Source: http://cisgw3.law.pace.edu/cases/950412u1.html
Timestamp: 2019-04-23 00:44:06+00:00

Document:
Plaintiffs, three Canadian manufacturers and sellers of raw shakes (long wooden shingles), sued a [buyer] U.S. corporation to recover damages for breach of alleged contracts for the sale and purchase of truckloads of cedar shakes. [Buyer] denied entering into these contracts. [Buyer] moved in limine for dismissal on the ground that [sellers] failed to satisfy the writing requirement of the "statute of frauds" of the Uniform Commercial Code (UCC) as enacted in Oregon. The trial court denied the motion. During the trial, the [sellers] attempted to raise the issue of whether the CISG, rather than the UCC, governed, but the trial court ruled that [sellers'] attempt was untimely and that they had waived reliance on that theory. The jury returned a verdict awarding lost profits to the [sellers] and the trial court entered judgment on the verdict.
[Buyer] appealed to an intermediate appellate court on the ground, inter alia, that the trial court had erred when it denied [buyer's] motion in limine. A majority of the three-judge appellate court found that [sellers] had satisfied the UCC statute of frauds. The dissenting judge disagreed with the majority's analysis of the UCC as applied to the facts in the case. In a final footnote, the dissenting judge also stated that he would have addressed the issue of whether the trial court abused its discretion in its ruling on the applicability of the CISG.
On appeal to the Oregon Supreme Court, the decision of the trial and intermediate courts [was] affirmed. The majority, concurring, and dissenting opinions do not address the issue of whether the CISG governed or whether the trial court abused its discretion.
Formal requirements/Statute of Frauds. The alleged contract was for the purchase of goods (wood products: 88 truck loads of cedar shakes) by a U.S. buyer from a seller who appears to have been operating primarily in Canada. The timing of the transactions was such that the CISG was in effect in both the United States and Canada.
"I would . . . address [seller's] cross-assignment that the trial court erred in refusing to apply the United Nations Convention on Contracts for the International Sale of Goods (CISG) . . . instead of the UCC. Article 11 of the CISG does not require a contract to be 'evidenced in writing' and thus, would defeat [buyer's] statute of frauds defense if the trial court abused its discretion under ORCP 23B [governing amendment of pleadings] in ruling that [buyer's] attempt to raise the CISG was untimely and that they had waived reliance on that theory."
"A U.S. court case, GPL Treatment Ltd. v. Lousiana-Pacific Corp., serves as a warning to attorneys that ignorance of CISG is no excuse. GPL Treatment involved the sale of wood products by a Canadian seller to a U.S. buyer. Although the dispute was resolved under U.S. domestic law, the governing law of the contract should have been the CISG since both Canada and the United States are Contracting States to CISG. Apparently, the plaintiff's attorney was unaware that CISG governed the contract until it was too late to amend the pleadings. The court ruled that the plaintiff's attempt to raise the CISG issue was untimely and therefore waived any cause of action under CISG. The material issue in this case was defendant's statute of frauds defense. The UCC requires a writing for sale of goods contracts over US $500, while CISG specifically states that a contract and sale need not be concluded or evidenced by writing. If the plaintiff's attorney had recognized the applicability of CISG, he might have won the case." David n.Goldsweig & Joon Lee, "The United Nations Convention on Contracts for the International Sale of Goods", in: Sandstrom & Goldsweig ed., Negotiating and Structuring International Commercial Transactions, 2d ed., Section of International Law and Practice, American Bar Association (2003) 64.
They overstate, but "ignorance of CISG is no excuse" and cases can arise in which failure to recognize the applicability of CISG can lead to loss of a case.
"Assuming that the purported sellers were Canadian companies and that the purported buyer was a U.S. corporation, there is little doubt that the Convention applied to the transaction. Article 11 of the Convention states expressly that '[a] contract of sale need not be concluded in or evidenced by writing. . . . It may be proved by any means, including witnesses.' While it is possible to argue that the sellers implicitly excluded the Convention by filing a complaint with a reference to the Uniform Commercial Code (to which the buyer concurred by raising the statute of frauds defense), it is not clear that the attorney proceeded knowingly. Should such an attorney [be] responsible ultimately for the costs of his or her clients' appeals on points of law that could have been avoided?" John A. Spanogle & Peter Winship, "International Sales Law: A Problem Oriented Coursebook" (West 2000) 46-47.
