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CISG Article 78: Endless disagreement among
commentators, much less among the courts

Francesco G. Mazzotta
July 2004

Appendix 5

FINLAND

Courts

Käräjäoikeus District court
Hovioikeus Court of Appeal

1. Käräjäoikeus of Kuopio, November 5, 1996, available at <http://cisgw3.law.pace.edu/cases/961105f5.html>.

Original language:     
Translation:
Finnish
Available

Court (translation):

"According to CISG Article 74, [buyer] is entitled to damages for breach of contract consisting of a sum equal to the loss, including loss of profit suffered by [buyer] as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.

The defendants have denied their duty to pay damages for interest loss caused to [buyer]. According to his own statement, K [CEO of the seller] has known that [buyer] will take credit to finance the advance payment. Consequently, K may have anticipated that interest loss might be caused to [buyer] if, for some reason, the sale would not go through. On these grounds, damages include compensation of interest loss.

It has not been shown that K knew the interest rates in Lithuania, namely 7% per month and 0.5% per day interest on arrears, which essentially differs from interest rates in Western Europe. One could not even assume that he should have known it. It is the estimate of the Court, that K should have pre-estimated that the interest loss resulting from not fulfilling the contractual obligations could be about 10% of the sale price, meaning U.S. $8,000. The amount of lost profit announced by the seller, namely 20%, the Court sees as reasonable. The butter consignment bought by the buyer has had a buyer."

2. Hoviokeus of Helsinki, October 26, 2000, available at <http://cisgw3.law.pace.edu/cases/001026f5.html>.

Original language:     
Translation:
Finnish
Available

Court of First Instance (translation):

"[Seller] will pay [buyer] a sum total of Sf 70,000 or an equal amount of Fmk at the exchange rate of the date of payment. The sum will be added with interest as defined in the Finnish Law on interest (section 4) starting from one month after the notification of summons onwards, 28 October 1997.

Court of Appeals:

"[Seller] will be made to pay for [buyer's] legal expenses accrued in the Court of First Instance in the amount of Fmk 235,000. The sum is subject to interest on arrears as defined in the Finnish Law of Interest starting from one month after the issuance of judgment onwards."

3. Hovioikeus of Turku, April 12, 2002, available at <http://cisgw3.law.pace.edu/cases/020412f5.html>.

Original language:     
Translation:
Finnish
Available

Court (translation):

"Additionally, CISG is not applicable in terms of evaluating the reasonableness of the contract or the interest rate, because it has no article dealing with enhancing the reasonableness of the contract as does Finnish law, or articles to evaluate the interest rate except article 78. According to the section 4 of the Finnish law defining the applicable law in international sale of goods, the law of the seller's place of business applies, unless the parties to the contract have agreed on the applicable law. According to section 6, a foreign law that contravenes the principles of Finnish law is not to be applied by the Finnish Courts. As a consequence of the fact that the parties have not agreed on the applicable law, it is decided that, according to the above mentioned principles, when evaluating the conclusion of the contract, its fairness, possible mediation and the interest rate, Finnish law is applicable.

....

[Buyer] has demanded interest for the return payment. Because of the fact that the claim is based on a mistaken payment and the benefit derived from such a payment, according to the Finnish law on interest, interest accrues only after one month from the presentation of the claim onwards. Therefore, [buyer] is entitled to legal interest from 17 March 1997 onwards - one month after [seller] was served with summons."

SUMMARY

Cases involving Article 78: 3
Cases for which an English translation is available: 3
Cases for which only an abstract was available: 0
Cases for which neither translation nor abstract was available: 0


Pace Law School Institute of International Commercial Law - Last updated November 15, 2004
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