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CISG CASE PRESENTATION

Netherlands 2 January 2007 Appellate Court 's-Hertogenbosch (G.W.A. Bernards v. Carstenfelder Baumschulen Pflanzenhandel GmbH)
[Cite as: http://cisgw3.law.pace.edu/cases/070102n1.html]

Primary source(s) of information for case presentation: UNCITRAL abstract

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Case identification

DATE OF DECISION: 20070102 (2 January 2007)

JURISDICTION: Netherlands

TRIBUNAL: Hof 's-Hertogenbosch [Hof = Gerechtshof = Appellate Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: C0500427/HE

CASE NAME: G.W.A. Bernards v. Carstenfelder Baumschulen Pflanzenhandel GmbH

CASE HISTORY: 1st instance Rb 's-Hertogenbosch (88458/HA ZA 02-2168) 22 September 2004

SELLER'S COUNTRY: Netherlands (claimant)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Trees


Case abstract

NETHERLANDS: Gerechtshof 's-Hertogenbosch 2 January 2007

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/81],
CLOUT abstract no. 828

Reproduced with permission of UNCITRAL

Abstract prepared by Jan Smits, National Correspondent, and Bas Megens

The appellant (a Dutch person) entered into a contract with the respondent, a German company, for the sale and delivery of trees. The respondent, however, did not pay the entire purchasing price, claiming non-conformity of the goods, and it also claimed back a certain amount as compensation. The appellant claimed payment of the unpaid amount by the respondent.

The Court of First Instance rejected the claim on the grounds that it was not the appellant himself but his company, which he represented, that entered into the contract with the respondent. On appeal, raised by the appellant, the Court of Appeals determined that the CISG was applicable to the contract, pursuant to article 1(1)(a). The Court of First Instance had stated that the parties had agreed on applicability of Dutch law, but had left undecided the question whether this should entail application of communal Dutch law or of the CISG. However, both parties resided in contracting states of the CISG, the contract fell within the formal and material ambit of the CISG, and the sale concerned movable goods not excluded from the scope of the Convention. The Court of Appeals stated that the argument of the appellant that the parties had explicitly agreed upon application of communal Dutch law had to be rejected. According to article 6 CISG, the exclusion of the application of the CISG is only possible if parties so agree. Since the respondent did not appear before the Court of Appeals, the application of the CISG could not be excluded.

On the substance, the appellant argued that the contract was concluded with him in person, not with his company. The Court first noted that pursuant to article 11 CISG, a contract of sale need not be concluded in or evidenced by writing and that the response to the appellant's argument depended on the statements made by and other conduct of the parties, according to article 8 CISG. Furthermore, due consideration was to be given to all relevant circumstances of the case including the negotiations, practices between the parties, usages and any subsequent conduct of the parties.

The facts of the case seem to indicate that the appellant concluded the contract with the buyer on behalf of his company. The buyer ordered the trees from the catalogue of the appellant's company through the telephone number mentioned on the catalogue; the cargo letters usually indicated the appellant's company as the sender and the accompanying letters usually indicated the name of the appellant's company. On the other hand, however, the trees delivered were not invoiced to the buyer by the appellant's company, but by other companies. Moreover, the buyer had always transferred payment to the appellant's private bank account. The appellant also argued that the buyer paid some of the invoices by writing out cheques to the appellant and that the buyer knew that for tax related reasons the appellant's company never exported its products abroad. Therefore all transactions had been concluded with the appellant himself. The Court noted that the buyer might have been confused by the names of different companies used by the applicant in contracting with the buyer. This was also evident as the buyer claimed compensation for non-conformity of the delivered goods from both the appellant and his company. Nevertheless, since it appears that the buyer did not object to the names appearing on the invoices and transferred the payments to the appellant in person, the Court decided that, subject to proof of the contrary, which could not be delivered since the buyer did not appear before the Court, the buyer considered the appellant to be the contracting party and had concluded the contract with the appellant in person.

