The Appeal Court of Arnhem recently expressed its opinion on the inspection and complaint requirement on grounds of the Vienna Sales Convention in the event of the purchase of perishable goods (Appeal Court of Arnhem, 9 March 2010, LJN: BL7399). The case involved a shipment of pastas and sauces supplied to a Dutch customer by a Belgian supplier, which products served as the ingredients for ready meals. The packages of the pasta meals prepared with the ingredients supplied were bulging before the best-before date of these meals had passed. Following complaints concerning this, the buyer had the pasta meals tested. This testing revealed that the bacterial counts far exceeded the statutory guide values. Shortly after being informed of the result of the testing, the buyer notified the seller of the defect. Was the buyer permitted to first await the outcome of the testing, in line with a Supreme Court decision of 29 June 2007, NJ 2008, 606, or was he required to immediately inform the seller about the complaints?
Vienna Sales Convention
The Vienna Sales Convention applies here. This is an international contract of sale relating to moveable goods. The parties had not excluded application of the Vienna Sales Convention, which is permitted.
Article 35 (1) of the Vienna Sales Convention states first and foremost that the seller must deliver items that answer to the contract. This means that the quantity, quality and packaging of the items must satisfy the requirements stipulated in the contract. This case involved a problem with the quality of the goods supplied.
Pursuant to Article 39 (1) of the Vienna Sales Convention, the buyer loses the right to rely on a failure if the buyer does not inform the seller about the failure within a reasonable time period after he discovered or ought to have discovered it. Article 38 (1) of the Vienna Sales Convention is relevant in determining the moment at which the buyer should have discovered the defect. This article stipulates that the buyer must inspect the items or have them inspected within as brief a period as possible, given the circumstances.
In the event of perishable goods, inspection must usually take place within a very short time period. This short time period starts, in principle, at the moment that the risk of the products transfers to the buyer (Articles 36, 67 and 69 of the Vienna Sales Convention). Pursuant to Article 38 (2) of the Vienna Sales Convention, an inspection may only be postponed until after arrival at the destination if the contract also encompasses the transport of the items. If the buyer himself arranges the transport, it would be wise for him to inspect the goods or have them inspected before transport therefore. After all, the reasonable time period for lodging a complaint that must be observed starts from that moment in that case. If the defect cannot be discovered during the required inspection, the time period for lodging a complaint with regard to that defect does not yet start at that moment. The buyer cannot be required to have discovered the defect at that moment. In this case, expert testing was needed to determine that the bacterial counts far exceeded the statutory guide values. If the buyer cannot be expected to carry out this kind of test during the standard inspection, the time period for lodging a complaint does not start at the moment of the inspection.
The question then arises of within what time period after the defect is discovered or ought to have been discovered must the buyer lodge his complaint. The duration of the time period for the complaint depends on the circumstances of the case and particularly on the nature of the items supplied. An (extremely) short time period for lodging a complaint applies for perishable goods. For example, the Appeal Court of Arnhem (Appeal Court of Arnhem, 19 January 2009, LJN: BL0932) found in relation to a shipment of defective citrus fruit that a period of 12 days was too long to lodge a complaint. Buyers of perishable goods must take into account a very short period for lodging complaints therefore.
In the case at hand, the parties took a different position on when the buyer lodged the complaint. The buyer says that he had the testing carried out within a few days after becoming aware that the packages of pasta meals were bulging. This testing took five weeks. The buyer says that he then lodged a complaint with the seller within four days after receiving the result of that testing. The buyer takes the position that he lodged the complaint in a timely manner, given the testing he (had to have) carried out in the interim.
Was the buyer indeed permitted to await the result of the test or should he have immediately informed the seller about the complaints?
