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On June 6, 2024, the Court of Cassation delivered a landmark ruling on international sales, clarifying the obligations of the parties in a sales contract.
This decision, based on the United Nations Convention on Contracts for the International Sale of Goods, has significant implications for both buyers and sellers.
Context of the Dispute
The dispute concerned a manufacturer of dog food who had delivered products covered with mold to a client.
The deliveries, made on January 16 and 18, were reported by the client on February 11 for non-conformity. The Court of Cassation was seized after the Court of Appeal condemned the client to full payment of the invoices, despite the initial decision of the business court to terminate the sales contracts.
Applicable Rules
The Court referred to Articles 7.1 and 7.2 of the United Nations Convention to interpret the situation:
- Article 79.1: A party is not responsible for the failure to perform its obligations if this is due to an impediment beyond its control.
- Article 38.1: The buyer must examine the goods as soon as possible after delivery.
- Article 39.1: The buyer loses the right to rely on a lack of conformity if they do not notify the seller within a reasonable time after they have discovered it or ought to have discovered it.
Court’s Assessment
The Court of Cassation specified that the buyer must prove the non-conformity of the goods. If the seller invokes the lateness of the notification as a defense, they must demonstrate when the buyer had or should have had knowledge of the defect.
In this case, the buyer had not inspected the goods in time and thus had to prove that the defect was not apparent at the time of delivery.
The Court of Appeal legally justified its decision by ruling that the buyer had to bear the burden of proof regarding the non-visible nature of the non-conformity at the time of delivery. The appeal to the Court of Cassation was dismissed.
Implications for Stakeholders
This ruling reinforces the responsibilities of buyers in international sales contracts. Buyers must promptly examine the goods upon delivery and report any non-conformity within a reasonable time to retain their rights. If the buyer claims that the defect was not visible at the time of delivery, they must be able to prove it.
Sellers, on the other hand, must be prepared to prove that the notification of the non-conformity was late.
For more information and legal advice, contact our law firm S-Team (office@s-team.law).
