same seller under an abstract system with a personal damages right.[214] As a result, this paper takes Dalhuisen's approach to abstract/causal systems.[215]

(b) Proposed Rule for Unification

Regarding whether the abstract or causal system should be adopted under the CISG, one should note that Article 4(a) of the CISG excludes the validity question out of the CISG's scope of application. However, for the purpose of this paper, a choice between the abstract or causal system still needs to be made due to three reasons. First, the CISG just excludes the question of validity of the contract but not explicitly excludes the regulation on the relationship between validity of the contract and validity of the transfer agreement.[216] Second, the effects of avoidance regulated by the CISG clearly call for the examination of the relationship between such avoidance and the transfer agreement.[217] Third, as discussed earlier, this paper calls for future amendments of CISG which may also include the validity question.[218]

In order to make a choice, the remaining part will first discuss two fallacies associated with making such choice and then advocate for the proposed rule.

(i) Two Fallacies

In order to make a clear choice, one should consider two fallacies. First, the approaches to defining and classifying the abstract and causal systems by Dalhuisen and Drobnig are different. As indicated above, this paper takes Dalhuisen's approach.[219] Second, it is observed that in practice no legal system purely belongs to either of the two systems. In fact, most systems are hybrids, eg German law is abstract and Dutch law is causal but both having exceptions.[220] This runs into a danger that either choice of rule (whether abstract or causal, together with exceptions) is also correct with a real point being that sometimes exceptions are so many that they may eat up the rule.[221] In this paper, I will make a choice of rule that seems to hold true for most all cases and subject to the least exceptions if any.

(ii) Proposed Rule

From the above analyses, it is better to examine the 'invalidity' relationship between the contract and the transfer agreement in two periods: before and after the buyer has physically received the goods.[222]

Before the buyer's physical receipt of the goods, the seller may have sufficient remedies (including a right to stoppage in transit) under the CISG to protect himself in the case of the invalidity of the sales contract.[223] Thus, the 'invalidity' relationship between the contract and transfer agreement may not have any practical effects in this case. Perhaps, there are only two exceptions. The first concerns the case of the seller's bankruptcy where the buyer has already paid but not yet received the goods; can the buyer have a right of preference to reclaim the prepaid payment out of the trustee over other creditors? While this case is not extensively discussed here, the proposed rule under this paper can also prove to be appropriate.[224] The second exception is related to the disposition right when a third party is involved (ie a sale by either the seller in possession or the buyer in possession to a third party). This issue will be discussed later.[225]

After the buyer has physically received the goods, the 'invalidity' relationship between the contract and the transfer agreement becomes more practically important, especially in the case of the buyer's bankruptcy where the seller has not yet been fully paid.[226] In this situation, the abstract system should be adopted under the CISG for below reasons.[227]

First, probably the most important reason is that contrary to the common view, the abstract system appears to be the most common type in all legal systems in the world. One may find this surprising, but that is true.[228] In some 'more abstract' countries like Germany, the abstract approach is quite easy to be observed. In countries like England and the USA, once property has passed (and the buyer has physically received the goods), it is very unlikely for the seller to reclaim the goods if the sales contract is void (except for fraud). Such return is impossible if the contract is rescinded merely due to default.[229] This represents a largely abstract approach under English and American systems. Even in some seemingly 'most causal' systems like France and Spain, their approach is in fact also very abstract. For example, in France where the return of title in principle seems automatic in the case of invalidity of the sales contract (thus suggesting a causal system), the return of the chattel must be requested before the bankruptcy occurred. Such return is further prevented by some difficulties associated with conditions maturing upon bankruptcy. In addition, the bona fide protection operates in France not only in respect of third parties (as it normally happens in other countries) but also in respect of a party under an invalid sales contract (who is bona fide to the cause of the contract failure). All these suggest that the French approach to property transfer is very abstract.[230]

Second, another major reason is that the abstract system 'sustains the ordinary flow of goods' in modern commercial transactions where the certainty in the title is highly desired.[231] This becomes especially important when interests of bona fide third parties are involved.[232] In the case of the avoidance or rescission of the sales contract from later acts of the parties (eg default of the buyer in possession), a personal actions for damages under the abstract system may be more appropriate especially in the transfer of highly speculative assets (even if that asset is still in the custody of the buyer).[233]

Third, the modern trend is moving towards the abstract principle which one may see in many other areas of law, eg agency, document of title (B/L), bank guarantee and letters of credit (L/C). The most obvious case is the L/C which originates from the underlying sales contract; however, once established, it becomes independent from the contract and even from the buyer's instructions to the bank.[234] As a result, the adoption of the abstract principle under the CISG will comes in line with this trend and will avoid complications and facilitate modern commercial business.

Forth, the abstract principle is well fit to the context of the CISG. Although the CISG does not specifically regulate the validity issue, it governs the effects of avoidance of the contract between the parties.[235] In particular, under Article 81(2) if a contract is avoided after the buyer has received the goods, a seller may claim restitution from the buyer. However, in the case of the buyer's bankruptcy, it is not clear whether the return of the goods should be automatic and retroactive (ex tunc) or not (ex nunc). According to the Secretary Commentary, such return is not automatic which would mean that the current CISG is in favour of the abstract system.[236] As a result, an abstract principle if adopted will be clearly suited to the context and underlying principles of the CISG.

Finally, as a normal rule when the abstract principle is adopted, some exceptions must be made. While elaboration on this point is out of scope of this paper, in my opinion two types of exception are necessary. First, in the case of the seller's reservation of title property should not pass until some pre-conditions (normally full payment) are satisfied. This is consistent with the CISG's principle of party autonomy.[237] Second, some common exceptions (eg fraud) which are available in most all legal systems should also be made in the CISG.[238]

9. The Disposition Right

Having examined the third requirement for passing of property, it is necessary to turn to the last requirement of the disposition right.[239] This is often associated with a major question of title conflict relating to the transfer of property.[240] A title conflict happens when a seller who lacks the disposition right sells the chattel to a third-party buyer (eg a sale by a seller in possession or by a buyer in possession). Then, a title conflict arises between the old owner and a new one and who of the two should the law protect? In other words, in this case who should be recognised by law as the true owner in civil law terms or as having better title in common law terms?[241] In this regard, the Roman law long ago developed a nemo dat rule, meaning that 'no one can in principle give more than he/she has'. This well-known rule is quite obvious and has been in principle followed by all legal systems in the world (with some variations).[242]

However, this nemo dat rule may lead to difficulties in the case of title conflict where both the old owner and new owner have their own claims to get the chattel (or property). Here, the modern trend is moving towards to the protection of the new owner, especially when he is bona fide. Even in common law countries like England where the application of the nemo dat rule is in principle stricter, it still allows statutory exceptions to protect bona fide purchasers. This protection of bona fide purchaser becomes more common in most all legal systems when the purchaser has (at least physical) possession of the goods.[243] As a result, in my opinion the rule under the CISG should follow this common principle to protect the bona fide purchaser once he has taken delivery of possession of the goods.

There are also several reasons for adopting the above rule. First, again the two reasons just discussed above (ie it is the most common rule and it protects the ordinary flow of goods) are also applicable to this case.[244] Second, this rule fits well into the CISG context where it seems to favour bona fide purchaser protection.[245] Only one point that needs further attention here is how to decide whether the purchaser is unaware of the seller's lack of the disposition right (ie 'bona fide'). There are two different approaches: one is objective (eg the new Dutch law) and one is subjective (eg German law).[246] Under the theme of the CISG where the 'reasonable person' test is frequently repeated, the objective approach should be preferred.[247]

In summary, this chapter has examined the transfer of property under various legal systems regarding four basic requirements: the act of transfer (formalities), identification, a valid cause, and the disposition right. It has revealed that contrary to the common view that the 'big gap' among those legal systems is too big to bridge; the real gap is not such big and it in fact can be bridged. The proposed rules of unification regarding each of the above requirements are offered. These rules, as argued, can represent the best possible solutions for adoption by state nations and can fit well into the CISG's context.

CHAPTER 4: CONCLUSION

Globalization (whether in trade, legal or political areas) is an inevitable trend nowadays that each nation, each organization or business enterprise and even each individual has to face.[248] For traders and manufacturers, international trade is becoming more important to their business then ever. To keep up with this trend, the function of both national and private international law is now moving from the traditional 'protecting' function towards the 'facilitating' function.[249] In this regard, the CISG represents a step forward in harmonising and unifying international mercantile law or a modern lex mercatoria.[250] Despite the advantages of the CSIG, the Convention also has drawbacks.[251] Contrary to the common view for the CISG's exclusion of the property question, this paper has argued that such exclusion represents a big drawback. The two most important reasons for the opposing view (ie it is neither necessary nor possible for the CISG to regulate the property question) are critically examined and rejected. In addition, this paper has pointed out that the exclusion of the property question has clearly undermined the uniformity and certainty goal of the CISG and has created many difficulties for businesses in their international commercial dealings.

To cope with these difficulties at the individual level, businesses have two solutions. First, they may exclude the CISG's application totally by an express term in their contracts.[252] Instead, they can choose a domestic law to govern their contract. This solution has an advantage of having their contract to be uniformly and fully governed by a single domestic law. However, its disadvantage is that either one or both parties are often not familiar with such chosen governing law; and thus, this solution may not be easily accepted or be satisfactory. Second, the parties may expressly agree to regulate the transfer of property in their contract (either by making specific provisions or by referring to a domestic law to govern this issue) and let the CISG govern other contractual issues. This solution may cure the demerit of the first solution since both parties may find it much easier to agree on a neutral and familiar application of the CISG and just need little efforts to agree on the property issue. In addition, since the CISG normally applies to their contract automatically, this solution is more practical and useful. However again, a demerit of this solution is its complication and the possible problems caused by the interaction between the CISG and the specific provisions on the property question agreed and incorporated by the parties in their contract.[253] As a result, efforts from state nations are needed to overcome these problems.[254]

At the national and international level, this paper has argued that it is possible for nation states to unify rules on the property question. In particular, future regulation on the transfer of property under the CISG should follow below general rules.[255]

  1. Subject to the below four rules, a valid voluntary transfer of property must meet four requirements: (i) the transferor needs to have a disposition right (normally property); (ii) there needs to be a valid cause (ie a sales contract); (iii) there needs to be an act of transfer (formalities); and (iv) the goods need to be sufficiently identified.

  2. The transfer of property should be made subject to delivery of possession of the goods to the transferee and only in exceptional cases the parties may expressly agree to vary this rule.

  3. No property can pass unless the goods are sufficiently identified to the contract.

  4. Except for some exceptions, after the transferee has physically received the goods, the validity of the transfer of property should not depend upon the validity of the underlying sales contract.[256]

  5. The rule favouring the protection of bona fide purchasers should be followed.[257]

In addition, the ultimate purpose of the CSIG may only be achieved by not only regulating the transfer of property but also amending other relevant provisions under the CSIG.[258] This has clearly called for efforts from all nations to work further on amendments to the CISG in the near future. In this regard, one 'too pessimistic' view that unifying and harmonising international sales law is unrealistic should be rejected.[259] Twenty or thirty years ago, very few could expect the harmonisation process within the EU countries to be possible, but now it is becoming true. Another international harmonisation effort on banking practices (the UCP 500) has well proved to be very successful.[260] However, given differences among various countries, to expect an international convention like the CISG to be a perfect legal tool on international trade is too optimistic. The view adopted in this paper is that it is now both necessary and possible for states to reconsider amending the CISG to make it a better tool that would fit into the current trend of development and globalization in the 21st century. In this regard, this paper just flashes some light on the issue for such an international effort. And, as already argued, it is worth a try!


