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     -  CISG table of contents
     -  Table of contents to Limitation Convention

CONTENTS
Table of abbreviations and of laws and legal documents quoted in an abbreviated version
Explanation of abbreviated bibliographical references
	PAGINATION OF OCEANA        PRINTED TEXT
QUICK TABLE OF CONTENTS
Preface	. . . . . . . . . . . . . . .     1
A. Commentary on the CISG
-   Preamble	. . . . . . . . . . . . . . .     19
-   Part I: Sphere of application and general provisions	. . . . . . . . . . . . . . .     25
-   Part II: Formation of the contract	. . . . . . . . . . . . . . .     82
-   Part III: Sale of goods	. . . . . . . . . . . . . . .     111
-   Part IV: Final provisions	. . . . . . . . . . . . . . .     367
B. Commentary on the Limitations Convention	. . . . . . . . . . . . . . .     393
DETAILED TABLE OF CONTENTS
Preface
1.  The need for the unification of law and the genesis of the United Nations Convention on Contracts for the International Sale of Goods and of the Convention on the Limitation Period in International Sale of Goods 1.1. The need for and problems involved in the        unification of law 1.2. On the genesis of the Conventions 1.3. Purpose of the Commentary	. . . . . . . . . . . . . . .     1
2.  General problems of the CISG
2.1. Convention instead of uniform laws	. . . . . . . . . . . . . . .     8
2.2. The CISG as a contribution to standardizing        international commercial law	. . . . . . . . . . . . . . .     9
2.3. International sales law and national law	. . . . . . . . . . . . . . .     10
2.4. The structure of the CISG	. . . . . . . . . . . . . . .     11
2.5. The structure of CISG norms	. . . . . . . . . . . . . . .     14
2.6. Formation of terms	. . . . . . . . . . . . . . .     14
2.7. Summary valuation of the system of the CISG	. . . . . . . . . . . . . . .     16
2.8. Summary valuation as to the contents of the CISG	. . . . . . . . . . . . . . .     16
2.9. On the introduction of the CISG	. . . . . . . . . . . . . . .     18
A. Commentary on the U.N. Convention on Contracts      for the International Sale of Goods of 11 April 1980
Preamble	. . . . . . . . . . . . . . .     20
Part I: Sphere of application and general provisions (Articles 1- 13)
Chapter I: Sphere of application
Introductory remarks	. . . . . . . . . . . . . . .     26
Commentary on:
-   Article 1	. . . . . . . . . . . . . . .     27
-   Article 2	. . . . . . . . . . . . . . .     32
-   Article 3	. . . . . . . . . . . . . . .     36
-   Article 4	. . . . . . . . . . . . . . .     39
-   Article 5	. . . . . . . . . . . . . . .     46
-   Article 6	. . . . . . . . . . . . . . .     48
Chapter II: General provisions
Commentary on:
-   Article 7	. . . . . . . . . . . . . . .     55
-   Article 8	. . . . . . . . . . . . . . .     61
-   Article 9	. . . . . . . . . . . . . . .     67
-   Article 10	. . . . . . . . . . . . . . .     71
-   Article 11	. . . . . . . . . . . . . . .     72
-   Article 12	. . . . . . . . . . . . . . .     74
-   Article 13	. . . . . . . . . . . . . . .     75
Part II: Formation of the contract (Articles 14-24)
Introductory remarks	. . . . . . . . . . . . . . .     81
Commentary on:
-   Article 14	. . . . . . . . . . . . . . .     82
-   Article 15	. . . . . . . . . . . . . . .     86
-   Article 16	. . . . . . . . . . . . . . .     87
-   Article 17	. . . . . . . . . . . . . . .     90
-   Article 18	. . . . . . . . . . . . . . .     91
-   Article 19	. . . . . . . . . . . . . . .     97
-   Article 20	. . . . . . . . . . . . . . .     101
-   Article 21	. . . . . . . . . . . . . . .     103
-   Article 22	. . . . . . . . . . . . . . .     106
-   Article 23	. . . . . . . . . . . . . . .     106
-   Article 24	. . . . . . . . . . . . . . .     107
Part III: Sale of goods (Articles 25-88)
Chapter I: General provisions
Commentary on:
-   Article 25	. . . . . . . . . . . . . . .     111
-   Article 26	. . . . . . . . . . . . . . .     116
-   Article 27	. . . . . . . . . . . . . . .     118
-   Article 28	. . . . . . . . . . . . . . .     120
-   Article 29	. . . . . . . . . . . . . . .     123
Chapter II: Obligations of the seller
Commentary on Article 30	. . . . . . . . . . . . . . .     127
Section I: Delivery of the goods and handing over of documents
Commentary on:
-   Article 31	. . . . . . . . . . . . . . .     129
-   Article 32	. . . . . . . . . . . . . . .     133
-   Article 33	. . . . . . . . . . . . . . .     135
-   Article 34	. . . . . . . . . . . . . . .     137
Section II: Conformity of the goods and third party claims
Commentary on:
-   Article 35	. . . . . . . . . . . . . . .     140
-   Article 36	. . . . . . . . . . . . . . .     149
-   Article 37	. . . . . . . . . . . . . . .     151
-   Article 38	. . . . . . . . . . . . . . .     154
-   Article 39	. . . . . . . . . . . . . . .     158
-   Article 40	. . . . . . . . . . . . . . .     163
-   Article 41	. . . . . . . . . . . . . . .     164
-   Article 42	. . . . . . . . . . . . . . .     167
-   Article 43	. . . . . . . . . . . . . . .     170
-   Article 44	. . . . . . . . . . . . . . .     172
Section III: Remedies for breach of contract by the seller
Commentary on:
-   Article 45	. . . . . . . . . . . . . . .     173
-   Article 46	. . . . . . . . . . . . . . .     177
-   Article 47	. . . . . . . . . . . . . . .     181
-   Article 48	. . . . . . . . . . . . . . .     184
-   Article 49	. . . . . . . . . . . . . . .     189
-   Article 50	. . . . . . . . . . . . . . .     195
-   Article 51	. . . . . . . . . . . . . . .     199
-   Article 52	. . . . . . . . . . . . . . .     200
Chapter III: Obligations of the buyer
Introductory remarks	. . . . . . . . . . . . . . .     203
Commentary on Article 53	. . . . . . . . . . . . . . .     203
Section I: Payment of the price
Commentary on:
-   Article 54	. . . . . . . . . . . . . . .     205
-   Article 55	. . . . . . . . . . . . . . .     208
-   Article 56	. . . . . . . . . . . . . . .     213
-   Article 57	. . . . . . . . . . . . . . .     214
-   Article 58	. . . . . . . . . . . . . . .     221
-   Article 59	. . . . . . . . . . . . . . .     227
Section II: Taking delivery
Commentary on Article 60	. . . . . . . . . . . . . . .     228
Section III: Remedies for breach of contract by the buyer
Commentary on:
-   Article 61	. . . . . . . . . . . . . . .     233
-   Article 62	. . . . . . . . . . . . . . .     235
