Author(s): Mohammed Zaheeruddin
In a CISG governed contract the seller must deliver the goods which are free from third party right or claim (Article 41). In case of third party right or claim based on industrial or intellectual property against the buyer, the seller is liable only if he "knew or could not have been unaware of such claim" at the time of conclusion of contract, provided the third party right or claim arises under the law of the State where the goods will be resold or used as per contract; or if no State was contemplated in the contract, under the law of the State where buyer has his place of business (Article 42). In order to rely on Articles 41 or 42 and for other remedies under Article 45, the buyer is required to give notice to the seller describing the nature of the right or claim within a reasonable time (Article 43). The paper concludes that the seller is not liable in case if the buyer at the time of conclusion of the contract knew or could not have been unaware of existence of third party right or claim (Article 42 (2)(a)); or if the right or claim is resulted from the seller’s compliance of buyer’s instructions (Article 42 (2)(b)); frivolous claims; seller has no positive knowledge of third party right or claim, if the resale or use of goods is in a State other than agreed by the parties in the contract. It is recommended that for the purpose of fixing liability, the parties to the agreement may include customized warranty of title term in the contract by deviating from CISG under Article 6, otherwise, as a default CISG provisions apply. Keywords: UN CISG, Third Party Right or Claim, Infringement, Industrial or Intellectual Property, Damages