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Reproduced with permission of 6 Vindobona Journal of International Commercial Law and Arbitration (2002), No. 2, 217-228

Battle of the Forms and the Burden of Proof:
An Analysis of BGH 9 January 2002

MĒ del Pilar Perales Viscasillas
Commercial Law Professor
Universidad Carlos III de Madrid

I. Introduction
II. Summary of the facts
III. Battle of the forms

a) The battle of the forms under the CISG
b) Comments on the BGH decision
IV. Burden of proof
a) Relevant considerations
b) Reasoning of the Court
c) Comments on the BGH decision

I. Introduction

The decision of the Bundesgerichtshof (BGH) of January 9, 2002 focuses on two important issues in the 1980 Vienna Sales Convention on International Sale of Goods (CISG):[1]

-    The conflict between clauses on general conditions exchanged by the parties, the so-called battle of the forms: a problem that raises different issues in relation to contract formation and that has led to divergent points of view among scholars, the case law and international and domestic legal rules;
 
-     Burden of proof: Is it governed by the CISG or by domestic non-uniform law?

II. Summary of the facts

The case decided by the BGH, January 9, 2002, considers an international sales contract for 2,557.5 tons of powdered milk between the plaintiff and its assignor (the buyers) whose places of business are in the Netherlands and the defendant (seller) located in Germany. The buyers resold 7.5 tons of the powdered milk to Dutch Company I and 2,550 tons to Algerian Company G.I.-l.

The powdered milk was inspected by the buyers before delivery to Algeria and to Aruba (Netherland Antilles) through the assistance of I.S. Nederland B.V. (presumably an inspection company). After local subsidiaries of the Algerian company processed the powdered milk delivered to Algeria, it was determined that some of the milk had a rancid taste. As a consequence, the Algerian customer of the buyers complained to the buyers about a total of 207.6 tons of powdered milk as well as part of the powdered milk that had already been processed into 10,000 liters of milk. Also, the Dutch customer of the buyers complained to the buyers about the delivery of 7.5 tons of powdered milk because of a sour taste of the milk and claimed damages in the amount of 29,256 Dutch florin which the buyers paid.

After meetings (referred to later), on the 1st of September 1998 the buyers claimed damages from seller in the amount of US $198,150.36.

The Regional Court [Landgericht (LG)] dismissed the complaint. On appeal by the buyers, the Appellate Court [Oberlandesgericht (OLG)] granted the buyers' claim after obtaining an expert opinion on the cause of the defect and dismissed the appeal as to the rest. On appeal to the Supreme Court [Bundesgerichtshof (BGH)], the seller request the dismissal of the case in its entirety.

A relevant point of discussion is the determination of the exact moment at which the infestation of the powdered milk, which caused the rancid taste, took place. The buyers alleged that the infestation already existed at the time of transfer of the risk as a result of faulty processing of the milk by the seller, but that the infestation was only noticeable after the delivery and was consequently and immediately complained of by the buyer. The seller, on the other hand, mantained that the infestation occurred after the transfer of the risk, or at the least, it was not caused by the seller. The BGH, after an extensive discussion of this point, remanded this question for a new trial given that the Court of Appeals incorrectly evaluated the evidence.[2]

III. Battle of the forms

The international contract of sale between the Dutch buyers and the German seller was concluded in the first half of 1998. It is not clear from the facts of the case if the contract was concluded orally and subsequently confirmed by written confirmations of the seller, or whether the telephone order of the buyer was an offer, which was subsequently accepted by those written confirmations. Also, the role that the buyer's conditions (called M.P.C. conditions) play in the contract is an open question, i.e., are those conditions relevant to the formation, modification or performance of the contract? In any event, the Court considered the buyers' terms and conditions to be in contradiction with the seller's terms and conditions, thus implying that this is a formation problem or a modification-of-the-contract problem, the result being the same in either case.

The written confirmations of the seller contained the following clauses:

"We sell exclusively pursuant to our general terms and conditions. Contrary statutory conditions or contrary general terms and conditions of the buyer are expressly not acknowledged and are therefore not part of the contract.

