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| Abstract | ||||||||||||||||||
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| A German and a French company entered into a so called 'dealer agreement' according to which the French company would distribute the German company's products in France. The contract contained, inter alia, provisions relating to the mode of payment of the goods delivered to the French company, as well as a choice of law clause in favor of German law. Pursuant to the agreement, the French company ('the buyer') ordered fitness devices from the German company ('the seller'). Since part of the purchase price remained unpaid, the seller commenced an action to recover the price and damages. The buyer counterclaimed, alleging that the German Court had no jurisdiction to hear the case.
In order to determine whether it had jurisdiction, the Court applied Art. 5(1) of the EC Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters (Brussels 1968), which states that a person domiciled in a Contracting State may be sued in the Court for the place of performance of the obligation in question (in the case at hand: the payment of the price). The Court held that CISG is applicable to each separate contract of sale concluded under the 'dealer agreement'. The place of payment had to be determined according to CISG, applicable since the parties had expressly chosen the law of Germany, a contracting State. In the absence of a contrary agreement between the parties, payment of the price was to be made at the seller's place of business (Art. 57(1)(a) CISG), which was in Germany. The Court excluded that by stipulating that payment is to be made through an irrevocable letter of credit or, alternatively, by cheque, the parties intended to impliedly derogate from the place of payment as provided for by Art. 57(1)(a) CISG. Therefore, the Court affirmed its jurisdiction and found the seller entitled to recover the purchase price and interests (Art. 78 CISG). |