Germany 28 April 2000 Appellate Court Oldenburg (Furniture case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/000428g1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 13 U 5/00
CASE HISTORY: 1st instance LG Oldenburg (90 1609/99) 20 December 1999
SELLER'S COUNTRY: Denmark (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Furniture
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
38A [Buyer's obligation to examine goods: time for examining goods]; 39A11 ; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Specification of nature of non-conformity: degree of specificity required]; 40A [Seller's knowledge of non-conformity]; 44A [Excuse for failure to notify pursuant to art. 39(1)]
38A [Buyer's obligation to examine goods: time for examining goods];
39A11 ; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Specification of nature of non-conformity: degree of specificity required];
40A [Seller's knowledge of non-conformity];
44A [Excuse for failure to notify pursuant to art. 39(1)]
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CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/683.htm>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English:  S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 92;  Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 39 paras. 6, 7, 17 Art. 40 para. 5Go to Case Table of Contents
Queen Mary Case Translation Programme
28 April 2000 [13 U 5/00]
Translation [*] by Linus Meyer [**]
Edited by Jan Henning Berg [***]
FACTS AND POSITION OF THE PARTIES
The Plaintiff [Seller], a Danish supplier of furniture, requests payment from the [Buyer], a German furniture dealer, for furniture delivered. On 3 August 1998, the [Buyer] ordered furniture by fax from the range of goods that had remained in the [Seller]'s stock. The [Seller] billed 40,494.99 Deutsche Mark [DM] on 5 August 1998 (invoice number 31041) and 989.48 DM on 6 August 1998 (invoice number 31047). The furniture was delivered in 770 packages but not accepted by the [Buyer] because some packages had toppled. The [Buyer] then accepted the goods on 21 January 1998 except for 30 damaged packages. The [Seller] granted a credit of 1,254.48 DM on 24 September 1998.
By letter of 29 September 1998, the [Buyer] sent the following notice of non-conformity to the [Seller]:
Dear Sir or Madam,
The greatest part of the goods that we have received cannot be used or can only be used with great difficulties. The greatest part of the goods (95 %) does not consist of goods that have remained in stock but of goods that are second quality. We ask for your reply by 7 October 1998."
By letter of 2 October 1998, the [Seller] complained that the notice given by the [Buyer] was not very concrete. It claimed that the [Buyer] had known the supplier from earlier deliveries and could not have anticipated a better quality. An exchange of letters evolved in which the [Buyer] asked for either the pickup of the furniture or a discount. The [Seller] did not inspect the goods. The [Buyer] then claimed costs for the storage of the goods and the [Seller] employed a Danish lawyer. The [Seller] has requested the court to order the [Buyer] to pay the lawyer's fees and the open balance from the invoices minus the credit that had been granted. It has argued that the [Buyer] could not rely on any non-conformity as it had not given an adequate notice of lack of conformity as required by the CISG. The [Buyer] has argued that the drawers in the commodes with six drawers did not work due to moisture expansion. It also argued that the end pieces of the beds delivered were not milled exactly, that there were splinters and hammer prints at the end of the bed's feet. The drillings on most parts were also not exact, therefore the furniture could not be assembled.
The [Buyer] has further argued that there was an agreement between its commercial association and the [Seller] that an examination of the goods that were delivered in packaging needed not be conducted immediately after delivery and that the deliverer acknowledged in that agreement that in the due course of business in the furniture trade the usual time for an examination was needed. After the [Buyer] had taken back the counterclaim for storage costs that it had subsequently raised, the Court of First Instance ordered the [Buyer] to pay 40,929.99 DM plus 8 % interest since 6 November 1998 as well as a further 947.00 DM to the [Seller].
The Court of First Instance has elaborated that the [Buyer] could not rely on possible non-conformities because it had not complied with the time limit for the notice of non-conformity established by Arts. 38, 39 CISG. The Court of First Instance has conceded a period of ten days for the examination of the furniture and additional fourteen days for the notice of non-conformity. On appeal, the [Buyer] has requested the Appellate Court to overturn the judgment and reject the [Seller]'s claim.
The [Seller] has asked the Appellate Court to reject [Buyer]'s appeal.
The [Buyer] has argued that:
|-||It was not obliged to pay the purchase price as it was entitled to avoid the contract under Art. 19 because of the severe non-conformity of the goods. [Translator's note: Although Art. 19, is mentioned here, this is undoubtedly a typo with Art. 49 intended.]
|-||Its notice of non-conformity had met the formal requirements and had also reached the [Seller] within the period of time established by Arts. 38, 39 CISG. Moreover, by its later conduct the [Seller] had impliedly waived the objection that the notice of non-conformity was made too late.
|-||The [Seller] had also known of the considerable and evident non-conformity and could therefore not rely on a faulty notice of non-conformity.
|-||In any event, the buyer was entitled to reduce the price by 50 % under Art. 50 CISG.|
[Buyer] has argued that the usual time for an examination in the furniture business was three weeks and that the meaning of "second quality" goods was known in the furniture trade. It was therefore not necessary to particularize which deviations from the standard quality were meant by this expression.
