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Document Index: 5035691

Matched Legal Cases: ['Art. 1', 'art. 66', 'art. 1', 'art. 1', 'art. 1', 'art. 1']

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DATE OF DECISION: 20081211 (11 December 2008) JURISDICTION: Italy TRIBUNAL: Tribunale di Forli JUDGE(S): Dott. Francesco Cortesi CASE NUMBER/DOCKET NUMBER: n.2280/2007
CASE NAME: Mitias v. Solidea S.r.l CASE HISTORY: Unavailable
SELLER'S COUNTRY: Italy (defendant) BUYER'S COUNTRY: Slovenia (plaintiff) GOODS INVOLVED: Shoes Classification of issues present
APPLICATION OF CISG: Yes [Art. 1(1)(a)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles 7 ; 25 ; 35 ; 39 ; 49 ; 84 [Also cited; Articles 3 ; 6 ; 9 ; 30 ; 38 ; 53 ; 85 ; 86 ] Classification of issues using UNCITRAL classification code
Descriptors: Internationality ; Fundamental breach ; Avoidance ; Conformity of goods ; Notice of lack of conformity, timeliness ; Interest Go to Case Table of Contents Editorial remarks
In this decision, the District Court (of Forli) gave a clear definition of the concept of fundamental breach
of an international sales contract and outlined the right of the buyer to avoid the contract. This case is
therefore a valuable contribution to the interpretation of some essential provisions of the United Nations
Convention on Contracts for the International Sale of Goods 1980 (ratified in Italy via Law no. 765 of
11 December 1988, entered into force on 1 January 1988).
The buyer, a company incorporated under Slovenian law, brought from the seller, an Italian limited
company, various models of shoes, paying the agreed amount of around EUR 7,000.
After delivery, the buyer discovered defects in a great part of the purchased items, thus the goods could
not be sold to third parties. The buyer immediately sent various messages to the seller stating the
non-conformity of the goods. In these messages, the buyer asked the seller to send its representative to
inspect the defective goods and to replace the items that were not in conformity with the contract. In his
reply, the seller admitted liability and offered replacement of the defective goods. The buyer replied that
it was interested in substituting some models (value around EUR 850) for those that the seller had
offered as substitutes and requested the restitution of the higher amount of money that had originally
been paid. The latter request for restitution was rejected by the seller. The latter declared itself available
for the replacement of the goods only. The buyer pleaded the right of restitution of the amount paid for
the defective goods; the seller did not participate in the proceedings. At the first hearing, the judge
declared proceedings would take place on the sole basis of the documents disclosed.
The Court declared its jurisdiction over the parties pursuant to European Regulation no. 44/2001 on
Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, which
is applicable to the present case from both a temporal and substantial point of view.
According to the Court, the substantive rules provided in the CISG are applicable. According to
Articles 30 and 53 CISG, the seller had to deliver the goods (the shoes) and the buyer had to pay the
price for these goods. Therefore the Convention is applicable rather than national Italian law. In his
claim, the buyer had originally argued under Italian national law.
Disclosed documents that were not opposed by the seller proved that the buyer discovered the defects
in the goods immediately after delivery and gave a detailed notice of them to the seller by e-mail seven
days after the goods had arrived at its premises. On this occasion the buyer proposed the substitution of
the non-conforming goods with other non-defective goods. In its reply acknowledging the receipt of the
notice, the seller apologized for the defects in the shoes and declared that it did not have available
goods for immediate replacement. The seller offered alternative replacement shoes from the next
season's collection. The buyer party accepted the offer and requested restitution of the price paid for
those defective goods that were not adequately recompensed by the other goods from the seller.
Article 35 of the CISG obliges the seller to deliver goods that are of the quantity, quality and
description required by the contract. If the quality is not determined by the parties or if it is not possible
- according to Article 9 CISG - to derive the requisite quality by referring to usages or practice
established between the parties, reference has to be made to Article 35(2) in order to determine the
characteristics that the goods must possess. In the present case, there was no doubt that the goods
must have been at least fit for resale. The court had no doubt about the lack of conformity of the goods
According to Article 39(1) CISG, the buyer specified the nature of the lack of conformity within a
reasonable time of discovery. In the present case, it was proved that the buyer inspected the goods at
the time of delivery and that the criteria of Article 38 therefore were met. The seller accepted the notice
as sent within a reasonable time by offering substitute goods to keep the contract alive.
The request by the buyer for partial avoidance of the contract expressed is allowed. The CISG links
specific consequences to the concept of fundamental breach, allowing the party that acted according to
the contract to declare the contract avoided in its entirety or offering the buyer substitute goods. Article
25 provides a definition of fundamental breach. That provision is recalled in Article 49, also stating the
circumstances in which the buyer can avoid the contract.
