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CISG CASE PRESENTATION

Austria 21 March 2000 Supreme Court (Wood case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/000321a3.html]

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

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Case identification

DATE OF DECISION: 20000321 (21 March 2000)

JURISDICTION: Austria

TRIBUNAL: Oberster Gerichtshof [Supreme Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 10 Ob 344/99g

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

CASE HISTORY: 1st instance HG Vienna (33 Cg 75/96w-50) 22 December 1998; 2d instance OLG Vienna (15 R 63/99s-57) 27 May 1999

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: Austria (defendant)

GOODS INVOLVED: Wood


Case abstract

AUSTRIA: Oberster Gerichtshof, 10 Ob 344/99g, 21 March 2000

Case law on UNCITRAL texts (CLOUT) abstract no. 425

Reproduced with permission from UNCITRAL

Abstract prepared by Sonja Niederberger

The German plaintiff (seller) sold wood to the Austrian defendant (buyer). The seller contended that the "Tegernseer Gebräuche" (regional trade usages) were applicable to the sales contract.

The court of first instance found that the "Tegernseer Gebräuche" are terms of contract commonly used for sales contracts on wood between German and Austrian parties and were thus applicable according to article 9(2) CISG.

Both the Court of Appeal and the Supreme Court confirmed this decision. The Supreme Court found that article 9 CISG is a provision on the applicability of a usage but not on its validity. While article 9(2) assumes that the parties wish to be bound by usages of international trade, under article 9(1) the usages the parties have agreed upon expressly or impliedly need not be international usages. In the sense of article 9(2) a usage is widely known and regularly observed when it is recognized by the majority of persons doing business in the same field. To be applicable such usages must be known or at least should have been known by the parties having their place of business in the area of the usages. The Supreme Court affirmed the findings of the court of first instance, noting that since the plaintiff in its acceptance of the order expressly stated the applicability of the "Tegernseer Gebräuche" and had delivered wood to the defendant before, the defendant must have known these usages.

The Supreme Court further stated that pursuant to article 39(1) C1SG the goods are presumed to be accepted if the buyer does not give notice of a lack of conformity within a reasonable period of time, specifying the nature of the lack of conformity; this rule does not only apply in cases where the goods are deficient but also where the seller delivers goods other than those ordered by the buyer.

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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 9(1) and (2) ; 39 [Also relevant: Articles 4 ; 6 ] [Also cited: Articles 40 ; 49 ; 50 ]

Classification of issues using UNCITRAL classification code numbers:

9D [Parties bound by applicable usages and practices; usages impliedly made applicable to provisions of contract];

39A11 [Requirement to notify seller of lack of conformity: degree of specificity required]

Descriptors: Usages and practices ; Lack of conformity notice, specificity

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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 10.

Usages and practices. "In [this] decision on the relationship of trade usages and CISG, the Austrian Supreme Court had the opportunity to decide on the merits of the case. [G]enuine domestic usages for the trade of timber, the 'Tegernsee Usages', were at stake. The Austrian Supreme Court held that these Bavarian usages prevailed over the provisions of CISG, since it had been established by the Court of First Instance that these usages were widely known to and regularly observed by parties in cross-border timber trade between Austria and Germany."

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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=478&step=Abstract>

French: Babusiaux, Recueil Dalloz (17 January 2002) No. 3, 320

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-Austria website <http://www.cisg.at/10_34499g.htm>; Österreichische Zeitschrift für Rechtsvergleichung (2000) 185-186; [February 2001] Internationales Handelsrecht (IHR): Zeitschrift für die wirtschaftsrechtliche Praxis 40-41; [2000] Zeitschrift für Rechtsvergleichung (ZfRV) 185; [2000] ecolex 306; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=478&step=FullText>

Translation (English): Text presented below

Translation (Portuguese): CISG Brazil database <http://www.cisg-brasil.net/downloads/casos/wood_case.pdf>

