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Germany 9 July 1998 Appellate Court Dresden (Terry cloth case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/980709g1.html]

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

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Case identification

DATE OF DECISIONS: 19980709 (9 July 1998)


TRIBUNAL: OLG Dresden [OLG = Oberlandesgericht = Provincial Court of Appeal]

JUDGE(S): Unavailable


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

CASE HISTORY:1st instance LG Leipzig (6 HKO 3046/97) 23 January 1998 [affirmed]

SELLER'S COUNTRY: Turkey [plaintiff]

BUYER'S COUNTRY: Germany [defendant]

GOODS INVOLVED: Terry cloth towelling (bath robes and beach towels)

Case abstract

GERMANY: Oberlandesgericht Dresden 9 July 1998

Case law on UNCITRAL texts (CLOUT) abstract no. 347

Reproduced with permission from UNCITRAL

A Turkish seller, the plaintiff, and a German buyer, the defendant, came to an agreement about the delivery of textiles. Later, the buyer demanded reduction of the purchase price in the amount of a penalty agreed upon under a previous agreement. The seller did not answer the buyer's request. It delivered the textiles and sued the buyer for the purchase price. The lower court granted the seller's claim and gave no effect to the reduction of the purchase price by the buyer.

The court of appeal confirmed this judgement. It held that the seller did not consent to the buyer's reduction of the purchase price. The buyer did not prove that there was a usage known in international trade whereupon silence to a commercial letter of confirmation amounted to consent (Article 9 CISG).

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Classification of issues present

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


Key CISG provisions at issue: Articles 9 ; 18(a)

Classification of issues using UNCITRAL classification code numbers:

9A ; 9B [International usages ; Practices established by the parties];

18A3 [Criteria for acceptance of offer: silence or inactivity does not in itself amount to acceptance]

Descriptors: Acceptance of offer ; Usages and practices ; Commercial letters of confirmation ; Set-off

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Editorial remarks

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Citations to other abstracts, texts and commentaries


English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=502&step=Abstract>


Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/559.htm; [February 2001] Internationales Handelsrecht (IHR): Zeitschrift für die wirtschaftsrechtliche Praxis 18-19; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=502&step=FullText>

Translation (English): Text presented below


English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 346; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 9 paras. 4, 20

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Case text (English translation)

Queen Mary Case Translation Programme

Appellate Court (Oberlandesgericht) Dresden 9 July 1998

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

Translation edited by Camilla Baasch Andersen [***]


The parties are in disagreement over the balance of the purchase price for a delivery of terry cloth towelling (bathrobes and beach towels).

The facts of the case are related at length in the judgment of the Court of First Instance. The following is a short summary:

With [buyer]'s order of 3 January 1996, no. 5125, [buyer] ordered beach towels at a price of DM [Deutsche Mark] 5.95 apiece from [seller] in D. [Turkey]. The entire order amounted to DM 442,680.-, with a fixed delivery date of 13 to 15 May 1996 to R. [Germany]. With a further order of 9 April 1996, no. 5159, [buyer] requested bathrobes in the amount of DM 192,500.-, to be delivered at the fixed date 31 May 1996 to R. [Germany]. The second order was acknowledged by [seller] with the remark: "We confirm the date end of May ex D."

Both orders contained the following clause for payment: "CAD 60 days draft from the CMR date, delivery CIF R.". In the event of late delivery, the order provided for a penalty of "25% of the value of the order".

[Seller]'s deliveries reached the [buyer] in the period between 20 May 1996 and 19 June 1996.

The parties had agreed on CAD - this obligates the seller to perform in advance, with the buyer obligated to pay the price against documents without examining the goods (cf. Baumbach/Hueck, HGB,[*] 29th ed., 326 n. 5). Nevertheless, [buyer]'s employees unloaded the goods without the documents having been produced (insofar the Court of First Instance issued a declaratory judgment). [Buyer] claims that this had been agreed with the [seller].

The parties are in dispute as to:

(1) Whether they agreed on a higher purchase price of 6.95 DM apiece for the beach towels in a conversation on 15 January 1996, thereby taking into account old debts accumulated by several companies held by [buyer]'s managing shareholder;

(2) Whether the contractual penalty had arisen, especially whether [buyer] reserved its right to claim the contractual penalty after the goods had been delivered, or whether - as [buyer] contends - [seller] waived the requirement of a such a reservation, and whether therefore a set-off can be declared in the dispute at hand.

The Court of First Instance granted the [seller]'s claim after the hearing of evidence. It held that the increase of the purchase price had been proven and that the [buyer]'s right to the contractual penalty had not arisen because [buyer] failed to reserve its rights.