Attorney for Appellants: John F. Neupert argued the cause for the Appellant. With him on the briefs were James N. Westwood and Miller, Nash, Winer, Hager & Carlsen. Attorney for the Respondents: Jay W. Beattie aruged the cause for Respondents. With him on the brief was Lindsay, Hart, Neil & Weigler.
Procedural History: Appeal from Circuit Court, Multnomah County before Judge Stephen S. Walker.
Plaintiffs are three separate wood products corporations owned and operated by members of the Clarke family, in British Columbia, Canada. Plaintiffs sued Louisiana-Pacific Corporation (L-P) to recover lost profits on alleged agreements by plaintiffs to sell 88 truckloads of cedar shakes to L-P. The jury returned a verdict for plaintiffs for the maximum amount of each plaintiff's prayer, and L-P appeals.
Plaintiffs Scott Cedar Products (Scott Cedar) and Blackhawk Forest Products, Ltd. (Blackhawk), manufacture and sell raw shakes and shingles. Plaintiff GPL Treatment, Ltd. (GPL), buys raw shakes, treats them, and sells them as "Class C" shakes. Treated shakes are packaged into bundles, with five bundles constituting a "square," and are often sold by the truckload. The price for cedar shakes fluctuates widely with market demand.
In early spring of 1992, a series of hailstorms in the Midwest caused an increased demand for cedar shakes and a concomitant increase in the price of Class C shakes. Plaintiffs' principal sales person, Gerry Feaver, visited with Dan Cunnally, a shake and shingle trader for L-P. Feaver testified that telephone conversations between the two led to a May 6, 1992, deal for L-P to purchase 66 truckloads of Class C shakes. He testified that he filled out and signed six of plaintiffs' "Confirmation Form" documents and sent to L-P the top copies of each of six four-part documents.
In contrast, Cunnally testified that he made no commitment for L-P to purchase any product in any of the telephone conversations with Feaver; that he had told Feaver that the price was too high; and that L-P would not allow him to buy the volume of shakes that Feaver was offering to sell. Cunnally testified that he told Feaver that L-P would buy some shakes later and that Feaver understood that arrangement. Cunnally testified that he did not receive plaintiffs' "Confirmation Form" documents.
According to plaintiffs' evidence, plaintiffs became concerned in June 1992 when Cunnally did not ask for delivery of the shakes. Feaver testified that Cunnally had told him that LP's customer in Dallas, Texas, was not using shakes as fast as anticipated. In the meantime, the market price for shakes had dropped. Feaver testified that plaintiffs and Cunnally had additional conversations and negotiations about adjusting the volume and price of the order. Cunnally denied any such negotiations.
On about June 30 or July 1, Feaver was on personal business in eastern Canada, and Scott Clarke was in Portland visiting the office of Scott Cedar. Clarke testified that he took it upon himself to "finalize the deal with Mr. Cunnally." According to his testimony, he wrote a new order, revising prices and quantities for materials to be sold by plaintiffs to L-P. Clarke testified that the new order was firm, to accommodate LP's needs. Clarke testified that Cunnally was "elated" with the new arrangement because it reduced the price.
Cunnally's testimony gives a different version of the conversation. He testified that Clarke called to try to sell more shakes to L-P, at specific quantities and lower prices than had been offered by Feaver, but that otherwise the arrangement was to be the same as it had been. Cunnally testified that he did not commit L-P to the purchase of shakes.
Clarke testified that, after working out the details of the revised order with Cunnally, he immediately telephoned Rick Sherneck in Canada and told Sherneck "to phone Dan Cunnally and confirm the order, then follow up with an order confirmation." Sherneck testified that Clarke instructed him, "We have a deal with L-P. I want you to write this down and then I want you to phone Dan Cunnally and confirm it with him."
Sherneck testified that he telephoned Cunnally, and confirmed the volumes and prices for the revised order in exact detail. He testified that he filled out order confirmation forms and put the top two copies of each form into the out basket for mailing to L-P. Cunnally testified that he remembers no such telephone call from Sherneck. He testified that he did not receive any writing from plaintiffs confirming any orders.
