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CISG CASE PRESENTATION

Switzerland 4 August 2003 Federal Supreme Court (Wine case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030804s1.html]

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

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Case identification

DATE OF DECISION: 20030804 (4 August 2003)

JURISDICTION: Switzerland

TRIBUNAL: Bundesgericht [=BGer = Federal Supreme Court]

JUDGE(S): Corboz (President); Klett, Nyffeler (Judges); Gelzer (Clerk of the Court)

CASE NUMBER/DOCKET NUMBER: 4C.103/2003/lma

CASE NAME: Unavailable

CASE HISTORY: 1st instance Handelsgerichts des Kantons Zürich 25 February 2003

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Switzerland (defendant)

GOODS INVOLVED: Wine


IHR headnote

IHR headnotes this case as follows:

"1. The implied acceptance of an offer to conclude a sales contact which is made merely by sending the goods requires that the party making the offer procures the delivery obviously in its own name.

"2. On the requirements of a cessio legis of claims acquired by an agent against a third party to the principal pursuant to Swiss law." Internationales Handelsrecht (1/2004) 28-29.


Classification of issues present

APPLICATION OF CISG: The court applied the Convention

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 8 ; 9 ; 11 ; 14

Classification of issues using UNCITRAL classification code numbers:

8A [Intent of party making statement or engaging in conduct];

9C [Practices established by the parties];

11A [Writing or other formality not required for conclusion of contract];

14A [Criteria for an offer (basic criterion): intention to be bound in case of acceptance]

Descriptors: Formal requirements ; Intent ; Offers ; Acceptance of offer ; Usages and practices

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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

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=954&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/804.pdf>; Internet website of the Schweizerisches Bundesgericht <http://www.bger.ch>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=954&step=FullText>; see also Internationales Handelsrecht (January/February 2004) 28-31

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Federal Supreme Court (Bundesgericht)

4 August 2003 [4C.103/2003]

Translation [*] by Veit Konrad [**]

Edited by Jan Henning Berg [***]

JUDGMENT

  1. Plaintiff-Appellant's appeal (Berufung) is unjustified.

  2. Plaintiff-Appellant has to come up with the amount of CHF (Swiss francs) 6,500.00 as costs of its appeal.

  3. The parties and the Court of First Instance (Court for Commercial Matters (Handelsgericht) of the Canton of Zurich) will be notified about this ruling in writing.

FACTS OF THE CASE

1. Defendant-Appellee [Buyer], a public limited company (Aktiengesellschaft; AG) seated in Zurich, trading in food, on 24 September 1997 ordered from Swiss Company B. [Seller] 70,000 three-bottle-sets of wine (each including one bottle of Premier Brut, one of Trebiano white wine and one of Montepulciano red wine) for CHF 12.70 each, in total CHF 885,253.50. By this agreement, [Buyer] was entitled to send back unsold sets of wine and reclaim the money for them. After receiving [Buyer]'s order, [Seller] in turn ordered the requested wine from its Italian intermediary, Trader C., who in turn bought the goods from D. [Plaintiff-Appellant], an Italian wine producing limited liability company. It had been stipulated that C. should make provision that the goods were to be delivered directly to [Buyer]'s place of business in Switzerland. As [Buyer] was unable to sell the entire amount of 70,000 sets of wine, it entered into negotiations with [Seller] concerning the sets it still held on stock. In these negotiations, a reduction of the price for each remaining set, and alternatively, the returning of the delivered goods had been discussed. Eventually, it was agreed that [Seller] would allow a reduction of CHF 2.59 for each unsold set of wine and bound itself to deliver an additional 15,000 bottles of Montepulciano to compensate [Buyer] for its suffered losses. On 6 February 1998, [Buyer] sent the following fax to [Seller]:

"Referring to your offer as been transmitted by X., we place the following order:

"1. Italian red wine Montepulciano d'Abruzzo "Duca del Poggio" 1996 D.O.C., filled in 0.75 liter bottles by the producer [...]

"2. We order 150,000 bottles (0.75 liters) for the amount of CHF 2.49 per unit including all taxes except Value Added Tax, to be freely delivered to our Swiss distribution centers in Frauenfeld (Canton Thurgau) and Schmitten (Canton Fribourg). Our order comprises 50,000 bottles of the specified item, which have already been delivered in sets of three bottles each on 24 September 1997 and which we hold still on our stock.

