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CISG CASE PRESENTATION

Germany 13 February 2013 Appellate Court Naumburg (Cereal case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/130213g1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20130213 (13 February 2013)

JURISDICTION: Germany

TRIBUNAL: OLG Naumburg [OLG = Oberlandesgericht = Provincial Court of Appeal]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 12 U 153/12

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

CASE HISTORY: : 1st instance LG Stendal, 20 September 2012 [31 O 57/11]

SELLER'S COUNTRY: Switzerland

BUYER'S COUNTRY: Germany

GOODS INVOLVED: Cereal (Getreide)


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 6 ; 7(1) ; 8 ; 14 ; 18 [Also Cited: Article 2 ]

Classification of issues using UNCITRAL classification code numbers:

6A [Exclusion or modification of Convention by contract];

7A1 [International character (art. 7(1))];

8A ; 8B ; 8C [Intent of party making statement or engaging in conduct (art. 8(1)); Interpretation based on objective standards (art. 8(2)) ; Interpretation in light of surrounding circumstances (art. 8(3))]

14A ; 14A1 [Basic criterion - intention to be bound in case of acceptance ; Definiteness of key conditions]

Descriptors: Conformity of goods ; Cover transactions ; Cure ; Damages ; Examination of goods ; Price ; Specification of goods ; Standard terms and conditions ; Good Faith ; Interpretation of Convention

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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://www.globalsaleslaw.org/content/api/cisg/urteile/2455.pdf>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

The CISG Translation Network

Appellate Court (Oberlandesgericht) Naumburg

13 February 2013 [12 U 153/12 (Hs)]

Translation [*] by Jan Henning Berg [**]

JUDGMENT

FACTS

[Buyer] has sued Defendant [Seller] for payment of damages arising out of a sales contract for the delivery of poppy seeds, type ‘papaver somniferum’. [Buyer] and its affiliate F.___ Back GmbH are engaged in the manufacture of bakery products. Altogether, there a three companies comprising the F.___ group. Alongside [Buyer], which is domiciled in I.___, the group is comprised of the said F.___ Back GmbH and F.___ GmbH, which are both domiciled in B.___. [Buyer] and F.___ Back GmbH also belong to the H.___ group, which is domiciled in Switzerland. The latter forms part of the A.___ group with its business seat located in Z.___. H.___ Services AG is also part of the H.___ group of companies. It is, inter alia, engaged in the preparation, administration, and control of the financing, acquisition and delivery of raw materials. With relevance for these commercial tasks, it is empowered to represent [Buyer] vis-à-vis third parties.

[Seller] is, inter alia, engaged in the import of dried tropical fruit with a particular expertise in the trade of poppy seeds. By email of 12 November 2010, [Seller] made an offer for the sale of poppy seeds at a price of EUR 1.90 per kilogram and inquired as to whether the sample should be delivered to Mr. B.___ at company H.___ or to F.___ Back GmbH. Towards the end of its text, the email containing that offer reads: “based on the conditions set by the NZV”. In this context, the abbreviation “NZV” refers to the “Nederlandese Vereiniging voor de handel in Gedroogde Zuidvruchten, Specerijen en Aanverwante Artikelen” (Netherlands Association for the Trade in Dried Fruit, Spices and Allied Products).

According to Art. 3 of the general provisions imposed by the NZV (hereafter: “NZV Conditions”), all contracts concluded under its terms shall be governed by the laws of the Netherlands, irrespective of nationality or business seat of the contracting parties. Moreover, the buyer shall not be entitled to claim damages or to declare cancelation of the contract after he has notified a lack of conformity of the goods (Art. 10 No. 3 NZV Conditions). However, he shall be entitled to compensation for any loss in value. The buyer may cancel the contract with or without an additional claim for damages only in accordance with the specific restrictions contained in Art. 10 No. 4 NZV Conditions, which requires either an extraordinary loss in value or that there has been delivery of goods of a different kind, origin or harvest or that the goods have been packaged or marked in a different manner. In this respect, all contracts concluded under these standard terms are also governed by the NZV Arbitration Rules. Art. 11 No. 1 NZV Conditions states that these rules shall form part of the contract, as well. According to Art. 2 of the NZV Arbitration Rules, all disputes arising out of contracts governed by the NZV Conditions and/or NZV Arbitration Rules shall be settled by a court of arbitration established under the NZV Arbitration Rules. Reference is made to exhibit B3 (vol. 1, pp. 76 et seq. of the file) as regards the entire content of the NZV Conditions and the NZV Arbitration Rules.