L-P took delivery of 13 truckloads of shakes in July 1992. According to plaintiffs, when L-P failed to give shipping instructions for an additional 75 truckloads of shakes, it became concerned. Feaver testified that he spoke to Cunnally every day about why the shakes were not being delivered. Cunnally testified that he had no such conversations with Feaver, and that he was, in fact, out of town on vacation during that period of time.
On about August 1, 1992, plaintiffs inquired of L-P about a shipment schedule for an additional 75 truckloads of shakes that had allegedly been ordered by L-P. Plaintiffs sent a letter to L-P asserting an agreement for the delivery of 75 additional truckloads of shakes over a three-week period. L-P responded that the parties had no such agreement.
Plaintiffs brought this action to recover their respective profit losses on an alleged agreement to sell a total of 88 truckloads of cedar shakes to L-P. L-P claimed that it was responsible for only 13 truckloads, which were shipped and paid for. Plaintiffs claimed that L-P breached its agreement to accept the remaining 75 truckloads. L-P asserted as an affirmative defense that plaintiffs' claims are barred by the Statute of Frauds. The jury returned a verdict for the maximum amount of each plaintiff's prayer: $ 500,921 for GPL; $134,372 for Scott Cedar; and $106,984 for Blackhawk.
L-P assigns error to the trial court's denial of its motion to withdraw from the jury GPL's claim for lost profits, on the ground that there was an insufficient basis for estimating the amount of net profit with reasonable certainty. To recover for lost profits, a plaintiff must establish, with reasonable certainty, both the existence and amount of lost profits. Pearson v. Schmitt, 259 Or. 439, 442, 487 P.2d 84 (1971). Only net lost profit may be recovered. As the Supreme Court said in Cont. Plants v. Measured Mkt., 274 Or. 621, 624, 547 P.2d 1368 (1976), and Husky Lbr. v. D. R. Johnson Lbr. Co., 282 Or. 481, 579 P.2d 235 (1978), "reasonable certainty" signifies nothing more than "probability" and is found to refer to the kind of evidence required rather than the quantum of proof. In reviewing the trial court's denial of the motion to withdraw the issue of lost profits from the jury, the question is whether there was evidence in the record to permit a finding of some net lost profits. Rennick v. Jackson & Coker, 95 Or. App. 72, 74, 767 P.2d 478 (1989); see also Frogge v. U.S. West Communications, Inc., 120 Or. App. 619, 620, 853 P.2d 1323, on recon 124 Or. App. 669, 863 P.2d 1313 (1993), rev den 319 Or. 36 (1994).
GPL claims that its lost profit on unshipped orders was $ 500,921. It supports that claim with testimony of its chief financial officer and two exhibits tracking his calculations, which were based on GPL's costs and the alleged agreed sale price for the unshipped shakes. L-P argues that GPL's listed costs for raw materials are grossly understated, that they are, in fact, Scott Cedar's cost for the raw logs. Yet, L-P contends, GPL's own cost of sales records reveal that Scott Cedar charged GPL market price for the shakes it sold to GPL for the L-P deal. L-P argues that, by plaintiffs' own computations, Scott Cedar's market prices for raw shakes were $ 118 per square for heavy shakes and $ 95 per square for light shakes, not the listed $ 54.56 and $ 47.01 per square. In its closing argument to the jury, L-P argued that the market cost was the appropriate raw material cost to be used in calculating any alleged lost profit.
It was for the jury to decide the exact amount of the lost profits, and we conclude that there was ample evidence from which the jury could make that determination, either by use of the figures provided by GPL or based on the market price, as argued by L-P. The trial court did not err in denying L-P's motion to take the issue of GPL's lost profits from the jury.
"Attached find a page from [Feaver's] journal re the booking of the original orders and a page from my journal detailing [Scott Clarke's] call re the deal with L.P and J.E.H. Co."
