Germany 13 January 1993 Appellate Court Saarbrücken (Doors case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/930113g1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 1 U 69/92
CASE HISTORY: 1st instance LG Saarbrücken 23 March 1992 [affirmed]
SELLER'S COUNTRY: France (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Doors
GERMANY: Oberlandesgericht Saarbrücken 13 January 1993
Case law on UNCITRAL texts (CLOUT) abstract no. 292
Reproduced with permission from UNCITRAL
A French seller, plaintiff, sold doors to a German buyer, defendant. The buyer refused to pay the purchase price, claiming lack of conformity of the goods. The seller sued the buyer for the outstanding purchase price.
The court allowed the claim. It held that the buyer had to pay the purchase price, because - apart from the fact that it had failed to sufficiently specify the lack of conformity (article 39(1) CISG) - it had failed to examine the goods as provided in article 38(1) CISG and had not given notice of the lack of conformity within a reasonable time. Accordingly, it lost its right to rely on lack of conformity under article 39(1) CISG.
The buyer was not exempted under article 38(3) CISG from its obligation to examine the doors within a period as short as is practicable in the circumstances (article 38(1) CISG). The court held that, although the doors were resold by the buyer, the exemption under article 38(3) would have been applicable only if the buyer had either acted as a pure intermediary or if the goods had been directly delivered to the ultimate consumer. The exemption could not be applicable, however, if it was unforeseeable, whether and when the delivered goods, which in the meantime had been stored in the buyer's warehouse, would be resold. As this was the case, immediate examination after delivery would still have been necessary.
The court held that despite the fact that the doors had been wrapped in piles on pallets and that the wrapping had to be opened to allow for examination, such immediate examination was neither impossible nor unreasonable. The buyer could have unwrapped sample doors, which would at least have revealed defects depending on manufacturing, since the doors had been produced in series. Furthermore, the court held that, in general, parties could derogate from the provisions contained in articles 38, 39 CISG by trade usage. Nevertheless, such a trade usage was found to be non-existent in this case. Accordingly, notice of lack of conformity given by the buyer more than two and a half months after the date of the last shipment of doors was held to be too late.Go to Case Table of Contents
APPLICATION OF CISG: Yes [Article 1(1)(b) and choice of parties] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles Classification of issues using UNCITRAL classification code numbers:
18A2 [Criteria for acceptance: conduct indicating assent];
38A ; 38C [Buyer's obligation to examine goods; Deferral of examination in case of redispatch (application of this rule)];
39A [Buyer must notify seller within reasonable time (defined by contract in this case)] Descriptors: Go to Case Table of Contents
Classification of issues present
APPLICATION OF CISG: Yes [Article 1(1)(b) and choice of parties]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue: Articles
Classification of issues using UNCITRAL classification code numbers:
18A2 [Criteria for acceptance: conduct indicating assent];
38A ; 38C [Buyer's obligation to examine goods; Deferral of examination in case of redispatch (application of this rule)];
39A [Buyer must notify seller within reasonable time (defined by contract in this case)]
Go to Case Table of Contents
CITATIONS TO OTHER ABSTRACTS OF DECISION
English: Unilex database<http://www.unilex.info/case.cfm?pid=1&do=case&id=180&step=Abstract>
Italian:  Diritto del Commercio Internazionale 722-723 No. 130
CITATIONS TO TEXT OF DECISION
Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/83.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=180&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
Dutch: Wautelet, in: van Houtte/Erauw, Het Weens Koopverdrag [HWK] (1997) No. 5.40 [172 n.94] [cited as 13 January 1992]
English: Honnold, Uniform Law for International Sales (1999) 130 [Art. 9 (relation between usage and contract)], 274 [Art. 38 (timeliness of examination)]; Ferrari, International Legal Forum (4/1998) 138-255 [221 n.749 (choice of CISG after legal proceedings started), 235 n.883, 239 n.925 (examination of goods/notice of lack of conformity), 242 n.964 (Art. 39(2) can be derogated from), 243 n.985, 244 n.998 (reference to Arts. 40/44)]; Ferrari, 15 Journal of Law and Commerce (1995) 99-116 [comments on notice issues, citing this and other cases]; Gillette, 39 Virginia Journal of International Law (1999) 707 [711 n.12]; Perales, 10 Pace International Law Review (1998) 97-155 at n.105 [formation rules of CISG used to determine inclusions of general conditions on back of form]; for a survey of close to 100 judicial and arbitral rulings on Article 39(1), go to the 1998 Pace essay on this subject by Camilla Baasch Andersen; Kuoppala, Examination of the Goods under the CISG and the Finnish Sale of Goods Act (2000) § 3.4.3 [analysis of related articles 38, 39, 40 and 44 (includes digests of relevant material in many CISG cases; also digests cases under a domestic sales code that is patterned, for the most part, after the CISG)]; Perales, Battle of the Forms and Burden of Proof, 6:2 Vindobona Journal (2002) 217-228, nn. 12, 13; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.299-300, 348-351, 363-364, 365-366, 383-384, 393-394; CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (this case and related cases cited in addendum to opinion);  S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 76, 92, 185;  Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 paras. 48, 52, 54 Art. 9 para. 14 Art. 18 paras. 4, 7, 8 Art. 38 paras. 14, 23, 25 Art. 39 paras. 6, 17, 35; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 231; Karen Halverson Cross, Parol Evidence Under the CISG: The "Homeward Trend" Reconsidered, 68 Ohio State Law Journal (2007) 133-160 at n.108
German: Schwenzer in von Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht (2d ed. 1995) 359 n.22a [Art. 39]Go to Case Table of Contents
Queen Mary Case Translation Programme
13 January 1993 [1 U 69/92]
Translation [*] by Stella Heyken [**]
Edited by Mariel Dimsey [***]
I. DEVELOPMENT OF THE CASE
Plaintiff (hereinafter referred to as [Seller]), which manufactures doors, had a business relationship from 1988 till May 1989 with Defendant (hereinafter referred to as [Buyer]), who resells the doors to a bulk purchaser. The turnover of the business relationship was about 1,200,000.00 Deutsche Mark [DM].
