Case number: 130
Article number: sales convention / 72; 74; 75; 77
Thessaurs issue:
Country of decision: Germany
Year of decision: 1994
Type of decision: Judicial decision

Case 130: CISG 72; 74; 75; 77
Germany: Oberlandesgericht Dsseldorf; 17 U 146/93 14 January 1994
Unpublished

The defendant, a German company, ordered 140 pairs of winter shoes from the plaintiff, an Italian shoe manufacturer. After having manufactured the ordered shoes, the plaintiff demanded security for the sales price as the defendant still had other bills to settle with the plaintiff. The defendant, however, did neither pay nor furnish security. Therefore the plaintiff declared the contract avoided and resold the shoes to other retailers: only 21 pairs for the same price as agreed upon with the defendant, 109 pairs for a much lower price, 10 pairs remaining unsold.

The plaintiff demanded compensation for various damages caused by the breach of the contract: (1) compensation for the difference between the contract price and the price in the substitute transactions, (2) the attorney's fees, (3) interest loss of 16,5%, (4) exchange rate loss of 15%, (5) and current interest of 16,5%. The defendant accepted responsibility in general but disputed the extent of damages which it attributed to the plaintiff's failure to resell the shoes in a reasonable manner.

The appellate court held that the plaintiff was entitled to avoid the contract according to article 72 CISG and consequently granted the plaintiff the rights listed in articles 74 and 75 CISG. Accordingly, the plaintiff was allowed to recover the difference between the contract price and the price in the substitute transactions (art. 75 CISG). In addition, the court found that the plaintiff had performed the resale in a reasonable time noting that the plaintiff was not obliged to resell the shoes before the date of avoidance. In the court's view, a resale nearly 2 months after avoidance (avoidance on 7 August, resale on 6 and 15 October) still succeeded within reasonable time and was no breach of the plaintiff's obligation under art. 77 CISG to mitigate the loss. In that regard, the court accepted the plaintiff's argument, who had offered the shoes on the Italian market, that in August most retailers have already filled their stock for the coming season and have no reason to buy more goods for the winter seas
on.

The court also granted the interest loss according to article 74 CISG. The plaintiff argued that it had made use of a bank loan with an interest rate of 16,5%. The court accepted this allegation according to article 287 of the German Civil Procedure Code. However, the plaintiff's claim for attorney's fees was rejected. Although such fees in general could be recovered under article 74 CISG, in the present case this would lead to double compensation as the attorney had demanded his costs already in the special procedure for fixing costs.

The court also rejected the plaintiff's claim for damages to cover the exchange rate loss between the Italian Lira and the German Mark. The court found that there existed no general custom to exchange money paid in the local currency to a foreign one unless this was the claimant's usual practice. As this could not be established, it was held that the plaintiff had not suffered a damage.