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CISG CASE PRESENTATION

Germany 26 September 1990 District Court Hamburg (Textiles case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/900926g1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19900926 (26 September 1990 )

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 5 O 543/88

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

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Textiles


Case abstract

GERMANY: LG Hamburg 26 September 1990

Case law on UNCITRAL texts (CLOUT) abstract no. 5

Reproduced with permission from UNCITRAL

An Italian clothing manufacturer demanded payment of the purchase price plus interest from a German who, according to his account, had intended to order the textiles on behalf of a company X with limited liability but, according to the seller, had acted under a trade name referring to a non-existent comany Y. After delivery of the goods, the German had given the seller a bill of exchange drawn on and accepted by company Y.

The court, following German international private law, applied CISG as the relevant Italian law for the formation of the contract and for the rights and obligations of the parties to the sales contract. It determined according to article 8 that the seller could not know that the German intended to bind company Y. Since, according to German law as the law applicable to the formation of a company in Germany, company X had not been validly established as a legal person, the German company was the buyer. While, under Italian law, the giving of the bill of exchange did not free him from the payment obligation, it constituted a modification of the contract according to article 29(1) CISG to the effect that the due date for paying the purchase price was postponed until the maturity date of the bill of exchange. From that date on, interest was awarded under article 78 CISG at the statutory Italian rate plus additional interest as damages under article 74 CISG assessed on the basis of the Italian discount rate.


Abstract from 14 Journal of Law & Commerce (1995) 228 [cited as 9 September 1990]

Reproduced with permission from the Journal

CISG, Articles 14 et seq. are applicable to the modification of a contract. The extension agreement [in this case] is effective as a modification of the contract pursuant to CISG, Article 29(1). . . .The requirements under CISG, Article 29 for an effective modification concerning the due date of the purchase price are present. Both parties complied with the requirements of CISG, Articles 14 et seq. These articles are applicable to the modification contract.

Determination of the amount of interest pursuant to CISG, Articles 78 and 74. The amount of the interest claim under CISG, Article 78 is to be obtained from Article 1284(1) Codice Civile. According to this [provision] the Italian legal rate is 5%. Article 1284(1) Codice Civile is applicable, since the question of the amount of interest, which was intentionally left open in CISG, Article 78, has to be determined according to applicable national law as determined by the rules of conflict of laws. To the extent that the interest claim exceeds the rate of 5% awardable under CISG, Article 78, it is based on CISG, Article 74. Since September 15, 1988, the [seller] has incurred a loss in the amount of 13% on 94,893.-DM, because [the buyer] in violation of the contract did not pay the purchase price. Pursuant to §287 ZPO, the court appraises the [seller's] loss of interest to be of this amount. The appraisal of damages by referring to §287 ZPO is permissible in order to determine the amount of interest. [This is] because §287 ZPO, being lex fori, is also applicable to a foreign lex causae, since §287 ZPO has to be characterized as procedural.

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Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 8 ; 9(2) ; 23 ; 29 ; 53 ; 74 ; 78 [Also cited: Articles 1 ; 10(b) ; 14 ; 15 ; 18 ; 24 ; 32 ; 54 ; 58 ]

Classification of issues using UNCITRAL classification code numbers:

4B [Issues excluded from the CISG: agency issue];

8A1 [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct: relevant if other party "knows" or "could not have been unaware"];

9B [Implied agreement on international usage];

23A [Conclusion of contract: contract concluded when acceptance becomes effective];

29A [Parties may modify or terminate the contract by agreement];

53A [Summary of buyer's obligations: obligation to pay price of goods];

74A [Damages, general rules for measuring: loss suffered as consequence of breach];

78B [Interest on delay in receiving price or any other sum in arrears: rate of interest]

Descriptors: Scope of Convention ; Agency issues ; Intent ; Usages and practices ; Modification of contract ; Price ; Damages ; Interest

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=7&step=Abstract>

German: Schweizerische Zeitschrift für Internationales und Europäisches Recht (SZIER)/ Revue suisse de droit international et de droit européen 1993, 659-660

