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Switzerland 26 April 1995 Commercial Court Zürich (Saltwater isolation tank case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/950426s1.html]

Primary source(s) for case presentation: Case text

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Case identification

DATE OF DECISION: 19950426 (26 April 1995)


TRIBUNAL: HG Zürich [HG = Handelsgericht = Commercial Court]

JUDGE(S): Unavailable


CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Switzerland (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Saltwater isolation tank

Case abstract

SWITZERLAND: Handelsgericht des Kantons Zürich 26 April 1995

Case law on UNCITRAL texts (CLOUT) abstract no. 196

Reproduced with permission from UNCITRAL

The Swiss plaintiff sold a "floating centre", a container filled with salt water for weightless floating, to the German defendant for an agreed upon price. The buyer alleged that the container leaked and as a result its house was damaged by water. Therefore, the buyer declared the contract avoided (article 49 (1) CISG) and refused to pay the outstanding balance. When the seller sued the buyer for the outstanding balance, the buyer filed a cross-claim seeking damages.

The court found that an agreement existed between the parties for a sale of goods with the attendant obligation to install the container. The court also found that the CISG was applicable since the services to be provided, i.e., the installation of the container, were not preponderant (article 3(2) CISG).

The court ruled in favour of the [seller]. It was held that the buyer had lost its right to declare the contract avoided under article 49 CISG since the buyer had failed to notify the seller about the lack of conformity of the goods in a timely fashion (articles 39 and 49(2)(b)(i) CISG).

The court also mentioned that the seller's failure to perform its obligation was probably not a fundamental breach as the damage concerned was easily repairable. However, since the buyer had lost its right under article 49(2)(b)(i) CISG, the court did not address this question fully.

As regards damages, the court found that the buyer had lost its rights for failure to claim damages for the leak within a reasonable time. Compensation for damages caused by the transport of the container was denied by the court because the buyer failed to prove them sufficiently (article 74 CISG).

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]


Key CISG provisions at issue: Articles 3(2) ; 4 ; 5 ; 7 ; 25 ; 35 ; 39(1) ; 49 ; 74 [Also cited: Articles 38 ; 45(1)(b) ; 79 ] [Also relevant: Articles 46 ; 80 ]

Classification of issues using UNCITRAL classification code numbers:

3B [Scope of CISG: installation services not amounting to a preponderant part of seller's obligations];

4A [Scope of Convention: includes burden of proof];

5A [Exclusion of claims based on death or personal injury];

7C22 [Recourse to general principles on which Convention is based: general principles];

25C [Definition of fundamental breach: defect that can easily be repaired not a fundamental breach];

35D [Conformity of goods to contract (burden of proof): general principle of the Convention (buyer must provide evidence of lack of conformity];

39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

49B [Buyer's right to avoid contract: timeliness of notice required];

74A [Damages (general rules for measuring): loss suffered as consequence of breach]

Descriptors: Scope of Convention ; Services ; Death or personal injury ; Fundamental breach ; Avoidance ; Conformity of goods ; General principles ; Burden of proof ; Lack of conformity notice, timeliness ; Damages

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Editorial remarks

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Citations to other abstracts, case texts and commentaries


English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=166&step=Abstract>

German: Schweizerische Zeitschrift für Internationales und Europäisches Recht (SZIER) / Revue suisse de droit international et de droit européen 1996, 51-53

Italian: [1998] Diritto del Commercio Internazionale 736-737 No. 149


Original language (German): Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=166&step=FullText>

Translation (English): Text presented below


English: Ferrari, International Legal Forum (4/1998) 138-255 [191 n.461 (analysis of Art. 3(2))]; Koch, Pace Review of Convention on Contracts for International Sale of Goods (1998) 255-256 nn.261-262 [fundamental breach: offer to cure/possible cure]; Honnold, Uniform Law for International Sales (1999) 212 [Art. 25 (standards for avoidance)]; for a survey of close to 100 judicial and arbitral rulings on Article 39(1), go to the 1998 Pace essay on this subject by Camilla Baasch Andersen; Saidov, Damages under the CISG (December 2001) nn.355, 357; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) § 2-5 n.38; § 2-6 n.83; Graffi, Case Law on the Concept of "Fundamental Breach" in the Vienna Sales Convention, Revue de droit des affaires internationales / International Business Law Journal, No. 3 (2003) 338-349 at n.85; Ari Korpinen, On legal uncertainty regarding timely notification of avoidance of the sales contract (June 2004); Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.499 ("flaw in a salt water container resulting in leakage was easily repairable and thus did not constitute a fundamental breach"), 762 ("damages were not awarded ... where the party seeking damages fails to ... state a claim for damages within a reasonable time"); CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (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 172, 181; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 5 para. 9 Art. 7 para. 56 Art. 25 para. 20, 21a; Spaic, Analysis of Fundamental Breach under the CISG (December 2006) nn.267, 349

French: Dessemontet/Spiegel, in: Sebastian Bettschart ed., Les ventes internationales (CEDIDAC 1998) Vol. 36, 112-114

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Commercial Court (Handelsgericht) Zürich

26 April 1995 [HG920670]

Translation [*] by Stefan Dietrich [**]


Claim by Plaintiff [Seller]

The [Buyer] should be obliged to pay to the [Seller] under reserve of further claims the amount of 2,784.20 Sfr. [Swiss francs] together with interest at 10% since 30 June 1992; all expenses in account of the [Buyer].

