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Adani Exports Limited v. AMCI Corp.

August 7, 2009

ADANI EXPORTS LIMITED, PLAINTIFF,
v.
AMCI (EXPORT) CORPORATION, ET AL, DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM ORDER

In anticipation of trial, both parties have filed Motions in Limine. The Motions have been fully briefed and are ready for disposition. The Motions will be addressed seriatim.

Adani's Pretrial Motion in Limine Concerning Contract

Formation Issues (Document No. 212)

As an initial matter the Court notes that it has previously ruled that "the question of whether a contract was formed must be resolved by the trier of fact." Memorandum Opinion and Order of Court, at 28 (December 4, 2007). Adani, however, has filed the instant motion in which it seeks rulings on six (6) separate contract formation issues. The requests will be addressed seriatim.

(1) "that the December 10, 2003 offer submitted by AMCI Export to Adani constitutes an 'offer' as defined by § 2206 of the Pennsylvania Uniform Commercial Code, that the jury will be so instructed, and that AMCI Export shall be precluded at trial from offering evidence or argument to the contrary."

On December 10, 2003, AMCI-India, on behalf of AMCI-Export, forwarded a three-page "detailed offer" to Adani. The letter describes itself as an "offer" four times within its text. In responding to the instant motion in limine, AMCI-Export did not counter the issue of whether the December 10, 2003, letter constitutes an "offer."

The Court finds that there is no triable question of fact as to whether the December 10, 2003, letter from AMCI-India, on behalf of AMCI-Export, constituted an offer as defined by § 2206 of the Pennsylvania Uniform Commercial Code and, therefore, Adani's request is GRANTED and AMCI-Export will be precluded at trial from offering evidence or argument to the contrary.

(2) "that the January 29, 2004 acceptance by Adani to AMCI Export constitutes an acceptance as defined by § 2206 of the Pennsylvania Uniform Commercial Code, that the jury will be so instructed, and that AMCI Export shall be precluded at trial from offering evidence or argument to the contrary."

This request goes directly to the heart of this litigation, to wit: whether the particular contract allegedly breached by AMCI-Export was ever formed. See Memo. Opinion at 22. Interestingly, while Adani asks the Court to find that the January 29, 2004 letter constitutes an "acceptance" of the offer, in its Amended Complaint Adani asserts that on January 9, 2004 it accepted the terms of AMCI Export's December 10, 2003 offer. See Amended Complaint, at ¶ 21.

As the Court ruled in its Memorandum Opinion, a genuine issue of material fact exists as to whether a contract was formed and that issue must be resolved by the trier of fact. For this reason, the request is DENIED.

(3) "that the December 10, 2003 offer contains all of the terms necessary for the formation of a binding agreement pursuant to the Pennsylvania Uniform Commercial Code, that the jury will be so instructed, and that AMCI Export shall be precluded from offering evidence or argument that there was no binding agreement because the parties 'never reached agreement on numerous material terms'."

The detailed three-page offer letter of December 10, 2003, specifically states that "All other terms shall be mutually agreed." Adani argues that it accepted the offer by letter of January 29, 2004. AMCI-Export disputes that the January 29, 2004 letter constitutes an acceptance. The key issue of whether the parties agreed to the essential terms and objectively manifested the intent necessary to form a contract is a question for the jury. Thus, Adani's request to preclude AMCI-Export from offering evidence or argument that there was no binding agreement because the parties "never reached agreement on numerous material terms" is DENIED.

(4) "that AMCI Export shall be precluded from offering evidence or argument at trial that a binding contract was not formed because Adani failed to satisfy a condition precedent by posting a letter of credit."

In seeking summary judgment, AMCI Export argued that Adani cannot maintain its breach of contract claim because of Adani's failure to have supplied a letter of credit. Adani responded that the letter of credit payment term in AMCI Export's offer was not a "condition precedent" to contract formation under Pennsylvania law.

Under Pennsylvania law, "[w]hile the parties to a contract need not utilize any particular words to create a condition precedent, an act or event designated in a contract will not be construed as constituting one unless that clearly appears to have been the parties' intention." Memo. Op. at 27. The Court found that the payment term in AMCI-Export's offer to Adani does not clearly indicate that obtaining of a letter of credit was a condition precedent to AMCIExport's duty to perform under the contract and held that Adani's alleged failure to post a letter of credit opened through a first class / prime bank did not entitle AMCI-Export to summary judgment on that issue. Accordingly, although the letter of credit payment term in AMCIExport's offer letter of December 10, 2003, was to be a condition of the alleged contract, it was certainly not clearly indicated that it would constitute a condition precedent to the formation of the alleged contract. Indeed, in common business practice an executed written contract is a prerequisite to securing a letter of credit from a financial institution.

Therefore, the instant request is GRANTED to the extent that AMCI-Export will be precluded at trial from presenting evidence or arguing to the jury that Adani's alleged failure to post a payment term letter of credit was a condition precedent to the formation of the alleged contract or AMCI-Export's duty to perform under the alleged contract.

This ruling does not, however, preclude AMCI-Export from presenting evidence to the jury regarding the fact that Adani did not secure / post a letter of credit. The significance, if any, of Adani's failure to have secured and/or posted a letter of credit will be left to the jury to determine.

(5) "that the jury will be instructed that Adani's January 29, 2004, acceptance of the December 10, 2003, offer is sufficient to form a binding contract under the terms of the Pennsylvania Uniform Commercial Code unless the circumstances unambiguously indicated that a signed writing was a prerequisite to the formation of a contract."

As noted in Paragraph (2) supra, the Court will not, as a matter of law, make a finding that the January 29, 2004 "acceptance" by Adani to AMCI-Export is sufficient to form a binding contract under the terms of the Pennsylvania Uniform Commercial Code. Thus, Adani's request is DENIED.

(6) "that because on six occasions prior to December 10, 2003, AMCI Export made vessel nominations, accepted vessel nominations from Adani and fixed vessels before both parties signed a formal contract, no reasonable jury could find that the circumstances unambiguously indicated that a signed writing was a prerequisite to the formation of the January 2004 contract at issue."

In its Memorandum Opinion of December 2007, the Court ruled on this exact issue, citing to the parties' past course of dealing as creating an issue of fact for the jury as to whether the parties intended to contract absent an executed written contract document:

[I]n light of the ongoing discussions between the parties after the contract was allegedly formed and the parties' long history of reducing the terms of their agreements to writing, the Court cannot conclude as a matter of law that the parties formed a binding contract. Under these circumstances, the question of whether a contract was formed must be resolved by the trier of fact.

Memorandum Op. at 28. Adani now requests that the Court make a finding that "because of the six occasions prior to December 10, 2003" when AMCI Export made vessel nominations, accepted vessel nominations from Adani and fixed vessels before both parties signed a formal contract," that no reasonable jury could find that the circumstances unambiguously indicated that a signed writing was a prerequisite to the formation of a contract in this case.

Adani's request is DENIED. The significance, if any, of the prior six occasions when AMCI-Export made vessel nominations, accepted vessel nominations from Adani and/or fixed vessels before both parties ...


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