A US buyer (Defendant) purchased smoke detection units (“SDUs”) from a seller (Plaintiff), whose principal place of business was located in Australia and whose subsidiary was located in the United States. The seller filed a complaint alleging that, although under the contract the buyer was bound to purchase some SDUs per year for three years, after the initial deliveries the buyer refused to perform the contract before hand, by notifying the seller that it intended to discontinue all further purchases of SDUs. The buyer filed a motion for summary judgment at the Superior Court of Massachusetts to dismiss the seller’s claims.
The Court held that CISG was not applicable, since the buyer and the seller did not have their places of business in different Contracting States. In reaching this conclusion, the Court found that the buyer’s initial contact with the seller was with an employee of the seller’s subsidiary in the United States, and that that employee remained the seller’s principal contact with the buyer throughout all the correspondence between the parties. In addition, all price quotations to the buyer had been provided by the seller’s U.S. subsidiary, all sales to the buyer were F.O.B. Massachusetts, and all orders from the buyer had been submitted to the seller’s U.S. office. Therefore, the transaction had to be considered as taking place primarily in Massachusetts. Thus, although the seller had multiple business locations, application of CISG had to be excluded, since the party’s international location did not have the closest relationship to the contract and its performance (Art. 10 CISG).
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