VI. Warranty and Notification of Defects

The buyer must inspect the goods immediately upon delivery and note any complaints on the delivery note [...]. Defects that are not noticeable at the time of delivery can only be claimed before the printed expiration date [...]. The buyer must make available the goods at issue or enough samples of the goods at issue; if he does not do so, the buyer cannot make any warranty claims."

The so-called M.P.C. conditions of the buyer had the following clause:

"Section 10. Sampling and Complaints

Notwithstanding any duty of the seller to pay back the purchase price, or a part thereof, the liability of the seller for damages suffered (and/or to be suffered) is at all times limited to the invoiced amount for the delivered goods."

As is clear from the wording of the different clauses, there is some opposition between them and between their contents and the CISG. Precisely, the seller argued that the application of the CISG was excluded by seller's general terms and conditions and that therefore the German Civil Code [Bürgeliches Gesetzbuch (BGB)] is the relevant law to solve the dispute. However, the Court of Appeals (OLG) understood that the CISG was neither totally nor partially replaced by the conditions of sale of the seller, nor by the conditions used by the buyer. Again, the decision of the Court is not clear as to whether it refers to the existence of a choice of law clause in the general conditions or to a tacit and partial exclusion of the warranty and quality terms of the CISG, or both. In any event, the Court stated that the CISG is the relevant law to decide the case.

As far as the reasoning of the Court regarding the conflict between the general conditions of sale of the seller and those of the buyer, insofar as the latter provide considerable limitations of liability for the seller, inter alia, by restricting any compensation to the amount invoiced for the delivered goods, both the Appellate Court and the Supreme Court basically consider that the application of Art. 19(1) and (3) CISG leads to the exclusion from the contract of the contradictory general conditions. Thus, both Courts adopt the solution known in common law countries as the knock-out rule, rejecting the application of the so-called last shot doctrine.[3]

a) The battle of the forms under the CISG

To find a solution to the conflict of the battle of the forms is not easy. The situation is complicated by the frequent practice of sending offers and acceptances that contain general conditions that reveal contradictions. Questions raised in battle-of-the-forms litigation are: "Under these circumstances, has a contract been concluded?" and,"If so, what are the terms of the contract?" Practice shows that the answer to the first question is often affirmative. Usually the parties go ahead with the contract although each has referred to its own general conditions, the problem being the determination of the content of the contract.

Below, three solutions that have been given to the problem under the CISG will be examined to show the different approaches to solving this critical issue of contract formation.

     1) Conflicting general conditions is a question outside the scope of the Convention by virtue of Art. 4 CISG.[4]

     2) The battle of the forms is a gap that must be resolved by applying general principles upon which the Convention is based. Following this approach, some authors believe that the principle of good faith should apply. They have concluded that clauses contained in the forms which are contradictory cancel each other out, leaving the issue to be governed by the applicable law, usage or good faith, that is, they adopt the solution that is followed in other countries' legal systems such as the United States "knock-out rule" of Section 2-207(3) UCC,[5] the "partiell dissens" rule of §§ 154 and 155 of the German Civil Code (BGB),[6] or the solution adopted in Arts. 2:209(1) of the Principles of European Contract Law (PECL) [7] and 2.22 of the Unidroit Principles of International Comercial Contracts (UPIC).[8] As explained above, the reasoning of the Federal Supreme Court of Germany in this January 9, 2002 ruling favors this approach, probably influenced by both German national non-uniform law and the position of German commentators on the uniform law.[9] A variation on this theory is that the situation produces an implied exclusion of Art. 19 CISG.[10]

     3) The opinion that seems to be the most-followed, although the BGH considers the above mentioned position as to be the prevailing one, leads to the application of what has been referred to as the "last-shot rule": the last person to send his form is considered to control the terms of the contract and therefore the person who wins the battle.[11] [12]

A case law example of the application of the last-shot rule is:

