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CONFORMITY OF GOODS IN THE 1980 UNITED NATIONS 

CONVENTION OF CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS  

By Teija Poikela1 

 

Nordic Journal of Commercial Law 
issue 2003 #1 

 

 

                                                           
1 Teija Poikela is attorney at Studio Legale Sutti, Milan, Italy and is currently on research leave.  



Nordic Journal of Commercial Law, issue 2003 #1 
 

 
2 

1 INTRODUCTION 

The Art 35 of the 1980 United Nations Convention of Contracts for the International Sale of 
Goods states that 

«(1) The seller must deliver goods which are of the quantity, quality and description 
required by the contract and which are contained or packaged in the manner required 
by the contract. 

(2) Except where the parties have agreed otherwise, the goods not conform to the contract 
unless they:  

(a) are fit for the purposes for which the goods of the same description would 
ordinarily be used;  

(b) are fit for any particular purpose expressly or impliedly made known to the seller 
at the time of conclusion of the contract, except where the circumstances show 
that the buyer did not rely, or that it was unreasonable for him to rely, on the 
seller's skill and judgement;  

(c) possess the qualities of the goods which the seller has held out to the buyer as a 
sample or as a model;  

(d) are contained or packaged in the manner usual for such goods or, where there is 
no such manner, in a manner adequate to preserve and protect the goods.  

(3) The seller is not liable under sub-paragraph (a) to (d) of the preceding paragraph 
for any lack of conformity of the goods if at the time of the conclusion of the contract 
the buyer knew or could not have been unaware of such lack of conformity.» 

 
This study will focus on the meaning of the term «non-conformity» as understood by Article 35 
of the Convention, (the CISG), and on providing an overlook of case law in its application. 
Also the solutions adapted by certain domestic legal systems are studied.2   
 
In the social sciences it is coming to be recognized that one of the greatest difficulties is that of 
statement, and that many disputes are due to the imperfections of the language. Also 
jurisprudence is in need of semantic analysis. The difficulty of using words does not press upon 
the ordinary man because it usually does not matter to him whether, for instance, he calls a 
number of stones a «heap» or not. All that matters is that he should make his meaning clear 
enough for the purpose at hand.3 In law, however, it is different, for therein we draw sharp 
conclusions based upon these words of gradation. The question, whether a man is left in 
freedom or detained in a mental institution, depends on whether he is  classified as sane or 
insane in the legal sense, as also does the question whether his dispositions of property are 
upheld or not. 4 In fact, the language of law has long been a source of concern to the society. It 
has been the subject of continuous literary criticism and satire. Critics have highlighted its 
technical terms, its convolutions and its prolixity. Calls have regularly been made for the use of 
a simpler style. Some improvements have been made in response to those calls, but legal 
language remains largely unintelligible to most non-lawyer members of the society. In some 
cases, the obscurity may arise from the complexity of the law and of its subject matter. In other 

                                                           
2The current situation in the United Kingdom was chosen to be studied more accurately because it is not a contracting state of 
the CISG.  As regards the position of the Scotland, from the comparative studies' point of view it is rather interesting since it 
has adopted elements from both English and European legal traditions, making it an example of so called mixed legal system. 
This derives from historical reasons. By the Act of Settlement of 1707 Scotland kept its legal system and courts. The Scottish 
legislator, judges and practitioners follow developments of English case and statutory law with particular interest. Mikkola, p. 52   
3 Glanville Williams, in Lloyd's Introduction to Jurisprudence, p. 1181 
4 Glanville Williams, p. 1183 



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cases, however, it is due to the complexity of the language in which the law is expressed. While 
this is particularly painful truth in many domestic realms, international conventions tend to 
make an exception from this rule; since a lot of time and effort is given in the drafting of the 
conventions and as it is kept in mind that the interpreters - the users - of the conventions will 
have different legal backgrounds, it is necessary to strive for clear wording.  
 
The linguistic definition of the term «conformity» is one based on agreement and congruity, 
and thus largely a subjective term. However, for the purpose of a legal context, a larger degree of 
certainty is required from a term.5 To find out the real meaning of the term, we have to study 
the prevailing interpretation of it.6 
 
Throughout the work on uniform laws realists have been saying: «Even if you get uniform laws 
you will not get uniform results.» In fact, laws often use concepts that are local mental 
inventions that lack equivalent concepts in other legal systems. 7 International unification is, in 
fact, impossible. We should, however, consider the alternatives: conflicts of rules that are 
unclear and vary from forum to forum; national systems of substantive law expressed in doctrines 
and languages that, for many of us, are impenetrable. What is possible is to make law for 
international trade a bit more accessible and predictable. 8  
 
 
 
2 VIENNA CONVENTION  

2.1 Historical background  - the need for a convention 

The legal structures, as well as any other structures in the society, must change as does change 
the society itself. Karl Popper compares the situation of legal knowledge and its development to a 
situation of development of a town. To enable the development to take place it is not enough 
to repair and fix the existing entities. Once in a while one has to try to see the whole from a 
distance and have courage to remove what is old or not working, in order to construct 
something new, something that is based on current circumstances prevailing in the society. This 
is the case in international trade. In the era of globalization, when the national borders are 
losing their original significance, updating national laws doesn't suffice; there is a need for 
international, uniform regulation. 
 

                                                           
5 Baasch Andersen, chapter I.1. See also  Sacco, Langue et droit, in Italian National Reports, p. 1 and Castronovo , Carlo who 
comments Principles of European Contract law in Vita notarile 2000, I, p. 1193: Ȉla lingua prescelta tende a costringere i 
concetti e le categorie negli stampi ad essa propri, sicchè il rischio è quello di adottare gli istituti giuridici che costituiscono il 
prodotto di quella lingua sul piano del diritto. Dall'altro, se per evitare tale inconveniente si adotta un linguaggio 
giuridicamente inusitato, si rischia di costruire figure incomprensibili per gli stessi giuristi che quella lingua hanno sempre 
avuto quale lingua giuridica madre. Si tratta allora di non diventare prigionieri della lingua nella quale si formula il disposto 
normativo limitandosi a riprodurne gli istituti giuridici che le sono propri originariamente, senza dare vita però a qualcosa che, 
in quanto magari diverso, se diverso deve essere, dall'istituto che in quella lingua ha trovato finora espressione, sia un prodotto 
di sintesi come i prodotti chimici che non hanno uguale nella realtà naturale, cioè una figura che finisce con il non avere molto 
senso giuridico.» 
6 Popper compared two types of researchers: critic is the one who studies new discoveries to be able to see prevailing theories in a 
new light, while neurotic is the one who studies new findings only to strengthen one's own outlook.   
7 Use of untranslatable civil law concepts was one of the reasons why the predecessor of the CISG was rejected by common law 
world. 
8 Honnold, Journal of Law and Commerce, p. 207 



Nordic Journal of Commercial Law, issue 2003 #1 
 

 
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Considering that unification of the law of international trade promotes certainty of law and 
hence the circulation of goods and wealth, it's not surprising that through the ages there have 
been numerous attempts to uniform the laws regulating international trade, based on the idea 
of creating a transnational body of norms capable of beating the worst enemy of the merchants: 
the barriers constituted by national legislations.9 
 
Since the creation of an internationally accepted convention in the field of international trade 
required world-wide participation, the United Nations Commission for International Trade 
Law (hereinafter the UNCITRAL) was established 1966 to revise the material concerning 
international trade. This body had its first session in 1968; in its first decade UNCITRAL made 
notable progress in preparing uniform international rules for arbitration, carriage of goods by 
sea, negotiable instruments and the sales of goods. This progress was analyzed in a symposium 
issue of the American Journal of Comparative law. 10  
 
One of the formidable efforts of UNCITRAL to unify international commerce was The 
Diplomatic Conference of Vienna, held from 10th of March to 11th of April 1980. Sixty-two 
states and eight international organizations participated in the conference. At the end of the 
conference the draft of Convention on Contracts for the International Sale of Goods (the 
CISG), was approved unanimously.11 However, the Convention did not enter into force, even 
in the first Contracting States, until 1.1.1988, when the requirements of becoming effective 
were met. 
 
However, it should be noted, that in spite of the widespread adoption12 of the CISG, the 
application of its predecessors, ULIS13 or ULF14, is not completely excluded: they can still be 
applied even between the Contracting States if the CISG does not apply.  
 
When Ernst Rabel, a noted German jurist, in the course of preparing the first drafts for a 
uniform sales law, compiled and analyzed the legal rules regulating the seller's obligation with 
respect to the quality of the goods sold, he came to the conclusion that, while these are practical 
questions of everyday commerce, to the lawyer they are full on unresolved difficulties. The 
irregularities and lack of clarity were essentially caused by the irrational survival of a doctrine 
rooted in antiquity. Subsequently, Rabel uncovered the roots that are the Roman, Anglo-
America and German laws. He also exposed the common core of all legal systems: that the 
seller shall assume the responsibility that the goods sold conform to the contractual agreement. 
The seller's obligation and liability, therefore, are not derived from any special warranty nor is 
he always liable for certain objective characteristics of the goods sold. With this opinion Rabel 
subsequently shaped the further development of German law, even though it is under attack 

                                                           
9 Ferrari, p. 5 
10 Honnold, p. 51 
11 Ferrari 1998, p. 6 
12 The CISG has been ratified by 62 states and this makes it one of the most successful uniform international conventions to 
date. The Contracting States are: Argentina, Australia, Austria, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Burundi, 
Canada, Chile, China (PRC), Colombia, Croatia, Cuba, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Finland, France, 
Georgia, Germany, Ghana, Greece, Guinea, Hungary, Iceland, Iraq, Italy, Kyrgyzstan, Latvia, Lesotho, Lithuania, Luxembourg, 
Mauritania, Mexico, Mongolia, Netherlands, New Zealand, Norway, Peru, Poland, Republic of Moldova, Romania, Russian 
Federation, Saint Vincent and the Grenadines, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syrian Arab 
Republic, Uganda, Ukraine, United States of America, Uruguay, Uzbekistan, Venezuela, Serbia-Montenegro (formerly 
Yugoslavia) and Zambia. 
13 Uniform Law on International Sales, The Hague 1964 
14 Uniform Law on the Formation of Contracts for the International Sale of Goods, The Hague 1964 



Nordic Journal of Commercial Law, issue 2003 #1 
 

 
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again. It laid also the basis of the first drafts of the later ULIS. Nothing describes this basic 
principle better than the statement by Lord Justice Brett 1877: « The governing principle is that 
the thing offered or delivered under a contract of purchase and sale must answer the 
description of it which is contained in words in the contract, or which would be so contained if 
the contract were accurately drawn out.» 15  
 
2.1.1 The position of the CISG in respect to national laws 

In general, the CISG takes precedence over the law of the Contracting States but there are cases 
where it recedes in favor of individual regulations of certain States, either by virtue of the CISG 
directly, or by virtue of a reservation made by a contracting State. In the latter case, the 
consequences of a declaration of reservation are only, according to a widely held opinion, in the 
non-application of the Convention to the affected contracts. It is in the first case that the rules 
of a particular State are positively called to apply in lieu of the stipulations of the Convention, 
i.e. the prescriptions of the lex fori. Above all, the CISG may be superseded, pursuant to its 
Articles 90 and 94, by national laws.16   
 
A good illustration of the linkage between the Vienna Convention and national law is provided 
by the law of the United States of America. The Convention is part of the federal law of the 
U.S.A. and, as such overrides Uniform Commercial Code, which is state law in the States 
which have given effect to it, 17 except if the parties have excluded the application of the 
Convention in whole or part18 or in so far as a particular topic is not regulated by the 
Convention. These topics include important parts of Article 2 of the UCC - this is the Article 
dealing with Sales - such as the special trade terms and the provisions on passing of title, 
reservation for security and good faith. The same relationship exists between the CISG and 
other national systems of law. It will therefore be necessary in many cases to ascertain the 
national law governing the international sales contract.19  However, the crucial difference 
between the two must be borne in mind: the Convention is a code applicable to sale of goods. 
The UCC is a collection of codes and one of these is a sales code. The UCC also contains rules 
on letters of credit, methods of perfecting security interests in goods and other commercial 
subjects; some of which can also be relevant to sales of goods.20 
 
While the ULIS is intended to be a self-contained code with regard to the topics regulated by it, 
and expressly excludes the rules of private international law, the draftsmen of the Vienna 
Convention    were aware that measures of conflict avoidance can reduce the dangers of a 
conflict of laws but cannot completely exclude them. For this reason they have linked the CISG 
with national systems of private international law. 
 
 

                                                           
15 Galston - Smit, 6-20 
16 Enderlein - Maskow, p. 11 
17 These are all USA States and jurisdictions, except Louisiana. The effect is that the Vienna Convention is law in Louisiana, 
but Article 2 of the UCC is not.   
18 By virtue of Art. 6 of the Convention. If the parties adopt in their contract the law of a Contracting State, their adoption 
would include the adoption of the State's private international law and they would then again adopt the Convention; if they 
wish to exclude the Convention, they have to adopt the domestic law of the Contracting State. Thus, a choice of law clause in 
favour of the law of New York makes the Convention applicable, but a choice of law clause in favour of New York  law 
excluding the CISG does not have this effect.  
19 Schmitthoff's Export Trade, p. 688 
20 Kritzer, p. 6 



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2.2 Comparing the ULIS and the CISG 

This linkage between the CISG and national laws occurs in two respects. First, CISG, like the 
Uniform Sales Law, does not regulate all incidents of the international sales transaction. It does 
not regulate: 

a)  the special trade terms for the delivery of goods and the fixing of the price, and 
b)  passing of the title of goods.21 

The reason for exclusion (b) is that the regulation of the passing of title in the various legal 
systems is so different that a uniform rule could not be established. In addition, the 
Convention does not regulate the law governing the alleged invalidity of a contract on general 
grounds, such as fraud, misrepresentation, incapacity and so on. Product liability is likewise not 
regulated by the Convention. 
 
Secondly, the CISG contains an express reference to national systems of private international 
law for the filling of gaps in the Convention. Art. 7(2) provides: 

«Questions concerning matters governed by this Convention not expressly settled 
in it are to be settled in conformity with the general principles on which it is 
based or, in the absence of such principles, in conformity with the law applicable 
by the virtue of the rules of private international law. « 

 
Every convention which does not constitute an exhaustive source of its subject, but regulates 
only certain issues of it excluding others, can easily give rise to problems concerning the precise 
meaning of its provisions and to problems concerning necessity of filling the gaps that 
inevitably appear as a result of an incomplete regulatory structure. These issues may arise in 
relation to any international convention, but they are most accentuated in the uniform sales 
law as resulting from the Vienna convention, since such issues generally arise in proportion to 
the number of legal systems represented by the various Contracting states.22 
  
Whereas ULIS has been adopted in the form of uniform law which contracting states, adhering 
to the special conventions of introducing the law to their national legal system, are bound to 
incorporate into their national law, the CISG has been shaped in the form of convention. In 
one document, it contains rules governing the relations between parties to contracts of sale as 
well as the international law instruments to put them into force. The CISG thus follows a new 
trend in the formal arrangement of a universal standardization of law that was already 
employed in the conventions on prescription, agency, factoring and leasing. Prevailing opinions 
also expect meritorious rules of a contractual convention to be incorporated into the domestic 
law of the Contracting States, so that they become binding on their legal subjects. Yet there is a 
difference with uniform laws insofar as this incorporation elucidates the international character 
of the respective rule, underlines its special position in domestic law, and furthers an 
interpretation and application, which is aimed at standardization of law. Consequently, it aims 
at an international harmony of decisions and represses a legal practice coined with national 
concepts, to which different jurisdictions tend to lean towards in the case of uniform laws. 23 
 
An apparent expression thereof is that the use of the convention form provides, in cases of 
discrepancies, for an interpretation pursuant to the authentic text and not according to a 
translation into another language. Incorporation into domestic law is effected by promulgating 
                                                           
21 
22 Ferrari, Uniform Interpretation of The 1980 Sales Law, p. 4 
23 Enderlein - Maskow, p. 8 



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the adopted convention and not by enacting a special law. The strengthening of the 
international character of contractual norms may even be more effectively achieved, if one 
dispenses with the auxiliary construction of integration into domestic law, and rather proceeds 
from the assumption that domestic law renounces its own regulations and their use for the 
benefit of the convention and the extent of its scope. When a state becomes party to a 
convention containing authoritative rules for its legal subjects, we would prefer to interpret that 
the rules become directly binding on its legal subjects as international rules. Such a 
construction is even favored whenever domestic law refers to international norms. This 
reference may clear up matters, however it does not seem to us a condictio sine qua non, for it 
implies making the direct application of international norms dependent on national law, a 
practice that still is widespread. However, this is not to be desired, for the very reason that it 
would lead to a situation where some countries apply international treaty norms as integral part 
of their domestic law system whereas other countries directly apply them as international law.24 
 
2.3 Interpretation of the CISG 

Since there is no supranational instance or Supreme Court before which international sales 
cases can be brought, the problems of uniformity must be solved in the domestic realm.25 The 
drafters of the CISG were aware of this problem, as evidenced by the fact that they inserted into 
the Convention provision designed to reduce the danger of diverging interpretations.26 
According to many of the legal writers who have dealt with the issue of interpretation of the 
CISG27, interpreting it one should always take into consideration that it is a result of 
international unification efforts that, unlike domestic statutes, was not elaborated with any 
particular legal system or language in mind. Thus, it has been suggested that it is necessary to 
read the CISG not through the lenses of domestic law but rather in an autonomous manner, 
which is why in interpreting the CISG one should not resort to the meaning generally attached 
to certain expressions within the ambit of a particular legal system.28  
 
Many commentators have argued, that even where the expressions employed by the CISG are 
textually the same as expressions that have a specific meaning within a particular legal system, 
they must be interpreted autonomously. However, still there are some expressions that an 
interpreter must interpret «domestically,» despite the negative effect that may have on the 
uniformity the drafters of the CISG wanted to achieve. One such expression is «private 
international law.» 29 Ferrari concludes that where the CISG makes reference to private 
international law, it refers to a domestic concept of private international law. More particularly, 
the CISG refers to the private international law of the forum. One important conclusion can be 
drawn from this: the obligation to interpret the CISG in an autonomous manner is not 

                                                           
24 Enderlein - Maskow, p. 9 
25 Although a tribunal monitoring its application would be preferable, the uniformity of the CISG would seem well protected to 
a certain degree. See Baasch Andersen, 2.1.2  
26 It has often been stated that it is only possible to reduce the danger of diverging interpretations; it is not possible to eliminate 
them altogether. See also Lookofsky in «Consequential Damages in Comparative Context» 1980, p. 294 
27 Several papers have been written on the interpretation of the CISG. See among others M.J.Bonell, «L'interpretazione del 
diritto uniforme alla luce dell'art. 7 della convenzione di Vienna sulla vendita internazionale», Rivista di diritto civile (1986/II), 
221 and S.Cook, «Note, The Need for Uniform Interpretation of 1980 United Nations Convention on Contracts for the 
International Sale of Goods», p.50 
28 Ferrari, Uniform Law Review 2001-1, p. 204. See also Ferrari in Diritto e procedura civile, p. 282 
29 Even though the expression »private international law» is employed only twice by the CISG its importance should not be 
underestimated. This importance is due to the fact that the references to the de quo relate to the CISG's sphere of application, 
as well as to its gap-filling, two of the most relevant issues under the CISG. See Ferrari, Journal of Law and Commerce, 17, p. 
250. 



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absolute. This conclusion causes a new problem, that is, how does one identify the concepts 
that are not to be interpreted autonomously? Unfortunately, the CISG does not offer any 
guidance, as it does not offer any guidance on the different, albeit related issue of how to 
determine which interpretation should be preferred when the Convention itself gives rise to 
different autonomous interpretations. One must therefore conclude that the CISG's 
autonomous interpretation cannot, by itself, guarantee uniformity.30  
 
The requirement of autonomous interpretation was expressly held by an arbitral award of the 
International Chamber of Commerce, which did not overtake the distinction made in French 
domestic law between non-conforming delivery and garantie de vîces caches.31 It may be noted, 
however, that the apparent or hidden nature of the defects, though not leading to the same 
results as in French domestic law, seems to play an important role in case law regarding 
examination and notice requirements. 
 
The independence of the CISG concept of lack of conformity has been affirmed also by the 
German Supreme Court: A German dealer in chemical products concluded four contracts for 
the purchase from a Dutch company of cobalt sulphate with specific technical characteristics. 
The buyer refused to pay the price alleging, inter alia, that he was entitled to avoid the contracts 
because the goods were of a kind different from that agreed upon and therefore the delivery 
amounted in fact to a non delivery. The Court did not follow the buyer's reasoning, which was 
clearly aimed at taking advantage of the subtle distinction drawn by German courts between a 
defect and an aliud pro alio. It stated that the CISG, contrary to German domestic law, does not 
make any difference between delivery of goods of a different kind and delivery of non-
conforming goods.32 The court's refusal to apply a distinction, which «plagues» not only 
German law, but also that of other countries, is to be appreciated. This is all the more so as a 
previous decision of a German Oberlandesgericht had cast doubts on the correct use by courts of 
the concept of non-conformity.33 The Bundesgericht decision does not rule as on whether a 
delivery of goods, which are totally different from the ones indicated on the contract, should 
still be subject to the conventional rules on lack of conformity. It may be that in such extreme 
situations the courts would resort to other remedies such as the ones provided in case of 
mistake.  
 
2.3.1 Linguistic problems 

As already anticipated in the beginning of this study, the interpretation and application of a 
legal text is strictly dependent on its linguistic expressions. Legal translation should therefore be 
considered as a relevant prerequisite for the introduction and application of uniform law texts 
in those countries whose language does not happen to be the official language of the 
international instrument to be applied. Comparative law scholars have often stressed the 
difficulties and risks inherent in legal translation, that go far beyond the linguistic field, to 

                                                           
30 Ferrari, CISG Case Law: A New Challenge for Interpreters, p. 253 
31 ICC Court of Arbitration, n. 6653/1993, Journal de Droit International, 1993, p. 140. The decision has been revised on 
other grounds by Cour d'Appel de Paris, 6.4.1995 
32 BGH 3.4.1996, ZIP, 1996, 1041. The buyer's contention in this case was clearly unfounded, because the seller had delivered 
the agreed upon chemical substance, though not conforming to the contractual specifications. This fact, however, does not 
diminish the importance of the decision. No undue burden is put on the buyer by requiring notice in all cases when the goods 
do not correspond to the contract. See Veneziano. 
33 OLG Düsseldorf 10.2.1994, 6 U 119/93. In this case a part of the delivered textiles (1/4) were of a different pattern and 
color than the one agreed upon. The court ruled that the delivery of a false color was to be treated as a non delivery, and that 
the seller could not declare the contract avoided since he did not fix an additional time for performance. Veneziano, p. 42 



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range toward legal comparison, by reason of the relativity of the legal terminology employed in 
the various legal systems. 34 Notwithstanding these difficulties it is of vital importance that an 
exact translation be achieved, as an improper one may certainly affect the operation of uniform 
law and impair the uniformity itself of the rules adopted. For example, the first unofficial 
Italian version appears in respect of various points to be inappropriate and misleading, probably 
as a result of an unnecessarily technical approach to the translation process. A new and more 
correct Italian version is now available. 
 
2.4 The problems arising out of interpretation 

From the obligations to «have regard to the Convention's international character,» 35 and to 
have regard «to the need to promote uniformity in its application» legal scholars have deduced 
that whoever has to apply the Convention, must make efforts to adopt solutions which are 
tenable on an international level, solutions which can be taken into consideration in other 
Contracting States as well. The more various concepts are interpreted autonomously, the more 
likely it is to achieve the desired result. On the other hand, some legal writers have interpreted 
the aforementioned obligation to mean that in applying the CISG, courts must take into 
account relevant decisions of other States. However, requiring interpreters to consider foreign 
decisions can create practical difficulties: foreign case law cannot easily be retrieved and is often 
written in a language unknown to the interpreter. 36  
 
2.5 Steps taken to overcome obstacles 

In order to overcome the obstacles that tend to hamper the uniform application of the CISG, 
various steps have been undertaken. There has been a great progress in the accessibility to 
international case law with the arrival of databases on the Internet and collections of case law 
such as CLOUT37 and UNILEX although this progress is primarily made for the legal systems 
of Central Europe and United States. Nevertheless, the need of updated database of case law 
has been recognized elsewhere, too.38 However, the knowledge of foreign case law does not per 
se suffice to guarantee uniformity, just as knowledge of domestic case law does not avoid all 
interpretative problems within a particular jurisdiction, also because in the majority view 
foreign case law has a persuasive value only.39 The solution of another kind, proposed by Bonell, 
is that UNCITRAL should promote a creation of a sort of «Permanent Editorial Board». The 
Board should be composed only of representatives of States that have actually ratified the 
Convention, it being understood that the smaller States, particularly those belonging to the 

                                                           
34 See also opinion of Lord McEvan, in the cause David Frape against Emreco International Ltd. 
35 Some courts have indeed referred to this obligation. For instance, a Swiss court decision stating, «in interpreting CISG, one 
has to have a particular regard to its international character. The starting point of any interpretation must me the Convention 
itself, not domestic law» as well as an Italian Tribunal (12.7.2000 Tribunale di Vigevano). Reference to the need to avoid 
interpreting the Convention in the light of domestic law may be found in some US cases as well: «although the CISG is similar 
to the UCC with respect to some provisions, it would be inappropriate to apply the UCC case law in construing contracts 
under the CISG», in Claudia v. Olivieri Footwear Ltd., 1998 Westlaw 164824. 
36 Ferrari, Uniform Law Review 2001-1, p. 205. See also Honnold's view later in this study.  
37 CLOUT- Case Law Of UNCITRAL Texts 
UNILEX- database edited by Prof. Bonell, from the Italian National Research Council (CNR)  
38 As Boggiano, a professor of law, University of Buenos Aires, states, » In the interpretation of uniform rules the main purpose 
of promoting international uniformity should be given serious consideration. In case law and practice this aim is nevertheless 
disregarded or at least not given adequate weight. Full treatment of the whole case law and practice on uniform law in Latin 
American countries would require an enormous apparatus that would exhaust the resources and powers of a single scholar, but 
such an exhaustive piece of work should be carried out if a vivid and realistic picture and not merely a summary of general rules 
is desired. Such an enquiry is becoming ever more necessary and it is far from being futile.»   
39 Ferrari, Uniform Law Review 2001-1, p. 206 



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same geographical region, may well appoint a common representative. Such a composition of 
the Board would ensure on the one hand that only those States which have actually ratified the 
Convention play an active role in its implementation and, on the other, that equal attention be 
given to each national experience without privileging any country or region for political, 
economic or even purely linguistic reasons. Each member of the Board should be responsible 
for gathering judicial decisions and bibliographic material relating to the Convention from his 
own country or region. The Board as a whole should be concerned with the delicate task of 
reporting material thus collected. It should then proceed to a comparative analysis of the 
material collected.40   
 
It has been even suggested that a supranational jurisdiction under the auspices of UNCITRAL 
would be established that would act as a supervisor of the proper interpretation of the 
Convention and settle international disputes in a neutral setting  with objective and 
experienced judges. This idea has played a key role in the debate for a long time but is now 
perhaps more a possible option considering the present political climate. Another less 
ambitious possibility would be to confer on UNCITRAL the power to render advisory opinions 
in matters regarding the application and interpretation of the conventions elaborated under its 
auspices.41 
 
2.6 CISG-Contract  

Interpretation of a contract means in the present context an activity that aims at confirming 
what the contracting parties actually did agree upon. If an agreement has parts that are unclear, 
those parts are given a meaning through the interpretative process. Interpretation is needed 
when the parties' views regarding respective obligations differ and thus have to be confirmed by 
a third party. Interpretation has to be differentiated from the gap-filling that, in its turn, aims at 
finding a reasonable solution for the situations that are not contractually agreed upon. In 
practice the task of the interpreter is somehow more difficult than it may seem; it is up to him 
to define the borderline between the two. The contract has to be interpreted before we can take 
a position as regards the presence of the gaps. Moreover, the two activities may appear to be so 
similar with each other that, as a result, it is difficult to determine which one is needed. On the 
one hand the background material for gap-filling may be scarce to the extent to require 
interpretation but on the other hand it may appear that the interpreter is forced to rely on the 
complementary norms applicable to the contractual relationship.42 
 
The interpretation should not be separated from the other phenomena of contract law, since  
interpretation usually takes place in the context of a broader decision-making.  Thus, the 
interpretation should not be limited to the material issues of the contract but include also other 
considerations, such as whether the contract was ever concluded, i.e. does a valid contract exist 
that may be interpreted.  
 
