The issue of the duty to examine and notify reveals the respective attitude a legal system takes towards the interests of sellers and buyers. Where a strict examination/notice duty exists, the legal system clearly prefers the seller (in breach); where such a duty does not exist or is limited, buyers are in a much better position.

Group 1: Germanic legal systems with Germany in the forefront.

Group 2: Under Section 35(1) SGA, the buyer loses the right to avoid the contract if it has accepted the goods. Thus, it is indirectly required to give notice of any non-conformity if it does not want to accept the goods and be able to avoid the contract.

Group 3: USA Uniform Commercial Code as well as the modern codifications based on the CISG, such as the PRC CC.

(a) Their primary purpose is to enable the seller to remedy the breach of contract or reduce the buyer’s damage by subsequent delivery, replacement, or repair.

(b) Once the examination period under Article 38(1) CISG has elapsed, the buyer is deemed to have discovered any non-conformity that would have transpired during the examination, triggering the notification period under Article 39(1) CISG.

(a) According to C 38/39-1, the default examination period is up to two weeks for non-perishable goods, unless special circumstances justify a shorter or longer period.

(b) Relevant factors include the size of the buyer’s business, the type and complexity of the goods, their perishability or seasonal nature, the quantity delivered, and the difficulty of examination.

According to C 38/39-2, the manner of examination depends on which measures, as part of the ordinary course of business, can reasonably be expected of a prudent buyer in the specific case. In determining the manner of examination, courts balance the seller’s interest in a prompt and final settlement of the transaction and in avoiding consequential damages against the buyer’s interest in not bearing the risk of the seller’s defective performance.

(a) A visual examination and a test drive.

(b) The buyer had only purchased a single vehicle and was not engaged in commercial resale of vehicles as part of its regular business.

The vertical metal detector was less sensitive than the horizontal one, which was capable of detecting the small metal particles present in the marjoram. Since horizontal detection was normally available to Werner and its use would have been a simple, reasonable step – especially given the marjoram’s intended use in food production – the court held that omitting it was a business decision for which Werner bore the risk.

The nature of the goods; whether they are perishable or durable; the quantity of the goods; the packaging; whether the goods can be examined without destroying them; the position of the buyer; time and costs of examination; infrastructure at the place of examination; cultural differences.

(a) Article 38(2) CISG: the contract involves carriage of the goods

Article 38(3) CISG: the goods are redirected in transit or redispatched and the seller knew or ought to have known of such a possibility at the time of the conclusion of the contract

(b) Under Article 38(3) CISG, the question arises whether it suffices that the buyer is in the resale business in order to assume the seller’s knowledge that the goods will be redirected or redispatched. In case of redispatch of the goods, it may be questionable whether the buyer in fact did not have a reasonable opportunity for examination before redispatching the goods.

(a) In the first case, examination was carried out by a third party on behalf of buyer’s customers.

(b) In the second case, the contract called for examination by a neutral inspection body, which was carried out after a joint examination by both parties.

(c) In the first case, it was binding on the buyer as it was solely in the buyer’s sphere of risk that carried out the examination. However, if the parties have agreed on a certain third party or jointly examined the goods, any inadequacies are at the risk of both parties and thus the examination is not binding on the buyer.

(a) The duty to give notice of non-conformity serves the purpose of clarifying the legal relationship between the parties.

(b) Evidence must be secured; the seller may want to take recourse against its own supplier; the goods have to be transported back to the seller if the buyer avoids the contract.

As the different legal systems take very different attitudes towards the calculation of the period for examination and giving notice, it is vital to distil a uniform approach in order to guarantee the uniform interpretation and application of the CISG. The German Supreme Court indicates that this may be the so-called ‘noble month’ that had been previously suggested in scholarly writing.

The Swiss Supreme Court approves of the application of the ‘noble month’; it allows one week for examination and one month for giving notice.

No. It considers a total of 14 days to be an appropriate period for both the examination and giving of notice.

The Austrian Supreme Court rejects the ‘noble month’ approach. Instead, it supports an overall two-week period, thus not distinguishing between the period for examination under Article 38 CISG and the period for giving notice under Article 39 CISG. It thus demonstrates a clear tendency towards a Germanic interpretation of the provisions of the CISG without having due regard to the necessity of a uniform interpretation.

