Western Australian Consolidated Acts Western Australian Consolidated Acts(Section 3)
UNITED NATIONS CONVENTION ON CONTRACTS
FOR THE INTERNATIONAL SALE OF GOODS
THE STATES PARTIES TO THIS CONVENTION,
BEARING IN MIND the broad objectives in the
resolutions adopted by the sixth special session of the General Assembly of
the United Nations on the establishment of a New International Economic Order,
CONSIDERING that the development of international
trade on the basis of equality and mutual benefit is an important element in
promoting friendly relations among States,
BEING OF THE OPINION that the adoption of uniform
rules which govern contracts for the international sale of goods and take into
account the different social, economic and legal systems would contribute to
the removal of legal barriers in international trade and promote the
development of international trade,
HAVE AGREED as follows:
PART I — SPHERE OF APPLICATION AND
GENERAL PROVISIONS
CHAPTER I — SPHERE OF APPLICATION
Article 1
(1) This Convention
applies to contracts of sale of goods between parties whose places of business
are in different States:
(a) when
the States are Contracting States; or
(b) when
the rules of private international law lead to the application of the law of a
Contracting State.
(2) The fact that the
parties have their places of business in different States is to be disregarded
whenever this fact does not appear either from the contract or from any
dealings between, or from information disclosed by, the parties at any time
before or at the conclusion of the contract.
(3) Neither the
nationality of the parties nor the civil or commercial character of the
parties or of the contract is to be taken into consideration in determining
the application of this Convention.
Article 2
This Convention does not apply to sales:
(a) of
goods bought for personal, family or household use, unless the seller, at any
time before or at the conclusion of the contract, neither knew nor ought to
have known that the goods were bought for any such use;
(b) by
auction;
(c) on
execution or otherwise by authority of law;
(d) of
stocks, shares, investment securities, negotiable instruments or money;
(e) of
ships, vessels, hovercraft or aircraft;
(f) of
electricity.
Article 3
(1) Contracts for the
supply of goods to be manufactured or produced are to be considered sales
unless the party who orders the goods undertakes to supply a substantial part
of the materials necessary for such manufacture or production.
(2) This Convention
does not apply to contracts in which the preponderant part of the obligations
of the party who furnishes the goods consists in the supply of labour or other
services.
Article 4
This Convention governs only the formation of the
contract of sale and the rights and obligations of the seller and the buyer
arising from such a contract. In particular, except as otherwise expressly
provided in this Convention, it is not concerned with:
(a) the
validity of the contract or of any of its provisions or of any usage;
(b) the
effect which the contract may have on the property in the goods sold.
Article 5
This Convention does not apply to the liability of
the seller for death or personal injury caused by the goods to any person.
Article 6
The parties may exclude the application of this
Convention or, subject to article 12, derogate from or vary the effect of any
of its provisions.
CHAPTER II — GENERAL PROVISIONS
Article 7
(1) In the
interpretation of this Convention, regard is to be had to its international
character and to the need to promote uniformity in its application and the
observance of good faith in international trade.
(2) Questions
concerning matters governed by this Convention which are not expressly settled
in it are to be settled in conformity with the general principles on which it
is based or, in the absence of such principles, in conformity with the law
applicable by virtue of the rules of private international law.
Article 8
(1) For the purposes
of this Convention statements made by and other conduct of a party are to be
interpreted according to his intent where the other party knew or could not
have been unaware what that intent was.
(2) If the preceding
paragraph is not applicable, statements made by and other conduct of a party
are to be interpreted according to the understanding that a reasonable person
of the same kind as the other party would have had in the same circumstances.
(3) In determining the
intent of a party or the understanding a reasonable person would have had, due
consideration is to be given to all relevant circumstances of the case
including the negotiations, any practices which the parties have established
between themselves, usages and any subsequent conduct of the parties.
Article 9
(1) The parties are
bound by any usage to which they have agreed and by any practices which they
have established between themselves.
(2) The parties are
considered, unless otherwise agreed, to have impliedly made applicable to
their contract or its formation a usage of which the parties knew or ought to
have known and which in international trade is widely known to, and regularly
observed by, parties to contracts of the type involved in the particular trade
concerned.
Article 10
For the purposes of this Convention:
(a) if a
party has more than one place of business, the place of business is that which
has the closest relationship to the contract and its performance, having
regard to the circumstances known to or contemplated by the parties at any
time before or at the conclusion of the contract;
(b) if a
party does not have a place of business, reference is to be made to his
habitual residence.
Article 11
A contract of sale need not be concluded in or
evidenced by writing and is not subject to any other requirement as to form.
It may be proved by any means, including witnesses.
Article 12
Any provision of article 11, article 29 or Part II
of this Convention that allows a contract of sale or its modification or
termination by agreement or any offer, acceptance or other indication of
intention to be made in any form other than in writing does not apply where
any party has his place of business in a Contracting State which has made a
declaration under article 96 of this Convention. The parties may not derogate
from or vary the effect of this article.
Article 13
For the purposes of this Convention writing
includes telegram and telex.
PART II — FORMATION OF THE CONTRACT
Article 14
(1) A proposal for
concluding a contract addressed to one or more specific persons constitutes an
offer if it is sufficiently definite and indicates the intention of the
offeror to be bound in case of acceptance. A proposal is sufficiently definite
if it indicates the goods and expressly or implicitly fixes or makes provision
for determing the quantity and the price.
(2) A proposal other
than one addressed to one or more specific persons is to be considered merely
as an invitation to make offers, unless the contrary is clearly indicated by
the person making the proposal.
Article 15
(1) An offer becomes
effective when it reaches the offeree.
