Source: http://cisgw3.law.pace.edu/cases/950524g1.html
Timestamp: 2016-12-07 10:36:02
Document Index: 746462506

Matched Legal Cases: ['Art. 47', 'Art. 49', '§ 6', 'Art. 8', 'Art. 47', 'Art. 49', 'Art. 84', 'Art.\n81', 'art. 8', 'Art. 49', 'Art. 47', 'Art. 51', 'Art. 47', 'Art. 45', 'Art. 33', 'Art. 47', 'Art. 51', 'Art. 7', 'Art. 49', 'Art. 84', 'Art. 27', 'Art. 28']

Germany 24 May 1995 Appellate Court Celle (Used printing press case) [translation available] Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography CISG CASE PRESENTATION Germany 24 May 1995 Appellate Court Celle (Used printing press case) [translation available] [Cite as: http://cisgw3.law.pace.edu/cases/950524g1.html] Primary source(s) for case presentation: Case text Case Table of Contents Case identification UNCITRAL abstract Classification of issues present Editorial remarks Citations to case abstracts, texts, and commentaries Case text (English translation) Guide to links contained in case presentations Case identification DATE OF DECISION: 19950524 (24 May 1995) JURISDICTION: Germany TRIBUNAL: OLG Celle [OLG = Oberlandesgericht = Provincial Court of Appeal] JUDGE(S): Unavailable CASE NUMBER/DOCKET NUMBER: 20 U 76/94 CASE NAME: German case citations do not identify parties to proceedings CASE HISTORY: 1st instance LG Lüneburg 1 July 1994 [affirmed] SELLER'S COUNTRY: Germany (defendant) BUYER'S COUNTRY: Egypt (plaintiff) GOODS INVOLVED: Used printing press Case abstract GERMANY: OLG Celle 24 May 1995 Case law on UNCITRAL texts (CLOUT) abstract no. 136 Reproduced with permission from UNCITRAL The [buyer], an Egyptian businessman, and the [seller], a German company trading in used printing machines, concluded an oral contract for the sale of nine used printing machines that were to be shipped to Egypt. The parties agreed upon two shipments, the first including six machines and the second three machines. According to the contract, the [buyer] was obliged to pay a considerable part of the contract price before the first shipment, which he did. But the first shipment contained only three machines. After having demanded shipment of the missing machines several times, the [buyer] declared that it had no longer any use for three of the still missing machines. The [seller] answered: "We are sorry that we shall not deliver the machines anymore which we have kept to your disposal . . .". With respect to the last three machines, the [buyer] fixed a final period of two weeks for delivery. The [seller] did not deliver within that period but offered shortly afterwards shipment against advance payment. The [buyer] refused this and declared, now seven weeks after fixing the additional delivery period, the contract avoided as far as the missing machines were concerned. The [buyer] demanded compensation for its loss as well as repayment of the sum by which the advance payment exceeded the price of the three delivered machines. The court found that the CISG was applicable as both parties had their places of business in different CISG Contracting States (article 1(1)(a) CISG), the sales contract had been concluded after the CISG had come into force for these States (article 100(2) CISG) and the application of the Convention was neither excluded (article 6 CISG) nor had the parties subsequently chosen a specific law to be applicable. The court found the [buyer's] repayment claim to be justified according to article 81(2) CISG. As the first three missing machines were concerned, the parties had mutually terminated the contract. The [buyer] had refused to accept delivery and the [seller] had but regretted the [buyer's] refusal. A reasonable person (article 8 CISG) could have understood the [seller's] letter as an acceptance of the termination of the contract. With regard to the last three machines the contract was avoided by the [buyer's] unilateral declaration (articles 49(1)(b), 47(1) and 51(1) CISG). The [seller] had breached the contract by not delivering the machines within the time fixed by the contract (article 33(b) CISG), thus giving the [buyer] the right to fix an additional period of time (articles 49(1)(b) and 47(1) CISG). The [buyer] was, therefore, entitled to declare the contract avoided even if the additional delivery period of two weeks was perhaps too short. According to the court, the period of seven weeks between announcement and actual declaration of avoidance was reasonable. The fact that the [seller] had offered shipment against advance payment in the meantime was found to be irrelevant since advance payment of the full contract sum was contrary to what had been agreed. The court finally ordered the [seller] to pay interest. According to article 84(1) CISG, interest is due from the date on which the price