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Part VII Obligations of the Seller, 29 Delivery

From: Global Sales and Contract Law

Ingeborg Schwenzer, Pascal Hachem, Christopher Kee

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved. Subscriber: null; date: 09 May 2021

Subject(s):
Place of delivery — Time of delivery — Date of delivery — Deemed delivery

29  Delivery

  1. A.  General 29.01

    1. I.  Terminology 29.02

    2. II.  Legal Delivery 29.08

    3. III.  Effects 29.11

      1. 1.  Internal Effects 29.12

      2. 2.  External Effects 29.16

    4. IV.  Impact of Breach of Other Obligations 29.21

  2. B.  Place of Delivery 29.25

    1. I.  Contractual Agreement 29.26

      1. 1.  General 29.26

      2. 2.  Trade Terms 29.27

        1. (a)  ICC INCOTERMS® 29.28

        2. (b)  Domestic Trade Terms 29.33

    2. II.  Default System 29.36

      1. 1.  Domestic Rules 29.36

      2. 2.  Uniform Rules 29.41

  3. C.  Time of Delivery 29.45

    1. I.  Contract 29.46

      1. 1.  Specific Date 29.48

      2. 2.  Period 29.50

      3. 3.  Usages and Circumstances 29.57

    2. II.  Default Rules 29.58

  4. D.  Notification Duties 29.62

(p. 334) A.  General

29.01  The previous chapter explained how the obligation of the seller to deliver the goods is a characteristic obligation for sales contracts.1

I.  Terminology

29.02  ‘Delivery’ has various aspects. Therefore, it is necessary to subcategorize the term by adding qualifying words. The plain meaning of the word delivery and its traditional understanding envisage that the seller physically hands over the goods to the buyer. This form of delivery occurs where the seller and the buyer are in the same place at the same time or where the buyer itself collects the goods from the seller or the seller takes the goods to the buyer. All of these actions may of course be effected by representatives. This form of delivery can be described as physical delivery. Included in this notion is the sale of software which may be electronically transferred.

29.03  This traditional notion of delivery comes from a market place where buyers and sellers are engaged in face-to-face transactions with the consequence that goods are handed over and a change in physical possession occurs. However, nowadays this notion of delivery is insufficient because of the implicit emphasis placed on a change in physical possession. Particularly in international trade, a buyer may frequently not be interested in obtaining physical possession of the goods before reselling them on the market. Similarly, because of the importance of delivery in relation to other aspects of sales such as the passing of risk, it is necessary for the law to deem delivery to have occurred typically where the seller has done all that is required of it to fulfil its delivery obligation despite the buyer failing to take physical possession. Furthermore, the buyer may already be in possession of the goods at the time when delivery should occur, (p. 335) thus excluding any change in physical possession. This is also true in situations where the seller retains physical possession of the goods.

29.04  To accommodate all these needs of trade, legal systems have developed two further subcategories to the notion of delivery. Although different terms may be used by individual legal systems to describe these categories, the factual situations envisaged are the same.

29.05  In the first instance a ‘symbolic delivery’2 may occur. A symbolic delivery is one where the seller delivers an item to the buyer, typically documents3 representing the goods and entitling the holder of the document to possession of the goods.4 This is a particularly common form of delivery in the commodity trade. As discussed earlier, in some legal systems this form of delivery has explicitly been separated into the obligation of the seller to hand over documents representing the goods to the buyer.5 However, the notion of symbolic delivery is not to say that there is no change in possession, simply that there is no change in physical possession. The buyer indeed acquires constructive possession.

29.06  The second instance can be described as ‘deemed delivery’. This category encompasses all situations where the law deems delivery to have occurred despite the lack of a change in physical possession or the handing over of any item intended as symbolic delivery. Typically, such deeming rules are required to protect the seller in instances where physical or symbolic delivery has not occurred due to some act or omission by the buyer. The notion of deemed delivery may also be necessary to deal with situations where either the buyer had physical possession prior to the conclusion of the contract or where the seller retains physical possession of the goods on behalf of the buyer.6

29.07  All of the above-described categories of delivery fall under the rubric of legal delivery. Legal delivery is the point in time and place where the applicable law determines that delivery has occurred and consequently the law also recognizes its effects, irrespective of whether there has been a change in physical possession or not.

(p. 336) II.  Legal Delivery

29.08  As alluded to in Chapter 31, the interplay of the notion of non-conformity and the notion of delivery requires particular attention. The basic question is whether non-conforming goods can ever be delivered in a manner which satisfies the delivery obligation. In many jurisdictions the dogmatic background to this issue is the traditional distinction of aliud and peius.7 The term aliud describes goods which are different in nature from those owed under the contract. The term peius describes goods which by their nature correspond to those under the contract but are in some way defective. An obvious example for an aliud would be the presentation of a cow when the contract calls for a car. The corresponding example of peius would be the presentation of a car which lacks a functioning engine. Naturally, drawing the line in an abstract way is often almost impossible. For example, whether or not a forklift with an automatic transmission will be found to be a non-conforming manual forklift or a different thing altogether is unpredictable.8 However, drawing that line is of immense practical significance. Where the goods presented are held to be an aliud, the seller is not considered to have performed its delivery obligation.9 Consequently, the rights and remedies—and in particular the limitation periods—for non-delivery apply rather than those for non-conformity.10 At best, the presentation of goods of a different nature than called for by the contract might be regarded as an offer to modify the current contract or as an offer for a new contract altogether.11

29.09  However, even where goods are delivered that correspond to the nature of the goods required by the contract, there may still be doubts as to compliance with the delivery obligation. Where the non-conformity is so grave, although the goods may be of the same nature, some legal systems treat these instances as functionally analogous to the delivery of goods of a different nature.12 Where this occurs, the same legal consequences arise as in the case of the delivery of an aliud.13

29.10  Following the traditional common law approach,14 the modern approach both at the international level15 as well as recently reformed or newly codified civil law domestic systems16 has abandoned the dichotomy of aliud and peius. Under this approach, any deviation of the goods presented will not affect the performance of the delivery obligation but rather be treated as an issue of non-conformity.

