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CISG CASE PRESENTATION

Austria 14 December 2004 Supreme Court (Laser devices case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/041214a3.html]

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

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Case identification

DATE OF DECISION: 20041214 (14 December 2004)

JURISDICTION: Austria

TRIBUNAL: OGH [ = Oberster Gerichtshof = Supreme Court]

JUDGE(S): Dr. Schlosser (Vorsitz), Dr. Gerstenecker, Dr. Rohrer, Dr. Zechner, Univ. Doz. Dr. Bydlinski

CASE NUMBER/DOCKET NUMBER: 1 Ob 94/04m

CASE NAME: Austrian case citations do not generally identify parties to proceedings

CASE HISTORY: 1st instance LG Wels (GZ 5 Cg 98/03s-17) 25 September 2003; 2d instance OLG Linz (GZ 3 R 205/03t-23) 2 February 2004

SELLER'S COUNTRY: Austria (plaintiff)

BUYER'S COUNTRY: Italy (defendant)

GOODS INVOLVED: Laser devices


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 8 ; 9 ; 14 ; 19 ; 31

Classification of issues using UNCITRAL classification code numbers:

8C2 [Intent (interpretation of party's statements or other conduct): interpretation in light of surrounding circumstances (practices established by the parties)];

9C [Practices established by the parties];

14A [Basic criterion for an offer: intention to be bound in case of acceptance];

19A1 [Acceptance with modifications: generally constitutes rejection and counter-offer];

31A [Place for delivery: contracts involving carriage of goods]

Descriptors: Intent ; Usages and practices ; Offers ; Acceptance of offer ; Delivery ; Incoterms ; Jurisdiction

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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): Austria Supreme Court website [go to <http://www.ris.bka.gv.at/jus/>, check "jus texte" box, enter "10 Ob 94/04m" as "suchworte", click "suche starten"]

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 220

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Case text (English translation)

Queen Mary Case Translation Programme

Supreme Court (Oberster Gerichtshof) of Austria

14 December 2004 [1 Ob 94/o4m]

Translation [*] by Daniel Fritz [**]

Edited by Todd Fox [***]

HOLDING

The appeal on point of law is dismissed. [Seller] must reimburse [Buyer] the costs of the proceedings in the amount of 1,835.82 within fourteen days.

REASONS

[Seller] seeks payment for the delivery of goods in the total amount of 65,413.36. [Seller] asserts that due to an agreement upon the place of performance the trial court had jurisdiction pursuant to Art. 5(1)(b) EuGVVO [*]. [Buyer] had ordered goods -- among others, laser devices -- according to the usual practice between the parties. [Seller] had accepted the [Buyer]'s offer by written confirmation. Usually the confirmation notice contained the terms "EXW W___ [a location in Austria]" and "LIEU DE PAIEMENT ET TRIBUNAL COMPETENT: W___". Even if one assumes no agreement on the place of performance, pursuant to Art. 5(1)(b) EuGVVO together with Art. 31 CISG, W___ was the place where the [Seller] handed the goods to the carrier, thus the place of performance. Moreover, the order confirmation contained an express reference to the Incoterm CPT ("Carriage paid to"), according to which the place of delivery is the place where the goods are handed to the first carrier.

[Buyer] objects to the jurisdiction of the trial court because W___ was neither stipulated nor was it the actual place of performance. The goods were handed to the [Buyer] in Italy and the actual place of delivery was located there. [Buyer] alleges that [Buyer]'s place of business was agreed to serve as place of performance. [Seller] carried out the transport to this destination by contracting with a carrier.

The trial court held that it was competent to hear the case. It ascertained that an established business relationship existed between [Seller] and [Buyer]. During the period between 24 January and 10 June 2002 a total of eleven invoices or confirmation letters, respectively, were exchanged between the parties. All of them contained the term "LIEU DE PAIEMENT ET TRIBUNAL COMPETENT: W___". In addition to this, these documents contained several references to terms of delivery (Incoterms), such that W___ was agreed upon as place of performance. Furthermore, [the Austrian location] W___ is also the forum of the place of performance pursuant to Art. 5(1)(b) EuGGVO.

