In 1989 a German seller and a French buyer concluded a contract for the sale of electronic goods ("servomotors"). Afterwards the buyer resold those goods to its own customers. Due to complaints from its customers about the defective functioning of the servomotors, the buyer did not pay seven invoices issued by the seller and terminated its business relationship with the latter. The seller sued the buyer for the recovery of the purchase price. The Court of first instance stated that CISG was the law applicable to solve the dispute, and ordered the buyer to pay the purchase price plus interest. The buyer appealed, alleging that the goods delivered were defective, and claimed damages amounting to the expenses sustained in the attempt to cure the defects of the goods as well as damages arising out of the termination of the contractual relationship with the seller. The seller invoked the application of the 1955 Hague Convention on the law applicable to the international sale of goods, which led to the application of German domestic law, and denied that it had delivered defective goods.
With respect to the issue of the applicable law, the Appellate Court held that the contract was governed by CISG, because, after its entrance into force in 1988, it had replaced the 1955 Hague Convention in France and Germany, both contracting States.
As to the merits of the dispute, the Appellate Court, without further mentioning CISG, held the buyer liable for breach of contract. In reaching this conclusion, the Court found that the evidence presented by the parties showed that the defective functioning of the servomotors was probably due to the buyer itself, which had recommended its customers some modification for the setting-up of the servomotors; the Court remarked that these modifications were even contrary to the setting-up instructions of the servomotors, and this notwithstanding the fact that the seller (their producer) had invited the buyer to respect them on a number of occasions. Therefore the Court confirmed the first instance decision and ordered the buyer to pay the full amount of the purchase price as indicated in the invoices. |