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CISG CASE PRESENTATION

Germany 10 February 1994 Appellate Court Düsseldorf [6 U 32/93] (Shirts case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/940210g1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19940210 (10 February 1994)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 6 U 32/93

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

CASE HISTORY: 1st instance LG Düsseldorf 4 December 1992 [reversing] [CISG overlooked]

SELLER'S COUNTRY: France (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Shirts


Case abstract

GERMANY: OLG Düsseldorf 10 February 1994

Case law on UNCITRAL texts (CLOUT) abstract no. 81

Reproduced with permission from UNCITRAL

The defendant, a German buyer of textiles, refused to pay to the plaintiff, a seller, the balance of the purchase price, on the grounds that the goods did not conform with the contract specifications. At issue was whether the [buyer] raised the objection of lack of conformity within a reasonable period of time. The fi[r]st instance court held in favour of the [seller].

The appellate court found that the contract had been concluded before the CISG entered into force for Germany and, applying German private international law rules, held that the CISG was applicable as part of the applicable law of France. On the merits of the case, the court found that the [buyer] had raised the objection of lack of conformity of the goods two months after delivery, while it could have discovered easily the defects and raised the objection within a few days after delivery, if it had conducted a random search. It was held that the [buyer] had lost its right to allege lack of conformity because it failed to raise it within a reasonable time.

The court of appeals held that interest was payable under article 78 CISG at the rate existing under other applicable French law. The case was remanded to the first instance court because of procedural errors.

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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 6 ; 38(1) ; 39(1) ; 53 ; 74 ; 78 [Also cited: Articles 35 ; 44 ; 45 ; 46 ; 49(1)(a) ; 50 ; 81 ; 95 ]

Classification of issues using UNCITRAL classification code numbers:

6B [Agrements to apply Convention: Convention applied in absence of express or tacit exclusion];

38A [Buyer's obligation to examine goods: time for examining goods];

39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

53A [Buyer's obligation to pay price of goods];

74A [Damages (general rules for measuring): loss suffered as consequence of breach (collection costs)];

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

Descriptors: Examination of goods ; Notice of lack of conformity, timeliness ; Price ; Damages ; Collection costs ; 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: 8 European Current Law, Monthly Digest (1995) No. 150 [134] = European Current Law Yearbook (1995) No. 2050 [799]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=68&step=Abstract>

French: Revue de Droit des Affaires Internationales/International Business Law Journal (1995) 751

Italian: Diritto del Commercio Internazionale (1995) 454-455 No. 75

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 249-250

CITATIONS TO TEXT OF DECISION

Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/116.htm>; Der Betrieb (DB) 1994, 2492-2494; OLG Reports Düsseldorf 1994, 72-73; Recht der Internationalen Wirtschaft (RIW) 1995, 53-55; Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts im Jahre (IPRspr) 1994 No. 26 [67]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=68&step=FullText>

Translation (English): Pace Review of the Convention on Contracts for the International Sale of Goods (CISG) 1998, Kluwer Law International, 373-377 [cited as 2 October 1994] [text presented below]

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-255 [227 n.807 (examination of goods), 253 n.1079 (interest issues)]; Behr, 17 Journal of Law and Commerce (1998) 266-288 [abstracts and comments on 29 interest rulings from 10 countries (this case presented at 279)]; Karollus, Cornell Review of the CISG (1995) 51 [69-71] [comments on examination and notice issues in the context of German case law on the CISG]; Curran, 15 Journal of Law and Commerce (1995) 175-199 [196-198] [English summary of comments by Witz cited below] [comments on notice issues in general]; 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) 3.3.1 [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)]; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.340, 371, 584, 593; 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); [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 39; 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. 38 para. 16 Art. 39 para. 17

Finnish: Huber/Sundström, Defensor Legis (1997) 747 [759 n.60]

French: Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale (L.G.D.J., Paris: 1995) 89-91, 100

German: Piltz, [1999] Transportrecht, Beilage "Internationales Handelsrecht" (TranspR-IHR) 13 [14 n.7]

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)

Court of Appeals (Oberlandesgericht) Düsseldorf 10 February 1994

Translated by Alston & Bird LL.P.

Editors: William M. Barron, Esq.; Birgit Kurtz, Esq.

Extract from the decision

Plaintiff [seller] has a claim against defendants [buyers] for payment of the amount of f [French francs] 61,646.40 as set forth in the complaint -- subject to a decision on the set-off. The [seller] can claim this amount from the OHG [*] operated by the [buyers] as the balance of the purchase price for the textiles it had delivered, in accordance with Art. 53 of the United Nations Convention on Contracts for the International Sale of Goods of April 11, 1980 (CISG; compare BGBl. [*] 1989 II, p. 588 et seq.) ... The [buyers], as partners in the OHG, are jointly and severally liable for this purchase price claim. This follows from HGB [*] § 128 ...

