Source: http://cisgw3.law.pace.edu/cases/951219s1.html
Timestamp: 2019-04-22 18:53:33+00:00

Document:
A Swiss plaintiff, distributor of an Austrian manufacturer, sued a Swiss buyer, defendant, for payment of goods supplied by the manufacturer. The buyer sought to set-off this claim with a claim for damages which allegedly arose from later supplies that had no longer been forthcoming after the manufacturer had been declared insolvent. The buyer challenged the plaintiff's right to sue as a proper party since the sales agreement had been concluded with the manufacturer. Offer and acceptance were exchanged between the buyer and the manufacturer, while use was made of the letterhead of the manufacturer.
The court held that the CISG does not contain rules on agency agreements. However, with a view to establishing the contracting parties to the specific sales agreement -- in accordance with article 14 CISG, which deals with the offer -- the agency issue could be ignored.
The court interpreted the declarations of the parties upon conclusion of the sales agreement (article 8 CISG), having regard to all relevant circumstances. The court found that the manufacturer's behaviour demonstrated clearly that the manufacturer was meant to become party to the sales agreement, and not the plaintiff (article 14 CISG). However, the plaintiff was entitled to claim the payment of the purchase price, as it had assigned its claims to the manufacturer. The court determined that assignment of claims does not fall within the scope of the CISG. Therefore, the validity of the assignment was held to be governed by Austrian domestic law as applicable under international private law provisions.
1. The action is justified and Defendant-Appellant [Buyer] is ordered to pay Plaintiff-Appellee [Agent of Seller] Swiss francs [Sfr.] 12,424.35 plus 5% interest since 13 September 1993.
2. a) Taking recourse to [Buyer], [Agent of Seller] shall pay Sfr. 1,033 as costs of the action in first instance.
b) [Buyer] shall pay for the litigation fees for the appeal in an amount of Sfr. 1,200.
c) Taking recourse to [Buyer], [Agent of Seller] shall pay Sfr. 800 for the cross-appeal action.
d) [Buyer] is obliged to compensate [Agent of Seller] for the action as a whole with Sfr. 6,000 plus 6.5 % VAT.
[Agent of Seller] is a Swiss enterprise and is listed in the commercial register. It acted as an agent for the [Seller], responsible for the area of Switzerland. Swiss customers -- among them [Buyer] -- who ordered cloth from [Seller], usually received order confirmations, invoices and reminders by [Agent of Seller]. Moreover, they paid the purchase prices at [Agent of Seller]'s bank account. In the course of business relations, there were several deliveries of cloth from [Seller] to [Buyer]. After [Buyer] ordered a certain amount of cloth in 1993 for its summer collection 1994, [Seller] became bankrupt by July 1993.
[Agent of Seller] requested payment of invoices for delivery of goods in the amount of Sfr. 12,424.35. [Buyer] did not contest receipt of those goods. However, [Buyer] alleged that [Seller] was its contracting partner rather than [Agent of Seller]. [Agent of Seller] then commenced an action before the District Court. [Buyer] relied on [Agent of Seller] not being entitled to the claim and, additionally, not having the capacity to sue since it had been de-listed from the commercial register in the meantime. Furthermore, [Buyer] alleged that it was entitled to claims from set-offs in an amount exceeding the sum claimed by [Agent of Seller] as a result of non-performance by [Seller] regarding certain contracts. In contrast, [Agent of Seller] insisted on itself being the contracting party and, in the alternative, asserted that claims had been assigned to it by [Seller] prior to its bankruptcy.
The District Court partially approved the [Seller]'s claim in the amount of Sfr. 10,311.55 plus interest after its procedure taking evidence in regard to the invoices in dispute, which included hearing of witnesses. It substantially held that [Agent of Seller]'s claim was neither founded through an agency relation between [Agent of Seller] and [Seller] nor on it acting as an auxiliary person for [Seller]. However, the Court found that [Seller] had assigned its claims to [Agent of Seller] prior to its bankruptcy, which is possible without form requirements under Austrian law. Only a partial claim of Sfr. 2,112.87 was subject to Swiss law; lacking the necessary instrument of assignment, this claim was not effectively assigned to [Agent of Seller]. Any claims of [Buyer] following from set-offs lacked sufficient substantiation and were therefore not awarded.
