VLM Food Trading International, Inc. v. Illinois Trading Co. Case Brief Summary | Law Case Explained

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VLM Food Trading International, Inc. v. Illinois Trading Co. | 811 F.3d 247 (2016)

Contracting parties sometimes exchange written instruments with differing terms while forming their contract. This is referred to as the battle of the forms. In V L M Food Trading International versus Illinois Trading, we explore how the United Nations Convention on Contracts for the International Sale of Goods determines what terms become part of the contract if there’s a battle of the forms.

V L M Food Trading International was a Canadian agricultural supplier. Illinois Trading was a United States produce reseller. Illinois Trading bought frozen potatoes from V L M in multiple separate transactions. Each time, Illinois Trading sent a purchase order to V L M specifying the quantity, price, and delivery place, and V L M responded with a confirming email. V L M then shipped the potatoes to Illinois Trading, which in turn accepted them. Finally, V L M mailed an invoice to Illinois Trading. The trailing invoices contained a provision obligating Illinois Trading to pay V L M’s attorney’s fees in the event that Illinois Trading breached the parties’ agreements. Illinois Trading paid the first nine invoices but failed to pay the next nine.

Accordingly, V L M sued Illinois Trading in federal district court for breach of contract, seeking payment and attorney’s fees. The district court originally found that the Uniform Commercial Code, or U C C, governed the parties’ agreements and that the fee provision in V L M’s trailing invoices was part of their contracts. The Seventh Circuit reversed and held that the United Nations Convention on Contracts for the International Sale of Goods, rather than the U C C, governed the parties’ agreements. On remand, the district court found that, under the convention, the fee provision wasn’t part of the parties’ contracts. V L M appealed to the Seventh Circuit.

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