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CISG CASE PRESENTATION

Germany 31 March 2008 Appellate Court Stuttgart (Automobile case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/080331g1.html]

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

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Case identification

DATE OF DECISION: 20080331 (31 March 2008)

JURISDICTION: Germany

TRIBUNAL: OLG Stuttgart [OLG = Oberlandesgericht = Appellate Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 6 U 220/07

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

CASE HISTORY: 1st instance Landgericht Stuttgart (16 O 201/07) 30 August 2007 [reversed]

SELLER'S COUNTRY: Germany (defendant)

BUYER'S COUNTRY: Latvia (plaintiff)

GOODS INVOLVED: Automobile


UNCITRAL case abstract

GERMANY: Oberlandesgericht Stuttgart 31 March 2008

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/128],
CLOUT abstract no. 1232

Reproduced with permission of UNCITRAL

Abstract prepared by Ulrich Magnus and Jan Lüsing

The decision by the Higher Regional Court of Stuttgart is mainly concerned with two issues: the requirements for opting out of the CISG under its article 6 and the “reasonable time” to declare avoidance of the contract pursuant to article 49(2)(b) CISG.

The plaintiff, a Latvian corporation, bought a used car from the defendant, a German commercial car dealer. The pre-printed form of the purchase contract contained the handwritten remark “no repainted”, which was added by the defendant on account of the plaintiff’s request. The defendant had obtained the car from at least one intermediary. Previously, the car belonged to a Bank PLC and had been damaged and repaired, including paint work. After payment of the purchase price, the car was delivered to Riga at the expenses of the buyer. The buyer examined the car on 7 July 2006 for the first time detecting that the car had been repainted; furthermore, accident damage had not been professionally repaired and certain car accessories (stated in the contract) had not been delivered. In a letter dated 15 July 2006, the buyer demanded a payment of Euro 2,500 by 2 August 2006 at the latest, stating that it would avoid the contract and claim damages in case the seller refused to pay. After exchanging several letters, the buyer declared the contract avoided in a letter dated 25 September 2006.

The buyer sued for restitution of the purchase price and for reimbursement of the transfer and parking costs of the car. The Regional Court, in the first instance, sustained the buyer’s claim. The Higher Regional Court reversed the decision allowing the defendant’s appeal. The court stated that the contract between the parties was governed by the CISG: both parties had their place of business in contracting States and the “requirements for the application of the CISG” were also met: when the parties stipulated the contract, the seller was entitled to believe that the buyer was purchasing the car for professional purposes (article 2(a) CISG).

The Court also noted that application of the Convention had not been excluded either explicitly or tacitly. The CISG is incorporated into German law: thus, if the parties assume that German law will be applied, this will include the CISG as well. Exclusion of the Convention would rather require specific wording such as “The contract is governed by the sale of goods law of the BGB.” Exclusion of the CISG is not implied even when the standard terms and conditions of the seller indicate Germany as the jurisdiction. Finally, application of the CISG cannot be excluded because both parties solely argued on the basis of German national law in the first instance.

As to the substance of the case, the court rejected the plaintiff’s claim for restitution of the purchase price under article 81(2) CISG and the reimbursement of the transfer and the parking costs under articles 74 CISG et seq. holding that the plaintiff lost its right to declare the contract avoided because it failed to declare avoidance within a reasonable time according to article 49(2)(b) CISG. The court stated that the notion of reasonable time under such article has to be determined according to all circumstances of the case. Special consideration must be given to the need for the seller to know, within a short time, how to re-utilize the goods delivered. In the present case, the court regarded the period of two months as reasonable to declare avoidance. The time commenced to run on 7 July 2006, when the buyer recognized the lack of conformity of the good for the first time. Avoidance could have thus been declared until 7 September 2006, which did not happen. For this reason the court stated that the buyer was “not entitled to any claims in addition to the restitution of the purchase price”.

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IHR headnote

Reproduced from Internationales Handelsrecht [3/2008] 102

"1. The CISG is not tacitly derogated if both parties argue solely on the basis of German national law in the first instance.