(p. 337) III.  Effects

29.11  The great attention that is paid to the notion of delivery finds its motivation in the various effects that stem from the act of delivering. Broadly speaking these can be categorized into two groups: internal and external effects.

1.  Internal Effects

29.12  The time at which the delivery obligation is to be performed frequently also represents the time at which other significant consequences under the contract occur. These effects can be described as internal as they relate to the relationship of the buyer and seller.

29.13  In some systems the passing of risk is tied to the performance of the delivery obligation.17 This principle is also reflected by the ICC INCOTERMS®, all of which link the passing of risk to the time of delivery. Furthermore, the performance of the delivery obligation may automatically trigger the performance of the seller’s obligation to transfer title. Whether this is the case mainly depends on the system of transfer of title which a particular jurisdiction follows.18

29.14  The time at which delivery occurs also has significant consequences for issues related to non-conformity. In some jurisdictions the time of delivery is the time at which non-conformity is assessed.19 In other circumstances, the time of delivery can also determine until when the seller can be required to cure any non-conformity.20 Finally, in relation to non-conformity, the date of delivery may also be the date at which examination and notification periods21 as well as limitation periods22 commence.

29.15  In some legal systems the date of delivery is considered to be the appropriate date at which a market price for goods should be determined where such a price is necessary for the calculation of damages.23

2.  External Effects

29.16  Distinct from the consequences the obligation of delivery may have as between the contracting parties, there may also be effects on other questions relating to the sales contract. These questions predominantly concern issues which can be broadly described as external.

29.17  The first external effect the delivery obligation may have concerns the question of which court has jurisdiction over any disputes in relation to the contract or its performance. This effect has been the subject of long-standing debates on the interplay of procedural and substantive law.24 In many instances the applicable procedural law—be it domestic, regional, or international—relies on the place of performance for jurisdiction. In determining the place of performance, procedural laws have traditionally looked to the characteristic performance of a contract—that is, the place of delivery in situations involving sales contracts.

29.18  While the place of delivery is typically capable of being determined from the contract, circumstances can nevertheless arise where this matter is not straightforward. In the first instance there (p. 338) is some debate as to whether delivery should be interpreted as physical delivery or legal delivery.25 This particular issue arises where the seller is contractually obliged to hand over the goods to an independent carrier. In the second instance, it may be difficult to determine the place of delivery for the purposes of jurisdiction where the contract is silent and an implicit agreement cannot be construed. These issues are, for example, a matter of debate in the context of Article 5(1)(b), sentence 1 Brussels I Regulation.26

29.19  At times it has been advocated that the designation of the place of delivery should effectively be understood as a forum selection clause.27 With regard to the CISG it has been argued that the Convention can be understood to contain a general principle to the effect that the place of delivery also creates jurisdiction for courts at that place to the exclusion of others.28 The majority view, however, rejects this approach on the grounds that the CISG was never intended to address jurisdictional matters.29

29.20  Delivery may have a second external effect, in that it may be pivotal to the determination of the law applicable to the contract pursuant to a conflict-of-laws rules analysis. Given the importance of the delivery obligation, it is conceivable that adjudicators may find that a designation of a place of delivery also amounts to an implicit choice of law by the parties.30 However, at the international level, a contractual designation of the place of delivery in a non-contracting state should not be construed as an exclusion of the CISG, where it is otherwise applicable. In all circumstances, it is more likely that in the context of conflict-of-laws rules the designation of a place of delivery will be considered a factor when determining the closest connection or place of performance.31

(p. 339) IV.  Impact of Breach of Other Obligations

29.21  The existence of possible additional obligations to those of delivery and transfer of title has been discussed in Chapter 27. Where there is a breach of these additional obligations a number of legal systems will, in accordance with the so-called gravamen of action test, determine which sets of rules applies to the breach.32 This may result in the breaches of these obligations being dealt with under the sales law regime. Systems favouring a classification of the contract based on the weight of the obligations of the party supplying the goods necessarily apply the sales law regime.33 This latter approach is appropriate at the international level to avoid the application of possibly unforeseeable domestic law.

29.22  Insofar as the breach of additional duties is subject to the sales law regime, the question arises as to whether such breaches amount to non-conformity or non-delivery. This issue is of significance because of the—often substantially—differing legal consequences taken by many legal systems to breaches of non-conformity versus non-delivery. As discussed elsewhere, these include such things as different examination and notice requirements as well as different limitation periods.34 The real issue of course is which remedies are available for the breach of an additional obligation. For example, can a reduction of price be claimed for a missing manual or may the seller be forced to comply with a non-competition obligation by way of specific performance?

29.23  The classification of the breach of additional duties, such as those mentioned in the previous chapter,35 varies amongst legal systems but can reasonably be expected to be influenced by factors such as the nature and relative importance of the particular obligation breached, whether or not there has been any attempted performance of the obligation, or the manner in which the attempted performance was conducted.36

29.24  The breach of an additional obligation may in certain circumstances give the buyer the opportunity to elect between treating the matter as one of non-delivery, rather than one of non-conformity. In common law jurisdictions following the English Sale of Goods Act, this is the case where the seller was obliged to arrange for carriage of the goods and, although doing so, entered into an unreasonable carriage contract. Unreasonableness may be assessed against the nature of the goods and other circumstances of the case.37 Where the goods were lost or damaged in transit (after risk has passed), the buyer is entitled to elect between declining to treat the handing over to the carrier as delivery or seeking damages against the seller.38

(p. 340) B.  Place of Delivery

29.25  It is obvious that the seller cannot perform its obligation to deliver the goods wherever it unilaterally sees fit. Rather, the obligation may only be correctly performed at the relevant place of delivery either to be determined by the parties themselves or by the applicable default rules.

