Go to Database Directory || Go to Bibliography
Search the entire CISG Database (case data + other data)

Reproduced with permission of 11 Vindobona Journal of International Commercial Law & Arbitration (1/2007) 11-24

Securing the Future of Electronic Sales in the Context of International Sales

Juana Coetzee [a1]

  1. Introduction
  2. The CISG and Electronic Communications
    2.1     General
    2.2     Interpreting the notion of "writing" under the CISG
              2.2.1     "Reach" and "Dispatch"
              2.2.2     "Notice"
  3. The UN Convention on the Use of Electronic Communications in International Sales
    3.1     The scope of application
    3.2     Legal aspects of electronic communications in international commence
  4. Conclusion

1. INTRODUCTION

Notwithstanding the apparent benefits of electronic communications,[1] international surveys have indicated that parties to international commercial transactions are still reluctant to make use of electronic communications to conclude their contracts of sale. Their main fears are the uncertainty surrounding the validity and enforceability of electronic contracts, as well as the safety and authenticity of electronic messages. Many countries have regulated or endeavour to regulate electronic commerce by means of national legislation; however inconsistencies between the laws regulating electronic contracts are not assisting international commercial transactions.

In order for parties to feel confident to conclude an international sales contract, the law regulating the contract should provide clarity and certainty. The unification of international sales laws by means of the United Nations Convention on Contracts for the International Sale of Goods (CISG) removed uncertainties connected to the substantive sales law governing the contract. However, the question whether a valid contract can be concluded and performed by means of electronic communications has never been answered by the Convention. When the CISG was drafted in the 1970s, the issue of electronic communications was not considered beyond that of telegram and telex communications.[2] Nevertheless a CISG-Advisory Council Opinion [page 11] published in 2003,[3] concluded that a valid electronic contract may be formed under the CISG. The Opinion held terms used throughout the CISG, such as 'writing', 'notice', 'reach' and 'dispatch', can be interpreted to include electronic means of communication if certain prerequisites are met.

This controversial issue is not limited to the CISG. Other international conventions aimed at unifying certain aspects of international trade are in fact presenting an obstacle to conducting business electronically. Thus, there is a need for an international framework that can ensure the legal validity, safety and enforceability of electronically concluded contracts. One way of doing this would be to amend the individual conventions, bringing them in line with electronic commerce; or alternatively, to create uniform law that overcomes the obstacles against electronic transactions under existing international trade law instruments. A coherent legal and regulatory framework that operates on an international level seems to present the best solution as it obviates amending each individual convention. The UN Convention on the Use of Electronic Communications in International Contracts [4] was adopted in 2005, specifically with this purpose in mind.

The first part of this article focuses on electronic communications in the context of international sales, and more specifically contracts governed by the CISG. Provisions connected to the notion of writing will be interpreted in the context of electronic commerce. As part of the interpretation exercise, reference will be made to other international instruments aimed at unifying the law relating to commercial contracts, as well as the CISG-Advisory Council Opinion which reflects modern scholarly opinion on this matter. The second part of this article focuses on the UN Convention on the Use of Electronic Communications in International Contracts, which was drafted in an effort to provide legal certainty and predictability where electronic communications are used in relation to international contracts. This article proposes and encourages that Contracting States to the CISG accede to or ratify the UN Convention on the Use of Electronic Communications in International Contracts to ensure legal certainty for electronic sales contracts.

2. THE CISG AND ELECTRONIC COMMUNICAITONS

2.1 General

The CISG requires no formalities for the creation or modification of a contract.[5] However, according to Art. 6 the parties may derogate from any of its provisions. [page 12] It is therefore possible for parties to prescribe formalities, such as the written form, or even to agree on the use of a particular electronic method of communication. Articles 8 and 9 CISG assist in interpreting the intention of the parties in regard to formalities or the medium of communication.[6] Oral modification of a contract may also be prohibited by means of Art. 29(2) CISG.[7] Moreover, Art. 12 provides that Contracting States can make an Art. 96 declaration if their domestic legislation requires form requirements.[8] The effect of such a declaration would be that the law governing the conclusion of such contract or any modification of its content should be determined by means of the rules of private international law. In these cases, the question whether electronic communications will suffice will also be answered with reference to the governing law of the contract.[9]