was to be paid. The court held that the interest rate was to be determined in accordance with the applicable contract law which in the present case was German law. As the [buyer] had failed to justify a higher interest, the applicable interest rate was bound to be 4% (article 288 German Civil Code). Go to Case Table of Contents Classification of issues present APPLICATION OF CISG: Yes [Articles 1(1)(a) and 100(2)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles 8 ; 47(1) ; 49(1) ; 51(1) ; 78 ; 81(2) ; 84(1) [Also cited: Articles 1 ; 6 ; 7 ; 33(b) ] [Also perhaps relevant: Article 25 ] Classification of issues using UNCITRAL classification code numbers: 8B [Intent: interpretation based on objective standards (understanding of reasonable person of same kind as the other party in the same circumstances as the other party]; 47A31 [Buyer's right to fix additional period for performance: must set reasonable, specific and final period]; 49A21 [Buyer's right to avoid contract: seller does not deliver or refuses to delivery within additional period set under Article 47]; 51A1 [Delivery or conformity of only part of goods: rules of Articles 46 to 50 apply to part missing or non-conforming]; 81C [Effect of avoidance on obligations: restitution by each party of benefits received]; 84C [Seller bound to refund price must pay interest] Descriptors: Intent ; Nachfrist ; Avoidance ; Delivery ; Restitution ; Interest Go to Case Table of Contents Editorial remarks Excerpt from Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 378-379
"Article 47 gives the buyer the right to grant additional time to the seller for performance. The failure
of the seller to perform within this additional period of time permits the buyer to avoid the contract. This request for additional time, known as nachfrist notice in German law, is commonly found in the
civil law legal systems.[480] The underlying premise behind the concept is that delayed
performance does not necessarily translate into a material breach. National courts called upon to
interpret the CISG's provisions with respect to breach of contract have concentrated on two issues
raised by Article 47. The first issue is what constitutes a reasonable period of time granted by the
buyer in order for the seller to complete performance? The time extension must be reasonable in
length in order to prevent buyers from avoiding contracts on the basis of inconsequential delays in
"The three national courts that have addressed this issue have taken somewhat different approaches. [This] German court focused upon the need for specificity in setting the time extension.[481] A
buyer granted an eleven [page 378] day extension to a seller to deliver all components of the printing
machinery that was the subject matter of the contract. In upholding the buyer's right to declare the
contract to be in breach, the court held that the specific period of additional time established by the
buyer for performance was not unreasonable. Thus, the buyer was entitled to avoid performance of
the contract. Other courts have permitted buyers to avoid sales contracts on the basis of notices that
were not specific with respect to the additional period of time granted to the sellers for performance. A French court for example, permitted a buyer to avoid performance of a sales contract for high
technology machinery on the basis that the seller advised the buyer of its intent to repair the
machinery subsequent to its delivery.[482] The failure of the seller to effect adequate repairs
pursuant to its promise justified the buyer's attempt to avoid the contract even in the absence of a
specific time granted by the buyer for such repairs.[483] Under this version of Article 47, the
time extension need not be precise but rather only capable of judicial interpretation as reasonable.
[484]" [page 379]
481. See OLG Celle 20 U 76/94, May 24, 1995 (F.R.G.), available at
<http://cisgw3.law.pace.edu/cases/950524g1.html> [English translation by André Corterier, translation edited by Dr. John Felemegas].
482. See Giustina Int'l Sp.A. v. Perfect Circle Europe SARL, CA Versailles, 1e ch. Jan. 29, 1998, supra note 377 [available at
<http://cisgw3.law.pace.edu/cases/980129f1.html>].
483. Id. See also, LG Ellwangen 1 KfH O 32/95, Aug. 21, 1995 (F.R.G.), available at
<http://cisgw3.law.pace.edu/cases/950821g2.html> [English translation by Ruth M. Janal, translation edited by Camilla Baasch Andersen] (German court determined that the period of time
established by a German buyer for delivery of conforming goods by a Spanish seller of paprika was
reasonable on the basis that the buyer only declared the contract to be avoided two weeks after the
expiration of the original additional period of time to perform).
