2.99 See Answer

Question: Plaintiff It’s Intoxicating Inc. is a


Plaintiff It’s Intoxicating Inc. is a Pennsylvania corporation that manufactures and distributes cosmetic products to various retailers. Defendant Maritim Hotelgesellschaft is a German company which owns hotels throughout Germany. Zimmer is an individual living in Berlin, Germany, and is an employee of Maritim who was delegated the authority to purchase beauty products on behalf of Maritim.
In October 2007, Zimmer informed It’s Intoxicating that Maritim wished to buy its products for use in 38 of its hotels. It’s Intoxicating sent via e-mail a document titled “Conditions of Sale,” a proposed agreement purporting to govern various collateral aspects of the parties’ developing relationship. That document stated:
This agreement will be governed by and construed in accordance with the laws of the state of Pennsylvania, United States of America. The parties hereto hereby consent to the exclusive jurisdiction and venue of the United States District Court for Luzerne County for any action that may be brought in connection with this agreement and/or from the use of the Aromapro software and/or from the use of the Aromapothecary products.
Maritim subsequently sent purchase orders to It’s Intoxicating in January 2008. It’s Intoxicating shipped 441 cartons of beauty products to Maritim’s hotel in Dusseldorf, Germany, which were accepted by Maritim. The purchase price was $181,547.80 of which Maritim paid $73,724.85. However, in May 2008, Maritim began to run into problems selling It’s Intoxicating’s beauty products. By April 2009, It’s Intoxicating still had not received the balance due and filed suit against Maritim. Maritim filed a motion to dismiss contending that the parties had never created a binding contract.

MANNION, DISTRICT COURT JUDGE
As a preliminary matter, because Maritim is a foreign corporation and Zimmer is a resident of a foreign country, the court must consider whether the United Nations Convention on Contracts for the International Sale of Goods applies to the contract in this case, thereby preempting Pennsylvania law.
The CISG is a “self-executing treaty with the preemptive force of federal law,” which “applies to contracts for the sale of goods between parties whose places of business are in different States . . . when the States are contracting States.” American Mint LLC v. GOSoftware, Inc., 05-CV-650, 2005 U.S. Dist. LEXIS 45003 (M.D.Pa. 2005). The parties to a contract may agree to apply a signatory’s domestic law, but only by affirmatively opting-out of the CISG. Therefore, a choice of law provision, to be effective, must not only select the law that will apply but affirmatively state that the CISG will not apply to the contract.
Here, defendants’ place of business is Germany and plaintiff’s is the United States, both countries that are signatories of the CISG. Furthermore, because of the parties extensive communications prior to Defendant’s first product order and because the alleged contract contained a shipping agreement, it appears that the parties were aware that they were dealing with foreign entities either before or at the time a contract was formed. Therefore, on its face, it appears that the CISG governs this contract dispute…………………..

Required:
1. On what basis did the court conclude that the parties had not sufficiently evidenced an intent to opt out of the CISG? What language would you have included in the purchase and confirmation orders to clearly evidence such an intent?
2. What was the effect of the application of the CISG to the contract rather than Pennsylvania state law?


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2.99

See Answer