|
||||||||||||||||||
| Abstract | ||||||||||||||||||
| ||||||||||||||||||
| In March 1994, an Italian seller and a Swiss buyer entered into a contract for the sale of Egyptian cotton, to be delivered by the 5th of June in four deliveries of five tons each. After a month, the parties signed another contract concerning the sale of another twenty tons of cotton. Since the Egyptian authorities had imposed on the weaving mill of the country an increase in the price of cotton, the seller asked the buyer to accept an increase of 6% in the sale price. The buyer accepted.
Since the seller did not inform the buyer in good time that the delay indicated in the first contract would not be respected, the buyer asked the seller to perform, then, in the absence of any response, was forced to purchase substitute goods from other suppliers at a higher price. The buyer commenced a legal action, asking for damages. The First Instance Court held that the seller was liable for non-performance and ordered the seller to compensate the buyer for the loss it had suffered. The seller appealed. The Appellate Court held that the contract was governed by CISG. As to the merits, the Court held that due to the non-performance by the seller, the buyer had validly avoided the contract. Applying articles 45(1), 74 and 75 CISG, the Court granted damages and interest to buyer for the substitute purchase considering the difference between the contract price and the price in the substitute transaction. The Supreme Court confirmed the lower Court’s decision. First it confirmed the applicability of CISG in view of the fact that the parties had their places of business in different Contracting States (Art. 1(1)(a) CISG). As to the merits, the Court held that a time of delivery had been fixed according to Art. 33 CISG, and that, according to Art. 11 CISG, such an agreement was not subject to any requirement as to form. Considering the fact that the seller had not performed its obligation to deliver the goods, the Court further held that the buyer had validly avoided the contract (Art. 49 CISG) since the non-performance amounted to a fundamental breach of contract. Referring to Art. 25 CISG, the Court assumed that the final date of delivery was to be considered as fundamental for the buyer, and that consequently the buyer was not bound to fix an additional period of time for performance according to Art. 47(1) CISG, but was entitled to declare the contract avoided. Finally, the Court excluded the application of Art. 79 CISG invoked by the seller in order to justify its non-performance, considering that there was no proof of the existence of an impediment beyond the control of the seller which prevented it from performing its obligation. As far as the burden of proof is concerned, though being a matter not expressly settled by CISG, the Court excluded recourse to the otherwise applicable national law (Swiss law) and referred instead to the general principle “actori incumbit probatio”. Therefore it was up to the claimant to adduce evidence in favor of its cause of action, while it was up to the other party to prove the facts excluding its liability. Damages were calculated according to articles 75, 76 CISG. |