[Seller] claims payment in the amount of 115,136.40 DM plus 10 % interest since 20 April 1989 for ten outstanding balances for the delivery of doors. These outstanding balances were for invoices dated between 15 December 1988 for the first account and 20 April 1989 for the last account, amounting to a total of 130,590.75 DM minus a credit in the amount of 15,427.35 DM for a door which has defects. The [Seller] thus claims payment from the [Buyer] of 115,163.40 DM plus 10% interest since 20 April 1989.
[Buyer] seeks dismissal of the claim and argues:
|1.||[Seller] demands a price which is too high, because this was not contractually agreed.
|2.||[Seller] assured [Buyer] a further credit in the amount of 15,695.50 DM for defects.
|3.||In any event, [Seller] failed to deliver the doors, or delivered them too late and furthermore
with defects, with the consequence that [Buyer] suffered damages in the amount of
17,000.00 DM, because its clients sent the defective doors back.
|4.||[Buyer] suffered further damages in the amount of 43,451.15 DM for cover purchases it was
forced to undertake because of the outstanding or late deliveries.
|5.||And [Buyer] suffered still further damages in the amount of 83,706.91 DM due to cancellations by its clients because of outstanding or late deliveries.
|6.||Due to the counterclaims arising therefrom, [Buyer] claims a set-off; in the alternative, a lien.|
In the judgment appealed against, which is referred to for the details concerning the facts and the dispute in the first instance, as well as for the resulting factual and legal determinations, in dismissing the remainder of the claim, [Buyer] was found liable to pay to [Seller] 98,434.90 DM plus 5% interest since 20 April 1989. The decision is based on the applicability of the United Nations Convention on Contracts for the International Sale of Goods (CISG) of 11 April 1980. According thereto, the claim by [Seller] is acceptable only in the amount of 98,434.90 DM, taking into account the credit in the amount of 15,694.50 DM and other deductions in the amount of 1,034.00 DM. Conversely, [Buyer] cannot successfully invoke a breach of contract by [Seller], since [Buyer] failed to give timely notice of the alleged defects on the doors and, in any case, has not sufficiently proven its case, since [Buyer's arguments on the alleged delays in delivery by the [Seller] are unsubstantiated, and as the [Seller] was entitled to stop the deliveries from May 1989 owing to the [Buyer]'s default in payment, which, after all, was not justified, with the consequence that the [Buyer] has neither a right to a set-off, nor a right to claim a lien.
The [Buyer]'s appeal is against this judgment. The [Buyer] again applies to dismiss the claim for the following reasons:
|1.||The claim should be reduced by 26,872.50 DM, since [Seller] did not order the goods in
account No. 9253 in the amount of 21,922.50 DM, nor the first five items on account No.
9254 in the amount of 4,950.00 DM.
|2.||The doors delivered by [Seller] clearly had have the defects, which were described in the
first instance, mentioned in the judgment appealed against, and which were part of the talks
on 10 February 1989 and on 6 April 1989. The parties are not in dispute over this.
Moreover, the discussions held by the parties on 6 April 1989, as agreed on 10 April 1989,
were not in the least, precisely for the purpose of clarifying these defects.
|3.||The judge in the first instance wrongly assumed that [Buyer] notified these defects too late
and, therefore, cannot rely on them. After every delivery upon which the claim is based,
[Buyer] undertook random examinations and determined that the material was poor; in each
case, [Buyer] complained immediately. In any event and regardless of that fact, [Buyer] was,
allegedly, not under any obligation to examine and notify of defects.
|4.||There was no duty to examine the goods and to give notice on the lacks of conformity because:
b) Furthermore, [Buyer] was relieved of an immediate duty to examine the goods and to give notice on the lacks of conformity in light of its huge stockholding and under Art. 38(3) CISG. Regardless of this fact, there was, in any case, a trade usage, according to which it was "extremely unusual in the branch of trade concerned" to conduct an immediate examination of the goods delivered in transactions like those conducted with [Seller].