Absent the parties' agreement, Art. 13 provides a default definition for 'writing' that includes telex and telegram.[10] 'Writing' is therefore one of the issues that are [page 13] 'governed but not settled' by the CISG.[11] According to the CISG, such 'gaps' are to be filled with reference to the general principles on which the CISG is based.[12] Because Art. 13 does not contain an exhaustive list of alternative forms of communication, by means of an analogical interpretation it is possible to extend the meaning even further from merely including telex and telegram, to include electronic messages as well.[13] Analogical interpretation is generally accepted as one of the tools of interpretation insofar as filling gaps in the Convention are concerned.[14] The issue of electronic communications in the context of the CISG is therefore one that has always been addressed through interpretation.

2.2 Interpreting the notion of "writing" under the CISG

It is generally accepted that an electronic message should fulfil the same functions as a paper document. This is the so-called 'functional equivalent approach'.[15] [page 14] Other international instruments of unification follow the same approach. The 2004 UNIDROIT Principles of International Commercial Contracts (UNIDROIT Principles) state that 'writing' means 'any mode of communication that preserves a record of the information contained therein and is capable of being reproduced in tangible form.'[16] The Principles of European Contract Law (PECL) [17] do not contain a general definition of 'writing', but similar to the UNIDROIT Principles, they state that 'written statements include communications made by telegram, telex, telefax and electronic mail and other means of communication which are capable of providing a readable record.'[18] It has been suggested that this definition should be used as an aid for interpreting Art. 13 CISG.[19]

The 1996 UNCITRAL Model Law on Electronic Commerce also supports the functional approach. It provides that the requirement of 'writing' is met 'by a data message if the information contained therein is accessible so as to be usable for subsequent reference.'[20] This approach is equally in line with recent scholarship on the CISG that endorses the use of electronic communications in this context.[21]

Article 13 is referred to very rarely in case law and arbitral decisions. One case merely recited the CISG definition.[22] For example, on two occasions the Austrian Supreme [page 15] Court had to deal with contracts that were not sales contracts, and was therefore not in a position to truly rule on Art. 13.[23] However, the Austrian Court indicated that in principle they would be in favour of extending the meaning of 'writing' to telefax if they had to rule on a case that involved a contract of sale. Similarly, a Russian tribunal also indicated its willingness to acknowledge electronic communications, such as telex and facsimile messages, for the conclusion or modification of a contract of sale.[24] A similar conclusion was reached by a Ukrainian arbitral tribunal [25] in the case of a contractual modification by telefax.[26]

A scholarly interpretative commentary by the CISG Advisory Council [27] also follows the functional approach and refers to these functions as 'the possibility to save (retrieve) the message and to understand (perceive) it.'[28] 'Writing' is therefore to include 'any electronic communication retrievable in perceivable form.'[29] The Advisory Council's commentary on Art. 13 consists of an opinion together with three comments. Comment 13.2 introduces a presumption that operates in the absence of party agreement to the contrary. Unless otherwise agreed, it is presumed that electronic communications are included in the term 'writing'. To make the presumption even more flexible, it could be strengthened or weakened depending on the parties' prior conduct or common usages as envisaged by Arts. 9(1) and (2) CISG.[30] Flexible default rules do not run the risk of becoming [page 16] obsolete when the circumstances of international trade change. A presumption has the added advantage that a court or tribunal is free to decide against the presumption; ensuring that efficiency is not gained at the expense of fairness.[31]

Apart from the reference to writing in Art. 13, Arts. 21(2) [32] and 29(2) CISG [33] are the only other articles that explicitly refer to the notion of writing. However, many other provisions of the CISG refer to concepts that are related to communication, such as 'reach' 'received', 'send', 'give', 'made' and 'dispatch'. Reference is also made to 'notices', as well as 'specifications and communications'.[34] In some instances a distinction is made between oral and non-oral communications. In discussing the conclusions of the CISG-Advisory Council Opinion, this article will restrict its focus to the terms 'reach', 'dispatch' and 'notice'. It is however important to realise that the same arguments apply to all related terms.

