Switzerland 11 February 2004 Appellate Court Bern (Wire and cable case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040211s1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 304/II/2003/wuda/scch
CASE HISTORY: 1st instance Gerichtskreis VII Bern-Laupen 8 May 2003
SELLER'S COUNTRY: Italy (plaintiff)
BUYER'S COUNTRY: Switzerland (defendant)
GOODS INVOLVED: Wire and cable
Reproduced from Internationales Handelsrecht [4/2006] 149
"The allocation of the burden of proof is, with the exception of Art. 79 CISG, only implicitly governed by the CISG.
"Qualitative and quantitative conformity with the contract is shaped as a responsibility of the seller under the CISG and thus a prerequisite for an undiminished claim for the purchase price. According to Art. 36 para.1 CISG the seller only needs to make sure that the goods conform to the contract up until the point in time at which the risk passes and take responsibility therefore. Arts. 38, 39 CISG prolong the time span in which the seller bears the burden of proof beyond the passing of risk for as long as the buyer may take to fulfil its obligation to inspect the goods and to give notice of unconformity. The seller must show that the goods conformed to the contract at the point in time at which the risk passed if the notice of unconformity was given timely and in accordance with the requirements of art. 39 CISG. A shift of the burden of proof is caused by acceptance of the goods without a notice of defect, so that the buyer needs to show that the goods did not conform to the contract.
"The buyer discovers the unconformity in the sense of Art. 39 para. 1 CISG when a degree of certainty is reached which would cause a prudent buyer to take legal steps. With discrepancies in quality the necessary degree of certainty is reached when the buyer learns of the results of a quality testing."Go to Case Table of Contents
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:
4A [Scope of Convention (issues covered): burden of proof]; 7C [Interpretation of Convention: gap-filling]; 35A [Conformity of goods to contract: quality, quantity and description required by contract]; 36A [Time for assessing conformity of goods: conformity determined as of time when risk passes to buyer]; 38A [Buyer's obligation to examine goods: time for examining goods]; 39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]
4A [Scope of Convention (issues covered): burden of proof];
7C [Interpretation of Convention: gap-filling];
35A [Conformity of goods to contract: quality, quantity and description required by contract];
36A [Time for assessing conformity of goods: conformity determined as of time when risk passes to buyer];
38A [Buyer's obligation to examine goods: time for examining goods];
39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1191.pdf>; Internationales Handelsrecht (4/2006) 149-155
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Queen Mary Case Translation Programme
11 February 2004 [304/II/2003/wuda/scch]
Translation [*] by Jan Henning Berg [**]
Edited by Institut für ausländisches und internationales
Privat- und Wirtschaftsrecht der Universität Heidelberg
Daniel Nagel, editor [***]
CASE BACKGROUND, POSITIONS OF THE PARTIES
1. On 29 April 2002, Plaintiff-Appellant [Seller] requested the Court of First Instance to order Defendant-Appellee [Buyer] to pay Swiss francs [Sfr.] 20,222.06 plus interest on arrears and to pay all costs of the proceedings (pp. 1 et seq.).
In its statement of defense of 13 August 2002, [Buyer] requested the Court of First Instance to dismiss [Seller]'s action and to order it to pay all costs (pp. 35 et seq.).
2. In its judgment rendered on 8 May 2003 (pp. 155 et seq.), the Presiding Judge of the Court of District VII Bern-Laupen, Switzerland, ruled in favor of [Seller] and ordered [Buyer] to pay Sfr. 20,222.06 plus interest of 10% since 29 August 2003, as well as to pay the court fees (item 2) and [Seller]'s legal fees (item 3).
3. [Buyer] appealed against this judgment on 22 May 2003: (a) by filing a request to have [Seller]'s action dismissed; and (b) additionally [Buyer] asked the Court to take further evidence by hearing witness Marco M. and to conduct an inspection of evidence (pp. 163 et seq.).
