Queen Mary Case Translation Programme
Hof Arnhem 27 April 1999
G. Mainzer Raumzellen v. Van Keulen Mobielbouw Nijverdal BV
Translation by Yvonne P. Salmon [1]
Gerhard Mainzer, trading under the name of G. Mainzer Raumzellen (Germany) [the buyer], appellant, Procureur [2] P. C. Plochg
v.
Van Keulen Mobielbouw Nijverdal BV (Netherlands) [the seller], respondent, Procureur W. H. F. van Veen
[…]
4. The established facts in both cases
4.1. On the basis of the finding of the District Court insofar as it is not contested, and/or on the basis of what is stated further and is not - or is inadequately - rebutted, and as appears from the uncontested content of the submitted exhibits, on appeal the following is certain:
4.2. Pursuant to several agreements with Mainzer [the buyer], from the beginning of the 1970s until 1995 Van Keulen [the seller] delivered mobile units (so-called "Raumzellen"), on the order of and for the account of [the buyer], to the latter to the value of approximately 100,000,000 NLG [Dutch Guilders], and from 1989 until 1995 to the value of approximately 36,000,000 DM [Deutche Marks]. These mobile units which were constructed out of metal chassis, wood and plate material, and which were destined for several possible uses - for example for use in offices, refuges for asylum seekers, schools, hospitals, medical practices, shops, snackbars, flower and newspaper kiosks - were produced by [the seller] in his factory in Nijverdal and were made available to [the buyer] for collection at that factory.
4.3. [The buyer] failed to pay several invoices for an amount of, in total, 635,410.20 NLG which [the seller] sent to [the buyer] for the deliveries referred to under 4.2. The invoices concerned are an invoice dated 30 May 1991 and several invoices from the period 15 December 1994 until and including 31 August 1995.
[…]
4.5. Since 1975 [the seller] has used general delivery and payment conditions which he changed in 1991, and since then he has used them under the heading "general sales, delivery and payment conditions".
On the bottom of the front page of his invoices [the seller] refers to the applicability of his general conditions, which were drafted only in Dutch, "which were deposited on 22 August 1975 with the registry of the Court of the District of Almelo" and respectively as "those deposited with the Chamber of Commerce of Enschede on 2 September 1991" - or rather, as is apparent from the depository document, on 2 December 1991. As of June 1993 those conditions were printed on the back of his invoices to which it referred on the bottom of the front page of the invoices by means of the sentence "said conditions are presented on the back".
Article 7 of the general conditions (which had been amended in 1991) states that in case of non-payment of the invoice within 10 days following delivery, interest of 1% per month is to be imposed and that further extra-judicial collection costs fixed at at least 15% of the principal amount due are to be imposed.
Under Article 16 of those conditions, Dutch law is exclusively applicable to the agreements between [the seller] and his clients.
4.6. [The buyer] has in part sold the mobile units delivered to her, and in part rented them to clients in (inter alia) Germany, some via the hire company MRV which was established by [the buyer].
5. The grounds of the decision on appeal in both cases
5.1. The Court will deal with the grounds of appeal in both cases collectively, because this appears to be necessary for a correct treatment of the cases, given the desire expressed by [the buyer] to consider the grounds in the first case also in the second case and given the extent to which the cases are interconnected.
The applicable law
5.2. The District Court considered Dutch law to be applicable to the agreements concluded between the parties. Given that this decision is not contested this Court will also adopt this view.
5.3. Since 1 January 1992 the United Nations Convention on Contracts for the International Sale of Goods concluded in Vienna on 11 April 1980 - hereinafter the CISG - forms part of Dutch law. (Trb. [3] 1981, 184; Trb. 1986, 61).
5.4. This Convention is applicable to the agreements between [the seller] and [the buyer] to the extent that they have to be considered to be sales agreements regarding moveable goods which were concluded on, or after, 1 January 1992, given that the parties are established in different States.
On the basis of Article 100 of the CISG, this Convention is not applicable to the agreements that were concluded before 1 January 1992, and the Convention relating to a Uniform Law on the International Sale of Goods (hereinafter ULIS), which was in force until 1 January 1992, is applicable.