Article 25 CISG does not specify when a fundamental breach is relevant but simply contains the criteria
for distinguishing between a fundamental and a non-fundamental breach the effects of which have to be
determined - according to the above-referenced interpretative method - by other articles of the CISG
connected to or based on Article 25. The Convention does not differentiate between the breach of a
main obligation and an ancillary obligation. Even a breach of an ancillary obligation may be considered
fundamental if it is firmly connected to the trade in goods. Article 25 gives a uniform definition without
distinguishing several types of breach, such as delay, non-payment, impossibility to perform or
According to a basic principle of the CISG, the avoidance of the contract is to be regarded as extrema
ratio. Thus only where lack of conformity cannot be remedied by the seller or can only be remedied
with serious inconvenience to the buyer, is there the chance to avoid the contract. If performance were
still possible, the buyer would still have an interest in keeping the contract alive.
From the seller's behaviour, the Court concluded that the defects could not be removed: the offer made
it clear that the shoes would have been replaced by different items that the buyer declared not fit or its
retail market. This offer was not adequate for making up for the lack of conformity without an
unreasonable inconvenience to the buyer. It is therefore reasonable that the buyer refused the offer to
remedy. The fundamental breach thus legally leads to avoidance of the contract.
CITATIONS TO TEXT OF DECISION Original language (Italian): Click here for Italian text of case; see also Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1372&step=FullText>
Dr. Francesco Cortesi, sitting as a sole judge, rendered judgment in the civil proceedings of first instance,
filed as n. 2280 in the court's general register for the year 2007 between:
Plaintiff: MITIAS d.o.o. [Buyer], acting through its legal representative pro tempore Seiko
Scagnetti, a company incorporated under Slovenian law, with its main business office in Koper,
Ankaranska 5B, registration no. SI65559428, for the present purposes having domicile in Forli'
at via J. Allegretti 17, seat of the legal office of Roberto Roccari who jointly represents this
company with Rado Race of Trieste's Bar in the present litigation proceedings, power of attorney
reproduced at the bottom of the statement of claim and
- Preliminarily declare the non-conformity of the goods received by the [Buyer], of which formal notice
has been given to the [Seller] within the legal time-limit;
- Ascertain that the [Seller] owes Euro 6,779.00 to the [Buyer] for the cost of the goods, Euro 125.00
monthly for storage costs from the day of delivery until the day of re-delivery or of payment, and
interest at the legal rate from the date of each advanced payment until the payment of the final balance
and, consequently, order the [Seller] to pay to the [Buyer] the aforementioned amounts along with
interest at the legal rate from the date of each advanced payment until the payment of the final balance; - Order the [Seller] to pay litigation costs.
THE PROCEEDINGS The [Buyer] sued the [Seller] alleging that: - The [Buyer] bought several different models of shoes from the [Seller], fully paying the agreed
amount of Euro 7,030.80 plus transportation / delivery costs;
- After delivery, which took place on 26 October 2006, the [Buyer] discovered defects in a great part
of the purchased items that rendered them non-merchantable;
- [Buyer] sent notice of the alleged non-conformity to the [Seller] by e-mail dated 2 November 2006
requesting the [Seller] to send its personnel for inspection of the defective goods and to replace the
non-conforming items;
- To this notice, reiterated in e-mails dated 13 November and 17 November, the [Seller] replied on
20 November 2006 admitting its liability, and offering to replace the defective goods with different
items of the collection produced;
- [Buyer] replied expressing interest in the substitution of some models with the ones offered in
substitution by the [Seller] (whose value amounted to Euro 846.00) and requested the restitution of
the higher amount paid;
- [Seller] rejected the request of restitution of money and declared itself only available to replace the
Against this background, the [Buyer] pleaded its right to obtain the restitution of the amount paid for the
defective goods, i.e., deducting from the amount paid the value of the defective items, and requested the
Court to order [Seller] to pay this amount -- corresponding to Euro 6,779.00, not inclusive of the monthly
cost of storage, amounting to Euro 125.00 -- and interest.
At the first hearing, the judge decided to proceed on the sole basis of the documents disclosed, ordered
no further gathering of evidence, and he reserved to render his final decision after having dealt with the
proceedings under article 281 quinquies Italian Code of Civil Procedure.
1. Preliminarily, the Court declares its jurisdiction over the parties pursuant to European Regulation n.
44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial
Matters, which is applicable to the present case from both a temporal and substantial point of view.
1.1 From the temporal point of view, indeed, the European Regulation is applicable because the lawsuit
has been brought after the entry into force of that Regulation (see art. 66), i.e., after 1 March 2002.
