Research Paper
On
‘Termination of the contract as a remedy for breach of contract by the seller: a
comparison between English law and the CISG.’
Researcher & Author:
Ankur Chandra Kuri
School of Business,
North South University
Dhaka, Bangladesh
Declaration
i.
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2
Title: ‗Termination of the contract as a remedy for breach of contract by the seller: a
comparison between English law and the CISG.‘
Abstract
This essay focuses on the merchant‘s commonplace problem which occurs when the seller‘s
tender of performance deviates in some respect from his contractual obligation. A crucial
challenge is therefore to identify the circumstances in which a buyer may be entitled to
terminate the contract. The circumstances, in which the buyer will be entitled to terminate the
contract for the seller‘s non-conforming delivery of goods and documents and consequently
the mechanism of exercising the right and the circumstances in which the buyer may lose his
right to terminate were explored. Furthermore, the circumstances in which the seller may have
the right to cure were highlighted. Finally, from the discussions some comparisons between
the English laws of sale of goods with the Convention was drawn in order to show the extent
of similarity and dissimilarity for termination of the contract between the two systems. It is,
further, suggested that the English commercial law of sale may be more than adequate for
commodity sales. However, there is much to be said for the view that the Convention is better
suited for situation, where contractual continuance is more desirable than hair-trigger
termination rights.
Keywords: Remedies for breach of contract; Termination; Lose of right; Right to Cure; English Sales
law; The Convention.
3
TABLE OF CONTENT
INTRODUCTION......................................................................................................................1
REJECTION AND TERMINATION, ONE REMEDY ORTWO?...........................................2
BUYER'S REMEDIES UNDER ENGLISH LAW AND THE CONVENTION……..............3
TERMINATION FOR BREACH UNDER ENGLISH LAW AND THE CONVENTION…..4
THE RIGHT TO REJECT THE GOODS……………………………………………………..5
Failures in Delivery.......................................................................................................5
Delivery at the wrong time............................................................................................6
Early Delivery...............................................................................................................9
Delivery at the wrong place.........................................................................................10
FAILURE IN RELATION TO THE NATURE, QUALITY OR CONDITION OF THE
GOODS.....................................................................................................................................11
Correspondence with description................................................................................12
Satisfactory Quality ....................................................................................................14
Fitness for purpose…………………………………………………………………………..15
Wrong quantity of the goods supplied …………………......................................20
RIGHT TO REJECT THE DOCUMENTS ............................................................................21
LOSE THE RIGHT TO TERMINATE THE CONTRACT ....................................................26
Acceptance .................................................................................................................26
By express Intimation....................................................................................27
Act inconsistent with the ownership of the seller..........................................27
By laps of reasonable time ............................................................................28
Waiver........................................................................................................................29
By election .....................................................................................................29
By estoppel ....................................................................................................30
SELLER‘S RIGHT TO CURE THE BREACH......................................................................32
COMPARATIVE ASSESMENT ............................................................................................34
CONCLUSION .......................................................................................................................36
REFERENCES……………………………………………………………………………….38
4
ABBREVIATIONS
CIF:
Cost Insurance and Freight
FOB:
Free On Board or Freight On Board
BOL:
Bill of Lading
5
INTRODUCTION
The contracting parties, in international sales of commodities, expect that their contract be
performed as they contemplate when making the contract. However, when the circumstances
change by wide swings in commodity prices between the making of the contract and the time
for performance, it is frequent that one of the contracting parties seeks to evade performance
of his own part in order to flee from a bad bargain1. In this setting, a right of rejection is of
crucial importance to both parties.
From the beginning of sales law courts and legislative draftsmen has vexed for examination of
this right of rejection. 2 This recurrent problem faced by the merchant arises whenever the
seller‘s tender of performance deviates in some respect from his contractual obligation. A
crucial challenge is therefore to identify the circumstances in which a buyer may be entitled to
terminate the contract.3 This question will be addressed under two major legal sources, i.e.
English law4 and The Convention on Contracts for the International Sale of Goods 1980 (the
Convention).
The courts and lawyers have used expressions to describe what is called in this study ‗the
right of termination of the contract.‘ 5 In English law, the right to terminate the contract
depends in large part on the nature of the term which has been broken by the seller.6 Therefore,
the idea of termination for breach of a term, that is condition, is the most fundamental aspect
1
See Treitel, H. G. (1991) Remedies for Breach of Contract: A Comparative Account. Oxford: Clarendon Paperbacks
at 321-322
2
See Honnold. J. ‗ Buyer‘s Right of Rejection: A Study in the Impact of Codification upon a Commercial Problem‘ (Mar., 1949),
University of Pennsylvania Law Review, Vol. 97, No. 4 pp. 457-481, at 457, footnote 1.
3
See Scrutton, L. J. in Meyer, Ltd. v. Kivisto, 142 L. T. 480, 481 (C. A. 1930) summed up a lifetime of experience; ". . .As far as I
remember, in every com- mercial litigation this question of whether you can reject or have a claim for damages has constantly been raised in
various kinds of trade, and under various kinds of con- tracts, and, I daresay, will continue to be raised for centuries yet to come." Cited in n.
2 , at p. 457(f.n.1)
4
In the case of English law, the study will focus on the law regulating the buyer's remedies in light of the Sale of Goods Act 1979 (SGA)
5
Such as: ―termination," (Lord Wilberforce in: Photo Production v. Securicor ltd. [1980] A.C. p. 827 at 844.) "rescission," "repudiation,"
(Bettini v. Gye [1876] 1 Q.B.D. p. 183 at 187)"discharge," (Lord Wilberfortce in: Photo Production v. Securicor ltd. [1980] A.C. p. 827 at
844) "rejection," "cancellation," (Millar's Karri and Jarrah Co. v. Weddel [1909] 100 L.T. 128 at 129; Lord Salmon in: Decro-Wall S.A. v.
Marketing Ltd. [1971] 1 W.L.R. p. 361 at 369; and [1971[ 2 All E R p. 216 at 223.) ―avoidance," (Lord Roskill in: Cehave N.V. v. Bremer
m.b. h. (The Hansa Nord) [1976] 1 Q.B. p. 44 at 71.) "determination," (Gunton v. Richmond-upon-Thames L.B.C. [1981] ch. p. 448 at 468;
Photo Production Ltd. v. Securicor Transport Ltd [1980] A.C. 827 at 850; Gator Shipping Corporation v. Trans-Asiatic Oil Ltd. (The
"Odenfeld) [1978] 2 Lloyd's Rep. p. 357 at 370.) "treat the contract as at end" (Vitol SA v. Norelf Ltd. [1994] 4 All E R p. 109 at 114) ―treat
the contract as repudiated," and "to put an end to all primary obligation of both parties," (Lord Diplock in: Photo Production Ltd. v. Securicor
Transport Ltd [1980] 1 All E R p. 556at 566.) cited in Jafarzadeh, M.(Dec2001).
6
See Takahashi, K. ‗Right to terminate (avoid) international sales of commodities‘ (2003) J.B.L. 102, at p.102
6
of the sale of goods legislation. 7 The convention adopts a mixture of Common Law and
German principles in providing that the buyer may declare the contract terminated (avoided)
either, where any breach by the seller is 'fundamental‘8or, where the breach is one of nonperformance and the seller fails to perform within the additional period of time.9 Under both
the systems it is expressly provided that the contract survives termination for the purpose of
settling any dispute between the parties.
While a full analysis of all of the implications of the Convention and English law would
require a weighty treatise, this paper will take a focused view, based on certain spheres
available for termination of the contract in the context of international sales of commodities.
Firstly, this paper considers circumstances in which the buyer will be entitled to terminate the
contract for the seller‘s non-conforming delivery. Then, it addresses the mechanism of
exercising the right and the circumstances in which the buyer may lose his right to terminate.
Further, it takes a short look at the circumstances in which the seller may have the right to
cure. Finally, this paper compares English law with the Convention in order to emphasize
similarity and dissimilarity for termination of the contract, between the two systems.
REJECTION AND TERMINATION, ONE REMEDY OR TWO?10
Where the seller‘s non-conformity caused by breach of condition, it is commonly said that the
buyer is entitled to reject it and terminate the contract. However, the position of these two
rights and their relationship is not quite clear in English law. 11 There are several judicial
dicta,12 academic writings13 which use one instead of another. In contrast, there can be found
7
See, Carter, J. W. ‗Party Autonomy and Statutory Regulation: Sale of Goods‘ (1993) 6 Journal of Contract Law 93-122.
Article 25
9
Article 47 (1).
10
See Jafarzadeh, M. ‗Buyer's Right to Withhold Performance and Termination of Contract: A Comparative Study Under English Law,
Vienna Convention on Contracts for the International Sale of Goods 1980,Iranian and Shi'ah Law‘ (December 2001), para.2, available at
http://www.cisg.law.pace.edu/cisg/biblio/jafarzadeh1.html.
11
Ibid.. In this connection, the language of the Act is also unclear.
12
See e.g., Bentsen v. Taylor, Sons & Co [1893] 2 Q.B. 274 at 281; Arcos, Ltd. v. E.A. Ronaasen & Son [1933] A.C. 470, per Lord Atkin at
480; Cehave N.V. v. Bremer Handelsgesellschaft mbH (The Hansa Nord) [1976] 1 Q. B. 44, per Ormerod LJ at 83 and 84; Kwei Tek Chao v.
8
7
some cases14 and academic writings15 in which the right of rejection is distinct from the right
of termination. Therefore, assuming that a buyer, who is aggrieved by the seller‘s breach of
condition and where the time of performance is of the essence of the contract, would be
entitled to terminate the contract.16
BUYER'S REMEDIES UNDER ENGLISH LAW AND THE CONVENTION
The two primary remedies for breach of contract in English law are a right to treat the contract
as terminated and damages.17 The existence of the former under English law depends on the
presence of an implied, that is, common law, right of termination for: (a) breach of an express
or implied term classified as a condition; or (b) the sufficiently serious breach of an
intermediate term. Termination for breach of ‗condition‘ arise where the terms broken by the
seller is the subject of an express or implied promise. 18 Termination for breach of an
intermediate term occurs where the stipulation is not such a condition but the breach is such
as to go to the root of the contract, the other party is entitled to treat himself as discharged: but,
otherwise, not. 19 The English law also lays inconsequential emphasis on the specific
performance.20
British Traders and Shippers Ltd [1954] 2 Q.B. 459 per Devlin J at 480; Lord Roskill in Bunge Corp v. Tradax Export S. A. [1981] 1 W.L.R.
711 at 724, 725.
13
See e.g., Treitel, G. H., (1991) The Law of Contract, (Sweet & Maxwell Stevens, London, 1991, 8th ed.). at 690;Carter, J. W.(1991)
Breach of Contract, (The Law Book Company Ltd., Australia, 1991 2nd ed.). Paras. 102, 628, in particular, 940; Carter, J. W.: "Conditions
and Conditions Precedent," 4 J.C.L. (No. 2) (1991 A) 90, at 102-103; Carter, J. W.: "Buyer's Remedies of Rejection and Cancellation under
the UCC and the Convention" 6 J.C.L. (1993) 93, at 95 and 110, cited in n.10.
14
See for instance, the old case of Reuter, Hufeland, & Co. v. Sala & Co. [1879] 4 C.P.D. 239.
15
Treitel, G. H., (1999) at 732 fn. 28 then p. 698; Bridge, M., (1997) at 162, 163; Atiyah, P. S. & Adams, J., (1995) at 449 and 456 fn. 30;
Goode, R. M., (1995) at 362-363, to see further Jafarzadeh, M (December 2001) fn.50.
16
See Lord Roskill in Bunge Corpn. v. Tradax Export S.A. [1981] 1 W.L.R. 711 at 724, 725; see also Lord Scarman's judgement at 717;
Reference can also be made to the f.o.b. case of Compagnie Commerciale Sucres Et Denrees v. C. Czarnikow Ltd. (The Naxos) [1989] 2
Lloyd's Rep. 462 per Butler Sloss L.J at 478..
17
Mullis, L.C.A. ‗Termination for Breach of Contract in C.I.F. Contracts Under the Vienna Convention and English Law; Is There a
Substantial Difference?‘ in Lomnicka / Morse ed., Contemporary Issues in Commercial Law (Essays in honor of Prof. A.G. Guest), (1997)
137-160, available at http://www.cisg.law.pace.edu/cisg/biblio/mullis.html.
18
Subject to s15A Sale of Goods Act 1979, See. e.g. Wickman Machine Tool Sales Ltd. v. L. Schuler A.G. [1974] A.C. 235, Lord Simon of
Glaisdale at pp. 264-265 pointed out that "condition" was the "appropriate word to describe a contractual term any breach of which... gives
rise to a right... to terminate the contract."; The Mihalis Angelos [1971] 1 Q.B. 164 per Megaw L.J. at pp. 205-207; Carter, J. W. (1993) at 93.
19
Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26 per Upjohn L.J. at p. 64; See also a number of cases of
1970s where the courts extolled the virtues of the intermediate term, L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235;
Cehave NV v Bremer Handelsgesellschaft mbH (The Hansa Nord) [1976] QB 44; Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976]
1 WLR 989; Tradax Internacional SA v Goldschmidt SA [1977] 2 Lloyd's Rep 604; Bremer Handelsgesellschaft mbH v Vanden AvenneIzegem PVBA [1978] 2 Lloyd's Rep 109.
20
See Benjamin 17-087 - 17-091; Phillips v. Lamdin [1949] 2 K.B. 33, (Ornamental door designed by Adam).
8
The starting point of the buyer‘s remedial provisions under the Convention is Art. 45(1)
21
which provides that the buyer can resort to the following remedies: performance, including
substitute delivery and repair; avoidance of the contract; reduction of the purchase price;
damages.22 These remedies are more clearly structured in the Convention especially the case
for the two most significant remedies, ‗damages‘ and ‗avoidance of the contract.‘ 23 The
convention adopts a mixture of Common Law and German principles in providing the right to
declare the contract avoided.24
TERMINATION FOR BREACH UNDER ENGLISH LAW AND THE CONVENTION
Amongst various remedies available for breach of contract, termination is the most drastic
measure.25 Termination by the buyer of a sale contract on shipment terms arise on the grounds
of the seller‘s repudiatory breach. 26 The seller has two types of obligation in international
sales to perform; the ‗physical‘ obligations and the ‗documentary‘ obligations.27 The seller
may fail to perform one or both of these duties which will lead the seller in repudiatory breach;
and the buyer may have a right to reject in respect of any such failure. 28 This duality
performance is of crucial significance in certain aspects of the law on CIF and FOB contracts
particularly in the area of the remedies of rejection of goods and documents.29 Therefore the
21
See Article 45(1) "If the seller fails to perform any of his obligations under the contract or this Convention, the buyer may: (a) exercise the
rights provided in Arts. 46 to 52; (b) claim damages as provided in Arts. 74 to 77."
22
See Huber, P. ‗CISG -- The Structure of Remedies‘, 71 Rabels Zeitschrist für ausländisches und internationales Privatrecht (January 2007)
13-34, at p- 13, available at http://www.cisg.law.pace.edu/cisg/biblio/huber1.html
23
See Schlechtriem, P. ―Uniform Sales Law in the Decisions of the Bundesgerichtshof‖ Translation by Todd J. Fox, available at
http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem3.html#iii
24
Ibid; Katz, W. A. ‗Remedies for Breach of Contract Under the CISG‘ International Review of Law and Economics 25 (2005) 378–396, at
p- 378.
25
Takahashi, K (2003), p.102
26
See Shyam Jewellers Limited v M Cheeseman, CA 29 November 2001, A repudiatory breach of contract is a breach when a party
intimates by words or conduct that it does not intend to honour its obligations under the contract, and is sufficiently serious to entitle the
innocent party to bring the contract to an end. Available at http://www.brewerconsulting.co.uk/cases/CJ0201RR.htm accessed on 6th April
09.
27
See Debattista, C. (1998) The sale of goods carried by sea (2nd edition), London : Butterworths, at p.186; Biddell Bros. v. E. Clemens
Horst Co [1911] 1 K.B per Hamilton .J, at p- 220; Hindley v. E. India Produce Co. Ltd [1973] 2 Lloyd's Rep 515.
28
See Benjamin 19-144
29
See Debattista, C. (1998) at 3; Biddell Bros. v. E. Clemens Horst Co [1911] 1 K.B. per Hamilton J. p- 220.
