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| Abstract | ||||||||||||||||||
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| A German buyer, who had had a business relationship with a French seller, ordered textiles to be produced from the seller. The buyer did not pay the full price alleging non-conformity of goods sold under a previous contract and the seller commenced an action claiming payment of the balance with interest. The buyer counter-claimed asserting that the parties had previously agreed on a reduction of the price in the measure of 20%.
The Court held that the contract was governed by CISG, as at the time of the conclusion of the contract the parties had their places of business in contracting States (France and Germany) (Art. 1(1)(a) CISG). The Court furthermore held that CISG was applicable since the contract between the parties was a contract for the 'supply of goods to be manufactured or produced' and the buyer had not undertaken to supply a substantial part of the materials necessary for such manufacture or production (Art. 3(1) CISG). The Court held that there was sufficient evidence of the agreement for the reduction of the price and therefore awarded the seller only the difference between the price as reduced by agreement and the price actually paid. The Court finally awarded interest to the seller pursuant to Art. 78 CISG. As CISG does not indicate the interest rate, the Court referred to German private international law rules to ascertain the applicable law for the determination of the interest rate (in the case at hand, the Court applied French law and the interest rate amounted to 9.63% ). |