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This chapter reviews the issue of xenotransplantation as a vector for infection to humans and considers potential mechanisms for disease, screening systems, and evaluations that need to be carried out to identify these risks as the field moves forward. Knowledge of donor-associated infections after allotransplantation and of zoonotic infections is used to help estimate the potential risk of xenotransplantation. Bacterial or fungal infections in the airway of the donor can lead to disease after lung or heart-lung transplantation, and histoplasmosis has been transmitted with cadaveric kidneys. These types of acute donor-associated infections can theoretically be less of a risk after xenotransplantation as source animals can be maintained under optimal healthy conditions and surgery would be performed on an elective schedule rather than under the current time pressures of allotransplantation. In an attempt to minimize the risk of xenozoonoses and to learn how to evaluate animal-associated infections after xenotransplantation, more extensive protocols began to be developed in the early and mid-1990s that continue to be expanded upon today. Some microbes, particularly viruses, are considered to be "species specific." If this is the case, it is possible that xenotransplantation carries less risk of donor-transmitted infections than does allotransplantation. Acute viremia can lead to donor-associated infections after allotransplantation and would likewise be expected to have the same risk after xenotransplantation. Xenotransplantation may have positive implications for decreasing the risk of some infections after transplantation.
Algorithm to determine whether to use infected animal tissue in transplantation.
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matches: V. V. V. V. V. V. V. V.


Indemnity is an “obligation resting on one party to make good a loss or damage another party has incurred.” Essentially, indemnity involves a transfer of risk from one party to another, where one party agrees to protect another for its losses. The indemnitor is the party who is obligated to indemnify or protect the other party. The indemnitee is the party receiving protection for its actions.
In California indemnification may be (1) express; (2) equitable (encompassing implied contractual indemnity); or (3) statutory. We explore express indemnity below.
Express indemnity is an obligation arising from contractual language between two parties where one party holds the other party harmless upon the “occurrence of specified circumstances.” A common scenario is this: A agrees to indemnify B. Later, when B is sued by C, A reimburses B for C’s claims against B, provided the claims fall within A and B’s agreement.
Parties have “great freedom to allocate [their indemnification] responsibilities[,]” and courts will enforce an express indemnity contract according to the terms of the parties’ agreement. Courts will, however, fill in gaps in the indemnification agreement according to a list of rules laid out in California’s Civil Code, unless the parties state otherwise.
A stipulation that a judgment against the indemnitee is conclusive upon the indemnitor does not apply if the indemnitee had a good defense but failed to establish it in his action.
While contracting parties may voluntarily define their duties to each other, there are limitations on indemnity agreements; that is, one party cannot agree to indemnity another for everything. In California, parties cannot create indemnification agreements for future, known unlawful acts but can make agreements for a past known unlawful act, except for felonies. California’s public policy also prohibits indemnification for punitive damages.
Parties can contract to indemnify for negligence. California courts distinguish between active and passive negligence.
Special rules apply to indemnification agreements involving design and construction contracts. Design professionals, for example, have different duties to defend and indemnify from those described in Section 2778(3).
There are only some of the rules that apply to indemnification agreements. Other issues which may be the subject of future articles include the duty to indemnity versus duty to defend; effects of the statute of limitations; limitations on liability; and equitable and statutory indemnity. Thoughtful and careful drafting of indemnification agreements helps eliminate conflicts and alleviate problems. If you have questions or concerns regarding indemnification or need help interpreting or drafting an indemnification agreement, please contact an attorney.
 Prince v. PG&E Co., 45 Cal. 4th 1151, 1157 (2009) (internal quotations omitted); see also Cal. Civ. Code § 2772.
 For instance, losses may include third-party claims for product defect or IP infringement; breach of contract or warranty; or other losses incurred by one of the parties.
 Prince, 45 Cal. 4th at 1157; see also Cal. Lab. Code § 2802.
 Id. at 1158 (internal quotations omitted).
 This example involves a third party claim. Indemnification clauses may also involve first party claims. See, e.g., Hot Rods, LLC v. Northrup Grumman Sys. Corp., 242 Cal. App. 4th 1166 (2015).
 Prince, 45 Cal. 4th at 1158.
 “Liability” requires the indemnitor to pay as soon as the indemnitee is liable rather than waiting until the indemnitee pays for or incurs a loss. See, e.g., Ramey v. Hopkins, 138 Cal. App. 685 (1934).
 In other states, a different rule may apply. See, e.g., Weeks Marine, Inc. v. Standard Concrete Prods., Inc., 737 F. 3d 365, 369 (5th Cir. 2013) (under Texas law, duty to defend determined by language of the indemnity provision and allegations in the third-party pleadings).
 Cal. Civ. Code § 2778 (emphasis added).
 Cal. Civ. Code §§ 2773, 2774; see also Cal. Civ. Code § 1668 (a contract may not directly or indirectly exempt a party from responsibility for his own fraud or willful injury to the person or property of another, or willful or negligent violation of the law).
 PPG Indus. v. Transamerica Ins. Co., 20 Cal. 4th 310, 317 (1999).
 See Crawford v. Weather Shield Mfg., Inc., 44 Cal. 4th 541, 552 (2008); E. L. White, Inc. v. Huntington Beach, 21 Cal. 3d 497, 507 (1978); Rossmoor Sanitation, Inc. v. Pylon, Inc., 13 Cal. 3d 622, 628-29 (1975)(defining active negligence).
 Construction contracts are subject to the limitations in California Civil Code Sections 2782, 2782.05, 2782.1; see also Oltmans Constr. Co. v. Bayside Interiors, No. A147313 (Cal. Ct. App. Mar. 30, 2017).
 Design professionals include licensed architects, licensed landscape architects, registered professional engineers, and licensed professional land surveyors. Cal. Civ. Code § 2782.8. See also Indemnity: design professionals, S.B. 496, 2017-2018 Reg. Sess. (Cal. 2018) (effective for all professional design service contracts entered into on or after January 1, 2018, rather than the current law which applies only to those contracts between professional designers and public agencies).


then any deduction allowable under this chapter in respect of such amount shall be allowable as of the day as of which such amount is includible in the gross income of the person to whom the payment is made (or, if later, as of the day on which it would be so allowable but for this paragraph). For purposes of this paragraph, in the case of a personal service corporation (within the meaning of section 441(i)(2)), such corporation and any employee-owner (within the meaning of section 269A(b)(2), as modified by section 441(i)(2)) shall be treated as persons specified in subsection (b).
The Secretary shall by regulations apply the matching principle of paragraph (2) in cases in which the person to whom the payment is to be made is not a United States person.
The Secretary may by regulation exempt transactions from the application of clause (i), including any transaction which is entered into by a payor in the ordinary course of a trade or business in which the payor is predominantly engaged and in which the payment of the accrued amounts occurs within 8½ months after accrual or within such other period as the Secretary may prescribe.
then such gain shall be recognized only to the extent that it exceeds so much of such loss as is properly allocable to the property sold or otherwise disposed of by the taxpayer.
Paragraph (1) shall not apply if the loss sustained by the transferor is not allowable to the transferor as a deduction by reason of section 1091 (relating to wash sales).
Paragraph (1) shall not apply to the extent any loss sustained by the transferor (if allowed) would not be taken into account in determining a tax imposed under section 1 or 11 or a tax computed as provided by either of such sections.
shall be treated as persons specified in a paragraph of subsection (b). Subparagraph (C) shall apply to a transaction only if such transaction is related either to the operations of the partnership described in such subparagraph or to an interest in such partnership.
(ii) such redemption is upon the demand of another regulated investment company.
then such gain shall be recognized only to the extent that it exceeds so much of such loss as is properly allocable to the property sold or otherwise disposed of by the taxpayer. This subsection shall not apply if the loss sustained by the transferor is not allowable to the transferor as a deduction by reason of section 1091 (relating to wash sales)."
