CYIL 2012

LARRY A. DĎMATTEO CYIL 3 ȍ2012Ȏ was going to be used. The buyer withheld payment due to defects in the carpet. The buyer argued that the standard of quality for the carpets supplied should be based upon the purpose for which the carpet was being used commercial-hotel, which required “durable carpets.” The Municipal Court in Prague held in favor of the buyer. The High Court in Prague reversed by holding that the buyer failed to prove that the carpet supplied (which satisfied the technical details in the contract specifications) was defective. There was no evidence that the carpet supplied was defective for that type of carpet, but only that it was not of a type that satisfied the requirements of a “durable carpet” for hotel premises. The Supreme Court affirmed the ruling of the High Court, which reasoned that the quantity, quality, and description of the goods in the sense of Article 35 of the CISG were specified in the buyer’s purchase order to be “ADOS” standard carpets. The carpets supplied were ADOS and therefore, if they were not “durable” carpets, then the specification of ADOS prevailed over the implied purpose of durability for use in a hotel property. The Court confirmed the High Court’s opinion that a contract was formed under Article 18(3) of the CISG. Under Article 18(3) the buyer’s purchase order represented an offer and the delivery of the ADOS carpets constituted an acceptance. Since the buyer specified ADOS carpets then the implied warranty of merchantability was satisfied under Article 35(1) of the CISG. The court rejected the buyer’s argument that the implied warranty for a particular purpose under Article 35(2) of the CISG required the delivery of “durable carpet” since it was the buyer who specified the type of carpet and not the seller. The more recent of the two Supreme Court decisions involved the highly debated issue of the relationship between Articles 14 and 55 of the CISG. Article 14 states that in the formation of a contract the offer must “expressly or implicitly fix or make provision for determining the price.” 43 Article 55 allows the court to imply a “price generally charged at the time of the conclusion of the contract for such goods.” Can Article 55 be used to imply a price when one is not specified as required under Article 14? This was the issue in the Manufactured Paint Case . 44 The Regional Court in Hradec Králové focused on whether Article 55 of the CISG allowed them to fix a price for the delivered paint. It held that since there was no confirmation of a price, implied or otherwise, there was no evidence of a concluded contract, and therefore it dismissed the supplier’s claim for damages. The High Court in Prague agreed, noting that the seller never confirmed the buyer’s offer and, therefore, no contract was concluded. The court also noted that there was no evidence that a contract was formed under CISG 18(3), which allows the formation of a contract where the acceptance is by way of conduct, but only in cases where due to prior practices between the parties, the seller was allowed to accept by

43 CISG, Article 14(1). 44 Czech Republic 25 June 2008 Supreme Court ( Manufactured paint case ), available at http://cisgw3.law. pace.edu/cases/080625cz.html.

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