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Valero Marketing & Supply Co. v. Greeni Oy & Greeni Trading Oy
United States District Court for the District of New Jersey
373 F. Supp. 2d 475 (2005)
Valero Marketing & Supply Company (Valero) (plaintiff) was an American reformulated-gasoline producer. Greeni Trading Oy (Greeni) (defendant) was a Finnish company that bought and sold petroleum products. Both companies were parties to the United Nations Convention on Contracts for the International Sale of Goods (CISG), which governed contracts for goods between signatories with places of business located in different countries. In August 2001, Greeni’s cargo broker, Starsupply Petroleum Feedstocks, Inc. (Starsupply), facilitated an oral agreement between Valero and Greeni for the sale of 25,000 metric tons of naphtha, a type of oil, to be delivered to Valero’s tanks in New York Harbor between September 10 and September 20. Starsupply faxed a confirmation of the sale to Valero and Greeni, which outlined the specific terms and included a provision stating that English law would govern the agreement. Thereafter, Valero sent Greeni a confirmation containing the same terms, except that the confirmation designated New York law as the applicable law. Neither party explicitly acknowledged the conflicting choice-of-law clauses. Greeni informed Valero that a ship named Bear G would perform the delivery. Valero rejected Greeni’s proposed use of Bear G because the ship had failed various quality tests. Disregarding the rejection, Greeni used Bear G anyway. On September 14, Valero agreed to accept the naphtha from Bear G as long as barges were used to deliver the naphtha to Valero’s tanks. Valero also agreed to extend the delivery window to September 24 on the condition of a discounted price. Bear G entered New York Harbor on September 22 and attempted delivery to Valero’s tanks without barges, and Valero rejected delivery. As a result, Greeni did not deliver any naphtha. Valero sued Greeni for breach of contract and moved for summary judgment, arguing that New York law should apply to the dispute.
Rule of Law
Holding and Reasoning (Debevoise, J.)
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