Reproduced with permission of the author.

Risk, especially passing of risk, plays a central role in the area of international legislation in relation to sales contracts. This is one of the most significant components of a contract of sale between parties, whether international or national. The reason is its peculiar nature, which may contribute to unfair implications and force buyers to pay for commodities, even if they are damaged or lost. The passing of risk has been a central issue for practitioners, judges and lawyers dating back to the Roman period and several ideas have been proposed to resolve it.

Internationally, the situation is different for contracts of sale, but it still creates many unresolved problems because of ongoing changes in the field of modern commerce. Such problems affect multimodal transport, bulk consignments and loss of unascertained goods; therefore, the present study will attempt to suggest solutions.

This study highlights basic rules covering risk passage under the English Sale of Goods Act 1979 (SGA) and the United Nations' Convention on International Contracts of Sales of Goods 1980 (GISG). In the second chapter, this study will provide analyses and compare these two legal systems in relation to the basic rules governing risk passing in contracts of sale. The same chapter will discuss why the U.K. has not implemented the Convention rules and evaluate whether the U.K. should do so. Finally, this chapter evaluates the solution of 'pro rata division' used by the Convention. Chapter Three will focus on another significant contract category, the sale of goods involving carriage. That chapter will examine the notion provided in phrases such as 'carrier' and 'handing over'.

The fourth chapter determines the current legal status of the standard trade terms. I have included an analysis of the approach adopted by the CISG regarding the transfer and appropriateness of risk in CIF or FOB sales. Finally, the fifth chapter will assess proposals for reform.

Chapter I: Introduction

Risk, especially passing of risk, plays a central role in the area of international legislation in relation to sales contracts. This is one of the most significant components of a contract of sale between parties, whether international or national; and is the decisive matter that judges and courts consider in the case of loss or damage of the cargo during the transferral from a seller to a buyer.[1] The reason is its peculiar nature, which may contribute to unfair implications and force buyers to pay for commodities, even if they are damaged or lost. Moreover, the passing of risk in the contract of sale is of such importance due to the potential outcome for either party. This issue has been a central one for practitioners, judges and lawyers dating back to the Roman period [2] and several theories have been expounded to resolve it.[3] It is certainly the case that almost every national legal system has included rules on the passing of risk and similar rules appeared and constituted a part of the Roman law of contract.[4]

It is generally acknowledged that parties to a contract in simple dealings of sale complete their contractual obligations when they conclude the contract. However, in international contracts of sale, the situation is different as a consequence of the large value of the commodities and the complexity of such contracts. Furthermore, in international transactions in which contracting parties are situated in different countries and communications are performed via fax, phone, and e-mail, there is a delay between the time of forming the contract and the time the goods are handed over to the buyer. In this period, there is the opportunity for unfortunate accidents to occur that may have a direct effect on the goods. Because of this, parties to international sales contracts often take into account the issue of passing of risk and thus they select the exact time that the risk passes and the contractual terms to govern this.[5]

However, in the absence of these two factors the pertinent rules in the framework of the United Nations Convention on Contracts for the International Sale of Goods (CISG) [6] can be implemented.[7] However, it should be noted that the Convention only regulates international sales contracts if two criteria are met: if the contracting parties are located in contracting states [8] and if the law of a contracting state's application has been preceded by a private international law.[9]

On the other hand, the English Sale of Goods Act 1979 (SGA), not the Convention rules, might be more applicable because it has had a significant impact on the development of international trade law, particularly where commodities are transported by sea. Its impact is strongly felt today, and many international contracts of sale refer to the SGA for dispute resolution. A great number of international commercial cases are also litigated in the U.K.[10] Therefore, because of its influence and prescribed consequences, parties may write their contracts to handle the passing of risk in accordance with the SGA. But what if there is no arrangement in the existing contract? In such a scenario, national laws or the Convention rules would come into play.[11]

The aim of the present study is to compare the main differences between the CISG and the English Sale of Goods Act 1979 (SGA). Particularly, it focuses on the fundamental rules on the transfer of risk, as well as the rules concerning the two kinds of contracts most commonly used in these international contracts. These are: contracts for sale involving carriage of goods,[12] and contracts for sale of goods in which trade usage is incorporated.[13] Moreover, the study considers whether the CISG or SGA is better for the hypothetical parties. Some proponents believe the CISG is better for buyers, because the contract guarantees buyers' rights in case of risk passing by forcing sellers to hand their goods over to the carrier. Hence, risk does not transfer to the buyer when the contract is completed; risk passes once the seller turns goods over to the carrier. Under the SGA, risk transfers to the buyer as soon as he signs the contract and the commodities ship. Thus, any loss or damage after fulfilling the contract passes to the buyer. English law therefore protects the seller more than the buyer.

Due to the importance of obtaining information about the two systems based on the Convention and the SGA, in Chapter two, this study commences with a summary and general background of both, as well as specifically evaluating the concept of risk as found in Articles 66-70 of the Vienna Convention 1980 and Sections 17 and 20 of the SGA. However, in discussing Articles 66--70 of the CISG, other articles of that law ought to be considered. For example, according to the procedures laid down in Articles 70 and 82(2) of the Vienna Convention, the risk could revert back to the seller and perhaps even pass to the buyer again. But what if the SGA governed that risk? Since the U.K. has not yet ratified the Convention, the situation here is going to be different. One might ask why the U.K. has not adopted the Convention rules yet. The SGA plays a foundational role in other branches of law, particularly maritime law.[14] Therefore, the same chapter will discuss why the U.K. has not implemented the Convention rules and evaluate whether the U.K. should do so.

Chapter three will focus on the other significant categories of contract that have been used more than the ordinary type of sale of goods contract. The most prominent of these is the sale of goods contract involving carriage. The same chapter will examine the notion provided in phrases such as "carrier" and "handing over". Moreover, whilst Section 32 of the SGA is the main section pertaining to this type of sale of goods contract, the Vienna Convention, notably Article 31 and 67, are the references referred to in such contracts, relying on whether the seller's adherence to delivery is indicated in the contract or not. The third chapter will also highlight and analyse the significant aspects of Article 69 of the CISG. By doing an analysis and investigation, it may lead to other possibilities such as if the contract has one or more provisions that request the seller to transfer the sold cargo to a certain location or to a specific carrier.

Chapter four of this study will consider that a comparison between the Vienna Convention 1980 and the SGA in terms of rules and regulations concerning the transfer of risk in contracts for the sale of goods in situation, where trade usages terms are incorporated. More specifically, the chapter four will encompass a total assessment of the CISG's rules and those of International Commercial terms (INCOTERMS); and will focus on contracts, including the most common types of INCOTERMS ones; CIF and FOB codes. In the comparison with the Vienna Convention, these terms are given and provide various rules to different circumstances and situations.[15] Finally, fifth chapter will assess and submit proposals for reform.

Chapter II: General Background and Basic Rules provided by the CISG and the SGA

The Vienna Convention 1980 can be considered one of the most significant developments in relation to the passing of risk in international contracts for the sale of goods, because of the numbers of countries who have implemented it.[16] There are currently 78 contracting states [17] from different regions of the world, with different political and economic regimes. They also comprise representatives of all the main legal systems.[18] However, this has not been reason enough for the UK to ratify the CISG in conjunction with all the other member states. Sally argues that the consequence of not ratifying the CISG is because the Convention has an adverse effect on the UK economy.[19]

The SGA is a worthwhile statute to compare the CISG with because it was the first law that included international trade contracts such as CIF and FOB ones. It is said that the SGA is the father of all other laws relating to the sale of goods.[20] Similarly, INCOTERMS provides the rules for the explanation and interpretation of commercial terms that are mostly used and served to clarify uncertainties in the phrasing, which vary between states.

The following section addresses the history of the CISG and the SGA, including an analysis of why the UK has not adopted the CISG yet.

2) Historical Background

A. The Vienna Convention 1980

The desire for, and the consequences of growing levels of commerce in the twentieth century stimulated countries around the world to harmonize international sales law.[21] The primary reason for establishing an international law of sales was because of a significant rise in international trade.[22] This was followed by pressure to harmonize international trade law which derived from the recognition that harmonization would further enhance the level of international trade.[23] Nations first acknowledged the desire to have a uniform law in the 1920s.[24] By 1930, the International Institute for the Unification of Private Law (UNIDROIT), under the patronage of the League of Nations, started to create an international agreement which could harmonize the law of international sales.[25] This was halted by the Second World War and efforts did not resume until the 1960s when a number of nations held a conference in the Hague in 1964.[26] This conference resulted in two uniform Conventions which were: the Convention relating to a Uniform Law on the Formation of International Contracts for the Sale of Goods (ULF) [27], and the Convention Relating to the Uniform Law on the International Sale of Goods (ULIS).[28] The 1964 Hague Conventions came into force in 1972 [29] but because these Conventions were generally regarded as too far reaching in their area and scale, most countries including the United States refused to ratify them.[30]

Owing to the failure of the 1964 Hague treaties to obtain widespread acceptance, the United Nations Commission on International Trade Law (UNCITRAL) decided to form a Working Group on the International Sale of Goods in 1969 which would be responsible for formulating a new law that was more widely accepted[31] After a process of review where feedback was sought from UN members and international organizations, UNCITRAL accepted the 1978 Draft Convention on Contracts for the International Sale of Goods.[32] The UN held a conference in Vienna in 1980, in order to discuss and adopt a treaty derived from the 1978 draft.[33] This conference was divided into two Committees. The First Committee was charged with preparing Parts I-11, which is Articles 1-88 of the Vienna Convention 1980, and the Second Committee was tasked with Part IV (Articles 89-101) and a Protocol to amend the Convention on the limitation period in the international sale of goods.[34]

On 11 April 1980, with comparatively few modifications to the 1978 draft,[35] the Final Act of the United Nations Conference on Contracts for the International Sale of Goods was adopted by the majority of 62 participating states.[36] On 1 January 1988, in accordance with the terms of Article 99 of the Vienna Convention,[37] the Convention entered into force [38] for eleven nations including the United States.[39] The CISG now regulates international sales in states that constitute over two-thirds of international trade as well as nine of the ten leading industrial countries.[40]

The principal objective of the CISG is to provide a modern and uniform law for the international sale of goods.[41] In analysing the CISG, one should take into account that its provisions have played a supporting role and supplied those terms of the contract that have not been included between parties.[42] Hence, if there is a dispute between a contract's terms and the CISG, the first one will prevail.[43] Alternatively, parties to the contract may opt to disregard the Convention's provisions entirely.[44]

B. English Sale of Goods Act 1979

The SGA succeeded the 1893 Act of the same name.[45] It was based at that time on the notion of the "freedom of contract," which emphasizes the fact that this Act does not prohibit parties to make agreements involving terms and provisions that suit their status, a facet of the old law that appears have been incorporated into its successor.[46]

The intention to codify the law regarding the sale of goods was brought before Lord Herschell in Bank of England v Vagliano Bros.[47] He said that the starting point must be the natural meaning of the statutory text itself, 'uninfluenced by any considerations derived from the previous state of the law',[48] and if the text was unclear, it could be clarified by a discussion of the cases. This means that there was a lack of interpretation in the 1893 Act and this is why it had to be amended.[49] The purpose of the present SGA is to consolidate the existing statutory law: "the general object of such Acts is to present the whole body of statutory law on the subject in a complete form, repealing the former statutes".[50]

Numerous trade cases with respect to international contracts for sale of goods have been brought before the English courts. It is significant that these cases have used the SGA as the applicable law unless the contracting parties have agreed otherwise. It would appear that the reason why many cases have been brought before the English courts is due to the competence and reputation of English law, and because of the high standards of progression accomplished by the English courts. Therefore, it seems that several provisions found in English law are the most sought after by modern commerce.[51] In addition, many countries, including the industrialised nations have been influenced by and have used the SGA before the Vienna Convention was created.[52]

C. Analysis regarding the adoption of The Vienna Convention 1980 by the UK

The Vienna Convention 1980 has been criticised for not providing certainty because it has offered compromise solutions to critical problems and has failed to determine certain fundamental terms and notions. Therefore, the pertinent question in relation to the sale of goods legislation relates to the reasons why the UK has not ratified the CISG. However, it has been argued that the UK has not decided about its own position on the CISG.[53] There are also contributing economic and political causes, as well as the fact that London is well-known as an international centre of dispute resolution and arbitration.[54] Accordingly, adopting the Convention may contribute to a greater number of conflicts or would lead London to lose its position as a forum for arbitration and litigation.[55]

Furthermore, a general concern [56] is that the CISG is not similar to the SGA pertaining to non-conforming goods and documents.[57] For instance, Articles 25 and 49 of the CISG illustrate that a fundamental breach is a precondition for avoidance of contract; while according to the SGA any non-conformity is regarded as a breach of condition.[58] Some English commentators believe that the CISG is not designed to cope with the particularities of commodity trading.[59] The focus of the criticism regularly centres on the limited rights of both parties to avoid the contract for its breach. In line with the critics, the particularities of the trade in goods, for example, the highly fluctuating costs and the often documentary element of the dealings, require that any breach ought to entitle a party to terminate a contract not just "fundamental" breaches, and any right to cure must be excluded.

