Case 1: CISG 1(1)(b); 35, 36, 78
Germany: Oberlandesgericht Frankfurt a.M.; 5 U 261/90
13 June 1991
Published in German: Recht der Internationalen Wirtschaft 1991, 591
Reproduced in German with brief summary in English and French: Uniform Law Review, 1991, I, 372
Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653
Commented on by Diederichsen: [1995] Journal of Law and Commerce, 177.

A sales contract between a French seller and a German buyer, concluded after the Convention's entry into force in France, was held to be governed by the Convention, since the parties had not chosen another law. It did not constitute an implied consent that the seller at first instance, in response to the buyer's statement that German law was applicable, had merely raised the question whether German or French law applied. Nor could the lack of an unequivocal response be treated as an admission since the applicable law is not a fact.

The buyer, who had alleged non-conformity of the goods without specifying in which respect, had to pay the purchase price with interest. As regards the rate of interest, the court referred to the widely prevailing view that the law of the country of the seller (the creditor) applied, but mentioned the opposite view according to which the debtor's law should apply. The court did not take a final stand on that controversy since in the case at hand the statutory rates of interest in both laws were identical (5%).

Case 2: CISG 1(1)(b); 3(1); 49(1)(a); 25
Germany: Oberlandesgericht Frankfurt a.M.; 5 U 164/90
17 September 1991
Published in German: Recht der Internationalen Wirtschaft 1991, 950
Reproduced in German with brief summary in English and French: Uniform Law Review, 1991, I, 382
Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653
Commented on by Magnus in Zeitschrift für Europäisches Privatrecht (ZEuP) 1993, 79
Commented on by Babiak in 6 Temple International and Comparative Law Journal, 124 (1992)
Commented on by Behr in 12 Journal of Law and Commerce, 271 (1993).

An Italian manufacturer had agreed to produce 130 pairs of shoes according to specifications given by a German buyer, to be used as a basis for further orders. At a trade fair, the manufacturer displayed some shoes produced according to these specifications and bearing a trade mark of which the buyer was the licensee. When the manufacturer refused to remove those shoes, the buyer advised the manufacturer by telex one day after the fair that the buyer discontinued the relationship and would not pay for the 130 sample shoes which were no longer of any value to the buyer.

The court applied CISG as the relevant Italian law pursuant to German private international law and considered the above agreement as a contract of sale according to article 3(1)CISG. It held that the buyer had timely and effectively declared the contract avoided; the manufacturer's breach of the ancillary duty of preserving exclusivity constituted a fundamental breach of the contract under article 25 CISG since it endangered the purpose of the contract to such a degree that, as was foreseeable to the manufacturer, the buyer had no more interest in the contract.

Case 3: CISG 1(1)(b); 39
Germany: Landgericht München I; 17 HKO 3726/89
3 July 1989
Published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1990, 316
Commented on by Reinhart, IPRax 1990, 289
Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

A German fashion retailer and an Italian clothing manufacturer concluded in 1988 a contract for the sale of various fashion goods. The buyer refused payment, alleging to have notified the seller within eight days after delivery (and twelve days after a second delivery) of "poor workmanship and improper fitting" of the goods.

Following German private international law, the court applied CISG as the law of Italy in force at the time of the conclusion of the contract. The court held that the buyer has lost the right to rely on non-conformity of the goods since the notifications, even if sent as alleged, did not specify precisely the defect in the goods.

Case 4: CISG 1(1)(b); 38; 39; 49;(1)(a); 74 Germany: Landgericht Stuttgart; 3 kfH O 97/89
31 August 1989
Published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1990, 317
Excerpts published in German in Recht der Internationalen Wirtschaft (RIW) 1989, 984
Commented on by Reinhart, IPRax 1990, 289
Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

A German shoe retailer ordered from an Italian seller 48 pairs of shoes of the same model and colour as delivered under an earlier order. Based on customer complaints concerning shoes of the earlier delivery, the buyer requested one week after its new order cancellation of that order. The seller shipped the second lot and the buyer examined only few samples without detecting any defect. 16 days later, the buyer notified the seller of customer complaints about imperfect sewing and measurements and loss of colour of the shoes. The seller demanded payment of the full sales price, including interest at bank loan rates.

Following German private international law, the court applied CISG as the relevant Italian law. Leaving open whether articles 38 and 39 of CISG applied or, by virtue of article 7(2) CISG, the time-period for giving notice under German domestic law became subsidiarily relevant, the court held that the buyer did not give notice within the required time. Having been forewarned by the complaints concerning the first delivery, the buyer should have examined carefully all shoes of the second contingent, in which case the buyer would have discovered the patent defects of the kind alleged later.

As regards the payment of interest, the court applied Italian law as the law of the creditor's country and since the purchase price was payable in Italian currency.

Case 5: CISG 1(1)(b); 8; 23; 29; 53; 58; 78

Germany: Landgericht Hamburg; 5 O 543/88

26 September 1990

Published in German: Praxis des Internationalen Privat- und

Verfahrensrechts (IPRax) 1991, 400

Reproduced in German: Europäische Zeitschrift für Wirtschaftsrecht (EuZQW) 1991, 188

Commented on by Reinhart, IPRax 1991, 376

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

Commented on by Magnus in Zeitschrift für Europäisches Privatrecht (ZEuP) 1993, 79

An Italian clothing manufacturer demanded payment of the purchase price plus interest from a German who, according to his account, had intended to order the textiles on behalf of a company X with limited liability but, according to the seller, had acted under a trade name referring to a non-existent company Y. After delivery of the goods, the German had given the seller a bill of exchange drawn on and accepted by company Y.

The court, following German international private law, applied CISG as the relevant Italian law for the formation of the contract and for the rights and obligations of the parties to the sales contract. It determined according to article 8 that the seller could not know that the German intended to bind company Y. Since, according to German law as the law applicable to the formation of a company in Germany, company X had not been validly established as a legal person, the German himself was the buyer. While, under Italian law, the giving of the bill of exchange did not free him from the payment obligation, it constituted a modification of the contract according to article 29(1) CISG to the effect that the due date for paying the purchase price was postponed until the maturity date of the bill of exchange. From that date on, interest was awarded under article 78 CISG at the statutory Italian rate plus additional interest as damages under article 74 CISG assessed on the basis of the Italian discount rate.

Case 6: CISG 1(1)(b); 25; 49; 78

Germany: Landgericht Frankfurt a.M.; 3/11 O 3/91

16 September 1991

Published in German: Recht der Internationalen Wirtschaft 1991, 952

Reproduced in German with brief summary in English and French: Uniform Law Review, 1991, I, 376

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

A German retailer ordered in September 1989 from an Italian manufacturer through a commercial agent 120 pairs of shoes "Esclusiva su B". After delivery in March 1990 and having resold 20 pairs, the buyer learned that identical shoes supplied by the Italian manufacturer were offered for sale by a competing retailer at a considerably lower price. Since attempts to enjoin the competing retailer failed, the buyer returned the unsold 100 pairs and cancelled the "order of March 1990" promising payment for the 20 pairs upon receipt of the credit.

The court, applying CISG as the relevant Italian law, held that a valid contract had been concluded at the latest at the time of delivery and that this contract had not been avoided under article 49 CISG. The cancellation of the "order of March 1990" was not an express declaration of avoidance of the order of September 1990 since it referred to another order. Even if a declaration of avoidance could be made impliedly (a point on which authors disagree), the buyer did not reject the entire contract as evidenced by the promise to pay for 20 pairs. Even assuming such rejection, the buyer was not entitled to avoid the contract for lack of a fundamental breach of the exclusive contract according to article 25 CISG. The manufacturer had no knowledge about the branches of its business partners, and any knowledge of the commercial agent could be imputed to the manufacturer only if the agent had acted as a closing agent.

The court refused reimbursement of fees incurred by the manufacturer in engaging an Italian collection agency since such engagement constitutes an appropriate measure of pursuit of right only if the collection agency can take steps superior to those that the creditor could take. No interest beyond the statutory rate was awarded and a set-off claim by the buyer based on loss of profit was rejected, both for lack of substantiation.

Case 7: CISG 1(1)(b); 47; 49; 74; 78

Germany: Amtsgericht Oldenburg in Holstein; 5 C 73/89

24 April 1990

Published in German: Praxis des Internationalen Privat- und

Verfahrensrechts (IPRax) 1991, 336

Commented on by Enderlein, IPRax 1991, 313

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

A German fashion retailer and an Italian clothing manufacturer concluded a contract for the sale of fashion goods, with the specification "autumn goods, to be delivered July, August, September +-". When a first delivery was attempted on 26 September, the buyer refused to accept the goods and returned the invoice on 2 October claiming expiry of the delivery period. The parties argued about the meaning of the above specification, relying on different additional factors allegedly known to both parties.

The court applied CISG as the law of the seller's country but took also into account German domestic law for filling gaps on questions of performance. The court awarded the seller the full sales price, including interest at the statutory rate in Italy plus additional interest as damages. The seller's claim was held to be justified since delivery was tendered during the agreed delivery period. Even if, as alleged by the buyer, during each of the three months one third of the goods had to be delivered, the buyer did not effectively avoid the contract by refusing acceptance of the goods without having fixed an additional period in the previous cases of non-delivery.

Case 8: CISG 99(3),(6); 100

Italy: Corte Suprema Di Cassazione; No. 5739

3 March 1988

Kretschmer GmbH & Co. KG V. Muratori Enzo

Original in Italian

Excerpts of judgement in: Rivista di diritto internazionale privato e processuale 1990, 155, reproduced in: Uniform Law Review II 1989, 857

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

An Italian exporter had concluded a contract for the sale of a cargo of fruit with a German importer. The court, noting that Italy's ratification of CISG according to article 99(6) had taken effect only after its denunciation of the 1964 Hague Convention relating to a Uniform Law on the International Sale of Goods, i.e. as from 1 January 1988, held that CISG did not apply in the case at hand since the contract had been concluded before that date.

Case 21: CISG 1(1)(a); 7(2); 9 (2)

Argentina: Juzgado Nacional de Primera Instancia en lo Commercial No. 7. Secretaría No. 14.

20 May 1991; judgement not final

"Elastar Sacifia S/ Concurso preventivo S/ Incidente de Impugnación por Bettcher Industries Inc."

Original in Spanish

Unpublished

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

A contract for the international sale of goods between a seller of the state of Ohio, United States of America, and an Argentine buyer was considered to be governed by CISG because both States had acceded to CISG, the sales contract had been concluded after CISG had entered into force (article 1(1)(a) CISG) and, according to the commercial invoice, the seller had its place of business in the state of Ohio. Questions not settled in the Convention are subject to the law of the seller, since in principle the sale is governed by the law of the domicile of the seller who is responsible for the performance characteristic of the contract, in accordance with the rules of international private law (article 7(2) CISG).

The seller has a right to interest on the price because this was expressly agreed and notwithstanding the fact that CISG contains no express provision recognizing payment of interest. It was considered that payment of interest was a widely known usage in international trade (article 9(2) CISG).

Case 22: CISG 100

Argentina: Cámara Nacional de Apelaciones en lo Comercial, Sala C (From the advice of the State Attorney assigned to the Court).

15 March 1991; judgement not final

"Qûilmes Combustibles S.A. v. Vigan S.A. S/ Ordinario"

Original in Spanish

Unpublished

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

In an action for late performance of a sales contract, which contained a jurisdiction clause, it was considered that CISG was not applicable. The contract had been concluded on a date preceding the entry into force of CISG (article 100 CISG).

Case 23: CISG 8(3); 18(1); 19(1)-(3)

United States: U.S. District Court for the Southern District of New York, 91 Civ. 3253 (CLB)

14 April 1992; appeal dismissed 19 January 1993

Filanto, S.p.A. v. Chilewich International Corp.

Published in English: 789 Federal Supplement 1229 (1992); 984 Federal Reports, 2d 58 (1993)

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

Commented on by Brand & Flechtner, 12 The Journal of Law & Commerce, 239 (1993)

Commented on by Jametti-Greiner in Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653

Commented on by Magnus in Zeitschrift für Europäisches Privatrecht (ZEuP) 1993, 79

Commented on by Perales Viscasillas in Derecho de los negocios, January 1995, 9 and by Del Duca and Del Duca in 27 Uniform Commercial Code Law Journal,331 (1995)

A New York enterprise agreed to sell shoes to a Russian enterprise pursuant to a master agreement that required disputes to be arbitrated in Moscow. To fulfill the agreement, the New York enterprise entered into multiple contracts with an Italian manufacturer. Pursuant to one purported contract the Italian manufacturer supplied shoes but the New York buyer made only partial payment. The Italian manufacturer sued in a New York court to recover the price. Alleging that the contract incorporated the Russian master agreement by reference, the New York buyer sought a stay of proceedings to permit arbitration.

The court construes article II(1) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards to determine whether the parties had agreed in writing to arbitrate. Concluding this is a federal law question, the court refers to contract principles embodied in CISG. It holds that the New York buyer's offer, which incorporated the Russian master agreement by reference, had been accepted by the Italian manufacturer's failure to respond promptly. Although under article 18(1) CISG silence is not usually acceptance, the court finds that under article 8(3) CISG the course of dealing between the parties created a duty on the part of the manufacturer to object promptly and that its delay in objecting constituted acceptance of the New York enterprise's offer.

Case 24: CISG 8(3)

United States: U.S. Court of Appeals for the Fifth Circuit

15 June 1993

Beijing Metals & Minerals Import/Export Corporation v. American Business Center, Inc., et. al.

Published in English: 993 Federal Reports 2d 1178 (1993); reproduced in 1993 U.S. App. Lexis 14211

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

Commented on by Flechtner: [1995] Journal of Law and Commerce, 153.

A Chinese manufacturer and a U.S. importer agreed to develop the North American market for the manufacturer's weight lifting equipment. Following a dispute, the parties concluded a modified payment agreement in writing. When the Chinese manufacturer sought to enforce the payment agreement, the U.S. importer raised defences under alleged contemporaneous oral agreements with respect to the manufacturer's supply obligations. The lower court excluded the testimony about oral agreements under the state's "parol evidence" rule.

The appellate court declines to resolve the dispute about whether CISG or state law applies to the parties' contract because it concludes that to do so would be unnecessary to its decision. Nevertheless, the court states expressly that the parol evidence rule "applies regardless" of whether CISG applies or not.

Case 25: CISG 1(b); 57(a)

France: Cour d' Appel de Grenoble, Chambre des Urgences

16 June 1993

Original in French

Unpublished

Commented on by Witz: Recht der Internationalen Wirtschaft (RIW) 1995, 310.

In the context of commercial relations providing for phased delivery of goods, a Spanish businessman bought construction materials from a French company. He thus received delivery, from January to June 1991, of certain materials at the principal place of business of the French company. Alleging that the materials were defective the buyer refused to pay their price and

was sued before the French interim relief court, which found that it did not have substantive and territorial jurisdiction.

Based on the provisions of article 5/1 of the EC Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters of 27 September 1968, the appellate court found in favour of the competence of the French court, since it was the court of the place of performance of the obligation of the buyer to pay.

The appellate court held that the contractual relationship of the parties constituted an international sale of goods and applied CISG as the relevant French law, in accordance with the French private international law. Applying article 57(1)(a) CISG the court determined that the price of the goods should have been paid at the place of business of the seller.

Case 26: CISG 1(1)(a); 53; 57(1); 78

International Chamber of Commerce, International Court of Arbitration

Arbitral award issued in 1992 in case no. 7153

Excerpts published in French: Journal de Droit International, 4, 1992, 1006

Commented on by Hascher in Journal de Droit International, 4, 1992, 1007

In the absence of an agreement of the parties on the law applicable, the arbitral tribunal found that CISG is applicable to the contract for the provision and installation of materials destined for the construction of a hotel.

CISG entered into force in Yugoslavia and Austria, the countries of the buyer and the seller respectively, before the conclusion of the contract. In addition, the contract falls within the scope of application of CISG, since it is clear from the text of the contract that the provision of services is secondary to the sale.

Consequently, if CISG applies, the buyer in default is obliged to pay the price and the interest for delay in payment. As CISG does not indicate the applicable interest rate, the arbitral tribunal applied the national law applicable in accordance with the rules of private international law, that is the law of the place of payment. Since the contract does not specify the place of payment, the tribunal applied article 57(1) CISG and designated the place of delivery of the goods as the place of payment.

Case 45: CISG 38(1); 39(1); 40

International Chamber of Commerce, International Court of Arbitration

Arbitral award issued in 1989 in case no. 5713

Excerpts published in Yearbook Commercial Arbitration, Vol. XV - 1990, 70

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

In a series of contracts for the sale of goods on f.o.b. terms, the buyer disputed, both prior to shipment and upon arrival, the conformity of goods covered under one of the contracts with certain contract specifications. The buyer treated the goods in order to make them more saleable and sold them at a loss. The seller demanded full payment and the buyer filed a counterclaim demanding compensation for direct losses, financing costs, lost profits and interest.

The arbitral tribunal held, pursuant to article 13 (3) of the 1975 ICC arbitration rules, which allows the tribunal in the absence of a choice of law by the parties to determine the applicable law by applying the private international law rule that it deems appropriate, that the contract was governed by the law of the country where the seller had his place of business. In addition, pursuant to article 13(5) of the ICC arbitration rules, the tribunal decided to take into account CISG as a source of prevailing trade usages. As the applicable provisions of the law of the country where the seller had his place of business appeared to deviate from the generally accepted trade usages reflected in CISG in that it imposed extremely short and specific time requirements in respect of the buyer giving notice to the seller in case of defects, the tribunal applied CISG.

The tribunal found that the buyer had complied with the requirements of CISG to examine the goods properly (art. 38(1) CISG) and to notify the seller accordingly (art. 39(1) CISG). It was held that, according to article 40 CISG, at any rate the seller would not be entitled to rely on non-compliance by the buyer with articles 38 and 39 of CISG for the reason that the seller knew or could not have been unaware of the non-conformity of the goods with contract specifications. The tribunal awarded the seller the full amount of its claim and set it off against part of the buyer's counterclaim.

Case 46: CISG 1(1); 50; 53; 59

Germany: Landgericht Aachen; 41 0 198/89

3 April 1989

Excerpts published in German: Recht der Internationalen Wirtschaft (RIW) 1990, 491

Referred to by Piltz in Neue Juristische Wochenschrift (NJW) 1994, 1101

The seller, an Italian shoe manufacturer, claimed the balance of amounts due from a contract concluded in 1989. The German buyer counterclaimed a price reduction for non-conformity of the goods with contract specifications.

The court found that the law of Italy was applicable under German private international law as the law of the country where the seller had its place of business, and applied CISG as part of Italian law in force at the time of the conclusion of the contract. It was held that the buyer could reduce the price of the goods in the same proportion as the value that the goods actually delivered had at the time of delivery bore to the value that conforming goods would have had at that time (art. 50 CISG).

Case 47: CISG 31 (b); 61 (1)(b); 63; 74-77

Germany: Landgericht Aachen; 43 0 136/92

14 May 1993

Excerpts published in German: Recht der Internationalen Wirtschaft (RIW) 1993, 760

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

Referred to by Piltz in Neue Juristische Wochenschrift (NJW) 1994, 1101

The German seller of ten electronic ear devices demanded damages for breach of contract by the Italian buyer, who had failed to take delivery despite the additional period of time set by the seller for the buyer to take delivery.

The court held that it had jurisdiction under article 5(1) of the Convention on jurisdiction and the enforcement of judgements in civil and commercial matters, which provides that a party who is domiciled in a Contracting State can be sued before the courts of the place where the obligation giving rise to the dispute had to be performed. The court applied article 31 (b) CISG, which was applicable under German private international law as part of German law, and determined that Aachen, where the goods had been manufactured, was the place where the seller was obliged to deliver (art. 31(b) CISG).

The court applied articles 61 (1)(b), 63 and 74-77 CISG and found that the buyer had to pay damages to the seller for failing to take delivery of the goods, even after the additional period of time set by the seller had expired.

Case 48: CISG 1(1)(b); 5(1) and (2); 38(1); 39; 45; 50; 51

Germany: Oberlandesgericht Düsseldorf; 17 U 82/93

8 January 1993

Excerpts published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1993, 412

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

Commented on by Magnus in Praxis des Internationalen Privat-und Verfahrensrechts (IPRax) 1993, 390 and in Zeitschrift für Europäisches Privatrecht (ZEuP) 1993, 79

The German buyer of fresh cucumbers appealed against the decision of the court of first instance, which ordered the German buyer to pay to the Turkish seller the balance of the price due under the contract. The court of first instance had dismissed the application of the buyer for a reduction of the price of the goods for non-conformity with contract specifications on the ground that the buyer had inspected the goods at the place of delivery in Turkey and had found them to be in good order.

The appellate court found that the parties, during the oral hearings before the court of first instance, had agreed to submit their dispute to German law and held that CISG was applicable as part of German law. The judgement of the court of first instance was upheld on the ground that the buyer lost the right to rely on non-conformity of goods and to reduce the price proportionally, since it gave notice of the non-conformity only when the goods arrived in Germany, i.e. seven days after the buyer had the opportunity to examine them at the place of delivery in Turkey

(art. 38, 39(1) and 50 CISG).

