- BS 150-1320/2010
- District Court Horsens
- Julie George v. Kristian Skovridder
LACK OF CONFORMITY OF GOODS (ART. 35 CISG) - BUYER ENTITLED TO TERMINATE THE CONTRACT (ART. 49 CISG)
[CLOUT Case 1364; abstract prepared by J. Lookofsky, National Correspondent]
In 2009 a Canadian resident (B) was in the market for a horse for her daughter (D) for use in jumping competitions at the highest international level, including qualification for the 2012 Olympic Games in London. To help select a suitable horse, B enlisted advisor (A) who contacted Danish seller (S), a horse-trader who sometimes also operated as an agent for potential buyers. Having located some 6-8 Danish warmbloods for sale, S took D and A to various stables where they could be considered and test-jumped. The two she liked best were named Cator and Ferrari. Cator was a 9-year old gelding with a competitive record comprising at least 9 high-level events. D test-rode Cator on November 8th and 9th and found him to be a good jumper. D then engaged a Canadian veterinarian (V-1) to examine him at an animal hospital in Denmark. V-1 summarized his results as follows:
“Risk is defined as the likelihood or probability that illness, physical limitation or unsoundness is present at the time of the examination and likely to affect the horse in its intended use at this time or in the immediate future. [...] There was no major health or soundness issue identified on this examination which suggests a high degree of risk. Most of the abnormalities of concern are associated with the right front limb. Each one of these findings is fairly minor on its own, but because there are several findings associated with a particular area they have an additive effect in increasing the perceived level of risk. The horse exhibited a slight positive flexion test on the right fore and showed a very slight degree of intermittent right front limb lameness when circling to the left. He also has a very mild radiographic variation in the right front coffin bone. These findings suggest an increased level of risk for right front foot lameness. However, there is no major evidence of weakness or pathology in this area.”
One week after V-1 submitted his report, S sold Cator to B for 550,000 euros, then roughly equivalent to 4 million Danish kroner. Cator was delivered to B in Denmark on December 9th 2009 and then flown to Miami, Florida. On January 2nd 2010, D advised S that Cator, who had begun to limp, could no longer be ridden. On January 5th Cator was examined by veterinarian (V-2) who observed a presumably pre-existing injury to Cator’s right front leg. On September 10, 2010, following the parties’ failure to agree on an amicable solution proposed by S (the exchange of Cator for a different horse), B filed a lawsuit against S in Denmark, seeking avoidance of the contract and damages.
In order to obtain an impartial evaluation of Cator’s condition at the time of contracting, the Danish court arranged for the issuance of yet another expert veterinary opinion, this time by V-3. In his report V-3 found it likely that Cator at the time of delivery suffered from one or more disorders in his right front leg and that he was predisposed for an orthopaedic disorder; V-3 also found it highly likely that these disorders were connected to the findings V-1 made prior to the conclusion of the contract of sale. During the trial, S testified he had not read V-1’s report prior to the conclusion of the contract. S conceded that he would not normally buy a horse with that description, but he observed that many riders become less risk-averse as the date for the Olympics draws near.
Having considered these facts and testimony, the City court rendered a unanimous (3-0) decision in favour of B.
As regards the issue of whether the transaction was within the CISG Scope, the court considered the purpose for which Cator was bought and the fact that D’s only occupation was riding, competing, and dealing with horses, although her income from these activities was limited. On this basis the court held that the sale was not a “consumer sale” by reason of CISG Article 2(a) and that the contract was therefore governed — not by Danish domestic sales law, but — by the CISG.
As regards the non-conformity issue, the court held that Cator at the time of delivery was, at the very least, predisposed to develop one or more of the disorders observed shortly after his delivery and which rendered him useless as a jumper. For this reason and since B had purchased Cator for use as a jumper at the highest competitive level, the court held that Cator at the time of delivery did not conform to the contract of sale.
The court then proceeded to determine the CISG remedies to which B might be entitled, the first question being whether she was entitled to any remedial relief by reason of seller’s breach (non-conformity). In this connection the court noted that under Article 35(3) the seller is not liable for non-conformity if the buyer at the time of the conclusion of the contract knew or could not have been unaware of such non-conformity.
The court continued (in near-literal English translation) as follows:
“In consideration of the evidence the court finds that, prior to the conclusion of the contract, the buyer was informed that Cator had never been lame, had never received injections, and that he had been used continuously, and without pause attributable to his condition, as a jumper in high level competition. The court further finds that [V-1] during his examination of Cator observed a mild degree of sensitivity, together with mild stiffness or intermittent lameness in the right front leg, whereas he — also in consideration of Cator’s positive history — did not opine that these findings were serious or gave occasion to additional tests, in that he assessed the risk level in such a sale as being between low and medium. Lastly, the court-appointed expert [V-3] — both in his report and his testimony — stated that [V-1] ought to have conducted additional tests and also observed Cator over a period of time before he had a sufficient basis for determining whether Cator was fit for use as a jumper in high-level competition. In addition [V-3] stated that the observations made by [V-1] were compatible both with a conclusion that the findings were insignificant, as well as with a conclusion that that the findings were serious.
In light of the above-described facts the court is not in a position to declare that [B] knew or could not have been unaware of Cator’s disorders or predisposition for those disorders, nor that [B] had exhibited such a degree of negligence that she by virtue of CISG Article 35(3) is precluded from remedial relief for non-conformity.
In consideration of the fact that Cator was purchased for use as a jumper at the international level and that Cator is not fit for this purpose and is of no value as a jumper, the court holds that B by virtue of CISG Article 49(1) is entitled to avoid the sale. Her claim that S, upon return of the horse, shall return the purchase price of 550,000 euros is therefore accepted by the court.
Original in Danish:
- Not yet available}}
Case law on UNCITRAL texts (http://www.uncitral.org/uncitral/en/case_law.html)