-   Article 63	. . . . . . . . . . . . . . .     236
-   Article 64	. . . . . . . . . . . . . . .     242
-   Article 65	. . . . . . . . . . . . . . .     248
Chapter IV: Passing of risk
Introductory remarks	. . . . . . . . . . . . . . .     255
Commentary on:
-   Article 66	. . . . . . . . . . . . . . .     259
-   Article 67	. . . . . . . . . . . . . . .     264
-   Article 68	. . . . . . . . . . . . . . .     270
-   Article 69	. . . . . . . . . . . . . . .     273
-   Article 70	. . . . . . . . . . . . . . .     279
Chapter V: Provisions common to obligations of seller and buyer
Section I: Anticipatory breach and installment contracts
Commentary on:
-   Article 71	. . . . . . . . . . . . . . .     283
-   Article 72	. . . . . . . . . . . . . . .     290
-   Article 73	. . . . . . . . . . . . . . .     294
Section II: Damages
Commentary on:
-   Article 74	. . . . . . . . . . . . . . .     297
-   Article 75	. . . . . . . . . . . . . . .     303
-   Article 76	. . . . . . . . . . . . . . .     304
-   Article 77	. . . . . . . . . . . . . . .     307
Section III: Interest
Commentary on Article 78	. . . . . . . . . . . . . . .     310
Section IV: Exemptions
Introductory remarks	. . . . . . . . . . . . . . .     316
Commentary on:
-   Article 79	. . . . . . . . . . . . . . .     319
-   Article 80	. . . . . . . . . . . . . . .     335
Section V: Effects of avoidance
Introductory remarks	. . . . . . . . . . . . . . .     339
Commentary on:
-   Article 81	. . . . . . . . . . . . . . .     341
-   Article 82	. . . . . . . . . . . . . . .     345
-   Article 83	. . . . . . . . . . . . . . .     348
-   Article 84	. . . . . . . . . . . . . . .     348
Section VI: Preservation of the goods
Introductory remarks	. . . . . . . . . . . . . . .     351
Commentary on:
-   Article 85-88	. . . . . . . . . . . . . . .     352
-   Article 86	. . . . . . . . . . . . . . .     354
-   Article 87	. . . . . . . . . . . . . . .     358
-   Article 88	. . . . . . . . . . . . . . .     359
Part IV: Final provisions (Articles 89 -101)
Introductory remarks	. . . . . . . . . . . . . . .     367
Commentary on:
-   Article 89	. . . . . . . . . . . . . . .     367
-   Article 90	. . . . . . . . . . . . . . .     369
-   Article 91	. . . . . . . . . . . . . . .     371
Introduction to Articles 92-101	. . . . . . . . . . . . . . .     373
Commentary on:
-   Article 92-101	. . . . . . . . . . . . . . .     373
-   Article 93	. . . . . . . . . . . . . . .     375
-   Article 94	. . . . . . . . . . . . . . .     377
-   Article 95	. . . . . . . . . . . . . . .     380
-   Article 96	. . . . . . . . . . . . . . .     382
-   Article 97	. . . . . . . . . . . . . . .     383
-   Article 98	. . . . . . . . . . . . . . .     385
-   Article 99	. . . . . . . . . . . . . . .     386
-   Article 100	. . . . . . . . . . . . . . .     389
-   Article 101	. . . . . . . . . . . . . . .     390
-   Authentic languages of text	. . . . . . . . . . . . . . .     391
B. Commentary on Convention on Limitation Period      in the International Sale of Goods of 14 June 1974      in the version of the Protocol of 11 April 1980
Introduction	. . . . . . . . . . . . . . .     393
Preamble	. . . . . . . . . . . . . . .     399
Part I. Substantive Provisions (Articles 1- 30)
Sphere of application
Commentary on:
-   Article 1	. . . . . . . . . . . . . . .     400
-   Article 2	. . . . . . . . . . . . . . .     404
-   Article 3	. . . . . . . . . . . . . . .     405
-   Article 4	. . . . . . . . . . . . . . .     407
-   Article 5	. . . . . . . . . . . . . . .     408
-   Article 6	. . . . . . . . . . . . . . .     409
-   Article 7	. . . . . . . . . . . . . . .     410
The duration and commencement of the limitation period
Commentary on:
-   Article 8	. . . . . . . . . . . . . . .     411
-   Article 9	. . . . . . . . . . . . . . .     412
-   Article 10	. . . . . . . . . . . . . . .     413
-   Article 11	. . . . . . . . . . . . . . .     414
-   Article 12	. . . . . . . . . . . . . . .     415
Cessation and extension of the limitation period
Introductory remarks	. . . . . . . . . . . . . . .     417
Commentary on:
-   Article 13	. . . . . . . . . . . . . . .     417
-   Article 14	. . . . . . . . . . . . . . .     418
-   Article 15	. . . . . . . . . . . . . . .     419
-   Article 16	. . . . . . . . . . . . . . .     420
-   Article 17	. . . . . . . . . . . . . . .     421
-   Article 18	. . . . . . . . . . . . . . .     422
-   Article 19	. . . . . . . . . . . . . . .     423
-   Article 20	. . . . . . . . . . . . . . .     425
-   Article 21	. . . . . . . . . . . . . . .     425
Modification of the limitation period by the parties
Commentary on Article 22	. . . . . . . . . . . . . . .     427
General limit of the limitation period
Commentary on Article 23	. . . . . . . . . . . . . . .     428
Consequences of the expiration of the limitation period
Commentary on:
-   Article 24	. . . . . . . . . . . . . . .     429
-   Article 25	. . . . . . . . . . . . . . .     430
-   Article 26	. . . . . . . . . . . . . . .     432
-   Article 27	. . . . . . . . . . . . . . .     432
Calculation of the period
Commentary on:
-   Article 28	. . . . . . . . . . . . . . .     433
-   Article 29	. . . . . . . . . . . . . . .     433
International effect
Commentary on Article 30	. . . . . . . . . . . . . . .     434
Part II. Implementation (Articles 31- 33)
Commentary on:
-   Article 31	. . . . . . . . . . . . . . .     437
-   Article 32	. . . . . . . . . . . . . . .     439
-   Article 33	. . . . . . . . . . . . . . .     439
Part III. Declarations and reservations (Articles 34- 40)
Commentary on:
-   Article 34	. . . . . . . . . . . . . . .     441
-   Article 35	. . . . . . . . . . . . . . .     442
-   Article 36	. . . . . . . . . . . . . . .     443
-   Article 37	. . . . . . . . . . . . . . .     444
-   Article 38	. . . . . . . . . . . . . . .     444
-   Article 39	. . . . . . . . . . . . . . .     445
-   Article 40	. . . . . . . . . . . . . . .     446
Part IV. Final Clauses (Articles 41-46)
Commentary on:
-   Article 41	. . . . . . . . . . . . . . .     449
-   Article 42	. . . . . . . . . . . . . . .     449
-   Article 43	. . . . . . . . . . . . . . .     449
-   Article 44	. . . . . . . . . . . . . . .     449
-   Article 45	. . . . . . . . . . . . . . .     452
-   Article 46	. . . . . . . . . . . . . . .     454
Index [not reproduced]

