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CISG CASE PRESENTATION

Germany 15 October 2009 District Court Stuttgart (Printing machine case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/091015g1.html]

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

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Case identification

DATE OF DECISION: 20091015 (15 October 2009)

JURISDICTION: Germany

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

JUDGE(S): Dr. Brenner (Presiding Judge)

CASE NUMBER/DOCKET NUMBER: 39 O 31/09 KfH

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

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Believed to be from Germany (defendant)

BUYER'S COUNTRY: Believed to be from Hungary (plaintiff)

GOODS INVOLVED: Printing machine


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 8 ; 39 ; 74 ; 78

Classification of issues using UNCITRAL classification code numbers:

8C [Interpretation of party's statements or other conduct (interpretation in light of surrounding circumstances): court stated that "in contracts à that are governed by the CISG, inclusion of the general conditions of sale implies that the party applying the general conditions of sale must send over the general conditions to the other party or make them available to it."]

39A ; 39A11 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Specification of nature of non-conformity: degree of specificity required];

74A [General rules for measuring damages (loss suffered as consequence of breach): although the CISG was the governing law, the court calculated damages based on Art. 632 BGB];

78B [Rate of interest: the court calculated interest based on Arts. 286 and 288 BGB]

Descriptors: Standard terms and conditions ; Lack of conformity notice, timeliness ; Lack of conformity notice, specificity ; 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): CISG-online.ch database <http://globalsaleslaw.com/content/api/cisg/urteile/2019.pdf>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Stuttgart

15 October 2009

Translation [*] by Andrea Vincze [**]

Edited by Institut für auslndisches und internationals
Privat- und Wirtschaftsrecht der Universität Heidelberg
Daniel Nagel [***]

[...]

This is a proceeding in which [Buyer] claimed compensation from [Seller] following purchase of an allegedly defective printing machine and [Seller] filed a counterclaim to recover the costs of repair.

JUDGMENT

Following an oral hearing on 9 September 2009, the Stuttgart District Court handed down the following judgment:

   1.    The [Buyer]'s claim is rejected. The [Seller]'s counterclaim is accepted.
   2.    [Buyer] is ordered to pay to [Seller] EUR 14,696.93 plus interest at the base rate plus 8 percentage points, as of 19 July 2006.
   3.    [Buyer] has to bear the costs of the proceedings.
   4.    The judgment is provisionally enforceable against payment of a security deposit of 115% of the amount to be enforced.

FACTS OF THE CASE

On 29 June 2005, [Buyer] purchased from [Seller] a used printing machine for EUR 470,000. The machine was delivered on 22 August 2005 and handed over on 31 August 2005. Subsequently, differences arose between the parties because of defects alleged by [Buyer] regarding the machine in dispute.

Following repair works by [Seller] in March 2006, after which the alleged defects ceased to exist, [Seller] submitted to [Buyer] an invoice for the cost of the repair, that being the subject of the [Seller]'s counterclaim.

[Buyer] alleges that immediately after taking over the printing machine, it started to vibrate, consumed electricity excessively and overheated, causing a shut-down of the machine, probably because [Seller] failed to test the lubrication system of the machine and to appropriately lubricate it. In early September, [Buyer] informed [Seller] about this through the [Seller]'s regional representative (witness [...]), however, inspection and repair of the defect was refused on 3 September 2005.

[Buyer] argues that [Seller] should be ordered to compensate for the damages that occurred as a result of excessive consumption of electricity between 1 September 2005 and 27 February 2006, for the costs of the unsuccessful repair attempts, for the loss of value based on excessive wear and tear, for wages incurred, for production material expenses, interests and lost profit, amounting to a total of EUR 244,276.03.

These requests for compensation would not be time-barred, because the request for damages was filed with the Metropolitan Court of Budapest in Hungary already on 20 October 2006. That claim was dismissed on 4 October 2007 due to lack of international jurisdiction, and following an unsuccessful appeal gained res judicata effect only on 25 March 2008.