2.6.1 Approaches to interpretation 

Alternative approaches to interpretation are the objective and the subjective approaches. The 
former  looks for a natural interpretation taking as a starting point the expressions of common 
use, the term «common use» including also the specific language used on a particular 

                                                           
40 Bonell, p. 242 
41 Kaczorowska, p. 129 
42 Oikeustoimilaikitoimikunnan mietintö 1990:20 



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professional sector. The latter, instead, starts from the parties' intention: the expressions are 
seen as reflecting parties' common intention and the purpose of the agreement. Many prefer 
this latter approach since it conforms better with the principles of freedom of the contracting 
and the autonomy of the parties' will. Considering that the parties are free to decide with whom 
to contract and on which conditions, it is natural to think that they are also free to decide 
which expressions to employ. Those who object the use of subjective method claim that the 
interpretation is most needed exactly when the common intention is unclear and thus the subjective 
approach does not offer a real answer to the questions. Those who defend the objective method 
allege that by employing the ordinary meaning of the words, a greater certainty of contractual 
relationships is achieved, also because the contracts often have an effect to undetermined group 
of third parties as well. This approach also excludes the uncertainty derived from speculations 
on what the contracting party actually meant by employing a certain expression. Third parties' 
position counts also because some rights are transferable and the transferee needs to know the 
rights and obligations deriving from his new position.43  
 
2.6.2 Interpretation of a contract of sale 

It has been suggested, that when interpreter applies the Finnish Sale of Goods Act, the 
interpretation of a sales contract should be done respecting the same principles that are 
respected when interpreting any other type of contract. In any event, it may be prudent to take 
into account the principles applicable to the CISG, whether or not the Convention applies. The 
Nordic countries decided that the Part II of the Convention would not be applicable; the most 
likely reason for this having been the need to keep the rules governing the formation of the 
contract similar to every type of the contract i.e. not creating a different regime for the contracts 
of sale of goods. Anyhow, the CISG contains some important principles concerning the 
interpretation and application of the contract. CISG Art. 8 states that the contractual 
expressions have to be interpreted in conformity with the intention of the party, unless the 
counterparty did not know it or could not have been aware of it, the purpose of the intention 
being the discovery of the parties' common purpose. The awareness of the counterparty's 
intention - in this context - should be understood as a common purpose. It follows that the 
party who does not accept the purpose of the counterparty must expressly draw other's 
attention to this fact. This is an expression of an underlying obligation of loyalty towards the 
other party.44 
 
The situation in the U.K. is that, one cannot necessarily draw a conclusion that all their words 
have become part of the contract based on what the parties said. Their statements may be 
classified either as terms of the contract or as «mere representation.» The distinction was long of 
great practical importance, but new developments have reduced its effect without lessening its 
conceptual significance. If a statement is a term of the contract, it creates a legal obligation for 
whose breach an appropriate action lies at common law. If it is a «mere presentation,» the 
position is much more complicated. It is clear that, if a party has been induced to make a 
contract by a fraudulent misrepresentation, he may sue in tort for deceit and may also treat the 
contract as voidable. But until recently it was believed to be principle of the common law that 
there should be «no damages for innocent misrepresentation,» and that, in this context, 
«innocent» meant any misrepresentation which was not fraudulent. In the nineteenth century, 
                                                           
43 In the judiciary interpretation certain principles are recalled, in order to favour a proper position. In the doctrine various 
principles have been broadly analized: the principles may be roughly divided into two categories, namely linguistic and judicial 
principles. 
44 Routamo - Ramberg, s. 30 



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equity indeed allowed the right of avoidance to a party who had been induced to make a 
contract by such an «innocent» misrepresentation, but this remedy was limited in a number of 
ways. By the Misrepresentation Act 1967, representees acquired a remedy that in most cases will 
be preferable to an action of negligence. Section 2(1) of this Act in effect gives a right to 
damages to anyone induced to enter a contract by a negligent misrepresentation, and casts 
upon the representor the burden of disproving the negligence. But where a statement is made 
neither fraudulently nor negligently, the injured party can still obtain damages only by showing 
that if forms part of this contract. Contractual cartography remains important.45 
 

3 THE GOODS  

3.1 The object of the sales contract: definitions of »goods» in the CISG 

The Convention does not define «goods» but some of the exclusions specified in the Art. 246 
and other provisions of the Convention provide guidance for construing this basic concept. It is 
clear that the «goods» governed by the Convention must be tangible, corporeal things, and not 
intangible rights like those excluded by Art. 2(d): stocks shares, investment securities and 
instruments evidencing debts, obligations or right to payment. The point is that these 
documents represent intangible rights - a claim for payment or for receiving dividends or other 
payments from an enterprise.47 Possible dispute over whether electricity is tangible (a quantum) 
or intangible (a wave) was avoided by the exclusion of electricity. On the other hand, a sale of 
gas is within the Convention; a motion to exclude gas was defeated.48 The classification of 
computer software has led to controversy; some software seems difficult to distinguish from an 
exceedingly compact book or photograph record. Here, as in other borderline areas, it seems 
prudent to state in the contract whether the Convention applies. The conclusion that «goods» 
refer to tangible, corporeal things means that sales of patent rights, copyrights, trademarks and 
«know-how» are not governed by the Convention.49 The Convention does not address certain 
questions that arise frequently in the area of sales law; it does not contain provisions on letters 
of credit, methods of perfecting security interests in goods and other commercial subjects, many 
of which can be relevant to sales of goods.50   
 
3.2 The meaning of «goods» in the U.K. 

Until the advent of the Sale of Goods Act of 1893, English sales of goods was, for the most 
part, contained in a vast body of case law. The provisions of the 1893 Act remain the basis of 
English sales of goods law, although that Act has now been re-enacted in the Sale of Goods Act 
1979 and been consolidated with more recent law relating to the sale of goods, particularly, 
some parts of the Misrepresentation Act of 1967, the Unfair Contract Terms Act of 1977 and 
Sale and Supply of Goods Act 1994 and Sale of Goods Act (Amendment) 1994. There is a 

                                                           
45 Furmston, M.P., p. 127 
46 Art. 2: »This Convention does not apply to sales: (a) of goods bought for personal, family or household use, unless the seller, 
at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for 
any such use; (b) by auction; (c) on execution or otherwise by authority of law; (d) of stocks, shares, investment securities, 
negotiable instruments or money; (e) of ships, vessels, hovercraft or aircraft; (f) of electricity. 
47 Art. 3(2) takes a similar approach in excluding the contracts in which the preponderant part of a party's obligations consists 
in the supply of labor or other services. See Honnold, p. 101 
48 Delegates were clear that »gas» constituted »goods.» Also sale of oil is covered. 
49 Honnold, p. 101 
50 Kritzer, p. 5 



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13 

considerable mass of case law interpreting the Act of 1893, much of which remains relevant to 
the interpretation of the Act of 1979. 51 
 
The enactment of The Uniform Laws on International Sales Act introduced the two Uniform 
laws adopted by the Hague Conference of 1964 into the law of United Kingdom. The Act of 
1967 was activated and the two Uniform Laws came into force in the United Kingdom on 
August 18, 1972. 52 
 
The sphere of application of the CISG is different from that of the Uniform Laws. While the 
latter are intended in principle to all international sales but enable an acceding State to restrict 
their application to sales contracts between parties who have their place of business or habitual 
residence in Contracting States, the Vienna Convention - realistically - restricts its application 
to contracts between parties who have their place of business in different Contracting States, or 
to cases in which the proper law of the contract is that of the Contracting State. 53 
 
The term «goods» is defined as including «all personal chattels other than things in action and 
money.» The term includes «emblements, industrial crowing crops, and things attached to or 
forming part of the land which are agreed to be severed before sale or under contract of sale.» 
The definition is fairly extensive but there are nevertheless some things that do not, or may not 
fall within this definition, for instance items of intellectual property and company shares. The 
question as to whether or not the sale of computer software should be treated as a sale of goods 
does not admit a simple answer. Much of software is sold over the counter in stores in the same 
way as books and records. If there is a defect in the medium carrying the program, there is no 
difficulty in holding that there is a breach of the quality warranties of the Sale of Goods Act. It 
does not seem to push this analysis much further to say that if a malicious person has infected 
the software with a virus which damages the data and other matter stored in the purchaser's 
computer, the seller should be liable under the Sale of Goods Act. In the first place, that is a 
way of transferring liability to the person ultimately responsible, namely the software house, 
whom the shop supplying the software will no doubt sue in turn. Secondly, the situation is 
analogous to that where, for example, an infected animal spreads disease through the 
purchaser's herd. But other software is either specially written for the customer, or requires 
extensive work to be done to adapt it to the customer's needs. There is no continuing 
relationship between the parties, which may eventually require the customer to have access to 
the source codes if the supplier goes into liquidation or is otherwise unable to continue to 
develop the program for the customer's needs. The sale of goods analogy, which presupposes a 
particular point in time when the parties can be said to have »sold the goods», seems 
inappropriate. Clearly, if there are defects in the underlying product, the medium of an «off-the-
peg» program which is to be adapted, then these can be dealt with under the Sale of Goods Act. 

                                                           
51 Atiyah - Adams, p. 1 See also the comments of Tudway, in Developments in English Law affecting contracts for the 
international sales of goods,  p.66 
52 The Order in Council which gives effect to the two Uniform Laws provides that the Uniform Law on Sales shall only apply if 
it has been chosen by the parties to the contract. (This regulation was admitted by the 1967 Act. The United Kingdom was 
entitled to restrict the scope of application of the Uniform Law on Sales in this manner by virtue of Art. 5 of the First 
Convention). The Uniform Law on Formation has only ancillary character and applies only to contracts to which the Uniform 
Law on Sales is applied. While such a restriction considerably reduces the usefulness of the Uniform Laws, it might lead to a 
difficulty if one party to the contract is resident in the United Kingdom and and the other in a country in which the Uniform 
Laws apply automatically. This raises a problem of private international law, namely that it has to be determined whether the 
applicable law of the contract is English or foreign law. In the latter case, the Uniform Laws apply to an English party who has 
not adopted them in contract, but in the former, they apply only if adopted by the parties.  
53 Schmitthoff's Export Trade, p. 687 



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14 

But the contract to supply software adapted to customer's requirements will usually entail more 
than a mere undertaking on the part of the supplier to use reasonable care and skill. 54 The 
seller's assertions about the performance of the software will often be crucial. These 
representations may themselves, of course, give rise to a claim for damages for material 
misrepresentation. 
 
It is not wholly clear whether the term «goods» could cover human blood for transfusion or 
other similar items not ordinarily thought to be the subject of commerce. Another point that 
requires comment is the latter part of the statutory definition. Since the products of soil must 
always be sold with a view to their ultimate severance «under the contract of sale,» it appears 
that, whether or not they are also land within the meaning of the Law of Property Act 1989, 
they are now always goods within the meaning of the Sale of Goods Act. It is, however, still 
necessary to distinguish the products of the soil or «things attached to or forming part of the 
land» on the other hand, from the actual land itself, or interests therein, on the other. The sale 
of sand from a quarry, for example, is not a sale of things attached to or forming part of the 
land, but a sale of an interest in the land itself.55 
 
3.2.1 Different types of goods in the U.K. 

The subject matter of the contract of sale may be either existing goods owned or possessed by 
the seller, or future goods, or a spes, or chance. Existing goods may be either specific or 
unascertained. Future goods include goods not yet in existence, and goods in existence but not 
yet acquired by the seller. It is probably safe to say that future goods can never be specific goods 
within the meaning of the Act. This certainly seems to be true of those parts of the Act dealing 
with the passing of title. However, if sufficiently identified, future goods may be specific goods 
in some cases. A sale of 200 tons of potatoes to be grown on a particular piece of land was held 
to be a sale of specific goods, despite the fact that they were not existing goods, for the purposes 
of the common law rules of frustration.56  
 
The sale of a spes - chance - must be distinguished from the contingent sale of future goods, 
though the distinction is not so much as to the subject matter of the contract but as to its 
construction. Thus it is possible for a person to agree to buy future goods from a particular 
source and to take a chance) or, in the language appropriate to the sale of goods, the risk) of the 
goods never coming into existence. For example, a person may agree to buy whatever crop is 

                                                           
54 Atiyah - Adams, p. 47 In the Saphena Computing Ltd v. Allied Collection Agencies Ltd the purchasers sought damages for failure to 
supply software which was reasonably fit for the purpose for which it was required. It was held at first instance that there was 
implied term as to the fitness of the software for the purpose for which it was required, and that this obligation had not been 
fulfilled by the time the parties terminated their relationship, but the effect on the termination agreement was, inter alia, that 
the plaintiffs were not required to carry out further work on the software, and had to make available to the defendants the 
source codes in order that the defendants might make it reasonably fit for the purposes specified. The Court of Appeal upheld 
this decision. In New South Wales it has been held that a supply of a package of conputer hardware and software together is a 
sale of goods within the Act for the purposes of the implied terms as to quality and fitness, so these terms apply not merely to 
physical objects, but to the software programs contained in them.  
55 Atiyah - Adams, p. 49. In Morgan v. Russel (1909 1 KB 357) it was held that the sale of  cinders and slag, which were not 
definite or detached heaps resting on the ground, was not a sale of goods but a sale of an interest in land and, therefore, the 
Sale of Goods Act did not apply. Similarly, in the Australian case of Mills v. Stockman (1966-67 116 CLR 61) a quantity of slate 
which had been quarried and then left on some land as waste material for many years was held to be part of the land, and not 
goods. The slate was »unwanted dross cast on one side with the intention that it should remain on the land indefinitely, and, by 
implication, that it should form part of the land. 
56 Failure of the crop was thus held to form the basis for avoidance of the contract. 



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15 

produced from a particular field at a fixed price. 57 There are at least three possible 
constructions: 
 

1. It may be a contingent sale of goods within the section 5(2)58 in which case if the crop 
does not come into existence the contract will not become operative at all and neither 
party is bound. 

2. Alternatively, it may be an unconditional sale that is the seller may absolutely undertake 
to deliver the goods, so that in effect he warrants that there will be a crop in which case, 
if there is no crop, he will be liable for non-delivery. 

3. Thirdly, it may be a sale of a mere chance, that is the buyer may take the risk of the crop 
failing completely, in which case the price is still payable. 59 

 
3.3 «Goods» in Finnish legislation 

The current law regulating commercial relationships in Finland is Sale of Goods Act 
(hereinafter FSGA), enacted 1987. Before it came into force, the only general provisions 
available dated as far as 1734. Provisions relating to sales of specific goods were of course 
enacted throughout the years but many important issues were not regulated at all. At this point 
it has to be noted, however, that even in cases of the lack of a proper, up-to-date statute law, we 
can hardly speak of a total gap. Since the very beginning of the existence of the Finnish doctrine 
of the jurisprudence, a strong reference has been made to other Nordic countries, due to the 
cultural and social similarities in these states. As regards the references to past writers in 
general, it has to be borne in mind that even though new rules of law are enacted and the old 
ones become non-effective, the ideas lying underneath do change slowly. The core of the law, 
the basic principles of just and unjust, defective and effective remain long unchanged.  
 
Earlier, the rules regarding lack of conformity were scarce; the old Sale of Goods Act (OSGA) 
1:4 stated that:  

«If the goods sold are later noted to be defective, and if it's lawfully proved that 
the seller was aware of it but still did not disclose it, shall the seller take the goods 
back and return the performance of the counterparty; and shall he also settle his 
damages. If the goods bear a defect not visible, which of neither seller nor the 
buyer was aware of, shall the contract of sale be void, and shall the parties 
withdraw the respective performances. If it was agreed that the buyer shall keep 
the goods whether or not they turn out to be better or worse than what was 
agreed upon, shall the contract remain valid anyhow.» 60 

 
This rule of law turned out to be rather problematic in practice; a situation where the rules 
concerning sale of movables were almost absent, raised a question whether those few existing 
rules were exhausting when it comes to determining the remedies in the case of defective goods. 
What followed was that it was alleged that the buyer could not claim for reduction of the price 
since the norms did not recognize it.  Furthermore, the scope of the application of the said rule 
has been under some discussions; some have claimed that the said rule is applicable only to the 

                                                           
57 Such a transaction comes perilously close to a gamble but, as the seller stands to gain the same amount in any event, it 
appears that the sale cannot be a wager within the Gaming Act 1845. 
58 Section 5(2): »There may be a contract for a sale of goods the acquisition of which by the seller depends on a contingency 
which may or may not happen.» 
59 Atiyah - Adams, p. 52 
60 There was also a specific rule concerning a sale of a horse: a trial of three days. 



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16 

sale of specific goods while the others alleged that it's applicable also to the sale of generic 
goods. 61  
 
The OSGA 1:4 took a negative approach; it described the situation where the goods could be 
considered defective. Given the scarcity of the rules of law, in order to obtain a more 
comprehensive idea of the concept, I find it appropriate to study the differing views in the 
doctrine of that time. According to Chydenius, the defect has to be of a kind that reduces the 
value of the goods or renders them less suitable for their ordinary purpose, in a manner that a 
reasonable man would not have committed himself to the contract. Hakulinen, instead, sees the 
goods defective whenever their value is reduced or their suitability to ordinary or contractually 
agreed purpose is reduced or extinguished. Kivimäki, on his part, sets the criteria otherwise: 
«The defect is understood as a factor that renders the goods non-functional, whether it is a 
material, structural or other kind of factor. However, also the lack of a feature may be 
considered as such, if the seller knew that the buyer expected the goods to bear that certain 
character and the lack of it actually renders the goods different from what was agreed upon.62 
 
This situation where Finland did not have an up-to-date Sale of Goods Act created a different 
set of problems. Without a proper written law, a Finnish party was in a weaker position from 
the beginning. The Finnish party was often forced to accept the other party's choice of law 
without a chance for negotiations. The Sale of Goods Act 1987 lifted the Finnish parties from 
their disadvantageous starting point and gave them equal bargaining powers compared to those 
of their foreign business partners.63 
 
Given that Finland has made a declaration to Article 92 that it is not bound by Part II of the 
Convention (Formation of the Contract), the parties have to pay attention to drafting the 
choice of law clause. It should be noted that the Part II of the Convention might still be 
applicable to the contract of sale in Finland if the rules of private international law lead to the 
application of the law of the country, which has ratified the CISG without an Article 92 
declaration.64     
 
The FSGA calls the object of the sale goods (tavara). The linguistic meaning of this word is a 
property which can be an object of an exchange on the market, and which can be assigned 
(tangibles). The term suits less to intangibles, such as rights. Some difficulties appear when the 
borderline between a contract of service and a contract of sale needs to be drawn. Supply of 
electricity is undisputedly considered a service. However, the rights based on such a contract 
may be object of the sales contract. Gas and water, instead are regarded as goods in the meaning 
of FSGA, according to their nature. More problematic are audiovisual electric transmissions. 

                                                           
61Godenhielm, p. 88. But see KKO 1948:II:187 where the court held otherwise. 
62 Aaltonen, p. 99 Considering different aspects of the seller's liability as regards the reduction of the value of the goods, it has to 
be borne in mind that the seller is not responsible of the effective commercial proficiency of the goods. 
63 When the different possibilities to ratify the CISG were explored, it was discovered, that even though it was important to 
develop domestic sales law in accordance with international trends, the CISG was not suitable to form a new Sales Law as such. 
The CISG was a compromise between the different legal traditions and it was essentially developed for the needs of 
international trade. While some provisions were seen as self-evident, others were seen to be too imprecise for the purposes of a 
domestic sales law. On the other hand, if a sales law would have provisions concerning both international sale of goods and 
domestic sale of goods, the differences between the two would be easily detected and understood. However, it was discovered 
that several provisions would have to be modified for the purposes of domestic sales, which would eventually lead to a complex 
law. It was also feared that the solution would arouse suspicion among the foreign traders that the domestic traditions influence 
the interpretation of the CISG. Kuoppala, Chapter 1.2.2.3.  
64 Kuoppala, Chapter 1.2.1 



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17 

On the other hand, the FSGA may be applicable even on the fields not covered by it, 
throughout the analogy. As regards computer products, the situation is more problematic, as we 
have seen above. There is no doubt that a computer falls to the category of «goods.» However, a 
computer does not work without its software. Usually the software is not actually sold, but a 
license to use it may be granted. Hence, the applicability of the FSGA is problematic since the 
applicability requires that the goods be handed over to the buyer. 65 
 
Usually the object of the sale exists at the moment of the conclusion of the contract. This is, 
however, not a necessary requirement. Also the goods that will come to an existence or can be 
determined only afterwards may be traded. It may well be that the buyer will in the end have 
nothing as a counterperformance; let us just think of a lottery ticket.66 
 

4 LACK OF CONFORMITY 

4.1 The CISG rules regarding lack of conformity 

The CISG Article 35 determines when goods are deemed to conform to the contract, although 
it doesn't cover third party claims or claims based on industrial or other intellectual property; 
the latter are governed by CISG Articles 41 and 42. CISG Article 35 largely corresponds to 
Article 33 ULIS. However, the wording of CISG Art.35 is substantially simpler and more 
precise than that of its predecessor. Article 35 of the CISG begins by stating the basic rule that 
the goods must conform to the requirements of the contract, whereas Art. 33 of ULIS includes 
the basic rule as a subsidiary, catch-all provision. Art. 35 of the CISG and Art. 33 of the ULIS 
differ as regards the classification of non-conformity in dogmatic terms. While under the ULIS, 
non-conformity of the goods automatically constituted a failure to fulfil the delivery obligation, 
under the CISG non-conformity of the goods has no effect on delivery, but gives rise to the 
buyer's remedies under CISG Art. 45.67 A further difference is to be found in Article 33 (2) of 
the ULIS, which declared immaterial discrepancies to be irrelevant. It was thought that such a 
rule is unjustified, if avoidance of the contract is possible only in the event of a fundamental 
breach of contract. 68 Article 35(3) of the CISG is based on Article 36 of the ULIS. However, 
the latter provision did not include a sale by sample or model within its terms. 69 
 
Under the ULIS the seller had not fulfilled his obligation to deliver the goods where he handed 
over goods which failed to conform to the requirements of the contract in respect of quality 
and description. However, under the CISG, if the seller has handed over or placed at the 
buyer's disposal goods which meet the general description of the contract, he has «delivered the 
goods» even though those goods do not conform to the contract in respect of quality and 

                                                           
65 Routamo - Ramberg, p. 14 
66 Routamo - Ramberg, p. 11 
67 Even Art 35 CISG noes not expressly treat delivery of different goods, it must be considered lack of conformity no matter 
how extreme is the deviation. See Schlechtriem 2, p. 67. Otherwise Bianca in Conformità dei beni e diritti dei terzi, p. 147, where 
he makes difference between the goods that do not conform to the description of the contract and the goods that are totally 
different than what was agreed upon.  
68 An Australian proposal that a provision corresponding to Article 33(2) ULIS should be included was rejected at the 
Diplomatic Conference. The Canadian delegation withdrew a proposal that the requirement for the goods to be fit for ordinary 
and particular purposes should be applicable only to sales made by professional sellers and that the criteria governing fitness for 
ordinary use should be clarified. See Schlechtriem, p. 275 
69 Schlechtriem, p. 275 



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18 

quantity. It should be noted, however, that, even though the goods have been «delivered», the 
buyer retains his remedies for the non-conformity of the goods. 70    
  
4.1.1 Practical importance of Art. 35 

The case law interpreting CISG Article 35 is scarcer than one would think; many decisions 
leave open the question of a defect and are solved on the basis of lack of examination or the 
notice of the non-conformity by the buyer or lack of evidence regarding those requirements. 
The limited number of cases is explained also by the fact that quite a few decisions concern 
requirements for avoidance of the contract.71    
 
In order to rely on a lack of conformity, the buyer must comply with articles 38 and 39 which 
concern the burden of examining the goods and of giving notice of the non conformity. The 
failure to comply means loss of right to invoke a lack of conformity, except if the seller knew or 
ought to have known of it and did not disclose it to the buyer (CISG Art. 40), or if the buyer 
was justified in not complying with the examination and notice requirements (CISG Art. 44). 
Furthermore, there is a cut-off period: after two years, the buyer cannot give notice even if a 
hidden defect is then discovered.72 When the buyer is entitled to rely on the lack of conformity, 
the whole set of remedies in the Convention may be invoked, provided that the conditions set 
forth for each of them are present: avoidance (CISG Art. 49), repair of substitution of goods 
(CISG Art. 49), reduction of price (CISG Art. 50), and in any case, damages (CISG Arts. 74-
77). 
 