5.5. The agreements between the parties have as their object, in any case, the delivery of moveable "tangible" goods manufactured by [the seller]. To the extent that, as [the buyer] claims, those agreements could not be qualified as sales agreements and states that the agreements are in fact complex contracts with several sub-contracts containing, inter alia, works contracts and sales agreements, the agreements, on the grounds of Article 6 ULIS and Article 3 CISG respectively, have to be treated as equivalent to contracts of sale and hence both ULIS and the CISG respectively are applicable to the agreements between the parties.
The grounds for appeal numbers 1, 2 and 8 in the case with register number 97/700 are unfounded insofar as they attempt to establish that the agreements between the parties cannot be qualified as sales agreements.
5.6. [The buyer] has also based her defense under the principal claim and her demand in counterclaim on the tortious behaviour on the part of [the seller] towards her. Given (the explanations with respect to) ground of appeal 10 in the case with the register number 97/700 and further (explanations with respect to) grounds 1, 2 and 3 in the case with register number 98/46, as [the buyer] had raised during her pleadings, the appeal also aims to submit the tortious act to judgment. To the extent that the commission of a tortious act might not be governed by Dutch law because this could not be considered to the law of the country where, according to the statements of [the buyer], these acts had taken place, it is found that these tortious acts are so closely linked with the agreements between the parties that Dutch law, insofar as this is the law which governs the agreements, is also applicable.
5.7. To the extent that [the buyer] with the (explanations with regard to) grounds 8 and 9 in the case with register number 97/700 might have sought to state that Dutch law is, excluding the CISG and ULIS, applicable to the agreements between the parties, this statement is incorrect given the foregoing, as the parties did not agree upon the exclusion of the ULIS and the CISG. Neither can [the buyer's] statement made during the oral pleadings (point 17) succeed, insofar as [the buyer] might have meant by that statement that the parties to the proceedings have adopted the point of view that Dutch law is applicable with the exception of the CISG and ULIS on the ground that in the first instance and on appeal [the seller] has always invoked the applicability of both ULIS and the CISG (Cf., inter alia, the explanations by [the seller] to grounds 2, 8 and 9 in its memorandum of reply in the case with register number 97/700 and also point 4 a and 4 sub a, pages 5 and 6 of its memorandum of reply in the case with register number 98/46).
The general conditions
5.8. [The seller] also bases his claim in the principal claim and his defense in counterclaim on the applicability of his general conditions. [The buyer] contests this applicability with ground 3 in the case with register number 97/700 on the basis that those conditions, and the amendment thereof in 1991, were never the subject of discussion between the parties, nor were they handed over or put at [the buyer's] disposal and that the general conditions were only drafted in Dutch and moreover that the conditions do not concern mobile units.
5.9. It is not contested that the validity between the parties of the general conditions of [the seller] and also the modification or amendment thereof in 1991 was never explicitly discussed, either orally or in writing, and that the general conditions were not handed over to [the buyer].
The content of the letter from [the seller] to [the buyer] dated 8 August 1975 (exhibit 6 to the counterstatement in the principal claim, statement of claim in the counterclaim) can in this context - as opposed to what the District Court in the contested judgment in the principal claim apparently found - be interpreted in such a way that [the buyer], in failing to react to this letter, had tacitly accepted the applicability of the general conditions.
This is also the case when considered in connection with the reference on the front page of the invoices of [the seller] to the applicability of the general conditions, as mentioned under 4.5. This reference to the conditions deposited with the registry of a Dutch court is, as such, insufficient to consider [the buyer] to be bound by the general conditions, [the buyer] apparently not being resident or established in the Netherlands. Contrary to what [the seller] states, these circumstances likewise do not justify that the general conditions are to be considered to be a consistent usual clause between the parties. The fact that [the buyer] is a "trader" [Kaufmann] under German law does not, by the mere reference to the general conditions, lead to the imposition on [the buyer] of a duty to investigate the content of those conditions, nor does it mean that in the absence of protest these conditions could have been considered to have been accepted.
