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LEGISLATIVE HISTORY
1980 Vienna Diplomatic Conference

Summary Records of Meetings of the First Committee

30th meeting

Monday, 31 March 1980, at 3 p.m.

Chairman: Mr. LOEWE (Austria)

The meeting was called to order at 3.05 p.m.

CONSIDERATION OF ARTICLES 1-82 OF THE DRAFT CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS AND OF DRAFT ARTICLE "DECLARATIONS RELATING TO CONTRACTS IN WRITING" IN THE DRAFT PROVISIONS PREPARED BY THE SECRETARY-GENERAL CONCERNING IMPLEMENTATION, DECLARATIONS, RESERVATIONS AND OTHER FINAL CLAUSES FOR THE DRAFT CONVENTION (agenda item 3) (A/CONF.97/5, 6) (continued)

80
New article 65 bis [became CISG article 80 ] (continued)
(A/CONF.97/C.1/L.217, L.234)

1. The CHAIRMAN invited members of the Committee to consider the revised text submitted by the German Democratic Republic for a new article 65 bis or 23 bis [became CISG article 80 ] (A/CONF.97/C.1/L.234).

2. Mr. MASKOW (German Democratic Republic) explained that the new article submitted earlier (A/CONF.97/C.1/L.217) had been reworded in more restrictive terms so as to stress the factual relationship of the parties' obligations rather than their rights and to take account of the comments made during consideration of the first draft. He thought it would be best for the new article to be inserted after article 65 [became CISG article 79 ], i.e., in the section on exemptions. However, that was a matter which could be dealt with by the Drafting Committee.

3. Mr. SCHLECHTRIEM (Federal Republic of Germany) asked whether it would not be possible to replace the expression "in so far as" by "to the extent that".

4. Mr. VINDING KRUSE (Denmark) asked whether the wording of the article would have to be amended if it were to be inserted after article 23 [became CISG article 25 ].

5. Mr. MASKOW (German Democratic Republic), replying to the previous two speakers, said that he could agree to the subamendment proposed by the representative of the Federal Republic of Germany and that he did not think it would be necessary to change the wording of the article if it were to be inserted after article 23 [became CISG article 25 ]. The main thing was that the provision should form a separate article.

6. Mr. ROGNLIEN (Norway) asked whether the proposal by the German Democratic Republic presupposed that the other party was at fault and whether it was to apply where the act or omission was not one of negligence. What happened if both parties had been at fault, if both parties had contributed to the failure to perform, but one party to a lesser extent than the other? Perhaps the text should be further elaborated to cover all the different situations likely to arise.

7. Mr. MASKOW (German Democratic Republic) explained that the exemption applied whether the other party had been at fault or not. For example, if machinery was delivered that conformed to sketches submitted with the order, then the seller was exempted if the sketches turned out to be inaccurate. If the buyer of the machinery claimed damages, the court would determine whether the other party could or could not avail himself of the provisions on exemption. On the other hand, the expression "in so far as" was sufficiently elastic to allow the court to determine each party's share of the responsibility.

8. Mr. KRISPIS (Greece) was of the opinion that the new article should be incorporated in the Convention, if only to clarify the rest of the text.

9. The CHAIRMAN put to the vote the new article proposed by the German Democratic Republic (A/CONF.97/C.1/L.234), on the understanding that if it was adopted the Drafting Committee would decide where it was to be inserted.

10. The new article proposed by the German Democratic Republic was adopted and referred to the Drafting Committee.

Drafting proposals concerning section IV and section II of chapter IV (A/CONF.97/C.1/L.230)

11. The CHAIRMAN drew the attention of members to the drafting proposals submitted by Norway (A/CONF.97/C.1/L.230).

12. Mr. ROGNLIEN (Norway) explained that in his opinion section IV -- Damages (articles 70-73) [became CISG article 74 , CISG article 75 and CISG article 76 ] -- and section II -- Exemptions (article 65) [became CISG article 79 ] of chapter IV should be combined to form a separate chapter which would be inserted between the existing chapters III and IV. The provisions on damages were important enough to have a place of their own in the Convention, before the existing chapter IV on provisions common to the obligations of the seller and of the buyer.

13. Mr. ZIEGEL (Canada) considered that the Drafting Committee was in the best position to reorganize chapter IV as a whole.

