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Reproduced with permission of 10 Vindobona Journal of International Commercial Law & Arbitration (1/2006) 15-26

Harmonisation of Sales Law: An International and Regional Perspective

Juana Coetzee [a1] & Mustaqeem de Gama [aa1]

  1. Introduction
  2. Regional Harmonisation of Sales Law: An African Example
    2.1     Substantive basis for the regional harmonization of sales law in Africa
    2.2     Regional harmonization of sales law within OHADA
  3. Can Regional Sales Law Co-Exist with Universal Sales Law?
    3.1     The UNCITRAL mission
    3.2     Sphere and scope of application of the CISG
    3.3     Scope for co-existence within the CISG
    3.4     The conflict between Book Five of the OHADA Uniform
               Act on General Commercial Law and the CISG
  4. Conclusion

1. INTRODUCTION

International trade increased rapidly after the Second World War, particularly from the 1970s onwards. This increase was to a large extent facilitated by the improvement of international transport and communication networks.[1] Economic integration of countries into regional economic unions and organisations has also contributed to the growth in international commercial exchange. The law, being a vehicle for economic co-operation and development, is required to facilitate such growth and with the increase in international trade there has been a corresponding increase in the demand for legal co-ordination and harmonisation.[2] [page 15]

Although the increase in trade is not the sole reason why it is desirable for sales laws to be harmonised, it does however provide the background for, and context within which, the harmonisation of sales laws should be approached.

Where multiple legal systems are potentially applicable to a contract, problems can emerge in various ways. In the absence of a choice-of-law clause,[3] the rules of private international law govern the contract. These rules are, in most instances, complex and difficult to apply. Consequently, the governing law applicable to an international contract for the sale of goods can often be uncertain and unpredictable. Furthermore, once the governing law has been established, the parties are still left to apply a domestic legal system which, in many instances, is not geared for the needs of international trade.[4] These problems are exacerbated by the possibility of forum shopping.[5] Matters may be further complicated by the lack of enforcement mechanisms in certain jurisdictions.

It is clear that international sales are in need of a legal system that can transcend national boundaries and that can function without the need to resort to rules of private international law. Harmonisation [6] of the substantive law is a possible answer to this problem. A number of organisations have been created with the goal of harmonising private international law and substantive sales law. The Hague Conference on Private International Law and the International Institute for the Unification of Private Law (UNIDROIT) are examples of such organisations. However, even though the conventions created by these organisations were aimed at world wide harmonisation, they remained to a large degree purely a European effort.[7] This is apparent if one looks at the ratifications and accessions to some of the early substantive law [page 16] Conventions.[8]

The situation changed after the Second World War as the United Nations began to play a more important role in international trade. Apart from the creation of a number of other international organisations under the United Nations umbrella,[9] the introduction of the United Nations Commission on International Trade Law (UNCITRAL) was a significant development. The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) was the first successful effort to harmonise international sales law on a world wide scale.[10]

At the same time a number of regional organisations were forming, such as the European Union (EU), Common Market of the Southern Cone (MERCOSUR), North American Free Trade Agreement (NAFTA), Common Market of Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC). Although the aim of these organisations is to promote economic integration, many of them have also concerned themselves with legal development and therefore play a definite role in the harmonisation of the law. For example, in the African context the Organisation for the Harmonisation of Business Law in Africa (OHADA), introduced a Council of Ministers which is empowered to adopt uniform law instruments which take effect in all Member States, without the need to be ratified at the national level.

Universal unification efforts are generally slow and have to cope with divergent interests.[11] Harmonisation at the regional level can serve as 'fast track instruments'.[12] This article aims to illustrate that the goal of international harmonisation of sales laws takes place on two levels, namely on the universal and on the regional level. It is, therefore, possible that a particular contract may be regulated by both sets of rules.