CISG Article 35 is based on a uniform concept of »lack of conformity». That concept includes 
not only differences in quality, but also differences in quantity, delivery of an aliud 73 and 
defects in packaging. In so doing, the CISG differs materially from the most domestic laws on 
liability for defective goods, which often make a subtle distinction. In general, no significance is 
attached to the distinction, familiar in Germanic legal systems, between ordinary characteristics 
of goods and a specific warranty that particular characteristics exist, or between peius and aliud, 
or between an aliud capable of being authorized by the buyer and which is not. Nor has the 
French distinction between vice cachè and vice apparent been included in the CISG.74 Finally, 
CISG Art. 35 does not differentiate between conditions and warranties. This must be borne in 
mind when interpreting the concept of «conformity», because there is otherwise a risk that each 

                                                           
70 Secretariat Commentary, comma 2 
71 See decisions Tribunal Cantonal du Valais, 29.6.1998; Bezirksgericht Unterrheintal St. Gallen 16.9.1998; Oberster 
Gerichtshof  30.6.1998; Pretura di Torino 30.1.1997; Tribunale d'Appello di Cantone di Ticino 15.1.1998 
72 As a consequence of his negligence the buyer loses the right to claim a remedy from the seller on the basis of the lack of 
conformity. Since a delivery that falls short is regarded as one type of a lack of conformity the negligent buyer may end up 
paying for goods that were never actually delivered. Even though the consequence is very strict from the buyers' point of view, 
the sellers' need to know if the buyer intends to issue claims is far more important than the buyers' right to rely on the lack of 
conformity. It's important to protect the seller against claims, which arise long after the goods have been delivered. Claims 
issued in that way are often of doubtful validity and when the seller receives his first notice of such a contention at a late date, it 
would be difficult for him to obtain evidence like the condition of the goods at the time of delivery, or to invoke the liability of 
a supplier from whom the seller may have obtained the goods or the materials for their manufacture. See Kuoppala, chapter 
1.1.2. 
 
73 About difficulties in interpretation of said article, see also Bianca in Convenzione di Vienna sui contratti di vendita 
internazionale di beni mobili, p. 147. 
74 However, the nature of the defects does count: it has to be taken into consideration when valuating the length of the 
reasonable time of notice of lack of conformity. 



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court will interpret CISG Art. 35 in accordance with its own domestic legal classifications and 
that such differences in interpretation will hinder unification of the law.75 
 
4.1.2 Agreement between the parties 

CISG Art. 35 provides that regard must be had first to the requirements of the contract. The 
primary test is, therefore, what characteristics of the goods are laid down in the contract by 
means of quantitative and qualitative descriptions. Article adopts the premise that a defect must 
be defined by reference to what the contracting parties intended, a premise which is accepted by 
the prevailing opinion in various legal systems. The requirements may be expressly or impliedly 
determined in the contract. It is likely that in particular in an implied agreement reference is 
made to specific industry standards. The contractual requirements may be individually 
negotiated, but they may also follow from the standard business terms of the seller or the buyer. 
Advertisements by the seller, in which, for example, he refers to particular qualities of the 
goods, may be taken into consideration in order to determine the conformity with the contract 
under CISG Art. 35.76 
 
The general rule of CISG Article 35 is that the goods must conform to what the parties have 
agreed upon in the contract, the brevity of which does not immediately reveal its importance. 
The objective tests contained in the Article are meant to play a subsidiary role in this respect. It 
must be borne in mind, that the agreement of the parties concerning quality, quantity and 
description does not need to be express. It may be implied by way of interpretation of their 
statements and conduct (CISG Art. 8).77 Specific requirements may be deduced, however, from 
the purpose and the circumstances of the contract, and from usage even if there is no direct 
agreement. 78  
 
4.1.2.1 Gap filling, parol evidence-rule 

Where the parties' express agreement seems incomplete, e.g. as regards the quality of goods, we 
would normally turn to the CISG implied obligations to fill in the gaps. Sometimes, however, 
the document that seems to represent the complete agreement between the parties does not, a 
party may claim, include all express oral statements made during the contract negotiations. Is 
that party entitled to introduce evidence to prove that the oral statement is part of the written 
contract; perhaps even that the written contract does not mean what the words seem to say? 
The so-called parol evidence rule79 would deny any effect to the parties' alleged oral 
understanding, simply because that understanding would vary the written contract of sale. 
Some jurisdictions might not be even allow presentation of any evidence for the purpose of 
proving that the oral statement was made. However, under the CISG (Art. 11) a «contract of 
sale» may be proved by any means. Since this language refers to all the contract terms allegedly 
agreed upon, a court should admit evidence of additional or different terms. This 
interpretation is supported by the CISG Art. 8(3) requiring that in order to determine the 
intent of a party, «due consideration be given to all relevant circumstances of the case including 
the negotiations» etc. For these reasons the parol evidence rule is inapplicable to a CISG 

                                                           
75 Schlechtriem, p. 275 
76 Schlechtriem, p. 277 
77 Veneziano, p. 44 
78 Enderlein - Maskow, p. 141 The question whether insignificant differences in quality have to be considered, remains open. A 
relevant Australian proposal was not successful. 
79 The parol evidence rule - which is really a rule of substantial law - applies only in the case of a fully »integrated» written 
instrument, but under some laws (e.g. Texas State Law) written agreements are presumed to be fully integrated. 



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contract. So, if a prior statement has been made, we should give «due consideration» to that 
fact. A contrary statement in an American CISG case, which has been contradicted by another 
American court, is clearly out of tune with the international view.80  
 
Extrinsic evidence of a custom in the trade is permitted provided it is not contrary to an express 
provision in the written contract, or to establish that there is a collateral contract. The court 
may rectify a written agreement that by mistake does not accurately record the agreement of the 
parties although it may simply consider the amended contract without formally ordering its 
rectification. Where one party has given another a verbal promise not to rely on a term in the 
general conditions and that promise has been accepted by another party, he cannot rely on that 
term if it would make the verbal contractual wholly illusory. 81   
 
As previously stated in connection with the interpretation of a sales contract in the U.K., the 
fact that the CISG has removed the parol evidence hurdle does not mean that every pre-
contractual statement will be given contractual effect. Courts and arbitrators may still entertain 
a presumption of the completeness and correctness of writing and after hearing the witnesses the 
fact-finder may conclude that this presumption has not been overcome. Even in cases where 
there is a clear proof that a given oral statement concerning a matter relevant to the sale that 
was made, CISG Articles 8 and 11 do not automatically determine whether the statement 
should be treated as part of the contract, i.e., whether the statement-maker intended his pre-
contractual statement to bind. What these CISG provisions do is to mandate courts and 
arbitral tribunals in an international sales case to allow proof of and to consider the effect of 
statements allegedly made.82   
 
4.2 Finland's rules of law on the conformity of goods 

The Finnish Sale of Goods Act differentiates the lack of conformity as regards the quality and 
third-party claims.  This distinction makes difference when assessing the seller's responsibility; 
he is responsible of all the losses, direct and indirect, deriving from third-party claims if the lack 
of conformity existed at the moment of the conclusion of the contract. The responsibility is, 
however, excluded if the buyer was aware of the non-conformity at the determining moment. 
The FSGA is directed to regulate the defects connected to the use and the properties of the 
goods. These so called factual defects include for example defects deriving from raw material, 
inaccurate manufacturing or structural erroneousness. The rules concerning the seller's 
obligation to remedy the defects are meant to cover specifically these cases, since defects of 
other kind would be extremely difficult or even impossible to remedy. 83 Case law of Finnish 
courts outlines the application of the rules concerning lack of conformity. 
 
4.2.1 Conformity with contract, section 17 

The Finnish Sale of Goods Act, section 17 states: 
«The goods must conform to the contract in regard to description, quantity, quality and other 
properties and be contained or packaged in the manner required by the contract.  

                                                           
80 See case Beijing Metals v. American Business Center, 993 F.2d 1178 (5th Cir 1993). The contract of sale of bacon was 
governed not by Texas domestic law, but CISG. Under Art. 11 a contract of sale may be proved by any means, including 
witnesses. Since this language refers to all the contract terms allegedly agreed upon, even a Texas court should admit evidence 
of additional or different terms. Bernstein - Lookofsky, p. 55 
81 Schmitthoff's Export Trade, p. 62 
82  Bernstein - Lookofsky, p. 57 
83 Routamo - Ramberg, p. 131 



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Except where the parties have agreed otherwise, the goods must: 
(1) be fit for the purpose for which similar goods are ordinarily used; 
(2) be fit for any particular purpose for which the goods were intended if the seller knew or 

must have known of this purpose at the time of the conclusion of the contract and it 
was reasonable for the buyer to rely on the seller's skill and judgment; 

(3) possess the qualities of goods which the seller has held out as a sample or model; and 
(4) be contained or packaged in a manner that is usual or otherwise appropriate for similar 

goods, if packaging is necessary to preserve or protect the goods. 
If the goods do not conform to the provisions of paragraph 1 or 2, they are defective.» 
 
The CISG 35 has served as a model for the rules concerning lack of conformity in Finnish Sale 
of Goods Act in the section 17. The starting point for both of these regulations is the contract 
itself: the valuation is based on the requirements stated in the contract. When no such 
requirements are present in the contract, the gaps need to be filled with other norms. In this 
respect a distinction must be made between the interpretation of the contract and gap filling. 
As the wording of the CISG 35 leaves little, or no room at all whatsoever for extensive 
interpretation, FSGA  17 has to be interpreted this way. Those cases that are listed in the CISG 
35(2) and which have served as a model for FSGA   17 do not constitute an exhaustive list. 
When neither the contract itself nor the cases of FSGA  17 do not offer guidance, it has to be 
decided how the «conformity with the contract» will be defined. 84   
 
As regards to the quality of the goods, the seller's responsibility, when relying to the FSGA  17, 
derives from his declaration of intention, irrespective of the fact whether or not the 
responsibility is based on the cases listed in  17. Therefore, it's not necessary to examine 
whether or not the seller was aware of the lack of conformity; his responsibility ensues from it 
in any case. Attention has to be paid to the fact that the requirement laid down by  17.2 «fit for 
the purpose for which similar goods are ordinarily used» has to be interpreted strictly. It doesn't 
regard bad quality. For example, a car that consumes remarkably lot of gasoline, or a piece of 
furniture manufactured of poor materials, is not defective in a sense of  17.2. 85 
 
KKO 1998:15086: The seller had the right to avoid the sale contract because the painting 
bought wasn't authentic even if the seller had expressly held out its authenticity. The seller 
relied on his original title; the painting had been bought from a noted auction room as 
authentic. The seller claimed that the notice of non-conformity was made too late: the contract 
had been concluded in the autumn 1991, the buyer had had the painting examined by 
professionals on 13.1.1995 and the notice of non-conformity was made 28.1.1995. The buyer 
avoided the contract 13.6.1995. The judges disagreed on the decision: the majority consented 
to the buyer's right to reduction of the total price (the aforementioned painting was a part of 
collection of several paintings that were bought at the same occasion) but a minority disagreed. 
The minority stated that the notice of non-conformity wasn't made timely and the buyer had 
lost his right to rely on the defects of the goods.   
 
4.2.2 Information relating to the goods, section 18 

However, the definition of defective goods as stated by section 17 is not exhaustive: section 18 
lays down additional rules concerning information relating to the goods: 
                                                           
84 Routamo - Ramberg, p. 129 
85 Routamo - Ramberg, p. 130 
86 Korkein Oikeus, KKO,  Finnish Supreme Court 



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«The goods are also defective if 
(I) they do not conform to information relating to their properties or use which was 

given by a person other than the seller when marketing the goods or otherwise 
before the conclusion of the contract and 

(II) the information can be presumed to have had an effect on the contract87 
The goods are also defective if 

(I) they do not conform to information relating to their properties or use which was 
given by a person other than the seller, either at a previous level of the chain of 
supply or on behalf of the seller, when marketing the goods or otherwise before the 
conclusion of the contract, and 

(II) the information can be presumed to have had an effect on the contract. However, 
the goods shall not be considered defective if the seller neither knew nor ought to 
have known of the information that was given. 

The provisions of paragraphs 1 and 2 shall not be applied if the information has been corrected 
clearly and in time. 
 
In its decision 1991:153 The Supreme Court of Finland has paid attention to the moment of 
the delivery of the goods instead of the moment of the conclusion of the contract, as the 
wording of the law presumes. The buyer had ordered gravel for a construction project. The 
seller, at the moment of delivery of the goods to the construction site, became aware of the 
purpose for which the gravel was intended, and realized its inappropriateness for the purpose. 
Since the seller didn't inform the buyer of the inappropriateness, as he, being a professional on 
his field, should have done, the Court ruled that the goods did not conform with the 
information provided by the seller.88        
 
KKO 2001 77: The seller had given an express warranty that the goods would be fit for the 
particular purpose disclosed by the buyer. The goods were yet to be manufactured at the 
moment of the conclusion of the contract. The seller had, however, expressly guaranteed the 
suitability of the goods for the particular purpose without having checked it. The seller's 
responsibility ensued from his negligence to assure himself of the suitability for the particular 
purpose. The conclusion was that the goods must conform to the information given to the 
buyer before concluding the contract. Otherwise the goods are defective in the sense of 18. If 
the information to the buyer has been given at the time of conclusion of the contract, they are 
considered to «have had an effect on the contract.»89 
  
In its decision 1998:51 the Supreme Court of Finland stated that the second-hand car that had 
been driven for 73 000 kilometres instead of the 49 000 told to the buyer, didn't conform with 
the information given to the buyer. The Court made a reference to the sections 17 and 18. 90 
 
The seller's responsibility is not limited only to cases where the seller has given the information 
to a specific customer. It also includes the information given through a marketing campaign 
directed to the public. However, all the information given cannot be considered relevant. The 
seller's liability will ensue only if the information given has had an effect on the contract; the 
                                                           
87 The tokens (I) and (II) are here and later in the text, as well as in the unofficial translation of Ministery of Justice, used only 
to facilitate the reading and understanding of the translation. They do not appear in the original Finnish or Swedish texts and 
should therefore not be used to identify any references to the Act.   
88 KKO 1991:153 
89 Wilhelmsson - Sevón - Koskelo, p. 102 
90 KKO 1998:51 



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information must have been of reasonable importance to the buyer and the buyer must have 
been aware of the information before the conclusion of the contract. If the seller wants to free 
himself from claims deriving from wrongful information, he should correct the buyer's false 
belief before the conclusion of the contract. The seller's responsibility is not limited to a 
campaign launched by the seller himself, but it includes also the information given by an earlier 
link of the distribution chain or another person working for the seller. Only if the seller wasn't 
and couldn't have been aware of this information, may the seller avoid the responsibility.  
However, the seller's knowledge of the wrongfulness of the information is insignificant. If a 
specific reservation concerning the truthfulness of the information is not made, the seller 
should be prepared to take responsibility of the wrongfulness, also in situations when he has 
acted in good faith.91 
 
The seller is not responsible only for the information given, but also for failing to give 
information. The responsibility will ensue from the failure, if he knew or ought to haven 
known and the buyer could reasonably presume to be informed of. An additional condition is 
that the failure has had an effect on the contract.  It may be concluded that  19.2 has to be seen 
as a minimum requirement of the seller's obligation to inform the buyer that cannot be 
displaced by a general remark limiting the responsibility. When the sale contract is concluded 
without «as is» clause, this seller's obligation is remarkably wider. When assessing the elements 
of a single case, this seller's obligation has to bee seen together with the buyer's awareness and 
his opportunity to examine the goods beforehand. 92  
 
In case S 96/1215 Helsinki Court of Appeal93 applied the CISG. The Court saw no reason to 
change the judgment of the Court of the First Instance which stated that it was undisputed that 
the buyer had required that the sample goods should possess certain characters indicated in its 
orders, and had expressly drawn the seller's attention to this. Considering the information and 
assurance from the seller's side it wasn't the buyer's duty to find out how the seller will carry out 
the manufacturing. The court held that the buyer did count on the seller's expertise and could 
rely on the results from the tests taken before the delivery. 
 
Aaltonen has prepared a three-phase structure for classifying the promises of the seller. The 
starting point is the warranty (takuu) from the seller's side that the goods do or do not have a 
certain property. This kind of seller's commitment reflects a fundamental character of the 
goods. In case that character is lacking, the buyer may declare the contract avoided.94 Even if 
the seller encouraged the buyer to examine the goods at the moment of the above promise, the 
invitation itself does not free the seller from the warranty. This form of warranty requires 
seller's particular commitment, and without it, the promise cannot be considered as a warranty. 
The next category is a seller who promises the buyer the goods to have a certain character, 
without a particular commitment to the promise. In Ekström's view the seller's awareness of the 
defect is not a relevant factor; he is liable of it in any case.95 Hakulinen, instead, claims the 
seller's responsibility of only for what has been stated of the goods. According to Vihma, on the 
other hand, the contract cannot be avoided relying on the unawareness. Vihma also strongly 
opposes to what has been said by Chydenius, who, on his turn, claims that the unaware seller's 

                                                           
91 Wilhelmsson - Sevón - Koskelo, p. 103 
92 Wilhelmsson - Sevón - Koskelo, p. 104 
93 Helsingin Hovioikeus 30.6.1998 
94 In terms of the CISG. 
95 Aaltonen, p. 131. Vihma and Kivimäki interpret the situation otherwise, see Aaltonen, p. 132 -134. 



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activity could be interpreted as fraudelent if he gets, by means of misleading information, the 
buyer to conclude the contract.  The third category covers those promises that could be seen as 
sales promotion that cannot be considered as serious promises by a reasonable person.  In 
practice it's not easy to make a difference between the last two. To try to transform the seller's 
promise to a term of the contract could be a solution. If it is not reasonably feasible, the 
promise would likely be regarded as sales promotion.  
 
 4.2.3 «As is» clause, section 19 

In addition, there are rules concerning «as is» clause. Section 19 states: 
«If the goods have been sold subject to an «as is» clause or a similar general reservation 
concerning their quality the goods shall, nevertheless, be considered defective if: 

 1. the goods do not conform to information relating to their properties or use 
which was given by the seller before conclusion of the contract and the 
information can be presumed to have had an effect on the contract; 

 2. the seller has, before the conclusion of the contract, failed to disclose to the 
buyer facts relating to the properties or the use of the goods which the seller 
could not have been unaware of and which the buyer reasonably could expect to 
be informed about and the failure to disclose the facts can be presumed to have 
had an effect on the contract; or 

 3. the goods are in essentially poorer condition that the buyer reasonably could 
expect taking into account the price96 and other circumstances. 

 
When second-hand goods are sold at an auction, they shall be considered sold «as is.» When 
applying the provisions of paragraph (1)(3), regard shall be had to the asking price of the 
auction.» 
 
Often the seller, wanting to limit his liability, sells the good using  «as they are» or similar 
general expression as a reservation as regards to the quality of the goods. This, however, doesn't 
free him from the responsibility ensuing from information that he or his representative has 
given. To achieve the said goal the contractual clause should be more specific. 97     
 
The section 20 states that the buyer cannot rely on a defect that he could not have been 
unaware of at the time of the conclusion of the contract. This corresponds to the CISG 35(3). 
However, the Convention and FSGA differ here: the statement of the CISG 35(3) concerns 
only the cases listed in the subparagraph 2, and which correspond with the cases 1 - 4 of the 
section 17, while the  20 covers the buyer's awareness of defects in general. The buyer's 

                                                           
96 In the English doctrine the price is generally considered as a relevant factor in deciding what quality the buyer is entitled to 
expect. Goods which are commonly sold for a variety of purposes are also commonly sold for a variety of prices. And this is not 
only because market prices may vary, but also because some uses may require goods of better quality, and goods fit for those 
purposes may therefore command a premium. So, in the example of the wrecked car sold as a source of spare parts, one would 
obviously expect the price to be very much lower than if the car was sold as a roadworthy vehicle for ordinary road use. Hence, 
if the price was a normal sort of price, the buyer is entitled to expect the car to be roadworthy, if it was not a case of a car with 
an antiquarian value. In this case the transaction would be characterized as being about a sale of a »collector's car,» and the fact 
that it was not roadworthy, might not render it unsatisfactory. In short, the borderline cases of this sort, the court characterizes 
the deal will be crucial. Atiyah -  Adams, p. 156  
97 Wilhelmsson - Sevòn - Koskelo, p. 103. See also Aaltonen, p. 169. A clause similar to this a so called «tel quell»-clause, which is 
widely used above all in the overseas sales. According to this clause, the buyer takes the chance that the goods are not as he 
expected. On the other hand, the tel quell-seller has no right to pick certain items - those less valuable -  from a lot, and comply 
with his delivery obligation in this way. The clause is always somehow aleatory; using it the buyer assumes risks that, if realized, 
may endanger the purpose and the sense of the contract. The mala fede seller cannot be discharged from the liability. 



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awareness is of a decisive nature when assessing his right to rely on a defect; one cannot 
suppose that the goods are «defective» if the buyer was aware of the discrepancies in the quality 
and still bought the goods. 98 
 
KKO 1992 158: After the contract of sale of an apartment had been concluded, it appeared 
that the apartment suffered of a structural defect. The seller was responsible of the apartment's 
conformity with the contract. The Court took into consideration the inconvenience caused to 
the buyer, the responsibility of the housing corporation and the final cost that remained to be 
borne by the buyer.  
 

4.3 Relevant rules of law in the UK 

4.3.1 Parol evidence in the UK; what did the parties say or write? 

As a general rule, no contractual formality is required under English law. Only exceptional 
circumstances demand a degree of formality either as a substantive or as a procedural 
requirement of contract. A contract may be made wholly by word of mouth, or wholly in 
writing, or partly by word of mouth and partly in writing. If the contract is wholly by word of 
mouth, its contents are a matter of evidence normally submitted to a judge sitting as a jury. 
What the parties said exactly must be found as a fact. For example in Smith v. Hughes99 where 
the question was whether the subject matter of a contract of sale was described by the vendor as 
«good oats» or as «good old oats.» With reference to international conventions one must point 
out that the rigidity of the literal rule has recently been eased, also in other common law 
countries.100  
 
The exclusion of oral evidence to «add to, vary or contradict» a written document has often 
been pronounced in peremptory language but in practice its operation is subject to a number of 
exceptions. In the first place, the evidence may be admitted to prove a custom or trade usage 
and thus to «add» terms which do not appear on the face of the document and which alone give 
it the meaning which the parties wished it to possess. In the second place, there is no reason 
why oral evidence should not be offered to show that, while on its face the document purports 
to record a valid and immediately enforceable contract, it had been previously agreed to 
suspend its operation until the occurrence of some event, such as the approval of a third party, 
and that event had not yet taken place. The effect of such evidence is not to «add to, vary or 
contradict» the terms of a written contract, but to make it clear that no contract has yet become 
effective. Thirdly, there is a limited equitable jurisdiction to rectify a written document where it 
can be shown that both parties under a common mistake executed it. Finally, the exclusion of 
oral evidence is clearly inappropriate where the document is designed to contain only part of 
the terms - where, in other words, the parties have made their contract partly in writing and 
partly by word of mouth. This situation is so comparatively frequent as in effect to deprive the 
ban on oral evidence of the strict character of a «rule of law» which has been attributed to it. It 
will be presumed, «that a document which looks like a contract is to be treated as the whole 
contract.» But this presumption, though strong, is not irrefutable. In each case the court must 
decide whether the parties have or have not reduced their agreement to the precise terms of an 
all-embracing written formula. The question is basically one of intention and, like all such 

                                                           
98 Routamo - Ramberg, p. 129 
99 (1871) LR 6 QB 597 
100  Ferrari, in Uniform Interpretation of The 1980 Sales Law, p. 6 



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questions, elusive and conjectural. It would seem, however, that the more recent tendency is to 
infer, if the inference is at all possible, that the parties did not intend the writing to be exclusive 
but wished it to be read in conjunction with their oral statements.101  
 
4.3.2 Conditions and warranties 

The Sale of Goods Act states as follows: 
Section 11: «When condition to be treated as warranty - (1) Where a contract of sale is subject 
to a condition to be fulfilled by the seller, the buyer may waive the condition, or may elect to 
treat the breach of condition as a breach of warranty and not as a ground for treating the 
contract as repudiated.» 
 
(2) Whether a stipulation in a contract of a sale is a condition, the breach of which may give 
rise to a right to treat the contract as repudiated, or a warranty, the breach of which may give 
rise to a claim for damages but not a right to reject the goods and treat the contract as 
repudiated, depends in each case on the construction of the contract; and a stipulation may be 
a condition, though called a warranty in the contract. 
 
(3) Subject to section 35A if a contract of sale is not severable and the buyer has accepted the 
goods or a part of them, the breach of a condition by the seller can only be treated as a breach 
of warranty - and not as a ground for rejecting the goods and treating the contract as repudiated 
- unless there is an express or implied term of the contract to that effect. 
 
(4) Nothing in this section affects a condition or warranty whose fulfilment is excused by law 
because of impossibility or otherwise. 
 
(5) Paragraph 2 of this section applies in relation to a contract made before 22nd of April 
1967.» 
 
