United States September 4, 2026 District Court (Xiamen ITG Group Corp.Ltd. v. Peace Bird Trading Corp.)

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JURISDICTION

Before granting default judgment, “a court must first determine whether it has subject matter jurisdiction over the action.” Mt. Hawley Ins. Co. v. Pioneer Creek B LLC, 2021 WL 4427016, at *3 (S.D.N.Y. Sept. 27, 2021). Here, this Court has diversity jurisdiction under 28 U.S.C. § 1332 as the amount in controversy exceeds $75,000 and the Parties are diverse. Compl. ¶ 4; Reply. This Court also has federal question jurisdiction under the CISG. See 28 U.S.C. § 1331; see also Gramercy Holdings I, LLC v. Matec S.R.L., 2023 WL 5917624, at *16 (S.D.N.Y. Sept. 11, 2023) (“Because the CISG is a federal treaty, the claims brought under the CISG fall within the Court’s federal question jurisdiction, not only its diversity jurisdiction.”). 

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a. The CISG

The CISG “is a self-executing multilateral treaty that governs the rights and obligations of parties who enter into international sales contracts.” Ningbo Yang Voyage Textiles Co. v. Sault Trading, 2019 WL 5399973, at *2 (E.D.N.Y. Sept. 10, 2019). The CISG applies to contract claims between parties in signatory nations, unless the parties opt to be bound by another source of law. Delchi Carrier SpA v. Rotorex Corp.,71 F.3d 1024, 1028 (2d Cir. 1995); see also Claudia v. Olivieri Footwear Ltd., 1998 WL 164824 (S.D.N.Y. Apr. 7, 1998); Saint Tropez Inc. v. Ningbo Maywood Indus. & Trade Co., 2014 WL 3512807 (S.D.N.Y. July 16, 2014). Both China and the United States are CISG signatories. Ningbo Yang, 2019 WL 5399973, at *2. In the absence of a contradicting choice of law provision, the CISG governs here. The CISG is a notably obscure framework due to a scarcity of legal authority and dissonance with American legal principles. Indeed, “[b]ecause there is virtually no caselaw under the [CISG], we look to its language and to ‘the general principles’ upon which it is based.” Delchi., 71 F.3d at 1027–28. Nevertheless, the CISG offers a familiar approach to breach of contract. “A plaintiff asserting a breach of contract claim under the CISG must show: (1) the existence of a valid and enforceable contract containing both definite and certain terms, (2) performance by plaintiff, (3) breach by defendant and (4) resultant injury to plaintiff.” Ningbo Yang, 2019 WL 5399973, at *3 (citing Magellan Int’l Corp. v. Salzgitter Handel GmbH, 76 F. Supp. 2d 919, 924 (N.D. Ill. 1999)); see also Shantou Real Lingerie Mfg. Co. v. Native Grp. Int’l, Ltd., 2016 WL 4532911, at *3 (S.D.N.Y. Aug. 23, 2016) (“Under the CISG, like New York law, a contract is formed through offer and acceptance, evidencing an agreement to which both parties are bound.”). While seemingly analogous to American contract formation, there are some key distinctions. Contract formation under the CISG is unique in that it “need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.” CISG Art. 11, 19 I.L.M. at 674. “Thus, unlike American contract law, the CISG does not have a parol-evidence rule, and allows all relevant information into evidence even if it contradicts the written documentation.” Ningbo Yang, 2019 WL 5399973, at *4 (citation omitted). To be sure, “any evidence that may bear on the issue of formation is admissible.” Riccitelli v. Elemar New England Marble & Granite, LLC, 2010 WL 3767111, at *5 (D. Conn. Sept. 14, 2010) (citation omitted). This permits the Court to take a more wholistic examination of the record to determine contract formation. Controlling here, Article 9 binds the Parties to “any usage to which they have agreed and by any practices which they have established between themselves.” CISG Art. 9, 19 I.L.M. at 674. 

