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Date:   25 July 2006
Court:   The Court of Zemgale area of Riga city
Local case reference:   C-0443-06
CISG Nordic ID:   060725LV
Country of decision:   Latvia
Buyer's country:   Germany
Seller's country:   Latvia
Goods involved:   Clothing and footwear
Case history:   n/a
Original language:   Latvian
Provisions cited:   CISG articles 8, 29
Original court document:   n/a
Rapporteur:   Aleksandrs Potaičuks
Case citations:   n/a



by Aleksandrs Potaičuks

The Seller (German company) and the Buyer (Latvian company) concluded a contract for the delivery of autumn-winter collection of clothing and footwear with a total value of € 75,000 by 31 December 2004. The contract was concluded on 10 May 10 2004. According to the Contract, the Seller was obliged to deliver the goods within 14 days after the payment of the purchase price.

The Buyer paid the purchase price thus ordering goods with a total value of € 65,000, but the Seller delivered the goods with a total value of € 56,309.  

The Seller sued the Buyer for recovery of the debt, refund of the purchase price, and the lawful interest on it. However, the Court did not satisfy the Buyer’s claim.

In the case, the Court examined,
1) which party according to the Contract was responsible for the conveyance of the goods;
2) if the Contract was extended;
3) if the Buyer’s payment performed on 2 February 2005 relates to the Contract;
4) if the Seller performed his obligation;
5) if the Buyer had the right to refund the purchase price.

The Court found that the contracting parties had not agreed as to what laws their mutual relations should be adjudged, nor did they point at any other law. Therefore the Court decided to apply the laws and other regulatory enactments, international agreements binding upon the Republic of Latvia and the legal norms of the European Union according to the Article 5 of Civil Procedure Law of Latvia.

The Court agreed with the Buyer’s opinion that the term “conveyance” meant the action of transporting something from one place to another and considered that if doubt arises regarding the meaning of words, the intent of the parties must be determined. In determining the intent of a party, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties (Article 8 (3) of CISG).

The Court agreed that the evidence showed that the Buyer was responsible of conveyance of the goods. Moreover, the evidence proved that the Seller sent a reminder to the Buyer, that the goods were situated in the Seller’s warehouse ready to be taken.

According to the contract, the contract could be extended by mutual agreement in written form. According to the law, a contract must be set out in written form either as required by law, or pursuant to the voluntary agreement of the participants (Article 1482 of the Civil Law of Latvia). A contract in writing which contains a provision requiring any modification or termination by agreement to be in writing may not be otherwise modified or terminated by agreement (Article 29 (2) of the CISG). Thus the Court concluded that the contract between parties was not extended and therefore the payment performed on 10 February 2005 does not relate to the contract (the Contract was valid until December 31, 2004).

The Court did not find that the Seller had breached his obligations.

The Court concluded that the Buyer’s claim to have the purchase price refunded could be brought only in connection with the termination of the contract. There is no evidence in the case that the parties agreed to terminate the contract, nor did the Buyer bring an action for the termination of the contract. Therefore, the Court did not have a reason to decide if the Buyer had the right to a refund of the purchase price.


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