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| Abstract | ||||||||||||||||||
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| An Italian seller and a German buyer concluded a contract for the sale of shoes. The buyer had unilaterally reduced the price by half claiming that the seller delivered shoes with silver rivets at the toe and therefore not in conformity with the contract. The seller commenced action claiming payment of the remainder of the price.
The court held that the contract was governed by CISG, as the German private international law rules led to application of the law of Italy, a contracting State (Art. 1(1)(b) CISG). The court held that the buyer had acted in conformity with the obligations set out in Arts. 38 and 39 CISG by examining the goods within as short a time as practicable, in this case on the day they were delivered, and giving notice to the seller, specifying the nature of the lack of conformity, the day after delivery. As a consequence the buyer had the right to reduce the price in accordance with Art. 50 CISG. However, the court found that the reduction should have been by one third rather than by half, in the same proportion as the value of the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time. The seller was entitled to the difference between what he received (one half of the price) and what he should have received (two thirds of the price). The court also held that in accordance with the provision of Art. 59 CISG the buyer must pay the price on the date fixed by the contract without the need for any request on the part of the seller. The court awarded interest at a rate of 12% for the period of delayed payment as the average bank lending rate at seller's place of business (Arts. 61 (1)(b), 74 and 78 CISG). |