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| An Austrian buyer ordered preprepared planks from a German seller. The contract contained a clause providing for delivery "frei Werk" ("ex work"), according to which the buyer had to take delivery of the goods at the manufacturer's premises and bore the risk of transportation of the goods from that place. Since the seller delivered unprepared planks instead, the parties agreed that the planks should be returned. Upon arrival of the returned planks the seller discovered that they were damaged. The seller started an action to recover the damages suffered.
The Court observed that according to CISG the delivery of goods different than the ones agreed upon (i.e. unprepared instead of prepared planks) is not a case of non-performance (non delivery) but has to be considered as a lack of conformity (Art. 35 CISG). The Court found that the parties had agreed on a consensual termination of their contract which pursuant to Art. 29 CISG does not require a specific form. Given the absence of any specific provision in CISG on the effects of a consensual termination, the Court held that it was a question governed but not expressly settled by CISG and that therefore the provision of Art. 7(2) CISG applied. In order to fill in this gap the Court referred to CISG and not to domestic law, in particular to Art. 81 et seq. CISG on the effects of avoidance. As in the case of avoidance, consensual termination discharges parties from their main duties (Art. 81(1) CISG) and obliges them to make restitution of performances already received (Art. 81(2) CISG). Concerning the seller's claim that the returned planks were damaged, the Court had to determine when the risk concerning the returned planks had passed on the seller. Once again, the Court considered that this question was governed but not expressly settled in CISG, and that reference was to be made to CISG rules on passing of risk and of place of restitution (Arts. 81-84 CISG, which have priority over the general rules of passing of risks in Art. 66 et seq. CISG). To settle the question the Court referred by analogy to the contractual provisions on place of performance of the obligation to delivery. In the case given the parties had stipulated that the buyer had to bear the risk for transportation of the goods to its own premises. This meant in the Court's opinion that in the opposite case of restitution of the goods, the seller had to bear the risk of transportation of the returned goods. As a consequence the risk had passed with the handing over of the planks to the carrier, so that the seller had to bear the risk of damages occurring later. Such a result was further confirmed by Art. 82(2) CISG, according to which the seller has to bear the risks of restitution, since the restitution was caused by the seller's breach of contract. |