1. What were the court’s holdings with respect to place of business, choice of applicable law and preemption of state contract law? 

2. On what basis did the court conclude that the parties had not sufficiently evidenced an intent to opt out of the CISG? What language would you have included in the purchase and confirmation orders to clearly evidence such an intent? 

3. What reasons did the court give for preempting state contract law in favor of the CISG?

The plaintiff, Asante, purchased electronic parts from the defendant, PMC, whose offices and factory were in Canada. Asante placed its orders through defendant’s authorized distributor, Unique Technologies, located in California. Asante’s order stated that the contract “shall be governed by the laws of the state shown on buyer’s address on this order.” PMC’s confirmation stated that the contract “shall be construed according to the laws of Canada.” Invoices were sent from Unique, and payment remitted to Unique, either in California or Nevada. Asante claimed that the goods did not meet its specifications and filed suit in California state court to have its claim decided under California law. When the case was transferred to a U.S. federal court, Asante requested that the case be remanded back to state court. 

The Convention on Contracts for the International Sale of Goods (“CISG”) is an international treaty which has been signed and ratified by the United States and Canada, among other countries … The CISG applies “to contracts of sale of goods between parties whose places of business are in different States … when the States are Contracting States.” CISG Art. 1 (1) (a). Article 10 of the CISG provides that “if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance.” CISG Art. 10 … 

It is undisputed that plaintiff’s place of business is Santa Clara County, California. It is further undisputed that…defendant’s corporate headquarters, inside sales and marketing office, public relations department, principal warehouse, and most of its design and engineering functions were located in Canada. However, plaintiff contends that, pursuant to Article 10 of the CISG, defendant’s “place of business” having the closest relationship to the contract at issue is the United States … 

Plaintiff asserts that Unique acted in the United States as an agent of defendant, and that plaintiff’s contacts with Unique establish defendant’s place of business in the United States for the purposes of this contract. Plaintiff has failed to persuade the Court that Unique acted as the agent of defendant … To the contrary, a distributor of goods for resale is normally not treated as an agent of the manufacturer … Furthermore, while Unique may distribute defendant’s products, plaintiff does not allege that Unique made any representations regarding technical specifications on behalf of defendant … Plaintiff’s dealings with Unique do not establish defendant’s place of business in the United States. 

Plaintiff’s claims concern breaches of representations made by defendant from Canada. Moreover, the products in question are manufactured in Canada, and plaintiff knew that defendant was Canadian, having sent one purchase order directly to defendant in Canada by fax … Moreover, plaintiff directly corresponded with defendant at defendant’s Canadian address … In contrast, plaintiff has not identified any specific representation or correspondence emanating from defendant’s Oregon branch. For these reasons, the Court finds that defendant’s place of business that has the closest relationship to the contract and its performance is British Columbia, Canada. Consequently, the contract at issue in this litigation is between parties from two different Contracting States, Canada and the United States. This contract, therefore, implicates the CISG.