Germany 28 February 1996 District Court Oldenburg (Egg case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/960228g1.html]
Primary source(s) for case presentation: Case text
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 12 O 2943/94
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Germany [plaintiff]
BUYER'S COUNTRY: Netherlands [defendant]
GOODS INVOLVED: Eggs
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue: Articles
Classification of issues using UNCITRAL classification code numbers:
8B [Interpretation of party's statements or other conduct (interpretation based on objective standards): understanding of reasonable person of same kind and in same circumstances as other party]; 9C [Pratices established by the parties]; 74A [General rules for measuring damages: loss suffered as consequence of breach]; 78A [Interest on buyer's damages: rate of interest (statutory rate of country whose law applicable by virtue of the rules of private international law)]
8B [Interpretation of party's statements or other conduct (interpretation based on objective standards): understanding of reasonable person of same kind and in same circumstances as other party];
9C [Pratices established by the parties];
74A [General rules for measuring damages: loss suffered as consequence of breach];
78A [Interest on buyer's damages: rate of interest (statutory rate of country whose law applicable by virtue of the rules of private international law)]
Go to Case Table of Contents
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=256&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/189.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=256&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: Honnold, Uniform Law for International Sales (1999) 120 [Art. 8(2)] [cited as 28 February 1994]; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 339 (the "court found that a contract for three 'truck loads' of eggs was sufficiently definite, based on Article 8(2)'s interpretation of intent, because a reasonable buyer would expect a quantity equivalent to the full load capacity of the trucks"); 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];  Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 para. 16 Art. 14 paras. 4, 16; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 100, 117Go to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
28 February 1996 [12 O 2943/94]
Translation [*] by Veit Konrad [**]
FACTS OF THE CASE
Plaintiff [Seller] claims for payment of the contract price for deliveries of carriages of eggs. The existence of the contract between the parties for the sale of eggs -- and all rights and obligations arising from this contract -- is not questioned. The dispute is solely about whether Defendant [Buyer] was entitled to set-off the obligation to pay the purchase price against damages [Buyer] claimed.
The parties had entered into business relations with one another. [Seller] of Germany delivered eggs to the Dutch [Buyer]. This is established by unambiguous evidence: receipts, delivery notes, and invoices (see attachments of [Buyer]'s reply of 1 June 1995: A 1 - A 13, Th. 74 - 86). At the beginning of March, [Seller] sold to the [Buyer] three carriages of Class 2 eggs (Sekundaware). The goods were to be taken over by Firm Z. in M ___. This had been confirmed by [Seller] in a written note of 4 March 1993 (Bl. 37 of the attachment).
The first carriage of eggs that [Seller] delivered consisted of twenty-six pallets, each of which contained only 8,640 eggs - and not 10,800 eggs as expected by [Buyer]. In total, this came to a difference of 56,160 less eggs than [Buyer] expected. The second carriage contained merely twenty such pallets and only fourteen pallets were delivered in the third carriage. [Seller] insists that these deliveries conformed to the sales contract and that this contract only stipulated delivery of the remaining stock of Class 2 eggs on [Seller]'s farm at a certain time; that the contract did not mention a fixed quantity of eggs.
[Seller] claims payment of the price: DM (Deutsche Mark) 11,066.40 plus 5 % interest since 22 August 1994.
[Buyer] asks the Court to dismiss the [Seller]'s claim.
According to [Buyer], the contract required delivery of three full carriages of twenty-six pallets, 10,800 eggs each -- as this had been the common practice in the business relations between the parties. [Buyer] alleges that, on [Buyer]'s complaint, [Seller] promised a supplementary delivery of the difference of the missing eggs. [Buyer] claims DM 11,066.40 as damages suffered from replacement transactions that [Buyer] had to undertake to avoid a shortage in supply as a consequence of [Seller]'s incomplete deliveries. A bill of 19 April 1993 provided the basis for this calculation.
The Court summoned Witness C and Witness S. (see protocols of 8 November 1995 and 10 January 1996 (Bl. 125 - 127, 133, 134)) Moreover, the Court considered the written testimony of Witness Ma. (Bl. 120, 121).
[Seller]'s claim is justified in part. [Buyer] is, however, entitled to a set-off to a limited extent. [Seller]'s unquestioned contractual right to payment of the purchase price is established under Art. 53 CISG. The damages [Buyer] claimed are, in turn, based on Art. 45 and Art. 74 et seq. CISG.
The transactions between the parties are governed by the CISG.
Contrary to [Seller]'s submissions, the right to declare a set-off has not been contractually excluded by any applicable standard terms. In fact, [Seller] did not even submit -- nor did [Seller] sustain -- that any standard terms had been bindingly incorporated into the contract. Under German law, standard terms -- even between parties that qualify under the Commercial Code -- must be adopted by mutual consent. As the provisions of Art. 14 to Art 19 CISG indicate, even stricter criteria apply for the incorporation of standard terms within the scope of the Convention. [Seller]'s submissions do not in any way sustain that standard terms had been bindingly adopted.
