- Shanghai Second Intermediate People's Court
- Shanghai Shan Shan Rui Yuan Trading Co. Ltd. v. Lanificio Ing. Loro Piana & C. S.P.A.
BUYER'S OBLIGATION TO PAY THE PRICE (ART. 53 CISG)
TIME OF PAYMENT - PAYMENT AS A CONDITION FOR DELIVERY (ART. 58(2) CISG)
An Italian company (seller) entered into a contract with a Chinese company (buyer) for the sale of cloth to be resold to a manufacturer of suits. The buyer paid the purchase price in part, and the seller delivered the goods with a three-day delay. Because of the delay, the manufacturer was unable to complete its work on time and decided to terminate its contract with the buyer. The buyer then sued the seller, claiming contract termination and restitution of the advance payment. The seller counter-argued that, according to the contract, the buyer was to pay the full contract price before delivery of the goods.
The Court found that CISG should apply to the merits of the dispute, since China and Italy are both Contracting States of the Convention (Art. 1(1)(a) CISG).
As to the merits, the Court rejected the buyer’s claim on the ground that it had failed to pay the full price as stipulated in the contract. In the opinion of the Court, since the contract involved carriage of the goods, the seller was entitled not to hand over the goods to the buyer until the latter had paid the entire contract price (Arts. 53 and 58(2) CISG).
Original in Chinese:
- available at the Wuhan University Institute of International Law,
- available at the University of Pace website, http://www.cisg.law.pace.edu}}