4. With respect to (b): The main oral hearing took place on 10 February 2004 before the Higher Court (Obergericht) of the Canton Bern, II. Chamber for Civil Matters. The requests for evidence filed by [Buyer] were dismissed. The Court stated that the requests had been filed too late and that [Buyer] had failed to name any justification for its delay. The Court also takes the view that an inspection of evidence at [Buyer]'s storage premises would only produce evidence about the present condition of its storage facilities but not about the condition at the time of the delivery of the goods. Furthermore, an evidentiary inspection by the Court would not prove anything with respect to the question of incomplete delivery of the goods in 2001. The request to hear witness M. has already been rejected in the First Instance as it was made too late without sufficient justification (p. 137). Finally, the requested evidentiary measures need not be considered ex officio in terms of Art. 89 ZPO [*].
With respect to (a): On the merits, [Buyer] requested the Appellate Court to dismiss the action in full. [Seller] requested confirmation of the First Instance judgment.
RULING ON JURISDICTION
5. The Appellate Court (Appellationshof) of the Canton Bern has subject matter, territorial and functional jurisdiction to consider the merits of the present dispute (Art. 7(1) and Art. 335(1) ZPO, Art. 2 Lugano Convention). The judgment of the Court of First Instance was served on [Buyer] on 20 May 2003. [Buyer]'s application for appellate proceedings was submitted to the Court on 23 May 2003. It is therefore within the required time limit. [Buyer]'s application will thus be considered on the merits.
CONSIDERATION OF EVIDENCE, FACTS OF THE CASE
1. No evidentiary proceedings have been conducted in this case prior to the appellate proceedings. The factual findings of the Court of First Instance (pp. 177 et seq.) must be given primary consideration. It is of no practical use to substantially reiterate the same findings at this stage (Leuch/Marbach/Kellerhals/Sterchi, Die Zivilprozessordnung für den Kanton Bern, 5th ed., Bern 2000, Art. 351 para. 3).
The factual background can be summarized as follows:
The parties have had a business relationship for many years. With respect to the dispute at hand, the parties concluded a sales contract for the delivery of wires and cables in 2001. According to an invoice of 26 April 2001, [Seller] was obliged to deliver wires and cables worth Sfr. 35,641.21 to [Buyer] (exhibit 3). On 2 May 2001, these goods were packed onto ten pallets and twenty drums and delivered by Company Z -- "express" by truck -- upon order by [Seller]. The delivery arrived at the [Buyer]'s premises in Ostermundigen on 3 May 2001. Transport Company Z. had picked up the goods at Company V. S.p.A. in Milan, Italy, which constituted most of the total delivery of the [Seller]. Mr. S., who was the driver of the truck for Company Z., signed the bill of lading as he assumed that he had received the entire consignment (exhibit 5), however, he did so without having checked the quantity before. On 3 May 2001 in Ostermundigen, [Buyer]'s employee Mr. M. also signed the bill of lading in relation to the delivery (ibid.). [Buyer] later discovered that only a part of the ordered goods had actually been delivered.
2. It was in dispute between the parties during the First Instance proceedings whether the shortage of delivery had been notified within the required time. The Court of First Instance concluded that there had been no notification on the basis of a finding on p. 187 that Mr. M. accepted the goods on 3 May 2001 without any reservation and that, therefore, the burden of proof in relation to the conformity of the goods had shifted. Thus, the Court of First Instance held that it was up to [Buyer] to demonstrate the incomplete delivery of goods.
In relation to the timeliness of the notification, the Court assumes that [Buyer] received the goods on Thursday, 3 May 2001, and that the first notification of the shortage to [Seller] was given by fax on Tuesday, 15 May 2001 (exhibit 8). Mr. R., representative of [Buyer], has credibly stated that they had found out within the next two days after delivery that something was not right (p. 87 line 8). Witness L., a clerk of the [Buyer], stated that, goods were generally delivered or stored at the latest on the day following the receipt of a delivery (p. 139, line 20). Mr. L has further credibly stated that in the present case, [Buyer] noticed that something was not right with respect to the goods delivered by Company Z some two or three days after the receipt of the delivery, namely, at the time [Buyer] wanted to re-sell a certain part of the goods (p. 143, lines 13-16). On the basis of these coherent and credible statements, the Court assumes that the goods had been examined at the latest three working days after their acceptance, i.e., on Tuesday, 8 May 2001.