This article will endeavour to analyse the question whether harmonisation efforts can co-exist on both levels, or whether they are mutually exclusive. To illustrate this issue practically the article will make use of the CISG as an instrument of universal harmonisation and the OHADA Uniform Act on General Commercial [page 17] Law (OHADA Act) as a regional form of sales law harmonisation.[13]

2. REGIONAL HARMONISATION OF SALES LAW: AN AFRICAN EXAMPLE

2.1 Substantive basis for the regional harmonization of sales law in Africa

The history of North West African commercial law emphasises the need for harmonisation, not only in this region but in post-colonial Africa as a whole. The OHADA Act [14] (including commercial sales) replaced individual state laws in 1998. Notwithstanding this, it is helpful to discuss the development of commercial law in post-colonial Africa before harmonisation.

Prior to harmonisation, legislation applicable to general commercial law and other aspects of business law was the product of two successive legislative periods. The first period covered legislation in force at the time of independence of each of the African states, which was essentially the foundation of the French Commercial Code. These laws did not take account of the legal and administrative requirements of the overseas territories and were largely a product of colonialism. As a result, most of these laws became obsolete. The second phase occurred after independence of many of these countries, when a review was undertaken of the French based laws, either on a piece meal basis or through codification.[15] The end result was that the original French Commercial Code, together with post-independence legislative interventions, led to plethora of legislation based on extremely divergent legal principles.

One of the main problems experienced with retaining original French-based law was that it is generally inappropriate for a developing economy. The French Napoleonic Code's breathtaking detail was designed to remove all discretion from a judiciary [16] and to empower the executive over the judiciary. Shortcomings in the protection of property rights, the lack of enforcement of creditors' rights against debtors and shareholders' rights resulted in the state dominating the economy and inhibiting free market principles.[17] Clearly such a legal system was not designed to cope with the requirements of a free market economy. [page 18]

Another problem resulting from the existence of different laws based on different legal principles is divergence in commercial laws, which is a severe drawback in cross-border trade. As was indicated in the introduction of this article, there is a definite need not only for economic integration between regions, but also for legal integration insofar as sales laws are concerned. Harmonisation creates certainty and predictability which is essential for successful international trade. At the time of the formation of OHADA, none of the OHADA states was signatory to the Vienna Sales Convention. They could therefore not benefit from the move towards legal harmonisation on an international level. Furthermore, there was no codification relating to commercial sales in the internal laws of the African states. The only reference to sales law was references to the provisions of the French Civil Code or specific texts that regulated exclusive sale or purchase contracts.[18] The need to introduce harmonised law in the region was clear.

2.2 Regional harmonization of sales law within OHADA

The OHADA Treaty was signed in 1993 and entered into force in 1995. OHADA now has seventeen members namely: Benin, Burkina Faso, Cameroon, Central African Republic, Comoros, Congo, Democratic Republic of Congo, Ivory Coast, Gabon, Guinea, Guinea Bissau, Equatorial Guinea, Mali, Niger, Senegal, Chad and Togo. The rationale behind the OHADA Treaty was the harmonisation of business laws with a view to long-term economic development. This objective has been further strengthened by the adoption of parallel treaties such as the UEMOA, the Union Economique et Monetaire Quest Africaine (West African Economic and Monetary Union).

It is the objective of the OHADA Treaty to harmonise business law within the member States, by the elaboration and adoption of common, simple and modern rules, which are adapted to the economic situation.[19] The OHADA laws were adapted to the needs of developing economies and aimed to modernise the outdated French system previously applicable in the OHADA states.[20] Even though the OHADA Uniforms Acts retain distinctive French flavours,[21] the adaptations introduced through the various uniform acts help prepare the region to deal with the demands of a regional free market economy and the requirements of globalisation.

The OHADA Treaty facilitates the adoption of a series of laws, known as the Uniform Acts. The Uniform Acts cover principal areas of commercial laws, namely corporate law, commercial law and legal status of traders, debt recovery and enforcement law, securities, bankruptcy law, arbitration law, accounting principles and any other issues [page 19] decided by member states.[22] They are more than just a collection of uniform laws as they establish legislative and judicial structures,[23] a permanent Secretariat [24] and a regional professional school.[25] However, the adoption of common legal texts by parties to the OHADA Treaty does not guarantee effective harmonisation of business law. It is important that the uniform texts are consistently applied and interpreted. This alludes to the need for a coherent body of jurisprudence that should serve as reference throughout the OHADA region.

