11/23/21, 10:51 AM Switzerland April 5, 2005 Bundesgericht [Federal Supreme Court] (TETA Case)

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Switzerland April 5, 2005 Bundesgericht [Federal

Supreme Court] (TETA Case)
Case Identification -

Date of Decision:  April 5, 2005

Jurisdiction:  Switzerland

Court:  Bundesgericht [Federal Supreme Court]

Judge(s) / Corboz (Präsident)

Arbitrator(s):  Klett
Rottenberg Liatowitsch (Bundesrichterinnen)
Luczak (Gerichtssschreiber)

Case number /
Docket number:  4C.474/2004

Case name:  TETA Case

Case history:  Related Proceedings: Zivilgericht des Seebezirks, 6 June 2003; 

Kantonsgericht Freiburg, 11 October 2004 [reversed and remanded];
Bundesgericht, 12 June 2006; Kantonsgericht Freiburg, 3 January 2006

Seller(s)' country:  Switzerland

Seller is the:  Defendant

Buyer(s)' country:  Germany

Buyer is the:  Plaintiff

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Goods involved:  Triethylenetetramine (TETA)

Classification of Issues Present -

Application of
CISG:  Yes

UNCITRAL 1B1 Parties in different Contracting States (art. 1(1)(a))

thesaurus:  7A3 Observance of good faith
8A Intent of party making statement or engaging in conduct (art. 8(1))
8B Interpretation based on objective standards (art. 8(2)):
8C Interpretation in light of surrounding circumstances (art. 8(3))
14A Basic criterion - intention to be bound in case of acceptance
18A Criteria for acceptance
19C Modifications that are material

Descriptors:  Acceptance of offer

Applicability
General principles
Good faith
Intent
Internationality
Offers

Key provisions of Article 1(1)(a)

CISG mentioned:  Article 7
Article 8
Article 14
Article 18
Article 19

Other provisions of Article 45

CISG mentioned:  Article 79

Editorial Remarks -

Reproduced from Internationales Handelsrecht (5/2005) 204

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"The formation of a contract may be implied even if there is a custom between the parties to
confirm agreements in writing."

Citations to case abstracts, texts, and commentaries -

UNCITRAL CLOUT
abstract number:  931

Author: 
Thomas M.
Mayer

UNCITRAL ABSTRACT
SWITZERLAND: Federal Court, 5 April 2005 (Chemical products case)

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/93]

The Swiss company X AG informed the German company Y GmbH that an Italian firm was
offering some 70 tons of triethylenetetramine (TETA) for sale. Y GmbH subsequently sent a
purchase confirmation to X AG for 60 tons. X AG was unable to acquire the product. Y GmbH,
who had already resold the goods, was obliged to buy goods in replacement. It invoiced X AG for
the difference in price. However, X AG refused to pay, alleging that no contract had been validly
concluded between it and Y GmbH. Thereupon, Y GmbH brought the case before the competent
district court, which ruled in the defendant's favour, as did the appeal court subsequently.

In its first judgment, the Federal Court, allowing the application of the CISG, in accordance with its
article 1 (1) (a), contradicted both the lower and appeal courts, which had ruled that no contract
had been concluded between the parties. The letter of confirmation issued by the plaintiff did not
in fact amount to acceptance of a corresponding offer from the defendant within the meaning of
article 14 CISG, but in turn constituted a counter-offer which the defendant, through its
subsequent conduct (e.g., handing over of requested documents with reference to the purchase
confirmation) had ratified by decisive acts (article 19 CISG).

In its second [judgment], the Federal Court considered whether the defendant should assume
responsibility for non-delivery to the plaintiff. It observed that the seller must, in principle, bear the
risk of its suppliers' failure to deliver. To avoid that risk, it had to free itself of responsibility by

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means of an appropriate contractual clause. The lower court's finding that the existence of such
an agreement could not, in the present case, be inferred from the specific circumstances was
admissible.

ABSTRACT

Link to Abstract:  Full Text (http://www.unilex.info/cisg/case/1025) [1]

Citations to French: Claude Witz, Recueil Dalloz (22 February 2007) 535

comments on
decision: 

Case Text -

Link to case:  Full Text (http://www.unilex.info/cisg/case/1025) [1]

Queen Mary Case Translation Programme (https://iicl.law.pace.edu/node/28459) [2]

Swiss Federal Supreme Court (Bundesgericht)

5 April 2005 [4C.474/2004/lma]

Translation [*] (/print/25898#*) by Mariel Dimsey [**] (/print/25898#**)

Edited by Institut für ausländisches und Internationales

Privat- und Wirtshaftsrecht der Universität Heidelberg

Daniel Nagel, editor [***] (/print/25898#***)

[...]

FACTS

A. Plaintiff-Appellant ______ [Buyer], a limited liability company (GmbH) established under

German law, and Defendant-Appellee B ______ AG [Seller] of Switzerland had a business
relationship for more than eleven years. In January 2002, the [Seller] learned that a business in
Italy was offering approx. 70 tonnes of triethylene tetramine [TETA] for sale. The [Seller] probably
informed several customers about this, but certainly the [Buyer], who was sent a fax headed
"Offer" by the [Seller] on 10 January 2002:

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"We would like to offer the following product:

Triethylene tetramine 99.5%

Amount: approx. 70t

Packaging: in 1,000 liter containers ..."

A reference to the producer and a request for a prompt response followed.

B. Subsequent to this letter, the parties started negotiations by telephone. On 22 January 2002,
the [Buyer] sent the [Seller] a written confirmation of purchase, which, among other things, stated
the amount to be 60t net and determined the price by reference to a "joint sale". The confirmation
also contained a description of the quality and the details of delivery. Under the heading
"Remarks", the [Buyer] asked the [Seller] to communicate the specifications and the current EC-
safety data sheet by fax. The safety data sheets were sent by the [Seller] by fax dated 24 January
2002. In the cover letter, the following was noted:

"We have yet to send you the specification analysis. The goods will be delivered in 1,000 liter
containers (IBCs) 1 x 1.20m. Total amount approx. 62t."

On 28 January 2002, the [Seller] sent the analysis data, along with the indication that the subject
matter was a technical product, which had been taken into account in the determination of the
price. The cover letter indicated the order number of the confirmation of purchase in the reference
line. On the same day, the [Seller] sent, in a separate letter, the supplier's declaration in
accordance with EC Regulation No. 1207/2001 written on its own stationery.

C. The [Buyer] was made aware of delays before the first delivery date and on 6 February 2002, at
the latest, it received information that the new delivery date could not be complied with either. The
[Seller] could not make the TETA available, although it had sent a truck to Italy to exert pressure
on the supplier. For its part, the [Buyer] had found a buyer for the TETA and had already
concluded a sales contract with this party. This second buyer complied with the contract and
undertook the necessary substitute transaction. It claimed the price difference from the [Buyer].
The [Seller] was not prepared to reimburse this amount. It asserted the view that no contract was
concluded between it and the [Buyer].

D. The [Buyer] proceeded before the Civil Court of the Lake District on 27 June 2002 and claimed
the amount of Swiss Francs [CHF] 25,913.55 plus interest, from the [Seller]. The Civil Court and,
on the appeal of the [Buyer], also the Cantonal Court Fribourg, I Appellate Division, supported the
position of the [Seller] and dismissed the claim, which the [Buyer] had, before the Cantonal Court,
reduced to CHF 23,582 plus interest, on the basis that no contract had existed between the
parties.
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E. The [Buyer] lodged an appeal against the judgment of the Cantonal Court. It applied to the
Federal Supreme Court for the reversal of the judgment appealed against and maintained (with
the exception of specifying the period of interest) the position it took before the Cantonal Court.
The [Seller] applied for dismissal of the appeal with costs.

REASONING OF THE FEDERAL SUPREME COURT

1. As the [Buyer] is located in Germany and the [Seller] in Switzerland, the cantonal instances
judged the facts in accordance with the United Nations Convention on Contracts for the
International Sale of Goods, concluded in Vienna on 11 April 1980 (SR 0.221.211.1, CISG). As the
[Buyer] bases its claims on a sales contract allegedly concluded with the [Seller], the previous
instance rightly examined whether a sales contract had been concluded in accordance with the
provisions of the CISG. That, to this extent, the CISG is applicable, has not been questioned by
either party before the Federal Supreme Court.

2. Initially, the [Buyer] asserts that the fax dated 10 January 2002 was to be regarded as a valid
offer, which it accepted by the confirmation of purchase dated 22 January 2002. The price was
able to be determined at this stage. Nothing is altered by the fact that a profit participation had
been agreed upon.

2.  2.1 Under Art. 14 CISG, a proposal is only definite enough to be regarded as an offer if it
describes the goods and expressly or implicitly determines, or makes provision for determining,
the amount and the price. The offer itself does not state a price. Although the [Buyer] asserts that
the price was already determinable at this stage, it fails to show which statements outside the
offer, or other criteria, were supposed to have determined this price (cf. Schlechtriem, Kommentar
zum Einheitlichen Kaufrecht - CISG -, 4th ed, Munich 2004, Art. 14 CISG, para. 5; Brunner, UN-
Kaufrecht - CISG, Berne 2004, Art. 14 CISG, para. 4).

2.  2.2 In addition, the fact that a response to an offer that contains additions or deviations that
fundamentally change the offer constitutes a rejection of the offer and a counter-offer under Art. 19
CISG, must also be considered. The confirmation of order provides for a joint sale, and even a
profit participation, to which no reference whatsoever was made in the "offer". Even if one was to
assume that the "offer", in itself, fulfilled the requirements of Art. 14 CISG, the confirmation of
purchase shows that no mere "acceptance" of this "offer" took place, as even the amount deviated
from that in the offer. Thus, deviations exist not only with respect to the amount, but also with
respect to the determination of the price. These are therefore fundamental changes (Art. 19(3)
CISG), as these are more than obviously minor discrepancies (Brunner, ibid, Art. 19 CISG, para.

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3). Therefore, it cannot be seen from the letter dated 10 January 2002 and the confirmation of
purchase that a sales contract could have been concluded within the meaning of the confirmation
of purchase.

3. The [Buyer] rightly assumes, as it also did in the previous instance with respect to Art. 19(1)
CISG, that the confirmation of purchase can at least be regarded as an offer. The issue is whether
the [Seller] accepted this offer, as asserted by the [Buyer] in the appeal.

3. 3.1 According to Art. 18 CISG, every declaration or other act that expresses acceptance of an
offer is deemed an acceptance, but not, however, mere silence or inactivity alone, unless such a
practice existed between the parties (Art. 18(1), (3) CISG; Brunner, ibid, Introduction to Arts. 14-24
CISG, para. 5 et seq).

According to these provisions, what must be determined is whether a contractual agreement arose
between the parties and, if so, on what terms. Thereby, within the scope of the appeal
proceedings, the following requirements must be assumed.

3.  3.2 The primary aim of contractual interpretation is to determine the real mutual will of the
parties (Art. 8(1) CISG; Achilles, Kommentar zum UN-Kaufrechtsübereinkommen [CISG], Berlin
2000, Art. 8, para. 2; Brunner, ibid, Art. 8 CISG, para. 3; Schmidt-Kessel, in
Schlechtriem/Schwenzer, ibid, Art. 8 CISG, para. 22). This subjective contractual interpretation is
based on evaluating the evidence, which is not subject to federal jurisdiction in the appeal
proceedings within the scope of application of the CISG, subject to the exceptions in Art. 63(2)
and Art. 64 OR (cf. on the provisions of domestic law: BGE 126 III 375 reason 2e/aa, pp. 379, 380;
121 III 118 reason 4b/aa, p. 123, each with references).

3. 3.3 If an actual "meeting of the minds" cannot be proved, it has to be determined -- owing to the
entire circumstances -- whether the actual will of one party was so easily recognizable by the other
party that it could not have been unaware of it (Art. 8(1) CISG in fine; cf. Brunner, ibid, Art. 8
CISG, para. 4; Schmidt-Kessel, ibid, Art. 8 CISG, para. 16). If this is not the case, then, for the
purposes of determining the probable will of the parties, the declarations of the parties have to be
normatively interpreted in the way that they would have been understood by a reasonable person
in the same position, taking account of their wording and context, as well as the entire
circumstances (Art. 8(2) CISG; Judgment of the Swiss Federal Supreme Court 4C.103/2003 dated
4 August 2003, reason 4.3; Brunner, ibid, Art. 8 CISG, para. 6). This rule corresponds to the
principles of normative interpretation of declarations of intention in accordance with the principle of

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good faith (Vertrauensprinzip), which finds application in domestic law (Honsell, Schweizerisches
Obligationenrecht, Besonderer Teil, 7th ed., Berne 2003, p. 135; BGE 130 III 686 reason 4.3.1, p.
689).

