International Business Law: Critical Discussion on Title in Relation to Commodities and Goods under CISG

This paper discusses CISG in connection to the ‘title’ regarding commodities or goods. It forwards a critical discussion regarding ‘title’ in relation to commodities and goods, and also discusses CISG in the light of the term ‘title’.

Running head: INTERNATIONAL BUSINESS LAW
INTERNATIONAL BUSINESS LAW
Name of the Student
Name of the University
Author Note

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Introduction
The laws relating to international sales, whether not coded or coded, existed from older
days. However, there was an absence of harmonization, standardization and unification in
relation to such laws and the rules that are applied by the different nations. In the early years,
several attempts have been made in order to apply a uniform, constant and broadly
acknowledged law relating to international sales, in a better manner. However, it may be said
that the attempts mentioned above were not entirely useful and as a consequence of such
uselessness of the efforts, the conflicts and issues in relation to the matters regarding the
international trade and contracts were not resolved adequately or in a proper manner. The
introduction, acceptance and implementation of the Convention known as the ‘United Nations
Convention on Contracts for the International Sale of Goods’ [CISG] of the year 1980,
functioned as the main elements that provided a platform to the law relating to the international
sales. This particular Convention helped to unify the rules that govern the contracts in relation to
international sales regarding commodities and goods (Lookofsky 2016). Not only the law
relating to international sales was influenced by the Convention mentioned above, but the law
relating to domestic sales was also influenced by the Convention. This paper shall discuss CISG
in connection to the ‘title’ regarding commodities or goods. This paper shall forward a critical
discussion regarding ‘title’ in relation to commodities and goods, and discuss CISG in the light
of the term mentioned above, that is, ‘title’.
Discussion
The ‘United Nations Convention on Contracts for the International Sale of Goods’
[CISG] of the year 1980 is regarded as a Convention, which is in relation to the international

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sales regarding commodities and goods. The application of the aforementioned Convention is
made in relation to contracts that are established for the sale of commodities and goods, where
the two involved parties belong to two different nations. In the past twenty years, the CISG has
been accepted, recognized and acknowledged globally because of an amalgamation of features.
One of such features is considered to be the upsurge and proliferation in relation to globalization
that mandated, directed, facilitated and enabled the growth of CISG. The Convention mentioned
above directs and administers a noteworthy share of commerce and trade of the world, which
makes CISG a foremost successful mechanism in relation to the international law relating to
trade. As per the latest reports and studies, it may be said that a quantum of ninety three nations
have become members to the Convention mentioned above. The nations that have become the
members to CISG are called the ‘Contracting States’. CISG is applicable in relation to the
‘Contracting States’ (Bridge 2017). However, according to M.J. Bonell, the quantum of
international commercial and financial transactions that might be affected by the CISG, shall be
considered to be much more. Such notion arises if it is considered and acknowledged that the
application of CISG may be done not only when the location regarding the businesses relating to
both the involved parties is in separate ‘Contracting States’, as provided in sub-clause a of clause
1 of Article 1 stated in the aforementioned Convention, but such application shall also be done
when the rules and guidelines in relation to ‘private international law’ result in the application
regarding the law in connection to a ‘Contracting State’, as provided in sub-clause b of clause 1
of Article 1, which shall include the circumstance where the setting and platform is of any
particular state that is not a ‘Contracting State’ (Ghaderi and Basavaraju 2019).
It may be said that in the present times, the sale in relation to commodities and goods is
considered to be the rudimentary and uncomplicated method for commercial transaction.

