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| Abstract | ||||||||||||||||||
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| A French seller and a Portuguese buyer concluded a contract for the sale and dismantlement of a second-hand hangar. The price had to be paid in three installments. The buyer paid the first two installments but refused to pay the balance, alleging the non-conformity of some metallic elements, which could not be used for the reassembling of the hangar. The seller repaired the defective elements; the buyer did not take delivery of the repaired elements, alleging that the seller had engaged to supply new metallic elements. The seller commenced an action to recover the balance of the price. The buyer in turn claimed for avoidance of the contract, refund of the price paid and damages. The Court of first instance decided in favor of the seller.
The appellate Court held that the contract was governed by CISG, as the French rules of private international law (in this case the Hague Convention of 15 June 1955 on the law applicable to international sale of goods) led to the application of the law of France, a contracting State (Art. 1(1)(b) CISG). The contract was considered to be a sales contract in accordance with Art. 3(2) CISG since the dismantlement of the hangar by the seller was not a preponderant part of its obligations (the price charged for this service amounted to approximately 25% of the total contract price). The Court held that the seller had actually breached the contract in delivering non-conforming metallic elements: as a matter of fact, the defective elements were not fit for the particular purpose made known to the seller (reassembling of the hangar the same way as it was originally) (Art. 35(2)(b) CISG). However, since the non-conformity related only to a part of the hangar and the seller had been able to repair the defective elements, the lack of conformity did not constitute a fundamental breach of contract: the buyer had not been deprived of what it was entitled to expect under the contract (Art. 25 CISG). Accordingly, the breach did not justify avoidance of the contract (Art. 49 CISG). The Court held that the seller had effectively cured the lack of conformity by repair of the metallic elements in compliance with Art. 46(3) CISG. In the Court's opinion, the buyer had not given evidence of the fact that the defective elements, even after repair, could not be used for the reassembling of the hangar. The Court, applying Art. 48(1) CISG according to which the buyer, in case of repair at the expense of the seller, retains any right to claim damages, granted the buyer damages representing 10% of the overall value of the sale, in consideration of the fact that the buyer had received the conforming goods with delay and that it had had to arrange for their transportation twice. The Court stated that the seller was entitled to recover the balance of the price. According to Art. 78 CISG, the seller was also entitled to interest on the price, accruing from the date the repaired elements were put at the buyer's disposal. |