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CISG CASE PRESENTATION

Belgium 2 December 1998 District Court Hasselt (M. v. N.V. M)
[Cite as: http://cisgw3.law.pace.edu/cases/981202b1.html]

Primary source(s) of information for case presentation: CISG-Belgium database of Katholieke Universiteit Leuven

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Case identification

DATE OF DECISION: 19981202 (2 December 1998)

JURISDICTION: Belgium

TRIBUNAL: Rechtbank [District Court] van Koophandel Hasselt

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: Unavailable

CASE NAME: M. v. N.V. M

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Netherlands (plaintiff)

BUYER'S COUNTRY: Belgium (defendant)

GOODS INVOLVED: Unavailable


UNCITRAL case abstract

BELGIUM: Rechtbank [District Court] van Koophandel Hasselt
2 December 1998 ((M. v N.V. M))

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/131]
CLOUT abstract no. 1254

Reproduced with permission of UNCITRAL

Abstract prepared by Emily Nordin

After the conclusion of a sales contract and the buyer’s failure to pay, the seller (i.e. the claimant) requests payment of the price and invokes two penalty clauses setup in the conditions of the contract: a penalty clause awarding damages for breach of contract and a penalty clause setting an interest rate for late payment. In court, the seller states that the conditions were established at the beginning of the contractual relationship and afterwards deposited at the Chamber of Commerce (“Kamer van Koophandel”) in Zwolle. The respondent does not dispute the fact that it has to pay the price, but objects that it never had any knowledge of such conditions.

The Court first discusses which law is applicable. Since the buyer and the seller have their place of business in countries, i.e. Belgium and the Netherlands, which are parties to the CISG, the Convention is applicable (Article 1(1)(a) CISG).

The Court notes that pursuant to Article 53 CISG, the buyer is required to pay the price agreed upon; if it doesn’t, the other party is entitled to damages (Article 74 CISG). When the breach of contract is due to a late or non-payment, interest is also awarded (Article 78 CISG) besides damages.

Referring to Article 6 CISG, the Court notes that it allows the parties to opt out of the CISG, derogate from or modify the effect of its provisions. The question is whether the general conditions of contract of one of the parties, which are not communicated to the other party but are available “elsewhere” (i.e. the Chamber of Commerce in Zwolle), can lawfully determine the amount of damages and interest to be awarded in case of a breach of contract. The Court, in fact, does not find any evidence that the conditions were communicated in some way to the buyer. The Court further notes that as per Article 18(1) CISG, which should be read in connection with Articles 8 and 19 of the Convention, silence in itself does not amount to acceptance. The Court thus concludes that since there is no evidence supporting the fact that the buyer knew the seller’s conditions of contract, no derogation from the Convention is possible and the seller cannot rely on the two penalty clauses. However, this does not mean that the seller is not entitled to damages or interest through the application of Articles 74 and 78 CISG.

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Case outline

Reproduced with permission from CISG-Belgium database of Katholieke Universiteit Leuven

Application of the CISG – applicable in The Netherlands and Belgium

Conditions on invoice – cannot replace or add to terms of CISG – cannot determine interest rate

Interest – not determined by terms on invoice – determined by Arts. 74 and 78 of CISG.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 6 ; 7 ; 18 ; 74 ; 78 [Also cited: Articles 8 ; 19 ; 53 ]

Classification of issues using UNCITRAL classification code numbers:

6A [Modification of Convention by contract: binding only if other party had knowledge of modification];

7B1 [Interpretation of Convention: materials for interpretation (international case law)];

18A2 [Criteria for acceptance of offer: silence or inactivity insufficient];

74A [General rules for measuring damages: can include interest];

78A [Interest on delay in receiving price or any other sum in arrears]

Descriptors: Interpretation of Convention ; Autonomy of parties ; Acceptance of offer ; Damages ; Interest

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Editorial remarks

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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=809&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (Dutch): CISG-Belgium database of Katholieke Universiteit Leuven <http://www.law.kuleuven.ac.be/ipr/eng/cases/1998-12-02.html>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=809&step=FullText>; Rechtskundig Weekblad (1999-2000) no. 19-8 January 2000, 648

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

English: Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]

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Pace Law School Institute of International Commercial Law - Last updated July 16, 2013
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