law-200 assisgnment

8/9/2019 Law-200 assisgnment

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Research Paper Title 2008/9

‘Termination of the contract as a remedy for breach of

contract by the seller: a comparison between English law and

the !"#$%

& Research Paper s'bmitted to the (ni)ersity of *anchesterfor the +egree of ,,$* *asters -!nternational .'siness ,aw inthe ac'lty of 1'manities$

"chool of ,aw!+344538


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&pril 2008/9

Declaration

i. No portion of the work referred to in the research has been submitted in

support of an application for another degree or qualification of this or any other

University or other Institution of Learning.

And

ii. Copyright in the tet of this thesis rests with the Author. Copies !by any

process" either in full# or of etracts# may be made only in accordance with

instructions given by the Author and lodged in the $ohn %ylands University

Library of &anchester. 'etails may be obtained from the Librarian. (his page

must from part of any such copies made. )urther copies !by any process" of copies

made in accordance with such instructions may not be made without the

permission !in writing" of the Author.

(he ownership of any Intellectual property rights# which may be described in this

thesis# is vested in the University of &anchester# sub*ect to any prior agreement to

the contrary# and may not be made available for use by third parties without the

written permissions of the University# which will prescribe the terms and

conditions of any such agreement.

+


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Title: ,(ermination of the contract as a remedy for breach of contract by the seller- a

comparison between nglish law and the CI/0.1

&bstract

(his essay focuses on the merchant1s commonplace problem which occurs when the seller1s

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. (he circumstances# in which the buyer will be entitled to terminate the

contract for the seller1s non2conforming delivery of goods and documents and consequently

the mechanism of eercising the right and the circumstances in which the buyer may lose his

right to terminate were eplored. )urthermore# the circumstances in which the seller may have

the right to cure were highlighted. )inally# from the discussions some comparisons between

the nglish law of sale of goods with the Convention was drawn in order to show the etent

of similarity and dissimilarity for termination of the contract between the two systems. It is#

further# suggested that the nglish commercial law of sale may be more than adequate for

commodity sales. 3owever# there is much to be said for the view that the Convention is better

suited for situation# where contractual continuance is more desirable than hair2trigger

termination rights.

Keywords: %emedies for breach of contract4 (ermination4 Lose of right4 %ight to Cure4 nglish /ales

law4 (he Convention.

5


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(A6L 7) C7N(N(

IN(%7'UC(I7N......................................................................................................................8

%$C(I7N AN' (%&INA(I7N# 7N %&'9 7%(:7;...........................................+

6U9%>>>>>>>>>>>>>>>>>>>..@

Failures in Delivery.......................................................................................................@

Delivery at the wrong time............................................................................................

Early Delivery...............................................................................................................B

Delivery at the wrong place.........................................................................................8

)AILU% IN %LA(I7N (7 (3 NA(U%# DUALI(9 7% C7N'I(I7N 7) (3

077'/.....................................................................................................................................88

Correspondence with description................................................................................8+

Satisfactory uality ....................................................................................................8?

Fitness for purpose!!!!!!!!!!!!!!!!!!!!!!!!!!!!..8@

"rong #uantity of the goods supplied >>>>>>>......................................+

%I03( (7 %$C( (3 '7CU&N(/ ............................................................................+8

L7/ (3 %I03( (7 (%&INA( (3 C7N(%AC( ....................................................+

Acceptance .................................................................................................................+

$y e%press &ntimation....................................................................................+E

'ct inconsistent with the ownership of the seller..........................................+E

$y laps of reasona(le time ............................................................................+F

Waiver........................................................................................................................+B

$y election .....................................................................................................+B

$y estoppel ....................................................................................................5

/LL%1/ %I03( (7 CU% (3 6%AC3......................................................................5+

C7&GA%A(I= A///&N( ............................................................................................5?

C7NCLU/I7N .......................................................................................................................5

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CI)- Cost Insurance and )reight

)76- )ree 7n 6oard or )reight 7n 6oard

67L- 6ill of Lading

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INTRODUCTION

(he contracting parties# in international sales of commodities# epect that their contract be

performed as they contemplate when making the contract. 3owever# 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 bargain8. In this setting# a right of re*ection is of

crucial importance to both parties.

)rom the beginning of sales law courts and legislative draftsmen has veed for eamination of

this right of re*ection.+ (his recurrent problem faced by the merchant arises whenever the

seller1s 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.5 (his question will be addressed under two ma*or legal sources# i.e.

nglish law? and (he Convention on Contracts for the International /ale of 0oods 8BF !the

Convention".

(he courts and lawyers have used epressions to describe what is called in this study ,the

right of termination of the contract.1@ In nglish law# the right to terminate the contract

depends in large part on the nature of the term which has been broken by the seller.

(herefore# the idea of termination for breach of a term# that is condition# is the most

8 /ee (reitel# 3. 0. !8BB8" )emedies for $reach of Contract* ' Comparative 'ccount . 7ford- Clarendon Gaperbacks at 5+825+++ /ee 3onnold. $. , 6uyer1s %ight of %e*ection- A /tudy in the Impact of Codification upon a Commercial Groblem1 !&ar.# 8B?B"# Universityof Gennsylvania Law %eview# =ol. BE# No. ? pp. ?@E2?F8# at ?@E# footnote 8.5 /ee /crutton# L. $. in +eyer, -td. v. ivisto# 8?+ L. (. ?F# ?F8 !C. A. 8B5" summed up a lifetime of eperience4 H. . .As far as I remember#in every com2 mercial litigation this question of whether you can re*ect or have a claim for damages has constantly been raised in various

kinds of trade# and under various kinds of con2 tracts# and# I daresay# will continue to be raised for centuries yet to come.H Cited in n. 2 , at

p. ?@E!f.n.8"? In the case of nglish law# the study will focus on the law regulating the buyer


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fundamental aspect of the sale of goods legislation. E (he convention adopts a miture of

Common Law and 0erman principles in providing that the buyer may declare the contract

terminated !avoided" either# where any breach by the seller is


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dicta#8+ academic writings85 which use one instead of another. In contrast# there can be found

some cases8? and academic writings8@ in which the right of re*ection is distinct from the right

of termination. (herefore# assuming that a buyer# who is aggrieved by the seller1s breach of

condition and where the time of performance is of the essence of the contract# would be

entitled to terminate the contract.8

BUYER! REMEDIE! UNDER EN"#I!$ #AW AND T$E CON%ENTION

(he two primary remedies for breach of contract in nglish law are a right to treat the contract

as terminated and damages.8E (he eistence of the former under nglish law depends on the

presence of an implied# that is# common law# right of termination for- !a" breach of an epress

or implied term classified as a condition4 or !b" the sufficiently serious breach of an

intermediate term. (ermination for breach of ,condition1 arise where the terms broken by the

seller is the sub*ect of an epress or implied promise. 8F (ermination 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-

8+ /ee e.g.# $entsen v. aylor, Sons = Co J8FB5K + D.6. +E? at +F84 'rcos, -td. v. E.'. )onaasen = Son J8B55K A.C. ?E# per Lord Atkin at

?F4 Cehave 5.6. v. $remer 9andelsgesellschaft m(9 !he 9ansa 5ord " J8BEK 8 D. 6. ??# per 7rmerod L$ at F5 and F?4 wei e Chao v.

$ritish raders and Shippers -td J8B@?K + D.6. ?@B per 'evlin $ at ?F4 Lord %oskill in $unge Corp v. rada% E%port /. A. J8BF8K 8 :.L.%.

E88 at E+?# E+@.

85 /ee e.g.# (reitel# 0. 3.# !8BB8" he -aw of Contract # !/weet O &awell /tevens# London# 8BB8# Fth ed.". at B4Carter# $. :.!8BB8" $reach of Contract # !(he Law 6ook Company Ltd.# Australia# 8BB8 +nd ed.". Garas. 8+# +F# in particular# B?4 Carter# $. :.- HConditionsand Conditions Grecedent#H ? $.C.L. !No. +" !8BB8 A" B# at 8+2854 Carter# $. :.- H6uyer


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but# otherwise# not.8B (he nglish law also lays inconsequential emphasis on the specific

performance.+

(he starting point of the buyer1s remedial provisions under the Convention is Art. ?@!8"

+8

which provides that the buyer can resort to the following remedies- performance# including

substitute delivery and repair4 avoidance of the contract4 reduction of the purchase price4

damages.++ (hese remedies are more clearly structured in the Convention especially the case

for the two most significant remedies# ,damages1 and ,avoidance of the contract.1 +5 (he

convention adopts a miture of Common Law and 0erman principles in providing the right to

declare the contract avoided.+?

