Delchi Carrier SpA v. Rotorex Corp. 71 F.3d 1024 (2d Cir. 1995)
In January 1988, Rotorex Corporation, a New York corporation, agreed to sell 10,800 compressors to Delchi Carrier SpA, an Italian manufacturer, for use in Delchi’s “Ariele” line of portable room air conditioners. The air conditioners were scheduled to go on sale in the spring and summer of 1988. Prior to executing the contract, Rotorex sent Delchi a sample compressor and accompanying written performance specifications.
Rotorex sent the first shipment by sea on March 26. The shipment arrived at Delchi’s Italian factory on April 20. Rotorex sent a second shipment of compressors on or about May 9. While the second shipment was en route, Delchi discovered that the first lot of compressors did not conform to the sample model and accompanying specifications: 93 percent of the compressors were rejected in quality control checks because they had lower cooling capacity and consumed more power than the sample model and specifications. After several unsuccessful attempts to cure the defects in the compressors, Delchi asked Rotorex to supply new compressors conforming to the original sample and specifications. Rotorex refused, claiming that the performance specifications were not part of the contract because they were inadvertently communicated to Delchi.
Delchi was unable to obtain in a timely fashion substitute compressors from other sources and thus suffered a loss in its sales volume of Ariele air conditioners during the 1988 selling season. Delchi sued Rotorex for breach of contract and failure to deliver conforming goods under the United Nations Convention on Contracts for the International Sale of Goods (CISG). The district court judge issued a summary judgment holding Rotorex liable to Delchi for $1,248,331.87. This amount included consequential damages for lost profits resulting from a diminished