BIBLIOGRAPHY

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  8. M Bridge The International Sale of Goods: Law and Practice (OUP Oxford 1999)

  9. G Conetti 'Uniform Substantive and Conflicts Rules on the International Sale of Goods and Their Interaction' in P Sarcevic and P Volken (eds) International Sale of Goods (Dubrovnik Lectures Oceana 1986) <http://www.cisg.law.pace.edu/cisg/biblio/conetti.html#4> (26 Jun 2004)

  10. L Collins and others (eds) Dicey and Morris on the Conflict of Laws (13th edn Sweet & Maxwell London 2000)

  11. U Drobnig 'Transfer of Property' in A Hartkamp and others (eds) Towards a European Civil Code (2nd edn Nijmegen: Ars Aequi Libri 1998).

  12. JH Dalhuisen Dalhuisen on International Commercial, Financial and Trade Law (Hart Publishing Oxford and Portland, Oregon 2000)

  13. NB Dien and others Private International Law (Hanoi National University Press Vietnam 2001)

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  16. R David 'The Methods of Unification' (1968) 16 American Journal of Comparative Law 13

  17. F Enderlein and D Maskow Comment on the International Sales Law (Excerpt) <http://www.cisg.law.pace.edu/cisg/biblio/enderlein-pmbl.html> (4 August 2004)

  18. F Enderlein and D Maskow 'Commentary on the United Nations Convention on Contracts for the International Sale of Goods and Convention on the Limitation Period in the International Sale of Goods' (excerpt) <http://www.cisg.law.pace.edu/cisg/biblio/enderlein-art04.html#art041> (29 Jun 2004)

  19. F Enderlein in P Sarcevic and P Volken (eds) International Sale of Goods (Dubrovnik Lectures, Oceana 1996) <http://www.cisg.law.pace.edu/cisg/biblio/enderlein1.html#ia> (4 August 2004)

  20. F Ferrari 'Assumption of Debts as a Subject Matter Excluded from the US Sales Convention (Commentary on OGH, April 24, 1997)' <http://www.cisg.law.pace.edu/cisg/biblio/ferrar.html#*> (28 Jun 2004)

  21. F Ferrari 'Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing' (1995) 15 Journal of Law and Commerce 1 <http://www.cisg.law.pace.edu/cisg/text/franco6.html> (29 July 2004)

  22. S Gopalan 'Transnational Commercial Law: The Way Forward' [2003] American University International Law Review 803 <access via WestLaw website> (20 June 2004)

  23. AG Guest and others (eds) Benjamin's Sale of Goods (6th edn Sweet & Maxwell London 2002)

  24. RM Goode Commercial Law (2nd edn Penguin London 1995)

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  28. RA Hillman 'Applying the United Nations Convention on Contracts for the International Sale of Goods: The Elusive Goal of Uniformity' (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 21-49 (Pace University Website)

  29. A Kaczorowska International Trade Conventions and Their Effectiveness (Kluwer Law International The Hague/London/Boston 1995)

  30. Kastely 'The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention' (1988) 63 Washington Law Review 607, 608-9 (Pace University Website)

  31. FH Lawson 'The Passing of Property and Risk in Sale of Goods - A Comparative Study' (1949) 65 Law Quarterly Review 352

  32. KN Llewellyn 'Through Title to Contract and A Bit Beyond' (1937-8) 15(2) New York University Law Quarterly Review 157

  33. S Nestor and J Thompson 'Corporate Governance Patterns in OECD Economies: Is Convergence Under Way?' <http://www.oecd.org/document/54/0,2340,en_2649_37439_1868470_1_1_1_37439,00.html> (6 Apr 2004)

  34. Note 'Disengaging Sales Law from the Sale Construct: A Proposal to Extend the Scope of Article 2 of the UCC' (1982) 96 Harvard Law Review 470

  35. Note 'Unification and Certainty: The United Nations Convention on Contracts for the International Sale of Goods' (1984) 97 Harvard Law Review 1984

  36. P North and JJ Fawcett Cheshire and North's Private International Law (13th edn LexisNesix UK 2004 Reprinted)

  37. O'Sullivan 'The Political Economy of Comparative Corporate Governance' (2003) 10(1) Review of International Political Economy 23

  38. Pace University Website <http://www.cisg.law.pace.edu/> (12 August 2004) where various works cited in this paper can be found.

  39. PA Piliounis 'The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these Worthwhile Changes or Additions to English Sales Law?' (2000) Pace International Law Review 1 (Pace University Website)

  40. PM Roth 'The Passing of Risk' (1979) 27 American Journal of Comparative Law 291 (Pace University Website)

  41. LS Sealy and RJA Hooley Commercial Law: Text, Cases and Materials (3rd edn LexisNexis UK 2003)

  42. Secretariat Commentary on the CISG, esp Articles 4, 6, 7, 30, 40, 41, 42, 66, 71, 72, 81, 82, 83, 84 (Pace University Website)

  43. I Szasz in J Decsenyi and T Bacskai (tr) A Uniform Law on International Sales of Goods (Akademiai Kiado Budapest 1976)

  44. P Schlechtriem Uniform Sales Law - The UN Convention on the International Sale of Goods (Manz Vienna 1986) <http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html> (4 August 2004)

  45. LS Sealy '"Risk" in the Law of Sale' [1972B] Cambridge Law Journal 225

  46. W Tetley 'Sale of Goods - The Passing of Title and Risk - A Resume' chapter 7 of Marine Cargo Claims (4th edition to be published in March 2005) <http://tetley.law.mcgill.ca/maritime/ch7.pdf> (2 Jul 2004)

  47. RL Theriot 'An Examination of the Role of Delivery in the Transfer of Ownership and Risk in Sales under Louisiana Law' (1986) 60 Tulane Law Review 1035 <access via Westlaw website> (22 Jun 2004)

  48. E Visser 'Favour Emptoris: Does the CISG Favour the Buyer?' (1998) University of Missouri, Kansas City Law Review 77 (Pace Univesity Website)

  49. JF Wilson Carriage of Goods by Sea (4th edn Pearson Longman 2001)

  50. JS Ziegel 'Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods' (1981) (excerpt) <http://www.cisg.law.pace.edu/cisg/text/ziegel4.html> (29 Jun 2004)


DEDICATION

This dissertation is dedicated to my family in my home country Vietnam.


ACKNOWLEDGEMENT

In the first place, I would like to express my most sincere gratitude to my supervisor Professor Tom Allen for his encouragement and invaluable comments on this dissertation.

In addition, I would like to thank Ms Janet Ulph, Mr Chris Riley, Mr Robin Widdison who had, through their various modules and lectures, provided me with the necessary background knowledge that allowed me to embark on the dissertation.

I also wish to thank other staff in the Law Department and in the University Libraries for their kind assistance during my study in Durham in general and my work on this dissertation in particular.

Finally, I would be greatly indebted to my company, Petrovietnam and PV Drilling, for their generous financial support and encouragement during my study at Durham University.

All errors and mistakes if any in this dissertation are my sole responsibilities. This dissertation is made based on the law and materials available to me as of 11 August 2004.

Durham, August 2004.


ABBREVIATIONS

'CISG' or 'The Convention'    The United Nations Convention on Contracts for the International Sale of Goods (1980)
 
'The SGA 1979' The Sales of Goods Act 1979
 
'The Rome Convention' Rome Convention on the Law Applicable to Contractual Obligations (1980)
 
'UNCITRAL' United Nations Commission on International Trade Law
 
'UCP 500' Uniform Customs and Practices for Documentary Credits (1993 version)


TABLE OF CASES

Bishopsgate Motor Finance Corpn v Transport Brakes Ltd [1949] 1 KB 332

Vallejo v Wheeler (1774) 1 Cowp 143

Waverley Borough Council v Fletcher [1996] QB 334


ABSTRACT

This paper seeks to answer two questions: should the CISG regulate the transfer of property? and if so, how should it regulate?, all examined in light of the current trend of global harmonization. Regarding the first question, it is argued that there is a clear need for the CISG to regulate the transfer of property. The reasons offered include the non-uniformity and uncertainty that the absence of the regulation on the property transfer under the CISG may create and the unsatisfactory results that the current rules of private international law have brought about. In respect of the second question, this paper takes a relatively comparative study of various legal systems in the world on the passing of property. In particular, this study focuses on four requirements for a valid transfer of property: the act of transfer of property, the identification of the goods, the valid cause and the disposition right. It reveals that contrary to the common thought on this issue, the gaps among many different legal systems are in fact not very 'big'. Thus, attempts are made to propose the rules for unification of the law under the CISG on each of these aspects. The proposed rules, as argued, will very likely receive wide acceptance among various nations and will fit well into the CSIG's context. Finally, the paper concludes that now it is both necessary and possible for state nations to consider amending the CISG in order to make it a better legal tool which would help both nations and their businesses by promoting and facilitating international trade for their better development in the 21st century.


FOOTNOTES

1. Other 'special sales' may include hire-purchase where the hirer/purchaser may have an option to purchase or return the goods after the expiry of the hire-term. 'In all mercantile transactions the great object should be certainty: and therefore, it is of more consequence that a rule be certain, than whether the rule is established one way or the other. Because speculators in trade then know what ground to go upon' Vallejo v Wheeler (1774) 1 Cowp 143, 153 (Lord Mansfield) as quoted in LS Sealy and RJA Hooley Commercial Law: Text, Cases and Materials (3rd ed LexisNexis UK 2003) 10 (emphasis added).

2. Lots of literature may be cited for the difficulties due to the absence of the uniform law on the international trade. Eg S Gopalan 'Transnational Commercial Law: The Way Forward' [2003] American University International Law Review 803, 803-4 <access via WestLaw website> (20 Jun. 2004).

3. See sub-section 3(a) below where I argue for harmonisation of international rules and various references are cited.

4. R David 'The Methods of Unification' (1968) 16 American Journal of Comparative Law 13, 13-14. 'Unification of law' is more flexible than 'uniformization of law': R David above, 15. The difference between 'unification of law' and 'harmonisation of law' is one of emphasis and degree rather than kind: M Bridge The International Sale of Goods: Law and Practice (OUP Oxford 1999) 37.

5. R David (n 4 above) 13-14; M Bridge (n 4 above) 37-38.

6. Table of contracting states as of 16 April 2004 <http://www.cisg.law.pace.edu/cisg/countries/cntries.html> (22 June 2004).

7. Lots of literature on advantages and disadvantages of the CISG can be found in the Pace Law School Database <http://www.cisg.law.pace.edu/> (23 Jun. 2004). E.g. RA Hillman 'Applying the United Nations Convention on Contracts for the International Sale of Goods: The Elusive Goal of Uniformity' (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 21-49; PA Piliounis 'The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?' (2000) Pace International Law Review 1, 1-3.

8. Article 4 of the CISG: 'This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in this Convention, it is not concerned with:

(a) the validity of the contract or of any of its provisions or of any usage;
(b) the effect which the contract may have on the property in the goods sold.'

9. M Bridge (n 4 above) [2.22]. 'Differences in legal systems lead to differences in legal reasoning' E Visser 'Favour Emptoris: Does the CISG Favour the Buyer?' (1998) University of Missouri, Kansas City Law Review 77, 79 <http://www.cisg.law.pace.edu/cisg/biblio/Visser1.html#b*> (24 Jun. 2004).

10. M Bridge Personal Property Law (3rd edn. OUP Oxford 2002) 14, 30-31; M Bridge (n 4 above) [2.22]. One should note that although the SGA 1979 s 61(1) defines property as 'general property', this meaning is only understood in the context of the SGA. Thus, if the CISG is the applicable law to the sales contract which raises a problem of the definition of 'property' under an English court, one may argue that such 'property' has a different meaning as that defined in the SGA.

