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Date:   5 March 2010
Court:   Tallinn Circuit Court
Local case reference:   2-08-67305
CISG Nordic ID:   100305EE
Country of decision:   Estonia
Buyer's country:   United Kingdom
Seller's country:   Estonia
Goods involved:   Peat
Case history:   The judgment is made by the court of second instance (court of appeal). Judgment of the court of first instance was given on 03.04.2009 by the Harju County Court who did not satisfy the claim. Appeal was filed by the Buyer.
Original language:   Estonian
Provisions cited:   CISG articles 11, 14, 15, 18
Original court document:   Available
Rapporteur:   Aleksandra Vasiljeva, Gea Lepik and the University of Tartu
Case citations:   n/a

 

Abstract

by Gea Lepik and the University of Tartu


A UK company Allied General Trading Ltd (the Buyer) filed a claim against an Estonian company AS MIKSKAAR (the Seller) based on a contract No 4-1/049 (the Contract) allegedly concluded by the parties in 2006 for the sale and delivery of white and brown peat. The Contract was a frame contract for initially a one year period but automatically prolonging for another year unless stated otherwise by one of the parties. It set the prices for white and brown peat to be sold from the Seller to the Buyer and regulated among other matters the conditions for delivery of the goods.
On 26.10.2007 the Seller notified the Buyer that he was not able to sell to the Buyer any white peat and that there were probems with selling brown peat also. The Buyer had to buy peat from other sellers for a higher price und thus suffered financial loss. In addition, as some of the substitute sellers only agreed to deliver the peat to harbours which were futher away from the destination of the goods than the port which was agreed in the Contract, the Buyer incurred additional costs of transportation. The Buyer also claimed compensation for a contingency fee. In total, the alleged damage suffered by the Buyer was 169 484.15 EUR.
The Seller did not accept the claims and claimed that the Contract had not been concluded by the parties. On 08.12.2006 the Seller had sent to the Buyer a signed Contract proposal for the conclusion of a frame-contract No 4-1/049 but had not received a signed Contract back from the Buyer. Although the Seller had sold peat to the Buyer in September 2007, this was done under a separate contract No 4-1/054 concluded pursuant to an individual order made by the Buyer in September 2007 and thus, in the Seller’s opinion, such sale was not related to the Contract and did not evidence it’s existence. Thus, the main dispute between the parties was whether the Contract had been concluded.
The Harju County Court did not satisfy the claim, relying on Art-s 11, 14 (1), 15 (1), 18 (1) and 18 (2) of the CISG. The Buyer filed an appeal to the Tallinn Circuit Court (the Court).
The Court agreed with the first instance court that the Contract had not been concluded as the Buyer had not given acceptance to conclude the Contract. The court of first instance had previously established that the Seller had made an offer in the meaning of Articles 14 (1) and 15 (1) of the CISG by sending by fax to the Buyer a draft Contract which had already been signed by a representative of the Seller. As this was not disputed in the appeal, the Court did not elaborate on the making of the offer in it’s judgment but focused on the issue of acceptance instead. The Court agreed that Art 11 of the CISG does not require a sales contract to be concluded or confirmed in writing. However, in the current case Section 10 of the draft Contract established that the Contract would come in force as of signing. The Court found that this meant that the parties themselves had agreed that the acceptance to conclude this particular Contract would have to be explicit and be given by signing the Contract. There was no evidence to prove that the Buyer had sent to the Seller a signed Contract back. As proper indication of assent had not reached the offeror, the requirements of Art 18 (2) of the CISG were not considered to be met and thus, the Contract had not been concluded.
Despite the conclusion that signing of the Contract was required, the Court nevertheless responded to the Buyer’s claims in the appeal that the relevant acceptance was given by conduct (Art 18 (2) of the CISG). The Court found that there was no evidence that acceptance had been given by conduct either or that the parties had started to perform the Contract, in particular:

  • e-mail correspondence and deliveries according to separate individual orders did not prove the existence of a long-term frame contract;
  • the Buyer’s conduct showed that the Buyer did not consider himself tied to the Contract as he did not make monthly orders according to the timetable established in the proposed Contract;
  • the parties did not fulfill the obligation arising under section 5.3 of the Contract to agree on the prices of peat for the following season in August of each year;
  • although the Seller had issued two invoices to the Buyer in 2007 and these invoices referred to the Contract (they mentioned contract No 4-1/049), evidence supported the conclusion that the two invoices were actually issued under an individual contract No 4-1/054 instead. The Buyer failed to prove that he had demanded performance of the Contract from the Seller and that the relevant orders had been placed under the Contract under dispute.
Based on the above, the Court concluded that the parties had not concluded the Contract and thus the Buyer could not claim any damages arising from non-performance of the Contract. The judgment of the court of first instance was upheld.

 

Translated text

n/a

 

Original text

See link <https://www.riigiteataja.ee/kohtuteave/maa_ringkonna_kohtulahendid/menetlus.html?kohtuasjaNumber=2-08-67305/24>

 

 

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