1.2 With reference to the substantial point of view, it is well known that the dispute has to concern a
"civil and commercial matter" (art. 1(1) of the Regulation). The Regulation, indeed, does not specify when
such circumstance occurs; that does not, however, lead to "interpreting the legislative terminology as a
mere renvoi to the national legislation of one of the States concerned" (ECJ, decision 14 November
2002, case 271/00, Gemeente Steenbergen, para 28). It is instead necessary to interpret the concept
"autonomously", as stressed by the ECJ jurisprudence in relation to the Bruxelles Convention. See:
- Decision 21 April 1993, case 172/91, Volker Sonntag, para 18; - Decision 16 December 1980, case 814/79, Niederlande, para 7;
The latter jurisprudence can without doubt be taken into account for the proposition that it is
important to "guarantee the continuity between the Bruxelles Convention and the present
Regulation", to which refers to the "considering" no. 19. See:
- Tribunale Padova [Italy], 10 January 2006 in Giur. Merito 2006, 91 et
From the aforesaid, the present dispute undoubtedly is a "civil and commercial matter" as it
concerns a sales contract. Moreover, the Regulation is also applicable as the dispute is not included
among the subject matters listed in art. 1(2) for which the applicabilityof the Regulation is excluded.
1.3 As the Regulation is applicable, it consequently follows that it is the duty of the Court to
verify ex officio, see:
- Voorzieningenrechter Rechtbank s'Gravenhage [Netherlands], in Nederlands Internationaal
Privaatrecht 2005, 232,
its own jurisdiction according to article 26 of the Regulation, especially (as in the present
circumstance) where the [Seller], having its place of business in a member State, is sued in a Court
of another member State and does not participate to the proceedings. With reference to the present case, a positive answer has to be given to that question according
to the fundamental criterion of the jurisdiction of the Court of the defendant's domicile, in
application of the principle actor sequitur forum rei (ECJ, 13 July 2000, case 412/98, Group
JosiReinsurance Company SA, para 35), endorsed in article 2 of the Regulation with the aim of
"providing the defendant, generally, with an easier way of defense" (see ibid.; see also ECJ,
17 June 1992, case 26/91, Handte, Racc. page I-3967, para 14), and the defendant being
domiciled in the Italian territory according to article 60 of the said Regulation.
2. Having declared the jurisdiction of this Tribunal, the present case needs some considerations
about the applicable law.
Without any doubt, the contractual relation has an international character, the [Buyer] being a
Slovenian company and the [Seller] an Italian company.
The [Buyer] argued under Italian law, considering it -- implicitly -- to be the applicable law under
International Private Law. Nonetheless, the Court considers that in lieu of an International Private
Law approach, it favors the application of the substantive rules provided in the United Nation
Convention on Contracts for the International Sale of Goods 1980, ratified [by the Italian
Republic], Law of 11 December 1985 n. 765, which entered into force on 1 January 1988.
- Trib. Pavia [Italy] [(Tessile S.r.l. v. Ixele S.A)], 29 December 1999, in Corr. Giur. 2000,
932 et seq. [available in English translation at
<http://cisgw3.law.pace.edu/cases/991229i3.html>];
- Trib. Vigevano [Italy] [(Rheinland Vertsicherungen v. Atlarex)], 12 July 2000, in Giur. it.
2001, 280 et seq. [available in English translation at
<http://cisgw3.law.pace.edu/cases/000712i3.html>];
- Trib. Padova [Italy] [(Agricultural products case)], 25 February 2004, in Giur. it. 2004,
1405 et seq. [available in English translation at
<http://cisgw3.law.pace.edu/cases/040225i3.html>];
- Trib. Padova [Italy] [(Pizza boxes case)], 31 March 2004, in Giur. merito 2004, 1065 et
seq. [available in English translation at <http://cisgw3.law.pace.edu/cases/040331i3.html>];
- Trib. Padova [Italy] [(Ostorznik Savo v. La Farrona)], 11 January 2005, in Riv. dir. int.
priv. e proc. 2005, 791 et seq.) [available in English translation at
<http://cisgw3.law.pace.edu/cases/050111i3.html>], is based on considerations relating the
nature of conventions on uniform substantive law.
2.1 A convention such as the CISG, first of all, has a special application, more limited than the
rules of International Private Law. The United Nation Convention on Contracts for the International
Sale of Goods 1980, specifically, regulates solely the sales contract, whose international character
depends on the different national places of business of the contracting parties, as opposed to the
Rules of International Private Law that refer to all kind of contracts, without any sort of limitation.
Moreover, and most importantly, the specificity -- and thus the prevalence -- of the uniform
substantive rules is based on the mechanism they offer for settling the substantive issues at stake.
The substantive rules have to be considered specific because they directly address those issues,
avoiding the double step necessary for the application of the international private law, consisting,
first, in the determination of the applicable law based on the connections' criteria and then in its
It still has to be ascertained whether the prerequisites for the applicability of the Vienna Convention
From an objective standpoint, the contract has to be a sales contract. It has been pointed out in
the jurisprudence that there is no definition of what constitutes a sales contract in the Convention.