Witness Mr. L. further stated that he had notified [Seller] of the shortage in delivery via
telephone prior to 15 May 2001 (p. 143). Until that time, [Buyer] had had a good business
relationship with [Seller], hence the first notification was made via telephone. So far,
there had not been any situations in which problems could not have been sorted out
through oral negotiation (p. 143). After the telephone call, they had first searched their
own premises for the missing part of the delivery. Not until they had been sure that they
had not received the goods did they send the fax to [Seller] on 15 May 2001. [Seller]
agrees that there have been contacts between the parties over the telephone but states that
it could not be established whether these occurred before the sending of the fax or
afterwards. The Court is convinced that [Buyer]'s and witness L's statements are credible
and understandable. In the light of the long-lasting business relationship between the
parties, it is easily understandable that [Buyer] would not notify the shortage immediately
in writing via fax, but that it first sought informal talks -- as had apparently been a usage
between the parties -- and that [Buyer] also looked within its own sphere for the missing
goods. It cannot be assumed that [Buyer] wanted to distort the thus far good business
relationship with [Seller] by way of immediate written and formal notification by
registered letter or fax, thereby confronting the seller with accusations. Instead, it
established contact with its business partner in good faith and seriously attempted to
discover the missing goods. Apparently, it seemed strange and non-intelligible to [Buyer]
that a part of the delivery was missing. In addition, it seems reasonable for the Court to
assume that [Buyer] turned to the third parties, because until that time everything had
worked out well with its Italian business partner
s. [Buyer] assumed that problems in the
course of a move of facilities might have been the cause. This was also communicated to
[Seller] as is evidenced by [Buyer]'s letter dated 22 May 2001 (exhibit 9). The asserted
oral notification via telephone call prior to the sending of the fax is also a credible
assumption in the opinion of the Court.
These circumstances lead to the evidentiary conclusion that the goods were examined on Tuesday, 8 May 2001, at the latest and that [Seller] was notified of the shortage in delivery first via telephone and then on 15 May 2001 in writing via fax. In that respect, it should be pointed out that even an assumption of insufficiently proved telephone calls prior to the fax of 15 May 2001 would not change the legal outcome reached by the Court.
3. It has been impossible to clarify the fate of the missing part of the goods. Even after the evidentiary proceedings, it remains unknown whether Transport Company Z. loaded the whole delivery at Company V. S.p.A. Mr. S., the truck driver for Company Z., signed a receipt for the entire consignment, but he had not conducted any prior check with respect to the quantity. Undisputedly, he then drove straight from Milan to Ostermundigen.There was also no check while passing through customs. The witness statements demonstrate that a quantity check was not carried out, neither during loading in Italy, nor at the customs control, nor during unloading in Ostermundigen. [Seller] itself has never seen the goods and has not brought proof that the shipment has ever been complete. It is, however, established that the whole consignment relating to bill of delivery no. 341 is missing. Thus, not individual parts with respect to various bills of deliveries are missing, but the whole content of one single bill of delivery.
On the basis of the various different delivery confirmations -- in deviation from the conclusion of the Court of First Instance and [Seller]'s opinion -- it cannot be assumed that a complete delivery has taken place. Quite to the contrary, the statements made by the different persons involved indicate that no one has ever counted the goods. It is not even known whether the full consignment has ever been delivered to Switzerland. [Seller] has not brought any proof to the contrary.
