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THE CISG AND THE UNITED KINGDOM—EXPLORING COHERENCY AND PRIVATE INTERNATIONAL LAW

Published online by Cambridge University Press:  23 May 2018

Benjamin Hayward
Affiliation:
Senior Lecturer, Department of Business Law and Taxation, Monash Business School, Monash University, benjamin.hayward@monash.edu.
Bruno Zeller
Affiliation:
Professor of International Trade Law, Law School, University of Western Australia, bruno.zeller@uwa.edu.au.
Camilla Baasch Andersen
Affiliation:
Professor of International Commercial Law, Law School, University of Western Australia, camilla.andersen@uwa.edu.au.

Abstract

The United Kingdom remains one of the world's last industrialized nations not to have adopted the CISG. The UK CISG debate has endured for decades, with existing analysis largely focusing on competition, assessing the relative merits of the CISG and English law. This article's analysis is complementary; focusing instead on coherence, and the private international law implications of UK accession. This article assesses contractual interpretation, and commodity sales, within an overarching private international law framework. Recognizing the necessity of existing competitive analyses, it makes the case for UK CISG accession on the basis of its complementary coherency perspective.

Type
Articles
Copyright
Copyright © British Institute of International and Comparative Law 2018 

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References

1 United Nations Convention on Contracts for the International Sale of Goods (opened for signature 11 April 1980, entered into force 1 January 1988) 1489 UNTS 3.

2 Schwenzer, I, ‘Introduction’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016) 1Google Scholar; Goode, R, ‘Insularity or Leadership? The Role of the United Kingdom in the Harmonisation of Commercial Law’ (2001) 50 ICLQ 752CrossRefGoogle Scholar.

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9 Andersen, ‘Of Cats and Cream’ (n 7) 1.

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25 ibid.

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27 European Parliament, ‘Common European Sales Law (CESL)’ (Legislative Train, 20 January 2018) <http://www.europarl.europa.eu/legislative-train/theme-connected-digital-single-market/file-common-european-sales-law>.

28 See generally Andersen, ‘Of Cats and Cream’ (n 7).

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35 R Goode, ‘Why Compromise Makes Sense’ The Times (London, 22 May 1990)—an excellent response to the objections raised in D Wheatley, ‘Why I Oppose the Winds of Change’ The Times (London, 27 March 1990). See also Goode, ‘Insularity or Leadership?’ (n 2) 755–6.

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38 ibid 915–16.

39 Müller-Chen, M, ‘Article 49’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016) 782 [14]Google Scholar. The equivalent position is, of course, taken at common law, save as to the application of the repudiation doctrine instead—see, eg, Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 (HCA) 73–4.

40 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 917 and n 32; Bridge, ‘A Law for International Sales’ (n 14) 19 and n 8.

41 Bridge, International Sales (n 19) 470–1 [10.04]; Zhou (n 32) 669 and 672; Goode, ‘Insularity or Leadership?’ (n 2) 756–7; E Simos, ‘The CISG: A Lost Cause in the UK?’ (2012) 16 VJ 257–8.

42 See generally House of Commons Library, ‘Statistics on UK Trade with China’ (10 November 2017) <http://researchbriefings.files.parliament.uk/documents/CBP-7379/CBP-7379.pdf>.

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46 See generally Office for National Statistics, ‘UK Trade: December 2017’ (9 February 2018) <https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/uktrade/december2017>.

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49 See, eg, Zhou (n 32) 673–5.

50 Schwenzer, I and Hachem, P, ‘Introduction to Articles 1–6’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016) 18 [3]Google Scholar. See, eg, SCC Case Code 174 (2001) in Bergman, L (ed), Casebook on Choice of Law in Arbitration (Landa 2017) 136–7Google Scholar.

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52 cf Goods Act 1958 (Vic) Part IV.

53 Sale of Goods (Vienna Convention) Act 1986 (NSW) section 5.

54 ibid section 6.

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56 Roder Zelt-Und Hallenkonstruktionen GmbH v Rosedown Park Pty Ltd (1995) 57 FCR 216 (FCA) 222.

57 Olivaylle Pty Ltd v Flottweg AG [No 4] (2009) 255 ALR 632 (FCA) 642 [28]. Though the CISG was in principle within the parties’ choice of law, the clause was qualified, providing for ‘Australian law applicable under exclusion of UNCITRAL law’. The Convention was therefore excluded on the facts of this particular case.

58 Sale of Goods Act 1979 (UK), section 2(1).

59 Carter (n 45) 93–4.

60 Sale of Goods Act 1979 (UK), section 62(2).

61 ibid sections 62(1) and (3).

