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Pace essay submission

The adoption of the 1980 Convention on the
International Sale of Goods by the United Kingdom

Ahmad Azzouni [*]
27 May 2002

Introduction

     - Development and objectives
     - Structure of the Convention
Part I - Sphere of Application and Interpretation
A. Sphere of Application
     - Other bases of application
     - Excluded matters
B. Interpretation and good faith
Part II - Formation of the Contract
A. Form
B. Offer
C. Revocation of the offer
D. Acceptance
E. Battle of forms
Part III - Sale of Goods
A. Obligations of the seller
B. Conformity of the goods
C. Fundamental breach
D. Remedies of the buyer
     1) Primary remedy: specific performance
     2) Seller's right to cure
     3) Nachfrist
     4) Reduction of price
     5) Avoidance
Conclusion
References

INTRODUCTION

It is undeniable that one of the obstacles that frustrate the development of international trade is the divergence of rules among legal systems. This gives rise to litigation and increases transaction costs for all parties. However, the tendency to unify the rules through international conventions is seen by some intellectuals and economists as a solution to eliminate this barrier while others find it harmful to domestic laws and does not achieve its whole objectives. The United Nations Convention on Contracts for the International Sale of Goods (CISG)[1] is an example of this method of unification.

Although the CISG has been accepted by such a large number of countries, representing about two thirds of the total amount of international trade,[2] the UK has chosen to take a different approach. The United Kingdom Department of Trade and Industry has issued two consultation papers (in 1989 and 1997) on the subject of the UK entering into the Convention,[3] no further formal steps have been taken to adopt the CISG in the UK. Based on the responses it received, the Department of Trade and Industry issued a position paper in February 1999 stating that the Convention should be brought into national law when there is time available in the legislative programme.[4] To date, no further steps have been taken to bring the CISG into English law.[5] Therefore, there has been lately much debate of whether the United Kingdom Government should ratify the United Nations Convention.

The purpose of this article is to examine some of the most remarkable features of the Convention that differ from English law and those, which are most likely to cause difficulties and uncertainty in the case that the Convention is ratified by the UK. In order to do so and to reach to the conclusion whether the UK should adopt the Convention, this article will briefly highlight the history of the Convention and its main objectives. Then, it will examine the difficulties under the provisions of the sphere of application and the formation of the contract and finally, it will focus on the provisions concerning breach of the contact and the remedies available to the buyer and the main diversities from the English law.

The development and objectives of the Convention

The United Nations Convention on Contracts for the International Sale of Goods "CISG" is a treaty intended to establish uniform rules governing certain aspects of the making and performance of everyday commercial contracts for the sale of goods.[6] The objective of the Convention was "to adopt legal rules, which would contribute to the removal of legal barriers in international trade and promote international trade"[7] and to establish a uniform law of international sales to complete work started by the Hague Convention in 1964,[8] which resulted in the finalization of substantive uniform rules[9] that had failed to gain widespread acceptance.[10]

However, despite this failure, the United Kingdom ratified this Convention. But this ratification was more a form of gesture than a real commitment to the aims of the conventions, because the UK accepted the reservation that the conventions would only apply in instances where the parties made express declarations to this effect, thereby rendering the application of the conventions in these jurisdictions was very limited".[11] Yet, The UN Convention on Contracts for the International Sale of Goods can be said to be a radically revised version of The Hague Uniform Laws.[12] The UN Convention, which has produced a document unanimously approved by delegations representing sixty-two national legal systems at a diplomatic conference convened by the United Nations General Assembly in Vienna in 1980,[13] came into force in 1988 after ten nations, including the untied States, had agreed to make it part of their law.[14]

- The structure of the Convention

The Convention is divided into four main parts; Part I. defines the Convention's sphere of application and contains provisions as to interpretations. usages and requirement of contractual form;[15] Part II deals with the formation of the contract;[16] Part III contains the main body of rules on sale of goods;[17] finally, Part IV provides the public international framework.[18]

As was mentioned, this paper will discuss the main difficulties under the provisions of each of these parts and how they differ from English law.

PART I -- SPHERE OF APPLICATION AND INTERPRETATION

A. Sphere of application

The scope of the CISC is defined in Article 1, which provides that:

"This Convention applies to contracts of sale of goods between parties whose places of business are in different States, (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State".

It can be seen from this article that the parties of the contract shall have their places of business in different Contracting States. Therefore, neither the nationality of the parties or their civil or commercial character[19] nor the location or intended place of delivery of goods[20] is relevant in determining the application of the CISG.[21] The concept of "place of business" itself is uncertain. It does not describe a juridical status, as citizenship or place of incorporation,[22] so that would raise some difficulties in determining the application of the Convention.[23] Furthermore, other difficulties may arise as a result of the absence of a definition for "contracts of sale" in Article 1(1).[24]

Article 1(1)(b) as was seen extends the application of the CISG further to contracts involving parties from non-Contracting States when the rules of private international law lead to the application of the law of a Contracting State. This can lead to the application of the Convention even when one of the parties is unaware of that.[25] Consequently, In order to avoid this difficulty, parties most probably would exclude the Convention.[26] Additionally, Article 95 permits a State to ratify the CISG on the grounds that it will not be bound by Article 1(1)(b). The US has made such a declaration on the grounds that the application of Article 1(1)(b) would lead to their own law being displaced more often than that of the non-Contracting State.

