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CISG CASE PRESENTATION

United States 28 October 2004 Federal District Court [California] (Comerica Bank v. Whitehall Specialties, Inc.)
[Cite as: http://cisgw3.law.pace.edu/cases/041028u1.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 20041028 (28 October 2004)

JURISDICTION: United States [federal court]

TRIBUNAL: U.S. District Court, Central District of California, Eastern Division [federal court of 1st instance]

JUDGE(S): Robert J. Timlin

CASE NUMBER/DOCKET NUMBER: EDCV 04-744 RT (SGLX)

CASE NAME: Comerica Bank, as agent for itself and for Lasalle Business Credit, Inc., HSBC Business Credit (USA), Inc., and GMAC Commercial Credit, LL.C. v. Whitehall Specialties, Inc., Steve Fawcett, Cees Wit, John Lynch, individuals, and Does 1 through 50, inclusive

CASE HISTORY: Unavailable

SELLER'S COUNTRY: United States (plaintiff)

BUYER'S COUNTRY: United States (defendant)

GOODS INVOLVED: Cheese


Case abstract

U.S. District Court, C.D. California, Eastern Division

Comerica Bank et al. v. Whitehall Specialties, Inc. et al.

28 October 2004 [No. EDCV 04-744 RT(SGLX)]

353 F.Supp.2d 1077

This is a proceeding between two U.S. firms with the following references to the CISG.

The CISG was not applicable. The court distinguishes the CISG from California's U.C.C.

Robert J. Timlin, District Judge.

[...]

"Defendants cite Chateau des Charmes Wines, Ltd. v. Sabate USA, Inc., 328 F.3d 528 (9th Cir.2003), in support of their argument that the forum selection clause is not a part of the oral contract between A & J Cheese and Whitehall. In that case, the Ninth Circuit addressed the issue of whether invoices containing a forum selection clause modified an oral sales contract under the United Nations Convention on Contracts for the International Sale of Goods ("C.I.S.G."). Id. at 531. Chateau [page 1083] Des Charmes, a winery in Ontario, Canada, orally agreed over the telephone to purchase a number of corks from Sabate USA. Id. at 529. Sabate France made eleven shipments of corks to Chateau Des Charmes, each of which contained an invoice with a forum selection clause providing for the resolution of disputes in 'the Court of Commerce of the City of Perpignan.' Id. Chateau Des Charmes found tainted corks and sued Sabate USA and Sabate France for breach of contract, among other claims, in federal district court in California. Sabate USA and Sabate France moved to dismiss based on the forum selection clause, which the district court granted. Id.

"The Ninth Circuit found that Sabate USA and Sabate France had attempted to modify their oral agreement with Chateau Des Charmes by including a forum selection clause in the invoices. Id. at 531. The Ninth Circuit noted that the C.I.S.G. allowed for the modification of a contract based on the 'mere agreement' of the parties. Id. (quoting C.I.S.G. art. 29(1)). The C.I.S.G. also specifically provided that the modification of a contract to include a forum selection clause was a material alteration. Id. Considering the facts of the case, the Ninth Circuit stated that '[n]othing 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.' Id. According to the Ninth Circuit, there was 'no indication that Chateau des Charmes conducted itself in a manner that evidenced any affirmative assent to the forum selection clauses in the invoices.' Id. The Ninth Circuit rejected the notion that, pursuant to the C.I.S.G., Chateau des Charmes accepted the offer merely by performing its obligations under the oral contract. Id. Since the forum selection clause was not part of the contract, the Ninth Circuit reversed the district court's dismissal of the case based on the forum selection clause. Id. at 531-32.

"This court finds that Chateau des Charmes Wines, Ltd. is distinguishable from the instant case. The Ninth Circuit decided that case pursuant to the C.I.S.G., which did not allow for the modification of a contract by one party failing to object to the other party's unilateral attempt to modify its terms. Id. at 531. This case, however, is governed by California's U.C.C., which states that '[w]here the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.' Cal. Com. Code 2208(1). California's U.C.C. also does not expressly provide that the modification of a contract to include a forum selection clause is a material alteration of the contract. Here, Whitehall accepted and acquiesced to A & J Cheese's repeated inclusion of a forum selection clause in the invoices because Whitehall failed to object to it despite numerous opportunities do so. Due to these material differences between the C.I.S.G. and California's U.C.C., Chateau des Charmes Wines, Ltd. does not control this case."

[...]

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Classification of issues present

APPLICATION OF CISG: No

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 18(1) ; 19(3) ; 29

Classification of issues using UNCITRAL classification code numbers:

18A3 [Criteria for acceptance of offer: silence or inactivity in and of itself insufficient];

19C [Modifications to offer that are material];

29A [Modification of contract by agreement]

Descriptors: Acceptance of offer ; Modification of contract

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (English): 352 F.Supp.2d 1077

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Pace Law School Institute of International Commercial Law - Last updated March 4, 2005
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