5.10. However, as of June 1993 the conditions have to have been considered to form part of the agreements which were henceforth concluded between the parties, given that since then, in the amended version of 1991, the general conditions were mentioned by [the seller] on the back of the invoices which were sent to [the buyer], albeit that the conditions were drafted in the Dutch language. [The buyer] should have considered that the general conditions on the back of the invoices drafted in Dutch could have been used against her by [the seller], taking into consideration that she was, as a party to the agreements, acting in the operation of her business, given moreover that it is also not unusual in commercial practice in Germany for a counterparty acting in the operation of his business, as [the seller] was here, to use general conditions with regard to agreements such as those which are the object of these proceedings. It was therefore up to [the buyer] to request clarification on this matter by, for example, requesting information from [the seller] such as a German translation. [The buyer] apparently did not do this and nor did she do so immediately in June 1993 [4] but rather she only objected against the applicability of the general conditions during the proceedings in the Court of First Instance, for which she should be held responsible. The defense of [the buyer] that the general conditions of [the seller] do not deal with the concerned agreements for the manufacturing and delivery of mobile units, is unfounded in the absence of a sound factual basis, considered in the light of Articles 1 and 2 of the general conditions in which it is stated, inter alia, that the conditions are applicable to "all offers and agreements by which the supplier does work for, or delivers products to, the client" and that it is understood "by products also services of whatever kind".
5.11. Ground 3 in the case with register number 97/700 is to that extent therefore unfounded.
Non-conformity and fraud
5.12. [The buyer] has stated in the principal claim and in counterclaim in first instance, as well as on appeal in both cases, that [the seller] has breached the requirement of conformity with regard to the delivered mobile units and has even committed fraud against [the buyer] in that respect. The qualification "fraud" is used by [the buyer] in the sense that [the seller] failed considerably in the fulfillment of his obligations towards [the buyer], even to such a serious extent that the limits of contractual liability are exceeded and constitute a tort against it. In counterclaim, [the buyer] uses the qualification "fraud" also in the sense of lack of consent in order to be able to invoke the nullity of a number of agreements. Given (the explanations with respect to) the grounds in the case with register number 97/700 and in the case with the register number 98/46 certain matters are submitted to judgment in appeal.
5.13. [The seller] has pointed out in this respect that [the buyer] can no longer invoke the alleged faults given that [the buyer] has in the meantime lost her right on the grounds of Article 39 of the CISG - and has likewise lost her right under Article 39 of ULIS. However, given what is stated under Article 39 of ULIS and Article 39 of the CISG, it is first to be considered whether the delivered mobile units conform to what was to be delivered under the different agreements. In doing so, the criteria laid down in Article 19(1) and Article 33 et seq of ULIS and Article 35 et seq of the Vienna Sales Convention respectively will be adopted. These criteria will also be applied to the claim of a tortious act given that [the buyer] in this respect has not invoked facts which fail to fit within the framework of the sales agreements between the parties.
5.14. [The buyer] states in this respect that there are two aspects to the non-conformity, namely obvious defects and a (hidden) defective construction. To that effect [the buyer] states - in essence - the following.
[…]
Regarding the defective construction
5.15. First, the contested statement that there is a defective construction will be considered.
Taking, inter alia, into consideration the statements made by [the buyer] which are not contested (under 35 and 45 of the memorandum of oral pleading in appeal) it is clear that the construction requirements such as the DIN or NEN norms and the F-30 fire norm were never explicitly agreed upon between the parties except with regard to a specific number of deliveries.
[…]
5.16. No documents of justification were submitted from which it could be concluded that, in general, fulfillment of the DIN or NEN norms was required by [the buyer] except for some specific orders. (…)
5.17. To the extent that the statement of [the buyer] might be correct that the DIN or NEN norms (and also in some cases the F-30 norm) would apply with respect to all mobile units delivered by [the seller] to clients in different states of Germany - which [the seller] contested on grounds, inter alia, that each client of [the buyer] and each German state requires the fulfillment of its own specific construction requirements - these norms cannot be considered to have affected the contractual relationship between the parties outside those cases in which those norms were explicitly agreed upon between the parties. The following circumstances substantiate this.