"[...]

"6.4. The costs for dispatching, repacking of the latter 50,000 bottles in sets of six bottles, and the new price tagging of these items will be set off against the purchase price for new deliveries.

"[...]

"10. If you do not agree to these conditions, we ask for express notification by 6 February 1998. Otherwise we assume your consent."

[Seller] forwarded this order to its supplier D. [Plaintiff-Appellant] and asked for delivery directly to [Buyer], who according to [Seller] should pay D.[Plaintiff-Appellant] directly for the delivered goods.

Accordingly, Plaintiff-Appellant delivered 150,000 bottles of the specified Montepulciano to [Buyer]'s place of business and sent bills on 13, 14 and 16 February 1998 for a total amount of CHF 373,500.00. After [Buyer] came up for taxes due of CHF 88,928.00, Plaintiff-Appellant on 27 April 1998 submitted a reduced bill of CHF 284,572.00. As regards this amount, [Buyer] in a letter to Plaintiff-Appellant dated 17 June 1998 declared a set-off against the sum of CHF 284,886.59 due to the agreed price reduction as well as due to the costs for dispatching of 69,703 three-bottle-sets and their repacking. With respect to the remainder of CHF 315.00, [Buyer] suggested to send back its 55,000 bottles of Premier Brut (CHF 3.40 each) and in turn order another 150,000 bottles of Trebiano wine for CHF 2.80 per unit.

2. On 4 September 2001, Plaintiff-Appellant brought a claim against [Buyer] for the amount of CHF 284,886.59 plus 5% interest due since 2 June 1998 before the Court for Commercial Matters (Handelsgericht) of the Canton of Zurich. Plaintiff-Appellant argued that it impliedly entered into a sales contract for the delivery of 150,000 bottles of Montepulciano with [Buyer] by delivering the agreed goods. Hence [Buyer] is bound to pay according to the presupposed contract. Through its letter of 17 June 1998, [Buyer] had implicitly admitted the existence of this contract.

In its response, [Buyer] argued that it entered into a contract of the named kind with [Seller] and not with Plaintiff-Appellant. Thus Plaintiff-Appellant's claim was unjustified. In eventu the Commercial Court would nevertheless find [Buyer] to have entered into the presupposed contract with Plaintiff-Appellant, [Buyer] argues, that then the claim must be dismissed due to its declared set-off. [Seller] further submitted that with respect to this set-off, Plaintiff-Appellant had declared that it would waive its rights as towards [Buyer]. Plaintiff-Appellant, on the other hand, denied having given any such waiver declaration.

In its judgment of 25 February 2003, the Court for Commercial Matters held Plaintiff-Appellant's claim to be unjustified. The Court found it not sustained that Plaintiff-Appellant had entered into a contract of the presupposed kind with [Buyer].

3. In its appeal (Berufung) Plaintiff-Appellant keeps to its claim and seeks reversal of the Court of First Instance's ruling. In eventu, it seeks to have the case to be remanded to the Court of First Instance for retrial.

[Buyer] argues for the dismissal of the appeal.

REASONING

1. [....]

2. Concerning a presumed acknowledgement of the debt up to the claimed amount given by [Buyer] the Court of First Instance held that [Buyer]'s letter of 17 June 1998 did not expressly or implicitly entail such a statement. As Plaintiff-Appellant declared in the appellate proceedings that it itself never presupposed that such a debt acknowledgment had been given by [Buyer], there is no need for further investigation into this matter.

3.  a) The Court of First Instance further contended that a contract for the delivery of the specified Italian wine had been concluded between [Buyer] and [Seller]: [Seller] accepted [Buyer]'s order as submitted by X. on 6 February 1998. As far as [Seller]'s acceptance implied modifications to the original offer, it had to be regarded as a counter-offer, on whose acceptance [Seller] was entitled to rely on due to the long established business relation between the parties.

