## Facts

- A German seller (plaintiff) and a French buyer (defendant) negotiated an international sale of electronic parts governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG).
- The buyer sent a purchase order stating that the final price would be reduced if market prices decreased.
- The seller replied that the final price would also be increased if market prices increased.
- The seller shipped the parts to the buyer.
- After shipment, the buyer attempted to partially cancel the order for certain parts and rejected delivery of the parts corresponding to the canceled portion.
- The seller refused to take back the rejected parts and sued for payment of the full order.
- The buyer argued that no binding contract was formed under the CISG because the price was not fixed and because the seller’s reply altered the offer.
- The Court of Appeal of Paris (22 April 1992) ruled for the seller.
- The buyer filed an appeal on points of law (pourvoi) to the French Court of Cassation, invoking CISG Articles 19(2) and 86(1).

## Issues

1. Under CISG Article 19(2), did the seller’s reply—adding an upward price-adjustment term—prevent contract formation by constituting a counter-offer rather than an acceptance?
2. Was the buyer’s offer insufficiently definite under the CISG because it did not state a fixed price, but instead used a market-based price-adjustment mechanism?
3. Under CISG Article 86(1), what obligations did the buyer have regarding the goods it purported to reject, and could it retain the goods without showing preservation expenses?

## Decision

- The Court of Cassation dismissed the buyer’s appeal and left the Court of Appeal’s judgment in place.
- The court upheld the conclusion that a CISG contract existed: the parties’ exchange identified the goods and provided a workable method for determining the price by reference to market movements.
- The court rejected the buyer’s argument that the absence of a fixed numerical price prevented contract formation where the agreed pricing method made the price determinable.
- On CISG Article 19(2), the court accepted the lower court’s treatment of the seller’s response as not defeating contract formation, despite the added upward-adjustment term.
- On CISG Article 86(1), the court accepted that a buyer who intends to reject delivered goods must take reasonable steps to preserve them, and any claim to retain goods for reimbursement depends on showing reasonable preservation expenses; the buyer could not rely on Article 86(1) without such a claim.

## Legal Principles

- A CISG sales contract is not invalid merely because the price is not fixed at the outset; a price term can be sufficiently definite when the parties’ agreement makes the price objectively determinable (for example, by reference to market prices).
- Under CISG Article 19(2), a reply that adds or changes terms does not prevent contract formation if the change is treated as non-material and the parties’ conduct supports the existence of agreement.
- CISG Article 86(1) requires a buyer in possession of goods, who intends to reject them, to take reasonable steps to preserve the goods in the circumstances.
- A buyer’s ability to retain goods as security for reimbursement under CISG Article 86(1) depends on proof of reasonable preservation expenses; without such proof, Article 86(1) does not justify continued retention.

## Conclusion

Unilex, D. 1995-1, CLOUT Case 155 (1995) affirmed that the CISG permits contract formation where the price is set through a market-based mechanism that makes the price determinable, treated the seller’s added upward adjustment term as not defeating acceptance under Article 19(2), and applied Article 86(1) to confirm the buyer’s duties concerning preservation and any expense-based right to retain rejected goods.