At the time when the old Sale of Goods Act was passed, contractual obligations were generally 
thought of as falling into two principal classes, namely conditions and warranties. In addition, 
there existed a body of equitable rules governing mere misrepresentations. In the 1950s and 
1960s, it was suggested in a number of decisions that the distinction between a condition and a 
warranty was not exhaustive.102 This development assumed two forms. On the one hand, it was 
said that there were terms even more important than conditions - fundamental terms. On the 
other hand, it also came to be said that there was a category of terms mid-way between the 
condition and the warranty, namely innominate (intermediate) terms. Both of these are 
considered further below.103 
 
                                                           
101 Furmston, M.P., p. 126 
102 There has been an assumption that all contractual terms had to fall within one class or another and that this distinction 
could, in principle, be drawn at the time when the contract was made. Any term whose breach could possibly take a serious 
form naturally tended to be treated as a condition as a result of this approach. Since the distinction related to the terms of the 
contract and not to the consequences of the breach and, indeed, had to be applied in theory  as at the date when the contract 
was made, there was a tendency for many terms to be treated as conditions even though their breach only caused minor 
inconvenience or loss, or even none at all.  The consequence of this was that in the law of sale of goods, the duties of the seller 
were traditionally treated very strictly. Any deviation from the terms implied by the Act justified the buyer in rejecting the 
goods. But it was also widely assumed by lawyers that there was nothing peculiar in the law of sale or even in the Sale of Goods 
Act with respect to these questions. It was generally thought that the position was the same with respect to all the seller's duties. 
Atiyah - Adams, p. 57  
103 Atiyah - Adams, p. 53 



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The buyer is entitled to reject the goods if a condition relating to them is broken. A condition is 
a term to which the parties, when making the contract, attribute such importance that it can truly be 
described as being of the essence of the contract.104 A condition has to be distinguished from the 
warranty, which is a contract term of less significance and which relates to matters collateral to 
the main purpose of the contract. In the case of breach of a warranty the buyer is not entitled to 
reject the goods. He has to retain them but may claim damages, which, if the goods have an 
available market, are prima facie, the difference between the value of the goods as delivered and 
the value that they would have if they had complied with warranty. 105 As a condition is treated 
as being of higher legal quality than warranty, every condition includes warranty - a statement 
that cannot be reversed. The buyer is, therefore, at liberty to treat a broken condition as a 
broken warranty and, instead of rejecting goods, he may elect to keep them and claim the 
difference as damages. If the buyer is deemed by law to have accepted the goods and if, 
consequently, he has lost his right to reject them, he is bound henceforth to treat what 
originally was a condition, as a warranty and his only claim is for damages for breach of 
warranty.106 
 
The distinction between conditions and warranties was originally based on two factors. One 
factor was the intention of the parties as expressed in the contract and, thus, the question into 
which category a stipulation fell was treated as one of construction. But often the intention of 
the parties in this respect was indeterminable from the words used; and so the courts relied 
secondly on the general requirement of significant failure in performing the contractual 
obligation. This is no longer the sole basis of the distinction but the courts still take it into 
account when deciding, in cases of first impression, whether particular terms are to be classified 
as conditions.107  
 
The Sale of Goods Act 1979 implies into a contract of sale certain terms that, in England and 
Wales, are to be regarded as conditions. If the goods are described then the goods supplied 
must correspond with their description in the contract. They must be of satisfactory (previously 
«merchantable») quality.108 They must be fit for the particular purpose for which, with the 
knowledge of the seller, they are bought109 or, if the purpose of the goods in question is not 
made known to the seller, they must be fit for all the purposes for which such goods are 
commonly supplied. Further, they must correspond the sample, if they have been ordered on 
the basis of a sample provided, or with sample and description. These terms are implied by law 
into contracts of sale but subject to the Unfair Contract Terms Act 1977, may be contracted 
out or varied.110 
 
In addition to the statutorily implied conditions certain terms in international sales contracts 
are taken to be conditions. Generally, terms as to time are held to be a condition of the 

                                                           
104 If a term is strictly a condition this means that its full performance is a condition of the other party's obligations; his duties 
are conditional on the performance of the counterparty. Atiyah - Adams, p. 56 
105 Appropriate measure is the difference between value of goods on delivery and the value if warranty had been fulfilled. If he 
has not yet paid the full price, he may set off his claim for damages against the price in diminution or extinction of the latter. 
See case Bence Graphics International Ltd. V. Fasson U.K. Ltd. (1998) Q.B.87 
106 Schmitthoff's Export Trade, p. 85 
107 Treitel, p. 602 
108 As to the difference between words of identity and words of quality see the case Trasimex Holding SA of Panama v. Addax BV of 
Geneva (1997) EWCA Civ 2096 
109 See case R.Bartram and others v. Try Homes Ltd. Instalfoam and Fibre Ltd. Owens Corning SA (1998(EWCA Civ 1177 
110 Sale of Goods Act 1979, see also Unfair Contract Terms Act 1977. Schmitthoff's Export Trade, p. 86 



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28 

contract. 111 The port of loading in an f.o.b. contract is a condition, as is the name of a vessel 
and the type of vessel to be used for the carriage of the goods if they have, unusually, been 
agreed between the parties. In the absence of any such agreement it is a condition of the 
contract that the goods be carried on a vessel that is usual in the trade for the carriage of such 
goods. 112  
 
It may therefore be seen, that a breach of a condition operates as a repudiation of the contract 
by the party in breach. Consequently, a buyer who is entitled to reject the goods is in the same 
position as a buyer to whom the goods were not tendered at all,113 unless the breached term has 
to be treated as an innominate term, or if de minimis rule114 or special considerations, such as a 
trade custom or an agreement of the parties to the contrary, 115 apply. In a normal situation the 
buyer is entitled to claim damages from the seller for the non-delivery of the goods. 116 If he has 
paid the purchase price in advance he can recover it by way of damages, and if he has suffered 
other reasonably foreseeable loss, he can recover damages as well. The motivation for the 
buyer's desire to reject the goods is usually that the non-conforming goods that the seller has 
tendered are useless to him and that the claim for damages is his only remedy. The practical 
point in the distinction between the buyer's right to reject the goods on  grounds that a 
condition of the contract is broken and his right to claim damages for breach of warranty is that 
in the former instance the buyer can often claim damages on a considerably higher scale than in 
the latter. Where a party is entitled to damages, he is bound to take reasonable steps to mitigate 
his loss but he is not bound «to go hunting the globe» to find a market in a distant country, nor 
can it be held against him, if he has acted reasonably, that a method of mitigation more 
favorable to the defaulting buyer existed.117 
 
Since the term warranty is defined by section 61 as an « agreement with reference to goods 
which are the subject of the contract of sale, but collateral to the main purpose of such 
contract, the breach of which gives rise to a claim for damages but not a right to reject the 
goods and treat the contract as repudiated.» Both the meaning and the legal effects are 
explained. However, the term «collateral» - hallowed by usage - is not very wisely chosen, for it 
may give the impression that a warranty is a term which is somehow outside the contract, 
whereas it is fact a term of the contract.118 
 
4.3.3 Implied condition as to title 

One of the most important conditions in a contract for the sale of goods is that the seller will 
pass to the buyer a good title at the time of the sale. The relevant section119 reads:  

                                                           
111 See case B.S. and N.Limited (BVI) v. Micado Shipping Ltd. (2000) Civ 296 
112 Schmitthoff's Export Trade, p. 86 
113 The seller may, however make a second tender of new goods if the time for delivery has not expired. Compare with the 
CISG Art. 48(1). 
114 De minimis non curat lex.  
115 The conditions of trade associations which e.g. in the commodity trade, are widely accepted, sometimes exclude the rejection 
of goods. 
116 The measure of damages is the difference between the contract price and the market price, if there is an available market for 
the goods. The relevant market price that is prevalent at the date of delivery or, failing delivery, at the date of refusal to deliver. 
See case BMBF (No 12) Ltd. v Hartland and Wolff Shipbuilding and Heavy Industries Ltd. (2000) EWCA Civ 862 
117 See case Skandia Property (UK) Ltd. Vala Properties BV v. Thames Water Utilities Ltd. (1999) EWCA Civ 1985 
118 Atiyah -Adams, p. 63 
119 Act 1893 12(1) 1979 12(1)  



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29 

« (1) In a contract of sale there is an implied condition on the part of the seller 
that in the case of an agreement to sell he will have such a right at the time when 
the property is to pass. 
(2) In a contract of sale, other than one to which subsection (3) applies, there is 
also an implied warranty that 
a)  the goods are free, and will remain free until the time when the property is to 

pass, from any charge of encumbrance not disclosed or known to the buyer 
before the contract of sale is made; and 

b)  the buyer will enjoy quiet possession of the goods except so far as it may be 
disturbed by the owner or other person entitled to the benefit of any charge or 
encumbrance so disclosed or known 

(3) This subsection applies to a contract of sale in the case of which there appears 
from the contract or it is to be inferred from the circumstances an intention that 
the seller should transfer only such title as he or a third person may have. 
(4) In a contract to which subsection (3) applies, there is an implied warranty that 
all charges or encumbrances known to the seller and not known to the buyer have 
been disclosed to the buyer before the contract is made. 
(5) In a contract to which subsection (3) applies, there is also an implied warranty 
that none of the following will disturb the buyer's quiet possession of the goods, 
namely 

a)  the seller; 
b)  in a case where the parties to the contract intend that the seller should 

transfer only such title as a third person may have, that person; 
c)  anyone claiming through or under the seller or that third person otherwise 

than under a charge or encumbrance disclosed or known to the buyer before 
the contract is made. 

(6) Paragraph 3 of the Schedule applies in relation to a contract made before 18th 
May 1973. 

  
It must be noticed that the seller undertakes to ensure that the buyer would thereafter have the 
power to transfer that title to subsequent purchaser. Normally, the transfer of the title should 
give the buyer an ability to make such a transfer of a title. But in some instances, the one may 
not necessarily follow the other.120  
 
 

 

                                                           
120 In Niblett v. Confectioners' Materials Co, (1921) 3 KB 387, All ER Rep 459, English buyers bought from New York sellers a 
consignment of condensed milk. Payment was agreed to be made in cash upon reception of the shipping documents. When the 
goods arrived, Her Majesty's customs detained the goods on the ground that they infringed a registered United Kingdom 
trademark. The buyers were therefore compelled to remove the labels which carried the offending trademark from the cans 
before they were sold. The sale of the cans devoid of labels resulted in a loss. The buyers sued the sellers, claiming the breach of 
two implied undertakings. Firstly, it was argued that the buyer did not enjoy the warranty of quiet possession of the goods. The 
court held that the warranty of the quiet possession was breached because the buyers »were never allowed to have quiet 
possession.» The second ground upon which the buyers rested their claim was the breach of the implied condition that the 
sellers were the owners of the goods and were able to pass a good title to the buyers. But that itself did not provide the buyers 
with a right of resale. The ability to transfer a good title to the buyers in this case did not confer upon that buyer an ability to 
resell and transfer a good title to a subsequent purchaser. Therefore the court held that implied condition was also breached. 
Scrutton LJ wrote: »The respondents impliedly warranted that they had then a right to sell the goods. In fact they could have 
been restrained by injunction from selling the, because they were infringing the rights of third persons. If a vendor can be 
stopped by process of law from selling, he has not the right to sell.» Marasinghe, p. 150 



Nordic Journal of Commercial Law, issue 2003 #1 
 

 
30 

4.3.4 Innominate term 

The innominate term is a contractual term that is neither a condition nor a warranty. Its 
characteristic is that, if the contract is breached, the effect of the breach depends on the nature 
and gravity of the breach.121 If the breach is grave, the innocent party can treat the contract as 
repudiated, but if the breach is not serious the contract remains and the innocent party can 
only claim damages for any loss that he may have suffered. The concept of innominate term was 
developed in shipping contracts with respect to the stipulation that the ship should be 
seaworthy. Unseaworthiness could be of serious or insignificant character and its effect on the 
contract varies according to the facts that made the ship unseaworthy. The concept on the 
innominate term was extended to other types of contract, notably to the contract of sale.122 
 
An illustration of the application of the innominate term to the law of international sales is 
provided by the case Cehave NV v. Bremer Handelsgeschellschaft mbH; the Hansa Nord. Bremer 
Handelsgeschellschaft, a German company, sold a quantity us U.S. orange pellets c.i.f. 
Rotterdam to Cehave, a Dutch company. The pellets were to be used in the manufacture of 
cattle food. The contract was made on a form of the Cattle Food Trade Association that 
contained a term «Shipment to be made in good condition.» The consignment in issue was 
about 3.400 metric tonnes and was carried in The Hansa Nord. The price at the time of arrival 
of the ship had fallen considerably. On discharge from The Hansa Nord the cargo ex hold vo.1 
(1.260 tonnes) was found to be damaged but the cargo ex hold no. 2 (2.053 tonnes) was in good 
condition. The buyers rejected the whole consignment. The Rotterdam court ordered its sale. It 
was purchased by a middleman for a sum that, after deduction of the expenses, amounted to an 
equivalent of one third of the original contracted price. The middleman sold the pellets the 
same day for the same price to the original buyers who took them to their factory and used 
them for the manufacture of cattle food although they received a somewhat smaller quantity of 
pellets than they would have done if part of the consignment had not been damaged. The total 
result of the transaction was that the Dutch buyers received goods that they had agreed to buy 
for £ 100.000 at the reduced price of about £ 30.000. The case went to arbitration and then to 
the courts. The court of appeal held that the contractual term «shipment to be made in good 
condition» was not a condition within the meaning of the Sale of Goods Act but was an 
innominate term.123    The court held that the buyers were not entitled to reject the whole 
consignment but were entitled too damages for the difference in the value between the 
damaged and conforming goods on arrival in Rotterdam. The case was remitted to the 
arbitrators for the determination of these damages. 124 
  
Section 15A, inserted by the Sale and Supply of Goods Act 1994, provides that where the buyer 
would have a right to reject the goods on the grounds of a breach of sections 13, 14 or 15 and is 
not in the capacity of a consumer, he may not treat the breach as a breach of condition where it 
is so slight that it would be unreasonable to do so. The buyer in such a circumstances may only 
treat the breach as a breach of warranty, although the parties may provide otherwise expressly or 

                                                           
121 See cases Alfred McAlpine Plc. v. Bai (run-off) Ltd. (2000) EWCA Civ. 40 and Manifest Shipping Company Ltd. v. Uni-Polaris 
Shipping Company Ltd and others (2001) UKHL 1  
122 Lord Wilberforce referred to it as »the modern doctrine» when he said:»The general law of contract has developed along 
much more rational lines in attending to the nature and gravity of a breach or departure rather than in accepting rigid 
categories which do or do not automatically give right to rescind, and if the choice were between extending cases under Sale of 
Goods Act 1893 into other fields, or allowing more modern doctrine to infect those cases, my preference would be clear.» 
123 Lord Denning M.R. said: »If a small proportion of the goods sold was a little below that standard, it would be met by 
commercial men by the divergence was serious and substantial.» 
124 Schmitthoff's Export Trade, p. 88 



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31 

implicitly. It is suggested, that entry into a contract on f.o.b. and c.i.f. terms implies that the 
parties do not intend section 15(A) to apply. However, the concept of the innominate term 
should not be overused. Many terms are regarded by the parties as so essential that they qualify 
as conditions in the legal sense. This applies, in particular to most time clauses in commercial 
contracts e.g. in a f.o.b. contract a clause that «buyer shall give at least x consecutive days' notice 
of probable readiness of vessel(s).»  Similarly, in a c. and f. contract a clause that the ship shall 
sail directly from the port of loading to the port of discharge (direct shipment clause) was held 
to be a condition and not an innominate term.125 
 
4.3.4.1 Scope of the category of intermediate terms 

Granted that the threefold classification of terms does exist, the question about into which 
category particular terms should be placed arises. In discussing this question we shall assume 
that the parties have not provided an express classification of the term in the contract itself; and 
that the court will generally apply a previous judicial classification of the term. Our main 
concern will therefore be with previously unclassified terms. Since judicial classification of a 
term as a warranty is rare, the important issue is whether a previously unclassified term is to be 
classified as a condition or as an intermediate term. The issue is difficult because it gives rise to 
a conflict between two policies. 
 
The first of these policies is to restrict the right to rescind to cases in which the breach causes 
serious prejudice to injured party, and so to prevent a party from rescinding for ulterior motives 
or on grounds that have been criticized as «excessively technical.» This policy favors the 
classification of terms as intermediate.126 This policy can, however, be excluded by evidence of 
contrary intention.127 Based on case law the following conclusions can be drawn. Firstly, the law 
has to have regard to the nature and gravity of the breach before it becomes possible to say 
whether the innocent party is entitled to repudiate a contract for breach of a term of a contract. 
Secondly, it has been held, that the Sale of Goods Act does not exhaustively divide all terms 
into conditions and warranties and that innominate terms can exist in contracts of sale of 
goods and that the express term that the goods have to be in good condition may be a term of 
that character. 128.  
 
4.3.5 Fundamental terms 

The third category of terms, the fundamental terms, emerged as a powerful weapon to strike 
down the effect of widely drafted exclusion clauses, which limited the range of remedies 
available to the buyer. It has been held by courts that where the seller commits a breach of a 
fundamental term, the contract would be considered to have suffered a fundamental breach, 
and as such could render the exclusion of liability clauses found in the protecting the seller 
inoperative. This gave the buyer a right to sue the seller for the breach despite the exclusion 

                                                           
125 Schmitthoff's Export Trade, p. 89 
126 It is illustrated by number of decisions. In Tradax International S.A. v. Goldschmidt S.A. a contract for the sale of barley 
contained the words »four per cent. foreign matters»; and they were held to amountonly to an intermediate term, so that the 
buyer was not allowed to reject merely because the goods delivered contained 4.1 per cent foreign matters.   
127 Tradax Export S.A. v. European Grain & Shipping Co. a contract for the sale of solvent extracted toasted soya bean meal 
contained the words »maximum 7.5 per cent. fibre.» These words were held to be a condition so that the buyer was entitled to 
reject when the goods were found to have a fibre content of 9.28 per cent. There was evidence that, in sales of the commodity 
in question, fibre content was normally a matter for price adjustment. It followed that, by taking the unusual step of specifying 
a maximum fibre content, the parties had provided evidence of their intention to depart from that normal practice and of 
giving the buyer the right to reject, should the specified percentage be  exceeded.  Treitel II, p. 609  
128 Atiyah - Adams, p. 59 



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32 

clauses. The law regarding fundamental breach, however, was outside the Sale of Goods Act, 
though applicable to a contract of sale. The Sale of Goods act preserved the application of the 
rules of the common law, therefore enabling, inter alia, the doctrine of fundamental breach to 
apply to a contract of sale. The Sale of Goods act does not refer to fundamental terms. Instead, 
the effect on fundamental term may be found in the way the Act deals with the breach of a 
condition. The Act specifies that a breach of a condition may give rise to a right to treat the 
contract as repudiated or a warranty the breach of which may give rise to a claim for damages 
but not to a right to reject the goods and treat the contract as repudiated. 129 Sometimes a 
breach may, by the operation of law, be reduced to the status of a breach of warranty. This 
occurs when the buyer has either accepted the goods or where the property in the goods has 
passed to the buyer in a contract of sale that is not severable. Besides this, the buyer may, at his 
option, choose at any time to consider a breach of a condition as a breach of a warranty, in 
which case he may sue only for damages and not for a rescission of the contract. The Act 
considers the implied condition as to title and implied condition as to merchantability of the 
goods as conditions for the breach of which the buyer is given a right to both repudiate the 
contract and sue for damages. 130 
 
4.3.6 Representations 

Whether a statement is or is not a part of the contract is said to depend upon the intention of 
the parties, but this most elusive criterion is often of little use in this connection. This situation 
has come about especially since the courts have been prepared to hold that an oral statement 
may override the written terms of a contract. It is probably true to say that the courts are now 
much more ready to interpret a statement as a term of a contract than they were a hundred 
years ago. The tendency these days frequently appears to be for the courts to hold a statement 
to be a term of a contract when they think of it as reasonable to impose liability in damages on 
the person making the statement, and vice versa. Thus to attempt to decide whether a 
statement is a term of a contract or a mere representation without reference to the result is, in 
many cases, like putting the cart before the horse. On the one hand, a statement as to the 
quality or state of the goods by a seller will almost invariably be held to be a term of the 
contract if the seller is a dealer in the goods. In the absence of a clear intention one way or the 
other, a statement is a term of the contract where the person making it had, or could reasonably 
have obtained, the information necessary to show whether the statement was true.  
 
To conclude, it seems to be unnecessary to make more than a brief reference to the possibility 
of an action for negligent misrepresentation at the suit of a buyer, whether or not he is able to 
establish that the representation amounts to a term of the contract. Although it is now clear 
that an action for negligent misrepresentation will lie in some cases even at common law, it will 
not often be possible for a buyer to call to arms this cause of action in a case where the 
representation is not a term of the contract. But this is now of little importance for, under the 
Misrepresentation Act 1967, a contracting party is given a statutory cause of action for 
misrepresentation against the other contracting party. Since the onus is placed on the 
representor to show that he had reasonable grounds to believe, and did believe up to the time 
the contract was made, that the facts represented were true, it seems probable that claims based 
on misrepresentation will in future frequently be joined with claims for damages for breach of 
condition or warranty. But damages the Misrepresentation Act may not be assessed in the same 

                                                           
129 Sale of Goods Act 1893 and 1979, 61(2) and 62(2) respectively. 
130 Marasinghe, p. 148 



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33 

way as damages for breach of a term of the contract, so the distinction may still be important in 
some cases.131 
 
4.3.7 Scots law 

Much of what has been said in this chapter is, at best, interesting background information for 
the Scots lawyer. The distinction of contractual terms into conditions and warranties is 
unknown in Scots law, although its deployment to categorize the terms implied under the Sale 
of Goods Act did cause some confusion until the passage of the Sale and Supply of Goods Act 
1994. But as the implied terms are now defined in Scotland without use of the words 
«condition» or «warranty,» this difficulty has ceased to cause trouble. The Scottish approach to 
the customer's right to terminate a contract for the supply of goods following breach of an 
implied term by the supplier is now the same as it would be for any other contract, namely, to 
ask whether the breach is sufficiently «material» to justify the remedy. Scots lawyers do, 
however, refer to contractual terms as warranties, usually when the term is an undertaking as to 
a state of fact, such as a condition of goods; but it does not follow from this that the only 
remedy from breach is damages. Termination will be possible if the breach is material. The 
distinction between a contract term and a representation is well established in Scots law, and 
the tests used in this regard in England are also applied in Scotland. Negligent and fraudulent 
misrepresentations are delicts, giving rise to claims for damages. There may be recovery for pre-
contractual negligent misrepresentation under section 10 of the Law Reform (Miscellaneous 
Provisions)(Scotland) Act 1985.132  
 

5 DETAILED ANALYSIS 

5.1 Quantity of goods 

5.1.1 The CISG 

According to Art 35(1) a difference in the quantity of the goods is considered to be non-
conformity. The fact that the lack of quantity amounts to non-conformity is clearly stated by 
some decisions. Courts refer to the same rules applicable for defective goods; in particular, the 
buyer must give notice to the seller within a reasonable time of discovery of the lack of quantity. 
133  
 
However, a difference has to be made as to whether or not the documents allow for a minimum 
quantity or they rigorously require one single delivery. Notice has to be given only when the 
seller really delivers less than indicated in the documents. The seller may not invoke that notice 
has not been given if he was aware of the lack of conformity, e.g. if he himself made out the 
documents in accordance with the actually delivered quantity. 134  
 
But what happens when the quantity of goods delivered by the seller is greater than the one 
agreed upon the contract? This fact pattern emerged in a case decided by the French Supreme 
Court: electronic components were ordered by a French company from a German one. One of 

                                                           
131 Atiyah - Adams, p. 66 
132 Atiyah -Adams - MacQueen, p. 89 
133 OLG Düsseldorf 8.1.1993 RIW 1993. Tinned cucumbers were sold by a Turkish company to a German one. A lesser 
quantity of cucumbers than the one agreed upon had been delivered.  
134 Enderlein - Maskow, p. 142 



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34 

the buyer's contentions regarded the quantity of the delivered goods. The buyer alleged that the 
seller had delivered goods in excess and asked him to take them back. The lower instance court 
ruled that the buyer was obliged to pay the entire price because he should have immediately 
returned the excessive goods back instead of asking the seller to take them back. Upon the 
buyer's claim - that he was entitled to retain the goods until reimbursement by the seller of the 
reasonable expenses incurred in preserving the goods (Art. 86(1)) - the Cour de Cassation held 
that no evidence of such expenses had been provided by the buyer.135 Commentators have 
criticized this decision, as far as treatment of excessive quantity is concerned. Article 35(1) does 
not vouch for a distinction between delivery of a quantity lesser or greater than the one agreed 
upon in the contract: excessive quantity should be treated as a non conformity and the buyer 
should promptly examine the goods and give notice within a reasonable time, if he wants to rely 
on the remedies provided in the Convention, but he is under no obligation to return the goods 
to the seller. Should he decide to accept the excessive quantity, he is obliged to pay its entire 
price (Art. 52 CISG).136 
 
After all the considerations about what was agreed between the parties and how the parties are 
supposed to react, it should be taken into account the consequences to the parties; if it was 
essential to the buyer to have a full delivery immediately, or if it was of little difference to 
receive a part of the goods delayed, or not to receive this part at all, and the counterparty's 
knowledge of this fact. For example, if, based on a supply contract, the buyer delivers 90 % as 
agreed and the missing 10 % together with the next agreed delivery within a short period of 
time, attention must be paid to how much inconvenience was caused to each party and if it 
would have been reasonable to expect the vendor, by all means, to try to comply with her 
contractual duties at once. In any event, reasonability of the parties' claims is decided on a case 
by case- basis. 
 
 
5.1.2 Finland 

As regards a non-conforming delivery, the situation can be seen from two different points of 
view. The first one considers the lack of goods as a partial delay, while the second defines it as a 
specific defect: defect in quantity.  Similarly as with defects in quality, here it is also difficult to 
figure out a rule to identify the presence of defects. Some general principles applicable to the 
non-conformity as regards quality are applicable also to the non-conformity as regarding 
quantity.  Which criteria we should utilize to find out whether a certain case is a delay or 
erroneous quantity? The first point to capture one's attention is the difference between the 
amount contracted and the one delivered.  If the difference is remarkable, it is tempting to 
think that the seller never had intention to deliver the contractual amount. This turns the 
situation to the «seller's delay.» In the event of a minor difference, the situation is closer to the 
«defect in quantity.» Both interpretations call for attention to the circumstances.137 The smaller 
the missing amount is, the more it is likely that the seller intended to perform a complete 
delivery and thus we can speak about quantitative defect. In order to draw the line between the 
two kinds of non-conformities, emphasis should be put on the seller's intention: if seller alleges 
to have performed a complete delivery, despite the lacking amount, we can consider this defect 
on quantity. 
 
                                                           
135 Cour de Cassation 4.1.1995. The Supreme Court confirms a decision of the Cour d'Appel de Paris 22.4.1992. 
136 Veneziano, p. 43 
137 Aaltonen, p. 179 



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35 

In a case of excessive delivery, the buyer is under a duty to separate the amount of goods 
contracted. If it is feasible without causing damage to them, it is not reasonable to deem the 
buyer entitled to reject the delivery. The contrary would cause remarkable damage to seller; 
returning of the goods and difficulties in finding another buyer for the whole delivery could 
result in unreasonable consequences. The buyer is anyhow entitled to claim from the seller the 
cost resulting from the separation. If the seller delivers the amount greater that what was 
contracted, in order to get rid of his stock, or to extend the business relation with the buyer, the 
buyer is entitled to discharge the contract. It would not be fair that the seller could, through the 
contract of sale, make the buyer accept the goods he did not order.  
 
The discrepancy between the amount ordered and the one actually delivered should be 
considered simply as another offer from the seller's side. Scandinavian sale of goods acts do not 
expressly recognize the limits between which the amount delivered could freely fluctuate in 
cases of contracted maximum and minimum. Almen concludes that when the minimum and 
the maximum are agreed, the fluctuation may be even greater that ten per cent. According to 
him, the party entitled to choose could not claim less than half of the maximum or more than 
twice the minimum. Aaltonen rejects this approach, deeming it too vague and aleatory to be 
taken as a principle to follow. Also Raninen138 is in this view. He claims that «despite that we 
need not to be limited to the variance of ten per cent, we can certainly not go as far as Almen 
goes.» Aaltonen doubts whether the view regarding the «last ship rule» adopted by Raninen could 
be really acceptable. According to last ship rule, the tolerance of fluctuation between the single 
deliveries concerns only the last ship. Aaltonen presents an issue of recognizing the last ship 
loaded in case of a plurality of them. The point of the last ship rule, however, is elsewhere: it is 
not a question of which ship departed or arrived as first, but, that the rule can be applied only 
once and only after all the deliveries have been done. This usually coincides with the unloading 
of the last ship after which it is possible to confirm the total amount.139  
The problem gets a bit more complex when the contracted amount is defined through the 
seller's capacity to produce and when his capacity is reduced for reasons beyond his influence. 
In such circumstances he cannot be considered liable for a non-conforming delivery. Another 
difficult issue is an event when the seller has more than one commitment to his production and 
the remaining capacity has to be divided between the parties involved. 140  
In practice it is rather difficult to recognize when the defect is of quality or quantity, since both 
of them can appear simultaneously. The quality of the goods may be expressed in terms of 
quantity: the width of the fabric or the volume of the container. 
 
