CISG.

Citation metadata

Date: Fall 2021
From: Business Lawyer(Vol. 76, Issue 4)
Publisher: American Bar Association
Document Type: Article
Length: 4,055 words
Lexile Measure: 2050L

Document controls

Main content

Article Preview :

SCOPE OF CISG: TORT PREEMPTION

Article 1 of the United Nations Convention on Contracts for the International Sale of Goods ("CISG" or the "Convention") provides the basic scope of the Convention. It applies to contracts for the sale of goods when parties are located in different countries that have ratified the CISG, as further explained and limited by the remaining language in Article 1. (1) The CISG does not, however, govern all aspects of a contract within its scope. For example, Article 4 provides that the Convention does not address contract validity or title. (2) Likewise, Article 5 states that the Convention does not address a seller's liability for personal injury or death due to the seller's goods. (3) When a case involves both tort and contract claims, the question can arise as to whether the Convention should preempt the tort claims.

In Perkins Manufacturing Co. ("Perkins") v. Haul-All Equipment Ltd. ("Haul-All"), (4) Haul-All, a Canadian seller of waste-management trucks with affixed sideloaders, sued Perkins, the Illinois manufacturer that supplied the sideloaders for Haul-All trucks. The suit was based on problems Haul-All experienced with the sideloaders, including broken and incorrect parts and equipment failures. (5) Perkins moved to dismiss four counts, but only Counts II (a state-law fraud-and-misrepresentation claim) and III (tortious interference with a business relationship) required a CISG analysis. The specific question before the court was whether the CISG preempts each count. The court held that the fraud-and-misrepresentation claim was preempted, but the tortious interference claim was not. (6)

Because Perkins argued that Haul-All's claims were preempted by the CISG, the court began its analysis with the general preemptive scope of the CISG. (7) Since the CISG is a treaty signed by the United States, it is federal law and, under the Supremacy Clause, it preempts inconsistent provisions of Illinois law. (8) The question, then, becomes what law is inconsistent with the CISG. Some issues are clear; as the court noted, federal courts agree that the Convention preempts state contract law. (9) The CISG generally does not preempt tort claims. (10) "However, 'a tort that is in essence a contract claim and does not involve interests existing independently of contractual obligations... will fall within the scope of the CISG regardless of the label given to the claim." (11)

With these rules in mind, the court found the tortious interference count was not preempted. Since the CISG does not apply to claims arising in tort, the CISG has no application to a claim for tortious interference with business relations. (12)

With respect to the fraud-and-misrepresentation claim, the question before the court was whether the claim was "'a breach-of-contract claim in masquerade.'" (13) The court held it was. (14) This analysis required the court to determine what right a party sued upon, whether the claim is a broken promise or a breach of a non-contractual duty, and to examine the form of the pleadings and the relief requested. A broken promise is contractual, whereas a breach of a noncontractual duty...

Source Citation

Source Citation   

Gale Document Number: GALE|A681135816