Italian: Diritto del Commercio Internazionale (1992) 635 No. 5

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 236

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-online.ch <http://www.cisg-online.ch/cisg/urteile/21.htm">; Recht der Internationalen Wirtschaft (RIW) 1990, 1015-1019; Praxis des internationalen Privat- und Verfahrensrechts (IPRax) 1991, 400-403; Europäische Zeitschrift für Wirtschaftsrecht (EuZW) 1991, 188-192; Die deutsche Rechtsprechung auf dem Gebiete des internationalen Privatrechts im Jahre (IPRspr) 1990 No. 42 [86-92]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=7&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Honnold, Uniform Law for International Sales (1999) 120 [Art. 8(2)], 232 [Art. 29]; Behr, 17 Journal of Law and Commerce (1998) 266-288 [abstracts and comments on 29 interest rulings from 10 countries (this case presented at 267, 270-271)]; Curran, 15 Journal of Law and Commerce (1995) 175-199 [185-186] [English summary of comments by Witz cited below (comments on the parties' indentity)]; Ferrari, International Legal Forum (4/1998) 138-255 [226 n.791 (scope of CISG: agency issues), 248 n.1032, 252 n.1074, 253 n.1079 (interest issues)]; Ferrari, 15 Journal of Law and Commerce (1995) 116-125 [comments on interest issues, citing this and other cases]; Koneru, 6 Minnesota Journal of Global Trade (1997) 123-138 [comments on interest rulings in this case and other cases]; Thiele, 2 Vindobono Journal (1998) 3-35, citing this case [n.59, n.62, n.118] and 42 other interest rulings; Karollus, Cornell Review of the CISG (1995) 51 [60, 66, 74, 75] [comments on issues under Articles 8, 29, 74 and 78 in the context of German case law on the CISG]; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) § 2-12 n. 185; § 2-13 n.203; § 6-31 n. 353; Liu Chengwei, Recovery of interest (November 2003) n.163; Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 1 para. 39 Art. 4 paras. 11, 22 Art. 8 paras. 5, 16, 19 Art. 9 para. 21 Art. 29 paras. 2, 3 Art. 58 para. 2 Art. 78 para. 8 Art. 74 para. 16, 53

French: Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale (L.G.D.J., Paris: 1995) 37 n.53, 51-53, 79 n.2, 106 n.115 n.117

German: Jametti-Greiner, Schweizerische Zeitschrift für internationales und Schweizerisches Recht (SZIER) 5/1993, 653; Karollus, [österreichisches] Recht der Wirtschaft (öRdW) 1991/11, 319-320; Magnus, Zeitschrift für Europäisches Privatrecht (ZEuP) 1993, 79; Piltz, Neue Juristische Wochenschrift 1994, 1101; Reinhart, Praxis des internationalen Privat- und Verfahrensrechts (IPRax) 1991, 376-379; Schlechtriem, Internationales UN-Kaufrecht (1996) 59 n.51; Stoll in von Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht (2d ed. 1995) 643 n.78 [Art. 74]

Italian: Bonell, Diritto del Commercio Internazionale (1992) 635

Spanish: Perales, Cuadernos Jurídicos 3 (1996) No. 43, 5 [7 n.29] [commentary on Article 78: determination of rate of interest under the CISG (review of case law)]

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Hamburg

26 September 1990 [5 O 543/88]

Translation [*] by Stefan Kuhm [**]

Translation edited by Camilla Baasch Andersen [***]

REASONING FOR THE DECISION

I. [ADMISSIBILITY OF THE LEGAL ACTION]

The legal action is admissible. In particular, the District Court, Hamburg, is the competent court to hear the legal proceeding in this case.

According to Art. 2 Par 1 EuGVÜ [*], the Court has jurisdiction over this case. The aforementioned Convention on the Jurisdiction and Enforcement of Courts' Decisions is applicable, since both Italy and the Federal Republic of Germany are Contracting States to that convention and the present case falls within its scope (Art. 2 Par. 1 EuGVÜ). The common place of the [buyer]'s local jurisdiction is the place of its residence (see Art. 2 Par. 1 EuGVÜ).

II. [FOUNDATION OF THE LEGAL ACTION]

The lawsuit is materially founded.

1. [Restatement of the seller's claim against the buyer]

The [seller] has a claim for payment of the purchase price in an amount of DM [Deutsche Mark] 94,893 pursuant to Art. 53 of the UN Convention on the International Sale of Goods of 11 April 1980 (CISG, BGBl. [*] 1989 II p. 588).

a) [Entering into a sales contract]

The parties entered into a valid and binding sales contract on 2 June 1988. The parties complied with the necessary prerequisites for entering into a valid and binding agreement. In particular, the parties acted coherently to the prerequisites of Art. 23 CISG.

      aa) [Application of the CISG]

Italian law is the applicable legal regime pursuant to Art. 31 Par. 1 EGBGB [*], according to which the Court is to decide, whether or not the parties entered into a valid and binding sales contract.

As part of the Italian substantive law, the CISG applies to the analysis of the question of whether the sales contract was validly executed and is binding on the parties.

