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| An Italian seller and an Austrian buyer concluded a contract for the sale of marble slabs of a certain quality and description. The buyer reduced the price alleging that the slabs delivered by the seller did not conform to the model provided by the buyer. The seller commenced action against the buyer claiming payment of the full purchase price.
In referring the case to the court of first instance, the Court of Appeal instructed the lower court to verify whether or not the parties had agreed that the delivery of goods should conform to a model provided by the buyer. The Court stated that, in principle, the fact that the model was provided by the buyer and not by the seller, as set forth under Art. 35(2)(c) CISG, does not prevent the application of Art. 35(2)(c) CISG. However, should the provisions of Art. 35(2)(c) CISG be deemed inapplicable, the obligation of the seller to deliver goods of a certain quality and description required by the contract must be upheld under Art. 35(1) CISG. The Court gave further instructions to the lower court concerning the calculation of the price reduction under CISG, should the court find that the seller had delivered goods that did not conform to the model or to the contract. Under Art. 50 CISG, the buyer is entitled to reduce the price in the same proportion as that which the value of the goods actually delivered bears to the value of the goods had they conformed to the buyer's model. Other than Austrian law, under CISG the value of the goods is to be determined at the time of delivery of the goods and not at the time of the conclusion of the contract. In addition, according to the Court, the value of the goods, in analogy with Art. 76 CISG, must be determined according to the market value at the place of delivery. In calculating the price reduction, the Court stated that regard must be given also to the applicable usage under Art. 9(2) CISG. The Court pointed out that, although under Art. 9(2) CISG any usage must or ought to be known by the parties, and must be widely known in the international trade and regularly observed, it is also possible that, in certain circumstances, a local usage may be applicable to the contract. This is particularly the case with respect to usage applied within local commodity exchanges, fairs and warehouses, provided that such usage is regularly observed also with respect to businesses involving foreign dealers. Finally, the Court does not exclude that even a local usage applied only in a particular country may be applicable to a contract involving a foreign party, provided that the foreign party does business in the particular country on a regularly basis and that it has concluded several contracts of the same manner in the same particular country. |