Germany 29 July 1998 District Court Erfurt (Shoe soles case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/980729g1.html]
DATE OF DECISIONS:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: 3 HKO 43/98
CASE NAME:
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Italy (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Shoe soles
Case abstract
GERMANY: Landgericht Erfurt 29 July 1998
Case law on UNCITRAL texts (CLOUT) abstract no. 344
Reproduced with permission from UNCITRAL
An Italian seller, the plaintiff, delivered soles to a German buyer, the defendant, for the production of
sport shoes. The buyer objected to the quality of some soles by letter and refused to pay the full purchase
price. The seller sued buyer for the outstanding amount. The buyer declared set-off with damages and
alleged that it had to commission a third company to remedy the defects in the soles.
The court found that the seller's claim was justified under Article 62 CISG. The buyer ordered the soles
and received them.
The court held that the buyer was not entitled to claim damages under Articles 74 et seq. CISG, Articles
38 et seq. CISG and Articles 45 et seq. CISG. Both letters of the buyer did not meet the requirement of
Article 39 CISG as regards specification of the defect's nature. The notice should have allowed the seller
to assess the lack of conformity and to take all necessary steps to remedy it. Article 39 CISG demands that
the buyer give notice about the essential results of the examination of the goods. As the buyer in this case
failed to give such notice, it lost its right to rely on a lack of conformity pursuant to Article 39(2) CISG.
For the same reasons the buyer was not entitled to recoup its expenses for remedying the defects (Articles
39 and 45 et seq.)
The court granted interest under Article 78 CISG.
APPLICATION OF CISG: Yes [Article 1(1)(a)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Classification of issues using UNCITRAL classification code
numbers:
39B [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable
time specifying nature of non-conformity (comments on standards of specificity)]
Descriptors:
CITATIONS TO OTHER ABSTRACTS OF DECISION English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=449&step=Abstract> CITATIONS TO TEXT OF DECISION Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/561.htm; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=449&step=FullText> Translation (English): Text presented below CITATIONS TO COMMENTS ON DECISION English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 369; CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (this case and related cases cited in addendum to opinion); [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 89, 91; 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]
Classification of issues present
Editorial remarks
Citations to other abstracts, texts and
commentaries
Queen Mary Case Translation Programme
Translation [*] by Ruth M. Janal [**]
Translation edited by Camilla Baasch Andersen [***]
FACTS OF THE CASE
[Seller] demands payment of the purchase price in the amount of 212,161.70 DM
[Deutsche Mark]. The [buyer] ordered from the [seller] (a manufacturer of shoe soles
and rubber items with place of business in Italy) 100,000 pairs of article no. 2449
Walking Soles at a price of DM 5.60 per pair and 600 pairs of the article T 1075 Halle
Ambra at a price of DM 3.10 per pair. The [buyer] used article 2449 Walking Soles for
the manufacture of sports shoes, which [buyer] sold to the German Army. The [seller]
delivered to the buyer 50,000 pairs of article no. 2449 and 600 pairs of article T 1075
goods.
The [seller] invoiced the [buyer]:
Following these invoices the [buyer] paid to the [seller] an amount of DM 61,600.00
on 21 May 1997. [Buyer] paid the further amount of DM 49,218.14 and DM 38,850.00,
which the [seller] credited towards its invoice no. 862 of 18 November 1997 (the
invoice being in the amount of DM 88,863.60).
With its letter of 17 September 1997, the [buyer] informed the [seller]:
"We hold for you the following soles, which could not be processed due to lack
of quality:
Size [...] The [buyer] further informed the [seller]'s commercial agent, witness S., by letter of 23
September 1997:
"Enclosed please find 15 pairs of soles with various deficiencies in quality."
The [seller] demands payment of the purchase price in the amount of DM 212,161.70.
[Seller] submits that the parties agreed that payment was to be made forty-five days after
the date of the respective invoice. The parties further stipulated the conditions
contained in the record of their negotiations of 22 March 1997.
The [seller] requests the Court to order the [buyer] to pay it DM 212,161.70 with
14.5% interest on:
- DM 85,848.00 for the period 14 April 1997 to 6 May 1997 The [buyer] requests the Court to dismiss the claim. [Buyer] submits that its manager
agreed with the [seller]'s commercial agent, witness S., that payment of the purchase
price was to be due only after the [buyer] had delivered its goods to the Army
Procurement Office. The parties furthermore agreed that the period for notices of lack
of conformity would begin after the presentation of the manufactured walking shoes at
the German Services. In addition, the [buyer] had been unable to process 2,481 pairs
of soles due to their inferior quality. The Army Authorities had returned 2,700 pairs of
shoes due to defective gluing of the knob-sole with the soft-step-sole. As a result, the
[buyer] examined and rectified the shoes that were in production. [Buyer] commissioned a
third party with the remedy of the soles, and was charged an amount of DM 13,020.00
(cf. invoice of 30 June 1997). [Buyer] submits that the [seller] accepted these costs.
The [buyer] further suffered a loss of profit in the amount of DM 102,465.00 (DM
37.95 a pair) for the shoes the Army had returned.
The Court has gathered evidence in the form of witness testimony ... and ... refers to Court protocol BL.95 ff.d.A of 24 June 1998. For detailed aspects of the facts and the
disputed items, the Court refers to the memoranda exchanged between the parties as
well as the above mentioned protocol.
REASONING OF THE COURT
The [seller]'s claim is both admissible and justified. The [seller] is entitled to payment
of the purchase price in the amount of DM 212,161,70 in accordance with Article 62
of the United Nations Convention on Contracts for the International Sale of Goods,
which applies to the contract as both Germany and Italy are Contracting States.
