Case 607: CISG 8 (1); 8 (2); 31
Germany: Oberlandesgericht Kِln
16 U22/01
16 July 2001
Original in German

Published in English: http://cisgw3.law.pace.edu/cases/010716g1.html

A Belgian seller and a German buyer concluded an oral contract for the sale of
animals. The animals were to be delivered ‘free farm’. When a dispute arose, the
buyer brought suit in Germany. The court of first instance, applying the Brussels
Convention (i.e. the Convention on Jurisdiction and the Enforcement of Judgements
in Civil and Commercial Matters, 27 September 1968) to which both Germany and
Belgium were parties, concluded that it had no jurisdiction over the claim.

The court of appeal upheld the decision of the lower court. The court analysed the
concept of international jurisdiction and the relevance of article 5 (1) of the Brussels
Convention to the case. The article states that, in matters relating to a contract, the
place of performance of the obligation in question is relevant to determine the
jurisdiction of the court. In the case examined by the court, the obligation “in
question” was the seller’s obligation to deliver the goods and the place of
performance was to be determined by the law governing the contract. In order to
ascertain the law of the contract the rules of private international law of the forum
were to be applied: i.e. German private international law. Since in the specific case
both Germany and Belgium were parties to the CISG, this latter would prevail over
the German Code of Private International Law.

The CISG, however, leaves the determination of the place of performance primarily
to the parties: article 31 of the Convention, which determines the place of
“delivery”, in fact applies only if the parties have not stipulated otherwise. In the
case examined, the court of appeal held that there was no evidence of an agreement
of the parties as to the place of delivery.

As a matter of fact, though the parties had agreed on a delivery “free farm”, the
court considered that there were insufficient grounds to infer the parties’ subjective
intent, according to the criteria set forth in article 8 (1) CISG. The court resorted
then to the objective criteria provided for in article 8 (2) CISG according to which
“statements and other conducts of a party are to be interpreted according to the
understanding that a reasonable person would have under the same circumstances”.
In this regard, the court noted that in the prevailing opinion the similar clause “free
house” does not have an unequivocal meaning in trade, but is to be interpreted
following the circumstances of each case. However, in the case at hand the court
found that no objective criteria could help determining the place of delivery.

Thus the court reverted to the general principles of article 31 CISG. Though this
provision addresses three different cases for which different rules apply, the general
rule appears to be that the seller’s place of business is preferred as the regular place
of performance. Consequently, the court concluded that the clause “free farm”
included in the agreement was not meant to determine the place of delivery, but
merely to allocate the cost of transportation to the seller. Accordingly, the
requirements of article 5 (1) Brussels Convention were not met and the court of first
instance had correctly declared its lack of jurisdiction over the case.



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