CISG Comprehensive Lecture Notes – Doctor Dawood

CISG applies to contracts for the international sale of goods when the parties’ places of business are in different Contracting States, or one state & private-international-law leads to CISG (Art. 1).
Excluded matters (Art. 2): consumer sales, auctions, stocks/shares, vessels, electricity, etc.
Mixed contracts (goods + services): apply CISG only if the preponderant part of obligations is the sale of goods (Art. 3).
Matters outside CISG (Art. 4): validity and property in goods governed by domestic law.
Party autonomy (Art. 6): parties may
- Exclude CISG entirely;
- Choose CISG as governing law even if it would not apply automatically;
- Derogate from or vary individual provisions.
Interpretation (Art. 7-9)
- Promote international character & uniformity; use CISG’s general principles first, otherwise private international law.
- Look at parties’ intent (subjective then objective) & trade usages/practices.

Offer must be sufficiently definite (goods, quantity, price) & indicate intent to be bound (Art. 14).
Acceptance effective on reaching offeror (Art. 18); silence ≠ acceptance.
Counter-offer (Art. 19)
- Reply that purports to be acceptance but contains material alterations = counter-offer.
- Art. 19(3) list of material terms: price, payment, quality, quantity, place/time of delivery, extent of liability, dispute settlement.

US Buyer v Mexican Seller (3 000 t petrochemicals)
- Telephone agreement; seller later awaited terminal confirmation then demanded higher price.
- Court: no contract; seller never accepted offer (Art. 19(3)), CISG applied (Art. 1) because both contracting states.
Swedish Buyer v Chinese Seller (10 000 t rapeseed, FOB)
- Buyer amended two clauses (vessel age & “freight paid” wording).
- Tribunal: changes not material; valid contract (Art. 19). Risk already FOB with buyer, so amendments did not burden seller.
- Buyer recovered cover price difference (Art. 75) + interest (Art. 78).

Fundamental breach (Art. 25): deprivation of what the other party is entitled to expect & foreseeable.
Avoidance requires notice (Art. 26).
Dispatch rule (Art. 27): if party uses an appropriate means, delay/loss of communication does not deprive rights.
Specific performance (Art. 28): court may refuse if domestic law would not grant it.
Modification/Termination (Art. 29): form-free unless parties or reservation require writing (cf. Art. 11).

Must deliver goods, hand over documents & transfer property (Art. 30).
Place of delivery (Art. 31)
- If carriage: hand-over to first carrier.
- If specific goods known to be at a place: place them at buyer’s disposal there.
- Otherwise: seller’s place of business.
- Always read together with chosen Incoterms.
Ancillary duties (Art. 32): identify goods, arrange carriage reasonably, provide insurance info.
Time of delivery (Art. 33): on fixed date, within agreed period, or within reasonable time.
Documents & right to cure (Art. 34): seller may remedy defects in documents before due date; buyer retains right to damages.

Conformity (Art. 35)
- Goods must fit description, quantity, quality, packaging & be fit for ordinary and any stated purpose.
- Buyer’s knowledge of defect limits liability.
Liability extends to defects existing when risk passes (Art. 36). Later defects liable if due to seller’s breach.
Buyer’s duties
- Examine goods within as short a period as practicable (Art. 38).
- Give specific notice of lack of conformity within reasonable time & max 2 years from delivery (Art. 39).
Exception (Art. 40): seller who knew or could not have been unaware of defect cannot rely on Arts 38-39.
Third-party rights (Art. 41-44)
- Goods free from rights/claims incl. IP (Art. 42).
- Buyer must notify within reasonable time (Art. 43) unless seller knew.
- Art. 44 allows price reduction & damages (except lost profit) if reasonable excuse for late notice.

May:
- Require performance (Art. 46).
- Fix Nachfrist (additional time) (Art. 47).
- Declare avoidance for fundamental breach or failure to perform within Nachfrist (Art. 49).
- Price reduction proportional to lack of conformity (Art. 50).
- Claim damages (Arts 74-77) & interest (Art. 78).
Early delivery / excess quantity (Art. 52): buyer may reject or accept & pay pro-rata.

Pay price & take delivery.
Payment rules
- Amount: as fixed or determinable (Art. 55-56).
- Place: seller’s place of business unless payment concurrent with handover (Art. 57).
- Time: as stipulated or on delivery; no request needed (Art. 59).
Take delivery (Art. 60)
- Perform acts needed to enable delivery: import licences, nominate vessel (FOB), give readiness notice, provide access, etc.

May require payment (Art. 62) & other buyer obligations.
May give Nachfrist (Art. 63).
Avoidance for fundamental breach or failure to perform within Nachfrist (Art. 64).
Damages, interest, preservation costs analogous to buyer’s remedies.
If buyer fails to specify form, measurement etc., seller may fix own reasonable specification after notice (Art. 65).

Carriage contract (Art. 67): risk passes when goods handed to first carrier, provided goods are clearly identified.
Goods sold in transit (Art. 68): risk passes at conclusion of contract, but stays with seller if he knew of damage.
Non-carriage situations (Art. 69)
- If buyer to take goods at seller’s place, risk passes when buyer takes over or when due & buyer fails to take.
Breach influence (Art. 70): fundamental breach by seller preserves buyer’s remedies even after risk passes.
Always coordinate with chosen Incoterms (EXW, FOB, CIF, etc.).

Anticipatory breach & suspension (Art. 71-73).
Interest (Art. 78): simple, rate by domestic law.
Mitigation duty (Art. 77).
Preservation of goods by non-breaching party; right to sell perishable goods (Arts 85-88).
Declarations/reservations (Art. 92-96): some states require written form (Art. 96), or exclude Part II/III.

Step-by-step analysis:
1. Does CISG apply? Mention Art. 1 & any reservation (Art. 95/96).
2. Identify obligations breached & corresponding articles.
3. Check whether breach is fundamental (Art. 25) → avoidance rights.
4. Has proper notice been given? Apply Arts 38-40, 26-27.
5. Determine remedies: performance, avoidance, price reduction, damages, interest.
6. Consider risk passage & Incoterms for damage claims.
Use case law (CLOUT, UNILEX) for persuasive authority; cite country + date if possible.
Remember dispatch rule (Art. 27) protects sender using appropriate means.
Specific performance may be refused in common-law jurisdictions (Art. 28).
For price reduction formula: $\text{Reduced Price} = \text{Contract Price} \times \frac{\text{Value conforming goods}}{\text{Value delivered goods}}$ (Art. 50).