9
termination, the most radical contractual remedies should need to be analysed in binary terms
as well.30
Under the Convention, termination (avoidance) is the one-sided right of a party to terminate
the contract by its mere declaration.31 There have been great differences of opinion among
domestic legal systems concerning the question of under which circumstances the buyer may
avoid the contract in case of non-conforming goods or documents. It is suggested that the
position of the buyer under the Convention is broadly similar to English law.32 Article 30
requires separate obligations in relation to documents and goods on the seller. The buyer, thus,
may exercise his right in two different situations; 33 where the seller‘s breach is a fundamental
breach34of contract or where the seller does not perform his delivery obligation before the end
of an additional period of time set by the buyer.35 Consequently, courts under the Convention
justified avoidance in relation to three broad types of breach: namely, defects in the goods;
defects in the documents; and, late performance and non-performance.36
THE RIGHT TO REJECT THE GOODS
Failures in Delivery
It is the duty of the seller to deliver the goods in conformity with the contract to the buyer.37
In modern international sales it was established that it was seller‘s duty to deliver the goods.38
30
Ibid. at p.186
See the Convention, arts. 49, 64, 72 and 73 ("may declare the contract avoided"), cited in Hamburg, M. U ‗The Remedy of Avoidence of
Contract Under CISG—General Remarks and Special Cases‘(2005-2006) 25 J.L. & Com. at P-423.
32
See Mullis, A. ‗Termination for Breach of Contract in C.I.F. Contracts Under the Vienna Convention and English Law: Is There a
Substantial Difference?‘ in E Lomnicka and G Morse (eds), Contemporary Issues in Commercial Law (Essays in honor of Prof. A.G. Guest)
(1997), 137-160, available at http://www.cisg.law.pace.edu/cisg/biblio/mullis.html
33
Kazimierska, A. (1999-2000) at p. page 95; Schlechtriem, P (n.23)at para III.
34
See Article 25 ; Kazimierska, A. (1999-2000) at p- 104; ‗…in determining whether a breach is fundamental, one must also take into
account the possibility to cure the defect by means of reasonable efforts, as well as the possibility of using the goods despite that defect.‘
cited in Ferrari, F. ‗Fundamental Breach of Contract Under the UN Sale Convention- 25 Years of Article 25 CISG‘ (2005-2006) 25 J.L. &
Com. 503,at p- 504
35
Article 49(1)(a), 64(1)(a), 72 (1) (anticipatory breach) 73 (1) and (2) (instalment contracts). 'Fundamental breach' is defined in article 25.
36
See Mullis, A. ‗Avoidance for Breach under the Vienna Convention; A Critical Analysis of Some of the Early Cases‘ (1998) 326-355. at
p- 338, available at http://www.cisg.law.pace.edu/cisg/biblio/mullis1.html.; Kazimierska, A. ‗The Remedy of Avoidance under the Vienna
Convention on the International Sale of Goods‘ Kluwer (1999-2000) 79-192 , at p-104, available at
http://cisgw3.law.pace.edu/cisg/biblio/kazimierska.html
37
See s.27 of SGA; Section 29 of SGA contains rules relating to the place, time, expense and other details of the delivery.
31
10
So seller‘s failure to comply his delivery obligation will entitle the buyer to reject the goods,
specially two general issues of particular importance in international sales will be considered,
namely, delivery at the wrong time and delivery at the wrong place.
Delivery at the wrong time
Delivery at the wrong time may, of course, justify the buyer in refusing to take the goods at
all.39 Where the seller fails to deliver the goods within the time limited for delivery, there is a
breach of condition and the buyer is entitled to reject the goods and treat the contract as
repudiated.40 In commercial contracts, time is frequently construed of the essence with respect
to delivery,41even though this is not expressly stated in the words of the contract.42 In addition,
Baron Bramwell 43 says that in the absence of express term it is necessary for those who
construe the instrument to see whether the parties intend to do it. However, in Compagnie
Commerciale Sucres et Denrées v C Czarnikow Ltd 44 it was established that, there is no
presumption or rule of law that stipulations as to time of delivery are of the essence of the
contract. Upon this point some judicial dictums45 unanimously says that where the agreement
was that a ship should sail on a particular day, that was a condition precedent, and breach of
38
See Benjamin's at 18–21; Scottish & Newcastle International Ltd v Othon Ghalanos Ltd [2008] UKHL 11, [2008] 1 Lloyd's Rep. 462.;
Wiskin v Terdich Bros Pty Ltd ( 1928) Arg LR, at p. 242-3. For pre 1893 Act (where delivery was buyer‘s duty) see Benjamin 8-018; and
also Smith v Chance (1819) 2 B. & Ald. 753 at 755; Wood v Tassell (1844) 6 Q.B. 234; Wilkinson v Lloyd (1845) 7 Q.B. 27 at 44.
39
See Atiyah, S.P. (2005) Sale of Goods (11th edition ), Publisher: Pearson Longman, at p-542.
40
See Bailhache J. in Dudley, Clarke & Hall v. Cooper, Ewing & Co, (July 9, 10, 11, 14, 1919) Unreported, cited by McCardie J. in Hartley
v Hymans [1920] 3 K.B. 488; Kwei Tek Chao and Others (Trading As Zung Fu Co.) v British Traders and Shippers LD. [1954] 2 Q.B. 459
per Devlin J. at p-472.
41
See Hartley v Hymans [1920] 3 K.B. 483 per McCardie, J.
42
See 1979 Act s.10(1); Bowes v. Shand (1877) 2 App. Cas. 455 , per Lord Cairns L.C. at 463, 464. (the sale of rice); Reuter v. Sala (1879)
4 C. P. D. 239 , per Cotton L.J at 249. (sale of pepper); Sharp v. Christmas (1892) 8 Times L. R. 687, per Lord Esher M.R.(the sale of
potatoes); Plevins v. Downing 1 C. P. D. 226. Per Brett J. (deliver of iron); Coddington v. Paleologo (1867) L. R. 2 Ex. 193 , per Martin B. at
196, 197; Cerealmangimi SpA v Toepfer [1981] 1 Lloyd's Rep. 337 ; Hartley v Hymans [1920] 3 K.B. 475, 483.
43
See Tarrabochia v. Hickie , (1856) 1 H. & N. 188; 156 E.R. 1168.; Bunge Corp v Tradax Export SA, [1981] 2 Lloyd's Rep 1, per Lord
Wilberforce at 6 ―…the Courts should not be reluctant, if the intentions of the parties as shown by the contract so indicate, to hold that an
obligation has the force of a condition, and that indeed they should usually do so in the case of time clauses in mercantile contracts.‖
44
(1990)1 W.L.R. 1337, 1347; Paton & Sons v. Payne & Co (1897) 35 S. L. R. 112
45
See Bunge Corp v Tradax Export SA, [1981] 2 Lloyd's Rep 1, per Lord Lowry, at 8; Bentsen v. Taylor, Sons & Co. [1893] 2 Q. B. 279.
per Lord Esher M.R; Plevins v. Downing. (1875-76) L.R. 1 C. P. D. 226 per Brett J.; see also See Blackburn on Sale, 3rd ed. , pp. 244 et
seq, cited in Hartley v Hymans [1920] 3 K.B. 484.
11
this condition give the buyer a right to treat the contract as at an end. In Hong Kong Fir,46
however, Diplock L.J. stated that time stipulation is not a condition; it is merely an
‗innominate‘ or ‗intermediate‘ term, unless the breach of it is seen to have deprived the party
not in default of substantially the whole benefit which he was intended to obtain from the
contract. There are many cases,47 however, where terms of the breaches do not deprive the
innocent party substantially, were nonetheless held to be conditions any breach of which
entitled the innocent party to rescind the contract. Therefore, in Bunge48 Lord Wilberforce
rejected
Mr.
Justice
Parker
contention
and
respectfully
endorse
Lord
Justice
Megaw‘s49decision.
Moreover, where the contract has no proviso as to the time of delivery, the goods must be
delivered within a reasonable time.50 What is a reasonable time is a question of fact. But
Maule, J.51 stated that the sailing within a reasonable time would also have been held to be a
condition precedent. The case of Freeman v Taylor,52 however, is an express authority that
the delivering within a reasonable time is not a condition precedent.
The obligation to deliver on time as a condition has traditionally been reinforced by treating is
as part of the description of the goods.53 As Lord Cairns cogently shown by the judgment in
Bowes v Shand54 that this implied term is a condition of the contract and, if the seller shipped
late, then, he is in breach of section 13 and buyer has the right to reject goods. However, the
introduction of section 15A takes away the right to reject for braches of s.13; if the breach is
46
Hong Kong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1961] 2 Lloyd's Rep. 494; supported by Mr. Justice Parker in Bunge
Corporation v. Tradax Export S.A. (1979) 2 Lloyd's Rep. 477.; see also Cehave N.V. v Bremer Handelgesellschaft m.b.H. (The Hansa Nord),
[1975] 2 Lloyd's Rep. 445; [1976] 1 Q.B. 44; Reardon Smith Line Ltd v Hansen-Tangen, [1976] 2 Lloyd's Rep. 621; [1976] 1 W.L.R.
47
See Bowes v. Shand , (1877) 2 App. Cas. 455; Reuter v. Sala , (1879) 4 C.P.D. 239 per Cotton L.J.
48
Bunge Corp v Tradax Export SA.[1981] 2 Lloyd's Rep 1 at 6.
49
Bunge Corp v Tradax Export SA. [1980] 1 Lloyd's Rep. 294 in the Court of Appeal.
50
See Sale of Goods Act 1979, section 29(3), s.59; Hick v Raymond and Reid (1893) A.C. 22,
51
See Glaholm v Hays, Irvine, and Anderson. 133 E.R. 743; (1841) 2 Man. & G. 257.
52
131 E.R. 348; (1831) 8 Bing. 124.; See also SHV Gas Supply & Trading SAS v Naftomar Shipping and Trading Co. Ltd. Inc. [2005]
EWHC 2528 (Comm), [2006] 1 Lloyd's Rep. 163.
53
See Macpherson Train & Co Ltd v. Howard Ross & Co. Ltd. [1955] 1 W.L.R. 640 per McNair, J.; Kwei Tek Chao and Others (Trading
As Zung Fu Co.) v British Traders and Shippers LD. [1954] 2 Q.B. 459 per Devlin J. at p-472.
54
(1877) 2 App Cas 455, at p.468, HL.
12
only slight. Law Commission,55 however, indicated that, the traditional position has not been
changed and, even if the goods are shipped one day late, the goods can still be rejected for
breach of section 13. Therefore, it says that in the English law time of performance is often
treated as of the essence of the contract such that failure to perform on time, even if only
slightly late, will entitle the buyer to treat the contract as at an end.
As a general rule, under the Convention, late delivery does not constitute a fundamental
breach. 56 In most sales contracts there will be express provisions as to the time of
performance. Thus, where the parties have settled that the delivery should be executed ‗in the
quickest possible way‘ 57 and ‗the seller is aware of the urgent need of the goods‘58 delivery
hardly a week after the stipulated date was held to be a fundamental breach. In the absence of
express provision, Convention contains a fall-back provisions.59 The buyer‘s declaration of
avoidance requires additionally either a fundamental breach 60 or a failure by the seller to
perform within an additional period of time set by the buyer for performance,61 provided that
this period is of a reasonable length.62 Williams,63 thus, says that late delivery can only be
fundamental where the buyer sets an additional period of time within which the seller fails to
perform. In case of goods, however, with rapidly fluctuating prices64 and seasonal65 a short
delay would entitle the buyer to declare the contract avoided immediately without fixing the
55
See Report No 160, Sale and Supply of Goods (1987), para 4.24
See Landgericht Miinchen,Germany, 20 Feb. 2002, available at http://cisgw3.law.pace.edu/cases/020220g1.html; Oberlandesgericht
Miinchen, Germany, 1 July 2002, available at http://cisgw3.law.pace.edu/cases/020701g1.html)
57
See Hamburg, M. U ‗The Remedy of Avoidance of Contract Under CISG—General Remarks and Special Cases‘(2005-2006) 25 J.L. &
Com. at P-435
58
See Oberlandesgericht Diisseldorf, Germany, 21 Apr. 2004, available at, http://cisgw3.law.pace.edu/cases/040421g3.html
59
Articles 33, of the Convention.
60
Articles 25
61
Articles 47(1); Mullis, A. (1998) at p- 350
62
See Honnold, O.J. (1999) Uniform Law for International Sales under the 1980 United Nations Convention (3rd edition) Kluwer Law
International, at p-211, available at http://www.cisg.law.pace.edu/cisg/biblio/honnold.html.
63
See Williams, E.A. ‗Forecasting the Potential Impact of the Vienna Sales Convention on International Sales Law in the United Kingdom‘
Review of the Convention on Contracts for the International Sale of Goods (CISG), Kluwer Law International (2000-2001) 9-57, available
at http://www.cisg.law.pace.edu/cisg/biblio/williams.html
64
Hamburg, M. U (2005-2006)at p-435
65
See, Oberlandesgericht Disseldort Germany, 24 Apr. 1997, available at http://cisgw3.law.pace.edu/cases/970424g1.html; Corte di
Appello Milano, Italy, 20 Mar. 1998, available at http://cisgw3.law.pace.edu/cases/980320i3.html.
56
13
additional time. Schlechtriem66 says that the late delivery of goods with a quoted market
price is normally considered a fundamental breach. Furthermore, Schwenzer67says that where
the seller promises the buyer several times that he will deliver at a later date, and by so doing
puts him off for an unreasonably long period may amount to a fundamental breach. Thus,
even if it was not fundamental before68or an insignificant breach69 the buyer can automatically
terminate the contract.70
As asserted both by commentators and courts, a mere delay in delivery of the goods does not
per se amount to a fundamental breach.71 Ferrari,72 however, says that it can only be derived
from either the agreement of the parties, the practice, or the usages which bind the parties
pursuant to Article 9 that compliance with a particular deadline is essential for the buyer.
Therefore, a mere delay can be considered a fundamental breach of the contract. Further, a
buyer could hardly avoid the contract for breach of late delivery, where the seller was not
informed of the purpose of the purchase.73 Thus, time is of the essence and an integral74 part
of the delivery obligation, any delay will amount to a fundamental breach.
Early Delivery
Where a time has been fixed for delivery, it would appear that delivery before that agreed date
is a breach of contract, entitled the buyer to reject the goods.75 As Lord Cairns76 stated that ‗I
66
See Schlechtriem, P. ‗Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods‘(1986), at n.210,
available at http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html.
67
See Schwenzer, I.‗Avoidance of the Contrtract in Case of Non-Conforming Goods (Article 49(l)(A) CISG)‘ (2005-2006) 25 J.L. & Com.
437, at p- 439.
68
Ibid. n.6 at p 124
69
Mullis, A. (1998) at p-350
70
Art 49 (1) (b)
71
Ferrari, F. (2005-2006),at p-504 (fn. 119)
72
Ibid.. (fn 123).
73
See Babiak, A. ‗Defining "Fundamental Breach" Under the United Nations Convention on Contracts for the International Sale of Goods‘
(Spring 1992) 6 Temp. Int'l & Comp. L.J. 113, at 114 cited in Jianming Shen,
74
See DiMatteo, A.L., et al. ‗The Interpretive Turn in International Sales Law: An Analysis of Fifteen Years of CISG Jurisprudence‘
(Winter 2004) 34 Northwestern Journal of International Law and Business 299-440. available at
http://cisgw3.law.pace.edu/cisg/biblio/dimatteo3.html
75
Reference was made to Cheshire and Fifoot, Law of Contract, 4th ed. (1956), pp. 221-222. Cited in Cehave v. Bremer [1976] Q.B. 44 at
Page 52
76
See Bowes v Shand (1877) 2 App.Cas. 455, at p 464.
14
should say it meant that the shipment must be made…neither before nor after those months.‘
This has been reaffirmed by the HL in the leading case Bunge.77 Therefore, it makes clear that
goods shipped too early can be rejected.
The option given, under the Convention, the buyer to take or refuse delivery would apply only
where the seller delivers goods at an earlier date; which would be inconsistent with the
contract.78 It is up to the discretion of the buyer whether he accepts early delivery or not.79
The buyer‘s refusal of an early delivery need not be based on a showing of inconvenience or
fundamental breach.80 Article 52(1) does not provide the buyer the right to avoid the contract
but the right to refuse the early delivery.81
Delivery at the wrong place
As to the place of delivery the seller tenders delivery of the goods at the wrong place depends
on whether the stipulation is a condition or is merely an intermediate term. Thus, Donaldson
J82 says that to deliver in the right place is ordinarily a condition of the contract. However,
Benjamin, 83 said that there are some cases where the place of delivery might well be
considered to be an intermediate term and entitle the buyer to reject the goods only if it is
substantially deprive the buyer of the whole benefit of the contract. The obligation to deliver
in the right place is a condition of the contract; as in international sales it is treated as forming
part of the description.84 Moreover, section 32(1) provides that, as to the place of delivery,
77
See Bunge Corp v Tradax Export SA. [1981] 1 W.L.R. 711 at 724–725.
Article 30 and 52(1)
79
See Enderlein, F. (1996) Rights and Obligations of the Seller under the UN Convention on Contracts for the International Sale of Goods,
Ch. 5, 133-201, available at http://www.cisg.law.pace.edu/cisg/biblio/enderlein1.html.
80
See Comments on Article 52 by John O. Honnold [U.S.] in the 3rd ed. (1999) of the most frequently cited text on the CISG: Uniform Law
for International Sales, available at http://www.cisg.law.pace.edu/cisg/text/e-text-52.html
81
Ibid.
