The Vienna Sales Convention: general terms and conditions, obligation to investigate and obligation to complain

The Vienna Sales Convention applies to international agreements for the purchase of movable property that is not intended for personal use. Recently, the Zeeland-West-Brabant district court expressed an opinion on the question of whether the Vienna Sales Convention had been excluded in general terms and conditions General terms applicable on all contracts of a corporate business.
» Meer over general terms and conditions general terms and conditions and whether the obligation to investigate and complain had been met. Lawyer Lennard Noordzij explains.

International purchase agreement: the Vienna Sales Convention

The Vienna Sales Convention (VSC) applies to international purchase agreements between professional parties (and therefore no consumers) with regard to movable property. The Netherlands and almost all its major trading partners such as Germany, the United States, China, France and Japan – the United Kingdom is an important exception – are party to the VSC. If the VSC has not been excluded by contract, it applies. The provisions of the VSC prevail over the provisions of Dutch law. For example, under the VSC, an agreement can be terminated less easily: instead of a mere breach, a fundamental breach is required. I wrote a blog about this earlier.

Dispute in question

In this case, the Dutch company Organto and the Spanish company Axarfruit were engaged in a dispute over a batch of avocados. Axarfruit bought avocados worth € 25,000 from Organto. Organto bought these avocados in Colombia. After arrival in the Netherlands, they were transported to Spain by lorry. On arrival in Spain, Axafruit considered the quality of the avocados to be substandard and therefore refused to pay the € 25,000. As a result, Organto brought a claim for payment of this amount before the Dutch court.

Vienna Sales Convention excluded when using general terms and conditions?

In principle, the VSC applies to the purchase agreement between Organto and Axarfruit, since both parties are established in a state party and the purchase agreement relates to movable property. This is only different if the parties have excluded the applicability of the VSC by contract. In 2005, the Dutch Supreme Court ruled that the question of whether the general terms and conditions are part of the purchase agreement has to be assessed on the basis of the VSC itself.

Under the VSC, general terms and conditions are only part of a purchase agreement if there was a reasonable opportunity to take note of these general terms and conditions. For example, if they have been printed on the reverse side of the paper agreement or if they were explicitly forwarded to the purchaser. In this case, the order confirmation of Organto – which was only forwarded after the negotiations had been completed – contained a reference to their own general terms and conditions. It also said that these would be forwarded. That had not happened. This is why the court judged that the exclusion of the VSC was not legally valid. The rules of the VSC therefore have to be used for assessing this dispute.

Obligation to investigate under the Vienna Sales Convention

Under the VSC, the purchaser is obliged to inspect the purchased goods with a period that is as short as possible, given the circumstances. If the agreement also relates to the transport of the goods, the inspection may be postponed until after arrival of the goods at their destination. Under the VSC it also applies that a purchaser has to report within a reasonable period that, according to him, there is a breach. That report must be specific to such extent that the seller will be able to form an opinion about the alleged defect and will be able to take appropriate measures.

Opinion of the court

In this case, the purchase agreement between Organto and Axarfruit did not include the transport of the avocados from the Netherlands to Spain, since Axarfruit would arrange this themselves. Moreover, it concerned potentially perishable and vulnerable goods. This is why Axarfruit was under an obligation to inspect the avocados before transport to Spain. Axarfruit did not do that. Besides, Axarfruit should have complained immediately after the inspection. Axarfruit also omitted to do that. This is why the court ruled that Axarfruit had failed to comply with its obligation to investigate and complain. Axarfruit was ordered by the court to pay the price for the avocados, plus interest and costs.