Case 49: CISG 7(2); 45; 57(1)(a); 74

Germany: Oberlandesgericht Düsseldorf; 17 U 73/93

2 July 1993

Excerpts published in German: Recht der Internationalen Wirtschaft (RIW) 1993, 845

The plaintiff, a German buyer of a knifecutting machine, demanded damages for personal injury caused by, and repair costs of, the machine, which the plaintiff had bought from the defendant, a manufacturer situated in Indiana, U.S.A., and installed in a Russian furniture factory. The court of first instance found in an interim judgement that it had jurisdiction. The defendant appealed.

The appellate court dismissed the appeal and found that the court of first instance had jurisdiction under the provisions of the German code of civil procedure granting jurisdiction to the court of the place where the disputed obligation, in the present case the obligation to payment of damages, was to be performed. In order to determine the place where damages were payable, the appellate court applied CISG as part of the law of Indiana, which was applicable under German private international law. The appellate court held that article 57(1)(a) CISG, providing that the purchase price is payable at the place of business of the seller, indicated a general principle that claims for payment of money, including damages for breach of contract arising under articles 45 and 74 CISG, were payable at the place of business of the claimant, who in the present case was the German buyer.

Case 50: CISG 35(2)(a); 45; 49(1); 51(1); 74

Germany: Landgericht Baden-Baden; 4 0 113/90

14 August 1991

Excerpts published in German: Recht der Internationalen Wirtschaft (RIW) 1992, 62

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

The plaintiff, an Italian tile manufacturer, demanded payment of the balance due under a contract with the defendant, a German company. The defendant counterclaimed damages on the ground that the goods initially ordered, as well as the replacement sent, were non-conforming with contract specifications. Under the contract, objections concerning non-conformity could not be submitted later than thirty days after delivery.

The court, applying CISG as part of Italian law applicable under German private international law, found that the plaintiff failed to deliver goods fit for the purpose for which goods of the same description would ordinarily be used and, as a result, the defendant was entitled to declare the contract partially avoided and to reduce the price (art. 35(2), 45, 49(1) and 51(1) CISG). While such a partial avoidance did not affect the defendant's right to claim damages

(art. 45(1)(b) CISG), it was held that the defendant had lost the right to claim damages since it failed to notify the plaintiff about the non-conformity of goods within the thirty-day-period after delivery set in the contract.

Case 51: CISG 45(1)(b); 73(1); 74

Germany: Amtsgericht Frankfurt 32 C 1074/90-41

31 January 1991

Excerpts published in German with comments by Jayme: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1991, 345

The plaintiff, an Italian manufacturer of shoes, demanded payment of the balance due under the contract with defendant, a German company. The contract provided for payment of 40% of the purchase price upon delivery and the balance within sixty days after delivery. The seller sent an invoice in September 1989 and shipped the goods in January 1989 but suspended delivery without notifying the buyer, who was forced to pay more that 40% of the purchase price upon delivery in order to obtain the goods.

The court held that the seller committed a breach of contract by suspending delivery without giving notice of the suspension to the buyer and set off the claim of the seller for the balance of the purchase price against the claim of the buyer for damages (art. 45(1)(b), 73(1) and 74 CISG).

Case 52: CISG 9(1); 53

Hungary: Municipal Court Budapest AZ 12.G.41.471/1991/21

24 March 1992

Adamfi Video Production GmbH v. Alkotók Studiósa Kisszövetkezet

Original in Hungarian

Unpublished

Summary published in Italian: Diritto del commercio internationale July-September 1993, 651

Commented on by Vida in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1993, 263

The plaintiff, a German company, demanded payment of the price and interest for goods sold and delivered to the defendant, a Hungarian company. At first, the defendant disputed the existence of a contract and the delivery of goods. However, the court found that delivery had taken place on the basis of documents obtained from the Hungarian Customs Authority and the forwarding agent had delivered the goods upon receipt signed by an employee of the defendant.

The court relied upon a sales contract that had previously been concluded between the parties, in order to determine the price of the goods and the other elements of the contract and ordered the defendant to pay (art. 9(1) and 53 CISG).

As to the obligation for payment of interest, which is not regulated by CISG, the court, on the basis of the Hungarian Act on Private International Law (paragraph 25 of Legal Decree No. 13 of 1973), applied German law as the law of the seat of the seller. In this context, on the basis of article 352 paragraph (1) of the German Code of Commerce (HGB), the Court awarded to the plaintiff interest at the rate of 5% on the amount due as of the day the obligation to pay the purchase price (determined in German currency) became due.

Case 53: CISG 14(1)

Hungary: Supreme Court Gf.I. 31.349/1992/9

25 September 1992

United Technologies International Inc. Pratt and Whitney Commercial Engine Business v. Magyar Légi Közlekedési Vállalat (Malév Hungarian Airlines)

Original in Hungarian

Unpublished

Summary published in Italian: Diritto del commercio internazionale July-September 1993, 651

Commented on by Magnus in Zeitschrift für Europäisches Privatrecht (ZEuP) 1993, 79

The plaintiff, an American manufacturer of aircraft engines, further to extensive negotiations with the defendant, a Hungarian manufacturer of Tupolev aircraft, made two alternative offers of different types of aircraft engines without quoting an exact price. The defendant chose a type of engine from the ones offered and placed an order. At issue was whether a valid contract was concluded. The court of first instance held that a valid contract had been concluded on the ground that the offer indicated the goods and made provision for determining the quantity and the price.

The Supreme Court found that the offer and the acceptance were vague and, as such, ineffective since they failed to explicitly or implicitly fix or make provision for determining the price of the engines ordered (art. 14(1) CISG). The Supreme Court considered that the acceptance was a mere expression of the intention of the defendant to conclude a contract for the purchase of the engines chosen and, as such, the acceptance could not operate as a counter-offer. The Supreme Court therefore overturned the decision of the court of first instance and held that there was no valid contract concluded.

Case 54: CISG 1(1)(a);1(1)(b); 4; 79

Italy: Tribunale Civile di Monza

14 January 1993

Nuova Fucinati S.p.A. v. Fondmetal International A.B.

Published in Italian: Giurisprudenza Italiana 1994, I, 146 and Il Foro Italiano 1994, I, 916

Commented on by Bonell in Giurisprudenza Italiana 1994, I, 145 and Di Paola in Il Foro Italiano 1994, I, 917

The plaintiff, an Italian seller who failed to deliver the goods to the defendant, a Swedish buyer, claimed avoidance of the sales contract on the ground of hardship ("eccessiva onerosità sopravvenuta") since the price of the goods had increased after conclusion of the contract and before delivery by almost 30%.

The court held that CISG was not applicable since at the time of the conclusion of the contract CISG was in force in Italy but not in Sweden (article 1(1)(a) CISG). The court also excluded the application of the Convention on the ground that the parties had chosen Italian law as the law governing their contract holding that article 1(1)(b) CISG operates only in the absence of a choice of law by the parties. In the court's opinion, even if CISG applied, the seller could not rely on hardship as a ground for avoidance, since CISG did not contemplate such a remedy in article 79 or elsewhere. A domestic court could not integrate into CISG provisions of domestic law recognizing a right of avoidance of the contract in case of hardship since hardship is not a matter expressly excluded in article 4 CISG from the scope of the Convention.

Case 55: CISG 1(1)(b); 78

Switzerland, Canton of Ticino: Pretore della giurisdizione di Locarno Campagna

15 December 1991

Excerpts published in German: Schweizerische Zeitschrift für internationales und europäisches Recht (SZIER) 1993, 665

Summaries published in German: Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653.

The plaintiff, a French seller, claimed the payment of the price of goods, which the defendant, a Swiss buyer, had failed to pay, plus interest at the rate of 6% from July 1990, the time of conclusion of the contract. The defendant acknowledged the debt in the course of the proceedings but argued that interest was payable only from August 1991, the time the defendant was notified of the plaintiff's refusal to accept a returned sample as payment.

Although the plaintiff invoked Swiss law, the court, applying article 118 of the Swiss Federal Act of Private International Law and article 3 of the Hague Convention on the Law Applicable to International Sales Contracts on Movables of 15 June 1955, held that CISG was applicable as the applicable French law. The court granted the plaintiff interest on the sum owed from the time of the conclusion of the contract since article 78 CISG did not refer to any formal or informal notice of default. In order to determine the interest rate, the court applied French law, since CISG does not provide for a specific interest rate, and granted interest at the rate of 6%, as requested by the plaintiff, on the ground that it was lower than the statutory interest rate under French law.

Case 56: 1(1)(b); 36(1); 38; 39; 50

Switzerland, Canton of Ticino: Pretore della giurisdizione di Locarno Campagna

27 April 1992

Excerpts published in German: Schweizerische Zeitschrift für internationales und europäisches Recht (SZIER) 1993, 665

Summaries published in German: Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653.

The plaintiff, an Italian wholesaler of furniture, claimed the purchase price, which the defendant, a Swiss retailer, refused to pay alleging lack of conformity of the goods.

The court, applying Swiss private international law, found that CISG was applicable as the law of Italy. It was held that as the defendant had resold some of the defective furniture without notifying the plaintiff in time about the resale, the defendant had lost its right to rely on non-conformity of the goods (art. 38 and 39 CISG). With regard to other goods, the defendant was granted a reduction of price, since it had promptly notified the plaintiff about the defects and the plaintiff had refused to remedy the defects (art. 50 CISG). The court rejected an offer made by the plaintiff during the proceedings to pay the repair cost, holding that article 50 CISG was not intended to provide for restitution of the repair cost but a reduction of the purchase price in the same proportion as the value that the goods actually delivered had at the time of delivery bore to the value that conforming goods would have had at that time.

Case 79: CISG 49(1); 78; 81(1)

Germany: Oberlandesgericht Frankfurt a.M.; 5 U 15/93

18 January 1994

Published in German: Recht der Internationalen Wirtschaft (RIW) 1994, 240

Commented on by Diedrich, RIW 1995, 11

The defendant, a German trading company, refused to pay the purchase price of shoes bought from the plaintiff, an Italian shoe manufacturer, on the grounds that the shoes were not delivered within the time limits prescribed in the contract and did not conform with the specifications of the contract.

The court held that the defendant was not entitled to declare the contract avoided and to refuse to pay the purchase price because it had not set a time limit within which the seller had to deliver and had failed to establish that a fundamental breach of contract was involved (articles 49(1) and 81 (1) CISG). The court noted that the defendant did not specify whether the shoes were just below standards (in which case the defendant could, e.g., reduce the price or claim damages), or totally unfit for resale (in which case the defendant could declare the contract avoided).

As a result, the court ordered the defendant to pay the purchase price and interest at the rate of 10%, which was the rate under Italian law, the law applicable under German private international law.

Case 80: CISG 57(1)(a); 58

Germany: Kammergericht Berlin; 2 U 7418/92

24 January 1994

Published in German: Recht der Internationalen Wirtschaft (RIW) 1994, 683

The plaintiff, the Italian assignee of the claim of the Italian seller for payment of the purchase price, sued the buyer, a German company, demanding payment. At issue was whether payment was due in German mark, as initially demanded by the seller, or in Italian lira, as agreed in the contract.

The court found that the CISG was applicable as the law of the country where the seller had its place of business. It was held that the application of the CISG could be excluded only if that was the actual and not the hypothetical intention of the parties. With regard to the validity of the assignment, the court applied other Italian law since the CISG did not address assignment.

The court held that, even if the parties had not agreed that payment should be made in Italian lira, the price would still be payable in Italian lira since the place of payment would be the place of business of the Italian seller (CISG 57(1)(a)). In addition, the court held that interest was payable from the time the purchase price became due, even if no notice was given (CISG 58).

Case 81: CISG 38; 39; 78

Germany: Oberlandesgericht Düsseldorf; 6 U 32/93

10 February 1994

Published in German: Recht der Internationalen Wirtschaft (RIW) 1995, 53

The defendant, a German buyer of textiles, refused to pay to the plaintiff, a French seller, the balance of the purchase price, on the grounds that the goods did not conform with the contract specifications. At issue was whether the defendant raised the objection of lack of conformity within a reasonable period of time. The fist instance court held in favour of the plaintiff.

The appellate court found that the contract had been concluded before the CISG entered into force for Germany and, applying German private international law rules, held that the CISG was applicable as part of the applicable law of France. On the merits of the case, the court found that the defendant had raised the objection of lack of conformity of the goods two months after delivery, while it could have discovered easily the defects and raised the objection within a few days after delivery, if it had conducted a random search. It was held that the defendant had lost its right to allege lack of conformity because it failed to raise it within a reasonable time.

The court of appeals held that interest was payable under article 78 CISG at the rate existing under other applicable French law. The case was remanded to the first instance court because of procedural errors.

Case 82: CISG 35(2)(b); 39; 45; 47(2); 49(1)(b); 51; 78; 82(1)

Germany: Oberlandesgericht Düsseldorf; 6 U 119/93

10 February 1994

Published in German: Recht der Internationalen Wirtschaft (RIW) 1994, 1050

The defendant, a German buyer, refused to pay the purchase price asserting that parts of the fabrics delivered by the plaintiff, an Italian seller of textiles, were of a colour different from that specified in the contract. The first instance court held in favour of the plaintiff.

The appellate court held that the fact that some of the textiles delivered were of a different colour did not amount to non-conformity with contract specifications, since the textiles were not unfit for the purpose for which they were bought (article 35(2)(b) CISG). The court held that such a delivery constituted partial non-performance, as a result of which the defendant was entitled to exercise the rights prescribed in articles 46 to 50 of the CISG (article 51 CISG). However, it was found that the defendant failed to fix an additional period of time of reasonable length for performance by the plaintiff, and consequently, it was held that the defendant could not exercise those rights (articles 39, 47(2) and 49(1)(b) CISG). The only right that the defendant had not lost as a result of its failure to fix an additional period of time for performance by the plaintiff was the right to demand payment of damages for breach of contract by the plaintiff (article 45 CISG). However, the court found that the defendant had not demanded such damages.

In addition, it was held that the defendant had lost the right to declare the contract avoided

on another ground, namely that the defendant had sold further the goods bought, thus having made restitution of the goods impossible (article 82(1) CISG).

The appellate court confirmed the decision of the court of first instance and ordered the defendant to pay the purchase price plus interest (article 78 CISG). In view of the fact that the CISG does not specify the interest rate, the court applied the statutory interest rate of 5% of the applicable German law chosen by the parties. The court noted that, if the parties had not chosen German law as applicable law and Italian law were to apply, the interest rate would still be the same.

Case 83: CISG 35; 45(1)(c); 49(2); 50; 78

Germany: Oberlandesgericht München; 7 U 4419/93

2 March 1994

Published in: Recht der Internationalen Wirtschaft (RIW) 1994, 595

The plaintiff, a Swedish seller of coke which was delivered to a company in the former Yugoslavia under instructions of the defendant, a German buyer, sued demanding payment of the purchase price. The defendant objected mainly relying on a complaint made by the Yugoslav company that the coke was of inferior quality.

The court held that the supply of goods of inferior quality did not constitute a fundamental breach of contract that could justify the avoidance of the contract and the refusal to pay. It was found that, in any event, the defendant would have lost the right to declare the contract avoided since the defendant claimed avoidance of the contract four months after delivery, which could not be considered as a reasonable time under article 49(2) CISG.

In addition, it was held that the defendant should have expressed its intention to reduce the price in order to be entitled to a reduction of the purchase price for lack of conformity of the goods (articles 35 and 50 CISG). Moreover, it was held that the defendant was not entitled to damages under article 45(1)(c), since it failed to establish that it suffered any damages and to offset those damages against the purchase price.

The court ordered the defendant to pay the purchase price plus interest (CISG 78). As the CISG does not set an interest rate, the court applied the statutory interest rate of 8% according to the applicable Swedish law.

Case 84: CISG 35(2); 49

Germany: Oberlandesgericht Frankfurt a.M.; 13 U 51/93

20 April 1994

Published in German: Recht der Internationalen Wirtschaft (RIW) 1994, 593

The plaintiff, a Swiss company, sold New Zealand mussels to the defendant, a German company. The defendant refused to pay because the mussels had been found by the Federal Health Office to be generally not safe because they contained a cadmium concentration in excess of the statutory limit of 0,5 mg/kg. The first instance court ordered the defendant to pay. The defendant

appealed.

The appellate court held that the supply of mussels with higher cadmium composition did not constitute a fundamental breach of contract justifying avoidance of the contract and a refusal of the buyer to pay the purchase price, since the statutory cadmium limit expressed an optimum situation of food items and was not a binding maximum limit. In addition, it was held that the high cadmium composition did not constitute lack of conformity of the mussels with contract specifications under CISG 35(2), since the mussels were still fit for eating.

Moreover, it was held that even if the defendant had established faulty packaging of the goods, as referred in the defendant's pleadings, the contract could not be avoided. In order to justify avoidance of the contract in these circumstances, faulty packaging must be a fundamental breach of contract; and such a breach must be easily detectable, which would enable the defendant to declare avoidance of the contract within a reasonable time after receiving delivery.

The appellate court ordered the defendant to pay the purchase price (CISG 78) and interest at the rate of 5%, which is the statutory interest rate under both German and Swiss law.

Case 85: CISG 1(1)(a); 74; 75; 77; 78

United States of America: U.S. District Court for the Northern District of New York

9 September 1994

Delchi Carrier, SpA v. Rotorex Corp.

Published in English: 1994 U.S. Dist. LEXIS 12820; and in 1994 WESTLAW 495787

The defendant, a Maryland manufacturer of compressors for air conditioners, agreed to sell 10800 compressors to the plaintiff, an Italian manufacturer of air conditioners. The sales contract provided for delivery in three shipments. The defendant made the first shipment. While the second shipment was en route, the plaintiff discovered that the compressors contained in the first shipment were nonconforming with contract specifications. The plaintiff rejected the second shipment, stored it at the port of delivery and, after having tried unsuccessfully to cure the defects, sued demanding damages for breach of contract pursuant to article 74 CISG.

The court held that the defendant breached the contract and granted the plaintiff damages to cover: (1) the plaintiff's expenses incurred when attempting to remedy the nonconformity in the compressors; (2) the sums paid by the plaintiff to expedite shipment of compressors from a third party in order to mitigate losses from orders that the plaintiff could not meet as a result of the defendant's breach of contract (article 77 CISG; the shipment of substitute compressors was not found to be covered under article 75 CISG - purchase of replacement goods by the buyer - because the compressors had been ordered prior to the breach of contract and thus could not have replaced the nonconforming compressors); (3) the plaintiff's costs for handling and storing the nonconforming compressors; and (4) the plaintiff's lost profits resulting from a diminished volume of sales, in respect of which the plaintiff was able to provide, in conformity with common law and the law of New York, "sufficient evidence [for the court] to estimate the amount of damages with reasonable certainty". The court rejected the plaintiff's claim for damages to cover expenses relating to the anticipated cost of production of air conditioners, holding that those costs were

accounted for in the claim for lost profits. Pursuant to article 78 CISG, the court held that the plaintiff was entitled to prejudgment interest; as the CISG does not specify an interest rate, the court applied the rate applicable for U.S. treasury bills.

Case 86: CISG 29(2)

United States of America: U.S. District Court for the Southern District of New York

22 September 1994

Graves Import Co. Ltd. and Italian Trading Company v. Chilewich Int'l Corp.

Published in English: 1994 U.S. Dist. LEXIS 13393; and in 1994 WESTLAW 519996

The plaintiffs were the agents of the defendant, a New York import-export company, in its dealings with an Italian manufacturer of footwear that were intended to be sold in Russia. The defendant refused to pay the plaintiffs' agency fees arguing that: the plaintiffs had breached their agency duties; and delivery of the shoes was a condition precedent to the payment of the agency fees. The defendant refused to accept delivery of a shipment of shoes sent from the Italian manufacturer arguing that the sales contract was orally modified to the effect that further deliveries would be subject to the Russian buyers paying for shoes previously delivered to them. The plaintiffs argued that their agency duties were limited to performing quality controls and that they had performed those duties. In addition, the plaintiffs rejected the existence of any condition precedent. Both the plaintiffs and the defendant applied for a summary judgement.

The court noted that in contract actions summary judgement was appropriate "when the contract terms are clear and not conducive to more than one reasonable interpretation" and rejected both applications for a summary judgement finding that the content of the agency agreement between the defendant and the plaintiffs was disputed. In the course of discussion, the court noted that the contract between the defendant and the Italian manufacturer incorporated a provision making modifications invalid unless they were in the form of a writing signed by both parties. Citing article 29(2) CISG, the court found that the defendant was precluded from asserting that there had been an oral modification of that contract making further deliveries of shoes by the Italian manufacturer to the defendant subject to payment by the Russian end-buyers of the price of shoes previously delivered.

Case 90: CISG 49(1)(a); 78; 84(1)

Italy: Pretura circondariale di Parma, sez.di Fidenza; 77/89

24 November 1989

Foliopack Ag v. Daniplast S.p.A.

Original in Italian

Unpublished

Reported on in English: [1995] UNILEX (a case collection system on CISG, published in paper and electronic form by Transnational Juris Publications, Inc., Irvington-on-Hudson, New York, Copyright: Italian National Research Council-Centre for Comparative and Foreign Law Studies), D.89-7

The plaintiff, a Swiss buyer, placed an order with the defendent, an Italian seller. The order contained a request that the goods be delivered within the following 10 to 15 days. Almost two months later, the seller, after asking the buyer to confirm its order, specified the purchase price and assured the buyer that all the goods would be dispatched within a week. Two months later, the buyer had not yet received the goods. As a consequence, the buyer sent the seller a notice canceling the order and requiring refund of the price. The seller admitted that it had handed over the goods to the carrier only after receiving the notice of cancellation from the buyer, and that, moreover, the delivery was partial. The buyer refused to accept the late and partial delivery and, as the seller did not refund the purchase price, commenced legal action claiming avoidance of the contract for breach by the seller. The buyer also claimed a refund of the purchase price with interest and damages.