[Buyer] appealed against this judgment, requesting dismissal of the action, alternatively, remittal to the District Court for another taking of evidence. [Buyer] argued that it had not been procedurally prepared for [Agent of Seller]'s sudden submission of an assignment of claims by [Seller] to [Agent of Seller]. It further expressly reserved its right to substantiate the claims from set-offs. In view of the set-off claims, a sector-contingent necessity for adhering to the exact delivery dates must be considered. Textiles would be practically worthless if they were delivered only one month late. There were various clothes in the fashion brochure from 1993 for the summer collection 1994 which should have been produced using cloth from [Seller]. After its bankruptcy in summer 1993 [Buyer], could only find substitute suppliers for part of the required cloth. A change of the brochure content was too expensive and thus did not come into consideration. Concerning the business relation with a Munich customer, [Buyer] reached an agreement for payment of DM 13,500 as damages which would render a set-off claim of Sfr. 11,130.75. [Buyer] further alleged that it suffered additional damages of Sfr. 2,184.16, Sfr. 3,402.72 and Sfr. 4,618.60 from non-delivery of various cloths (art. no. 19921074, no. 12731073, no. 50051058 and no. 19921058). This resulted in a total set-off claim of Sfr. 21,336.23.
[Agent of Seller] brought a cross-appeal, requesting payment of Sfr. 12,424.35 plus interest; it claimed another Sfr. 5,340 and Sfr. 6,835.25 as compensation for attorneys' fees for the action in first and second instance. [Agent of Seller] argued that it was party to the contract, rather than [Seller]. It was the one who had issued all order confirmations, invoices and reminders. Although the order in question of 3 May 1993 was confirmed in writing, printed with [Seller]'s letterhead, the Court in first instance ignored the fact that [Agent of Seller]'s complimentary close was used in this letter. The order was invoiced by [Agent of Seller] without any objection on the side of the [Buyer]. This corresponded to common usage between the companies over the years. It must have been a clear accident that the confirmation was printed on the wrong paper. There were no justified claims from set-offs. Finally, the Court in first instance falsely considered [Agent of Seller]'s attorney's bill of 16 June 1994. It ignored the fact that further extensive correspondence as well as participation in the taking of evidence and in the closing hearing was necessary subsequently. A request for appropriate compensation of the attorney's additional efforts was issued by that later date.
[Buyer] seeks dismissal of the [Seller]'s cross-appeal. The volume of the claim awarded by the Court of First Instance must be disallowed for [Agent of Seller] had not suffered any loss. This also held true for the costs of proceedings. [Buyer] assumed an attorney's bill with Sfr. 2,800 as basic charge. Adding extra charge for the taking of evidence led to a maximum compensation of Sfr. 3,920.
d) [Buyer] further argues during the hearing in second instance that the dispute had arisen only for the [Seller]'s bankruptcy. [Agent of Seller] commenced proceedings in 1994. The invoice sum corresponded to [Buyer]'s deliveries, which was a creditor. It was only introduced after commencement of the action that claims had allegedly been assigned. It could remain undecided whether or not any claims were actually assigned. [Buyer]'s possibility for a set-off would endure in the amount as set out in the appellate submission. It held to its counterclaims.
e) [Agent of Seller] adds that the requested compensation included all costs that accrued in the first and second instance of the proceedings. Primarily, [Agent of Seller] was entitled to the claim. Then and today, it was listed in the commercial register, which gave the capacity to sue. [Agent of Seller] sent goods to [Buyer] upon placement of orders. It must be referred to the letter that was addressed to the bankruptcy office. Rather than [Buyer], it was [Agent of Seller] to whom the [Seller]'s assets were credited. [Buyer] had known that all orders were processed and invoiced by [Agent of Seller], meaning that it accepted the particular way of transacting. No other result could be derived from the particular order that was printed on wrong paper. The common usage was evident and lasted for many years; the question of which was party to the contracts was answered at the latest when the invoices were issued. It remained decisive who [Buyer] selected as contracting partner. The contractual relations between [Buyer] and [Agent of Seller] had been practiced for a long time and were continued. [Buyer] could not rely on some mistakable confirmations. [Agent of Seller]'s claim should be approved without consideration of set-offs. [Buyer] could be entitled to damages against [Seller] but not against [Agent of Seller]. Even in case the claims had been assigned, there was no need to verify any set-off. The opponent had taken note of the assignment at the time of invoicing. Basically, the alleged claims from set-offs remained contested by [Agent of Seller].
