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France 21 October 1999 Appellate Court Grenoble (Calzados Magnanni v. Shoes General International) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/991021f1.html]

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

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Case identification

DATE OF DECISIONS: 19991021 (21 October 1999)


TRIBUNAL: CA Grenoble [CA = Cour d'appel = Appeal Court]

JUDGE(S): Beraudo, président; Baumet, Landraud, conseillers; Pelisson, greffier


CASE NAME: Sté Calzados Magnanni v. SARL Shoes General International

CASE HISTORY: 1st instance Trib. com. Vienne (Rd 96J/00101) 10 June 1997

SELLER'S COUNTRY: Spain (plaintiff)

BUYER'S COUNTRY: France (defendant)


Case abstract

FRANCE: Cour d'appel de Grenoble 21 October 1999

Case law on UNCITRAL texts (CLOUT) abstract no. 313

Reproduced with permission from UNCITRAL

The buyer, a French company, placed an order with the seller, a Spanish company, for 8,651 pairs of shoes to be marketed under the "Pierre Cardin" trade name. The seller denied having received any orders and refused to deliver. The buyer resorted to substitute manufacturers. The buyer was late in supplying its retailers and 2,125 unsold pairs were returned to the buyer. The buyer then filed a claim amounting to 712,879f for the 2,125 unsold pairs and for loss of the company's brand image. In addition, the buyer accused the Spanish company of acts of unfair competition.

The Commercial Court of Vienne, France, awarded damages to the buyer for contractual breach by the seller and for loss of its brand image. The seller lodged an appeal.

The Court of Appeal noted that both parties "accept that the Vienna Convention of 11 April 1980 on Contracts for the International Sale of Goods governs their contract since the contract was concluded between a seller and a buyer whose places of business are in different States parties to the Convention (1(1)(a) CISG) and the subject of the contract was the sale of goods to be manufactured whose substantial materials -- other than the soles and metallic decoration characteristic of the "Pierre Cardin" brand -- which are necessary for such manufacture were supplied by the seller" (3(1) CISG). Although the seller denied the very existence of a contract of sale and relied on article 18(1) CISG, according to which silence or inactivity does not in itself amount to acceptance, the Court held that the contract had indeed been concluded, even in the absence of any express acceptance on the part of the seller. The Court referred to the practice of previous years, the seller having always fulfilled the French company's orders without expressing its acceptance. Moreover, the seller did not produce, in reply to the many letters of claim from the buyer, any document stating that it had not received any order. In addition, the seller was aware of the buyer's intention to penetrate the footwear market by the summer of 1995 and, even if it had not received any order, it should, after manufacturing samples and being left with the original material in its possession, have questioned the buyer as to how the absence of an order should be interpreted.

The Court held that "refusal, without any legitimate reason, to fulfil an order received by falsely maintaining that the order had not been placed constitutes a fundamental breach by the seller within the meaning of article 25 of the Vienna Convention."

The Court of Appeal upheld the ruling to the extent that it granted compensation for the loss suffered as a result of the refusal to deliver, referring, in that regard, to article 74 CISG. The Court noted that compensation for impairment of the trading image was not in itself recoverable under the CISG and overturned the ruling with regard to the award of damages in that respect.

The Court granted damages to the buyer in respect of its claim of unfair competition, on the basis of French domestic law, which was applicable in accordance with the rule designating the law of the place of the offence, since the Spanish company had marketed, to its own advantage, footwear liable to cause confusion with footwear which the buyer had commissioned it to manufacture and thus likely to win over the latter's clientele.

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]


Key CISG provisions at issue: Articles 8 ; 9(1) ; 18 ; 25 ; 49 ; 74 [Also cited: Article 3(1) ] [Also relevant: Article 84 ]

Classification of issues using UNCITRAL classification code numbers:

8A [Intent of party making statement or engaging in conduct]

9C [Practices established by the parties];

18A3 [Criteria for acceptance: silence or inactivity generally insufficient (However, court held that past practice overrode this rule)];

25A [Definition of fundamental breach (Refusal to fill order by falsely maintaining that order had not been placed held to constitute a "fundamental breach")];

49A1 [Buyer's right to avoid contract (grounds for avoidance): Fundamental breach of contract];

74A [General rules for measuring damages: loss suffered as consequence of breach [Court held compensation for impairment of trading image not in itself recoverable under CISG; allowed damages under claim for unfair competition on basis of French domestic law.]