The court found that according to the statements and conduct of the parties the contract was to be considered concluded at the time the order was confirmed, and that the seller was bound to dispatch all the goods within the following week. It was held that the delay by the seller in delivering the goods, together with the fact that two months after the conclusion of the contract the seller had delivered only one third of the goods sold, amounted to a fundamental breach of the contract according to article 49(1)(a) CISG.

The court held that the buyer was entitled to avoid the contract and to recover the full purchase price already paid to the seller. Without referring to CISG, the court awarded the buyer interest on the price to be refunded at the Italian statutory interest rate. Contrary to what is provided in article 84(1) CISG with regard to time of accrual of interest, the court held that interest was payable from the date of avoidance of the contract. The court did not grant any further damages as there was no evidence of any further damage suffered by the buyer.

Case 91: CISG 31; 67

Italy: Corte Constituzionale; 465

19 November 1992

F.A.S. Italiana s.n.c. - Ti.Emme s.n.c. - Pres.Cons.Ministri (Avv.gen.Stato)

Published in Italian: Giurisprudenza Constitutionale, 1992, 6, 4191

Reported on in English: [1995] UNILEX, D.92-27

Before the Italian Constitutional Court the argument was made that article 1510 para. 2 of the Italian Civil Code, stating that the seller performs its obligation to deliver the goods by handing them over to the carrier and thereby implicitly placing the risk for the carriage on the buyer, was inconsistent with the principle of equality provided for by article 3 of the Italian Constitution. In fact, according to the general rule contained in article 1228 of the Italian Civil Code the carrier should be considered as the agent of the seller, who would be liable for the agent's acts.

The Constitutional Court rejected the argument, inter alia, on the ground that article 1510 para. 2 of the Italian Civil Code reflected a rule generally accepted at international level and in this respect express reference was made to articles 31 and 67 CISG.

Case 92: CISG 1(1)(b); 6

Ad hoc Arbitral Tribunal - Florence

19 April 1994

Società X v. Società Y

Excerpts published in Italian: Diritto del commercio internazionale 1994 (8.3-4), 861

Commented on by Cappuccio in Diritto del commercio internazionale 1994 (8.3-4), 867

Reported on in English: [1995] UNILEX, D.94-9

A contract concluded by an Italian seller and a Japanese buyer for the supply of leather and/or textile wear contained a clause under which the contract was to be "governed exclusively by Italian law".

By majority, the arbitral tribunal decided that CISG did not apply to the contract, either because Japan had not yet ratified CISG or because the contract itself had been made subject exclusively to Italian law. In the view of the tribunal, the choice of Italian law by the parties amounted to an implicit exclusion of CISG (art. 6 CISG).

One of the arbitrators, dissenting, held that CISG did apply since the choice of Italian law confirmed that the parties intended to apply CISG pursuant to article 1(1)(b) CISG and was not a declaration pursuant to art. 6 CISG.

Case 93: CISG 1(1)(b); 7(2); 53; 58; 61; 74; 78

Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien; SCH-4366

15 June 1994

Original in German

Unpublished

Reported on in English: [1995] UNILEX, D.94-12

Excerpts published in German: Recht der Internationalen Wirtschaft (RIW) 1995, 590. Commented on by Schlectriem in Recht der Internationalen Wirtschaft (RIW), 592.

Commented on by Veneziano: Rivista dell'Arbitrato, 1995, 3, 537

In 1990 and 1991, an Austrian seller and a German buyer concluded contracts for the sale of rolled metal sheets. The initial contracts provided that the goods were to be delivered "FOB Hamburg", by March 1991 at the latest. Later, the seller allowed the buyer to take delivery of the goods in installments. The buyer resold the goods and had to pay the price and the storage costs promptly after receiving each invoice. The buyer took delivery of some of the goods without paying, and refused to take delivery of other goods. Pursuant to an arbitration clause contained in the sales contract, the seller commenced arbitral proceedings, demanding payment of the price. In addition, the seller demanded damages, including those arising from a sale of the goods, which the buyer refused to accept, to a third party.

The sole arbitrator held that, since the parties had chosen Austrian law, the contracts were governed by CISG as the international sales law of Austria, a contracting State (art. 1(1)(b) CISG).

With regard to the goods delivered but not paid for, the arbitrator found that the seller was entitled to payment of their price (articles 53 and 61 CISG). Regarding the sale made by the seller in order to mitigate its losses, the arbitrator held that the seller had the right, and, presumably, the duty to mitigate its losses (art. 77 CISG). As a result, the seller was found to be entitled to the difference between the contract price and the substitute sale price.

The arbitrator further held that interest on the price accrued from the date payment was due (articles 78 and 58 CISG). Since the parties' agreement required the buyer to pay after receiving each invoice, interest accrued from the date of such receipt, which occured within 10 days after issuance of each invoice.

Moreover, the arbitrator held that, since the interest rate was a matter governed but not expressly settled by CISG, it should be settled in conformity with the general principles on which CISG is based (art. 7(2) CISG). Referring to Arts. 78 and 74 CISG, the arbitrator found that full compensation was one of the general principles underlying CISG. It was also found that in relations between merchants it was expected that the seller, due to the delayed payment, would resort to bank credit at the interest rate commonly practiced in its own country with respect to the currency of payment. Such currency may be either the currency of the seller's country, or any other foreign currency agreed upon by the parties. The arbitrator observed that the application of art. 7.4.9 of the UNIDROIT Principles of International Commercial Contracts would lead to the same result. The interest rate awarded was the average prime rate in the seller's country (Austria), with respect to the currencies of payment (US dollars and German marks).

Case 94: CISG 1(1)(b); 7(2); 16(2)(b); 29; 74; 78

Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien; SCH-4318

15 June 1994

Original in German

Unpublished

Reported on in English: [1995] UNILEX, D.94-11

An Austrian seller and a German buyer concluded a contract for the sale of rolled metal sheets. The goods were to be delivered in installments "FOB Rostock", specially packaged for export. Immediately after receiving the first two deliveries, the buyer sold the goods to a Belgian company which shipped them to a Portuguese manufacturer. The manufacturer found that the goods were defective and refused to accept the rest of them. The German buyer sent to the Austrian seller notice of non-conformity of the goods with contract specifications, but the seller refused to pay damages, alleging that the notice was not timely. The buyer commenced arbitral proceedings pursuant to an arbitration clause contained in its contract with the seller.

The sole arbitrator held that, since the parties had chosen Austrian law, the contract was governed by CISG as the international sales law of Austria, a contracting State (Art.1(1)(b) CISG).

It was found that the buyer had not complied with the particular requirements as to the examination of the goods and notice of non-conformity, which were contractually stipulated by the parties in derogation from articles 38 and 39 CISG. The buyer had sent to the seller written notice of the defects, together with an expert statement by an internationally recognized company, only six months after delivery, while, according to the contract, it should have done so immediately after delivery of the goods (or at the latest within two months after delivery).

With regard to the argument of the buyer that the seller had waived its right to raise the defense that notice of non-conformity was not timely given, the arbitrator held that the intention of a party to waive this right must be clearly established, which was not the case here. However, it was held that the seller was estopped from raising that defence, since the seller had behaved in such a way that the buyer was led to believe that the seller would not raise the defense (e.g., after receiving the notice the seller had continued to ask the buyer to provide information on the status of the complaints and had pursued negotiations with a view to reach a settlement. The arbitrator held that, while estoppel was not expressly settled by CISG, it formed a general principle underlying CISG ("venire contra factum proprium"; articles 7(2)), 16(2)(b) and 29(2) CISG).

The arbitrator awarded damages to the buyer for lack of conformity of the goods. With regard to interest, the arbitrator awarded interest at the average prime rate in the buyer's country (Germany) with respect to the currency of payment (US Dollars), giving the same reasons mentioned in case 93.

Case 95: CISG 1(1)(b); 3(1); 9(1) and (2); 11; 78; 100(1)

Switzerland: Civil Court of Basel-Stadt; P4 1991/238

21 December 1992

Unpublished

Original in German

Summarized in German: Schweizerische Zeitschrift für internationales und europäisches Recht 2/1995

The Austrian seller sued the Swiss buyer for the purchase price of fibre. In support of its suit, the seller argued that a sales contract had been concluded between the parties on the basis of an order sent by the Swiss buyer and a written confirmation sent by the seller.

The court found that the letter of confirmation sent by the seller and the subsequent omission of any reaction by the buyer reflected a usage as to the formation of contracts in the sense of article 9(1) CISG; that the parties had impliedly made that usage applicable to their contract since they knew or ought to have known the binding nature of such confirmations under both Austrian and Swiss law; and that there was no evidence of any other particular rules or usages prevailing in the trade of fibre. Furthermore, the court found that the exchange of confirmations was consistent with the practice which the parties had established between themselves and which was binding pursuant to article 9(2) CISG.

The court ordered the buyer to pay the purchase price with interest at the rate of 9%, i.e. the rate set out in the general terms of the letter of confirmation, which was found to be consistent with the applicable Austrian law, even though it was 3,5% higher than the Austrian discount rate.

Case 96: CISG 87

Switzerland: Cantonal Court of Vaud; 01 93 1308

17 May 1994

Unpublished

Original in French

Summarized in German: Schweizerische Zeitschrift für internationales und europäisches Recht 2/1995

The Swiss buyer of industrial machinery applied for a provisional measure requesting the German seller to deposit in the warehouse of a third party a device retained by the seller in its premises, which was necessary for the operation of the machinery delivered but not fully paid for. The seller invoked, inter alia, article 87 CISG, arguing that the buyer should bear the cost of the deposit of the device in a warehouse.

The court found that CISG was applicable. However, it held that, as long as its order was in accordance with cantonal rules of procedure, it was not bound by CISG on the matter of the expenses of the deposit, since that was a procedural matter and the Convention applied only to substantive law matters.

Case 97: CISG 1(1)(a); 3(1); 7(2); 38; 39; 78

Switzerland: Commercial Court of the Canton of Zurich; HG930138. U/HG93

9 September 1993

Unpublished

Original in German

Summarized in German: Schweizerische Zeitschrift für internationales und europäisches Recht 2/1995

The Italian seller of furniture sued the Swiss buyer for payment of the purchase price. The buyer had claimed that the furniture was defective, but neither accepted the seller's offer to remedy any defects nor paid the purchase price.

It was found that CISG was applicable since the parties had their places of business in different contracting States (art. 1(1)(a) CISG) and a contract for the supply of goods to be manufactured or produced, which amounted to a sales contract, was involved (art. 3(1) CISG).

The court held that it was implicit in the Convention that the buyer had to prove the existence of defects and that it gave notice of lack of conformity within a reasonable time

(articles 7(2), 38 and 39 CISG). In view of the court's finding that the buyer had failed to meet its burden of proof, it was held that, even if the buyer ever had the right to rely on lack of conformity of the goods, the buyer had lost that right. The court ordered the buyer to pay the purchase price with interest at the statutory interest rate of the applicable Italian law

(art. 78 CISG).

Case 98: CISG 1(1)(b); 38-40

Netherlands: Rechtbank Roermond; 900336

19 December 1991

Fallini Stefano & Co. S.N.C. (Italy) v. Fordic B.V. (Netherlands)

Excerpts published in Dutch: Nederlands Internationaal Privaatrecht (NIPR) 1992, 394

Reported on in English: [1995] UNILEX, D.91-14

(Abstract prepared by M. Sumampouw, Asser Institute)

The plaintiff, an Italian seller, sued demanding payment of the price of cheese sold and delivered to the defendant, a Dutch buyer. The defendant counterclaimed damages and reduction of the price on the ground of non-conformity of the goods with contract specifications.

Applying Dutch private international law, the court found that CISG was applicable as the law of Italy, i.e. the country where the seller had its place of business at the time of the conclusion of the contract (art. 1(1)(b) CISG). The court held that the reasonableness or the time of giving notice depended on the nature of the goods involved. In this case, the court found that the buyer had notified the seller of the non-conformity of the cheese shortly after delivery, which in the view of the court was a reasonable time in view of the fact that cheese is a perishable item (articles 38 and 39 CISG).

The court further found: that the buyer did not notify the seller about the nature of the defect, i.e. that the cheese was infested; and that the fact that the cheese was frozen and not described in the contract was not sufficient reason for not examining it. It was held that, in order for the seller not to be able to rely on articles 38 and 39 CISG, the buyer had to prove its allegation that the seller knew or could not have been unaware that the cheese was infested already at the time it was frozen (art. 40 CISG). The court observed that, if the buyer were able to meet that burden of proof, it would be entitled to a reduction of the purchase price pursuant to article

50 CISG.

Case 99: CISG 1(1)(b); 78; 100

Netherlands: Rechtbank Arnhem; 1992/182

25 February 1993

P.T. van den Heuvel (Netherlands) v. Santini Maglificio Sportivo di Santini P & C S.A.S. (Italy)

Excerpts published in Dutch: Nederlands Internationaal Privaatrecht (NIPR) 1993, 445

Reported on in English: [1995] UNILEX, D.93-6

(Abstract prepared by M. Sumampouw, Asser Institute)

The plaintiff, an Italian clothing manufacturer, demanded payment of the purchase price, plus interest, for clothes sold and delivered to the defendant, a Dutch retailer of fashion goods. The defendant sought to set off against the plaintiff's claim its claim for overcharging, for non-conformity of the goods with contract specifications and for damages due to breach of contract by the plaintiff.

The court found that, pursuant to Dutch private international law, CISG was applicable as the law of Italy at the time of the conclusion of the contract (articles 1(1)(b), 100 CISG). The court allowed set off in respect of the defendant's claim for overcharging and non-conformity on the ground that neither party had contested the invoices of the other party. However, with regard to the claim for damages, the court held that set off was not settled by the Convention and, applying Italian law, rejected it.

The court found that the defendant had defaulted in the payment of the purchase price, and ordered the defendant to pay the balance of the purchase price plus interest (78 CISG).

Case 100: CISG 1(1)(b); 78

Netherlands: Rechtbank Arnhem; 1992/1251

30 December 1993

Nieuwenhoven Viehandel GmbH (Germany) v. Diepeveen - Dirkson B.V. (Netherlands)

Excerpts published in Dutch: Nederlands Internationaal Privaatrecht (NIPR) 1994, 268

Reported on in English: [1995] UNILEX, D.93-26

(Abstract prepared by M. Sumampouw, Asser Institute)

The seller, a German company, sued the buyer, a Dutch company, demanding payment of the purchase price for a consignment of live lambs sold and delivered to the buyer, plus interest. The buyer argued that the contract was avoided on the ground that the lambs were not ready to be slaughtered.

The court found that CISG was applicable pursuant to Dutch private international law as the law of Germany in force at the time of the conclusion of the contract (art. 1(1)(b) CISG). With regard to the fact that the lambs were not ready for slaughter, the court found that this was irrelevant, since according to the contract only the weight of the lambs had to be measured and that was found to be in conformity with the contract. The court awarded the full purchase price to the seller plus interest. It was held that it was reasonable for the court to apply German law in order to determine the rate of interest, which was not settled in the CISG, since the parties had agreed for payment of the price in German currency and, in any event, German law was applicable pursuant to Dutch private international law (art. 78 CISG).

Case 102: CISG 75(1); 79(1); 100(2)

International Chamber of Commerce, International Court of Arbitration

Arbitral award issued in 1989, case no. 6281

Extracts published in French: Journal de Droit International, 1114; and in English: Yearbook of Commercial Arbitration, XV, 1990, 83 and Collection of ICC Arbitral Awards, Vol. II, 394

(Abstract prepared by S. Picard, ICC International Court of Arbitration)

The parties, of Egyptian and Yugoslav nationality, concluded a contract for the FOB sale of a certain quantity of steel. In conformity with the contract, the buyer announced that it wished to exercise its right to buy an additional quantity of steel at the price and on the conditions stipulated in the contract. The dispute arose from the seller's refusal to deliver the additional quantity of steel at the contract price, since the market price had gone up, as a result of which the buyer was forced to obtain the goods from another source at a higher price.

The tribunal found that, pursuant to article 100(2) CISG, the Convention was not applicable, since the contract was concluded before the Convention entered into force in the countries involved (including France, the place of arbitration), even though those countries were parties to the Convention at the time of issuance of the arbitral award. Applying the private international law rules of the countries concerned and article 3.1 of the Hague Convention of 15 June 1955 on the law applicable to international sales of goods, to which France is a party, the tribunal concluded that the applicable law was the law of Yugoslavia, as the law of the place where the seller had its principal place of business and where the contract was performed.

The tribunal compared the Yugoslav law with article 74.1 of the Uniform Law on the International Sale of Goods (ULIS) and with article 79(1) CISG and found that by refusing to deliver the additional goods at the contract price the seller had committed a breach of contract. The tribunal held that the seller could be relieved of the obligation to deliver the goods at the contract price only if the contract contained a price adjustment clause, or in case of frustration of the contract, which was not the case here, since the increase in the market price was, in fact, neither sudden nor substantial nor unforeseeable.

In order to determine the amount of compensation due to the buyer, the tribunal compared Yugoslav domestic law with articles 75 CISG and 85 ULIS and held that the buyer was entitled to the difference between the contract price and the price actually paid in order to obtain the goods from another source.

Case 103: CISG 1(1)(b); 35; 36; 78; 84

International Chamber of Commerce, International Court of Arbitration

Arbitral award issued in 1993, case no. 6653

Extracts published in French: Journal de Droit International, 1993, 1041

(Abstract prepared by S. Picard, ICC International Court of Arbitration)

The parties concluded a contract for the sale of goods. The buyer contested the conformity of the goods to the contract specifications.

The arbitral tribunal applied the CISG on the grounds that: the parties had chosen French law as applicable law and the Convention was in force in France at the time the contract was concluded; the contract concerned international trade interests because its performance assumed a movement of goods and payments across frontiers; and the goods concerned fell within the scope of application of the CISG. The tribunal also noted that the buyer was located in Syria, which was a party to the Convention at the time the contract was concluded and that the seller was located in Germany which became a party to the Convention after the time of the conclusion of the contract.

The tribunal considered the question of which party had the burden of establishing the lack of conformity, a question that was not addressed in the CISG, and found that, pursuant to article 1315 of the French Civil Code and general principles of international trade, the party invoking a lack of conformity should have to prove it.

The tribunal found that some of the goods did not conform to the contract and ordered reimbursement of the buyer for the sums paid for these goods. As the seller was regarded as having been very cooperative at the time the difficulties arose, the tribunal left to the seller the choice of either removing the non-conforming goods at its own expense or abandoning them on site.

The tribunal awarded the buyer interest, although it was found that article 84 CISG was somewhat ambiguous as to whether interest was payable if it had not been requested, in view of the fact that article 1153-1 of the French Civil Code prescribed it in any case. As CISG does not specify how the applicable interest rate is to be determined, the tribunal applied the rate commonly applied to Eurodollar settlements between operators in international trade, i.e., the one-year London Inter-Bank Offered Rate (LIBOR).

Case 104: CISG 1(1)(b); 7(2); 54; 61 (1)(a); 61(2); 62; 63(1); 64(2); 69; 77; 78; 79; 85 to 88

International Chamber of Commerce, International Court of Arbitration

Arbitral award published in 1993, case No. 7197

Extracts published in French Journal de Droit International, 1993, 1028

(Abstract prepared by S. Picard, ICC International Court of Arbitration)

The dispute concerned the failure of the Bulgarian buyer to pay the Austrian seller within the time period agreed in the sales contract.

The arbitral tribunal found that, while the parties did not specify any applicable law, the application of Austrian and Bulgarian rules of private international law led to the application of Austrian law. In view of the fact that CISG had been incorporated into the Austrian legal system, the tribunal decided to apply CISG, in accordance with article 1(1)(b) of the Convention. The tribunal also noted that, as the applicable rules of private international law led to the application of the law of Austria, where the seller had its place of business, it was immaterial that Bulgaria, where the buyer had its place of business, was not a party to the Convention at the time the contract was concluded.

The tribunal found that the buyer committed a breach of contract in that it failed to open the irrevocable and divisible letter of credit provided for in the contract, despite the additional period of time allowed by the seller (articles 54, 62 and 63(1) CISG). The tribunal also found that the seller was entitled to demand performance (article 64 CISG), without loosing its right to request compensation since no force majeure was involved (articles 61(1)(a), 61(2) and 79 CISG). The tribunal, applying Austrian law pursuant to article 7(2) CISG, held that the exercise of the seller's right to demand compensation was not contrary to the penalty clause contained in the contract.

The tribunal awarded the seller interest on the amount due (article 78 CISG). As the Convention does not specify the interest rate, the tribunal determined the interest rate in accordance with the substantive law applicable to the relationship between creditors and debtors (article 7(2)). The tribunal held that the interest rate to be awarded may be higher than the legal rate since the entitlement to interest under article 78 CISG was independent of any claim for damages under article 74 CISG. In the case in question, the tribunal found that the seller operated on the basis of credit for which it had to pay interest at the rate of 12% and applied that rate since the seller would have to obtain credit in order to replace the funds missing due to the non-payment by the buyer.