62 Zhou (n 32) 673–5.

63 Coyle, J, ‘The Role of the CISG in U.S. Contract Practice: An Empirical Study’ (2016) 38 UPaJIntlL 220–3Google Scholar.

64 See, eg, SCC Case Code 95 (1996) in Bergman (n 50) 81.

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68 Ashington Piggeries Ltd v Christopher Hill Ltd [1972] 1 AC 441 (HL) 501; Carter (n 45) 93.

69 Wagners Nouvelle Caledonie SARL v Vale Inco Nouvelle Caledonie SAS [2010] QCA 219 (QCA) [43].

70 Khoo, W, ‘Article 4’ in Bianca, CM and Bonell, MJ (eds), Commentary on the International Sales Law (Giuffrè 1987) 45Google Scholar [2.4].

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77 NV AR v NV I (Hof van Beroep Ghent, Belgium, 15 May 2002) [5.2] <http://cisgw3.law.pace.edu/cases/020515b1.html>.

78 Jayme (n 75) 32–3 [3.1].

79 Schlechtriem (n 74) 788.

80 Schwenzer, I and Hachem, P, ‘Article 4’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016) 87 [31]Google Scholar.

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87 UNCITRAL Secretariat (n 83) 17 [4].

88 Sale of Goods Act 1979 (UK), sections 17(1) and (2).

89 See, eg, Sale of Goods Act 1923 (NSW) sections 21–23; Goods Act 1958 (Vic) sections 21–23; Contract and Commercial Law Act 2017 (NZ) sections 143–146; Sale of Goods Act, RSO 1990, c S-1, sections 17–19; Sale of Goods Act, RSBC 1996, c 410, sections 21–23.

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92 Schwenzer and Hachem, ‘Article 4’ (n 80) 92–3 [47]. See, eg, Roder Zelt-Und Hallenkonstruktionen GmbH v Rosedown Park Pty Ltd (1995) 57 FCR 216 (FCA) 222–3; SCC Case Code 250 (2002) in Bergman (n 50) 164–5.

93 Treitel (n 36) 1164 [18-004].

94 cf SCC Case Code 699 (2013) in Bergman (n 50) 278–9.

95 Zhou (n 32) 674.

96 Contract and Commercial Law Act 2017 (NZ) section 205.

97 Bridge, The International Sale of Goods (n 19) 511 [10.45].

98 Council, CISG Advisory, ‘CISG Advisory Council Opinion No 16 – Exclusion of the CISG under Article 6’ in Schwenzer, I (ed), The CISG Advisory Council Opinions (Eleven International Publishing 2017) 523Google Scholar.

99 See generally L Spagnolo, CISG Exclusion and Legal Efficiency (Kluwer 2014).

100 See generally Spagnolo, L, ‘The Last Outpost: Automatic CISG Opt Outs, Misapplications and the Costs of Ignoring the Vienna Sales Convention for Australian Lawyers’ (2009) 10 MelbJIntlL 141Google Scholar.

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102 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 934–5 and 940.

103 ibid 940.

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105 This wording is used in clause 29 of the Grain and Feed Trade Association contract number 100—Bridge, The International Sale of Goods (n 19) 636.

106 Olivaylle Pty Ltd v Flottweg AG [No 4] (2009) 255 ALR 632 (FCA) 642–3 [28].

107 Bridge, ‘A Law for International Sales’ (n 14) 39–40.

108 See appendices 2–5 in Bridge, The International Sale of Goods (n 19).

109 Traxys Europe SA v Balaji Coke Industry Pvt Ltd [No 2] (2012) 201 FCR 535 (FCA) 539 [14].

110 Park, WW, ‘Truth and Efficiency: The Arbitrator's Predicament’ in Arsanjani, M et al. (eds), Looking to the Future (Martinus Nijhoff Publishers 2011) 770Google Scholar.

111 Standard form contracts could, of course, form the basis of contracts entered into post-accession, were the UK to adopt the CISG.

112 Arts 100(1) and (2) CISG.

113 cf Goode, R, ‘The Harmonization of Dispositive Contract and Commercial Law – Should the European Community Be Involved?’ in Kieninger, E-M (ed), Denationalisierung des Privatrechts? (Mohr Siebeck 2005) 20Google Scholar and 26.

114 cf Goode, ‘Insularity or Leadership?’ (n 2) 757.

