Germany 3 August 2005 District Court Neubrandenburg (Pitted sour cherries case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050803g1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 10 O 74/04
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Belgium (defendant)
BUYER'S COUNTRY: Germany (plaintiff)
GOODS INVOLVED: Pitted sour cherries
Reproduced from Internationales Handelsrecht [1/2006] 26
"1. To validly include general terms and conditions it is, apart from the offeror’s intention to include these terms, necessary that the text of these conditions is transmitted to the offeree or made available to him in another way.
"2. The validity of a sales contract is not hindered by the fact that the parties have, with regard to the price, only agreed to fix it 'during the season'."Go to Case Table of Contents
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue: Articles 6 ; 7(1) ; 8 ; 14 ; 18(1) ; 55 [Also cited: Articles 2(a) ; 4(a) ; 31(a) ]
Articles 6 ; 7(1) ; 8 ; 14 ; 18(1) ; 55 [Also cited: Articles 2(a) ; 4(a) ; 31(a) ]
Classification of issues using UNCITRAL classification code numbers:
6A Exclusion or modification of Convention by contract]; 7A3 [Observance of good faith]; 8A ; 8B ; 8C [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct; Interpretation based on objective standards ; Interpretation in light of surrounding circumstances]; 14A1 [Criteria for an offer: definiteness of key conditions]; 18A [Criteria for acceptance of offer]; 55A [Open-price contracts: enforceability of agreements]
6A Exclusion or modification of Convention by contract];
7A3 [Observance of good faith];
8A ; 8B ; 8C [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct; Interpretation based on objective standards ; Interpretation in light of surrounding circumstances];
14A1 [Criteria for an offer: definiteness of key conditions];
18A [Criteria for acceptance of offer];
55A [Open-price contracts: enforceability of agreements]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1097&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (German): Internationales Handelsrecht [1/2006] 26-31; CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1190.pdf>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1097&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
French: Claude Witz, Recueil Dalloz (22 February 2007) 536
German: Mittmann, Internationales Handelsrecht (3/2006) 103-106Go to Case Table of Contents
Queen Mary Case Translation Programme
3 August 2005 [10 O 74/04]
Translation [*] by Mariel Dimsey [**]
Edited by Instituts für ausländisches und Internationales
Privat- und Wirtshaftsrecht der Universität Heidelberg
Daniel Nagel, editor [***]
The District Court of Neubrandenburg held as follows:
|1.||The claim of the Plaintiff [Buyer] is dismissed.|
|2.||The costs of the dispute are to be borne by the [Buyer].|
|3.||The judgment is provisionally enforceable against payment of security in the amount of 115% of the enforceable amount.|
|4.||The value of the dispute for the proceedings is set at EUR 242,582.40.|
The parties dispute whether a sales contract came into existence under the Vienna UN Convention on Contracts for the International Sale of Goods of 11 April 1980 (UN Sales Law/CISG).
The Plaintiff [Buyer] trades in fruit and vegetables. It maintained supply contracts with the trade chain [...] which operates a branch in [...]. The Defendant [Seller] is a company that processes fruit and vegetables.
After a previous business conversation about the delivery of pitted sour cherries, the [Seller] sent the [Buyer] a letter on 13 June 2003 with the following content:
Refering [sic] to our discussion today in witch [sic] you gave us your agreement, we cofirm [sic] you [sic] your purchase in [sic] pitted sour cherries as followed: [...]
|Price:||To be fixed during the season [...]|
|Deliveries:||July 2003 - May 2004|
|Payments:||30 days date of invoice [...]|
|Type of jars:||facet 720ml [...]"|
For the details, see attachment K 1, p. 30 of the file. There was consensus between the parties that all deliveries should be made to [...], to [...] and to [...].
The [Buyer] ordered 50,000 jars of sour cherries from the [Seller] at a price of EUR 0.95 per jar, which the [Seller] delivered directly to [...].
On 15 October 2003, the [Seller] sent the [Buyer] a letter entitled "Contract agreement" with the following content:
Refering to earlier discussions, we cofirm you your purchase in pitted sour cherries as followed: [...]
|Price:||0,90 Euro/jar - DDP Tutow-Germany [...]|
|Deliverles:||1st truck will be delivered November 2003, the rest will be taken as of January 2004 till 31/05/2004 [...]|
Please send us a copy back signed for agreement. An original agreement will be sent by mail, please send it back duly signed and stamped or agreement. [...]"
For the details, see attachment K 2, p. 31 of the file.
By letter dated 20 October 2003, referring to the contract concluded on 13 June 2003, the [Buyer] communicated to the [Seller] that it would negotiate with its customer [...] in January 2004 and that therefore it could not set a fixed price. For the content of this letter, see attachment K 3, p. 32 of the file.