Counterclaim by Defendant [Buyer]

1.    The [Seller] should be obliged to pay the amount of 19,666 DM [Deutsche Mark (former German currency)] to the [Buyer].
2. The [Seller] should be obliged to detach and retract the saltwater isolation tank (a wellness device) - it delivered to the [Buyer] and installed there - at its own expense and to refund the payment of the purchase price of 39,000 DM together with interest at 13.5 % since 14 March 1992 on 20,000 DM and since 13 April 1992 on 19,000 DM.
3. In the alternative, the [Seller] should be obliged to replace the saltwater isolation tank or replace single parts of it and install the same within a respite defined by the court, after stipulation of the costs by the court, so that thereafter the acceptable functioning of the saltwater isolation tank is assured; in that case, the [Seller] should furthermore be obliged to pay a compensation, defined by the court, for the damage which developed from the stoppage of the possibilty of using the saltwater isolation tank from 2 May 1992 to the repair for the [Buyer].

All expenses should be to the account of the [Seller].


I.  1. On 21 July 1992, the single judge in civil matters at the Zurich District Court received an instruction and the legal request (act. 2/1 and /2). On the occasion of the main negotiation of 10 November 1992, the [Seller]'s representative filed a counterclaim (protocol of Zurich District Court p. 5 f), whereupon the judge referred the lawsuit by court order of the same day to the Commercial Court because the amount in dispute exceeded 8,000 Sfr. and so the requirements of 62 GVG (Swiss Act on the Constitution of the Courts) were fulfilled. The lawsuit has been received here by 26 November 1992 (act. 1 und 2/1-28).

      2. In February 1993, a writ which complied with 113 and 126 ZPO (ZPO = Swiss Civil Process Code) with the above mentioned request (act. 8) was received by the court. With its counterstatement of 3 May 1993, the [Buyer] applied for dismissal of the action, filed the initially mentioned counterclaim and formally filed a petition to undertake the ongoing conservation of evidence proceeding before the County Court [...] according to request 3 of the counterclaim by the Commercial Court of Zurich and to continue with it as a precautionary measure. In the alternative, [Buyer] asked to have such a proceeding ordered autonomously by the Commercial Court of Zurich as a precautionary measure (act. 17). This proposal as well as the alternative proposal were dismissed by court order of 22 June 1993 (act. 28). After receipt of the replication of the action and the counterclaim rejoinder of 14 June 1993 (act. 26), on 19 October 1993 a consultant's audience and a negotiation to find a settlement took place which did not lead to an agreement (prot. p. 7-17).

The main proceeding was carried forward verbally. It took place on 7 February 1994 on the occasion of which the [Buyer] handed in the replication and counterclaim rejoinder (prot. p. 20-30) and the [Seller] handed in the counterclaim replication (prot. p. 31-37). After the [Buyer]'s representative commented on the alterations in the counterclaim replication (prot. p. 37), the main proceeding was closed (prot. p. 41).

      3. By writ of 22 February 1994, advocate [...] imparted that it no longer represents the [Buyer] (act. 38), whereupon a time limit was set for the [Buyer] to name an agent for services of process in Switzerland (prot. p. 42). By writ of 11 May 1994, advocate [...] alluded to his appointment by the [Buyer] as its agent pursuant to 30 ZPO (act. 41). An annotation is to be made therefrom.

      4. On 17 February 1995, the evidence order was made (prot. p. 44 f). Whereas the [Seller] set the naming of counter evidence aside (act. 48); on the side of the [Buyer], no evidence was named. As forewarned, the acceptance of evidence is omitted (compare prot. p. 45); thus the proceeding is ripe for decision.

II.  1. The [Seller] is a stock corporation based in Zurich which sells and installs so-called "Floating Centers" and which gives relevant advice to its customers. An ovaliform isolation tank is used to "float." The tank which is filled with more than 1,200 liters of strongly saline water, should give users a "Dead Sea weightlessness". "Floating" should reduce stress and help in the treatment of chronic pains, etc. (act. 9/1 and /2).

