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| A German buyer ordered knitwear from an Italian seller, through a third person who usually acted as intermediary between the two parties. As the buyer failed to pay the purchase price after delivery of the goods, the seller commenced a legal action to obtain the price with interest. The buyer claimed set-off with damages deriving from non-conformity of the goods.
The seller was entitled to payment of the price since a valid contract had been concluded and the price was due (Art. 53, 58(1) and 59 CISG). As to the currency of payment, the Court observed that it is a question governed but not expressly settled by CISG. The Court referred first to the view that according to a general principle underlying CISG the seller's place of business governs all questions relating to payment in the absence of a contrary parties' agreement or usages and therefore also the question of currency (Arts. 7(2) and 57(1)(a) CISG). Alternatively, it mentioned the view that the question cannot be solved by applying a general principle of CISG but referring to the domestic law otherwise applicable to the contract. The Court however did not choose between the alternatives since in the case at hand the result was the same (currency of the seller's place of business). As to the question of interest, since Art. 78 CISG does not determine the rate of interest, the Court stated that it was to be determined according to the domestic law otherwise applicable to the contract (Italian law). The Court rejected the buyer's claim to set-off. In the Court's opinion, the buyer had lost the right to rely on a lack of conformity of the goods since it failed to prove that it had given timely notice of the lack of conformity to the seller (Art. 39(1) CISG). As to the effectiveness of a notice given to the third party acting as intermediary, the Court held that the question of agency is not covered by CISG and found that according to the applicable German law the intermediary did not act as an agent of the seller. |