2014—Subsec. (d). Pub. L. 113–295, in concluding provisions, struck out "This subsection applies with respect to taxable years ending after December 31, 1953. " after "by the taxpayer." and "or by reason of section 118 of the Internal Revenue Code of 1939" after "sales)".
Subsec. (d)(1). Pub. L. 113–295 struck out "(or by reason of section 24(b) of the Internal Revenue Code of 1939)" after "subsection (a)(1)".
Subsec. (d)(2). Pub. L. 113–295 struck out "after December 31, 1953," before "the taxpayer".
2010—Subsec. (f)(3)(D). Pub. L. 111–325 added subpar. (D).
2004—Subsec. (a)(3). Pub. L. 108–357 designated existing provisions as subpar. (A), inserted heading, and added subpar. (B).
1999—Subsec. (f)(3)(B)(i), (iii). Pub. L. 106–170 substituted "1221(a)(1)" for "1221(1)".
1997—Subsec. (b)(13). Pub. L. 105–34, §1308(a), added par. (13).
Subsec. (f)(4). Pub. L. 105–34, §1604(e)(1), added par. (4).
1988—Subsec. (a)(1). Pub. L. 100–647, §1006(e)(9), struck out "(other than a loss in case of a distribution in corporate liquidation)" after "exchange of property" and inserted at end "The preceding sentence shall not apply to any loss of the distributing corporation (or the distributee) in the case of a distribution in complete liquidation."
Subsec. (a)(2). Pub. L. 100–647, §1008(e)(6), made technical correction to directory language of Pub. L. 99–514, §806(c)(2), see 1986 Amendment note below.
1986—Subsec. (a)(2). Pub. L. 99–514, §806(c)(2), as amended by Pub. L. 100–647, §1008(e)(6), inserted at end "For purposes of this paragraph, in the case of a personal service corporation (within the meaning of section 441(i)(2)), such corporation and any employee-owner (within the meaning of section 269A(b)(2), as modified by section 441(i)(2)) shall be treated as persons specified in subsection (b)."
Subsec. (a)(3). Pub. L. 99–514, §1812(c)(1), added par. (3).
Subsec. (b)(12). Pub. L. 99–514, §1812(c)(4)(A), substituted "same persons own" for "same persons owns".
Subsec. (e)(5)(D). Pub. L. 99–514, §803(b)(5), substituted in cl. (i) "interest in property described in clause (i), (ii), (iii), or (iv) of section 1250(a)(1)(B)" for "interest in low-income housing (as defined in paragraph (5) of section 189(e))" and in cl. (ii) "such property" for "low-income housing (as so defined)".
Subsec. (e)(6). Pub. L. 99–514, §1812(c)(3)(C), added par. (6).
Subsec. (f)(3)(B). Pub. L. 99–514, §1812(c)(2), inserted "(or persons described in subsection (b)(10))".
Subsec. (g). Pub. L. 99–514, §1842(a), added subsec. (g).
1984—Subsec. (a). Pub. L. 98–369, §174(a), amended subsec. (a) generally, substituting "In general" for "Deduction disallowed" in heading, "Deduction for losses disallowed" for "Losses" in par. (1) heading, and provisions dealing with matching of deduction and payee income item in the case of expenses and interest for provisions dealing with unpaid expenses and interest in par. (2).
Subsec. (b)(3). Pub. L. 98–369, §174(b)(2)(A), substituted "Two corporations which are members of the same controlled group (as defined in subsection (f))" for "Two corporations more than 50 percent in value of the outstanding stock of each of which is owned, directly or indirectly, by or for the same individual, if either one of such corporations, with respect to the taxable year of the corporation preceding the date of the sale or exchange was, under the law applicable to such taxable year, a personal holding company or a foreign personal holding company".
Subsec. (b)(10). Pub. L. 98–369, §174(b)(3), substituted "A corporation" for "An S corporation" in introductory provisions and "the corporation" for "the S corporation" in subpar. (A).
Subsec. (b)(12). Pub. L. 98–369, §174(b)(4), substituted "the same persons" for "the same individual".
Subsec. (e). Pub. L. 98–369, §174(b)(1), added subsec. (e).
Pub. L. 98–369, §174(a)(2), struck out subsec. (e) which provided that for purposes of subsection (a)(2) where the last day of the 2½ month period falls on Saturday, Sunday, or a legal holiday, such last day be treated as falling on the next succeeding day which is not a Saturday, Sunday, or a legal holiday, and the determination of what constitutes a legal holiday be made under section 7503 with respect to the payor's return of tax under this chapter for the preceding taxable year.
Subsec. (f). Pub. L. 98–369, §174(b)(2)(B), added subsec. (f).
Pub. L. 98–369, §174(b)(1), struck out subsec. (f) which related to special rules for unpaid expenses and interest of S corporations and treatment under such provisions of certain shareholders, etc., as related persons.
Pub. L. 98–369, §721(s), in closing provision of par. (1) substituted "then any deduction allowable under such sections in respect of such amount shall be allowable as of the day as of which such payment is includible in the gross income of the person to whom the payment is made (or, if later, as of the day on which it would be so allowable but for this paragraph)" for "then no deduction shall be allowed in respect of expenses otherwise deductible under section 162 or 212, or of interest otherwise deductible under section 163, before the day as of which the amount thereof is includible in the gross income of the person to whom the payment is made".
1982—Subsec. (b)(10) to (12). Pub. L. 97–354, §3(h)(1), (3), added pars. (10) to (12).
Subsec. (f). Pub. L. 97–354, §3(h)(2), added subsec. (f).
Pub. L. 114–113, div. Q, title III, §345(b), Dec. 18, 2015, 129 Stat. 3115, provided that: "The amendment made by this section [amending this section] shall apply to sales and other dispositions of property acquired after December 31, 2015, by the taxpayer in a sale or exchange to which section 267(a)(1) of the Internal Revenue Code of 1986 applied."
Pub. L. 111–325, title III, §306(c), Dec. 22, 2010, 124 Stat. 3550, provided that: "The amendments made by this section [amending this section and section 302 of this title] shall apply to distributions after the date of the enactment of this Act [Dec. 22, 2010]."
Amendment by Pub. L. 108–357 applicable to payments accrued on or after Oct. 22, 2004, see section 841(c) of Pub. L. 108–357, set out as a note under section 163 of this title.
Pub. L. 105–34, title XIII, §1308(c), Aug. 5, 1997, 111 Stat. 1042, provided that: "The amendments made by this section [amending this section and section 1239 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [Aug. 5, 1997]."
Pub. L. 105–34, title XVI, §1604(e)(2), Aug. 5, 1997, 111 Stat. 1098, provided that: "The amendment made by paragraph (1) [amending this section] shall take effect as if included in section 174(b) of the Tax Reform Act of 1984 [Pub. L. 98–369]."
If any interest costs incurred after Dec. 31, 1986, are attributable to costs incurred before Jan. 1, 1987, the amendment by section 803(b)(5) of Pub. L. 99–514 is applicable to such interest costs only to the extent such interest costs are attributable to costs which were required to be capitalized under section 263 of the Internal Revenue Code of 1954 and which would have been taken into account in applying section 189 of the Internal Revenue Code of 1954 (as in effect before its repeal by section 803 of Pub. L. 99–514) or, if applicable, section 266 of such Code, see section 7831(d)(2) of Pub. L. 101–239, set out as an Effective Date note under section 263A of this title.
Amendment by section 803(b)(5) of Pub. L. 99–514 applicable, except as otherwise provided, to costs incurred after Dec. 31, 1986, in taxable years ending after that date, see section 803(d) of Pub. L. 99–514, set out as a note under section 263A of this title.
Amendment by section 806(c)(2) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with special provisions applicable to taxpayers who are required to change their accounting periods, see section 806(e) of Pub. L. 99–514, set out as a note under section 1378 of this title.