11. Vietnam Civil Code 1995 Art 173 (in part) [Vietnamese text not reproduced] (Ownership rights comprise the rights of the owner to possess, use and dispose of property [movables and immovables] in accordance with law). 'The English law of ownership and possession, unlike that of Roman law, is not a system of identifying absolute entitlement, but of priority of entitlement' Waverley Borough Council v Fletcher [1996] QB 334, 345 (Auld LJ) as quoted in M Bridge Personal Property Law (3rd edn OUP Oxford 2002) 28.

12. Under English law, 'possession' is basically understood as consisting of two elements: the exercise of factual control over the chattel and the concomitant intention to exclude others from the exercise of control. Ownership may be regarded as 'greatest possible interest in a thing which a mature system of law recognises, consisting of a bundle of rights and incidents in respect of the thing' M Bridge Personal Property Law (3rd edn OUP Oxford 2002) 17, 29-30 and for a general account of 'possession' and 'property/ownership', see chapter 2.

13. See further discussion on this point in item (ii) sub-section 4(a) and sub-section 6(a) below. This meaning of property is also adopted in the SGA 1979 s 61(1). For a very comprehensive discussion on 'title' or 'property' under common law, see KN Llewellyn 'Through Title to Contract and A Bit Beyond' (1937-8) 15(2) New York University Law Quarterly Review 157.

14. This widely-accepted view was summarized in the Secretariat Commentary (closest to the Official Commentary) as follows: 'It was not regarded possible to unify the rule on this point nor was it regarded necessary to do so since rules are provided by this Convention for several questions linked, at least in certain legal systems, to the passing of property; the obligation of the seller to transfer the goods free from any right or claim of a third person; the obligation of the buyer to pay the price; the passing of the risk of loss or damage to the goods; the obligation to preserve the goods' <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-04.html#1> (24 Jun. 2004) (emphasis added).

15. E Visser (n 9 above) 77- 82 has the same view.

16. E.g. M Bridge (n 4 above) [2.21]-[2.23]; AG Guest and others (eds) Benjamin's Sale of Goods (6th edn Sweet & Maxwell London 2002) [5-003]-[5-015].

17. This purpose is both expressly and impliedly provided in the Preamble of the CISG and Article 7(1). However, one should distinguish between 'uniformity' and 'certainty'. The difference is that the law may be 'uniform' but may not be 'certain'; and the law may be 'certain' but may not be 'uniform'. The two concepts are complementary rather than conflicting. Thus, the best situation (and purpose) is that the law should be both uniform and certain (where 'certainty' may be more related to results or substance; while 'uniformity' may be more related to rules or forms; and in this sense, certainty is even more desirable). One should note that an increase (or decrease) of uniformity often, but not necessarily, increases (or decreases) the level of certainty. Also, an increase (or decrease) of certainty often, but not necessarily, increases (or decreases) the level of uniformity. In this paper, except as otherwise expressly stated, when I argue for the uniformity goal of the CISG, it also implies the certainty goal; and when I argue for the certainty goal, it also implies the uniformity goal. See generally Note 'Unification and Certainty: The United Nations Convention on Contracts for the International Sale of Goods' (1984) 97 Harvard Law Review 1984, esp 1985-6.

18. This is stated in the Preamble of the CISG. Regarding the 'trade facilitation' purpose, F Enderlein and D Maskow comments: 'The idea that the unification of law would promote international trade, as it is expressed here in an exaggerated way ("... removal of legal barriers" ...), is the underlying motif of any efforts to achieve uniform laws in this field' (emphasis added) <http://www.cisg.law.pace.edu/cisg/biblio/enderlein-pmbl.html> (4 August 2004). In addition, one should note here that the concept of 'equality' is more subjective than objective as it depends more on the underlying policy or origin of each legal family (see also discussion in sub-section 4(b) below).

19. Very few academics have disagreed on the exclusion of 'property issue' in the CISG, eg E Visser (n 9 above). In fact, I have found no authors who have advanced the 'proposed rule' on transfer of property for the CISG in the English language literature (except U Drobnig's work on the EU Civil Code; see details in chapter 3 below). Two authors (F Ferrari and C Witz) have suggested a uniform rule to regulate the transfer of property; however, their works are in the French or German language which has made it impossible for me either to get access to or to understand them (see footnote 126 in E Visser n 9 above).

20. E.g. A Kaczorowska International Trade Conventions and Their Effectiveness (Kluwer Law International The Hague/London/Boston 1995); S Gopalan 'Transnational Commercial Law: The Way Forward' [2003] American University International Law Review <access via WestLaw website> (20 Jun. 2004) 803-849; G Conetti 'Uniform Substantive and Conflicts Rules on the International Sale of Goods and Their Interaction' in P Sarcevic and P Volken (eds) International Sale of Goods (Dubrovnik Lectures Oceana 1986) <http://www.cisg.law.pace.edu/cisg/biblio/conetti.html#4> (26 Jun 2004); J S Hobhouse 'International Conventions and Commercial Law: The Pursuit of Uniformity' (1990) 106 Law Quarterly Review 530; I Szasz in J Decsenyi and T Bacskai (tr) A Uniform Law on International Sales of Goods (Akademiai Kiado Budapest 1976) 1-30.

21. S Gopalan (n 20 above) 804-806.

22. This has also been expressed by many authors; eg I Szasz (n 20 above) 3-4; RA Hillman 'Applying the United Nations Convention on Contracts for the International Sale of Goods: The Elusive Goal of Uniformity' (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 21-49 <http://www.cisg.law.pace.edu/> (26 Jun 2004).

23. S Gopalan (n 20 above) 806-810.

24. S Gopalan (n 20 above) 807. J S Hobhouse (n 20 above) 534-5 says:

The utopian ideals which have led to the present situation have a parallel in those which gave rise to the movement for the adoption of Esperanto as a universal language. International commerce is best served not by imposing deficient legal schemes upon it but by encouraging the development of the best schemes in a climate of free competition and choice.

25. S Gopalan (n 20 above) 809.

26. R David 'The Methods of Unification' (1968) 16 American Journal of Comparative Law 13, 14.

27. S Golapan (n 20 above) 809. In this paper, I will use the phase 'unification of law' rather than 'harmonisation of law'; both of which are similar in kind and only different in degree and emphasis: M Bridge The International Sale of Goods: Law and Practice (OUP Oxford 1999) 37.

28. Professor R David (n 26 above) 15 says (emphasis added):

International unification of law is conceived of as the process of providing the same rules for the different countries so that the same solution applies everywhere, in France and Germany, in England and Poland, if a difficulty concerning a given relationship of international law happens to arise.

29. Two main reasons are: the difficulty in finding the 'common legal language' understandable by lawyers of all nations and the 'disinclination of national legislators, the organ par excellence of national sovereignty, to join in solutions and drafts developed on the international level has been underestimated', R David (n 26 above) 16.

30. R David (n 26 above) 13, 17, 26-27. See also S Golapan (n 20 above) 809-814; G Conetti (n 20 above).

31. F Diedrich 'A Law of the Internet? Attempts to Regulate Electronic Commerce' (2000) 3 The Journal of Information, Law and Technology <http://elj.warwick.ac.uk/jilt/00-3/diedrich.html> (28 Jun. 2004). See also R David (n 26 above) 19-22; S Gopalan (n 20 above) 809-819.

32. When speaking of the 'binding force' of the conventions and model laws, one should note that the application of the CISG and model law is also subject to parties' autonomy: the CISG Art 6.

33. R David (n 26 above) 19-22; S Golapan (n 20 above) 812-819; F Diedrich (n 31 above).

34. Lots of literature has written about this point. Eg E Visser 'Favour Emptoris: Does the CISG Favour the Buyer?' (1998) University of Missouri, Kansas City Law Review 77, 80-82 <http://www.cisg.law.pace.edu/cisg/biblio/Visser1.html#b*> (24 Jun. 2004); F Ferrari 'Assumption of Debts as a Subject Matter Excluded from the US Sales Convention (Commentary on OGH, April 24, 1997)' Pace University Website <http://www.cisg.law.pace.edu/cisg/biblio/ferrar.html#*> (28 Jun 2004); RA Hillman 'Applying the United Nations Convention on Contracts for the International Sale of Goods: The Elusive Goal of Uniformity' (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 21-49 <http://www.cisg.law.pace.edu/cisg/biblio/hillman1.html#*> (28 Jun 2004).

35. E Visser (n 34 above) 81-82. However, one should note that Professor Ferrari has rightly argued that the inclusion of the phrase 'In particular, except as otherwise expressly provided in this Convention,' in Article 4 of the Convention leads to the 'delimitation between the matters governed by the Convention and those excluded from its sphere of application not being very clear'. As a result, Visser's division of matters falling into gaps praetor legem and gaps intra legem is in fact not very clear-cut (F Ferrari, n 34 above). For the issue of the general principles of the Convention, see RA Hillman (n 22 above).

36. This happens in most all cases (but not all cases) because of the inclusion of the phrase 'In particular, except as otherwise expressly provided in this Convention', F Ferrari (n 34 above). Professor Ferrari also states that 'even the exact determination of the CISG's material sphere of application has already led to litigation'. See also next discussion in items (i) and (ii) sub-section 4(a).

37. This classification is for convenience only since there may be overlaps among groups. One should note that one paramount purpose of the CISG is also 'certainty' (section 2 above). As argued later in this chapter, all problems in those groups also affect such 'certainty' purpose either directly or indirectly.

38. L Collins and others (eds) Dicey and Morris on the Conflict of Laws (13th edn Sweet & Maxwell London 2000) 965; C Debattista 'Transferring Property in International Sales: Conflicts and Substantive Rules Under English Law' (1995) 26(2) Journal of Maritime Law and Commerce 273, 274-276.

39. However, the CISG may govern some issues related to the proprietary effects: the CISG also requires the seller to pass property to the buyer (Article 30) and indirectly stipulates that the goods delivered must be free from third party rights or claims (Articles 41, 42): F Enderlein and D Maskow 'Commentary on the United Nations Convention on Contracts for the International Sale of Goods and Convention on the Limitation Period in the International Sale of Goods' (excerpt) <http://www.cisg.law.pace.edu/cisg/biblio/enderlein-art04.html#art041> (29 Jun 2004).

40. C Debattista (n 38 above) 274; L Collins and others (eds) (n 38 above) 965.

41. C Debattista (n 38 above) 274, 276-277.

42. L Collins and others (eds) (n 38 above) 963-965. One should note that the Rome Convention applies only to contractual obligations and thus, 'has no bearing of the rule of the conflict of laws relating to the transfer of property', C Debattista (n 38 above) 274.

43. L Collins and others (eds) (n 38 above) Rule 116, 963.

44. L Collins and others (eds) (n 38 above) 965.

45. The SGA 1979 s 17(1), s 18 Rule 1. See below further discussion on conflict of laws in item (iii) sub-section 4(a).

46. Eg JS Ziegel 'Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods' (1981) (excerpt) <http://www.cisg.law.pace.edu/cisg/text/ziegel4.html> (29 Jun 2004) or Secretariat Commentary on Article 4 (closest counterpart to an Official Commentary) <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-04.html> (24 Jun 2004).

47. F Ferrari (n 34 above).

48. Eg such view was expressed by Professor JS Ziegel in his article: JS Ziegel (n 46 above) (emphasis added).

49. Eg '... the owner of a chattel may be descried as the person with the best possessory interest in it' M Bridge Personal Property Law (3rd edn OUP Oxford 2002) 28-31.

50. M Bridge (n 49 above) 30.

51. G Battersby 'A Reconsideration of "Property" and "Title" in the Sale of Goods Act' [2001] Journal of Business Law 1. See further other related articles on the same debate: G Battersby and AD Preston 'The Concepts of "Property," "Title" and "Owner" Used in the Sale of Goods Act 1893' (1972) 35 Modern Law Review 268; HL Ho 'Some Reflections on "Property" and "Title" in the Sale of Goods Act' (1997) 56(3) Cambridge Law Journal 571.