The [Buyer] is a German Ltd (GmbH) based in [...] (act. 17 S. 4).

      2. In March 1992, the [Buyer] ordered by phone the [...] offered by tender of 3 December 1991 and made a first down payment of 20,000 DM on 14 March 1992 (act. 8 p. 6 f; act. 9/3). On 10/11 April 1992, the [Seller] delivered the saltwater isolation tank and installed it, whereupon the [Buyer] made a second down payment of 19,000 DM (prot. p. 9). After the installation was completed, the [Seller] brought to account an amount of 42,042.80 DM on 12 April 1992 and asserted a claim for the outstanding amount of 2,784.20 Sfr. (act. 9/4).

      3. The [Buyer] on its side sought to avoid the contract for the saltwater isolation tank because of the leaky conductions and the unfeasibility of the room in which the tank was installed; for the thereby sustained water damage the [Buyer] asserts an indemnity in the overall amount of 7,209.24 DM (act. 17 p. 8 et seq.). Furthermore, [Buyer] demands an amount of 11,897.25 DM titled as "damage in transit". By inaccurately transporting the saltwater isolation tank to its house, damages are said to have resulted to the banister, door and wall to the mentioned extent, for which the [Seller] alone should be responsible (act. 17 p. 5 et seq.). [Buyer] also seeks reimbursement of the attorneys' fees incurred in connection with the damages in transit in the amount of 559.51 DM (act. 17 p. 7).

The court stated that the single pleadings of the parties should be dwelled on - as far as it is necessary - later on.

III. 1. [Applicable law]

            a. The [Seller] is based in Switzerland, the [Buyer] in Germany. The issue involves a matter of international contact which leads to the questions of jurisdiction and which law is applicable to solve the issue.

            b. Both parties derive their claims - as far as apparent - from the mentioned contract, which they qualify as a contract of sale with inferior elements of a contract for services (act. 26 p. 28) or, as the case may be, a mixed contract (contract of sale regarding the transfer of ownership and contract for services for the rest) (act. 17 p. l9 f). Based on the files presented, we can proceed from the assumption that it is a contract of sale with the obligation to install. This contract combines a contract of sale on the delivery of finished goods (at hand, a saltwater isolation tank) with an element of a contract for services, namely the [Seller]'s obligation to install the goods (Gauch, Der Werkvertrag, 3. ed, Zurich 1985, N 118). When the obligation to set up that is owed only consists of an inferior "accessory obligation", this does not oppose to a qualification of the whole contract under sales law (Gauch, l.c., N 118; Schluep, SPR VII/2, p. 773 f.). At hand, the benefit in kind preponderates the service by far which solely arises from the handed in invoice (act. 9/4). Furthermore, the obligation to set-up ultimately solely serves as to harness the purchased goods accordingly. Within the overall performance (delivery of a saltwater isolation tank including installation), the accessory obligation (installation) only plays a subordinate role.

            c. Both Germany (1 January 1991) and Switzerland (1 March 1991) are Contracting States of the CISG. Pursuant to Art. 3(2) CISG, this Convention does not apply to contracts in which the preponderant part of the obligations of the party that furnishes the goods consists in the supply of labor or other services. A purchase with the obligation to install the goods falls, as a general rule, in the scope of the CISG (here the Swiss ruling gives a source for this statement: Honsell, Das Übereinkommen über den internationalen Warenkauf [Wiener Kaufrecht], Plädoyer 2/1990, p. 39). By all means, this is always the case when the obligation to set up only plays an inferior role. As already set forth, the benefit in kind clearly outweighs the service at hand; the latter only has a subordinate importance. For this reason, the provisions of the CISG are applicable to this case.

            d. The CISG only forms substantive law which primarily governs the accomplishment of the contract and which regulates the rights and obligations of the seller and the buyer (Honsell, l.c., p. 38; Walter, Das UN-Kaufrechtsübereinkommen, in: FS Vogel, Freiburg 1991, p. 317 f). Thus, the question of the local competence would have to be judged after the Swiss law of conflicts. But this is at hand superfluous because the [Buyer] has, without any reservations, accepted the competence of the Swiss court appealed to (Art. 6 IPRG). In factual respect, the competence of the commercial court results from 62(1), as the case may be, 63 sec. 1 GVG.

       2. [Amount of Seller's claim: price and interest thereon]

            a. Ordering, delivery of the saltwater isolation tank and the above mentioned installation are unchallenged and the amount of the balance demanded is uncontested (act. 17 p. 5). The action can therefore be approved. This is apart from the fact that the [Seller] sued for Swiss francs instead of the actually amount owed in DM (Deutsche Mark), because the [Buyer] - as stated - expressly accepted the action according to amount.

            b. The [Seller] demanded interest of 10 % on amounts paid since 30 June 1992 which remained uncontested and is owed as well.

