Case text (English translation)
Queen Mary Case Translation Programme
District Court (Landgericht) Duisburg
17 April 1996 [45 (19) O 80/94]
Translation [*] by Ruth M. Janal [**]
Translation edited by Camilla Baasch Andersen [***]
FACTS OF THE CASE
In the year 1993, the German [buyer] gave the Italian [seller] overall 15 orders for the manufacture and delivery of textiles. The orders were made in the way that the [buyer] used its own order slips, sending them to the [seller] with the desired quantity of textiles, price, delivery date and further details noted on the form. The order slips contained the printed clause "place of performance and forum Mühlheim/Ruhr [Germany]. The law of the Federal Republic of Germany applies." Under the heading "terms of payment / conditions" it was further noted: "30 days 4% discount on cash after receipt of the goods per swift (wiring of money), 4% commission."
[Seller's position]
The [seller] makes a claim for payment of the remaining purchase price for a number of deliveries. [Seller] maintains that at no point in time did the [buyer] query the goods on delivery, neither with respect to quality, quantity, delay nor regarding unauthorized short deliveries. The [seller] further submits that the [buyer] is unable to derive any rights in this dispute from orders not at the issue of the [seller]'s claim, and that [buyer] is unable to set-off any claims of its own because the German courts did not possess international jurisdiction over such claims. The [seller] submits that there was no framework contract pertaining to the orders, rather each of those orders was an individual order. At no point in time had the [seller]'s manager signed the order forms sent from the [buyer] to the [seller].
[Buyer's position]
The [buyer] submits, inter alia, that it was entitled to a set-off with it scounterclaims resulting out of all of the 15 orders, because the [seller] had signed the order forms and therefore both the standard clause "forum Mühlheim/Ruhr" and the choice of German law had been validly agreed upon by the parties. [Buyer] submits that the set-off was furthermore admissible because it had already been declared before the start of the legal proceedings and because all of the orders were related, as required by the relevant case law. [Buyer] maintains that it always gave notice to [seller] specifying short deliveries, delayed deliveries or deliveries of insufficient quantity. Moreover, [buyer] was not obliged to give such notices.
[Court's decision]
[The District Court rules in favor of the seller.]
REASONING OF THE COURT
[…]
II. 1. [Seller's claim for payment of the purchase price is granted]
The [seller] is entitled to the claim for payment of the purchase price under Art. 53 CISG. The CISG is applicable to the contract between the parties. The clause that German law was to be applied, contained in the [buyer]'s standard terms, was not incorporated into the contract. The Court cannot find a choice of law agreement between the parties as the [buyer] did not substantiate and prove its submission that the [seller]'s manager signed the order forms on which the choice of law clause is printed. Furthermore, even the existence of such a signature or the [seller]'s silence after receipt of the order forms would not lead to an incorporation of this standard term into the contract. Under Italian law the agreement of general terms and conditions requires a double signature, which is certainly not evident in the present case.
Italian law is decisive for the question whether the [buyer]'s standard terms find application to the Italian recipient of the standard terms. German law is only to be applied to the question of whether general terms have become part of a contract, if German law applies to the contract as such (Art. 31(1) EGBGB [*]). This matter cannot be determined, as the very question at issue is whether German law does apply to the contract. Therefore, the principle of Art. 31(2) EGBGB needs to consulted. According to this provision, the incorporation of standard terms is generally governed by the law of the recipient's domicile or place of business. Exceptions apply only in the rare cases where the foreign party cannot expect that its conduct will be assessed under the rules of its domicile or place of business, be it because the contract was concluded in Germany or because of a previous usage established between the parties (cf. Ulmer/Brandner/Hensen, AGBG [*], attachment to § 2, n. 22 with further references). The [buyer] did not submit any such special circumstances.
