Date: 29.06.1998
Country: USA
Number: 97-4250
Court: U.S. Court of Appeals, 11th Circuit
Parties: MCC-Marble Ceramic Center Inc. v. Ceramica Nuova D'Agostino S.p.A.
An Italian seller and a U.S. buyer had entered into an oral contract for the sale of ceramic tiles. The parties had memorialized the terms of the agreement on a seller's standard pre-printed order form signed by the buyer. The parties also concluded a requirements contract pursuant to which the seller was to supply the buyer with high grade ceramic tiles at a specific discounts as long as the buyer purchased sufficient quantities of tiles. The buyer commenced an action when the seller failed to satisfy some orders, claiming breach of the requirements contract. The seller invoked a provision on the reverse of the order form signed by the buyer entitling it to suspend performance in case of default of delay in payment by the buyer as well as another provision requiring the buyer to denounce possible complaints for defects of the goods in writing within ten days after receipt of the goods. The buyer objected that, notwithstanding a statement to the contrary printed on the front of the seller's order form at the bottom, the parties had agreed that the standard term's on the reverse of the order form - written in Italian - would not become part of the contract. In rejecting this objection, the first instance court granted summary judgment in favor of the seller on the ground of the provisions printed on the reverse of the order form the seller had invoked. The appellate court reversed.

The appellate court stated that in interpreting contracts governed by CISG, it is not enough to take into account the mere statements of the parties and objective evidence of the contract. In fact, Art. 8(1) CISG requires the court to make a substantial inquiry into the parties' subjective intent and in determining the subjective intent of the parties due consideration is to be given to all relevant circumstances of the case (Art. 8(3) CISG). As a consequence the first instance court should have considered the affidavits submitted by the buyer proving that the buyer did not intend to be bound by the provisions on the reverse of the order form.

While admitting that this is in contrast with the parol evidence rule ad adopted by US domestic law, the court pointed out that in applying CISG judges may not upset the parties' reliance on the Convention by substituting familiar principles of domestic law when the CISG requires a different result. One of the primary reasons for the adoption of CISG was to provide parties to international sales contracts with some degree of certainty as to the principles of law that would govern potential disputes. The directives of good faith and uniformity in contracts under the Convention (Art. 7(1) CISG) can only be achieved by interpreting and applying the plain language of Art. 8 as written.

The court also pointed out that parties wishing to avoid parol evidence problems under Art. 8 CISG may include in their contract a merger clause that extinguishes all prior agreements and understanding not expressed in the writing.