2.2.1 "Reach" and "dispatch"

Part II of the Convention specifically deals with the formation of the contract. Various articles refer to 'reach' in the context of offers and acceptances. The relevant articles concerning the concept of 'reach' are Arts. 15, 16(1), 17, 18(2), 20(1), 21(2) and 22 CISG. Article 24 provides guidance on the interpretation of 'reach' for purposes of Part II of the Convention and should therefore be read in conjunction with the aforementioned articles.

According to Art. 24 'an offer, declaration of acceptance or any other indication of intention will reach the addressee when it is being made orally to him or delivered to him by any other means personally, to his place of business or mailing address or, if he does not have a business or mailing address, to his habitual residence.' In the case of face-to-face or telephonic negotiations, the addressee must hear the message. In other cases where the communication is not oral, the message must be delivered to him in person or to a valid address where he would normally expect to receive such communications in the normal course of business. No particular method of communication is prescribed, except that it should be 'any other means' other than oral communication. [page 17]

Article 24, therefore, opens the door to electronic methods of communication. Insofar as oral communications are concerned, it is possible for sound and other electronic communications to be transmitted in real time and therefore to be equated to oral communication. For example, in the case of so-called 'chat rooms' parties are able to exchange offers and acceptances through electronic messages almost as if they are in face-to-face contact. Article 24, however, does not require that the addressee should be physically present at the place where the message arrives or that the message should be read but merely that the addressee should be able to access the message in an understandable form.[35] For it to be considered as 'received' an electronic message should therefore merely be placed at the disposal of the addressee at a place where he is capable of retrieving and understanding the message. Non-oral communication, such as e-mail or fax, would therefore also suffice.[36] The CISG-Advisory Council Opinion holds a similar view. 'Reach' corresponds to the point in time when an electronic communication has entered the addressee's server from where it is capable of being retrieved.[37] It should also be received in a perceivable form; meaning the addressee should be able to process and understand the electronic message.[38] It is not required that the addressee should first read the message before it will be considered as having 'reached' him. However, the Opinion emphasises that the addressee should have indicated his willingness to accept electronic communications in order for the message to have 'reached' the addressee.[39] The same argument applies to 'dispatch', which corresponds to the point in time when the acceptance leaves the offeree's server. [page 18] Once again the offeror should have consented to receiving electronic communications of that type, in that format and to that address.[40]

2.2.2 "Notice"

'Notice' is a concept that is used throughout the CISG.[41] The Advisory Opinion concludes that 'notice' includes electronic communications on condition that the addressee is in the position to have access to the message by having consented to its form and format and having indicated an address where the message will be received.[42] The important factor regarding electronic notices is that the information be conveyed to the addressee - not the form in which it was conveyed.

All references to 'notice' in the context of Part III of the Convention are subject to the provision of Art. 27 CISG.[43] Unless otherwise expressly provided in Part III of the Convention, any delay or error in the transmission of a notice given in connection with Arts. 25 to 63 of the Convention or its failure to arrive, will not deprive the party sending the notice of the right to rely on such communication if it was made by appropriate means. The Convention does not define the words 'means appropriate in the circumstances' and once again they should be interpreted depending on the method of communication that is used.[44] In the context of electronic communications it would mean that if the message was delayed or an error occurred in its transmission, such notice will still be regarded as properly dispatched if it was in the form and format that the addressee consented to and it was dispatched to the address indicated by the addressee. [page 19] Article 48(4),[45] however, falls outside the general ambit of Art 27. It requires that the buyer should receive the communication, which would mean that the notice should have entered the server of the buyer from where it can be retrieved and perceived.

3. THE UN CONVENTION ON THE USE OF ELECTRONIC COMMUNICATIONS IN INTERNATIONAL SALES

The UN Convention on the Use of Electronic Communications in International Contracts is aimed at providing legal certainty and predictability. By removing legal obstacles to the use of electronic communications, the Convention will be able to improve the legal framework for international commercial transactions, which in turn will promote international trade. In the context of international sales, the Convention can therefore supplement the CISG.

3.1 The scope of application

The Convention applies to electronic communications that are made in connection with the formation and performance of an international contract or agreement.[46] In the context of the Convention, an international contract is a contract concluded by parties who have their places of business in different States.[47] There is no need for both parties to have their places of business in Contracting States.[48] The Convention however requires that the law of a Contracting State should govern the contract.[49] The governing law is determined by reference to the rules of private international law of the forum State if the parties had not chosen the governing [pasge 20] law. If the governing law is that of a Contracting State, the Convention will then apply as the domestic governing law of the contract.