115 Sale of Goods Act 1979 (UK), section 55(1).

116 Bridge, ‘A Law for International Sales’ (n 14) 22 and 26.

117 See, eg, Bridge, The International Sale of Goods (n 19) 547 [11.21].

118 Preamble [3] CISG.

119 Kähler, L, ‘Conflict and Compromise in the Harmonization of European Law’ in Wilhelmsson, T, Paunio, E and Pohjolainen, A, Private Law and the Many Cultures of Europe (Kluwer 2007) 126Google Scholar.

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122 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 1 AC 749 (HL) 768.

123 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101 (HL) 1112 [14] and 1115–1123 [27]–[47].

124 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) 913; Prenn v Simmonds [1971] 1 WLR 1381 (HL) 1383 and 1385. See also ibid 1115 [28].

125 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 (HL) 913; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 (HCA) 352; Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604 (HCA) 605 [3]; Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 343 ALR 58 (HCA) 61 [7] and [9] (Kiefel CJ, Bell and Gordon JJ) and 77–8 [73] and 81 [85] (Nettle J).

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128 Beijing Metals v American Business Center (5th Circuit Court of Appeals, United States of America, 15 June 1993) [II.A] n 9 <http://cisgw3.law.pace.edu/cases/930615u1.html>.

129 CISG Advisory Council, CISG Advisory Council Opinion No 3 – Parol Evidence Rule, Plain Meaning Rule, Contractual Merger Clause and the CISG’ in Schwenzer, I (ed), The CISG Advisory Council Opinions (Eleven International Publishing 2017) 68 [1]Google Scholar.

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131 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101 (HL).

132 ibid 1119–1120 [39]. Although the UNIDROIT Principles 2004 have now been superseded by 2010 and 2016 editions, the interpretative rule referred to remains the same in each.

133 Schmidt-Kessel, M, ‘Article 8’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016) 144–5Google Scholar [1]–[3].

134 Smith v Hughes (1871) LR 6 QB 597 (QB) 607.

135 See generally Spigelman, J, ‘Contractual Interpretation: A Comparative Perspective’ (2011) 85 ALJ 425–6Google Scholar.

136 Amin Rasheed Shipping Corp v Kuwait Insurance Co (The Al Wahab) [1984] 1 AC 50 (HL) 65.

137 Schmidt-Kessel (n 133) 144 [1] and 145 [3].

138 See generally Spigelman (n 135).

139 cf McMeel, G and Grigoleit, HC, ‘Interpretation of Contracts’ in Dannemann, G and Vogenauer, S (eds), The Common European Sales Law in Context (Oxford University Press 2013)Google Scholar 371—regarding the Draft Common Frame of Reference and CESL.

140 Vogenauer, S, ‘Interpretation of Contracts: Concluding Comparative Observations’ in Burrows, A and Peel, E (eds), Contract Terms (Oxford University Press 2007) 125–9Google Scholar.

141 MCC-Marble Ceramic Center v Ceramica Nuova D'Agostino (11th Circuit Court of Appeals, United States of America, 29 June 1998) [I] <http://cisgw3.law.pace.edu/cases/980629u1.html>.

142 Rienzi & Sons, Inc v N Puglisi & F Industria Paste Alimentari SpA, 638 Fed Appx 87, 89–90 (2nd Cir, 2016).

143 CISG Advisory Council, ‘Opinion No 16’ (n 98) 524 [5].

144 Rienzi & Sons, Inc v N Puglisi & F Industria Paste Alimentari SpA, 638 Fed Appx 87, 89 n 2 (2nd Cir, 2016).

145 Proforce Recruit Ltd v The Rugby Group Ltd [2006] EWCA Civ 69 (CA) [57]; The Square Mile Partnership Ltd v Fitzmaurice McCall Ltd [2006] EWCA Civ 1690 (CA) [61]–[63].

146 Cartwright, J, Contract Law (3rd edn, Hart Publishing 2016) 30Google Scholar.

147 Convention for the Unification of Certain Rules Relating to International Carriage by Air (opened for signature 12 October 1929, entered into force 13 February 1933) 137 LNTS 11; as amended by the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air (opened for signature 28 September 1955, entered into force 1 August 1963) 478 UNTS 371.

148 On both less qualified, and more qualified, bases—see Fothergill v Monarch Airlines Ltd [1981] 1 AC 251 (HL) 283 (Lord Diplock) and 294 (Lord Scarman) (the former); 278 (Lord Wilberforce) and 287–8 (Lord Fraser) (the latter).

149 ibid 271 (Lord Wilberforce), 288 (Lord Fraser) and 302 (Lord Roskill).

