Q 87-1
What are the consequences if the goods are not deposited in a warehouse?
There is no obligation to store the goods in a warehouse; a party who is bound to preserve the goods can do so by any means. Storage in a warehouse is just an option.
Q 87-2
Article 87 CISG does not mention any obligation to notify the other party of the intention to deposit the goods in a warehouse or of the fact that the goods have been stored there. Having regard to the general principles of the Convention, do you think that such notification is necessary? If so, what should the consequences be if no such notification has been given?
The storage of the goods by a party according to Article 87 CISG causes expenses that the other party will have to bear. Several provisions can be found in the CISG which require that, if one of the parties envisages taking steps that will deteriorate the other party’s position, the first party must notify the other party of its intention, see, for example, Articles 71(3), 72(2). Furthermore, Article 77 provides for a duty to mitigate damages. Thus, it seems reasonable to argue that the other party should, in principle, be informed of the fact that the goods are stored in a warehouse in order to be able to react and minimise the costs. A failure to give notice should have the consequences provided for in Article 77, that is, the party depositing the goods in a warehouse might be refused full compensation of the storage costs.
Q 87-3
Can you think of a situation where, with a view to Articles 77, 85and 86(1) CISG, the party that is bound to preserve the goods ought to deposit them in a warehouse?
The question is relevant where the party that is bound to preserve the goods is not able to reasonably preserve the goods itself. In such a case, not storing them in a warehouse will lead to a reduction of a possible damages claim (see Art 77 CISG).
Q 87-4
(a) Which law defines the relationship between the party that is obliged to preserve the goods and the owner of the storage facility?
(b) Does the CISG provide for any direct claims between the other party and the owner of the storage facility?
(a) Domestic law applies.
(b) No. The parties to the sales contract could agree on such a possibility in their contract. In order to be effective, such a direct claim ought to also be provided for in the contract between the depositing party and the depositary.
Q 87-5
What should be the legal consequences of unreasonably high storage costs? The wording of Article 87 CISG seems to suggest that the reasonableness of the storage costs is a precondition of the right to deposit the goods. But can the requirement that the storage costs be ‘reasonable’ also be understood in another way?
A party can always store the goods in a warehouse in order to preserve them without committing a breach of contract. Unreasonable costs would only have an impact on the claim for reimbursement: the party who stores the goods at unreasonable costs could not claim the whole storage costs; rather, its claim would be reduced to the amount that would have been reasonable with regard to the circumstances of the case.
