- Tallinna Ringkonnakohus
RIGHT TO DAMAGES - DIFFERENCE BETWEEN CONTRACT PRICE AND MARKET PRICE AT TIME OF AVOIDANCE (ART. 76 CISG) - REQUISITES FOR APPLICATION
A seller and a buyer concluded a contract for the sale of a great amount of tomato paste to be supplied from the former in accordance with orders placed by the latter over a period of 9 months. The buyer refused to place orders for the quantity contractually agreed upon. Upon failure of the negotiations entered into between the parties in order to reach an agreement, the seller brought an action against the buyer claiming termination of the contract and damages.
The Court of first instance dismissed the seller's claim. The appellate Court reversed the first instance decision.
After finding that CISG was applicable to the case at hand (Art. 1(1)(a)CISG), the Court of Appeal rejected the buyer's claim as to the fact that no contract had been validly concluded between the parties under CISG. Contrary to the buyer's contention, the sales' confirmation sent by the seller to the buyer could not be considered merely as a written confirmation of the contract (which according to the buyer'allegations would be a matter excluded from the scope of CISG), but it amounted to a document embodying the contract of sale stipulated between the parties. In order to reach this conclusion, the Court found that the document had been signed by both parties (which does not usually happen in the case of a mere written confirmation of a contract) and that it did not purport to confirm or alter the terms of an agremeent already reached between the parties.
Secondly, the appellate Court rejected the lower Court's finding that Art. 76 CISG would be only applicable if it were demonstrated that the goods were in the seller's property at the time of termination of the contract. On the contrary, in the opinion of the Court all the conditions for the application of Art. 76 CISG were fulfilled in the case at hand. In fact, there was no dispute between the parties as to the fact that the contract had been terminated by the seller and no substitute transaction had been entered into by the seller under Art. 75 CISG. Moreover, the seller had provided adequate proof as to the existence of a current price for tomato paste. Therefore, the seller was awarded the difference between the price fixed by the contract and the current price at the time of termination, this latter being the price prevailing at the place where delivery of the goods should have been made (i.e. Turkey, under a CIF term contained in the contract).
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The original text in Estonian as well as an English translation are to be found at the University of Basel website, http://www.cisg-online.ch}}
Original in Estonian:
- available at the University of Basel website, http://www.cisg-online.ch
- available at the University of Basel website, http://www.cisg-online.ch}}