I.  Contractual Agreement

1.  General

29.26  The parties are generally free to choose a place of delivery. The relevance of such choice for jurisdictional matters has been addressed earlier in this chapter.39

2.  Trade Terms

29.27  Typically an agreement by the parties on the place of delivery occurs in conjunction with the agreement on other modalities of performance and is referred to in a shorthand manner by a trade term. Trade terms have developed both domestically and internationally. It is therefore particularly important that regard is had to the particular trade term (be it domestic or international) in any given contract. Furthermore, parties usually enjoy the freedom of amending a trade term and as such it is always a question of contract interpretation.

(a)  ICC INCOTERMS®

29.28  At the international level the ICC INCOTERMS® 2010 deal with the place of delivery in each respective A4 clause. For the purposes of this work it is useful to provide a brief summary of their content.

29.29  In the only ‘E’ term (EXW), the seller is obliged to place the goods at the disposal of the buyer at a named place of delivery. If no specific point has been agreed within the named place and if there are several points available, the seller may select the point at the place of delivery which best suits its purpose. As only the minimum obligations of the seller are required, the seller is not supposed to load the goods on any collecting vehicles.

29.30  The ‘F’ terms are divided into three groups whereby the delivery of goods takes place at different points. Under the FCA term delivery occurs where the seller delivers the goods at the contractually named place and time. The term provides further detail as to the specific point in time at which delivery occurs given that there are two potential scenarios concerning loading and unloading. First, where delivery occurs at the seller’s premises, it is completed when the goods are loaded onto the buyer’s means of transport. Secondly, delivery is completed when the goods are placed at the disposal of the carrier or another person nominated by the buyer, not unloaded from the seller’s means of transport. In the FAS clause, the goods must be placed alongside the vessel nominated by the buyer at the loading place named by the buyer at the named port of shipment or by procuring the goods so delivered. Under the FOB term, the delivery is complete when the goods are placed on board the buyer’s nominated vessel at the named port of shipment or by procuring the goods so delivered. Both the FAS and FOB term entitle the seller to select a loading point that best suits its purpose within the named port of shipment if none has been indicated by the buyer.

29.31  The ‘C’ terms can be grouped into two categories based on the place of delivery. Under the CFR and CIF terms the delivery of goods takes place on board the vessel in the port of shipment or by procuring the goods so delivered. Under the CPT and CIP terms, the seller must deliver the goods to the carrier nominated by it or, if there are subsequent carriers to the first carrier, for (p. 341) transport to the agreed point at the named place. Thus, the place of delivery is the location at which the goods are handed over to the first carrier.40

29.32  In all ‘D’ terms the place of delivery is the named place of destination. Notably in INCOTERMS® 2010 the ‘D’ terms have changed and now comprise DAT, DAP, and DDP. The former INCOTERMS 2000 DAF, DES, DEQ, and DDU have been superseded. Furthermore, in the INCOTERMS 2010 all ‘D’ terms are suitable for all modes of transport. This was different in INCOTERMS 2000 and consequently differences arose with respect to delivery in this regard. For example, the DAF term referred to the frontier of the destination, whereas the DES term referred to a named port of destination. The—still valid—general rule followed by all but one of the ‘D’ terms is that the goods need not be unloaded. The current exception is the DAT term which states that the goods must placed at the disposal of the buyer at the named terminal unloaded.41

(b)  Domestic Trade Terms

29.33  The precise meaning of particular shorthand trade terms may vary from jurisdiction to jurisdiction quite independently of any meaning or definition given to them by the parties. While the place of delivery may be easily obtained where the parties have specifically chosen the ICC INCOTERMS®, the mere reference in a contract to a term such as FOB might give rise to applicable default rule interpretation of that term. In short, it must be determined whether the reference to a trade term is a reference to the ICC INCOTERMS® or instead a reference to a domestic law definition. Where the CISG is applicable, it is accepted as an international trade usage under Article 9(2) CISG that the reference to a trade term is to be understood as a reference to the ICC INCOTERMS®.42

29.34  The differences found amongst the various domestic trade terms specifically in relation to the place of delivery appear to mostly concern the exact place at which the seller must put the goods when delivering them. As noted above, in the ICC INCOTERM® FOB, the place of delivery is on board ship. This means that the seller bears the risk of loading. This understanding of the FOB term is shared by the vast majority of legal systems.43

29.35  A specific situation exists in the USA. The current version of § 2-319 UCC assumes that the FOB term is not free-standing but necessarily linked to either a place of shipment, a place of destination, or a vessel. Furthermore, it is not restricted to sea transport.44 In the first scenario where the term is FOB (place of shipment) it would effectively equate with the ICC INCOTERM® FCA.45 Accordingly, the place of delivery may well be understood as not yet loaded onto the means of transport. In the second scenario where the term is FOB (place of destination) this would effectively equate with ICC INCOTERM® DDP.46 Accordingly, the place of delivery may well be understood to be the place of destination with the goods not unloaded. In the third scenario where the term is FOB (name of vessel) this equates with the common international understanding of the ICC INCOTERM® FOB.47 Where the term FOB is used without any further classifications it is open to an adjudicator to use means of (p. 342) contract interpretation to make the clause work, such as construing the reference as being a reference to the generally accepted ICC INCOTERM FOB, or to simply construe it as a shipment contract effectively rendering it an FCA term with the default rules48 applicable. Not surprisingly the revision of the UCC recommended the deletion of those sections defining trade terms.49 As at the time of writing no state had adopted these amendments.

II.  Default System

1.  Domestic Rules

29.36  With regard to the place of delivery, the default rules established by domestic legal systems as well as at the international level on this question rarely are of relevance in practice as parties usually do not neglect to stipulate a place for delivery. However, if they do, the place of delivery may be determined by having regard to the circumstances of the case, in particular to the manner in which delivery is to occur, and, for example, whether transportation is required.

29.37  In the majority of civil law systems the default place of delivery is determined by the general provisions with respect to the place of performance of obligations.50 However, in many instances these provisions have further specific elaboration in respect to the sale of goods. Where legal systems have established comprehensive sales legislation—in particular, common law systems, Nordic systems, mixed systems, and uniform sales law—the default place of delivery is specifically defined.

