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CISG CASE PRESENTATION

Germany 20 September 2002 District Court Göttingen (Mattresses and bedding accessories case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/020920g1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20020920 (20 September 2002)

JURISDICTION: Germany

TRIBUNAL: LG Göttingen [LG = Landgericht = District Court]

JUDGE(S): Pape (presiding judge); Krohn and Behrens (commercial judges)

CASE NUMBER/DOCKET NUMBER: 7 O 43/01

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

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: Netherlands (defendant)

GOODS INVOLVED: Mattresses and bedding accessories


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 78 [Also cited: Articles: 53 ; 57 ; 61(1)(b) ; 63(1) ]

Classification of issues using UNCITRAL classification code numbers:

74A11 [General rules for measuring damages (computation): proof of damages];

78A [Interest on delay in receiving price or any other sum in arrears]

Descriptors: Damages ; Proof of damages ; 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): cisg-online.ch website <http://www.cisg-online.ch/cisg/urteile/655.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: 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]

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Göttingen
20 September 2002 [7 O 43/01]

Translation [*] by Stefan Kuhm [**]

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

Following the oral hearing of 23 August 2002, the 7th Chamber for Commercial Matters of the District Court (Landgericht) Göttingen, Presiding Judge Pape and the Commercial Judges Krohn and Behrens, hands down the following

DECISION

1. The default judgment of 7 December 2001 is upheld to the extent that the [buyer] is directed to pay the [seller]:

a)  the principal amount of EUR 229,471.65 and
b)  accrued interest of 5% above the Base Interest Rate [*] pursuant to Sec. 1
      DÜG [*] calculated on the amounts as follows:

-     on the partial claim of EUR 1,063.43 since 22 February 2001;
-     on the partial claim of EUR 15,019.80 since 3 March 2001;
-     on the partial claim of EUR 15.902,70 since 5 March 2001;
-     on the partial claim of EUR 33,686.65 since 9 March 2001;
-     on the partial claim of EUR 15,216.00 since 10 March 2001;
-     on the partial claim of EUR 18,651.95 since 16 March 2001;
-     on the partial claim of EUR 13,743.80 since 23 March 2001;
-     on the partial claim of EUR 5,475.88 since 24 March 2001;
-     on the partial claim of EUR 8,961.42 since 1 April 2001;
-     on the partial claim of EUR 1,239.20 since 13 April 2001;
-     on the partial claim of EUR 14,725.50 since 16 April 2001;
-     on the partial claim of EUR 4,081.00 since 21 April 2001;
-     on the partial claim of EUR 6,676.25 since 5 May 2001;
-     on the partial claim of EUR 15,446.75 since 2 June 2001;
-     on the partial claim of EUR 15,339 since 3 June 2001;
-     on the partial claim of EUR 10,094.16 since 7 June 2001;
-     on the partial claim of EUR 490.84 since 10 June 2001;
-     on the partial claim of EUR 4,799.10 since 14 June 2001;
-     on the partial claim of EUR 14,648.20 since 25 June 2001;
-     on the partial claim of EUR 5,931.08 since 29 June 2001; and
-     on the partial claim of EUR 8,250 since 6 February 2002.

2. The default judgment of 7 December 2001 is reversed in all other respects and insofar the claim is dismissed.

3. The [buyer] bears primarily all costs incurred due its contumacy. In all other respects, the costs of this legal proceedings shall be borne 34% by the [seller] and 66% by the [buyer].

4. Claims by the [seller] under this judgment are preliminarily enforceable against the deposit of an amount equalling 110% of the amount to be enforced. Enforcement proceedings under the previous default judgment may only proceed against the aforementioned security deposit. Claims by the [buyer] as to the costs under this judgment are preliminarily enforceable against the deposit of an amount equalling 110% of the amount to be enforced.

FACTS OF THE CASE

The [seller]'s action is for payment of the purchase price under a sales contract.

[Summary of the undisputed facts]

The [seller] manufactures mattresses and other bedding accessories. [Seller] has maintained business relationships with the [buyer], which has its place of business in the Netherlands. For goods delivered since January 2001, [seller] issued 36 invoices in an overall amount of EUR 346,258.08. [Buyer] ordered these goods from the [seller] partially by fax and part by telephone. [Seller] delivered the goods that [buyer] ordered - in part directly to the [buyer], and in part to [buyer]'s customers in the Netherlands. Every delivery was followed by a delivery note that contained the following statement at the bottom line of its front page:

"Place of performance and place of jurisdiction shall be Northeim [Germany]."

