How to Reason Like a Civilian?

1. How to Reason Like a Civilian? Hether C. Macfarlane Pacific McGeorge School of Law

2. www.cisg.law.pace.edu

3. Case Organization #1 • Dividing wall panels case - Austrian Supreme Court • Grounds for the decision • [Background information] • Seller’s Position • Buyer’s Position • Intervener’s Position • Commercial Court (Court of First Instance) of Vienna • Court of Appeals of Vienna • Reasoning of the Supreme Court of Austria • Order of the Supreme Court

4. Case Organization #2 • Akefamu v. Sinochem Hainan – Shanghai High People’s Court • Proceedings • Position of the Parties • Findings of the Court of First Instance • The appeal • Holding of the Appellate Court

5. Case Organization #3 • Camara Agraria Provincial de Guipuzcoa v. M. Andre Margaron – appeals court of Grenoble. • Facts and Pleadings • Facts of the case and decision of the Court of First Instance • Buyer’s Position • Seller’s Position • Appellate Court’s Reasoning • Jurisdiction competence of the French court • Place of performance of buyer’s obligation to make payment • Merits of the case • Interest • Cost associated with the appellate proceeding • Appellate Court’s Ruling

6. Seller’s Position • Seller asserted in support of its claim for 16,140.10 DM that the panels it sold for this amount had displayed transport damage after their return. The panels were received by the manufacturer in such a poor condition that they could only be used as burning material. The panels were not correctly shipped by the intervenor. The buyer assumed the transportation risk.

7. Buyer’s Position • Buyer objected that the returned panels had been accepted by the manufacturer without any reservation on the consignment note. By delivering goods not in conformity with the contract, the seller has to bear the risk of the return transportation of the goods. The agreement on the transfer of risk “ex factory” refers only to panels which were ordered (as per the contract), but not to the panels concerned in this case, namely, (panels) which were not delivered in conformity with the order. In any event, the buyer had not caused the damage to these panels.

8. U.S. Court’s Reasoning • Under the Convention, a “contract may be modified or terminated by the mere agreement of the parties.” Id., art. 29(1). However, the Convention clearly states that “[a]dditional or different terms relating, among other things, to . . . the settlement of disputes are considered to alter the terms of the offer materially.” Id., art. 19(3). There is no indication that [the buyer] conducted itself in a manner that evidenced any affirmative assent to the [terms] in the invoices.

9. Austrian Court Reasoning • “Through Art. 29 CISG, which regulates modification or termination of the contract, it is clear that the formation of such contracts is subject to the CISG. The avoidance of a sales contract subject to the CISG is, in principle, not subject to formal requirements. Thus, avoidance could also be done orally, or as here, over the telephone, as well as impliedly (Karollus, op, cit., Art. 29, Annotation 9 with further references; Herber/Czerwenka, Internationales Kaugrecht, Art. 29 UN-K, Annotation 4).”

10. Austrian Court’s Reasoning • 3. Buyer is neither entitled to reduce the price according to Art. 50 CISG, nor may buyer declare the contract avoided with respect to the goods that are still in stock.

11. Art. 50 CISG • If the goods do not conform with the contract and whether or not the price has already been paid, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time.