Case 105: CISG 3(1) and (2)

Austria: Supreme Court; 8 Ob 509/93

27 October 1994

Published in German: Zeitschrift für Rechtsvergleichung 1995, 159

An Austrian company ordered brushes and brooms in the former Yugoslavia. Under the contract, the Austrian company had to provide the Yugoslav company with materials for the production of the goods ordered.

The court found that the Convention was not applicable because the party ordering the goods supplied a substantial part of the materials necessary for the production of the goods (article 3(1) CISG) and the obligation of the party furnishing the goods consisted mainly in the supply of labour and services (article 3(2) CISG).

Case 106: CISG 1(1)(a); 14; 8(2) and (3); 55; 57(1)

Austria: Supreme Court; 2 Ob 547/93

10 November 1994

Published in German: Zeitschrift für Rechtsvergleichung 1995, 79

The Austrian buyer ordered in Germany a large quantity of chincilla pelts of middle or better quality at a price between 35 and 65 German Marks per piece. The German seller delivered 249 pelts. The Austrian buyer, without opening the packaged goods, sold them further to an Italian pelt dealer at the same price. The Italian dealer returned 13 pelts arguing that they were of inferior quality to that agreed. The Austrian buyer sent to the German seller an inventory list setting out the rejected pelts and refused to pay their price arguing that it had sold the pelts further on behalf of the German seller as its agent.

The first instance court ordered the Austrian buyer to pay the price of the rejected pelts, since the pelts were as specified in the contract. Having found that pelts of middle quality were sold in the market at a price up to 60 German Marks, the court considered that a price of 50 German Marks per pelt was a reasonable one.

The Court of Appeal confirmed that decision. It found that CISG was applicable since the parties had their places of business in States parties to the Convention and the subject matter of the dispute fell within the scope of application of the Convention. The Court of Appeal further found that a valid contract had been concluded on the basis of the order, which was sufficiently definite both as to the quantity and the quality of the goods.

The Court of Appeal further found that the agreement as to the price range (35 to 65 German Marks) did not preclude the valid conclusion of a contract since under article 55 of the Convention, if the price is not explicit or implicit in the contract, the parties are considered to have agreed on the usual market price. The Court of Appeal noted that the price of 50 German Marks per pelt, which had been established by the court of first instance based on the market price, had not been questioned by the parties. As to the currency of payment, the court found that payment was due in German Marks, since payment should be made at the place of business of the German seller (article 57 CISG).

The Supreme Court confirmed the decision of the Court of Appeal. It found that the Convention was applicable since an international sales contract in the sense of article 1(1)(a) CISG was involved. It also found that the order was sufficiently definite to constitute an offer under article 14 CISG, since it could be perceived as such by a reasonable person in the same circumstances as the seller (article 8(2) and (3) CISG). In determining that the order was sufficiently definite, the Supreme Court took into consideration the behaviour of the Austrian buyer who accepted the delivered goods and sold them further without questioning their price, quality or quantity. In particular, the price was found to be sufficiently definite, so as to make the application of article 55 CISG unnecessary. As to the place of payment, the Supreme Court found that it was the place of business of the seller since the goods were sent by post and no third party had been appointed to receive payment in Austria on behalf of the German seller.

Case 107: CISG 35; 49

Austria: Court of Appeal Innsbruck; 4 R 161/94

1 July 1994

Unpublished

The plaintiff, a Danish exporter of flowers, sold several shipments of garden flowers to the Austrian defendant, who refused to pay the price for some of them arguing that the seller had breached a guarantee or committed a fundamental breach of the contract since the flowers did not bloom through the entire summer.

The court of first instance dismissed the buyer's arguments on the ground that it had failed to prove that the seller had guaranteed that the flowers would bloom through the entire summer, or that the seller had committed a fundamental breach of contract because the flowers were not conforming with contract specifications (articles 36 and 49(1)(a) CISG). The court further held that, even if the buyer had been able to establish lack of conformity of the goods, it would have lost its right to avoid the contract, since it had failed to give the seller notice within a reasonable period of time after discovery of the defect (article 39(1) CISG; which, the court found, was similar to article 377 of the Austrian Commercial Code). The court held that two months after delivery of the goods was a reasonable period of time within which the buyer should have, and in fact had, discovered the lack of conformity of the goods.

The Court of Appeal confirmed the decision of the court of first instance on the ground that the buyer had failed to establish that the seller had breached a guarantee or committed a fundamental breach of contract in supplying flowers non-conforming with contract specifications (articles 25, 35 and 49(1)(a) CISG).

Case 120: CISG 1(1)(b); 18; 29; 38; 39; 47; 49
Germany: Oberlandesgericht Köln; 29 U 202/93
22 February 1994
Published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1995, 393; Recht der Internationalen Wirtschaft (RIW) 1994, 972.
Commented on by Reinhart in IPRax 1995, 365

The German plaintiff was the assignee of the Nigerian seller, who sold and delivered rare wood to the German defendant. The defendant refused to pay the purchase price alleging that the delivered wood was of inferior quality; the plaintiff, in turn, declared that it would market the wood. The court of first instance ordered the defendant to pay the purchase price. The defendant appealed.

The Court of Appeal, applying the CISG as part of the relevant German law chosen by the parties as applicable law, held that the defendant had lost the right to declare the contract avoided under article 49 (1)(b) CISG, since it had failed to fix an additional period of time for performance by the plaintiff (article 47 CISG). However, the Court of Appeal found that the parties had mutually agreed to terminate the contract, which is expressly allowed by article 29 CISG, and that the mutual agreement to terminate the contract is governed by the same rules as the conclusion of the contract.

Noting that pursuant to article 18 CISG mere silence does not in itself amount to acceptance of an offer, the Court of Appeal found that, under certain circumstances, silence could be interpreted as a declaration of acceptance. In the case in question the seller had examined the wood delivered and had offered to take back the wood in order to market it. The buyer neither refused this offer nor claimed damages or replacement of the defective wood. The Court of Appeal held that the buyer thereby accepted the offer to terminate the contract of sale. The Court of Appeal therefore reversed the decision of the court of first instance and dismissed the suit for payment.

Case 121: CISG 1(1)(a); 14(1); 19(1)
Germany: Oberlandesgericht Frankfurt; 10 U 80/93
4 March 1994
Published in German: OLG Report (OLGR), 1994, 85

The Swedish plaintiff asked the German defendant to make an offer for special screws of a certain quality. The defendant filled in the prices and delivery periods and sent the letter back. The plaintiff then ordered 3,400 pieces of the named screws as well as 290 pieces of other articles not mentioned before. The defendant confirmed the order but requested payment in advance or a letter of credit. The plaintiff, in turn, asked for a pro-forma invoice. The defendant sent an invoice which listed articles of lower quality with their respective prices. The plaintiff objected immediately and demanded delivery of the articles in the "ordered" quality. The defendant proposed delivery of higher-quality articles for a higher price, but the plaintiff insisted on delivery of the higher-quality items for the price listed in the invoice.

The court found that the CISG was applicable as both parties had their place of business in States parties to the CISG (article 1(1)(a) CISG). The court noted that, pursuant to article 19(1) CISG, a reply to an offer that contains terms at variance with the offer is a rejection of the offer and constitutes a counter-offer. Accordingly, the plaintiff's final order constituted a new offer. Yet, this new offer was not sufficiently definite in the sense of article 14(1) CISG, because the prices of some of the ordered articles were neither known nor determinable. Consequently, the court held the new offer could not lead to the effective conclusion of a contract as it did not comply with article 14(1) CISG.

Case 122: CISG 1 (1); 3 (1)
Germany: Oberlandesgericht Köln; 19 U 282/93
26 August 1994
Published in German: Recht der Internationalen Wirtschaft (RIW) 1994, 970

The plaintiff, a Swiss market research institute, had elaborated and delivered a market analysis, which had been ordered by the defendant, a German company. The defendant refused to pay the price alleging that the report did not comply with the conditions agreed upon by the parties.

The court held that the CISG was not applicable, since the underlying contract was neither a contract for the sale of goods (article 1(1) CISG) nor a contract for the production of goods (article 3(1) CISG). Noting that the sale of goods is characterized by the transfer of property in an object, the court found that, although a report is fixed on a piece of paper, the main concern of the parties is not the handing over of the paper but the transfer of the right to use the ideas written down on such paper. Therefore, the court held that the agreement to prepare a market analysis is not a sale of goods within the meaning of articles 1 or 3 CISG.

Case 123: CISG 35 (2); 49
Germany: Bundesgerichtshof; VIII ZR 159/94
8 March 1995
Published in German: Entscheidungen des Bundesgerichtshofs in Zivilsachen (BGHZ) 129, 75

Commented on by Daun in Neue Juristische Wochenschrift (NJW) 1996, 29; by Magnus in Lindenmaier/Möhring, Nachschlagewerk des Bundesgerichtshofs, CISG No. 2; by Piltz in Europäische Zeitschrift für Wirtschaftsrecht (EuZW) 1995, 450; by Schlechtriem in Entscheidungen zum Wirtschaftsrecht (EwiR) Art 35 CISG 1/95 and in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1996, 12; Commented on in French: Witz, Recueil Dalloz [1997] 27ème Cahier, Sommaires commentés, 217.

The German Supreme Court confirmed the decision of the Oberlandesgericht Frankfurt a.M. (see CLOUT Case No. 84). It held that a Swiss seller, who delivered to the German buyer New Zealand mussels containing a cadmium concentration exceeding the limit recommended by the German health authority, was not in breach of contract. The cadmium concentration itself constituted, in the court's opinion, no lack of conformity since the mussels were still eatable. Furthermore, the Supreme Court held that article 35 (2)(a) and (b) CISG does not place an obligation on the seller to supply goods, which conform to all statutory or other public provisions in force in the import State, unless the same provisions exist in the export State as well, or the buyer informed the seller about such provisions relying on the seller's expert knowledge, or the seller had knowledge of the provisions due to special circumstances.

The Supreme Court further held that the defendant had lost the right to rely on the lack of conformity and to declare the contract avoided in the ground of faulty packaging, since the defendant had waited more than a month before it notified the plaintiff about the non-conformity and thus had not acted within the reasonable time required by article 39 (1) CISG. According to the court, in this case one month after delivery would be a "generous" period of time but obviously acceptable as "reasonable time" for the purpose of notification.

Case 124: CISG 72; 49
Germany: Bundesgerichtshof; VIII ZR 18/94
15 February 1995
Published in German: Recht der Internationalen Wirtschaft (RIW) 1995, 505
Commented on by Schlechtriem in Entscheidungen zum Wirtschaftsrecht (EwiR) Art. 49 CISG 1/95; Schmidt-Kessel in RIW 1996, 60; and Enderlein in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1996, 182

The German plaintiff sold to the Swiss defendant a key stamping machine, which was manufactured by a German third party. The price had to be paid in three instalments. The parties agreed that the seller would retain title to the machine until payment of the last instalment. The manufacturer of the key stamping machine imposed a delivery stop upon the plaintiff. In October 1991, the manufacturer delivered the machine directly to the defendant. The defendant refused to pay the remaining two instalments to the plaintiff asserting that the plaintiff would not be able to transfer the property of the key stamping machine, since the plaintiff could not obtain the property directly from the manufacturer because of the delivery stop.

The court of first instance ordered the defendant to pay the purchase price whereas the Court of Appeal decided in favour of the defendant. The plaintiff appealed to the Supreme Court.

The Supreme Court held that the defendant was not entitled to declare the contract avoided under article 72 CISG. The period of time within which the buyer could declare the contract avoided under article 72 CISG was the time prior to the date of performance. After the contract had been performed by the parties, neither party could declare the contract avoided under article 72 CISG. The defendant accepted the machine in October 1991 and had to pay the last instalment in November 1991. Therefore, both parties fixed the date of performance for November 1991. As a result, the defendant could no longer invoke article 72 CISG in March 1992.

Leaving the question undecided whether the behaviour of the plaintiff constituted a fundamental breach of contract, the court held that, in any event, the defendant had lost the right to avoid the contract under article 49 CISG, since the defendant had claimed avoidance of the contract five months after being informed of the delivery stop. This delay could not be considered as a reasonable time under article 49 (1)(b) CISG.

Thus, the Supreme Court reversed the decision of the Court of Appeal, restored the decision of the court of first instance and ordered the defendant to pay the purchase price.

Case 125: CISG 1(1)(b); 6; 46; 48
Germany: Oberlandesgericht Hamm; 11 U 1991/94
9 June 1995
Published in German: OLG Report (OLGR), 1995, 169-170

The plaintiff, an Italian manufacturer of doors and windows, concluded with the German defendant a contract for the sale of 19 windows. The windows were delivered to and installed by the defendant. Some of the delivered windows were found to be defective. The plaintiff agreed to replace the defective windows with new ones, which were subsequently installed by the defendant.

The defendant withheld payment of part of the price and argued that the outstanding balance was to be set off against the defendant's counter-claim for the costs incurred with the replacement of the defective windows.

The court found that the CISG was applicable to the contract, holding that the express reference made by the parties during the court proceedings to the German civil law amounted to a valid choice of law but not to an exclusion of the CISG, since the CISG is an essential part of German law (article 6 CISG).

As the CISG does not contain provisions on set-off, the court held that this question was to be decided in accordance with German law as the governing law chosen by the parties. According to article 387 of the German Civil Code, set-off presupposes the existence of a counter-claim. The existence of the defendant's counter-claim, however, had again to be determined according to the CISG. Although the CISG does not contain any explicit provision for reimbursement of replacement costs when the seller has delivered defective goods, the court interpreted article 48 (1) CISG to the effect that the seller had to bear the corresponding costs.

Furthermore, although the period of limitation of the applicable German statute of limitations had expired, the court noted that the defendant's counter-claim was not time-barred because article 478 of the German Civil Code allows set-off even after the limitation period if the buyer has given timely notice of the defects of the goods, which the buyer had done in this case. Accordingly, the court rejected the plaintiff's claim.

Case 126: CISG 1(1)(a); 3(2)
Hungary: Metropolitan Court
19 March 1996
Original in Hungarian
Unpublished

The contract between the Hungarian plaintiff and the Swiss defendant provided for the sale of instruments from the defendant to the plaintif. The contract also provided that the plaintiff would be the exclusive distributor of those instruments in Hungary.

The issue was whether the CISG applied to the exclusive distribution part of the contract as well. It was decided that the CISG is not applicable to exclusive distribution agreements.

Case 130: CISG 72; 74; 75; 77
Germany: Oberlandesgericht Düsseldorf; 17 U 146/93
14 January 1994
Unpublished

The defendant, a German company, ordered 140 pairs of winter shoes from the plaintiff, an Italian shoe manufacturer. After having manufactured the ordered shoes, the plaintiff demanded security for the sales price as the defendant still had other bills to settle with the plaintiff. The defendant, however, did neither pay nor furnish security. Therefore the plaintiff declared the contract avoided and resold the shoes to other retailers: only 21 pairs for the same price as agreed upon with the defendant, 109 pairs for a much lower price, 10 pairs remaining unsold.

The plaintiff demanded compensation for various damages caused by the breach of the contract: (1) compensation for the difference between the contract price and the price in the substitute transactions, (2) the attorney's fees, (3) interest loss of 16,5%, (4) exchange rate loss of 15%, (5) and current interest of 16,5%. The defendant accepted responsibility in general but disputed the extent of damages which it attributed to the plaintiff's failure to resell the shoes in a reasonable manner.

The appellate court held that the plaintiff was entitled to avoid the contract according to article 72 CISG and consequently granted the plaintiff the rights listed in articles 74 and 75 CISG. Accordingly, the plaintiff was allowed to recover the difference between the contract price and the price in the substitute transactions (art. 75 CISG). In addition, the court found that the plaintiff had performed the resale in a reasonable time noting that the plaintiff was not obliged to resell the shoes before the date of avoidance. In the court's view, a resale nearly 2 months after avoidance (avoidance on 7 August, resale on 6 and 15 October) still succeeded within reasonable time and was no breach of the plaintiff's obligation under art. 77 CISG to mitigate the loss. In that regard, the court accepted the plaintiff's argument, who had offered the shoes on the Italian market, that in August most retailers have already filled their stock for the coming season and have no reason to buy more goods for the winter season.

The court also granted the interest loss according to article 74 CISG. The plaintiff argued that it had made use of a bank loan with an interest rate of 16,5%. The court accepted this allegation according to article 287 of the German Civil Procedure Code. However, the plaintiff's claim for attorney's fees was rejected. Although such fees in general could be recovered under article 74 CISG, in the present case this would lead to double compensation as the attorney had demanded his costs already in the special procedure for fixing costs.

The court also rejected the plaintiff's claim for damages to cover the exchange rate loss between the Italian Lira and the German Mark. The court found that there existed no general custom to exchange money paid in the local currency to a foreign one unless this was the claimant's usual practice. As this could not be established, it was held that the plaintiff had not suffered a damage.

Case 131: CISG 1; 14; 35 (2)(c); 39
Germany: Landgericht München I; 8 HKO 24667/93
8 February 1995
Unpublished

The German defendant ordered a computer programme from the French plaintiff. The programme was delivered and installed. The parties also intended to conclude a second contract concerning the use of the programme, but the negotiations on that contract failed. The defendant then refused to pay the purchase price of the programme, which was delivered and installed.

The court held that the CISG was applicable as the parties had their place of business in different CISG Contracting States and as the CISG applies to standard software. The court further found also that the parties had agreed on all particulars of the sale of the programme and therefore had concluded a sales contract.

It was held that the defendant could not rely on a possible lack of conformity of the software programme, since it had not effectively given notice of the defect but had only asked for assistance in addressing the problems identified. As a result, the court ordered the defendant to pay the purchase price and interest at the rate of 5%.

Case 132: CISG Art. 53; 74; 78
Germany: Oberlandesgericht Hamm; 11 U 206/93
8 February 1995
Published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1996, 197; commented on by Schlechtriem in IPRax 1996, 184

The German defendant ordered several times large lots of socks from an Italian manufacturer. Four contracts were concluded in the Italian language, the defendant being represented by its Italian agent. The manufacturer delivered the socks and sent four invoices in Italian to the defendant. Before payment, the manufacturer assigned its payment claims to the plaintiff, an Italian bank, and gave notice to the defendant. The assignment notice was in French and English. Despite the notice, the defendant who understood only little English and no French paid to the manufacturer, against whom bankruptcy proceedings were instituted shortly afterwards. The plaintiff claimed (second) payment from the defendant.

Noting that the parties had their places of business in different Contracting States, the appellate court found the CISG to be applicable (art. 1 (1)(a); art. 100 (2) CISG).

The court further found that the plaintiff was entitled to payment from the defendant according to article 53 CISG since it had effectively acquired the relevant claims by assignment. Noting that assignment is not regulated by the CISG, and that, therefore, its preconditions and effects must be decided according to the rules of private international law, the court, applying German private international law, found that Italian law was applicable.

As Italian law provided no specific rules on the "language risk", the court relied on the rules developed hereto under the CISG as part of the defendant's legal environment and found that the parties may either use the language agreed upon or customarily practised between them. In the court's view, if neither agreement nor practice exists at to which language is to be used, the circumstances of the case must decide. The court held that since the defendant in this case had recognized that the assignment notice could have some legal relevance, it was up to the defendant to clarify the precise contents of that notice.

The court also awarded 10% interest on the sum to be paid by the defendant (art. 78 CISG). As the CISG does not provide for a specific interest rate, the court took recourse to the governing contract law (in this case Italian law) which provides for 10 % interest (art. 1284 Codice civile). The requested interest at the rate of 14% could have been recovered under article 74 CISG only if the plaintiff had not failed to prove the higher interest damage.

Case 133: CISG 7; 25; 45; 49; 61; 74; 84
Germany: Oberlandesgericht München; 7 U 1720/94
8 February 1995
Unpublished

The plaintiff, an Italian trading company, and the defendant, a German automobile marketing company, concluded a sales contract concerning eleven cars for the price of about DM 400.000,--. The contract provided that the plaintiff was to furnish a bank guarantee for the sales price. A bank guarantee in the amount of DM 55.000 was granted in favour of the defendant. After the conclusion of the contract, the parties had some communications on the time of delivery and special features of the ordered cars. Five cars were finally ready for delivery in August, the remaining six in October. In October, the plaintiff informed the defendant that, due to extreme exchange rate fluctuations between the Lira and the Mark, acceptance of delivery of the cars was impossible. The plaintiff asked the defendant to try to defer delivery from the supplier. In the beginning of November, the defendant cancelled all orders it had made with its suppliers and demanded payment of the bank guarantee which was paid out. The plaintiff claimed repayment of the guaranty sum and damages.

The appellate court found the plaintiff to have a repayment claim against the defendant. It was held that, although the CISG will normally apply to German-Italian sales, it does not regulate the seller's rights concerning bank guaranties. The court, applying its rules of private international law, determined that German law was applicable.

The court found the defendant to have been unjustifiedly enriched according to 812 (1) 1 German Civil Code since the defendant obtained the payment of the bank guarantee without legal grounds. The court held that the bank guarantee was agreed upon to cover an obligation to pay and dismissed the defendant's argument that the bank guaranty should serve as a penalty for not taking delivery by the plaintiff.

