THE DELIVERY OBLIGATION

Performance obligations under the CISG are set forth in deceptively simple terms. Article 30 requires the seller to deliver the goods, hand over any documents relating to them, and transfer the property in the goods, as required by the contract and the CISG itself. Those obligations are then elucidated in Articles 31 through 52. Article 53 recites that the buyer must “pay the price for the goods and take delivery of them,” again in accordance with the contract and the CISG. Most disputes that arise under the CISG concern the performance and thus the interpretation of what is required by these obligations.

What constitutes delivery?

Delivery in international sales will frequently involve a more complicated procedure than in domestic sales because distances may be greater, multi-modal transport may be involved, and there may be additional legal requirements related to import and export of goods. Article 31 sets forth a series of default rules that govern the question of when a delivery has occurred. If the parties do not provide otherwise and the contract involves carriage of goods, delivery occurs when the goods are handed over to the first carrier for transmission to the buyer. The term “carrier” implies that transportation by the seller's own vehicles does not constitute a delivery. “Handing over” implies that merely making the goods available to the carrier will not constitute a delivery. Thus, placing the goods on a loading dock at the seller's place of business will not qualify. The handing over of goods sufficient to constitute a delivery will also frequently trigger passage of the risk of loss, since at that point the buyer assumes a superior position to avoid or insure against loss. We discuss risk of loss rules in Chapter 7. For the moment, we note that the seller completes its delivery obligations in shipment contract that involve third-party carriage by handing over the goods to the carrier, even if the seller has agreed to a term by which it pays transportation costs to the buyer's destination, as in an Incoterms rules CIF or CFR term. Once the handing over has occurred, the seller has completed its delivery obligations and subsequent delay in the buyer's obtaining the goods does not establish a failure to perform by the seller.