L-P argues that, because Sherneck makes no mention in the note of his own alleged conversation with Cunnally, the inference is that he had no such conversation. L-P sought to introduce that note as evidence that Sherneck never called Cunnally. The trial court excluded the note as a privileged attorney-client communication protected from disclosure by OEC 503. L-P concedes that the note is a privileged communication but argues that, by producing the note, although inadvertently, in the normal course of discovery, plaintiffs waived any attorney-client privilege pursuant to OEC 511.
Whether a party has waived the attorney-client privilege is a question of fact to be determined by the trial court pursuant to OEC 104. Goldsborough v. Eagle Crest Partners, Ltd., 314 Or. 336, 342, 838 P.2d 1069 (1992). Factors the court may consider include whether the disclosure was inadvertent, whether any attempt was made to remedy any error promptly and whether preservation of the privilege will occasion unfairness to the proponent. 314 Or. at 342. The record indicates that the trial court considered statements from plaintiffs' counsel that the note had been inadvertently attached to other documents sent to L-P and that plaintiffs' counsel was not aware that the note had been sent or that L-P intended to offer it at trial until the day it was to be offered. The court found that there had been no voluntary disclosure. We conclude that the record supports the trial court's finding and its determination that there was no waiver of the attorney-client privilege, and that it did not err in excluding the handwritten note.
In its third assignment of error, L-P contends that the trial court erred in denying its motions in limine and for a directed verdict on the ground that the alleged contract for the sale of shakes fails for noncompliance with Oregon's Uniform Commercial Code Statute of Frauds. Specifically, the motions sought to exclude evidence of the written order confirmations that plaintiffs allegedly sent to L-P.
"(l) Except as otherwise provided in this section a contract for the sale of goods for the price of $ 500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the authorized agent or broker of the party. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing.
Under subsection (2), the "merchant's exception" to the Uniform Commercial Code Statute of Frauds applies, when both parties to the transaction are merchants, if one merchant receives written confirmation of an oral contract from another merchant "sufficient against the sender" the contract becomes enforceable unless the recipient objects within 10 days. L-P argued to the trial court, and argues on appeal, that the order confirmations that plaintiffs allegedly sent to L-P are inadmissible as proof of the agreements and in satisf action of the Statute of Frauds, because, as a matter of law, they are insufficient under ORS 72.2010 to constitute written confirmations of the contracts. The trial court held, as a matter of the law, that the documents were confirmations. The court submitted to the jury the factual questions of whether the confirmations were received by L-P, whether L-P knew their contents and whether L-P sent written notice of objection to plaintiffs. The assignment of error relates only to the trial court's ruling concerning the legal effect of the documents, i.e., that they are, as a matter of law, sufficient to constitute "confirmations" under ORS 72.2010.
The printed order confirmation forms consist of four pages, one original page and three copies. The original and first copy are sent to the buyer. Those two pages are, for the most part, identical. At the top left of both, in large print, is the name and address of the selling company. At the top right are boxes for the date and the seller's order number. Directly underneath those boxes, in large bold print, are the words & quot;ORDER CONFIRMATION." The form contains two address blocks of three single-spaced lines each, encaptioned "SOLD TO" and "SHIP TO." Underneath those address b locks are three slim, long boxes of one line each for shipping instructions, terms of payment and the customer number. The largest part of the form, filling approximately one half the page, is for a description of the product, with a place to note FOB mill, freight and delivery price. At the bottom right of the form is the name of the selling company, and underneath it a signature line following the word "BY." Underneath that line are the words "THANK YOU."
"CONDITIONS OF SALES: All orders accepted subject to strikes, labor troubles, car shortages or other contingencies beyond our power to control. Any freight rate increases, sales or use taxes is for buyers account."
Then, beneath that block, in smaller print but highlighted, are the words: "SIGN CON FIRMATION COPY AND RETURN." At the bottom left of the first copy, the "confirmation copy," in small print, are the words: "ORDER ACCEPTED BY:," followed by a line for firm name. Below that is a line for a signature and the title of the person signing, and the date.
L-P concedes that the documents contain all the elements necessary to confirm an order. However, L-P contends that, by instructing the buyer to sign the confirmation copy on the "order accepted by" line and return that copy to plaintiffs, plaintiffs have indicated an intention that the agreement is to become final only after L-P's approval of the quoted terms.
