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United States 13 April 2006 Federal District Court [State of Washington] (Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.)
[Cite as: http://cisgw3.law.pace.edu/cases/060413u1.html]

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

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Case identification

DATE OF DECISION: 20060413 (13 April 2006)


TRIBUNAL: U.S. District Court, Western District Washington at Tacoma [federal court of 1st instance]

JUDGE(S): Franklin D. Burgess, District Judge


CASE NAME: Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.

CASE HISTORY: 2d instance Circuit Court of Appeals [9th Circuit] 8 November 2007 [reversing and remanding]

SELLER'S COUNTRY: United States (defendant)

BUYER'S COUNTRY: Mexico (plaintiff)

GOODS INVOLVED: Raspberry roots

Classification of issues present



Key CISG provisions at issue: Articles 4(a) ; 7 ; 9(2) ; 18(1) and (3)

Classification of issues using UNCITRAL classification code numbers:

4B1 [Scope of Convention (issues excluded): validity under domestic law];

9B [Implied agreement on international usage];

18A2 ; 18C [Acceptance of offer by conduct indicating assent; Assent by performing an act]

Descriptors: Scope of Convention ; Validity ; Usages and practices ; Acceptance of offer

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Editorial remarks

Excerpt from Ved P. Nanda & David K. Pansius, "Litigation of International Disputes in U.S. Courts", Volume 2, Thomson West (2005-2007). Portions of Section 12:9 of this text are reproduced below with the permission of the publisher.

The Convention deals only with the formation of the contract and rights under the contract. It does not deal with matters beyond the contract notwithstanding that the matters have some connection to the contract.

Article 4 states:

This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract, in particular, except as otherwise expressly provided in this Convention, it is not concerned with:
(a) the validity of the contract or of any of its provisions or of any usage;
(b) the effect which the contract may have on the property in the goods sold.

Per the terms above, the CISG does not apply to persons other than the buyer and seller. CISG rules generally do not apply to third parties, absent some special considerations such as agency.[1]

The CISG does not address whether the contract is valid (in the sense of proper capacity, public policy, etc.) under applicable law (either national or provisions of some multilateral agreement). Unfortunately, some courts have expansively interpreted "validity" to include whether or not a term became a part of the contract. "Validity" should be interpreted as whether a term that is part of the contract under the CISG would be enforced.

Overly broad views of "validity" can be employed to base a decision on the U.C.C. rather than the CISG. The Berry decision from the Western District of Washington provides such an example.[2] The court clearly wished to confirm the application a disclaimer of liability that benefited the Washington seller in a dispute with its Mexican buyer. The court said that the validity of a disclaimer was not governed by the CISG citing Article 4. Article 4 states that the CISG governs contract formation, not the validity of contractual provisions.[3] The court held the disclaimer to be valid and granted summary judgment to the defendant seller.

Quite obviously, the court put the cart before the horse. There is no warranty disclaimer whose validity is subject to assessment unless the warranty disclaimer became a part of the contract in the first place. The court stated that the plaintiff asserted that an oral contract was formed that contained no disclaimers. Furthermore, the plaintiff asserted "that the warranty disclaimer was not negotiated, was unknown to Berry at the time the contract was formed, and was not delivered to Berry until after the roots were paid for and delivered to Mexico."[4]

The court either ignored these assertions or found them not to be credible. The court relied upon the following: "In Washington, the consistent rule has been that the exchange of purchase orders or invoices between merchants forms a written contract, and the terms contained therein are enforceable."[5] The court recited means to avoid disclaimers based upon substantive or procedural unconscionability. The court agreed that the disclaimer was consistent with industry standards.

Ultimately, the court's decision turned on its apparent determination as a matter of fact that the buyer knew or should have known of the limitation-of-liability clause prior to accepting delivery of the goods. As a consequence, the limitation-of-liability clause became a part of the contract.

The court failed, however, to properly analyze whether the limitation-of-liability clause did indeed become a part of the contract under the rules employed by the Convention on International Sale of Goods. That determination would be a necessary prerequisite to upholding the validity of the clause under Washington law. In the first instance, the court acted like Washington law applied to the determination of whether the clause became a part of the contract. In the second instance, the court concluded that by opening the box with the clause prominently displayed constituted acceptance of the warranty terms prominently displayed on the box. That legal conclusion was doubtful at best. The CISG disfavors unilateral terms imposed upon buyers coincident with the delivery of goods.[6]

The result in Berry is not necessarily wrong. What was wrong was the mode of analysis. The court was obligated to begin its analysis of the disclaimer clause by determining whether the clause was a part of the agreement based exclusively on the CISG. Such an assessment would require some examination as to the case law applicable to Article 18(3) and "acceptance by performance" under the CISG. Furthermore, since the CISG looks beyond the writings and depends upon time of contracting, one would not expect that a court could reach a determination of this issue without actual testimony. Undoubtedly, industry custom would play an important role and likewise require some testimony.