The respective recipients signed all of the delivery notes. The [seller] did not deliver the goods indicated in invoice No. 36 to the [buyer]. [Buyer] cancelled and objected to the delivery of those goods due to grounds that are still in dispute between the parties.

The [seller] arranged to have 350 of the slatted frames originally ordered by the [buyer] re-sold to another Dutch company at the same purchase price agreed with the [buyer]. The [seller] disassembled the remainder of the slatted frames and recycled these parts to mitigate the damages incurred. [Seller] incurred pecuniary damages of EUR 11 per unsold slatted frame.

[The Court's jurisdiction: seller's position]

[Seller] contends that the District Court of Göttingen had jurisdiction and power to hear these legal proceedings, because the parties have entered into a valid and binding agreement about the competent jurisdiction. In any event, the Court ought to be regarded as competent because the place of performance in Northeim is within the Court's district. The place of performance of the obligation to pay the purchase price is the place of [seller]'s place of business, that is, Northeim [Germany].

[Seller's pleadings and submissions]

[Seller] further submits that, in February 2001, it had to increase the price for the slatted frames mentioned in invoice No. 36. The [buyer]'s managing director at the time agreed to such an increase in the purchase price. However, before the delivery period expired, the [buyer]'s new managing director announced that it was no longer interested in the goods, that it "no longer got his money's worth", that it had stocked up elsewhere and did not want to receive these goods any more since it could not see the opportunity to reach at least the vital cost break-even point. This new managing director gave this notice before the actual delivery of the slatted frames mentioned in invoice No. 36. [Buyer] added that it was better off because it had already bought the same goods at a better price from another supplier. At the time of this notification, [seller] had already prepared and arranged the goods to be delivered. [Seller] did not accept this cancellation and termination of the delivery. It is [seller]'s position that [seller] can claim damages due to non-performance of the sales contract, that [seller] suffered pecuniary damages of EUR 11 per slatted and undelivered frame and that the [buyer] has been in arrears with regard to the acceptance of the goods since March 2001.

[Seller] further alleges that all of the goods delivered were in compliance with the provisions of the sales contract and were not defective. On 7 December 2001, the Court handed down a default judgment and directed the [buyer] to pay [seller] EUR 346,258.08 plus accrued interest of 5% above the Base Interest Rate [*] calculated on each of [seller]'s partial claims. During the hearing of 8 March 2002, after [buyer] had objected to the default judgment, [seller] partially reduced its claim in an amount of EUR 111,558.93.

In the light of the amendments to its claim, the [seller] asks the Court:

(i)  to uphold the default judgment; and
(ii)  to direct the [buyer] to pay [seller] the principal amount of EUR 234,699.15
       and default interest of 9.26% calculated on the amounts as follows:

-     on a partial amount of EUR 8,386.36 since 22 February 2001;
-     on a partial amount of EUR 15,019.80 since 3 March 2001;
-     on a partial amount of EUR 15,902.70 since 5 March 2001;
-     on a partial amount of EUR 33,686.65 since 9 March 2001;
-     on a partial amount of EUR 15,216.00 since 10 March 2001;
-     on a partial amount of EUR 18,651.95 since 16 March 2001;
-     on a partial amount of EUR 1,330.00 since 22 March 2001;
-     on a partial amount of EUR 13,743.80 since 23 March 2001;
-     on a partial amount of EUR 5,475.88 since 24 March 2001;
-     on a partial amount of EUR 1,610.00 since 29 March 2001;
-     on a partial amount of EUR 8,961.42 since 1 April 2001;
-     on a partial amount of EUR 1,239.20 since 13 April 2001;
-     on a partial amount of EUR 14,725.50 since 16 April 2001;
-     on a partial amount of EUR 6,368.50 since 21 April 2001;
-     on a partial amount of EUR 6,676.25 since 5 May 2001;
-     on a partial amount of EUR 15,446.75 since 2 June 2001;
-     on a partial amount of EUR 15,339.00 since 3 June 2001;
-     on a partial amount of EUR 10,094.16 since 7 June 2001;
-     on a partial amount of EUR 490.84 since 10 June 2001;
-     on a partial amount of EUR 4,799.10 since 14 June 2001;
-     on a partial amount of EUR 14,648.20 since 25 June 2001;
-     on a partial amount of EUR 5,931.08 since 29 June 2001; and
-     on a partial amount of EUR 112,486 since 5 August 2001.

[Buyer's pleading and submissions]

The [buyer] asks the Court to quash and resolve the default judgment of 9 December 2001 and to dismiss the [seller]'s claim.

