The opinion of the court was delivered by: Rakoff, District Judge.
This case — involving claims of breach of contract, copyright
infringement, and quantum meruit — is again before the Court, on
remand from the Second Circuit. On March 17, 1997, in a brief,
unreported decision from the bench, the Court granted defendants'
motion to dismiss the Complaint on the ground that the parties
had agreed that any disputes be litigated in the Netherlands.
Through no fault of the parties' able counsel, the District
Court's rather terse discussion left the Court of Appeals
"unsure, given the brevity and ambiguity of the district court's
opinion, whether the district court made a finding that a
contract existed as against merely determining that there was
an agreement as to a forum-selection clause." Evolution Online
Systems, Inc. v. Koninklijke PTT Nederland N.V., 145 F.3d 505,
509 (2d Cir. 1998). Accordingly, the Court of Appeals remanded
the case so that this Court could determine (1) whether the
parties (a) entered into a contract (b) containing a
forum-selection clause that (c) should be
enforced in favor of a Netherlands forum, and (2) whether, if the
answer to the first question was in any part negative, the case
should nonetheless be dismissed on grounds of forum non
conveniens. Id. at 511.
As to the first question, the Court concludes that the parties
entered into a binding contract containing a mandatory
forum-selection clause that should be enforced in favor of a
Netherlands forum. Although this conclusion removes the necessity
of reaching the second question, nonetheless, the Court, for the
benefit of such further appellate review as may follow,
separately determines that even if the parties' contractual
agreement did not already mandate referral to a Netherlands
forum, the Court would dismiss the case on the grounds of forum
The pertinent facts, summarized in the Court of Appeals'
opinion, Evolution Online, 145 F.3d at 507-8, are as follows. In
the summer of 1994, the defendants (collectively referred to as
"Koninklijke") began negotiating an agreement by which plaintiff
Evolution Online Systems, Inc. ("Evolution") would provide
Koninklijke with software and computer expertise for a planned
computer network in the Netherlands. Following an exchange of
letters, Koninklijke, on October 12, 1994, sent Evolution $90,000
to fund initial efforts.
The parties then began to exchange draft written contracts.
Between October 1994 and April 1995, the parties exchanged four
or more such drafts, each of which included an explicit clause
requiring that any disputes between them be litigated in the
Netherlands and be governed by Dutch law. While Evolution offered
comments about other provisions of these drafts, it never raised
any question about the choice-of-law or forum-selection
provisions. More generally, the parties' comments on the drafts
were largely limited to non-essential matters such as whether
termination of the aspect of the agreement pertaining to software
maintenance would require 90-days or one-month's notice. See
Declaration of Pieter Van Hoogstraten, dated January 31, 1996,
During the same period, Evolution worked extensively on the
project embodied in the draft contracts, renting office space,
hiring programmers, sending technical workers to the Netherlands,
and eventually producing special software programs that were
delivered to Koninklijke. In return, Koninklijke paid Evolution
more than $400,000.
On June 25, 1995, however, Koninklijke terminated its
arrangement with Evolution, asserting that Evolution had
repeatedly missed deadlines. Evolution responded by commencing
this action, contending that Koninklijke had breached its
contract with Evolution, that in any event Koninklijke still owed
Evolution substantial sums for value received, and that
Koninklijke's continued use of Evolution's computer programs
infringed Evolution's copyright.
Turning to the first question presented on remand, the Court
concludes that referral to the Netherlands forum is required as
an appropriate enforcement of a mandatory forum-selection clause
in a valid and binding contract. While none of the written drafts
exchanged between the parties was signed, an analysis of the
relevant factors leads to the conclusion that the parties had
reached agreement on the essential terms of their arrangement,
including forum selection, and intended to be bound thereby. See
Winston v. Mediafare Entertainment Corporation, 777 F.2d 78, 80
(2d Cir. 1985) (applying New York law); see also Teachers Ins.