Amendment by sections 1812(c)(1), (2), (3)(C), (4)(A) and 1842(a) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
"(1) Subsections (a) and (b)(1).—The amendments made by subsections (a) and (b)(1) [amending this section] shall apply to amounts allowable as deductions under chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for taxable years beginning after December 31, 1983. For purposes of the preceding sentence, the allowability of a deduction shall be determined without regard to any disallowance or postponement of deductions under section 267 of such Code.
"(A) In general.—Except as provided in subparagraph (B), the amendments made by subsection (b) (other than paragraph (1) thereof) [amending this section and sections 170, 368, 514, and 1235 of this title] shall apply to transactions after December 31, 1983, in taxable years ending after such date.
"(B) Exception for transfers to foreign corporations on or before march 1, 1984.—The amendments made by subsection (b)(2) [amending this section] shall not apply to property transferred to a foreign corporation on or before March 1, 1984.
"(ii) pursuant to a contract which was binding on September 29, 1983, and at all times thereafter before the amount is paid or incurred.
"(B) Treatment of renegotiations, extensions, etc.—If any indebtedness (or contract described in subparagraph (A)) is renegotiated, extended, renewed, or revised after September 29, 1983, subparagraph (A) shall not apply to any amount paid or incurred on such indebtedness (or pursuant to such contract) after the date of such renegotiation, extension, renewal, or revision."
Amendment by section 721(s) of Pub. L. 98–369 effective as if included in the Subchapter S Revision Act of 1982, Pub. L. 97–354, see section 721(y)(1) of Pub. L. 98–369, set out as a note under section 1361 of this title.
Pub. L. 95–628, §2(b), Nov. 10, 1978, 92 Stat. 3627, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to payments made after the date of the enactment of this Act [Nov. 10, 1978]."
Nothing in section 806 of Pub. L. 99–514 [amending this section] or in any legislative history relating thereto to be construed as requiring the Secretary of the Treasury or his delegate to permit an automatic change of a taxable year, see section 1008(e)(9) of Pub. L. 100–647, set out as a note under section 1378 of this title.
Pub. L. 99–514, title XVIII, §1812(c)(5), Oct. 22, 1986, 100 Stat. 2835, provided that: "Clause (i) of section 174(c)(3)(A) of the Tax Reform Act of 1984 [section 174(c)(3)(A)(i) of Pub. L. 98–369, set out as a note above] shall be applied by substituting 'December 31, 1983' for 'September 29, 1983' in the case of indebtedness which matures on January 1, 1999, the payments on which from January 1989 through November 1993 equal U/L plus $77,600, the payments on which from December 1993 to maturity equal U/L plus $50,100, and which accrued interest at 13.75 percent through December 31, 1989."


The following General Sales and Delivery Terms and Conditions shall exclusively govern the sale and delivery of our products. This shall also be the case if we do not make express reference to these Terms in future Contracts, unless the Buyer is a consumer as defined in § 13 BGB (German Civil Code). Purchasing Terms and Conditions of the Buyer, which we refute herewith, shall not bind us in any way if we do not expressly object to them. Orders placed shall be deemed expressions of consent to the following Terms and Conditions. Terms of the Buyer specified on order sheets of the Buyer, which are in conflict with our Terms and Conditions or statutory provisions in part or in full, are hereby refuted. Changes to our General Sales and Delivery Terms and Conditions shall be effective only if they have been agreed upon in writing and if such a written agreement clearly indicates the provisions that have been modified. In the event of doubt, a modification of the General Sales and Delivery Terms and Conditions shall be deemed unintended.
Our quotations shall be subject to change and non-binding upon our company unless otherwise agreed upon or if the delivery or service has already been carried out. Verbal agreements as well as conflicting specifications in purchase orders shall be binding upon our company only if we have confirmed them in writing.
Unless otherwise agreed upon, the basis for our quotations and acceptance declarations shall be the generally binding construction material standards, directive, and statutory provisions in their respectively effective versions on the date the quotation or acceptance declaration is submitted.
It shall be Buyer’s sole responsibility to choose the correct and complete type and volume of the construction materials to be delivered, considering Buyer’s intended purpose of use and processing conditions.
The subject matter of the contract shall be the merchandise specified in the purchase order.
Buyer shall order the merchandise in writing in a manner that is timely enough that its delivery by the due date is ensured. In special cases and upon our request, a delivery schedule shall be agreed upon with our company. If Buyer should call in deliveries via phone, we shall be authorized to delivery; however, in the event of doubt, the written time of delivery, quantity, type and delivery location we have recorded shall apply in such cases. Buyer shall be liable for the consequences of incorrect or incomplete information provided when calling in orders.
We shall be authorized to choose the mode of transportation and to fully utilize the loading capacity unless otherwise agreed upon.
Deliveries of loose bulk merchandise shall as a rule only be carried out by way of full capacity load utilization of the respective mode of transportation.
4.1 In the purchase order, Buyer shall specify the delivery destination and address of the recipient (prerequisite for any freight credits). Buyer shall promptly notify us of any scheduling changes.
4.2 Buyer shall make the provisions set forth in Sections 4.1, 5.1, 5.2 and 6. Express components of Buyer’s contracts with customers. Any breach of these obligations shall release our company from further delivery obligations. Moreover, we shall have the right to charge retroactive freight costs. We reserve the right to claim other damage compensation. If the breach of any of the above obligations the Buyer is liable for should not be equivalent to the amount of freight our company is entitled to, a contractual penalty equivalent to ten times the discrepancy amount shall be due in addition to the aforementioned entitlements. However, the minimum amount due shall be EUR 200.- per load. If the Buyer should make scheduling changes after an order has been called in, Buyer shall absorb any costs incurred as a result.
Delivery shall be carried out by vehicles commissioned by us or the merchandise shall be picked up by Buyer.
5.1 To prepare for delivery, Buyer shall ensure that the vehicles carrying out the overland transport have access to the unloading location on a well-tended driveway, without any obstacles or dangers and can unload without having to wait and that they can leave the unloading location in the same fashion. This requires a roadway that is sufficiently paved and accessible by heavy trucks (weighing up to 40 tons) without any hindrances. Buyer shall ensure that the roadway is at least 4 m wide and offers a clearance of at least 4 m (also in the event of underpasses).The unloading dock must be sufficiently lighted and in compliance with the statutory provisions, the driveway must be passable without any hindrances and the operator of the vehicle must be directed by an authorized individual as far as the local conditions at the construction site / unloading locations at the latest when entering the driveway to the construction site / unloading location. Moreover, Buyer shall ensure that an authorized individual that will accept the goods, weighing card, verifies that the seals are not broken, provides information on the silos, containers, or other unloading location to be filled and is available to sign the delivery note and that a silo area is available for filling when loose bulk merchandise is delivered. If these requirements should not be met, the Buyer shall be held liable for resulting damages, unless Buyer or Buyer’s agent are not responsible for the non-existence of these requirements. The burden of proof for this fact shall be upon the Buyer. The authorized individual shall be the one that directs the vehicle.
If necessary, Buyer shall, in due time and at Buyer’s expense, apply for and procure the road and pedestrian walkway blockades as well as other government agency issued permits for the use of the access and unloading areas and shall share all pertinent information with our company and, if necessary, make the aforementioned available to us without having to be prompted to do so and in due time. Buyer shall be responsible for the removal of all spillages caused during and after unloading.
Any breach of these obligations shall entitle our company to rescind from the entire or part of the Contract and to charge the freight costs incurred for the transported by not deliverable goods for both, the drive to and from the destination as well as any disposal costs incurred.
5.2 If Buyer should pick up the goods, the following terms shall apply: The technical equipment of the vehicles deployed to pick up the goods shall be suitable for the transportation of the goods and aligned with the loading systems.
Expert personnel shall make pick-ups only; such staff shall wear the personal protective gear required for the respective merchandise (PSE). Pick-ups shall be scheduled during our standard loading times subject to presentation of the agreed-upon pick-up instructions of the Buyer and designation of the name of the recipient. The pick-up agent or recipient shall not be entitled to timely delivery if the deployed pick-up vehicle breaks down for any reason.
