Germany 25 March 2003 District Court Köln (Racing carts case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030325g1.html]
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: 3 O 196/01
CASE NAME:
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Denmark (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Racing carts
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
47A [Buyer's right to fix additional period for performance]; 50A [Buyer's right to reduce price for non-conforming goods]; 74A [General rules for measuring damages: loss suffered as consequence of breach]
Descriptors:
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/1090.pdf>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
Unavailable
Go to Case Table of ContentsCase text (English translation) [second draft]
Queen Mary Case Translation Programme
25 March 2003 [3 O 196/01]
Plaintiff [Seller] is seated in Denmark, and is a producer and vendor of racing carts. Defendant [Buyer] has its seat in Germany and runs a racing track for carts.
1. JUDGMENT
[Buyer] is ordered to pay to [Seller] the sum of 5,689.16 EURO [*] plus interest 5 % above base rate (maximum: 12.5 %) since 22 September 2000 to [Seller].
In all other respects, the claim is dismissed. [Seller] bears 1/3 and [Buyer] 2/3 of the cost of the proceeding. The judgment is temporarily enforceable. [Seller] may only execute the decision on return of a security in the amount of 110 % of the executed sum. [Seller] may further prevent further judicial enforcement by [Buyer] by furnishing security in the amount of 110 % of the sum, unless [Buyer] has provided bond in the same amount before execution.
2. FACTS OF THE CASE
[Seller] is a Danish company, that produces and sells carts (single-seated, engine-driven racing cars with four wheels in an open construction and without suspension) as well as replacement parts and cart accessories. [Buyer] runs a racetrack for carts in Cologne and had a steady business relationship with [Seller]. In 1999, [Buyer] ordered thirteen newly-made carts of the model "DINO Leisure" with red chassis and "completely built" from [Seller] through its sales representative for a total sum of 47,580.00 DM [*]. [Buyer] was obliged to provide the engines, tires and exhaust pipes. The carts were intended to be used in a 24-hour race, that took place on [Buyer]'s racetrack on 30/31 October 1999. After delivery of the engines manufactured by the American company B&S to Denmark by [Buyer], the [Seller] delivered the carts to Cologne some days before 30 October 1999. The carts were not completely built, in particular the fuel supply for the engines was not assembled, the rear wings were not tailored and the seats were not installed.
[Seller] brought the delivered carts to account amounting to 47,580.00 DM on 25 October 1999; [Buyer] paid 37,000.00 DM under reserve. Further invoices of 29 November 1999 for 346.50 DM and 21 December 1999 for 5,900.53 DM, which belonged to other deliveries of goods remained unpaid. On 31 January 2000, [Buyer] forwarded to [Seller] an own account for the sum of 15,762.50 DM. That account was resent on 27 March 2000. Later, the carts in dispute were sold by [Buyer] in Hungary for an unknown price.
By letter of 20 September 2000, [Seller] requested from [Buyer] payment of the outstanding sum of 16,827.03 DM. That sum is the cause of action.
[Seller]'s position
[Seller] alleges, that [Buyer] did not confer with [Seller] over providing B&S engines. [Seller] was moreover not obliged to foresee that fact, since [Buyer] had only delivered and [Seller] only mounted Honda engines in former transactions. As a result, after receipt of the engines, a German-speaking employee of [Seller] contacted [Buyer] by telephone on 21 October 1999 and recommended that the engines should be assembled by a mechanic in Cologne. This was also the way it happened. [Buyer] was satisfied with the assembly, when [Seller]'s mechanic returned to Denmark.
[Seller] requests the court to order [Buyer] to pay 8,603.52 EURO plus interest at an interest rate of 12.5 % since 22 September 2000.
[Buyer]'s position
[Buyer] requests the court to reject the [Seller]'s claim. [Buyer] alleges that the carts that were delivered were not in conformity with the contract (besides having been delivered too late, since delivery should have taken place one week before the 24-hour-race). Consequently, [Buyer] had to make extensive modifications, it could set-off against [Seller]'s claim (namely 15,762.50 DM pursuant to the account of 31 January 2000).