82
See Aruna Mills Ltd v Dhanrajmal Gobindram [1968] 1 Q.B. 655 at 665.
83
See Benjamin 8-024
84
Chuah, J. (2005) The Law of International Trade (3rd ed ), London : Sweet & Maxwell, at p-91; Gill & Duffus SA v. Societe Pour
L'Exportation des Sucres SA [1985] 1 Lloyds Rep 621.
78
15
delivery of the goods to a carrier is prima facie deemed to be a delivery of goods to the buyer.
But Lord Rodger85 arguing that the presumption under section 32 is displaced and thus under
the English law, the goods would not have been ‗delivered‘ to the buyer by being shipped on
the carrier‘s vessel. The application of s.15A for minor breach, however, is not clear.
As for the place of delivery, the Convention defines that, where a contract specified a
particular place of delivery and the seller delivers the goods at the wrong place, the buyer can
thereby reject the goods and declare the contract avoided only if dispatch from wrong place is
to be regarded as a fundamental breach of contract.86 Moreover, where the seller has agreed to
deliver the goods to a particular place and to hand them over to a carrier87 instructed by the
buyer or to place them at the buyer‘s disposal and tenders the goods at the wrong place, the
seller has defectively perform his delivery obligation, and is therefore liable under articles
45(1) et seq. If the seller delivered the goods at the wrong place, however, he can still deliver
at the right place before the delay which can constitute a fundamental breach.88
FAILURE IN RELATION TO THE NATURE, QUALITY OR CONDITION OF THE GOODS
In English law, the relevant duty of the seller in relation to the nature, quality or condition of
the good may derive from an express or implied term of the contract.89 In the case of express
terms, the right to reject depends on how the term is classified. 90 Thus, there will be an
automatic right to reject if the term is a condition, that is, ‗of the essence‘ of the contract.91
85
Scottish & Newcastle International Ltd v Othon Ghalanos Ltd, [2008] UKHL 11, [2008] Bus. L.R. 583, 589, at 20; further supported in
The Albazero [1977] AC 774 , per Brandon J and Roskill LJ 800–801 and 809–812 respectively. Their reasoning was approved by Lord
Diplock, at p 840
86
Article 25, 49(1) (a); Schlechtriem, P., Schwenzer, I. (2005) Commentary on the UN Convention on the International Sale of Goods (2nd
English edition), Oxford : Oxford University Press, at p- 368; LG Aachen 43 O 136/92, May 14, 1993 (F.R.G.), available at
http://cisgw3.law.pace.edu/cases/930514g1.html.
87
Articles 33.
88
See CA Grenoble #156, 29 March 1995, (Camara v. Magaron), Available at,
http://www.cisg.law.pace.edu/cisg/wais/db/cases2/950329f1.html cited in n.82 at p -240.
89
Ibid. n.75.
90
See T. & J. Harrison v. Knowles & Foster (1918) 1. K.B. 608
91
See Chuah, J. (2005) , at p-89, para 3-16.
16
But if the parties do not make it clear then it will generally be treated as an intermediate term
subject to the seriousness of the breach.92 On the other hand, there are number of implied
terms into every international sale described in the Act. These are conditions, 93 as to
description (s.13), satisfactory quality (s.14 (2)) and fitness for purpose (s.14 (3)). The
obligations imposed by these conditions must be complied to the seller otherwise the buyer
may be entitled to reject the goods.94
Correspondence with description
Most international sales controversies grow out of disputes over whether the goods conform
to the contract.95 Therefore, the first implied term concerns the conformity of the goods with
description.96 English courts strictly interpret this term as that the goods must correspond with
the contractual description.97 The words ―that description‖98meant precisely the contractual
description,99 that is, identification100 of the goods. Channell J101 describes that, ‗The term
‗sale of goods by description‘ must apply to all cases where the purchaser has not seen the
goods, but is relying on the description alone.‘ Hence, it would most frequently apply to
unascertained goods, 102 but it may be applicable to specific goods where there is no
identification otherwise than by description.103 To say that there is an implied condition that
the goods shall conform to the description is equivalent to saying that the buyer is entitled to
92
See Cehave N.V. v. Bremer Handelsgesellschaft m.b.H. , [1975] 2 Lloyd's Rep. 445; [1976] 1 Q.B. 44 per Lord Roskill
s. 13 (1) (A)
94
See Ademuni-Odeke, (1999) Law of International Trade, London : Blackstone, at p- 22
95
Honnold, O.J. (1999) at page 25.1
96
Section 13(1)
97
Mullis, A (1997); Wyer and Hawke v. Produce Brokers Co, (1921) 9 L1.L.Rep. 240, per Horridge J at 241; Biddell Bros. v. E. Clemens
Horst Co [1911] 1 K.B. per Hamilton J p- 220; .Macpherson Train & Co. Ltd. v. Howard Ross & Co. Ltd. [1955] 1 W.L.R. 640; Ashington
Piggeries Ltd. v Christopher Hill Ltd. [1972] A.C. 441; Niagara Grain Co. v. Reno, (1916), 8 O.L.R. 159, 32 D. L.R. 576 (contract for "No.
1 timothy" hay; No. 3 supplied); Alibastine Co. v. Canada Producer Co, (1914) 30 O.L. R. 394, 17 D.L.R. 813 (engine of specified type and
power).
98
This expression is also used in section 18, rule 5 , but the Act nowhere defines its meaning.
99
See Ashington Piggeries v. Hill [1969] 2 Ll.L.Rep. 425 , 464
100
See Ashington Piggeries Ltd. v Christopher Hill Ltd. [1972] A.C. 441, per Lord Hodson at 466
101
See Varley v. Whipp [1900] 1 Q.B. 513 , 516
102
Ashington Piggeries Ltd. v Christopher Hill Ltd. [1972] A.C. 441, per Lord Guest at 475; Arcos Ltd. v. E. A. Ronaasen & Son [1933]
A.C. 470
103
See Varley v. Whipp, [1900] 1 Q. B. 513, per Channel J, at p. 516; New Hamburg Mfg. Co. v. Webb, 1911, 23 O.L.R. 44, at p. 55;
Thornett v. Beers, [1919] 1 K.B. 486, at pp. 488-9; Phillips v. Lamdin [1949] 2 K.B. 33, per Lord Hodson at 467.
93
17
get what he bargained for.104 Thus s.13 makes ‗description‘ a condition, but the academics
writings105 and judicial dictum,106 however, suggests that not all the descriptions of goods are
conditions.
When the words in question relate only to the quality of the goods and their description, the
condition applied by s. 13 has no application.107 The distinction between these two conditions,
however, is made by Lord Dunedin in Manchester Liners Ltd. v. Rea Ltd.108 that defects in
quality do not render the goods not in conformity with the description if the goods remain in
substance the goods contracted for. Furthermore, where there was a substantial addition to the
commodity described, then it might be that the goods plus this addition would not correspond
with the description.109Moreover, Chuah 110 stated that in international sales shipping terms
are often treated as forming part of the description and hence, contractually binding.
Unless goods are delivered which comply with the contract description, buyers, subject to the
de-minimis rule,111 are entitled to reject.112 Therefore, even a minor nonconformity between
the goods and their description, unless the nonconformity is de-minimis, will entitle the buyer
to reject the goods.113 Scrutton L.J, thus, quoting McCardie J.114 stated that, there is a virtual
presumption that words used in a commercial agreement are for the purpose and normally be
taken seriously.
104
See Chanter v. Hopkins, 1838, 4 M. & W. 399, per Lord Abinger, cited in Bowes v. Shand, (1877) 2 App. Cas. 455, per Lord Blackburn
at p. 480
105
See Ademuni-Odeke, (1999) at p-24, 25; Takahashi, K (2003) at 109.
106
See Ashington Piggeries Ltd. v Christopher Hill Ltd. [1972] A.C. 441, per Lord Diplock, at 503; Macpherson Train & Co. v Howard
Ross & Co (1955) 1 WLR 640; Tradax Internacional v Goldschmidt, [1977] 2 Lloyd's Rep; Tradax Export v European Grain &
Shipping,[1983] 2 Lloyd's Rep. 100.
107
See Alfred C Toepfer v. Continental Grain Co. (1974) 1 Lloyd‘s Rep 11
108
(1922) 2 A.C. 74, at 80; Ibid. n.123
109
See Pinnock Brothers v. Lewis & Peat Ltd. [1923] 1 K.B. 690; Robert A. Munro & Co. Ltd. v. Meyer [1930] 2 K.B. 312; British oil Cake
Co. Ltd. v. J. Burstall & Co. Ltd. (1923) 15 Ll.L.Rep. 46; The Bow Cedar [1980] 2 Lloyd's Rep.601; Ashington Piggeries v. Hill [1972] A.C.
441.
110
Chuah, J. (2005) at 91; Meyer v Travaru (1930) 37 Lloyd‘s Law Rep 204, per Rowlatt J at p 205. like, ‗the name of the vessel to be used‘
(Thomas Borthwick Ltd v Bunge Ltd (1969) 1 LI.R. 17); ‗time of shipment‘ (Asmore v Cox (1899) 1 Q.B.436); ‗place of shipment‘ (Gill &
Duffus v Societe pour l‘Exportation des Sucres (1985) 1 Lloyd‘s Rep. 621); ‗route to be used‘ (Bergerco USA v Vegoil (1984) 1 Lloyd‘s
Rep. 440); ‗Packaging‘ (Manbre Saccharine Co. Ltd v Corn Products Ltd (1919) 1 K.B. 198); ‗Nomination of port of shipment‘ (Boyd v
Louca (1973) 1 Lloyd‘s Rep. 209).
111
S. 15A introduced by the Sale and Supply of Goods Act 1994
112
Rapalli v. K. L. Take Ltd. [1958] 2 Lloyd's Rep. 469, 479-480.
113
See Re Moore & Co. and Landauer & Co. (1921) 2 KB 519; Arcos Ltd. v. E. A. Ronaasen & Son [1933] A.C. 470
114
See Manbre Saccharine Co. Ltd v Corn Products Ltd (1919) 1 K.B. 198, cited in Chuah, J. (2005) at 89.
18
Satisfactory Quality
In order to reject the goods under s.14(2) the buyer has to show that, a term implies into a
contract of sale, that goods supplied under the contract must be of satisfactory quality, is a
condition,115 and he expressly or impliedly makes known to the seller any particular purpose.
The expression ―satisfactory quality‖ replaced the expression ―merchantable quality‖ which
started its statutory life in the 1893 Act.
The term merchantable quality was used for
commercial purpose, that is, if the goods are not fit for one purpose it could be fit for other
purpose.116 Under the new Act satisfactory quality requires fitness for all the purposes for
which goods of the kind in question are commonly supplied; 117 which do not have to be
specially made known to the seller.118
Inadequacy is sufficient to annotate the breach of the condition of satisfactory quality in any
of the goods supplied under the contract, will be a breach of condition for the whole of the
goods and will entitle the buyer to reject the goods.119 Therefore, a very trifling defect120 or
where the goods could not be safely121 used was not merchantable which will entitle the buyer
to reject the goods.122 Additionally, Diplock .J123 held that the goods to be of such condition
that they would remain of merchantable quality from the time of shipment throughout normal
transit to the destination and for a reasonable time thereafter for disposal otherwise the buyer
can exercise his right of rejection. Chuah, 124 however, argue that there is no continuing
115
See Jones v. Just (1868) L.R. 3 Q.B. 197, per Mellor J. at 202-203
See Hardwick Game Farm v. Suffolk Agricultural Poultry Producers Association ("S.A.P.P.A.") [1969] 2 A.C. 31. per Lord Reid and
Lord Morris of Borth-y-Gest at p. 75 ; Henry Kendall & Sons v William Lillico & Sons Ltd (1969) 2 AC 31; Aswan Engineering
Establishment Co. v Lupdine Ltd (1987) 1 WLR 1; B. S. Brown & Son Ltd. v. Craiks Ltd. [1970] 1 W.L.R. 752.
117
See Goode, R. (2004) Commercial Law (3rd edition), London : LexisNexis UK, at p-299;
118
Bartlett v. Sidney Marcus Ltd[1965] 1 W.L.R. 1013, per Lord Denning M.R at 1017; see also, Shine v General Guarantee Corporation
(1988) 1 All ER 911; Lee v York Coach & Marine (1977) RTR 35; Business Appliances Specialist ltd v Nationwide Credit Corpn Ltd (1988)
RTR 32. On the current provision, See Thain v Anniesland Trade Centre (1997) SLT (Sh Ct) 102.
119
See Lamarra v Capital Bank plc (2007) SC
120
s.14 (2 B) (c), see also See Henry Kendall & Sons v William Lillico & Sons Ltd (1969) 2 AC 31 per Rougier .J.; Law Commissions
Final Report para 3.34. Though this holding was deprecated with the reasoning of the majority in Henry Kendall & Sons v William Lillico
& Sons Ltd.
121
s.14 (2B) (d)
122
Bridge, M. (2007) The international sale of goods: law and practice (2nd edition), Oxford : Oxford University Press, at p- 179.
123
See Mash & Murrell Ltd. v. Joseph I. Emanuel Ltd. [1961] 1 WLR 862, [1961] 1 All ER 485 (QB); Crother v Shannon Motor Co (1975)
1 WLR 30; s.14 (2B) (e))).
124
See Chuah, J. (2005) at 95, para 3-26.
116
19
obligation of satisfactory quality. Above all, with Lord Diplock 125 it can be said that ‗in
commercial sales a short digression from the stipulated standard of quality will amount only
to a warranty, a breach of which would not entitle the buyer to reject the goods.‘ Furthermore,
Walton J.126 hold that, where a specific good is sold over the counter of a shop to a person
who has an opportunity of examining the good sold, there was no implied condition of quality.
Bridge,127 Ademuni-Odeke, 128 further, says that the ambit of s.14(2 ) covers not only the
goods actually bought by the buyer and passing to him, but packages or containers in which
the goods are sold, 129 as well as information and instructions supplied with the goods.130
Failure to comply this obligation will be breach of s. 14(2) and rendering the buyer to
terminate the contract.
Fitness for purpose
In order to exercise an automatic right of rejection under s.14 (3), the particular purpose for
which the goods are required must be made known by the buyer to the seller, 131 and the
circumstances must be such as to show that the buyer relied, need not be total or exclusive,132
on the seller‘s skill or judgment.133 In Hardwick Game Farm v. S.A.P.P.A134 thus, defines a
communicated purpose, if stated with reasonably sufficient precision, will be a particular or
given purpose. If this purpose is shown by the buyer, then no express intimation by the buyer
125
Christopher Hill Ltd. v. Ashington Piggeries Ltd. [1972] A.C. 441,at p. 511; See also W. N. Lindsay & Co. Ltd. v. European Grain &
Shipping Agency Ltd. [1963] 1 Lloyd's Rep. 437; . s.15A of the new 1994 Act.
126
Preist v Last [1903] 2 K.B. 148 p. 150, for opposing view see Mash & Murrell Ltd v Joseph I Emanuel Ltd [1961] 2 Lloyd's Rep. 326per
Harman L.J.
127
Bridge, M. (2007), at p 173
128
Ademuni-Odeke, (1999) at p-26
129
Geddling v Marsh (1920) 1 KB 668; Niblett v Confectioner‘s Materials Ltd (1921) 3 KB 387
130
Wormell v RHM Agriculture (East) Ltd (1987) 1 WLR 1091
131
See Christopher Hill Ltd. v. Ashington Piggeries Ltd. [1972] A.C. 441 page 477
132
See Cammell Laird & Co. Ltd. v. Manganese Bronze and Brass Co. Ltd. [1934] A.C. 402 , per Lord Wright, at 427; and the earlier case
of Medway Oil & Storage Co. Ltd. v. Silica Gel Corporation (1928) 33 Com.Cas. 195 , per Lord Sumner, at 196; It is well settled that the
reliance on the seller's skill and judgment need not be total or exclusive, though the Act makes no reference to partial reliance.
133
See Chuah, J. (2005) at p- 94, para 3-25.
134
(1969) 2 A.C. 31, per Lord Pearce at p. 114, per Lord Morris of Borth-y-Gest. at p. 93
20
is necessary; it will be implied135 and be an easy step to draw the inference of reliance,136
albeit he had never previously supplied goods of the particular dimensions ordered. 137 In
S.A.P.P.A,138 however, Lord Reid contended that the case Manchester Liners Ltd. v. Rea Ltd.
139
is not any authority for the assumption of reliance on the seller‘s skill and judgment. But
Preist v Last140 says that the whole trend of authority has inclined towards this assumption
and if it found that the goods was not fit for that purpose, when sold or after a short time,141
there was breach of that implied condition. Therefore, relying on a recent case of Clegg142 it
can be says that in English law, the buyer has a right to reject goods which are not of
satisfactory quality.
