On September 25, 1988 a German buyer and an Italian seller concluded a contract for the sale of shoes at the price of DM 10107,19. The parties agreed that the goods should be delivered at the buyer's place of business, at the seller's expense. They also agreed that the carrier would not deliver the goods to the buyer until the buyer had paid 40% of the price ('Leistung Zug um Zug' clause). The balance was to be paid within 60 days of delivery of the goods. The seller handed over the goods to the carrier together with an invoice for the amount of DM 10107,19. However, upon the seller's request, the carrier suspended delivery of the goods, which was resumed five months later, that is only when the buyer had paid 40% of the agreed price. Following delivery of the goods, the buyer, instead of paying the remaining 60% of the price, only paid DM 1000. The seller commenced legal proceedings claiming payment of the balance of the purchase price.
The court held that the contract was governed by CISG, as the German private international law rules led to the application of the law of Italy, a contracting State (Art. 1(1)(b) CISG).
The court dismissed the seller's claim. In accordance with Art. 71(3) CISG where a party suspends performance it must immediately give notice of the suspension to the other party. In this case the seller did not give notice to the buyer of its suspension and as such the buyer was entitled to recover damages pursuant to Art. 45(1)(b) CISG. |