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CISG CASE PRESENTATION

Austria 18 June 1997 Supreme Court (Shoes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/970618a3.html]

Primary source(s) of information for case presentation: Case text


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Case identification

DATE OF DECISION: 19970618 (18 June 1997)

JURISDICTION: Austria

TRIBUNAL: Oberster Gerichtshof [Supreme Court]

JUDGE(S): Dr. Hoffmann (presiding judge), Dr. Angst, Dr. Graf, Dr. Pimmer, Dr. Zechner

CASE NUMBER/DOCKET NUMBER: 3 Ob 512/96

CASE NAME: Austrian case citations do not generally identify parties to proceedings

CASE HISTORY: 1st instance LG Wels 8 November 1994; 2d instance OLG Linz 5 October 1995 [reversed and remanded]; remand proceedings LG Wels 18 June 1998 [rejected seller's claim as per this court's original judgment]

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Austria (defendant)

GOODS INVOLVED: Shoes


Case abstract

AUSTRIA: Supreme Court 18 June 1997

Case law on UNCITRAL texts (CLOUT) abstract no. 239

Reproduced with permission from UNCITRAL

An Austrian buyer, defendant, ordered shoes from a German company after the presentation of a model of a pair of shoes by Mr. J, an employee of the German company. The buyer's order was sent to the German company, which transmitted it to an Italian seller, plaintiff.

Referring to the buyer's order, employees of the seller requested and received the approval of the buyer for the colour of the shoes. After delivery of the shoes, the seller sent the invoice to the buyer, who, at the request of Mr. J, transmitted a cheque to the German company in order to pay the seller. However, the seller never received payment either from the buyer or Mr. J. The seller, therefore, sued the buyer for the purchase price of the shoes and interest.

The Supreme Court, in holding that the CISG was applicable to the case under its article 1(1)(a), found that it was not clear whether the buyer had concluded the contract with the German company or with the seller. Consequently, it had to be determined whether Mr. J was an independent mercantile agent who could accept an order from the buyer on the seller's behalf or whether Mr. J had merely transmitted the order (contract) to the seller. No contract could be deemed to have been concluded if Mr. J was not an independent mercantile agent or if the buyer was not aware that the order was sent to the seller. In addition, from the communications between the employees of the seller and of the buyer alone, no order from the buyer to the seller and therefore no contract between them could be construed inasmuch as the buyer's employees could not assume the seller's behaviour to be an acceptance (articles 14(1) and 18(1) CISG). Accordingly, the Supreme Court remanded the case to the court of first instance for a determination of the independent mercantile agent issue.

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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 14(1) ; 18(1)

Classification of issues using UNCITRAL classification code numbers:

14A [Criteria for an offer: basic criterion -- intention to be bound in case of acceptance];

18A [Criteria for acceptance: statement of acceptance or other conduct indicating acceptance]

Descriptors: Offers ; Acceptance of offer

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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 [cited as 20 June 1997] <http://www.unilex.info/case.cfm?pid=1&do=case&id=284&step=Abstract> [1999] Transportrecht, Beilage "Internationales Handelsrecht" (TranspR-IHR) 25

German: [1997] Zeitschrift für Rechtsvergleichung, Internationales Privatrecht und Europarecht (ZfRV) 38, 202 No. 69; [1998] ecolex - Fachzeitschrift für Wirtschaftsrecht 472

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-Austria website <http://www.cisg.at/3_51296.htm>; Juristische Blätter (1998) 255-256; [1998] [österreichisches] Recht der Wirtschaft [örRdW] 12; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=284&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-225 [226 n.791 (scope of CISG: agency issues)][cited as 20 June 1997]; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at n.193; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 para. 14

German: Karollus, Juristische Blätter (1998) 256-258

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Case text (English translation)

Queen Mary Case Translation Programme

Austrian Supreme Court (Oberster Gerichtshof )

18 June 1997 [3 Ob 512/96]

Translation [*] by Tobias Koppitz [**]

Edited by Jan Henning Berg [***]

COURT COMPOSITION; PARTIES; COUNSEL

The Supreme Court as Court of Appeal has, through the vice-president of the Supreme Court Dr. Hofmann, as chairman, as well as through the presiding judge of the Supreme Court, Dr. Angst and the court counsellors of the Supreme Court Dr. Graf, Dr. Pimmer and Dr. Zechner as further judges in the legal matter of [Seller] C [...], [...] represented by Dr. Robert Csokay, lawyer in Vienna, against defendants 1.) H [...], limited partnership with a limited liability company as general partner, and 2.) M [...] limited liability company, both [...], represented by Dr. Alois Nussbaumer and Dr. Stefan Hoffmann; lawyers in Vöcklabrück, for the amount of ITú [Italian Lira] 50,327,852.05 (amount in dispute = sA [Austrian Schillings] 380,126.26).