The OHADA Treaty allocates the interpretive function to the Common Court of Justice and Arbitration (CCJA).[26] This court is a complete judicial system and operates on a supranational level in parallel with national systems. The CCJA has two principal functions in relation to the OHADA business laws: it offers a forum for international arbitrage and it serves as a court of last resort for judgments issued and arbitrations commenced in member states.[27] A regional school (ERSUMA) furthermore educates legal professionals in the OHADA territory and encourages the dissemination of knowledge and an understanding of the key texts, while the publication of cases and legal texts enhance transparency and predictability. Together these institutions facilitate the uniform interpretation of the OHADA Uniform Acts.

3. CAN REGIONAL SALES LAW CO-EXIST WITH UNIVERSAL SALES LAW?

Is it possible for regional and universal instruments of harmonisation to co-exist and supplement each other, or are they in conflict to the degree that they are mutually [page 20] exclusive? This article uses the CISG as an example of an instrument of legal harmonisation at the universal level. Firstly, the aims and goals of the United Nations Commission on International Trade Law (UNCITRAL) as an international organisation will be examined; secondly, the scope and application of the CISG will be addressed; and finally, certain provisions of the CISG will be considered which might facilitate the co-existence between the CISG and a regional sales law instruments. The discussion will then proceed to address the potential conflict on a more practical level by comparing the operation of the CISG and the OHADA Uniform Act on General Commercial Law.

3.1 The UNCITRAL mission

The CISG is a convention created through the efforts of UNCITRAL. As an organisation, UNCITRAL endeavours to facilitate the harmonisation of trade law and, therefore, encourages both regional and international unification and harmonisation efforts.[28] UNCITRAL'S philosophy of promoting the balanced development of international trade on the basis of equality, mutual benefit and co-operation is echoed in the Preamble of the CISG.

3.2 Sphere and scope of application of the CISG

Insofar as scope and application are concerned, the CISG leaves room for regional harmonisation efforts. The CISG does not constitute a universal or global law to apply in every State of the world.[29] Article 1(1)(a) provides that the CISG will apply to contracts between parties who have their places of business in Contracting States.[30] It is also possible for the CISG to apply by virtue of the rules of private international law by means of Art. 1(1)(b).

Certain exemptions, however, exist in respect of countries which have made a so-called Art. 95 declaration.[31] It is, therefore, clear that non-contracting States are free to unify sales law on any level they wish and that in instances where Art. 95 CISG applies, regional sales law can govern the contract. [page 21]

Even within contracting States there is room for regional unification, because of the CISG's limited sphere of application.[32] By virtue of Art. 2, the CISG only applies to certain types of commercial sales contracts.[33] Furthermore, the CISG only applies to the sale of moveable tangible goods. There is, therefore, ample room for regional unification in relation to those transactions that are excluded by the CISG, without any danger of conflict between the two instruments.

Inasmuch that the CISG is not considered an exhaustive body of law but an instrument with limited scope of application, it does not cover aspects such as contract validity and passing of ownership.[34] As regards the issues that are not covered by the CISG, Contracting States to the CISG can create regional unified laws.

3.3 Scope for co-existence within the CISG

There are specific provisions of the CISG that facilitate its co-existence with regional uniform sales laws.[35]

Article 6 of the CISG provides for the possibility to exclude any provision of the CISG, or the CISG as a whole, from contracts to which the CSG would otherwise apply.[36] If the CISG is excluded from a given contract, regional sales law can apply.

Article 90 of the CISG acknowledges the superiority of any other international agreement concerning the matters governed by the CISG, which has already been or may be entered into. The CISG is therefore displaced by regional conventions or any other international agreements that may apply to particular countries.[37]

Article 92 of the CISG provides for a declaration made by Contracting States by virtue of which they would not be bound to either Part II (formation) or Part III (rights and obligations).[38] Implicitly, this Article allows Contracting States to provide that [page 22] regional unification is to prevail over global unification. Notwithstanding this, there will, however, be instances that the CISG will still prevail. Although Art. 92 excludes the application of the CISG via Art. 1(1)(a) it is still possible that the CISG can apply by virtue of Art. 1(1)(b). If the forum's rules of private international law lead to the law of a Contracting State that did not make such a declaration, the CISG will still be the governing law.

