Q 68-1
As a general rule, when does the risk pass with regard to goods sold in transit?
It passes to the buyer from the time the contract of sale is concluded.
Q 68-2
What are the difficulties with the general rule?
Difficulties arise when damage or loss occurs during transport; it may indeed be quite difficult for the buyer to prove that the damage or loss occurred prior to the conclusion of the contract.
Q 68-3
What is the exception to the general rule?
According to Article 68 sentence 2 CISG, the risk it retroactively imposed on the buyer from the time the goods were handed over to the carrier if ‘the circumstances so indicate’.
Q 68-4
Why is the exception of greater practical relevance than the general rule?
It is undisputed that the term ‘if the circumstances so indicate’ relates to the situation where an insurance contract has been concluded which covers all risks and where the buyer may directly claim from the insurer the amount insured. Such insurance is common in practice.
Q 68-5
To which documents do Article 68, sentence 2, and Article 58, respectively, refer? Decide whether the following documents represent documents within the meaning of Article 58, or Article 68, sentence 2, or both:
(a) bill of lading
(b) insurance policy insuring the goods in shipment;
(c) carriage contract document.
(a) The documents mentioned in Article 58 CISG have to represent the goods, while the ones mentioned in Article 68 sentence 2 CISG only have to prove the carriage contract.
The standard short form of a bill of lading is evidence of the contract of carriage of goods. A bill of lading can be a document of transfer if it is endorsed (‘order bill of lading’). In that case, it is a document which falls within Article 58 as well as within Article 68 CISG.
(b) The insurance policy is a contract with a third party, the insurer; it does not evidence either the contract of carriage or the title in the goods and is thus neither a document according to Article 58 nor pursuant to Article 68.
(c) The carriage contract represents the goods within the meaning of Article 68 sentence 2 CISG but does not represent any title to the goods.
