Law School Case Brief
Valero Mktg. & Supply Co. v. Greeni Oy - 373 F. Supp. 2d 475 (D.N.J. 2005)
Although United Nations Convention on Contracts for the International Sale of Goods (CISG), Apr. 11, 1980, S. Treaty Doc. No. 98-9 (1983), U.N. Doc. No. A/CONF. 97/19 (1981), 19 I.L.M. 671 (1980) (reprinted at 15 U.S.C.S. app.), is plainly limited in its scope (CISG art. 4), the CISG nevertheless can and does preempt state contract law to the extent that state causes of action fall within the scope of the CISG.
Plaintiff Valero Marketing & Supply Company ("Valero"), a Delaware corporation with its principal place of business in Texas, was engaged in the business of blending components purchased from third parties into reformulated gasoline. Defendants Greeni Oy and Greeni Trading Oy (collectively, "Greeni") were corporations incorporated in, and with principal places of business in, Finland. Valero and Greeni entered into a contract whereby Valero agreed to purchase a quantity of the substance "naphtha," which was used in the process of making reformulated gasoline. Greeni’s broker sent a confirmation, which provided that the contract would be governed by English law. Valero sent its own confirmation, which stated that New York law would apply; Greeni did not object or agree to the terms of Valero's confirmation. Greeni shipped the naphtha aboard a vessel that Valero had rejected, and the naphtha was not delivered within the time period set by the agreement. Valero thereafter filed a lawsuit against Greeni in federal district court alleging breach of contract. Specifically, Valero claimed that it suffered substantial loss resulting from Greeni's failure to deliver the naphtha on time. Valero filed a motion for partial summary judgment on the issue of Greeni's liability.
Was Valero entitled to summary judgment on the issue of Greeni's liability?
The court denied Valero's motion for partial summary judgment. The court found that the United Nations Convention on Contracts for the International Sale of Goods (CISG), Apr. 11, 1980, S. Treaty Doc. No. 98-9 (1983), U.N. Doc. No. A/CONF. 97/19 (1981), 19 I.L.M. 671 (1980) (reprinted at 15 U.S.C.S. app.), governed the parties' rights and obligations arising from the contract. Valero's confirmation designating New York law did not amend the parties' original agreement under N.J. Stat. Ann. § 12A:2-207; a shift from the CISG to New York law would have materially altered the original agreement. Under the CISG, there were factual issues that precluded summary judgment, including whether Valero rejected the vessel in good faith.
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