Obligations of the buyer in international sales

Payment of the purchase price. The general obligations of the buyer are to pay the purchase price of the goods and to accept delivery of them as required by the sales contract or the Vienna Convention. If the contract does not include sufficient details, the Vienna Convention provides supplementary rules, as follows:

  1. Buyer fulfils all requirements. It is for the buyer to take such steps and comply with such formalities as may be required to effect payment of the purchase price (CISG Article 54).
  2. No price agreed. If no purchase price has been established (and no clear and unequivocal parameters exist to establish the price), the purchase price is deemed impliedly to be the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances (CISG Article 55).
  3. Net weight. If the purchase price is based on the weight of the goods, in case of doubt it is to be determined by the net weight (CISG Article 56).
  4. Where to pay. The buyer must pay the purchase price at the seller’s place of business or, if the payment is to be made against delivery of the goods or documents, at the place of such delivery (CISG Article 57(1)).
  5. When to pay. Failing a specified date of payment, the buyer must pay when the seller places the goods (or documents controlling their disposition) at the buyer’s disposal. The seller may make such payment a condition for handing over the goods or documents (CISG Article 58(1)).
  6. Pay against delivery. If the sales contract involves transportation of the goods, the seller may dispatch the goods on terms whereby the goods (or documents controlling their disposition) will not be handed over to the buyer except against payment of the full purchase price (CISG Article 58(2)).
  7. Pay after inspection. The buyer is not bound to pay the price until it has had an opportunity to examine the goods, unless the agreed procedures for delivery or payment are inconsistent with its having such an opportunity (CISG Article 58(3)).
  8. No request required. The buyer must pay the full purchase price without the need for any request or compliance with any formality on the part of the seller (CISG Article 59).

Non-conformity notice. Regarding the conformity requirement, the Vienna Convention provides that the buyer should inspect the goods. The buyer must give notice of any non-conformity within a reasonable time after it has discovered it (or should have discovered it). Except if the parties agreed otherwise (e.g. a longer warranty period), the right of the buyer to give such a notice lapses, at the latest, two years from the date on which the goods were actually handed over to the buyer.

Buyer’s knowledge of non-conformity. The quality requirements of conformity to fitness for ordinary purpose and any particular purpose, to samples or models, or to packaging (CISG Article 35(2)) do not apply to the extent that the buyer, at the time of contracting, knew or could not have been unaware of a non-conformity in respect of one of those qualities. A buyer familiar with defects, failures or failing functionalities cannot claim that it had expected the goods to conform in those respects.

Buyer’s inspection and notice. If the buyer has had a reasonable and appropriate opportunity to inspect the goods prior to their shipment, it might lose its right to claim after arrival. The buyer’s duty to inspect the goods is particularly important for highly visible aspects such as packaging.[1] Obviously, if the buyer establishes a non-conformity, it must notify the seller as soon as practicable (CISG Article 39). Especially when the lapse of time might adversely influence the damages or resale price, courts are reluctant to award a buyer any damages in case of late claims. One illustrative example:

Case: damaging paper grinding materials[2]

A Swiss buyer purchased from a German seller grinding material in order to manufacture paper products. The products were resold to another Swiss company and processed into finished goods. After using the grinding material the buyer ascertained damage to its equipment and to the material itself. About twenty days later, the second Swiss company also complained that the tissues manufactured by using the buyer’s paper products were defective. An expert examination was then ordered. Upon receiving the expert report, the buyer notified the seller of the defects in the delivered material.

The Supreme Court reversed the decisions of the courts in first and second instance and held that the notice of lack of conformity had been timely given. The buyer could not have discovered the defect by an ordinary examination of the purchased goods either upon delivery, or at any time before damage ensued. In this case, the buyer could be allowed a period of one week from discovery of the damage to consider possible remedies. To this the two-week period of the expert examination is to be added, followed by the reasonable time for notice, which, according to the Court, usually amounts to one month. Therefore, seven weeks after discovery of the damage was considered to be still reasonable.

Finally, the Court determined that the buyer’s notice sufficiently precise about the nature of the non-conformity (CISG art. 39(1)): in case of machineries and technical equipment it is enough to describe the defects without the need to specify their root cause.

[1]           See for example: Camara Nacional de Apelaciones en lo Comercial de Buenos Aires, 31 May 2007 (Sr. Carlos Manuel del Corazón de Jesús Bravo Barros v. Salvador Martínez Gares): http://www.unilex.info/case.cfm?id=1197 or Oberlandesgericht Düsseldorf, 8 January 1993, 17 U 82/92: http://www.unilex.info/case.cfm?id=17.

[2]           German Bundesgerichthof, 3 November 1999, VIII ZR 287/98 (Unilex): http://www.unilex.info/case.cfm?id=447.

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