Example. A German buyer ordered doors that had to be manufactured by the seller according to the buyer's specifications. The seller sent the buyer a confirmation letter that contained his general conditions of sale on the back. Those conditions included the statement that "the seller must be notified of any defects in the goods within 8 days of delivery." Subsequently, the seller delivered the goods and the buyer received them. In this case, the seller's confirmation letter was considered a counter-offer that was implicitly accepted by the buyer`s conduct when he received the goods.[13] This Court's reasoning was: When forms are used, the rules of the Convention also apply; consequently, any variation of those forms would be a counter-offer. Such a counter-offer would most certainly be accepted through some type of act of performance.[14]

b) Comments on the BGH decision

Several considerations have to be made in relation to the BGH decision. First, the Supreme Court expressly states that the partial contradiction of the general terms and conditions of the parties did not lead to the failure of the contract in the meaning of Art. 19(1) and (3) CISG because of the lack of a consensus (dissensus) as is shown by the fact that the parties performed the contract. Thus they did not consider the lack of an agreement between the mutual conditions of the contract as material within the meaning of Art. 19 CISG. This statement of the Court misunderstands the role played by Art. 19(1) and (3) CISG in the solution of the battle of the forms when the last-shot doctrine applies. However, had the Court adopted the last-shot doctrine and applied it according to Arts. 19(1) and (3) CISG, the Court would have arrived at exactly the same result as reached in accordance with the knock-out rule. This is so because the parties to the contract concluded through the exchange of general terms and conditions performed the contract evidently without recognizing the contradiction between some of the clauses. Therefore, the lack of a complete consensus cannot by any means imply the invalidity of the contract either under the application of the knock-out rule, or the last-shot rule. It is in this situation - when the contract is performed - that the first question that has to be answered in a battle-of-the-forms controversy receives the same answer under both theories. This was, in our opinion, overlooked by the Court.

However, the second question that has to be answered in a battle-of-the-forms situation, i.e., What are the terms that govern the contract?, receives a different response depending on which of the two relevant theories applies.

Another consideration made by the BGH deserves a more thoughtful analysis. The Supreme Court stated that the warranty clauses in the conditions of the buyer were replaced by the rejection clause of the seller which states that:

"We sell exclusively pursuant to our general terms and conditions. Contrary statutory conditions or contrary general terms and conditions of the buyer are expressly not acknowledged and are therefore not part of the contract."

Both the Appellate Court and the Supreme Court agree on giving effect to that clause of the seller's conditions of sale. If this is so, we do not fully understand why the Supreme Court needed to investigate and review the legal literature regarding the battle of the forms. If, as the Court believes, those general terms and conditions of the buyer which contradict the general terms and conditions of the sellers have to be superseded by the seller's rejection clause, there is no room for application of either of the relevant theories supported by the scholars in relation to the battle-of-the-forms issue. According to the Court, since the seller's rejection clause prevails, the contradictory general terms of the buyer have no effect at all. Therefore, there would be no contradiction between the parties' general conditions.

Besides, the Court does not give any explanation as to why it gave effect to the rejection clause of the general terms and conditions of delivery. Probably the Court overlooked the impact of such a clause. However, the seller's rejection clause has a very important practical effect which is the adoption of the first-shot rule, i.e., having the seller`s term prevail over the buyers' term. Under the Court's view of the problem and considering the application of the knock-out rule, it seems more reasonable and in accordance with the reasons behind the adoption of the knock-out rule to have deprived the clause of any kind of effect. Since the purpose of the rule is to not give either of the parties the advantage of having its terms prevail over the other's terms when there are contradictory clauses, it seems logical to consider that a general clause, whereby one of the parties anticipates the prevalence of its own terms and conditions over the other, will not be part of the contract.[15]

Finally, the Court is convinced that the result would not be different if one followed the contrary opinion, i.e., the last-shot rule, because the terms of conditions of the seller were the last.

