International sale of goods: buyer, be aware of your inspection and notification duty!

In April 2015, the Dutch Supreme Court has considered a tomato case. The facts in this matter were as follows.

The Dutch claimant has purchased a tomato cargo from Primar in France. Primar has delivered these tomatoes from Morocco via Perpignan, France, to the claimant in the Netherlands. Subsequently, the claimant has shipped the tomatoes to its customer in Moscow, Russia. At arrival in Moscow, the customer rejected the tomatoes because of a germ infection. Which party should in this event bear the ensuing risk and damage?

It appears from the facts of the case that the tomatoes were not of satisfactory quality at arrival in Moscow. It is, however, the question, whether such defect already existed at arrival in the Netherlands, since that is the place where Primar has delivered the tomatoes and where the risk has passed to the claimant. As from that moment the claimant is responsible for the conformity of the goods. It must be assessed whether the cause of the lack of conformity of the tomatoes can be traced to a defect which already existed before delivery in the Netherlands.

The court of appeal has not decided on this issue. Although it is not clear whether the tomatoes have been shipped by the claimant to Moscow in a proper manner (cooled and under the right temperature), the court ruled that the damage will be for the risk and costs of the claimant. The Supreme Court annulled this ruling, since the court of appeal has not answered the question whether the defect already existed at the moment of delivery in the Netherlands. Another court of appeal will now judge the case.

This case shows the relevance of inspection of the goods at the moment the risk passes from the seller to the buyer and the importance to notify the seller in case of lack of conformity of the goods. Especially when it comes to contracts for the international sale of goods. In such case, in principle, the United Nation Convention on Contracts for the International Sale of Goods (1980) (“CISG”) applies if the contracting parties have their place of business in different states being a member to the convention, such as the Netherlands and France in the tomato case.

On the basis of article 38 CISG the buyer must examine the goods within as short a period as is practicable in the circumstances. Article 39 CISG stipulates that the buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.

In the tomato case it is questionable whether the claimant will be able to recover the damage from Primar. The Supreme Court has decided that another court of appeal must assess whether the tomatoes lacked conformity at the moment the risk passed from Primar to the claimant, of which the burden of proof is on the claimant. If the claimant succeeds to proof so, the question arises why the tomatoes have nevertheless been shipped to Moscow. In this connection, it is also decisive that the claimant has timely given notice to Primar of the lack of conformity.

In conclusion, in the event of an international purchase of goods, the buyer should be aware of its duty to inspect the goods and to notify the buyer in case of lack of conformity of the goods. If the buyer does not meet this obligation, he loses the right to rely on such lack of conformity and will not be entitled to claim any damages or to take other legal actions.

Contact information
Should you have any questions about the international sale of goods or doing business in the Netherlands and abroad in general, please do not hesitate to contact one of our Commercial contracts lawyers or the members of our International Desk.

 

 

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