3.  b) In its appeal, Plaintiff-Appellant claims that the Court of First Instance misinterpreted the applicable Swiss law by holding [Buyer]'s order to be an acceptance of [Seller]'s offer, rather than a counter-offer which needed to be accepted by [Seller]. Yet, as [Seller] did not react on the offer, merely forwarding it to one of its suppliers instead, Plaintiff-Appellant argues, that it could not be considered as accepted. Under the applicable Swiss law, an offer had to be accepted expressly; remaining silent to an offer cannot be regarded as its acceptance. The exception to this principle mentioned in Art. 6 of the Swiss Law of Obligations (Obligationenrecht; OR) according to Plaintiff-Appellant would not apply to the case at issue. Equally provision No. 10 of [Buyer]'s order is not applicable as it would give rise to abuse, allowing a party to rely on the acceptance of its offer, merely by adding a provision of that kind to it.

3.  c) According to Art. 6 of the Swiss Law of Obligations (Obligationenrecht; OR) an offer is accepted, if - due to the specific character of the agreement or the particular circumstances of the case - the offeror can rightfully rely on the acceptance and the other part has not explicitly refused to accept within reasonable time. Between two parties active in the field of commerce with one another for many years, it may be expected that a party will notify the other if receiving a letter of confirmation that implied a modification to a given offer. If that party fails to do so, it is bound to the agreement as stated in the modified confirmation. This can be drawn from the principle of good faith (ruling of the Federal Supreme Court (Bundesgericht) 4C.16/2000 of 24 January 2001; ruling of the Federal Supreme Court (Bundesgericht) BGE 1223 III 35 E. 2c/aa page 42).

3.  d) The question of whether X. had submitted an offer per procurationem of [Seller] is irrelevant to the case. Even if X. was not authorized by [Seller] as concerns this offer, the wording of the [Buyer]'s response "[...] referring to the offer as submitted by X., we order the following items [...]" unambiguously indicates that it was meant as an acceptance to a presumed offer given by [Seller], which would not need further acceptance by the other party. This interpretation of [Buyer]'s order as an acceptance of [Seller]'s offer is supported by provision No. 10 of this document, according to which the order might be considered accepted if not expressly refused by 6 February 1998. Considering that the parties had already entered into business relations about the delivery of wine, this provision - following the principle of good faith - held [Seller] bound to expressly refuse [Buyer]'s order within the given deadline. As [Seller] failed to do so, [Buyer] could rightfully rely on the other party's consent to its order. Hence the Court of First Instance correctly concluded that [Buyer] and [Seller] entered into a valid sales contract.

4.  a) The Court of First Instance further contemplated the question whether [Buyer] and Plaintiff-Appellant also entered into a binding agreement about the delivery of wine. It found that this had to be decided under the applicable CISG. [Buyer] accepted that the wine, it had ordered from [Seller] was delivered by Plaintiff-Appellant, and it did not complain about receiving bills for this delivery from [Plaintiff-Appellant] instead of [Seller] himself. Yet, the Court of First Instance found that this was hardly enough to assume that [Buyer] impliedly concluded a contract with Plaintiff-Appellant for the delivery of wine at issue. Such a presumption would fail to take account of the clear wording of [Buyer]'s order, which is clearly addressed to [Seller] and not to Plaintiff-Appellant. Plaintiff-Appellant itself does not argue that [Seller] functioned as a mere mediator within the transaction. In the international commerce of commodities, it is very common to enter into business relations with home companies and receive the delivery directly from one's contractor's international supplier. However, this does not allow the conclusion that a buyer did not contract with the seller as clearly denoted in the contract, but rather with the supplier of the seller.

4.  b) In its appeal (Berufung), Plaintiff-Appellant claims that the Court of First Instance misinterpreted the applicable CISG: Even in the event that the Court would assume a contract being concluded between [Buyer] and [Seller] rather than between [Buyer] and himself, [Seller] had assigned its contractual rights and obligations to him, who impliedly accepted this deference by executing the delivery. Moreover, according to Plaintiff-Appellant, [Buyer], too, had implicitly consented to the claimed assignment by accepting the delivery by Plaintiff-Appellant as well as by accepting Plaintiff-Appellant's bills - as it had been a common practice of [Seller] and its suppliers.

