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Germany 21 March 2003 District Court Berlin (Fabrics case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030321g1.html]
Primary source(s) of information for case presentation: Case text
text
Case identification
DATE OF DECISION: 20030321 (21 March 2003)
JURISDICTION: Germany
TRIBUNAL: LG Berlin [LG = Landgericht = District Court]
JUDGE(S): Dieckmann
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Case abstract
GERMANY: Landgericht Berlin 21 March 2003
Case law on UNCITRAL texts (CLOUT) abstract no. 634
Reproduced with permission of UNCITRAL
Abstract prepared by Ann-Catrin Theisen
The case focuses on the notice of nonconformity under article 39(1) CISG and on the
requirements related to its timeliness.
An Italian public company entered into a contract with a German buyer for the sale of
fabrics. Almost seven weeks after the goods were delivered to the buyer, the latter
gave notice of nonconformity to the seller, announcing at the same time his intention
of having the purchase price reduced because of the nonconformity of the goods.
The seller denied any nonconformity and claimed that the notice of nonconformity
was not timely. The buyer, however, alleged a latent defect, stating that the nature of
the nonconformity was such as to become obvious only once the fabric was dyed.
The court held that the seller had a claim for the purchase price pursuant to article 53
CISG. The court stated that the buyer had lost the right to rely on the lack of
conformity pursuant to article 39 CISG, since he had failed to give timely notice of
nonconformity to the seller. Examining the time limit within which the buyer has to
give notice of nonconformity, the court emphasized that both the period within which
the buyer has to examine the goods pursuant to article 38(1) CISG and the period in
which the buyer has to notify the seller of any defects or nonconformity pursuant to
article 39(1) CISG must be taken into account. The court pointed out that even if the
buyer reports the defects to the seller immediately after having detected them, he can
lose his right to rely on the lack of conformity if he did not comply with the short
period of examination of article 38(1) CISG.
According to the court, even assuming that the nonconformity only came to light once
the fabrics had been processed, the buyer should have randomly dyed samples of the
fabrics in order to comply with his obligation to examine the goods. Moreover, since
the buyer had requested immediate delivery of the goods, he should have examined
the goods within as short a period as practicable in the circumstances and within the
seller's reasonable expectation. Thus, a notice given almost seven weeks after delivery
could not be considered timely.
The court noted that under article 59 CISG, a formal request for payment is not
required on the part of the seller to demonstrate that the buyer is in arrears. Pursuant
to articles 61 and 74 CISG, the seller was awarded reimbursement of attorney's fees
incurred in connection with a reminder to the buyer. The court awarded default
interest pursuant to article 78 CISG. With regard to the interest rate, the court pointed
out that there were divergent opinions on this question, since article 78 CISG
expressly permits the award of interest without, however, stating the rate. In the end,
the court decided to apply German law as the law of the State in which the debtor, i.e.,
the buyer, had his place of permanent residence, domicile or establishment.
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Classification of issues present
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG
Article 53 ]
provisions
at
relevant:
Editorial remarks
Unavailable
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Citations to other abstracts, case texts and commentaries
CITATIONS TO OTHER ABSTRACTS OF DECISION
English:
Unilex
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pid=1&do=case&id=921&step=Abstract>
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The 103rd panel for commercial matters of the District Court (Landgericht) Berlin,
situated in Berlin-Charlottenburg, Tegeler Weg 17-221, 10589 Berlin, held by
Presiding Judge Dieckmann as follows in consideration of the Court's hearing of 21
March 2003:
1. The [buyer] is directed to pay the [seller]:
(i) EUR 13,921.19 plus accrued interest of 8% above the Base Interest
Rate [*] since 14 June 2002; and
(ii) An additional EUR 417.75 plus interest of 8% above the Base
Interest Rate [*] since 28 November 2002.
2. The claim is dismissed in all other respects.
3. The costs of this legal proceedings shall be borne by the [buyer].
4. Claims under this judgment are preliminarily enforceable against the deposit
of an amount equalling the amount to be enforced.
FACTS OF THE CASE
The [seller] claims payment of the purchase price under a sales contract. [Seller]'s
claim is laid down in the facts as follows:
[Undisputed facts]
Following the [buyer]'s order of 27 February 2002, the [seller], an Italian public
company, delivered approximately 60,000 meters of fabrics at a purchase price
of EUR 64,670.86 on 5 March 2002. In a letter of 22 April 2002, the [buyer] gave
notice to the [seller] of lack of conformity of 8,867 meters of the fabrics. Further,
[buyer] proclaimed to reduce the purchase price as invoiced on 15 March 2002 in an
amount of EUR 13,921.19. On 24 April 2002, the [seller] denied the existence of any
non-conformity or defect in the goods that were delivered, because the [buyer] had
already dyed the goods.
Through his attorney, on 5 June 2002 the [seller] asked the [buyer] to pay the amount
of EUR 50,749.67 immediately. This is the portion of the invoice price that was not in
dispute. Concurrently, [seller] offered to settle the remaining amount in dispute. By
letter of 19 July 2002, the [seller] made a further offer to settle the dispute. The
[buyer] replied to the latter overture with her own note of 5 August 2002.
On 13 June 2002, the [buyer] paid the EUR 50,749.67 amount that was not in dispute.
