## Facts

- A Dutch seller and a German buyer (a chemical-products trader) concluded contracts for the sale of cobalt sulfate.
- The buyer expected to receive high-quality cobalt sulfate of English origin, but that expectation was not expressly stated as a contractual requirement.
- The seller delivered cobalt sulfate of South African origin that the buyer regarded as lower quality than what it expected.
- The buyer treated the situation as the seller’s non-delivery of the expected chemicals and declared the contract avoided.
- The seller sued the buyer for payment of the full contract price.
- The German trial court and intermediate appellate court ruled for the seller.
- The buyer appealed to the Bundesgerichtshof (BGH, Federal Supreme Court).
- Because the parties’ places of business were in different Contracting States, the CISG governed the dispute.

## Issues

1. Under the CISG, does delivery of cobalt sulfate that differs from what the buyer expected (including origin/quality differences) amount to “non-delivery” allowing avoidance under Article 49(1)(b)?
2. If the case is treated as delivery of non-conforming goods, did the differences in origin and alleged quality constitute a fundamental breach under Article 25, allowing avoidance under Article 49(1)(a)?
3. What role do resaleability and the buyer’s proof of commercial consequences play in determining whether non-conformity is “fundamental” under Articles 25 and 49?

## Decision

- The BGH dismissed the buyer’s appeal and affirmed the judgment ordering the buyer to pay the contract price.
- Article 49(1)(b) did not apply because the seller had delivered goods; disputes about origin and quality are assessed as non-conformity, not as non-delivery.
- The buyer was not entitled to avoid the contract under Article 49(1)(a) because it did not establish a fundamental breach under Article 25.
- The court found decisive that the buyer failed to prove that the goods could not be used or resold in ordinary commercial channels in Germany or abroad, or that any deviations had effects so serious that the buyer’s performance interest essentially fell away.

## Legal Principles

- CISG interpretation is independent from domestic sales-law categories; whether a delivery would be labeled an “aliud” in domestic law does not control the CISG analysis.
- Delivery of goods that do not match the buyer’s asserted expectations is generally handled through the CISG’s non-conformity framework (especially Article 35) and its remedies, rather than by treating the case as “no delivery.”
- Avoidance under Article 49 is exceptional; for non-conformity, the buyer must meet the high threshold of Article 25 by showing substantial deprivation of what it was entitled to expect under the contract.
- In assessing fundamental breach for non-conforming goods, a central consideration is whether the buyer can still use or resell the goods through normal commercial channels; mere dissatisfaction with quality or origin is not enough.
- The buyer bears the burden of showing that the alleged non-conformity has consequences serious enough—such as practical unsaleability or comparable market blockage—to justify avoidance rather than price reduction or damages.

## Conclusion

The BGH held that the seller’s delivery of South African cobalt sulfate, even if contrary to the buyer’s expectation of English quality, was not “non-delivery” under the CISG and did not justify avoidance absent proof that the deviation fundamentally deprived the buyer of its contractual bargain, especially by making the goods unusable or unresaleable; the buyer therefore remained obliged to pay the purchase price.


German Cobalt Sulfate Case, VIII ZR 51/95, UNCITRAL CLOUT Case 171 (1996)