Source: http://cisgw3.law.pace.edu/cases/990324g2.html
Timestamp: 2017-07-27 00:50:46
Document Index: 14699925

Matched Legal Cases: ['Art. 31', 'Art. 50', 'Art. 5', 'Art. 57', 'Art. 57', 'Art. 58', 'Art. 50', 'Art. 31', 'Art. 39', 'Art. 35', 'Art. 78', 'Art. 78', 'Art. 58', 'Art. 78', 'Art. 74', 'Art. 78', 'Art. 74', 'Art. 28']

Germany 24 March 1999 District Court Flensburg (Meat case) [translation available] [Cite as: http://cisgw3.law.pace.edu/cases/990324g2.html] Primary source(s) of information for case presentation: Case text
DATE OF DECISION: 19990324 (24 March 1999) JURISDICTION: Germany TRIBUNAL: LG Flensburg [LG = Landgericht = District Court] JUDGE(S): Unavailable CASE NUMBER/DOCKET NUMBER: 2 O 291/98
CASE NAME: German case citations do not identify parties to proceedings CASE HISTORY: Unavailable SELLER'S COUNTRY: Germany (plaintiff) BUYER'S COUNTRY: France (defendant)
As to the lateness of payment, the Court held that the buyer was entitled to claim damages under article 74 CISG. The Court was of the opinion that CISG does not govern the period of time for payment. Thus, the Court established it according to the rules of private international law under German law according to which the payment had been delayed in an inadmissible way. Go to Case Table of Contents
APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles: 31(a) ; 36 ; 50 ; 57 ; 58 ; 66 ; 74 ; 78 [Also cited: Articles: 39 ; 40 ; 53 ] Classification of issues using UNCITRAL classification code
Descriptors: Jurisdiction ; Payment, place of ; Delivery ; Conformity of goods ; Burden of proof ; Reduction of price, remedy of ; Price ; Passage of risk ; Damages ; Interest Go to Case Table of Contents Editorial remarks
(b) Other abstracts English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=930&step=Abstract>
CITATIONS TO TEXT OF DECISION Original language (German): cisg-online.ch database <http://www.cisg-online.ch/cisg/urteile/719.htm>; see also Internationales Handelsrecht (5/2001) 202; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=930&step=FullText>
CITATIONS TO COMMENTS ON DECISION English: Liu Chengwei, Recovery of interest (November 2003) n.97; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at n.608; Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]>; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 31 para. 18 Art. 50 para. 15
FACTS OF THE CASE Plaintiff [Seller] maintains an independent subsidiary in Husum [Germany], which is responsible
for the sale of its slaughter products, that is, beef and lamb. Defendant [Buyer] is a corporation
under French law which trades in meat products. In March of 1998, [Buyer] bought from [Seller] meat products and innards for a total amount
of 34,296.22 DM [Deutsche Mark]. According to invoice issued on 30 March 1998, [Buyer]
bought additional meat products for DM 5,850.85. [Seller] demanded payment of the purchase
price after the deliveries had been made. Despite repeated requests for payment in April and
May of 1998, [Buyer] initially failed to pay the purchase price with respect to a sum of
37,923.22 DM. [Seller] filed a claim for the remainder of the purchase price on 9 July 1998. At the end of July
1998, in the time period between [Seller]'s filing of the statement of claim and the delivery of its
legal brief to [Buyer], [Buyer] sent [Seller] a check for the amount of 34,296.22 DM, which
was cashed by [Seller]. Thereupon, [Seller] withdrew its claim with respect to this amount and
now claims reimbursement of costs accrued due to the withdrawal of the claim (in the amount
of DM 3,260.-). [Seller] further demands payment of the unpaid residual purchase price of DM
3,627.- from the invoice of 30 March 1998. [Seller] submits that it performed its obligation
under the contract by handing over the conforming goods to a carrier for transmission to
[Buyer] on 27 July 1998. The consignment note issued on the very day undisputedly documents
this. [Seller] further submits that [Buyer] is obliged to pay interest on the purchase price for
[Seller] requests the Court to order [Buyer] to pay [Seller] an amount of 3,627,- DM with
interest of 12% from 20 April 1998 as well as 12% interest: - on DM 2,193.26 from 30 March 1998 - on DM 7,639.20 from 30 March 1998 - on DM 4,117.04 from 31 March 1998 - on DM 6,952.08 from 31 March 1998 - on DM 7,982.92 from 6 April 1998; and - on DM 5,411.72 from 6 April 1998. [Seller] further requests that the Court order [Buyer] to pay [Seller] an amount of DM 3,260.-
as reimbursement for the partial withdrawal of the claim.
