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CISG CASE PRESENTATION

Israel 26 June 1989 Supreme Court (Datalab Management v. Pollak) [ULIS precedent]
[Cite as: http://cisgw3.law.pace.edu/cases/890626i3.html]

Primary source(s) of information for case presentation: CISG-Israel website

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Case identification

DATE OF DECISION: 19890626 (26 June 1989)

JURISDICTION: Israel

TRIBUNAL: Supreme Court

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 306/85

CASE NAME: Datalab Management v. Pollak

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Israel (defendant)

BUYER'S COUNTRY: Australia (plaintiff)

GOODS INVOLVED: Sterile gauze pads


Classification of issues present

APPLICATION OF CISG: This is a ULIS case. See editorial remarks, below, for comments on citing it as a CISG precedent.

APPLICABLE CISG PROVISIONS AND ISSUES

Key provisions at issue: ULIS counterparts to CISG Articles 38 ; 39

Classification of issues using UNCITRAL classification code numbers:

38A [Buyer's obligation to examine goods: time for examining goods];

39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]

Descriptors: Examination of goods ; Lack of conformity notice, timeliness

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Case abstract

Sourced from CISG-Israel website (Editor: Dr. Arie Reich)

Supreme Court of Israel
Datalab Management v. Pollak

"Facts: The Israeli respondent sold to the Australian appellant sterile gauze pads that were paid for and later found to have defects. The buyer returned the goods, and it was agreed between the parties that the defect in the replaced merchandise would be no more than 1%. The seller then redelivered a part of the supposedly corrected merchandise. Several months later, the buyer claimed that a large portion of the new merchandise (around 17%) was still defective. Negotiations between the parties to settle the matter were not successful, and the buyer refused to accept the rest of the merchandise. The seller then sold this merchandise to a third party for a higher price. The buyer sued the seller for the return of the full payment. One of the issues discussed in the case is how the buyer can fulfil its obligation to examine the goods immediately under ULIS Art. 38(a), when because of the nature of the goods (sterile pads), to open them up for examination would mean to spoil them for future use.

"The Supreme Court ruled:

1. According to ULIS Articles 38(a) and 39(b), the buyer had forfeited the right to rely on the goods' lack of conformity as grounds for damages since it had failed to examine the goods immediately.

2. Under Art. 38(a) "the buyer must examine the goods or cause them to be examined immediately". According to ULIS Art. 11, "immediately" is to be interpreted as within as short a period as is practicable in the circumstances. The objective of the Article is to promote the economic stability of the international market by preventing the damage caused by a lengthy delay in the giving of the notice on a good's lack of conformity. Under certain circumstances the buyer would not be expected to examine the merchandise on site if this would ruin the merchandise, causing a wrong to the buyer or lead to a superfluous waste of resources. The buyer claimed that since it passed the goods on to its client and did not actually use them, it would have been very difficult and expensive to examine them and reveal defects on site. This would also have caused a delay in the performance of its contract and have resulted in further financial loss. The Court, however, ruled that considering the history of the merchandise, the buyer should have tested a sample or it should have asked its client to use the merchandise at the earliest possible opportunity in order to ascertain its quality. Both of these methods would have been relatively inexpensive and would have resulted in an adequate allocation of resources without causing a lengthy delay. In failing to do so, the buyer did not meet the requirements of ULIS Art. 38. Therefore under ULIS Art. 39, the buyer should have discovered the defect and given notice to the seller at an earlier period. In failing to do so, he has lost the right to rely on lack of conformity.

3. As for the goods that had been returned to the seller and subsequently sold by him to third parties, the Court ruled, based on the Israeli law of contract remedies, that the contract had implicitly been annulled by both parties, and that consequently the seller was required to return the payment received from buyer for that portion of the merchandise."

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Editorial remarks

EDITOR: Albert H. Kritzer

This case involves an interpretation of Article 38 ULIS. Article 38 CISG was sourced from Article 38 ULIS. See <http://cisgw3.law.pace.edu/cisg/text/roadmap/RoadmapL-38.html>. Article 38 ULIS and Article 38 CISG compare as follows:

Mann states: "It is simply common sense that if the Convention adopts a phrase which appears to have been taken from one legal system where it is used in a specific sense, the international legislators are likely to have had that sense in mind and to intend its introduction into the Convention." Francis A. Mann, Uniform Statutes in English Law, 99 Law Quarterly Review (1983) 383.

An evaluation of the specific sense of the counterpart ULIS and CISG provisions is relevant to regard for Article 38(1) ULIS case law as precedent for the interpretation of Article 38(1) CISG. Schwenzer recommends against regard for Article 38(1) ULIS case law as precedent for the interpretation of Article 38(1) CISG. She states: "Article 38 CISG can be traced back to Article 38 ULIS. However [t]he changes made in relation to ULIS as much as the new Article 44 illustrate a clear intention to make the obligation to examine the goods and to notify complaints not only more flexible than under ULIS, but also more favourable to the buyer. This was in response to concerns voiced especially by developing countries. That factor must be taken into account when interpreting Articles 38 and 39. Reference cannot therefore simply be made to strict case law on ULIS (particularly of the German courts), which was inspired by the treatment of such matters in the Germanic legal systems." Ingeborg Schwenzer, in: Peter Schlechtriem ed., Commentary on the UN Convention on the International Sale of Goods, Oxford (1998) 300-301 [citations omitted].

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Citations to other case abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Hebrew): P.D. 43(2) 309

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Pace Law School Institute of International Commercial Law - Last updated May 30, 2003
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