(2) An offer, even if
it is irrevocable, may be withdrawn if the withdrawal reaches the offeree
before or at the same time as the offer.
Article 16
(1) Until a contract
is concluded an offer may be revoked if the revocation reaches the offeree
before he has dispatched an acceptance.
(2) However, an offer
cannot be revoked:
(a) if
it indicates, whether by stating a fixed time for acceptance or otherwise,
that it is irrevocable; or
(b) if
it was reasonable for the offeree to rely on the offer as being irrevocable
and the offeree has acted in reliance on the offer.
Article 17
An offer, even if it is irrevocable, is terminated
when a rejection reaches the offeror.
Article 18
(1) A statement made
by or other conduct of the offeree indicating assent to an offer is an
acceptance. Silence or inactivity does not in itself amount to acceptance.
(2) An acceptance of
an offer becomes effective at the moment the indication of assent reaches the
offeror. An acceptance is not effective if the indication of assent does not
reach the offeror within the time he has fixed or, if no time is fixed, within
a reasonable time, due account being taken of the circumstances of the
transaction, including the rapidity of the means of communication employed by
the offeror. An oral offer must be accepted immediately unless the
circumstances indicate otherwise.
(3) However, if, by
virtue of the offer or as a result of practices which the parties have
established between themselves or of usage, the offeree may indicate assent by
performing an act, such as one relating to the dispatch of the goods or
payment of the price, without notice to the offeror, the acceptance is
effective at the moment the act is performed, provided that the act is
performed within the period of time laid down in the preceding paragraph.
Article 19
(1) A reply to an
offer which purports to be an acceptance but contains additions, limitations
or other modifications is a rejection of the offer and constitutes a
counter-offer.
(2) However, a reply
to an offer which purports to be an acceptance but contains additional or
different terms which do not materially alter the terms of the offer
constitutes an acceptance, unless the offeror, without undue delay, objects
orally to the discrepancy or dispatches a notice to that effect. If he does
not so object, the terms of the contract are the terms of the offer with the
modifications contained in the acceptance.
(3) Additional or
different terms relating, among other things, to the price, payment, quality
and quantity of the goods, place and time of delivery, extent of one
party’s liability to the other or the settlement of disputes are
considered to alter the terms of the offer materially.
Article 20
(1) A period of time
for acceptance fixed by the offeror in a telegram or a letter begins to run
from the moment the telegram is handed in for dispatch or from the date shown
on the letter or, if no such date is shown, from the date shown on the
envelope. A period of time for acceptance fixed by the offeror by telephone,
telex or other means of instantaneous communication, begins to run from the
moment that the offer reaches the offeree.
(2) Official holidays
or non-business days occurring during the period for acceptance are included
in calculating the period. However, if a notice of acceptance cannot be
delivered at the address of the offeror on the last day of the period because
that day falls on an official holiday or a non-business day at the place of
business of the offeror, the period is extended until the first business day
which follows.
Article 21
(1) A late acceptance
is nevertheless effective as an acceptance if without delay the offeror orally
so informs the offeree or dispatches a notice to that effect.
(2) If a letter or
other writing containing a late acceptance shows that it has been sent in such
circumstances that if its transmission had been normal it would have reached
the offeror in due time, the late acceptance is effective as an acceptance
unless, without delay, the offeror orally informs the offeree that he
considers his offer as having lapsed or dispatches a notice to that effect.
Article 22
An acceptance may be withdrawn if the withdrawal
reaches the offeror before or at the same time as the acceptance would have
become effective.
Article 23
A contract is concluded at the moment when an
acceptance of an offer becomes effective in accordance with the provisions of
this Convention.
Article 24
For the purposes of this Part of the Convention,
an offer, declaration of acceptance or any other indication of intention
“reaches” the addressee when it is made orally to him or delivered
by any other means to him personally, to his place of business or mailing
address or, if he does not have a place of business or mailing address, to his
habitual residence.
PART III — SALE OF GOODS
CHAPTER I — GENERAL PROVISIONS
Article 25
A breach of contract committed by one of the
parties is fundamental if it results in such detriment to the other party as
substantially to deprive him of what he is entitled to expect under the
contract, unless the party in breach did not foresee and a reasonable person
of the same kind in the same circumstances would not have foreseen such a
result.
Article 26
A declaration of avoidance of the contract is
effective only if made by notice to the other party.
Article 27
Unless otherwise expressly provided in this Part
of the Convention, if any notice, request or other communication is given or
made by a party in accordance with this Part and by means appropriate in the
circumstances, a delay or error in the transmission of the communication or
its failure to arrive does not deprive that party of the right to rely on the
communication.
Article 28
If, in accordance with the provisions of this
Convention, one party is entitled to require performance of any obligation by
the other party, a court is not bound to enter a judgement for specific
performance unless the court would do so under its own law in respect of
similar contracts of sale not governed by this Convention.
Article 29
(1) A contract may be
modified or terminated by the mere agreement of the parties.
(2) A contract in
writing which contains a provision requiring any modification or termination
by agreement to be in writing may not be otherwise modified or terminated by
agreement. However, a party may be precluded by his conduct from asserting
such a provision to the extent that the other party has relied on that
conduct.
CHAPTER II — OBLIGATIONS OF THE SELLER
Article 30
The seller must deliver the goods, hand over any
documents relating to them and transfer the property in the goods, as required
by the contract and this Convention.
Section I. Delivery of the goods and handing over of documents
Article 31
If the seller is not bound to deliver the goods at
any other particular place, his obligation to deliver consists:
(a) if
the contract of sale involves carriage of the goods — in
handing the goods over to the first carrier for transmission to the buyer;
(b) if,
in cases not within the preceding subparagraph, the contract relates to
specific goods, or unidentified goods to be drawn from a specific stock or to
be manufactured or produced, and at the time of the conclusion of the contract
the parties knew that the goods were at, or were to be manufactured or
produced at, a particular place — in placing the goods at the
buyer’s disposal at that place;
(c) in
other cases — in placing the goods at the buyer’s
disposal at the place where the seller had his place of business at the time
of the conclusion of the contract.
Article 32
(1) If the seller, in
accordance with the contract or this Convention, hands the goods over to a
carrier and if the goods are not clearly identified to the contract by
markings on the goods, by shipping documents or otherwise, the seller must
give the buyer notice of the consignment specifying the goods.
(2) If the seller is
bound to arrange for carriage of the goods, he must make such contracts as are
necessary for carriage to the place fixed by means of transportation
appropriate in the circumstances and according to the usual terms for such
transportation.
(3) If the seller is
not bound to effect insurance in respect of the carriage of the goods, he
must, at the buyer’s request, provide him with all available information
necessary to enable him to effect such insurance.
Article 33
The seller must deliver the goods:
(a) if a
date is fixed by or determinable from the contract, on that date;
(b) if a
period of time is fixed by or determinable from the contract, at any time
within that period unless circumstances indicate that the buyer is to choose a
date; or
(c) in
any other case, within a reasonable time after the conclusion of the contract.
Article 34
If the seller is bound to hand over documents
relating to the goods, he must hand them over at the time and place and in the
form required by the contract. If the seller has handed over documents before
that time, he may, up to that time, cure any lack of conformity in the
documents, if the exercise of this right does not cause the buyer unreasonable
inconvenience or unreasonable expense. However, the buyer retains any right to
claim damages as provided for in this Convention.
Section II. Conformity of the goods and third party claims
Article 35
(1) The seller must
deliver goods which are of the quantity, quality and description required by
the contract and which are contained or packaged in the manner required by the
contract.
(2) Except where the
parties have agreed otherwise, the goods do not conform with the contract
unless they:
(a) are
fit for the purposes for which goods of the same description would ordinarily
be used;
(b) are
fit for any particular purpose expressly or impliedly made known to the seller
at the time of the conclusion of the contract, except where the circumstances
show that the buyer did not rely, or that it was unreasonable for him to rely,
on the seller’s skill and judgement;
(c)
possess the qualities of goods which the seller has held out to the buyer as a
sample or model;
(d) are
contained or packaged in the manner usual for such goods or, where there is no
such manner, in a manner adequate to preserve and protect the goods.
(3) The seller is not
liable under subparagraphs (a) to (d) of the preceding paragraph for any
lack of conformity of the goods if at the time of the conclusion of the
contract the buyer knew or could not have been unaware of such lack of
conformity.
Article 36
(1) The seller is
liable in accordance with the contract and this Convention for any lack of
conformity which exists at the time when the risk passes to the buyer, even
though the lack of conformity becomes apparent only after that time.
(2) The seller is also
liable for any lack of conformity which occurs after the time indicated in the
preceding paragraph and which is due to a breach of any of his obligations,
including a breach of any guarantee that for a period of time the goods will
remain fit for their ordinary purpose or for some particular purpose or will
retain specified qualities or characteristics.
Article 37
If the seller has delivered goods before the date
for delivery, he may, up to that date, deliver any missing part or make up any
deficiency in the quantity of the goods delivered, or deliver goods in
replacement of any non-conforming goods delivered or remedy any lack of
conformity in the goods delivered, provided that the exercise of this right
does not cause the buyer unreasonable inconvenience or unreasonable expense.
However, the buyer retains any right to claim damages as provided for in this
Convention.
Article 38
(1) The buyer must
examine the goods, or cause them to be examined, within as short a period as
is practicable in the circumstances.
(2) If the contract
involves carriage of the goods, examination may be deferred until after the
goods have arrived at their destination.
(3) If the goods are
redirected in transit or redispatched by the buyer without a reasonable
opportunity for examination by him and at the time of the conclusion of the
contract the seller knew or ought to have known of the possibility of such
redirection or redispatch, examination may be deferred until after the goods
have arrived at the new destination.
Article 39
(1) The buyer loses
the right to rely on a lack of conformity of the goods if he does not give
notice to the seller specifying the nature of the lack of conformity within a
reasonable time after he has discovered it or ought to have discovered it.
(2) In any event, the
buyer loses the right to rely on a lack of conformity of the goods if he does
not give the seller notice thereof at the latest within a period of two years
from the date on which the goods were actually handed over to the buyer,
unless this time-limit is inconsistent with a contractual period of guarantee.
Article 40
The seller is not entitled to rely on the
provisions of articles 38 and 39 if the lack of conformity relates to facts of
which he knew or could not have been unaware and which he did not disclose to
the buyer.
Article 41
The seller must deliver goods which are free from
any right or claim of a third party, unless the buyer agreed to take the goods
subject to that right or claim. However, if such right or claim is based on
industrial property or other intellectual property, the seller’s
obligation is governed by article 42.
Article 42
(1) The seller must
deliver goods which are free from any right or claim of a third party based on
industrial property or other intellectual property, of which at the time of
the conclusion of the contract the seller knew or could not have been unaware,
provided that the right or claim is based on industrial property or other
intellectual property:
(a)
under the law of the State where the goods will be resold or otherwise used,
if it was contemplated by the parties at the time of the conclusion of the
contract that the goods would be resold or otherwise used in that State; or
(b) in
any other case, under the law of the State where the buyer has his place of
business.
