Overview
American Distributors, Inc. (American) contacts Worldwide Products Company (Worldwide) about a product that Worldwide sells and asks about the quality and specifications of the product and the cost of ordering 10,000 units of the product.
Worldwide responds with information about the quality and specifications of the product and quotes a price of $10 per unit of the product or a total price of $100,000 for 10,000 units of the product delivered to American’s place of business.
American responds to the information provided by Worldwide by ordering 10,000 units of the product for a total price of $100,000 to be delivered to a customer of American, Drop-Shipper Company (Drop-Shipper).
When American’s order was received, Worldwide delivered the products to Drop-Shipper and sent an invoice to American.
- Do American and Worldwide have a valid contract if American and Worldwide both are considered to have places of business in the United States? If there is a contract, at what point in these exchanges was that contract formed?
- If American is considered to have a place of business in the United States, Worldwide is considered to have a place of business in Italy, and Drop-Shipper is considered to have a place of business in Canada, is there a valid contract? If there is a contract, does CISG apply? If CISG applies to the contract, at what point in these exchanges was that contract formed, and how does CISG affect the terms of the contract?