The insurer of an Italian company, subrogated to the latter’s rights, sued a French company and its insurer on the basis of the liability for defective and non-compliant food ingredients, which were then to be incorporated by the purchasing company into its own products.
In a ruling dated 21 October 2021 (RG 20/04472), the Versailles Court of Appeal upheld the insurer’s claims and found the defendant company liable for defective products, after finding that it could not be held liable under the Convention of 11 April 1980 on Contracts for the International Sale of Goods (the “CISG”) for lack of conformity of the goods under the exemption provided for in Article 79.
For the record, article 79 CISG provides that: “[a] party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it, or its consequences “.
On appeal, the French company argued that it could not be held liable on the basis of product liability, since the Court had ruled that it could not be held liable on the basis of CISG.
It was therefore up to the Cour de cassation to determine whether the French company could be held tortiously liable in tort for defective products, insofar as it could not be held liable under CISG.
The Court of Cassation quashed the appeal judgment. After recalling the scope of the CISG, the Court pointed out that it follows from the provisions of the CISG that where the parties have not agreed to exclude its application, the issues expressly settled by the CISG must be governed exclusively by its provisions.
The Court noted that the dispute concerned damage caused to the property of a company established in Italy by the delivery by its co-contractor established in France of goods of a type that did not correspond to that provided for in the contract, and that the parties had not excluded the application of the CISG.
Consequently, the requirements for the application of the CISG were met, and its provisions had to govern exclusively the question of the seller’s liability. Insofar as the French company benefited from the exemption provided for in Article 79, its liability could not be sought on the basis of liability for defective products.
This solution does not meet with unanimous approval by commentators, insofar as the application of CISG to a contract of sale may be excluded by the parties, whereas it is not possible to derogate from the liability for defective products (article 1245-14 of the Civil Code) and this ground could moreover be raised by a sub-purchaser of the products in question.
Cass. civ. 1, 17 May 2023, no. 22-16.290
