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CISG CASE PRESENTATION

Germany 24 September 1998 District Court Regensburg (Cloth case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/980924g1.html]

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

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Case identification

DATE OF DECISIONS: 19980924 (24 September 1998)

JURISDICTION: Germany

TRIBUNAL: LG Regensburg [LG = Landgericht = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 6 O 107/98

CASE NAME: German case citations do not identify parties to proceedings

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy [plaintiff]

BUYER'S COUNTRY: Germany [plaintiff]

GOODS INVOLVED: Cloth


Case abstract

GERMANY: Landgericht Regensburg 24 September 1998

Case law on UNCITRAL texts (CLOUT) abstract no. 339

Reproduced with permission from UNCITRAL

At a textiles fair, a German buyer, defendant, ordered fabrics from the seller, plaintiff, for the production of skirts and dresses. After delivery, the buyer objected to the quality and to the size of the fabrics, as they could not be cut in an economical manner. The buyer requested that the seller deliver "unobjectionable goods" within fourteen days. The seller sent samples of another fabric and asked the buyer for further information as to the problems faced by it for the manufacture of the skirts and dresses. When the buyer refused acceptance, the seller sued it for the purchase price.

The court allowed the claim. It held that the buyer had no right to refuse to pay the purchase price, as the fabrics were in conformity with the contract. Taking into account the quantity, the quality and the description of the fabrics, the court concluded that they were fit for the production of skirts and dresses (article 35(2)(a) CISG). The buyer had not provided the seller with information regarding the manner in which the fabrics had to be cut in order to be economical. Moreover, this requirement was not evident from the circumstances (article 35(2)(b) CISG). The properties and quality of the fabrics corresponded to the samples presented by the seller at the fair and as such, they were in conformity with the contract pursuant to article 35(2)(c) CISG.

Regarding the quality of the fabrics, the court held that the buyer failed to specify the nature of the lack of conformity, and even if the lack of conformity had to be admitted, the buyer had failed to give timely notice to the seller pursuant to article 39(1) CISG.

The court determined that, in any case, the buyer had lost its right to declare the avoidance of the contract, as it disregarded the provisions of article 49(2)(b)(ii) and (iii) CISG. The court noted that these provisions meant that the buyer could only declare the contract avoided after it had given the seller an opportunity to perform the contract. The court found that the buyer prevented the seller from exercising its right to remedy under article 48 CISG, by demanding re-delivery without specifying the character of the "unobjectionable goods" and by refusing the acceptance of another fabric, of which samples had been sent to it. The seller was entitled to send samples instead of a complete substitute delivery, because it could not be in a position to know whether the buyer would accept such substitute delivery. The delivery of the samples was timely, because the parties had not agreed on a particular date for such delivery. As such, the buyer had not fulfilled the conditions for avoidance of the contract pursuant to article 49 CISG.

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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 35 ; 39(1) ; 47 ; 48 ; 49(2) ; 78

Classification of issues using UNCITRAL classification code numbers:

35A ; 35B21 ; 35B3 [Conformity of goods to contract: quality, quantity and description required by contract; Reliance on seller's skill and judgment: buyer had not provided seller with information regarding the manner in which the fabrics had to be cut; Quality of goods held out as sample or model: goods held to be in conformity];

39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time specifying nature of non-conformity];

47A2 [Buyer's right to fix additional period for performance: basis for avoidance for delay in delivery under art. 49(1)(b)];

48B1 [Cure by seller after date for delivery (seller's right to remedy any failure to perform): seller inquires "Will buyer accept performance?" (consequences of buyer's failure to reply)];

49A [Buyer's right to avoid contract: grounds for avoidance];

78B [Rate of interest]

Descriptors: Conformity of goods ; Lack of conformity notice, timeliness ; Lack of conformity notice, specificity ; Nachfrist ; Cure ; Avoidance ; Interest

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Editorial remarks

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Citations to other abstracts, texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=507&step=Abstract>; [1998] 3 Forum des Internationalen Rechts/The International Legal Forum (English language edition) 109

