Case abstract
Spain: Audiencia Provincial de Barcelona 4 February 1997
Case Law on UNCITRAL texts (CLOUT) abstract no. 396
Reproduced with permission from UNCITRAL
When the seller’s technical team recommends to the buyer that it purchase a hot-melt product manufactured by it, i.e. a product specially designed to join paper and cardboard that is resistant to different atmospheric conditions, and it subsequently emerges that the performance characteristics of the sold product do not meet the expectations generated by the seller or the needs of the buyer, there is a breach of article 35(2)(b) of the Convention: “the liability of the seller would be inescapable in the face of a genuine case of delivery of goods which do not conform with the contract."
Classification of issues present
APPLICATION OF CISG: This is a proceding between two Spanish firms; hence the CISG is not applicable. The CISG is referred to by analogy.
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue: Article
Classification of issues using UNCITRAL classification code numbers:
35B2 [Conformity of goods to contract (requirements implied by law): fitness for particular purpose known to seller]
Descriptors:
Editorial remarks
- Unavailable
Citations to other abstracts, case texts and commentaries
CITATIONS TO OTHER ABSTRACTS OF DECISION
Spanish: CISG-Spain and Latin American website "http://www.uc3m.es/cisg/respan6.htm"
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=894&step=Abstract>; see also the summary that introduces the case translation below
CITATIONS TO TEXT OF DECISION
Original language (Spanish): CISG-Spain and Latin American website "http://www.uc3m.es/cisg/sespan6.htm"; Actualidad Civil (1997) 340; Base de Datos [Database] Aranzadi Jurisprudencia; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=894&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at n.592-593; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 223, 231
Case text (English translation)
Queen Mary Case Translation Programme
Audiencia Provincial de Barcelona 4 February 1997
Translation by Alejandro Osuna-González [*]
Translation edited by Patricia Rincón Martín [**]
Garrigues & Andersen, Madrid, Spain
Source: Aranzadi Data Base of Jurisprudence (RA 340/1997)
Summary: Manipulados de Papel y Cartón, S.A. of Spain [buyer] filed for a declaratory judgment for reduction of the price against Sugem Europa, Sociedad Limitada of Spain [seller], who in turn counterclaimed before the Court of First Instance of Sant Feliu of Llobregat. The Court of First Instance issued a judgment finding [buyer's] claim partially founded but dismissed [seller's] counterclaim. The Audiencia [Appellate Court] finds in part for the appeals filed by both litigants and revised the sentence to require the [seller] to pay to the [buyer] the reduced amount of 1,213,959 Pesetas, to which interest provided for under art. 921 of the LECIV (Civil Procedures Law) shall be applied.
Legal reasoning
First. With regard to the partial judgment in support of the [buyer's] claim, [seller] presents to the Appellate Court, basically three arguments:
1) [Buyer] lost the right to file a claim based on articles 342 of the Commerce Code and 1482 of the Civil Code.
2) The product [seller] supplied (hot-melt glue) was in conformity with the contract in accordance with its technical characteristics. [Seller] alleges negligence on the part of the [buyer's] technical services who should have made it clear that the product was not recommended for the use to which [buyer] put it.. [Seller] also alleges that [buyer] had previously used the same product as evidenced by invoices 72 and 78.
3) Lastly, [seller] alleges that [buyer] failed to justify the damages claimed in her brief.
We address [seller's] arguments as follows:
[Seller's] defense based on the expiration of the period to state a claim was improperly dismissed in the judgment issued by the Court of First Instance. This is because we are not faced with an issue of "hidden defects". It was undisputed in the record that the glue [seller] supplied was not per se defective and that it met its technical description (page 80), as evidenced also by the expert's opinion presented during the course of the litigation (pages 290, et seq.); this has not been contested by the [buyer]. The issue was not the hot-melt glue per se, but rather it's inadequacy for its intended use. It is certain that [seller] did not contest the fact that [seller's] technical staff recommended the use of the product for the intended purpose. In fact, the legal representative of the [seller] while responding to examination, admitted this in his response to the fourth question. This was a clear response that allows no other interpretation. Additionally, the chemical expert's opinion provided to the Court of First Instance shows in a conclusive manner, as evidenced in the expert's response to question 9 that the product was "inadequate to guaranty the permanent fixing of the cardboard boxes, filled with its product and piled up in times of extreme heat" since it possesses "good resistance in low temperatures, but certain precautions must be taken for temperatures of 40° C or more."
In such cases, where there is a delivery of goods inadequate for their purpose, we have a breach of contract, which legitimizes the corresponding action to avoid the contract [acción resolutoria], along with a claim for damages and loss of profits, to which the period of caducity would not apply as provided for under article 342 of the Commerce Code. This unfitness for purpose should refer not only to the abstract purpose but also to the concrete intention as agreed or contracted to by the parties (Judgments dated 23 November 1984 [RJ 1984\5623], 30 November 1984 [RJ 1984\5695], 1 March 1991 [RJ 1991\1708] and 14 May 1992 [RJ 1992\4121], among many others). Moreover, even though not applicable to this case, it is the inescapable responsibility of a seller to provide an authentic delivery of goods conforming to the contract, based on article 35(2)(b) of the United Nation's Convention on Contracts for the International Sale of Goods, made at Vienna in 11 April 1980 and ratified by Spain (RCL 1991\229). This provisio states that the product must be:
"fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, ore that it was unreasonable for him to rely, on the seller's skill and judgement."
Hence, and for said purposes it would be irrelevant that the hot-melt glue had been purchased previously by the [buyer], since it was not made evident that the conditions, application and purpose were the same. It is therefore deduced not only that [seller's] defense -- reiterated before this Court [based on the argument] of a failure to file a timely claim -- is dismissed, but also that [seller] has incurred responsibility as a consequence of his sale. We therefore confirm this first ruling of the appealed judgment.
