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Reproduced with permission of 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 1-26

Austrian Cases on the UN Convention on Contracts
for the International Sale of Goods

Willibald Posch [*] and Thoma Petz [**]

  1. Introduction
  2. Issues Discussed by the Austrian Supreme Court under CISG
  3. General Provisions (Articles 7-13 CISG)
  4. Formation of Contract (Articles 14-25 CISG)
  5. Substantive Sales Law
  6. Closing Remarks

1. INTRODUCTION

The Convention on Contracts for the International Sale of Goods (CISG) [1] is also known as the "Vienna (Sales) Convention" because it was adopted in April 1980 by the representatives of 62 nations on the occasion of a diplomatic conference organised by the United Nations Commission on International Trade Law (UNCITRAL) in Vienna. That explains why the advocates of the unification of the law of sale of goods in the Austrian Federal Ministry of Justice intended to make Austria the tenth state to ratify CISG. According to Article 99 CISG, Austria would thus have caused the Convention to enter into force. The Austrian Parliament was delayed, however, and it was not before [page 1] December 1987 that CISG was ratified.[2] Thus Austria failed, after all, to be the tenth Contracting State and CISG came into force in Austria at the beginning of 1989.[3]

In the first six years after its entry into force in Austria, CISG was only of limited importance,[4] but with the help of Austrian legal scholars [5] it has become well established in Austrian court practice in recent years. In earlier times Austrian practitioners and legal consultants of the Austrian Federal Chamber of Commerce used to suggest the application of CISG to be contractually excluded by the parties of an international sales contract. The explanation for this position may, on the one hand, be found in CISG's deviation from the traditional substantive sales law as established by both the Austrian Civil and Commercial Codes, and on the other hand, it appeared to provide no significant advantages for Austrian parties.

This skeptical approach to CISG is not yet been completely overcome. Many Austrian companies still resort to standard terms or standardised forms excluding the application of CISG, thereby exercising their right of "opting out" as provided by Article 6 CISG, and quite often so, without any further consideration.[6] Moreover, such clauses were (and still are) often set up in general terms designating the applicable substantive law of a Contracting State, since the draftsmen of the standard terms were not aware of the fact that such a clause would not automatically entail the exclusion of the application of CISG.[7]

Thus, the fact that the Supreme Court (OGH) has referred [8] to CISG in more than thirty cases by the end of 2001 becomes even more remarkable, and the statement of a German [page 2] "CISG-specialist" is obviously correct that "with the exception of the Austrian Supreme Court no other Supreme Court of any Contracting State referred as often to CISG as the German Supreme Court (BGH)".[9] In relation to the respective populations of the two countries the quantity of decisions related to CISG is significantly higher in Austria. CISG's earlier entry into law in Austria cannot satisfactorily explain this contrast, which is even more astonishing if one considers that Austrian practitioners have not had the useful and valuable experience of German lawyers and judges with the Hague Uniform Laws of International Sale of Goods.[10]

The first reported decision of an Austrian court applying rules of substantive law of CISG was rendered by the District Commercial Court of Vienna on 20 February, 1992.[11] In those early days, the Austrian Supreme Court used to refer to CISG only by way of obiter dicta.[12] In April 1994, the Austrian Supreme Court applied Article 1(1)(b) CISG for the first time, determining the applicable law. In this case, pursuant to the "characteristic performance test" under 36 of the Austrian Law of Private International Law (IPRG),[13] the judgment was governed by the national substantive law of a non-Contracting State.[14] [page 3]

Finally, the judgment of the Second Chamber of the Austrian Supreme Court of 10 November, 1994 [15] added a new dimension to Austrian case law on CISG. For the first time, the Austrian Supreme Court had to deal with the content of specific substantive provisions of CISG,[16] and that explains why this holding is generally deemed to be the "the Austrian Supreme Court's first CISG-decision on the merits of a case".[17]

2. ISSUES DISCUSSED BY THE AUSTRIAN SUPREME COURT UNDER CISG

2.1 Survey

In its more than 30 decisions on CISG, the Austrian Supreme Court had to deal with a surprising variety of legal issues. It had to resolve questions concerning the sphere of application, validity and precedence of trade usages, interpretation of declarations of intent, formal requirements, offer and acceptance, and the formation of contracts. Furthermore, issues such as modification of contract, obligations of seller or buyer, remedies for breach of contract by seller or buyer, assessment, and mitigation of damages were discussed.

2.2 Sphere of Application (Articles 1 - 6 CISG)

A considerable number of the Austrian Supreme Court decisions on CISG concern the rules on its sphere of application (Articles 1 to 6).

Thus, the private international law clause of Article 1(1)(b) CISG was correctly applied by the Austrian Supreme Court for the first time in May 1994[18], in a case involving a dispute between an Austrian seller and a German buyer. The application of CISG was denied, because at the time of the conclusion of the contract, Germany had not yet ratified the Convention and the characteristic performance test pointed to domestic German law as the law at the seller's place of business.

A few years later the Austrian Supreme Court had to apply the private international law clause of Article 1(1)(b) CISG to a case that concerned a contract between an Austrian buyer and a Dutch seller.[19] Since the contract had been concluded in November 1989, at [page 4] a time when only Austria was already a Contracting State, the characteristic performance test of 36 of the Austrian Private International Law Act led to the application of Dutch domestic law, viz. the Hague Conventions on Uniform Sales Law which were still in force in the Netherlands at the time of the conclusion of the contract.

In two other decisions, the international private law clause of Article 1(1)(b) CISG led to the application of domestic Austrian law. Of special interest is the later [20] rather than the earlier [21] of these cases. Decided by the Austrian Supreme Court basically along the same lines as in the aforementioned decisions, this case involved a sales contract between an Austrian and a Germany corporation in respect of some hundred tons of natural gas. When this contract was concluded in December 1990, the Convention had not yet been in force in Germany. The contract provided that the German company bought natural gas from the Austrian company in order to sell it on the Belgium market. The supplier of the Austrian seller, however, did not give the permission which was required for selling the natural gas in a BENELUX country.

Consequently, the seller failed to name the loading point and in turn, the buyer refused to issue a letter of credit so that, in the end, no delivery took place. Claiming lost profit from the envisaged resale of the natural gas in Belgium, the buyer instituted proceedings in an Austrian Court. The Austrian Supreme Court held that, as the seller's performance was the "characteristic" one, Austrian domestic law as "the seller's law" was applicable to the facts of this case.

However, the Austrian Supreme Court did not always apply the private international law clause of Article 1(1)(b) CISG correctly. In a case [22] concerning the sale of machinery for the production of steel by an Austrian manufacturer to a German buyer, the Austrian Supreme Court failed to apply CISG. Instead, it held without any reference to Article 1(1)(b) CISG that Austrian domestic law was the applicable law. Since the contract in question was a contract for work and materials to which the Convention applies [page 5] according to its Article 3(1), and since CISG had already entered into effect in Austria at the time of the conclusion of the contract, the Court was wrong.