REASONING OF THE COURT
1. The present case is of international character, posing the question of applicable law. [Seller] has its seat in Italy, [Buyer] has its seat in Switzerland. The present legal proceedings are concerned with wire and cable which the seller had to deliver to Ostermundigen. The Swiss Federal Statute on Private International Law (IPRG [*]; SR 291) applies. According to Art. 1(2) IPRG, international treaties override the IPRG and, therefore, the United Nations Convention on Contract for the International Sale of Goods (CISG, SR 0.221.211.1) -- to which Switzerland has been a party as of 1 March 1991 -- applies. The CISG governs under its Art. 1(1)(a) contracts for the sale of goods between parties whose places of business are in different States when the States are Contracting States. Italy and Switzerland are both Contracting States to the CISG and therefore it forms the applicable law in the present case.
2. As has been correctly stated by the Court of First Instance, Art. 35 CISG operates on the basis of a uniform concept of non-conformity of the goods, thus embracing deviations of both quality and quantity. The quantitative deviation at hand therefore constitutes a non-performance of the contract in terms of Art. 35 CISG which requires examination and notification (Hans-Josef Vogel, Die Untersuchungs- und Rügepflicht im UN-Kaufrecht, Inaugural-Dissertation 2000, p. 37). Pursuant to Art. 35 CISG, the seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract. The shortage with respect to the agreed quantity in the present case does not constitute a hidden defect, but one that is easily visible and whose examination does not require particular long time limits or complicated procedures.
3. In addition to whether the notification of non-conformity has been made within the time required, a pivotal issue in the present proceedings is to ascertain which party bears the burden to prove which aspects, and therefore, who should bear the consequences of a possible lack of evidence. In subjective terms, the party having the burden of proof bears the burden of factual substantiation; burden of proof in its objective sense means the risk of a party bearing the burden of facts not being sufficiently established.
The CISG addresses burden of proof in express words only in Art. 79(1) CISG. Therefore, the question arises whether burden of proof is a matter governed by the CISG and thus would need to be determined according to Art. 7(1) and (2) CISG, while otherwise recourse to domestic law would need to be made (Vogel, pp. 196 et seq.). The leading doctrine suggests that the CISG contains rules concerning the burden of proof. Schlechtriem/Ferrari state that questions of burden of proof are at least implicitly, indirectly or autonomously addressed within the Convention (Schlechtriem/Ferrari, Kommentar zum Einheitlichen UN-Kaufrecht, 3rd ed., Art. 4 paras. 48 et seq.). This approach is followed by Henninger in his dissertation (Michael Henninger, Die Frage der Beweislast im Rahmen des UN-Kaufrechts, Munich 1995):
"The fact that the CISG does not contain an express reference to the burden of proof, expresses that the burden of proof is seen according to its intrinsic character as a firm part of substantive law. As a conclusion to this, it can be assumed that the objective burden of proof forms an internal gap of the CISG (except for Art. 79(1) CISG), i.e., an issue only impliedly but not expressly governed by the unified law on sales contracts in terms of Art. 7(1) CISG" (Henninger, pp. 181 et seq.).
Thus, a gap in terms of Art. 7(1) CISG exists which is to be resolved primarily in accordance with the general principles underlying the Convention and only secondarily -- in the absence of such principles -- according to the domestic law which is applicable under the rules of private international law.
The Court assents to the leading doctrine and confirms that the burden of proof is governed by the CISG only impliedly -- with Art. 79(1) CISG as an exception. This entails the necessity to consider whether the CISG contains general principles with respect to the allocation of the burden of proof.
According to Schlechtriem/Ferrari, the leading doctrine advocates a rule with respect to the burden of proof similar to the Roman principle "ei incumbit probatio, qui dicit non qui negat", which has also been confirmed by jurisprudence. According to that rule, each party bears the burden of having to prove all factual aspects of a legal provision on which it bases its claims. Additionally, a consideration of equity will be relevant, e.g., that each party has to prove those facts which originate from its own sphere (Schlechtriem/Ferrari, Art. 4 para. 50). According to Schlechtriem, the CISG also embraces the general rule that each party bears the burden to prove the factual aspects which are favorable to itself or which it attempts to claim as prerequisites for a favorable legal provision, respectively (Peter Schlechtriem, Internationales UN-Kaufrecht, Tübingen, 1996, para. 50).