By email of 12 November 2010, purchasing agent B.___ of H.___ Services AG requested that a sample be delivered to F.___ Back GmbH. The latter confirmed to have received that sample by email of 23 November 2010. With another email of 26 November 2010, F.___ Back GmbH confirmed that the sample was sensorically acceptable. It also mentioned certain requirements which the poppy seeds would have to meet (inter alia: “flavour: clean and characteristic, not musty, moldy, rancid or old”). Moreover, it requested that [Seller] complete, sign and return the documents accompanying the email. [Seller] did so. Reference is made to exhibit B1 (vol. 1, pp. 69-74 and 155-161 of the file) regarding the additional content of the emails mentioned before.

On 12 January 2011, [Seller] and a representative of H.___ Services AG signed a so-called “Supplier Cost Sheet”, according to which a part of the consignment should be delivered to B.___ and another part to [Buyer] in I.___. For all details, reference is directed to exhibit K1. On the same day, [Seller] also sent a letter to H.___ Services AG, which reads:

“…We hereby confirm contract 3824.
Product: poppy seeds (CZ (A1, purity: 99.95%))
Quality according to sample and letter of acceptance.
Quantity: 22,500 kg …
Price: EUR 1.79 per kg
EUR 1.82 per kg (including 2% kickback bonus)
Terms of delivery: Delivery free to B.___ or I.___ on type H1 plastic pallets
Delivery: Not less than 4,500 kg between February and December 2011
Payment: net price within 30 days
Law: NZV Conditions
Business conditions and Arbitration Rules of the Netherlands Association for the Trade in Dried Fruit, Spices and Allied Products.
Many thanks for having placed this order …”

Reference is made to exhibit B2 (vol. 1, p. 75 of the file) for all further details of this letter.

On 27 January 2011, [Seller] delivered 2,250 kilograms and then on 1 February 2011 another 4,500 kilograms of poppy seeds to [Buyer] in I.___. They were packaged on pallets in sacks of 35 kilograms each. As of 6 February 2011, the seeds were being used at a large scale for the manufacture of convenience products (inter alia: grain and curd sticks and sandwiches).

On 11 February 2011, [Buyer] ceased any dealings with the bakery products which had already been manufactured by that time. Production was halted with respect to those poppy seeds which had not already been processed. However, part of the poppy seeds remained in use in the meantime to continue production at a smaller scale. On 15 February 2011, [Buyer] finally decided to cease its operations entirely. It notified [Seller] of a lack of conformity of the goods. [Buyer] indicated that the poppy seeds had a strong musty, rancid flavour and smell. For all further details, reference is directed to exhibit K12.

On 17 February 2011, a meeting was held at [Buyer]’s factory in I.___, which was inter alia attended by an employee of [Seller] and another representative of [Seller]’s pre-supplier. Afterwards, [Seller] mandated a laboratory analysis. With respect to the results of that analysis, which had been carried out by T.___ Laboratories between 24 February and 3 March 2011, reference is directed to exhibits K14 to K16. Afterwards, [Buyer] mandated another laboratory in order to have the poppy seeds examined by itself. According to the corresponding report prepared by I.___ GmbH, the result of a sensorical analysis of the seeds in unprocessed condition indicated a slightly old, musty smell and a musty, slightly old and dull flavour. With respect to the condition of the seeds after having been heated, the sensorical analysis indicated an old, musty smell and a musty, old and dull flavour. According to the report, the analysed sample showed remarkable differences in terms of the sensorical properties of the analysed parameters (smell and, in particular, flavour). Overall, the poppy seeds were qualified as ‘not marketable’. For all additional details of the laboratory report, reference is directed to exhibit K17. [Seller] then accepted return of the unprocessed seeds against reimbursement of the purchase price. [Buyer]’s affiliate company as well as H.___ Services AG assigned any possible claims against [Seller] to [Buyer].