5.1.3 The UK 

Where the delivery is of a quantity less than what was contracted, the buyer may in such a 
situation reject the whole or accept the lesser quantity. If the buyer does the latter then the 
goods must be paid for at the contract rate. Where the seller delivers a quantity of goods greater 
than the contracted quantity the buyer has three options. The buyer may reject the whole or 
may accept only the quantity contracted and reject the rest. The third option is to accept the 
whole delivery. In any event the buyer must pay at the contract rate for the quantity accepted. 
When goods are rejected, whether relying on to the delivery of the wrong quantity or to some 
other lawful reason, such as the goods' defects, the buyer is not required to return such goods to 

                                                           
138 Raninen, Kauppatapalausuntoja, Aaltonen, p. 184 
139 Aaltonen, p. 185 
140 Aaltonen, p. 188 



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36 

the seller. It could suffice that the buyer were to inform the seller of the refusal to accept them. 
It is then left to the seller to arrange for their return.141  
 
Accordingly, the section 30(1) states. «Where the seller delivers to the buyer a quantity of goods 
less than he contracted to sell, the buyer may reject them, but if the buyer accepts the goods so 
delivered he must pay for them at the contract rate.» The seller cannot excuse a short delivery 
on the ground that he will deliver the remainder in due course. Section 31(1) states that: 
«Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by 
instalments.» There are doubtlessly circumstances where it can be inferred from the contract 
quantity and the time allowed for shipment that the sellers are entitled to ship more than one 
load, and therefore entitled to deliver in separate loads. But the general rule is that the seller 
must deliver in one load. Where delivery in separate instalments is permissible under the 
contract, the question whether a shortfall in the quantity required permits the buyer to treat the 
whole contract as discharged is dealt by 31(2) of the Act. 142 
 
At first sight there seems no obvious reason why the buyer should not be required to accept 
that part which should have been delivered, whether or not he accepts the rest. But this is not 
the law, for 30(2) says: «Where the seller delivers to the buyer a quantity of goods larger than he 
contracted to sell, the buyer may accept the goods included in the contract and reject the rest, 
or he may reject the whole.» The former law was very strict in its insistence on the correct 
quantity. Any shortfall or any excess, no matter how small, was a breach of the section and 
justified rejection of all the goods. There was, and presumably still is, a principle of very limited 
application, de minimis non curat lex143 which could occasionally be invoked to excuse what 
would otherwise be a technical breach. 144 This is a legal principle of general application, but its 
applicability to any particular case seems to be a question of fact that depends, inter alia, on how 
far precise accuracy can be obtained, or whether there are limits of accuracy that are 
commercially reasonable. The principle ought seldom be applied, for  there is no breach of 
warranty at all. There may perhaps be occasions when it might be applied in consumer sales.145 

 
The fact that the buyer may be entitled to reject the whole of the goods delivered in the 
circumstances dealt with in section 30, means that the seller in such cases is treated as though 

                                                           
141 Marasinghe, p.164 
142 The subsection is not as strict in its requirements as section 30(1); a shortfall in quantity in one installment does not justify 
the buyer in treating the whole contract as discharged unless it is sufficiently serious to go to the root of the contract as a whole. 
The result may seem curious at first sight. Leaving aside the effect of section 30, in a situation where a seller contracts to sell 
and deliver 62 suits to the buyer, but he only delivers 61, the buyer could reject the whole lot if the suits were delivered in one 
load. But if the suits are to be delivered in separate installments, the buyer's rights are regulated by section 31(2) and on these 
facts it has been held that the shortfall of one suit was not sufficiently serious to justify the buyer in treating the contract as 
completely avoidable. But the result is not as odd as it seems. Where the parties do expressly contemplate installment deliveries, 
serious problems would arise if a shortfall in one installment gave a right to reject previous installments already accepted. So it 
is natural that such a right should be severely limited , and each installment treated as a separate delivery. Atiyah - Adams, p. 105  
143 The law pays no attention to trifles. 
144 To illustrate the application of this principle in the present context, two cases, one on either side of the line, may be 
contrasted. In Wilensko Slaski TowarzystwoDrewno v. Fenwick &Co Ltd (1938 3 All ER 429) the sellers sold timber of specified 
measurements to the buyers. There were certain permitted, but strictly defined, variations from these specifications. Slightly less 
than 1 per cent of the timber failed to comply with the contract requirements. The buyers were held entitled to reject the goods. 
On the other hand, in Shipton Anderson & Co Ltd v. Weil Bros &Co Ltd (1912 1 KB 574) the sellers contracted to sell to the 
buyers 4500 tons of wheat or 10 per cent more or less. The seller delivered 4950 tons and 55 lb, but they did not claim 
payment for the 55 lb. It was held that the buyers were not entitled to reject the goods. The excess over the stipulated amount 
being a little over 1 lb in 100 tons, the case clearly called for the application of the maxim de minimis.  If it had not been applied 
in this case the rule would have lost all commercial importance.    
145 Atiyah - Adams, p. 107 



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37 

he commits a breach of condition by delivering the wrong quantity. In this respect the duties of 
the seller are parallel to those laid down as regards sales by description. Indeed, the whole of 
section 30 is merely an application of the duty to deliver goods conforming to the description 
imposed by section 13, and it is one of the peculiarities of the drafting of the Act that section 
13 is dealt with under the heading »Conditions and warranties» while section 30 is dealt with 
under »Performance of the contract.»146 
 
The buyer's prima facie right of rejection means that he can always convert a breach of the 
quality into a breach of the rules as to quantity.147 The same close relationship between the duty 
to deliver the right quantity and the duty to deliver the right quality will be observed when we 
consider instalment contracts. Here too, the buyer's right to reject is the same whether the 
breach consists of a short delivery or a delivery of wrong quality. For these reasons, it is 
undesirable for the law to distinguish between breaches of sections 13-15 and breaches of 
section 30, and in general the law does not do so. So it seems clear  that the limitation on the 
right to reject in non-consumer sales introduced by the 1994 Act should apply equally to 
breaches of the implied terms as to quality and to breaches of section 30. 148 
    
 
5.2 Quality of the goods 

5.2.1 The CISG  

The first subsidiary rule (Art 35(2)(a)) is that the goods must be «fit for the purposes for which 
the goods of the same description would ordinarily be used.» 149  The delivered goods are fit for 
the ordinary use when they possess normal qualities: i.e., the characteristics normally required 
from goods as described by the contract, and free from defects normally not expected in such 
goods. The CISG imposes these obligations because in the usual sale, and in the absence of 
contrary intent, today's international buyer is entitled to expect the goods to possess certain 
basic qualities even if the contract does not expressly so state. Among the implied obligations as 
to quality, this subparagraph is of great practical importance: it is an international version of an 
implied warranty of fitness for ordinary use, familiar in many European domestic laws.150 The 
implied obligations apply irrespectively of the seller's good or bad faith. 
 

                                                           
146 Atiyah - Adams, p. 109 
147 If the seller contracts to deliver 100 tons of wheat of a certain quality and 10 tons are not of the desired quality and buyer 
rejects them, the seller will only have effectively delivered 90 tonnes, and the question will now be whether the shortfall is so 
slight that it would be unreasonable for the buyer to reject. More generally, though, the rules as to quality and the rules as to 
quantity were very similar in their effect, even if different in form. In particular, the close resemblance between the duties 
created by sections 13 and 30 is brought out all the more when they are examined in detail. In both cases, until the right of 
rejection was modified by the 1994 Act, the slightest deviation from the terms of the contract was in effect a breach of 
condition, entitling the buyer to reject the goods. If the seller delivered goods that failed by the slightest margin to conform to 
the contract description, or if he delivered a fraction too much or too little, the buyer might reject the whole. The only 
quantification on this was that if the deviations were »microscopic», the seller might be able to plead de minimis. But this 
principle was, and presumably will continue to be, applied as rarely in cases of quantity. In fact, as suggested above, given the 
restrictions the right of rejection in non-consumer sales, it ought not to be, for the effect of applying it is that there is no breach 
of warranty at all.  Atiyah -Adams, p. 110 
148 Atiyah - Adams, p. 110 
149 The ULIS mentioned the qualities necessary for the ordinary or commercial use of the goods the CISG has suppressed as 
superfluous this reference to commercial use, which is covered by the reference to ordinary use. 
150 Unlike many domestic laws, the CISG does not compel the decision-maker to distinguish between a breach of warranties 
and breach of obligations. This may well facilitate decision-making, especially in the light of the fact that the Convention 
authorizes an award of monetary compensation for any breach along the lines of a non-fault regime. See Lookofsky, p. 54 



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38 

Goods are often ordered by general description, without any indication as to intended use. Still, 
goods are always purchased with some purpose in mind, and buyers are entitled to expect 
reasonable value for their money: bowling balls must be suitable for bowling, canned tomatoes 
must be suitable for consumption, etc. Within the context of international trade, resale should 
be considered an ordinary use, so as a CISG buyer who purchases for resale in entitled to 
expect goods to be merchantable in the ordinary course of business. What is merchantable will 
then depend upon the reasonable expectations of the ultimate purchasers. The standard of 
«ordinary use» will rarely be internationally uniform; thus a question arises as to which market 
or geography we should consider as being determining.151 
 
5.2.1.1 Goods unfit for ordinary use 

Goods are unfit for the ordinary use when a defect or a lack of proper characteristics impedes 
their material use or yield abnormally deficient results or take unusual costs. The goods are also 
unfit for normal use when the lack of proper characteristics or the defects, though not affecting 
the material use of the goods, lessen conspicuously their value affecting their trade use. The 
goods can be more or less fit for their purposes, but the seller must on the whole deliver goods 
of average fitness.152 The fitness of goods for ordinary use must be ascertained according to the 
standards of the seller's place of business. Indeed, the seller is not supposed to know about 
specific requirements or limitations in force in other countries. Only in some specific cases it is 
reasonable to expect seller's knowledge of buyer's local standards. 153 Another position, however, 
holds that «ordinary use» should be defined by the standards of the country or region in which 
the buyer intends to use the goods (see the chapter Conformity to Requirements of the 
National Law in Buyer's Country).154  
 
Hence, the quality may be more or less good, but at least it must not be significantly below the 
standard that can reasonably be expected according to the price and other circumstances. Since 
the requirement of ordinary use of the goods can be met in quite varying quality, one may safely 
assume that the buyer can only insist on a certain minimum. The CISG doesn't describe any 
quality standards; e.g. the cars can be traded for resale but also for scrap metal. A specific 
problem relates to the period of durability or fitness, which plays a role in the foodstuffs and 
the pharmaceutical industries. Since no general standards have emerged yet in this respect, a 
relevant agreement in the contract should be recommended.155 
 
Some domestic laws have solved the problem stating expressly that the seller of unascertained 
goods has to provide for goods of fair quality. The Civil Code of Germany156, for instance, 
prescribes that in general the obligations to deliver unascertained goods are to be performed 
through goods of average kind and quality. Similarly the United States Uniform Commercial 

                                                           
151 For example, the windows that are perfectly adequate for houses in warm countries, rarely meet the criteria of northern 
countries.  
152 Even though Art. 35 does not contain express provision imposing on the seller a duty to deliver goods of average quality. See 
Bianca, p. 280 
153 In some legal systems the seller has the right to deliver goods whose quality is below average. Under common law the goods 
must be merchantable. However, the goods are merchantable whether they are of high or low quality. Enderlein - Maskow, p. 144 
154 For example, in Europe gasoline for the operation of cars is still understood as leaded gasoline, whereas the expectations of 
an American buyer who purchases gas on the Rotterdam spot market might be directed toward unleaded gasoline. This 
example, though, seems to confirm the opposite solution. If in the seller's country the gasoline is understood as leaded gasoline, 
the buyer's request will also be understood as a request for leaded gasoline. Naming the place where the buyer intends to use 
the gasoline is not sufficient per se to show that he needs a different type of fuel.  Bianca - Bonell, p. 274 
155 Enderlein - Maskow, p. 145 
156 BGB  243 



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39 

Code requires the goods to be merchantable. However, in other domestic legislations, unless 
otherwise agreed, the seller may deliver goods of lower than average quality. It's significant, in 
this regard, that according to common law judges the seller has to deliver merchantable goods, 
but merchantable goods does not mean of good, or fair, or average quality.157 This position is 
further explained in the decision assuming that merchantable means that the goods are of such 
quality as to be saleable in the market under the description made in the contract. 158 
 
5.2.2 Finland 

The starting point here is the contract; only in the lack of the agreement as to quality do the 
circumstances and trade customs step in. Every now and then a contract refers to the goods 
delivered in the past, which establishes case-by-case measure. Moreover, the sellers may contract 
in conformity with the rules and classifications of Chambers of Commerce or other similar 
trade organizations. Often such rules result from years of usage. The contract may speak of «first 
class,» «average,» or simply use adjectives such as «dry,» «humid,» «bleached» and so on. In this 
event, the terms used may be divided in two groups; terms that are generally used and those 
terms that appear only in the context of a single contractual relationship. The expression «good 
quality» has proved to be particularly confusing. 
 
5.2.2.1 Absence of an agreement 

In the Finnish doctrine the view prevails according to which in the absence of any reference to 
quality of the goods, the seller has to deliver goods of basic quality. This does not actually solve 
the problem but only alters it: what is «standard quality» expected to be? A general reference can 
be made to the requirements of a particular sector of commerce. Some allege that the buyer, 
who neglected to  specify the required quality in the contract, cannot claim any better than the 
lowest acceptable quality. In other words, if the contract does not provide information, it is up 
to the seller to decide. Some, on the other hand, prefer the interpretation according to which 
the buyer may claim better quality only if the goods were bought for resale. In this case the 
buyer may claim quality good enough to render the goods merchantable. In the context of a 
continuous business relationship it is natural to expect the quality similar to previous deliveries. 
The fourth view takes into account the price paid; the counterperformance has a decisive role 
when assessing what the counterparty may expect. 
 
It is somewhat complicated to try to construct a general rule regarding the required quality of 
goods when the contract itself doesn't inform us of it; to state that the circumstances are to be 
taken into consideration is hardly of great help in practice. Anyhow, even trickier than that, is 
to determine what  exactly does «the lowest acceptable» quality mean. When it comes to 
reference to previous deliveries, often there are none to refer to. Hence the solution needs to be 
found elsewhere: the contract as a whole and other components of the contractual relationship 
may help in the interpretation. Advanced trading and competition have resulted to a certain 
pricing policy that is more or less known by those who are active on a particular business. This 
could justify the expectations of a buyer of costly goods but it has to be pointed out, that the 
price cannot be the only decisive factor. A kind of a compromise could be found in the concept 
of «average quality.» Since the contractual relation should be seen also as a relationship of 
                                                           
157 Taylor v. Combined Buyers Ltd, New Zealand University Law Review (1924) 627, where it is clearly stated that »goods may 
be of inferior or even bad quality but yet fulfill the legal requirement of merchantable quality. For goods may be in the market 
in any grade, good, bad, or indifferent, and yet all equally merchantable. On a sale of goods there is no implied condition that 
they are of any particular grade or standard.» See Bianca - Bonell, p. 281 
158 Bianca - Bonell, p. 281 



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40 

cooperation, where both of the parties equally have rights and obligations, and if there are no 
particular reasons to favor one of the contracting parties- i.e. none of them was in a particularly 
weak position at the moment of the conclusion of the contract, none of them is a consumer, 
etc. - «average quality» is seen as a half-way solution when seeking the balance between respective 
performances.159 According to Aaltonen, for example the contracted place of the production of 
the goods is binding the seller and the goods produced elsewhere are not those contracted 
upon. 160 
 
5.2.2.2 Aliud pro alio 

When the seller delivers the goods different from what was contracted upon, the question arises 
as to what the seller actually did. Did he perform a defective delivery, as the goods do not 
correspond with the description, or did he deliver at all? If the seller delivers goods slightly 
different, »Golden» apples instead of »Granny Smith,» for instance, is the buyer entitled to 
reject the delivery. An apple is always an apple, but what if it was crucial for the buyer to have 
Granny Smiths, for the purpose he had in mind when ordering the goods. Thus, again we come 
back to the buyer's intention and the seller's awareness of it. So if we consider aliud pro alio -
delivery as the seller's delay, the buyer could accept the goods, despite that the contractual 
performance did not take place. It follows that the buyer renounces his right to claim the goods 
contracted upon and, hence also the remedies he could have availed of relying on the delay. 
However, the rules governing a delay do not suit very well to the situation at hands. This is 
particularly true as regards the buyer's duty to examine the goods and give notice of the non-
conformity.  
 
The rules of law and the principles governing deficiency of the goods allow much more flexible 
solutions than those governing a delay.  One factor justifying this view is that if the buyer would 
not be obliged to react to aliud pro alio -delivery, it could cause excessive damage to the seller in 
good faith. This approach is definitely seller friendly, and its application requires that the seller 
was not acting in bad faith. So the decisive point appears to be, whether the seller had intention 
to comply his contractual obligation. Once again we find ourselves studying the circumstances 
as a whole: the greater is the difference between the contracted and the delivered goods, the 
more it is difficult to the seller to prove that his intention was to comply.161  
 
5.2.3 The UK 

The implied terms as to quality and fitness in sections 13-15 of the 1893 Act represented an 
important step in the abandonment of the original common law rule of caveat emptor. The three 
primary terms laid down in the Act now appear in these sections, and their combined effect is 
to give buyers a substantial degree of protection against the risk of the goods proving to have 
defects of quality or fitness for purpose. Indeed, it is now unrealistic to treat the basic principle 
of the law as caveat emptor rather than caveat venditor. 
 
Caveat emptor 
As early as 1617 we find it being argued that »the value of a jewel consists in the estimation of 
him who will buy it», but in the same case the Court made it clear that a jewel was one thing, 

                                                           
159 Aaltonen, p. 157 
160 Aaltonen, p. 162 Note the differing view in the U.K. doctrine. 
161 Aaltonen, p. 194 



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41 

silver162 something else. In all probability this also explains the famous case of Chandelor v. 
Lopus163. The defendant was a goldsmith who sold a »stone» to the plaintiff for £ 100, a 
considerable sum of money for the time, and affirmed it to be a »bezar stone.» The plaintiff 
complained that the stone was not a bezar stone, and sued for breach of warranty. However, he 
lost his case, the Court declaring that the defendant had only affirmed, and not warranted, the 
stone to be a bezar stone. This decision, which in the twentieth century was resuscitated as a 
leading authority on sales warranty law, is often taken to be the origin of the doctrine of caveat 
emptor. And that doctrine is, in turn, taken to be evidence that the Courts were uninterested in 
the fairness of an exchange, which they regarded as a matter for the parties alone. If a buyer 
failed to obtain a warranty, and in consequence made a bad bargain, that was regarded as his 
affair. 

 
But again, both the premise and the conclusion are highly suspect. The first thing to be noted is 
the peculiar nature of the stone in our case; a bezar stone apparently is a stone found in the 
stomach or intestines of certain animals, and was at one time believed to have magical antidotal 
or medicinal powers. Even at the time when the Courts still had some belief in just prices one 
can understand the reluctance of the Court to attempt the value such a strange object, and 
perhaps even greater reluctance to attempt to discover whether it was indeed what the 
goldsmith said it was. In all probability the plaintiff was complaining not that it was not a bezar 
stone but that it did not have the magical qualities he had expected. It seems extraordinary that 
this case should have been regarded as laying the foundation of the later law of caveat emptor. 
Nevertheless, with or without the help of the case, the doctrine seems to have gained a foothold 
in the law with the growing commercial freedom of enterprise in the seventeenth century. »No 
man can be cheated except it be with his own consent, and we commonly say caveat emptor.»164 

 
In one sense, the three main implied terms lay down a series of duties upon the seller. In the 
first place, there is the implied term that if the goods are sold by description the goods must 
correspond with their description. This applies in far wider circumstances that those in which 
the two other terms apply but it does not afford lot of protection to the buyer, especially where 
the description of the goods is not detailed. The next implied term is that the goods must be of 
satisfactory quality. This does not apply in all the circumstances in which the first applies but, 
on the other hand, it affords the buyer a greater degree of protection, because goods that 
correspond with their description may not be of satisfactory quality. Even this, however, may 
not suffice to protect the buyer, since the goods may correspond with their description and yet 
they may still be unsuitable for the buyer's purpose. Hence, in still more limited circumstances, 
the buyer may be able to rely on the third implied term, namely that the goods must be fit for 
the purpose for which they were sold. The difficulties of exposition of this part of the law have 
unfortunately not been greatly reduced by the legislation of 1973-94, though there has been 
some gain in simplification.165 
 
 

 

 

                                                           
162 Silver was sold by weight and had a measurable value.  
163 (1603) Cro. Jac. 4, 79 E.R. 3 
164 Sir Josiah Child, in A New Discourse on Trade 1693. Atiyah , p.179 
165 Atiyah -Adams, p. 113 



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5.3 The purpose  

5.3.1 The CISG 

According to the second standard (CISG Art. 35(2)(b)), the seller must deliver goods which are 
also fit for any particular purpose of the buyer, provided that such purpose has expressly or 
impliedly been made known to the seller at the time of the conclusion of the contract. This 
criterion, which had its antecedent in the ULIS 166, solves the problem of whether an express 
promise of the seller is necessary about the fitness of the goods for a special purpose when the 
buyer shows his intention to buy the goods for such a purpose. The solution is in accordance 
with a principle of fairness.167   
 
The seller is not obligated to deliver goods which are fit for some special purpose which is not a 
purpose «for which goods of the same description would ordinarily be used» unless the buyer 
has «expressly or impliedly made known to the seller at the time of the conclusion of the 
contract» such intended use. The problem may arise if the seller would have no reason to expect 
to supply goods appropriate for such a purpose.168 In a German case169 the plaintiff, the buyer, 
alleged that the goods did not conform to the contract, as the fabric that the goods were made 
of couldn't be cut in an economical manner. The court held that the buyer had no right to 
refuse to pay the purchase price, as the fabric was in conformity with the contract. Taking into 
account the quantity, quality and the description of the fabric, the court concluded that the 
fabric was fit for the production of skirts and dresses. The buyer had not provided the seller 
with information regarding the manner in which the fabrics had to be cut in order to be 
economical. 
 
Buyers often know that they need goods of a general description to meet some particular 
purpose but they may not know enough about such goods to give exact specifications. In such a 
case the buyer may describe the goods desired by describing the particular use to which the 
goods are to be put. If the buyer expressly or impliedly makes known to the seller such 
purposes, the seller must deliver goods fit for that purpose. The purpose must be made known 
to the seller by the time of the conclusion of the contract so that the seller can refuse to enter 
the contract if he is unable to furnish goods adequate for that purpose.170  
 
More problematic is the situation where the buyer, while negotiating the contract makes known 
to the seller the purpose, to which the goods are not suitable. Various legal systems have 
adapted various approaches to said problem. An opinion prevails in Italian doctrine, according 
to which the situation is comparable to that of an error. In these cases the emphasis is laid on 
the seller's knowledge of the intended final use of the goods. If this criterion is met, the buyer 
may rely on the invalidity of the contract and thus the dispute remains out of the scope of the 
application of the Convention.171   

                                                           
166 ULIS Art. 3(e) 
167 The provision does not deal with the case where the seller himself illustrates the special purpose the goods are fit for or 
where the buyer orders goods to be fit for a special purpose. In such cases it is clearly a question of contractual description. The 
Convention's second criterion is intended for the case where the buyer merely displays the intention to use the goods for a 
particular aim. The solution favourable to the buyer could be reached by way of contract construction, but the uncertainties 
regarding this problem in the national laws justified an explicit statement. See Bianca - Bonell, p. 275 
168 See Secretariat Commentary, 6th comma. 
169 Landsgericht Regensburg 24.9.1998 
170 It is insufficient for the buyer to make the purpose of the goods known to the seller at a later date. See Enderlein - Maskow, p. 
145 
171 Bianca, in Convenzione di Vienna sui Contratti di Vendita Internazionale di Beni Mobili, p. 148 



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The seller is not liable for failing to deliver goods for a particular purpose even if the particular 
purpose for which the goods have been purchased has in fact been expressly or impliedly made 
known to him if «the circumstances show that the buyer did not rely or that it was unreasonable 
for him to rely, on the seller's skill and judgment.» The circumstances may show, for example, 
that the buyer selected the goods by brand name or that he described the goods desired in 
terms of highly technical specifications. In such a situation it may be held that the buyer had 
not relied on the seller's skill and judgment in making the purchase. If the seller knew that the 
goods ordered by the buyer would not be satisfactory for the particular purpose for which they 
have been ordered it would seem that he would have to disclose this fact to the buyer. If the 
buyer went ahead and purchased the goods it would then be clear that he did not rely on the 
seller's skill and judgment. 172It would be also unreasonable for the buyer to rely on the seller's 
skill and judgment if the seller did not purport to have any special knowledge in respect of the 
goods in question. 173 If the buyer participates in choosing the goods, inspects the goods before 
he buys them, selects the manufacturing process, hands over the specifications or insists on a 
particular brand, he does not rely on the skill of the seller.174 However, the circumstances in 
which the buyer may not rely on the seller's skill and judgment cannot be specified in advance 
but must be ascertained case by case.175 
 
5.3.2 Finland 

If the seller could have reasonably expected that the buyer had the intention to resell the goods, 
they have to be of merchantable quality. A defect that reduces goods' attractiveness in the eyes 
of consumers is considered fundamental even though the goods would be, despite the defect, 
suitable to their purpose. Here the Finnish view differs from the German «mussels» CISG-
case176. When assessing if the seller's awareness of the buyer's purpose could be deemed decisive, 
it cannot be considered sufficient that the seller knew the purpose.177 The buyer alleging seller's 
awareness of a particular purpose for which the goods were bought bears the burden of proof of 
such awareness. In particular cases the buyer may be exempted from this if the seller, for his 
experience or for other reasons, could not have been unaware of the particular purpose. 178 
 
When a place of origin is named in the description of the goods, it is clear that the buyer may 
expect the goods to be of that origin.179 Antique is supposed to be from a certain period of time 
although also other characteristics are often required. Second hand goods are presumably 

                                                           
172 If the buyer did not rely on the seller's skill and judgment, then it is irrelevant whether the seller actually did give judgment 
or not. It could well be that the buyer informed the seller about a particular purpose and at the same time ordered goods with 
clear and detailed specifications. The seller will be obliged to counsel the buyer, but the seller will not be responsible if the 
buyer insists on his order and shows that he does not rely on the seller's judgment.  Enderlein, p. 157, Dubrovnik lectures. 
173 Secretariat Comentary, commas 7 - 10. See also  Bianca - Bonell, p. 275 
174 Enderlein - Maskow, p. 146  
175 See also Bianca - Bonell, p. 275 
176BGH 8.3.1995. The case concerned New Zealand mussels sold to a German buyer. The mussels contained a quantity of a 
harmful substance significantly greater than the advised levels published in directives of the German Federal Health 
Department. The Supreme Court confirmed the finding of the lower court which in order to deny that the mussels were unfit 
for consumption, took into account that they are usually eaten in special occasions and only in small quantities. 
177 For instance, in a case where a buyer intends to retail sell coffee and acquires the coffee from a wholesaler at a low price, we 
can suppose him as being aware of the possible defect of the goods. In the case of actual defects he has to resell the goods at a 
price lower than usually, but if the goods are defective to the extent of not being merchantable, then the buyer may rely on the 
defectiveness. The wholesale seller is presumably aware that the goods he is selling are bought for resale.  
178 Aaltonen, p. 166 
179 However, some goods have acquired a  generic name that originally was associated with a particular geographic location, 
even though they no longer have nothing to do with that location, such as French fries.   



