Appellate Court (Obergericht) Thurgau

19 December 1995 [ZB 95.22]

Translation* by Jan Henning Berg**

[...]

JUDGMENT OF THE COURT

Whereas the appeal is not justified, the cross-appeal is partially founded. It is adjudged that:

1. The action is justified and Defendant-Appellant [Buyer] is ordered to pay Plaintiff-Appellee

[Agent of Seller] Swiss francs [Sfr.] 12,424.35 plus 5% interest since 13 September 1993.

2. a) Taking recourse to [Buyer], [Agent of Seller] shall pay Sfr. 1,033 as costs of the action in
first instance.

b) [Buyer] shall pay for the litigation fees for the appeal in an amount of Sfr. 1,200.

c) Taking recourse to [Buyer], [Agent of Seller] shall pay Sfr. 800 for the cross-appeal
action.

d) [Buyer] is obliged to compensate [Agent of Seller] for the action as a whole with
Sfr. 6,000 plus 6.5% VAT.

FACTS AND POSITIONS OF THE PARTIES

1. [Factual background]

[Agent of Seller] is a Swiss enterprise and is listed in the commercial register. It acted as an
agent for the [Seller], responsible for the area of Switzerland. Swiss customers – among them

*
All translations should be verified by cross-checking against the original text. For purposes of this translation,
Appellant and Cross-Appellee of Switzerland is referred to as [Buyer] and Appellee and Cross-Appellant of
Switzerland is referred to as [Agent of Seller]. The Austrian manufacturer of cloth is referred to as [Seller].
Amounts in the currency of Switzerland (Swiss francs) are indicated as [Sfr.]. Amounts in the former currency of
Germany (Deutsche Mark) are indicated as [DM].
Translator's note on other abbreviations: ABGB = Allgemeines Bürgerliches Gesetzbuch [Austrian Civil Code];
AT = Anwaltstarif des Kantons Thurgau [Law on Assessment of Attorney's Fees of the Canton of Thurgau]; BGE
= Bundesgerichtsentscheidung [Collected decision of the Swiss Federal Supreme Court]; IPRG = Bundesgesetz
über das Internationale Privatrecht [Swiss Code on the Conflict of Laws]; OGH = Oberster Gerichtshof [Austrian
Federal Supreme Court]; OR = Obligationenrecht [Swiss Code on the Law of Obligations]; SHAB =
Schweizerisches Handelsamtsblatt [Swiss Official Gazette of Commerce]; SJIR = Schweizerisches Jahrbuch für
Internationales Recht [Swiss Journal on International Law]; ZPO = Zivilprozessordnung des Kantons Thurgau
[Code of Civil Procedure of the Canton of Thurgau].
**
Jan Henning Berg is a law student at the University of Osnabrück, Germany and participated in the 13th Willem
C. Vis Moot with the team of the University of Osnabrück. He has coached the team of the University of Osnabrück
for the 14th Willem C. Vis Moot and 4th Willem C. Vis (East) Moot.
1
[Buyer] – who ordered cloth from [Seller], usually received order confirmations, invoices and
reminders by [Agent of Seller]. Moreover, they paid the purchase prices at [Agent of Seller]’s
bank account. In the course of business relations, there were several deliveries of cloth from
[Seller] to [Buyer]. After [Buyer] ordered a certain amount of cloth in 1993 for its summer
collection 1994, [Seller] became bankrupt by July 1993.

2. a) [Position of the parties]

[Agent of Seller] requested payment of invoices for delivery of goods in the amount of
Sfr. 12,424.35. [Buyer] did not contest receipt of those goods. However, [Buyer] alleged that
[Seller] was its contracting partner rather than [Agent of Seller]. [Agent of Seller] then
commenced an action before the District Court. [Buyer] relied on [Agent of Seller] not being
entitled to the claim and, additionally, not having the capacity to sue since it had been de-listed
from the commercial register in the meantime. Furthermore, [Buyer] alleged that it was entitled
to claims from set-offs in an amount exceeding the sum claimed by [Agent of Seller] as a result
of non-performance by [Seller] regarding certain contracts. In contrast, [Agent of Seller]
insisted on itself being the contracting party and, in the alternative, asserted that claims had
been assigned to it by [Seller] prior to its bankruptcy.