(2) The obligation of
the seller under the preceding paragraph does not extend to cases where:
(a) at
the time of the conclusion of the contract the buyer knew or could not have
been unaware of the right or claim; or
(b) the
right or claim results from the seller’s compliance with technical
drawings, designs, formulae or other such specifications furnished by the
buyer.
Article 43
(1) The buyer loses
the right to rely on the provisions of article 41 or article 42 if he does not
give notice to the seller specifying the nature of the right or claim of the
third party within a reasonable time after he has become aware or ought to
have become aware of the right or claim.
(2) The seller is not
entitled to rely on the provisions of the preceding paragraph if he knew of
the right or claim of the third party and the nature of it.
Article 44
Notwithstanding the provisions of
paragraph (1) of article 39 and paragraph (1) of article 43, the
buyer may reduce the price in accordance with article 50 or claim damages,
except for loss of profit, if he has a reasonable excuse for his failure to
give the required notice.
Section III. Remedies for breach of contract by the seller
Article 45
(1) If the seller
fails to perform any of his obligations under the contract or this Convention,
the buyer may:
(a)
exercise the rights provided in articles 46 to 52;
(b)
claim damages as provided in articles 74 to 77.
(2) The buyer is not
deprived of any right he may have to claim damages by exercising his right to
other remedies.
(3) No period of grace
may be granted to the seller by a court or arbitral tribunal when the buyer
resorts to a remedy for breach of contract.
Article 46
(1) The buyer may
require performance by the seller of his obligations unless the buyer has
resorted to a remedy which is inconsistent with this requirement.
(2) If the goods do
not conform with the contract, the buyer may require delivery of substitute
goods only if the lack of conformity constitutes a fundamental breach of
contract and a request for substitute goods is made either in conjunction with
notice given under article 39 or within a reasonable time thereafter.
(3) If the goods do
not conform with the contract, the buyer may require the seller to remedy the
lack of conformity by repair, unless this is unreasonable having regard to all
the circumstances. A request for repair must be made either in conjunction
with notice given under article 39 or within a reasonable time thereafter.
Article 47
(1) The buyer may fix
an additional period of time of reasonable length for performance by the
seller of his obligations.
(2) Unless the buyer
has received notice from the seller that he will not perform within the period
so fixed, the buyer may not, during that period, resort to any remedy for
breach of contract. However, the buyer is not deprived thereby of any right he
may have to claim damages for delay in performance.
Article 48
(1) Subject to article
49, the seller may, even after the date for delivery, remedy at his own
expense any failure to perform his obligations, if he can do so without
unreasonable delay and without causing the buyer unreasonable inconvenience or
uncertainty of reimbursement by the seller of expenses advanced by the buyer.
However, the buyer retains any right to claim damages as provided for in this
Convention.
(2) If the seller
requests the buyer to make known whether he will accept performance and the
buyer does not comply with the request within a reasonable time, the seller
may perform within the time indicated in his request. The buyer may not,
during that period of time, resort to any remedy which is inconsistent with
performance by the seller.
(3) A notice by the
seller that he will perform within a specified period of time is assumed to
include a request, under the preceding paragraph, that the buyer make known
his decision.
(4) A request or
notice by the seller under paragraph (2) or (3) of this article is not
effective unless received by the buyer.
Article 49
(1) The buyer may
declare the contract avoided:
(a) if
the failure by the seller to perform any of his obligations under the contract
or this Convention amounts to a fundamental breach of contract; or
(b) in
case of non-delivery, if the seller does not deliver the goods within the
additional period of time fixed by the buyer in accordance with
paragraph (1) of article 47 or declares that he will not deliver within
the period so fixed.
(2) However, in cases
where the seller has delivered the goods, the buyer loses the right to declare
the contract avoided unless he does so:
(a) in
respect of late delivery, within a reasonable time after he has become aware
that delivery has been made;
(b) in
respect of any breach other than late delivery, within a reasonable time:
(i) after he knew or ought to have
known of the breach;
(ii) after the expiration of any
additional period of time fixed by the buyer in accordance with
paragraph (1) of article 47, or after the seller has declared that he
will not perform his obligations within such an additional period; or
(iii) after the expiration of any
additional period of time indicated by the seller in accordance with
paragraph (2) of article 48, or after the buyer has declared that he will
not accept performance.
Article 50
If the goods do not conform with the contract and
whether or not the price has already been paid, the buyer may reduce the price
in the same proportion as the value that the goods actually delivered had at
the time of the delivery bears to the value that conforming goods would have
had at that time. However, if the seller remedies any failure to perform his
obligations in accordance with article 37 or article 48 or if the buyer
refuses to accept performance by the seller in accordance with those articles,
the buyer may not reduce the price.
Article 51
(1) If the seller
delivers only a part of the goods or if only a part of the goods delivered is
in conformity with the contract, articles 46 to 50 apply in respect of the
part which is missing or which does not conform.
(2) The buyer may
declare the contract avoided in its entirety only if the failure to make
delivery completely or in conformity with the contract amounts to a
fundamental breach of the contract.
Article 52
(1) If the seller
delivers the goods before the date fixed, the buyer may take delivery or
refuse to take delivery.
(2) If the seller
delivers a quantity of goods greater than that provided for in the contract,
the buyer may take delivery or refuse to take delivery of the excess quantity.
If the buyer takes delivery of all or part of the excess quantity, he must pay
for it at the contract rate.
CHAPTER III — OBLIGATIONS OF THE BUYER
Article 53
The buyer must pay the price for the goods and
take delivery of them as required by the contract and this Convention.
