Q 85-1
(a) What is the function of Articles 85 to 88 CISG?
(b) Which party do they address?
(c) Which general rule is reflected in Article 85 CISG?
(a) To prevent a deterioration of the goods until the legal situation has been clarified.
(b) Article 85 CISG specifically addresses the seller; Article 86 specifically addresses the buyer; Articles 87 and 88 address both seller and buyer.
(c) In the situations in which Article 85 CISG applies, the risk has already passed to the buyer. Thus, the seller could be tempted to let the goods decay. This is exactly what Article 85 prohibits.
Q 85-2
What are the consequences if the seller who is bound to preserve the goods does not comply with its duty?
The seller may not claim damages for the deterioration of the goods, although the risk will usually have passed to the buyer.
The buyer will be entitled to damages according to Articles 45, 61, 74 et seq. CISG. However, those damages might often be reduced in accordance with Article 77 CISG, because the buyer, by not taking delivery, will be also liable for the deterioration of the goods.
Q 85-3
Who bears the preservation costs under Article 85 CISG if the buyer’s refusal to take delivery is justified?
In such a case, it is the seller who bears the preservation costs.
Q 85-4
Does Article 85 CISG apply in the following situations where:
(a) the seller has tendered conforming goods of which the buyer does not take delivery;
(b) the buyer unequivocally refuses to take delivery of the goods because of their glaring non-conformity with the contract;
(c) the seller has tendered properly and the buyer is willing to take delivery of the goods but unjustifiably refuses to pay the purchase price;
(d) the seller avoids the contract because of an anticipatory breach on behalf of the buyer;
(e) the seller has tendered and the buyer takes delivery of only part of the goods, because there is allegedly no larger storage room available.
(a) Yes.
(b) Yes.
(c) Yes.
(d) No, the seller is no longer under a duty to preserve the goods for the buyer (the risk has never passed to the buyer).
(e) Yes, for that part that has not been taken over.
Q 85-5
Under Article 85 CISG, does it matter who the owner of the goods is?
No, the only relevant question is whether the risk has passed to the buyer.
Q 85-6
Which factors set the benchmark for the adequacy of measures that the seller must take in order to preserve the goods?
The test is whether the measures are reasonable. The question should be solved with reference to objective standards and take into account all the concrete circumstances of the case as well as the interest of the buyer. However, the fact that the seller would have done otherwise in its own affairs should in general not be relevant.
Q 85-7
Could the seller base its claim for compensation for preservation and storage costs on Article 74 rather than Article 85, sentence 2 CISG? Would it make a difference? See, in particular, Article 79 CISG.
The seller could base its claim for compensation for preservation and storage costs on Article 74 rather than on Article 85, but then, Article 79 CISG would apply. That is, the buyer would be exempt from paying for the preservation and storage costs in cases of force majeure. Article 85 CISG has the purpose of ‘objectifying’ the compensation for preservation and storage costs, which corresponds to the buyer’s bearing of the risk at that time.
Q 85-8
The majority holds that the seller’s right to retention under Article 85, sentence 2 CISG should extinguish where the buyer provides reasonable security. What other provisions of the CISG allow for the issuance of adequate assurance in order to prevent the seller from taking steps which will burden the buyer?
Articles 71(3) and 72 (2) CISG expressly provide for the possibility of the debtor to furnish adequate assurance.
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