b) [Ruling of the District Court of First Instance]

The District Court partially approved the [Seller]’s claim in the amount of Sfr. 10,311.55
plus interest after its procedure taking evidence in regard to the invoices in dispute, which
included hearing of witnesses. It substantially held that [Agent of Seller]’s claim was neither
founded through an agency relation between [Agent of Seller] and [Seller] nor on it acting as
an auxiliary person for [Seller]. However, the Court found that [Seller] had assigned its claims
to [Agent of Seller] prior to its bankruptcy, which is possible without form requirements under
Austrian law. Only a partial claim of Sfr. 2,112.87 was subject to Swiss law; lacking the
necessary instrument of assignment, this claim was not effectively assigned to [Agent of Seller].
Any claims of [Buyer] following from set-offs lacked sufficient substantiation and were
therefore not awarded.

3. a) [Buyer’s appeal]

[Buyer] appealed against this judgment, requesting dismissal of the action, alternatively,
remittal to the District Court for another taking of evidence. [Buyer] argued that it had not been
procedurally prepared for [Agent of Seller]’s sudden submission of an assignment of claims by
[Seller] to [Agent of Seller]. It further expressly reserved its right to substantiate the claims
from set-offs. In view of the set-off claims, a sector-contingent necessity for adhering to the
exact delivery dates must be considered. Textiles would be practically worthless if they were
delivered only one month late. There were various clothes in the fashion brochure from 1993
for the summer collection 1994 which should have been produced using cloth from [Seller].
After its bankruptcy in summer 1993 [Buyer], could only find substitute suppliers for part of
the required cloth. A change of the brochure content was too expensive and thus did not come
into consideration. Concerning the business relation with a Munich customer, [Buyer] reached
an agreement for payment of DM 13,500 as damages which would render a set-off claim of
Sfr. 11,130.75. [Buyer] further alleged that it suffered additional damages of Sfr. 2,184.16,
Sfr. 3,402.72 and Sfr. 4,618.60 from non-delivery of various cloths (art. no. 19921074,
no. 12731073, no. 50051058 and no. 19921058). This resulted in a total set-off claim of
Sfr. 21,336.23.

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 b) [Agent of Seller’s cross-appeal]

[Agent of Seller] brought a cross-appeal, requesting payment of Sfr. 12,424.35 plus interest;
it claimed another Sfr. 5,340 and Sfr. 6,835.25 as compensation for attorneys’ fees for the action
in first and second instance. [Agent of Seller] argued that it was party to the contract, rather
than [Seller]. It was the one who had issued all order confirmations, invoices and reminders.
Although the order in question of 3 May 1993 was confirmed in writing, printed with [Seller]’s
letterhead, the Court in first instance ignored the fact that [Agent of Seller]’s complimentary
close was used in this letter. The order was invoiced by [Agent of Seller] without any objection
on the side of the [Buyer]. This corresponded to common usage between the companies over
the years. It must have been a clear accident that the confirmation was printed on the wrong
paper. There were no justified claims from set-offs. Finally, the Court in first instance falsely
considered [Agent of Seller]’s attorney’s bill of 16 June 1994. It ignored the fact that further
extensive correspondence as well as participation in the taking of evidence and in the closing
hearing was necessary subsequently. A request for appropriate compensation of the attorney’s
additional efforts was issued by that later date.

c) [Buyer’s cross-appeal response]

[Buyer] seeks dismissal of the [Seller]’s cross-appeal. The volume of the claim awarded by
the Court of First Instance must be disallowed for [Agent of Seller] had not suffered any loss.
This also held true for the costs of proceedings. [Buyer] assumed an attorney’s bill with
Sfr. 2,800 as basic charge. Adding extra charge for the taking of evidence led to a maximum
compensation of Sfr. 3,920.

d) [Buyer] further argues during the hearing in second instance that the dispute had arisen
only for the [Seller]’s bankruptcy. [Agent of Seller] commenced proceedings in 1994. The
invoice sum corresponded to [Buyer]’s deliveries, which was a creditor. It was only introduced
after commencement of the action that claims had allegedly been assigned. It could remain
undecided whether or not any claims were actually assigned. [Buyer]’s possibility for a set-off
would endure in the amount as set out in the appellate submission. It held to its counterclaims.