Article 94 CISG is probably the most important provision when it comes to determining whether universal and regional sales can co-exist. Under this provision, Contracting States that have largely uniform sales laws may declare that the CISG will not apply to contracts between parties that have their places of business in such countries.[39] Article 94 does not require that regional unification efforts should be in the form of an international agreement as required by Art. 90. Furthermore, Art. 94 allows Contracting States to make a declaration aimed at favouring regional unification at any time, whereas a declaration according to Art. 92 must be made 'at the time of signature, ratification, acceptance approval or accession.'

It is also possible that regional and universal unification efforts can co-exist by virtue of Art. 9(2) of the CISG. Pursuant to Art. 9(2), international usages which are widely known and regularly observed are implied into a contract of sale. Where a binding usage exists in a specific region this regional usage will prevail over the CISG provided the requirements of Art. 9(2) are met. If the parties agreed on a regional usage that usage will naturally prevail in terms of Art. 9(1).

It is, therefore, possible that as far as the CISG is concerned, regional and universal harmonisation can co-exist and to some extent that they can even 'build on and supplement each other'.[40]

3.4 The conflict between Book Five of the OHADA Uniform Act on General Commercial Law and the CISG

The OHADA Uniform Act on General Commercial Law (Uniform Act) came into force on 1 January 1998 in the sixteen countries mentioned in paragraph 2.2 above. The Uniform Acts have direct application in all OHADA member states and override any conflicting domestic law.[41] Only one of the OHADA contracting states is also a Contracting State to the CISG, namely Guinea. The following discussion investigates whether there are any conflicts between the CISG and Book Five (Book of Sales) of the Uniform Act. [page 23]

Articles 202 to 205 of Book Five (Book of Sales) of the Uniform Act deal with subject matter that is largely identical to the CISG. The geographic scope of application of the Uniform Act is conditional upon whether a merchant is established in the territory of a state which is a member of OHADA.[42]

The Uniform Act differs in some respects from the corresponding provision of the CISG. Under Art. 50 of the CISG, the buyer of defective goods is entitled to reduce the price while under Art. 249 of the Uniform Act this right is not recognised. Furthermore, Art. 254 of the Uniform Act states that avoidance of a contract may only be filed in court. This clearly differs from the private declaration under Art. 49 of the CISG. Since the Uniform Act replaces national sales law of the OHADA member states, the parties cannot exclude its application by means of contractual exclusions, while Art. 6 CISG explicitly allows for that possibility.

Should the merchant be situated in one of the OHADA countries, for arguments sake the Republic of Guinea, which is also a contracting state of the CISG, the potential exists for both conventions to apply to the transaction if the other party to the transaction is a merchant from another OHADA country.[43] However, this situation may be resolved by simply invoking Art. 90 CISG. Article 90 can defuse such a conflict in favour of the Uniform Act that can be viewed as an 'agreement' for the purposes of that provision.

Problems of co-ordination between the CISG and a particular regional agreement are addressed by Art. 90 in cases where the parties to a sales contract have their places of business in States that have adopted that regional agreement. If a party has its place of business in a State that has not adopted the regional agreement, conflicts are left to that agreement or to general rules applicable to conflicts of laws.

What would that mean for a country that is not party to CISG and the Uniform Acts? To date only Guinea is party to both the CISG and a member of OHADA. What would therefore be the governing law in a situation where the seller is situated in Guinea and the buyer is established outside the OHADA region? Accordingly to Basedow,[44] both instruments might be applicable, however under Art. 10 of the basic OHADA Treaty, the Uniform Act overrides previous or subsequent enactments of internal law. Art. 10 of the OHADA Treaty explicitly states that a uniform law adopted pursuant to the OHADA Treaty is directly and mandatorily applicable in the member states.

