UNMIK/REG/2000/68

29 December 2000

REGULATION NO. 2000/68

ON CONTRACTS FOR THE SALE OF GOODS

The Special Representative of the Secretary-General,

Pursuant to the authority given to him under United Nations Security Council resolution 1244 (1999) of 10 June 1999,

Taking into account United Nations Interim Administration Mission in Kosovo (UNMIK) Regulation No. 1999/1 of 25 July 1999, as amended, on the Authority of the Interim Administration in Kosovo,

For the purpose of reconstructing and enhancing the economy of Kosovo and creating a viable market-based economy by providing for the regulation of contracts for the sale of goods,

Hereby promulgates the following:

Part I. Sphere of Application and General Provisions
Chapter 1

Sphere of Application

Section 1


The present regulation is based on the United Nations Convention on the International Sale of Goods, and accordingly shall be interpreted consistently with reported decisions on that Convention. For ease of reference, the organization and numbering system of the present regulation follows that of the Convention, with the exception that "sections" in the Convention are "subchapters" in the present regulation, and "articles" in the Convention are "sections" in the present regulation. Where the corresponding provisions in the Convention are not applicable and have been deleted, this is indicated by an asterisk under the relevant sections.


Laws inconsistent with the provisions of the present regulation are repealed.

Section 2

2.1 The present regulation applies to contracts for the sale of goods. "Goods" means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities and things in action. "Goods" also includes the unborn young of animals and growing crops and other identified things attached to but severable from realty.

2.2 The present regulation does not apply to sales:


(deleted)*;


by auction;


on execution or otherwise by authority of law;

of stocks, shares, investment securities, negotiable instruments or money;
of ships, vessels, hovercraft or aircraft;
of electricity.
Section 3

3.1 Contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production.


3.2 The present regulation does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or other services.

Section 4

The present regulation governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in the present regulation it is not concerned with:

the validity of the contract or of any of its provisions or of any usage;
the effect which the contract may have on the property in the goods sold.
Section 5

The present regulation does not apply to the liability of the seller for death or personal injury caused by the goods to any person.

Section 6

The parties may exclude the application of the present regulation or derogate from or vary the effect of any of its provisions.

Chapter 2

General Provisions

Section 7

(Deleted)*

Section 8

8.1 For the purposes of the present regulation statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what that intent was.

8.2 If section 8.1 is not applicable, statements made by and other conduct of a party are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances.

8.3 In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties.

Section 9

9.1 The parties are bound by any usage to which they have agreed and by any practices, which they have established between themselves.

9.2 In the case of contracts of an international character, the parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.

Section 10

For the purposes of the present regulation:


if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract;


if a party does not have a place of business, reference is to be made to his habitual residence.

Section 11

A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.

Section 12

(deleted)*

Section 13

For the purposes of the present regulation "writing" includes telegram, telex, facsimile, e-mail, and any similar form of electronic communication.

Part II. Formation of the Contract

Section 14

14.1 A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.

14.2 A proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers, unless the contrary is clearly indicated by the person making the proposal.

Section 15

15.1 An offer becomes effective when it reaches the offeree.

15.2 An offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer.

Section 16


Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.


However, an offer cannot be revoked:


if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or


if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

Section 17

An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror.

Section 18

18.1 A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance.

18.2 An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.

18.3 However, if, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price, without notice to the offeror, the acceptance is effective at the moment the act is performed, provided that the act is performed within the period of time laid down in the preceding paragraph.

Section 19

19.1 A reply to an offer, which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counteroffer.

19.2 However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.

19.3 Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.

Section 20

20.1 A period of time of acceptance fixed by the offeror in a telegram or a letter begins to run from the moment the telegram is handed in for dispatch or from the date shown on the letter or, if no such date is shown, from the date shown on the envelope. A period of time for acceptance fixed by the offeror by telephone, telex or other means of instantaneous communication, begins to run from the moment that the offer reaches the offeree.

20.2 Official holidays or non-business days occurring during the period for acceptance are included in calculating the period. However, if a notice of acceptance cannot be delivered at the address of the offeror on the last day of the period because that day falls on an official holiday or a non-business day at the place of business of the offeror, the period is extended until the first business day which follows.

Section 21

21.1 A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect.

21.2 If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without delay, the offeror orally informs the offeree that he considers his offer as having lapsed or dispatches a notice to that effect.

Section 22

An acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time, as the acceptance would have become effective.

