|
||||||||||||||||||
| Abstract | ||||||||||||||||||
| ||||||||||||||||||
| A German seller and a Swiss buyer concluded a contract for the sale of a key-making machine. The contract contained a retention of title clause according to which the property in the machine was to remain in the seller until payment of the full purchase price which was to be made in four installments. After the buyer had paid the first installment, a dispute arouse between the seller and the manufacturer of the machine who refused to deliver any more goods to the seller until the latter met standing debts. After a second payment made on delivery of the machine, the buyer did not pay any further installments. The seller commenced an action against the buyer claiming payment of the remaining installments with interest. During the legal proceedings, i.e. more than five months after the delivery of the machine, the buyer declared the contract avoided because the seller had not transferred the full property in the machine.
The Court held that the contract between the parties was governed by CISG according to Art. 1(1)(a) CISG. It stated that in principle the seller was entitled to payment of the remaining installments, since the contract between the parties had not been effectively avoided by the buyer. The Court left open whether the buyer would have been entitled to declare the contract avoided under Art. 72 CISG, when the manufacturer stopped its deliveries to the seller thereby putting at risk the seller's ability to perform. However, since the buyer declared the contract avoided after having taken delivery of the machine, Art. 72 CISG which is intended to protect against future failures to perform was no longer applicable. Once the machine had been delivered to it, the buyer was entitled to avoid the contract only under Arts. 45 and 49 CISG. However, since the buyer did declare the avoidance of the contract only five months after the delivery of the machine, it had lost its right to do so. |