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44 

defective to some extent; the level of quality is significantly lower compared with a new item. 
The typical problem arising from second hand sale is a fraudulent seller, whose promises do not 
correspond with the actual state of goods. 
 
5.3.3 The UK 

The rules governing implied terms about quality or suitability are found in section 14: 
(1) Except as provided by this section and section 15 and subject to any other statute, there 

is no implied condition or warranty about the quality or suitability for any particular 
purpose of goods supplied under a contract of sale. 

(2) Where the seller sells goods in the course of business, there is an implied condition that 
the goods supplied under the contract are of satisfactory quality. 

(2A) For the purposes of this Act, goods are of satisfactory quality if they meet the standard 
that a reasonable person would regard as satisfactory, taking into account the description of 
the goods, the price (if relevant) and all other relevant circumstances.  
(2B) For the purposes of this Act the quality of goods includes their state and condition and 
the following qualities in appropriate cases: 
a) fitness for all the purposes for which the goods of the kind in question are commonly 

sold; 
b) appearance and finish; 
c) freedom from minor defects; 
d) safety; and 
e) durability. 

(2C) The conditions implied by subsection (2) do not extend to any instance making the 
quality of goods unsatisfactory - 
a)  which is specifically brought to the buyer's attention before the contract is made; 
b)  where the buyer examines the goods before the contract is made, what that 

examination ought to have revealed; or 
c)  in the case of a contract for sale by sample, which would have been apparent based on a 

reasonable examination of the sample. 
(1)  Where the seller sells goods in the course of business and the buyer, expressly or by 

implication, makes known - 
  a) to the seller; or 
  b) to the credit-broker (where the purchase price or part of it is payable in 

instalments and the goods were previously sold by that credit-broker to the seller) 
 1 any particular purpose for which the goods are being bought, there is an implied 
condition that the goods supplied under the contract are reasonably fit for that 
purpose, whether or not that is a purpose for which such goods are commonly 
supplied, except where the circumstances show that the buyer does not rely, or that 
it is unreasonable for him to rely, on the skill and judgment of the seller or credit-
broker.  

(2) An implied condition or warranty about quality or fitness for a particular purpose may 
be incorporated to a contract of sale by usage. 

(3) The preceding provisions of this section apply to a sale by a person who in the course of 
business is acting as agent for another as they apply to a sale by a principal in the course 
of a business, except where that other is not selling in the course of business and either 
the buyer knows that fact or reasonable steps are taken to bring it to the notice of the 
buyer before the contract is made. 

 



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45 

Section 14(6) which provided the statutory definition of merchantable quality had as its main 
element the requirement that the goods should be reasonably fit for the purpose or the 
purposes for which goods of that kind were commonly bought. The new provisions provide that 
the quality of goods includes their state and condition. In this regard one must consider aspects 
of the quality of goods in their fitness for all the purposes for which goods of the kind are 
commonly sold. Clearly, fitness for purpose was important - indeed, an essential - element of 
the concept of merchantable quality, and remains important under the new provisions. In this 
instance it must be noted that section 14(3) is also, and more specifically, concerned with 
fitness for purpose, but that subsection is aimed at situations where the goods are required for 
some particular purpose which has been made known to the seller. Section 14(2) on the other 
and, concerns fitness for ordinary purposes, which do not have to be specifically made known 
to the seller.180  
 
The question arises whether the new statutory definition clears up one major ambiguity that 
had previously been explored in the cases. Many goods are used for a variety of purposes, and 
the goods supplied under the contract may be fit for some of these purposes while being unfit 
for the others. If the buyer has not made known to the seller the particular purpose he wanted 
the goods for - in which case he could sue under section 14(3) - are the goods to be treated as 
satisfactory/merchantable or not? In Aswan Engineering Establishment Co. v Lupdine Ltd181 the 
plaintiffs bought waterproofing compound in plastic pails for export to Kuwait from the 
defendants: L had bought the pails from the second defendants, B. When the pails were 
unloaded on the quayside at Kuwait, they were stacked in intense heat for some days. As a 
result the pails collapsed under their own weight and the waterproofing compound was lost. 
The plaintiffs sued L and succeeded on the grounds not stated in the reports. L then in turn 
claimed damages from B for breach of section 14(2) and (3), as well as in tort. Only the former 
claim is considered here. So far as liability under section 14(2) was concerned, the problem 
obviously was that the pails were perfectly fit for most purposes for which such pails would be 
used; they were simply unfit to be stacked high in such intense heat. The Court of Appeal held 
that the goods satisfied the requirement that they should be of merchantable quality. It must be 
said, however, that the Court reached this conclusion by looking at earlier case law first. Section 
14(6) required goods to be «as fit for the purpose or purposes for which goods of that kind are 
commonly bought» as it was reasonable to expect. The new provision requires «fitness for all the 
purposes for which goods of the kind in question are commonly supplied,» so that if the seller 
knows that goods are not fit for one of the purposes for which goods of the kind are commonly 
supplied, he must make this known to the buyer.182  
 

                                                           
180 In fact, the distinction between the two subsections has been muddied because such a wide interpretation has been given to 
section 14(3) that in practice it often covers ordinary purposes as well as special purposes; so the two subsections in practice 
overlap significantly. 
181 (1987) 1 WLR 1 
182 It is unlikely, however, that if the facts of the Aswan case were to recur, and the case fell to be decided under the new 
provisions, the outcome would be any different. It therefore seems impossible at this point to avoid looking at some of the 
earlier case law. The particular point under consideration here was exhaustively discussed by the House of Lords in case in 
Henry Kendall & Sons v William Lillico & Sons Ltd, (which is also examined in this study under »merchantability)» in which 
the plaintiffs bought for their pheasants animal feedstuff which turned out to be contaminated with a substance contained in 
Brazilian ground nut extraction which was one of the ingredients of the feedstuff. The extraction was perfectly suitable to be 
used in making up animal feedstuffs for use for cattle and other animals; it was only unsatisfactory for use in making the 
feedstuff for pheasant and partridge chicks. The buyer claimed damages from the seller, and consequently the seller in his turn 
claimed damages from his seller who, instead, was not held liable since the goods were perfectly usable for one of the main 
purposes for which goods were commonly bought.   



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46 

The commodities sold under a general description may be bought by different buyers for a wide 
variety of uses. It would be unreasonable to say that because the goods are unsuitable for only 
one of these possible uses the goods were to be treated as non-merchantable. A buyer who 
complains that the goods were unsuitable just for the use he had in mind must try to bring his 
case under section 14(3) if he could so183 and could not expect to persuade the court that the 
goods were altogether non-merchantable. If the purposes for which the buyer requires the goods 
is not a common one, this will still be the case under the new provisions, but the outcome on 
the facts might be different.184 
 
 

5.4 Sample or model 

5.4.1 The CISG 

Subparagraphs (c) and (d) complete the CISG Article 35 list of implied obligations. If the seller 
presents goods as a sample or model, the goods delivered must match the sample. In such a 
case, and unless otherwise agreed, the sample serves the same function as a »description 
required by the contract.»  Of course, if the seller indicates that the sample or model is different 
from the goods to be delivered in certain respects, he will not be held to those qualities of the 
sample or model but will be held only to those qualities that he has indicated are possessed by 
the goods to be delivered. 185 If the description of the goods in the contract and the model do 
not conform to each other, it may not be deduced, from the fact that without a description in 
the contract the model replaces an agreement; that the model shall have priority over 
contractual agreements. 186 
5.4.2 Finland 
The sale by sample differs from other types of sale for two different reasons. On the one hand, 
by presenting a sample the seller commits himself to deliver goods that are similar to the 
sample. On the other hand, the buyer cannot rely on the facts he should have noticed when 
examining the sample. Samples may be divided into three categories; seller's sample is the one 
used to demonstrate what the goods will be like. Minor differences between the sample and the 
goods are tolerated. Buyer's sample is presented in order to illustrate to the seller how the goods 
should be: the buyer's sample is to be respected rigorously. The third category is so called 
sample of type. They merely describe the goods and demonstrate the type: if the goods delivered 
are of the same type with the sample shown, minor differences have to be tolerated. On the 
other hand, even though the sample had some defects the buyer ought to have noticed, he does 
not necessarily lose the right to rely on the said defect. Sometimes the sample is used to 
demonstrate only one character of the goods; color, material or model. If the contractual 

                                                           
183 This would normally mean that he would have to show that he told the seller the particular purpose he had in mind. 
184 Atiyah - Adams, p. 143 
185 Secretariat Commentary, comma 11 
186 Enderlein - Maskow, p. 147. See also van Houtte, ICC International Court of Arbitration Bulletin, Vol. 11/No. 2 (Fall 2000) 
27 n.10 (choice of law), 26 n.40 : CISG and complementary national law, 29 n. 55. Tribunal ruled that "buyer could not argue 
that infected buckwheat delivered from China did not conform to the sample, as in the cereal business samples had a limited 
aim, being intended to define such type-specific characteristics as the kind of buckwheat and the colour and size of the kernel; 
they were irrelevant to phytosanitary purposes." 29-30 n.61: In a dispute over the quality of hulled buckwheat, sold CIF from 
China to Poland, the parties had agreed in the contract that the Chinese phytosanitary authorities should inspect the 
conformity of buckwheat on shipment. Although the quality was bad on arrival in Poland, the product complied with 
contractual specifications according to the Chinese inspection certificate. As the buyer had agreed to the determination of 
conformity through the Chinese inspection, it was not entitled to compensation." See also the comments of Enderlein in 
Dubrovnik lectures, p. 157. 
 



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47 

description of the goods does not coincide with the sample, the sample prevails. However, if the 
seller, as a response to the seller's claim of non-conformity, alleges to have shown as a sample 
exactly the same goods as he later delivered, and that the buyer has had the possibility to notice 
the quality of the sample, a question rises as to what the point of the sample was. In any event, 
the goods have to correspond with the description. When evaluating the limits of tolerance, 
attention has to be paid to the nature of the sample; whether is was seller's, buyer's sample or 
sample of type.187 
 
5.4.3 The UK 

Both Sale of Goods Acts of 1893 and of 1979 provide that a sale by sample must be express or 
should be implied from the terms of the contract.  

«In the case of a contract for sale by sample there is an implied condition -  
(a) that the bulk will correspond with the sample in quality; 
(b) that the buyer will have a reasonable opportunity of comparing the bulk with 

the sample; 
(c) that the goods will be free from any defect, rendering them non-

merchantable, which would not be apparent on reasonable examination of 
the sample.» 

 
Apart from c.i.f.188 contracts, the buyer would always have an opportunity to compare the bulk 
with the sample at the time the title and possession are passed. In a c.i.f. contract, title passes 
against the transfer of documents.  The passage of property, however, is conditional upon the 
goods conforming to the contract.  The buyer could repudiate the contract and reject the goods 
if they, upon arrival, were found not to conform to the samples against which the contract of 
sale was made. 189 
 
When studying the relationship between section 13 and the common law distinction between 
representations and contractual terms, the first question to be examined is the effect of section 
13 on the traditional common law distinction between mere representations on the one hand 
and terms of contract on the other. At first glance it may seem that section 13 does away with 
this distinction in case of sale by description since the section states, «there is an implied term 
that the goods shall correspond with the description.» If the section applied only to those parts 
of the description that amounted to contractual terms in any event, it would seem to be 
performing the somewhat odd - and redundant - function of declaring that it is an implied term 
that the seller must comply with an express term of the contract. However, despite this oddity, 
the section does not seem to obliterate the distinction between mere representations and 
contractual terms.190 It has been held that the section does not affect the traditional distinction 

                                                           
187 Aaltonen, p. 202 
188 Incoterms 2000, CIF means cost, insurance, freight. The cif contract places upon the seller the obligation to arrange for the 
shipping of the goods. The cost of freight is either included in the price quoted - which is usual arrangement in these contracts - 
or the buyer undertakes to pay upon their arrival. Where the seller and the buyer are separated by large distances, it is 
sometimes to the buyer's advantage and to his convenience that the burdensome task of arranging the exportation of the goods 
is left to the seller, who often has knowledge of the local export requirements. The seller, therefore, must arrange for export 
licenses where these are needed and satisfy all local prerequisites prior to shipping.    
189 Marasinghe, p. 154 
190 For instance, in T & J Harrison v. Knowles and Foster (1918 1 KB 608) the sellers sold two ships to the buyers, each of which 
had been stated in particulars supplied to the buyers to have a deadweight capacity of 460 tons, but no reference was made to 
this in the actual memorandum of sale. In fact, the capacity of each ship was only 350 tons. In one sense these ships had been 
sold by description and the description certainly referred to their capacity. But the Court of Appeal held that the statements 



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48 

between mere representations and terms of the contract. For the sale to be by description, the 
description is influential in the sale so as to become an essential term of the contract. Although 
this question remains tantalizingly uncommented on in the cases, it seems reasonably clear 
from some decisions of House of Lords that section 13 of the Act does not automatically 
convert any or all descriptive words into conditions, or even terms.  
 
It seems to have accepted that the only descriptive words that are to be treated as the subject of 
section 13 are words that identify the subject matter of the contract. Words, which merely 
identify the goods in the sense of pointing out where they can be found, are not words of 
identity in this specific sense. However, a different view might be taken of contracts for the sale 
of unascertained future goods where each detail of the description must be assumed to be vital. 
We could  summarize as follows: 

1. Descriptive words must first be analyzed to see whether they are contractual, or merely 
amount to representations. If they are misrepresentations only, the normal common law 
and equitable rules apply, as modified by the Misrepresentation Act 1967. 

2. If the words are held to be contractual, it must next be seen whether there is an express 
term requiring compliance with the words of description. Such a term may be a 
condition or a warranty, but is most likely to be an innominate term. The buyer's 
remedies of breach of such a term depend on the nature and consequences of the 
breach. 

3. If there is nothing amounting to an express term, then the next stage is to see whether 
the description relates to unascertained future goods like commodities. In this event the 
term is a condition, and strict compliance is required, though a non-consumer buyer's 
right to reject is now modified by section 15 inserted by the 1994 Act. 

4. If the contract is of a different character, it must be inquired whether any item in the 
description of the goods amounts to a substantial ingredient in the identity of the things 
sold. If it does, compliance with the item will again be a condition. 

5. In any other case, the requirement of compliance with descriptive words is not a 
condition, but a bare warranty or an intermediate or innominate term. 

 
This may seem complicated, but it does at least avoid putting the court into a straitjacket to 
enable the court to arrive whatever decision seems appropriate in the circumstances. Section 
itself seems to have been largely forgotten in this discussion. It is almost impossible to reconcile 
some cases with the precise words of the Act. Indeed, it is not clear that section 13 actually does 
anything at all, since all it seems to say as now interpreted, is that where the seller uses words of 
description which would otherwise amount to condition, then it is an implied condition that 
the goods should comply with that description. This hardly seems worth saying, although, in 
bills propositions may be stated which are not designed in any sense to alter the law. It is 
perhaps unfortunate that section 13 appears to have been outside the terms of reference of the 
Law Commission's inquiry that led to the 1994 Act. 191 
 
5.4.3.1 Sale by description 

«The sale by description» must apply to all cases where the purchaser has not seen the goods but 
is relying on the description alone. Hence it follows that a sale must be by description if it is of 
future or unascertained goods. In addition, the term applies even where the buyer has seen the 
                                                                                                                                                                                     
about the capacity were merely representations. However, in Howard Marine & Dredging v. Ogden Ltd (1978 QB 574) in similar 
fact-pattern damages were awarded under the Mispresentation Act 1967. 
191 Atiyah - Adams, p. 120 



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49 

goods. It has been made clear by section 13 that the term «sale by description» is wide enough 
to cover a sale even where the goods have been exposed for sale and selected by the buyer, as in 
the modern supermarket or department store. But a sale is not by description where the buyer 
makes it clear that he is buying a particular thing because of its unique qualities, and that no 
other will do, or where there is absolutely no reliance by the buyer on the description.  
 
Actually, the only case of a sale not being by description occurs where the buyer makes it clear 
that he is buying a particular thing because of its unique qualities, and that no other will do. 
For this reason the sale of a manufactured item will nearly always be a sale by description - 
except where it is second-hand - because articles made to an identical design are not generally 
bought as unique goods but as goods corresponding to that design. 192 The real question at issue 
in deciding whether the sale should be classified as a sale by description is whether, on the true 
construction of the contract, the buyer has agreed to buy a specific chattel exactly as it stands to 
the exclusion of all liability on the part of the seller. For example, the buyer may examine a 
second-hand car and the seller may offer it for sale in terms which amount to saying: «There is 
the car, there is my offer; I guarantee nothing, take it or leave it.»  In this event it is thought that 
the sale would be held to be a sale of a specific thing and not a sale by description. It is to be 
noted that section 13 applies even though the goods are not sold by a person who sells «in the 
course of a business.»193   
 
Moreover, the seller may deliver the contracted goods mixed with goods of a different 
description. Here the buyer has two options in this situation. He may reject the whole or may 
accept the portion of the goods that conforms to the contract. In the latter case, the buyer must 
pay at the contract rate for the portion accepted. 
 
5.4.3.2 The relationship between the description and the quality or fitness  

As section 14 deals with implied conditions as to the quality and fitness of the goods for a 
particular purpose, section 13 does not on the face of it deal with quality of fitness for purpose. 
It is quite possible for goods to be of satisfactory quality and fit for their purpose and yet not 
correspond with their description. Conversely, if the goods do correspond with their 
description the fact that they are unsatisfactory or not fit for the purpose they are sold will not 
enable the buyer to plead a breach of section 13. In this event he will often be able to rely on 
section 14(2) or (3), but there are some circumstances in which a buyer may wish to use section 
12 rather than section 14, even though his complaint may in a broad sense be said to be one of 
quality. First, as seen above,  section 13 applies to a sale by a private seller while section 14 only 
applies to a seller who sells in the course of a business. So a person who buys from a non-
business seller can only complain about quality if he can bring his case under section 13. This 
explains a case where the buyer of the car had obtained damages for breach of the condition 
implied by section 13 - the car was wrongly described as being of a certain year model. If the 

                                                           
192 A court in Australia  held that the sale of an ordinary pair of walking shoes was a sale by description, although the buyer had 
tried on and examined the shoes and might well have thought to be buying the particular pair as specific goods.  Even the 
purchase of a second-hand car which was fully examined by the buyer was held to be a sale by description because the buyer had 
relied in part on a newspaper advertisement issued by the seller. Atiyah - Adams, p. 122 
193 Thus in Varley v. Whipp (1900 1 QB 513) the defendant agreed to buy from the plaintiff a second-hand machine, which was 
stated to have been new from previous year and hardly used at all. This was a gross misrepresentation, and the defendant could 
not rely on section 14, which imposes requirements as to merchantability and fitness for purpose, because the plaintiff was not 
a dealer in agricultural machinery. As the goods did not correspond with the description, it was held that there was a breach of 
section 13. Changes made by later legislation are immaterial to this point.  Atiyah - Adams, p. 123 



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50 

buyer had been buying from a business seller, he would probably have had a clearer case for 
damages under section 14 on the ground that the vehicle was not of merchantable quality. 194 
 
But secondly, the buyer may wish to rely on section 13 because the goods are in fact of 
satisfactory quality in a general sense, but still do not amount to the goods he thought he was 
buying. In a hypothetical example, a person who buys a suit described as pure wool may very 
well want to return if he discovers it is not pure wool, even though it may be perfectly 
satisfactory, and of good quality. But he can only do that under section 13 because there would 
be no breach of section 14 on these areas. A third type of case in which a buyer might wish to 
rely upon section 13, even though his complaint is in a broad sense about quality, occurs where 
the contract contains a clause excluding liability for matters of quality, but not for matters of 
description - something which could still happen despite the Unfair Contract Terms Act.  
 
Particular problems often arise where goods are described in general terms, but some 
extraneous substance is included in the goods, which does not alter the general nature of the 
goods but significantly affects their utility. The point is illustrated by the decision of the House 
of Lords in Ashington Piggeries Ltd v. Christopher Hill Ltd195where herring meal, which was 
contaminated with a substance that made it unsuitable for feeding to minks, was sold to the 
buyers because the goods were still properly described as «herring meal,» and it was pointed out 
that not every statement about the quality or fitness of the goods can be treated as a part of the 
description.196    
 
There is still another type of case that may involve the relation between section 13 and the 
quality or fitness of the goods. If the contract calls for goods of a certain quality, this quality 
may itself become part of contract description, but it seems that statements as to quality will not 
usually be treated as part of the contract description. On the other hand, there are some cases 
in which quality and description significantly overlap. To take an example once given by Lord 
Denning, if the goods being sold are said to be «new-laid-eggs» this goes both to quality and 
description. However for most purposes such cases give rise to no special problems. Breach by 
the seller will normally involve liability under sections 13 and 14, and the overlap is of no 
particular importance. It would only be of importance where the implied condition under 
section 14 is not applicable for some reason and the buyer has to rely exclusively on section 13. 
He may wish to argue that the term new-laid eggs implies not merely that the eggs are literally 
new laid, but that they are of good quality, because that is the natural implication of the term. 
Conversely, if the buyer cannot complain about the quality he is not entitled to raise the same 
complaint under the guise of a failure to conform to description. 197 
 
5.5 Packaging  

5.5.1 The CISG 

The buyer can also expect the goods to be packaged in the usual manner if there is one, or in a 
manner adequate to protect the goods. Subparagraph (1)(d) makes it one of the seller's 
obligations in respect of the conformity of the goods that they «are contained or packaged in 

                                                           
194 Atiyah - Adams, p. 124 
 
195 See the citation of the same case earlier in this study. 
196 Atiyah - Adams, p. 125 
197 Atiyah - Adams, p. 126 



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51 

the manner usual for such goods, or, when there is no such manner, in a manner adequate to 
preserve and protect the goods.» This provision which sets forth a minimum standard is not 
intended to discourage the seller from packaging the goods in a manner that will give them 
better protection from damage that would the usual manner of packing.198 The seller is free to 
provide better protection for the goods at his own cost. This is influenced not only by the 
category of the goods themselves, but also the means and duration of transport, the route, and 
the country of destination. Whether or not interior packaging is required, or whether the goods 
are contained instead of packaged also depends on the means of transportation used and the 
category of goods involved. The concept of "an adequate manner" also includes that the seller 
reckoned with a foreseeable delay in transport and the possibility of a redirection in transit or a 
redispatch in case where he became aware of delay or redirection or redispatch at the time of 
concluding the contract.199  
 
It does not matter whether the packaging is part of the goods, but the obligation to package the 
goods depends on what is customary. The seller has an obligation to package the goods not only 
when the goods are dispatched, but also under CISG Article 31, subparagraphs (b) and (c) if the 
seller only has to place the goods at the disposal of the buyer. Also in these cases, the goods 
have to be packaged so as to allow the buyer to load and transport them. If the buyer himself is 
to provide the packaging, a clear relevant clause has to be agreed in the contract. This may 
relate in particular to new goods, but also to such goods that have to be manufactured in a 
special way. 200 
5.5.2 Finland 
It has been disputed on whether the defects in the package may be considered as a defect of the 
goods. As usually the answer cannot be plainly positive or negative; it needs further analysis. 
Attention must be paid to the goods themselves and how is the packaging. If the package exists 
only to render the delivery possible, it forms no such a part of the goods that, when defective, 
could render the goods defective. If the packaging is a substantial part of the goods or their 
merchantability, or if the conservation of the goods depends on it, it is surely deemed to have 
effect on the conformity of the goods.  Also when the package is erroneous for the information 
it provides, it will fall into the category »defect of goods.»   
 
