International Business Transactions
Professor Mike Ramsey
Spring 2015
Problem 4.1 Flowchart, with alternative fact patterns.
I. Problem 4.1(A) fact pattern: UK buyer contacts KS seller and requests delivery in Kansas;
seller responds with additional terms.
A. What choice of law rule applies?
Suit in Kansas:
KANSAS
Suit in UK:1
UK (Rome regulations)
B. What substantive law applies?
Suit in Kansas:
KANSAS (transaction has “appropriate
relation” to Kansas) (UCC 1-301[1-105])2
Suit in UK:
KANSAS (Seller’s location)
C. Is there a contract (if no performance)?3
Suit in Kansas:
Yes (UCC 2-207(1))
Suit in UK:
Yes (UCC 2-207(1))
D. Does the contract include seller’s additional terms?
Suit in Kansas:
No, if material; otherwise yes (UCC 2207(2))
Suit in UK:
No, if material; otherwise yes (UCC 2207(2))
1
Although not discussed in the book, it is very unlikely that there is personal jurisdiction over Universal in the UK
on these facts. However, Universal could sue Euro in the UK if it wished.
2
Contrary to what the book suggests, I do not believe it is even remotely possible that a Kansas court would decide
that the transaction lacks an adequate relationship to Kansas, because both the seller and the place of delivery are in
Kansas.
3
Performance will not change the outcome on these facts.
1
II. Variation on Problem 4.1(A) fact pattern: UK seller contacts KS buyer and offers delivery in
Kansas; buyer responds with different terms.
A. What choice of law rule applies?
Suit in Kansas:
KANSAS
Suit in UK:4
UK (Rome regulations)
B. What substantive law applies?
Suit in Kansas:
KANSAS (transaction has “appropriate
relation” to Kansas) (UCC 1-301[1-105])5
Suit in UK:
UK (Seller’s location)
C. Is there a contract (if no performance)?
Suit in Kansas:
Yes (UCC 2-207(1))
Suit in UK:
No (mirror image rule)
D. Is there a contract if parties perform?
Suit in Kansas:
Yes (UCC 2-207(1))
Suit in UK:
Yes (last shot rule; performance equals
acceptance)
E. Does the contract include buyer’s additional terms?
Suit in Kansas:
No, if material; otherwise yes (UCC 2207(2))
Suit in UK:
Yes (if parties have created a contract by
performance; otherwise there is no contract)
4
As above, n.1, it is very unlikely that there is personal jurisdiction over Universal in the UK on these facts.
However, Universal could sue Euro in the UK if it wished.
5
Despite the change in the seller’s location, I think it likely that a Kansas court would again find this transaction to
have an “appropriate relation” with Kansas under UCC 1-301/1-105, especially in light of the place of delivery.
2
III. Second variation on Problem 4.1(A) fact pattern: KS buyer contacts UK seller and requests
delivery in UK; seller responds with different terms.
A. What choice of law rule applies?
Suit in Kansas:
KANSAS
Suit in UK:6
UK (Rome regulations)
B. What substantive law applies?
Suit in Kansas:
Uncertain7
Suit in UK:
UK (Seller’s location)
C. Is there a contract (if no performance)?
Suit in Kansas:
Uncertain; yes if Kansas law applies, per
above, but no if UK law applies.
Suit in UK:
No (mirror image rule)
D. Is there a contract if parties perform?
Suit in Kansas:
Yes, under either Kansas or UK law.
Suit in UK:
Yes (last shot rule; performance equals
acceptance)
E. Does the contract include seller’s additional terms?
Suit in Kansas:
No, if material; otherwise yes if Kansas law
applies (UCC 2-207(2)). Yes if UK law
applies and parties have performed.
Suit in UK:
Yes (if parties have created a contract by
performance; otherwise there is no contract)
6
Unlike in the prior situations, it is possible that there is personal jurisdiction over Universal in the UK on these
facts.
7
Because the initial contact, the seller’s location and the place of delivery are all in the UK, it is much more likely
that a Kansas court would not find an “appropriate relation” with Kansas. However, the buyer’s location in Kansas
might be sufficient. I would need to know more about Kansas law to assess this scenario.
3
IV. Problem 4.1(B) fact pattern: German buyer contacts Kansas seller and requests delivery in
Kansas; seller responds with different terms. Note: Germany is a CISG party; the UK is not.
A. What choice of law rule applies?
Suit in Kansas:
Kansas
Suit in Germany:8
Germany
B. What substantive law applies?
Suit in Kansas:
CISG (art. 1(1)(a))
Suit in Germany:
CISG (art. 1(1)(a))
C. Is there a contract (if no performance)?
Suit in Kansas:
No, unless new terms are not material (Art.
19) (modified mirror image rule)
Suit in Germany:
No, unless new terms are not material (Art.
19) (modified mirror image rule)
D. Is there a contract if parties perform?
Suit in Kansas:
Yes; counteroffer + acceptance by conduct
(Art. 18(1))
Suit in Germany:
Yes; counteroffer + acceptance by conduct
(Art. 18(1))
E. Does the contract include seller’s additional terms?
Suit in Kansas:
Probably yes (last shot rule) (Filanto v.
Chilewith) (implied by Art. 18(1))
Suit in Germany:
Unclear (last shot rule or knockout)9
Note: Where the CISG applies, the same outcome will result under alternatives paralleling the
variations charted above (that is, German seller contacts KS buyer and offers delivery in Kansas;
buyer responds with different terms [variation 1] and KS buyer contacts German seller and
requests delivery in Germany; seller responds with different terms [variation 2]). In each case,
the CISG will apply to determine (a) whether there is a contract and (b) what its terms are.
8
As above, it is unlikely there is personal jurisdiction over Universal in Germany on these facts.
Although the CISG appears to indicate a last shot rule (Arts. 18-19) and U.S. courts seem to take that approach
(Filanto), the book indicates that some German cases have used a knockout rule. Thus on reflection I am not
confident of the outcome in Germany.
9
4
Without performance, the CISG will find no contract; with performance, the CISG will probably
find a contract including the additional terms (though possibly not if suit is in Germany). Note
under a “last shot” interpretation of the CISG, the governing law of the contract ends up being
Kansas law, because the CISG allows parties to opt out of the CISG (CISG Art. 6). Thus the
question whether the warranties are properly disclaimed is governed by the Kansas UCC.
Variations on Problem 4.1(B):
German seller and UK buyer:
Suit in Germany: Will apply CISG (CISG Art. 1(1)(b))
Suit in UK: Will apply CISG (Rome Regulation picks law of seller’s location; German
law is CISG)
UK seller and German buyer:
Suit in Germany: Will apply UK law (Rome Regulation picks UK law; CISG Art.
1(1)(b) does not apply)
Suit in UK: Will apply UK law (Rome Regulation)
KS Seller and UK buyer:
Suit in KS: Will apply UCC, not CISG (U.S. reservation to CISG Art. 1(1)(b)).
Suit in UK: Same.
Suit in Germany: Same (U.S. reservation to CISG Art. 1(1)(b) plus German
“observation” regarding Art. 1(1)(b)
5