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| A buyer and a seller concluded a contract for the sale of textiles. The buyer failed to pay the price, and the seller commenced action for payment of price. The buyer responded alleging a fundamental breach on behalf of the seller for late delivery, as the goods had been ordered in the period before Christmas of 1992, and delivered in January 1993, and for non conformity of goods due to defects of the fabric which only had come to its knowledge during the following month, after its own clients sent the buyer charges and complaints for defects of his final product. The buyer also brought a cross-action for damages against the seller.
The Court held that the CISG applied to the contract. The Court observed that no term for delivery was fixed or determinable from the contract in the case at hand and therefore, even considering that the goods were "seasonal items" and that time of delivery was then crucial, the seller performed its obligations by delivering the goods within a reasonable time after the conclusion of the contract (Art. 33 CISG). The Court observed that the buyer had the obligation to examine the goods in as short a period as it was practicable (Art. 38(1) CISG), and held that the buyer lost the right to rely on lack of conformity of the goods, having failed to give notice to the seller specifying the nature of the lack of conformity within a reasonable time after having discovered the lack of conformity (Art. 39(1) CISG). In fact the buyer, after receiving complaints from its customers, did not give notice to the seller of the alleged lack of conformity until it had been sued by the latter for the payment of the price. The Court rejected the counter-action brought by the buyer for damages (Art. 74 CISG), as the seller had not committed any breach of contract, and also because the buyer failed to give any evidence of the alleged damages recoverable within the limits specified in Art. 74 CISG, which should include evidence of previous periods income, and of real losses like canceled orders and consequent losses, loss of clients or loss of commercial reputation. |