       3. [Buyer's counterclaim: non-conformity of goods; examination and notice issues]

            a. Basically, the [Buyer] based its claim for avoidance on two causes: The facility, especially the pilotages, are said to have been leaky and the room in which the saltwater isolation tank was installed was not appropriate for this (act. 17 p. 18 f and 8 ff; prot. p. 22 ff).

            b. Arts. 38 and 39 CISG regulate the buyer's duty to examine the goods and to give notice of lack of conformity (v.Caemmerer / Schlechtriem, Kommentar zum einheitlichen UN-Kaufrecht, CISG, 2d edition, München 1995, Art. 38 N 3; Tanno, Die Berechnung der Rügefrist im schweizerischen, deutschen und UN-Kaufrecht, Diss. St. Gallen 1993, p. 267). Accordingly, the buyer must examine the goods within as short a period as is practicable in the circumstances. (Art. 38 CISG). If a lack of conformity is discovered, the buyer has to give notice to the seller within a reasonable time (Art. 39(1) CISG). Thus, the buyer has to take account of a short period for the examination of the goods and a reasonable time for the notice of lack of conformity (v.Caemmerer / Schlechtriem, l.c., Art. 39 N 16 f, for which German writers tend to speak of a period of approx. eight days; however, primarily the circumstances of the individual case have to be taken into account). Pursuant to Art. 49(2)(b) CISG, the buyer may only declare the contract avoided if the buyer gives notice of lack of conformity within a reasonable time in respect of a breach of contract (particularly wrong delivery or defects as to quality). The contract may only be avoided if the failure amounts to a fundamental breach of contract (Art. 49(1)(a) CISG). Pursuant to Art. 49(2)(b)(i) CISG, the period begins at the point of time after the buyer knew or ought to have known of the breach. The point of time is identical to the one under Art. 39(1) CISG; to give notice of lack of conformity or to avoid the contract, the same reasonable time is available for the buyer. Thus, the buyer generally has to declare the contract avoided when notifying lack of conformity if it wants to avoid the contract in case of a fundamental breach of contract (v.Caemmerer / Schlechtriem, l.c., Art. 49 N 45 f).

            c. In this case, it can remain open whether the [Buyer] examined the delivered and installed goods within the necessary time or not. In this regard, the [Buyer] merely claims that an employee, [...], cleaned the edges once (act. 17 p. 8). But this should not satisfy the "examination" requirement of Art. 38 CISG. After all, it is a matter of a facility which is connected to water and which is filled with highly saline water, which requires for scrutiny in particular the pilotages and the gaskets; a single look at the facility would not be sufficient. The [Buyer]'s objection, the supposedly daily inspecting caretaker was unable to detect the lack of conformity, (supposably) because the charlady regularly wiped off puddles of water which formed on the parquet (prot. p. 29), is irrelevant. If that were the case, this would amount to a misconduct of the charlady which would have to be attributed to the [Buyer].

In any event, the [Buyer] detected defects - by its own account - on 2 May 1992 (or possibly only on 4 May [act. 17 p. 19] or, as the case may be, on 5 May 1992 [prot. p. 23]). The secretary, Mrs. [...], observed a water spot in the entrance hall on the ground floor on the ceiling right underneath the saltwater isolation tank and initiated the immediate shutdown of the device (act. 17 p. 8 f; prot. p. 22 f). This, on its own, alludes to the fact that the facility has not been scrutinized, as the alleged salt deposits and the water spot on the ceiling could hardly emerge overnight (the [Buyer] talks about "forming puddles on the parquet "; prot. p. 29). Not later than at that time, the [Buyer] should have scrutinized the facility and detected the untight spots. These could have been detected easily - as it can be extracted from the expertise presented by the [Buyer] (act. 32/2). According to the mentioned expertise, there existed leakages on four parts, respectively at the connectors of the filter, the pump and at the hose connections which could clearly be identified - even after the facility had already been emptied (act. 32/2 p. 4). Afterwards, the [Buyer] should have given notice to the [Seller] within a reasonable time (compare Art. 39 CISG). But the notice was carried out only by writing of 29 May 1992 (act. 9/9). Therein, the [Buyer] informed the [Seller] about water leaking from the saltwater isolation tank, presumably from the hose to the filter or to the pump, which has apparently been installed incorrectly, which led to significant water damages at the [Buyer]'s building. With the same writ, it announced the conversion and demanded avoidance of the contract of sale (act. 9/9). This notice was definitely belated - even if the damage had not been discovered at best not until 5 May 1992. With a saltwater isolation tank where, on the one hand, saline water leaked from it, which thus led to significant water damages to the building but, on the other hand, it was uncertain where the facility was leaking and for this reason the danger of further water leakages could not be eliminated, the time to notify has to be assessed as short. For this reason, the [Buyer] lost all remedies for the alleged defects (v. Caemmerer / Schlechtriem, l.c., Art. 39 N 30). An avoidance of the contract because of the asserted leakages is out of question.