e) [Agent of Seller] adds that the requested compensation included all costs that accrued in
the first and second instance of the proceedings. Primarily, [Agent of Seller] was entitled to the
claim. Then and today, it was listed in the commercial register, which gave the capacity to sue.
[Agent of Seller] sent goods to [Buyer] upon placement of orders. It must be referred to the
letter that was addressed to the bankruptcy office. Rather than [Buyer], it was [Agent of Seller]
to whom the [Seller]’s assets were credited. [Buyer] had known that all orders were processed
and invoiced by [Agent of Seller], meaning that it accepted the particular way of transacting.
No other result could be derived from the particular order that was printed on wrong paper. The
common usage was evident and lasted for many years; the question of which was party to the
contracts was answered at the latest when the invoices were issued. It remained decisive who
[Buyer] selected as contracting partner. The contractual relations between [Buyer] and [Agent
of Seller] had been practiced for a long time and were continued. [Buyer] could not rely on
some mistakable confirmations. [Agent of Seller]’s claim should be approved without
consideration of set-offs. [Buyer] could be entitled to damages against [Seller] but not against
[Agent of Seller]. Even in case the claims had been assigned, there was no need to verify any
set-off. The opponent had taken note of the assignment at the time of invoicing. Basically, the
alleged claims from set-offs remained contested by [Agent of Seller].

3
 f) With reference to the cross-appeal, [Buyer] submits that [Agent of Seller] had not
possessed a telephone extension, it rather had phone calls redirected to Austria. Furthermore, it
did not have any employees throughout the last years and had its mail redirected. Customer
calls were conducted by [Seller]’s representatives, who also confirmed the orders.

g) Further submissions of the parties will be referred to in the Court’s ruling whenever
necessary.

REASONING OF THE COURT

1. [Agent of Seller capable to appear in court]

First, it is in dispute whether [Agent of Seller] is capable if appearing in court since it was de-
listed from the commercial register in the meantime according to [Buyer]’s submission. Even
if failing any demonstration by the parties, the Court must settle the question ex officio (§ 94
ZPO).

a) The request for preparation of a mediation hearing was filed on 21 February 1994. The
hearing was held on 5 April 1994. [Agent of Seller] was de-listed from the commercial register
on 26 August 1994 (SHAB no. 165; exhibit 45). It turned out later that [Agent of Seller] was
de-listed by the concerned office itself, however, after initiative part of [Buyer].

b) Under Art. 562 OR, partnership businesses have the capacity to sue and to be sued. Even
though commercial partnerships are to be listed in the commercial register (Art. 552(2) OR),
the entry of the data is merely of a declaratory nature (Meier-Hayoz/Forstmoser, Grundriss des
schweizerischen Gesellschaftsrechts, 7th ed., § 9 N 55 et seq.). A business is terminated only
by the time of completion of liquidation (BGE 81 II 361). Therefore, the company retains its
procedural capacities as long as rights are being claimed against it (Pastalozzi/Wettenschweiler,
Kommentar zum Schweizerischen Privatrecht, Obligationenrecht II, Art. 562 OR N 10).

As it is undisputed that [Agent of Seller] was properly registered at the commencement of

proceedings and claims have been raised against that party, its capacity to appear in court is
sufficiently established. The Court in first instance rightfully allowed the action under these
requirements.

2. The Court of First Instance denied [Agent of Seller]’s position as contracting partner on the
merits (claim amounting Sfr. 10,311.55). However, it assumed that the claims were validly
assigned to [Agent of Seller]. [Buyer] holds to its conclusion that a contractual relation between
itself and [Seller] had to be considered.