In the time frame between January and July 2004, the [Buyer] accepted a further 130,464 jars of sour cherries from the [Seller] in six deliveries. They were each delivered directly to [...]. The [Seller] charged EUR 0.87 and EUR 0.90 per jar.. For the details, see attachment K 4, pp. 33-38 of the file.
By letter dated 25 August 2004, the [Seller] requested the [Buyer] to accept a further 269,536 jars of sour cherries in accordance with the agreements dated 13 June and 15 October 2003 at a price of EUR 0.90 per jar. For the content of this request, see attachment K 5, p. 39 of the file.
[POSITION OF THE PARTIES]
The [Buyer] is of the opinion that this court has international and territorial jurisdiction under Art.
5(1)(b) of the Brussels Regulation. It argues that a sales contract for the purchase of sour cherries at
a price of EUR 0.90 did not come into existence between the parties. [Buyer] alleges that the
[Seller]'s letters dated 13 June and 15 October 2003 can neither be seen as offers within the
meaning of Art. 14(1) CISG nor as commercial letters of confirmation
, [Buyer] states that the letter
dated 13 June 2003 did not constitute an offer because it lacked a price proposal and that the price
was not implicitedly fixed. The letter also did not constitute a commercial letter of confirmation
because it lacked the necessary contractual content. In addition, a sales contract did not come into
existence on the basis of the letter dated 15 October, either. The [Buyer] did not comply with the
request to sign the alleged offer.
The [Buyer] asks the court to determine that
|-||neither on the basis of the letter dated 13 June 2003 provided as attachment K 1,|
|-||nor on the basis of the letter dated 15 October 2003 provided as attachment K 2|
|-||did a contractual relationship arise in connection with the acceptance of and payment for 400,000 jars of sour cherries.|
The [Seller] asks the court to dismiss the [Buyer]'s claim.
It objects to the jurisdiction of the court. Through incorporation of the standard terms of business of the [Seller], which were printed on the back of each invoice delivered to the [Buyer], the parties had a choice of forum agreement indicating Brussels. In addition, in clause 13.1 of the standard terms of business, the parties had agreed upon the application of Belgian law.
For further details of the arguments, see the letters of the parties including the attachments referred to.
REASONS FOR THE DECISION
The [Buyer]'s claim is only partially admissible and, in the remainder, to the extent that it is admissible, is not justified.
I. The court is not prevented from making a final decision on the merits. It became clear in the oral proceedings that separate proceedings on the admissibility of the claim are not necessary. The parties not only presented arguments on the admissibility of the claim, but also on the merits. A special decision on the admissibility of the claim is therefore superfluous under §§ 280, 303 ZPO [*].
II. 1. The subject-matter and functional jurisdiction of the court is not called into question.
2. The international and local jurisdiction is determined under Council Regulation/EC 44/2001 on the Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters dated 22 December 2000 (Brussels Regulation), which entered into force on 1 March 2002 in the member States of the EU and which, in its sphere of application, replaced the Convention dated 1 February 1973 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Brussels Convention). It prevails over the rules of the ZPO [*] and determines, in its double function, both the international and the local jurisdiction of the court.
a) The sphere of application of the Brussels Regulation is given. The subject matter of the dispute is of a civil law nature (Art. 1(1) sentence one Brussels Regulation). The parties dispute that a sales contract came into existence. Both parties are located in a member State.
b) The jurisdiction of the court follows from Arts. 3(1); 5(1)(a), (b) Brussels Regulation. According to this regulation, a person domiciled in a Member State may be sued on matters relating to a contract in the courts of another Member State located at the place of performance of the obligation in question. A legal person or a company -- such as the [Seller] in the present case -- is domiciled at the place where it has its statutory seat according to Art. 60(1) Brussels Regulation.
aa) According to the leading doctrine, Art. 5(1)(b) of the Brussels Regulation contains an independent determination of the place of performance that is no longer based on the legal place of performance, but rather on the actual or agreed place of performance, that can only be determined by reference to the facts. According thereto, in the case of a sale of goods, the place of performance decisive for the international jurisdiction of the courts is no longer to be determined by the rules of private international law of the court State, as was the case back when the Brussels Convention applied. Solely decisive is the place in a member State to which the goods were delivered or should have been delivered under the contract; in any case, if the place of performance determined in this way lies within the geographical sphere of application of the Brussels Regulation (cf. OLG [*] Dusseldorf, NJOZ [*] 2004, 3118, OLG Report 2004, 204, 208; OLG Cologne, NJOZ 2005, 2043; MünchKommZPO/Gottwald, 2nd edition, current volume, Art. 5 Brussels Regulation para. 5; MünchKommBGB [*] /Huber, 4th ed., Art. 57 CISG para. 28; MünchKommBGB/Gruber, 4th ed., Art. 31 CISG para. 30 et seq.; Geimer/Schütze, Europäisches ZivilverfahrensR, 2nd ed., Art. 5 para. 88).
