CISG CASE PRESENTATION

In 2002, the Court in Brown & Root Services Corp v Aerotech Herman Nelson Inc considered the application of the CISG to a contract for the sale of goods. In this case, Aerotech, a Canadian company, contracted with Brown & Root, an American company, to provide logistical support for the United States military in the Hungary and Bosnia region during "Operation Joint Endeavour" by providing heaters for military tents. Brown & Root alleged that most of the heaters that arrived were faulty and were not in working order. Consequently, Brown & Root brought an action against Aerotech alleging that they had fraudulently misrepresented to them that the heaters would be new, and furthermore, materially misrepresented the nature of the heating equipment and their ability to supply technicians to ensure proper installation. Aerotech counterclaimed for losses it allegedly incurred for the sale of the goods.

The court held that Aerotech was in breach of its agreement with Brown & Root to provide new heaters as specified in the terms and conditions agreed to by the parties. Brown & Root was awarded CAN $1.6 million in compensatory damages and CAN $50,000 in punitive damages. Aerotech argued pursuant to articles 38 and 49 of the CISG that Brown & Root had taken too long to assert a claim of fundamental breach or to repudiate the contract. However, McKelvey J found that Brown & Root repudiated the contract within a reasonable time. Presumably, the Court was of the view that the time from delivery of the goods (22 December 1995) to the time when Brown & Root's legal department formally notified Aerotech of non-performance (6 March 1996) was "within a reasonable amount of time" in accordance with article 49(2)(b) of the CISG. Once again, as in the previous Canadian cases dealing with the CISG, the Court was remarkably silent on the applicability of the CISG provisions and did not provide any meaningful commentary on how it was applying the provisions of the CISG and why. However, total blame cannot be laid at the feet of the Court as it was not clear to what extent counsel provided detailed submissions on the application of the CISG in its pleadings.