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CASE: AFRICAN DAISIES (GARDEN FLOWERS)

1, Summarize the case (What are the facts of the case? What are the legal
issues? What law is applied?)

1.1, Parties
- Claimant: Seller (Denmark)
- Respondent: Buyer (Austria)

1.2, Fact

In the spring of 1991, Australian buyers went to Denmark to order trees from a
seller. Along with Andreas Schwabe - the seller's employee, the buyer went to the
flower garden of Anders Jonsson - the seller of African daisies. The buyer checked
these plants, Schwabe explained to the buyer that they were garden plants and
needed a sunny spot. Schwabe gives no further instructions to the purchaser
regarding the care and maintenance of the plant, nor does it give any guarantee that
the flowers will bloom throughout the summer. The buyer resold the
aforementioned African daisies to a customer and promised this customer that the
chrysanthemums would bloom all summer. However, this customer complained to
the buyer because the daisies did not bloom all summer. Already before 6/8 July
1991, the first customers complained to the buyer that the plant did not bloom
beautifully and that it had fewer blossoms. The buyer did not take these complaints
seriously. buyer told its customers that they should water and fertilize the plants
better. It cannot be ascertained to which delivery these plants belonged.
On 6 or 8 July 1991, the buyer went on vacation for three weeks. During buyer’s
vacation, further customers complained that the buds of the African daisies fell off
and that subse- quently the plants longer bloomed, but only proliferated in green. It
cannot be determined how many customers complained.

After the buyer’s return, buyer established in its own garden that the African
daisies set by buyer no longer bloomed after the first blossoms had fallen off. On
that very day, buyer called Andreas Schwabe and told seller that customers had
complained about the African daisies; further, that the plant grew to be rather large
and did not develop new buds. It also did not bloom through the entire summer.
Therefore, the buyer complained against the seller because the quality of the
delivered goods did not match the quality regulations in the contract - the flowers
did not bloom all summer. According to the buyer, this is a fundamental breach of
contract, and has refused to pay the seller.

1.3, Legal issues

Had the seller breached a guarantee or committed a fundamental breach of

the contract since the flowers did not bloom through the entire summer?

1.4, CISG provisions applied

Art 36; Art 38; Art 39, Art 49

2, Legal reasoning
 The plaintiff’s legal reasoning (Seller)
The seller requests that the buyer be ordered to pay it aS [Austrian Shillings]
107,062.12 plus 12% interest on aS 23,269.77 from 30 May 1991 to 31 May 1991,
12% interest on
aS 20,054.27 from 1 June 1991 to 27 June 1991, 12% interest on aS 137,607.38
from 28 June
to 30 June 1991, 12% interest on aS 187,825.44 from 1 July to 19 August 1991,
12% interest on aS 191,000.19 from 20 August to 2 December 1991, and 12%
interest on aS 107,062.19 from 3 December 1991 to 25 May 1992, at a yearly
settlement of interest, plus 12% interest from the time the buyer was served with
the statement of claim, plus 20% turnover tax on interest and compound interest 1.
The seller submits that the delivered goods did not possess a lack of conformity.
The problems encountered with the African daisies possibly resulted from a
storage or treatment error made by the buyer. A damage during transport had to be
ruled out. Moreover, the seller had not given any guarantees. The buyer had
notified the seller of the alleged lack of conformity of the goods only after buyer
had been issued a reminder of payment. This was too late.

 The defendent’s legal reasoning (Buyer)

The buyer requests that the claim be dismissed. Buyer submits that the
delivered African daisies were not fit for their purpose, because they did not bloom
through the entire summer
– a feature which was usually taken for granted and which was furthermore
explicitly guaranteed by the seller. Already before the buyer’s vacation in the first
three weeks of July 1991, a number of the buyer’s customers had made complaints;
initially, the buyer had not taken the matter seriously and had assumed that its
customers had treated the plants incorrectly. Then, after the buyer’s vacation, it
received an entire avalanche of angry complaints. buyer furthermore realized that

1
Abstract of decison – CLOUT Abstract 107, paragraph 4, page 2, https://cisg-
online.org/files/cases/6087/translationFile/107_48464436.pdf
the African daisies which stemmed from the last delivery and had been planted by
buyer had faded. buyer then immediately notified the seller of the lack of
conformity via telephone (the non-conformity could not have been discovered
earlier). Therefore, buyer submits that the notice specifying the defect was given
within reasonable time. buyer and seller had agreed that the buyer would inform
the seller of its claims resulting from the non-conformity. The buyer did so with
letter of 3 October 1991. From the open invoice no. 43972, a partial amount of DM
6,148.20 related to the African daisies and consequently did not have to be paid.
The remaining amount of DM 10,526.-- did not have to be paid because the buyer
was entitled to claims amounting to DM 15,778.72 (= aS 111,239.97) for the non-
conforming deliveries which had been invoiced with the invoices no. 43567 and
43717.