- Trib. Padova [Italy] [(Agricultural products case)], 25 February 2004 [Italy], quoted
- Kantonsgericht Schaffhausen [Switzerland] [(Machinery case)], 25 February 2002, available
at <http://www.cisg-online.ch/cisg/urteile/723.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/020225s1.html>];
- Cour d'appel Colmar [France] [(Polyurethane case)], 12 June 2001, available at
<http://witz.jura.uni-sb.de/CISG/decisions/120601v.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/010612f1.html>].
See also: - Tribunal Cantonal de Vaud [Switzerland] [(Aluminum granules case)], 11 March 1996,
available at <http://www.unilex.info/case.cfm?pid=1&do=case&id=320&step=FullText>
[available in English translation at <http://cisgw3.law.pace.edu/cases/960311s2.html>];
- Oberster Gerichtshof [Austria] [(Chinchilla furs case)], 10 November 1994, available at
<http://www.cisg.at/2_54793.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/941110a3.html>].
Thus a preliminary investigation as to the object of the dispute is necessary for setting it in the
In Italy, between a statute that regulates a particular matter with general principles (lex generalis) and another statute that regulates the same matter narrowly (lex specialis), the Courts apply to the cases the latter. 2.2 Thus, it is not correct to refer to the definition provided for by the domestic (Italian) law,
see supra: - Trib. Padova [Italy] [(Ostorznik Sano v. La Farrona)], 11 January
- Trib. Padova [Italy] [(Agricultural products case)], 25 February
and especially to the definition provided in article 1470 of the Italian Civil Code. Instead, the
concept of "sale" in the Convention has to be autonomously determined, without referring to
specific notions of a particular national legislation (the same applies to the greatest part of the
relevant concepts [in the Convention], such as "place of business", "habitual residence", "goods").
In that regard, attention has to be paid to articles 30 and 53 of the Convention, as pointed out in: - Juzgado de primera instancia e instrucción no. 3 de Tudela [Spain] [(Machine for
rectification of bricks case)], 29 March 2005, available at
<http://www.uc3m.es/cisg/sespan45.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/050329s4.html>]; - Tribunal Cantonal du Jura [Switzerland] [(Sand and gravel case)], 3 November 2004,
available at <http://www.cisg-online.ch/cisg/urteile/965.pdf> [available in English translation
at <http://cisgw3.law.pace.edu/cases/041103s1.html>];
- Tribunal Cantonal de Vaud [Switzerland] [(Clothing case)], 11 April 2002, available at
<http://www.cisg-online.ch/cisg/urteile/899.pdf>; - Kantonsgericht Schaffhausen [Switzerland] [(Machinery case)], 25 February 2002, available
at <http://www.cisg-online.ch/cisg/urteile/723.htm>) [available in English translation at
<http://cisgw3.law.pace.edu/cases/020225s1.html>].
Articles 30 and 53 make it clear that, under the Convention, a sales contract is a contract by which
the seller is obliged to deliver goods, transfer the property in the goods and eventually hand over
all the documents relating the goods, while the buyer is obliged to pay the price and take delivery
of the goods. See: - Cour d'appel de Colmar [France] [(Polyurethane case)], 12 June 2001, available at
<http://witz.jura.uni-sb.de/CISG/decisions/120601v.htm> [available in English translation
at <http://cisgw3.law.pace.edu/cases/010612f1.html>]; - Cour d'appel de Paris [France] [(Dataprocessing material case)], 12 October 2000,
available at <http://witz.jura.uni-sb.de/CISG/decisions/121000v.htm>;
- Audiencia Provincial de Navarra [Spain] [(Electrical goods case)], 27 March 2000,
available at <http://www.uc3m.es/cisg/sespan11.htm>; - Tribunal Cantonal de Vaud [Switzerland][(Aluminum granules case)], 11 March 1996,
supra. Indeed, the contract of the present case meets the aforementioned elements. Actually, the contract
[that is the object of the present dispute] is one by which the seller transferred the property of some
models of shoes with the additional obligation to deliver them against payment of the price, to be
made once the buyer had taken delivery [of the goods].
2.3 The Convention prescribes the object of the contract to be movable and tangible goods.
For that requirement, see:
- KG Zug [Switzerland] [(PVC case)], 21 October 1999, available at
<http://www.unilex.info/case.cfm?pid=1&do=case&id=412&step=FullText> [available in
English translation at <http://cisgw3.law.pace.edu/cases/991021s1.html>];
- OLG Köln [Germany] [(Used car case)], 21 May 1996, available at
<http://www.unilex.info/case.cfm?pid=1&do =case&id=227&step=FullText> [available in
English translation at <http://cisgw3.law.pace.edu/cases/960521g1.html>];
- OLG Köln [Germany] [(Market study case)], 26 August 1994, available at
<http://www.unilex.info/case.cfm?pid=1&do=case&id=66&step=FullText> [available in
English translation at <http://cisgw3.law.pace.edu/cases/940826g1.html>].
