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CISG CASE PRESENTATION

France 18 December 1997 District Court Colmar (Romay v. Behr France) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/971218f1.html]

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

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Case identification

DATE OF DECISIONS: 19971218 (18 December 1997)

JURISDICTION: France

TRIBUNAL: Tribunal de grande instance [District Court] de Colmar

JUDGE(S): Faessel, président; Obrecht, Weisse, juges consulaires; David, greffier

CASE NUMBER/DOCKET NUMBER: 96-325

CASE NAME: Société Romay AG v. Société Behr France SARL

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Switzerland (plaintiff)

BUYER'S COUNTRY: France (defendant)

GOODS INVOLVED: Automobile parts (crankcases)


Classification of issues present

APPLICATION OF CISG: No. Court rejected the classification of the agreement as a sales contract.

APPLICABLE CISG PROVISIONS AND ISSUES

CISG provisions cited by the Court and in the pleadings of parties: Articles 3 ; 30 ; 53 [Also cited: Articles 7 ; 74 ; 79 ]

Classification of issues using UNCITRAL classification code numbers:

3A [Scope of Convention: goods to be manufactured];

30A [Obligations of the seller];

53A ; 53B [Obligation of the buyer]

Descriptors: Exemptions or impediments

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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

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=492&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (French): CISG - France website (http://Witz.jura.uni-sb.de/CISG/decisions/181297v.htm"); Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=492&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court (Tribunal de grande instance) Colmar, 18 December 1997
Romay AG v. Behr France Sàrl

Translation [*] by Charles Sant 'Elia [**]

FRENCH REPUBLIC
In the name of the French people

Held at the public hearing on 18 December 1997

PARTIES: COUNSEL. Plaintiff: Romay AG, a corporation under Swiss law, [seller], having its principal office at CH-5727 Oberkulm, through its legal representative; represented by Paulus et associés attorneys of the Strasbourg bar v. Defendant: Behr France Sàrl, [buyer], having its principal office at 5 avenue de la Gare à 68250 Rouffach, through its legal representative; represented by Me Ruhlmann, attorney of the Strasbourg bar and Me Venturelli, attorney of the Colmar bar.

NATURE OF THE SUIT: Action concerning rejection of goods. ARGUMENTS. At the public hearing of 20 November 1997. COMPOSITION OF THE COURT. At the arguments and the deliberation: Mme Faessel, Président; MM Obrecht & Weisse, Juges Consulaires. Clerk present at the arguments and the holding: Mme David. Judgment issued publicly on 18 December 1997 by: Mme Faessel, Président.

1. FACTS AND PLEADINGS

      1.1 [Seller's position]

The Swiss company [seller] has brought suit before the Court against [buyer] [of France] and requests the Court to:

-   Hold that [buyer] refuses to take delivery of 11,505 crankcases which it undertook to purchase by a contract of 26 April 1991;
Order [buyer] to pay the exchange value in French francs of the sum of [Swiss francs] Sf 3,071,962 as damages and interest as compensation for non-performance of the contract; and
Order [buyer] to pay the sum of [French francs] f 60,300 pursuant to the application of Article 700 of the New Code of Civil Procedure, as well as the entire court costs and expenses.

It is explained, in support of the claim, that on 26 April 1991, the parties reached a delivery agreement for eight years of at least 20,000 crankcases, which agreement the [buyer] breached by refusing to take delivery of the crankcases since 6 December 1993.

[Seller] asserts that the jurisdiction of the Court is determined by a forum selection clause pursuant to Article 17 of the Lugano Convention, contained in the contract of 26 April 1991.

The applicable relevant law in these legal relations arises from the Vienna Convention of 1980 on International Sales [hereinafter CISG] bearing in mind the nature of the 1991 contract between the parties. The supplementary law is Swiss law determined according to the conflict of law rules appearing in the Hague Convention of 1955.

[Seller] explains that according to the terms of the agreement, [buyer] has contracted to take on a result obligation through the purchase of 20,000 pieces and a supply obligation beyond that, according to the needs of the final purchaser: the Renault Vehicles Industries company (hereinafter RVI).

