PRESERVATION OF THE GOODS UNDER THE CISG
As a general rule, Section VI of Chapter 5 of the CISG requires that the party left in possession of, or, otherwise in control of the disposition of, the goods has the duty to protect and preserve the goods. This duty, which applies to any party to the transaction, “is an expression of the general obligation to cooperate, as it can be deduced from this provision [CISG Article 85] or that provision of the CISG as one of the Convention's underlying principles.”
Seller's duty to preserve the goods (Article 85)
The scope of the provision comprises two situations: first, where the buyer is in delay in taking the goods, and, second, where the buyer fails to pay the price when payment is to be made concurrently with delivery. In these cases, the seller is obligated to take measures to preserve the goods.
The standard to be applied is that the seller is required to take any reasonable step under the circumstances to preserve the goods, which will often be decided based on usage. Failure to fulfill this duty may give rise to stringent consequences, especially in those cases where the risk of loss has already passed to the buyer although the seller still has control over the disposition of the goods. In fact, a seller's failure to preserve the goods releases the buyer from liability arising from loss even though the risk has already passed to the buyer, “regardless of whether or not the property in the goods has passed” to the buyer.