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| A German buyer concluded a contract at a market fair with a standhostess who worked at the stand of an Italian seller of tiles. After the conclusion of the contract the Italian seller sent an invoice to the buyer. The hostess then collected the price for the goods from the buyer, but did not transfer the payment to seller. After the seller's Italian attorney sent a request for payment to the buyer, the seller commenced action against the buyer for payment of price and for recovery of the attorney's fees as damages. The buyer counterclaimed a discount on the price that had been agreed upon with the standhostess after the conclusion of the contract.
As agency is a matter not falling within the scope of CISG, the Court applied German law to determine whether the standhostess had authority to modify the contract terms after the contract had been concluded and consequently denied the buyer the discount on the price. The Court stated that according to Art. 57(1)(a) and (b) CISG the buyer should have paid the price either at the seller's place of business or at the place where the goods were delivered, neither of which happened. Payment to the standhostess was not a valid payment under CISG. Therefore the buyer was obliged to pay the price to the seller under Art. 53 CISG. Moreover, the buyer who has engaged a third person for payment bears the risk that the seller does not receive the payment, when the requirements for exemption from liability set forth in Art. 79 CISG are not met, as in the case at hand. The seller was awarded interest on the price (Art. 78 CISG). As to the applicable interest rate, the Court considered this to be a question governed by CISG but not expressly settled in it (Art. 7(2) CISG). According to German private international law rules it applied the Italian statutory rate, being Italian law the law otherwise applicable to the contract. A higher interest rate as further damages was not awarded since the seller did not provide sufficient evidence of recourse to bank loans. The Court did not award the seller recovery of the cost it incurred by hiring an Italian attorney for making a pre-trail demand for payment as, by doing so, the seller violated its duty to mitigate the loss (Art. 77 CISG). The Court held that the cost of a pre-trail demand for payment would have been included in the attorney's fees of the seller's German attorney and that it would have been reasonably possible for the seller's German attorney, who then filed the suit in the German Court, to demand payment from the buyer. |