It is, however, also important to note that the broad scope of application of the Convention could be restricted by certain declarations. Article 19 provides two choices of declarations. The first is to make a declaration that the Convention will only apply if both parties to the contract have their places of business in Contracting States; the second is to declare that the Convention will apply if the parties to the contract have agreed on its application. The second possibility enables States that have difficulties with the general broad scope of the Convention, to allow their nationals to choose the Convention as applicable law.[50] In addition to that, the Convention provides a State with the opportunity to exclude from the scope of application of the Convention any matters it may specify by means of a declaration.[51]

The Convention specifically deals with electronic communications exchanged under other international conventions.[52] It addresses the obstacles for electronic commerce caused by existing conventions. Art 20(1) provides that the Convention on the Use of Electronic Communications in International Contracts will apply to electronic communications used in the formation or performance of a contract or agreement regulated by the international conventions listed therein and to which a Contracting State to this Convention is or may also become a Contracting State. The listed instruments are: the 1958 Convention on the Recognition and Enforcement of Arbitral Awards, the 1974 Convention on the Limitation Period in the International Sale of Goods, the 1980 United Nations Convention on Contracts for the International Sale of Goods, the 1991 United Nations Convention on the Liability of Operators of Transport Terminals in International Trade, the 1995 United Nations Convention on Independent Guarantees and Stand-by Letters of Credit, and the 2001 United Nations Convention on the Assignment of Receivables in International Trade.

It is also possible to declare that the Convention applies to electronic communications in connection with the formation or performance of a contract or agreement to which another international instrument -- not specifically referred to in Art 20(1) but to which a Contracting State is a Contracting State or will become a Contracting State -- applies.[53] A State may also declare the exclusion of this [page 21] Convention in cases where any international instrument applies.[54] The Convention will then only apply to electronic contracts which are not regulated by another international convention, treaty or agreement.

3.2 Legal aspects of electronic communications in international commerce

The Convention affords general validity and enforceability to electronic communications, and therefore to contracts concluded by electronic means.[55] Also, it recognises the validity of automated message systems for contract formation.[56]

Minimum standards for form requirements that may exist under the governing law [57] of the contract are also covered.[58] The Convention complements and builds upon earlier instruments prepared by UNCITRAL, such as the Model Law on Electronic Commerce and provides for a functional equivalent approach. Article 9(2) provides that an electronic communication will be able to fulfil the 'writing' requirement if the 'information contained therein is accessible so as to be usable for subsequent reference.' This requirement is also in line with the CISG Advisory Council Opinion. Generally formulated criteria are set for the retention of information in its original form, namely that there should exist a reliable assurance as to the integrity of the information [59] and that the information should be capable [page 22] of being displayed.[60] Criteria for determining the integrity of the information are determined by Art. 9(5)(a) and standards for reliability are set out in Art. 9(5)(b).[61]

Article 10 provides default rules on the time and place of dispatch and receipt of electronic communications which are intended to supplement national rules. 'Time of dispatch' is defined as the time when an electronic communication

leaves an information system under the control of the originator or of the party who sent it on behalf of the originator or, if the electronic communication has not left an information system under the control of the originator or of the party who sent it on behalf of the originator, the time when the electronic communication is received.[62]

'Time of receipt' is the time when the electronic communication 'becomes capable of being retrieved by the addressee at an electronic address designated by the addressee.' The communication is presumed to be capable of being retrieved by the addressee when it reaches the addressee's electronic address.[63]

In regard to determining the time of receipt of an electronic communication, the Convention distinguishes between delivery of electronic messages at a designated address and delivery to addresses not specifically designated.[64] In respect to non-designated addresses, the Convention additionally requires that the addressee actually becomes aware that the communication was sent to that particular address.

