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CISG CASE PRESENTATION

Germany 10 December 2004 District Court Bayreuth (Tiles case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/041210g1.html]

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

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Case identification

DATE OF DECISION: 20041210 (10 December 2004)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 32 O 508/04

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

CASE HISTORY: 1st instance Amtsgericht Berlin Schöneberg (Az. 04-1070217-0-8) 14 June 2004 [affirmed]

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Tiles


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 39(1) ; 53 ; 74 ; 78 [Also cited: Articles 3(1) ; 45(1)(b) ; 59 ; 63(2) ]

Classification of issues using UNCITRAL classification code numbers:

39A11 ; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Degree of specificity required];

53A [Buyer's obligation to pay price of goods];

74A [General rules for measuring damages: loss suffered as consequence of breach];

78B [Rate of interest]

Descriptors: Lack of conformity notice, specificity ; Lack of conformity notice, timeliness ; Price ; 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/1131.pdf>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court (Landgericht) Bayreuth

10 December 2004 [32 O 508/04]

Translation [*] by Jennifer Bryant [**]

DECISION

   I.    The enforcement order of the Local District Court (Amtsgericht) Schoeneberg of 14 June 2004, sig. 04-1070217-0-8, served on 17 June 2004, is upheld.
 
   II.    All further costs of these proceedings are allocated to the [Buyer].
 
   III.    The enforcement based on the aforementioned enforcement order may only be continued by way of security in the amount of EUR 13,000.00.

FACTS

The dispute is about the payment of several deliveries of tiles.

During 2002, the Plaintiff [Seller], a producer of tiles with its seat in Italy, and the Defendant [Buyer], a trader of tiles, concluded several contracts for the delivery of tiles by the [Seller] to the [Buyer]. The CISG is applicable to these contracts. In detail, the contracts were about the following:

   -    On 25 July 2002, the [Seller] delivered 354 sqm. of tiles, type "Spello", at a total price of EUR 1,947.00, which was demanded on the same day by way of bill no. 4,789, payable within 30 days.
 
   -    The delivery of three boxes, each containing 50 tiles, type "Inserto Triangolo Umbris", and of 354 sqm. of tiles, type "Norica 6001", at a total price of EUR 2,135.00 took place on 7 August 2002. It included bill no. 5,232, payable within 30 days.
 
   -    On 2 October 2002, the [Seller] delivered to the [Buyer] 37.17 sqm. of tiles, type "Liberty Almond" at a total price of EUR 313.72. The [Seller] also submitted to the [Buyer] bill no. 6,307, payable within 15 days.
 
   -    On 10 October 2002, the delivery of one box of tiles, type "Batticopa Cumino", as well as of five boxes of tiles, type "Inserto Triangolo Umbria", including bill no. 6,360, payable within 15 days, at a total price of EUR 399.66 took place.
 
   -    On 12 December 2002, the delivery of 798 sqm. of tiles, type "Norica 6001", including bill no.7,953, payable within 15 days, at a total price of EUR 3,894.00 took place.
 
   -    On 19 December 2002, tiles, types "Monocotto Cotto Rustico" and "Battiscopa Cotto Artic", including bill no. 8,302, payable within 15 days, were delivered.
 
   -    On 28 August 2002, the [Seller] delivered 37.17 sqm. of tiles, type "Liberty Almond", at a total price of EUR 323.71, as well as bill no. 5,294. on 17 December 2002, an invoice-related credit in the amount of EUR 464,41 was effected. Since this amount exceeded the amount of bill no. 5,294, the [Seller] set the remaining amount of EUR 150.70 against the earliest account resulting from the bill of 25 July 2002.

The CISG is applicable to the contracts.

The [Seller] alleges that it is entitled to an amount of in total EUR 8,946.68 as laid out in the enforcement order. Furthermore, the [Seller] alleges that it is entitled to damages in the amount of EUR 10.00 caused by pre-trial enforcement orders as well as to the reimbursement of the costs of the disclosure as to the [Buyer]'s business, which it initiated, amounting to EUR 13.05. The [Seller] contends that the [Buyer] is in default of payment.

On 14 June 2004, the Local District Court (Amtsgericht) Schoeneberg decreed an enforcement order, sig. 04-1070217-0-8, which was served to the [Buyer] on 17 June 2004. As to the content of the order it is referred to the print-out from the file of the proceeding pursuant to sec. 696(2) of the German Code of Civil Procedure (ZPO) by the Schoeneberg Court, which can be found in the files of the present proceedings. On 16 June 2004, the [Buyer]'s procurator filed a protest against the enforcement order.