3. 3.4 As an issue of law in the appellate proceedings, the Federal Supreme Court examines not
only the question of whether the opposing party must have recognized the actual significance of a
statement, but also the objectified interpretation of the declaration of intention in accordance with
the understanding of a reasonable person in the position of the other contractual party, although it
is generally bound by the findings of the cantonal judge concerning the external circumstances, as
well as the knowledge and intention of the parties (Art. 63(2) and Art. 64 OR; cf. for the domestic
law BGE 130 III 66, reason 3.2, p. 71, 686, reason 4.3.1, p. 689, each with references).

3. 3.5 In determining the actual will of the parties, as is also the case within the scope of normative
interpretation, the entire circumstances have to be taken into account. In particular, the
negotiations between the parties, the practices that have arisen between them, the trade usages
and the subsequent behavior of the parties is to be taken into account (Art. 8(3) CISG; Federal
Supreme Court judgment 4C.103/2003 dated 4 August 2003, reason 4.3; Achilles, ibid, Art. 8
CISG, para. 4; Schmidt-Kessel, ibid, Art. 8 CISG, para. 28 et seq). Actual findings in this regard
bind the Federal Supreme Court as the appellate instance.

4. The [Buyer] has been unable to successfully bring evidence of an actual mutual declaration of
intention before the dispatch of the confirmation of purchase. Furthermore, contrary to the
assertions of the [Buyer], no circumstances are apparent that normatively lead to the conclusion
that a contract was concluded in this phase. Thereby, the only issue left to be determined is
whether a reasonable person in the position of the [Buyer], based on the confirmation of purchase
and the entire circumstances of the contractual negotiations and the behavior of the [Seller] after
receipt of the confirmation of purchase, could have assumed that a contract was concluded on the
terms asserted by the [Buyer].

4. 4.1 A practice, whereby a written confirmation not contradicted by the other party attains legal
effect, was not known to the parties according to the factual determinations of the previous
instance. On the contrary, it was usual between the parties that each one confirmed the
agreement reached in writing.

4.  4.2 However, the [Seller] did not simply remain inactive after receipt of the confirmation of
purchase. It reacted by unreservedly agreeing to the request of the [Buyer] expressed in the
confirmation of purchase, sent the documents requested, made reference - to some extent
explicitly - to the confirmation of purchase and also specified the delivery amount. A reasonable

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person in the position of the [Buyer] could not have interpreted the letter in question in any other
way than that the [Seller] was generally in agreement with the confirmation of purchase. Had the
confirmation of purchase contained unacceptable conditions, then, according to the principle of
good faith, the [Seller] would have been under an obligation to indicate this to the [Buyer]. As it did
not do this, the confirmation of purchase must be able to be held against it. That the sending of the
documents, according to the findings of the previous instance, was a routine procedure and that
the appropriate documents had already been sent with the offer does not change anything in the
result, since, as stated here, the [Seller] answered the offer contained in the confirmation of
purchase in the manner described.

4. 4.3 In addition, the fact that the [Seller] informed the [Buyer] about the delay in delivery cannot
be explained from the position of a reasonable person if one assumes that no contractual
commitments whatsoever existed between the parties. It is irrelevant whether the contractual
commitment already arose with the dispatch of the documents requested and the cover letter, or
whether it did not arise until the communication of the delay in delivery. In any case, the finding of
the previous instance that no contractual commitment existed cannot be upheld in the light of Art.
8(2) CISG.

5. The damages claimed by the [Buyer] under Art. 45(1)(b) CISG require that the [Seller] failed to
perform one of its obligations under the contract or the provisions of the CISG (Art. 45(1) CISG).
As a contract was concluded, it remains to be determined whether the [Seller] fulfilled its
contractual obligations.