Descriptors: Intent ; Usage and practices ; Acceptance ; Avoidance ; Fundamental breach ; Damages

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Editorial remarks

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Citations to other abstracts, texts and commentaries


English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=415&step=Abstract>


Original language (French): CISG - France website (http://Witz.jura.uni-sb.de/CISG/decisions/211099v.htm"); Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=415&step=FullText>

Translation (English): Text presented below


English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.241-243 (acceptance issue), 763 (damages denied where "party sought compensation for impairment to its 'trading image' "); [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 para. 44 Art. 18 para. 7; CISG-AC advisory opinion on Calculation of Damages under CISG Article 74 [Spring 2006] n.104 (related cases cited in addendum to opinion); Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 157; Spaic, Analysis of Fundamental Breach under the CISG (December 2006) n.269

French: Witz, Dalloz, Cahier Droit des Affairs (30 November 2000) No. 42/7007, 441-442

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Case text (English translation)

Queen Mary Case Translation Programme

Court of Appeals of Grenoble  21 October 1999
Calzados Magnani v. Shoes General International

Translation [*] by Charles Sant 'Elia [**]

Translation edited by Kirsten Stadtländer [***]

Appeal from a decision (No. RG 96J/00101)
rendered by the Commercial Court of Vienne
dated 10 June 1997
following declaration of appeal 9 September 1997

Parties to the proceeding and composition of the Court

APPELLANT: Calzados Magnanni, corporation under Spanish law, Poligono Industral Le Hugnon, Anda 02640 Almansa (Spain), represented by the SCP Calas. associated solicitors assisted by Me Rambaud, attorney of the Paris bar; APPELLEE: S.A.R.L. Shoes General International "S.G.I.", Parc Evolic Rhône-Alpes BT B, 2/3 Rue de Madrid 38290 Saint Quentin Fallavier, represented by Selarl Dauphin & Neyret, solicitors assisted by Me Pierre Arduin, attorney of the Lyon bar.

DURING THE ARGUMENTS AND DELIBERATION: M. Jean-Paul Beraudo, Président, M. Georges Baumet, Conseiller, Mrs. Micheline Landraud, Conseiller, Assisted during the arguments by Mme. Eliane Pelisson, Clerk. Arguments: At the public hearing of 23 September 1999, the solicitors and the barristers were heard on their briefs and pleas; Deliberations: Then the matter was deliberated upon for the ruling to be returned at today's hearing; Having seen the last briefs of the Calzados Magnanni company [seller], on 31 August 1999; Having seen the last briefs of the International General Shoes ("S.G.I.) company, on 8 September 1999;

[Facts of the case]

Considering the fact that Shoes General International [buyer], the customer of Calzados Magnanni [seller], manufacturer of shoes, alleges having ordered from [seller] since November 1993, for the winter and summer seasons 1994, and again, in autumn 1994, the manufacture of shoes that were to be marketed under the brand Pierre Cardin for the summer season 1995; [buyer] states that it made various such orders between 3 October 1994 and 17 January 1995 for a total of 8,651 pairs of shoes;

THAT the [seller] denies having received such an order; THAT the [buyer] asserts having learned by telephone, on 19 January 1995, of [seller]'s refusal to deliver;

THAT the [buyer] alleges that it had to seek recourse to manufacturers of replacements but that it was too late to deliver in time to the retail dealers who returned to [buyer] 2,125 unsold pairs, for a total amount of 712,879.00 f [French francs];

THAT the [buyer] also alleges a loss of commercial reputation with the retail dealers dissatisfied with late deliveries;

Considering THAT, moreover, the [buyer] alleges that the [seller] marketed directly 800 pairs of shoes of the brand "Pierre Cardin" in the metropole [France] and especially in départements and overseas territories;

Considering, moreover, THAT the [buyer] complains about the fact that the [seller] copied the "Pierre Cardin" shoe model the manufacture of which [buyer] had entrusted to [seller], and marketed it in Europe and overseas departments under the name "Cartoufle"; THAT the [seller] contradicts these assertions, alleging that [seller] always marketed on the French market its manufactures under its own brands "Julio Blanco" and "Magnanni"; THAT [seller] adds that the disputed shoe model, a flexible moccasin type, is very common and is widely represented on the market;

On the above:

Considering THAT, on the applicable law, both parties acknowledge that the Vienna Convention on Contracts for the International Sale of Goods of 11 April 1980 [CISG] governs their contract since it had been concluded between a seller and a buyer established in different States which are parties to the Convention, and having as its object a sale of goods to be made for which the essential material elements -- other than soles and a characteristic metal decoration of the brand Pierre Cardin -- necessary for the manufacture, were supplied by the seller;

Considering THAT, as to the reality of the order sent by [buyer], [seller] relies on Article 18(1) of the CISG and maintains that its silence or its inactivity "does not in itself amount to acceptance"; it is thus advisable that the Court consider the practices followed by the parties during the previous orders and examine the factual circumstances which surround the present dispute;

