Ontario Court Considers United Nations Convention on Contracts for the International Sale of Goods on Summary Judgment Motion

Andrew Ottaway, B.A. (Hons.), LL.B.Civil Litigation, Commercial, Commercial and Contract Litigation, Commercial Litigation, Contract Disputes, Cross-Border Litigation, International Sale of Goods, Sale of Goods0 Comments

In Solea International BVBA v. Bassett & Walker International Inc., 2018 ONSC 4261, the Ontario Court of Appeal had directed the Superior Court to rehear a motion for summary judgment applying the provisions of the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), representing a rare instance of the Ontario Court explicitly considering the CISG.  

The case involved the sale of shrimp by the plaintiff to the defendant.  The defendant argued, among other things, that it was not required to pay for the shrimp because the plaintiff breached a fundamental term of the contract, being provision of  a Health Certificate with a statement guaranteeing that the shrimp was free of certain diseases. The defendant argued that as a result of breach of a fundamental term, it was entitled to declare the contract avoided (pursuant to Article 49 of the CISG).

In rejecting that defence, the Judge did not consider whether the breach was “fundamental”.  Rather, the Judge, referring to Article 49 (which states that “The buyer may declare the contract avoided:  (a) if the failure by the seller to perform any of his obligations under the contract or this Convention amount to a fundamental breach of contract” [Emphasis added.]) and determined that there was no evidence that the defendant had “declared” the contract avoided as required by the CSIG, such that the defendant was not entitled to avoid the contact.

The decision does not refer to Article 26 of the CISG (which provides that “A declaration of avoidance of the contract is effective only if made by notice to the other party”) or to the CISG case law considering the necessary form, contents and timing of the “notice” of avoidance.

Similarly, the decision did consider in detail Article 49 (2) (b) (which provides that “where the seller has delivered the goods, the buyer loses the right to declare the contract avoided unless he does so: […] (b) in respect of any breach other than late delivery, within a reasonable time: (i) after he knew or ought to have known of the breach”) or the CISG case law regarding “a reasonable time”.

Solea International BVBA v. Bassett & Walker International Inc. is noteworthy as one of the few Ontario cases to consider the CISG in any detail.  However, it is unfortunate that the decision did not consider the body of international decisions interpreting the provisions of the CISG (including from Courts with significantly more experience applying the CISG).

Many Ontario lawyers are not aware that the CISG is the law of Ontario (by the International Sales Conventions Act, RSO 1990, c I.10) that applies to contracts for the international sale of goods.  The lawyers at Gilbertson Davis LLP have experience with commercial litigation claims, including international sale of goods claims involving the CISG. Please contact us for an initial consultation.

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About the Author
Andrew Ottaway, B.A. (Hons.), LL.B.

Andrew Ottaway, B.A. (Hons.), LL.B.

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