State Farm has a grace period

Keywords

APPLICATION OF CISG - CHOICE OF LAW OF CONTRACTING STATE AS GOVERNING LAW OF THE CONTRACT

CONTRACT FOR DELIVERY OF GOODS BY INSTALMENTS (ART. 73 (2) CISG) - DEFINITION - LACK OF CONFORMITY OF FIRST TWO INSTALMENTS - AVOIDANCE OF CONTRACT FOR THE FUTURE - PROBABILITY OF FUTURE FUNDAMENTAL BREACH OF CONTRACT (ART. 25 CISG)

LACK OF CONFORMITY OF DELIVERED INSTALMENTS - FAILURE TO GIVE TIMELY NOTICE WITH RESPECT TO DELIVERED INSTALMENTS (ART. 39 (1) CISG) - BUYER DOES NOT LOSE ITS RIGHT TO AVOID CONTRACT FOR THE FUTURE

BUYER'S FAILURE TO ACCEPT GOODS (ART. 60 CISG) - SELLER'S RIGHT TO DECLARE CONTRACT AVOIDED (ART. 64 (1) (B) CISG)

Abstract

An Austrian seller and a Polish buyer concluded two contracts for the sale of barley. The contracts were subject to Austrian law. Following contractual specifications, a certificate of quality of the goods was issued by an Austrian specialized institute. Two installations of barley were delivered by the seller in January and February. The buyer refused to take further deliveries, alleging that the goods did not conform to the contract and relying inter alia on an expertise issued by a Polish specialized institute. After fixing an additional time for performance without results, the seller declared the contract avoided and filed arbitration proceedings asking for damages and interest. The buyer in its turn counter-claimed damages.

The Arbitral Court held that CISG was applicable since the parties had their places of business in two different contracting states at the time of conclusion of the contracts (Austria and Poland). Moreover, the parties had expressly chosen Austrian law, which includes CISG.

Before examining the evidence on the lack of conformity, the Arbitral Court addressed the question as to whether the buyer, on the grounds of the alleged lack of conformity of the first two deliveries, would have the right to declare the contracts avoided as regards future deliveries .

The Court first observed that the two separate contracts concluded by the parties were to be considered a unitary transaction from an economic point of view and represented therefore a contract for the delivery of goods in instalments according to Art. 73 (2) CISG (the contracts had been concluded the same day; they provided for the delivery of the same kind of goods in instalments during the period January to June and were subject to similar terms).

In the case of a contract for delivery of goods in installations, if one party's failure to perform with respect to any installation gives the other party good grounds to conclude that a fundamental breach will occur with respect to future instalments, the other party may declare the contract avoided for the future (Art. 73 (2) CISG). According to the Court, the term "good grounds" means a high probability of breach (and need not be as severe as the test required by Art. 72 CISG for other cases of anticipatory breach of contract).

In the case at hand a lack of conformity of the first two instalments would amount to a fundamental breach of the contract by the seller (Art. 25 CISG), rendering highly probable that such a breach would occur with respect to future instalments, in the absence of contrary declarations or measures on the part of the seller (such as for example a commitment to change producer or agent).

The Court further noted that even if the buyer fails to give timely notice of lack of conformity with regard to the delivered instalments (Art. 39 CISG), it does not lose the right to declare the contract avoided with respect to the future instalments according to Art. 73 CISG. A late notice of lack of conformity can well be used as evidence for the probability of a similar breach by the seller in the future.

After examining the evidence provided by the parties on the lack of conformity, the Arbitral Court however rejected the buyer's contention that the goods were defective and that the expert certificate issued by the Austrian specialized institute was incorrect.

Consequently, while the buyer could not rely on Art. 73 (2) CISG), the seller had the right to declare the two contracts avoided according to Art. 64 (1) (b) CISG because the buyer had breached its duty to take delivery of the goods (Art. 60 CISG) and had expressly refused to accept any other future delivery. The seller was further awarded damages for lost profits according to the rules of the market for farm products in Vienna expressly referred to by the parties - and interest on the sums due as damages (Arts. 78 and 74 CISG) at the rate fixed by the seller's standard terms.

