Part Payment, Conflicting Standard Terms, and a Late Defects Counterclaim
On 3 March 2020 Alpenpump GmbH of Linz delivered 340 centrifugal pumps to Nordmarkt Handels AG, registered in Munich, under a purchase order that said nothing about governing law or forum. Alpenpump's order confirmation, emailed the same day and never objected to, provided 'Austrian law; exclusive forum Vienna' and a twelve-month defects notification period. The €412,000 invoice fell due on 2 April 2020.
Nordmarkt paid €164,800 on 12 January 2022 with the remittance line 'part payment, invoice 8871'. Cracks in eleven pump housings appeared in September 2022; Nordmarkt notified Alpenpump on 14 November 2022 and counterclaimed for €96,000 in repair costs. Alpenpump sued in Vienna on 5 February 2024 for the balance. Nordmarkt pleads that the claim is time-barred and that the pumps were defective from delivery; Alpenpump replies that notification was late and that the confirmation's terms govern. Neither party disputes delivery and acceptance.
1. Is Alpenpump's claim for the balance time-barred? Work through the running of the period, identifying the operative dates and any interrupting event.
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The analysis turns on three dates and one act of acknowledgment.
The period. On the assumed three-year period for contractual debts, time starts the day after performance falls due, that is 3 April 2020, and would expire on 2 April 2023. A suit filed on 5 February 2024 would therefore be late - but only if nothing interrupted the clock.
Acknowledgment. The 12 January 2022 payment of €164,800 was expressly designated 'part payment, invoice 8871'. A part payment made by a debtor who knows the debt is an acknowledgment of the whole obligation, not merely of the sum paid; a debtor does not buy the benefit of the limitation defence by paying less. The acknowledgment restarts the period, so a fresh three years ran from 12 January 2022 and expired on 12 January 2025.
Result. The claim filed 5 February 2024 is within time for the outstanding €247,200. Two subsidiary points matter. First, the acknowledgment must be attributable to the debtor; a payment by a third party, or one made 'ex gratia' or 'without prejudice', would not qualify - the remittance line here is unqualified. Second, limitation is an affirmative defence that Nordmarkt has pleaded, so Alpenpump should prove the payment and its exact wording, with the bank record, rather than merely allege it. Even on the debtor-favourable view that acknowledgment restarts time only for the amount acknowledged, the €164,800 is plainly within time; the balance survives because the wording acknowledges the invoice, not a compromise sum.
2. Do the confirmation's forum and governing-law clauses bind Nordmarkt, and what should the Vienna court do about its own jurisdiction?
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The court cannot reach the merits before deciding which terms were incorporated - and the forum clause is the term whose incorporation decides whether it may sit at all.
Offer and acceptance. The purchase order was the offer. The confirmation purported to accept while adding terms. Under the mirror-image rule, an acceptance with material additions is a counter-offer, and forum, governing law and shortened notification periods are material. On that analysis no contract was concluded on the confirmation's terms.
Performance and silence. Both parties are merchants and performance followed without objection. In several continental systems a merchant's failure to object to a confirmation it should have expected to govern the contract makes the added terms part of the bargain (the commercial-confirmation doctrine). The outcome therefore turns on facts not yet in the file: was the confirmation received and filed; is confirming customary in the pump trade; did Nordmarkt's own order contain a defensive clause ('these terms prevail') that neutralises any confirmation? If so, silence cannot help Alpenpump.
Consequence. If the clause is incorporated, Vienna has jurisdiction and Austrian law applies. If not, jurisdiction follows the general rule, defendant's domicile in Munich, and the Vienna court must dismiss for lack of jurisdiction of its own motion; a defendant's appearance on the merits does not cure a defect that the parties cannot waive by conduct once the clause fails.
Advise Alpenpump to plead the confirmation, the course of dealing and the absence of objection; advise Nordmarkt to attack receipt and to point to any defensive clause in its purchase order.
3. How should the court treat Nordmarkt's €96,000 defects counterclaim?
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Two barriers stand in the way - the notification period and its incorporation - and one route may bypass both.
The clause. A twelve-month notification period is short for industrial pumps but is common between merchants and generally valid in business-to-business dealings, subject to control of standard terms; it will be struck only if it is unusual, undisclosed, or deprives the buyer of the essential remedy. It formed part of the confirmation, so it binds Nordmarkt only if the confirmation's terms were incorporated - the same answer that decides the forum question, which is why the two issues should be argued together.
Application. Cracks appeared in September 2022, roughly thirty months after delivery. Notification on 14 November 2022 came about twenty months after the twelve-month period expired. Even measuring from discovery rather than delivery, the buyer must show it inspected and could not have found the defect earlier. A latent metallurgical fault may satisfy that; visible cracks in housings generally will not.
The escape route. A seller cannot rely on a contractual notification period where it knew of the defect and stayed silent, or where it gave a separate quality guarantee. Nordmarkt should plead knowledge - internal test reports, complaints from other buyers of the same pump series - and any express warranty overriding the period.
If neither incorporation nor concealment is established, the counterclaim fails whatever the pumps' actual quality, and the court should not reach the technical merits. If concealment is proved, the period never runs and the €96,000 is available as a set-off even against a claim that is otherwise time-barred on its face.