Source: http://cisgw3.law.pace.edu/cases/921120g1.html
Timestamp: 2019-04-18 11:02:18+00:00

Document:
In the framework of a long-term business relation, a French seller, plaintiff, sold goods to a German buyer, defendant. The seller delivered the goods according to its general business conditions "free delivery, duty-paid, untaxed" and handed the goods over to a carrier. The buyer denied that delivery had taken place and the seller produced an unsigned receipt with the buyer's stamp on it in order to prove delivery. The buyer refused to pay and the seller sued it for the outstanding purchase price.
The first instance court allowed the claim. The appellate court dismissed it.
The appellate court found that the CISG was applicable under article 1(1)(b) CISG, because the rules of German private international law led to the application of French law, which after ratification of the CISG, had incorporated the provisions thereof.
The court held that the seller was not entitled to claim the purchase price pursuant to articles 53 and 58 CISG. The stamped but unsigned receipt was not sufficient to proof delivery. Furthermore, the court held that the buyer had no obligation to pay the purchase price under articles 66 and 67(1) CISG, as the risk had not passed to the buyer when the goods were handed over to the carrier for transmission to the buyer. The seller was bound to deliver the goods at the buyer's place of business (article 31 CISG in conjunction with article 6 CISG) at its own risk, as provided by the agreement's clause "free delivery . . . ". The court found that this clause did not merely deal with the cost of the transport but also with the passing of the risk.
The court noted that the clause "free delivery . . . " had to be interpreted under German law, as the seller had used a clause common in German commerce, drafted in German and with a German buyer. The German doctrine and the jurisprudence show that this clause is generally interpreted as a rule dealing with costs as well as with the passing of risks. The court further noted that according to article 8(2) CISG, the parties' interpretation of the clause "free delivery . . . " had also to be taken into account. The court held that the fact that the seller concluded a transport insurance meant that it was prepared to take the risk of the transportation of the goods. In addition, the seller had sometimes carried certain goods for the buyer by its own means of transportation. This clearly indicated the parties' intention to accept the passing of the risk at the buyer's place of business in Germany, and accordingly to deviate from article 31(a) CISG. The seller had not been successful in proving that the goods had been delivered to the buyer and as such, no passing of the risk to the buyer took place.
The facts are not laid out in accordance with � 543(1) ZPO [*] because the judgment of the Court does not allow further appeal.
Defendant [Buyer]'s appeal is admissible and well-founded.
Plaintiff [Seller] has no claim against [Buyer] for payment of DM 13,062.01 in relation to the delivery invoiced on 8 November.
I. Applying French law, the legal relationship between the parties is governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG). Since no express choice of law has been made by the parties, the application of French law follows from Art. 28 EGBGB [*]. It is presumed under Art. 28(2) EGBGB that the contract bears its closest connection (Art. 28(1) EGBGB) with the country in which the party having to effect the characteristic performance of the contract is domiciled. The characteristic performance for a contract of sale is effected by the seller (Palandt/Heldrich, BGB [*], 51th ed., 1992, Art. 28 EGBGB para. 3). In this dispute, that is Plaintiff, domiciled in France.
The United Nations Convention on Contracts for the International Sale of Goods entered into force for France on 1 January 1988. The fact that the Convention was ratified with effect for the Federal Republic of Germany only in 1989 and has been in legal effect only as of 1 January 1991 is of no relevance. According to Art. 1(1)(b) CISG the Convention also applies when the rules of private international law lead to the application of the law of a Contracting State. Pursuant to French conflict of laws rules -- these being the relevant rules at the time of conclusion of contract -- the CISG applies in that way because the place of contract conclusion is the seat of [Seller], thus making French substantive law applicable (cf. Sandrock, Handbuch des internationalen Vertragsrechts, 1980, para. 268; on the relevant place of contract conclusion: Ferid, Das französische Zivilrecht, 1971, 1 E 104). Since the parties have not excluded application of the CISG, the contract between [Seller] and [Buyer] is accordingly governed by the CISG.
II. [Seller] is not entitled against [Buyer] to claim payment of the purchase price under Arts. 53, 58 CISG, because it has not put the goods at the disposal of [Buyer] at the place of [Buyer]'s business (cf. von Caemmerer/Schlechtriem/Hager, Kommentar zum einheitlichen UN-Kaufrecht, 1990, Art. 58 para. 5).
[Seller] has failed to prove that it had performed its obligation to deliver. The stamp confirming receipt of the goods on [Seller]'s bill of delivery is not sufficient proof because it has not been signed, � 416 ZPO [*].
Furthermore, [Seller] has not demonstrated that the stamp in itself and without signature was an indication for receipt of the goods by [Buyer]. The witnesses (...) and (...) heard in relation to this question have stated in concurrence with [Buyer]'s submissions that the stamp of receipt had been applied only preliminarily onto the bill of delivery and that further confirmation was given by signature after receipt and examination of the goods. Therefore, the stamp itself does not sufficiently prove surrender of the goods to [Buyer]. It only establishes the fact that the carrier of the goods has presented the bill of delivery to [Buyer] but not that goods have actually been unloaded.