[Application of German Conflicts of Laws Rules]

Art. 31 Par. 1 EGBGB [*] is applicable in this case, because neither any international harmonized substantive law nor any other international convention on conflicts of laws apply with regards to the valid and binding execution of the sales contract (see Art. 3 Par. 2 EGBGB). It is worth noting, that the 1964 Hague Convention on Uniform Law on the Formation of Contracts for the International Sale of Goods [ULF] [*] is not applicable. The preconditions for its application have not been met by the parties under Art. 1 ULF, since the 1964 Hague Convention on Uniform Law on the International Sale of Goods [ULIS] [*] would not be applicable, if the parties entered validly and binding into a sales contract (Art. 1 in connection with Art. 14 ULF. The ULIS applies merely to sales contracts on movable goods as set out in Art. 1 Par. 1 ULIS, in that the parties to such sales contracts must have their establishment or ordinary residence in two different Contracting States within the meaning of the ULIS (see Art. 1 Par. 1, 2 ULIS).

In this case, however, those pre-conditions for the application of the ULIS [*] have not been met. According to Art. 102 ULIS, Contracting States are only those, that are concurrently Contracting States of the Hague Convention on Uniform Law on the International Sale of Movables of 1 July 1964, i.e., the so-called "ULIS Convention", Federal Law Gazette II 886; 1974 II 146. On 2 June 1988, the Federal Republic of Germany was a Contracting State to the aforementioned Hague Convention but Italy was not (see BGBl. [*] 1987 II p. 231).

Even Art. 3 Par. 2 S. 1 EGBGB [*] does not have the consequence in this case, that Art. 14 et seq. CISG might prevail over the application of Art. 31 Par. 1 EGBGB. The CISG does not apply per se as internationally unified substantive law by virtue of its own application rules (see Art. 1(1)(a) CISG). Though Italy was a Contracting State to the CISG on 2 June 1988 (see BGBl. [*] 1987 II 231, at 232), the Federal Republic of Germany was not a Contracting State at that time (see with regards to the effectiveness of the CISG in Germany Art. 7 Par. 2 CISG Implementation Act [*].

[Italian law as the contractual regime for the sales contract]

Italian law is the relevant -- hypothetical -- governing law regime for the parties' sales contract pursuant to Art. 31 Par. EGBGB [*]. This ensues from Arts. 28 Par. 1 S.1, Par. 2 EGBGB in connection with Art. 35 EGBGB. Further, there are not any primary statutes prevailing over the aforementioned articles of the EGBGB. Internationally unified substantive law or conflicts of laws rules cannot be used for the identification of the relevant contractual legal regime. Therefore, the aforementioned conclusion applies to the ULIS [*], because Italy, as already mentioned above, was not a Contracting State to the CISG on 2 June 1988.

[CISG not directly applicable]

The CISG is not directly applicable as decisive contractual law for the sales contract, since the Federal Republic of Germany, as already considered above, was not a Contracting State to the CISG on 2 June 1988. At the level of autonomous international private law, it is impossible to use any superseding connective rule prevailing over the general connective rule of Art. 28 EGBGB [*]. In particular, Art. 27 EGBGB is not applicable, cause of the lack of an express choice of law clause. Further, the parties have not even agreed to any governing law during this pending legal proceeding.

[Italian law as the governing law]

Italian law is the -- hypothetical -- governing law for the sales contract. This sales contract has its closest connection to Italian law, so that the presumption of Art. 28 Par. 2 EGBGB [*] leads to Italian law as the governing law for the sales contract as well. The [seller] has its main administrative office in Italy. Furthermore, only the [seller] is of relevance for the determination of the governing law pursuant to Art. 28 Par. 1 S. 1, Par. 2 EGBGB [*]. Under the sales contract, the [seller] was obliged to deliver textiles and thus to perform in its capacity the characteristic performance under the parties' sales contract. In consideration of all circumstances of this case, the Court cannot conclude, that the presumption of Italian law, as being the governing law under Art. 28 Par. 2 EGBGB [*], may be prevailed over via closer connections to the Federal Republic of Germany (see Art. 28 Par. 5 EGBGB [*]). The reference to Italian law is exhaustive, since it refers directly to substantive Italian law (see Art. 35 EGBGB).

According to Italian legal principles, Art. 14 et. seq. CISG shall prevail over any autonomous Italian contractual law within the Codice Civile. This ensues from Art. 1(1)(b) CISG. One has to recognize this specific provision as part of the Italian substantive law, since Italy had not declared any reservation pursuant to Art. 95 CISG (see Herber, Considerations on the Implementation of the CISG, RIW 1987, p. 340, 341 left column).

