Non-conformity of the goods for which the seller is not liable

Abstract

Seller is liable for the conformity of delivered goods. However, there are cases where the seller's liability is excluded despite the lack of conformity of the goods. First, pursuant to Art. 478(3) of Serbian Law on Obligations an insignificant material defect of the goods should not be taken into account. In other words, minor difference in quantity or quality will not be taken into consideration where it is not material. In international trade, in principle, the seller is liable for minor defects of the goods. However, in practice seller's liability for immaterial lack of conformity will be excluded on the basis of relevant trade usages and previous bussines dealings of the parties. Second, it is commonly accepted in international and domestic trade, as concretization of the principle of good faith, that the seller is not liable for any lack of conformity of goods if at the time of conclusion of a contract the buyer knew or could not have been unaware of such lack of conformity. Seller's liability for the lack of conformity of the goods is excluded when the following requirements are fulfilled. The first requirement is that the buyer had positive knowledge of the defects or that he could not have been unaware of their existence. It is considered that the buyer could not have been unaware of the non-conformity if he acted with gross negligence. Furthermore, buyer's knowledge of the lack of conformity should exist at the time of conclusion of the contract. Finally, the exclusion of seller's liability is not possible when he acts in bad faith.

Keywords

• conformity of the goods
• seller's liability
• exclusion of liability
• contract of sale