## Facts

- A German seller supplied carpets to a Brazilian buyer under an international sales relationship involving multiple deliveries.
- The buyer fell into arrears; the parties later concluded a “New Agreement” under which the buyer acknowledged the outstanding debt and agreed to pay by monthly cheques on fixed dates.
- The buyer again failed to pay; the seller sued in Germany for the remaining balance, including freight charges shown separately.
- A German trial court dismissed the action as inadmissible for lack of international jurisdiction.
- The seller appealed to the Higher Regional Court of Karlsruhe.

## Issues

1. Whether the CISG governed the parties’ contract under CISG Article 1(1)(b) where private international law pointed to German law.
2. Whether the New Agreement modified the contract under CISG Article 29(1) in a way that changed the place of payment.
3. Whether, under CISG Article 57(1)(a), the place of payment was the seller’s place of business in Germany, establishing German international jurisdiction.
4. Whether limitation of the seller’s claim was governed by the CISG, an international limitation convention, or German domestic law.

## Decision

- The appellate court held the CISG applied via Article 1(1)(b) because the forum’s conflict-of-laws rules led to German law.
- The court held the place of payment remained the seller’s place of business under Article 57(1)(a), and the New Agreement did not change that place.
- Based on the place of performance of the payment obligation being in Germany, the court found German courts had international jurisdiction and rejected the trial court’s contrary ruling.
- The court held limitation/prescription was not governed by the CISG and that an international limitation convention did not apply; German domestic law controlled limitation.
- The court treated the buyer’s payment obligation as including freight costs even if stated separately, and held the total amount was payable at the seller’s place of business.

## Legal Principles

- CISG Article 1(1)(b) applies when private international law leads to the law of a CISG Contracting State, even if the other party is from a non-Contracting State.
- Under CISG Article 57(1)(a), absent a contrary agreement, the buyer must pay at the seller’s place of business.
- A later agreement changing the timing or method of payment (including payment by cheques and installments) can modify the contract under CISG Article 29(1) without changing the CISG default place of payment unless the parties clearly agree to a different place.
- Courts may use the CISG-defined place of performance of the payment obligation to determine international jurisdiction over an action for the price.
- The CISG does not govern limitation/prescription; in the absence of an applicable international limitation regime, limitation is governed by the otherwise applicable domestic law.
- The buyer’s duty to pay the price under CISG Articles 53 and 54 can include related freight charges when they form part of the agreed monetary obligation.

## Conclusion

The appellate court applied the CISG through conflict-of-laws, held that a payment-rescheduling agreement did not relocate the place of payment from the seller’s place of business, affirmed German jurisdiction on that basis, and applied German domestic law—rather than the CISG—to limitation issues while treating freight costs as part of the payable amount.


Carpet Seller v. Carpet Buyer, No. 7 U 40/02 (OLG Karlsruhe Dec. 10, 2003)