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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. After lengthy negotiations with the seller regarding the extent and modalities of damages, the buyer asked recovery of all costs incurred by its customer in cleaning the steel sheets, plus interest.
The appellate Court (Oberlandesgericht Karlsruhe, 25-06-1997, see Abstract and Full Text in UNILEX) reversed the lower Court's decision (Landgericht Heidelberg, 02-10-1996) which was in favor of the buyer and dismissed the action because the notice of the defects had not been given within a reasonable time (Art. 39(1) CISG). The Supreme Court agreed with both the lower and the appellate Court in that the parties' choice of the law of a contracting State as the law governing the contract (in the case at hand, German law), leads to the application of CISG as part of the domestic law of that State. Unlike the appellate Court, however, the Supreme Court did not decide whether the buyer had properly examined the goods (Art. 38 CISG) or given notice of the lack of conformity within a reasonable time (Art. 39(1) CISG). It also left open whether or not the seller had lost its right to rely on Arts. 38 and 39 CISG because he had acted in bad faith (Art. 40 CISG). In the Supreme Court's opinion, during negotiations on the determination of damages the seller had implicitly waived its right to set up the defense that notice of lack of conformity was not timely. The Court held that although as a general rule the mere availability of the seller to an amicable settlement does not constitute such a waiver, in the case at hand the parties had negotiated for almost 15 months on the measure and modalities of the payment of damages for non conformity, without the seller expressly or implicitly reserving the defense that notice of lack of conformity had not been timely. This conduct could only be reasonably interpreted by the buyer as an implied waiver of the defense (Art. 8 (2) and (3) CISG). |