The appellate court reversed the decision of the trial court and dismissed the claim. It held that the appeal admissible. The rules of the EuGVVO, which prevail over domestic law, were to apply exclusively. Accordingly, the claim must be lodged at the place of residence, unless Arts. 5 - 24 EuGVVO provide otherwise. For sales contracts, Art. 5(1) EuGVVO provides that the place of performance must be determined autonomously by means of actual criteria and all claims arising from the contract may be made at this place. The default rule of Art. 5(1) EuGVVO does not govern if the parties agreed upon the place of performance. The EuGVVO was meant to prevent determination of the place of performance according to the lex causae. One must always first determine whether the parties have agreed upon the place of performance. If they did not do so, the place of performance, unless the goods were already delivered, is where the goods were to be delivered according to the contract. In the event of a successful delivery and [Buyer]'s acceptance of the goods, the actual place of handing over the goods is decisive. The agreement upon the place of delivery, which then also serves as place of performance, can also be made through use of Incoterms delivery clauses. These are established terms for use in contracts, to which reference can be made by stating the full title of the term supplemented by the chosen place, or by reference to the three letter abbreviation offered for every term. However, it is not certain whether Incoterms can be treated as legal custom or trade usage. The validity of a contractual agreement is subject to the applicable substantive law. Since Austria and Italy were Contracting States to the CISG, this Convention governs the agreement here in dispute concerning the place of performance. Pursuant to Art. 14 CISG, a contract is concluded by an offer and its acceptance. The incorporation of standard terms into the contract, such as Incoterms, requires the user's intent to make them part of the offer, which must be known to the other party, and the other party's acceptance. A reply that deviates from the content of the offer is a rejection and constitutes a counter-offer, Art. 19 CISG. To conclude a contract, the counter-offer itself needs to be accepted. Only mutually agreed terms are to have effect.

The [Seller] did not rely upon a choice of forum agreement pursuant to Art. 23 EuGVVO. Rather, the [Seller] assumed the agreement on the place of performance due to the established practice of [Buyer] ordering goods and [Seller] accepting by means of order confirmations, which regularly contained Incoterms referring to [the Austrian location] Wels as the place of performance. In contrast to the eleven invoices on which the payment sought is based, there are only three order confirmations. That is why the assertion of the [Seller] that it replied to the [Buyer]'s offers by order confirmation was only true concerning these three cases. In particular, the oldest partial claim (and invoice) was not accompanied by an order confirmation. A contract cannot be concluded by invoices only; three order confirmations did not yet justify an established practice between the parties, since in multiple cases there is no confirmation for an order. Consequently, one cannot assume that the [Buyer] implicitly consented to a modification of the contract such that the clauses on the invoices and the three confirmations became incorporated into the contract. Thus, the [Seller] failed to prove an effective agreement concerning the place of performance. Accordingly, the default rule of Art. 5(1)(b) applies. The destination of the goods was Italy. The [Seller] gave the shipping order including the Incoterm "CPT" to various carriers. Due to the lack of agreement upon the place of performance, this would mean that pursuant to Art. 31(a) CISG, the place of performance is located at the [Seller]'s place of business. However, for determining the place of performance pursuant to Art. 5(1)(b) EuGVVO, the lex causae is not decisive. The place of performance must be determined autonomously by means of actual criteria. In any event, [the Austrian location] W___ was not the actual place of delivery, which is why the trial court did not have jurisdiction to hear the case. The [Seller]'s appeal is admissible but unfounded.

As to [Seller]'s assertion that by way of incorporating the mentioned Incoterms referring to W____ as place of performance in its confirmations and invoices, the parties have agreed to W___ as the place of performance (especially since these references were not objected to), the Appellate Court correctly held that the invoices and three order confirmations containing the Incoterms do not justify the assumption of an agreement on the place of performance (cf. RdW [*] 2002, 149, RdW 2000, 142; SZ 55/77; SZ 55/106, 6 Ob 529/82 uva; Rummel in Rummel AGBG3 para. 3 to 864a).

