22 February 1994,
CISG-online 127


A seller and a German buyer reached an oral agreement for the sale of wood. The following day the seller sent a telefax confirming the agreement in writing. The goods were shipped four months later and reached Germany after another month; they were then delivered to a third party to which they had been resold in the meantime by the buyer. After examination of the goods the end purchaser notified the buyer of defects found in the goods. The buyer immediately informed the seller thereof. The seller’s managing director replied announcing that he would go personally to Germany where he intended ‘to market’ the goods himself. The purchase price remained unpaid. The seller later on assigned its claim to a company (assignee) which commenced an action against the buyer to recover the price. The first instance court decided in favor of the assignee and the buyer appealed.



1. According to the provisions of the CISG, the [seller’s] claim for the purchase price arose here from the contract for the delivery of the wood to [buyer], but it was voided before the assignment to plaintiff because of the cancellation of the purchase contract. … The parties, however, cancelled the contract by mutual agreement after [buyer’s] notice of the defects. [Buyer] sufficiently set forth the claimed defects of the wood delivery and clearly expressed at the same time that she considered the defects to be material. On appeal, she further stated she had given notice of the defects to the [seller] on or before July 8, 1992, as proven by the [seller’s] fax letter dated July 8, 1992, which is no longer contested by [seller’s assignee]. The examination of the goods carried out by Company O in the beginning of July 1992 was still timely pursuant to CISG Art 38; the goods had to be sent on to [buyer’s] customer from H—which was known by the [seller]—with the consequence that, according to CISG Art 38(3), the examination could be deferred until the wood delivery had arrived at Company O’s facilities. The objection to the defects, which was raised on or before July 8, 1992, was made within a reasonable time after the discovery of the defects (CISG Art 39), particularly since July 4 and July 5, 1992 were a weekend. It is irrelevant whether [buyer’s] cancellation of the agreement based on the alleged defects was timely, i.e., within a time equivalent to the reasonable time allotted for the notice of defects. Either way, following the notice of defects, the [seller] manifested her intention to cancel the purchase agreement, and [buyer] conclusively agreed hereto. This follows from the [seller’s] written answer concerning the notice of defects, as well as from [buyer’s] further conduct with respect to the agreement. The [seller] had already announced in her letter dated July 8, 1992 that she would come to Germany in order to market the wood herself. In a further faxletter dated July 27, 1992, the [seller] confirmed [buyer’s] notice of defects—with reservations—after examination of the goods (‘not as bad as you claim’), and informed her that she had found a Dutch company which would market the wood for her. This was the latest indication from which [buyer] was able to infer that the [seller] did not want to be bound by the agreement any longer. Because the [seller’s] intention to market the wood herself was expressed without a reservation or limitation, there was no reason, contrary to plaintiff’s argument, to presume that the [seller] only wanted to assist in the marketing, while leaving the responsibility for the marketing with [buyer]. On the other hand, the [seller] could infer from [buyer’s] conduct that [buyer] acquiesced in the cancellation of the agreement, since she neither objected to the letters dated July 8 and July 27, 1992, nor demanded replacement goods free of defects. CISG Art 29(1) expressly permits such a cancellation by agreement. The same rules apply to the formation of a contract to cancel an agreement as apply to the formation of the agreement itself. An offer to cancel can, therefore, pursuant to CISG Art 18(1), not be accepted by silence or inactivity of the other party; together with other circumstances, however, silence can indeed be important and may be interpreted as the acceptance of an offer of cancellation. Such circumstances exist here, because [buyer] not only remained silent but also refrained from further fulfillment of the agreement, specifically from insisting on the delivery of replacement goods or from asserting other warranty claims. Thus, the [seller] lost her claim to the purchase price. […]

There are no specific requirements as to the form in which such agreement to modify/terminate the contract must be made. However, according to Art 29(2), if the written contract contains a clause that any changes to the contract must be made in writing, then the parties are bound by this agreement.


Q 29-2

(a)  What was the contentious factor in the above case (C 29-1)?

(b)  What did the court conclude on this point?

C 29-2

Chateau des Charmes Wines Ltd v Sabaté USA Inc, Sabaté SA,
US CA (9th Cir), 5 May 2003,
CISG-online 76792


Factual Background and Procedural History

The material facts pertinent to this appeal are not disputed. Sabaté France manufactures and sells special wine corks that it claims will not cause wines to be spoiled by ‘cork taint,’ a distasteful flavor that some corks produce. It sells these corks through a wholly owned California subsidiary, Sabaté USA.