The only basis for summary judgment was apparent efforts to ship documents expressing the disclaimer terms to the buyer prior to shipment of the goods. This may have been sufficient to communicate the seller's intent to sell only based upon the warranty disclaimer and the buyer's agreement to the same. If the court had focused on this very point and addressed pertinent case law dealing with the CISG's approach to forms, then the decision could well have been an example for other courts to follow.

The text wishes to emphasize that it does not intend to be critical. It is easy for persons such as this author to spend their time on legal issues they find most interesting and then comment on how others could have done it better. District courts face heavy case loads. The CISG is comparatively new and mysterious. The parties themselves may have failed to adequately brief CISG case law. The court may well be sensitive to keeping the case within economically practical boundaries. Nonetheless, the court would have simplified future inquiries if it bit the bullet and emphasized that the disclaimer clause is or is not a part of the contract based only upon the rules of the CISG. Only after the CISG finds that the clause was a part of the contract does its enforceability under Washington law become an issue.[7]

1. Caterpillar, Inc. v. Usinor Industeel, 393 F. Supp. 2d 659, 56 U.C.C. Rep. Serv. 2d 931 (N.D. Ill. 2005).

2. Berry v. Ken M. Spooner Farms, Inc., 59 U.C.C. Rep. Serv. 2d 443 (W.D. Wash. 2006).

3. Berry v. Ken M. Spooner Farms, Inc., 59 U.C.C. Rep. Serv. 2d 443 at *2 (W.D. Wash. 2006).

4. Berry v. Ken M. Spooner Farms, Inc., 59 U.C.C. Rep. Serv. 2d 443 at *1 (W.D. Wash. 2006).

5. Berry v. Ken M. Spooner Farms, Inc., 59 U.C.C. Rep. Serv. 2d 443 at *2 (W.D. Wash. 2006).

6. See, e.g., No.10 O 74/04 (German Dist. Ct., Aug. 3, 2005), <http://cisgw3.law.pace.edu/cases/050803g1.html>, translated by Mariel Dimsey.

7. "The Convention regulates 'the mechanism for the formation of the contract by the coinciding of the offer and acceptance' -- which is at the heart of the dispute between the parties in this case -- and not 'the consequences of the factors vitiating consent on the validity of the contract' -- a question which is foreign to this dispute (Neumayer et Ming, Convention de Vienne sur les contrats de vente internationale de marchandises, commentaire, CEDIDAC, Lausanne 1993, p. 67 et 71)." Case No. 2001JRG/817 (Belgium Ct. App. Liege, Apr. 28, 2003), <http://cisgw3.law.pace.edu/cases/030428b1.html>, translated by Julia Hoffmann.

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Citations to case abstracts, texts, and commentaries


(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1105&step=Abstract>


Original language (English): Text presented below; see also 2006 WL 1009299 (W.D.Wash.)

Translation: Unavailable


English: Keith A. Rowley, "The Convention on the International Sale of Goods", in: Hunter ed., Modern Law of Contracts, Thomson/West (03/2007) §§ 23:8, 23:16, 23:31, 23:35, 23:37, 23:45

French: Claude Witz, Recueil Dalloz (22 February 2007) 534, 537

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Case text

United States District Court, Western District Washington, at Tacoma

Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.

No. C05-5538FDB

13 April 2006



Franklin D. Burgess, District Judge.


The case summary provided in the Joint Status Report states that this is a case involving a contract between the parties whereby Spooner Farms agreed to provide viable raspberry roots to Berry for the Purpose of planting and producing commercial quality raspberry fruit in Mexico. Berry alleged breach of contract in that the product sold by Spooner Farms was defective and caused Berry to incur damages.

Plaintiff Barbara Berry S.A. de C.V. (Barbara Berry or Berry) is a corporation formed under the laws of Mexico with its principal place of business located in Los Reyes, Michoacan, Mexico. Defendant Ken M. Spooner Farms, Inc. (Spooner Farms) is a Washington corporation with its principal place of business located in Puyallup, Washington.

