591

Both property and sales contracts are legal notions dependent on the legal system they stem from. While the CISG has unified parts of sales contract law and has its own notion of what a sales contract is, property in goods has remained in the realm of national, unharmonized law. The transfer of risk connects the transfer of property with many unharmonized sales laws, but this link is severed in the CISG. This work aims to demonstrate that the remaining connections between the CISG and property law are either exaggerated or disregarded.

592

The obligation to transfer property under Article 30 of the CISG should be independent of national property notions. The CISG has its own notion of property. Property under the CISG is the legal interest the seller has in the goods without regard to the quality of that interest. Whether property in the sense of national law has been transferred is, thus, not directly relevant for Article 30. Article 41 of the CISG protects the buyer from mere claims of third parties, rendering the existence of third party rights (for instance, (absolute) property in the goods) largely irrelevant. But even if the third party right becomes relevant, the CISG does not differentiate whether the third party has property or any other right in the goods. Thus, no connection between the national notions of property and Articles 30 and 41 of the CISG exists.

593

Similarly, no link exists between the characterization of a sales contract under the CISG and property per national law. Contrary to common scholarly and judicial opinion, property in goods should not form part of the characterization equation under Article 1(1) of the CISG. Differing national property interpretations could otherwise cause inconsistencies in the CISG’s scope, violating Article 7(1) of the CISG. The proposed definition of property should also not be employed to characterize a sales contract under the CISG, as it could lead courts in common law jurisdictions to exclude credit sales involving goods consumed before payment. For a contract to be subject to the CISG, it must include a transaction of goods against payment. To this end, the goods are sufficiently allocated to the buyer when, as between the parties, the buyer permanently receives the benefits and use of the goods, and the seller does not bear the risk of haphazard loss of or damage to the goods and no longer retains any legal interest in them.

594

An elusive connection persists between property law and the CISG concerning the claim for the price under Article 62 due to Article 28. If the law of the forum requires property transfer for the seller’s price claim, the only 268 practical consequence of the limitation under Article 28 of the CISG is that the seller is not able to economically force the buyer to take delivery of the goods. The transfer of property does not impact critical issues like whether and when the seller has to resell the goods if the buyer indicates he or she no longer intends to fulfill the contract. This connection between property and the CISG is, thus, much smaller and much less relevant than the connection between some common law sales and property laws.

595

In conclusion, the relevance of national property law on the CISG is likely overestimated regarding the seller’s obligations (Articles 30 and 41) and contract characterization. Conversely, it is underestimated concerning the buyer’s obligations (Articles 62 and 28). This finding supports the assessment by Gutzwiller (Switzerland) in 1953 that the transfer of property was for the most part a theoretical question without notable importance for unified sales law.1217 This limited relevance of property in the goods under the CISG allows for another conclusion: By not excluding the CISG in international sales transactions, parties can mitigate the effects of national property law differences. In contrast to national sales law, parties can thereby avoid subsequent legal surprises and costly discussions of national property laws in case of litigation or arbitration.

596

Beyond the influence of property in the goods on the CISG, it is equally important to consider the often misunderstood impact of the CISG on property in the goods. Article 4, sentence 2(b) of the CISG excludes the effect which the contract may have on the property in the goods sold. Even if one applies the definition of property proposed in this work and consequently limits the property to the legal interest the seller has in the goods, the CISG has no effect on third party rights. This exclusion extends to retention of property clauses between the parties as far as their effect on property stands to reason. Yet, national property laws can still pose incidental questions impacting property in goods, but these effects stem from national law, not the CISG. The CISG does not allow parties to choose the rules on property transfer.

597

Remedies based on property under national law are unaffected for third parties, contractual parties’ claim can only exist to the extent that the requirements of a remedy with the same content under the CISG are fulfilled. More far-reaching remedies under national law are preempted. This nuanced interpretation stands in contrast to the opinions that either consider national law completely preempted or that recognize unrestricted concurrent application of remedies under the CISG and national law.

598

Property in the goods is crucial if a contractual party becomes insolvent before the contract is fully performed. The CISG does not supersede national insolvency law. In contrast to an opinion in scholarly work, the CISG also 269 does not hinder the applicable property law from considering the property in the goods to revest with the seller in case of contract avoidance. Therefore, the impact of the CISG on property transfer is overestimated.

599

These insights on the interplay between the property in the goods and the CISG can also be extrapolated to the future unification and guide harmonization of law on the European and global level. If one interprets the CISG as is proposed in this work, the relevance of the transfer of property for the CISG is such that no convincing argument can be made regarding a necessity to unify the transfer of property. Differences in national property law are more pertinent for goods allocation in insolvency and non-contractual remedies. Discussions should focus on these areas rather than contract law distinctions like abstract or causal transfers.

600

The conclusions reached at hand could also be considered with regard to the unification of private international law and the common cry for more party autonomy regarding a choice of law of the applicable property law. One argument in this regard is that a possibility of a choice of law would allow the parties to adjust the law applicable to property to the contract law of their liking and, thereby, avoid frictions between both applicable laws.1218 If one agrees with the interpretation of the CISG in this work, the CISG shows that it is possible to create uniform contract law that is so decoupled from national property law that it renders the interplay an unconvincing argument in favor of allowing choice of law regarding the applicable property law.

601

Furthermore, the decoupling of property in goods and the CISG should be considered a blueprint for further unification and harmonization of contract law. Neither the obligation to transfer property in the goods nor contract characterization should be taken back in time and retied to national notions of property. The CISG’s progress from an eviction-based liability system to one in which the mere existence of a third party right is a breach of contract should not be nebulized again by requiring a “restriction [that] prevents or limits the use of the goods” as has happened in Article 9 Directive (EU) 2019/771. Until property in goods and its transfer are unified, contract law unification should avoid referencing property in goods, opting instead for uniform legal concepts.