In February 2000, after some preliminary discussions about the characteristics of Sabaté’s corks, Chateau des Charmes, a winery from Ontario, Canada, agreed by telephone with Sabaté USA to purchase a certain number of corks at a specific price. The parties agreed on payment and shipping terms. No other terms were discussed, nor did the parties have any history of prior dealings. Later that year, Chateau des Charmes placed a second telephone order for corks on the same terms. In total, Chateau des Charmes ordered 1.2 million corks.

Sabaté France shipped the corks to Canada in eleven shipments. For each shipment, Sabaté France also sent an invoice. Some of the invoices arrived before the shipments, some with the shipments, and some after the shipments. On the face of each invoice was a paragraph in French that specified that ‘Any dispute arising under the present contract is under the sole jurisdiction of the Court of Commerce of the City of Perpignan.’ On the back of each invoice a number of provisions were printed in French, including a clause that specified that ‘any disputes arising out of this agreement shall be brought before the court with jurisdiction to try the matter in the judicial district where Seller’s registered office is located.’ Chateau des Charmes duly took delivery and paid for each shipment of corks. The corks were then used to bottle Chateau des Charmes’ wines.

Chateau des Charmes claims that, in 2001, it noticed that the wine bottled with Sabaté’s corks was tainted by cork flavors. Chateau des Charmes filed suit in federal district court in California against Sabaté France and Sabaté USA alleging claims for breach of contract, strict liability, breach of warranty, false advertising, and unfair competition. Sabaté France and Sabaté USA filed a motion to dismiss based on the forum selection clauses. The district court held that the forum selection clauses were valid and enforceable and dismissed the action. This appeal ensued.



1. The question before us is whether the forum selection clauses in Sabaté France’s invoices were part of any agreement between the parties. The disputes in this case arise out of an agreement for a sale of goods from a French party and a United States party to a Canadian party. Such international sales contracts are ordinarily governed by a multilateral treaty, the United Nations Convention on Contracts for the International Sale of Goods (‘C.I.S.G.’), which applies to ‘contracts of sale of goods between parties whose places of business are in different States … when the States are Contracting States.’ C.I.S.G., Art 1(1)(a), 15 U.S.C.App., 52 Fed.Reg. 6262 (March 2, 1987). The United States, Canada, and France are all contracting states to the C.I.S.G. 15 U.S.C.App. (Parties to the Convention). And none has acceded to the Convention subject to reservations that would affect its applicability in this case. Moreover, because the President submitted the Convention to the Senate, which ratified it, see Public Notice 1004, U.S. Ratification of 1980 United Nations Convention on Contracts for the International Sale of Goods: Official English Text, reprinted in 15 U.S.C.App.; Letter of Transmittal from President Reagan to the Senate of the United States (Sept. 21, 1983), reprinted in 15 U.S.C.App., there is no doubt that the Convention is valid and binding federal law. Accordingly, the Convention governs the substantive question of contract formation as to the forum selection clauses.


II. 2. Under the C.I.S.G., it is plain that the forum selection clauses were not part of any agreement between the parties. The Convention sets out a clear regime for analyzing international contracts for the sale of goods: ‘A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form.’ C.I.S.G., Art 11. A proposal is an offer if it is sufficiently definite to ‘indicate [ ] the goods and expressly or implicitly fix [ ] or make [ ] provision for determining the quantity and the price,’ id., Art 14, and it demonstrates an intention by the offeror to be bound if the proposal is accepted. Id. In turn, an offer is accepted if the offeree makes a ‘statement … or other conduct … indicating assent to an offer.’ Id., Art 18. Further, ‘A contract is concluded at the moment when an acceptance of an offer becomes effective.’ Id., Art 23. Within such a framework, the oral agreements between Sabaté USA and Chateau des Charmes as to the kind of cork, the quantity, and the price were sufficient to create complete and binding contracts.

The terms of those agreements did not include any forum selection clause. Indeed, Sabaté France and Sabaté USA do not contend that a forum selection clause was part of their oral agreements, but merely that the clauses in the invoices became part of a binding agreement. The logic of this contention is defective. Under the Convention, a ‘contract may be modified or terminated by the mere agreement of the parties.’ Id., Art 29(1). However, the Convention clearly states that ‘[a]dditional or different terms relating, among other things, to … the settlement of disputes are considered to alter the terms of the offer materially.’ Id., Art 19(3). There is no indication that Chateau des Charmes conducted itself in a manner that evidenced any affirmative assent to the forum selection clauses in the invoices. Rather, Chateau des Charmes merely performed its obligations under the oral contract.

