Israel 26 June 1989 Supreme Court (Datalab Management v. Pollak) [ULIS precedent]
[Cite as: http://cisgw3.law.pace.edu/cases/890626i3.html]
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: 306/85
CASE NAME:
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Israel (defendant)
BUYER'S COUNTRY: Australia (plaintiff)
GOODS INVOLVED: Sterile gauze pads
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:
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:
Sourced from CISG-Israel website (Editor: Dr. Arie Reich)
Supreme Court of Israel
"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."
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].
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 Case abstract
Datalab Management v. Pollak
Editorial remarks
Citations to other case abstracts, case texts and
commentaries
Pace Law School
Institute of International Commercial Law - Last updated May 30, 2003