A Canadian buyer and an U.S. seller concluded a contract for the supply of vacuum panel insulation. In order to meet the terms of a pre-existing agreement concluded with the Canadian Department of National Defence (DND) for the production and installation of a plant in the High Arctic, the buyer fixed a specific schedule for delivery. The buyer paid the contract price but the seller failed to effect delivery at the agreed time. As a result, the buyer terminated the contract, asking for reimbursement of the price.
The Court stated that CISG was applicable in the case at hand (Art. 1(1)(a) CISG).
As to the merits, the Court held the buyer entitled to terminate the contract (Art. 49(1) CISG). In reaching this conclusion, the Court found that the delivery date indicated in the contract was essential to the buyer and the seller had knowledge thereof. In fact, the seller knew that the buyer had to comply with the pre-existing agreement concluded with the DND and that the equipment had to be installed in a short time, due to the short length of the Artic summer. As a result, late delivery by the buyer amounted to fundamental breach according to Art. 25 CISG.
|