52. The SGA 1979 ss 24, 25.

53. G Battersby 'A Reconsideration of "Property" and "Title" in the Sale of Goods Act' [2001] Journal of Business Law 1, 4-5, 13. In this case, it is normally said that the seller has transferred or could pass 'good' title to the buyer; but such way of saying is very misleading or simply wrong (since the seller cannot transfer more than he actually has: the nemo dat rule). The more correct way is to say that the buyer has received a title from the seller; and such title is new and perfect (as distinct from the seller's previous title). Although this understanding is applied to the SGA 1979 context only, I believe it can apply to understanding similar concepts in other legal systems also where the bona fide purchasers are protected.

54. Article 173 (in part) [Vietnamese text not reproduced] (Ownership rights comprise the rights of the owner to possess, use and dispose of property [movables and immovables] in accordance with law). Article 175(2) [Vietnamese text not reproduced] (No one may illegally deprive another person of his or her property [movables and immovables] or restrict the ownership rights of another person with respect to his or her property. An owner is entitled to protect his or her ownership rights himself or herself and to stop any person who infringes his or her ownership rights and to search for, and to reclaim, the property which has been possessed, used or disposed of unlawfully by another person).

55. The concept of ownership has its legally recognized meaning not only in the relationship between the seller and the buyer but also in their relationship with other third parties. Therefore, Professor JS Ziegel's comment (ie 'Property questions will of course remain very important but only for the purpose of determining the rights of buyer and seller vis-à-vis third parties and vice versa' n 46 above) would, in my opinion, not be very accurate since in all cases rights of the seller and the buyer in any property questions always relate to third parties (e.g. if the seller transfers a 'good title' to the buyer, the buyer will get 'good' ownership against the 'whole world'/any third parties; but if the seller transfer a 'bad title' to the buyer, the buyer may not get a 'perfect' ownership against the 'whole world'/third parties). See also next discussion.

56. F Enderlein in P Sarcevic and P Volken (eds) International Sale of Goods (Dubrovnik Lectures, Oceana) (1996) 133, 144 <http://www.cisg.law.pace.edu/cisg/biblio/enderlein1.html#ia> (4 August 2004).

57. One should note that under English law, property means either special property (or possession) or general property (ownership). The fact that 'property' is defined as 'general property' only in the SGA 1979 s 61(1) context does not guarantee it has the same meaning if the applicable law is the CISG (see also last paragraph of section 1 above).

58. For a discussion of a personal right and real right, see below sub-section 6(a).

59. P Schlechtriem Uniform Sales Law - The UN Convention on the International Sale of Goods (Manz Vienna 1986) 72-73 <http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html> (4 August 2004).

60. This view is expressed in the Secretary Commentary <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-41.html> (4 August 2004).

61. Of course parties to the contract may choose a specific domestic law to govern this issue.

62. The CISG Articles 30, 41, 42 just touches some small issues of the property question (as just discussed above).

63. The CISG Article 6 (regarding the parties' autonomy). This view is also expressed by C Debattista (n 38 above) 276-277.

64. The concept of 'Private International Law' and 'Conflict of Laws' are quite similar. They are so well-known that they may be used interchangeably without any harm. 'In fact, the very purpose of private international law is to avoid conflicts of law': P North and JJ Fawcett Cheshire and North's Private International Law (13th edn LexisNesix UK 2004 Reprinted) 13-14.

65. Contract falling under scope of application of the CISG is stipulated under Articles 1-6. Once a certain domestic law on the issue (choice of law) is decided, problems arising due to differences in different domestic law will be considered in sub-section 4(b) below.

66. Various authors have expressed this point. Eg JS Ziegel (n 46 above).

67. Kastely 'The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention' (1988) 63 Washington Law Review 607, 608-9 <http://www.cisg.law.pace.edu/cisg/biblio/kastely1.html> (4 August 2004).

68. The CISG may apply to their international sales contract automatically, eg when contracting parties have their 'places of business in different Contracting States' or 'rules of private international law lead to the application of the law of a Contracting State' (the CISG Art 1) or the parties have chosen the CISG as the applicable law (the CISG Art 6).

69. P North and JJ Fawcett (n 64 above) 9.

70. In deciding the choice of law, a concept of 'Renvoi' is used. For example, when an English court has decided that by English private international law, the dispute is to be governed by the law of Italy; then there are three possibilities:

(i) to take 'the law of Italy' to mean the 'internal law of Italy'; or

(ii) to take 'the law of Italy' to mean the whole legal system of Italy (including its private international law); thus, if such 'law' refers the dispute back to England, then the English law would apply ('Single Renvoi'); or

(iii) to take 'the law of Italy' to mean the law which an Italian judge would administer if he were hearing the case ('Double Renvoi').

In this paper, for simplification, I will take the first solution 'which is in general correct and desirable': P North and JJ Fawcett (n 64 above) 51-66, esp 52-56. See also L Collins and others (eds) (n 38 above) Rule 1 [4-001]-[4-036].

71. L Collins and others (eds) (n 38 above) 964.

72. L Collins and others (eds) (n 38 above) 964.

73. Vietnam Civil Code Article 833(1) [Vietnamese text not reproduced] (The establishment and termination of ownership rights and the contents of such rights, with respect to the chattel shall be determined in accordance with the law of the country in which the chattel is situated, unless the laws of the S.R. Vietnam state otherwise); NB Dien and others Private International Law (Hanoi National University Press Vietnam 2001) 135-136.

74. L Collins and others (eds) (n 38 above) 968.

75. L Collins and others (eds) (n 38 above) Rule 116, 963.

76. Of course one may argue that since the CISG deliberately excludes property issues, any consequences following this exclusion are not in the intended goal of the CISG. However, the CISG's ultimate goal is to facilitate international trade or help traders. And if these traders have a lot of problems applying the CISG and they are uncertain about the consequences of the CISG's application, such CISG's ultimate goal is clearly defeated. For this 'trade facilitation' purpose, see section 2 above.

77. Eg rules of private international law lead to apply the Argentina law, which would then lead to the application of the CISG (since Argentina is a Contracting Member under the CISG: Article 1).

78. All these 'similar' questions are raised in C Debattista (n 38 above) 275. However, in this case, I make the seller and buyer more specific and use the CISG as the applicable law so that the more serious problem may be recognised (Debattista does not examine the CISG's application).

79. 'The lack of English authority on the transfer of property in transit is probably due to the commercial practice of transferring them by means of documents of title such as bills of lading' L Collins and others (eds) (n 38 above) 969. See also C Debattista (n 38 above) 275.

80. L Collins and others (eds) (n 38 above) 968. Eg if the applicable law to the contract is English law, then the court will use English law to determine the transfer of property question (eg the time and validity of the transfer of property). See also RM Goode Commercial Law (2nd edn Penguin London 1995) 1125-1126.

81. Eg an delivery order or seaway bill is used instead of an 'order B/L'.

82. This is just a 'hypothetical case' since I do not know Argentina conflict of law rule. However, at least some countries follow this rule: eg Vietnam Civil Code Article 833(2) [Vietnamese text not reproduced] (The ownership rights with respect of corporeal movables in transit shall be determined in accordance with the law of the country of destination, unless there is an agreement to the contrary) and this has also been confirmed in Decree 60/CP (06 Jun 1997) Article 9(1)(c) providing guidance for detailed implementation of some provisions under the Vietnamese Civil Code relating to civil relations with foreign elements.

83. For detailed regulation on the transfer of property under various domestic laws see E Visser (n 34 above) 83-90.

84. See n 76 above.

85. Eg regarding the phrase 'deliverable state' of the goods under the SGA 1979 s 18 rule 1, property in the specific goods in a 'deliverable state' passes when the contract is made. However, under s 61(5) 'Goods are in a deliverable state within the meaning of this Act when they are in such a state that the buyer would under the contract be bound to take delivery of them'. Professor Atiyah has brilliantly discussed this controversial or conflicting point: under s 61(5), it may mean that if the buyer would not be bound under the contract to take delivery of goods (eg because of their defects), then the goods are not in a deliverable state; and thus, property would never pass in any defective goods. But contrary to this view, it is generally accepted that defects do not prevent the passing of property (if the buyer rejects the goods, property revests in the seller). In addition, s 61(5) may refer to the situation that the goods are not in a 'deliverable state' physically and the buyer agrees to take delivery as they stood. However, 'the possession of goods can probably always be transferred in law if the parties intend to transfer it, no matter what the physical condition of the goods may be. If this what "deliverable state" meant, therefore, goods would probably always be in a deliverable state.' PS Atiyah JN Adams and H Macqueen The Sale of Goods (10th edn Pearson Longman 2001) 318-319 (emphasis added). See further interesting discussion of another controversial issue of 'factors indicating a contrary intention' at 320-322.

86. Of course, the judge may often require a proof of foreign law; however, many problems may also arise due to the fact that the judge may not understand or be familiar with such foreign law. See L Collins and others (eds) (n 38 above) Rule 18 [9-002]-[9-025]; P North and JJ Fawcett (n 64 above) 99-105.

87. J Honnold Uniform Law for International Sales (2nd edn Kluwer Law International 1991) 150 as quoted in RA Hillman (n 22 above) (emphasis added). Professor JH Dalhuisen in Dalhuisen on International Commercial, Financial and Trade Law (Hart Publishing Oxford and Portland, Oregon 2000) 84 brilliantly summarises the demerits of the conflict of law rules as follows (emphasis added):

(a) the notion of the seat of these legal relationships proved too narrow and the seat itself could be difficult to pin down;

(b) the conflicts rules could be very different from country to country and they became purely domestic;

(c) the basic rules like the lex contractus and lex locus delicti or even lex situs proved muti interpretable;

(d) the legal structures to which they related could not always be so simply classified (as proprietary, contractual, delictual, etc) and left considerable qualification problems especially between contract and tort; whilst

(e) the increasing governmental intervention in private law reduced the scope for rules of private international law and left the impact of mandatory law unsettled.

In my view, the above book by Professor Dalhuisen is by far the best book on international trade from the internationalist perspective which is not only descriptive but also very analytical.

88. See above section 1.

89. The passing of risk is regulated under Articles 66 - 70 of the CSIG.

90. E Visser (n 34 above).

91. For an excellent description of various legal systems on the transfer of risk and property, see E Visser (n 34 above) 83-90.

92. The CISG Articles 67(1), 69(1). Visser just refers to the case of Article 69(1); however, here I also consider the similar case of Article 67(1) since when the seller hands over the goods to the first carrier, such act is considered as delivery of goods in accordance with Article 31(a) of the CISG.

93. E Visser (n 34 above) 90-91 concludes:

This results in an inequitable outcome. The buyer becomes the owner of the goods at the time of the conclusion of the contract, but he does not bear the risk of loss of these goods until delivery. Where, for instance, the goods are lost after the conclusion of the sales contract and before they are delivered, the seller will have to bear the loss, although he no longer has the property in the goods sold.

94. Thus, according to Visser's reasoning, it is here unfair to the buyer (in favour of the seller) since the buyer has to bear the risk from the time of delivery until later time when he becomes the owner of the goods.

95. Eg the buyer is in Japan (or even in France) but the goods are situated in England and the forum is in England. The English court will apply the lex situs so that English law would govern property issues. See above item (iii) sub-section 4(a).

96. The SGA 1979 s 19(1).

97. AG Guest and others (eds) Benjamin's Sale of Goods (6th edn Sweet & Maxwell London 2002) [5-131]. Of course the most common case is the FOB sale where risk normally passes upon delivery (FOB term) but property will pass later upon transfer of an 'order' B/L to the buyer: See generally LS Sealy and RJA Hooley Commercial Law: Text, Cases and Materials (3rd edn LexisNexis UK 2003) 467-479.