TERMINATION &OR BREAC$ UNDER EN"#I!$ #AW AND T$E CON%ENTION

Amongst various remedies available for breach of contract# termination is the most drastic

measure.+@ (ermination by the buyer of a sale contract on shipment terms arise on the grounds

of the seller1s repudiatory breach.+ (he seller has two types of obligation in international

sales to perform4 the ,physical1 obligations and the ,documentary1 obligations. +E (he seller

may fail to perform one or both of these duties which will lead the seller in repudiatory

breach4 and the buyer may have a right to re*ect in respect of any such failure. +F (his duality

8B 9ongong Fir Shipping Co. -td. v. awasai isen aisha -td . J8B+K + D.6. + per Up*ohn L.$. at p. ?4 /ee also a number of cases of 8BEs where the courts etolled the virtues of the intermediate term# - Schuler '0 v "icman +achine ool Sales -td J8BE?K AC +5@4

Cehave 56 v $remer 9andelsgesellschaft m(9 !he 9ansa 5ord: J8BEK D6 ??4 )eardon Smith -ine -td v ?ngvar 9ansen3angen J8BEK 8

:L% BFB4 rada% &nternacional S' v 0oldschmidt S' J8BEEK + Lloyd


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performance is of crucial significance in certain aspects of the law on CI) and )76 contracts

particularly in the area of the remedies of re*ection of goods and documents.+B (herefore the

termination# the most radical contractual remedies should need to be analysed in binary terms

as well.5

Under the Convention# termination !avoidance" is the one2sided right of a party to terminate

the contract by its mere declaration.58 (here 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 non2conforming goods or documents. It is suggested that the

position of the buyer under the Convention is broadly similar to nglish law.5+ Article 5

requires separate obligations in relation to documents and goods on the seller. (he buyer# thus#

may eercise his right in two different situations4 55 where the seller1s breach is a fundamental

breach5?of contract or where the seller does not perform his delivery obligation before the end

of an additional period of time set by the buyer.5@ Consequently# courts under the Convention

*ustified avoidance in relation to three broad types of breach- namely# defects in the goods4

defects in the documents4 and# late performance and non2performance.5

T$E RI"$T TO REJECT T$E "OOD!

Failures in Delivery

+B /ee 'ebattista# C. !8BBF" at 54 $iddell $ros. v. E. Clemens 9orst Co J8B88K 8 M.6. per 3amilton $. p2 ++.

5 &(id . at p.8F58 /ee the Convention# arts. ?B# ?# E+ and E5 !Hmay declare the contract avoidedH"# cited in 3amburg# &. U ,(he %emedy of Avoidence of Contract Under CI/0R0eneral %emarks and /pecial Cases1!+@2+" +@ $.L. O Com. at G2?+5. 5+ /ee &ullis# A. ,(ermination for 6reach of Contract in C.I.). Contracts Under the =ienna Convention and nglish Law- Is (here a/ubstantial 'ifference;1 in Lomnicka and 0 &orse !eds"# Contemporary &ssues in Commercial -aw Essays in honor of /rof. '.0. 0uest:

!8BBE"# 85E28# available at http-www.cisg.law.pace.educisgbibliomullis.html 55 Maimierska# A. !8BBB2+" at p. page B@4 /chlechtriem# G !n.+5"at para III.5? /ee Article +@ 4 Maimierska# A. !8BBB2+" at p2 8?4 ,>in determining whether a breach is fundamental# one must also take intoaccount the possibility to cure the defect by means of reasonable efforts# as well as the possibility of using the goods despite that defect.1

cited in )errari# ). ,)undamental 6reach of Contract Under the UN /ale Convention2 +@ 9ears of Article +@ CI/01 !+@2+" +@ $.L. O

Com. @5#at p2 @?5@ Article ?B!8"!a"# ?!8"!a"# E+ !8" !anticipatory breach" E5 !8" and !+" !instalment contracts".


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It is the duty of the seller to deliver the goods in conformity with the contract to the buyer. 5E In

modern international sales it was established that it was seller1s duty to deliver the goods. 5F /o

seller1s failure to comply his delivery obligation will entitle the buyer to re*ect 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

'elivery at the wrong time may# of course# *ustify the buyer in refusing to take the goods at

all.5B :here 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 re*ect the goods and treat the contract as

repudiated.? In commercial contracts# time is frequently construed of the essence with respect

to delivery#?8even though this is not epressly stated in the words of the contract.?+ In addition#

6aron 6ramwell ?5 says that in the absence of epress term it is necessary for those who

construe the instrument to see whether the parties intend to do it. 3owever# in Compagnie

Commerciale Sucres et Denres v C C>arniow -td 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 *udicial dictums?@ unanimously says that where the agreement

5E /ee s.+E of /0A4 /ection +B of /0A contains rules relating to the place# time# epense and other details of the delivery.5F /ee $en@amins at 8FQ+84 Scottish = 5ewcastle &nternational -td v ;thon 0halanos -td J+FK UM3L 88# J+FK 8 Lloyd


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was that a ship should sail on a particular day# that was a condition precedent# and breach of

this condition give the buyer a right to treat the contract as at an end. In 9ong ong Fir,?

however# 'iplock L.$. stated that time stipulation is not a condition4 it is merely an

,innominate1 or ,intermediate1 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. (here are many cases#?E 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. (herefore# in $unge48 Lord :ilberforce

re*ected &r. $ustice Garker contention and respectfully endorse Lord $ustice

&egaw1s?Bdecision.

&oreover# where the contract has no proviso as to the time of delivery# the goods must be

delivered within a reasonable time.@ :hat is a reasonable time is a question of fact. 6ut

&aule# $.@8 stated that the sailing within a reasonable time would also have been held to be a

condition precedent. (he case of Freeman v aylor,GH however# is an epress authority that the

delivering within a reasonable time is not a condition precedent.

(he obligation to deliver on time as a condition has traditionally been reinforced by treating is

as part of the description of the goods.@5 As Lord Cairns cogently shown by the *udgment in

$owes v Shand G4 that this implied term is a condition of the contract and# if the seller shipped

late# then# he is in breach of section 85 and buyer has the right to re*ect goods. 3owever# the

introduction of section 8@A takes away the right to re*ect for braches of s.854 if the breach is? 9ong ong Fir Shipping Co. -td. v. awasai isen aisha -td . J8B8K + Lloyd


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only slight. Law Commission#@@ 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 re*ected for

breach of section 85. (herefore# it says that in the nglish 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.@ In most sales contracts there will be epress provisions as to the time of

performance. (hus# where the parties have settled that the delivery should be eecuted ,in the

quickest possible way1 @E and ,the seller is aware of the urgent need of the goods1@F delivery

hardly a week after the stipulated date was held to be a fundamental breach. In the absence of

epress provision# Convention contains a fall2back provisions.@B (he buyer1s declaration of

avoidance requires additionally either a fundamental breachor a failure by the seller to

perform within an additional period of time set by the buyer for performance#8 provided that

this period is of a reasonable length.+ :illiams#5 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 prices? and seasonal@ a short

delay would entitle the buyer to declare the contract avoided immediately without fiing the

@@ /ee %eport No 8# Sale and Supply of 0oods !8BFE"# para ?.+? @ /ee Landgericht &iinchen#0ermany# + )eb. ++# available at http-cisgw5.law.pace.educases+++g8.html4 7berlandesgericht&iinchen# 0ermany# 8 $uly ++# available at http-cisgw5.law.pace.educases+E8g8.html"@E /ee 3amburg# &. U ,(he %emedy of Avoidance of Contract Under CI/0R0eneral %emarks and /pecial Cases1!+@2+" +@ $.L. OCom. at G2?5@@F /ee 7berlandesgericht 'iisseldorf# 0ermany# +8 Apr. +?# available at# http-cisgw5.law.pace.educases??+8g5.html@B Articles 55# of the Convention. Articles +@8 Articles ?E!8"4 &ullis# A. !8BBF" at p2 5@+ /ee 3onnold# 7.$. !8BBB" Iniform -aw for &nternational Sales under the 1J8K Inited 5ations Convention !5rd edition" Mluwer LawInternational# at p2+88# available at http-www.cisg.law.pace.educisgbibliohonnold.html.5 /ee :illiams# .A. ,)orecasting the Gotential Impact of the =ienna /ales Convention on International /ales Law in the United Mingdom1 )eview of the Convention on Contracts for the &nternational Sale of 0oods C&S0:# Mluwer Law International !+2+8" B2@E# available at

http-www.cisg.law.pace.educisgbibliowilliams.html? 3amburg# &. U !+@2+"at p2?5@@ /ee# 7berlandesgericht 'isseldort 0ermany# +? Apr. 8BBE# available at http-cisgw5.law.pace.educasesBE?+?g8.html4 Corte diAppello &ilano# Italy# + &ar. 8BBF# available at http-cisgw5.law.pace.educasesBF5+i5.html.

