## Facts

- Super Electric Motors, Ltd. (Super Electric), a Hong Kong company with manufacturing operations in Shenzhen, China, manufactured refrigerator motors and sold them to Electrocraft Arkansas, Inc. (Electrocraft), a U.S. company.
- Electrocraft supplied Super Electric’s motors to refrigerator manufacturers, including major customers such as Whirlpool.
- The parties’ business relationship began around 2002, and Electrocraft inspected the motors before supplying them onward.
- Beginning in July 2008, Electrocraft received customer complaints that the motors were failing at an unacceptable rate.
- Electrocraft alleged it determined the motors had manufacturing defects that could not be cured and that returns and failures impaired Electrocraft’s ability to meet its customer obligations.
- Electrocraft alleged Super Electric acknowledged the motors were defective but refused to provide a remedy such as replacement or refund.
- Electrocraft claimed substantial losses, including loss of major customers, payments and expenses to resolve claims, and approximately 300,000 defective motors left in inventory with no productive use.
- Electrocraft sued asserting multiple theories, including claims under the Convention on Contracts for the International Sale of Goods (CISG), UCC Article 2 and warranty theories, negligence and/or strict liability, Arkansas Deceptive Trade Practices Act (ADTPA), unjust enrichment/restitution, and tortious interference with a business expectancy.
- It was not disputed on the motion that a valid contract governed the sales transactions and that the United States and China are CISG Contracting States; Electrocraft pleaded UCC claims in the alternative if the CISG were found inapplicable.
- Super Electric moved to dismiss under Rule 12(b)(6), arguing the CISG displaced the non-CISG claims and that the complaint did not state a CISG claim.

## Issues

1. Whether the CISG governed the parties’ international sales contract and displaced Electrocraft’s UCC-based contract and warranty counts covering the same sales dispute.
2. Whether Electrocraft’s allegations of defective motors, refusal to cure, and resulting losses were sufficient at the pleading stage to state a claim for relief under the CISG.
3. Whether Electrocraft’s remaining state-law theories (including ADTPA, tortious interference, negligence/strict liability, and unjust enrichment) could proceed to the extent they were independent of the CISG-governed contract claims.

## Decision

- The court granted in part and denied in part Super Electric’s motion to dismiss.
- The court held the CISG applied because the dispute arose from an international sale of goods between parties with places of business in different CISG Contracting States and there was no effective exclusion of the CISG.
- The court treated Electrocraft’s UCC Article 2 contract theories as alternative pleadings that did not remain viable once the CISG was found applicable, dismissing the UCC-based counts to the extent they duplicated CISG contract remedies.
- The court denied dismissal of the CISG claim, concluding the complaint’s allegations of nonconforming goods, notice of failures, lack of cure or remedy, and claimed damages were sufficient under federal pleading standards.
- The court dismissed or narrowed certain non-CISG counts to the extent they simply repackaged the contract dispute or were inconsistent with the existence of an express sales contract, while allowing other non-contract theories to continue insofar as they rested on allegations beyond nonconforming goods and ordinary breach-of-contract remedies.

## Legal Principles

- The CISG applies to contracts for the international sale of goods when the parties’ places of business are in different Contracting States, unless the parties clearly exclude the CISG.
- When the CISG governs, it supplies the contract rules for formation, conformity of goods, and contractual remedies, and state sales law (including UCC Article 2) does not provide an additional, parallel contract regime for the same subject matter.
- A plaintiff need not recite specific CISG articles at the pleading stage if the complaint alleges facts that plausibly support a claim that the seller delivered nonconforming goods and the buyer suffered compensable loss.
- State-law claims may be dismissed when they duplicate CISG contract rights and remedies, but claims based on duties or misconduct not addressed by the CISG may proceed if adequately pleaded.
- Quasi-contract theories such as unjust enrichment are generally unavailable where an express contract governs the parties’ relationship, absent a true alternative basis not covered by the contract.

## Conclusion

Electrocraft Arkansas, Inc. v. Super Electric Motors, Ltd. holds that the CISG controlled the parties’ cross-border motor sales dispute, leading the court to dismiss duplicative UCC-based contract theories while allowing Electrocraft’s CISG claim to go forward and permitting only those additional state-law claims that were not merely repackaged contract remedies (or were otherwise properly pleaded) to survive the motion to dismiss.


Electrocraft Arkansas, Inc. v. Super Electric Motors, Ltd., 70 UCC Rep. Serv. 2d 716 (2009)