CITATIONS TO COMMENTS ON DECISION

English: Willibald Posch & Thomas Petz, 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 1-24, at 10 [English translation of German commentary cited below] [Go to these commentaries for an excellent comprehensive analysis of Austrian case law on the CISG]; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) §: 4-9 n.124; CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (this case and related cases cited in addendum to opinion); [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 42, 181; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 9 paras. 5, 6, 7, 10, 12, 14, 16, 19, 20 Art. 39 para. 16; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 122, 171; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 97

French: Babusiaux, Recueil Dalloz (17 January 2002) No. 3, 320-322

German: Willibald Posch & Ulfried Terlitza, Internationales Handelsrecht (2001) 47-56, at relevant page

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Case text (English translation)

Queen Mary Case Translation Programme

Supreme Court (Oberster Gerichtshof)

21 March 2000 [10 Ob 344/99g]

Translation [*] by Veit Konrad [**]

Edited by Jan Henning Berg [***]

[...]

JUDGMENT (BESCHLUSS)

Defendant [Buyer]'s appeal to the Supreme Court (außerordentliche Revision) does not meet the requirements of 502(1) of the Austrian Code of Civil Procedure (Zivilprozeßordnung; ZPO) and thus, following 508(2) of the Austrian Code of Civil Procedure, has to be dismissed.

Under 502(1) of the Austrian Code of Civil Procedure, an appeal to the Supreme Court is admissible only if the case depends on a point of law which is of vital importance in terms of the unity, certainty or development of jurisprudence. For instance, an appeal to the Supreme Court is to be admitted in case a decision of the Court of First Appeal diverged from the Supreme Court's established jurisprudence on a certain matter, or in case such a jurisprudence had not yet clearly been established by the Supreme Court.

[Buyer] brings its appeal arguing that its case depends on several substantial legal questions, amongst others questions concerning Arts. 39, 40, 49, 50 CISG, on which the Supreme Court has not yet established a clear jurisprudence. However, [Buyer]'s submissions cannot be sustained:

FACTUAL BACKGROUND

Plaintiff [Seller], seated in Germany, sold wood to Defendant [Buyer] whose domicile was in Austria. Both parties' places of business were thus in Contracting States to the CISG. According to Art 1(1) CISG, the case is governed by the Convention.

In a former judgment (Austrian Supreme Court (Oberster Gerichtshof), Judgment of 15 December 1998, 2 Ob 191/98x; see also comment of Karollus in JBl 1999 page 318), the Supreme Court stated that Austrian usages in wood trade, which fall among commercial customs under 346 of the Austrian Commercial Code (Handelsgesetzbuch; HGB), do not only apply if expressly or impliedly introduced by the parties into their trade contract. To the extent that they are being referred to by legal provisions, trade usages will be adopted as part of these legal provisions themselves. Thus, being a part of the governing law, they must be applied irrespective of whether agreed upon by the parties or not -- even in case they have been totally unknown to the parties.

According to Art. 4(a), the Convention, unless expressly provided otherwise, does not govern the validity of usages. The question of validity must be assessed under national law. In Art. 9 CISG, the Convention only governs the applicability of valid usages. Art. 9(1) CISG states that the parties to a contract are bound by any usage to which they have agreed and by any practices which they have established between themselves. According to Art. 9(2) CISG, the parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which they knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned. Yet, usages which are expressly or impliedly agreed upon by the parties (Art. 9(1) CISG) do not need to be widely applied in international trade. Art. 9(2) CISG generally assumes in terms of law that parties wish to be bound by usages of international trade, if they had or ought to have had knowledge of them. International trade usages are widely known and regularly observed in the sense Art. 9(2) CISG demands, when these are recognized by the majority of persons doing business in the same field. Additionally, in order to be applicable these usages must be known or ought to be known to parties which either have their place of business within the area of these usages, or which continuously do business in this area for a considerable period of time. Thus adopted, agreed usages, established practices and -- widely known and -- regularly observed usages prevail over any deviating CISG provisions. The question whether Austrian wood trade usages constitute commercial customs acknowledged by Austrian commercial law is a question of fact rather than of law, and therefore is not to be decided within appellate proceedings before the Supreme Court. The same applies to the question whether these trade usages could be considered to be widely known and regularly observed in international trade under Art. 9(2) CISG (see: Austrian Supreme Court (Oberster Gerichtshof), Judgment of 15 December 1998, 2 Ob 191/98x with further references).

