A US manufacturer and a Greek distributor entered into negotiations for a contract to distribute Snapple beverages in Greece. The exclusive distributorship negotiation was the result of a settlement agreement between the Greek distributor and the US manufacturer’s former parent company. As a result of the negotiations the parties reached an agreement on all issues, including the choice of New York law as the law governing the contract, but failed to agree on termination provision. Although a written contract was never executed between the parties, they acted as if it was. One year later, the distributor failed to pay the manufacturer for products received and terminated its business without notifying the manufacturer. Then the manufacturer filed suit for breach of contract under the CISG, claiming that CISG provides for the enforcement of oral agreements such as the exclusive distributorship agreement concluded with the distributor (CISG Art. 11).
The Court found that the CISG was not applicable in the case at hand. After citing several cases which stated the CISG does not apply to distributorship contracts that do not cover the sale of specific goods and do not contain definite terms regarding quantity and price, the Court ultimately held that New York law governed the contract since all the draft distribution agreements exchanged between the parties contained a choice of law provision for that law.
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