[Reprimand of lack of jurisdiction]

[Buyer] objects to the international jurisdiction of the Court to hear [seller]'s action. [Buyer] argues that a Dutch court should hear this lawsuit instead.

[Alleged declaration of avoidance of the parties' sales contract]

Furthermore, [buyer] submits that the delivery charged with invoice No. 36 was cancelled because the delivery time was exceeded and because of the [seller]'s previous delivery of non-conforming goods. Therefore, the [seller] is not entitled to damages with regard to the non-payment of the goods set out in invoice No. 36. All other goods delivered lacked compliance and were very defective.

[Contended credits in favor of the buyer]

In addition, [buyer] alleges that [seller] did not appreciate and recognize several credits [seller] was obliged to grant to the [buyer] in amounts of EUR 7,884.95 and EUR 3,611.42 following the inquiry of 21 May 2001.

[Buyer's claim for damages as to certain identified defective goods]

Further, [buyer] is entitled to damages of EUR 12,783.72 due to identified and defective goods. The attorneys acting for the parties at the time had entered into an out-of-court settlement. Particularly, [seller]'s Dutch attorney confirmed this extra judicial settlement in its note of 28 June 2001.

[Buyer's general claim for damages as to defective goods]

[Buyer] is also entitled to claim damages in an additional amount of EUR 141,116.56, i.e., DM 276,000, due to defects of the goods and their lack of compliance.

- Defect of the yokes of the slatted frames]

When [buyer] sought to adjust the spring frame, the yokes or respectively other connections of the slatted frames broke into thousands of pieces. In particular, the slip covers, or plumeau cases of the mattresses, which were supposed to safeguard them, were of inferior quality; often the elastic spring frames could not be returned to the original position after they had been adjusted; the entire mattress folded up when the leg part was jacked up; further, the elastic spring frame was difficult to handle. The [buyer] therefore had to replace products, in part by more expensive ones. This also entailed transport costs and additional staff costs for the handling of complaints.

- Reduction of seller's claim by a further amount]

[Buyer] asks the Court further to reduce [seller]'s claim in an amount of EUR 32,150.07, since [buyer] had a claim against a Mr. ___. [Buyer] asserts that the parties involved in this legal proceedings and Mr. ___ agreed to the assumption of Mr. ___'s debt by the [seller]. They further concluded that [buyer] should concurrently set-off this debt against its debts to the [seller].

- Claims under invoices No. 8, 12 and 18 not against buyer]

Additionally, all claims based on invoices No. 8, 12 and 18 were unfounded. Those goods were undisputedly ordered by Company ___. Consequently, [seller] has to commence a legal action against that company rather than against the [buyer]. It is illegitimate to have [Buyer] sued in this respect.

- Claim for damages based on violation of buyer's trademark and patents]

Finally, the [buyer] submits that [buyer] is entitled to damages because of a trademark infringement committed by [seller]. It is undisputed that the [seller] had applied the [buyer]'s logo to the slatted frames destined for delivery of invoice No. 36 which had not been executed and, without [buyer]'s assent, [seller] resold those slatted frames to third Company ___. [Buyer] possesses the exclusive right to apply this logo to its own products. For this reason, [seller] is liable to pay damages to [buyer]; [seller] is liable to pay to the [buyer] its entire profit due to this violation of the [buyer]'s brand. If [buyer] had sold those slatted frames, it would have received a profit of at least DGL [Dutch Gulden] 50 per slatted frame, i.e., overall DGL 55,000. Furthermore, [buyer] might have suffered damages in respect of its reputation and good will due to customers' complaints. This kind of damages should be quantified at a minimum of DGL 20 per slatted frame, i.e., overall DGL 22,000 and thus EUR 34,941.08 altogether.

The [buyer] sets off its claim for damages as mentioned above (EUR 141,116.56) against [seller]'s claim.

[Additional returns of goods due to their defects]

In its brief of 6 August 2002, [buyer] submits that, during the course of these legal proceedings, several customers complained about the lack of compliance of the goods sold and their bad quality and had additional slatted mattresses returned. Altogether these goods had borne a value of EUR 54,015.99

[Reduction of seller's claim due to delivery to seller's own customer]

[Buyer] asks the Court to reduce the [seller]'s claim in an additional amount of EUR 5,159.71. Company ___, a marketer of beds and [seller]'s as well as [buyer]'s customer, ordered 38 electric "Duo deluxe" [beds]. [Seller] delivered these beds directly to that customer. Nonetheless, the [seller] invoiced the [buyer] for the frames.

[Reduction due to complaints of lack of compliance by another company]

[Seller] then delivered directly some slatted frames to one of [buyer]'s customers, namely Company ___. Since those goods were defective and lacked compliance, this customer refused to accept the delivery of these slatted frames. This customer additionally requested the [seller] to fetch them and take them back. Notwithstanding, [seller] invoiced [buyer] in respect of those goods in an amount of EUR 11,429.29. [Seller]'s claim should be reduced in this amount too.

[Right of retention]

Further, in a meeting on 20 December 2002, [seller] and [buyer] confirmed that [seller] would credit the [buyer]'s account with EUR 5,329.75 and EUR 11,919.90 due to lack of compliance and defects of goods. Since [seller] has not granted these credits thus far, [buyer] has a right of retention.

[Buyer's final allegations concerning damages incurred]

All of the customers' complaints and returns amounting to an aggregate amount of EUR 71,436.76 caused a loss of [buyer]'s profit of EUR 47,148.26. Furthermore, the [buyer] also suffered damages by virtue of a "misled market" in an amount of at least EUR 20,000. Because of the delivery of defective goods, additional costs were incurred in an amount of EUR 11,429.88 due to replacements of the goods, stockpiling, transport and additional working hours. [Buyer] was even obliged to grant its customers discounts causing further damages of altogether EUR 6,242.04.

[References made and evidence taken by the Court]

The Court took evidence through a hearing of witnesses L and TF. The Court refers as to the result of this hearing to the minutes of the Court's hearing on 23 August 2002.

HOLDING OF THE COURT

[Seller]'s claim is predominantly justified with respect to the amount still claimed. [Seller] is entitled to payment of EUR 229,471.65. Insofar the Court upholds the default judgment of 7 December 2001.

REASONS FOR THE DECISION

I. [Decision on jurisdiction]

The District Court of Göttingen has jurisdiction to hear these legal proceedings, even though the parties have not agreed to an express, valid and binding jurisdiction clause pursuant to Art. 17 No. 1 of the Brussels Convention [*]. As to the particularities of the reasons why the parties have not agreed to such a specific provision, the Court refers to the Court's decision held on 25 January 2002 (see p. 3 - 5 of that decision).

German courts have jurisdiction and thus the District Court of Göttingen under Art. 5 No. 1 Brussels Convention [*].

- Definition of the place of performance for payment obligations]

Any person who has its place of residence within the territory of a Contracting State may be sued at the courts of another Contracting State situated at the place of performance under the relevant contract between the parties involved. The relevant place of performance is that which encompasses the specific obligation in dispute and claimed in the legal action [see Zäller/Geimer [*], Schedule 1 Art. 5 Brussels Convention [*], Note 2). The place of performance of the obligation to pay the purchase price is neither the [buyer]'s seat or its establishment in the Netherlands but rather Northeim [Germany], which is where the [seller] has its place of business. The Court concludes this from Art. 57(1)(a) CISG.

- Application of the CISG]

The CISG is applicable because Germany as well as the Netherlands have already implemented and set into force the CISG. According to Art. 57(1)(a) CISG, the buyer is obliged to pay the purchase price at the seller's place of business, unless the parties provided otherwise. The parties have not provided for a specific provision on the place of performing [buyer]'s payment obligation under their sales contract. Further, payment of the purchase price was not to be effected concurrently with provision of the goods (Art. 57(1)(b) CISG). Hence, [seller] delivered the goods and invoiced those goods only thereafter. Since place of performance concerning payment of the purchase price is Northeim [Germany], the District Court of Göttingen [Germany] has jurisdiction to hear these proceedings.

II. [Seller's claims for payment]

[Seller] can establish a claim against [buyer] for payment of EUR 221,221.65 pursuant to Art. 53 CISG and of EUR 8,250 in damages pursuant to Art. 61(1)(b) CISG. [Buyer] owes to the [seller] payment in an overall amount of EUR 221,221.65 set out in [seller]'s invoices No. 1 to 7, 9 to 11, 13 to 17, 19 to 35 and submitted to the Court in its statement of claim.

[Partial dismissal due to lack of buyer's capacity as the proper defendant]

[Seller]'s claim for payment of the amounts set out in invoices No. 8, 12 and 18 of its statement of claim is, however, not founded. This claim amounted to EUR 1,330, EUR 1,610 and EUR 2,287.50 -- overall amount of EUR 5,227.50 --. [Buyer] is not the proper defendant concerning these claims. It is undisputed between the parties, that the underlying goods were ordered by Company ___ rather than by the [buyer]. [Seller]'s submission that both companies are identical cannot suffice to substantiate its claim. Although the Court notified [seller] about its concerns over the substantiation of its claim in this respect during the hearing of 8 March 2002, [seller] did not bring forward more details and evidence about the circumstances why [buyer] should be liable for Company ___'s orders. Hereby [seller]'s submissions in its statement of 22 August 2001 are not satisfactory as well. To the extent that [seller] asserts the establishment of a common and joint current account for all of Mr. J's orders, these allegations and submissions are in this form too undefined, incomprehensive and not considerable. Therefore, [buyer]'s objection to these claims cannot be deemed an abuse of its rights or vexatious.

III. [Consideration of seller's claim for damages]

The [seller] can further claim damages in an amount of EUR 8,250. This claim is based on Art. 61(1)(b) CISG. A seller can accordingly claim damages, if the buyer fails to perform any of its duties and obligations under a sales contract. It is a buyer's duty to accept the goods acquired. Under Art. 63(1) CISG, a seller may fix an additional period of grace of reasonable length for performance by the buyer of its obligations. In fact, the [seller] did not set such an additional period of grace. However, under the special circumstances of this case, [seller] was not obliged to set such an additional time for acceptance of the goods. Such a further period of grace would have been absolutely redundant, since [buyer] had already seriously and conclusively refused to accept all of the goods set out in invoice No. 36 of [seller]'s statement of claim. Thereby [buyer] did not have a valid basis for asserting that it had the right to cancel this specific order by virtue of previous deliveries of defective goods and failures to deliver the goods in time. [Buyer]'s allegations are not substantiated at all. [Buyer] has not demonstrated which specific date for delivery of the goods the parties agreed to and at what time [seller] offered the actual delivery of the goods. Consequently, the Court cannot conclude an elapse of time set up for the delivery of the goods based on [buyer]'s submissions. Further, [buyer]'s argument, that its order had already been cancelled due to previous deliveries of defective goods, does not suffice and convince the Court as such. In spite of the Court's concerns disclosed in the hearing on 8 March 2002, [buyer] did not come forward with any evidence and submission as to which specific delivery of goods comprised defects. Further, it did not even specify those argued defects and lack of compliance as well. And finally, it did not specify when [buyer] might have given notice about the (apparent) lack of compliance of those goods. The [buyer] has not objected to the claimed level of damages at EUR 8,250 as such, so that this claim is fully founded.

IV. [No invocation of Buyer's objections]

In the light of the aforementioned [seller]'s action, its claim of overall EUR 229,471.65 has not been reduced by any of [buyer]'s objections. All of buyer's declarations of set-off and respectively other types of elimination of its debts are unfounded.

     a) [Set off with buyer's contended credits]

In particular, [buyer] cannot claim set-off with its credits of EUR 7,884.95 and EUR 3,611.64 set out in its brief of 10 January 2002. [Seller] actually acknowledged and granted credits to the [buyer] in an amount of EUR 6,926.95 and EUR 3,995.98 and reduced its claim in this amount. [Buyer] is not entitled to any additional credits beyond that. [Buyer] has not given sufficient evidence as to substantiating the actual amount of additional credits. Without any further submissions and evidence, it does not suffice merely to refer to its queries for additional credits on 21 May 2001. Asking for credits does not constitute agreement to grant the credits. [Seller] has not accepted this additional grant of credits to [buyer] in this amount. It is not comprehensible at all as to why [buyer] should be entitled to claim set-off with its aforementioned amounts. Insofar as [buyer] asserts an out of court settlement between the parties represented by their former attorneys with regard to those additional granted credits, it has again not sufficiently substantiated this fact. Such an agreement does not follow from the letter of 28 June 2001 presented by the [buyer]. Contrary to [buyer]'s statements in its note of 10 January 2002, the letter of 28 June 2001 does not originate from the [seller]'s Dutch attorney; this letter had been drafted by [buyer]'s Dutch attorney. This letter was also not directly aimed at the [seller], but is directed to the insurance company "Goslar", which was mandated to collect [seller]'s claims against [buyer]. The Court cannot particularly recognize that this letter of 28 June 2001 comprised an agreement to credits as alleged by [buyer]. [Buyer]'s attorneys mention that one of the [seller]'s employees, Mr. ___, might have declared its general willingness to confirm topics No. 1, 2 and 5 of the respective agenda. However, this letter does not give conclusive evidence as to an actual agreement by the parties to the grant of additional credits. Furthermore, that letter purports to restate the apparent wording of a phone conversation between [buyer] and [seller]'s employee, Mr. ___. Whether or not that letter truly restates the exact wording of this conversation cannot be concluded to the necessary degree of conviction of the Court. For this reason, [buyer] is not entitled to claim for the grant of additional credits. Therefore, the claimed reduction of [seller]'s action in an amount of EUR 4,173.44 -- this is the difference between the overall claimed credit of EUR 11,496.97 and the actually acknowledged credit of EUR 7,322.92 -- is unfounded.

     b) [Buyer's counterclaim as to its returns]

The [buyer]'s counterclaim, that it based on (ostensible) returns of goods in an amount of EUR 12,783.72, is also unfounded, inconclusive and incomprehensible. [Buyer] has neither pleaded its claim conclusively nor submitted meaningful evidence by schedule 6 to its statement of defense. In other respects, [buyer] has not argued in a substantiated manner which exact delivery encompassed which particular defects and lack of compliance.

     c) [Buyer's general claim for damages]

[Buyer] is also not entitled to damages against [seller] in the amount of EUR 141,116.56. [Buyer] has not established sufficient evidence and pleading with regard to its claimed additional costs incurred as discounts, returns, cancellations and additional working hours of its employees. It is not satisfactory to merely describe an alleged lack of compliance and defects in just a general manner. [Buyer] had the onus of proof to specify each of the defects complained. Even after the intimation given by the Court in its hearing on 8 March 2002 as to its concerns about the substance of its pleading, [buyer] has not brought forward any further evidence or substantiation for its allegations. Therefore, the Court did not have any duty to question witnesses ___ and ___ in the hearing of 23 August 2002 about the fact, whether or not the goods delivered lacked of compliance and were malfunctioning. Such questioning would have been more or less "fishing in the dark". [Buyer] did not come up with any further details and specifications as already mentioned above about the fact, which delivery should have entailed what specific lack of compliance. [Buyer]'s latest pleading in its particular of 9 September 2002 does not require the Court to reopen the hearing pursuant to Sec. 156 ZPO [*]. The Court has not caused any harm to [buyer]'s right to be properly listened to at court in due proceedings. The Court did mention its concerns about the lack of substantiation with regard to the contended defects of the goods during its hearing on 8 March 2002, while the parties were trying to settle their dispute and the Court was mentioning its preliminary opinion about the facts and possible legal outcome of the case. It does not have any adverse effect that the aforementioned indication has not been inserted into the Court's minutes of that hearing.

     d) [Buyer's claim for damages due to trademark violation]

[Buyer] is also not entitled to damages due to a violation of its trademark or patent rights. [Buyer] has not indicated in a sufficient manner how it calculated these damages. This fact is thereby absolutely independent from the question whether a violation of [buyer]'s trademark actually occurred. [Buyer] cannot argue to have obtained a profit of at least DGL 50 per slatted frames if it had sold them to the respective customers itself. On the one hand, [buyer] did not accept [seller]'s delivery of those goods, whereby it did not give any reasons why [seller] should have been in default with regard to that delivery. On the other hand, [buyer] was obliged to prove that it was actually able to sell those slatted frames. Further, [buyer] cannot claim damages of DGL 20 per slatted frame due to an ostensible shrinkage in its reputation and good will. [Buyer] has not sufficiently proven its contention. Additionally, the Court did not refer to this quite obvious lack of substantiation and was not even obliged to do so because [seller] did mention the inconclusiveness of [buyer]'s pleadings in its particular of 4 February 2002.

     e) [Buyer's claim for damages as to returns after commencement of seller's action]

[Buyer] cannot claim the further damages against [seller] in an amount of EUR 54,015.99 that it alleged in its particular on 6 August 2002. To the extent that [buyer] submits it had returned additional goods to the [seller] in an overall amount of EUR 54,015.99 after the commencement of these legal proceedings, this assertion does not give [buyer] a counterclaim for set-off. Once again, [buyer] missed the opportunity to demonstrate satisfactory substantiation with regard to the particular and specific defects of the relevant goods delivered. Merely the fact that some customers had returned their goods to the [buyer] does not suffice to claim warranties against the [seller] in a sufficient manner. Furthermore, any questioning upon this topic would have been an improper and illegitimate investigation and "fishing in the dark" too.

     f) [Buyer's objection as to direct delivery to another bed shop]

