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CISG CASE PRESENTATION

France 13 December 1995 Appellate Court Paris (ISEA Industrie v. Lu) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/951213f1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19951213 (13 December 1995)

JURISDICTION: France

TRIBUNAL: CA Paris [CA = Cour d'appel = Appeal Court]

JUDGE(S): Cahen-Fouque (président); Trochain, Linden (conseillers); Devin (avocat)

CASE NUMBER/DOCKET NUMBER: 95-018179

CASE NAME: Sté ISEA Industrie S.p.A./Compagnie d'Assurances Generali v. Lu S.A./ et al.

CASE HISTORY: 1st instance Tribunal de commerce de Paris 8 June 1995 [reversed]

SELLER'S COUNTRY: Italy (defendant)

BUYER'S COUNTRY: France (plaintiff)

GOODS INVOLVED: Packaging for biscuits


Case abstract

FRANCE: Paris Court of Appeal 13 December 1995

Case law on UNCITRAL texts (CLOUT) abstract No. 203

Reproduced with permission from UNCITRAL

A French [buyer] placed an order with an Italian [seller] for outer wrappings of packets of biscuits. The order form of the French [buyer], which carried on its reverse side a jurisdiction clause in favour of the Commercial Court of Paris, was sent back by the Italian [seller] with its representative's signature. Ten days later, the Italian [seller] confirmed the order, referring to its sales conditions, which included a jurisdiction clause in favour of the Court of Tortona.

Considering the wrappings sold to be defective, the French buyer sued its seller before the Commercial Court of Paris. Having raised a plea asserting lack of jurisdiction, the seller lodged an objection, invoking articles 18 and 19(2) CISG, but the Court of Appeal of Paris ruled to retain its jurisdiction.

In order to determine its jurisdiction, the Court of Appeal of Paris found that CISG was applicable since the sales contract had been concluded between two contracting parties with their places of business in two different States parties to CISG (article 1(1)(a)).

The Court noted that, in conformity with article 18(2) CISG, the contract had been formed at the moment the French [buyer] received the order form [that was returned to the buyer with the signature of seller's representative affixed thereto]. It considered, however, that in the absence of an explicit reference on the front side of the form to the sales conditions indicated on the reverse side, the seller could not be deemed to have accepted those conditions. The Court of Appeal of Paris likewise rejected the applicability of the general sales conditions of the Italian [seller] on the ground that the confirmation of the order, which was subsequent to the formation of the contract, was to be interpreted as a counter-offer within the meaning of article 19(1) CISG and was rendered absolutely inapplicable by the lack of acceptance by the buyer.

Referring to articles 35(1) and 35(2)(a) CISG, the Court concluded that these provisions linked the delivery and conformity of the goods with their use in such a way that the corresponding obligations were performed or were to be performed in the same place. The Court consequently found that, since the goods had been delivered on the premises of the French [buyer] located in Lorient, the dispute came under the jurisdiction of the Commercial Court of Lorient.

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 18(2) [Also cited: Articles 19 ; 35 ; 36 ] [Also relevant: Article 23 ]

Classification of issues using UNCITRAL classification code numbers:

4B1 [Validity (standard terms and conditions): the court stated that in the absence of an explicit reference on the front side of the buyer's form to the sales conditions indicated on the reverse side, the seller could not be deemed to have accepted those conditions];

18B [Formation of the contract: acceptance, time and manner]

Descriptors: Acceptance of offer ; Battle of the forms ; Validity ; Standard terms and conditions ; Jurisdiction

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Editorial remarks

Excerpt from Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 347

"While the CISG does not specifically address the incorporation of standard terms, national courts generally agree that its provisions on contract formation and interpretation determine whether standard terms have been validly incorporated into the contract. An alternative view is that Article 4 makes it clear that the validity of standard terms is beyond the scope of the Convention, so that validity issues are determined by domestic law.[259] Civil law legal systems have emphasized that a party must be reasonably aware of the terms the other seeks to incorporate but how much information about standard terms must be communicated is less clear from the decisions.