Section 23

A contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of the present regulation.

Section 24

For the purposes of this Part of the present regulation, an offer, declaration of acceptance or any other indication of intention "reaches" the addressee when it is made orally to him or delivered by any other means to him personally, to his place of business or mailing address or, if he does not have a place of business or mailing address, to his habitual residence.

Part III. Sale of Goods

Chapter 1

General Provisions

Section 25

A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.

Section 26

A declaration of avoidance of the contract is effective only if made by notice to the other party.

Section 27

Unless otherwise expressly provided in this Part of the present regulation, if any notice, request or other communication is given or made by a party in accordance with this Part and by means appropriate in the circumstances, a delay or error in the transmission of the communication or its failure to arrive does not deprive that party of the right to rely on the communication.

Section 28

(deleted)*

Section 29

29.1 A contract may be modified or terminated by the mere agreement of the parties.

29.2 A contract in writing which contains a provision requiring any modification or termination by agreement to be in writing may not be otherwise modified or terminated by agreement. However, a party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct.

Chapter 2

Obligations of the seller

Section 30

The seller must deliver the goods, hand over any documents relating to them and transfer the property in the goods, as required by the contract and the present regulation.

Subchapter I

Delivery of the goods and handing over of documents

Section 31

If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists:


if the contract of sale involves carriage of the goods - in handing the goods over to the first carrier for transmission to the buyer;


if, in cases not within the preceding subsection, the contract relates to specific goods, or unidentified goods to be drawn from a specific stock or to be manufactured or produced, and at the time of the conclusion of the contract the parties knew that the goods were at, or were to be manufactured or produced at, a particular place - in placing the goods at the buyer's disposal at that place;


in other cases - in placing the goods at the buyer's disposal at the place where the seller had his place of business at the time of the conclusion of the contract.

Section 32

32.1 If the seller, in accordance with the contract or the present regulation, hands the goods over to a carrier and if the goods are not clearly identified to the contract by markings on the goods, by shipping documents or otherwise, the seller must give the buyer notice of the consignment specifying the goods.

32.2 If the seller is bound to arrange for carriage of the goods, he must make such contracts as are necessary for carriage to the place fixed by means of transportation appropriate in the circumstances and according to the usual terms for such transportation.

32.3 If the seller is not bound to effect insurance in respect of the carriage of the goods, he must, at the buyer's request, provide him with all available information necessary to enable him to effect such insurance.

Section 33

The seller must deliver the goods:


if a date is fixed by or determinable from the contract, on that date;


if a period of time is fixed by or determinable from the contract, at any time within that period unless circumstances indicate that the buyer is to choose a date; or


in any other case, within a reasonable time after the conclusion of the contract.

Section 34

If the seller is bound to hand over documents relating to the goods, he must hand them over at the time and place and in the form required by the contract. If the seller has handed over documents before that time, he may, up to that time, cure any lack of conformity in the documents, if the exercise of this right does not cause the buyer unreasonable inconvenience or unreasonable expense. However, the buyer retains any right to claim damages as provided for in the present regulation.

Subchapter II

Conformity of the goods and third party claims

Section 35


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.


Except where the parties have agreed otherwise, the goods do not conform with the contract unless they:


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


are fit for any particular purpose expressly or impliedly made known to the seller at the time of the 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;


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


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.

35.3 The seller is not liable under subsections (a) to (d) of section 35.2 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.

Section 36

36.1 The seller is liable in accordance with the contract and the present regulation for any lack of conformity, which exists at the time when the risk passes to the buyer, even though the lack of conformity becomes apparent only after that time.

36.2 The seller is also liable for any lack of conformity which occurs after the time indicated in section 36.1 and which is due to a breach of any of his obligations, including a breach of any guarantee that for a period of time the goods will remain fit for their ordinary purpose or for some particular purpose or will retain specified qualities or characteristics.

Section 37

If the seller has delivered goods before the date for delivery, he may, up to that date, deliver any missing part or make up any deficiency in the quantity of the goods delivered, or deliver goods in replacement of any non-conforming goods delivered or remedy any lack of conformity in the goods delivered, provided that the exercise of this right does not cause the buyer unreasonable inconvenience or unreasonable expense. However, the buyer retains any right to claim damages as provided for in the present regulation.

Section 38

38.1 The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances.

38.2 If the contract involves carriage of the goods, examination may be deferred until after the goods have arrived at their destination.