[Buyer] requests the court to order [Seller] to pay to [Buyer] EUR 244,276.03 plus default interest from 20 January 2007, at the base rate of the German Federal Bank plus 8 percent, and regarding a partial amount of EUR 35,931.02, from 3 September 2005.

[Seller] requests the court to dismiss the [Buyer]'s claim, and to honor [Seller]'s counterclaim and order [Buyer] to pay to [Seller] EUR 14,696.93 plus interest at the base rate plus 8 percentage points from 19 July 2006.

[Seller] contests the defects of the printing machine alleged by the [Buyer] and states that it was [Buyer] that chose the wrong lubricant. [Seller argues that] the defects referred to by [Buyer] were first communicated on 30 November 2005, i.e., too late. Early September, witness [...], who, by the way, had not been its regional representative, merely gave notice of a short circuit that is not subject to the dispute. Therefore, [Seller] is not obliged to compensate for the damages, the amount of which is also disputed, regardless of the fact that such claims are time-barred, at least to the extent they arise out of the claims that had already been asserted in Hungary.

Evidence was submitted to the court that heard witnesses [...] and [...]. The results of the hearing of the evidence can be found in the minutes of 9 September 2009 (p. 229 et seq.).

For the detailed facts of the case and arguments of the parties, the court refers to the written communications exchanged between the parties and the attachments thereto.

REASONS FOR THE DECISION

Both the [Buyer]'s claim and the [Seller]'s counterclaim are admissible, however, only the [Seller]'s counterclaim is justified.

I.   The [Buyer]'s claim is not justified. It does not have to be decided whether the [Buyer]'s requests for compensation are time-barred, or at least partially time-barred regarding those arising out of claims that had already been asserted before the Metropolitan Court of Budapest in Hungary, because [Buyer] failed to exercise its duty to give notice of the defect under Art. 39(1) of the United Nations Convention on Contracts for the International Sale of Goods (CISG).

      1. Contrary to the [Seller]'s argument, the present dispute is governed by the CISG, and its application is not excluded by Art. 9(2) of the [Seller]'s general conditions of sale because the [Seller]'s "general conditions of sale" (exhibit B8, p. 122 of the file) did not validly become part of the contract.

It is true that in contracts with companies, the general conditions of sale do not have to be attached to the documents relating to contract conclusion, however, in sales contracts that are governed by the CISG, inclusion of the general conditions of sale implies that the party applying them must send over the general conditions to the other party or make them available to it (cf. BGH [*] NJW [*] 2002, p. 370 and Palandt-Grneberg, BGB [*], 68th ed., 2009, 305 no. 54).

It is neither apparent nor was it proved by [Seller] during the taking of evidence whether the [Seller]'s general conditions of sale were sent or made available to [Buyer].

       2. However, the [Buyer]'s claim fails because [Buyer], bearing the burden of proof (cf. Schlechtriem / Schwenzer, CISG, 5th ed., 2008, on Art. 39, no. 37), was not able to provide convincing evidence regarding a timely complaint during the taking of evidence.

It is disputed how to measure the "reasonable time" regarding the defect determined under Art. 39 CISG, however, according to jurisprudence and the leading doctrine, the gross average is approximately one month (cf. Schlechtriem / Schwenzer, op. cit., No. 17, with further references). In any case, an almost three-month period between discovering and giving notice [of a defect], as is the case here, does not meet the requirements set out in Art. 39(1) CISG, as û on the basis of [Buyer]'s own allegations -- the defects detected, i.e., vibrations, excessive electricity consumption and overheating causing shut-down of the machine subject to the dispute, occurred immediately after the machine was handed over early September, but the respective observations of [Seller] were communicated only after the evidence was taken on 30 November 2005.

Witnesses [...] and [...] could not corroborate that the respective problem, as claimed by [Buyer], had already been communicated to [Seller] through the witnesses in early September 2005. The court did not receive any evidence raising doubt as to the statements of the witnesses who had been credible so far, despite the fact that witness [...] was an employee of [Seller], therefore, the possibility of having an interest in a certain outcome of the legal dispute can be dismissed.