"In general, a party that wishes to incorporate standard terms must show good faith efforts to communicate those terms to the other party. Failure to provide standard terms in the other party's language, failure to note that standard terms are listed on the back of a form, and failure to provide the text of standard terms have lead courts to exclude such terms from the contract. In ISEA Industrie S.p.A. v. Compagnie d'Assurances,[260] a French court held that where the buyer's standard terms were printed on the back of a form and the seller had signed only the front page, the standard terms were not part of the contract. The court held that the terms of the contract had already been determined and the seller's attempt to impose additional terms was ineffective. A German court, however, held that where standard terms were printed on the back of the order form in both parties' languages and the front side of the order form specifically referred to the standard terms, the terms were validly incorporated into the contract.[261] Likewise, where an offer made reference in bold letters to particular industry standards and the seller made repeated reference to such standard throughout negotiations, the buyer was aware or should have been aware that the general conditions were part of the agreement, according to Articles 8(1) and (3).[262]"

259. See Dr. Martin Schmidt-Kessel, On the Treatment of General Terms and Conditions of Business under the UN Convention on Contracts for the International Sale of Goods (CISG), available at <http://cisgw3.law.pace.edu/cases/011031g1.html> (criticizing interpretation of German Federal Supreme Court of 31 October 2001, VII ZR 60/01 in which the Supreme Court held that "the user of general terms and conditions is required to transmit the text to the other party or make it available in another way").

260. Cour d'appel [Appeal Court][C.A.] Paris 95-018179, Dec. 13, 1995 (Fr.), available at <http://cisgw3.law.pace.edu/cases/951213f1.html> [English translation by Charles Sant 'Elia]. In the same case, the court held that standard terms in a confirmation letter from the seller were not valid when the letter was sent after the contract had been performed.

261. Amtsgericht [Petty District Court][AG] Nordhorn 3 C 75/94, Jun.14, 1994 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/940614g1.html> [English translation by Ruth M. Janal].

262. [...] Tribunal [District Court] de Commerce Nivelles, [Kh] R.G. 1707/93, Sept. 19, 1995 [(Belg.)], available at <http://cisgw3.law.pace.edu/cases/950919b1.html> [English translation by Julien Soupizet, translation edited by Thalia Kruger].

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=174&step=Abstract>; [1999] Transportrecht, Beilage "Internationales Handelsrecht" (TranspR-IHR) 7

Italian: Diritto del Commercio Internazionale (1997) 757-758 No. 172

CITATIONS TO TEXT OF DECISION

Original language (French): CISG - France website ("http://Witz.jura.uni-sb.de/CISG/decisions/131295v.htm"); Juris Classeur Periodique, La Semaine Juridique (1997-II), No. 22772 [53-55]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=174&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Perales, 10 Pace International Law Review (1998) 97-155 at n.105 [formation rules of CISG used to determine inclusion of general conditions on back of form]; Schmidt-Kessel, On the Treatment of General Terms and Conditions of Business under the CISG (2002) n.19; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.260, 538, 571; [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 56; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 18 para. 4 Art. 19 para. 7; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 157

French: Pascal de Vareilles-Sommières, Juris Classeur Periodique, La Semaine Juridique (1997-II), No. 22772 [55-57]

Spanish: Perales, Revista Jurídica (Perú 1997) No. 13, 241-262

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Court of Appeals of Paris, 13 December 1995
Isea Industrie S.p.A. et al. v. SA Lu et al.

Translation [*] by Charles Sant 'Elia [**]

FRENCH REPUBLIC
IN THE NAME OF THE FRENCH PEOPLE

[...]

[FACTS AND PLEADINGS]

The Lu company [Buyer] manufactures, under the brand "l'Alsacienne", the "Palmito" cookies which are in turn distributed by the Alsacienne company, in whose rights the Belin company stands.

