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CISG CASE PRESENTATION

Germany 12 October 1995 District Court Trier (Wine case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/951012g1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19951012 (12 October 1995)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 7 HO 78/95

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: Wine


Case abstract

GERMANY: LG Trier 12 October 1995

Case law on UNCITRAL texts (CLOUT) abstract no. 170

Reproduced with permission of UNCITRAL

The plaintiff, an Italian wine seller, sued the German buyer (defendant) for payment of the price of wine sold and delivered. The [buyer] refused payment arguing that the delivered wine was not of merchantable quality since it contained 9% water with which the wine had been mixed. The bottles had therefore been seized and the wine destroyed by German authorities and the [buyer] had been charged with the costs for these measures. The [buyer] set off these costs against the [seller's] claim (articles 45(1)(b) and 74 CISG).

The court found in favour of the [buyer]. Under the CISG, the [buyer] could set off its damages against the purchase price as a result of the seller's breach of contract. The court found that the [buyer] had not lost its right to rely on the non-conformity of the wine even though the [buyer] did not examine the wine for water after delivery (articles 35, 38 and 39 CISG). In this case the [seller] could not have been unaware of the non-conformity (article 40 CISG).

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Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 38 ; 39 ; 40 ; 49 [Also cited: Articles 35 ; 45(1) ; 53 ; 62 ; 68 ; 74 ; 78 ; 91(4) ] [Also relevant: Articles 6 ; 25 ; 46 ]

Classification of issues using UNCITRAL classification code numbers:

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

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

40B [Seller's knowledge of non-conformity: where seller fails to disclose known non-conformity, seller loses right to rely on Articles 38 and 39];

49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract]

Descriptors: Examination of goods ; Lack of conformity notice, timeliness ; Lack of conformity known to seller ; Avoidance ; Fundamental breach

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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=185&step=Abstract>

German: Wirtschaftliche Beratung (1996) 398

Italian: Diritto del Commercio Internazionale (1997) 751 No. 166

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 299

CITATIONS TO TEXT OF DECISION

Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/160.htm>; Neue Juristische Wochenschrift-Rechtsprechung Report (NJW-RR) 1996, 564-565; Wirtschaftsrechtliche Beratung (WiB) 1996, 398; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=185&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-255 [243 n.986 (application of Art. 40)]; Honnold, Uniform Law for International Sales (1999) 282 [Art. 40]; Kuoppala, Examination of the Goods under the CISG and the Finnish Sale of Goods Act (2000) 4.8 [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.358, 398, 400; [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 45, 67, 112; 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. 13 Art. 40 para. 4 Art. 45 para. 27 Art. 74 para. 15; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 157

German: Zoberbier, Wirtschaftsrechtliche Beratung (WiB) 1996, 398

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Trier

12 October 1995 [7 HO 78/95]

Translation [*] by Ruth M. Janal [**]

Translation edited by Camilla Baasch Andersen [***]

FACTS OF THE CASE

The [buyer] repeatedly bought wine from the [seller].

[Seller's position]

The [seller] makes a claim against the [buyer] for payment of the remaining purchase price in the amount of DM [Deutsche Mark] 16,496.69 for a delivery effected on 13 July 1992, which was invoiced for DM 20,639.

[Buyer's position]

The [buyer] objects to the [seller]'s claim for payment because the white and rosé wines delivered by the [seller] on 13 July 1992 were not fit for circulation; a forbidden addition of 9% water to the wine had been found. To the extent that the wine had not yet been sold, it had been seized by the authorities on 3 September 1992 and subsequently destroyed. The [seller] had immediately been informed that the wine was seized.

The [buyer] submits that it suffered damages in the amount DM 16,496.69, resulting from the value of the white and rosé wines seized, the cost of the lock-up of the seized bottles and the attorney costs accrued during the preliminary criminal investigation of the prosecution in Trier [Germany].

[Court's decision]

The District Court dismisses the [seller]'s claim.