The question of allocation of the burden of proof in proceedings with respect to liability for non-conformity is in dispute as far as the conformity itself is concerned. The leading doctrine and case law (for example, the Commercial Court (Handelsgericht) of the Canton of Zurich in its unpublished judgment of 30 November 1998, HG 930634) are clearly of the opinion that the seller bears the burden of proving the conformity of the goods at the time of the passing of the risk. Henninger concludes that in terms of Art. 35 CISG, regard should be paid to the principle that the seller should bear the burden of proof of having properly fulfilled its obligation to deliver the goods as such a proof would "destroy" the buyer's claim for performance. Schlechtriem/Schwenzer also assume that the seller has to prove the conformity of the goods at the time of the passing of the risk if the buyer notifies the non-conformity pursuant to Art. 39 CISG (Schlechtriem/Schwenzer, Art. 3 para. 49). Therefore, it can be concluded beyond doubt that conformity with the contract is explicitly shaped as a seller's obligation within the CISG (Art. 35) and is thus a requirement in order to establish an unmitigated claim for payment by the seller. Consequently, the seller in principle bears the burden to prove that a delivery of conforming goods has been effected in both qualitative and quantitative terms.
Art. 36(1) CISG underlines that the seller is generally responsible to ensure the conformity of the goods with the contract only until the time of the passing of the risk. The rationale for this is that the seller usually loses his control over the goods when the risk passes to the buyer. The preliminary conclusion is thus that, even according to the rules of the unified sales law, a seller will not be indefinitely burdened with having to prove the conformity of the goods. The burden of proof rests on him only until the time of the passing of the risk. In addition to Art. 36(1) CISG and its relation to Art. 79(1) CISG, additional consideration must be given to the buyer's duty to examine and notify (Arts. 38 and 39 CISG) -- which must be complied with for any claims relating to non-conformity -- in order to determine the exact time of the passing of the risk. These duties are framed according to the interest of the seller to receive timely notice of any complaints with respect to the delivery so that he can appreciate the nature and extent of the buyer's claims. The CISG grants the buyer only a limited time frame to comply with these duties, which is once again in the interest of the seller. These legal advantages for the seller, however, justify and require in turn an extension of the burden of proof, namely, to encompass the period of time which Arts. 38 and 39 CISG grant the buyer to comply with his duties to examine and notify. Otherwise, the fact that the buyer is usually able to examine only after the passing of the risk would mean that the buyer would bear the burden of proving a non-conformity. Hence, the allocation of the burden of proof with respect to the conformity of the delivered goods will be as follows: In case a notification in compliance with the terms of Art. 39 CISG has been made or if the buyer has immediately rejected the goods, the seller has to furnish proof that the goods have been in conformity with the contract at the time of the passing of the risk (Henninger, pp. 221 et seq.).
After an acceptance of the goods without having raised complaints, however, it is for the buyer to demonstrate that the actual condition of the goods deviates from the condition required by the contract at the relevant time of the passing of the risk. "Acceptance without complaint" of the goods refers to a case where the buyer has first accepted the goods and then did not notify the seller of any non-conformity within the time set by law. Such acceptance without complaint, therefore, leads to a reversal of the general rule on the burden of proof under the CISG stated above, i.e., the buyer will then bear the burden to prove that the goods have not been in conformity with the contract. Contrary to the opinion of the Court of First Instance (p. 187), acceptance without complaint does not mean that the buyer is under a duty to examine the goods at the moment of delivery and to notify possible defects. Such practice is unusual and ultimately impossible for practical reasons. This is due to the fact that it is not unusual with respect to storage facilities like the [Buyer]'s that several trucks arrive simultaneously for the unloading of goods and that the drivers ask for a speedy acknowledgement of unloading in order to leave the area as soon as possible. Mr. R. has stated in the First Instance hearing that it was practically impossible to check the quantity of goods immediate upon delivery due to the volume of deliveries and the respective inconveniences (p. 89, lines 23-24). The opinion expressed by [Seller]'s legal representative, who stated that employee M. would have had to make his receipt of the goods conditional upon a future examination in terms of quantity cannot be followed. Such a practice is not usual in the constellation at hand and it would also mean that every receipt of deliveries had to be made conditionally, as goods can only be examined after the delivery but not at the time of receipt. Therefore, receipt of the goods as has occurred through employee M. on 3 May 2001 does not imply an acceptance without complaint in terms of law and will thus not lead to a reversal of the burden of proof to the detriment of [Buyer].
