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Timestamp: 2017-07-25 16:34:23
Document Index: 755838829

Matched Legal Cases: ['Art. 14', 'Art. 57', 'Art. 8', 'Art. 14', 'Art. 55', 'Art. 57', 'Art. 14', 'Art. 8', 'Art. 55', 'Art. 14']

Austria 10 November 1994 Supreme Court (Chinchilla furs case) [translation available] Go to Database Directory || Go to CISG Table of Contents
Austria 10 November 1994 Supreme Court (Chinchilla furs case) [translation available] [Cite as: http://cisgw3.law.pace.edu/cases/941110a3.html]
DATE OF DECISION: 19941110 (10 November 1994) JURISDICTION: Austria TRIBUNAL:	Oberster Gerichtshof [Supreme Court] JUDGE(S): Dr. Melba (presiding judge), Dr. Graf, Dr. Schinko, Dr. Tittel, Dr. Bauman CASE NUMBER/DOCKET NUMBER: 2 Ob 547/93 CASE NAME: Austrian case citations do not generally identify parties to proceedings CASE HISTORY: 1st instance BG Leibnitz (4 C 2586/91 f) 27 October 1992 [CISG overlooked];
2nd instance LGZ Graz 4 March 1993 [affirmed] SELLER'S COUNTRY: Germany (plaintiff) BUYER'S COUNTRY: Austria (defendant) GOODS INVOLVED: Chinchilla furs Case abstract
The Austrian buyer ordered in Germany a large quantity of chincilla pelts of
middle or better
quality at a price between 35 and 65 German Marks per piece. The German
249 pelts. The Austrian buyer, without opening the packaged goods, sold
them further to an
Italian pelt dealer at the same price. The Italian dealer returned 13 pelts
arguing that they
were of inferior quality to that agreed. The Austrian buyer sent to the
German seller an
inventory list setting out the rejected pelts and refused to pay their price
arguing that it had
sold the pelts further on behalf of the German seller as its agent.
The first instance court ordered the Austrian buyer to pay the price of the
rejected pelts, since
the pelts were as specified in the contract. Having found that pelts of
middle quality were sold
in the market at a price up to 60 German Marks, the court considered that a
price of 50
German Marks per pelt was a reasonable one. The Court of Appeal confirmed that decision. It found that CISG was
applicable since the
parties had their places of business in States parties to the Convention and
the dispute fell within the scope of application of the Convention. The
further found that a valid contract had been concluded on the basis of the
order, which was
sufficiently definite both as to the quantity and the quality of the goods. The Court of Appeal further found that the agreement as to the price range
(35 to 65 German
Marks) did not preclude the valid conclusion of a contract since under
Article 55 of the
Convention, if the price is not explicit or implicit in the contract, the
parties are considered to
have agreed on the usual market price. The Court of Appeal noted that the
German Marks per pelt, which had been established by the court of first
market price, had not been questioned by the parties. As to the currency of
payment, the court
found that payment was due in German Marks, since payment should be made at
business of the German seller (Article 57 CISG).
The Supreme Court confirmed the decision of the Court of Appeal. It found
Convention was applicable since an international sales contract in the sense
of Article 1(1)(a)
CISG was involved. It also found that the order was sufficiently definite
to constitute an offer
under article 14 CISG, since it could be perceived as such by a reasonable
circumstances as the seller (Article 8(2) and (3) CISG). In determining
sufficiently definite, the Supreme Court took into consideration the
buyer who accepted the delivered goods and sold them further without
quality or quantity. In particular, the price was found to be sufficiently
definite, so as to make
the application of Article 55 CISG unnecessary. As to the place of payment,
Court found that it was the place of business of the seller since the goods
and no third party had been appointed to receive payment in Austria on
APPLICATION OF CISG: Yes [Article 1(1)(a)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles 8(2) and 8(3) ; 10 ; 14(1) ; 55 ; 57(1)(a) [Also cited: Articles 54 ; 58 ; 99 ] [Also relevant: Article 6 ] Classification of issues using UNCITRAL classification code
numbers: 8B1 ; 8C [Intent: interpretation based on objective standards
(understanding of reasonable person of
same kind as other party); Interpretation in light of surrounding
circumstances];
14A1 [Criteria for an offer (basic criterion: intention to be
case of acceptance): definiteness
of key conditions];
55A [Open-price contracts: enforceability of agreements that do
not make provision for the price];
57A [Place for payment: in absence of agreement, payment at
seller's place of business]
Descriptors: Intent ; Offers ; Open-price contracts ; Payment, place of Go to Case Table of Contents
Excerpts from analysis of Austrian case law by Willibald Posch & Thomas Petz published
in the Vindobona Journal.* [* "Austrian Cases on the UN Convention on Contracts for the International Sale of Goods", 6
Vindobona Journal of International Commercial Law and Arbitration (2002) 1-24. The ruling of 10
November 1994 of the Oberster Gerichtshof [Supreme Court] of Austria is analyzed by Posch & Petz at
pages 4, 11 and 19 of this commentary. The commentary also contains other analyses of Austrian case law
on CISG issues addressed.]