a) The claim amounting to Sfr. 10,311.55 is based on an offer by [Seller] dated 3 May 1993
for delivery of cloth, 1,080 meters. [Buyer] confirmed the offer by fax on the same day. It is
true that [Agent of Seller] appears in the complementary close of the offer, however, [Seller]
unambiguously identified itself as sender ([Buyer]’s exhibit 3). All relevant acts of legal
significance were exchanged between these parties. Thereafter, [Seller] even addressed a fax
dated 1 July 1993 directly to [Buyer]. It responded to an inquiry concerning marketing costs
([Buyer]’s exhibit 2). Furthermore, the documents transmitted between [Seller] and [Agent of
Seller] ([Agent of Seller]’s exhibit 8) contain [Seller]’s caption together with final annotations
„[Seller], authorized exporter“ and „the undersigned, exporter of the goods to which this
4
commercial invoice refers, declares that the goods, unless otherwise specified, fulfil the
requirements for obtaining provenience quality with the most convenient traffic of goods to
Switzerland and their country of origin is ... (see invoice)“. It can be concluded from the
witness’ testimonies that complaints or notices of non-conformity were either addressed to
[Seller] directly or processed through a representative, a company from Zurich.

b) [Applicable law on international agency]

International sales contracts are governed by the CISG (United Nations Convention on
Contracts for the International Sale of Goods of 11 April 1980). Both Austria (signed on
1 January 1989) and Switzerland (signed on 1 March 1991) are member states to the CISG.
Yet, the CISG does not contain rules on agency nor does it essentially refer to the possibility of
an assignment of claims. According to the express reference provided by Art. 7(2) CISG, these
questions are to be settled under the domestic law applicable by means of conflicts of laws rules
(von Caemmerer/Schlechtriem, Kommentar zum einheitlichen UN-Kaufrecht, Vorbem. zu
Art. 14-24 CISG N 3, Art. 4 N 23). The Geneva Convention on Agency in the International
Sale of Goods of 11 February 1983 does contain unified law on agents acting without authority,
however, it still lacks the necessary count of ratifying countries. The Hague Convention on the
Law Applicable to Agency of 14 March 1978 provides a relevant set of conflicts rules but has
not come into force yet. There are no transnational provisions on this question.

c) The Court of First Instance rightfully points out that neither the said offer nor its
acceptance of 3 May 1993 contain any hints to a stipulated agency relation. The existence of an
agency and its possible extent to external relationships between the principal and a third party
(here [Seller] and [Buyer]) is, however, not to be determined according to OR, as the Court of
First Instance assumed. Instead, it follows conflict of laws rules and their relevant connecting
factors. Consequently and under the conflicts rule of Art. 126(2) IPRG, its objective connection
led to the application of Swiss law for agency because the alleged agent has its residence there.
This, however, is valid only insofar as the question does not in itself fall within the scope of
application of the CISG, which is applied through conflict of laws rules and requires an
autonomous interpretation.

Art. 8 CISG provides rules for interpretation of parties’ statements and conduct during a
contract’s conclusion while Arts. 14 et seq. CISG contain rules for offer and acceptance. In case
the transaction already fits into the contractual mechanism of offer and acceptance as ruled by
the CISG, then there will be no application of the Swiss Code on the Law of Obligations either
to this matter or to the question of agency.

d) [Seller as a party to the contract]

According to Art. 14(1) CISG, 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.

[Seller]’s fax dated 3 May 1993 fulfils all of these requirements by indicating the supposed
contracting partner ([Buyer]), the goods, price, quantity and date of delivery. It also
unmistakably indicates the offeror. Not only does the name of the [Seller] appear on the
letterhead as addresser, but it expressly asks for the confirmation of the order and its conditions.
The writing therefore refers to fax and phone numbers which are obviously those of the [Seller].
5
[Buyer] sent its confirmation to [Seller] through these numbers ([Buyer]’s exhibit 3). The
statement’s objective intention, which is solely relevant under Art. 14(1) CISG (von
Caemmerer/Schlechtriem, Art. 14 CISG N 13), leads straight to [Seller] as the contracting
partner. That means there is no need for a special statute on agency. It is not submitted that
[Seller] – in relation to [Agent of Seller] – might not have been allowed to directly contract
with third parties. Furthermore, the parties did not assert that any formal notice of the agency
was ever given to external relationships.

