Reproduced with permission from 6 Minnesota Journal of Global Trade (1997) 105-152

Phanesh Koneru [*]

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The Convention is silent on the currency in which the price is to be paid. This problem does not usually arise, because if the price is agreed upon by the parties, they will have negotiated the price with reference to a certain currency. The problem does arise, however, when the price term is left open and the court fills the gap using Article 55. The delegates at the Diplomatic Conference deliberated on the issue of currency and voted against a proposal to fix a specific currency for payment.[136] The general rule based on trade usage seems to be that the currency will be that of the place of payment (the seller's place of business, under Article 57(1)(a)) [KG Berlin 24 January 1994 (Germany); see also OLG Koblenz 17 September 1993 (Germany)].[137]

If the seller's place of business changes (either because the seller moved or because he assigned the contract to another from a different country) and the currency of the seller's new place is a hard currency, should the buyer pay in that hard currency? The answer should be no, because a change of seller's place of business is not a risk that the buyer contemplated (unless there was an agreement to the contrary) upon entering the contract. In fact, the Convention explicitly states that a rise in costs associated with the seller's change of place of business should not be borne by the buyer.[138] This result also flows from recognition of the general principle that the distribution of risk is fixed "at the conclusion of the contract."[139]

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FOOTNOTES

* J.D., University of San Diego School of Law, 1996; Ph.D., University of Southern California, 1992. The author is grateful to Professor William H. Lawrence, University of San Diego School of Law, for his helpful discussions and encouragement during preparation of this manuscript. However, any errors, omissions, or misstatements should be attributed to the author alone. This work is dedicated to Professor Friedhelm Thiedig and his family (Norderstedt, Germany), Helma and Maximillian R. Meyer (Hamburg, Germany), and Michel Van der Ginst and his family (Dorp-Zevergem, Belgium).

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136. The proposal was introduced by the Spanish delegation and provided that the seller could require the buyer to pay the price in the buyer's currency, even if the buyer's domestic exchange controls prevented him from paying in another currency. Honnold, Documentary History, supra note 3, at 583. "The problems connected with the currency of payment were related to those concerning the validity of the contract, which, under article 4(a) of the draft Convention, were excluded from its sphere of application." Id. at 584 (Remarks of Mr. Krispis, Greece).

137. Case 2 U 7418/92 (Italy v. F.R.G.), Kammergericht Berlin (Jan. 24, 1994) Recht der Internationalen Wirtschaft (RIW) 683 (1994), available in UNILEX, supra note 3; see also Case 2 U 1230/91 (Fr. v. F.R.G.), Oberlandesgericht Koblenz, (Sept. 17, 1993) Recht der Internationalen Wirtschaft (RIW) 934-38 (1993), available in UNILEX, supra note 3.

138. "The seller must bear any increase in the expenses incidental to payment which is caused by a change in his place of business subsequent to the conclusion of the contract." CISG, supra note 1, art. 57(2).

139. See supra note 62 and accompanying text (discussing the general principle of the Convention that the distribution of risk should be determined at the conclusion of the contract).

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