[ ... ]

Thus, the [buyers] are liable under HGB § 128 for the purchase price claim that the [seller] has against the OHG operated by the [buyers]. This purchase price claim is based on CISG Art. 53.

It is uncontested that, in 1989, the [seller] and the OHG operated by the [buyers] concluded several sales contracts for the delivery of textiles, and a part ... of the agreed-upon, total purchase price ... remains outstanding.

The provisions of the above-mentioned UN Convention on the International Sale of Goods apply to the legal relationships resulting from the contracts of sale. It is true that the applicability does not follow from the direct force of these regulations as domestic German law, as this Convention only came into force in the Federal Republic of Germany on January 1, 1991 (compare Announcement dated October 23, 1990, BGBl. 1990 II, p. 1477), whereas the sales contracts in question date back to 1989. The applicability of the Convention in this case results from the fact that the general German conflict of laws rules apply to the present contracts, with the consequence that, under EGBGB [*] Arts. 28(1) and (2), French law, in principle, applies to the contracts, which, in turn, has provided for the application of the Convention since January 1, 1988.

The aforementioned general conflict of laws provisions, as set forth in the German Introductory Law to the Civil Code, apply to the present case, because the transactions at issue do not come within the scope of application of the Uniform Law on the International Sale of Goods (ULIS) of July 17, 1973 (BGBl. 1973 II, p. 885). For, under ULIS Art. 1, this law applies only to specified international contracts for the sale of movable goods if the parties have their registered offices in the territory of different signatory states. Under ULIS Art. 102, signatory states within the meaning of ULIS are countries which have ratified, or acceded to, the Agreement Relating to the Introduction of a Uniform Law on the International Sale of Goods. Since France was not a signatory state to this Convention, the special conflict of laws provisions embodied in ULIS Art. 1, which normally had priority over the general German conflict of laws rules, do not apply in this case (compare BGHZ [*] 96, 313, 3164; MüKo [*]/Martiny, 2d ed., App. I to EGBGB Art. 28, 43, with further citations).

Hence, within the framework of the applicable general German conflict of laws rules, EGBGB Arts. 28(1) and (2) apply here. This stems from the fact that it cannot be assumed that the contracting parties made a choice of law within the meaning of EGBGB Art. 27 -- for instance for the applicability of German law -- either at the conclusion of the contract or subsequently. None of the parties has expressly set forth that, at the conclusion of the contract, the applicability of German law was expressly agreed to. A tacit choice of law also cannot be assumed. There are no indications that point to the contracting parties tacitly relying on the application of German law at the conclusion of the contract. Similarly, no tacit choice of law with respect to German law can be found in the parties' conduct during the litigation. It is true that it can suffice that both parties tacitly assumed the applicability of German law. However, sufficiently clear and unambiguous statements by the parties as to which law should be applied here are not discernable.

Because there is no choice of law, the analysis of the contracts is therefore, under EGBGB Art. 28(1), governed by the law of the country to which they show the closest connection; under the assumption of EGBGB Art. 28(2), this is the country in which the contracting party that is to undertake the characteristic performance, has its main administrative or head registered office at the time of the contract's conclusion. The present contracts are contracts of sale in which the characteristic performance is undertaken by the seller (compare OLG [*] Frankfurt NJW [*] 1991, 3102; Palandt [*]/Heldrich, 52d ed., EGBGB Art. 28, 8, with further citations; MüKo/Martiny, supra, EGBGB Art. 28, 112, with further citations). That means that, in the present case, French law is applicable, because the [seller] has its registered commercial office in France and the performance was to be undertaken from there as well.

Since France has been a signatory state to the CISG since January 1, 1988 and has declared no reservation under CISG Art. 95 (compare MüKo/Martiny, supra, App. II to EGBGB Art. 28, 2; von Caemmerer/Schlechtriem, Kommentar zum einheitlichen UN-Kaufrecht (Commentary to the Uniform UN Sales Law), preceding CISG Arts. 1-6, 17), the analysis of the parties' legal relationships is subject to this Convention.

Moreover, the additional requirements with respect to the scope of application of the Convention as to the subject matter are met. Namely, the requirements of CISG Art. 1(1)(b) are present, because this case involves contracts for the sale of goods between parties that have their registered offices in different countries -- the [seller] in France and the [buyers] in Germany.