Nothing in the Convention suggests that the failure to object to a party’s unilateral attempt to alter materially the terms of an otherwise valid agreement is an ‘agreement’ within the terms of Article 29. Cf. C.I.S.G., Art 8(3) (‘In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties.’). Here, no circumstances exist to conclude that Chateau des Charmes’ conduct evidenced an ‘agreement.’ We reject the contention that because Sabaté France sent multiple invoices it created an agreement as to the proper forum with Chateau des Charmes. The parties agreed in two telephone calls to a purchase of corks to be shipped in eleven batches. In such circumstances, a party’s multiple attempts to alter an agreement unilaterally do not so effect. See In re CFLC, Inc., 166 F.3d 1012, 1019 (9th Cir.1999).


Q 29-3

(a)  What does this case say about the interaction between Article 29(1) and Article 19 CISG?

(b)  What is the implication for Article 19(2) in the context of modifications to a contract?

(c)  Do you think this is the correct approach?

C 29-3

BTC-USA Corporation v Novacare et al,
US Dist Ct (Dist Minn), 16 June 2008,
CISG-online 177393



BTC is a Minnesota corporation with its principal place of business in Minneapolis, Minnesota. Novacare and its subsidiary Mougeot-Copy are French entities with their principal places of business in France. Koehler is a German entity with its principal place of business in Germany. Greene resides in New York and is the Secretary, Executive Vice President, and Chief Executive Officer of Koehler America, a subsidiary of Koehler. Defosse resides in France and previously worked for Mougeot-Copy and currently works for Koehler.

BTC is a paper broker that sold carbonless paper during the time periods relevant to the current litigation. To sell carbonless paper, BTC needed a relationship with a paper mill that produces and supplies carbonless paper. In March 2003, a Mougeot-Copy representative approached BTC and proposed that BTC cancel its relationship with its current supplier and represent Mougeot-Copy’s carbonless paper line instead. Defosse and Sebastien Courtois (‘Courtois’) conducted discussions with BTC regarding Mougeot-Copy’s interest in forming an exclusive relationship with BTC. On three instances, Defosse traveled to Minnesota to meet with BTC and its customers, on two of those occasions Courtois joined Defosse. Throughout the negotiations Mougeot-Copy, through Defosse and Courtois, represented that it was interested in a long-term relationship with BTC and was committed to working with BTC in the United States. Finally, on or about March 2004, the parties orally agreed that Mougeot-Copy would be BTC’s sole supplier and BTC would be Mougeot-Copy’s sole distributor in the United States. Accordingly, BTC terminated its relationship with its previous supplier and began taking the necessary steps to sell Mougeot-Copy’s paper. From July through September 28, 2004, BTC placed orders with Mougeot-Copy and received shipments of customer orders and inventory from Mougeot-Copy. During that time, Mougeot-Copy operated under an agreement with Koehler whereby Koehler would sell paper to Novacare, which would then market and distribute the paper under its proprietary trade mark ‘Mougeot-Copy.’ Koehler and Novacare agreed to terminate their relationship in May 2004 when Koehler decided to stop manufacturing carbonless paper for Novacare.

On September 28, 2004, Mougeot-Copy informed BTC that it was exiting the carbonless paper industry and would only supply BTC with carbonless paper until the end of 2004. Mougeot-Copy informed BTC that although it would no longer supply BTC with carbonless paper, BTC could purchase carbonless paper with Koehler. However, Koehler subsequently informed BTC that, contrary to Mougeot-Copy’s representation, Koehler would not supply BTC with carbonless paper.

BTC contends Mougeot-Copy deceived BTC to believe it intended to form a long-term partnership and used BTC to gain access to clients and business information, which it then used to its advantage when it began working with Koehler to sell carbonless paper in the United States. BTC contends that as a consequence, it suffered significant financial losses and serious, permanent damage to its reputation.


In its Motion to Dismiss, Novacare asserts the Court should dismiss the Amended Complaint for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3) or, in the alternative, for failing to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). Novacare contends that BTC agreed to a forum selection clause included in its purchase order agreements requiring that any disputes arising between BTC and Novacare be settled in France. Novacare also asserts that the Court should dismiss BTC’s Amended Complaint because the allegations set forth fail to state a claim for which relief can be granted. Koehler, Greene, and Defosse submitted a motion to dismiss asserting that the Court should dismiss Defosse if it dismisses Novacare for improper venue and that the Court should dismiss Koehler and Greene because it lacks personal jurisdiction over them.

A. Forum Selection Clause—Novacare and Defosse


When BTC needed paper supply from Mougeot-Copy it would place an order by fax or email indicating the quantity and quality of the paper sought and the time and place for delivery. After negotiating the details with BTC, Mougeot-Copy would send BTC a pro forma invoice, which detailed the specifics of the order. The pro forma invoice also included the general conditions of sales, which included the following provision:


Registered office of the Seller (Laval/Vologne, France) is to be considered as elected domicile.

Only gold members can continue reading. Log In or Register to continue