CISG CASE PRESENTATION

Under § 7(b) of its standard terms, the [seller], at its own choice, is only obliged to either cancel the entire contract or part of the contract, grant the [buyer] a corresponding credit, deliver substitute goods, or grant the [buyer] an adequate reduction in the purchase price -- as [seller] did in the present dispute. The [seller] would thus not be obliged to reimburse the [buyer] for any damages, unless required by law. However, the [seller] does not submit the corresponding stipulations of Dutch law; [seller] especially does not address the question whether the parties may derogate from such rules.

The matter is of no importance as the [seller]'s standard terms were not validly incorporated into the contract, with the result that the application of the CISG was not validly excluded by § 10(c) of the standard terms. Both the [seller]'s order forms and its invoices contain a reference to its standard terms in small print and in the Dutch language. Contrary to the [seller]'s submission, the [buyer]'s failure to object to the standard terms does not lead to their implicit incorporation -- even if Dutch law was applicable. It is accurate that an acceptance of the incorporation of standard terms by the other party suffices under Dutch law (cf. Ulmer/Brandtner, AGBGB, 8th ed., Att. 1 n. 95), while it is not necessary for that party to gain knowledge of the specific conditions. As a measure of appropriateness it is, however, of relevance whether the party using the standard terms handed them over to the other party (which was not the case in the present dispute) or in any other way presented [buyer] with a reasonable possibility to read the terms (also not the case, as the standard terms were only deposited at a law firm in Utrecht [The Netherlands]). In any event, the question whether the standard terms were incorporated in the contract is governed by German law. The Court of First Instance correctly pointed out that the contract negotiations took place in Germany, were conducted by the [seller]'s employees in German, and that the invoices were also issued in the German language. At the least, the incorporation of the standard terms is therefore to be determined under German law (Art. 27(1) EGBGB [*]). The incorporation requirement of § 24 no. 1 AGBG [*] is not applicable between traders (§ 2 AGBG); an implicit agreement on standard terms is possible in commercial transactions (cf. BGHZ [*] 102, 293 (304)). It is also sufficient if one party in the course of a business relationship repeatedly refers to its standard terms on the invoices and the other does not object (cf. BGH [*] NJW [*] 1978, 2243), even if the standard terms are in a foreign language (cf. OLG [*] Köln, VersR [*] 1994, 1496 (1497)). The fact that the reference was in Dutch does furthermore not hinder an implicit agreement of the [buyer] with the standard terms (cf. BGH NJW [*] 1995, 190). However, in this decision the BGH [*] correctly points out that -- before signing the contract -- the other party must be presented with a reasonable opportunity to inform itself both of the kind and the content of the presented document. As has been explained above, this was not the case in the present dispute. The BGH further explained that standard terms in the German language may apply to a foreigner if German is the language of both the contract and the negotiations. For the present dispute, this means that Dutch would have to have been the language of the contract and the negotiations -- as expounded above, this language was not Dutch, but German. The standard terms are therefore not incorporated under German law.

      2. [Buyer]'s set-off with a claim for reimbursement of advertising costs in the amount of 700.00 DM is not legitimate. The [buyer] submits that it constantly advertises its goods with large announcements in the papers. [Buyer] presents one example which advertises vacuum cleaners for DM 99.99, if only as one of fourteen offers. But a substantiated documentation of the proportionate costs is missing, making the proof insufficient.

      3. However, the return costs in the amount of DM 1,000.00 are justified, leading to a reduction of the claim by that sum as a result of [buyer]'s set-off. The [buyer] claims costs for the unloading of the goods, loading of trucks, unwrapping, handling of complaints, etc. Following § 287 ZPO,[*] the Court estimates these costs at around DM 1,000.00, as the delivery to eleven branches and the transport back of 1,330 returned vacuum cleaners caused otherwise unnecessary costs.

III. The [buyer]'s appeal was thus justified in the extent of DM 1,000.00, leading to a change in the decision of the Court of First Instance. The appeal was rejected in all other regards.

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FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff-Appellant of Netherlands is referred to as [seller]; the Defendant-Appellee of Germany is referred to as [buyer]. Amounts in German currency (Deutsche Mark) are indicated as [DM].

Translator's note on other abbreviations: AGBG = Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen [German Code on Unfair Contract Terms]; BGH = Bundesgerichtshof [Federal Court of Justice, the highest German Court in civil and criminal matters]; BGHZ = Entscheidungen des Bundesgerichtshof in Zivilsachen [Case Reporter on decisions of the Federal Court of Justice in civil matters]; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on the Conflict of Laws]; NJW = Neue Juristische Wochenschrift [pre-eminent German law journal]; OLG = Oberlandesgericht [Court of Appeals]; VersR = Versicherungsrecht [German law journal]; ZPO = Zivilprozeßordnung [German Code on Civil Procedure].

** Ruth M. Janal, LL.M. (UNSW), a PhD candidate at Albert-Ludwigs-Universität Freiburg, has been an active participant in the CISG-online website of the University of Freiburg.

*** 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.