## Facts

- A Swiss market-research institute agreed to prepare a specified market analysis for a German company.
- The institute performed the research and delivered the results as a written report.
- The German company refused to pay, asserting the report did not meet the contractual specifications.
- The institute sued for payment and relied on the United Nations Convention on Contracts for the International Sale of Goods (CISG).
- On appeal, the court focused on whether the CISG governed the contract at all.

## Issues

1. Whether an agreement to prepare and deliver a market-research report constitutes a contract for the sale of goods under CISG art. 1(1).
2. Whether the agreement constitutes a contract for the production of goods under CISG art. 3(1) when the work product is delivered in tangible form.
3. Whether the contract’s primary purpose is transfer of a tangible object or provision of intellectual services.

## Decision

- The court held the contract was neither a sale of goods under CISG art. 1(1) nor a contract for the production of goods under CISG art. 3(1).
- The CISG therefore did not apply to the parties’ dispute.
- The plaintiff could not recover on a CISG-based theory; any claim for payment had to be assessed under the applicable domestic law.

## Legal Principles

- A CISG “sale of goods” is characterized by transfer of property in a tangible object.
- Delivering ideas or information in a physical medium does not, by itself, convert an intellectual-service transaction into a sale of goods.
- For CISG art. 3(1) to apply, the contract’s essential obligation must be production of “goods” as such; where the principal performance is intellectual work and the tangible item is incidental, the CISG is excluded.
- Classification turns on the contract’s predominant purpose, including what the parties primarily sought to obtain.

## Conclusion

Because the parties primarily bargained for the right to use the market-research ideas rather than for the transfer of a physical object, the appellate court treated the agreement as an intellectual service contract and held the CISG inapplicable.


Market Rsch. Inst. v. Ger. Co., 19 U 282/93 (Oberlandesgericht Köln Aug. 26, 1994)