            d. The [Buyer] alleges that it notified of the defects repeatedly and timely by telephone (prot. p. 13, 23, 29); however, the [Seller] in turn denies this (prot. p. 34 f). The CISG does not contain special rules about the allocation of the burden of proof; according to general principles, it is the buyer who has to prove the defectiveness as well as the timeliness of the notice (Tanno, l.c., p. 290 f; v.Caemmerer / Schlechtriem, l.c., Art. 43 N 12). Only alleged (relevant and contradicted by the opposing party) facts have to be adduced; where the "negotiation maxim" applies, a missing submission equals a nonproven submission (compare Kummer, Berner Kommentar, Bd. I/1, Einleitung, Bern 1962, N 39 at Art. 8 ZGB). In doing so, it is the one who maintains a relevant fact who has to demonstrate it not only superficially but capaciously and precisely, so that proof can be taken about it (Vogel, Grundriss des Zivilprozessrechts, 3d ed., Bern 1992, p. 233). Consequently, the party on whom the burden of allegation lies has in addition the burden to substantiate it.

On the occasion of the main negotiation of 7 February 1994, the [Buyer]'s representative was questioned in this regard when and from whom the alleged telephone complaint was made (prot. p. 39). Since the [Buyer]'s representative could not answer this question, it is thus appropriate to turn to the already meantioned written documents, particularly to the writ of 29 May 1992. But this was filed belatedly, for which reason - as already mentioned - the complaint because of the alleged leakage has no effect.

Incidentally, this should not be regarded as a fundamental breach pursuant to Art. 49 CISG because it could have been easily corrected according to the expertise presented by the [Buyer] (compare act. 32/2), whereby it would lack another condition of the avoidance of the contract under the CISG. But this question can be left unanswered when the above-mentioned circumstances are taken into account.

            e. In a second point, the [Buyer] claims avoidance because of the unfeasibilty of the room in which the tank was installed (act. 17 p. 19). The room should conceivably be regarded as improper for such a facility; the installation of a saltwater isolation tank on the first floor of a house, in a room equipped with parquet floor in the way in which it was come across, should not be regarded as state-of-the-art (act. 17 p. 13 f, prot. p. 24 f). It should solely be the [Seller] who accounts for the failure to comply with the rules when the facility was installed in this room (act. 17 p. 13 f, prot. p. 25). In addition, it should have been the [Seller] who did not allude to the necessary adjustments to be done insistently enough (prot. p. 26).

Basically, one could wonder whether an at best improper room can result in the conversion of a facility since the mentioned defect is not up to the facility itself because it is by all means functional. But, in this case, this question can be left unaswered because the objection as to the room was also carried out too late.

That occurred for the first time on record in the counterstatement of 3 May 1993 (act 17 p. 19); which is belated on the record. The [Buyer] should have already observed this much earlier and thereafter rebuked this. [Buyer] learned of the size of the facility and its functionality from the prospectus (act. 9/2) and from the [Seller]'s offer (act. 9/3) and it knew about the difficulty with the room since the installation of the facility on 10/11 April 1992 or, as the case may be, since the invoice of 12 April 1992 (act. 9/4); but not later than since the beginning of June 1992 (act. 9/10). Nevertheless, up to 3 May 1993 the [Buyer] never notified nor referred to these alleged "defects". Incidentally, it is obvious that a relatively small room with a parquet floor on the first floor is hardly suitable for a facility filled with water. There is no need for an expertise to have this established (compare prot. p. 30). After all, the (home-) architect took part in the installation of the facility in the mentioned room and should have protested against this. To put forward this defect during the litigation is in any event too late.

It should be pointed out - in regard to the fundamentality of the breach - that the room, as said, generally does not prevent the facility or as the case may be, its installation and use, but requires an exercise with reasonable care (particularly with regard to the sensitive parquet floor, too). According to the '"expertise Ostendorf" presented by the [Buyer] it would have been possible without major difficulties to arrange the compact unit approx. 2-3 meters distant to a different position, in order that the necessary cleaning and maintenance work could have been undertaken easier (act. 32/2 p. 3). It would have been possibly trouble-free as well, to have positioned the compact pump-, filter-, disinfection- and irradiation-facility into a trough, made of high-grade steel, in order to prevent the leaking liquid from reaching the parquet floor, which can hardly be avoided when maintenance work is done (e.g., process of de-aeration) (act. 32/2 p. 3).