and Annuity v. Tribune Company, 670 F. Supp. 491, 498 (S.D.N Y
1987) (applying New York law).*fn1
Winston sets forth four non-exclusive factors a court should
consider to determine whether a contract has been reached in such
a case, including (1) whether there has been an express
reservation of the right not to be bound in the absence of a
writing, (2) whether there has been partial performance of the
contract, (3) whether all of the terms of the alleged contract
have been agreed upon, and (4) whether the agreement at issue is
the type of contract that is usually committed to writing. Id. at
80. Applying these factors to the instant case, it is apparent
from the drafts the parties exchanged and from the limited nature
of the comments thereon that, even though certain minor disputes
resulted in the parties' never signing any of the drafts, the
parties had nonetheless reached agreement as to the essential
terms embodied in these drafts. Moreover, any doubt on this issue
is removed by the parties' extensive performance in accordance
with the basic terms of the draft contracts. Over the course of
one-and-a-half years, Evolution rented offices and hired
employees specifically for the project, sent workers to the
Netherlands, and eventually produced and delivered the
contracted-for product. In response, Koninklijke paid Evolution
over $400,000, spread over the same period. This extensive,
lengthy, and bilateral performance strongly signals the parties'
understanding that a binding contract was in force. See Weinreich
v. Sandhaus, 850 F. Supp. 1169, 1177 (S.D.N.Y. 1994); see also
Viacom International Inc. v. Tandem Productions, Inc., 368 F. Supp. 1264,
1270 (S.D.N.Y. 1974).
The other Winston factors must be interpreted in the context
of this extensive contractual performance. No party expressly
reserved the right not to be bound until final execution of the
contract. While the use of the word "draft" has in some cases
been deemed such a reservation, see e.g., Apple Corps Ltd. v.
Sony Music Entertainment, Inc., 1993 WL 267362 (S.D.N.Y.), this
is not such a case, given the extensive contractual performance.
Although disputes existed as to some details, agreement was
reached on a sufficient number of essential terms for the parties
to consider themselves committed. Further, the collapse of the
deal was not evidence that important terms remained open. Rather,
the transaction soured because of Koninklijke's dissatisfaction
with Evolution's delays in performance, delays that Koninklijke
asserted were breaches of the parties' agreement, rather than
failure to reach agreement.
Although couching its pleadings in the alternative, Evolution
does not seriously dispute that some kind of contractual
agreement existed between the parties — indeed, its first claim
is for breach of contract — but it argues that if there was a
contract, it was formed by the initial exchange of letters
between the parties, which did not include the forum selection
clause set out in the formal draft contracts later exchanged.
However, there is little to suggest that these cursory, tentative
letters themselves constituted a contract, let alone a
free-standing one severable from the later drafts. On their
faces, the letters — some of which appear illegible — suggest
only that they are invitations to reach a more formal and
detailed arrangement. By contrast, the contract drafts, taken
together with the parties' limited comments thereon, evidence a
substantial meeting of the minds, including as to
choice-of-forum. Furthermore, the extensive contractual
performance occurred almost entirely after the drafts began to be
exchanged, suggesting that the parties intended to be bound to
the agreed upon provisions in the drafts and not by the earlier
As noted, the Court, even if it had not reached this
conclusion, would have dismissed this suit in favor of a Dutch
forum under the doctrine of forum non conveniens. Under that
doctrine, the Court must initially determine whether there exists
an adequate alternative forum. See Evolution Online, 145 F.3d at
510; see also PT United Can Co. v. Crown Cork & Seal Co.,
138 F.3d 65, 73 (2d Cir. 1998). "Ordinarily, this requirement will be
satisfied when the defendant is `amenable to process' in the
other jurisdiction," Piper Aircraft v. Reyno, 454 U.S. 235, 254
n. 22, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981); see also Blanco v.
Banco Industrial de Venezuela, 997 F.2d 974, 981 (2d Cir. 1993).
Here it is undisputed that all defendants are amenable to process
and subject to personal jurisdiction in the Netherlands.
Plaintiff contends, however, that Dutch law may not recognize its
claims in quantum meruit and copyright, nor provide all the
contract remedies available under New York law. This contention
is unconvincing for several reasons.
To begin with, a forum is not inadequate merely because of the
nonexistence of an identical cause of action or legal theory in
the alternative forum, PT United Can, 138 F.3d at 74, but only
"if the remedy provided by the alternative forum is so clearly
inadequate or unsatisfactory that it is no remedy at all." Piper
Aircraft, 454 U.S. at 254, 102 S.Ct. 252 (1981). Evolution has
not remotely made such a showing. On the contrary, while
defendants have provided an affidavit from a Dutch lawyer
attesting that all of plaintiff's causes of action are recognized
by Dutch law, plaintiff, without supplying any evidence in
opposition, merely argues that defendants' affidavit does not
specifically state that Dutch law recognizes "quantum meruit."
But the affidavit does state that Dutch law recognizes a claim
for "unjust enrichment," and these two causes of action, while
not identical, are highly similar. ...