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CISG CASE PRESENTATION

Austria 8 August 2005 Appellate Court Linz (Spacers for insulation glass case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050808a3.html]

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

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Case identification

DATE OF DECISION: 20050808 (8 August 2005)

JURISDICTION: Austria

TRIBUNAL: OLG [ = Oberlandesgericht = Appellate Court]

JUDGE(S): Dr. Hütter (Vorsitz), Dr. Neundlinger, Mag. Telfser

CASE NUMBER/DOCKET NUMBER: 3 R 57/05f

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

CASE HISTORY: 1st instance Landesgericht Steyr (4 Cg 113/03f-34) 31 January 2005

SELLER'S COUNTRY: Italy (defendant)

BUYER'S COUNTRY: Austria (plaintiff)

GOODS INVOLVED: Spacers for insulation glass


Headnote

Reproduced from 5 Internationales Handelsrecht (2005) 6:249

     "On the incorporation of general business terms in German language into sales contracts between an Austrian and an Italian company."

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 8 [Also cited: Articles 6 ; 9 ; 14 ; 18(1) ; 74 ]

Classification of issues using UNCITRAL classification code numbers:

8C [Interpretation of party's statements or other conduct: interpretation in light of surrounding circumstances]

Descriptors: Intent ; Standard terms and conditions ; Language issues

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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

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1096&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1087.pdf>; see also 5 Internationales Handelsrecht (2005) 6:249-252; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1096&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Appellate Court (Oberlandesgericht) Linz

8 August 2005 [3 R 5705f]

Translation [*] by Stefan Dietrich [**]

Edited by Todd Fox [***]

The Higher Regional Court Linz, as appellate court, adjudged through Chief Judge Dr. Hütter and Dr. A. Neundlinger and Mag. Telfser in the matter of E**** G**** GmbH [Buyer], represented by Grassner Lenz Thewanger & Partner, lawyers in Linz, versus P**** S.r.l. [Seller], Italy, represented by Dr. Christian Hopp, lawyer in Feldkirch, in a lawsuit involving 283,756.62 [*] on [Seller]'s appeal against the interim judgment of the District Court of Steyr of 31 January 2005, 4Cg 113/03f-34, in a closed session:

[Seller]'s appeal is denied.

The decision on the costs of the appellate proceedings is reserved for the final judgment.

The appeal on points of law is not allowed.

[FACTS AND CLAIMS]

[Buyer], based in Steyr, Austria, is an internationally-active producer of insulation glass used for glass facade construction. When producing insulation glass, it is necessary to fit in spacers, which [Buyer] formerly obtained from a supplier other than the [Seller].

In 1995, P**** M****, an employee of [Seller] based in Italy, approached [Buyer]'s authorized officer, G**** W****, presented spacers produced by [Seller], and sought to establish a business relationship with [Buyer]. Up until the actual begin of the business relationship, several conversations took place between P**** M**** and G**** W**** during which it was clear to both that the business relationship between the parties would be for an extended period and that [Seller] would replace [Buyer]'s previous system provider. [Buyer] inspected the technical aspects of [Seller]'s spacers and they complied with the requirements. By fax of 15 February 1996, [Buyer]'s G**** W**** inquired of [Seller]'s P***** M***** whether a special payment arrangement could be made between the parties, pursuant to which payment of the first half of a month's invoices (from the 1st until the 15th) would be due on the last day of the month, and invoices between the 16th and the last day of the month would be due on 15th of the next month, with a 5% discount on payment between 17 and 30 days net. [Seller]'s P***** M***** confirmed this on the same day.

Thereafter, [Buyer] placed orders with [Seller] by fax. The following information could be found on every order:

"We place an order for the hereafter mentioned goods according to our [Buyer's] purchase terms to the exclusion of your [Seller's] terms."