Even with regard to the direct delivery of some frames directly to the Bed Shop ___, the [buyer] cannot make a case for objections to [seller]'s claim. The respective invoice of EUR 5,159.71 is not within the scope of [seller]'s claim and thus of these legal proceedings. [Seller] does not claim payment of this amount within its action. Incidentally, [buyer] did not indicate when, how and for what reason it had paid this amount. Consequently, [buyer] cannot base its claim on unjustified enrichment. Merely the fact that [seller] illegitimately invoiced [buyer] as to other goods on various occasions does not prove [buyer]'s claim and allegation in this case.

     g) [Buyer's objection as to the invoiced direct delivery to another company]

[Buyer]'s pleading as to the delivery to Company ___ is absolutely irrelevant too. Though it might be the case that this company notified the [seller] about lack of compliance and requested it to fetch the goods, [buyer] is still obliged to substantiate and specify all of the defects in some more detail, so that [seller] would have been in the position to object to its assertions. Incidentally, the invoice of EUR 11,429.29 referred to by the [buyer] is not claimed and thus is not within the scope of these legal proceedings. [Buyer] could only claim payment from [seller], if [buyer] had already paid that invoiced amount. However, [buyer] has not submitted any additional pleading or evidence as to this point.

     h) [Buyer's claimed compensation for loss of profit]

None of the additional losses of profit and reductions in sale asserted by [buyer] in its note of 6 August 2002 has been demonstrated in a sufficient and substantiated manner. Merely an allegation of loss of profits in a percentage rate of 66% definitely does not suffice as such. In addition, the [buyer] has not given any evidence or submission as to the grounds for all of its alleged returns. Consequently, [buyer] cannot claim payment for loss of profit by virtue of this further lack of substantiation. This reasoning of the Court also applies to the concurrently claimed damages due to a misleading of the market place in which [buyer] is operating. [Buyer] asked the Court to hear an expert's opinion on this matter as well. However, the Court denies mandating an expert in this respect, because [buyer] has not satisfactorily substantiated its pleading.

     i) [Buyer's further claimed damages]

The aforementioned reasoning is applicable in respect of the claimed damages in an amount of EUR 11,429.88 and EUR 6,242.04. Since [buyer] has not been able to argue its case as to the prerequisites of a warranty claim, it cannot claim those costs within a claim for damages.

     j) [Buyer's objection as to its asserted right of retention]

[Buyer] is further not in a position to invoke a right of retention with regard to agreed credits in its favor in an amount of EUR 8,447.39. In its brief of 22 August 2002, [seller] vehemently denied that both parties agreed to such a right of retention. The letter of 9 April 2002 submitted as evidence by [buyer] does not prove such an agreement between [seller] and [buyer]. The attached fax message does not envisage any statement that this letter was actually sent to the [seller]. [Buyer] has not brought forward any additional evidence to prove its right of retention.

     k) [Buyer's alleged assumption of debt by seller]

Finally, [buyer] is not entitled to set-off against [seller]'s claim in an amount of EUR 32,510.07 due to [seller]'s assumption of witness ___'s debt owed to the [buyer]. In the light of the evidence taken by the Court, [buyer] has not succeeded in establishing that all of the parties involved agreed that [seller] would assume witness ___'s debt and that [buyer] would be entitled to set-off this amount against [seller]'s claim. Witness ___ did give evidence that he agreed with the [buyer] to the [seller]'s assumption of its debt. However, this witness gave further evidence that he had an additional conversation with the [buyer]'s managing director, namely Mr. ___ at that time, in which they talked particularly about the prospective assumption of his debt by [seller]. It is then remarkable, that the witness did not have any further knowledge about the actual result of this conversation.

The fax submitted by [buyer] does not comprise -- neither explicitly nor implicitly -- and cannot prove an agreement between all the parties involved with regard to [seller]'s assumption of witness ___'s debt. Therein, the [buyer]'s managing director merely asked for a confirmation and grant of a credit in an amount equalling the amount set-off in this fax notice.

The Court cannot conclude such an agreement as asserted by the [buyer] from [seller]'s note of 4 April 2001 sent to witness ___. The [seller]'s accountant and bookkeeper outlined in this note how an assumption of witness ___'s debt might be carried out. Nevertheless, this note does not entail any evidence that the parties had agreed to such an assumption of debt by the [seller] at that stage.

Witness ___ did reveal that he heard one of [seller]'s employees mentioning that the assumption of the debt should not cause any problems. That employee should have mentioned this extremely relevant statement, while he was visiting [buyer] at its premises in the Netherlands. The same employee might have then declared just one week thereafter during a phone conversation, that unfortunately [seller] was not willing to agree to such an assumption of debt any longer. This statement is in discrepancy with and opposition to witness ___'s statement. That witness gave evidence that the [buyer]'s managing director, viz Mr. ___, showed him once again the aforementioned fax and asked for his signature in the name and on behalf of the [seller]. This witness ___ was actually [seller]'s employee carrying out the visit at [buyer]'s establishment in the Netherlands. That witness refused to sign this fax and confirmation because [seller] did not have the intention and willingness to assume this debt in question.