85

http://www.kluwerlaw.com/http://www.kluwerlaw.com/http://www.cisg.law.pace.edu/cisg/biblio/honnold.htmlhttp://www.cisg.law.pace.edu/cisg/biblio/williams.htmlhttp://www.kluwerlaw.com/http://www.kluwerlaw.com/http://www.cisg.law.pace.edu/cisg/biblio/honnold.htmlhttp://www.cisg.law.pace.edu/cisg/biblio/williams.html


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additional time. /chlechtriem says that the late delivery of goods with a quoted market

price is normally considered a fundamental breach. )urthermore# /chwener Esays 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. (hus#

even if it was not fundamental beforeFor an insignificant breachB the buyer can automatically

terminate the contract.E

As asserted both by commentators and courts# a mere delay in delivery of the goods does not

per se amount to a fundamental breach.E8 )errari#E+ 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 B that compliance with a particular deadline is essential for the buyer.

(herefore# a mere delay can be considered a fundamental breach of the contract. )urther# a

buyer could hardly avoid the contract for breach of late delivery# where the seller was not

informed of the purpose of the purchase.E5 (hus# time is of the essence and an integralE? part of

the delivery obligation# any delay will amount to a fundamental breach.

Early Delivery

:here a time has been fied for delivery# it would appear that delivery before that agreed date

is a breach of contract# entitled the buyer to re*ect the goods.E@ As Lord CairnsE stated that ,I

/ee /chlechtriem# G. ,Uniform /ales Law 2 (he UN2Convention on Contracts for the International /ale of 0oods1!8BF"# at n.+8#

available at http-www.cisg.law.pace.educisgbiblioschlechtriem.html. E /ee /chwener# I.,Avoidance of the Contrtract in Case of Non2Conforming 0oods !Article ?B!l"!A" CI/0"1 !+@2+" +@ $.L. O Com.?5E# at p2 ?5B.F &(id . n. at p 8+?B &ullis# A. !8BBF" at p25@E Art ?B !8" !b"E8 )errari# ). !+@2+"#at p2@? !fn. 88B"E+ &(id.. !fn 8+5".E5 /ee 6abiak# A. , Defining


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should say it meant that the shipment must be made>neither before nor after those months.1

(his has been reaffirmed by the 3L in the leading case $unge. 77 (herefore# it makes clear that

goods shipped too early can be re*ected.

(he option given# under the Convention# the buyer to take or refuse delivery would apply only

where the seller delivers goods at an earlier date4 which would be inconsistent with the

contract.EF It is up to the discretion of the buyer whether he accepts early delivery or not.EB (he

buyer1s refusal of an early delivery need not be based on a showing of inconvenience or

fundamental breach.F Article @+!8" does not provide the buyer the right to avoid the contract

but the right to refuse the early delivery.F8

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. (hus# 'onaldson

$F+ says that to deliver in the right place is ordinarily a condition of the contract. 3owever#

$en@amin,F5 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 re*ect the goods only if it is

substantially deprive the buyer of the whole benefit of the contract. (he obligation to deliver

in the right place is a condition of the contract4 as in international sales it is treated as forming

part of the description.

F?

&oreover# section 5+!8" provides that# as to the place of delivery#

EE /ee $unge Corp v rada% E%port S'. J8BF8K 8 :.L.%. E88 at [email protected] Article 5 and @+!8"EB

/ee nderlein# ). !8BB" %ights and 7bligations of the /eller under the UN Convention on Contracts for the International /ale of 0oods#

Ch. @# 8552+8# available at http-www.cisg.law.pace.educisgbiblioenderlein8.html. F

/ee Comments on Article @+ by $ohn 7. 3onnold JU./.K in the 5rd ed. !8BBB" of the most frequently cited tet on the CI/0- Uniform Law

for International /ales# available at http-www.cisg.law.pace.educisgtete2tet2@+.htmlF8

&(id.F+

/ee 'runa +ills -td v Dhanra@mal 0o(indram J8BFK 8 D.6. @@ at @. F5 /ee 6en*amin F2+?F?

Chuah# $. !+@" he -aw of &nternational rade !5rd ed "# London - /weet O &awell# at p2B84 0ill = Duffus S' v. Societe /our

-E%portation des Sucres S' J8BF@K 8 Lloyds %ep +8.

8@

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delivery of the goods to a carrier is prima facie deemed to be a delivery of goods to the buyer.

6ut Lord %odger F@ arguing that the presumption under section 5+ is displaced and thus under

the nglish law# the goods would not have been ,delivered1 to the buyer by being shipped on

the carrier1s vessel. (he application of s.8@A 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 re*ect the goods and declare the contract avoided only if dispatch from wrong place is

to be regarded as a fundamental breach of contract.F &oreover# where the seller has agreed to

deliver the goods to a particular place and to hand them over to a carrier FE instructed by the

buyer or to place them at the buyer1s disposal and tenders the goods at the wrong place# the

seller has defectively perform his delivery obligation# and is therefore liable under articles

?@!8" et se#. 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 .FF

&AI#URE IN RE#ATION TO T$E NATURE, 'UA#ITY OR CONDITION O& T$E "OOD!

In nglish law# the relevant duty of the seller in relation to the nature# quality or condition of

the good may derive from an epress or implied term of the contract. FB In the case of epress

terms# the right to re*ect depends on how the term is classified.B (hus# there will be an

automatic right to re*ect if the term is a condition# that is# ,of the essence1 of the contract. B8 6ut

F@ /cottish O Newcastle International Ltd v 7thon 0halanos Ltd# J+FK UM3L 88# J+FK 6us. L.%. @F5# @FB# at +4 further supported in(he Albaero J8BEEK AC EE? # per 6randon $ and %oskill L$ FQF8 and FBQF8+ respectively. (heir reasoning was approved by Lord

'iplock# at p F?F Article +@# ?B!8" !a"4 /chlechtriem# G.# /chwener# I. !+@" Commentary on the UN Convention on the International /ale of 0oods !+ndnglish edition"# 7ford - 7ford University Gress# at p2 5F4 L0 Aachen ?5 7 85B+# &ay 8?# 8BB5 !).%.0."# available at

http-cisgw5.law.pace.educasesB5@8?g8.html.FE Articles 55.FF /ee CA 0renoble P8@# +B &arch 8BB@# !Camara v. &agaron"# Available at#http-www.cisg.law.pace.educisgwaisdbcases+B@5+Bf8.html cited in n.F+ at p 2+?.FB &(id. [email protected] /ee . = 2. 9arrison v. nowles = Foster !8B8F" 8. M.6. FB8 /ee Chuah# $. !+@" # at p2FB# para 528.

8

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if the parties do not make it clear then it will generally be treated as an intermediate term

sub*ect to the seriousness of the breach.B+ 7n the other hand# there are number of implied

terms into every international sale described in the Act. (hese are conditions#B5 as to

description !s.85"# satisfactory quality !s.8? !+"" and fitness for purpose !s.8? !5"". (he

obligations imposed by these conditions must be complied to the seller otherwise the buyer

may be entitled to re*ect the goods.B?

Correspondence with description

&ost international sales controversies grow out of disputes over whether the goods conform

to the contract.B@ (herefore# the first implied term concerns the conformity of the goods with

description.B nglish courts strictly interpret this term as that the goods must correspond with

the contractual description.BE (he words that descriptionSBFmeant precisely the contractual

description#BB that is# identification8 of the goods. Channell $88 describes that# ,(he term

,sale of goods by description1 must apply to all cases where the purchaser has not seen the

goods# but is relying on the description alone.1 3ence# it would most frequently apply to

unascertained goods#8+ but it may be applicable to specific goods where there is no

identification otherwise than by description.85 (o 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

B+ /ee Cehave 5.6. v. $remer 9andelsgesellschaft m.(.9. # J8BE@K + Lloyd


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get what he bargained for.8? (hus s.85 makes ,description1 a condition# but the academics

writings8@ and *udicial dictum#8 however# suggests that not all the descriptions of goods are

conditions.

:hen the words in question relate only to the quality of the goods and their description# the

condition applied by s. 85 has no application.8E (he distinction between these two conditions#

however# is made by Lord 'unedin in +anchester -iners -td. v. )ea -td.8F 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. )urthermore# 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.8B&oreover# Chuah 88 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# sub*ect to the

de2minimis rule#888 are entitled to re*ect.88+ (herefore# even a minor nonconformity between

the goods and their description# unless the nonconformity is de2minimis# will entitle the buyer

to re*ect the goods.885 /crutton L.$# thus# quoting &cCardie $.88? stated that# there is a virtual

presumption that words used in a commercial agreement are for the purpose and normally be

taken seriously.