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Through the mode of sale, the goods and the commodities are bought, sold and supplied for the
purposes of commerce and trade. Up to this date, the method of sale in relation to commodities
and goods is considered to be the most common manner through which the ownership in
connection to such commodities and goods is passed from one individual, the seller, to another
individual, the buyer. However, it may be said that a sale may not be considered to be the only
way to transfer commodities or goods. Without the sale of the commodities or goods, the owner
in relation to any such commodity or good may also lease, loan, gift or hire-purchase the
commodity or the good. Regarding such transaction, it shall not be regarded as under the law in
connection to sale of commodities or goods (Gutiérrez 2017).
The law that is followed in the nation of Sri Lanka in relation to sale regarding
commodities and goods is the English Law. The statute that governs the law regarding sale of
commodities and goods is the Sale of Goods Ordinance [No 11] enforced in the year of 1896.
This particular statute is grounded on the statute of the United Kingdom, that is, the Sale of
Goods Act enforced in the year of 1893. The Sale of Goods Act of the year 1893 was drafted by
the individual named Sir Mackenzie Chalmers. However, it may be said that no reforms,
modifications or alterations have been adopted in relation to the Sale of Goods Ordinance [No
11] enforced in the year of 1896. This is unlike the Sale of Goods Act of the year 1893 of the
United Kingdom, where several reforms, modifications and alterations have given effect to by
the legislators of the nation of England. It must be mentioned that even after such a long time
period since the enactment of the Sale of Goods Ordinance (SGO) of the year 1896, not even a
single modification or changes has been given effect to by the legislators of the nation of Sri
Lanka. It shall be considered to be severely problematic that if no amendments are done in

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connection to the SGO of the year 1896, then such static legislation of the nation might hinder
the development and growth of the nation (Saidov 2017).
It may be said that certain warranties and conditions are considered to be implied in
relation to all the contract regarding sale of commodities and goods. Where there is no existence
of any kind of contradictory agreement, certain conditions are always implied in relation to the
sale of commodities or goods. The first condition shall be in relation to the right of the seller in
order to sell the commodities or goods. It is an implied condition that any particular seller shall
possess the right to sale the commodities and goods. The provision in relation to such implied
condition is given in section 13 of the Sale of Goods Act of the year 1893. Therefore, it can be
said that in a given circumstance where the seller may not possess the right to give effect to the
sale of the commodities or goods, then in such a situation the seller shall be considered to be
accountable to pay compensation or damages in favor of the purchaser. The case of Rowland v
Divall (1923) 2 KB 500 shall be considered to be an important case in this regard. In this case, a
motor-car was purchased by R from D. R utilized the motor-car for a time period of four months.
It was discovered that D never possessed any title in relation to the motor-car that was sold to R.
Therefore, subsequently the motor-car had to be surrendered by R to the actual owner regarding
the car. A suit was filed by R in order to recuperate the entire purchase amount, which R had
paid in favor of D. It was held by the court that R possessed the entitlement to recuperate the
entire amount, even though the car had been utilized by R for a time period of four months.
Likely, section 14 as provided in the SGO of the year 1896 mentions that where a description of
contract is present in relation to the sale of commodities and goods, then an implied condition
exists that the goods and the commodities shall correspond in relation to the description. It has
been further specified that when the sale is given effect to with the help of both a description as

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well as a sample, then goods or the commodities must correspond in relation to both the
description as well as the sample. Since this particular prerequisite is considered to be a
condition, the violation of such prerequisite as per section 14 shall result in the establishment of
a specific right to consider the contract or the agreement as rejected, according to sub-section 2
of section 12 as provided in the Ordinance of 1896. Generally, when a seller is unsuccessful to
fulfill and conform to any condition, then the buyer shall possess the right to totally and
absolutely discard the commodities and goods and may refuse to make the payment of the price.
In a given circumstance, where the payment has already been made by the purchaser in relation
to the goods, then in such a circumstance the buyer shall possess the right to recuperate the
amount. It had been stated in the case of Arcos v EA Ronaasen & Son [1933] AC 470 that the
impact of the aforementioned condition is that the statutory compulsion and responsibility, which
has been levied by section 14 as provided in the Ordinance, must be firmly followed by any
seller, and if the seller does not comply with the condition, then it shall not matter how trivial the
failure is. Unless it is microscopic, the buyer shall have the right and the privilege to reject the
commodities or goods. However, it may be said that this section and such privilege to the
purchaser may give rise to injustice. According to Beatty and Samuelson, the aforementioned
‘perfect tender rule’ according to which the purchaser shall have the privilege to discard the
commodities and goods, even when the seller may not be successful to follow the condition in a
minute manner. Such unchecked right and privilege shall give rise to undesirable consequences.
In this regard, the case of Moore & Co v Landaner & Co (1912) 2 KB 519 shall be considered to
be a significant case. In this case, it was upheld by the court that the purchaser shall have the
right to discard the entire consignment as the goods that were delivered failed to correspond in
relation to the description that was actually ordered (Hayward, Zeller and Andersen 2018).