Buyer or Buyer’s commissioned third-party agent shall be solely responsible for compliance with the existing provisions concerning the proper securing of loads.
When picking up goods, Buyer shall comply with our loading terms and conditions. In any event, the pick-up agent and recipient shall observe the directions on site during the pick-up process.
The pick-up agent shall confirm the acceptance of the goods and compliance with the provisions on the delivery and pick-up notes by signing the documents.
If the Buyer should be an entrepreneur/a business, the individuals signing the delivery note shall be considered holding power of attorney for the acceptance of the delivery and to confirm receipt on behalf of the Buyer vis-à-vis our company and our delivery directory / assortment directory as well as our pick-up terms and the parameters of the delivery note shall be deemed accepted by way of execution. In the event of acceptance refusal, late, delay or otherwise improper acceptance, the Buyer, Buyer’s obligation to pay the purchase price notwithstanding, shall compensate us, unless Buyer is not responsible for the refusal, tardiness, or other improper acceptance. In the event of pick-up at the plant, entrepreneurs/businesses shall be liable regardless of whether they must stand in for others. Multiple Buyers shall assume liability as all-and-several debtors for the proper acceptance of the merchandise and payment of the purchase price. We shall perform vis-à-vis all of these Buyers and with effect vis-à-vis all of them. All Buyers shall give each other power of attorney to accept our legally binding declarations related to the sale. Our obligation to delivery shall be suspended if the Buyer is in default with a liability.
All efforts made to comply with delivery dates notwithstanding, our delivery date commitments shall be non-binding.
If a delivery should be delayed, the Buyer shall have the option to set a reasonable remedial period in writing. Upon expiration of the remedial period, Buyer shall have the right to rescind from the Contract by making a written declaration (§ 323 BGB). If permitted by law, all other claims shall be excluded. If circumstances we are not responsible for should make the performance of the accepted purchase orders or difficult or delay their execution, we shall have the right to defer the delivery / delivery of the balance by the duration of the hindrance. If we should be unable to deliver / deliver the balance as defined in § 275 BGB, the entitlement to compensatory action shall be null and void pursuant to § 326 BGB and in this case, we shall have the option to rescind from the entire or part of the Contract. We reserve the right to apply § 326 Sect. 2 to 5 BGB. Grounds as defined in Article IV. shall not be our responsibility.
The respective effective loading and call-in times shall be published on our website or by circular letter. The loading of vehicles shall take place during the loading hours on a first come first serve basis on par with the arrival of the vehicles. Compensation for waiting times shall not be paid.
If the delivery times requested by the Buyer should be in conflict with the delivery times we offer, the day of delivery shall be deemed agreed upon in the acceptance process.
If the occurrence of acts of force majeure at our operations or at one of our vendor’s operations should prevent us from meeting our obligations, the delivery time shall be reasonably extended. Acts of force majeure shall also include for instance government agency interventions, transportation problems, operational problems, delays in raw and operating materials deliveries, any form of labor dispute and other circumstances (political, economic or natural) and other incidents that occur at our end, at our vendors’ end or in third party operations upon which the continuation of our operation is contingent and that we cannot prevent even if we apply the due diligence we are required to apply to our own actions. If delivery should be or become impossible (objectively or subjectively), we shall be released from our obligation to deliver.
In all of the above cases, Buyer shall not be eligible for any compensation for damages or other rights. The Buyer may, however, demand a declaration from us to determine whether we prefer to rescind from the Contract or deliver within a reasonable period of time. If we fail to make such a declaration, Buyer shall have the option to rescind from the Contract.
Our prices are subject to change. In the absence of other written pricing agreements, the price ex factory, plus freight, insurance and applicable value added tax published by us and in effect on the delivery date shall apply. If self-pick-up should be agreed upon with the Buyer and if Buyer should prepay any freight, we shall reimburse to Buyer the portion of the freight we have calculated to be ours. In the event of partial loads, we shall have the option to compensate only pro-rated freight amounts. For deliveries that do not utilize the full capacity or usage volume of the respective modes of transportation, we may charge a reasonable surcharge. Costs for freight records and stamps, customs’ clearance fees and border processing costs, local surcharges, and other special costs, shall be borne by the Buyer.
If our costs should increase in the period between the submission of our quotation or the acceptance of the order by the Buyer and its execution, in particular for bricks, freight, energy and wages, we shall have the right, our quotation and order confirmation notwithstanding, to adjust our sales price accordingly.
This shall not apply to deliveries to consumers made within 4 months after the execution of the Contract outside of a permanent debtor relationship.
Surcharges for deliveries of incomplete loads, on roadways or construction sites that do not allow for normal driving and in cases where it is not possible to promptly unload upon arrival and for deliveries made outside regular business hours or during the cold season, shall be billed separately. Principally, our invoices are due for immediate payment and shall be subject to payment upon receipt without any deductions. Exceptions shall be subject to prior written agreements.
3. If trade clauses are agreed upon, they shall be governed by the Incoterms 2000 unless agreements to the contrary have been made in writing.
Trade discounts / reimbursements agreed upon in writing shall be considered performance compensation for all expenditures and risks of the Buyer in the interest of selling our goods within the scope of fair competition; in particular for advertising, expert consulting and proper servicing of customers, the maintenance of reasonable warehousing facilities and for compliance with our sales and delivery terms and conditions. Non-fulfillment of one of these services shall render us eligible to deny the promised discount/reimbursement. Discounts and reimbursements shall be granted only for the quantities purchase from us that have been paid for.
The risk of accidental loss and accidental decline of goods delivered by us as well as the burdens shall transfer from our company to the Buyer upon delivery outside of the boundaries of our plant, as soon as we have handed over the goods to the logistics enterprise, freight forwarder or any other entity entrusted with the delivery and no later than upon crossing of the boundaries between the exit from our plant and the adjacent roadway or driveway. In the event of pick-up at the plant, the risk of accidental loss and accidental decline of the delivered goods and the burdens shall transfer to the Buyer at the time the goods leave the loading equipment (e.g. dock equipment, forklift). We shall not assume any liability for damages caused by soiled or improper vehicles or loading equipment. Logistics companies and freight forwarders commissioned by our company or any other entities entrusted with the shipment of goods shall not be considered our agents. In any event, Buyer may, if any transportation damages should arise, demand that we assign any entitlements generated in this context to Buyer for reimbursement of such damages. In deviation from the aforementioned provisions, the provisions of § 446 BGB shall apply if a consumer purchased the goods.
Weight-related claims may be filed only within 3 business days based on an official weight check. The determining factor for loose bulk goods shall be the weight determined by the plant; for packaged goods (gross for net) it shall be the weight printed on the packaging. Deviations of up to 2% may not be claimed for packaged goods.
The quality of our products shall be designated based on the respective applicable technical standards of the respective recipient country and the official provisions. They are subject to in-plant quality checks and are also quality audited by a government accredited institution if they bear the respective seal of approval.
We deliver chromate-reduced cement or dry mortar. However, for silo-stored goods, the effectiveness of this chromate-reduction does not exceed 2 months; 6 months for bagged materials as well as dry mortar products. The effective time for bagged goods always begins on the production date (bagging date) or on the loading date for silo-stored goods and is contingent upon proper and dry storage by the Buyer.
If defects or incorrect deliveries are detected, they shall be reported promptly along with information on the type of goods, type and extent of the defect, delivery note numbers, mode of transportation and storage location. The burden of proof that the goods have been properly treated and processed shall be upon the Buyer.
Goods for which claims have been raised must not be processed and must be properly stored, inventoried, and made available to us upon request until the subject matter has been clarified.
4.1 Buyer or Buyer’s customer shall take a sample of every delivery. In the event of larger volume deliveries, a separate average sample shall be taken for each batch of 250 tons.