The applicability test as provided by Article 1(1)(a) CISG has sometimes been ill-conceived by Austrian lawyers and judges, especially in respect of contracts between parties having their places of business in Germany and in Austria. These two countries are not only neighbouring States, they also share the same language and, to a large extent, the same legal tradition. Therefore, their domestic laws of sales are closely related. Consequently, for parties involved in Austrian-German cross-border sales contracts, the private international law problems that resulted from the entry into force of CISG in the two jurisdictions have often occurred as a surprise. The existence of CISG used to be neglected by the parties upon conclusion of the contract and in the proceedings before the courts. That motivated the Austrian Supreme Court on various occasions [23] to place particular emphasis on the aspect that Article 1(1)(a) CISG has to be considered in determining the law that governs an international contract for the sale of goods.

When discussing the conflict of laws aspects of CISG, another important decision of the Austrian Supreme Court has to be mentioned.[24] In this case of a contract for the sale of sunshades, the Czech manufacturer sought payment of the price by the Austrian buyer who reacted with a claim for damages for defective performance. One of the controversial issues in this case was whether a choice of law clause in favour of "Austrian law" would entail the application of CISG. In an earlier award of the International Arbitration Tribunal of the Austrian Chamber of Commerce [25] it was regarded as "self-evident"[26] that a choice of law clause held in such general terms would [page 6] result in the application of CISG, which provides the specific rules for international sales contracts in Austrian law.

In its "Czech sunshades" decision, the Austrian Supreme Court came to the same conclusion.[27] CISG has become, upon its ratification, an integral part of Austrian domestic law. Therefore, a choice of law clause in an international sales contract using, without any further specification, such broad language as "Austrian law shall apply" leads to the application of CISG.

In another case the Austrian Supreme Court gave a clear answer to the question whether the identical citizenship of the contracting parties would affect the application of CISG to a cross-border sale. Quoting Article 1(3) CISG, the Court held that citizenship of the parties would not matter, but that all depended on whether the parties had their places of business in different countries.[28]

Shortly after CISG had become effective in Austria, the Austrian Supreme Court had the opportunity to explicitly clarify that CISG would not apply to contracts that had been concluded before 1 January, 1989.[29] Early on, the Court also had to decide which kind of agreements would meet the requirements of an "international contract for the sale of goods" according to CISG.[30] A cross-border drop shipment was regarded to be subject to the application of CISG, at least in principle.[31] Contrary thereto, a processing contract providing that the buyer of the finished goods had to supply all the raw materials for being processed and returned thereafter by the seller was not considered to comply with the requirements provided by Article 3(2) CISG for international contracts for the "sale of goods".[32] Furthermore, in a case concerning the sale of a deluxe sports car manufactured by Lamborghini,[33] the Court held that the transaction was a consumer contract, since the purchase was for private use. Thus, pursuant to Article 2 (a), the case did not fall within CISG. [page 7]

It is commonplace that issues which are not covered by CISG are governed by the domestic law that is designated as applicable by the conflict rules of the forum.[34] However, the Austrian Supreme Court repeatedly found it necessary to have this aspect stressed explicitly. It did so with respect to limitation of actions and limitation periods,[35] an action for recourse,[36] agency and lack of authority,[37] error,[38] assumption of a debt,[39] claims for status quo ante arising from an avoided sales contract,[40] assignment,[41] the obligations of a surety,[42] and a party's claim that a bank guarantee may not be invoked.[43]

In a recent decision, the Austrian Supreme Court had to examine the validity of an agreement between the parties of an international sales contract modifying the buyer's rights, and it held that, pursuant to Article 4(a) CISG, the Convention did not apply. Whether the agreement was valid was to be resolved in compliance with the domestic law that, according to the rules of private international law, would govern the contract.[44]

On several occasions, an Austrian corporation had bought tombstones from a German corporation, which used to respond to the buyer's orders each time by a letter of confirmation that comprised the seller's standard terms which modified the buyer's statutory rights by excluding - inter alia - his right of retention. The crucial question before the Austrian Supreme Court was whether this clause was valid. The Court held that questions relating to the validity of clauses in standard terms modifying the rights of a party are not governed by CISG. Consequently, as the conflict rules led to the application of the law at the seller's place of business, German domestic law had to be [page 8] applied, and under German commercial law the right of retention may be validly excluded by agreement in contracts between merchants.

However, the Austrian Supreme Court also held that provisions of domestic law were to be regarded as invalid if they infringed the fundamental principles on which CISG is based. This would be the case if a domestic law excluded the right to declare a contract void.[45] In the Court's view it was sufficient, however, if the loyal party's right to claim compensatory damages would be preserved. Thus, the recognition of the validity of a contractual exclusion of the right of retention by domestic German law was accepted.

3. GENERAL PROVISIONS (ARTICLES 7 - 13 CISG)

On several occasions, the Austrian Supreme Court had the opportunity to discuss issues relating to the interpretation of statements made by parties to an international sales contract. In particular, the Court had to deal with the establishment of practices between two parties and the interaction between trade usages and the Convention.

In its important decision of 6 February, 1996, the Supreme Court held that conceptions that a party may have had during the negotiations but did not find expression in an agreement between the parties may be regarded as "established practices between the parties" pursuant to Article 9(1) CISG.[46] Consequently, such (pre-contractual) practice of one party may, from the beginning of the business relations of the parties (including their first contact), become part of an international contract for the sale of goods. However, this is provided that it is obvious to the other party from the circumstances of the negotiations that his or her partner is prepared to conclude the contract only under specific conditions or in a special form.

In two judgments, the Austrian Supreme Court had to deal with the question whether trade usages prevail over the non-mandatory provisions of CISG.[47] Here, the decision of 15 October, 1998 concerning the "Austrian Usages for the Trade With Timber"[48] is of [page 9] fundamental importance.[49] In this case, the Austrian Supreme Court held that trade usages to which the parties agreed, as well as practices they established between themselves, prevail over optional provisions of CISG. However, according to the Court, a party to an international sales contract has to be familiar only with those international trade usages that are commonly known and regularly observed by parties to contracts of that specific branch in the specific geographic area where the party in question has his or her place of business. Whether the domestic "Austrian Usages for the Trade with Lumber" constitute such a widely known and regularly observed international trade usage in cross-boarder sales of timber by an Austrian seller to an Italian buyer is a question of fact. In the absence of any finding of fact on this issue, the Supreme Court had to remit this case to the Court of First Instance.

In the more recent decision [50] on the relationship of trade usages and CISG, the Austrian Supreme Court had the opportunity to decide on the merits of the case. Again, genuine domestic usages for the trade of timber, the "Tegernsee Usages", were at stake. The Austrian Supreme Court held that these Bavarian usages prevailed over the provisions of CISG, since it had been established by the Court of First Instance that these usages were widely known to and regularly observed by parties in cross-border timber trade between Austria and Germany.