In that regard, it does not matter the shape of the goods (so that a sale of gas can be regulated
under the Vienna Convention, see: - Oberster Gerichtshof [Austria] [(Propane case)], 6 February 1996, available [in English
translation] at <http://cisgw3.law.pace.edu/ cases/960206a3.html>;
nor the fact that the good are new[ly manufactured] or resold, alive or inanimate, see: - OLG Köln [Germany] [(Used car case)], 21 May 1996, supra;
- LG Köln [Germany] [(Used car case)], 16 November 1995, available at <http://www.cisg-online.ch/cisg/urteile/265.htm>; - LG Flensburg [Germany] [(Live sheep case)], 19 January 2001, available at
<http://www.cisg-online.ch/cisg/urteile/619.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/010119g1.html>];
- Cour d'appel Paris [France] [(Two elephants case)], 14 January 1998, available at
<http://www.unilex.info/case.cfm?pid=1&do=case&id=278&step=FullText>;
- Hof Arnhem [Netherlands] [(Live lambs case)], 22 August 1995, available at
<http://www.unilex.info/case.cfm?pid=1&do=case&id=156&step=FullText>.
In the present case, no doubt exists as to the applicability of the Convention because the contract
concerns the sale of shoes.
2.4 The contract must also be international in character. For this requisite, the Convention, as
well the greatest part of the conventions on uniform substantive law, provides a clear definition. In
that regard, it is necessary that at the time of the contract the contracting parties have their places
of business -- the place where a business activity having the character of duration, stability and
autonomy is set -- in different States. For a definition, see the aforementioned jurisprudence and
also: - OLG Stuttgart [Germany] [(Floor tiles case)], 28 February 2000, in Internationales
As to the contract in dispute, it is patent that the international requisite exists, the parties having their
places of business, respectively, in Slovenia and Italy. Additionally, this international character was
clear to the parties at the time of the contract so that article 1(2) of the Convention is not relevant.
Nonetheless the internationality of the contract alone does nonetheless not suffice for the
Convention to be applicable, see: - Trib. Padova [Italy] [(Agricultural products case)], 24 Feb. 2004,
It is also necessary to satisfy an additional requirement, which is that the countries where the parties
have their places of business are signatories of the Convention at the time the contract was entered
into (art. 1(1)(a)), or that the rules of private international law of the forum refer to the law of a
Contracting State (art. 1(1)(b)).
In the present case, it is useful to point out that the Vienna Convention entered into force for both
Slovenia and Italy before the contract was entered into. Consequently, the Convention is applicable
under article 1(1)(a).
2.5 It also has to be added that parties did not exclude the application of the Convention, even
if they could still have done so tacitly, as often pointed out by Italian and foreign jurisprudence, e.g.,
- Cour de cassation [France] [(Weed killer case)], 25 October 2005, available at
<http://witz.jura.uni-sb.de/CISG/decisions/251005v.htm> [available in English translation
at <http://cisgw3.law.pace.edu/cases/051025f1.html>];
- Oberster Gerichtshof [Austria] [(Gasoline and gas oil case)], 22 October 2001, available
at <http://www.cisg.at/1_7701g.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/011022a3.html>];
- Cour de cassation [France] [(Anton Huber v. Polyspace)], 26 June 2001, available at
<http://witz.jura.uni-sb.de/CISG/decisions/2606012v.htm>;
- OLG München [Germany] [(Leather goods case)], 9 July 1997, available at
<http://www.cisg-online.ch/cisg/urteile/282.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/970709g1.html>];
- LG München [Germany] [(Computer hardware case)], 29 May 1995, available at
<http://www.cisg-online.ch/cisg/urteile/235.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/950529g1.html>]; - OLG Celle [Germany] [(Used printing press case)], 24 May 1995, available at
<http://www.cisg-online.ch/cisg/urteile/152.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/950524g1.html>].
Based on the aforementioned considerations, the applicability of the United Nation Convention is
3. As to the subject matter, preliminary attention has to be given to the factual background of the
From the disclosed documents -- which have not been opposed, there having been a default on
the part of the [Seller] -- it has been proven that [Buyer], once it took delivery of the goods,
discovered defects and sent detailed notice of them to the seller by e-mail seven days after
[delivery] (doc. 7 "there are several defects preventing us from selling them: the heels in the
same pair of shoes are not equal, the seams are out of line ..."). The alleged defects were also
photographed at the time delivery took place (doc. 6). By means of the mentioned notice, the
[Buyer] proposed the substitution of the non-conforming goods with others non-defective, subject
to preliminary control (of the goods).