PREFACE

2. General problems of the CISG
    2.1   Convention instead of uniform law
    2.2   The Convention as a contribution to standardizing international trade law
    2.3   International sales law and national law
    2.4   The structure of the Convention
    2.5   The structure of the CISG norms
    2.6   Formation of terms
    2.7   Summary valuation of the system of the CISG
    2.8   Summary valuation as to the content of the CISG
    2.9   On the introduction of the Convention

[1] The need for the unification of law and the genesis of the United Nations Convention on Contracts for the International Sale of Goods and of the Convention on the Limitation Period in the International Sale of Goods

     [1.1] The need for and problems involved in the unification of law

It is generally acknowledged that the existence of different national legal systems impedes the development of international economic relations with complicated problems arising from the conflict of laws. For a long time efforts have been made to overcome the contradiction between the character of contracts on the international sale of goods and the regulation of these contracts by the individual State under the domestic rules of civil and trade law by drafting uniform rules at the international level. Not only does the fact that the international sale of goods is provided for by each individual State constitute a serious obstacle, but the additional fact that most of those individual rules do not take into consideration the particularities and specific traits of international economic relations is a considerable obstruction as well.

In order to alleviate this situation, first, rules should be drafted which meet the specific character of international economic relations, i.e. rules which are adequate to the relations to be governed, and, second, it is a task for all States which participate in international trade and should be tackled and solved jointly on the basis of equality. (c. F. Enderlein, "The Law of International Trade: A new task for national legislators or a new lex mercatoria?" in: New Directions in International Trade Law, Dobbs Ferry 1977, Vol. II, 448.)

Work on the unification of sales law started in the 1920s, but not until 1972 did the laws on sale adopted at a diplomatic conference in The Hague in 1964 (Uniform Law on The International Sale of Goods and Uniform Law on the Formation of Contracts for the International Sale of Goods) enter into force between a few States (the parties to those laws were at the time Belgium, the FRG, Gambia, Britain, Israel, Italy, Luxembourg, the Netherlands and San Marino).

The results obtained so far in the unification of law, be it in the field of conflict of laws or of substantive law, clearly show that "joint law-making" in international economic relations is an extremely difficult task. Success could be achieved, therefore, above all in [page 1] those areas where objective requirements forced a solution, as in the international transport of goods.

And it became obvious that a unification of law is not impossible to achieve at a global level. The adoption in Vienna in 1980 of the CISG and the earlier adoption in New York of the 1974 Limitation Convention have proved to be a considerable success and are a demonstration that the international community of States is capable of solving complex tasks when it is guided by the principles of peaceful coexistence and the idea of equality of all States. Just like any achievement in the unification of law, the aforementioned two Conventions, which are to be commented on in the present work, are the result of many compromises.

Any unification of law is dependent on a certain readiness for compromise on the part of the States involved. Compromising is both a problem of substance and form with the chances for compromise being better in regard to form. But a compromise cannot be achieved in respect of each and every issue. Hence, the Convention as a whole constitutes a compromise in that all States either gave in or prevailed.

One problem involved with comprise is to decide by which yardstick to measure the proposed solutions. One's own rules cannot serve as a measure for what compromise is possible in regard of a uniform regulation at the international level, for the same functions can very well be fulfilled using different legal structures.

The limits of compromise solutions are determined by certain minimum functions to be implemented by way of the unification of law. The equality, for instance, of the parties involved in commercial relations must not be questioned, and a balanced relationship between the parties' rights and obligations must exist.

     [1.2] On the genesis of the Conventions

The above-mentioned Hague Conventions of 1964 were basically the result of the work of some Western countries. Apart from reservations concerning their substance, this was one of the main reasons that the Conventions a priori did not have a chance of being adopted worldwide. This followed from an analysis made on the basis of comments by governments, which was submitted by the Secretary-General of the United Nations to the third session of UNCITRAL in 1970 (A/CN.9/31). UNCITRAL, after having been founded, considered it as one of its primary tasks, to revise the Hague uniform sales law and to draft rules which all States of the world, irrespective of their economic and social systems, and of [page 2] their level of development, could accede to. At its first session in 1968 it decided to give priority to the following topics:

* The Convention was signed by the former German Democratic Republic on 13 August 1981, ratified on 23 February 1989 and entered into force on 1 March 1990.

** The Russian Federation continues, as from 24 December 1991, the membership of the former Union of Soviet Socialist Republics (USSR) in the United Nations and maintains, as from that date, full responsibility for all the rights and obligations of the USSR under the Charter of the United Nations and multilateral treaties deposited with the Secretary-General.

[1.3] Purpose of the commentary

The present commentary is to acquaint companies and factories with UNCITRAL sales law so as to enable them, when shaping and implementing their contracts, to better meet the new challenges arising with the entry into force of the Conventions.

The main purpose of the commentary, however, is to explain to the reader how the individual provisions of the CISG and the Limitation Convention are to be conceived and which importance should be attached to them; also, how the conventions should be interpreted and which interpretation can reasonably be expected.

The authors of the present commentary have for many years been involved in work on the unification of law. F. Enderlein was a member of the government delegation of the former GDR to the tenth and eleventh sessions of UNCITRAL and to the 1974 diplomatic conference in New York. At the 1980 Vienna Conference he was the Secretary of the Second Committee and represented the United Nations Office of Legal Affairs. D. Maskow was a member of the government delegation of the former GDR to the 1980 Vienna Conference and has had a considerable share in the work of the First Committee.

Both during the drafting of the CISG and the Vienna Conference the idea of such a commentary was repeatedly suggested. A relevant commentary would indeed be of great help to judges and arbitrators. But the discussion within UNCITRAL and at the diplomatic conferences made it clear that the project of an official commentary could not be realized because its preparation and adoption would take an additional period of time as long as that needed for drafting and adopting the Conventions themselves. As a consequence, there will be no official commentaries relating to the CISG and the Limitation Convention. The commendable commentaries by the Secretariat of UNCITRAL (c. Official Records) refer to the respective drafts and do not always reflect the views of the Commission's Member States.

Commenting is thus left up to science, and it is has already become obvious that there will be different views in regard to interpretation. [page 6] At the time this commentary went to press there were already several national commentaries in existence (c. v. Caemmerer /Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht, CISS, Munich 1990; J. Honnold, Uniform Law for International Sales, Deventer 1982; Z. Stalev, Vienskata konvenciha zu mezdunarodna prodazba na stoki: kratak kommentar, Sofia 1981; I. Vilus, Kommentar Konvencije Ujedinjenih Nacija o medunarodnoj prodaji robe, Zagreb 1981). Also an international commentary, in which D. Maskow participated, has been published: Blanca/Bonell, Commentary on the International Sales Law. The 1980 Vienna Sales Convention, Milan 1987). Several national and international conferences have also dealt with the International Sales Convention and its interpretation. In this context see also the list of abbreviations of the quoted publications.