5. 5.1 It can be seen from the judgment appealed against that the [Seller] claimed in the cantonal
proceedings that it had acted cautiously on purpose and had not sent a confirmation of sale, as it
was not sure whether it could provide the TETA and had also communicated this to the [Buyer]. To
what extent one of the parties involved bore the risk of procurement was able to be freely agreed
upon (cf. Brunner, ibid, Art. 79 CISG, para. 11; Stoll/Gruber, in Schlechtriem/Schwenzer, ibid, Art.
79 CISG, para. 18). Thereby, for example, for the benefit of the seller, it can be agreed that this
party is only obliged to deliver the goods if it itself receives delivery, or it can be in accordance with
established practice that the seller does not assume the risk of procurement until it has confirmed
the sale in writing. Even bearing the risk of procurement jointly, analogous with a joint sale, could
be possible.

5. 5.2 The confirmation of sale did not contain any information concerning what was to occur if the
TETA could not be made available. Thereby, what must be determined is how, on consideration of
the entire circumstances within the scope of normative contractual interpretation, the risk of
procurement was regulated between the parties. The previous instance did not make any findings

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concerning these circumstances, from which conclusions could be drawn (Art. 8(3) CISG),
according to which a rejection of the dispute in order to complete the factual determinations is
necessary (Art. 64(1) OR). It can be seen from the decision appealed against that the [Seller]
made efforts to procure the goods and even sent a truck for the purpose of exerting pressure on
the supplier. To the extent that it did not bear the risk of procurement, it would have thereby
fulfilled its contractual obligations (Brunner, ibid, Art. 79 CISG, para. 18). However, if the risk of
procurement does lie with the [Seller], the previous instance will have to determine whether the
additional requirements for the damages claim asserted are fulfilled and will have to determine the
amount. To this extent, the appeal is justified.

6. By way of contrast, the [Buyer] is not to be heard to the extent that it asserts, within the scope of
a claim for correction of the evaluation of facts due to obvious oversight (Versehensrüge), that the
previous instance should not have been allowed to dismiss one of its exhibits as late. There is no
obvious oversight, as the court was aware of the document and deliberately did not consider it. Up
until which point in time exhibits are to be considered in cantonal proceedings is primarily a
question of cantonal procedural law. To this extent, a violation of federal law cannot be shown by
the [Buyer].

7. In partially allowing the appeal, the dispute is to be referred back to the previous instance for
the purpose of amending the factual determinations and for a new decision concerning the liability
for failure to make delivery. If appropriate, the previous instance will have to make findings as to
the amount of the damages claimed. The [Buyer], who has applied for the affirmation of the claim,
is only partially successful in its pleadings. Whether its claim will be successful still remains open.
Based on this outcome of the proceedings, the court costs are to be split evenly between each
party and each party bears its own costs (Art. 156(1) and 159(1) OR).

HOLDING

Therefore, the Federal Supreme Court holds:

1. In partially allowing the appeal, the judgment appealed against is reversed and the matter is
referred back to the previous instance in order to amend the facts and to reach a new
decision.
2. The court costs in the amount of CHF 2,000.00 are to be split evenly between the parties.
3. No party costs are awarded.

4. This judgment will be communicated in writing to the parties and to the Cantonal Court
Fribourg, I. Appellate Division.

[...]
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Footnotes
* All translations should be verified by cross-checking against the original text. For purposes of this
translation, Plaintiff-Appellant of Germany is referred to as [Buyer] and Defendant-Appellee of
Switzerland is referred to as [Seller]. Amounts in the currency of Switzerland (Swiss Francs) are
indicated as [CHF].

** Mariel Dimsey is a Research Assistant and Teaching Assistant at the University of Basel.

*** Daniel Nagel has been a law student at Heidelberg University since October 2002 and an
exchange student at Leeds University in 2004/2005.

Source URL: https://iicl.law.pace.edu/cisg/case/switzerland-bundesgericht-bger-supreme-court-2

Links

[1] http://www.unilex.info/cisg/case/1025

[2] https://iicl.law.pace.edu/node/28459

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