4.2 The total sample weight shall be at least 5 kg. If the goods consist of loose bulk product, the sample shall be taken from the top filler opening of the vehicle. If the goods are packaged, the samples shall consist of partial samples weighing 1 – 2 kg, which shall be combined into an average sample weighing a total of around 5 kg. The material shall be carefully blended; the partial samples shall be taken from the center of the filled bag from 5 bags that were unopened and did not have any holes until that point in time.
4.3 Samples shall be filled into airtight containers right away and shall be marked in such a manner that they cannot be confused with others. The following information shall be provided: Day and time of delivery, exact description of the type of material, day and time the sample was taken, location and type of storage as well as delivery note number.
4.4 Upon request, Buyer shall undertake to provide us with a sufficient portion (no less than 2 kg) of the above samples for in-house testing purposes.
4.5 In the event of disputes concerning the condition of the samples taken in compliance with 4.1 – 4.4, the respective third-party auditor shall determine the condition; in all other cases the decision shall be made by a testing institute accredited by the Institute for Construction Technology.
4.6 Samples of goods that were generated in the absence of compliance with the abovementioned provisions shall not be accepted since it cannot be ruled out that the technical properties of the goods have changed post risk transfer, e.g. as a result of contamination, mixing, improper or excessively long storage, improper or incorrect processing.
4.7 If a sample of the goods as described above should not be available, the assessment of the delivered goods shall be presumed to be in compliance with the results that were determined during the goods quality monitoring process or the quality check.
4.8 If other evidence should be used, any additional costs shall be for Buyer’s account, even if the deficiency complaint is justified.
If the transaction should constitute a consumption goods sale, our company shall undertake to prove within the time limit after the occurrence of a deficiency set forth in § 476 BGB that the goods did not have this deficiency at the time of risk transfer, unless this presumption cannot be reconciled with the type of product or the deficiency. The burden of proof for the latter shall be upon our company.
In the event of a deficiency, the Buyer’s initial option shall be to demand remedial fulfillment. If the Buyer is an entrepreneur/a business, we shall take remedial action only by delivering goods that are free of deficiencies. Failure to remedy retroactively shall result in Buyer having the option to either reduce the amount owed or to rescind from the Contract. If Buyer, upon failure to retroactively remedy, should rescind from the Contract or demand a reduction, Buyer shall not be entitled to any further compensation for damages on the grounds of the deficiency.
We shall not assume any liability for damages that are not typical or that are unforeseeable or those that Buyer can control; unless the Buyer is a consumer.
Our liability shall be limited to contract typical, foreseeable damages. However, if we assume liability, it shall be limited to an amount not to exceed EUR 5 million, unless we are grossly culpable or required to assume liability for grossly culpable acts of our agents.
The above liability limit(s) or exclusion shall not apply to damages that have verifiably led to the loss of life, personal injury, health damages or in the event of intentional and grossly negligent acts of our company or of our legal representatives or executives that resulted in such damages or in the event of tort claims. However, our liability shall be limited to an amount not to exceed EUR 5 million in the event of acts of intent and negligence of other agents or in the event of minor neglect.
A special guarantee that would result in rights beyond the conditions specified above shall not be assumed or assured (§§ 443, 477 BGB). If the Buyer is an entrepreneur or business, in particular a dealer, the sale shall not constitute a consumption goods sale, which is why the applicability of § 478 BGB shall be excluded. If we issued a written consent notice for a consumption good sale, the Buyer shall waive Buyer’s rights arising from § 478 BGB, if Buyer has been granted a lump-sum discount of at least 5% pursuant to Article VI.
Any other damage compensation claims of the Buyer vis-à-vis our company, our fulfillment and other agents, regardless of the legal grounds and in particular based on the grounds of breach of a contractual obligation, as a result of culpability in connection with contractual negotiations or non-contractual liability shall be excluded, unless the damages are the result of intentional or grossly negligent breaches of duty by our company, one of our statutory representatives or agents or the result of a defect we have intentionally concealed or a breach of cardinal contractual obligation or results in the loss of life, personal injury or health damages, whereby our liability in these cases shall be limited to compensation for typical, foreseeable damages.
The above liability limitations shall not be applicable if we have maliciously failed to disclose a defect or assume a warranty/Gewährleistung for the condition of the goods or to entitlements of the Buyer pursuant to the Product Liability Act.
8. The statute of limitations for claims due to deficiencies or damages inherent in goods delivered by us shall be 5 years as of the delivery of the goods to Buyer. If Buyer, for the structure to be erected by Buyer, has integrated the VOB/B in the version in effect at the time of the execution of the Contract without any deviations and thus effectively agreed upon the statute of limitations pursuant to § 13 Sect. 4 VOB/B, this statute of limitations shall also apply vis-à-vis our company, if permissible by law. In both cases, this shall be contingent upon the goods we have delivered having been processed for a structure in compliance with its usual purpose of use and that the Buyer has chosen the suitable goods in accordance with the purpose of use and that the Buyer has taken into account the specifications for the purpose of use. Other conditions are that the storage and processing of the goods (in particular the processing temperature and times) have been observed and that the goods have caused the deficiency of the structure/final product. In particular, the aforementioned shall be contingent upon the Buyer having processed the goods delivered in bags on palettes within the period stipulated after the packaging date or, if the goods were delivered by us as loose bulk goods and interim-stored by the Buyer or Buyer’s customer as cement in a silo, have been properly processed within 2 months in compliance with the general technical rules after having been properly stored in a dry environment. If Buyer should have altered the delivered goods by adding other product or in any other way, Buyer shall not be entitled to warranty/Gewährleistung coverage, unless Buyer proves that the modification of the composition did not cause the deficiency of the product. We shall not assume liability for deficiencies if the goods have not been properly stored within the timeframe stipulated by us or within the technically required time period and if they have been further processed thereafter. Any further processing of goods for which claims have been filed shall not be permitted.
Principally, our invoices shall be due on the day of issuance and shall be payable at the latest by the due date specified in the invoice without any deductions. Cash discounts based on the rates in effect after the date of delivery shall be granted only subject to prior written agreement to that effect and only if all previous due invoices have been paid. Discounts on the freight portion included in the prepaid freight price shall not be granted. The amount eligible for a discount shall be specified in our invoices.
Any collateral rights and fulfillment obligations the Buyer has transferred to us or entered shall be without prejudice to the due date of our accounts receivable. Moreover, we shall not be under any obligation to satisfy any dues owed to us in advance from the collateral rights or fulfillment obligations prior to demanding payment of our accounts receivable from the Buyer. If automatic account debiting has been agreed upon, Buyer shall undertake to keep the respective funds in the pertinent bank account and to consent to the debiting of the account.
If the agreed upon payment due date should be exceeded, Buyer shall be in default without further notice. In this case, we shall have the right to bill late payment interest in the amount of five percent above the prime rate (if Buyer is a company, eight percent). Moreover, all of our accounts receivable, regardless of any deferrals granted, shall be due for immediate payment. Moreover, we shall have the right to refuse to fulfill the entire Contract or the balance of the Contract and to demand compensation for damages on the grounds of non-fulfillment.
Checks and debit charges to an account shall not be considered payments until they have been honored by the target bank and credited to our bank account. Other costs shall be for Buyer’s account. If payment is made by bank transfer, the bill shall be deemed paid once the amount is credited to our bank account.
Accounts receivable, entitlements, objections – regardless of the type – and/or any offsetting against counter demands, accounts receivable and rights of any kind, may be claimed by Buyer as credits against our accounts receivable or shall be available to Buyer only, if they have been accepted in writing or found to be legally effective by a court of law. Buyer shall not be permitted to exercise any withholding rights from previous or other transactions in the ongoing business relationship.
We shall have the option to demand collateral from the Buyer for our accounts receivable due from Buyer at any time. In the event that Buyer should refuse to provide the demanded collateral, we shall have the option to rescind from the Contract. We shall have the right to offset any accounts receivable, regardless of the type, against any demands of the Buyer, the former is entitled to from us and from any companies affiliated with our company pursuant to § 15 AktG. This shall also apply if the accounts receivable should have different due dates. Companies affiliated with our group of companies are the Spenner Zementwerk Berlin GmbH & Co. KG as well as the Spenner Herkules Rhein-Ruhr GmbH & Co. KG.