"2. The length of the reasonable time under Art. 49 para. 2b CISG is to be determined based on the circumstances of the case; particular regard is to be had to the fact that the seller will need time to clarify whether it is necessary to re-use the goods.".

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 2(a) ; 6 ; 7 ; 8 ; 40 ; 49(2)(b) ; 74 [Also cited: Articles 50 ; 77 ; 81(2) ]

Classification of issues using UNCITRAL classification code numbers:

2A1 [Exclusions from the Convention (sales for personal, family or household use): exception (seller's lack of knowlege of buyer's purpose)];

6B [Agreement to apply the Convention: implied by selection of law of Contracting State];

7B1 [Materials for interpretation of Convention: international case law and scholarly studies];

8C [Interpretation in light of surrounding circumstances: contra preferentem rule held applicable to the Convention];

49B [Buyer's loss of right to declare avoidance after delivery: failure to avoid within period specified in art 49(1)(a) and (b)];

74A [General rules for measureing damages: loss suffered as consequences of breach]

Descriptors: Consumer sales ; Choice of law ; Internationality ; Intent ; Avoidance ; Damages

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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=1317&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (German): Click here for German text of case; see also CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1658.pdf>; Internationales Handelsrecht (3/2008) 102-106

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Appellate Court (Oberlandesgericht) Stuttgart

31 March 2008 [6 U 220/07]

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

JUDGMENT

   (1)   [Seller]'s appeal is honored. The judgment of 30 August 2007 of the District Court (Landgericht) Stuttgart is reversed. It is changed to: "The claim of the [Buyer] against the [Seller] is dismissed."
 
   (2)   The appeal of the [Buyer] is also dismissed.
 
   (3)   The [Buyer] has to bear the costs of the proceedings of both instances.
 
   (4)   The judgment is provisionally enforceable.

Value of the appeal: up to EUR 16,000

FACTS

The [Buyer], a Latvian corporation, claims the reverse transaction of a contract for the sale of a car concluded with the [Seller], a German professional car dealer, in the form of a repayment of the purchase price conditional upon the handing over of the car. It requests the court to establish that the [Seller] is in default of acceptance of the car and has to reimburse various costs [Buyer] incurred in the course of the conclusion of the contract and the reverse transaction.

The car had been used as a company car by ... Bank Plc. During that time it was damaged and repaired which, inter alia, included paint work in the amount of EUR 500.00.

Four years after the initial registration, when the car showed a mileage of more than 100,000 km, the .... Bank Plc. sold it. The [Seller] bought it via at least one intermediary.

Following this purchase, the [Seller] advertised the car on the Internet. An employee of the [Buyer] showed interest and perhaps intended to use the car for private purposes. Negotiations between either the [Buyer] or a representative of the [Buyer] in Germany and the [Seller] took place via telephone. The parties concluded a contract for the sale of the car via exchanging faxes without any prior inspection of the car by the [Buyer] and without giving notice to the [Seller] that an employee of the [Buyer] intended to use the car. The contract contained a note of the [Seller] in handwriting stating "no repainting", which was added at the [Buyer]'s insistence. The contract refers for the remainder to standard terms of the [Seller] which provided for the jurisdiction of the court at the place where the [Seller] was domiciled.

The [Buyer] paid the purchase price of EUR 11,500. The car was then delivered to Riga, Latvia, at the expenses of the [Buyer]. During the first inspection of the car on 7 July 2006, the [Buyer] noticed that the car had been repainted.

The attorney of the [Buyer] claimed in a letter of 15 July 2006 the payment of EUR 2,500 setting 2 August 2006 as a deadline for payment. He alleged a fundamental accident damage which had not been repaired professionally and entailed necessary costs for repainting in the amount of EUR 900 plus the non-delivery of snow tires which had allegedly been included in the contract. He stated that the [Buyer] would avoid the contract and claim damages in case the [Seller] refused to effect the payment.