Section I. Payment of the price
Article 54
The buyer’s obligation to pay the price
includes taking such steps and complying with such formalities as may be
required under the contract or any laws and regulations to enable payment to
be made.
Article 55
Where a contract has been validly concluded but
does not expressly or implicitly fix or make provision for determining the
price, 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 sold under
comparable circumstances in the trade concerned.
Article 56
If the price is fixed according to the weight of
the goods, in case of doubt it is to be determined by the net weight.
Article 57
(1) If the buyer is
not bound to pay the price at any other particular place, he must pay it to
the seller:
(a) at
the seller’s place of business; or
(b) if
the payment is to be made against the handing over of the goods or of
documents, at the place where the handing over takes place.
(2) 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.
Article 58
(1) If the buyer is
not bound to pay the price at any other specific time, he must pay it when the
seller places either the goods or documents controlling their disposition at
the buyer’s disposal in accordance with the contract and this
Convention. The seller may make such payment a condition for handing over the
goods or documents.
(2) If the contract
involves carriage of the goods, the seller may dispatch the goods on terms
whereby the goods, or documents controlling their disposition, will not be
handed over to the buyer except against payment of the price.
(3) The buyer is not
bound to pay the price until he has had an opportunity to examine the goods,
unless the procedures for delivery or payment agreed upon by the parties are
inconsistent with his having such an opportunity.
Article 59
The buyer must pay the price on the date fixed by
or determinable from the contract and this Convention without the need for any
request or compliance with any formality on the part of the seller.
Section II. Taking delivery
Article 60
The buyer’s obligation to take delivery
consists:
(a) in
doing all the acts which could reasonably be expected of him in order to
enable the seller to make delivery; and
(b) in
taking over the goods.
Section III. Remedies for breach of contract by the buyer
Article 61
(1) If the buyer fails
to perform any of his obligations under the contract or this Convention, the
seller may:
(a)
exercise the rights provided in articles 62 to 65;
(b)
claim damages as provided in articles 74 to 77.
(2) The seller is not
deprived of any right he may have to claim damages by exercising his right to
other remedies.
(3) No period of grace
may be granted to the buyer by a court or arbitral tribunal when the seller
resorts to a remedy for breach of contract.
Article 62
The seller may require the buyer to pay the price,
take delivery or perform his other obligations, unless the seller has resorted
to a remedy which is inconsistent with this requirement.
Article 63
(1) The seller may fix
an additional period of time of reasonable length for performance by the buyer
of his obligations.
(2) Unless the seller
has received notice from the buyer that he will not perform within the period
so fixed, the seller may not, during that period, resort to any remedy for
breach of contract. However, the seller is not deprived thereby of any right
he may have to claim damages for delay in performance.
Article 64
(1) The seller may
declare the contract avoided:
(a) if
the failure by the buyer to perform any of his obligations under the contract
or this Convention amounts to a fundamental breach of contract; or
(b) if
the buyer does not, within the additional period of time fixed by the seller
in accordance with paragraph (1) of article 63, perform his obligation to
pay the price or take delivery of the goods, or if he declares that he will
not do so within the period so fixed.
(2) However, in cases
where the buyer has paid the price, the seller loses the right to declare the
contract avoided unless he does so:
(a) in
respect of late performance by the buyer, before the seller has become aware
that performance has been rendered; or
(b) in
respect of any breach other than late performance by the buyer, within a
reasonable time:
(i) after the seller knew or ought
to have known of the breach; or
(ii) after the expiration of any
additional period of time fixed by the seller in accordance with
paragraph (1) of article 63, or after the buyer has declared that he will
not perform his obligations within such an additional period.
Article 65
(1) If under the
contract the buyer is to specify the form, measurement or other features of
the goods and he fails to make such specification either on the date agreed
upon or within a reasonable time after receipt of a request from the seller,
the seller may, without prejudice to any other rights he may have, make the
specification himself in accordance with the requirements of the buyer that
may be known to him.
(2) If the seller
makes the specification himself, he must inform the buyer of the details
thereof and must fix a reasonable time within which the buyer may make a
different specification. If, after receipt of such a communication, the buyer
fails to do so within the time so fixed, the specification made by the seller
is binding.
CHAPTER IV — PASSING OF RISK
Article 66
Loss of or damage to the goods after the risk has
passed to the buyer does not discharge him from his obligation to pay the
price, unless the loss or damage is due to an act or omission of the seller.
Article 67
(1) If the contract of
sale involves carriage of the goods and the seller is not bound to hand them
over at a particular place, the risk passes to the buyer when the goods are
handed over to the first carrier for transmission to the buyer in accordance
with the contract of sale. If the seller is bound to hand the goods over to a
carrier at a particular place, 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 the risk.
(2) Nevertheless, the
risk does not pass to the buyer until the goods are clearly identified to the
contract, whether by markings on the goods, by shipping documents, by notice
given to the buyer or otherwise.
Article 68
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.
Article 69
(1) In cases not
within articles 67 and 68, the risk passes to the buyer when he takes over the
goods or, if he does not do so in due time, from the time when the goods are
placed at his disposal and he commits a breach of contract by failing to take
delivery.
(2) However, if the
buyer is bound to take over the goods at a place other than a place of
business of the seller, the risk passes when delivery is due and the buyer is
aware of the fact that the goods are placed at his disposal at that place.
(3) If the contract
relates to goods not then identified, the goods are considered not to be
placed at the disposal of the buyer until they are clearly identified to the
contract.
Article 70
If the seller has committed a fundamental breach
of contract, articles 67, 68 and 69 do not impair the remedies available to
the buyer on account of the breach.
CHAPTER V — PROVISIONS COMMON TO THE OBLIGATIONS
OF THE SELLER AND OF THE BUYER
Section I. Anticipatory breach and instalment contracts
Article 71
(1) A party may
suspend the performance of his obligations if, after the conclusion of the
contract, it becomes apparent that the other party will not perform a
substantial part of his obligations as a result of:
(a) a
serious deficiency in his ability to perform or in his creditworthiness; or
(b) his
conduct in preparing to perform or in performing the contract.
(2) If the seller has
already dispatched the goods before the grounds described in the preceding
paragraph become evident, he may prevent the handing over of the goods to the
buyer even though the buyer holds a document which entitles him to obtain
them. The present paragraph relates only to the rights in the goods as between
the buyer and the seller.
(3) A party suspending
performance, whether before or after dispatch of the goods, must immediately
give notice of the suspension to the other party and must continue with
performance if the other party provides adequate assurance of his performance.
Article 72
(1) If prior to the
date for performance of the contract it is clear that one of the parties will
commit a fundamental breach of contract, the other party may declare the
contract avoided.
(2) If time allows,
the party intending to declare the contract avoided must give reasonable
notice to the other party in order to permit him to provide adequate assurance
of his performance.
(3) The requirements
of the preceding paragraph do not apply if the other party has declared that
he will not perform his obligations.
Article 73
(1) In the case of a
contract for delivery of goods by instalments, if the failure of one party to
perform any of his obligations in respect of any instalment constitutes a
fundamental breach of contract with respect to that instalment, the other
party may declare the contract avoided with respect to that instalment.
(2) If one
party’s failure to perform any of his obligations in respect of any
instalment gives the other party good grounds to conclude that a fundamental
breach of contract will occur with respect to future instalments, he may
declare the contract avoided for the future, provided that he does so within a
reasonable time.
(3) A buyer who
declares the contract avoided in respect of any delivery may, at the same
time, declare it avoided in respect of deliveries already made or of future
deliveries if, by reason of their interdependence, those deliveries could not
be used for the purpose contemplated by the parties at the time of the
conclusion of the contract.
Section II. Damages
Article 74
Damages for breach of contract by one party
consist of a sum equal to the loss, including loss of profit, suffered by the
other party as a consequence of the breach. Such damages may not exceed the
loss which the party in breach foresaw or ought to have foreseen at the time
of the conclusion of the contract, in the light of the facts and matters of
which he then knew or ought to have known, as a possible consequence of the
breach of contract.
Article 75
If the contract is avoided and if, in a reasonable
manner and within a reasonable time after avoidance, the buyer has bought
goods in replacement or the seller has resold the goods, the party claiming
damages may recover the difference between the contract price and the price in
the substitute transaction as well as any further damages recoverable under
article 74.
Article 76
(1) If the contract is
avoided and there is a current price for the goods, the party claiming damages
may, if he has not made a purchase or resale under article 75, recover the
difference between the price fixed by the contract and the current price at
the time of avoidance as well as any further damages recoverable under article
74. If, however, the party claiming damages has avoided the contract after
taking over the goods, the current price at the time of such taking over shall
be applied instead of the current price at the time of avoidance.
(2) For the purposes
of the preceding paragraph, the current price is the price prevailing at the
place where delivery of the goods should have been made or, if there is no
current price at that place, the price at such other place as serves as a
reasonable substitute, making due allowance for differences in the cost of
transporting the goods.
Article 77
A party who relies on a breach of contract must
take such measures as are reasonable in the circumstances to mitigate the
loss, including loss of profit, resulting from the breach. If he fails to take
such measures, the party in breach may claim a reduction in the damages in the
amount by which the loss should have been mitigated.
Section III. Interest
Article 78
If a party fails to pay the price or any other sum
that is in arrears, the other party is entitled to interest on it, without
prejudice to any claim for damages recoverable under article 74.
Section IV. Exemptions
Article 79
(1) A party is not
liable for a failure to perform any of his obligations if he proves that the
failure was due to an impediment beyond his control and that he could not
reasonably be expected to have taken the impediment into account at the time
of the conclusion of the contract or to have avoided or overcome it, or its
consequences.
(2) If the
party’s failure is due to the failure by a third person whom he has
engaged to perform the whole or a part of the contract, that party is exempt
from liability only if:
(a) he
is exempt under the preceding paragraph; and
(b) the
person whom he has so engaged would be so exempt if the provisions of that
paragraph were applied to him.
(3) The exemption
provided by this article has effect for the period during which the impediment
exists.
(4) The party who
fails to perform must give notice to the other party of the impediment and its
effect on his ability to perform. If the notice is not received by the other
party within a reasonable time after the party who fails to perform knew or
ought to have known of the impediment, he is liable for damages resulting from
such non-receipt.
(5) Nothing in this
article prevents either party from exercising any right other than to claim
damages under this Convention.
Article 80
A party may not rely on a failure of the other
party to perform, to the extent that such failure was caused by the first
party’s act or omission.
Section V. Effects of avoidance
Article 81
(1) Avoidance of the
contract releases both parties from their obligations under it, subject to any
damages which may be due. Avoidance does not affect any provision of the
contract for the settlement of disputes or any other provision of the contract
governing the rights and obligations of the parties consequent upon the
avoidance of the contract.
(2) A party who has
performed the contract either wholly or in part may claim restitution from the
other party of whatever the first party has supplied or paid under the
contract. If both parties are bound to make restitution, they must do so
concurrently.
Article 82
(1) The buyer loses
the right to declare the contract avoided or to require the seller to deliver
substitute goods if it is impossible for him to make restitution of the goods
substantially in the condition in which he received them.