bb) In the case of a negative claim of determination (negative Feststellungsklage), the jurisdiction of the place of performance is usually the place of the reverse claim for performance (umgekehrte Leistungsklage), here, namely, the place of performance of the acceptance. In the present case, focus would be placed on the obligation to accept the sour cherries and, for this, the United Nations Convention on Contracts for the International Sale of Goods - UN Sales Law - (CISG) would be applied since the disputed contractual relationship of the parties is subject to the United Nations Convention on Contract for the International Sale of Goods - UN Sales Law - (CISG) dated 11 April 1980.
(1) Germany and Belgium are Contracting States. The Federal Republic of Germany ratified this Convention on 5 July 1989 (BGBl. 89, II, 586), the certificate of ratification was filed at the General Secretary of the United Nations on 21 December 1989 (Schwenzer NJW [*] 1990, 602). Thus, the provisions of the CISG are applicable with effect as of 1 January 1991 (Art. 91(4) CISG). Belgium ratified the Convention as well; it has been in force there since 1 November 1997 (cf. Staudinger, BGB, 2005, Intro. to CISG, para. 18 with the table referred to there).
(2) The requirements for the applicability of the provisions of the UN Sales Law (Art. 1(1), Art. 2(a) CISG) are also satisfied. There is a sale of goods between contracting parties whose places of business are in different States - Germany and Belgium. The parties' dispute concerns a commercial sale. In addition, they have not excluded the application of the CISG under Art. 6 of the Convention. In particular, an agreement on the exclusion of the application of the CISG cannot result from clause 13.1 of the standard terms of business of the [Seller]. These were not validly incorporated into the contract and, for this reason, are not part of the contract.
(3) According to the leading doctrine, the incorporation of standard terms of business into a contract subject to UN Sales Law is determined by the provisions on the conclusion of a contract (Arts. 14-18 CISG); recourse to the domestic law applicable under the rules of private international law has been rejected (Staudinger/Magnus, BGB 2005, Art. 14 para. 40 et seq.; MünchKommBGB/Gruber, ibid, Art. 14 para. 27 et seq.) However, the CISG does not contain any particular rules on the incorporation of standardized terms of business into the contract.
Therefore, it is to be determined whether the standard terms of business became a part of the offer by interpretation of Art. 8 CISG. The assumption of incorporation into the contract can be based on negotiations between the parties, practices which the parties have established between themselves, or international usages (Art. 8(3) CISG). Additionally focus must be placed on how a "reasonable person of the same kind as the other party" would have understood the offer (Art. 8(2) CISG). There is consensus that the recipient of a contractual offer, which is intended to be subject to standard terms of business, must have the opportunity to gain knowledge of these in a reasonable way (Staudinger/Magnus, ibid, Art. 14 CISG para. 41; MünchKommBGB/Gruber, ibid, Art. 14 para. 30).
A valid incorporation of standard business terms therefore requires, according to the case law of the German Federal Supreme Court (BGH) (BGH NJW [*] 2002, 370, 371), that the intention of the offeror to incorporate its conditions into the contract can be recognized by the offeree. Furthermore, in uniform law, the user of standard business terms is required to send the text to the recipient or make it otherwise accessible. Since, in light of the different legal systems and customs, there are considerable differences between the respective national standard contractual clauses, the opponent of the user of such clauses often cannot foresee the content of the clauses to which he or she individually agrees; supervision of the content of standard business terms under domestic law (Art. 4 sentence two (a) CISG) is not guaranteed in all countries, either. It is easily possible for the user of such terms to attach the standard business terms, which are usually drafted favourably for him, to the offer. Therefore, it would contradict the principle of good faith in international trade (Art. 7(1) CISG), as well as the general obligation on the parties to cooperate and provide information (Staudinger/Magnus, ibid, Art. 7 CISG para. 47), to burden the contractual partner with a duty to familiarize itself with clauses which were not even sent to it and with the risks and disadvantages of standard business terms stemming from the other side, of which it was not aware.
Standard business terms referred to in commercial communications or in communications between businesses actually become part of the contract under German and non-uniform law, if the customer is not aware of them, but has reasonable means by which to become aware of them -- for example, by requesting them from the user (BGHZ [*] 117, 190, 198 = NJW [*] 1992, 1232); this does not apply to the same extent in international trade, with the consequence that, according to the principle of good faith, the other side cannot be expected to have an obligation to familiarize itself accordingly (BGH NJW 2002 371, 372).