- Other bases of application

However, there are some other ways in which courts and arbitral tribunals have succeeded in holding the Convention rules applicable despite the absence of the necessary link with a Contracting State.[27] One of these ways[28] is when the parties incorporate the Convention provisions by reference in their contact. In the UK, such incorporation means that the Convention rules are applied if they had been set out as terms of the contract.[29] Accordingly, despite the fact that the UK has not ratified the Convention, a party from the UK who would like to apply the Convention can do so in the mentioned way.

- Excluded matters under the CISG

Article 2 contains some exceptions such as consumer sales or sales by auction or under execution.[30] The Convention does not also apply to the liability of the seller for death or personal injury caused by the goods to any person.[31] Moreover, the parties may even exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions.[32]

Subject to article (4), the Convention governs only the formation of the contract and the rights and obligations of the seller arising from it. Furthermore, except as otherwise expressly provided in this Convention, questions of contact validity and transfer of title are not regulated by the Convention[33] because of the wide differences between national systems. Therefore, matters concerning illegality, capacity, misrepresentation, and fraud are regulated by domestic laws.[34] Consequently, the scope of the Convention containing these gaps will be limited.

B. Interpretation of the Convention and good faith

Article 7(1) of the CISG provides that "in the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade". The question that may arise here is to what extent are the national courts willing to have regard to the background of the Convention.[35] Besides, the article's requirement to treat the CISG as an international text will require in practice deference to judicial opinions from other countries.[36] However, critics have complained that the CISG is not well formulated and many norms remain ambiguous[37] and this will not produce uniformity because it will be subject of different national interpretations.[38] In this respect, scholarly writing would play an important role in encouraging the cross-citation of case law from one jurisdiction to another.[39]

The principle of good faith according to the text is limited to use as a guide to interpretation of the norms of the CISG and does not seem to extend to the performance of the contract. A number of cases have, however, gone on to apply this principle to the performance of the contract.[40] Therefore, the application of this provision is something of mystery, because some courts will interpret this provision more broadly than others.[41] This article is of some significance because although the doctrine of good faith has been gradually absorbed by a number of common law jurisdictions, English law takes a different approach in which "good faith" is not considered as a general requirement[42] as regards the exercise of legal rights and remedies.[43]

Article 7(2) of the Convention allows that in the absence of such general principles to guide interpretation, questions are to be determined in conformity with the law applicable by virtue of the rules of private international law. Therefore, the English courts will be required, in some cases, not only to determine the spirit of the CISG by studying its provisions, but also to refer to other evidence of general principles of international trade, such as the UNIDROIT Principles, the European Principles of Contract Law and the decisions of the courts in other jurisdictions.[44] This will lead to a further erosion of the UK municipal law.

PART II- THE FORMATION OF THE CONTRACT

A. Form

The rules governing the formation of international contracts are included in Part II of the Convention. Article 11 provides that "a contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses". Though, Article 96 of the Convention gives the right to any Contracting State to make declaration excluding Article 11 where its law requires contracts of sale to be proved by writing. A difficulty that may arise when making such a declaration is where the law of the forum State would under its rules of international private law apply the law of the declaring State to issues arising under the contract. Article 96 also does not provide that the contract is to be subject to the writing rules[45] contained in the law of the declaring State.[46]

B. Offer

Article 14(1) of the Convention defines an offer as a proposal for concluding the contract, addressed to one or more specific persons, which is sufficiently definite and which indicates the intention of the offeror to be bound in case of acceptance.[47]

It should be pointed out that Article 14(1) indicates that an implied indication of price is an essential element of all contracts.[48] However, this article should be read subject to Article 55, which allows that "where a contract is validly formulated, but does not expressly or implicitly fix a price, the parties can be bound by implied term to incorporate the price generally charged at the conclusion of the contract for goods sold under comparable circumstances in the particular trade."[49] The effect of Article 55 on the requirement for the statement of definite price in the offer is the subject of some debate. Some argue that when Articles 14(1) and 55 are read together, there can be an enforceable contract without stating the price while others believe that since article 55 begins with the phrase "where a contract has been validly concluded," the provision does not apply in the case where an offer does not refer to the price of the goods[50].