The former attorney of the [Seller] acknowledged in a letter of 20 July 2006 that the car had been repainted but pointed out that this had only been necessary due to minor damage caused by vandalism. Additionally, the repainting had been effected professionally. Hence, the [Buyer] would not be entitled to claim damages. He stated that the [Buyer] would, however, be free to initiate proceedings. Nevertheless, the [Seller] would be willing to additionally deliver winter tires as a gesture of good will.

The attorney of the [Buyer] responded on 9 August 2006. He maintained his initial position and once again claimed the payment of EUR 2,500 as damages, setting a deadline until 23 August 2006.

The former attorney of the [Seller] responded in a letter of 11 August 2006 stating that the [Seller] would be willing to initiate a reverse transaction but would refuse to pay any damages.

The attorney of the [Buyer] sent a letter on 15 August 2006, which reduced the claim to EUR 1,500. And he stated that he would initiate legal proceedings if the [Seller] failed to effect a payment by 23 August 2006.

The attorney of the [Buyer] alleged in an additional letter that the [Buyer] had not been able to pick up the car from the customs premises before 28 August 2006 in order to have it technically checked. In addition, the CEO of the [Buyer] had been in Russia between 1 September 2006 and 20 September 2006.

The attorney of the [Buyer] declared the avoidance of the contract in a letter of 25 September 2006, which was received by the former attorney of the [Seller] on 28 September 2006 at the latest.

For further undisputed arguments as well as the allegations of the parties during the proceedings in the Court of First Instance, reference is made to the judgment of the District Court of Stuttgart.

JUDGMENT OF THE COURT OF FIRST INSTANCE

The Court of First Instance allowed the [Buyer]'s claim according to §§ 323, 437 No. 2 BGB [*] (reimbursement of the purchase price) as well as §§ 286, 291 BGB [*] (delay of acceptance) and §§ 280, 281 BGB [*] (damages in respect to the expenses incurred in the course of the execution of the contract and the preparation for the reverse transaction).

The [Seller] filed a timely appeal against this judgment. The [Seller] alleged that:

   -    The parties had excluded the application of the CISG as the standard terms which had been (undisputedly) included provided for German jurisdiction. These standard terms had been sent to the [Buyer] via fax prior to the conclusion of the contract. And the [Buyer] would not be entitled to rely on any warranty rights, as the repainting would be included in the (undisputed) exclusion of any warranty.
 
   -    Furthermore, the [Buyer] would not be entitled to rely on a breach of contract -- which had not been present or at least had not been fundamental -- as [Buyer] had failed to give timely notice.
 
   -    Moreover, it was impossible for [Buyer] to avoid the contract as the avoidance had not been declared within a reasonable period of time. This period would be shorter than the period to give notice. In addition, the [Buyer] had already sold the car to a third party and would not be able to restitute it.

The [Seller] therefore requests that the judgment in favor of the [Buyer] of LG Stuttgart of 30 August 2007 be revoked and that the [Buyer]'s claim be dismissed.

The [Buyer] requests the dismissal of the [Seller]'s appeal. [Buyer] additionally cross-appeals for the payment of a further EUR 1,090.51 plus 5% interest above the base interest rate since the commencement of the proceedings.

The [Seller] requests in this respect that the cross-appeal of the [Buyer] be dismissed.

The [Buyer] defends the judgment of the Court of First Instance.

   -    [Buyer] additionally (for the first time) contests that the [Seller] had not been aware of the repainting prior to [Buyer]'s notice.
 
   -    Furthermore, [Buyer] -- as well for the first time -- alleges that it had already given notice of the repainting on 7 July 2006 via telephone. [Buyer] alleges that the [Seller] had refused to believe that this defect had been present and had not been willing to correct it and that, taking the circumstances of the case into account, the [Buyer]'s declaration of avoidance had to be qualified as timely.

For the remainder, reference is made to the written submissions of the parties and the oral hearings.

REASONING

The [Seller]'s appeal is admissible and justified. The judgment of the Court of First Instance has to be changed as the [Buyer] is not entitled to the respective claims.