III. [Buyer] is not obliged pursuant to Arts. 66, 67 CISG to pay the purchase price. The risk of having to make payment would not have passed to [Buyer] at any point in time prior to surrender of the goods. An earlier passing of risk would have occurred only if [Seller] had fulfilled its contractual obligations already at the time of handing over of the goods to the first carrier, Arts. 67(1), 31(a) CISG. This is not the case here. According to the contract [Seller] was obliged to deliver the goods at its own risk to [Buyer]'s place of business, Art. 31 first part, in conjunction with Art. 6 CISG ("Fernkauf") (cf. von Caemmerer/Schlechtriem/Hager, above). This follows from the clause which was constantly used by [Seller] in its business relations with [Buyer]: "free buyer's address, duty paid, untaxed". This clause has also become part of the contract in dispute. Contrary to the opinion of the Court of First Instance, the clause "free buyer's address" must not only be regarded as an agreement on allocation of transport costs, but it additionally constitutes a provision concerning the allocation of risks, in a way that [Seller] will bear the risk until surrender of the goods to [Buyer].
By using the clause "free buyer's address" [Seller] introduced a provision regularly used in German commercial transactions, written in German language and used against a German contracting partner. An interpretation of the clause must therefore be made from the point of view of German law. Pursuant to Art. 8(2) CISG the reasonable understanding of the recipient is relevant for the interpretation of the clause. This implies that a party which for the purposes of transnational commerce uses a clause common in the other party's jurisdiction, must accept an interpretation of the clause according to the reasonable understanding of that other party. The clause "free buyer's address", respectively, any similar clause "free ... destination of the goods", does not yet embody any typical unambiguous content (BGH [*] NJW [*] 1984, 567). However, it is being predominantly and with increasing tendency understood in legal literature not only as a provision concerning costs but also as a provision allocating the risks between the parties (Soergel/Huber, BGB, 12th ed. 1991, � 447 para. 4; von Cammerer/Schlechtriem/Huber, Art. 31 para. 33; Baumbach/Duden/Hopt, HGB [*], 28th ed., 1989, � 346 para. 5 who already suggests the existence of a corresponding trade usage; Staub/Koller, Großkommentar HGB, 4th ed., 1985, vor � 373 para. 226; similarly in the 3rd ed. Würdinger/Röhricht, 1970, � 373 para. 190 and Ratz, 1978, � 346 para. 150; Staudinger/Köhler, BGB, 12th. ed., 1978, � 447 para. 4; Liesecke, WM [*] 1978, Sonderbeilage Nr. 3, p. 30; the contrary view is taken by Schlegelberger/Hefermehl, HGB, 5th ed., 1976, � 346 para. 72; Heymann/Horn, HGB, 1990, � 346 para. 101, who considers a different interpretation according to the particular circumstances).
An interpretation of the clause used by [Seller] in a way that an allocation of the risks to be borne by either party has also been made is supported by the idea that a buyer to whom is being promised goods "free buyer's address" will hardly be inclined to think that it was in fact his responsibility to care for transport insurance and any damage incurred during transport (Soergel/Huber, above). In this case, interpretation of the clause as an allocation of risks is further corroborated by [Seller] which itself stated that it had concluded a transport insurance. It can thus be concluded that [Seller] itself assumed to be obliged to bear the risk in relation to transport of the goods (Ratz, above). Additionally, [Buyer] has argued -- without objections raised by [Seller] -- that the latter had performed the transport not only by external carriers, but regularly used even its own vehicles. These circumstances lead to the conclusion that the [Seller] and [Buyer] had not assumed a contract involving carriage of the goods in terms of Art. 31(a) CISG, but they had understood the clause "free buyer's address" as a specific allocation of risks, in accordance with the prevailing opinion. Therefore, the Court considers the particular agreement between [Seller] and [Buyer] not only as a provision governing costs of transport but also as a provision governing the allocation of risks. Consequently, as [Seller] has not succeeded in proving surrender of the goods to [Buyer], it must be assumed that there had been no passing of risk to [Buyer] and that therefore [Buyer] is not obliged to pay the purchase price.
IV. [Seller] is further not entitled to a damages claim on the grounds of breach of contract by [Buyer].
Preliminarily applying the stamp of receipt of the goods before the actual surrender of the goods does not amount to a breach of contract on the part of [Buyer]. [Seller] was not entitled to assume on the basis of the stamp itself and without a confirming signature by [Buyer] that delivery was accomplished. [Buyer] showed no culpable, deceiving conduct which might be able to impede the enforcement of claims by [Seller]. The stamp itself does not ultimately indicate confirmation of receipt of the goods.
V. The decision on costs follows from � 91 ZPO [*], the decision concerning preliminary enforceability is based on �� 708 No. 10, 713 ZPO. The determination of the gravamen of the case is based on � 546(2) ZPO.
The requirements for allowing further appeal on legal grounds under � 546(1) ZPO are not fulfilled.
Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGH = Bundesgerichtshof [German Federal Supreme Court]; EGBGB = Einführungsgesetz zum Bürgerlichen Gesetzbuche [German Code on the Conflict of Laws]; HGB = Handelsgesetzbuch [German Commercial Code]; NJW = Neue Juristische Wochenschrift [a German law journal]; WM = Wertpapiermitteilungen [a German law journal]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].

References: Art. 28
 Art. 28
 Art. 28
 Art. 1
 Art. 58
 Art. 31
 Art. 6
 Art. 8
 Art. 31
 Art. 31

V.