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| An Italian seller delivered to a Swiss buyer movable walls to be installed in a heliport. A first delivery concerned walls for the heliport workshop, while a second one walls for the heliport offices. The seller sued the buyer for payment of an outstanding part of the price. The buyer on its part refused to pay it, alleging that it had the right to set that sum off against damages for non-conformity, since the walls of the second delivery were not sound-proof as agreed in the contract.
The first instance Court granted the seller payment, holding that the walls were sound-proof but they had not been correctly installed by third parties, who were however not acting for the seller in installing the goods. The buyer appealed while the seller counter-claimed that a part of the due price was still outstanding. The appellate Court first held CISG applicable, since both parties had their place of business in two different contracting States and the delivery of the walls was to be considered the preponderant part of the contractual obligations at issue (Arts. 1 (1) (a) CISG and Art. 3 (2) CISG). The Court observed that the seller would be liable for failure to perform if this were due to the failure by a third person whom he had engaged to perform, unless both the seller and the third person were exempted under Art. 79 (1) CISG. According to the Court, however, the buyer had not succeeded to prove that the third parties who installed the walls were really acting for the seller as far as the instalment was concerned. Therefore, since it was up to buyer to bring evidence on the issue, the seller could not to be considered liable for errors in the installation. As to the seller’s claim that a part of the price was still outstanding, the Court found that it had been paid to the third persons who executed the instalment. Interpreting the seller’s statements and conduct under Art. 8 (2) and (3) CISG, thus according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances (which was considered to be the expression of the principle of reliance as a general principle underlying CISG), the Court held that the buyer was reasonably entitled to pay to the third persons until receipt of the seller’s communication ordering payment into a specific bank account. After that communication the buyer would have had to pay either at the seller's place of business or into the designated bank account (Art. 57 CISG). |