150 Viscasillas, PP, ‘Article 7’ in Kröll, S, Mistelis, L and Viscasillas, PP (eds), UN Convention on Contracts for the International Sale of Goods (CISG) – Commentary (Hart Publishing 2011) 112 [2]Google Scholar.

151 Art 7(1) CISG.

152 Vogenauer (n 140) 125–9.

153 Zhou (n 32) 672.

154 See, eg, Treitel (n 36) 1163–5 [18-004].

155 See, eg, Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 931.

156 ibid 917.

157 Bain, C, The Economist Guide to Commodities (Economist Books 2013) 2346Google Scholar.

158 K Takahashi, ‘Right to Terminate (Avoid) International Sales of Commodities’ [2003] JBL 116–17.

159 Procter & Gamble Philippine Manufacturing Corporation v Kurt A Becher GmbH & Co KG [1988] 2 Lloyd's Rep 21 (CA) 22.

160 See, eg, ibid 22–3.

161 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 931.

162 Along with laws of the USA, English law was the most popular choice of law in ICC arbitration in 2016—International Chamber of Commerce, ‘2016 ICC Dispute Resolution Statistics’ [2017] (2) ICC DispResBull 112.

163 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 931.

164 Spagnolo, CISG Exclusion (n 99) 98.

165 Spagnolo, ‘The Last Outpost’ (n 100) 160; see generally 160–2.

166 ibid 163–5.

167 Bridge, ‘A Law for International Sales’ (n 14) 39.

168 C1 08 45 (Tribunal Cantonal du Valais, Switzerland, 28 January 2009) [4.a.aa] <http://cisgw3.law.pace.edu/cases/090128s1.html>.

169 International Chamber of Commerce, Incoterms 2010 (n 86) 6.

170 See, eg, C1 08 45 (Tribunal Cantonal du Valais, Switzerland, 28 January 2009) [4.a.aa] <http://cisgw3.law.pace.edu/cases/090128s1.html>; McKendrick (n 48) 590 [12-004]; Treitel (n 36) 1162–3 [18-002]; Bridge, The International Sale of Goods (n 19) 526 [10.62].

171 cf Sale of Goods Act 1979 (UK), section 20(4); Consumer Rights Act 2015 (UK), section 29.

172 cf Sale of Goods Act 1979 (UK), sections 29(3) and (3A); Consumer Rights Act 2015 (UK), section 28.

173 See, eg, KG Bominflot Bunkergesellschaft Für Mineralöle mbh & Co KG v Petroplus Marketing AG (The Mercini Lady) [2009] EWHC 1088 (Comm), [2009] 2 Lloyd's Rep 679 (QBD) 685–6 [38]–[41].

174 International Chamber of Commerce, Incoterms 2010 (n 86) 5 (emphasis altered).

175 Onesteel Manufacturing Pty Ltd v Bluescope Steel (AIS) Pty Ltd (2013) 85 NSWLR 1 (NSWCA) 9 [25].

176 cf. Bridge, The International Sale of Goods (n 19) 526–7 [10.62].

177 Burnett, R and Bath, V, Law of International Business in Australasia (The Federation Press 2009) 76Google Scholar.

178 Treitel (n 36) 1164–5 [18-004].

179 ibid 1164 [18-004].

180 Gabriel, H, ‘International Chamber of Commerce Incoterms 2000: A Guide to Their Terms and Usage’ (2001) 5 VJ 44Google Scholar.

181 I Schwenzer and P Hachem, ‘The CISG – Successes and Pitfalls’ (2009) 57 AmJCompL 476–7.

182 See, eg, Treitel (n 36) 1164 [18-004].

183 cf Bridge, The International Sale of Goods (n 19) 526 [10.62].

184 Schwenzer, I and Kee, C, ‘Global Sales Law – Theory and Practice’ in Schwenzer, I and Spagnolo, L (eds), Towards Uniformity (Eleven International Publishing 2011) 157–8Google Scholar.

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186 cf Gabriel (n 180) 44.

187 Schwenzer and Hachem, ‘Successes and Pitfalls’ (n 181) 477.

188 Goode, R, ‘Rule, Practice, and Pragmatism in Transnational Commercial Law’ (2005) 54 ICLQ 555–6CrossRefGoogle Scholar.

189 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 934–5 and 940.

