Often, the purchase and sale of goods has an international nature, and it is also common for it to take place in a dynamic manner, without any framework supply contract and with minimal documentary support in which the law applicable to the transaction is provided for.
The lack of contractual regulation leads us to consider what is the applicable rule and in particular, would it be, by default the rule of the country where the closest connection to the contract exists or the United Nations Convention on this matter, made in Vienna on 11th April 1980. Article 6 of the Convention provides that, when the respective countries of the parties are signatories of the Convention, they may exclude the application thereof or establish exceptions, therefore we must conclude that if there are no such exceptions, in an international contract, the Convention shall apply by default, and provided that the parties have their establishments in different countries.
The application of the Convention instead of the local legislation is relevant given that the time limits established by the Convention for the purposes of communicating non-conformity with the goods sold are greater than those provided for in local legislation.
With regards for the time limit for the examination of the goods, article 336 of the Spanish Commercial Code establishes that the buyer must examine the goods received upon receiving them, in order to determine possible faults or defects in quantity or quality, and where applicable, notify the vendor, at the risk of losing the right to exercise the action for claim if this is not done.
And article 342 of the Commercial Code consigns a deadline of 30 days as from the handing over of the goods for reporting inherent defects therein, that is to say, those which are not apparent or easily detectable, as would happen with specific machinery which must comply with certain features or levels of performance, and conformity thereto may not be given until it has been assembled and starts to operate or until load tests are done, rather than no-load tests.
On the other hand, the Vienna Convention proposes terms for the communication of non-conformity which are clearly greater than those set forth in the Commercial Code, which would allow the buyer -if the Convention is applicable- to file a claim once the time limits of the Civil Code have expired, under certain circumstances. Thus, article 39 thereof provides that the lack of conformity must be communicated to the vendor specifying the nature thereof, making it necessary to distinguish between apparent and non-apparent defects.
As a general principle, article 39 of the Convention requires that the communication of the rejection is carried out within a “reasonable time limit”, a time limit deemed by doctrine to be of expiry. As set out by judgment of the Supreme Court of 6th July 2020 (resolution number 398/2020), this “reasonable” time limit must take into account the circumstances of the case, such as the type of goods, the obvious nature of the lack of conformity, whether the defect is evident or latent or the commercial practices between the parties. Also, according to doctrine and awards granted in this area, when perishable goods are involved, or apparent defects in quality or quantity, a reasonable term would be between 4 and 6 days as from the date of delivery, and when they are not apparent, the reasonable time limits are estimated at 2 or 3 months as from the time of starting to use the goods.
But it would not be completely correct to take this temporary interpretation of what is a reasonable time limit at face value, but rather considering it as a practical orientation; as emphasised in the aforementioned Supreme Court judgment, the reasonableness is linked to the balance between the interest of the vendor to clarify the existence of claims and the interest of the buyer in exercising their rights if they consider the goods to be non-compliant. The circumstances of the case may make the time limits vary, but it should be noted that they can hardly be stretched out in the interest of the party concerned. Clearly, the nature of the defect and the moment in which it was detected or should have been detected shall mark the length of the term which we call “reasonable”.
In the specific case of machinery acquired for integrating into a complex production line, or likewise for individual use which requires technical installation and setting up services, the results of performance tests should be studied in order to check whether they obtain the general operation results announced by the manufacturer or those contractually agreed with the vendor. In our opinion, the time limit for issuing the non-conformity communication will depend on the moment in which it is possible to know whether the machine works or not as agreed, not just at the time of installation or non-load testing; the date on which the calculation of the reasonable period of time begins shall be deemed to be the date on which the tests took place (if the result of the tests was immediately available) or the date on which the result is known, if the result was not available at that time.
In any case, article 39 of the Convention establishes limits to the interpretation of the date from which (a quo) and the time limit for the communication of non-conformity:
1) on the one hand, the calculation of the time limit commences as from knowing of or the moment when the defect should have been detected, thus imposing an obligation of diligence upon the purchaser, which prevents a situation of abuse by the purchaser. This obliges the purchaser to act without delay to analyse the state of the goods (article 38 of the Vienna Convention), and to issue its non-conformity communication. When the defects are obvious, we must assume that the date from which (dies a quo) will be the date upon which the goods are received, whereas when it is a matter of latent defects the date will be that upon which the purchaser makes its declaration (or should have done so), because it is not until then that the purchaser had the opportunity to know of its existence and report them to the vendor. Article 38, when using the expression “in the shortest term possible” penalises the buyer’s indifference regarding the examination of the goods and resembles article 336 of the Spanish Commercial Code, which uses the expression “upon receipt of the goods”, although the first expression suggests more flexibility, and is closer to the concept of “reasonability” used by article 39 of the Convention. The Commercial Code calls for immediacy following the receipt of the goods whereas the Convention refers to the first moment (reasonably) available to the purchaser, which will not always be that in which the reception of the goods occurs; there may be cases where the initial examination must be carried out by a specialised person or someone with the necessary powers of attorney who may not be available at the time of receiving the goods. The greater flexibility of the Convention confirms the fact that doctrine deems that the “shortest possible” term established by the Convention may be 4-6 days, that is to say, somewhat longer than the 4 days set forth in the Commercial Code.
2) the time limit established in the Convention for notifying non-conformity is 2 years, much higher than the 30 days established by the Commercial Code; said term starts to run from the time the goods are placed in the possession of the buyer (except when there is incompatibility with a contractual guarantee period).
That said, this maximum term of 2 years must be understood as subsidiary to the principal, that is to say, the “reasonable” term; and it is applicable to the cases wherein the defects manifest themselves following reception of the goods and the purchaser has not been able to uncover them in a period superior to the reasonable term, which, according to doctrine is 2-3 months before, due to their latent nature; this even covers cases wherein the defects manifest themselves after this “reasonable” term (see Supreme Court judgment of 6th July 2020). In this way, and as in the case of the indicated judgment, it may be that when communicating the non-acceptation within the maximum term of 2 years provided for in article 39.2 of the Convention, the reasonable term for communication is considered to have been exceeded and therefore the action has expired. In any case, this term stipulated in article 39 is different to the term which the purchaser has for exercising its actions before the courts, a matter which is not resolved by the Vienna Convention, therefore the law of the country wherein the contract has its closest link must be followed.
Eduardo Vilá
Vilá Abogados
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31st July 2020