A supreme international instance lacking, diverging interpretations of the Conventions by national courts - a problem of all international uniform laws - will not fail to appear. Hence even greater need for reciprocal information on the interpretation and application of the Conventions - an objective to which the present commentary is committed.

On the part of UNCITRAL it was thought how the Secretariat, with the assistance of national correspondents, could gather all court decisions and arbitral awards to be expected in regard of the conventions and how to disseminate the relevant information. It was decided to collect all decisions in the original language in the Commission's Secretariat and to make them available if requested. A short summary of each decision will be translated into the six official languages of the United Nations. These summaries will be published as regular United Nations documents.

The Limitation Convention was adopted in the Chinese, English, French, Russian and Spanish languages, with each version being equally authentic. In the case of the CISG a further official language - Arabic - was added. All versions in other languages are considered to be translations.

The sub-titles of the individual paragraphs of the two Conventions, which are put in brackets, are not part of the official texts. They were added to facilitate orientation for the reader of this commentary. [page 7]

[2] General problems of the CISG

     [2.1] Convention instead of uniform law

Whereas ULIS and ULFC have been adopted in the form of uniform laws which States adhering to the special conventions for their introduction are bound to incorporate into their national law, the CISG has been shaped in the form of a convention. It contains in one document rules governing the relations between parties to contracts of sale as well as the international law instruments to put them into force. The CISG thus follows a new trend in the formal arrangement of a universal standardization of law that was already given expression in the conventions on prescription, agency, factoring and leasing.

Prevailing opinions also expects meritorious rules of a contractual convention to be incorporated into the domestic law of the Contracting States, so that they become binding on their legal subjects. Yet, there is a difference with uniform laws insofar as this incorporation elucidates the international character of the respective rule, underlines its special position in domestic law, and furthers an interpretation and application which is orientated to the standardization of law. So it aims at an international harmony of decisions and represses a legal practice coined by national concepts, to which jurisdiction tend in the case of uniform laws (for examples c. Volken/Freiburg, p. 86).

An apparent expression thereof is that the use of the convention form provides, in cases of discrepancies, for an interpretation pursuant to the authentic text and not according to a translation into another language.

Incorporation into domestic law is effected by promulgating the adopted convention and not by enacting a special law. There exists a somewhat simplified procedure in some countries. In the USA, for instance, the Senate can decide on its own, whereas uniform laws suppose a decision by both Houses of Congress (Winship, Commentary, p. 626).

The strengthening of the international character of contractual norms may even be more effectively achieved, in the authors' view, if one dispenses with the auxiliary construction of an integration into domestic law, and rather proceeds from the assumption that domestic law renounces its own regulations and their use for the benefit of the convention and to the extent of its scope. When a State becomes party to a convention containing authoritative rules [page 8] for its legal subjects, we would prefer to interpret that the rules become directly binding on its legal subjects as international rules. Such a construction is even favoured whenever domestic law refers to international norms, and Mjullerson starts from this point ("Ober die Beziehungen zwischen Volkerrecht, Internationalem Privatrecht und nationalem Recht", Sowjetskoje gossudarstwo i prawo, 1982/2, p. 80 fol). This reference may clear up matters, however it does not seem to us a conditio sine qua non, for it implies making the direct application of international norms dependent on national law a practice being still widespread. However, this is not to be desired, for the very reason that it would lead to a situation where some countries apply international treaty norms as integral part of their domestic law system whereas other countries directly apply them as international law.

     [2.2] The Convention as a contribution to standardizing international trade law

The CISG refers to international contracts of sale as it ensues from its title and Article 1. Consequently, it leaves the domestic law of sales untouched. This approach is, at present, the only possible one as the domestic sales law is marked by targets of economic and social policy which result in very different legal solutions; Hence follows that standardization, comprising domestic matters as well, seems to be out of the question, at least on an international scale (see also Bonell/BB, p. 8). It would also hardly be desirable as it does not take sufficient account of the special features of international matters, evidenced by the fact that international economic treaties tie together different economic systems (with their respective civil, commercial, and foreign trade law regulations). Different currencies and issues that reach beyond borders must also be taken into consideration. This requires specific techniques in trade and the stipulation of special obligations (viz. the preservation of the goods -Article 86 fol). Certainly, these peculiarities tend to diminish in trade between integrated communities. Yet, they have not at all disappeared there: The special treatment of the individual consumption sphere which can be occasionally found in connection with the evolution of consumer protection leads, in addition to a differentiated contract law, temporarily rendering an all-out standardization more difficult.

By aiming for a standardization of the rules in the most important practical field of international economic relations between enterprises on a universal level, namely contracts of sale, the CISG creates an international uniform law of sales, or, as will call it henceforth, an "international sales law". It represents a decisive component of the growing international trade law, which itself is a weighty building block in setting up a legal regulation of international [page 9] economic relations, i.e. international economic law. But the CISG realizes only a partial legal standardization. Higher legal security and lucidity of the legal conditions of international trade caused by it will be none the less more beneficial to trade, the more States adhere to it and the more one succeeds in standardizing border matters. This is done by creating supporting conventions (Article 7, note 7). In a wider sense, conventions in the field of transport and currency circulation are to be considered as supporting conventions. In this way a growing stock of norms of international trade law, which calls ever more urgently to be conceived as a unity by science and to be interpreted as such in applying the law, is formed (in this regard see also van der Helden, esp. p. 18 fol). Finally, this requires that the further development of a stock of norms must take into consideration what has been achieved, and create new regulations which fit to it as far as possible.

     [2.3] International sales law and national law

The shaping of an international trade and sales law involves manifold disturbances of growth. They depend on different interests of the States conditioned by contradictions and/or differences in their socio-economic structures, economic development and foreign trade system, but also by their cultural and legal traditions. For those reasons, no settlement could be reached on a number of issues (see for instance subjects mentioned in Article 4). Therefore, it will be necessary to apply national law in addition to standardized law for a relatively long period of time. So, it has to be determined what problems are to be ruled by international sales law, and what problems are to be given over to national law. This is not a question of a conflict of laws in the traditional sense, for the limits of legal spheres are to be determined rather than those of national laws; and the national sphere consists of the individual national legal systems among which a choice must be made in a conflict of laws.

