## Facts

- Afram Export Corp., a Wisconsin scrap exporter, contracted with Metallurgiki Halyps, S.A., a Greek steel producer, for 15,000 tons of clean shredded scrap at $135/ton, F.O.B. Milwaukee, delivery by the end of April 1979.
- The agreement was formed through trans-Atlantic communications and an exchange of telexes; performance required tender and transfer of possession in Milwaukee.
- Metallurgiki planned to use the scrap to manufacture steel for a separate supply commitment abroad and arranged for an agent, Shields, to inspect the scrap for cleanliness before shipment; Afram agreed to pay the agent’s expenses.
- Shields traveled to Milwaukee to inspect the scrap; the evidence supported that he reported the scrap was clean but indicated Metallurgiki would not accept it because market prices had fallen.
- Metallurgiki refused acceptance; Afram resold the scrap to other buyers and sued for breach in federal court in Wisconsin.
- Metallurgiki contested personal jurisdiction and counterclaimed, alleging Afram’s purported nonconforming tender prevented Metallurgiki from performing its downstream contract.
- After a bench trial, the district court found for Afram, awarded $425,149, and dismissed the counterclaim; Metallurgiki appealed and Afram cross-appealed seeking additional amounts (including incidental items, prejudgment interest, sale-related expenses, and attorney’s fees).

## Issues

1. Whether Wisconsin could exercise personal jurisdiction over Metallurgiki consistent with the state long-arm statute and due process.
2. Whether Metallurgiki justified rejection by proving the scrap was nonconforming, or instead breached to avoid a disadvantageous fixed-price contract after a market decline.
3. Under the UCC, what measure of seller’s damages applied after resale, and what limits governed proof of resale/market differentials and incidental items.
4. Whether Metallurgiki could recover on its counterclaim for alleged consequential losses tied to an asserted breach by Afram.

## Decision

- The Seventh Circuit affirmed personal jurisdiction over Metallurgiki.
- The court affirmed the finding that Afram tendered conforming scrap and that Metallurgiki breached by refusing acceptance.
- The court upheld the dismissal of Metallurgiki’s counterclaim.
- The court largely left the damages outcome intact, rejecting Afram’s attempt to expand recovery beyond what the record and UCC remedies supported and declining to allow attorney’s fees absent a contractual or statutory basis.

## Legal Principles

- A foreign buyer purposefully avails itself of a forum, and may be subject to personal jurisdiction there, when it enters a substantial contract with a forum seller requiring delivery in the forum and sends an agent into the forum to inspect or facilitate performance.
- A buyer may not reject conforming goods simply because the market price falls; opportunistic refusal constitutes breach of contract.
- Under the UCC, a seller’s recovery is aimed at placing the seller in the position it would have occupied had the contract been performed, without a windfall; damages may be based on contract-resale or contract-market differentials, subject to proof and commercial reasonableness.
- Incidental damages are recoverable only to the extent they are reasonable and supported by evidence linking them to the breach.
- Attorney’s fees are not recoverable as UCC damages absent an express contractual provision or statute.

## Conclusion

The Seventh Circuit held that Wisconsin could exercise jurisdiction over a Greek buyer that contracted for F.O.B. Milwaukee delivery and sent an inspector to Wisconsin, and it affirmed liability and UCC-based damages after the buyer refused conforming goods due to a market decline while rejecting expanded recovery and consequential counterclaim theories unsupported by the trial findings.


Afram Export Corp. v. Metallurgiki Halyps, S.A., 772 F.2d 1358 (7th Cir. 1985)