Ulla Terese Kræmer
BUSINESS LAW  Ulkr@easj.dk
lesson two
Today's topic:
CISG, part III
Obligations of the Parties
The substantial rules of sales
A sale implies that property is transferred from one
owner to another against payment
An international sale is when sell...
In consumer sales
By auctions
On stocks, shares ect.
Of ships, aircrafts etc.
CISG DOES NOT APPLY:
Seller: To deliver, handing over papers – chapter II
 At the right time (when?)
 In the right place (where?)
 The righ...
No help in CISG
”The seller’s actions to bring the goods in the
buyer’s possession, including handling over
documents.”
DE...
Art. 33
 On the agreed time
 If a period of time has been agreed, seller decides when to deliver within
the period
 Or ...
Art. 31
 The agreed place (according to the contract)
 Consignment sale: Handing the goods over to the first foreign ca...
Art. 35
Conformity of the goods
 The agreed quality/amount – art 35(1) (warrants or guarantees – a matter of words)
Oral ...
Markedsføringsøkonomi | Erhvervsret10
 Basic qualities
 Definition of quality/conformity – art 35(2)
 Fit for the purpo...
Seller’s failure of preformance:
 Delay: Delivery too late or no delivery at all
 Defects: Actual defects – quality or q...
Markedsføringsøkonomi | Erhvervsret12
SELLER’S BREACH OF CONTRACT
• Art. 45-52
Definition of Seller’s Breach of Contract, ...
Markedsføringsøkonomi | Erhvervsret13
What will you do, if the contract does not
specify neither the time nor place of
del...
Markedsføringsøkonomi | Erhvervsret14
BREAK
 The seller is liable for any lack of conformity which exists at the time when
the risk passes to the buyer – even if the...
 Reasonable intensive examination
 Random sampling
 Stress test
 The more expensive - the greater intensivitet
 Not e...
Specificity requirement
”poor workmanship” - ”improper fitting”
 But timely notice of a serious non-conformity which do n...
What are Third-party claims?
It’s a legal defect,
since the buyer dos not get the full title to the goods
The mere asserti...
Payment and taking delivery – art. 53
 At the right time – when?
 At the agreed time
 When seller is placing the goods ...
Payment and taking delivery
 In the right place – where?
 At the agreed place
 At seller’s place of business
 Art. 57
...
Payment of the right sum
the agreed sum
Art. 55:
”… the parties are considered, in the absence of any indication to the co...
Obligation to receive the goods – art. 60
Refusal of receipt = Breach af contract
Arrangement of payment: e.g. documentary...
All the acts in order to enable the seller to make delivery
Taking over the goods
Obligatet to accept the seller’s perform...
BREAK
. Delivery is a ”crucial point” of a sale!
Who should pay in the event taht the goods are lost, damaged or destroyed?
Deli...
Who is carrying the risk of accidental loss?
(damage or destruction of the goods)
Delivery and passing of the risk general...
Art. 67: Consignment sale:
The risk is passing to the buyer, when the marked goods
are handed over to the first foreign ca...
INCOTERMS
(THE INTERNATIONAL CHAMBER OF COMMERCE)
The risk passes when the buyer actually takes over the goods
(as in a retail outlet)
Collect within a given period?
The ri...
What is a fundamental breach?
1. Work in 5 groups for 15 minutes, describe the concept of a fundamental
breach – please pu...
SEE YOU NEXT WEEK
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Bis, lektion 2 cisg

