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| Abstract | ||||||||||||||||||
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| A Dutch seller and a German buyer were in a longstanding business relationship dating from the Seventies. In this framework the seller produced movable room-units upon order of the buyer, who either sold or rented them. According to the parties' agreement, the buyer was the sole and exclusive agent for the seller and had the exclusive right to sell the goods within all German speaking countries. A dispute arose between the parties when the buyer refused payment of some invoices alleging lack of conformity of the delivered goods. The buyer commenced an action claiming both that the goods had a structural defect and that the seller had breached their agreement concerning the buyer's exclusive right to distribution.
The Court confirmed the first instance decision on the question of the applicability of CISG. CISG was applicable either according to its Art. 1(1)(b) as the private international law rules lead to the application of the law of the Netherlands, a contracting State, or since 1993 as part of Dutch law which was the law chosen by the parties through inclusion in the contract of the seller's standard terms. Claims referring to deliveries made before entry into force of CISG were to be settled according to the 1964 Hague Convention relating to a Uniform Law on the International Sale of Goods (ULIS). The Court ruled that though the contract contained elements of both work and sales contracts, it had to be considered as a sale under CISG (Art. 3 CISG). CISG was not applicable, however, to the question of breach of the buyer's right to exclusive distribution, which was solved according to the governing domestic law (Dutch law). The Court held that the buyer had lost the right to rely on a structural defect of the goods since it had not examined the goods as soon as practicable under the circumstances (Art. 38(1) CISG). Already in 1990 did the buyer receive complaints from its own customers concerning the quality of the room units. Therefore it should have immediately examined the goods and discovered the structural defects, while it waited six years before doing so, after being confronted with a major damage caused by one of the delivered products. As to other defects of the goods claimed by the buyer, the Court held that the buyer did not examine the goods and give notice of the lack of conformity within the time prescribed in Arts. 38 and 39 CISG and in any case did not observe the maximum time of two years from delivery requested by Art. 39(2) CISG. The Court also denied the buyer's argument that the seller had not produced the movable room-units in accordance with the Industrial Standards applicable in the buyer's country for the industry concerned, though the seller knew that the goods had to be exported inter alia to Germany. The Court stated that in the case at hand it would have been up to the buyer to inform the seller that the production of the movable room-units had to fulfil specific German Industrial Standards. |