An electronic communication is, furthermore, deemed to be dispatched at the place where the originator has its place of business and is deemed to be received at the place where the addressee has its place of business.[65] The Convention, therefore, applies an objective test together with a set of presumptions. These presumptions apply even if the place where the information system supporting an electronic address is located may be different from the place where the electronic communication is deemed to be received under paragraph 3.[66] [page 23]

4. CONCLUSION

Both the CISG and the UN Convention on the Use of Electronic Communications in International Contracts are based on the principles of internationality and autonomous interpretation to facilitate the unique character of international transactions.[67] Both support the principles of freedom of contract and party autonomy.[68] Exclusion of the Conventions in toto or of certain provisions can be done expressly or impliedly, such as by having the law of a non-contracting state as the chosen governing law of the contract, or by using terms, such as standard contract terms, that are at variance with the provisions of the Convention.[69] At the same time, it will also be possible for the provisions of the Convention to apply as contract terms (by agreement) where it would normally not be applicable.[70]

The CISG was drafted in terms that are often considered to be vague and that have to be interpreted. However, the open-endedness of many terms presents an opportunity to have the Convention develop through interpretation in accordance with the needs of international trade. It protects the convention from becoming static and not keeping pace with modern developments. By interpreting provisions such as Art. 13 CISG in an analogical fashion, it is possible to afford validity to an electronic contract governed by the Vienna Sales Convention.

The CISG-Advisory Opinion confirms the validity of electronic contracts and notices. However, this opinion has no official status and therefore -- in the absence of party agreement on electronic communications -- uncertainty remains in the minds of international traders. The UN Convention on the Use of Electronic Communications in International Contracts presents a clear and flexible solution.[71] In the interest of international trade it is advised that States ratify or accede to this Convention as it provides an international legal framework that can supplement the CISG and therefore will only benefit international sales. [page 24]


FOOTNOTES

a1. BA LLB LLM; Senior Lecturer, Department of Mercantile Law, University of Stellenbosch, South Africa.

1. The electronic medium lends itself ideally to international commerce as it enables traders to do business at relatively low costs across national frontiers in a short period of time.

2. Article 13 CISG.

3. CISG-AC Opinion no 1, Electronic Communications under CISG, 15 August 2003, Rapporteur: Professor Christina Ramberg, Gothenburg, Sweden.

4. Adopted 23 November 2005, opened for signature 16 January 2006. As of 1 December 2006 China, Singapore, Sri Lanka, the Central African Republic, Lebanon and Senegal have signed the Convention.

5. Articles 11 and 29(1) CISG.

6. Article 8 provides that statements, whether oral or written, and other conduct of a party should be interpreted according to the intent of that party insofar as the other party to such contract is aware of such intent. If such intent cannot be determined, the statements or conduct can be interpreted according to the understanding of what a reasonable person of the same kind as the other party to the contract would have had in the same circumstances. In determining the intent of a party or the understanding of a reasonable man, consideration should be given to all relevant circumstances of the case, which may include negotiations, any practices that the parties may have established between themselves, usages and any subsequent conduct of the parties. Article 9 specifically provides for trade practices that may exist between the parties or trade usages that are widely known and regularly observed by parties to contracts of the type involved in the particular trade concerned, which will be implied into the contract.

7. This article provides for a so-called non-variation clause, which precludes the modification of a contract in any other way than in writing.

8. Article 96 provides Contracting States whose legislation requires contracts of sale to be in writing the opportunity to make a declaration that will determine that any provision of the CISG allowing a contract of sale or its modification to be made in any other form than writing, will not apply to contracts where any party to that contract has its place in a State that has made such a declaration. States that have made such a declaration are Argentina, Belarus, Chile, China, Estonia, Hungary, Lithuania, the Russian Federation and the Ukraine.

9. Eiselen, S., 'Electronic Commerce and the UN Convention on Contracts for the International Sale of Goods (CISG) 1980' (1999) 6 EDI Law Review 21, at p. 36; Schlechtriem, P., Uniform Sales Law - the UN-Convention on Contracts for the International Sale of Goods, 1986, Manz, Vienna at p. 45.

10. Article 13 states that '[f]or the purpose of this Convention "writing" includes telegram and telex.' Hill, J.E., 'The Future of Electronic contracts in International Sales: Gaps and Natural Remedies under the United Nations Convention on Contracts for the International Sale of Goods' (2003) 2 North Western Journal of Technology & Intellectual Property, available at: <http://www.law.northwestern.edu/journals/njtip/v2/n1>, at para. 34 submits that Art. 13 was introduced to act as a supplementary definition for Arts. 21(2) and 29(2) that explicitly mention letters, writings and written contracts.