In part, orders were also clarified in advance by phone, with [Buyer]'s employees inquiring of [Seller] whether a certain quantity of spacers was available, and advising that, if necessary, an order would be placed. In such case a written order was then made by fax each time. It was common between the parties that a telephone order was followed by a written order. [Buyer]'s general purchase terms, which are imprinted on the reverse of [Buyer]'s order form, were not faxed thereby. The order faxes were on forms in which [Buyer]'s general purchase-terms were referred to (with the above information) but on which such terms were not imprinted. In [Buyer]'s general purchase terms under the heading "Jurisdiction, Choice of Law" is the following:

"The place of jurisdiction for both parties is the Court in Steyr with subject matter jurisdiction. Austrian law applies exclusively."

On 3 March 1998, one of [Buyer]'s employees, named Fiala, enquired by phone of [Seller]'s P**** M**** whether [Seller] could deliver black anodized spacers at 23,000 lfm [*] [short for running meters]. After [Seller]'s M***** confirmed, [Buyer]'s F**** ordered these spacers. In accordance with the existing practice between the parties, a written order for 23,000 lfm black anodized spacers was faxed by [Buyer]'s F**** to [Seller] on 3 March 1998. Mentioned on this written order was:

"We place an order for the hereafter mentioned goods according to our [Buyer's] purchase terms under the exclusion of your [Seller's] terms."

Furthermore it was noted:

"Already pre-ordered by phone."

The spacers were ordered at a price of 2.70 ATS [*] per running meter.

By fax of 4 March 1998, the order was amended and the spacer's wall thickness was specified at 0.38. Also in this fax from [Buyer] could be found the information about the purchase-terms, as well as a reference to the advance order over the telephone.

By fax of 5 March 1998, [Seller]'s employee, M**** S****, confirmed this order.

Together with the invoice of 10 March 1998, which contained a reference in Italian to [Seller]'s general sales terms, the anodized spacers were delivered to [Buyer]. The order value of the goods was 62,100.00 ATS, VAT [*] excluded.

Thereafter the spacers were fitted into the insulated glass by [Buyer] and the insulated windows were delivered to the Cologne/Bonn airport.

In November 1999, [Buyer]'s customer, Company S**** GmbH & Co KG, for the first time called to [Buyer]'s attention defects with respect to the spacers of the insulated glass.

By letter of 17 November 1999, [Buyer] forwarded the complaints to [Seller].

Subsequently, while keeping [Seller] informed, [Buyer] and S**** GmbH & Co KG undertook compromise negotiations and the cause of damages was investigated. An expert opinion obtained from the Technical University of Darmstadt showed that ultraviolet-radiation caused a discoloration of the black anodized border-spacers, which however has no influence on the usual lifespan of the insulation glass. The cause of the spacer's discoloration was a mistake in the anodizing process at Company C****, which produced the materials used by [Seller].

[Buyer] agreed to a payment of 263,315.31 to compensate [Buyer]'s customer S**** GmbH & Co KG for all claims linked to the problem of "black spacers."

By action filed with the Court of First Instance on 14 March 2002, [Buyer] sought from [Seller] payment of an overall amount of 283.756.62 plus 5% interest since 17 December 2001. This amount is [Buyer]'s settlement-payment to Company S**** GmbH & Co KG, plus legal costs in the amount of 20,441.31.

[Buyer] alleges that [Seller] should compensate [Buyer] for the damages which resulted from the spacers' discoloration, because [Seller] is responsible for the consequences of processing mistakes made by its subcontractor Company C****.

[Seller] applied for dismissal of the action and argued that under the applicable Italian law [Buyer]'s claims are time-barred and the amounts excessive. Pursuant to 1490 et seq. Codice civile [*], warranty claims and claims for damages from breach of contract are prescribed after one year from delivery of the defective goods. [Seller] further alleged that [Buyer]'s purchase-terms were not agreed upon between the parties and that their content was not disclosed to [Seller].

The Court of First Instance ruled in favor of the [Buyer]'s claim in its interlocutory judgment.