Open-price contracts. "The obscure relationship of Articles 14 and 55 CISG and the
question whether an offer has to be definite to create a valid contract was the central issue
in the Supreme Court's decision of 10 November 1994. In this case a contract for; the sale
of chinchilla furs was concluded between a German breeder and an Austrian who
occasionally traded with furs without an agreement on the precise quantity and price. The
only agreement between the parties was that for furs of average and good quality, a price
of 35 to 60 German Marks per item should be paid.54
54. Under the terms of this contract, the breeder delivered an amount of 249 furs of
predominantly average quality. Immediately after having received the furs, the buyer
itself sold and delivered the furs in their original packages to an Italian merchant.
However, upon arrival the Italian buyer rejected 13 of the 249 furs on grounds of non-conformity with the quality contracted for. In turn, the Austrian trader complained about
these 13 furs to the German breeder. At the same time, [seller] transferred 2,400 German
Marks to the German breeder, no more than 10 Marks for one fur. The German breeder
then sued the Austrian trader for the payment of another 9,500 German Marks. The basis
of the breeder's calculation of total payments due was a price of 50 German Marks for
one fur: a difference to the Austrian buyer's calculation of 40 German Marks for one fur.
"The Supreme Court found that, according to its Articles 1(1)(a) and 10(b), CISG applied
to the facts of the case and came to the conclusion that the offer was sufficiently definite.
Whilst the Court of Appeal reached this result on the basis of Article 55, the Supreme
Court resorted to Article 14 CISG finding that the criteria of definiteness of an offer are
met if the parties have implicitly fixed both the quantity and the price in a way that makes
it possible to identify the parties' intention. As the parties had agreed on a price margin,
there was a sufficiently definite indicator for determining the price in respect of the
quantity and quality of the furs that the German breeder had delivered. The Court was not
forced to search for a solution of the well-known inconsistency of Articles 14 and 55
CISG.55" [page 11]
55. According to the Court, it could be disregarded, whether a determination of the
contract price might be possible by fictitiously assuming that the parties have accepted the
price that is generally charged for the relevant goods at the time of the conclusion of the
Payment, place of. "[I]n an obiter dictum, [the Court] dealt with the Convention's various
provisions of the place of performance. Thereby, it particularly mentioned Article
57(1)(b), according to which payment in exchange of handing over of the goods or of
documents is to be made at the place where the handing over takes place. However, from
the facts of the case it followed that the chinchilla furs were delivered by postal service
and no third person was authorised to collect the payment, so that Article 57(1)(b) was
inapplicable. Consequently, according to Article 57(1)(a) CISG, the seller's place of
business was determined as the relevant place of payment." [page 19]
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=110&step=Abstract>; Forum des Internationalen Rechts /
The International Legal Forum [= Forum] (English language edition) 1 (1996)
88-89 French: Seidl-Hohenveldern, [1998] Journal du Droit International 995
German: [österreichisches] Recht der Wirtschaft (öRdW) 1995,
14-15; ecolex 1995, 94; Schweizerische Zeitschrift für Internationales
und Europäisches Recht (SZIER) / Revue suisse de droit international et de
droit européen 1996, 50-51
miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 264-265
Translation: (English): Text presented below Translation (Portuguese): CISG Brazil database <http://www.cisg-brasil.net/downloads/casos/chinchilla_furs_case.pdf>
English: Honnold, Uniform Law for International Sales (1999) 157 [Art. 14 (goods received in spite of failure to agree on price)], 360 [Art. 57]; Van Alstine, 246 University of Pennsylvania Law Review (1998) 772 n.354 ["finding an enforceable contract where a reasonable person would have been able to determine the price under the given circumstances, although avoiding the specific interaction of articles 14(1) and 55"]; Bonell/Ligouri, Uniform Law Review (1996-1) 147 [159 n. 62]; T.S. [Simons], Forum (English language edition) 1 (1996) 89-90; Karollus, Cornell Review of the CISG (1995) 51 [60] [brief comments on open-price issues]; Spanogle/Winship, International Sales Law: A Problem Oriented Coursebook (West 2000) [formation of contract: the price 110-114 (case at 111-112), buyer's performance paying the price 213-216 (case at 214)]; Gabuardi, Open price contracts (June 2001); Willibald Posch & Thomas Petz, an English translation of the Posch & Terlitza
German commentary cited below that has been published in 6 Vindobona Journal of
International Commercial Law and Arbitration (2002) 1-24, at nn. 15-17, 53-55 and 97
[Go to this commentary in either its English or German text for an excellent
