Source: http://cisgw3.law.pace.edu/cisg/wais/db/cases2/020822g1.html
Timestamp: 2018-01-23 13:22:41
Document Index: 81287578

Matched Legal Cases: ['Art. 81', 'Art. 82', 'Art. 84', 'Art. 81', 'Art. 74', 'Art. 30', 'Art. 4', 'Art. 41', 'Art. 49', 'Art. 49', 'Art. 79', 'Art. 81', 'Art. 81', 'Art. 82', 'Art. 81', 'Art. 74', 'Art. 84', 'Art. 84', 'Art. 78']

Germany 22 August 2002 District Court Freiburg (Automobile case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/020822g1.html]
DATE OF DECISION: 20020822 (22 August 2002)
TRIBUNAL: LG Freiburg [LG = Landgericht = District Court]
CASE NUMBER/DOCKET NUMBER: 8 O 75/02
Key CISG provisions at issue: Articles 4 ; 41 ; 49 ; 74 ; 78 ; 79 ; 81 ; 82 ; 84 [Also cited: Article 30 ]
49A ; 49B [Buyer's right to avoid contract; Timeliness of buyer's avoidance notice];
78A ; 78B [Interest on damages; Rate of interest];
81A ; 81C [Effect of avoidance on obligations: obligations of both parties under Convention; Restitution by each party of benefits received];
82B1 [Buyer's inability to return goods in same condition: loses right to avoid unless inability not due to buyer's act or omission];
84A ; 84B [Seller bound to refund price must pay interest; Buyer must account to seller for benefits from goods]
Descriptors: Property in the goods ; Avoidance ; Damages ; Restitution ; Exemptions or impediments ; Interest
Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/711.htm>; Internationales Handelsrecht (1/2003) 22-24
English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at n.659; [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 71; 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. 81 para. 9d Art. 82 para. 19 Art. 84 para. 13
District Court (Landgericht) Freiburg
22 August 2002 [8 O 75/02]
The Plaintiff [buyer], an Italian limited liability company established in Circello (BN), bought a second-hand car from the Defendant [seller] in Emmendingen. The [buyer] is now suing for reimbursement of both the purchase price and its expenses on the car. Accepting an Internet offer from the [seller], the [buyer], on 3 May 2001, entered into a sales contract for purchase of a second-hand "VW Golf TDI" (license no: BE 356 GA; chassis identification no: WVWZZZ1JZWW171816) for the price of DM [Deutsche Mark] 25,000.00. On 4 May 2001, the [buyer] transferred DM 12,782.00 to the [seller]'s account at Raiffeisenbank Denzlingen. Thereafter, the [buyer] employed carrier Labagnara to deliver the car and license no., registration documents plus a record on the previous owners of the car, which had been handed over by the [seller] to the [buyer]'s office in Italy.
The buyer paid 700,000.00 It� [Italian Lire] to the carrier. The buyer spent 1,200,000.00 It� on lacquer works on the car and 1,159,000.00 It� on the exchange of worn-out car parts. [Buyer] also spent 500,000.00 It� for registration of the car under a new Italian licence number (BS 579 SL) in the name of a purchaser (costs for translations and necessary phone calls included). According to the [buyer], its expenditures on the car amount to 3,550,00.00 It� = 1,838.07 in total. On 31 May 2001, the vehicle was confiscated by the Italian District Police of Benevento (Traffic Police Division), because it had been first registered in Italy under license number AY 507 T X, and was recorded as stolen. On 12 March 2002, following a decree of the District Attorney of Benevento, the confiscated car was given back to the insurance company of its first owner. The first owner, through his father, had reported the car as stolen on 29 November 2000 in Bologna. The car had been registered in his name under license no. AY 507 T X. In a letter dated 29 August 2001, the [buyer] notified the [seller] of the situation and demanded reimbursement of the purchase price and restitution of its expenditures amounting to DM 3,000.00 by 12 September 2001. [Buyer] considers the sales contract void for reason of impossibility of performance, � 306 German Code of Civil Law (Bürgerliches Gesetzbuch; BGB): the [seller] was unable to transfer the ownership of the car to [buyer] as [seller] was obliged to do. Alternatively, the [buyer] rescinds the contract due to error.
The [buyer] bases its claim for reimbursement of both the purchase price and its expenses on � 812 German Code of Civil Law (Bürgerliches Gesetzbuch; BGB).
The [seller] objects by disputing that the car was stolen. [Seller] submits that on enquiry on 3 May 2001, the German Kraftfahrtbundesamt assured [seller] that the car was not listed as stolen. Also, its supplier M.T. provided it with a record of the car's previous owners and was in possession of all the previous license numbers.
Furthermore, the [seller] argues that a contractual disclaimer of responsibility also applies to defects in title which are at issue here.
Finally, the [seller] pleads that according to � 440 German Code of Civil Law (Bürgerliches Gesetzbuch; BGB), claims for reimbursement of the price could only be brought if the [buyer] returned the car to the [seller], or the [seller], in the case of the car being given back to its lawful owner would have to demand from the owner the latter's insurance benefits or be assigned the right to these benefits.