[Conditions for the Application of the CISG via Art. 1(1)(b)]

In this case, the preconditions on the application of the CISG as set out in Art. 1(1)(b) CISG are met. Italy is a Contracting State to the CISG. Further, Italian law is accounted for as the governing law of the sales contract pursuant to the international private law of another state, i.e., the Federal Republic of Germany. The parties have their establishments, respectively their ordinary residences (see Art. 10(b) CISG) in different states, viz the [seller] in Italy and the [buyer] in Germany. This suffices. Art. 1(1)(b) CISG does not entail any further requirement, that all of the respective states must be Contracting States to the CISG (see v. Caemmerer/Schlechtriem/Herber [*], Art. 1 note 35; Bianca/Bonell/Jayme, Commentary on the International Sales Law, the 1980 Vienna Sales Convention, Milan 1987, Art. 1 Note 2.5).

      bb) [Entering into a sales contract]

The parties declared the necessary offer and acceptance pursuant to Art. 23(1) CISG. Insofar, it might remain undecided, which of the parties declared the offer and which one the acceptance. Both the [seller] and the [buyer] made at least during their negotiations on 2 June 1988 their declarations to enter into and execute the sales contract in question. The Court concludes this fact, in that the [buyer] undisputedly "ordered" various textiles for an amount of DM 94,893 with the [seller] on 2 June 1988.

The aforementioned declarations are effective vis-á-vis the parties to this legal proceedings. The [buyer]'s declaration particularly binds the [buyer], but not any third party. The [buyer] is the counter-party to the [seller].

           (A) [No attribution of the buyer's declarations to a third party]

The [buyer]'s declaration of 2 June 1988 does not bind AMG GmbH, because the applicable Art. 8 CISG does not consider an attribution to any third party.

One has to recognize Art. 8 CISG within the application of Art. 23 CISG (see Bianca/Bonell/Farnsworth, loc. cit., Art. 8 note 2). This provision encompasses the interpretation of both declaration and behavior of the parties. The interpretation of any declarations made and behavior conducted by the [buyer] prevails over the question, whether or not it might have probably acted in the name and on behalf of AMG GmbH, so that its declarations might have effect towards that third party. Only that question would be solved in compliance with the proxy regime, which has to be stipulated independently (see Art. 37 No. 3, Alt. 1 EGBGB [*] as well as Kegel, International Private Law, 6th edition 1987, p. 397; v. Caemmerer/Schlechtriem/Herber [*], Art. 4, Note 11). Conversely, the interpretation of the declarations shall be governed by the law regime governing the execution of the contract. In this case, this is the CISG as implemented into Italian law. Insofar, Art. 8 CISG is absolutely exhaustive.

Interpreting the conduct and behavior of the parties under Art. 8 CISG, the [buyer]'s declarations cannot be attributed to AMG GmbH. Even more, it may remain undecided, whether the [buyer] did actually have the secret intention and will to act for and on behalf of AMG GmbH on 2 June 1988. At any rate, the [seller] did not have any knowledge about such secret intention and will (Art. 8(1), 2nd HS., 1st Alt.). Further, the [seller] could not also be aware of such an intention (Art. 8(1), 2nd HS., 2nd Alt. CISG; Art. 8(2) and (3) CISG). The court restates the aforementioned fact, in that the [buyer] neither mentioned its pure internal and secret intention nor made the [seller] become aware of it. This statement is independent from the question, whether the notion of awareness, based on the [seller] under Art. 8(1), 2nd HS., 2nd Alt. CISG (see Bianca/Bonell/Farnsworth, loc. cit., Art. 8(1), Note 2.3) or the notion of awareness, based on the accepted standards of the average reasonable person under Art. 8(2), (3) CISG (see Bianca/Bonell/Farnsworth, loc. cit., Art. 8, Note 2.4; v. Caemmerer/Schlechtriem/Junge [*], Art. 8, Note 7) shall be applicable. Therefore, it may remain undecided, which party bears the onus of proof and subject to which statutes the onus of proof might have been determined (see on the one side: v. Caemmerer/Schlechtriem/Herber [*], Art. 4, Note 22; on the other side: v. Caemmerer/Schlechtriem/Huber [*], Art. 46, Note 18 a) to c))

The Court is definitely convinced, that the [seller] did not have positive knowledge or at least awareness or ought to have known, that the [buyer] might have acted in the name and on behalf of AMG GmbH.

According to Art. 8(3) CISG, any action, conducted at a later stage, shall also be considered for the interpretation of any declarations of the parties. Considering the [seller]'s activities, as conducted after execution of the sales contract, there is no reason to interpret the [buyer]'s activities of 2 June 1988, as if the [seller] or any other reasonable person instead (Art. 8(2) CISG) became aware or ought to have become aware, that the [buyer] acted in the name and on behalf of AMG GmbH.

