Source: http://cisgw3.law.pace.edu/cases/070625s1.html
Timestamp: 2019-04-21 04:38:23+00:00

Document:
"1. In case of a firm deal the buyer need not fix an additional period for performance before declaring the contract avoided since the late delivery constitutes an objective defect and thus justifies an immediate avoidance of the contract. To avoid the contract, sending the notice is sufficient.
"2. On the necessary extent of submissions to substantiate the loss under Art. 74 CISG.
"3. The interest rate is determined by the national law applying according to the conflict of law rules of the forum state."
The action was brought by a printing works in Vienna. It manufactured printing products for the defendant, whose place of business was in the Canton of Zurich and which provided printing services in Switzerland. The aim of the action was to obtain payment of the balance of the sale price still outstanding from the last delivery.
The court affirmed that, in the event of a breach of article 33 (a) CISG by the seller, the buyer could, in accordance with article 49 (1) (b), declare the contract avoided, unless the seller performed within the additional period of time to be fixed in accordance with article 47 (1) CISG. In the case of a fixed-term agreement, a seller could declare the contract avoided without the prior fixing of an additional period of time for performance. The determining moment with regard to avoidance of the contract was the moment of communication of the declaration of cancellation, even if the seller had already [dispatched] the goods at the time when that declaration was received.
In the present case, the defendant cancelled its order owing to a delay in delivery. However, it stated that it was willing to accept delivery and resell the goods at the seller's risk. A few days later, it accepted delivery of the goods dispatched and invoiced by the seller, even before the seller had received the aforementioned communication, and resold them to its customers. Subsequently, it paid part of the invoice. Given those circumstances, the court found that the contract of sale, and with it the obligation to pay the price, still existed, despite the defendant's declaration of cancellation. However, the court allowed the defendant a claim to a reduction of the price in accordance with article 50 CISG or damages in accordance with article 74 CISG, as set-off against possible loss resulting from late performance.
The defendant was ultimately ordered to pay the full sale price since, despite the court's order, the defendant had not sufficiently detailed the asserted loss. The amount was granted in euros, since the sale price had been agreed in euros by the parties.
Pursuant to article 78 CISG, the court also granted interest on arrears as from the due date of payment to the plaintiff. In line with established precedents of the Swiss courts, the rate of interest was fixed in conformity with Austrian law, which, in accordance with Swiss private international law, was the national law applicable to the contract between the parties.
This is a dispute between Plaintiff, hereafter referred to as [Seller] vs. Defendant, hereafter referred to as [Buyer], concerning a payment claim.
(4) Analogous request according to item 2 (above); and, finally, to order [Buyer] to bear all costs of the proceedings.
[Seller] is a printing company seated in Vienna. [Seller] produced printed materials for [Buyer], who distributes printing services under the trademark "C" in Switzerland. With the present action, [Seller] demands a residual payment. [Buyer] refuses payment alleging that [Seller] delivered too late which caused damage to [Buyer] and its customers.
On 20 December 2005, the payment summons and statement of claim arrived (case record 1 and 3). The proceeding was conducted in writing and closed by order of 27 October 2006 by the judge instructeur (case record 7, 19 and 23; Prot. S. 13). As [Seller] was not willing to reach a settlement, no preliminary hearing or hearing for settlement was conducted. The proceeding is ripe for decision.
At the time the action was filed, [Buyer] was a limited liability company seated in Zurich. In March 2007, [Buyer] has been transformed to a corporation with its seat in Kloten (cf. case record 25), which is to be changed in the caption of the court file.
The local and subject-matter jurisdiction of the Commercial Court correctly remained undisputed (case record 1 p. 3; 7; Art. 2 LugÜ [*], Art. 2 IPRG [*] and � 63 No. 1 GVG [*]).