The parties were in business over a considerable period of time during which the mobile units manufactured by [the seller] were the object of this business, and each of those mobile units represented a considerable value which in total involved a very considerable sum of around 100,000,000 NLG. Not only [the seller] but also [the buyer] are to be considered as experts in this regard, given also that [the buyer] has herself been a producer of mobile units since 1994 or at least has had them produced. [The seller] has, except for in the cases specified above, never indicated to [the buyer] that he would apply those norms to the mobile units to be manufactured and [the buyer] has never requested this. The statement of [the buyer] during the pleadings (point 48 of the memorandum of oral pleading) that she had warned [the seller] of the fact that the governments of German states had issued requirements with respect to mobile units, is - insofar as this statement might be correct - insufficient to deduce such a request. In light of these circumstances, the possible expectation of [the buyer] which first appeared during the proceedings, that [the seller] would have the duty to examine the (possible) applicability of the DIN/F-30/NEN norms and hence, where applicability was established, would abide by those norms with regard to the mobile units to be delivered is unjustified, if those norms were not explicitly discussed. The fact that [the seller] knew that the mobile units would be exported to Germany does not alter this analysis given that it was up to the client to point out which governmental requirements were to be observed in the place of destination of the mobile units.
5.18. Moreover, during the long periods in which the parties did business together, [the buyer] apparently never investigated to a reasonable extent whether [the seller] was taking those norms into account. This investigation should have been made by [the buyer], as is stated in Article 38 of ULIS and Article 38 of the CISG, at least from 1990 when [the buyer], who also has to be considered an expert in the field of construction, was confronted with multiple complaints about the walls and roofs which in her view were to be attributed to general faults in construction affecting all of the walls and roofs of the mobile units.
The investigation as to this was made too late by [the buyer], namely, as appears from her statements, only in the Spring of 1996 when the parties were already in dispute with respect to mobile units which were affected by a fire in January 1995, and it has to be found that [the buyer] should have been able to have undertaken such an investigation in a simple way and at a much earlier stage.…
5.19. To the extent that [the buyer] could have invoked the fact that the delivered mobile units were unsuited for normal use given the fact that the aforementioned norms were not fulfilled (Cf. point 13, 31 pleading note of [the buyer]) and that the mobile units even presented dangers (Cf. ground 1 in the case with register number 98/46, point 14) [the buyer] can no longer invoke this given that she neglected to make any investigation into this matter as mentioned above.…
The "form of product liability" which [the buyer] further invokes (Cf. ground 1, point 8 in the case with register number 97/700), deals apparently with a danger linked to the faulty construction of the walls and roofs of the mobile units. To the extent that [the buyer] hereby invokes the legal rule as to product liability, the call upon this should remain without result on the basis that, pursuant to Article 6:190 of the Civil Code, only damage by death or injury or damage to another object which is used - or destined to be used - in the private sphere, can be claimed.
5.20. The contested statement of [the buyer] that there was a serial production of mobile units does not require consideration: even if this statement would be correct this could not alter what has been considered above.…
5.21. It results from the foregoing that the claims of [the buyer] for the payment of the amounts of 309,300 NLG and 4,622,240.50 NLG as stated above, under 2.7 A, as well as the claims under 2.7 B and C, to the extent that fraud is the basis for what is claimed under C, lack an effective basis.
With regard to obvious faults
5.22. With regard to the claim for remuneration of repair costs for the amount of 221,966.98 NLG and also with regard to the subsidiary claim under C for avoidance, to the extent that the obvious faults form the basis for the claim, the contested statement with regard to the obvious faults falls to be considered.
… To the extent it is possible to determine, on the basis of exhibit 44 of the documentation of [the buyer] dated 15 October 1997, that these complaints concern the mobile units delivered by [the seller], which is contested by [the seller], according to that exhibit it deals with deliveries which took place before mid-1994. However, [the buyer] did not inform [the seller] thereof within the period of two years after delivery, or in any case in a short time period or within a reasonable period after the complaints were known to her. Article 39 of ULIS and Article 39 of the CISG require observation of these time periods, with a failure to do so leading to the right of the buyer to call upon the non-conformity being lost. [The buyer] has therefore lost her right to invoke those defects. The demand for remuneration of the repair costs and also, given what is also stated in Article 43 ULIS and Article 49(2)(b)(i) CISG, the subsidiary claim under C for the avoidance of the sales agreements on the grounds of obvious faults, consequently cannot succeed.
