Q 35-1

(a) Article 35 CISG is clearly based on common law principles. There is no distinction between peius and aliud. Rather, the distinction between ordinary purpose and particular purpose can be found in Article 35(2)(a) and (b) CISG. Furthermore, the requirements relating to packaging clearly have been influenced by § 2-314(2)(e) UCC.

(b) Many legal systems still draw a subtle distinction between a so-called peius (inferior quality) and an aliud (different goods). Different rules apply to each category. Packaging is usually not dealt with under conformity of the goods but is regarded as an additional duty also leading to a different liability scheme. The same holds true for defects in quantity which are regarded as partial non-delivery. There is a certain danger that national courts still hold on to these well-known domestic distinctions which would heavily undermine the unification purposes of the CISG.

(a) § 434 BGB was modelled on Article 35 CISG.

(b) Similarities: Basis for conformity is the contract, furthermore fitness for ordinary or particular purpose. Defects in packaging (since the 2022 reform). No distinction between peius and aliud, nor between non-conformity and defects in quantity.

Q 35-3

Compare the provisions of the PRC CC relating to the conformity of the goods with other domestic provisions and Article 35 CISG. Explain the similarities and differences.

Similarities: Primary source for quality specifications is the contract. Packaging is also part of conformity.

Differences: If no quality specifications can be found in the contract, conformity is to be determined through gap filling according to Articles 510, 511(1) PRC CC. The hierarchy then is subsequent agreement, usage, state or industry standard, and only in the last resort customary standard or particular purpose.

The parties’ statements have to be interpreted under Article 8 CISG. Thereby, regard is to be had to the respective position of the parties. In the case at hand, relevance was given to what a professional buyer may expect under the contract.

(a) Buyer did not receive certificates of origin.

(b) Quality required under the contract.

Articles 38 and 39 CISG only apply in case of non-conforming delivery. Furthermore, the buyer could claim specific performance under Article 46(1) CISG without the restrictions contained in Article 46(2), (3) CISG.

(a) The Italian Supreme Court follows a different understanding about the relationship between paras (1) and (2) of Article 35 CISG. The Court of Appeal had decided that the criteria in para (2) are to be applied cumulatively alongside the contractual stipulations under para (1). By contrast, the Italian Supreme Court clarified that para (2) of Article 35 CISG can only apply if the contract does not contain exhaustive specifications as to the characteristics listed in para (1) of Article 35 CISG.

(b) It is similar to § 434(1) BGB which states that the goods must meet both the subjective and objective requirements (cumulative application). The German provision, in turn, is based on Article 5 of the Sale of Goods Directive (EU) 2019/771.

(c) The wording of Article 35(2) CISG (“except where the parties have agreed otherwise”) and the parties’ private autonomy under Article 6 CISG.

It agreed with the result that the goods were non-conforming because, on the facts of the present case, para 2 of Article 35 CISG was not superseded by the parties’ agreement. The parties had only conclusively agreed on the maximum percentage of silicon but said nothing about the minimum percentage. Therefore, Article 35(2)(a) CISG was still applicable regarding the minimum percentage of silicon.

The warranty of merchantability (Sec 14(2) SGA: now satisfactory quality; § 2-314 UCC).

Goods must fulfil the expectations of an average user. They do not have to be fit for all perceivable forms of use but for such uses that suggest themselves in light of the material and technical specificities of the goods.

Merchantable quality refers to the question of whether the goods are still marketable, even if only on an alternate market. Goods to have average quality in general must be better than simply merchantable. Reasonable quality mainly is focused on the expectations of the individual buyer.

It did not use any of the well-known domestic legal concepts but instead tried to find a new term, namely that of reasonableness. This approach seems most appropriate because reasonableness itself is one of the general principles underlying the CISG.

(a) Primarily the public law provisions of the seller’s country.

(b) Because the seller could not know the public law provisions in the buyer’s country.

(c) Same requirements in the seller’s and in the buyer’s country; public law requirements made known to the seller under Article 35(2)(b) CISG; seller should know due to particular circumstances of the case.

