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CISG CASE PRESENTATION

Germany 14 February 2001 Appellate Court Saarbrücken (Windows and doors case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/010214g1.html]

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

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Case identification

DATE OF DECISION: 20010214 (14 February 2001)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 1 U 324/99-59

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

CASE HISTORY: 1st instance LG Saarbrücken (7 III 0 87/97) 5 March 1999

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Windows and doors


Case abstract

GERMANY: Oberlandesgericht Saarbrücken 14 February 2001

Case law on UNCITRAL texts (CLOUT) abstract no. 446

Reproduced with permission of UNCITRAL

Abstract prepared by Rudolf Hennecke, National Correspondent

The decision by the Higher Regional Court of Saarbrücken deals with the application of the Convention to goods to be manufactured pursuant to article 3 and to the reasonable period of time for giving notice of a lack of conformity pursuant to article 39 CISG.

The seller, an Italian manufacturer of windows and doors, made several deliveries to the buyer, a German retailer. The seller sued the buyer for the balance due. The court of first instance, the District Court of Saarbrücken, found for the seller.

On appeal, the Higher Regional Court of Saarbrücken affirmed. The court noted that the contracts, which were for goods to be manufactured, would be subject to the CISG pursuant to article 3. The court stated that the buyer lost the right to rely on the non-conformity of the goods because they had been delivered in early 1995 and the buyer had only given notice of non-conformity in January 1998, beyond the two year cut-off point specified in article 39(2) CISG. In any case, citing Staudinger/Magnus, the court noted that notice of non-conformity had not been given within a reasonable period of time under article 39(1), which it stated was generally considered to be between two weeks and a month after discovery of the defects.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 3 ; 9 ; 39

Classification of issues using UNCITRAL classification code numbers:

3A [Goods to be manufactured within scope of Convention];

9B [Implied agreement on international usage];

39B [Requirement to notify seller of lack of conformity: cut-off period of two years]

Descriptors: Usages and practices ; Commercial letters of confirmation ; Lack of conformity notice, timeliness

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Editorial remarks

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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=721&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language: Click here for the original German text of this case; see also Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=721&step=FullText>; [2001] OLGR Saarbrücken 2001, 239; Internationales Handelsrecht (IHR) [2001] 64

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)

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Case text (English translation)

Queen Mary Case Translation Programme

Oberlandesgericht Saarbrücken 14 February 2001

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

Translation edited by Camilla Baasch Andersen [***]

FACTS OF THE CASE

The [seller], an Italian corporation, is a manufacturer of doors and windows. The [buyer] is a wholesale and retail trader and installer of windows, doors and winter gardens. The [seller] is bringing an action against the [buyer] for the payment of the remaining purchase price for windows and doors.

The Court of First Instance partly allowed the claim with respect to an amount of 6,141.71 DM [Deutsche Mark] of the requested DM 25,551.55. With its appeal, [seller] demands payment of a further DM 19,897.21. [Buyer] has lodged an appeal asking the Court to dismiss the entire claim.

REASONING OF THE COURT

While both the [seller]'s and the [buyer]'s appeals are admissible in form, the appeals are unjustified. The Court finds no fault in the decision handed down by the Court of First Instance.

A. The [seller]'s appeal is unfounded.

     I.  1. The [seller]'s complaint that the Court of First Instance should not have subtracted a discount of 10%, but only a discount of 7% with respect to invoices I.1.a) and II.2. is unjustified. The Court correctly used a discount of 10%, thereby reducing the claim by DM 90.07 and DM 335.28.

    a) The invoices in question concern the building project "Gergen". The discount of 10% is a "project discount" resulting from the [buyer]'s "project order" of 31 July 1995. This "project order" was confirmed by the [seller] by its letter of 9 January 1996 with a discount of 10%. The parties therefore formed a valid agreement on the discount.

     b) Witness Börner furthermore testified that a general agreement had been concluded with the [seller]'s employee Mayr on a discount of 10% on all orders, indiscriminate of the time of the performance. The [buyer] was therefore correct in reducing the price.