4, Comments on the outcome of the case + notes when signing and excuting a
contract
4.1, Comments

Article 36 (2) specifically mentions that the seller will be responsible for
post-risk non-conformities if they result from “breach of any guarantee that for a
period of time the goods will remain fit for their ordinary purpose or for some
particular purpose or will retain specified qualities or characteristics.” Another
court has placed the burden of proving the existence of an express guarantee of
future performance on the buyer, and concluded that a seller of plants was not
liable under article 36 (2) for the failure of the plants to bloom throughout the
summer because the buyer did not prove that the seller had guaranteed future
performance of the plants. And a court placed the burden on the buyer to prove that
the goods had breached a five- year guarantee given by the seller.
 This case is a typical example of whether or not the parties agreed on a
fundamental breach of contract. Specifically as follows: If the contracting parties
agree that in the event of the seller's non-conformance delivery of the goods, strict
compliance with the contract is essential, any breach of the Any contract is
considered a fundamental breach of contract. For example, if the buyer declares
that the goods are not suitable, it will prevent the buyer from achieving a particular
purpose, or if the buyer informs the seller of the buyer's purpose of purchase by
mistake, prompts the seller to deliver the contract provides, any breach affecting
that particular purpose constitutes a fundamental breach of contract. Based on the
express agreements in the contract, the seller cannot at this point argue that he did
not foresee (unforeseeable) the damages that would occur to the buyer if he did not
deliver the goods. goods according to those regulations. Thus, it will be easier for
the court to determine a fundamental breach of contract if the goods are delivered
not as agreed in the contract. In this case, the court easily concluded that the seller
had committed a fundamental breach of contract. It is important for the application
of this basis that the buyer is obliged to demonstrate whether or not there is a
clause in the contract that states that failure to perform any obligation with respect
to delivery would be considered a fundamental breach. contract. Otherwise, the
buyer cannot declare that such breach by the seller is a fundamental breach of the
contract and serves as the basis for a claim to cancel the contract under Article 49
of the CISG.
Similar to this case, in the pepper dispute Spanish paprika 2 between the
German seller and the Spanish buyer regarding the delivery of pepper, it was found
that the pepper contained close to 150% of the maximum acceptable ethyl oxide
blend under German food and drug law. In this dispute, the seller proved that there
2
Germany 21 August 1995 District Court Ellwangen (Spanish paprika case), tham khảo tại
http://cisgw3.law.pace.edu/cases/950821g2.html
was a specific agreement between the seller and the buyer that the goods (i.e.
pepper) should be suitable for consumers in Germany. Therefore, the Ellwangen
District Court ruled that the buyer had committed a fundamental breach of
contract. Two disputes with two different court decisions show that, when the
parties to the contract have clearly agreed in the contract about the fundamental
breach of the contract, the court will only base on that agreement of the parties. the
parties to decide whether the breach of one party is a fundamental breach of the
contract. However, if the parties do not agree on a fundamental breach of contract,
the court will attempt to reason on the basis of the contract language, customs,
habits, and transactions between the parties3. This is often very complicated
because the law does not provide specific provisions on what is called a
fundamental breach of contract4.

4.2, Lesson learned

In the event that after the seller delivers the goods to the buyer, the buyer
discovers that the goods are damaged, not in sufficient volume, and do not
guarantee the quality as agreed, the buyer will have the right to refuse to pay. such
goods at the originally agreed price (Article 50 CISG). However, to secure the
above right, the buyer is also obliged to notify the seller of these facts within a
reasonable time to ensure the minimum possible damage (Article 39 (1) CISG).

3
Olaf Clausson, ‘Avoidance in Nonpayment Situations and Fundamental Breach under the 1980
U.N. Convention on Contracts for the International Sale of Goods’ (1984) N.Y.L.Sch.J.Int. &
Comp.L. 93, 113.
4
Vo Si Manh, Discussing fundamental breach of contract under the CISG 1980,
https://cisgvn.wordpress.com/2011/04/09/ban-về-khai-niệm-vi-phạm-cơ-bản-hợp-dồng-theo-cong-ước-vien-
1980/
 The buyer should notify the seller within a reasonable time in good faith in
case the buyer receives the goods from the seller not following the original
agreement so that the buyer can both enjoy the right to reduce the payment price
and reduce the price. minimize possible damage, and this notification can be a
prerequisite for the parties to continue to have a long-term business relationship.
The connotation of the concept of "fundamental breach of contract" under
the Vienna Convention is very broad. However, through the practice of resolving
several disputes related to international contracts for the sale of goods with the
application of the Vienna Convention, the courts of member countries have also
provided a number of practical grounds as a basis for interpretation to clarify this
concept. However, the courts of different countries have different views when it
comes to matters related to fundamental breaches of contract. The application of
this concept in practice can be difficult without specific instructions and
explanations.

TÀI LIỆU THAM KHẢO

1, Abstract of decision, CLOUT Abstract 107, https://cisg-

online.org/files/cases/6087/translationFile/107_48464436.pdf

2, United Nations Commission on International Trade Law, UNCITRAL Digest of

Case Law on the United Nations Convention on Contracts for the International
Sale of Goods, 2016, https://uncitral.un.org/sites/uncitral.un.org/files/media-
documents/uncitral/en/cisg_digest_2016.pdf
3, Vo Si Manh, Discussing fundamental breach of contract under the CISG 1980,
https://cisgvn.wordpress.com/2011/04/09/ban-về-khai-niệm-vi-phạm-cơ-bản-hợp-
dồng-theo-cong-ước-vien-1980/

4, Germany 21 August 1995 District Court Ellwangen (Spanish paprika case),

tham khảo tại http://cisgw3.law.pace.edu/cases/950821g2.html

5, Olaf Clausson, ‘Avoidance in Nonpayment Situations and Fundamental Breach

under the 1980 U.N. Convention on Contracts for the International Sale of Goods’
(1984) N.Y.L.Sch.J.Int. & Comp.L. 93, 113.