IV. Burden of Proof

a) Relevant considerations

Relevant to the case and to an understanding of this issue under the CISG is that after the complaints made by the Algerian customer to its supplier, i.e., the buyers in the contract of sale in dispute, on June 24 and August 19, 1998, representatives of the Algerian company and the buyers (plaintiff) and the seller (defendant) had several meetings in Algeria to clarify the question of compensation for the Algerian company. The results of these negotiations were recorded in four "minutes of amicable settlement" which were signed by both the buyer and the seller.

Furthermore, by letter dated August 24, 1998, the legal department of the seller informed the buyers that:

"We acknowledge that a partial quantity of 177 tons of the total quantity of 3.495 tons of powdered milk, delivered pursuant to the letters of confirmation delivery dated [...] did not meet the contractual requirements.

We do not deny that you have warranty claims because of the quality deviation, but the following two aspects must be considered:

1. [...]

2. All letters of confirmation of delivery mentioned above refer to our general terms and conditions, which must therefore govern our legal relationship. Thus, S.AG does not have to deal with any warranty or damages claims raised by company G.

We expressly emphasize here that we are willing to rescind the contractual relationship with you and/or company A. because of the 177 tons of inadequate powdered milk. Further claims that company G (the Algerian Company) may raise against you or company or company A. are not substantively justified and will not be accepted by us."

b) Reasoning of the Court

The Court of Appeals (OLG) stated that the seller's letter of August 24, 1998, caused a reversal of the burden of proof according to the applicable (non-CISG) German Law, since the seller acknowledged the defect in 177.6 tons of powdered milk. It is not clear whether the OLG considered that the burden of proof over the defective goods is a question outside the scope of the application of the CISG that should be resolved in accordance with the applicable domestic non-uniform law, or that just the issue of the reversal of the burden of proof is governed by the non-uniform law.

The BGH clarifies the question correctly stating that:

-    First, the CISG regulates the burden of proof explicitly (relying on Art. 79(1)) or tacitly (Art. 2(a)) [16] with the consequence that recourse to national non-uniform law is blocked to that extent.
 
-    Second, the CISG follows the rule/exception principle, i.e., under the CISG, when it applies and where the goods are accepted by the buyer without any complaints, it is the buyer who must show and prove that the goods did not meet the contract requirements; it is not the seller who must show and prove that the goods met the contract requirements.
 
-    Third, the Court is of the opinion that the reversal of the burden of proof is outside the scope of the CISG; that the burden of proof rules of the CISG cannot go further than the scope of its substantive applicability (Art. 4, sentence one CISG). In the Court's opinion, the question whether and possibly which evidentiary consequences an actual admission of liability has, is not part of that scope. That question, does not implicate a specific sales law related problem, but rather a legal aspect of a general type.[17]

After this legal analysis, the Supreme Court (BGH) examines the factual situation of the case at hand and concludes stating that the holding of the Appellate Court was correct.

c) Comments on the BGH decision

The BGH is certainly correct when it states that the CISG regulates the burden of proof explicitly (relying On Art. 79(1)) or tacitly (Art. 2(a)) with the consequence that recourse to national non-uniform law is blocked to that extent. Therefore, the Court, a contrario, does not agree with those scholars who mantain that burden of proof is outside the scope of application of the CISG, since it is a procedural question.[18] In this regard, it has to be recognized that the distinction drawn between procedural and substantive questions is somehow artificial and, furthermore, it is not subject to the same understanding in different legal countries.[19] This is why, the distinction has to be rejected and the answer to this question has to be found in line with the purposes and objectives of the uniform international sales law (Art. 7(1) CISG). It is in this sense worth mentioning that the CISG governs some of the means of proving the existence and contents of the contract of sale when it states the principle of freedom of proof in Art. 11 CISG. As it is clear from the wording of this provision, the CISG has, at least, one explicit and clear provision which in some countries will certainly be considered to be a procedural rule.

Although the BGH does not expressly so state, its reasoning corresponds with the provision of Art. 7(2) CISG.[20] According to this Article, when there is a question concerning a matter governed by the Convention which is not expressly settled in it, the question is to be settled in conformity with the general principles on which the CISG is based. As commented before, the Court derives this solution from Arts. 79 and 2(a) CISG.

