Notice of non-conformity under the CISG (Vienna Convention)
When buying goods overseas, problems can arise when those goods lack conformity. The first thing you do is notifying the seller. But not everyone is aware that if you fail to give a notice of lack of conformity within a reasonable time, the consequences can be a complete loss of remedy under the CISG (also called the Vienna Convention). Dutch contract lawyer Marco Guit explains: what is a reasonable time to notice, and what can be the consequences?
CISG for international sale contracts
The CISG (Convention on Contracts of the International Sale of Goods) is applied to contracts concerning the international sale of goods. Parties may however exclude the application of the convention (which is indeed widely done).
Notice of Non-Conformity and the Duty to examine goods
Article 38 prescribes a duty for the buyer to inspect the goods delivered to him within as short a period as practicable in the circumstances. If the goods do not comply with the contract (i.e. non-conformity), the buyer has to notify the seller hereof within reasonable time after the buyer has discovered this or ought to have discovered. If buyer fails to notify within reasonable time, he looses his remedies.
Exceptions to the rule
A seller cannot rely on the buyer’s duty to give notice of non-conformity where the seller was aware or could not have been unaware of the non-conformity in question (article 40 CISG). Besides, the buyer may still reduce the price or claim damages (loss of profits excluded) if he has a reasonable excuse for his failure to give the required notice (article 44 CISG).
What is “reasonable time”?
What is reasonable time depends on the circumstances of the case: the nature of the goods (perishable or not), the agreement between parties et cetera. In litigation, a Dutch court recently ruled that in that specific case a period of 5 months was not a reasonable time but case law on this matter is far from uniform.
Dutch lawyers for International Sale Contracts
Seen the drastic consequences of a failure to notify a seller of non-conformity of goods, it is highly recommended to check your goods as soon as possible and notify the seller, if needed, promptly. Should you require more information on this matter or do you need assistance with you international sale contracts, please feel free to contact our law firm.