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| An Italian company sold twenty electric kettles to a Dutch buyer. The seller delivered the kettles but the buyer refused to pay the price. The seller commenced an action to recover the contract price. At trial the buyer submitted a counter-claim for set-off pertaining to damages suffered and repair costs incurred because four of the kettles were defective.
The Court held that the contract was governed by CISG, as the Dutch private international law rules led to the application of the law of Italy, a contracting State (Art. 1(1)(b) CISG). The Court decided in favour of the seller. The buyer was not entitled to set-off its claim for damages against the seller's claim. The Court noted that CISG does not address the question of set-off. Moreover, the Court held that under Art. 39 CISG the notice of non-conformity must be given within a reasonable time, which means 'as soon as possible' upon discovery of the defects. In the case at hand, a notice given more than three months after discovery of the defects was found not to be reasonable. The seller was entitled to interest under Art. 78 CISG, accruing from the date when payment was due which, in the absence of an agreement between the parties, was the date of delivery of the goods (Art. 58 CISG). As Art. 78 CISG does not determine the rate of interest, the Court applied the Dutch private international law rules which led to the law of Italy and as such to the Italian statutory interest rate. Finally, the Court ruled that, although under CISG a devaluation of the currency of the price is in principle at the risk of the seller, in this case the buyer had to pay damages for devaluation since the seller would not have incurred this loss if the buyer had paid in due time. |