38.3 If the goods are redirected in transit or redispatched by the buyer without a reasonable opportunity for examination by him and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch, examination may be deferred until after the goods have arrived at the new destination.

Section 39


The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.


In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee.

Section 40

The seller is not entitled to rely on the provisions of sections 38 and 39 if the lack of conformity relates to facts of which he knew or could not have been unaware and which he did not disclose to the buyer.

Section 41

The seller must deliver goods, which are free from any right or claim of a third party, unless the buyer agreed to take the goods subject to that right or claim. However, if such right or claim is based on industrial property or other intellectual property, the seller's obligation is governed by section 42.

Section 42

42.1 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, of which at the time of the conclusion of the contract the seller knew or could not have been unaware, provided that the right or claim is based on industrial property or other intellectual property:


under the law of the place where the goods will be resold or otherwise used, if it was contemplated by the parties at the time of the conclusion of the contract that the goods would be resold or otherwise used in that place; or


in any other case, under the law of the place where the buyer has his place of business.

42.2 The obligation of the seller under section 42.1 does not extend to cases where:


at the time of the conclusion of the contract the buyer knew or could not have been unaware of the right or claim; or


the right or claim results from the seller's compliance with technical drawings, designs, formulae or other such specifications furnished by the buyer.

Section 43


The buyer loses the right to rely on the provisions of section 41 or section 42 if he does not give notice to the seller specifying the nature of the right or claim of the third party within a reasonable time after he has become aware or ought to have become aware of the right or claim.


The seller is not entitled to rely on the provisions of section 43.1 if he knew of the right or claim of the third party and the nature of it.

Section 44

Notwithstanding the provisions of sections 39.1 and 43.1, the buyer may reduce the price in accordance with section 50 or claim damages, except for loss of profit, if he has a reasonable excuse for his failure to give the required notice.

Subchapter III

Remedies for breach of contract by the seller

Section 45

45.1 If the seller fails to perform any of his obligations under the contract or the present regulation, the buyer may:


exercise the rights provided in sections 46 to 52;


claim damages as provided in sections 74 to 77.

45.2 The buyer is not deprived of any right he may have to claim damages by exercising his right to other remedies.

45.3 No period of grace may be granted to the seller by a court or arbitral tribunal when the buyer resorts to a remedy for breach of contract.

Section 46

46.1 The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy, which is inconsistent with this requirement.

46.2 If the goods do not conform with the contract, the buyer may require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under section 39 or within a reasonable time thereafter.

46.3 If the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard to all the circumstances. A request for repair must be made either in conjunction with notice given under section 39 or within a reasonable time thereafter.

Section 47

47.1 The buyer may fix an additional period of time of reasonable length for performance by the seller of his obligations.

47.2 Unless the buyer has received notice from the seller that he will not perform within the period so fixed, the buyer may not, during that period, resort to any remedy for breach of contract. However, the buyer is not deprived thereby of any right he may have to claim damages for delay in performance.

Section 48

48.1 Subject to section 49, the seller may, even after the date for delivery, remedy at his own expense any failure to perform his obligations, if he can do so without unreasonable delay and without causing the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer. However, the buyer retains any right to claim damages as provided for in the present regulation.

48.2 If the seller requests the buyer to make known whether he will accept performance and the buyer does not comply with the request within a reasonable time, the seller may perform within the time indicated in his request. The buyer may not, during that period of time, resort to any remedy which is inconsistent with performance by the seller.

48.3 A notice by the seller that he will perform within a specified period of time is assumed to include a request, under the preceding paragraph, that the buyer make known his decision.

48.4 A request or notice by the seller under sections 48.2 and 48.3 is not effective unless received by the buyer.

Section 49

49.1 The buyer may declare the contract avoided:


if the failure by the seller to perform any of his obligations under the contract or the present regulation amounts to a fundamental breach of contract; or


in case of non-delivery, if the seller does not deliver the goods within the additional period of time fixed by the buyer in accordance with section 47.1 or declares that he will not deliver within the period so fixed.

49.2 However, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided unless he does so:


in respect of late delivery, within a reasonable time after he has become aware that delivery has been made;


in respect of any breach other than late delivery, within a reasonable time:

after he knew or ought to have known of the breach;
after the expiration of any additional period of time fixed by the buyer in accordance with section 47.1, or after the seller has declared that he will not perform his obligations within such an additional period; or
after the expiration of any additional period of time indicated by the seller in accordance with section 48.2, or after the buyer has declared that he will not accept performances.
Section 50
If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time. However, if the seller remedies any failure to perform his obligations in accordance with section 37 or section 48 or if the buyer refuses to accept performance by the seller in accordance with those sections, the buyer may not reduce the price.