(4) It is undisputed here that the [Seller]'s standard terms of business were neither attached to the letter dated 13 June 2003, nor to the letter dated 15 October 2003. Hence, it is irrelevant that these were printed on the reverse side of each invoice that was sent to the [Buyer]. Decisive for the valid incorporation of standard terms of business in uniform law is the reasonable possibility for the recipient to gain awareness at the time of conclusion of the contract. The subsequent reference to standard terms of business is not sufficient (as it is in domestic law). Standard terms of business that do not appear until the issuance of invoices consequently remain irrelevant (cf. Piltz, NJW 2003, 2060 with references to international case law on uniform law in footnote 73).
To the extent that the [Seller] alleges that the standard terms of business became an ongoing basis of the business within the scope of a continuing business [relationship], this does not hold water either, because such terms were not introduced until after the conclusion of the contract. The invoices, with the standard terms of business printed on the reverse side, did not become a part of the contract because the basis for the contract were the contractual declarations of the parties alone, but not, however, subsequently desired modifications of one of the contracting parties. Finally, the continuing business relationship did not arise until the contractual declaration dated 13 June 2003. A subsequent incorporation of the [Seller]'s standard terms of business based on the invoices issued subsequently to the conclusion of the contract is therefore excluded. They cannot be the basis of a contract that has already been concluded.
cc) According to UN sales law, which is prevalent in the export trade, in cases of doubt, the place of delivery is where the [Seller] hands over the goods to the first independent carrier for transmission to the [Buyer], Art. 31(a) CISG. This rule cannot be applied here, since the parties reached an agreement on the place of delivery deviating from the default rule.
Although, on the one hand, according to the pleadings of the [Buyer], there was no agreement on 13 June 2003 on where, by whom and at whose costs the goods were supposed to be delivered, on the other hand, according to the undisputed pleadings of the [Buyer], it was determined between the parties right from the very beginning that -- in the event that the contract was concluded -- the delivery of the goods was to be made to [...], namely to [...]. The contradiction in the pleadings of the [Buyer] can be disregarded as [Buyer] only wants to use its pleadings concerning the lack of written contractual content in order to establish an invalid agreement. Supplementary oral arrangements do not contradict this assumption. In addition, the [Seller] also made several (partial) deliveries to [...], which it, according to its letter dated 24 August 2004, obviously based on the arrangements of 13 June / 15 October 2003. If, according to the pleadings of the [Buyer], which are decisive for ascertaining the jurisdiction of the present court (cf. Zöller/Vollkommer, ZPO [*], 25th ed., § 12 para. 14) and which are not disputed by the [Seller] and are thereby to be regarded as undisputed, delivery of the goods was supposed to take place at [...] right from the very start, then the place of performance within the meaning of Art. 5(1)(b) Brussels Regulation is [...] and is the forum for the international and local jurisdiction.
c) It is no longer relevant that the [Seller] referred to the rules of INCOTERMS "DDP" in its letter dated 15 October 2003. Hence, it can remain open whether a valid agreement on INCOTERMS, which are usual in international trade, is present. Therefore, it also does not need to be decided whether the use of INCOTERM "DDP" (Delivered Duty Paid) actually contained an agreement on the place of delivery or payment, since, according to uniform law, this INCOTERM is usually interpreted not as an agreement on a different place of delivery, but solely as a costs clause, which does not affect the place of delivery under Art. 31(a) CISG (BGHZ [*] 134, 201, 208; Piltz, ibid, NJW 2003, 2061 with references in footnote 92; OLG Köln, OLGReport Köln 2002, 37).
d) A contrary international jurisdiction is not to be derived from an agreement of the parties on another forum that prevails over the rule of Art. 5(1)(b) Brussels Regulation, either. In particular, a contrary choice of forum clause cannot be derived from the rule in clause 13.2 of the standard terms of business printed on the back of each of the [Seller]´s invoices. As described above, the standard terms of business of the [Seller] did not become a part of the contract. Therefore, it is irrelevant whether the parties reached an agreement on choice of forum sufficient to fulfil the formal and substantive requirements of Art. 23 Brussels Regulation. In any case, they agreed on [...] as the place of performance.
