Invoke your opposing party’s breach of the duty to complain: otherwise the court may not include this in the judgment

Framework Agreement

A framework agreement existed between the parties. On the basis of this framework agreement, the web store placed so-called purchase orders with the wholesaler. The wholesaler then had the ordered products manufactured in Pakistan and packaged under the brand name of the web store. The framework agreement also included a penalty clause. This penalty clause covered the case where the wholesaler delivered the products ordered by the web store too late.

The course of the issue

Orders were placed by the web store and finally the first orders are delivered from Pakistan to the web store with some delay in late February 2020. By mid-March 2020, the web store had only received 30% of all products ordered. In early April, the wholesaler informed that only 30% of the ordered bathrobes were ready for shipment. The parties therefore entered into discussions with each other. In June 2020, the web store additionally informed that it had received complaints about the colorfastness of the towels after washing. Starting in July 2020, the wholesaler summoned the web store several times to take more of the ordered textile products. The web store ordered products one last time, in early October 2020.

After the wholesaler again requested to take delivery of the products, the online store complained about defects in the wholesaler's production, delivery and service, including the handling of returns in response to consumer complaints.

Court of Appeal

The wholesaler claimed to order the Web store to pay for the products ordered by the Web store. The web store claimed payment under the penalty clause in the framework agreement. The court ruled (in brief) that the purchase orders under the framework agreement qualify as a sales contract to which the Vienna Sales Convention applies and that the web store's reliance on non-conformity does not succeed.

Supreme Court ruling

The first question before the Supreme Court was whether the web store could invoke the proposition that these products were non-conforming with respect to the products that had not been sold by the web store and that had been delivered to the web store by the wholesaler (the ''remainder lot''). The court of appeal ruled, among other things, that the web store could and should have notified the wholesaler much earlier regarding the alleged defects in this remainder lot. The web store's complaint about this concerns that this judgment of the court of appeal is outside the scope of the legal dispute. After all, the wholesaler had not invoked the web store's violation of its duty to complain in its pleadings. Thus, with this judgment, the court of appeal went outside the bounds of the legal dispute.

The Supreme Court also addressed the question of whether the web store could invoke the penalty clause in the framework agreement because of the late delivery by the wholesaler. The court of appeal had ruled that the web store was not entitled to invoke this because it was established that the parties had agreed to deviate from the agreed delivery date. The web store argued to the Supreme Court that this only concerned a logistics date and says nothing about whether the parties thereby also adjusted their other contractual obligations. The Supreme Court agreed.

The matter was referred by the Supreme Court to another court of appeal for further consideration.

Conclusion

This judgment shows once again that it remains important to explicitly invoke the other party's violation of the duty to complain during proceedings. In other words, name clearly that a counterparty has not complained or has not complained in time about the quality of the delivered products, so that the judge may actually include the defense that there was no complaint or no complaint in time in its assessment. The judge may not include it ex officio in the assessment of the dispute.

In addition, should there be any deviation from what the parties have agreed in the agreement, always make clear which obligations are being adjusted or suspended. It prevents the parties from having a discussion at a later stage about whether or not to forfeit a contractual penalty.