C. Revocation of the offer

According to Article (16)[51] there is no need for an explicit promise to keep open an offer and the offer may not be revoked where the offeree reasonably relied upon the offer being irrevocable. While this provision seems to have aspects of an estoppel approach under the common law, it really goes somewhat farther. The comments to this section state that the provision would be applicable in the circumstance where an offeree merely needs time to investigate whether the offer should or should not be accepted.[52] Under the common law, an offer would not be irrevocable merely because the offeree needs time to investigate the feasibility of acceptance.[53] The Convention does not seem to deal with other possibilities such as the offerer dying or losing legal capacity prior to acceptance.[54]

D. Acceptance

Article 18(1) defines acceptance by providing that "A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance". This article accords with the English law but the CISG departs from English law in treating all forms of acceptance alike when requiring acceptance to reach the offeror.[55] There is no exception made for a postal rule of acceptance. Thus, the usual common law "postal rule", which states that acceptance becomes effective on dispatch, is rejected because acceptance will not be effective until it reaches the offeror.[56]

E. Battle of forms

It can be seen that the Convention rules on offer and acceptance are quite stringent, and that would lead to fewer agreements.[57] Article 19 of the CISG provides that the terms of an acceptance must conform to those of the offer. For instance, Article 19(2) provides that a reply to an acceptance is not an acceptance if it contains additions, limitations or other modifications of the offer, in which case it is a counter offer.[58] Therefore any battle of forms will probably not lead to an enforceable contract because matters concerning price, quantity, payment and settlement of disputes are considered to alter the terms of the offer materially.[59]

PART III - SALE OF GOODS

A. Obligations of the seller

The Convention contains in Articles 31-34 detailed provisions concerning the delivery of the goods and the handing over of any documents relating to them, but these do not seem likely to depart from the English law.[60] Some difficulties may arise in matters concerning the conformity of the goods in article 35, which is considered as one of the most important articles in Part III of the Convention.[61]

B. Conformity of the goods

Paragraph (1) of Article 35 states the seller's express obligation with respect to the quantity, quality, and description and packing of the goods. Paragraph (2) addresses itself to the seller's implied obligations with respect to the general and particular fitness of the goods, their packing, and their required qualities where there is a sale by sample or model. These obligations are only presumptive and are displaced to the extent that the parties "have agreed otherwise". One important example of such displacement is given in paragraph (3), where at the time of the conclusion of the contract the buyer knew or could not have been unaware of such non-conformity.

One of the problems in relation to these warranties is the extent to which they can be excluded by disclaimer provisions in the sales contract. Since the Convention is silent on this point, it may be a question of what the national law may permit or restrict in relation to such disclaimers.[62] Another problem can be found in paragraph (1) by giving a broad reading to description because there is no reference to an implied standard that is equivalent to satisfactory quality in section 14(2) of the Sale of Goods Act, which takes account of description and all relevant consideration.[63] A further contrast with the English law is that Article 35 of the convention contains no exception based upon the buyer's examination of the goods, in the way that section 14(2)[64] of the Sale of Goods Act[65] does. Paragraph (3) however states that the buyer may not complain of a lack of conformity pursuant to article 35(2) where there is actual or imputed notice of the lack of conformity. Unlike the English law, this would more advantageous to the buyer who carelessly examines the goods.[66]

C. Fundamental breach

According to Article 25, "a breach will be fundamental if it result in such a detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result". Generally speaking, if the breach is fundamental the aggrieved party is entitled to avoid the contract; if it is not, he is remitted to a claim in damages although in appropriate circumstances he may also be entitled to seek an order for specific performance.[67]

English law differs from the CISG in not requiring that the party in breach foresee substantial deprivation.[68] Generally, the provision causes some difficulties because the definition of a fundamental breach is not final. The parties themselves may in part of their contract derogate from the requirements of Article 25 in line with Article 6,[69] and thereby set their own standards as to what will be regarded as a fundamental breach under the contract.[70]

The test of a fundamental breach is also too severe and will make it very difficult in practice for a seller or buyer (but particularly a buyer) to cancel a contract because of defective performance by the other.[71] Finally, It can be said that Article 25 is a key article because the remedies of the buyer and seller under CISG turn on the character of the breach involved.

D. Remedies of the buyer

1) Primary remedy: specific performance

According to Article 46(1), "the buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy, which is inconsistent with this requirement." This article is subject to article 28, which states "a court is not bound to enter such a judgement for specific performance unless the court would offer such a remedy under its own law."[72] The traditional common law rule is to refuse the remedy except where damages fail to provide adequate recompense.[73] As a result, under English law, granting specific performance of the terms of a contract is an extraordinary remedy, granted in very limited circumstance involving limited types of goods[74] as stated in section 52(1) of the Sale of Goods Act.[75]

2) Seller's right to cure

Where a breach has occurred, the CISG encourages the seller to keep his contractual promises by offering him the express right to cure his own mistakes. The seller has the right to cure " any failure to perform his obligation" including a failure to deliver conforming goods.[76] Unlike the English law where the seller can exercise this right before the time fixed for performance,[77] this right may even be exercised after the time for performance has expired, as long as this would not cause the buyer unreasonable inconvenience or uncertainty of reimbursement by the seller of expenses advanced by the buyer.

