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| Abstract | ||||||||||||||||||
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| A seller and a German buyer reached an oral agreement for the sale of wood. The following day the seller sent a telefax confirming the agreement in writing. The goods were shipped four months later and reached Germany after another month; they were then delivered to a third party to which they had been resold in the meantime by the buyer. After examination of the goods the end purchaser notified the buyer of defects found in the goods. The buyer immediately informed the seller thereof. The seller's managing director replied announcing that he would go personally to Germany where he intended 'to market' the goods himself. The purchase price remained unpaid. The seller later on assigned its claim to a company (assignee) which commenced an action against the buyer to recover the price. The first instance court decided in favor of the assignee and the buyer appealed.
As at trial the parties agreed on German law as the law governing the contract, the Court held that CISG was applicable (Art. 1(1)(b) CISG). The Court held that the contract had been validly concluded with the oral agreement and that the buyer's letter of confirmation merely proved its existence. The Court held that the contract had been terminated by agreement between the parties in accordance with Art. 29(1) CISG. Indeed, the seller's reply after receiving notice of non conformity constituted an implied offer to terminate the contract, which the buyer implicitly accepted. It is true that according to Art. 18(1) CISG silence does not in itself amount to acceptance; however silence may amount to acceptance when it is linked to other circumstances. In the case at hand said circumstances consisted in the fact that, following the seller's announcement to resell the goods himself, the buyer had not exercised any remedy under CISG for breach of contract by the seller. |