In general, the approach through Article 35(2)(b) CISG seems to be appropriate as the particular purpose may be more specific than the ordinary use. This approach allows taking into account the special circumstances of each case, eg the country where the goods are to be marketed or used, and the respective positions of the seller and buyer in their countries and in the international trade.

(a) The seller advertised in Australia and had previously exported trucks to Australia.

(b) The advertisement stated ‘landed at Brisbane’. Furthermore, the seller recommended Australian contractors to assist the buyer with importation.

(c) The seller is not responsible for compliance with the regulatory provisions or standards of the importing country even if it knows the destination of the goods unless: i) The same regulations exist in the seller’s country; ii) The buyer drew the seller’s attention to the regulatory provisions and relied on the seller’s expertise; iii) The seller knew or should have known of the requirements because of special circumstances.

The true issue in the Belgian pork case is whether a suspicion suffices for a finding of non-conformity. The public law requirements set for all European Community members was issued after delivery of the goods and thus could never be known by the seller.

(a) There are two types of quality standards. The decisions discussed previously deal with public law regulations. There may also be private standards like industry codes.

(b) Rule 5.1 changes the allocation of risk compared to the previous case law. By default, the seller may now be responsible for compliance with the standards of the importing country, subject to the factors set out in Rule 5.2. The opinion justifies its approach in the following way: First, if the seller knows of the place of use, it is aware that compliance with local standards will clearly be necessary for the buyer; accordingly, the seller has a reason to investigate. Second, Article 42(1) CISG refers to the place of use and the buyer’s place of business in the context of IP-rights.

(a) The seller must know or at least could not have been unaware of the particular purpose.

(b) Under Section 14(3) SGA emphasis is put on the fact that the buyer expressly or impliedly makes known the particular purpose to the seller; under Article 35(2)(b) CISG, although it must be made known to the seller, this does not have to be done by the buyer itself; under § 2-315 UCC it suffices that the seller has reason to know of the particular purpose. Furthermore, liability under SGA and CISG is excluded if the buyer could not reasonably rely on the seller’s skill and judgement.

Yes, it is enough if the seller has reason to know of the particular purpose. Whether it indeed has is a question of proof.

It was partially liable under Article 35(2)(b) CISG.

Even though the fibre was listed in the seller’s catalogue for indoor use, the buyer wanted to use it outdoors. Furthermore, the buyer had the opportunity to test the clothing previously and was an expert in the awnings business. By contrast, the seller did not have previous experience with awnings.

The buyer only has to show that the goods were not fit for the particular purpose. It does not have to show precisely the existence and the nature of the defect, ie why or how the goods are unfit.

This is a well-known source for defining conformity, see eg § 2-313(1)(c) UCC, Section 15 SGA, Article 635 PRC CC, and § 434(3), sentence 1 no 3 BGB.

In this case, the fact that there was a sample led to the consequence that the goods were conforming, and the seller was not liable for the extreme noise emission.

If there is a conflict the contract must be interpreted on the facts of the individual case. The court found that in the case at hand the sample that was thoroughly tested by the buyer took priority over the description in the contract. In other words, Article 35(2)(c) prevailed over subpara (b).

(a) § 2-314(2)(e) UCC, Article 619 PRC CC, § 434(3), sentence 1 no. 3 BGB.

(b) Under many domestic laws, packaging is regarded as being an additional duty arising from a sales contract. Defects in packaging do not trigger the remedies for non-conforming goods.

(a) The public law requirements in the buyer’s country which ask for labels on the sachets as to the composition of the contents and expiry date.

(b) There is no discussion about whether the seller must know about the marketing regulations in the country of the buyer. The seller’s knowledge of public law requirements or at least its duty to inform itself about them seem to be simply inferred from the fact that the seller knew that the goods would be marketed in France.

(a) Article 35(3) CISG is an exception from Article 35(2) CISG. Its effect is that the buyer cannot rely on a lack of conformity that was previously established.

(b) The buyer’s knowledge needs to relate to the lack of conformity the buyer relies on in the present case, not any other (second) kind of non-conformity that may exist at the same time but that is not relied upon. In other words, knowledge of non-conformity A does not exclude the buyer’s rights regarding non-conformity B.

