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| Abstract | ||||||||||||||||||
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| A German buyer ordered from an Italian manufacturer 19 windows which were to be installed in buildings. After delivery and installation of the windows, defects in some of them were discovered. Following the buyer's complaints, the seller delivered new window panes which were reinstalled by the buyer at its own expenses. Part of the contract price remained unpaid. The seller commenced an action against the buyer to obtain payment of the remainder of the price. The buyer counter-claimed set-off of the sums due with the expenses for installation of the substituted window panes. The lower Court decided in favor of the seller and the buyer appealed.
The Court applied CISG to the contract at hand, noting that the express reference to provisions of the German civil code made by the parties in the course of the proceedings, while constituting a valid choice of law according to German private international law rules, was not sufficient to exclude the application of CISG to the contract. The Court held that set-off was a matter excluded from the scope of CISG and governed by the applicable domestic law (German law). CISG was applied, however, to determine whether the buyer was entitled to reimbursement of expenses incurred in installing the new window panes. When goods are non-conforming to the contract the buyer has the right either to require delivery of goods substituting the defective ones (Art. 46(2) CISG) or to require repair of the defective goods by the seller (Art. 46(3) CISG). According to the Court there was no need to decide whether in the case at hand the new window panes constituted a substitution or a repair of the defective goods. Following the buyer's complaints the seller had actually delivered conforming window panes. The Court held that the seller had to bear the costs for substitution or repair of non-conforming goods and that, therefore, the buyer had the right to reimbursement of the installation expenses. The Court finally held that the question of prescription of the buyer's right to reimbursement of expenses was outside the scope of CISG and was to be decided in accordance to the applicable domestic law (German law). |