14. Mr. HERBER (Federal Republic of Germany) was afraid that to combine the provisions on damages with those on exemptions would make for some confusion, since article 65 [became CISG article 79 ] did not apply only to damages.

15. Mr. ROGNLIEN (Norway) thought that the articles on damages and article 65 [became CISG article 79 ] could be brought closer together without necessarily being placed in the same chapter.

16. Mr. VINDING KRUSE (Denmark) felt it should be left to the Drafting Committee to consider the Norwegian proposals.

17. The CHAIRMAN said that if there was no objection, he would take it that the Committee wished to refer the Norwegian proposals (A/CONF.97/C.1/L.230) to the Drafting Committee.

18. It was so decided.

74
Article 70 [became CISG article 74 ]

19. The CHAIRMAN invited members to consider the amendment by Pakistan (A/CONF.97/C.1/L.235).

20. Mr. DATE-BAH (Ghana) took it that the intention of the Pakistan delegation was to provide a more objective wording, so as to make sure that damages for loss of profit could not be claimed automatically when, for example, the party in breach could not reasonably have foreseen the risks of loss.

21. Mr. KRISPIS (Greece) could not support the amendment because it contained a mixture of objective and subjective criteria. The criterion applied in the existing text was objective enough since the damages could not exceed the loss which the party in breach had foreseen or ought to have foreseen. Moreover, the word "reasonable" had already appeared too often in the Convention.

22. The CHAIRMAN noted that there was not much support for the amendment by Pakistan (A/CONF.97/C.1/L.235). If there was no objection, he would consider that the Committee rejected it.

23. It was so decided.

75
Article 71 [became CISG article 75 ]
(A/CONF.97/C.1/L.193)

24. Mr. ROGNLIEN (Norway) explained that his proposal was a drafting amendment designed to simplify the existing text and suggested that it should be referred to the Drafting Committee.

25. The CHAIRMAN said that if there was no objection he would consider that the Committee wanted to refer the amendment to the Drafting Committee, drawing its attention to the apparent differences between the French and English wording.

76
Article 72 [became CISG article 76 ]
(A/CONF.97/C.1/L.194)

26. The CHAIRMAN invited members to consider the Norwegian amendment (A/CONF.97/C.1/L.194) to paragraphs 1 and 2 of article 72 [became CISG article 76 ]. As the amendment to paragraph 2 was solely a matter of drafting, he suggested it should be referred to the Drafting Committee.

27. It was so decided.

28. Mr. ROGNLIEN (Norway) said that article 72(1) [became CISG article 76(1) ] made provision, in the event of avoidance without any substitute transaction, for the party claiming damages to recover the difference between the price fixed by the contract and the current price at the time he had first had the right to declare the contract avoided. However, the Norwegian delegation considered that it would in practice be very difficult to determine when that was and that it would therefore be best to take either the time of delivery, or the time of avoidance, whichever came first.

29. The UNCITRAL Working Group had initially considered making the relevant time the time of avoidance, and later the time of delivery, but it had then been pointed out that the latter time might not be suitable for a case of anticipatory breach taking place before delivery.

30. The CHAIRMAN reminded the Committee of the point made by some delegations that to adopt the time of avoidance might encourage one of the parties to speculate on a favourable movement in the current price. The UNCITRAL Working Group had then considered whether the time of delivery should not be used, but it had turned out that in cases of anticipatory breach that would be too late. It was thus that the present solution had been arrived at, whereby the reference date for determining the current price was the one when the contract could first have been declared avoided.

31. Mr. ROGNLIEN (Norway) observed that in cases of anticipatory breach it would be difficult to fix the precise date on which a party had first had the right to declare the contract avoided, particularly since the definition of what was meant by an anticipatory breach of contract was not without its problems. The criterion used in article 72 [became CISG article 76 ] was too vague. That was why his delegation proposed that the relevant time should be the time of delivery or, in cases of anticipatory breach, the time of avoidance, whichever of the two came first. It was a simple criterion, easy to apply and reasonable. It also reduced to a minimum the possibility to speculate on price developments.

32. Mr. ADAL (Turkey) supported the Norwegian amendment (A/CONF.97/C.1/L.194), which applied the same principle as the Turkish Civil Code.

33. Mr. ZIEGEL (Canada) agreed with the ideas underlying the Norwegian proposal but had some reservations about its wording. Though he understood the reasons that had led the UNCITRAL Working Group to adopt the solution in the existing paragraph 1, he nevertheless thought, like the Norwegian representative, that the criterion of the time when the contract could first have been declared avoided was too difficult to apply. Many situations could be imagined where application of that criterion would run into practical difficulties, such as the case of faulty goods whose defects did not appear until after the time when the contract might first have been declared avoided. It would therefore be best to take as the relevant date the time of avoidance of the contract, even though it might admittedly encourage an innocent party to indulge in speculation. On the other hand, unlike the Norwegian representative, he did not think it a good idea to make the reference date for determining the current price the time of delivery, because that would also be difficult to apply. As the aim of article 72 [became CISG article 76 ] was to propose a formula for assessing damages, it would be best to use the current price at the time of avoidance of contract. He therefore proposed that, at the end of the first sentence of article 72(1) [became CISG article 76(1) ], the words "at the time he first had the right to declare the contract avoided" should be replaced by the words "at the time of avoidance".

34. Mr. BENNETT (Australia) said that on the whole he was in favour of the Norwegian proposal since the rule given in article 72(1) [became CISG article 76(1) ] was difficult to apply. With regard to the oral amendment proposed by the Canadian representative, he thought it would be best to speak of the actual date of avoidance of the contract and that, given the risk of speculation by the innocent party, there was something to be said for not letting the period become too elastic. Hence he was not against adopting the time of delivery as reference date if it came first. The idea of a reasonable time was already established in the Convention, in particular in article 45(2) [became CISG article 49(2) ], in connection with the buyer's right to avoid the contract in the event of fundamental breach. A third date might be considered, which likewise had the advantage of not letting the period become too elastic, namely, the date of payment of the price if it occurred before the delivery of goods or avoidance of contract.

35. Mr. HJERNER (Sweden) understood the desire for clarity which had prompted the Norwegian proposal but was afraid it might have unacceptable results. In his delegation's opinion, the reference date for fixing the current price should be that of avoidance of the contract, as in the first draft of the Convention. It was important that a party which had carried out a contract should not be forced to abandon a favourable position when it was the other party which was in breach; yet that was what might happen if any alternative to the time of avoidance were adopted. It would be contrary to the principle of good faith as well as to that of "pacta sunt servanda", and he was therefore in favour of the oral amendment by Canada.

36. Mr. MANTILLA-MOLINA (Mexico) supported the Norwegian and Canadian proposals.

37. The CHAIRMAN noted that the Committee now had before it an amendment by Norway and a subamendment by Canada, which he felt was further away from the existing wording of paragraph 1.

38. Mr. ROGNLIEN (Norway) said that he had not been convinced by the arguments put forward by the Canadian representative against the date of delivery. If the relevant date for fixing the current price was to be solely the time of avoidance, it would give the innocent party an opportunity to speculate on the price; that would no longer be true if the point of reference were to be the time of delivery or the time of avoidance, whichever came first. In his opinion, the Canadian proposal amounted to a separate amendment and not a subamendment to his own.

39. Mr. NICHOLAS (United Kingdom) stressed that the Norwegian proposal had the advantage of preventing one party from speculating on price movements.

40. Mr. ZIEGEL (Canada) said that the date adopted in the existing paragraph 1 for fixing the current price, i.e., the time when the innocent party had first had the right to declare the contract avoided, raised objections both of a practical nature, as already pointed out by several speakers, and of a theoretical nature, because the innocent party was very often not in a position to declare the contract avoided.

41. He thought the risk of speculation should not be overestimated, particularly when, as nowadays, markets were liable to sharp fluctuations. Finally, he considered that his proposal was not radically different from the Norwegian one.

42. The CHAIRMAN agreed that the Canadian proposal was along the same lines as the Norwegian one, since both called in question the formula used in the existing paragraph 1 for fixing the current price. For his own part, he was opposed to any amendment to paragraph 1 and considered that to leave it open to one of the parties to declare avoidance of contract or not was bound to encourage him to engage in speculation. For that reason he had, throughout the work of UNCITRAL, always recommended the existing solution.