Furthermore the court found that the defendant had not taken the appropriate legal measures to mitigate its loss (art. 77 CISG). By giving notice that the cars were ready to be picked up, the defendant had in fact fulfilled its contractual obligations (art. 31 CISG) and the plaintiff committed a breach of contract by not taking delivery of the cars (art. 53 CISG). The defendant, therefore, was entitled to the remedies provided by articles 61 (1) (b) and 74 CISG. But, as the defendant never avoided the contract, it had disregarded its duty to mitigate its loss and could not claim damages. Therefore, the defendant was not entitled to the guaranty sum.

However, the court dismissed the plaintiff's claim for damages against the defendant according to articles 45 (1) (b), 45 (2), 49 (1) (a) and 25 CISG. Since the parties had not agreed on a precise date of delivery, the defendant's readiness to deliver in August and October was no breach of contract, let alone a fundamental one. Thus, the right to declare the contract avoided because of the non-delivery of the cars was lost by the plaintiff. To allow the plaintiff now, i.e., 2 1/2 years later, to declare the contract avoided would violate the principle of good faith (art. 7 (1) CISG).

The court held that the plaintiff was entitled to interest according to article 84 CISG. Even though the claim for repayment was based on article 812 German Civil Code, the claim for interest derived from the CISG, because the repayment was a refund of the price. As the CISG does not regulate the interest rate, German Law was applicable. In view of the fact that both parties were merchants, the interest rate of 5% applied (article 352 German Commercial Code) .

Case 134: CISG 11; 14; 53; 62; 92
Germany: Oberlandesgericht München; 7 U 5460/94
8 March 1995
Unpublished

Published in German: OLG München, 8.3.1995 (7 U 5460/94), Recht der Internationalen Wirtschaft(RIW) 1996, 854

A Finnish company sold 3000 tones of electrolyt nickel/copper cathodes to the German defendant for about 17 million US dollars. Only the defendant signed the written contract form. The metal was delivered but not paid for. The Finnish company then assigned the payment claim to the plaintiff who demanded payment. The defendant denied the jurisdiction of the German court because of an arbitration clause and the valid conclusion of a sales contract.

Concerning the arbitration clause, the court found that the form requirements of the applicable article 2 (2) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 had not been satisfied, since the parties had not signed the agreement containing the arbitration clause and the Finnish company had not received the standard form which contained the clause.

Concerning the payment claim, the court applied the CISG since both parties to the sales contract had their places of business in different CISG Contracting States, namely in Finland and in Germany. It was held that a contract had been effectively concluded between the defendant and the Finnish company and that the plaintiff's claim for payment was justified under articles 53 and 62 CISG.

Even though Finland had declared that it would not be bound by Part II of the CISG concerning the "Formation of the Contract", an effective contract could still have been concluded. According to the CISG other forms of consent are possible as long as they can be regarded as a mutual binding arrangement and the subject-matter of the contract is comparable to articles 14-24 CISG. In an obiter dictum, the court explicitly excluded recourse to the governing contract law. The defendant signed a contractual document thus showing its approval of the contract and also accepted the goods upon arrival. The Finnish company indicated assent to the contract by its conduct, namely through the delivery of the goods. A written contractual agreement is not necessary to evidence the parties' consent (art. 11 CISG).

Case 135: CISG 1(1)(a) 18 (1); 19 (1); 19 (3); 59; 62
Germany: Oberlandesgericht Frankfurt am Main; 25 U 185/94
31 March 1995
Unpublished

The plaintiff, a German glass manufacturer, agreed to manufacture and deliver 220.000 test- tubes to the Italian defendant. During the course of negotiations, the appropriate glass type was the point of discussion as different types were mentioned. The plaintiff finally delivered test-tubes in Fiolax quality and demanded payment. The defendant refused to pay and alleged to have ordered the better Duran quality.

The court found that the CISG was applicable (art. 1(1)(a) CISG). According to articles 62 and 59 CISG, the seller can claim the price, if a contract has been concluded, i.e., if there is a valid offer and acceptance. The court found that the acceptance of the plaintiff's offer was missing as the seller and the buyer did not reach an agreement towards a specific glass quality (art. 18 (1), 19 (1), 19 (3) CISG). It was held therefore that the plaintiff could not demand payment and the suit was dismissed.

Case 136: CISG 1(1)(a) 8; 47; 49; 81 (2); 84 (1)
Germany: Oberlandesgericht Celle; 20 U 76/94
24 May 1995
Unpublished

The plaintiff, an Egyptian businessman, and the defendant, a German company trading in used printing machines, concluded an oral contract for the sale of nine used printing machines that were to be shipped to Egypt. The parties agreed upon two shipments, the first including six machines and the second three machines. According to the contract, the plaintiff was obliged to pay a considerable part of the contract price before the first shipment, which he did. But the first shipment contained only three machines. After having demanded shipment of the missing machines several times, the plaintiff declared that it had no longer any use for three of the still missing machines. The defendant answered: "We are sorry that we shall not deliver the machines anymore which we have kept to your disposal ...". With respect to the last three machines, the plaintiff fixed a final period of two weeks for delivery. The defendant did not deliver within that period but offered shortly afterwards shipment against advance payment. The plaintiff refused this and declared, now seven weeks after fixing the additional delivery period, the contract avoided as far as the missing machines were concerned. The plaintiff demanded compensation for its loss as well as repayment of the sum by which the advance payment exceeded the price of the three delivered machines.

The court found that the CISG was applicable as both parties had their places of business in different CISG Contracting States (art. 1 (1)(a) CISG), the sales contract had been concluded after the CISG had come into force for these States (art. 100 (2) CISG) and the application of the Convention was neither excluded (art. 6 CISG) nor had the parties subsequently chosen a specific law to be applicable.

The court found the plaintiff's repayment claim to be justified according to article 81 (2) CISG. As the first three missing machines were concerned, the parties had mutually terminated the contract. The plaintiff had refused to accept delivery and the defendant had but regretted the plaintiff's refusal. A reasonable person (art. 8 CISG) could have understood the defendant's letter as an acceptance of the termination of the contract.

With regard to the last three machines the contract was avoided by the plaintiff's unilateral declaration (articles 49 (1) (b), 47 (1) and 51 (1) CISG). The defendant had breached the contract by not delivering the machines within the time fixed by the contract (art. 33 (b) CISG), thus giving the plaintiff the right to fix an additional period of time (articles 49 (1) (b) and 47 (1) CISG). The plaintiff was, therefore, entitled to declare the contract avoided even if the additional delivery period of two weeks was perhaps too short. According to the court, the period of seven weeks between announcement and actual declaration of avoidance was reasonable. The fact that the defendant had offered shipment against advance payment in the meantime was found to be irrelevant since advance payment of the full contract sum was contrary to what had been agreed.

The court finally ordered the defendant to pay interest. According to article 84 (1) CISG, interest is due from the date on which the price was to be paid. The court held that the interest rate was to be determined in accordance with the applicable contract law which in the present case was German law. As the plaintiff had failed to justify a higher interest, the applicable interest rate was bound to be 4% (article 288 German Civil Code).

Case 137: CISG 11
United States: Supreme Court of Oregon SC S42285
11 April 1996
GPL Treatment, Ltd. v. Louisiana-Pacific Corp.
Published in English: 914 Pacific Reports (2d Series), 682; 323 Oregon Reports, 116
Intermediate appellate decision
United States: Court of Appeals of Oregon CA A81171
Published in English: 894 Pacific Reports (2d Series), 470; 113 Oregon Reports, Court of Appeals, 633
Commented on by Flechtner in 1995 Journal of Law & Commerce 15, 127.

Plaintiffs, three Canadian manufacturers and sellers of raw shakes (long wooden shingles), sued a U.S. corporation to recover damages for breach of alleged contracts for the sale and purchase of truckloads of cedar shakes. Defendant denied entering into these contracts. Defendant moved in limine for dismissal on the ground that plaintiffs failed to satisfy the writing requirement of the "statute of frauds" of the Uniform Commercial Code (UCC) as enacted in Oregon. The trial court denied the motion. During the trial, the plaintiffs attempted to raise the issue of whether the CISG, rather than the UCC, governed, but the trial court ruled that plaintiffs' attempt was untimely and that they had waived reliance on that theory. The jury returned a verdict awarding lost profits to the plaintiffs and the trial court entered judgment on the verdict.

Defendant appealed to an intermediate appellate court on the ground, inter alia, that the trial court had erred when it denied defendant's motion in limine. A majority of the three-judge appellate court found that plaintiffs had satisfied the UCC statute of frauds. The dissenting judge disagreed with the majority's analysis of the UCC as applied to the facts in the case. In a final footnote, the dissenting judge also stated that he would have addressed the issue of whether the trial court abused its discretion in its ruling on the applicability of the CISG.

On appeal to the Oregon Supreme Court, the decision of the trial and intermediate courts were affirmed. The majority, concurring, and dissenting opinions do not address the issue of whether the CISG governed or whether the trial court abused its discretion.

Case 138: CISG 1(1)(a); 74; 75; 77; 78
United States: United States Court of Appeals, Second Circuit
December 6, 1995
Delchi Carrier SpA v. Rotorex Corp.
Published in English: 10 Federal Reporter (Third Series), 1024
Commented on in French: Papandréou-Deterville, Recueil Dalloz [1997] 28ème Cahier, Sommaires commentés, 226
This case involves an appeal against the decision in CLOUT Case 85.

The appellate court affirmed the trial court's award of damages but reversed that court's rejection of specific headings of damages. The appellate court held that plaintiff was entitled to recover damages for (1) shipping, customs, and incidentals relating to the shipments of nonconforming compressors, (2) obsolete materials purchased only for use with these compressors, and (3) obsolete tooling purchased only for production of units with these compressors. The appellate court also remanded to the trial court the issue of whether plaintiff's labor costs when the production line was idle were compensable variable costs or noncompensable fixed costs.

Case 139: CISG 14, 55
Russian Federation: Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry
Arbitral award in case No. 309/1993 of 3 March 1995
Original in Russian
Unpublished

An Austrian firm (claimant) brought a claim against a Ukrainian firm (respondent) for damages resulting from the latter's refusal to deliver a certain quantity of goods. The respondent denied liability on the grounds that no such agreement had been reached between itself and the claimant.

In settling this dispute, the tribunal noted that, under article 14 CISG, a proposal for concluding a contract should be sufficiently definite. It was considered to be such if it indicated the goods and expressly or implicitly fixed or made provision for determining their quantity and price. A telex communication from the respondent regarding the delivery of the goods within a specified period indicated the nature of the goods and their quantity. However, it omitted to indicate the price of the goods or any means of determining their price. The indication in the telex that the price of the goods in question would be agreed ten days prior to the beginning of the new year could not be interpreted as making provision for determining the price of the goods, but was merely an expression of consent to determine the price of the goods at a future date by agreement between the parties. The claimant, who confirmed the contents of the telex communication, thus expressed its consent to the price of the goods being made subject to further agreement between the parties.

The tribunal also noted that in this particular instance article 55 CISG, allowing the price of goods to be determined where it was not expressly or implicitly fixed in a contract or where a contract made no provision for determining it, was not applicable since the parties had implicitly indicated the need to reach agreement on the price in future.

Agreement on the price had not subsequently been reached by the parties. The respondent indicated to the claimant that it was not possible to conclude a contract for the specified quantity of goods. Finding that no contract had been concluded between the parties, the tribunal dismissed the claim.

Case 140: CISG 74, 79
Russian Federation: Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry
Arbitral award in case No. 155/1994 of 16 March 1995
Original in Russian
Unpublished

A contract was concluded between a Russian seller and a German buyer for the supply of a specific quantity of chemical products within a period of time specified in the contract (fourth quarter of 1992). The goods were not delivered to the buyer within the specified period. From January to May 1993, the buyer repeatedly informed the seller that it insisted on the goods being delivered in accordance with the contract concluded and was ready to extend the time-limit for delivery. In May 1993, the buyer informed the seller that, as a result of the latter's breach of its contractual obligations, the buyer had purchased the goods specified in the contract from a third party. In May 1994, the buyer sued the seller for breach of contract, claiming compensation for damages suffered as a result of the buyer's failure to honour the contract, such damages consisting in the difference between the price of the goods established in the contract and the price at which the buyer was obliged to purchase the goods from the third party.

In its reply to the claim, the seller maintained that it should be discharged from liability on the grounds that it had been unable to deliver the goods for reasons beyond its control, namely because of an emergency production stoppage at the plant manufacturing the goods specified in the contract.

Referring to article 79 CISG, the tribunal decided that the seller (respondent) was unable to prove the facts that would have discharged it from its liability for non-performance of its obligations since refusal on the part of the manufacturer of the goods to supply them to the respondent could not be deemed sufficient grounds for such discharge from liability. The respondent should bear liability for failure to fulfil its obligations on the additional grounds that it was unable to establish that it could not reasonably be expected to take account, in concluding the contract, of the obstacle preventing its compliance with the contract or to avoid or surmount that obstacle or its consequences.

With regard to the amount of compensation for the damages, the tribunal considered that establishing the extent of damages on the basis of the difference between the contract price and the replacement purchase price was consistent in this instance with the provisions laid down in article 74 CISG for determining the amount of damages. In addition, account was taken of the fact that the respondent (seller) was not able to establish that the buyer would have been able to purchase the goods at a lower price when making the second purchase in replacement of the first.

Case 141: CISG 37, 52
Russian Federation: Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry
Arbitral award in case No. 200/1994 of 25 April 1995
Original in Russian
Unpublished

A contract was concluded in mid-November 1993 between a Swiss seller (claimant) and a Russian buyer (respondent) for the supply of chocolate confectionery products for a specified sum of money. The contract included a clause stipulating preliminary payment of the first two instalments of the goods — to be delivered by two vans — within three days of receipt by the seller of a banker's guarantee from the buyer for payment of the goods. The time-limit for delivery of the goods was one week after receipt of the banker's guarantee. As a consequence of further correspondence between the parties, the delivery was timed to fit in with the forthcoming Christmas holidays.

In mid-December 1993, the seller delivered the first of the two instalments on the basis of the buyer's written statement regarding guaranteed payment of goods. The buyer took delivery of the goods having completed all the customs and other formalities required for their import. However, the buyer subsequently failed to pay for the delivered goods. When explaining its position, it cited the fact that the seller had breached the contract by dispatching the goods before the buyer had transmitted the banker's guarantee. The buyer considered that such an infringement should be regarded as a fundamental breach of contract. In addition, the buyer stated that its non-payment was due to its subcontractors' refusal to accept previously ordered goods owing to the changed economic situation in the country. The seller brought a claim for the payment of the delivered goods to the arbitral tribunal.

In settling this dispute, the tribunal noted that, under article 53 CISG, one of the main obligations of the buyer was to pay the price established for the goods. Violation by the seller of the terms specified for dispatch of the goods (delivery in the absence of a banker's guarantee) could not be considered sufficient grounds for discharging the buyer from its obligation to pay for the goods, since the buyer had taken delivery of them. Such violation could not be deemed a fundamental breach of contract, in the sense of article 25 CISG, such as to entitle the buyer to breach the contract. Under the CISG, if the violation of the contract on the part of the seller caused the buyer to suffer any damage, it would be entitled to compensation (art. 37 CISG). However, in this particular case the buyer had not brought any such claim. The tribunal thus found in favour of the seller.

Case 142: CISG 54, 79(1)
Russian Federation: Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry
Arbitral award in case No. 123/1992 of 17 October 1995
Original in Russian
Unpublished

A German seller (claimant) brought a claim against a Russian buyer (respondent) in connection with the latter's failure to pay for equipment supplied under a contract concluded between the two parties. The buyer acknowledged that the goods had indeed been delivered under the contract but stated that its non-payment was due to the failure on the part of the bank responsible for the buyer's foreign currency transactions to give instructions for the amount payable for the goods under the contract to be transferred to the seller. The bank did not transfer the foreign currency amounts to the seller on the grounds that there were no funds available in the buyer's account in freely convertible currency to pay for the goods. Citing these facts, the buyer requested the tribunal to discharge it from liability since, in its view, the fact that it did not have available foreign currency resources should be regarded as force majeure discharging it from liability for the non-performance of its contractual obligations.

The tribunal was not in agreement with the respondent's view that its lack of foreign currency should be regarded as force majeure, since the contract agreed between the two parties gave an exhaustive list of force majeure circumstances discharging them from liability for non-performance of their contractual obligations. The buyer's lack of foreign currency was not included in that list of force majeure.

In addition, the tribunal stated that, under article 54 CISG, the buyer's obligation to pay the price of the goods included taking such measures and complying with such formalities as might be required to enable payment to be made. On the basis of the case materials and the clarifications offered by the buyer during the proceedings, it was established that the only action taken by the buyer was to send instructions to the bank for the amounts payable under the contract to be transferred, but that it had not taken any measures to ensure that the payment could actually be made.

The tribunal found in favour of the claimant and ordered the buyer to make the payment for the goods supplied.

Case 143: CISG 1(1)(a); 92(1); 100(2)
Hungary: Metropolitan Court
Original in Hungarian
Unpublished

The plaintiff, a Swedish company, sued the defendant, a Hungarian company, requesting payment of the price for the goods delivered. The defendant disputed the existence of a valid contract.

The court, noting that the parties had their places of business in different Contracting States of the CISG and that those States had ratified the Convention before the conclusion of the relevant contract between the plaintiff and the defendant, found the CISG to be applicable (art. 1(1)(a) and 100(2) CISG). Also noting that Sweden had accepted the Convention with a reservation concerning Part II (formation of the contract) (92(1) CISG), the court applied the provisions of the Hungarian private international law and found that Swedish law was applicable with regard to the formation of the contract.

Under the Swedish Act No. 28 of 1915, the contract had to be concluded in writing. The court found that the contract had in fact been concluded in writing, and, applying the CISG in all other respects, dismissed the defence of the defendant as unfounded and ordered the defendant to pay the price.

Case 150: CISG 1(1)(a): 35

France: Court of Cassation (1st Civil Division)

23 January 1996

Société Sacovini v. S.A.R.L. Les Fils de Henri Ramel

Published in French: Recueil Dalloz Sirey 1996, Jurisprudence, 334; [1996] UNILEX

Reported on in English: [1996] UNILEX

Commented on in French: Witz, Claude, Recueil Dalloz Sirey 1996, Jurisprudence, 334

The seller, Sacovini, a company with its place of business in Italy, concluded several contracts in 1988 for the sale of wine with French buyers. Having learned that adulterated Italian wine had been imported into France that same year, the buyers reported the matter to the Fraud Control Service. The latter concluded that the wine had indeed been adulterated.

The French dealers then brought an action before the Sète Commercial Court and then before the Montpellier Court of Appeal, claiming avoidance of the sales contract relating to the disputed wine and demanding compensation for the material and moral damages that they had suffered.

The Court of Appeal, in accordance with French domestic law, declared avoided the sales contract pertaining to the consignments of wine, finding against the seller, on the ground that the latter had not honoured its contractual obligation to supply a wine conforming to the contract and of fair merchantable quality.

The Italian company, Sacovini, appealed against the decision without invoking application of the CISG. It objected to the fact that the Court of Appeal found against the seller by avoiding the contract, since, in its view, the supply of chaptalized wine could not constitute a breach of the seller's obligation. The seller further asserted that there was no causal relationship between the chaptalization of the wine and the alleged damage, since it had been established in the case of particular consignments that the wine had been rendered unfit for consumption as a result of the conditions in which it had been transported.

The Court of Cassation dismissed the appeal. It found that the disputed contract had been an international sale of goods falling within the scope of application of CISG, which had entered into force on 1 January 1988 between France and Italy, and that the Court if Appeal had respected the provisions of that treaty, in particular its article 35, when finding that Sacovini, by supplying chaptalized wine, had not performed its obligation to supply goods in conformity with the contract. Finally, regarding the absence of a causal relationship between the chaptalization of the wine and the alleged damage, the Court of Cassation agreed with the ruling of the trial court according to which it was solely the treatment of the wine that had rendered it unfit for consumption.

Case 151: CISG 1(1)(a); 6; 55

France: Court of Appeal of Grenoble (Commercial Division)

26 April 1995

Entreprise Alain Veyron v. Société E. Ambrosio

Original in French

Published in French: [1996] UNILEX

Reported on in English: [1996] UNILEX

A commercial collaboration contract was concluded in 1989 between a company with its place of business in Italy and an individual resident in France. The latter thus became the sole representative and importer of confectionery exported by the Italian business. One year later, the Italian company broke off the collaboration agreement, which triggered the dispute.

The Court of Appeal found that the commercial collaboration contract pertained partly to sales and partly to representation, and that the part falling under sales law was governed by CISG since it had been concluded between a seller and a buyer based in Italy and France respectively, both States being parties to CISG (art.1(1)(a)).

The Court of Appeal considered the question of the possible liability of the Italian company for breach of contract regarding the part of the commercial collaboration contract pertaining to sales. The court based this finding on a provision of the collaboration contract whereby the contract was revokable without being open to objection on the part of the agent. The court also found that the Italian company was not obliged to make any payment for breach of contract. The court stressed that such a stipulation was not prohibited by CISG and that the parties were at liberty to agree that the seller could refuse to maintain the contractual relationship since it would not thereby be calling into question the performance of a previously concluded sales contract. The court noted that, in the case in point, it was not alleged that the decision to terminate the contractual relationship had resulted in a refusal to execute a previously placed order or in the incomplete execution of such an order. The court concluded therefore that the Italian company could not be held liable for breach of the part of the commercial collaboration contract pertaining to sales.