comprehensive analysis of Austrian case law on the CISG.]; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) §: 3-2 n.20; §: 3-3 n.31; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.207, 219-222, 227; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 8 paras. 47, 51 Art. 14 paras. 3, 5 Art. 55 para. 7 Art. 57 para. 3; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 27, 151, 157; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 131 Finnish: Huber/Sundström, Defensor Legis (1997) 747 [751-752]
French: Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale
(L.G.D.J., Paris: 1995) 63; Witz, Tilburg Lectures (1998) 159 [166]
German: Karollus, [österreichisches] Juristische Blätter 1995,
254-256; Magnus, Praxis des internationalen Privat- und Verfahrensrechts
(IPRax) 1996, 145-148; Posch, Emptio-Venditio Internationes, Neumayer ed.
(Basel 1997) 89 n.2, 91 n. 13, 101-103; T.S. [Simons], Forum 1 (1996) 90-92; Schlechtriem, Internationales UN-Kaufrecht (1996) 46-47; Willibald Posch & Ulfried Terlitza, Internationales Handelsrecht (2001) 47-56,
at relevant nn.
[For an in-print adaptation of this translation accompanied by the full text of the commentary by Posch & Petz cited above, go to 6 Vindobona Journal of International Law and Arbitration (2002) 147-152. To help persons cite this case translation to either this Internet publication or the Vindobona publication, we have included paginations that accord with those of the Vindobona Journal.] On 27 October 1992, the Bezirksgericht Leibnitz [Court of First Instance] ruled in favor of the
Claimant [seller]. Upon appeal by the defendant [buyer] the Landesgericht Graz in its function
as Court of Appeal affirmed the judgment of the Court of First Instance on 4 March 1993. The
matter involves a claim of sA 66,740 [Austrian schillings].
The defendant [buyer] has appealed against the ruling of the Court of Appeal. The claimant [seller], the breeder of fur animals, is represented by Dr. Harald Gerl, attorney from
Graz. The defendant [buyer], an insurance agent, is represented by Dr. Kurt Klein and Dr. Paul
Wuntschek, attorneys from Graz. The Oberster Gerichtshof [Supreme Court] is composed of the Supreme Court's Senate, Dr. Melber, as the chairman and Dr. Graf, Dr. Schinko, Dr. Tittel and Dr. Baumann as accompanying judges. Upon the defendant's [buyer's] appeal the Oberster Gerichtshof, in its function as court of last
resort and sitting in camera has come to the following: [page 147]
The [second] appeal [of the buyer] is rejected. The defendant [buyer] is ordered to reimburse the claimant [seller] for the costs of the proceedings in this final instance set at sA 4,346.80 (including sA 724.80 of turnover tax) within fourteen days. FINDINGS
In April 1991, the seller, resident in Germany, sent to the buyer, resident in Austria, 249 Chinchilla furs. The buyer sold them to an Italian fur trader and paid to the seller an (converted) amount of DM 2,400 [German marks]. The seller demands further payment of sA 66,740 on the grounds that it had sold to the buyer furs of constantly good quality at a price between DM 35 and DM 65 per fur. The buyer seeks rejection of the claim on the grounds that it had sold on the furs on account of the seller and could not get a higher purchase price than DM 2,400. The Court of First Instance sustained the seller's claim relying on the following facts:
In March 1991 the buyer ordered from the seller, who breeds Chinchilla in Germany, a larger
number of Chinchilla furs at an exhibition in Fuerstenstein [Germany]. The parties stipulated that
the furs should be of medium or superior quality at a price range between DM 35 and DM 65 per
item. At the beginning of April, the seller packaged a total of 249 furs 236 of which were of
average (medium) and 13 of which were of inferior quality, and sent them to the buyer. On 6 April 1991, the buyer delivered these packaged furs to an Italian fur trader where the packages were
opened for the first time. The Italian fur trader purchased a total of 236 furs. The buyer sent to the
seller a (collective) fur-list in which it complained of and listed by item numbering the 13 furs
that had been excluded. Apart from that [buyer] did not raise any other complaints with the seller. Chinchilla furs of medium quality are traded at a price of up to DM 60 per item. In terms of law, the Court of First Instance decided that the buyer had to perform the sales contract
entered into by the parties and thus was to pay the residual purchase price. In accordance with
paragraph 273 ZPO [Austrian Code of Civil Procedure], a unit price of DM 50 was deemed adequate
for 236 furs of medium quality. The Court of Appeal rejected the buyer's appeal against this decision. The Court argued that the matter contained international aspects and assumed that the parties had
neither made a choice of law in the sense of paragraph 35 IPRG [Austrian Private International
Law Act] nor excluded the application of the CISG. As the parties to the contract had their places
of business in different Contracting States and the subject [page 148] matter of the contract fell within the
scope of the Convention, the CISG was directly applicable.
