Source: http://cisgw3.law.pace.edu/cases/951205s1.html
Timestamp: 2019-04-23 14:07:28+00:00

Document:
A German seller, plaintiff, sued a Swiss buyer, defendant, for payment of the purchase price of equipment. The buyer denied having actually become party to the purchase contract; instead, the buyer contended that the seller had concluded the contract with its German sister company.
The court found that the unsigned buyer's fax ordering the equipment constituted a proposal for concluding a contract with the seller, as it was sufficiently definite (article 14(1) CISG). Although it did not contain all the elements of a contract, it clearly expressed the buyer's binding intention to purchase the equipment. A signature was not necessary because a sales contract is not subject to any requirement as to form (Article 11 CISG). The court interpreted all relevant circumstances in connection with the conclusion of the contract, and held that the seller unequivocally supposed that the buyer and not the buyer's German sister company, was its contractual counterpart, and thus it was liable to pay the purchase price.
1. The Plaintiff [Seller], a limited liability company (GmbH) established under German law, operates the distribution of CAD-CAM periphery equipment (hardware) and EDP accessories; [...] is the sole personally liable shareholder and director of [Seller] (claim. ex. 3).
According to the commercial register excerpt dated 1 July 1994, the Defendant [Buyer] is a publicly listed company located in [...] (apparently, [Buyer] has since been relocated), whose business is designing the cut of surface materials, in particular for the textile industry (claim. ex. 2).
On 3 December 1991, company [...] received a fax for an order of three PMC blade plotters, to be sent to various delivery addresses, with an immediate delivery date. [...] (the [Buyer]) was named as the sender and the following note was made: '[...] ___ Telefax, From: [...]'. At the same time, the party ordering requested that a plotter directory be sent 'to our address in St. Gallen' (claim. ex. 5). According to the statements of the [Seller], [...] from [...] communicated to [...] from the [Buyer], on the basis of a telephone enquiry, that, owing to contractual commitments, it was not in a position to undertake deliveries outside Germany, upon which it was agreed to formally complete the transaction through [...] in Constance and to deliver the plotters intended for England to its place of business (claim 5). The [Seller] asserted that the blade plotters were properly delivered to the delivery addresses agreed upon. [...] sent [...] in Constance invoices of Deutsche Mark [DM] 15,999.44 each for the plotters delivered to Kassel and Munich on 5 December 1991 (claim. ex. 10, 11). An invoice for DM 14,814.30 was sent to [...] in Constance on 11 December 1991 with the same delivery address (claim. ex. 12). A reminder was sent to [...] in Constance in respect of the invoice for DM 14,814.30 on 8 January 1992 (claim. ex. 13; cf. resp. ex. 12, 13). Computer print-outs of the three invoices for a total amount of DM 46,813.18 are contained in the files, which were addressed to the [Buyer] (claim. ex. 14 - 16; resp. ex. 8 - 10). The [Buyer] submitted a fax communication to Mr [...], in which the [Buyer], or rather [...] stated that, initially, due to the defective ROM version with the three plotters delivered, huge problems had occurred; in the meantime, however, the plotters were 'running' (resp. ex. 7).
Company [...] brought a claim against company [...] Constance at the Constance District Court and demanded payment of DM 46,813.18 for the three plotters delivered plus default interest. In its decision of 23 December 1992, the Constance District Court dismissed the defenses that [...] in St. Gallen had made the order and held [...] liable to pay DM 46,813.18 plus default interest (resp. ex. 1). Within the scope of these proceedings, testimony was taken from [...], who, among others, worked for the [Buyer] and [...], sales manager, as witnesses (claim. ex. 7, 8).
2. On 7 October 1994, the [Seller] submitted the present claim for payment against the [Buyer] to the Commercial Court of St. Galen. It demanded the payment of the purchase price for the three blade plotters that were ordered at the beginning of December 1991 and were sent to two delivery addresses in Munich and Kassel and to [...]. It submitted a declaration of assignment, according to which company [...] had assigned all of its claims against its customers. It assumes that, contrary to the proceedings initially commenced by [...] against [...] Constance, not them, but rather the [Buyer] ordered the plotters. Thereby, the ability of the [Buyer] to answer in the proceedings is to be affirmed, whereby, despite the contradictory decision of the Constance District Court, recourse may be had to certain pieces of evidence from those proceedings.
3. The [Seller] domiciled in Germany alleges that it concluded a sales contract with the [Buyer], which is located in Switzerland. Thereby, the United Nations Convention on Contracts for the International Sale of Goods (Vienna Sales Law, CISG; SR [*] 0.221.211.1), which entered into force in Germany on 1 January 1991 and in Switzerland on 1 March 1991, is to be applied to the sales contract (Art. 1(1)(a) CISG). To the extent that the Vienna Sales Law does not contain a regulation, according to Art. 117(2) and (3)(a) IPRG [*], the law of the seller, here German law, is to be applied.
