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| Abstract | ||||||||||||||||||
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| A German seller and an Austrian buyer concluded a contract for the sale of adhesive foil covers which were to be applied on steel sheets produced by the buyer and sold on to a customer for further processing. Following the customer's complaint, the buyer gave notice to the seller of lack of conformity 24 days after delivery, alleging that the steel sheets were defective since the adhesive film applied thereon could not be removed without damaging the steel sheets. The buyer asked recovery of all costs incurred by its customer in cleaning the steel sheets, plus interest.
According to both the lower and the appellate Court, the choice by the parties of the law of a contracting State as the law governing the contract (in the case at hand, German law), far from amounting to an exclusion of CISG under Art. 6 CISG, leads to its application as part of the domestic law of that State. The lower Court, deciding in favor of the buyer, ascertained the lack of conformity of the goods and held that the notice of the defects given by the buyer to the seller 24 days after delivery was timely. In the Court's opinion, the length of the "reasonable time" referred to in Art. 39(1) CISG depends on the facts of each case, but it should be a longer period than the one usually applied by German Courts, since it is necessary to strike a balance with the more liberal solutions provided by the different legal systems of other contracting States. Therefore, in the case of durable goods a time of approximately one month after the buyer has discovered the defects, or should have discovered them, by examining the goods is to be considered timely. The appellate Court reversed the lower Court's decision. It held that the buyer had lost the right to rely on the lack of conformity, since it had not examined the goods as soon as practicable under the circumstances (Art. 38(1) CISG) and had not given notice of the defects within a reasonable time (Art. 39(1) CISG). Though Arts. 38 and 39 are less severe than the corresponding provisions in German law, in the case at hand if the buyer had processed a sample of the goods upon delivery it would have easily discovered the defects and it could have given notice within 10 to 11 days thereafter. The buyer was required to do so regardless of the fact that the parties had a longstanding business relationship. Nor was the buyer entitled to rely on a reasonable excuse for its failure to give timely notice (Art. 44 CISG), since this provision does not apply in the case of improper examination of the goods. Finally the Court held that the seller had not waived its right to set up the defence that notice was not timely. The Court actually recognized that CISG contains the principle of estoppel ("venire contra factum proprium"), deriving from the principle of good faith (Art. 7(1) CISG). Under CISG, however, the same rule applies as in German domestic law, according to which the mere availability of the seller to reach a settlement agreement does not in itself imply a loss of the right to plead that the notice of lack of conformity was not timely. The intention to waive the defence must be clearly established. |