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CISG CASE PRESENTATION

Austria 9 March 2000 Supreme Court (Roofing material case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/000309a3.html]

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

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Case identification

DATE OF DECISION: 20000309 (9 March 2000)

JURISDICTION: Austria

TRIBUNAL: Oberster Gerichtshof [Supreme Court]

JUDGE(S): Engelmaier, president; Huber, Prückner, Schenk, judges

CASE NUMBER/DOCKET NUMBER: 6 Ob 311/99z

CASE NAME: Austrian case citations do not generally identify parties to proceedings

CASE HISTORY: 1st instance HG Vienna (33 Cg 37/97h-18) 30 October 1998; 2d instance OLG Vienna (2 R 6/99p-23) 18 June 1999

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: Austria (defendant)

GOODS INVOLVED: Roofing material


Case abstract

AUSTRIA: Oberster Gerichtshof, 6 Ob 311 /99z, 9 March 2000

Case law on UNCITRAL texts (CLOUT) abstract no. 424

Reproduced with permission from UNCITRAL

Abstract prepared by Martin Adensamer, National Correspondent

The Austrian buyer ordered goods from the German seller. The buyer paid 28 Austrian shillings (ATS) per kg according to a general agreement while the seller sought 40 ATS per kg. The seller claims the unpaid balance of the price.

Because the seller had not accepted the buyer's order at 28 ATS but offered the goods for 40 ATS which the buyer subsequently accepted, the Supreme Court found that the contract was concluded on the basis of 40 ATS. The reply of the seller at the higher price was a counter-offer under article 19(1) CISG because it materially altered the terms of the buyer's order.

The Supreme Court rejected the buyer's argument that the contract had to be adapted to the conditions of the general agreement on the ground that the seller had acted in bad faith, knowing that the buyer urgently needed the material. The Court found that the buyer possibly could claim damages for the breach of the general agreement but had no right to an adaption of the actual contract. The Court also found that, as the buyer never declared the contract avoided, the buyer could not claim possible damages on the basis of article 75 CISG but should take into account that the contract remained valid. Since the buyer did not claim damages, it was irrelevant whether the seller knew of the buyer's urgent need of the goods.

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 7 ; 8(3) ; 11 ; 14 ; 19(1) ; 74 [Also cited: Articles 6 ; 45(1)(b) ; 49(2) ; 75 ; 77 ]

Classification of issues using UNCITRAL classification code numbers:

7C22 [Recourse to general principles on which Convention is based: full compensation];

8C [Interpretation in light of surrounding circumstances];

11A [Writing or other formality for conclusion of contract];

14A ; 14A1 [Criteria for an offer (basic criterion): intention to be bound in case of acceptance; Definiteness of key conditions];

19A [Reply to offer containing modifications: in general, constitutes rejection and counter-offer];

74A [Damages: general rules for measuring]

Descriptors: Offers ; Intent ; Formal requirements ; General principles ; Damages

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Editorial remarks

Excerpt from analysis of Austrian case law by Willibald Posch & Thomas Petz*

        * "Austrian Cases on the UN Convention on Contracts for the International Sale of Goods", 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 1-24, at 12, 22.

Offers ; Intent. "In [this] decision on Article 14 CISG, the Austrian Supreme Court resumed the arguments of its earlier cases in point and held that the decisive factor; for the interpretation of the offer, once the definiteness of an offer is established, is the offeror's intent which the offeree knew or could not have been unaware. Previous thereto, the Court had the opportunity to clarify that an offer could be accepted by no other party as the one to which it was addressed.60 In other words, an offer may only bind the offeror in respect of the offeree. The Court deduces this position from Articles 14 and 18 CISG and from general principles of contract law." [page 12]

        60. Austrian Supreme Court, 18 June 1997 [<http://cisgw3.law.pace.edu/cases/970618a3.html>].

Damages. "In its decision of 9 March 2000, the Austrian Supreme Court affirmed its decision of 6 February 1996 [<http://cisgw3.law.pace.edu/cases/960206a3.html>]. By doing so, the Court held with regard to damages under Article 74 CISG, that the Convention is based on the principle of full compensation, but only for cases in which, as a result of a breach of contractual obligations, a contract is declared void and where the methods of assessing damages are explicitly stated. In fact, guidance for finding the correct amount of compensation, either by a substitute transaction or by payment of the market price of a conforming good, is provided by Articles 75 and 76 CISG." [page 22]