98. The CISG Art 66: 'Loss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller'.

99. 'But the seller may also, when appropriating unascertained goods to the contract, unilaterally reserve the right of disposal of the goods and impose conditions to be fulfilled before property will pass. A conditional appropriation of this nature will effectively prevent the property from passing, even though by reserving the right of disposal the seller is in breach of the terms of the contract of sale': AG Guest and others (eds) (n 97 above) [5-132] (emphasis added).

100. Of course in some cases it is much easier to observe whether a rule is equitable or not. The simplest example is that if the law allows the seller to seek remedies in the case of the buyer's breach but does not allow the buyer to seek remedies in the case of the seller's breach; most all legal systems and all people can say that the law in this case is not equitable. However, in some more subtle cases like the above example, it is more difficult to agree on the 'equality' examination of the rule.

101. Ie 'risk follows property' or 'the actual owner should bear the risk': JH Dalhuisen (n 87 above) 228; see also E Visser (n 34 above) 82-83.

102. LS Sealy '"Risk" in the Law of Sale' [1972B] Cambridge Law Journal 225, 225.

103. JH Dalhuisen (n 87 above) 228. The modern view is that the question of risk (not property) should play a central role in sales law: see Note, 'Disengaging Sales Law from the Sale Construct: A Proposal to Extend the Scope of Article 2 of The UCC' (1982) 96 Harvard Law Review 470; W Tetley 'Sale of Goods - The Passing of Title and Risk - A Resume' chapter 7 of Marine Cargo Claims (4th edition to be published in March 2005) <http://tetley.law.mcgill.ca/maritime/ch7.pdf> (2 Jul 2004) esp 44.

104. The CSIG separates the question of risk from the question of property. This is welcomed by many academics. Eg PM Roth 'The Passing of Risk' (1979) 27 American Journal of Comparative Law 291; P Schlechtriem (n 59 above) 86; see also Secretary Commentary to Article 66. All these articles can be found in the Pace Law School Database <http://www.cisg.law.pace.edu/> (4 August 2004). One should note that even in this paper I argue for regulating the transfer of property under a 'delivery' principle: ie to attach 'property' to 'delivery' (or possession); it should not be interpreted as linking 'property' to 'risk' or vice versa. Among differences, one distinction should be noted: in my view, property should be attached to delivery of possession (both actual and constructive, eg a transfer of a B/L), while under the above view risk should be attached to only actual possession. See further discussion in Chapter 3.

105. In fact, many countries (mostly civil law countries including Vietnam and England) have followed the res perit domino principle. Thus, their legal thinking on the 'inequality' problem may also be premised on such 'risk follows property' principle (which is thought to be equal or fair). However, modern legal thinking on the transfer of property and risk may be based more on convenience and practicality.

106. Normally, the parties are not aware of the rules of private international law nor do they know the specific rule on this point under a certain domestic law (as this law is often 'foreign' to at least one party).

107. One may find in any standard text book or article on the transfer of property, it is often noted that the importance of the regulation on the transfer of property is mainly related to 'third party's involvement' like the title conflict or insolvency of either seller or buyer. Eg AG Guest and others (eds) (n 97 above) [5-003]-[5-015]; LS Sealy and RJA Hooley (n 97 above) 274-275; JS Ziegel (n 46 above).

108. M Bridge The International Sale of Goods: Law and Practice (OUP Oxford 1999) [2.2 2]-[2.23]; AG Guest and others (eds) (n 97 above) [5-003]-[5-004].

109. M Bridge (n 108 above) [2.23] (emphasis added); also AG Guest and others (eds) (n 97 above) [5-005].

110. M Bridge (n 108 above) [2.23] (emphasis added). Under Article 71(2) of the CISG, the seller may prevent the handing over of the goods to the buyer even though the buyer holds a document which entitles him to obtain the goods (if it becomes apparent that the buyer will not perform a substantial part of his obligations). Under Article 25 of the CISG, the seller may declare the contract void and seek restitution.

111. This case is similar to the previous case where the buyer (who has paid the price) may only submit a personal claim, which may be worth little, in order to get back the prepaid payment.

112. JH Dalhuisen (n 87 above) 354-355. In the case of English law, see AG Guest and others (eds) (n 97 above) [5-009]-[5-010].

113. See above discussion on this point item (ii) sub-section 4(a).

114. For English law, see AG Guest and others (eds) (n 97 above) [5-009]-[5-010]. For Vietnamese law, see Civil Code Article 175(2). However, this normally holds true for other legal systems also.

115. See above discussion on the conflict of law problems in item (iii) sub-section 4(a).

116. Supporters for the 'property' exclusion from the CISG's scope of application rely on the two main reasons: it is unnecessary and impossible to unify the rule on the property question under the CISG. See Secretariat Commentary <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-04.html#1> (24 Jun. 2004)

117. Although some academics argued that it was not possible to incorporate property issues into the CISG's scope of application before 1980 (when the Convention was signed); it is meaningless (and unpractical) to argue that it was in fact possible to undertake such incorporation at that time. Thus, in this paper, I only consider this issue under the current situation of international trade; and this section argues that it is very likely for all nations to amend the CISG to make it a more useful and effective legal tool for developing the international trade in the future.

118. Immense literature has agreed on this point: Eg RA Hillman (n 22 above). Professor David (n 26 above) 26 rightly says (emphasis added):

Unification of law should not be regarded as a simple task that can be accomplished conveniently with the help of some theorist's prescription. This endeavour is political in nature, and must therefore be approached in a spirit of refinement and conciliation.

119. Even some remaining socialist countries (like Vietnam and China) are now changing their political systems (although slowly). Eg the Doi Moi (Renovation Programme) carried out in Vietnam since 1987 has gradually made it both politically and economically different in nature from before.

120. For globalization issue, see O'Sullivan 'The Political Economy of Comparative Corporate Governance' (2003) 10(1) Review of International Political Economy 23, esp 23-31; S Nestor and J Thompson 'Corporate Governance Patterns in OECD Economies: Is Convergence Under Way?' <http://www.oecd.org/document/54/0,2340,en_2649_37439_1868470_1_1_1_37439,00.html> (6 Apr 2004). For a highly critical account on globalization issues, see Hertz The Silent Takeover: Global Capitalism and the Death of Democracy (Arrow 2002).

121. U Drobnig 'Transfer of Property' in A Hartkamp and others (eds) Towards a European Civil Code (2nd edn Nijmegen: Ars Aequi Libri 1998). See further Chapter 3 below.

122. For the legal regulation on the electronic commerce, see generally F Diedrich 'A Law of the Internet? Attempts to Regulate Electronic Commerce' (2000) 3 Journal of Information, Law and Technology <http://elj.warwick.ac.uk/jilt/00-3/diedrich.html> (28 Jun. 2004); R Brownsword and G Howells 'When Surfers Start to Shop: Internet Commerce and Contract Law' (1999) 19(3) Legal Studies 287; T Allen and R Widdison 'Can Computers Make Contracts?' (1996) 9(1) Harvard Journal of Law & Technology 25.

123. The CISG Article 11.

124. Eg how can one define the time the offer sent via the internet reaches the offeree as per the CISG Article 15(1)? Or Who should take the risk of viruses consuming messages of acceptance? Or Can an autonomous computer make a sales contract? See R Brownsword and G Howells (n 122 above); T Allen and R Widdison (n 122 above).

125. Of course, nation states may create a new uniform law to deal with e-commerce transaction only, which is different from the CISG. However, in my opinion, the co-existence of two laws or two conventions regulating one issue of sales contract in international trade is not advisable. This is because the two conventions may be inconsistent or conflicting; especially when a country may be a member of one convention but not the other or one country may be a member of both conventions with two conflicting provisions on one issue.

126. See above discussion on the problems caused by the conflict of laws and differences in many domestic laws on the transfer of property in item (iii) sub-section 4(a); esp Professor Dalhuisen's comments in n 87.

127. When the transfer of risk is regulated by the CSIG and the transfer of property is regulated by another convention, it will very likely create more problems to the parties. In addition, a nation may accede to only one but not the other; and another nation may accede to both conventions with conflicting rules; thus the application of the conventions is in itself problematic.

128. See also next discussion and Chapter 3 below.

129. Immense literature have criticised this failure of the CISG to achieve the uniformity purpose (one may find it easily via the Pace Law School Database <http://www.cisg.law.pace.edu/> (6 Jul 2004); eg RA Hillman (n 22 above); or the 'incompatibility of remedies' problems under the CISG: P Schlechtriem (n 59 above) 62-63, 76-76 and 84-86; Kastely (n 67 above) generally part I; N Boghossian 'A Comparative Study of Specific Performance Provisions in the United Nations on Contracts for the International Sale of Goods' 73-76 <http://www.cisg.law.pace.edu/cisg/biblio/boghossian.html> (4 August 2004).

130. Sub-section 4(b) above.

131. Eg if the CISG regulates the transfer of property; however, if the 'incompatibility of remedies' or 'non-uniformity' problems (n 129 above) have not been resolved, the 'uniformity' goal of the CISG will not be achieved.

132. The two main arguments for the exclusion of property question out of the CISG are that it is not necessary and it is not possible to unify the rule on this point (see section 2 above). Since this chapter has already argued that the CISG should regulate the transfer of property, it is clearly necessary to unify the rule on this point of law.

133. Many academics have given this argument as the main reason for not regulating the property question under the CISG. Eg RM Goode 'Reflections on the Harmonisation of Commercial Law' (1991) 1 Uniform Law Review 61-62 where the learned author says 'it was felt that on issues of property law differences in legal policy and approach created a chasm too large to bridge', as quoted in Secretariat Commentary (closest to the Official Commentary) <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-04.html#1> (24 Jun. 2004). See further the Secretariat Commentary text (as above).

134. This subjective view is represented by the subjective (italic) words in the Secretariat Commentary 'It was not regarded possible to unify the rule on this point...' and in Professor Goode's comment 'it was felt that on issues of property law differences in legal policy and approach created a chasm too large to bridge' (emphasis added) (see n 133 above).

135. Thus, one can only argue that it is more likely (or less likely) for state nations to unify this point of law which depends much on state nations' efforts and probably political influence also (see above discussion on this point in sub-section 5(b)).

136. Eg The CISG has introduced the remedies of granting an additional time (Nachfrist) (Articles 47, 63) and price reduction (Article 50) which were not actually available or even 'strange' under English law but available under civil law (eg German law). One should note that price reduction under the CISG is different from the remedy of damages under s 53 of the SGA 1979. See generally PA Piliounis 'The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these Worthwhile Changes or Additions to English Sales Law?' (2000) Pace International Law Review 1 <http://www.cisg.law.pace.edu/cisg/biblio/piliounis.html#N_129_> (25 July 2004).

137. The 'feasibility' question has been discussed earlier (section 5).

138. Of course this small-sized paper cannot suggest a detailed way to unify the rule on the transfer of property under the CISG. Instead, I will suggest some principles for unification only which may act as a basis for further detailed investigation.

139. JH Dalhuisen Dalhuisen on International Commercial, Financial and Trade Law (Hart Publishing Oxford and Portland, Oregon 2000) 402. Even some countries categorise these four requirements differently, they all seem to share such same requirements. Eg under English law, such four requirements are: first, the transferor must have had a power to dispose of the chattel; second, he must have intended to divest himself of his title; third, he must have taken steps to effectuate that intention by an act of transfer or an agreement for transfer recognized in equity as transfer; fourth, the transferred chattel must be identifiable as subject matter of the transfer agreement. See RM Goode Commercial Law (2nd edn Penguin London 1995) 55. Under Vietnamese law, these four requirements are loosely stated in various Articles: the Civil Code 1995 Articles 173, 176(2), 242, 256 and Commercial Law 1997 Articles 46, 58, 69.

