Data
- Date:
- 23-03-2016
- Country:
- Netherlands
- Number:
- C/08/158118 / HA ZA 14-330
- Court:
- Rechtbank Overijssel
- Parties:
- --
Keywords
INCLUSION OF STANDARD TERMS IN THE CONTRACT – MATTER GOVERNED BUT NOT EXPRESSLY SETTLED BY CISG (ART. 7 (2) CISG) – REFERENCE TO CISG-A.C. OPINION NO. 13
INCLUSION OF STANDARD TERMS IN THE CONTRACT - REFERENCE TO PRACTICES ESTABLISHED BETWEEN PARTIES (ART. 9(1) CISG)
BUYER'S RIGHT TO SUSPEND PERFORMANCE (ART. 71 CISG)
Abstract
[Abstract prepared by Jan Smits, National Correspondent, and Steven Debie]
A Belgian company, BVBA Food Ingredients Technologies (“the seller”), sold garlic powder to a Dutch company (“the buyer”), which used the powder in the production of ambient-stable ready-to-eat sauces. The parties had maintained a long-standing commercial relationship since 2008, however, after receiving several deliveries of garlic powder in 2013, the buyer withheld payment, alleging that the goods were defective and had caused production issues and economic loss. The seller sued the buyer in the Netherlands for the outstanding invoices and a contractual penalty, while the buyer filed a counterclaim for damages based on the alleged defects in the goods
delivered.
The Court confirmed that the CISG was applicable pursuant to article 1(1)(a), as both parties had their places of business in Contracting States. Noting article 7(2), the court stated that gaps in the CISG should be filled by the general principles on which the Convention is based, or failing that, in conformity with the law applicable by virtue of the rules of private international law, which in this case was Belgian law.
One of the key issues was whether the seller’s general terms and conditions formed part of the contract between the parties or not. These were printed on the reverse side of its invoices and referred to in every transaction. The court, relying on CISG Advisory Opinion No. 13,1 concluded that the parties’ established practice meant the buyer had consented to their application, as these were consistently used in their long- standing commercial relationship.
The Court then examined the buyer’s argument that under Arts. 58 and 71 CISG it was entitled to suspend performance (i.e. withhold payment) due to defects. The court stated that the CISG allows for suspension until the buyer has inspected the goods (Art. 58) or if a future breach is anticipated (Art. 71). In this case, the court noted that the buyer did not argue that the inspection of the goods revealed any defects on the basis of which it was allowed to withhold payment, and that the buyer did not demonstrate that there was a future breach that was anticipated. The court held that
the buyer’s suspension of payment did not function as intended under the CISG, but that the buyer was seeking to suspend payment anticipating a set-off for claimed damages.
Regarding the buyer’s counterclaim for damages, the Court upheld the seller's exoneration clause from their general terms, which limited its liability to the replacement of defective goods without further damages. This clause was valid under Belgian law, and the Court consequently dismissed the buyer’s claim for damages and the set-off.
The Court then addressed the buyer’s defense that the goods were defective. Under Art. 35 CISG, the seller is required to deliver goods that are fit for their ordinary use and conform to the contract. Although liability for product quality was not excluded in the seller’s terms, the contract required any complaints about identity and quantity to be reported within five days. The Court found that the buyer had fulfilled its duty to inspect the goods for identity and quantity, and that this did not
extend to detecting all potential defects. Furthermore, the Court noted that defects discovered after delivery could still be addressed, and the five-day notice period could not dismiss such claims.
The buyer further alleged that the seller breached specific quality control agreements concluded in 2013 and supplied a different product without consent. The seller denied any deviation but acknowledged potential errors in meetings held in 2013. The court allowed the buyer to present further evidence to prove these breaches. The court noted that, if established, these breaches would affect the buyer’s obligation to pay the invoices.
Fulltext
Original in Dutch:
- available at www.rechtspraak.nl/}}
Source
CASE LAW ON UNCITRAL TEXTS (CLOUT) (http://www.uncitral.org/uncitral/en/case_law.html), A/CN.9/SER.C/ABSTRACTS/CISG/2268}}