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Reproduced with permission from the Cornell Review of the Convention on Contracts for the International Sale of Goods (1995) 51-94

excerpt from

Judicial Interpretation and Application of the CISG in Germany 1988-1994

Martin Karollus [*]

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Article 14

An invoice can be regarded as an offer. If the buyer confirms the invoice, a contract is formed [LG Aachen 14 May 1993].[104]

One of the most controversial issues arising under the CISG is the validity of an open price contract. CISG Article 14 requires that the price given in an offer be determinable. Several authors contend that a determinable price is a requirement for a valid contract.[105] Although this issue has not been heard by German courts, the Supreme Courts of Austria [OGH 10 November 1994] [106] and Hungary [Legfolsobb Birósag 25 September 1992] [107] have ruled on the issue, unfortunately reaching different solutions. In my opinion, Article 14 only provides interpretative guidance: there should be a presumption that the parties do not intend a contract to be formed before the price is fixed or determinable. If it can be proved that the parties intended to form the contract despite the open price, that intent should prevail.[108]

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FOOTNOTES

* Professor of Law at the University of Bonn, Germany, from 1992 to February 1995. Currently, Professor of Law at the University of Linz, Austria. Address: Institut für Handels-und Wertpapierrecht, Universität Linz, A-4040 Linz-Auhof, Austria, Europe.

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104. Judgment of May 14, 1993, LG Aachen, 1993 RIW at 761.

105. See, e.g., Franz Bydlinski, Das allgemeine Vertragsrecht, in Das UNCITRAL-Kaufrecht im Vergleich zum österreichischen Recht 57, 62-63 (Peter Doralt ed., 1985).

106. Judgment of Nov. 10, 1994, Österreichischer Oberster Gerichtshof [OGH], 1995 JBl 253 cmt. M. Karollus (holding that the price agreement, "DM 35-65," is determinable under CISG Article 14).

107. Judgment of Sept. 25, 1992, Legfolsobb Biróság [Supreme Court of Hungary], reprinted in 13 J.L. & Com. 32 (Dr. László Szlávnits trans., 1993) (holding that the intent to enter a contract is not sufficient to make a contract when the price is not determinable). But see Paul Amato, Note, U.N. Convention on Contracts for the International Sale of Goods -- The Open Price Term and Uniform Application: An Early Interpretation by the Hungarian Courts, 13 J.L. & Com. 1 (1993) (criticizing the Hungarian Supreme Court's decision of Sept. 25, 1992).

108. See Karollus, supra note 20, at 60-62; Eugen Bucher, Preisvereinbarung als Voraussetzung der Vertragsgültigkeit beim Kauf, in Wiener Kaufrecht 53 (Eugen Bucher ed., 1991).

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Pace Law School Institute of International Commercial Law - Last updated August 16, 1999
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