In the framework of its business relations with the Italian company Isea [Seller], which go back twenty years, the [Buyer] ordered on 26 March 1991 from the latter a 300 000 m2 of Palmito Alsacienne packaging material, destined for the external wrapping of the cookies. [Buyer]ís general purchase conditions appear on the back of the order form. They include a forum selection clause in favor of the Commercial Court of Paris. This order form was returned by [Seller] with the signature of its representative under the endorsement " the agreed supplier"; it was received on 5 April 1991.

On 23 April 1991, [Seller] sent to [Buyer] confirmation of the order, which bore on the reverse the language "we thank you for your order which we have accepted pursuant to our terms of sale". These conditions, which appear on the back, include a forum selection clause in favor of the Court of Tortona [Italy].

The goods were delivered in May 1991 at the premises of the [Buyer], in Lorient [France].

Maintaining that an abnormally high number of consumers had complained of the taste and odor of the cookies, [Buyer] and l'Alsacienne sued [Seller] and its insurance company, Generali (headquartered in Trieste [Italy]) on 29 March 1994 before the Commercial Court of Paris. Plaintiffs sought a declaration of liability and payment of damages and interest. [Seller] and Generali raised an objection for lack of jurisdiction respectively in favor of the jurisdiction of Tortona and of Trieste.

By ruling of 8 June 1995, the Commercial Court of Paris retained jurisdiction considering that, by its signature without exceptions on [Buyer]ís order form, [Seller] had implicitly accepted the general purchase conditions of the former and, as far as concerns Generali, by applying Article 10-1 of the Brussels Convention of 27 September 1968.

[Seller] and the Generali have brought an appeal seeking reversal. [Seller] maintains that it did not accept [Buyer]ís purchase terms and invokes the forum selection clause appearing in its general terms of sale, under which, according to it, were placed the entirety of the sales between the parties for twenty years; it bases itself in that regard on the provisions of Articles 18 and 19(2) of the [CISG].

Additionally, [Seller] maintains that the obligation serving as basis for the demand, within the meaning of Article 5-1 of the Brussels Convention, is one of conformity, which, distinct from the obligation of delivery by virtue of Articles 35 and 36 of the [CISG], had been performed at the place of manufacture of the packaging, in Italy. As far as concerns Belinís action, [Seller] elaborates the same reasoning by recognizing the applicability of Article 5-1 of the Brussels Convention. Generali joins [Seller]ís argument and in addition relies on the fact that a direct action against an insurer does not exist under Italian law.

The [Buyer] and Belin challenge the appeal for reversal, for the reasons held by the trial court judges; they further maintain that [Seller]ís general terms of sale were never accepted. Additionally, they consider the obligation of conformity, foreseen by Articles 35 and 36 of the [CISG], not to be distinct from the obligation of delivery and that it was performed at the place of delivery, at the premises of [Buyer], in France. As to the actions brought against Generali, [Buyer] and Belin base themselves on the provisions of Articles 9 and 10 of the Brussels Convention.

Each of the parties seeks application of Article 700 of the New Code of Civil Procedure.

[REASONING OF THE COURT]

The parties being domiciled respectively in France and in Italy, jurisdiction must be determined in accordance with the provisions of the Brussels Convention of 27 September 1968.

On the action of the [Buyer] against the [Seller]

I. - On the Applicability of Article 17 of the Brussels Convention

With each of the parties invoking a different forum selection clause, it is proper in the first place to find whether one of these clauses is applicable compared with the provisions of Article 17 of the Brussels Convention.

By the terms of that treaty, such as it results from the Saint-Sťbastien Convention of 26 May 1989, the forum selection agreement must be formed in writing; [if] orally evidenced with written confirmation, it must be in a manner that conforms to the practices that the parties have established between them, be in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

France and Italy being parties to the [CISG] at the date of the formation of the contract between [Buyer] and [Seller], which have their respective (siŤge) principal places of business in these two States, this Convention is applicable to this contract, by virtue of its Article 1(1)(a).