Having had to adapt its material production, [seller] demands reparation of the damage suffered by the fact of the refusal of the purchase, pursuant to the application of Article 74 CISG.[Seller] assesses his damages at a total sum of Sf 3,071,962 as lost profit.The [seller] asserts that the theory of unforeseeability invoked by [buyer], based on the new conditions imposed by RVI, may not be used against [seller].

      1.2 [Buyer's position]

[Buyer] principally seeks dismissal of the claim by challenging the legal consequences of the document of 26 April 1991. Secondarily, [buyer] seeks to be exonerated of its liability by application of the theory of unforeseeability allowed under Swiss law.

[Buyer] does not contest the jurisdictional competence of this Court, nor the application of Swiss law to the merits of the suit according to the rules of private international law relating to the law of the country where the characteristic performance was to be carried out.

First, [buyer] argues that the contract of 26 April 1991 has no bearing on a delivery of 24,000 crankcases per year but envisions a provisional figure of 20,000 units in eight years, depending expressly upon the needs of RVI.

-   The 1991 agreement is not a firm sales contract due to lack of fixing the goods and the price. It is a framework agreement defining some recommended quantities and prices subject to the actual needs of RVI.
[Buyer] further asserts that it informed the [seller] of the new price conditions imposed by RVI and the automobile market.

This contract of 26 April 1991 is not a sales contract within the meaning of the criteria of the CISG and the Swiss code of obligations, applicable to the contract, that do not allow a finding of a purchase obligation upon the [buyer].

Secondarily, [buyer] intends to challenge the claim with a theory of unforeseeability under Swiss law, explaining that the purchase conditions imposed by RVI represented to [buyer] a case of unforeseeability that unsettled the scheme of the contract and must defeat the claim. [Buyer] sought rescission of the contract on 6 December 1993, [sic]. [Buyer] maintains the lack of its liability with respect to Article 79(1) and (5) CISG, asserting that the interruption of the purchase is due to the attitude of RVI which constitutes an unforeseen impediment outside [buyer]'s control. The good faith acknowledged in international law thus demands the exemption of [buyer]'s liability.

Finally, [buyer] contests the amount of the damage sought by [seller], indicating that an expertise may be required.

1.3 [Seller's reply]

[Seller] maintains that it was not informed of the relations existing between [buyer] and RVI and that these relations cannot be asserted against [seller]. [Seller] effected some investments necessary for production since the signing of the contract in 1991.

-   The undertaking to acquire 20,000 crankcases over 8 years is a "result obligation" ["obligation de résultat"; i.e., a sale of goods]; only the annual volumes for the subsequent years were estimated.
The reference to the needs of RVI concerns only the quantities beyond those that had been contractually defined.
-   [Seller] states that [buyer] had purchased the quantities specified in the contract for the years 1991 through 1993.
The contract is to be seen as a firm sales contract subject to the CISG.

[Seller] observes that Swiss law, applicable pursuant to the Hague Convention of 1955, thus characterizes this agreement as a sales contract. Swiss law must only apply as a gap-filler.

[Buyer] undertook to purchase at least 20,000 crankcases over a period of eight years. [Buyer] rescinded the contract on 6 December 1993, at which time there remained 11,505 crankcases to purchase.

[Seller] indicates that the crankcases it sold constituted only a part of the finished product sold by [buyer] to RVI.

The CISG does not exempt a party from its liability for damages unless it is shown there was an event beyond the control of the obligor, unforeseeable and insurmountable. [Translator's note: the Court does not cite precise language of the French text version and uses its own wording in summarizing the CISG.] The new purchase conditions imposed on [buyer] by RVI do not take on such characteristics.

As to the unforeseeability under Swiss law, [seller] asserts that it does not justify the [buyer]'s refusal to take delivery of the crankcases [sic]. The disproportion which would exist between the different prices is not a case of unforeseeability.

[Seller] maintains that it has suffered damages linked to [buyer]'s refusal to purchase the goods, according to evidence produced to that effect.

      1.4 [Buyer's reply]

[Buyer] contests being bound to the purchase of 20,000 units from [seller]. [Buyer] informed the [seller] of the new requirements of RVI and the market. It maintains that the CISG is not applicable to the agreement of 26 April 1991 which does not constitute an international sale according to the criteria of the CISG.