In acknowledging receipt of the notice, that was followed by others of similar content, (see docs.
8-9), [Seller] sent to the [Buyer] the following communication (doc. 10, e-mail dated 20
November 2006): "We are sorry for the defects in the shoes and we would be willing to accept your offer, but
we do not have available items for the replacement. Thus, I am asking whether you are
interested to accept different substitute items of your choice ... for the fall/winter 2006/07
The [Buyer] accepted that offer only in part (see e-mail dated 24 November 2006, doc. 14), requesting
restitution of the price paid for the defective goods and not adequately replaceable with other produced
by the [Seller]: The [Seller], however, refused the counter-offer, stating that "the company's policy does
not allow the refund of money" (see e-mail dated 27 November 2006, doc. 15).
3.1 Relying on this factual background, the [Buyer] seeks restitution equal to the value of the defective
shoes. In this direction the corresponding legislative provision is article 35 of the Vienna Convention, which
obliges the seller to deliver goods that are of the quantity, quality and description required by the contract.
- Oberster Gerichtshof [Austria] [(Frozen fish case)], 27 February 2003, available at
<http://www.unilex.info/case.cfm?pid=1&do=case&id=908&step=FullText> [available in English
translation at <http://cisgw3.law.pace.edu/cases/030227a3.html>),
and if it is not possible to derive the requisite quality by referring to usages or practice established between
the parties (according to article 9 of the Convention), reference has to be made to article 35(2) in order
to determine the characteristics the goods must possess.
The latter article -- which is of a subsidiary nature and application (see ibid.) -- fixes the minimum objective
standards the purchased goods must possess, see: - KG Schaffhausen [Switzerland] [(Model locomotives case)], 27 January 2004, available at
<http://www.cisg-online.ch/cisg/urteile/960.pdf> [available in English translation at
<http://cisgw3.law.pace.edu/cases/040127s1.html>].
Article 35(2) states four criteria for determining the characteristics the goods must possess absent the
parties' different agreement or different practices established between them.
According to article 35(2)(a), the goods must be fit for all (and not only some) of the purposes for which
goods of the same type would ordinarily be used. Taking into account that the contracts regulated by the
Vienna Convention are generally contracts between dealers, the objective evaluation of conformity
(intended as fitness for the purpose for which goods of the same type would ordinarily be used) has to be
made referring to the expectation of a reasonable dealer in the same circumstances: it follows that the goods
must at least be merchantable for resale. In the present case, it has been proven that the shoes were to have
been sold at retail in the country of the buyer, and that the seller was fully aware of such destination, as
evidenced by its offer to provide substitute items and the inability of the items to serve to this scope.
3.2 In the event the goods lack conformity, the buyer must give notice to the seller of the alleged non-conformity and specify in so far as possible the nature of the defects within a "reasonable time" after he has
discovered them or ought to have discovered them (article 39(1)). According to the prevailing opinion, the
concept of "reasonable" time is a "general clause", see: - Trib. Vigevano [Italy] [(Rheinland Versicherungen v. Atlarex)], 12 July 2000, supra;
- Pretura Torino [Italy] [(Cotton fabric case)], 30 January 1997, in Giur. it., 1998, 985 [available
in English translation at <http://cisgw3.law.pace.edu/cases/970130i3.html>], requiring the judge to take into account all the circumstances of the specific case, see: - Oberster Gerichtshof [Austria] [(Wood case)], 15 October 1998, available at
<http://www.cisg.at/2_19198x.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/981015a3.html>];
- OLG Düsseldorf [Germany] [(Clothing case)], 12 March 1993, available at <http://www.cisg-online.ch/cisg/urteile/82.htm> [available in English translation at
<http://cisgw3.law.pace.edu/cases/930312g1.html>];
- Rechtbank Roermond [Netherlands] [(Cheese case)], 19 December 1991, available at
<http://www.unilex.info/case.cfm?pid =1&do=case&id= 34&step=FullText>.
The moment the lack of conformity should have been discovered has to be determined according to article
38, which states that "the buyer must examine the goods, or cause them to be examined, as soon as
possible according with the circumstances."
In the present case, it has been proven that [Buyer] basically inspected the goods at the time of delivery
and -- as already pointed out -- made pictures of all of the defects and sent notice to the seller of the lack
of conformity within seven days.
For the sake of completeness, it has to be stressed that the seller accepted the notice as sent within a
reasonable time when he, having admitted the lack of conformity, offered substitute goods to keep the
contract alive.
3.3 Having ascertained the violation of the seller's obligation under the contract, it has now to be
determined whether the [Buyer]'s request of partial avoidance of the contract shall be allowed.