A further cause given for the unsuitability of the Vienna Convention 1980 is that it does not provide the required certainty as, unlike English law, it lacks adequate detailed rules on "passing of risk" and "property" and a developed body of case law.[60] However, Bridge is right when he says that, "in the long run it is unlikely that the UK will remain outside the community of nearly 70 nations, including most of its major trading partners, that have adopted it."[61]

The UK's isolationism may be a danger to its international status because the Vienna Convention 1980 is still applicable to at least some international conflicts. However, it is uncertain at the time of writing if the UK will adopt the Convention soon.[62] Ultimately, according to Section 64.2 of the 1979 Act, this Act came into force on 1 January 1980.

3) Basic Rule On The Passing Of Risk

A. The Concept of Sale of Goods

The contract of a sale of goods has been clearly identified by Section 2(1) of the SGA: "[A] contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price." However, the fourth, fifth, and sixth terms of the same Section distinguish between "Agreement to sell" and "Sale." Section 2.4 states that the contract is a contract of sale as soon as the property is transferred to the buyer.

The CISG states that a contract of a sale of goods should be "international" in order to be regulated by the CISG provisions. To illustrate this, the contracting parties should be from different countries in order to apply the Convention's rules - these have already been mentioned above in the introduction.

B. The consequences of the passing of risk

There do not appear to be any differences in the consequences of the passing of risk between the CISG and English law.[63] Article 66 of the Convention states that, "[l]oss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller."[64] Risk of loss rules determine whether (i) the seller might still recover the price of the goods, and (ii) whether the buyer ought to take delivery and pay for the goods, in spite of the fact the commodities are partially destroyed or completely damaged.[65] Any costly implications are mitigated by the fact that damage or loss to the goods is often covered by insurance. Nonetheless, it should be borne in mind that occasionally insurance coverage does not exist or is insufficient and does not even cover all measures of the damage and loss to cargo.[66]

C. The concept of risk

The word 'risk' in the area of sales involving carriage of goods appears in both the Vienna Convention 1980 and the SGA to cover incidental physical loss, damage to commodities, or even deterioration.[67] An analysis of the leading commentaries and cases indicates that the rules concerning risk would govern damage or loss caused by one of the following events: stranding or sinking of the ship or other vehicle used for transportations; warehouse fire; damage to goods caused by a third party;[68] emergency unloading; theft;[69] contamination of a spirit with another lower-quality liquid;[70] a negligent act or an omission by the carrier or his workers during transit or loading;[71] improper stowage or rough cargo handling; indecent stowage or deterioration of the goods as a consequence of leaving them outside a cold store;[72] damages to the cargo owing to moisture;[73] loss of weight because of heat; confusion with other goods; damage to the goods owing to delay in arrival without fault;[74] or mixing of two oils carried by a vessel and one of them is lower quality than the other. In addition to these, it has been suggested that risk ought to cover delivery of goods to the wrong person.[75]

Therefore, because the rules regarding the risk in various legal regimes cover each incidental event, this makes the buyer's position less favourable. Nonetheless, there are some other applications to the word risk which are not specific to the area of a contract of sale; for example, political risk, insurance risk and commercial risk.

A controversial issue of great significance is whether or not the ordinary risk rules cover acts of governments or international organizations.[76] A good illustration of this is if the seller is unable to deliver the cargo owing to their confiscation, to export or import bans or to the arrest of the vessel. In view of that, it appears not to be covered by these actions pursuant to the rules on risk.

However, the situation may be different when the goods are destroyed or confiscated in times of war, such as: confiscation of the goods by any hostile act, capture, sinking, arrest, restraint or detainment of a ship or seizure may be deemed as within the scope of the rules on risk.[77] The basic policy that gives this outcome credibility is the fact that the buyer can insure the commodities against war risks, and thus, if the goods are lost or destroyed, the buyer can recover his economic loss because he has rights against the insurer. This problem was experienced by the English courts in the period of the First World War, where a vessel was lost with their cargo to enemy forces, and the purchaser could not recover the losses due to the fact that the insurance did not provide for war risks at that time.[78]

Ultimately, some previous courts decisions have indicated that parts of the damage or loss stipulated in Article 66 of the Vienna Convention 1980 falls within the scope of the passing of risk.[79] Therefore, courts have inserted other points that cannot be considered as damage or loss. An example of this is when the goods are delayed on arrival after being handed over to the carrier.

4) Relevant provisions

Whereas the CISG deals with the passing of risk whether or not carriage is involved in the sale contract, the SGA ties the passing of risk to property, although there are exceptions to this.[80] There are three chief theories that have been adopted concerning the time of passing of risk.[81] Each of these theories is connected to the transfer of the risk of determined commodities with different events in the sales transaction. These theories are divided into three main elements. Firstly, transfer of risk at the time of concluding the contract of sale,[82] secondly, at the passing of property,[83] and finally, the transfer of risk at the time of delivery of goods.[84]

A. Vienna Convention 1980 (CISG)

Article 69 of the CISG is regarded as the general rule overseeing the risk of loss. However, for those cases which do not fall within the scope of Article 67, which provides the sales agreement involves the carriage of goods, or Article 68, which states that when goods are sold in transit, the risk is on the buyer from the moment he takes the goods over, or if he does not do that, he commits a breach of contract owing to not taking delivery of the goods that have been placed at his disposal.[85]

1. Seller's location of business as location of delivery

Article 69(1) makes it clear that when the goods are to be delivered at the seller's place, risk passes at the time the buyer takes over control of the goods or when the goods are placed at his disposal. However, there is a specific issue here, which is that arrangements must be made to 'place the goods at the buyer disposal.'[86] Regrettably, Article 69 of the CISG does not mention this matter.[87] However, it is clear that the drafters had no intention of enforcing a notice duty on the seller. Instead, the standard appears to be merely the buyer's consciousness of the goods which must be ready for collection.[88]

Of course, numerous issues may occur in 'taking over the goods.' For example, if the delivery was to take place on a particular date and the purchaser did not take the goods over on that date, the risk would pass as soon as the commodities were accepted.[89] However, if the goods arrived before the agreed date of delivery and the purchaser acquired them the risk would pass to the buyer from the time of taking over the commodities.[90]

2. Other locations of delivery

Article 69(2) indicates that if delivery is not at the seller's headquarters, risk will transfer to the purchaser once delivery is due and the buyer makes a notice that the commodities are at his disposal. Of course, this rule is most likely to occur for sale of goods in situations where commodities have been left in the hands of a third party, such as 'ex warehouse' or 'Ex Works'.[91] In the case of placing the commodities at the buyer's disposal, it can be assumed that the seller has taken all necessary measures for the purchaser to take possession. This means that the purchaser has a right to acquire the commodities and withdraw them from the control of the third party.[92]

3. Identification of the goods to the contract

According to Article 69(3), commodities are deemed not to be located at the purchaser's location until they are clearly identified in the contract. Therefore, the seller ought to identify the sold commodities as appropriated to the contract.[93] Additionally, he must inform the purchaser of this fact by giving an electronic message or notice.[94] Under analysis, there is no clear requirement in this stipulation for a prior notification from the seller to the buyer about the availability of the commodities. However, it is clearly stated in the same Convention in Article 67(2) that the identification of the commodities mostly requires a communication and notice.

According to the explanation for Article 69 given above, this Article concentrates chiefly on the location where the commodities are to be taken over by the purchaser. Moreover, the Vienna Convention is considered to pass the risk once the commodities are under the control of the purchaser. Therefore, it is understood that the CISG concentrates on actions and facts.

B. English Law

As referred to previously, the fundamental basis of the CISG in relation to passing of risk is as similar as the rules under the SGA. Section 20 of this Act provides that when parties agree and conclude the contract, risk transfers from the seller to the buyer. In other words, the SGA in respect of passing of risk adopts the concept of the parties' intention.[95] That intention can be achieved by five rules stipulated in Article 18 of the SGA. Other than this, Section 20(1) provides that risk transfers to the buyer at the time of passing the property. However, this rule is frequently subject to amendment by the numerous contractual clauses and statutory rules provided in Section 20, such as:

• In accordance with Section 20(2), if there is a delay in the delivery of the commodities which is caused by either the seller or the buyer, the risk of damages or loss is shouldered by the party that caused this delay. However, the responsibility of that party in this case is restricted to losses that could not have happened without such fault.[96]

• The purchaser bears the loss and must pay the cost if a specific bulk, which is controlled by a carrier or storekeeper, was damaged before the semi-specific commodities have been ascertained.[97]

• When commodities have deteriorated during transportation, the loss may be at the expense of the seller "because the goods did not remain merchantable for a reasonable time, even though property and risk might have passed to the buyer at the time when the goods were delivered to the carrier".[98]

• Property under CIF contracts, transfers at the time of tendering the documents to the buyer, which often occurs after the passing of risk that is on shipment.[99] To illustrate this, the purchaser is under commitment to pay for the commodities once he receives a valid tender of documents. This issue is the same even if an accident happened before tendering the documents and the resulting loss or damages to the commodities,[100] since the payer, under normal circumstances, is in a situation where he can claim these issues against the carrier or the insurer. However, the buyer may have evidence which proves that the goods, which have been damaged or deteriorated, were not up to standard at the relevant time.[101] In that regard, he can sue the seller directly without going through the carrier and the insurer. It is significant to note that if the event of the damages or loss was subject to one or more of the exclusion items agreed to under the contract of carriage; or if the damages or loss did not cover insurance, the purchaser would bear the loss, as occurred in the case of C Groom Ltd v Barber.[102]

It is obvious from the abovementioned analysis that English law regarding the passing of risk does not follow the rule of res perit domino. Therefore, risk passes at the same time as property, which passes at the conclusion of the contract in the sale of particular goods. However, if the commodities were unascertained property, risk does not pass to the buyer unless the seller appropriates commodities to the contract. It should be borne in mind that this event generally happens when commodities are delivered to the purchaser or to the carrier in order to be delivered to the purchaser, relying upon the contract description. Furthermore, this rule is not applicable to a situation of sale of goods that are comprised of an uncertain part of an acknowledged bulk in which risk passes on shipment irrespective of the property.[103] It must also be noted that in these two cases the contract ought to be unconditional. Ultimately, it is understood that the risk passes on shipment only under CIF and FOB contracts.

Even though the passing of risk in a particular case fitted with the basic rule, there was a common problem that used to cause difficulties when commodities sold were an uncertain part of an acknowledged bulk.[104] This problem has been resolved by the Sale of Goods (Amendment) Act 1995 (SGA 1995), where it was determined that the buyer who pays for some or all of the commodities which are included in a particular bulk, becomes an owner in common of this bulk (which is known as pro rata division).[105] The problem occurs in cases where parts of a large bulk have deteriorated after the risk has transferred to the purchaser. Therefore, a pro rata division does not provide a satisfactory solution in a situation where parts of a large bulk shipment have deteriorated. This is because it is unreasonable to compel the carrier to divide the deteriorated commodities, or to impose on the person to whom the commodities are delivered to accept them in that condition. Of course, if he is not the purchaser then he is committed to accept the commodities from the carrier whatever the situation.[106]

In contrast to the SGA, the INCOTERMS states that risk passes when the commodities have been made available to the purchaser at the delivery point,[107] but this is without any further requirements and/or limitations, such as the purchaser committing a "breach of contract by failing to take delivery".[108] In addition, under the INCOTERMS, the seller has an obligation to notify the purchaser that the commodities are available for him or that the cargo has been delivered.[109] It is unfortunate that if the seller fails to notify the buyer, he is in breach of contract and this empowers the buyer to claim breach of contract under the CISG.[110]

5) Comparative Evaluation

In relation to the basic situation where the seller must deliver a particular cargo to the purchaser at his own location of business, the Vienna Convention 1980 follows the same method because it considers that risk will pass on delivery as soon as the purchaser takes control over the cargo. On the other hand, in English law risk passes prima facie once the contract is concluded by parties, and this is the decisive point for transferring the property. It has been suggested that the Convention is fair and useful because the seller has control over the cargo and it is easier for the seller to provide insurance for the goods as well as protecting them while they are under his control. Moreover, it is likely that the cargo can be covered by standing policies, which are held by the seller with regard to his location and their contents, while the purchaser will most likely need a particular policy in order to cover certain risks.

In respect of the sale of unascertained commodities, it appears that both the SGA and the CISG rely upon previous ascertainment by the seller. In a sale in which the dispatch of the commodities is not involved, the Vienna Convention 1980 first requires the seller to identify the commodities and after doing so, he should put them under the control of the purchaser [111] who is in default when not accepting delivery. In addition, both the SGA and the Convention use the same methods with regard to the purchaser's default in accepting the commodities delivery. In this situation, the risk under the CISG transfers to the buyer at the moment that the cargo is put at his disposal; or if the delay by him is enough to be a breach of contract. Similarly, under the SGA the purchaser is responsible for the risk if he causes the delay to the delivery and this delay contributes to the loss of the cargo, as was the case in Demby Hamilton and Co Ltd v Barden.[112]

Chapter III: Sale involving carriage

Contracting parties must be aware that if Section 32(1) of the SGA is applied and the seller is responsible for arranging transportation, Subsection 2 of this Section would require the seller to pay enough attention to the nature of the commodities as well as the surrounding circumstances, and hence to make a "reasonable contract." Therefore, in the situation where the commodities are lost or damaged during transit as a consequence of the seller's failure to make a reasonable contract, or if the damages make the cargo unsatisfactory, the purchaser will have the right to claim damages. Moreover, simply delivering the cargo to the carrier might be insufficient for the seller to have performed his contractual obligations but he should ensure that the cargo reaches the purchaser. In such a situation, the purchaser can reject the cargo on the basis that the seller failed to make a "reasonable contract" and can claim compensation for the seller's breach.