3. The particular admissibility requirements for a negative claim for determination (negative Feststellungsklage) under § 256(1) ZPO [*] are satisfied to the extent that the [Buyer] pleads the lack of existence of a current legal relationship on the basis of the letter dated 13 June 2003.
a) [Buyer]'s statement of claim is to be interpreted to the effect that a sales contract for 400,000 jars of sour cherries at a price yet to be determined during the season never came into existence and that [Buyer] is not obligated to accept a further 269,536 jars. Thus, the statement of claim intends to establish a negative determination of a legal relationship.
b) According to § 256(1) ZPO, with the exception of the genuineness of a certificate, only the determination of the existence or lack of existence of a legal relationship can be the subject matter of a claim for determination. A legal relationship is a connection between two persons, or between one person and an entity established on a legal basis (BGHZ 23, 43; NJW 1996, 452, 453; MDR [*] 2000, 1004, each with further references). The subject matter of a claim for determination can also be individual rights, obligations and consequences arising from a legal relationship, also the scope and content of a performance duty, but not mere elements or preliminary matters of a legal relationship, pure facts, such as the basis of the calculation of a claim or the validity of a declaration of intent (cf. BGHZ 22, 43, 47; 64, 331, 332; MDR 1995, 306; NJW 1996, 452, 453; Zöller/Greger, ZPO, 25th ed., § 256 para. 3). According thereto, every relationship establishing obligations between the parties is a legal relationship, and therefore the contract in question for the international sale of goods dated 13 June 2003 as well.
c) The [Buyer] also seeks the determination of a lack of existence of a current legal relationship, from which the [Seller] is intending to derive both current and future legal consequences.
The [Buyer] also has a legal interest (§ 256 ZPO) in the determination that the [Seller] does not have any claim arising from the contract dated 13 June 2003 for the acceptance of a further 269,536 jars of sour cherries. In the case of negative or denying claims for determination (negative oder leugnenden Feststellungsklagen), it is sufficient for the respondent to seriously assert a claim directed against the plaintiff (BGH NJW 1992, 437; OLG Brandenburg MDR 2004, 1003). This is the case here. By letter dated 25 August 2004, the [Seller] requested the [Buyer] to accept a further 269,536 jars of sour cherries on the basis of the contract dated 13 June 2003 and notified [Buyer] of the filing of a claim against the [Buyer] due to its breach of the acceptance obligation.
4. The claim for determination is not admissible, to the extent that the [Buyer] alleges that, on the basis of the letter of the [Seller] dated 15 October 2003, a contractual relationship for the acceptance and payment of 400,000 jars of sour cherries at a price of EUR 0.90 per jar did not come into existence. In this regard, the particular admissibility requirements for a negative claim for determination under § 256(1) ZPO are not fulfilled.
a) With this part of its claim, the [Buyer] asserts the determination of the denial of a fact that only possibly has legal relevance. Although [Buyer]'s claim primarily aims at determining the lack of existence of a legal relationship established by the letter dated 15 October 2003, namely that a sales contract for 400,000 jars of sour cherries at a price of EUR 0.90 per jar did not come into existence, the issue here is not, however, a legal relationship, but rather simply that the determination of a unilateral fixing of the price regarded to be valid by the [Seller] be denied. However, this is merely an element of a legal relationship, which cannot be the subject matter of a claim for determination, since the dispute between the parties would not be finally resolved by a positive or negative decision on this individual question. Namely, it is conceivable that, although the [Seller] cannot require the acceptance of the sour cherries at a price of EUR 0.90 per jar on the basis of the unilateral declaration of 15 October 2003, it could, however, be entitled to claim acceptance and payment of a purchase price established under Art. 55 CISG, or on the basis of a subsequent agreement.
b) The [Buyer] is also lacking the necessary interest in legal protection (Rechtsschutzinteresse). A legal interest in the determination that an independent contract was not concluded on 15 October 2003 is not present here.
It can be seen from the letter dated 25 August 2004 that the [Seller], contrary to the view of the [Buyer], did not regard the letter dated 15 October 2003 as the decisive declaration for the conclusion of the contract, but rather as a supplement to the contract already concluded on 13 June 2003. In this regard, the [Seller] does not rely on a contract concluded on 15 October 2003 under the uniform sales law, either. In the letter dated 25 August 2004, it refers solely to the price provision named in the letter of 15 October 2003 as a term of the contract. However, the declaration cannot be seen as an indication of an independent conclusion of a contract. The [Buyer] did not assume this, either. Namely, it can be seen from its letter dated 20 October 2003 that the [Buyer] did not want to bind itself to the price named by the [Seller] of EUR 0.90 per jar, since the negotiations with the subsequent purchaser of the sour cherries were yet to be concluded.
III. The [Buyer]'s claim is not justified, as, contrary to the view of the [Buyer], a valid sales contract under UN Sales Law was concluded between the parties on the basis of the confirmation dated 13 June 2003.