4.  c) The appeal (Berufung) is admissible as far as it concerned a claimed misinterpretation of Swiss national law including international conventions such as the CISG, which had been validly incorporated into Swiss law (Art. 43(1) of the Swiss Law of Obligations (Obligationenrecht; OR). Under Art. 1(1)(a) CISG the Convention applies when it has been brought up within the proceedings that the parties which have their places of business in different Member States of the Convention might have entered into a contract for the sale of goods. As the Italian Plaintiff-Appellant claims to have entered into a business relation with the [Buyer], seated in Zurich, Switzerland, the Convention would be applicable.

Art. 11 CISG provides that a contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance (Art. 14(1), sentence one, CISG).

A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price (Art. 14(1), sentence two, CISG). In case the statements made by and other conduct of a party cannot be interpreted according to the party's actual intent according to Art. 8(1) CISG, Art 8(2) CISG provides that these statements are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances. In determining the intent of a party or the understanding of a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties (Art. 8(3) CISG).

4. d) Plaintiff-Appellant argues that in delivering the wine to [Buyer] it had impliedly offered to obtain [Seller]'s contractual rights and obligations as toward [Buyer]. This presumption cannot be upheld. Plaintiff-Appellant's mere delivery of the goods that [Buyer] had ordered from [Seller] cannot be interpreted as an offer to enter into a contract. To the contrary [Buyer] could rightfully assume that - as it had happened several times before - Plaintiff-Appellant acted as a mere carrier on [Seller]'s behalf, facilitating the execution of [Seller]'s contractual obligations toward him. Consequently, [Buyer]'s acceptance of the delivery does not amount to an acceptance as concerns the claimed deference of contractual rights. The same applies as regards the bills for this transaction, which Plaintiff-Appellant had sent directly to [Buyer]: The fact that [Buyer] did not expressly complain about the bills does by no means indicate a contractual relation between Plaintiff-Appellant and [Buyer]. In denying such an agreement, the Court of First Instance therefore did not misinterpret Swiss national law.

5. In eventu, Plaintiff-Appellant cites the cessio legis in Art. 401 of the Swiss Law of Obligations (Obligationenrecht; OR) to justify the claimed deference of contractual rights.

Under Art. 401 of the Swiss Law of Obligations (Obligationenrecht; OR) a principal may affect segregation of contractual rights and obligations acquired by its agent in its own name but for the account of the principal by fulfilling its own contractual duties as towards the agent. As the ruling in First Instance does not give rise to the assumption that Plaintiff-Appellant had been [Seller]'s agent in the sense required by Art. 401 of the Swiss Law of Obligations (Obligationenrecht; OR) as concerning the delivery at issue, a cessio legis under Art. 401 of the Swiss Law of Obligations (Obligationenrecht; OR) cannot be assumed for this case.

6. Finally, Plaintiff-Appellant argues that [Buyer]'s submission that it entered into a sales contract of the named kind with [Seller], and not with Plaintiff-Appellant, must be considered an abusive exercise of its rights: [Buyer] had admitted that it never received a bill for the delivered goods by [Seller] himself. Hence, if the Court holds Plaintiff-Appellant's appeal to be unjustified, [Buyer] will not have to pay for the received wine at all, which, according to Plaintiff-Appellant, will hardly be in accord with the principle of good faith.

However, the fact that Plaintiff-Appellant forfeited its rights for payment of the delivered wine towards [Seller] cannot be to the detriment of [Buyer], but rather falls within Plaintiff-Appellant's own responsibility to take fair account of its own interests.

7. Therefore. Plaintiff-Appellant's appeal is unjustified.

Under Art. 159(2) of the Swiss Federal Code of Procedure (Bundesgesetz über die Organisation der Bundesrechtspflege; OG) the unsuccessful party is liable to compensate the other part for costs arising from the proceedings. Hence Plaintiff-Appellant must come up with the costs of the appeal (Art. 156(1) of the Swiss Federal Code of Procedure (Bundesgesetz über die Organisation der Bundesrechtspflege; OG)). [....]

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For the purposes of this translation the Defendant Appellee, seated in Switzerland, is referred to as [Buyer].

** Veit Konrad has studied law at Humboldt University, Berlin since 1999. During 2001-2002 he spent a year at Queen Mary College, University of London, as an Erasmus student.

*** Jan Henning Berg is a law student at the University of Osnabrück, Germany, who participated in the 13th Willem C. Vis Moot with the Osnabrück team. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis Moot and 4th Willem C. Vis (East) Moot.

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