The case at hand involves an international issue. [Seller] is seated in Vienna, [Buyer] in Zurich or, respectively, now in Kloten. Therefore, the applicable substantive law is to be determined. Austria as well as Switzerland are Contracting States to the UN Convention on Contracts for the International Sale of Goods of 11 April 1980 (CISG). This Convention is also applicable to contracts for the supply of goods to be manufactured or produced (Art. 3 CISG, Schlechtriem/Schwenzer/Ferrari, Commentary on the CISG, 4th ed., Munich 2004, Art. 3 para. 4 et seq.; Honsell/Siehr, Commentary on the CISG, Berlin/Heidelberg 1997, Art. 3 para. 3).
1. a) In its statement of claim, [Seller] remarked that it produced several printed products for [Buyer] between August and November 2004 and delivered each order to [Buyer] in conformity with their contract. The dates of delivery, which had been specifically agreed upon and which had been delayed in individual instances, were met by [Seller]. The deliveries were accepted by [Buyer] without objection. The parties agreed in the particular contracts on a period for objections of three days. [Seller] did not receive any objections until the due date. The stipulated costs for the printing orders were invoiced. According to the invoices, [Buyer] owed [Seller] EUR 41,800.17 for the delivered printed products. To date, [Seller] received from [Buyer] two payments, EUR 20,900.08 and EUR 11,659.54. A remaining balance of EUR 9,240.55 is unpaid (case record 1, p. 4 et seq.).
b) According to [Buyer]'s statement in its answer to [Seller]'s complaint, [Seller] had an "alleged" loss of production due to a machine breakdown. Several of [Buyer]'s printing orders were affected. The D, E and especially the WIR-MAILING printing orders were such where [Buyer] had to comply with fixed delivery dates toward its own customers. While a major damage could be prevented as regards the commissions D and E by negotiations with the customer, this was not possible in relation to the WIR-MAILING. Delivery date for the latter was 13 October 2004 while it was 15 October 2004 for the order D. The forwarding agency "Gebrüder F" was instructed with the collection. The collection date of the WIR-MAILING was delayed for two days to 15 October 2004 when shortly before the scheduled collection it became clear that a timely delivery was not possible. Delivery or, respectively, customs clearance of the goods was finally conducted on 21 October 2004. Before that, [Buyer] communicated its problem to [Seller] by telephone and in writing on 18 October 2004 and expressly pointed out that a delivery of the goods would be carried out at [Seller]'s financial risk. [Buyer]'s customers claimed damages in the amount of Sfr. 17,000.00. [Buyer]'s own loss was not included in this amount (case record 7).
c) In its reply, [Seller] asserted that [Buyer] had accepted [Seller]'s claim: By letter of 21 April 2005, [Seller] had requested [Buyer to pay the accepted amount of EUR 12,000.00 -- a part of the whole amount of EUR 20,900.19 -- and to identify disputed and undisputed claims concerned with payment of this amount. In reply, [Buyer] paid EUR 11,659.54 without any reference that a certain claim was disputed. Therefore, [Buyer] accepted [Seller]'s claim without any reservation (case record 19, p. 3 et seq.).
Concerning the order "E invoice forms", no fixed dated was agreed upon. Despite different delivery dates of the particular printing orders, the company Gebrüder F was, in any event, instructed to collect all deliveries together at a later date and in line with one single shipping order. It therefore seems to constitute an abuse of law if [Buyer] now invokes a fixed date. There is neither a breach of contract by [Seller] nor any loss (case record 19, p. 4 et seq.).
Concerning the order "D", the order of 5 October 2004 scheduled the delivery date on 15 October without any reference to a fixed date. This was a legally irrelevant date which could not impose any obligation. There is no breach of contract by [Seller] and, moreover, no respective loss (case record 19, p. 5 et seq.).
