Case number: 124
Article number: sales convention / 72; 49
Thessaurs issue:
Country of decision: Germany
Year of decision: 1995
Type of decision: Judicial decision

Case 124: CISG 72; 49
Germany: Bundesgerichtshof; VIII ZR 18/94 15 February 1995
Published in German: Recht der Internationalen Wirtschaft (RIW) 1995, 505
Commented on by Schlechtriem in Entscheidungen zum Wirtschaftsrecht (EwiR) Art. 49 CISG 1/95; Schmidt-Kessel in RIW 1996, 60; and Enderlein in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1996, 182

The German plaintiff sold to the Swiss defendant a key stamping machine, which was manufactured by a German third party. The price had to be paid in three instalments. The parties agreed that the seller would retain title to the machine until payment of the last instalment. The manufacturer of the key stamping machine imposed a delivery stop upon the plaintiff. In October 1991, the manufacturer delivered the machine directly to the defendant. The defendant refused to pay the remaining two instalments to the plaintiff asserting that the plaintiff would not be able to transfer the property of the key stamping machine, since the plaintiff could not obtain the property directly from the manufacturer because of the delivery stop.

The court of first instance ordered the defendant to pay the purchase price whereas the Court of Appeal decided in favour of the defendant. The plaintiff appealed to the Supreme Court.

The Supreme Court held that the defendant was not entitled to declare the contract avoided under article 72 CISG. The period of time within which the buyer could declare the contract avoided under article 72 CISG was the time prior to the date of performance. After the contract had been performed by the parties, neither party could declare the contract avoided under article 72 CISG. The defendant accepted the machine in October 1991 and had to pay the last instalment in November 1991. Therefore, both parties fixed the date of performance for November 1991. As a result, the defendant could no longer invoke article 72 CISG in March 1992.

Leaving the question undecided whether the behaviour of the plaintiff constituted a fundamental breach of contract, the court held that, in any event, the defendant had lost the right to avoid the contract under article 49 CISG, since the defendant had claimed avoidance of the contract five months after being informed of the delivery stop. This delay could not be considered as a reasonable time under article 49 (1)(b) CISG.

Thus, the Supreme Court reversed the decision of the Court of Appeal, restored the decision of the court of first instance and ordered the defendant to pay the purchase price.