29.38  There appear to be two dominant approaches which frequently coincide. One is that legal systems determine the place of delivery as being at the seller’s place of business, or, if it has none, at its residence.51 The second approach focuses on the location of the goods at the time of contracting.52 (p. 343) With regard to this second approach there typically is an additional requirement—although not always spelt out expressly—that both parties know of the location of the goods at the time of contracting if that location differs from the seller’s place of business.53 Unsurprisingly, the location of the goods at the time of contracting is often the seller’s place of business, and thus both default rules may ultimately point to the same place.

29.39  Many domestic legal systems provide an exception to the general default rule where the contract specifically contemplates carriage of the goods by an independent carrier.54 In these situations delivery occurs with the handing over of the goods to the first carrier.55 In some systems there is a dispute whether employees of the seller may satisfy the carrier requirement.56 Typically, this is denied on the grounds that the goods are still in the sphere of influence of the seller.57 Similar problems may arise where the carrier is a subsidiary company of the seller. The situation is different in many jurisdictions where consumer transactions are involved.58

29.40  The cost for delivery may easily be increased if one party, during performance of the contract, changes its place of business or residence. It may be expected that this party will have to bear the increase in costs caused.59

(p. 344) 2.  Uniform Rules

29.41  The international level displays both similarities and differences to the domestic level. Similarly to the majority of civil law systems, the uniform projects rely on the general place of performance of obligations to determine the place of delivery. The PICC and the PECL do not contain specific sales provisions and thus naturally apply the general provisions on the place of performance of obligations.60 Under these sets of rules the primary reference point for performance of a non-monetary obligation is the place of the debtor which accordingly with regard to the delivery obligation is the place of business of the seller.61

29.42  The DCFR contains a specific chapter on sales contracts. The system in which questions of delivery are organized is difficult to understand. In the first provision on delivery it is stated that the seller fulfils its obligation to deliver by handing over the goods to the first carrier, if the contract involves carriage.62 This situation seems to have been made part of the definition of the delivery obligation itself. The specific provision on the place of delivery firstly makes express reference to the general provision on the place of performance of obligations which in case of non-monetary obligations is that of the debtor and thus the seller.63 However, contracts involving carriage of goods are nevertheless addressed again, but this time only with regard to consumers, stating that handing over the goods to the first carrier is not sufficient to effect delivery to consumers.64 In a separate subsequent provision, the DCFR specifically addresses the modalities of how the seller must arrange for carriage if it is obliged to under the contract.65 However, the notes appear to implicitly indicate that this provision is also intended to be read as stating that delivery occurs with the handing over to the first carrier.66

29.43  The CISG and the OHADA AUDCG by contrast make primary reference to contracts involving the carriage of goods.67 This is justified seeing that in the international sale of goods this will be the typical scenario. Should carriage not be involved, the default rules in relation to the place of delivery mirror the rules most commonly found in domestic systems. If both parties are aware of the location of the goods or of the location at which they are manufactured at the time of the conclusion of the contract, then this will be the place of delivery.68 Otherwise, the ultimate default is the seller’s place of business.69

29.44  In the same way as under domestic systems, a party who changes its place of business will also be held liable at the international level for the increase in costs caused by that change.70

C.  Time of Delivery

29.45  Delivery must not only be effected at the correct place but also at the correct time. Whether late delivery entitles the buyer to avoidance of the contract is in almost all legal systems a matter of contract interpretation.71 Parties may make time ‘of the essence’72—to use the common law (p. 345) expression—by, for example, an express statement in the contract to this effect or by use of a trade term which deems time to be of the essence.73

I.  Contract

29.46  As with almost all matters, it is primarily upon the parties to stipulate a delivery schedule in their contract. Where they have done this, it is possible to envisage two scenarios. First, the parties can fix one specific day on which delivery is to be effected and, secondly, the parties can fix a period of time within which delivery is to be effected. The difference between both scenarios is that while the seller in the first case must not deliver the goods sooner or later than the date fixed,74 in the second scenario the seller is allowed to deliver at any time after the beginning of the delivery period and is only late in delivery after the passing of that time period.75 Conversely, the buyer may not demand performance at the beginning of the time period fixed for delivery, but only after it has run out.76

29.47  Where the parties have contractually agreed on the time for delivery it is of course possible for them to renegotiate that time. This is to be done in accordance with the general rules on the modification of a concluded contract discussed earlier.77 For legal systems maintaining the doctrine of consideration, this means that the change of the time for delivery also requires consideration. This may not be difficult to establish as it may simply be the exchange of mutual promises to accept a later delivery date.78 Should consideration be lacking, the seller may nevertheless be able to rely on doctrines such as waiver or estoppel to preclude the buyer’s ability to refuse to take delivery.

1.  Specific Date

29.48  The archetypical situation of an agreement as to the time for delivery is the reference to a specific calendar date. However, in many circumstances where a specific date can be determined by an objective mechanism, such reference to a calendar date may not be necessary and even inappropriate for the parties. For example, in a sale by sample, this scenario may also occur where delivery is required on the twenty-first day after approval of the sample.79 In other situations the (p. 346) contract may provide for delivery on ‘the day following call-off’.80 Likewise, a specific date is given, where delivery is to occur ‘today’,81 ‘at this time next week’, etc.

29.49  It is, of course, conceivable that the agreed time for delivery not only mentions the calendar date but also the specific hour of that date at which delivery must occur. This is likely to be of particular significance where the goods are to be transported by a carrier with strict time periods in which goods can be loaded and unloaded.82

2.  Period

29.50  Frequently it may not be possible for the parties to determine in advance a specific date upon which delivery is to occur. For example, it may only be possible to estimate the time at which the manufacturing process, particularly of a complex good, will be completed. Under these circumstances, parties agree to delivery within a specified period rather than on a specific date. This allows them to retain flexibility in their general business organization by delivering at any time during this period. But furthermore, such periods also enable the seller to react to problems arising from suppliers, the availability of raw materials on the market, and other such unexpected issues.