3. Vienna Convention

1) Carriage of goods involving dispatch (Article 67.1)

The first sentence of Article 67.1 of the Convention states that:

If the contract of sale involves carriage of the goods and the seller is not bound to hand them over at a particular place, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer in accordance with the contract of sale.[116]

Three significant points can be taken from this statement.. Firstly, it involves contracts of sales which include carriage of goods; secondly, it disregards the fact that the seller may still have the documents pertaining to the concerned goods; and finally, in relation to the words "handing over", it is clear that this article stresses the actual delivery. It should be noted, however, that the Article does not differentiate between carriage by air, road, sea, or even multimodal transportation.

The rule stating that handing the sold commodities over to the first carrier is considered as delivery, as long as there is no other agreement among the parties, makes the CISG a suitable legal system for multimodal and container transport. However, we must realize that the phrase "sale contract involving carriage of goods", under Article 67(1), covers a particular situation where the seller is required to send the commodities to the purchaser, but no more indication happened to show the extent of his commitments.

Article 31 of the CISG also relates to transactions involving carriage of sold commodities. This Article stipulates that:

If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists: (a) if the contract of sale involves carriage of the goods—in handing the goods over to the first carrier for transmission to the buyer[117]

In the analysis of this Article, the seller is only obliged to deliver the commodities to the carrier, as was stated in the Pizza cartons case [118] where the seller was bound to deliver the commodities to the purchaser by handing them over to the first carrier for transmission to the buyer.

This Article (along with Article 67), deals with three different rules that can be implemented in cases where the seller has a commitment to deliver the goods to the purchaser without further indication of the scope of this commitment. It also identifies the location where the commodities must be delivered. In this respect, it must be noted that all the regulations under this Article shall not apply if the parties have agreed otherwise, because the parties' choice prevails over the provisions of the Vienna Convention 1980.[119] Therefore, in accordance with the present article, a contract of sale involves carriage if there was a commitment on the seller to make the essential arrangements to transfer the cargo to the purchaser, or if the seller had the power to make such arrangements.

2) Carriage from an agreed place

If the contract contains transit, as a general rule risk transfers at the moment of concluding the contract. However, risk sometimes transfers at the moment of handing the commodities over to the carrier who could be issued the shipment documents "if the circumstances so indicate".[120] In spite of this, risk would still be with the seller after signing the contract if he knew or should have known that the commodities had been damaged or lost, and he did not disclose that to the purchaser.[121] If contracting parties have agreed that the cargo should be handed over to the carrier at a different location than the seller's location of business, risk transfers to the buyer at the moment when the goods are handed over to the carrier at the agreed location.

The second sentence of Article 69(1) in the CISG will not apply if the parties determine the passing of risk time for themselves; for example, by using an FOB or CIF term, and as far as the contractual conditions prevail over the Convention's rules.[122] Moreover, in the course of this Article, it only applies to the "Free Carrier" contracts where the "handing over" location has been identified.[123]

Article 67(1) would apply despite the existence of only one carrier, provided that there is such an agreement among the parties that the seller is asked to deliver commodities into the custody of the carrier at his headquarters, such as in CPT and CIP contracts.[124] Consequently, risk transfers once the carrier acquires the cargo in order to transmit them to the purchaser. Such a solution would appear reasonable due to the fact that the carrier would take more care of cargo if under his control at his headquarters.

3) Common Rule

The approach used in the SGA, in relation to the passing of risk, follows the Convention's approach in the same cases, in particular where the sale involves dispatch. Unless otherwise agreed, the common rule is that risk passes as soon as the goods are handed over to the carrier for shipping to the buyer; or when delivering them to the first carrier if, for instance, there are more than one carrier. However, in the absence of not involving dispatch in the sale, the location of delivery is different because under these systems the seller's location of business is the location of delivery.[125] In terms of the differences between the two systems, risk transfers to the purchaser in the sale of specific commodities under English law at the time of the conclusion of the contract, irrespective of the delivery time, whereas under the CISG, risk transfers to the purchaser when the seller puts the commodities under the purchaser's control at his headquarters.

4) A comparative perspective of the policy considerations supporting the basic rule

Both the SGA and the Convention are similar concerning the basic rule in the sale of goods involving dispatch: risk transfers when commodities are handed over to the first carrier in order to be sent to the purchaser. Furthermore, if otherwise agreed that the commodities must be delivered to a particular place, the rule of the two systems is that risk transfers at this point. It is internationally acknowledged that the risk during transit is on the purchaser. This rule appears fairer, because it enables courts and parties to save money as well as time since the purchaser obtains the shipping documents and has an insurance policy; and can also provide proof against the carrier or the insurance company in the event of litigation.[126] Additionally, this rule is more equitable because the risk of transit falls outside the purchaser's commitment in the international contracts of sale of goods.

5) Handing over goods to carrier for transfer to buyer

A. The phrase 'Handing Over'

The word 'handing over' in Article 67(1) of the Convention is intended to be completed under the delivery obligation. To illustrate this, the seller sends the sold commodities to an independent carrier, who then physically receives custody of the commodities and after this transports them to the purchaser. Similarly, under the SGA, "delivery" means the "voluntary transfer of possession from one person to another."[127] However, it is not enough for the seller to just make the sold goods ready to be sent, nor is it enough to hand over a document of title;[128] for example, a bill of lading or a warehouse warrant which gives the carrier a right to collect the cargo from the warehouse. It is important to note that parties may agree on other terms such as CIF or FOB, and if they do so, the passing of risk rule departs from the above rule under the CISG; and therefore, 'handing over' the commodities to the first carrier so that they can be sent to the buyer is inadequate, as risk, in accordance with INCOTERMS, transfers at a later stage when commodities pass the ship's rail.[129]

It is important to consider the definition of the word 'carrier' as well as indicate the relating provisions on the subject of this word for the purpose of Article 67. In addition to these, there must be an examination into whether the Multimodal Transport Operators (MTO) and freight forwarders can be regarded as carriers for the same purpose.

B. The word 'Carrier'

Under the Convention, there is no clear definition of the 'carrier' ( it is called in the modern trade a freight forwarder). It is said that a freight forwarder is a company or a person that operates as an agent of the vendor and pledges to arrange the cargo to be carried to the purchaser or the carrier by dealing with a series of individual contracts of carriage by different types of transportation modes.[130] Although the position of the agent seems to be difficult to identify, specifically whether it operates as an independent carrier or as an irresponsible freight forwarder, it typically excludes the freight-forwarder's liability for damage or loss during carriage or transhipment from one place to another. It is thought that the freight forwarder usually organises arrangements for the entire process without assuming liability for carrying the cargo.[131] The freight forwarder is not regarded as a first carrier;[132] therefore, risk will transfer when the shipper loads the cargo with instructions from the seller himself.[133] The only case in which the freight forwarder can be seen as a first carrier is when they are involved in the commission of the transport of goods.[134]

However, If the cargo at the time of the conclusion of the contract is already in an independent shipper's custody, it might be suitable for the seller to instruct the shipper in order to make the risk transfer to the purchaser. Flambouras has suggested that the standard of 'control' is essential and must be the fundamental basis for international law governing the passing of risk.[135] This seems reasonable because sellers could theoretically transport their own goods. However, what seems unfair is his claim that sellers ought to bear the risk during transit even when carriage is handled by a freight company because the seller is 'connected to his subsidiary freight company'. The purchaser, on the other hand, would only bear risk if the freight company's subsidiary were both formally and substantially independent.[136] This argument seems unreasonable simply because of the difficulties of demonstrating that the freight company is fully independent.

On the other hand, the SGA follows the same method as the Uniform Laws of International Sales (ULIS),[137] where risk does not transfer before delivery. In this context, the word 'delivery' means handing over the sold goods to the purchaser. Therefore, in the situation of faulty goods, there will be no delivery and risk will not pass to the purchaser although he has custody of the commodities.[138] Hence, comparing the word 'delivery' under the English law to the word 'handing over' under the CISG shows that the former is of a complex nature and has several different functions.[139] This nature is particularly clear in the abovementioned case of defective commodities, in which the seller may continue to bear the risk of damage or loss even after the commodities are in the possession of the purchaser.[140]

Another important point here is the expression "for transmission to the buyer." This phrase suggests that the seller fulfils his commitment and hence concludes the contract, depending upon the fact that the carrier is under commitment to either carry the commodities to the purchaser or make arrangements for this to happen if he represents a shipping agency. In accordance with this interpretation, handing over the commodities to some carrier to be put in warehouses and carried later on by another carrier is not enough to consider commodities to have been handed over "for transmission to the buyer." However, if the shipper has custody of the commodities "for transmission to the buyer" and due to some difficulties in transportation he needs to put them in a temporary warehouse, that does not influence the fact that the seller accomplished delivery and hence fulfilled his commitment. Article 67 of the CISG provides that during transportation, the risk is on the purchaser. However, it is significant to underline that temporary breaks in transportation may have a negative impact on the fact that the commodities have been handed over to the shipper for "transmission to the buyer."

6) Scope of application of the rule

Article 67(1) appears to be of limited practical importance when we take into consideration that the CISG only mentions international sales and that contracting parties can approve other specific conditions that deviate from the CISG rules. However, there are exceptions to this, where the seller is under commitment to send the cargo to the buyer or has the power to do so, but has no further indication in the framework of his duties.

To summarise, the basic rule set forth in Article 67(1) of the CISG which provides that risk transfers on the handing over of the goods to the first carrier, is to be implemented in four specific cases, where: (i) there is only one carrier involved or (ii) transhipment occurred between carriers as long as no further indication of the extent of the seller's duties happens or (iii) the means of transport is at the seller's discretion [141] or (iv) the contracting parties submit their contract to the CISG rules without any specific stipulation for the passing of risk.

(i) Situations where there is one carrier involved

A typical example of the first case is when the parties agree that the seller is bound to arrange the transfer of the sold commodities from his location of business to the purchaser's by truck, which is known as a "free on truck" (FOT) contract.[142] In this case, Article 67(1)b will apply and the risk transfers as soon as the commodities are fully loaded on the lorry.[143] In this connection, it is suggested that the former rule must apply to these cases only when commodities have been loaded on the truck by the seller's staff. Therefore, if the carrier or his employees loaded the sold commodities on the lorry, risk would transfer at the time the carrier acquires the goods, provided that the parties have not agreed otherwise.[144]

(ii) Situations where there is transhipment among carriers

The second case includes situations in relation to transhipment among carriers in which the contracting parties have explicitly or impliedly stipulated that neither the seller's duties nor any special clauses, such as CIF, FOB or FAS have been incorporated.[145] It must be kept in mind that even though this sort of case is not very common, it could not be excluded. An instance of this situation is when a contract stipulates that the seller delivers the cargo from his location to carrier A for carriage by lorry or rail, and then the carrier A sends the cargo to carrier B, who will deliver them to the buyer's location.

An illustration of this case is in a situation where the parties include in their contract a Carriage and Insurance Paid to (CIP) or a Carriage Paid To (CPT) term. Therefore, by incorporating these regulations and there being more than one carrier, then according to INCOTERMS 1990, risk passes on delivery of the cargo into the custody of the first carrier, who transfers them to the named place of destination.[146] However, it is argued that if the commodities are placed on board the ship of a maritime carrier by the first carrier upon the instructions of the seller, this could be interpreted as constituting the delivery by the seller. Hence, the second sentence of Article 67(1) will be applicable.[147] It is difficult to agree with this view, because from a literal explanation of Article 67(1), particularly the first sentence, this Article must apply only when the seller, not the first carrier as the seller's agent, hands the commodities over to a carrier at an intermediate point. Moreover, this rule revokes the fundamental rules of the Convention - that risk transfers on delivery to the first carrier.[148]

(iii) Situations where the seller arranges for transportation and selects the modes of carriage

The first sentence of Article 67(1) of the CISG also covers situations where the contract stipulates that the seller has to make arrangements for the transportation, but has the right to choose which modes of transport can be used.[149] In other words, there might be a transhipment among carriers. However, the decision of determining the methods of transport is for the seller. The following example serves to illustrate this. There is a contract between a seller in Kuwait wishing to freight to a buyer in Greece. The contract does not stipulate any clauses in respect of the passing of risk, the way for shipment, or even port of loading. The seller discovers that there are no carriers between Kuwait and Greece, who can transport the goods. He then arranges for shipment by carrier A from Kuwait to France to deliver the goods to carrier B, who is located in France, who then takes them to the buyer's location. At the final destination in Greece, it is discovered that the commodities have been affected in transit and it is unclear from the circumstances the exact point where this happened. In light of this case, risk had transferred to the purchaser when the commodities were handed over to the first carrier, so the second sentence of Article 67(1) would be inapplicable.[150]

7) Unascertained Goods

Article 67(2) provides that in order to permit risk to transfer to the purchaser in all above-mentioned cases covered by Article 67(1), commodities need to be identified in the contract. Such identification might be made by shipping documents, markings on the cargo, or otherwise.[151] This provision highlights cases where commodities are shipped as an undivided bulk in performance of several contracts.[152] Even though Article 67(1) stipulated several different methods of identification, any other method would be adequate provided that it guarantees that the seller does not abuse this.[153] Nevertheless, generally the seller needs to appropriate the sold commodities by sending a notice of appropriation or a declaration of ship.[154] However, it should be noted that in accordance with Article 27, it is not essential for the purchaser to have obtained the notice after it has been sent by the seller before loss or damage to the commodities occurs, as the language of Article 67(2) prevents risk from passing retrospectively[155] as well as preventing the property from passing.[156]

It would appear that the above-mentioned rules do not meet the actual requirements of the international goods trades to the extent that they are strict. Therefore, these rules might be helpful and more effective when they only apply in a sale of unascertained generic goods.