Under the convention, according to Schlechtriem,143the judgement of Brett. L.J in 1877 says
what article 35(1) today states; it imposes on the seller an obligation to deliver the quantity,
quality and description required by the contract and to contain or package the goods in the
manner required by the contract. These obligations will be express, or be implied.144 If seller‘s
failure to comply these obligations constitutes a fundamental breach 145 then buyer can declare
the contract avoided; he must give the notice of defect,146 subject to the provisions of article
135
See Mash & Murrell Ltd. v. Joseph I. Emanuel Ltd. [1961] 1 W.L.R. 862 , 866; Manchester Liners Ltd. v. Rea Ltd. [1922] 2 A.C. 74;
Brown v. Edgington (1841) 2 Man. & G. 279; Jones v. Bright (1829) 15 Bing. 533.
136
See Teheran-Europe Co. Ltd. v. S. T. Belton (Tractors) Ltd. [1968] 2 Q.B. 545 , per Lord Denning MR at 554; Jones v. Just (1868) L.R.
3 Q.B. 197 , per Mellor J. At 202- 203; Christopher Hill Ltd. v. Ashington Piggeries Ltd. [1972] A.C. 441 page 477
137
See Cammell Laird & Co. Ltd. v. Manganese Bronze and Brass Co. Ltd. [1934] A.C. 402
138
[1969] 2 A.C. 31. at p. 81.
139
(1922) 2 A.C. 74
140
[1903] 2 K.B. 148, p- 150
141
See Lambert v Lewis [1981] 2 Lloyd's Rep. 17
142
Clegg v Olle Andersen t/a Nordic Marine [2003] EWCA Civ 320, per Lady Justice Hale
143
Schlechtriem , P. ‗The Seller's Obligations Under the United Nations Convention on Contracts for the International Sale of Goods‘
(1984), Ch. 6, pages 6-1 to 6-35. at page 6-19. quoting Randall v. Newson, (1877)2 Q.B. 102 (C.A.), per Lord Justice Brett:: "The governing
principle ... is that the thing offered or delivered under a contract of purchase and sale must answer the description of it which is contained in
words in the contract, or which would be so contained if the contract were accurately drawn out." Available at
http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem10.html.
144
Mullis, A. ‗Avoidance for Breach under the Vienna Convention; A Critical Analysis of Some of the Early Cases‘ (1998) 326-355 at page
337, see also (fn 71) http://cisgw3.law.pace.edu/cisg/biblio/mullis1.html
145
Article 25
146
Article 39
21
40. Thus, only if there is a ‗serious‘ breach of contract for defects in the goods the buyer is
entitled to avoid the contract.147
Where the parties had explicitly agreed on certain central features of the goods, in doing so, if
the goods do not conform to such express term the courts would hold a breach to be
fundamental.148 This is the primary rule on the assessment of the conformity of goods to the
contract.149 Thus if the time for delivery has been essential in a contract, a reparable lack of
conformity will be considered a fundamental breach of contract.150 Mullis151 further, says that
late shipment by the seller may be a breach of Article 35(1) because it does not conform to the
contractual description. If the parties have not agreed otherwise, the secondary rule in Article
35(2) applies. With the default rule of Article 35(2)(a), the parties do not need to specify the
purpose, as long as the goods are to be used for their ordinary purposes. This rule is so
widely accepted as the seller‘s implied obligation to provide goods which conform to the
contract.152 The goods fit for ordinary purposes should be capable of being resold.153 To be fit
for ordinary purpose, further, where the goods are below average quality may also be said to
conform to the contract and still merchantable.154 Bianca,155 however, leaves the matter open
147
Article 49(1) (a); This avoidance is not subject to the precondition of fixing an additional period of time. (OLG Düsseldorf10 February
1994, available at http://cisgw3.law.pace.edu/cases/940210g2.html ; CISG Advisory Council Opinion No. 5 ‗The buyer's right to avoid the
contract in case of non-conforming goods or documents‘ available at http://www.cisg.law.pace.edu/cisg/CISG-AC-op5.html; Schlechtriem ,
P. Ibid n. 23
148
See CIETAC (China International Economic and Trade Arbitration Commission), 30 October 1991, available at
http://cisgw3.law.pace.edu/cases/911030c1.html; GERMANY, BGH, 3 April 1996 available at
http://cisgw3.law.pace.edu/cases/960403g1.html
149
Henschel, F. R. ‗Interpreting or supplementing Article 35 of the CISG by using the UNIDROIT Principles of International Commercial
Contracts and the Principles of European Contract Law‘ (November 2004) available at http://cisgw3.law.pace.edu/cisg/biblio/henschel.html;
Secretariat Commentary to Article 35(1) (Section 33(1) of the Commentary, http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-35.html;
GERMANY, OLG Stuttgart, 12 March 2001, http://cisgw3.law.pace.edu/cases/010312g1.html; see also SWITZERLAND,
Appellationsgericht Basel-Stadt, 22 August 2003, CISG-online 943. cited in http://www.cisg.law.pace.edu/cisg/CISG-AC-op5.html.
150
Kazimierska, A. (1999-2000), p- 107
151
Mullis, L.C.A. (1997),
152
Honnold, J.O., Documentary History of the 1980 Uniform Law for International Sales (Deventer, 1989) p. 255;Schwenzer, I. in
Schlechtriem, P. & Bacher, K.(eds.), Kommentar zum Einheitlichen UN-Kaufrecht 3rd ed. (München, 2000), Art. 35, p 377 cited in
Henschel, F. R (2004).
153
Veneziano, A Veneziano, A., "Non Conformity of Goods in International Sales. A Survey of Current Caselaw on CISG", International
Business Law Journal no. 1 (1997), p. 39-65, at 44.
154
Herber, R. & Czerwenka, B., Internationales Kaufrecht (München, 1991), Art. 35, p. 164, pt. 4; Ziegler, U., Leistungsstüringsrecht nach
dem UN-Kaufrecht (Baden-Baden, 1995);., p. 70; Su, X., Die vertragsgemäße Beschaffenheit der Ware im UNCITRAL-Kaufrecht im
vergelich zum deutschen und chinesischen Recht (Münster, 1996), p. 28. cited in Henschel, F. R (2004)
155
Bianca, C.M. & Bonell, M.J., Commentary on the International Sales Law (Milan, 1987), Art. 35, p. 281; see also, Honnold, J.O.,
Uniform Law for International Sales under the 1980 United Nations Convention, p. 255 et seq., pt. 225 see also (Mussels case)Germany 8
March 1995 Bundesgerichtshof [Supreme Court], available at http://cisgw3.law.pace.edu/cisg/cases/950308g3.html.
22
and undecided. Finally, a recent arbitral award on the CISG156 says that the average quality, or
of higher or lower quality of the delivered goods will be decided on the basis of price and
other circumstances. 157 In addition the divergences in the goods from governmental
regulations are to be considered a defect in quality.158 Schlechtriem,159 however, argues that
the violation of government food regulations must not necessarily represent a defect in quality,
unless other circumstances indicate otherwise. This has been confirmed in other cases,
including decisions from common law jurisdictions. 160 Furthermore, where the accompany
documents do not conform to the contract description, this is to be treated like a defect in
quality.161
It is possible that there is no fundamental breach in cases in which the buyer can make some
use of the defective goods.162 There are cases, however, appears to have been markedly less
strict on this factor. Thus, in an American case, 163 the seller's failure to comply with the
requirements entitled the buyer to terminate the contract notwithstanding that he may have
been able to make use of the goods actually delivered. In this sense, Mullis 164 opines to
156
Netherlands 15 October 2002 Netherlands Arbitration Institute, Case no. 2319, paragraphs 117 and 118, available at
http://www.unilex.info/case.cfm?pid=1&id=836&do=case>.
157
Bianca, C.M. & Bonell, M.J., (Milan, 1987), Art. 35, p. 281,pt. 3.1
158
BGH of 8 March 1995, BGHZ 129, 75 ff. available at <http://cisgw3.law.pace.edu/cases/950308g3.html>].; M. Caiato Roger v. La
Société
Francaise
de
Factoring,
Appelate
Court
Grenoble,
France
13
September
1995,
available
at
http://cisgw3.law.pace.edu/cases/950913f1.html, cited in
Neumann, T. ‗Features of Article 35 in the Vienna Convention;
Equivalence, Burden of Proof and Awareness‘ (2007/1) 81-97 http://www.cisg.law.pace.edu/cisg/biblio/neumann.html
159
Schlechtriem , P. Ibid n. 23
160
United States 17 May 1999 Federal District Court [Louisiana] (Medical Marketing v. Internazionale Medico Scientifica), available at
<http://www.unilex.info/case.cfm?pid=1&id=360&do=case>; Spain 2 March 2000 Audiencia Provincial [Appellate Court] Granada,
available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=889&step=Keywords>; Germany 21 August 1995 Landgericht [District
Court] Ellwangen , available at <http://www.unilex.info/case.cfm?pid=1&id=164&do=case>; Germany 29 January 2004 Oberlandesgericht
[Appellate Court] Frankfurt am Main, available at <http://www.unilex.info/case.cfm?pid=1&id=970&do=case>; Australia 17 January 2003
Supreme
Court
of
Western
Australia
(Ginza
Pte
Ltd
v
Vista
Corporation
Pty
Ltd),
available
at
<http://www.unilex.info/case.cfm?pid=1&id=961&do=case>; Austria 13 April 2000 Oberster Gerichtshof [Supreme Court]; available at
<http://cisgw3.law.pace.edu/cases/000413a3.html>;
161
GERMANY, BGH, 3 April 1996 available at http://cisgw3.law.pace.edu/cases/960403g1.html ; CISG Advisory Council Opinion No. 5,
at para 4.9
162
Bundesgerichtshof, 3 April 1996, http://cisgw3.law.pace.edu/cases/960403g1.html; OLG München, 2 March 1994,
http://cisgw3.law.pace.edu/cases/940302g1.html; see also, OLG Düsseldorf 6 U 119/93, 10 February 1994,
http://cisgw3.law.pace.edu/cases/940210g2.html; OLG Frankfurt, 17 September 1991, http://cisgw3.law.pace.edu/cases/910917g1.html;
OLG Frankfurt, 18 January 1994, http://cisgw3.law.pace.edu/cases/940118g1.html.). Cited in Huber, P. (January 2007) 13-34, p-26
Ibid.n.23.
163
Delchi Carrier S.p.A. v. Rotorex Corp 71 F 3d 1024 (1995) cited in Mullis, A (1998) Ibid.n.159; see also 71 RabelsZ (January 2007) 1334, p-26 available at http://cisgw3.law.pace.edu/cisg/biblio/huber1.html cited in Huber, H. (January 2007) 13-34, p-26 Ibid.n.23.
164
Mullis, A (1998) page 341, Ibid.n.159; see also Koch, P. ‗The Concept of Fundamental Breach of Contract under the United Nations
Convention on Contracts for the International Sale of Goods (CISG)‘ at p-234
23
consider all the surrounding circumstances and intention165of the parties so as to decide how
important the term broken was to the buyer.
In Article 35(2)(b), it is stated that the seller only has to comply with the particular purpose
made known to him both expressly and impliedly. 166 So where the buyers relied on the
seller‘s skill and judgment and the goods contracted for are not fit for particular purpose,
which the seller knew, buyer can reject the goods.167 There is no reliance where the buyer acts
contrary to advice from the Seller.168
As Bianca169 Jafarzadeh170 and LachmiSingh171 said that close consideration of Arts. 46(2),
(3), 71(1) and the principle of good faith dictates that the buyer is not entitled to reject the
goods for minor nonconformity or he knew or could not have been unaware of the lack of
conformity. So from above discussions it can be stated that the common core of all legal
systems: that the seller shall assume responsibility that the goods sold conform to the
contractual agreement.
165
Caiato v. Soc. Française de Factoring International Factor France, Cour d'Appel de Grenoble, 13 September 1995,
http://cisgw3.law.pace.edu/cases/950913f1.html, cited Mullis, A (1998) page 341, (fn 83)Ibid.n.159 ; Spain 3 October 2002 Audiencia
Provincial [Appellate Court] Pontevedra, available at <http://www.unilex.info/case.cfm?pid=1&id=895&do=case>
166
Neumann, T. (2007/1), note 7 see also fn.4; see also Landgericht Ellwangen, 21 August 1995, 1 KfH O 32/95. (Spanish paprika case)
available at http://cisgw3.law.pace.edu/cases/950821g2.html
167
Landgericht
München,
Germany
27
February
2002,
Cisg-online.ch
number:
654
available
at
http://cisgw3.law.pace.edu/cases/020227g1.html cited in Neumann, T. (2007/1), Ibid. n174; ‗Reliance occurs when the seller is a
professional or an expert but not merely an intermediary‘ (Schlechtriem, p., Schwenzer, I. (2005) Commentary on the UN Convention on the
International Sale of Goods, (ed) Published Oxford : Oxford University Press, at p. 422.)
168
Enderlein, F. and Maskow, D. (1992) International Sales Law: United Nations Convention on Contracts for the International Sale of
Goods; Convention on the Limitation Period in the International Sale of Goods, Publisher New York : Oceana, at p.109; Henschel, F. R.
(2005) The Conformity of Goods in International Sales, Copenhagen : Thomson/GadJura, at p. 237. cited in Neumann, T. (2007/1),
Ibid.n.174.
169
Bianca, C. M. et al. (1987) Commentary on the International Sales Law. The 1980 Vienna Sales Convention (1987) Milano : Giuffr e, at
p.392.; see also Schlechtriem, P. (1986) Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods
Published by Manz, Vienna, at p- 67 available at http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem-35.html .
170
Jafarzadeh, M. (December 2001), note - 1.2.5.see aalso fn.263 Ibid. n. 9
171
Singh, L. ‗United Nations Convention on Contracts for the International Sale of Goods (1980) [CISG]: An examination of the buyer's
right to avoid the contract and its effect on different sectors of the (product) market‘ (February 2006), art. 49 available at
http://www.cisg.law.pace.edu/cisg/biblio/singh.html
24
Wrong quantity of the goods supplied
In the carrying out of a commercial contract some slight elasticity with regard to the quantity
of goods is unavoidable. 172 The tender of shortfall or excess quantity evidences an
unreadiness and unwillingness to perform the contract.173 Therefore, this duty is a strict one,
and any failure in this respect normally entitles the buyer to reject the incorrect quantity of
goods delivered.174 By s.30(1) the buyer has a statutory right to reject the contract goods if
the seller deliver less then the contracted amount, subject to section 30 (2A). Chitty, 175
however, argued that a delivery which is defective under this section does not entitle the
buyer to treat the contract as repudiated. Benjamin,176 however, mentioned that quantity of the
contract goods is part of their description; short delivery ranks as no delivery and it produce
much the same effect as that of breach of condition. Furthermore, s.30(2) provides that where
the seller delivers a quantity of goods excess than the buyer contracted to sell he can generally
reject the whole of the goods delivered subject to s.30 (2A).177 And it produces much the
same effect as that of breach of condition.178 This led to the conclusion that where the sellers
had delivered to the buyers a quantity of goods less or more than they have contracted for,
would be a breach of condition; thus entitling the buyers to reject the goods.
The Convention does not provide rule for less quantity delivered. Under Article 52(2) the
buyer may accept or reject any excess goods. The delivery of excess quantity can, in some
circumstances, constitute a fundamental breach and enable the buyer to avoid the contract and
172
See Benjamin 12-029; Reuter v. Sala, (1879) 4 C.P.D. 239; Falconbridge, D. J. (1921) Handbook Of The Law Of Sale Of Goods,
Canada Law Book Company, chapter v, available at http://chestofbooks.com/business/law/Handbook-Of-The-Law-Of-Sale-OfGoods/index.html, accessed on 15.03.09.
173
Ibid. n.176.
174
Honck v. Muller, (1881) 7 Q.B.D. 92 per Bramwell L. J. at p. 99; Gill & Duffus v Societe pour l‘Exportation des Sucres (1985) 1
Lloyd‘s Rep. 621.per Lord Diplock at p.396
175
See Beale, H. (2008) Chitty on contracts (30th ed.) London: Sweet & Maxwell, at 43-285 (available at Westlaw); Behrend & Co v
Produce Brokers Co [1920] 3 K.B. 530.
176
Benjamin 12.029; Polenghi v. Dried Milk Co. (1904) 10 Com. Cas. 42 ; Crozier, Stephens & Co. v. Auerbach [1908] 2 K. B. 161 , at p.
167; Champion v Short (1807) 1 Camp. 53, as explained in Tarling v O'Riordan (1878) 2 L.R.Ir. 82. cited in Beale, H. (2008), at 8-046.
