Data

Date:
22-11-2011
Country:
Austria
Number:
4 Ob 159/11b
Court:
Oberster Gerichtshof
Parties:
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Keywords

GROUNDS FOR TERMINATION OF CONTRACT BY BUYER (ART. 49 CISG)

NON-PERFORMANCE CAUSED BY OTHER PARTY┬┤S CONDUCT - LOSS OF RIGHT TO REMEDIES (ART. 80 CISG)

Abstract

[CLOUT case no. 1519; abstract prepared by Martin Adensamer, National Correspondent]

The plaintiff, an Austrian company, ordered from the German seller video
equipment for a complete monitoring of its ice cream parlours. After the cameras
were installed by the seller and the buyer had paid the price, it turned out that the
system did not allow a complete monitoring. Following some exchange of
correspondence, the seller was willing to repair the installation but the buyer did not
allow the seller to enter the parlours and declared avoidance of the contract because
it had lost confidence in the seller. Reparation would have been possible, however
costly. The plaintiff claimed damages. Both the Regional Court and the Court of
Appeal dismissed the claim for damages. The Supreme Court endorsed the decision
of the Court of Appeal.

The Supreme Court considered whether the breach of contract can be fundamental
in the sense of Article 49(1)(a) CISG if it is still remediable. The court discussed
different opinions and finally adopted a compromising approach. To qualify a
breach of contract as fundamental so as to allow a declaration of avoidance of the
contract, all relevant circumstances of the case are to be considered objectively. In
order to find the required balance of interests, the kind and extend of the breach and
its consequences for the other party, any possibility for reparation or new delivery
within reasonable time, its costs and reasonableness for the buyer are to be taken
into consideration. In the present case, the circumstances of the case and the
balancing of interests resulted in the finding that the conditions to declare the
contract avoided were not met. The Supreme Court also considered that under
Article 80 CISG the party loses the right to declare the contract avoided where it
had rejected supplementary performance without reason, as it had happened in this
case.

Fulltext

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Source

Original in Austrian:
- available at the University of Basel website, www.globalsaleslaw.org}}