The Court of First Instance ascertained the following facts:

After inspecting the technical features of [Seller]'s spacers, there was a conversation between [Seller]'s P**** M**** and [Buyer]'s G**** W**** in which the basic conditions of the future business relationship between the parties were arranged. During this conversation, [Buyer] gave its general purchase-terms to [Seller] and stated that these are [Buyer]'s purchase-terms. Thereupon, [Buyer] produced an order form upon which [Buyer]'s purchase-terms could be found on the reverse side. The particulars of the general purchase-terms were not discussed.

In its legal appraisal of these facts, the Court of First Instance reported that the parties agreed to the application of [Buyer]'s general purchase-terms for all future business deals. To be incorporated into a contract, general terms and conditions have to become part of the offer according to the intent of the declaring party, and this intent must be recognizable by the other party. If one assumes that [Buyer] submitted its general purchase terms to [Seller] in the course of talks about the start of a long-term business relationship between the parties, then even if the purchase terms were not discussed in detail, that could only mean for [Seller], who wished to start business with [Buyer], that [Buyer] only wanted to start a business relationship with [Seller] based on its own purchase terms. This was also supported by the fact that on written orders [Buyer] always excluded [Seller]'s terms and submitted its offers according to its own general purchase terms. Since it was usual and customary between the parties to repeat telephone pre-orders in writing, with a reference to [Buyer]'s general purchase terms, then these terms have also been effectively agreed upon with regard to the delivery in dispute, which had been pre-ordered by telephone at first. The applicability of Austrian Law arises from [Buyer]'s purchase terms. Thereby the United Nations Convention on Contracts for the International Sale of Goods (CISG) is also applicable. According to Art. 74 CISG, damages suffered by one party as a consequence of a breach of contract by another party consist of a sum equal to the loss, including loss of profit. Such a claim for damages merely requires that there be a causal connection between the breach of contract and the claimed loss; no fault of the party that caused the breach of contract is required.

The black anodized spacers delivered by [Seller] changed color as a result of ultraviolet radiation so that they lost their black color feature. [Seller] must compensate [Buyer] for damages suffered because of this pursuant to Art. 74 CISG.

As the CISG does not contain any statute of limitations or proscription provisions, the provisions on limitation of actions of the ABGB [*] must be consulted. Pursuant to 1489 ABGB, actions for compensation are prescribed after three years starting from the date on which the person that suffered damage becomes aware of the damage and the person that caused it. Although in this case delivery of the products took place in March 1998, [Buyer] did not become aware of the damage caused by the defective anodizing until November 1999. Thus, the limitation period did not begin to run until November 1999. Also, the limitation period has been tolled by the proper filing of the action of 14 March 2002. Thus, [Seller]'s liability is to be adjudged on the merits.

[Seller]'s appeal addresses the above ruling with objections to the factual and legal findings and seeks either dismissal of the action or a remand to the Court of First Instance for a new ruling. [Buyer], in turn, filed for dismissal of [Seller]'s appeal.

[REASONING AND RULING OF THE APPELLATE COURT]

The [Seller]'s appeal is not justified.

1. [Seller] seeks to reverse the conclusion in the Court of First Instance's decision with respect to a conversation between [Seller]'s P**** M**** and [Buyer]'s G**** W**** that took place after a technical inspection of [Seller]'s spacers, during which the general terms and conditions of the future business relationship between the parties were discussed, with [Buyer] submitting its general purchase terms to [Seller] during this conversation stating that they are [Buyer]'s purchase terms and with [Buyer] handing over an order form, upon which [Buyer]'s purchase terms could be found on the reverse side.

[Seller] seeks to have the Court conclude instead, on the basis of the statements of [Seller]'s witnesses P**** M**** and M**** S****, that [Buyer]'s purchase terms were not exchanged between the parties in dispute and that [Buyer]'s purchase terms were not a subject under discussion in the conversations between [Seller]'s employee M**** and [Buyer]'s authorized officer W****. [Seller] desires negative conclusions in regard to these questions.