With respect to the sale of goods, which represents an undifferentiated part of an identified bulk, under the SGA risk passes irrespective of the identification, at least in the situations of total loss of the commodities, which form part of an identified bulk.[157]

Finally, both the SGA and the CISG appear to tend to the pro rata division solution in situations where the part of this bulk has not been appropriated and the bulk has been destroyed or lost after the risk has passed to the purchaser.[158] Nonetheless, for reasons already clarified,[159] the pro rata division solution could be ineffective, particularly in large bulk commodity shipments where part of it has deteriorated. Atiyah has argued that this solution is not effective and may result in lengthy litigation.[160] A different outcome of the pro rata division solution may be effective, however, in cases where commodities have not been clearly appropriated by the seller or when they have not been delivered to a particular purchaser by the carrier.[161]

Chapter IV. Trade Usages Related to Contracts Involving Sea Transit

Although the SGA is regarded as one of the most advanced laws in the world regarding trade usage it does not comprise any direct rules related to sea transit, except for one in Section 55. It is well established that this means that the main source for such rules is the judiciary. The CISG does not provide for a specific definition of trade usages either, but instead Article 6 of the CISG permits parties to include them in their contracts.[162]

However, it should be noted that the Convention stipulates for the result of incorporation, whether with total or partial exclusion of the Convention rules, as indicated in Article 9(1).[163] This raises the question of whether the rules, which are agreed on in the contract, are unclear and ambiguous. The answer to this question can be found in Article 8 of the CISG which is related to the standards that govern the explanation of parties' intentions.[164] This provision is considered a decisive point that determines if the exclusion covers the Convention entirely or partially. One can only speculate what would occur if a dispute had arisen between parties and the two systems had not given a clear definition in respect of usage trades. The SGA and the Convention are not dogged by this issue because they have both built up effective mechanisms to deal with the frequent and unique problems that commercial cases in this area are prone to.

Therefore, if otherwise adopted by either the SGA or the Convention, several changes would occur in order to make it consistent with the trade custom.[165] Additionally, the drafters of the CISG decided to remove any indication of trade terms because this is dealt with by INCOTERMS,[166] which are indeed updated regularly and used internationally in the area of international trade.

2) CIF Contracts

A. Transfer of risk on shipment/loading

Under the SGA, the seller has performed his obligation to ship commodities by allocating them if they have already been freighted or by shipping the actual commodities if they have not.[167] However, it should be clearly outlined that if there have not been any sold commodities, then the seller must buy and allocate such commodities afloat in order to perform his obligation to ship.[168] It is well established by English authorities that risk would pass on shipment if the commodities are sold before consignment, whilst risk will pass from consignment if the commodities are afloat at the point of sale or allocation.[169] However, the English authorities do not provide further reference as to the exact point at which risk passes in the above-mentioned cases.[170] There is no doubt that the standard of the ship's rail, due to it being a critical point of the transfer of risk, would not meet the requirements of modern commerce.[171] Therefore, the rules of the CISG and the new language of INCOTERMS 1990 such as CIP, CPT or FCA, incline towards referring to the standard of entry of the actual commodities into the custody of the carrier as the critical point of delivery.

The present study suggests that the standard of "delivery to the carrier's custody" in CIF contracts appears to be more successful and effective for the following reasons:

In such a scenario, the notion of shipment must only cover delivery of actual commodities to the terminals and buildings of the operator located in the port of shipment, and must not extend to cover delivery to operator's buildings inland.[174]

B. Risk of loss in goods sold or allocated in transit

One of the main benefits of the CIF contract is to permit the seller to ship a large amount of a commodity and then allocate these goods or part of them to a purchaser or purchasers when the commodities are afloat.[175] However, under a CIF contract, there are many obligations on the seller when compared to an FOB contract where there are less duties on the vendor.[176] One may argue that the rule under the CIF contract is that the seller can validly tender documents such as an invoice, a bill of lading or an insurance policy, with respect to the dispatched commodities although the vendor knows that these commodities have been totally lost. In such a case, the buyer would not have a right to reject the documents, if it can be assumed that the commodities were in accordance with the sale contract at the time of consignment.[177] It may be true that the result may be different if the commodities have been lost before concluding the contract or after sale but prior to being allocated.

On the other hand, under the CISG, there are no specific rules for CIF contracts. Nonetheless, since Article 68 regulates goods sold in transit, it would also apply to such contracts. In practice, it stipulates that risk passes when parties conclude the contract. It must be borne in mind that if the vendor did not know that the loss or damage had occurred after consignment, risk can be transferred with retroactive effect from the time of consignment as long as the circumstances do not prove to the contrary.[178]

There seems to be a good balance between these systems in respect of these solutions, but it would appear that the Convention does not provide any indication of what the circumstances are and the cases have not developed any basis for defining the appropriate circumstances.[179] Therefore, in comparing the CISG with the SGA, the latter has a considerable number of cases in relation to the circumstances.

There are extensive disagreements about these solutions, particularly amongst scholars. For clarification, we may divide the situation into two: sale of goods already lost and sale of goods already deteriorated.

It must be noted that a contract is valid if the commodities have been lost after shipping and then sold, even if, for example, a person promises to do something impossible. In view of that, there would be two different types of impossibility. First, if the delivery was impossible owing to the creditor, who is the vendor in this instance, both parties would be released from their commitments. In situations such as this, the seller was not and/or could not be aware that the shipped cargo were lost. Second, if the seller is at fault for the impossibility of delivery, for example the seller was aware or if he did not implement due diligence to know that the cargo had been lost, the purchaser would have rights to alternatively exercise one of the following measures: (1) to appeal to be released from his commitment of payment, (2) to seek compensation although he would still be bound to pay for the cargo; or (3) to annul and terminate the contract, which of course would contribute to both contracting parties being released from their commitments.[180]

In this respect, the case of Couturier v Hastie[181] is regarded as a significant reference point in English law because it was held that the tender of shipping documents did not make the purchaser liable to pay the cost if there was nothing to be bought in the time of contracting. Therefore, it is obvious that fraud or fault by the vendor only has a bearing if it relates to fraud or negligence. Following this, Section 6 of the SGA provides that if all or part of certain goods [182] have perished at the conclusion of the contract, the contract will be invalid due to this mistake.[183] However, although this provision is provided by statute, the meaning of the word "perished" is unclear - whether it intended for partial loss or the applicability of this provision to the CIF contract;[184] therefore, the meaning of the word 'perished' has been criticized because of its unclear meaning.[185] This ambiguity is expressed in the different decisions in the similar cases of Horn v Minister of Food [186] and Turnbull v Rendell.[187] Both related to the sale of potatoes but in the former it was held that the potatoes, which had rotted, had not perished within the meaning of Section 7 of the Act; while in the latter case it was held that the potatoes had perished within the meaning of Section 6 of the Act and that the contract was therefore void.

Under the CISG, this situation would be governed by Article 68,[188] and so risk would pass on conclusion of the contract.[189] However, if the circumstances indicated otherwise, risk would be passed at the moment the commodities were 'handed over' to the carrier who issued the pertinent documents regarding the contract of carriage.[190] Whilst the phrase 'circumstances' here indicates the intention of the parties, whether expressly or implicitly, if the latter situation happens the seller is obligated by the contract of carriage to sign over the insurance policy and transfer to the purchaser [191] or when the purchaser retroactively insures the commodities, which is possible if he did not know about the loss. Finally, whereas the retrospective transfer of risk in accordance with Article 68 is permitted even if the loss comes before the contract has been signed, all the related rules that concern the invalidity of the contract of sale, if the commodities do not exist at the contracting time would not apply.[192]

Under the SGA, notably under CIF contracts, if the commodities deteriorate after shipping and are then sold, the risk is on the purchaser. The buyer, therefore, commits to pay for the goods, which have already been agreed on, even if the deterioration occurred before making the contract.[193] However, Goode looks at this from a different perspective. He argues that the purchaser in both cases, either when the contract was made after the commodities have deteriorated or are lost, would have the right to refuse the tender of documents, in spite of the fact that the commodities are partly or wholly deteriorated or lost, because the seller is unable to sell something which is already destroyed.[194] Lastly, it may be said that there is no difference between total loss and deterioration in accordance with Article 68 of the CISG. Hence, the solution may be similar to that for the situation where commodities are completely lost before sale, as already mentioned above.

C. Risk of loss before appropriation

Problems arise when commodities in a generic sale are 'appropriated' or allocated to a contract of sale after they have deteriorated, been damaged or been lost. It is well established from the international sales perspective that appropriation is the seller's duty to send a notice such as a notice of appropriation, consignment and declaration of shipment, to the purchaser.

According to English jurisprudence, it is submitted that in a CIF sale of specific or appropriated commodities, the seller may tender documents with respect to the shipment of cargo even though he knows that all have been totally lost, as already clarified above. However, in the situation where commodities have not been appropriated, it would appear that the result may change depending upon whether the commodities have been totally lost, have deteriorated or become damaged.[195] Carr claims that the buyer has to bear the risk of loss both after and before appropriation.[196] Similarly, Bridge argues that regardless whether appropriation occurs after commodities are lost or before, or whether the vendor was aware of the loss or not, risk has been transferred from him to the purchaser by tendering proper documents.[197] It can be said that as any loss may be covered by an insurance policy, the purchaser in this situation would be able to claim damages from the insurer.

If the commodities are shipped, a contract is signed for the sale of goods, the shipped commodities deteriorate or are destroyed and are then appropriated to the contract. Under English law, the seller will have the right to appropriate the commodities and the purchaser will incur the risk of deterioration as from shipment, this is the risk of deterioration which happened after shipment, and thus he cannot reject the documents sent later by the seller.[198] However, under English law, it is doubtful whether the seller could appropriate commodities already lost by tendering the documents. Cases law indicates that the seller might tender the documents of the shipment, even though he knows that the commodities have been lost. The cases of Manbre Saccharine Co. Ltd v Corn Products [199] and Groom v Barber [200] illustrate that the seller has the right to demand payment for the tender of the shipping documents even on lost commodities, even if the commodities have been appropriated before the tender of documents. Even though this conclusion is questionable, it is argued that the ruling in the latter case did not rely on the identification of the commodities but rather a proprietary sense of 'appropriation'.[201]

D. Evaluation – Proposals

The fundamental rule on the passing of risk on shipment is shared by both the SGA and the CISG. Regarding the concept of shipment, the Convention's approach appears to be more efficient and fair since the commodities are required to be handed over to the custody of the carrier. This solution would appear to be more efficient in other cases as well, such as in CIF sales, in which a freight operator has the commodities in his custody. Applying the Convention's approach to such cases would save money and time, since it avoids doubts as to the exact time that the commodities crossed the ship's rail.[202]

In relation to the retrospective passing of risk after appropriation, English jurisprudence would appear to be more developed and efficient than the rule embraced by the Convention, because the latter system, particularly in Article 68, comprises the mysterious standard of 'indicative circumstances' for the retrospective passing of risk in collective consignments. Furthermore, the standard of knowledge is not a proper one in situations of deterioration, damage or destruction, due to the fact that the seller's consciousness seems to be difficult to prove, particularly when commodities are located in sealed containers or more generally when the cause of the damage and deterioration was not definable.[203] Such a rule may result in litigation which consumes money and time as a consequence of uncertainty. Therefore, it is strongly advised that the CISG must follow the English approach, which permits appropriation after damage or deterioration irrespective of a 'knowledge' standard.

Finally, in the event of string contracts even if the commodities have been completely lost, considerations of justice may lead to the need for a further improvement and refinement of the rule with respect to the presumption of knowledge. It is suggested that the absence of knowledge must be presumed particularly if the time between the loss of the ship and the appropriation is limited, and this indicates that it is not a proper standard. Nonetheless, string contracts would likely form a general exception to the rule because of their special properties, including the need to re-order routing of documents.[204]

3) FOB Contracts

A. Basic Rule

English law adopts the standard of ship's rail in connection with FOB contracts of sale where the risk passes on shipment. It should be noted that an FOB clause is provided only when there is sea carriage.[205] In addition, it appears that previous English cases have not dealt with issues of damages or loss which occur in the unloading process. There are two cases that are exceptions to this, Anderson v Morice [206] and Colonial Insurance Company of New Zealand v Adelaide Marine Insurance Company.[207] In these cases the ship and goods sank and were totally lost after part of the sold quantity had been loaded on.[208] These exceptions have created uncertainty over this rule.