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It may be said that Article 4 as provided in the CISG administers the creation and
establishment of any particular contract. The aforementioned article also administers the
obligations and the rights in relation to the buyer and the seller that may arise from the contract.
However, it may be said that these are the only areas in relation to sale and purchase of
commodities and goods. The article mentioned above explicitly dismisses and omits, from its
fundamental possibility of application, issues regarding the legitimacy and legality in relation to
the contract or any kind of provisions or utilizations in connection to the contract (Lista 2016).
According to Andre Janssen, unification in relation to the law infers that the matter
regarding functioning of the legal rules should be regaled by several concerned political bodies.
The primary aim of CISG is the unification in relation to the laws regarding the law relating to
international sales, which is essential in order to achieve the economic and financial growth on a
global basis and for advancement purposes of international trade. It is normally supposed that the
unification is not probable due to the variance in relation to the legal rules, policies and concepts,
however, it is also probable by evading the extreme ends in connection to which administrative
or judicial cooperation and assistance is also considered to be helpful (Kröll et. al. 2017).
Section 16 as provided in the Act of England is analogous in relation to section 17 as
provided in the SGO of the year 1896. The former does not provide a definition relating to
unascertained commodities and goods. Hence, the unsatisfactory and substandard locus, which
may occur because of the statutory drawback, can be evidently comprehended by analyzing
certain English cases. In Re Wait [1927] 1 Ch 606, a quantum of five hundred tons wheat from a
shipment containing thousand tons was sold. The name of the ship was Challenger. However,
afterwards the seller became insolvent and it was held by the court that there was no passing of
the property in favor of the buyer during the time when the contract had been established, as the

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goods were not ascertained. Therefore, the purchaser did not possess any right for claiming the
goods and the purchaser may make his claim like any other common creditors. Likewise, in the
case Re Goldcorp Exchange Ltd [1994] UKPC 3, a particular investor, who purchased a bullion
with the help of a stock of an organization, did not have any kind of rights relating to ownership
when the insolvency in relation to the company occurred. The SGO of the year 1979 retorted to
this particular issue with the introduction of a particular amendment in connection to the Act in
the year of 1995. After the aforementioned amendment, section 20A and section 20B as provided
in the Act, made explicit reference in relation to ‘quasi-specific’ goods. With the help of these
specific sections, as per section 61, the term ‘specific goods’ as mentioned in the Act, is
interpreted as the goods, which had been recognized, approved and accepted during the time
period when a contract regarding sale had been established, and it also include and comprises of
an undivided share, stated as a percentage or fraction, of goods and commodities that are
acknowledged and agreed on as mentioned above. However, it may be said that the SGO of the
year 1896 is still in its static form, without any kind of alteration or modification. This statute has
still not provided a dissimilarity and difference in relation to the two classifications relating to
goods and therefore, the issue has not been addressed, which needs to be addresses soon (.
Conclusion
To conclude it may be said that the statute of Sri Lanka is still static, although the statute
of England has gone through several alterations over the past years. The statute of England has
adopted the principles of CISG. This paper has discussed CISG in connection to the ‘title’
regarding commodities or goods. This paper has forwarded a critical discussion regarding ‘title’
in relation to commodities and goods, and also discussed CISG in the light of the term ‘title’.

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References
Arcos v EA Ronaasen & Son [1933] AC 470.
Bridge, M.G., 2017. The international sale of goods. Oxford University Press.
Ghaderi, A. and Basavaraju, C., 2019. Buyer's Remedies under CISG (Convention of
International Sale of Goods). Asian Journal of Development Matters, 13(1), pp.55-59.
Gutiérrez, L.G., 2017. The Vienna United Nations Convention on Contracts for the International
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100). Springer, Cham.
Hayward, B., Zeller, B. and Andersen, C.B., 2018. The CISG and the United Kingdom—
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Quarterly, 67(3), pp.607-641.
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Moore & Co v Landaner & Co (1912) 2 KB 519.

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