2. With respect to invoices I.1.b), 5., II.2., 7., 8., 9., 10.a), 11. and 12. (all of which concern the building project "Caritas Clinic Saarbrücken"), the [buyer] was entitled to a discount of 14% (12% + 2%) instead of 12%.

     a) The special discount of 14% (12% + 2% ) was noted in letters of confirmation sent by the [buyer] to the [seller] on 7 March 1996 and 8 May 1996. The [seller] did not voice any objection to these letters.

     b) It is an accepted trade usage that a tradesperson who receives a letter of confirmation has to object to the letter's content if the recipient does not wish to be bound by it. If the recipient does not object, the contract is binding with the content given to it in the letter of confirmation, unless the sender of the letter has either intentionally given an incorrect account of the negotiations, or the content of the letter deviates so far from the result of the negotiations that the sender could not reasonably assume the recipient's consent. The recipient's silence causes the contract to be modified or supplemented in accordance with the letter of confirmation. In the event that a contract had not yet been concluded, it is formed with the content of the confirmation (Palandt/Heinrichs, BGB [Bürgerliches Gesetzbuch, German Civil Code] 148 n. 8). As there is no indication that the [buyer] intentionally reported the results of the negotiations incorrectly or that it deviated from the content of the agreement, the [seller]'s silence resulted in the agreement of a special discount in the amount of 14%. This additional discount is irrespective of the volume of the order.

    II. [Seller]'s appeal is also without success as regards the other deductions made by the Court of First Instance.

1. With respect to the invoice II.1. concerning DM 4,918.79, the [seller] undisputedly credited the [buyer] an amount of DM 2,215.16. The Court of First Instance was therefore correct in reducing this claim to DM 2,703.63. In its appeal, the [seller] is requesting "the difference of DM 2,703.63". This is incorrect because it was in fact awarded the amount of DM 2,703.63. Obviously, [seller] refers to the credit in the amount of DM 2,215.16. However, since set-off takes precedence over the defense in 320 BGB [Bürgerliches Gesetzbuch, German Civil Code] (Medicus, Schuldrecht AT, 12th ed., n. 214 and 264), the latter is not available to [seller].

2. The claim for payment of DM 1,785.00, based on invoice II.4. is also unfounded. According to the credible testimony given by witness Börner, an identical order was placed twice with the [seller], because the [seller]'s employee by the name of Tetter had informed the [buyer] that the first order had been lost. The [seller]'s representative and the [buyer] agreed that the order was to be executed only once. In such a case of falsa demonstratio non nocet, the content of the contract is determined by the concurrent intent of the parties.

3. The [seller] is also not entitled to an amount of DM 6,296.00 as stated in invoice II.5. While the parties do not agree whether the [seller] actually gave a credit to the buyer with respect to the building project "Gondrom", it is undisputed that the [seller] did not comply with desired color changes in the windows that were delivered. The [seller]'s claim for payment fails due to breach of contract.

4. Finally, [seller]'s claim for payment resulting out of invoice II.10.b) in an amount of DM 1,280.47 is unjustified. According to the credible testimony given by witness Börner, the [buyer] had ordered unglazed windows. The windows delivered had not corresponded to the measurements given to the [seller]. Thus, the glass had to be ordered again from a third party. A reduction of the additional costs in the amount of DM 1,280.47 is admissible under 463 BGB [Bürgerliches Gesetzbuch, German Civil Code].

B. The [buyer]'s appeal is unfounded. The [buyer] does not possess a right of retention with respect to the folding shutters concerning project "Kommission Lauterbach". The absolute cut-off period for notices of non-conformity under Art. 39(2) CISG has expired.

1. Under Art. 3(1) CISG, contracts for the supply of goods to be manufactured or produced are explicitly considered sales contracts under the Convention. This includes contracts in which the [seller] is obligated to deliver future goods which have yet to be manufactured by it or a third party. The definition corresponds to contracts for work and materials under 651 BGB [Bürgerliches Gesetzbuch, German Civil Code], with the - in this case immaterial - exception that under Art. 3 CISG it is irrelevant whether the goods manufactured are fungible (Staudinger/Magnus, CISG, 1999, Art. 3, n. 13).

2. As the folding shutters were delivered in the beginning of 1995 and a notice of non-conformity was given only on 12 January 1998, the cut-off period of two years stipulated by Art. 39(2) CISG had already expired. In any event, the [buyer] did not give notice specifying the defect within reasonable time. According to general opinion, the time period considered reasonable under Art. 39(1) CISG ranges between two weeks and a month (Staudinger/Magnus, Art. 39 nn. 36f. and 49). In the present case, the parties had already been involved in litigation for at least a month when the notice of non-conformity was given. The [buyer] had therefore lost its remedies under the CISG due to the expiry of the cut-off period. The statute of limitations is irrelevant.

FOOTNOTES

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

** 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 September 21, 2006
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