c) Finally, [Seller] consented to the talks of 10 February 1989 and 6 April 1989, which were also held precisely because of the defects, and [Seller] thereby, implicitly waived its right to rely on the defense of breach of any potential obligations to examine and notify of defects.
|5.||The judge in the first instance is also wrong in his opinion that [Seller] was entitled to stop the
deliveries for [Buyer] since May 1989.
|6.||In light of the fact that the [Buyer] could only resell the doors delivered by [Seller] in a range,
and was therefore continually dependent on [Seller] for subsequent deliveries to complete the
range, legal relationships such as those of the parties could only have been properly
conducted in the form of an ongoing commitment. Furthermore, in the talk of 6 April 1989,
the parties agreed that the doors which were still in storage should be dismantled and that, for
reasons of completing the range, [Seller] should make the indispensable additional and
supplementary deliveries. As [Seller], contrary to the agreement of May 1989, stopped all
deliveries, [Buyer]'s stock run-down also had to be stopped, with the consequence that all
the doors are still there in storage today. [Seller] wrongly relies on the fact that [Buyer] has
not paid the accounts which are the subject of the claim as the reason for stopping the
deliveries. Since, after [Buyer] offered [Seller] a surety of about 500,000.00 DM with a
large German bank to no avail, [Buyer] was allowed to assert a right of retention due to the
stopping of delivery by [Seller].
|7.||Referring to the proceedings before the Court of First Instance, [Buyer] applies for [Seller]'s
claim to be dismissed in its entirety by an appropriate modification to the original judgment.
|8.||[Seller], in turn, applies for a dismissal of [Buyer]'s appeal. [Seller] refers to the reasons for
the decision appealed against, as well as to its pleadings in the first instance and replies to the appeal with these general reasons:
a) [Buyer] could no longer rely on the defects in the doors delivered.
b) The doors, which still have to be paid for, were individually inspected by [Buyer] and accepted. To the extent that, on behalf of [Buyer], defects were correctly notified, [Seller] recognized them and, for this reason, gave [Buyer] the voucher already mentioned.
c) If [Buyer] is now notifying further defects, which are, in any case, insufficiently substantiated, [Buyer is excluded from doing so. Namely, [Buyer] failed to fulfill its duty to promptly inspect and - as appropriate - notify defects in the doors delivered, a duty which it was, in this way, a legal obligation, and in any case, usual for the trade sector concerned.
d) The fact that [Seller] has not delivered doors to [Buyer] since May 1989 cannot be objected to. On the one hand, [Seller] had no delivery obligations going beyond each individually-concluded contract, and on the other hand, in light of [Buyer]'s default in making payment, [Seller] was no longer obliged to make further deliveries in any case.
II. REASONS FOR DECISION
I. A. The appeal by [Buyer], which is in correct form and made in good time, is admissible according to §§ 511, 511(a), 516, 518, 519 ZPO [*].
B. However, the appeal is dismissed on the merits, since the claim allowed in the first instance is admissible (cf. AA) and established on points of law (cf. BB).
AA. To the extent that, with respect to the admissibility of the claim, [Buyer] continues to object to the jurisdiction of the first-instance judge, these objections are disregarded in accordance with § 512(a) ZPO.
However, if [Buyer] means to object to the international jurisdiction of German courts, which is intertwined with the territorial jurisdiction of a German court, this is also to be examined in an appellate court -- even ex officio -- notwithstanding § 512(a) ZPO (cf. BGH in NJW [*] 1988, 1466 zu II, 1, a). However, this jurisdiction is established according to Arts. 2(1); 53(1)(1) EuGVÜ [*], since [Buyer] is (was) seated in Germany.
BB. With regard to the grounds for the awarded claim, the court, in agreement with the first judge, assumes that the underlying legal relationships of the parties are to judged under the CISG (cf. I) and that, therefore, regardless of the appeals made in this regard, the claim allowed, as such, has come into force (cf. II), whereas the objection by [Buyer] against this claim cannot be sustained (cf. III).
The first-instance judge correctly affirmed the application of the CISG, referring to the fact that, for the disputed legal relationships of the parties, French law is to be consulted according to Art. 28(1)(1), (2) EGBGB [*], and that therefore, the CISG is applicable according to Art. 1(1)(b) CISG, because it came into force in France on 1 January 1988 (cf. Piltz in AnwBl. [*] 1991, 57 et seq. zu II. (p. 58)). The CISG is not only applicable for contracts for the sale of goods according to Art. 1(1) CISG, but also for contracts for the supply of goods to be manufactured or produced according to Art. 3(1) CISG.
In any event, the parties agreed on the application of the CISG in the meantime, since, although [Buyer] already referred to the application of the CISG in the first instance, [Seller] subscribed to it - in contrast to its behavior in the first instance - on 11 June 1992 in its reply to the appeal. Then, at the latest, the parties agreed on an appropriate choice of law according to Art. 27 (1), (2) EGBGB.
II. In agreement with the first-instance judge, the court also assumes that the claim for payment in the awarded amount of 98,434.90 DM arose as a claim for payment under Art. 53 CISG, or, if one wants to evaluate the underlying legal relationships of the parties from the perspective of a contract for services, which is placed on equal footing with a sales contract according to Art. 3(1) CISG, then a contract for payment of wages arose according to Art. 3(1) CISG in connection with Art. 53 CISG, respectively.