For this purpose, a basic provision to look at is article 25 of the Convention, providing a definition of
"fundamental breach": that provision is recalled in article 49, also stating the circumstances in which the
buyer can avoid the contract. The Convention links specific consequences to the concept of fundamental
breach, offering to the party not-in-breach the possibility to declare the contract avoided in its entirety or
[offering] to the buyer the possibility to require substitute goods, in addition to causing the party in breach
to bear the risk of peril of goods.
However, article 25 does not specify when a fundamental breach is relevant: it only sets forth the criteria
for distinguishing between a fundamental and a non-fundamental breach which effects have to be
determined -- according to the above-referenced interpretative method -- by other articles of the
Convention connected to or based on article 25.
First, it is imperative that an obligation arising out of the contract, [or] of the practice established
between the parties, [or] of the usages referred to in article 9(2), [or] of an obligation established by the
Convention itself, has been violated; if not, article 25 shall not be applicable.
Consequently, no "fundamental breach" will occur if a party misconducts under the Convention but with
a reasonable justification; i.e., the debtor's right to refuse his own performance, or the creditor's lack of
cooperation that makes the performance of the debtor's obligation impossible.
In that regard, the Convention does not distinguish between breach of a main obligation and an ancillary
obligation. As is pointed out by the foreign jurisprudence, see: - OLG Köln [Germany] [(Tannery machines case)], 8 January 1997, available [in English translation]
at <http://cisgw3.law.pace.edu/cases/970108g1.html>;
- Bundesgerichtshof [Germany] [(Cobalt sulphate case)], 3 April 199[6], available at Recht der
Internationalen Wirtschaft 1996, 594) [available in English translation at
<http://cisgw3.law.pace.edu/cases/960403g1.html>],
even a breach of an ancillary obligation (and not a main obligation of the contract) may be considered as
fundamental breach if it is firmly connected to the trade of goods. Second, article 25 does not differentiate among several types of breach, e.g., non-delivery, non-payment, impossibility to perform, delay, or others, but encapsulates a unique concept of breach, see: - Bundesgerichtshof [Germany] [(Cobalt sulphate case)], 3 April 199[6], supra).
The essentiality of the breach is based on the prejudice to the legitimate contractual expectations of the
claiming party, because the latter paragraph of the cited article requires that the breach has to be so serious
as to deprive the party of his interest in the performance of the contract, see: - HG Kanton Aargau [Switzerland] [(Inflatable triumphal arch case)], 5 November 2002, available
[in English translation] at <http://cisgw3.law.pace.edu/cases/021105s1.html>.
This is also a general principle upon which the Convention is based: indeed, the Convention looks at the
avoidance of the contract as the extrema ratio, provided only for fundamental breach, see: - OLG Köln [Germany] [(Designer clothes case)], 14 October 2002, available [in English
translation] at <http://cisgw3.law.pace.edu/cases/021014g1.html>; - LG München [Germany] [(Globes case)], 27 February 2002, available [in English translation] at
<http://cisgw3.law.pace.edu/cases/020227g1.html>; - Oberster Gerichtshof [Austria] [(Tombstones case)], 7 September 2000, available [in English
translation] at <http://cisgw3.law.pace.edu/cases/000907a3.html>.
According to the jurisprudence, the seriousness of the prejudice has to be investigated in relation to specific
cases and by looking objectively at the contractual expectations of the damaged party; such expectations
can be inferred from the contract, from the practice established between the parties and from all the
surrounding circumstances existing until the contract was entered into, i.e., pre-contractual negotiations, see: - OLG Linz [Austria] [(Auto case)], 23 January 2006, available [in English translation] at
<http://cisgw3.law.pace.edu/cases/060123a3.html>; - Oberster Gerichtshof [Austria] [(Software case)], 21 June 2005, available [in English translation]
at <http://cisgw3.law.pace.edu/cases/050621a3.html>;
- Schweizerisches Bundesgericht [Switzerland] [(Meat case)], 28 October 1998, available [in English
translation] at <http://cisgw3.law.pace.edu/cases/981028s1.html>.
Where, as in the present case, such investigation is not possible because no contractual document exists,
reference can be made to circumstances that have been recognized and standardized by the jurisprudence.
When, as in the case at issue, a substantial non-performance exists -- it has to be noted that the value of
the non-defective goods is less than one tenth of the overall value of the purchased goods -- it is legitimate
to consider that the damaged party has substantially been deprived of what he was entitled to expect; thus,
the breach has to be regarded as fundamental under article 25.
Additionally, the jurisprudence equalizes the non-performance to the illegitimate and final refusal to perform,
see: - OLG Celle [Germany] [(Used printing press case)], 24 May 1995, available [in English translation]
at <http://cisgw3.law.pace.edu/cases/950524g1.html>.
