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| Abstract | ||||||||||||||||||
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| A Swedish company invited a German company to make an offer for the sale of certain products (screws). The German company answered by filling in the price and time of delivery for each item in the document sent by the Swedish company. An order was then sent by the Swedish company, which referred also to items not mentioned in the previous correspondence between the parties. The German company replied accepting the order but insisting on advance payment or the opening of a letter of credit. The Swedish company then requested a pro-forma invoice which the German company provided by listing all articles ordered together with the indication of prices referring to a lower quality of screws. The Swedish company replied, requesting items of the higher quality it had indicated in the order, for the lower price offered in the pro-forma invoice. After a further exchange of correspondence, the Swedish company commenced an action claiming either delivery or damages.
The Court held CISG applicable (Art. 1(1)(a) CISG), and dismissed the Swedish company's claim on the ground that no contract had been validly concluded between the parties. In the opinion of the Court, under both German domestic law and CISG (Art. 19(1) CISG), the Swedish company's order constituted a rejection of the German company's offer, since it modified it by requesting inter alia items not mentioned in the offer. A modified acceptance constitutes a counter-offer when it is sufficiently definite as to quality and price of the goods (Art. 14(1) CISG, again corresponding to German domestic law). In the case at hand the Court held that the counter-offer was not sufficiently definite, as the price of some of the items ordered was neither expressly nor implicitly indicated, and no provisions for determining it had been made. Nor had a contract been concluded subsequently, since the Swedish company had clearly rejected the German company's proposal contained in the pro-forma invoice. Without making any further reference to CISG, the Court held that the buyer was not entitled to rely on remedies for precontractual liability arising from the breaking off of negotiations on the part of the seller. Such a liability would only arise when the circumstances of the case showed that the non-breaching party relied on the conclusion of the contract (in particular, when the breaching party gave the other party good reasons to believe that a contract would certainly be concluded, or when the breaching party caused the other party to perform in advance, or if the agreement had already been partially executed by the parties). |