Mr. _____, [Seller]'s principal agent in Germany agreed that B&S engines should be installed in the carts, which were by the way only two centimeters (0.79 inch) wider than the engines produced by Honda. Moreover, the fuel supply, the fuel pumps and the rear wings should have been assembled in Denmark, it was only foreseen to mount the tires in Cologne. Additionally, [Seller] delivered couplers with 21 centimeter pinions, instead of the 19 centimeter pinions ordered. In place of red carts, as ordered, [Seller] delivered carts with black chassis. There was plastic chipping in the fuel tanks, which made dismantling, cleaning and re-integrating the tanks inevitable. Finally, the seat frames had to be modified, since, instead of individually fixed frames, [Seller] delivered solidly welded seat frames, which broke after a short period of time.
[Buyer] further alleged that the invoiced modification costs effectively incurred were usual and reasonable for such operations, as well as the asserted reduction in value; and that Mr. _____ had declared, that the account would be all right and reckoned up; as [Seller]'s principal agent in Germany, he was authorized to issue such a statement for [Seller].
The court adopted evidence by witnesses and experts and refers to the transcripts of 20 February 2002 and 17 April 2002, as well as the appraiser's report of 10 December 2002.
3. REASONS FOR THE DECISION
The claim is partially founded.
[Seller] has a claim for payment of the outstanding purchase price pursuant to Arts. 1(1)(a), 3(1), 53 CISG on the basis of the undisputed facts and circumstances. The CISG has to be applied, since Germany and Denmark are Contracting States and the parties did not withdraw its application (Art. 6 CISG). Undisputedly the parties concluded a contract in the sense of the Convention, concerning delivery of the carts and further goods (equipment and replacement parts) belonging to the accounts of 29 November 1999 and 21 December 1999. Considering the partial payment of 37,000.00 DM, a balance of 8,603.52 EURO (16,827.03 DM) was still outstanding.
Bearing the evidence in mind, [Buyer] may either reduce the purchase price by 2,914.36 EURO (5,700.00 DM) or - as [Buyer] requests in the first place, but which leads to the same result - set-off with a claim for damages under Arts. 50, 74 CISG.
At the time the risk passed (Art. 67 CISG), the delivered carts were not in conformity with the contract (Arts. 35, 36 CISG).
Even [Seller] does not seriously dispute, that the carts, except for the tires, which were to be installed in Cologne, should have been delivered "completely built", i.e., ready-to-operate with functional engines; this very fact was - undisputedly - the only reason, why [Buyer] sent the engines first to [Seller]'s Danish branch. [Seller]'s allegation, that the parties agreed in the telephone call of 21 October 1999, to install the engines in Cologne by [Seller]'s mechanic due to the unfamiliar type, is not proven, because of the conflicting testimonies by witnesses _____ and _____ (supporting [Seller]'s presentation) and witnesses _____, _____ and _____ (stating that the engines were already placed on the carts, but were inoperative). Ultimately, such agreement is not decisive in the instant case, since it was [Seller]'s obligation, according to its own statement, to mount the engines ready-to-operate, indifferent whether in Denmark or Cologne.
It is proven by statements of the witnesses _____, _____, _____ and _____, that after delivery of the carts (which took place, with credible affirmation of witnesses _____ and _____, on Tuesday, 26 October 1999), apart from [Buyer]'s duty to install the tires, still significant assembly- and modification works were necessary to put the carts into the functioning and "ready-for-race" condition, which corresponded with the ordinary and contracted purpose of the carts (Art. 35(2)(a), (b) CISG).
The above-mentioned witnesses stated concretely and with many details (not mentioned in the memoranda), how they tried to make the defective carts fully functional. Beyond the missing and thus caught up installment of the fuel supply (fuel pumps and pipes) as well as the rear wings and seats, which were even pursuant to [Seller]'s allegation not mounted at the time of delivery, it is, on the background of these statements, very likely that the carts were also equipped with wrong pinions. As a result, the transmission did not work properly and the throttle cables had to be modified. Especially witness _____ confirmed, that the delivered carts did in various points differ - among other ways, with respect to their color - from the carts which would have complied with the specifications that were provided to [Seller]. In contrast, the Court repudiates witness ____'s allegation, that he and Mr. _____ installed the engines in the delivered carts, whereupon Mr. _____ was satisfied with the assembly. This statement is contrary to Mr. _____'s testimony and also conflicts with the statements of the other witnesses. Moreover, this witness, pursuant to his own assertion, did not even take part in a test drive of the carts.
