Republic of Korea 23 July 2009 Seoul High Court (Duck feathers case)
[Cite as: http://cisgw3.law.pace.edu/cases/090723k3.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 2008Na14857
CASE HISTORY: 1st instance Seoul Eastern District Court [2006Gahap6384]
SELLER'S COUNTRY: China
BUYER'S COUNTRY: Korea
GOODS INVOLVED: Duck feathers
KOREA: Seoul High Court 23 July 2009
Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/134],
CLOUT abstract no. 1281
Reproduced with permission of UNCITRAL
The plaintiff, a Chinese company, concluded a sales contract with the defendant, a Korean company, under which the plaintiff agreed to deliver duck feathers to the defendant in multiple shipments. The defendant was to make payment upon receipt of each shipment. The plaintiff delivered several shipments to a location specified by the defendant and received payment.
When the plaintiff failed to deliver one shipment the defendant had to buy an equivalent amount of goods in replacement from another company. After this, the defendant notified the avoidance of the contract to the plaintiff.
The court noting that the parties had their place of business in different states, both contracting states to the CISG, determined that the Convention would apply. The court also noted that as per Article 4 CISG, the Convention only governs the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. Therefore, the defendant’s claim for a set off among other claims was not governed by the CISG and would have to be determined by private international law. Article 26 of Korean Private International Law provides that the governing law of a set off is the seller’s law, which means that Chinese law was the governing law in this regard.
As to the plaintiff’s failure to deliver one of the installments of duck feathers, the court stated that it constituted a fundamental breach of contract and gave the defendant grounds to conclude that a breach of contract would occur also with respect to future installments. Therefore, the contract, except for the orders already completed, was to be considered avoided pursuant to Articles 25 and 73 CISG.
Since the defendant had to buy duck feathers from another company in replacement of the goods not delivered, the plaintiff should pay for the difference between the contract price and the price in the substitute transaction, as per Articles 74 and 75 CISG, as well as further damages such as the air transport cost.Go to Case Table of Contents
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
25A [Effect of a fundamental breach]; 25B [Definition: Substantial deprivation of expectation, etc.]; 73A [Fundamental breach with respect to installment]; 73B [Refusal of future installments]; 75A [Substitute transaction after avoidance]
25A [Effect of a fundamental breach];
25B [Definition: Substantial deprivation of expectation, etc.];
73A [Fundamental breach with respect to installment];
73B [Refusal of future installments];
75A [Substitute transaction after avoidance]
CITATIONS TO OTHER ABSTRACTS OF DECISION
CITATIONS TO TEXT OF DECISION
Original language (Korean): Unavailable
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents