Source: http://cisgw3.law.pace.edu/cases/990204f1.html
Timestamp: 2017-10-17 07:52:15+00:00
Document Index: 256872969

Matched Legal Cases: ["l'article 700", "l'article 700", "l'article 63", "l'article 62", "l'article 64", "l'article 25", "l'article 74", "l'article 700", "l'article 700"]

France 4 February 1999 Appellate Court Grenoble (Ego Fruits v. La Verja Begastri) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/990204f1.html]
Case text (French text and English translation)
DATE OF DECISIONS: 19990204 (4 February 1999)
TRIBUNAL: CA Grenoble [CA = Cour d'appel = Appeal Court]
JUDGE(S): Beraudo, président; Baumet and Landraud, conseillers; Pelisson, greffier
CASE NUMBER/DOCKET NUMBER: RG 98/02700 (appeal of decision RG 97008146)
CASE NAME: SARL Ego Fruits v. Sté La Verja Begasti
CASE HISTORY: 1st instance Tribunal de commerce de Romans 22 April 1998 [reversed]
GOODS INVOLVED: Orange juice
FRANCE: Court of Appeal of Grenoble 4 Febuary 1999
Case law on UNCITRAL texts (CLOUT) abstracts no. 243
The buyer, a French company, ordered 860,000 litres of pure orange juice from the seller, a Spanish company. The contract stipulated that the deliveries were to be staggered from May to December 1996. In return for a price reduction, the parties agreed that the September delivery would take place in late August. At the time of that delivery, the buyer refused the goods. However, in September, the buyer requested that the goods be delivered. Faced with the seller's refusal to deliver, the buyer obtained supplies elsewhere at a higher price and refused to pay for the previous deliveries.
The commercial Court of Romans, before which the case was brought by the Spanish seller, ordered the French company to pay the price of the goods on the ground that the seller was entitled to defer the performance of its obligations on account of the delay on the buyer's part in taking delivery.
The Court of Appeal set aside the ruling. It determined whether the seller was entitled to declare the contract avoided under article 64(1)(a) CISG. The judges held that the buyer had not committed a fundamental breach, as defined in article 25 CISG, by refusing to take delivery of the goods in late August. The buyer was entitled to regard the bringing forward of the delivery date to late August merely as a reciprocal concession for a financial advantage and could not be expected to have understood that a few days' delay in taking delivery would constitute a fundamental breach on its part. In the absence of any fundamental breach, the seller should have granted the buyer an additional period of time in which to take delivery. The seller's unilateral avoidance thus had to be construed, in the judges' opinion, as wrongful termination of the contract. The judges applied article 74 CISG to calculate the damages awarded to the buyer.
Key CISG provisions at issue: Articles 25 ; 63 ; 64(1)(a) ; 74 ; 64(1)(a) ; 75
25B [Definition of fundamental breach: few days delay in taking delivery not regarded as fundamental breach];
63A [Notice fixing additional final period buyer's performance: seller failed to avail himself of this alternative basis for setting up right to avoid contract];
64A1 ; 64A21 [Seller's right to avoid contract: buyer's fundamental breach; Alternative basis: buyer does not take delivery within an additional period set by seller];
75A [Damages established by substitute transaction]
Descriptors: Fundamental breach ; Avoidance ; Nachfrist ; Damages ; Cover transactions
Excerpt from Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 412-413
"A buyer's refusal to take delivery of goods may also not be considered a fundamental breach under certain circumstances. In [the] case involving staggered deliveries from May to December, the parties agreed that in return for a price reduction, the September delivery would take place in late August. At the time of delivery, the buyer refused the goods and demanded the delivery be postponed until September. [The] court determined that the buyer did not commit a fundamental breach, because the buyer was entitled to regard the bringing forward of the delivery date to late August as merely a reciprocal concession for a financial advantage. As such, it could not be expected to have understood that a few days' delay in taking delivery would constitute a fundamental breach on its part. Accordingly, the seller should have granted the buyer additional time in which to take delivery."
