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Source: Doc. B(1) Reproduced from UNCITRAL Yearbook VIII (1977), A/32/17, pages 25-64

EXCERPT FROM ANNEX I

Report of Committee of the Whole I relating to the
draft Convention on the International Sale of Goods

[...]

Article 65

534. The text of article 65, as adopted by the Working Group on the International Sale of Goods, is as follows:

CISG
number
Art. 67

"(1) If the contract of sale involves carriage of the goods and the seller is not required to hand them over at a particular destination, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer.

CISG
number
Art. 68

"(2) If at the time of the conclusion of the contract the goods are already in transit, the risk passes as from the time the goods were handed over to the first carrier. However, the risk of loss of goods sold in transit does not pass to the buyer if, at the time of the conclusion of the contract, the seller knew or ought to have known that the goods had been lost or damaged, unless the seller had disclosed such fact to the buyer."

Exception to rule in paragraph (1)

535. The Committee considered a proposal that the following sentence be added to paragraph (1):

"However, if the seller is required to hand the goods over to the carrier at a particular place, the risk does not pass to the buyer before the goods are handed over to the carrier at this place."

536. In support of this proposal it was stated that paragraph (1) did not give a reasonable solution in cases where the seller undertook to ship the goods from a particular place at an inland point. In such a situation the risk should pass to the buyer only when the goods were handed over to a carrier at a seaport and not when they are handed over to a domestic carrier for transport to the seaport.

537. There was considerable support for this proposal and the Committee, after having accepted certain modifications which related to drafting, retained the proposal.

CISG
number
Art. 67(1)

Control of documents

538. The Committee considered a proposal designed to make it clear that the seller's retention of control of the goods by retaining the documents as security against payment until after the goods are shipped does not affect the passage of risk.

The proposal was as follows:

"The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of risk."

539. The Committee, after deliberation, adopted the proposal.

CISG
number
Art. 68

Paragraph (2)

540. The Committee considered a proposal under which the risk in respect of goods sold in transit would not pass on shipment if the shipment was of unascertained or unidentified goods for transmission to various consignees. This proposal was opposed on the ground that it would unnecessarily limit the scope of paragraph (2).

541. The Committee after deliberation retained the text of paragraph (2) as proposed by the Working Group on the International Sale of Goods.

542. The representative of the Philippines expressed a reservation in respect of the second sentence of paragraph (2) in that the provisions of that paragraph were not consistent with logic. It was stated that it was inconceivable that the buyer should bear the risk of loss or damage to the goods prior to the time that the contract was concluded. Although the view had been expressed in the Committee that the paragraph accorded with international commercial practice, that practice was one of the developed world. UNCITRAL should take into account the resolutions of the General Assembly which laid down the framework of a new international economic order. If UNCITRAL wished to carry out its mandate to make ULIS more acceptable to countries of widely different economic and social backgrounds it should not ignore these General Assembly resolutions.

543. However, the representative of Finland pointed out that the draft Convention contained non-mandatory rules. No buyer had to purchase goods afloat and if he did so the price paid for such goods would reflect the added risk. The view was also expressed that the rule set forth in paragraph (2) was the result of practical needs. If, in the case at issue, the goods had been damaged during the carriage it was not always possible to determine at what moment they had been damaged. If there was no indication on the bill of lading the buyer consignee could claim damages from the carrier and would also be covered by the insurance policy in respect of the goods.

CISG
number
Art. 67(2)

New paragraph (3)

544. The Committee considered a proposal that a new paragraph (3) be added to article 65 to read as follows:

"(3) If the goods are not identified for delivery to the buyer, by marking with an address or otherwise, they are not clearly identified to the contract unless the seller gives notice of the consignment and, if necessary, sends some documents specifying the goods."

545. The Committee retained this proposal.

Decision

546. The Committee, having regard to the decisions recorded in the previous paragraphs recommends that the Commission should adopt the following text:[h]

h. The Drafting Group concluded that, for reasons of clarity, article 65 (2) be contained in a separate article and be renumbered as article 66.

CISG
number
Art. 67

"Article 65

"(1) If the contract of sale involves carriage of the goods and the seller is not required to hand them over at a particular destination, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer. If the seller is required to hand the goods over to a carrier at a particular place other than the destination, the risk does not pass to the buyer until the goods are handed over to the carrier at that place. The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of risk. [page 63]
"(2) Nevertheless, if the goods are not clearly marked with an address or otherwise identified to the contract, the risk does not pass to the buyer until the seller sends the buyer a notice of the consignment which specifies the goods.

CISG
number
Art. 68

"Article 66

"The risk in respect of goods sold in transit is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents controlling their disposition. However, if at the time of the conclusion of the contract the seller knew or ought to nave known that the goods had been lost or damaged and he has not disclosed such fact to the buyer, such loss or damage is at the risk of the seller." [page 64]

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Pace Law School Institute of International Commercial Law - Last updated July 26, 2007
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