Hitherto, the Austrian Supreme Court had to deal with issues concerning the question of formal requirements of an international sales contract, only in obiter dicta. In one case, the Court referred to Article 11 CISG when accentuating that its abstention from prescribing the observance of any formal requirement is considered a fundamental principle of the Convention.[51] Furthermore, an analogy to Article 13 CISG was part of the argument in a case concerning the writing requirement of Article 30 CMR, where the Court held that the formal requirement is met whenever a notice is sent by telefacsimile.[52] [page 10]

4. FORMATION OF CONTRACT (ARTICLES 14 - 25 CISG)

The obscure relationship of Articles 14 and 55 CISG and the question whether an offer has to be definite to create a valid contract was the central issue in the Supreme Court's decision of 10 November, 1994.[53] In this case a contract for the sale of chinchilla furs was concluded between a German breeder and an Austrian who occasionally traded with furs without an agreement on the precise quantity and price. The only agreement between the parties was that, for furs of average and good quality, a price of 35 to 60 German Marks per item should be paid.[54]

The Supreme Court found that, according to its Articles 1(1)(a) and 10(b), CISG applied to the facts of the case and came to the conclusion that the offer was sufficiently definite. Whilst the Court of Appeal reached this result on the basis of Article 55, the Supreme Court resorted to Article 14 CISG finding that the criteria of definiteness of an offer are met if the parties have implicitly fixed both the quantity and the price in a way that makes it possible to identify the parties' intention. As the parties had agreed on a price margin, there was a sufficiently definite indicator for determining the price in respect of the quantity and quality of the furs that the German breeder had delivered. The Court was not forced to search for a solution of the well-known inconsistency of Articles 14 and 55 CISG.[55]

In its judgment of 20 March, 1997,[56] the Austrian Supreme Court did not regard it as necessary to comment on this issue, but held [57] that an offer would comply with the requirement of definiteness under Article 14 CISG whenever "a reasonable person of the same kind as the offeree in the same circumstances"[58] would understand the substance of the resulting agreement as sufficiently definite. [page 11]

In its most recent decision [59] on Article 14 CISG, the Austrian Supreme Court resumed the arguments of its earlier cases in point and held that the decisive factor for the interpretation of the offer, once the definiteness of an offer is established, is the offeror's intent which the offeree knew or could not have been unaware. Previous thereto, the Court had the opportunity to clarify that an offer could be accepted by no other party as the one to which it was addressed.[60] In other words, an offer may only bind the offeror in respect of the offeree. The Court deduces this position from Articles 14 and 18 CISG and from general principles of contract law.

In the context of formation of contract, another issue before the Austrian Supreme Court [61] was that of material alteration according to Article 19(2) and (3) CISG. The Court concluded that the enumeration of terms that materially alter an offer in Article 19(3) CISG constituted a general assumption that may be rebutted in an individual case.[62] This opinion is consistent with the prevailing view of Austrian legal scholars. Consequently, even though these terms are explicitly mentioned as material alterations, not all of these alterations necessarily have to be material in their character. In the opinion of the Supreme Court, whether a term constitutes a material or a non-material alteration of the offer depends on factors such as practices established between the parties, trade usages, conduct during preliminary negotiations, and particular circumstances of the individual case. On the merits of the case in point, the Court held that alterations that were more favourable for the offeror would not need a "counter- acceptance".

5. SUBSTANTIVE SALES LAW

5.1 General provisions (Articles 25 - 29 CISG)

Hitherto, the Austrian Supreme Court has, against all expectations, only rarely been faced with the interpretation and application of the general provisions of Part III of CISG, and has rendered rather insignificant decisions thereto. Surprisingly, this is particularly true with regard to the concept of "fundamental breach" in Article 25 CISG, [page 12] since, notwithstanding its "pivotal character"[63] within the Convention's system of remedies, no significant opinion on this provision has been rendered so far.

The Court had the opportunity to specify that, according to Article 27 CISG, a buyer giving notice of lack of conformity in due time would not bear the risk of delay or loss.[64] Furthermore, it held that this provision would not apply to oral statements of simultaneously present parties and that it would be sufficient that such oral statements were articulate and audible by the other party.[65] No more than two holdings on Article 29 CISG may further be mentioned. Thus, the question arose [66] as to whether the parties were allowed under CISG to unanimously modify the contract they had concluded by increasing the quantity of the goods. The Court held that the Convention permitted such a unanimous subsequent modification of an international sales contract. And in another case, the parties to an international sale of goods agreed to unanimously declare the contract void. It was non-controversial that the parties were entitled thereto under Article 6 CISG. However, the Austrian Supreme Court resorted to Article 29 CISG to support the position that the parties' agreement to modify an international sales contract falls within the Convention's scope of application.[67]

5.2 Obligations of the seller and remedies of the buyer (Articles 30 - 52 CISG)

The important decision of 6 February 1996 [68] gave rise to the interpretation of Article 30 CISG by the Austrian Supreme Court. This Article deals with the general obligation of the seller to deliver the goods. The Court held that, as a consequence of this provision, the buyer was entitled to expect the goods to be put to his or her unrestricted disposal as long as no extraordinary obstacles (e.g. embargo, limitations by law, restrictions affecting the specific branch of business) occur, and that it was the seller's obligation to disclose any potential restrictions of the use of the goods contracted for. This duty to inform flows from Article 41 CISG which provides that "the seller must deliver goods which are free from any right or claim of a third party unless the buyer agreed to take the goods subject to that right or claim". [page 13]

On 10 September 1998, the Austrian Supreme Court rendered two decisions [69] that were occasioned by the adoption of the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters [70] that entered into effect on 1 September 1996. In order to determine the meaning of "place of performance" in Article 5 N 1 of this Convention,[71] the Austrian Supreme Court had to interpret the contractual terms "free construction site Vienna"[72] and "free domicile Klagenfurt".[73] In these two cases,[74] the German sellers claimed that these contractual terms would indicate that the respective places of performance were located in Austria, and that, under the Lugano Convention, they were entitled to sue the Austrian buyers in Austrian Courts. As CISG applied to both Austrian-German cross-border sales, the place of performance had to be determined in accordance with Article 31 CISG.

The Court held that, if uniform substantive law applied, the contractual obligation to perform at a certain place would have to be interpreted pursuant to the relevant provisions of the respective uniform law, and rejected the claimants' arguments. With reference to the commentaries on CISG edited by von Caemmerer/Schlechtriem and Honsell, the Supreme Court argued that, according to Article 31 CISG, terms like the ones used in the contracts in question were insufficient to constitute a place of performance and entail jurisdiction of the courts in the Austrian cities mentioned therein.

In the first case,[75] the Austrian Supreme Court held that Article 31 contained provisions concerning the place for delivery. When the parties agreed on a certain place for delivery, they would envisage aspects such as the costs of the carriage of goods, the modalities of delivery, and the bearing of risk. It would be inappropriate to combine these issues with matters of jurisdiction, especially, if the place for delivery is neither the place of business of the seller, nor that of the buyer. It should also be considered [page 14] that, according to Article 31(a) CISG, the seller's place of business is the place of performance that is relevant for the determination of subject-matter jurisdiction.

In the second judgment of 10 September, 1998,[76] the Austrian Supreme Court complemented it decision on Article 31 CISG by stating that terms imposing an obligation on the seller to ship the goods would not constitute jurisdiction at the place where the goods should arrive. The Court added, however, that it is a matter of interpretation whether a contractual term fixing the place for delivery is, at the same time, intended to determine special jurisdiction under Article 5 N 1 of the Lugano Convention. As in the previous case, the appeal was dismissed and jurisdiction of the relevant Court of First Instance denied.

