Browsing by Subject "CISG"

Solution-centric strategies and selling tailored solutions to customer-specific needs have become increasingly common in B2B trade. Customers are no longer interested in simply purchasing products, but instead wish to buy reliable and efficient solutions for their specific and potentially complex needs. Such needs can be the applicability of the goods to function efficiently within the existing operational environment or certain performance objectives such as to increase process efficiency. With the increasing importance of the non-physical features of products, the rules on seller’s responsibility to ensure the goods’ fitness for the buyer’s particular intended purpose (“fit for purpose responsibility”) have gained a more prominent role in assessing the conformity of the goods and seller’s defect liability. The purpose of this thesis is to firstly shed more light on what seller’s fit for purpose responsibility means in practice and how this can be applied to a seller that is characterized as an industrial solution provider. In this thesis the term industrial solution provider refers to an industrial manufacturing company that sells customized products and participates in the selection of the appropriate solution for its customers’ needs. Secondly, this thesis aims to assess the feasibility of the current legal framework on seller’s fit for purpose responsibility within the context of B2B trade. This thesis focuses on these questions within the context of the Finnish Sale of Goods Act (FSGA) and the CISG. The first part of this thesis, which examines the fit for purpose responsibility of an industrial solution provider, de-scribes first on a general level the two conditions for seller’s liability under 17(2)(2) § FSGA and Article 35(2)(b) CISG and then examines these within the context of a sales transaction between an industrial solution provider and a professional buyer. The main findings are that the fit for purpose responsibility of an industrial solution provider can be extensive, and it can be expected to go to great lengths to scrutinize and actively search for indications about the buyer’s needs. Moreover, due to its expert role, it is unlikely that it can rely on the defense that the buyer did not reasonably rely on its expertise. It also became apparent that seller’s fit for purpose responsibility is difficult foresee and very much dependent on a case-by-case analysis, and hence it is difficult to provide clear and definite conclusions on the fit for purpose responsibility of an industrial solution provider. The second part of this thesis, which examines the feasibility of the current legal framework on seller’s fit for purpose responsibility within the context of B2B trade, analyzes how well the current rules achieve the central objectives of contract law. The main findings from this analysis are that the current legal framework does not manage to fully achieve these central objectives, and it seems that it lacks a clear economic efficiency justification, whereas it is designed with consideration to an ill-founded idea of protecting the professional buyer. However, it can be questioned how well these rather theory-based findings correspond to reality, and whether these inefficiencies are as significant in practice. It can be concluded that seller’s fit for purpose responsibility presents an unforeseeable and potentially extensive risk to many sellers and especially those that manufacture and sell products for customer-specific needs, and it is important to be aware and adequately manage this risk. Moreover, there are several issues with the current rules on seller’s fit for purpose responsibility and this thesis can serve as a useful starting point for more research and more dialogue between legislators, practitioners and scholars on how the current legal framework serves professional sellers and buyers in today’s B2B trade.