190 See, eg, arts 30–34, 53, 60 and 66–70 CISG.

191 Schwenzer and Hachem, ‘Successes and Pitfalls’ (n 181) 476–7.

192 Bridge, ‘A Law for International Sales’ (n 14) 38.

193 Johnson, W, ‘Analysis of INCOTERMS as Usage under Article 9 of the CISG’ (2014) 35 UPaJIntlL 421–2Google Scholar.

194 Burnett and Bath (n 177) 77.

195 Huber, P, ‘Standard Terms under the CISG’ (2009) 13 VJ 125Google Scholar.

196 CISG Advisory Council, ‘CISG Advisory Council Opinion No 13 – Inclusion of Standard Terms under the CISG’ in Schwenzer, I (ed), The CISG Advisory Council Opinions (Eleven International Publishing 2017) 296Google Scholar [1] and [2].

197 cf Bridge, ‘A Law for International Sales’ (n 14) 38.

198 ibid 38–9.

199 Bridge, The International Sale of Goods (n 19) 527 [10.63].

200 Schwenzer, I and Hachem, P, ‘Article 7’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016)Google Scholar 135 [32].

201 Treitel (n 36) 1164 [18-004].

202 ibid.

203 CISG Advisory Council, ‘Opinion No 16’ (n 98) 524 [3]–[5].

204 See, eg, Bridge, ‘The Transfer of Risk’ (n 90).

205 Bridge, ‘A Law for International Sales’ (n 14) 29–32.

206 Beheshti (n 32) 309–10; Zhou (n 32) 675–7.

207 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 917 n 32.

208 ibid 931–2.

209 cf ibid 931–6.

210 Schwenzer and Hachem, ‘Successes and Pitfalls’ (n 181) 476–7.

211 See, eg, ibid.

212 Bridge, ‘The Transfer of Risk’ (n 90) 105.

213 See generally Bridge, ‘A Law for International Sales’ (n 14).

214 Bridge, ‘The Transfer of Risk’ (n 90) 82.

215 Mash & Murrell Ltd v Joseph I Emmanuel Ltd [1961] 1 WLR 862 (QBD).

216 Bridge, ‘The Transfer of Risk’ (n 90) 82–3.

217 ibid 82.

218 ibid 82–3.

219 ibid 87.

220 ibid 87–8.

221 Arts A4 and A5 DAP, Incoterms 2010; Arts A4 and A5 DDP, Incoterms 2010; Arts A4 and A5 FOB, Incoterms 2010; Arts A4 and A5 CFR, Incoterms 2010; Arts A4 and A5 CIF, Incoterms 2010.

222 Bridge, ‘The Transfer of Risk’ (n 90) 89.

223 Bridge, ‘A Law for International Sales’ (n 14) 39.

224 ibid.

225 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 939–40.

226 Bridge, ‘The Transfer of Risk’ (n 90) 86.

227 ibid 87.

228 ibid 94.

229 ibid 95–6.

230 Schwenzer and Hachem, ‘Successes and Pitfalls’ (n 181) 477.

231 School of International Arbitration, ‘2010 International Arbitration Survey’ (Research at the School of International Arbitration 2010) 16 <http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2010_InternationalArbitrationSurveyReport.pdf>.

232 Sale of Goods Act 1979 (UK), section 20(1). cf Sale of Goods Act 1979 (UK), section 20(4); Consumer Rights Act 2015 (UK), section 29.

233 Sale of Goods Act 1979 (UK), section 29(1).

234 ibid section 29(2).

235 Hachem, P, ‘Article 68’ in Schwenzer, I (ed), Schlechtriem & Schwenzer – Commentary on the UN Convention on the International Sale of Goods (CISG) (4th edn, Oxford University Press 2016) 981–3Google Scholar [8]–[11].

236 cf ibid 981 [8].

237 Sale of Goods Act 1979 (UK), section 20(1).

238 UNCITRAL Secretariat (n 83) 17 [4].

239 Bridge, ‘The Transfer of Risk’ (n 90) 77.

240 ibid.

241 ibid 94.

242 ibid 90–1 and 97.

243 cf Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 913—‘complexity breeds expense’.

244 Bridge, ‘The Transfer of Risk’ (n 90) 93–4.

245 Portions of this conclusion have been adapted from Andersen, ‘Of Cats and Cream’ (n 7).

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247 Byrne & Co v Leon Van Tienhoven & Co (1880) 5 CPD 344 (CommPleas) (boxes of tin plates); Stevenson, Jaques, & Co v McLean (1880) 5 QBD 346 (QBD) (iron ore); Tsakiroglou & Co Ltd v Noblee Thorl GmbH [1962] 1 AC 93 (HL) (Sudanese groundnuts).

248 Bridge, ‘A Law for International Sales’ (n 14) 27.

249 ibid 18.

250 Bridge, ‘Avoidance for Fundamental Breach’ (n 37) 940 n 142.

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