Supreme Court, 29 June 2007, NJ 2008, 606
The Appeal Court could not yet answer whether the buyer had complained on time based on the information provided by the parties during the proceedings. The Appeal Court therefore ordered a court hearing of the parties for the purpose of gathering information. What is interesting is that the Appeal Court also gave the parties the opportunity to voice their opinions during the information hearing on the question of whether a rule as indicated by the Supreme Court in its judgement of 29 June 2007, NJ 2008, 606, can be applied in this case. This rule states – briefly put – that the buyer may first have an investigation carried out into the defects, with the promptness that can be expected of him given the circumstances of the case, before lodging his complaints with the seller. The Appeal Court also indicated that for the time being, it was of the opinion that this rule was not valid in this case. In other words, the Appeal Court felt that the buyer should have complained immediately and not awaited the test results before doing so. The Appeal Court arrived at this preliminary opinion because the Supreme Court decision cited above does not relate to a case to which the Vienna Sales Convention applies; in that case it was not perishable food but rather a home that displayed defects and the buyer in that case, unlike in the one at hand, was a non-expert private individual.
I doubt whether the Appeal Court’s preliminary opinion is correct. In my opinion, the Vienna Sales Convention also entails that if an investigation by an expert is necessary in order to ascertain the defect, the buyer may in principle await the result of that investigation before lodging his complaint with the seller. On grounds of Article 39 (1) of the Vienna Sales Convention, the time period for lodging a complaint starts as soon as the buyer has discovered or ought to have discovered the failure. If an expert investigation is needed to assess whether the item is defective, the buyer cannot be said to have discovered or to ought to have discovered a defect pending the outcome of the investigation. After all, it would be difficult for a buyer to complain if he is not aware of the defect. The mere fact that the packages of pasta meals were bulging does not mean that the particular seller supplied defective products. There could have been another reason for this; for example, other ingredients that were added to the meals may have been defective.
In my opinion, the fact that this case involved perishable goods does not change matters. This only means that a (much) shorter time period applied in which the investigation had to take place and in which the complaint had to be lodged. Nor does the fact that the buyer was a professional buyer necessarily change things. That would only make a difference if, because of his own expertise, the buyer should have ascertained the defect even without further expert investigation. In that case he could not have first awaited the outcome of the expert’s investigation. Given the nature of the defects, it does not seem likely that the buyer could have himself discovered the defect in this case.
In the judgement cited by the Appeal Court, the Supreme Court stated that the buyer must notify the seller about the investigation if the investigation can be expected to take a longer time or if it emerges during the investigation that it will indeed take a longer time. If the buyer does not do so in such a situation, the period for lodging a complaint is not interrupted. By informing the seller about the investigation, the buyer puts the period for lodging a complaint on hold during the investigation. In the case at hand, the buyer stated that the testing took five weeks. That is a very long time considering that perishable goods were involved. In line with the Supreme Court decision cited above, therefore, it is arguable that the buyer should have informed the seller before or during the investigation. Since the buyer probably did not know at that point what ingredients were defective, he should have informed all the suppliers of the ingredients about this. By failing to do so, the time period for lodging complaints was possibly not put on hold during the investigation, so that there is a good chance that the complaint was not lodged on time.
We must wait to see how the Appeal Court of Arnhem will ultimately decide in this case. Given the interim judgement, there is a good chance that the court will find that the buyer complained too late. That would mean that the buyer can no longer rely on the failure. It is very important to lodge complaints on time therefore. The time period in which a complaint must be lodged is very short, particularly for perishable goods. Very short time periods for complaints can also be stipulated contractually however. The time period for lodging a complaint starts as soon as the buyer has discovered or ought to have discovered the failure. The buyer has, in principle, the obligation to examine the products supplied as soon as the risk of the products transfers to him. If the buyer is himself responsible for the transport, in many cases he must examine the products or have them examined even before they arrive at his location therefore. If further investigation is necessary in order to ascertain a defect, under Dutch law the buyer may, as a rule, await the outcome of that investigation. It is uncertain whether this also applies on grounds of the Vienna Sales Convention. If the investigation takes too long, the investigation must be reported as well. In order to avoid running any risks, the buyer would therefore be wise to always inform the seller about the investigation he wishes to have carried out. In order to ensure that it can also be proved afterwards that a complaint was lodged on time, it is wise to lodge complaints by registered post, fax or e-mail. The buyer has been warned!