Full text

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I. The following facts are undisputed:

With the sales contracts No. 9604394 (Attachment ./B) and No. 9700093 (Attachment ./A) dated January 16, 1997, klP sold a total of 6.300,000 kg of Austrian summer brewing barley 1996, single-variety Maresi, loose by TADS wagons at a price of S225, - per 100 kg (with regard to the amount of 4,800 tons to be delivered from the contract attachment ./A in the months of March to June 1997, the price on the "basis reimbursement of ECU 28.99" should change accordingly for / against) for the dates January / February 1997 with regard to the amount of 1,500,000 kg (contract attachment ./B) and March-June 1997 with regard to the amount of 4,800,000 kg (contract attachment ./A), in each case according to the purchaser's disposition with weight offsetting "according to the waybill at Departure final "and parity" DAF Lichkov-Miedzylesie or Zebrzydowice ". With regard to the quality of the goods, it was agreed: "Healthy, customary in the trade, at least 90% over 2.5 mm, max 15% moisture, germination at least 95%, stocking max 29%, protein base 11.5% max 12%, quality final It SGS Certificate ".

Both contracts were based on the practices of the stock exchange for agricultural products in Vienna and the seller's "General Terms and Conditions" printed on the reverse, which provide for the application of Austrian law in section 11. In the event of a dispute, the two contracting parties submitted to the decision of the arbitration tribunal of the Stock Exchange for Agricultural Products in Vienna (according to the introductory sentence of the contract text). In their point 4, the general terms and conditions of the seller read: "The withholding and offsetting of due claims due to counterclaims of our contractual partner not expressly recognized in writing by us is not permitted, not even from the title of the guarantee". Point 9 of these terms and conditions reads: "Warranty and liability: If the goods do not meet the contract conditions, the same is to be accepted with the reduced value to be determined by the competent arbitral tribunal.

Payment should be made by irrevocable and confirmed letter of credit for each 500 tons.

Kl P delivered 200 tons to bekl P in January of this year and a further 300 tons of summer brewing barley in February of this year and used the bank credit for this.

II. Submissions:

In its lawsuit filed on April 28, 1997, kl P claims that defendant P rejected the further purchase of the summer brewing barley it had bought on the incorrect grounds that the quality of the goods was poor, and finally with a letter of April 7, 1997 (Enclosure ./C) have declared their "waiver" ("on any deliveries"). However, the quality deficiency had a time limit and was therefore rejected. Because of the breach of contract by the complainant P, protests were made in good time (enclosures ./D and ./E). The complainant only attempted, with its complaint about the goods, to achieve a price reduction for the quantities not yet delivered, because it had seen the opportunity to buy from a third party for the price of S 2,100 per tonne; They also propose this price to KL P to correct the contract. The groundlessness of the quality deficiency caused by the complainant results from the certificates of SGS Austria ControllCo GesmbH of January 28, 1997 (enclosures ./G and ./H) and of February 24, 1997 (enclosures ./I) as well as the investigation report of the Austrian Beverage Institute of April 3, 1997 (Enclosure ./J). In a conversation between the parties on April 16, 1997, defendant P stated that she wanted to consider whether she would accept the goods that had not yet been delivered, but did so by letter of April 21, 1997 (enclosure ./F) she declares that she is no longer bound by the treaty. For reasons of "extreme caution" the kl P withdraw from the contract. Because of the breach of contract by the complainant P, the kl P is entitled to claim damages from the complainant P in accordance with the customs of the stock exchange for agricultural products in Vienna (Parr. 50ff) in accordance with the "loss of profit" in the following summary desire:

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To do this, go to the side dishes. / K and T 1-T 18 referenced. As an alternative, the kl P relies on the establishment of its claim for damages in accordance with Par. 51 Paragraph 2 lit d of the "Usages".

Her damage amounts to at least S 711,256, - ​​which she owed to reimburse the complainant P including 10% interest since May 1, 1997.

The amount of the interest request is based on point 5 of the General Terms and Conditions, which sets the interest rate at at least 5% above the respective National Bank interest rate.