According to Article 18(2) of the [CISG], the acceptance of an offer takes effect at the moment the indication of assent reaches the offeror. Article 19 of this Convention provides in paragraphs 1 and 2:

"A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.

"However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance".

The disputed contract falls within the framework of the present business relations.

It is clear from the evidence produced during the argument that [Buyer] sent [Seller] some order forms bearing on the back its general terms of purchase, which include a forum selection clause in favor of the Commercial Court of Paris, but without any reference being made, on the front of the document, to these general conditions. For its part, [Seller] systematically confirmed its acceptance of the order by a document referring to its general terms of sale bearing a forum selection clause in favor of the jurisdiction of Tortona [Italy].

The disputed sale was formed, by application of Article 18(2) of the [CISG], at the moment when [Buyer] received the order form returned by [Seller] with the signature of its representative, that is, on 5 April 1991.

Bearing in mind the absence, on the reverse side of that form, of an express reference to the general terms of sale appearing on the back, the [Seller] cannot be considered to have accepted the latter. The confirmation of the order on 23 April 1991, which contains the general terms of sale, being subsequent to the date of contract formation, cannot be analyzed as a counter-offer within the meaning of Article 19(1) of the [CISG]; consequently, [Buyer]ís silence is stripped of its import.

It thus appears that neither of the forum selection clauses meets the requirements of Article 17 of the Brussels Convention.

II. - On the Application of Article 5-1 of the Brussels Convention

According to Article 5-1 of the Brussels Convention, the defendant in a contractual matter may be sued in the court of the place where obligation which serves as basis for the demand has been or should have been performed. This place is determined by the law which governs the disputed obligation according to the rules of conflict of the seized jurisdiction. In the case at bar, this would be Italian law for the reasons expounded below.

The disputed obligation is an obligation of conformity. According to Article 35(1) and 35(2)(a) of the [CISG], the seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract. Except where the parties have agreed otherwise, the goods do not conform with the contract unless they are fit for the purposes for which goods of the same description would ordinarily be used.

It results from these provisions, which link the delivery and the conformity of the goods to their purpose, that the corresponding obligations are performed or should be performed at the same time. In the case at bar, the delivery was performed, pursuant to what was agreed by the parties, at the premises of the [Buyer] company, in Lorient [France]. The disputed obligation of conformity thus had to be performed in that place, in such a way that the suit falls within the jurisdiction of the Commercial Court of Lorient.

On Belinís action against [Seller]

[Seller] does not contest the applicability of Article 5-1 of the Brussels Convention to the action brought against it by Belin, the subsequent purchaser from [Buyer]. For the reasons expounded below, the suit falls within the jurisdiction of the Commercial Court of Lorient.

On the [Buyer]ís and Belinís action against Generali

By virtue of Article 10, paragraph 1, of the Brussels Convention, in the sphere of liability insurance, the insurer can likewise be called before the court seized of the action by the injured party against the insured if the law of that court allows it.

French law authorizes a direct action by the injured party against the insurer of the liable party. The Commercial Court of Lorient is competent to hear the [Buyer]ís and Belinís suit against the Generali company (...).

FOR THESE REASONS

The Court holds that the present dispute falls within the jurisdiction of the Commercial Court of Lorient, and remands the action and the parties before that jurisdiction (...).


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Defendant of Italy is referred to as [Seller] and the Plaintiff of France is referred to as [Buyer]

** Charles Sant 'Elia has a B.A. in Political Science and Italian Literature from New York University and studied Political Science at the UniversitŠ degli Studi di Firenze. He received his J.D. from Pace University School of Law and is admitted to the Bar of the States of New York and Connecticut.

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Pace Law School Institute of International Commercial Law - Last updated December 2, 2005
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