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| Abstract | ||||||||||||||||||
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| An Austrian seller and an Austrian buyer, the latter having its place of business in Italy, have been in a longstanding business relationship for the delivery of wood. The buyer, alleging non-conformity of several deliveries, refused to pay the price. The seller commenced an action to recover the contract price. It alleged that the buyer had never given proper notice of non-conformity. The buyer counter-argued that it had given an oral notice of non-conformity immediately after delivery.
In appealing the decision before the Federal Supreme Court, the seller alleged that, as both parties were Austrian dealers, the buyer should have given notice of non-conformity according to the Austrian usage applicable in the trade of wood, according to which the notice must be given in writing within seven days upon delivery of the goods. The buyer counter-argued that its notice of non-conformity was validly given under Arts. 38 and 39 CISG. The Supreme Court, remanding the case to the lower court, held that the citizenship of the parties (in the case at hand: both Austrian) is not relevant in order to determine whether CISG is applicable. Since the parties had their place of business in two different contracting States (Austria and Italy), CISG was applicable (Art. 1(1)(a) CISG). The Supreme Court upheld the decision of the court of appeal, which held that, according to Art. 39 CISG, notice of non-conformity may also be given orally, provided that the notice, to be effective, is properly transmitted and understandable by the other party as required under Art. 27 CISG. Furthermore, it pointed out that according to Art. 39 CISG, notice of non-conformity must be given within a reasonable time and that, pursuant to the majority of German case law on CISG, under certain circumstances a notice given even one month after delivery is still to be considered as reasonable. In the case at hand, the Supreme Court instructed the lower court to take into account that, from a general point of view, unless the relevant circumstances require to shorten or to lengthen the reasonable time of notice of non-conformity, under CISG a time of 14 days is to be considered as the reasonable time, given the different legal traditions among Contracting States. With respect to the Austrian usages in the trade of wood, which, if applicable, would prevail over the provisions of CISG, the Supreme Court instructed the court of remand to decide whether the Austrian usages concerning time of notice of lack of conformity in the wood trade which are different from the requirements set forth in Arts. 38 and 39 CISG - comply with Art. 9(2) CISG, and in particular whether such usages are widely known and regularly observed in the said trade. |