[Buyer] requests the Court to dismiss [Seller]'s claim and order [Seller] to bear the cost of the
proceedings with respect to the partial withdrawal of claim. [Buyer] objects to the local jurisdiction of the Landgericht (District Court) Flensburg. [Buyer] is
of the opinion that it was not in arrears with the payment of the purchase price. [Buyer] submits
that it had already sent [Seller] a check for DM 34,296.22 on 24 March 1998. After this check
had inexplicably been returned to [Buyer], it sent a second check on 6 April 1998. Afterward it
emerged that [Seller] had not cashed this check for reasons unknown, but had sent [Buyer] a
request for payment instead. By fax dated 24 June 1998, [Buyer] undisputedly agreed to make
out and send a new check. [Buyer]'s consent was given under the condition that [Seller]
declared that it would not to cash the check sent in April of 1998, should that check turn up.
Shortly afterward. [Buyer] received the respective declaration, [Seller] had filed the claim
without waiting for the receipt of the announced check. After the check made out on 6 April
1998 had been stopped, [Buyer] sent [Seller] a new check at the end of July 1998. This check
has undisputedly been cashed. [Buyer] furthermore submits that it is entitled to a reduction of the purchase price in the amount
of DM 3,267.- with respect to the invoice of 30 March 1998. The goods delivered on 26
March 1998 did not conform to the contract -- a fact that had not been apparent when taking
delivery. The goods were delivered to [Buyer]'s customer on the same day and refused by the
customer as non-conforming with letter of 9 April 1998. [Buyer] alleges that the goods were
expertly and sufficiently cooled after they had been handed over to carrier. Thus, they must
have been treated inadequately prior to that point in time and consequently were already non-conforming before the risk passed to [Buyer]. All of the spoiled goods had been destroyed in
the meantime. With respect to the further submissions of the parties, the Court refers to the content of the
memoranda. REASONING OF THE COURT
I. [Seller]'s claim is admissible. Apart from the fact that [Buyer] did not object to the Court's
jurisdiction during the hearing (� 39 ZPO [*]), the Court possesses jurisdiction under Art. 5 no.
1 of the Brussels Convention.[*] The place of performance for [Buyer]'s obligation to pay the
purchase price was [Seller]'s place of business following Art. 57(1)(a) of the United Nations
Convention on Contracts for the International Sale of Goods (CISG), which is the law
governing the contract. [Buyer]'s submission that, following Art. 57(1)(b), it was bound to pay
the price at the place where the handing over of the goods took place, is incorrect.
Undisputedly, [Seller]'s delivery constituted an advance performance; payment was thus not to
be made against the handing over of the goods or of documents. II. [Seller]'s claim is predominantly justified. [Seller] is entitled to payment of the remainder of
the purchase price in the amount of DM 3,627.-. Payment is due following Art. 58 CISG. The purchase price is not to be reduced under Art. 50 CISG, as it cannot be ascertained that
the goods were non-conforming at the decisive point in time. Under the contract, the seller was not bound to deliver the goods at any particular place; the
sale is therefore to be considered a contract involving the carriage of goods under Art. 31(a)
CISG. [Seller] fulfilled its obligation to deliver the goods by handing them over to the carrier for
transmission to the buyer. According to Arts. 66, 36 CISG, [Seller] is not liable for any lack of
conformity or destruction of the goods which occurs after the passing of risk, unless this is due
to an act or omission on its part. It is unclear in the present dispute whether the goods conformed to the contract at the time
when the risk passed to [Buyer], or whether a non-conformity which was due to a breach of
[Seller]'s obligations occurred after this point in time. This uncertainty goes to the disadvantage
of [Buyer]. After [Buyer] accepted the goods without giving notice under Art. 39 CISG, it
bears the burden of proof for the non-conformity of the goods at the time of the passing of risk
(cf. v. Caemmerer/Schlechtriem, Art. 35 n. 49). It cannot be ruled out that the goods were
spoiled during transport or due to improper treatment after [Buyer] delivered the goods to its
customer on 27 March 1998. The latter possibility in particular cannot be excluded, as