HISTORY. Following the application for an appeal on points of law by the defendants against the judgment of the Court of Second Instance (Higher Regional Court of Linz) dated 5 October 1995, GZ 11 R 24/95-27, through which, following the appeal of [Seller], the judgment of the Court of First Instance (Regional Court of Wels) dated 8 November 1994, GZ 2 Cg 293/93m-21, was changed, in a hearing in camera reached the

DECISION

The appeal on points of law is admissible and justified.

The judgments of the lower instances are set aside. The case is remanded to the Court of First Instance to give a new decision after supplementary proceedings.

The costs of the appellate procedure are further costs of the proceedings.

FACTUAL BACKGROUND

Plaintiff [Seller] is a limited liability company with its principal office in Italy and deals in the manufacture, sale and export of shoes. In October 1992, [Seller] delivered 3,340 pairs of shoes to [Buyer], who is involved in the shoe-trade as well, and whose personally liable partner is the [Second Defendant]. [Seller] charged ITú 43,737,300 for the shoes. The [Buyer] did not pay this amount to [Seller]. Instead, after the deduction of complaint-discount, discount and costs for labelling, [Buyer] paid the amount of ITú 42,774,615 to a company with its principal office in the Federal Republic of Germany.

[Seller] seeks from the Defendants the amount of ITú 43,737,300 which had been invoiced, as well as capitalized interest for the period of 1 November 1992 to 2 August 1993 in the amount of ITú 6,590,552.05, adding up to ITú 50,327,852.05.

The Defendants objected that there exists no contractual relationship between the parties to the dispute; [Seller] therefore lacks competence in respect of the claim. On 4 March 1992, [Buyer] ordered shoes from the German company and then paid that company the amount of ITú 42,774,615 after deductions that conformed with the contract.

[Seller] replied that it had -- in the course of a longer lasting business relationship -- repeatedly delivered shoes to [Buyer] through the procurement of an independent mercantile agent in the Federal Republic of Germany, who was instructed by [Seller]. During the course of that relationship, [Buyer] had always paid the price without complaints. The mercantile agent was not entitled to the encashment, a fact that [Buyer] was aware of. Through the procurement of the mercantile agent, [Seller] received the order in dispute from [Buyer], performed and invoiced it. The mercantile agent did not pass on the collection-only cheque he received from [Buyer] to [Seller].

JUDGMENT IN FIRST INSTANCE

The Court of First Instance rejected [Seller]'s claim. Substantially, it held the following:

A customer of [Buyer] ordered the shoes that are subject to this dispute from company T [...]-Sport, through two separate orders in writing, each dated 4 March 1992. Prior to this order there had been a presentation of a model of a pair of shoes by Gerhard J [...], who acted solely for company T [...]-Sport and who did not mention anything in the sense that he was offering shoes in the name of [Seller] or that the latter ordered shoes that were manufactured by [Seller]. The customer of [Buyer] was merely aware that the shoes that were offered came from Italian production on the grounds that the price was indicated in Lira. He knew [Seller] through his knowledge of the trade and because there had been prior business contacts between the parties to the dispute.

The order forms which [Buyer]'s customer used were of such kind that copies of any notes are made. The first copy remains with [Buyer]; the other two copies are sent to the consignee, who is supposed to sign one of the copies and send it back as a confirmation of the order. In the case at hand, the orders were given to company T [...]-Sport, which forwarded them to [Seller]. Whether [Buyer] ever received a signed copy of the order -- either from company T [...]-Sport or from [Seller] -- could not be established.

