DOWNLOAD PDF: Third Circuit Addresses Effect of Article 96 Declaration Under the CISG

The United Nations Convention on Contracts for the International Sale of Goods ("CISG")1 allows private actors from different CISG Contracting States2 to transact business without having to reduce their agreements to writing.3 This "freedom from form" has been described as a bedrock principle of international commercial law.4 However, this freedom from the requirement of a written contract is not absolute. The CISG also allows Contracting States to require that contracts for the sale of goods be in writing.5 But what happens when one party to a contract is from a Contracting State that requires a written contract, and another party is from a Contracting State that allows non-written contracts? Recently, the Third Circuit Court of Appeals was forced to address this question in Forestal Gurani S.A. v. Daros International, Inc.6

The case concerned the sale of softwood lumber products by Forestal Guarani (an Argentine company) and Daros International (a New Jersey-based importer). Forestal alleged that in 1999, it entered into an oral agreement with Daros to sell wooden finger joints valued at US$1.8 million. Daros subsequently paid Forestal US$1.4 million. Forestal brought an action in New Jersey Superior Court seeking the balance it claimed was owed under the contract. That action was subsequently removed to the District Court for the District of New Jersey.