11. Article 7(2) provides that questions concerning matters addressed by the CISG but not expressly resolved in its provisions should first be settled in conformity with general principles, or in the absence of such principles, by the governing law of the contract as determined by applying rules of private international law.

12. Schroeter, U.G., 'Interpretation of "Writing": Comparison Between Provisions of CISG (Article 13) and Counterpart Provisions of the Principles of European Contract Law' (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 267 at p. 270; Hill, J.E., (2003) 2 North Western Journal of Technology & Intellectual Property at paras. 57-61 points out that in the spirit of Art. 7, the interpretation of the Convention should accommodate the evolving nature of international business customs and usages. Hill argues that electronic commerce as such is a business custom as envisaged by Art. 9 and that Art. 13 should therefore be interpreted in accordance with such customs.

13. Schroeter, U.G., (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 267 at p. 270; Hill, J.E., (2003) 2 North Western Journal of Technology & Intellectual Property at paragraph 52 suggests an alternative interpretation that leads to similar results. According to Hill, the word 'includes' refers to two methods representative of modern electronic communications that were known at the time that the Convention was accepted. Because the writing definition is to evolve in time, the word 'includes' ensures other modern means of communication will not be excluded from the definition.

14. Eiselen, S., (1999) 6 EDI Law Review 21 at p. 29; Enderlein, F. and Maskow, D., International Sales Law, 1992, Oceana Publications, New York, at p. 55; Bonell, M.J., 'Article 7' in Bianca, C.M. and Bonell, M.J., (eds), Commentary on the International Sales Law: The 1980 Vienna Sales Convention, 1987, Giuffrè, Milan, at p. 78.

15. In the case of a paper document, there is a physical record of the content of the contract which can function as evidence of the agreement of the parties and which permits the identification of its author. Schroeter, U.G., (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 267 at p. 270 points out that the CISG does not contain a general principle on the writing requirement as such. The main purposes of a writing requirement are therefore derived from the national legal systems and not from the Convention itself.

16. Article 1.11. As is the case with Art. 13 CISG, this provision is open-ended in order to remain flexible for the future. See in this regard Charters, A.L., 'Growth of the CISG with Changing Contract Technology: "Writing" in Light of the UNIDROIT Principles and CISG-Advisory Council Opinion no 1' available at: <http://www.cisg.law.pace.edu.cisg/principles/uni13.html>, text accompanying fn 10.

17. Revised 1998 Comments and notes to PECL available in Lando, O. and Beale, H., (eds), Principles of European Contract Law: Parts I and II, 2000, Kluwer Law International, Dordrecht.

18. Article 1:301(6). As this definition was drafted fifteen years after its counterpart in the CISG, it takes into account methods of communication that have been developed in later years. Schroeter, U.G., (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 267, at p. 271 points out that international instruments containing provisions modelled on the CISG, such as Art. 209 of the Uniform Act Relating to General Commercial Law of the Organisation for the Harmonisation of Business Law in Africa (OHADA), includes an express reference to telefax.

19. Schroeter, U.G., (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 267 at p. 271. The author's argument is based on the fact that the PECL and the CISG are based on the same philosophy and have the same purpose.

20. Article 6.

21. See Charters, A.L., 'Growth of the CISG with Changing Contract Technology', text accompanying fn 24-30; Schroeter, U.G., (2002) 6 Vindobona Journal of International Commercial Law and Arbitration 267 at p. 271 ff.

22. Helsinki Court of Appeals, Finland, 26 October 2000, available at: <http//www.cisg3.law.pace.edu/cases/001026f5.html>.

23. 1 Ob 525-93, OGH 2 July 1993, available at: <http://cisgw3.law.pace.edu/cases/930702a3.html>; 6 Ob 512/92, OGH 26 April 1997, available at: <http://cisgw3.law.pace.edu/cases/970426a3.html>.

24. Arbitration proceeding 400/1993 heard by the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, 28 April 1995, available at: <http://cisgw3.law.pace.edu/cases/950428r1.html>; Arbitration proceeding 55/1998 heard by the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, 10 June 1999, available at: <http//cisgw3.law.pace.edu/cases990610r1.html>.

