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CISG CASE PRESENTATION

Germany 6 October 1992 District Court Berlin (Wine case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/921006g1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19921006 (6 October 1992)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 103 O 70/92

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

CASE HISTORY: 2nd instance KG Berlin 24 January 1994 [reversing in part]

SELLER'S COUNTRY: Italy (plaintiff is assignee of Italian seller)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Wine


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 77 [Also cited: Articles 59 ; 78 ]

Classification of issues using UNCITRAL classification code numbers:

74A [General rules for measuring damages: loss suffered as consequence of breach];

77A [Obligation to take reasonable measures to mitigate damages: effect of employing collection agency rather than an attorney]

Descriptors: Damages ; Mitigation of loss ; Attorney fees ; Collection costs

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Editorial remarks

EDITOR: Albert H. Kritzer

Examination of the ratio decidendi of LG Berlin 6 October 1992 and ULIS precedents underscores the itlp that can be provided by mining relevant ULIS case law as well as CISG cases when interpreting the CISG. The holding of the 1992 Berlin case is:

"The [seller's assignee] may not claim the fees of a collection agency. Employing a collection agency is against the aggrieved party's duty to mitigate damages. The circumstances of the case did not indicate that the [buyer] would settle the sum in arrears following a request for payment by a collection agency. It was foreseeable that [seller's assignee] would have to employ an attorney. However, any expenses incurred from further requests for payment made by an attorney would have been included in the legal expenses of this trial."

There is also ULIS case law on this point.

Relevant ULIS case law

In a Landgericht Essen 10 June 1980 interpretation of ULIS article 82, the court itld:

"The view of the [buyer] is that a national (German) rule concerning restrictions on compensation for collection fees by using an attorney instead of a collection agency, is not applicable in this case. This rule is within the domain of German law of procedure and is not, due to rules of private international law and the circumstances of the case, applicable. This rule is based on a principle that it is a breach of the duty to mitigate damages if a domestic creditor uses a collection agency instead of an attorney. The situation of a foreign creditor is not similar to this. A foreign creditor cannot be required to know that a less expensive way of collecting outstanding debts is to employ a German attorney."

In Landgericht Konstanz 3 June 1983, the holding was:

"As to damages based on ULIS art. 82, the court allowed the expenses used for employing a collection agency because, according to the court, these expenses belong to costs to be compensated in cases of delayed payment and because in cases of delayed payment, these costs are foreseeable at the time of the conclusion of the contract as possible consequences of the breach."

Validation of references to ULIS case law

Before using case law from any source other than the CISG to itlp interpret the Vienna Sales Convention, one should, of course, validate this approach. A validation is provided.

  • ULIS article 82 states:

    " 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 know or ought to have been known to it as a possible consequence of the breach of the contract."

  • Article 74, the counterpart provision of the CISG, states:

    " 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 it then knew or ought to have known, as a possible consequences of the breach of contract."

  • As these texts suggest, the legislative history of CISG article 74 reports that the language of ULIS article 82 was carried forward to CISG article 74. Each also sits in the same context of its statute.

  • Commenting in general on ULIS and the CISG, 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 Carbonneau ed., rev. ed., Lex Mercatoria and Arbitration (Juris Publishing 1998) 188.

  • 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 should be construed so that the term is interpreted according to the meaning that has been previously assigned to it, Mann states:

    "It is simply common sense that if the Convention adopts a phrase which appears to have been taken from [another international uniform law] 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].

    Other examples of relevant ULIS case law

    For other examples of relevant case law interpretations of ULIS article 82, go to the Match-up of ULIS article 82 with CISG article 74; see 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): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/173.htm>

    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 paras. 16, 20

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    Case text (English translation)

    Queen Mary Case Translation Program

    Landgericht Berlin 6 October 1992

    Translation by Jarno Vanto [*]

    Translation edited by Ruth M. Janal [**]

    The claimant [seller's assignee] requests settlement of an assigned claim for payment of the purchase price. The claim is based on the following circumstances.

    The original seller [an Italian firm] sold wine to the defendant [a German firm] ["buyer"] in 1990. The seller sent the following invoices to the [buyer]: 16 February 1990 ItL [Italian lira] 6,925,000; 8 June 1990 ItL 10,075,000; 30 June 1990 ItL 6,725,000; 23 October ItL 12,993,700; and 9 January 1991 ItL 6,120,000. The [buyer] made partial payments on 16 February and 8 June. Altogether an amount of DM [Deutsche Mark] 37,143.06 remains outstanding.

    [Seller's assignee] brings forth that the seller had transferred the outstanding debts to it. After the [buyer] had disregarded several requests for payment, the [seller's assignee] employed a collection agency. This cost [seller's assignee] a sum total of DM 831.80.

    [Seller's assignee] requests the Court to order that the [buyer] be made to pay the principal amount of DM 37,974.86 plus 23% interest on DM 8,998.05 from 30 August 1990; on DM 17,385.57 from 23 December 1990; on DM 2,570.88 from 9 January 1991; and on DM 8,188.56 from 10 March 1991.

    The [buyer] requests the Court to dismiss the claim. Additionally, the [buyer] questions the right of the [seller's assignee] to bring the claim in the first place.

    GROUNDS FOR THE JUDGMENT

    The claim is partially dismissed.

    [Seller's assignee] is entitled to request the settlement of the claim assigned to it, that is, to seek payment of the purchase price of the wine on the basis of the above mentioned invoices. [Seller's assignee] proved the assignment by submitting a certified translation of the respective declaration of 3 September 1992. The persons issuing the declaration were entitled to represent [seller], on the one hand, and [seller's assignee], on the other hand. This is undisputed with respect to Mr. A., who acted for the [seller]; Mr. S's authority to represent [seller's assignee] was proven by the certified translation of an extract of the Commercial Registry submitted by [seller's assignee].

    As to the amount of the claims, the [buyer] has not raised objections.

    The claim for interest is based on Articles 59, 74 and 78 of the CISG in connection with Article 1284, Section 1 of the Italian Civil Code. Following these provisions, [seller's assignee] is entitled to interest from the time the claim was mature without prejudice to any further claim for damages. As to this matter, the [buyer] did not dispute the submission of [seller's assignee] that [seller's assignee] takes credit exceeding the amount of the claim at an interest rate of 23%.

    The [seller's assignee] may not claim the fees of a collection agency. Employing a collection agency is against the aggrieved party's duty to mitigate damages. The circumstances of the case did not indicate that the [buyer] would settle the sum in arrears following a request for payment by a collection agency. It was foreseeable that [seller's] assignee would have to employ an attorney. However, any expenses incurred from further requests for payment made by an attorney would have already have been included in the legal expenses of this trial.

    The Court insofar concurs with the decision of the LG [***] Berlin, NJW-RR 1987, 802.[***]


    FOOTNOTES

    * Translator 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.

    *** Translator's note on abbreviations: LG = Landgericht [German District Court]; NJW-RR = Neue Juristische Wochenschrift - Rechtsprechungs-Report Zivilrecht [German case reporter].

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