140. On the transfer of property issue, two indispensable and excellent works were written by Professor JH Dalhuisen (n 139 above), esp. 402-432 and Professor U Drobnig 'Transfer of Property' in A Hartkamp and others (eds) Towards a European Civil Code (2nd edn Nijmegen: Ars Aequi Libri 1998). Each distinguished Professor made his different approach to the topic, which is very relevant to his own purpose. Dalhuisen examines the topic from a fuller perspective and just from a purely comparative point (without suggesting any principle for unification). Drobnig examines it from a narrower perspective (eg he mainly focuses on the 'act of transfer' and 'real agreement' questions) but puts forward some principles for unification towards a European Civil Code. In this paper, I will make another different approach to suit the paper's purpose: I will examine the issue from the full perspective (Dalhuisen's approach), put it under the CISG's context, and suggest some principles for unification (Drobnig's approach). The two Professors' approaches may be fundamentally different on some issues as will be specifically analyzed later in this chapter.

141. The importance of this 'the act of delivery' or 'formalities' question is held by Drobnig (n 140 above) 495-510, esp 496 to which I fully agree.

142. This importance of the principle is stressed by Drobnig (n 140 above) 496. See also RM Goode (n 133 above).

143. U Drobnig (n 140 above) 496; JH Dalhuisen (n 139 above) 403; RM Goode (n 133 above). Since the CISG only concerns with goods (corporeal movables) as stated in Article 2, the words 'goods' and 'chattels' may be used interchangeably in this paper. The act of delivery (of goods) may be physical or constructive (see below discussion in sub-section 6(b)). The 'act of delivery' (of goods) should be distinguished with the 'act of transfer of property' since the latter (related to property) may or may not require the former (related to possession of goods).

144. RL Theriot 'An Examination of the Role of Delivery in the Transfer of Ownership and Risk in Sales under Louisiana Law' (1986) 60 Tulane Law Review 1035, 1053-4 (access via Westlaw website, 22 Jun 2004). Under English law, personal rights may be further divided into 'rights ad rem' (ie the rights of a person who has no existing real right but merely a personal right to have the chattel delivered or otherwise transferred to him, and once such transfer happens, these rights become real rights) and 'purely personal rights' (ie the rights that do not involve the delivery or transfer of the chattel but the obligor's personal performance in some other way, eg payment of debts or damages): RM Goode Commercial Law (2nd edn Penguin London 1995) 28-31.

145. RL Theriot (n 144 above) 1053; RM Goode Commercial Law (2nd edn Penguin London 1995) 29-30.

146. This is one major difference between a real right and a personal right: RM Goode Commercial Law (2nd edn Penguin London 1995) 28, 30.

147. RL Theriot (n 144 above) 1053.

148. Although these are the main and common features of proprietary interest under various legal systems, they may differ to certain extent due to the difference in definition of 'property' under those systems (see last paragraph section 1 above). Under English law, there is another equitable charge in equity: RM Goode Commercial Law (2nd edn Penguin London 1995) 28, 30-31.

149. Most all legal systems have recognised that this real right survive the obligor's bankruptcy. See RL Theriot (n 144 above) 1054; RM Goode Commercial Law (2nd edn Penguin London 1995) 28-29; AG Guest and others (eds) Benjamin's Sale of Goods (6th edn Sweet & Maxwell London 2002) [5-005]. But see also section 8 below regarding a valid cause.

150. RM Goode Commercial Law (2nd edn Penguin London 1995) 31.

151. G Battersby and AD Preston 'The Concepts of "Property," "Title" and "Owner" Used in the Sale of Goods Act 1893' (1972) 35 Modern Law Review 268, 279-280. Although the authors's view is examined under the Sale of Goods Act 1893, from the above analysis, this view can be true in all legal systems.

152. JH Dalhuisen (n 139 above) 403. The 'any additional requirements' may be reduced to 'no further requirement' at all since the additional 'consent' requirement may have already been incorporated in or implied from the sales contract itself as in the next discussion.

153. JH Dalhuisen (n 139 above) 403; U Drobnig (n 140 above) 496. In this sub-section 6(b), unless otherwise stated, I just suppose all chattels (goods) are sufficiently identifiable to the contract so that the transfer of property would mainly depend on delivery or consent principle. The issue of identification of the chattels will be discussed in section 7 below where it will be pointed out that most legal systems share the same requirement that chattels must be sufficiently identified before any property may pass.

154. JH Dalhuisen (n 139 above) 403-4; U Drobnig (n 140 above) 496-503. For a fuller description of law of some of these countries on this point, see also E Visser 'Favour Emptoris: Does the CISG Favour the Buyer?' (1998) University of Missouri, Kansas City Law Review 79 <http://www.cisg.law.pace.edu/cisg/biblio/Visser1.html#b*> (24 Jun. 2004) 83-90; W Tetley 'Sale of Goods - The Passing of Title and Risk - A Resume' chapter 7 of Marine Cargo Claims (4th edition to be published in March 2005) <http://tetley.law.mcgill.ca/maritime/ch7.pdf> (2 Jul 2004) 18-32. However, one should note that since Professor Tetley just examines the issue of the transfer of property generally from perspectives of individual countries or group of countries (not from the above two general principles); his view on the passing of property may not be very accurate. Eg at 30, the author says:

Passing of title under the civil law takes place either at the moment explicitly agreed upon by the parties or, if the contract is silent, at the moment when the parties exchange their consents to the sales, irrespective of whether the goods have been delivered or their price paid. (Emphasis added).

Clearly this statement does not hold true for 'civil law' countries like Germany where delivery is an 'additional requirement' for the transfer of property under a sales contract.

155. JH Dalhuisen (n 139 above) 403-407; U Drobnig (n 140 above) 497-498. One should note that in this case, the chattels are presumed to be identifiable to the contract already (n 153 above). The most common situation is that the parties did not stipulate specifically the timing and manner of the transfer, and in this case property normally passes at the time of the conclusion of the contract. For more detailed discussion on this 'consent' principle, see U Drobnig above 497-501.

156. It should be noted that the extent of the parties' freedom to decide the timing and manner of the transfer may vary from country to country (eg the English and French approaches discussed next).

157. For a fuller discussion of these exceptions, see U Drobnig (n 140 above) 498-500. A brief summary would suffice here.

158. JH Dalhuisen (n 139 above) 407-8; U Drobnig (n 140 above) 499. For English law, the SGA 1979 s 18 Rule 5; AG Guest and others (eds) (n 149 above) [5-059]-[5-108].

159. Ie he will get good title (or receive the property): French Civil Code Article 1141, 2279 as quoted in JH Daihuisen (n 139 above) 406; U Drobnig (n 140 above) 499-500. Under English law, the SGA 1979 s 24; in this case, 'delivery' may be either physical or constructive (eg a transfer of B/L).

160. Ie property passes to this second buyer: the SGA 1979 s 25. In this case, delivery may also be physical or constructive (eg delivery of document of title). For an interesting debate on this point, see G Battersby and AD Preston 'The Concepts of "Property," "Title" and "Owner" Used in the Sale of Goods Act 1893' (1972) 35 Modern Law Review 268; HL Ho 'Some Reflections on "Property" and "Title" in the Sale of Goods Act' (1997) 56(3) Cambridge Law Journal 571; and G Battersby 'A Reconsideration of "Property" and "Title" in the Sale of Goods Act' [2001] Journal of Business Law 1. See above further discussion on this point in item (ii) sub-section 4(a).

161. JH Dalhuisen (n 139 above) 405, 410. This is a major difference from the 'consent' principle where delivery is not considered as a separate legal act (see further discussion).

162. U Drognig (n 140 above) 496-7, 501 where the author calls this agreement as 'real agreement' and says that normally the law first requires for delivery of chattels and only thereafter deals with consent of the parties (real agreement). However, the author does not expressly regard the delivery as a separate legal act or two-steps structure. The 'legal act or two-step structure' approach adopted in this paper is given by JH Dalhuisen (n 139 above) 405. Such approach provides a clearer and broader picture since such 'further legal agreement' may not necessarily be a 'separate written real agreement' (although he says this 'further legal agreement' is followed by delivery). In this paper, I do not consider the issue which (delivery or that further agreement) comes first as it is not of much importance.

163. JH Dalhuisen (n 139 above) 405.

164. JH Dalhuisen (n 139 above) 405-406. In the third case, there are two different techniques but with the same results: German law requires an assignment between the transferor and transferee, Dutch law requires a further acknowledgement from the holder (which is similar to an attornment under the SGA 1979 s 29(4)), see details in U Drobnig (n 140 above) 502-503.

165. The UCC s 2-401(2); see also W Tetley (n 154 above) 27; Dalhuisen (n 139 above) 404; the Vietnam Commercial Law 1997 Article 58.

166. It is very interesting to note that no author (as far as I know) has made an analysis of this 'borderline' law on the transfer of property (neither JH Dalhuisen n 139 above nor U Drobnig n 140 above). The probable reason is that in EU countries, there is no country with a similar 'borderline' law so Drobnig does not mention this. Dalhuisen does describe the case of the US law (p 404) but does not categorise it as 'borderline' law; and this is probably because his purpose is just to make a comparative study, and not to put forward a rule for unification. In this paper, I do analyse and categorise this law as 'borderline' law and will put it forward as a rule for unification under the CISG (see next discussion).

167. This is mainly based on Dalhuisen's analysis of four approaches (ie German, French, English and South Africa), Dalhuisen (n 139 above) 403-407. Drobnig does not make this sub-division.

168. JH Dalhuisen (n 139 above) 405.

169. See n 153 above where it is noted that in this sub-section 6(b), all chattels are supposed to be identifiable (ie specific or ascertained). For a very detailed account on transfer of property under English law, see AG Guest and others (eds) (n 149 above) chapter 5. The rules for passing of property are stated mainly in the SGA 1979 ss 16-18; especially s 17 states that for specific or ascertained goods, property passes when the parties intended it to pass.

170. Dalhuisen (n 139 above) 404; the French Civil Code, Articles 1138 and 1583. Dalhuisen rightly comments that Drobnig (n 140 above) does not make this distinction between the English and French approaches. The above distinction may be expressed in another way: under the English approach, the usual way in regulating the transfer of property is by agreement/consent of the parties and the law is an 'exception' while under French approach, the usual way is by law and the parties' agreement/consent is an 'exception'. See also FH Lawson 'The Passing of Property and Risk in Sale of Goods - A Comparative Study' (1949) 65 Law Quarterly Review 352, 352.

171. One should note that since the US/Vietnamese approach is a 'borderline' case, the comparison between the US/Vietnamese approach and the French in this respect of 'contractual freedom' may not be clear (the US/Vietnamese approach may be freer since the parties may decide both the manner and timing of the transfer in a more flexible way than the French approach). However, since the US/Vietnamese tends to favour the 'delivery' principle, I put it after the French approach.

172. Dalhuisen (n 139 above) 403-407 makes only four approaches (the English, French, German, and South Africa) and the author does not arrange these approaches under the 'decreasing freedom' perspective as above. My above arrangement and the fifth approach are just for clearer understanding and for proposing a rule for unification under the CISG.

173. Since the 'borderline' approach finally relies on the 'delivery' principle (which happens in most cases in the absence of the parties' agreement on property transfer), it is more appropriate to categorise it under the 'delivery' principle. Note also the second fallacy discussed below in item (i) sub-section 8(b).

174. RL Theriot (n 144 above) 1046-1049; U Drobnig (n 140 above) 503. Theriot criticised this 'consent' principle under the Louisiana old Civil Code which was later amended by adopting the 'delivery' principle.