Second. With regard to the appeal filed by the [buyer], and therefore, the issue of the damages demanded in [buyer's] brief -- impeached generally in [seller's] response:
- [Buyer's] claim for damages for loss of prestige and image was not estimated in any manner during the course of
the litigation; [buyer] offered no basis for such damages.
- However, the reality of the problems that occurred with the clients of the [buyer], particularly, the returning of the
boxes that became unglued, has to be deemed as adequately justified by the letters attached to the [buyer's] brief
as documents 5 through 8. Also to be considered is the testimony rendered by the legal representatives of
"Gallostra, S.A." (page 196), "Juan Sant Feliu, SA" (page 202), and "Manufacturas Artículos Camping, SA" (page
234) who confirmed that the defective boxes were substituted for others that were in perfect condition and at
claimant [buyer's] expense. Therefore, and while acknowledging the difficulty of identifying which boxes suffered the problems, but proving that this in fact occurred, full effectiveness must be recognized for the invoices and notes of the work
effected by third parties to repair or substitute the affected boxes, as well as evidencing the transport expenses
(pages 12 to 28), that add to a total of 994,411 Pesetas.
- Moreover, it is acknowledged that [buyer] has a right to receive reimbursement for the non-conforming goods, pursuant to invoices in pages 3 to 6 that add to a total of 212,808 Pesetas.
- We, however, dismiss the petition, mentioned in [buyer's] claim, to receive the full amount for the price paid for her purchase of substitute goods, because, if both petitions were granted, this would lead to an enrichment of the buyer without cause.
- However, the award mentioned in the appealed judgment mentions a reimbursement of 320,400 Pesetas (page 39) -- unpaid by the [buyer's] client, "Manufacturas Articulos Camping, S.A." (who through the testimony of its legal representative, confirmed this fact [page 234]) -- an amount that was a consequence of the problems that gave rise to this claim, an amount that is increased by the banking fees to a total of 333,343 Pesetas, which corresponds with a partial payment of the invoice attached to page 37.
- It is also acknowledged in favor of [buyer], that she has the right to 435,982 Pesetas as described in the invoice attached to page 40, by virtue of which the entity "Industrial Aragonés, S.A." charged for the labor costs it incurred to substitute the defective boxes that had been supplied by [seller].
- From the record, not relevant is the fact considered by the Court of First Instance concerning the issue of whether the invoices, reimbursement of which is demanded, are dated before or after the letters of complaint that were included with the memorandum of [buyer] that is attached to pages 7 and 10. It appears that they only serve as written proof; this does not mean that other claims by [buyer] were not proved by other more immediate means.
- However, we dismiss the amount claimed in the document prepared by the [buyer] referring to the amount of 1,964,210 Pesetas (page 11) that allegedly correspond to the work and transportation effected by [buyer's] own employees and motivated by the facts that are the object of this dispute. In spite of the importance of this amount, the fact is that no evidence whatsoever has been submitted that would at a minimum justify its reality, since this document unilaterally prepared by the [buyer] is not effective as evidence.
Consequently, partially finding for the appeal lodged by [buyer], we hereby order [seller] to pay to [buyer] 1,976,417 Pesetas, without prejudice to what will later be said herein.
Third. With regard to [seller's] counterclaim, it was completely dismissed by the Court of First Instance, in the judgment that is appealed by [seller]. We consider not particularly relevant the fact that the evidence consisting of a judicial examination of the legal representative of [buyer] did not include a concrete question to the legal representative of [buyer], whether [buyer] acknowledged the authenticity of the invoices, notes, promissory notes and receipts that justified this allegation, attached to pages 103 through 136. It is evident that for the impeachment of their authenticity, the [buyer] already had adequate notice of the counterclaim, after which, in a generic and unfounded fashion, [buyer] basically limited herself to denying the debt. Notwithstanding this, there is evidence in the mentioned examination (page 247); the legal representative of the [buyer] expressly admitted that [buyer] failed to pay the [seller] precisely because of the problems arisen with the product that motivated this claim. [Buyer] thus acknowledged that she owed an amount without specifying it. Relating that admission with the document included with [seller's] counterclaim (among which are two promissory notes signed by [buyer] [pages 128 and 130]) and with the accountant's expert report concerning that (pages 276 et seq.), and based on the accounting records of [seller], we find that the amount [seller] counterclaimed for is true, and cannot reach a conclusion other than that [seller's] counterclaim is well founded. Hence, as requested by the [seller], applying the offset of the amounts as requested by [seller] regarding the sum acknowledged to be owed by [buyer], the [buyer] should receive a reduced payment of 1,213,959 pesetas.
Fourth. Pursuant to article 523 of the Law of Civil Procedures, and given the determinations in this judgment, no express imposition shall be made with regard to the expenses incurred in the Court of First Instance. And, because both appeals have been found to be partially founded, no specific order is made with regard to expenses incurred in this Appellate Court (article 710 of the Law of Civil Procedures).
FOOTNOTES
* Alejandro Osuna González, Licenciado en Derecho, Universidad Iberoamericana;, Plantel Noroeste, Tijuana, Mexico,
1995; LL.M. University of Pittsburgh, 1998; Professor of Public International Law and International Sales Law at the
Universidad Iberoamericana, Plantel Noroeste, in Tijuana, Baja California, Mexico, Practices law in Tijuana, State
of Baja California, Mexico.
All translations should be verified by cross-checking against the original text.
Pace Law School
Institute of International Commercial Law - Last updated December 5, 2005
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