According to traditional opinion, the same rule applies to both CIF and FOB sales, in that risk passes when the sold goods pass the ship's rail. Nonetheless, in the context of an FOB sale, 'passing the ship's rail' is intended to refer to the point where commodities are fully shipped, since the seller's duty in an FOB contract is to fetch the commodities at the ship's rail for loading. This situation was reported in the case of Miserocchi and Co SpA v Agricultores Federados Argentinos [209] where the seller was held liable to pay for the price of loading the commodities over the ship's board. Without doubt, this rule in FOB contracts is much better established than in CIF contracts. However, this rule is flexible in cases where the contracting parties have provided otherwise, for example, if they consent to enforce additional duties on the seller such as to name a ship and thereby to bear the expenses as well as the risk until stowage - only then will the shipment be considered complete.

A notable English case is that of Pyrene Co Ltd v Scindia Navigation Co Ltd,[210] where even though the ship's rail was presumed as the point where risk passed to the purchaser, Devlin J confessed that it had lost much of its nineteenth century importance.[211] The applicant, Pyrene, sold some fire equipment to the Indian government and they agreed to include an FOB clause in their contract. The Indian government chose a ship belonging to a third party. During loading, one of the sold tenders was dropped and was damaged before crossing the ship's rail. Pyrene claimed for damages from the third party who in turn claimed that carrier liability was limited in accordance with the Hague Rules.[212] Whilst the defendants in this case admitted their liability, their commitments had started before the sold goods had crossed the ship's rail.

At this point, one might wonder whether the commodities have been shipped at any specific point (in order to pass on the risk) would rely upon the division of obligations in relation to consignment which the contract of sale would make expend between seller and buyer.[213] However, this conclusion is in complete contrast to the actual decision given by the court which assumed that the risk at that time was still on Pyrene. On the other hand, adopting the approach of 'division of obligations among parties', could not exclude the critical point of the 'ship's rail' from being used as a line for the transfer of risk.[214] Therefore, parties must clarify their intention as to the passing of risk. Finally, the parties might stipulate for an alternative solution, such as a condition expressing that if the vessel was lost while being loaded, the contract had to be cancelled only in respect of the goods not loaded.[215]

B. Suggestions

Risk must pass at the beginning of the loading process unless otherwise provided for by the contracting parties. This suggestion comes out of the apparent inefficiency and uncertainty of the ship's rail approach and because modern trade requires accuracy and clarity. Moreover, in other situations if commodities are carried in trailers or trucks in order to be delivered to the vessel, the end of the outer ramp replaces the ship's rail.[216]

Additionally, in some ports the transfer of risk is subject to trade customs which may mean that the risk transfer occurs at some point after the ship's rail. To illustrate this, the passing of risk in 'FOB Hamburg' sales is at the time of loading on the barge that carries the commodities for loading on the vessel, as the port of Hamburg recognizes this custom.

Chapter V: Conclusion

According to English case law, in FOB contracts, risk transfers when commodities ship. For example, in the case of the Pyrene, Devlin J held that the matter of whether the commodities had shipped at any specific time depended on the division of shipment duties between the carrier and the shipper.[217] Contracting parties might insist that the seller accept risk and expenses until trimming or stowage is completed, but they should make that clear. Otherwise, this clause would normally be read as an allocation of expenses.

Considering customs authorities and the special needs of each trade, as well as modern developments such as 'roll-on/roll-off'transport, it seems clear that a universal law regulating the passing of risk will not work. However, for reasons already clarified in CIF contracts, I suggest risk should pass when the commodities are 'handed over' to the sea carrier's possession. Such a resolution would help buyers and sellers avoid uncertainties and would provide harmony between the CISG's approach and other trade legislation.

Firstly, I would like to thank Dr. Mihail Danov, who supervised the present study, for his guidance and valuable advice during the course and while working in this study. Dr. Mihail Danov always opens his office's door and ready to give help to students.

Secondly, I would like to thank my family, my mother, my sisters and my bothers, for their love and support throughout the years. I would never have been able to finish my studies and dissertation without their helps and encouragements.

Thirdly, I would also like to take this opportunity to thank a person, who always stands by me and always willing to help and give me the best suggestions. I would have been lonely without this person. Also, I am lucky to have shared conversations, studies and laughs with this person. Without this person, my life and studies in the UK would have been much more difficult.

Last but certainly not the least, I appeal and ask God to forgive my father's soul; he always gave me everything I wanted when I was a child. May God be pleased with him.

Commission:	United Nations Commission of International Trade Law (UNCITRAL).
Convention:	United Nations Convention on Contracts for the International Sale of Goods (Vienna, April 11, 1980).
First Committee:	First Committee of the United Nations Conference on Contracts for the International Sale of Goods (Vienna March 10 - April 11, 1980), which prepared Articles 1-88.
1964 Hague Convention:	Diplomatic Conference on the Unification of Law governing the International Sale of Goods (The Hague, April 2-25, 1964)
1964 Hague Conference:	Records and Documents of the Diplomatic Conference on the Unification of Law governing the International Sale of Goods (The Hague, April 2-25, 1964), 2 vol., ed. by the Ministry of Justice of the Netherlands, the Hague, 1966.
Incoterms:	International Rules for the Interpretation of Trade Terms, International Chamber of Commerce, Publ. No.460.
ICC:	International Chamber of Commerce.
Official Records:	United Nations Conference on Contracts for the International Sale of Goods (Vienna, March 10 - April 11, 1980), Official Records, New York, 1981.
Sales Draft:	Draft Convention on the International Sale of Goods, as approved by the United Nations Commission on International Trade Law at its tenth session, in Yearbook VIII (1977), New York, 1978, 5.
Second Committee:	Second Committee of the United Nations Conference on Contracts for the International Sale of Goods (Vienna, 10 March - April 11, 1980), which prepared Articles 89-101.
Secretariat's Commentary:	Commentary on the Draft Convention on Contracts for the International Sale of Goods, prepared by the United Nations Secretariat (in: Official Records, 14-66).
ULF:	Uniform Law in the Formation of Contracts for the International Sale of Goods, annexed to the Conventions Relating to a Uniform Law on the Formation of Contracts in the International Sale of Goods, adopted by the 1964 Hague Conference (in: 1964 Hague Conference Records, I, 349-354).
ULIS:	Uniform Law on International Sale of Goods, annexed to the Convention Relating to a Uniform Law on the International Sale of Goods, adopted by the 1964 Hague Conference (in: 1964 Hague Conference Records, I, 333-348).
ULVC:	Draft of Law for the Unification of Certain Rules Relating to Validity of Contracts of International Sale of Goods, approved by the Governing Council of Unidroit in 1972 (in: Uniform Law Review, 1973, I, 61-69).
Uncitral:	United Nations Commission on International Trade Law, established by the General Assembly of the United Nations with resolution 2205 (XXI) of 17 December 1966 (in: Yearbook I (1968-70), New York, 1971, 65-66).
Uncitral Draft Convention:	Draft Convention on Contracts for the International Sale of Goods as approved by the United Nations commission on International Trade Law at its eleventh session (1978) (in: Yearbook IX (1978), New York, 1981, 14).
Unidroit:	International Institute for the Unification of Private Law (Intergovernmental Organization founded in 1926 with headquarters in Rome and grouping together 52 Member States).
Vienna Conference:	United Nations Conference on Contracts for the International Sale of Goods (Vienna, March 10 - April 11, 1980).
Working Group:	Working Group on the International Sale of Goods, set up by Uncitral at its second session, on March 26, 1969 (in: Yearbook I (1968-70), New York, 1971, 189).
C&F	Costs and Freight
CFR	Common Frame of Reference
CFR	Cost and Freight
CFS	Container freight station
CFS/CFS	Container freight station-to-container freight station
CIF	Costs, Insurance and Freight
CIF & C	Costs, Insurance, Freight and Commission
CIF C & I	Costs, Insurance, Freight, Commission and Interest
CIP	Freight, carriage and insurance paid to
CPT	Carriage Paid To
FCA	Free Carrier
FCP	Freight or Carriage Paid to
FOB	Free on Board
FOR	Free on Road
FRC	Free carrier … named point
INCOTERMS	International Commercial Terms
INTRATERMS	International Trade Terms
SGA	English Sale of Goods Act 1979

Cases:

United Kingdom

Anderson v Morice [1875] LR 10 CP 609, affd. [1876] 1 APP. Cas. 713

Arnhold Karberg & Co. v. Blythe, Green, Jourdain & Co [1916] 1 KB 495

Aron and Co Onc v Comptoir Wegimont [1921] 3KB 435

Bank of England v Vagliano Bros [1891] A.C. 107 at p.144-45

Barrow, Lane & Ballard, Ltd. v. Phillip Phillips & Co., Ltd.[1929] 1 KB 574

Biddell Bros. v. E. Clemens Horst Co. [1911] 1 K.B. 934

Bowden Bros and Co Ltd v Little [1907] 4 CLR 1364.

Bowes v Shand [1877] 2 App Cas 455

Colonial Insurance Company of New Zealand v Adelaide Marine Insurance Company [1886] 12 App. Cas. 128

Comptoir d'Achat et de Vente du Boerenbond Belge SA v Luis de Ridder Limitada (The Julia) [1949] A.C. 293

Conservators of the River Thames v Smeed, Dean & Co [1897] 2 Q.B. 334 at p.346

Conway v. Larson Jewelers, Inc.104 Misc. 2d 872, 429 N.Y.S.2d 378 (N.Y. Civ. Ct. 1980).

Couturier v Hastie [1853] 9 Exch 102 (Ex Ch), affirmed (1856) 5 HLC 673

Crowther v Shannon Motor Co. [1975] 1 WLR 30.

Demby Hamilton and Co Ltd v Barden[1949] 2 All ER 435.

Dunlop v Lambert(1839) 6 Cl and Fin 600

Eurico SpA v Philipp Brothers (The Epaphus), [1987] 2 Lloyd's Rep 214

Golodetz (M) and Co Inc v Czarnikow-Rionda Co Inc, The Galatia [1980] 1 WLR 495

Groom v Barber [1915] 1 KB 316.

Horn v Minister of Food [1948] 2 All E.R. 1036

Inglis v Stock (1885) 10 App. Cas. 263

Inglis v. Stock. (1885) 10 App. Cas. 263

Law and Bonar Ltd v British American Tobacco Co, Ltd [1916] 2 KB 605, 608

Manbre Saccharine Co. Ltd v Corn Products Co Ltd [1919] 1 KB 198

Miserocchi and Co SpA v Agricultores Federados Argentinos [1982] 2 Lloyd's Rep. 202-7

Pyrene Co Ltd v Scindia Navigation Co Ltd [1954] 2 QB 402.

Shipton, Anderson and Co v John Weston and Co [1922] 10 Ll.l.R 762, 763

Smyth & Co Ltd v Bailey Son & Co Ltd [1940] 3 All ER

Sterns Ltd v Vickers Ltd[1923] 1 KB 78.

Stock v Inglis [1884] Q.B.D. 564

The Julia [1949] A.C. 293, at 309

The Parchim [1918] AC 157

The Post Chaser [1981] 2 Lloyd's Rep 695

Thermo Engineers v Ferrymasters Ltd [1981] 1 Lloyd's Rep 200

Turnbull v. Rendell (1908) 27 NZLR 1067

Underwood Ltd v Burgh Castle Brick and Cement Syndicate[1922] 1 KB 123.

Vantol Ltd v Fairclough Dodd and Jones Ltd, [1955] 1 WLR 642

Wait, Re [1927] 1 Ch. 606. CA

Wardar's (Import and Export) Co Ltd v Norwood and Sons Ltd[1968] 2 QB 663.

Wuensch Hnadelsgesellschaft International GmbH v Tai Ping Insurance Co. Ltd [1998] 2 Lloyd's Rep. 8.