The [Seller] has challenged the [Buyer]'s arguments.
REASONS FOR THE DECISION
The appeal is admissible but unsuccessful. The Court of First Instance was right in ordering the [Buyer] to pay the purchase price and the costs for the Danish lawyer. It is irrelevant whether the [Buyer]'s notice of non-conformity on 29 September 1998 was late, because the notice did not comply with the requirements of Art. 39 CISG with respect to its content. According to Art. 39(1) CISG the buyer must exactly identify the non-conformity in the notice. The letter of 29 September 1998 does not contain the exact identification of the non-conformity. The first sentence is that the goods cannot be sold or can only be sold with great difficulties. This is not description of a non-conformity. The second sentence is that the goods were not goods that had remained in stock but were goods of second quality. This notice does not sufficiently identify the non-conformity that the [Buyer] has relied upon in its memorandum of 28 July 1999.
The [Seller] had also assumed this position and informed the [Buyer] in its reply to the letter of 29 September 1998 that the description of the non-conformity was too abstract. It has further stated that the [Buyer] knew the quality of the products delivered by the supplier and could not expect a better quality. A better quality could not be required at that purchase price.
Moreover, at least after this letter, the [Buyer] needed to specify the non-conformities in order to preserve its right under Art. 39 CISG. It is not in dispute that the [Buyer] has not done this.
The [Buyer]'s contention that the expression "second quality" could only be understood in the way that the material delivered was damaged and not precisely produced could not be investigated by the court. The [Seller] has challenged the [Buyer]'s contention. The [Buyer]'s argument can therefore not be admitted (§ 528(2) ZPO [*]). The Court of First Instance had ruled according to § 273(2) (1) ZPO that the [Buyer]'s notice of 29 September 1998 was not in compliance with Art. 39(1) CISG with respect to its content as well as with respect to the time when it was sent. This advice was given in the decision on obligations and advices of 18 October 1999. The argument was therefore not raised as early as required by § 282(1) ZPO.
It is obvious that an expert's report ordered by the court would delay the proceeding. The reply to the appeal in which the new argument is contested was filed on 30 March 2000 and therefore early enough. Even if the chamber of the court had not taken action under § 273 ZPO, it would have been impossible to still order an expert's report. The data on experts that the court possesses do state that some experts are competent to give reports on furniture. The present dispute is, however, not about furniture but about the meaning of "second quality" in the furniture business. Finding an expert on this topic would have required using the services of the Chamber of Industry and Commerce. Therefore an expert's report could not have been finished by the date of the hearing.
The [Buyer] has acted with gross negligence by not amending its argument in the way that is has amended the argument in the second instance even though the Court of First Instance had informed it that the notice of non-conformity did not comply with the requirements with respect to its content. The [Seller] is not hindered from relying on the insufficient notice of non-conformity in this proceeding. The [Seller] has called attention to the fact that the notice of non-conformity was not concrete immediately after receiving the letter of 29 September 1998. The parties' negotiations have eventually failed because the [Seller] was suddenly confronted with a claim for storage costs in the amount of 52,000 DM.
The [Buyer]'s assumption that the [Seller] could not rely on an insufficient notice of non-conformity according to Art. 40 CISG because it had known of the faultiness of the furniture fails. There are no indications that the [Seller] knew of the faultiness of the goods delivered. The [Seller] was not obliged to examine the goods that were packaged and had been delivered by the suppliers of the packaging.
The [Buyer] is also not entitled to reduce the purchase price under Art. 44 because there is no reasonable excuse for the omission of the notice of non-conformity. The [Seller] had replied to the letter of 29 September 1998 by letter of 2 October 1998. After this, the [Buyer] cannot be excused if the [Buyer] does then not give a more detailed description of the non-conformity.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff and Defendant on appeal of Denmark is referred to as [Seller]; Defendant-appellant of Germany is referred to as [Buyer]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM].
Translator's note on other abbreviations: ZP0 = Zivilprozessordnung [German Code on Civil Procedure].
** Linus Meyer is a law student at the University of Osnabrück, Germany.
*** Jan Henning Berg is a law student at the University of Osnabrück, Germany and participated in the 13th Willem C. Vis Moot with the team of the University of Osnabrück. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis Moot and 4th Willem C. Vis (East) Moot.Go to Case Table of Contents