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CISG CASE PRESENTATION

Germany 1 July 2002 Appellate Court München (Shoes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/020701g1.html]

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

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Case identification

DATE OF DECISION: 20020701 (1 July 2002)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 10 O 5423/01

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

CASE HISTORY: 1st instance LG München 20 February 2002 [affirmed]

SELLER'S COUNTRY: [-]

BUYER'S COUNTRY: [-]

GOODS INVOLVED: Shoes


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 39 ; 47 ; 49 ; 80 [Also cited: Articles 3(1) ; 40 ; 74 ; 76 ]

Classification of issues using UNCITRAL classification code numbers:

25B [Definition of fundamental breach];

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

47A [Buyer's right to fix additional period for performance];

49A [Buyer's right to avoid contract: grounds for avoidance];

80A [Failure of performance caused by other party (party causing non-performance): loss of rights]

Descriptors: Fundamental breach ; Nachfrist ; Avoidance ; Installment contracts ; Suspension of performance ; Lack of conformity notice, timeliness ; Failure of performance, other party

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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): cisg-online.ch website <http://www.cisg-online.ch/cisg/urteile/656.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.647, 700; 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); Pilar Perales, Case cited at n. 12 in Presentation on Nachfrist at September 2005 seminar in Singapore; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 356

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Case text (English translation)

Queen Mary Case Translation Programme

Court of Appeals (Oberlandesgericht) München

1 July 2002 [1 U 324/99-59]

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

Edited by Institut für ausländisches und Internationales
Privat- und Wirtshaftsrecht der Universität Heidelberg
Daniel Nagel, editor
[***]

In the name of the people

The 17th Civil Senate of the Court of Appeals München, following the oral proceedings of 1 July 2002, hands down the following

FINAL DECISION

I. The [buyer]'s appeal against the final decision of the District Court (Landgericht) München II from 20 February 2002 is dismissed.
II. The [buyer] bears the cost of the appellate proceedings.
III. The decision is provisionally enforceable.
The [buyer] may avert the enforcement of the decision by lodging security in the amount of 82,000.- Euro, unless the [seller] lodges security in the same amount before initiating the enforcement proceedings.
IV. The extent of the grievance exceeds 20,000.- Euro. Revision is not allowed.

FACTS OF THE CASE

The parties argue about the [buyer]'s obligation to pay for shoes and collection models delivered by the [seller] as well as the [buyer]'s set-off with claims for damages. The Appellate Court refers to the statement of facts of the final decision of the District Court [Landgericht] Munich II of 20 February 2002, pages 3 to 8. On page 7, paragraph 2, the account of [buyer]'s submission needs to be corrected to "227,614.- Deutsche Mark [DM]" instead of "727,614.- [DM]". With a brief that was received on 27 March 2002, the [buyer] lodged an appeal against this final decision, which had been served to it on 1 March 2002. [Buyer] substantiated its appeal in a brief received by the Court on 2 May 2002.

[Buyer] requests that the decision of the District Court München II of 20 February 2002 be repealed and that the claim be dismissed. [Seller] requests that the appeal be dismissed.

Regarding the submissions of both sides the Court refers to the briefs exchanged amongst the parties including the attachments, namely, the [buyer]'s brief of 2 May 2002 and 24 June 2002 as well as the [seller]'s briefs of 4 June 2002 and 1 July 2002.

REASONS FOR THE DECISION

I.   [Buyer]'s appeal is proper and admissible, but is not successful regarding its substance.

The appealed decision is a final decision of the District Court München II, which was handed down following the oral proceeding of 16 January 2002. According to the new version of 26 no. 5 EGZPO [*] the appellate proceedings consequently are subject to the Code on Civil Procedure in the version in force from 1 January 2002. For the Court of Appeals, the statement of facts given by the appealed decision of the District Court München II is decisive. The Appellate Court's entitlement to examine the decision is determined by the new version of 529, 531 ZPO [*]. There are neither specific signs casting doubt that the relevant findings of the decision might be incomplete or incorrect, nor have the parties submitted new facts which could be considered, nor were decisive means of attack or defense incorrectly rejected before the Court of First Instance.

II.  The Court refers in full extent to the correct findings in the appealed decision of the Court of First Instance under the ciphers 1. and III., pages 8 to 15 and 17 et. seq. of the final decision, with exception of the explanations regarding the maturity of the invoices, p. 13 of the decision.

III. The Court of First Instance did not make any mistakes in its application of the CISG.

     1. By virtue of Art. 3(1) CISG the provisions of the Convention govern the contractual relationship between the parties.

     2. The Court of First Instance correctly denied the existence of a single installment contract. There was definitely no contract between the parties with the content that the [seller] was successively obliged to always deliver the same shoes to the [buyer], as would be a prerequisite for a multiple contract. The [buyer] rather placed its orders with the [seller] on a case-by-case basis after approving the produced samples.

     3. The [buyer] was not entitled to declare the contract avoided with respect to the shoes not yet delivered without fixing an additional period of time for performance by the [seller]. Until the declaration of avoidance with letter of 30 March 2001, the [buyer] did not fix an additional period of time for the performance of the [seller] of the outstanding deliveries. According to Art. 49(1)(b) CISG, [buyer] would have been obliged to take such measures. While Art. 47(1) CISG is a may-do provision, it follows from the reference in Art. 49(2)(b) and also from Art. 47(2) sent. 1 CISG that the fixing of an additional period of time is an indispensable requirement for the buyer's exercise of remedies for breach of contract by the [seller], unless the seller has declared that it will not deliver under any circumstance (there is no such statement on the part of the [seller] in the present case). It furthermore follows from a comparison between Art. 49(1)(a) and Art. 49(1)(b) CISG that a non-delivery or a late delivery does not in itself constitute a fundamental breach of contract in the meaning of Art. 25 CISG. Otherwise, the provision in Art. 49(1)(b) CISG would not have been necessary and would not have been legislated. The [buyer] furthermore does not make any submissions regarding a time bargain.

     4. The Appellate Court finds - and insofar diverges from the legal view of the Court of First Instance - that the parties at least implicitly agreed upon a period allowed for payment of 10 days after the invoice date. All of the invoices in dispute contain a respective remark regarding the payment. The [buyer] did not make any submissions that it protested against this stipulation because of a possibly diverging arrangement. It is therefore irrelevant whether - as was alleged by the [buyer] - there exists a trade usage "60 days time period allowed for payment".

The [buyer]'s failure to pay the invoices therefore led to the [seller]'s discontinuation of the delivery, a fact that was also expressed in the [seller]'s letters to the [buyer] of 19 March 2001 and 23 March 2001. Because of the [buyer]'s non-payment, the [seller] was therefore entitled to stop the delivery.

     5. Regarding the invoices no. 156 and 132 the Court of First Instance correctly held that the [buyer]'s notices of lack of conformity of 15 May 2001 and 6 June 2001 were given too late, especially in view of the fact that the invoices are dated 6 November 2000 and 18 April 2001 respectively and that the goods concerned were the spring / summer collection 2001. Furthermore, the [seller] has made conclusive and convincing submissions that it delivered whole pairs, if only separated and to different recipients. It would have been upon the [buyer] to join the halved pairs. There are furthermore no indications whatsoever that the requirements of Art. 40 CISG are met.

     6. The [buyer] is not entitled to claim damages from the [seller].

a) Damages claims by the [buyer] are already excluded by virtue of Art. 80 CISG due to the [buyer]'s default of payment.

b) The [buyer] furthermore does not possess a damages claim under Art. 76 CISG, because - as was already shown - the [buyer] was not entitled to declare the contract avoided.

c) The [buyer] is also not entitled to claim damages under Art. 74 CISG, as it failed to submit a sufficiently substantiated loss. Despite a respective comment regarding this matter by the Court of First Instance within the reasons of the appealed decision, the [buyer] solely repeated its unspecified submissions from the first instance proceedings during the appellate proceedings. It would constitute an inadmissible exploration, if the Court chose to hear the testimony of the named witness X.

     7. It was not necessary to hear the four witnesses named by the [buyer] for the [seller]'s delivery commitment allegedly made on 15 March 2001 on the Düsseldorf [Germany] trade fair, because, as was already explained, the [buyer] was not entitled to declare the contract avoided without fixing an additional period of time for performance by the [seller].

IV. The decision on costs is based upon 97(1) ZPO [*], the decision on the provisional enforceability results from 708 no. 10, 711 sent. 1 ZPO. The value of the grievance had to be fixed following the new version of 26 no. 8 EGZPO [*]. The revision was not allowed as the prerequisites of 543(2) ZPO in its new version are not given.


FOOTNOTES

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

Translator's note on other abbreviations: EGZPO = Gesetz, betreffend die Einführung der Zivilprozessordnung [German Law regarding the Introduction of the Code on Civil Procedure]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].

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

*** Daniel Nagel has been a law student at Heidelberg University since October 2002 and an exchange student at Leeds University in 2004/2005.

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Pace Law School Institute of International Commercial Law - Last updated May 9, 2007
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