8? /ee Chanter v. 9opins, 8F5F# ? &. O :. 5BB# per Lord Abinger# cited in $owes v. Shand # !8FEE" + App. Cas. ?@@# per Lord 6lackburn

at p. ?F 8@ /ee Ademuni27deke# !8BBB" at p2+?# +@4 (akahashi# M !+5" at 8B. 8 /ee 'shington /iggeries -td. v Christopher 9ill -td . J8BE+K A.C. ??8# per Lord 'iplock# at @54 +acpherson rain = Co. v 9oward )oss = Co !8B@@" 8 :L% ?4 rada% &nternacional v 0oldschmidt # J8BEEK + Lloyd


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Satisfactory uality

In order to re*ect the goods under s.8?!+" 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#88@

and he epressly or impliedly makes known to the seller any particular purpose.

(he epression satisfactory qualityS replaced the epression merchantable qualityS which

started its statutory life in the 8FB5 Act. (he 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.88 Under the new Act satisfactory quality requires fitness for all the purposes for

which goods of the kind in question are commonly supplied4 88E which do not have to be

specially made known to the seller.88F

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 re*ect the goods.88B (herefore# a very trifling defect8+ or

where the goods could not be safely8+8 used was not merchantable which will entitle the buyer

to re*ect the goods.8++ Additionally# 'iplock .$8+5 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 eercise his right of re*ection. Chuah#8+? however# argue that there is no continuing

88@ /ee 2ones v. 2ust !8FF" L.%. 5 D.6. 8BE# per &ellor $. at ++2+588

/ee 9ardwic 0ame Farm v. Suffol 'gricultural /oultry /roducers 'ssociation


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obligation of satisfactory quality. Above all# with Lord 'iplock 8+@ 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 re*ect the goods.1 )urthermore#

:alton $.8+

hold that# where a specific good is sold over the counter of a shop to a person who

has an opportunity of eamining the good sold# there was no implied condition of quality.

6ridge#8+E Ademuni27deke#8+F further# says that the ambit of s.8?!+ " covers not only the

goods actually bought by the buyer and passing to him# but packages or containers in which

the goods are sold#8+B as well as information and instructions supplied with the goods.85

)ailure to comply this obligation will be breach of s. 8?!+" and rendering the buyer to

terminate the contract.

Fitness for purpose

In order to eercise an automatic right of re*ection under s.8? !5"# the particular purpose for

which the goods are required must be made known by the buyer to the seller# 858 and the

circumstances must be such as to show that the buyer relied# need not be total or eclusive# 85+

on the seller1s skill or *udgment.855 In 9ardwic 0ame Farm v. S.'././.'1N4 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 epress intimation by the buyer

8+@ Christopher 9ill -td. v. 'shington /iggeries -td. J8BE+K A.C. ??8#at p. @884 /ee also ". 5. -indsay = Co. -td. v. European 0rain =Shipping 'gency -td. J8B5K 8 Lloyd


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is necessary4 it will be implied85@ and be an easy step to draw the inference of reliance# 85

al(eit he had never previously supplied goods of the particular dimensions ordered. 85EIn

S.'././.'#85F however# Lord %eid contended that the case +anchester -iners -td. v. )ea -td.

85B

is not any authority for the assumption of reliance on the seller1s skill and *udgment. 6ut

/reist v -ast 14K 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# 8?8 there

was breach of that implied condition. (herefore# relying on a recent case of Clegg 14H it can be

says that in nglish law# the buyer has a right to re*ect goods which are not of satisfactory

quality.

Under the convention# according to /chlechtriem#8?5the *udgement of 6rett. L.$ in 8FEE says

what article 5@!8" today states4 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. (hese obligations will be epress# or be implied. 8?? If seller1s

failure to comply these obligations constitutes a fundamental breach8?@ then buyer can declare

the contract avoided4 he must give the notice of defect#8? sub*ect to the provisions of article

85@ /ee +ash = +urrell -td. v. 2oseph &. Emanuel -td. J8B8K 8 :.L.%. F+ # F4 +anchester -iners -td. v. )ea -td. J8B++K + A.C. E?4 $rown v. Edgington !8F?8" + &an. O 0. +EB4 $ones v. 6right !8F+B" 8@ 6ing. @55.85 /ee eheran3Europe Co. -td. v. S. . $elton ractors: -td. J8BFK + D.6. @?@ # per Lord 'enning &% at @@?4 2ones v. 2ust 18O8: L.%. 5D.6. 8BE # per &ellor $. At ++2 +54 Christopher 9ill -td. v. 'shington /iggeries -td. J8BE+K A.C. ??8 page ?EE

85E /ee Cammell -aird = Co. -td. v. +anganese $ron>e and $rass Co. -td. J8B5?K A.C. ?+85F J8BBK + A.C. 58. at p. F8.85B

!8B++" + A.C. E?8? J8B5K + M.6. 8?F# p2 8@8?8 /ee -am(ert v -ewis J8BF8K + Lloyd


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?. (hus# only if there is a ,serious1 breach of contract for defects in the goods the buyer is

entitled to avoid the contract.8?E

:here the parties had eplicitly agreed on certain central features of the goods# in doing so# if

the goods do not conform to such epress term the courts would hold a breach to be

fundamental.8?F (his is the primary rule on the assessment of the conformity of goods to the

contract.8?B (hus if the time for delivery has been essential in a contract# a reparable lack of

conformity will be considered a fundamental breach of contract.8@ &ullis8@8 further# says that

late shipment by the seller may be a breach of Article 5@!8" because it does not conform to the

contractual description. If the parties have not agreed otherwise# the secondary rule in Article

5@!+" applies. :ith the default rule of Article 5@!+"!a"# the parties do not need to specify the

purpose# as long as the goods are to be used for their ordinary purposes. (his rule is so widely

accepted as the seller1s implied obligation to provide goods which conform to the contract. 8@+

(he goods fit for ordinary purposes should be capable of being resold. 8@5 (o 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.8@? 6ianca#8@@ however# leaves the matter open and

8?EArticle ?B!8" !a"4 (his avoidance is not sub*ect to the precondition of fiing an additional period of time. !7L0 'Tsseldorf8 )ebruary

8BB?# available at http-cisgw5.law.pace.educasesB?+8g+.html 4 CI/0 Advisory Council 7pinion No. @ ,(he buyerum Einheitlichen I53aufrecht 5rd ed. !&Tnchen# +"# Art. 5@# p 5EE cited in

3enschel# ). % !+?".8@5 =eneiano# A =eneiano# A.# HNon Conformity of 0oods in International /ales. A /urvey of Current Caselaw on CI/0H# &nternational $usiness -aw 2ournal no. 8 !8BBE"# p. 5B2@# at ??.8@? 3erber# %. O Cerwenka# 6.# &nternationales aufrecht !&Tnchen# 8BB8"# Art. 5@# p. 8?# pt. ?4 iegler# U.# -eistungsstBringsrecht nachdem I53aufrecht !6aden26aden# 8BB@"4.# p. E4 /u# V.# Die vertragsgemQe $eschaffenheit der "are im I5C&)'-3aufrecht im

vergelich >um deutschen und chinesischen )echt !&Tnster# 8BB"# p. +F. cited in 3enschel# ). % !+?"8@@ 6ianca# C.&. O 6onell# &.$.# Commentary on the &nternational Sales -aw !&ilan# 8BFE"# Art. 5@# p. +F84 see also# 3onnold# $.7.#Iniform -aw for &nternational Sales under the 1J8K Inited 5ations Convention # p. +@@ et se#.# pt. ++@ see also ! +ussels case"0ermany F

&arch 8BB@ 6undesgerichtshof J/upreme CourtK# available at [email protected].