In its decision of 29 June, 1999 [77] the Austrian Supreme Court held that the Convention's concept of "non-conformity of goods" as stated in Articles 35 et seq. CISG had to be understood in a broad sense. Therefore, it also comprises the delivery of a commodity of a different kind as the one contracted for. Consequently, under the regime of CISG, "wrong delivery" has to be assessed by Articles 35 et seq. CISG instead of being treated as a case of non-delivery.[78]

More important in this context is a recent decision [79] of the Austrian Supreme Court which concerned the sale of a second hand placement machine by a German seller to an Austrian buyer. 8 of the Austrian Federal Regulation on the Security of Machines (MSV)[80] requires the "CE-label", but this compulsory mark was missing. The buyer asserted to have notified the seller of the lack of conformity in due time and claimed reduction of price.

The Court rejected the claimant's argument that the Austrian Federal Regulation on the Security of Machines ought to be considered when assessing the conformity of the contracted goods. In the absence of a party agreement on this point, the "objective minimum standard" as provided by Article 35(2) CISG should instead be relevant. This means that goods are in conformity with the contract if they are fit for the purposes for which goods of the same description would ordinarily be used. In the Court's opinion, it [page 15] may be taken as a rule that the words "purposes for which goods of the same description would ordinarily be used" have to be determined in compliance with the standards of the seller's country. Consequently, the goods need not be in conformity with the regulations on security, labelling and composition in the country of importation, nor is the seller bound to know this country's relevant standards. Moreover, it is the obligation of the buyer to make himself or herself familiar with the requirements of public law in the country of utilisation. In any event, he or she may incorporate these requirements into the contract as provided by Article 35(1) and (2)(b) CISG.[81]

It is not surprising that several decisions of the Austrian Supreme Court concerning non-conforming delivery of goods by a seller focus on the examination of goods and the notification of lack of conformity, and on the relevant time limits for these activities of the buyer. So far, there have been six decisions [82] in which the Austrian Supreme Court had to apply Articles 38 et seq. CISG.

The first decision, rendered on 12 February, 1998 [83] set out the basic lines of how to apply Articles 38 et seq. CISG. However, in the absence of any finding of fact on the timeliness of the notice of lack of conformity, the Court could not decide on the merits, but had to remit the case to the Court of First Instance.

On 30 June, 1998,[84] the Austrian Supreme Court had to deal with Article 39 et seq. CISG for the second time. This decision involved an international contract for the sale of tropical fruit, which by agreement of the parties was subject to the COFREUROP-rules.[85] These rules impose on the buyer an obligation to monitor the goods in an appropriate way and to immediately notify any defect. Notwithstanding the incorporation of the COFREUROP-rules into the contract, the Austrian Supreme Court applied Article 27 CISG to the case and exempted the party dispatching the notice of lack of conformity from the risk of delay or loss. Apart from a reference to a comment [page 16] by Kramer,[86] the Court failed to provide any reason for this decision. However, similar to the case mentioned above, the Court of First Instance did not make any findings of fact on whether the notice of defects had happened in due time. As a consequence, the case had to be remitted.

The third decision on the examination and notification of defects of 15 October, 1998 [87] is clearly more important. The Austrian Supreme Court had to decide whether there is any difference at all in the assessment of the periods of time provided by Article 38(1) for the examination of conformity, and by Article 39(1) CISG for the notification of non-conformity, and how these two periods interact. By referring to scholarly writings and a decision which the German Federal Supreme Court (BGH) had rendered on this issue on 8 March, 1995,[88] the Austrian Supreme Court held that "as short a period [of time] as it is practicable in the circumstances" has to be distinguished from "a reasonable [period of] time". In conformity with the position of Magnus [89] and Piltz [90] the Court held that, as long as the individual circumstances of the case would not indicate a shorter or longer period, the overall period of time for the examination of the goods and the notification of defects should amount to 14 days approximately.[91]

Since this opinion was confirmed by the Austrian Supreme Court on the occasion of its fourth decision on Article 38 et seq. CISG, it can be regarded as the Court's permanent practice. When rendering this decision on August 27, 1999,[92] the Court set out several criteria for the determination of the "short" period of time provided by Article 38 (1) CISG. Among these criteria are the size of the buyer's business, the kind of goods to be examined,[93] their quantity, complexity, seasonal or perishable character, the expenditures required for a proper examination etc. When applying these criteria, a court has to take into account both the objective and the subjective peculiarities of the [page 17] individual case. These are, for instance, the buyer's specific operational and personal conditions, the characteristics of the goods, the quantity delivered, and the kind of the remedy chosen by the buyer. Likewise, the time period of Article 39 CISG has to be assessed according to the relevant objective and subjective circumstances.

Furthermore, the Court held that in comparison to 377 Austrian Commercial Code, requiring "immediate" examination and notification of eventually detected defects, the regime of Articles 38 and 39 CISG was more lenient. Nevertheless, the Court emphasised that both periods of CISG would not be "long periods". Provided, that individual circumstances would not justify a longer or a shorter period of time, the overall period may be fixed at about 14 days, and the Court gave an explanation for its opinion. Accordingly, the primary purpose of Articles 38 and 39 CISG would be to rapidly[94] clarify whether a delivery was in conformity with the contractual obligations. Thus, the danger of dubious claims and disputes arising from defects subsequent to the delivery should be reduced. This is necessary because, with regard to subsequent defects it is often controversial whether they were caused by the seller or, due to improper handling, by the buyer. Finally, the Court held that the buyer was charged with the burden of proof whether a notification of non-conformity was given properly and in due time.

This last sentence was supplemented by the Austrian Supreme Court in its fifth decision on Articles 38 et seq. CISG,[95] which otherwise was completely in accordance with the Court's previous decisions on the subject. The Court held that the question whether a seller had renounced the buyer's compliance with the requirements of Articles 38 and 39 CISG, or whether insistence on such compliance would violate "good faith", may only be answered in accordance with the circumstances of the individual case. The same was considered true where, in the case of a delayed or insubstantial notice, a seller who, regardless of the defect in the notification, first had tried to cure the lack of conformity, but denied the buyer a right to cure thereafter. Finally, the Austrian Supreme Court could not identify a relevant question of law in this recent case.

A dictum of the Austrian Supreme Court in its decision of 19 May, 1999 should be mentioned in this context. It concerns the preclusive period of two years according to Article 39(2) CISG. The court held that the period of two years may be exhausted in its entirety only in one of three cases. Firstly, if the buyer is unable to examine the goods at [page 18] an earlier time. Secondly, if he or she, despite of an examination, could not detect the non-conformity any earlier. Thirdly, if he or she, despite the detection of a non-conformity, could not give notice at an earlier time. When giving its reasons for this decision, the Austrian Supreme Court did nothing more than literally repeat a sentence in the explanatory report accompanying the draft bill for the ratification of the Convention by the Parliament.[96] Thus, it appears that the rule of Article 7(1) CISG requesting the "international interpretation" of the Convention may have been neglected by the Court.