Concerning the order "WIR-MAILING", the request for delivery and the offer of 5 October were lacking a reference to a fixed date. If 13 October 2004 had, however, been a fixed date despite the requirement of written form, this date would be impliedly delayed for an undefined period by [Buyer]'s delaying of the printing release which was only carried out on 12 October 2004 at 8:53 p.m. An express, new delivery date was not agreed upon. On 20 October 2004, [Buyer] accepted the WIR-MAILING without any objection. At this time, [Seller] did not have knowledge of [Buyer]'s letter of 18 October and the alleged avoidance of contract by [Buyer]. Delivery at own risk would have been an alteration of the contract which [Seller], however, rejected when it issued the invoice of 20 October 2004. By accepting this invoice without any reservations and by partial payment in the amount of Sfr. 10,351.50, [Buyer] accepted the contractual relationship and therefore its obligation to perform remained unchanged (case record, p. 6 et seq.).
d) In its rejoinder, [Buyer] pointed out that [Seller] relied on the fact that the operational e-mail communication was not recorded and no "telephone history" was created to imply an alleged misdemeanor of [Buyer]. By letter of 18 October 2004, these three orders were deleted and [Seller] was offered the opportunity to deliver the goods at its own financial risk. This was indeed done by [Seller]. As the "affirmation for printing" that was given was delayed by [Seller], the printing release could only be carried out late in the evening (case record 23).
2. a) The parties undisputedly concluded several contracts which obliged [Seller] to produce and deliver printing products and [Buyer] to pay the agreed remuneration (cf. case record 4/3 et seq.). It is further undisputed that [Seller] delivered the owed printing products. Having paid EUR 11,659.54 on [Seller]'s outstanding claim in the amount of EUR 20,900.09, [Buyer] did not contest that it was generally obliged to pay [Seller] a further residual amount of EUR 9,240.55 (case record 4/24, 4/25, 20/2, 1 p. 6 and 19 p.4).
"Therefore, we are not able to deliver the goods to our customers anymore because the delivery date was an integral part of the order. Hereby, we cancel the orders 'WIR-MAILING', 'D' and 'E'.
We offer to you that you deliver the goods at your own financial risk. If a part of the printing products can be discounted -- which we assume -- we will not take advantage of this but compensate you accordingly."
[Buyer] thereby stated that it was not willing to perform the contract anymore (cf. Schlechtriem/Schwenzer/Müller-Chen, Commentary on the CISG, 4th ed., Munich 2004, Art. 49 para. 24). Therefore, it is to be verified whether [Buyer] was entitled to cancel the orders -- which means the avoidance of the contract -- for failure to comply with the delivery dates. This is disputed by [Seller] (case record 19, p. 5).
c) aa) According to Art. 33(b) CISG, the seller must deliver the goods on that date which is fixed by or determinable from the contract. If the seller fails to perform any of his obligations under the contract or the CISG, the [Buyer] can, according to Art. 45(1), exercise the rights provided in Arts. 46-52 or claim damages as provided in Arts. 74-77 CISG. Art. 49(1)(b) CISG provides that the buyer may declare the contract avoided in case of non-delivery, if the seller does not deliver the goods within the additional period of time fixed by the buyer in accordance with Art. 47(1) or declares that he will not deliver within the period so fixed. Avoidance of the contract releases both parties from their obligations under it, subject to any damages which may be due, Art. 81(1) (sentence 1) CISG. If the contract is a transaction in which time is of the essence, the buyer is not obliged to fix an additional period of time before he is entitled to declare the contract avoided since a delayed delivery is an objective defect and the immediate termination of the contract by the buyer is justified (Schlechtriem/Schwenzer/Müller-Chen, loc. cit., Art. 48 para. 15, Art. 49 para. 5; Honsell/Schnyder/Straub, Commentary on the CISG, Berlin/Heidelberg 1997, Art. 49 para. 14).
Therefore, the failure to comply with fixed delivery dates entitled [Buyer] to declare the termination of the contract.
bb) The dispatch of the notice is sufficient for the termination of the contract (Schlechtriem/Schwenzer/Müller-Chen, loc. cit., Art. 49 para. 25). Thus, it is of no relevance for the termination of the contract whether [Seller] received [Buyer]'s letter of 18 October 2004 only after the forwarding of the goods, as [Seller] asserts. If the seller is not aware of the termination of the contract for lack of receipt or if seller rejects the declaration and thereby expresses that seller wants to perform the contract, the buyer can use the goods and claim the compensation of the reduced market value by way of damages or reduction in price (Schlechtriem/Schwenzer/Müller-Chen, loc. cit., Art. 45 para. 16, Art. 45(1)(b), Arts. 74-77 CISG).