(a) The period for examination includes one week for the decision and initiation of necessary measures followed by two weeks for an expert’s investigation. The regular period for giving notice is considered to be one month.

(b) The period for giving notice starts to run after the separate period for examination. Now the German Supreme Court is taking a clear stance in favour of the separate one-month period for giving notice.

(a) French courts are rather generous and buyer-friendly in interpreting Articles 38 and 39 CISG which can easily be understood against their domestic background.

(b) French courts are not only less rigid than the Austrian Supreme Court that requires to give notice within two weeks after delivery, but even more generous than the German Supreme Court. In the case C 38/39-10 notice was only given five weeks after the examination of the goods, ie not within the ‘noble month’.

(a) The court considers whether the goods were complicated, the different respective expertise of the parties, and delivery of the goods in instalments.

(b) Again, this approach is more buyer-friendly than that of the Germanic Supreme Courts, emphasising that even requiring notice within a few weeks may not be adequate. Thus, the American interpretation is much more in line with that of the French courts.

Q 38/39-19

The requirement of specificity of the notice seems to be used as another mechanism to protect sellers (in breach). It is revealing that most case law on the question of specificity stems from courts from Germanic legal systems.

It was considered sufficient that the notice contained an explanation of the symptoms; an explanation of the underlying causes was not required.

As with the calculation of the period for giving notice, the German Supreme Court in C 38/39-14 took a slightly more buyer-friendly approach to the question of specificity than in C 38/39-13. Thus, all in all there seems to be a move towards more buyer-friendliness under the CISG compared to domestic German sales law.

(a) The Swiss Supreme Court emphasises the discrepancy between the unofficial German translation and the original versions of Article 39 CISG. It agrees with scholarly writing that the standard for specificity, especially in the age of electronic communication, should not be too strict, as the seller may ask what is wrong with the goods.

(b) No, instead of applying these principles the Swiss Supreme Court seems to be quite strict.

(a) There is no form requirement for the notice of lack of conformity. A complaint by telephone is sufficient although this may cause problems of proof. However, the parties may provide in their contract that notice has to be given in writing. If they do so, regard is to be had to Article 13 CISG under which ‘writing’ includes e-mail.

(b) The buyer bears the burden of proof for having given specific and timely notice. However, according to Article 27 CISG, the buyer must only prove that it dispatched the notice. The notice travels at the risk of the seller.

(c) This is a question of the law of evidence which is not covered by the CISG. It may be proven by documents, witnesses or party testimony.

(a) If the domestic limitation period is less than two years, it would be possible that although under the CISG the buyer is still allowed to give notice of non-conformity and thus rely on all relevant CISG remedies, its claim would be time-barred under the domestic rules on limitation. Public international law prohibits the Member States from defeating a buyer’s claim by applying a short limitation period whereas it could still rely on the non-conformity under Article 39(2) CISG.

(b) The first possibility is to apply the general limitation period of domestic law instead of the short limitation period for remedies for non-conformity of the goods. In Switzerland this would be Article 127 OR, which provides for a general limitation period of 10 years. A second solution is to simply extend the domestic limitation period and to harmonise it with the two-year cut-off period of Article 39(2) CISG. Finally, a third option was taken by the German legislator upon implementing the CISG. The relevant statute provided that the then six-months limitation period only started to run with the giving of notice.

In the case of defective repair or replacement, as in the case of an initial delivery of non-conforming goods, the buyer may rely on all remedies. The interests of the seller in clarifying the legal relationship in this situation are comparable to the ones envisaged by Articles 38 and 39 CISG. This speaks for an application of these provisions by analogy.

The court held that Article 39 applies to defects in documents, at least where the missing or defective documents render the goods unmarketable. In such cases, the goods themselves are non-conforming under Article 35(2)(a) and (b) CISG due to the absence or inadequacy of the documents, triggering Article 39’s notification requirement.

The CISG Advisory Council Opinion No 2 emphasises the circumstances of the individual case and rejects any fixed period of time for giving notice. However, it clearly states that the period for examination on the one hand and that for giving notice on the other hand must be distinguished and kept separate.