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=361&step=Abstract>
Original language (French): Text presented below; see also CISG - France website ("http://Witz.jura.uni-sb.de/CISG/decisions/040299v.htm"); Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=361&step=FullText>
English: Graffi, Case Law on the Concept of "Fundamental Breach" in the Vienna Sales Convention, Revue de droit des affaires internationales / International Business Law Journal, No. 3 (2003) 338-349 at n.60; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.504, 702-703, 746; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 25 para. 23
French: Witz, Receuil Dalloz (1999) 363-364
Case text (French text and English translation) [1]
Court of Appeals of Grenoble 4 February 1999
SARL Ego Fruits v. Société La Verga
Translation by Gary F. Bell [2]
ARRET DU JEUDI 04 FEVRIER 1999
DECISION OF THURSDAY 4 FEBRUARY 1999
Appel d'une décision (N0 RG 97008146)
rendue par le T.C. ROMANS
en date du 22 avril 1998
suivant déclaration d'appel du 15 Mai 1998
Appeal from a decision (No. RG 97008146)
Rendered by the Commercial Tribunal [Tribunal du commerce or T.C.] in Romans
On 22 April 1998
Following a declaration of appeal on 15 May 1998
SARL EGO FRUITS
représentée par Me Marie-France RAMILLON, avoué � la Cour assistée de Me CHAZAL, avocat au barreau de Valence
represented by Me [3] Marie-France RAMILLON, �avoué� to the Court assisted by Me CHAZAL, advocate of the Bar of Valence
Sté LA VERJA
représentée par la SCP Jean-Claude & Franck GRIMAUD, avoués � la Cour assistée de Me LE DISEZ, avocat au barreau de Grenoble
represented by the firm [Société civile professionnelle or SCP] Jean-Claude & Franck GRIMAUD, �avoués�[4] to the Court assisted by Me LE DISEZ, advocate of the Bar of Grenoble
M. Jean-Paul BERAUDO, PRESIDENT, M. Georges BAUMET, Conseiller, Mme Micheline LANDRAUD, Conseiller,
Assistés lors des débats de Mme Eliane PELISSON, GREFFIER,
DURING THE ARGUMENTS AND THE DELIBERATIONS:
Mr Jean-Paul BERAUDO, PRESIDENT, Mr Georges BAUMET, Counsellor, Ms Micheline LANDRAUD, Counsellor,
Assisted during the hearing by Ms Eliane PELISSON, GREFFIER,
A l'audience publique du 21 Janvier 1999, Les avoués et les avocats ont été entendus en leurs conclusions et plaidoiries,
At a public hearing on 21 January 1999, the arguments and pleadings of the �avoués� and advocates were heard,
Puis l'affaire a été mise en délibéré pour l'arr�t �tre rendu � l'audience de ce jour.
The case was then taken under consideration for a decision to be rendered at today�s session.
Attendu que la société EGO FRUITS, établie dans la Dr�me, a passé commande en mai 1996, � la société LA VERJA, établie dans la Province de Murcie en Espagne, de 860.000 litres de pur jus d'orange devant servir � son activité de fabrication et de commercialisation de jus de fruits;
Whereas [buyer],[5] of the region of Dr�me, in May 1996, had ordered from [seller] of the province of Murcia in Spain 860,000 litres of pure orange juice to be used for [buyer�s] business of making and commercializing fruit juices;
Que les livraisons devaient s'échelonner de mai � décembre 1996;
Whereas the deliveries were to be spread out from May to December 1996;
Que la société LA VERJA a cessé les livraisons � partir de septembre;
Whereas [seller] stopped deliveries from September;
Que la société EGO FRUITS a refusé de payer le prix des marchandises déj� livrées en alléguant qu'elle avait d� trouver un fournisseur de remplacement pratiquant des prix plus élevés;
Whereas [buyer] refused to pay the price of the goods already delivered alleging that it had to find a new supplier that charged higher prices;
Attendu que le jugement déféré a condamné la société EGO FRUITS � payer le prix des marchandises livrées au motif que la société LA VERJA était en droit de lui opposer � l'exceptio non adimple contractus � en raison de son retard � prendre livraison des marchandises tenues � sa disposition � la fin du mois d'ao�t;
Whereas the judgment appealed from ordered [buyer] to pay the price of the goods already delivered since [seller] was entitled to set up against [6] [buyer] the �exceptio non adimple [sic] contractus�[7] because of [buyer�s] delay in taking deliveries of goods made available to [buyer] at the end of August;