Australia

McRae v Commonwealth Disposals Commission (1951) 84 CLR 377

Germany

Appellate Court Köln (Germany) 9 July 1997 (Video camera case). Available at <http://cisgw3.law.pace.edu/cases/970709g3.html>

CLOUT case No. 338 [Oberlandesgericht Hamm, Germany 23 June 1998] (Furniture case). Available at <http://cisgw3.law.pace.edu/cases/980623g1.html>

CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998]. Available at <http://cisgw3.law.pace.edu/cases/980623g1.html>

CLOUT case No. 360, Germany 13 April 2000 Lower Court Duisburg (Pizza cartons case). Available at <http://cisgw3.law.pace.edu/cases/000413g1.html>

Germany Oberlandesgericht, 23 June 1998 Appellate Court Hamm (Furniture case). Available at <http://cisgw3.law.pace.edu/cases/980623g1.html>

Russia

Diamant Ltd v. Kirov District Tax Inspectorate of the City of St. Petersburg, Case No. A56-37941/02 of 3 June 2003, Federal Arbitration Court for the Northwestern Circuit of the Russian Federation, [translation available] at <http://cisgw3.law.pace.edu/cases/030603r1.html>

Russia 30 December 1998 Arbitration proceeding 62/1998, available at <http://cisgw3.law.pace.edu/cases/981230r1.html>

China

China 18 August 1997 CIETAC Arbitration proceeding, (Vitamin C case), available at <http://cisgw3.law.pace.edu/cases/970818c1.html>

China 1 April 1997 CIETAC Arbitration proceeding (Fishmeal case) [translation available] at <http://cisgw3.law.pace.edu/cases/970401c1.html>

Books:

Kritzer A, Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, (Deventer; Kluwer Law International, 1989

Bjorklund A, 'General provisions Article 27', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011)

Raymond A, 'Passing of Risk Article 69', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011)

Nicholas B, 'Article 67', in Bianca-Bonell Commentary on the International Sales Law, (Giuffrè: Milan 1987)

Nicholas B, 'Article 68', in Bianca-Bonell Commentary on the International Sales Law, (Giuffrè: Milan 1987)

Bridge MG, Bennett HN and Benjamin JP, Benjamin's sale of goods (Sweet & Maxwell 2010)

C.H Spurin, 'Statutory Regulation of Contracts For the Sale and Supply of Goods', in the Law of International Trade and Carriage, Ch 3, (Nationwide Mediation Academy for NADR UK Ltd, 2004)

Murray C and others, Schmitthoff's export trade: the law and practice of international trade (11th ed., Sweet & Maxwell 2007)

Enderlein F & Maskow D, International Sales Law: United Nations Convention On Contracts For The International Sales Of Goods - Convention On The Limitation Period In The International Sale Of Goods - Commentary (New York: Oceana Publications, 1992)

Moens G and Gilles P, International trade and business: law, policy and ethics (Routledge-Cavendish 2006)

Gabriel H.D, Contracts for the Sale of Goods: A Comparison of U.S. and International Law, (2nd edn, Oxford University Press 2009

Carr I and Stone P, International trade law (4th edn, Routledge-Cavendish 2010)

Schwenzer I, Commentary on the UN Convention on the International Sale of Goods (CISG) (Oxford University Press 2010)

Chuah J, Law of international trade: cross-border commercial transactions (4th edn, Sweet & Maxwell 2009)

Erauw J, 'Passing of risk Article 66 & 67', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011)

Honnold J, 'Risk of Loss' in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984)

Honnold J, Harry M. Flechtner, Uniform Law For International Sales Under The 1980 United Nations Convention (4th edn, Kluwer Law International 2009)

Honnold J, Uniform Law for International Sales under the 1980 United Nations Convention, (3rd ed., Kluwer Law International, 1999)

Jolowicz HF and Nicholas B, Historical introduction to the study of Roman law (3^rd edn, Cambridge University Press 1972).

Lookofsky J.M, Understanding the CISG (3ed edn, Kluwer Law International 2008)

Bridge M, 'The Bifocal World of International Sales: Vienna and Non-Vienna', in: Cranston (ed.) Making Commercial Law (Oxford: Oxford University Press 1997)

Bridge M, The international sale of goods: law and practice (2nd edn, Oxford University Press 2007)

Bridge M, The sale of goods (Oxford University Press 1997)

Bridge M, 'The Transfer of Risk under the UN Sales Convention' in CB Andersen and U Schröter (eds), Sharing International and Commercial Law across National Boundaries (Wildy, Simmonds and Hill, 2008)

Bridge M, Uniformity and Diversity in the Law of International Sale, 15 Pace Int'l L. Rev. 55 (2003)

Atiyah P. S., Adams J.N and MacQueen H, Atiyah's Sale of Goods, (12th ed., London: Pearson 2011)

Schlechtriem P and Butler P, UN law on international sales: the UN Convention on the International Sale of Goods (Springer 2008).

Goode RM, Commercial Law (2nd edn, Penguin 1995)

Burnett R and Bath V, Law of international business in Australasia (Federation Pr 2009)

Schwenzer I, Hachem P and Kee C, Global Sales and Contract Law (1st edn, Oxford University Press 2012)

Kröll S, Mistelis L and Viscasillas MdP P, 'Introduction to the CISG', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011)

Tetley W, Brian G McDonough and Elliott B Nixon, Marine cargo claims (3th ed., Montreal: International Shipping Publications 1988)

Articles and Journals:

American Bar Association Report on the 1980 Sales Convention to the House of Delegates, 18 INT'L LAW 39 (1984).

Arden DM, 'Time for an English Commercial Code?', The Cambridge Law Journal, Vol. 56, No. 3 (Nov., 1997)

Bainbridge S M, 'Trade usages in international sales of goods: an analysis of the 1964 and 1980 sales conventionse78' (1984) 24(3) Virginia J Int Law 619

Bell K, 'The Sphere of Application of the Vienna Convention on Contracts for the International Sale of Goods', Pace International Law Review. (1996)

Berman H and Ladd M, 'Risk of Loss or Damage in Documentary Transactions Under the Convention on the International Sale of Goods' (1988) 21 Cornell Int'l LJ

Bollée S, 'The Theory of Risks in the 1980 Vienna Sale of Goods Convention' (Pace) (1999-2000) 245-290 available at <http://www.cisg.law.pace.edu/cisg/biblio/bollee.html>

Bridge M, 'A Law for International Sales', 37 Hong Kong Law Journal (2007)

Bridge M, 'International private commodity sales' (1991) 19(1) Canadian Business Law Journal

Bridge M, 'Uniformity and diversity in the law of international sale' (2003) 15(1) Pace International Law Review 55.

Collins H, 'Good Faith in European Contract Law', Oxford Journal of Legal Studies, Vol. 14, No. 2 (Summer, 1994)

Dolganova I & Lorenzen M, 'The Brazilian Adhesion to the 1980 UN Vienna Convention on Contracts for the International Sale of Goods', Pace Law School Institute of International Commercial Law, (2008) <http://www.cisg.law.pace.edu/cisg/biblio/dolganova-lorenzen.html>

Douglas G E, `After the Damage is Done: Risk of Loss Under the United Nations Convention on Contracts for the International Sale of Goods' 22 Col. J Trans'l Law (1984)

Erauw J, 'CISG articles 66-70: the risk of loss and passing it', 25 Journal of Law and Commerce (2005)

Feltham J D, `The Appropriation to a CIF Contract of Goods Lost or Damaged at Sea' (1975) JBL

Ferrari F, Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing, 15 J. LAW & COMMERCE (1995)

Flambouras D, 'Transfer of Risk in the Contract of Sale Involving Carriage of Goods--A Comparative Study in English Law, Greek Law and the United Nations Convention on Contracts for the International Sale of Goods', 6 Int'l. Trade & Bus. L. Ann. 87 (2001)

Forte A, 'The United Nations Convention on Contracts for the International Sale of Goods: Reason and Unreason in the United Kingdom', 26 U. BalL L Rev. 51 (1997).

Gabriel H, 'The International Chamber of Commerce INCOTERMS 1990: A Guide to the Terms and Their Usage', VINDOBONA J. INT'L COM. L. & ARB. (1999) 61–70 available at <http://www.cisg.law.pace.edu/cisg/biblio/gabriel1.html>

Grewal S. S, 'Risk of Loss in Goods Sold during Transit: A Comparative Study of the U.N. Convention on Contracts for the International Sale of Goods, the U.C.C., and the British Sale of Goods Act', 14 Loy. L.A. Int'l & Comp. L. Rev. (1991)

Hartnell H E, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, 18 YALE INT'L L. 1, 36 n.140 (1993).

Hofmann N, 'Interpretation Rules and Good Faith as Obstacles to the UK's Ratification of the CISG and to the Harmonization of Contract Law in Europe', 22 Pace Int'l L. Rev. 145 (2010)

Honka H, 'Harmonization of Contract Law through International Trade', A Nordic Perspective, 11 TUL. EUR. & Civ. L.F. (1996)

JOHN S MO, 'Forwarder's bill and bill of lading' (1997) 5(2) Asia Pacific Law Review

Kabik M, 'Through the Looking-Glass: International Trade in the "Wonderland" of the United Nations Convention on Contracts for the International Sale of Goods', International Tax & Business Lawyer. Law 9 (1992)

Kathrein and Magraw, 'The Convention for the International Sale of Goods: A Handbook of Basic Materials' (Chicago, IL: American Bar Association, 1990)

Leung W, 'The Dual Role of the Freight Forwarder: Vastfame Camera Ltd v Birkart Globistics Ltd, 2005 High Court of Hong Kong 117, Stone J, 5 October 2005, 2005 AMC 2864 (High Court of Hong Kong, 2005)' (2007) 38(1) J Maritime Law Commerce 97

Moss S, 'Why the United Kingdom has not ratified the CISG. (25th Anniversary of the United Nations Convention on Contracts for the International Sale of Goods)' (2005) 25(1-2) Journal of Law and Commerce 483.

Ndulo M, 'The Vienna Sales Convention 1980 and the Hague Uniform Laws on International Sale of Goods 1964: A Comparative Analysis', International and Comparative Law Quarterly, 38, (1989)

Oberman N G, 'Transfer of risk from seller to buyer in international commercial contracts: A comparative analysis of risk allocation under the CISG, UCC and Incoterms', (Pace) 1997 <http://cisgw3.law.pace.edu/cisg/thesis/Oberman.html>

P. M. Roth, 'The Passing of Risk', the American Journal of Comparative Law, Vol. 27, No. 2/3, Unification of International Trade Law: UNCITRAL's First Decade (Spring - Summer, 1979)

Ramberg J, 'To What Extend Do Incoterms 2000 Vary Articles 67 (2), 68 and 69' (2005) 25 JL & Com. 221

Romein A, 'The Passing of Risk A comparison between the passing of risk under the CISG and German law', Heidelberg (1999) available at <http://www.cisg.law.pace.edu/cisg/biblio/romein.html>

Schlechtriem P, 'Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods' (Pace) ( Manz, Vienna: 1986 )

Sealy L. S., 'Risk" in the Law of Sale', The Cambridge Law Journal, Vol. 31, No. 1, 1972(B): Jubilee Issue (Apr., 1972)

Sevón L, 'Passing of Risk', Presentation of Schweizerisches Institut für Rechtsvergleichung ed., Wiener Übereinkommen von 1980, Lausanner Kolloquium 1984, Zürich: Schulthess (Pace) (1985)

Sono K, The Vienna Sales Convention: History and Perspective, in International Sale of Goods: Dubrovnik Lectures 1, 2 (Petar Sarcevic & Paul Volken eds., 1986)

Spak M, 'Theft as a casualty loss; the little known remedy. (Uniform Commercial Code Symposium)' (1990) 21(3) The University of Toledo Law Review 757.

Tetley W, 'Waybills: The Modern Contract of Carriage of Goods by Sea' Journal of Maritime Law and Commerce, Part II; 15 J. Mar. L. & Com. (1984) 82-83

Valioti Z, 'Passing Of Risk in International Sale Contracts: A Comparative Examination Of the Rules on Risk under the CISG and Incoterms 2000', Nordic Journal of Commercial Law (2004)

Winship P, 'Congress and the 1980 International Sales Convention', 16 GA. J. INT'L & COMP. L, 707 (1986)

Zeller B, 'The UN Convention on Contracts for the International Sale of Good (CISG) - A Leap Forward towards Unified International Sales Law', 12 Pace Int'l L. Rev. 79 (2000)

Documents:

CISG-AC Opinion no 1, Electronic Communications under CISG, 15 August 2003. Rapporteur: Professor Christina Ramberg, Gothenburg, Sweden, available at <http://www.cisg.law.pace.edu/cisg/CISG-AC-op1.html#art67>

United Nations Convention on Contracts for the International Sale of Goods, Vienna,11 April 1980, S.Treaty Document Number 98-9 (1984), UN Document Number A/CONF 97/19, 1489 UNTS 3. Available at <http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG.html>

U.N. Doc. A/Conf./97/18 Annex I (Apr. 10, 1980), GAOR, 33d Sess., Supp. 35 (A/35/35) at 217; 52 Fed. Reg. 40 6262-6280 (Mar. 2, 1987); reprinted in 19 I.L.M. (1980)

Convention Relating to a Uniform Law on the International Sale of Goods, July 1, 1964, 834 U.N.T.S 107 [hereinafter ULIS].

Convention Relating to a Uniform Law on the International Sale of Goods, July 1, 1964, 834 U.N.T.S 107 [hereinafter ULIS].

Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, July 1, 1964, 834 U.N.T.S. 169 (1972) [hereinafter ULF].

Secretariat Commentary on Article 67

Secretariat Commentary on Article 68

Primary sources

United Nations Convention on Contracts for the International Sale of Goods, Vienna 1980, available at <http://www.uncitral.org/>

The Uniform Law on the International Sale of Goods (ULIS), The Hague, 1964

The Uniform Law on the Formation of Contracts for the International Sales of Goods (ULF), The Hague

INCOTERMS 2000: ICC official rules for the interpretation of trade terms, entry into force 1st January 2000, International Chamber of Commerce (Paris: ICC Publishing, 1999).

Sale of Goods Act 1979

Uniform Customs and Practice for Documentary Credits (UCP), ICC Brochure 500/1993 Revision, International Chamber of Commerce. Commission on Banking Technique and Practice (Paris: ICC 1994).