2. [Buyer's counterclaim for damages is dismissed]
The [buyer] is not entitled to a counterclaim which it could set off against the [seller]'s claims.
a. The delivery of an insufficient quantity does not give the [buyer] the right to claim damages because the [buyer] did not sufficiently substantiate that it examined the goods and gave notice to the [seller] specifying the lack of conformity within as short a period as is practicable in the circumstances (Arts. 38, 39 CISG). Furthermore, the [buyer] did not submit that it met the further requirements for a claim for damages under Art. 45 et seq. CISG, that is, the fixing of an additional period of time for performance by the [seller].
b. […]
c. The [buyer] is not entitled to deduct the costs of payment by check from the [seller]'s claim for payment of the purchase price. The payment costs are principally born by the debtor. Furthermore, the [buyer] acted against the payment agreement "per Swift" (wiring of the money) by mailing the check and is therefore unable to burden the [seller] with the resultant costs.
d. The [buyer] is not entitled to a counterclaim regarding 4% commission. The Court does not follow the [seller]'s interpretation that - in order for that claim to arise - a payment per Swift was compulsory. However, the [buyer] did not contest the [seller]'s submission that this clause was part of the [buyer]'s standard terms and conditions. Those terms were not incorporated into the contract (see the explanations above). It is furthermore not clear from the wording on the order forms whether the commission was supposed to be granted next to or in addition to the discount on cash, possibly under the same prerequisites. This uncertainty is born by the party who uses the standard terms.
e. […]
f. The [buyer] is furthermore not entitled to declare a set-off with counterclaims resulting from other orders which are not the issue of the [seller]'s claim, because the German courts do not possess international jurisdiction for such counterclaims. Failing a more substantiated submission on the part of the [buyer], the Court cannot find that a framework contract pertaining to all the orders existed.
aa. There is no forum selection agreement under Art. 17 para. 1 sent. 2(a) of the Brussels Convention [*], because there is neither a written forum selection clause nor an oral agreement which was at least confirmed in writing by one of the parties. As has been noted above, the [buyer]'s standard term that the forum was to be Mühlheim/Ruhr did not become part of the contract.
bb. The prerequisites of Art. 17 para 1 sent. 2(b) Brussels Convention are not met because it has not been shown that the agreement for the German forum was made in a form which adheres to the usages established between the parties.
cc. The requirements of Art. 17 para 1 sent. 2(c) Brussels Convention are not met because there is no apparent international trade usage to the effect - contrary to the Italian law - that forum selection clauses on order forms become part of the contract, which the [seller] knew or ought to have been aware and which is widely known to, and regularly observed by, the particular trade concerned.
Following the case law of the European Court of Justice [ECJ], the recipient of the general terms and conditions must confirm in writing that the terms are incorporated into the contract (ECJ, NJW [*] 1977, 495). This Court cannot find such a written confirmation.
Following a recent tendency regarding the extension of Art. 17 Brussels Convention by the alternative in para 1 sent. 2(c), an international trade usage could possibly be established to the effect that silence to a commercial letter of confirmation or to a confirmation of an order might be sufficient to incorporate standard terms and conditions into the contract (cf. Ulmer/Brandner/Hensen, op. cit., attachment to § 2 AGBG, n. 33 with further references; see also Zöller/Geimer, Kommentar zur ZPO, 19th ed., Art. 17 Brussels Convention n. 8 et. seq.). However, even such a line of thought is questionable, as is shown by the decision BGH [*] EuZW [*] 1994, 6352 (silence to a commercial letter of confirmation does not have the same effect in Belgium as it does in Germany; therefore it cannot be established that an international trade usage according to the German usage exists). According to OLG [*] Köln, NJW [*] 1988, 2183, silence in commercial trade, in particular as response to a letter of confirmation, does not have legal force under Italian law, and thus cannot lead to a forum selection agreement under Art. 17 para 1 sent. 3 Brussels Convention.
