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| An English seller-defendant and a German buyer-plaintiff entered into a contract for the sale of vegetables. When he seller failed to deliver the goods, the buyer had to purchse replacement goods elsewhere on the market. The buyer sued the seller for the payment of damages caused by the non-delivery of the goods.
The contract was silent as to the applicable law. The court held that the contract was governed by CISG even though the UK is not a contracting state. Indeeed,the German rules of private international law led to the application of the law of Germany, which is a contracting State (Art. 1(1) (b) CISG). The court held that the buyer's claim for damages was justified according to Art. 45 (1) (b) and Art. 75 CISG. As to the amount of damages, the Court held that the buyer was entitled to the difference between the contract price and the price it had to pay in the substitute transaction. The court found that the buyer had fulfilled its burden of proof as to the replacement purchase. The court further held that in calculating the sum of damages the legal form of the buyer's subsidiary, from which the replacement goods were purchased, is of no relevance. The court held that the buyer did not fail to take reasonable measures to mitigate the loss (Art. 77 CISG). The court found that the buyer was not required to breach its contracts vis-a-vis its customer and to pay a contractual penalty below the cost of the replacement purchase made. |