484. Furthermore, even if the initial period of time granted by the buyer is not reasonable, it may
be rendered reasonable by delays in the buyer's declaration of avoidance. However, buyers would
be wise to note that general demands to the seller to perform "promptly" or "as soon as possible" may
be insufficient to meet the requirements of Article 47.
Go to Case Table of Contents Citations to other abstracts, case texts and commentaries CITATIONS TO OTHER ABSTRACTS OF DECISION English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=122&step=Abstract> Italian: Diritto del Commercio Internazionale (1996) 650-651 No. 122 Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 276-278
CITATIONS TO TEXT OF DECISION Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/152.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=122&step=FullText> Translation (English): Text presented below CITATIONS TO COMMENTS ON DECISION English: Van Alstine, 146 University of Pennsylvania Law Review (1998) 780-781 n.387 [general principles: good faith]; Ferrari, International Legal Forum (4/1998) 138-255 [215 n.694 (implicit exclusion of CISG), 253 n.1079 (interest issues)]; Honnold, Uniform Law for International Sales (1999) 316 [Art. 47 (relationship between "Nachfrist" notice and avoidance)], 329 [Art. 49 ("Nachfrist" and avoidance)]; Koneru, 6 Minnesota Journal of Global Trade (1997) 123-138 [comments on interest rulings in this case and other cases]; Boghossian, Pace Review of the Convention on Contracts for the International Sale of Goods (1999-2000) n.489; for analysis of the remedy of avoidance citing this and other cases, go to Kazimierska, Pace Review of the Convention on Contracts for the International Sale of Goods (1999-2000) n.n.151, 280; Kimbel, 18 Journal of Law and Commerce (1999) 301-331 (analysis of the remedy of Nachfrist citing this and other cases: 311 n.36, 321 n.83, 323 n.87, 323 n.90); Spanogle/Winship, International Sales Law: A Problem Oriented Coursebook (West 2000) [avoidance 247-264 (this case at 257-259)]; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) § 6-10 n.95; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.481, 655, 801, 808; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 paras. 2, 47 Art. 47 paras. 6, 9 Art. 49 paras. 20, 24 Art. 84 para. 13; Pilar Perales, Case cited at n. 48 in Presentation on Nachfrist at September 2005 seminar in Singapore; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at pp. 357, 386
Part of the following case translation (namely, the introductory material and sections 1 through 2.2.1) belong to Spanogle/Winship, International Sales Law: A Problem Oriented Coursebook (West 2000) [257-259] and is reproduced with the permission of the West Group. To order Spanogle/Winship text, go to the West Group on-line store <http://lawschool.westgroup.com>. The remainder of the translation [*] (namely, sections 2.2.2. through 5) has been performed by Andre Corterier.[**] Introductory material
[In 1992, a German dealer in used printing equipment concluded a contract with an Egyptian
firm for the sale of five offset printing presses and four smaller pieces of equipment. The
German seller agreed to deliver the items in two installments. The first installment was to
include three of the presses and two smaller items, while the remaining equipment was to be
sent in the second installment. The purchase price included freight and insurance. The buyer
agreed to pay the total purchase price as follows: 350,000 DM [Deutsche Mark] before
shipment of the first installment, 130,000 DM against documents, 90,000 DM before the
second shipment, and the last 85,000 DM against documents. [Before the first installment the buyer paid the seller 464,000 DM, which covered the purchase
price of the first three presses plus 70,000 DM. The buyer made this payment together with a
request that the seller include in the first installment one of the small items that was to be sent
in the second installment. The seller accepted the payment but responded that the additional
item would mean finding another container and the seller did not have enough time to do so.
As a consequence, the first installment included only the three presses. [The seller then delayed sending the second installment. After some consultations, the seller
informed the buyer on 1 October 1992, that the seller was unable to acquire the two presses
not yet delivered but could deliver three of the smaller items. The buyer rejected the offer and
asked for its money back. With the notice of rejection on 4 December 1992, the buyer sent a
notice giving the seller until 16 December to perform. The seller did not perform within this
period and after subsequent negotiations failed, the buyer declared the contract avoided. The
buyer brought a legal action to recover damages for the delay, for partial non-delivery, and for
return of the 70,000 DM. The [Lower Court] rendered judgment for the buyer. The seller
appealed.] Ruling of the Appellate Court
The appeal is rejected. The [Lower Court] correctly held that the [buyer] is entitled to restitution. 1. [The Appellate Court held that the CISG governed.] 2. The [buyer's] claim to restitution is based upon the CISG. The basis of the claim is Art.