POSITION OF THE PARTIES BEFORE THE COURT OF FIRST INSTANCE

Position of [Buyer]

[Buyer] has asserted that -- together with F.___ Back GmbH -- it entered into a contract with [Seller] which did not provide for application of the NZV Conditions. The parties had never contemplated any arbitration agreement in the course of their negotiations. All terms agreed upon by the parties were exhaustively laid out in the “Supplier Cost Sheet”. There was no apparent reason for any subsequent order confirmation letter because it contained all essential terms of the sales contract. There were no additional oral agreements. The NZV Conditions were not even mentioned prior to or in the course of the negotiations. To the contrary, the parties came to an agreement to the effect that no standard terms should be incorporated. The only purpose of [Seller]’s confirmation letter could have been to incorporate its own standard terms without any understanding between the parties to that effect. Since the confirmation letter itself departed to a considerable extent from the existing agreement between the parties, it cannot be invoked against [Buyer]. Moreover, [Seller] had no reason to assume that [Buyer] might subsequently approve of its conditions.

[Buyer] has further asserted that the initial examination of the poppy seeds delivered on 27 January 2011 did not show any abnormal characteristics. This is why [Buyer] continued to use that consignment after 6 February 2011 in the manufacture of its various bakery products. The so-called “dough label” made it possible to identify the items produced using these specific raw materials. A distinct strange flavour of the poppy seed coating on a certain part of the bakery products was first identified on 11 February 2011 in the course of a quality control. The relevant consignment of poppy seeds was examined and identified as being deficient. On the other hand, the poppy seeds which were part of the second delivery of 1 February 2011 were identified as according to specification. Therefore, [Buyer] continued its production using the poppy seeds from the second consignment. However, a tasting, which was carried out on 15 February 2011, showed an inadequate flavour of that consignment just as well. In the course of a scheduled meeting on 27 February 2011, [Seller] promised to have samples of that consignment examined by the independent analytical laboratory E.___ NL. [Buyer] had never received any results from that examination. The results presented by [Seller] arising out of an examination carried out by T.___ Laboratories were insignificant, because two out of three samples examined had not been taken from the consignment which is subject to the present proceedings. Furthermore, [Seller] failed to require any sensorical examination, particularly with respect to smell and taste. The laboratory commissioned by [Buyer] confirmed that the poppy seeds were deficient. The same was also declared by [Seller]’s employees.

[Buyer] claims that it suffered damages amounting in total to EUR 95,627.81 as a result of the lack of conformity of the poppy seeds. This sum consisted of EUR 54,858.06 in production costs, EUR 618.80 in analytical costs, EUR 16,744.76 in storage costs, EUR 1,155.00 in transport costs plus expenses for cover purchases of EUR 4,564.50, additional expenses of EUR 14,995.41 and out-of-court attorney’s fees of EUR 2,691.28.

[Buyer] has requested the Court

  1. to order [Seller] to pay EUR 92,936.53 plus interest in the amount of 7% above the respective base lending rate since 6 February 2011,
  1. to order [Seller] to pay costs for out-of-court debt collection in the amount of EUR 2,691.28.

Position of [Seller]

[Seller] has requested the Court to dismiss [Buyer]’s action.

[Seller] has asserted that a contract was being concluded with F.___ Back GmbH, domiciled in B.___. Consequently, [Buyer] lacked standing to sue [Seller] for non-performance. Moreover, the NZV Conditions became part of the contract, which provide that all disputes shall be resolved by the NZV Court of Arbitration. In this respect, [Seller] has already invoked the arbitration agreement in the present proceedings.

In addition, [Seller] has contested [Buyer]’s allegation that it delivered defective poppy seeds. These were being examined before shipping and always indicated good quality. Had [Buyer] properly examined the goods by itself, it would have identified the alleged lacks of conformity on a daily basis. [Buyer] also failed to comply with its duty to mitigate damages. It had to refrain from using the allegedly deficient poppy seeds in its production process from the outset. In any event, [Buyer] had to cease production at an earlier stage.

REASONING OF THE COURT OF FIRST INSTANCE

The District Court (Landgericht) has dismissed [Buyer]’s action as inadmissible. It reasoned that, while it had international jurisdiction to deal with the case, any proceedings before a state court were barred because of [Seller]’s invocation of an existing arbitration agreement prior to the oral hearing.

The parties gave effect to the NZV Conditions in their contract. It is true that the “Supplier Cost Sheet” of 12 January 2011 did not make any reference in that respect. However, the NZV Conditions were incorporated into the contract through the commercial letter of confirmation of 12 January 2011. Art. 11 No. 1 NZV Conditions provides that all disputes arising from or in connection with contracts made on NZV Conditions shall be settled by arbitration in accordance with the NZV Arbitration Rules. [Buyer] was bound by this provision.