177
Arcos Ltd v Ronaasen & Sons [1933] AC 470; Shipton Anderson & Co v Weil Bros & Co [1912] 1 KB 574; Gabriel, Wade & English
Ltd v Arcos Ltd (1929) 34 LI L Rep 306
178
Cunliffe v Harrison, (1851) 6 ExCh.903 at p.906
25
return the entire delivery.179 Honnold,180 further, says parties who are acting in good faith, a
seller‘s refusal to make a reasonable arrangement would give the buyer an added rationale for
supporting rejection of the entire shipment. The missing accompanying documents treat as a
defect in quantity.181 The buyer, however, may require accepting the goods when the excess
in quantity is trivial or is not inconsistent with the practices established by the parties or
usage182 or when the seller does not claim full payment for delivery183
RIGHT TO REJECT THE DOCUMENTS
Much of the English law on the international sale of goods was developed in relation to the
‗documentary sales‘ of commodities.184 Thus, the academics185 and courts186 have emphasized
that generally both in FOB contract and CIF contracts the role of the documents becomes
much more important delivery obligation. According to The Julia 187 sellers are obliged to
tender three documents188 to the buyer those are bill of lading (BOL), marine insurance policy
and invoice. Devlin J189 thus, says that, among these documents if they are tender as defective
or they are tendered late, then the buyer is entitled to reject.
According to Takahashi190 documentary breach arises when they are not in conformity with
the sale contract. The right to reject for nonconformity follows where the delivered document
179
demand cash for excess (Schlechtriem, P. (1986) at 79, Ibid. n.185; Honnold, O. J. (1999) at p 347 Ibid. n. 71 Lookofsky, J. ―The
1980 United Nations Convention on Contracts for the International Sale of Goods‖, 29 (December 2000) 1-192. p- 127 n- 235 (fn.1)available
at http://www.cisg.law.pace.edu/cisg/biblio/loo52.html)
180
Honnold, O. J. (1999) at p 347
181
CISG Advisory Council Opinion No. 5, Ibid. n.161.
182
Art. 9
183
Honnold, O. J. (1999) at p 347
184
Ibid.
185
Merrett, L. ‗Case Comment: Place of delivery in international sales contracts‘ (2008) Cambridge Law Journal, at p.246
186
Bowes v Shand (1877) 2 App.Cas. 455, per Lord Blackburn, at p 482; Alfred C Toepfer v Lenersan – Poortman NV [1980] 1 Lloyd‘s
Rep. 143.
187
Comptoir d'Achat et de Vente du Boerenbond Belge S/A Appellants; v Luis de Ridder Limitada Respondents. (The Julia) [1949] A.C.
293.
188
Moreover, Lord Wright in Smyth v Bailey (1940) 3 All ER 60, at p-67, mentioned notice of appropriation as another document which the
seller has to tender if the contract goods are unascertained; see also Proctor & Gamble v Becher , [1988] 2 Lloyd's Rep. 21, per Kerr L.J. at
22
189
Kwei Tek Chao v. British Traders and Shippers Ltd [1954] 2 Q.B. 459 at 480; Benjamin 19-144.
190
Takahashi, k. (2003) at p. 116
26
is not genuine.191 It is an essential part of the contract to tender genuine documents relating to
the goods complying with the contract to the buyer.192 A BOL contain false information about
an aspect of the performance of the contract, like where it did not, refer the initial shipment of
the goods193or portray the actual (contractual) state of affairs at the time of shipment194 or the
wrong destination195 or deviate from stipulated route of voyage196 is not a genuine document.
The presence of a divergence clause in the BOL may entitle the buyer to reject the goods as it
may enable the carrier to depart from the stipulated shipment route.197 In contrast, Burstall v
Grimsdale198 says deviation clauses are now a common feature in the BOL which will not
entitle the buyer to reject the documents.
The shipping documents must be valid and effective not only at the date of shipment or when
it was issued but also at the time of tender, 199 that is, the whole of the voyage to be
undertaken.200 Any derogation from it can result in repudiation of the contract.201 Bailhache.
J, 202 however, contended that the seller does not warrant the validity or effect of his
documents. If they become invalid or inoperative in consequence of the outbreak of war, that
is the buyer‘s risk.203 The buyer cannot impose on the seller a guarantee that the documents
191
Griffin, B., and Day, D. M, (2003) The Law of International Trade (3rd ed) London : Butterworths LexisNexis, at p.80
James Finlay & Co. Ld. v. N. V. Kwik Hoo Tong H.M, (1929)1 KB 400, CA, per Scrutton L.J p 408; Kwei Tek Chao v British Traders
& Shippers Ltd [1954] 2 Q.B. 459 per Devlin J at p. 476) ; Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S (No.1) [2000] 1 Lloyd's
Rep. 211; P T Putrabali v. Société Est Epices [2003] 2 Lloyd‘s Rep 700; Kreditbank Cassel G.m.b.H. v. Schenkers Ltd. [1927] 1 K.B. 826;
43 T.L.R. 237 . per Bankes L.J at p. 835
193
Foreman & Ellams Ltd v Blackburn (1928) 2 KB 60
194
Landauer v. Craven & Speeding Brothers [1912] 2 K. B. 94 , at pp. 104, 105.
195
McKendrick, E. (2000) Sale of Goods, London : LLP, at p 662, (fn 78); Lecky & Co. Ltd v. Ogilvy Gillanders and Co. (1897) 3 Com.
Cas. 29; Soules CAF v. P. T. Transap of Indonesia (1999)1 lloyd‘s Rep. 917, p-921
196
McKendrick, E. (2000) p 662 (fn 80); Bergerco USA v Vegoil Ltd (1984) 1 Lloyds Rep. 440;
197
Shipton, Anderson & Co v. John Western & Co (1922) 10 Ll. L.R.762
198
(1906) 11 Com. Cas. 280
199
Karberg v. Blythe, Green, Jourdain & Co [1915] 2 KB 379; (1916) 1 KB 495, CA, per Swinfen Eady L. J. (p-506), per Bankes L.J. (p510), and per Warrington L.J. (p-514); Esposito v. Bowden. 7 E. & B. 763, per Willes J p- 783; in Janson v. Driefontein Consolidated
Mines. [1902] A. C. 484, per Lord Lindley p- 509.
200
Colin & Shields v. W Weddel &Co Ltd (1952) 2 All E.R. 337
201
Hansson v Hamel & Horley Ltd (1922) 2AC 36, per Lord Summer at P 46.
202
Sanday & Co. v. British and Foreign Marine Insurance Co. [1915] 2 K. B. 781. p- 786
203
Duncan, Fox & Co. v. Schrempft & Bonke. [1915] 3 K. B. 355., per Atkin J at p. 370; Groom v. Barber [1915] 1 K. B. 316. p 325
192
27
shall continue to be effective.204 If the documents were good in their inception the sellers had
performed their duty of the contract205 and they are bound to accept the tender.206
The buyer can reject the documents where the BOL is not clean.207 Where the BOL has been
altered to correspond with other documents that must be tendered by the seller, there is a
presumption that the BOL is unclean and entitled the buyer to reject the documents.208 Re
Salomon,209 in contrary, hold that alteration to the BOL does not entitled the buyer to reject
the documents; though Phillmore .J opposed in the same case. It is a trite law210 that where
the documentary defects is discovered before taking delivery of the goods, the buyers are
entitled to reject the consignment even though the goods had been paid for and property in
them had passed to the buyer.211 Documents may be defective where a c.i.f. seller tendered
documents which did not include all those required by the contract; the buyer could no doubt
reject the tender. 212 However Benjamin 213 said that question of rejection depends on the
significance of the missing document.
The position is, however, different, if the document, which reveals a defect in goods, is not, in
itself, a defective document.214 Benjamin,215 conversely, says that the documents disclosed a
breach in the goods justifying their (i.e., the goods) rejection or not itself justifying
204
McKendrick, E. (2000) at.p.372 para 13-038.; Manbre Saccharine Co Ltd v Corn Products Co Ltd (1919) K.B. 198
Landauer & Co. v. Craven & Speeding Brothers [1912] 2 K. B. 94.; Crozier, Stephens & Co. v. Auerbach. [1908] 2 K. B. 161
206
Sanders Brothers v. Maclean & Co. (1883) 11 Q. B. D. 327
207
Bridge, M. G. (2007)The international sale of goods: law and practice (2nd ed.) Oxford : Oxford University Press, at p178., para- 4.90; M
Golodetz & Co Inc v Czarnikow-Rionda Co Inc (The Galatia) [1980] 1 W.L.R. 495 per Donaldson J. at. p-509; Cehave NV v Bremer
Handelsgesellschaft mbH (The Hansa Nord) [1976] Q.B. 44.at 71
208
SIAT di del Ferro v. Tradax Overseas SA[1980] 1 Lloyd‘s Rep. 53
209
Re Salomon & Co Naudszus (1899) 81 L.T. 325
210
Gill & Duffus v. Berger [1984] A.C. 382, per Lord Diplock at p. 395
211
Kwei Tek Chao v. British Traders and Shippers Ltd. [1954] 2 Q.B. 459, per Devlin J p- 487; One may argue that in C.I.F. contract it is
predicted that property on the goods passes on the tender of documents. But Atkin L.J., in the course of his judgment in Hardy & Co.
(London) Ld. v. Hillerns and Fowler,[1923] 2 K.B. 490, dealt with this situation and says that the buyer undoubtedly retain a right, to
examine the goods when they arrive, and to reject them if they are not in conformity with the contract.
212
Re Denbigh Cowan & Co. and R Atcherley & Co. (1921) 90 L.J.K.B. 836.
213
Benjamin 19-148; Mantovani v Carapelli SpA [1978] 2 Lloyd's Rep. 63 at p.72 (affirmed without reference to this point [1980] 1 Lloyd's
Rep. 375).
214
Benjamin 19-146; Mullis, A. (1998) at pp. 344.345 Ibid. n.159; Tradax Internacional S.A v Goldschmidt S.A. [1977] 2 Lloyd's Rep 604.
per Slynn L.J at 612 613; P T Putrabali v. Société Est Epices [2003] 2 Lloyd‘s Rep 700, See 3 arguments in favour of this (Debattista, C,
(1998) The sale of goods carried by sea (2nd ed) London : Butterworths, , at. p192,193).
215
Benjamin, 19-147; Vargas Pena Apeztieguia y Cia v. Peter Cremer G.m.b.H. [1987] 1 Lloyd's Rep 394
205
28
rejection216 will entitle the buyer to reject the documents. A case decided in the High Court of
Australia,217 that a c.i.f. buyer is entitled to reject conforming shipping documents, if it should
subsequently turn out that the actual goods shipped under the conforming documents did not
in fact conform to the contract. Lord Diplock,218however, says that there was thus no rationale
for this decision and those judgments is not the law of England.
The buyer is entitled to reject the documents where the late shipment disclosed in the
documents. 219 The general is that the seller under c.i.f. contract must tender the shipping
documents to the buyer as soon as possible or the time specified in the contract of sale.220 The
buyer, therefore, is entitled to reject the documents if they are not tendered within the time
limit specified in the contract.221
Now the question is whether the 1994 Act has taken away the right to reject where the
documentary breach is only slight. Section 15A and 30(2A), however, applies to breaches
related goods;222 but it is arguable223 that section 15A should also apply in the documentary
aspects in shipment sales. Therefore, if the breach is so slight that it would be unreasonable
for him to reject them, then buyer can not reject the documents.
So far as the position under the Convention is concerned, it says little about the documents.224
These documents could be BOL, the insurance policy, invoice etc.225 Thus, failure to tender
216
Cehave NV v Bremer Handelsgesellschaft mbH (The Hansa Nord) [1976] Q.B. 44.per Roskill LJ at 71.
Henry Dean & Sons (Sydney) Ltd. v. O'Day Pty. Ltd. (1927) 39 C.L.R. 330 per Knox C.J. and Higgins J. , To which reference is made in
Berger & Co. Inc. Appellants v Gill & Duffus S.A. Respondents [1984] A.C. 382, by Lord Diplock at 391,392.
218
Berger & Co. Inc. Appellants v Gill & Duffus S.A. Respondents [1984] A.C. 382, by Lord Diplock at 391,392
219
Proctor & Gamble Phillipines Manufacturing Corpn. v. Kurt A. Becher G.m.b.H. & Co. K.G. [1988] 2 Lloyd's Rep 21
220
Sanders Bros v Maclean &co (1883) 11 Q. B. D. 327.
221
Alfred C Toepfer v Lenersan – Poortman NV [1980] 1 Lloyd‘s Rep. 143; . Parker v. Schuller (1901) 17 Times L. R. 299.
222
Law Commission Report No 160, Sale and Supply of Goods (1987) (available for download at
http://www.scotlawcom.gov.uk/downloads/rep104.pdf)
223
Benjamin, 19-151
224
Article 34, Mullis, L.C.A (1997).
225
Enderlein, F. ‗Rights and Obligations of the Seller under the UN Convention on Contracts for the International Sale of Goods‘
(1996),133-201, p.153 available at http://www.cisg.law.pace.edu/cisg/biblio/enderlein1.html.
217
29
conforming these documents constitutes a breach of contract. The right to avoid the contract
in accordance with Art 49(1)(a) ,however, is conditional upon the buyer establishing that the
breach was fundamental.226
Schlechtriem 227 says that the lack of insurance coverage may deprive the buyer of the
possibility of reselling the goods in transit; and this ignorance can constitutes a fundamental
breach. Moreover Huber228says that failure to present the documents required by the contract;
relevant usage; practices; or the presentation of defective documents must be regarded as a
fundamental breach. But in Cobalt sulphate case229the court refuse Huber views and reject
the buyer to declare the contract avoided, as he could not prove sufficient detriment to
constitute a fundamental breach. It was, further, argued by Schlechtriem,230 that it is possible
to assert a fundamental breach without proving the detriment.
According to Mullis 231 the decision of Cobalt sulphate case is the only case where the
question of fundamental breach under the Convention for tendering defective documents has
been considered. As it stated that the fundamental breach could not be determined by looking
at the documents exclusively. Mullis,232 nevertheless, argued that since Article 30 states that
the contract may impose separate obligations in relation to goods and documents. Therefore,
breach in respect of either, if fundamental, should entitle the buyer to avoid the contract.
Further, where the buyer could easily remedy the defective documents by obtaining correct
documents the seller can not treat the tender of defective documents as defective; and declare
the contract avoided.233 Mullis,234 however, contends that this is an unjustifiable burden on the
226
See Mullis, A. (1998) at p- 344,
Schlechtriem, P. (1986), 60, at para 210,
228
Schlechtriem (1998.), Commentary on the UN Convention on the International Sale of Goods (CISG) (2nd ed. in English translation by
Thomas) comment on art.49 (by Huber) at 16. cited in Takahashi, K (2003). Ibid.. n. 6.
229
GERMANY, BGH, 3 April 1996 available at http://cisgw3.law.pace.edu/cases/960403g1.html cited in Mullis, A. (1998) at p- 344, Ibid.
n. 41
230
Schlechtriem, P. (1986)
231
Mullis, A. (1998) at p- 346,
232
Ibid. at p- 346, 347; Mullis, L.C.A (1997).
233
OLG Dusseldorf 6 U 119/93, 10 February 1994, available at http://cisgw3.law.pace.edu/cases/940210g2.html; GERMANY, BGH, 3
April 1996 available at
http://cisgw3.law.pace.edu/cases/960403g1.html; LG Heidelberg O 42/92, 3 July 1992 available at
http://cisgw3.law.pace.edu/cases/920703g1.html
227
30
buyer which has no basis in the Convention. In other cases235 the buyer‘s remedied duty has
been resisted and courts have allowed buyer to avoid the contract.
In case of trivial documentary breaches Mullis236says that, to treat this trifling documentary
breaches court has to see what the buyer has expected from that particular contract. 237
Moreover Will238 has pointed out that it is to be judged objectively taking account of the type
of contract concluded the commercial background, and all the terms of the contract. So
pursuant to Takahashi 239 a presumption can be established that a documentary breach is a
fundamental breach.
LOSE THE RIGHT TO TERMINATE THE CONTRACT
Where a buyer makes unequivocal representations by express words or by implication that he
will accept the goods, may lost his right of rejection under the common law doctrines of
acceptance, waiver and estoppel; and the provisions of the SGA.
Acceptance
The notion of acceptance constitutes an important limitation upon the buyer‘s right of
return.240 In deciding acceptance the buyer must have a reasonable opportunity to examine the
goods 241 and to receive all the information from the seller. 242 The statute 243 distinguishes
234
Mullis, A. (1998). at pp. 347, 348.
ICC Court of Arbitration, 7531/1994,http://cisgw3.law.pace.edu/cases/947531i1.html ; LG Baden Baden, 19910814, 14 August 1991,
http://cisgw3.law.pace.edu/cases/910814g1.html
236
Mullis, A. (1998) at p- 348 349.
237
Article 25.
238
Bianca, C. M., Bonnell, M. J. (1987), comment on art. 25 (by Will. M); see also Text of Secretariat Commentary on article 49, para
7,(reads that the buyer will have right to reject the document albeit that discrepancy was of little practical significance) available at
http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-49.html
239
Takahashi, K (2003). P.127. Ibid. n. 6.
240
Stoljar, S. ‗The Doctrine of Acceptance in sales‘ (1957) 1 Melbourne U.L.R. 483. at P. 483; Goode, R. M. (2004), at p.346.
241
See sections 35(2) and 35(5); Goode, R. M. (2004), at p.221; Bridge, M. G. (2007), at p.441; Biddell Bros. v. E. Clemens Horst Co.