175. 'In fact, property passes ex lege, not ex contractu; in this respect, the principle of consent is a misnomer' Drobnig (n 140 above) 501. Regarding the 'consent' principle under Louisiana old Civil Code, see RL Theriot (n 144 above) 1407-1409. Regarding the English law, see the SGA 1979 s 18; details on the appropriation of the unascertained and future goods, see AG Guest and others (eds) (n 149 above) [5-059]-[5-108]. The most common sales are for future goods and generic goods, and even if those are already in the warehouse of the seller but not yet specifically ascertained, appropriation is still necessary.

176. U Drobnig (n 140 above) 503-504.

177. Eg in the case of insolvency of either the seller or the buyer; or in the case of sale by the seller in possession or by the buyer in possession, delivery plays an important role in passing of property: U Drobnig (n 140 above) 498-500, 503-504; JH Dalhuisen (n 139 above) 406-407. See also sub-section 6(b) above and the next discussion.

178. The most influence of the 'consent' principle in this case means that it normally causes property to pass to the buyer prior to delivery (ei either at the conclusion of the contract or immediately after appropriation but still prior to delivery).

179. RL Theriot (n 144 above) 1046.

180. Under Louisiana old Civil Code, in this case the buyer even has no right of preference in the chattel if the seller becomes insolvent before delivery (although property has theoretically passed). See RL Theriot (n 144 above) 1054.

181. RL Theriot (n 144 above) 1053-1054. For a distinction between a personal right and a real right, see above sub-section 6(a).

182. U Drobnig (n 140 above) 500-501 describes the transfer of property in this case a 'two-step stages'.

183. The SGA 1979 s 52. One should note that under this s 52, specific performance is fully at the discretion of the court and is not as of right of the buyer.

184. The CISG Article 46. One should note that under the CISG, specific performance is regarded as of right of the buyer (in contrast with that under the SGA 1979). For further discussion on specific performance under the CISG (and comparison with that under the SGA 1979), see PA Piliounis (n 136 above); S Herman 'Specific Performance: A Comparative Analysis' (2003) 1 Edinburgh Law Review 5-26, (2003) 2 Edinburgh Law Review 194-271; AH Kastely 'The Right to Require Specific Performance in International Sale: Towards an International Interpretation of the Vienna Convention' (1988) 63 Washington Law Review 607-651; N Boghossian 'A Comparative Study of Specific Performance Provisions in the CISG' (1999-2000) Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer 3-78. All these articles can be found in the Pace Law School Database <http://www.cisg.law.pace.edu/> (23 Jun. 2004).

185. This 'rationale' point is discussed by RL Theriot (n 144 above) 1054-1055 where the author criticises the 'consent' principle under the Louisiana old Civil Code.

186. U Drobnig (n 140 above) 504.

187. The notion of seisin developed from the land law with Germanic origin which allowed private rights in land to develop based on its occupation and use. Later this notion of seisin also applied to chattels under which the law required a delivery of physical possession (seisin) for the transfer of property. For a very clear and detailed analysis of the origins and development of the rules concerning delivery as a formal requirement of title transfer in civil and common law, see JH Dalhuisen (n 139 above) 408-410. For the author's discussion of the notion of seisin, see the same work at 44, 352, 353, 359.

188. It is surprising to see that under English law, the notion of seisin still exists today, ie the delivery of physical possession is still normally required for passing of property. The transfer of property in goods is just one of the two exceptions only: JH Dalhuisen (n 139 above) 408.

189. See above discussion on this point in items (ii) and (iii) sub-section 6(b).

190. This is a very important point in gaining support from various countries to unify this rule under the CISG.

191. This is especially important in arriving at a solution under the CISG where some countries are negatively influenced by the idea that one legal system is superior to another: N Boghossian (n 184 above) 9.

192. The 'incompatibility' of remedies under the CISG is a clear example. Although the idea that specific performance should form the primary remedy under the CISG is welcomed and was in fact adopted, such objective has not practically been achieved due to the 'incompatibility of the remedies' (eg the problems created by the aggrieved party's duty to mitigate losses or if he 'has resorted to a remedy which is inconsistent with specific performance'). For a full discussion on this point, see P Schlechtriem Uniform Sales Law - The UN Convention on the International Sale of Goods (Manz Vienna 1986) 62-63, 76-76 and 84-86; Kastely (n 184 above), generally part I; Herman (n 184 above) esp. part II, F; N Boghossian (n 184 above) 73-76. All these works can be found in the Pace Law School Database <http://www.cisg.law.pace.edu/> (23 Jun. 2004).

193. The CISG Article 6. See also F Ferrari 'Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing' (1995) 15 Journal of Law and Commerce 1 <http://www.cisg.law.pace.edu/cisg/text/franco6.html> (29 July 2004); P Schlechtriem (n 192 above) 35-36.

194. Unless Article 6 is also amended (but that is very unlikely). This 'party autonomy' is the main principle applied throughout the CISG and has been welcomed by many academics, eg P Schlechtriem (n 192 above).

195. This is similar to Drobnig's proposal for the rule of unification on transfer of property under the European Civil Code: U Drobnig (n 140 above) 504 (but see n 197 below). Of course, this 'delivery' principle should be subject to three exceptions as discussed above in item (ii) sub-section 6(b) which are considered 'constructive delivery'.

196. The most common case nowadays is the transfer of an order B/L which is often regarded as transfer of property in the chattels. See generally JF Wilson Carriage of Goods by Sea (4th edn Pearson Longman 2001) 119-248, esp chapter 5, 119-175. Professor Tetley rightly comments that Article 2613 of the Louisiana new Civil Code 1995 has represented a useful modern regulation on this point: W Tetley (n 154 above) 31-32.

197. The distinction between these two options is similar to that distinction between the English and French approaches to the 'consent' principle discussed by Dalhuisen (see above item (iii) sub-section 6(b)); however, the author does not mention the above two options. Drobnig (n 140 above) does not mention the distinction between the English and French approaches above nor does he explicitly make the distinction between option (a) and option (b) above (although at 510 the author puts the phrase 'unless otherwise agreed').

198. See above reasons why the 'delivery' principle should be adopted in item (i) sub-section 6(c).

199. For a discussion on the explicit and implicit exclusion under Article 6, see F Ferrari (n 193 above). Professor Schlechtriem (n 192 above) 35-36 also comments:

The Convention does not mention the possibility of an "implied" exclusion, but this does not mean that a tacit exclusion is impossible. The intent of deleting the word "implied" was to prevent the courts from being too quick to impute exclusion of the Convention.

200. This is because if option (b) is chosen, the court has to interpret not only express but also implied agreement by the parties on the transfer of property; and only in the absence of such agreement, can the 'delivery' principle prevail. If option (a) is adopted, it is easier for the court to interpret only the express agreement of the parties. One should note also that this option (a) is still different from the mere 'delivery' principle (eg German law) since under the latter, the parties cannot change the compulsory delivery requirement while under the former they can (and that is why I put option (a) into the 'borderline' approach).

201. Ie no property can pass if the goods sold have not yet been sufficiently identified or set aside to the contract: JH Dalhuisen (n 139 above) 407.

202. JH Dalhuisen (n 139 above) 408 give the reasons as follows:

Where assets are not yet sufficiently identified, delivery is not possible, at least in a physical sense. Where there is constructive delivery, however, as for example in a traditio longa manu of assets in the custody of third parties, as a minimum, the physical setting aside will become necessary for the transfer of title.

(This is also the reason why the 'delivery' principle should be adopted).

203. The CISG Articles 67, 69. One should note that although I argue in this paper for the 'delivery' principle to apply to the transfer of property, it does not mean that my intention is to link the question of passing of property directly with the question of passing of risk (or vice versa). See above discussion on this point in item (iii) sub-section 4(b).

204. Other valid causes may be gift or barter, but in this paper's context, only a sales contract is relevant. One should note that even in Germany (abstract system), this valid contract (cause) is still required for any transfer of property in goods. However, the law only de-emphases the legal consequences of the invalidity of the sales contract once delivery takes place in which case the validity of the transfer of property is not affected: JH Dalhuisen (n 139 above) 412.

205. In other words, the former systems consider delivery of the goods as a further separate legal act while the latter systems consider it merely a physical act. Here, the recognition of delivery as a separate legal act is key to distinguishing the two types of systems: JH Dalhuisen (n 139 above) 410. See also above item (ii) sub-section 6(b).

206. This categorisation may be named as 'principle of unity' and 'principle of separation': U Drobnig (n 140 above) 496, 504-506.

207. This paper examines such 'invalidity' relationship in all legal systems no matter whether the validity of the contract is the same as or different from that of the transfer agreement. This approach may look ridiculous on the face but interesting results will come out on closer examination (see further discussion).

208. U Drobnig (n 140 above) 507; however, the author just examines this 'invalidity' relationship only under separation systems (ie Germany and the Netherlands). In my opinion, this view also holds true for unity systems where validity of the contract and that of the transfer agreement are the same (eg fraud may make both the transfer agreement and contract void). See also JH Dalhuisen (n 139 above) 410-411.

209. U Drobnig (n 140 above) 507-510. However, the author examines this relationship only under a separation system but in this paper I takes a fuller approach, also examining it under a unity system (under a unity system, the invalidity of the contract is considered here as invalidating the transfer agreement): See n 140 above.

210. If the seller cannot reclaim the goods but only have a personal retrieval right, the seller's position will be very similar to other unsecured creditors'. See further discussion below in section 9, esp n 239.

211. For a detailed discussion on this point, see JH Dalhuisen (n 139 above) 410-422. One should note that although Professor Dalhuisen brilliantly discusses the abstract and causal systems from a purely comparative perspective, he does not explicitly state his approach of classification. However, the above text is the key ideas that I have understood from his discussion (that is obviously different from Drobnig's approach).

212. JH Dalhuisen (n 139 above) 414 says: 'It shows indeed that the delivery perspective need not lead to an abstract system per se and the characterization of delivery as a separate legal act can co-exist with a causal system.'

213. The two most important cases related to the transfer of property is the title conflict and insolvency. The title conflict problem will be discussed in section 9 (disposition right). Here the problem is primarily and practically important normally just in the case of buyer's insolvency, ie can the unpaid seller reclaim the chattel (property) back or will he be put in equal position with other unsecured creditors? See also above discussion in items (i) and (ii) sub-section 4(c).

214. Thus, in both cases the seller only has a mere personal right (whether retrieval or damages) which is of little help in the buyer's bankruptcy. Thus, in this case Drobnig's approach makes almost no difference between an abstract system and a causal system. It is interesting to note that under Drobnig's approach Dutch law is causal and German is abstract. However, under Dalhuisen's approach, in the case of rescission of the contract for payment default, the German and new Dutch law are all abstract (giving the seller only a mere personal retrieval right): JH Dalhuisen (n 139 above) 413; U Drobnig (n 140 above) 507-509.

215. Since both approaches are different, a 'causal system' in Dalhuisen's term should be understood and interpreted differently from a 'causal system' in Drobnig's term (and this view holds true also for a term 'abstract system'). See further n 239 below.

216. The CISG Article 4(a): '...In particular, except as otherwise expressly provided in this Convention, it is not concerned with the validity of the contract or of any of its provisions or of any usage'. The phrase 'except as otherwise expressly provided in this Convention' indicates that such 'validity' exclusion is limited (see also n 217 below).

217. Eg in the case of the buyer's bankruptcy, can the seller have the revindication right to reclaim the goods already under control of the trustee? The CISG Articles 81-84 have partly dealt with this problem.

218. See above in sub-section 5(e) where I argue that the ultimate purpose of the CISG may only be achieved by amending not only Article 4(b) but also other relevant provisions in the CISG.

219. See above discussion in sub-section 8(a).

220. JH Dalhuisen (n 139 above) 412-422, esp 421, 413.

221. The point that 'the exceptions sometimes seem to eat up the rule' is expressed in PS Atiyah JN Adams and H Macqueen The Sale of Goods (10th edn Pearson Longman 2001) 314 where the learned authors discuss the exceptions to the nemo dat rule under English law.