[Seller] alleges that the Court of First Instance improperly evaluated evidence and, in support thereof, cites consistent statements by witnesses M**** and S**** that [Buyer]'s purchase terms were not submitted to [Seller]. Seller alleges that [Buyer]'s purchase terms were not known to [Seller] at all, and also that [Buyer]'s witness W**** testified that the particulars of the purchase terms were not discussed, and that he considered the transfer of purchase terms to be a formal act; what was important to him was to clarify the payment arrangements, and thus even [Buyer]'s witness W**** attributed no special importance to the purchase terms. In so testifying, [Buyer]'s witness W**** was inconsistent with his description of the circumstances under which the Court of First Instance found an agreement on the terms, by stating on the one hand that the purchase terms were not discussed in particular, and on the other hand that the general conditions for all future delivery terms were clarified.

However, allegations on appeal show neither impropriety on the part of the Court of First Instance nor do they support a valid objection to the consideration of evidence by the Court of First Instance.

The Court of First Instance found that the approach portrayed by [Buyer]'s witness W**** is comprehensible, as [Buyer] had a regular supplier for spacers and was not dependent on a new supplier when [Seller] approached [Buyer] with the request to do business together. Thus the Court of First Instance's conclusion that [Buyer] was in a stronger negotiating position than [Seller] at that time is absolutely plausible.

Considering that both the [Seller] and the [Buyer] intended a long-term business relationship, it is certainly apparent that before taking-up the business relationship the parties would discuss the general conditions of their future long-term cooperation and that on this occasion [Buyer] submitted and handed over its purchase terms to the potential future supplier.

[Seller]'s witness M**** made rather vague statements in response to the question of whether a conversation about the general legal conditions for the future business relationship took place and whether he received [Buyer]'s terms from [Buyer]'s authorized officer G**** W**** on the occasion of the conversation with W****. Although [Seller]'s witness M***** did not deny that this conversation took place, he stated that he was "not able to recall" that W**** submitted [Buyer]'s terms to him, and that he "believed" that no conversations about the general legal conditions of the business relationship took place.

Seller's witness Santopadre did not attend the conversations between [Buyer]'s G**** W**** and [Seller]'s P**** M**** in 1995 or 1996 and did not yet work for [Seller] at that time. This witness did not start working for [Seller] until February 1998, thus after the business relationship between the parties in dispute had already existed for two years. The fact that witness S**** was, according to his own statement, not familiar with [Buyer]'s terms, does not lead to an inference one way or another whether [Buyer]'s purchase terms were submitted by [Buyer] to [Seller] in the course of negotiations on the general conditions of the future business relationship, as portrayed by [Buyer]'s witness G**** W****.

That [Seller]'s witness M**** testified, in conjunction with his statement that [Buyer]'s general purchase terms were not transmitted with the ongoing faxed orders, that he was unaware of [Buyer]'s general purchase terms, leaves open the possibility that witness M**** indeed received [Buyer]'s purchase terms but merely did not read them. The fact that there also exists contrary evidence to one of the findings of the Court of First Instance is insufficient to show an incorrectness of that court's consideration of evidence.

The fact that [Buyer]'s witness W**** regarded the submission of the general purchase terms as being a formal act does not qualify his testimony that he precisely recalled having given [Seller]'s M**** the written general purchase terms and to have told him thereby that they were [Buyer]'s purchase terms.

The correctness of the Court of First Instance's conclusion that [Buyer] wished to effect a replacement of its supplier only on [Buyer]'s own purchase terms, arises not only from the fact that witness W**** pointed out that he normally provides [Buyer]'s purchase terms to new suppliers, but also from the fact that [Buyer] drew up standardized "general purchase terms" and imprinted these on the reverse of its order forms and in each written order included a reference that it ordered under its own purchase terms to the exclusion of the terms of the supplier.

Furthermore, testimony of witness W**** that the clarification of the payment arrangements was important to him and that single issues of the general purchase terms such as jurisdiction or applicable law or similar issues were not gone over at that time, does not contradict his statement that he provided the purchase terms to [Seller]'s P**** M**** in writing and said thereby that they were [Buyer]'s purchase terms.