Relying on price arrangements that were more beneficial to it, [Buyer] asserted in the first instance that more deductions had to be made from the claim for payment awarded. However, the first-instance judge denied the entitlement to these further deductions, referring to the fact that the prices relied on by [Seller] in the disputed invoices became binding as a result of the rules regarding silence in response to a Commercial Letter of Confirmation, which also applied between the parties, since [Buyer] did not object to the confirmation of order in question. On appeal, [Buyer] did not return to the issue of these further deductions.
However, [Buyer] is now claiming, in the appeal, that it did not order the doors according to account No. 9253 in the total amount of 21,922.50 DM, and that it did not order the first five items on account No. 9254 in the amount of 4,590.00 DM. These assertions of [Buyer], evidenced by witnesses Schreyer and Müller have now become irrelevant, with the consequence that they may be regarded as correct. Account No. 9254 is not part of those accounts for which payment was claimed in the statement of claim on 18 September 1989, and is therefore not part of the claim for payment awarded in the first instance.
Account No. 9253 dated 13 January 1989 for an amount of 21,922.50 DM is asserted by [Buyer] and was also part of the first instance claim. However, even if [Buyer] did not, apparently, order the delivery of the doors that gave rise to this invoice, it is no longer able to rely on Art. 52(2) CISG in this regard, since [Buyer], instead of refusing to accept the doors, did, in fact, accept them. Namely, it emerges from the conversation memo of 10 February 1989, which was even submitted to the file by [Buyer] with its response to claim on 9 November 1989, that, on the occasion of this conversation of 10 February 1989, the parties specifically discussed the previous excess deliveries of [Seller] and came to the conclusion that: "as of now, only what is ordered will be delivered". With respect to the restriction "as of now", this could only be understood in such a way that [Buyer] still wanted to accept the excess deliveries that had, at that stage, already been made and thereby - implicitly - also the delivery made the subject of account No. 9253 of 13 January 1989. [Buyer] only wanted to retain its right to refuse acceptance of further excess deliveries from that point on.
The decision on interest conclusively made in the first instance under Art. 78 CISG is not, as such, challenged by [Buyer].
III. [Buyer] continues to base its objections to the awarded claim for payment on the fact that [Seller] delivered defective goods (cf. I) too late (cf. II) and eventually stopped delivering at all (cf. III), whereby, as evidenced by the general reference contained in its reasons for appeal dated 23 April 1992, it relies on its plea in the first instance of total damages thereby caused in the amount of 17,000.00 DM + 43,451.15 DM + 83,706.91 DM = 144,158.06 DM and, therefore, claims set-off and, in the alternative, a right of retention.
Ultimately, how these objections are to be legally qualified according to the applicable provisions of the CISG is irrelevant; they cannot be sustained, if only for the reason that, in agreement with the first-instance judge, the alleged breaches of contract forming the basis of these objections cannot be assumed on the part of [Seller].
1. To the extent that [Buyer] cites defects in the delivered doors according to Arts. 35, 36 CISG, it can no longer rely on these defects, regardless of the fact that it has not sufficiently substantiated its claim (cf. a), according to Art. 39(1) CISG (cf. b).
a. In any case, [Buyer] explained the defects that it objected to in the doors delivered by [Seller] in its response to claim of 9 November 1989, as stated in the decision appealed against. However, [Buyer]'s further pleadings in this regard do not address which doors from which deliveries were (are) affected to what extent by the defects complained of.
In this context, [Buyer] firstly relies on the argument that, with respect to those doors delivered by [Seller] that have already been on-sold, the "proportion of returns amounted to at least 20%" due to the defects (cf. response to claim) and that, in any case "all" of the doors still in storage at [Buyer]´s location are "defective". Then, yet again, [Buyer] restricts these pleadings in such a way that [Seller] delivered "most" of the doors "defective", that "hardly" a single delivery was "precise", that "partially the wrong doors", "partially too many" and "partially unusual sizes" were delivered, and that, therefore "at least 50% of the doors in storage (at [Buyer])" are affected. Consequently, even now it cannot be ascertained from the -- partly contradictory -- pleadings [Buyer] has already made, which doors from which deliveries allegedly showed the defects complained of to what extent. In this way, this applies all the more if one also considered [Buyer]´s pleadings on appeal, according to which it was agreed between the parties on 6 April 1992 that [Buyer] should "get rid of" the doors from previous deliveries of [Seller] that were still in its storage, i.e., on-sell and [Seller] was to supplement these stocks so that a full range was available. Such a procedure would even argue against the assumption that the doors from previous deliveries of [Seller] that were then still in storage at [Buyer] were apparently defective.