(2) The preceding
paragraph does not apply:
(a) if
the impossibility of making restitution of the goods or of making restitution
of the goods substantially in the condition in which the buyer received them
is not due to his act or omission;
(b) if
the goods or part of the goods have perished or deteriorated as a result of
the examination provided for in article 38; or
(c) if
the goods or part of the goods have been sold in the normal course of business
or have been consumed or transformed by the buyer in the course of normal use
before he discovered or ought to have discovered the lack of conformity.
Article 83
A buyer who has lost the right to declare the
contract avoided or to require the seller to deliver substitute goods in
accordance with article 82 retains all other remedies under the contract and
this Convention.
Article 84
(1) If the seller is
bound to refund the price, he must also pay interest on it, from the date on
which the price was paid.
(2) The buyer must
account to the seller for all benefits which he has derived from the goods or
part of them:
(a) if
he must make restitution of the goods or part of them; or
(b) if
it is impossible for him to make restitution of all or part of the goods or to
make restitution of all or part of the goods substantially in the condition in
which he received them, but he has nevertheless declared the contract avoided
or required the seller to deliver substitute goods.
Section VI. Preservation of the goods
Article 85
If the buyer is in delay in taking delivery of the
goods or, where payment of the price and delivery of the goods are to be made
concurrently, if he fails to pay the price, and the seller is either in
possession of the goods or otherwise able to control their disposition, the
seller must take such steps as are reasonable in the circumstances to preserve
them. He is entitled to retain them until he has been reimbursed his
reasonable expenses by the buyer.
Article 86
(1) If the buyer has
received the goods and intends to exercise any right under the contract or
this Convention to reject them, he must take such steps to preserve them as
are reasonable in the circumstances. He is entitled to retain them until he
has been reimbursed his reasonable expenses by the seller.
(2) If goods
dispatched to the buyer have been placed at his disposal at their destination
and he exercises the right to reject them, he must take possession of them on
behalf of the seller, provided that this can be done without payment of the
price and without unreasonable inconvenience or unreasonable expense. This
provision does not apply if the seller or a person authorized to take charge
of the goods on his behalf is present at the destination. If the buyer takes
possession of the goods under this paragraph, his rights and obligations are
governed by the preceding paragraph.
Article 87
A party who is bound to take steps to preserve the
goods may deposit them in a warehouse of a third person at the expense of the
other party provided that the expense incurred is not unreasonable.
Article 88
(1) A party who is
bound to preserve the goods in accordance with article 85 or 86 may sell them
by any appropriate means if there has been an unreasonable delay by the other
party in taking possession of the goods or in taking them back or in paying
the price or the cost of preservation, provided that reasonable notice of the
intention to sell has been given to the other party.
(2) If the goods are
subject to rapid deterioration or their preservation would involve
unreasonable expense, a party who is bound to preserve the goods in accordance
with article 85 or 86 must take reasonable measures to sell them. To the
extent possible he must give notice to the other party of his intention to
sell.
(3) A party selling
the goods has the right to retain out of the proceeds of sale an amount equal
to the reasonable expenses of preserving the goods and of selling them. He
must account to the other party for the balance.
PART IV — FINAL PROVISIONS
Article 89
The Secretary-General of the United Nations is
hereby designated as the depositary for this Convention.
Article 90
This Convention does not prevail over any
international agreement which has already been or may be entered into and
which contains provisions concerning the matters governed by this Convention,
provided that the parties have their places of business in States parties to
such agreement.
Article 91
(1) This Convention is
open for signature at the concluding meeting of the United Nations Conference
on Contracts for the International Sale of Goods and will remain open for
signature by all States at the Headquarters of the United Nations, New York
until 30 September 1981.
(2) This Convention is
subject to ratification, acceptance or approval by the signatory States.
(3) This Convention is
open for accession by all States which are not signatory States as from the
date it is open for signature.
(4) Instruments of
ratification, acceptance, approval and accession are to be deposited with the
Secretary-General of the United Nations.
Article 92
(1) A Contracting
State may declare at the time of signature, ratification, acceptance, approval
or accession that it will not be bound by Part II of this Convention or that
it will not be bound by Part III of this Convention.
(2) A Contracting
State which makes a declaration in accordance with the preceding paragraph in
respect of Part II or Part III of this Convention is not to be considered a
Contracting State within paragraph (1) of article 1 of this Convention in
respect of matters governed by the Part to which the declaration applies.
Article 93
(1) If a Contracting
State has two or more territorial units in which, according to its
constitution, different systems of law are applicable in relation to the
matters dealt with in this Convention, it may, at the time of signature,
ratification, acceptance, approval or accession, declare that this Convention
is to extend to all its territorial units or only to one or more of them, and
may amend its declaration by submitting another declaration at anytime.
(2) These declarations
are to be notified to the depositary and are to state expressly the
territorial units to which the Convention extends.
(3) If, by virtue of a
declaration under this article, this Convention extends to one or more but not
all of the territorial units of a Contracting State, and if the place of
business of a party is located in that State, this place of business, for the
purposes of this Convention, is considered not to be in a Contracting State,
unless it is in a territorial unit to which the Convention extends.
(4) If a Contracting
State makes no declaration under paragraph (1) of this article, the
Convention is to extend to all territorial units of that State.
Article 94
(1) Two or more
Contracting States which have the same or closely related legal rules on
matters governed by this Convention may at any time declare that the
Convention is not to apply to contracts of sale or to their formation where
the parties have their places of business in those States. Such declarations
may be made jointly or by reciprocal unilateral declarations.
