Requirements for a reduction of the price 50-1 : Whether the goods in question lack conformity or not is to be determined by reference to Art. 35 CISG, cf. discussion on this Article above. The price reduction can be invoked regardless of whether the lack of conformity amounts to a fundamental breach or a ‘simple’ breach of contract. The price reduction may even be claimed if the buyer did not give notice of the lack of conformity under Art. 39(1) CISG, provided it had a

doi:10.4324/9780203945445-140

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Requirements for a reduction of the price 50-1

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ABSTRACT

Set-up and construction of the coffee machines are very simple. However, the safety contact switch for the level of water in the water tank does not correspond to the state of engineering. Furthermore the mechanical devices (levers, coffee tablet holder) are implemented with high tolerances for adjusting, so that leakages may occur after the shortest intended use, which does not allow a continuous use for coffee preparation. The malfunctions are primarily caused by a conductive connection between the heating coil and the bottom ﬂange of the heating container. Heat and lime deposits are sufﬁcient to lead to a leak in the gasket. The escaping water causes conductive connections on the inner exposed parts of the electronic connections, and thus short circuits. From a technical point of view, the elimination of the construction ﬂaws would be possible. For a short-time repair of these leakages, one hour of work per machine would be needed. A machine, repaired like this, could be used for some time, but not indeﬁnitely. [. . .] By the end of 1996 and in early 1997, the [Buyer] decided to return to the [Seller] the broken machines as well as some unused and unpacked machines. However, after the delivery drive to Italy had already started, the [Buyer]’s employee was informed by the [Seller] by telephone that the machines would only be taken back if the invoices would be settled. After that, the machines were not returned. There is no serious purchase interest in goods with such defects; because of that the machines are without value and unsalable. [. . .]

[Judgment] Pursuant to established practice of the courts, revision and reasons for revision are not in themselves restricted because the possibility given by the Court of Appeal to call on the Supreme Court earlier had not been used. But in the opinion of the Second Instance, the question could be raised if this view can be upheld in the face of the successive restriction of admissibility of appeals in the civil proceedings amendments until 1997 and especially in the face of the provisions to expedite procedures in the civil procedure amendments of 2002. It would be against the amendments underlying goal to concentrate procedures to give parties a “second chance” when they previously had failed to bring about the expressly enabled clariﬁcation of the legal position. From that, it would be possible to deduce a bond of the parties to the unchallenged legal position. In that case, the existence of a substantial question of law would have to be denied. The codiﬁed provisions provide no basis for these kinds of considerations. Under current legal rulings, the failure to use the permitted redress to the Supreme Court given by the Court of Appeal against its ruling does not lead to a limitation concerning the contest by appeal against the revision-ruling that is then made in the Second Instance. The [Seller]’s appeal is nonetheless not justiﬁed. The assessment of the legal consequences concerning the delivery of the worthless goods has to be done in accordance with CISG Art. 50, because – as it is likewise not contested in the revision proceedings – the [Buyer] failed to avoid the contract because of a fundamental breach within a reasonable time as imposed under CISG Art. 49(2)(b). The [Buyer] bases its position in the appeal proceedings therefore only on CISG Art. 50, whose ﬁrst sentence reads:

“If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the

The CISG does not set a period of time for the buyer’s desire to reduce price. In contrast to § 932 ABGB, it is not the date at which the contract was concluded that is crucial for reduction of price but date of delivery (Posch, as before, CISG Art. 50, para 6). At hand, the goods delivered by the [Seller] were at that date absolutely worthless and unsaleable. The question is whether CISG Art. 50 entitles the [Buyer] to reduce the price to zero when the goods are absolutely worthless.