The Court does not see any reason why it should not follow and believe the statement and revelations of the latter witness. This statement is conclusive and thoroughly reliable and this witness gave the impression that his statement is credible as to every aspect of his statement. In particular, he was able to indicate particularities and details of the conversation held at [buyer]'s premise in the Netherlands. He did not just jump directly into the specific point in question at court. The other witness, who was only present at the beginning of this discussion, confirmed without any limitations all other aspects of his given statement as to procedure and contents of it with the [buyer]. Furthermore, this witness actually revealed all aspects of this conversation without any self-contradictions. Henceforth, the Court does not have any reason to doubt and to have any ambiguities as to his statement. Finally, the fact, that witness ___ paid his debt to [buyer] after its request, argues also against an agreement to an assumption of debt by the [seller]. If the parties had already agreed to an assumption of witness ___'s debt, from [buyer]'s point of view it would not have had any reason to request payment from this witness. In conclusion, [buyer] has not succeeded in proving such an agreement and it bears the onus of proof in this respect. Therefore, [seller]'s claim has not been reduced by an agreed set-off in an amount of EUR 32,510.07.

V. [Seller's claimed payment of default interest]

[Seller] is entitled to claim payment from the [buyer] of 5% default interest above the Base Rate [*] on the purchase price in an amount of EUR 221,221.65 pursuant to Art. 78 CISG in connection with Sec. 288 Par. 1 BGB [*]. However, [seller] has not demonstrated that it can claim payment of a higher interest rate. Insofar as [seller] granted and acknowledged credits in an overall amount of EUR 7,322.93, [seller] had already reduced its claim within these proceedings accordingly. These credits on [seller]'s claim based on the amount stated in invoice No. 1 were set-off against its own claim. This reduced the amount on which its claim for interest payment had to be calculated. [Seller] has not argued its case, what amounts of which invoices should be reduced by those credits in favor of the [buyer]. [Seller] has not particularly adjusted its calculation of default interest. The Court, moreover, does not have the duty to carry out such an allocation and appropriation. For this reason, the Court reduced the claim for payment of default interest with regard to the most mature claim against the [buyer].

In relation to its claim for damages in an amount of EUR 8,250, [seller] can claim payment of interest since the commencement of its legal action pursuant to Sec. 291 BGB [*]. The [seller] only transformed the claim under invoice No. 36 to a claim for damages during the lawsuit, and may therefore not claim interest from the time payment was due under Art. 78 CISG.

[Ancillary decisions held by the Court]

The Court's decision on the costs for these legal proceedings is based on Secs. 92 Par. 1, 263 Par. 3 ZPO [*]. The decision on preliminary enforcement ensues from Sec. 709 ZPO.

Pape, Krohn, Behrens

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Germany is referred to as [seller]; the Defendant of the Netherlands as [buyer]. Amounts in the currency of the Eurocurrency Area (Euro) are indicated as [EUR]; amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM]; amount in the former currency of the Netherlands (Dutch Gulden) are indicated as [DGL].

Translator's note on other abbreviations: Base Interest Rate = Basiszinssatz [Base Interest Rate as set forth in Sec. 1 of the German Act on the Transmission of the Discount Rate (Federal Law Gazette I, p. 1242) as from time to time amended]; BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGBl. = Bundesgesetzblatt [German Federal Law Gazette]; Brussels Convention = 1968 European Community Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, succeeded by the council Regulation on Jurisdiction and the Recognition of Judgments in Civil and Commercial Maters [44/2001/EC], cited in this opinion as EuGVÜ = Europäisches Gerichtsstands- und Vollstreckungsübereinkommen, 1968; DÜG = Diskontsatz - Überleitungsgesetz [German Act on the Transmission of the Discount Rate (Federal Law Gazette I, p. 1242)]; Staudinger = Commentary on the German Civil Code including a specific volume as to the CISG; Zäller/Geimer = Commentary on the German Civil Procedure Act, 22nd edition; ZPO = Zivilprozessordnung [German Civil Procedure Act].

** Stefan Kuhm is a Member of the Bar Association, Frankfurt a.M., and a Ph.D. candidate at Eberhard-Karls-Universität, Tübingen.

*** 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.

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