The agreement does not impose on [buyer] an obligation to purchase and it depends expressly on the needs of RVI. [The agreement] does not meet the definition of a sale according to Swiss law. The terms of the legal document imply that the quantity of 20,000 is merely indicative and depends on RVI. There exists a contradiction between the amounts contained in the document. The agreement constitutes only a collaboration between the parties.

Additionally, [buyer] seeks to be exempted from its liability for damages by way of the unforeseeability provision contained in the CISG, according to the rule of good faith, as well as under Swiss law.

The relationship that [buyer] maintains with RVI is determinative of [buyer]'s undertaking to [seller].

The agreement constitutes nothing but a framework contract under Swiss law, of which no obligation did [buyer] breach that justifies indemnity. Additionally, [buyer] seeks to assert against the [seller] a theory of unforeseeability based on the economic impediment created by RVI.

2. COURT'S REASONING

Upon which the Court,

In light of the closure order of 26 September 1997: [Seller] demands reparation of the resulting harm to it, from the non-performance by the [buyer] of an agreement reached between the parties on 26 April 1991, according to the letter of 6 December 1993; [Buyer] opposes the claim, principally challenging the legal nature of the contract, and secondarily, opposing the theory of unforeseeability under Swiss law.

      2.1 On the jurisdictional competence

The agreement contains in its Article 8, a forum selection clause in favor of this Court.

The Lugano Convention of 16 September 1988, binding Switzerland and France, modeled on the Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, provides in its Article 17 the conditions of the form and substance applicable to clauses derogating from territorial jurisdiction.

Having considered that Article 8 of the contract satisfies in all points the conditions envisioned by Article 17 of the [Lugano] Convention and that the parties agree on the jurisdictional competence of this Court, it is proper to uphold and maintain that competence.

      2.2 On the law applicable to the contract

The parties have not determined any law applicable to the contract. The determination of the law applicable to the contract, to begin with, supposes its legal classification notably in comparison with the international Conventions likely to apply.

Considering the divergence in the parties' assessment of the legal nature of the document, it is proper to set forth its exact character. The agreement having been reached between two companies under different law thus assumes an international character by the nature of the signatories and by its object.

Preliminarily, it is proper to find the relevant Conventional law applicable to the legal relations or, in its absence, to determine the applicable law.

   2.2.1 On the applicability of the CISG

The CISG, binding on France and Switzerland, constitutes the relevant law uniformly applicable in the area of international sales. It must be verified whether the contract comes well within its relevant scope of applicability.

The CISG does not contain any express definition of a contract for the international sale of goods. The elements of a definition may be drawn from certain of CISG's Articles dedicated to the obligations of parties. Furthermore, there is room to refer to the principles set forth in Article 7 which form the principles of interpretation of the CISG.

It emerges jointly from Articles 30, 53 and 3 CISG and in a general way from the objectives of the CISG, that a contract for the international sale of goods may be defined as a contract bearing two fundamental and reciprocal obligations: an obligation to deliver on the part of the seller and an obligation to pay the price on the buyer, both parties residing in two different Contracting States.

In the present case, the agreement does not explicitly present such obligations chargeable to the parties but lays out their relations more broadly, through some foreseeable and imprecise quantities in order to immediately and in a definite way establish an obligation to purchase and an obligation to sell, chargeable to the parties with respect to the criteria provided by the Convention.

The purpose of the CISG being to govern only firm present or successive sales, there is no room to extend it further with respect to Article 7 CISG. Formally there exists no "agreement" on a determined quantity. Consequently, the CISG is not applicable.

   2.2.2 Lege fori classification

Absent relevant Conventional law, application will be made of the rule of private international law according to which the preliminary classification of a document is determined by the lege fori. In French law, by the terms of Article 12(2) of the New Code of Civil Procedure, the judge must restore to a legal document its exact designation without stopping at what the parties would have agreed to, word for word. It is proper to refer principally to the expressed will of the parties.

The legal classification thus retained will allow the conflict of law rules applicable to the contract to be governed, considering the international Conventions of a uniform nature governing the law applicable to the contract, among which are notably the Hague Convention on the determination of the law applicable to international sales contracts, and in a more general fashion, the Rome Convention on the law applicable to contractual obligations.