       4. With its subsidiary request or, as the case may be, the sub-subsidiary request, the [Buyer] applies for analogously a subsequent improvement (compare cypher 3 of the counterclaim request). Concerning this matter, that which has already been stated counts: if the buyer does not notify breaches of the contract to the seller in time or if the buyer completely refrains from notifying the seller, the buyer completely loses all remedies in respect of the breach (v.Caemmerer / Schlechtriem, l.c., Art. 39 N 30). Because - as shown - the [Buyer] did not notify of the lack of conformity in time, the subsidiary request proves to be unfounded, too. In regard to the compensation for "loss of the possibility to use", applied for under the same cypher, this was insufficiently substantiated. Although the [Buyer] was - on the occasion of the consultant's audience of 19 October 1993 - formally requested on the part of the court to demonstrate the actual basis of its request for adjudication of a compensation for the loss of the possibility to use (prot. p. 16), she did not speak out on this issue in its rejoinder and counterclaim replication.

      5. [Buyer's counterclaim: improper installation; notice issues; standing to sue]

            a. The [Buyer] desires indemnity in the amount of 7,209.24 DM for the water damage sustained (act. 17 p. 8 et seq., prot. p. 23 f).

            b. Also regarding the consequential damages, the CISG applies and it supercedes the Swiss and German law (v.Caemmerer / Schlechtriem, l.c., Art. 5 N 8 et seq.). Pursuant to Art. 45(l)(b) CISG, the buyer may claim damages as provided in articles 74 to 77 if the seller fails to perform any of its obligations under the contract. This liability of the seller covers all cases of default, in particular defective performance, and the actual consequential harm caused by defects (OR-Honsell, Art. 209 N 11; v.Caemmerer / Schlechtriem, l.c., Art. 5 N 9). Since, at hand, the goods sold (saltwater isolation tank) were defective or incorrectly installed, water leaked, which in turn caused the alleged damage. Claims for damages because of damages to property (personal injuries are excluded from the CISG, compare Art. 5 CISG), which resulted from a defect in a product, can only be claimed under the CISG after a timely notice (v.Caemmerer / Schlechtriem, l.c., Art. 5 N 11). For this reason, it is to be recorded - based on the above made considerations (cypher 2.c. and d.) - that the [Buyer], by missing the time to notify, also lost the right to claim for the damages suffered.

            c. Even if the [Buyer] had kept the term, this would raise the question whether the [Buyer] sufficiently adhered to its incumbent inspection duties. By all means, these are not satisfied by simply looking at the facility and wiping the borders. It is also assumed that by a timely inspection, the water outflow would have been observed and that such a damage would not have emerged, because it can be presumed that it takes some time until leaked water penetrates a ceiling. It has to be checked, whether the insufficient inspection - the [Buyer] itself does not claim to have scrutinized the device periodically - would effect the interruption of the causal connection and so would ultimately result in the omission of a condition to liability. Moreover, in regard of the claimed extent of the damage, it has to be noted that for the time being only calculations are available (compare act. 18/9-12; the defects have apparently not been adjusted to date, compare prot. p. 39) and one calculation merely contains a contingent position of over 1,500 DM (act. 18/9), in respect of which it is not clear whether it will be realized at all. But this all can be left unanswered as the [Buyer] - as stated above - has lost its claim for damages because of the belated notice.

            d. Another problem is posed in connection with the [Buyer]'s right to sue. By writing of 29 May 1992, [Buyer] itself points out that for the "settlement of the claim" it contacted its insurance company, which will cover the claim in the first instance. Furthermore, the [Buyer] states that the insurance company will subrogate against the [Seller] by all means (act. 9/9). So the [Buyer] negated its right to sue itself; that is why its request for damages of 7,209.24 DM has to be dismissed. However, on the occasion of the consultant's audience of 19 October 1993, the [Buyer] alleged that the insurance company refused to cover the claim or, as the case may be, did not step in for the claim (prot. p. 7 and 11) and in order to prove this it handed in an expert writing addressed to the insurance company (act. 32/2). But the mentioned writing does not show an obvious refusal by the insurance company itself; it is rather a matter of an expert report sent to the insurance company. As the [Buyer]'s right to sue may not exist in respect of the asserted water damage, in principle a procedure of taking evidence would have to be conducted about this. But this can be set aside at hand because the request is to be dismissed because of belated notice.

