LABELING MACHINE Youth & Beauty Oy is a manufacturer of cosmetics products. Six months ago they bought a labeling machine from Inssi Oyj. Youth and Beauty expected to receive the machine a month ago but they did not. Last week, when the machine was delivered and installed, Youth and Beauty realized that it did not meet the standards. What does the problem deal with?

TRADE IN MOVABLES

TRADE CONTRACT S.Seller B.Buyer MAIN DUTIES: Quality and quantity Timely delivery Payment INFRINGEMENTS: Defect Delay Delay REMEDIES?

CONSUMER PROTECTION ACT HIERARCHY OF NORMS 4. NON-MANDATORY ACTS SALE OF GOODS ACT 3. TRADE USAGE 2. CONTRACT 1. MANDATORY PROVISIONS CONSUMER PROTECTION ACT HIRE-PURCHASE ACT

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BUSINESS TRADE SALE OF GOODS ACT

Case: Assembly Line Teknoprosess Oyj delivered, on basis of a contract, a packaging machine to Makkaratehdas Oy. When the machine had been installed as part of the assembly line, in two weeks after delivery, Makkaratehdas was able to test the machine. Makkaratehdas gave notice of the defect claiming that the capacity of the machine was significantly less than expected. Teknoprosess refused to compromise. Your comments?

2. Contribute to the buyer’s performance SELLER’S DUTIES 6-11, 17, 70-78§ Hand over The right kind of delivery In due time In the right place The property in the goods 2. Contribute to the buyer’s performance

SELLER’S DEFECT Defective quality 17-19§ The commodity 1. Is not in accordance with the contract, 2. Is not fit for the purpose, 3. Does not correspond to the seller’ sample, or description given to the buyer 4. Does not fulfil the appropriate packaging standards 5. Is not in accordance with “as is” conditions

2) Legal defect 41§ 1) If the commodity is in the possession of someone who is not the true owner because of theft, robbery etc. => The buyer will have to return the commodity to the true owner without payment 2) If a third party owns the commodity for another reason => The buyer will have to return the commodity to the true owner only against payment, if he did not know and should not have known about the third party rights

RELEVANT TIME FOR DETERMINING CONFORMITY 21§ Whether the goods are defective shall be determined with regard to their properties at the time when the risk passes to the buyer. The seller is liable for any defect that existed at that time even if it did not appear until later.

PASSING OF RISK 7, 12-13§ Risk passes to the buyer when 1. The goods are handed over to the buyer or to the first carrier 2. Because of an act or omission of the buyer the goods are not delivered when delivery is due 3. The goods have been placed at the buyer’s disposal

REMEDIES OF DEFECT 32-40§ Buyer must give notice and present a claim: a) Claim for remedy If possible: 1. Withhold payment 2. Require the seller remedy the defect 3. Demand delivery of substitute goods if the infringement is of substantial importance to him If not, then: 1. Demand reduction of price 2. Declare the contract avoided b) And claim for damages

Delivery must take place DELAY IN DELIVERY 9§ Delivery must take place 1. In accordance with the contract or 2. On demand or without delay or 3. Within a reasonable time after the conclusion of the contract

REMEDIES OF DELAY IN DELIVERY 22-25§ Buyer is entitled to a) Remedies 1. Withhold payment, 2. Demand performance 3. Declare the contract avoided if the delay is of substantial importance to the buyer, or the buyer has fixed an additional period of time for delivery during which the seller does not deliver b) And damages

BUYER’S DUTIES 20, 31, 45-50, 72-78§ Payment in accordance with the contract 2. Contribute to the seller’s performance 3. Receive the goods 4. Examine the goods

Case: Non-payment A manufacturer Nero Oyj had sold on 15 June a machine to Business Oy at the price of € 40 000. The machine was, in compliance with the contract, delivered on 1 Sept to the business location of the buyer. 15 Oct Nero Oy expected to receive the payment in accordance with the contract but there was no payment. They tried to contact Business Oy but with not result. How would you advice Nero Oy? If the goods have been handed over to the buyer, the seller may declare the contract avoided only if he has reserved himself such right in the contract or if the buyer rejects the goods. (54§)

REMEDIES OF BREACH OF CONTRACT BY THE BUYER 51-54, 57§ Seller is entitled to 1. Withhold delivery 2. Demand payment 3. Declare the contract avoided if the delay is substantial and if the goods are not in the possession of the buyer or if the seller has reserved himself such the right the contract or if the buyer rejects the goods and 4. Claim damages

FORCE MAJEURE 27§ Impediment which is Unavoidable Beyond control Unpredictable => Removes the duty to pay damages occurred to the other party Postpones the duty to deliver

DAMAGES 27, 67-71§ 1. Direct damages E.g. the difference between contract price and the price received in the substitute transaction Must be compensated unless caused by force majeure 2. Indirect damages E.g. a loss of profit Must be compensated if caused by negligence attributable to the other party The injured party must take reasonable measures to mitigate his loss