In a ruling of 17 May 2023, the Court of Cassation reiterated that the Convention on the International Sale of Goods (also know as the Vienna convention or the CISG) excludes national rules, even those of public policy, and in particular those relating to defective products (C. Cass. 1ère chambre civile du 17/05/2023 no. 22-16290).
A French company sold food products to an Italian company. The products were intended by the buyer to be incorporated into other products.
The products turned out to be non-compliant.
The Italian buyer therefore sued the French seller (via its insurer), claiming damages on the legal basis of liability for defective products.
The Court of Appeal held the French company liable on the basis of French rules on defective products.
The French company appealed to the French Supreme Court, invoking the Vienna Convention on the International Sale of Goods. The French company invoked Article 79 of that convention to exclude its liability.
Article 79 provides that:
» A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.« .
In its ruling of 17 May 2023, the Court of Cassation followed the arguments of the French seller.
The Court of Cassation began by pointing out that the Convention on the International Sale of Goods is applicable when parties are established in two signatory states and have not excluded this Convention.
« The Convention applies to contracts for the sale of goods between parties having their place of business in different States where those States are contracting States.
Where the parties have not agreed to exclude the application of the Convention, the questions expressly settled by the Convention are governed exclusively by its provisions« .
The Court of Cassation then criticised the Court of Appeal for having ruled on the basis of French rules (of European origin) on defective products, whereas the international convention is exclusive of other liability regimes.
If the Vienna Convention applies, the mechanism of liability for defective products is that provided for by that Convention. Article 35 of the Convention provides a mechanism for liability for defective or non-conforming products.
The Court of Appeal could not therefore apply other national rules, even if those national rules are of public policy.
« The dispute concerned damage caused to the property of a company with its place of business in Italy by the delivery, by its co-contractor with its place of business in France, of goods whose type did not correspond to that provided for in the contract, and secondly, that the parties had not excluded application of the CISG, so that the CISG, whose conditions for implementation had been met, governed exclusively the question of the seller’s liability, the court of appeal violated the aforementioned texts. »
This decision confirms that :
- The international convention on the international sale of goods must apply between a seller and a buyer if the parties are in signatory states and if they have not excluded it.
- National provisions are set aside by the Vienna Convention, even if they are of public policy.
It is therefore essential to be careful in an international sale to determine whether the seller and buyer want this international Convention to apply.
Parties are often unaware that the CISG applies to their sales.
Care must then be taken to check its scope to determine which national rules do or do not apply.
This article appeared first on the FrenchLaw.Blog.