- I ACa 1258/07
- Warsaw Court of Appeal
CONTRACTUAL PROVISION PROVIDING FOR AUTOMATIC TERMINATION WITHIN 90 DAYS FROM CONCLUSION OF CONTRACT - ADMISSIBLE UNDER CISG (ART. 6 CISG)
EFFECTS OF TERMINATION (AVOIDANCE( (ART. 81 CISG) - SELLER'S DUTY TO REFUND THE PRICE PAID AND PAY INTEREST (ART. 84 CISG)
[CLOUT Case no. 1305; abstract prepared by Maciej Zachariasiewicz, National Correspondent]
A Polish seller and a Ukrainian buyer concluded a contract for the sale of a Mercedes Actros truck. The contract contained a clause according to which “it was valid until 8 August 2006”, which stood 90 days after its conclusion. The seller failed to deliver and refused to return the price paid by the Ukrainian party, who sued before a Polish court.
The court of first instance (District Court) dismissed the claim as premature. It found that the buyer had not set an additional period of time as required by Article 49(1)(b) CISG and had never declared the contract avoided. The court concluded that the parties were still bound by the contract and that the buyer could not yet request the reimbursement of the price.
The Court of Appeals reversed the decision and ordered the seller to reimburse the price. It found that Article 49(1)(b) cannot be relied upon in the case at hand because of the express clause in the contract providing for its termination within 90 days from its conclusion. The court reasoned that the parties were entitled under Article 6 CISG to shape the contract as they saw fit, which inter alia allowed them to introduce a provision for an automatic termination of the contract within a certain period of time. In the opinion of the Court of Appeals, the lower court wrongly assumed that the “90 days validity” clause had no meaning. Conversely, it found that the clause was dictated by the Ukrainian customs regulations, which require to complete any international business transaction within 90 days from the conclusion of the contract and which provide sanctions for violating that rule. Thus, the parties, having been aware of the said regulation at the time of the conclusion of the contract, consciously established a period, after expiry of which the contract was to come to an end.
The Court of Appeals further stated that the Convention does not expressly govern the consequences of the termination of a contract as a result of the lapse of contractually established time limit. However, in light of Article 7 CISG, which calls for the application of the general principles on which the Convention is based, the rules governing the effects of the avoidance of contract must be considered. More specifically, the issue is regulated by Article 81(2) CISG which provides that a party who has performed the contract may claim restitution of whatever it has paid under the contract to the other party. Consequently, the Court ordered the Polish seller to reimburse the full price to the Ukrainian buyer and to pay the interest from the date on which the price was paid, as required by Article 84(1) CISG.
Original in Polish:
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