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| From 1989 to 1996 an Italian seller and a Canadian buyer were in a business relationship concerning the sale of picture frame mouldings. When the buyer came into financial difficulties the seller first granted delays in payment, then commenced an action to recover the unpaid balance of the price for goods previously sold and delivered. The buyer counterclaimed alleging, inter alia, lack of conformity of some of the goods and over-shipment.
The Court held that CISG was applicable under its Art. 1(1)(a), since the disputed sale contracts were concluded after entry into force of CISG in both Italy and Canada. In dealing with the merits of the dispute, the Court held that the buyer had lost the right to rely on lack of conformity, having failed to give notice to the seller within a reasonable time after it ought to have discovered the defects (Art. 39(1) CISG). Furthermore, the Court rejected reliance on Art. 40 CISG, as there was no evidence that the seller was aware or should have been aware of the defects before delivery. Moreover, the Court rejected the claim as to delivery of excess quantity, since the buyer had always accepted and paid for higher quantities of goods (Art. 52(2) CISG), and the contract provided for a range of variation in the quantity up to 10%. Finally, the Court awarded the seller payment of the price plus interest, determined according to the lex fori. |