FOOTNOTES

* This Dissertation is submitted for the degree of Master of Law of Brunel University 2012

1. P. M. Roth, 'The Passing of Risk', (Spring - Summer, 1979), the American Journal of Comparative Law, Vol. 27, No. 2/3, Unification of International Trade Law: UNCITRAL's First Decade pp. 291-310

2. The historical origin of the emergence of international commercial contract of sale returned to Roman law, because of trade links and complexity of the economic transactions between the Romans and foreign traders. See, Ingeborg Schwenzer, Pascal Hachem and Christopher Kee, Global Sales and Contract Law (1st edn, Oxford University Press 2012) 484-485

3. HF Jolowicz and Barry Nicholas, Historical introduction to the study of Roman law (3^rd edn, Cambridge University Press 1972).

4. Zoi Valioti, 'Passing Of Risk in International Sale Contracts: A Comparative Examination Of the Rules on Risk under the CISG and Incoterms 2000', (2004) Nordic Journal of Commercial Law

5. Indira Carr and Peter Stone, International trade law (4th edn, Routledge-Cavendish 2010) 81

6. In this study, the United Nations Convention on Contracts for the International Sale of Goods will be abbreviated to the Vienna Convention 1980, the Convention or the CISG.

7. Carr and Stone (n5), 81-2

8. See Article 1(1)(a) of the CISG.

9. Article 1(1)(b) of the Vienna Convention states that "This Convention applies to contracts of sale of goods between parties whose places of business are in different states".; Jason Chuah, Law of international trade: cross-border commercial transactions (4th edn, Sweet & Maxwell 2009) 23

10. Michael Bridge, 'Uniformity and Diversity in the Law of International Sale' (2003) 15 Pace Int'l L. Rev. 55 58-62

11. Carr and Stone (n 5 ) 81

12. Roth (n 1) 296

13. Stephen M. Bainbridge. 'Trade usages in international sales of goods: an analysis of the 1964 and 1980 sales conventionse78' (1984) 24(3) Virginia J Int Law 619

14. William Tetley, 'Waybills: The Modern Contract of Carriage of Goods by Sea' Journal of Maritime Law and Commerce, Part II; (1984) 15 J. Mar. L. & Com. 82-83

15. As in the case with the discussion in Chapter III

16. Joseph M. Lookofsky, Understanding the CISG (3ed edn, Kluwer Law International 2008) 2-3

17. As of 24 February 2012, UNCITRAL reports that 78 States have adopted the CISG; and the list of Contracting States can be found on the website at. <http://www.cisg.law.pace.edu/cisg/countries/cntries.html> accessed 27 July 2012

18. For example, those countries (industrial nations) are such as Germany, France, China, Japan and the USA; however, the UK, Brazil and India have not yet ratified the CISG; see CISG: Table of Contracting States, Pace Law School Institute of International Commercial Law available at <http://www.cisg.law.pace.edu/cisg/countries/cntries.html>

19. Sally Moss, 'Why the United Kingdom has not ratified the CISG. (25th Anniversary of the United Nations Convention on Contracts for the International Sale of Goods)' (2005) 25(1-2) Journal of Law and Commerce 483.

20. Tetley (n 14) 82-83

21. Kathrein and Magraw, 'The Convention for the International Sale of Goods: A Handbook of Basic Materials' (Chicago, IL: American Bar Association, 1990) 3

22. Hannu Honka, 'Harmonization of Contract Law through International Trade', A Nordic Perspective(1996) 11 TUL. EUR. & Civ. L.F. 111-113 (observing that "expanding trade will probably increase the number of international contracts concluded and especially the economic volume involved, and further necessitate the harmonized handling of contractual disputes.")

23. Michael Kabik, 'Through the Looking-Glass: International Trade in the "Wonderland" of the United Nations Convention on Contracts for the International Sale of Goods'(1992) International Tax & Business Lawyer. Law 9 408-409

24. Franco Ferrari, Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing, 15 J. LAW & COMMERCE (1995) 1-5

25. Kazuaki Sono, The Vienna Sales Convention: History and Perspective, in International Sale of Goods: Dubrovnik Lectures 1, 2 (Petar Sarcevic & Paul Volken eds., 1986)

26. Ibid.

27. Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, July 1, 1964, 834 U.N.T.S. 169 (1972) [hereinafter ULF].

Convention Relating to a Uniform Law on the International Sale of Goods, July 1, 1964, 834 U.N.T.S 107 [hereinafter ULIS].

28. Convention Relating to a Uniform Law on the International Sale of Goods, July 1, 1964, 834 U.N.T.S 107 [hereinafter ULIS].

29. Helen Elizabeth Hartnell, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, (1993) 18 YALE INT'L L. 1, 36 n.140

30. Muna Ndulo, 'The Vienna Sales Convention 1980 and the Hague Uniform Laws on International Sale of Goods 1964: A Comparative Analysis', (1989) International and Comparative Law Quarterly, 38, page 1; American Bar Association Report on the 1980 Sales Convention to the House of Delegates (1984) 18 INT'L LAW 39.

31. The United Nations created UNCITRAL in 1966 in order to promote the progressive unification and harmonization of the law of international trade. See Peter Winship, 'Congress and the 1980 International Sales Convention', 16 GA. J. INT'L & COMP. L, 707 (1986) 721-24

32. Sono K (n 22)

33. Ibid.

34. John O. Honnold, Harry M. Flechtner, Uniform Law For International Sales Under The 1980 United Nations Convention (4th edn, Kluwer Law International 2009) 11-12

35. Ibid 3.

36. See Stefan Kröll, Loukas Mistelis and Perales Viscasillas MdP, 'Introduction to the CISG', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011) 5

37. See CISG (n1) art. 99(1).

38. United Nations Convention on Contracts for the International Sale of Goods, Vienna,11 April 1980, S.Treaty Document Number 98-9 (1984), UN Document Number A/CONF 97/19, 1489 UNTS 3. The full text of the CISG is available in pdf format at <http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG.html> accessed 1 Augest 2012

39. The eleven states were Argentina, China, Egypt, France, Hungary, Italy, Lesotho, Syria, the United States, Yugoslavia and Zambia.

40. See Kröll, Mistelis and Viscasillas MdP (n33) 2

41. Ibid

42. Shivbir S. Grewal, 'Risk of Loss in Goods Sold during Transit: A Comparative Study of the U.N. Convention on Contracts for the International Sale of Goods, the U.C.C., and the British Sale of Goods Act', (1991) 14 Loy. L.A. Int'l & Comp. L. Rev. 93-94

43. See Convention, supra note 1, art. 6 ("The parties may exclude the application of this convention or... vary the effect of any of its provisions.")

44. Ibid

45. Dame Mary Arden, 'Time for an English Commercial Code?', (Nov., 1997) The Cambridge Law Journal, Vol. 56, No. 3 516-536

46. Hugh Collins, 'Good Faith in European Contract Law', Oxford Journal of Legal Studies, (1994) Vol. 14, No. 2 229-254

47. Bank of England v Vagliano Bros [1891] A.C. 107 at p.144-45.

48. Ibid

49. Chuah (n 9) 89

50. Conservators of the River Thames v Smeed, Dean & Co [1897] 2 Q.B. 334 at p.346, per Chitty L.J.

51. Tetley (n 14) 82-83

52. Ibid

53. Nathalie Hofmann, 'Interpretation Rules and Good Faith as Obstacles to the UK's Ratification of the CISG and to the Harmonization of Contract Law in Europe', (2010) 22 Pace Int'l L. Rev. 145

54. Angelo Forte, 'The United Nations Convention on Contracts for the International Sale of Goods: Reason and Unreason in the United Kingdom'(1997), 26 U. BalL L Rev. 51

55. Bridge (n 10) 55 70; See Moss (n17)

56. Michael Bridge, 'A Law for International Sales' (2007) 37 Hong Kong Law Journal 17-40.

57. Bruno Zeller, 'The UN Convention on Contracts for the International Sale of Good (CISG) - A Leap Forward towards Unified International Sales Law', (2000)12 Pace Int'l L. Rev. 79

58. Bridge (n 56) 17-40

59. Michael Bridge, The Bifocal World of International Sales: Vienna and Non-Vienna, in: Cranston (ed.) Making Commercial Law (Oxford: Oxford University Press 1997) 277-96

60. Ibid

61. Michael Bridge, The international sale of goods: law and practice (2nd edn, Oxford University Press 2007)

62. Iulia Dolganova & Marcelo Lorenzen, 'The Brazilian Adhesion to the 1980 UN Vienna Convention on Contracts for the International Sale of Goods', Pace Law School Institute of International Commercial Law, (2008) <http://www.cisg.law.pace.edu/cisg/biblio/dolganova-lorenzen.html> accessed 1 Augest 2012

63. Carr (n 5) 81

64. The CISG, Article 66

65. Douglas E. Goodfriend, `After the Damage is Done: Risk of Loss Under the United Nations Convention on Contracts for the International Sale of Goods' (1984) 22 Col. J Trans'l Law 576

66. Johan Erauw, 'CISG articles 66-70: the risk of loss and passing it', (2005) 25 Journal of Law and Commerce 208-10

67. Roth (n 1) 291

68. L. S. Sealy, 'Risk" in the Law of Sale', (Apr., 1972)The Cambridge Law Journal, Vol. 31, No. 1, 1972(B): Jubilee Issue, pp. 225-247

69. Conway v. Larson Jewelers, Inc.104 Misc. 2d 872, 429 N.Y.S.2d 378 (N.Y. Civ. Ct. 1980). See also Professor Michael Spak, 'Theft as a casualty loss; the little known remedy. (Uniform Commercial Code Symposium)' (1990) 21(3) The University of Toledo Law Review 757.

70. Sterns Ltd v Vickers Ltd[1923] 1 KB 78.

71. Fritz Enderlein & Dietrich Maskow, International Sales Law: United Nations Convention On Contracts For The International Sales Of Goods - Convention On The Limitation Period In The International Sale Of Goods - Commentary (New York: Oceana Publications, 1992) 261. See for example, Underwood Ltd v Burgh Castle Brick and Cement Syndicate[1922] 1 KB 123.

72. Wardar's (Import and Export) Co Ltd v Norwood and Sons Ltd[1968] 2 QB 663.

73. Schwenzer, Hachem and Kee ( n 2)

74. Erauw (n 66) 203

75. See Erauw (n 66) 206; Ingeborg Schwenzer, Commentary on the UN Convention on the International Sale of Goods (CISG) (Oxford University Press 2010) 521-522

76. Dionysios Flambouras, 'Transfer of Risk in the Contract of Sale Involving Carriage of Goods--A Comparative Study in English Law, Greek Law and the United Nations Convention on Contracts for the International Sale of Goods', (2001) 6 Int'l. Trade & Bus. L. Ann. 87

77. Ibid

78. This is illustrated by Groom v Barber [1915] 1 KB 316. The goods were lost because of war and the insurance did not include damage or loss due to war; therefore, the buyer did not have a right of action against the carrier. Hence, the buyer had to pay for the goods against the tender of documents.

79. Valioti (n 4)

80. Carr and Stone (n 5) 82

81. Annemieke Romein, 'The Passing of Risk A comparison between the passing of risk under the CISG and German law', Heidelberg (1999) available at <http://www.cisg.law.pace.edu/cisg/biblio/romein.html> accessed 6 August 2012

82. The passing of risk to the conclusion of the contract is followed in Switzerland

83. This is adopted in England, Sale of Goods Act 1979 s 20, sec. 18 rule 1

84. Germany and Greece follow the third theory and link the passing of risk with the handing/taking over of the goods.

85. Schwenzer, Commentary on the UN Convention on the International Sale of Goods (CISG) (n 75) 938

86. Article 69 of the CISG

87. Appellate Court Köln (Germany) 9 July 1997 (Video camera case); Joseph Lookofsky & René Henschel, 'Comments on Issues Relating to the Passing of Risk' (2004) (Pace)

88. Michael Bridge, 'The Transfer of Risk under the UN Sales Convention' in CB Andersen and U Schröter (eds), Sharing International and Commercial Law across National Boundaries (Wildy, Simmonds and Hill, 2008) 77-104

89. Lief Sevón, 'Passing of Risk', Presentation of Schweizerisches Institut für Rechtsvergleichung ed., Wiener Übereinkommen von 1980, Lausanner Kolloquium 1984, Zürich: Schulthess(1985) (Pace) 191-206

90. ibid 204.

91. INCOTERMS 1990, p.18. 'Ex works' means that the seller fulfils his obligations to deliver when he has made the goods available at his premises (i.e. works, factory, warehouse, etc.) to the buyer; Henry Gabriel, 'The International Chamber of Commerce INCOTERMS 1990: A Guide to the Terms and Their Usage' (1999) VINDOBONA J. INT'L COM. L. & ARB. 61–70 <http://www.cisg.law.pace.edu/cisg/biblio/gabriel1.html> accessed 5 August 2012

92. Anjantte Raymond, 'Passing of Risk Article 69', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011) 905-8

93. Germany Oberlandesgericht, 23 June 1998 Appellate Court Hamm (Furniture case) (Pace)

94. CISG-AC Opinion no 1, Electronic Communications under CISG, 15 August 2003. Rapporteur: Professor Christina Ramberg, Gothenburg, Sweden <http://www.cisg.law.pace.edu/cisg/CISG-AC-op1.html#art67> accessed 6 August 2012

95. See Section 17(1) of the Act 1979

96. Section 20.3 of the English law Act 1979.

97. It is significant here to note that the buyer bears the risk although the property has remained with the seller.

98. William Tetley, Brian G McDonough and Elliott B Nixon, Marine cargo claims (3th ed., Montreal: International Shipping Publications 1988) 166

99. Lord Porter in Comptoir d'Achat et de Vente du Boerenbond Belge SA v Luis de Ridder Limitada (The Julia) [1949] A.C. 293 at p.309; Kennedy L.J. in Biddell Bros. v. E. Clemens Horst Co. [1911] 1 K.B. 934, 956 thought that property passes on shipment; however, Lord Wright's speech differs from the judgment Kennedy L.J, in Smyth & Co Ltd v Bailey Son & Co Ltd [1940] 3 All ER 60, 67-8, because property does not pass until the bill of lading is transferred.