POSITION OF THE PARTIES ON APPEAL

Position of [Buyer]

With its statement of appeal, [Buyer] seeks to pursue its previous claim in its entirety. It asserts that the action should be considered admissible. The District Court failed to indicate that [Seller] was obliged to accept [Buyer]’s quality standards set out in exhibits K3 and K4 as well as the specifications for raw materials after the sample had been delivered. This formed the very basis for [Buyer] to even consider entering into a contract with [Seller]. Separate agreements were being finalized by [Seller]’s declarations of acceptance on 2 December 2010 and on 10 January 2011. The “recognized quality standards” (see exhibit K3) set out precisely which requirements [Seller] would have to meet with respect to its system of quality control and quality management. These standards also specified which ingredients were not allowed and which requirements were to be met in relation to transport and packaging of the products. Moreover, the raw material specification (presented as exhibit K4) contained a detailed description of necessary characteristics for any poppy seeds subject to delivery. For instance, the visual appearance, shape, flavour, microbiological threshold values and the type of packaging were specified in that document. The parties agreed on the “Supplier Cost Sheet” of 12 January 2011 (see exhibit K1) -- which formed the actual contract for the sale of 22,500 kg poppy seeds -- only later on, that is after the other agreements had been concluded. The “Supplier Cost Sheet” contained all essential items for a contract on the sale of the poppy seeds, namely price, object of purchase, quantity and terms of delivery. It was signed by authorized representatives of both parties. The order confirmation presented by [Seller] was submitted only at a later stage when the contractual relationship betwwen the parties had already been finalized, both comprehensively and in writing. According to the NZV Conditions, the laws of the Netherlands were applicable. In that respect, other terms for payment and notifications for lacks of conformity as well as particular rules on contractual liability were being put in place. [Seller] had to be aware of the fact that [Buyer] would never be willing to accept such disadvantageous conditions. Consequently, [Buyer] was not even obliged to declare its objection against [Seller]’s attempt to incorporate the NZV Conditions.

[Seller] has demanded in its memorandum of 1 February 2013 that [Buyer]’s submissions should be held irrelevant as not having been made within the appropriate time.

[Buyer] requests the Court

  1. to amend the judgment rendered by the District Court Stendal on 20 September 2012 and to order [Seller] to pay EUR 92,936,53 plus interest in the amount of 7% above the respective base lending rate since 6 February 2011;
  1. to order [Seller] to pay costs for out-of-court debt collection in the amount of EUR 2,691.28;

Position of [Seller]

[Seller] requests the Court

[Seller] argues in defense of the District Court judgment. It claims that the NZV Conditions were made part of the contract after it had expressly referred to them in the commercial letter of confirmation of 12 January 2011 and after [Buyer] did not declare any objections against that letter afterwards. While the “Supplier Cost Sheet” did actually contain the essential elements of the contract and several ancillary provisions, it did not incorporate all such ancillary provisions in a comprehensive manner. In particular, the “Supplier Cost Sheet” did not provide for an incorporation of the NZV Conditions and, in particular, any arbitration agreement conferring jurisdiction with the NZV. It did not contain any agreement relating to the question of dispute settlement.

By memorandum of 1 February 2013, [Seller] has submitted that it already offered [Buyer] delivery of poppy seeds at a price of EUR 1.90 per kg “based on the NZV Conditions” by email dated 12 November 2010. In the following, the parties negotiated the purchase price. On 12 January 2011, the parties had their final conversation, in the course of which they came to an oral agreement on the sale of 22,500 kg poppy seeds at a price of EUR 1.79 per kg. On the same day (12 January 2011), [Seller] sent [Buyer] its letter of confirmation via fax. By email of 19 January 2011, that is one week afterwards, [Buyer] submitted its “Supplier Cost Sheet” containing the negotiated price and asked [Seller] to sign that document. [Seller] then signed the “Supplier Cost Sheet” and returned it via email to [Buyer] on the same day. While that document concerned the sales contract of 12 January 2011, the signature was applied only on 19 January 2011.

