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| Abstract | ||||||||||||||||||
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| On September 20, 1989 a German buyer ordered 120 pairs of shoes from an Italian seller through a commercial agent, in accordance with the seller's standard form. The standard form contained a clause granting the buyer exclusive rights to distribute within a specific district ('Esclusiva su B'). Once the shoes were delivered, the seller requested that the buyer pay within 60 days of delivery. The buyer, after having sold 20 pairs of the shoes, discovered that the seller had sold the same type of shoes to another German company in another district, who distributed the shoes at a lower price through its branch in the first buyer's district. The buyer sent the remaining 100 pairs of shoes back to the seller cancelling its order and promising payment for the 20 shoes. The seller claimed payment of the full 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 held that the buyer had not validly avoided the contract in accordance with Art. 49(1)(a) CISG as it failed to give express notice of avoidance. The court left open the question whether an implied notice of avoidance is effective under CISG. The court observed, however, that even if an implicit notice of avoidance were effective, in the present case there was no clear intention of the buyer to avoid the contract, as the buyer had promised payment of the 20 shoes it had sold. The court further held that there was no fundamental breach according to Art. 25 CISG since the seller could not have known where the second buyer's branches were located. The court finally held that the seller was entitled to interest (Art. 78 CISG). As CISG does not expressly specify the rate of interest payable, the court held that the rate was the statutory rate of the seller's place of business. Further, as there was no evidence of any other damage suffered by the seller, no other damages were awarded. |