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CISG CASE PRESENTATION

Germany 13 September 2006 District Court Berlin (Aston Martin automobile case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060913g1.html]

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

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Case identification

DATE OF DECISION: 20060913 (13 September 2006)

JURISDICTION: Germany

TRIBUNAL: LG Berlin [LG = Landgericht = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 94 O 50/06

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

CASE HISTORY: Unavailable

SELLER'S COUNTRY: [-]

BUYER'S COUNTRY: [-]

GOODS INVOLVED: Sale of an Aston Martin automobile


IHR headnote

Reproduced from Internationales Handelsrecht [4/2008] 168

"1. The length of the notice period of Art. 39 CISG needs to reflect the reseller’s need to await the final buyer’s reaction to the defect of the goods.

"2. The damages under Art. 74 CISG include wasted VAT and the legal fees incurred in handling the final buyer’s claim."

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 35 ; 39 ; 74 ; 78 [Also cited: Articles 38 ; 45 ]

Classification of issues using UNCITRAL classification code numbers:

35A ; 35B [Conformity of goods to contract: Quality, quantity and description required by contract; Requirements implied by law];

39A [Requirement to notify seller of lack of conformity: buyer must notify within reasonable time];

74A ; 74B [General rules for measuring damages: loss suffered as consequence of breach; Outer limits of damages: foreseeability of loss];

78A [Interest on receiving price or any other sum in arrears];

Descriptors: Conformity of goods ; Lack of conformity notice, timeliness; Damages ; Foreseeability of damages ; 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): Internationales Handelsrecht (4/2008) 168-169

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

District Court (Landgericht) Berlin

13 September 2006 [94 O 50/06]

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

JUDGMENT

   (1)   The [Seller] is ordered to pay 25,076.80 EUR plus 8% interest above the base interest rate since 3 January 2005 in respect to 23,028.00 EUR and in respect to 2,048.80 EUR since 30 August 2006.
 
   (2)   The [Seller] has to bear the costs of the proceedings.
 
   (3)   The judgment is provisionally enforceable against payment of a security deposit of 110% of the amount to be enforced.

FACTS

On 14 May 2004, the [Buyer] purchased an Aston Martin automobile at a price of 94,000.00 EUR from the [Seller]. The contract of sale stated 16 January 2004 as the date of initial registration (exhibit K1). The mileage was indicated as 8,700 km. The car had been imported from Saudi Arabia, where it had been bought on 10 November 2002 (exhibit B2).

The [Buyer] resold the car to a customer on 15 May 2004 at a price of 112,000.00 EUR. The [Seller] sent an invoice to the [Buyer] on 19 May 2004, which recited 10 November 2002 as the date of delivery (page 41 of the annex). The [Seller] additionally sent its own contract of purchase on 15 June 2004 (typing error in the original version exhibit B1), which also stated 10 November 2002 as the date of sale.

The [Buyer]'s customer registered the car in France. On 17 September 2004, the authorized prefecture entered 10 November 2002 as the initial registration date in the registration permit (exhibit K 3). The customer was unhappy and informed the [Buyer] who in turn contacted the [Seller]. In response to this, the [Seller] sent a letter on 11 October 2004 stating that the initial registration date would be 16 January 2004 according to the German registration document.

The [Buyer] took the car back from its customer and reimbursed the purchase price. The [Buyer] resold it later on at a price of 92,500.00 EUR.

The [Buyer] claimed -- in a letter of 16 December 2004 (exhibit B4) -- that it would be entitled to a reduction in price of roughly 31,000.00 EUR in respect to its contract of purchase from the [Seller] as long as the [Seller] could not prove that 16 January 2004 was the actual initial registration date and set a time limit until 2 January 2005. The [Seller] failed to do so.

The [Buyer] filed this suit in order to further its request. The [Buyer] holds the opinion that the [Seller] was liable to compensate damages according to the provisions of the United Nations Convention on Contracts for the International Sale of Goods as the car had not been in conformity with the contractual agreement.

The [Buyer] requests that the [Seller] be ordered to pay 25,076.80 EUR plus 8% interest above the base interest rate since 3 January 2005 in respect to 23,028.00 EUR and in respect to 2,048.80 EUR since 30 August 2006.

The [Seller] requests the dismissal of the claim.

The [Seller] alleges that it had stated the correct facts in the contractual agreement as the car had been used in Saudi Arabia without being registered, thus the actual initial registration had taken place on 17 September 2004 in France. Furthermore, the [Buyer] had failed to give timely notice in the sense of Articles 38 et seq. CISG. In addition, the [Buyer] had not been obliged to take the car back.

Reference is made to the letters (plus exhibits) which have been exchanged between the parties.