All notices for substantiation are issued subject to the understanding that in case of default, it is referred to the inadequate submissions of the parties.
The explanatory statement is to be given basically in a written submission. In general, enclosures cannot be declared as an integrated part of the written submissions. If it is -- exceptionally for special reasons -- referred to a document for an assertion, this document and the parts of documents raised for the assertion are to be identified in detail (ZR 95 No. 12, ZR 97 No. 87, ZR 102 No. 15).
The notices concerning particulars of the claim of the opposing party are to be considered.
a) The item of damages in the amount of Sfr. 17,500.00 which the G-publishing company (Translator's note: one of [Buyer]'s customers) claimed from [Buyer] (case record 7 p. 2 with reference to case record 8/7) is to be substantiated. [Buyer] must also state whether and, if so, how this matter has developed or was settled in the meantime.
c) General and summary assertions do not suffice for the substantiation. Rather, [Buyer] has to display internal notions, actions and events in detail. Thereby, it must precisely identify the acting individual persons by names, subject terms of the contract, actions, place and. The consequential conclusions are to be displayed.
Moreover, [Buyer] has to present each partial claim with all numbers and basic arithmetic operations (addition, subtraction, etc.) explicitly in the written submission in such a way that the court is able to recalculate the claim easily. It is not allowed to purport mere results.
d) General objections are irrelevant as well. Each particular contention considered as relevant is to be disputed separately or to be disproved by diverging illustration.
b) The foreseeability of the damages -- manner and extent at the time of the conclusion of the contract - as a possible consequence of [Seller]'s breach of contract.
In connection with the delivery of the WIR-MAILINGS, [Buyer] asserts that it gave notice of its concern to Mr. X and Mr. Y of [Seller] not only in writing on 18 October 2004 but also by several phone calls. These phone calls are to be substantiated. Particularly, it is to be illustrated who said what to whom at what time."
cc) For lack of sufficient substantiation of a loss, [Buyer] is obliged to pay [Seller] the purchase price agreed upon. Under these circumstances, it can be left undiscussed whether or not the parties agreed on fixed dates with which [Seller] did not comply and which might have entitled [Buyer] to declare the contracts avoided.
d) In the contracts of the parties, prices were agreed upon in Euros and [Seller] invoiced also in Euros (case record 4/12, 4/13, 4/15, 4/20 and 4/21). [Buyer] therefore owes the purchase prices in Euros (Honsell/Schnyder/Straub, loc. cit., Art. 54 para 28). Consequently, [Buyer] is to be obliged to pay [Seller] EUR 9,240.55.
e) If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, Art. 78 CISG. The obligation to pay interest arises when the particular payment is due. The extent of the interest rate is based on national law which is applicable to the contract according to the conflict of laws (Honsell/Magnus, Commentary on the CISG, Berlin/Heidelberg 1997, Art. 78 para 12, Weber, in: Berner Tage für die juristische Praxis 1990, CISG, Bern 1991, p. 208, critically: Schlechtriem/Schwenzer/Bacher, Commentary on the CISG, 4th ed., Munich 2004, Art. 78 para. 26 et seq.). For lack of a particular agreement, the purchase price is due when the goods or the documents are put at the buyer's disposal (Honsell/Magnus, loc. cit., Art. 78 para. 9). According to [Buyer]s illustration, the printing orders were delivered on 21 October 2004 (case record 7, p. 2), following that interest claimed since 1 November 2004 is justified. Work and delivery contracts are -- as far as the CISG is not applicable -- subject to the law of the producer and seller (Art. 117 IPRG). In the instant case, this is Austrian law. The statutory interest rate for payment demands between business companies which arise out of business transactions is 8 percentage points above the prime lending rate (� 1333(2) ABGB [*], � 352 UGB[*]) and is thus higher than the 5 % requested by [Seller]. Therefore, [Buyer] has to pay [Seller] -- according to [Seller]'s submission -- 5 % interest on the owed amount since 1 November 2004.