The Court of First Instance followed [Seller]'s submission, which has not been disputed by [Buyer], that the "Tegernseer Gebräuche" are commercial customs for sales contracts on wood and fall under Art. 9(2) CISG. They were widely known and regularly observed in wood trade contracts between German and Austrian parties. As the parties had entered into business relations before and as [Seller] in his confirmation of [Buyer]'s order expressly assumed these usages to be applicable, the Court of First Instance's contention that [Buyer] ought to have known these usages does not result from a gross misinterpretation of the law.

As acknowledged customs, the "Tegernseer Gebräuche" take priority over other CISG provisions. The Court of First Appeal correctly found that 12 of the "Tegernseer Gebräuche" obliges the buyer to take the delivery and to give a written notice to the seller clearly specifying the lack of conformity of the delivered wood within fourteen days after he was or would have been able to examine the goods. Also, a gross misinterpretation of the law cannot be found in the Court's further assumption that [Buyer] had lost its right to rely on the lack of conformity, because [Buyer]'s notification to [Seller] -- only vaguely referring to "a lack of conformity with the agreed standards" -- had not been clear and specific enough to become relevant. Consequently the delivered goods must be presumed to have been accepted by [Buyer].

Under Art. 39(1) CISG, the buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it (see also: Austrian Supreme Court (Oberster Gerichtshof), Judgment of 15 December 1998, 2 Ob 191/98x). The burden of proof as concerns this duty to specific notification within a reasonable time is upon the buyer (see: Judgment of the Supreme Court 1 Ob 223/99x in: RdW 2000, page 20). It is not a relevant question of law whether a seller may have waived his rights to object under the principle of good faith by responding to a delayed and unspecified notice of lack of conformity (See Magnus in Honsell, Kommentar zum UN-Kaufrecht, Art. 39 note 35). This has to be decided taking account of the specific circumstances of the case and thus cannot be an issue in appellate proceedings before the Supreme Court.

Consequently, it is not necessary to elaborate on the extensive legal submissions in terms of the CISG as made by [Buyer]. In particular, an interpretation of Art. 40 CISG is of no relevance, which would only apply in the context of Art. 38, 39 CISG. The Court of First Appeal correctly held [Buyer]'s further submission that [Seller] did not deliver deficient goods, but rather delivered goods other than those ordered to be irrelevant because the duty of notification stated in Art. 39 CISG equally applied to both cases (see Karollus, UN-Kaufrecht page 105; Wilhelm, UN-Kaufrecht, pages 17 and 21). Equally, [Buyer] cannot rely on the right to declare the contract avoided (Art. 49 CISG) nor on the right to reduce the purchase price (Art. 50) as both provisions would require that [Buyer] had given specified notice of the lack of conformity within reasonable time (Schnyder/Straub in Honsell, ibidem, Art. 49, note 32; Posch in Schwimann, ABGB vol. 5, 1097, Art. 50 note 3).

[Buyer]'s further submissions can either not be upheld or, as far as they are sustainable, they do not concern important questions of law in the sense of 502(2) of the Austrian Code of Civil Procedure (Zivilprozeßordnung, ZPO) requires. Therefore, the appeal is not admissible.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Seller] and Defendant of Austria is referred to as [Buyer].

** Veit Konrad has studied law at Humboldt University, Berlin since 1999. During 2001-2002 he spent a year at Queen Mary College, University of London, as an Erasmus student.

*** Jan Henning Berg is a law student at the University of Osnabrück, Germany, who participated in the 13th Willem C. Vis Moot with the Osnabrück team. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis and the 4th Willem Vis (East) Moot.

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Pace Law School Institute of International Commercial Law - Last updated May 22, 2014
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