The CISG (Convention on Contracts for the International Sale of Goods) has to be applied to the contract in the present case.

   -    It is true that the CISG provides for a claim for reimbursement following the avoidance of a contract according to Article 81(2) clause 1 CISG, as alleged by the [Buyer] in its claim at item 1. However, the requirements for this claim have not been met as the [Buyer] failed to avoid the contract within the period as set out by Article 49(2)(b) CISG. A claim for reimbursement cannot be based on claims for damages.
 
   -    It also is true that the CISG provides for claims for damages in addition to the avoidance of the contract which leads to reimbursement. However, these claims are not supposed to secure the reimbursement, but to compensate for the remaining losses after a reverse transaction has taken place.
 
   -    If the reverse transaction of the contract is barred, the [Buyer] is neither entitled to claim damages due to a default of acceptance by the [Seller], as alleged in its claim at item 2, nor to claim damages, as alleged in its claim at item 3. These losses cannot be based on a breach of duty by the [Seller].

The CISG is applicable to the present contract.

Both Germany and Latvia are Contracting States of the Convention on Contracts for the International Sale of Goods. Hence, it is irrelevant whether the German International Private Law provides for German or Latvian law.

The subject matter and personal requirements for the application of the CISG are met as well.

At the time of the conclusion of the contract the [Seller] was entitled to assume that the [Buyer] intended to purchase the car for professional purposes (Article 2(a) CISG). Even though the [Seller] did not know the legal form of the [Buyer] at this point in time, it was obvious that the [Buyer] acted as a business company. That is the very reason why [Seller] did not add the winter tires to its delivery, as the advertisement on the Internet only included them in the offer if the purchaser intended a private use of the car. [Seller] had been informed for the first time that an employee of the [Buyer] had intended to use the car for private purposes during the oral hearings.

The further requirement, namely, that both parties are domiciled in different Contracting States as well as that these could be seen from the contract (Article 1(1) and (2) CISG), is fulfilled.

The parties did not exclude the application of the CISG.

It is true that the CISG provides for freedom of contract and thus for the possibility to exclude its application (Article 6 CISG), which leads to the application of the respective national law as provided for by the IPR. However, there is no such exclusion in the present case -- neither at the time of the conclusion of the contract nor after this point in time.

The parties have neither explicitly agreed on the application of specific provisions nor do the standard terms -- the inclusion of which is disputed in any case -- contain any clause in this respect.

It has to be taken into account that the CISG is incorporated into German law. Hence, the assumption that "German law would naturally apply" does not mean that solely the BGB [*] and the HGB[*] are applicable (Ferrari, in Schlechtriem/Schwenzer CISG, 4th edition, Article 6 margin number 22). A clause such as "the provisions of the BGB are applicable" would have been necessary in this case (Ferrari, loco citato, margin number 21).

An exclusion of the application of the CISG cannot be inferred from the fact that the standard terms of the [Seller] provided for German jurisdiction.

   -    It is true that the denomination of the jurisdiction of a certain State can often be interpreted as a hint that the law of this very State should apply. This is based on the assumption that the application of foreign law by a court is time-consuming and expensive. However, this does not apply to the CISG which is a uniform law that can easily be applied by its Member States. Therefore the choice of German law automatically implies the application of the CISG (BGH, NJW 1999, 1259). Thus, more precise hints would have been necessary in order to exclude the application of the CISG.
 
   -    Furthermore, the principle of "contra proferentem" applies to both the CISG and the BGB [*]. (Magnus in Staudinger, BGB edition 2005, Article 8 CISG, margin number 18). It could at best be considered whether the choice of the jurisdiction of a non-Member State implies the exclusion of the CISG. However, such a case is not present.

In addition, the parties did not agree on an exclusion of the CISG after the conclusion of the contract.

