Inadequacies of Article 42 CISG: Does the answer lie in Article 79?

The United Nations Convention on Contracts for the International Sale of Goods (CISG) provides uniform laws that govern transnational sales contracts between businesses operating in Contracting States, or when the law of a Contracting State is applicable according to conflict of laws rules. Currently 97 Contracting States worldwide have adopted the CISG, including New Zealand. Article 42 CISG requires a seller to deliver to the buyer goods that are free from any third-party intellectual property rights (IPRs). The territoriality of IPRs means that a seller may not be the party best suited to know the existence of any third-party IPRs in certain jurisdictions compared to the buyer. Article 42 creates uncertainties for parties involved in international commerce with regards to intellectual property (IP) disputes and can lead to unsatisfactory results. In this paper, I explore whether an aggrieved party to a contractual dispute about a third-party IPR claim can pursue a cause of action under art 79. I apply a two-stage enquiry to selected cases, under art 42 (stage one) and then art 79 (stage two) of the CISG, and demonstrate that a losing party in a third-party IPR dispute is also unlikely to succeed under art 79, even in rare circumstances.