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CISG CASE PRESENTATION

Germany 21 June 2006 Lower Court Landsberg (Dust ventilator case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060621g1.html]

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

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Case identification

DATE OF DECISION: 20060621 (21 June 2006)

JURISDICTION: Germany

TRIBUNAL: AG Landsberg am Lech [AG = Amtsgericht = Lower Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 1 C 1025/05

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

CASE HISTORY: 2d instance Oberlandesgericht München 17 November 2006 [affirming]

SELLER'S COUNTRY: Austria (defendant)

BUYER'S COUNTRY: Germany (plaintiff)

GOODS INVOLVED: Dust ventilator


IHR headnote

Reproduced from Internationales Handelsrecht (1/2008) 27

"An avoidance of a sales contract may still be declared three weeks after the last of a number of attempts to; rectify a defect has failed. If the seller is in default with his obligation to take back the goods, the buyer's rights are not limited by the principle of concurrent restitution contained in Art. 81(2) CISG."

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 27 ; 39(1) ; 48 ; 49 ; 74 ; 84 [Also cited: Article 45 ; 46(3) ]

Classification of issues using UNCITRAL classification code numbers:

25B [Definition of fundamental breach: substantial deprivation of expectation, etc.];

27A [Delay or error in communication: dispatch of communication by appropriate means (to address previously provided by seller];

48A [Cure by seller after date for delivery: seller's right to remedy any failure to perform];

49A ; 48B [Buyer's right to avoid contract (grounds for avoidance): fundamental breach; Buyer's loss of right to declare avoidance after delivery: failure to avoid within periods specified in arts. 49(2)(a) and (b)];

74A [General rules for measuring damages: loss suffered as consequence of breach (includes legal costs);

84A [Restitution of benefits received: seller bound to refund price must pay interest]

Descriptors: Communications, risk of ; Cure ; Repair ; Avoidance ; Damages ; Legal costs ; Restitution ; Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1493.pdf>; Internationales Handelsrecht (1/2008) 27-28

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Lower Court (Amtsgericht) Landsberg am Lech

21 June 2006 [1 C 1025/05]

Translation [*] by Veit Konrad [**]

JUDGMENT

  1. Defendant [Seller] must pay to Plaintiff [Buyer] 1,811.88 plus interest of 5 percentage points above the applicable base lending rate issued by the European Central Bank, since 25 November 2005.

  2. [Seller] bears the costs of the proceedings.

  3. The judgment is provisionally enforceable if Plaintiff [Buyer] provides a security of 120% of the amount [Buyer] intends to enforce.

FACTS OF THE CASE

[Buyer] claims against [Seller] for reimbursement of the purchase price and damages for a dust ventilator that had been delivered by [Seller].

In 1998, [Buyer] purchased a card box shredder from [Seller]. Thereafter, [Buyer] placed a phone order for a dust ventilator intended to be used with the shredder, which [Seller] delivered and set up at [Buyer]'s place of business. For the delivery and installation of this machine, [Seller] invoiced an amount of 1,700.00 on 30 December 2004. [Buyer] paid this price. Due to claimed defects of the ventilator, [Seller] on two occasions attempted to fix the problems at [Buyer]'s place of business. In letters of 6 May 2005 and 27 June 2005 which were addressed to [Seller], and in a letter of 1 September 2005 to [Seller]'s legal counsel, [Buyer] demanded that [Seller] take back the delivered dust ventilator from [Buyer]'s place in Landsberg am Lech and pay back the purchase price to [Buyer]. [Buyer] had already notified [Seller] of the defects of the ventilator and had demanded avoidance of the contract by letter of 18 March 2005. However, this letter could not be served properly because on 23 February 2005 [Seller] had moved its place of business, and had not notified [Buyer] thereof. The letter of 18 March 2005 thus was sent to [Seller]'s previous place of business.

POSITION OF THE PARTIES

[Buyer]'s position

The dust ventilator never functioned properly for the contractually agreed purpose. It was unfit to be used with a card box shredder. Due to constantly occurring jams, the ventilator - when in use - had to be taken apart for cleaning every twenty minutes. It was further emitting dust and micro-particles to an extent that was intolerable for work safety reasons. The machine suffered from irreparable defects in its construction. The defects became apparent when [Seller] delivered and installed the machine at [Buyer]'s place of business. Thereafter, [Buyer] tried to fix the occurring problems on several occasions. Once, by [Seller] sending a steel plate, which [Buyer] had to weld onto the machine in a certain way specified by [Seller]. At the end of February 2005, [Seller] visited [Buyer]'s place of business to fix further claimed defects. Among other things, [Seller] then shortened the supply tubes of the machine. In the beginning of March 2005, [Seller] again had to do several maintenance jobs on the ventilator at [Buyer]'s place of business, the result of which were that thereafter the machine would not function properly at all any more. Due to constantly occurring jams, the machine kept switching off automatically. The dust and micro-particles were still being emitted into the immediate work environment. Due to these defects, [Buyer] was entitled to demand avoidance of the sales contract. As [Seller] refused to take back the machine, [Buyer] also was entitled claim restitution of the purchase price plus damages for default, the latter including the costs of its legal counsel as far as they would not be covered by the procedural costs, upon which the Court would decide ex officio.