The [buyer]'s claim is admissible and justified. The [buyer] is entitled to reimbursement of the purchase price under Art. 81(2) CISG and of all its expenses on the car under Art. 74 CISG.
I. According to Arts. 1 and 4 CISG, the Convention applies to the sales contract between the [seller] and [buyer].
II. The [seller] failed to fulfil its obligation under Art. 30 CISG to transfer the ownership of the car to the [buyer]. As Art. 4(b) CISG does not provide for the conditions of a transfer of property, either German or Italian law applies. Either way, the transfer of the car failed: The Italian Codice civile (Code of Civil Law) does not acknowledge acquisitions of ownership in good faith. Although the German Code of Civil Law (Bürgerliches Gesetzbuch; BGB) does provide for acquisitions in good faith, the case at issue falls under the exceptions stated in � 935 I BGB: The [buyer] submitted substantial evidence (the police report on the theft; records on license number BE 356 CA, which had been assigned to a Fiat Panda; the police report on the confiscation and the decree of the District Attorney) that the car had been stolen from its lawful owner.
III. According to Art. 41 CISG, the seller is liable for defects in title. The disclaimer of responsibility did not become a part of the contractual agreement. Even if the disclaimer applied, it would not cover the seller's duty to perform.
IV. Art. 49 CISG provides the [buyer] with the option to declare the contract avoided. This it did on 29 August 2001. The fact that the [buyer] based its revocation on national regulations of the German Code of Civil Law (Bürgerliches Gesetzbuch; BGB) is irrelevant. The [buyer] avoided the contract within the time limit set by Art. 49(2)(b)(i) CISG: The car was confiscated on 31 May 2001. The court deems three months to be appropriate for the [buyer] to access the necessary information and to collect relevant material about the situation that led to the confiscation of the car.
V. The [seller] cannot rely on exceptions from its duty to perform under Art. 79(1) CISG. [Seller]'s failure to transfer the property is not due to an impediment beyond its control. On the contrary, it was the responsibility of the [seller] to inquire into the background of the car. If it did, the [seller] should have found out that the car had actually been stolen, and thus should have refrained from selling it. In this respect, the [seller]'s inquiry at the relevant German agency (the Kraftfahrtbundesamt) was insufficient. A report of the Kraftfahrtbundesamt only refers to events that happen within the Federal Republic of Germany, and only to those which had been recorded either by the Bundeskriminalamt (Federal crime agency) or by the Kraftfahrtbundesamt itself. The agency's response to the [seller] made clear that it is not equivalent to a record of ownership. The record of ownership, which the [seller] was provided with by its retailer is insufficient because it did not have any signature and it deviated from the registration documents in terms of the identity of the producer ("VM" instead of "VW") of product identification ("SGFM52JO24M4" instead of "SGFM52OO24M4") and in terms of the chassis identification number ("1 JZ" instead of "1 OZ").
VI. 1. The avoidance of the contract releases both parties from their contractual duties subject to any damages that may be due (Art. 81(1), sentence one, CISG). Under Art. 81(2), sentence one, CISG the [buyer] is entitled to restitution of the paid purchase price. According to Art. 82(1) and (2)(a), the duty to concurrent performance of mutual restitutions, stated in Art. 81(2), sentence two, CISG, does not provide for an exception to the [buyer]'s claim, because the impossibility of returning the car was not due to an act or omission of the [buyer].
2. Under Art. 74, sentence one, CISG, the [buyer] can claim restitution for expenses covering transportation costs, costs for refurbishing and for the registration of the car in the name of a new purchaser. These costs have not been disputed by the [seller].
3. The [buyer] is entitled to �14,620.07 in total, consisting of �12,782.00 as reimbursement of the purchase price and �1,838.07 as restitution of its expenditures. Yet following � 308 German Code of Civil Procedure (Zivilprozeßordnung, ZPO), it cannot be granted the full amount [ne ultra petitur]. Just as the [seller] cannot counterclaim for the return of the car itself, it cannot bring into account benefits the [buyer] derived from the goods under Art. 84(2) CISG. It could not be submitted, that buyer drew benefits from the possession of the car at all. The performance of the insurance company was directed to the first owner of the car; the income the [buyer] drew from reselling the car had to be returned to the purchaser in any event. Hence the [buyer] did not derive persisting benefits from the car. The claim for interest on the purchase price is justified under Art. 84(1) CISG; the claim for interest on damages is justified under Art. 78 CISG. As the CISG does not provide for an interest rate, it is appropriate to rely on � 288 I 2 BGB because this is the rule more favorable to the seller in comparison to corresponding regulations in Italian law, which grant higher interest rates.
* All translations should be verified by cross-checking against the original text. For the purposes of this presentation, the Plaintiff of Italy is referred to as [buyer]; the Defendant of Germany is referred to as [seller].