43. He put to the vote the Canadian oral amendment that the reference date for determining the current price should be solely the time of avoidance of the contract.

44. The amendment was rejected by 17 votes to 13.

45. Mr. BENNETT (Australia) reminded the Committee that he had submitted an oral amendment to the effect that a third possibility should be taken into account for determining the current price, namely, the date of payment of the price.

46. The CHAIRMAN put the Australian amendment to the vote.

47. The amendment was rejected.

48. Mr. SCHLECHTRIEM (Federal Republic of Germany) said he was opposed to the Norwegian amendment, for similar reasons as the Chairman. In the case of anticipatory breach, a party could still, if the Norwegian proposal were adopted, wait to see how the market moved, that is he could speculate and avoid the contract on a date most favourable to him.

49. Mr. ROGNLIEN (Norway) considered that the risk of speculation was in fact very limited and that it arose only if the contract was avoided after delivery. If it was avoided before delivery, the reference date for determining the current price should be that on which the contract had been avoided. In reply to a question by Mr. HJERNER (Sweden), he explained that the date of delivery meant the date of actual delivery, not the date fixed in the contract.

50. Mr. ZIEGEL (Canada) observed that under the terms of article 73 [became CISG article 77 ] the innocent party was required to take measures to mitigate his loss. That obligation also applied to the situation referred to in article 72 [became CISG article 76 ].

51. Mr. FOKKEMA (Netherlands) asked how the Norwegian formula would apply when the contract was declared avoided because of failure to deliver the goods.

52. Mr. ROGNLIEN (Norway) said that if delivery had not been made, the reference date for determining the current price would have to be the date of avoidance of the contract.

53. The CHAIRMAN put the Norwegian proposal (A/CONF.97/C.1/L.194) to the vote.

54. The proposal was rejected by 21 votes to 12.

77
Article 73 [became CISG article 77 ]

55. Mr. HONNOLD (United States of America), introducing his delegation's amendment to article 73 [became CISG article 77 ] (A/CONF.97/C.1/L.228), said that the principle stated in article 73 [became CISG article 77 ], whereby the party who relied on a breach of contract was required to take such measures as were reasonable in the circumstances to mitigate the loss, was an important general principle. However, article 73 [became CISG article 77 ] was not very clear as it stood, for it might lead to the conclusion that if the injured party failed to take such measures, the party in breach could only claim a reduction in the damages and could not rely on such failure in connection with the other remedies open to him, for example, the right to reduce the price. That restrictive conception of the obligation to mitigate the loss might have very questionable results. For example, a buyer might realize, shortly after placing an order, that he would be unable to use the goods; he therefore proposed to the seller that he should pay him damages and asked him not to go ahead with the order; but the seller ignored his request and used materials and labour in producing the goods. If the seller then resold the goods and subsequently claimed damages from the buyer, the principle in article 73 [became CISG article 77 ] according to which the seller was required in such cases to take measures to mitigate his loss would naturally apply. On the other hand, if the seller claimed the price of the goods from the buyer, under a strict interpretation of the existing article 73 [became CISG article 77 ] that principle would not operate and the seller would be able to claim the full price. His delegation's amendment was therefore intended to prevent such a narrow and mistaken interpretation of the principle of mitigation of loss.

56. Mr. NICHOLAS (United Kingdom) endorsed the arguments put forward by the United States representative. In its present form, the provision might in fact be used by an unscrupulous party to get out of his obligations. It should therefore be amended.

57. The CHAIRMAN questioned whether article 73 [became CISG article 77 ], if amended in the way proposed by the United States representative, would still be in the right place in section IV, which dealt with damages.

58. Mr. HONNOLD (United States of America) thought that, rather than moving the amended article 73 [became CISG article 77 ] elsewhere, it would be better to broaden the scope of section IV on damages, for example by entitling it "Damages and reduction of damages".

59. Mr. KRISPIS (Greece) supported the United States amendment, which filled a gap in the Convention. He wondered whether the words "which should have been mitigated" in the second and third lines of the amendment ought not to be replaced by the words "which could have been mitigated".