[1911] 1 K.B. per Hamilton. J.at P- 221; Polenghi v. Dried Milk Co (10 Com. Cas. 42 .I.
242
Clegg v Olle Andersen t/a Nordic Marine [2003] EWCA Civ 320 per Lady Justice Hale.
243
ss. 34 to 35
235
31
three244 ways of acceptance: (i) an intimation of acceptance, (ii) acts inconsistent with the
seller's ownership, and (iii) an acceptance because of unreasonable delay.
By express Intimation
The first portion of section 35 enacts that the buyer is deemed to have accepted the goods
when he intimates to the seller by words or by conduct that he has accepted
them245unqualifiedly.246 An acceptance is conditional, if, upon examination the goods being
ultimately found to be conform to contract.247 An intimation of acceptance before the buyer
has had a reasonable opportunity to examine the goods is not a binding acceptance.248 Atkin
L.J,249 however, contended that intimation of acceptance may be made before buyer has had a
reasonable opportunity of examination. Furthermore, where there having been acceptance of
the goods, the buyer is entitled to reject them for latent defects.250 Lord M'Laren,251 however,
firmly holds that, as the buyers had accepted and used the goods in question, they were barred
thereafter from rejection, even if the goods were affected by a latent defect.
Act inconsistent with the ownership of the seller
In general delivering or reselling the goods to a sub-buyer is an act inconsistent with the
seller‘s ownership.252 Similarly the resale of the goods before inspection253or delivering the
244
Scott L.J in Halsbury's Laws of England, Hailsham ed., vol. 29, p. 224, para. 297 (said the right to reject is lost by two ways, that is, (ii)
and (iii)) cited in Kwei Tek Chao v. British Traders and Shippers Ltd. [1954] 2 Q.B. 459, per Devlin J p- 485; Atiyah, P. S. (2005) at
508( further said a buyer can also be held to have accepted the goods, where he does not discover the seller‘s breach of his right)
245
Stoljar, S. (1957) at P. 483; Chuah, J. (2005) p. 161, para 5-02
246
Aird & Coghill v. Pullan & Adams, 7 F. 258.
247
Carter & Co. v. Campbell 12 R. 1075.
248
The Law Commissions cited in Atiyah, P. S. (2005), at p.511
249
Hardy & Co v Hillerns and Fowler, 1923] 2 K.B. 490.at 498
250
Mechan & Sons, Limited v. Bow, M'Lachlan & Co., Limited, (1910) S. C. 758, per Lord Salvesen at p. 763; Mechans v Highland Marine
Charters (1964) SC 48, per Lord Mackintosh; see also Fleming & Co. (Limited) v. Airdrie Iron Co. 9 R. 473;Carter & Co. v. Campbell, 12 R.
1075.; M'Caw, Stevenson, & Orr, Limited v. Maclaren & Sons20 R. 437; Munro & Co. v. Bennet & Son,(1911) S. C. 337.
251
Morrison & Mason, Limited v. Clarkson Brothers, (1898) 25 R. 427, at 433; see also, Nelson v. William Chalmers & Co., Limited (1913)
S. C. 441per Lord Kinnear p. 450; Pearce Brothers v. Irons, 7 Macph. 571; Mechans v Highland Marine Charters (1964) SC 48. per Lord
Justice-Clerk; Perkins v. Bell [1893] 1 Q.B. 193
252
Atiyah, P. S. (2005), at p.515; Morrison & Mason v Clarkson Bros (1898) 25 R 427.); Hardy & Co v Hillerns & fowler (1923) 2 KB 490
32
goods to the carrier for transmission to the third party254 would be an act inconsistent with the
ownership of the seller. In contrast, it was firmly established that delivering the goods to a
sub-buyer;255 a mere inquiry to resale256 or a claim against the insurer for damages257 is not an
inconsistent act. It is further, however, says that where the buyer do an act inconsistent with
the seller‘s reversionary right, buyer will lose his right of rejection.258 Moreover it was held
that where a buyer, with knowledge of the breach,259 takes delivery of the goods, acts upon it
and keeps them, it will be construed that he has accepted the goods.260
By laps of reasonable time
As Benjamin261 and Stoljar262said that, the notion of reasonable time prevents the existence of
any long-term right to reject. It is, therefore, necessary to consider what amounts to a
reasonable time. A reasonable time would include an opportunity of examining the goods263
and the time taken to resell the goods together with an additional period in which they could
be tested by the sub-buyer.264 A buyer, in English law, lost his right to reject the goods fairly
quickly.265 It has been, however, argued that the buyer has a long-term right to reject.266 On
the other hand, proposals to alter the law to create such a long-term right have been
253
Scott L.J in Halsbury's Laws of England, Hailsham ed., vol. 29, p. 224, para. 297, cited in Kwei Tek Chao v. British Traders and
Shippers Ltd. [1954] 2 Q.B. 459, per Devlin J p- 485.; during the time of examination, see Hardy & Co. (London) Ld. v. Hillerns and Fowler
[1923] 2 K.B. 490; 39 T.L.R. 547.
254
E& S Ruben Ltd v Fair Bros & Co Ltd (1949) 1 KB 254 per Hilbery J; Hammer & Barrow v Coca-Cola (1962) NZLR 723, (noted in
(1963) 26 Mod LR 194).
255
The Law Commissions, Sale and supply of Goods, para. 5.38. cited in Atiyah, P. S. (2005), at p. 513 (fn 70); see also s. 35(6)(b).
256
Fisher Reeves & Co Ltd v Armour & Co Ltd (1920) 3 KB 614, per Srutton LJ at 624
257
J & S Robertsons (Aust) Pty Ltd v Martin (1955-6) 94 CLR 30
258
Kwei Tek Chao v. British Traders and Shippers Ltd. [1954] 2 Q.B. 459, per Devlin J p- 487; Atiyah, disagree with this, see for contrary
argument Atiyah, P. S. (2005), p- 515.
259
Also of a bill of lading and the fact that it is a nullity.
260
Goode, R. M. (2004), at p.352. substantial or repeated or prolonged use, see Armaghdown Motors v Gray (1963) NZLR 5; Lamarra v
Capital Bank Plc (2004) GWD 40-817
261
Benjamin 12-055
262
Stoljar, S. (1957). P- 483.
263
s.35(2)
264
Truk (UK) Ltd v Tokmakidis GmbH (2000) 2 All ER (Comm) 594, per Judge Jack QC
265
Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 AER 220 per Rougier J; see also Motor Oil Hellas (Cornish) Refineries SA v
Shipping Corp. of India (The Kanchenjunga) [1990] 1 Lloyd's Rep. 391 at 398, HL; Percival v. Blake ((1826) 2 C. & P. 514.per Abbott C.J
at 576
266
six months see Clegg v Olle Andersen t/a Nordic Marine [2003] EWCA Civ 320; Rogers v Parish (Scarborough) Ltd (1987) QB 933:
Cash v. Giles (1828) 3 C. & P. 407.
33
rejected. 267 So it can be said that the reasonable time to reject the goods depends on
circumstances.268 Further, a buyer may lose his right to rescind the contract by failing to make
their election within a reasonable time.269 A buyer, however, is not deemed to have accepted
goods if he asks for or agrees to their repair by the seller.270
GowFR271 and Benjamin272 suggested that the question of acceptance under section 35 neither
arises before section 34 nor where the buyer obtains something other than that for which he
contracted. In short, thus, it can be said that the buyer will only lose his right to reject by
accepting all of the goods, or by accepting goods included in the same commercial unit.
Waiver
According to Eno273 the principle of ‗waiver‘ were fostered by the interpretation given by the
case of Littlejohn v. Shaw 274 to its actual ruling. Therefore, a buyer may lose his right of
termination by way of waiver by election and estoppel.275
By election
A waiver by election is an expression of an intention to affirm the contract.276 Once the buyer
chooses to affirm the contract with actual knowledge; he can not go back upon it and seek to
reject the goods.277 Further, where a buyer elects to accept non-contractual goods, he is bound
267
See Law Com. No.160, Sc. Law Com. No.104 (1987), paras 5.6-5.19; above, cited in Benjamin 12-055.
Jones v Gallagher [2004] EWCA Civ. 10; [2005] 1 Lloyd's Rep. 377
269
Clough v. London and North Western Railway Co. (L.R. 7 Exch. 26) per Mellor J.at 35.; failure to give early notice of unfitness of
goods may destroy the provability of his complaint, see Fisher v. Samuda (1808) 1 Camp. 190; Okell v. Smithc (1815) 1 Stark. 107 cited in
Stoljar, S. (1957). pp.485, 486; Groning v. Mendham,( (1816) 1 Stark. 256.); Hopkins v. Appleby'((1816) 1Stark. 477, per Lord
Ellenborough p- 479.
270
s.35 (6) (a). In contrary Lord Marnoch says that through a retendering of repaired goods the buyer could not lost his original right of
rejection.( Atiyah, P. S. (2005), p- 520)
271
GowFR, B.C.L. ‗Sale of Goods- Right of Rejection‘ (1949) 12 M.L.R. 368
272
Benjamin (12- 066)
273
Eno R.L. ‗Price Movement and Unstated Objections to The Defective Performance of Sales Contract‘(1935). 44 Yale L.J. 782, at 782.
274
Littlejohn v. Shaw, (1899). 159 N. Y. 188, 191, 53 N. E. 810, 811, cited in ENO, R.L. (1935). At 782; Where the New York CA declared
that ―if a particular objection is taken to the performance and the party is silent as to all others, they are deemed to be waived.‖
275
Stoljar, S. (1957). P- 487; Debattista, C. (1998) at. P. 214, 215
276
Benjamin 12-037
277
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp. of India (The Kanchenjunga) [1990] 1 Lloyd's Rep. 391 at 398 ; Panchaud
Frères SA v Etablissements General Grain Co [1970] 1 Lloyd's Rep. 53 per Lord Denning MR quoting Roskill J at 57 cited in McKendrick,
E. (2000), at p- 44 para 10.17; See also s.11(2).; See also McKendrick, E. (2000), p-489. para 10.008
268
34
by his election.278 Benjamin279 however, says that this act of election can be retracted with the
consent of the other party
By estoppel
Waiver by estoppel arises when the buyer agreed by a separate agreement 280 with the
defaulting seller or by his conduct led the seller to believe that he will not exercise his right of
rejection.281 It does not matter whether the buyer has any knowledge of representation or not.
It may be, however, difficult to establish that the representation was unequivocal where the
buyer is not aware or at least has no obvious means of knowledge.282 In regard to document
the buyer may lose his right of rejection by an implied waiver by accepting the shipping
documents. 283 The buyer cannot extract from this binding position, where it would be
inequitable to do so. 284 Benjamin, 285 however, says that the buyer can extract from his
position if he gives notice to enable the seller to resume his former position.
Under the Convention the buyer loses his right to declare the contract avoided, where he fails
to give notice for nonconformities specifying the nature of the lack of conformity within a
reasonable time286 after he has discovered it or ought to have discovered it.287 If the goods are
278
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp. of India (The Kanchenjunga) [1990] 1 Lloyd's Rep. 391 at 399, per Lord
Goff of Chieveley.
279
Benjamin 12-037
280
Kwei Tek Chao v British Traders and Shippers Ltd [1954] 2 Q.B. 459 per Devlin J. at 477.
281
Bridge, M. G. (2007), at p-445. para 10.17; McKendrick, E. (2000), p.489, para 10.009; Benjamin 12-035; Avimex SA v Dewulf &
Cie. [1979] 2 Lloyd's Rep. 57 per Robert Goff J.at 67.); Finagrain SA v Kruse [1976] 2 Lloyd's Rep. 508 per Megaw L.J;at 535; Hughes v.
Metropolitan Railway Co., (1877) 2 App.Cas. 439. cited in (The Kanchenjunga) [1990] 1 Lloyd's Rep. 391 at 399, by Lord Goff of
Chieveley.
282
Bremer Handelsgesellscheft mbH v C. Mackprang Jr., [1979] 1 Lloyd's Rep. 221
283
Panchaud Frères SA v Etablissements General Grain Co [1970] 1 Lloyd's Rep. 53 at 57; see also Bridge, M. G. (2007), at p.447. para
10.17. The buyer, however, is not estopped from rejecting the goods on arrival when he finds a physical breach by the seller other than in the
documentary defect. (See Benjamin 19-151)
284
Birmingham and District Land Co. v L. & N.W. Ry (1888) 40 Ch.D. 268.cited in Benjamin 12-035
285
Benjamin 12-035.
286
two years.
287
Article 39; Pretore dela Giurisdizione di Locarno-Campagna, 27 April 1992, <http://cisgw3.law.pace.edu/cases/920427s1.html>
(PACE), See also Enderlein & Maskow, supra note 13, at 158-159, cited in Kazimierska, A.(1999-2000), at (fn 197).
35
defective in several aspects, notice must be made to each defect individually.288 The buyer,
further, forfeits his right to avoid where he failed to notify the seller about the defect
specifying the nature of the third-party right or claim within a reasonable time.289 However,
the buyer retains this right, in spite of his failure to examine and give the notice,290 if the lack
of conformity relates to facts of which the seller knew or could not have been unaware and
which he did not disclose to the buyer.291
The remedy, further, is lost if it is impossible for the buyer to make restitution of the goods
substantially in the condition in which he received them.292 These restrictions apply before293
as well as after294 the declaration of avoidance. The buyer‘s avoidance right may be further
blocked when concurrent restitution, that is, the price cannot be refunded.295 A buyer may be
barred from avoidance if he contributed to the seller‘s failure by his own act or omission.296
Further, the buyer's right to avoid the contract is also lost297 if he waits too long after delivery
to declare his intent to avoid.298 The buyer may also lose his right if he failed to avoid within a
reasonable time, after the seller failed to deliver the goods within the promised additional
period.299
288
OG Zug 24 March 1998, http://cisgw3.law.pace.edu/cases/980324s1.html; OLG Celle, 10 March 2004,
http://cisgw3.law.pace.edu/cases/040310g1.html; cited in Schlechtriem, P., and Schwenzer, I. (2005) p. 464 para 10.
289
Article 43
290
UNILEX D.1997-2, CLOUT 192, cited in Honnold, O. J(1999) p- 273
291
It refers to the seller's deceit and gross negligence as well.see Schlechtriem, P.(1986) at p. 77. This exception laid down in article 40
292
Article 82(1); Magnus, U.(2005-06) at 428; Schlechtriem, P. (1986) at 105; Kazimierska, A.(1999-2000), p- 126.; Jafarzadeh, M (Dec
2001) at p411; for exceprtional case (Bundesgerichtshof, Germany, 25 June 1997, http://cisgw3.law.pace.edu/cases/970625g2.html cited in
Magnus, U.(2005-06) at 428-429.)
293
See OLG Koblenz, 27 September 1991,<http://cisgw3.law.pace.edu/cases/910927g1.html>; OLG Düsselldorf, 10 February
1994,<http://cisgw3.law.pace.edu/cases/940210g2.html>
294
Enderlein, F. and Maskow, D. (1992) at 346.
295
Enderlein, F. and Maskow, D. (1992) at 347.
296
Aeticle 80; see also Schlechtriem, P.(1986) at p.105
297
Ibid. p- 77
298
Ibid.
299
Shen, J. (Winter 1997), at p- 25.
36
SELLER’S RIGHT TO CURE THE BREACH
At law the buyer has the absolute right to reject defective goods. It seems unfair to the seller if
the defect is small and can be easily remedied.300 In this respect, Goode301 relying in a number
of cases, 302 confidently opines that where the buyer lawfully rejects the non-conforming
goods, the seller has a general right to make a fresh tender, provided that the time for delivery
has not yet expired.303 Jafarzadeh,304 further, says it appears from Goode that this right to
cure can also exercise where the seller‘s breach constitutes a breach of the statutory implied
conditions. The buyer, however, can reject a re-tender in this case, if the seller‘s time for
performance is made of the essence of the contract, or if it is too late for him to do so.305
Atiyah, Bridge and others,306 on this view, disagreed and says that the buyer is always entitle
to reject the non-conforming goods and terminate the contract, where seller‘s delivery of
goods does not comply to a condition of the contract, regardless of whether time for
performance is made of the essence of the contract.
Furthermore, they said that the cases cited by Goode in favour of the existence of a right to
cure by the seller cannot be authorities on this issue. 307 As these cases defined where the
sellers had not effectively appropriated goods to the contract. In such a case, if the seller‘s
offered goods do not comply with the contract description, he can withdraw his tender and
300
Priest, L. G. ‗Breach and Remedy for the Tender of Nonconforming Goods Under the Uniform Commercial Code: An Economic
Approach.‘(1977-1978), 91 Harv. L. Rev. 960 at p- 961.
301
Goode, R. M (1995) at pp.363-367; Goode, R. M. (2004); Devlin, Lord.‘Treatment of Breach of Contract,‘ (1966) C.L.J. 192; Apps, A.