The [Seller] requests that the enforcement order by the Local District Court Berlin-Schoeneberg of 14 June 2004, sig. 04-1070217-0-8, be upheld.

The [Buyer] requests that the enforcement order be set aside and that the claim be dismissed.

The [Buyer] alleges that the claim is unfounded. [Buyer] puts forth that the amount claimed by the [Seller] has already been set off against the [Buyer]'s claims for damages pursuant to sec. 387 of the German Civil Code (BGB). [Buyer] alleges that the deliveries had been partly incomplete, partly damaged, and that they could not have been used. Furthermore, the [Buyer] asserts that it had complaint about the non-conformity, as well as it had demanded equivalent substitutes. But the [Seller] allegedly has not reacted to the complaints.

Complaints were made about the delivery of 25 July 2002, since almost each of those tiles purportedly showed fissures and glaze faults, while some of the tiles were completely broken. The [Buyer] claims damages in the amount of EUR 1,222.00 in regard to this delivery, which are calculated on the basis of 27 working hours for selecting and repackaging the tiles, each in the amount of EUR 35.00, the lump-sum of EUR 85.00 for the disposure of the broken tiles, and the lump-sum of EUR 192.00 for shipping expenses. The [Buyer] argues that the damages have been claimed by bill dated 31 December 2003, which was in accordance with Mrs. ___.

The complaints also comprised the non-conformity of the delivery of 8 July 2002. The asserted total loss as to this delivery amounted to EUR 967.00, calculated on the basis of twenty-two working hours for selecting and repackaging the tiles, each in the amount of EUR 35.00, and the lump-sums of EUR 85.00 for the disposure of the broken tiles, of EUR 102.00 for shipping expenses, as well as of EUR 10.00 of postage. The [Buyer] argues that the damages have been claimed by bill no. 13449 dated 31 December 2003, which was in accordance with Mrs. ___.

According to the [Buyer], also the delivery of 10 February 2002 was non-conforming. The wrong delivery had only been discovered directly on the lot, since the tiles on the top had been in conformity with the order. The [Buyer] claims damages in the amount of EUR 689.90, which are calculated on the basis of four hours of the rent of a crane from the despatch company ___ (delivery twice and pickup twice), each in the amount of EUR 45.00, a price reduction for alternative stocked tiles in the lump-sum amount of EUR 371.30 in order to keep up business with [Buyer]'s client, and the lump-sum of EUR 138.60 of costs for the express. The [Buyer] argues that the damages have been claimed by bill no. 13450 dated 31 December 2003, which was in accordance with Mrs. ___.

Bill no. 6,360 should have been subject to a discount of EUR 159.00 according to an agreement with the representative of the [Seller], which has not happened.

Furthermore, the [Buyer] complained about the non-conformity of the delivery dated 12 December 2002, since the tiles had shown fissures and glaze faults. The alleged loss as to this delivery amounts to EUR 1,733.00, based on forty-one hours for selecting and repackaging the tiles, each in the amount of EUR 35.00, the lump-sum of EUR 135.00 for the disposure of the broken tiles, and the lump-sum of EUR 163.00 of postage. The [Buyer] argues that the damages have been claimed by bill no. 13848 dated 31 December 2003, which was in accordance with Mrs. ___.

Complaints were also made in regard to the delivery of 19 December 2002, since those tiles allegedly had had a difference in size of more than five mm. The purported damages amount in total to EUR 195.70, calculated on the basis one, of the lump-sum of EUR 135.00 for the rent of a crane from the despatch company ___, which the [Buyer] considered necessary, since the tiles at the top were in conformity with the order and the non-conformity therefore had only been discovered directly on the lot, and two, of the costs for freight in the amount of EUR 60.70. The [Buyer] argues that the damages have been claimed by bill no. 13849 dated 31 December 2003, which was in accordance with Mrs. ___.

The [Buyer] denies the claim for damages regarding the pre-trial enforcement order as to the grounds as well as the amount. It also denies the costs of the disclosure about the [Buyer]'s business being unnecessary. Furthermore, it disputes a loss due to the alleged delay, since it contests the delay itself. Therefore, it also denies any interest due to an alleged delay as to grounds an amount.

The [Buyer] asserts that the [Seller] had been immediately and several times notified of every non-conformity on the phone. Furthermore, the [Buyer] alleges to have notified the representative Mrs. ___ as to the deliveries dated 25 July 2002 and 7 August 2002, as well as the sales manager of the [Seller] Mr. ___ in regard to the delivery of 19 December 2002 by fax.