If the buyer has notified the non-conformities within the time frame of Arts. 38 and 39 CISG (and the buyer bears the burden to prove that he has done so), the burden of proof with respect to the conformity of the goods stays with the seller at the time of the passing of the risk. In general, under the CISG the risk passes from the seller to the buyer at the time of shipping (Art. 67(1) CISG). However, in the present case the parties have agreed that the [Seller] should deliver the goods free [Buyer]'s address, custom duties unpaid (contract confirmation upon invoice, exhibit 3). Therefore, since a place of performance other than seller's place of business was stipulated, the risk passed to the buyer at the time of unloading at the place of performance in Ostermundigen in the present case (see in this respect Eugen Bucher, Überblick über die Neuerungen des Wiener Kaufrechts; dessen Verhältnis zur Kaufrechtstradition und zum nationalen Recht, p. 42, in: Berner Tage für juristische Praxis 1990, Wiener Kaufrecht, 1991).
It must be determined in the first place whether [Buyer] has notified the incomplete delivery within the required time limit. Only in that case would the burden to prove conformity of the goods rest with [Seller]. With respect to the notice of non-conformity itself, the buyer bears the burden to prove that such notice has been made, as has already been stated by the court order of the Court of First Instance at item B (p. 79). However, the examination of the goods is not a requirement for issuing a proper notification. It is therefore not necessary to prove that an examination has taken place (Vogel, p. 197).
4. The CISG distinguishes the time limit for examination under Art. 38 CISG from the time limit for notification according to Art. 39 CISG.
Art. 38(1) CISG
The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances.
The act of examination has the purpose to put the buyer in a position to check whether or not the acquired goods are in conformity with the contract. The examination is supposed to prepare for a notification and to rectify asymmetric levels of information between buyer and seller. The extent required for an examination will be determined by the goods and their proposed use, and also by the buyer itself and by the general circumstances at the place where the examination takes place. The actual examination may take from a couple of hours up to several months and can vary between a mere visual check and an in-depth inspection by expert personnel (Vogel, p. 141). The time limit for the examination is as short as the circumstances allow. It is beyond doubt that the buyer has to act in due course. The necessity to act in due course is different for long-lasting, non-sensitive goods and for perishable goods. The present case is not concerned with perishable goods, which would require examination within some hours. Non-perishable goods must be examined by the buyer in due course in terms of quantity and character (Vogel, p. 75). Neither the wording nor the historical background of Art. 38 CISG requires that a strict standard has to be applied to the time limit for the examination. Instead, the buyer should not be burdened with strict legal standards when a breach of contract by the seller is at issue (Honsell/Magnus, Kommentar zum UN-Kaufrecht, 1997, Art. 38 paras. 38 et seq.). The period of time under Art. 38(1) CISG commences when the goods are at the disposal of the buyer at the stipulated location. Art. 38(2) CISG further allows for an examination at the final destination. In the case at hand, the period of time for examination commenced on Thursday, 3 May 2001, i.e., when [Buyer] received the goods in Ostermundigen. It has been specified in legal practice that the usual duration of the period to examine is not more than one week. A shorter duration of between half a week and one week has been proposed by the leading doctrine in Germany, This, however, is too short. In the absence of further circumstances justifying either a shorter or longer period and in the absence of particular practices or usages, the period granted for examination of non-perishable goods should be set as 2-3 weeks (Vogel, p. 75). As a rough yardstick, which needs adjustment in either direction according to the circumstances of each case, a period for examination of one week -- five working days -- can apply (Honsell/Magnus, Art. 38 para. 24).