f) With reference to the cross-appeal, [Buyer] submits that [Agent of Seller] had not possessed a telephone extension, it rather had phone calls redirected to Austria. Furthermore, it did not have any employees throughout the last years and had its mail redirected. Customer calls were conducted by [Seller]'s representatives, who also confirmed the orders.
g) Further submissions of the parties will be referred to in the Court's ruling whenever necessary.
First, it is in dispute whether [Agent of Seller] is capable if appearing in court since it was de-listed from the commercial register in the meantime according to [Buyer]'s submission. Even if failing any demonstration by the parties, the Court must settle the question ex officio (� 94 ZPO [*]).
a) The request for preparation of a mediation hearing was filed on 21 February 1994. The hearing was held on 5 April 1994. [Agent of Seller] was de-listed from the commercial register on 26 August 1994 (SHAB [*] no. 165; exhibit 45). It turned out later that [Agent of Seller] was de-listed by the concerned office itself, however, after initiative part of [Buyer].
b) Under Art. 562 OR [*], partnership businesses have the capacity to sue and to be sued. Even though commercial partnerships are to be listed in the commercial register (Art. 552(2) OR), the entry of the data is merely of a declaratory nature (Meier-Hayoz/Forstmoser, Grundriss des schweizerischen Gesellschaftsrechts, 7th ed., � 9 N 55 et seq.). A business is terminated only by the time of completion of liquidation (BGE [*] 81 II 361). Therefore, the company retains its procedural capacities as long as rights are being claimed against it (Pastalozzi/Wettenschweiler, Kommentar zum Schweizerischen Privatrecht, Obligationenrecht II, Art. 562 OR N 10).
As it is undisputed that [Agent of Seller] was properly registered at the commencement of proceedings and claims have been raised against that party, its capacity to appear in court is sufficiently established. The Court in first instance rightfully allowed the action under these requirements.
2. The Court of First Instance denied [Agent of Seller]'s position as contracting partner on the merits (claim amounting Sfr. 10,311.55). However, it assumed that the claims were validly assigned to [Agent of Seller]. [Buyer] holds to its conclusion that a contractual relation between itself and [Seller] had to be considered.
a) The claim amounting to Sfr. 10,311.55 is based on an offer by [Seller] dated 3 May 1993 for delivery of cloth, 1,080 meters. [Buyer] confirmed the offer by fax on the same day. It is true that [Agent of Seller] appears in the complementary close of the offer, however, [Seller] unambiguously identified itself as sender ([Buyer]'s exhibit 3). All relevant acts of legal significance were exchanged between these parties. Thereafter, [Seller] even addressed a fax dated 1 July 1993 directly to [Buyer]. It responded to an inquiry concerning marketing costs ([Buyer]'s exhibit 2). Furthermore, the documents transmitted between [Seller] and [Agent of Seller] ([Agent of Seller]'s exhibit 8) contain [Seller]'s caption together with final annotations "[Seller], authorized exporter" and "the undersigned, exporter of the goods to which this commercial invoice refers, declares that the goods, unless otherwise specified, fulfil the requirements for obtaining provenience quality with the most convenient traffic of goods to Switzerland and their country of origin is ... (see invoice)". It can be concluded from the witness' testimonies that complaints or notices of non-conformity were either addressed to [Seller] directly or processed through a representative, a company from Zurich.