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=474&step=Abstract>

German: [2000] Zeitschrift für Rechtsvergleichung (Germany) 152

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-Austria website <http://www.cisg.at/6_31199z.htm>; [2000] Österreichisches Recht der Wirtschaft (RdW) No. 379; [February 2001] Internationales Handelsrecht (IHR): Zeitschrift für die wirtschaftsrechtliche Praxis 39-40; [2000] Zeitschrift für Rechtsvergleichung (ZfRV) 152; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=474&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Willibald Posch & Thomas Petz, 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 1-24, at 12, 22 [English translation of German commentary in Internationales Handelsrecht cited below] [Go to these commentaries for an excellent comprehensive analysis of Austrian case law on the CISG]; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 7 para. 30 Art. 8 para. 60 Art. 74 paras. 2, 5

German: Willibald Posch & Ulfried Terlitza, Internationales Handelsrecht (2001) 47-56, at relevant pages; Posch, [2000] Zeitschrift für Rechtsvergleichung (ZfRV) 6; [2000] Recht der Wirtschaft (RdW) 79

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Case text (English translation)

Queen Mary Case Translation Programme

Austrian Supreme Court (Oberster Gerichtshof )

9 March 2000 [6 Ob 311/99z]

Translation [*] by Marko Maljevac [**]

Translation edited by Ruth M. Janal [***]

[…]

The Supreme Court as revision court, composed of the President of the Supreme Court Senate Mag. Engelmaier as the President, and Counsellors of the Supreme Court Dr. Schiemer, Dr. Huber, Dr. Prückner and Dr. Schenk as accompanying judges, in the matter of claimant [seller], represented by Graf, Maxl & Pitkowitz, attorneys in Vienna, versus the appellant [buyer], represented by Dr. Günter Niebauer and Dr. Karl Schaumüller, attorneys in Vienna, over 189,030.48 sA [Austrian schillings], has decided upon [buyer]'s request for revision of the judgment of the Court of Appeal (Oberlandesgericht) of Vienna dated 18 June 1999, GZ [*] R 6/99p-23, which had affirmed the judgment in favor of the [seller] handed down by the Commercial Court (Handelsgericht) of Vienna dated 30 October 1998, GZ 33 Cg 37/97h-18.

DECISION

[Buyer]'s request for revision of the judgment of the Court of Appeal is rejected.

The [buyer] is ordered to reimburse the [seller] the costs of the revision procedure in the amount of 9,900 sA [Austrian shillings] (including 1,650 sA Ust tax [*] in fourteen days.

REASONING

On 7 February 1995, [buyer] ordered roofing material from the [seller] for which the [seller] charged 40 sA per kilo. [Buyer] challenges [seller]'s claim for the remaining purchase price of 189,030.48 sA. [Buyer] alleges that the delivery was made under the framework agreement concluded between the parties in 1994 in which the price of 28 sA per kilo was stipulated. [Seller] opposes [buyer]'s allegation.

The Commercial Court [Court of First Instance] allowed [seller]'s claim for 189,030.48 sA; the Court of Appeal [Court of Second Instance] affirmed. The Court of Second Instance held that [buyer] was entitled to an appeal to the Supreme Court on points of law [“revision”], because case law regarding the duty to mitigate losses under the CISG is missing.

The request for revision filed by the [buyer] is denied.

      a) The lower courts correctly decided that the United Nations Convention on Contracts for the International sale of Goods (CISG), which entered into force in Austria on 1 January 1989 (BGBl [*] 1988/96) and in the Federal Republic of Germany on 1 January 1991 (BGBl 1990/303), is applicable to the contractual relationship between the parties. The legal relationship between the parties is based upon their contract for the sale of goods. The parties have their places of business in Austria and Germany respectively, that is, in different Contracting States (Art. 1(1)(a) CISG). They have not excluded the application of the Convention by contract (Art. 6 CISG). The CISG contains substantive law (1 Ob [*] 74/99k = RdW [*] 2000; 19 with further references; RIS-Justiz Rs0112333).

      b) According to Art. 14 CISG, a contract is concluded by concurrent statements of the parties' will, that is, by an offer and its acceptance. Under the CISG, a contract for the sale of goods does not have to be concluded in writing, nor do any other requirements regarding form exist (Art. 11 CISG). An offer is sufficiently definite if it indicates the goods, quantity and price (SZ [*] 67/197). The offer is to be interpreted according to the offeror's intention as perceived by the offeree (10 Ob 518/95 = SZ 69/26 = RdW 1996, 203 = ZfRV [*] 1996, 248 mwN).

The Court of First Instance determined (a finding that was not contested by the parties during the appeal proceedings) that the [seller] refused to consider the buyer's order of 7 February 1995, made under the heading “request for delivery under framework agreement”, as falling under the framework agreement. Out of generosity, the [seller] let the framework agreement have an influence on the cost of the tools, but apart from that, it was only willing to accept the order at the price of 40 sA per kilo.