Section 51

51.1 If the seller delivers only a part of the goods or if only a part of the goods delivered is in conformity with the contract, sections 46 to 50 apply in respect of the part which is missing or which does not conform.

51.2 The buyer may declare the contract avoided in its entirety only if the failure to make delivery completely or in conformity with the contract amounts to a fundamental breach of the contract.

Section 52

52.1 If the seller delivers the goods before the date fixed, the buyer may take delivery or refuse to take delivery.

52.2 If the seller delivers a quantity of goods greater than that provided for in the contract, the buyer may take delivery or refuse to take delivery of the excess quantity. If the buyer takes delivery of all or part of the excess quantity, he must pay for it at the contract rate.

Chapter 3

Obligations of the buyer

Section 53

The buyer must pay the price for the goods and take delivery of them as required by the contract and the present regulation.

Subchapter I

Payment of the price

Section 54

The buyer's obligation to pay the price includes taking such steps and complying with such formalities as may be required under the contract or any laws and regulations to enable payment to be made.

Section 55

Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.

Section 56

If the price is fixed according to the weight of the goods, in case of doubt it is to be determined by the net weight.

Section 57

57.1 If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller:


at the seller's place of business; or


if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place.

57.2 The seller must bear any increase in the expenses incidental to payment, which is caused by a change in his place of business subsequent to the conclusion of the contract.

Section 58

58.1 If the buyer is not bound to pay the price at any other specific time he must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and the present regulation. The seller may make such payment a condition for handing over the goods or documents.

58.2 If the contract involves carriage of the goods, the seller may dispatch the goods on terms whereby the goods, or documents controlling their disposition, will not be handed over to the buyer except against payment of the price.

58.3 The buyer is not bound to pay the price until he has had an opportunity to examine the goods, unless the procedures for delivery or payment agreed upon by the parties are inconsistent with his having such an opportunity.

Section 59

The buyer must pay the price on the date fixed by or determinable from the contract and the present regulation without the need for any request or compliance with any formality on the part of the seller.

Subchapter II

Taking delivery

Section 60

60.1 The buyer's obligation to take delivery consists:


in doing all the acts which could reasonably be expected of him in order to enable the seller to make delivery; and


in taking over the goods.

Subchapter III

Remedies for breach of contract by the buyer

Section 61

61.1 If the buyer fails to perform any of his obligations under the contract or the present regulation, the seller may:


exercise the rights provided in sections 62 to 65; and


claim damages as provided in sections 74 to 77.

61.2 The seller is not deprived of any right he may have to claim damages by exercising his right to other remedies.

61.3 No period of grace may be granted to the buyer by a court or arbitral tribunal when the seller resorts to a remedy for breach of contract.

Section 62

The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy, which is inconsistent with this requirement.

Section 63

63.1 The seller may fix an additional period of time of reasonable length for performance by the buyer of his obligations.

63.2 Unless the seller has received notice from the buyer that he will not perform within the period so fixed, the seller may not, during that period, resort to any remedy for breach of contract. However, the seller is not deprived thereby of any right he may have to claim damages for delay in performance.

Section 64

64.1 The seller may declare the contract avoided:


if the failure by the buyer to perform any of his obligations under the contract or the present regulation amounts to a fundamental breach of contract; or


if the buyer does not, within the additional period of time fixed by the seller in accordance with section 63.1, perform his obligation to pay the price or take delivery of the goods, or if he declares that he will not do so within the period so fixed.

64.2 However, in cases where the buyer has paid the price, the seller loses the right to declare the contract avoided unless he does so:


in respect of late performance by the buyer, before the seller has become aware that performance has been rendered; or


iin respect of any breach other than late performance by the buyer, within a reasonable time:


after the seller knew or ought to have known of the breach; or


after the expiration of any additional period of time fixed by the seller in accordance with section 63.1, or after the buyer has declared that he will not perform his obligations within such an additional period.

Section 65

65.1 If under the contract the buyer is to specify the form, measurement or other features of the goods and he fails to make such specification either on the date agreed upon or within a reasonable time after receipt of a request from the seller, the seller may, without prejudice to any other rights he may have, make the specification himself in accordance with the requirements of the buyer that may be known to him.