++

http://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://www.cisg.law.pace.edu/cisg/CISG-AC-op5.htmlhttp://www.cisg.law.pace.edu/cisg/CISG-AC-op5.htmlhttp://cisgw3.law.pace.edu/cases/911030c1.htmlhttp://cisgw3.law.pace.edu/cases/911030c1.htmlhttp://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cisg/biblio/henschel.htmlhttp://cisgw3.law.pace.edu/cisg/biblio/henschel.htmlhttp://cisgw3.law.pace.edu/cisg/text/secomm/secomm-35.htmlhttp://cisgw3.law.pace.edu/cisg/text/secomm/secomm-35.htmlhttp://cisgw3.law.pace.edu/cases/010312g1.htmlhttp://www.cisg.law.pace.edu/cisg/CISG-AC-op5.htmlhttp://cisgw3.law.pace.edu/cisg/cases/950308g3.htmlhttp://cisgw3.law.pace.edu/cisg/cases/950308g3.htmlhttp://cisgw3.law.pace.edu/cisg/cases/950308g3.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://www.cisg.law.pace.edu/cisg/CISG-AC-op5.htmlhttp://cisgw3.law.pace.edu/cases/911030c1.htmlhttp://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cisg/biblio/henschel.htmlhttp://cisgw3.law.pace.edu/cisg/text/secomm/secomm-35.htmlhttp://cisgw3.law.pace.edu/cases/010312g1.htmlhttp://www.cisg.law.pace.edu/cisg/CISG-AC-op5.htmlhttp://cisgw3.law.pace.edu/cisg/cases/950308g3.html


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undecided. )inally# a recent arbitral award on the CI/08@ 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.8@E In addition the divergences in the goods from governmental regulations are

to be considered a defect in quality.8@F

/chlechtriem#8@B

however# argues that the violation of

government food regulations must not necessarily represent a defect in quality# unless other

circumstances indicate otherwise. (his has been confirmed in other cases# including decisions

from common law *urisdictions.8)urthermore# where the accompany documents do not

conform to the contract description# this is to be treated like a defect in quality.88

It is possible that there is no fundamental breach in cases in which the buyer can make some

use of the defective goods.8+ (here are cases# however# appears to have been markedly less

strict on this factor. (hus# in an American case# 85 the sellera /te -td v 6ista Corporation /ty -td "# available at Yhttp-www.unile.infocase.cfm;

pidW8OidWB8OdoWcaseX4 Austria 85 April + 7berster 0erichtshof J/upreme CourtK4 available atYhttp-cisgw5.law.pace.educases?85a5.htmlX488 0%&AN9# 603# 5 April 8BB available at http-cisgw5.law.pace.educasesB?5g8.html 4 CI/0 Advisory Council 7pinion No. @#at para ?.B8+ 6undesgerichtshof# 5 April 8BB# http-cisgw5.law.pace.educasesB?5g8.html4 7L0 &Tnchen# + &arch 8BB?#http-cisgw5.law.pace.educasesB?5+g8.html4 see also# 7L0 'Tsseldorf U 88BB5# 8 )ebruary 8BB?#

http-cisgw5.law.pace.educasesB?+8g+.html4 7L0 )rankfurt# 8E /eptember 8BB8# http-cisgw5.law.pace.educasesB8B8Eg8.html4

7L0 )rankfurt# 8F $anuary 8BB?# http-cisgw5.law.pace.educasesB?88Fg8.html.". Cited in 3uber# G. !$anuary +E" 8525?# p2+Ibid.n.+5.85 Delchi Carrier S.p.'. v. )otore% Corp E8 ) 5d 8+? !8BB@" cited in +ullis, ' !8BBF" &(id .n.8@B4 see also E8 %abels !$anuary +E" 8525?# p2+ available at http-cisgw5.law.pace.educisgbibliohuber8.html cited in 3uber# 3. !$anuary +E" 8525?# p2+ Ibid.n.+5.8? &ullis# A !8BBF" page 5?8# Ibid.n.8@B4 see also Moch# G. ,(he Concept of )undamental 6reach of Contract under the United NationsConvention on Contracts for the International /ale of 0oods !CI/0"1 at p2+5?

+5

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consider all the surrounding circumstances and intention8@of the parties so as to decide how

important the term broken was to the buyer.

In Article 5@!+"!b"# it is stated that the seller only has to comply with the particular purpose

made known to him both epressly and impliedly.8

/o where the buyers relied on the seller1s

skill and *udgment and the goods contracted for are not fit for particular purpose# which the

seller knew# buyer can re*ect the goods.8E (here is no reliance where the buyer acts contrary

to advice from the /eller.8F

As 6ianca8B $afaradeh17K and Lachmi/ingh171 said that close consideration of Arts. ?!+"#

!5"# E8!8" and the principle of good faith dictates that the buyer is not entitled to re*ect the

goods for minor nonconformity or he knew or could not have been unaware of the lack of

conformity. /o 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.

"rong #uantity of the goods supplied

8@ Caiato v. Soc. FranRaise de Factoring &nternational Factor France, Cour d'ppel de 0reno(le# 85 /eptember 8BB@#[email protected]# cited &ullis# A !8BBF" page 5?8# !fn F5"Ibid.n.8@B 4 /pain 5 7ctober ++ AudienciaGrovincial JAppellate CourtK Gontevedra# available at Yhttp-www.unile.infocase.cfm;pidW8OidWFB@OdoWcaseX8 Neumann# (. !+E8"# note E see also fn.?4 see also -andgericht llwangen# +8 August 8BB@# 8 Mf3 7 5+B@. !Spanish papria case"

available at http-cisgw5.law.pace.educasesB@F+8g+.html8E

Landgericht &Tnchen# 0ermany +E )ebruary ++# Cisg2online.ch number- @? available at

http-cisgw5.law.pace.educases+++Eg8.html cited in Neumann# (. !+E8"# Ibid. n8E?4 ,%eliance occurs when the seller is a professional

or an epert but not merely an intermediary1 !/chlechtriem# p.# /chwener# I. !+@" Commentary on the UN Convention on the International

/ale of 0oods# !ed" Gublished 7ford - 7ford University Gress# at p. ?++." 8F nderlein# ). and &askow# '. !8BB+" International /ales Law- United Nations Convention on Contracts for the International /ale of 0oods4 Convention on the Limitation Geriod in the International /ale of 0oods# Gublisher New 9ork - 7ceana# at p.8B4 3enschel# ). %.

!+@" (he Conformity of 0oods in International /ales# Copenhagen - (homson0ad$ura# at p. +5E. cited in Neumann# (. !+E8"# &(id .n.8E?.8B

6ianca# C. &. et al. !8BFE" Commentary on the International /ales Law. (he 8BF =ienna /ales Convention !8BFE" &ilano - 0iuffr e# at

p.5B+.4 see also /chlechtriem# G. !8BF" Iniform Sales -aw 3 he I53Convention on Contracts for the &nternational Sale of 0oods Gublished by &an# =ienna# at p2 E available at [email protected] .8E $afaradeh# &. !'ecember +8"# note 2 [email protected] aalso fn.+5 &(id . n. B8E8 /ingh# L. ,United Nations Convention on Contracts for the International /ale of 0oods !8BF" JCI/0K- An eamination of the buyer


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In the carrying out of a commercial contract some slight elasticity with regard to the quantity

of goods is unavoidable.8E+ (he tender of shortfall or ecess quantity evidences an unreadiness

and unwillingness to perform the contract.8E5 (herefore# this duty is a strict one# and any

failure in this respect normally entitles the buyer to re*ect the incorrect quantity of goods

delivered.8E? 6y s.5!8" the buyer has a statutory right to re*ect the contract goods if the

seller deliver less then the contracted amount# sub*ect to section 5 !+A". Chitty#8E@ however#

argued that a delivery which is defective under this section does not entitle the buyer to treat

the contract as repudiated. 6en*amin#8E however# mentioned that quantity of the contract

goods is part of their description4 short delivery ranks as no delivery and it produce much the

same effect as that of breach of condition. )urthermore# s.5!+" provides that where the seller

delivers a quantity of goods ecess than the buyer contracted to sell he can generally re*ect the

whole of the goods delivered sub*ect to s.5 !+A". 8EE And it produces much the same effect as

that of breach of condition.8EF (his 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 condition4 thus entitling the buyers to re*ect the goods.

(he Convention does not provide rule for less quantity delivered. Under Article @+!+" the

buyer may accept or re*ect any ecess goods. (he delivery of ecess quantity can# in some

circumstances# constitute a fundamental breach and enable the buyer to avoid the contract and

8E+ /ee 6en*amin 8+2+B4 )euter v. Sala# !8FEB" ? C.G.'. +5B4 )alconbridge# '. $. !8B+8" 9and(oo ;f he -aw ;f Sale ;f 0oods, CanadaLaw 6ook Company# chapter v# available at http-chestofbooks.combusinesslaw3andbook27f2(he2Law27f2/ale27f20oodsinde.html# accessed on [email protected] &(id . n.8E.8E? 9onc v. +uller # !8FF8" E D.6.'. B+ per 6ramwell L. $. at p. BB4 0ill = Duffus v Societe pour lLE%portation des Sucres !8BF@" 8Lloyd1s %ep. +8. per Lord 'iplock at p.5B8E@ /ee 6eale# 3. !+F" Chitty on contracts !5th ed." London- /weet O &awell# at ?52+F@ !available at :estlaw"4 $ehrend = Co v /roduce $roers Co J8B+K 5 M.6. @5.8E 6en*amin 8+.+B4 /olenghi v. Dried +il Co. !8B?" 8 Com. Cas. ?+ 4 Cro>ier, Stephens = Co. v. 'uer(ach J8BFK + M. 6. 88 # at p.8E4 Champion v Short !8FE" 8 Camp. @5# as eplained in arling v ;)iordan !8FEF" + L.%.Ir. F+. cited in 6eale# 3. !+F"# at F2?.8EE 'rcos -td v )onaasen = Sons J8B55K AC ?E4 Shipton 'nderson = Co v "eil $ros = Co J8B8+K 8 M6 @E?4 0a(riel, "ade = English -td v 'rcos -td !8B+B" 5? LI L %ep 58EF Cunliffe v 9arrison, !8F@8" Ch.B5 at p.B