III. Defendant Submissions:

Defendant P applied for the claim to be dismissed and submitted the following:

Even before the contracts were concluded, she informed kl P that the samples sent did not correspond to the contractual conditions provided for. However, the kl P had assured that the quality of the goods to be delivered would correspond to the terms of the contract. In fact, the barley then delivered did not meet the agreed quality. As a result of the quality defects of the brewing barley, complain P lost customers for whom these goods were intended and only for this reason directed the request for a price reduction to KL P. In order not to lose a customer who did not take the defective goods that had been delivered by kl P, bekl P bought 100 tons of brewing barley from RWA in Austria. The quality defects were immediately reported to kl P and complained about. Although the kl P had been requested, by telex and telephone, to send a person to the unloading station in Poland in order to be present when samples were taken, no one was sent there by the kl P. Therefore, the complainant P had the physical inspection carried out by a specially appointed person. It was about Ms. Jolanta Witkowska, who works as a model puller for the Polish institute PISiPAR. On March 4th, 1997, at the Strzegom train station, she took samples of the brewing barley that KL P had delivered. The analysis result is presented in Appendix ./30 from the Central Inspection Laboratory for Standardization. The kl P did not react correctly to the timely notification of defects by the complain P; in this regard, refer the complainant P to Parr. 56 a and 56b of the customs of the Vienna Product Market. She herself acted within the meaning of this provision by calling in her own experts.

The defendant P suffered financial losses from the deficiency of the brewing barley supplied, because it had to and had to resell the first delivery of 300 tons with a loss of S 19,200 and the second delivery of 200 tons with a loss of S 23,400 suffered a loss of earnings of S 846,800.00 from the further deliveries that were not made. Your total damage is thus S 889.400, - and this is asserted against the claim.

IV. Response from the plaintiff:

The kl P disputed the accuracy of the submission of the complain P, insofar as this contradicted the submission of the complaint, and referred to point 4 of their general terms and conditions (set-off date) with regard to the counterclaims asserted.

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VI. Substantive law applicable to the dispute:

In the clause of both contracts introducing the text of the contract, the "Usages of the stock exchange for agricultural products in Vienna" and "the conditions below and overleaf" are listed as the basis of the contracts and point 11 of the "General Terms and Conditions" of kl Under the title "Jurisdiction", P stipulates that the arbitral tribunal agreed as having jurisdiction "must apply Austrian law". There is thus a choice of law agreement between the contracting parties regarding the law of obligations to be applied to their contractual relationship ("debt statute", cf. Schwimann in Rummel, ABGB2, margin no. 2 before Par. 35 IPRG), which according to the prevailing view is the submission of the contracting partner through general terms and conditions provided that is given here - can effectively take place (Schwimann, op. cit. para. 35 IPRG), and in view of the foreign relationship of the sales contracts (= the bekl P as buyer has its place of business in Poland within the meaning of Par. 36 IPRG) in According to Par. 35 Paragraph 1 PILA leads to the application of Austrian substantive law to this dispute; a result that would have been brought about without this agreement also according to Par. 36 IPRG, because according to this norm in sales contracts the material law of the state in which the seller has his place of business as debtor of the "characteristic performance" from the contract is decisive and the kl is based in Austria. Both Austria and Poland are contracting states of the United Nations Convention on Contracts for the International Movement of Goods (UN Sales Convention, also known as "Vienna Sales Law"), which came into force on April 11, 1980. It came into force for Austria on January 1, 1989 and for Poland came into effect on 1.6.1996 and applies to contracts for the sale of goods between parties who have their place of business in different states, if these states are contracting states of the UN sales law or if the rules of international private law lead to the application of the law of a contracting state (Art 1 of the Convention ).

In the present case, this "autonomous connection" of the contracting state status of the countries of establishment of the contracting parties (Austria and Poland) in accordance with Art. 1 lit a of the Convention already determines its scope for the present legal case, but there is also the otherwise subsidiary indirect connection ("preliminary solution" according to Art 1 lit b), because according to the relevant Austrian international private law (IPRG) this Convention is to be applied, as already explained, and the relevant Austrian substantive law undoubtedly also includes the law of the UN Sales Convention. The wording in point 11 of the general terms and conditions of the kl P that "Austrian law is to be applied" accordingly also includes the UN sales law. There is no complete exclusion of the validity of the UN Sales Convention, which is permissible according to Art 6 UN Sales Convention, so that this is to be applied in the present legal case insofar as individual, ie "negotiated" by the parties, and general, ie in the general terms and conditions of the kl P, as well as regulations of the "usages" expressly included in the two contracts (provisions for business transactions on the stock exchange for agricultural products in Vienna) are available. This question will be answered by the arbitral tribunal in the following, insofar as it is necessary for the decision of the dispute.

