In 1991 a German seller and a Dutch buyer concluded a contract for the sale of textiles. Upon delivery the buyer sent part of the goods back. It only paid for those goods which it had accepted and sent a letter to the seller in which it explained his conduct. Two years later the seller commenced an action claiming for payment. The buyer maintained that no further payment was due and that if it had been the seller was estopped from invoking its right since it had remained inactive for almost two years (Verwirkung).
The Court held that the contract was governed by CISG, as the Dutch private international law rules led to the application of the law of Germany, a contracting State (Art. 1(1)(b) CISG).
The Court held that the question whether the seller was estopped from invoking its right to payment was governed by German law. According to the Court, under German law the seller should have been considered 'verwirkt' (estopped) if (a) its behaviour had made the buyer believe that the right would not be invoked anymore and (b) the buyer had acted in reliance upon it. The Court held that the condition under (b) was not met. Moreover, the seller had replied to the buyer's letter. The buyer's allegation that this letter had never reached it because it had changed address, was irrelevant since under CISG a declaration reaches the addressee when it is delivered to its place of business or mailing address (Art. 24 CISG). |