The adoption of a uniform law is a relinquishment of sovereignty by the member states contemplated by the OHADA Treaty. But it is not clear whether this provision also purports to deal with conflicts between uniform acts and other international conventions or laws to which an OHADA contracting state is a subject. It is arguably [page 24] open to the OHADA Common Court of Justice and Arbitration to find that the Uniform Acts, under Art. 10 of the basic OHADA Treaty, take priority over other international conventions.

If the Uniform Acts do not take precedence over international conventions, the conflict would be resolved with reference to the traditional manner in which conflicts between conventions are resolved.

4. CONCLUSION

This article sought to demonstrate that the co-existence between worldwide and regional harmonisation neither has to create tension, nor does it suggest that the mere existence of a universal instrument of sales law harmonisation precludes regions from enacting their own harmonised sales laws. It arguable that regional harmonisation is more comprehensive and far-reaching than it is often given credit for. The OHADA system is indicative of this fact.[45]

It is also clear that the OHADA countries do not feel very comfortable with the CISG's attempt at universal unification and choose to adhere to their own regional effort to unify sales law. This is illustrated by the fact that only one state has chosen to adopt both instruments.

Notwithstanding that a codification of regional sales law, such as the OHADA law may, at times, clash with international instruments like the CISG, for the most part the two instruments can co-exist and even supplement each other in a meaningful way. Harmonisation of sales laws is imperative for the success of international trade. Regional harmonisation efforts are often faster and easier to achieve, but their application is limited to a specific region. Regions should not shy away from joining universal harmonisation efforts because of fears that there could be a conflict between the regional and universal harmonisation efforts.

Some international conventions have made provision for organisations concerned with regional economic integration and which are endowed with legislative competence to enact required legislation to fulfil those goals. These regional organisations have the power to ratify an international convention.[46] [page 25]

Regional organisations with powers to ratify and accede to international legislation with universal scope can be a very powerful tool for international harmonisation efforts. Regional organisations are also able to play an important role in the treaty-making stage and there is therefore a need to allow regional organisations membership to organisations that promote law harmonisation on a universal level. [page 26]


FOOTNOTES

a1. BA LLB LLM; Senior Lecturer, University of Stellenbosch, South Africa. The author wishes to acknowledge financial assistance in the form of grants from the NRF Thuthuka Fund and the Harry Crossley Fund which enabled part of this research to be undertaken at the UNCITRAL Library in Vienna, Austria. A word of thanks is also extended to the staff of the Library and the UNCITRAL Secretariat for their assistance and hospitality.

aa1. B.Proc LLB LLM; Senior Lecturer, University of Stellenbosch, South Africa. Both the authors wish to thank their colleagues at the Department of Mercantile Law for the opportunity to discuss a concept of this article with them during an informal colloquium.

1. Basedow, J., 'Worldwide Harmonisation of Private Law and Regional Integration - General Report' 2003 (1/2) Uniform Law Review 31, at p. 33.

2. Regional economic integration may add tension to and increase the complexity of private law harmonisation. This issue was addressed in a number of papers at UNIDROIT's 75th Anniversary Conference in September 2002 called Worldwide Harmonisation of Private Law and Regional Economic Integration. In the context of sales law harmonisation see Schlechtriem, P., 'The Sale of Goods: Do Regions Matter' 2003 (1/2) Uniform Law Review 173. Also see Vázquez, C.M., 'Regionalism versus Globalism: a View from the Americas' 2003 (1/2) Uniform Law Review 63, at pp. 66-7 who points out that regional harmonisation efforts are sometimes considered to be 'a waste of time, and at best a distraction from global solutions'. On the other hand, there are also those who believe that regional organisations can play an equally important role in the harmonisation of private law.

3. Where choice-of-law clauses do appear, they mostly represent the choice of the party with the biggest bargaining capacity. This is especially the case when a contract of sale is concluded between a party from a developed and industrialised country with somebody from a developing country.