The question as to what relations are covered by the international sales law is determined by the CISG itself, as it:

• Defines its scope ratione materiae: in a general way or, in a positive or negative manner, with regard to certain legal institutions (Articles 1 to 5);

• Tries, in a general way, to mark off its scope from national law, and thus indicates possibilities and limits of an extensive interpretation (Article 7 - in this respect one could speak of a vertical rule in case of a conflict of laws);

• Refers to national law in either direct or, even more indirect manner (Article 20, paragraph 2; Articles 30, 42, 54 and, 78); settles problems and, consequently, supersedes national law. [page 10]

     [2.4] The structure of the Convention

The structure of the Convention (see Volter/Wagner, p. 142) follows the usual pattern by defining, in its introductory part, the sphere of application (Articles 1 to 6). Then follow the general provisions (Articles 7 to 13) which refer to the stipulations regarding the [page 11] formation of the contract (Part II) as well as its contents (Part II). Here, the points are the interpretation of the Convention and the conduct of the parties, trade customs and usages, and establishment and problems of form. According to the typical structure of contractual arrangements, including conventions, there follows the regulation regarding the formation of the contract (Articles 14 to 24). When Part II was set up, some solutions were conditioned by the legal policy decision to enable parties to omit Part II or Part III when adhering to the Convention. Therefore, it was not recommendable to interlace the questions of formation and the questions of modification and termination by agreement. The latter are now regulated by Article 29 under the general provisions for the sale of goods (Article 29, note 1.2.). Actually, Chapter I of Part II comprises very heterogeneous subjects that have been combined mainly for pragmatical rather than for theoretical reasons. Here we find also, in part, general provisions relating to breaches of contract (Articles 25, 26 and 28) and stipulating the rights of both buyer and seller. Of course, their inclusion in Chapter V would have been possible and, eventually, even more expedient.

The core of the regulation of part III is formed by Chapters II and Ill, regarding the obligations of the seller and the buyer respectively. They have been set up symmetrically, so far as the peculiarities of the performances of both parties allowed for it. In the respective introductory articles, the obligations of the parties are regulated, preceded by their, summing-up (with the exception of the obligation of the seller to confer property - Article 4, subpara. (b)). At this, the obligations of the seller take the larger space, because they are more multifarious, and because special attention has to be given to the conformity of the goods with the contract and to the rights and claims of third parties. Hereupon, the rights of the other party, in case of being violated of its rights, are set down.

Chapter IV deals with the passing of risk as a special problem. Thus, disturbances which affect the implementation of the contract from outside, but for which none of the parties is responsible (as they are chiefly disturbances which occur during transport), are classed with the parties'-risk spheres. Thus, the parties are being enabled to prepare for it by obtaining insurance policies.

Chapter V refers to the risks to the contract and special breaches of con tract respectively, and stipulates, in more detail, some of the legal consequences of breaches of contract (Section II, Section V). In this context, some stipulations governing the consequences of an avoidance of the contract may also be applied, so far as the statutory conditions are given, to an avoidance by agreement or a unilateral avoidance not pursuant to a breach of contract. Chapter V also lays down [page 12] special legal consequences of breaches of contract in principle (Section III).

Specific legal consequences of breaches of contract are also stipulated by Section VI regarding the preservation of the goods. Since they do not primarily concern the contract violator, but the party aggrieved in its rights, certain particularities in substance result. In between, Section IV, relates to exonerating circumstances, which determine the subjective part of breaches of contract (above all the exclusion of a generally presupposed liability with regard to damages), viz. objective liability with possible exoneration. So, if one proceeds on the assumption that the regulation of breaches of contract mainly comprises mainly of three elements:

• statutory breaches;

• subjective factors; and

• legal consequences;

     [2.5] The structure of the CISG norms

The norms of the Convention are predominately regulatory norms. In a smaller portion (apart from the international law rules of Part IV), they are in the nature of metanorms, which do not directly determine the commercial conduct of the parties, but the sphere of application of the regulation (Articles 1 to 6) and its interpretation {Article 9). According to the requirements of it subject matter, the Convention contains predominantly norms for reciprocal conduct.

We also find in the text of the CISG isolated target norms, which are characterized by the fact that they prescribe the result to be attained by the addressee of the norm, but leave it to him to choose the means, to wit, the concrete modes of conduct. In this manner, Article 54 determines the acts which form part of the obligation to pay the purchase price. Article 60, subpara. (a), and Article 70 also belong to this category. In view of the various possible and admissible modes of conduct in international trade, the conduct to be adopted in a definite situation cannot always be prescribed in detail. The use of this structure of norms serves as a means to secure the necessary flexibility of the regulations. Thus, as a consequence, the space of discretion is enlarged for both the parties and the adjudicating body.

It is apparent, with regard to other international contractual conventions, like the Hamburg Rules and the Convention on International Multiple Transport of Goods, that the CISG uses only a few formally independent legal definitions. Yet, there are quite a number of rules which represent definitions as to their contents, and we therefore threat them as such. But, more often they are shaped in the form of norms of conduct, i.e. operational rules (for instance Article 9, paragraph 2; Articles 30 and 53). The existing definitions (for example Articles 10, 13 and 24) appear largely in context with the respective practical issue, and we desist from giving a catalogue.

A typical structural principle of the norms of the CISG is seen in the fact that the character of the whole regulation as a compromise is reflected by the individual norms, by combining different principles, e.g. as rules or exceptions, from which the various legal systems proceed (Article 16 - for details see Maskow, Hauptzüge, p. 546 fol).

     [2.6] Formation of terms

It may be realized that there is an endeavour to use such terms whose corresponding words or expressions in other languages do not have a definite legal significance attributed to them, and which [page 14] are, consequently, non-technical in a legal sense and become legal terms by the CISG only. Terms to be so classified are "avoidance of the contract" (Articles 49 and 64), "to deliver" (Articles 30 and 33), "to hand over" (Article 31, subpara. (a); and Article 32, paragraph 1), "to take delivery" (Articles 53 and 60), and "to take over" (Article 60). The formation of terms in this manner favours an original interpretation of the Convention that is based upon its contents and does not refer to the significance of these terms in the national legal system (note 3 of Article 7). In view of the high differentiation in national legal languages, this goal could not consistently be reached, as new adequate terms may not be found for all legal problems, or the originality obtained is lost again with the translation. Furthermore, there is no safe protection against a nationally coloured interpretation (D. Tallon "Questions de langage à propos des textes d'unification de la vente immobilière", Prace z prawa cywilnego, Warsaw, 1987, p. 403). But the terms cited as examples are not entirely unknown in the national legal languages. However, in interpreting the Convention one should, insofar, depart from their originality. Thus they get a new meaning by the CISG. This phenomenon can also be observed within the law of a particular State, when the same term is used by different branches of the law.

Already, it ensues from the originality of the formation of terms that the precise and detailed legal contents of the terms has still to be defined in the process of the application of the Convention. This implies, a priori, that the terms are vague in a certain manner. Yet, their uncertainty is limited by the fact that often one can link up with their meaning in common or commercial language in order to determine their contents more precisely. Though one must state that the CISG often uses term where this is not easily possible, as, for instance, with "reasonable person" (Article 8, paragraph 2; Article 25), and "unreasonable inconvenience" (Articles 34, 37 and Article 48, paragraph 1). The precise contents may not only differ from Article to Article, but also in applying one and the same Article to different subject matters. Terms, the contents of which result from the relations to which they are applied, allow for a large degree of flexibility, appropriate to the variety of subjects presented with international contracts of sale. Thus, the disadvantage of a lesser anticipation is compensated for. The use of vague terms occasionally shows the smallest common denominator of the negotiating States and conceals different conceptions as to content.