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-online website <http://www.cisg-online.ch/cisg/urteile/514.htm> [cited as 17 December 1998]; [1998] 3 Forum des Internationalen Rechts 109-110; [2000] Transport- und Speditionsrecht "Internationales Handelsrecht" 30-31; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=507&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Teija Poikela, Conformity of Goods in the 1980 United Nations Convention on Contracts for the International Sale of Goods (December 2003) n.169 [pdf access at Nordic Journal of Commercial Law, Issue 2003 # 1 <http://www.njcl.utu.fi>]; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at n.405; 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); 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]; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 48 para. 17

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Case text (English translation)

Queen Mary Case Translation Program

Landgericht Regensburg 24 September 1998

Translation [*] by Ruth M. Janal [**]

Translation edited by Camilla Baasch Andersen [***]

FACTS OF THE CASE

The [seller] is a manufacturer of textiles, the [buyer] owns a knitwear factory with all the business that goes with it.

[Seller] has brought an action for the purchase price for a delivery of fabrics.

[Seller] submits that the [buyer] ordered fabric at a trade fair in Prato on 2 March 1996. This order was confirmed by the [seller] on 22 March 1996. The order had been based on a textile sample presented to the [buyer]. Furthermore, [seller] had sent the [buyer] a substantially larger sample on 15 April 1996. The first part of the delivery had been effected on 2 May 1996, the second part of the goods was delivered on 17 May 1996. The [buyer] refused to take possession of the goods, claiming that the cloth could not be cut in an economical manner and that the fabric was billowing out. [Seller] submits that the [buyer] was familiar with the quality of the fabric before ordering it and that the fabric was not defective. Moreover, even if the goods had been non-conforming, the [seller] would have been entitled to remedy the defect according to Art. 48 of the United Nations Convention on Contracts for the International Sale of Goods (CISG). At no point in time did the [buyer] provide the [seller] with the opportunity to make use of his right to remedy the alleged non-conformity. Therefore, the [buyer] was not entitled to declare the contract avoided and was obliged to pay the price for the textiles it ordered.

The [seller] requests the Court to:

  1. Order the [buyer] to pay the amount of DM [Deutsche Mark] 13,860.22 with interest of 12% on DM 10,483.24 from 18 May 1996 and on DM 3,376.98 from 1 June 1996; and to

  2. Order the [buyer] to pay a further DM 198.05 with interest of 12% from 31 July 1996.

The [buyer] asks the Court to dismiss [seller]'s claim.

The [buyer] acknowledges that it indeed ordered the textiles at the trade fair in Prato on 2 March 1996. The [seller] presented it with two samples in the size of roughly 10 by 10 centimeters. The [buyer] required the fabric for the production of its fall collection which needed to be finished on 15 July 1996 at the latest. The cloth was delivered on 2 May and 17 May 1996, whereupon [buyer] immediately examined and washed the fabric. [Buyer] thereby discovered that the cloth could not be cut economically. Usually fabric has to be delivered by the meter in a way that both the front and the back of a dress or skirt can be cut out of the folded material at the same time. The textiles delivered by the [seller] did not allow such a customary and economical cutting. The only possibility left would have been to take a triangular piece of the cloth and cut either front or back of a dress or skirt out of it. Whereas generally a length of 1.8 meters is needed to cut a skirt out of a roll of material, four meters of the cloth delivered by the [seller] would have been required. This would have resulted in a waste of 122%, an amount that could not be considered economical. The price of a skirt manufactured out of the cloth would therefore have had to be at least twice the price of a skirt generally produced by the [buyer]. [Buyer] would have suffered damages that exceeded by far the price of the material. The [buyer] further discovered that the fabric was billowing out after being washed and did not hang as required. [Buyer] asked the [seller] to deliver non-defective fabric. Since the [seller] had not followed suit, [buyer] was entitled to refuse the payment of the purchase price.

REASONING OF THE COURT

[Seller]'s claim is allowed with respect to an amount of DM 13,860.22 and dismissed with respect to any further claims.

