- Fujian High People's Court
BUYER'S OBLIGATION - PAYMENT OF PRICE (ART. 53 CISG)
SELLER'S RIGHT TO REQUIRE PAYMENT (ART. 62 CISG)
INTEREST - RIGHT TO INTEREST IN CASE OF LATE PAYMENT (ART. 78 CISG) - INTEREST RATE
A Chinese seller and a Hungarian buyer concluded a contract and a concurrent "pledge agreement" for the sale of silk sports shirts. The contract did not specify a date for delivery. About one month later the buyer's representative demanded, by fax, that the goods be delivered in time for the summer selling season and that a particular shipping line be used. The goods were shipped several weeks after the demanded ship date and were not received until well after the summer selling season had passed. Due to the delay of the goods' arrival, the parties renegotiated the date of payment and the price per piece. Upon receipt of the goods, the buyer complained as to their quality and the seller brought suit in Chinese Court.
The Chinese Court of First Instance (1995 Xia jing chu Xiamen - Intermediate People's Court Economic Chamber, First Instance - n. 30) held that the modified terms of the price and time of payment constituted a new contract governing the parties' agreement. As such, according to the Foreign Economic Contracts Law of the PRC, the buyer was to pay the seller the modified contract price for the goods, plus interest. The Court held that the buyer's demand that a particular shipping line be used was not agreed to by the seller, and therefore did not constitute a modification of the original contract.
On appeal, the Court of Second Instance held that the applicable law to this dispute was the CISG, and that the Foreign Economic Contracts Law of the PRC was incorrectly applied. The Court accepted the facts of the First Instance as true and upheld the judgment, instead applying Articles 1(1)(a), 53, 62, and 78 of the CISG.
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Published in Chinese:
- Zhongguo shenpan anli yaolan, University, Peking, Renmin daxue chubanshe, 1998, 371-375
Source and English translation: Dr. F. Münzel, Max Planck Institut für auslandisches- und internationals Privatrecht (Hamburg)
- 1995 Xia jing chu Xiamen Intermediate People's Court Economic Chamber First Instance n. 30}}