It is irrelevant that [Seller] was notified in early September 2005 about a short circuit regarding the printing machine delivered, as stated by witness [...] and otherwise not disputed by the parties, because the latter defect is not subject to the present dispute which involved [complaints regarding] vibration, excessive electricity consumption and overheating causing shut-down of the machine; and in any case, such a notification would not have been sufficient to meet the requirements concerning specification of a non-conformity. The complaint must describe the alleged non-conformity in such detail that the seller is able to picture to himself the non-conformity in order to take the necessary measures, such as to send a representative to the buyer to examine the goods, to secure the necessary evidence for potential disputes regarding conformity of the goods, to offer exchange, additional delivery or cure the defect, or to have recourse against a supplier (cf. op. cit., no. 6). Communicating a mere short circuit did not meet the above requirement, in particular, as according to the statement of witness [...] [the communication] regarding the short circuit did not contain any complaint, it was merely a notification about the problem and [Buyer] instructed [...] to eliminate the problem the following day.

       3. Thus it does not have to be decided whether there was any defect at all that [Seller] is responsible for regarding the printing machine, as claimed by [Buyer], [and whether Seller] is responsible for the damages claimed by [Buyer] in the amount [claimed].

II.  Pursuant to Art. 632 BGB [*], [Seller] is entitled to recover the costs of the repair requested, the amount of which is undisputed, equaling EUR 14,696.93, to the extent that the repair was requested by [Buyer]; and based on the grounds listed in section I, [Buyer] cannot state that the respective claims fail due to the fact that measures were taken in order to overcome the defect, especially because as evidenced by the invoices submitted (exhibit B30, p. 154 et seq. of the file), only one repair invoice referred to the machine in dispute.

III. The request for interest is governed by Arts. 286 and 288 BGB. The decision on costs is based on Art. 91(1) ZPO [*]. The decision on provisional enforceability is based on Art. 709 ZPO. The determination of the amount in dispute is based on Arts. 63(2), 45(1) GKV, in conjunction with Art. 3 ZPO.

Regarding the dismissed arguments submitted by [Buyer] in its written filing on 22 September 2009, the reopening of the oral hearing was not ordered under Art. 296(a), in comparison with Arts. 283, 156 and 139(5) ZPO, in particular, as that would not change the outcome even if the [Buyer]'s presentation is assumed correct, in that [Buyer] described to witness [...] the alleged technical problems several times in September 2005 and with great regularity, and that the witness simply did not remember that. Under Art. 91(2) HGB [*], such knowledge by witness [...], even if he did not pass it on to [Seller], would matter only if he had been a regional or commercial representative of [Seller], as alleged by [Buyer]. However, regarding the above, [Seller] indicated that witness [...] ceased its commercial agency activities on 31 December 2004, i.e., he was not a [commercial representative] at the time of conclusion and performance of the contract, and [the fact of witness [...] being a commercial representative] was always denied by [Seller] and witness [...] did not acknowledge it either -- yet, [Buyer], who had the burden of proof regarding the latter, did not provide any evidence concerning its arguments to the contrary. Regarding the latter, based on [Seller]'s written submission of 6 October 2009, a reopening of the oral hearing was not ordered.

Dr. Brenner
Presiding Judge at the District Court


FOOTNOTES

* All translations should be cross-checked against the original text. For purposes of this translation, the Plaintiff in the main claim and Defendant in the counterclaim is referred to as the [Buyer] and the Defendant in the main claim and Plaintiff in the counterclaim is referred to as the [Seller]. Funds in the European currency (Euro) are indicated as [Eur].

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGH = Bundesgerichtshof [Federal Supreme Court of Germany]; HGB = Handelsgesetzbuch [German Commercial Code]; NJW = Neue Juristische Wochenshrift [German law journal]; ZPO = Zivilprozessordnumg [German Code on Civil Procedure].

** Andrea Vincze is a Fellow of the Institute of International Commercial Law of the Pace University School of Law. She received her law degree from the University of Miskolc, Hungary, and her LL.M. at Pace Law School. She is working on her Ph.D. on ICSID arbitration, and is researching international commercial law and ADR.

*** 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 March 8, 2010
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