Vienna Convention and termination of the contract of sale. Limitation and prescription periods of the action.

As already noted, the Vienna Convention does not deal with the limitation of actionswhich, according to the most authoritative doctrine[1]  and case law,[2] is governed by the domestic rules. The limitation period, therefore, pursuant to Article 7(2) of the same Convention, is governed by the rules of the applicable law and, in the case of Italian law, by Article 1495 of the Civil Code et seq.

1. Time limits under Art. 39 and 49 of the Convention

In contrast, the Convention expressly regulates the time limitation of the purchaser's right to a warranty. Art. 39 reads as follows:

1. The purchaser forfeits the right to rely on a lack of conformity if he does not report it to the seller, specifying the nature of the lack of conformity, within a period of one year. reasonable termfrom the time it found or should have found it.
2. In all cases, the purchaser loses the right to assert a conformity defect if he does not report it at the latest within a period of two yearsfrom the date on which the goods were actually delivered to it, unless such expiry is incompatible with the duration of a contractual guarantee.   

Art. 39 thus provides that the buyer's right to rely on a lack of conformity of the goods, including the right to terminate the contract, ceases to exist if he does not report it to the seller within a reasonable time after he has discovered it or ought to have discovered it and, in any case at the latest within two years from the date on which the goods were actually delivered to it.

Contrary to civil law rules, in the event that the purchaser wishes to request termination of the contractual relationship, the Convention provides for a further limitation period, in addition to that described above for reporting the defect, which requires it to notify the seller of its intention to declare the contract terminated. Art 49 of the Convention provides as follows:

1. The purchaser may declare the contract terminated [avoided]:
   1. if the seller's non-performance of any of its obligations under the contract or this Convention constitutes a fundamental breach of the contract; [...].
2. However, when the seller has delivered the goods, the buyer expires from the right to declare the contract terminated if he has not done so:
   1. in the event of late delivery, within a reasonable time from the time it became aware that delivery had taken place;
   2. in the event of non-compliance other than late delivery, within a reasonable deadline.

This article contemplates the most radical of remedies for non-performance by the seller: termination of the contract. Para. (2) of Art. 49 provides that where the buyer has delivered, the purchaser loses the right to terminate the contract if it does not exercise it within a "term reasonable" through its own unilateral declaration.

The buyer under the Vienna Convention must therefore:

• within a reasonable time (and at the latest within two years after delivery) to notify the defect (Art. 39);
• within a reasonable time after delivery, declare the contract terminated (Art. 49).

On the interpretation of 'reasonable time' in Art. 49 for the declaration of termination of a contract, the Courts have pronounced themselves taking into account the type of goods sold and product sector.

The period of five months from the moment the buyer informed the seller of the defects in the goods was deemed unreasonable;[3] a declaration of termination made eight weeks after the buyer became aware of the existence of the defects was also held to be out of time;[4] "The period of eight months after the buyer should have known of the defects was also held to be 'unreasonable'.[5] On the other hand, the period of one month to five weeks was considered reasonable and therefore timely to make the declaration referred to in Art. 49 (2) (b).[6]

Moreover, according to authoritative doctrine, the reasonable period of time referred to in Art. 49(2) may never exceed the period of time referred to in Art. 39(2), i.e. two years from the date on which the goods were actually delivered.

"The buyer loses the right to rely on the lack of conformity and consequently to terminate the contract. In such a case, the time limit provided for in Art. 39 prevails over that provided for in Art. 49(2)(B); the date of the complaint under Art. 39 and that of the declaration of termination under Art. 49 may not coincide, but the time limit for both starts at the same time, and has the same expiry date [note date of actual delivery].[7]"

This implies that within a maximum of two years after delivery, the buyer must either denounce the defects (ex art. 39) or declare the contract void (ex art. 49)if it intends to seek termination of the contractual relationship in court.

About the mode with which such a declaration must be made, Article 26 of the Convention provides:

"A declaration of termination is effective only if it is made by notice to the other party."

This implies that this declaration must contain expressly and unequivocally that the contract has been terminated and therefore terminated.[8]

[1] Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, UNCITRALS, 2016 UNITED NATIONS, 2016 Edition, p. 25; Schlechtriem, Internationales UN-Kaufrecht, Tübingen 2007, 124, n. 162; Honsel, Das einheitliche UN-Kaufrecht, available at. http://20iahre.cisg-library.org."

[2] Bundesgerichtshof, Germany, 23 October 2013, Internationales Handelsrecht 2014, 25 = CISG-online No. 2474; Bundesgericht, Switzerland, 18 May 2009, English translation available on the Internet at www.cisg.law.pace.edu; Appellationsgericht Basel-Stadt, Switzerland, 26 September 2008, English translation available on the Internet at www.cisg.law.pace.edu; Supreme Court, Slovakia, 30 April 2008, English translation available on the Internet at www.cisg.law.pace.edu; Oberlandesgericht Köln, Germany, 13 February, 2006, also in Internationales Handeslrecht 2006, 145 ff.; Cour d'appel de Versailles, France, 13 October 2005, English translation available on the Internet at www.cisg.law.pace.edu, Tribunale di Padova, sez. Este, 20 February 2004, available at http://www.uncitral.org/docs/clout/ITA/ITA_100106_FT_clean.pdf.

[3] Bundesgerichtshof, Germany, 15 February 1995; see also Oberlandesgericht München, Germany, 2 March 1994] (4 months).

[4] Oberlandesgericht Koblenz, Germany, 31 January 1997.

[5] Cour d'appel Paris, France, 14 June 2001; see also Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, 22 October 1998. (which considered a complaint made after five or six months to be untimely); Hof 's-Hertogenbosch, Denmark, 11 October 2005.

[6] [Tribunal cantonal du canton de Valais, Switzerland, 21 February 2005] (one month); CLOUT case No. 165 [Oberlandesgericht Oldenburg, Germany, 1 February 1995] (five weeks); Bundesgericht, Switzerland, 18 May 2009, Internationales Handelsrecht 2010, 27 (one to two months).

[7] Bianca and Bonell, Commentary on the Vienna Convention on the International Sale of Goods, New Civil Laws Annotated, CEDAM, Padua, 1989.

[8] Kantonsgericht des Kantons Zug, Switzerland, 30 August 2007; UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, UNCITRALS, 2016 UNITED NATIONS, 2016 Edition, p. 233.