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Rag Ltd (Kaufhimmel (Want case heard in German courts, will argue that the…
Rag Ltd
Kaufhimmel
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Sold defective goods, goods were returned, complaints of skin inflammation, demanded compensation, led to store boycott, massively damaging effects.
Issued German proceedings for breach of contract, damages for defective goods
Rag made an appearance at court but only to contest jurisdiction. Each invoice contained a choice of court clause. 'Kauf' were "very important customers" can assume business relationship has been ongoing for some time
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Will argue they haven't consented. Will say it wasn't stipulated in pre-contract agreements. for an agreement must a condition be stipulated in the contract? Can you consent via seeing the invoices, not bringing them to anyone's attention, but continuing the normal course of business? Gasser v MISAT settles this part of the dispute.
Choice of court clause will be held to be valid. Does that trump the special jurisdiction as provided for by article 7?
According to 25(1) unless the agreement is held to be null and void it will take preference over domicile. As the agreement is going to be held as valid it will take preference over 'Kauf's article 7 arguement
Want case heard in German courts, will argue that the effects were felt in Germany. Will argue special jurisdiction under article 7. When a person in a MS can be sued in another MS and differentiates between contract issues 7(1) and tortious issues 7(2). Article 7(1) gives a derogation from article 4 in matters relating to a 'contract'. No disagreement between parties over whether this is a contractual issue
7(1)b - Performance of Obligation - Sale of goods in the place they were delivered or ought to have been delivered. The defective cardigans were delivered to Germany so this rule would apply. Part c only applies if part b does not
Most sales of goods contracts are governed by 7(1)b. This one clearly is - Maires book page 82. Says you can be sued in the MS where the obligation was performed. 7(1)a won't apply because the place of performance is identifiable.
Whilst there is no explicit place of performance it is assumed to be Germany. Because this is not mentioned Rag may argue it is not. This is a futile defence, and the only defence to this would be if I was given a specific place of performance which we are not
Brussels 1 recast is to be interpreted in conflicts issues. It takes precedence over national law so the definitions given to a tort claim and a contract, which although may differ at a national level will not be present for the purposes of this question because the recast definitions are applied and are "autonomous" throughout the EU - Maires Book, page 79, para.2.66
Unless explicitly stated, for sale of goods contracts the performance of obligation will occur sound be or ought to be delivered - Maires Book, pg.85, para. 2.83
OFAB v Koot - says article 7(1) applies to situations where parties have freely consented to an obligation and acted on that obligation. "Kauf' Will argue that the contractual obligation trumpts everything else and this article applies and gives the German Courts special jurisdiction
Appearance in the court
"Kauf" will argue that because there was an appearnce in the court made that Rag excepted the German courts as having jurisdiction
Rag v 'Kauf'
Brussels 1 Recast:
4(1) - being sued in their domiciled MS, however this is subject to the rest of the regulation
Companys domicile is place of business affairs, which is Ireland
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May argue there is no explicit place of performance mentioned. According to Car Trim "the physical transfer of goods" + "actual power of disposal is obtained".
Will argue special jurisdiction under article 7 should not be available because of the choice of court clause included into all the contracts
Choice of Court clause. This clause was not stipulated in the initial contract. 25(1)(c) applies, the other sections do not because non of those situations arise in this present case
(c) - as this is international business this provision must apply wich says it must be widely known and accepted as binding to which parties ought to be aware of.
This case is similiar to Gasser v MISAT. There has been no explicit agreement in the original contract. However, the choice of court clause has bee inserted into the invoices. In our case it has been inserted into every invoice.
The Courts held that through paying the invoice and not bringing it anyone's attention they had consented to the agreement through their conduct
"Kauf' will argue they never consented to the contract. The question is whether this clause will be held to be valid for the purpose of establishing jurisdiction
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Contractual obligation is defined as "legal obligation freely consented to by one person towards another" - ERGO Insurance v If Pe & C Insurance, para. 44 . Generally speaking, agreements can take multiple forms
Although they can be proven through evidence in writing - 25(1)a, that is not the only way you can prove the existence of a contractual obligation.
Appearance in court - As per article 26 of the recast of the appearance in court is only to contest jurisdiction as this was then this will not amount to accepting jurisdiction.
Brussels Recast 1 supersedes national law for the purpose of establishing jurisdiction, it is this piece of legislation that applies. This helps provide uniformity due to different MS having different definitions of what amount to a tort or a contract, which would cause confusion
The applicable articles are 4, 7, 25 and 26 so an examination of all these must be done to establish which court has jurisdiction in this instance.
So your are not asking whether a contractual clause is valid for the purposes of your national law with regards choice of court or law agreements, you are determining them based on whether they are valid under the recast. An analysis of the national laws in this sense is unnecessary because both parties are resident and domiciled in EU member states
MSG case: Held that in international commerce agreements which are no reacted to and are on invoices which have been paid will assume consent to an agreement