[Buyer] is entitled to damages under Art. 45(1)(b) CISG.
[Seller]'s deliveries did not comply with the contract. Under the contract, [Seller] had agreed to deliver three full carriages each consisting of twenty-six pallets -- and not just the remainder of his stock, not quantified in numbers. However, it could not be substantiated that the contract required delivery of pallets of 10,800 eggs each. To be considered true within legal proceedings, facts must be proven beyond reasonable doubt, i.e., the Court must be able to assume these facts with a degree of certainty that overweighs any doubt -- even if the latter cannot be ruled out entirely (see Judgment of the German Federal Supreme Court (Bundesgerichtshof; BGH) in NJW-RR 94, pages 567, 568). These criteria establish a degree of truth, which -- albeit rebuttable in theory -- is achievable and useful in judicial practice (see Judgment of the German Federal Court, ibidem).
[Buyer]'s version of the contents of the agreement is supported by the fact that its other orders always expressly determined the pallets to contain 10,800 eggs - or sometimes even 12,960 eggs. Hence, [Buyer] -- as testified by Witness Ma. and its Managing Director -- was expecting the delivery to be of such kind. This, however, does not prove that the delivery of such pallets had been contractually agreed in fact. The mere subjective impression of a party does not affect the content of a contract. Parallel to the provisions of the German Civil Code (Bürgerliches Gesetzbuch), Art. 14 to Art. 19 CISG presume that statements are interpreted in the way they can reasonably be understood by the addressee (Empfängerhorizont). As the relevant statements, made in March 1993, have neither been submitted nor sustained, the Court cannot presume that the contract has actually been agreed to in the form that [Buyer] -- who bears the burden of proof -- expected. Witness C. in fact plausibly denied that this had been the case. Witness S. testified that for most orders the delivery of pallets of 10,800 eggs had been expressly agreed upon. Yet, the witness himself admitted that in some cases the parties deviated from this practice. The witness was not personally involved in the negotiations for the order at issue; he was not even present at the time. The written confirmation note that was submitted, on the other hand, is silent on the question of how many eggs are to be contained in each pallet. The Court concludes that the contract did not determine that pallets of exactly 10,800 eggs had to be delivered.
On the other hand, the Court is convinced that the order did not merely concern the delivery of any -- non-quantified -- remaining stock from [Seller]'s farm. This is supported by the fact that [Buyer] planned to take over the delivery in Eastern Germany and then carry it all the way back to its place in the Netherlands. No sensible person would have undertaken this for only some non-quantified leftovers. The written confirmation note, mentioning "three carriages of Class 2 eggs (Sekundarware)", as well as the testimony of Witness S. support this version of the facts.
It could not be established beyond doubt that [Seller] bindingly promised to supplement the missing difference of 280,800 eggs. Witness C submitted that such amount could not possibly have been delivered within the last carriage. Witness Ma. only through hearsay became aware that a supplementary delivery might had been intended. Being aware of a planned supplementary delivery, however, logically conflicts with her being in charge of estimating the losses from undertaking substitute transactions. Witness S., by contrast, was not at all aware of negotiations for a supplementary delivery. He only knew about the replacement transactions. Due to these deviating testimonies, it can neither be proved beyond doubt that originally a total amount of 840,400 eggs was to be delivered, nor that [Seller] had promised to make up the missing difference, or, alternatively, had offered to pay damages for all losses suffered from necessary replacements.
As far it as could be proved that [Seller]'s deliveries failed to comply with the contract, [Seller] must be held liable. The first carriage contained the proper amount of twenty-six pallets. The subsequently delivered carriages did not: 51.840 eggs were missing in the second delivery, 103,680 eggs were missing in the third carriage. Based on these facts the Court calculates as follows:
|51,840 eggs equivalent to 3370 kg||*||DM 0.77||=||DM 2,594.90|
|103,680 eggs equivalent to 6740 kg||*||DM 0.45||=||DM 3,033.00|
The Court believes that as a consequence of the deficient deliveries, [Buyer] had to avoid shortages of supply through substitute transactions. The testimony of [Buyer]'s managing director established this beyond doubt. Substantiating the suffered losses, other witnesses submitted that replacements had not been easily available.
As concerns interest, [Seller]'s claim relies on Art. 78 CISG. The interest rate is determined by national law: Focusing on the contract's specific performance -- i.e., [Seller]'s duty to deliver eggs -- § 28 of the German Civil Code provisions on Private International law (Einführungsgesetz zum Bürgerlichen Gesetzbuch; EGBGB) refers to German law. According to § 352 and § 353 of the German Commercial Code (Handelsgesetzbuch; HGB) an interest rate of 5 % applies.
* All translations should be verified by cross-checking against the original text. For purposes of this presentation, the Plaintiff of Germany is referred to as [Seller]; the Dutch Defendant is referred to as [Buyer].
** Veit Konrad has studied law at Humboldt University, Berlin since 1999. During 2001-2002 he spent a year at Queen Mary College, University of London, as an Erasmus student.Go to Case Table of Contents