For example, by way of information by the seller or examination by the buyer before the conclusion of the contract.

(a) Today it is generally acknowledged that burden of proof has to be ascertained under general principles of the CISG and not according to domestic law.

(b) The rule is that the party who wants to assert a right has to prove all its preconditions. However, there are certain exceptions to this rule, eg where the very wording of a provision so indicates. Thus, for example, under Article 35(2)(b) CISG the buyer must prove that the particular purpose was made known to the seller; on the other hand, the seller must prove that the buyer could not reasonably rely on its skill and judgement. Another principle is that the party who has (sole) access to evidence and is thus in a better position to prove certain facts also bears the burden of proof.

(c) If the buyer takes possession of the goods, it has to prove that they were non-conforming at the time of delivery. However, if the buyer rejects the goods, the burden of proof for the conformity of the goods is on the seller.

The German Supreme Court seems to suggest that the buyer only bears the burden of proof if the buyer has not given notice of the lack of conformity.

In this case, it was not proven that the rotten ribs were those delivered by the seller. It is purely a question of evidence whether the buyer can prove this fact.

(a) As there are substantial differences between the domestic legal systems in allowing such concurring domestic legal remedies, the uniformity achieved by the CISG would be undermined in a core area, namely liability for non-conformity of the goods.

(b) The law of contracts seeks to protect expectations arising from the very agreement of the sales contract. The law of torts primarily aims at guaranteeing a basic safety standard in order to protect life, limb and property.

(c) In a CISG contract, the CISG itself defines what is contractual and what is outside its sphere of application. Wherever concurring domestic remedies are only concerned with the non-conformity of the goods, such remedies are pre-empted by the CISG.

(a) The Court of Appeal adopted a formalistic approach and held that the action by the original buyer/ sub-seller against the original seller was not based on a non-conformity of the tiles delivered under Article 35 CISG. Instead, it found that the claim was based on the action taken by the consumers against the original buyer/ sub-seller, which in turn founded an action of the original buyer/ sub-seller against the original seller under the Italian transposition of Article 4 of Directive 1999/44/EC (now Article 18 Directive (EU) 2019/771).

(b) The French Supreme Court only says that the previous decision violated Articles 39 and 40 CISG by refusing to apply them. The exact reason is not explicitly stated but might be reconstructed as follows: In substance, the buyer was complaining of a non-conformity of the tiles under Article 35 CISG which rendered it liable vis-à-vis the consumers, even though from a formal point of view only the Italian transposition of Article 4 of Directive 1999/44/EC was invoked. Since the claim under the CISG was barred under Article 39(2) CISG (subject to Article 40 CISG, the prerequisites of which still needed to be established by the buyer), the concurring national remedies had to fail as well because otherwise the uniform application of the CISG would be frustrated.

According to its Article 5, the CISG does not govern the liability of the seller for death or personal injury. This area is left to domestic law. However, if the buyer is seeking recourse against the seller because itself has been held liable for death or personal injury of a third person, these claims are governed by the CISG to the exclusion of claims based on domestic law. Damage to property is also governed by the CISG. In case of damage to other property than the goods delivered domestic law may be applied alongside the CISG.

(a) To promote its uniform application when the same factual situation is already covered by the CISG. Otherwise, a result achieved independently by the CISG may be frustrated by the domestic rules and thus its uniform application endangered. For example, a buyer may be barred from exercising remedies under the CISG because of late notice under Article 39 CISG (see C 35-22). Still, there may be a concurring remedy under national law like recission for mistake. In such a situation, CISG cases with similar factual circumstances might be decided differently depending on which national law governs the mistake.

(b) Fraud is different from the other cases listed before in two important ways: First, a fraudster is generally not worthy of legal protection (fraus omnia corrumpit—fraud unravels all). Second, national rules on fraud may serve a different purpose than those on other kinds of mistakes because they do not only serve corrective justice but rather intend to deter or punish the fraud (see CISG AC Opinion No 23 comment 9.7 et seq).