International sales contracts are governed by the CISG (United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980). Both Austria (signed on 1 January 1989) and Switzerland (signed on 1 March 1991) are member states to the CISG. Yet, the CISG does not contain rules on agency nor does it essentially refer to the possibility of an assignment of claims. According to the express reference provided by Art. 7(2) CISG, these questions are to be settled under the domestic law applicable by means of conflicts of laws rules (von Caemmerer/Schlechtriem, Kommentar zum einheitlichen UN-Kaufrecht, Vorbem. zu Art. 14-24 CISG N 3, Art. 4 N 23). The Geneva Convention on Agency in the International Sale of Goods of 11 February 1983 does contain unified law on agents acting without authority, however, it still lacks the necessary count of ratifying countries. The Hague Convention on the Law Applicable to Agency of 14 March 1978 provides a relevant set of conflicts rules but has not come into force yet. There are no transnational provisions on this question.
c) The Court of First Instance rightfully points out that neither the said offer nor its acceptance of 3 May 1993 contain any hints to a stipulated agency relation. The existence of an agency and its possible extent to external relationships between the principal and a third party (here [Seller] and [Buyer]) is, however, not to be determined according to OR [*], as the Court of First Instance assumed. Instead, it follows conflict of laws rules and their relevant connecting factors. Consequently and under the conflicts rule of Art. 126(2) IPRG [*], its objective connection led to the application of Swiss law for agency because the alleged agent has its residence there. This, however, is valid only insofar as the question does not in itself fall within the scope of application of the CISG, which is applied through conflict of laws rules and requires an autonomous interpretation.
Art. 8 CISG provides rules for interpretation of parties' statements and conduct during a contract's conclusion while Arts. 14 et seq. CISG contain rules for offer and acceptance. In case the transaction already fits into the contractual mechanism of offer and acceptance as ruled by the CISG, then there will be no application of the Swiss Code on the Law of Obligations either to this matter or to the question of agency.
According to Art. 14(1) CISG, a proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.
[Seller]'s fax dated 3 May 1993 fulfils all of these requirements by indicating the supposed contracting partner ([Buyer]), the goods, price, quantity and date of delivery. It also unmistakably indicates the offeror. Not only does the name of the [Seller] appear on the letterhead as addresser, but it expressly asks for the confirmation of the order and its conditions. The writing therefore refers to fax and phone numbers which are obviously those of the [Seller]. [Buyer] sent its confirmation to [Seller] through these numbers ([Buyer]'s exhibit 3). The statement's objective intention, which is solely relevant under Art. 14(1) CISG (von Caemmerer/Schlechtriem, Art. 14 CISG N 13), leads straight to [Seller] as the contracting partner. That means there is no need for a special statute on agency. It is not submitted that [Seller] -- in relation to [Agent of Seller] -- might not have been allowed to directly contract with third parties. Furthermore, the parties did not assert that any formal notice of the agency was ever given to external relationships.
Determining the intent of the parties by interpretation under Art. 8 CISG further corroborates the position of [Seller] as contracting partner. For interpreting the relevant declaration of intent, it must be looked to how the addressee had to understand it with consideration to common usage and under the aspect of good faith. [Buyer] could reasonably assume that [Seller], being producer of the cloth and the only contact person, was party to the contract. If any doubts remained, the actual conduct would determine the declaration's content. This, once again, qualifies [Seller] as the contracting partner. [Buyer] can rightfully rely on the fact that any correspondence in cases of breach of contractual obligations, namely complaints and notices of non-conformity, were exchanged with [Seller] at all times (witness testimony 5.3). The Court of First Instance ruled properly in this regard. Furthermore, [Seller] dealt with the question of awarding grants for marketing expenses ([Buyer]'s exhibit 4). According to accepted common notion set out above, it was right for [Buyer] to assume that contracts were concluded with [Seller]. When determining the parties involved in these contracts, it is irrelevant to consider that payment was handled by way of [Agent of Seller].
The Court of First Instance approved the assignment of the claim worth Sfr. 10,311.55 according to invoice dated 28 May 1993 ([Agent of Seller]'s exhibit 2). [Buyer] does not seriously object to this any longer.