Nevertheless, the exercise of this right to cure is subject to the buyer's right to avoid the contract for fundamental breach. The existence of these two rights can cause friction. On the one hand, the buyer should not lose his right to avoid the contract if a fundamental breach has occurred and this remedy will always take priority over the seller's right to cure. In some cases, however, the fundamental nature of the breach may depend on whether the seller could cure the breach or not, without causing the buyer unreasonable inconvenience.[78]

3) Nachfrist

Article 47(1) provides that the buyer when he is not sure whether a breach committed by the seller is to be classified as 'fundamental", has an option to put the seller on notice that he should fulfill his obligations within an additional reasonable period of time. However, the buyer may not, during that period, resort to any remedy for breach of contract unless the buyer has received notice from the seller that he will not perform within the period to fixed.[79] This remedy is based on German law and usually referred to as the Nachfrist notice.[80] If the failure remains unremedied on the expiry of the Nachfrist the other party is entitled to avoid the contract regardless of whether the breach is fundamental or not."[81]

Although English law has no direct counterpart to a Nachfrist notice,[82] the doctrines of waiver and estoppel in English law can be said to be very similar. The fact that the buyer may not resort to any other remedy during the period of the Nachfrist is equivalent to the buyer being estoppel from relying on his strict contractual rights as the result of a representation made to the seller. Under the rule in Coombe v. Coombe[83] promissory estoppel may be "a part of a cause of an action, but not a cause of action in itself." Therefore, estoppel can only be relied upon defensively "as a shield and not as a sword". In contrast, in the case of non-delivery on the expiration of the Nachfrist, if the seller has still failed to perform, the right of the buyer to avoid the contract will arise whether the breach is fundamental or not.[84]

4) Reduction of Price

A remedy allowing the buyer to pay a reduced price for defective goods delivered by the seller has been recognized since Roman times, under the Roman law remedy of actio quanti minoris.[85] Article 50 entitles the buyer in case of non-conformity of the goods, to reduce the price "in the same proportion as the value that the goods actually delivered had at the time of delivery bears to the value that conforming goods would have had at that time."[86]

It should be mentioned that the reduction of the price is a civil law remedy; therefore it is unlikely to be applicable under the English law.[87] Nevertheless, English law still has some parallels to existing remedies. For instance, a general remedy of price reduction can be implied from Section 30 and 53 of the SGA. While section 30 refers only to delivery of the wrong quantity, it follows the same general principle.[88] Moreover, section 53 of the Sale of Goods Act contemplates a similar concept to article 50, but it applies only to breaches of warranty and is phrased in terms of setting off the breach against the price due.[89]

E. Avoidance

A party may declare the contract avoided a) if a failure by the other party to perform any of his obligations amounts to a fundamental breach[90] or b) if the seller fails to deliver or the buyer to pay the price or take delivery of the goods within a Nachfrist fixed by the other party.[91]

The main issue concerning avoidance and the English law is that while the rule in the CISG for the seriousness of breach needed to justify avoidance is whether the breach is a fundamental one, in the English law the test is whether the term breached is a condition of the contract,[92] express or implied.[93]

CONCLUSION

As was seen, the UK bases its refusal to adopt the CISG on a number of beliefs. The most significant is the fact that since the parties are almost free to vary or exclude its provisions, parties who favours English law can chose to apply it by excluding the whole or some provisions of the Convention[94]. The application of this convention may also result in a diminished role for English law within the international trade arena. Furthermore, the CISG was designed through compromises that included both common law and civil law systems. Hence, several issues became debatable and led to different approaches in interpretation.

Therefore, despite the several advantages to the unification of rules, this large number of difficulties and divergences from English law would make it more unfavorable for traders who will face unpredictable results and for lawyers who are still unaware of the ambiguous provisions of the Convention. As a result, it can be said that the time is still not suitable for the ratification of the convention. But what is necessary now is to pay more attention to the scholarly writings and assessment to make the people more aware of the strengths and weaknesses of the Convention because the growing number of countries adopting it, will not allow the UK to stay in isolation for so long.


REFERENCES

1) Adams J, Brownsword R, Keys issues in contract, Butterworths, (1995).

2) Anette Grtner, Britain and the CISG: The case for Ratification - A Comparative Analysis with Special Reference to German law, Review of the Convention on Contracts for the International of Goods (CISG) 2001, Kluwer Law International, available at <http://www.cisg.law.pace.edu/cisg/biblio/gartner.html>

3) Arthur Rossett, Critical Reflections on the United Nations Convention on the International Sale of Goods, (1984) Ohio State Law Journal, 255-305. Available at <http://www.cisg.law.pace.edu/cisg/biblio/rossett.html>

4) Bergsten E & Miller A.G, "The Remedy of Reduction of Price" (1999) 27 American Journal of Comparative law. 255-277. Available at <http://www.cisg.law.pace.edu/cisg/biblio/bergsten.html>

5) Bridge, The International Sale of Goods, Oxford University Press (1999).

6) D'arcy L, Murray C & Cleave B, Schmitthoff's Export Trade: The Law and Practice of International Trade, Sweet & Maxwell, (2000).

7) DiPalma M, Nachfrist under National Law, the CISG, and the UNIDROIT and European Principles: A Comparison, International Contract Adviser (Kluwer), Vol. 5 No. 1 (Winter 1999) 28-38, available at <http://www.cisg.law.pace.edu/cisg/biblio/DiPalma.html>

8) Goode R, Commercial Law, second edition, Penguin Books, 1995.

9) Hartnell H, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, (1993) 18 Yale Journal of International Law, 1-93, available at <http://www.cisg.law.pace.edu/cisg/biblio/hartnell.html>.