1. The [seller] is entitled to payment of the purchase price in the desired amount, because
the [buyer] undisputedly ordered and received 50,000 pairs of article no. 2449 Walking
Soles at a price of DM 5.60 a pair. It is furthermore not disputed that the [buyer] ordered
and received 600 pairs of the article T 1075 Halle Ambra at a price of DM 3.10 each. The
[buyer] paid DM 61,600.00 of the total purchase price of DM 273,761.70, leaving a
remaining claim for payment in the amount of DM 212,161.00.
Payment of the purchase price is furthermore due. The [buyer] did not succeed in
proving to the Court that the [seller] granted [buyer] a respite in payment. Witnesses S.
and B. concurred in their testimony that such an agreement was not formed. The
[seller]'s commercial agent, witness S., testified that the [buyer]'s manager had made a
settlement request, which he had then forwarded to the [seller]. It follows from this
testimony that he did not form a contractual agreement on a respite in payment with
the [buyer]'s manager. Witness S. furthermore testified that he did not receive an
answer from the [seller] regarding the request. This is supported by the testimony of
witness B., who also reported that the [seller]'s owner did not give a definite answer
granting a delay. For this reason, the Court concludes from the testimony of the
witnesses that the [buyer]'s manager did not form a binding understanding with the
[seller] regarding a respite in payment. The onus of proof for the respite in payment is
on the buyer. Following the negative result of the taking of evidence, the due date for
the payment without the respite in payment is the one stated on the invoices, that is,
forty-five days after the invoicing date.
2. The [seller]'s claim for payment of the purchase price was not diminished by way of
[buyer]'s set-off. The [buyer] is not entitled to damages under Art. 74 et. seq., Art. 38 et.
seq. and Art. 45 et. seq. CISG.
Under Arts. 38, 39 CISG, the [buyer] was obliged to examine the goods and give
notice to the [seller] specifying the nature of the lack of conformity within a reasonable
period of time after [buyer] discovered it. The [buyer] gave notice of the non-conformities
solely with its letter of 17 September 1997 to the [seller] and with its letter of 23
September 1997 to the [seller]'s commercial agent. Neither notice meets the
requirements set out by Art. 39 CISG, as they do not specify the nature of the lack of
conformity. This requirement is intended to enable the seller to picture the non-conformity and to take the appropriate steps, i.e., send a representative to the buyer to
examine the goods and arrange for a substitute delivery or remedy the defect. In
determining the required precision of the notice of non-conformity, a mixture of
objective and subjective standards has to be applied, taking into account the position of
both the buyer and the seller in the economic system as well as the nature of the goods.
A more specific notice can be expected from an expert than from an uninformed buyer.
Very general complaints such as "not in order", "defective quality or delivery of wrong
goods", "inferior and poor quality", "poor workmanship" or general expressions of
dissatisfaction ("not as we imagined") are insufficient for the purposes of the CISG (cf.
v.Caemmerer/Schlechtriem, 2nd ed. 1995, Art. 39 n. 7).
A correct notice of non-conformity requires that the buyer indicate to which extent
there is a diversion in quantity and what kind of deviation in quality [buyer] is notifying of
(cf. Pilz, Internationales Kaufrecht, § 5 n. 67). If the goods were examined, the buyer
needs to report the results of the examination. The [buyer]'s two notices of non-conformity do not satisfy these requirements. Neither of the letters expounds on the
nature of the alleged lack of conformity of the soles. The [buyer] therefore failed to
give notice specifying the defect under Art. 39 CISG and is not entitled to rely on the
lack of conformity (Art. 39(2) CISG).
The [buyer] is further not entitled to declare a set-off with the costs for the remedy of
the soles in the amount of 13,020.00, since [buyer] did not submit at what time the [seller]
was supposed to have accepted this claim. On 13 May 1997, the Court drew the
[buyer]'s attention to the fact that it had not sufficiently substantiated its submission.
The [buyer] is unable to claim these costs under Art. 45 CISG in connection with Art.
38 et seq. CISG, because a notice specifying the nature of the lack of conformity is
missing with regard to these defects.
The [seller]'s claim for payment of the purchase price was not diminished by the
[buyer]'s performance under Art. 53 et. seq. CISG. While it is undisputed that the
[buyer] effected further payment to the [seller] in the amount of DM 49,218.40 and
DM 38,850.00, it is also undisputed that the [seller] credited these payments towards
the open invoice of 18 September 1997. The receipts submitted by the [buyer] do not
show its intention to make the payment towards any specific invoice. Thus, the [seller]
was entitled to credit the amount towards any of the invoices.
The claim for interest is based on Art. 78 CISG.
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].
Case text (English translation)
District Court (Landgericht) Erfurt 29 July 1998
-
with invoice no. 116 of 14 February 1997:
DM 85,848.00 -
with invoice no. 178 of 6 March 1995:
DM 20,445.60 -
with invoice no. 324 of 30 April 1997:
DM 60,502.15 -
with invoice no. 423 of 26 May 1997:
DM 106,965.60
total:
DM 273,761.70
Amount [...]
Total: 2,481 pairs."
- DM 106,293.60 for the period 7 May 1997 to 21 May 1997
- DM 44,693.60 for the period 22 May 1997 to 30 June 1997
- DM 105,196.10 for the period 1 July 1997 to 26 July 1997; and
- DM 212,161.70 from 27 July 1997.
*** 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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