However, after all this, which, in any case, the first-instance judge correctly referred to, the arguments of [Buyer] on the type and scope of the defects in the doors delivered by [Seller] that it complained of are so uncertain, with the consequence that, for this reason alone, the evidence given by witnesses and experts of [Buyer] in this regard had no effect.
b. Regardless of these considerations, [Buyer] can no longer rely upon the alleged defectiveness of the doors delivered by [Seller] for reasons of law under Arts. 38, 39 CISG, as [Buyer] failed to notify the defects in good time.
b1. According to Arts. 38(1), 39(1) CISG, [Buyer] was obliged to examine the doors delivered by [Seller] within as short a period as is practicable in the circumstances, and to give notice of any eventual defects to [Seller] within a reasonable time after it discovered or ought to have discovered such defects.
[Buyer]'s duty to examine the goods and to give notice of the lacks of conformity, which were correctly affirmed by the first-instance judge, was not, contrary to the appeal pleadings, made impossible.
According to Art. 38(3) CISG, in cases of goods that are redirected in transit or redispatched by the buyer without a reasonable opportunity for examination by him and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch, examination may be deferred until after the goods have arrived at the new destination. However, [Buyer] cannot successfully rely on this provision.
In this context, the first-instance judge rightly referred to the fact that, taking into account the sense and purpose of the buyer´s duty to examine and notify lacks of conformity, namely to establish clarity regarding the conformity of the goods with the contract as quickly as possible, the exception provided for in Art. 38(3) CISG is only intended to apply to those cases in which the buyer is a mere stopover, or where the goods, as with so-called onward transactions (Streckengeschäft), are delivered directly from the seller to the ultimate consumer (of the buyer). However, Art. 38(3) CISG does not regulate cases in which the buyer initially places the goods in its own storage and then, from there, on-sells them without being able to predict, at the outset, to what extent and, above all, when such on-selling is to take place.
However, the latter case is the one that applies to [Buyer], as it keeps its own large storage warehouse to which it had the doors ordered at [Seller] delivered, and from which it then on-sold these doors. The sole circumstance that [Buyer], on its part, on-sold the doors delivered by [Seller] in accordance with the orders to its customers, could, at most, and then only possibly, justify the applicability of Art. 38(3) CISG on these facts if [Buyer] had made its orders from [Seller] in reliance on orders that had already been placed by its own customers. However, the counter-argument to such a case constellation, which, in any event, was not even alleged by [Buyer] and would bring with it, according to the exception under Art. 38(3) CISG, considerable evidential burdens, is the agreement dated 6 April 1989, which was already referred to and mentioned by [Buyer], in which [Buyer] was supposed to slowly "get rid of" the stock of doors then still present after supplement by [Seller] for the purposes of providing a full range of the goods.
[Buyer] unsuccessfully relies on a trade usage, whereby, in transactions such as those that it conducted with [Seller], it is allegedly unusual to examine the delivered goods immediately and notify of any eventual defects. Even if one wanted to assume the existence of such a trade usuage, regardless of the circumstance that [Buyer] failed to sufficiently establish its territorial, temporal, personal and factual sphere of application, [Buyer] could not rely on it. The duty to examine the goods and to give notice on the lacks of conformity in Arts. 38, 39 CISG can be set aside (cf. v. Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht, 1990, Art. 38 CISG (Stumpf)) para. 2 and Art. 39 CISG (Stumpf) para. 6), and this ability to set aside can arise by means of an appropriate trade usage (cf. v. Caemmerer/Schlechtriem, ibid, Art. 9 CISG (Junge) para. 2). However, according to Art. 9(2) CISG, a usage is only applicable if the parties have not agreed otherwise, and this "priority of contract" (cf. v. Caemmerer/Schlechtriem, again, Art. 9 CISG (Junge) para. 9) argues against setting aside the duty to examine the goods and to give notice on the lacks of conformity in Arts. 38, 39 CISG by means of an -- implicit -- trade usage to that effect in the present case.
In the statement of claim dated 18 September 1989, [Seller] actually indisputably asserted that all of its deliveries were subject to its standard conditions of sale. On these facts, [Buyer] did, however, implicitly accept [Seller]'s standard conditions of sale under Arts. 8(2), 18(1) first sentence, 19(1) CISG, as it accepted the first delivery of [Seller], which was made in accordance with the confirmation of order, and subsequently placed further orders with [Seller]. Each confirmation of such order made reference to the standard conditions of sale on the front page and were printed on the reverse side. According to paragraph 5 of these rather compact and easily read standard conditions of sale, which were also produced in the German language, the buyer was to raise objection with respect to the quality of the goods delivered by [Seller] "within eight days after delivery". Whether and in what way this provision, with its inflexible regulation of the time limit that does not take account of actual circumstances, maintains the supervision of content of standard conditions (Inhaltskontrolle), to the extent that it intensifies [Buyer]'s obligation to examine the goods and notify of lack of conformity under Arts. 38, 39 CISG, does not need to be addressed. Significant in the case at hand is the circumstance that alone the existence of this provision, which became part of the contract in accordance with clause 5 of [Seller]'s standard conditions of sale, advocates the position that, in any case, the parties intended to exclude any trade usage which would have had the effect of excluding the duty to examine and give notice of lack of conformity under Arts. 38, 39 CISG.