The supposed contradiction in witness W****'s testimony that -- during the initiation of the business relationship between the parties -- the general conditions for all future services were clarified with [Seller]'s P**** M****, and subsequently that [Buyer]'s purchase terms were not discussed in particular and that the specific issues of the general purchase terms had not been gone over together, is not apparent.

Thus, the allegation in the appeal that the statements by [Buyer]'s witness W**** are less reliable than the statements of [Seller]'s witness M****, cannot be accepted.

Given the existing practice between the parties to always repeat telephone orders in writing with a reference to one's own purchase terms, the absence of a reference to the purchase terms with the telephone order does not argue against support for the Court of First Instance's opinion that [Buyer] required the application of its purchase terms.

[Seller]'s objections as to factual findings and evidence are thus far unsuccessful.

2. As far as the [Seller] further claims that the Court of First Instance should have, "in consideration of the entire behavior of the parties and the whole circumstances of the individual case", established that:

     a) [Buyer]'s orders were carried out by phone and only the subsequent written confirmations contained a written reference to [Buyer]'s terms, without these being included thereon;

     b) [Seller]'s offers, which provided the basis for [Buyer]'s orders, contained terms themselves;

     c) [Seller]'s invoices, which were sent to [Buyer] over several years -- about one per month -- contained [Seller]'s terms which contradicted [Buyer]'s terms;

     d) [Buyer] never objected to [Seller]'s terms which were contained on its offers and invoices,

The following is to be said:

           ad a) No evidence exists for the allegation that all orders of [Buyer] were carried out by phone and this cannot be shown by [Seller]. Such a conclusion would insurmountably conflict with the undisputed finding that after orders had been clarified "to some extent by phone in advance, as [Buyer]'s staffers inquired of [Seller] whether a certain quantity of spacers is available and that if necessary an order would be made". The Court of First Instance already ascertained that the orally cleared or made pre-orders were followed with written fax-orders containing a reference to [Buyer]'s terms, without these being contained thereon.

           ad b) There is no evidence that [Seller]'s offers contained [Seller]'s terms. In fact, [Seller]'s witness P**** M**** stated that [Seller]'s terms for business relations would be imprinted on [Seller]'s transmitted invoices and he referred to the invoices in exhibit 3 and expressly stated that these terms "would, however, only be contained in the transmitted invoices, whereas on [Seller]'s offers the payment arrangements and the reference to free delivery would be mentioned; there are no further arrangements or conditions."

Moreover, no terms of [Seller] can be found on the price list of 4 July 1997 (exhibit 1) presented by [Seller], which was valid with regard to the order disputed in the litigation according to the testimony of [Seller]'s witness M****. Thus the conclusion [Seller] desires in regard to b) could on no account have been made by the Court of First Instance.

           ad c) That [Seller]'s invoices contained [Seller]'s terms has been ascertained by the Court of First Instance concerning the order involved in the litigation. Even if corresponding references could also be found on the remaining monthly invoices sent to [Buyer], this is irrelevant with respect to [Seller]'s legal position.

These terms of [Seller], which are written in Italian and which are hardly legible because of their size, do indeed provide, in contrast to [Buyer]'s orders and [Seller]'s order confirmations, that the customer accepts [Seller]'s terms with his order, according to the unauthenticated translation presented by [Seller]. However, [Seller]'s terms, which are referred to as "general sales terms", do not contain a choice of law clause and thus do not contradict [Buyer]'s purchase terms concerning the applicable law with regard to this contractual relationship.

The conclusion [Seller] desired with regard to d) could therefore not be made because, as already demonstrated, [Seller]'s offers did not contain any terms and [Buyer] expressly contradicted all terms of the supplier in [Buyer]'s written orders expressly ordering according to its own purchase terms under the exclusion of [Seller]'s terms.

[Seller]'s objections as to factual findings and evidence are thus unjustified in whole.

3. In [Seller]'s appeal [Seller] disputes the Court of First Instance's finding that, concerning the delivery that is the subject of litigation, [Buyer]'s general purchase terms were agreed upon.