REASONING OF THE COURT

The appeal is admissible. It is also founded with respect to [Buyer]’s subsidiary motion to repeal the judgment rendered by the District Court and to remand the case to that court. The judgment rendered in first instance merely addresses the question of whether the action is admissible (§ 538 (2) (1) No. 3 ZPO). This question has been wrongly answered in the negative (§§ 513 (1) first case, 546 ZPO).

The District Court has correctly considered that international jurisdiction is to be determined in accordance with Council Regulation (EC) No. 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Brussels I Regulation). Under that set of rules, special jurisdiction lies with the courts at the place of performance of the contract (Art. 5 No. 1(b) Brussels I Regulation). Place of performance in terms of Art. 5 No. 1(b) Brussels I Regulation is I.___ in the present case, because [Seller] has made delivery of poppy seeds to that place in accordance with the contract. The District Court Stendal has territorial jurisdiction for the present case under § 29 (1) ZPO.

[Buyer]’s action is admissible. Contrary to the position taken by the District Court, [Seller] may not invoke the existence of an arbitration agreement in proceedings before a state court (§ 1031 (1) ZPO). The parties have not concluded a valid agreement to arbitrate. In particular, they failed to comply with the formal requirements as set out in § 1031 (1) ZPO. The arbitration agreement between the parties has neither been laid down in a single signed document nor have the parties exchanged letters which sufficiently prove the existence of an arbitration agreement.

While it suffices for a valid arbitration agreement under § 1031 (2) ZPO if the corresponding provision is incorporated in a document submitted by the other party and if it may be considered common usage that any terms contained in such document shall become binding between the parties in the absence of any objection raised within due time. This, however, is not the case here. The NZV Conditions have not become part of the contract after [Seller] made reference to them in its letter of confirmation of 12 January 2011. This is because [Seller] failed to include the text of these provisions in its letter or to make them known to [Buyer] through any other means.

The District Court has already failed to recognize that the contractual relationship between the parties is governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG). The CISG applies because both Germany and the Netherlands are Contracting States to the Convention (Art. 1 (1)(a) CISG). Furthermore, the CISG is not inapplicable according to the exclusion contained in Art. 2 CISG and the parties have not made a choice of law to the contrary.

Recourse must be had to Art. 14 and 18 CISG -- the provisions on the conclusion of contracts -- in order to determine whether general terms have been incorporated into a contract governed by the CISG. In this respect, recourse must not be had to the domestic substantive law which is applicable by virtue of international conflicts of laws rules (see e.g. BGH [*] NJW [*] 2002, 370 with further references). The same applies from a Dutch perspective (see e.g. Hoge Raad Den Haag, judgment of 28 January 2005, case docket C03/290HR, ZEuP [*] 2005, 605). The CISG itself does not contain any specific provisions on the incorporation of general terms into contracts. Therefore, it must be determined by way of an interpretation according to Art. 8 CISG whether such general terms shall be considered part of the contract.

In this respect, the law generally requires that the recipient of an offer to conclude a contract, of an order confirmation or of a commercial letter of confirmation has to have a reasonable opportunity to recognize that the other party making such declaration intends to incorporate its own standard terms (e.g. BGH NJW 2002, 370 with further references). Under the CISG, the party relying on the incorporation of standard terms needs to submit the relevant document as such or make it sufficiently accessible for the recipient. It would run contrary to the principle of good faith (Art. 7 (1) CISG) if the recipient were under a full duty to investigate the content of any standard terms which the declaring party has not sufficiently communicated or, in other words, if the recipient was burdened with the risk of unfavourable standard terms which had never been made known to it (BGH, ibid.). Given that there may be considerable differences between both parties’ standard terms , the recipient cannot reasonably foresee by itself which provisions the other party is about to incorporate into the contract when merely a reference is made. Even if the recipient were able to investigate the content of standard terms referred to by the other party, the process would unreasonable delay any contract conclusions to the recipient’s detriment. It cannot be invoked that it is sufficient under German substantive law that standard terms can already be incorporated into commercial contracts if the incorporating party grants the recipient a reasonable opportunity to recognize their content. In this respect, it must be considered that standard terms of companies from the same industries are often sufficiently similar or publicly-known in the course of domestic commerce to the effect that a duty of investigation on the part of the recipient may well be reasonable (BGH, ibid.).

