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| Abstract | ||||||||||||||||||
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| An Italian seller and a German buyer concluded a contract for the sale of ten tons of frozen bacon to be delivered in two separate installments. Upon receiving complaints from its customers, shortly before Christmas holidays (i.e. about one month after delivery) the buyer informed the seller that the bacon was rancid, without further specifications, and refused to pay the price. Twenty days later, the buyer appointed an expert with the task of examining the goods, and four months later offered restitution of the defective goods. The seller commenced legal action. The buyer alleged that the defects were hidden because the bacon was frozen and that it could not have discovered them before the bacon had been defrosted by its customers. It also submitted a counterclaim for set-off pertaining to expenses it had suffered for having the bacon analyzed by the expert.
The Court held that the buyer had not examined the goods and given notice of the non-conformity in accordance with Art. 39 CISG. As a matter of fact, a period of twenty days between the notice of non-conformity and the appointment of the expert was too long, even considering the interposition of the Christmas holidays. Moreover, irrespective of the hidden or apparent nature of the alleged defects, the buyer had not sufficiently specified whether the lack of conformity related to all the delivered goods or only to a part of them. The Court found that the buyer had not validly declared the avoidance of the contract in compliance with Art. 49(2) CISG. In the Court's reasoning, when the buyer intends to avail itself of the remedies provided for in Art. 45 CISG it must give a proper declaration which enables the seller to be aware of the chosen remedy. In the case at hand, the buyer's offer for restitution of the defective goods could be interpreted as an implied declaration of avoidance; however, since it occurred more than four months after discovery of the defects, it had to be considered not timely (Art. 49(2)(b)(i) CISG), especially considering that the goods in question were food products. Since CISG does not contain any rule on set-off the Court held that Italian law was applicable on this matter. The seller was awarded the purchase price plus interest. As CISG does not determine the interest rate the Court applied the law otherwise applicable to the contract (in the case at hand, Italian law). Since the seller had not given evidence of making recourse to bank loans the Court granted interest at the Italian statutory rate. |