5.3 Obligations of the buyer and remedies of the seller (Articles 53 - 60 CISG)

Of the provisions in this part of CISG, only Article 57 and Articles 63-64 CISG have caused controversies about their interpretation giving rise to decisions of the Austrian Supreme Court. Article 57 determines the place of payment of an international sales contract in the absence of an agreement by the parties, and Articles 63-64 CISG establish the consequences of a violation of the buyer's duty to pay the purchase price.

In its leading decision of November 10, 1994,[97] the Austrian Supreme Court, in an obiter dictum, dealt with the Convention's various provisions on the place of performance. Thereby, it particularly mentioned Article 57(1)(b), according to which payment in exchange of handing over of the goods or of documents is to be made at the place where the handing over takes place. However, from the facts of the case it followed that the chinchilla furs were delivered by postal service and no third person was authorised to collect the payment, so that Article 57(1)(b) CISG was inapplicable. Consequently, according to Article 57(1)(a) CISG the seller's place of business was determined as the relevant place of payment.

On 11 September, 1997 [98] and on 28 April, 2000,[99] the Austrian Supreme Court rendered decisions on the fixing of an additional period of time for performance. In the earlier decision, it held in ambiguous language that CISG, which is applicable on the merits of the case, "also" required that an additional period of time for performance was fixed and [page 19] the contract declared void according to Articles 63(1) and 64(1)(b) CISG. In the later decision the Court stated that, according to Article 63 CISG, the seller was entitled to fix an additional period of time of reasonable length for performance, and, if the buyer either failed to pay the purchase price within this additional period or refused to pay at all, the seller might unilaterally declare the contract void. The Court emphasised that there are no formal requirements for this declaration of avoidance and that it must not fix a time limit. What has to be clearly expressed, however, is that neither party shall remain bound by the contract.

In the relevant case, the meaning of a statement made by the seller's lawyer, after having brought an action against the buyer, was at issue. In this statement, the lawyer declared that no performance would be accepted if the buyer failed to perform within the additional period of time. Notwithstanding the ambiguity of the statement that made it appear as if the avoidance of the contract was just meant as an alternative, the court regarded it as sufficiently definite to constitute a declaration of avoidance after an action had been brought by the seller.

5.4 Anticipatory breach and instalment contracts (Articles 71 - 73 CISG)

Whereas the Austrian Supreme Court has not yet had an opportunity to decide matters relating to the Convention's Articles 66 et seq. on the passing of risk, the provisions on anticipatory breach and instalment contracts have already been subject of a decision of the Court. In the "Czech sunshades case"[100] the contract between a Czech seller and an Austrian buyer provided delivery of a great quantity of sunshades by instalments. However, because of the buyer's failure to pay for the instalments delivered, the seller stopped further deliveries and declared the contract void.

Quite correctly, the Austrian Supreme Court held that in the circumstances of case, the seller's declaration of avoidance was made too early and that Article 71 CISG applied to the merits of the case. According to this provision, a party to an international sales contract may suspend his performance without declaring the contract void.[101]

Furthermore, the Court had to deal with the question of the relationship between Article 71 CISG and the more comprehensive remedies of domestic law which aim at being [page 20] respected in the same situation, viz., when after the conclusion of a contract, facts become apparent that give rise for reasonable doubt that the debtor will perform his obligations. On this issue, the Court held that Article 71 CISG ruled out the application of any identical or comparable remedies of the particular domestic law that is found applicable under the rules of private international law of the forum. This was particularly true in relation to the question of whether a recourse to the more extensive rights of retention of the domestic law of a Contracting State should be granted.

Moreover, the Austrian Supreme Court held that suspension of performance under Article 71 CISG not only required the presence of "serious" circumstances that may prohibit performance, but also of economic difficulties including lack of creditworthiness of the other party. This would be the case if bankruptcy proceedings had commenced, or if the debtor stopped his or her payments or deliveries. However, according to the Court, a delay with a single instalment or a sluggish payment is not sufficient to indicate a serious lack of creditworthiness.[102]

5.5 Damages (Articles 74 -77 CISG)

Articles 74 et seq. CISG entitle a loyal party to claim damages from the party in breach of the contract. This claim exists in addition to other remedies granted by the Convention. Contrary to Austrian domestic law, this liability of the party in breach of a contract under CISG is a form of strict liability. It was obvious that this difference would create problems, and that issues relating to the Convention's provisions on damages would induce court proceedings.

The decision of 6 February, 1996 [103] is the leading case in the practice of the Austrian Supreme Court concerning Articles 74 et seq. CISG. In this context the Court held that the assessment of damages is determined by the "foreseeability test" as provided by Article 74 CISG. Therefore, it is of significant importance for the assessment of damages what the loyal party may have expected at the time of the conclusion of the contract as result of the correct performance by the other party. Thus, damages for all [page 21] foreseeable loss, including loss of profits as well as consequential damages and damages for delayed performance, are recoverable pursuant to Article 74 CISG.

In the actual case, the Austrian Supreme Court held that lost profits which a buyer could have gained from resale, had the seller properly performed his or her contractual obligations, must be compensated if such profit from resale was foreseeable for the party in breach, and that, whenever commercial goods are sold to a merchant, no further proof of the foreseeability of a resale-transaction is required.[104]

In its decision of 9 March, 2000,[105] the Austrian Supreme Court affirmed its decision of 6 February, 1996. By doing so, the court held with regard to damages under Article 74 CISG, that the Convention is based on the principle of full compensation, but only for cases in which, as a result of a breach of contractual obligations, a contract is declared void and where the methods of assessing damages are explicitly stated. In fact, guidance for finding the correct amount of compensation, either by a substitute transaction or by payment of the market price of a conforming good, is provided by Articles 75 and 76 CISG.

The Austrian Court's latest judgment on Article 74 CISG was rendered on 28 April, 2000.[106] In this decision, the Court resorted to a higher precision in the interpretation of that key provision of the Convention. In the view of the Court, the principle of awarding damages for breach of contract that amount to full compensation of the loss, including loss of profit, ought to be understood as a continuation of legal conceptions that had been developed by national courts interpreting their domestic law prior to CISG. Thus, the courts came to acknowledge the general rule that merchants, whose business is the trading of goods like those of the avoided contract in question,[107] would always able to conclude a contract on the basis of the market price. The only advantage that a merchant would draw from being released from the duty to perform the avoided contract is that he or she would not have to purchase additional goods when performing the substitute transaction. The merchant would save the acquisition costs and the difference between the defaulted purchase price of the avoided contract and his or her savings of acquisition costs; in other words, the profit margin would constitute the amount of damages suffered by the seller of fungible goods. The loss of this profit would qualify as "actual [page 22] damages", because it had already been a part of the seller's assets at the time of conclusion of the contract. In the end, the Austrian Supreme Court stated in explicit wording that the seller's usual trade margin would usually be his or her foreseeable loss of profit within in the meaning of Article 74 CISG.