[Buyer] has essentially not submitted any new facts with its appeal.

In [buyer]'s response to [seller]'s reply to the appeal, [buyer] now submits with respect to the agreed purchase price that [seller] sent [buyer] back the stamped and signed order with a fax of 30 January 1996. [Buyer] further submits that it again sent a letter on 28 June 1996 "for the attention of" the [seller] in which [buyer] asked for payment of the penalty. As [seller] was silent to that demand, [buyer] maintains that [seller] silently accepted it.

With respect to the contractual penalty, [buyer] again refers to the testimony of witness H., who testified that [buyer] had "declared that the penalty might be claimed" from the date of 15 May 1996 until all the goods had been delivered (undisputedly the goods were delivered in instalments). Furthermore [buyer] submits that [seller] had accepted previous penalties that had arisen out of previous contracts containing a conventional penalty clause for late delivery (substantiated with alleged proof of late delivery contracts).

With respect to [buyer]'s further pleadings on appeal, we refer to its briefs of 14 April 1998 and 18 June 1998.

[Buyer] asks the Court to reverse the default judgment of 21 May 1997 and the judgment of 23 January 1998 and to dismiss the claim.

[Seller] asks the Court to dismiss the appeal.

[Seller] defends the findings of the Court of First Instance as well as its pleadings with respect to the contractual penalty.

While [buyer] holds that [seller] was silent in response to [buyer]'s letter of 22 July 1996 and argues that this silence has legal consequences, [seller] points out that the usage of silence to a commercial letter of confirmation amounting to consent is unknown in international trade.

With respect to [seller]'s further pleadings, we refer to its brief of 28 May 1998.


The appeal is dismissed.

1.  The Court of First Instance correctly held that according to its taking of evidence the parties agreed (contrary to the order of 3 January 1996) to raise the purchase price for the beach towels from DM 5.95 apiece to DM 6.95 apiece, due to old debts accrued by companies connected to the [buyer].

The Court of First Instance carefully weighed the testimony of the witnesses for both sides and gave good grounds for its conclusion.

While the arrangement of the parties may have been unusual, it matches the unusual picture of the contractual relations between the [seller] and the [buyer] with several connected companies (as can be inferred, for example, from the correspondence with respect to other business deals - cf. attachment K9 with the heading "coordination of the accounts of all companies").

The Court does not agree with [buyer]'s argument that the arrangement would have had to be in writing. There is no such legal requirement, and there is no indication that the parties had agreed on a requirement for written form - especially in view of the unusual contractual relations between the parties that has been explained above.

Nor is the [buyer]'s analysis with respect to the exchange of faxes referring to the orders of 3 January 1996 and 9 April 1996 convincing. [Buyer] points out that the order of 3 January 1996 had been confirmed with a fax of 30 January 1996 referring to the price of DM 5.95. Therefore, [buyer] concludes that a price of DM 6.95 = DM 5.95 + DM 1.00 could not have been agreed to in mid-January.

This, however, is not compelling. The written confirmation of the order could also have been made with respect to the further conditions of the contract, whereas the [seller] was relying on the fact that under the oral agreement (an additional DM 1.00 apiece) continued to exist.

Whereas [buyer] submits that [seller] was silent in response to the confirmation of order by fax and to the letter of 28 June 1996, the following has to be pointed out: Apparently [buyer] tries to establish a usage known in international trade whereupon silence to a commercial letter of confirmation amounts to consent (cf. Art. 9 CISG). However, [buyer] has neither explained such an alleged trade usage in detail, nor proven it (as might have been done through evidence given by the International Chamber of Commerce or similar body; cf. v. Caemmerer/Schlechtriem, UN-Kaufrecht, Art. 9 CISG n. 13).

The Court of First Instance furthermore correctly held that the [buyer] cannot set-off the allegedly forfeited penalty against the payment of the price because the parties agreed on contract terms with the clause "cash against documents". According to the relevant legal precedents established by the BGH [Bundesgerichtshof (Federal Supreme Court of Germany)], this clause excludes the possibility of a set-off (cf. BGH NJW [*] 1985, 555).

[Buyer]'s claim that the [seller] waived its right to rely on the fact that [buyer] failed to reserve its right to claim the penalty is therefore irrelevant. Furthermore, the taking of evidence has not substantiated this claim.



* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Turkey 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: HGB = Handelsgesetzbuch [German Commercial Code]; NJW = Neue Juristische Wochenschrift [pre-eminent German law journal].

** 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.

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