+@

http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=ICC8FE9A0E44911DA8D70A0E70A78ED65http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=ICC8FE9A0E44911DA8D70A0E70A78ED65http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=ICC8FE9A0E44911DA8D70A0E70A78ED65http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=ICC8FE9A0E44911DA8D70A0E70A78ED65http://chestofbooks.com/business/law/Handbook-Of-The-Law-Of-Sale-Of-Goods/index.htmlhttp://chestofbooks.com/business/law/Handbook-Of-The-Law-Of-Sale-Of-Goods/index.htmlhttp://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Arcos_v_Ronaasen.htmlhttp://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Arcos_v_Ronaasen.htmlhttp://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Arcos_v_Ronaasen.htmlhttp://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Shipton,_Anderson_v_Weil_Brothers.htmlhttp://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Shipton,_Anderson_v_Weil_Brothers.htmlhttp://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Shipton,_Anderson_v_Weil_Brothers.htmlhttp://chestofbooks.com/business/law/Handbook-Of-The-Law-Of-Sale-Of-Goods/index.htmlhttp://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=I73142B10E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=11&crumb-action=replace&docguid=I92A9CCF0E42711DA8FC2A0F0355337E9http://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Arcos_v_Ronaasen.htmlhttp://www.vanuatu.usp.ac.fj/Courses/LA313_Commercial_Law/Cases/Shipton,_Anderson_v_Weil_Brothers.htmlhttp://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=ICC8FE9A0E44911DA8D70A0E70A78ED65http://login.westlaw.co.uk/app/document?src=doc&linktype=ref&&context=27&crumb-action=replace&docguid=ICC8FE9A0E44911DA8D70A0E70A78ED65


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return the entire delivery.8EB 3onnold#8F further# says parties who are acting in good faith# a

seller1s refusal to make a reasonable arrangement would give the buyer an added rationale for

supporting re*ection of the entire shipment. (he missing accompanying documents treat as a

defect in quantity.8F8

(he buyer# however# may require accepting the goods when the ecess in

quantity is trivial or is not inconsistent with the practices established by the parties or usage 8F+

or when the seller does not claim full payment for delivery 8F5

RI"$T TO REJECT T$E DOCUMENT!

&uch of the nglish law on the international sale of goods was developed in relation to the

,documentary sales1 of commodities.8F? (hus# the academics8F@ and courts8F have emphasied

that generally both in )76 contract and CI) contracts the role of the documents becomes

much more important delivery obligation. According to he 2ulia187 sellers are obliged to

tender three documents8FF to the buyer those are bill of lading !67L"# marine insurance policy

and invoice. 'evlin $8FB thus# says that# among these documents if they are tender as defective

or they are tendered late# then the buyer is entitled to re*ect.

According to (akahashi8B documentary breach arises when they are not in conformity with

the sale contract. (he right to re*ect for nonconformity follows where the delivered document

8EB demand cash for ecess !/chlechtriem# G. !8BF" at EB# Ibid. n.8F@4 3onnold# 7. $. !8BBB" at p 5?E Ibid. n. E8 Lookofsky# $. (he8BF United Nations Convention on Contracts for the International /ale of 0oodsS# +B !'ecember +" 828B+. p2 8+E n2 +5@ !fn.8"available

at http-www.cisg.law.pace.educisgbiblioloo@+.html"8F 3onnold# 7. $. !8BBB" at p 5?E8F8 CI/0 Advisory Council 7pinion No. @# &(id. n.88.8F+ Art. B8F5 3onnold# 7. $. !8BBB" at p 5?E8F? &(id .8F@

&errett# L. ,Case Comment- Glace of delivery in international sales contracts1 !+F" Cambridge Law $ournal# at p.+?8F $owes v Shand !8FEE" + App.Cas. ?@@# per Lord 6lackburn# at p ?F+4 'lfred C oepfer v -enersan /oortman 56 [8BFK 8 Lloyd1s%ep. 8?5.8FE Comptoir d'chat et de 6ente du $oeren(ond $elge SP' 'ppellantsM v -uis de )idder -imitada )espondents. he 2ulia: J8B?BK A.C. +B5.8FF &oreover# Lord :right in /myth v 6ailey !8B?" 5 All % # at p2E# mentioned notice of appropriation as another document which theseller has to tender if the contract goods are unascertained4 see also Groctor O 0am(le v $echer # J8BFFK + Lloyd


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is not genuine.8B8 It is an essential part of the contract to tender genuine documents relating to

the goods complying with the contract to the buyer.8B+ A 67L contain false information about

an aspect of the performance of the contract# like where it did not# refer the initial shipment of

the goods8B5

or portray the actual !contractual" state of affairs at the time of shipment8B?

or the

wrong destination8B@ or deviate from stipulated route of voyage8B is not a genuine document.

(he presence of a divergence clause in the 67L may entitle the buyer to re*ect the goods as it

may enable the carrier to depart from the stipulated shipment route. 8BE In contrast# $urstall v

0rimsdale1J8 says deviation clauses are now a common feature in the 67L which will not

entitle the buyer to re*ect the documents.

(he 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#8BB that is# the whole of the voyage to be

undertaken.+ Any derogation from it can result in repudiation of the contract.+8 6ailhache.

$#++ 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 buyer1s risk.+5 (he buyer cannot impose on the seller a guarantee that the documents

8B8 0riffin# 6.# and 'ay# '. !+5" (he Law of International (rade !5rd ed" London - 6utterworths LeisNeis# at p.F8B+ 2ames Finlay = Co. -d. v. 5. 6. wi 9oo ong 9.+ # !8B+B"8 M6 ?# CA# per /crutton L.$ p ?F4 wei e Chao v $ritish raders =Shippers -td J8B@?K + D.6. ?@B per 'evlin $ at p. ?E" 4 +otis E%ports -td v Dampsi(sselsa(et 'F 8B8+ A/ !No.8" J+K 8 Lloyd


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shall continue to be effective.+? If the documents were good in their inception the sellers had

performed their duty of the contract+@ and they are bound to accept the tender.+

(he buyer can re*ect the documents where the 67L is not clean.+E :here the 67L has been

altered to correspond with other documents that must be tendered by the seller# there is a

presumption that the 67L is unclean and entitled the buyer to re*ect the documents.+F %e

/alomon#+B in contrary# hold that alteration to the 67L does not entitled the buyer to re*ect

the documents4 though Ghillmore .$ opposed in the same case. It is a trite law +8 that where

the documentary defects is discovered before taking delivery of the goods# the buyers are

entitled to re*ect the consignment even though the goods had been paid for and property in

them had passed to the buyer.+88 'ocuments may be defective where a c.i.f. seller tendered

documents which did not include all those required by the contract4 the buyer could no doubt

re*ect the tender.+8+ 3owever 6en*amin+85said that question of re*ection depends on the

significance of the missing document.

