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CISG CASE PRESENTATION

Canada 20 September 2002 Court of Queen's Bench of Manitoba (Brown & Root v. Aerotech)
[Cite as: http://cisgw3.law.pace.edu/cases/020920c4.html]

Primary source(s) of information for case presentation: Case text

Case Table of Contents


Case identification

DATE OF DECISION: 20020920 (20 September 2002)

JURISDICTION: Canada

TRIBUNAL: Court of Queen's Bench of Manitoba

JUDGE(S): McKelvey J.

CASE NUMBER/DOCKET NUMBER: CI 96-01-97816

CASE NAME: Brown & Root Services Corp. v. Aerotech Herman Nelson Inc. and Paul Sigurdson; and Kellogg Brown & Root, Inc v. Aerotech Herman Nelson Inc. and Paul R. Sigurdson

CASE HISTORY: 2d instance Court of Apeal of Manitoba 4 May 2004 [affirming]

SELLER'S COUNTRY: Canada (defendant)

BUYER'S COUNTRY: United States (plaintiff)

GOODS INVOLVED: Heaters for military tents


Classification of issues present

APPLICATION OF CISG: Yes, "this sales contract shall be governed by the laws of the State of Texas"

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 35 ; 38 ; 49 ; 74 ; 84(1)

Classification of issues using UNCITRAL classification code numbers:

25A ; 25B [Effect of a fundamental breach: avoidance of contract; Definition: substantial deprivation of expectation, etc.];

35A [Conformity of the goods: quality, quantity and description required by contract];

38A [Buyer's obligation to examine goods];

49A1 ; 49B [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract; Timeliness of avoidance];

74A [General rules for measuring damages: loss suffered as consequence of breach];

84A [Restitution of benefits: seller bound to refund price must pay interest]

Descriptors: Conformity of goods ; Fundamental breach ; Avoidance ; Damages ; Interest

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Editorial remarks

Excerpt from Rajeev Sharma, "The United Nations Convention on Contracts for the International Sale of Goods: The Canadian Experience", Victoria University of Wellington Law Review (2005/4) 852

In 2002, the Court in Brown & Root Services Corp v Aerotech Herman Nelson Inc considered the application of the CISG to a contract for the sale of goods. In this case, Aerotech, a Canadian company, contracted with Brown & Root, an American company, to provide logistical support for the United States military in the Hungary and Bosnia region during "Operation Joint Endeavour" by providing heaters for military tents. Brown & Root alleged that most of the heaters that arrived were faulty and were not in working order. Consequently, Brown & Root brought an action against Aerotech alleging that they had fraudulently misrepresented to them that the heaters would be new, and furthermore, materially misrepresented the nature of the heating equipment and their ability to supply technicians to ensure proper installation. Aerotech counterclaimed for losses it allegedly incurred for the sale of the goods.

The court held that Aerotech was in breach of its agreement with Brown & Root to provide new heaters as specified in the terms and conditions agreed to by the parties. Brown & Root was awarded CAN $1.6 million in compensatory damages and CAN $50,000 in punitive damages. Aerotech argued pursuant to articles 38 and 49 of the CISG that Brown & Root had taken too long to assert a claim of fundamental breach or to repudiate the contract. However, McKelvey J found that Brown & Root repudiated the contract within a reasonable time. Presumably, the Court was of the view that the time from delivery of the goods (22 December 1995) to the time when Brown & Root's legal department formally notified Aerotech of non-performance (6 March 1996) was "within a reasonable amount of time" in accordance with article 49(2)(b) of the CISG. Once again, as in the previous Canadian cases dealing with the CISG, the Court was remarkably silent on the applicability of the CISG provisions and did not provide any meaningful commentary on how it was applying the provisions of the CISG and why. However, total blame cannot be laid at the feet of the Court as it was not clear to what extent counsel provided detailed submissions on the application of the CISG in its pleadings.

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1013&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (English): CISG-Canada website <http://www.osgoode.yorku.ca/cisg/cases/brown-root>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1013&step=FullText>

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

English: Mazzacano, Canadian Jurisprudence and the Uniform Application of the CISG (August 2005) ch. 8

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Pace Law School Institute of International Commercial Law - Last updated February 27, 2006
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