10) Harry M. Flechtner, The Several Texts of the CIGS in Decentralized System: Observations on Translations, Reservations and other Challenges to the Uniformity Principle in Article 7(1), (1998) 17 Journal of Law and Commerce 187-217 Available at < http://www.cisg.law.pace.edu/cisg/biblio/flecht1.html>.

11) Honnold J, The Sales Convention; Background, Statutes, Application, (1988) 8 Journal of Law and Commerce 1-10, How the 1980 Sales Convention was made, available at <http://www.cisg.law.pace.edu/cisg/biblio/honnond-background.html>

12) Joachim M Bonell and Liguori F, The UN Convention on the International Sale of Goods: A Critical Analysis of Current International Case Law, (1997) Part 1, [1997] 2 Uniform Law Review 385, available at <http://www.cisg.law.pace.edu/cisg/biblio/libo1.html>

13) Jacob S. Ziegel, Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sales of Goods, University of Toronto, July 1981. Available at <http://www.cisg.law.pace.edu/cisg/text/ziegel35.html>

14) Koch R, The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sale of Goods (CISG), 1998 Kluwer Law International (1999) 177-354. Available at <http://www.cisg.law.pace.edu/cisg/biblio/koch.html>

15) Louis F. Del Duca & Patrick Del Duca, Practice Under the Convention on International Sales of Goods (CISG): A Primer for Attorneys and International Traders, (1995) 27 Uniform Commercial 331-370 Part I and (1996) 29 Uniform Commercial Code Law Journal 99-167 (Part II). Available at <http://www.cisg.law.pace.edu/cisg/biblio/delduca.html>

16) Leete, Burt A., Contract Formation under the United Nations Convention for the International Sale of Goods and the Uniform Commercial Code: Pitfalls for the Unwary, (1992) 6 Temple International and Comparative Law Journal, 193-215. Available at <http://www.cisg.law.pace.edu/cisg/biblio/leete2.html>.

17) McMahon J.P, When the UN Convention on Sales Applies and Why It Matters to You and Your Clients, International Sale CLE, May 23, 1996. Available at <http://www.cisg.law.pace.edu/cisg/biblio/mcmah.html>

18) Nayiri Boghossian, A Comparative Study of a Specific Performance Provisions in the UN Convention on the International Sale of Goods. Pace Review of the Convention on Contracts for the Goods, History of Negotiation, Kluwer (1999-2000) 3-78. Available at <http://www.cisg.law.pace.edu/cisg/biblio/boghossian.html>

19) Nicholas B, The Vienna Convention On International Sales Law, (1989) The Law Quarterly Review, Volt 105, 201-243, at 203.

20) Nicholas B, The United Kingdom and the Vienna Sales Convention: Another Case Splendid Isolation ? , Saggi, Conferenze Seminara, available at <http://www.cnr.it/CRDCS/nicholas.html>

21) Powers P.J, Defining the Undefinable: Good Faith and the United Nations Convention on Contracts for the International Sale of Goods. CISG concept of good faith, (1999) 18 Journal of Law and commerce 333-353. Available at <http://www.cisg.law.pace.edu/cisg/biblio/powers.html>

22) Peter A. Piliounis, The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law?, Pace International Law Review (Spring 2000) 1-46 <http://www.cisg.law.pace.edu/cisg/biblio/piliounis.html>

23) Robert G.Lee, The UN Convention on Contracts for the International Sale of Goods: OK for the UK? (1993) Journal of Business Law, 131-148.

24) Sieg Eislen, Adoption of the UN Convention on International Sale of Goods in South Africa (1999) 116 South African Law Journal, Part II, 323-370. Available at <http://www.cisg.law.pace.edu/cisg/biblio/eiselen.html>

25) Williams Alison, Forecasting the Potential Impact of the Vienna Convention on International Sales Law in the United Kingdom, Review of the Convention on Contract for the International Sale of Goods (CISG) 2001, Kluwer Law International. Available at <http://www.cisg.law.pace.edu/cisg/biblio/williams.html>.


FOOTNOTES

* Legal Consultant, Independent Enterprises and Companies Representation Co. LLC., Abu Dhabi, UAE. LL.M. Commercial Law, University of the West of England, Bristol, UK (2002).

1. United Nations Convention on Contracts for the International Sale of Goods. Apr. 11, 1980, U.N. Doc A/CONF. 97/18, Annex I, reprinted in 19 I.L.M. 671 (1980). The full Text of the Convention is available at <http://www.cisg.law.pace.edu/cisg/text/cisg-toc.html>.

2. Siege Eislen, Adoption of the UN Convention of International Sale of goods in South Africa (1999) 116 South African Law Journal, Part II, 323-370. Available at <http://www.cisg.law.pace.edu/cisg/biblio/eiselen.html>.

3. Department of Trade and Industry (UK), United Nations Convention of International Sale of Goods: a consultative document (London: Department of Trade and Industry, 1989) and Department of Trade and Industry (UK), United Nations Convention on Contracts for the International Sale of Goods (Vienna Sales Convention): a consultation document (London: Department of Trade and Industry, 1997).