5.6 Buyer's knowledge of non conformity 

The obligations in respect of quality in subparagraphs (1) (a) to (d) are imposed on the seller by 
the Convention because in the usual sale the buyer would legitimately expect the goods to have 
such qualities even if they were not explicitly stated in the contract. However, if at the time of 
the contracting the buyer knew or could not have been unaware of non-conformity in respect of 
one of those qualities, he could not later say that he had expected the goods to conform in that 
respect. This rule does not go to those characteristics of the goods explicitly required by the 
contract and, therefore subject to the first sentence of paragraph (1). Even if at the time of the 
conclusion of the contract the buyer knew that the seller would deliver goods that would not 
conform to the contract, the buyer has a right to contract for full performance from the seller. 
                                                           
198 At the 1980 Vienna Diplomatic Conference the words »or where there is no such manner, in a manner adequate to preserve 
and protect the goods» were added to Article 35. The explanation is the observation of a representative of Australia, Mrs. 
Kamarul, who asked »What would happen if the goods were of a new type and there was no usual container or packaging for 
them?» The provision proposed by her delegation provided that in cases of new standards had not been established, the manner 
in which the goods would be contained or packaged should be adequate to preserve and protect them. Secretariat commentary, 
comma 12. See also Many European domestic sales laws and ULIS 
199 Enderlein - Maskow, p. 147 
200 Enderlein - Maskow, p. 147 



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If the seller does not perform as agreed, the buyer may resort to any appropriate remedies at his 
disposal.201 
 
The CISG provides no information on the yardstick against which «have to be aware» should be 
measured. There are several formulations in regard to it. Apart from «knew» and «has become 
aware» there is «could not have been unaware» as well as «knew or ought to have known.» The 
wording «could not have been unaware» is often qualified as a gross negligence.202 According to 
some legal scholars203 this should not suffice. It has been held that there should be an objective 
and clearly recognizable deficiency of the goods, which must be obvious to the average buyer. 
Circumstances, which suggest that the buyer could not have been unaware, would be given, for 
instance, if the seller had in the past sold to the buyer goods of poor quality without complaints 
from the buyer; or if the price corresponds to the price generally paid for poor quality goods. It 
is, however, not absolutely excluded for the seller to bear responsibility. If the buyer is aware of 
the non-conformity of the goods at the time of the conclusion of the contract, but insists on 
faultless quality, the responsibility will remain with the seller for he must be expected to remedy 
the deficiency.204   
 
There are no express rules dealing with the case where the lack of conformity is attributable to 
the buyer himself, as, for example, defects in raw materials supplied by the buyer resulting in 
the lack of conformity of the goods manufactured by the seller. In the course of the 1977 
UNCITRAL session it was considered whether there should be a rule exempting the seller from 
the liability for the lack of conformity in such a case, if he was not aware and could not have 
been aware of the defect in the buyer's material or if the buyer insisted on its use after having 
been warned by the seller. The proposal was not accepted since the position was considered to 
be obvious. Exemption of a seller who was unaware of the defect in materials delivered by the 
buyer follows necessarily from Article 80. However, if the seller is aware of the defect in 
material, good faith requires him to inform the buyer of that fact.205  
 
CISG Article 35 does not lay down any express rules for the case where the seller has 
specifically warranted the existence of a quality or fraudulently concealed the defect. In the case 
of a specific warranty of quality there will in any event be a contractual agreement to that effect 
under CISG Article 35(1), so that CISG Article 35(3) will not apply. In the case of a fraudulent 
concealment of a defect, it can be inferred from the principle underlying Article 40 (seller 
unable to rely on the buyer's conduct if he is acting in bad faith), in conjunction with CISG 
article 7(1), that the seller is liable even where the buyer could not have been unaware of the 
defect. A buyer is unaware of a defect merely on account of his gross negligence seems to be 
more worthy of protection than a seller who deliberately sets out to deceive the buyer.206 
 
CISG Article 35(3) relates only to cases of lack of conformity under CISG Art. 35(2), and not 
to contractually agreed qualities of the goods or to their packaging under CISG Art. 35(1). Nor 
it is possible to apply it by analogy. This is appropriate having regard to the substance of the 
matter. Prior knowledge of the buyer is inconceivable where there is a discrepancy in quantity 
or a delivery of an aliud. But also if the buyer is aware of a discrepancy in quality at the time of 
                                                           
201 Secretariat Commentary, commas 13 - 14 
202 Herber, R. in Das UNCITRAL-Kaufrecht im Vergleich zum österreichischen Recht, p. 141. 
203 See Huber, U. in Der UNCITRAL-Entwurf eines Übereinkommens über internazionale Warenkaufverträge, p.423 
204 Enderlein - Maskow, p. 149 
205 Schlechtriem, p. 284 
206 Schlechtriem, p. 286 



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the conclusion of the contract there can be no overall exemption from liability in the terms of 
CISG Art. 35(3). In such circumstances, which characteristics were actually agreed for the 
purposes of CISG Art. 35(1) must be determined in each case through interpretation. It may be 
that the quality of which the buyer was aware has become a term of a contract. However, it is 
also possible that the seller ought to produce the characteristics as required by the contract by 
the date for delivery or that he has to remedy their absence after delivery. That applies in 
particular where the buyer has no positive knowledge of the discrepancy in quality, but could 
merely «not have been unaware» of it. 207 
 
Bianca208 states that the seller is not liable for defects of the goods directly or indirectly resulting 
from their description. Nor is he liable for the defects the buyer should reasonably expect.  
Circumstances from which the buyer should reasonably deduce that the goods do not conform 
to the Convention standards are, for example: (a) the seller had usually sold in the past to the 
buyer poor quality goods without complaints from the buyer; or (b) the price corresponds to the 
price generally paid for poor quality goods.209 The example (a) could well be extended to any 
kinds of goods: if the buyer already knows the product because of the previous acquisitions and 
afterwards orders more of it, he can hardly allege not to have been aware of the defects. Views 
differ when it comes to another extension:210 possibility to extend the rule of CISG Art. 35(3) 
to the lack of conformity covered by Art. 35(1). Bianca states, quite on the contrary, that the 
distinction must be kept clear between lack of conformity according to the Convention's 
criteria (or usages), and according to express contractual provisions (an implied provision about 
the quality of the goods). This distinction does not introduce different rules based on different 
types of lack of conformity. When there is a special contractual provision, the seller's liability is 
instead based on the principle that the party may always rely on the engagement undertaken by 
the other party. The fact that the buyer knows or ought to know of the real condition of the 
goods is irrelevant because it does not change the content of what the seller has promised to the 
buyer nor can free him from his promise.211   
 
The determination of whether the goods conform to the contract in the sense of CISG Art. 35 
is made at the moment the risk passes to the buyer. This is regulated in CISG Article 36 of the 
Convention. 212  The possibility remains that an implied warranty concerning the suitability for 
ordinary purposes will extend beyond the time the goods are accepted. The court determines 
the life of the warranty 213 or whether some provision must be made in the contract - whereby, 
of course, CISG Art. 8 may be consulted - has not been clearly decided. Hence the CISG 
Article 36 may be applied in different fashions.214 
 
 

 

 

                                                           
207 Schlechtriem, p. 286 
208 Bianca - Bonell, p. 279 
209 Bianca - Bonell, p. 279 
210 See Enderlein, in Enderlein - Maskow,  p. 146 
211 Bianca - Bonell, p. 280 
212 However, the question of burden of proof was not decided. The position taken by the British delegate - that the question 
could be left to the courts - was not contradicted.  
213 Of course with due consideration to all of the circumstances. 
214 Schlechtriem 2, p. 68  



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54 

5.7 Conformity to Requirements of the Law in Buyer's Country 

5.7.1 The CISG and the merchantability 

We may doubt that the seller should be bound to know all governmental provisions in the 
country where the goods will be traded; it's the buyer who should draw the seller's attention to 
them, as he is in a position to find and give information at lower costs. A different solution 
would infringe the need of uniform application of the Convention (Art. 7(1)). The seller is 
expected to comply only where he is expected to be aware of them, either because the buyer 
draws his attention to them, so that they become part of the contract, or else because analogous 
provisions also exist in the seller's country.215 On the other hand, the operation of national 
directives often leads to considerable damages to a buyer. The goods maybe destroyed or their 
sale is prohibited by order of public authority.216  
 
In the doctrine, various interpretations can be found. Schlechtriem is of the opinion that the 
«ordinary use« should be defined according to the standards of the country where the goods are 
directed. 217 Bianca doesn't share the said opinion; according to him the reference should be 
made to the place of the seller, because only this view will lead to systematic interpretation of 
the Convention. 218 
 
An examination of current case law shows that the question is still unresolved.  In the famous 
decision of German Supreme Court concerning the sale of contaminated mussels219, the goods 
were deemed to be conforming because they were «fit for the purposes for which goods of the 
same description would ordinarily be used». The Court excluded that the seller should take into 
account special government provisions regarding merchantability of food products issued in the 
country where the goods are treated. 220 
 
The starting point of the decision was that food regulations, to the extent that they should even 
have been applicable here, could be decisive for the determination of the quality of the goods 
required by the contract, and their violation is a defect in quality and not a defect in title. It is 

                                                           
215 This latter exception is not problematic: where the infringed provisions exist in both countries, the seller is expected to 
comply.  In a case concerning wine mixed with water and declared unmarketable in Germany by public authorities in 
application of EC-law, the violation of EC-provisions was considered relevant; the same provisions also applied in the seller's 
country, which was Italy. LG Trier 12.10.1995.  
216 The change of the law of the buyer's country lead to a collapse of a long-term contract between a German brewery and an 
Iranian importer after the new fundamentalist regime in Iran had totally forbidden the importation of alcoholic drinks. BGH, 
NJW 84, 1746.  
217 Schlechtriem  in The Seller's Obligations under the United Nations Convention on Contracts for the International Sale of 
Goods, in International Sales 1984, pp. 6-21  
218 Bianca in Conformità dei beni e diritti dei terzi in «Convenzione di Vienna sui contratti di vendita internazionale di beni 
mobili» 
 
219 BGH 8.3.1995. The case concerned New Zealand mussels sold to a German buyer. The mussels contained a quantity of a 
harmful substance significantly greater than the advised levels published in directives of the German Federal Health 
Department. The Supreme Court confirmed the finding of the lower court which, in order to deny that the mussels were unfit 
for consumption, took into account that they are usually eaten in special occasions and only in small quantities. See the Finnish 
commentary on the case, Huber - Sundström, p. 756 
220 However, there have been contrary opinions concerning this decision. Karollus, for example doesn't agree with the court. 
From his point of view, it was essential, that the buyer didn't intend to eat the mussels but to resell them. The real issue under 
Art. 35 (2)(a) is the quality a buyer can expect in the absence of detailed agreements. In his opinion, a buyer can expect a quality 
that is reasonably merchantable. For him it also seems clear that a buyer should neither be obliged to accept mussels with a bad 
taste nor to take heavily contaminated mussels. In both cases the goods are edible but probably unsaleable. The buyer's purpose 
was to resell the goods, and this purpose was frustrated. Therefore it would have been correct to say that the mussels lacked the 
conformity. Karollus, p. 51-94  



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55 

true that public law regulations, just as technical standards, cultural traditions or religious 
convictions, are circumstances that have an influence on the goods. These circumstances 
interact with each other; for instance, ideological and other convictions are often converted 
into governmental rules and prohibitions. The violation of government regulations concerning 
the use of goods must not necessarily represent a defect in quality because the relevant area can 
perhaps disregard such governmental regulations - for instance, in environmental law - and 
readily consume and trade goods that violate a prohibition. 221 
 
However, there are other decisions more sympathetic to buyers. A French company ordered 
from an Italian seller various kinds of cheese including Parmesan, in the framework of an 
existing business relationship. The buyer complained because the cheese was not wrapped and 
labelled conforming to French law on merchantability of goods. The Court held, as the parties 
were in a business relationship, that the seller knew that the goods were to be sold in France. 
Therefore, it should interpret the buyer's statements in the sense that the buyer would purchase 
only goods wrapped according to French law.222  The same result is reached in a German case 
concerning sale of paprika by a Spanish seller. In the court's opinion, the parties, also in view of 
their previous commercial relationship, had impliedly agreed that the goods should comply 
with the standards provided by the German law of food. Accordingly, the seller could not 
invoke lack of knowledge of such provisions.223 
 
The solution cannot be properly deduced from the rule of Article 42(1), which states that the 
seller must deliver goods which are free from any right or claim of a third party based on 
industrial property or other intellectual property under the law of the State where the goods 
will be resold or otherwise used (if it was contemplated by the parties that the goods would be 
resold or otherwise used in that State) or under the law of the State where the buyer has his 
place of business. However, this rule does not concern our problem. The existence of rights and 
claims of a third party is indeed normally relevant because the seller fails to transfer the full 
property of the goods and the buyer is therefore deprived, totally or partially, of what he is 
surely entitled to under the contract and the Convention.224   
 
Under the Convention the right solution has to be found on a case by case basis according to 
the circumstances. In general terms it may be said that the fact that the buyer makes known to 
the seller the country where the goods are to be used, is insufficient to bind the latter to deliver 
goods meeting the administrative and statutory requirements of that country.225 In practice, the 

                                                           
221 Schlechtriem, p. 12, in Uniform Sales Law in the Decisions of Bundesgerichtshof. It is rather interesting to note the effects of 
the mussel case; in a dispute between an Italian seller and an American buyer, the plaintiff challenged the arbitral award 
alleging that the arbitrators exhibited manifest disregard of international sales law and that they refused to follow a German 
Supreme Court case interpreting the CISG. The plaintiff's claim was, however, dismissed. U.S. District Court, Eastern District 
of Louisiana 17.5.1999. 
222 Cour d'Appel de Grenoble 13.9.1995 
223 LG Ellwangen 21.8.1995, Further to the delivery of the second installment the German buyer received an official warning by 
a German association of spice traders that paprika imported from Spain could contain traces of a harmful substance in a 
quantity greater than the levels admitted by a German law. A subsequent examination of the paprika delivered by the seller 
confirmed the suspicions. See Veneziano, p. 45 When drafting the Convention, there were several suggestions pro e contro. ICC 
stated that the seller cannot be responsible for the conformity of the goods with administrative regulations in the buyer's 
country. Such non-conformity would not touch on the purpose for which they are ordinarily used and the question whether 
they would be fit for the particular purpose of being used in the buyer's country would have to be answered by application of 
paragraph (1)(b).  
 
224 Bianca - Bonell, p. 282 
225 Bianca - Bonell, p. 283 



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56 

sellers of international commerce tend to include in their general conditions of sale clause «the 
Products are manufactured in conformity of the State of manufacture.» Of course this is just 
one effort trying to avoid problems deriving from national legislations and their diversity, but it 
has proved to be a rather useful one.226 Certainly the mussels' case is important not only for the 
application and interpretation of the CISG, but also for cases to be decided under the 
Bundesgesetzbuch.227 However, one must nonetheless hope that this decision is not yet the final 
word on this question. 228 
 
In principle, the buyer has to require performance of the contract if there is any lack of 
conformity under Article 35 CISG. If an insufficient quantity has been delivered he may 
therefore first of all demand delivery of the missing quantity (Articles 51(1) and 46(1)). If the 
lack of conformity takes another form (wrong quality, delivery of an aliud), the right to require 
performance, in the form of the delivery of substitute goods, exists only in so far as the lack of 
conformity represents a fundamental breach of the contract. Repair of the goods may be 
required, unless it is unreasonable to do so. Avoidance of the contract on the grounds of lack of 
conformity is only possible if the lack of conformity amounts to a fundamental breach of 
contract. In the case of goods intended for resale, even slight defects in quality in respect of 
which a repair is not possible or is unreasonable or is not performed by the seller, are likely to 
amount to a fundamental breach of contract. However, if the buyer can reasonably sell the 
imperfect goods elsewhere, there has been no fundamental breach. Moreover, in the case of 
lack of conformity under CISG Art. 35, also in the case of delivery of an insufficient amount, 
the buyer has a right to a price reduction under CISG Art. 50 and to damages under CISG Art. 
74. As regards lack of conformity as a defense to a claim for payment of the price, the rules are 
laid down in CISG Art. 58. 229   
 
In the Finnish jurisprudence it has been stated, that the mere fact that the buyer let the seller 
know the destination of the goods (i.e. the country) the seller is obliged to provide the goods 
conforming the circumstances of the destination.230 It has to be emphasized that the seller 
actually couldn't have been unaware of the destination. Determining point is the moment of 
the conclusion of the contract. The reasoning behind this approach is the simple fact that the 
seller has to be in a situation to be able (1) to assess on which conditions he wants and can 
deliver the goods or (2) inform the buyer of his inability to deliver the goods conforming with 
the contract. 231 This view differs to some extent from the international approach. 
5.7.2 The UK: Merchantability of the goods 
The case Summer Permain & Co v Webb & Co Ltd232 reflects the English position. The sellers sold 
Webb's Indian Tonic to the buyers, which they knew the buyers intended for resale in 
Argentina. The tonic contained a quantity of salicylic acid that, unknown to both parties, made 
its sale illegal in the Argentine. When the tonic reached  Argentina, it was seized and 
condemned by the authorities as unfit for human consumption. It was held that there had been 
                                                           
226Another problem is, whether the general conditions of sale ever really became a part of the contract, since they are regrettably 
often enclosed to the invoice. It can be successfully argued, that the contract is concluded at the moment of acceptation of the 
offer, on conditions given above and that the conditions added afterwards do not bind the buyer.   
 
227Bundesgesetzbuch (BGB) is the German Civil Code 
228 Schlechtriem, p. 12, in Uniform Sales Law in the Decisions of the Bundesgerichtshof 
229 Schlechtriem, p. 287 
230 When the goods lack a certain character that the goods of that kind do not usually have, the buyer is entitled to consider the 
goods non-conforming  if that certain character was agreed upon.  Aaltonen, p. 102 
231 Wilhelmsson - Sevòn - Koskelo, p. 105 
232 (1922) 1 KB 55 



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no breach of section 14(2) as the goods could not be said to be non-merchantable by virtue of 
the provisions of Argentinean law. There was nothing wrong with the quality of goods, which 
could have been resold by the buyers anywhere except in the Argentine. Goods were not non-
merchantable merely because they were not fit for the particular purpose. The buyer's 
complaint was really that the goods were not fit for the purpose they were sold, but they also 
failed under section 14(3) because they had ordered them under their trade name. Atiyah claims 
that it is quite unreasonable to expect sellers to know the rules of law in operation in every 
country from which orders emanate, or into which a buyer wishes to export. These are matters 
within the sphere of knowledge of the buyer/exporter. It would be different if the seller had 
taken active steps to penetrate a target market so that the seller could be said to be exporting 
into that market.  233 
 
Merchantability of the goods is an important aspect of a contract for the sale of goods. The Sale 
of Goods Act of 1979 included merchantability in two separate sections. These are: 
14(2) Where the seller sells goods in the course of business, there is an implied condition that 
the goods supplied under the contract are of merchantable quality, except that there is no such 
condition: 

(a) as regard defects specifically drawn to the buyer's attention 
before the contract is made; or 

(b) if the buyer examines the goods before the contract is made, as 
regards defects which that examination ought to reveal. 

 
15(2) In the case of contract for sale by sample there is an implied condition -  

(a)  that the goods shall be free from any defect, rendering them 
non-merchantable, which would not be apparent based on a 
reasonably undertaken examination. 

 
The Sale of Goods Act of 1893 did not define what «merchantability» meant, leaving it to be 
determined on a case-by-case basis. This led to an accumulation of case law of some 
considerable proportion surrounding the term «merchantability.» Those who opposed defining 
merchantability argued that any definition of that word in a statute would result yet again in 
the accumulation of case law, interpreting the statutory definition. Despite the force of this 
argument, the legislature defined merchantability in the 1979 statute as stated previously.  
 
The 1994 Act substituted the «merchantability» by «satisfactory» but the importance of the 
merchantability in the sale of goods cannot be underestimated. It is the key to finding an 
obligation of the seller to provide goods of the quality that is commercially saleable. Another 
thing important to note is that the merchantability provisions apply only when the seller is in 
the course of a business. The Act of 1893 had no such a provision. Therefore, the 
merchantability provision in the 1979 Act would not apply to a sale if the sale was a private sale 
or if the agent who is selling were to inform the buyer that he was acting as an agent for a 
private seller. However, in international sale, it is most unlikely for a buyer to deal with a 
private seller. Sales of the type considered here are always with an established company or 
suppliers or manufacturers who sell in the course of their business. It might also be pointed out 
that where the sale is by sample, the merchantability provisions apply whether or not the sale 
was made in the course of business. It is most unusual that a sale by sample could take place 

                                                           
233 Atiyah - Adams, p. 143 



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with a private seller. Private sellers are not in the habit of submitting samples at the pre-
contractual stage. 234 
 
The celebrated decision of Ashington Piggeries Ltd v. Christopher Hill, laid down the implications 
of merchantability under the Sale of Goods Act of 1893. The decision is applicable to the same 
provisions in the 1979 Act. In that case, the appellants contracted with the respondents to 
prepare a particular type of food for feeding mink, from a formula supplied to them. The 
respondents had been in the business of manufacturing feed for poultry, pheasants, calves and 
pigs, but never before for mink. However, they accepted the challenge and agreed to produce 
the feed for which herring meal was one of the ingredients. The earlier preparations caused no 
problems but the later preparations for which Norwegian herring meal was used, did.  It was 
later found that the meal was contaminated with DMNA. This contaminant caused the deaths 
of a number of minks. The appellants successfully sued the respondents for a breach of section 
14(2) of the 1893 Act, which required the goods to be merchantable. The House of Lords held 
that the requirement that the goods bought for the purposes of section 14(2) should have been 
bought from the seller who sold goods »good of that description» was satisfied when the goods 
in question were bought from a seller who sells »goods of that kind.» The respondents were in 
business of selling animal feed to poultry, pheasants, calves and pigs, and these were goods of 
the same kind as those that the appellants ordered. The courts held that there was also a breach 
of section 14(1). The buyer had informed the seller of the particular purpose for which the 
goods were required so as to show that the buyer proposed to rely on the skill and judgment of 
the seller who dealt with goods of that description. Having first decided that the goods of that 
description in the statute were tantamount to goods of that kind, the court held that the mink 
feed provided by the seller did not reasonably fit the purpose which the buyer had 
communicated to the seller, this being that the buyer intended them to be used for feeding the 
mink. This breached section 14(1).    
 
The buyer was free under section 14(1) to rely wholly on the seller's skill and judgment or rely 
partially on it. In the present instance, the reliance was partial and the seller's liability was to the 
extent to which the reliance was placed. It was partial because the seller was required to provide 
the meal according to a formula supplied by the buyer.  In international sales transactions, the 
buyer normally deals with the seller and vice versa, at a distance. The buyer would, therefore, 
usually prefer to rely on the skill and judgment of the seller. The seller would be left to select 
the best possible product for the purpose that the buyer would expressly or impliedly make 
known to the seller. The seller in such a situation will be bound by both subsections 14(1) and 
14(2) of the 1893 Act. 235   
 
                                                           
234  (1972) AC 441 1 All ER 847 
235 Ashington Piggeries may be compared with Henry Kendall & Sons v. William LiliCo & Sons Ltd (1968) 2 All ER 444, 2 AC 
31, 3 WLR 110. The plaintiffs bought, for feeding their pheasants, animal feeding stuff from the defendants. The feeding stuff 
contained Brazilian groundnuts which were suitable for feeding cattle but not other animals. The plaintiffs lost some of the 
pheasants and alleged that the feed sold was non-merchantable. The House of Lords held against the plaintiffs. The point made 
by the House of Lords was that unless the buyer had made the seller aware both of the purpose for which the goods were 
required, and that the buyer was relying on the seller's skill and judgment to produce such goods, the goods supplied would not 
be non-merchantable because they did not suit the purpose which the buyer had in mind when the goods were bought. As long 
as the goods were suitable for some other purpose the goods were clearly merchantable. Alluding to this line of thinking, Lord 
Reid wrote: »He ought either to have taken the necessary steps to bring sub-s (1) into operation or to have insisted that a more 
specific description must be inserted in the contract.» The alternative which the buyer had, other than invoking subsection (1) 
of section 14 of the 1893 Act, was to ensure that a specific description of the goods he required was clearly included in the 
contract. That too would be sufficient to protect the buyer's interest in receiving the type of goods he desired to receive. »Fitness 
for the purpose» is thereby linked to »merchantability» of the product. Marasinghe, p. 154 



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59 

Thus, there were two approaches to the issues of deciding what the meaning of «merchantable 
quality» was. On the one hand, there was the view that the statutory definition really had little 
substantive content. The basis for this view was that vague, general terms like «merchantable» 
tend to be meaningless in practice - indeed, a substantial degree of flexibility is needed in 
applying such general terms because of the very varied transactions that come within the law of 
sale of goods. The same can be said of the term «satisfactory.» All vague statements or 
definitions of the standard of quality required by law, it may be suggested, are somewhat 
vacuous in practice. They tend to be replaced with concepts of reasonableness that have 
substantial flexibility. Most such standards give little guidance as to what kind of defects or 
damage will render goods unsatisfactory (non-merchantable under the former provisions), and 
are not of assistance in the practical application of the law. All rely heavily upon the test of 
reasonableness: would a reasonable buyer, if he knew the condition of the goods, accept them 
under the contract? Would a reasonable buyer expect goods of that condition to be delivered 
under that sort of contract? Tests, which depend so heavily upon standards of reasonableness, 
need to be somewhat circular in practice. What is the buyer entitled to expect under the 
contract? Answer - goods of satisfactory/merchantable quality. What is 
satisfactory/merchantable quality? Answer - goods of that quality - roughly speaking - which can 
reasonable be expected. What would the buyer reasonable expect? Answer - goods suitable for 
reasonable use. What is reasonable use? Answer - the sort of use which a reasonable buyer 
would intend, but also the use that was disclosed to the seller in the moment of the conclusion 
of the contract. And so on. 236 
 
On the other hand, there was a Court of Appeal decision Rogers v. Parish (Scarborough) Ltd237 
which suggested that the statutory definition of «merchantable quality» could in most cases be 
applied by a fact finder without any detailed analysis of old case law. It must be suggested that 
the reasoning in this case was fallacious. The Court assumed here that the application of any 
statutory definition in the old section 14 was a question of fact, but the introduction of 
reasonableness into the definition meant that questions of evaluation were necessarily involved. 
It is not possible to posit the «reasonable man» and ask how he would behave as though that 
were a question of fact. How a reasonable man would behave in any given circumstances is not 
a fact, but an evaluation. Questions of reasonableness require the court to provide the answer 
based on its sense of justice, but that means that detailed analysis and illustration must remain 
necessary unless every case is to be disposed of by an appeal to the court's idiosyncratic views on 
what justice demands. That would surely be quite unacceptable in such a large and important 
area of law as this. This same point can be made in relation to the new section, which provides 
that goods are satisfactory if they meet the standards that a reasonable person would regard as 
satisfactory.238  
 
 
6 CONCLUSION: THE CISG AND ENGLISH LAW COMPARED 

According to Article 35(1) of the CISG, the seller is bound to deliver goods that are of the 
quality and description required by the contract. Without analyzing the distinction between 
quality and description, Article 35(2) then goes on to provide that the goods do not conform 
unless they satisfy the following four cumulative requirements: fitness for the purpose for which 

                                                           
236 Atiyah - Adams, p. 140 
237 (1987) QB 933 
238 Atiyah - Adams, p. 141 



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the goods of the same description would commonly be used; fitness for any particular purpose 
expressly or impliedly made known to the seller at the time of the conclusion of the contract, 
except where the buyer either does not rely or unreasonably relies upon the seller's skill and 
judgment; possession of the qualities of goods held out as a sample or model; and packaging or 
containment in a manner adequate to preserve and protect the goods. A buyer who succeeds 
under paragraph (2) will nevertheless fail under paragraph (3) if actually or imputedly aware of 
the lack of conformity of the goods at the contract date.239 The material on fitness for purpose 
in CISG Article 35 substantially tracks its counterpart in English law. An English court, in the 
spirit of internationalism imposed as a rule of interpretation by Article 7(1) of the CISG, 
should be open to the interpretation of other courts and sensitive to features of English law 
that have lent a slant to the interpretation of fitness for purpose in the Sale of Goods Act. For 
example, other courts might interpret «particular purpose» as special purpose and not as a 
commonplace purpose, in the way that English courts have. Given the other elements of the 
CISG Article 35, however, this point may have no great particular importance.240 
 
6.1 Fitness for all ordinary purposes 

Until changes in the law brought om by the Sale and Supply of Goods Act 1994, it could have 
been said that a seller, in order to comply with what was then the implied term of merchantable 
quality, needed to supply goods that were fit for only one of their ordinary purposes.241 A buyer 
seeking their fitness for a particular one or more of these ordinary purposes therefore had an 
incentive to make this known to the seller so as to display the reliance on the seller's skill and 
judgment under section 14(3). This position accorded with the remnants of the caveat emptor 
rule. The onus was on the buyer to disclose and not on the seller to interrogate. The revised 
merchantable, now satisfactory, quality term requires the goods «in appropriate cases» to be fit 
for all the purposes for which goods of the kind in question are commonly supplied. No such 
qualification, however, is to be found in the CISG Article 35. Suppose that the goods are not 
fit for one of these purposes and that the buyer either states at the contract conclusion date that 
he needs goods for another purpose, or states that he has no intention to apply the goods for 
the purpose for which they are unfit (and further does not use them for that purpose). In the 
former case, the buyer changes his mind and, in the latter, he opportunistically pounces on 
their selective unfitness in order to reject the goods and avoid the contract. An English court 
applying section 14 should conclude that liability is not appropriate in these two cases. A court 
applying CISG Article 35 has no such resort but might interpret that provision in accordance 
with good faith to conclude that the buyer has no claim. 242 
 