f) [Seller] requested the removal of the objection filed by [Buyer] in debt enforcement No. 137984 of the prosecution office [Beitreibungsamt] Zurich 3. A claim is to be enforced according to the SchKG [*], even if it is a dept payable in a foreign currency, except it is to be paid in the foreign currency in real terms. In the instant case, this is not claimed by any of the parties. The conversion to the Swiss currency is a matter solely subject to the law of enforcement. According to civil law, the debtor can pay in foreign currency also during the debt enforcement (BSK SchKG I-Acocella, Art. 38 para. 10, BSK SchKG Erg.Bd.-Steahelin, Art. 38 para. 10). The amount requested in the debt enforcement is Sfr. 32,378.40 with an actual exchange rate of EUR 1 = Sfr. 1.5492 (case record 4/26). EUR 9,240.55 corresponds to Sfr. 14,315.46. The objection filed is therefore to be removed in its entirety.
g) [Seller] claims payment of the costs of the payment summons in the amount of Sfr. 100.00. As [Seller] is entitled to claim these costs in advance of the debtor's payment (Art. 68(2) SchKG), it is unnecessary to grant them.
[Buyer] loses the legal proceeding. Therefore, [Buyer] is liable to pay the costs and compensation (� 64(2) ZPO [*] and � 68(1) ZPO). The value in dispute according to the BGG [*] amounts to Sfr. 15,305.00 (EUR 1 = Sfr. 1.65632) and thus does not reach the limit of value in dispute provided in Art. 74(1) BGG.
1) [Buyer] is obliged to pay [Seller] EUR 9,240.55 plus interest at 5 % since 1 November 2004.The objection filed in debt enforcement No. 137984 of the prosecution office [Beitreibungsamt] Zurich 3 (payment summons of 8 April 2005) is removed to the extent of Sfr. 14,315.46 plus 5 % interest since 1 November 2004.
Sfr. 180.00 as fees for summons.
3) The costs are imposed on [Buyer].
4) [Buyer] is obliged to pay [Seller] compensation in the amount of Sfr. 3,800.00 plus Sfr. 427.00 for attorneys' fees.
5) Written notifications for the parties are available against acknowledgement of acceptance.
b) at the Swiss Federal Court [...].
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Austria is referred to as [Seller] and Defendant of Switzerland is referred to as [Buyer].
Translator's note on other abbreviations: ABGB = Allgemeines Bürgerliches Gesetzbuch [Austrian General Civil Code]; BGG = Bundesgerichtsgesetz [Swiss Federal Court Act]; DM = Deutsche Mark [former German currency]; GVG = Gerichtsverfassungsgesetz [Austrian Code on Court Constitution]; IPRG = Bundesgesetz zum Internationalen Privatrecht [Austrian Conflict of Laws]; LugÜ = Luganer Gerichtsstands- und Vollstreckungsübereinkommen [Lugano Convention on Forum and Execution]; SchKG = Bundesgesetz über Schuldbeitreibung und Konkurs [Swiss Act on Insolvency and Collection of Debts]; UGB = Unternehmensgesetzbuch [Austrian Commercial Code]; ZPO = Zivilprozeßordnung [Swiss Civil Procedure Code].

References: Art. 74
 Art. 2
 Art. 2
 Art. 3
 Art. 3
 Art. 49
 Art. 33
 Art. 45
 Art. 49
 Art. 47
 Art. 81
 Art. 48
 Art. 49
 Art. 49
 Art. 49
 Art. 45
 Art. 45
 Art. 54
 Art. 78
 Art. 78
 Art. 78
 Art. 78
 Art. 38
 Art. 38
 Art. 74