REASONING OF THE COURT

I. [CISG as the applicable law]

The contract between the parties is governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG) of 11 April 1980 (BGBl. [*] II 1989, 586). German and Italy are both Contracting States to the CISG. The Federal Republic of Germany ratified the CISG on 5 July 1989 (BGBl. 1989, 586), the deed of ratification was deposited with the Secretary-General of the United Nations on 21 December 1989 (cf. Schwenzer, NJW [*] 1990, 602). Effective 1 January 1991 the provisions of the CISG are applicable law (Art. 91(4) CISG). Italy also ratified the CISG, which entered into force in Italy on 1 January 1988 (cf. Herber/Czerwenka, Internationales Kaufrecht, 1991, before Art. 1 n.16). The parties have not excluded the application of the CISG, therefore the CISG applies by virtue of its Art. 1(1)(a).

II. [Seller's claim is dismissed]

The [seller] is not entitled to payment of the remaining purchase price in the amount of DM 16,496.69, because the [buyer] possesses a compensating claim for breach of contract under Arts. 45(1)(b), 74 CISG.

     1. [Non-conformity of the goods]

The goods delivered by the [seller] did not conform to the contract as required by Art. 35 CISG as both the white and the rosé wines contained an additive of 9% water and consequently were not fit for circulation under Art. 73 in connection with Art. 15 and attachment VI of (EC [*]) regulation no. 822/87.

Following the expert report commissioned during the criminal investigation, the Court is convinced that the wine did in fact contain 9% added water. The report of the Chemical Examination Office, Trier [Germany] of 10 September 1992 explains in detail that the samples taken were examined by the expert Dr. F. of the Institute for Radio Agronomy at the Nuclear Research Facility, Jülich [Germany]. The comparison of the isotope-relationship 180/160 in the water of the wine with the ground water of the respective wine-growing region makes it possible to calculate the addition of water according to the formula explained in the report. The Court has no reason to doubt the correctness of this method and the reliability of the expert's findings.

The [seller] pleads without success that the wine delivered by [seller] was not to be queried according to the examination results of an Italian laboratory for agricultural food chemistry, which the [seller] submitted. The Court finds no contradiction between these lab results and the findings of the expert Dr. F. In particular, it was neither submitted nor is it evident that the Italian laboratory for agricultural food chemistry examined the wine at all for added water. It further needs to be noted that the wines delivered were also inconspicuous according to the report of the Chemical Examination Office Trier when examined according to the conventional chemical analysis. Therefore, it can be said that there is a certain correspondence between the examinations undertaken in Italy and in Germany.

The Court considers as proven the fact that the water had already been added at the time of delivery of the wine. It is of particular importance for the Court's conviction that the examined samples had already been taken on 14 July 1992, that is one day after the delivery, which undisputedly took place on 13 July 1992. There was hardly any time for manipulation on the part of the [buyer]. Furthermore, an addition of water by the [buyer] would have had to lead to an increase of the amount of wine, which was not found to be true.

     2. [Time for examining goods and notice of non-conformity; seller's knowledge]

Contrary to the [seller]'s pleadings, the [buyer] did not lose its right to rely on the lack of conformity following Arts. 38, 39 CISG. In the Court's opinion, there is no obligation on the part of a wine buyer - without specific grounds for suspicion - to have the wine examined for water additions with a method that does not belong to the conventional chemical analysis. In the present case, there was especially no cause for such an examination from the position of the [buyer], because samples of the wine had already been taken the day after the delivery by the wine control authorities. It cannot be queried that the [buyer] notified the [seller] of the non-conformity only upon the announcement of the examination results, which went hand in hand with the securing of the wine by the authorities.

Moreover, the [seller] is not entitled to rely on the provisions of Articles 38 and 39 CISG because the lack of conformity relates to facts of which the [seller] knew or could not have been unaware and which it did not disclose to the buyer [Art. 40 CISG]. The delivery of wine with water additions, which is not fit for circulation, constitutes willful deceit.


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 is referred to as [buyer]. Amounts in German currency (Deutsche Mark) are indicated as [DM].

Translator's note on other abbreviations: BGBl. = Bundesgesetzblatt [German Federal Law Gazette]; EC = European Community; NJW = Neue Juristische Wochenschrift [German law journal].

** Ruth M. Janal, LL.M (UNSW), a PhD candidate at Albert-Ludwigs-Universität Freiburg, has been an active participant in the CISG-online website of the University of Freiburg. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia.

*** 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. She is currently finishing her PhD thesis on uniformity of the CISG at the University of Copenhagen.

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