The Court does not ignore the fact that this jurisprudence has been criticised by a number of legal scholars (e.g. Schmidt-Kessel, NJW 2002, 2444; Pötter/Hübner, EWiR [*] 2002, 339). These scholars have argued that it can well be expected of companies to communicate via email to the effect that any possible delays in the course of commerce remain marginal (e.g. Pötter/Hübner, ibid.). Moreover, it was not convincing to apply stricter standards to the incorporation of standard terms in international than in domestic commerce. In addition to that, it ran contrary to Art. 8 (2) CISG to implement an overall general rule under which standard terms may be incorporated without due consideration of whether the recipient is acting as a businessperson or final customer. According to Art. 8 (2) CISG, statements made by and other conduct of a party were to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances. Inter alia, trade usages needed to be considered. For instance, a mere reference to standard terms was sufficient to incorporate them into the contract under Dutch law, as well (e.g. Pötter/Hübner, ibid.).

The case law of other Supreme Courts throughout Europe is ambiguous to this question. In Belgium, the Tribunal Commercial de Nivelles has ruled that a mere reference to standard terms in contracts governed by the CISG is sufficient for their incorporation (see Pötter/Hübner, ibid.). The Austrian Supreme Court has determined that the CISG did not contain any specific requirements for the incorporation of standard terms . Consequently, the relevant legal rules were to be developed on the basis of Arts. 14 et seq. CISG, which address the issue of contract conclusion in a comprehensive manner. In order for standard terms to be properly incorporated into a contract, the recipient must be put in a position to readily identify the intention of the declaring party, namely that the terms shall form part of his offer. Incorporation may be effected by implication as a result of the negotiations or any particular usage established between the parties (OGH [*], judgment of 6 February 1996, 10 Ob 518/95).

However, German jurisprudence as applied by the higher courts has been following the reasoning of the German Federal Supreme Court (Bundesgerichtshof) which has been discussed above. For example, the Appellate Court of Munich has reasoned that the declaring party is required under the CISG to communicate its standard terms as such or to make them available by any other means for the recipient (IHR [*] 2009, 201). The requirements established under the domestic substantive laws of Germany, which allow for incorporation of standard terms into contracts concluded between businesspersons also if a mere reference has been given and the recipient is not readily aware of them as long as he has a possibility to identify the terms in a reasonable manner (e.g. via request with the declaring party), are not applicable in international commerce. In the light of the principle of good faith, it could not reasonably be expected of the recipient to investigate into the content of the relevant standard terms by itself.

With another decision of 24 July 2009 (NJW-RR [*] 2010, 136), the Regional Appellate Court (Oberlandesgericht) Celle has taken recourse to the said judgment rendered by the German Federal Supreme Court (Bundesgerichtshof) and reasoned that it was required under Art. 8 CISG for the party intending to incorporate standard terms to grant the recipient a reasonable possibility to acquaint itself with those terms. Under that ruling, the incorporating party shall be obliged in CISG cases to reveal its intention vis-à-vis the other party and to submit their text or make them available to the latter by any other means. The possibility existing under the domestic substantive laws of Germany that standard terms may -- for reasons of good faith -- be incorporated into contracts concluded between businesspersons even if the other party merely has a reasonable possibility to identify the terms without actually being positively aware of them cannot be extended to international commercial relationships. Given major differences among the types of clauses common in various domestic jurisdictions and given the lack of differentiation while applying the CISG to cases involving businesspersons and consumers, it ran contrary to the principle of good faith in international commerce and the general duty of the parties involved to cooperate with and inform each other to impose an obligation to investigate the content of standard terms which have not been communicated. The recipient could not be burdened with the risk and detriment of having to accept the validity of standard terms unknown to it.

Moreover and with similar reference to the case decided by the German Federal Supreme Court (Bundesgerichtshof), the Regional Appellate Court (Oberlandesgericht) Jena has confirmed in a judgment rendered on 10 November 2010 (BB [*] 2011, 468) that the CISG did not contain specific rules governing the incorporation of standard terms. The question were to be answered with recourse to an interpretation in accordance with Art. 8 CISG. In that respect, the recipient of an offer to conclude an contract needed to have an opportunity to identify the content of the relevant standard terms in a reasonable manner. This, again, required that the recipient can readily ascertain the offering party’s intent to incorporate its own standard terms into the contract. In addition, the offering party had to submit the text of the terms as such or make them available by other means. Contrary to what is sufficient in domestic commercial scenarios, it did not suffice in international commerce if the recipient only gets an opportunity to request the text of the terms from the declaring party. An obligation to investigate on the part of the recipient did not establish an opportunity to become aware of the terms in a reasonable manner.

