Greece 2003 Decision 14953/2003 of the Single-Member Court of First Instance of Thessalonika (Shock absorber case) [editorial analysis available]
[Cite as: http://cisgw3.law.pace.edu/cases/030001gr.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 14953/2003
CASE HISTORY: Unavailable
SELLER'S COUNTRY: France (plaintiff)
BUYER'S COUNTRY: Greece (defendant)
GOODS INVOLVED: Automobile shock absorbers
APPLICATION OF CISG: Yes [Article 1(1)(b)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
25B [Definition of fundamental breach]; 26A1 [Effective declaration of avoidance: notice to other party required]; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]
25B [Definition of fundamental breach];
26A1 [Effective declaration of avoidance: notice to other party required];
39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]
EDITOR: Dionysios P. Flambouras [*]
A French company [Seller] sold to a Greek company [Buyer] automobile shock absorbers for 132,150 French francs. The contract of sale was concluded on 24 July, 1998. The Buyer received the goods on 24 July, 1998, re-sold them to its clients and the latter immediately returned them to the Buyer [non-conformity: boxes titled "front AUDI automobile shock absorbers" but contained back PASSAT automobile shock absorbers; delivery of front or back GOLF automobile shock absorbers but not of full sets]. Then the Buyer sent a facsimile to the Seller on 6 October, 1998, informing the latter about the non-conformity and declared the contract avoided. The Seller replied on 22 October, 1998 by facsimile having, among others, the following content: "… [P]lease send me the catalogue, pack the automobile shock absorbers and we will contact with you shortly in order to arrange details for their return…". Despite the above, the Seller did not make any act to repossess the goods stored by the Buyer; on the opposite, the Seller filed a claim against the Buyer requesting payment of the purchase price. The court rejected the Seller's claim on the ground that the Buyer had successfully avoided the contract of sale.
2.1 Application of the CISG
At the time of conclusion of the contract of sale the CISG applied in France, but not in Greece [the CISG was ratified in Greece by virtue of Law 2532/1997 and entered into effect as of 1 February, 1999] [CISG arts. 99 and 100]. The CISG applied by virtue of art. 1(1)(b) thereof, since the private international law rules of France referred to the law of a Contracting State. In particular, the contracting parties had not selected an applicable law for the sales contract and the court, in order to determine the applicable law, referred to the conflict rules contained in the Rome Convention of 1980, ratified in Greece by law 1792/1988 (Gov. Gazette 142/1988). Since the contracting parties had not selected an applicable law to govern their sales contract (art. 3 of Law 1792/1988), it was adjudicated that the sales contract was governed by the law with which is more closely connected (art. 4 § 1 of Law 1792/1988); in order for the court to find the law which is more closely connected to the contract, it applied the presumption of the characteristic obligation provided by art. 4 § 2 of Law 1792/1988. The court further accepted that in a sales contract the characteristic obligation must be fulfilled by the seller (i.e., the delivery of the goods against payment of its price) and, therefore, in the absence of an agreement to the contrary, the law of the seller's country is the applies (French law). Since France had ratified the CISG at the time of conclusion of the contract, the court applied the CISG by virtue of CISG art. 1(1)(b).
2.2 Fundamental breach
The court judged that a breach is fundamental for the purposes of CISG art. 25 when, due to lack of conformity, the buyer cannot resell the goods: in particular, the automobile shock absorbers which where sold to the Buyer did not conform with the contractual description (see above paragraph 1); the court judged that this fact deprived the Buyer of what the Buyer was entitled to expect from the specific sale contract, i.e., to resell the goods purchased for a profit (since the shock absorbers that were delivered to the buyer could not be installed in the specific types of vehicles of the Buyer's customers and the latter returned the car shock absorbers to the Seller); therefore, the first criterion of CISG art. 25 ["A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract…"] was met and, since, in the court's opinion, there was a fundamental breach of contract by Seller, the Buyer was entitled to declare the contract avoided. It has to be noted that the court did not examine whether the second criterion of CISG art. 25 was fulfilled ["…unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result"].
2.3 Reasonableness of notice period
The court found that the reasonableness of a notice period for the purposes of CISG art. 39(1) is based on the particular circumstances of each examined case and mainly on the nature of the goods (e.g., for consumables the reasonable period corresponds to a few days or sometimes even a few hours), the fraudulent character of the counter-contractual behavior (which normally extends the time limits), but also the nature of the remedy that the buyer is going to exercise (therefore, when the buyer intends to declare the contract avoided (see CISG art. 49(1)(a)) or to request the replacement of the goods (see CISG art. 46(2), the notice for the lack of conformity must be served in a short time; it is possible however that the same does not apply when the buyer intends to keep the goods and claim damages (see CISG art. 45(1)(b)) or reduction of price (see CISG art. 50).
Based on the above, the court ruled that a period of approximately two and one-half months [receipt of the goods by the Buyer on 24 July, 1998 -- facsimile by the Buyer avoiding the contract on 6 October, 1998] was a reasonable notice period for the purposes of CISG art. 39(1).
2.4 Avoidance of contract
The court found that avoidance can be declared with an informal notification which produces legal effect as of the time of its dispatch to the Seller (CISG art. 26).
Based on this, the court found that the Buyer had successfully avoided the sale contract (facsimile 6 October, 1998) and that the Seller had accepted the avoidance (facsimile 22 October, 1998) and therefore rejected the Seller's claim for recovery of the purchase price.
2.5 Other citations
See also excerpt from commentary by Dionysios P. Flambouras "Case Law of Greek Courts for the Vienna Convention (1980) for International Sale of Goods" (publication forthcoming in the Nordic Journal of Commercial Law).
* Adjunct Lecturer (PD 407) in Civil Law, University of Athens (Dep. of Economics); Advocate of the Athens Bar, Solicitor in England & Wales; Member of M. & P. Bernitsas Law Offices. LL.M. (Brist.), M. Stud. (Oxon), Dr. Jur. in Civil Law (Athens).Go to Case Table of Contents
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Greek): Click here for Greek text; see also NOMOS legal database no. 432741
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents