Lloyd's Maritime and Commercial Law Quarterly
A ULIS ECHO IN THE CISG WORLD
Pamesa Ceramica v. Yisrael Mendelson
The Uniform Law on the International Sale of Goods (ULIS),1 the predecessor of the UN Convention on Contracts for the International Sale of Goods 1980 (“CISG”), will, unlike English law, prevent the buyer from relying on a lack of conformity in the goods if it fails to give the seller a notice of lack of conformity within the prescribed period (art 39).2 Where the buyer does fail to give this notice, it can try to invoke ULIS, art 40, according to which the seller cannot rely on art 39 “if the lack of conformity relates to facts of which he knew, or of which he could not have been unaware, and which he did not disclose”.3 If unsuccessful, the buyer can attempt to bring a claim in tort. These were the issues addressed in the recent decision of the Supreme Court of Israel4 in Pamesa Ceramica v. Yisrael Mendelson Ltd.5
A Spanish manufacturer of floor tiles, Pamesa Ceramica (the seller), sold floor tiles to Mendelson, an Israeli company (the buyer).6 The buyer resold these tiles to Eisenberger, who used them in the construction of a residential building. After the building had become inhabited, the tiles were found to be defective. Eisenberger replaced the tiles and sued the buyer for the price, the costs of replacing the tiles and loss of its reputation. The District Court held the buyer liable to Eisenberger for damage to goodwill and costs of replacing the tiles7 and the buyer in turn sought to recover the amount of its liability to Eisenberger from the seller. The contract between the seller and the buyer was governed by ULIS.
1. See the 1964 Hague Convention relating to a Uniform Law on the International Sale of Goods at www.unidroit.org/english/conventions/c-ulis.htm. See also the 1964 Hague Convention relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF) www.unidroit.org/english/conventions/c-ulf.htm.
2. Similarly, see CISG, art 39.
3. Similarly, see CISG, art 40.
4. Although Israel has ratified CISG, according to the Sales Law (International Sale of Goods) 5760–1999 (which was passed on 25 October 1999 and entered into force on 5 February 2000 (see www.biu.ac.il/LAW/cisg)), whereby CISG was incorporated into the Israeli law, international sales contracts made before the commencement of this law are to be governed by the previous law incorporating ULIS and ULF (the Sale (International Sale of Goods) Law 5731–1971 and the Sale (Formation of Contracts for the International Sale of Goods) Law, 5738–1978).
5. Pamesa Ceramica v. Yisrael Mendelson Ltd [2009] Israel LR 27; also at cisgw3.law.pace.edu/cases/090317i5.html#cabc.
6. To be precise, an original buyer was acquired by Mendelson (see Pamesa, [2]).
7. The issues arising from the contract between the buyer and Eisenberger concerned the buyer’s appeal challenging the basis for and extent of its liability under its resale contract and the sub-buyer’s appeal on the quantum of damages.
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY
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