Data

Date:
05-09-2012
Country:
Poland
Number:
I ACa 410/12
Court:
Court of Appeals in Katowice
Parties:
--

Keywords

CONTRACT MODIFICATION - ORAL MODIFICATION ADMITTED (ART. 29 CISG)

Abstract

CLOUT case no. 1599. Abstract prepared by Natalia Otlinger and Maciej Zachariasiewicz, National Correspondent]

The German buyer and the Polish seller had a long lasting commercial relationship in the business of blue poppy seeds. Since 2004, the Polish company purchased the poppy seeds from a Czech supplier and sold them to the German buyer specializing in trade of fruit, nuts and seeds. The quantity, price and delivery of poppy seeds were agreed between the parties by telephone call and the orders were confirmed by written contracts sent by fax from the buyer to the seller that would sign and return them to the former. The contracts referred to the Conditions of Business of the Warenverein der Hamburger Börse e.V. usually printed on their reverse side (although the decision does not make clear whether, in the case at hand, the terms were indeed printed on the reverse side of the contracts).

Between July and August 2006, the parties concluded several contracts for the sale of poppy seeds. The goods were delivered directly to the buyer’s clients in Germany. Sometime after the contracts were concluded, however, the prices of poppy seeds in the Czech market increased considerably, which made difficult for the seller to perform its obligations. In October 2006 the parties met to rediscuss the terms of sale. Whether they effectively amended the contracts was later on disputed by the parties in court.

When the buyer failed to pay for the goods delivered in November 2006, the seller suspended any further shipments. The parties’ relationship eventually broke down and the buyer sued for the damages resulting from the alleged breach of contract. The Court of First Instance dismissed the claim and the Court of Appeal affirmed.

The Courts dealt with the issue of whether the parties amended the contracts during their meeting in October 2006. Both Courts relied on Article 29(2) CISG stating that under the Convention a contract may be modified by the mere consent of the parties. The Courts found that at the October meeting the parties had amended the contracts orally, which had been later on confirmed by e-mail. Namely, the parties had agreed that “for the time being” there would only be one delivery of poppy seeds per week (instead of two) and that the price of the goods delivered was to be paid after each delivery.

Both Courts concluded that since the buyer failed to pay for the goods delivered in the first week of November, the seller had the right to discontinue the deliveries. In this regard, the Court of Appeal reasoned that the buyer’s failure of performance resulted into a fundamental breach of contract under Article 25 CISG. The seller was thus justified to avoid the contract pursuant to Article 64(1) CISG. The Court of Appeal did not, however, enter into further details on the reason why the failure of payment was to be considered a fundamental breach, nor explained by which means the seller actually declared avoidance under Article 64(1) CISG. Since it was the buyer that committed the breach and the contract was avoided, the buyer’s claim for damages was rejected.
[The buyer’s reliance on the Conditions of Business of the Warenverein der Hamburger Börse e.V. that according to the buyer were included in the contracts was considered by the Court of First Instance (the Court of Appeals felt the issue was irrelevant for the outcome of the case and did not discuss the findings of the lower court). The Court of First Instance, looking into German doctrine and case law, noted that the issue of incorporation of standard terms is governed by Articles 14 and 18 CISG. It also referred to Article 8 CISG, pursuant to which the question of whether standard terms constitute a part of the offer should be decided. The Court of First Instance underlined that the interpretation of the offer and whether it included standard terms should be done in light of contract negotiations, practices established between the parties, and the applicable international usages. The Court stated that in order to be bound by standard terms, the offeree should have an adequate opportunity to know about them. It is therefore crucial that the offeree is actually aware of the offeror’s intention to include standard terms in the contract. It would be contrary to the principle of good faith in international trade to impose on the offeree an obligation to search for the standard terms that were not forwarded or otherwise made available by the offeror].

Fulltext

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Source

Case Law on UNCITRAL Texts, A/CN.9/SER.C/ABSTRACTS/172}}