[Seller] requested from [Buyer] in a fax dated 4 June 1992 a clarification regarding the required color of the shoes, under reference to the orders filed by [Buyer]. An employee who was then working in the purchasing department of [Buyer] gave the required clarification and requested simultaneously the transmission of a confirmation of the orders, for such a document had not been present until then. She did not realize that [Seller] was not mentioned in the orders as the consignee but company T [...]-Sport. The [Seller] again requested from [Buyer] in a fax dated 23 July 1992 clarification that the sample of the ordered model of the shoe sent two days earlier was alright, again under reference to the two orders. A competent official of the purchasing department of [Buyer] gave the confirmation after she checked with the orders which shoes had been ordered.

On 14 or 15 October 1992, the ordered shoes were delivered to [Buyer], where they were associated with the orders made to company T [...]-Sport. The latter received the invoice of [Seller] but it was temporarily put aside, because not [Seller], but company T [...]-Sport was mentioned in the written orders as the consignee. Shortly afterwards, Gerhard J [...] contacted an employee of the accounting department of [Buyer], who was responsible for the payment of invoices. He informed her that he had [Seller] produce shoes for him and that their invoice belonged to the delivery of goods of company T [...]-Sports. He requested her to send him a cheque in the amount of the invoice. The employee of [Buyer] complied with this request, in the course of which she filed a collection-only cheque on which she mentioned the invoice of [Seller] as the use of the cheque. Gerhard J [...], who was working as an independent mercantile agent for [Seller] until 1992 and also for other Italian manufacturers of shoes, held back the collection-only cheque sent to him, because of a dispute with [Seller] regarding his claims for commission.

In legal terms, the Court of First Instance was of the opinion that the conclusion of a contract of sale was subject to the United Nations Convention on Contracts for the International Sale of Goods (CISG) BGBl [*] 1988/96. Since Gerhard J [...] offered the shoes to [Buyer] in his own name or in the name of his company T [...]-Sport and [Buyer] accepted this offer through a written order to company T [...]-Sport, the contract of sale was concluded between those two companies and not between the parties to this dispute. Therefore, [Seller] could not demand the purchase price directly from [Buyer]. Instead, it had to refer to Gerhard J [...] as its contractual partner, especially as he at least did not act as a direct, but as an indirect representative at the best.

JUDGMENT IN SECOND INSTANCE

The Court of Second Instance, following the appeal of [Seller], held that the Defendants were obliged to pay the disputed amount and pronounced that appeal on points of law was permissible. Concerning the legal judgment of the case it agreed with the Court of First Instance that the CISG was applicable to the contract of sale in dispute. An offer in the sense of Article 14 CISG was not already portrayed in the presentation of the model of a pair of shoes through Gerhard J [...], but was only constituted in the written order by the customer of [Buyer]. According to the finding of facts of the Court of First Instance, this offer was not explicitly accepted, because it could not be established whether a signed confirmation of the order was ever sent to [Buyer]. Subsequently, however, [Seller] acted in a way that has to be judged as an acceptance of the offer of [Buyer] through "other conduct" in the sense of Article 18(1) CISG. From the established behavior of the parties to the dispute, one could only come to the conclusion that [Seller] accepted the written offer for the delivery of shoes made by [Buyer] to company T [...]-Sport after the offer had been transmitted from company T [...]-Sport to [Seller]. However, if the contract of sale had been concluded between the parties to this dispute, [Buyer] would have had to pay the purchase price to [Seller]. By sending the collection-only cheque to Gerhard J [...] it did not comply with its obligation to pay, which is why the defendants are still obliged to pay the purchase price to [Seller] in accordance with Article 53 CISG.

REASONING OF THE FEDERAL SUPREME COURT OF AUSTRIA

The application for an appeal on points of law that the defendants raised against the judgment of the court of appeal on the grounds of incorrect juridical judgment is justified.

The lower instances correctly held that the substantial question for the success of the claim, whether the parties to the dispute concluded a contract of sale, has to be primarily solved under application of the CISG, because the parties to the dispute have their places of business in different States and those States are Contracting States (cf. Article 1(1) CISG).

Among certain other prerequisites, according to Article 14(1) CISG a proposal for concluding a contract addressed to one or more specific persons constitutes an offer. According to Article 18(1) CISG, a statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. From those provisions, but also from general contractual considerations, it is clear, that an offer can only be accepted by the addressee, i.e., the person the offer is addressed to.

