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CISG CASE PRESENTATION

Germany 15 February 1996 District Court Kassel [11 O 4187/95] (Clothes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/960215g2.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19960215 (15 February 1996)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 11 O 4187/95

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: Clothes


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 8 ; 18 ; 78 [Also cited: Articles 29(1) ; 53 ; 58 ; 59 ; 74 ]

Classification of issues using UNCITRAL classification code numbers:

8A ; 8B ; 8C [Intent of party making statement or engaging in conduct; Interpretation based on objective standards; Interpretation in light of surrounding circumstances];

18A ; 18C [Criteria for acceptance of an author; Assent by performing an act];

78B [Rate of interest]

Descriptors: Intent ; Acceptance of offer ; Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

German: [1997] 10 Jahrbuch für Italienisches Recht (JbItR) 209-210

CITATIONS TO TEXT OF DECISION

Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/190.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: 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. 8 paras. 16, 36, 41, 42 Art. 18 paras. 7, 8, 18 Art. 24 paras. 16, 17 Art. 29 paras. 2, 3

German: Gaus, [1997] Wirtschaftsrechtliche Beratung (WiB) 208-209

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court (Landgericht) Kassel

15 February 1996 [11 O 4187/95]

Translation [*] by Sabine Kossebau [**]

[FACTS OF THE CASE]

The Plaintiff [Seller] demands that the Defendant [Buyer] pay the rest of the purchase price.

There had been long standing business relations between the parties, in the course of which the [Seller] had repeatedly delivered fashionable items of clothing to the other party. On the basis of the respectively agreed upon prices, the following two-sided delivery and payment transfer was established:

[...]

Because of different complaints regarding the current fall/winter collection, the [Seller] granted a discount amounting to Deutsche Mark [DM] 5,220 on 4 February 1994. This left open a remaining payment balance of DM 41,787.

For reasons which cannot be elucidated anymore, a conversation that followed between the [Buyer]'s manager and a sales representative of the [Seller] was - without taking the shortly before granted discount into account - instead based on outstanding debts in the amount of DM 39,796. These outstanding debts were commented on by the Buyer in a letter of 10 February 1994.

On 23 March 1994, the [Buyer] sent a check by certified mail in the last-mentioned amount to its contract partner, whereas it went on to say:

"The redemption of this check ... requires your acquiescence to the settlement of the account in total in accordance with our letter of 10 February 1994 to you, which means the settlement of the whole account without late interest, various expenses of any kind, etc. This is not an on account payment. Should you not be agreeable to this, we ask you to return the check."

Without raising any objections, the [Seller] cashed the check that was sent. Besides that, it did not continue delivery to the [Buyer] and finally demanded a fast settlement of the difference of DM 11,657 by using an account statement of 10 June 1994.

To this, the [Buyer] through its agent objected in a letter of 12 July 1994 mentioning -- in [Buyer]'s view -- the agreement reached by the redemption of the check.

The [Seller] contests the existence of such an agreement, as the first complaints by the [Buyer] in the letter of 10 February 1994, relating to deliveries in June, July and August 1993 were made so very late that [Seller] did not have to assume any seriousness of the offer of compromise submitted at the same time. Besides which it should be taken into account that [Seller]'s company seat is in Italy and, in accordance with local law, there is no such thing as an implicit conclusion of a compromise deal through check redemption. Furthermore, because of language difficulties it should not be assumed offhand that an Italian company could fully understand an offer like the one set forth in the letters of 10 February and 23 March 1994 and especially could grasp the legal consequences coming out of it.

Ultimately, a waiver to possible repayment of months-old outstanding due claims through redemption of the check would be too much to expect of the [Seller], especially because it could not have gotten the settlement it was entitled to otherwise or at least only through legal proceedings.

Concerning the further particulars of the lawsuit it is referred to the written submission of 14 September 1995.

The [Seller] requests the court to order the [Buyer] to pay DM 11,657 together with interest (rate 13.5 %) since 18 February 1994. The [Buyer] requests the court to dismiss the case.

The [Buyer] contends that by redemption of the check sent with the letter of 23 March 1994, the [Seller] has implicitly agreed to the offer of compromise submitted at the same time, because of which the [Seller] is barred from additional claims, even more so as the warranty claims made within the statement of 10 February 1994 were naturally justified in the whole.