VII. Presentation and answers to the specific legal questions relevant to the decision in the present legal dispute:

1. The subject of the action is a claim for damages by kl P against defendant P, which is based on "breach of contract" within the meaning of Parr. 50ff of the "usages" of the stock exchange for agricultural products in Vienna by the bekl P was founded in two ways: After delivery of two partial quantities of brewing barley with a total weight of 500 tons, it is undisputed that the bekl P has the reason for the delivered goods was inadequate, the acceptance of further deliveries of goods was rejected and their "waiver" of further deliveries declared; However, it also has the kl P after protesting in accordance with Par. 50 Paragraph 1 and Paragraph 2 of the "Usages" and setting a grace period for the fulfillment of the contract of 8 days (Par P pronounced the withdrawal from the contract on further deliveries of goods "for reasons of extreme caution".

1.1 In this situation, it must first be checked whether the complainant P, as the buyer of the brewing barley, has the right under the law applicable to the two purchase contracts due to the alleged quality deficiency of the already delivered partial quantities of a total of 500 tons of the goods in the event of the correctness of their complaint to cancel the contract with regard to the further partial quantities that have not yet been delivered and for the most part also not yet available for retrieval and acceptance.

1.2 Neither the negotiated text of the contract nor the "usages" give an answer to this question, so that the UN sales law with its relevant regulations is to be used. Such are contained in Articles 72 and 73, both of which provide for the anticipated (i.e. anticipated) breach of contract as a reason for cancellation of the contract, whereby Article 73 specifically for successive delivery contracts includes the cancellation of the contract due to concerns about a future major breach of contract for the not yet performed partial deliveries due to a major breach of contract that has already occurred Already made partial deliveries enables as a basis for forecasting.In the opinion of the arbitral tribunal, the two contracts of the parties form an economic unit insofar as they provide for the successive delivery of goods of the same quality in partial quantities in the period from January to June 1997 under the same legal conditions - with slightly different payment conditions - and were agreed on the same day . It is therefore advisable to regard these two contracts as a contractual unit, which in truth covers a total amount of malting barley as an object of purchase, and therefore to the regulation made for successive delivery contracts within the meaning of Article 73 of the UN Sales Convention with regard to the partial quantities that have not yet been delivered assume.

Art 73 para 2 UN sales law reads:

"If the non-fulfillment of an obligation concerning a partial delivery by one of the parties to the other party has good reason to believe that a material breach of contract with regard to future partial deliveries is to be expected, the other party can cancel the contract for the future within a reasonable period of time to explain."

If, as the complainant P claimed, the brewing barley that has already been delivered actually had a defect in terms of its quality that was contrary to the contract, then this would have to be attributed to kl P as a significant breach of contract within the meaning of the definition of Art 25 UN sales law, because then the bekl P has essentially missed what she should have expected under the contract, namely brewing barley of the agreed quality. Such a breach of duty, if it should be accepted as proven, could, in the opinion of the arbitral tribunal, in particular with regard to the fact that it should have been present in the case of two partial deliveries, and nevertheless the seller's concern about the already proven defect in the partial deliveries that have already been made will also adhere to the further partial deliveries, has not been invalidated by adequate explanations and measures with a corresponding probability, a "good reason to assume" that the same or essentially similar quality defects will also be found in the future partial deliveries for the complainant P. According to the prevailing opinion in the literature on UN sales law, a less strict standard should be applied to the degree of probability with which the same material breaches of contract are to be expected in future partial deliveries after the previous breaches of duty than in the case of Art 72 UN sales law is required (Honsell, margin no.50 to Art 73), which regulates the anticipated breach of contract in the case of other than successive delivery contracts. In general, an "obvious assumption" or "plausible reasons" are given, but the view is also occasionally taken that the future breach of contract "must be expected" (cf. in detail the evidence cited by Honsell, loc. Cit. 50).