It is therefore decisive who had been the addressee of the offer made by [Buyer]. In solving this question, it is of significance that Gerhard J [...] was acting as an independent mercantile agent. This activity, according to Article 84(1) dHGH, which is decisive according to Article 36 IPRG [*], consists in transmitting deals for other contractors or concluding them on their behalf (similar to the here still applicable Article 1(1) HVG 1921 and now Article 1(1) HVG 1993). The conclusion of a legal transaction in one's own name does not, however, belong to the activity of a mercantile agent.

However, if the activity of an independent mercantile agent only comprises the transmission and the conclusion of legal transactions in relation to a third party, it follows that the addressee of a transmitted offer cannot be the mercantile agent himself, since the acceptance of the offer does not fall within his scope of duties. Moreover, the person making the offer must rely on the fact that the mercantile agent will transmit the offer to a third party, which is why this third party must be regarded as the addressee of the offer.

In the case at hand, the question is whether [Buyer] transmitted its offer to an independent mercantile agent and if it was aware of that, because in that case it must not have regarded this mercantile agent as partner to the contract for the sale of shoes. Instead, it must have relied on the fact that the contract was concluded with exactly that contractor to which the offer was transmitted. In the case at hand, it was obvious for [Buyer] that this was [Seller].

Should the offer of [Buyer], however, not have been transmitted to an independent mercantile agent or if it were not aware of that, no contract would have been concluded with [Seller]. Contrary to the opinion of the Court of Second Instance, [Seller] could then not through its behavior accept the offer of [Buyer], because [Buyer] could have concluded that it addressed its offer exclusively to company T [...]-Sport and that [Seller] therefore was not the addressee of this offer.

Reference could then only be made to the fact that [Seller] itself, through its behavior established by the Court of First Instance, made an offer to [Buyer], which was accepted through the attributable behavior of the employees of [Buyer]. However, this has to be denied already on the ground that, according to Article 14(1) CISG, an offer is only effective if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance, whereby a proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provisions for determining the quantity and the price. Those prerequisites were not fulfilled, however, by the behavior established by the Court of First Instance and attributed to [Seller]. But even if one were to assume that through the declarations made for [Seller], reference was made to the offer of [Buyer] and that the content of this offer had therefore indirectly become the content of the proposal of [Seller], this would not change anything, since this was not recognizable for the employees of [Buyer]. Moreover, they could assume that the declarations made for [Seller] referred to the contract that was concluded subject to the offer of [Buyer] to company T [...]-Sport and they could therefore not easily assume that [Seller] itself wanted to make an offer for the conclusion of a (new) contract. Lacking an offer from [Seller], it does not -- contrary to the opinion of the Court of Second Instance -- have to be determined whether the behavior of the persons acting for [Buyer] could, under the circumstances, be construed as a purported acceptance to an offer.

In the further course of proceedings, the Court of First Instance will therefore have to find whether under company "T [...]" the activity of an independent mercantile agent was performed and whether this was known to [Buyer]. In this case, the request for action is justified with respect to the aforementioned, otherwise the request would have to be rejected, because [Seller] had not complied with its obligation to present evidence that the contract of sale, which it takes as the basis for its claim, was concluded with [Buyer].

The remark regarding the costs of the appellate procedure rests on Article 52(1) ZPO [*].


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff is referred to as [Seller] and the First Defendant is referred to as [Buyer]. Currency amounts in Italian Lira are indicated as [ITú]. Translator's note on other abbreviations: BGBl = Bundesgesetzblatt [Federal Official Journal]; IPRG = Gesetz über das Internationale Privatrecht [Austrian Code on Private International Law]; ZPO = Zivilprozessordnung [Austrian Civil Procedure Code].

** Tobias Koppitz is a student of law at Humboldt University Berlin. He won the Frédéric Eisemann Award for third place in the 8th Willem C. Vis International Commercial Arbitration Moot 2000/2001. He was coach of the team of Humboldt University Berlin at the 9th Willem C. Vis International Commercial Arbitration Moot 2001/2002. Tobias Koppitz is a member of the Moot Alumni Association (MAA).

*** Jan Henning Berg is a law student at the University of Osnabrück, Germany, who participated in the 13th Willem C. Vis Moot with the Osnabrück team. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis and the 4th Willem Vis (East) Moot.

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