60. Mr. HERBER (Federal Republic of Germany) considered that the United States proposal was useful in theory, but liable to make for confusion. The considerations set forth in respect of damages were presumably equally valid for a reduction in the price, but in using the expression "any other remedy", the United States proposal was possibly seeking to cover a far wider field, including, for example, the right to declare the contract avoided. It was hard to see how there could be an adjustment in that case. It was conceivable that, in the absence of measures to mitigate the loss, the right to declare the contract avoided might be abrogated, but such situations did not come under article 73 [became CISG article 77 ]. He asked the United States representative if it would not suffice to refer in the amendment to the right to a reduction in the price. He was unable, moreover, to support the Greek representative's suggestion.

61. Mr. ALKIN (Ireland) asked the United States representative whether he did not think that the first sentence of the existing text provided a satisfactory answer to the point raised by him. The proposed addition to the second sentence would merely seem to indicate a series of possibilities of action.

62. Mr. HONNOLD (United States of America) thought it would not be enough to mention the right to a reduction in the price, as suggested by the representative of the Federal Republic of Germany. That was a limited remedy applicable only in particular situations. The question of whether and how the principle of the mitigation of loss would apply in the event of avoidance of the contract was of purely theoretical interest.

63. Matters would be simpler if he could in fact consider, as the Irish representative had suggested, that the first sentence of the text proclaimed a principle generally applicable to the various remedies provided for in the Convention. But he doubted whether the second sentence would be interpreted as furnishing the means for implementing that principle. Every care must be taken to avoid a narrow interpretation and to ensure that the principle of the mitigation of loss through reasonable measures had as broad a scope as possible.

The meeting was suspended at 4:30 p.m. and resumed at 4:50 p.m.

64. Mr. ZIEGEL (Canada) said that the wording of article 73 [became CISG article 77 ] and the relationship between that article and the provisions of the Convention dealing with specific performance created difficulties for him. Article 73 [became CISG article 77 ] only applied to cases where a party relied on a breach of contract; in those cases, and in those cases only, the party concerned was required to take measures to mitigate the loss. However, if the seller or the buyer wished to require performance of the contract, he did not rely on a breach, and the situation was reversed.

65. According to the reasoning of the United States representative, if an innocent party was obliged to accept the repudiation of an obligation, it was not entitled to require specific performance. That point of view might, perhaps, be in line with the practice in common law countries, but it was not in line with the principles underlying the Convention, according to which the buyer and the seller had an absolute right to require specific performance so long as they had not had recourse to inconsistent remedies. In the case cited by the United States representative, the seller had not had recourse to such remedies; he simply wished to exercise his right to performance of the contract, which no provision in the Convention denied him. The United States amendment was liable to create difficult problems in connection with specific performance. If, on the other hand, it did not affect specific performance, it was difficult to see what it added to article 73 [became CISG article 77 ].

66. Mr. HJERNER (Sweden) said that, while he understood the reasons for the United States proposal, he could not accept it. He shared the viewpoint of the Canadian representative. The United States proposal would limit the seller's right to require performance and would give the buyer a unilateral right to avoid the contract.

67. Mr. MANTILLA-MOLINA (Mexico) said he was against the United States proposal, which he thought ill-advised. Its wording was somewhat vague and the substance unacceptable. The idea it introduced should be the subject of a separate article relating to the price and cases in which there was a reduction in the price. That question differed fundamentally from the one dealt with in article 73 [became CISG article 77 ], which was concerned solely with a reduction in the damages. In the case cited by the United States representative, the fact that the buyer changed his mind did not constitute avoidance of the contract and the seller was entitled to proceed with manufacture since nothing had released him from his obligations. It was reasonable that the seller should seek to recover the price, and it would be unreasonable if, as proposed by the United States, the price could be reduced. He did not see why there should be such a reduction, since the seller had not committed any wrong, or how it would be determined.

68. Mr. BOGGIANO (Argentina) said that he was unable to support the United States proposal. According to the present wording of article 73 [became CISG article 77 ], it was the party relying on a breach of contract who must take measures. The scope of the article was limited to that party. Article 73 [became CISG article 77 ] applied solely to the amount of the reduction in the damages. But the United States proposal referred to "any other remedy"; such remedies might include various declarations or measures which were quite unforeseeable. That was where the difficulty lay, for it was impossible for the Committee to take a decision on such a vague and imprecise proposal which provided for measures that were not quantifiable.

