## Facts

- An Italian seller supplied tile to a German buyer in an international transaction.
- The buyer ordered through a German market-stand operator who acted as an intermediary.
- The seller invoiced the buyer directly for the tile.
- The intermediary agreed with the buyer to accept a discounted amount and collected that payment from the buyer.
- The funds collected by the intermediary did not reach the seller.
- The seller demanded payment from the buyer; the buyer did not pay the invoiced amount.
- The seller sued the buyer in the District Court of Alsfeld (Germany) for the price and related monetary relief under the CISG.

## Issues

1. Whether the CISG governed the contract despite the involvement of an intermediary.
2. Whether the buyer’s payment to the intermediary discharged the buyer’s obligation to pay the seller the contract price under the CISG.
3. Whether the buyer could avoid liability for non-payment under CISG Article 79 based on the intermediary’s failure to forward the payment.
4. Whether the seller was entitled to interest and damages for late or non-payment under CISG Articles 74, 77, and 78.

## Decision

- The court held that the CISG applied to the parties’ contract for the international sale of goods.
- The court ordered the buyer to pay the outstanding contract price to the seller; payment to the intermediary did not satisfy the buyer’s payment obligation to the seller.
- The court rejected any exemption from liability based on the intermediary’s failure to remit payment.
- The court awarded monetary relief associated with non-payment, including interest and damages within the CISG framework.

## Legal Principles

- CISG Article 1(1)(a) applies where the parties have places of business in different Contracting States and the transaction is a sale of goods within the Convention’s scope.
- Under CISG Article 53, the buyer’s core duty is to pay the price to the seller as required by the contract and the CISG.
- Payment to a third party discharges the buyer’s obligation only if the third party is authorized to receive payment for the seller; absent such authorization, the buyer remains liable to the seller.
- The risk that a buyer-selected intermediary fails to transmit payment falls on the buyer and does not, without more, constitute an Article 79 impediment excusing non-payment.
- Under CISG Article 78, the seller is entitled to interest on sums in arrears; additional losses caused by non-payment may be recoverable as damages under Article 74, subject to mitigation under Article 77.

## Conclusion

The court applied the CISG and held that the buyer remained liable for the full contract price because payment to an intermediary who did not forward the funds did not discharge the buyer’s obligation to the seller; the buyer was not excused under Article 79 and owed interest and related damages for non-payment.


Landgericht Alsfeld, 31 C 534/94 (Ger. May 12, 1995)