|A Swiss seller concluded a contract with a Liechtenstein buyer for the delivery of several installments of lambskin jackets - both for woman and man - which were to be resold by the buyer to a final customer in Belarus. The buyer first received two deliveries and paid for them. By the third and fourth delivery, which were directly sent to the buyer's storage in Belarus, the buyer refused to pay the full price, alleging that all goods received did not conform to the samples as to their color and weight. The parties met later in order to solve the dispute but to no avail. The seller commenced an action asking for payment.
The Court applied CISG (Art. 1(1)(b) CISG) and held that the parties had concluded an installment contract. Contrary to Swiss domestic law, Art. 73 CISG does not require that each delivery concern the same goods (in the case at hand, the seller had delivered first jacket for woman and then for man).
The Court held that the question of agency is not covered by CISG and was to be solved according to the applicable domestic law (Swiss law).
As to the buyer's claim of lack of conformity of the goods, the Court first addressed the question of the burden of proof. The Court held that such a question, though not expressly regulated in CISG, should be solved by looking at the Convention as a system. If the buyer has accepted the goods without complaints, it is up to the buyer to bring evidence of the existence of a defect, of the timely examination of the goods according to Art. 38(1) CISG and of the timely and sufficiently precise notice of lack of conformity given to the seller according to Art. 39(1) CISG.
As to the first delivery, the Court held that in the case at hand the buyer should have examined the goods by samples as soon as they arrived at its storage place. Taking into account that the alleged defects (color and weight) were easily detectable, the buyer should have been able to discover them within a week to ten days thereafter. The buyer should then have given notice of the lack of conformity at the latest one week to 14 days later. On the contrary, it waited until receiving customer's complaints, more than a month afterwards.
This all the more so for the second installment, since discovery of defects in the first one should have induced the buyer to a more thorough examination of the delivered goods.
Moreover, the buyer's notice of non conformity should have been sufficiently precise according to Art. 39(1) CISG, which was not the case for the third and fourth delivery.
Nor had the buyer brought evidence that the seller waived its right to raise the claim that the notice was not timely given. Such a waiver cannot be assumed from the mere readiness of the seller to discuss the issue with the buyer. This results both from the need of certainty in commercial transactions, and from the principle of good faith, which is applicable also under CISG in the interpretation of the parties' statements and conduct (Art. 8 CISG).
As to the buyer's claim that the seller had partly delivered goods of a different model than the one agreed upon, the Court first observed that CISG does not distinguish between lack of conformity and delivery of totally different goods (aliud pro alio). It then held that since the seller knew of the lack of conformity, the buyer could still rely on it even if it failed to give timely notice thereof (Art. 40 CISG). The seller was however admitted to prove either that the buyer had agreed on a modification of the contract (Art. 29 CISG), or that the delivered model had the same value for the buyer as the one contractually agreed upon.
Finally, no consensual termination of the contract under Art. 29 CISG regarding the delivered third and fourth installments was proved by the buyer. The Court held that the modification or termination of the contract is governed by CISG rules on formation of contract (Arts. 14 and seq. CISG). In the case at hand, the correspondence between the parties showed that neither of them had accepted the other's offer as to termination, since the modifications were material and prevented conclusion of the termination agreement under Art. 19(1) CISG.
The seller was granted payment for all delivered installments. As to currency of payment, the Court held that it was a question not covered by CISG and applied domestic law.
The seller was further awarded interest on the price (Art. 78 CISG), without the need of a formal request by the seller, accruing from the date the price was due (Arts. 58 and 59 CISG) and at the rate determined by the domestic law otherwise applicable in the absence on CISG (in the case at hand, Swiss law).