|
||||||||||||||||||
| Abstract | ||||||||||||||||||
| ||||||||||||||||||
| An Italian seller entered into a contract with a German buyer for the supply of shoes to be produced by the seller. The buyer ordered the goods according to a model provided by the seller. The buyer did not pay the whole price alleging non-conformity of part of the goods sold. The seller commenced an action claiming payment and interest. At first instance the Court decided in favor of the buyer. The appellate Court confirmed the decision of the lower Court.
The Court held that the buyer was entitled to declare partial avoidance of the contract in accordance with Arts. 49(1)(a) and 51(1) CISG, as the non-conformity of part of the goods sold constituted a fundamental breach of the contract by the seller. According to the Court, the requirements of Art. 35(2)(a) CISG (goods fit for ordinary use) are met where the goods are of average quality and not where the goods are just merchantable. Conformity to a model is relevant only when in the contract there is an express agreement of the parties thereupon; an event which in the case at hand did not occur. The Court held that the buyer's offer to make restitution of the goods was an unmistakable declaration of its intention to avoid the contract (Art. 26 CISG). The buyer's announcement to try to resell the defective goods after the declaration of partial avoidance had to be considered as an attempt to mitigate the damages in accordance with Art. 77 CISG and not as an implicit waiver of its right to rely on the lack of conformity. The seller was not entitled to interest on the price of the conforming goods as the buyer could suspend the performance of its obligations when it became apparent that the seller would not perform a substantial part of its obligations (Art. 71(1)(b) CISG) by not fulfilling its obligation to deliver goods conforming to the contract. In the Court's opinion, non performance as provided for in Art. 71(1) CISG need not necessarily amount to a fundamental breach of contract. |