222. Here I stress the physical receipt by the buyer of the goods since after this time, it is more difficult for the seller to reclaim the goods from the custody of the buyer or his trustee in bankruptcy.

223. The CISG Article 71, especially paragraph (2). One should note that this Article only gives the seller a right to prevent handing over of the goods to the buyer (even if the buyer has already got the document of title like a B/L) in the case it becomes apparent that the buyer will not perform a substantial part of his obligations as a result of either a serious deficiency in his ability to perform or creditworthiness (eg bankruptcy) or his conduct in preparing to perform or in performing the contract. In my view, in the case of invalidity of the sales contract, the seller may also relies on this Article to prevent the transfer of property to the buyer. Of course, one demerit of this Article (as well as the CISG in general) is that it only governs the relationship between the seller and the buyer, so it is questionable that the seller may be able to instruct the carrier not to hand over the goods to the buyer. For a detailed and clear comment on this Article 71, see the Secretary Commentary <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-71.html> (2 August 2004). Another remedy for the seller in this case is to rely on Article 25 (Fundamental Breach) and Article 72 so as to avoid the contract and prevent the transfer of property.

224. One should note that neither Dalhuisen (n 139 above) nor Drobnig (n 140 above) specifically discusses this case. This small-sized paper does not intend to discuss this issue in details since it will be very complicated. However, Article 81 of the CISG has partly dealt with this problem. According to the Secretary Commentary, in the case of the seller's insolvency, the buyer's claim of restitution of prepaid payment may be thwarted by domestic law, ie the buyer may not have a right of preference in this case (ex nunc). This is consistent with my proposed rule of abstract system discussed next (see also below the forth reason in this item (ii) sub-section 8(b) esp n 236). <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-81.html> (4 August 2004) para 10.

225. See next section 9 on the disposition right.

226. This is Dalhuisen's approach (n 139 above); but 'before buyer's physical receipt' situation is not discussed.

227. This is different from the conclusion reached by Drobnig (n 140 above) 510. However, one should note the two fallacies just discussed above in item (i) sub-section 8(b).

228. This finding is brilliantly made by Dalhuisen (n 139 above) 412-422, esp 416, 422. One should refer to this excellent text to find more details since such text is not only descriptive but very analytical. There is no need to repeat his analysis here (except some key points for this paper's purpose only).

229. Dalhuisen (n 139 above) 413-414 where the author comments that in England and the USA, 'there is largely an abstract approach even though never so analysed' (emphasis added). Under English law, where property has passed and the goods have been physically received by the buyer, the seller is usually only entitled to an action for price or damages (not a return of property): the SGA 1979 ss 49, 50. See further PS Atiyah JN Adams and H Macqueen (n 221 above) 481-500.

230. Dalhuisen (n 139 above) 415, 418-419.

231. 'The hesitancy concerning the causal system, although seemingly more natural, is understandable as it creates uncertainty in the title' JH Dalhuisen (n 139 above) 421, 416.

232. Of course third parties dealings are more related to the disposition right (rather than causal or abstract system) which will be dealt with later.

233. Dalhuisen (n 139 above) 421, 417. The author also explains the origin of the abstract system from the jus commune under which a valid transfer of property requires (a) delivery, pursuant to (b) a valid title and assuming (c) property disposition rights of the owner. In addition, when a chattel is delivered it was normally and practically assumed that the parties have already had sufficient intent to transfer it (otherwise no need to do it at all).

234. The well-known principle of separation between the L/C and the sales contract is regulated under Article 3 of the Uniform Customs and Practices for Documentary Credits 1993 (UCP 500) which many legal systems follow. For detailed discussion on this point, see LS Sealy and RJA Hooley Commercial Law: Text, Cases and Materials (3rd ed LexisNexis UK 2003) chapter 21, esp 840. JH Dalhuisen (n 139 above) 422 comments on the abstract principle as follows:

It seems that the principle of abstraction appears everywhere where the ordinary course of business needs protection against the consequences of complications which have their origin in underlying relationship or their failure.

235. The CISG Articles 4(a), 81, 82, 83, 84.

236. Secretary Commentary para 10 <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-81.html> (2 August 2004) where it says 'If either party is in bankruptcy or other insolvency procedures, it is possible that the claim of restitution will not be recognized as creating a right in the property or as giving a priority in the distribution of the assets.'. See also above discussion regarding the buyer's claim to restitution of prepaid payment in the case of the seller's bankruptcy second paragraph item (ii) sub-section 8(b), esp n 224.

237. The CISG Article 6.

238. This paper just proposes some general principle rules for unification under the CISG and it cannot elaborate these exceptions in details (which would require a lot of academic work). For some common exceptions to the abstract principle, see JH Dalhuisen (n 139 above) 412-422.

239. Here one should distinguish between capacity and the disposition right. The latter means 'the right to be able to transfer ownership of an asset or any proprietary right in it'. Only owner or someone authorised by him (but not others) may do so. Professor Dalhuisen brilliantly makes such distinction between the two concepts regarding a bona fide buyer (emphasis added):

Lack of capacity or of a valid agreement for other reasons earlier in the chain of transfers would, however, result in the lack of disposition right in the seller, which would then not, in the case of chattels, affect the bona fide buyer. Only lack of capacity or of a valid agreement with the counter-party would prevent a valid transfer to a bona fide purchaser (except in France).

It is interesting to note that U Drobnig (n 140 above) does not make this distinction. Probably this has led him to conclude that the general idea inspiring all rules under the abstract system is 'the desire to protect third persons from the impact of possible defects existing in an underlying primary relationship'. In other words, Drobnig considers the key point underlying the abstract system is the disposition right (thus he criticises the abstract system and supports the 'good faith' rule) (p 508-509). However, under Dalhuisen's approach, the key point underlying the abstract system is the revindication right. In my opinion, this is why each Professor makes a different approach to classifying the abstract and causal system (see section 8 above, esp sub-section a).

240. This is one of the most common cases where the transfer of property becomes most serious (item (i) sub-section 4(c) above).

241. Of course here the seller is at fault, but in practice the personal right against the seller often proves to be of little importance (since he may run away or become insolvent). Thus, the real question is who (old owner or new owner) should the law protect? The phrase 'old owner' and 'new owner' are used just for convenience since the question 'who is the owner' is still being discussed and not yet answered. See JH Dalhuisen (n 139 above) 422-429; PS Atiyah JN Adams and H Macqueen (n 221 above) 368-414. For a discussion on the absolute ownership under civil law and relative ownership under common law, see last paragraph of section 1, and item (ii) sub-section 4(a) above.

242. JH Dalhuisen (n 139 above) 422; of course the variations have made some legal systems move further from or closer to that nemo dat rule to some extent. For English law, see the SGA 1979 s 21(1); Bishopsgate Motor Finance Corpn v Transport Brakes Ltd [1949] 1 KB 332, 336-7 (Lord Denning); Atiyah JN Adams and H Macqueen (n 221 above) 368-369. For Vietnamese law, see Civil Code Articles 173, 175, 176, 180.

243. JH Dalhuisen (n 139 above) 422-423. For English law, see the SGA 1979 ss 24, 25.

244. See the first and second reason in item (ii) sub-section 8(b) above where these are also the reasons for adopting the 'abstract system' rule.

245. The 'good faith' principle is expressly stated in Article 7(1). Also, under the CSIG Article 71(2) where the seller has already dispatched the goods but if the buyer defaults or becomes unable to perform his obligations, the seller has a right to prevent handing over of the goods to the buyer (even if the buyer has the B/L). However, the Article specifically states to apply only to the rights in the goods as between the seller and the buyer. This suggests that if the buyer has already sold the goods (eg transferred the B/L to another bona fide purchaser), this second purchaser may have good title to the goods. This is also in accordance with the Secretary Commentary para 11 'The seller loses his right to order the carrier not to hand over the goods if the buyer has transferred the document of title to a third party who has taken it for value and in good faith' <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-71.html> (2 August 2004).

246. JH Dalhuisen (n 139 above) 423.

247. The objective test or 'reasonable person' test is repeated in many Articles in the CSIG, eg Articles 8, 9, 25.

248. For globalization issue, see O'Sullivan 'The Political Economy of Comparative Corporate Governance' (2003) 10(1) Review of International Political Economy 23, esp 23-31; S Nestor and J Thompson 'Corporate Governance Patterns in OECD Economies: Is Convergence Under Way?' <http://www.oecd.org/document/54/0,2340,en_2649_37439_1868470_1_1_1_37439,00.html> (6 Apr 2004). For a highly critical account on globalization issues, see Hertz The Silent Takeover: Global Capitalism and the Death of Democracy (Arrow 2002).

249. R Brownsword and G Howells 'When Surfers Start to Shop: Internet Commerce and Contract Law' (1999) 19(3) Legal Studies 287, esp 292-295.

250. See section 2 above regarding the 'trade facilitating' function (which is also represented by the 'party autonomy' principle throughout the CISG). For a good comment on the CISG as a modern law, see PA Piliounis 'The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are These Worthwhile Changes or Additions to English Sales Law?' (2000) Pace International Law Review 1 <http://www.cisg.law.pace.edu/cisg/biblio/piliounis.html#N_144_> (3 August 2004).

251. Numerous articles on 'advantages' and 'disadvantages' can be found in the Pace Law School Database <http://www.cisg.law.pace.edu/> (23 June 2004). E.g. RA Hillman 'Applying the United Nations Convention on Contracts for the International Sale of Goods: The Elusive Goal of Uniformity' (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 21-49.

252. The CISG Article 6.

253. Of course, inherent disadvantages of the CISG may be another problem.

254. One should note that in E Visser 'Favour Emptoris: Does the CISG Favour the Buyer?' (1998) University of Missouri, Kansas City Law Review 91-92<http://www.cisg.law.pace.edu/cisg/biblio/Visser1.html#b*> (24 Jun. 2004), the author just proposes two solutions: ie the total exclusion of the CISG and nations' efforts to unify the rule on the transfer of property. In this paper, I just add another solution above, ie no exclusion of the CISG but the parties specifically and expressly agree on the regulation of the property question. This way may be more natural and practical despite its demerits given above.

255. Of course these are general rules or principles for guidance only. Detailed investigation into these rules must be required in order to make specific regulations.

256. This rule is in general different from the conclusion by U Drobnig 'Transfer of Property' in A Hartkamp and others (eds) Towards a European Civil Code (2nd edn Nijmegen: Ars Aequi Libri 1998) 510. Of course one should note two fallacies discussed in item (i) sub-section 8(b). Before the transferee has physically received the goods, the question of the relationship between the validity of the transfer agreement and of the sales contract has proved to be of very little importance under the CISG's context. However, if such regulation is still necessary, the above rule (abstract principle) can still be appropriate (ie in the case of the seller's bankruptcy where the buyer has paid but not yet received the goods). See above item (ii) sub-section 8(b).

257. Ie in the case of a sale to a bona fide third party by the seller in possession or by the buyer in possession.

258. See above sub-section 5(e).

259. This pessimistic view is expressed by JS Hobhouse 'International Conventions and Commercial Law: The Pursuit of Uniformity' (1990) 106 Law Quarterly Review 530, 534-5. PA Piliounis (n 250 above) has also shown a similar view as mine in this paper.

260. The UCP has been adopted by bankers and traders throughout the world and it has been described as 'the most successful harmonizing measure in the history of international commerce' RM Goode [1992] LMCLQ as quoted in LS Sealy and RJA Hooley Commercial Law: Text, Cases and Materials (3rd ed LexisNexis UK 2003) 822.


Pace Law School Institute of International Commercial Law - Last updated October 7, 2008
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