Data
- Date:
- 22-05-1990
- Country:
- USA
- Number:
- 89 CIV.4950 CSH
- Court:
- U.S. District Court, S.D., New York
- Parties:
- Interag Company Ltd. v. Stafford Phase Corporation
Keywords
REDUCTION OF PRICE (ART. 50 CISG) - AMOUNT EQUAL TO DIFFERENCE BETWEEN VALUE OF NON-CONFORMING GOODS AND MARKET VALUE THAT CONFORMING GOODS WOULD HAVE HAD - DETERMINATION OF VALUE OF NON-CONFORMING GOODS
Abstract
A Hungarian seller sold and delivered sweaters to a US buyer. After having drawn two checks representing payment for 70% of the purchase price, the buyer, alleging defects of the goods, stopped payment on those checks and claimed damages resulting from its resale of the sweaters to third parties. The buyer based its claim on 2-714(2) of the Uniform Commercial Code, according to which the measure of damages for non-conformity of accepted goods is the difference between 'the value of the goods accepted and the value they would have had if they had been as warranted'. The question arose as to how to determine the value of the goods accepted. While the buyer proposed to prove it by expert testimony, according to the seller the decisive criterion was the price obtained for them by the buyer on their resale to third parties.
The Court decided in favor of the seller and ordered the buyer to produce the relevant documents relating to the resale of the sweaters. In doing so it did not specifically address the question whether the sales contract was governed by CISG (though it recalled that both the United States and Hungary are contracting parties). However, in conjunction with UCC 2-714, the Court also referred to Art. 50 CISG, thereby suggesting that the two provisions fundamentally correspond and that its interpretation of the former would also be valid for the latter.
Fulltext
MEMORANDUM OPINION AND ORDER
HAIGHT, District Judge:
[...]
Motion for Discovery
Interag's motion to compel Stafford to produce documents relating to the resale of the sweaters in the United States and to reexamine Eisner on that issue is granted.
It is disingenuous for defendant to suggest such documents and testimony do not constitute appropriate discovery, given the issues framed by the pleadings.
Interag sold and delivered sweaters to Stafford. Stafford mailed Interag two checks representing payment for 70% of the purchase price, but stopped payment on those checks, denies any obligation to pay Interag anything, and asserts a million-dollar counterclaim for damages resulting from Stafford's resale of the sweaters to third parties. It appears to be common ground that a resale of at least a portion of the sweaters occurred. Obviously Interag is entitled to discovery on the resale.
Defendant says the resale information is irrelevant because defendant bases its asserted remedies upon the difference 'between the value of the good accepted and the value they would have had if they had been as warranted,' sec. 2-714(212) of the Uniform Commercial Code (Sales); see also Article 50 of the 1980 United Nations Convention on Contracts for the International Sale of Goods (to which both the United States and Hungary are signatories) 15 U S.C., Cumulative Annual Pocket Part at 48 et. seq. 1990). Stafford apparently proposes to prove this difference in value by expert testimony. However, it is well settled that the price obtained for defective goods on resale is probative of the value of the goods as actually received. See, e.g., Lackawanna Leather Co., v. Martin & Stewart, Ldt., 730 F. 2d 1197, 1203 /8th Cr. 1984).
[...]
In these circumstances, make the following order:
1. [...]
2. Within sixty (60) days of the date of this Order, defendant Stafford shall produce to Interag all documents describes in plaintiff's first request for production of documents, to the extent those documents have not already been produced.
[...]}}
Source
Published in English:
- 1990 WESTLAW 71478 (S.D.N.Y.)}}