Treibacher Industrie, A.G. v Allegheny Technologies, Inc (2006)
Facts: The case proceeded to a bench trial, where TDY and Treibacher disputed the meaning of the term “consignment”-the delivery term contained in both contracts. TDY introduced experts in the metal industry who testified that the term “consignment,” according to its common usage in the trade, meant that no sale occurred unless and until TDY actually used the TaC. Treibacher introduced evidence of the parties' prior dealings to show that the parties, in their course of dealings (extending over a seven-year period), understood the term “consignment” to mean that TDY had a binding obligation to pay for all of the TaC specified in each contract but that Treibacher would delay billing TDY for the materials until TDY had actually used them.
TDY now appeals. TDY contends that, under the CISG, a contract term should be construed according to its customary usage in the industry unless the parties have expressly agreed to another usage. TDY argues, in the alternative, that the district court erred in finding that, in their course of dealings, Treibacher and TDY understood the term “consignment” to require TDY to use and pay for all of the TaC specified in each contract. Finally, TDY contends that, if we uphold the district court's ruling that TDY breached its contracts with Treibacher, we should remand the case for a new trial on damages on the ground that the district court erroneously found that Treibacher reasonably mitigated its damages.
SUMMARY AND FINDINGS
A) By analysis of the CISG, which governs the formation of and rights and obligations under contracts for the international sale of goods. CISG, arts. 1, 4. Article 9 of the CISG provides the rules for interpreting the terms of contracts. Article 9(1) states that, “parties are certain by any usage to which they have agreed and by any practices which they have established between themselves.” Article 9(2) then states that,...
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