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| Abstract | ||||||||||||||||||
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| A French buyer (Defendant) that assembles and sells computer network systems made 14 purchases of computer parts from an American seller(Plaintiff). The orders were made by phone and shipped with an invoice and users’ manual, which contained terms and conditions relating to, inter alia, limited warranty and limitations of liability. After these purchases, the buyer experienced problems with the equipment and some of the computer parts caught fire. Buyer commenced an action in the French Commercial Court, seeking replacement costs and consequential damages for the allegedly faulty parts. The Seller responded by claiming that it was not liable, based on the limited warranty and consequential damages waiver contained in the documents relating to the sale. More than a year after the buyer commenced the action in France, the seller filed the present action in the U.S. Court, seeking a declaratory judgment that the computer parts were not defective and that the buyer's sole remedy was for repair and replacement. The buyer sought to have the case dismissed in favor of the proceedings in the French Court.
As to the applicable law, the Court held that CISG applied because the parties to the contract had their places of business in different contracting States to CISG (Art. 1(1)). The Court determined that the underlying substantive question of the case was whether a warranty disclaimer in a purchase order is valid under CISG. The seller argued that Art. 35 CISG permits warranty disclaimers. The Court noted that Art. 35 CISG does not deal with warranty disclaimers and that Art. 8 CISG would require inquiry into the subjective intent of the parties as to whether the disclaimer would have legal effect. Considering this was an unsettled question of law, the Court stated that it should be cautious in exercising its jurisdiction because the French court already had this issue before it. The Court declined to rule on the merits of the substantive law, instead dismissing the case in order to allow the French case to proceed unaffected. The Court cited the international abstention doctrine as a strong basis for dismissing an action where parallel proceedings are pending in the court of a foreign nation. According to the Court, this doctrine is rooted in concerns of international comity, judicial efficiency, and fairness to litigants. Since the international abstention doctrine was not firmly established as law in this particular U.S. judicial district, however, the Court instead declined jurisdiction on the basis of a U.S. statute (The Declaratory Judgment Act) designed to avoid duplicative litigation, conflict of jurisdictions, and forum shopping in cases where litigants seek declaratory relief. |