Considering THAT, the [seller] has not produced acceptances of the orders sent by [buyer] in 1993, the Court deduces from this that [seller] manufactured without making known its acceptance to [buyer];

THAT starting from a premise based on the computer or manual shape of order forms, the [seller] presents deductions concerning the existence or the absence of the order: but that the [buyer] is a master in the use of modern equipment, using data processing to place orders at the end of the year 1994; the Court, however, does not follow the [seller] in these deductions; manual order forms, as well as computer lists, could have been forged for the needs of the lawsuit;

THAT, furthermore, the Court observes that M. Lautiat's affidavit, on 20 September 1996, while verbose on the method of payment of the orders, is silent on the forms taken by the orders which it passed on; THAT it results from practices followed by the parties, in 1993 and the beginning of 1994, that the [seller] executed the orders without expressing its acceptance; [seller]'s reliance on the provisions of Article 18(1) of the Vienna Convention [CISG] is thus ineffective;

Considering THAT, on the basis of the proof of the order concerning the shoes for winter 1994-1995, the [buyer] throws into the arguments the computer lists which [seller] asserts that it did not receive;

THAT [buyer] has also produced exchanges of correspondences and intervening faxes of 17, 19, 20 and on 24 January 1995 concerning [seller]'s refusal to deliver in which the latter does not mention that it did not receive an order; that with delay, on 24 January, in response to a fax of 19 January, [seller] clarified in abstract terms that it did not change its mind about what it said the previous week and offered to return the manufacturing material which is the property of [buyer];

THAT [seller] has produced no writing, in response to the numerous correspondences of [buyer] spanning up to 31 March 1995, in which it affirms that it did not receive an order;

THAT [buyer] has produced still another order for shoes of past samples, in July 1994, to be executed on 22 August 1994; THAT this order led to a billing on the part of [seller] on 23 August 1994: this bill bears the no. 304; THAT, in a letter of 29 November 1994, [seller] demanded the payment of this bill 304 "envio de Muestras'' ("shipment of samples");

THAT [seller] which had manufactured samples for the summer 1995 season and had not received any letter criticizing them; THAT [seller] knew [buyer]'s intention to be present in the shoe market for the summer of 1995; THAT, in conformance with Article 8(1) of the CISG [seller] had to interpret the indications and other behavior of [buyer] "according to [the buyer's] intent where the [seller] knew or could not have been unaware what that intent was";

THAT even if [seller] had not received the order, [seller] should have interrogated [buyer] on the meaning to give to the absence of an order, after having manufactured some samples and having remained in possession of the original material -- such are the cutting remarks of [buyer];

THAT the Court has already indicated that [seller] had received an order because [seller] never denied it before the multiple indignant [buyer] correspondence addressed to [seller] from January to March 1995;

THAT the refusal to honor an order received, without legitimate reason, by asserting in a deceitful manner that the order had not been made, constitutes on the part of the seller a fundamental breach of contract within the meaning of Article 25 of the CISG in that it "substantially deprives [buyer] of what he is entitled to expect under the contract";

THAT [seller] does not resume, before this Court, the supplementary argument presented before the Court of First Instance that the refusal to deliver was motivated by difficulties encountered in receipt of payment;

Considering THAT, on the basis of the damage undergone by [buyer], due to [seller]'s refusal to make and to sell, which [buyer] adds to the arguments of the cancellations of orders and the refusals to take delivery motivated by the delay of the delivery and the proximity of the period of the sales emanating from dozens of retail dealers as well as a more important number of notices of suspended deliveries established by the Calberson transport company for refused or not picked up goods;

THAT it thus gives evidence of [buyer]'s direct damages; [buyer] has also produced affidavits of two representatives stating the dissatisfaction of the retail dealers and the difficulties which [buyer] will encounter to keep them in the future;

BUT THAT these affidavits of 6 and 11 July 1995 are only hypothetical regarding the loss of clientele for future seasons and discounts to be granted to keep customers; THAT Article 74 of the CISG foresees, in compensation for a breach of contract, "[damages and interest] equal to the loss, including loss of profit ..."; THAT deterioration of commercial image [reputation] is not compensable damages in itself if it did not entail proved pecuniary damages;

THAT the Court thus affirms the judgment of the Court of First Instance as far as it assigned 712,879 f for compensation of damages undergone because of the refusal of delivery; THAT the Court modifies this judgment as far as it ordered the [seller] to pay 100,000 f as damages, and interest as compensation for the loss of brand image;