[HOLDING]

The [Seller]'s claim is partially justified.

[GROUNDS FOR THE DECISION]

According to Art. 53 of the United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 (CISG), the [Seller] may demand payment of the remaining purchase price of DM 7,211 at once.

If - as in the given case - it is not evident or otherwise recited that there has been a choice of another law in terms of EGBGB [*] Art. 27, international contractual relationships are to be governed by the law of the country in which the party that has to carry out the characteristic performance resides, EGBGB Art. 28 I 1, II. The country of the residence of the seller is therefore decisive in the case at hand (Palandt, BGB, 55. ed.; Art. 28 EGBGB, para. 8). This is Italy.

When the agreements which come into consideration here were concluded, Italy, like Germany, was a Contracting State of the CISG (v. Caemmerer-Schlechtriem, CISG, 2d ed., annex II), whose norms are to be given priority, CISG Art. 1(1)(a).

Pursuant to CISG Art. 53, the buyer, in accordance with the contract and the Convention, is obligated to pay the purchase price and to accept the goods. The [Buyer]'s duty of payment was furthermore determined by the respective status of the mutual delivery and payment transfer agreement, which per 17 December 1993 resulted in an indisputable calculated demand for DM 47,007.

This demand was not fully amortized through the redemption of the check sent on 14 April 1994, even if one additionally considers that - contrary to the [Seller]'s belief - a compromise deal on the basis of the letters of 10 February / 23 March 1994 had been concluded. This is so because, contrary to the [Buyer]'s view, the deal in question did not lead to a full clearing up of the disputed relationship.

First of all, it does not matter if the unharmonized Italian law knows an implicit acceptance of offers corresponding with the rule of BGB [*] 151 on implicit acceptance of offers in correspondence. Solely decisive is the UN sales law, according to which any statement or other conduct of the offeree indicating assent to an offer is an acceptance, CISG Art. 18(1). While such an acceptance in the main only becomes effective at the moment the indication of assent reaches the offeror, CISG Art. 18(2), sentence one, it is a different situation when the offeree indicates its assent by performing an act without notice to the offeror; in this case, the acceptance is effective at the moment the act is performed, CISG Art. 18(3).

The intent of the acting party is only relevant insofar as the other party knew about the intent or could not have been unaware what that intent was, CISG Art. 8(1). Otherwise, its conduct is to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances, CISG Art. 8(2).

In the case at hand, the [Seller] could first of all not have misjudged that the letter of the [Buyer] of 23 March 1994 contained an offer for a compromise deal, the content being the invoice of 10 February 1994; the intent of the [Buyer] was clearly worded, especially concerning the connection between redemption of the check and acceptance of the offer.

The [Seller] may not invoke comprehension difficulties, which were not even recited correctly and are hardly understandable in view of the letter of 10 June 1994, which was written in German. A party that accepts a foreign language for negotiations or accepts foreign language offers has to let the intricacies of meaning of the foreign language be held against them because, in case of doubt, the offeree is held to make objections to get sufficient certainty, to make further inquiries or use a professional translation (v. Caemmerer-Schlechtriem, aa. Art. 8, para. 4a). Should it neglect to do so, any unwanted consequences are to be borne by it pursuant to CISG Art. 8(1).

Just as the offer for compromise was to be determined by its clear wording, in view of its imperative objective interpretation, it is furthermore not in question that the offer was accepted by redemption of the check by the [Seller] without delay or any objections. This being so because such a deduction is regularly justified if looked at from the point of view of a reasonable person in the same circumstances pursuant to CISG Art. 8(2) -- in such cases where an offeror allows the offeree to take an action derogating to itself if the offeree accepts the offer, but only then, as the action is connected to the fulfillment of the contract the offeror aims at and the offeree takes the action.

On principle, it is appropriate to make the assumption that the offeree proceeds in a bona fide manner and therefore only takes the action if it accepts the conditions set by the offeror (BGH [*] NJW-RR [*] 1986, 415; BGH NJW 1990, 1655 (1656); BGH NJW 1990, 1656 (1657)).