25. Arbitration proceeding heard by the Tribunal of International Commercial Arbitration at the Ukraine Federation Chamber of Commerce and Industry, Ukraine, 25 November 2002, available at <http://cisgw3.law.pace.edu/cases/0121125u5.html>.

26. Although this particular aspect of the ruling can be supported, it is submitted that the CISG did not apply to the contract at all. According to the proceedings, the CISG was applicable via Art. 1(1)(b). However, because the parties were respectively from the UK and the USA, Art. 1(1)(b) could not apply to the contract, since the UK is not a Contracting State and the USA made an Art. 95 declaration which meant that Art. 1(1)(b) did not apply to contracts to which they were a party.

27. The CISG Advisory Council is a private scholarly initiative that provides interpretative opinions on various issues related to the CISG. Being a private organisation, these opinions are not authoritative.

28. CISG-AC Opinion no 1, Comment 13.1.

29. CISG-AC Opinion no 1, Opinion to CISG Art. 13.

30. Article 9(1) provides that the parties are to be bound by any usage to which they have agreed and by any practices which they have established between themselves. In addition, Art. 9(2) states that the parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.

. Charters, A.L., 'Growth of the CISG with Changing Contract Technology', text accompanying fn 69-79 and 83-84.

32. Which refers to 'a letter or other writing containing a late acceptance.'

33. Which refers to 'a contract in writing which contains a provision requiring any modification or termination by agreement to be in writing ...'

34. Article 65 CISG. It is submitted that they should be treated similarly to notices.

35. This is an application of the so-called 'Zugangstheorie'. Cf Eiselen, S., (1999) 6 EDI Law Review 21 at pp. 29-30.

36. E-mail messages, for example, are received at an e-mail address from where they are accessible, faxes to a fax address and electronic data interchange (EDI) messages to a third party service provider (VANS) address.

37. CISG-AC Opinion no 1, Opinion to CISG Art 15. It is relatively easy to establish when an addressee received an e-mail message or at least was able to have access to it by referring to the time the message entered the recipient's electronic mailbox.

38. CISG-AC Opinion no 1, Comment 15.6; Eiselen, S., (1999) 6 EDI Law Review 21 at p. 25 submits that as a general rule mere access (the 'Zugangstheorie') instead of actual reception 'is probably the fairer solution if it is made subject to the condition that the message must be readable or processable by the recipient. It has the advantage of being objective and it provides the least opportunity for either party to unfairly manipulate the time of dispatch or reception of the message.'

39. Article 8 CISG governing the interpretation of the conduct of the parties should apply. Parties often use interchange agreements to regulate electronic communications. Articles 9(1) and (2) CISG may also be relevant in cases where the parties have established a practice between themselves, based on prior conduct, to use this type of communication; or in cases where it is a trade usage and the parties knew or ought to have known of such a usage, which is widely known, and regularly observed by parties to contracts of the type involved in the particular trade concerned.

40. CISG-AC Opinion no 1, Opinion on CISG Art 16(2).

41. In the context of contract formation see Arts 19(2) and 21(1). Notices are also used to create or preserve the rights of non-defaulting and defaulting parties and also for the performance of certain duties. See Arts. 26; 27; 32(1); 39; 43; 47; 48; 63; 67(2); 71(3); 72; 79(4); 88(1) and (2).

42. CISG-AC Opinion no 1, Opinion on CISG Art 19(2). The same comments apply to all other articles dealing with notices.

43. Article 27 reads as follows:

Unless otherwise expressly provided in this Part of the Convention, if any notice, request or other communication is given or made by a party in accordance with this part and by means appropriate in the circumstances, a delay or error in the transmission of the communication or its failure to arrive does not deprive that party of the right to rely on the communication.

44. Article 1.10 UNIDROIT Principles states that a notice 'may be given by any means appropriate to the circumstances.' According to the Comment on Art 1.10 no form requirements are required and it may be given by means appropriate in the circumstances. Factors such as the availability and reliability of the various methods of communication and the importance and/or urgency of the message to be delivered, will be taken into consideration.