In contrast to the view put forward by [Buyer] in the appellate court, it also cannot be assumed that [Seller] waived its right to rely on a breach of [Buyer]'s duty to promptly examine and give notice of the lacks of conformity; in particular, this can not be ascertained from the discussions between the parties on 10 February and 6 April 1989. At the time of these discussions, as evidenced by the minutes written and referred to by [Buyer], details as to the various defects in the doors delivered by [Seller] were discussed. However, these discussions apparently only referred to quite specific defects in specific doors and, according to the minutes, led to [Seller] partially acknowledging the defects discussed and subsequently -- indisputably -- granting [Buyer] two credits in the amount of 15,427.35 DM + 15,694.50 DM = 31,121.85 DM for the returns due to the defects. With respect to whether [Seller], on its part, actually generally and independent of the defects specifically discussed at that time, waived its right vis-à-vis [Buyer] to rely on the duty to make prompt examination and give notification of lacks of conformity in the doors delivered, nothing can be seen from the minutes of the conversations of 10 February and 6 April 2002 that would give rise to this view.
Finally, [Buyer] also cannot successfully claim that it was impossible or at least unreasonable for it to comply with its duty to examine and give notification of lacks of conformity in the goods, as provided for in Arts. 38, 39 CISG, due to the fact that the doors were delivered in slabs and were shrink-wrapped. Impossibility can already be excluded due to [Buyer] itself pointing out, at the time of its subsequent notification of lacks of conformity on 4 July 1989, that it "had examined the doors still here in storage and had established the following lacks of conformity. It is also insufficient to assume unreasonableness regarding a prompt examination and, if appropriate, notification of lacks of conformity in the doors delivered for the simple reason that they were delivered in slabs and were shrink-wrapped. The fact that the doors -- as agreed in the terms of delivery -- were delivered in slabs and covered with a plastic coating is not a reason not to undertake an examination. Namely, [Buyer] could have removed the plastic coating around the slabs without risking damage to the individual doors and would have thereby had the -- certainly reasonable -- possibility to take out each individual door, packed in cardboard in conformity with the contract, and examine it. In this way, [Buyer] could have at least made random tests to establish any potential mistakes, which would have then, more or less, necessarily led to repetitive mistakes, since the doors were manufactured in serial production, in which production defects are continually repeated. This examination and the following repacking in cardboard would not have been detrimental to the on-sale of the doors in any way whatsoever and, contrary to the allegations of [Buyer], would not have robbed the goods of their "brand new" feature. As for the rest, [Buyer] would not have been allowed to simply fail to make prompt examination and, if appropriate, notification of lacks of conformity even if [Buyer] had assumed such an unreasonableness, but would have had to contact [Seller] and reach an amicable rule to suit its needs, particularly after having accepted the simple eight-day notice period provided for in [Seller]'s standard conditions of sale.
b2. It is therefore to be assumed that, if [Buyer] had been obliged to uphold its duty to examine the goods and to give notice of the lacks of conformity according to Arts. 38, 39 CISG, then, in any case, the notification of defects made on 4 July 1989 was not (or no longer) suited to fulfilling this duty.
Whether this notification of defects corresponded to the requirements as to content under Art. 39(1) CISG, which requires "specifying the nature of the lack of conformity", is already in great doubt, since this notification by [Buyer] did describe some defects, but generally referred to all the doors that were then still in [Buyer]'s storage, without differentiating regarding which doors from which deliveries were supposed to have which defects.
Irrespective of this, the notification of 4 July 1989 was, in any case, too late within the meaning of Arts. 38(1), 39(1) CISG. The rule has no definite time limit, but rather establishes this time limit from a "short" period as is practicable in the circumstances according to Art. 38(1) CISG and from a "reasonable" period of time to notify the lacks of conformity established or able to be established according to Art. 39(1) CISG. However, if one takes into account that, according to [Seller]'s account, upon which the claim for payment is based, its last delivery took place before 14 April 1989 -- the account No. 9441 dated 20 April 1989 was merely to correct an error --, then [Buyer]'s notification not made until 4 July 1989 is certainly to be regarded as having been made too late. In particular, this also applies in light of the eight-day time limit for notification of defects, as provided in clause 5 of [Seller]'s standard terms of sale. Even if one regards this time limit as too short, as it fails to consider the individual circumstances of the case, and therefore incompatible with Arts. 38(1), 39(1) CISG, this indicates in any case that the respective deliveries of [Seller] should have been made especially quickly in light of possible complaints of lack of conformity. The defects notified by [Seller] [Translator's note: "notified by [Buyer]" would be an accurate reflection of the Court's intent here.] in its correspondence dated 4 July 1989 and specified in accordance with its pleading recited in the judgment appealed against were namely, as already correctly determined by the first-instance judge, such that they would have easily been determined by an appropriate examination.
b3. Therefore, it cannot be held that [Buyer] fulfilled its duty to examine the goods and to give notice of the lacks of conformity according to Arts. 38(1), 39(1) CISG before 4 July 1989.
