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CISG CASE PRESENTATION

Spain 20 June 1997 Appellate Court Barcelona (Dye for clothes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/970620s4.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISIONS: 19970620 (20 June 1997)

JURISDICTION: Spain

TRIBUNAL: Audiencia Provincial de Barcelona, sección 16ª

JUDGE(S): Zamora, Nuria

CASE NUMBER/DOCKET NUMBER: 755/95-C

CASE NAME: Unavailable

CASE HISTORY: 1st instance Juzgado de Primera Instancia de Barcelona (6/94) 3 March 1995 [affirmed]

SELLER'S COUNTRY: Spain (defendant)

BUYER'S COUNTRY: Unavailable

GOODS INVOLVED: Dye for clothes


Case abstract

Spain: Audiencia Provincial, Barcelona 20 June 1997

Case law on UNCITRAL text (CLOUT) abstract no. 210

Reproduced with permission from UNCITRAL

The dispute concerns a possible lack of conformity of textile dyes supplied late by the foreign seller to the Spanish buyer. The buyer's judicial claim for damages was not admitted by the Court. Three main points of the judgment are of interpretative interest.

In the first place, the Court held that the seller had fulfilled its delivery obligation within a reasonable time after the conclusion of the contract (article 33(c) CISG), since the buyer had accepted the goods without protest at the time of their delivery and no specific delivery date had been expressly agreed in the contract. The Court did not accept that the reasonableness implied in accepting delivery without protest could be affected by the seasonal nature of the goods, whose commercial use was to some extent connected with the Christmas period.

Secondly, the Court expressed its opinion regarding the reasonable time within which the buyer must give notice to the seller of non-conformity of the goods following their receipt and after having discovered such non-conformity, in accordance with article 39(1) CISG. It maintained that it was unreasonable for the buyer to receive protests and complaints regarding defective quality from third parties to whom the buyer had resold the goods in a transformed condition and yet to say nothing at all to the supplier of those defective retailed goods. It is unacceptable to refrain from giving notice of non-conformity until payment is sought by the seller from the buyer, but it is reasonable for the buyer to give such notice to the seller as soon as the buyer becomes aware of the non-conformity from the protests by third parties.

The Court also expressly indicated in this matter that, within the scope of the CISG, no provisions specifically regulate hidden defects but, in their place, there are provisions governing non-conformity of goods forming the subject of the contract.

Finally, the Court laid down a set of appropriate criteria for fixing damages, as provided for in article 74 CISG.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 33(c) ; 35 ; 38(1) ; 39(1) ; 74

Classification of issues using UNCITRAL classification code numbers:

4A [Scope of Convention (issues covered): burden of proof];

33C [Time for delivery: reasonable time after conclusion of contract];

35A ; 35B [Conformity of goods: quality required by contract; Requirements imposed by law];

38A1 [Buyer's obligation to examine goods: as soon as practicable in the circumstances];

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

74C [Damages (general rules for measuring): need for proof of damages]

Descriptors: Delivery ; Conformity of goods ; Examination of goods ; Lack of conformity notice, timeliness ; Damages ; Scope of Convention ; Burden of proof

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Editorial remarks

EDITOR: Pilar Perales Viscasillas

The CISG was declared applicable. Buyer (plaintiff) claimed damages asserting breach of contract by seller on two grounds: delay in delivery and lack of conformity of the goods.

Delay in delivery. Order numbers 256, 257 and 258 do not specify a delivery date. However, the orders were accepted without objection. The last of these orders was so accepted in January 1993. Applying CISG Article 33(c) ("The seller must deliver the goods . . . within a reasonable time after the conclusion of the contract."), the court concluded that the goods were so delivered.

Lack of conformity, examination of the goods, notice of lack of conformity, damages. On 18 January 1993 and 15 February 1993, buyer's subpurchasers complained about defects in the quality of the goods. Citing CISG Articles 35, 38(1), 39(1) and 74, the court rejected buyer's claim, pointing out: (1) Proof of the lack of conformity is very difficult due to the type of goods (a dye applied to clothes by heat) and the fact that the buyer applies the dye to clothes purchased from other suppliers: the quality of the print depends on factors such as the type of cloth, weather conditions, the temperature at which the dye is applied, and so forth; the final product does not itself show the nature of the lack of conformity. (2) Buyer never complained until seller asked for payment of the price. (3) Buyer never proved its damages.

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=314&step=Abstract>; [1999] Transportrecht, Beilage "Internationales Handelsrecht" (TranspR-IHR) 26-27

Spanish: CISG-Spain and Latin America database at http://www.uc3m.es/cisg/respan2.htm

CITATIONS TO TEXT OF DECISION

Original language (Spanish): CISG-Spain and Latin America database at http://www.uc3m.es/cisg/sespan2.htm; 4 Revista Jurídica de Catalunya (1997) 110-111; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=314&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 nn.529, 570; CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (cases cited in addendum to opinion); [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 74 paras. 46, 51; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 230

French: Rosch, Dalloz Sirey: Paris (November 1999) 361-362

Spanish: Martínez Cañellas, in: Michael R. Will ed., Rudolf Meyer zum Abschied: Dialog Deutschland-Schweiz VII (1999), 165-183 n.35

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Case text (English translation)

Queen Mary Case Translation Programme

Audiencia Provincial de Barcelona 20 June 1997

Translation [*] by Mariana Mendoza [**]

Translation edited by Patricia Rincón Martín [***]
Garrigues & Andersen, Madrid, Spain

Legal analysis

I. For the [buyer], the Procurator was the only person present for the hearing of this appeal (the legal representative of [buyer] being absent). The Procurator requested the ruling of the Court of First Instance to be declared void but without indicating any reason. Together with the fact that the submission of this appeal is not sustained by any argument, this makes it impossible to ascertain the matters alleged regarding the decision appealed against, and also makes it difficult for the other party to exercise its rights of defense.