Attendu que, devant la Cour, la société EGO FRUITS conclut � l'infirmation et demande 10.000 F au titre de l'article 700 du Nouveau code de procédure civile;
Whereas before this Court, [buyer] asks that the lower tribunal�s decision be set aside and asks 10,000 f [French francs] under article 700 of the New Code of Civil Procedure;[8]
Qu'elle fait valoir, en substance, que le Tribunal a méconnu les stipulations de la convention de Vienne sur la vente internationale de marchandises, notamment ses articles 26, 63 et 64-1;
Whereas, [buyer] essentially argues that the tribunal below did not take into account the provisions of the Vienna Convention on the International Sale of Goods, particularly its articles 26, 63 and 64(1);
Qu'elle déduit de ces textes que � si le vendeur souhaite déclarer le contrat résolu pour pouvoir céder � des tiers la marchandise, il convient d'une part qu'il mette en demeure son cocontractant d'exécuter son obligation et d'autre part qu'il lui octroie un délai supplémentaire �;
Whereas [buyer] deduces from these texts that �if the seller wishes to avoid the contract in order to sell the goods to third parties, it is appropriate that [seller] puts his co-contracting party in default [�mise en demeure�] urging him to perform his obligations and grants him an additional period of time [for performance];
Attendu que la société LA VERJA conclut � la confirmation et demande 20.000 F au titre de l'article 700 du Nouveau code de procédure civile;
Whereas [seller] asks that the judgment be confirmed and asks 20,000 f under article 700 of the New Code of Civil Procedure;
Qu'elle fait valoir, en substance, que la période d'enl�vement des marchandises initialement échelonnée jusque début septembre avait été raccourcie � fin ao�t en contrepartie d'une réduction de prix;
Whereas [seller] essentially argues that the period for picking up the goods that was initially spread out up to the beginning of September was shortened to the end of August in return for a reduction in price;
Qu'elle indique que le retard de la société EGO FRUITS lui a causé des difficultés de stockage et l'a obligée � concentrer le jus d'orange pour qu'il ne soit pas perdu de sorte qu'elle n'était plus � m�me de livrer le produit convenu;
Whereas [seller] points out that the delay by [buyer] caused stocking problems and forced [seller] to concentrate the orange juice so as not to lose it and therefore [seller] was no longer able to deliver it at the agreed price;
Qu'elle ajoute que l'article 63 de la Convention de Vienne n'oblige pas le vendeur � accorder un délai � l'acheteur défaillant et que � compte tenu des impératifs de stockage et de la conservation de la marchandise mais aussi des fluctuations des cours monétaires, ... la société LA VERJA n�avait d�autre solution que celle qu'elle a mise en oeuvre, ... que ce moyen est le � moyen incompatible � visé � l'article 62 de la Convention de Vienne �;
Whereas [seller] adds that article 63 of the Vienna Convention does not force a seller to grant an additional period of time to a buyer who is in breach and that �considering exigencies with respect to stocking and the preservation of the goods and also the fluctuation of currency rates, � [seller] had no other solution but the one it put in place, � that the remedy [of an additional period of time] is the �inconsistent remedy� provided by article 62 of the Vienna Convention�;
Attendu qu'il est constant entre les parties que la société EGO FRUITS n'a pas pris livraison de la totalité du jus d'orange objet du contrat de vente � la fin du mois d'ao�t ainsi qu�il avait été stipulé dans un amendement au contrat initial et que le 03 septembre, la société LA VERJA a fait conna�tre � la société EGO FRUITS qu'elle n'avait plus de � pur jus d'orange �;
Whereas it is agreed between the parties that [buyer] did not take full delivery of the orange juice that was the object of the sale contract at the end of August as had been stipulated in an amendment to the initial contract and that on 3 September, [seller] told [buyer] that it no longer had �pure orange juice�;
Attendu que l'article 64-1-a de la Convention de Vienne permet au vendeur de déclarer immédiatement le contrat résolu � si l'inexécution par l'acheteur de l'une quelconque des obligations résultant pour lui du contrat.. constitue une contravention essentielle au contrat �;