Furthermore, the Supreme Court mentioned in this decision that, in the same way as provided by the relevant rules of Austrian domestic law, damages may be assessed under CISG either on the basis of a "concrete method of computation", viz. by substitute transaction according to Article 75 CISG, or on an "abstract basis of calculation", viz. by reference to the current market price according to Article 76 CISG. However, neither Article 75 nor Article 76 CISG precludes the creditor's right to assess damages in accordance with the general rule of Article 74 CISG.

A final reference to the Austrian Supreme Court's decision of 6 February, 1996 [108] shall conclude this survey of Austrian case law on CISG. When dealing with the Convention's provision on mitigation of damages (Article 77 CISG), the court held that the loss, including lost profits, suffered from a breach of contract may only be claimed to the extent to which the loss should not have been mitigated by measures that would have been reasonable in the circumstances. Examples of such reasonable measures to mitigate the loss would be those which under the circumstances of the individual case could have been expected in good faith. In the Court's view, the answer to the question of which measures would be reasonable and ought to be taken depends on how a reasonable creditor would have acted in the same situation.[109]

6. CLOSING REMARKS

It would be a difficult and futile undertaking to search for a convincing explanation why CISG has become as widely accepted by the Austrian Supreme Court as the great number of cases suggest. Neither do Austrian parties to contracts for the international sale of goods demonstrate a stronger tendency to initiate court proceedings against their partners and to file appeals, nor are provisions in standard terms for international sales contracts that would expressly exclude the application of CISG less commonly used in Austria than in other Contracting States. Further, it cannot be seriously claimed, that, due to its Viennese origin, a sentimental affection to CISG would dominate among Austrian legal consultants, attorneys and judges. [page 23]

In the end, any attempt of finding an explanation for the surprising increase in the number of decisions that the Austrian Supreme Court rendered on the basis of the Convention for the International Sale of Goods between 1994 and 2001 inevitably leads to mere speculation. [page 24]


FOOTNOTES

* Dr. juris, Professor of Law, Institute for Austrian Civil Law, Foreign and International Private Law, University of Graz, Austria.

** Mag. Juris, Research Assistant, Institute for Austrian Civil Law, Foreign and International :rivate Law, University of Graz, Austria.

1. The German translation of the title of the convention is "Übereinkommen der Vereinten Nationen über Verträge über den Internationalen Warenkauf". Contrary to the English version, the German text and title of CISG are not authentic, but the result of a concerted translation effort by Austria, Switzerland, The German Federal Republic and the Former German Democratic Republic. There is no generally accepted German abbreviation of the title of the convention. In its decisions, the Austrian Supreme Court uses abbreviations such as "UNK", "UN-K" or "UN-KR" in an arbitrarily inconsistent way. In the writings of German and Austrian academic scholars, however, instead of German abbreviations, the English "CISG" is usually preferred. See Magnus, U., in Staudinger, J. (Ed.), Wiener UN-Kaufrecht (CISG) 1994 De Gruyter, Berlin. For a more recent examples, see Piltz, B., "Entscheidungen des BGH zum CISG" (1999) Transportrecht und Internationales Handelsrecht (TranspR - IHR) p. 13; Schlechtriem, P. (Ed.), Kommentar zum Einheitlichen UN-Kaufrecht - CISG, 3rd edition 2000 Beck, Munich.

2. Austrian Federal Legal Gazette (BGBl) 1988 N 96. The UN Treaty Section reports that Austria and Mexico ratified or acceded to the CISG on 29 December 1987.

3. By February 1, 2001, there are 61 Contracting States.

4. Cf. Posch, W., "Das Wiener Kaufrecht in der österreichischen Praxis" (1997) Mélanges Neumayer - Emptio - venditio inter nationes, at p. 89 et seq. In 1997, there was still reason for the assumption that the overwhelming majority of Austrian lawyers and judges was not familiar with CISG. By now, however, this assumption appears to be falsified. As CISG has been an integral part of the relevant collections of Austrian private law statutes for years, it is today commonly known by Austrian attorneys and judges.

5. For academic writings on CISG Cf. Doralt, P. (Ed.), Das UNCITRAL-Kaufrecht im Vergleich zum österreichischen Recht, 1985 Manz, Vienna; Loewe, R., Internationales Kaufrecht, 1989 Manz, Vienna; Karollus, M., UN-Kaufrecht, 1992 Springer, Vienna; Hoyer, H. and Posch, W. (Eds.), Das Einheitliche Wiener Kaufrecht, 1992 Orac, Vienna; Wilhelm, G., UN-Kaufrecht, 1993 Manz, Vienna; Posch, W., in Schwimann, M., ABGB-Praxiskommentar 2nd Ed. Vol. 5, 1997 Orac, Vienna.

6. Cf. Posch, W., supra (footnote 4), at p. 92 et seq.

7. Cf. Austrian Supreme Court (OGH), December 12, 1998, published in 1998 Recht der Wirtschaft (RdW), at p. 335.

8. Quite often, however, the Court only referred obiter to the Convention.

9. Piltz, B., supra (fn 1), at p. 13. This statement is confirmed by the latest edition of the case law digest on CISG compiled by Michael R. Will, Twenty Years of International Sales Law Under CISG, 2000 Kluwer, The Hague, at p. 253 et seq.

10. Cf. Schlechtriem, P. and Magnus, U. (Eds.), Internationale Rechtsprechung zu EKG und EAG, 1987 Nomos, Baden-Baden; Schlechtriem, P., "Einheitliches Kaufrecht. Erfahrungen mit den Haager Kaufgesetzen - Folgerungen für das Wiener Kaufrecht" 1989 RdW p. 41. The Hague Uniform Law of Sales was never ratified by Austria.

11. District Commercial Court of Vienna, 20 February, 1992, published in 1992 RdW, at p. 239. This is the first example of how the private law clause of Art 1(1)(b) CISG is correctly applied. Cf. Posch, W., supra (fn 4), at p. 99 et seq, whereas the Supreme Court's reference to Art 9(2) CISG in its decision of 7 June, 1990 (see 1990 RdW, at p. 406) on issues of private international law that was occasioned by an - insubstantial - argument advanced by one of the parties, is rather surprising.

12. Austrian Supreme Court, 2 July, 1993, published in 1994 RdW, at p. 75; Austrian Supreme Court, 24 November, 1993, published in 1994 RdW, at p. 208; Austrian Supreme Court, 28 April, 1994, 6 Ob 1549/94, unpublished. For a commentary on these decisions, see Posch, W., supra (fn 4), at p. 97 et seq.

13. This provision was repealed when the Austrian Private International Law Act (IPRG) became partly replaced by the Rome Convention on the Law Applicable to Contractual Obligations on 1 December, 1998, Austrian Federal Legal Gazette I 1998 No 119. As a result of the accession to the European Union on January 1, 1995, the amendment was necessary to implement the Rome Convention. Whereas 36 of the Austrian Private International Law Act was still applicable to the actual case, Article 4 of the Rome Convention would be the relevant provision today.

14. Austrian Supreme Court, 26 May, 1994, published in 1994 ecolex, at p. 619.

15. Austrian Supreme Court, 10 November, 1994, published in 67 Sammlung zivilrechtlicher Entscheidungen (SZ) N197. A translation of this decision appears at (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 147.