Defendant Spooner Farms moves for summary judgment based on a written exclusionary clause that excludes Spooner Farms from all liability for Barbara Berry's Claim. Berry disputes this claim contending that what is involved is an oral contract for the sale of raspberry roots, that the warranty disclaimer was not negotiated, was unknown to Berry at the time the contract was formed, and was not delivered to Berry until after the roots were paid for and delivered to Mexico. Berry also contends that the contract is governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG) rather than the Uniform Commercial Code (UCC).

Summary judgment standard

Summary judgment is proper if the moving party establishes that there are no genuine issues of material fact and it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). If the moving party shows that there are no genuine issues of material fact, the non-moving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). Inferences drawn from the facts are viewed in favor of the non-moving party. T.W. Elec. Service v. Pacific Elec. Contractors, 809 F.2d 626, 630-31 (9th Cir.1987).

Summary judgment is proper if a defendant shows that there is no evidence supporting an element essential to a plaintiff's claim. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Failure of proof as to any essential element of plaintiff's claims means that no genuine issue of material fact can exist and summary judgment is mandated. Celotex, 477 U.S. 317, 322-23 (1986). The nonmoving party "must do more than show there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

Applicable law

The CISG does not govern the enforceability of the exclusionary clause pursuant to an express provision in the CISG. The CISG provides at Article 4 in pertinent part:

"This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in this Convention, it is not concerned with: (a) the validity of the contract or of any of its provisions or of any usage;"

Whether a clause in a contract is valid and enforceable is decided under domestic law, not the CISG. Geneva Pharmaceuticals Technology Corp. v. Barr Laboratories, Inc., 201 F.Supp.2d 236 S.D.N.Y. (2002), reversed on other grounds, 386 F.3d 485 (2004). The Geneva Court stated:

"Under the CISG, the validity of an alleged contract is decided under domestic law. By validity, CISG refers to any issue by which the 'domestic law would render the contract void, voidable, unenforceable'."Geneva Pharmaceuticals at 282.

In Washington, the consistent rule has been that the exchange of purchase orders or invoices between merchants forms a written contract, and the terms contained therein are enforceable. M.A. Mortenson Co., Inc. v. Timberline Software Corp., 140 Wn.2d 568, 580-85 (2000), citing RCW 62A.2-204 & RCW 62A.1-201(3); Puget Sound Financial, L.L.C. v. Unisearch, Inc., 146 Wn.2d 437 (2002), citing RCW 62A.204; Smith v. Skone & Connors Produce, Ins., 107 Wn.App. 199, 207 (2001), citing RCW 62A.2-201(2).

A limitation of liability clause is enforceable unless it is unconscionable. Puget Sound Financial, 146 Wn.2d at 440. Whether an exclusionary clause is unconscionable is determined as a matter of law. Id. at 438. Mortenson, 140 Wn.2d at 586. In a commercial transaction, exclusionary clauses are prima facie conscionable, and the burden of establishing unconscionability is on the party attacking the clause. Mortenson, 140 Wn.2d at 585-86.

There are two types of unconscionability in contracts in Washington: (1) substantive unconscionability, involving those cases where a clause in the contract is "shocking to the conscience." and (2) procedural unconscionability, which relates to impropriety during the process of forming the contract. Id. at 586.

With regard to "substantive unconscionability," the Washington Supreme Court stated: "As an initial matter, it is questionable whether clauses excluding consequential damages in a commercial contract can ever be substantively unconscionable." Mortenson. 140 Wn.2d at 586. The Court in Mortenson cited Tacoma Boatbuilding Co. v. Delta Fishing Co., 28 U.C.C. Rep. Serv. 26, 35 (W.D. Wash 1980) where the District Court stated in rejecting an argument that the limitation clause therein was unconscionable:

Comment 3 to [U.C.C.] 2-719 generally approves consequential damage exclusions as "merely an allocation of unknown or undeterminable risks." Thus, the presence of latent defects in the goods cannot render these clauses unconscionable. The need for certainty in risk-allocation is especially compelling where, as here, the goods are experimental and their performance by nature less predictable.

With regard to "procedural unconscionability" in commercial transactions, the concern is that there is no "unfair surprise" to the detriment of one of the parties. Puget Sound Financial, 146 Wn.2d at 439-41. The Washington Supreme Court uses a "totality of the circumstances" approach to making the determination of procedural unconscionability. Mortenson, 140 Wn.2d at 588. There is a non-exclusive list of factors for assessing the totality of the circumstances, which include: (1) the conspicuousness of the clause in the agreement, which includes whether the important terms were "hidden in a maze of fine print"; (2) the manner in which the parties entered into the contract, which includes whether the parties had reasonable opportunity to understand the terms of the contract; (3) the custom and usage of the trade; and (4) the course of dealing between the parties. Puget Sound Financial, 146 Wn.2d at 442-44.

Analysis and conclusion

For the following reasons, the Court concludes that the exclusionary clause at issue herein is valid and precludes Plaintiff's claim.

The Warranty and Limitation of Liability at issue is set forth in full in the Defendant's Motion for Summary Judgment. While Ken M. Spooner Farms, Inc. does warrant that "the product variety will be true to name" and that it will "replace, free of charge, nursery stock that is proven to be untrue to name, or refund the original amount paid, at our option," the limitation states in capital letters:


The detailed Declaration of Andrea L. Spooner, a manager at Spooner Farms, submits examples of limitation of warranty and exclusionary clauses from three independent nurseries to demonstrate that Spooner Farm's exclusionary clause is common in the industry. (Andrea Spooner Decl. 6.) Andrea Spooner's declaration also outlines the exchanges of documents between the parties. (Id. 4.) Plaintiff Berry had more than one opportunity to read the terms of the exclusionary clause. On February 17, 2004, the original documents were delivered to DHL/Danzas in Guadalajara, where the raspberry stock was delivered, and Berry admits by email that it was notified of this delivery. (Spooner Decl., Ex. H; Casilla Decl., Ex. F.)

On February 25, 2004, a second delivery of the original invoice before shipment of the product was sent to Sun Belle Berries, designated by Plaintiff Berry. (Andrea L. Spooner Decl., Ex. J, DHL bill; and see Cassilla Decl. Ex. F.) Plaintiff Berry's contention that its agent Sun Belle did not provide it with the documents is unavailing under basic agency principles, acknowledged by the UCC. RCW 62A-1-103. "The general rule is that "the principal is bound by the act of his agent when he has placed the agent in such position that persons of ordinary prudence, reasonably conversant with business usages and customs, are thereby led to believe and assume that the agent is possessed of certain authority, and to deal with him in reliance upon such assumption." E.g., Schoonover v. Carpet World, Inc., 91 Wn.2d 173, 176-77 (1978).

A third delivery of the documents was made by fax on February 25, 2004 to Plaintiff Berry's agent Sun Belle. Spooner Farms notes that Berry's contentions that it did not receive the original invoices fails because (1) the raspberry stock could not be released from customs unless the original invoice -- not a copy -- was provided, and this is why Spooner Farms sends multiple original invoices approximately a week prior to shipment of the product (A. Spooner Decl. pp. 3-4.), and (2) Plaintiff Berry produced in its initial disclosure the entire terms of sale containing the exclusionary clause, in a font different from that printed on the boxes of the raspberry roots.

Finally, the exclusionary clause was printed in bright red on top of all 63 boxes of raspberry planting stock, and there is no dispute that Plaintiff Berry received and opened these boxes. Even if this were the only notice of the exclusionary clause, similar to the case in Mortenson, the clause is conscionable and enforceable.

Even if the CISG did apply, the exclusionary clause is still enforceable because Plaintiff paid the price for the goods and opened the package where the exclusionary clause was prominently displayed on top in red. (Article 18(3): "assent by performing an act, such as one relating to the dispatch of the goods or payment of the price ..."; Article 18(1): an additional term can be accepted by "conduct by the offeree indicating assent.") Also, under Article 9(2), "the parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned." It appears that the placement of oral orders for goods followed by invoices with sales terms is commonplace, and while every term of the contract is not usually part of the oral discussion, subsequent written confirmation containing additional terms are binding unless timely objected to. See, e.g., W.T. GmbH v. P. AG, No. P4 1991/238 (ZG Bnasel, Switz. Dec. 21, 1992).

Spooner Farms' exclusionary clause is valid, it is not unconscionable, it is of a type commonly used in the nursery stock trade, and Plaintiff had ample opportunity to read the exclusion, which was prominently displayed in the invoices and on the shipping crates. Acceptance of Plaintiff's argument would result in sellers of nursery stock being virtual insurers of the crop regardless of the vagaries of the weather or the individual farmer's practices or other influences over which the nursery has no control.


1. Defendant's Motion for Summary Judgment [Dkt. # 10] is GRANTED.

2. Plaintiff's Application to File a Supplemental Response [Dkt. # 26] is DENIED.

3. This cause of action is DISMISSED, and the Clerk may enter Judgment for Defendant Ken M. Spooner Farms, Inc.

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Pace Law School Institute of International Commercial Law - Last updated October 31, 2008
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