Q 60-1
(a) What does the duty to take delivery, according to Article 60 CISG, consist of?
(b) Which general principle can be derived from Article 60 CISG?
(a) Reasonably enabling the seller to make delivery and taking over the goods by the buyer.
(b) A principle of reasonableness.
Q 60-2
(a) Is there a limitation on what steps the buyer is obliged to take in order to enable delivery of the goods?
(b) Is there a limit to the buyer’s obligation to take over the goods?
(c) In which provisions of the CISG do you find indications that the buyer’s duty to take over the goods or documents is not infinite?
(a) Yes, the buyer should facilitate everything necessary but cannot be held liable for, eg, actions of third parties required to enable delivery.
(b) The buyer must do everything reasonable to take over the goods but does not have an obligation to take them over if they are non-conforming and such non-conformity would constitute a fundamental breach of contract, or if the goods are delivered early or in a larger quantity than agreed.
(c) Articles 49(1)(a) and 52 CISG.
Q 60-3
What are the consequences of the buyer failing to comply with its duty as set out in Article 60 CISG?
The seller can claim specific performance, damages, and/or avoidance of the contract.
Q 60-4
Who bears the risk for the goods or documents if the buyer refuses to take over the goods or documents
— and has the right to do so?
— but is not entitled to do so?
The seller bears the risk if the buyer is rightfully entitled to refuse the goods or documents. If the buyer wrongfully refuses to take over the goods or documents, it is the buyer’s risk.
Q 60-5
(a) Why did the arbitral tribunal find in C 60-1 that the buyer had breached its obligations?
(b) Did the tribunal base its decision on Article 60(b) CISG?
(a) The arbitral tribunal found that the buyer had not complied with its obligation to take prompt delivery of the goods by discharging the vessel and as a result, had to bear the costs and the additional demurrage costs caused by its delay.
(b) The tribunal’s finding was based on the contract and the INCOTERM® CFR, which it used to supplement the general obligation under Article 60(b) CISG.
Q 60-6
The CFR INCOTERMS referred to in C 60-1 have changed since their 2000 version. Review the below and
(a) discuss whether this would impact the decision if it were to be decided today.
(b) which other differences of the provided excerpts of CFR INCOTERMS® (2020) are impacting the application of the provisions under Chapters II to IV?
(a) While the revisions restructured the CFR INCOTERMS with respect to the costs, the obligations did not change. The crucial change that was required to reflect modern shipping can be found in A2, changing the delivery obligation from being fulfilled when the goods pass the ship’s rail to placing them on board the vessel. This has practical implications, but ultimately not for C 60-1. The allocation cost-related obligations which drove the decision in C 60-1 remain unaffected based on the facts of that specific case. While the division of costs is impacted by the change in delivery, as the buyer pays “all costs relating to the goods from the time they have been delivered”, which is when they goods are placed them on board, the costs disputed in C 60-1 were at the port of landing, so without doubt after delivery and squarely within the cost responsibility of the buyer.
(b) While the changes are relatively minor compared to other revisions in the INCOTERMS (2020), there are numerous provisions that can be affected both relating to the obligations of and expectations for the buyer and the seller:
The changed wording for “delivery” in CFR impacts when delivery must be taken in the sense of Arts. 53 and 60(b), when payment must be made absent other agreement, Art. 57(1) (b), 58 (1), but also the risk passing at a time when the goods are not actively moving, impacting Art. 66. The changed wording impacts the interpretation of handover to the first carrier pursuant to Art. 67(1).
Another change to the CFR terms is the express inclusion of who is responsible for security clearance for export and import, see B7 and A7 in the 2020 INCOTERMS. This could impact Art. 53 and 54, Art. 60 (a), but also Art. 48(1), Art. 32, and Art. 70.
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