It is decisive in any case that silence in response to a standard term printed on an order form cannot be compared to silence in response to a commercial letter of confirmation or the confirmation of an order (cf. for the opposing opinion LG [*] Essen WM [*] 1992, 1208. However, that decision relied heavily on the longstanding business relationship of the parties that is lacking in the present case.) An international trade usage, according to which the silence of a party to the contract leads to the incorporation of standard terms, is not apparent. Even in Germany, where silence leads to a rather extensive incorporation of standard terms compared to other European countries, a usage is not presumed as a result of silence to order forms (in contrast to silence to a letter of confirmation or a confirmation of the order, cf. Palandt/Heinrichs, Kommentar zum BGB, 55th ed., § 2 AGBGB [*] n. 22 et seq.).
dd. Independent of the matter whether a forum selection agreement exists, the jurisdiction of the Court does not follow from Art. 6(3) of the Brussels Convention. According to this provision, a person may be sued "on a counterclaim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending." Following the decision of the ECJ [*] on 13 July 1995 (NJW [*] 1996, 42), which is binding for the interpretation of the Brussels Convention, Art. 6(3) Brussels Convention does not apply by analogy to a set-off during legal proceedings. The means of defense and their prerequisites are rather to be determined under national law. Therefore, the Court can leave open the question whether and to what extent the decision BGH [*] NJW [*] 1993, 2753 (according to which Art. 6(3) Brussels Convention may apply under certain circumstances for the set-off of a claim) is relevant.
It does not follow from these considerations that the set-off is governed by §§ 387 et seq. BGB. [Translator's note: The named sections of the German Civil Code deal with set-off under German law.] "International law" in the meaning of the ECJ's decision is - according to Arts. 28, 32 EGBGB [*] - Italian law, which applies because the CISG does not settle the matter of set-off. Under Art. 28 EGBGB, a sales contract is typically governed by the law of the seller's domicile, respectively the seller's headquarters (cf. OLG [*] Stuttgart RIW [*] 1995, 943 with further references).
According to Italian law, the [buyer] is not entitled to a set-off with its alleged claims that were disputed by the [seller]. The Italian law discerns between the set-off ipso iure under Art. 1243(1) C.c. [*], the judicial set-off according to Art. 1243(2) C.c. and the mutual set-off under Art. 1252 C.c. The set-off ipso iure is allowed if the reciprocal claims are similar to each other, liquidated and ready for decision. While this set-off law does not require a declaration by one party, it does depend on the initiative of the party in whose favor the set-off is, and is therefore closest to the set-off desired by the [buyer] according to §§ 387 et seq. BGB [*]. However, the prerequisites for such a set-off are not met in the present case because the counterclaim is not determined regarding its grounds and amount (cf. OLG [*] Stuttgart, op. cit.; see further for the possibilities and prerequisites of a set-off under Italian law, Kindler, IPRax [*] 1996, 16 et. seq.). The further option of a mutual set-off is not given in the present case. The judicial set-off is achieved by way of a counterclaim (cf. Kindler op. cit.), an action that has not been brought. Furthermore, that action would require the Court's international jurisdiction under Art. 6(3) of Brussels Convention, which is doubtful in the circumstances of the present case.
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 is referred to as [buyer].
Translator's note on abbreviations: AGBG = Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen [German Code on Standard Terms and Conditions];
BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGH = Bundesgerichtshof [Federal
Court of Justice, the highest German Court in civil and criminal matters]; Brussels Convention
= EC Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments
in Civil and Commercial Matters; C.c. = Codice Civile [Italian Civil Code]; EGBGB =
Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on Private
International Law]; ECJ = European Court of Justice; EuZW = Europäische Zeitschrift für
Wirtschaftsrecht; [German law journal]; IPRax = Praxis des Internationalen Privat- und
Verfahrensrechts [German law journal]; LG = Landgericht [German District Court], NJW = Neue Juristische Wochenschrift [German law journal]; OLG = Oberlandesgericht [German
Court of Appeals]; RIW = Recht der Internationalen Wirtschaft [German law journal]; WM = Wertpapier-Mitteilungen [German law journal].
** Ruth M. Janal, LL.M (UNSW), a PhD candidate at Albert-Ludwigs-Universität Freiburg,
has been an active participant in the CISG-online website of the University of Freiburg. The
second-iteration redaction of this translation was by Dr. John Felemegas of Australia.
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