The vagueness of the terms correlates with their abstract character and influences the CISG as a whole. It is shown by the relevancy of general principles, for one part (esp. Article 7, paragraph 2). Apart from good faith (Article 7, paragraph 1), the principles are not even characterized by terms. For the other part, concrete legal situations [page 15] are conceived in relatively abstract terms. Typical in this regard are the term "breach of contract" and the differentiation made, in its context, between fundamental and other breaches (Article 25). The term "acceptance of an offer" in Article 18, paragraph 2, is also very abstractly seized. Not only has the consistent use of such terms tightened the text of the Convention, in comparison with ULIS, but it may also facilitate the application of the law, as the regulation has become more easily surveyed, and subtle distinctions, which are hardly related to factual consequences, have been waived. The individual decisions do not become more foreseeable in this way. At any rate, this will change when, after a longer period of time, relevant jurisdiction is firmly established.

     [2.7] Summary valuation of the system of the CISG

Our explanations under ciphers 2.4. to 2.6. have shown that the method applied to the Convention is based on a thorough theoretical grasp of the structure of international sales of goods which is reflected by the high degree of abstraction of the Convention altogether, and also by its norms and terms. There is a guarantee that the legal problems of international contracts of sale are seized in a relatively comprising and flexible way. Whether the abstractions made are the right ones, is a matter of content that will have to be referred to, in general (cipher 2.8.) and in detail, in the course of commenting.

     [2.8] Summary valuation as to the content of the CISG

In order to evaluate the Convention as to its content, it must, above all, be stressed that the CISG is directed towards the needs of international trade and does not chiefly aim for a standardization of national regulations on sale, set up to meet domestic requirements. For example, the international character of the Convention is expressed by the authoritative rules governing its interpretation (Article 7), the weight it allots to trade usages, its consideration of the main forms of international sales of goods (Part III, Chapter II), and the preservation of the goods (Part III, Chapter V, Section VI). It is pointed out that the CISG, in comparison with ULIS, is more orientated toward the trade in machinery than in raw material (Hellner, Dubrovnik, p. 337 fol).

As unconventional or even modern as the CISG may appear in solving traditional problems (for examples, see Bonell/BB, p. 13 fol), it is predominantly cautious in regard to new legal phenomena. This applies to dealing with the process of negotiating the contract, the pre-contractual relations, the influence of administrative measures on contracts, and change of circumstances. Altogether, the [page 16] Convention represents a balance between a modernization of the law of sales and the status quo.

The CISG will not relieve the parties of the individual formation of the contract. This is not only due to the fact that it has left or had to leave open a number of questions, but rather certain provisions call for an individual agreement. Therefore, the Convention often refers to the contract itself. It is up to the parties to make arrangements which answer the particularities of the deal, correspond to the foreign trade regulations of the countries involved, and endeavour to bring to bear their respective interests. For that reason, auxiliary means of contract formation, like general conditions of individual enterprises, conditions of branches and sets of clauses (INCOTERMS, model contracts, guides) which are issued by international, regional or universal governmental organizations will also preserve their value within the framework of the Convention. Of course, in some cases, an appropriate adaptation will be expedient. Insofar as such documents have a bearing on the relations of the parties, by virtue of the contract, they will even rank before the CISG, because in the relation between the Convention and the contract, the letter has priority.

In our view, the CISG has taken into account both the interests of seller and buyer in a well balanced manner. This is also admitted by representatives of the developing countries (Date/Bah, Perspective, p. 37 fol) who, at the Diplomatic Conference, carried through a series of modifications, seen from the perspective of the buyer of plants, machinery and finished products.

Summing up, it may be said that the CISG seizes those basic problems of the international sale of goods which can be regulated at present, and it solves them in a way that meets the requirements. The Convention thus effects - to resume the statement made in valuating its method (cipher 2.7.) - a scientific generalization which is just in principle. So far, the question raised by Schlechtriem (Einheitliches Modell), as to whether the uniform law of sales represents a scientific model or a regulation close to practice, may be answered as follows: The CISG comprehends practice related rules within a new scientific model or under a new method. But this answer involves that, whenever the addressees of the provisions are neither jurists nor legal specialists in the international law of sales, understanding is affected by a certain discrepancy between contents and method. It is our impression that the contents of the CISG is closer to commercial practice than its methodical presentation. This contradiction can only be overcome by an effort of legal propaganda. [page 17]

Some constructions which are not familiar to the German lawyer are due to the influence of common law. At any rate, this should not be overstated, as Thieffry does (esp. p. 378 fol).

     [2.9] On the introduction of the Convention

It lies in the very nature of the standardization of law that practically any party to the comprised international economic contracts is confronted, though to a different extent, with conceptions that are new and unfamiliar to it, and that will first be met with skeptically. The addressees of these rules have to acquaint themselves with the new regulations. Business conditions and other documents have to be adapted and the ensuing business practices have to be developed. The pros and cons of the new regulation are not immediately comprehensible and, above all, they cannot be weighed against each other. This is one the reasons why the Hague Uniform Laws did not find striking success (Kahn, UNIDROIT, p. 359 fol), however, the perspective of the CISG is seen more favourably (ibid. p. 375; see also Herber, UNIDROIT, p. 514).

These difficulties, which will be overcome in a few years, should not detain the States and the parties to international economic contracts to adopt and to apply the Convention, which, as far as theoretical considerations allow to foretell, meets the requirements of the international sales law. The advantage of a standardization of law will prove worthwhile in the end. Those who make the effort, contribute to further the evolution of international trade law, for the CISG should be a starting point for far-reaching endeavours. (In the same sense, D. Tallon, "La resolution du contrat pour inexecution imputable au debiteur: ...", Recht in Ost und West, Tokio, 1988, p. 597).

A. COMMENTARY ON THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOOD 11 April 1980 [*]

* United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10-March - 11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committees, United Nations, New York 1981, p. 178.

[TEXT OF THE PREAMBLE] [1]

The States Parties to this Convention,

Bearing in mind the broad objectives in the resolutions adopted by the sixth special session of the General Assembly of the United Nations on the establishment of a new International Economic Order [2],

Considering that the development of international trade on the basis of equality and mutual benefit [3] is an important element in promoting friendly relations among States,

Being of the opinion that the adoption of uniform rules which govern contracts for the international sale of goods and take into account the different social, economic and legal systems [4] would contribute to the removal of legal barriers in international trade and promote the development of international trade [5],

Have agreed as follows:

[WORDS AND PHRASES, CONCEPTS

[COMMENTARY]

[1] [importance of preamble]

Opinions differ in the legal systems as to the legal importance of preambles. In the Eastern European countries preambles, in general, define in a binding way the social function of the respective legal act. That definition is then decisive when it comes to interpreting such act. In common law countries, however, where skepticism prevails in regard to general principles, they play a negligible role. Honnold, in his commentary, does not even comment on the CISG preamble, and Evans (BB, 25) is very skeptical about it. Loewe does not want to refer to it in the interpretation of specific provisions. [page 19]

The preamble of the Convention, which was drafted at the diplomatic conference, was not the subject of substantive discussion (O.R., 219 fol). This might be an indication that no particular importance was attached to it. It would, however, be inappropriate to dismiss the preamble from the start as insignificant from a legal point of view. The principles it contains can be referred to in interpreting terms or rules of the Convention, such as the term of "good faith" (Article 7, paragraph 1) or the rather frequent and vague term "reasonable".