45. This article deals with requests of notices made in terms of Arts. 48(2) and (3). The latter articles deal with situations where the seller, after the date for delivery, requests the buyer to make known whether they will accept late performance or when the seller gives notice that they will perform within a specified period of time.

46. Article 1. Article 2 provides for exclusions in regard to the scope of application of the Convention. The Convention is solely aimed at commercial contracts. Consumer contracts are excluded by means of Art. 2(1)(a). Art. 2(1)(b) excludes transactions on a regulated exchange; foreign exchange transactions; inter-bank payment systems, inter-bank payment agreements or clearance and settlement systems relating to securities or other financial assets or instruments; the transfer of security rights in, sale, loan or holding of or agreement to repurchase securities or other financial assets or instruments held with an intermediary. The Convention also does not apply to negotiable instruments or documents of title (Art 2(2)).

47. Article 1(1).

48. See Official Records of the General Assembly: Report of the United Nations Commission on International Trade Law on the work of its thirty eighth session (2005), UN Doc A/60/17 at para. 18.

49. See Official Records of the General Assembly: Report of the United Nations Commission on International Trade Law on the work of its thirty eighth session (2005), UN Doc A/60/17 at para. 22.

50. Official Records of the General Assembly: Report of the United Nations Commission on International Trade Law on the work of its thirty-eighth session (2005), UN Doc A/60/17, at para. 128.

51. Article 19(2).

52. Article 20.

53. Article 20(2).

54. Article 20(4).

55. Article 8 provides that '[a] communication or a contract shall not be denied validity or enforceability on the sole ground that it is in the form of an electronic communication.'

56. Article 12 provides that:

[a] contract formed by the interaction if an automated message system and a natural person, or by the interaction of automated message systems, shall not be denied validity or enforceability on the sole ground that no natural person reviewed or intervened in each of the individual actions carried out by the automated message systems or the resulting contract.

57. The United Nations Commission on International Trade Law (UNCITRAL) held that 'law' should include statutory or regulatory law, including international conventions or treaties ratified by a Contracting State, but also judicially created law and other procedural law. However, it does not include the so-called 'law merchant' (lex mercatoria). See Official Records of the General Assembly: Report of the United Nations Commission on International Trade Law on the work of its thirty-eighth session (2005), UN Doc A/60/17 at para. 58.

58. Article 9 starts out by declaring in sub-Art. 1 that a communication under this Convention does not have to be made or evidenced in any particular form. It thereafter proceeds to deal with situations where the governing law does require form requirements such as writing and signature, for instance.

59. Article 9(4)(a).

60. Article 9(4)(b).

61. Article 9(5)(a) provides that integrity shall be assessed by 'whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change which arises in the normal course of communication, storage and display.' According to Art. 9(5)(b) the standard of reliability required shall be assessed 'in the light of the purpose for which the information was generated and in the light of all the relevant circumstances.' The signature requirement is regulated by Art. 9(3) which sets certain criteria to protect the authenticity of a signature.

62. Article 10(1). In practice it would mean the time the communication is delivered to the destination information system or an intermediary system.

63. Article 10(2).

64. Article 10(2).

65. Article 10(3).

66. Article 10(4).

67. Article 7 CISG; Art. 5 UN Convention on the Use of Electronic Communications in International Contracts.

68. Article 6 CISG; Arts. 3 and 19 UN Convention on the Use of Electronic Communications in International Contracts.

69. Official Records of the General Assembly: Report of the United Nations Commission on International Trade Law on the work of its thirty-eighth session (2005), UN Doc A/60/17, at para. 32; Bernstein, H. & Lookofsky, J., Understanding the CISG in Europe, 1997, Kluwer Law International, The Hague at pp. 18-19.

70. Bernstein, H. and Lookofsky, J., Understanding the CISG in Europe at pp. 19-20.

71. It provides default rules on which parties can elaborate even further if they so wish. This article does not suggest that this Convention is the final answer to all issues related to international electronic commerce. Much more still needs to be done, such as cross-border recognition of electronic signatures and authentication methods, measures to combat cybercrime, to enhance network security and to protect intellectual property rights, amongst other things.


©Pace Law School Institute of International Commercial Law - Last updated January 8, 2010
Go to Database Directory || Go to Bibliography
Comments/Contributions