[]

           (B) [No Attribution of the buyer's declarations to "AMG"]

The [buyer]'s declarations cannot be attributed to a company by the name of "AMG" without any reference to its limitation of liability either, although the [buyer] expressly acted in the name of such a company on 2 June 1988. []

The interpretation of the [buyer]'s activities has to be conducted within the regime of Art. 8 CISG (see supra A.). It ensues from such an interpretation, that the [buyer] acted vis-á-vis the [seller] in the name of company "AMG" on 2 June 1988, whereby it did not mention any limitation of its liability.

The attribution of a declaration has to be decided according to German autonomous law. Hence, the [buyer]'s declarations can neither be attributed to company "AMG Import-Export" nor to company "AMG Import-Export Peter Voss." Such a company is not able to be the holder of any liabilities or duties. Hence, even if one accepted such a theoretical possibility, it would not have acquired its own legal personality at any rate.

               (1) [Applicable Legal Regime for Corporate Entities]

German autonomous law is applicable to the question, whether company "AMG" had come into existence with its own legal personality. This question is preliminary to the question, whether the [buyer] validly acted as representative in the name and on behalf of that company, so that any of its declarations should be attributed to that company (see Kegel, loc. cit., pages 231 et seq. giving further references as well as Art. 37 No. 3 EGBGB [*]; v. Caemmerer/Schlechtriem/Herber [*], pre Art. 14 to 24, Note 3). The aforementioned question has to be decided in compliance with the hypothetical legal regime for corporations. This determines whether a legal entity has come into existence, to which an own legal personality had been afforded too (see Staudinger/Grossfeld, International Corporate Law, Note 190; Reithmann/Martiny/Hausmann, p. 828, Note 860).

[German law as the legal regime for corporations in this case]

In this case, German law shall apply as the governing legal regime for corporations under any circumstances, notwithstanding the independent question about the applicable conflict of laws rules. Hence, the seat as well as the place of incorporation and foundation were situated within the Federal Republic of Germany. The business card, attached as exhibit K 1, states two German addresses and premises. Henceforth, the Court is not obliged to decide, which kind of conflict of laws rules shall be applicable, autonomous or the one endorsed within a bilateral or multilateral treaty (see Art. 33(1) Friendship, Commerce and Shipment Treaty [*]; Kropholler, International Private Law, 1990, p. 459 et seq., Par. 55 I). At any rate, the Court cannot adhere to any other connective point than the situation of the seat or foundation of a company. Both situation of the seat and of the foundation lead to German law as the applicable legal regime for a corporation in this case.

                (2) [Lack of valid incorporation of "AMG"]

According to German autonomous law, company "AMG" has not validly come into existence as a legal entity, entitled to be a holder of legal rights and duties. Even if the [buyer] signed with such a firm name pursuant to Section 17 HGB [*], such a company, i.e., the firm, would not be a legal entity anyway, being able to hold rights and duties (argumentum e Sec. 17 HGB; see Heymann/Emmerich, HGB, 1989, Section 17 Note 13).

      b) [Seller's claim for purchase price is founded]

The [seller] has a claim for payment of the purchase price in an amount of DM 94,893 under the sales contract pursuant to Art. 53 CISG. In the light of the definition of the claim for payment of the purchase price, the CISG is applicable as part of the body of Italian law; hence the governing law for the sales contract is the equivalent to the hypothetical contractual regime, as already defined supra a) pursuant to Art. 31 EGBGB [*].

[Maturity of the purchase price]

According to Art. 58(1) sentence one CISG, the claim for payment under the sales contract is due and payable, since the [seller] delivered the goods, as amongst the parties agreed [ omitted] to the [buyer]. The [seller] delivered the goods to an addressee "AMG Import-Export", which is, in this case, deemed to be a delivery to the [buyer]. This assumption is independent from the question, whether the [buyer] was entitled to sign under the name of a firm under German law, which is decisive in that respect. Even if there was such a company in existence, then the delivery would have to be attributed to the [buyer] anyway, hence it was the [seller]'s counter-party under the sales contract (arg. e Sec. 17 HGB [*]). If there was not such a company in existence, then that delivery would have to be attributed to the [buyer] even more as the [seller]'s counter-party.

[Claim for purchase price not extinguished]

The [seller]'s claim for payment under the sales contract has not been extinguished. In particular, the issuance of a bill of exchange, in which AMG GmbH has been stated as Drawee and Acceptant, is not deemed to be a discharging assumption of all obligations and liabilities under the parties' sales contract under Italian law. Furthermore, Italian law is applicable to decide, whether there was an individual discharging assumption of liabilities and obligations, because Italian law would also apply to the possibly assumed obligation to pay the purchase price (see Palandt/Heldrich [*], Art. 33 EGBGB [*], Note 4; Kegel, loc. cit., p. 481; Kropholler, loc. cit., p. 416, par. 52 VI 4). According to Italian autonomous law, there should have been a very clear and distinct expression of the [seller] as creditor under the sales contract, in order to effectuate such an aforementioned assumption of all obligations and duties under the sales contract. However, the [buyer] did not express its will and intention in such a way (Trimarchi, Istituzioni di diritto privato, 7th edition Milano 1986, p. 431). The mere physical acceptance of that bill of exchange cannot be interpreted to have such very extensive effects.