1. It can be seen from the correspondence between the parties that they had already agreed on the purchase of 400,000 jars of pitted sour cherries in their oral negotiations on 13 June 2003, with the agreement to set a price during the season. Whose offer actually led to the conclusion of the contract cannot be determined from the pleadings of the parties, since the details of the contractual negotiations were not made available.
The [Seller]'s letter dated 13 June 2003 contained a written confirmation of the oral agreement previously concluded. The introductory sentence reads as follows "Referring [sic] to our discussion of today in witch [sic] you gave us your agreement, we confirm [sic] you [sic] your purchase in pitted sour cherries as followed [sic]:" This letter is neither a "letter of intent", which solely contains a declaration to prepare the conclusion of a contract (cf. Staudinger/Magnus, ibid, Art. 14 CISG para. 15) nor an offer within the meaning of Art. 14(1) CISG. This letter is a commercial letter of confirmation (kaufmännische Bestätigungsschreiben). It refers to previous oral or telephonic contractual negotiations (... discussion today ...) and recites the content of the contract concluded between the parties. It documents the conclusion and the content of the contract. Reasons to suggest that the letter of confirmation contained discrepancies regarding the content of the concluded contract were not brought forward and are not otherwise apparent, either. It is true that according to the rules of UN Sales Law concerning the conclusion of a sales contract -- cf. Art. 18(1) sentence two CISG -- there is no place for a conflict of laws reference to the German rules on the conclusion of a contract in the case of silence in response to a commercial letter of confirmation, unless there is a corresponding international trade usage that was recognizable to the parties or a corresponding custom between the parties (von Caemmerer/Schlechtriem, Komm. zum Einheitlichen UN-Kaufrecht, Intro. to Arts. 14 to 24 para. 6; MünchKommBGB/Gruber, ibid, Art. 18 CISG para. 24 et seq.; MünchKommBGB/Westermann, ibid, Art. 4 CISG para. 4; Staudinger/Magnus, ibid, Art. 8 para. 27, Art. 9 para. 27, Art. 18 para. 13, Art. 19 para. 26). However, the significance of a letter of confirmation as a means of proving the conclusion of a contract remains undisturbed (von Caemmerer/Schlechtriem, ibid, with further references; MünchKommBGB/Gruber, ibid, Art. 18 para. 26).
In the present case, it can be concluded from the letter of the [Seller] dated 13 June 2003 and from its further letters dated 15 October 2003 and 24 August 2004, in which it similarly refers to an agreement of 13 June 2003, that the parties had already agreed on the sales contract on 13 June 2003 and had expressed their intentions to be bound. Support for this view can also be found in the [Buyer]'s letter dated 20 October 2003. In this letter, the [Buyer] states that it concluded a contract with the [Seller] on 13 June 2003 for 400,000 jars of sour cherries. The [Buyer] is bound to this declaration. It is irrelevant for the assumption that a contract has been concluded on 13 June 2003 that [Buyer] did not bind itself to the price named by the [Seller] in its letter dated 15 October 2003 of EUR 0.90 per jar.
2. In particular, the fact that the parties have reached the agreement that the price was to be determined during the season does not affect the validity of the sales contract dated 13 June 2003.
a) Decisive for the conclusion of a valid sales contract is the agreement on the essentialia negotii of the contract. For the valid conclusion of a sales contract, it is necessary, both under the uniform sales law and under the BGB [*], that agreement exists as to the subject matter of the sales contract and the price.
b) There is no doubt as to the agreement on the subject matter of the sales contract. The parties agreed on the type of goods, the quality and the amount, as well as on the type of binding and packaging.
c) The agreement to determine the price of the sour cherries during the season does not affect the validity of the contract.
In uniform sales law, for the conclusion of a contract, it is necessary that the price is sufficiently determined or at least determinable. This requirement is already fulfilled if the price follows from an express or implied reference to price lists, catalogue prices, stock exchange prices, etc. (OLG Rostock IHR [*] 2003, 17 -- price in accordance with the price list of the [Seller], upon the basis of which previous deals had already been concluded --; Staudinger/Magnus, ibid, Art. 14 CISG para. 23). It is also sufficient that the factors necessary to determine the price are present at a later point in time. Even then, the price is determinable.
In the present case, the price for the sour cherries was not determined right from the very beginning, but was, however, determinable. Applying the principles of interpretation of Art. 8 CISG, the wording of the contractual provision "To be fixed during the season" is to be interpreted as an implicit agreement on the season price of the [Seller] for the year 2003, and thereby a determination under the standards of Art. 55 CISG.
The further declarations of the [Seller] dated 15 October 2003 and 24 August 2004 (... contract completion ...) may support the assumption that the parties originally assumed that they were still to supplement the contract regarding the determination of the price, namely that they had intended to leave the determination of the price to a later point in time -- i.e., during the season -- and that, thereby, they consciously left the price provision open, with the consequence that Art. 55 CISG applies. However, further circumstances must be taken into account that refute the existence of a non-determinable price, or a price term that was expressly left open.