According to Art. 19 CISG, [seller]'s offer of 40 sA per kilo was a counter-offer because it contained "relevant modifications" regarding the price as compared to [buyer]'s offer of 28 sA per kilo. By [buyer]'s fax dated 2 March 1995 and in [buyer]'s letter dated 9 March 1995, [buyer], the original offeror, accepted the [seller]'s counter-offer without reservations. Issues to be dealt with under Art. 8(3) CISG do not arise in that situation. Insofar as the [buyer's appeal] is based on the claim that the order was concluded according to the framework agreement of 1994, it diverges from the findings of fact made by the Court of First Instance. Those findings bind the Supreme Court; the [buyer]'s specific complaint is therefore not in accordance with the law and warrants no attention.

      c) As in the previous proceedings, the [buyer] submits that the [seller]'s refusal to accept the offer of 7 February 1995 under the conditions set out by the framework agreement, but only at a higher price, constituted a breach of contract and was unconscionable. The [buyer] needed the goods in order to fulfil in due time one of [buyer]'s large contracts. Faced with this dilemma, the [buyer] was forced to confirm the price of 40sA, which the seller had requested contrary to their previous agreement, so that [buyer] would receive the goods at all.

Even if one supposes that the behavior of the [seller] was contrary to contract, the [buyer] would only be entitled to demand reimbursement of damages according to Art. 45(1)(b) CISG for breach of the framework agreement, but not an adjustment of the conditions of the sales contract of 7 February 1995. Failing an agreement to the contrary, Art. 45(1)(b) CISG excludes the application of national provisions for damages (Posch in Schwimann, Art. 45 CISG Rz [*] 8).

The question whether the [buyer], by placing its order with the [seller], fulfilled its obligation to mitigate the losses according to Art. 77 CISG [Translator's note: The Court refers to possible damages for breach of the framework agreement, an issue that the Court states] does not have to be addressed because the [buyer] did not request specific damages during the proceedings, neither by way of set-off nor as a counterclaim.

      d) The term "Skonto" refers to discount for cash, that is, a discount of a certain percentage of the price in case of immediate fulfilment of the obligation, which is granted for cash payment within a certain period of time (1 Ob 58/98f = JBl [*] 1999, 802). For the supplier or person performing work, the advantage of allowing the "Skonto" is in the fact that the contract of sale or contract for performing work is performed faster and without notifications and warnings. Due to this underlying purpose, it is generally assumed that the supplier or person undertaking to perform a work will only grant a “Sconto” if the entire purchase price or compensation is paid within the period provided for. The entire transaction must therefore be performed within the period of time stipulated for the grant of the “Skonto”, without the supplier being forced to take further steps to ensure its (entire) contractually agreed compensation, such as further requests for payment, or even steps initiating legal proceedings (SZ 62/169 = JBl 1990, 248 [Rebhahn]; 7 Ob 577/95; JBl 1999, 802 ua; RIS-Justiz RS0018147). The buyer or person ordering a work cannot reasonably understand the term “Skonto” any differently.  The above-mentioned requirements were obviously not met by the [buyer]. As a consequence, the question whether the [buyer] made satisfactory submissions before the lower court, is irrelevant.

[Buyer]'s appeal is rejected because of the lack of important legal questions, according to § 502 (1) ZPO.[*]

The decision on costs is based upon §§ 41 and 50 ZPO. The [seller] expressly pointed out that the [buyer]'s appeal was not admissible.  


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the German Plaintiff-Respondent is referred to as [seller], the Austrian Defendant-Appellant as [buyer]. Monetary amounts in Austrian schillings are indicated as [sA].

Translator's note on abbreviations: BGBl = Bundesgesetzblatt [Federal Official Journal]; GZ = Geschäftszahl [Official Number]; JBl = Juristische Blätter [Legal periodical]; Ob = Docket designation for a Supreme Court ruling; RdW = Österreichisches Recht der Wirtschaft [Legal periodical]; Rz = Österreichische Richterzeitung [Legal periodical]; SZ = Enstscheidungen des österreichischen Obersten Gerichtshofs in Zivilsachen [Decisions of the Austrian Supreme Court in civil matters]; Ust = Unternehmer Steuer [Tax applicable to undertakings]; ZfrW = Zeitschrift für Wirtschaftsrecht [Legal periodical]; ZPO = Zivilprozessordnung [Civil Procedure Code].

** Marko Maljevac is a Research Assistant at the Law Faculty, University of Rijeka.

*** Ruth M. Janal, LL.M. (UNSW) is a Phd candidate at Albert-Ludwigs-Universität Freiburg.

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Pace Law School Institute of International Commercial Law - Last updated September 15, 2006
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