Honsell (op. Cit. 51) is of the opinion that the term "valid reason" presupposes the lowest degree of probability for the assumption of a future breach of contract, it is sufficient if, based on the causes identified, there is an "overwhelming probability" of a lack of performance in the future Partial deliveries are to be accepted. This view is also taken by the judging arbitral tribunal, which takes into account the impairment of trust in the correct performance of the contract by the seller, which has regularly occurred as a result of bad deliveries already made to the buyer, whose task it would be to alleviate these concerns of his contractual partner with sufficient explanations and measures invalidate, for example by proving that the goods to be delivered in the future will come from a different source (other producer, other dealer, different silo filling, etc.), so that the same defects are not to be feared.

The burden of assertion and proof for those facts which, with sufficient probability, lead to the assumption of future material breaches of contract in the case of further partial deliveries ("valid reason"), applies according to general rules to those who invoke this fact as a reason for the termination of the contract; in the present case, therefore, the complainant P as buyer.

It would then be up to the kl P as the seller to assert and prove those facts that refute this assumption, i.e. the certified basis for the prognosis.

1.3 In this context, the arbitral tribunal also has to deal with the legal question of whether at most - as apparently the kl P wants to express with its objection to the limitation of the quality defects of the already delivered partial quantities of the goods - the UN sales law in Art 39 and 43 Paragraph 1 of the failure of timely notification of defects for the buyer as well as the loss of the right to request the cancellation of the contract with regard to the not yet delivered partial quantities of the goods in accordance with Article 73 Paragraph 2 of the UN Sales Convention.

The arbitral tribunal came to the following conclusion: Article 43, Paragraph 1 of the UN Convention on Contracts for the International Sale of Goods cannot be assumed because it only refers to Articles 41 (freedom of goods from legal defects) and 42 (freedom of goods from third-party industrial property rights) is turned off and the buyer only cuts off the appeal to these articles.

In other words: this right is not denied to the buyer by the failure of the timely notification of defects with regard to partial quantities already delivered by the UN sales law.

1.4 As an interim result, it should be noted that the complainant P is not prevented from using the legal remedy to seek cancellation of the contract with regard to the partial quantities of the brewing barley it has bought from kl P that have not yet been delivered.

1.5 The answer to the legally relevant factual question, whether the partial quantities of brewing barley already delivered by kl P corresponded to the agreement in terms of quality or were inadequate, depends on the outcome of the evidence proceedings. It cannot be said that the contractual clause relating to the required quality of the goods: "final according to SGS certificate" has the legal effect of excluding counter-evidence by the buyer of the goods, as can be inferred from the relevant submissions of kl P. Rather, in the opinion of the arbitral tribunal, this merely shifts the burden of assertion and proof to the buyer of the goods insofar as she has to assert and also prove the incorrectness of this certificate from SGS Austria Controll-Co GmbH. It should not be disregarded that the defendant P declared in this legal dispute in the course of the oral hearing on the lawsuit on September 16, 1997 (page 4 of the minutes of September 16, 1997, ON 13), "that they are not the I dispute the correctness of the certificates submitted by kl P (enclosures ./G, ./H and ./I), but rather claim that the quality of the goods at the time they were received by bekl P was not perfect ". The arbitral tribunal therefore initially assumed that the defendant P alleged defects that only occurred after the transfer of risk at the transport to the destination of the goods (Article 68 of the UN Sales Convention). Only from the correspondence of the parties from the time before the start of the legal dispute and from the documents submitted by defendant P, in particular those declaring the results of the Polish investigation (Enclosures ./21-29), did it emerge that in truth only such defects are alleged which should have been attached to the goods at the time they were dispatched if they were to be accepted as proven. Therefore, the evidence procedure on the quality of the goods was approved for the purpose of providing evidence of the incorrectness of the existing certificates of SGS Austria Controll-Co GmbH, concerning the partial quantities of 500 tons of brewing barley that have already been delivered, Enclosure ./G, ./H and ./I ​​to enable. In order to check the correctness of the random samples taken from the partial quantities supplied and their testing by SGS Austria Controll-Co GmbH, the arbitral tribunal officially appointed the inspectors Erich T. and Maria P. involved as well as the quality control employee Rosemarie K. questioned as a witness. The evidence obtained therefrom will be presented later.

