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Telephone-Communication Buy-Sell Arrangements Sufficient for Long-Arm Jurisdiction/Forum Selection Clause In Invoices Not Enforceable Pursuant to UCC 207

The First Department determined that telephone communications re: the sale of diamonds between a seller in New York and a buyer in California were a sufficient basis for New York's long-arm jurisdiction over the California defendant.  The court further found that the forum selection clause and consent to jurisdiction in the relevant invoices were additional terms which, pursuant to UCC 207, were never expressly agreed to and therefore not enforceable:

UCC § 2-207 contemplates situations like the one here, where parties do business through an exchange of forms such as purchase orders and invoices. As the parties did here, merchants frequently include terms in their forms that were not discussed with the other side. UCC § 2-207[2] addresses that scenario, providing, “[t]he additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: … [b] they materially alter it.”

Here, during telephone discussions, the parties negotiated the essential terms required for contract formation, and the invoices were merely confirmatory … . Thus, the forum selection clause is an additional term that materially altered the parties' oral contracts, and defendant did not give its consent to that additional term … . …

… [T]he motion court erred in finding that the parties' telephone dealings over several years and in the two transactions at issue were insufficient as a matter of law to confer personal jurisdiction over defendant pursuant to CPLR 302(a)(1). CPLR 302(a)(1) authorizes the assertion of long-arm jurisdiction over a non-domiciliary who “transacts any business within the state or contracts anywhere to supply goods or services in the state.” CPLR 302(a)(1) is a “single act statute”; accordingly, physical presence is not required and one New York transaction is sufficient for personal jurisdiction. The statute applies where the defendant's New York activities were purposeful and substantially related to the claim … . ” Purposeful'” activities are defined as ” those with which a defendant, through volitional acts, avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws'” … .

We recognize that courts of this state have generally held telephone communications to be insufficient for finding purposeful activity conferring personal jurisdiction … . However, there are exceptions to this general rule, and in some cases, telephone communications will, in fact, be sufficient to confer jurisdiction … . C Mahendra NY LLC v National Gold & Diamond Ctr Inc, 2015 NY Slip Op 01157, 1st Dept 2-10-15

 

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