In this case, the period for examination commenced on Thursday, 3 May 2001, when the goods were handed over to [Buyer] in Ostermundigen and, in light of a sole inspection as to quantity, ran only for five working days at the most. The evidentiary proceedings have established that [Buyer] had taken note of the non-conformity on Tuesday, 8 May 2001, at the latest, when it attempted to resell a part of the goods (p. 143, lines 13-16). This demonstrates that [Buyer] has carried out the examination within three working days. [Buyer] therefore complied with the time limit for examination according to Art. 38(1) CISG.
Art. 39(1) CISG
The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.
The notification is supposed to inform the seller about any non-conformity of the goods. Art. 39(1) CISG merely requires notification of the non-conformity, without making express reference to the form of such a notification. It follows from Arts. 11, 29 and 7(2) CISG that notice may be given in any form. The buyer is thus free to use any form in order to notify a non-conformity (Vogel, pp. 100 et seq.). Furthermore, the notification does not need to be received by the seller, but according to Art. 27 CISG needs only be sent. Therefore, it is sufficient to send the notification within the required time.
With respect to easily visible defects, the period of time for notification commences immediately upon expiration of the short period for examination under Art. 38 CISG, irrespective of whether or not the buyer actually conducted a proper examination (Honsell/Magnus, Art. 39 para. 16). The appropriate period must be calculated separately for each defect. This means that the period for notification of easily perceptible quantitative deviations may have already expired, while the period may still be running in relation to qualitative deviations. The buyer must hence make sure to notify particular instances of non-conformity before the examination of the goods as a whole has been finished. The buyer has discovered the non-conformity in terms of Art. 39(1) CISG if such state of certainty is reached where a prudent buyer would be prompted to commence legal action. With particular regard to quantitative deviations, the required state of certainty exists as soon as the buyer becomes aware of the result of the quantity check (Vogel, p. 111). Public holidays or non-business days at the buyer's lead to an extension of the period to notify. Since the particular duration of the period to notify is being measured by the judge in each case according to the respective circumstances, no coherent jurisprudence has developed. Literature has addressed the duration of the period to give notification as follows:
"An average value for the duration, in the absence of any particular circumstances pointing to extension or shortening, should be assumed as 1-2 weeks" (Vogel, p. 118).
"In order to prevent differences in legal application, one will have to reconcile the existing opinions. A rough average value should therefore be at about one month." (Schlechtriem/Schwenzer, Art. 39 para. 17).
"As a rough and average yardstick a period for notification of one week should apply, subject to extension or shortening according to the circumstances. This means that a duration of about 14 days is applicable as the rough measure for the whole period of examination and notification." (Honsell/Magnus, Art. 39 paras. 21, 22).
In the present constellation, [Buyer] discovered the non-conformity of the goods on Tuesday, 8 May 2001, and gave notice in writing on Tuesday, 15 May 2001. Consequently, even if no consideration was given to the asserted and credible previous telephone complaints, [Buyer] would have made the notification within five working days in any case. On the basis of the scholarly opinions set out above, the notification in the present case was made within the required time. Another argument in favor of a timely notification by [Buyer] is that the CISG in general attempts to avoid too strict time limits. The CISG favors the buyer more than Art. 201 OR [*] does with respect to the requirement for immediate notification, a circumstance that is based on the respective insistence by representatives of developing countries (Peter Schlechtriem, Die Pflichten des Verkäufers und die Folgen ihrer Verletzung, p. 125, in: Berner Tage für die juristische Praxis 1990, Wiener Kaufrecht, 1991). Apart from that, it is not justified for the buyer to suffer from mistakes made by the seller by way of a reversal of the burden of proof caused by strict time limits for examination and notification.
The [Buyer]'s notice, sent via fax on 15 May 2001, has therefore been given within the time required under Art. 39 CISG.