Likewise, the Parties are bound by industry norms “which in international trade is widely known[.]” Id. As such, trade usage and party customs are instructive. As detailed above, the Parties sent various, often competing, forms to one another prior to each shipment. Our task is to determine which of these communications constitutes an offer and acceptance. Offer Under the CISG, “[a]n offer exists ‘if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance.’ ” Fertilizantes Tocantins S.A. v. TGO Agric. (USA) Inc., 2024 WL 916529, at *12 (M.D. Fla. Mar. 4, 2024) (citing CISG, Art. 14(1)). An offer is sufficiently definite if it identifies three material terms: goods, quantity, and price. CISG, Art. 14(1), 19 I.L.M. at 674. Here, each transaction began with Defendants contacting ITG to inquire about the price and availability of fabrics. This initial inquiry does not constitute an offer, as it lacks sufficient detail. After the initial inquiry, ITG would provide Defendants a blank form contract which they would complete, listing the fabric, unit price, and quantity desired to be purchased. The completed sales contract constitutes an offer, as it is the first time in each transaction that goods, price, and quantity are identified. Acceptance “A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance.” CISG Art. 18, 19 I.L.M. at 675. Keeping in form with respecting established norms, an offeree may accept “as a result of practices which the parties have established between themselves or of usage[.]” Id. As to timing, “acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror.” Id. Here, once ITG received the completed sales contract (the offer), it would review it for price and availability, endorse it, and begin processing. ITG would then send an executed copy of the sales contract back to Defendants informing them of its assent. This constitutes acceptance. See Filanto, S.p.A. v. Chilewich Int’l Corp., 789 F. Supp. 1229 (S.D.N.Y. 1992). The Parties used the same customs since the inception of their relationship in 2016, establishing a proven method of contract formation. While a plaintiff must establish the elements for each cause of action, here it is sufficient to note that ITG and Defendants implemented the same offer-acceptance scheme for each shipment. In reviewing the Complaint, Reply, supporting documents, and affidavits, this Court has determined the Parties entered valid and enforceable contracts for each transaction. See generally Shipping Documents, ECF Nos. 85-8 – 85-52. While this Court has reviewed all documents in reaching this conclusion, we need not outline forty-four duplicative analyses. Performance Next, ITG must prove it performed under the agreements. Article 35 mandates “[t]he seller must deliver goods which are of the quantity, quality and description required by the contract and which are contained or packaged in the manner required by the contract.” CISG Art. 35, 19 I.L.M. at 679. ITG performed under the terms of the contract. See generally Compl. & Reply. Indeed, ITG provides documents for each transaction including contracts, packing slips, invoices, bills of lading, customs forms, and Guarantees. See Shipping Documents, ECF Nos. 85-8 – 85-52. Such sufficiently demonstrates ITG’s performance. But ITG acknowledges there are eleven shipments where the price on the invoices differed from the Guarantee. See Janiec Decl., Appx. A, n 9. As detailed above, the Parties expressly permit 3–10% a deviation for most transactions, and agreements that are silent as to deviation are governed by the 10% industry standard. For the most part, shipments fell within the express deviation and are sound under the plain terms of the contract. As to the shipments that arguably fell outside of the express or implied deviation, Defendants have lost their ability to assert lack of conformity. True, Article 36 provides that “[t]he seller is liable in accordance with the contract and this Convention for any lack of conformity[.]” CISG, 19 I.L.M. at 679. But the CISG provides time constraints to raise such objections. The CISG unambiguously requires “[t]he buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances.” CISG Art. 38, 19 I.L.M. at 680. A buyer cannot assert lack of conformity where, like here, it fails to examine the goods and provide the seller with reasonable notice. To be sure, (1) The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it. (2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee. CISG Art. 39, 19 I.L.M. at 680. The transactions at issue here occurred between 2017 and 2018. In all instances, Defendants accepted the shipments without objection. Defendants have long lost their ability to assert lack of conformity. To wit, ITG certifies it never received any complaints as to non-conformity. See 2022 Wang Decl. ¶¶ 23 & 41. 

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