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| A German buyer ordered over the telephone goods from a French seller. The conditions of delivery of the seller were 'franco domicile' ('frei Haus'), 'duty paid' ('verzollt'), 'non taxed' ('unversteuert'). The seller appointed a carrier for delivery of the goods. However the buyer failed to pay the price and denied that it had ever received the goods. The seller claimed payment of the price. As evidence of delivery of the goods the seller produced a delivery note on which the buyer had put a 'goods received' stamp ('Wareneingangsstempel') but without any signature of the buyer.
The court held that the contract was governed by CISG, as the German private international law rules led to the application of the law of France, a contracting State (Art. 1(1)(b) CISG). The court held that the seller was not entitled to payment. In order to reach this conclusion the court had to establish whether risk for the goods had passed to the buyer (Arts. 66 and 67 CISG). The court held that the term 'franco domicile' covered not only the cost of delivery but also the passing of risk, so that the risk passed on to the buyer only upon delivery of the goods at its place of business. Therefore the parties had implicitly derogated from Arts. 31(a) and 67(1) CISG concerning the passing of risk in contracts involving carriage of goods (Art. 6 CISG). In reaching this conclusion, the court interpreted the term 'franco domicile' according to the understanding that a reasonable person would have had in the same circumstances (Art. 8(2) CISG). In the court's opinion, a buyer entitled to the delivery of goods 'franco domicile' would not worry about transportation and insurance of the goods; whatsmore the seller had insured the goods for transportation; finally the seller had often used its own transportation means in previous dealings with the same buyer. The seller did not give evidence of delivery of the goods (the simple stamp without any signature of the buyer was held not to be sufficient evidence). The court therefore dismissed the seller's claim. |