4. According to Art. 11 CISG, a sales contract need not be concluded in or evidenced by writing; in particular, it may also be proved by witnesses. An offer under Art. 14(1) CISG is present if it is sufficiently definite, i.e., if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price. If an agreement - even an implicit one - concerning the certainty or ascertainability of one of these features is lacking, then a contract does not come into existence. The offer is to be interpreted according to the intention of the offeror (Herber/Czerwenka, Internationales Kaufrecht, Kommentar, Munich 1991, paras. 6 and 14 on Art. 14 CISG; v. Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht, Munich 1990, paras. 3 and 13 on Art. 14 CISG).
a) On 3 December 1990, [...] sent the company a fax communication, in which it ordered three blade plotters (claim. ex. 5). The fax communication referred to an 'order no. 1847 - 2 December 1991', from which it can be concluded that contact - probably by telephone - for the purposes of placing an order had already been made previously. Owing to the terms 'order', 'we order' and 'delivery due immediately', the recipient may have and must have assumed that, from the side of the orderer, an intention to be bound to the purchase of the plotters existed (cf. v. Caemmerer/Schlechtriem, para. 13 on Art. 14 CISG); delivery took place and the invoice was sent within a few days. The [Buyer] is stated as the sender of the fax, with its exact address and stating its phone, fax and telex numbers (cf. claim. act. 6). Reference is also made to the [Buyer] with the request that the plotter index be sent 'to our St. Galler address'. (The seat of [...] had been [...] since 16 November 1990).
The [Buyer] argues that, owing to the addition '[...] telefax from: [...]', the orderer would have had to assume that [...], as the managing director of [...] in St. Margrethen, had made the order. In this respect, a reference to St. Margrethen is missing in the telefax and furthermore, in addition to [...], yet another [...] existed. Company [...] must have assumed on the basis of the written order that this had been made by the [Buyer], against which the addition '[...]' had no significance in the sense of a description of a company, but rather, at the most, as a brand or a product description (cf. [...]; similarly '[...]' as addition to company [...]).
b) The [Buyer] rightly draws attention to the fact that the fax order did not contain all necessary elements of a contract, in particular the purchase price. Despite this, the binding intention to buy the plotters was expressed therein - a signature was not necessary, since a sales contract can also be concluded without observing formal requirements, according to Art. 11 CISG. While the [Buyer] assumes that telephone contact took place between [...], as representative of the orderer, and [...] from the company, following the fax order, the [Seller] pleaded before the court that appropriate contact was already made on 2 December 1991, namely before the fax of 3 December 1991.
Witness [...] declared to the Constance District Court that he had a contract of employment with [...] AG (previously [...]), with seat in St. Margrethen, but was, 'however, also responsible for administration, human resources issues and similar areas at the company [...]. In this function, I myself made the order in question, and namely in writing'. He referred to contact by telephone before sending the fax order. Thereby, he allegedly assumes that he 'answered the phone using the company description [...] when this first contact was made. I used this name because we exclusively sell [...] systems' (claim. ex. 7).
The witness did not state that he used the name [...], which is located in St. Margrethen, on the telephone, but rather, with the phrase '[...] St. Gallen', he mentioned a unique combination of two companies, whereby '[...]' indicated [...] AG, and St. Gallen the seat of the [Buyer]. Due to the formulation on page 2 of the witness protocol, it can be concluded that he made the fax order within the scope of his engagement for the [Buyer]. Thereby, the mention of the description '[...]' by the recipient must instead be understood as a reference to the exclusive distribution right of '[...] systems'. In light of the most ambiguously chosen description of the company on the telephone, it must be concluded that the recipient must have been allowed to rely upon the precise description of the company contained in the fax order in good faith.
c) Head of sales [...] at company [...] referred to the fact that the plotters were only allowed to be sold within Germany. Therefore, he had agreed with [...] that all appliances were to be delivered to [...] in Constance. He was allegedly of the opinion that the delivery address and the address for the invoice would have had to have been identical (claim. act. 8). In particular, he made this assumption for the very reason that, owing to previous contact with [...], a plotter had already been sent to the GmbH and had been properly paid for. Conversely, he could not say the name of which company [...] he had used within the scope of the various telephone conversations. Due to the statements of [...], he assumed 'that the limited liability company in Constance and the AG in Switzerland had to be 'identical''. An agreement, according to which the invoices were to be sent to [...], could not be confirmed by him.
