A US corporation (seller) and a corporation based in Ontario (buyer) entered into an agreement for the production and installation of machinery to be used in the manufacturing of auto-parts. After the seller issued a quote, which specified the purchase price and delivery date, the buyer instructed the seller to commence work on the product. Five months later, the buyer sent a written purchase order with a choice of law and forum selection clause in favor of Ontario; the buyer also requested early delivery and installation of machinery promising assistance in the installation. The seller agreed and commenced installation early; however, the buyer failed to follow through on agreement and refused to pay the price alleging that the machinery failed to perform at specifications agreed upon by the parties. Consequently, the seller brought an action against the buyer seeking immediate possession of the machinery according to Michigan law, which in its opinion had to be applied together with CISG; on the contrary, the buyer insisted on the application of Ontario law.
The Court held the CISG applicable either if the seller's quote or the buyer's purchase order were considered as amounting to an offer. Indeed, both parties had their principal places of business in different Contracting States (Art. 1(1)(a) CISG) and, lacking a clear intention to the contrary, the choice of law in favor of Ontario law could not be interpreted as an exclusion of the Convention.
After pointing out that the seller's quote, being sufficiently precise (Art. 14 CISG), might be considered as offer under CISG and an offer can be accepted also orally (Art. 18 CISG), the Court left open the question as to which document incorporated the contract. Consequently, the court delayed determining whether Michigan or Ontario law governed the contract and, as a result, whether seller was entitled to immediate possession of the machinery.
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