By notarial contract the plaintiff sold the defendants a plot of land on which a single family house, designed for occupation by the plaintiff and his wife, had recently been erected. While the house was being built, and long before entering into the contract of sale, the plaintiff had purchased a large quantity of furniture and fittings, at a total price of about 20,000 DM, much of it being custom made, such as cupboards and kitchen cabinets. The furniture and fittings were installed in the house, but the plaintiff never occupied it, so he was eager to sell them with the property, as he had no real use for them. The defendants started using the furniture as soon as they moved into the house, and are still using it today. They gave the plaintiff a cheque for 2,000 DM, but the plaintiff contends that a sale price of 20,000 DM had been agreed, and now sues for 18,000 DM. The defendants deny that there was ever any contract about the furniture, as no agreement about the price ensued from the negotiations. The Landgericht gave judgment for the plaintiff, and the defendant's appeal was mainly unsuccessful.
I. The plaintiff has a claim for 18,000 DM under para. 433 BGB. A contract for the sale of these fitments did come about between the parties.
1. The evidence does not make it absolutely clear that the parties expressly agreed on a price of 20,000 DM.
2. But under the special circumstances of this case the failure to agree on the price is not fatal to the formation of a contract of sale. It emerges from the whole evidence that the parties concluded a contract of sale with the peculiarity that it should be left for further negotiations to determine a fair price.
(a) It is true that in a case of doubt parties are held not to have made a contract until they have agreed on all the points which need agreement (para. 154 BGB), and both parties here realised that there should be agreement on the price. But this principle applies only 'in cases of doubt' (para. 154 BGB), that is, it only gives rise to a presumption which is capable of being rebutted. It does not prevent the parties from entering into legal obligations although certain details of the transaction are still unregulated which one or both parties wish clarified (...). The principle of freedom of contract requires that people should be able to leave even essential points open, such as the purchase price in the present case (see BGH, NJW 1964, 1617), without impairing the contractual obligation which the parties wish to achieve.
(b) In the present case there was an agreement of this kind. It is common ground that the plaintiff wanted to sell the furniture along with the land, and as the defendants themselves say, they were in principle ready to take over the furniture, even if they had a somewhat different price in mind. It is not to be supposed that in such circumstances the plaintiff gave the defendants possession of the furniture, with all the risk of wear and tear, without there being any legal obligation between the parties at the time. Doubtless it would not have been easy for the plaintiff to sell the new furniture very favourable elsewhere, but he could hardly sell it at all once it was used. The plaintiff's letting the defendants possess and use the furniture before there was any agreement as to the price must, in good faith, be treated as an offer for sale at a price which remained to be determined, and the defendants accepted this offer by beginning to use the furniture. The circumstances were all well-known to them. They could not reasonably suppose that the plaintiff was selling them the house without any agreement about the furniture, or that he was letting them use it without any obligation to buy it at a price still to be fixed. It is worth noting that the price mentioned for these items was quite small in relation to the price of the house, only about 5%.
Under these circumstances the defendants' taking possession of the furniture and making use of it is conduct which ranks as an acceptance of the plaintiff's offer (para. 133 BGB). If this was not the defendants' intention, it was for them to make this clear to the plaintiff, and they did not do so. Any secret reservation the defendants may have had about buying the furniture when they took possession of it can be disregarded (para. 116 BGB).
The court has also considered whether the agreement may not be merely a precontract with an obligation to conclude the sale contract later, but such a construction overlooks the point that the plaintiff has already performed one of the seller's essential obligations by putting the defendants in possession and giving them use of the chattels being sold.
The defendants can obtain no assistance form para. 147 BGB, whereby an offer made to a person actually present must be accepted forthwith. The offeror may extend the period for acceptance at any time, and may do so implicitly (reference omitted). On a reasonable construction, the plaintiff's offer to sell the furniture to the defendants before any price was fixed was to last at least until the defendants moved into the house which had the furniture in it; proper acceptance duly took place. The view that a contract of sale was formed is further strengthened by the fact that the defendants have paid 2,000 DM. This may not show that any price was agreed, but it does show that the parties agreed that the defendants be bound to buy the furniture at a price yet to be hit upon.
(c) It is actually in the interests of both parties that the defendants should keep the furniture and pay a price still to be fixed. The defendants have often said that they were ready to keep the furniture, and the plaintiff cannot put it to any economic use. If no sale contract exists, the defendants will not only have to give up the furniture but also, after being credited with the 2,000 DM they have paid, pay the plaintiff the value of the use of the furniture, which in the case of new furniture is very high, until such time as they call upon him to remove it; furthermore, they will need to buy new furniture although, as has been said, they are quite happy with what they have. Both parties are experienced people and it must have been clear to them that unreasonable consequences of this kind would ensue if the furniture were used without there being any contract about it. This confirms the conclusion that the possession was handed over definitively and pursuant to a contract of sale.
3. There having been proof of the price which the defendants are thus bound to pay, it must be filled in by apt contractual construction (para. 157 BGB; ...). The parties must, as reasonable people, have intended to agree on a fair price. There is nothing to suggest that either party was to have a right of determination under para. 315 BGB. As the defendant unanswerably argued, the purchase price was to be agreed, not laid down, especially not laid down by the plaintiff (para. 316 BGB). If the parties do not agree, and if neither party nor any third party has a right of determination, the determination of the fair purchase price which the defendants are bound to pay can only be made by the court.
This page last updated Thursday, 01-Dec-2005 11:04:42 CST. Copyright 2007. All rights reserved.