It could also be used to fill gaps because those principles can be counted among, or have an influence on, the basic rules underlying the Convention (Article 7, paragraph 2). The spirit of the preamble should also be taken account of when agreed texts of sales contracts are to be interpreted.

All in all and in spite of the reservations to follow, the preamble can be used, in a cautious way, to put restraint on the immense liberty the parties have to dispose of the Convention (Article 6). In so doing, a referral to national law, which would otherwise be necessary, can be avoided.

[2] [establishment of a New International Economic Order]

      [2.1] Reference is made here to the Declaration on the Establishment of a New International Economic Order of 1 May 1974,

3201 S-VI (resolutions 220 fol) and to the Programme of Action on the Establishment of a New International Economic Order of 1 May 1974, 3202 S-VI (ibid 234 fol). Both resolutions contain political-economic principles which aim to eliminate the developing countries' economic backwardness.

      [2.2] The first part of the preamble should be understood as including the CISG into the efforts for the establishment of a New International Economic Order and making it a component of those endeavours. Hence the altruism that Winship, Commentary (625), deduces from the preamble. But the Convention can make only a moderate contribution towards that objective. This can be inferred from the fact that trade measures, which are expressed in foreign trade regulations, have a much greater influence on the international flow of goods that the unified sales law (in this sense Date-Bah, Standpoint, 40). Furthermore, the Convention can exercise only a limited influence because it can be altered in general and disposed of (Article 6). [page 20]

Experience has shown that reference to current documents in a Convention which comes into force only eight years after its adoption and which is to exist for decades entails quite a few problems. We believe that a general reference to the New International Economic Order, as it is included in the preamble of the Convention on Agency, is more appropriate. We do not see any disadvantage in even renouncing such reference, as is done in the preambles to the Factoring and Leasing Conventions, for requirements which go beyond those mentioned under note 3 cannot clearly be deduced from the New International Economic Order and applied to contractual relations. It is, therefore, sufficient, to make only general mention of it.

[3] [equality and mutual benefit]

Emphasis is place here on two of the particularly important principles of international trade, "equality" and "mutual benefit", which should also govern the relations between States and the process of shaping the New International Economic Order. They expressly refer to the relations between States. However, it is exactly this part of the preamble which is relevant for commercial relations as well, for equal and mutually beneficial relations between States in this context have to be specified in the respective commercial relations, including sales contracts.

[4] [take into account the different social, economic and legal systems]

In the quarterly meetings before the holding of the diplomatic conference, agreement could be reached in that the different legal systems were taken into consideration in the Convention. As a result of those discussions, the Convention has the character of a compromise. This can be seen from both the substantive solutions and the regulation methods used (Preface 2.5. and Maskow, Hauptzüge, 546 fol).

[5] [removal of legal barriers]

The idea that the unification of law would promote international trade, as it is expressed here in an exaggerated way ("... removal of legal barriers"...), is the underlying motif of any efforts to achieve uniform laws in this field (c. Preface 1.1, 2.2, 2.3.). From this wording it can be deduced, in our view, that legal problems should, whenever possible, be solved in line with the Convention. Doubts, however, should always be removed in applying the provisions of the Convention, as is stipulated in Article 7, paragraph 2. [page 21]

Go to Table of Abbreviations || Go to Explanation of Abbreviated Bibliographic References
Go to entire contents of Enderlein & Maskow text

(1) This Convention applies to contracts of sale [1] of goods [2] between parties whose places of business [3] are in different States [4]:

(a) when the States are Contracting States [5]; or
(b) when the rules of private international law lead to the application of the law of a Contracting State [6].

(2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between or from information disclosed by, the parties at any time before or at the conclusion of the contract [7].

(3) Neither the nationality of the parties [8] nor the civil or commercial character of the parties or of the contract [9] is to be taken into consideration in determining the application of this Convention.

[WORDS AND PHRASES, CONCEPTS

[COMMENTARY]

[1] [contract of sale]

The description of what is a contract of sale, whose existence is the first decisive criterion for the application of the Convention, follows in particular from the provisions on the obligations of the seller (Article 30) and of the buyer (Article 53). Both taken together could be conceived as a definition of the contract of sale. Article 3 extends the scope of application of the Convention to some contracts which are not purely sales contracts. [page 27]

Whether the so-called linked operations are also covered by the Convention's scope of application is not expressly clarified. At present those operations, above all in East-West economic relations, to which, however, they are not limited, include the following main forms of contracts: counter-purchase, buyback and barter, of which exists no uniform definition at all. It is widely held (Documents of the ECE TRADE/WP.5/R.4/Rev.1, Ziff. 8 fol for counter-purchase and TRADE/WP.5/R.5 for buyback) that at least the two first mentioned forms of bound transactions are understood to be such where separate contracts are often concluded in both directions; provided that further prerequisites are met those are no doubt governed by the Convention.

There are problems in regard to genuine barter which, in present day world trade, is relatively seldom. An overwhelming number of arguments in our view speaks in favour of applying the Convention also in this case (Loewe, 27, seems to have a different view). Any partner is to be considered here both as buyer and seller, though with regard to different performances - in respect of the obligations to deliver, to hand over documents, to acquire title in the goods and to take delivery.

It has to be admitted, however, that Article 53 expressly mentions the obligation to pay the price and that also the following provisions require payment of money. Difficulties could arise in regard to the provisions concerning the synallagmatic connection between performance and counter-performance (Article 58); and to that extent it is understandable that Huber (419) holds a different opinion. Those difficulties should be overcome in shaping the contract; and, according to our experience, this is actually done. The opinion substantiated in the genesis of ULIS, namely that the uniform law is not to be applied to barter (Herber/Dolle, 9) does not, as we believe, have to be applied in regard to the CISG.

The Convention cannot be applied to leasing contracts even if they contain a purchase option (Volken/Freiburg, 113 holds a different view). For such contracts there is a specific convention in the form of UCIF, even if it has not yet entered into force. This does not, however, exclude that in the case of financial leasing in regard to the sales contract between the seller and the lessor, the CISG is applied if the required conditions are met. Then the CISG is applied to the relations between the lessor and the lessee to the extent to which the conditions of the delivery contract affect the former (e.g. Articles 10 to 12, Factoring Convention). [page 28]

Neither does the Convention apply, as a matter of principle, to agency agreements with commercial dealers (Herber/Freiburg, 103). We believe, however, that it is valid for those sales contracts which are concluded on the basis of the dealer contract (e.g. through delivery on call).