69. Mrs. KAMARUL (Australia) said she supported the United States proposal, which she considered balanced and justified. The existing text of article 73 [became CISG article 77 ] needed to be clarified.

70. Mr. HONNOLD (United States of America) said that, despite the misgivings voiced by some representatives, his country's amendment would not amount to a general restriction of the right to require specific performance or recover the price. It must be remembered that the scope of article 73 [became CISG article 77 ] was extremely limited. Nor would it limit full protection for the innocent party. When that article applied, the party in breach was entitled to the full amount of damages, including the amount corresponding to the loss of profit, and when it did not apply, the party would be entitled to take steps to secure specific performance or payment of the price. In some civil law countries, cases involving wastage of labour and materials would be covered by the rules on good faith. The Convention did not contain any general provision on that subject, and the amendment, by providing that appropriate action must be taken to mitigate the loss and avoid wastage, would give expression to that concept of good faith.

71. Mr. FOKKEMA (Netherlands) said that he fully understood the thinking of the United States delegation. He, too, considered that something must be done, but the means selected did not seem to him to be the best. The case presented by the United States was not characteristic of the contracts covered by the Convention, but came within its purview through article 3 [became CISG article 3 ], which stated that contracts for the supply of goods to be manufactured or produced were to be considered sales. In countries which applied the French civil code, the customer was free to terminate the work provided he paid the other party what was due to him under the contract. His country would be willing to agree to a new provision being inserted in the Convention to the effect that the buyer had the right to avoid the contract provided he paid the costs. But the United States proposal was based on a different idea and confused various principles. If article 73 [became CISG article 77 ] was to be applied, it would be necessary to determine first, at what time there was non-performance. The situation would differ, depending on whether non-performance was considered to have arisen after the decisive moment when the buyer had declared that he would not take delivery of the goods or whether the buyer was not entitled to declare that he did not wish the work to continue; non-performance then assumed a different aspect. The solution proposed was not satisfactory, and another should be found.

72. Mr. VINDING KRUSE (Denmark) freely acknowledged that cases arose in which there was a loss in respect of labour, raw materials or transport, but it was very difficult to deduce from the formula proposed by the United States delegation that those were the cases envisaged. The Netherlands representative's suggestion did not seem to provide a very satisfactory solution either.

73. Mr. SCHLECHTRIEM (Federal Republic of Germany) thought the United States proposal justified in so far as it related solely to a reduction in price. Beyond that however the wording was too general and hence dangerous, for the courts would have every latitude to interpret and modify the terms of the contract.

74. Mr. HONNOLD (United States of America) asked whether it would be possible to set up a small working group of those members of the Committee who supported the idea behind his proposal in order to arrive at a more acceptable formulation.

75. The CHAIRMAN thought that the Committee should first vote on the idea behind the proposal.

76. Mr. KRISPIS (Greece) said that he would abstain. Although he had been ready to accept the United States proposal at first, after the discussion he was no longer sure that it did not entail some risks, such as those pointed out by the representative of the Federal Republic of Germany.

77. The CHAIRMAN explained that the idea of the United States proposal was to extend the application of the rule set forth in the second sentence of article 73 [became CISG article 77 ] to cases involving not only damages, but also some other consequences of the breach of contract, such as losses in respect of raw materials, labour, transport, etc. He invited the Committee to vote purely on the principle behind the United States proposal (A/CONF.97/C.1/L.228).

78. The principle behind the United States proposal was rejected by 24 votes to 8.

85
Article 74 [became CISG article 85 ] (A/CONF.97/C.1/L.211)

79. Mr. KLINGSPORN (Federal Republic of Germany) said that article 74 [became CISG article 85 ] dealt with the seller's obligation to preserve the goods if the buyer was slow in taking delivery. The existing text assumed that the seller was ready to deliver the goods. The seller might however be inclined to keep them if the delivery of goods and the payment of the price were concurrent conditions and if the buyer failed to pay the price. That case was given as an example in the commentary on article 74 [became CISG article 85 ] (A/CONF.97/5, p.193). His delegation accordingly proposed (A/CONF.97/C.1/L.211) that article 74 [became CISG article 85 ] should be explicity broadened to cover cases in which the payment of the price and the delivery of the goods were to be effected simultaneously and where the buyer was slow in paying.

