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| Abstract | ||||||||||||||||||
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| An Austrian seller and a German buyer entered into a contract for the sale of laminated glass. The seller delivered the glass to the buyer’s Swiss subsidiaries which further processed the glass to fit customers’ requests. In 1998 the seller changed the hardening process for the resin it used in laminating the glass and alerted the buyer’s subsidiaries about the change. Defects began to appear (partial detachment of the casting resin from the glass). The subsidiaries failed to give notice of the defects within two years of delivery. The subsidiaries assigned their claims to the buyer who filed suit against the seller claiming damages.
The First Instance Court held that CISG applied to the case at hand. It further held that the cause of the damage had not been the resin used by the seller but the finishing process by the subsidiaries, thereby rejecting the buyer's claim. The Appellate Court found that any claim for damages was precluded by the fact that no notice of lack of confomity was given within the two-year time limit. Nevertheless, it held that the case would be open for revision by the Supreme Court, since this latter had not yet decided whether the time limit in Art. 39(2) CISG is applicable with respect to claims for damages based on contractual relationships and hidden defects. The Supreme Court rejected the buyer's claim. In doing so, it found that, contrary to what the buyer had asserted, Art. 40 CISG, which bars the seller from relying on Arts. 38-39 CISG, could not be applied in the case at hand, given that the buyer had not provided sufficient evidence that the seller was aware or could not have been unware of lack of conformity. Furthermore, having also recourse to the Convention's legislative history, the Court stated that the time limit in Art. 39(2) was absolute and applied to both obvious and hidden defects. Therefore, as the buyer had failed to provide timely notice to the seller, its claim for damages had to be dismissed. |