The raw product, sour cherries, is typically a seasonal good. Usually, the prices for this product are determined according to the market price on the fruit market for sour cherries, to be determined by the seller of the end product at the time of the purchase during the season. At the time of the conclusion of the contract, a season price for sour cherries had not yet become apparent on the market because the picking season had not yet, or at least had only just begun. Therefore, on 13 June 2003, due to the fact that the season price was only just beginning to establish itself on the market, it was not yet possible to set a particular price. It goes without saying that the "later" price term was obviously to be oriented by the season prices on the market. These cherries were typical market goods. Delivery was supposed to occur from July 2003 until May 2004. The determination was supposed to take place in 2003 as products from the 2003 season were to be processed. If sour cherries from 2002 or earlier should have been delivered, the parties would have provided for this. The 2003 season constituted the decisive point in time for the parties for establishing the price. The reference to the season supports the view that the parties assumed that the price would be established according to the season prices to be obtained on the market. In this regard, the amount of 400,000 jars is also a factor influencing the price determination. Buying in bulk usually leads to a cheaper price. The parties intended on using the season price, which was to be established later, as their basis.
The price that the [Buyer] could have received on the German market in on-selling the goods obtained from the [Seller] plays only a minor role in the contractual relationships of the parties, since the trade risk for the on-sale is borne by the [Buyer]. Therefore, the market price established on the market of the original seller is usually decisive. The original seller usually bases its trade purchases on the market conditions applicable at its location. It can be seen from the entire context of the correspondence, particularly from the letter dated 20 October 2003, that the [Buyer] had obtained the goods for the purposes of on-selling them. It approached the [Seller] located in [...] and bought goods from a foreign market. In this regard, it is not apparent that the [Seller] took the sales initiative.
d) Contrary to the view of the [Buyer], it is irrelevant that the parties did not agree on where, by whom and at whose costs the goods were to be delivered in the contract of 13 June 2003. In this regard, the default legal rules apply. Nothing was brought forward to the effect that agreement should have been reached on these points at the time of conclusion of the contract on the basis of the will of one party, not to mention that delivery to [...] had at least been agreed upon orally between the parties.
3. Even if it was to be assumed that the parties did not reach agreement on the price on 13 June 2003, the claim for determination would still fail, since a contractual relationship concerning the acceptance and payment of 400,000 jars of pitted sour cherries arose on the basis of the confirmation dated 13 June 2003.
a) If the contractual term "To be fixed during the season" was to be interpreted as an agreement that the parties wanted to reach agreement on the price at a later point in time, this would not affect the validity of the contract either.
aa) According to Art. 6 CISG, the parties are entitled to exclude the requirements of Art. 14(1) sentence two CISG and to disregard the minimum requirements, without rendering the offer, or even the contract void (MünchKommBGB/Gruber, ibid, Art. 14 CISG para. 17).
bb) If subsequent agreement does not occur, the court tends to place this case within the sphere of application of Art. 55 CISG, since it is the same as a conclusion of a contract without details as to the price, and the parties have commenced the performance of the contract in any case.
Art. 55 CISG, on its wording, addresses the case where the contract is validly concluded, without expressly or impliedly determining a purchase price or enabling such a determination. This also includes the failure to subsequently agree on the price. For this case, Art. 55 CISG sets out the procedure for determining the price and supplements the contract through the market price rule (cf. Staudinger/Magnus, ibid, Art. 14 paras. 32, 34).
Under German law, a contract in which the parties, instead of determining the price, have reached agreement to the effect that they intend to agree on the price at a later point in time, is to be interpreted in a supplementary manner, and the reasonable price is due (MünchKommBGB/Westermann, 4th ed., 2004, § 433 para. 19).
According to a decision of the International Arbitral Court of the Chamber of Industry and Commerce of the Russian Federation dated 13 March 1995 (cited by Staudinger/Magnus, ibid, Art. 55 para. 8; MünchKommBGB/Gruber, ibid, Art. 55 CISG para. 3), a condition precedent is present if the parties have agreed on a later agreement on the price. In this case, the contract is dependent on the satisfaction of the condition precedent of later agreement and fails if this agreement is not reached. According to this view, the price is not to be determined by way of Art. 55 CISG if the parties have agreed on a later agreement on the price. In this case, the contract is dependent on the satisfaction of the condition precedent of later agreement and fails if this agreement is not reached. (Staudinger/Magnus Art. 55 para. 8 in fine; MünchKommBGB Art. 55 CISG para. 3).