   2.2.3 On the exact classification of the agreement of 23 April 1991

It is proper to look for the actual will of the parties based on a reading of the contract.

On the terms employed in the agreement

The title of the document may be translated as the following: "attestation" or "confirmation concerning the common work between [buyer] and [seller]". This heading seems to suggest, through a plain reading, that the parties wanted much more than a simple sale or order between them for which they could have contented themselves with other more concise and expressive terms such as "sale" or "order". Thus, they wanted to modify the relations between buyer and seller so as to replace them with a joint undertaking.

The document, furthermore, cancels an order of 17 August 1987 without replacing it with another order of the same type. This allows one to conclude that the parties truly wanted to exceed the simple purchase/sale agreement and lay out new relations for the future by making reference to a collaboration.

The term "Zusammenarbeit" designates precisely a union and a "working together", which suggests more a collaboration than a simple sales contract without other formalities. The collaboration between the parties aims to secure beforehand each of the uncertainties in the future and to mutually reserve the exclusivity of the highly technical product.

The terms "Prognostizierte Lieferquoten" should be understood as "Prognosis relating to delivery quotas". The [buyer] thus could not place a firm order with [seller], since it was itself dependent upon the orders of the RVI company. These terms concern solely some supply estimates.

After all, the object of the agreement arises more from the exclusivity framework agreement bearing on a highly specific and technical product, rather than a simple sales contract. The particularity of the product in question is precisely at the heart of the "collaboration".

It further follows from an exegetical interpretation, that [seller] does not contract to undertake any firm obligation to give or to deliver, which are characteristics of a sales contract. [Seller] rather finds itself undertaking a guarantee of exclusivity in the production considering the technicality of the product. [sic]

Conversely, at no time is the obligation on [buyer]'s part "to purchase" provided for.

On the expressed quantities and price

The numbers regarding quantities expressed in the contract are excessively imprecise and contradictory, varying according to the years. The "prognostizierte Lieferquoten" lead back to some "prognoses" of volumes susceptible to variation.

The corresponding price is no longer uniform, and depends on quantities by definition fluctuating according to the years. (3,000 units for 1991; 4,000 for 1992; 5,00 [sic] for 1993; 6,000 for 1994 and 1995). It is impossible to determine on this basis an obligation to purchase quantified at a price determined for a specified period.

The term "mindestens" is translated as an estimate: "at least", and not an exact amount or an affirmation which allows in a definite manner for a firm obligation for the purchase of 20,000 units which would have been peremptorily formulated by the parties.

On the reference to the needs of the RVI company

The reference to the RVI company is expressly formulated by Article 2 of the agreement. [Seller] thus cannot assert lack of knowledge of the relations maintained between [buyer] and RVI which constitutes the final purchaser.

This mention, known by the two parties, is determinative because it economically conditions the market sales of the [seller] upon the target product. Precisely the "collaboration" of the parties since a certain time cannot but support [seller]'s knowledge of the final purchaser. The mention itself of the client "BEHR/Renault-véhicule" is set forth in the chronology presented by the [seller].

The RVI company which is a third party to the contract, remains no less of an interested third party, and whose intervention the parties have expressly foreseen by the phrase: "gemäß Bedarf von RVI" or "according to the needs of RVI".

The terms "according to the needs of RVI" within the phrase "- at least 20,000 units over eight years, according to the needs of RVI" indicates and exception to the formulated quantity which can be analyzed in law as a condition.

Precisely the legal obligation whose nature is at issue between the parties regarding the 20,000 units, finds itself thus conditioned by the posture of a third party which can not be considered as a pénitus extranei, but rather as an interested third party to the contract.

The obligation subject to a condition in the present case can not, by its very nature, be analyzed as a result obligation ["obligation de résultat"] or more generally as an unconditional obligation to purchase on the part of the buyer.

The condition, in that it alters the performance of the obligation to which it relates, limits its scope and legal effectiveness. It cannot be firmly established by the reading of that one sentence, placed within the general context of the agreement, that [buyer] is incontestably bound by an obligation to purchase.

