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Date: 11.03.1999
Country: Austria
Number: 2 Ob 163/97b
Court: Oberster Gerichtshof
Parties: Unknown
Citation: http://www.unilex.info/case.cfm?id=1128
A German buyer and an Austrian seller entered into a contract for the sale of a certain number of mountain bikes. Prior to the conclusion of the contract, the seller presented the buyer with a model of a “specially milled frame”. During the presentation, the parties discussed about the potential success of a bicycle with that kind of frame in Germany. Subsequently, the buyer placed a purchase order for a certain number of bicycles. After completing the order, however, the buyer found out that the bicycles did not contain the milled frames. The buyer then notified the seller that not conforming bicycles would not be accepted. The seller responded stating that the buyer had never requested milled frame bicycles. The buyer declared the contract terminated and filed a lawsuit against the seller. The buyer submitted that, after the seller’s presentation, it had legitimate expect that the bicycles would contain milled frames. In response, the seller argued that its presentation were only intended to test a potential future market for the goods.

The Court of First Instance dismissed the buyer’s claim. In so doing, it found that, since during negotiations the seller had never promised to deliver milled framed bicycles, the seller could have reasonably relied upon the fact that the buyer wanted to buy only the bicycles requested in the purchase order, where in fact that kind of bicycles had not been mentioned.

The Court of Second Instance overturned the decision. In so doing, it first found that CISG applied because both parties had their places of business in contracting States (Art. 1(a)(1) CISG). As to the merits, the Appellate Court found that the buyer has reasonably expected that the goods ordered conform to the sample presented by the seller and that the terms included in the purchase order did not contradict a request for milled frames because those terms were “neutral.” As a result, the buyer had rightfully terminated the contract on the basis of Arts. 25 CISG and 35(2)(c) CISG.

Finally, the Supreme Court reversed the Appellate Court's decision and remanded the case to the lower court for a new judgement. In so doing, after conforming that CISG applied in the case at hand pursuant to its. Art. 1, the Court stressed the fact that the findings of the First Instance Court relating to the parties' statements and conduct should be analysized in light of Art. 8 CISG.