The Court reasoned that, by ordering from the seller a larger number of Chinchilla furs of medium
or superior quality at a price range of DM 35 to DM 65 in March 1991, the buyer had made a
proposal to the seller for concluding a contract, which had been sufficiently definite in light of the
stipulations made on the goods, their quantity and quality. The seller had accepted this offer so that
the sales contract was validly concluded between the parties.
[According to the judges], the agreed price range between DM 35 and DM 65 did not affect the
valid conclusion of the contract. According to Article 55 CISG, it would be assumed that where
a contract has been validly concluded but does not expressly or implicitly fix or make provision
for determining the price, the parties are considered, in the absence of any indication to the
contrary, to have impliedly made reference to the price generally charged at the time of the
concerned. The parties had referred to the price generally charged for such furs as were sold to the
buyer. Under the contract and the Convention, the buyer was therefore obliged to pay the purchase
price. In lack of a provision to the contrary, the buyer had to pay the seller at its place of business
as soon as seller delivered the goods to buyer. As it was established that Chinchilla furs of medium
quality are traded in the market at a price up to DM 60, and, due to the fact that the decision of
the Court of First Instance to set the purchase price at DM 50 per item was not challenged, this
purchase price -- also in application of paragraph 273 ZPO -- was to be regarded as the basis for
the buyer's obligation to pay. It was not established that furs of inferior quality had been delivered.
The buyer was facing a true foreign currency debt because the place of performance was foreign [to buyer]. In these circumstances, the creditor [seller] was entitled to request a payment order in Austrian shillings instead of German Mark. Taking into account the part payment already made and the exchange rate applicable at the date the payment became due, the remaining purchase price amounted to sA 67,097.20; the buyer could not regard itself prejudiced by an order to pay an amount of only sA 65,800. The Court of Appeal allowed the further revision on points of law because no leading case law on
the Vienna Convention on Contracts for the International Sale of Goods existed so far. In its appeal, buyer argues that the decision [of the Appeal Court] was based on legally incorrect considerations and requests that it be changed into a full rejection of the seller's claim. Alternatively, buyer requests the setting-aside of the decision. The seller demands rejection of the appeal. [page 149]
Leave to appeal on questions of law is granted because there is indeed no leading case law on the
United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980.
The United Nations Convention on Contracts for the International Sale of Goods (hereafter CISG)
was concluded on 11 April 1980. Pursuant to Article 99(1) it became effective as of 1 January
1988. Pursuant to Article 99(2) the Convention came into effect for Austria on 1 January 1989.
The CISG was published in BGBl 1988/96 [official Austrian legal gazette]. The Federal Republic
of Germany joined the Convention with effect from 1 January 1991.
The basic condition for the application of the CISG is the existence of an "international" sales contract.
Sales contracts on goods must be concluded between parties who have their places of business in
different Contracting States (see Karollus, UN-Kaufrecht, 20, 28). The term "sales contract" is
not expressly defined but it refers to a contract, which obliges one party (seller) to deliver goods
and transfer the right of property, and the other party (buyer) to pay the purchase price and accept
delivery. It therefore is an exchange relationship "goods for money". "Goods" means moveable
property (Karollus, 20 et seq.). A further condition is that the parties to the contract have their places
of business in different States. "Place of business" is every location from which [a party]
participates in economic transactions in a somehow independent manner. If a party does not have
a place of business, e.g., a natural person, pursuant to Article 10(b) CISG, the habitual place of
residence becomes relevant.