Considering the document in its entirety, we conclude that it cannot reasonably be read as L-P suggests. The form is captioned "ORDER CONFIRMATION," boldly and in large print. Unlike the forms involved in the cases relied on by the dissent, see, e.g., Great Western Sugar Co. v. Lone Star Donut Co., 567 F. Supp. 340 (ND Tex), aff'd 721 F.2d 510 (5th Cir. 1983); Kline Iron & Steel Co., Inc. v. Cray Com. Consultants, Inc., 715 F. Supp. 135 (DSC 1989), there is no language on this form, either on the original or the first copy, indicating that the parties are in the course of negotiations, that plaintiffs are merely proposing terms or that L-P must approve the terms. Every feature of the form suggests that it is what it is labeled, a confirmation and not a mere offer. We conclude that the sign and return instruction does not alter the apparent purpose of the document, to confirm in writing a completed agreement for the sale of shakes. The trial court did not err in denying L-P's motions in limine and for a directed verdict.
I disagree with the majority's conclusion that the documents allegedly sent by plaintiffs to L-P were sufficient to satisfy the UCC Statute of Frauds. The majority's opinion is at odds with courts from other jurisdictions that have ruled on facts similar to those in this case. Regrettably, it creates an "Oregon exception" to the uniformity that is one of the underlying purposes of the UCC. See ORS 71.1020(2)(c).
According to the majority, the forms sent by plaintiffs to L-P are writings in confirmation of a contract because they are labeled "ORDER CONFIRMATION" and because neither "the original," nor "first copy" contains any language "indicating that the parties are in the course of negotiations, that plaintiffs are merely proposing terms or that L-P must approve the terms." 133 Or. App. at 642, 894 P.2d at 475. The majority goes to great lengths to describe the layout of those documents. Unfortunately, it does not analyze the import of the words used in them.
Neither page is an "original." Neither is a "copy" of the other.
ORS 72.2010 is a verbatim enactment of the Statute of Frauds in Article 2 of the UCC. The official commentary to UCC 2-201 indicates that the writing need not be a complete memorial of the contract, as long as it affords a sufficient basis for believing that a contract has been made. Tripp v. Pay 'N Pak Stores, Inc., 268 Or. 1, 5, 518 P.2d 1298 (1974). ORS 72.2010(2) eliminates the signature requirement when both parties are "merchants." The official commentary explains that failure to answer a written confirmation within 10 days makes the writing sufficient against both parties under subsection (1). Under both subsections (1) and (2) the writing must evidence the existence of an agreement between the parties. Failure to respond to a merchant's confirming memorandum takes away from the nonresponding merchant the Statute of Frauds defense. To ultimately prevail, however, the sender still must show that an oral contract was in fact made prior to the confirming memorandum. Here, it is not necessary to reach the issue of whether an oral contract was formed between the parties, because that contract would be unenforceable absent satisfaction of the Statute of Frauds. UCC § 2-201, comment 3.
"This letter is a written confirmation of our agreement. Please sign and return to me the enclosed counterpart of this letter signaling your acceptance of the above agreement." 567 F. Supp. at 342.
Courts in other jurisdictions have cited Great Western Sugar for the rule that a writing requiring the recipient to take further action by signing and returning a copy to the sender is merely an offer and, therefore, is not a confirmation of a prior oral contract under UCC section 2-201(2). Kline Iron & Steel v. Gray Com. Consultants, Inc., 715 F. Supp. 135, 142 (D DC 1989); Adams, 754 S.W.2d at 706; see also R.S. Bennett & Co., 606 F.2d at 185-86; Perdue Farms Inc. v. Motts, Inc. of Mississippi, 459 F. Supp. 7, 15-17 (ND Miss 1978); Howard Const. Co., 669 S.W.2d at 227; Trilco Terminal v. Prebilt Corp., 167 N.J. Super. 449, 454-55, 400 A. 2d 1237, 1240 (Law Division 1979).
Despite being labeled "ORDER CONFIRMATION," plaintiffs' forms unambiguously require L-P to sign and return a "confirmation copy" on which it has signified its acceptance. That language indicates that plaintiffs were seeking agreement from L-P in order to form a contract, rather than merely providing confirmation to L-P of a previously concluded oral agreement. The forms require further action by L-P. Consistent with the rule in Great Western Sugar, I would hold that the writings offered by plaintiffs were merely o ffers to L-P to enter into a contract, and not a confirmation of a prior oral contract betwee n them.