Whereas article 64(1)(a) of the Vienna Convention allows the seller to declare the contract avoided �if the failure by the buyer to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract�;
Que la télécopie en date du 03 septembre faisant état d'un manque de produit, éclairée par un autre message du surlendemain reprochant l'absence de prise de livraison fin ao�t, s'analyse en une résolution du contrat;
Whereas [seller�s] fax of 3 September mentioning the lack of product [i.e., no more orange juice available], in light of another message [from seller] two days later complaining about the lack of taking delivery at the end of August, can be seen as an avoidance of contract;
Qu'il convient de rechercher si le comportement de l'acheteur constitue une contravention essentielle;
Whereas we must determine whether the behavior of the buyer is a fundamental breach [the French version of the Convention could be translated literally by �an �essential� breach�];
Attendu que l'article 25 de la Convention de Vienne définit la contravention essentielle comme celle qui � cause � l'autre partie un préjudice tel qu'elle la prive substantiellement de ce qu'elle était en droit d'attendre du contrat �; Que le m�me article admet une dérogation au régime applicable � la contravention essentielle lorsque la partie en défaut n'a � pas prévu un tel résultat et qu'une personne raisonnable de m�me qualité placée dans la m�me situation ne l'aurait pas prévu non plus �;
Whereas article 25 of the Vienna Convention defines a fundamental breach as a breach of contract that �results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract�; whereas the same article allows an exception to the fundamental breach regime when 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�;
Qu'il y a donc contravention essentielle lorsque l'obligation méconnue a été envisagée comme substantielle par le créancier et que le débiteur a pu la percevoir comme telle;
Whereas there is therefore a fundamental breach when the unperformed obligation was foreseen as substantial by the person to whom it is owed [créancier] and that the one who owes it [débiteur] could have perceived it as such;
Attendu que pour apprécier si le défaut de prise de livraison des marchandises fin ao�t constitue une contravention essentielle il y a lieu de rechercher dans quel contexte cette période a été convenue;
Whereas in order to determine whether the breach of not taking delivery at the end of August is fundamental, we must look at the context in which this timing was agreed to;
Qu'il convient de rappeler que, dans le contrat initial, les enl�vements de marchandises devaient se faire au-del� du mois d'ao�t; Que c'est en contrepartie d'une demande de baisse de prix émanant de la société EGO FRUITS que la société LA VERJA a obtenu que les prises de livraison aient lieu avant la fin du mois d'ao�t;
Whereas it is appropriate to recall that, in the initial contract, the taking of the goods was to take place beyond the end of August; Whereas [seller] obtained that the taking of all deliveries would take place before the end of the month of August following a request by [buyer] for a reduction of price;
Que, dans la télécopie du 11 juin 1996, elle s'est exprimée dans les termes suivants:
Whereas in a fax dated 11 June 1996 [seller] expressed itself as follows:
� Je prends note de votre difficulté pour élever le prix � votre client..� Faites, vous, l'effort de m'enlever tout entre juin, juillet et ao�t et je peux arriver � 55 pesetas �;
�I note the difficulties you face in raising the price for your clients �� On your part, make the effort of taking everything in June, July and August and I could come [down] to 55 [Spanish] pesetas�;
Que la Cour ne peut que constater qu'� aucun moment avant le message du 05 septembre 1996, la société LA VERJA n'a fait état de l'instabilité du pur jus d'orange et de la nécessité de le concentrer apr�s le mois d'ao�t; Qu'en outre les achats de remplacement réalisés par la société EGO FRUITS jusqu'en décembre 1996 ont porté sur du � pur jus d'orange � de la saison 1996;