[Buyer] did not lose its right to rely upon defectiveness of the delivered goods (Arts. 38 et seq., Arts. 46 et seq. CISG), although it remedied the carts' deficiencies without setting an additional period of time for [Seller]. Firstly, [Buyer] complied with its duty to inform [Seller] by declaration to Mr. _____, who was introduced as [Seller]'s representative in Germany (not only in magazine adverts, but also concretely towards [Buyer]) and took part in the subsequent modifications of the carts. Secondly, bearing the upcoming 24-hour-race in mind, it would have been unreasonable to grant [Seller] the possibility to repair the deficiencies with its own personnel or to deliver carts in replacement.
However, this applies only for the works, that had to be done before the beginning of the race, as well as the efforts - according to testimonies of witnesses _____, _____ and _____ -- necessary during the race, namely to free the fuel tanks from plastic chipping. As far as [Buyer] reprimands the defectiveness of the seat frames, which were allegedly broken and had to be replaced, any such urgency to repair the defects did not exist. As it can be gathered from the account of 31 January 2000 and an on-site inspection of an expert, the frames burst some time after the 24-hour-race. Insofar, [Buyer] was obliged to set an additional period of time for removal of defects to be allowed to exercise its rights due to a breach of contract on [Seller]'s part (Art. 47(1), (2) CISG). It is not proven, that this happened or that [Seller] denied supplementary performance before [Buyer] began to remove the defects on its own.
Thus, [Buyer] can only reduce the purchase price or recover damages for the modification costs occurring until the end of the 24-hour race, as well as for the color of the carts, which was not in conformity with the contract and could not be changed until begin of the race. The Court laid down the estimated costs (pursuant to § 287 ZPO [*]) on the basis of an expert's report, which would have accumulated in a normal course of operations, namely 1,917.34 EURO (3,750.00 DM) expenses for modifications.
On the one hand, [Buyer] requests an "abstract" calculation, according to its account of 31 January 2000. Though, [Buyer] did not prove, that [Seller] - represented by witness _____ - already accepted the invoice receivable: In fact, the witness assured credibly, that he did not concede any costs or cost calculations.
On the other hand, it does not seem reasonable, because of a missing informative basis, to calculate the costs on a "concrete" basis which could have been (regarding the amount of working hours) beyond or (regarding the remuneration) below the costs reasonable, usual and appropriate for corrective actions performed by a specialist workshop. The expert convincingly determined the sum of 1,917.34 EURO (3,750.00 DM) for these works. The Court refers to the expert's report, since it was not attacked by the parties.
Additionally, the loss in value resulting from the wrong color was priced by the appraiser at the sum of 997.02 EURO (1,950.00 DM).
In conclusion, this reckoning leads to a remaining purchase price of 5,689.16 EURO (= 8,603.52 EURO outstanding minus 2,914.35 EURO reduction of price).
The claim for interest derives from Art. 78 CISG. Since [Seller] did not prove its damages in interest, it may, pursuant to § 287 ZPO [*], only recover a variable interest rate in accordance with § 288 BGB [*].
The awarding of costs is based on § 92(1) ZPO. The temporary enforceability of this judgment was found on the basis of §§ 708 (No. 11), 709, 711, 713 ZPO.
The value in dispute is: 8,603.52 EURO (16,827.03 DM).
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Denmark is referred to as [Seller]; Defendant of Germany is referred to as [Buyer]. Amounts in former German currency (Deutsche Mark) are indicated as [DM]. Amounts in European currency are indicated as [EURO]
Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; ZPO = Zivilprozessordnung [German Civil Procedure Code].
** Thorsten Tepasse is a law student at the University of Osnabrück, Germany and participated in the 12th Willem C. Vis Moot with the team of the University of Osnabrück.
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