The Court could have also reached that conclusion using for its analysis Art. 74 CISG which is also a relevant provision in the case at hand, since the buyer claimed damages for the infestation in the milk. According to Art. 74 CISG, it is clear that the buyer has the burden of proof to show that there is a link between the damages and the loss.[21]

The Court also states that where the goods are accepted by the buyer without any complaints, it is the buyer who must show and prove that the goods did not meet the contract requirements; it is not the seller who must show and prove that the goods met the contract requirements. This is a sensible approach if one takes into account that the buyer under Art. 38 CISG has to examine the goods.[22] Also, one can infer this solution from other provisions of the CISG. For example, Art. 39 calls upon the buyer to give notice of the lack of conformity of the goods specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it, i.e., this provision places the burden of proof on the buyer.[23]

Finally, the Supreme Court holds that the reversal of the burden of proof is outside the scope of the CISG; that the burden of proof rules of the CISG cannot go further than the scope of its substantive applicability (Art. 4, sentence one CISG). In the Court's opinion, the question whether and possibly which evidentiary consequences an actual admission of liability has, is not part of that scope. By this reasoning, the Court is somehow in accordance with some commentators who believe that the CISG governs the question of deciding which of the parties should bear the burden of proof, but the lex fori (procedural law) is competent to the determination of whether or not the judge finds the evidence sufficiently convincing.[24]

In conclusion, the BGH was correct in its reasoning for allocating the burden of proof to the seller in accordance with the factual evidence of this case.


FOOTNOTES

1. As of the 2nd of July 2002, there are 61 States that have adopted the CISG: Argentina, Australia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Burundi, Canada, Chile, China, Colombia, Croatia, Cuba, Czech Republic, Denamark, Ecuador, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Guinea, Hungary, Iceland, Iraq, Israel, Italy, Kyrgyzstan, Latvia, Lesotho, Lithuania, Luxembourg, Mauritania, Mexico, Mongolia, Netherlands, New Zealand, Norway, Peru, Poland, Republic of Moldova, Romania, Russian Federation, Saint Vincent and the Grenadines, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syrian Arab Republiq, Uganda, Ukraine, United States of America, Uruguay, Uzbekistan, Yugoslavia, and Zambia (See <http://www.uncitral.org>).

2. Also interesting is the reasoning of the Court regarding the possible exoneration of the seller under Article 79 CISG. The Court states that this exoneration would only be possible if the seller can prove certain circumstances as they are mentioned in the decision.

3. The Court expressly indicates that: "The question to what extent colliding general terms and conditions become an integral part of a contract where the CISG applies, is answered in different ways in the legal literature. According to the (probably) prevailing opinion, partially diverging general terms and conditions become an integral part of a contract (only) insofar as they do not contradict each other; the statutory provisions apply to the rest (so-called "rest validity theory" [...]. Whether there is such a contradiction that impedes the integration, cannot be determined only by an interpretation of the wording of individual clauses but only upon the full appraisal of all relevant provisions."

4. von HUBER, U., "Der Uncitral-Entwurf eines Übereinkommens über Internationale Warenkaufverträge" (1979), 43 Rabels Zeitschrift, pp.444-445; DESSEMONTET, F., "La Convention des Nations Unies du 11 avril 1980 sur les contrats de vente internationale de marchandises" in Dessemontet, F. (ed), Les contrats de vente internationale de marchandises, (1991, Cedidac), p.56; and JAMETTI, M. "Der Vertragsabschluss", in Doralt, P. Das Uncitral-Kaufrecht im Vergleich zum österreichischen Recht, (1985, Manz), p.46.