It is true that both parties have based their allegations prior to and during the proceedings in the Court of First Instance on the BGB; however, this does not imply a post-contractual exclusion of the CISG. There is no mutual agreement of intent of the parties, as this requires an express declaration of intent in respect to a specific legal consequence. The application of the wrong provisions due to a legal misapprehension does not meet this requirement (Ferrari, loco citato, margin number 25 et seq.).

There has not been an effective avoidance of the contract as the [Buyer] failed to give notice thereof within "reasonable time" (Article 49(2)(b) CISG).

   -    In due consideration of all circumstances, the [Buyer] took too much time as it did not declare the contract avoided until 25 September 2006, which is two months and 18 days after 7 July 2006, namely, the day it noticed the lack of conformity of the contractual performance of the [Seller]. The period of time started to run on 7 July 2006, as a supplementary performance has not been possible in the present case -- the defect, namely, the repainting cannot be corrected (cf. Magnus, loco citato, Article 49, margin number 40).
 
   -    The calculation of the duration of the period has to be based on the fact that the main purpose of such a period is to inform the seller within a short period of time in order to enable him to consider the further utilization of the goods. (e.g., OLG Koblenz, OLGR [*] 1997, 37, 38). It is true that this is not as necessary in respect to a car as in respect to perishable goods (Veste Landsret Viborg of Denmark, judgment of 10 November 1999: 7 days), but a car loses in value as well due to a downtime, even if its initial registration dates back more than four years -- as in the present case.
 
   -    In addition, in the case of a reverse transaction on the basis of a claim for damages, the seller is liable to pay demurrage, which can also be seen as an argument for a speedy reverse transaction. Two months are already too much time if there are no additional circumstances (cf. OLG Frankfurt RIW 1994, 593 [non-conformity of packaging]; OLG Hamburg IHR 2002, 19: 22 days still in-time in respect to the sale of textiles; cf. for the remainder the overview of jurisprudence in Magnus, loco citato, Article 49 CISG margin number 38). The Appellate Court Turku of Finland (IHR 2004, 277, 281) did not have to fix a period for the avoidance of the contract for the sale of forestry equipment. Due to a lack of a secondary market, a period of two months could have been reasonable; however, three years -- which passed until the buyer declared the avoidance of the contract -- on no account, as confirmed by the Appellate Court).

There are no special reasons which could justify an extension of the period to over two and a half months:

   -    It is true that the period has to be extended if the establishment of the facts and the legal assessment are complicated (e.g., judgment of the Hof Gravenhage of Netherlands of 23 April 2003, IHR 2004, 119, the reasoning of which could be compared to LG Freiburg, IHR 2003, 22). However, this has not been the case as the [Buyer] immediately noticed the repainting in the present case and as the contract explicitly provided for consequences in respect to a lack of conformity.
 
   -    The allegation of the [Buyer] in the letter of 14 March 2008 that it had not been able to collect the car from the customs premises before 28 August 2006 and thus had only been able to thoroughly examine the car over one and a half months after the first notice, is irrelevant in the present case. This is due to the fact that the [Buyer] has obviously already been able to precisely calculate the costs of a repainting and request a reduction of the purchase price, namely, EUR 900 after its own inspection in July 2006. Hence, it is questionable why the decision to avoid the contract could only be made after a second professional examination, even if one takes into account that the [Seller] questioned the amount of the reduction (and not the reduction per se as alleged by the attorney of the [Buyer] in the letter of 14 March 2008). Therefore, it does not have to be decided whether the delay in delivering the necessary paperwork for the customs clearance can be attributed to the [Buyer] (as alleged by the former attorney of the [Seller] in a letter of 11 August 2006).
 
   -    In addition, it does not have to be commented on the issue why the first invoice in respect to parking is dated 7 August 2006 and thus covers the period of time where the car allegedly still was on the customs premises. However, this invoice does not differ from those which were issued in respect to parking after the alleged clearance on 28 August 2006.

The accumulation of several holidays can lead to an extension of the period of time as well (Hof 's-Gravenhage, loco citato). However, this has not been alleged by the [Buyer] in respect to Latvia for the time from July to September.