[…]
5.24. The foregoing consideration means that ground 10 in the case with register number 97/700 and grounds 1,2 and 3 in the case with register number 98/46 must also fail, in so far as they deal with alleged non-conformity.
[…]
Exclusive rights of [the buyer] in the case with register number 98/46
5.28. According to the explanation thereto, ground 3 submits the claim of [the buyer] for the payment of a sum of 418,000 NLG to judgment. As a basis for this claim, [the buyer] has stated that she verbally concluded an exclusive import and sale contract with [the seller] for all German-speaking countries, for which [the buyer] received from [the seller] an exclusive representation and sales right for the products of [the seller]. The factual dealings of the parties since 1970 were in accordance with this. In the opinion of [the buyer], [the seller] had breached those rights by the fact that he had immediately sold and delivered sanitary units to buyers in the protected areas [5] from the Netherlands, which involved a turnover of around 1,900,000 DM. As a consequence of this [the buyer] had suffered damage in the form of loss of profit and income, to be measured as a sum of 418,000 NLG. In assessing this sum, [the buyer] uses as a measure the average turnover over a five year period.
[The seller] has contested this and has submitted grounds.
5.29. The exhibits 4 to 8, 14, 28, 29, 30, 39 and 40 of the counterstatement in principal claim and the statement of claim in the counterclaim, as well as exhibit 47 of the documentation of [the buyer] dated 15 October 1997, which [the buyer] calls upon to support her findings, are considered, given their interconnection, to also be of insufficient significance to allow the acceptance of the stated exclusive right of [the buyer]. Likewise the remaining statements made under 5.28. cannot be established. [The buyer], upon whom the burden of proof rests in connection with this, will in accordance with her offer of proof be allowed to deliver proof of her statements.
[…]
Invoice numbered 95353 dated 31 August 1995 for 39,210 NLG
5.34. Under ground 6, [the buyer] contests her obligation to pay with regard to the invoiced amount because [the seller] did not deliver the sanitary unit that was invoiced, and given that [the buyer] no longer wants to receive it on the grounds of "the suspicion of fraud and the bad quality of [the seller's] products". [The seller] states, inter alia, that [the buyer] refuses to collect the sanitary unit and to pay for it without justified grounds, and is therefore in breach.
5.35. It is clear that [the buyer] can no longer invoke the right to claim non-conformity on the basis of the reasonable period required in Article 39 of the CISG - leaving aside the period of fourteen days contained in Article 11 of the general conditions - because [the buyer] only invoked defects in connection with the sanitary units in appeal, i.e., in her Statement of Grounds of Appeal of 2 December 1997. In stating that she would not receive and pay for the sanitary unit, [the buyer] is in breach, but [the seller] was not in default given that [the seller] had the right to suspend the delivery due to [the buyer's] failure to pay. This means that [the seller] has a right to require payment of the invoiced demand. The statement of [the buyer] that the market value and the value of use of the sanitary units have changed in the meantime cannot alter this - leaving aside the correctness of this statement which is contested by [the seller] - given that possible harmful consequences of the failure to pay and receipt of the sanitary unit have to be for the account of [the buyer] and at the risk of [the buyer]. Nor can the statement of [the buyer] be found to be correct where she states that by the mere lapse of time [the seller] lost the right to require the receipt of the sanitary unit. The circumstances on the grounds of which it would be unacceptable to require [the buyer] to pay the invoiced amount according to the principles of reasonableness and fairness were not stated and were not found.
It follows that ground 6 also fails.
In conclusion in both cases
5.36. [The buyer] and [the seller] shall be allowed to provide the proof of the statements which they made under 5.28. and 5.30. respectively.
FOOTNOTES
1. Associate, Institute of International Commercial Law, Pace University School of Law.
All translations should be verified by cross-checking against the original text.
Translator's notes:
2. A "Procureur" is a legal agent representing parties in civil matters in one District
Court only; he has a monopoly on representation in the District Court to which he is admitted.
3. "Trb." is an abbreviation of "Tractatenblad van het Koninkrijk der Nederlanden"
[Treaty Journal of the Kingdom of the Netherlands], an official publication promulgating treaty texts.
4. As stated in the first sentence of 5.10. the general conditions have to be considered a
part of the agreements which had been concluded between the parties since June 1993.
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