The fact that the [buyers] have asserted warranty claims in response to the [seller's] claim for the purchase price under CISG Art. 53 does not bar -- for instance under CISG Art. 81 -- the [seller's] claim.

[...]

In this respect, the provisions of the CISG are also applicable pursuant to the above-mentioned provisions. In the case of a purchase of fungible goods, as is the case here, the buyer can, under these provisions, upon the delivery of goods that do not conform to the contract, either demand subsequent improvement (CISG Art. 35, Art. 45(1)(a), Art. 46(1) and (3)), replacement (CISG Art. 35, Art. 45(1)(a), Art. 46(1) and (2)), a reduction of the purchase price (CISG Art. 35, Art. 45(1)(a), Art. 50), or damages (CISG Art. 35, Art. 45(1)(b), Art. 74), or declare the contract avoided (CISG Art. 35, Art. 45(1)(a); Art. 49(1)(a)).

The requirement for raising the warranty claims is, however, according to CISG Arts. 38 and 39, that the buyer have examined the goods without delay and have reported any defects within a reasonable time after their discovery or the possibility of their discovery, together with a specific description of the kind of non-compliance with the contract. If that did not happen, the buyer loses the right to assert the lack of conformity of the goods, unless he has a reasonable excuse for his failure to give notice of defects (CISG Art. 39(1), Art. 44). The point in time at which the buyer was obligated to have determined the breach of contract is governed by the provisions regulating the duty to examine. In this context, CISG Art. 38 provides that the goods must be examined within as short a period of time as the circumstances permit. This means that for the determination of the length of the period permitted to examine and give notice, which begins upon the delivery of the goods to the buyer, the circumstances of the individual case and the reasonable possibilities of the contracting parties are crucial, as to which a strict standard must be applied (compare BGH NJW 1982, 2730, 2732, with further citations on the largely analogous provisions of ULIS Arts. 38 and 39; von Caemmerer/Schlechtriem, supra, CISG Art. 38, 5, with further citations).

In the present case ..., it was easily possible to examine the shirts -- at least by way of sampling -- immediately after their delivery and to give notice of the defects discovered during the examination at least within a few days after the delivery of the goods. The [buyers] have not demonstrated conclusively that this happened.... [The] alleged ... point in time ... notice of the defects was given ... need not be further specified. This is so because, at that time, more than two months had already elapsed since the delivery of the goods. This period can no longer be regarded as "reasonable" within the meaning of CISG Art. 39(1).

[ ... ]

With respect to the ... collection costs, which the [seller] has raised as an ancillary claim ..., it must be considered on remand that it is true that the [seller], in the case of a breach of contract, could be entitled to damages under CISG Art. 74, where a breach of contract is understood to mean every form of objective failure to perform a contractual obligation, without the debtor first having to be given notice of default (compare von Caemmerer/Schlechtriem, supra, CISG Art. 74, 6, with further citations). However, it will have to be considered whether, and to what extent, the costs represented necessary expenditures for the collection of the claim. Regardless of the fundamental considerations that have to be made in this context with respect to the reimbursability of collection costs for the collection of foreign claims, the amount of the potentially reimbursable collection costs depends at any rate on whether, and in what amount, there is a set-off. This results from the fact that the amount of the collection costs possibly paid by the [seller] is determined conclusively by the amount of the claim to be collected.

Within the scope of the main claim, to which the [seller] is entitled, it is at any rate entitled, under CISG Art. 78, to interest for the asserted period of time. In this regard, the interest rate is calculated under French law, which, according to the contract and EGBGB Arts. 28(1) and (2), applies to the contract at issue.

[...]


FOOTNOTE

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

Translator's notes: BGBl = Bundesgesetzblatt [the German Federal Law Gazette]; BGHZ = Entscheidungen des Bundesgerichtshofes in Zivilsachen [Official Reporter of Decisions of the German Federal Court of Justice for Civil Matters]; EGBGB = Einführungsgesetz zum Bürgerlichen Gesetzbuch [German Introductory Law to the Civil Code]; HGB = Handelsgesetzbuch [the German Commercial Code]; MüKo = Münchener Kommentar [a well-known commentary to the Civil Code]; NJW = Neue Juristische Wochenschrift [a well-known weekly legal publication]; OHG = Offene Handelsgesellschaft [a type of German partnership]; OLG = Oberlandesgericht [Higher Regional Court or Court of Appeals]; Palandt [the most renowned and influential commentary to the German Civil Code].

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Pace Law School Institute of International Commercial Law - Last updated August 10, 2005
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