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| Abstract | ||||||||||||||||||
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| In October 2002, a U.S. investor and an Italian family-owned company signed an operating agreement in Italy for the creation of a new corporation organized under the laws of the State of Wisconsin. In accordance with the terms of the contract, the Italian family-owned company was to sell polycarbonate sheets and other related plastics to the US corporation for resale to its customers in North and Central America. Although the operating agreement was written in the English language, the price list of the products was in Italian. After both parties signed the agreement and the cover page to the price list, the plaintiff began a civil action in federal court alleging breach of contract and breach of fiduciary duty. The defendant, relying on a forum selection clause attached to the parties’ contract that made the Court of Turin, Italy, the exclusive forum for disputes over the agreement, presented a motion to dismiss for improper venue.
The court, noting that the parties’ operating agreement stated explicitly that it would be governed by the laws of the State of Wisconsin, retained jurisdiction over the case. However, the plaintiff’s argument that the forum selection clause in the price list did not apply to the current dispute because it was not mentioned in the body of the operating agreement was rejected by the court. The judge, pointing out that the dispute fell directly within the scope of the price list because it pertained to product pricing, ruled that the forum selection clause was both valid and enforceable. In so doing, the court struck down the plaintiff’s argument that the forum selection clause set forth in the price list was procedurally unconscionable, as there was no evidence that the relative bargaining power between the parties was unequal. Moreover, the plaintiff’s allegation that the forum selection clause was substantially unconscionable because was written in Italian rather than English, failed. Although the court did not specifically state that the CISG was the governing law of the contract, it addressed the issue by citing a CISG-related case (MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D’Agostino, 1998, full text and abstract available in UNILEX, and found that the plaintiff’s reckless behavior in signing a contract written in a foreign language, together with his voluntary failure to seek a translation into English, prevented him from asserting unconscionability of the forum selection clause. Accordingly, the court concluded that the forum selection clause governed the dispute and granted the defendant’s motion to dismiss for improper venue. |