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Bis, lektion 2 cisg

  1. 1. Ulla Terese Kræmer BUSINESS LAW  Ulkr@easj.dk lesson two
  2. 2. Today's topic: CISG, part III Obligations of the Parties The substantial rules of sales
  3. 3. A sale implies that property is transferred from one owner to another against payment An international sale is when seller and buyer have their place of business in different states. DEFINITION OF A SALE
  4. 4. In consumer sales By auctions On stocks, shares ect. Of ships, aircrafts etc. CISG DOES NOT APPLY:
  5. 5. Seller: To deliver, handing over papers – chapter II  At the right time (when?)  In the right place (where?)  The right quality and amount (what?)  Buyer: to pay, taking delivery – chapter III  At the right time (when?)  In the right place (where?)  The right amount (what?) OBLIGATIONS OF THE PARTIES
  6. 6. No help in CISG ”The seller’s actions to bring the goods in the buyer’s possession, including handling over documents.” DEFINITION OF DELIVERY?
  7. 7. Art. 33  On the agreed time  If a period of time has been agreed, seller decides when to deliver within the period  Or else within reasonable time (estimate) RIGHT TIME WHEN?
  8. 8. Art. 31  The agreed place (according to the contract)  Consignment sale: Handing the goods over to the first foreign carrier (passing of risk)  Placing the goods at buyer’s disposal in seller’s place of business or the place where the goods were at the conclusion of the contract IN THE RIGHT PLACE WHERE TO DELIVER?
  9. 9. Art. 35 Conformity of the goods  The agreed quality/amount – art 35(1) (warrants or guarantees – a matter of words) Oral agreements  The parol evidence rule: ”Once a written agreement has been duly executed (signed) then it cannot be altered or annulled by any oral evidence that may contradict the terms of the agreement” in contrary to  Art. 8 and 11 in CISG Conclusion  Art. 8 and 11 require only due consideration THE RIGHT QUALITY/AMOUNT WHAT TO DELIVER?
  10. 10. Markedsføringsøkonomi | Erhvervsret10  Basic qualities  Definition of quality/conformity – art 35(2)  Fit for the purposes – bowling balls must be suitable for bowling etc. – resalable – ordinary use – compliance with regulatory standards in the buyer’s country  Fit for the specific purpose the seller knew – Sometimes buyer use the goods in an unusual way and if the seller knows this, he must deliver the goods which can be used for this purpose  Similar to the sample/model that the seller presented to the buyer  Packaged: in a usual manner – adequate to protect the goods QUALITY/CONFORMITY – ART 35(2)
  11. 11. Seller’s failure of preformance:  Delay: Delivery too late or no delivery at all  Defects: Actual defects – quality or quantity  Defective title (third party claims):  Legal defects – sale of goods with third person’s right SELLER’S BREACH OF CONTRACT
  12. 12. Markedsføringsøkonomi | Erhvervsret12 SELLER’S BREACH OF CONTRACT • Art. 45-52 Definition of Seller’s Breach of Contract, art. 45(1) ”If the seller fails to perform any of his obligation under the contract or this convention, the buyer may: • Exercise the rights provided in art. 46-52 • Claim damages as provided in art. 74-77
  13. 13. Markedsføringsøkonomi | Erhvervsret13 What will you do, if the contract does not specify neither the time nor place of delivery? QUESTION FOR YOU:
  14. 14. Markedsføringsøkonomi | Erhvervsret14 BREAK
  15. 15.  The seller is liable for any lack of conformity which exists at the time when the risk passes to the buyer – even if the defect is first discovered much later  Burden of proof?  Time for notice in case of non-conformity? 1. Reasonable time: Buyer must inform the seller within reasonable time after he has – or ought to have – discovered the defect. (art. 39(1)) 2. Examination: Buyer are obliged to inspect the goods – most courts require the buyer to move quickly (art. 38) 3. Two years of notice (limitation period) – cut of rule – after that time the buyer is barred from a non-conformity claim against the seller. (Art. 39(2)) NOTICE OF NON-CONFORMITY
  16. 16.  Reasonable intensive examination  Random sampling  Stress test  The more expensive - the greater intensivitet  Not expect the buyer to uncover defects discoverable only by experts INTENSITY OF EXAMINATION?
  17. 17. Specificity requirement ”poor workmanship” - ”improper fitting”  But timely notice of a serious non-conformity which do not initially specify the defect with sufficient precision – the buyer schould be given a chance to provide supplementary specification  Art. 40 can be used in situations where the result will be unfair for seller – a narrow ”safty valve” – used in exceptional circumstances  Art. 44 ”safty valve” for courts/arbitral tribunal if a buyer have reasonable excuse for failing to notifi the seller in accordance with art. 39(1) SPECIFY THE NATURE OF THE LACK OF CONFORMITY
  18. 18. What are Third-party claims? It’s a legal defect, since the buyer dos not get the full title to the goods The mere assertion by a third party of such claim constitutes a breach by seller The buyer must notice the seller in ”reasonable” time – art. 43 FREE OF THIRD-PARTY CLAIMS ART. 41
  19. 19. Payment and taking delivery – art. 53  At the right time – when?  At the agreed time  When seller is placing the goods at his disposal or documents are handed over  Art. 58 + 59 OBLIGATIONS OF THE BUYER, WHEN?
  20. 20. Payment and taking delivery  In the right place – where?  At the agreed place  At seller’s place of business  Art. 57 OBLIGATIONS OF THE BUYER, WHERE?
  21. 21. Payment of the right sum the agreed sum Art. 55: ”… the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods…” Open price term: If an open-price contract is pheld, because the parties intended to be bound, the price-gab can be filled bu the price ”generally charged” at the time of the conclusion of the contract. OBLIGATIONS OF THE BUYER, WHAT?
  22. 22. Obligation to receive the goods – art. 60 Refusal of receipt = Breach af contract Arrangement of payment: e.g. documentary credit Examination of the goods – art. 38 OBLIGATIONS OF THE BUYER
  23. 23. All the acts in order to enable the seller to make delivery Taking over the goods Obligatet to accept the seller’s performance – if not = breach of contract OBLIGATIONS OF THE BUYER TO TAKE DELIVERY
  24. 24. BREAK
  25. 25. . Delivery is a ”crucial point” of a sale! Who should pay in the event taht the goods are lost, damaged or destroyed? Delivery is decisive for:  Passing of the risk – art. 67-69  Delay  Defects – art. 36 PASSING OF RISK
  26. 26. Who is carrying the risk of accidental loss? (damage or destruction of the goods) Delivery and passing of the risk generally ”go together” – art. 66-70 Delivery Seller’s risk Buyer’s risk PASSING OF THE RISK
  27. 27. Art. 67: Consignment sale: The risk is passing to the buyer, when the marked goods are handed over to the first foreign carrier Marked Foeign PASSING OF THE RISK
  28. 28. INCOTERMS (THE INTERNATIONAL CHAMBER OF COMMERCE)
  29. 29. The risk passes when the buyer actually takes over the goods (as in a retail outlet) Collect within a given period? The risk will not pas until the period has passed In a warehouse (a place other than seller’s place) within a given period? Before the period has passed Remember identification of the goods! NON-CARRIER CASES ART. 69
  30. 30. What is a fundamental breach? 1. Work in 5 groups for 15 minutes, describe the concept of a fundamental breach – please put your names on the paper. 2. Give your reply to another group - and so on – until your reply have been to all 5 groups 3. When you receive another group's reply – you have 5 minutes to add additional points 1. I will then copy the 5 documents and give you a copy to the next lesson, where we will be reviewing “remedies for breach” FUNDAMENTAL BREACH?
  31. 31. SEE YOU NEXT WEEK

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