A company from the Czech Republic (seller) and a company from the Republic of Slovak (buyer) entered into contract for the delivery of material to be used in the manufacture of women's clothing by an Austrian company. The contract was governed by CISG. As the contractual price remained unpaid, the seller brought an action against the buyer.
The Court of First Instance ruled in favor of the seller, finding that the buyer was obliged to pay the price (Art. 53 CISG) plus interest (Art. 78 CISG). The buyer appealed, arguing inter alia that, due to the impossibility of recovering the VAT on the goods, export of the material had become unprofitable and therefore it had to cancel the contract with the seller. Moreover, since the buyer delivered the material to another company, the seller should have required payment of its invoices by the latter.
The Supreme Court decided that the buyer’s appeal was unjustified on the basis of the records and evidence which had already been brought to its attention, as the buyer’s attorney had agreed to have the hearing conducted in his absence and had not provide any further evidence. In the Court’s view, as per Art. 59 CISG, the buyer was bound to pay the price without a formal request being required. Therefore, the payment could not be considered conditional on the issue of invoices. Conclusively, the Supreme Court upheld the Court of First Instance’s decision.
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