1. History [1]
2. Consequences of Passing the Risk to the Buyer [2-4]
3. Conduct that Amounts to an Act or Omission of the Seller Relevant for Purposes of Article 66 [5-7]

1. History
1. Article 66 is very similar to ULIS Article 96, except for minor differences which involve the form rather than the substance. Under ULIS, the whole chapter dealing with passing of risk was positioned at the end of the text. Under the CISG, the set of rules were moved to the current location upon a proposal from the representative of Norway at the 1980 Vienna Diplomatic Conference because “the concept [passing of risk] was vital for an understanding of the rights and obligations of the parties” (Summary Records of Meetings of the First Committee, 31st meeting, 1 April 1980, at no. 34).

2. Consequences of Passing the Risk to the Buyer
2. Article 66 plainly states that the buyer is not relieved from the obligation to pay the price for the goods once the risk has passed to the buyer, even if the goods are lost or damaged. The consequences for the buyer appear to be harsh, especially in consideration that article 79 CISG (dealing with the discharge of a duty due to an “impediment”) cannot be of help in a situation like that. Generally, however, buyers are able to buy insurance coverage for many of these occurrences. There is, however, an exception, which will be discussed later, for the event that the loss or damage to the goods is due to an act or omission of the seller.

3. Article 66 does not tell the reader when the risk passes. The reader must then check whether Articles 67-69 apply. Article 66 does not establish the obligation to pay the price (see article 53 CISG), but it has been referred to for the proposition that a buyer is not obligated to pay the price if the risk has not passed to him/her (see, e.g. Oberlandesgericht [Appellate Court] Karlsruhe, Nov. 20, 1992 (F.R.G.)).

4. Article 66, moreover, does not deal with the allocation of the burden of proof; however, it would be wise to go by the old rule that “ei incumbit probatio, qui dicit, non qui negat.” In a much less fancy manner, the rule means that the party seeking a benefit, a favorable judgment, etc., must show that it meets all of the requirements set by the applicable rule of law for such a benefit, judgment, etc. On the other hand, the other party may have to prove that some exception prevents the claimant from enjoying the benefit (see Cámara Nacional de los Apelaciones en lo Comercial [National Chamber of Commercial Appeals of Argentina], Oct. 31, 1995 (Arg.)).

3. Conduct That Amounts to an Act or Omission of the Seller Relevant for Purposes of Article 66
5. Although article 36 and 66 complement each other, article 66 has a broader scope in the sense that it includes not only breaches due to lack of conformity, but also omissions or acts that are not breaches (compare the Secretariat's Commentary on draft article 78, the counterpart of Article 66 CISG, at http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-66.html.

6. The question is then how to determine what kind of conduct or lack thereof falls within the scope of Article 66. Courts have applied these rules when the “goods cannot be found, have been stolen, or have been transferred to another person …[or in the case of] total destruction, physical damage, deterioration, and shrinkage of the goods during carriage or storage” (The UNCITRAL Digest of case law on the CISG Art. 66, A/CN.9/SER.C/DIGEST/CISG/66 [8 June 2004] reproduced at Pace).

7. However, since an “act” or an “omission” by the seller is required for liability to arise, there must be a “violation of some binding standard” ( John O. Honnold, Uniform Law for International Sales Under the 1980 United Nations Convention (3d ed. 1999), at § 362). It does not require a breach of the contract (UNCITRAL in 1977 rejected a proposal to amend Article 66 (then draft Article 64) to limit the “act or omission” to a breach of contract, see Honnold, ibid, at § 362), but something less might be sufficient to meet the standard. As indicated by Professor Honnold, “[t]o avoid the vagaries and inappropriateness for international trade of scraps of domestic law (Art. 7(1)), the primary standard for the parties’ obligations should be (Arts. 30 & 53) the requirements established by ‘the contract and this Convention’, including (Art. 9) the parties’ practices and trade usage” ( Honnold, ibid, at § 362).