‗The Right to Cure Defective Performance‘ [1994] L.M.C.L.Q. 525; Treitel, G. H. (1999) The Law of Contract, (10th ed.),London: Sweet &
Maxwell Stevens, at p. 732 (fn. 28) and then p. 698 (fn. 14)
302
Tetley v. Shand (1871) 25 L.T. 658; Borrowman Phillips & Co. v. Free & Hollis (1878) 4 Q.B.D. 500, per Bramwell, L.J, at 502;
Ashmore & Sone v. C.S. Cox & Co [1899] 1 Q.B. 436; Longbotton v. Bass Walker [1922] W.N. 245; Motor Oil Hellas (Corinth) Refineries
S.A. v. Shipping Corpn of India (The Kanchenjunga) [1990] 1 Lloyd's Rep. 391 at 399. ; Bremer Handelsgesellschaft m. b.H. v. J. H. Rayner
& Co. Ltd. [1979] 2 Lloyd's Rep. 216; Empresa Exportadora de Azucar v. Industria Azucareva Nacional S.A. (The Playa Larga) [1983] 2
Lloyd's Rep. 171; E. E. & Brian Smith (1928), LD. v. Wheatsheaf Mills. LD. [1939] 2 K.B. 302; McDougall v Aeromarine of Emsworth
[1958] 3 All E.R. 431; Agricultores Federados Argentinos v. Ampro S.A [1965] 2 Lloyd's Rep. 157; Gertreide Import Gesellschaft mb H v
Itoh & Co. (America) Inc. [1979] 1 Lloyd's Rep. 592; S.I.A.T. Didal Ferro v. Tradax Overseas S.A [1980] 1 Lloyd's Rep. 53; cited in
Jafarzadeh, M. (Dec 2001) see also Ziegel,S.J. (1984) at fn. 59.
303
Eno R.L. (1935) at p- 783; Benjamin 8-052; Bridge, M.(2007), at p.344, Cure, for specific goods, by repairing (p. 344,see also fn. 49)
304
Goode, R. M. (1995) at 274-277, 294,, 362-367, cited in Jafarzadeh,M. (Dec 2001).at 2.1.3.
305
Goode, R. M., (1995) at 365 and then 279. See also Devlin, L. (1966) at 203
306
Bradgate, R. (1995), at 247; Bridge, M. (1997), at 163, 198-201; Atiyah, P. S. & Adams, J. (1995), at 455-456;
307
Bradgate and White (1995) at 71-75; Bridge, M. (1997) at 199-201.
37
can make a fresh offer.308 This option does not apply where the seller has made a binding
appropriation or delivery obligation.309
The seller, however, may be entitled to cure his fault for nonconforming delivery which does
not comply with a condition.310 In justifying these possibilities Jafarzadeh311elucidated few
cases where the seller was allowed to re-tender the correct documents within the contract
time.312 Therefore it would seem that the right at English law to ‗cure‘ defects by re-tender is
limited.
The Convention permits the defaulting seller to cure a defect by way of replacing or repairing
defective documents and goods.313 For this purpose, the convention has expressly given the
seller the right, up to the contract date, to cure for any non-conformity of documents and
goods provided Articles 34 and 37. Accordingly Ziegel314 says that these provisions apply
whatever the gravity of the seller's breach and whether or not it meets the test of a
fundamental breach.
Under Art.48(1) this is a general provision that After the due date for delivery the seller is
empowered to cure at his own expense ‗any failure to perform his obligations‘ contrary to the
specific one which covers fundamental and non-fundamental breaches.315 Where the buyer
has not declared the contract terminated and the seller, after becoming aware of the defect,
308
Ibid.
Bradgate,R., (1995) at 247; Bridge, M. (1997) at 199; Furthermore, where a false tender destroy the confidence of the buyer the seller
can not cure (Maple Flock Co. Ltd v Universal Furniture Products (Wembley) Ltd [1934] 1 K.B. 148 at 157; Benjamin 12-031)
310
E.g. where the buyer has lost his right to terminate after rejection or where the seller‘s offer to cure so as to mitigate his loss under the
principle of mitigation.( Payzu Ltd. v. Saunders [1919] 2 K.B. 581, Scrutton LJ said that "in commercial contracts it is generally reasonable
to accept an offer from the party in default" (ibid., at 589).) Likewise seller‘s right of cure up to the stage of appropriation to identify the
contract goods. (For supporting view see Jafarzadeh,M. (Dec 2001).at fn. 81.
311
Jafarzadeh,M. (Dec 2001).at 2.1.3
312
Such as Empresa Exportadora de Azucar v. Industria Azucareva Nacional S.A. (The Playa Larga) [1983] 2 Lloyd's Rep. 171 at 185;
McDougall v Aeromarine of Emsworth Ltd (1958) 3 All ER 431; S.I.A.T.di dal Ferro v. Tradax Overseas S.A [1980] 1 Lloyd's Rep. 53 at 63;
Thus, Kerr J. in Procter & Gamble Philippine Manufacturing Corporation v Kurt A Becher GmbH & Co KG [1988] 2 Lloyd's Rep 21.at p 23)
says that ‗If the contents of the documents are untrue in any material respect, then the buyers can reject them and refuse to pay the price. No
doubt… it may then be open to the sellers to make a second correct tender if they can.‘
313
Jafarzadeh, M (December 2001), p 411; Honnold, O.J. (1999) p- 266; Ziegel,S.J. (1984) at. page 9-20.
314
Ziegel,S.J. (1984) at page 9-20
315
Jafarzadeh, M (December 2001), at para 2.3; see also Ziegel,S.J. (1984) at page 9-22 Honnold, J.(1991) at 376 and fn. 6. (Ibid. at para
2.3); albeit the breach regarding the non-conforming part is fundamental (Schlechtriem, P.(1986) at p. 77)
309
38
informs the buyer of his readiness to cure; he is entitled to do so. 316 Germany, however,
criticized the provision,317 above all, because the buyer‘s right to avoid the contract endangers
the seller‘s right to cure.318 In addition, there are situations to those specified in Articles 34,
37 or 48 in which cure may be useful319 when the buyer notifies the seller of the claim320 of a
third party based on an ownership interest321 or intellectual property322 in the goods.
COMPARATIVE ASSESMENT
As already shown, generally, both the system here under examination have accepted that the
buyer has an option either to terminate the contract or to continue performance, if he wishes,
for breach of seller‘s non-conforming delivery obligation. Similarly, he is not required to
apply for a court‘s judgement to terminate the contract. It is suggested that application of the
fundamental breach test is unlikely to produce an answer very different to that produced by
English law. The question of communicating the notice of termination is controversial in
English law. But the position of the Convention seems clear; the buyer must be
communicated to the seller in breach for exercising his right to terminate the contract. As
explained before, the Convention while referring to the seller‘s duty to deliver documents in
accordance with the contract terms, 323 says little about the documents. 324 Whereas, by
recognising the seller‘s duty to deliverer the conforming goods and documents separately,
English courts classified the documentary duty‘s terms as a condition in the contract and
thereby gives the buyer the right to reject them for any lack of conformity. 325 English law
gives the buyer the right to reject the documents where the goods themselves are perfectly in
316
317
318
319
320
321
322
323
324
325
Schlechtriem, P.(1986) at p. 77
Art. 48
Schlechtriem, P.(1986) at p. 77
Honnold, J. (1999) at p- 267
Art. 43(a))
Article 41
Article 42
Arts. 30 and 34
One may argue that it has been covered in Incoterms
Kwei Tek Chao v. British Traders & Shippers Ltd ([1954] 2 Q.B. 459; Gill & Duffus S.A. v. Berger & Co. Inc ([1984] 1 A.C. 382.
39
accordance with the contract. 326 Further, the buyer can reject non-conforming goods even
though he accepted the documents. However, if the defect giving rise to both rights of
rejection is a single breach, the buyer‘s acceptance of the documents has been treated as
having waived his right to reject for both the documents and goods.327
Affirmation of the contract must be announced by unequivocal words or conduct. Despite the
difference in the language of the provisions both the systems provide that the buyer‘s
presumed knowledge of the lack of conformity will be sufficient in loss of the right. Likewise,
he loses his right if he fails to exercise it within a reasonable time. However, it is possible to
say that the Convention seems more generous than the English Sale of Goods Act. As in the
English law the buyer can delivered the goods to another under a sub-sale or other
disposition,328 but lose his right for an act inconsistent with the seller‘s ownership.329 While,
under the Convention, he will not result in loss of the right provided these acts are done in the
normal course of use.330 Similarly, in comparing Art.39 with the English Sale‘s Act, it is more
generous to the buyer in regard to the time allowed to him for latent defect.
Both English law and the Convention have responded to the matter of cure in a different way.
As explained before, English law has not expressly recognised a general right to cure. But a
number of English academic writers and judicial decision have tried to prove the seller‘s
general right of cure. Some others oppose it and suggested where the buyer consents to it.
Whereas, the Convention gives the seller a general right to cure for delivering nonconforming documents331 and goods,332 which can be exercised before and after the time for
performance has expired.333 In comparison, the view of the first group of English authors334
326
327
328
Re General Trading Co. Ltd., and Van Stolk's Commissiehandel [1910] 16 Com. Cas. 95; Tamvaco v. Lucas (no. 1) [1859] 1 E. & E 581.
Panchaud Freres S.A. v. Etablissments General Grain Co ([1970] 1 Lloyd's Rep. 53
s. 35(6)(b)
329
s. 35(1)(b)
Art. 82(2)(c)
331
Art. 34
332
Art. 37
333
Art. 48
330
40
would be similar to the Convention. Under both systems, as far as the seller is ready and able
to cure before the delivery time has expired, the buyer has no right to reject the seller‘s offer
even if the lack of conformity is serious. However, the two systems will differ, where the
buyer has lost his confidence in the seller's ability and willingness to make a conforming
tender the seller has no right to cure as described by the first group of English authors. In
contrast, under the Convention seller‘s offer to cure would convert the character of an actual
fundamental breach into a non-fundamental breach. Further, under English law, seller‘s right
to cure depends on whether or not time was of the essence of the contract, while Art. 48 allow
curing beyond the contract time. Likewise, the view of the second approach would be similar
to the Convention in respect of non-conforming documents
By all illuminating analysis, in any case, rejection may be justified on the mutual intention of
the contracting parties. The court may perhaps look at the terms of the contract and the other
circumstances surrounding the case to decide whether a perfect tender was, or is assumed to
have been, the pre-condition of the buyer‘s right of rejection.
CONCLUSION
For any legal system it is a challenging task to draw the line between cases where the contract
continues despite its breach by one party and cases where the aggrieved party has to be
permitted to terminate the contract. The English law and the Convention react with a whole
set of rules to that problem. The English common law and legislation offer generous rules, to
establish a right of termination in respect of technical breaches, by the recognition of implied
warranties or conditions. Thus, Lady Justice Hale335 explicitly stated that in English law a
buyer can reject the goods for any lack of conformity. He does not have to act reasonably in
choosing rejection; he can reject for whatever reason he chooses. The position under the
334
335
Like Goode, R. M.
Clegg v Olle Andersen t/a Nordic Marine [2003] EWCA Civ 320
41
Convention is markedly different since it grants the remedy of avoidance rather reluctantly. It
gives paramountcy to the policy that contracts are made to be performed and not to be
avoided.
Undoubtedly, the technique of fundamental breach is not particularly conducive, of itself, to
commercial certainty but with sensitive interpretation against the background of a Convention
which makes the parties‘ intentions paramount it may be that similar results to English law
could be achieved.
It is, however, suggested that, at least the Convention has the merit of promoting justice in the
sense that it restricts the right to avoid the contract to serious breaches. English law does not
even do that as it only excludes the right to reject in cases where the breach is ‗so slight‘.
Perhaps it is fitting to conclude that the English commercial law of sale may be more than
adequate for commodity sales but there is much to be said for the view that the Convention is
better suited for situation, where contractual continuance is more desirable than hair-trigger
termination rights.
42
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1. English Law
(I) Books and Articles
Ademuni-Odeke, (1999) Law of International Trade London : Blackstone,
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Atiyah, P. S. (2005) Sale of Goods (11th ed), Harlow; New York: Pearson/Longman,
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Ahdar, R. J.: "Seller Cure in the Sale of Goods," (1990) L.M.C.L.Q. 364
Bridge, M. (2007) The International Sale of Goods: Law and Practice (2nd edition) Oxford:
Clarendon Press.
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Bridge, G. M. ‗Discharge for Breach of the Contract of Sale of Goods‘ (1982-1983) 28
McGill L. J. 867
Beale, H.(1980) Remedies for Breach of Contract, London : Sweet & Maxwell.
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Carr, I. (2005) International Trade Law, (3rd ed), London : Cavendish.
Carter, J. W. ‗Party Autonomy and Statutory Regulation: Sale of Goods‘ (1993) 6 Journal of
Contract Law 93-122. available at http://www.cisg.law.pace.edu/cisg/biblio/carter3.html
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Convention‘ (1993) 6 J.C.L.93.
Chuah, J. The Law of International Trade (3rd ed), London : Sweet & Maxwell
Debattista, C. (1998) The sale of goods carried by sea (2nd ed), London : Butterworths.
Devlin, L. ‗Treatment of Breach of Contract,‘ (1966) C.L.J.192.
43
Eno R.L. ‗Price Movement and Unstated Objections to The Defective Performance of Sales
Contract‘(1935). 44 Yale L.J. 782.
Falconbridge, D. J. (1921) Handbook Of The Law Of Sale Of Goods, Canada Law Book
Company, chapter v, available at http://chestofbooks.com/business/law/Handbook-Of-TheLaw-Of-Sale-Of-Goods/index.html, accessed on 15.03.09.
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Butterworths LexisNexis
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Gower, B.C. L. ‗Sale of Goods in Market Overt‘(1949)
12 Mod. L. Rev. 371
Gower, B.C. L. ‗Sale of Goods- Rights of Rejection‘(1949)12 Mod. L. Rev. 368
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Stationery's Office. (available for download at
http://www.scotlawcom.gov.uk/downloads/rep104.pdf)
McKendrick, E. (2000), Sale of Goods (ed), London: LLP.
Merrett, L. ‗Case Comment: Place of delivery in international sales contracts‘ (2008)
Cambridge Law Journal, 246
Mak ‗Repair and Loss of the Right to Reject – A Remedial Dilemma in Sale of Goods. Law‘,
note on J&H Ritchie Ltd v Lloyd Ltd, 2005 SLT 64 [2006] LMCLQ 163
Priest, L. G. ‗Breach and Remedy for the Tender of Nonconforming Goods Under the
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Sassoon, D. (1995) C.i.f. and F.o.b. Contracts (4th ed), London: Sweet & Maxwell.
44
Stoljar, S. ‗The Doctrine of Acceptance in sales‘ (1957) 1 Melbourne U.L.R. 483. at P. 483;
Stoljar, S. J. ‗The Contractual Concept of Condition,‘ (1953) 69 L.Q.R.485.
Sale of Goods: http://www.hardwickebuilding.co.uk/articles.php?p_id=34&child=3&aol=3
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Treitel, G. H. (2007) The Law of Contract, (12th ed.) London: Sweet & Maxwell
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Clarendon Paperbacks
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Treitel. ‗Rights of Rejection Under C.I.f. Sales‘(1984) LMCLQ. 565
Weir, T ‗Contract-The Buyer‘s Right to Reject Defective Goods‘ (1976)35 Cambridge L.J.
33.
(II) Judicial Decisions
Arcos, Ltd. v. E.A. Ronaasen & Son [1933] A.C. 470
Alfred C Toepfer v. Continental Grain Co. (1974) 1 Lloyd‘s Rep 11
Alfred C Toepfer v Lenersan – Poortman NV [1980] 1 Lloyd‘s Rep. 143.
Aird & Coghill v. Pullan & Adams, 7 F. 258.
Avimex SA v Dewulf & Cie. [1979] 2 Lloyd's Rep. 57
Alibastine Co. v. Canada Producer Co, (1914) 30 O.L. R. 394, 17 D.L.R. 813
Ashington Piggeries Ltd. v Christopher Hill Ltd. [1972] A.C. 441
Aruna Mills Ltd v Dhanrajmal Gobindram [1968] 1 Q.B. 655
Aswan Engineering Establishment Co. v Lupdine Ltd (1987) 1 WLR 1
Armaghdown Motors v Gray (1963) NZLR 5
Ashmore & Sone v. C.S. Cox & Co [1899] 1 Q.B. 436
Agricultores Federados Argentinos v. Ampro S.A [1965] 2 Lloyd's Rep. 157
45
Brown v. Edgington (1841) 2 Man. & G. 279
Behrend & Co v Produce Brokers Co [1920] 3 K.B. 530.