(2) A Contracting
State which has the same or closely related legal rules on matters governed by
this Convention as one or more non-Contracting States may at any time declare
that the Convention is not to apply to contracts of sale or to their formation
where the parties have their places of business in those States.
(3) If a State which
is the object of a declaration under the preceding paragraph subsequently
becomes a Contracting State, the declaration made will, as from the date on
which the Convention enters into force in respect of the new Contracting
State, have the effect of a declaration made under paragraph (1),
provided that the new Contracting State joins in such declaration or makes a
reciprocal unilateral declaration.
Article 95
Any State may declare at the time of the deposit
of its instrument of ratification, acceptance, approval or accession that it
will not be bound by subparagraph (1) (b) of article 1 of this
Convention.
Article 96
A Contracting State whose legislation requires
contracts of sale to be concluded in or evidenced by writing may at any time
make a declaration in accordance with article 12 that any provision of article
11, article 29, or Part II of this Convention, that allows a contract of sale
or its modification or termination by agreement or any offer, acceptance, or
other indication of intention to be made in any form other than in writing,
does not apply where any party has his place of business in that State.
Article 97
(1) Declarations made
under this Convention at the time of signature are subject to confirmation
upon ratification, acceptance or approval.
(2) Declarations and
confirmations of declarations are to be in writing and be formally notified to
the depositary.
(3) A declaration
takes effect simultaneously with the entry into force of this Convention in
respect of the State concerned. However, a declaration of which the depositary
receives formal notification after such entry into force takes effect on the
first day of the month following the expiration of six months after the date
of its receipt by the depositary. Reciprocal unilateral declarations under
article 94 take effect on the first day of the month following the expiration
of six months after the receipt of the latest declaration by the depositary.
(4) Any State which
makes a declaration under this Convention may withdraw it at any time by a
formal notification in writing addressed to the depositary. Such withdrawal is
to take effect on the first day of the month following the expiration of six
months after the date of the receipt of the notification by the depositary.
(5) A withdrawal of a
declaration made under article 94 renders inoperative, as from the date on
which the withdrawal takes effect, any reciprocal declaration made by another
State under that article.
Article 98
No reservations are permitted except those
expressly authorized in this Convention.
Article 99
(1) This Convention
enters into force, subject to the provisions of paragraph (6) of this
article, on the first day of the month following the expiration of twelve
months after the date of deposit of the tenth instrument of ratification,
acceptance, approval or accession, including an instrument which contains a
declaration made under article 92.
(2) When a State
ratifies, accepts, approves or accedes to this Convention after the deposit of
the tenth instrument of ratification, acceptance, approval or accession, this
Convention, with the exception of the Part excluded, enters into force in
respect of that State, subject to the provisions of paragraph (6) of this
article, on the first day of the month following the expiration of twelve
months after the date of the deposit of its instrument of ratification,
acceptance, approval or accession.
(3) A State which
ratifies, accepts, approves or accedes to this Convention and is a party to
either or both the Convention relating to a Uniform Law on the Formation of
Contracts for the International Sale of Goods done at The Hague on
1 July 1964 (1964 Hague Formation Convention) and the Convention
relating to a Uniform Law on the International Sale of Goods done at The Hague
on 1 July 1964 (1964 Hague Sales Convention) shall at the same time
denounce, as the case may be, either or both the 1964 Hague Sales Convention
and the 1964 Hague Formation Convention by notifying the Government of the
Netherlands to that effect.
(4) A State party to
the 1964 Hague Sales Convention which ratifies, accepts, approves or accedes
to the present Convention and declares or has declared under article 92 that
it will not be bound by Part II of this Convention shall at the time of
ratification, acceptance, approval or accession denounce the 1964 Hague Sales
Convention by notifying the Government of the Netherlands to that effect.
(5) A State party to
the 1964 Hague Formation Convention which ratifies, accepts, approves or
accedes to the present Convention and declares or has declared under article
92 that it will not be bound by Part III of this Convention shall at the time
of ratification, acceptance, approval or accession denounce the 1964 Hague
Formation Convention by notifying the Government of the Netherlands to that
effect.
(6) For the purpose of
this article, ratifications, acceptances, approvals and accessions in respect
of this Convention by States parties to the 1964 Hague Formation Convention or
to the 1964 Hague Sales Convention shall not be effective until such
denunciations as may be required on the part of those States in respect of the
latter two Conventions have themselves become effective. The depositary of
this Convention shall consult with the Government of the Netherlands, as the
depositary of the 1964 Conventions, so as to ensure necessary co-ordination in
this respect.
Article 100
(1) This Convention
applies to the formation of a contract only when the proposal for concluding
the contract is made on or after the date when the Convention enters into
force in respect of the Contracting States referred to in
subparagraph (1) (a) or the Contracting State referred to in
subparagraph (1) (b) of article 1.
(2) This Convention
applies only to contracts concluded on or after the date when the Convention
enters into force in respect of the Contracting States referred to in
subparagraph (1) (a) or the Contracting State referred to in
subparagraph (1) (b) of article 1.
Article 101
(1) A Contracting
State may denounce this Convention, or Part II or Part III of the Convention,
by a formal notification in writing addressed to the depositary.
(2) The denunciation
takes effect on the first day of the month following the expiration of twelve
months after the notification is received by the depositary. Where a longer
period for the denunciation to take effect is specified in the notification,
the denunciation takes effect upon the expiration of such longer period after
the notification is received by the depositary.
DONE at Vienna, this day of eleventh day of April, one thousand nine hundred
and eighty, in a single original, of which the Arabic, Chinese, English,
French, Russian and Spanish texts are equally authentic.
IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized by
their respective Governments, have signed this Convention.