81(2), which provides that a party who has performed the contract in whole or in part may
claim restitution from the other party if the contract is avoided. This is what happened here, as
long as the [seller] had not yet fully performed the contract by its partial deliveries. 2.1. With regard to the three small machines, the parties agreed to cancel the contract. The
[buyer] informed the [seller] by his communication of 22 October 1992, that the three
machines were no longer needed because the [buyer's] own [customer] had canceled its
purchase contract for those machines. The [seller] responded: "We thank you for your
communication of 22 October 1992. As for your first point, we express our regret that we are
not to deliver to you the machines, which we have kept ready for delivery to you." At the same
time, the [seller] offered the [buyer] two substitute machines. This communication was
confusing and must have led the [buyer] to understand that the [seller] reluctantly agreed to
rescission of the contract with respect to the three smaller machines. If the [seller] intended to
say that he would stand upon the contract, he should have made this unmistakably clear to the
buyer (CISG art. 8(2)). The communications of 28 October 1992, should be read as an
agreement to a partial avoidance of the contract. 2.2. The [buyer] likewise effectively avoided the contract with respect to the other
machines which [seller] had not delivered. This was done at the latest by a communication of
the [buyer's] attorney on 26 January 1993, which rejected any further delivery and demanded
the return of the excess price already paid. The [buyer] was entitled to do so. 2.2.1. Pursuant to Art. 49(1)(b), the [buyer] may declare the contract avoided in the
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 the [seller] declares that he will not
deliver the goods within the period so fixed. Where the [seller] has already delivered part of the
goods, this rule also applies to that part of the goods which are missing (Art. 51(1)). The
[buyer] gave notice pursuant to Art. 47(1) by the communication of his attorney on 4
December 1992. Such a notice is authorized if the [seller] has not satisfied his obligations
under the contract (Art. 45(1)(a)). Where the contract fixes a period of time for delivery, the [seller] must deliver the goods
within that period (Art. 33(b)). The [seller] failed to satisfy this obligation. The [seller] was
obligated to deliver the missing machinery by no later than August. The Lower Court's finding
that the first installment was due by the end of May and the second by the end of August is
convincing. The [buyer] was entitled to give a notice fixing an additional period of time for the
seller to perform. There remains the issue of whether the period fixed was too short. The [buyer] fixed a period
from the time of the notice on 4 December to the time fixed in the notice of 16 December, a
period which required shipment within eleven days. With hindsight, this period was possibly too short to organize carriage by sea from [X] to [Y],
given that the [seller] was dependent on the schedule of the ship and the existence of free space
for freight. This does not make the notice ineffective where the notice has merely extended a
period of time (von Caemmerer/Schlechtriem/Herber, Art. 47, para.12). In any case, when the
[buyer] gave notice that the contract was avoided on 26 January 1993, a sufficiently long time
(seven weeks) had elapsed. The [buyer] may declare the contract avoided even though the
seller in the meantime has declared by its letter of 22 November 1992, that it was ready to
deliver part of the goods. That letter offered to ship four of the machines originally ordered
(for three of which there was an agreed partial avoidance) but it offered to substitute a
different press for one of the presses originally agreed upon and the letter failed to mention
(apparently by mistake, if one understands the [seller's] argument) the last of the machines
ordered. If the [seller's] offer to deliver conformed with the contract, the [buyer] would not have the
right to avoid the contract unless he could show that a partial delivery was a fundamental
breach and therefore the missing press entitled him to avoid the entire contract (Art. 51(2)). On
the other hand, the [seller's] obligation of good faith (Art. 7(1)) required him to await the
[buyer's] answer to his offer before shipping. However, the [seller's] offer was not in accordance with the contract. The [seller] wanted
prepayment for the total price of the machines offered. This did not conform with the terms of
the contract, which provided that part of the price was to be paid upon the tender of
documents. The [buyer] was therefore entitled to declare the contract avoided by the
communication of 26 January 1993. The [seller's] subsequent announcement on 3 February
1993, that he would be able to deliver the original press, came too late. In any event, this latter
communication again demanded prepayment of the purchase price. 2.2.2.	Only for the sake of completeness, it should be pointed out that [buyer's] right to demand repayment - if the right to this remedy had not already been created by
[buyer's] rightful declaration of avoidance on 26 January 1993 - would have been established,
insofar as [seller] sold the contractual goods to other parties, based on that sale. In the [seller]
having admitted having sold the goods to another party, lies the notice that [seller] is now
incapable of fulfilling its contractual obligation at all. Such notice entitles the [buyer] to avoid
the contract, even without setting an additional period of time ("Nachfrist") (von
Caemmerer/Schlechtriem/Herber, Art. 49, para. 6). It is without consequence whether [seller]
saw itself forced to sell elsewhere to minimize its damage. This would not change the fact that
[buyer] is entitled to avoid the contract and demand repayment of the down payment, as
[seller] is no longer able to deliver.
