Data
- Date:
- 22-02-2018
- Country:
- Chile
- Number:
- C-893-2018
- Court:
- 1 Juzgado Civil de Puerto Montt
- Parties:
- H. Van Wijnen v. Granja Marina Tornagaleones S.A.
Keywords
SALES CONTRACT GOVERNED BY CISG - REFERENCE BY BOTH PARTIES TO THE UNIDROIT PRINCIPLES IN ORDER TO INTERPRET AND SUPPLEMENT THE CONVENTION
CALCULATION OF DAMAGES IN CASE OF REPLACEMENT TRANSACTION - DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE PRICE OF THE REPLACEMENT TRANSACTION (ART. 75 CISG) - IF THE REPLACEMENT TRANSACTION IS NOT PERFORMED IN A REASONABLE MANNER BUYER ENTITLED TO A LOWER SUM – USE OF ART 7.4.5 UNIDROIT PRINCIPLES TO SUPPLEMENT ART. 75 CISG
Abstract
A Chilean seller and a Dutch buyer concluded a contract for the sale of salmon fillets. In April 2016, before sending the first shipment, the seller announced that it would not fulfill the obligations arising from the contract due to a harmful algae bloom in the months of February and March 2016 that would have led to the loss of half of the future production. The buyer replied that, since the algae bloom that supposedly affected the counterpart was known at the industry level in Chile at least since January 2016, the seller could have verified the phenomenon at least three months before the notice given to the buyer. Therefore, the buyer accused the seller that the unjustified delay in notice had prevented him from finding alternative offers in the market at the same price and asked for damages.
The sale contract was silent as to the applicable law. Both parties asked the Court to apply CISG, since buyer and seller have their seats in two contracting States, together with UNIDROlT Principles, to the extent that they are not contrary to the rules on international sales and in accordance with the provisions of art. 7 of the Convention.
According to the buyer, seller's conduct was contrary to the duty of good faith as expressed in art. 1.7 UNIDROIT Principles, as well as to the prohibition of incosistent behavior, as expressed in art. 1.8 of the Principles.
As to the quantification of damages requested by the buyer, the Court, by applying art. 75 CISG and art. 7.4.5 UNIDROIT Principles, affirmed that buyer was entitled to recover the difference between the original contract price and the price of the replacement transaction. However, since in the case at hand the replacement transaction was not performed in a reasonable manner and the buyer opted for a more onerous replacement sale than that proposed by the seller, the Court concluded that buyer did not contribute to reducing the loss given the circumstances and, according to Art. 77 CISG, reduced the amount of damages, i.e. the difference between the original contract price and the price of the replacement transaction.
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