1.6 In the event that the complainant P should not have succeeded in proving the inaccuracy of the quality certificates, so that they would not have had the right to request cancellation of the contract in accordance with Art kl P has the right to demand the cancellation of the contract due to the refusal of the complainant to take over the purchased goods; As already explained above, it had already declared in the lawsuit for this reason - which it qualified as a "breach of contract" in the sense of "usages" - ("for reasons of extreme caution") to withdraw from the contract.

Neither the contracts of the parties, including the terms and conditions of the kl P, nor the "usages" of the stock exchange for agricultural products in Vienna provide for the seller the right to withdraw from the contract in the event of the buyer refusing to accept (in the terminology of the UN- Sales law: "Cancellation of the contract" to covet). This is obviously because the ABGB as well as the HGB and the "usages" are foreign to the refusal of acceptance as a debtor default and the associated conclusion that, if there is no other special reason for obligation for the buyer, it is a case of creditor default, for which legal consequences other than withdrawal from the contract are intended, is understandable. However, the UN Sales Convention regulates it differently: Art 60 sees the acceptance of the purchased goods through their acceptance (lit b) and the contractually stipulated retrieval of the same (lit a) as a debtor's obligation and gives the seller, among other things, the legal remedy to cancel the contract in accordance with Art 64 para 1 lit b to request; In this case, the seller does not need to set the buyer a further grace period if the buyer has declared that he no longer wishes to fulfill the contract (Karollus, UN Sales Law, 1979; Reinhart, UN Sales Law, margin no. 4 to Art 64). Setting a grace period would be pointless in such a case. However, it is undisputed that in this case the kl P of the complainant P set a grace period of 8 days in their protests of 7.4.1997, enclosures ./D and ./E (with reference to Par. 51 no. 1 of the "Usancen" whose applicability appears questionable here because at the time of its entry into force on December 1, 1966, the buyer's default of creditors was seen in the refusal to accept and this was a general legal view that was only changed by the UN sales law for its area of ​​application).

As a result, it can therefore be stated that in the case of the denial of the right of the complainant P to seek the cancellation of the contract in accordance with Art 73 para 2 UN sales law, the kl P was entitled to conclude the two contracts in accordance with Art 64 para 1 lit b UN sales law To bring about cancellation, and as a result also to demand compensation. This of course is to be preferred according to the relevant UN law, because the provisions of the "Usages" of the stock exchange for agricultural products in Vienna (Par. 51 Z 2 lit b. C or d ).

In addition, the necessary determinations will have to be made if the prerequisites for this are considered to be given.

In this case, the interest request of the kl P would have to be agreed as an ancillary claim to the claim for damages. The general terms and conditions of the kl P, which are primarily to be assessed as part of the contract, see under point "5. Default in payment" in the event of default by the buyer "with the payment of the purchase note or any other payment to be made on the basis of this final letter" (sentence 1) Payment of "interest at least 5% above the respective National Bank rate of interest", and KL P invokes this interest rate, but asks for 10%, although the Oesterreichische Nationalbank's discount rate has remained unchanged at 2.5% since April 19, 1996 so that the interest request would only be justified with 7.5% in terms of the amount and the additional request would therefore have to be rejected (cf. the last publication in "Statistical Monthly Bulletin of the Oesterreichische Nationalbank", Issue 9/1997, page 74). Neither the text of the negotiated contracts, nor that of the general terms and conditions, nor that of the "usages" say anything about the point in time from which this interest is to be paid. According to the general opinion, the UN Sales Convention includes the obligation to pay interest, which is only generally stated there, for default in payment of the purchase price or any other amount due (Art 78) as an obligation to pay interest on arrears, which occurs when a claim for damages is due (Art 74; cf. Karollus, loc. cit. 226f). In its lawsuit, which it submitted to the arbitral tribunal on April 28, 1997, kl P made the claim for damages due and demanded default interest as of May 1, 1997. Insofar as her claim for damages should prove to be justified, she will be awarded 7.5% interest from May 1, 1997 from this date and the additional claim will have to be rejected.

