Equapack, Inc. v. Medi-Machines S.A. Memorandum for Medi ...

IV. REGARDLESS OF WHETHER RESPONDENT COMMITTED A FUNDAMENTAL
BREACH, CLAIMANT DID NOT MAKE AN EFFECTIVE AVOIDANCE.
60. CLAIMANT purports to have avoided the contract under Article 49(1) CISG.
[Memorandum for Claimant 59-60]. This is not the case, even assuming for the sake of
argument that RESPONDENT committed a fundamental breach. First, CLAIMANT lost the
right to avoid the contract because it was unable to return the goods to RESPONDENT in the
condition in which they were received (A.). Second, it did not make an adequate valid
declaration of avoidance (B.).
A. CLAIMANT lost the right to avoid because it was unable to return the goods in
substantially the condition in which they were received.
61. A buyer loses the right to declare the contract avoided if “it is impossible for him to make
restitution of the goods substantially in the condition in which he received them.” [Art. 82(1)
CISG]. Both parties recognize that the machines are now severely corroded and not in the
condition in which they were received. [Claimant’s Ex. 6; Statement of Case 8].
62. CLAIMANT nonetheless suggests that it retains the right to avoid under Article 82(2)(c),
[see Memorandum for Claimant 63], because the change in the condition of the goods occurred
“in the course of normal use before he discovered or ought to have discovered the lack of
conformity.” [Art. 82(2)(c) CISG]. CLAIMANT makes no argument that its action in using the
machines to process salt constituted “the course of normal use.” Hence, CLAIMANT has failed
to meet its burden of proof. [OLG Stüttgart, 12 Mar. 2001 (Germany)].
63. Furthermore, CLAIMANT fails to address the fact that it continued to use the machines
(whether or not in the course of normal use) after it had reason to discover any nonconformity.
The processing limitations of the Model 14 machines should have been clear to CLAIMANT at
the time of delivery. CLAIMANT admits that it noticed “at the beginning” that the machines
“were slower for most products than had been [its] previous experience with similar machines.”
[Notice of Arbitration 8]. Yet it continued to use machines for over a month after the machines
were placed into service, thereby altering their condition. [Id.]. Hence, CLAIMANT lost any
right to rely on the processing speed of the machines as a ground for avoidance.
64. With regard to the salt, first, the fact that the Model 14 machines were not made of stainless
steel should have been apparent to CLAIMANT through the inspection that CLAIMANT was
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