(he position is# however# different# if the document# which reveals a defect in goods# is not# in

itself# a defective document.+8? 6en*amin#+8@ conversely# says that the documents disclosed a

breach in the goods *ustifying their !i.e.# the goods" re*ection or not itself *ustifying re*ection+8

+? &cMendrick# . !+" at.p.5E+ para 8525F.4 +an(re Saccharine Co -td v Corn /roducts Co -td !8B8B" M.6. 8BF+@ -andauer = Co. v. Craven = Speeding $rothers J8B8+K + M. 6. B?.4 Cro>ier, Stephens = Co. v. 'uer(ach. J8BFK + M. 6. 88+ Sanders $rothers v. +aclean = Co. !8FF5" 88 D. 6. '. 5+E+E 6ridge# &. 0. !+E"he international sale of goods* law and practice !+nd ed." 7ford - 7ford University Gress# at p178., para3 4.JKM& 0olodet O Co Inc v Carnikow2%ionda Co Inc !(he 0alatia" J8BFK 8 :.L.%. ?B@ per 'onaldson $. at. p2@B4 Cehave 56 v $remer 9andelsgesellschaft m(9 he 9ansa 5ord: J8BEK D.6. ??.at E8+F /IA( di del )erro v. (rada 7verseas /AJ8BFK 8 Lloyd1s %ep. @5+B %e /alomon O Co Naudsus !8FBB" F8 L.(. 5+@+8 0ill = Duffus v. $erger J8BF?K A.C. 5F+# per Lord 'iplock at p. 5B@+88 wei e Chao v. $ritish raders and Shippers -td . J8B@?K + D.6. ?@B# per 'evlin $ p2 ?FE4 7ne may argue that in C.I.). contract it is predicted that property on the goods passes on the tender of documents. 6ut Atkin L.$.# in the course of his *udgment in 9ardy = Co.-ondon: -d. v. 9illerns and Fowler #J8B+5K + M.6. ?B# dealt with this situation and says that the buyer undoubtedly retain a right# to

eamine the goods when they arrive# and to re*ect them if they are not in conformity with the contract.+8+ )e Den(igh Cowan = Co. and ) 'tcherley = Co. !8B+8" B L.$.M.6. F5.+85 6en*amin 8B28?F( +antovani v Carapelli Sp' J8BEFK + Lloyd


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will entitle the buyer to re*ect the documents. A case decided in the 3igh Court of Australia#+8E

that a c.i.f. buyer is entitled to re*ect 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 'iplock#+8F

however# says that there was thus no rationale

for this decision and those *udgments is not the law of ngland.

(he buyer is entitled to re*ect the documents where the late shipment disclosed in the

documents.+8B (he 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. ++ (he

buyer# therefore# is entitled to re*ect the documents if they are not tendered within the time

limit specified in the contract.++8

Now the question is whether the 8BB? Act has taken away the right to re*ect where the

documentary breach is only slight. /ection 8@A and 5!+A"# however# applies to breaches

related goods4+++ but it is arguable++5 that section 8@A should also apply in the documentary

aspects in shipment sales. (herefore# if the breach is so slight that it would be unreasonable

for him to re*ect them# then buyer can not re*ect the documents.

/o far as the position under the Convention is concerned# it says little about the documents. ++?

(hese documents could be 67L# the insurance policy# invoice etc.++@ (hus# failure to tender

conforming these documents constitutes a breach of contract. (he right to avoid the contract

+8E 9enry Dean = Sons Sydney: -td. v. ;Day /ty. -td. !8B+E" 5B C.L.%. 55 per Mno C.$. and 3iggins $. # (o which reference is made in

$erger = Co. &nc. 'ppellants v 0ill = Duffus S.'. )espondents J8BF?K A.C. 5F+# by Lord 'iplock at 5B8#5B+.+8F $erger = Co. &nc. 'ppellants v 0ill = Duffus S.'. )espondents J8BF?K A.C. 5F+# by Lord 'iplock at 5B8#5B++8B /roctor = 0am(le /hillipines +anufacturing Corpn. v. urt '. $echer 0.m.(.9. = Co. .0. J8BFFK + Lloyd


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in accordance with Art ?B!8"!a" #however# is conditional upon the buyer establishing that the

breach was fundamental.++

/chlechtriem++Esays that the lack of insurance coverage may deprive the buyer of the

possibility of reselling the goods in transit4 and this ignorance can constitutes a fundamental

breach. &oreover 3uber ++Fsays that failure to present the documents required by the contract4

relevant usage4 practices4 or the presentation of defective documents must be regarded as a

fundamental breach. 6ut in Co(alt sulphate caseHHJthe court refuse 9u(er views and re*ect the

buyer to declare the contract avoided# as he could not prove sufficient detriment to constitute

a fundamental breach. It was# further# argued by /chlechtriem ,+5 that it is possible to assert a

fundamental breach without proving the detriment.

According to &ullis+58 the decision of Co(alt 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 eclusively. &ullis#+5+ nevertheless# argued that since Article 5 states that

the contract may impose separate obligations in relation to goods and documents. (herefore#

breach in respect of either# if fundamental# should entitle the buyer to avoid the contract.

)urther# where the buyer could easily remedy the defective documents by obtaining correct

documents the seller can not treat the tender of defective documents as defective4 and declare

the contract avoided.+55 &ullis#+5? however# contends that this is an un*ustifiable burden on the

++ /ee &ullis# A. !8BBF" at p2 5??#++E /chlechtriem# G. !8BF"# # at para +8#++F /chlechtriem !8BBF."# Commentary on the I5 Convention on the &nternational Sale of 0oods !CI/0" !+nd ed. in nglish translation by(homas" comment on art.?B !by 3uber" at 8. cited in (akahashi# M !+5". Ibid.. n. .++B 0%&AN9# 603# 5 April 8BB available at http-cisgw5.law.pace.educasesB?5g8.html cited in &ullis# A. !8BBF" at p2 5??# Ibid.n. ?8+5 /chlechtriem# G. !8BF"+58 &ullis# A. !8BBF" at p2 5?#+5+ &(id . at p2 5?# 5?E4 &ullis# L.C.A !8BBE".+55 7L0 'usseldorf U 88BB5# 8 )ebruary 8BB?# available at http-cisgw5.law.pace.educasesB?+8g+.html4 0%&AN9# 603# 5 April8BB available at http-cisgw5.law.pace.educasesB?5g8.html4 L0 3eidelberg 7 ?+B+# 5 $uly 8BB+ available at

http-cisgw5.law.pace.educasesB+E5g8.html+5? &ullis# A. !8BBF". at pp. 5?E# 5?F.

5

http://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cases/920703g1.htmlhttp://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cases/940210g2.htmlhttp://cisgw3.law.pace.edu/cases/960403g1.htmlhttp://cisgw3.law.pace.edu/cases/920703g1.html


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buyer which has no basis in the Convention. In other cases+5@ the buyer1s remedied duty has

been resisted and courts have allowed buyer to avoid the contract.

In case of trivial documentary breaches &ullis+5says that# to treat this trifling documentary

breaches court has to see what the buyer has epected from that particular contract.+5E

&oreover :ill+5F has pointed out that it is to be *udged ob*ectively taking account of the type

of contract concluded the commercial background# and all the terms of the contract. /o

pursuant to (akahashi+5Ba presumption can be established that a documentary breach is a

fundamental breach.

#O!E T$E RI"$T TO TERMINATE T$E CONTRACT

:here a buyer makes unequivocal representations by epress words or by implication that he

will accept the goods# may lost his right of re*ection under the common law doctrines of

acceptance# waiver and estoppel4 and the provisions of the /0A.

Acceptance

(he notion of acceptance constitutes an important limitation upon the buyer1s right of

return.+? In deciding acceptance the buyer must have a reasonable opportunity to eamine the

goods+?8 and to receive all the information from the seller.+?+ (he statute+?5 distinguishes

+5@ ICC Court of Arbitration# E@588BB?#[email protected] 4 L0 6aden 6aden# 8BB8F8?# 8? August 8BB8#

http-cisgw5.law.pace.educasesB8F8?g8.html+5 &ullis# A. !8BBF" at p2 5?F 5?B.+5E Article +@.+5F 6ianca# C. &.# 6onnell# &. $. !8BFE"# comment on art. +@ !by :ill. &"4 see also (et of /ecretariat Commentary on article ?B# para E#!reads that the buyer will have right to re*ect the document al(eit that discrepancy was of little practical significance" available at

http-www.cisg.law.pace.educisgtetsecommsecomm2?B.html+5B (akahashi# M !+5". G.8+E. &(id. n. .+? /tol*ar# /. ,(he 'octrine of Acceptance in sales1 !8B@E" 8 &elbourne U.L.%. ?F5. at G. ?F54 0oode# %. &. !+?"# at p.5?.+?8 /ee sections 5@!+" and 5@!@"4 0oode# %. &. !+?"# at p.++84 6ridge# &. 0. !+E"# at p.??84 $iddell $ros. v. E. Clemens 9orst Co.J8B88K 8 M.6. per 3amilton. $.at G2 ++84 /olenghi v. Dried +il Co !8 Com. Cas. ?+ .I.+?+ Clegg v ;lle 'ndersen tPa 5ordic +arine J+5K :CA Civ 5+ per Lady $ustice 3ale.+?5 ss. 5? to 5@

58

http://cisgw3.law.pace.edu/cases/947531i1.htmlhttp://cisgw3.law.pace.edu/cases/947531i1.htmlhttp://cisgw3.law.pace.edu/cases/947531i1.htmlhttp://cisgw3.law.pace.edu/cases/910814g1.htmlhttp://www.cisg.law.pace.edu/cisg/text/secomm/secomm-49.htmlhttp://cisgw3.law.pace.edu/cases/947531i1.htmlhttp://cisgw3.law.pace.edu/cases/910814g1.htmlhttp://www.cisg.law.pace.edu/cisg/text/secomm/secomm-49.html


