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| Abstract | ||||||||||||||||||
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| A German company was granted by an Italian manufacturer of fashion goods the right to distribute the Italian manufacturer's products under their trademark, in stores which were especially designed for the exclusive sale of goods bearing the said trademark. Several sales contracts were thereafter concluded between the parties and goods were delivered from the Italian manufacturer ('the seller') to the German company ('the buyer'). Since the price of the delivered goods remained unpaid, the seller commenced an action to recover it. The buyer counterclaimed, alleging inter alia that, notwithstanding the lack of an express and written agreement between the parties, the conclusion of a franchising contract could be inferred from their conduct. The said contract was to be considered invalid under domestic and EU unfair competition law provisions. As a consequence, the invalidity of the framework agreement would entail the invalidity of the individual sales contracts concluded pursuant to it.
The Court held that CISG was applicable to each individual sales contract, since the parties in their opening trial documents had impliedly chosen the law of Germany, a contracting State. Furthermore, during the course of the trial the parties had expressly agreed on the application of CISG, thus enabling the Court not to consider the question of whether a reference to specific provisions of the German Civil Code regarding the contract of sale could amount to an implied exclusion of CISG under Art. 6 CISG. As regards the problem of the validity of the sales contracts concluded between the parties under unfair competition laws, the Court held that it was a matter excluded from the scope of CISG and governed by the applicable domestic law (Art. 4(a) CISG). The Court found that under German law, even if the framework franchising agreement infringed the unfair competition law rules, the individual sales contracts would have to be considered valid. As a result, the Court held that the seller had the right to recover the outstanding purchase price (Art. 53 CISG). The buyer had furthermore claimed damages for a substantial reduction in the sales, allegedly deriving from the 'shocking' character of the advertisements used worldwide by the seller. The appellate Court had left open the question of whether Art. 45(1)(b) CISG barred the application of German domestic law rules on remedies for non performance of contractual obligations different than the ones provided for by CISG (in particular of the rules on 'positive Vertragsverletzung'). The Supreme Court did not pursue the question since it found, in accordance with the lower instance, that in the case at hand the seller had not breached any implied or express contractual obligation. |