The CISG does not provide rules concerning assignment of claims (von Caemmerer/Schlechtriem, Art. 4 CISG N 23). This matter is resolved under domestic conflict of laws rules. As provided by Art. 145 IPRG [*], failing a choice of law, the assignment is governed by the law applicable to the claim being subject to the assignment. All questions concerning existence and extent of the claim assigned are settled by the applicable domestic law (Kaller/Girsberger, Kommentar IPRG, Art. 145 IPRG N 29). However, Art. 145(3) IPRG provides for applicability of the law governing the assignment contract to determine the necessary formalities.
Since claims were assigned by [Seller] to [Agent of Seller], formalities are governed by Austrian law. It must be assumed that claims were continuously assigned to [Agent of Seller], although there is no corresponding evidence in writing (but see witness testimony 5.3).
Austrian law is familiar to both the special type of collection assignment and the type of a tacit assignment, which means the debtor need not be informed (Roziol/Walser, Grundriss des bürgerlichen Rechts, vol. I: Allg. Teil und Schuldrecht, Vienna 1992, pp. 296 et seq.). Other than under Swiss law, assignments under �� 1392 et seq. ABGB [*] need not be made in writing; oral declarations are sufficient. Therefore, claims were effectively assigned in favor of [Agent of Seller]. Since the debtor need not be informed about an assignment (�� 1395 et seq. ABGB), it can remain undecided whether it constituted a notification of the assignment when [Agent of Seller] simply issued the invoices containing its own bank coordinates. It is only relevant that claims were effectively assigned, so that [Agent of Seller] is entitled to seek payment.
f) Therefore, the Court of First Instance properly concluded that [Agent of Seller] was entitled to Sfr. 10,311.55 because the assignment's formalities were governed by Austrian law which does not require written form.
The Court of First Instance did not approve [Agent of Seller]'s claim in an amount of Sfr. 2,112.87 based on Swiss law. With its cross-appeal, [Agent of Seller] seeks this sum to be awarded, as well.
a) The fact that the contract on which the claim is based was negotiated between the parties through [Agent of Seller] as agent let the Court of First Instance to assume that [Agent of Seller] was a commercial agency. This holds true in view of the evidence taken.
Yet, the status of [Agent of Seller] as agent does not in itself lead to the application of Swiss law on assignments. It is true that the Hague Convention on the Law Applicable to International Sales of Goods of 15 June 1955, upon which the Court of First Instance relied, provides in Art. 3(2) for a particular connection to the purchaser's habitual residence or establishment. Art. 118 IPRG [*] expressly refers to the application of the Hague Convention. It is applicable in terms of territory if the forum is a member state, which does not apply for Austria, but for Switzerland. In that respect, the Hague Convention displaces the autonomous conflict of laws rules (Keller/Kren Kostkiewicz, Kommentar IPRG, Art. 118 IPRG 11 5). However, the arranged connection does not preclude a special connection in certain affairs (Keller/Kren Kostkiewicz, Kommentar IPRG, Art. 118 IPRG N 19 et seq.). Moreover, Art. 3(2) Hague Convention can hardly be understood today as a concept of a universally accepted conflict of laws rule; it has already faced considerable criticism (Schnitzar, Funktionelle Anknüpfung im internationalen Vertragsrecht, Festschrift Wilbaln' Schananberger, Freiburg 1968, p. 393; Vischer, Das Haager Abkommen ..., in: SJIR [*] XI/1964, pp. 63 et seq.).
A restrictive interpretation is even more appropriate, as the mere connection by way of the sales contract cannot force its extension to independent institutions like assignment that are not founded on particular rules of sales law. Especially the fact that assignment and similar institutions of the law of obligations are excluded from the scope of the CISG prohibit interpretation of Art. 3(2) as a broadly-applicable conflict rule.
Applying the assignment of claims from sales contracts strictly under Art. 3(2) Hague Convention is not appropriate, even in the context of this dispute. The way in which claims were assigned to the [Agent of Seller] remained always the same. Neither the result nor any intention of the parties calls for a dependency of the assignment's validity on its conclusion by way of an agent. Assuming that all of [Seller]'s claims against its international customers were to be assigned, results would arbitrarily differ between each country and each form of assignment. Therefore, it must be reasonably held that there is a unified statute of assignment contracts. This even embodies an implied choice between [Seller] and [Agent of Seller] in favor of Austrian law for the formalities (Art. 145(3) IPRG [*]) in order to eliminate any invalidity caused by a lack of form.
c) Consequently, assignment of claims worth Sfr. 2,112.87 must be judged in accordance with Austrian law. The assignment is valid and leads to an additional claim of [Agent of Seller] against [Buyer]. Failing a written stipulation does not hinder effective assignment under Austrian law.