In the event that the Buyer should be in default as far as the fulfillment of Buyer’s liabilities vis-à-vis our company are concerned, or should be late paying accounts receivable, have suspended making payments to us or should end up in excessive debit, if Buyer’s assets should become the target of initiated settlement or bankruptcy proceedings or if the initiation of such proceedings should be denied due to lack of assets, or if the asset ratio of the Buyer should decline so significantly that our entitlements or any entitlement of a company affiliated with us pursuant to § 15 AktG that is concretely specified in the above Section 5 due from the Buyer are at risk or if circumstances become known that render the creditworthiness of the Buyer and Buyer’s solvency questionable and in particular if our credit insurance company should terminate or deny coverage for the Buyer or if the Seller should become aware of circumstances that render the financial security and enforceability of Seller’s payment demands questionable, or if the Buyer has made false or incomplete statements during the contractual negotiations or during the performance of the Contract with regard to Buyer’s asset situation or if the Buyer has set off accounts receivable that have not been classified as legally effective by a court of law against our accounts receivable or the accounts of receivable due from Buyer to a company affiliated with us pursuant to § 15 AktG (see above Section 5), we shall have the right to deny services, make further deliveries contingent upon advance payment or provision of collateral and / or demand compensation for damages on the grounds of non-fulfillment pursuant to the statutory provisions and / or rescind from the Contract. If the Buyer should be late or in default of payment of accounts receivable, we shall have the right to revoke any granted discounts or other benefits. The Buyer shall not be entitled to any compensation for damages in these cases.
Moreover, until payment for the goods has been made in full, we shall have the option to prohibit the resale and processing of the goods; we shall have the option to demand the return of the goods or the transfer of direct possession of the goods at Buyer’s expense and revoke the authorization to debit the bank account (pursuant to above Section 1). In these cases, we or our agents shall be authorized to enter Buyer’s operation to seize the delivered goods.
If the Buyer is an entrepreneur or a business and if Buyer’s fulfillment performance should not be sufficient to satisfy all of our demands, we shall determine the debt the payment shall be credit against, even if it is made against current amounts due, whereby we shall give first priority to those debts among multiple debts that offer the least amount of collateral and among multiple equally collateralized debts, the debt that has been due the longest or, in the event that all debts have been due for equal periods of time, we shall apply the payment in a pro-rated manner to each debt.
Until all of our purchase price demands and related ancillary demands (e.g. interest) have been met in full, title to the delivered goods shall be retained by our company. If the Buyer is an entrepreneur or a business, title to the delivered goods shall be retained by us until all demands due to us from the Buyer have been met. The Buyer shall not be permitted to pledge or transfer our goods as collateral. However, Buyer shall be authorized to resell or process our goods as part of standard business transactions, unless Buyer has already effectively transferred to a third party the entitlement due from any contracting party in advance or has entered into an assignment prohibition with the contracting party.
Any processing our goods by the Buyer that results in the creation of a new, mobile asset shall be performed on our behalf with effect for us, without our company entering into any liabilities as a result. We herewith grant the Buyer co-ownership in the new asset based on the ratio of the value of the new asset and our goods (see Sect. 9 below). In the event that Buyer, as a result of the connection, blending or mixing of our goods with other mobile matter should become the sole or co-owner of a uniform new asset, Buyer herewith assigns to us as collateral for the fulfillment of the demands listed in above Section 1 this ownership title at the ratio of the value of our goods (see Section 9) and the value of the other materials. Our co-ownership shall remain effective until all of our demands pursuant to above Section 1 have been met. In the event of the resale of our goods or of the new assets made from / with our goods, Buyer shall undertake to give Buyer’s customers written notice of our ownership title.
As collateral for the fulfillment of our demands (pursuant to above Section 1), Buyer herewith assigns to us all future accounts receivable generated from the resale, processing, or utilization of our goods along with all ancillary rights equivalent to the value of our goods (see Sect. 9), giving it priority over all other accounts receivable due from Buyer to any other party.
In the event that Buyer should sell our goods along with other goods that do not belong to us or as new items made from our goods or if Buyer should combine or blend our goods with a third party land parcel or a third party mobile object and if Buyer should generate accounts receivable as a result, which also covers Buyer’s other dues, Buyer herewith assigns this account receivable and all related rights to us in an amount equivalent to the value of our goods (pursuant to Sect. 9) as collateral for the satisfaction of our accounts receivable (see above Sect. 1), granting our collateral priority over the remaining portion of Buyer’s dues. The same shall apply to the same extent to any other of Buyer’s rights to the granting of collateral pursuant to §§ 648, 648a BGB based on the processing of our goods and in an amount equivalent to all of our pending demands. We herewith accept the assignment declarations made by Buyer. Upon request, Buyer shall document the existence of these accounts receivable in detail and shall make subsequent buyers aware of the assignment with the instruction to pay to our company the amounts up to our entitlements due to us pursuant to above Sect. 1. We shall have the right to notify subsequent buyers of the assignment as well and to collect the accounts receivable. We shall not exercise the rights we have pursuant to these Sentences 4 and 5 and shall not collect the accounts receivable as long as the Buyer duly meets Buyer’s payment obligations.
In the event that the Buyer should collect accounts receivable assigned to us, Buyer herewith assigns any balance accounts receivable in the amount of these portions of accounts receivable to us with priority of any other residual amounts. This shall be without prejudice to our entitlement to the release of the collected amounts to us.
Buyer shall not be permitted to assign to third parties or attach or enter into assignment prohibitions with subsequent buyers with regard to Buyer’s accounts receivable due from subsequent buyers equivalent to the value of our goods (ref. Sect. 9).
Buyer shall keep in Buyer’s custody all objects we hold title or co-title to with commercial due diligence and free of charge. Buyer shall promptly notify us of any attachments made or any other impairments of our rights by third parties and any loss of the objects as well as domicile or company name modifications. Buyer shall hand over to us any documentation required for an intervention and shall cover any intervention costs that cannot be collected from third parties.
If the account is current, collateral provided to us shall be used to collateralize the balance due to us.
The term “value of our goods” as used in the above Article X refers to the total amount of the gross purchased price stipulated in our invoice plus 20 %.
Upon Buyer’s request we shall release any amount of collateral that exceeds the value of our accounts receivable by 20 %.
The place of fulfillment for deliveries shall be the location of risk transfer (VII.). The place of fulfillment for all other rights and obligations shall be Erwitte, Germany. The contractual relationship shall be governed by the laws of the FRG, subject to the exclusion of the UN Convention on the International Sale of Goods.
The place of jurisdiction for all entitlements arising from the contractual relationship and litigation with business professionals, legal entities under public law or public-law-based special entitles, including checking and document proceedings, shall be Seller’s domicile. For a litigation value of up to EUR 5,000 this shall be the competent Local Court Lippstadt and for litigation values starting at EUR 5,000.01, the District Court Paderborn.
This Court shall also be deemed to have jurisdiction if one party to the Contract relocates its place of domicile or residence from the Federal Republic of Germany or if one party’s place or domicile or residence is unknown. This shall also apply in case that contracts have been made with individuals who are not business professionals if claims are raised through court enforced collection proceedings (§§ 688 et seq. ZPO). In the latter case, the Local Court Lippstadt shall be the locally competent court.
If one of the provisions in these Terms and Conditions should be partially or entirely legally ineffective or unenforceable for any reason whatsoever, this shall not affect the effectiveness of the remaining provisions.
The same shall apply if it should be determined that these General Sales and Delivery Terms and Conditions should contain an omission. In lieu of the ineffective and unenforceable conditions or to bridge any gaps, a provision shall be in effect that – to the extent that this is possible under applicable laws – meets the intentions of the Buyer and our company or fulfills the purpose and intentions of the Contract as closely as possible, if the subject matter had been considered when executing the Contract or when inserting it later.