The question of whether the parties agreed upon [Buyer]'s terms is to be appraised under the CISG; under this Convention a severe standard is to be applied for the inclusion of terms and conditions. The mere reference by an offeror to the application of his terms and conditions is not sufficient. Rather, for an acceptance of the application of general terms and conditions a declaration or other conduct of the recipient is required that expresses consent to the offer; silence or inactivity alone does not constitute an acceptance.

[Seller] alleges that the established facts show neither a statement nor other conduct of [Seller] in the sense Art. 18 CISG whereby [Seller] accepted [Buyer]'s offer with regard to concluding future contracts on [Buyer]'s purchase terms. It is alleged that an express acceptance of the application of [Buyer]'s terms by [Seller] cannot be ascertained; nor can it emanate from an implied acceptance by [Seller] on the basis of the ascertained facts, nor under consideration of the fact that [Seller] on an ongoing basis attached its own terms to offers and invoices, which ran counter to [Buyer]'s terms. [Seller] asserts that in application of the necessary very strict standard regarding implied conduct, an implicit submission by [Seller] to [Buyer]'s purchase terms cannot be assumed.

In response thereto, the following is to be said:

It is correct that the question of the inclusion of [Buyer]'s purchase terms, which provide for the application of Austrian law to the contractual relationship involved in this litigation, is to be evaluated according to the provisions of the CISG, which as part of the Austrian legal order would be included by the choice of law.

If the CISG is applicable by its terms and the parties do not want it to apply, they must explicitly or implicitly agree to exclude it.

Both Italy and Austria are Contracting States to the CISG; in Italy the CISG became effective on 1 January 1988, in Austria on 1 January 1989. The CISG applies to contracts for the sale of goods between parties whose places of business are in different States, when these States are -- as in the present case -- Contracting States according to Art. 1 CISG.

An exclusion of the CISG has not been alleged by either party. According to the prevailing opinion, the CISG can only be excluded by expressly mentioning the exclusion, and thus the choice of the national (here Austrian) law of a CISG-Member does not constitute an exclusion of the CISG when the CISG is applicable in the states of the two contractual partners (7 Ob 275/03x = SZ 2003/175).

Concerning the criteria for the inclusion of standardized terms and conditions, the Supreme Court of Austria has stated in the above-cited decision:

"For the incorporation of standardized terms and conditions the CISG does not set any particular requirements. The necessary rules are therefore, insofar as sales law material is concerned, to be developed from Art. 8 CISG and Arts. 14 et seq. CISG respectively, which fully govern the formation of a contract. Accordingly, in order for standard terms to be incorporated into a contract, they must have become part of the offer according to the intent of the declaring party, and this intent must be recognizable by the other party. This might be accomplished impliedly or by a corresponding reference, or could occur through the negotiations between the parties or from a practice established between them in the sense of Art. 9(1) CISG. Whether standard terms are to be viewed as part of the offer depends on whether the intent to apply the standard terms to the contract is known or ought to have been known to the other party. Whether this is the case depends on the circumstances of the particular situation. A party which desires to contract only according to its own standard terms and conditions requires an unambiguous declaration of that intent. A reference to standard terms that are not enclosed with the offer must be so clear that a reasonable person "standing in the shoes of the other party" would understand it. According to the rules developed from Art. 8 CISG, the standard terms of a party may be viewed as part of the offer by reason of party negotiations or from practices established between the parties (Art. 8(3) CISG. In any event, the addressee must be capable of understanding the content of the standard terms, since a "reasonable person" "of the same kind as the other party" must have understood the statements "in the same circumstances": thus, he must have had a possibility to have knowledge of them, and therefore to understand them. What one cannot reasonably know, one can also not understand and interpret. Hereby can the language that the standard terms are formulated in and in which they are referred to be of importance.