REASONING

The [Buyer]'s claim is admissible and justified.

The [Buyer] is entitled to claim damages according to Article 74 CISG in conjunction with Article 45 CISG. The requirement to claim damages according to these provisions is that the seller has failed to fulfill its contractual duties in the sense of Article 45 CISG. This has happened in the present case. The [Seller] has failed to deliver goods according to Article 35 CISG, which are in conformity with the contractual stipulations. Article 35(1) CISG contains a subjective notion of defect according to the leading doctrine in Germany (Schlechtriem/Schwenzer, Kommentar zum CISG, 4. ed 2004).

The Aston Martin automobile which was sold by the [Seller] was not of the quality required by the contract of sale of 14 May 2004. The date 16 January 2004, which was entered in the contract as the date of initial registration does not correspond to the actual facts.

The [Seller] should have told the [Buyer] that this date only represented the date of the first registration in Germany as held by the BGH in respect to a comparable case in 2004 (NJW 2005, p. 1045). From an objective point of view, a buyer could only interpret this part of the contract as being the date of the initial registration of the car. The [Buyer] could not reasonably expect that the car had already been sold fourteen months prior to the contract. In case there are no further specifications, a buyer can only assume that the date of registration as stated in the contract reflects the age of the car. At the time of the conclusion of such a contract, the general rule that a registration date mirrors the year of construction is tacitly implied (e.g., registration date "February 2004" equals year of construction "2003") (Reinking/Eggert, Der Autokauf, 9th ed 2005, margin number 1253).

It is true that the registration document of the present case does not contain a registration date, however, the [Buyer] was free to trust the statements of the [Seller] in the contract. It is undisputed that the age of a car is a characteristic feature of quality (Reinking/Eggert, loco citato). According to the former version of the BGB, [*] the date of initial registration is a feature of quality in the sense of § 459(2) BGB [*]. Statements which are made in this respect in contracts of sale have been interpreted by the appellate courts as being warranties (Reinking/Eggert, loco citato, margin number. 1333, page 873).

The [Buyer] gave timely notice in the sense of Article 38 and Article 39 CISG in contrast to the allegations of the [Seller]. The fact that the [Buyer] gave notice after he was himself informed by its customer -- at the time the latter wanted to hand the car back after trying to register the car in France on 17 September 2005 -- does not hinder a timely notice. Irrespective of whether the [Buyer] already could have known the defect at the time it received the invoice of 19 May 2004 or at the time it received the letter of 15 June 2004, it has given timely notice in the sense of Article 39(1) CISG. The [Buyer] was entitled to await the reaction of its customer.

The [Seller] cannot rely on the argument that the [Buyer] was not obliged to take the car back as a means of defense. Irrespective of whether according to French law the customer of the [Buyer] was entitled to a reverse transaction, it can be assumed that the [Buyer] rightfully took the car back as a gesture of goodwill. The car in the present case is prestigious and expensive, hence the [Buyer] could not be requested to run the risk of a lawsuit filed by its customer.

According to article 74 CISG, damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. The maxim of complete recovery is applicable (Schlechtriem/Schwenzer-Stoll/Gruber, loco citato, Article 74, margin number 2). As the [Seller] ought to have foreseen that the [Buyer] resold the car, it has to compensate the loss of profit the [Buyer] incurred in the present case (cf. Schlechtriem/Schwenzer-Stoll/Gruber, loco citato, Article 74, margin number 44).

The [Buyer] is hence entitled to claim loss of profit in the amount of EUR 18,000.00, the VAT, which has futilely been paid, of EUR 3,528.00 (which has not been contested) as well as the difference between the purchase price and the sale price, i.e., EUR 1,500.00.

[Seller] is also entitled to claim the costs for a French attorney of EUR 1,147.00. There is no reason to assume that these fees are excessive. The costs for the legal proceedings in Germany, which are the semi-fees out of EUR 901.80 are to be assessed according to §§ 2,13,14 RVG [*] in conjunction with the preliminary remark number 3 in respect to number 2400 VVRVG [*].

In respect to the interest, the Court assumes that national law is to be applied according to Article 78 CISG. The domicile of the obligor is decisive in this respect. (Bacher, in Schlechtriem/Schwenzer, loco citato, Article 78, margin number 29). § 288(2) BGB [*] is thus applicable. The [Seller] defaulted at the latest at the time it finally refused payment according to § 286(2) No 3 BGB [*].

The decision on costs is based on § 92(2) ZPO due to the partial withdrawal of the claim. The decision on the provisional enforceability is based on § 709 ZPO [*].


FOOTNOTES

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

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].

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

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Pace Law School Institute of International Commercial Law - Last updated November 3, 2008
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