Finland 12 November 1997 Turku Court of Appeal (Canned food case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/971112f5.html]
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: S 97/324
CASE NAME:
CASE HISTORY: Tampere Court of First Instance 17 January 1997 [affirmed]
SELLER'S COUNTRY: Spain (plantiff)
BUYER'S COUNTRY: Finland (defendant)
GOODS INVOLVED: Canned food
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
38A [Buyer's obligation to examine goods: time for examining goods];
39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];
48A ; 48C [Cure by seller after date for delivery: seller's right to remedy any failure to perform; Request or notice under art. 48(2) or (3) effective only when received: an exception to "dispatch" rule of art. 27];
50A [Buyer's right to reduce price for non-conforming goods]
Descriptors:
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
Unavailable
CITATIONS TO TEXT OF DECISION
Original language (Finnish): Unavailable
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (this case and related cases cited in addendum to opinion)
Queen Mary Case Translation Programme
PARTIES AND CLAIMS
JHPH SA, Spain [seller]. F Oy, Finland (buyer). Goods: canned food. Issue: Price reduction, etc.
[Seller] has stated in its appeal, that [buyer]'s claim should be dismissed and that [buyer] be made to compensate for [seller]'s legal fees both in the Court of First Instance and in the Court of Appeals. Furthermore, [seller] has requested, that the Court of Appeals carry out an oral hearing with the representatives of [buyer]'s clients as witnesses.
[Buyer] has repeated its claim that it presented in the Court of First Instance insofar as its claim was denied in that instance and has demanded compensation for its legal fees.
REASONING OF THE COURT OF APPEALS
- Examination of the goods and notice of lack of conformity
According to CISG Article 38(1), which is applicable in the case, the buyer must examine the goods or cause them to be examined within as short a period as possible as is practicable in the circumstances. Considering the type of the goods sold (canned food), [buyer] has not had the opportunity to examine the goods and detect the non-conformity.
According to CISG Article 39(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 or ought to have discovered it.
The invoices concerning the goods subject to the dispute were sent on 5 May 1995 and on 10 October 1995.
According to the witnesses heard in the Court of First Instance and the written statements submitted to that Court, it is apparent that consumers and retailers begun complaining about the Diamante products during the fall of 1995 and complaints kept coming in throughout the spring of 1996.
A copy of the fax message, dated 29 November 1995 from the CEO of [buyer] sent to the counsel of [seller] was submitted to the Court of First Instance. The message informs [seller] about the non-conformities of the goods.
Considering these circumstances and the grounds of the ruling of the Court of First Instance, the Court of Appeals holds, that [buyer] has given notice to the seller in the manner required by the law.
- Buyer's right to price reduction
[Seller] alleges that [buyer] is not entitled to price reduction because [buyer] has not given the [seller] an opportunity to remedy the alleged non-conformity of the goods.
CISG Article 48 defines the right of the seller to remedy a non-conformity of the goods after the date of delivery. According to article 48(4), a request or notice concerning seller's cure of a non-conformity is not effective unless received by the buyer. [Seller] has not even alleged that it would have afforded [buyer] an opportunity to have the non-conformities remedied by [seller]. [Seller] is still standing by its statement that the goods conformed to the contract.
Under these circumstances, [buyer] has not lost its right to price reduction.
- Amount of the price reduction
Article 50 of the CISG provides that if the goods do not conform with the contract, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value of the conforming goods. Consequently, the buyer has the right to reduce the price in proportion to the non-conformity of the goods. The buyer has the burden of proof with regard to the extent of the non-conformity of the goods and the amount of non-conforming goods.
Due to the above mentioned grounds and due to the grounds mentioned in the ruling of the Court of First Instance, the Court of Appeals has resolved the matter in a manner stated in the ruling below.
THE RULING
[Seller] is required to pay a price reduction of 1,226,475.50 Spanish Pesetas with regard to the first claim and 1,974,866.30 Spanish Pesetas with regard to the second claim. Consequently, [seller] has to pay [buyer] a sum total of 15,201,341.80 Spanish Pesetas as damages and price reduction, added with interest on all sums in arrears as stated in the ruling of the Court of First Instance.
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For purposes of this presentation, JHPH SA of Spain is referred to as [seller] and F Oy of Finland is referred to as [buyer].
** Jarno Vanto (LL.M. University of Turku, Finland) is a doctoral candidate, University of Turku, and US LL.M. student, NYU School of Law, USA.
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