16. Primarily the relationship between Art. 14 and Art. 55 CISG was at stake.

17. Cf. 1995 ecolex, at p. 94.

18. Austrian Supreme Court, May 26, 1994, published in 1994 ecolex p. 619 (supra fn 12); cf. District Commercial Court of Vienna, February 20, 1992, published in 1992 RdW p. 239 (Cf. supra fn 11).

19. Decision of 27 May, 1997, published in 1997 RdW, at p. 594. The Austrian Supreme Court proceeds along the same lines in its decision of April 2, 1998 concerning the sale of apple juice concentrate from a Polish seller to an Austrian buyer. The headnotes of this decision are published in 1998 Zeitschrift für Rechtsvergleichung (ZfRV) N 53.

20. Austrian Supreme Court, 6 February, 1996, published in 69 SZ N 26 1996 RdW, at p. 203. A translation of this decision appears at (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 153.

21. Austrian Supreme Court, 24 October, 1995, headnotes published in 1996 ZfRV N 20. In this decision, the question was whether a limitation period for claims arising from contractual obligations and matters of recourse fell within the sphere of application of CISG. The Austrian Supreme Court held that CISG does not contain any provision on this, so that issues concerning a limitation period are excluded from the Convention's sphere of application. Consequently, it applied Austrian domestic law as the law at the seller's place of business.

22. Austrian Supreme Court, 19 December, 1995, published in 1996 ZfRV, at p. 161.

23. Austrian Supreme Court, 20 March, 1997, published in 1997 Juristische Blätter (JBl), at p. 592; 1997 Evidenzblatt der Rechtsmittelentscheidungen (EvBl) N 169 1997 RdW, at p. 334; 1997 ZfRV, at p. 204; 1997 ecolex, at p. 656; Austrian Supreme Court, 11 September, 1997, published in 1998 ecolex, at p. 331; Austrian Supreme Court, 11 March, 1999, headnotes published in 1999 ZfRV N 50; Austrian Supreme Court, 21 March, 2000, published in 2000 ecolex, at p. 306; Austrian Supreme Court, 13 April, 2000, published in 2000 RdW N 506; 2000 Richterzeitung (RZ) N 24; Austrian Supreme Court, 28 April, 2000, published in 2000 EvBl N 167; 2000 RdW N 643. A translation of the latter decision is appears at (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 184.

24. Austrian Supreme Court, 12 February, 1998, 71 SZ N 21; 1999 JBl 54; 1998 RdW, at p. 335; 1999 ZfRV, at p. 65.

25. Award N 4366, published in 1995 Recht der internationalen Wirtschaft (RIW), at p. 590. See the award of 12 October, 1997 rendered by the Exchange of Agricultural Products, published in 1998 ZfRV, at p. 211.

26. In his comment of this decision Schlechtriem remarks that this solution not only had become the prevailing one under the Hague conventions, but also - "undisputedly" - under CISG: see 1995 RIW, at p. 593.

27. Austrian Supreme Court, 12 February, 1998 (supra fn 24). See also Austrian Supreme Court, 28 April 2000 (supra fn 23) and Austrian Supreme Court, 22 October, 2001, 1 Ob 77/01g, unpublished.

28. Austrian Supreme Court, 15 October, 1998, published in 1999 JBl, at p. 318; 1999 RdW, at p. 135. A translation of this decision appears at (2002) 6 Vindobona Journal of International Journal and Arbitration 169.

29. Cf. Austrian Supreme Court, 28 March, 1990, published in 3 IPRE N 9; Austrian Supreme Court, 24 November, 1993, published in 1994 RdW, at p. 208.

30. See Austrian Supreme Court, 10 November, 1994 (supra fn 15).

31. Austrian Supreme Court, 24 October, 1995, headnotes published in 1996 ZfRV N 20.

32. Austrian Supreme Court, 27 October, 1994, published in 1995 ZfRV 159.

33. Austrian Supreme Court, 11 February, 1997, 10 Ob 1506/94, unpublished.

34. Since 1 December 1998 the relevant rules are provided by the European Convention on the Law Applicable to Contractual Obligations.

35. Austrian Supreme Court, 24 October, 1995 (supra fn 31); Austrian Supreme Court, 25 June, 1998, published in 71 SZ N 115; also published in 1998 RdW 668; most recently, cf.: Austrian Supreme Court, 7 September, 2000, published in 2000 RdW N 19.

36. Austrian Supreme Court, 24 October, 1995 (supra fn 31).

37. Austrian Supreme Court, 20 March, 1997 (supra fn 23) and most recently, Austrian Supreme Court, 22 October, 2001, 1 Ob 49/01i unpublished.

38. Austrian Supreme Court, 20 March, 1997 (supra fn 37).

39. Austrian Supreme Court, 24 April, 1997, published in 1997 RdW 531.

40. Austrian Supreme Court, 10 March, 1998, published in 1998 RdW 552. However, contrary to this decision the Austrian Supreme Court held on 29 June, 1999 that issues concerning the rewinding of contracts were to be resolved by filling gaps within the Convention. This contradictory decision was published in 2000 RdW N 9; 2000 ZfRV 33.

41. Austrian Supreme Court, 25 June, 1998 (supra fn 35); employing the same arguments is the Supreme Court's decision of 7 September, 2000 (supra fn 35).

42. Austrian Supreme Court, 12 November, 1998, published in 1999 RdW 211.

43. Austrian Supreme Court, 28 July, 1999, headnotes published in 2000 ZfRV N 4.

44. Austrian Supreme Court, 7 September, 2000 (supra fn 35).

45. The Supreme Court substantiated this view by emphasising, that the right to avoid a contract would be the last resort of a party performing his or her contractual obligations, if the other party failed to perform within an additional period of reasonable length, or if the supplied goods continued to be useless for the buyer.

46. Austrian Supreme Court, 6 February, 1996 (supra fn 20). A translation of this decision appears at (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 153.

47. The Austrian Supreme Court had already dealt with this topic in an obiter dictum in its judgment of 6 February, 1996 (supra fn 20).

48. "Österreichische Holzhandelsusancen".

49. Austrian Supreme Court, 15 October, 1998 (supra fn 28). Cf. the obiter dicta in the Supreme Court's decision of 27 August, 1999, concerning the Bavarian "Tegernsee (timber trade) Usages" ("Tegernseer Gebräuche"), published in 2000 RdW N 10. A translation of this decision appears at (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 169.

50. Austrian Supreme Court, 21 March, 2000 (supra fn 23).

51. Austrian Supreme Court, 6 February, 1996 (supra fn 20); Austrian Supreme Court, 9 March, 2000, published in 2000 RdW N 379.

52. Austrian Supreme Court, 26 April, 1996, published in 69 SZ N 107; 1996 JBl 659; 1997 RdW 76. The Court found that the requirement of a document to be "in writing" is different from the requirement to be "signed".

53. Austrian Supreme Court, 10 November, 1994, (supra fn 15); for a comment in German, see Posch, W., supra (fn 4), at p. 101 et seq.