In conclusion and in the light of the preceding considerations, it is proper to reject the classification of the agreement as a sales contract. The agreement envisioned within the general framework of the relations between the parties may be analyzed as a framework agreement for production and distribution, or more exactly as a "collaboration" based on a mutual exclusivity. [Buyer] contracts to undertake the obligation to forward to [seller] the orders received from RVI and [seller] undertakes to supply [buyer] the parts destined for RVI.

Consequently, the Hague Convention of 15 June 1955 on the law applicable to international sales of goods must be cast aside in favor of the Rome Convention of 19 June 1980, applicable in France since 1 April 1991 and unifying the rule of conflicts of law in matters relating to contracts.

Article 4 of the Rome Convention provides, in the absence of a choice of law by the parties, that:

"If the parties have not made an explicit choice of applicable law, the contract is governed by the law of the country with which it is most closely connected ... it is presumed that the contract presents the closest ties to the country where the party that must provide the characteristic performance has, at the moment of contract formation, its usual residence."

It emerges from the analysis of the agreement of 23 April that the characteristic performance may consist of the production and storage of the units produced by [seller] at [buyer]'s disposal. Furthermore, the contract between the parties had been formed in the German language.

Consequently the legal relationship must be objectively located in Switzerland, at the [seller]'s domicile. Thus Swiss law shall be applied to the agreement of 23 April 1991.

      2.3 On the claim of damages for breach of contract

The claim is based on Article 2 of the Swiss Civil Code which imposes the general duty of good faith in the performance of contracts.

[Seller] does not demonstrate exactly which obligation [buyer] has not performed with good faith. It emerges from the contract that [buyer] did not benefit from a guarantee of exclusivity and not one of output, thus it implicitly but necessarily put up with the contingencies resulting from the final needs of the RVI company.

In the absence of a clear obligation to purchase on [buyer]'s part, there can be no wrongful nonperformance by refraining from purchasing. It has been clarified that the phrase "at least 20,000 units according to the needs of RVI" was unraveled, wholly against [buyer]. Thus, there can be no breach by [buyer] of any obligation to purchase whatsoever in the absence of such a stipulation.

Furthermore, it is not at all shown that [buyer] had broken the exclusive supplier agreement thus breaching the economic framework of the contract. The collaboration contract came to an end through the lack of orders from RVI.

The framework agreement, governing only the methods of the collaboration, requires some purchase/sale contracts for its application. Thus, the nonperformance upon which the [seller] relies could not be founded on the basis of these enabling contracts and the framework agreement.

[Buyer] can not be held liable on the basis of the 1991 framework agreement except in the case of "a clear abuse of a right" ["abus manifeste d'un droit"] or a case of bad faith ["déloyauté dans la conclusion"]. In this respect, [seller] does not produce proof of a not serious or whimsical nature of the collaboration carried out by [buyer] pursuant to Article 2 of the Swiss Civil Code.

It is not demonstrated which obligation would have been breached by the fact of the cancellation which occurred on 6 December 1993. Thus, in the absence of a showing of contractual non-performance, it is proper to reject the [seller]'s claim.

On article 700 of the N.C.P.C. and fees and costs

Equity demands allocating to [buyer], who had to bear costs, a sum of f 10,000 by application of Article 700 of the New Code of Civil Procedure.

[Seller] who began the suit and fails in its claim, will bear the entirety of the fees and costs.

3. COURT'S RULING

For these reasons,

The Court, sitting in public and in the first instance:

-   Holds the [seller]'s claim admissible;
Dismisses the claim on the merits;
-   Orders [seller] to pay to the [buyer] a sum of f 10,000 by application of Article 700 of the New Code of Civil Procedure;
Orders [seller] to pay the entire fees and court costs.

The draft of the present decision has been signed by Madame President and the Court Clerk.

The signatures follow.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Romay AG, Plaintiff of Switzerland is referred to as [seller]; Behr France Sàrl, Defendant of France is referred to as [buyer]. Amounts in French currency (French francs) are indicated by [f]; amounts in the currency of Switzerland (Swiss francs) are indicated by [Sf].

** Charles Sant 'Elia has a B.A. in Political Science and Italian Literature from New York University and studied Political Science at the Universitá degli Studi di Firenze. He received his J.D. from Pace University School of Law and is admitted to the Bar of the States of New York and Connecticut. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia.

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