A German buyer and two Spanish sellers entered into a contract for the sale of second-hand cars that had previously been used for rental. According to the contract, the cars had to be in good condition, suitable for use, undamaged by accidents and the price had to be paid in advance. A representative of the buyer examined the cars before they were shipped to Germany and found some defects that the seller promised to repair but never did. Subsequently, the buyer paid the price but when the cars arrived at their final destination some other defects were discovered. The buyer then brought an action against the seller, alleging the seller's breach of contract, but both the First Instance Court and the Appellate Court dismissed its action. The buyer sued the seller again before the Supreme Court.
The Supreme Court adjudicated the claim on the basis of CISG's provisions. In so doing, the Court made an overall analysis of the system of the Convention, mentioning several of its articles in its reasoning. In particular, the Court noted that Art. 25 CISG, which defines fundamental breach of contract, implies a system of liability based on an objective criterion of imputation, mitigated by exceptions that correspond to the situations known in domestic laws as force majeure and fortuitous events and by reasonableness. Moreover, the Convention embodies a unitary notion of non-conformity that encompasses both the delivery of goods of a kind different from that agreed upon in the contract (which in some legal systems entitles the buyer to terminate the contract) and delivery of goods defective either in quantity or quality (in relation to which the buyer, in some legal systems, may invoke the warranty against defects in the goods sold).
As to the merits, the Court found that no breach of contract by the seller had occurred in the case at hand. In fact, the cars' defects were imputable to their previous use that was known to the buyer and referred to by the parties in the contract. Moreover, the defects discovered by the buyer did not reveal that the vehicles had been damaged as a result of car accidents. Besides, the Court held that the buyer had had the opportunity to examine the goods in good time, i.e. before they were shipped to Germany, but the objections raised on that occasion did not imply any declaration of non-conformity according to Art. 39 CISG. For all these reasons the Court considered that Arts. 35, 38 and 39 CISG had not been violated and ruled in favour of the seller.
|