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| Abstract | ||||||||||||||||||
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| In February 1992 a Finnish company placed an order concerning manufacturing and acquisition of a certain quantity of skin care products (order n.10/92). The seller, a Swiss company, gave its acceptance to the above mentioned order, as well as to order n.9/92 of the same proportion, in March 1992.
According to the terms of the sale, samples of the goods had to be delivered to the VTT (National Scientific Research Center) for checking purposes; the term of delivery, as regards order n.10/92, had to be agreed upon at a later point in time, and the specified price had to be paid within 60 days from delivery. Although the samples had passed the VTT checking procedure on 9 July 1992 and goods of order n.9/92 were regularly delivered, the Finnish buyer first postponed the delivery of the products of order n.10/92, and once the goods were delivered by the seller, he refused to accept delivery and declared the contract avoided. The Swiss seller claimed for damages due for unlawful avoidance of contract, including the loss of the agreed price and for the devaluation of currency, and also expenses for the storage and maintenance of the goods and for destroying them, stating that the buyer did not fulfilled the duties as indicated also in art.60 CISG, which provides that the buyer's obligations to take delivery of the goods consists of doing all the acts which could reasonably be expected in order to enable the seller to make delivery (duty to contribute). The defendant argued that the goods delivered with the order n.9/92 were received in August 1992, and the results of the VTT tests were received on 8 October 1992. Those results highlighted that the vitamin A content of the shipped goods, which were produced together with the second order, had significantly decreased below the minimum agreed level. Being the vitamin A content of the goods a central quality of the products, of which the parties had agreed a specific range, the lack of conformity of the goods to the agreed standards could be considered as a fundamental breach of contract. Thus, the buyer had the right to notify in the proper manner that the goods did not conform to the quality requirements and that he would declare the contract avoided in relation to order n.10/92, as provided in art.72 (2) CISG. The Court of first instance considered CISG applicable to the present case, as the place of business of the seller was Switzerland. The Vitamin A content of the goods had to be considered a central quality of the goods sold. The seller had given guarantee that the essential qualities (specified range of content of vitamin A) should have been kept also throughout the shelf-life of at least thirty months. Thus, the seller delivered goods non conforming to the agreed requirements, because after three months from the manufacturing they had failed the VTT tests. It is true that the seller offered the buyer to remedy the defects of the goods delivered. However, the buyer was entitled to refuse such an offer since under the circumstances of the case any effort by the seller to cure would have caused the buyer excessive harm or uncertainty (Art. 37). The Court considered that the buyer was clearly entitled to declare the contract avoided as defined in art.72 CISG, and that the seller's breach of contract clearly fulfils the conditions for fundamental breach of contract as defined in art.25 CISG. Although the seller had renewed his claims to the Court of Appeal, the latter held that there are no reasons to change the judgement of the Court of First Instance. |