Spain 26 September 2005 Appellate Court Palencia (Printing machine case)
[Cite as: http://cisgw3.law.pace.edu/cases/050926s4.html]
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: 227/2005
CASE NAME:
CASE HISTORY: 1st instance Juzgado de Primera Instancia No. 4 de Palencia 15 May 2002
SELLER'S COUNTRY: United States (defendant)
BUYER'S COUNTRY: Spain (plaintiff)
GOODS INVOLVED: Printing machine
SPAIN: Audiencia Provincial de Palencia, 26 September 2005
Case law on UNCITRAL texts (CLOUT) abstract no. 732
Reproduced with permission of UNCITRAL
A U.S. seller and a Spanish buyer entered into a contract for the purchase and installation of a printing machine. When the machine did not work properly upon its installation, the seller refused to repair the machine under the existing electric generator, but required the buyer to first put the machine to an electronic connection with a different electric voltage. In July, the cause for the machine defect had not been found yet. The buyer, nevertheless, bought a substitute machine from a Dutch company, as its production phase had started in March, as usual. The machine did not work either with the new electric connection. The buyer sought avoidance of the contract concluded with the U.S. seller and asked for damages, including the costs for the bank transfers to pay the contract price, the costs for the import of the machine, for the new electronic connection, diverse costs for material required by the technicians of the seller in the period of the failed installation of the machine, the costs for the technicians' stay in Spain, the costs of other companies that the buyer had to hire to help fulfil its printing obligations to its clients and the price for the substitute machine less the amount which the buyer received for its resale.
The court of the first instance recognized the avoidance of the contract and granted the buyer all damages sought except for the substitute purchase. Its reasoning was that the purchase had taken place prematurely. Both parties appealed the decision. The buyer claimed that it was entitled to all damages including the costs for the substitute purchase, whereas the defendant claimed that it had fulfilled its obligations under the contract and that the defect of the machine was due to the inadequate place of installation provided by the buyer.
The court of appeals reversed the first decision in so far as it granted the buyer all damages sought. It noted that the first instance had rightfully deemed the CISG as applicable law, as the U.S. and Spain were both contracting States to the CISG [article 1 (1)(a) CISG]. The court then examined whether the seller had fundamentally breached its obligation under the contract by delivering a defective machine pursuant to articles 25, 30 and 35 (1), (2) CISG. The court rejected the allegation of the seller that the machine did not work as it had been installed in an inadequate place. This allegation, according to the court, was not proven. Further, the court found that there was no failure of the buyer under its obligations to take delivery, pursuant to article 60 CISG. Thus, the court noted that the first instance had rightfully declared the contract avoided, which obligated the parties to concurrently make restitution of what they had received from the other party under the contract according to article 81 CISG. The court further noted that the buyer was entitled to damages pursuant to article 45, 74 CISG. The damages should also include the purchase price for the substitute machine less its resale price, because the default of the seller's machine caused the substitute purchase. Though the reason for the machine failure had not been found in July, the court held that the machine did not properly function either at that time or later. As the buyer was already late in fulfilling its printing obligations, the court deemed the substitute purchase reasonable, timely and adequate.
Go to Case Table of ContentsAPPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
25B [Definition of fundamental breach: substantial deprivation of expectation, etc.]; 35A [Conformity of goods to contract: quality, quantity and description required by contract]; 49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract]; 74A [General rules for measuring damages: loss suffered as consequence of breach]; 75A2 [Damages established by substitute transaction: repurchase by aggrieved buyer]
Descriptors:
CITATIONS TO OTHER ABSTRACTS OF DECISION
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1109&step=Abstract>
Spanish: CISG-Spain and Latin America website <http://www.uc3m.es/cisg/respan46.htm>
CITATIONS TO TEXT OF DECISION
Original language (Spanish): CISG-Spain and Latin America website <http://www.uc3m.es/cisg/sespan46.htm>; see also Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1109&step=FullText>; Fuente: Aranzadi Westlaw
Translation: Unavailable
CITATIONS TO COMMENTS ON DECISION
Unavailable
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