1.7 In the event that the claim should prove to be justified, the question must also be examined to this extent whether the complainant P has the right to claim the counterclaims it claims for damages - they are based on the alleged quality defects of the already delivered partial quantities of the purchased goods and based on what they consider to be a justified withdrawal from the contract (according to Art 93 para 2 UN law) - to be offset against this.

Point 4 of the general terms and conditions of kl P excludes the counter-set-off of counterclaims not expressly recognized by it in writing, including those arising from the title of warranty.

Such a prohibition of set-off is generally recognized as effective in Austrian law (Rummel in Rummel, ABGB2, margin no. 29 to Paragraph 1440 mwN), unless the counterclaim has already been recognized or judicially determined.

Since these prerequisites are not met, the offsetting application of the complainant P must be rejected according to the contractual prohibition of offsetting (Fasching, civil procedure law2, margin no. 1293).

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IX. Legal conclusion regarding the mutually declared cancellation of the contract:

1. The request for cancellation of the contract by the complainant P in accordance with Art. 73, Paragraph 2 of the UN Sales Convention is not justified, so that it was still obliged to meet its obligation to continuously call off and accept the partial quantities of a total of 5,800 tons of brewing barley not yet delivered at that time. However, their declared refusal to call up and accept the purchased quantity of goods is to be assessed as a major breach of contract, which entitles KL P to cancel both contracts in accordance with Article 64 (1) (b) of the UN Sales Convention and from the complainant P including damages covet lost profit; this is of course based on the provisions of the "Usages" of the stock exchange for agricultural products in Vienna (Par. 51 Z 2 lit b. c or d) which suppress the relevant UN sales law as a result of the direct contract reference.

The kl P has expressly raised the allegedly lost profit as the subject of its claim for damages. Article 74 of the UN Convention on Contracts for the International Sale of Goods expressly provides for such a claim, but includes the interest in performance as an equally substitutable consequence of the essential breach of contract (Karollus, loc. Cit. 214), which also includes the concept of "lost benefit" in Par "Usages" of this exchange is to be equated. Accordingly, this legal term must be applied in accordance with Austrian case law and teaching on lost profit in the sense of Par. 1293 ABGB.

2. Loss of profit exists if the occurrence of an increase in assets is prevented, i.e. an acquisition opportunity has been destroyed; this leads to a reduction in sales for the injured party because profitable sales of the goods were thwarted. If such an opportunity has been destroyed, it is viewed as an independent asset from which the protectable right arises to demand what was to be expected in the ordinary course of things (Koziol, Österreichisches Haftpflichtrecht2 I 16f with further references; Reischauer in Rummel , loc. cit. margin no.12 to Par. 1293 ABGB with further references).

3. The kl P has calculated its lost profit in such a way that it, broken down in 18 tables, compared the constant contract sales price of 2250 S / to the production costs for the months January-June 1997 and estimated the respective export reimbursement in ECU, so that it calculated "loss of earnings" or its "margin" results from the difference between the sales price and the prime costs minus the EU export refund.

4. Bekl P did not issue a substantial declaration of objection to these calculations and their actual basis, so that, in the absence of objections by the arbitral tribunal to the stated purchase prices, which corresponded to the Austrian domestic market situation at the time, the correctness of the information in this regard can be assumed.

5. When it comes to the question of the amount of the EU export reimbursement amounts in ECU, the duty of the arbitral tribunal applies to check the correctness ex officio.

Proceeding from the correct underlying production cost information from kl P, the following calculation of the export reimbursement amounts in ECU / ton results with regard to the export licenses issued by the European Community, Regulation EEC 1144/96 of June 25, 1996, which were officially procured by the arbitral tribunal the relevant period from January 1997 to June 1997:

a) The export license AT No. 006474 issued on January 20, 1997 for 1500 t "barley other than for sowing" with the last day of validity May 31, 1997 set the basic export refund at 28.49 ECU / t.
b) The export license AT No. 018153 issued on 01/30/1997 for 1500 tons of "barley other than for sowing" with the last date of May 31st, 1997 set the basic export refund at 27.49 ECU / t.
c) The export license FR No. X 44398 issued on 29.4.1997 for 1904 tons "Barley other than for sowing" with the last date of validity 31.5. In 1997 the basic export refund was set at ECU 27.98 per tonne.
d) The export license FR No. 44402 issued on 5.5.1997 for 1904 tons "barley other than for sowing" with the last valid date 31.5.1997 set the basic export refund at 27.89 ECU / t.