The contention of [seller] according to which it was still able to deliver, as [buyer] was not
entitled to the specific machines mentioned in the contract, but only to delivery of comparable
goods, cannot prevail. The contention is contrary to the clear wording of the contract, in which
the machines are identified by serial number - as far as this is missing in regard to position no.
4, this still regards, according to [seller's] own statement, an individual machine, which could
not be examined only because it was in England - and to the fact that [buyer] had individually
examined the machines with the exception of position no. 4.
3. Again, only for the sake of completeness it is pointed out that the claim would be well
founded in internal German sales law, as well. The [buyer's] entitlement to repayment would
arise in respect to positions 6, 7 and 8 of the respective termination agreement (section 346
BGB [*]) and otherwise from section 326 BGB, according to which, if one party to a mutual
contract is in arrears with its obligation, the other party can set a period of time with the
declaration that it will refuse to accept performance thereafter, and is, after the expiration of
the period so fixed, entitled to demand full compensation or to withdraw from the contract.
The [buyer], who has demanded full compensation, can demand restitution for its expenses
incurred through prior performance of its part of the contract as minimum damages.
The prerequisites of section 326 BGB are met. The [seller] was in arrears at the latest since the
telephone call between the witness [...] and Mr. [...] on 29 September 1992, in which the
witness declared that, if the [seller] had delivery problems, the [buyer] would no longer need
the machines, because the [buyer] wanted to sell the machines itself. In the declaration that the
delivery of the machines was urgent for [buyer] and the announcement - or threat - that the
[buyer] would be unable to use the machines if they were not delivered soon, a decisive and
unequivocal request for performance was implicit, and thus a notice putting the recipient
[seller] in arrears. The setting of a period of time occurred with the attorney's letter of 4
As an alternative cause of action, BGB section 325 (para.1, first sentence), which gives rise to
a cause of action for full compensation in cases of post-contract culpable impossibility of
performance, intervenes regarding the positions of the contract which referred to the purchase
of specific, individual machines which the [seller] has already otherwise sold. For insofar the
[seller] has culpably brought about its own inability to perform, that gives rise to the same legal
consequences as the post-contract culpable impossibility.
4. The entitlement to interest of the [buyer] arises from CISG Art. 84(1), according to
which the [seller], if it must repay the purchase price, must also pay interest on it from the day
[seller] received payment. For the amount of interest, which is not governed by the CISG,
internal German law is applicable. Questions that concern topics regulated by the CISG which
are not explicitly dealt with in the Convention, must, in the absence of general principles, be
solved according to the law applicable according to the law of conflicts of law. As the parties
have not made a choice of law, the applicable law follows the emphasis of the contract, which
is presumed to be where the party which is to perform the characteristic obligation of the
contract has its place of business (EGBGB [*] Art. 27, para.1; Art. 28, para.2).
In a sales contract, the obligation characteristic to the contract, the delivery of the purchased
goods, is to be performed by the [seller], in this case the defendant, which has its place of
business in Germany. According to BGB section 288 (para.1, first sentence) interest for late
payments amounts to 4%. While a higher interest was claimed by the [buyer] as damages, no
proof of such damages was offered. The appeal of the [seller] against the verdict of the Lower
Court to repay the purchase price, has to be denied according to the above.
5. The [seller] bears the costs of its unsuccessful appeal (ZPO [*] section 97, para. 1). The
decision concerning preliminary enforcement follows from ZPO paras. 708 (No.11) and 713.
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