Q 30-1
Compare and contrast the four delivery obligations under INCOTERMS® above. What is the significance of ‘delivery’ in each context for the obligations of the seller?
EXW constitutes the minimum delivery obligation of the seller, whereby it is required to make the goods available, but not to load them onto a particular form of transport.
Under FOB, the seller has to deliver the goods on board the ship nominated by the buyer or ensure that the goods are delivered in this way, complying with the agreed date, or a time within the agreed period, or if no such time is agreed, at the end of the agreed period, and in the manner customary at the port.
Under DAP which replaced DAT, the seller is to make the goods available on arriving means of transport ready for unloading at the agreed point, if any, at their place of destination. This obligation is more onerous than under EXW or FOB and bears the risk of the goods during transport, but does not bear the risk of unloading.
DPU, on the other hand, requires the seller to also unload the goods from the arriving means of transport and to make them available at the agreed point, if any, at the named place of destination. Out of the four delivery obligations, this one places the most onus and risk on the seller.
Q 30-2
(a) Outline the main differences in the documents required under CIF and those required under DDP.
(b) List any other documents which may be relevant in an international sales contract.
(a) Under CIF; the seller must arrange cargo insurance at its own cost from an insurance company of good repute and provide the buyer with the evidence of such insurance cover. Additionally, the seller must entitle the buyer to claim directly from the insurer. In addition, the seller must, at its own costs, provide and hand over the usual transport document to the buyer.
Under DDP, the delivery document is defined by cross-reference to the nature of delivery. The seller is also under an obligation to provide the buyer with any documents and information needed for the transport of goods to the final destination from the named place of destination, and to bear the charges of unloading, duties, taxes and other costs.
(b) Documents certifying origin, certificates for the clearance of customs, inspections etc. All documents that will enable the buyer to take over the goods at the agreed place.
Q 30-3
(a) When does title pass to the buyer according to these domestic legal rules?
(b) Which systems recognise a property transfer through the mere conclusion of a contract, and which require the actual handing over of the goods?
(c) What system of property transfer does the US legal system apply?
(a), (b) and (c): Under English law, title passes at the time the contract is made with respect to specific goods, and at the time goods are unconditionally appropriated to the contract in the case of unascertained goods.
Under US law, title passes when the seller completes its delivery obligation. The extent of the delivery obligation depends on the provisions of the contract.
German law requires consensus and that the goods are handed over to the buyer.
Under French law, title passes on agreement.
Q 30-4
What are the three main obligations of the seller under Article 30 CISG, and how do they relate to the facts of the case summarised above?
The seller has three main obligations:
- Deliver the goods as required by the contract and the Convention.
- Hand over any documents relating to the goods.
- Transfer the property in the goods to the buyer.
The seller in C 30-1 had failed to prove that it delivered the goods as required.
Q 30-5
(a) In what ways did the court in C 30-1 determine whether the seller had fulfilled its delivery obligation under Article 30, and what evidence was considered crucial?
(b) Who bears the burden of proof for delivery and why?
(a) and (b): As the seller had used a carrier for delivery, the crucial documentation was the document allegedly showing fulfilment of delivery. However, as the document did not clarify whether the whole or only part of the delivery took place, the court determined that the seller failed or at least could not prove delivery.
The seller bears the burden of proof as it is its obligation, and a successful discharge of this obligation transfers the risk of loss of or damage to the goods.
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