[Buyer]'s customer queried the goods on 9 April 1998, even though it had already received the
goods on 27 March 1998. The Court informed [Buyer] during the hearing on 10 March 1999
that it did not sufficiently substantiate whether the goods were properly treated during that
period of time. Insofar as [Buyer] relies on the unnamed witness N.N. for a correct treatment of
the goods both during transport and after delivery to [Buyer]'s customer, this is an insufficient
and therefore irrelevant offer of proof. [Buyer] was at least held to submit why it was unable at
that time to provide the Court with the name and address of the witness (cf. Zöller/Greger, �
356 ZPO [*] n. 4). In view of the above, the Court does not need to discuss whether [Buyer] lost the right to rely
on the non-conformity under Arts. 39 and 40 CISG (quite possible, as [Buyer] failed to
discover and notify [Seller] of the defect immediately after [Buyer] received the goods on 26
March 1998, but sent such a notification only with fax of 10 April 1998). [Seller] is entitled to interest on the purchase price under Art. 78 CISG in connection with �
352 HGB.[*] Under Art. 78 CISG, [Seller] has a right to interest on the purchase price in
arrears without sending a request for payment. After [Buyer] had received the goods, it was
bound to pay the purchase price at the time stipulated in the invoices (Art. 58 CISG). As the
CISG does not settle the rate of interest, national law, that is � 352 HGB, applies (cf. v.
Caemmerer/Schlechtriem, Art. 78 n. 27 and 32). [Seller]'s claim for interest is thus legitimate
with respect to 5%, whereas [Seller] did not prove that it suffered a higher damage. [Seller] is further entitled to damages in the amount of the costs accrued with respect to the
claim it has withdrawn. Art. 74 CISG grants damages for any breach of contract, including
delay of payment (cf. Art. 78 and v. Caemmerer/Schlechtriem, Art. 74 n. 16). The CISG does
not settle at what point in time a delay in payment is to be considered culpable. Therefore, the
matter is to be settled under German law, which is the law governing the contract in the absence
of the CISG (see Art. 28 EGBGB [*]). By the latest, [Buyer] was in culpable delay of payment when it received the request for
payment by [Seller]'s attorney dated 25 May 1998. This is the case even if [Buyer]'s
submission that it sent [Seller] a check in the amount of 34,296.22 DM on 8 April 1998 was
correct. Admittedly, the alleged payment would have cured any culpable delay already in
existence. However, the delay can again be considered culpable after [Seller]'s further requests
for payment on 14 April, 20 April and 27 April 1994 and -- by the latest -- after [Buyer]
received the letter by [Seller]'s attorney dated 25 May 1998. It should have been evident to
[Buyer] that the check for the amount of 34,296.22 DM had obviously not reached [Seller] and
would not suffice to perform its obligation to pay the purchase price. The action brought by [Seller] on 9 July 1998 was a suitable measure to pursue its rights.
[Seller] was entitled to expect that [Buyer] -- who had been in default of payment since at least
the end of May -- would immediately issue and send a replacement check after [Seller] had
assured [Buyer] on 1 July that the missing check would not be cashed by it. [Buyer], however,
did not issue the check until the end of July 1998. In view of these circumstances, it cannot be
said that [Seller] itself -- by commencing a premature action -- is responsible for the additional
costs. [Buyer] is therefore obliged to reimburse [Seller] for the costs in the amount of 3,360
DM caused by [Buyer]'s delay in payment. FOOTNOTES * All translations should be verified by cross-checking against the original text. For purposes of
this translation, the Plaintiff of Germany is referred to as [Seller]; the Defendant of France is
referred to as [Buyer]. Amounts in German currency (Deutsche Mark) are indicated as [DM]. Translator's note on other abbreviations: Brussels Convention = Convention of 27
September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche
[German Code on the Conflict of Laws]; HGB = Handelsgesetzbuch [German Commercial
Code]; ZPO = Zivilprozeßordnung [German Civil Procedure Code]. ** Ruth M. Janal, LL.M. (UNSW) is a PhD candidate at Albert-Ludwigs-Universität Freiburg.
Institute of International Commercial Law - Last updated October 30, 2007