Where, as here, the place of performance was not agreed upon separately, then pursuant to Art. 5(1)(b) EuGVVO, the place of performance for obligations under a sale of movable goods is the place in a Contracting State where the goods were delivered or were to be delivered according to the contract. Contrary to Art. 5 EuGVÜ [*], which assigns the determination of the place of performance to the applicable national law, for sales contracts this place is now to be determined autonomously by use of actual criteria. The place of performance in the procedural sense is the place where the characteristic performance of the sales contract was performed or needed to be performed. The place where the performance regarding the goods was in fact executed represents the decisive criteria for ascertaining the international jurisdiction (EVBl [*] 2004/83; 4 Ob 147/03a = RdW 2004, 416; EVBl 2004/29; Czernich, Der Erfüllungsgerichtsstand im neuen europäischen Zuständigkeitsrecht [Performance Venue in the New European Jurisdiction Law], in WBl [*] 2002, 337). The place of delivery is to be understood in the actual sense of the wording. It is the place where the buyer actually accepts delivery of the conforming goods. Usually, this is the place of delivery agreed upon by the parties (Magnus, Das UN-Kaufrecht und die Erfüllungsortzuständigkeit in der neuen EuGVVO [UN Sales Law and Place of Performance Jurisdiction in the New EuGVVO], in IHR [*] 2002, 45).

The parties certainly intended the [Buyer]'s place of business in Italy to be the destination for the goods, and the goods were indeed delivered there. There is no indication that the parties to the contract had chosen the place where the [Seller] handed over the goods to the first carrier to serve as the place of performance; therefore, the destination where the goods were actually delivered serves as the place of performance (see Magnus, supra).

The national rules governing the place of performance for mail-order purchases are irrelevant, since these would be contrary to the provisions of the EuGVVO and would re-introduce the criteria of the lex causae. The governing idea is that the place of performance is determined pragmatically by facts - i.e., autonomously - and is not subject to legal criteria (4 Ob 147/03a; EVBl 2004/83; Kropholler, Europäisches Zivilprozessrecht [European Civil Procedure Law] 7, paras. 38-42 to Art 5 EuGVVO). Insofar as commentators express opposing views -- particularly due to the ill-drafted wording of Art. 5(1)(b) EuGVVO -- (see Piltz in NJW [*] 2002, 789 [793]; Gsell in IPRax [*] 2002, 484 [490 et seq.]; Bajons in FS Geimer, 15 [52]; Leible in Rauscher, Europäisches Zivilprozessrecht [European Civil Procedure Law], paras. 40 et seq., 51 et seq. to Art 5 Brüssel I-VO), the Court cannot follow these views, since these interpretations would be contrary to the intention of the drafters to determine the place of performance for reasons of jurisdiction autonomously and without recourse to domestic substantive law. (see, e.g., Gsell, supra 486 et seq.).

The appeal is accordingly dismissed. The order for costs is based on 41, 50 ZPO [*].


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff-Appellant of Austria is referred to as [Seller] and Defendant-Appellee of Italy is referred to as [Buyer].

Translator's note on abbreviations: EuGVÜ = Europäisches Gerichtsstands- und Vollstreckungsübereinkommen, 1968 [Convention of 27 September 1968 on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters]; EuGVVO = Verordnung über die gerichtliche Zuständigkeit und die Anerkennung und Vollstreckung von Entscheidungen in Zivil- und Handelssachen [Council Regulation on Jurisdiction and the Recognition of Judgments in Civil and Commercial Matters, 44/2001/EC]; EVBl = Evidenzblatt der Rechtsmittelentscheidung [a publication of Austrian jurisprudence]; IHR = Internationales Handelsrecht [German law journal]; IPRax = Praxis des Internationalen Privat- und Verfahrensrechts [German law journal]; NJW = Neue Juristische Wochenschrift [German law journal]; RdW = Österreichisches Recht der Wirtschaft [Austrian law journal]; ZPO = Zivilprozessordnung [Austrian Code of Civil Procedure].

** Daniel Fritz is a graduate of the University of Potsdam, currently studying for the LL M degree at the University of Stellenbosch.

*** Todd Fox received his J.D. from Rutgers University and his LL.M. summa cum laude from the University of Freiburg, Germany. A member of the Bar of the State of Pennsylvania, he is an Associate of the law firm of Gleiss Lutz of Stuttgart, Germany, specializing in commercial arbitration. He is also an Associate of the Institute of International Commercial Law of the Pace University School of Law.

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