4. Domestic sales law is created to address the needs of a specific country. They represent the ideological values, as well as the political and economic circumstances and strategies of a particular society.

5. Once again the party with the biggest bargaining power will have the upper hand in choosing a forum that will be the most advantageous in the given circumstances.

6. This article will refer to the term 'harmonisation' as a blanket term that includes different strategies of making laws more similar. It includes efforts to unify and standardise the law where the aim is to exclude all differences or at least reduce them to the minimum. But it also refers to situations where different legal systems only move closer together without their laws being unified by means of a uniform law.

7. The United States of America only acceded to the Hague Conference and UNIDROIT in 1964. South American countries joined even later, such as Argentina and Brazil in 1972.

8. Basedow, J. 'Worldwide Harmonisation of Private Law and Regional Integration - General Report" 2003 (1/2) Uniform Law Review 31 at p. 33.

9. Such as the International Maritime Organisation, the International Civil Aviation Organisation, and the United Nations Conference on Trade and Development.

10. As on 1 December 2005 sixty six states have ratified the convention to date, which represent two thirds of world trade. These countries represent the major players in international trade, such as the United States of America, Germany and the new upcoming economic power China.

11. The compromise character of the CISG is a major point of criticism against the success of this international convention.

12. Basedow, J., supra fn 1, at p. 36.

13. Adopted on 17 April 1997 and enforced by derogation on 1 January 1998. More specifically Book Five dealing with commercial sales.

14. This Uniform Act consists of several books including the Status of Traders (Book I); The Trade and Personal Property Credit Register (Book II); Commercial lease and business (Book III), Trade Middleman (Book IV) and Commercial Sale (Book V).

15. Burkina Faso regulated commercial activities through an ordinance of 26 August 1981; the Central African Republic regulated the carrying on of commercial activities and provision of services through the order of 3 October 1983. Many other countries did the same including Gabon, Guinea, Mali, Niger, Senegal and Togo.

16. Dickerson, C.M., 'Harmonizing Business Law in Africa: OHADA Calls the Tune', 2005 Express Preprint Series (Paper 618) 1, at p. 13.

17. Dickerson, C.M., ibid, at p. 15.

18. Par B(IV) of OHADA Secretariat Publication.

19. The Treaty on the Harmonisation of Business Law in Africa (OHADA), Art. 1.

20. Not all OHADA states have French law as their basis; Guinea Bissau was for a long time a Portuguese colony while Equatorial Guinea was a Spanish colony.

21. Dickerson, C.M., supra fn 16, at p. 2.

22. For an overview of some of the areas covered see, Owusa-Ansh, J.A., 'The OHADA Treaty in the Context of International Insolvency Law Developments', Paper presented within the LLM Finance course on International Insolvency Law at the Institute for Law and Finance, Johann Wolfgang Goethe University, Frankfurt, Germany, available at <www.iigglobal.org>, 1 at p. 9; Dickerson, C.M., supra fn 16, at p. 63; Dickerson, C.M., 'A Comparative Analysis on OHADA's Uniform Business Law in West Africa: A French Civilian Structure's Impact on Economic Development' Paper delivered at the Conference on Corporate Governance and Accountability in Sub-Saharan Africa hosted by the Institute for International Corporate Governance and Accountability, 29 October 2004, George Washington University Law School, available at <http://ssrn.com/abstract=630623>, 1 at p. 6.

23. Article 31 of the OHADA Treaty.

24. Article 40 of the OHADA Treaty.

25. Article 41 of the OHADA Treaty.

26. The Court has confirmed that uniforms laws adopted pursuant to the treaty are directly and mandatorily applicable in member states, and abrogates national laws in this regard. See Dickerson, C.M., supra fn 16, at p. 41.

27. Article 14 of the OHADA Treaty identifies three functions of the CCJA: (a) consultation regarding the drafting of uniform acts, consultation in matters of application or interpretation of uniform acts or implementation thereof, and consultation by national courts; (b) the court serves as a court of cassation in place of national courts of cassation in all matters relating to harmonized business law; (c) various parties may submit a contractual dispute to the CCJA under the arbitration procedures envisaged in the treaty.