2. [Seller has a claim for interest]

The [seller] is the holder of a claim for interest payment of 13% since 15 September 1988 pursuant to Art. 78 CISG in connection with Art. 1284 Par. 1 C.c. [*] and Art. 74 CISG.

According to Art. 32 Par. 1 No. 3 EGBGB [*], Italian law on contracts is applicable to determine any liability to pay interest on a debt. Hence, such a liability results from the non-performance of the contractually agreed obligation to pay the purchase price (see Palandt/Heldrich [*], Art. 32 EGBGB, Note 2.a.cc). Under Italian law, as already mentioned above, one is to apply primarily the CISG, so that autonomous Italian civil law would only apply alternatively as assistance.

      a) [Foundation for claim of 5% interest]

Up to 5%, the claim for interest payment is based on Art. 78 CISG. Art. 1284 Par. C.c. [*] is then decisive to determine the actual level of the interest rate (for text of the C.c. see Bauer/Eccer et. al., Italian Civil code, Codice Civile, Bilingual edition, Bozen 1987).

           aa) [Applicable law for the parties' arrangement to defer payment]

The [buyer] is generally obliged to pay interest on a debt pursuant to Art. 78 CISG, because it has been in default on its payment of the purchase price, being due and payable under Art. 58 CISG since 15 September 1998. Though the purchase price had already become due and payable under Art. 58 CISG at that time, when the [seller] provided for the goods under the sales contract and an invoice at the [buyer]'s establishment in Hamburg on 9 June 1988. The [seller], however, deferred the payment of the purchase price until 15 September 1988. The [buyer] and the [seller] entered into an agreement to have the payment deferred when they agreed to issue a bill of exchange at the end of July or at the beginning of August 1988. Such a deferral arrangement is a valid and binding alteration of the sales contract pursuant to Art. 29(1) CISG. The CISG does apply, because there is not a specific legal regime with regards to this deferral arrangement within the international private law as applicable. According to Art. 32 Par. 1 No. 2 EGBGB [*], the CISG as part of Italian law on contracts applies to such a deferral arrangement as well. One has to consider Art. 32 Par. 1 EGBGB, because this arrangement refers to the timely performance of the obligation to pay the purchase price. Thus far, it is within the scope of the general statutory test (Regelbeispiel) of Art. 32 Par. 1 No. 2 EGBGB.

[Review of the preconditions for a valid amendment of the sales contract]

All pre-requisites have been fulfilled for a valid alteration of the sales contract in respect of the purchase price becoming due and payable pursuant to Art. 29(1) CISG. Hence, the parties acted in accordance with Art. 14 et seq. CISG. These provisions also apply to such an agreement to amend a sales contract (v. Caemmerer/Schlechtriem [*], Art. 29, Note 3; Enderlein/Maskow/Stargardt [*], Art. 29, Note 1.2).

The parties declared the necessary offer (Art. 23 CISG) as well as the acceptance (Art. 18 CISG) for an alteration concerning a deferred payment (Arts. 14, 15 CISG).

In consideration of the guidelines and principles to interpret any declarations of the parties involved in an international sale under Art. 8(2), (3) and Art. 9(2) CISG, the meeting of the minds upon the issuance of a bill of exchange served two functions:

- On the one side, the payment of the debt under that instrument at the maturity date of the bill of exchange on 15 September 1988 was deemed to be the payment of the purchase price pursuant to Arts. 53, 54 CISG too.

- On the other side, the liability to pay the purchase price should be deferred to the maturity date of the debt under the bill of exchange as drawn upon.

Further, interest should not be accrued up to the maturity date of that bill of exchange. The drawing upon and handing over of the bill of exchange can only be interpreted in that way amongst merchants as influenced by trade usages for international commerce.

                (B) [Valid and binding amendment of the sales contract]

The aforementioned alteration of the sales contract is valid and binding for both parties involved.

The [buyer] impliedly accepted the drawing upon a bill of exchange. Hence, it was present at the handover of that instrument, being in its interest, and did not sensibly object. As a result, it may remain undecided, who was the real Drawer of that bill of exchange.