As regards the present case, the Court is deciding in accordance with the existing jurisprudence laid out above. It cannot be dismissed that a greater risk of unknown -- yet applicable -- standard terms would ensue if the recipient were under a corresponding duty to investigate. Moreover, [Buyer] does not belong to the relevant group of businesses which are dealing with the NZV Conditions on a regular basis. While these rules are exclusively designed for Dutch fruit dealers, they are not suitable to being applied to final customers such as [Buyer]. Therefore, the latter did not have to take into account that the NZV Conditions might become readily applicable to its contract with [Seller]. It was at least possible and reasonable for [Seller] to make [Buyer] fully aware of the very wording of those standard terms.

With due consideration to the fact that one would have to do without a judging of the facts by a court in first instance, the Court holds it appropriate to refrain from making a final judgment concerning [Buyer]’s action in the course of the present appellate proceedings. This reasoning is also supported by both parties, which have both -- in the alternative -- requested that the judgment rendered by the District Court be repealed and the case be remanded to it. Moreover, the case cannot be readily adjudicated without another oral hearing and taking of evidence. In particular, evidence will have to be taken on [Buyer]’s allegation that the poppy seeds delivered by [Seller] were not in conformity with the contract. The pieces of evidence offered by both parties in that respect already demonstrate that such taking of evidence will have a significant complexity. At least one expert opinion will have to be commissioned. If the Court were to gather all of this evidence by itself in order to come to a final judgment on the merits, it would act well in excess of its main function as an appellate judicial body controlling the legality of judgments rendered by courts of first instance. Otherwise, the Court would factually assume the role of a court deciding the present case in first instance. This would not be appropriate for any of the parties involved since neither of them had any further right to have the facts so determined cross-checked by a court of second instance (e.g. BGH NJW-RR 2004, 1537; BGH MDR [*] 2005, 645).

In the absence of any final judgment on the merits of the dispute, the decision on costs will have to be made at a later stage by the District Court.

The decision on preliminary enforceability is based on § 708 No. 10 ZPO. Even though the judgment rendered by the court of first instance has been repealed and the case remanded, a decision by the appellate court on that question has to be made with recourse to §§ 775 No. 1, 776 ZPO (e.g. BGH JZ [*] 1977, 232), yet without granting a respective right to one or both of the parties to avert preliminary enforcement (e.g. OLG [*] München VersR [*] 2011, 549).

The amount in controversy is to be determined in accordance with §§ 47 (1) (1), 43 (1), 48 (1) GKG [*] and § 3 ZPO.


FOOTNOTES

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

Translator’s note on other abbreviations:

BB = Betriebs-Berater [a German journal on commercial and company law]; BGH = Bundesgerichtshof [German Federal Supreme Court]; EWiR = Entscheidungen zum Wirtschaftsrecht [a German journal on judgments in commercial law]; GKG = Gerichtskostengesetz [German statute on court fees]; IHR = Internationales Handelsrecht [a German journal on international commercial law]; JZ = Juristenzeitung [a German law journal]; MDR = Monatsschrift für Deutsches Recht [a German law journal]; NJW = Neue Juristische Wochenschrift [a German law journal]; NJW-RR = Neue Juristische Wochenschrift Rechtsprechungsreport [a German law journal]; OGH = Oberster Gerichtshof [Austrian Federal Supreme Court]; OLG = Oberlandesgericht [German Regional Appellate Court]; VersR = Versicherungsrecht [a German journal on insurance law]; ZEuP = Zeitschrift für Europäisches Privatrecht [a German journal on civil law in Europe]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].

** Jan Henning Berg is a legal trainee (Rechtsreferendar) with the District Court (Landgericht) Mönchengladbach, Germany. He has studied law at the University of Osnabrück, Germany and at King’s College London. He participated in the 13th Willem C. Vis Moot with the team of the University of Osnabrück and has coached the team of the University of Osnabrück for the 14th Willem C. Vis and 4th Willem C. Vis (East) Moot.

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Pace Law School Institute of International Commercial Law - Last updated October 15, 2013
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