As to investment contracts compare Article 3, note 7.

[2] [sale of goods]

The goods referred to are conceived as movable assets; and the common-law tradition sets great store by noting that they have to be corporeal as well (Honnold, 88). A reflection of this position was the exclusion of electricity from the Convention's scope of application. Hence sales of immovable property and legal assets (e.g. sales of industrial property rights) are not covered by the Convention's field of application. The results of scientific and technological research (e.g. projects, construction documents etc.), however, can well be the substance of sales contracts in the meaning of the Convention (Article 3, note 7). The term "goods" in the sense of the Convention is limited by Article 2, subparas. (d), (e) and (f); but then again extended in Article 3.

[3] [places of business]

Concerning the notion "place of business" compare Article 10, note 2.

[4] ["in different States"]

Reference is made here to the second decisive criterion for the Convention's application: the internationality of the contract. The inclusion of the requirement of transboundary transportation following the ULIS model, as was requested by Volken (Freiburg, 92 fol) citing examples which would cause problems, would have produced legal complications and lack of clarity in terms of substance.

[5] [Article 90, 94 restrictions; territorial restrictions]

      [5.1] Restrictions follow from Article 90 and, insofar as the States concerned have made relevant declarations, also from Article 94.

      [5.2] The Convention does not apply; per se, to the relations between parties from different territorial units of States having several relevant legal systems (Jayme/BB, 30).

[6] [rules of private international law lead to the application of the law of a Contracting State]

      [6.1] This rule enables the Convention to be applied also to contracts between parties of whom one, or in exceptional cases even two, does not have his place of business in a Contracting State. This is valid where the decisive rules of private international law refer to the law of a Contracting State. [page 29]

We hold that in the event of such reference the CISG should be applied at once without checking the private international law of the State to whose law reference is made (so convincingly Winship, 521 fol with reference to views contradicting one another; in favour of reference back or forth Loewe/Lausanne, 15).

      [6.2] What matters here are the rules of private international law which determine the law to be applied to sales contracts. In many instances this applies to arbitral tribunals. The national conflict-of-law rules in most cases permit a broad party autonomy in terms of conflicts of law (Lando, International Encyclopedia, 24 fol) of which the parties to international economic contracts make use frequently. As a consequence, the further connecting factors like the right of the seller's country and, having the same result, the right to characteristic performance are diminished in their practical significance.

Important arbitration rules, like those thought for ad hoc arbitration courts, e.g. the UNCITRAL arbitration rules (Article 33, paragraph 1) or the ECE arbitration rules (Article 38) or even those for international arbitral tribunals (ICC Rules of Conciliation and Arbitration, Publication of the International Chamber of Commerce No. 447, Paris 1987, Article 13, paragraph 3), while giving absolute priority to the choice of law by the parties, in the absence of it concede to the arbitrators the right to decide for themselves which are to be the decisive conflict-of-law rules and thus which is the substantive law.

The main cases to which this rule could apply will be those where the parties have chosen the law of one Contracting State, if only one or even none of them belongs to a Contracting State, and where because of the conflict-of-law rules of one Contracting State that State's own law is applied to a contract in which at least one of the parties is from a non-contracting State.

      [6.3] This rule may also place an obligation on courts and arbitral tribunals in non-contracting States to apply the Convention if they invoke the law of a Contracting State on the basis of the conflict-of-law rules that are decisive for them (see also Siehr, 610, fol). That State, in acceding to the Convention, has expressed that the provisions of the Convention are the decisive norms of its law in regard to international sales contracts. Since foreign law is to apply in the same way as in the State where it is in force, foreign arbitral institutions have to accept that decision. Concerning modifications in the context of a reservation (note 6.4.) compare Article 95, notes 1 and 2. [page 30]

      [6.4] At the diplomatic conference the FRG voiced reservations against this rule, inter alia, because according to the decisive private international law the conclusion and the content of the contract could be connected differently (O.R., 236 fol). Huber (423) declared a special way of connecting the formation of a contract as incompatible with the meaning of Article 1, paragraph 1, subpara. (b). This is incomprehensible since even a participation in the Convention can be limited to the conclusion of a contract or to the purchase of goods. We could well imagine the Convention to be applied only to the extent to which the decisive private international law refers to it: e.g. only in regard to the formation of the contract (there we are in agreement with the Norwegian delegate; O.R. 237).

Czechoslovakia and the former GDR, referring to their special legislation concerning international economic contracts, were in favour of deleting this rule (O.R., 237 fol).

Such interest in having the rule deleted was finally taken into consideration insofar as Article 95 provides for a reservation in respect of Article 1, paragraph 1, subpara. (b).

[7] [Article 1(1)(b) reservation; undisclosed principal or agent]

      [7.1] [in respect of Art. 1(1)(b)] In that case the Convention does not apply for either party Loewe/Doralt, 14). This rule is to prevent that a party who, because of the facts known to him believed the contract to be a domestic one, all of a sudden is confronted with the fact that it is an international contract to which the CISG applies.

      [7.1] [undisclosed principal or agent] Under the common law view, one of the essential applications of this paragraph is the case of agency of an i.e. indirectly acting as an agent which under continental European law is expressed through the legal institute of the commission (Secretariat's Commentary, O.R., 15; Honnold, 78; but also Jayme/BB, 31). A condition for this situation is that the applicability of the CISG in the case of a sales contract between an agent and a third party is derived from the status of the principal and the third party and, therefore, does not apply if the foreign capacity of the principal in the sense of the rule is not obvious to the third party. This is certainly true of the common law and may also be true in respect of the Member States of the Agency Convention which in Article 2, paragraph 2, provides for indirectly acting as an agent. Continental European laws would in this case regularly assume that the sales contract between the agent and the third party is valid and judge by their status whether the CISG is the applicable law.

[8] [nationality of parties or other criteria irrelevant]

Hence, what matters is the place of business (Article 10). In the case of legal persons neither the nationality of the actual owner nor the law on which they are based, nor other criteria are relevant. [page 31]

[9] [civil or commercial character of the contract irrelevant]

The notion of international sales contract had to be freed from the possible influence of different national differentiation which already, in regard to the scope of application, could prevent the uniform application of law. The criteria cited can only be examples by which it is to be generally expressed that the term "international sales contract" can only be interpreted on the basis of the Convention. The latter, however, gives a differentiation which is comparable to some of the national rules that have been rejected (Article 2, subpara. (a) and note 2 to that Article).

This Convention does not apply to sales [1]:

(a) of goods bought for personal, family or household use [2], unless the seller, at any time before or at the conclusion of the contract, neither knew or ought to have known that the goods were bought for any such use [3];
(b) by auction [4];
(c) on execution or otherwise by authority of laws [5];
(d) of stocks, shares, investment securities, negotiable instruments or money [6];
(e) of ships, vessels, hovercraft or aircraft [7];
(f) of electricity [8].

[WORDS AND PHRASES, CONCEPTS