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Date:   12 November 1997
Court:   Turku Court of Appeal
Local case reference:   n/a
CISG Nordic ID:   971112FI
Country of decision:   Finland
Buyer's country:   Finland
Seller's country:   Spain
Goods involved:   Canned Foods
Case history:   1st instance: 17 January 1997, District Court of Tempere
Original language:   Finnish
Provisions cited:   CISG articles 38, 39, 48, 50
Original court document:   n/a
Rapporteur:   Thomas Neumann
Case citations:   n/a

 

Commentary

CISG AC Opinion 2: Examination of the Goods and Notice of Non-Conformity Articles 38 and 39 in appendix.

 

Abstract

by Neumann, Thomas

The court of appeal affirmed the decision of the district court in a case concerning a sale of canned food where the seller had not delivered food of the best quality. Foreign elements, e.g. stones and cigarette butt, were found in the cans. The district court ruled that the buyer had given notice within reasonable time when considering the nature of the non-conformity. The court awarded a price reduction of 30%. The court also awarded damages followign from loss of customers and extra effort needed to gain new ones.

 

Translated text

by Vanto, Jarno. Reproduced with permission from Pace Law School

 

Turku Court of Appeal 12 November 1997

PARTIES AND CLAIMS

JHPH SA, Spain [seller]. F Oy, Finland (buyer). Goods: canned food. Issue: Price reduction, etc.

[Seller] has stated in its appeal, that [buyer]'s claim should be dismissed and that [buyer] be made to compensate for [seller]'s legal fees both in the Court of First Instance and in the Court of Appeals. Furthermore, [seller] has requested, that the Court of Appeals carry out an oral hearing with the representatives of [buyer]'s clients as witnesses.

[Buyer] has repeated its claim that it presented in the Court of First Instance insofar as its claim was denied in that instance and has demanded compensation for its legal fees.

REASONING OF THE COURT OF APPEALS

- Examination of the goods and notice of lack of conformity

According to CISG Article 38(1), which is applicable in the case, the buyer must examine the goods or cause them to be examined within as short a period as possible as is practicable in the circumstances. Considering the type of the goods sold (canned food), [buyer] has not had the opportunity to examine the goods and detect the non-conformity.

According to CISG Article 39(1), the buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.

The invoices concerning the goods subject to the dispute were sent on 5 May 1995 and on 10 October 1995.

According to the witnesses heard in the Court of First Instance and the written statements submitted to that Court, it is apparent that consumers and retailers begun complaining about the Diamante products during the fall of 1995 and complaints kept coming in throughout the spring of 1996.

A copy of the fax message, dated 29 November 1995 from the CEO of [buyer] sent to the counsel of [seller] was submitted to the Court of First Instance. The message informs [seller] about the non-conformities of the goods.

Considering these circumstances and the grounds of the ruling of the Court of First Instance, the Court of Appeals holds, that [buyer] has given notice to the seller in the manner required by the law.

- Buyer's right to price reduction

[Seller] alleges that [buyer] is not entitled to price reduction because [buyer] has not given the [seller] an opportunity to remedy the alleged non-conformity of the goods.

CISG Article 48 defines the right of the seller to remedy a non-conformity of the goods after the date of delivery. According to article 48(4), a request or notice concerning seller's cure of a non-conformity is not effective unless received by the buyer. [Seller] has not even alleged that it would have afforded [buyer] an opportunity to have the non-conformities remedied by [seller]. [Seller] is still standing by its statement that the goods conformed to the contract.

Under these circumstances, [buyer] has not lost its right to price reduction.

- Amount of the price reduction

Article 50 of the CISG provides that if the goods do not conform with the contract, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value of the conforming goods. Consequently, the buyer has the right to reduce the price in proportion to the non-conformity of the goods. The buyer has the burden of proof with regard to the extent of the non-conformity of the goods and the amount of non-conforming goods.

Due to the above mentioned grounds and due to the grounds mentioned in the ruling of the Court of First Instance, the Court of Appeals has resolved the matter in a manner stated in the ruling below.

THE RULING

[Seller] is required to pay a price reduction of 1,226,475.50 Spanish Pesetas with regard to the first claim and 1,974,866.30 Spanish Pesetas with regard to the second claim. Consequently, [seller] has to pay [buyer] a sum total of 15,201,341.80 Spanish Pesetas as damages and price reduction, added with interest on all sums in arrears as stated in the ruling of the Court of First Instance.

 

Original text

n/a

 

 

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