Buyer is herewith made aware of the fact that personal data (name, address, billing data) may be stored, processed and transferred to credit reporting agencies in compliance with the statutory provisions.
In this context, we shall also report data concerning the contract compliant or non-compliant processing of the contractual relationship we enter into with the Buyer to pertinent Credit reporting agencies.


On March 31, 2015, the U.S. Commodity Futures Trading Commission (CFTC) issued no-action relief stating that, with respect to certain legacy special purpose vehicle (SPV) swaps (as more fully described herein), swap dealers would be exempt from complying with certain CFTC regulations, hereafter the “Specified Regulations.”* The Specified Regulations relate to external business conduct standards and swap trading documentation that swap dealers would otherwise be required to adhere to.
Securitization SPVs commonly enter into interest rate, currency, and other types of swaps. When an SPV enters into a swap with a swap dealer, the SPV takes on the credit risk of the swap dealer. The credit rating agencies have developed delinking criteria intended to permit the assignment of a credit rating to the obligations issued by the SPV based on the assets of the SPV and the structural protections of the SPV, rather than on the credit rating of the swap dealer.
These delinking criteria require that provisions be included in the swap documentation which require the swap dealer to take certain remedial actions following the withdrawal, qualification, or downgrade of the swap dealer’s credit rating below certain thresholds. Such remedial actions can include amending a legacy SPV swap or amending and transferring the obligations of the swap dealer under the legacy SPV swap. While such actions typically do not give rise to a change in the economic terms of a swap, any such amendment or transfer may cause a legacy SPV swap to be considered a “new swap” or “swap transaction” for purposes of compliance with the Specified Regulations. Consequently, a legacy SPV swap may become subject to the Specified Regulations solely because of actions taken by the swap dealer and SPV to remediate a credit ratings downgrade.
that was in existence prior to October 10, 2013.
In most cases, securitization SPVs can take action only through third party service providers, such as trustees or administrators. The securitization SPV’s permitted activities are circumscribed by their organizational documents. In addition, contractual provisions in transaction documentation limit the scope and nature of an SPV’s activities, often prohibiting an SPV from entering into new arrangements or modifications of the kind that would be required to enable a swap dealer to comply with the Specified Regulations after a remediation. As a result, many third party service providers have found it difficult to definitively establish that they in fact have the authority to take steps on behalf of the securitization SPV that would enable the swap dealer to comply with the Specified Regulations after a remediation.
Any remedial action taken in accordance with the applicable delinking criteria does not alter the material economic terms of the legacy SPV swap.
For more information, click here to view the text of the No-Action Relief.
* The Specified Regulations include regulations §23.402(b)-(c), §23.430, §23.431(a)-(b), §23.432, §23.434, §23.502(b), §23.504(b)(4)-(6) and §23.701.


text:
The plaintiff contracted with a Swiss company, the defendant, for a machine to be manufactured by the defendant according to the plaintiff's requirements. The plaintiff refused to accept the machine upon an inspection at the defendant's place of business as well as a result of another inspection which took place after the good was delivered to the plaintiff. The plaintiff alleged defects and a lack of conformity with respect to the machine's clock speed, although it was not clear whether an agreement on a certain clock speed had in fact been reached by the parties. The defendant agreed, however, to take the machine back and improve it so that it would meet the requirements as described in the defendant's offer and in the confirmation of the plaintiff's order. In a subsequent letter the plaintiff fixed the deadline for performance and made it clear that after that he would not accept any performance. However, the machine was damaged while being returned to the manufacturer due to its negligent loading. The defendant refused to take delivery and to perform any upgrade, whereupon the plaintiff declared in a letter his refusal to accept performance and sued for the repayment of the payments already made in advance (a claim for damages was dropped on appeal).
The Regional Court dismissed the claim, mainly on the ground that the plaintiff had lost the right to avoid the contract according to article 82 CISG. The Regional Court of Appeal reversed the judgement and the defendant was ordered to refund the down payment on the purchase price made by the plaintiff.
The Court noted that the contract was governed by the CISG under articles 1(1)(a) and 3(1). After the defendant declared his refusal to upgrade the machine and the plaintiff in turn declared his refusal to accept performance, the plaintiff was entitled to declare the contract avoided under articles 45(1), 46, 47, 49(1) CISG. Although the plaintiff did not expressly declare the contract avoided as required by article 26 CISG, his refusal to perform, expressed in writing in connection with the claim for repayment, was considered a sufficient notice of the declaration of avoidance.
The Court then discussed article 82(1), 82(2)(a) CISG which deprives the buyer of his rights under article 49 CISG if it is impossible for him to make restitution of the machine substantially in the condition in which he received it and could not prove that this impossibility was not due to his act or omission. The Court found that the defendant accepted the machine's non-conformity and therefore entered into the obligation to remedy the lack of conformity at his place of business. With regard to the plaintiff's obligations for the carriage of the machine back to the defendant the Court pointed out that according to the initial contract the defendant was bound to arrange for carriage. Therefore, the plaintiff's obligations under the agreement to take the machine back and remedy the lack of conformity also had to be determined applying article 31(c) CISG. The Court found that the plaintiff complied with his obligation to place the machine at the defendant's disposal in a way suitable for shipping, regardless of whether packaging or placing the machine back into its rack might have guaranteed a more secure transport. The loading itself was not part of the plaintiff's obligations under article 31(c) CISG.
Furthermore, the Court ruled that the plaintiff complied with his obligation to preserve the machine as required by article 86 CISG regardless of whether the risk already passed to the plaintiff or not. The facts on record did not indicate that the plaintiff was aware or could have been aware of the improper loading made by the carrier. The Court therefore did not apply article 82 CISG and held that the plaintiff had not lost the right to declare the contract avoided.
The appeal (Berufung) is admissible and, except for the claim for higher interest, it is justified. The District Court (Landgericht) failed to allow Plaintiff [Buyer]'s claim for restitution of paid installments on the purchase price for the wrapping machine that was to be delivered by Defendant [Seller].
I. The District Court correctly held that according to the provisions of Arts. 1(1)(a) and 3(1) CISG, the contract between the parties is governed by the CISG.
II. [Buyer]'s claim for restitution for paid installments is sustainable under Art. 81(2), sentence two, CISG. Contrary to the District Court's judgment, this Court holds that [Buyer] could rely on Art. 49(1) CISG and declare the contract avoided as [Seller] had definitely refused delivery of the purchased goods. Moreover, [Buyer] did not forfeit this right to declare the contract avoided under Art. 82(1) CISG.
1. After damage had occurred during carriage of the goods, [Seller] refused to render the required corrective measures and to deliver a wrapping machine that did conform with the contract. In turn, [Buyer] refused to accept performance, after an additionally set time limit for delivery had expired. Thus, [Buyer] was entitled to declare the contract avoided in accordance with Arts. 45(1), 46, 47 and 49(1) CISG. It is true that the [Buyer] did not make a distinct declaration of avoidance of the contract (Art. 26 CISG) by notice to [Seller], nevertheless his intentions were clearly expressed in a letter dated 29 January 1999, in which he notified [Seller] that he would deny acceptance of any further delivery and asked for reimbursement of installments on the purchase price that were already paid (see Huber, in: Schlechtriem, CISG, 3rd ed., Art. 49 note 29).