28. Bazinas, S.V., 'Harmonisation of International and Regional Sales Law; the UNCITRAL Experience' 2003 (1/2) Uniform Law Review 53, at pp. 54 - 55, 62. It is UNCITRAL's mandate to 'further the progressive harmonisation and unification of the law governing international trade'. See also General Assembly Resolution 2205 (XXI) of 17 December 1966 UNICITRAL Yearbook Vol 1 1968-1970 at p. 65).

29. Ferrari, F., 'Universal and Regional Sales Law: Can They Coexist?' 2003 (1/2) Uniform Law Review 177, at p. 178.

30. Those are the countries that have ratified the Convention to date. However it is also possible for parties to incorporate the CISG by agreement. In those instances the CISG will not apply as Convention but as contract.

31. Art 1(1)(b) will not apply to contracts concluded with parties who have their places of business in one of these countries who made an Art. 95 declaration, namely the USA, China, Singapore, St Vincent & Grenadines and the Czechoslovak Socialist Republic.

32. Ferrari, F., supra fn 29, at pp. 179 - 80.

33. In terms of Art. 2(a) the Convention does not apply to goods that are bought for personal, family or household use, unless the seller did not know and was not required to have known that the goods were purchased for private use. The CISG does, for example, not apply to the sale of ships, vessels, aircraft or electricity either. Cf Arts. 2(b)-(f).

34. Article 4. Other matters that are excluded are issues of legal and contractual capacity, lawfulness, error and the existence of authority.

35. See Ferrari, F., supra fn 29, at pp. 180 - 186.

36. This provision entrenches the principle of party autonomy in the Convention. The Convention may be excluded expressly, but also tacitly.

37. This has given rise to disputes relating to the nature of the agreement (bilateral or multilateral) and the content of the agreement (substantive law or conflict of laws). However, nobody denies that regional agreements can have prevalence over the CISG as long as it deals with matters governed by the Convention. The EU Directives are not considered to be 'international agreements'. See Ferrari, F., supra fn 29, at pp. 179 - 180.

38. Scandinavia, Denmark, Sweden, Norway and Finland have all made an Art. 92 declaration in regard to Part II of the Convention. Because their domestic sales laws are all similar they elect to use their domestic law in transactions between these countries. However, this situation gives rise to uncertainty towards parties that do not belong to the Nordic region. The result was that these countries met during early 2005 to discuss whether they should not abolish the restrictions in regard to the application of Part II (which they have excluded by means of Art. 92) as it is creating uncertainty for traders who do business with Nordic countries.

39. Once again the Nordic countries made such a declaration. In other words as far as intra-Scandinavian import or export is concerned their domestic rules will prevail over the CISG rules.

40. Bazinas, S.V., supra fn 28, at p. 62.

41. Dickerson, C.M., supra fn 22, at p. 3.

42. Article 1 of the Uniform Act on General Commercial Law.

43. Article 1(1)(b) of the CISG and Article 1 of the OHADA Uniform Act on General Commercial Law.

44. Basedow, J., 'Worldwide Harmonisation of Private Law and Regional Integration - General Report' 2003 (1/2) Uniform Law Review 31, at p. 39.

45. The OHADA Uniform Act relating to General Commercial Law (Book V) deals with many issues that go beyond mere sales law by addressing the broader area of contract law.

46. Normally, United Nations Conventions are open for signature, ratification approval or accession by State members of the United Nations, specialised agencies or parties to the statute of the International Court of Justice This is known as the 'Vienna formula'. However, the latest trend in UNCITRAL Conventions is to refer to regional organisations, for example art 302 UN Convention of the Law of the Sea and art 17 UN Convention on the Use of Electronic Communications in International Contracts. See Bazinas, S.V., supra fn 28, at p. 61. For past conventions which do not refer to the possibility, Basedow, J., supra fn 44, at p. 45, suggests that contracting parties can tacitly approve a declaration of accession by a regional organisation. However, he points out that this could be 'a risky solution'.


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