Lawyer in Milan and Turin
With judgement n. C/10/630663 ruled by Rotterdam tribunal the last 15 February 2023 it has been decided a case worth examining with regard to the conformity of products with reference to the technical standards applicable to products in the country of the buyer.
A Greek transport company bought a trailer from a Dutch company. The trailer has been advertised on the seller’s website as provided with anti-lock technology (ABS); however, after the delivery, the buyer found that the trailer was without ABS.
Since the presence of such technology was a prerequisite in Greece for the circulation of this kind of vehicles throughout the country, the buyer sued the seller to obtain the termination of the purchase contract on the grounds of fundamental breach of contract by the seller according to Articles 25 and 49 of the UN Convention about international sale of goods contracts (Vienna, 1980).
Rotterdam tribunal established that the contract between the parties was rules by the CISG as it was a purchase contract having as object a movable asset (trailer), a contract concluded between contracting parties established in States adhering to the Vienna Convention, in this case Greece and the Netherlands.
Vienna Convention was therefore applicable to the dispute, unless otherwise provided for in the contract, absent in the case under examination.
The court held that the seller had not committed any fundamental breach of the contract, according to the conformity standards agreed upon therein and rejected the buyer’s claim on the merits.
The court indeed established that pursuant to Article 49 (1)(1) of the Vienna Convention, the termination of the contract was possible only in the presence of an essential breach of the sale contract. On the point, Article 25 (essential breach). of the Vienna Convention establishes that:
“A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.”
According to the Vienna Convention, the seller is not obliged to know the legal requirements imposed by the authorities of the country of the destination of products where the buyer wishes to commercialise the product. The buyer must therefore bring to the seller’s attention the existence of these requirements, resulting insufficient for this purpose the mere indication of the country in which the product will be used.
Since in the case under exam the buyer had not demonstrated that he had correctly informed the seller of the need for ABS as a legal requirement in Greece, Tribunal of Rotterdam rejected the request for termination of the sale contract of the buyer.
On such matter we add on the applicability (or not) of the obligation to comply with the technical standards of the country of the destination of products that the conformity assessment must be carried out in light of the standards in force in the country of the seller and not of the buyer, unless:
i. the seller is repeatedly held to deliver goods of the same kind in the buyer country (ex. distribution contract, supply, presence of a branch);
ii. the seller knows the applicable discipline in the buyer’s country;
iii. the discipline of the buyer and seller’s countries are identical.
To avoid conflicts and maintain over time the relationship with the supplier or the client the golden rule remains to provide for the agreed compliance parameters in the contract.