29.51  There are countless ways for the parties to describe periods of time. The examples listed in the following are typically relevant also when it comes to the computation of the exact period. Phrases often used include: ‘between 1st and 15th of July’, ‘calendar week No 40’, ‘not later than 15th of July’, ‘by the middle of next month’, ‘in three working days’, ‘in four weeks’, ‘in half of a year’, ‘in two and a half months’, ‘by the end of winter’, ‘immediately’, ‘as soon as possible’, ‘urgent’, and ‘within a reasonable period of time’.

29.52  Each of the phrasings of time periods for delivery presented in the previous paragraph may present uncertainties in particular constellations. This pertains to the broader question of how such period is to be calculated. For example, does ‘immediately’ or ‘as soon as possible’ mean sooner than ‘within a reasonable period of time’?83 In connection with the more precise stipulations, the difficulties which may arise can include the exact beginning or end of a time period and the question of whether it includes weekends, holidays, or official holidays. Many legal systems, both domestic and international, have specific—at times extensive—rules on these questions.84 This may in turn require a conflict-of-law analysis to determine which of these domestic rules are applicable in any particular case. A further additional complication concerning international trade is differing time zones and the potential for a simple time reference (that is one without reference to a time zone) to be capable of meaning multiple times in fact.

29.53  Despite the variety of rules which exist in the different legal systems, some generally consistent principles—which naturally are all subsidiary to contract interpretation—can be discerned. Typically, the day of contract conclusion is not included within the calculation of the time period.85 This is most relevant to periods which appear to begin immediately such as ‘by the middle of next month’, ‘in three working days’, ‘in four weeks’, ‘in half of a year’, ‘in two and a (p. 347) half months’. Within that rule, legal systems typically consider time periods to begin with the start of the day at 00.00 and to end at midnight on the last day of the period.86

29.54  In the vast majority of legal systems—both domestic and international—official holidays and non-working days are included in the period stipulated by the parties.87 However, where the period ends on an official holiday or non-working day, the period is usually extended to the next working day.88 Naturally, the dates of official holidays vary from country to country and sometimes even within different regions of the same country. The same is true of non-working days. Even the definition of the working week in individual countries depends on religious and other cultural factors. In Western countries, the working week is traditionally understood to be from Monday to Friday. In many Middle Eastern countries the working week runs from Saturday to Wednesday89 or Thursday,90 or Sunday to Thursday.91 In India the working week runs from Monday to Saturday afternoon.

29.55  Although the fixing of a time period for delivery would seem to suggest that the seller is allowed to deliver at any time during that period, certain restrictions apply. To let a seller force delivery upon the buyer outside of the usual business hours would seem unreasonable. In many legal systems, some of which have explicit provisions to this effect, the seller only can deliver during usual business hours.92 In other legal systems the requirement is simply expressed as a ‘reasonable hour’; what is reasonable is a question of fact.93

29.56  The determination of the relevant time zone is crucial where the contract is to be performed across different time zones.94 This is particularly an issue for consideration where the transaction is an international one and thus the parties may not be familiar with the time differences. However, it may also be relevant in domestic transactions where a particular country has multiple time zones.95 Domestic systems do not appear to have devoted particular attention to this issue. As far as statements regarding the time zone can be found, they typically pertain to the understanding of legislation, rather than contract interpretation.96 At the international level, the PICC have established a specific rule to the effect that, unless the circumstances indicate otherwise, it is the time zone at the place of business of the party who has set the time that is relevant.97 This is based on the presumption that the party setting the time will naturally intend the reference to be a reference to its own time.98 It may, however, be more reasonable when interpreting contracts to understand the reference to time as being a reference to the time at the place where delivery is to be performed.

(p. 348) 3.  Usages and Circumstances

29.57  Although the parties may not have expressly stipulated a specific date or a period of time for delivery, the contract and its surrounding circumstances may nevertheless allow an adjudicator to find that the parties had implicitly agreed to the time for delivery. Circumstances which will be particularly relevant relate to the physical characteristics of the goods, especially, where they have to be manufactured, grown harvested etc.99 Furthermore, it is obvious that if there is an established practice or usage which applies to the contract, the time for delivery may be determined in accordance with that practice or usage.

II.  Default Rules

29.58  Where the parties have not made provision for the time for delivery in their contract, the default rules must be consulted. Legal systems vary considerably in this regard. As a broad categorization, legal systems either describe the time for delivery in open terms or they establish concrete time periods. Within the first group of legal systems which includes international sets of rules, approaches differ as to the stringency of the time permitted. In the second group of legal systems differences in the length of the periods established can be noted. In a number of legal systems the default time period for delivery only begins to run following a delivery request by the buyer for delivery.100 Finally, there may be distinctions made in regard to the identity of the parties—that is, whether either is considered to be a consumer or otherwise not a merchant.

29.59  The strictest approach to the time for delivery is taken by legal systems which require delivery to occur ‘immediately’,101 within 24 hours,102 48 hours,103 ten days,104 etc following the conclusion of the contract. Phrases such as ‘as soon as possible’105 indicate a similar stringency. A more lenient approach is taken by those systems that require delivery to be made within a ‘reasonable period of time’. This approach is found in common law jurisdictions,106 Eastern European and (p. 349) Central Asian systems,107 some Eastern Asian legal systems,108 most of the Nordic systems,109 as well as at the international level.110 The question of what is a reasonable time is dependent on the individual circumstances of the case. In common law systems this is treated as a question of fact.111 In determining the period for delivery, the interests of both parties must be balanced.112 Where unusual circumstances exist on the side of the seller, these should be made known to the buyer when contracting and if unknown to the buyer may not necessarily be factored into the determination of a reasonable time.113 Finally, the nature of the contract must be considered, for example whether the goods are seasonal,114 generic, held in stock,115 to be manufactured,116 or readily available on the market.117

29.60  In the field of consumer transactions, the EC Distance Selling Directive established a maximum delivery period of 30 days for the seller which has been implemented in all EU legal systems.118

29.61  A rather exceptional default rule found in some civil codes and thus applying also to non-merchant sellers provides that where there is no agreement on the time for delivery, the buyer may unilaterally determine a date for delivery.119

D.  Notification Duties

29.62  Although typically time and place aspects of the delivery obligation are straightforward, the precise details of these aspects may be deferred by the parties and thus require notification. Typical scenarios in which such notification is required include circumstances where the seller needs to inform the buyer that goods are now identified and available for collection, or where the buyer needs to inform the seller as to the name of the vessel upon which the goods are to be delivered. Similar circumstances can be imagined with respect to the time of delivery. The default rules on the time for delivery requiring delivery ‘immediately’ or within a ‘reasonable time’ are not sufficiently precise to render all notifications unnecessary.

29.63  In all of these circumstances the parties themselves may have established certain notification requirements to facilitate communication in the performance procedure. Frequently, this will have been done by use of a trade term, in particular the ICC INCOTERMS all of which (p. 350) contain a notice requirement relating to certain aspects of the specific delivery obligation described in the respective term. In other instances, notification duties in these circumstances may arise from the duty to act in accordance with the general principle of good faith.

29.64  Although it appears particularly rare to find an express notification duty on the seller with respect to the identification of goods, the existence of such an obligation is a logical necessity due to the relationship between the identification of goods and both the passing of risk and the transfer of title.120 This particularly concerns circumstances where a seller has handed over unascertained goods to a carrier which may satisfy the delivery obligation but not cause risk to pass to the buyer.121

29.65  Notification duties may arise in relation to the quantity of the goods which must be delivered. For example, where the seller has the option to deliver either in instalments or in one entirety, it would usually be expected to notify the buyer of its election prior to the time of delivery.122 It may nevertheless be possible that the act of delivering either an instalment or the entirety is in itself notice.123

29.66  In circumstances where the goods are to be collected by the buyer as part of the performance of the seller’s delivery obligation, the seller must inform the buyer when and where the goods will be placed at its disposal. The ICC INCOTERMS® reflect this in both the EXW term and all of the ‘D’ terms. Under the ‘D’ terms, the seller is obliged to provide any details which the buyer requires in order to take measures normally necessary to collect the goods.124

29.67  Where there is delivery to a carrier and thus the buyer is not directly involved in the performance of the delivery obligation, the seller must give notice to the buyer that delivery has in fact occurred. As with the ‘D’ terms, any details necessary to allow the buyer to take measures to collect the goods must also be provided. The ICC INCOTERMS® contain this notification duty of the seller in the ‘F’ terms125 and the ‘C’ terms.126

29.68  Conversely, depending on the individual term used the buyer has a duty to inform the seller of such things as mode of transport, date for delivery, identity of carrier, place of delivery, vessel, loading point, loading period, or port of destination.127 These issues are particularly visible where the buyer is supposed to call off the goods under the contract.

Footnotes:

1  See paras 28.11 et seq above.

2  See for this term Sanders v Maclean (1883) 11 QBD 327 (CA). See also for Ind Mulla, Sales, p 293; Nzl Hawes, p 14.2; Zaf Havenga et al, p 160.

3  See on documents in general paras 30.03 et seq. For documents in the context of avoidance of contract see paras 47.167 et seq.

4  OHADA Art 250 AUDCG; Common Law (UK) Benjamin’s Sale of Goods, para 8-008; Ibero-America Muñoz, p 286; Shari’a Al Shamsy (Are) p 442; Arg Arts 2385, 2388 CC, Arts 461, 463(2)–(4) Com C; Aus The Laws of Australia/Sutton, para 8.4.127; Bol Arts 850, 864 Com C; Bra Arts 529–32 CC: the delivery of the documents is understood to be the delivery of the goods; Che Art 925(1) CC; Chl Art 149(1), (2) Com C; Col Art 923(1) Com C; Cri Art 466(b), (c), (f) Com C; Ecu Art 194(2), (3) Com C; Egy Abdel Rahman, pp 230–1, Cass Civ, challenge no 107, session dated 30 January 1947, CCRC, JY 15; Esp Supreme Tribunal, 22 November 2006, Id Cendoj: 28079110012006101175: applying Esp Art 339 Com C upheld that the buyer was bound to pay the price from the time the goods were at his disposal; Gtm Art 695, para 1 Com C; Hrv Art 467 CO; Ind Mulla, Sales, pp 296ff; Kwt Omran, pp 131–2; Lby Abdel Rahman, pp 230–1; Mar Safi, Aqd Al Bayaa, p 305; Mex Art 2284, para 3 CC, Art 378 Com C, Vásquez del Mercado, p 203; Nic Art 355 Com C; Tun Al Ahmadi, pp 432–3; Tur Art 980 CC; Aral, p 86, Yavuz, p 72; Ury Art 529(2), (3), (4) Com C; Ven Art 1.489 CC, Art 149(2), (3) Com C. In Deu handing over of documents only amounts to a delivery if the parties agreed so, Staudinger/Beckmann, § 433, para 74, MünchKommBGB/Westermann, § 433, para 53.

5  See para 28.22.

6  See Arabic/Middle East (Egy, Irq, Lbn, Syr); Common Law (UK) Benjamin’s Sale of Goods, para 8-011; Shari’a Basha, p 248, Al Shamsy (Are) pp 442–3; Are Art 527 CC; Aus Gamer’s Motor Centre (Newcastle) Pty Ltd v Natwest Wholesale Australia Pty Ltd (1987) 163 CLR 236 (HC); Bhr Art 399 CC; Che Art 924(1) CC; Deu MünchKommBGB/Westermann, § 433, para 52, Staudinger/Beckmann, § 433, para 73 (agreement necessary which amounts to a derogation of the requirement of delivery), according to Staudinger/Beckmann, § 433, para 72 the seller is not even obliged to deliver the goods if the buyer already has possession; Dza Art 367 CC; Egy Art 435(2) CC; Abdel Rahman, p 231; Irq Art 538 CC; Jor Art 496 CC; Kwt Art 472 CC; Omran, p 133; Lbn Art 402 CO; Lby Art 424(2) CC; Abdel Rahman, p 231; Mar Art 500 CO, Safi, Aqd Al Bayaa, p 303; Mrt Art 511 CO; Qat Art 432 CC; Sau Ashoush, p 174; Syr Art 403(2) CC; Tun Art 593 CO; Tur Art 979(1) CC, Aral, p 86, Yavuz, p 70; Yem Art 532 CC.

7  See on this issue paras 31.15 et seq.

8  In the case decided, Che BGer, 5 December 1995, BGE 121 III 453, the Swiss Federal Supreme Court held that the manual forklift was of a different nature.

9  See para 31.16.

11  See for Common Law (UK) Benjamin’s Sale of Goods, para 12-066; Deu Schlechtriem, SR BT, para 36.

13  See eg Arabic/Middle East (Egy, Irq, Lbn, Syr) Basha, pp 217–18; Shari’a (Are) Al Shamsy, p 418; also see Bhr Bahraini COC, 16 February 1992, challenge no 61, TO, year 3, 1992, p 19; Prt Art 913, para 2 CC.

14  See for Common Law (UK) Benjamin’s Sale of Goods, para 12-068, noting though that it is conceivable that the delivery of totally non-conforming goods may be considered a new offer.

15  See for Art 35 CISG, Schlechtriem/Schwenzer/Schwenzer, Art 35, paras 4, 10; OHADA Art 255 AUDCG; Art IV.A.-2:301 DCFR, Official Comment E, Article 33(1)(b) ULIS in contrast linked the fulfilment of the delivery obligation to the distinction of aliud and peius.

16  Eastern Europe/Central Asia Lapiashvili, p 197, fn 1066; Ibero-America Muñoz, p 302; Cze Art 412 Com C; Deu § 434(3) CC according to which the delivery of an aliud which is meant to fulfil the seller’s contractual obligation constitutes a non-conformity and not a non-delivery, see Staudinger/Beckmann, § 434, paras 114 et seq; Geo Art 488 CC; Ltu Art 6.333 CC; Tkm Art 512 CC.

17  See on this issue in greater detail para 38.38.

18  See on this issue in greater detail paras 39.37 et seq.

19  See on this issue in greater detail paras 31.169 et seq.

21  See on this issue in greater detail para 34.44 (beginning of examination period) and paras 34.70 (beginning of notification period).

22  See on this issue in greater detail para 51.29.

23  See on this issue in greater detail paras 44.240 et seq.

25  Advocating physical delivery, Schlechtriem/Schwenzer/Widmer, Art 31, para 96; Advocating legal delivery, Fawcett/Harris/Bridge, para 3.225.

26  Council Regulation (EC) no 44/2001 of 26 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, Official Journal L 012, 16/01/2001, pp 0001–23. For an account of the opinions voiced see Schlechtriem/Schwenzer/Widmer, Art 31, paras 93–9; Fawcett/Harris/Bridge, paras 3.142–3.235.

27  See Shari’a Al Majalla, Arts 341, 342; Afg Art 1081 CC; Are Art 530(1) CC; Aut § 29 CCP (only if both parties are merchants); Bhr Art 401 CC; Deu § 29 CCP (only if both parties are merchants); Dza Art 282 CC; Egy Art 347 CC; Irq Art 541(2) CC; Jor Art 499(1) CC; Kwt Arts 412, 475 CC; Lbn Art 405 CO; Lby Art 336 CC; Mar Art 502 CO; Qat Art 376 CC; Syr Art 345 CC; Tun Art 595 CO; Tur Pekcanıtez/Atalay/Özekes, p 12; Yem Art 416 CC.

30  EU (Deu) MünchKommBGB/Martiny, Art 3 Rom I Regulation, para 65 according to which a common place of performance of both parties can amount to a tacit choice of the law of the place of performance; Afg Art 27 CC; Are Art 19(1) CC, FHC, 17 May 2005, challenge no 364, JY 24, UAEUP, MJ, second ed, year 27, 2005; FHC, 16 November 1993, challenge no 84, JY 15, TO 15, p 1411; Egy Art 19(1) CC, Art 39(1) AL; Irn Art 968 CC, Art 27(1) AL; Irq Art 25(1) CC; Jor Art 20(1) CC, Art 36(a) AL; Kwt Art 59 of Law no 5 of 1961 regulating the legal relationships with a foreign element; Lby Art 19(1) CC; Qat Art 27 CC; Syr Art 20(1) CC; Yem Art 29 CC. Also see Che: even though Swiss law allows for the possibility of an implicit choice of law, the place of delivery will hardly ever be a relevant factor in determining whether or not such an agreement has been reached between the parties, Art 116(1) of the Private International Law Act, BaslerKommIPRG/Amstutz/Vogt/Wang, Art 116, para 42; similar Tur Art 24(4) Private International and Procedural Law; Nomer/Şanlı, p 321.

31  EU (Deu) MünchKommBGB/Martiny, Art 4 Rom I Regulation, para 248 according to which the place of delivery deviating from the seat of the seller might be an indication for the closest connection in terms of Art 4(3) Rom I but is not sufficient in itself to establish a connection overriding the general rule of Art 4(1)(a) Rom I pointing at the seat of the seller; Afg Art 27 CC; Are Art 19(1) CC; FHC, 17 May 2005, challenge no 364, JY 24, UAEUP, MJ, second ed, year 27, 2005, FHC, 16 November 1993, challenge no 84, JY 15, TO 15, p 1411; Dza Art 18 CC; Egy Art 19(1) CC, Art 39(1) AL, Cass Civ, 8 February 1996, CCRC, JY 59, no 2317; Cass Civ, 6 February 1995, CCRC, JY 58, no 986; Irn Art 968 CC, Art 27(1) AL; Irq Art 25(1) CC; Jor Art 20(1) CC, Art 36(a) AL; Kwt Art 59 of Law no 5 of 1961 regulating the legal relationships with a foreign element; Lby Art 19(1) CC; Qat Art 27 CC; Sau Salama, Mofawadat Al Aqud Al Dawlia, pp 162–3; Syr Art 20(1) CC; Tun Art 62 Private International Law 1998; Yem Art 29 CC. Also see Che Art 117(1) PILS; Tur Art 24(4) Private International and Procedural Law; Tekinalp, Gülören, p 351; Nomer/Şanlı, p 321.

