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CISG CASE PRESENTATION

Germany 13 November 2000 Appellate Court Köln (Plug-couplings case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/001113g1.html]

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

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Case identification

DATE OF DECISION: 20001113 (13 November 2000)

JURISDICTION: Germany

TRIBUNAL: OLG Köln [OLG = Oberlandesgericht = Provincial Court of Appeal]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 16 U 45/00

CASE NAME: German case citations do not identify parties to proceedings

CASE HISTORY: 1st instance LG Köln 25 January 2000 [affirmed]

SELLER'S COUNTRY: Italy

BUYER'S COUNTRY: Germany

GOODS INVOLVED: Plug-couplings


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 10 ; 38 ; 39 ; 78 [Also cited: Article 49(1) ]

Classification of issues using UNCITRAL classification code numbers:

10A [Relevant place of business];

38A [Buyer's obligation to examine goods];

39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

78B [Rate of interest]

Descriptors: Business, place of ; Examination of goods ; Lack of conformity notice, timeliness ; Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (German): Click here for the original German text of this case

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: 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); Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 1 para. 27 Art. 78 para. 27

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Case text (English translation)

Queen Mary Case Translation Programme

Oberlandesgericht Köln 13 November 2000

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

Translation edited by Camilla Baasch Andersen [***]

REASONING OF THE COURT

The [buyer]'s appeal is admissible in form, but unsuccessful.

The [seller] is entitled to payment of the purchase price in the amount of 30,000.00 DM [Deutsche Mark] under Art. 53 CISG.

1.  The Court does not need to decide whether German or Italian law is the law applicable to the contract. The claim arises out of a contract for the supply of goods to be manufactured between parties who have their places of business in different Contracting States to the United Nations Convention on Contracts for the International Sale of Goods (Art. 1(1)(a) CISG)). At the time of the conclusion of the contract, both Italy and Germany had ratified the Convention. The sale was an international transaction. According to the [seller]'s undisputed submission, witness S. - who negotiated with the [buyer] - was the [seller]'s commercial agent, not an independent merchant, and therefore was not the manager of a German place of business of the [seller]. Witness S.' place of business in Huerth [Germany] would be of relevance for the question whether the sale constituted a cross-border transaction only if [seller] itself had contracted with the [buyer], and if witness S. had not disclosed that he was acting in the name of the [seller] - such disclosure being necessary under both German and Italian law (cf. Schlechtriem/Ferrari, CISG, 3rd ed., Art. 1 nn. 41, 48). Witness S., however, did not possess the power to conclude a contract in the name of the [seller], a fact the [buyer] was aware of. While the [buyer] did negotiate with the [seller]'s agent, it faxed its order of 28 August 1998 directly to the [seller], who then declared its acceptance with the confirmation of order on 1 September 1998. That the [buyer] regarded the [seller] as its contractual partner is also shown by the fact that it led all further correspondence directly with the [seller] in Italy. [Buyer] furthermore had the goods - which were defective in its opinion - transported back to Milan [Italy], not to Huerth [Germany], to place them at the [seller]'s disposal.

2.  The [seller]'s claim for payment of the purchase price is in itself undisputed. The [buyer] cannot rely on any rights for the delivery of goods that did not conform to the contract.

      a. The [buyer]'s submission regarding the plug-couplings is not conclusive, both with respect to the alleged non-conformities and with respect to its duty to examine the goods and notify the [seller] of any lack of conformity. According to its submission, the defects were discovered at the end of May / beginning of June 1999, after the goods had been delivered to [buyer]'s customer. The delivery slips show, however, that [buyer] delivered the products in the period between 7 December 1998 and 8 March 1999. [Buyer] furthermore submits that the necessity to re-cut the thread only arose with respect to sleeves of the type PP3.F. 1313-11 and plugs of the type PP3.M. The list of items on stock per 4 June 1999, which the [buyer] places at the [seller]'s disposal as defective, does not contain a plug-connection of these two types.

      b. The Court moreover does not need to determine whether these parts as well as the other couplings, which were already delivered back to Milan, were defective and whether the lack of conformity constitutes a fundamental breach of contract in the meaning of Art. 49(1) CISG. The Court of First Instance correctly held that the [buyer] lost the right to rely on a lack of conformity of the goods because it failed to comply with its obligation to examine the goods and notify the seller of any lack of conformity as provided under Arts. 38 and 39 CISG.

The delivery consisted of numerous items, which possessed both a low purchase price and - as the [buyer]'s delivery slips to its customer show - a resale price of below 10 DM [Deutsche Mark]. The [buyer] was therefore obliged to perform spot examinations of the goods in order to ascertain whether they possessed the agreed quality. [Buyer] was not entitled to simply store them until resale. The fact that this might have precluded singular items from being resold as new - i.e., after a pressure test - was to be accepted by it because of the low purchase price. In view of the purchase of mass-produced articles for an overall amount of almost 100,000 DM it could reasonably be expected of the [buyer] to perform spot checks to examine the individual articles delivered - if necessary through a testing institute (see for the extent of the obligation to examine the goods, Schlechtriem/Schwenzer, Art. 39 n. 13 et seq.; Achilles, CISG, Art. 38 n. 5; Magnus, Der UN-Kaufrechtsprozess in Richterhandbuch, 2nd ed., n. 60 et seq.; Staudinger/Magnus, Art. 38 n. 30 et seq., each with further references).

There is nothing in the [buyer]'s submission to indicate that random spot checks would have required an unreasonable amount of time or expenditure. The [buyer]'s manager confirmed in the hearing that it would have been simple to test whether the plug-connections of BG3 fitted. Further examinations, such as pressure tests or checks of the grooving of singular articles, might have required paying the costs of checks by a testing institute. Only if the [buyer] had conformed with its duty to examine the goods would it have been entitled to rely on the lack of conformity, if its customers had subsequently noticed defective couplings. The Court of First Instance correctly held that merely storing the goods, unexamined, until they were transported off to its customers did not preserve [buyer]'s rights to rely on the lack of conformity. As the goods were delivered on 15 October and 20 November 1998, the [buyer]'s notices of lack of conformity on 11 May and 4 June 1999 were clearly given too late.

3.  Art. 78 CISG forms the basis of the claim for interest. According to the prevailing opinion, especially the consistent case law of the courts of appeal, the interest rate is to be determined under the supplementary national law (cf. Schlechtriem/Bacher, Art. 78 n. 27 et seq. with further references). Again, it is of no importance whether German or Italian law is applicable. The 5% requested by the [seller] can be based both on Art. 1284 Cc [Codice civile, Italian Commercial Code] and on 352 HGB [Handelsgesetzbuch, German Commercial Code].


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Italy is referred to as [seller]; the Defendant of Germany is referred to as [buyer]. Amounts in German currency (Deutsche Mark) are indicated as [DM].

** Ruth M. Janal, LL.M (UNSW), a PhD candidate at Albert-Ludwigs-Universität Freiburg, has been an active participant in the CISG online database of the University of Freiburg.

*** Camilla Baasch Andersen is a Lecturer in International Commercial Law at the Centre for Commercial Law Studies, Queen Mary, University of London, and a Fellow of the Institute of International Commercial Law of the Pace University School of Law. She is currently finishing her PhD thesis on uniformity of the CISG at the University of Copenhagen.

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Pace Law School Institute of International Commercial Law - Last updated December 7, 2006
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