Determining the intent of the parties by interpretation under Art. 8 CISG further corroborates
the position of [Seller] as contracting partner. For interpreting the relevant declaration of intent,
it must be looked to how the addressee had to understand it with consideration to common usage
and under the aspect of good faith. [Buyer] could reasonably assume that [Seller], being
producer of the cloth and the only contact person, was party to the contract. If any doubts
remained, the actual conduct would determine the declaration’s content. This, once again,
qualifies [Seller] as the contracting partner. [Buyer] can rightfully rely on the fact that any
correspondence in cases of breach of contractual obligations, namely complaints and notices of
non-conformity, were exchanged with [Seller] at all times (witness testimony 5.3). The Court
of First Instance ruled properly in this regard. Furthermore, [Seller] dealt with the question of
awarding grants for marketing expenses ([Buyer]’s exhibit 4). According to accepted common
notion set out above, it was right for [Buyer] to assume that contracts were concluded with
[Seller]. When determining the parties involved in these contracts, it is irrelevant to consider
that payment was handled by way of [Agent of Seller].

e) [Assignment of claims from Seller to Agent of Seller]

The Court of First Instance approved the assignment of the claim worth Sfr. 10,311.55
according to invoice dated 28 May 1993 ([Agent of Seller]’s exhibit 2). [Buyer] does not
seriously object to this any longer.

aa) [Law applicable to the assignment]

The CISG does not provide rules concerning assignment of claims (von
Caemmerer/Schlechtriem, Art. 4 CISG N 23). This matter is resolved under domestic conflict
of laws rules. As provided by Art. 145 IPRG, failing a choice of law, the assignment is governed
by the law applicable to the claim being subject to the assignment. All questions concerning
existence and extent of the claim assigned are settled by the applicable domestic law
(Kaller/Girsberger, Kommentar IPRG, Art. 145 IPRG N 29). However, Art. 145(3) IPRG
provides for applicability of the law governing the assignment contract to determine the
necessary formalities.

bb) [Claims properly assigned to Agent of Seller]

Since claims were assigned by [Seller] to [Agent of Seller], formalities are governed by
Austrian law. It must be assumed that claims were continuously assigned to [Agent of Seller],
although there is no corresponding evidence in writing (but see witness testimony 5.3).

Austrian law is familiar to both the special type of collection assignment and the type of a tacit
assignment, which means the debtor need not be informed (Roziol/Walser, Grundriss des
bürgerlichen Rechts, vol. I: Allg. Teil und Schuldrecht, Vienna 1992, pp. 296 et seq.). Other
than under Swiss law, assignments under §§ 1392 et seq. ABGB need not be made in writing;
oral declarations are sufficient. Therefore, claims were effectively assigned in favor of [Agent
6
of Seller]. Since the debtor need not be informed about an assignment (§§ 1395 et seq. ABGB),
it can remain undecided whether it constituted a notification of the assignment when [Agent of
Seller] simply issued the invoices containing its own bank coordinates. It is only relevant that
claims were effectively assigned, so that [Agent of Seller] is entitled to seek payment.

f) Therefore, the Court of First Instance properly concluded that [Agent of Seller] was
entitled to Sfr. 10,311.55 because the assignment’s formalities were governed by Austrian law
which does not require written form.

3. [Additional claims by Agent of Seller]

The Court of First Instance did not approve [Agent of Seller]’s claim in an amount of
Sfr. 2,112.87 based on Swiss law. With its cross-appeal, [Agent of Seller] seeks this sum to be
awarded, as well.

a) The fact that the contract on which the claim is based was negotiated between the parties
through [Agent of Seller] as agent let the Court of First Instance to assume that [Agent of Seller]
was a commercial agency. This holds true in view of the evidence taken.

b) [Law applicable to assignment contracts]

Yet, the status of [Agent of Seller] as agent does not in itself lead to the application of Swiss
law on assignments. It is true that the Hague Convention on the Law Applicable to International
Sales of Goods of 15 June 1955, upon which the Court of First Instance relied, provides in
Art. 3(2) for a particular connection to the purchaser’s habitual residence or establishment.
Art. 118 IPRG expressly refers to the application of the Hague Convention. It is applicable in
terms of territory if the forum is a member state, which does not apply for Austria, but for
Switzerland. In that respect, the Hague Convention displaces the autonomous conflict of laws
rules (Keller/Kren Kostkiewicz, Kommentar IPRG, Art. 118 IPRG 11 5). However, the
arranged connection does not preclude a special connection in certain affairs (Keller/Kren
Kostkiewicz, Kommentar IPRG, Art. 118 IPRG N 19 et seq.). Moreover, Art. 3(2) Hague
Convention can hardly be understood today as a concept of a universally accepted conflict of
laws rule; it has already faced considerable criticism (Schnitzar, Funktionelle Anknüpfung im
internationalen Vertragsrecht, Festschrift Wilbald Schananberger, Freiburg 1968, p. 393;
Vischer, Das Haager Abkommen ..., in: SJIR XI/1964, pp. 63 et seq.).