32  See on this issue in greater detail paras 8.43 et seq.

33  See on this issue in greater detail paras 8.33 et seq.

34  See in more detail paras 31.21 et seq.

35  See for examples paras 28.34 et seq.

36  See eg Afg Art 1077 CC; Are Art 517 CC; Bhr Arts 394, 395 CC; Che cf BaslerKommOR/Wiegand, Art 97, paras 32 et seq; Egy Art 432 CC; Irq Art 537 CC; Jor Art 490 CC; Kwt Arts 467, 468 CC; Lbn Art 418 CO; Lby Art 421 CC; Mar Art 516 CO; Qat Art 434 CC; Syr Art 400 CC; Tun Art 610 CO; Tur Serozan, p 117.

37  See eg Aus Plaimar Ltd v Waters Trading Co Ltd (1945) 72 CLR 304 (HC).

38  Aus (Vic) s 39(2) SGA; Can (BC) s 36(2), (3) SGA; Eng s 32(2) SGA; Hkg s 34(2) SGO; Ind s 39(2) SGA; Irl s 32(2) SGA; Mys s 39(2) SGA; Nzl s 34(2) SGA; Sco s 32(2) SGA; Sgp s 32(2) SGA; Wal s 32(2) SGA; Uga s 32(3) SGA.

39  See para 29.17.

40  See I<caps>ncoterms</caps><caps>®</caps>, ICC Rules on the Use of Domestic and International Trade Terms, 2010, pp 33, 41.

41  See ibid, p 53.

43  See Common law (UK) Benajmin’s Sale of Goods, para 18-002; Are Art 133 Com C; Bhr Art 117 Com C; Bol Arts 857, 862 Com C; Deu MünchKommBGB/Krüger, § 269, para 17; Kwt Art 151 Com C; Omn Art 146 Com C; Qat Art 155 Com C; Tur Aral, p 89; Yem Art 121(1) Com C. For Cri, Gtm, and Slv the place of delivery in CIF and CyF terms is not express but the same place as FOB could be implied in an harmonic interpretation of their provisions; see Cri Arts 475, 473 Com C; Gtm Arts 697, 702, 704 Com C; Slv Arts 1030, 1034, 1035 Com C.

44  USA White/Summers, para 6-2.

45  USA § 2-319(1)(a) UCC; Gabriel, p 305; Spanogle, 31 Int Law (1997), 116.

46  USA § 2-319(1)(b) UCC.

47  USA § 2-319(1)(c) UCC.

48  USA §§ 2-503, 2-504, 2-509 UCC.

49  USA § 2-319 UCC (Revised) the legislative note states that the sections dealing with trade symbols have been eliminated ‘because they are inconsistent with modern commercial practices’.

50  Eastern Europe/Central Asia Lapiashvili, p 193; Ibero-America Muñoz, p 289 noting some jurisdictions refer to the place for the payment of obligations in general but that doctrine agrees that the rule applies to determine the place of delivery of the goods; Shari’a Al Majalla, Arts 341, 342; Afg Art 1081 CC; Are Art 530(1) CC; Arg 747 part 2 CC; Aut § 905 CC; OGH, 1 July 1982, 7Ob534/82; Bhr Art 401 CC; Che Art 74 CO, BaslerKommOR/Koller, Art 184, paras 184 et seq; Chl Art 1588 CC; Col Art 1646 CC; Deu § 269 CC, Staudinger/Beckmann, § 433, para 72; Dza Art 282 CC; Ecu Art 1631 CC; Egy Art 347 CC; Irq Art 541(2) CC; Jor Art 499(1) CC; Jpn Art 484 CC; Khm Art 445 CC; Kor Art 467 CC; Kwt Arts 412, 475 CC; Lbn Art 405 CO; Lby Art 336 CC; Mar Art 502 CO; Mng Art 207 CC; Per Art 1553 CC; Qat Art 376 CC; Slv Art 1458 CC; Syr Art 345 CC; Tha Art 324 CCC; Tun Art 595 CO; Tur Art 89 CO, Aral, p 87, Rumpf, § 28, paras 19 et seq, Yavuz, p 72; Twn Art 314 CC; Vnm Art 284 CC; Yem Art 416 CC.

51  See for Arm Art 355 CC; Aus (Vic) s 36(2) SGA; Aze Art 426 CC; Blr Art 297 CC; Can (BC) s 33(1), (2) SGA; Che Art 74(2) no 3 CO; Deu § 269 CC; Eng s 29(2) SGA; Esp Supreme Tribunal, 13 May 1993, Id Cendoj: 28079110011993101284; Gha s 19 SGA; Hkg s 31(1) SGO; Irl s 29(1) SGA; Kaz Art 281 CC; Ken s 30(1) SGA; Mng Art 207 CC; Mwi s 15(2)(c) SGA; Nga s 29(1) SGA; Nzl s 31(2) SGA; Rus Art 316 CC; Sco s 29(2) SGA; Sgp s 29(2) SGA; Tjk Art 339 CC; Tkm Art 397 CC; Tur Art 89(2) no 2 CO, Aral, p 87, Rumpf, § 28, para 21; Tza s 29(1) SGA; Uga s 29(2) SGA; Vnm Art 284 CC; Wal s 29(2) SGA; Zmb s 29(1) SGA; Zwe s 29(1) SGA. But note not Ind or Mys see (Ind) Mulla, Sales, p 307.

52  See for Ibero-America Muñoz, pp 288ff; Middle East/Arabic (Egy, Irq, Lbn, Syr) Basha, pp 254, 449; Shari’a Al Majalla, Art 341; Afg Art 1081 CC; Are Arts 361(1), 530(1) CC; Arg Arts 461, 1410