It has been established that the parties have their habitual places of residence in two Contracting
States to the Convention; thus the CISG is applicable in accordance with Article 1(1)(a), because
neither had the parties made a choice of law nor had they excluded the application of the
Convention. Further, the sales contract on furs, a sales contract on moveable property, was
concluded at a time after the Convention came into force. The Court of Appeal was right to consider the CISG applicable. It was also correct in taking the
view that by ordering a larger amount of Chinchilla furs, the buyer had made an offer to the seller
for the conclusion of a sales contract.
According to Article 14 CISG, a proposal to conclude a contract addressed towards one or more
specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the
offeror to be bound in case of acceptance. A proposal is sufficiently [page 150] definite if it indicates the
goods and expressly or implicitly fixes or makes provision for determining the quantity and the
Therefore, the content of the proposal must be sufficiently definite. This is the case where a
proposal indicates the goods and expressly or implicitly fixes or makes provision for determining
the quantity and the price. The condition is fulfilled where the essentialia negotii are expressly
fixed in the offer; however, the second sentence of Article 14(1) CISG also allows for an "implicit
determination", i.e., [giving] criterions which allow for an interpretation that results in a definite
price, definite goods or (and) their quantity (Schlechtriem in v. Caemmerer/Schlechtriem
Kommentar Art. 14 no. 4). For the validity of the offer [i.e., whether it can be validly accepted],
it also suffices that the required minimum content can be understood as being sufficiently definite
by "a reasonable person of the same kind" as the other party (offeree) would have "in the same
circumstances" (Art. 8(2) CISG). According to Article 8(3) CISG, in determining the intent of a
party or the understanding a reasonable person would have had, due consideration is to be given
to all relevant circumstances of the case including the negotiations, any practices which the parties
have established between themselves, usages and any subsequent conduct of the parties. In
summary, therefore, an implicit determination suffices as well as a provision enabling the
determination by circumscribing the quantity and the price of goods (Karollus aaO 61; v.
Caemmerer/Schlechtriem aaO and Art. 55 no. 7; Piltz Internationales Kaufrecht paragraph 3 no.
25). Applying these principles, the buyer's view that the "order of a larger amount of Chinchilla furs"
lacked the necessary definiteness of the quantity of the goods must be rejected. The primary point to be taken into consideration is the buyer's later conduct of selling on the
delivered furs apart from a small number, without raising any objection as to the quantity of the
goods delivered. Based on the later conduct of the parties, it must be assumed that the order of "a
larger number of furs" is to be seen as sufficiently definite. According to the principles outlined above, the requirement of definiteness of the agreed price
under Article 14 CISG has also been met in this case. This condition is already fulfilled where the
parties have implicitly referred to an at least determinable price without expressly indicating the
relevant factors for its determination, i.e., providing criteria which allow for the determination of
a definite price (v. Caemmerer/Schlechtriem Art. 14 no. 4; Piltz paragraph 3 nos. 23, 25). By
agreeing upon a price range between DM 35 and DM 65 for furs of medium and superior quality
the parties have provided sufficient criteria from which a definite price can be drawn depending on the quality of the delivered furs. [page 151] This price agreement must be viewed as sufficient in the sense
of Article 14 CISG. The contract has thus been concluded with an at least determinable quantity
and an at least determinable price. In this case, the question can remain open whether, at the
relevant point of conclusion and in absence of an express or implicit determination of the price, a
contract can be validly concluded through the fiction of an agreement on the usual price (Article
55 CISG). Finally, the argument raised in the appeal that the Court of Appeal wrongly considered the place
of performance to be the seller's (i.e., claimant's) place of business must also be rejected.
Since, in the present case, the goods were delivered to the buyer by post and no intermediary was
used as a collecting agent, the place of payment remains the seller's (i.e., the claimant's) place of
business. The Court of Appeal's reasoning does not contain legal errors.
[seller], the Austrian Defendant-Appellant as [buyer]. Monetary amounts in Austrian
schillings are indicated as [sA]; monetary amounts in German currency (Deutsche Mark)
as [DM]. ** Martin Eimer, Associate of the Institute of International Commercial Law of the Pace University School of Law, received his LL.M. from Edinburgh University. He is currently a Research Assistant to Prof. Martin Hunter, Essex-Court Chambers, London.
Commercial Law - Last updated May 22, 2014