A restrictive interpretation is even more appropriate, as the mere connection by way of the sales
contract cannot force its extension to independent institutions like assignment that are not
founded on particular rules of sales law. Especially the fact that assignment and similar
institutions of the law of obligations are excluded from the scope of the CISG prohibit
interpretation of Art. 3(2) as a broadly-applicable conflict rule.

Applying the assignment of claims from sales contracts strictly under Art. 3(2) Hague
Convention is not appropriate, even in the context of this dispute. The way in which claims
were assigned to the [Agent of Seller] remained always the same. Neither the result nor any
intention of the parties calls for a dependency of the assignment’s validity on its conclusion by
way of an agent. Assuming that all of [Seller]’s claims against its international customers were
to be assigned, results would arbitrarily differ between each country and each form of
assignment. Therefore, it must be reasonably held that there is a unified statute of assignment
contracts. This even embodies an implied choice between [Seller] and [Agent of Seller] in favor

7
of Austrian law for the formalities (Art. 145(3) IPRG) in order to eliminate any invalidity
caused by a lack of form.

c) Consequently, assignment of claims worth Sfr. 2,112.87 must be judged in accordance

with Austrian law. The assignment is valid and leads to an additional claim of [Agent of Seller]
against [Buyer]. Failing a written stipulation does not hinder effective assignment under
Austrian law.

4. [Buyer asserting a set-off in order to counteract claims of Agent of Seller]

[Buyer] asserts the existence of certain claims in order to achieve a set-off. These claims were
substantiated during the proceedings in second instance. [Agent of Seller] contests the claims
both on the merits and in their amount.

a) [Applicable law]

The assignment as such – subject to the special connection for formalities explained above
– is governed by the statute of the claim as long as the parties have not made a choice of law
(Art. 145(1)(1)(2) IPRG. According to Art. 118 IPRG in conjunction with Art. 3 Hague
Convention, the conflicts rules connection lead to the seller’s law (Art. 3(1)), or the buyer’s law
in case the order was received by an agent (Art. 3(2)). The validity of the assignment under the
applicable law does also affect the question whether and, if yes, to which extent the debtor will
be allowed to set-off the assigned claim with those of its own (Keller/Girsberger, Art. 145 IPRG
N 29).

b) The statute governing the claim leads to Austrian law with respect to the invoice of
Sfr. 10,311.55 because the sales contract was directly concluded between [Seller] and [Buyer].
The residual claim of Sfr. 2,112.87 is however governed by Swiss law: The contract’s
conclusion by way of the agent calls for a conflict of laws connection towards the buyer’s
residence (Art. 118 IPRG in conjunction with Art. 3(2) Hague Convention). International
bodies of law as the CISG or the Hague Convention do not regulate the possibility of a set-off
against counterclaims. Therefore, domestic law must be applied in accordance with rules of
private international law. A separation of applicable law to the contract is irrelevant as long as
both jurisdictions lead to the same result as to the claims from set-offs.

c) [Set-offs possible both under Swiss and Austrian law]

Any claims from set-offs – if existing, at all – are addressed primarily against [Seller] as the
debtor. [Buyer] relies on non-performance of the sales contracts by its supplier. If Swiss law
was applicable, a right to set-off against counterclaims would be allowed, however, in a
restricted manner. Art. 169(1) OR provides that a claim is transferred to the assignee when such
claim was burdened with the possibility to set-off against the assignor. Yet, the possibility to
set off is impeded if the debtor’s counterclaims afterwards become due as the assigned claim
(Art. 169(2) OR).

