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| Abstract | ||||||||||||||||||
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| A French seller and a US buyer concluded in 1991 a contract for the sale by installments of clothes, which the buyer upon request of the seller declared it intended to resell to a distributor in South America. After the delivery of a first installment of the goods, the buyer refused to provide the required documentary evidence that the goods had actually been delivered to the distributor in South America. The seller, after having been informed that the goods were actually sold to a distributor in Spain, refused to deliver the other installments. The buyer claimed damages for breach of contract. The seller, on its part, claimed damages on the ground that the sale of its products in Spain had been seriously hampered by the parallel distribution made by the final customer of the buyer.
The Court decided that the contract was governed by CISG (Art. 1(1)(a) CISG). The Court held that the fact that the goods were to be delivered in South America was of essential importance for the seller, as shown by a number of statements to this effect made by the seller in the course of the negotiations. Since the buyer knew of the actual intention of the seller, the latter's statements were to be interpreted accordingly (Art. 8(1) CISG). The buyer's breach of the contract in respect of the final destination of the goods was considered a fundamental breach under Art. 25 CISG, which entitled the seller to declare the contract avoided. This all the more so since according to Art. 73(2) CISG, in case of a contract for delivery of goods by installments, the seller may declare the contract avoided for the future provided that it does so within a reasonable time and that the buyer's failure to perform its obligations gives the seller grounds to conclude that a fundamental breach will occur with respect to future installments. Moreover, the Court held that the conduct of the buyer as a whole was contrary to the principle of good faith in the international trade as referred to in Art. 7 CISG. Its conduct was further aggravated by commencing a lawsuit against the seller, which the Court considered an 'abus de procédure'. |