For this acceptance to be effective it does not matter if the offeror has separately waived the need for a declaration of acceptance, because the provision of CISG Art. 18(3) - contrary to BGB 151 - is connected to the content of the preceding offer. In the face of [Buyer]'s letter of 23 March 1994, an announcement by the [Seller] was only necessary and to be expected if it did not approve of the suggested solution and therefore would return the check it had been given - as was suggested for this case - or objected through other conditions to the otherwise given interpretation of its behavior. If neither the one nor the other happened, the [Buyer], given the redemption of the check by the [Seller], had to assume that its suggestion had been approved.

This could not have been unknown to the [Seller]. Because of that, originating out of the offer there was a possibility for acceptance through behavior equivalent to acceptance without any further acknowledgement needed.

The agreement reached afterwards -- which was admissible without further ado concerning the modification of the original contracts, CISG Art. 29(1), together with the payment of DM 30,130-- made at the same time - however, did not lead to the entire payback of the purchase price, which was still fully open at that time. This is because its objective is determined according to the letter of 10 February 1994, which, in appropriate interpretation, only aimed at the adequate consideration of alleged counter demands by the [Buyer], but did not aim at the finalization of all demands out of the mutual business-relationship:

The [Buyer] initially acquiesced to an apparently not specially reviewed, actually incorrect invoice of the [Seller] only to then specify and give estimations for the reductions it asked for. Only concerning these reductions, could there have existed a further need for settlement, while the preceding compensation of the [Seller] as such was not in dispute and insofar there was no reason to seek an amicable settlement.

Consequently, there are no clues to be found in the statements made by the [Buyer] at the time concerning an attempt for further correction of invoices it received. This is in accordance with the parties not being able to submit the invoice that was argued upon as evidence in the trial, and therefore in their views not being of fundamental importance to the ascertainment of the mutual demands.

If this is taken into account, reasonable persons in the same situation as the disputing parties could associate a binding effect to the settlement agreement that was reached only insofar as it concerned possible counter demands of the [Buyer] which evidently from its point of view needed to be settled.

Contrary to this it cannot be assumed -- especially because there was no need for it -- that such persons in regard to the agreement in question furthermore would have had in mind the final determination of the [Seller]s demands - which were already taken for granted.

Rather, these demands as such are unaffected in accordance with the objectified will as it was voiced in the prevailing letters of 10 February / 23 March 23. Because of that, the imperative mutual settlement was to be based on the actual status of these demands and was to be reduced only by the discount agreed to by way of cashing in the check.

For these reasons, there was to the benefit of the [Seller] an account balance of DM 7,211.

The demand for interest by the [Seller] is justified in general by CISG Art. 78. If a party fails to pay the price in time, the other party is entitled to interest on it. The due date in accordance with CISG Arts. 58, 59 in this case had occurred before the date given in the application for substantive relief.

The rate of interest is to be determined through use of Italian law (OLG [*] Frankfurt, NJW 1994, 1013, 1014), which provides an interest rate of 10 % for the prevalent time in Art. 1284 I Codice civile (v. Caemmerer-Schlechtriem, as before, Art. 78, para. 27).

Further interest on account of delays are not to be granted to the [Seller]. The defaulting obligor is generally obligated to settle any disadvantages caused by delay, CISG Arts. 78, 74, which regularly includes costs for continued use of bank credits (v. Caemmerer-Schlechtriem, as above, Art. 74, para. 39). However, the actual occurrence of such costs between the parties is disputed and -- detrimental to the [Seller] -- not sufficiently documented.

The auxiliary rulings arise out of 92 II, 709 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] and the Defendant of Germany is referred to as [Buyer]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM].

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGH = Bundesgerichtshof [German Federal Supreme Court]; EGBGB = Einführungsgesetz zum Bürgerliches Gesetzbuch [German Code on Private International Law]; GmbH = Gessellschaft mit beschränkter Haftung [limited liability company]; NJW = Neue Juristische Wochentschrift [New Legal Gazette]; NJW-RR = Neue Juristische Wochenschrift- Rechtsprechungsreport [New Legal Gazette - Judicial Report]; OLG = Oberlandesgericht [German Appellate Court]; ZPO = Zivilprozessordnung [German Civil Procedure Code].

** Sabine Kossebau, student of law at the University of Hanover, Germany

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Pace Law School Institute of International Commercial Law - Last updated October 17, 2005
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