Date: 23.06.1995
Country: Germany
Court: Amtsgericht M√ľnchen
Parties: Unknown
An Italian seller and a German buyer concluded a contract for the sale of a chemical substance with a certain quality for the production of pharmaceuticals. After delivery to the buyer's place of business, the buyer sent the goods to its customer. Due to customer complaints that the delivered substance was not fine enough to start the production of pharmaceutical products, the parties agreed that the seller should remedy the defective goods in Italy. The goods were to be sent back to Italy by a German carrier indicated by the seller and delivered immediately to the seller at its own expense. Upon calling the German carrier, the buyer found out that the goods had not yet been forwarded to Italy and informed the seller thereof. The buyer then proceeded to have the goods treated in Germany at its own expense, claiming that treatment had to be done immediately as the customer could not resume production of the pharmaceuticals without the goods. The buyer deducted the treatment costs from the purchase price. The seller claimed payment of the whole price alleging that it would have treated the goods at a much lower price in Italy, had the goods arrived on time to Italy.

The Court stated that under Art. 48(1) CISG, the seller may remedy at its own expense any failure to perform its obligations if it can do so without unreasonable delay.

The Court held that the seller's attempt to remedy the defects failed as the goods had not reached Italy on time. Any further delay of treatment would have been unreasonable as the buyer's customer had to stop production during the time the goods underwent treatment and this would have led to claims for damages on the part of the buyer's customer.

The buyer was neither obliged to fix an additional time for performance by the seller as stated by Art. 47 CISG because this is not a condition for a claim of damages under CISG.

The Court further held that the buyer had not lost its right to claim damages due to an act or omission on its part (Art. 80 CISG) as it had observed the seller's instructions regarding redispatch of the goods to Italy and was not responsible for the performance of the carrier's obligation. The seller was responsible for performance of carrier's obligation as it was exercising its right to cure a failure to perform. According to the Court, the buyer could recover the treatment costs for the defective goods as damages, as they were foreseeable by the seller (Art. 74 CISG).

Although the buyer did not earlier inform the seller of the urgent need of the goods by its customer, the Court stated that the buyer had not breached its duty to mitigate the loss (Art. 77 CISG) because it was not clear whether the buyer knew the precise starting date of production by its customer and, furthermore, the seller was expected to know that any further delay would be unreasonable.

The Court finally held that a set-off for the loss arising from the lack of conformity against the seller's claim for the price was to be governed by Italian law and that the conditions for it were fulfilled.