      6. [Buyer's counterclaim: damages in transit; burden of proof]

            a. Furthermore, the [Buyer] demands for compensation for the damage in transit in the amount of 11,897.25 DM. The damages in the staircase, namely to the banister, on one door and to the wall (act. 17 p. 6), should have resulted from the inaccurate transport of the saltwater isolation tank inside the [Buyer]'s house. It should be the [Seller] who accounts for the transport up to the installation location, wherefore [Seller] should have to accept this damage (act. 17 p. 6, prot. p. 20 f). The [Seller] should have employed skilled workers to move the saltwater isolation tank (Zügelmäner) but instead took any helpers from the street (prot. p. 21). Concerning the amount of the damages, the [Buyer] says that the house has been completely reconstructed and newly furnished when it moved in in November 1991. The banister should have been brass-plated and sealed. This luxury equipment of the [Buyer]'s realty required the damage-repair to be carried out in the same manner (prot. p. 22). The [Seller], however, denies having caused the alleged damages, alleging that it should be technically impossible that these damages were caused by the white plastic trough, in particular the door should not have been damaged because it had been removed before the transport to prevent damages (act. 26 p. 4). It should not be the [Seller]'s responsibility to account for this damage, because it was not caused - insofar as it actually happened - by the [Seller]'s actions (act. 26 p. 5). Moreover, [Seller] alleges that the total claim of 11,897.25 DM is excessively exorbitant, because the [Buyer] plans a luxury renovation and not the damage-repair (act. 26 p. 6).

            b. At first it is debatable, whether the alleged damages in the staircase are the matter of the results of a "positive breach of contract" (in the sense of the breach of a contractual accessory obligation), or whether it is a matter of non-contractual liability. The first case would fall under the CISG (compare Art. 45(1)(b) CISG; v.Caemmerer / Schlechtriem, l.c., Art. 45 N 57); in the second case, German Public Liabilty Law would apply (Art. 133 (2) IPRG; v.Caemmerer / Schlechtriem, l.c., Art. 74 N 7). According to the [Seller]'s offer, the price was quoted "including delivery of the tank and installation" (act. 9/3): thus the [Seller] took on the installation of the facility and included in that as well is the transport to the place where the facility finally had to be set up. Apparently, also the [Seller] acted on the assumption that transport, setting up of the facility and installation were contractual accessory obligations which [Seller] had to perform in connection with the delivery of the saltwater isolation tank (act. 26 p. 4). The alleged damages arose - as the [Buyer] asserts - in connection with the transport of the saltwater isolation tank within the house and, for this reason, in breach of the [Seller]'s obligation, to set up and install the facility without damaging the [Buyer]. Thus it is a matter of a "positive breach of contract" the consequences of which adapt to the CISG.

            c. Firstly, it has to be stated that the [Buyer] uncontestedly notified of the asserted damage in transit on the same day (prot. p. 9; act. 26 p. 4), and then by writ of 4 May 1992 (act. 9/8) and so did this timely.

            d. The CISG assumes a uniform concept of the breach of contract. It results thereof that it is irrelevant for the seller's obligation to pay damages what kind of breach of duty (principal or accessory obligation) it commits (Ryffel, Die Schadenersatzhaftung des Verkäufers nach dem Wiener Übereinkommen über internationale Warenkaufverträge vom 11. April 1980, Diss. Zürich 1992, p. 26; Honsell, l.c., p. 41). Contrary to the further above discussed avoidance of the contract, the claim for compensation is not dependent on the "quality" of the breach of contract. Any type of breach of contract, unimportant or of which intensity, makes the seller liable for damages (Ryffel, l.c., p. 13; Weber, Vertragsverletzungsfolgen, in: Wiener Kaufrecht, BTJP, Bern 1991, p. 193).

Art. 45 CISG constitutes the [Buyer]'s right to claim damages if the seller fails to perform any of its obligations under the contract; contents and extent of the damages, in turn, are regulated by Arts. 74-77 CISG. The Convention emanates from a system of statutory guarantee-liability. Basis for a liability is alone the instance that the contracting party failed to perform the assumed obligation. Other requirements - particularly the seller's fault - are not required (v.Caemmerer / Schlechtriem, l.c., Art. 45 N 37; Weber, l.c., p. 166; Ryffel, l.c., p. 37). A limitation on this severe objective obligation to compensate is granted to the extent the exemption provided in Art. 79 CISG applies, which can serve a defaulting seller. That exemption is given when the realization of the risk lies outside the defaulting party's sphere of influence, i.e., in case of lack of control of the risk (Weber, l.c., p. 166; v.Caemmerer / Schlechtriem, l.c., Art. 79 N 6). Contrary to Swiss Law, the natural causal connection complies with the CISG regarding the attribution of the damage. The correlative in this regard is the rule of foreseeability mentioned in Art. 74 sentence two CISG, according to which damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which [seller] then knew or ought to have known, as a possible consequence of the breach of contract. (Art. 74 2 CISG; Weber, l.c., p. 198 f; v.Caemmerer / Schlechtriem, l.c., Art. 74 N 1 et seq.; Ryffel, l.c., p. 54 et seq.). Thus the guarantee-liability, regardless of negligence or fault, is limited in scale (Weber, l.c., p. 198). The obligor's guarantee-liability up to the limitation of the risk beyond its control pursuant to Art. 79 CISG and the rule of foreseeability of Art. 74 sentence two CISG correspond to and serve the principle of the limitation of liability according to the proportion of the risk undertaken by the parties in their contract (v.Caemmerer / Schlechtriem, l.c., Art. 74 N 4).

