Austria 15 June 2000 Appellate Court Graz (Ski shoes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/000615a3.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 4 R 80/00t
CASE HISTORY: 1st instance LG Klagenfurt (20 Cg 10/98v-20) 15 February 2000
SELLER'S COUNTRY: Italy (plaintiff)
BUYER'S COUNTRY: Austria (defendant)
GOODS INVOLVED: Ski-shoes
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
4B [Scope of Convention (issues excluded): assignments]; 14A [Criteria for an offer (basic criterion): intention to be bound in case of acceptance]; 18A [Criteria for acceptance of offer]
4B [Scope of Convention (issues excluded): assignments];
14A [Criteria for an offer (basic criterion): intention to be bound in case of acceptance];
18A [Criteria for acceptance of offer]
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CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (German): Go to CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/799.pdf> for link to presentation of case text
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
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Queen Mary Case Translation Programme
15 June 2000 [4 R 80/00t]
Translation [*] by Veit Konrad [**]
Edited by Jan Henning Berg [***]
Defendant [Buyer]'s appeal (Berufung) is admissible and justified. The Court of First Instance (see: Landesgericht Klagenfurt; Docket no. 20 Cg 10/98v-20, of 15 February 2000) is upheld only as far as it dismissed the claim for interest exceeding 5%. As regards the claim granted for ITL [Italian Lire] 142,288,000.00 plus 5% interest p.a. since 2 December 1997, the decision is set aside and remanded to the Court of First Instance for retrial.
In February 1997, Plaintiff [Seller], the Italian Appellee, through its export director, entered into business relations with M., who at the time had been the director of [Buyer], a company seated in Austria, and director of the firm "Mega Center d.o.o.", domiciled in Ljubljana, Slovenia. During negotiations -- that were conducted in English -- B., an employee of "Mega Center d.o.o." functioned as an interpreter. [Buyer] was interested in [Seller]'s ski boots which [Buyer] intended to resell in Bosnia-Herzegovina. It was agreed that [Seller] would send price lists to [Buyer]. In faxes dated 11 and 12 February 1997, [Buyer] again asked for the promised price lists. On 17 February 1997, [Seller] faxed the requested lists to M.'s subsidiary at the Slovenian "Mega Center d.o.o." On 18 February 1997, the list was sent to M.'s subsidiary at [Buyer]'s Austrian location.
On 5 March 1997, [Buyer] asked for catalogues with further information on certain types of ski boots. In a fax of 10 March 1997, [Buyer] requested prototypes. [Seller] responded that the requested types of ski boots could only be supplied in sizes other than those requested.
On 20 June 1997, B. [the employee of "Mega Center d.o.e."] signed an order for the delivery of 1,253 pair of ski boots. The place of delivery was not mentioned in the order. As attachments, the order contained documents that bore the name of "Mega Center d.o.o." On 11 November 1997, [Seller] handed the goods over to [Buyer]'s carrier. The bill of ITL 142,288,000.00, being the purchase price for the ski boots, has not yet been paid by [Buyer].
On 25 January 1999, Plaintiff [Seller] brought a claim for payment of ITL 142,288,000.00 plus 10% interest p.a. since 2 December 1997 before the Court of First Instance. Plaintiff [Seller] argued that [Buyer] -- not the Slovenian "Mega Center d.o.o." -- entered into a sales contract for the delivery of ski boots. M., as authorized representative of [Buyer], had introduced B., an employee of "Mega Center d.o.o.", into the negotiations. [Seller] alleged that, having done so, [Buyer] implicitly delegated its mandate to B., so that [Seller] could rely on the assumption that B. had been authorized to contract per procurationem of [Buyer]. Hence, through B. [Buyer] entered into a binding contract with [Seller].
In its response, [Buyer] submitted that it was "Mega Center d.o.o." in whose name B. had ordered the goods. Consequently, "Mega Center d.o.o." in Ljubljana -- and not [Buyer] -- had been the addressee of the bill for the delivered ski boots dated 29 October 1997. [Buyer] alleged that only thereafter had "Mega Center d.o.o." resold the ski shoes to [Buyer]. The purchase price which was due for that transaction had been set off against other obligations as documented in a bill of 5 December 1997. [Buyer] itself had at no time entered into a binding relation with [Seller] and was thus not obliged to pay the purchase price for the ski boots. Therefore, [Buyer] argued that [Seller]'s claim was not justified and had to be dismissed.
The Court of First Instance held Plaintiff [Seller]'s claim justified up to the amount of ITL 142,288,000.00 plus 5% interest p.a. since 2 December 1997. With respect to further interest, [Seller]'s claim was dismissed. The Court found that due to M.'s appearance and behavior during the negotiations as well as due to the business card with which he introduced himself, [Seller]'s director could reasonably presume that M. was negotiating on behalf of [Buyer] and not on behalf of "Mega Center d.o.o." Indeed, "Mega Center d.o.o." had not been mentioned throughout the negotiations. Consequently, the Court of First Instance held that [Buyer], through its fax dated 20 June 1997, had placed a binding order for 1,253 pair of ski boots which [Buyer] intended to resell in Bosnia-Herzegovina. This order had been known to M. who at no time indicated that it was not made in the name of [Buyer] but of "Mega Center d.o.o." As [Buyer]'s name was displayed at the head of the actual order document, it appeared insignificant that the name of "Mega Center d.o.o." had been mentioned in an attachment to this order, for the first time.
On this basis, the Court of First Instance concluded that [Buyer] was obliged under Art. 53 and Art. 62 CISG to pay ITL 142,288,00.00 being the purchase price for delivered ski boots plus 5% as the regular interest for the time in default. As a higher interest rate had not been stipulated, the claim had to be dismissed to that extent.
POSITIONS OF THE PARTIES
In its appeal (Berufung), [Buyer] claims that the Court of First Instance's decision suffered from procedural irregularities, i.e., an incomplete taking of evidence and a wrong interpretation of evidence, as well as from a misinterpretation of material law. Due to these defects, [Buyer] seeks dismissal of [Seller]'s entire claim. In the alternative, [Buyer] seeks to have the decision set aside and the case remanded to the Court of First Instance for retrial. In response, [Seller] seeks dismissal of [Buyer]'s appeal.
REASONING OF THE COURT
The [Buyer]'s appeal is justified. The ruling of the Court of First Instance must be quashed. The case is remanded to the Court First Instance for retrial.
As procedural irregularities, [Buyer] claims that the Court of First Instance failed to summon B. as a witness whose testimony would have supported [Buyer]'s submission that the name of "Mega Center d.o.o." had been mentioned from the very beginning of the negotiations. This would indicate that it was "Mega Center d.o.o." and not [Buyer] in whose name B. entered into the contract. B. signed the actual order as well as other important documents for the transaction. "Mega Center d.o.o." had also been the addressee of the bill sent on 29 October 1997.
The appellate proceedings mainly concern the question in whose name B. had signed the order document, and thus who must actually be regarded as the buyer of the delivered goods. Several documents indicate that B. had been relevantly involved in the negotiations as well as in the actual conclusion of the contract for the ski boots. As it cannot be excluded that B.'s testimony provides relevant evidence in support of [Buyer]'s submissions (see Delle-Karth, in ÖJZ 1993 page 19), the Court of First Instance in not hearing him as a witness, committed a primary procedural error in the sense of § 496(1) No. 1 of the Austrian Code of Civil Procedure (Zivilprozessordnung; ZPO), which to [Buyer]'s disadvantage, prevented a thorough and conclusive taking of evidence.
Consequently, many of the Court of First Instance's contentions were based on an incomplete account of the facts of the case, and thus cannot be upheld by the Court of Appeal:
Hence, the Court of First Instance was mistaken to assume that "Mega Center d.o.o." had been mentioned right from the beginning of the negotiations. The Court's conclusion that [Buyer] had to be considered as the purchaser of the goods is therefore unjustified since it ignored the fact that "Mega Center d.o.o." had explicitly been mentioned in the order documents which also had been faxed from one of its fax extensions in Ljubljana. In the future course of proceedings, it has to be clarified whether "Mega Center d.o.o." had received a bill for the goods. Moreover, it must be clarified who had accepted delivery. Also, the Court has to check on [Buyer]'s submission that it had made payments for the goods to "Mega Center d.o.o." It further needs clarification to what extent B. was authorized by [Buyer], namely, if it had a mandate to contract in [Buyer]'s name as far as its interferences were tolerated by [Buyer]'s director at the time, M.
As regards the applicable substantive law, the Court of First Instance in forthcoming proceedings has to take account of the fact that [Buyer] (domiciled in Austria) and [Seller] (domiciled in Italy) were seated in Member States of the CISG. Therefore, given that no stipulations in derogation have been made by the parties, the contract is governed by the CISG.
Under the CISG as well as under § 861 of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch; ABGB), a contract consists of an offer and its acceptance. Art. 14(1) CISG provides that a proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price (See Posch in: Schwimann, Commentary on the Austrian Civil Code (ABGB) § 14 CISG note 2 et seq.).
Art. 18(1) CISG considers as binding acceptance any statement made by or other conduct of the offeree indicating assent to an offer.
It remained undisputed within the proceedings before the Court of First Instance that following negotiations with M., at the time both companies' director, which had been conducted with participation of B., [Seller] made an offer for the delivery of [Seller]'s ski boots through faxing of the price lists. As both companies were addressees of this offer, both of them were entitled to bindingly accept it (Art. 23 CISG). Yet, it is disputed between the parties whether B. -- signing the order dated 20 June 1997 -- accepted [Seller]'s offer in the name of [Buyer] or per procurationem of its employer, the "Mega Center d.o.o." In this respect, it must also be taken into account that the order of 20 June 1997 had been signed by B. and not by director M. and, furthermore, that although displaying [Buyer]'s fax extension, it had actually been faxed from the "Mega Center d.o.o." company's domicile in Ljubljana. It needs clarification to what extent B. had been authorized to represent [Buyer] as regards the contract at issue or, respectively, to what extent [Seller] could have reasonably assumed a mandate, because [Buyer]'s director M. did not intervene in order to clarify that B. was not acting on [Buyer]'s behalf (Duldungsvollmacht).
As the CISG does not provide for questions of representation, national law applies (see Karollus, CISG, UN-Kaufrecht, page 41). According to § 49(2) of the Austrian Statute regulating the Conflict of Private Laws (Gesetz über das internationale Privatrecht; IPRG), questions of representation are dealt with by the law of the country where the presumed representative is authorized to exert its mandate. Hence if B. was to be considered as [Buyer]'s authorized representative, Austrian law would apply (see Jbl 1997, page 592).
Due to the procedural shortcomings and the related legal misinterpretations, the case cannot be decided by the Appellate Court, but has to be referred back for retrial which would include a thorough investigation into the relevant circumstances taking into account the testimony of B. For the unforeseeably high costs and efforts, this clarification could not be provided for within the appellate proceedings (see SZ 57 page 134; RZ 1992 page 40).
The decision on the costs relies on § 52 of the Austrian Code of Civil Procedure (Zivilprozeßordnung; ZPO). The case is not admissible for further appeal.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Italian Plaintiff-Appellee is referred to as Plaintiff [Seller], the Austrian Defendant-Appellant is referred to as [Buyer].
** Veit Konrad has studied law at Humboldt University, Berlin since 1999. During 2001-2002 he spent a year at Queen Mary College, University of London, as an Erasmus student.
*** Jan Henning Berg is a law student at the University of Osnabrück, Germany, who participated in the 13th Willem C. Vis Moot with the Osnabrück team. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis and the 4th Willem Vis (East) Moot.Go to Case Table of Contents