Summary of a Recent
Judicial Development in
Commercial Transactions

Consignee of a Contract Is Bound by All
Terms and Conditions of the Contract

Alfred N. Milam
National AgLaw Center Graduate Assistant

Summary of Decision

In Ana Distribution, Inc., v. CMA-CGM (America) Inc., 329 F.Supp.2d 565 (S.D. N.Y. 2004), the United States District Court for the Southern District of New York held that a commodities purchaser was deemed to have accepted all of the terms of a bill of lading, including the forum selection clause, and that the French legal system provides reasonable procedures for discovery.

Background

Ana Distribution, Inc. (Ana) was an importer of perishable agriculture commodities that were purchased from a European vendor. See id. at 566. The vendor's agent contracted defendant CMA-CGM (America) Inc., to ship pumpkins to Ana. See id. The pumpkins were delivered in a spoiled condition. See id. Ana subsequently brought an action to recover damages from the defendant for breach of contract and negligence. See id.

Arguments

Ana argued that the photocopies of the bills of lading given to them by the defendant was incomplete and illegal. See id. It also argued that as a consignee of the contract it is not bound by the terms and conditions on the bills of lading nor should it be bound by the defendant's publicly noticed standard. See id. at 567. Ana further argued that because French law does not provide adequate discovery, the forum selection clause of the bill of lading is "fundamentally unfair." See id.

The defendant argued that the case should be dismissed because of the forum clause requires any such action to be taken in Marseilles, France. See id. at 566.

Analysis and Holding

The court stated that the photocopies of the bills of lading were of poor quality, but that the forum selection clause was "clearly visible and legible" on the first two bills of lading. See id. at 567. It further stated that even if the forum clause had been illegible, "the forum selection language in the defendant's publicly noticed standard terms and conditions applies automatically." Id.

The court also determined that Ana's bringing an action as a consignee against the vendor's carrier is in effect bringing a suit as a third-party beneficiary of the contract between the vendor and carrier. See id. The court therefore determined that as a third party beneficiary Ana was bound by all of the terms and conditions of the contract upon which it sued, including the forum selection clause. See id.

Finally, the court stated that although there were some significant differences between the French and American system, "there are several perfectly adequate discovery methods available under French law." Id. at 568. Therefore the court denied Ana's request for discovery and granted the defendant's motion to dismiss. See id.

The case was decided on August 12, 2004; this summary was posted Mar. 21, 2005.