Germany 29 June 2006 District Court Gera (Laser system case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060629g1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 1 HKO 396/04
CASE HISTORY: 2d instance OLG Thüringer-Jena 27 August 2008
SELLER'S COUNTRY: Germany (plaintiff)
BUYER'S COUNTRY: Canada (defendant)
GOODS INVOLVED: Medical equipment (laser system)
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
8A [Interpretation of party's statements or other conduct: intent of party making statement or
engaging in conduct]; 9C [Practices established by the parties]; 18A2 ; 18A3 [Acceptance of offer: conduct indicating assent; Silence or inactivity insufficient]
8A [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct];
9C [Practices established by the parties];
18A2 ; 18A3 [Acceptance of offer: conduct indicating assent; Silence or inactivity insufficient]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (German): Click here for German text of case
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
29 June 2006 [1 HK O 396/04]
Translation [*] by Institut für ausländisches und internationales
Privat- und Wirtschaftsrecht der Universität Heidelberg
Daniel Nagel [**]
The [Seller], a company that produces medical equipment and in particular laser devices, initially claimed payment of US $122,067.00 plus interest on the basis of an alleged contract for the sale of a laser system MEL 70 G-Scan from the [Buyer]. The [Buyer] was in charge of sales for a former subsidiary of the [Seller] in the USA. The claimed amount is calculated on the basis of a remaining purchase price of US $82,067.00 and the provision of services in the amount of US $40,000.00.
POSITION OF THE PARTIES
Position of the [Seller]
The [Seller] alleges that the [Buyer] had directly concluded a contract with the [Seller] for the sale of a laser system MEL 70 G-Scan at a purchase price of US $280,000.00 plus freight costs in the amount of US $2,067.00. [Seller] alleges that it had delivered the device, which had previously been used as a display model at a trade fair, to the [Buyer] and issued an invoice for the delivery on 29 June 2000 in the amount of US $282,067.00. The [Buyer] has only paid US $200,000.00 so far.
As the laser device was in K___ due to the trade fair, the contract was concluded via telephone and confirmed by a written confirmation of 29 June 2000. This confirmation had never been contested by the [Buyer]. The [Buyer] had accepted or confirmed the contract, respectively, by paying a part of the purchase price, namely US $200,000.00. The handing over, acceptance of the delivery, issuing of an invoice and payment would not constitute an express declaration; however, this would constitute a conduct in the sense of Article 18(1) CISG that indicated assent to an offer. In addition, a contract had come into existence according to Article 18(3) CISG as it would be a result of practices which the parties had established between themselves that contracts for the sale of goods are concluded via telephone and confirmed by an order confirmation. The parties had often concluded contracts in this manner in the past, which always had been carried out without any problems.
The claim of the [Buyer], namely that it would be able to rely on an offset agreement which had been concluded with the subsidiary of the [Seller] as well as on a respective offset account, would be irrelevant. The latter account served to offset claims of the [Buyer] and the subsidiary. The present case, however, would concern a claim for payment of a purchase price arising out of a contract concluded directly with the [Buyer].
The [Seller] contests the existence and the amount of the counterclaim of the [Buyer] which had been raised in eventu in order to be set off against the [Seller]'s claim.
The [Seller] alleges that the District Court Gera has international jurisdiction and that the purchase price had to be paid at the [Seller]'s place of business according to Article 57 CISG.
Furthermore, the [Seller] had provided services which had been invoiced on 19 December 2001 in the amount of US $40,000.00. The [Buyer] had failed to settle this invoice.
The [Seller] requests - following a partial withdrawal of its action in respect to the payment for the provision of services in the amount of US $40,000.00, which has been agreed to by the [Buyer] - that the [Buyer] be ordered to pay US $82,067.00 plus interest in the amount of 8 % since 30 August 2000.
Position of the [Buyer]
The [Buyer] requests that the [Seller]'s claim be dismissed.
The [Buyer] pleads incompetence of the Court. The [Buyer] alleges that no contract had been concluded with the [Seller]. In addition, it contests that it had asked for the provision of services.
There had never been a direct contractual agreement between the parties; the [Buyer] was in charge of the exclusive marketing in Canada for the [Seller] or its legal predecessor, respectively. On that basis, it had arranged for the sale of medical equipment. Any orders received had been effected via the US-American subsidiary of the [Seller]. However, the financial transactions or the performance, respectively, had taken place upon the request of the [Seller]'s subsidiary via an offset account of the [Seller].
The [Buyer] contests that a contract had been concluded via telephone. The [Seller] could not prove the conclusion of a contract solely on the basis of its order confirmation. The [Seller] has failed to state the point in time when the [Buyer] had allegedly expressed its consent. The [Buyer] contests that it had accepted the device; the [Seller] had delivered the laser device directly to customer C. The payment of US $200,000.00 does not constitute any declaration as it had been the [Seller] who had opened an offset account in order to administer the sales for the US-American subsidiary. A payment had only been made to this account due to this very administration of the sales for the US-American subsidiary. There was no practice between the parties - as alleged by the [Seller] - to conclude contracts orally and confirm them by way of a written order confirmation.
