## Facts

- Forestal Guarani S.A., an Argentine manufacturer of wooden finger-joints, entered an oral arrangement with Daros International, Inc., a New Jersey import–export firm, for Daros to sell Forestal’s finger-joints to U.S. customers.
- The parties agreed the transaction was governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG).
- Forestal shipped finger-joints valued at $1,857,766.06.
- Daros paid $1,458,212.35, admitted receiving the goods and making the partial payment, but refused to pay the remaining balance.
- Forestal sued for breach of contract in New Jersey state court; Daros removed to federal court.
- Daros sought summary judgment, arguing that Argentina’s CISG Article 96 declaration preserved a writing requirement, making the oral contract unenforceable.
- The district court granted summary judgment to Daros based on the absence of a written contract.

## Issues

1. Whether, when only one party’s country has made a CISG Article 96 declaration, the CISG itself requires the parties’ sales contract to be in writing.
2. Whether a court must apply the forum state’s choice-of-law rules to determine which domestic law governs contract form before deciding whether a writing is required.
3. Whether summary judgment was improper where the district court treated the Article 96 declaration as automatically barring enforcement of an oral agreement.

## Decision

- The Third Circuit vacated the summary judgment and remanded.
- The court held that an Article 96 declaration does not, by itself, impose a CISG-based writing requirement in every transaction involving a party from the declaring state.
- The court held the proper approach is to apply the forum state’s choice-of-law rules to determine which jurisdiction’s domestic law governs formal validity, and then apply that law’s form requirements.
- Because the record and briefing did not permit resolution of whether New Jersey or Argentine law governed, the court declined to decide enforceability and returned the case for further proceedings.

## Legal Principles

- CISG Article 11 generally permits formation and proof of a sales contract without a writing, but Article 96 allows a contracting state to declare that Article 11 and related non-writing provisions do not apply where a party has its place of business in that state.
- An Article 96 declaration functions as a reservation that displaces the CISG’s no-writing rule for affected transactions, but it does not itself supply a universal writing requirement; the relevant requirement comes from the applicable domestic law.
- When only one party’s state has made an Article 96 declaration, a court must determine, under the forum’s conflict-of-laws rules, which domestic law governs the issue of contract form.
- Granting summary judgment solely because no writing exists is error if the court has not first determined which jurisdiction’s law controls contract formalities.

## Conclusion

The Third Circuit held that the presence of an Article 96 declaration by one party’s home state does not automatically render an oral CISG sales contract unenforceable; instead, the court must first apply the forum’s choice-of-law rules to identify the governing domestic law on contract form, then evaluate enforceability under that law.


Forestal Guarani Sociedad Anonima v. Daros Int'l, Inc., 613 F.3d 395 (3d Cir. 2010)