The witness R's declarations, as made while physically accepting the bill of exchange, are attributed to the [seller]. In this context, it can remain undecided, whether and according to which law the agent R acted on the [seller]'s behalf in Hamburg. The [seller] gave its assent to the alteration of the sales contract, as negotiated by R, at the time of presenting the bill of exchange on 15 September 1990 at the latest. This approval is valid and binding under Italian law as applicable. Italian law does apply as the legal regime for the transaction of the amended sales contract (see Reithmann/Martiny/Hausmann, loc. cit., Note 967-968). Since the CISG does not comprise of any provision for such an approval and no other international treaty is applicable, one has to revert to autonomous Italian law. It is of no importance, whether the Geneva Convention on Representation during an International Sale of Goods of 1983 applies in Italy. Under any circumstances, the substantive provisions of that aforementioned convention are not applicable (see Stocker, WM [*] 1983, p. 778 et. seq.). According to Art. 1399 Par. 1, 2 C.c., an approval is valid and binding ex tunc, i.e., from the date of entering into the agreement, by the agent, unless the agreement in question had not already come into effect due to the application of general agency laws.

           bb) [Owed interest rate of the claim for interest payment]

The actual rate of the claim for interest under Art. 78 CISG is to be extracted from Art. 1284 Par. 1 C.c. Under that aforementioned Italian provision, the Italian owed statutory interest rate is 5% [p.a.]. Art. 1284 Par. 1 C.c. is applicable, because the actually owed interest rate has not expressly been regulated within the CISG (v. Caemmerer/Schlechtriem/Enderlein, loc. cit., Art. 78, Note 2), so that that the interest rate has to be determined in accordance with the relevant national law, being applicable pursuant to the general principles of conflicts of laws (see Art. 7(2) Alt. 2 CISG; v. Caemmerer/Schlechtriem/Enderlein [*], Art. 78, Note 3; Bianca/Bonell, loc. cit., Art. 78, Note 2.1). The governing law is, as already mentioned above under a), Italian law pursuant to Art. 32 Par. 1 No. 3 EGBGB [*]. Further, there is not the case, that German law shall extraordinarily apply as the legal regime of the debtor (Asam/Kinder, Compensation for any damages concerning interest and depreciation of currency under the CISG, RIW [*], p. 841-842; dissenting opinion Stoll, Current issues of international private law in respect of national supplements of the CISG, Festschrift Ferid, 1988, p. 495, 510).

      b) [Basis for claim for an interest rate above 5%]

The claim for interest payment above 5% is based on Art. 74 CISG pursuant to Art. 78 at its end CISG (v. Caemmerer/Schlechtriem/Stoll [*], Art. 74, Note 39). The [seller] has incurred a loss of 13 per cent on DM 94,893 due to the non-payment of the purchase price since 15 September 1988. The Court estimates the loss of interest payment incurred by the [seller] pursuant to Sec. 287 ZPO [*].

           aa) [Estimating the loss of interest payment occurred]

Estimating the actual level of any loss of interest payment under Sec. 287 ZPO [*] is admissible. Hence, Sec. 287 ZPO is part of the lex fori and thus applicable nonetheless the lex causae is not the same (Geimer, International Law on Civil Proceedings, 1987, Note, 2065; see v. Caemmerer/Schlechtriem/Stoll [*], Art. 74, Note 41), since Sec. 287 ZPO has to be qualified as a pure procedural rule (see Kegel, loc. cit., p. 393).

           bb) [Italian discount rate determines the loss of interest payment]

The estimated loss of interest payments as incurred by the [seller] amounts to 13% [p.a.]. This actual figure ensues from the Italian discount rate of 21 November 1988, i.e., date of the writ.

In the light of doing business within Germany and Italy, it is allowed to revert to the discount rate of the creditor's country, if the relevant creditor has its establishment in Italy. Hence, market rates are at least at the same level as the then prevailing discount rate in Italy. This ensues from the fact that Italy, as Contracting State of the ULIS [*], accepted for years that the interest rate under Art. 83 ULIS was always 1 per cent above the discount rate (see Asam/Kindler, loc. cit., p. 844).

The [seller] is rendering German-Italian trade. The Court concludes this fact from the entering into the sales contract in question on 2 June 1988. In the event, that a debtor is in default to pay its debt of more than DM 90,000 within the context of German-Italian trade, there is prima facie evidence that the [seller] suffers a loss of interest payment amounting to at least the discount rate of the relevant country.