I would reverse the trial court's ruling that plaintiffs' forms constitute " writings in confirmation of a contract" under ORS 72.2010(2). Therefore, I would not reach the issues of lost profits and waiver of attorney-client privilege.
"(a) Between the client . . . and the client's lawyer or representative of the lawyer[.]"
"A person upon whom [OEC 503 to 514] confer a privilege against disclosure of the confidential matter or communication waives the privilege if the person . . . voluntarily discloses or consents to the disclosure of any significant part of the matter of communication. This [rule] does not apply if the disclosure is itself a privileged communication."
"Preliminary questions concerning the qualifications of a person to be a witness, the existence of a privilege or the admissibility of evidence shall be determined by the court. . . . In making its determination the court is not bound by the rules of evidence except those with respect to privileges."
4. If there is anything uniform about the way courts have decided the question presented here, it is that each document must be evaluated independently and in the light of its contents, and that there is no single correct answer to the question of the effect of a "sign and return" provision. Contrary to the view expressed by the dissent, our opinion is consistent with that analysis and does not create an Oregon exception.
The dissent disapprovingly suggests that our opinion holds that the form sent to L-P is a confirmation because it is labeled "ORDER CONFIRMATION." That certainly is one significant consideration. It is not the exclusive one, however, the primary inquiry being whether the contents of the form show that it is what it is labeled. It seems that the dissent would cast aside those considerations in favor of a rule that when a form contains a "sign and return" clause it cannot, as a matter of law, be an order confirmation. That is most clearly wrong.
7. Plaintiffs cite Bazak Intl Corp for its holding that buyer's written confirmation indicating that it was "ONLY AN OFFER AND NOT A CONTRACT UNLESS ACCEPTED IN WRITING BY THE SELLER" was, nevertheless, a writing in confirmation of an oral agreement within UCC section 2-201(2). However, that court acknowledged the general rule and distinguished the case on its peculiar facts. Id. at 123-24, 535 N.E.2d at 638. Plaintiffs also cite Busby, Inc. v. Smoky Valley, Bean, Inc., 767 F. Supp. 235 (D. Kan. 1991), for the proposition that highlighting of a "please sign and return" clause by the sender of a writing was insufficient to turn a written confirmation into an offer. In that case, hoever, the sender's written confirmation expressly stated that "receipt of this contract by the seller without written notice to us of objection or error within ten days is an acknowledgement of acceptance." Id. at 236. The court distinguished both Great Western Sugar and Adams, in which the recipients were required to take further action.
(1990), including Supp 10-14 (1994).
8. I would, however, address plaintiffs' cross-assignment that the trial erred in refusing to apply the United Nations Convention on Contracts for the International Sale of Goods (CISG), 15 USCA App (Supp 1994), instead of the UCC. Article 11 of the CISG does not require a contract to be "evidenced by writing" and, thus, would defeat L-P's statute of frauds defense if the trial court abused its discretion under ORCP 23 B in ruling that plaintiffs' attempt to raise the CISG was untimely and that they had waived reliance on that theory.
The case, GPL Treatment, Ltd. v. Louisiana-Pacific Corp., involved alleged sales of cedar shakes by a Canadian family wood products business to a U.S. corporate buyer. The seller (GPL) introduced testimony that a trader in the Portland, Oregon area offices of Louisiana-Pacific Corporation (L-P) agreed by telephone in May 1992 -- during a period of rising prices -- to purchase a large quantity of shakes from GPL. GPL asserted that later, when market prices began to fall, the parties orally renegotiated certain terms. GPL allegedly confirmed both the original sale and the renegotiated agreement by mailing to L-P "confirmation" forms that instructed the buyer to sign and return one copy of the form, but L-P did not return or otherwise respond to the confirmations. L-P, on the other hand, claimed that it had not committed itself to buying any shakes, and it denied receiving any confirmation forms. After accepting several shipments of shakes in July, L-P refused further deliveries and GPL sued in Oregon state court.