65.2 If the seller makes the specification himself, he must inform the buyer of the details thereof and must fix a reasonable time within which the buyer may make a different specification. If, after receipt of such a communication, the buyer fails to do so within the time so fixed, the specification made by the seller is binding.

Chapter 4

Passing of risk

Section 66

Loss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller.

Section 67

67.1 If the contract of sale involves carriage of the goods and the seller is not bound to hand them over at a particular place, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer in accordance with the contract of sale. If the seller is bound to hand the goods over to a carrier at a particular place, the risk does not pass to the buyer until the goods are handed over to the carrier at that place. The fact that the seller is authorized to retain documents controlling the disposition of the goods does not affect the passage of the risk.

67.2 Nevertheless, the risk does not pass to the buyer until the goods are clearly identified to the contract, whether by markings on the goods, by shipping documents, by notice given to the buyer or otherwise.

Section 68

The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the carrier who issued the documents embodying the contract of carriage. Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller.

Section 69

69.1 In cases not within sections 67 and 68, the risk passes to the buyer when he takes over the goods or, if he does not do so in due time, from the time when the goods are placed at his disposal and he commits a breach of contract by failing to take delivery.

69.2 However, if the buyer is bound to take over the goods at a place other than a place of business of the seller, the risk passes when delivery is due and the buyer is aware of the fact that the goods are placed at his disposal at that place.

69.3 If the contract relates to goods not then identified, the goods are considered not to be placed at the disposal of the buyer until they are clearly identified to the contract.

Section 70

If the seller has committed a fundamental breach of contract, sections 67, 68 and 69 do not impair the remedies available to the buyer on account of the breach.

Chapter 5

Provisions common to the obligations of the seller and the buyer

Subchapter I

Anticipatory breach and installment contracts

Section 71

71.1 A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of:


a serious deficiency in his ability of perform or in his creditworthiness; or


his conduct in preparing to perform or in performing the contract.

71.2 If the seller has already dispatched the goods before the grounds described in section 71.1 become evident, he may prevent the handing over of the goods to the buyer even though the buyer holds a document, which entitles him to obtain them. The present section relates only to the rights in the goods as between the buyer and the seller.

71.3 A party suspending performance, whether before or after dispatch of the goods, must immediately give notice of the suspension to the other party and must continue with performance if the other party provides adequate assurance of his performance.

Section 72

72.1 If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided.

72.2 If time allows, the party intending to declare the contract avoided must give reasonable notice to the other party in order to permit him to provide adequate assurance of his performance.

72.3 The requirements of section 71 do not apply if the other party has declared that he will not perform his obligations.

Section 73

73.1 In the case of a contract for delivery of goods by installments, if the failure of one party to perform any of his obligations in respect of any installment constitutes a fundamental breach of contract with respect to that installment, the other party may declare the contract avoided with respect to that installment.

73.2 If one party's failure to perform any of his obligations in respect of any installment gives the other party good grounds to conclude that a fundamental breach of contract will occur with respect to future installments, he may declare the contract avoided for the future, provided that he does so within a reasonable time.

73.3 A buyer who declares the contract avoided in respect of any delivery may, at the same time, declare it avoided in respect of deliveries already made or of future deliveries if, by reason of their interdependence, those deliveries could not be used for the purpose contemplated by the parties at the time of the conclusion of the contract.

Subchapter II

Damages

Section 74

Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.

Section 75

If the contract is avoided and if, in a reasonable manner and within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the difference between the contract price and the price in the substitute transaction as well as any further damages recoverable under section 74.

Section 76

76.1 If the contract is avoided and there is a current price for the goods, the party claiming damages may, if he has not made a purchase or resale under section 75, recover the difference between the price fixed by the contract and the current price at the time of avoidance as well as any further damages recoverable under section 74. If, however, the party claiming damages has avoided the contract after taking over the goods, the current price at the time of such taking over shall be applied instead of the current price at the time of avoidance.

76.2 For the purposes of the preceding paragraph, the current price is the price prevailing at the place where delivery of the goods should have been made or, if there is no current price at that place, the price at such other place as serves as a reasonable substitute, making due allowance for differences in the cost of transporting the goods.

Section 77

A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated.

Subchapter III

Interest

Section 78

If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under section 74.