100. Golodetz (M) and Co Inc v Czarnikow-Rionda Co Inc, The Galatia [1980] 1 WLR 495

101. Lord Denning MR in Crowther v Shannon Motor Co. [1975] 1 WLR 30.

102. Groom v Barber [1915] (n 78 )

103.Inglis v. Stock. (1885) 10 App. Cas. 263

104. Re Wait [1927] Ch 206.

105. Flambouras (n 76) 7-8

106. Ibid

107. Jan Ramberg, 'To What Extend Do Incoterms 2000 Vary Articles 67 (2), 68 and 69' (2005) 25 JL & Com. 221

108. Article 69 of the CISG

109. Ramberg (n 107) at 222

110. Article 74 of the CISG

111. See Article 69.3 of the Convention

112. Demby Hamilton and Co Ltd v Barden [1949] 2 All ER 435.

113. See Section 32.1 of the Sale of Goods Act 1979

114. Dunlop v Lambert (1839) 6 Cl and Fin 600

115. See Article 18 Rule 5(2) of the SGA 1979.

116. See Article 67.1 of the CISG

117. See Article 31(a) of the CISG

118. CLOUT case No. 360, Germany 13 April 2000 Lower Court Duisburg (Pizza cartons case). Available at <http://cisgw3.law.pace.edu/cases/000413g1.html>

119. See CLOUT case No. 338 [Oberlandesgericht Hamm, Germany, 23 June 1998]. Available at <http://cisgw3.law.pace.edu/cases/980623g1.html>

120. See Article 68 of the CISG

121. Ibid; CLOUT case No. 338 [Oberlandesgericht Hamm, Germany 23 June 1998] (Furniture case). Available at <http://cisgw3.law.pace.edu/cases/980623g1.html>

122. Johan Erauw, 'Passing of risk Article 66 & 67', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011) 891-99

123. Schwenzer, Hachem and Kee (n 2) 930-31

124. Erauw (n 122) 895-898

125. Article 69 of the Vienna Convention Section and 29(1) of the Sale of Goods Act 1979

126. John Honnold, 'Risk of Loss' in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 8, p 5-6

127. Section 61(1) of the SGA

128. Peter Schlechtriem, 'Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods' (Pace) ( Manz, Vienna: 1986 ) 87-88

129. Neil Gary Oberman, 'Transfer of risk from seller to buyer in international commercial contracts: A comparative analysis of risk allocation under the CISG, UCC and Incoterms', (Pace) 1997 <http://cisgw3.law.pace.edu/cisg/thesis/Oberman.html> accessed 15 September 2012

130. William Leung, 'The Dual Role of the Freight Forwarder: Vastfame Camera Ltd v Birkart Globistics Ltd, 2005 High Court of Hong Kong 117, Stone J, 5 October 2005; 2005 AMC 2864 (High Court of Hong Kong, 2005)' (2007) 38(1) J Maritime Law Commerce 97; JOHN S MO, 'Forwarder's bill and bill of lading' (1997) 5(2) Asia Pacific Law Review 96-97

131. Leung (n 130) 98-100

132. Ibid

133. Schwenzer (n 75) 544-546

134. Incoterms 1990, (FCA)

135. Flambouras (n 76) 22

136. Ibid.

137. Art. 19(1) of the ULIS 1964

138. Roth (n 1) 291-6

139. Schwenzer (n 75) 927

140. Sylvain Bollée, 'The Theory of Risks in the 1980 Vienna Sale of Goods Convention' (Pace) (1999-2000) 245-290 <http://www.cisg.law.pace.edu/cisg/biblio/bollee.html> accessed 20 September 2012

141. Secretariat Commentary on Article 67; Albert H. Kritzer, Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, (Deventer; Kluwer Law International, 1989) 442

142. Incoterms 1990 FCA

143. Ibid

144. Flambouras (n 76) 18

145. John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, (3rd ed., Kluwer Law International, 1999) 398

146. Carole Murray and others, Schmitthoff's export trade: the law and practice of international trade (11th ed., Sweet & Maxwell 2007) 55

147. Barry Nicholas, 'Article 67', in Bianca-Bonell Commentary on the International Sales Law, (Giuffrè: Milan 1987) 491-492

148. John Honnold, 'Risk of Loss' in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 8, p 5-6

149. Nicholas (n 147) 489-490

150. Bollée (n 140) 269-70

151. Article 67(2). Russia 30 December 1998 Arbitration proceeding 62/1998, available at <http://cisgw3.law.pace.edu/cases/981230r1.html>; (Vitamin Case), China 18 August 1997 CIETAC Arbitration proceeding <http://cisgw3.law.pace.edu/cases/970818c1.html> accessed 25 September 2012

152. Bollée (n 140) 207

153. John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, (3rd ed., Kluwer Law International, 1999) 372

154. The Post Chaser[1981] 2 Lloyd's Rep 695

155. See Professor Andrea Bjorklund, 'General provisions Article 27', in UN Convention on Contracts for the International Sale of Goods (CISG): [commentary] (Beck; Hart 2011) 360-68

156. Section 16 and 17 of the SGA 1979

157. Murray and others (n 137) 78-81; C.H Spurin, 'Statutory Regulation of Contracts For the Sale and Supply of Goods', in the Law of International Trade and Carriage, Ch 3, (Nationwide Mediation Academy for NADR UK Ltd, 2004) 2-3

158. Bridge MG, Bennett HN and Benjamin JP, Benjamin's sale of goods (Sweet & Maxwell 2010) Paragraph 5-109

159. See Chapter II, particularly at the basic rule on the passing of risk under English Law

160. P. S. Atiyah, John N. Adams, Hector MacQueen, Atiyah's Sale of Goods, (12th ed., London: Pearson 2011) 332-40

161. Bridge MG, Bennett HN and Benjamin JP (n 158) Paragraph 5-109

162. Article 6 of the CISG

163. Generally see Article 9 of the CISG

164. Article 8 of the CISG

165. Harold Berman and Monica Ladd, 'Risk of Loss or Damage in Documentary Transactions Under the Convention on the International Sale of Goods' (1988) 21 Cornell Int'l LJ 423

166. Ibid 433.

167. Smyth & Co Ltd v Bailey Son & Co Ltd [1940] 3 All ER 60, 68

168. There are some important cases in this respect such as; Eurico SpA v Philipp Brothers (The Epaphus), [1987] 2 Lloyd's Rep 214; Vantol Ltd v Fairclough Dodd and Jones Ltd, [1955] 1 WLR 642; and Shipton, Anderson and Co v John Weston and Co [1922] 10 Ll.l.R 762, 763

169. Biddell Bros. v. E. Clemens Horst Co. [1911] supra note 99; The Julia [1949] A.C. 293, at 309; Bowden Bros and Co Ltd v Little [1907] 4 CLR 1364.

170. Bowes v Shand [1877] 2 App Cas 455

171. Honnold and Flechtner (n 34) 519; Gabriel Moens and Peter Gilles, International trade and business: law, policy and ethics (Routledge-Cavendish 2006) 142

172. Robin Burnett and Vivienne Bath, Law of international business in Australasia (Federation Pr 2009) 88-90; As indicated in Wuensch Hnadelsgesellschaft International GmbH v Tai Ping Insurance Co. Ltd [1998] 2 Lloyd's Rep. 8.

173. Incoterms (FCA A4 (iv))

174. This suggestion, however, is in contrast with the decision held in Aron and Co Onc v Comptoir Wegimont [1921] 3KB 435, which McCardie, J observed that consignment must be assumed to take place on the same date as bill of lading or receipt for consignment.

175. The main features of a CIF contract were given by Lord Wright in Smyth & Co Ltd v Bailey Son & Co Ltd [1940] 3 All ER; see also Burnett and Bath (n 172)

176. Michael Bridge, The international sale of goods: law and practice (2nd edn, Oxford University Press 2007) 128

177. Numerous cases support this rule such as; Law and Bonar Ltd v British American Tobacco Co, Ltd [1916] 2 KB 605, 608; Also, In Arnhold Karberg & Co. v. Blythe, Green, Jourdain & Co [1916] 1 KB 495; see also Manbre Saccharine Co. Ltd v Corn Products Co Ltd [1919] 1 KB 198

178. For further discussion of the circumstances, see Honnold and Flechtner (n 34) 528-32; See also Peter Schlechtriem and Petra Butler, UN law on international sales: the UN Convention on the International Sale of Goods (Springer 2008).

179. Henry Deeb Gabriel, Contracts for the Sale of Goods: A Comparison of U.S. and International Law, (2nd edn, Oxford University Press 2009) 209-10

180. Dionysios Flambouras, 'Transfer of Risk in the Contract of Sale Involving Carriage of Goods--A Comparative Study in English Law, Greek Law and the United Nations Convention on Contracts for the International Sale of Goods', (2001) 6 Int'l. Trade & Bus. L. Ann. 87

181. [1853] 9 Exch 102 (Ex Ch), affirmed (1856) 5 HLC 673

182. The example for perished of part of certain goods can be found in the case of Barrow, Lane & Ballard, Ltd. v. Phillip Phillips & Co., Ltd.[1929] 1 KB 574

183. The High Court of Australia in McRae v Commonwealth Disposals Commission (1951) 84 CLR 377

184. Michael Bridge, The sale of goods (Oxford University Press 1997) 131-145

185. Ibid; Atiyah and others (n 160) 105-107; Bridge MG, Bennett HN and Benjamin JP (n 158) paragraph 1-126-27 and 6-035-040

186. [1948] 2 All E.R. 1036

187. (1908) 27 NZLR 1067

188. For comprehensive discussion and critical analysis with regard to this issue, see Barry Nicholas, 'Article 68', in Bianca-Bonell Commentary on the International Sales Law, (Giuffrè: Milan 1987) 496-501

189. China 1 April 1997 CIETAC Arbitration proceeding (Fishmeal case) [translation available] at <http://cisgw3.law.pace.edu/cases/970401c1.html> accessed 29 September 2012

190. Diamant Ltd v. Kirov District Tax Inspectorate of the City of St. Petersburg, Case No. A56-37941/02 of 3 June 2003, Federal Arbitration Court for the Northwestern Circuit of the Russian Federation, [translation available] at <http://cisgw3.law.pace.edu/cases/030603r1.html> accessed 29 September 2012

191. Secretariat Commentary on Article 68; see also Honnold (n 145) 409-12

192. Nicholas (n 188) 501

193. Bridge MG, Bennett HN and Benjamin JP (n 158) Paragraph 19-113

194. RM Goode, Commercial Law (2nd edn, Penguin 1995) 954

195. Benjamin JP and others, Benjamin's sale of goods (Sweet & Maxwell 2010) Paragraph 6-008

196. Carr and Stone (n 5) 27

197. Michael Bridge, The international sale of goods: law and practice (2nd edn, Oxford University Press 2007) 376-88

198. J D Feltham, `The Appropriation to a CIF Contract of Goods Lost or Damaged at Sea' (1975) JBL 273, 280

199. Co Ltd [1919] 1 KB 198.

200. [1915] 1 KB 316

201. Goode (n 194) 953

202. For some additional arguments supporting this view, see Chapter IV (2)

203. Similarly Benjamin JP and others (n 195)

204. For a good instance of a string contract, see The Post Chaser [1981] 2 Lloyd's Rep 695. For further analysis and discussion about string contracts, see Michael Bridge, 'International private commodity sales' (1991) 19(1) Canadian Business Law Journal 485-99; Also Professor Bridge has another article about this matter, Michael Bridge, 'Uniformity and diversity in the law of international sale' (2003) 15(1) Pace International Law Review 55.

205. Stock v Inglis [1884] Q.B.D. 564; Inglis v Stock (1885) 10 App. Cas. 263; The Parchim [1918] AC 157

206. [1875] LR 10 CP 609, affd. [1876] 1 APP. Cas. 713

207. [1886] 12 App. Cas. 128

208. Ibid

209. [1982] 2 Lloyd's Rep. 202-7

210. [1954] 2 QB 402.

211. Ibid

212. See Article 4 of the Hague Rules, Schedual to the Carriage of Goods by See Act 1924.

213. Application of this rule can be seen in the Case of; Anderson v Morice [1875] LR 10 CP 609, affd. [1876] 1 APP. Cas. 713; and; Colonial Insurance Company of New Zealand v Adelaide Marine Insurance Company [1886] 12 App. Cas. 128

214. Miserocchi and Co SpA v Agricultores Federados Argentinos [1982] 2 Lloyd's Rep. 202-7

215. The Parchim, [1918] AC 157.

216. The instance here can be the case of Thermo Engineers v Ferrymasters Ltd [1981] 1 Lloyd's Rep 200

217. See chapter IV,(3),(A)