Zahnrad Fabrik Passau v Terex

LORD DAVIDSON'S OPINION.—The pursuers are a corporation incorporated in the Federal Republic of Germany. They sue the present action against Terex Limited, a company incorporated under the Companies Acts and having a place of business at Newhouse Industrial Estate, Motherwell (the company). The company went into receivership in November 1983. The defenders are the company and its joint receivers.

The goods detailed in Appendix 1 are various vehicle axles and transmissions and a single filter. It is common ground between the parties that by a series of contracts entered into between the pursuers and the company between June 1982 and September 1983 the company agreed to purchase from the pursuers the goods set out in Appendix 1. The total price payable was DM 579,891. The goods described were all duly delivered to the company.

The pursuers quote condition 5 of their general terms and conditions as follows: [His Lordship quoted the terms of condition 5 and continued.] The pursuers explain that paragraph 947 (1) of the German Civil Law provides that "where moveable objects are joined together in such a way that they form integral parts of a further individual object, then the various owners become joint owners of this object. Their interest is calculated according to the relative values which the objects had at the time of being linked together."

The pursuers aver that none of the goods supplied by them and described in Appendix 1 have been paid for. They continue as follows: [His Lordship quoted the pursuers' averments in Article 5 of Condescendence and continued].

In reply the defenders contend that, assuming Condition 5 has been validly incorporated into the sale contracts, it is invalid in Scots law. They also make the following averments in Answer 5 about the goods which the pursuers supplied: [His Lordship quoted Answer 5 and continued].