## Facts

- A German seller sold a used gear-cutting machine to a Spanish corporate buyer for DM 370,000.
- The seller sent a written order confirmation that referenced the seller’s standard conditions of sale.
- The standard conditions were not enclosed with the confirmation and were not otherwise provided to the buyer before contract conclusion.
- The standard conditions included a clause excluding liability for defects in used equipment.
- After delivery, the machine could be made operational only with outside expert assistance, causing the buyer substantial costs.
- The buyer sued for reimbursement of the expert costs and damages based on alleged non-conformity/defects.
- The seller defended by invoking the liability-exclusion clause in its standard conditions.

## Issues

1. Under CISG Articles 14, 18, and 8, can standard terms be incorporated into an international sales contract by a bare reference in an order confirmation without providing the terms to the other party?
2. Under CISG Article 7(1), is it consistent with good faith in international trade to require the offeree to inquire about the content of referenced standard terms to avoid being bound by them?

## Decision

- The Bundesgerichtshof held that the seller’s standard terms were not incorporated into the CISG-governed contract.
- A mere reference to standard conditions, without sending them or otherwise making them available, does not give the offeree a reasonable opportunity to take notice of their contents.
- Requiring the offeree to request the terms, and penalizing the offeree for not doing so, contravenes good faith in international trade and the parties’ duty to cooperate under CISG Article 7(1).
- The liability-exclusion clause therefore did not form part of the contract, and the seller could not rely on it to bar the buyer’s defect-based claims.

## Legal Principles

- When the CISG contains no specific rule on incorporating standard terms, the issue is resolved through CISG contract-formation and interpretation provisions, including Articles 14, 18, and 8.
- Standard terms are incorporated only if the other party is (i) made aware of the intent to include them and (ii) given a reasonable opportunity to review them, typically by receiving the terms or having them otherwise made practically accessible before contract conclusion.
- In cross-border transactions, differences in standard terms across legal systems make actual access to the text of the terms especially important for a reasonable offeree under Article 8.
- Under Article 7(1), good faith and cooperation place the burden on the party relying on standard terms to provide them, rather than shifting that burden to the other party to inquire.

## Conclusion

The court required actual provision or practical accessibility of standard terms for incorporation under the CISG and refused to enforce a defect-liability exclusion that was referenced but not supplied to the foreign buyer before the contract was concluded.


Bundesgerichtshof [BGH] [Federal Court of Justice] Oct. 31, 2001, VIII ZR 60/01 (Ger.)