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CISG CASE PRESENTATION

Germany 3 June 1983 District Court Konstanz [ULIS precedent] (Construction materials case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/830603g1.html]

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

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Case identification

DATE OF DECISION: 19830603 (3 June 1983)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 3 HO 55/83

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

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Italy (plaintiff)

GOODS INVOLVED: Construction materials


Classification of issues present

APPLICATION OF CISG: No, however, ULIS issue is present that is also relevant to the CISG

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 74 can be said to be at issue because analysis of ULIS Article 82 is relevant to interpretation of CISG Article 74

Classification of issues using UNCITRAL classification code numbers:

74B [General rules for measuring damages]

Descriptors: Damages ; Collection costs ; Foreseeability

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Editorial remarks

EDITOR: Albert H. Kritzer

The parallel language of ULIS Article 82 and CISG Article 74. ULIS Article 82 states that "damages shall not exceed the loss which the party in breach ought to have foreseen at the time of the conclusion of the contract in the light of the facts and matters which then were known or ought to have been known to him, as a possible consequence of the breach of the contract."

CISG Article 74 states that "damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract."

Use of ULIS jurisprudence as an aid to interpreting the CISG. Citing century old precedent to the effect that where a term is used in one statute, a subsequent statute that incorporates the same term in a similar context must be construed so that the term is interpreted according to the meaning that has been previously assigned to it, Mann adds: "It is simply common sense that if the Convention adopts a phrase which appears to have been taken from . . . where it is used in a specified sense, the international legislators are likely to have had that sense in mind and to intend its introduction into the Convention." F.A. Mann, Uniform Statutes in English Law, 99 Law Quarterly Review (1983) 382-383 [citations omitted]. In the same vein, Audit states: "The international character of the Convention should encourage courts to refer to the Convention's legislative history and prior instruments (i.e., the ULIS . . .) in order to ascertain the most likely intent underlying the wording of a given provision." Bernard Audit, The Vienna Sales Convention and the Lex Mercatoria, in: Thomas E. Carbonneau ed., rev. ed., Lex Mercatoria and Arbitration (Juris Publishing 1998) 188.

For examples of other case law interpretations of ULIS Article 82, go to the Match-up of ULIS Article 82 with CISG Article 74 and the section of that presentation entitled, ULIS case precedents aiding in interpretation of CISG Article 74. The ULIS citations presented are taken from the chapter on CISG Article 74 by Hans Stoll in Peter Schlechtriem ed., Commentary on the UN Convention on the International Sale of Goods (Clarendon Press: Oxford 1998) 552-572.

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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): Schlechtriem/Magnus, Internationale Rechtsprechung zu EKG und EAG [International case law on ULIS and ULF], Baden-Baden: Nomos (1987) Art. 82 EKG No. 26

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 74 para. 20

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Case text (English translation)

Queen Mary Case Translation Programme

Landgericht Konstanz 3 June 1983, 3 HO 55/83

Translation by Jarno Vanto [*]
University of Turku, Finland

Translation edited by Ruth M. Janal [**]
University of Freiburg, Germany

The Italian seller had delivered construction materials to the German buyer. The goods had been taken over but they had not been paid for. After the non-payment, the seller ordered a German collection agency to collect the outstanding amount.

The claim for payment was accompanied by claims for interest and damages.

The Court granted the claim for the purchase price based on ULIS Arts. 56 and 61, but modified the calculation of the claim for interest. The Court held that under Arts. 60, 63(2) and 83 ULIS, the claim for interest on a sum in arrears solely required that the purchase price was not paid at the time agreed in the contract:

“The due date follows from the invoice stipulation ‘90 days Deutsche Bank Bill of Exchange’ […] Following Art. 83 ULIS, the applicable interest rate is 1% above the official Italian bank discount rate. This rate of interest was adjudged.

"Contrary to the [seller’s] submission, interest is owed on the purchase price converted in Italian Lire, based on the official exchange rate on the day payment was due, and not on the purchase price in Deutsche Mark. This is because Article 83 is based on the idea that non-payment forces the seller to take credit with the said interest rate in his own country. This idea of the legislators would not be met if the interest rate was based on the price in Deutsche Mark. Following the principle of the law, the [seller] takes credit in its own country and in that country’s currency […]. A fixed interest rate of 28%, as requested by the [seller], is not justified. The interest rate is under constant fluctuation in Italy, as it is in Germany. The law, however, only allows interest which is based on the official discount rate.”

Aside from the claim for interest, the Court also awarded the [seller] damages under Art. 82 ULIS for costs incurred by employing a collection agency. The court held that these expenses belonged to the costs to be compensated in cases of delayed payment “which the [buyer] ought to have foreseen as a possible consequence of the breach at the time of the conclusion of the contract […].”


FOOTNOTES

* Jarno Vanto is an LL.M. student at the University of Turku, Finland. He is currently working on his thesis on Damages under the CISG.

** Ruth M. Janal, LL.M. (UNSW) is a Phd candidate at Albert-Ludwigs-Universität Freiburg.

All translations should be verified by cross-checking against the original text.

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Pace Law School Institute of International Commercial Law - Last updated September 14, 2006
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