See holding the opposite view: Oberster Gerichtshof, 6 February 1996 (Austria), available at <http://cisgw3.law.pace.edu/cases/960206a3.html>; AG Nordhorn, 14 July 1994 (Germany), available at <http://cisgw3.law.pace.edu/cases/940714g1.html>; Kantonsgericht Freiburg, 23 January 1998 (Switzerland), available at <http://cisgw3.law.pace.edu/cases/980123s1/html>; and among the scholars: HUBER, U. "Article 45", in SCHLECHTRIEM, P. (ed), Commentary on the UN Convention on the International Sale of Goods (CISG), (1998, Clarendon Press), No. 47.

5. Article 2 of The Uniform Commercial Code (1987) of the USA is being subject to a revision by the National Conference on Commissioners on Uniform Sate Law, in whose Draft of May 1, 1998, the last version of Section 2-207 UCC substantially improves the actual wording. It states that:

"If (i) conduct by both parties recognizes the existence of a contract although their records do not otherwise establish a contract, (ii) a contract is formed by an offer and acceptance, or (iii) a contract formed in any manner is confirmed by a record that contains terms additional to or different from those in the contract being confirmed, the terms of the contract, subject to Section 2-202, are:
(a) terms that appear in the records of both parties;
(b) terms, whether in a record or not, to which both parties agree; and
(c) terms supplied or incorporated under any provision of this Act."

6. The new BGB took effect on the 1st of January 2002, and replaced the former BGB 1869, as amended.

7. European Principles of Contract Law, 1998. See comment to Art. 2:209 PECL and illustrations 1 and 2.

8. Unidroit Principles of International Commercial Contracts, Rome: Unidroit, 1994.

See comment on the BGB, UCC, UPIC, PECL in SCHLECHTRIEM, P. "Kollidierende Geschäftsbedingungen im internationalen Vertragsrecht, in: Transport- und Vertriebsrecht (2000)." Festgabe für Professor Dr. Rolf Herber, 1999, Luchterhand, pp.37-49.

9. STAHL, H. "Standard Business Conditions in Germany under the Vienna Convention" (1993) 15 The Comparative Yearbook of International Business, p.381; LUDWIG, K.S. "Der Vertragsschluss nach UN-Kaufrecht im Spannungsverhältnis von Common Law und Civil Law: dargestellt auf der Grundlage der Rechtsordnungen Englands und Deutschlands", in Studien zum vegleichenden und internationalen Recht-Comparative and International Law Studies, Band 24, (1994, Peter Lang), p.412.

10. Precisely citing Prof. Schlechtriem, the AG Kehl, 6 October 1995 (Germany), available at <http://cisgw3.law.pace.edu/cases/951006g1.html>, seems to adopt this thesis. Impliedly, both the Cour de Cassation, 2 December 1997 (France), available at <http://cisgw3.law.pace.edu/cases/971202f1.html>; and the Cour de Cassation, 16 July 1998 (France), available at <http://cisgw3.law.pace.edu/cases/980716f1.html>, seem to apply the knock-out rule to determine the competent tribunal to hear the case in dispute. It is worth mentioning that in the three cases cited the crucial point was the determination of the competent jurisdiction to solve the dispute. To this extent, even though we favor the opposite approach to solve the battle of the forms when the CISG is the applicable Law, i.e., the last-shot rule, we have to recognize that perhaps a different solution could be derived when the contradictory clauses in the general conditions relate to either forum selection clauses or to the applicable law. This is so because those issues have to be examined under the severability principle and under a different applicable law, which usually requires stricter requirements. See, for example, Article II of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Therefore, when the issue in question does not belong to any of the above referred categories, then, in our opinion, the last-shot rule should apply.