Due to this witness statement, it can be concluded that [...], within the scope of the telephone negotiations, did not express clearly for which company he worked and gave rise to the impression that, owing to the economic constellation, this circumstance was also of no significance. In light of the ambiguity concerning the oral negotiations, the supplier must and may be allowed, in good faith, to rely upon the fax order, in which the orderer was stated with an exact address.
d) The [Buyer] cannot derive anything for its argument from the circumstance that company [...] had sent invoices with identical amounts to [...] and the [Buyer]. Owing to the reference from [...] that the limited liability company in Constance and the AG in Switzerland were allegedly 'identical' (claim. ex. 8 p. 3 below), it may be assumed in good faith that it was not important which of the two economically associated companies received the invoice. The presiding judge at the Constance District Court determined in the context of the ambiguity surrounding who the orderer was that it was common knowledge of the court (gerichtsnotorisch) 'that the owner of company [...] AG and [...] GmbH had obviously arbitrarily chopped and changed who was respectively responsible when it came to the identity of the respective managing directors, in particular, to escape payment obligations' (resp. ex. 1 p. 6).
The sole personally liable shareholder and director of [...] GmbH was [...], who is also the president of the administrative board of the [Buyer]. Therefore, it can be assumed that this person instructed the legal representative in the proceedings at the Constance District Court. [...] GmbH represented various views in this regard as to who the orderer was. While its legal representative initially argued the view that the orderer was [...] AG in St. Gallen (claim. ex. 25), it stated in the further course of the proceedings that the order had been made either by [...] or by [...] AG (claim. ex. 9, 9a). In light of this ambiguity as to who the orderer was, the [Buyer] wrongly accuses the [Seller] or rather, company [...], of contradictory behavior if it had initially launched legal proceedings against [...] GmbH (cf. resp. ex. 6).
5. The [Buyer] asserts that 'existing defects were notified orally and in writing' (Response 10). It submitted a non-dated fax communication, which is addressed to Mr. [...], without stating whether or not a connection exists between this person and the [Seller], or rather, company [...]. The telefax does not bear any note of transmission, with the consequence that it can not be determined whether this fax was ever sent at all (resp. ex. 7). In relation to the content of the fax, it can be held that it refers to defects, but still states that the plotters were now 'running'. Thereby, this fax communication does not constitute a notification of defects. The witnesses relied upon by the [Buyer] do not need to be examined as it has not argued with sufficient grounds, who, at which point in time, was supposed to have notified which defects.
However, the fax communication to Mr. [...] can be attributed with the significance of an indication to the extent that it states, in the same way as the fax order (claim. ex. 5), the [Buyer] as the sender with an exact business address.
6. In summary, it can be held that the [Seller], or rather, company [...], on the basis of the fax order dated 3 December 1991, may have assumed in good faith that the [Buyer] was the orderer of the three blade plotters delivered to Germany. As notification of the defects by the [Buyer] has not been proven, this leads to the protection of the amount of DM 46,813.18 asserted by the [Seller].
The [Seller] demands default interest between 11.5% and 9% from various due dates. Art. 78 CISG sets out that each contracting party that fails to pay an amount of money due from the sales contract is to pay interest. The rate of interest is not dealt with in the CISG and is to be determined in accordance with the rules of private international law applicable under the lex fori (Herber/Czerwenka, paras. 2 and 6 on Art. 78 CISG). In the present case, the contract provides for the application of German law. According to para. 288 BGB [*], the monetary accumulates interest at a rate of 4% per year during the period of default; if the creditor can demand higher interest for another legal reason, such interest is to be paid. The creditor can assert a higher rate of interest to the extent that the requirements of para. 268 BGB are satisfied, i.e., provided that the debtor is in default. The interest damage can exist either in the loss of interest made by investing the amount or in the incurrence of credit interest. The interest loss must generally be stated as a definite amount, although the creditor does not have a very high burden of proof in this regard (Palandt, ibid, para. 5 et seq. on 288 BGB). The [Seller] has presented a confirmation from the Commerzbank Hamburg, in which the credit interest paid by the [Seller] for the timeframes cited is listed (claim. ex. 18). Thereby, the [Seller] has sufficiently proved the damage suffered by it. Therefore, the default interest is to be protected in the amount claimed.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Seller] and Defendant of Switzerland is referred to as [Buyer]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM].
Translator's notes on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; IPRG = Bundesgesetz über das Internationale Privatrecht [Swiss Code on the Conflict of Laws]; SR = Swiss systematic collection of Federal law.
** Mariel Dimsey, LL.M., is a Research Assistant and Teaching Assistant at the University of Basel.

References: Art. 117
 Art. 11
 Art. 14
 Art. 14
 v. 
 Art. 14
 v. 
 Art. 14
 Art. 11
 Art. 78
 Art. 78