MEMORANDUM FOR RESPONDENT - Pace University

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QUEEN’S UNIVERSITY FACULTY OF LAW within a reasonable time loses its right to all remedies relating to the non-conformity [Honnold 259; Schwenzer in Schlectriem 1998 319]. Even if the Squid did not conform to the Contract, Claimant failed to notify Respondent within a reasonable time and thus forfeited its right to rely on any alleged non-conformity [I]. In addition, Respondent was unaware of facts related to the non-conformity at the time of delivery and, therefore, is not prevented by art. 40 CISG from relying on art. 39 [II]. I. CLAIMANT FAILED TO PROVIDE REASONABLE NOTICE OF THE NON-CON<strong>FOR</strong>MITY IN ACCORDANCE WITH ARTS. 38 AND 39 CISG. 85. Claimant notified Respondent of the alleged non-conformity on 16 August 2008 [Cl. Ex. 8; Cl. Ex. 9], after the expiry of the notice period under the CISG. The time when a buyer “ought to have discovered” a lack of conformity is determined by art. 38(1) CISG. This provision requires a buyer to reasonably examine the goods “within as short a period as is practicable” [art. 38(1) CISG]. Here, Claimant failed to perform a reasonable examination within as short a period as is practicable after taking delivery and, accordingly, failed to discover the alleged non-conformity when it ought to have done so [A]. By notifying Respondent on 16 August 2008, 45 days after it ought to have discovered the non-conformity, it failed to provide notice in accordance with art. 39(1) CISG [B]. Even if Claimant gave notice of the non-conformity on 29 July 2008, this was still not within a reasonable time [C]. A. A reasonable examination of the goods, conducted on or around 1 July 2008, would have discovered the alleged non-conformity. 86. Claimant examined the goods shortly after taking delivery on 1 July 2008. However, this examination unreasonably failed to discover the non-conformity. The reasonableness of a buyer’s examination of goods is determined according to the circumstances [Schwenzer in Schlechtriem/Schwenzer 2010 612; Bianca in Bianca/Bonell 298]. It need not be a “complex technological analysis” [Bianca in Bianca/Bonell 297], but must be “thorough and professional” [OGH Aug 1999], according to prevailing industry standards. 87. Respondent packed the Squid into approximately 20,000 cartons and labelled the cartons by catch season [Cl. Ex. 4; Clar. 32]. Respondent organized the cartons into pallets and placed the pallets into 12 shipping containers [Cl. Ex. 10 9]. When the Squid arrived, Claimant opened only two of the 12 containers. From those, Claimant selected just 20 cartons for weighing—all of which were labelled “illex danubecus 2007” [Cl. Ex. 10 10; Clar. 32]. Of these 20, Claimant defrosted only five [Cl. Ex. 10 9-10]. This level of scrutiny was unreasonable in the circumstances. Had Claimant reasonably examined the Squid, it would have easily identified the 26
QUEEN’S UNIVERSITY FACULTY OF LAW alleged non-conformity. Here, Claimant failed to take a reasonable sample of the Squid [1]. Moreover, Claimant failed to exercise the requisite degree of diligence in its examination [2]. 1. Claimant failed to take a reasonable sample of the Squid. 88. Claimant failed to conduct a reasonable sampling and thus did not conduct a reasonable examination [art. 38(1) CISG]. Where large quantities of goods are delivered, it is reasonable for buyers to examine a sample of the goods. However, the sample must be random and statistically representative of the bulk of the goods [Schwenzer in Schlechtriem 1998 304; Schwenzer in Schlechtriem/Schwenzer 2010 613; Crudex v. Landmark (Finland 2004)]. Here, Claimant did examine the goods by inspecting a sample of the Squid on 1 July 2008. However, this sample was unreasonable because it was too small [a] and not randomly selected [b]. A reasonable sampling would have identified the alleged non-conformity on 1 July 2008. a. Claimant’s sample was unreasonably small. 89. Claimant failed to examine a sufficiently large sample of squid. To be statistically representative, the number of goods sampled should be at least “a few…per thousand” [Schwenzer in Schlechtriem 1998 304]. Claimant weighed 20 of the 20,000 cartons delivered, but defrosted a sample of only five—just 0.025% of the Squid. Since defrosting is a necessary part of sampling frozen perishables [Clar. 33; Schwenzer in Schlechtriem/Schwenzer 2010 613; Fallini v. Foodik (Netherlands 1991)], defrosting less than “a few per thousand” was unreasonable. 90. Even if Claimant had defrosted all 20 cartons, the sample would still have been too small to constitute a thorough and professional examination. TGT Laboratories, a firm that specializes in scientific reports of this kind, examined a sample of 120 cartons [Cl. Ex. 8]. Its sampling discovered the alleged non-conformity [Cl. Ex. 9]. Had Claimant selected a statistically representative sample, similar to TGT Laboratories’, it would have discovered the non- conformity [Cl. Ex. 8]. By defrosting a sample representing only 0.025% of the Squid, Claimant failed to perform a reasonable sampling. b. Claimant did not examine a random sample of the Squid. 91. Claimant did not randomly select the cartons to be examined and thus its examination was unreasonable. A buyer who relies on sampling must ensure the sample is selected randomly [Schwenzer in Schlechtriem 1998 304]. The cartons Claimant defrosted and weighed were selected from just two of the 12 containers [Cl. Ex. 10 10]. Since Claimant unpacked all of the containers [Cl. Ex. 10 9], there was no commercial explanation for not broadening the sample and examining cartons from other containers. 92. In addition, Claimant acted unreasonably by sampling only cartons labelled “illex danubecus 2007”—instead of cartons labelled 2007 and 2008. A case concerning the delivery of frozen 27
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MEMORANDUM FOR RESPONDENT - Pace University

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