4. Department of Trade and Industry (UK), United Nations Convention on Contracts for the International Sale of Goods (Vienna Sales Convention), position paper (London: Department of Trade and Industry, February 1999).

5. Peter A. Piliounis, The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law? 12 Pace International Law Review (Spring 2000) 1-46, available at <http://www.cisg.law.pace.edu/cisg/biblio/piliounis.html>.

6. McMahon J.P, When the UN Convention on Sales Applies and Why It Matters to You and Your Clients, International Sale CLE, May 23, 1996. Available at <http://www.cisg.law.pace.edu/cisg/biblio/mcmah.html>.

7. Cited from The Preamble of the United Nation Convention on International Sale of goods, available at <http://www.cisg.law.pace.edu/cisg/text/preamble.html>.

8. Robert G. Lee, The UN Convention on Contracts for the International Sale of Goods: OK for the UK? (1993) Journal of Business Law, 131-148, at 131.

9. These rules were agreed in the shape of Uniform law on the international Sales of Goods (ULIS) with a separate Uniform law on the formation of the contract (ULIFS). See Nayiri Boghossian, A Comparative Study of a Specific Performance Provisions in the UN Convention of the International Sale of Goods. Pace Review of the Convention on Contracts for the Goods, History of Negotiation, Kluwer (1999-2000) 3-78. Available at <http://www.cisg.law.pace.edu/cisg/biblio/boghossian.html>.

10. Goode R, Commercial Law, Chapter 33, The Vienna Convention on the International Sales of Goods, p 962, second Edition, Penguin Books, 1995.

11. D'arcy L, Murray C & Cleave B, Schmitthoff's Export trade: The Law and Practice of International Trade, Chapter 32, Standardization of Terms and Unification of International Sales Law, p687 (32-027), Sweet & Maxwell, (2000).

12. Nicholas B, The Vienna Convention On International Sales Law, (1989) The Law Quarterly Review, Volt 105, 201-243, at 203.

13. Arthur Rossett, Critical Reflections on the United Nationbs convention of the International Sale of Goods, (1984) Ohio State Law Journal, 255-305. Available at <http://www.cisg.law.pace.edu/cisg/biblio/rossett.html>.

14. Honnold J, The Sales Convention; Background, Statutes, Application, (1988) 8 Journal of Law and Commerce 1-10, How the 1980 Sales Convention was made, available at <http://www.cisg.law.pace.edu/cisg/biblio/honnond-background.html>

15. Articles 1-13.

16. Articles 14-24.

17. Articles 25-88.

18. Articles 89-101.

19. Article (1) 3 of the CISG 1980.

20. Goode R, Commercial Law, Chapter 33, The Vienna Convention on International Sales, p 928, Second Edition, Penguin Books, 1995.

21. If one of the parties has a place of business both abroad and in the same country as the other party. The place of business for the purpose of the contract in this case is that with the closest relation to the contract and its performance. But Article 1(2) restricts the application of the rule when their places of business do not appear either from the contract or from the dealings of the contract.

22. Rossett Arthur, Critical Reflections on the United Nations Convention on Contract for International Sale of Goods, (1984) 45 Ohio State Law Journal, 265-305, What is a place of business, available at <http://www.cisg.law.pace.edu/cisg/biblio/rossett.html>.

23. Article 10 however specifies which place of business applies where a party has more than one, and also that if he does not have a place of business reference is to be made to his "habitual residence".

24. Louis F. Del Duca & Patrick Del Duca, Practice Under the Convention on International Sales of Goods (CISG): A Primer for Attorneys and International Traders, (1995) 27 Uniform Commercial 331-370 Part I and (1996) 29 Uniform Commercial Code Law Journal 99-167 (Part II). Available at <http://www.cisg.law.pace.edu/cisg/biblio/delduca.html>

25. For example, if a party from England contracts with a party from Greece, and allows that the contract shall be governed by the domestic law of Greece, then according to article 1(1)(b) the Convention could be applied. See Robert G. Lee, The UN Convention on Contracts for the International Sale of Goods: Ok for the UK? (1993) Journal of Business Law, 131-148, at 131.

26. Article 6 states that:" The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions".

27. Goode R, Commercial law, Chapter 33, the Vienna Convention on the International sales of Goods, p 929, Second Edition 1995.

28. The Convention may be applicable by Article 13(5) of the International Chamber of Commerce rules which held that there was no better source for determining trade usages than the Vienna Sales Convention, even though neither the country of the seller nor that of the buyer was a contracting state, furthermore, it may be applicable by the lex mercatoria, which is a body of opinion that subsists independently of any national legal system.

29. Goode R, Commercial Law, Chapter 33, The Vienna Convention on the International sales of Goods, p 929, Second Edition, 1995.

30. It does not also apply to sales of securities, negotiable instruments or money, ships, vessels, aircraft or electricity (Article 2).

31. Article 5 of the CISG.

32. Article 6 of the CISG.

33. See Article 4 of the Convention.

34. For full treatment of this topic, see Hartnell H, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, (1993) 18 Yale Journal of International Law, 1-93, available at <http://www.cisg.law.pace.edu/cisg/biblio/hartnell.html>.

