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| Abstract | ||||||||||||||||||
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| A German buyer and an Italian seller concluded a contract for the sale of fashion goods. Each of them relied on its own standard terms which contained, inter alia, a choice of law clause respectively in favor of German law and of Italian law. The buyer ordered the goods on the basis of a sample delivered by the seller. The buyer refused to pay the purchase price alleging that the goods did not conform with the contract as they did not possess the qualities which the seller had held out to the buyer. The buyer claimed that it had given the seller notice of non conformity by telephone one week after discovery. Six weeks after discovery the buyer sent a fax to the seller and declared the contract avoided.
The Court held that the contract was governed by CISG, since the parties had their places of business in two contracting States (Art. 1(1)(a) CISG) (Italy and Germany). The Court held that the buyer could not rely on the lack of conformity of the goods: the buyer had not proved that it had given notice of non conformity to the seller by telephone. The Court pointed out that in case of a notice by telephone, the buyer must indicate the precise person who received the call and the contents of the conversation and give evidence thereof. The Court further held that a notice of lack of conformity given six weeks after discovery of the defects is not within a reasonable time after discovery (Art. 39 CISG), all the more when the goods are closely related to a particular season. As a consequence, the seller was entitled to recover the unpaid contract price and interest. Absent an express provision in CISG, the Court held that the interest rate was to be determined in accordance with the law otherwise applicable to the contract. In determining this the Court had first to establish whether there was a valid choice of law clause in the contract. As to the choice of law clause in favor of Italian law contained in the seller's standard terms, the Court held that it had not become part of the contract. According to the Court, the fact that the parties had started performance of the contract showed their intention to be bound by it and by the terms already agreed upon as well as by any standard terms which were common in substance, with the exclusion of the conflicting terms such as the choice of law clauses. This meant that the parties had impliedly derogated from Art. 19(1) CISG, which provides that a reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counteroffer. The Court held that neither the choice of law clause in favor of German law contained in the buyer's standard terms was valid, as the buyer failed to give evidence that it had sent its general conditions of purchase in a language other than German, which was not the language of the contract. Accordingly, the interest rate was to be determined in compliance with German private international law rules which referred to Italian law. |