Even if this view was to be followed, it could not be applied to the case to be decided here. The failure of a condition precedent is not given.
b) The parties executed the contract dated 13 June 2003. The [Buyer] accepted (partial) deliveries that the [Seller] made in performance of the contract dated 13 June 2003.
Even if the 50,000 jars of sour cherries at a price of EUR 0.95 per jar, which were undisputedly obtained by the [Buyer] from the [Seller] after 13 June 2003, were not to be regarded as performance on the basis of this contract, it has still been established in any case that the [Buyer] obtained a total of 130,464 jars of sour cherries from the [Seller] in the time frame from January to July 2004 and also paid the purchase price of EUR 0.87 per jar or EUR 0.90 per jar, respectively. In any case, nothing to the contrary can be ascertained from the pleadings of the parties. According to its declaration of 24 August 2004, the [Seller] also made these deliveries as part performance of its obligation arising from the contract dated 13 June 2003. To the extent that the [Buyer] denies this, relying on the different order numbers for each delivery in the invoices, its pleadings are not to be taken into account. In any case, the internal invoice data does not lead to the conclusion that, with respect to the deliveries in question, they comprised individual contracts independent from the contract of 13 June 2003. Nothing was brought forward to give rise to this assumption. In addition, with the exception of the delivery of 8 April 2004, it is not apparent that the parties entered into concrete contractual negotiations before each delivery. Therefore, the court must assume that it was a partial performance of the [Seller]'s obligation arising from the contract dated 13 June 2003. This is also confirmed by the [Buyer]'s remark on the invoice of the [Seller] dated 23 March 2004 (No. 23041198), in which it states: "... from now ...". The remark expresses that further deliveries will follow after being called up by the [Buyer]. Thus it can be concluded that the [Buyer] knew that the [Seller] had performed pursuant to the delivery obligation of a total of 400,000 jars entered into on 13 June 2003.
At the latest, an agreement corresponding to the one described on the season price at the place of the [Seller] came into effect implicitly upon acceptance of the first of the individual partial deliveries and the payment of the corresponding invoices dated 30 January 2004. The [Buyer] accepted the price per unit calculated by the [Seller]. The remark on the invoice dated 23 March 2004 (No. 23041198) also supports the position that the parties were in agreement on a definite season price of EUR 0.90 per jar, at the latest, at the time of the first delivery. The invoice with a unit price of EUR 0.90 per jar contains the remark: "Price ok according to Mr. Ammer, from now EUR 0.87." This last remark shows that the [Buyer] had entered into negotiations with the [Seller] on the agreed price and, as can be seen from the remark and the following invoice, had reached agreement on a price reduction to EUR 0.87 per jar, at least with respect to the following delivery invoiced on 8 April 2004.
To the extent that the [Buyer] wants to rely on its letter dated 20 October 2003, in which it communicated to the [Seller] that it could not yet accept the season price of EUR 0.90 per jar described in the letter dated 15 October 2003, this is to be disregarded owing to the subsequent implicit agreement of the parties on a particular price upon acceptance of the first partial delivery.
[IV.] The decision on costs follows from § 91(1) ZPO [*]; the decision on the current enforceability is based on § 709 ZPO. The court has calculated the value of the dispute in accordance with § 3 ZPO in the amount of the remaining claim asserted by the [Seller] (269,536 x EUR 0.90 = EUR 242, 582.40).
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Buyer] and Defendant of Belgium is referred to as [Seller].
Translator's note on abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGBl. = Bundesgesetzblatt [Federal German Law Gazette]; BGH in NJW = Entscheidungen den Bundesgerichtshofes veröffentlicht in der Neuen Juristischen Wochenschrift [Decisions of the Supreme Court published in the German weekly judicial magazine]; BGHZ = Sammlung der Entscheidungen des Bundesgerichtshofs in Zivilsachen [Collection of Decisions from the German Federal Supreme Court in Civil Matters]; EUR = Euro; IHR = Internationales Handelsrecht [German journal on international trade law]; MDR = Monatsschrift für deutsches Recht [Monthly journal of German law]; MünchKommBGB = Munich Commentary on the German Civil Code; NJOZ = Neue Juristische Online Zeitschrift [New online legal journal]; NJW = Neue Juristische Wochenschrift [German law journal]; OLG = Oberlandesgericht [Higher Regional Court]; ZPO = Zivilprozeßordnung [German Code on Civil Procedure].
** Mariel Dimsey, LL.M., is a Research Assistant and Teaching Assistant at the University of Basel, Switzerland.
*** Daniel Nagel has been a law student at Heidelberg University since October 2002 and an exchange student at Leeds University in 2004/2005.Go to Case Table of Contents