The Weakening Function Of Title In International Sale Of Goods

The opinions regarding the role of title in International Sale of Good Acts vary fromscholar to scholar. However, because transfer of title is the essential difference betweensales contract and other contracts in that if a party falls into bankruptcy, the interest of theperson who owns the title of goods can be protected to the maximum degree, and title isalso related to passage of risk under Insurance Law, many scholars hold that title is thecore issue in International Sales of Goods Acts. In sharp contrast, this core issue is notreflected accordingly in international legislation and judicial practice. CISG, the mostimportant international treaty in the field of sales of goods up to date, does not establishregulations respecting transfer of title. Sale of Goods Act1979, the most influentiallegislation in the same field, even does not clarify that sellers are obliged to transfer titleto goods to buyers. Despite of the lack of core issue, the influence of these twolegislations is not lessened. The unsymmetry also exists in judicial practice. It is notcommon to see cases involving disputes on transfer of title in international sale of goods.Jurisprudence focuses heavily on practice. If an issue plays a vital role in a certaincategory, it should be reflected with various forms in corresponding practices such aslegislation of sale of goods and judicial practice. The above mentioned imbalancebetween theory and practice is, in fact, a conflict between theory and practice. The authorcarries out some research based on this issue.If jurisprudence is a building, concepts are its cornerstone. The first chaptercompares some important basic concepts used in this article. Firstly, whether a sale is aninternational one involves the understanding towards the standard of "international", onwhich people hold different views. Secondly, goods is a unique concept inAnglo-American sale of goods acts while only the concept of "subject matter" exists inthe continental law system. The two concepts are not only overlapping but inconsistent aswell. Thirdly, scholars in China often translate "title" in Anglo-American law system into"proprietary rights". As a matter of fact, these two concepts do not match exactly in termsof function. Anglo-American law system expresses "proprietary rights" under thecontinental lay system with two words, i.e.,"property" and "title"."Title" is used wherethere are three or more than three subjects of rights towards a single object. The right ofownership during transaction is established through comparing different "title"."Property" is more used where the ownership of static objects is mentioned. It is moresuitable to describe fixed assets or daily consumption. The continental law system adopts a single concept--"proprietary rights" to express these rights.The second chapter focuses on regulations. The chapter first compares severaldifferent instances of legislation. According to the characteristics of international sale ofgoods, it discusses the regulations respecting transfer of title combining bills of landingand INCOTERMS terms. With the legislation of each country varying greatly on thisissue, the addition of bill of landing and INCOTERMS terms makes understandingtowards transfer of title more chaotic. As a result, rule of conflict is applied in manysituations. In this way, transfer of title is established after finding applicable laws.However, the characteristics of conflict law make it a must to face numerous variableswhen seeking laws. The variety of substantive rules and over flexibility of rule of conflictdramatically decrease the predictability of regulations, leading to the protection of therights of owners full of uncertainty.In fact, in international sale of goods, unpaid sellers may seek protection of theirrights via other methods in addition to the protection of title. If a seller still occupiesgoods, he is eligible to exercise lien towards goods even if the title of goods has beentransferred to the buyer. He can resell the goods to protect his own rights under certainconditions even if he is no longer the owner of goods; if the goods have been delivered totransport, i.e., when a seller does not occupy goods, he still has the right of stoppage intransit unless the goods have been delivered to the buyer. These systems have nothing todo with title. Besides the protection of title, these systems may serve similar purposes.Sale of goods being a commercial practice, participants are not limited to sellers andbuyers. In international trade, ocean carrier is an important participant. In order to protectthe lawful rights, two law systems both stipulate that ocean carriers have lien of goodswhere the freight is not paid off. The typical instances of legislation illustrate that theright of ship owners to remain the shipping goods, which is endowed by legislation orjudicature, provides strong systematic safeguards for ship owners' interests. Once a shipowner exercises lien towards goods, the various powers and functions that should havebeen owned by owners of goods will be restricted. Hence the inherent protective functionof title provided for obligees will be undoubtedly influenced.Insurer is another important participant in international trade. In international sale ofgoods, transfer of title, passage of risk and insurable interest are closely related. Whentransfer of title and passage of risk are concurrent, it is pointless to differentiate whichone affects the change of insurance interest. However, the differentiation is of great value when they are not concurrent due to legal or promissory elements. According to theresearch of comparative law, passage of risk exerts more influence on insurance interestthan transfer of title. Transfer of title is relatively less important to the judgment of riskundertaking of goods. Therefore, the role that title plays in insurance is not as importantas what has been imagined.Due to the importance attached to title, many international trade contracts consist ofreservation of title clause in order to protect buyers in case of bankruptcy. But this clauseprovides limited protection for the interest of sellers in international contexts. Withscholars disagreeing on the legal nature of reservation of title clause, regulations aboutreservation of title varying substantially among countries, and legal application ofreservation of title being extremely flexible, an English judge points out that the law inthis field is like a maze, if not a mine field, and people have to proceed cautiously witheach step. Consequently, the protection of the rights of obligees is filled with uncertaintyand the protective function of title is definitely reduced.As far as commodity is concerned, the content of powers and functions of titlediffers from goods used for consumption. Its powers and functions tend to be shown aspower to make decisions, especially the power to decide price and sales volume ofcommodity. In domestic laws, this power of commodity owners is restricted to someextent, and it is subject to more restrictions in international level. The measures such asantidumping, countervailing measures and safeguard measures all restrict the power ofcommodity owners to make decisions. In addition, the increasing attention paid toenvironmental protection and other special requirements will all impose obligations onowners, adding extra burden to them.In conclusion, the issue of title tends to weaken in both Anglo-American law systemand the continental law system. Its symbolic meaning outweighs its substantiality in saleof goods, if not no status at all. This weakening trend is more obvious in internationalsale of goods.