1:14-cv-00412
D. Colo.Jul 28, 2015Background
- Orica (Australia) contracted with Aston (Colorado) to buy four Tempest 1600 evaporation units for trial at the Oaky Creek mine in Australia; negotiations occurred in 2011–2012 and purchase orders were issued in May–July 2012.
- The parties disputed whether standardized “Conditions of Purchase” on Orica’s purchase orders (including an MDG 41 compliance requirement and warranty allocations) became part of the contract.
- Orica inspected the units, found defects (including alleged non‑compliance with Australian MDG 41), nevertheless deployed them subject to ongoing efforts to fix problems; units operated from Aug–Dec 2012 through May 2013 for varying hours.
- In June 2013 Orica demanded refund and return, alleging design defects; Aston refused and contends any issues were due to purchaser maintenance failures.
- Procedurally: Aston moved for summary judgment; the court analyzed formation of the contract (CISG vs UCC), revocation/timeliness/waiver issues, deterioration, and lost‑profits damages, and denied summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Governing law (CISG vs UCC) | CISG applies to international sale between AU and US parties and was not opted out | UCC principles (esp. §2‑207) should govern interpretation of purchase order terms | Court: CISG applies; parties did not show they opted out, so CISG governs contract formation and remedies |
| Formation & inclusion of Purchase Order terms for Unit 1 | Orica: May 11 e‑mail and later conduct (invoicing, payment, performance) show acceptance of the Unit 1 Purchase Order including Conditions of Purchase | Aston: Parties had an earlier informal agreement by May 11; the later purchase order merely added terms (Conditions) that materially alter the deal and thus do not become part of contract (invoking UCC §2‑207 theory) | Court: Genuine dispute of material fact about when contract formed and whether May 15 or May 21 communications formed acceptance; cannot decide as matter of law—deny summary judgment |
| Formation for Units 2–4 | Orica: later POs and discussions created contracts including the POs’ terms | Aston: applies same informal‑agreement argument to Units 2–4 | Court: Genuine factual dispute exists; summary judgment denied (and court will not sua sponte resolve without notice) |
| Revocation, waiver (MDG 41), timeliness, and deterioration | Orica: raised defects, cooperated with Aston to fix problems, timely revoked acceptance in June 2013; deterioration due to defects, not purchaser neglect | Aston: Orica knew nonconformity before acceptance (waiver); revocation was unreasonably late; units deteriorated from purchaser’s failure to maintain, forfeiting remedy | Court: Material factual disputes exist on waiver, timeliness, and cause of deterioration—those issues for jury; summary judgment denied |
| Lost profits damages | Orica: has testimony that Oaky Creek intended to buy units if trial succeeded and an agreed purchase price—sufficient to show fact of lost profits and a method to calculate | Aston: Orica’s lost‑profit claim is speculative and cannot be proven with reasonable certainty | Court: Under CISG (art. 74) and analogous Colorado standards, Orica presented sufficient evidence for a jury on both fact and calculation of lost profits; summary judgment denied |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard and genuine dispute inquiry)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment and drawing inferences)
- MCC‑Marble Ceramic Ctr., Inc. v. Ceramica Nuova D’Agostino, S.P.A., 144 F.3d 1384 (CISG requires inquiry into subjective intent and parties’ communications)
- VLM Food Trading Int’l, Inc. v. Ill. Trading Co., 748 F.3d 780 (treatment of post‑formation purchase orders as contract amendments under CISG jurisprudence)
- Delchi Carrier SpA v. Rotorex Corp., 71 F.3d 1024 (application of CISG damages, including loss of profit)