2008 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods
Digest of Article 68 case law [reproduced with permission of UNCITRAL] [*]
The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller.
1. Article 68 provides rules for the time when risk passes if goods are sold while in transit. The general rule is that the risk passes from the time the contract of sale is concluded. If, however, the circumstances so indicate, the risk is deemed to have passed when the goods were handed over to the carrier. Only if the seller knew or ought to have known that the goods were lost or damaged at the time the contract was concluded and did not inform the buyer will the risk remain with the seller. Although article 68 has been cited in reported decisions, these decisions do not interpret its contents.
[See also the overview comments UNCITRAL has prepared to introduce the provisions of the CISG dealing with Passing of Risk (articles 66 through 70). They discuss Nature of Risk, Parties' Agreement on Passing of Risk, Other Binding Rules on Passing of Risk, Burden of Establishing the Passing of Risk, and Risk of Loss or Damage Following Termination or Avoidance.]
* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.UNCITRAL.org/pdf/english/clout/CISG_second_edition.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:
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1. [GERMANY Oberlandesgericht Hamm 23 June 1998 (Furniture case)] (affirming lower court without reference to art. 68); [AUSTRIA Schiedsgericht der Börse für landwirtschaftliche in Wien 10 December 1997 (Barley case)] (citing art. 68); [GERMANY Landgericht Trier 12 October 1995 (Wine case)] (citing art. 68).