Source: http://cisgw3.law.pace.edu/cases/040310g1.html
Timestamp: 2019-03-26 02:56:09
Document Index: 324946969

Matched Legal Cases: ['Art. 39', 'Art. 35', 'Art. 45', 'Art. 74', 'Art. 39', 'Art. 39', 'Art. 40', 'Art. 40', 'Art. 44']

Germany 10 March 2004 Appellate Court Celle (Commercial vehicles case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040310g1.html]
DATE OF DECISION: 20040310 (10 March 2004)
TRIBUNAL: OLG Celle [OLG = Oberlandesgericht = Provincial Appellate Court]
CASE NUMBER/DOCKET NUMBER: 7 U 147/03
CASE HISTORY: 1st instance LG Hannover 11 June 2003 [affirmed in major part]
BUYER'S COUNTRY: Poland (plaintiff)
GOODS INVOLVED: Commercial vehicles (three-axle semi-trailers)
GERMANY: Oberlandesgericht Celle 10 March 2004
Case law on UNCITRAL texts (CLOUT) abstract no. 597
A Polish transport company (plaintiff) bought a commercial vehicle from a German company (defendant). Shortly after the delivery was carried out, the plaintiff gave notice of non-conformity for deviation from the description of the vehicle the parties agreed upon. Some time after that, the plaintiff's counsel gave notice of other non-conformities in a letter to the defendant. The plaintiff brought an action for the reduction of the price and for damages, whereupon the Court of first instance ordered the defendant to restitute the difference between the purchase price and the actual value of the vehicle delivered.
The plaintiff appealed claiming to be entitled to a further reduction of the purchase price and damages for breach of the contract on grounds that the defendant had not only delivered the "wrong" vehicle but the vehicle was also defective.
The Regional Court of Appeal held that the plaintiff was not entitled to a further reduction of the price or to damages pursuant to articles 50 and 74 CISG, because he failed to give notice of the alleged non-conformity as required by articles 38 and 39 CISG. These provisions require the buyer to specify each lack of conformity of the goods as accurately as possible. The notice given by the plaintiff after he had taken delivery of the vehicle only related to the fact that the defendant did not deliver the vehicle described in the contract and therefore the complaint was not sufficient to meet the requirements of article 39 CISG with respect to other nonconformities. Mentioning an exception made in case of a serious and ultimate refusal of the seller to perform, the Court stated that the facts of the case did not indicate such a refusal.
The Court then referred to article 40 CISG concluding that the defendant did not lose the right to rely on the provisions of articles 38 and 39 CISG because the plaintiff neither argued nor substantiated that the alleged non-conformities of the vehicle related to facts of which the defendant knew or could not have been unaware of and which he did not disclose to the plaintiff. The Court noted that, by using the term "could not have been unaware of", article 40 CISG requires at least gross negligence of the seller. With regard to article 44 CISG as a further exception to the rule established in article 39 CISG, the Court held that this provision does not alter the obligation of the buyer to give notice as required by article 39 CISG. Therefore, the plaintiff could not rely on his notice of the "wrong" delivery as a reasonable excuse for his failure to give notice of other non-conformities.
Key CISG provisions at issue: Articles 38 ; 39 ; 40 ; 44 [Also cited: Articles 35 ; 45 ; 74 ]
39A ; 39A11 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Specification of nature of non-conformity: degree of specificity required];
44A [Excuse for buyer's failure to notify]
Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/824.pdf>; Internationales Handelsrecht (May/June 2004) 106-107; OLGR Celle (2004) 416
English: [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 39 para. 10
Appellate Court (Oberlandesgericht) Celle
10 March 2004 [7 U 147/03]
This is an appeal of the Plaintiff [Buyer]. In dismissing the appeal, the judgment of the 11th Civil Chamber of the Landgericht [Court of First Instance] of Hannover dated 11 June 2003 is partly changed and newly worded as follows:
The Defendant [Seller] is ordered to pay the [Buyer] � 4,039.21 as well as 5% interest thereon from 10 August 2000.
The appeal is otherwise dismissed. The costs of the first instance proceedings are allocated 56% to [Buyer] and 44 % to [Seller]. The costs of the appellate proceedings are allocated 76% to [Buyer] and 24% to [Seller]. The judgment is provisionally enforceable.
Leave to appeal on issues of law is not granted. Amount of claim: less than � 20.000.
[Buyer] operates a company in Poland concerned with the provision of transport services. [Seller] operates an enterprise in the Federal Republic of Germany which produces commercial vehicles and sells them new as well as used.
Regarding the facts and reasoning of the appealed decision, reference is made to the judgment of the Court of First Instance of 11 June 2003 (pages 203 et seq. of the record).
[Buyer] appeals this judgment and continues to pursue the part of the claim that was dismissed. [Buyer] alleges that the Court of First Instance wrongly added value-added tax to the amount established by the expert ... [Buyer] also alleges that the lower court incorrectly failed to consider [Buyer]'s alleged repair costs in the amount of 15,000 DM [*].
[Buyer] asks the Court to partly change the appealed judgment and to order [Seller] to pay another � 6,808.36 as well as 5% interest thereon from 1 September 1999.
[Seller] asks the Court to dismiss the appeal. [Seller] defends the appealed decision and repeats and expands his pleadings from the first instance in that regard.
[Seller] submits:
- While it is correct that the Court of First Instance wrongfully considered value-added tax, this does not matter for [Buyer] since [Buyer] incurred no damages, or in any case incurred much less damages than was presumed by the Court of First Instance.
- [Buyer] is in particular not entitled to compensatory damages or a price reduction with regards to the additionally welded-in flooring.