[Buyer] asserts the existence of certain claims in order to achieve a set-off. These claims were substantiated during the proceedings in second instance. [Agent of Seller] contests the claims both on the merits and in their amount.
The assignment as such -- subject to the special connection for formalities explained above -- is governed by the statute of the claim as long as the parties have not made a choice of law (Art. 145(1)(1)(2) IPRG [*]. According to Art. 118 IPRG in conjunction with Art. 3 Hague Convention, the conflicts rules connection lead to the seller's law (Art. 3(1)), or the buyer's law in case the order was received by an agent (Art. 3(2)). The validity of the assignment under the applicable law does also affect the question whether and, if yes, to which extent the debtor will be allowed to set-off the assigned claim with those of its own (Keller/Girsberger, Art. 145 IPRG N 29).
b) The statute governing the claim leads to Austrian law with respect to the invoice of Sfr. 10,311.55 because the sales contract was directly concluded between [Seller] and [Buyer]. The residual claim of Sfr. 2,112.87 is however governed by Swiss law: The contract's conclusion by way of the agent calls for a conflict of laws connection towards the buyer's residence (Art. 118 IPRG [*] in conjunction with Art. 3(2) Hague Convention). International bodies of law as the CISG or the Hague Convention do not regulate the possibility of a set-off against counterclaims. Therefore, domestic law must be applied in accordance with rules of private international law. A separation of applicable law to the contract is irrelevant as long as both jurisdictions lead to the same result as to the claims from set-offs.
Any claims from set-offs -- if existing, at all -- are addressed primarily against [Seller] as the debtor. [Buyer] relies on non-performance of the sales contracts by its supplier. If Swiss law was applicable, a right to set-off against counterclaims would be allowed, however, in a restricted manner. Art. 169(1) OR [*] provides that a claim is transferred to the assignee when such claim was burdened with the possibility to set-off against the assignor. Yet, the possibility to set off is impeded if the debtor's counterclaims afterwards become due as the assigned claim (Art. 169(2) OR).
Even though this means a discrimination of the debtor in comparison to general rules on set-offs, the express wording of the provisions do not allow for a different interpretation (Guhl/Marz/Koller, Schweizerisches Obligationenrecht, 8th ed., p. 255; von Tuhr/Eschar, Schweizerisches Obligationenrecht allg. Teil, vol. II, pp. 367 et seq.). Austrian law leads to similar results for the present matter. After a claim has been assigned, the debtor can set-off against the assignee even with claims it holds against the assignor, which had accrued prior to the assignment (Koziol/Welser, p. 279, with reference to OGH [*] judicature).
In the present case, account no. 16748 (Sfr. 10,311.50) bears the date of invoicing 28 May 1993 and a time for payment of not more than 30 days ([Agent of Seller]'s exhibit 2). The same applies to further accounts worth Sfr. 2,112.87 (dated 17 May, 2 June, 7 June, 14 June, 6 July and 14 July 1993; [Agent of Seller]'s exhibit 2). [Buyer] substantiates that its right to set-off arose from claims for damages because of late or non-delivery. This referred to cloth that was intended to be used for the summer collection 1994 and which ought to have been delivered in fall 1993/94. Should Swiss law be applicable, it is lacking concurrent maturity of claim and counterclaim. Should Austrian law be applicable, it is lacking accrual of the claim on the merits until notification, which was made by [Agent of Seller] through the invoicing. Therefore, [Buyer] cannot rightfully rely on a set-off against assigned claims; a further assessment as regards the value of claims is not necessary.
e) The interest rate for default and the relevant period was not sufficiently contested.
