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CISG CASE PRESENTATION

Austria 2 February 2005 Landesgericht [District Court] Salzburg (Hydraulic crane case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050202a3.html]

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

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Case identification

DATE OF DECISION: 20050202 (2 February 2005)

JURISDICTION: Austria

TRIBUNAL: Landesgericht [District Court] Salzburg

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 6 Cg 42/04m

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

CASE HISTORY: 2d instance Oberlandesgericht Linz 1 June 2005

SELLER'S COUNTRY: Austria (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Hydraulic crane


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 38 ; 39

Classification of issues using UNCITRAL classification code numbers:

38A [Buyer's obligation to examine goods: time for examining goods]'

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

Descriptors: Examination of goods ; Lack of conformity notice, timeliness ; Lack of conformity notice, specificity

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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/1189.pdf>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landesgericht) Salzburg

2 February 2005 [6 Cg 42/04m]

Translation [*] by Jan Henning Berg [**]

Edited by Institut für ausländisches und internationales
Privat- und Wirtschaftsrecht der Universität Heidelberg
Daniel Nagel, editor
[***]

JUDGMENT

The [Buyer] has to pay EUR 10,389.00 plus 9 % interest since 22 June 2003 within fourteen days and to reimburse the costs of the proceedings in the amount of EUR 3,146.90 (including EUR 432.65 turnover tax and EUR 551.00 cash expenses)

POSITION OF THE PARTIES

[Seller]'s position

Plaintiff [Seller] requests payment of EUR 10,386 alleging that Defendant [Buyer] had ordered a truck crane which had been properly delivered and assembled and that, despite having issued a reminder, the invoice dated 12 June 2003 remained unsettled.

Pursuant to the original contract of sale, [Seller] had been obliged to deliver a hydraulic crane type "G 25 A". Additionally, [Seller] had been obliged to prepare the assembly of a truck "Bonetti F 100 x 4 x 4". [Buyer] had continuously stated that it would take care of the identification of the truck as well as of the procurement of any necessary permissions. Upon [Buyer]'s request, as [Buyer] had needed a wider range of the crane, a crane type "CF 3/A" with an additional telescopic unit was delivered instead of the one agreed upon in the first place. The new crane was assembled on 16 May 2003 and would be of exactly the same design. A bill of delivery had been issued to the [Buyer].

[Buyer] had not claimed any lack of conformity within a period of six months. Rather, [Buyer] had stated that, lacking sufficient customer orders, it had been unable to meet the invoice. Contrary to the provisions of Art. 39 CISG, [Buyer] had failed to give specific notice of non-conformity in due time.

[Buyer]'s position

[Buyer] denies [Seller]'s submissions, [Buyer] requested the dismissal of the action as well as that the costs and expenses be borne by [Seller]. [Buyer] alleged that the truck crane that had been delivered had been unfit for the stipulated and ordinary use and that the crane would not comply with the German Accident Prevention Regulations which had been agreed upon. In order to comply with the aforementioned regulations, the crane needed extensive adaptations which, however, had not yet been completed. The amount claimed by [Seller] would not yet be due.

Instead of a type "G 25 A" crane, which had been ordered in the first place, [Seller] finally had delivered a type "CF 3/A" crane. Consequently, [Seller] had not performed in accordance with the contract. Furthermore, the test log book had not been handed over to [Buyer], meaning that an inspection of the crane before first use could not be documented. Thus, the crane could not be put into operation. It was neither ready to operate nor insurable. The crane could not be installed onto the designated vehicle because the crane was too large to be properly assembled onto the cargo bed. As a consequence of these larger dimensions, the crane's pivot range was wider than agreed upon.

[Seller]'s CEO had been given timely notice of these nuisances on multiple occasions. He had assured rectification of the defects, which however had not been effected.

FACTS

Evidence was taken by hearing the CEOs of [Seller] and [Buyer], Mrs. Margarethe K. and Mr. Alois L. as well as by inspection of document nos. A to C and 1 to 7.

Following the taking of evidence, the Court based its decision on the following facts:

[Buyer] ordered from [Seller] a crane "Negrisolo Hydraulik Type G 25 A" with a range of 4.7 meters, a net lifting force of 280 kgs (lifting force at one meter: at least one ton). The crane was to be equipped with hydraulic scales for a rotator and a wood gripper as well as a hydraulic clutch. Including the preparation for assembly of the Bonetti truck "F 100 x 4 x 4", a net purchase price of EUR 8,553 was agreed upon. Payment should be due after receipt of the invoice (exhibit 1, witness statement by [Seller]'s CEO).

After the contract had been concluded, [Buyer] approached [Seller]'s CEO with its request for assembly of an additional telescopic unit in order to effect a wider range of the crane. The latter pointed out to [Buyer] that this would necessarily mean ordering a different type of crane. The parties agreed upon a revised purchase price of an additional EUR 470. [Seller] also pointed out to [Buyer] that the new crane had a different overall height (witness statement by [Seller]'s CEO).