According to Council Regulation (EC) No. 1576/96 of July 30th, 1996 setting the monthly surcharges on grain prices for the 1996/97 marketing year (Official Journal of the EC No. L 206/3), the intervention price increases by 1 per month, 1 ECU / t, so that the rate of the basic export refund added in the individual export licenses must be increased by 1.1 ECU / t in the following months of the actual export up to the month of the last day of the license's validity.

8. For the remaining contractual amount of 1200 tons of brewing barley to be delivered in the course of June 1997, the tendering of export refunds had been suspended, so that the KL P, had it actually - fictitiously assumed the further validity of the delivery contract - brought the remaining contractual amount for delivery in that month , could not have received any export refunds. All of their export licenses were therefore limited in their validity as of May 31, 1997.

Since the failure of the export refund in June 1997 was clearly not considered by the contracting parties when the contract was concluded, but the export refund was based on the price agreed in the contract Annex ./B - as can be seen from the corresponding clause, there is also no agreement between the parties as to what should be legal in this case. There is therefore a real loophole in the contract that needs to be closed. The "usages" of this exchange, which are initially to be applied, do not deal with this problem either, so that the UN sales law has to be questioned again, which apparently does not give a direct answer to whether and under what conditions the court has to close contractual loopholes (cf. F. Bydlinski in Doralt, UN Sales Law, 77). Art 8 UN Sales Convention deals with the interpretation of the subjective declarations and the subjective behavior of the contracting parties and requires the application of objective standards, namely as "a reasonable person of the same kind as the other party", i.e. a fictitious recipient of the declaration, would have understood. Such an objective standard is, of course, also generally used in genuine contract amendments for the purpose of closing gaps. In the opinion of the arbitral tribunal, however, this is not about the question of the interpretation of declarations and behavior of a contracting party, but about the lack of an expression of will of whatever kind (declaration or other behavior) answering the relevant question. Art 9 of the UN Sales Convention refers to the amendment to the contract through customs between the parties or through recognized commercial customs and also leaves the question unanswered as to whether an amendment of sales contracts by the court with what reasonable and honest contracting parties would have agreed is permissible under this law or whether the substantive law that is subsidiary to the relevant international private law - in this case Austrian law - has to rule on this.

The arbitral tribunal is of the opinion that, according to the current state of the practical application of the UN Sales Convention by the courts of the contracting states, there is no clarity as to whether this law itself provides for the supplementary interpretation of the contract, and is therefore of the opinion that this should be done specifically according to the rules of National property law governed by international private law is to be applied, in this case Austrian law.

On the basis of the prevailing view in Austrian doctrine and jurisprudence (see Koziol / Welser, Grundriß des bürgerlichen Rechts I10, 92 mwN in FN 39 and 40), with consideration of the contractual purpose pursued by the parties, the question must be asked which solution is reasonable and honest contracting parties for the case outlined above, but which they apparently did not consider when the contract was concluded. If parties of this kind had thought of the elimination of execution reimbursement amounts in the last month of the planned partial deliveries by order of the responsible EU authority, then they would have in the interest of maintaining the successive delivery contract also with regard to the last partial delivery affected by the measure described on the one hand and a reasonable compensation of the mutual Contractual interests with regard to the delivery and acceptance dates and the time of payment for the purchase price, on the other hand, agreed that for the purpose of obtaining the export refund amounts still possible for the month of May 1997, the last partial delivery should be made in this month, if possible towards the end thereof, but on the other hand the Payment of the purchase price does not occur until the first half of June 1997.

On this basis, the arbitral tribunal also determined the calculation of the loss incurred by kl P from the failure to perform by complain P due to loss of profit.

Source

Published in German:
- & # xd6; Austrian Journal for Comparative Law, 1998, 211-220}}