Considering THAT, on the basis of the law applicable to acts of unfair competition, it is traditional that the law applicable to civil offenses is the lex loci delicti; THAT, in a case like the one at bar, the alleged acts of unfair competition, took place in one State and produced effect in another, jurisprudence holds that [the places stand equally]; this location has to be considered as the location of the generation of the damages just like the location of the realization of the damages; THAT the Court applies French law, noticing that the alleged damage is situated according to [buyer], on the French market; SINCE French law punishes as acts of unfair competition the fact of creating in the mind of the clientele a confusion of the kind which re-links to the author of such acts the clientele of his competitor;

THAT in view of the disputed shoes, the Court notices that it is actually that the shoes, in the form of moccasins, ordered by [buyer], licensed Pierre Cardin, bore on the tongue, embossed leather of the same color as the shoe, the letters PR and that the shoes of the [seller], marketed under the mark Julio Blanco contained in the same place, embossed leather of the same color also, the letter M, widened in such way that it occupied the same space as both the letters PR;

THAT it is also actually on the right of the bottom of the tongue that [seller] placed a metal motif, certainly smaller, but of the same round shape as the one which decorates the shoes bearing the mark Pierre Cardin; THAT these resemblances are of such a kind as to attract the clientele which would normally seek the Pierre Cardin moccasins; THAT the risk of confusion is deliberate, as well as demonstrates the answer made by a retail dealer of Lyon to Mrs. Fradin, bailiff: "I have no right to sell Pierre Cardin, I sell only some off-label shoes, but it is the same thing as the Cartoufles. It is the house which made the Cartoufles, Pierre Cardin, which manufactured these shoes."

THAT confusion reigns in the mind even of professionals, since the store Audrey of Chambery sent to [buyer], for repair due to a broken heel, of a model sold by [seller] under the mark Julio Blanco;

THAT [seller] does not justify by any of the evidence its assertion that the shoes of the Cartoufle type which it marketed in Lyon, in 1996, were marketed by it before they were ordered from it by [buyer] in 1993, nor that they are shoes current on the market;

THAT the circumstance that the soles chosen by [buyer] to give some flexibility to the shoes that were manufactured by the Astra company of Saint-Etienne and could have been sold to whomsoever bought them, it is not likely to gum the [seller]'s imitation since it is not the designer of the whole, the upper leather, the strip decorated in two places and the sole;

THAT it results, still, from a letter of the Clervy company of Birmingham addressed to its customers, 10 September 1996, that [seller] presents itself as " a manufacturer which produces traditional men's shoes of a higher quality" and indicates that "Pierre Cardin, Bailly and Jean-Louis Sherrer (France) are customers of this firm", while the contract bearing on the manufacture of the shoes carrying the mark Pierre Cardin was broken since January 1995;

THAT the Bergeron company of Fort de France, in Martinique, states in a letter of 20 August 1996 that some of the products similar to the Cartoufle Pierre Cardin which [seller] flooded "the market of the Dom-Tom" at a price of 450 f / 480 f, while the goods manufactured by [buyer] are sold for approximately 790 f;

Considering the damage undergone by [buyer] because of the unfair competition of [seller], which, taking account of the presence of imitation products manufactured by [seller] on the metropole [French] and overseas markets as well as in the United Kingdom, of the stagnation of [buyer]'s turnover in 1995, of its fall of 4.4 MF, in 1996, until its resumption in 1997, the Court grants [buyer]'s request for damages and interest to the extent of 700,000 f;

Considering THAT, on the basis of the demand for 50,000 f brought under Article 700 of the New Code of Civil Procedure presented by [buyer], the Court finds that it is less than the total of the damages and interest for abuse of process (50,000 f) and than the indemnity under Article 700, properly stated (20,000 f) sought by [seller];

THAT [buyer] has thus had a better economic management of the internal and external costs of the lawsuit; the Court grants the demand;

For these reasons:

THE COURT RULING PUBLICLY, after having deliberated pursuant to the law,


ANNOUNCED publicly by M. Beraudo, Président, who has signed with Mme. Pelisson, Clerk.

(Signatures follow)


* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff-Appellant of Spain is referred to as [seller]; the Defendant-Respondent of France is referred to as [buyer]. Amounts in French currency (French francs) are indicated as [f].

** Charles Sant 'Elia has a B.A. in Political Science and Italian Literature from New York University and studied Political Science at the Universitá degli Studi di Firenze. He received his J.D. from Pace University School of Law and is admitted to the Bar of the States of New York and Connecticut. In addition to translations of French cases for the cisgw3 database, he has translated Italian decisions and texts on linguistics into English.

*** Kirstin Statlšnder is a student of law at Humboldt University Berlin. She was a member of the team of Humboldt University at the 9th Willem C. Vis International Commercial Arbitration Moot 2001/02 and is a coach of the team at the 10th Willem C. Vis International Commercial Arbitration Moot 2002/03.

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