|An Italian seller and a German buyer entered into a contract for the sale of shoes. The contract provided, in a space entitled 'approximate delivery without commitment', the hand-written provision: 'before holidays, not later'. In Italy, this means before August. A first consignment of goods was sent to the buyer on 5 August 1993. The buyer paid the relating price on 30 November 1993. A second consignment was sent on 24 September 1993. On 28 September 1993 the buyer declared the contract avoided, by fax. The seller commenced action against the buyer claiming full payment of price plus interest, alleging that the buyer had no right to avoid the contract. The seller also claimed payment of an amount retained by the buyer the previous year following three declarations of partial lack of conformity, in respect of a previous sale. The buyer objected that a fixed term for delivery was provided in the contract and its violation by the seller entitled the buyer to declare the contract avoided. Referring to the previous year's sale, the buyer alleged that the seller never contested the belated declarations of lack of conformity and accepted the return of the non- conforming goods. The different attitude displayed in asking for the price of these goods to be paid therefore was contrary to good faith.
The Court held that the contract was governed by CISG, as the parties had their places of business in two different Contracting States (Art. 1(1)(a) CISG).
The Court stated that the seller was entitled to payment of the full price according to Art. 62 CISG. The two consignments of goods had indeed been delivered after the agreed term had expired, but the buyer would have been entitled not to pay the price only if it had avoided the contract, according to Art. 49 CISG.
The Court found that the buyer's declaration of avoidance was not made according to a provision contained in the seller's general conditions of contract, which were printed on the back of the contract form, and which the Court found to have been incorporated in the contract. This clause provided that the buyer could only declare the contract avoided following an invitation to the seller to comply with the contract, and, even so, no sooner than 15 working days from the date the seller received such an invitation without complying with the contract.
The Court held that the question of validity of the seller's general conditions of contract fell outside the scope of CISG, according to Art. 4(a), and had to be determined according to the law governing the contract, which, according to German rules of private international law, was Italian law. The Court found that the clause was valid under Italian law. Thus, it held that the buyer's declaration of avoidance was without effect, as the buyer had failed to declare the contract avoided according to the contractually established procedure.
The Court held that 'before holidays, not later' did not establish a fixed term for delivery, as it would if this were expressly provided, and the parties did not want to agree on a fixed term for delivery. The Court found that the provision was not clear in that sense, and that the buyer's behaviour also indicated that the term for delivery was not considered to be a fixed one. The buyer, indeed, accepted the first consignment of goods on 5 August 1993, and neither contested the date of 10 September 1993 as the date for delivery of the second consignment as communicated by the seller, nor invited the seller to comply with the contract within 15 days, according to the procedure set out in the seller's general conditions of contract. The seller was therefore entitled to deliver the goods until 10 September 1993, according to Art. 48(2) and Art. 48(3) CISG.
The Court held that even after 10 September 1993, it was not clear to the seller that the buyer intended to avoid the contract, and observed that the buyer could have notified to the seller its intention of avoiding the contract; not having done so, the buyer was not entitled to declare the contract avoided. The Court further observed that the buyer could not have declared the contract avoided under Art. 49(2)(a) CISG for late delivery anyway, as the declaration was not made within a reasonable time after the buyer had become aware that the delivery had been made. The buyer was thus ordered to pay the seller the full price of the goods, this not being the case for application of Art. 81 CISG.
Referring to the previous year's sale, the Court held that only one of the three notices of lack of conformity sent to the seller by the buyer was valid; in this case, the seller could not claim invalidity of notice on the grounds that it was not made within 10 days of delivery. The buyer had in fact sent the defective goods back to the seller, which amounted to a valid declaration of lack of conformity. For this, the only valid notice of lack of conformity, the Court entitled the buyer to retain the full price of the defective goods, as a reduction of price according to Art.50 CISG.
The Court held that the other two claims for nonconformity had no effect, as the seller had validly alleged the expiration of the six-month limitation period provided in its general conditions of contract, and this was not contrary to good faith.
The Court held that the seller was entitled, with reference to the previous year's sale, to recover the amount retained by the buyer, except for the amount relating to the one validly notified lack of conformity claim.
The Court held that the seller was entitled to recover interest, according to Art.78 CISG, at a rate of 10%, this being the statu- tory rate in Italy, accruing from the dates on which the different payments had fallen due.