In this context, the minutes of the conversations from 1 July 1988 and from 14 October 1988, submitted with the first-instance pleadings on 22 January 1990, are not relevant. Since, irrespective of the fact that the defects in quality mentioned there obviously do not concern the deliveries on which the disputed accounts are based, these complaints were already resolved in the following period of time, as can be seen from the cited minutes of the conversation.
To the extent that [Buyer] proves, in this regard, relying on the witness Schreyer in the reasons for appeal dated 23 April 1992, that "it carried out a spot check after every delivery regarding accounts from December 1988 until April 1989 and determined that the material was poor" and that it "complained of this immediately", this assertion is not sufficiently definite and therefore not relevant. Namely, nothing can be taken from this assertion regarding the content and subject matter of the alleged complaints and, therefore, nothing can be said as to whether and to what extent these alleged complaints each "exactly described the type of lack of conformity" of each doors about which a complaint was made, and therefore whether the requirements of Art. 39(1) CISG were complied with.
Since [Buyer] (also) relies, in this context, on the conversations of the parties on 10 February and 6 April 1989 already mentioned, it was already set out in b1. that the explanations then made by the parties apparently only referred to quite specific defects in certain doors, and that, furthermore, the defects then discussed were partially acknowledged by [Seller] and subsequently remedied by the granting of credits for a total of 31,121.85 DM. Consequently, whether, and if so, to what extent these discussions of the parties (also) referred to such defects extending beyond those that were then acknowledged by [Seller] and subsequently remedied by credit, which could (still) be used to by [Buyer] to object to the claim for payment in the present proceedings, sufficient reasons can be ascertained neither from the minutes of conversation dated 10 February and 6 April 1989, nor from the pleadings of [Buyer] referring to them.
b4. In light of everything, under Art. 39(1) CISG, [Buyer] lost its right to rely on the lacks of conformity in the doors delivered by [Seller], which it continues to assert in the present proceedings, because of its failure to comply with the duty placed on it by way of Arts. 38(1), 39(1) CISG to give notice of the lacks of conformity and cannot derive rights from this failure for the purposes of answering the claim for payment.
Although, under Art. 40 CISG, this legal consequence would not apply if the lacks of conformity complained of by [Buyer] were such that [Seller] "knew" or of which "[Seller] could not have been unaware", whereby the latter wording requires a particularly grave breach of [Seller]'s duty of care akin to the German law concept of "gross negligence" (grobe Fahrlässigkeit) (cf. v. Caemmerer/Schlechtriem, ibid, Art. 40 CISG (Stumpf) para. 4). However, [Buyer] has not made any more detailed factual arguments to fulfill the requirements of this exception, for which it bears the burden of proof in this regard, which, in the present case, would have been all the more necessary when, on the occasions of the conversations of the parties on 10 February and 6 April 1989, which have already been mentioned several times, the lacks of conformity in the doors delivered by [Seller] were explained and have already been acknowledged by [Seller] and subsequently remedied by way of credit in the amount of 31,121.85 DM.
However, under Art. 44 CISG, [Buyer] could, irrespective of Art. 39(1) CISG, still derive a right to reduce the purchase price in accordance with Art. 50 CISG, or a right to claim damages -- although not on the basis of lost profits -- under Arts. 74 to 77 CISG, from the lacks of conformity in the doors that it alleges in the present proceedings. In order to succeed in this regard, [Buyer] would need to show that it had a "reasonable excuse" for failing to comply with the duty to give timely notice of defects under Art. 39(1) CISG. However, also in this regard, nothing can be seen from that argued by [Buyer], who bears the burden of proof in this regard, or from anything else, that would lead to this conclusion. In particular, [Buyer]'s arguments already raised against the existence of this duty to give notice and those arguments already dealt with under b1 are insufficient in this context.
2. To the extent that [Buyer] relies on late deliveries by [Seller] and therefore, alleges a breach of contract according to Art. 33 CISG, its arguments are insufficient to establish such a breach.
According to Art 33 CISG:
"The seller must deliver the goods: (a) if a date is fixed by or determinable from the contract, on that date; (b) or if a period of time is fixed by or determinable from the contract, at any time within that period unless circumstances indicate that the buyer is to choose a date; (b) or in any other case, within a reasonable time after the conclusion of the contract."
In order to establish a breach of contract by [Seller] in this respect, [Buyer] would have had to argue both the content as well as the point in time of the individual door deliveries by [Seller], which it has not done.
Although in this context, [Buyer] submitted, without further explanation, several exhibits to the file with its first-instance statement of claim dated 1 February 1990, from which it should be discerned that there were alleged late deliveries on the part of [Seller]. However, [Buyer] has not thereby satisfied its burden of proof in this respect.
This also applies to the appellate instance. Although [Buyer] was already informed of its lack of substantiation of its arguments on the alleged late deliveries of [Seller] in the judgment appealed against, its arguments in this regard in the reasons for appeal dated 23 April 1992 are limited to the vague statement made by the witness Schreyer that "in addition, there were late deliveries."