On 12 June 2003, the truck was deployed at [Seller]'s works for assembly of the crane, which was additionally ordered without having agreed on any particular price (witness statements by [Seller]'s and [Buyer]'s CEOs and Mr. Alois L.). During assembly, [Buyer] was directly at the site and did not give notice of any lack of conformity. In addition, [Buyer] failed to give notice after the crane had been tested during assembly (witness statements by [Seller]'s CEO). [Buyer] declared that it needed the crane in order to pull trees, bushes and other plants out of private gardens (witness statements by [Seller]'s CEO, Mr. Alois L.).

The truck crane type "CF 3/A" which was finally delivered is of the same design as type "G 25 A". However, it is a more powerful type. The range of the delivered crane measures 5 meters (witness statements by [Seller]'s CEO, exhibit 3). When [Buyer] received the crane, it also signed the bill of delivery on which the type of crane, its lifting force of 1,000 kg per meter, its overall height of 2.58 meters according to the negotiations dated 12 February 2003 and the additional telescopic unit for a range of 5 meters were mentioned (exhibit A).

The invoice dated 12 June 2003, which [Buyer] had received, contains a total gross price of EUR 10,386 (consisting of EUR 8,553 for truck crane type "CF 3/A", plus EUR 470 for an additional telescopic unit, plus twice EUR 681.20 for crane assembly; see exhibit 3). This invoice has not been met by [Buyer] (witness statements of both parties). The crane was assembled at an hourly rate of EUR 52.40 (statement by [Seller]). [Seller]'s CEO had -- at various occasions -- requested settlement of the invoice (exhibit A) by telephone. By letter dated 4 December 2003, [Seller] issued an additional reminder (statements by [Seller], exhibit B).

The instruction manual was handed over to [Buyer] concurrently with the delivery of the crane. Another copy was sent to [Buyer] and loading weight charts were handed over upon request (statements by [Seller], exhibit 5). The EC [*] Declaration of Conformity (exhibit 6) was handed over to [Buyer] during delivery of the crane (statements by [Seller] and [Buyer], exhibit 6). An EC Declaration of Conformity is issued by the manufacturer. [Seller]'s CEO did not make any amendments to the declaration in the present case (statements by [Seller]). Since the crane in question is intended for agricultural use, there is neither a testing log book nor anything similar to it. Therefore, it cannot be definitely determined whether the crane has actually been tested. Consequently, a testing log book has not been handed over to [Buyer] (statements by [Seller]).

There have never been any complaints by [Buyer] that the crane was not capable of lifting weights between 400 and 500 kgs (statements by [Seller]). It is true that on one occasion, [Buyer] contacted [Seller] with regard to the sealing of a lift cylinder. [Seller] assured [Buyer] that the sealing will be ordered, but [Buyer] never picked it up (statements by [Buyer]). Any further defects have not been given notice of by [Buyer], neither in writing nor orally. Moreover, [Buyer] did not request any improvement or rectification of defects (statements by [Seller]).

Before the conclusion of the contract, [Seller]'s CEO had pointed out to [Buyer] that the crane was not intended for commercial use (statements by [Seller]).

Subsequently, [Buyer] tried to have the crane permitted for such use in Germany. By letter dated 24 April 2004, the responsible expert informed [Buyer] that the crane might only be used if there was a testing log book as well as an in-depth instruction manual and a loading weight chart. Furthermore, an EC Declaration of Conformity was required (exhibit 4).

THE COURT'S EVALUATION OF EVIDENCE

Insofar as the taking of evidence has not led to any contradictions, reference is made to the items of evidence mentioned above. In particular, the change of order and delivery from type "G 25 A" to type "CF 3/A" was confirmed by both parties. [Buyer] further confirmed to have ordered the assembly of the crane. [Buyer] admitted that it had received the invoice of exhibit 3 and that it has not been settled. Concerning the required lifting force, reference is made to the statements made by [Seller]'s CEO, which correspond to the bill of delivery (exhibit A) that was signed by [Buyer].

With reference to those defects that have actually been given notice of, the Court follows the statements made by [Seller]'s CEO, who pointed out that the notice had only referred to a sealing for the lift cylinder. Even [Buyer] has stated that [Seller] had assured procurement of the sealing. There are no substantial contradictions following the documented evidence. [Buyer] confirmed to have received all documents except for the testing log book. Regarding this testing log book, the CEO of [Seller] credibly stated to have informed [Buyer] about the fact that the crane was not suited for commercial use. This corresponds with other statements made by [Seller], [Buyer] and witness Mr. Alois L., according to which [Buyer] mentioned that the crane was intended to be used to pull out trees and bushes from private gardens. [Buyer]'s statements are contradictory insofar as it stated, on the one hand, that the handing over of a testing log book had been agreed upon at the time of the conclusion of the contract because it had expressly pointed out that the crane was intended for commercial use. On the other hand, [Buyer] stated that it was not until the inspection of the crane by an expert after its delivery that it became aware of the necessity of a testing log book.

