A German seller and Swiss buyer had been in business relations for many years. As several invoices relating to the delivery of certain components of milking-machines remained unpaid, the seller commenced an action against the buyer for the recovery of the unpaid price. The seller's general conditions of sale referred to German law as the law governing the contract. The buyer never signed the seller's conditions, although in the court proceeding it never objected to the choice of law clause in favor of German law as the governing law of the contract.
The Court held that CISG was not applicable to the contract. It noted that, although there was no evidence of the buyer signing the seller's general conditions of sale, the fact that it made no objection in the court proceeding to the choice of law clause led to the conclusion that the choice of law clause was to be upheld. The Court, however, without referring directly to Art. 6 CISG, interpreted the choice of law clause in the sense that it was the common intention of the parties to apply only the German civil code (BGB) rules to the contract, and not CISG, the German civil code being the only law familiar to the plaintiff (i.e. the German seller). |