35. Harry M. Flechtner, The Several Texts of the CIGS in Decentralized System: Observations on Translations, Reservations and other Challenges to the Uniformity Principle in Article 7(1), (1998) 17 Journal of Law and Commerce 187-217 Available at <http://www.cisg.law.pace.edu/cisg/biblio/flecht1.html>.

36. Bridge, The International Sale of Goods, chapter 2, p59, Oxford University Press (1999).

37. William Alison, Forecasting the Potential Impact of the Vienna Convention on International Sales Law in the United Kingdom, Review of the Convention on Contracts for the International Sale of Goods (CISG) 2001, Kluwer Law International. Available at <http://www.cisg.law.pace.edu/cisg/biblio/williams.html>.

38. Robert G. Lee, The UN Convention on Contracts for the International Sale of Goods: OK for the UK? (1993) Journal of Business Law, 131-148, at 132.

39. Michael Joachim Bonell and Liguori F, The UN Convention on the International Sale of Goods: A Critical Analysis of Current International Case Law, (1997) Part 1, [1997] 2 Uniform Law Review 385, available at <http://www.cisg.law.pace.edu/cisg/biblio/libo1.html>.

40. See Powers P.J, Defining the Undefinable: Good Faith and the United Nations Convention on Contracts for the International Sale of Goods. CISG concept of good faith, (1999) 18 Journal of Law and Commerce 333-353. Available at <http://www.cisg.law.pace.edu/cisg/biblio/powers.html>.

41. Bridge, The International Sale of Goods, Chapter 2, The CISG: General issues, p 60, Oxford University Press (1999).

42. Adams J, Brownsword R, Keys issues in contract, chapter 7, p (198), Butterworths, (1995).

43. Goode R, Commercial law, Chapter 33, the Vienna Convention on the International Sale of Goods, p931, Second Edition, 1995.

44. William Alison, Forecasting the Potential Impact of the Vienna Convention on International Sales Law in the United Kingdom, (CISG) 2001, Kluwer Law International. Available at <http://www.cisg.law.pace.edu/cisg/biblio/williams.html>

45. Article 96 is also not completely expressed because not all-writing rules are the same, some laws may require the signature of a witness while other systems may require a full writing requirement without the need of a signature.

46. See Bridge, The International Sale of Goods, Chapter 2, The CISG: General issues, p 60, Oxford University Press, (1999).

47. Article 14(2) states that "a proposal other than addressed to one or more specific person is to be considered merely as an invitation to treat unless the contrary is clearly indicated…."

48. Robert G. Lee, The UN Convention on Contracts for the International Sale of Goods: OK for the UK? (1993) Journal of Business Law, 131-148, at 136.

49. Article (55) of the CISG.

50. Leete, Burt A., Contract Formation under the United Nations Convention for the International Sale of Goods and the Uniform Commercial Code: Pitfalls for the Unwary, (1992) 6 Temple International and Comparative Law Journal, 193-215. Available at <http://www.cisg.law.pace.edu/cisg/biblio/leete2.html>.

51. Article 16 states that (1) until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.(2) However, an offer cannot be revoked: (a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or (b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

52. CISG Draft, supra note 50, art 14, cmt. 8. Comment 8to Article 14 of the CISG draft (adopted as CISG Article 16(2)(b).

53. Leete, Burt A., Contract Formation under the United Nations Convention for the International Sale of Goods and the Uniform Commercial Code: Pitfalls for the Unwary, (1992) 6 Temple International and Comparative Law Journal, 193-215. Available at <http://www.cisg.law.pace.edu/cisg/biblio/leete2.html>.

54. Bridge, The International Sale of Goods, Chapter 2, the CISG: General issues, p 60, Oxford University Press, (1999).

55. See Article 24 of the CISG.

56. Williams Alison, Forecasting the Potential Impact of the Vienna Convention on International Sales Law in the United Kingdom, Review of the Convention on contracts for the International Sale of goods (CISG) 2001, Kluwer Law International. Available at <http://www.cisg.law.pace.edu/cisg/biblio/williams.html>.

57. The battle of forms is the situation where the purported "acceptance" by the offered contains new or different terms than were in the offer.

58. Nevertheless this can be considered as an acceptance if the offer or does not object without undue delay, whether orally or by means of notice. Art 19(2).

59. Article 19(3) of the CISG.

60. Nicholas B, The Vienna Convention on International Sales Law, (1989) The Law Quarterly Review, Vol. 105, 201-243,at 220.

61. Professor Jacob S. Ziegel, Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sales of Goods, University of Toronto, July 1981. Available at <http://www.cisg.law.pace.edu/cisg/text/ziegel35.html>.

62. Robert G. Lee, The UN Convention on Contracts for the International Sale of Goods: OK for the UK? (1993) Journal of Business Law, 131-148, at 138.

63. Bridge, The International Sale of Goods, Chapter 2, CISG: General issues, p81, Oxford university Press, (1999).

64. Article 14(2) states that where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality, except that there is no such condition-:a) as regards defects specifically drawn to the buyer's attention before the contract is made-or b) if the buyer examines the goods before the contract is made, as regards defects which that examination ought to reveal.