6.2 Variable standard 

Although there is no cross-reference of paragraph (2) to paragraph (1) of CISG Article 35, the 
general rule of contractual conformity is to be found in the latter provision that measures the 
compliance with quality and description by reference to what is «required by the contract.» The 
express requirements of the contract will vary from case to case but there is no reference in 
paragraph (1) to an implied standard that is equivalent to satisfactory quality in section 14(2) of 
the Sale of Goods Act, which takes into account of description and all relevant considerations, 
                                                           
239 The relationship between paragraphs (1) and (2) of Art. 35 could be clearer. The latter paragraph cannot be regarded as a 
particular restatement of the former. In particular, the former requires the seller to deliver the agreed quantity; nothing in the 
latter speaks to quantity. 
240 Bridge, p. 80 
241 Note previously Kendall v. LilliCo 
242 Bridge, p. 81 



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which may include the price. Taking account of fitness for all ordinary purposes and giving a 
broad reading to description, it may be that in the absence in CISG Article 35 of a broad, 
implied variable quality standard makes no practical difference. Suppose, for example, that 
inferior goods are sold as a discounted price in a way that may persuade an English court that 
there has been a breach of section 14(2). It is very likely that some descriptive language will 
permit a court applying CISG Article 35 to reach the same result. If there is no such qualifying 
language, a court might determine the scope of ordinary use by reference to the price paid. 243 
 
6.3 Description 

As stated before, description in the English law of sale is a difficult and technical concept. At 
one time, it was capable, in the case of unascertained goods, of embracing more or less all 
attributes of those goods. Since the implied term of correspondence with description was a 
statutory condition, this meant that each and every descriptive statement was tantamount to an 
express contractual condition, so that the buyer could reject the goods and terminate the 
contract no matter how trivial the injury. As reaction set in against this position, description 
was confined to the essence or identity of the goods. 244 The practical consequence of this was 
that the law on description was brought into line with law on express warranties, where a 
breach in matters of quality and condition was treated as the breach of an intermediate 
stipulation, with the result that the buyer could reject the goods only if able to demonstrate a 
substantial deprivation of benefit. 245 In the case of Article 35 of the CISG, however, it should 
be understood that description came into the text without its English history. The avoidance 
rules of the CISG do not allow for a technical exercise of rejection rights. In consequence, there 
is no reason to give anything other than a straightforward reading to the word in CISG Article 
35.246 
 
6.4 Reliance and examination 

CISG Article 35 contains no exception based upon the buyer's examination of the goods, in the 
way that section 14(2C) of the Sale of Goods Act does.247 It does however state in paragraph (3) 
that the buyer may not complain of a lack of conformity pursuant to CISG Article 35(2) where 
there is actual or imputed notice of lack of conformity. This test may be somewhat more 
generous to the buyer who carelessly examines the goods than is English law. A further point 
concerns descriptive statements where the buyer does not in fact rely upon the seller. This was 
sufficient to persuade a majority of the court in Harlingdon and Leinster Enterprises Ltd v. Hull 
Fine Art Ltd248 that the seller had not committed a breach of the description condition in 
section 13 of the Sale of Goods Act, which took the law in a new direction. There does not 
appear to be any warrant in CISG Article 35 for so restricting the seller's liability. Arguably, if 
the buyer has paid a certain price for goods described in a particular way, he should be entitled 
to reject the goods or claim a reduction of the price if a painting like that sold in the above case 
proves to be a forgery. There are few signs of any commitment to the caveat emptor ethic in the 
CISG.249 
 

                                                           
243 Bridge, p. 81 
244 Note previous Ashington Piggeries v. Christopher Hill 
245 See earlier presented Cehave NV v. Bremer Handelsgeschellschaft mbH   
246 Bridge, p. 82 
247 This covers both actual examination and defects especially drawn to the buyer's attention.  
248 (1991) 1 QB 564 
249 Bridge, p. 82 



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6.5 Express warranty and misrepresentation 

The Sale of Goods Act contains no provision on express warranty. It is submitted that CISG 
Article 35 should be read expansively to catch express warranty: goods are of the quality and 
description «required» by the contract if they conform to the seller's express warranties. 250 This 
will minimize discord between English courts and foreign tribunals if the latter do not recognize 
express warranties as such in those terms. Misrepresentation presents a more challenging 
problem. One possibility is a statement made by the seller about the goods which is not 
incorporated as a term. Another is a statement that is incorporated as a term but, under English 
law, also retains its separate identity as an inducing misrepresentation.251 Under domestic 
English sales law, it is a matter of some difficulty to accommodate the law on misrepresentation 
and the law on breach of the contract of sale. According to section 1(a) of the 
Misrepresentation Act 1967, the victim of a misrepresentation that becomes a term does not 
thereby lose the right to rescind if otherwise he would be able to rescind the contract. In the 
case of misrepresentation that does not become a term, any incongruity in allowing the drastic 
remedy of rescission for a statement not important enough to constitute a contractual term can 
be dealt with by an exercise of the court's discretion under section 2(2) to declare the contract 
subsisting and award damages in lieu of rescission. Where the misrepresentation becomes a 
contractual term, the Court of Appeal has, in one case252 declined to allow rescission when the 
higher right of rejection for breach of condition had been barred by an acceptance of the goods 
under section 35 of the Sale of Goods Act. 253 
 
6.6 Misrepresentation and the CISG 

If the English courts were to exercise their discretion under section 2(2) of the 
Misrepresentation Act 1967 to declare the contract existing consonantly with the test of a 
fundamental breach in Article 25 of the CISG, there would be no true discord between 
misrepresentation and the CISG. That discretion, however, was never meant to be exercised so 
extensively in a system of law that such a generous range of express and implied terms 
permitting contractual termination in the event of any breach would exist. If the law on 
misrepresentation were to run parallel to the CISG in English law, it would undermine the 
treatment by the latter of contractual avoidance for breach, unless English courts were able to 
take the approach in Leaf v. International Galleries and apply it imaginatively to a case where 
under the CISG, there never was a right of rejection and contractual avoidance. It is not easy to 
take this extra step when section 1(a) of the Misrepresentation Act is so clear on the survival of 
a misrepresentation as a misrepresentation despite its incorporation in the contract is a term. 
Failing a solution along the lines of Leaf, there does not appear to be an answer in the CISG 
itself. It cannot be said that the contract requires goods of a certain quality or description when 
a misrepresentation dealing with quality or description does not become a contractual term. 

                                                           
250 It is more difficult to fashion a role for express warranty in the CISG where the seller's statement does not deal directly with 
the goods. It may, for instance, relate to the existence of servicing facilities or spare parts. To avoid the difficulties of dépeçage, 
i.e. one agreement is governed by several legal systems, with express warranties being divided between the CISG and the 
otherwise applicable law, a court should not demand too direct a link between the statement and the very goods supplied.  
251 In the case of both warranties and misrepresentations, the CISG permits an objective interpretation of the seller's statement 
in a way familiar to common law lawyers: Article 8. Nevertheless, Art. 8(3) permits interpretation on the basis of subsequent 
conduct of the parties, not the case in English law. 
252 Leaf v. International Galleries (1950) 2 KB 86 
253 Bridge, p. 83 Is this consistent now with section 1(a) of the 1967 Act, or may the language of that provision be interpreted 
broadly to catch, not just the ordinary rescission bars, but also the particular bar introduced in Leaf v. International Galleries? 
The approach taken in the said case could, where the term is an intermediate stipulation whose breach does not go to the root 
of the contract, be mimicked by deeming it to be a condition for the purpose of the acceptance bar on rejection.   



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63 

The best approach would be to exclude the doctrine of misrepresentation and not to apply the 
Misrepresentation Act in the case of contracts governed by the CISG that, since 
implementation of the CISG requires primary legislation, could be achieved on that occasion. 
 
For practical purposes misrepresentation operates parallel with the rules on breach of contract 
in English law. There would also be scope for the law of mistake in cases of serious 
misrepresentation if the doctrine of misrepresentation had not already occupied the field. To 
say that all misrepresentations go to validity would breach the spirit of the CISG, but to allow 
the law of the mistake of present scope to fill any gap in English law vacated by 
misrepresentation would not. The matter would then be removed from the scope of the CISG 
by Article 4(a). This, of course, highlights another difficulty with the CISG and uniformity: 
different Contracting States will have doctrines of mistake of varying scope. Until uniformity of 
contract law is reached on the international stage, this problem will not be resolved. The 
difficulty of an expansive law of mistake overlapping the law on breach of contract, which can 
occur within a legal system, is addressed by Article 3.7 of the UNIDROIT Principles, which 
states that a party may not avoid a contract on the ground of a mistake in circumstances where 
there is a contractual remedy for non-performance. If a contract dispute were to be governed by 
both the CISG and the UNIDROIT Principles, it could be a difficult question whether Article 
3.7 defers to the non-performance rules of the CISG as well as the non-performance rules of the 
UNIDROIT Principles themselves.254 
 
 
7 FINLAND: CONCLUSIONS 

According to Finnish writers, deficiency of the goods can bee seen as a two-fold concept, the 
first layer being an objective (abstract) level and the second being a subjective (concrete) level. 
However, a view this narrow can hardly bring a satisfying result; a more in-depth analysis is 
required. In the Finnish doctrine have been studies among others, the following aspects of 
deficiency: visible/hidden; relevant /irrelevant, discrepancies in the quantity agreed upon and 
the quantity actually delivered. 
 
In search of a solution when it comes to visibility of a mistake, the answer could be found 
studying the parties' obligations to examine the goods. It is here when the professionalism or 
ignorance of the parties do count. While it can be concluded that the professional party can be 
deemed liable when reasonable diligence has been neglected, it cannot be alleged that the 
ignorance of a contracting party could be a valid excuse in doing so. This approach would 
discourage diligent commerce; the more one is diligent, the more would be required and vice 
versa. When assessing the relevance or irrelevance of the defect, the non-conformity is usually 
considered irrelevant if the defect does not hinder the ordinary use of the goods. If a 
contracting party could reject the goods, discharge the contract or even claim damages even for 
a minor deficiency, the certainty of law would be endangered.255 Defining what is «relevant» has 
to be established on a case-by-case basis; it may seem rather futile to try to construct artificial 
rules while they do not serve in concreto. 256 
 

                                                           
254 Bridge, p. 84 See also his analysis on the differences between the two regulations in »The International Sale of Goods 
Revisited» , p. 143 onwards. 
255 Godenhielm, p. 119 
256 Godenhielm, p. 123 



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64 

In practice, the importance of assessing the deficiency of the goods lies on its sequences; 
whether the buyer may rely on the non-conformity or not, and thereafter rely on the remedies 
provided by the rules of law. In order to evaluate the non-conformity, Aaltonen has prepared a 
two-picture-construction, which clarifies his thought. The construction consists of, two circles, 
first of which is actually a composition of one small and one big circle, which have the same 
counterpoint. The space outside the bigger circle reflects the conformity of the goods, while the 
space between the bigger and the smaller circle indicates the position of a minor defect of the 
goods. As long as we remain in these two zones the deficiency is of minor nature and the buyer 
can hardly rely on it, but when we move inside the smaller circle, we enter the zone of a kind of 
deficiency which does matter and to which the buyer can rely on. In order to point out the 
significance of the seller's guarantees and warranties, Aaltonen draws his second circle; this one 
is divided into sectors, each of which reflects a certain character of the goods. Thus, if we think 
of the position of a buyer who has contracted on a fabric of a certain color, his possibilities to 
rely on alleged defects is not anymore limited to the inside of the inner circle, but has enlarged 
till the border of the outer circle. It is prudent to note here that this construction does not 
allow us to take into account consequences, which would render the construction aleatory, 
since the relevant sector of our picture being from the remedies' point of view is rather variable.  
This is proved, for instance, by assuming that the buyer of non-conforming goods accepts the 
delivery, despite of the defects. In the event of the acceptance, the buyer cannot rely on non-
conformity at all. Hence, we can conclude that the concept of conformity - and non-conformity 
- should be constructed remaining strictly on the ambit of the defect. The concept is, however 
destined to remain somehow vague and thus renders the exact definition impossible. Non-
conformity may be described and analyzed from various points of view. It may vary according to 
the objectivity or subjectivity of the narrator, but still remain largely beyond exact legal 
definitions, not least for the enormous variety of the situations where it may appear. Aaltonen 
withdraws himself from further definitions and simply states that the goods are defective if they 
are not as they were bought. 257 
 
 
8 THE U.K. VS. THE CISG 

There has been much debate of late as to whether the United Kingdom should ratify the 
Convention; critics on the Convention have not merely asserted the superiority of English sales 
law, but have argued that the Convention itself is incomplete and uncertain. By the time of the 
ratification of the newly prepared CISG, the Law Society of England and Wales made the 
following objections to the Convention: 
 

1. The Convention will not produce uniformity because it will be subject to differing 
national interpretations; 

2. Sophisticated commercial traders will find it easy to avoid the provisions of the 
Convention; 

3. The Convention will more commonly apply by default, given the working of the 
Convention's «opt-out» provision; 

4. The Convention will result in a diminished role for English law within the international 
trade arena. 

5.  

                                                           
257 Aaltonen, p. 148 



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65 

One must assume that the latter reason is a major explanation for the dislike of the Convention 
in the United Kingdom.258 Some commentators believe that the Convention represents «a 
sensible compromise» incorporating «a prodigious amount of work and international 
collaborations spread over years» or simply «as good as can be expected.» On the other side, as 
the list of contracting states grows, an organized regulation of sales contracts at an international 
level begins to develop and this has obvious attractions as the business community across 
differing economic and political systems begins to speak in the same legal language. Indeed, one 
of the strengths of the Convention is that it is based upon accepted practices of international 
transactions and is ready to incorporate trade usages into its framework. Again it is strongly 
driven by a policy that the parties should be free to contract and is not overbearing in its 
regulation of international sales. This is a delicate balancing act, but the Convention seeks to 
achieve a form of lex mercatoria that sets the boundaries of commercial sales transactions in a 
clear, well-defined fashion leaving the parties to divide the middle ground. Indeed the 
autonomy of the parties is recognized in its final form by the Convention permitting the parties 
to exclude, in whole or in part, the application of its provisions. Proponents of this viewpoint 
can argue legitimately that where the legal, economic and political systems vary as widely as 
those of the signatories to the Convention, attempts at the total unification of sales law would 
be absurd. Rather what is needed is a law that governs international sales as a separate species of 
transaction. Such contracts do attract particular legal problems - not least conflict of laws. The 
vagaries of private international law may leave business parties in considerable doubt as to the 
law applicable to the contract. On this view, the Convention provides an island of certainty 
amid the stormy seas of international law.259  
 
However, an extra effort is needed to emphasize advantages of the Convention to businesses 
and lawyers in the U.K. As Lord Steyn noted in 1994, English lawyers, judges and politicians 
have a history of hostility towards multilateral conventions in general, which has already in the 
last century resulted in delayed ratification by the UK of some international treaties and 
conventions which have subsequently proved to be extremely successful. Nevertheless, the 
lawyers in the U.K. have a duty to be able to advise their clients on the suitability of the CISG 
for a particular transaction and this requires a knowledge of the substantive law contained in 
the CISG in addition to an understanding of how the CISG is viewed in other countries 
involved in the transaction.260 
 
One of the criticisms leveled against the CISG in the U.K. is that it does not match up to 
English standards of precision and drafting. It is well known characteristic of the common law 
that it favors concrete legal solutions to specific problems as opposed to general broad 
principles. In contrast, the drafting style of the CISG is often left open, firstly to encourage the 
development an application of general principles and secondly because in some cases, a more 
concrete solution could not be agreed upon the Diplomatic Conference. However, the 
extensive use of indefinite legal concepts and the abstract nature of many norms in the CISG 
does not lie well with the expectations of the English legal community, who argues that 
ambiguity in legislation leads to uncertainty in the law, which is especially undesirable in the 
tradition of commercial law.261 
 

                                                           
258 Lee, p. 132 
259 Lee, p. 146 
260 Williams, p. 10 
261 Williams, p. 10 



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The drafting style of the CISG also belies a more fundamental difference with the English law. 
The emphasis on the general principles, allows for a more subjective approach to the 
interpretation of the contract in contrast to the objectivity of the English courts when 
interpreting the contract. The emphasis is on finding justice in the individual case as opposed 
certainty in contracts. This is similar to the approach taken in civil law countries, where a 
contract is enforceable if the court can find a subjective agreement between the parties 
(consensus ad idem - meeting of the minds).262 
 
 
9 COMMENTS 

The distinction among the various categories of lack of conformity is certainly not easy. This is 
confirmed by the criticisms made by several authors. The in-depth analysis made by many 
authors, and the tormenting case law, do not always allow us to keep the general framework 
clear. The following remarks are consequently intended to serve for this purpose.  
 
The delivery of goods other than those agreed upon seems to remain an entirely different 
concept from the delivery of the goods agreed upon. Examples include the delivery of a painting 
by an unknown painter instead of one from a specific painter that had been warranted, or of 
wine instead of  liqueur, or of a goat instead of a sheep. One may be tempted to point out that 
this will not happen very often, but it may happen and has happened. It has been put forward 
against this distinction that in case of delivery of other goods the seller a fortiori should be 
protected by a duty of a buyer to give an immediate notice of complaint, such as it is provided 
for in the case of defects and lack of quality, instead of being subject to the longer terms for the 
general action for breach of contract. However, if the purpose of the complaint is to allow the 
seller to immediately check the merits of the complaint, it seems much more difficult and 
urgent to establish the existence of a defect or lack of quality than it is a total difference, in the 
goods delivered since, as a rule, the delivery of other goods does not have to be ascertained 
immediately.  
 
The proper functioning, which has been contractually warranted, is also a sufficiently clear 
notion and, in fact, it has given rise to fewer disputes than the other classes of lack of 
conformity. The class of «defects», seen as a deficiency of the sold assets is also homogenous. As 
we have seen, bad wine, chipped bricks, and a scratched painting are typical examples of 
defects. It is suggested that the category of lack of quality may remain homogenous if its notion 
remains centered on the concept of quality as a merit of the goods being of a superior level in 
the desired attributes of the goods. In other words, they may be goods without defects but also 
without a certain quality. Likewise there may be goods without defects that possess a quality, 
and it is possible that there are goods that possess a quality, but also a defect of deterioration. A 
classic example of quality is presented by first choice goods compared with others which are also 
free from defects but do not possess a specific quality. Certainly when one confronts individual 
cases, it is possible to be faced with ambiguous situations. Setting foot on the dangerous 
territory of exemplification, the delivery of a cheese of the requested type, but not of the 
requested variety of cheese, or the supply of wine produced in a different year, seem to 
constitute lack of promised quality, while the delivery of a type of normal lambskin instead of 
astrakhan seems to be the delivery of another type of goods because of their different origins, 

                                                           
262 Williams, p. 11 



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67 

the same conclusion must be made if a wine of a different producer is delivered. An example of 
a quality essential for use, which is made by the doctrine, is the minimum length of a pair of 
trousers.  263 
 
In the framework of the international organizations and the conventions, the emphasis must be 
placed on the uniform interpretation and application. Indeed, the wide acceptance and 
effective implementation of existing texts might be of greater value than the elaboration of new 
texts. Thus, although it is important to keep on eye on the real challenges that lie ahead, a new 
approach must be taken to allow successful interpretation and application of substantive 
unified rules. 
 
However, in the application of unified rules the parties desire the same outcome as they would 
seek in a purely domestic matter - that is, predictability, efficacy, equity and finality. 
Furthermore, they also expect that their dispute will be solved in an identical manner in all 
Contracting States. Although much has been done in order to achieve this goal - uniformity of 
solutions - diversity continues. Often the expectations of the parties involved in a dispute that 
must be solved in reference to unified rules clashes with the actual application of unified rules 
by municipal courts. This implies that the search for the most favorable forum is not yet over 
and the main objective of the unification has not yet been achieved. 264 
 
The questions as to the necessity of general principles of law, such as the principle of good 
faith, in international trade law have been resolved by international arbitration The experience 
of international arbitration in relation to general principles of law demonstrates that the 
classical view of contracting parties as antagonistic individuals seeking to make maximum 
profits without any regard for the other party has been rejected by the international business 
community.  Although certainty and stability are needed in international dealings, flexibility 
has become increasingly important. It has been submitted that international trade conventions 
should acknowledge new complex reality and endorse the principle of good faith despite its 
inherent vagueness. However, it is important not only that the parties observe the good faith in 
their dealings but that national courts make use of the requirements of the principle of good 
faith while interpreting international trade conventions.265 
 
In the case of the CISG the question of uniformity in application and interpretation of its 
provisions acquires a special importance. According to Article 1(1)(b) for its application it is no 
longer necessary that a transaction has some connection with a Contracting State. It suffices 
that conflict of law rules of the court before which the dispute is brought lead to the application 
of the law of a Contracting State and that the places of business of the parties are in different 
states. Under those circumstances, it is certainly wiser to adopt the CISG and make it familiar 
to the business community of a non-Contracting State than to go against the mainstream.266  
 
Uniform law may also lead to benefits at both the macro and the micro level. Uniform law 
reduces legal differences between countries and, hence, creates a level playing field between 
competitors in different countries that no longer have cost advantages or disadvantages based 
on the level of the regulation in their respective countries. Uniform law thus avoids regulatory 

                                                           
263 Rubino-Sammartano, p. 255 
264 Kaczorowska, p. 54 
265 Kaczorowska,  p.127 
266 Kaczorowska, p. 56 



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competition between different countries and forces competitors to compete on terms (such as 
price and quality) other than legal terms of the transaction.267   
 
Finally, the unification may be used or might bring about an improvement of the law existing in 
the countries participating in the unification effort. In the former case, unification is used 
indirectly to achieve objectives of domestic policies of justice departments where one fears that 
otherwise objection to change in the law may be too great or where one lacks necessary 
resources to embark upon a re-codification venture. In most cases, however, national policies 
are aligned to the policies of the unification-formulating agency but may as a side effect lead to 
an improvement of the present state of law. However, there are no guarantees that uniform 
texts will per se be better than existing national law. Uniform law is not by necessity better law 
than national law. Sometimes the argument is advanced that uniform law is better than 
domestic law because it is specifically written for international situations and thus, takes the 
interests of international commerce into account. The argument that uniform law is better 
suited for international transactions since its substantive provisions give due and better 
consideration to the needs and interests of international commerce remains to be verified. For 
instance, some uniform texts268 have been extended in some countries or are being 
contemplated to be extended to domestic relations. This argument proves that texts relating to 
international situations can sometimes be extended without any problem to domestic 
transactions and casts some doubt regarding the specific features of these uniform instruments 
in relation to international situations. 269 

                                                           
267 However, in the European Union context, one has seen the opposite direction, particularly in the field of financial services 
where regulatory competition and deregulation and not total harmonization have been policy objectives. One might say that 
unification policies in this respect represent a tendency to centralize rule making at the international level where deregulation 
expresses a liberal, decentralized attitude towards unification. The former is based on the belief that unification matters and 
that the international scene should provide for a basis of cooperation between nation states. In commercial law, this would 
imply the need for a framework within which transactions and operations of merchants are encouraged. On the other hand, 
deregulatory policies would leave it to the market place to decide whether or not to develop uniform rules. Theoretically, this 
would ultimately lead to a race to the bottom and Delaware effects meaning that the market operators would choose rules that are 
least protective and least expensive. Both models in their extreme forms are Idealtypen which have been subject to scant 
empirical research. In the real world, one doesn't find either form but rather mixtures of both models in which these may be 
found in different degrees. De Ly, p. 528 
268 For example the 1929 Warsaw Convention, or the 1956 CMR 
269 De Ly, p. 529.  


	1 INTRODUCTION
	2 VIENNA CONVENTION
	2.1 Historical background - the need for a convention
	2.1.1 The position of the CISG in respect to national laws

	2.2 Comparing the ULIS and the CISG
	2.3 Interpretation of the CISG
	2.3.1 Linguistic problems

	2.4 The problems arising out of interpretation
	2.5 Steps taken to overcome obstacles
	2.6 CISG-Contract
	2.6.1 Approaches to interpretation
	2.6.2 Interpretation of a contract of sale


	3 THE GOODS
	3.1 The object of the sales contract: definitions of »goods» in the CISG
	3.2 The meaning of «goods» in the U.K.
	3.2.1 Different types of goods in the U.K.

	3.3 «Goods» in Finnish legislation

	4 LACK OF CONFORMITY
	4.1 The CISG rules regarding lack of conformity
	4.1.1 Practical importance of Art. 35
	4.1.2 Agreement between the parties
	4.1.2.1 Gap filling, parol evidence-rule


	4.2 Finland's rules of law on the conformity of goods
	4.2.1 Conformity with contract, section 17
	4.2.2 Information relating to the goods, section 18
	4.2.3 «As is» clause, section 19

	4.3 Relevant rules of law in the UK
	4.3.1 Parol evidence in the UK; what did the parties say or write?
	4.3.2 Conditions and warranties
	4.3.3 Implied condition as to title
	4.3.4 Innominate term
	4.3.4.1 Scope of the category of intermediate terms

	4.3.5 Fundamental terms
	4.3.6 Representations
	4.3.7 Scots law


	5 DETAILED ANALYSIS
	5.1 Quantity of goods
	5.1.1 The CISG
	5.1.2 Finland
	5.1.3 The UK

	5.2 Quality of the goods
	5.2.1 The CISG
	5.2.1.1 Goods unfit for ordinary use

	5.2.2 Finland
	5.2.2.1 Absence of an agreement
	5.2.2.2 Aliud pro alio

	5.2.3 The UK

	5.3 The purpose
	5.3.1 The CISG
	5.3.2 Finland
	5.3.3 The UK

	5.4 Sample or model
	5.4.1 The CISG
	5.4.2 Finland
	5.4.3 The UK
	5.4.3.1 Sale by description
	5.4.3.2 The relationship between the description and the quality or fitness


	5.5 Packaging
	5.5.1 The CISG

	5.6 Buyer's knowledge of non conformity
	5.7 Conformity to Requirements of the Law in Buyer's Country
	5.7.1 The CISG and the merchantability


	6 CONCLUSION: THE CISG AND ENGLISH LAW COMPARED
	6.1 Fitness for all ordinary purposes
	6.2 Variable standard
	6.3 Description
	6.4 Reliance and examination
	6.5 Express warranty and misrepresentation
	6.6 Misrepresentation and the CISG

	7 FINLAND: CONCLUSIONS
	8 THE U.K. VS. THE CISG
	9 COMMENTS