Berger & Co. Inc. Appellants v Gill & Duffus S.A. Respondents [1984] A.C. 382,
B. S. Brown & Son Ltd. v. Craiks Ltd. [1970] 1 W.L.R. 752.
Bettini v. Gye [1876] 1 Q.B.D. 183
Bentsen v. Taylor, Sons & Co [1893] 2 Q.B. 274
Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 AER 220
Bartlett v. Sidney Marcus Ltd[1965] 1 W.L.R. 1013
Bergerco USA v Vegoil (1984) 1 Lloyd‘s Rep. 440
Biddell Bros. v. E. Clemens Horst Co [1911] 1 K.B
British oil Cake Co. Ltd. v. J. Burstall & Co. Ltd. (1923) 15 Ll.L.Rep. 46
Bowes v. Shand (1877) 2 App. Cas. 455
Business Appliances Specialist ltd v Nationwide Credit Corpn Ltd (1988) RTR 32
Boyd v Louca (1973) 1 Lloyd‘s Rep. 209
Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd's Rep 10.
Bunge Corp v. Tradax Export S. A. [1981] 1 W.L.R. 711
Bremer Handelsgesellscheft mbH v C. Mackprang Jr., [1979] 1 Lloyd's Rep. 221
Birmingham and District Land Co. v L. & N.W. Ry (1888) 40 Ch.D. 268.
Borrowman Phillips & Co. v. Free & Hollis (1878) 4 Q.B.D. 500
Bremer Handelsgesellschaft m. b.H. v. J. H. Rayner & Co. Ltd. [1979] 2 Lloyd's Rep. 216
Cehave N.V. v. Bremer Handelsgesellschaft m.b.H. , [1975] 2 Lloyd's Rep. 445; [1976] 1 Q.B.
44
Compagnie Commerciale Sucres Et Denrees v. C. Czarnikow Ltd. (The Naxos) [1989] 2
Lloyd's Rep. 462
Clegg v Olle Andersen t/a Nordic Marine [2003] EWCA Civ 320
Christopher Hill Ltd. v. Ashington Piggeries Ltd. [1972] A.C. 441
46
Crother v Shannon Motor Co (1975) 1 WLR 30
Cammell Laird & Co. Ltd. v. Manganese Bronze and Brass Co. Ltd. [1934] A.C. 402
Chanter v. Hopkins, 1838, 4 M. & W. 399
Coddington v. Paleologo (1867) L. R. 2 Ex. 193
Cerealmangimi SpA v Toepfer [1981] 1 Lloyd's Rep. 337
Crozier, Stephens & Co. v. Auerbach [1908] 2 K. B. 161
Champion v Short (1807) 1 Camp. 53
Cunliffe v Harrison, (1851) 6 ExCh.903
Comptoir d'Achat et de Vente du Boerenbond Belge S/A Appellants; v Luis de Ridder
Limitada Respondents. (The Julia) [1949] A.C. 293
Colin & Shields v. W Weddel &Co Ltd (1952) 2 All E.R. 337
Carter & Co. v. Campbell 12 R. 1075
Cash v. Giles (1828) 3 C. & P. 407
Clough v. London and North Western Railway Co. (L.R. 7 Exch. 26)
Decro-Wall S.A. v. Marketing Ltd. [1971] 1 W.L.R. p. 361; and [1971[ 2 All E R. 216
Dudley, Clarke & Hall v. Cooper, Ewing & Co, (July 9, 10, 11, 14, 1919)
Duncan, Fox & Co. v. Schrempft & Bonke. [1915] 3 K. B. 355
E& S Ruben Ltd v Fair Bros & Co Ltd (1949) 1 KB 254
Esposito v. Bowden. 7 E. & B. 763
Empresa Exportadora de Azucar v. Industria Azucareva Nacional S.A. (The Playa Larga)
[1983] 2 Lloyd's Rep. 171
E. E. & Brian Smith (1928), LD. v. Wheatsheaf Mills. LD. [1939] 2 K.B. 302
Fisher v. Samuda (1808) 1 Camp. 190
Fisher Reeves & Co Ltd v Armour & Co Ltd (1920) 3 KB 614
Freeman v Taylor 131 E.R. 348; (1831) 8 Bing. 124.
47
Foreman & Ellams Ltd v Blackburn (1928) 2 KB 60
Fleming & Co. (Limited) v. Airdrie Iron Co. 9 R. 473
Finagrain SA v Kruse [1976] 2 Lloyd's Rep. 508
Groom v. Barber [1915] 1 K. B. 316
Gunton v. Richmond-upon-Thames L.B.C. [1981] ch. p. 448
Gator Shipping Corporation v. Trans-Asiatic Oil Ltd. (The "Odenfeld) [1978] 2 Lloyd's Rep.
357
Geddling v Marsh (1920) 1 KB 668
Glaholm v Hays, Irvine, and Anderson. 133 E.R. 743; (1841) 2 Man. & G. 257
Gill &Duffus S.A., v.Berger & Co [1984] 1 Lloyd‘s Rep.227
Gertreide Import Gesellschaft mb H v Itoh & Co. (America) Inc. [1979] 1 Lloyd's Rep. 592
Gabriel, Wade & English Ltd v Arcos Ltd (1929) 34 LI L Rep 306
Groning v. Mendham,( (1816) 1 Stark. 256.)
Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26
Hindley v. E. India Produce Co. Ltd [1973] 2 Lloyd's Rep 515
Henry Kendall & Sons v William Lillico & Sons Ltd (1969) 2 AC 31
Hardwick Game Farm v. Suffolk Agricultural Poultry Producers Association ("S.A.P.P.A.")
[1969] 2 A.C. 31.
Hick v Raymond and Reid (1893) A.C. 22
Hartley v Hymans [1920] 3 K.B. 488
Honck v. Muller, (1881) 7 Q.B.D. 92
Hansson v Hamel & Horley Ltd (1922) 2AC 36
Henry Dean & Sons (Sydney) Ltd. v. O'Day Pty. Ltd. (1927) 39 C.L.R. 330
Hardy & Co v Hillerns and Fowler, 1923] 2 K.B. 490.
Hammer & Barrow v Coca-Cola (1962) NZLR 723, (noted in (1963) 26 Mod LR 194).
Hopkins v. Appleby'((1816) 1Stark. 477
48
Hughes v. Metropolitan Railway Co., (1877) 2 App.Cas. 439
Jones v. Just (1868) L.R. 3 Q.B. 197
Jones v. Bright (1829) 15 Bing. 533
J Aron & Co. (Inc.) v Comptoir Wegimont [1921] 3 K.B. 435
James Finlay & Co. Ld. v. N. V. Kwik Hoo Tong H.M, (1929)1 KB 400, CA
Janson v. Driefontein Consolidated Mines. [1902] A. C. 484
J & S Robertsons (Aust) Pty Ltd v Martin (1955-6) 94 CLR 30
Jones v Gallagher [2004] EWCA Civ. 10; [2005] 1 Lloyd's Rep. 377
Kwei Tek Chao v. British Traders and Shippers Ltd [1954] 2 Q.B. 459
Kreditbank Cassel G.m.b.H. v. Schenkers Ltd. [1927] 1 K.B. 826; 43 T.L.R. 237
Karberg v. Blythe, Green, Jourdain & Co [1915] 2 KB 379; (1916) 1 KB 495, CA
Landauer v. Craven & Speeding Brothers [1912] 2 K. B. 94
L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235
Lee v York Coach & Marine (1977) RTR 35
Lamarra v Capital Bank plc (2007) SC
Lambert v Lewis [1981] 2 Lloyd's Rep. 17
Lecky & Co. Ltd v. Ogilvy Gillanders and Co. (1897) 3 Com. Cas. 29
Littlejohn v. Shaw, (1899). 159 N. Y. 188, 191, 53 N. E. 810, 811
Longbotton v. Bass Walker [1922] W.N. 245
McDougall v Aeromarine of Emsworth [1958] 3 All E.R. 431
Meyer v Travaru (1930) 37 Lloyd‘s Law Rep 204
Millar's Karri and Jarrah Co. v. Weddel [1909] 100 L.T. 128
Macpherson Train & Co Ltd v. Howard Ross & Co. Ltd. [1955] 1 W.L.R. 640
49
Manbre Saccharine Co. Ltd v Corn Products Ltd (1919) 1 K.B. 198
Manchester Liners Ltd. v. Rea Ltd. (1922) 2 A.C. 74
Mash & Murrell Ltd. v. Joseph I. Emanuel Ltd. [1961] 1 WLR 862, [1961] 1 All ER 485 (QB)
Medway Oil & Storage Co. Ltd. v. Silica Gel Corporation (1928) 33 Com.Cas. 195
Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S (No.1) [2000] 1 Lloyd's Rep. 211
M Golodetz & Co Inc v Czarnikow-Rionda Co Inc (The Galatia) [1980] 1 W.L.R. 495
Mantovani v Carapelli SpA [1978] 2 Lloyd's Rep. 63
Mechan & Sons, Limited v. Bow, M'Lachlan & Co., Limited, (1910) S. C. 758
Mechans v Highland Marine Charters (1964) SC 48
M'Caw, Stevenson, & Orr, Limited v. Maclaren & Sons20 R. 437
Munro & Co. v. Bennet & Son,(1911) S. C. 337.
Morrison & Mason, Limited v. Clarkson Brothers, (1898) 25 R. 427,
Motor Oil Hellas (Cornish) Refineries SA v Shipping Corp. of India (The Kanchenjunga)
[1990] 1 Lloyd's Rep. 391
Maple Flock Co. Ltd v Universal Furniture Products (Wembley) Ltd [1934] 1 K.B. 148
Niagara Grain Co. v. Reno, (1916), 8 O.L.R. 159, 32 D. L.R. 576
Niblett v Confectioner‘s Materials Ltd (1921) 3 KB 387
New Hamburg Mfg. Co. v. Webb, 1911, 23 O.L.R. 44
Nelson v. William Chalmers & Co., Limited (1913) S. C. 441
Okell v. Smithc (1815) 1 Stark. 107
Parker v. Schuller (1901) 17 Times L. R. 299.
Photo Production Ltd. v. Securicor Transport Ltd [1980] A.C. 827
Plevins v. Downing 1 C. P. D. 226
Phillips v. Lamdin [1949] 2 K.B. 33
50
Panchaud Freres SA v. Etablissements General Grain Co. [1970] 1 Lloyd's rep 53.
Pinnock Brothers v. Lewis & Peat Ltd. [1923] 1 K.B. 690
Preist v Last[ 1903] 2 K.B. 148
Polenghi v. Dried Milk Co. (1904) 10 Com. Cas. 42
P T Putrabali v. Société Est Epices [2003] 2 Lloyd‘s Rep 700
Proctor & Gamble Phillipines Manufacturing Corpn. v. Kurt A. Becher G.m.b.H. & Co. K.G.
[1988] 2 Lloyd's Rep 21
Pearce Brothers v. Irons, 7 Macph. 571
Perkins v. Bell [1893] 1 Q.B. 193
Percival v. Blake ((1826) 2 C. & P. 514
Payzu Ltd. v. Saunders [1919] 2 K.B. 581,
Re Denbigh Cowan & Co. and R Atcherley & Co. (1921) 90 L.J.K.B. 836.
Re General Trading Co. Ltd., and Van Stolk's Commissiehandel ([1910] 16 Com. Cas. 95
Robert A. Munro & Co. Ltd. v. Meyer [1930] 2 K.B. 312
Rapalli v. K. L. Take Ltd. [1958] 2 Lloyd's Rep. 469
Reuter v. Sala (1879) 4 C. P. D. 239
Reardon Smith Line Ltd v Hansen-Tangen, [1976] 2 Lloyd's Rep. 621; [1976] 1 W.L.R.
Re Moore & Co. and Landauer & Co. (1921) 2 KB 519
Randall v. Newson, (1877)2 Q.B. 102 (C.A.),
Re Salomon & Co Naudszus (1899) 81 L.T. 325
Rogers v Parish (Scarborough) Ltd (1987) QB 933
Smyth v Bailey (1940) 3 All ER 60
Shyam Jewellers Limited v M Cheeseman, CA 29 November 2001, Available at
http://www.brewerconsulting.co.uk/cases/CJ0201RR.htm accessed on 6th April 09.
Scottish & Newcastle International Ltd v Othon Ghalanos Ltd [2008] UKHL 11, [2008] 1
Lloyd's Rep. 462
51
Smith v Chance (1819) 2 B. & Ald. 753
Sharp v. Christmas (1892) 8 Times L. R. 687
Shine v General Guarantee Corporation (1988) 1 All ER 911
SHV Gas Supply & Trading SAS v Naftomar Shipping and Trading Co. Ltd. Inc. [2005]
EWHC 2528 (Comm), [2006] 1 Lloyd's Rep. 163.
Shipton Anderson & Co v Weil Bros & Co [1912] 1 KB 574
Soules CAF v. P. T. Transap of Indonesia (1999)1 lloyd‘s Rep. 917
Shipton, Anderson & Co v. John Western & Co (1922) 10 Ll. L.R.762
Sanday & Co. v. British and Foreign Marine Insurance Co. [1915] 2 K. B. 781
Sanders Brothers v. Maclean & Co. (1883) 11 Q. B. D. 327
SIAT di del Ferro v. Tradax Overseas SA[1980] 1 Lloyd‘s Rep. 53
Société Italo-Belge pour le Commerce et l'Industrie v Palm and Vegetable Oils (Malaysia)
Sdn. Bhd. (The Post Chaser) [1982] 1 All E.R. 19.
The Mihalis Angelos [1971] 1 Q.B. 164
The Albazero [1977] AC 774
Thomas Borthwick Ltd v Bunge Ltd (1969) 1 LI.R. 17
The Bow Cedar [1980] 2 Lloyd's Rep
Trasimex Holdings SA v Addax BV (The Red Sea) [1999] 1 Lloyd's Rep. 28
Tamvaco v. Lucas (no. 1) [1859] 1 E. & E 581
Tarling v O'Riordan (1878) 2 L.R.Ir. 82
T. & J. Harrison v. Knowles & Foster (1918) 1. K.B. 608
Thain v Anniesland Trade Centre (1997) SLT (Sh Ct) 102.
Tradax Internacional SA v Goldschmidt SA [1977] 2 Lloyd's Rep 604
Tradax Export v European Grain & Shipping, 36[1983] 2 Lloyd's Rep. 100.
Teheran-Europe Co. Ltd. v. S. T. Belton (Tractors) Ltd. [1968] 2 Q.B. 545 ,
52
Tarrabochia v. Hickie , (1856) 1 H. & N. 188; 156 E.R. 1168
Truk (UK) Ltd v Tokmakidis GmbH (2000) 2 All ER (Comm) 594, per Judge Jack QC
Tetley v. Shand (1871) 25 L.T. 658
Tamvaco v. Lucas (no. 1) [1859] 1 E. & E 581.
Vitol SA v. Norelf Ltd. [1994] 4 All E R p. 109
Varley v. Whipp [1900] 1 Q.B. 513
Vargas Pena Apeztieguia y Cia v. Peter Cremer G.m.b.H. [1987] 1 Lloyd's Rep 394
Wickman Machine Tool Sales Ltd. v. L. Schuler A.G. [1974] A.C. 235
Wiskin v Terdich Bros Pty Ltd ( 1928) Arg LR,
Wood v Tassell (1844) 6 Q.B. 234
Wilkinson v Lloyd (1845) 7 Q.B. 27
Wyer and Hawke v. Produce Brokers Co, (1921) 9 L1.L.Rep. 240
W. N. Lindsay & Co. Ltd. v. European Grain & Shipping Agency Ltd. [1963] 1 Lloyd's Rep.
437
Wormell v RHM Agriculture (East) Ltd (1987) 1 WLR 1091
(III) Statutes
Sale of Goods Act 1979 as amended in 1994 and 1995.
2. The Convention
(I) Books and Articles
Bridge. M. ‗A Comment on ―Towards a Universal Doctrine ofBreach—The Impact of CISG,‖
by J¨urgen Basedow‘ (2005) International Review of Law and Economics 25 501–511.
Basedow, J. ‗Towards a Universal Doctrine of Breach of Contract: The Impact of the
CISG‘(2005) International Review of Law and Economics 25, 487–500.
Babiak, A. ‗Defining "Fundamental Breach" Under the United Nations Convention on
Contracts for the International Sale of Goods’ (Spring 1992) 6 Temp. Int'l & Comp. L.J. 113
Bianca, C. M. et al. (1987) Commentary on the International Sales Law. The 1980 Vienna
Sales Convention (1987) Milano : Giuffr e,
53
Bonell, J. M., Liguori, F. ‘ The U.N. Convention on the International Sale of Goods:
A Critical Analysis of Current International Case Law -- 1997 (Part 1)‘ (1997) Revue de droit
uniforme/Uniform Law Review 385-395, available at
http://cisgw3.law.pace.edu/cisg/biblio/libo1.html.
CISG Advisory Council Opinion No. 5 ‗The buyer's right to avoid the contract in case of nonconforming goods or documents‘ available at http://www.cisg.law.pace.edu/cisg/CISG-ACop5.html
Comments on Article 52 by John O. Honnold [U.S.] in the 3rd ed. (1999) of the most
frequently cited text on the CISG: Uniform Law for International Sales, available at
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(III) Statute
United Nations Conference on Contracts for the International Sale of Goods, 11 Apr. 1980
(The Convention)
60
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