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Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 132-133. Reproduced with permission of the publisher, Kluwer Law International, The Hague.

Article 10

Definition of "Place of Business"

§ 123 A. Multiple "Places of Business"

The Convention refers to a party’s "place of business" in several Articles: 1, 12, 20(2), 24, 31(c), 42(1)(b), 57(1)(a), 69(2) and 96. A commercial enterprise may maintain a central office and various branch offices; in applying the above provisions of the Convention it may be necessary to choose among multiple places of business. For example, the Convention is applicable only if the seller and the buyer have their places of business "in different States." (See the Commentary to Art. 1, supra at §42.) In that setting, paragraph (a) of Article 10 was quoted and discussed; the discussion need not be repeated here.

§ 124 (1) The Transitory Agent

During the preparation of the Convention, some delegates were concerned lest "place of business" be construed to extend to a hotel room or other temporary place where a travelling agent might conduct negotiations.[1] Referring to a "permanent" place of business presented drafting difficulties, and most delegates concluded that temporary sojourns would not establish a "place of business". The term that corresponds to "place of business" in the official French text is établissement and in the official Spanish text is establecimiento —words that seem to be inconsistent with a temporary stopping place.[2] Moreover, as was noted under Article 1 ( supra at §43), Article 10(a) points to the place of business "which has the closest relationship to the contract and its performance"; the Convention’s use of "place of business" in the context of Articles 24, 31(c), 42(b) and 69(2) shows that this term refers to a place for the continuing conduct of business. See §43, supra; Schlechtriem, Com. (1998) 81–83 (Herber).[page 132]

§ 125 B. No "Place of Business"

Paragraph (b) of Article 10 provides:

Article 10 [3]

"For the purposes of this Convention...

(b) if a party does not have a place of business, reference is to be made to his habitual residence"

Parties to international sales transactions will usually have a "place of business"; paragraph (b) was included to avoid a gap in the law when this is not the case.[page 133]

FOOTNOTES: Chapter on Article 10

1. See e.g., Records 1980 Conference, Analysis of Comments and Proposals: (Comment by ICC), O.R. 73, Docy. Hist. 394. This problem was discussed under Art. 1, supra at §43.

2. Consideration of the various official language versions is appropriate to promote the Convention’s goal of "uniformity in its application." See Art. 7 supra at §86. For general background see Hadari, Choice of National Law applicable to the MNE, 1974 Duke L. J. 1 (1974).

3. Art. 10 is substantially the same as Art. 9 of the 1978 Draft. Paragraph (b) follows ULIS 1(2) and ULF 1(2). See Sec. Comm. O.R. 19, Docy. Hist. 409.

Pace Law School Institute of International Commercial Law - Last updated February 23, 2005
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