Facts
- Raw Materials, Inc. (RMI), an Illinois company, contracted to buy used Russian railroad rail from Manfred Forberich GmbH & Co. KG (Forberich), a German seller.
- On February 7, 2002, the parties executed a written sales contract requiring Forberich to supply 15,000–18,000 metric tons of used rail, with delivery due by June 30, 2002, on terms providing delivery to RMI’s plant in Chicago Heights, Illinois.
- The parties later agreed to extend the delivery deadline to December 31, 2002, though they disputed the circumstances surrounding the extension request.
- Forberich asserted it had planned to source rail through a supplier (Imperio Trading) that allegedly defaulted in late June 2002; RMI disputed that Imperio’s rail was specifically committed to this contract and alleged misrepresentation.
- During winter 2002–2003, St. Petersburg experienced unusually severe freezing conditions, allegedly closing the port for months and preventing ships from departing.
- Forberich delivered no rail by the extended December 31, 2002 deadline.
- RMI sued for breach of contract and fraud; the parties agreed the CISG governed the sales transaction.
- RMI moved for summary judgment on the breach of contract claim; Forberich opposed, invoking CISG Article 79 as an excuse based on the port-freezing conditions.
Issues
- Whether RMI was entitled to summary judgment on breach of contract based on Forberich’s undisputed non-delivery by the extended deadline.
- Whether Forberich raised a triable defense under CISG Article 79 by showing an impediment beyond its control that was not reasonably foreseeable and could not reasonably be avoided or overcome.
- Whether factual disputes existed regarding foreseeability, causation, and alternative means of performance sufficient to preclude summary judgment.
Decision
- The court denied RMI’s motion for summary judgment on the breach of contract claim.
- The court held that, despite the undisputed failure to deliver, genuine disputes of material fact existed on Forberich’s CISG Article 79 defense.
- The court identified fact questions regarding whether the winter port conditions were extraordinary and unforeseeable and whether Forberich could reasonably have avoided or overcome the impediment (including through alternative sourcing or shipment options).
- The court treated the Article 79 inquiry as fact-intensive and inappropriate for resolution on the summary judgment record.
Legal Principles
- Under the CISG, Article 79 can excuse a party from damages for nonperformance if the party proves: (a) an impediment beyond its control, (b) that it could not reasonably have been expected to take the impediment into account at contract formation, and (c) that it could not reasonably have avoided or overcome the impediment or its consequences.
- Even where nonperformance is undisputed, summary judgment may be denied if the record permits competing findings on Article 79 elements such as unforeseeability and reasonable ability to avoid or overcome the impediment.
- In interpreting CISG Article 79, a federal court may consult domestic commercial impracticability and force majeure concepts as interpretive guidance while applying the CISG’s text and requirements.
Conclusion
The court refused to enter judgment for the buyer on a non-delivery claim because the seller’s CISG Article 79 excuse turned on disputed facts about the severity and foreseeability of the port-freezing conditions and whether the seller had reasonable alternatives to meet the contractual deadline.