54. Under the terms of this contract, the breeder delivered an amount of 249 furs of predominantly average quality. Immediately after having received the furs, the buyer himself sold and delivered the furs in their original packages to an Italian merchant. However, upon arrival the Italian buyer rejected 13 of the 249 furs on grounds of non-conformity with the quality contracted for. In turn, the Austrian trader complained about these 13 furs to the German breeder. At the same time, he transferred 2400 German Marks to the German breeder, no more than 10 Marks for one fur. The German breeder then sued the Austrian trader for the payment of another 9500 German Marks. The basis of the breeder's calculation of total payments due was a price of 50 German Marks for one fur: a difference to the Austrian buyer's calculation of 40 German Marks for one fur.

55. According to the Court, it could be disregarded, whether a determination of the contract price might be possible by fictitiously assuming that the parties have accepted the price that is generally charged for the relevant goods at the time of the conclusion of the contract.

56. Austrian Supreme Court, 20 March, 1997 (supra fn 23).

57. With reference to Schlechtriem, Kommentar (supra fn 2), Comment N 4 to Art 14 CISG.

58. Cf. Article 8(2) CISG.

59. Austrian Supreme Court, 9 March, 2000 (supra fn 51).

60. Austrian Supreme Court, 18 June, 1997, 1998 published in JBl 255; 1998 RdW 12.

61. Austrian Supreme Court, 20 March, 1997(supra fn 23).

62. With reference to the writings of Karollus (supra fn 5), and Bydlinski F. in Doralt, P. (Ed.) (supra fn 5) and further references in support of this "prevailing Austrian view" to the German commentaries on CISG by Schlechtriem and Herber.

63. Aicher, J. in Hoyer, H. and Posch, W. (Eds.), Das Einheitliche Wiener Kaufrecht. Neues Recht für den Internationalen Warenkauf, 1992 Orac, Vienna, at p. 59.

64. Austrian Supreme Court, 30 June, 1998, published in 1999 JBl 252; 1998 RdW 736; 1999, at p. 37.

65. Austrian Supreme Court, 15 October, 1998 (supra fn 28).

66. In the aforementioned judgment of 6 February, 1996 (supra fn 20).

67. Austrian Supreme Court, 29 June, 1999 (supra fn 40).

68. Supra fn 20.

69. Austrian Supreme Court, 10 September, 1998, 2 Ob 208/98x, published in 1999 RdW 210; and Austrian Supreme Court, 10 September, 1998, 2 Ob 221/98h, published in 1999 JBl 333; 1999 RdW 210.

70. Austrian Federal Legal Gazette 1996 No 448.

71. Article 5 N 1 of the Lugano Convention states, that a party to an international contract domiciled in a Contracting State may launch proceedings for breach of contract by the other party in the court of the place where performance is due, provided that this is a court of a Contracting State.

72. "frei Baustelle Wien".

73. "frei Haus Klagenfurt".

74. One involved the sale of rotors for heat exchangers, the other the sale of satellite receivers.

75. Austrian Supreme Court, 10 September, 1998, 2 Ob 208/98x (supra fn 69)

76. Austrian Supreme Court, 10 September, 1998, 2 Ob 221/98h (supra fn 69)

77. Austrian Supreme Court, 29 June, 1999 (supra fn 40).

78. Along the same lines proceed the arguments in the Supreme Court's decision of 21 March, 2000 (supra fn 23).

79. Austrian Supreme Court, 13 April, 2000 (supra fn 23).

80. Austrian Federal Legal Gazette 1994 N 306.

81. This decision is interesting from a European Community Law point-of-view. It obviously complies with the rules on the free movement of goods.

82. Austrian Supreme Court, 12 February, 1998 (supra fn 24); Austrian Supreme Court, 30 June, 1998, (supra fn 64); Austrian Supreme Court, 15 October, 1998 (supra fn 30); Austrian Supreme Court, 19 May, 1999, headnotes published in 2000 ZfRV No 1; Austrian Supreme Court, 27 August, 1999 (supra fn 49); Austrian Supreme Court, 21 March, 2000 (supra fn 23).

83. Austrian Supreme Court, 12 February, 1998 (supra fn 24).

84. Austrian Supreme Court, 30 June, 1998 (supra fn 66).

85. COFREUROP is the acronym for "Common European Usages for the Domestic and International Sale of Eatable Fruits and Vegetables".

86. In Straube, M. (Ed.), HGB-Kommentar 2nd ed, 1995 Manz, Vienna, Comment N 43 to 377, 378 HGB.

87. Austrian Supreme Court, 15 October, 1998 (supra fn 28).

88. German Federal Supreme Court, March 8, 1995, published in 1995 RIW 595.

89. Magnus, U. in Staudinger, J. (Ed.), CISG, supra note *.

90. Piltz, B., UN-Kaufrecht, Comments N 142 and 145.

91. In contrast thereto, Wilhelm, 1999 ecolex at p. 262, regards the "splitting of the periods of time" in Articles 38 and 39 CISG as a purely scholastic exercise to distinguish a "short" time period from a "reasonable" one. However, this view ignores the requirement of Article 7(1) CISG of interpreting the convention autonomously, and it entirely disregards, that in the authentic versions of CISG this distinction is all but meaningless.

92. Austrian Supreme Court, 27 August, 1999 (supra fn 49).

93. In the actual case, the sold goods were sneakers which were inspected rather negligently by the Swedish buyer.

94. The German word "schnell" appears in bold characters in the original version of the decision.

95. Austrian Supreme Court, 21 March, 2000 (supra fn 23).

96. Explanatory remarks, Protocol N 94 of the Austrian National Assembly, 17th Session of Parliament, at p. 59.

97. Supra fn 15: The case is known as the "chincilla furs case".

98. Supra fn 23.

99. Supra fn 23. A translation of this decision appears at (2002) 6 Vindobona Journal of International Commercial Law and Arbitration184.

100. Austrian Supreme Court, 12 February, 1998 (supra fn 24).

101. The right of suspension of performance (Article 71) exists independently from the right to avoid a contract (Article 73).

102. As payments for only two instalments were delayed, a serious lack of creditworthiness of the Austrian buyer could not be assumed in the relevant case. The cancellation of an order for remittance does not indicate such a lack of creditworthiness. Consequently, as the requirements of Article 71 CISG were not met, the right to suspend performance could not be granted to the Czech seller. The Austrian Supreme Courts was criticised by Karollus in 2000 JBl, at p. 56, for interpreting the relevant criteria of Article 71 CISG too strictly: Bankruptcy proceedings need not be commenced; it should be sufficient that a reason for opening such proceedings exists.

103. The decision was rendered with regard to a contract for the sale of natural gas, supra fn 20.

104. In the case in question, even the defendant admitted that it was obvious to him that the goods would be resold.

105. Austrian Supreme Court, 9 March, 2000 (supra fn 51).

106. Austrian Supreme Court, 28 April , 2000 (supra fn 23).

107. A German manufacturer of jewellery sold jewels to an Austrian jeweller.

108. Austrian Supreme Court, 6 February, 2000 (supra fn 20).

109. Because of the absence of any substantial argument on this point during the proceedings, this question was not answered by the Austrian Supreme Court in greater detail.


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