At trial L-P argued, inter alia, that GPL's claim was barred by Section 2-201(1) of the Uniform Commercial Code as enacted in Oregon This Statute of Frauds provision prevents enforcement of a contract for the sale of goods at a price of $500 or more unless the agreement is evidenced by a writing signed by the "party against whom enforcement is sought." Because the buyer had never signed any such writing, L-P argued, GPL's suit should be dismissed. GPL replied that the contract was enforceable under Section 2-201(2), an exception to the signed writing requirement. The exception applies if, in a merchant to merchant transaction, the party against whom enforcement is sought has failed to respond within ten days to a written confirmation of the contract received from the other side. Issue was joined over whether the statement on GPL's confirmation forms instructing the buyer to sign and return copies of the forms prevented those documents from satisfying the Section 2-201(2) requirement of a "writing in confirmation of the contract."
I would, however, address plaintiffs' cross-assignment that the trial court erred in refusing to apply the United Nations Convention on Contracts for the International Sale of Goods (CISG), 15 U.S.C.A. App. (Supp. 1994), instead of the U.C.C. Article 11 of the CISG does not require a contract to be "evidenced by writing" and thus, would defeat L-P's statute of frauds defense if the trial court abused its discretion under ORCP 23 B [governing the amendment of pleadings to conform to the evidence] in ruling that plaintiffs' attempt to raise the CISG was untimely and that they had waived reliance on that theory."
Putting aside the possibility that (as the trial court held) the seller had waived this argument, the alleged sales in GPL appear to be governed by the Convention rather than Article 2 of the U.C.C. Article l(l)(a) of CISG provides that the Convention applies to international sales of goods between parties located in different Contracting States. The alleged transactions in GPL were, apparently, cross-border sales between a Canadian seller and a U. S. buyer. The U.S. and Canada have both ratified CISG, and the transactions at issue occurred after the date that the Convention became effective in both countries. Thus, based on the facts stated by the Oregon Court of Appeals, CISG appears to apply under Article l(l)(a).
The foregoing highlights an important and highly practical lesson of the GPL case. The seller came perilously close to losing its suit -- indeed, it may still lose before the Oregon Supreme Court -- because it delayed raising the argument that CISG governed its transactions with L-P. At trial and on appeal, the U.C.C. Statute of Frauds was a major stumbling block for GPL. Only a controversial opinion by a divided Court of Appeals, still subject to review by the Oregon Supreme Court, gave GPL the win on a point that is a non-issue had CISG been applied. The case thus stands as a stark warning that all practitioners whose practice encompasses commercial matters should be familiar with the Convention. The Statute of Frauds is only one area in which CISG makes significant, potentially outcome-determinative changes in U.S. sales law. Other such areas include, but certainly are not limited to, contract formation, parol evidence, the effect of missing contractual terms, and remedies. Attorneys who fail to familiarize themselves with CISG and the crucial changes it makes risk both their clients' rights and their own professional reputation.
There is another significant aspect to the GPL case: it is the first reported CISG decision involving a transaction between Canadian and U.S. parties. This highlights an important fact: all current U.S. trade in goods with Canada, the United States' largest trading partner, is governed by CISG, unless the parties opt out of the Convention pursuant to Article 6. Because Mexico, the United States' third largest trading partner, has also ratified the Convention, the overwhelming majority of international sales in North America are subject to CISG unless the parties agree otherwise. In other words, CISG is in effect the sales law of the North American Free Trade Area created by the NAFTA Treaty and its implementing legislation.
The phenomenon of CISG acting as the sales law of different regional trading groups -- the result of the interplay between patterns of trade and patterns of ratification of the Convention -- is not surprising. Because of economic and cultural similarities within the groups, reasons that attract one member to the Convention are likely to appeal to other members. Ratification by one member of the group may also create a kind of momentum pushing others to keep in step.
This phenomena [sic] is already apparent in Europe. German courts have produced far more identified decisions applying CISG than the tribunals of any other country, and virtually all of the transactions underlying those decisions have involved sales between European parties. As yet there are relatively few U.S. decisions construing CISG, and those that have appeared have heretofore not involved Mexican or Canadian parties. The GPL case may, however, signal that sales involving parties within the North American Free Trade Area are coming to the fore in U.S. decisions construing CISG.