65. The full text of the act is available at <http://www.jus.uio.no/1m/england.sale.of.goods.act.1979/doc.html>.

66. Other problems are discussed in Rossett Arthur, Critical Reflections on the United Nations Convention on Contracts for International Sales of Goods, (1984) 45 Ohio State Law Journal, 265-305, What is a place of business, available at <http://www.cisg.law.pace.edu/cisg/biblio/rossett.html>.

67. Professor Jacob S. Ziegel, Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sales of Goods, University of Toronto, July 1981. Available at <http://www.cisg.law.pace.edu/cisg/text/ziegel25.html>.

68. Bridge, The International Sale of Goods, Chapter 2, The CISG: General issues, p 86, 1999.

69. Relevant factors to determine fundamental breach, which were stated by a number of scholars, such as the nature of the contractual obligations, can be found in Koch R, The Concept of Fundamental Breach of Contract under the United Nations Convention on Contracts for the International Sales of Goods (CISG), 1998, Kluwer Law International (1999) 177-354. Available at <http://www.cisg.law.pace.edu/cisg/biblio/koch.html>.

70. In this respect, the parties can still define certain terms of the contract as 'conditions' if they so require, by clearly classifying what will be regarded as a fundamental.

71. Professor Jacob S. Ziegel, Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sales of Goods, University of Toronto, July 1981. Available at <http://www.cisg.law.pace.edu/cisg/text/ziegel25.html>.

72. The wording in Article 28 is slightly ambiguous. It appears to limit its application to courts. This could have the effect that Article 28 is not applicable to international arbitral tribunals.

73. Harnett. V. Yeilding (1805) 2 sch, & Lef. 549.

74. Peter A. Piliounis, The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law? 12 Pace International Law Review (Spring 2000) 1-46, available at <http://www.cisg.law.pace.edu/cisg/biblio/piliounis.html>.

75. "In any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit, on the plaintiff's application, by its judgment or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages".

76. Article (37) of the CISG

77. Anette Gartner, Britain and the CISG: The case for Ratification-A Comparative Analysis with Special Reference to German law, Review of the Convention on Contracts for the International of Goods (CISG) 2001, Kluwer Law International, available at <http://www.cisg.law.pace.edu/cisg/biblio/gartner.html>.

78. Bridge, The International Sale of Goods, Chapter 2, The CISG: General issues, p86, 1999.

79. Article 47(2).

80. This concept is commonly known as a Nachfrist because of its similarity to the German remedy of the same name.

81. DiPalma M, Nachfrist under National Law, the CISG, and the UNIDROIT and European Principles: A Comparison, Adaption reproduced with permission on International Contract Adviser (Kluwer), Vol. 5 No. 1(Winter 1999) 28-38, available at <http://www.cisg.law.pace.edu/cisg/biblio/DiPalma.html>.

82. Piliounis P, The Remedies of Specific Performance, Price Reduction and Additional Time (Nachfrist) under the CISG: Are these worthwhile changes or additions to English Sales Law? Spring (2000) 12 Pace International Law Review, 1-46. Available at <http://www.cisg.law.pace.edu/cisg/biblio/piliounis.html>.

83. 2K.B. 215, 219-20 (C.A. 1951).

84. Williams, Alison, Forecasting the Potential Impact of the Vienna Convention on International Sales Law in the United Kingdom, Review of the Convention on contracts for the International Sale of Goods (CISG) 2001, Kluwer Law International. Available at <http://www.cisg.law.pace.edu/cisg/biblio/williams.html>.

85. Bergesten E& Miller A.G, "The Remedy of Reduction of Price" (1999) 27 American Journal of Comparative law. 255-277. Available at <http://www.cisg.law.pace.edu/cisg/biblio/bergsten.html>.

86. There is some uncertainty arising from the working of Article 50, as it is unclear whether it also covers other situations, such as defects in title to the goods. This ambiguity in scope of Article 50 highlights the limited application of the price reduction remedy under the CISG.

87. See Nicholas B, The United Kingdom and the Vienna Sales Convention: Another Case Splendid Isolation?, Saggi, Conferenze Seminara, available at <http://www.cnr.it/CRDCS/nicholas.htm>.

88. E. Bergsten & A.J. Miller, The Remedy of Reduction of Price, (1979) 27 American Journal of Comparative law. 255-277. Available at <http://www.cisg.law.pace.edu/cisg/biblio/bergsten.html>.

89. Ibid..

90. Article 64.

91. See Robert G.Lee, The UN Convention on Contracts for the International Sale of Goods: OK for the UK?, (1993) Journal of Business Law, 131-148, at 140.

92. Bridge, The International Sale of Goods, Chapter 2, The CISG: General issues, p 84, Oxford University Press, (1999).

93. Implied conditions are recognized as such in English law when the parties have not attempted to exclude them in the contract, by for example inserting inconsistent express clauses in the contract.

94. Goode R, Commercial Law, Chapter 33, The Vienna Convention on the International Sales of Goods, p 962, second edition, Penguin Books, 1995.


Pace Law School Institute of International Commercial Law - Last updated June 20, 2003
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