With regard to the issue of which transactions had been paid by the respondent, the court stated that the question had to be answered in conformity with the law applicable by virtue of the rules of private international law, pursuant to article 7(2) CISG, since the CISG is silent on this issue. According to article 4(1)(2) of the Rome Convention on the Law applicable to Contractual Obligations (1980), Dutch law should be applied, since the obligations under the contract were most closely connected with the Netherlands. Under Dutch law, in the circumstances of this case, the oldest transactions must be deemed to have been paid. Therefore the argument of the respondent that on the transactions which had not been paid the statute of limitations had expired could not be upheld.

With regard to the buyer's claim of compensation for the non-conformity of the delivered goods, the Court stated that the general terms and conditions of the respondent were irrelevant. These general terms and conditions were in fact applicable to contracts of sale between the respondent and its customers. Since in the case at hand the respondent was not a seller, but a buyer itself, there could be no battle of forms between its terms and conditions and those of the appellant, simply because the respondent conditions would not apply. The question whether the respondent had consented to the application of the seller general terms and conditions and to the short time periods specified therein, had to be answered with reference to article 8 CISG. The Court disregarded the question as to the applicability of general terms and conditions, since in the circumstances of the case the answer to the question whether the respondent had complained in time and in the correct way led, under application of articles 38 and 39 CISG, to the same conclusion. According to the Court, it was clear that trees can only be inspected immediately upon delivery, since at any point after that there is a risk that they get mixed with those received from other suppliers. Therefore the reasonable time referred to by article 39 CISG commences at that point. The length of the reasonable time depends on the circumstances of the case and the nature of the delivered goods. In the case at hand, the Court believed six days, as referred to by the general terms and conditions of the appellant, to be a reasonable period of time to discover the non-conformity of the goods. The inspection, as per article 35 CISG, should concern all aspects of conformity of the goods and be such as to reveal all non-conformities that a buyer should discover. Even though the respondent argued that the non-conformity of the trees could have only been discovered after the six day period, this argument could only be accepted if it were supported by evidence, which the respondent could not submit, since it did not appear before the Court.

As to the question whether the respondent gave notice to the appellant in time, a complaint filed on 18 December 1996 regarding trees delivered on 18 November 1996 constituted, according to the Court, an unacceptable violation of the reasonable period of article 39 CISG.

With regard to the appellant's claims of compensation for extrajudicial costs, though these costs can be compensated, under article 74 CISG, they were not incurred in the present case. The appellant also claimed payment of legal interest on the non-paid part of the main sum. Under article 78 CISG these can be compensated, but that article does not fix an interest rate. This latter must be determined by reference to the law which is applicable under article 7(2) CISG, i.e. Dutch law. The Court of Appeals thus overturned the Court of First Instance's judgment and ordered the respondent to pay the rest of the original sum plus additional costs and interest.

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Classification of issues present

APPLICATION OF CISG: Yes [Art. 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 6 ; 7(2) ; 8 ; 11 ; 35 ; 38 ; 39 ; 74 ; 78 [Also cited: Articles 53 ; 54 ; 60 ]

Classification of issues using UNCITRAL classification code numbers:

4B [Scope of law (issues excluded): sequence of payments];

6B [Choice of law (exclusion of Convention): need agreement for exclusion];

8C [Intent of party making statement or engaging in conduct: interpretation in light of surrounding circumstances[;

11A [Writing or other formality for conclusion of contract: not required];

35A [Conformity of goods: quantity, quality and description required by contract];

38A [Buyer's obligation to examine goods];

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

74A [General rules for measuring damages: loss suffered as consequence of breach['

78B [Rate of interest]

Descriptors: Scope of Convention ; Choice of law ; Intent ; Formal requirements ; Conformity of goods ; Examination of goods ; Lack of conformity notice, timeliness ; Damages ; Interest

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1437&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (Dutch): Netherlands case law website <http://www.rechtspraak.nl/>; see also Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1437&step=FullText>

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Pace Law School Institute of International Commercial Law - Last updated May 25, 2010
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