The Court of Appeal also ruled on the operation of article 55 CISG, which the commercial agent had used to his advantage. The latter had asserted that his successor had benefited from lower prices than those charged to him and requested the court to reduce accordingly the debt claimed by the Italian exporter. The court found that "the reference made by article 55 CISG to a market price, in as much as this article is applicable to the case, is overridden by a contrary agreement between the parties, such as the provisions of CISG in their entirety, with the exception of article 12 (art. 6)". The court also noted that the objections raised by the agent when the rates charged were increased in 1990 did not call into question the sales contract itself but merely expressed general grievances regarding the parties' business relationship and the difficulties encountered in the face of the competition. The court finally noted that, since the commercial agent had taken delivery of the goods without specifically questioning their purchase price, the exporter was justified, under article 8(2) and (3) CISG, in interpreting the agent's behaviour as indicating acceptance of the rate charged.

Case 152: CISG 1(1) (b); 49; 78

France: Court of Appeal of Grenoble (Commercial Division)

26 April 1995

Marques Roque, Joaquim v. S.A.R.L. Holding Manin Rivière

Original in French

Published in French: [1996] UNILEX

Reported on in English: [1996] UNILEX

A company with its place of business in France sold to an individual resident in Portugal a used warehouse for the price of 500,000 French francs, including the cost of dismantling and delivery, the price of the warehouse being 381,200 francs and the dismantling and delivery costs amounting to 118,800 francs. Following the buyer's refusal to pay the last part of the price on the grounds that the dismantled metal elements were defective, the Court of Appeal of Grenoble found that the disputed contract covered the sale of a used warehouse together with its dismantling and that it was apparent from the invoices submitted that the supply of services did not constitute the preponderant part [of the contractual obligations]. The court concluded that the contract therefore fell within the scope of application of CISG (art. 3(2)).

The Court of Appeal further stressed that the contract had been concluded between a seller with its place of business in France and a buyer resident in Portugal, that France was a State Party to CISG whereas Portugal had neither signed nor ratified it, and that it was therefore necessary to ascertain whether CISG was applicable through the provisions of private international law (art. 1(1)(b)).

Having invoked the Hague Convention of 15 June 1955 on the Law applicable to International Sales of Goods, the court arrived at French law, this being the law of the country where the seller had its habitual residence at the time when it received the order (art. 3, first paragraph, Hague Convention). The court accordingly applied CISG because "since 1 January 1988, the French domestic law applicable to international sales was the Vienna Convention of 11 April 1980". The court found, in the light of article 35 CISG, that a certain quantity of the goods were not fit for the particular purpose of reassembly in the identical form expressly made known to the seller. Since that defect related to only part of the warehouse and concerned metal elements which could be repaired, it did not constitute a fundamental breach such as to deprive the buyer of what he was entitled to expect under the contract. The court therefore found that this breach did not justify avoidance of the contract pursuant to article 49.

The Court of Appeal further noted that, in the event, such avoidance had not taken place, since the parties had determined that the seller would repair the damaged metal elements. In response to the buyer's objection that the [seller's] obligation was to restore the warehouse to a new state, the court found that it was not established that the seller had accepted such a task which would have served to multiply the value of some of the elements sold by a factor of 40. Having furnished the buyer with replacement elements which were only very slightly bent out of shape, the seller had, in conformity with article 46(3) CISG, repaired the defect in conformity with the goods sold.

The court awarded damages to the buyer after noting that the latter retained the right to claim damages notwithstanding the repair carried out at its own expense by the seller (art. 48(1)).

Finally, regarding interest on arrears and the capitalization of interest claimed by the seller, the Court of Appeal noted that article 78 CISG stated that any delay in payment gave rise to entitlement to interest on the arrears without notice being served and that such interest should start to accrue on the date on which the replacement goods were handed over to the buyer. The court decided that the interest would be capitalized at the end of one complete year to be counted from the date of submission of grounds of appeal in which the seller first made the request for interest.

Case 153: CISG 1(1)(a); 29(1); 31(a) and (c); 57(1); 78

France: Court of Appeal of Grenoble (Commercial Division)

29 March 1995

Société Camara Agraria Provincial de Guipuzcoa v. André Margaron

Original in French

Published in French: [1995] UNILEX, E.95-2

Reported on in English: [1995] UNILEX, D.95-2

A French seller and a Spanish buyer concluded a number of contracts for the sale of maize. All the deliveries were made, but the buyer did not pay the full price. The seller brought an action against the buyer before a French court, demanding payment of the full price and interest accruing.

In the first instance, the Regional Court of Grenoble, without invoking CISG, ordered the buyer to pay the full price, but found that the seller was not entitled to claim interest.

The buyer lodged an appeal, objecting that the French court did not have jurisdiction and demanding a price reduction on the basis of an agreement emerging from a meeting of the parties after conclusion of the contract.

The Court of Appeal found that CISG was applicable since the contract in question was a contract for the international sale of goods concluded between two parties established in different States Parties to CISG.

In order to determine where the price was payable, the Court of Appeal cited article 57(1) and article 31(a) and (c) in their entirety, and accordingly found that the obligation to pay the price should be performed within the jurisdiction of the Regional Court of Grenoble, whether or not the payment had been made subject to delivery of the goods.

Regarding the price reduction requested by the buyer, the court found that, on the basis of article 29 CISG, a contract could be modified purely by agreement of the parties. However, it also found that the modification of the purchase price could not, as in the case in point, result from the general mood of a meeting.

The seller's entitlement to payment of the price and interest on arrears was recognized. The Court of Appeal made reference for this purpose to article 78 CISG and noted that, unlike under French law, the serving of notice was not necessary. Finally, the court ordered the capitalization of the interest requested by the buyer.

Case 154: CISG 1(1)(a); 7(1); 8(1); 25; 64(1); 73(2)

France: Court of Appeal of Grenoble (Commercial Division)

S.A.R.L. Bri Production "Bonaventure" v. Société Pan Africa Export

22 February 1995

Original in French

Published in French: [1995] UNILEX, E.95-L; Journal du droit international 1995, 632

Reported on in English: [1995] UNILEX, D.95-1

Commented on by P. Kahn, Journal du droit international 1995, 639

A French seller, a jeans manufacturer, concluded a contract for the sale of a given quantity of goods with a buyer based in the United States of America. It was specified that the jeans purchased were to be sent to South America and Africa.

Both during the negotiations preceding the contract and during the follow-up to its performance, the seller had repeatedly and insistently demanded proof of the destination of the goods sold. It became apparent during a second delivery that they had been shipped to Spain.

The seller's refusal to maintain the trade relationship and to proceed with further deliveries triggered the proceedings.

The Court of Appeal invoked article 1(1)(a) CISG in order to determine the law applicable to the case, since the buyer and seller were nationals of two different States Parties to CISG.

The court then invoked article 8(1) CISG in order to conclude that the United States company had not respected the wish of the French company, namely to know the destination of the goods. That attitude constituted a fundamental breach of contract within the meaning of article 25 CISG.

Under article 64(1) the seller could declare the contract avoided. The Court of Appeal adopted this solution, invoking in addition article 73(2) with regard to the contracts for further deliveries.

Finally, it ordered the United States company to pay damages amounting to 10,000 French francs for abuse of process, finding that the conduct of the buyer, "contrary to the principle of good faith in international trade laid down in article 7 CISG, aggravated by the adoption of a judicial stand as plaintiff in the proceedings, constituted abuse of process".

Case 155: CISG 19(2); 86(1)

France: Court of Cassation (1st Civil Division)

Decision dismissing the appeal on points of law brought against the decision of the Court of Appeal of Paris of 22 April 1992

4 January 1995

Société Fauba v. Société Fujitsu

Original in French

Published in French: Recueil Dalloz Sirey 1995, Jurisprudence, 289; [1996] UNILEX; Witz, Claude, Les premières applications jurisprudentielles du droit uniforme de la vente internationale - Convention des Nations Unies du 11 avril 1980, Librarie Générale de Droit et de Jurisprudence (L.G.D.J.), Collection Droit des Affaires, Paris (1995) 140

Commented on in French by Witz, see Recueil Dalloz Sirey 1995, Jurisprudence, 290; Witz, see L.G.D.J. above (1995) 61; 69

Reported on in English: [1996] UNILEX

The Court of Cassation dismissed the appeal on points of law brought by the French buyer against the decision of the Court of Appeal of Paris regarding the formation of the sales contract. The buyer asserted that the contract had not been formed and that, by deciding the contrary, the Court of Appeal had violated article 19 CISG. The Court of Appeal was also held by the buyer to have violated article 86 CISG by finding that the buyer should have immediately returned the surplus goods delivered.

The Court of Cassation agreed with the ruling of the trial and court on the question of the existence of an agreement between the parties regarding the object at issue and the price, including the part of the agreement relating to an adjustment of the initial price in accordance with the market and the alterations made in the content of the order. Having done so, the Court of Cassation made no reference to any provision of CISG.

Secondly, the Court of Cassation referred to article 86(1) CISG, under which the buyer who had received the goods and intended to reject them was entitled to retain them until it had been reimbursed by the seller its reasonable expenses for preserving them. In dismissing the appeal on this point, the Court of Cassation found that the buyer "had never claimed to have incurred such expenses for those goods which did not correspond to its orders".

Case 156: CISG 57(1)(a))

France: Court of Appeal of Paris (1st Division, Urgent Proceedings Section)

10 November 1993

Société Lorraine des produits métallurgiques v. Banque Paribas Belgique S.A. and Société BVBA Finecco

Original in French

Published in French: Juris-Classeur Périodique, ed. G, 1994, II, No. 22314; [1995] UNILEX, E.93-23; Journal du droit international 1994, 678

Reported on in English: [1995] UNILEX, D.93-23

Commented on by Audit, Juris-Classeur Périodique, ed. G, 1994, II, No.22314; Jacquet, Journal du droit international, 1994, 683; Dubarry-Loquin, Revue trimestrielle de droit commercial 1994, 698

In July 1991 a French seller and a Belgian buyer concluded a contract for the sale of metal sheets. The payment of the purchase price was guaranteed by a Belgian bank.

Since the buyer had not effected payment by the agreed date, the seller brought an action for payment against the buyer and his guarantor before a French court (Bobigny Commercial Court).

The Commercial Court found that it did not have jurisdiction and referred the case and all the parties to Gand Court (Belgium).

The seller raised an objection to this decision on the ground that the French court did indeed have jurisdiction.

The Court of Appeal applied CISG in determining where the purchase price was payable. It found that, pursuant to article 57 CISG, the purchase price was payable at the place of business of the seller, no specific stipulation having been agreed by the parties.

The Court of Appeal consequently asserted its jurisdiction.

Case 157: CISG 3(1)

France: Court of Appeal of Chambéry (Civil Division)

25 May 1993

Société AMD Eléctronique v. Société Rosenberger Siam S.p.A.

Original in French

Published in French: Revue de Jurisprudence Commerciale 1995, 242; [1995] UNILEX, E.93-16

Reported on in French: Bull. inf. C. cass, 01-10-1993, 35

In English: [1995] UNILEX, D.93-16

Commented on in French by Witz, Claude, Revue de Jurisprudence Commerciale 1995, 244; Les premières applications jurisprudentielles du droit uniforme de la vente internationale - Convention des Nations Unies du 11 avril 1980, Librairie Générale de Droit et de Jurisprudence (L.G.D.J.), Collection Droit des Affaires, Paris, (1995), 34

The buyer, a company established under Italian law, placed an order for connectors with a French company, the seller, in February 1990. Under the agreement, the connectors were to be manufactured on the basis of designs provided by the company Rosenberger and checked in accordance with the quality-control standards adopted and communicated by the latter company.

Various problems arose between the parties. On 18 June 1991, the seller brought proceedings against the other party to the contract before the Regional Court of Bonneville for payment of the price due for goods delivered but not paid for. The buyer raised an objection on the ground of the lack of jurisdiction of the French court as against an Italian court. On 6 January 1993, the Regional Court upheld the objection on the grounds that the defendant was resident in Italy and that the delivery had also been made in Italy.

The buyer lodged an appeal.

In order to determine the place where the obligation to pay the price should be performed, pursuant to article 5(1) of the Brussels Convention on Jurisdiction and the Enforcement of Civil and Commercial Judgments, the Court of Appeal considered whether CISG was applicable. It found that the disputed contract was not a sale within the meaning of CISG, which was not applicable when, as in the case in question, the party placing an order supplied "a substantial part of the materials necessary for such manufacture or production" (cf. art. 3(1) CISG).

Case 158: CISG 1(1)(b); 23

France: Paris Court of Appeal (15th Division)

22 April 1992

Société Fauba v. Société Fujitsu

Original in French

Published in French: [1996] UNILEX; Witz, Claude, Les premières applications jurisprudentielles du droit uniforme de la vente internationale - Convention des Nations Unies du 11 avril 1980, Librairie Générale de Droit et de Jurisprudence (L.G.D.J.), Collection Droit des Affaires, Paris (1995), 135

Commented on in French by Witz, V., L.G.D.J. above, 29; 59; 69; Witz, Recueil Dalloz Sirey 1995, 19è Cahier, Chronique, 143

Reported on in English: [1996] UNILEX

The plaintiff, a French buyer, had ordered on 22 March 1990 several batches of electronic components from the defendant, a German seller, through the defendant's liaison office in France. The buyer had accepted the price previously stated by the supplier but had requested its reduction in accordance with the drop in prices on the market. In its acceptance of the order, the seller had replied that the prices could be adjusted upwards or downwards, as agreed, in accordance with the market, but that various specific items could not be delivered. A telephone conversation took place between the parties on 26 March, and the German seller sent his partner a telex on the same day recording the latter's agreement to amend one item of the order. By telex of 13 April, the French buyer changed his order once again, a change which the German seller stated that it could not accept for short-term deliveries.

Before the Paris Court of Appeal, the plaintiff maintained that the contract had not been formed because of alteration of the initial order which had led to disagreement between the parties, and invoked for that purpose article 19 CISG. The plaintiff further ruled that, under article 4 of that instrument, there were grounds for taking account of French common law with regard to the purchase price.

The Court of Appeal held that the seller's liaison office based in France did not have due legal personality and that the contract was therefore an international sales contract concluded between a French company and a German company. It found that CISG (art. 1(1)(b)) was applicable in the case in point.

Regarding the formation of the contract, the Court of Appeal held that the contract had been validly formed by virtue of the consent of the parties to the object at issue and the price and that it had become effective on receipt by the buyer of the seller's acceptance of the order in accordance with article 23 CISG. In addition, since the buyer had argued that the seller had delivered surplus goods, the Court of Appeal held that if the quantity of goods delivered did not correspond to the quantity specified in the order, it was the responsibility of the buyer to return the surplus goods immediately. Finally, regarding the price, the court held that the parties' agreement regarding the adjustment of the price in accordance with the market had not rendered the price indeterminable; it did not, however, state the legal principles whereby it considered the price to be determinable.

Case 161: CISG 1(1)(a)

Hungary: Arbitration Court attached to the Hungarian Chamber of Commerce and Industry

Arbitral award in case No. Vb/92205 of 20 December 1993

Original in Hungarian

Extracts published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1995, 52

The claimant requested the arbitral court to ascertain whether a valid contract had been concluded between the claimant and the respondent for the sale of shares in a Hungarian limited liability company. Both the country of the claimant and that of the respondent were States Parties to the CISG.

The arbitral court distinguished between the sale of goods and the sale of rights and held that the CISG was not applicable since the contract at issue dealt with the sale of rights and thus did not fall within the ambit of the CISG (article 1(1)(a) CISG) .

Case 162: CISG 1(1)(a); 57

Denmark: Østre Landsret

22 January 1996

Dänisches Bettenlager GmbH & Co. KG v. Forenede Factors A/S

Published in Danish: Ugeskrift for Retsvæsen (UfR) 1996, 616 ØLK

The plaintiff, a Danish factoring company, sued the defendant seeking to collect debts based on several invoices for the supply of goods. The debts had been assigned by the defendant's supplier to the plaintiff.

In order to determine which court had jurisdiction, the court applied article 5(1) of the 1968 EU (Brussels) Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters, according to which an EU domiciliary may be sued in the courts at the place of performance of the obligation in question (payment). The court found that the CISG was applicable since both Germany and Denmark were States Parties to the CISG and the transaction dealt with the sale of goods. The court further held that the court at the seller's place of business had jurisdiction (article 57 CISG).

Case 163: CISG 66; 67

Hungary: Arbitration Court attached to the Hungarian Chamber of Commerce and Industry

Arbitral award in case No. VB/96074 of 10 December 1996

Original in English

Unpublished

A Yugoslav company sold and delivered caviar to a Hungarian company. According to their contract "the buyer has to pick up the fish eggs at the seller's address and take the goods to his facilities in Hungary". Payment was due two weeks after the delivery of the goods, at which time the UN embargo against Yugoslavia took effect in Hungary. The claimant assigned the claim for the price of the goods to a company located in Cyprus. The respondent acknowledged the assignment, but could not pay on the basis that the UN embargo was a force majeure.

The arbitral court found that the damage caused by force majeure had to be borne by the party to whom the risk had passed, i.e., the respondent. In this connection, the arbitral court found it necessary to point out that the risk of freight had to be borne by the respondent, unless the contract of the parties or the applicable law provided otherwise (article 67 CISG). The respondent could not be exculpated by proving that the damage was owing to an act or omission of the claimant (article 66 CISG).

Accordingly, the arbitral court held that the respondent was obliged to pay the price of the delivered goods with interest.

Case 164: CISG 7(2); 39(1); 49(1)

Hungary: Arbitration Court attached to the Hungarian Chamber of Commerce and Industry

Arbitral award in case No. VB/94131 of 5 December 1995

Original in German

Unpublished

The claimant, a Hungarian company, and the respondent, an Austrian company, signed a contract for the sale of containers. The respondent paid for only a part of the delivered goods. The claimant requested payment of the outstanding balance. The respondent refused payment owing to the poor quality of the goods.

The arbitral court applied the CISG since, in accordance with the contract between the parties, the law of the country of the claimant was applicable. It was held that the respondent had to pay since it had failed to give notification about the defect of the goods (article 39(1)CISG). In addition, the arbitral court found that the respondent could not declare the contract avoided on the basis that the terms of delivery had not been established by the parties (article 49(1) CISG). As to the interest rate, the arbitral court, referring to article 7(2) CISG, held that it had to be adjusted taking into account the currency in which the contract price had been agreed upon.

Case 165: CISG 1(1)(a); 49(1),(2); 84(2)

Germany: Oberlandesgericht Oldenburg; 11 U 64/94

1 February 1995

Original in German

Unpublished

The Austrian plaintiff, a furniture manufacturer, agreed to manufacture a leather seating arrangement for the German defendant. The defendant sold the furniture to one of its clients, who discovered that the furniture did not conform with the contract. The defendant required the plaintiff to remedy the lack of conformity by repair. Yet, even after the furniture had been repaired, the defendant still found the furniture not to conform with the contract and declared the contract avoided. The plaintiff demanded payment including interest amounting to 13%.

The appellate court found the CISG to be applicable to the contract since both parties were located in Contracting States (article1(1)(a) CISG). It was held that the plaintiff did not have a payment claim against the defendant since the repaired furniture did not conform with the contract and this amounted to a fundamental breach of the contract which gave the defendant the right to declare the contract avoided (article 49(1)(a) CISG).

In addition, the appellate court found the defendant to have declared the contract avoided within a reasonable time (article 49(2)(b) CISG), even though approximately five weeks had elapsed between the delivery of the repaired furniture and the declaration of avoidance. The plaintiff alleged that according to its general terms and conditions of trade the defendant was obliged to declare avoidance within five days. However, the appellate court found that the plaintiff's general terms and conditions of trade did not apply when a repair had already taken place.

The appellate court also denied a claim for all benefits of possession (profits and advantages of use), which the defendant derived from the furniture in accordance with article 84(2) CISG, since such benefits were deemed not to exist in this case.

Case 166: CISG 1(1)(b); 45(2); 61; 63; 74; 79

Germany: Schiedsgericht der Handelskammer Hamburg

(a) 21 March 1996 (Award on substantive issues)

Published in German: Neue Juristische Wochenschrift (NJW) 1996, 3229

Commented on by Hardt in Neue Wirtschaftsbriefe 1996, 1925;

(b) 21 June 1996 (Award on costs of proceedings)

Original in German; Unpublished

The claimant, a Hong Kong company, and the respondent, a German company, had concluded a general agreement for the exclusive delivery and distribution of Chinese goods. Under this agreement, the claimant was responsible for the business relations with Chinese manufacturers while the respondent was responsible for the distribution of the goods in Europe. On this basis, the parties concluded regularly separate sale of goods contracts. Owing to financial difficulties, a Chinese manufacturer could not deliver the ordered goods to the claimant, who consequently could not fulfill its contractual obligation to the respondent.

The claimant demanded payment of the sum due resulting from previously delivered goods. The respondent set off against this claim a damage claim for lost profit owing to the termination of the business relation with the claimant and refused to pay.

