- Court of Appeal of Turku
NOTICE OF DEFECTS - SELLER'S STANDARD TERMS FIXING TIME-LIMIT - NOT TOO HARSH FOR BUYER IF CONFIRMED BY PRACTICES ESTABLISHED BETWEEN THE PARTIES (ART.9 CISG)
LATE NOTICE OF DEFECTS BY BUYER - SELLER PREVENTED FROM RAISING THE EXCEPTION OF LATE NOTICE IF, AFTER RECEIVING IT, IT HAD ACCEPTED TO COMPENSATE BUYER
REASONABLENESS OF CONTRACT TERM - MATTER EXCLUDED FROM SCOPE OF CISG (ART.4 CISG)- DETERMINED BY DOMESTIC LAW OTHERWISE APPLICABLE
INTEREST RATE - MATTER EXCLUDED FROM SCOPE OF CISG (ART.4 CISG) - DETERMINED BY DOMESTIC LAW OTHERWISE APPLICABLE
NOTICE OF AVOIDANCE OF CONTRACT - MUST BE GIVEN WITHIN A REASONABLE TIME (ART.49(2) CISG)
CONTRACT TERM LIMITING DAMAGES TO BE PAID BY SELLER IN CASE OF NON-PERFORMANCE(ART.74 CISG) - BUYER NOT ENTITLED TO DAMAGES BEYOND THOSE FIXED BY CONTRACT TERMS
A German buyer and a Finnish seller entered into a contract for the sale of various components to be attached to the buyer's forestry vehicles. The equipment sold by the seller turned out to be defective; therefore, the buyer brought an action against the seller claiming damages and avoidance of contract. The seller objected that according to its standard terms notice of defects of the goods had to be given within one month after discovery, while the buyer had given notice after the expiry of that period. The buyer argued that the seller's warranty term contained in its standard terms was not binding because too harsh and surprising.
The Court of first instance held CISG applicable in the case at hand (Art. 1(1)(a) CISG), with the exception of Part II of the Convention regarding contract formation due to Finland's reservation under Art. 92.
As to the merits, the Court found that the warranty term in question had validly become part of the contract since, in the light of the practices established between the parties (Art.9 CISG), it could not be regarded as too harsh for or surprising to the buyer. However, the seller was prevented from invoking the buyer's late notice since after receiving such notice it accepted to compensate the buyer for the defects in the goods. As to the amount of damages claimed by the buyer, the court held that the amount could not exceed the sum fixed in the warranty term which it considers reasonable in accordance with Finnish law applicable since CISG did not regulate the matter (Art. 4 CISG). The Court also rejected the buyer's claim for termination since it found that the buyer had not given notice of termination within a reasonable time (Art.49(2) CISG). Finally, the Court held that on the amount the seller had to pay the buyer interest was due (Art.78) at the Finnish statutory rate (Art.4 CISG).
The Court of Appeal confirmed the decision of the lower Court.
Original in Finnish:
- available at the University of Pace website, http://www.cisg.law.pace.edu}}