Question

To do a Case Analysis for the following (Background, Problem, Alternative course of action, Evaluating the alternatives, Recommendation, conclusion)

Shantou Real Lingerie Manufacturing Company (Shan- tou) is incorporated in China. Shantou manufactures and exports garments to the United States. Native Group International, Inc. (Native), is a corporation organized under the laws of New York engaged in the business of selling intimate wear to the wholesale and retail market. Between May and November 2013, Native placed dozens of orders with Shantou for lingerie. Following each order, Shantou issued a sales confirmation to Native, which referenced the cost, quantity, and type of goods ordered. These confirmations were signed by a representative of Native. Thereafter, Shantou manufactured the goods in accordance with the requested specifications. Between October 2013 and February 2014, Shantou delivered the goods specified in the confirmations to Native through five separate shipments. Shantou also included in each of the five shipments an invoice, indicating the total balance due, as well as the price, quantity, and type of products shipped. Native accepted each shipment, retained the goods delivered, and never claimed a set-off or credit. The total amount invoiced for the five shipments was $437,562.20. Native made payments totaling $165,522.80, leaving an unpaid balance of $272,040.40. The commu- nications between Shantou and Native were silent with respect to the governing law. Native claimed that there was no written contract between the parties when Shan- tou subsequently filed a lawsuit against Native for the unpaid balance. What law should govern the terms of the parties’ arrangement? Is a written agreement necessary in this case? What are the terms of the parties’ agreement if any? Shantou Real Lingerie Manufacturing Co. v. Native Group International, Ltd., 2016 WL 4532911

Answer 1

What law should govern the terms of the parties’ arrangement?

Contract law would govern the terms of the parties' agreement. The reason being that since its a commercial transaction done between two companies.

Is a written agreement necessary in this case?

No a written agreement is not necessary. The reason being that after the placement of each order by Native, Shantou issued sales confirmation to Native. These sales confirmations involved all the details such as quantity, price etc. These were also confirmed by representatives of Native.
Also, Shantou delivered 5 different shipments to Native. All these contained invoices which had details such as total amount due, quantity etc. Native accepted the shipments and never raised any issue or credit set-off.
While there is no written agreement, these invoices and sales confirmations, which have been signed by both parties, become the terms of contracts themselves. Since Native is accepting the documents and shipments without raising any issue, it is assumed that they have agreed to the implied terms.

What are the terms of the parties’ agreement if any?

As described above, the invoices and sales confirmations by themselves have become the terms of the contract. Whatever price, type of goods and quantity that is mentioned in those invoices and sales confirmations, is the governing and agreed upon quantity, price and type of goods. Since Native didn't raise any objections upon receiving them, it is assumed that they agreed to those terms.

In conclusion, Native should pay the unpaid dues to Shantou.