A Delaware limited liability company (seller) and a Canadian corporation with its principal place of business in Ontario (buyer) concluded a contract for the sale of soy lecithin. A dispute arose between the parties on account of the fact that the soy lecithin turned out to be contaminated with salmonella. Having incorporated the contaminated soy lecithin into over two million units of its chocolate products, the buyer held the seller responsible for damages and refused to accept delivery or pay for the additional amounts of soy lecithin it had previously ordered. The seller sued the buyer in Delaware. The buyer asked the Court to dismiss the seller’s declaratory judgment action on the ground of bad faith and forum shopping, as well as on the basis of the forum non-conveniens doctrine.
The Court had inter alia to determine whether the contract concluded between the parties contained a forum selection clause in favour of Delaware courts. In answering such an issue in the negative, the Court firstly found that the agreement originally reached by the parties amounted to a binding contract under the CISG, since a contract of sale under CISG need not be concluded in or evidenced by writing nor is it subject to any other formal requirement, and the parties had agreed on the kind of goods, their quantity and their price (Arts. 11, 14 and 18 CISG).
Secondly, the Court rejected the seller’s argument that a forum selection clause in favour of Delaware courts had been agreed upon by the parties by virtue of incorporation into the contract of the “Conditions of Sale” set out in the invoices sent by the seller to the buyer. It is true that under CISG, a contract may be modified or terminated by the mere agreement of the parties (Art. 29(1) CISG). However, additional or different terms relating, inter alia, to the settlement of disputes are expressly considered to alter the terms of the offer materially (Art. 19(3) CISG). In the case at hand, the seller did not provide any evidence that the buyer had agreed to a modification of the contract beyond the receipt of the "Conditions of Sale". Therefore, those Conditions, and the forum selection clause therein, could not be deemed binding on the buyer.
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