By decree of 23 January 2004, the Court referred the parties to the application of the CISG. As to the particulars, they may be found on page 253 of the record.
The admissible appeal of [Buyer] is partly successful. The remainder is groundless.
1. The parties and the Court of First Instance have incorrectly based the legal evaluation of the facts in the first instance on the warranty rules of the BGB [*]. [Buyer]'s claims asserted from the sales contract for the disputed tri-axle semi-trailer are subject to the United Nations Convention on Contracts for the International Sale of Goods (CISG). Poland and the Federal Republic of Germany are Contracting States to this Convention. An exclusion of the applicability of the CISG is not present.
2. [Buyer] correctly objects that when calculating the difference between the purchase price paid by [Buyer] and the value of the vehicle evaluated by the expert, the Court of First Instance added value-added tax to the latter amount. However, as a foreign transaction, this purchase was exempt from value-added tax according to � 4 No. 1(a) UStG [*]. The difference therefore correctly amounted to 7,900.00 DM = � 4,039.21 (28,000 DM value of the vehicle owed minus 20,100 DM net-value of the semi-trailer received).
In its calculations, the Court of First Instance incorrectly considered a proportionate amount of 2,200 DM for the subsequent fitting of the steel flooring (page 4 below LGU). Contrary to the submissions in the appealed decision, the expert ... submitted in his expert opinion of 21 January 2003 that through the fitting of a lock floor made out of steel the semi-trailer neither increased nor decreased in value (page 187 of the record). Nevertheless, the amount of 2,200 DM is justified since through the gain in weight, which according to the expert was caused by the additional installation of a steel floor, [Buyer] correspondingly loses additional loading possibilities and to a certain extent consumes more gasoline on every journey. In accordance with � 287 ZPO [*], the Court also estimates the cost of this additional consumption and the loss in loading capacity in relation to the longevity of comparable commercial vehicles at 2,200 DM. This exchange of position of damages does not violate the correction prohibition of � 536 ZPO (un-amended version) (Zöller-Gummer, ZPO, 21st ed., � 536 No. 8).
3. [Buyer] is, however, not entitled to further compensatory damages or a warranty-claim for a reduction in the purchase price due to a lack of conformity of the goods with the contract (Art. 35 CISG). Prior to asserting possible claims pursuant to Art. 45 in connection with Art. 74 CISG, it is the buyer's duty to examine the goods and give notice of defects according to Arts. 38, 39 CISG. In doing so, the buyer must describe the non-conformity as precisely as possible.
In contrast to German sales law, the CISG does not differentiate between delivery of defective goods [peius/Schlechtlieferung] and delivery of the wrong goods [aliud/Falschlieferung]. Even a delivery of other goods is regularly considered a defective delivery (BGH [*] NJW [*] 1996, 2364 et seq.) [No. VIII ZR 51/95 of 3 April 1996]. The duty to give notice of defects applies to each single defect (Staudinger/Magnus, Wiener-UN-Kaufrecht [Vienna UN-Sales Law], 1999, Art. 39 No. 58).
According to his own submission, immediately after delivery of the semi-trailer by his fellow countryman [Buyer] only gave [Seller] notice of delivery of the wrong goods [Falschlieferung]. [Buyer] did not at first object to the other defects now claimed, though they should all have been already present at delivery. Notice of these defects was first provided to [Seller] via letter from [Buyer]'s counsel dated 17 August 1999. This was not timely within the meaning of Art. 39 CISG. A final and serious refusal to perform on the part of [Seller] is not alleged by [Buyer] and is also otherwise not apparent.
[Seller] did not lose the right pursuant to Art. 40 CISG to rely on [Buyer]'s non-compliance with the duty to give notice of defects. Moreover, it is not asserted that [Seller] was at least grossly negligent in failing to discover the defects not considered by the Court of First Instance (cf. Schlechtriem - Schwenzer, Kommentar zum einheitlichen UN-Kaufrecht [Commentary on the Uniform UN-Sales Law], 3d ed., 2000, Art. 40 No. 4).
Finally, [Buyer] cannot rely on Art. 44 CISG. According to that Article, a buyer may claim damages or reduce the price despite the omission or untimely submission of the required notice of defects if he has a reasonable excuse for his failure to give the required notice. Regardless of the fact that [Buyer] does not rely on this, the circumstance that he initially (according to his submission) gave notice of the misdelivery (or delivery of wrong goods) in any case does not suffice. As was already stated, the buyer must give notice of the non-conformity as precisely as possible. Accordingly, he must give notice of all recognizable deviations from the condition specified in the contract. Even according to his own submission, [Buyer] did not do so here.
4. The decision on costs is based on � 92(1) ZPO [*]. The other additional decisions follow from �� 708 No. 10, 713, 543 ZPO. The prerequisites for leave to appeal on issues of law are not present.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff-Appellant of Poland is referred to as [Buyer]; the Defendant-Appellee of Germany is referred to as [Seller]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM].
Translator's note on abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGH = Bundesgerichtshof [German Federal Supreme Court]; NJW = Neue Juristische Wochenshrift [German law journal]; UStG = Umsatzsteuergesetz [German Income Tax Law]; ZPO = Zivilprozessordnung [German Civil Procedure Code].
** Tobias Koppitz holds a degree in law. With the team of Humboldt University Berlin, he won the Frédéric Eisemann Award for third place in the 8th Willem C. Vis International Commercial Arbitration Moot 2000-2001. He was coach to the team of Humboldt University Berlin in the 9th Willem C. Vis Moot 2001-2002.
Pace Law School Institute of International Commercial Law - Last updated May 17, 2006