2. [Buyer] did not forfeit his claim for restitution (Art. 81(1) CISG) by the provisions of Art 82 CISG, as he cannot be held responsible for the damage that had occurred during the transit. [Seller] delivered the wrapping machine in April 1998. It is undisputed that [Buyer] did not accept the machine as it did not conform with the contract. Instead, [Buyer] gave notice of the lack of conformity and [Seller] agreed to take the machine back to [Seller]'s factory in order to correct the lack of conformity. The Court does not need to inquire as to what corrections [Seller] exactly bound herself to perform. In particular it is irrelevant, whether it was part of the agreement, that the machine should be made adaptable to a certain production speed (or accurate clock rate). However, the letters dated 30 October 1998 and 1 December 1998 clearly indicate, that [Seller] agreed to optimize the machine to the extent that it would meet the standards that had been the basis of the negotiations between [Buyer] and [Seller]. Hence, [Seller] conceded that the machine, as it had been delivered, did not fully conform with the contract, and that the defects had to be remedied. For that reason, [Buyer] was asked to hand the delivered goods back to [Seller], so that the machine could be taken back to the factory.
Irrespective of whether delivery had taken place, or whether the risk for damage had passed or not, in any case [Buyer] was obligated to take all reasonable steps to preserve the goods [Buyer] received, as stated in Art. 86(1) CISG. Yet, this duty was limited to the time when the machine was actually in [Buyer]'s possession, i.e., before [Seller] would take the machine back to [Seller]'s factory. It did not entail the carriage of the machine itself, as this carriage fell within [Seller]'s responsibility. Therefore, [Buyer]'s obligation was only to place the machine ready and fit for transportation at [Seller]'s disposal, just as Art. 31(c) CISG reduces the seller's liability to place the goods at the buyer's disposal at the place where the seller had his place of business at the time of the conclusion of the contract (see: Huber, ibidem, Art. 31(c) CISG note 56; Achilles, UN-Kaufrecht (2000), Art. 31 CISG, note 11). This duty to offer the goods ready and fit for carriage includes all necessary packaging (Huber, ibidem note 55, Achilles, ibidem). As in case of Art. 31(c) CISG, proper stowage would fall within the [Buyer]'s responsibility, it was [Seller]'s obligation to dispatch the machine that [Buyer] placed at [Seller]'s disposal in the present case.
The delivered stand for the machine, which also had to be given back to [Seller], cannot be considered as a part of the package. It must be assumed that packaging was not necessary and that the machine was ready and fit for dispatch and transportation just as it was.
There is no clause in the agreement between [Seller] and [Buyer], that requires the stand to be installed for transportation of the machine. [Seller]'s order to [Seller]'s carrier, given on 17 December 1998, (even provided it had been known to [Buyer]) did not indicate that it was [Seller]'s wish that the machine should only be transported together with its stand. Naturally, a carriage together with the stand would have made the transportation of the machine safer. However, this does not change the fact that the machine was offered to [Seller] in a state in which it was ready and fit for transportation just as it was.
It cannot be derived from the contract that [Buyer] had assumed liability for the proper stowage of the machine on the van of the carrier. Hence, [Buyer] cannot be held responsible for the lack of safety mechanism on the van which caused the damage to the machine. Neither can such a duty of care be drawn from the CMR, which applies as this is a case of transnational transport. As the CMR does not provide for the question of who is responsible for damages due to improper stowage, national law has to be applied subsidiary (Thume (1995), Art 17 CMR, note 31; Thume, in: Fremuth/Thume, Transportrecht (2000), Art. 17 CMR, note 87; Koller, Transportrecht, 4th ed. vor Art. 1 VMR, note 8). According to Art. 28(4) of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch; EGBGB), German law applies, because the carrier was legally seated in Germany when the contract had been concluded, and because the goods had been dispatched in Germany. � 412(1) of the German Commercial Code (Handelsgesetzbuch; HGB) allocates to the consignor liability for secure customary dispatch, provided this would not run counter to commercial custom or good reason. The consignor is the party that entered into the contract with the carrier (Frehmuth, in: Fremuth/Thume, ibidem, � 407 HGB, note 13; Koller, ibidem, note 7). Here, [Seller] must be regarded as the consignor. As � 412(1) of the German Commercial Code only affects the obligations between the consignor and the carrier (Fremuth, ibidem, � 412, note 1), the norm does not impose any liability on [Buyer]. Therefore, the case depends on who actually assumed liability for the stowage of the machine according the agreement between [Buyer] and [Seller]. According to the submissions of [Seller] that had been approved in the judgment of the District Court (Landgericht), it was [Buyer] who, in placing the machine separated from its stand, at the disposal of [Seller], set the main cause for the accident and the damage of the machine. This conclusion cannot be upheld. The main reason for the damage was not the separation of machine and its stand, but it was the improper stowage of the machine on the van of the carrier. This cause does not fall within [Buyer]'s responsibility (see: Leser/Hornung, in: Schlechtriem, Art. 82, note 20). The case would have had to be considered differently if [Buyer] had actually assumed liability for the proper stowage of the goods, or if [Buyer] had been aware, or could have easily been aware of the improper stowage of the machine. In this case, a liability for the preservation of the goods could have been derived from either Art. 86(1) CISG or from the principle of good faith. However, there is no evidence for this being the case.
The testimonies of witness O and witness M. put doubt on [Seller]'s submission that [Buyer] was responsible for the stowage. Both testified that the stowage was not conducted by [Buyer] but by witness O who directed a forklift and its driver. Witness O asserted that he did not receive any instructions from [Buyer] as regards how to dispatch the machine. Hence, a liability of [Buyer] cannot be assumed.
Further, O's testimony does not support [Seller]'s submission that employees of [Buyer] or of a Commissioned Company I. (Gesellschaft mit beschränkter Haftung, GmbH) confirmed the proper stowage of the machine. According to O, the machine had been properly dispatched: It had been fixed on a firm grounding and had been sufficiently secured against falling off the van. O decided that additional safety belts were not necessary. However, O had wrongly estimated the center of gravity of the machine to be lower than it actually was.
[Buyer] does not dispute that he failed to draw O's attention to the relatively high center of gravity of the machine. But this does not constitute a liability of [Buyer] under Art. 82(2)(a) CISG. A duty to warn could have only been laid on [Buyer], if it had been obvious for either himself or for witness M, that witness O grossly underestimated the gravity of the machine and thus failed to take precautions that would have been necessary for a secure stowage. Only under these conditions, would it have been appropriate for [Buyer] to insist on additional safety measures for the dispatch of the machine (see: Achilles, Art. 82, note 7; Staudinger/Magnus, Art. 82, note 22). However, this has not been the case. As transportation and stowage were mandated to a professional carrier, whose qualification to retain a knowledgeable driver was unquestionable, there was no point for [Buyer] whatsoever, that would have raised doubt on the proper dispatch and carriage of the machine.
3. Undisputedly, losses in interest have been suffered. The interest rate due is determined by Art. 45(1)(b), Art. 74, Art. 84(1) CISG. A claim for further interest is not substantiated. In particular, � 288 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) does not apply. Instead, as the CISG does not provide for rate of interest (Achilles, Art. 84, note 2; Staudinger/Magnus, Art. 84, note 9), � 28(2) of the Introductory Act of the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch; EGBGB) refers to the Swiss Law of Obligations (Schweizerisches Obligationenrecht; OR) as the applicable law). Arts. 73 and 104 of the Swiss Law of Obligations determine an interest rate of 5%. A claim for further interest is sustainable only to the extent that had already been granted in the judgment of the District Court (Landgericht).
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Buyer] and Defendant of Switzerland is referred to as [Seller].

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Art. 49
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Art. 31
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Art. 31
Art 17
Art. 17
Art. 1
Art. 28
Art. 82
Art. 86
Art. 82
Art. 82
Art. 82
Art. 45
Art. 74
Art. 84
Art. 84
Art. 84


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(2) The act is consensual but the other person, who is not the spouse of the offender, has not yet attained fifteen years of age and is at least three years younger than the offender.
Acts 1978, No. 239, § 1. Amended by Acts 1981, No. 624, § 1, eff. July 20, 1981; Acts 1984, No. 924, § 1; Acts 1991, No. 654, § 1; Acts 1995, No. 946, § 2; Acts 2003, No. 232, § 1; Acts 2006, No. 103, § 1; Acts 2008, No. 33, § 1; Acts 2011, No. 67, § 1.

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