In international sales contracts (regarding movable goods) and in general conditions, the applicability of the Vienna Sales Convention is often excluded. The Vienna Sales Convention provides for a uniform sales law. In this light it is at least remarkable that in our Dutch legal practice the applicability of the Vienna Sales Convention is often excluded. Even more remarkable is the fact that choice to opt for such exclusion is probably, in most cases, based on the fact that the contracting parties have little or no knowledge of the Convention, and not so much on a thorough assessment of the differences between the Convention and our “own” Dutch sales law. In this article, some noticeable differences between the Vienna Sales Convention and Dutch law with respect to contracts of sales will be discussed. Although this article is not intended to provide a full overview of all differences, it will provide a better insight in the usefulness (or uselessness) of an exclusion of the applicability of the Vienna Sales Convention.
The Vienna Sales Convention is automatically applicable to international sales contracts relating to movable goods concluded by parties that are not consumers. However, often the applicability of the Vienna Convention is excluded. The choice for such exclusion should be based on a thorough assessment and weighing of the differences between the Convention and our ‘own’ Dutch sales law. And such differences do exist, especially in the area of the remedies offered by the two legal systems. The differences between the two legal systems regarding two of the possible remedies i.e., the right to demand delivery of substitute goods and the right to dissolve the sales contract (or in the wording of the Convention: declare avoided), will briefly be discussed hereinafter.
The right to demand delivery of substitute goods
In Dutch law (more in particular the Dutch Civil Code) the starting principle is that a buyer has the right to demand delivery of substitute goods if the goods do not conform with the contract (non conformity). A buyer does not have this right if the defect (non conformity) is of a special nature or insignificant and if delivery of substitute goods would not be justified in that context. A buyer does not have the right to demand delivery of substitute goods either if he has not handled the delivered goods properly and with all due care after he already should have taken into account the possibility that the relevant goods had to be returned.
Contrary to Dutch law which, in principle, grants a disappointed buyer a right to demand delivery of substitute goods, the Vienna Sales Convention only grants the buyer such right if the non conformity constitutes a fundamental breach of the contract. A breach of contract is fundamental if it results in such detriment to the other party (in the case at hand the buyer) as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach (in the case at hand the seller) did not foresee such result and a reasonable person of the same kind in the same circumstances would not have foreseen this either. The Vienna Sales Convention therefore does not offer a disappointed buyer a right to demand delivery of substitute goods; such right only exists if the breach of contract is to be qualified as a fundamental breach.
Right to dissolve (avoid) the contract
A similar difference between Dutch law (Dutch Civil Code) and the Vienna Sales Convention exists in respect of the right to have the contract dissolved. Under Dutch law any breach of contract justifies dissolution of the contract. This would be different if the breach, given its special nature or minor importance, does not justify the dissolution and its consequences. But again, in the Dutch Civil Code the basic principle is a right of dissolution of the contract for the disappointed buyer.
For the buyer to dissolve (avoid) the contract, the Vienna Sales Convention sets the additional requirement that the non conformity constitutes a fundamental breach of the contract. Instead of “being entitled to, unless” (as is the general principle in Dutch law) a disappointed buyer is “entitled to, if”.
Burden of proof
The above differences are reflected particularly in the area of the burden of proof. In the “entitled to, unless” situation in Dutch law, the disappointed buyer can make use of the right to demand delivery of substitute goods or the right of dissolve, and the seller will then have to prove that such action is not justified. Under the “entitled to, if” approach of the Vienna Sales Convention, the disappointed buyer shall first have to demonstrate that the non conformity constitutes a fundamental breach. Therefore the evidence position under the Vienna Sales Convention differs significantly from the evidence position under the Dutch Civil Code. For the buyer, the arrangement in the Dutch Civil Code is more attractive; for the seller the arrangement in the Vienna Sales Convention.
It appears that under the Vienna Sales Convention, the right to demand delivery of substitute goods and the right to dissolution are more limited than under Dutch law. Although this is understandable in view of the fact that the Vienna Sales Convention relates to international sales contracts, such differences may be important to consider when deciding whether or not it is advisable to exclude the applicability of the Vienna Sales Convention in contracts or in general conditions. For the buyer, such exclusion in the context of the differences in the areas of dissolution and delivery of substitute goods is, in any case, useful.
In a later article the possibility of price adjustment and the entitlement to damages as remedies under Dutch law and under the Vienna Sales Convention will be discussed, again from a legal perspective.