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| A German seller and an Austrian buyer concluded a contract for the sale of a printing system made up of different components with related software (the System). The buyer's letter of confirmation contained a guarantee clause concerning the System. Soon after the installation the buyer gave notice to the seller of a lack of conformity, alleging inter alia a lack of documentation regarding the System. The buyer granted the seller an additional period of time for the delivery of such documentation. Following the seller's failure to perform within the additional period, the buyer refused to pay the price and declared the contract avoided.
In order to determine whether it had jurisdiction, the Court affirmed that regard was to be had to the place of payment of the price which in accordance with Art. 57 (1)(a) CISG it deemed to be the seller's place of business. In this respect, the type of payment by installments agreed upon in the contract (i.e., 20% after receipt of the confirmation letter; 60% after delivery and 20% after installation) was not considered as evidence of a payment to be made against the handing over of the goods or of documents pursuant to art. 57(1)(b) CISG. In the Court's opinion the buyer did not sufficiently specify the lack of conformity in compliance with Art. 39 CISG as the notice of non-conformity only referred to the System in general and not to single components of the System such as the monitor or the central unit. The buyer was not therefore entitled to declare the contract avoided on this ground. The Court consequently returned the case to the Court of Appeal in order to determine whether the declaration of avoidance could be based on another lack of conformity in accordance with Art. 49(1)(a) CISG or the contractual guarantee. |