Whether a CISG decision originates in a fellow member of a trading group is, of course, just one of the factors likely to influence how much weight a tribunal attaches to the decision. Other factors will undoubtedly play important roles in the weighing of precedent. For example, a court may be more likely to learn of and follow decisions from other countries that share a legal tradition (e.g., common law or civil law) with the tribunal. Courts may also be more attracted to decisions from countries at a similar level of economic development with the forum state. Thus, it might be that a U.S. court would pay more deference to a decision from a developed nation in Western Europe than to one from Mexico, even though Mexico is part of the North American Free Trade Area and accounts for more U.S. trade than any European country. Even if this proves true, it does not mean that Mexico's membership in the North American trading group will not exert a special pull on U.S. courts, or that such pull does not create a tendency (albeit one that can be overcome by other factors) towards a North American tradition of interpreting CISG. This commentary merely argues that, other factors being equal, courts will tend to pay more attention to decisions from fellow members of a trading group.
The question is whether the development of distinct traditions of interpreting CISG in the different trading groups is part of a process that will lead, ultimately, to global uniformity in international sales law. How one answers that question may well echo one's vision of the role of trading groups in the development of free global trade. Do regional trading blocs constitute an obstacle to a free world-wide market, an additional institutional layer that fosters protectionism within the group and that must be overcome to achieve global free trade? Or do regional trading arrangements represent progress toward the development of free world commerce, interim steps that are part of a necessary evolution toward a common global marketplace? From the former viewpoint, the appearance of distinct traditions of interpreting CISG in the different trading groups will represent one more backward step in the struggle for unified law. Under the latter view, however, the emergence of regionalized interpretations of CISG may well be a necessary and desirable concomitant to the construction of a world trading regime through the development of supra-national regional trading arrangements.
CISG first became applicable to transactions starting in 1988. An increasing number of disputes governed by the Convention are now reaching the end of the pipeline and are generating court decisions. We are passing beyond the childhood of CISG jurisprudence and beginning to enter its adolescence -- a period troubling and unsettling, but also exciting and crucial to the ultimate success of the venture. Expertise concerning the Sales Convention cannot now be confined to a small group of scholars and international law specialists. In this age of global commerce, seemingly routine transactions are subject to CISG. The general commercial practitioner must be aware of the Convention and the significant changes it brings to sales law.
This period is also a critical one in the development of appropriate methods of construing and applying CISG. It is likely that court decisions during this crucial early period will reflect the broader trends of international trade -- in particular the proliferation and strengthening of regional trading groups. Whether that will be a stroke against the uniformity envisioned in Article 7 of the Convention, or whether it will help lay the foundation for ultimately achieving that uniformity, is not clear. The outcome will be determined by the efforts and intelligence of the lawyers, judges and commentators charged with understanding and applying CISG.
22. A variety of guides to and sources of information about CISG are available. In addition to the material published by the Journal of Law and Commerce in its ongoing project to promote understanding of CISG, see HONNOLD, supra note 15; ALBERT H. KRITZER, GUIDE TO PRACTICAL APPLICATIONS OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (1989); BUSINESS LAWS, INC., GUIDE TO THE INTERNATIONAL SALE OF GOODS CONVENTION (1994). Cites to CISG commentary and case law from around the world are collected in MICHAEL R. WILL, CISG, THE UN CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS: INTERNATIONAL BIBLIOGRAPHY, 1980-1995; THE FIRST 150 OR SO DECISIONS, 1988-1995 (1995). Case citations are also available through UNCITRAL, CLOUT: CASE LAW ON UNCITRAL TEXTS, U.N. DOC. A/CN.9/SER.C/ABSTRACTS/1 et seq. (1993 and later) and UNILEX, A Comprehensive and Intelligent Data Base [on floppy disk] on the UN Convention on Contracts for the International Sale of Goods, a project supervised by Professor M.J. Bonell for Transnational Publications of Irvington, New York. A World Wide Web database devoted to CISG ("http:/ cisgw3.1aw.pace.edu" or "http://www.cisg.law.pace.edu") is being constructed by the Institute of International Commercial Law of Pace University School of Law and should soon be available.

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