Moreover, the [Buyer] purports that contrary to their agreement, the [Seller] has not stipulated the price of EUR 8.00 per net reduced due to captive use instead of the price of EUR 9.80 in bill no. 5,985 of 26 September 2002. After the [Buyer] submitted its complaints about this to Mrs. ___, Mrs. ___ allegedly offered to balance the price adjustment by a free delivery. Furthermore, the [Buyer] alleges that the delivery was non-conforming, since one sqm. of the tiles was totally broken. Therefore it claims damages amounting in total to EUR 412.31, calculated on the basis of the lump-sum of EUR 285.95 of express costs for the additional delivery of tiles substitute to the breakage, and of the difference in price of EUR 126.36, since a free delivery has never been sent. The [Buyer] argues that the damages have been claimed by bill no. 13111 dated 3 April 2003, which was in accordance with Mrs. ___.

In addition, the [Buyer] claims damages in the amount of EUR 1688.00 due to the non-delivery of two exhibition columns, claimed by bill no. 13130 of 3 April 2003. The [Buyer] predicates that it has been agreed with Mrs. ___ and Mr. ___ that [Buyer] should use columns which [Buyer] already had instead to present the products. The amount claimed by the bill is therefore calculated on the basis of two exhibition columns, each of EUR 1510.00, and the lump-sum of EUR 178.00 of freight costs by the despatch company ___.

Besides, the [Buyer] claims lost profits in the amount of EUR 1,541.39, since its client has avoided the contract and has purchased tiles from a business competitor due to the non-conforming delivery of 16 December 2002. [Buyer] argues that these lost profits have been claimed by bill no. 13850 of 31 December 2003. Furthermore, this client allegedly has warned the other building owners of the development area against purchasing tiles from the [Buyer]. Since at least two of the sixteen building owners would presumably have purchased tiles from the [Buyer], the [Buyer] also claims lost profits as to these potential clients in the amount of at least EUR 1,543.39 for each owner. [Buyer] argues to have claimed these lost profits of in total EUR 3,086.78 by bill no. 13924 of 31 December 2003.

Also, the [Buyer] claims third party damages in regard to the tiler, since the [Buyer] faces a claim for damages in the amount of EUR 90.00 by the tiler, because the non-conforming tiles could not have been installed. The [Buyer] argues to have claimed those third party damages by bill no. 13924 of 30 January 2004.

The [Seller] denies that the deliveries were incomplete or damaged, and to have ever received substantiated notifications of the alleged non-conformities. [Seller] asserts therefore not to know in which way the tiles are non-conforming. Furthermore, [Seller] denies all alleged immediate notifications. [Seller] puts forth that it has only learned about the non-conformities in the answer to the claim for the first time.

As to the exhibition columns, [Seller] denies an agreement between the Parties. The [Seller] usually brings its own columns, which are then charged to the clients' accounts. The [Seller] denies having known about the intention to use the columns in order to present the [Seller]'s tiles.

During the hearing on 24 September 2004, the Parties have agreed that the CISG was applicable to all legal matters possibly connected to the proceedings.

It is referred to the references by the Court during the oral hearings of 24 September 2004 and of 10 December 2004. In regard of any details, it is referred to the respective records.

As to the details regarding the current state of the dispute as well as of the factual matters, it is referred to the memoranda of the Parties, respectively the [Seller's] memoranda of 23 July 2004 and of 6 November 2004, and the [Buyer's] memorandum of 8 September 2004, including all enclosures.

GROUNDS

The [Seller]'s admissible claim is founded.

I. The claim is admissible.

1. The District Court (Landgericht) Bayreuth has jurisdiction both, on the factual (sec. 23 and 71 of the German Code of Civil Procedure (ZPO)) and the local (sec. 12 and 13 of the German Code of Constitution of the Courts (GVG)) basis.

2. The [Seller] as a foreign legal person has legal capacity as to these proceedings pursuant to sec 50(1) of the German Code of Civil Procedure (ZPO) in connection with art. 7(1) of the German Conflict of Laws Rules (EGBGB). Represented by its board of directors, it is also capable of forming a party to these proceedings, sec. 51 of the German Code of Civil Procedure (ZPO).

II. The [Seller]'s claim is also founded.

1. The [Seller] is entitled to the main claim in the amount of EUR 8,946.68 as mentioned in the enforcement order in subsection I. It arises from the conclusion of the respective mixed contracts, sec. 651 of the German Civil Code (BGB). The CISG is also applicable to those contracts, art. 3(1) CISG, as already agreed during the oral hearing on 24 September 2004.

The buyer must pay the contract price when the contract has been concluded, art. 53 CISG.

2. The main claim is not affected by the set-off of the [Buyer], sec. 387 of the German Civil Code (BGB).

      a) The [Buyer] is not entitled to damages due to non-conformity of the goods. In general however, damages due to non-conformity of the goods can be recovered under art. 45(1)(b) in connection with arts. 74 to 77 CISG.

