## Facts

- A Canadian seller (VLM Food Trading International, Inc.) sold frozen potatoes to an Illinois buyer (Illinois Trading Co.) through multiple transactions beginning in 2012.
- For each shipment, Illinois Trading sent purchase orders stating product, quantity, and price; VLM accepted by email confirmation, shipped the goods, and Illinois Trading accepted delivery.
- After delivery, VLM sent “trailing invoices,” some of which included an attorneys’ fees clause making the buyer liable for collection-related fees upon breach.
- After a period of timely payments, Illinois Trading experienced financial difficulty and did not pay for nine later shipments; VLM sued for the unpaid amounts and sought attorneys’ fees and interest based on the invoice terms.
- The district court initially entered default against Illinois Trading, its controlling partnership, and its president, later vacating default only as to the president; the case then proceeded with defendants contesting any fee obligation.
- In an earlier appeal, the Seventh Circuit held that the CISG governed the dispute and remanded for contract-formation analysis under the CISG.
- On remand, the district court held the invoice attorneys’ fees clause was not part of the contracts and granted summary judgment against VLM on fees; it also ruled VLM had waived reliance on the prior default, allowing all defendants to benefit from the CISG ruling.

## Issues

1. Whether, under the CISG, an attorneys’ fees clause contained only in post-formation “trailing invoices” became part of the parties’ sales contracts.
2. Whether VLM could rely on earlier entries of default to impose fee liability on defendants despite the merits ruling, or whether that reliance was waived by litigation conduct and untimely assertion.

## Decision

- The Seventh Circuit affirmed.
- The court held the contracts were formed by purchase orders and email confirmations (followed by shipment and acceptance), before the trailing invoices were sent.
- The attorneys’ fees clause was an additional, material term proposed after contract formation and did not become part of the contracts because Illinois Trading never expressly assented to it.
- The court upheld the finding that VLM waived any right to rely on the prior entries of default by failing to raise default-based arguments in a timely manner (waiting until a reply brief on remand), so all defendants could invoke the CISG merits ruling.

## Legal Principles

- The CISG governs formation and modification of contracts for the international sale of goods between parties located in different Contracting States (here, Canada and the United States).
- Under the CISG, additional or different terms that materially alter an offer (CISG art. 19) require acceptance; a post-formation document adding a material obligation is treated as a proposed modification requiring clear assent.
- A fee-shifting provision imposing liability for attorneys’ fees is a material term; silence, continued performance, or mere receipt of invoices does not, without more, establish acceptance of that obligation.
- A party may waive reliance on an entry of default by proceeding on the merits and failing to timely press default-based consequences; raising the point only in late briefing supports waiver.

## Conclusion

The Seventh Circuit held that, under the CISG, an attorneys’ fees clause added only in trailing invoices after contract formation was not incorporated without express assent, and it further held that the seller forfeited any advantage from earlier default entries by asserting default-based arguments too late.


VLM Food Trading Int’l, Inc. v. Ill. Trading Co., 811 F.3d 247 (7th Cir. 2016)