The arbitral tribunal applied the CISG as the relevant German law under article 1(1)(b) CISG. The arbitral tribunal upheld the claimant's demand for payment. It further held that the respondent could set off against the claimant a claim resulting from the breach of the relevant sales contract but not from the general distribution agreement.

With respect to the damages claim for the non-performance of the sales contract, the arbitral tribunal held that the contract could be declared void and damages could be claimed under article 45(2). It further held that a claimant could be deemed to have unlawfully refused performance if it made delivery dependent on payment of arrears from previous sales contracts, even if the parties had agreed on cash payment in advance. The arbitral tribunal also held that the respondent's damage claim was not precluded under article 79 CISG since the financial difficulties of the claimant's Chinese manufacturer were within the sphere of the claimant's responsibility.

With respect to the general distribution agreement, the arbitral tribunal held that the damages claim was without sufficient merit since it was not a consequence of the breach of a sales contract by the claimant in the sense of article 74 CISG.

The arbitral tribunal, in rendering its award on the costs of the proceedings, held that the claimant could claim its attorney's fees for the arbitration proceedings as damages according to articles 61 and 74 CISG. It also held that, if the respondent refused to pay because it set off an alleged claim for damages, the claimant did not have to fix an additional period of time for payment according to article 63 CISG.

Case 167: CISG 1(1)(a); 35; 38; 39(1); 44; 45(1)(b); 74

Germany: Oberlandesgericht München; 7 U 3758/94

8 February 1995

Original in German

Unpublished

The plaintiff, an Austrian insurance company, sued the defendant, a German company, for damages owing to the breach of a sales contract. The defendant had sold its product to the plaintiff's client, an Austrian company, which in turn sold it to a Danish company. The Danish buyer, after receiving and using the goods, informed the Austrian seller about the non-conformity of the goods. The Austrian seller did not inform the defendant, but gave notice to its insurance company, the plaintiff, for compensation. For this purpose, the Austrian seller assigned to the plaintiff its purported damages claim against the defendant.

The applicable German law to the contract for the supply of goods to be produced was the CISG as both companies had their places of business in different States Parties to the CISG, i.e., Austria and Germany (article 1(1)(a) CISG). Accordingly, a possible claim for damages for the delivery of goods not conforming with the contract could be based on articles 45(1)(b) and 74 CISG. But, a possible non-conformity of the delivered goods upon examination was of no importance (articles 35, 38 and 45(1) CISG) because neither the Austrian seller nor the Danish buyer gave notice to the defendant specifying the lack of conformity within a reasonable time pursuant to article 39(1) CISG. The Danish buyer only informed the Austrian seller, who then informed the plaintiff. Yet, this notice was given three months after delivery of the goods and thus deemed not to have been given within a reasonable time. As a reasonable excuse for the failure to give the required notice under article 44 CISG could not be found, the appellate court dismissed the plaintiff's claim.

Case 168: CISG 6; 7(1); 35(1),(3); 40; 45; 74

Germany: Oberlandesgericht Köln; 22 U 4/96

21 May 1996

Original in German

Unpublished

The defendant sold a used car to the plaintiff, both parties being car dealers. The documents showed that the car was first licensed in 1992 and the mileage on the odometer was low. The sales contract included the exclusion of any warranty. The plaintiff later sold the car to a customer, who discovered that the car had been first licensed in 1990 and that the actual mileage on the odometer was much higher. The plaintiff paid damages to his customer and demanded the same amount as damages from the defendant.

The appellate court held that the plaintiff could claim damages under articles 35(1), 45 and 74 CISG. The plaintiff's damages caused by its liability to its customer could be claimed under article 74 CISG because such damages are foreseeable if goods are sold to a dealer who intends to resell them.

Even though the plaintiff could have detected the car's lack of conformity with the contract, the defendant could not avail itself of article 35(3) CISG since the defendant knew the actual age of the car and thus acted fraudulently. The appellate court held that article 35(3) CISG could not be relied on by a fraudulent seller, referring to the general principles embodied in articles 40 and 7(1) CISG. According to the appellate court, even a very negligent buyer deserves more protection than a fraudulent seller. Although, the exclusion of any warranty was possible under article 6 CISG, it was held to be invalid in this case. The appellate court found that the substantial validity of such a clause was not governed by the CISG. In this case, this question was governed by German law, according to which an exclusion of warranty is invalid if the seller acts fraudulently.

Case 169: CISG 7(2); 53; 61(1)(b); 74

Germany: Oberlandesgericht Düsseldorf; 6 U 152/95

11 July 1996

Published in German: Recht der Internationalen Wirtschaft (RIW) 1996, 958; commented on by Schlechtriem in Entscheidungen zum Wirtschaftsrecht (EWiR) 1996, 843

The German plaintiff produces engines for lawn-mowers. The Italian defendant distributes these engines in Italy according to an exclusive distribution agreement with the plaintiff. The plaintiff demanded payment for delivered engines. Against this claim, the defendant set off a claim for damages caused by an alleged breach of the distribution agreement owing to plaintiff's refusal to deliver further engines.

The appellate court held that the plaintiff could demand payment under article 53 CISG but that a set-off was not possible. The appellate court distinguished between the distribution agreement as a framework contract and the separate sales contracts for the delivery of engines. The separate sales contracts were governed by the CISG. However, the CISG did not cover the distribution agreement, which was governed by the applicable law under conflict-of-laws rules. Under German conflict-of-laws rules, the distribution agreement in this case was governed by Italian law (article 7(2) CISG).

Similarly, the appellate court held that the set-off was not covered by the CISG since it arose from a distribution agreement and had to be determined by the applicable national law, which, in this case, was German law. However, according to German law, the defendant did not demonstrate that it had sustained damages. The appellate court also held that, under articles 61(1)(b) and 74 CISG, the plaintiff could claim attorney's fees for a reminder that was sent prior to the lawsuit.

Case 170: CISG 35; 38; 39; 40; 45(1)(b); 74

Germany: Landgericht Trier; 7 HO 78/95

12 October 1995

Published in German: Neue Juristische Wochenschrift - Rechtsprechungsreport (NJW-RR) 1996, 564

The plaintiff, an Italian wine seller, sued the German buyer (defendant) for payment of the price of wine sold and delivered. The defendant refused payment arguing that the delivered wine was not of merchantable quality since it contained 9% water with which the wine had been mixed. The bottles had therefore been seized and the wine destroyed by German authorities and the defendant had been charged with the costs for these measures. The defendant set off these costs against the plaintiff's claim (articles 45(1)(b) and 74 CISG).

The court found in favour of the defendant. Under the CISG, the defendant could set off its damages against the purchase price as a result of the seller's breach of contract. The court found that the defendant had not lost its right to rely on the non-conformity of the wine even though the defendant did not examine the wine for water after delivery (articles 35, 38 and 39 CISG). In this case the plaintiff could not have been unaware of the non-conformity (article 40 CISG).

Case 171: CISG 25; 49(1)(a)(b); 58
Germany: Bundesgerichtshof; VIII ZR 51/95
3 April 1996
Published in German: Neue Juristische Wochenschrift (NJW) 1996, 2364
Commented on by Karollus in Juristenzeitung (JZ) 1997, 38; by Koch in Recht der Internationalen Wirtschaft (RIW) 1996, 687; by Magnus in Lindenmaier/Möhring, Nachschlagewerk des Bundesgerichtshofs (L/M), CISG No. 3; by Piltz in Europäische Zeitschrift fur Wirtschaftsrecht (EuZW) 1996, 448; by Schlechtriem in Entscheidungen zum Wirtschaftsrecht (EWiR), Art 25 CISG 1/96, 597; and by Spiegel, Recueil Dalloz [1997] 27ème Cahier, Sommaires commentés, 218.

The Dutch plaintiff was the assignee of a Dutch company, which had sold four different quantities of cobalt sulphate to the defendant, a German company. It was agreed that the goods should be of British origin and that the plaintiff should supply certificates of origin and of quality. After the receipt of the documents, the defendant declared the contracts to be avoided since the cobalt sulphate was made in South Africa and the certificate of origin was wrong. The defendant also claimed that the quality of the goods was inferior to what was agreed upon. The plaintiff demanded payment. The German Supreme Court held that there were no grounds for avoidance of the contract and thus found for the plaintiff.

According to the Court, the declaration of avoidance could not be based on article 49(1)(b) CISG since the plaintiff had effected delivery. The delivery of goods which do not conform with the contract either because they are of lesser quality or of different origin does not constitute non-delivery.

The Court also found that there was no fundamental breach of contract since the defendant failed to show that the sale of the South African cobalt sulphate in Germany or abroad was not possible (article 49(1)(a) CISG). Thus, the defendant failed to show that it was substantially deprived of what it was entitled to expect under the contract (article 25 CISG).

Lastly, the Court held that the delivery of wrong certificates of origin and of quality did not amount to a fundamental breach of contract since the defendant could obtain correct documents from other sources. Accordingly, the defendant could not refuse payment under article 58.

Case 172: CISG 36

Hungary: Metropolitan Court (No. 12.G.75.715/1996/20)

1 July 1997

Original in Hungarian

Unpublished

The plaintiff, a German company, sold to the defendants, two Hungarian companies, used timber machinery. One of the defendants opened a letter of credit in favour of the plaintiff for the payment of part of the price, the balance to be paid in installments. However, the issuer did not pay upon demand and presentation of the necessary documents on the ground that the documentation was defective and when the defect was cured the letter of credit had expired.

The plaintiff asserted a claim against both defendants. One of the defendants contested the claim on three grounds: error, lack of conformity of the goods to the contract terms and disproportionate value of the obligations between the opposing parties.

On the one hand, the court decided on the questions of error and disproportionate value of the obligations on the basis of the Hungarian Civil Code since those issues are not covered in the CISG. On the other hand, the court decided the question of lack of conformity pursuant to article 36 CISG.

The court held that only one of the defendants was liable for payment for the used timber machinery.

Case 173: CISG 19(3)

Hungary: Metropolitan Court (No. 12.G.76.237/1996/14)

17 June 1997

Original in Hungarian

Unpublished

The Canadian plaintiff concluded a distribution contract with the Hungarian defendant. The contract was to expire on 31 December 1991. After the contract's expiry, the parties discussed and corresponded about extending the distribution contract into 1992. However, the defendant failed to deliver any goods in 1992. The plaintiff demanded damages based on either breach of contract or, alternatively, on the doctrine declaring that a promise may also be enforced if the making of the promise reasonably induced another person to change position in reliance on the promise ("promissory estoppel").

The court, pursuant to article 19(3) CISG, found that there was no clear agreement between the parties and therefore no distribution contract for 1992 and rejected the claim for damages based on a breach of contract theory. Moreover, the court adjudicated the claim for damages based on the promissory estoppel theory in conformity with the Hungarian Civil Code and rejected the claim.

Case 174: CISG 1(a)(b)

Hungary: Arbitration Court attached to the Hungarian Chamber of Commerce and Industry

Arbitral award in case No. Vb/96038 of 8 May 1997

Original in Hungarian

Unpublished

The Hungarian claimant and the Italian respondent agreed that Hungarian law would govern their contract. The contract contained the elements of both a sales and an agency agreement. At the time of concluding the contract, the CISG was already applicable in both Italy and Hungary. Therefore, one of the parties argued that the CISG would be applicable to their contract even without any choice of law clause and that by "Hungarian law" their contract was referring to the Hungarian Civil Code.

The arbitral court applied the CISG to the elements of sale (article 1(a)) and the Hungarian Civil Code to the agency elements (article 1(b)).

Case 175: CISG 9(2); 35

Austria: Court of Appeal Graz; 6 R 194/95

9 November 1995

Original in German

Unpublished

The plaintiff, an Italian seller, sold marble slabs labelled "Giallo Veneziano" to the Austrian defendant. The defendant alleged that the marble slabs delivered did not conform to the contract and refused to pay the purchase price (article 35 CISG).

In remanding the case to the court of first instance, the Court of Appeal held that article 9(2) CISG, save a limited number of exceptions, could not be interpreted as barring the application of national or local usage in interpreting a contract even though no mention of such usage was made in the contract itself. Accordingly, a seller who has been engaging in business in a country for many years and has repeatedly concluded contracts of the type involved in the particular trade concerned is obliged to take national usage into consideration.

Case 176: CISG 8(1); 9(1); 41; 54

Austria: Supreme Court; 10 Ob 518/95

6 February 1996

Original in German

Published in German: Zeitschrift für Rechtsvergleichung (ZfRV) [1996] 248

The plaintiff, a German buyer, and the defendant, an Austrian seller, entered into an agreement for the FOB delivery of a certain quantity of propane gas. The parties exchanged communications by facsimile and telephone on the terms of their agreement, including the method of payment (letter of credit). The buyer, however, did not obtain a letter of credit since an essential element was missing, i.e. the seller failed to name the port of origin. In addition, the seller made the delivery of the gas subject to the condition that it was not to be resold in the Benelux countries.

The parties had initially intended to enter into a "basic agreement", which would contain the general conditions of the seller and would constitute the trade usages that would govern the transactions between the parties, but could not reach an agreement. The draft of the "basic agreement" stated that all orders should be in writing. However, the seller could not prove that the "basic agreement" nor the general conditions had been made known to the buyer.

The court found that the parties could be bound by any trade practices or usage established between themselves (article 9(1) CISG). In such instances, article 9(1) CISG must be interpreted in the light of article 8(1) CISG to the effect that a party must have known of the intent of the other party.

As regards the letter of credit, the court found that under article 54 CISG the buyer would be under an obligation to obtain a letter of credit. However, the court held that the buyer did not violate such an obligation since the seller failed to provide the necessary details and the buyer was under no obligation to obtain a "blank" letter of credit.

With respect to the conditional delivery of the propane gas, the court held that, if delivery of the goods is made, after the formation of the contract, subject to a limitation of export destinations, such a limitation must be regarded as a violation of the duty of the seller under article 41 CISG.

Case 187: CISG 14(1); 61(3); 63

United States: Federal District Court, Southern District of New York

23 July 1997

Helen Kaminski Pty. Ltd. v. Marketing Australian Products, Inc. doing business as Fiona Waterstreet Hats

Published in English in U.S. Dist. LEXIS 10630 [1997] and WL 414137 [1997]

An Australian manufacturer of fashion accessories entered into a "Distribution Agreement" with a U.S. distributor. The Agreement specified the terms on which the parties would do business, including methods of payment, delivery and warranties as to quality (article 14(1) CISG). The distributor agreed to purchase accessories totalling a specified amount during the year following the conclusion of the Agreement. Soon after entering into the Agreement, the parties amended it to transfer the manufacturer's accessories that were already in the United States to the distributor.

The distributor subsequently ordered additional accessories and the manufacturer sent notice that the accessories were ready for shipment. The distributor failed, however, to open a letter of credit before shipment as provided in the Distribution Agreement. The manufacturer thereupon sent notices to the distributor demanding that the distributor cure its default within a specified time (article 63 CISG). Before the time to cure expired, the distributor filed for bankruptcy in the United States. The bankruptcy court granted the distributor additional time to cure and ruled that the manufacturer was stayed from suing in an Australian court.

On appeal to the Federal District Court, the manufacturer argued that the CISG superseded the U.S. Bankruptcy Code and that consequently the bankruptcy court was not authorized to grant the distributor a "period of grace"(article 61(3) CISG). The Federal District Court affirmed the bankruptcy court's order, holding that the Distribution Agreement did not fall within the ambit of the CISG because the Agreement did not cover the subsequently-ordered accessories. Although the Agreement had been amended to cover some specified goods, the amended Agreement did not refer specifically to the accessories in dispute.

Case 188: CISG 99(2); 100(2)

Spain: Tribunal Supremo

3 March 1997

Original in Spanish

Published in Spanish in La Ley 9 [7 April 1997]

Prior to 1990, a Spanish company, the seller, concluded with a USA company, the buyer, successive FOB contracts for the sale of lemons.

As a consequence of the breach by the buyer of its duty to pay the purchase price agreed upon, the seller made a series of joint claims for the unpaid amounts against the buyer and the sea carrier, which had been charged with the transportation of the goods.

The court noted that the CISG did not become part of Spanish law until after the dispute arose between the parties. Accordingly and in view of the interpretation of articles 99(2) and 100 (2) CISG, the court held that the CISG was not applicable to the dispute, which arose from a contract for the sale of goods concluded prior to the entry into force of the CISG in Spain.

Case 189: CISG 8(2); 14(1); 19(2)(3)

Austria: Oberster Gerichtshof; 2 Ob 58/97m

20 March 1997

Original in German

Published in German in Juristische Blätter 592[1997] and in Österreichische Juristenzeitung 829[1997]

The plaintiff, a company, with its place of business in Russia, ordered from the defendant, a company with its place of business in Austria, 10,000 tons +/- 10% of monoammoniumphosphate (MAP) with the specification "P 205 52%+/- 1%, min 51%". However, the seller accepted instead to deliver 10,000 tons +/- 5% MAP with the specification "P 205 52%+/- 5%, min 51%".

The court of first instance held that the negotiations between the parties had not led to a valid contract. The court of appeal vacated that decision and remanded the case to the court of first instance.

The defendant appealed against the decision of the court of appeal to the supreme court, which held that the findings of fact of the court of first instance were incomplete. The specification by the seller appeared to be contradictory since "52% +/- 5%" described a range from 47% to 57%, whilst that range was restricted in the seller's offer to a minimum of 51%. Therefore, the supreme court stated that the court of first instance should have clarified whether, in the light of article 8(2) CISG, for a "reasonable person of the same kind as the other party ... in the same circumstances" the reply to the offer could be regarded as sufficiently definite pursuant to article14(1) CISG. If the offer could be regarded as sufficiently definite, the court of first instance should have decided whether the reply altered the terms of the offer materially. The supreme court also held that the alterations listed in article 19(3) CISG are not to be considered as altering the terms of the offer "materially" in the sense of article 19(2) CISG if, in the light of usages, the negotiations and the very circumstances of the case, they are not deemed essential. In particular, it was held that alterations merely in favour of the other party do not require an express acceptance.

Accordingly, the supreme court, in remanding the case to the court of first instance, stated that the court should make the relevant findings and then decide whether the alterations were to be considered material and if the alteration with regard to the quantity was merely in favour of the buyer.

Case 190: CISG 2(a)

Austria: Oberster Gerichtshof; 10 Ob 1506/94

11 February 1997

Original in German

Unpublished

The defendant, an Austrian seller of imported Italian cars, sold a Lamborghini Countach to the plaintiff, a Swiss buyer. The seller, however, could not deliver the car to the buyer.

The court held that since the car was purchased for personal use, in accordance with its article 2(a), the CISG was not applicable to the case. Nevertheless, the court stated that the CISG could have been applied to the case if the fact that the seller "neither knew nor ought to have known that the goods were bought for any such use" had been proved by the seller.

Case 191: CISG 66; 67

Argentina: Cámara Nacional de Apelaciones en lo Comercial, Sala C

31 October 1995

Bedial, S.A., v. Paul Müggenburg and Co. GmbH

Original in Spanish

Published in Spanish in El Derecho 4 [21 October 1996]

Commented on in Spanish by Iud in El Derecho 1 [21 October 1996]

Commented on in French by Rosch in Recueil Dalloz, 28^e Cahier, Sommaires commentés 225 [1997]

An Argentinean buyer and a German seller concluded a contract, containing a C & F clause, for the sale of dried mushrooms to be shipped to the buyer. In the course of their transport to Buenos Aires, the goods deteriorated. The buyer sued the seller claiming lack of conformity of the goods.

In accordance with article 67 CISG, the court held that the risk passed to the buyer when the goods were handed over to the first carrier for transmission to the buyer in keeping with the contract of sale. In addition, the court held that the C & F clause obliged the seller to hand over the goods to the carrier and to pay the freight. However, a C & F clause does not affect the passing of the risk. Further, it should be noted that the buyer, pursuant to the C & F clause in the contract of sale, had taken out an insurance policy for transportation risks.

In accordance with article 66, the court held that the buyer, after the passing of the risk, was not discharged from its obligation to pay the purchase price, even in the event of loss or damage to the goods, unless the loss or damage was due to an act or omission of the seller. In this case, the damage to the goods occurred after the passing of the risk to the buyer, who did not adduce that it was owing to an act or omission of the seller. Accordingly, the court dismissed the action.

Case 192: CISG 3(2); 38; 39

Switzerland: Obergericht des Kantons Luzern; 11 95 123/357

8 January 1997

Original in German

Unpublished

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 132 [1997]

The Italian seller of medical supplies sold a quantity of items to his exclusive distributor, the Swiss buyer, who resold the goods to a Swiss hospital. The hospital refused acceptance of the consignment on the ground of lack of conformity. Therefore, the buyer refused to pay the purchase price. The seller sued the buyer and the court of first instance ordered the latter to pay the purchase price.

On appeal, the court upheld that decision. With respect to the issue of the CISG's applicability, the court held that the CISG was applicable and had not been excluded by the parties since a valid choice of law could only be made by the parties if they consciously wanted their relation to be governed by a specific law. In addition, the court held that the CISG would not apply if other elements than those related to the contract of sale were preponderant (article 3(2) CISG). However, the court noted that a single sale of goods pursuant to, for example, an exclusive distribution or franchise contract would be governed by the CISG.