80. Mr. PLANTARD (France) considered that the proposed change was unnecessary as the existing text, "if the buyer is in delay in taking delivery of the goods . . . ", did not specify the reasons for the delay and could cover the case envisaged in the amendment, namely, that the buyer delayed payment.

81. Mr. KRISPIS (Greece) agreed.

82. Mr. SEVÓN (Finland), supported by Mr. VINDING KRUSE (Denmark), Mr. FOKKEMA (Netherlands) and Mr. ROGNLIEN (Norway), supported the proposal by the Federal Republic of Germany. It was not certain that article 74 [became CISG article 85 ] in fact covered the case in which the buyer was slow in paying, since it might happen that the buyer wished to take delivery without paying. It would therefore be useful to clarify article 74 [became CISG article 85 ] in the manner suggested by the Federal Republic of Germany.

83. The proposal (A/CONF.97/C.1/L.211) was adopted by 19 votes to 5.

84. Mr. LEBEDEV (Union of Soviet Socialist Republics) remarked that the text of the amendment just adopted was not completely clear. It was hard to see how one of the parties could be in delay in performing his obligation when the two parties had to discharge their obligations simultaneously.

86
Article 75 [became CISG article 86 ] (A/CONF.97/C.1/L.178, L.227)

85. Mr. WANG Tian ming (China), introducing his delegation's amendment (A/CONF.97/C.1/L.178), said that while article 75 [became CISG article 86 ] dealt mainly with the question of the buyer's preserving the goods, it also dealt with the question of his rejecting them. The buyer could reject goods, which implied that he could reject them at his discretion. His delegation accordingly proposed that article 75 [became CISG article 86 ] should be amended to make it clear that the buyer could reject goods only on the grounds of lack of conformity and that, if he intended to reject the goods, he must also inform the seller of his intention and provide the relevant documents including the inspection certificate issued by an inspection firm. The text of the amendment should be completed by the insertion of the words "without undue delay" after the words "informing the seller".

86. The CHAIRMAN suggested that the Chinese delegation's amendment was based on a misunderstanding since article 75 [became CISG article 86 ] did not give the buyer an unconditional right to reject goods. Article 75 [became CISG article 86 ] applied only if the buyer exercised the right to reject the goods which was given to him in two cases alone: when he was entitled to avoid the contract even after taking delivery of the goods or when he was entitled to request the replacement of the goods by reason of lack of conformity. Article 75 [became CISG article 86 ] was intended to specify that if the buyer was entitled on one of these grounds to exercise his right to reject the goods he was still under an obligation to preserve them. The text should perhaps be made clearer.

87. Mr. WANG Tian ming (China) said that he had decided to submit his amendment precisely because article 75 [became CISG article 86 ] had seemed ambiguous when he read it. Perhaps the text should be referred to the Drafting Committee.

88. It was so decided.

89. Mrs. KAMARUL (Australia) said that her delegation's amendment (A/CONF.97/C.1/L.227) was intended to make it clear in article 75(1) [became CISG article 86(1) ] that the buyer was obliged to preserve the goods if he had received them and intended to reject them, even in the case envisaged in article 75(2) [became CISG article 86(2) ], namely, when the buyer had taken possession of them on behalf of the seller in the circumstances set out in that paragraph. If that idea was implicit in paragraph 1, the Australian proposal was simply a drafting change. If not, it was a substantive amendment.

90. Mr. ROGNLIEN (Norway) considered that the amendment was a substantive one which would modify the buyer's obligations, since the conditions were different in the case hitherto envisaged in paragraph 1 and the case envisaged in paragraph 2.

91. Mr. KRISPIS (Greece) interpreted the amendment differently. As he saw it the amendment specified that the seller was obliged to preserve the goods in all cases in which he took delivery of them.

92. Mr. HONNOLD (United States of America) thought that the clarification provided by the Australian amendment was simply a matter of drafting, since the seller was already obliged to preserve the goods as soon as he took possession of them.

93. The CHAIRMAN noted that the Australian amendment was being interpreted in various ways. He proposed that further discussion should be deferred to the next meeting.

94. It was so decided.

The meeting rose at 6 p.m.


Pace Law School Institute of International Commercial Law - Last updated January 29, 1999
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