[The seller's pleadings and submissions to the Court]
The [seller]'s claim is well founded as to the extent held in the aforementioned tenor
of this judgment. Beyond that, the [seller]'s legal action is partly unfounded and has to
be dismissed in other respects.
[No extra judicial settlement between the parties]
The [seller]'s claim is not unfounded by virtue of the fact that the parties already
settled another dispute out of court. The [buyer] had neither in terms of timeliness nor
in fact accepted the [seller]'s settlement offer of 19 July 2002. The only means of
accepting that offer might have been to pay the amount requested by the [seller] on or
before 25 July 2002. The [seller] made it crystal clear vis--vis the [buyer], that he
was only willing to keep his offer open until 25 July 2002. The [seller] notified the
[buyer] of his intention to commence legal action in which he would request the
remainder of the purchase price if the [buyer] did not pay the requested amount by 25
July 2002. The [buyer] has neither paid the amount nor accepted in her letter dated 5
August 2002 every core point set forth in [seller]'s offer of an out-of-court settlement
of the dispute.
[Seller's claim for payment]
According to Art. 53 CISG, the [seller] has a claim for the remainder of the purchase
price in an amount of EUR 13,921.19 concerning the goods delivered on 5 March
2002. The [buyer] lost her right to rely on and reprimand any lack of conformity and
to notify any defects of the goods pursuant to Art. 39 CISG, because the [buyer] did
not give timely notice of non-conformity.
[Distinction between the period to examine and period to notify]
To determine whether a notification of lack of conformity took place within a
reasonable time, two different periods must be considered: first, the period to examine
the goods pursuant to Art. 38(1) CISG; second, the period to notify the [seller] of any
defects or non-conformity under Art. 39(1) CISG.
The period to give notice of any lack of conformity lapses, even if a buyer gives
notice of the defect immediately after the defect was detected but does not meet her
obligations with respect to the examination period, where a buyer ought to have
become aware of any lack of conformity at an earlier stage.
that the [buyer] was in arrears. For this reason, the [buyer] was in default when the
[seller]'s attorney contacted her to pay the purchase price.
[Calculation of allowable attorney's fees]
According to Sec. 118 Par. 2 BRAGO [*], attorneys' fees for any activity rendered
extra judicially are to be set-off against legal fees incurred during subsequent court
proceedings. However, this principle merely applies to activities that are congruent
with and identical to the subsequent legal action. In this case, the pre-litigation
activity rendered by the [seller]'s attorney referred to the entire claim for the purchase
price under the sales contract, whereas the primary cause of action in this legal
proceeding only has to do with part of the purchase price. Insofar as the attorneys' fee
for any extra judicial activity goes beyond the amount of his fee for rendering services
during this legal proceeding [Verfahrensgebhr], there should be no set-off between
those two types of attorneys' fees.
[Base for the calculation of the extra judicial attorneys' fee]
However, the proportion of the extra judicial attorneys' fee, exceeding his counselling
fee during this legal action, is not calculated on the amount in dispute
of EUR 50,749.67. In fact, the [seller]'s claim for reimbursement based on the
[buyer]'s default, is to be calculated as follows:
A 7.5/10 attorneys' fee amounts to EUR 842.25 calculated on an amount in dispute
of EUR 64,670.86. If the [buyer] had paid in a timely manner the EUR 50,749.67
amount which was not in dispute, only a 7.5/10 attorneys' fee of EUR 424.50
calculated on EUR 13,921.19 would have been arisen. The difference between the
former and the latter fee, i.e., EUR 417.75, is the damage, incurred by the [seller] due
to the [buyer]'s default.
[Law applicable to seller's claim for payment of default interest]
The claim for payment of default interest ensues from Art. 78 CISG in connection
with Sec. 288 BGB [*]. Art. 78 CISG does not state anything concerning the actual
interest rate owed by the defaulting party. Opinions are widely divergent on this
question, which interest rate shall be applicable. Under any circumstances, it is
arguable to apply the law of the State in which the debtor has his place of permanent
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For
purposes of this translation, the Plaintiff of Italy is referred to as [seller]; the
Defendant of Germany as [buyer]. Amounts in the currency of the Eurocurrency Area
(Euro) are indicated as [EUR].
Base Interest Rate = Basiszinssatz [Base Interest Rate as set forth in Sec. 1 of the
German Act on the Transmission of the Discount Rate (Federal Law Gazette I, p.
1242) as from time to time amended]; BGB= Brgerliches Gesetzbuch [German Civil
Code]; v. Caemmerer/Schlechtriem = Kommentar zum einheitlichen UN-Kaufrecht,
Mnchen
1990 [German
Commentary
on
the
CISG,
Munich
1990]; BRAGO= Bundesgebhrenordnung der Rechtsanwlte [Federal Regulations
on Fees for Attorneys]; ZPO = Zivilprozessordnung [German Civil Procedure Act].
** Stefan Kuhm is a Member of the Bar Association, Frankfurt a.M., and a Ph.D.
candidate at Eberhard-Karls-Universitt, Tbingen.
*** Camilla Baasch Andersen is a Lecturer in International Commercial Law at the
Centre for Commercial Law Studies, Queen Mary, University of London, and a