"The German courts allow the effective incorporation of standard terms written in a foreign language, despite the other party's ignorance of that language, if the standard terms are referred to in the language in which negotiations were conducted and in which the contract was concluded and the other party unconditionally accepts. The Austrian Supreme Court has expressly joined this view. Criteria for cases in which the addressee might be expected to have knowledge and understanding of standard terms written in a foreign language are: length, intensity and economic importance of the business relations between the parties, as well as the breadth and use of the language within their society. The more intense and economically important the business relationship becomes, the more can it be expected that the addressee of long and frequently-referenced standard terms written in a foreign language will take measures to understand them, i.e., will ask for a translation to be provided or will attend to such a translation himself. For international businesses which provide standard terms in an international language [Weltsprache], the addressee must immediately notify the other party of his lack of understanding if knowledge of this international language is to be presumed. English, French and even German may be viewed as international languages."

In the present case, in a conversation between [Buyer]'s authorized officer and [Seller]'s assistant at the initiation of the business relationship, during which the general conditions for a future long-term business relationship were being arranged, [Buyer]'s officer handed over to [Seller]'s assistant [Buyer]'s purchase terms. These purchase terms were written in German, thus in an international language -- which moreover was the language of negotiations of the parties -- and [Buyer]'s officer pointed out to [Seller]'s assistant that these were [Buyer]'s purchase terms.

In the subsequent existence of this business relationship, which lasted for more than two years up until the order of March 1998 that is the subject of this litigation, [Buyer] expressly stated in all of its orders - which were either executed in writing or repeated in writing after an oral pre-order - that it was ordering " according to our [Buyer's] purchase terms under the exclusion of your [Seller's] terms."

Because of the reference to [Buyer]'s purchase terms before the start of the business relationship and the simultaneous submission of those terms, as well as the subsequent invariable occurrence over a period of several years of [Buyer]'s orders placed with explicit reference to its own purchase terms -- though without repeated submissions of these terms -- there could be no reasonable doubt on the part of [Seller] when it accepted the order involved in this litigation (initially orally and then according to the existing practice repeated in writing with reference to [Buyer]'s purchase terms) that according to the intent of the [Buyer] its purchase terms were part of the order.

In consideration of the negotiations between the parties and the practices established between them, [Buyer]'s intent to contract only according to its own purchase terms was unmistakably expressed.

[Buyer]'s offer to purchase 23,000 lfm [*] black anodized spacers, at first submitted orally and subsequently in writing by fax of 5 March 1998 according to the practice that originated between the parties, submitted on the basis of [Buyer]'s purchase terms, was accepted by [Seller] without any reservations, additions, restrictions or alterations.

Thus, the Court of First Instance rightly arrived at the conclusion that [Buyer]'s purchase terms, which contain a choice of law clause stipulating Austrian law, became part of the contract.

Since the CISG does not regulate the prescription period of the rights resulting from the sales contract (see 4 Ob 1652/95 with other references in RIS-Justiz [*] RS0090863), this issue is to be referred to the provisions of the ABGB [*] due to the parties' choice of law.

It is no longer disputed in the appeal that the claim for damages pursuant to 1489 ABGB has not expired under its prescription period. Other miscellaneous objections over the grounds of the claim are no longer maintained in the appeal, so that [Seller]'s appeal is collectively unsuccessful.

The costs reserve is based on 393(4) in conjunction with 52(2) ZPO [*].

An appeal on points of law [Revision] is not allowed since the legal questions could be answered by reference to the cited decisions of the Supreme Court.

Higher Regional Court Linz, Dept. 3, on 8 August 2005. Dr. Brigitta Hütter (Chief Judge)


FOOTNOTES

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

Translator's note on other abbreviations: ABGB = Allgemeines Bürgerliches Gesetzbuch [Austrian Civil Code]; Codice civile = [Italian Civil Code]; lfm = laufende Meter [running meters]; RIS-Justiz = Rechtsinformationssystem des Bundes [Austrian government electronic databank for laws and jurisprudence]; VAT = [value added tax]; ZPO = Zivilprozessordnung [Austrian Code of Civil Procedure].

** Stefan Dietrich, Dipl. iur University of Bochum, LL.M. University of London (2004/2005). His fields of law are International Commercial Law and Corporate Law. Since January 2006 articled clerk with the Higher Regional Court (OLG) Hamm.

*** 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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