3. To the extent that [Buyer] finally relies on the fact that [Seller] ultimately did not accept any more orders from it and that, in particular, [Seller] also failed to continue to undertake the agreed supplementary deliveries for the purpose of complementing the range, in accordance with the first-instance judge, this court also fails to see a breach of contract in such behavior, as [Seller] was not (or no longer) obliged to continue to deliver to [Buyer].
From a factual point of view, however, an obligation to make further deliveries could be assumed if [Seller] had previously only to deliver "a range" to [Buyer] and it had hitherto failed to fulfill this delivery obligation, with the consequence that [Buyer] only had incomplete ranges in its storage, which, as such, could not have been sold. However, [Buyer] did not allege this. There are no reasons to assume such a delivery obligation, whether from the terms of business, or from the orders provided. In addition, delivery in this way would have been unusual in the case of doors, as these are generally not dealt with in "ranges" (such as per house: living room door, kitchen door, bathroom door, etc. all in specific, pre-determined sizes), but rather, are available in the specialized trade solely in different models and different sizes, in order to take into account the individual requirements of potential customers according to the technical requirements as to model and size set out by the architect.
In any case and irrespective thereof, such an obligation to make further deliveries cannot be sustained for legal reasons. As far as the point of view of [Buyer] in this context, which was raised anew in the appellate court, of a contract for successive deliveries under Art. 73 CISG or, at least, a duty on [Seller] to make further deliveries arising from the duty of good faith is concerned, the first-instance judge rightly held that there could be no obligation on [Seller] to make further deliveries to [Buyer], for the reason that the existence of a contract for successive deliveries with a continuing delivery obligation on [Seller] could not be assumed and that, if, independent of the existence of a contract for successive deliveries, one wanted to derive an obligation on [Seller] to make further deliveries to [Buyer] from [Buyer]'s reliance on supplementary deliveries in order to complete the range from a good faith perspective, any such obligation on [Seller] was extinguished, at least in light of the fact that [Buyer] wrongly refused to pay the amount awarded to[Seller] in the judgment appealed against. If, by way of contrast, [Buyer] refers in its reasons for appeal dated 23 April 1992 to its offer to [Seller], irrespective of [Buyer]'s cessation of further payments, of a guarantee of a large German bank for 500,000.00 DM, this reference is insufficient for the court here to reach an opinion contrary to that of the first-instance judge, as [Seller] could have demanded payment from [Buyer] and did not need to subject itself to a simple assurance by way of a guarantee, since [Buyer], according to the reasons already stated, could not (or could no longer) have relied upon the lacks of conformity in the deliveries asserted to establish its refusal to pay.
The further statement of [Buyer] is also irrelevant in this context, namely that, in any case, due to the conversations on 6 April 1989, a "new agreement" on the content was made between the parties, that [Buyer] was supposed to "get rid of" the doors from previous deliveries of [Seller] still in its storage and, for this purpose, [Seller] was to make the necessary supplementary deliveries in accordance with the order to complete the range, a concept that was not discussed in more detail. Even an eventual obligation to make further deliveries on [Seller] that may have been established by this did not (or did no longer) need to be fulfilled, as long as [Buyer] refused to make payment of the amount awarded to [Seller] in the judgment appealed against. There are no actual reasons arising from the minutes of discussion on 6 April 1989 to give rise to the assumption that [Seller] was supposed to fulfill the obligation to make further deliveries - allegedly - agreed upon on 06 April 1989 in accordance with the minutes of the discussion in this regard, unconditionally and, in particular, irrespective of whether and when [Buyer] paid the account amounts, arising from the deliveries already made, that were still outstanding and awarded to [Seller] in the judgment appealed against. Rather, reliance on these minutes is much more likely to lead to the assumption that [Seller], after it acknowledged a part of the defects complained of by [Buyer] and granted credits in a total amount of 31,121.85 DM, obviously assumed, and was entitled to do so, that the agreement on the above-mentioned obligation to make further deliveries meant that [Buyer] would now make payment of the amount in excess of this credit still owing for door deliveries already made and accounted for.
The appeal by [Buyer] was dismissed with costs according to § 97(1) ZPO [*].
The decision for the provisional enforciability is based on §§ 708 No. 10, 711 ZPO.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff-Appellee of France is referred to as [Seller]; Defendant-Appellant of Germany is referred to as [Buyer]. Amounts in former German currency (Deutsche Mark) are indicated as [DM].
Translator's note on other abbreviations: AnwBl. = Anwaltsblatt [German magazine for lawyers]; BGH in NJW = Entscheidungen den Bundesgerichtshofes veröffentlicht in der Neuen Juristischen Wochenschrift [Decisions of the Supreme Court published in the German weekly judicial magazine]; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on International Private Law]; EuGVÜ = Europäisches Übereinkommen über die gerichtliche und Zuständigkeit und Vollstreckung gerichtlicher Entscheidungen in Zivil- und Handelssachen [European Convention for Jurisdiction and Enforcement]; ZPO = Zivilprozeßordnung [German Code on Civil Procedure]
** Stella Heyken is a law student of the University of Osnabrück, Germany
*** Mariel Dimsey, LL.M., is a Research Assistant and Teaching Assistant at the University of Basel, Switzerland.Go to Case Table of Contents