11. NEUMAYER, K. "Das Wiener Kaufrechts-Übereinkommen und die sogennante 'battle of the forms', in Freiheit und Zwang: rechtliche, wirtschaftliche und gesellschaftliche Aspekete. Fetschrift zum 60. Geburstag von Hans Giger, (1989, Stämpfli), p.524; von PETZINGER, W. "'Battle of Forms' und Allgemeine Geschäftsbedingungen im amerikanischen Recht" (1988) Recht der International Wirtschaftrecht, p.679; HERBER, R. and CZERWENKA, B. Internationales Kaufrecht, Kommentar zu dem Übereinkommender Vereinten Nationen vom 11. April 1980 über Verträge über den internationalen Warenkauf, 1991, C.H. Beck, München, at p.106; DRAETTA, U. "La Battle of Forms nella prassi del commercio internazionale" (1986) 2 Rivista di Diritto Internazionale Privato e Processuale, p.326; PERALES VISCASILLAS, M.P., La formación del contrato de compraventa internacional de mercaderías, 1996, Tirant lo blanch, Valencia, 1996, at p.719; KRITZER, A., International Contract Manual, Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, 1989, Kluwer, Deventer, at p.176; and the Secretariat Commentary to Art. 17 1978 Draft, § 15.

12. The following cases have applied the last-shot rule under the 1964 Hague Convention on the Formation of the Contracts for the International Sale of Goods: OLG Hamm, 7 December 1978 (2 U 35/78); OLG Hamm, 18 October 1982 (2 W 29/82); and LG Landshut, 14 July 1976 (HK 0 135/75).

See in the field of CISG: OLG Saarbrucken, 13 January 1993 (Germany) available at <http://cisgw3.law.pace.edu/cases/930113g1.html>; and OLG München, 11 March 1998 (Germany), available at <http://cisgw3.law.pace.edu/cases/980311g1.html>.

13. OLG Saarbrücken, 13 January 1993 (Germany), supra note 12.

14. PERALES VISCASILLAS, M.P. "Battle of the Forms under the 1980 United Nations Convention on Contracts for the International Sale of Goods: A Comparison with Section 2-207 UCC and the Unidroit Principles" (1998) 10 Pace International Law Review, pp.97-155, also available at <http://www.cisg.law.pace.edu/cisg/biblio/pperales.html>.

15. Furthermore, this reasoning is adopted by the European Principles which have decided to follow the knock-out rule to solve the battle-of-the-forms problem. According to Art. 2:209(1) PECL, the general conditions form part of the contract to the extent that they are common in substance; therefore, the conflicting terms would be expelled from the contract. However, following Art. 2:209(2) PECL, no contract is formed if one party: a) has indicated in advance, explicitly, and not by general conditions, that it does not intend to be bound by a contract on the basis of paragraph (1), i.e., there is a so-called "clause paramount"; or b) without delay, informs the other party that it does not intend to be bound by such contract.

16. Interesting enough, scholars are divided on the interpretation of paragraph (a) of Art. 2 CISG in relation to burden of proof. According to Prof. HONNOLD, J.O., Uniform Law for International Sale under the 1980 United Nations Convention, 1999, Kluwer Law International, The Hague, § 50, at pp.97-98, it is on the seller.

17. The Court also cites other issues such as defective mens rea, assignment and set-off, which will then not be covered by the CISG. However, there is a great deal of discussion among scholars and case law on those issues and their coverage by the CISG. For example, the case law has stated in relation to set-off that it is not covered by the CISG on the basis of either Art. 4 CISG (OLG Koblenz, 17 September 1993 (Germany), available at <http://cisgw3.law.pace.edu/cases/930917g1.html>; OLG Hamm, 9 June 1995 (Germany) <http://cisgw3.law.pace.edu/cases/950609g1.html>; OLG Stuttgart, 21 August 1995 (Germany), <http://cisgw3.law.pace.edu/cases/950821g1.html>; and OLG Düsseldorf, 11 July 1996 (Germany), available at <http://cisgw3.law.pace.edu/cases/960711g1.html>), or Art. 7 CISG (OLG Hamm, 9 June 1995 (Germany), available at <http://cisgw3.law.pace.edu/cases/950609g1.html>. However, there are some exceptions in the case law which are in line with with the wording of Art. 88(3) CISG, and the solution that can be derived from it, i.e., an application of the CISG to set off when there are mutual demands by the parties derived from the same sales contract (AG Duisburg, 13 April 2000 (Germany) available at <http://cisgw3.law.pace.edu/cases/000413g1.html>; OLG München, 9 July 1997 (Germany), available at <http://cisgw3.law.pace.edu/cases/970709g1.html>; and Rb Arnhem, 25 February 1993 (The Netherlands), available at <http://cisgw3.law.pace.edu/cases/930225n1.html>). But see: the opposite view in Rb Roermond, 6 May 1993 (The Netherlands), available at <http://cisgw3.law.pace.edu/cases/930506n1.html>.