[Buyer] argued that it had communicated by way of phone calls that the crane would not even lift a pallet of stones (phone call of 19 May 2003), that the exhaust cylinder would abut upon a screw and that the arm would not pivot. However, these submissions are not credible. First, [Buyer] alleged that the truck crane would not be fit for the stipulated ordinary use and would not conform to the German Accident Prevention Regulations. After being requested to sufficiently specify the defects, [Buyer] argued that the delivered crane had been of another type than the type it had contracted for and that it had not received the testing log book, meaning the crane could not be put into operation. [Buyer] alleged that, due to these defects, the crane was neither ready to be used nor insurable. Furthermore, the crane could not be installed onto the designated vehicle. The pivot range did not fulfil the contractual requirements. Therefore, [Seller] delivered a mere aliud. The defects mentioned by [Buyer] in the course of the oral proceedings have not been properly communicated to [Seller]. Witness statements made by Mrs. Margarethe K. and Mr. Alois L. did not convince the Court: The wife of [Buyer]'s CEO could not provide specific information concerning the phone calls, Mr. Alois L. only stated that [Buyer], during a phone call in the summer of 2003, had urged for additional documents regarding the German Accident Prevention Regulations and stated that the crane would lock during pivoting.

REASONING OF THE COURT

The UN Sales Law (CISG) is to be applied to the dispute pursuant to its Art. 1(1)(a).

According to 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. If the contract involves carriage of the goods, examination may be deferred until after the goods have arrived at their destination, Art. 38(2) CISG. In accordance with 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. In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee (Art. 39(2) CISG).

The length of the short period for examination pursuant to Art. 38(1) CISG is to be determined considering the size of the buyer's company, the type of goods, their complexity or deleteriousness or their character as seasonal goods, the amount of goods sold, the effort required for examination, and so forth. In order to determine the reasonable time under Art. 39(1) CISG, all objective and subjective circumstances of the individual case must be taken into account, among them the buyer's commercial and personal position, parameters of the particular goods, the amount of goods sold and the type of remedy exercised. In general, the time frames applied are less strict than those under 377 HGB [*], which requires immediate notification. The reasonable time of Art. 39 CISG is not uniform in every case. It must be determined with due consideration to the individual circumstances. The BGH [*] has ruled as to the period's length (RIW [*] 1995, 595 = JR [*] 1996, 23) that it should not be too extensive in light of the parties' interest in respect to an early settlement of their legal relations. It held that a period of four weeks was already very generous for a buyer. The OGH [*] held that a period for examination and notification of fourteen days in total seemed appropriate if there are no particular circumstances that would point to a longer duration. The two-year term under Art. 39(2) CISG is only of relevance if the buyer could not have conducted an earlier examination or if -- despite earlier examination -- the non-conformity could not be determined or if -- despite such determination -- it was hindered from issuing a notification earlier (cf. 2 Ob 191/98x). Additionally, the notification must be sufficiently definite, i.e., the buyer must specify the nature of the lack of conformity. Flat statements or objections formulated in a general way do not fulfil the substantive requirements that are applied to notifications in order to allow the seller to reasonably react. Pursuant to the leading doctrine, however, it is sufficient if a seller receives the essential results of a proper examination, so that it has an overview of the defects (cf. 7 Ob 301/01t).

Based on the factual findings and the cited jurisprudence there was no sufficiently specific notice within a reasonable time under Art. 39(1) CISG. Therefore, the claim has to be dismissed.

Considering the lack of any legally significant notice of non-conformity, the request for an expert opinion on the conformity of the goods had to be dismissed, as well. Failing any such notice, [Buyer] cannot rely on a breach of contract. It loses the right to exercise all possible remedies arising out of a breach of contract by the seller.

The decision on costs and expenses is based on 41(1) ZPO [*].


FOOTNOTES

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

Translator's note on other abbreviations: BGH = Bundesgerichtshof [German Federal Supreme Court]; EC = European Community; HGB = Handelsgesetzbuch [Austrian Code on Commercial Law]; JR = Juristische Rundschau [Law Journal]; OGH = Oberster Gerichtshof [Austrian Federal Supreme Court]; RIW = Recht der Internationalen Wirtschaft [Journal on International Commercial Law]; ZPO = Zivilprozessordnung [Austrian Code of Civil Procedure].

** Jan Henning Berg is a law student at the University of Osnabrück, Germany and participated in the 13th Willem C. Vis Moot with the team of the University of Osnabrück.

*** Ph.D. candidate Daniel Nagel has studied law at the University of Heidelberg and at the University of Leeds.

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