   -    Holiday season can only lead to an extension of the period of time if companies are involved and if additional specific circumstances are present. It can be assumed that there is a holiday replacement if the director of a corporation is on holiday in order to secure the company's capacity to act. This can particularly be assumed if the absence of the director of the [Buyer] between 1 September 2006 and 20 September 2006 was due to professional reasons. It is true that a different assumption could be reached if there are general business holidays in a certain State.
 
   -    However, in this case it would have to be assessed whether the [Buyer] would be obliged to inform the [Seller] about this peculiarity or whether it would have been possible for the [Seller] to easily obtain the necessary information. Nevertheless, this does not have to be decided as the [Buyer] did not allege that such a general regulation existed in Latvia. Furthermore, even if this was the case, one would have to assume that the few transactions which take place during such general business holidays would be completed immediately after the end of these holidays. Taking the aforementioned two-months period into account the [Buyer] would have been obliged to complete this on 7 September 2006 at the latest.

Thus, an extension of the period would have only been possible on the basis that it could not be expected from the [Buyer] to avoid the contract while the parties were still negotiating in order to achieve an extra-judicial agreement. (cf. OLG Koblenz, loco citato; hence, it is not necessary to refer to German law -- as the attorney of the [Buyer] alleged). However, this cannot justify the extension of a two-months period. On the one hand, such an extension is generally barred as the [Seller] refused any agreement which would have resulted in a reduction of the purchase price-- in contrast to the allegations of the attorney of the [Buyer] of 14 March 2008. Following the notice of the [Buyer] of 15 July 2006 which also contained the request to reduce the price by EUR 2,500, the [Seller] solely offered the delivery of the winter tires -- as the [Buyer] had additionally requested -- and referred for the remainder to the possibility to initiate legal proceedings. Thus, the [Seller] continued its disputed behavior, which, however, was continuously alleged by the [Buyer], namely, to refuse to accept a notice of a lack of conformity via telephone and to emphatically deny any lack of conformity. It is true that the attorneys of the parties continued to correspond on 9, 11 and 15 August 2006, however, the [Seller] never stated that it would agree to a reduction. On the contrary, the [Seller] offered in a letter of 11 August 2006 that it would be willing to accept a reverse transaction. Hence, the period to accept a reduction of EUR 1,500 until 26 August 2006 set by the [Buyer] on 15 August 2006 remained futile.

Therefore, as from the very beginning, the [Seller] was only willing to accept an agreement on the basis of an avoidance of the contract, there was no need for the [Buyer] to delay its declaration of avoidance in order not to frustrate the negotiations.

Solely the fact whether the [Buyer] was obliged to await is decisive and not whether the [Seller] had to reckon with the [Buyer] avoiding the contract, which -- taking the correspondence of the parties into account -- was not the case anyway as the [Buyer] only threatened to avoid the contract in the beginning, but solely claimed a reduction of the purchase price in the following.

Even if one assumed that the latter was not true, the negotiations could be qualified as futile on 23 August 2006 at the latest when the period set by the [Buyer] had passed. In this case, there had only been a maximum of two weeks left in order to decide what to do next, if such considerations would not have been initiated at a much earlier point in time due to the negative statements of the [Seller], which in turn would have led to the possibility to immediately declare the contract avoided following 23 August 2006. Thus the end of the period to declare the contract avoided would have been 7 September 2006, namely, two months after the initial discovery of the lack of conformity. The alleged absence of the director of the [Buyer] starting on 1 September 2006 does not lead to a different assumption, as the [Buyer] would either have been obliged to authorize a third person to timely declare the contract avoided or to issue such a declaration until 31 August 2006 (see above). For the aforementioned reasons, an extension of the period can not be based on the professional inspection of the car in September 2006.