18. KHOO, in BIANCA, C.M. and BONELL, M.J. (ed), Commentary on the International Sales Law. The 1980 Vienna Sales Convention (1987, Giuffrè), p.39.

19. For example, Spanish Law, both the Commercial Code 1885 (Art. 51) and the 2000 Spanish Procedural Law, have rules of evidence.

20. This line of reasoning in relation with the burden of proof has been followed by: MAGNUS, U., Die Allgemeinen Grundsätze im UN-Kaufrecht [General Principles of UN-Sales Law] (1995) 59 Rabels Zeitschrift für ausländisches und internationals Privatrecht, pp.1 et seq, available in English translation at <http://www.cisg.law.pace.edu/cisg/biblio/magnus.html>; FERRARI, F., "Burden of Proof under the CISG" (2000) 5 Int'l Business Law Journal, pp.665 et seq., also available at <http://www.cisg.law.pace.edu/cisg/biblio/ferrari5.html>; GIOVANNUCCI ORLANDI, C. "Procedural Law issues and Uniform Law Conventions" (2000) 1 Uniform Law Review, pp.27 et seq., esp. p.31, where the author states through a comparison of the policy behind the Swiss and USA legal systems that the policy considerations under CISG should be the uniform coverage of the law of evidence under CISG. According to Prof. Ferrari, three general principles are applicable: (1) Any party who wants to derive beneficial legal consequences from a legal provision has to prove the existence of the factual prerequisites of that provision; (2) Any party claiming an exception has to prove the existence of the factual prerequisites of that exception; and (3) Those facts that are exclusively in a party's sphere of responsibility and which therefore are, at least theoretically, better known to that party have to be proven by that party, since it is that party who exercises the control over that sphere.

21. See, ENDERLEIN, F. and MASKOW, D., International Sales Law: United Nations Convention on Contracts for the International Sale of Goods, 1992, Oceana Publications, New York, p.300.

22. See reaching the same result: Handelsgericht Zürich, 9 September 1993 (Switzerland), available at <http://cisgw3.law.pace.edu/cases/930909s1.html>; OLG Innsbruck, 1 July 1994 (Austria), available at <http://cisgw3.law.pace.edu/cases/940701a3.html>; and LG Düsseldorf, 25 August 1994 (Germany), available at <http://cisgw3.law.pace.edu/cases/940825g1.html>. See on the contrary: ICC Arbitral Award 6653 of 26 March 1993, available at <http://cisgw3.law.pace.edu/cases/936653i1.html>, indicating that it is a question that has to be ruled by the national domestic applicable law.

23. Handelsgericht Zürich, 9 September 1993 (Switzerland), available at <http://cisgw3.law.pace.edu/cases/930909s1.html>; and Handelsgericht Zürich, 30 November 1998 (Switzerland), available at <http://cisgw3.law.pace.edu/cases/981130s1.html>, that have stated that it is impliedly derived from Arts. 38 and 39 and besides it is one of the general principles of the CISG. See also based on Art. 79(1) CISG: Tribunal di Vigevano, 12 July 2000 (Italy) available at <http://cisgw3.law.pace.edu/cases/000712i3.html>. Also in accord to place the burden of proof on the buyer: LG Hamburg, 17 June 1996 (Germany), available at <http://cisgw3.law.pace.edu/cases/960617g1.html>; and ICC Arbitral Award 8611/97 of 23 January 1997, available at <http://cisgw3.law.pace.edu/cases/978611i1.html>.

24. See correctly: GIOVANNUCCI supra note 20, p.28 and supra note 21.


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