## Facts

- A Belgian company (seller) sold and delivered a machine to a Dutch company (buyer) in an international sale governed by the CISG.
- The parties’ written sales contract did not contain a retention-of-title clause.
- The seller’s invoice for the machine stated that the machine would remain the seller’s property until the buyer paid the price in full.
- The seller had used the same (or similar) retention-of-title language in every invoice sent to the buyer over the course of the parties’ long business relationship.
- The buyer made only a partial payment and left an outstanding balance.
- Before paying in full, the buyer entered into a sale-and-leaseback transaction with a second Dutch company: the buyer sold the machine to that company and leased it back.
- The seller sued the buyer for damages. The trial court entered a partial judgment for the seller, and both parties appealed to the Court of Appeals of ’s-Hertogenbosch.

## Issues

1. Whether a retention-of-title clause stated on the seller’s invoices (but not written into the parties’ contract) became part of the CISG-governed contract through interpretation of the parties’ conduct and their established practices (CISG Arts. 8 and 9), in the context of contract formation rules (Arts. 14, 18, and 19).
2. Whether the parties’ long-term course of dealing—repeated invoices containing the same clause and the buyer’s failure to object—supported finding the buyer’s assent to the retention-of-title term under the CISG.
3. If the retention-of-title term was incorporated, what contractual consequences followed from the buyer’s sale-and-leaseback disposition of the machine before full payment.

## Decision

- The Court of Appeals applied the CISG to the international sale between a Belgian seller and a Dutch buyer.
- The court held that the retention-of-title clause printed on the seller’s invoices was incorporated into the parties’ contract under the CISG.
- In reaching that conclusion, the court relied on the parties’ established practice in their prior dealings: the clause had been used consistently and repeatedly, and the buyer had not objected during the relationship.
- The court rejected the buyer’s position (raised by incidental appeal) that it had never implicitly accepted the retention-of-title clause.
- Because the retention-of-title clause was part of the contract, the buyer’s sale-and-leaseback arrangement entered into before full payment was inconsistent with the buyer’s contractual obligations to the seller.
- The court disposed of the appeal consistently with that holding on incorporation and its contractual effect, modifying the outcome to reflect that the reservation-of-title term bound the buyer.

## Legal Principles

- Under CISG Article 8, a party’s statements and conduct are interpreted in light of intent (when known) and otherwise by the understanding of a reasonable person, considering all relevant circumstances, including negotiations and later conduct.
- Under CISG Article 9(1), an established practice between parties can make standard terms binding, even when those terms are not reproduced in the signed contract document.
- A buyer’s continued contracting and performance in a long-running relationship, coupled with repeated receipt of invoices containing the same standard term and no protest, may support a finding that the term was agreed through practice under Article 9 and interpretive factors under Article 8.
- Retention-of-title language may be treated as a contractual term whose inclusion is decided under CISG rules on contract formation and interpretation (including Articles 14, 18, and 19), rather than being excluded merely because it appears in invoices rather than the contract’s main text.
- Once incorporated, a retention-of-title clause can limit the buyer’s contractual freedom to dispose of the goods before full payment as between seller and buyer, and the buyer’s contrary disposition can constitute breach.

## Conclusion

The Court of Appeals of ’s-Hertogenbosch held that the seller’s retention-of-title clause—consistently stated in invoices throughout the parties’ long relationship—became part of the CISG contract through established practice and interpretation of conduct; accordingly, the buyer’s sale-and-leaseback transaction before full payment conflicted with the buyer’s contractual obligations, supporting liability to the seller.


Belgian Company v. First Dutch Company, Case no. C0501069, UNCITRAL CLOUT Case 827 (2007)