In order to be entitled to any remedy for breach of contract by the seller, the buyer first has the duty to notify the seller of the non-conformity within a reasonable period of time after it has discovered or ought to have discovered the lack of conformity. It thereby has to exactly determine the non-conformity, art. 39(1) CISG. Such qualified notification has not been shown.

The allegation of several notifications by phone is not substantiated enough. The exact specification of those facts which are of importance for showing the notification is necessary on order to enable the [Seller] to verify the alleged complaints (Thomas/Putzo [on ZPO], prel. note to sec. 253, para. 40). In the instant case, it lacks the assertion about when exactly the notification occurred, who has and who has been notified. Also, it has not been shown that the notifications contained a detailed description of the non-conformities. Except for the question who has been notified, the same lack of specification applies to the complaints sent by fax. In addition, it is at least questionable if Mrs. ___ had had reception competency in regard of the faxes.

Furthermore, the bills dated 31 December 2003, which the [Buyer] sent to the [Seller], cannot be considered as qualified notifications, since in any event, they are time-barred. The reasonable period for the notification has expired more than one year after the discovery of the non-conformity (Schlechtriem/Schwenzer, 4th edition 2004, art. 39, para. 17; German Supreme Court (BGH), 30 June 2004, sig.: VIII ZR 321/03).

Additionally, the [Buyer] has not shown at all that it had fixed an additional period of time for the [Seller] to fulfill its contractual obligations as set out in art. 47(1) CISG. Pursuant to art. 47(2) CISG, the buyer may not resort to any remedy for breach of contract, like the claim for damages, as long as such an additional period has not expired.

      b) The [Buyer] is not entitled to any damages in regard to the exhibition columns either. It has not shown the actual use of the columns of the company ___. Also, actual damage can not be inferred, since columns had already been at the [Buyer's] premises. Damages as to if these columns could not be used for the presentation of other tiles are not claimed by the [Buyer].

      c) Moreover, the calculation of the damages set off based on lump-sums is not sufficient. Even if the [Buyer] was entitled to damages - which it is not for the reasons laid out above - the amount of these damages could not be calculated the way the [Buyer] did. Basing the calculation on lump-sum charges per hour, respectively lump-sum freight and shipping costs does not satisfy the prerequisite for the calculation to be substantiated and detailed. Especially as to the shipping costs, the [Buyer] should have shown the concrete extra costs by bringing the bills of the carriers. As to the selection and the disclosure of the tiles, the quantity of the hours taken into consideration should have been explained in more detail. Also, the lump-sums charged per hour should have been calculated on a comprehensible basis and explained in a more detailed way. The [Buyer]'s proof up to now in regard to this - which has already been referred to during the hearing on 24 September 2004 - is not sufficient at all. It does not even fulfill the prerequisites of an estimate pursuant to sec. 287 of the German Code of Civil Procedure (ZPO).

3. The [Seller] is also entitled to interest as mentioned in subsection IV of the enforcement order. Pursuant to art. 59 CISG, the buyer must pay the purchase price on the date fixed by the contract. In the instant case, this would have been within a time frame of 15, respectively 30 days after the delivery. Yet, the [Buyer] has not paid the purchase price. Consequently, the Seller] is entitled to interest, art. 78 CISG. In regard of the amount, it is referred to German law about delays, since the CISG lacks a provision for that. Therefore, the [Seller] is entitled to interest in the amount of five percentage points above the base rate, sec. 288(1) of the German Civil Code (BGB), each as from the expiry of the time frame for the payment set in the contract.

4. In addition, also the ancillary claims as set out in subsection III of the enforcement order are founded. Pursuant to art. 63(2) in connection with art. 74 CISG, the seller is entitled to damages due to a delay of the buyer. The costs for the pre-trial enforcement order as well as for the disclosure about the [Buyer's] business were necessary to persecute the claim for fulfillment. The costs, which constitute damages in the sense of the CISG, are caused by the breach of contract by the [Buyer].

III. The decision as to the costs of these proceedings is based on sec. 91 of the German Code of Civil Procedure (ZPO).

IV. The decision as to the interim enforceability is inferred from sec. 709 sentence three of the German Code of Civil Procedure (ZPO) in connection with sec. 700 of the German Code of Civil Procedure (ZPO).


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Italy is referred to as [Seller] and Defendant of Germany is referred to as [Buyer]. Amounts in the currency Euro are indicated as [EUR].

** Jennifer Bryant, University of Cologne, Faculty of Law since 2003.

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