The level of the Italian discount rate of 21 November 1988 leads to the conclusion that the loss, occurred due to the [buyer]'s default, amounts to 13% [p.a.] since 15 September 1988. Hence, it is sufficiently probable that the discount rate during that period of time was not well below 13%, so that consequently the market interest rate, being usually above the discount rate, would have been below 13% as well. On the other side, it is not of importance whether the discount rate during that period amounted to more than 13%. Hence, in any event in this case, the Court is prevented from recognizing any interest rate which is beyond 13% pursuant to Sec. 308 Par. 1 S. 2 ZPO [*]. [A Court cannot grant anything that has not been applied for by the parties to a legal action]

III. [ANCILLARY DECISIONS]

The Court's decision upon legal fees, costs and expenditures is based on Sec. 92 Par. 2 ZPO. The decision upon preliminary enforcement is based on Sec. 709 S. 1 ZPO.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Italy is referred to as [seller], the Defendant of Germany as [buyer]. Amounts in German currency (Deutsche Mark) are indicated as [DM].

BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGBl. = Bundesgesetzblatt [German Federal Law Gazette]; BGH = Bundesgerichtshof [Federal Court of Justice, the highest German Court in civil and criminal matters]; BGHZ = Entscheidungen des Bundesgerichtshofes in Zivilsachen [Official Reporter of Decisions of the German Federal Supreme Court for Civil Matters]; v. Caemmerer/Schlechtriem/et al. = Kommentar zum Einheitlichen UN-Kaufrecht - CISG -, München 1990 [Commentary on the CISG, Munich 1990]; C.c. = Codice Civile Italiano [Italian Civil Code]; CISG Implementation Act = Gesetz zu dem Übereinkommen der Vereinten Nationen vom 11. April 1980 über Verträge über den internationalen Warenkauf sowie zur Änderung des Gesetzes zu dem Übereinkommen vom 19. Mai 1956 über den Beförderungsvertrag im internationalen Straßengüterverkehr [German Code on the Implementation of the CISG of 11 April 1980 as well as on the Alteration of the German Implementation Act on the International Convention of 5 June 1956 on the Transportation of Goods in the International Traffic of 5 June 1989, Federal Law Gazette 1989 II 586]; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on Private International Law]; Enderlein/Maskow/Stargardt = Kommentar, Konvention der Vereinten Nationen über Verträge über den internnationalen Warenkauf, Konvention über die Verjährung beim internationalen Warenkauf, Protokoll zur Änderung über die Verjährung beim internationalen Warenkauf, Berlin (DDR) [Commentary on (i) the CISG, (ii) the UN Convention on the Limitation of Claims within International Sales and (iii) the Protocol on the Amendment of Limitation of Claims within International Sales, Berlin (German Democratic Republic) 1985; EuGVÜ = Europäisches Gerichtsstands- und Vollstreckungsübereinkommen, 1968 [Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters, succeded by the Council Regulation on Jurisdiction and the Recognition of Judgements in Civil and Commercial Matters [44/2001/EC]; Friendship, Commerce and Shipment Treaty = Freundschafts-, Handels- und Schiffahrtsvertrag zwischen der Bundesrepublik Deutschland und de Republik Italien, BGBl. II 1959, S. 962 (Bilateral Treaty between the Federal Republic of Germany and the Republic of Italy on Friendship, Commerce and Shipment, Federal Law Gazette II 1959, p. 962); HGB = Handelsgesetzbuch [the German Commercial Code]; NJW = Neue Juristische Wochenschrift [a well-known German Law Journal]; NJW-RR = Neue Juristische Wochenschrift - Rechtsprechungs-Report [Report on important and recent decisions by German courts] Palandt [the most renowned and influential commentary to the German Civil Code]; RIW = Recht der Internationalen Wirtschaft [Legal Journal on the Law of International Commerce]; ULF = 1964 Hague Uniform Law on the Formation of Contracts for the International Sale of Goods = EAG = Einheitliches Gesetz über den Abschluss von internationalen Kaufverträgen über bewegliche Sachen [German Uniform Code on the Formation of Contracts for the International Sale of Movable Goods, 17 July 1973, Federal Law Gazette I, p. 868]; ULIS = 1964 Hague Convention on Uniform Law on the International Sale of Goods = EKG = Einheitliches Gesetz über den international Kauf beweglicher Sachen [German Uniform Code on the International Sale of Movable Goods, 17 July 1973, Federal Law Gazette I, p. 856, 1973 I p. 358]; WM = Zeitschrift für Wirtschafts-und Bankrecht [Legal Journal on Commerce and Banking]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].

** Stefan Kuhm is a Member of the Bar Association, Frankfurt a.M., and a Ph.D. candidate at Eberhard-Karls-Universität Tübingen.

*** Camilla Baasch Andersen is a Lecturer in International Commercial Law at the Centre for Commercial Law Studies, Queen Mary, University of London, and a Fellow of the Institute of International Commercial Law of the Pace University School of Law.

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