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Date:   23 February 2009
Court:   Harju County Court, Tartu mnt Court House
Local case reference:   2-08-61232/8
CISG Nordic ID:   090223EE
Country of decision:   Estonia
Buyer's country:   Estonia
Seller's country:   USA
Goods involved:   Wood
Case history:   Judgment by the court of first instance, entered into force on 9th of June 2009.
Original language:   Estonian
Provisions cited:   CISG articles 11, 14, 53, 78
Original court document:   Available
Rapporteur:   Aleksandra Vasiljeva, Gea Lepik and the University of Tartu
Case citations:   n/a



by Gea Lepik and the University of Tartu

A US company Saratoga Forest Products, Inc. (the Seller) filed an action against an Estonian company AS UM Components (the Buyer) based on sales contracts concluded on 9 and 31 July 2007 for the sale of wood (the Contracts). The Contracts were based on the Buyer’s orders no. 43344, 34242, 43243 and 43244. The Seller had fulfilled his obligation to deliver wood under the Contracts and had issued to the Buyer three invoices for the purchase price. The Buyer only paid part of the purchase price, leaving 317 145.95 USD unpaid. In his action the Seller demanded from the Buyer payment of the outstanding purchase price and interest for late payment.
The Buyer did not accept the claims. According to the Buyer, RR who had signed all orders on behalf of the Buyer, was not authorized to represent the Buyer as he was not a member of the management board at the time of placing the orders. In addition, order no. 43344 was not signed by the Seller and thus the respective sales contract was not duly concluded. Since there was no contract, the Seller had no contractual claims arising from order no. 43344.
Concerning the first issue, the Harju County Court (the Court) applied the Estonian General Part of the Civil Code Act 2002 and concluded that RR had been authorized by the Buyer to conclude the relevant sales Contracts with the Seller in the name and account of the Buyer. The Court also dismissed the second defense of the Buyer by finding that the contract of sale pursuant to the order no. 43344 had been concluded, irrespective of the fact that the order was not signed by the Seller. The Court referred to Art 11 of the CISG pursuant to which a contract of sale need not be concluded or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses. Relying on a witness statement, the Court established that the Seller had sent to the Buyer (to RR) an order which contained all the relevant information required under Art 14 (1) of the CISG and which thus constituted an offer. By sending the order back to the Seller, the Buyer had accepted the offer.

After having established that the Contracts were duly concluded the Court proceeded to evaluate the Seller’s claims arising from the Buyer’s non-performance. The Court established that the Buyer had fulfilled its obligation under Art 53 of the CISG to take delivery of the goods but had failed to pay the purchase price. Thus, the Court found the Seller’s claim for the purchase price in the amount of 317 145.95 USD justified. The Seller’s claim for interest for late payment was also satisfied. Pursuant to Art 78 of the CISG if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it. As Art 78 does not clarify how the amount of interest should be calculated, the Court found that the national law applicable to the Contracts must be applied. In the present case the Court found Estonian law to be applicable to the Contracts and ordered the Buyer to pay interest for late payment in the amount of 31 112 USD by referring to ยงยง 113 and 94 of the Estonian Law of Obligations Act 2002.


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