Even though this means a discrimination of the debtor in comparison to general rules on set-
offs, the express wording of the provisions do not allow for a different interpretation
(Guhl/Marz/Koller, Schweizerisches Obligationenrecht, 8th ed., p. 255; von Tuhr/Eschar,
Schweizerisches Obligationenrecht allg. Teil, vol. II, pp. 367 et seq.). Austrian law leads to
similar results for the present matter. After a claim has been assigned, the debtor can set-off

8
against the assignee even with claims it holds against the assignor, which had accrued prior to
the assignment (Koziol/Welser, p. 279, with reference to OGH judicature).

d) [No right for Buyer to rely on a set-off]

In the present case, account no. 16748 (Sfr. 10,311.50) bears the date of invoicing 28 May
1993 and a time for payment of not more than 30 days ([Agent of Seller]’s exhibit 2). The same
applies to further accounts worth Sfr. 2,112.87 (dated 17 May, 2 June, 7 June, 14 June, 6 July
and 14 July 1993; [Agent of Seller]’s exhibit 2). [Buyer] substantiates that its right to set-off
arose from claims for damages because of late or non-delivery. This referred to cloth that was
intended to be used for the summer collection 1994 and which ought to have been delivered in
fall 1993/94. Should Swiss law be applicable, it is lacking concurrent maturity of claim and
counterclaim. Should Austrian law be applicable, it is lacking accrual of the claim on the merits
until notification, which was made by [Agent of Seller] through the invoicing. Therefore,
[Buyer] cannot rightfully rely on a set-off against assigned claims; a further assessment as
regards the value of claims is not necessary.

e) The interest rate for default and the relevant period was not sufficiently contested.

5. [Agent of Seller’s cross-appeal for additional attorneys’ fees is justified]

The appeal is thus unjustified. [Buyer] is not only obliged to pay [Agent of Seller]
Sfr. 10,311.55 as awarded by the Court of First Instance, but Sfr. 12,424.35. The cross-appeal
is justified. It is not relevant that [Agent of Seller] may have expressed itself a bit misleadingly
in its procedural request for relief. It must be interpreted according to its objective content and
under the general principle of good faith (BGE 105 II 152; Vogel, Grundriss des
Zivilprozessrechts, § 1 N 79 et seq.). According to objective interpretation, [Agent of Seller]
did not seek anything else but dismissal of the appeal and award of the residual claim of
Sfr. 2,112.87 by way of a cross-appeal. This was clearly articulated in its rejoinder. It is self-
explanatory from the request that it did not want to be awarded the sum of Sfr. 10,311.55 –
which the Court of First Instance had already awarded – once again. Correspondingly,
dismissing the cross-appeal and burdening [Agent of Seller] with costs and expenses would be
a case of excessive formality.

[Agent of Seller] argues that the Court of First Instance was wrong in gearing to the attorneys’
bill issued during main negotiations. The attorneys’ further efforts in the present dispute were
not considered.

a) § 75(1) ZPO provides that the losing party will be obliged to pay for all costs and
expenses suffered by the prevailing party, if so requested. It is undisputed that [Agent of
Seller]’s attorney submitted a bill during the main negotiations, however it failed to submit an
amended bill after the taking of evidence. Moreover, there is no hint to any closing hearing
from within the record.

b) According to common practice it is sufficient under § 75 ZPO to request that „costs and
expenses should be borne by the other party“. In this respect, there is need for an interpretation
of the request according to good faith. It would have been a duty for the Court of First Instance
to consider the [Agent of Seller]’s attorney’s efforts after the main negotiations.

However, the submitted bill is not to be compensated in total: The position „bonus for
submission of evidence and cash expenditures“ requires a reduction in accordance with §§ 2
9
and 3(a) AT. These positions need to be assessed at Sfr. 1,400 (50% of basic charge),
respectively Sfr. 400 including the proceedings in second instance. A total compensation for
proceedings in both first and second instance is appropriate in the amount of Sfr. 6,000 plus
VAT.

c) Following from the outcome of proceedings, [Buyer] bears the costs for the Court’s ruling
in second instance. [Agent of Seller] has the opportunity to charge [Buyer] for the costs required
in order to conduct the cross-appeal.

[...]

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