Whereas the Court can only conclude that at no time before the message of 5 September 1996 did [seller] mention the instability of the pure orange juice and the necessity to concentrate it after the end of August; Whereas the replacement purchases made by [buyer] up to December 1996 were of �pure orange juice� of the 1996 season;
Que l'avancement � la fin ao�t de la prise de livraison a été présentée par la société LA VERJA comme une simple contrepartie � un avantage financier;
Whereas the earlier taking of delivery at the end of August was introduced by [seller] as a simple counterpart to a financial advantage;
Que la société EGO FRUITS ne pouvait pas comprendre qu'un retard de quelques jours � prendre livraison ‑ la date de livraison proposée par télécopie du 02 septembre était le 11 septembre ‑ constituerait de sa part une contravention essentielle;
Whereas [buyer] could not have understood that a delay of a few days in taking delivery � the date proposed for taking delivery in [seller�s] fax of 2 September was 11 September � could amount to a fundamental breach on [seller�s] part;
Que, dans le contexte de l'accord sur cette seconde date, le manquement � l'obligation de prendre livraison devait normalement avoir pour conséquence la suppression de la remise sur le prix;
Whereas, in the context of the agreement on this second date, the breach of the obligation to take delivery would normally have as a consequence the cancellation of the discount on the price;
Attendu, en conséquence, qu'en l'absence de contravention essentielle de la part de la société EGO FRUITS, la société LA VERJA devait lui impartir un délai supplémentaire pour prendre livraison; Qu'en ne le faisant pas, la société LA VERJA a commis une rupture fautive du contrat;
Whereas, consequently, in the absence of a fundamental breach on the part of [buyer], [seller] had to grant [9] [buyer] an additional period of time to take delivery of the goods; whereas by not doing so [seller] committed a fault by breaking the contract;[10]
Que son refus de livrer a obligé la société EGO FRUITS � procéder � un achat de remplacement; Que l'article 74 de la Convention de Vienne lui permet d'obtenir � titre de dommages-intér�ts � la différence entre le prix du contrat et le prix de l'achat de remplacement �;
Whereas [seller�s] refusal to deliver forced [buyer] to make a replacement purchase; whereas article 74 of the Vienna Convention allows [buyer] to recover as damages �the difference between the contract price and the price of the replacement purchase�;[11]
Attendu que la société EGO FRUITS justifie par des factures de la société MANDY, de la société Processed Fruit Suppliers, de la société Inducitric et de la société NUFRI avoir acquis de septembre � décembre 1996 570.039 litres de pur jus d'orange � un prix moyen de 2,60 F le litre au lieu de 2,17 F le litre comme il était convenu avec la société LA VERJA;
Whereas [buyer] proves with bills from MANDY company, Processed Fruit Suppliers company, Inducitric Company and NUFRI company that [buyer] purchased from September to December 1996 570,039 litres of pure orange juice at an average price of 2.60 f per litre instead of 2.17 as had been agreed with [seller];
Que le surco�t a été de 570.039 litres x 0,43 F, soit 245.116 F;
Whereas the additional cost was 570,039 litres times 0.43 f, that is, 245,116 f;
Qu'en revanche, elle ne produit pas de pi�ces de nature � justifier sa perte de marge brute de 45.000 F;
Whereas, on the other hand, [buyer] did not provide evidence justifying its loss of gross margin of 45,000 f;
Que la Cour alloue � la société EGO FRUITS 245.116 F � titre de dommages-intér�ts;
Whereas the Court grants [buyer] 245,116 f as damages;
Attendu, sur le compte entre les parties, que la société EGO FRUITS se reconna�t débitrice de 6.495.620 pesetas, somme que le Tribunal l'a condamnée � payer, soit 39.039,46 Euros (6.495.620 / 166,386);
Whereas, on accounts between the parties, [buyer] recognizes owing 6,495,620 pesetas, an amount the tribunal ordered [buyer] to pay, that is, 39,039.46 Euros (6,495,620 divided by 166.386);
Qu'elle est créanci�re de 245.116 F, soit 37.367,69 Euros (245.116 / 6,55957);
Whereas [buyer] is owed 245,116 f, that is, 37,367.69 Euros (245,116 divided by 6.55957);