It is undisputed that the [seller] was originally entitled to a purchase price in the amount of 13,860.22. The [buyer] is not entitled to refuse payment of that price.

On 2 March 1996, the [buyer] ordered the goods based on a sample presented to it by the [seller]. The fabric was also delivered in the quantity, quality and description required by the contract. Unless the parties have agreed otherwise, under Art. 35(2)(a) CISG, goods only conform with the contract if they are fit for the purposes for which goods of the same description would ordinarily be used. Undisputedly, the fabric delivered by the [seller] is fit to be used for the production of skirts and dresses. Art. 35(2)(b) CISG further requires that the goods be fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract. However, the [buyer] does not submit that it in any way indicated when it ordered the cloth that the fabric had to be cut in a certain way in order to be used economically. The [seller] was unable to infer from the circumstances that the [buyer] meant to cut the material in any particular way. The cloth is furthermore non-defective under Art. 35(2)(c) because [buyer] itself admitted that the fabric possessed the qualities of the sample presented to it by the [seller]. Therefore, the [buyer]'s defense that the cloth could not be cut in an economical manner cannot be heard. Even if this submission were correct, this would also not constitute a defect under 459 BGB [*], unless the parties had stipulated the possibility of an economical processing of the goods in their contract.

[Buyer]'s other submission that the fabric was billowing out after washing and did no longer hang properly is also not convincing, because it did not specify the nature of the alleged defect. And even if the alleged defect had existed, the [buyer] failed to notify the [seller] of the defect within a reasonable time as required under Art. 39(1) CISG. The faxes of 15 May and 29 May 1996 presented by the [buyer] do not give conclusive evidence whether the [buyer] complained about any non-conformities and to which defects those notices would have referred.

Finally, even if the Court assumed a non-conformity of the goods and a notice within a reasonable time under Art. 39(1) CISG, the [buyer] would still not be entitled to declare the contract avoided. According to Art. 49(2)(b)(ii) CISG, the buyer loses the right to declare the contract avoided if the buyer fails to do so within reasonable time after the expiration of an additional period of time fixed by the buyer under Art. 47 CISG, or after the seller has declared that it will not perform his obligations within such an additional period. As a consequence, the [buyer] would only have been entitled to declare the contract avoided if it had provided the [seller] with an opportunity to remedy the alleged breach of contract. The [seller] tried to help the [buyer] with the difficulties it was obviously experiencing in processing the cloth and asked [buyer] for more information with respect to the nature of those difficulties. [Seller] also sent the [buyer] a different kind of the fabric ordered, that is, Lolita instead of Lolita-Airo, so that [buyer] could try processing this material. However, the [buyer] refused to take delivery of this fabric. Instead, the [buyer] fixed an additional period of fourteen days for the delivery of "non-defective goods", without specifying what [buyer] considered to be non-defective. [Buyer] therefore thwarted [seller]'s right to remedy a non-conformity under Art. 48 CISG. Since the [seller] could not know which type of fabric the [buyer] would accept, it was not obliged to send more than a sample of the replacement cloth. The delivery of the sample was also timely because the parties had not agreed on a specific period of delivery. The [buyer] was therefore held to agree to the solution suggested by the [seller]. Because [buyer]'s request to deliver "non-defective" goods within fourteen days was insufficient, it was not entitled to declare the contract avoided under Art. 49 CISG and remains obliged to pay the purchase price for the textiles.

The claim is therefore allowed in the amount of DM 13,860.22.

The Court will only allow interest in the amount of 5% under 352(1) HGB [*] from the time the action was brought, because the [seller] has neither shown that it suffered a higher damage nor proven an earlier culpable delay by the [buyer].


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].

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; HGB = Handelsgesetzbuch [German Commercial Code].

** Ruth M. Janal, LL.M (UNSW) is a Ph.D. candidate at Albert-Ludwigs-Universität 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 Ph.D. thesis on uniformity of the CISG at the University of Copenhagen.

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Pace Law School Institute of International Commercial Law - Last updated September 15, 2006
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