            e. Just as under Swiss law, the burdon of proof for the objective requirements of a claim for damages is on the injured buyer under the CISG, too. According to this, it is [seller] who has to prove the damage and the causality between the breach of contract and the damage as well as the foreseeability of the damage pursuant to Art. 74 sentence two CISG (Ryffel, l.c., p. 60; Weber, l.c., p. 204).

            f. In this case, first of all, the damage itself is contested. The [Seller] contradicts the damage wherefore the [Buyer] has to prove it. Furthermore, it is disputed, too, whether the alleged existing damage was caused by the transport of the saltwater isolation tank; consequently. the causal connection is in dispute. By decision of 17 February 1995, the [Buyer] was therefore ordered to prove the asserted damage and the corresponding causal connection or, as the case may be, to provide its evidence thereton (prot. p. 44 f). The [Buyer] did not comply with this order at the time; as forewarned the providing of evidence was omitted to its detriment. For this reason, the alleged damage and the causal connection remain unproven. Thus, the [Buyer]'s counterclaim has to be dismissed as regards the alleged damage in transit, too.

       7. [Attorneys' fees] Ultimately, the [Buyer] claims for attorneys' fees in the amount of 559.51 DM which it had to pay to Advocate Roggenwald in connection with the assertion of the damage in transit (act. 17 p. 7, act. 9/8). Inasmuch as the amount is indicated and the attorney's intervention was necessary, these costs would be part the destiny of the cost of repair, whereas they would have to be awarded as pre-procedural attorney fees in the scope of the proceedings compensation (exclusively based on the success / defeat concerning the demanded 11,897.15 DM). (Sträuli/ Messmer, Kommentar zur Zürcherischen Zivilprozessordnung, Zürich 1982, N 2 zu Par. 69 ZPO; for the whole problem compare: Gauch, Der Deliktsanspruch des Geschädigten auf Ersatz seiner Anwaltskosten, recht 1994, p. 189 et seq.). Since the [Buyer] - as seen - completely lost concerning the damage in transit it claimed, it has to bear the attorneys' fees of 559.51 DM [Buyer] demanded. Thus, in this regard as well, the [Buyer]'s counterclaim is to be dismissed.

IV. With this outcome of the proceeding, the [Buyer] is liable to pay the costs and to compensate in its entirety ( 64(2) and 68(1) ZPO). Facing the complex and multilayer file material and the relation to international law it is justified to increase the basic fee accordingly. In addition, when the court costs are fixed, the proceeding in front of the single judge in civil matters at the District Court of Zurich is to be taken into account (act. 1).


  1. In approval of [Seller]'s action, the [Buyer] is ordered to pay to the [Seller] 2,784.20 Sfr. together with interest at 10 % since 30 June 1992.

  2. The [Buyer]'s counterclaim is dismissed.

  3. The court fee is fixed at 7,000 Sfr.; the further costs amount to: 841 Sfr. writing fees, 240 Sfr. Citation, 414 Sfr. services of process.

  4. The costs are enjoined to the [Buyer].

  5. The [Buyer] is ordered to pay a litigation compensation of 10,000 Sfr. to the [Seller] (VAT from 1995 included).

  6. Notice in writing to the parties, each on notice of receipt.

  7. Against this adjudication:
    a) within 30 days of its receipt by the court of cassation of the canton Zurich, P.O. Box 8023 Zurich, a cantonal complaint of invalidity pursuant to 281 ZPO can be carried out by a duplicate submission which complies to 288 ZPO;
    b) within 30 days of its receipt by the Commercial Court of the Canton of Zurich, P.O. Box 8023 Zurich, by a submission which complies to Art. 55 OG (Swiss federal law regulating the organization of the federal administration of justice) an appeal to the Swiss Federal Court for infringement of federal law in the meaning of Art. 43 can be lodged.

Commercial Court of the Canton of Zurich
The Vice President
The Secretary


* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Switzerland is referred to as [Seller] and the Defendant of Germany is referred to as [Buyer]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM]; amounts in the currency of Switzerland (Swiss francs) are indicated as [Sfr.].

** Stefan Dietrich, Dipl. iur University of Bochum, took part in the University of London LL.M. program (2004/2005). His fields of law are International Commercial Law and Corporate Law. Articled clerk with the Higher Regional Court (OLG) Hamm (effective January 2006).

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