However, considering the legal nature of any appeal, whereby the Appellate Court (ad quem) is in the same position as the Court of First Instance (a quo), and therefore it has the same faculties regarding the evaluation of evidence and the law, in this appeal it must be understood that the case at first instance is reproduced.

II. Having reviewed all the submissions and the judgment of the Court below, the [buyer's] appeal must be rejected. This Court agrees with the factual and legal reasoning of the Court of First Instance.

The evidence shows that both parties maintained commercial relationships, that [seller] supplied goods, and that [buyer] did not pay for them. [Buyer] alleges that he did not need to pay for them since [seller] had previously breached the contract. This breach had allegedly two aspects: first, there was a late dispatch of the goods, and second, the goods that arrived were defective and not fit for the purpose for which they had been ordered.

Regarding the first reason, according to the abundant documentary evidence provided by the parties, the usual practice was that [buyer] would place the order. [Seller] would then confirm it and would indicate the date of dispatch. This was not the case with the orders numbers 256, 257 and 258, because the proximity of Christmas meant that the supplier could not undertake to dispatch the goods in a specific date, and did not do so. The last dispatch was received by [buyer] in January 1993, and was accepted without any objection.

In the trade of printing seasonal fabrics, time is an important consideration. However, there is no doubt that, since there was no specific date fixed for the arrival of the goods, one must turn to Article 33(c) of the Vienna Convention on the International Sale of Goods (11 April 1980). According to that Article, in the absence of an express agreement, the [seller] should deliver the merchandise in "a reasonable time" after the formation of the contract, as it was done in this case. It is common ground that the goods were accepted by the [buyer].

III. Turning now to the second aspect of the alleged breach: it was submitted that the goods were not fit for the purpose, since they had hidden defects that made them defective.

This is a contract for an international sale of goods, which is regulated by the Vienna Convention. In the Convention there is no Article dealing specifically with hidden defects. The Convention only imposes an obligation on [seller] to place the goods at the buyer's disposition in the quantity, quality and type stipulated in the contract (Article 35). The buyer must examine the goods or cause them to be examined in the shortest time possible (CISG Article 38(1)). The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it (CISG Article 39(1)). Consequently, the buyer loses the right to declare the contract avoided, in respect of any breach other than late delivery, if he has not given notice to the seller of the lack of conformity within a reasonable time after he knew or ought to have known of the breach.

In this case, the documentary evidence provided by [buyer] shows that in 18 January 1993 and on 15 February 1993, some of his clients ("T." and "D., S.A.") complained of defects in the merchandise; however, nothing was communicated to [seller]. The buyer waited until [seller] requested payment to object to the lack of conformity of the goods.

In addition, as the Court of First Instance pointed out, [buyer] has omitted to provide any evidence to show that the rejected goods from his clients had defects due to the poor quality of the goods supplied by [seller]. It is notable that the buyer supports his submission with a study of Professor Feliú, of Universidad Politécnica, but he does not show this study to this Court.

The use of expert evidence on that would add nothing to the resolution of this case. The merchandise supplied by [seller] only constitutes part of [buyer's] production process. That merchandise is the ink that, with heat, is printed on the fabric supplied by other parties. The final product depends on the fabric base, the atmospheric and conservation conditions, the printing temperature, etc. It is, therefore, difficult to see how any examination of the resulting fabric, could show the origin of the defect.

IV. What we have said justifies the automatic rejection of [buyer's] counterclaim for loss of profit of the [buyer]. That claim could only be supported if there was a previous breach on the part of [seller]. Any claim for loss of profit would be supported by Article 74 of the Vienna Convention, as part of the damages claim, which includes the amount of the economic loss as well as loss of profit. However, this norm limits unsupported or abusive claims. The party who suffered damages will only have a right to claim for the losses, which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.

In the present case, leaving aside substantive reasons that go against [buyer's] position, the buyer did not provide any evidence to show his profits in previous years, or the real loss suffered, for example, orders given to him that could not be complied with, loss of money suffered as a consequence, or loss of clients or loss of reputation in his commercial field, as well as the knowledge of all of the above that [seller] could have had. For all those reasons, [buyer's] claims for this cannot succeed.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Spanish-vendor-defendant-respondent is referred to as [seller]; the foreign plaintiff-appellant is referred to as [buyer].

** Mariana Mendoza is an Argentinean Lawyer, member of the International Arbitration group of Freshfields Bruckhous Deringer in Paris. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia.

*** Patricia Rincón was a member of the MOOT team competing for Universidad Carlos III de Madrid in the Seventh Edition. She graduated in Law and Economics from said University in 2001 and is with the International Tax Department of the Madrid office of the law firm Garrigues & Andersen.

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Pace Law School Institute of International Commercial Law - Last updated February 16, 2007
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