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VLM Food Trading International, Inc. v. Illinois Trading Co.

United States Court of Appeals for the Seventh Circuit
811 F.3d 247 (2016)


Facts

American reseller Illinois Trading Co. (defendant) bought potatoes from Canadian supplier VLM Food Trading International, Inc. (plaintiff). Each transaction occurred the same way. First, Illinois sent VLM a purchase order specifying the product, quantity, and price. Second, VLM responded with an e-mail confirming those terms. Third, VLM shipped, and Illinois accepted the order. Fourth, VLM mailed a trailing invoice after the sale. An attorney fee-shifting provision appeared only in VLM’s trailing invoices. Illinois’s bookkeeper saw it, but the parties never discussed it during contract negotiations. When Illinois failed to pay for shipments, VLM sued to recover the amounts owed plus its attorneys’ fees. Illinois contested the claim for attorneys’ fees, arguing that the contract did not include a fee-shifting provision. The trial court mistakenly applied the Illinois Uniform Commercial Code (UCC) instead of the Convention on Contracts for the International Sale of Goods (Convention) and found the parties’ agreement included fee-shifting as standard industry practice. After Illinois appealed, the trial court found on remand that the agreement did not include fee-shifting and refused to award VLM attorneys’ fees. VLM appealed.

Rule of Law

Issue

Holding and Reasoning (Sykes, J.)

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