Subchapter IV

Exemption

Section 79

79.1 A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.

79.2 If the party's failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if:


he is exempt under section 79.1; and


the person whom he has so engaged would be so exempt if the provisions of that section 79.1 were applied to him.

79.3 The exemption provided by this section has effect for the period during which the impediment exists.

79.4 The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non-receipt.

79.5 Nothing in this section prevents either party from exercising any right other than to claim damages under the present regulation.

Section 80

A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party's act or omission.

Subchapter V

Effects of avoidance

Section 81

81.1 Avoidance of the contract releases both parties from their obligations under it, subject to any damages, which may be due. Avoidance does not affect any provision of the contract for the settlement of disputes or any other provision of the contract governing the rights and obligations of the parties consequent upon the avoidance of the contract.

81.2 A party who has performed the contract either wholly or in part may claim restitution from the other party of whatever the first party has supplied or paid under the contract. If both parties are bound to make restitution, they must do so concurrently.

Section 82


The buyer loses the right to declare the contract avoided or to require the seller to deliver substitute goods if it is impossible for him to make restitution of the goods substantially in the condition in which he received them.


Section 82.1 does not apply:


if the impossibility of making restitution of the goods or of making restitution of the goods substantially in the condition in which the buyer received them is not due to his act or omission;


the goods or part of the goods have perished or deteriorated as a result of the examination provided for in section 38; or


if the goods or part of the goods have been sold in the normal course of business or have been consumed or transformed by the buyer in the course of normal use before he discovered or ought to have discovered the lack of conformity.

Section 83

A buyer who has lost the right to declare the contract avoided or to require the seller to deliver substitute goods in accordance with section 82 retains all other remedies under the contract and the present regulation.

Section 84

84.1 If the seller is bound to refund the price, he must also pay interest on it, from the date on which the price was paid.

84.2 The buyer must account to the seller for all benefits, which he has derived from the goods or part of them:


if he must make restitution of the goods or part of them; or


if it is impossible for him to make restitution of all or part of the goods or to make restitution of all or part of the goods substantially in the condition in which he received them, but he has nevertheless declared the contract avoided or required the seller to deliver substitute goods.

Subchapter VI

Preservation of the goods

Section 85

If the buyer is in delay in taking delivery of the goods or, where payment of the price and delivery of the goods are to be made concurrently, if he fails to pay the price, and the seller is either in possession of the goods or otherwise able to control their disposition, the seller must take such steps as are reasonable in the circumstances to preserve them. He is entitled to retain them until he has been reimbursed his reasonable expenses by the buyer.

Section 86

86.1 If the buyer has received the goods and intends to exercise any right under the contract or the present regulation to reject them, he must take such steps to preserve them as are reasonable in the circumstances. He is entitled to retain them until he has been reimbursed his reasonable expenses by the seller.

86.2 If goods dispatched to the buyer have been placed at his disposal at their destination and he exercises the right to reject them, he must take possession of them on behalf of the seller, provided that this can be done without payment of the price and without unreasonable inconvenience or unreasonable expense. This provision does not apply if the seller or a person authorized to take charge of the goods on his behalf is present at the destination. If the buyer takes possession of the goods under this paragraph, his rights and obligations are governed by the preceding paragraph.

Section 87

A party who is bound to take steps to preserve the goods may deposit them in a warehouse of a third person at the expense of the other party provided that the expense incurred is not unreasonable.

Section 88

88.1 A party who is bound to preserve the goods in accordance with section 85 or 86 may sell them by any appropriate means if there has been an unreasonable delay by the other party in taking possession of the goods or in taking them back or in paying the price or the cost of preservation, provided that reasonable notice of the intention to sell has been given to the other party.

88.2 If the goods are subject to rapid deterioration or their preservation would involve unreasonable expense, a party who is bound to preserve the goods in accordance with section 85 or 86 must take reasonable measures to sell them. To the extent possible he must give notice to the other party of his intention to sell.

88.3 A party selling the goods has the right to retain out of the proceeds of sale an amount equal to the reasonable expenses of preserving the goods and of selling them. He must account to the other party for the balance.

Part IV. Final Provisions

Section 89

As used herein, the singular includes the plural and the plural includes the singular, unless the context otherwise requires. The personal pronoun "he" includes "she" and "it"; and the word "him" includes "her" and "it" unless the context otherwise requires.

Section 90

The present regulation shall enter into force on 29 December 2000.

Bernard Kouchner

Special Representative of the Secretary-General