As regards examination of the goods by the buyer for the purpose of determining their conformity with the contract, the court found a period of ten days after delivery to be appropriate (article 38 CISG). As to the notice requirement for lack of conformity, the court held that a "rough average" of one month was also appropriate (article 39 CISG). After a review of international case law, the court stated that there were serious gaps in the construction of the terms "examination of the goods" and "notice of lack of conformity", with the extremely restrictive German case law, on the one hand, and the more liberal American and Dutch case law, on the other. The court observed that the gap between these two positions had to be narrowed.

The court held that the buyer had lost its rights on account of having notified the seller about the lack of conformity of the goods more than three months after their delivery.

Case 193: CISG 18(1)(2)(3); 74; 78

Switzerland: Handelsgericht des Kantons Zürich; HG 940513

10 July 1996

Original in German

Unpublished

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 129 [1997]

A dispute arose concerning the purchase price for a consignment of printed chips between the plaintiff, a German seller of plastic parts, and a Swiss buyer, one of three defendants. Although the initial purchase price had been agreed upon, the seller, realizing that production would be more costly, notified the buyer that the purchase price would be increased. The buyer ignored the notification and denied any agreement modifying the initial purchase price. The seller sued the buyer requesting payment of the increased purchase price.

The court held that an agreement between the parties had been reached for the initial purchase price. The seller's notification to the buyer of the increase in the purchase price was, in the court's view, an offer to modify the original contract to which the buyer had not expressed any explicit consent. Mere silence or inactivity does not amount to acceptance (article 18(1)(2) CISG), unless other conduct of the offeree exists indicating consent or the offeree performs an act (articles 18(1) and 18(3) CISG). As the buyer had not expressed an implicit consent, the court found, therefore, that the modification of the purchase price had not been accepted and that the initial purchase price agreed upon was still valid.

As regards interest, the court determined the interest rate under the law designated by the relevant choice-of-law rule (articles 74 and 78 CISG). Accordingly, the court applied the German law at the seller's place of business (Section 352(1) of the Handelsgesetzbuch). Inasmuch as the seller had to obtain a loan owing to the buyer's refusal to pay the purchase price, the seller was awarded the higher interest rate of 9 percent, which had to paid on the loan.

Case 194: CISG 57(1); 58(1)(2)

Switzerland: Bundesgericht

18 January 1996

Original in German

Published in German in Arrêts du Tribunal fédéral (ATF) 122 III 43

Commented on in French by Witz in Recueil Dalloz, 28^e Cahier, Sommaires commentés 224 [1997]

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 53 [1996] and in Aktuelle Juristische Praxis (AJP) 1050 [1996]

The federal court had to decide in this case if the Zürich Court of Commerce had jurisdiction to adjudicate a lawsuit between a Swiss seller of a waste gas cleaning installation and an Italian buyer.

The plaintiff began the lawsuit in Zürich based on article 5(1) of the Lugano Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters, according to which, in matters relating to a contract, a person may be sued in the courts of the place of performance of the obligation concerned. The Zürich Court of Commerce affirmed its jurisdiction.

On appeal, the federal court found that the purchase price as the obligation in controversy

was governed by the CISG. The purchase price had to be paid at the seller's place of business (article 57(1)(a) CISG). If, however, payment was to be made against the delivery of the goods or of documents, the seller must be paid at the place where the delivery occurs (article 57(1)(b) CISG). In the present case, the federal court had to determine whether article 57(1)(b) CISG was applicable.

The federal court construed the words of article 57(1)(b) CISG "if the payment is to be made against the handing over of the goods" in the light of article 58(1)(2) CISG, pursuant to which the seller may make such payment a condition for delivering the goods or documents.

The federal court held that the present case did not fall within the ambit of article 57(1)(b) CISG. Thus, payment had to be made at the seller's place of business at Zürich. Consequently, the Zürich Court of Commerce had jurisdiction under article 5(1) of the Lugano Convention.

Case 195: CISG 74; 78

Switzerland: Handelsgericht des Kantons Zürich; HG 930476

21 September 1995

Original in German

Unpublished

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 53 [1996]

The Austrian producer of air conditioning and heating equipment sued the Swiss buyer for the purchase price and damages, including interest.

The court ruled in favour of the plaintiff. With respect to damages, the court explained that the plaintiff could ask for higher damages than those under the applicable law by proving that it was paying a higher rate of interest (article 74 CISG).

As regards interest, the court found that article 78 CISG was applicable. However, as article 78 CISG does not address the question of the applicable rate of interest, the court applied Austrian law in determining the rate of interest.

Case 196: CISG 3(2); 39; 49(1); 49(2)(b)(i); 74

Switzerland: Handelsgericht des Kantons Zürich; HG 920670

26 April 1995

Original in German

Unpublished

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 51 [1996]

The Swiss plaintiff sold a "floating centre", a container filled with salt water for weightless floating, to the German defendant for an agreed upon price. The buyer alleged

that the container leaked and as a result its house was damaged by water. Therefore, the buyer

declared the contract avoided (article 49 (1)CISG) and refused to pay the outstanding balance. When the seller sued the buyer for the outstanding balance, the buyer filed a cross-claim seeking damages.

The court found that an agreement existed between the parties for a sale of goods with the attendant obligation to install the container. The court also found that the CISG was applicable since the services to be provided, i.e., the installation of the container, were not preponderant (article 3(2) CISG).

The court ruled in favour of the plaintiff. It was held that the buyer had lost its right to declare the contract avoided under article 49 CISG since the buyer had failed to notify the seller about the lack of conformity of the goods in a timely fashion (articles 39 and 49(2)(b)(i) CISG).

The court also mentioned that the seller's failure to perform its obligation was probably not a fundamental breach as the damage concerned was easily repairable. However, since the buyer had lost its right under article 49(2)(b)(i) CISG, the court did not address this question fully.

As regards damages, the court found that the buyer had lost its rights for failure to claim damages for the leak within a reasonable time. Compensation for damages caused by the transport of the container was denied by the court because the buyer failed to prove them sufficiently

(article 74 CISG).

Case 197: CISG 7(2); 58; 59; 78: 100

Switzerland: Tribunal cantonal du Valais

20 December 1994

Original in French

Published in French in 29 Revue valaisanne de jurisprudence (RVJ) 164 [1995]

The plaintiff, an Italian seller of natural and artificial stones, sued the defendant, a Swiss buyer, for the purchase price. The defendant neither contested delivery of the goods nor claimed lack of conformity of the goods.

The court found the CISG applicable (article 100 CISG). The court held that the defendant had to pay the purchase price on the date fixed or determined by the contract (article 59 CISG). In this connection, the court stated that article 58 CISG presupposed that payment was to be effected when the seller placed the goods at the buyer's disposal.

As regards the interest requested by the plaintiff (article 78 CISG), the court held that the interest rate was to be determined pursuant to the law applicable under the choice-of-law rules of the forum (article 7(2) CISG). In accordance with Italian law, the plaintiff was awarded interest in the amount requested.

Case 198: CISG 1(1)(b); 100

Switzerland: Tribunal cantonal du Valais

21 October 1994

Original in French

Published in French in 28 Revue valaisanne de jurisprudence (RVJ) 312 [1994]

Commented on in French by Vouilloz in 28 Revue valaisanne de jurisprudence (RVJ) 337 [1994]

The defendants, two Swiss sellers of computer software, attached the Swiss bank accounts of the plaintiff, a French buyer, and asked for specific performance of the sale of software contract, which had been declared avoided by the plaintiff.

The court ruled under Swiss law in favour of the defendants. The court, deciding on the issue of jurisdiction, held that the CISG was not applicable in Switzerland. The CISG had entered into force in Switzerland on 1 March 1991 and the contract for the sale of the software was concluded on 21 September 1990. Pursuant to its article 100, the CISG applies only when the proposal for concluding the contract is made on or after the date when the CISG enters into force in the Contracting States. In addition, the CISG was neither applicable under article 1(1)(b) CISG, since the relevant Swiss choice-of-law rule designated Swiss law at the place of the seller as the applicable law.

Case 199: CISG 1(1)(a); 2; 6

Switzerland: Tribunal cantonal du Valais

29 June 1994

Original in German

Published in French in 28 Revue valaisanne de jurisprudence (RVJ) 125 [1994]

The plaintiff, an Italian seller of furniture, sued the defendant, a Swiss buyer, for the purchase price. The issue to be determined by the court was whether it had jurisdiction and whether the CISG was applicable.

The court affirmed the applicability of the CISG finding that the parties had their places of business in different Contracting States (article 1(1)(a) CISG). The court further held that

the CISG was applicable autonomously and not as the domestic law of the State designated by the forum's choice-of-law rules. Consequently, the court determined that it had jurisdiction.

Case 200: CISG 87; 88

Switzerland: Tribunal cantonal de Vaud; 01 93 1308

17 May 1994

Original in French

Unpublished

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 278 [1995]

The Swiss plaintiff, buyer, concluded a contract with the German defendant, seller, for the purchase of a machine. The buyer paid two installments of the purchase price, but refused to pay

the balance. Therefore, the seller did not deliver the base of the machine, a part without which the machine was worthless to the buyer. The seller threatened to sell the machine part to someone else if the buyer did not pay the balance.

Consequently, the buyer made an application to the court seeking a preliminary injunction prohibiting the seller from selling the machine part. In a counter-claim, the seller applied to the court for either permission to sell immediately the machine part based on article 88 CISG or, alternatively, for permission to store it at the buyer's expense pursuant to article 87 CISG.

The court stated that, when deciding on interim measures, it had to limit itself to a cursory examination of the merits of the case. Therefore, the question of determining whether the claims were justified or not was not decided on the basis of the CISG but rather in accordance with the Swiss lex fori. The court did not touch upon whether the CISG was applicable to the merits of the case. The court granted the buyer's application for a preliminary injunction and also permitted the seller to store the machine part, albeit at his own expense.

Case 201: CISG 1(1)(b); 3

Switzerland: Richteramt Laufen des Kantons Berne

7 May 1993

Original in German

Unpublished

Abstract published in German in Schweizerische Zeitschrift für Internationales und Europäisches Recht 277 [1995]; in Italian in 70 Diritto Commerciale Internationale 451 [1995];

in English in UNILEX, D.93-15 [1995/II]

The Finnish plaintiff, a producer of automatic storage systems, concluded, with a Swiss defendant, a metal-works company, a number of agreements, such as a non-disclosure agreement, a licence agreement and various contracts, for the supply of goods to be manufactured on or after 1988. In 1992, the plaintiff sued the defendant for the outstanding balance of the purchase price on several of those agreements.

The court found that the parties had entered into contracts for the supply of goods to be manufactured and thus they were to be considered sales under article 3(1) CISG since, although the plaintiff had to furnish a number of different services, these obligations were not preponderant (article 3(2) CISG). Therefore, the court held that the Convention was applicable pursuant to article 1(1)(b) CISG. However, the court stated that, according to Swiss procedural law, it did not have subject-matter jurisdiction and, therefore, dismissed the claim.

In October 1992, a French importer, Mr. Caiato, placed two orders with the Italian Company Invernizzi to make deliveries to one of its clients. After receiving the orders, Invernizzi informed Caiato that it was not able to execute the orders unless Caiato obtained the clearance of the Ifitalia company, the manufacturing company to which it had assigned its receivables. On the ground of non-performance of the contract, Caiato refused to pay a number of invoices and terminated business dealings.

The French factoring company, a successive assignee of Ifitalia, brought an action against Caiato before the Commercial Court of Grenoble, which ordered Caiato to pay his disputed debts. Caiato lodged an appeal, invoking a number of debts which he claimed to be owed by Invernizzi.

The Grenoble Court of Appeal applied article 1(1)(a) CISG in order to determine the law applicable, the buyer and the seller being domiciled in different States parties to CISG.

The Court of Appeal found that it was incontestable, given the dealings carried on between the parties for a number of months, that Invernizzi knew that the goods were destined for the French market and that this knowledge obliged it, as provided by article 8(1) CISG, to comply with the marketing regulations in force in France. The Court considered that the failure to mark the composition of the goods on the packaging rendered them non-conforming within the meaning of article 35 CISG. In addition, the Court found that Caiato had observed the "reasonable time-limit" within the meaning of article 39(1) CISG, the buyer's complaint having been made within the month following the delivery. The Court also ruled that Invernizzi had been supplying Caiato for a long time without showing any concern for his solvency and by virtue of article 9 CISG, found Invernizzi liable for abrupt discontinuance of business relations between parties bound by long-standing practices.

Case 203: CISG 1(1)(a); 18(1); 18(2); 18(3); 19(1); 19(2); 35(1); 35(2)(a)

France: Court of Appeal of Paris

13 December 1995

Société Isea industrie SPA et al. v. SA Lu et al.

Original in French

Published in French: Semaine Juridique [1997], Ed. G, II, No. 22772; CISG-France http://www.jura.uni-sb.de/FB/LS/Witz/131295.htm

Commented on in French: de Vareilles-Sommières, Semaine Juridique [1997], Ed. G, II, No. 22772

A French company placed an order with an Italian company for outer wrappings of packets of biscuits. The order form of the French company, which carried on its reverse side a jurisdiction clause in favour of the Commercial Court of Paris, was sent back by the Italian company with its representative's signature. Ten days later, the Italian company confirmed the order, referring to its sales conditions, which included a jurisdiction clause in favour of the Court of Tortona.

Considering the wrappings sold to be defective, the French buyer sued its seller before the Commercial Court of Paris. Having raised a plea asserting lack of jurisdiction, the seller lodged an objection, invoking articles 18 and 19(2) CISG, but the Court of Appeal of Paris ruled to retain its jurisdiction.

In order to determine its jurisdiction, the Court of Appeal of Paris found that CISG was applicable since the sales contract had been concluded between two contracting parties with their places of business in two different States parties to CISG (article 1(1)(a)).

The Court noted that, in conformity with article 18(2) CISG, the contract had been formed at the moment the French company received the order form. It considered, however, that in the absence of an explicit reference on the front side of the form to the sales conditions indicated on the reverse side, the seller could not be deemed to have accepted those conditions. The Court of Appeal of Paris likewise rejected the applicability of the general sales conditions of the Italian company on the ground that the confirmation of the order, which was subsequent to the formation of the contract, was to be interpreted as a counter-offer within the meaning of article 19(1) CISG and was rendered absolutely inapplicable by the lack of acceptance by the buyer.

Referring to articles 35(1) and 35(2)(a) CISG, the Court concluded that these provisions linked the delivery and conformity of the goods with their use in such a way that the corresponding obligations were performed or were to be performed in the same place. The Court consequently found that, since the goods had been delivered on the premises of the French company located in Lorient, the dispute came under the jurisdiction of the Commercial Court of Lorient.

Case 204: CISG 1(1)(a); 35(2)(a); 36(1)

France: Court of Appeal of Grenoble (Commercial Division)

15 May 1996

Société Thermo King v. Société Cigna France et al.

Original in French

Published in French: CISG-France http://www.jura.uni-sb.de/FB/LS/Witz/150596.htm

Commented on in French: Witz, Recueil Dalloz [1997] 27ème Cahier, Sommaires commentés, 221

The company Sorhofroid, a franchised import dealer of the American company Thermo King, sold to the company Frappa a refrigeration unit, which was subsequently resold to the company Transports Norbert Dentressangle. The latter loaded goods to be delivered to the company Système U, which refused them because they had thawed.

Having before it an appeal lodged by the company Thermo King against the ruling of the Commercial Court, whereby liability for the damage due to thawing had been shared between Thermo King and Transports Norbert Dentressangle, the Court of Appeal allowed the action brought directly by the sub-purchaser against the initial seller.

The applicable-law clause in the contract (Minnesota law) and the arbitration clause contained in the initial contract between Thermo King and Sorhofroid, both of which clauses had been invoked by Thermo King, were found by the Court to be inapplicable to the sub-purchaser, which was not party to the initial contract. The Court ruled, moreover, that only the franchise contract and not sales made in application of that contract should be subject to the Minnesota law chosen by the parties. In addition, the Court stressed that CISG was applicable, unless otherwise agreed, to sales concluded after 1 January 1988 between a seller and a buyer with their places of business in the United States and France, respectively. The Court found that the sub-purchaser could base his action against the American seller on CISG, since the seller had issued a contractual guarantee in favour of the end-user.

The Court found articles 35(2)(a) and 36 CISG to be applicable with regard to the defects of the refrigeration unit, noting that the unit had broken down within a short period of time after it was first operated and that it was up to the seller, presumed liable, to prove that it was not responsible for the defect. Notwithstanding any more precise determination of the defect, the early breakdown established the Court's finding of lack of conformity and its assigning of full liability to Thermo King.

Case 205: CISG 1(1)(b); 57(1)

France: Court of Appeal of Grenoble (Commercial Division)

23 October 1996

SCEA des Beauches v. Société Teso Ten Elsen GmbH & CoKG

Original in French

Published in French: Revue critique de droit international privé [1997] 756; CISG-France http://www.jura.uni-sb.de/FB/LS/Witz/231096.htm

Commented on in French: Sinay-Cytermann, Revue critique de droit international privé [1997] 762

In May 1990, a French company ordered equipment and plant from a German company. The latter confirmed the order on the basis of its general terms indicated on the reverse side of the order form. After delivery and payment of the price, the French company demanded restitution of part of the price paid, because it considered that the amounts paid exceed the invoiced amount.

Its demand for reimbursement having been refused, the French company brought an action against its seller before Valence Commercial Court. Following dismissal of the action, it lodged an appeal before the Court of Appeal of Grenoble.

The Court of Appeal dismissed the jurisdiction clause on the ground that it had not been drawn up within the meaning of Article 17 of the Brussels Convention. The Court of Appeal ruled on the question of applicable law and sought to ascertain whether the French court could be deemed competent under article 5(1) of the Brussels Convention, which provided for special jurisdiction in contractual matters in favour of the court of the place where the obligation giving rise to the action had been or was to be performed. In order to determine this place, the Court of Appeal of Grenoble stated that jurisdictional competence must be assessed in the light of the provisions of the Vienna Convention, applicable in the case in point by virtue of Article 1(1)(b) CISG, French law being indicated by the provisions of private international law (Hague Convention of 15 June 1955 on the Law applicable to International Sales of Goods, art. 3(2)).

The Court of Appeal stated that the Vienna Convention established the place of payment of the price as the seller's place of business (art. 57(1)); and that the usual interpretation of this provision was that it expressed the general principle that payment should be made at the place of domicile of the creditor. The Court therefore concluded that the Valence Court was competent by combined application of CISG and article 5(1) of the Brussels Convention.

Case 206: CISG 6; 35(2)(a)

France: Court of Cassation (Commercial Division)

17 December 1996

Société Céramique culinaire de France v. Société Musgrave Ltd.

Original in French: Recueil Dalloz [1997] 337; Revue critique de droit international privé [1997] 72; CISG-France http://www.jura.uni-sb.de/FB/LS/Witz/171296.htm

Commented on in French: Witz, Recueil Dalloz [1997] 337; and Rémery, Revue critique de droit international privé [1997] 72

The seller, a company with its place of business in France, concluded in 1991 a contract with an Irish buyer for the sale of ceramic ovenware. The contract contained an applicable-law clause in favour of French law. Several months after the delivery, the Irish company informed the seller that the ovenware was insufficiently ovenproof. After unsuccessfully seeking an amicable agreement, the Irish buyer brought an action against the French company to avoid the sales contract for breach of the obligation to deliver goods in conformity with the contract, and claimed damages.

Following dismissal of its action by the Court of First Instance of Strasbourg, the seller lodged an appeal invoking CISG. The Court of Appeal of Colmar, however, rejected the applicability of CISG on the ground that, while the sales contract was indeed international in character, it must nonetheless be subject to French law, which had been expressly chosen by the parties for settling any dispute concerning them, and not to the Vienna Convention, as invoked by the Irish company. The Court noted that, as far as applicable law was concerned, the said Convention was waivable at the will of the parties, as expressly indicated in its article 6. Situating itself, in its reasons, in the context of the guarantee provided by French domestic law against hidden defects, and, in its operative words, in that of breach of the obligation to deliver, the Court of Appeal ordered the sale to be avoided.

When an appeal was brought against this judgement by the seller, the Court of Cassation quashed the decision delivered by the Colmar court on the sole ground that it lacked a sufficient legal basis in the light of French national law, there having been no criticism by the appellant of the non-application of CISG by the Court of Appeal. The Court of Cassation nevertheless expressed reservations regarding the dismissal of CISG by the lower court.

Moreover, referring to article 35(2)(a) CISG, the Court of Cassation considered that, while the unfitness of the sold article for its intended use represented a lack of conformity to the contract within the general meaning given to those terms by the provisions of the Vienna Convention, it now constituted, following the rejection of that convention's applicability, the hidden defect referred to in article 1641 of the Civil Code and was distinct from the failure on the part of the seller to comply with its obligation to deliver goods in conformity with those agreed.

Case 207: CISG 31

France: Court of Cassation (1st Civil Division)

2 December 1997

Société Mode jeune diffusion v. Société Maglificio il Falco di Tiziana Goti e Fabio Goti et al.

Original in French

Published in French: CISG-France http://www.jura.uni-sb.de/FB/LS/Witz/021297.htm

The seller, a company with its place of business in Italy, delivered goods to a French buyer in 1992. The buyer's order form contained a jurisdiction clause in favour of the Commercial Court of Roubaix-Tourcoing in France. However, the invoices sent by the Italian company to the French party to the contract referred to the jurisdiction of the Commercial Court of Prato in Italy.