MEMORANDUM FOR RESPONDENT - Pace University

More documents

Recommendations

Info

QUEEN’S UNIVERSITY FACULTY OF LAW Perishable and seasonal goods compel the noble month to be reduced [Andersen VI.2]. In a case concerning the sale of live fish, a German Court of Appeal considered the noble month, but nonetheless found the circumstances required a reasonable time period of eight days [OLG May 1998]. Similarly, here the noble month should be reduced. Since Claimant’s notice took 28 days, it was barely within a month, and when the noble month is adjusted downward in accordance with the circumstances, Claimant’s notice was late. By failing to provide notice within a reasonable time, Claimant has lost its right to rely on the non-conformity. II. <strong>RESPONDENT</strong> IS NOT PREVENTED FROM RELYING ON ART. 39 CISG BY VIRTUE OF ART. 40 CISG. 106. Claimant argues that Respondent was not entitled to reasonable notice by operation of art. 40 CISG [Cl. Memo. 74]. This argument must fail. Art. 40 CISG prevents a seller from relying on arts. 38 and 39 CISG if it “knew or could not have been unaware” of facts related to the non- conformity, but did not disclose them. Claimant has the burden of proving Respondent “knew or could not have been unaware” [Schwenzer in Schlechtriem/Schwenzer 2010 647]. Here, Claimant cannot prove Respondent possessed the awareness required for art. 40 CISG [A]. In the alternative, Respondent disclosed the risk of non-conformity to Claimant [B]. A. Claimant cannot prove Respondent was aware of the facts related to the nonconformity, so art. 40 CISG does not apply. 107. Respondent was not aware of the facts related to the non-conformity. Art. 40 CISG requires the seller to have displayed an “obvious” knowledge of the facts related to the non-conformity [Schwenzer in Schlechtriem/Schwenzer 2010 644]. A German Court of Appeal held that the seller must have knowledge akin to bad faith or fraud for the provision to apply [OLG Feb 2004]. Another arbitral tribunal held that the seller’s awareness must “amount to at least a conscious disregard” of the facts related to the non-conformity [Beijing Light v. Connell (Sweden 1998)]. Claimant cannot meet this high standard. 108. Claimant alleges the Squid failed to conform because it did not weigh 100-150 g. Accordingly, it must prove Respondent was aware the Squid would weigh less than 100 g. Admittedly, Respondent knew illex danubecus caught earlier in the harvesting season “tend to be small” [St. of Def. 13]. However, Respondent never weighed the Squid, nor is there any evidence Respondent knew—or ever even considered—their actual weight. Accordingly, Respondent did not “obviously” know the Squid weighed less than 100 g. Nor did Respondent hide its knowledge so as to deceive or defraud Claimant. Finally, there is no evidence that Respondent closed its mind to, or consciously disregarded, the fact that the Squid weighed less than 100 g. Ultimately, Respondent’s general awareness of the harvesting season of illex danubecus cannot rise to the 32
QUEEN’S UNIVERSITY FACULTY OF LAW standard imposed by art. 40 CISG. For this reason, Respondent was entitled to reasonable notice under art. 39(1) CISG. B. In the alternative, Respondent disclosed the risk of a non-conformity to Claimant, so art. 40 CISG does not apply. 109. Even if Claimant meets the high standard set out in art. 40 CISG, Respondent disclosed the risk of a non-conformity to Claimant and therefore art. 40 CISG does not apply. Where a seller discloses “the risk of a defect”, the buyer remains bound to give notice, regardless of the seller’s knowledge [Schwenzer in Schlechtriem/Schwenzer 2010 646; art. 40 CISG]. Here, Claimant knew there was a risk the Squid would weigh less than 100 g. Claimant “knew ... the squid grew larger as the season progressed” [Clar. 27], and Respondent informed Claimant in the Sale Confirmation that the delivery would consist partly of 2008 catch squid [Cl. Ex. 4]. Given that the Squid would be delivered at the mid-point of the 2008 growing season, Claimant must have known there was a risk the 2008 squid would be small. Therefore, Respondent’s Sale Confirmation disclosed the risk of a non-conformity and Claimant remains bound to provide reasonable notice. By failing to provide reasonable notice, Claimant has lost its right to rely on any non-conformity. PART SIX: CLAIMANT FAILED TO MITIGATE ITS LOSSES. 110. Even if the Tribunal finds Claimant is entitled to damages, the damages should be almost entirely reduced because Claimant failed to mitigate its losses under art. 77 CISG. An injured party is required to take measures that are reasonable under the circumstances to mitigate its losses [Schwenzer in Schlechtriem/Schwenzer 2010 1045; DiMatteo 422]. The injured party’s “ingenuity, experience, and financial resources” determine what measures are reasonable [Bernstein/Lookofsky 103]. Here, Claimant acted unreasonably. Claimant failed to make reasonable efforts to resell the Squid [I], incurred unreasonable storage costs [II], and failed to seek a substitute purchase [III]. I. CLAIMANT FAILED TO MAKE REASONABLE ATTEMPTS TO RESELL THE SQUID TO ALTERNATIVE BUYERS. 111. Claimant failed to exercise its experience and ingenuity in its attempts to resell the Squid [Req. for Arb. 30]. Mitigation often includes the profitable resale of goods [Knapp in Bianca/Bonell 559]. Here, Claimant failed to take reasonable measures to resell the Squid. 112. First, Claimant made only half-hearted attempts to resell the Squid at a discount to long-liners in Mediterraneo. Although Claimant argues there was a “general reluctance” to purchase the Squid at a discount [Cl. Ex. 10 14; Req. for Arb. 19-20], it has adduced no evidence showing it actually solicited offers or attempted negotiations. An experienced long-line supplier, such as Claimant, ought to be aware of discount schemes capable of selling some of the Squid to long-liners despite “reluctance”. 33
Page 1 and 2: Eighteenth Annual Willem C. Vis Int
Page 3 and 4: QUEEN’S UNIVERSITY FACULTY OF LAW
Page 7 and 8: i.e. Id est [that is] kg Kilogram Q
Page 11 and 12: Hwang, Michael and Katie Chung Inte
Page 13 and 14: Schlechtriem, Peter and Ingeborg Sc
Page 49: QUEEN’S UNIVERSITY FACULTY OF LAW
Page 53: QUEEN’S UNIVERSITY FACULTY OF LAW

MEMORANDUM FOR RESPONDENT - Pace University

Create successful ePaper yourself

Delete template?

Save as template?