[Buyer] seeks reimbursement of an amount of 1,811.88 plus interest of 5 percentage points above the applicable base lending rate issued by the European Central Bank, since 25 November 2005.

[Seller]'s position

[Seller] wants the claim dismissed. Seller] argues as follows:

      When [Seller] first installed the ventilator at [Buyer]'s place of business, [Seller] expressly referred to the instructions for the proper use of the machine. Among other things, [Seller] advised against the use of the machine in [Buyer]'s spare parts stock room, because micro-particles could possibly be emitted through the dust cleaner bag. Due to [Buyer]'s several complaints, [Seller] visited [Buyer]'s place of business a second time to conduct all necessary repairs and maintenance work to ensure the proper functioning of the machine. After these jobs had been done, [Seller] tested the machine, which was functioning fine, without interruption, for two hours. Not until the end of July 2005 was [Seller] notified by letter of [Buyer]'s legal counsel that further problems had occurred.

[Seller] indicated that it was willing to perform further remedies concerning possible defects. [Seller] insisted, however, that the machine had been delivered and installed according to the specifications made in the offer. [Seller] pointed out that proper functioning of the machine required that the ventilator be run according to the given instructions. However, this had never been done. From the very beginning, [Seller] repeatedly advised that the ventilator should be used in a position horizontal to the card box shredder. Yet, [Buyer] insisted that the vent be positioned on top of the shredder in order to save workspace. [Seller] also expressly advised that the cleaner bag needed to be cleaned with a brush at least once a day, to prevent paper micro-fiber from being pushed through the tissue of the bag.

The Court has summoned several witnesses on the relevant questions of fact of the case.

REASONING OF THE COURT

The [Buyer]'s claim is fully justified.

      [Buyer] is entitled to avoid the contract and collect damages under Arts. 45 and 74 et seq. CISG. The case is governed by the UN Sales Convention.

Evaluating the evidence, the Court believes that the ventilator indeed suffered from severe defects as claimed by [Buyer]. The witnesses have confirmed that the machine constantly jammed, switched off and emitted dust and micro-particles. These defects could not be fixed, although [Seller] undertook several attempts to remedy. One witness in particular was able to exactly specify the occurring technical problems. In this witness' opinion, the machine was generally unfit for use at [Buyer]'s card box shredder. Despite the Court's repeated requests, [Seller] did not offer evidence to prove [Seller]'s allegation that the only reason the machine did not work properly was because the [Seller]'s instructions had been disregarded. Thus, the Court cannot assume that this was the case.

[Buyer] gave specified notice of the defects within reasonable time as required under Arts. 43 and 49(2)(b)(i) CISG. [Translator's note: Although Art. 43 CISG is referred to in the opinion, presumably, Art. 39 CISG was intended.] [Buyer]'s letter of 18 March 2005 contained a specific and timely notice of the defects, and the declaration to avoid the contract was made within a reasonable time.

[Seller] cannot rely on the fact that this letter had not been properly served. Presuming [Seller]'s own submissions of facts, in particular the conceded ongoing business relations with [Buyer] and the several unsuccessful attempts to remedy the defects, [Seller] should have foreseen that further difficulties with the ventilator would arise. [Seller] therefore was obliged to notify [Buyer] that its place of business had changed. The delay in the serving of [Buyer]'s letter of 18 March 2005 thus does not fall within [Buyer]'s responsibility.

[Buyer] is entitled to reimbursement of the purchase price due to avoidance of the contract. [Buyer] does not need to await further attempts remedy the defects by the [Seller]. It must be assumed that [Seller] was unable to fix the technical problems with the ventilator when it was first installed and then in two unsuccessful attempts to repair the machine. After two unsuccessful attempts to remedy, the buyer is entitled to avoid the contract. In this case, considering all circumstances in the sense of Art. 46(3) CISG, it would be unreasonable for [Buyer] to await another attempt to remedy. Therefore, the court does not even need to inquire into the question whether the proper functioning of the ventilator for the contractually agreed purpose was technically impossible.

Under Arts. 49 and 74 et seq. CISG, [Buyer] rightfully claimed avoidance of the contract plus damages. [Buyer] is thus entitled to restitution of the price paid for the delivery and the installation of the ventilator. [Buyer] is also entitled to damages due to [Seller]'s default in not taking back the machine. In a case like this, [Buyer]'s claim for reimbursement is not conditioned on [Seller]'s taking back the machine. [Buyer] had indeed offered to give back the ventilator to [Seller] several times, which [Seller] refused to accept. In that situation, [Buyer] is entitled to reimbursement of the price irrespective of whether [Seller] takes back the delivered goods or not.

[Buyer]'s claim for damages for default covers all expenses for legal counseling as far as they do not count as procedural costs upon which the Court decides ex officio. The interest due is determined by 280, 286, and 288 of the German Civil Code (Bürgerliches Gesetzbuch; BGB).

As concerns the points under 2. And 3. of the judgment, the decision relies upon 91 and 709 of the German Code of Civil Procedure (Zivilprozessordnung; ZPO).

[...]


FOOTNOTES

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

** Veit Konrad has studied law at Humboldt University, Berlin since 1999. During 2001-2002 he spent a year at Queen Mary College, University of London, as an Erasmus student.

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Pace Law School Institute of International Commercial Law - Last updated March 12, 2008
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