5. The present dispute is thus not about a case of acceptance without complaint which would have led to a reversal of the burden of proof. Therefore, [Buyer] has also not lost its right according to Art. 39(1) CISG to rely on possible non-conformities. Because a notice of non-conformity has been given within the time required, clearly no acceptance of the goods has been expressed. Thus, the regular allocation of the burden of proof under the CISG applies, i.e., the [Seller] continues to bear the burden to prove the conformity of the goods beyond the time of the passing of the risk on 3 May 2001 until the expiration of the period for notification on 15 May 2001. However, this particular proof has not been brought by [Seller]. This constitutes a case in which a legal requirement is not supported by any factual evidence. The objective meaning of the burden of proof is the risk of one party to bear the consequences of that very situation. In the present case, the objective burden of proof is on [Seller]. Since [Seller] has not succeeded in proving that it has effected a delivery of the goods in conformity with the contract, it will not be able to draw any legal benefit from this, and therefore will not be able to demand the purchase price. Failing proof of the complete delivery of the goods, [Seller]'s action must be dismissed.
6. [Seller] can also not rely on the fact that the respective court order of the Court of First Instance has not expressly required it to furnish proof of delivery of the goods in conformity with the contract. It is true that it has been wrongfully ordered by the Court of First Instance that [Buyer] should bring proof that the delivery of [Seller] was not in conformity with the contract. However, in that evidentiary court order it was expressed just as clearly that [Seller] has to prove the facts on which the maturity of its claim and the amount of interest is based (p. 79). "Maturity of its claim" also implies the conformity itself, i.e., in this case, the complete delivery of the goods. [Seller] not only has to prove the maturity of the claim, but also the conformity of its delivery of the goods in order to justify a legal claim. [Seller] cannot argue that it cannot be held liable to bring a proof which has never been requested. [Seller] -- represented by a learned attorney-at-law -- can be expected to be aware of basic principles concerning the allocation of the burden of proof and -- irrespective of any court orders -- it also had to be aware that it would need to prove facts on which it intends to base legal rights. In that respect, the CISG is not at all different from the burden of proof rule embraced by Art. 8 ZGB [*]. The issue of proof has been properly and sufficiently addressed by the Court of First Instance, which requested [Seller] to bring proof that its delivery conformed to the contract and that, if [Seller] failed to do so, it would have to bear the consequences. The right to a fair hearing has not been infringed.
1. [Seller] loses the present dispute in full, [Seller] hence has to bear all court fees of the First and Second Instance proceedings. The court fees of the First Instance proceedings amount to Sfr. 3,400 and are set-off against the advance payments on costs made by both parties. Therefore, [Seller] is ordered to reimburse [Buyer] in the amount of Sfr. 1,700.
The court fees of the Second Instance proceedings are set at Sfr. 3,000. They have to be borne by [Seller] and are set-off against the parties' advance payments. [Buyer] will be able to retrieve Sfr. 1,000. [Seller] is ordered to reimburse [Buyer] in the amount of Sfr. 1,000.
2. [Seller] is furthermore ordered to reimburse any attorneys' fees incurred by [Buyer] in both the First and Second Instance (Art. 58(1) ZPO [*]).
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff-Appellee of Italy is referred to as [Seller] and Defendant-Appellant of Switzerland is referred to as [Buyer]. Amounts in the currency of Switzerland (Swiss francs) are indicated as [Sfr].
Translator's note on other abbreviations: IPRG = Bundesgesetz über das Internationale Privatrecht [Swiss Code on the Conflict of Laws]; OR = Obligationenrecht [Swiss Code on the Law of Obligations]; ZGB = Schweizerisches Zivilgesetzbuch [Swiss Civil Code]; ZPO = Zivilprozessordnung des Kantons Bern [Code on Civil Procedure of the Canton of Bern].
** Jan Henning Berg has been a law student at the University of Osnabrück, Germany and at King's College London. He participated in the 13th Willem C. Vis Moot with the team of the University of Osnabrück. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis and 4th Willem C. Vis (East) Moot.
*** Ph.D. candidate Daniel Nagel has studied law at the University of Heidelberg and at the University of Leeds.Go to Case Table of Contents