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| A Czech buyer and a Belgian seller concluded a contract for the sale of a diesel tram. The seller sued the buyer for payment of the remaining part of the price plus damages according to a liquidated damages clause provided for by the contract. The buyer alleged that the tram was non-conforming, since it could not reach the speed agreed upon and had latent defects.
The Court held CISG applicable since both the Czech Republic and Belgium are Contracting States (art. 1(1)(a) CISG). As to the merits, the Court found that the contract did not contain any specification regarding the maximum speed the tram would reach. Moreover, as to the latent defects, the Court held they could easily have been detected by inspection or a test drive (Art. 38 CISG). Therefore, a notice of lack of conformity four months after delivery was considered to be untimely (Art. 39 CISG(2)). As a result, the buyer was ordered to pay the whole purchase price. Furthermore, the Court denied that the seller was entitled to damages according to the liquidated damages clause, since there was no evidence that the buyer at the time of conclusion of the contract had knowledge of or had accepted the seller's standard terms containing the liquidaged damages clause in question. Finally, the seller was awarded interest (Art. 78 CISG) at the statutory Belgian rate. |