It does not have to be decided whether fraud or gross negligence on the side of the seller in respect to the lack of conformity bars the application of any period or extends the period analogous to Article 40 CISG. This is due to the fact that the [Buyer] fails to prove -- irrespective of the fact that the allegation has to be taken into account according to § 531 section 2 clause 1 number 1 alternative 1 ZPO [*] notwithstanding that it has not been brought forward during the proceedings in the first instance -- that the [Seller] had been aware of the repainting at the time of the conclusion of the contract. In addition, the [Buyer] did not allege any gross negligence by the [Seller]. The wording of Article 40 CISG suggests that the buyer bears the burden of proof in this respect.

The [Buyer] is not entitled to any claims in addition to the restitution of the purchase price.

The costs for the transfer of the car cannot be claimed as damages (Articles 74 CISG et seq.) as the [Buyer] has to keep the car, taking the remaining legal remedies into account. Hence, it is impossible to put these costs down to the fact that there has been a lack of conformity.

The parking costs cannot be claimed at any rate.

This can be inferred from the fact that the [Buyer] -- following the loss of the right to rely on an avoidance of the contract -- is not barred from using or disposing of the car according to the right to claim a reduction according to Article 50 CISG, wherefore these costs cannot be put down to the fact that the [Seller] breached its contractual obligation. The [Buyer] would at least have to be blamed partially for the fact that the correct legal remedy was claimed belated according to Article 77 CISG.

It has still not been established what the [Buyer] actually intended to do with the car until the point in time when it lost its right to avoid the contract. Therefore, it cannot be assessed whether the [Buyer] would have incurred any costs in case the car had been in conformity with the contract (e.g. in order to rent a garage). This is due to the fact that on the one hand the attorney of the [Buyer] alleged during the oral proceedings in the Court of First Instance that the car had been bought on behalf of an employee of the [Buyer] and that on the other hand the written submission of 14 March 2008 states that it was the [Buyer] who had to take care of the car.

In addition, the [Buyer] is not entitled to claim the costs for the inspection.

Notwithstanding the criticism of the Court the [Buyer] failed to substantiate the inner coherence between this inspection and the lack of conformity as regards the repainting. In particular, the invoice which has been submitted has not been issued by the company which allegedly carried out the inspection following the customs clearance.

These costs could neither be claimed if they were based on a different lack of conformity, as in this case the exclusion of a guarantee in respect to any defects apart from paint and damages caused by accidents -- which the parties have explicitly agreed on and which has not been contested by the [Buyer] -- would apply.

The [Buyer] is not entitled to claim the costs for the translation, as these costs can in general not be claimed.

There is no reason to permit any further appeal (Revision § 543 ZPO [*]). The legal basis for the application of the CISG and the interpretation of Article 49(2)(b) CISG have sufficiently been clarified. This Court does not deviate from the preceding jurisdiction of the Supreme Court. The assessment of the individual case cannot be effected by the Supreme Court. This applies to the denial of any right to claim damages as well.

The written submission of the [Buyer] of 14 March 2008 does not lead to a re-opening of the proceedings (§ 156 ZPO). The legal outcome would not be different if the whole content was considered as correct. Thus, it is not necessary to grant fair hearing to the [Buyer] -- in particular not in the form of oral proceedings.

Nor can a re-opening of proceedings be based on § 156 section 2 number 1 ZPO [*]. There is no procedural error, as the attorney of the [Seller] has already adverted to the aforementioned aspects in his written submission of 25 February 2008 und thus prior to the oral proceedings. Therefore, neither a hint of the Court nor the granting of an additional period for filing a pleading has been necessary, in particular, as the appearance in person of the [Buyer] has been requested by the Court, wherefore it would have been possible for the [Buyer] to effect any necessary declarations during the oral proceedings (§ 139 V ZPO).


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Latvia 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]; EGBGB = Einführungsgesetz zum Bürgerlichen Gesetzbuche [German Code on the Conflict of Laws]; HGB = Handelsgesetzbuch [German Commercial Code]; IHR = Internationales Handelsrecht [German journal on international commercial law]; NJW = Neue Juristische Wochenschrift [German law journal]; OLGR = OLG Report [case report of the German Appellate Courts]; 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.

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Pace Law School Institute of International Commercial Law - Last updated June 6, 2013
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