In eventu, the [Buyer] relies on a set-off with claims arising out of the legal relationship with the [Seller] in the amount of US $130,089.23.
For the remainder, reference is made to both the written submissions and the enclosures of the parties.
The parties have agreed on a decision by the presiding judge according to § 349(3) ZPO [*].
The Court has taken evidence according to the order for evidence of 9 February 2006 by the hearing of witness H and the hearing of witness T during the oral hearings on 2 May 2006. Reference is made to the minutes of proceedings of 2 May 2006 in respect to details of the taking of evidence.
The [Seller]'s claim is admissible but not justified.
The claim is admissible. The District Court Gera - commercial chamber - has international, local, subject-matter and functional jurisdiction.
The legal assessment of the disputed contract is governed by the United Nation Convention on Contracts for the International Sale of Goods (CISG). The disputed contract falls under Article 1 CISG. Both the Federal Republic of Germany and Canada are Contracting States to the Convention. An exception according to Article 2 CISG is not present.
According to Article 57 CISG, the seller's place of business is the place of performance for the claim for payment - as in the present case (cf. Zöller-Vorkommer, ZPO, 25th edition, margin number 25).
Nevertheless, the claim is not justified - even following the partial withdrawal.
The [Seller] failed to convince the Court that it has concluded a contract for the sale of the laser device MEL 70 G-Scan to the [Buyer].
The [Seller] has failed to submit proof that there has been a direct conclusion of a contract via the exchange of two corresponding declarations in the sense of offer and acceptance - even though the [Buyer] has expressly contested this allegation.
In addition, the order confirmation of 29 June 2000 cannot be seen as a proof of the conclusion of a contract.
The Court does not assume that the [Buyer]'s conduct, namely, the alleged acceptance of the laser device and its resale to customer C in the sense of an acceptance according to Article 18 CISG, can be interpreted as an acceptance in the light of Article 18(1) CISG, as this has been disputed - in contrast to the allegations of the [Seller]. The Court has pointed out that the allegation has been contested in its decision of 9 February 2006. Nevertheless, the [Seller] failed to submit any proof in respect to its allegation.
The partial payment in the amount of US $200,000.00 does as well not constitute an acceptance in the sense of Article 18 CISG, as the [Buyer] stated - which was expressly confirmed by the [Seller] in its written submission of 25 November 2005, page 3 (rp. I/177) - that an offset account had been established upon express request of the [Seller], which had been used to administer the sales of the [Buyer] for the US-American subsidiary. The account was used to collect, set-off and pay off mutual claims. Thus, the partial payment cannot be interpreted as an acceptance of the [Buyer] as regards the present contract - as alleged by the [Seller] - which had allegedly been directly concluded between the [Buyer] and the [Seller].
The allegation of the [Seller] in its submission of 25 April 2006 that such an offset account had never been existent contradicts earlier submissions of the [Seller] and thus cannot be considered, § 138(3) ZPO [*]. Furthermore, this submission is contrasted by the effect of admission according to § 288 ZPO and has to be rejected as belated according to § 296(1) ZPO. The [Buyer] explicitly stated that the submission would be belated. An admission of this submission would lead to a delay of the proceedings, as it would be necessary in this case to take further evidence.
Finally, a contract cannot be assumed on the basis of silence to a letter of acknowledgement - as the Court cannot establish such a practice at the seat of the [Buyer] and as the [Seller] neither alleged nor proved such a practice at the seat of the [Buyer] - as the [Seller] failed to prove that there had been such a practice between the parties.
Neither witness H nor witness T could give a detailed account of such a practice prior to the order confirmation of 29 June 2000.
It is true that witness H stated that business transactions had taken place at fairs "without regard to form.". Nevertheless, he could not remember a practice between the parties as alleged by the [Seller].
It is true that witness T stated that the [Buyer] had issued written orders. She credibly stated that - due to the peculiarity that a necessary signature had been missing on the documents - only an oral instruction to invoice the device had been present in respect to the laser device, which entailed the issuing of an order confirmation. However, she was not able to state anything in respect to the alleged practice between the parties, namely, that contracts had been orally concluded and confirmed in writing.
Hence, the set-off of the [Buyer] is irrelevant. As such, it does not have to be considered.
The decision on costs is based on §§ 91(1), 269(3) ZPO [*]. The decision on the provisional enforceability is based on § 709 ZPO.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff-Appellant of Germany is referred to as [Seller] and the Defendant-Appellee of Canada is referred to as [Buyer]. Amounts in the US-American currency (US dollars) are indicated as [US $].
Translator's note on other abbreviations: ZPO = Zivilprozessordnung [German Code on Civil Procedure].
** Ph.D. candidate Daniel Nagel has studied law at the University of Heidelberg and at the University of Leeds.Go to Case Table of Contents