The appeal is thus unjustified. [Buyer] is not only obliged to pay [Agent of Seller] Sfr. 10,311.55 as awarded by the Court of First Instance, but Sfr. 12,424.35. The cross-appeal is justified. It is not relevant that [Agent of Seller] may have expressed itself a bit misleadingly in its procedural request for relief. It must be interpreted according to its objective content and under the general principle of good faith (BGE [*] 105 II 152; Vogel, Grundriss des Zivilprozessrechts, � 1 N 79 et seq.). According to objective interpretation, [Agent of Seller] did not seek anything else but dismissal of the appeal and award of the residual claim of Sfr. 2,112.87 by way of a cross-appeal. This was clearly articulated in its rejoinder. It is self-explanatory from the request that it did not want to be awarded the sum of Sfr. 10,311.55 -- which the Court of First Instance had already awarded -- once again. Correspondingly, dismissing the cross-appeal and burdening [Agent of Seller] with costs and expenses would be a case of excessive formality.
[Agent of Seller] argues that the Court of First Instance was wrong in gearing to the attorneys' bill issued during main negotiations. The attorneys' further efforts in the present dispute were not considered.
a) � 75(1) ZPO [*] provides that the losing party will be obliged to pay for all costs and expenses suffered by the prevailing party, if so requested. It is undisputed that [Agent of Seller]'s attorney submitted a bill during the main negotiations, however it failed to submit an amended bill after the taking of evidence. Moreover, there is no hint to any closing hearing from within the record.
b) According to common practice it is sufficient under � 75 ZPO to request that "costs and expenses should be borne by the other party". In this respect, there is need for an interpretation of the request according to good faith. It would have been a duty for the Court of First Instance to consider the [Agent of Seller]'s attorney's efforts after the main negotiations.
However, the submitted bill is not to be compensated in total: The position "bonus for submission of evidence and cash expenditures" requires a reduction in accordance with �� 2 and 3(a) AT [*]. These positions need to be assessed at Sfr. 1,400 (50% of basic charge), respectively Sfr. 400 including the proceedings in second instance. A total compensation for proceedings in both first and second instance is appropriate in the amount of Sfr. 6,000 plus VAT.
c) Following from the outcome of proceedings, [Buyer] bears the costs for the Court's ruling in second instance. [Agent of Seller] has the opportunity to charge [Buyer] for the costs required in order to conduct the cross-appeal.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Appellant and Cross-Appellee of Switzerland is referred to as [Buyer] and Appellee and Cross-Appellant of Switzerland is referred to as [Agent of Seller]. The Austrian manufacturer of cloth is referred to as [Seller]. Amounts in the currency of Switzerland (Swiss francs) are indicated as [Sfr.]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM].
Translator's note on other abbreviations: ABGB = Allgemeines Bürgerliches Gesetzbuch [Austrian Civil Code]; AT = Anwaltstarif des Kantons Thurgau [Law on Assessment of Attorney's Fees of the Canton of Thurgau]; BGE = Bundesgerichtsentscheidung [Collected decision of the Swiss Federal Supreme Court]; IPRG = Bundesgesetz über das Internationale Privatrecht [Swiss Code on the Conflict of Laws]; OGH = Oberster Gerichtshof [Austrian Federal Supreme Court]; OR = Obligationenrecht [Swiss Code on the Law of Obligations]; SHAB = Schweizerisches Handelsamtsblatt [Swiss Official Gazette of Commerce]; SJIR = Schweizerisches Jahrbuch für Internationales Recht [Swiss Journal on International Law]; ZPO = Zivilprozessordnung des Kantons Thurgau [Code of Civil Procedure of the Canton of Thurgau].
** 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.

References: Art. 562
 Art. 562
 Art. 7
 Art. 14
 Art. 4
 Art. 126

Art. 8
 Art. 14
 Art. 14
 Art. 14
 Art. 8
 Art. 4
 Art. 145
 Art. 145
 Art. 145
 Art. 3
 Art. 118
 Art. 118
 Art. 118
 Art. 3
 Art. 3
 Art. 3
 Art. 118
 Art. 3
 Art. 145
 Art. 3
 Art. 169