3 CISG

[…] The sole arbitrator found that the contract was an international sales contract governed by CISG as the materials supplied by the buyer did not amount to a substantial part of the materials necessary for the production of the goods (Art 3(1) CISG). In the case at hand, the value of the materials supplied by the buyer amounted to approximately 10% of the total value of the containers to be produced. […]

[Facts]¹⁰

An Italian seller and a German buyer concluded a contract for the sale of machinery for the manufacturing of windows. The machinery had to be produced by the seller according to the buyer’s specifications and design and the buyer had to supply a part of the materials necessary for such production. The seller also had to install the machinery and put it into operation. A dispute arose when the buyer, faced with delays in delivery, declared the contract avoided.

[Judgment]

[…] Contracts for the supply of goods to be manufactured or produced are according to Article 3(1) CISG to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. Accordingly, the Convention is also applicable to the contract calling for the delivery of a window production plant concluded between the [buyer] and the [seller] […]. The few tools which were to be supplied by the [buyer] are neither with respect to their value nor their function essential ones—the French text of the Convention speaks of ‘part essentielle’—nor ‘substantial parts’—as stated in the English text of the plant to be delivered […]. This is particularly true as the plant ordered is, as has been argued by both parties, a standard model. […]

[Facts]

The [Buyer] concluded a contract for the delivery and laying of steel bars with the [Seller] in autumn 2004 in respect to the aforementioned project. A fixed price was guaranteed until 30 April 2005. Subsequent to that date, a new price was to be set. In fact, on 29 March 2005 the parties agreed on a new (reduced) fixed price, which should be valid between 1 April 2005 and 31 March 2006.

The wholesale price index declined considerably in the aftermath. Therefore, the [Buyer] claimed that this should entail a decline of the agreed price. The [Buyer] thus unilaterally reduced the price of the invoices issued in respect to the delivery and laying of steel bars.

[Judgment]

[…] [I]t cannot be decided conclusively on the basis of the current state of the procedure whether the CISG actually can be applied to the present case. The parties have at least not concluded a pure contract of sale. It is true that according to Article 3(1) CISG contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. Mixed-type contracts are not governed by the United Nations Convention on Contracts for the International Sale of Goods if the part which does not relate to the sale is crucially predominant. The individual circumstances of the relation between the part which relates to the sale and the part which does not relate to the sale are decisive […]. The quantitative balance does not constitute the sole requirement in respect to the question whether the supply of services is predominant. In addition, further components have to be taken into account in each case such as in particular the interest of the parties as regards the remaining performances. It is true that it has been established in the present case that the price for the delivery of the steel is considerably higher than the price for the laying. This, however, does not suffice to decide whether the element relating to the sale was predominant in the present case—as can be seen from the aforementioned legal position. Nevertheless, it does not have to be decided whether the United Nations Convention on