Mrs. Clark’s Foods was an Iowa company engaged in the business of distributing juice beverages. International Suntrade and Miller & Smith Foods were Canadian companies that acted as brokers distributing juice concentrates manufactured by third parties. Miller & Smith purchased Suntrade prior to the transaction in question in this case.
In April 2011, Mrs. Clark’s purchased apple juice concentrate (AJC) from Miller & Smith manufactured by the Lingbao Xinyuan Fruit Industry Company. Mrs. Clark’s had not purchased AJC produced by Lingbao nor had Suntrade brokered an AJC purchase with Mrs. Clark’s prior to this transaction. The final invoice from Suntrade described the product as “Chinese Apple Juice Concentrate” and contained language stating that “[a]ll claims must be made upon receipt of goods.” Mrs. Clark’s paid for the AJC on May 19, 2011. Neither Suntrade nor Miller & Smith inspected the AJC or tested it for authenticity before distributing it to Mrs. Clark’s.
In November 2011, after receiving test results from a different Chinese company on AJC that were determined to be non-authentic, Mrs.
Clark’s had an outside company test the AJC obtained from Suntrade. The test results determined that Suntrade’s AJC contained isomaltose, which meant it was adulterated under rules issued by the US Food and Drug Administration. Mrs. Clark’s had incorporated some of Suntrade’s AJC in juice products that it had produced and distributed and was required to recall those products.
Mrs. Clark’s filed a lawsuit against Miller & Smith and Suntrade to recover the costs and damages associated with the purchase and recall.
1. What law will the court apply to this transaction?
2. Could the parties have selected the law for the court to apply before the occurrence of their dispute?