Specifically, seller's delivery of items that do not conform to the contractual description amounts to a
fundamental breach if the lack of conformity is so serious that damages or price reduction would not be an
adequate remedy for the buyer, see: - OLG Köln [Germany] [(Designer clothes case)], 14 October 2002, supra;
- Bundesgerichtshof [Germany] [(Cobalt Sulphate case)], 3 April 199[6], available [in English
translation] at <http://cisgw3.law.pace.edu/cases/960403g1.html>. Again, this corresponds to the basic principle of the Convention, already mentioned, according to which
contract avoidance should be regarded as extrema ratio. Therefore, delivery of goods that do not conform
to the contract, where lack of conformity cannot be remedied by the seller (at all or within a reasonable
time) or can only be remedied with serious inconvenience for the buyer will always be considered a
fundamental breach, see: - OLG Köln [Germany] [(Designer clothes case)], 14 October 2002, supra; - LG München [Germany] [(Globes case)], 27 February 2002, supra;
- LG Regensburg [Germany] [(Cloth case)], 24 September 1998, available [in English translation]
at <http://cisgw3.law.pace.edu/cases/980924g1.html>;
- OLG Koblenz [Germany] [(Acrylic blankets case)], 31 January 1997, available [in English
translation] at <http://cisgw3.law.pace.edu/cases/970131g1.html>.
If not, performance would still be possible and so the buyer's interest in the performance would still be alive,
see: - HG Kanton Aargau [Switzerland] [(Inflatable triumphal arch case)], 5 November 2002, supra.
3.5 The latter hypothesis has to be excluded in the present dispute. The Seller's conduct leads to the
conclusion that the defects cannot be removed: [Seller]'s offer made clear that the shoes would have been
replaced with different items that the buyer declared not fit for its retail market.
Absent [Seller]'s objections, the latter assumption has to be accepted; nor, again, the [Seller] changed its
position, because the e-mail dated 20 November 2006 ("We do not have substitute items available")
and the following one dated 27 November ("The company does not refund money") drastically excluded
Accordingly, [Seller]'s offer was not adequate for making up for the lack of conformity without an
unreasonable inconvenience for the buyer. So, it is easy to understand the [Buyer]'s refusal to accept the
[Seller]'s offer to remedy the defects of the goods as proposed. Thus, once it has preliminarily been
ascertained that the breach was fundamental, such conduct legally leads to the avoidance of the contract.
4. Conclusively, [Seller]'s breach was fundamental and therefore the [Buyer] can legitimately avoid the
Accordingly, the [Seller] shall be ordered to pay to the [Buyer] the amount of Euro 6,779.00, plus the
monthly amount of Euro 125.00 for storage costs until the day of re-delivery, and also interest under article
84 of the Convention (according to which "if the seller is bound to refund the price, he must also pay
interest on it, from the date on which the price was paid") together with litigation costs.
As to article 84, it only provides for the right to claim interest without specifying the applicable rate. This
situation of the applicable rate has to be considered as a gap not filled by the Convention; it is consequently
necessary to determine the applicable law according to the private international rules of the lex fori, see:
- KG Schaffhausen [Switzerland] [(Model locomotives case)], 27 January 2004, available [in English
translation] at <http://cisgw3.law.pace.edu/cases/040127s1.html>;
- OLG Celle [Germany] [(Used printing press case)], 24 May 1995, available [in English translation]
These rules, in the present dispute, are the provisions of the Aja Convention 15 June 1955, ratified by the
[Italian Republic] under Law 4 February 1958 n. 50, which entered into force on 1 September 1964. As,
according to article 3(1) of the latter convention, the applicable law is the law of the Italian seller, the legal
rate of interest in force in Italy is consequently applicable.
As to the storage costs, these expenses have been incurred for the preservation of the goods already paid
by the Buyer and, according to article 85 of the Convention, they have to be considered reasonable.
Judgment has thus to be entered against the [Seller] as stated above. Costs follow the event and are
quantified in the dispositive part.
FOR THESE REASONS The Court renders final judgment in the civil proceedings filed as n. 2280/2007 between the [Buyer] and
the [Seller] in default. The Court: - Declares the contract avoided because of the fundamental breach of the [Seller] and orders the latter
to pay to the [Buyer] the amount of Euro 6,779.00 plus storage costs and interest as specified in the
above reasoning.
- Orders the [Seller] to pay litigation costs as follows: Euro 1,800 for legal fees [...], plus VAT, CNA
and an additional 12.5% for general expenditures.
* All translations should be verified by cross-checking against the original text. For purposs of this
translation, Plaintiff of Slovenia is referred to as [Buyer] and Defendant of Italy is referred to as [Seller].
*** Roberto Pirozzi LL.M. candidate December 2009, avvocato (Italian lawyer) and assistant in
Comparative Constitutional law (LUMSA, University of Rome)