Qu'il y a lieu de compenser ces deux sommes et de juger que la société EGO FRUITS doit payer � la société LA VERJA la somme de 1.671,77 Euros;
Whereas we must set off these two amounts and therefore decide that [buyer] must pay [seller] the amount of 1,671.77 Euros;
Attendu, sur la somme de 10.000 F réclamée au titre de l'article 700 du Nouveau code de procédure civile, par la société EGO FRUITS, qu'elle est inférieure de moitié � ce que la société LA VERJA demande du m�me chef;
Whereas, on the amount of 10,000 f requested under article 700 of the New Code of Civil Procedure by [buyer], it is less than half of what [seller] requests under the same article;
Que la Cour y fait donc droit;
Whereas the Court therefore grants it;
PAR CES MOTIFS LA COUR:
Statuant publiquement et par arr�t contradictoire, apr�s en avoir délibéré conformément � la loi;
Pronouncing judgment publicly and on a contested case after deliberations as required by law;
REVERSES the judgment below;
JUGE que la société LA VERJA a rompu abusivement le contrat qui la liait � la société EGO FRUITS;
DECIDES that [seller] abusively breached the contract it had with [buyer];
LA CONDAMNE � payer � la société EGO FRUITS 37.367,69 Euros � titre de dommages-intér�ts;
ORDERS [seller] to pay [buyer] 37,367.69 Euros in damages;
DONNE ACTE � la société EGO FRUITS de ce qu'elle se reconna�t débitrice de 6.495.620 pesetas, soit 39.039,46 Euros;
ACKOWLEDGES that [buyer] recognizes owing 6,495,620 pesetas, that is 39,039.46 Euros;
COMPENSE les deux sommes;
SETS OFF the two amounts;
CONDAMNE la société EGO FRUITS � payer � la société LA VERJA 1.671,11 Euros;
ORDERS [buyer] to pay [seller] 1,671.11 Euros;
CONDAMNE la société LA VERJA � payer � la société EGO FRUITS la contrepartie en Euros de la somme de 10.000 F, allouée au titre de l'article 700 du Nouveau code de procédure civile, soit 1.524,49 Euros;
ORDERS [seller] to pay [buyer] the equivalent in Euros of the 10,000 f granted under article 700 of the New Code of Civil Procedure, that is, 1,524.49 Euros;
CONDAMNE la société EGO FRUITS � payer � la société LA VERJA 147,28 Euros;
ORDERS [buyer] to pay [seller] 147.28 Euros;
CONDAMNE la société LA VERJA aux entiers dépens dont distraction au profit de Ma�tre RAMILLON.
ORDERS [seller] to pay full cost [i.e., chargeable lawyers fees] including the share of Me Ramillon.
PRONONC� publiquement par Monsieur BERAUDO, Président, qui a signé avec Madame PELISSON, Greffier.
PRONOUNCED publicly by Mr Beraudo, Président, who signed along with Ms PELISSON, Greffier.
1. � Gary F Bell, 2001. The original text is reproduced at http://witz.jura.uni-sb.de/CISG/decisions/040299v.htm.
2. Associate Professor, Faculty of Law, National University of Singapore. The English translation is based on the text found at the web site mentioned above. Text in square brackets and footnotes are added by the translator. Many thanks to my colleague Alex Loke for his comments on an earlier version.
3. �Me� stands for �ma�tre� (master), the title for lawyers and notaries in French.
4. An avoué is a kind of barrister accredited with a certain court and authorized to perform certain acts.
5. In this translation, the term [buyer] has been substituted for EGO FRUITS, and the term [seller] for LA VERJA.
6. The French is �opposer�, i.e., to oppose.
7. The exception is usually referred to as exceptio non adempleti contractus�. The original text was not checked; the translator relies on the HTML version of the decision.
8. Art. 700 provides for cost, i.e., lawyers fees.
9. The French �impartir un délai supplémentaire� is identical to the French version of article 47 of the CISG.� The English version of the article uses the verb �fix� which is hard to use in translating this particular sentence of the decision.� I have used �grant� instead even though it is not faithful to the CISG.
10. Rupture fautive du contrat� is hard to translate. It refers to the civilian concept of contractual �fault� which is required for liability in cases of breach of contract. It is a breach of contract with fault on the part of one of the parties.� I translated by �a fault by breaking the contract� which is not entirely accurate.
11. The quote is literally translated from the French text quoted in the judgment. The text is not from article 74 of the CISG.