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Israel 2 November 1988 Supreme Court (Adras Chmorey Binyan v. Harlow & Jones GmbH) [ULIS precedent]
[Cite as: http://cisgw3.law.pace.edu/cases/881102i5.html]

Primary source(s) of information for case presentation: Case commentaries

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Case identification

DATE OF DECISION: 19881102 (2 November 1988)


TRIBUNAL: Supreme Court

JUDGE(S): Majority: Barak, Bach & S. Levine JJ; Minority: Ben-Porat D.P. & D. Levine J.


CASE NAME: Adras Chmorey Binyan v. Harlow & Jones GmbH

CASE HISTORY: 1st decision of Supreme Court, CA 815/80 Harlow & Jones v. Adras Ltd. (1983) 37(1) P.D. 225 et seq. [see the CISG-Israel website at "http://www.biu.ac.il/law/cisg/harlowVsAdresEng.htm" for English abstract of the 1983 ruling] [the reported 1988 case is a new litigation that reversed the result of the 1983 ruling of the Supreme Court]

SELLER'S COUNTRY: Germany (defendant)

BUYER'S COUNTRY: Israel (plaintiff)


Case abstract

Adras Construction Co. Ltd. v. Harlow & Jones GmbH
Supreme Court of Israel 2 November 1988

Headnote (Arie Reich)

"Occasionally when a hearing in the Supreme Court has ended, a point of legal ambiguity that had been raised may be discussed in more depth in an additional hearing composed of greater number of judges. In Harlow V. Adres P.D. 37(4)225 an alternative argument of unjust enrichment was rejected by Justice Ben-Porat on the ground that the laws of unjust enrichment apply only when there is no contract. In the additional hearing this ruling was overturned.

"The Court ruled that although there was no entitlement to damages under the Hague Uniform Law of International Sales, (ULIS), Adres was entitled to restitution under the laws of unjust enrichment. Harlow had been enriched by the extra profit gained through breach of contract and therefore the court ruled that this profit belonged to Adres. The Court developed the precedent that the laws of unjust enrichment apply even when there is an established contract between two parties.

"It must be noted, as a critique of this decision, that resorting to domestic legal doctrines that are not recognized as general principles in ULIS is problematic, being inconsistent with the objective of ULIS to provide uniformity in international trade law. Turning to internal law when ULIS has already verified its position on the conditions under which the buyer can receive compensation, would seem to contradict the spirit and purpose of the 1964 Hague Convention." CISG-Israel website at "http://www.biu.ac.il/law/cisg/adresVsHarlowEng.htm"

Headnote (Peter Schlechtriem)

"The uniformity reached by the Convention would be in grave danger if . . . national provisions could be applied because the application leads to invalidity or avoidance of a contract and thereby could be brought under Art. 4(a). A similar problem is caused by concurring actions under domestic law. The same rule of priority of the Convention should apply if issues regulated by the Convention could lead to a remedy under domestic law which is inconsistent with the Convention. A good example is th[is] Israeli case. . .

"An Israeli buyer had bought steel from a German seller. The contract was improperly performed. The buyer, however, had lost his remedies under ULIS by lapse of time and lack of notice, and he had lost a litigation in which the courts up to the Israeli Supreme Court applied the Hague Uniform Sales Law. Then the [buyer] started a new litigation saying in nuce that the German seller, by not performing the contract and not being liable under ULIS, was unjustly enriched. The buyer succeeded in claiming benefits which the German party allegedly had derived from not performing the contract under unjust enrichment rules. In this instance, the rules of the Convention and its requirement for certain remedies were pushed aside by a restitutionary remedy under domestic law." Peter Schlechtriem, "Uniform Sales Law - The Experience with Uniform Sales Law in the Federal Republic of Germany", Juridisk Tidskrift (1991/92) 12-13 [citations omitted].

Additional details (Daniel Friedman)

"[The seller], a German corporation, contracted in 1973 to sell to the [buyer], an Israeli corporation, 7,000 tons iron c.i.f. Haifa at a price of 570 German Marks per ton. Because of the October (Yom Kippur) war there was a delay in delivery. But some 5,025 tons were shipped to the [buyer] between January and April 1974. On April 8, 1974 seller . . . notified the [buyer] that because of high storage costs, it had to sell the remaining quantity of iron. Three days later the [buyer] replied demanding the remaining 1,925 tons of iron. The [seller] did not comply and it was not disputed that about this quantity of iron was sold by the [seller] in Hamburg, to third parties, for 804.70 German Marks per ton f.o.b. In 1976 [buyer] sued for damages claiming in the alternative restitution of the [seller's] gains.

"In its first decision, the Supreme Court dismissed the claim . . . The decision was based upon the Hague Convention on the Uniform Law for the International Sale of Goods, 1964 (hereinafter [ULIS]) [which was the law of the contract] . . . The [buyer] failed to prove that it had suffered a loss as a result of the breach. An attempt to utilize Article 84 of [ULIS] was of no avail. Under this article if a contract is avoided, the party claiming damages may recover the difference between the contract price and the market price at the time of avoidance. However, the [seller's] statement of claim did not state that the contract had been avoided. The filing of the claim in 1976 was not regarded as avoidance of the contract for the purpose of [ULIS], and in any event, on this date the price of iron returned to its former level, so that no recovery could be had on this ground. The claim in restitution to recover the profits made by the [seller] in selling the iron to third parties was also dismissed on the ground that the 'law of unjust enrichment has always applied only where there is no contract between the parties'. The latter point became the subject of a further hearing in which the court, by a majority, reversed its original decision and held these profits to be recoverable. . . . [In his concurring opinion, Mr. Justice Barak] suggested that 'if a certain interest is protected under more than one branch of the law (e.g., contract and tort or contract, tort and restitution) there is no reason to deny their simultaneous application, subject to two qualifications: (1) that the plaintiff will not be unjustly enriched by the multiplicity of remedies; (2) that the granting of one remedy is not in conflict with the substantive law upon which the other remedy is predicated . . .' " Daniel Friedmann, "Restitution of Profits Gained by Party in Breach of Contract", 104 Law Quarterly Review (1988) 384-386 [citations omitted].

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Classification of issues present

APPLICATION OF CISG: No, this is a ULIS case that raises issues that can also arise under the CISG


Key CISG provisions at issue: Article 4

Classification of issues using UNCITRAL classification code numbers:

4A ; 4B [Issues covered and excluded]

Descriptors: Scope of Convention ; Unjust enrichment

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Editorial remarks

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Citations to case abstracts, texts, and commentaries


(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

German: Schlechtriem/Magnus, Internationale Rechtsprechung zu EKG und EAG (Baden-Baden: Nomos 1987) 459-452


Original language (Hebrew): 42(1) P.D. (1988) 221-285

Translation: Unavailable


English: Friedmann, 104 Law Quarterly Review (1988) 384-388; Case note, 24 Israel Law Review (1990) 150-155; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Intro. Art. 49 para. 27 Art. 76 para. 3; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005)

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Pace Law School Institute of International Commercial Law - Last updated June 26, 2006
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