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three+?? ways of acceptance- !i" an intimation of acceptance# !ii" acts inconsistent with the

seller


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goods to the carrier for transmission to the third party+@? would be an act inconsistent with the

ownership of the seller. In contrast# it was firmly established that delivering the goods to a

sub2buyer4+@@ a mere inquiry to resale+@ or a claim against the insurer for damages +@E is not an

inconsistent act. It is further# however# says that where the buyer do an act inconsistent with

the seller1s reversionary right# buyer will lose his right of re*ection.+@F &oreover it was held

that where a buyer# with knowledge of the breach#+@B takes delivery of the goods# acts upon it

and keeps them# it will be construed that he has accepted the goods.+

$y laps of reasona(le time

As 6en*amin+8 and /tol*ar ++said that# the notion of reasonable time prevents the eistence of

any long2term right to re*ect. It is# therefore# necessary to consider what amounts to a

reasonable time. A reasonable time would include an opportunity of eamining the goods+5

and the time taken to resell the goods together with an additional period in which they could

be tested by the sub2buyer .+? A buyer# in nglish law# lost his right to re*ect the goods fairly

quickly.+@ It has been# however# argued that the buyer has a long2term right to re*ect.+ 7n the

other hand# proposals to alter the law to create such a long2term right have been re*ected.+E /o

it can be said that the reasonable time to re*ect the goods depends on circumstances. +F

+@? E= S )u(en -td v Fair $ros = Co -td !8B?B" 8 M6 +@? per 3ilbery $4 9ammer = $arrow v Coca3Cola !8B+" NL% E+5# !noted in!8B5" + &od L% 8B?".+@@ (he Law Commissions# Sale and supply of 0oods, para. @.5F. cited in Atiyah# G. /. !+@"# at p. @85 !fn E"4 see also s. 5@!"!b".+@ Fisher )eeves = Co -td v 'rmour = Co -td !8B+" 5 M6 8?# per /rutton L$ at +? +@E 2 = S )o(ertsons 'ust: /ty -td v +artin !8B@@2" B? CL% 5+@F wei e Chao v. $ritish raders and Shippers -td . J8B@?K + D.6. ?@B# per 'evlin $ p2 ?FE4 Atiyah# disagree with this# see for contrary

argument Atiyah# G. /. !+@"# p2 @8@.+@B Also of a bill of lading and the fact that it is a nullity.+ 0oode# %. &. !+?"# at p.5@+. substantial or repeated or prolonged use# see 'rmaghdown +otors v 0ray !8B5" NL% @4 -amarra vCapital $an /lc !+?" 0:' ?2F8E+8 6en*amin 8+2@@++ /tol*ar# /. !8B@E". G2 ?F5.+5 s.5@!+"+? ru I: -td v omaidis 0m(9 !+" + All % !Comm" @B?# per $udge $ack DC+@ $ernstein v /amson +otors 0olders 0reen: -td J8BFEK + A% ++ per %ougier $4 see also &otor 7il 3ellas !Cornish" %efineries /A v/hipping Corp. of India !(he Manchen*unga" 1JJKT 1 -loyds )ep. NJ1 at NJ8, 9-M /ercival v. $la e !!8F+" + C. O G. @8?. per Abbott C.$ at

@E+ si months see Clegg v ;lle 'ndersen tPa 5ordic +arine J+5K :CA Civ 5+4 )ogers v /arish Scar(orough: -td !8BFE" D6 B55*Cash v. 0iles 8F+F" 5 C. O G. ?E.+E /ee Law Com. No.8# /c. Law Com. No.8? !8BFE"# paras @[email protected] above# cited in 6en*amin 8+2@@.+F 2ones v 0allagher J+?K :CA Civ. 84 J+@K 8 Lloyd


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)urther# a buyer may lose his right to rescind the contract by failing to make their election

within a reasonable time.+B A buyer# however# is not deemed to have accepted goods if he

asks for or agrees to their repair by the seller.+E

0ow)% +E8

and 6en*amin+E+

suggested that the question of acceptance under section 5@ neither

arises before section 5? 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 re*ect by

accepting all of the goods# or by accepting goods included in the same commercial unit.

Waiver

According to no+E5 the principle of ,waiver1 were fostered by the interpretation given by the

case of -ittle@ohn v. ShawH74 to its actual ruling. (herefore# a buyer may lose his right of

termination by way of waiver by election and estoppel.+E@

$y election

A waiver by election is an epression of an intention to affirm the contract. +E 7nce the buyer

chooses to affirm the contract with actual knowledge4 he can not go back upon it and seek to

re*ect the goods.+EE )urther# where a buyer elects to accept non2contractual goods# he is bound

by his election.+EF 6en*amin+EB however# says that this act of election can be retracted with the

consent of the other party

+B Clough v. -ondon and 5orth "estern )ailway Co. !L.%. E ch. +" per &ellor $.at [email protected] failure to give early notice of unfitness of goodsmay destroy the provability of his complaint# see Fisher v. Samuda !8FF" 8 Camp. 8B4 ;ell v. Smithc !8F8@" 8 /tark. 8E cited in /tol*ar#/. !8B@E". pp.?F@# ?F4 0roning v. +endham#! !8F8" 8 /tark. +@."4 9opins v. 'pple(y !!8F8" 8/tark. ?EE# per Lord llenborough p2 ?EB.

+E s.5@ !" !a". In contrary Lord &arnoch says that through a retendering of repaired goods the buyer could not lost his original right of re*ection.! Atiyah# G. /. !+@"# p2 @+"+E8 0ow)%# 6.C.L. ,/ale of 0oods2 %ight of %e*ection1 !8B?B" 8+ &.L.%. 5F+E+ 6en*amin !8+2 "+E5 no %.L. ,Grice &ovement and Unstated 7b*ections to (he 'efective Gerformance of /ales Contract1!8B5@". ?? 9ale L.$. EF+# at EF+.+E? -ittle@ohn v. Shaw, !8FBB". 8@B N. 9. 8FF# 8B8# @5 N. . F8# F88# cited in N7# %.L. !8B5@". At EF+4 :here the New 9ork CA declaredthat if a particular ob*ection is taken to the performance and the party is silent as to all others# they are deemed to be waived.S +E@

/tol*ar# /. !8B@E". G2 ?FE4 'ebattista# C. !8BBF" at. G. +8?# +8@+E 6en*amin 8+25E+EE +otor ;il 9ellas Corinth: )efineries S' v Shipping Corp. of &ndia he anchen@unga: J8BBK 8 Lloyd


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$y estoppel

:aiver by estoppel arises when the buyer agreed by a separate agreement+F with the

defaulting seller or by his conduct led the seller to believe that he will not eercise his right of

re*ection.+F8 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.+F+ In regard to document

the buyer may lose his right of re*ection by an implied waiver by accepting the shipping

documents.+F5 (he buyer cannot etract from this binding position# where it would be

inequitable to do so.+F? 6en*amin#+F@ however# says that the buyer can etract 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 time+F after he has discovered it or ought to have discovered it. +FE If the goods are

defective in several aspects# notice must be made to each defect individually.+FF (he buyer#

further# forfeits his right to avoid where he failed to notify the seller about the defect

specifying the nature of the third2party right or claim within a reasonable time.+FB 3owever#

+F wei e Chao v $ritish raders and Shippers -td 8B@?K + D.6. ?@B per 'evlin $. at ?EE.+F8

6ridge# &. 0. !+E"# at p2??@. para 8.8E4 &cMendrick# . !+"# p.?FB# para 8.B4 6en*amin 8+25@4

'vime% S' v Dewulf = Cie.J8BEBK + Lloyd


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the buyer retains this right# in spite of his failure to eamine and give the notice# +B 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.+B8

(he 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. +B+ (hese restrictions apply before+B5

as well as after +B? the declaration of avoidance. (he buyer1s avoidance right may be further

blocked when concurrent restitution# that is# the price cannot be refunded.+B@ A buyer may be

barred from avoidance if he contributed to the seller1s failure by his own act or omission.+B

)urther# the buyer


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of cases#5+ confidently opines that where the buyer lawfully re*ects the non2conforming

goods# the seller has a general right to make a fresh tender# provided that the time for delivery

has not yet epired.55 $afaradeh#5? further# says it appears from 0oode that this right to cure

can also eercise where the seller1s breach constitutes a breach of the statutory implied

conditions. (he buyer# however# can re*ect a re2tender in this case# if the seller1s time for

performance is made of the essence of the contract# or if it is too late for him to do so.5@

Atiyah# 6ridge and others#5 on this view# disagreed and says that the buyer is always entitle

to re*ect the non2conforming goods and terminate the contract# where seller1s delivery of�

law-200 assisgnment

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