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Reproduced with permission of 22 Journal of Law and Commerce (Spring 2003) 57-75

The Relationship Between International Uniform Contract Law Conventions

Franco Ferrari [*]

I.     Introduction

II.    The Problem of Coordination

III.   The Formal Relationship Between Conventions

IV.   A Constructive View of the Relationship Between the Vienna Sales Convention
        and the UNIDROIT Factoring Convention

V.    Systematic Interpretation of International Uniform Contract Law Conventions

VI.   Domestic Concepts and Autonomous Concepts: "Party," "Private International Law,"
        "Place of Business," "Closest Relationship to the Contract" and "Habitual Residence"

VII.  The Concepts of "Sale," "Goods" and "Personal, Household and Domestic Use"

VIII. Existing and Future International Uniform Contract Law Conventions

I. Introduction

Although the trend to create a body of law designed to "transcend national borders in order to maximize the utilization of resources"[1] can be dated back to the late 19th century,[2] when, however, it resulted mainly in the drafting of private international law conventions, n3 efforts towards the unification of substantive law are particularly associated with the latter half of the 20th century.[4] This comes as no surprise, given that the globalization of most national economies, which has resulted in a dramatic increase in [page 57] international commerce [5] and in the need for a corresponding legislative policy designed to regulate -- for the sake of legal certainty -- business transactions linked to a plurality of legal systems,[6] has occurred mainly in the last fifty years.[7]

The aforementioned unification efforts have led -- among others [8] -- to a large number of substantive law conventions, which have been appreciated by both practitioners and legal writers, since they appear to reduce the impact of national boundaries,[9] still considered the chief impediment to the development of international trade.[10] The advantages of these (substantive law) conventions have often been pointed out.[11] Suffice it here to mention the one advantage to which legal writers seem to refer most often,[12] the avoidance of "unnecessarily high transaction [] costs."[13] There are, of course, other advantages to the drafting and entry into force of such conventions,[14] but this does not mean that there are no disadvantages. One such disadvantage is that they increase the number of sources of law that must be taken into account by [page 58] the courts.[15] In this respect, the Italian situation relating to factoring law is emblematic. Since the UNIDROIT Convention on International Factorings came into force in Italy on 1 May 1999,[16] three different sets of rules may theoretically be applicable to a factoring contract concluded between two parties both of whom have their place of business in Italy:[17]

1) The rules laid down in Articles 1260 et seq. of the Italian Civil Code,

2) The rules laid down in a 1991 statute specifically designed to govern factoring transactions, [18] and

3) The rules set forth in the aforementioned UNIDROIT Convention which, given the definition of internationality upon which it is based,[19] can be applicable to factoring contracts entered into by parties (assignor and factor) who have their place of business in Italy (as long as the debtor does not have its place of business in Italy as well).[20]

This paper does not, however, purport to examine the advantages or disadvantages relating to the existence of international uniform contract law conventions as such; rather, it intends to focus on the consequences of the existence of the large number of conventions in the area of contract law.

II. The Problem of Coordination

The most important problem -- and the only one dealt with in this paper -- posed by the large number of conventions in the area of contract law is that of coordination. At first sight (and in the light of what has been said in respect to Italian factoring law),[21] this may appear obvious, since the coming into force of any international uniform contract law convention creates [page 59] a problem of coordination. This is due to the fact that no convention wishes "to identify itself with any legal system,"[22] since that would have a negative impact on its chances of entering into force in many States; rather, "it wants to conjugate with all."[23]

Although it is certainly true that the coming into force of any convention creates problems of coordination, as pointed out by legal writers on numerous occasions,[24] one must distinguish between the problem of coordination generated by each single convention and that generated by the existence of a large number of conventions in one specific area of the law (such as contract law). Whereas the former concerns the relationship between any one international uniform contract law convention and domestic law, the latter refers to the relationships between the various international uniform law conventions (independently from their relationships to domestic law).

The problems surrounding the relationship between international uniform contract law conventions and domestic law are due, one the one hand, to the fact that the former are not self-exhaustive.[25] No single convention comprehensively covers all the issues which may arise in relation to the specific contract it deals with,[26] which is one reason why we will never be able to do without domestic law [27] (or private international law, for that matter).[28] Unfortunately, the conventions do not always indicate clearly which issues they govern and which they do not.[29] In this respect, suffice it to recall the dispute relating to the interest rate payable on sums in arrears, in cases where the Vienna Sales Convention is applicable.[3] According to many legal writers, the issue is to be considered as one falling outside the substantive sphere of application of the Vienna Sales Convention and therefore left to the applicable [page 60] domestic law;[31] other legal writers, however, hold that the issue is governed by (albeit not expressly solved in) the convention, which is why they prefer to settle it by recourse to the convention's general principles,[32] such as that of full compensation.[33] Similarly, the issue of the burden of proof not having been clearly dealt with in the Vienna Sales Convention has led to a dispute opposing those authors (and courts) who consider the issue as being governed by the convention and those who hold that the issue falls outside the convention's scope.[34]

On the other hand, problems arise because the drafters of conventions use terminology which in domestic law has a specific meaning. How do the (domestic and uniform) terminologies relate to each other in these cases? This is an issue which the drafters of the most recent international uniform contract law conventions have addressed. According to Article 7(1) of the Vienna Sales Convention, Article 4(1) of the UNIDROIT Convention on International Factoring and Article 6(1) of the UNIDROIT Convention on International Leasing, these conventions are to be interpreted in an autonomous manner;[35] [page 61] in construing them one should, in other words, not resort to the meaning generally attached to certain expressions within the ambit of a particular legal system,[36] unless the legislative history shows that that was the drafters' intention. That this is a potential source of problems seems self-evident, given our natural tendency to resort to what we know best.

III. The Formal Relationship Between Conventions

The problem of coordination addressed in this paper is not that which is intrinsic to international uniform contract law conventions as such, but derives rather from the large number of such conventions. The fundamental question is: how do these conventions relate to each other?

The drafters of some of the more recent international uniform contract law conventions were well aware of at least one of the problems caused by the large number of conventions, i.e. the possibility of different conventions being applicable to one and the same contract.[37] This is why some of these conventions contain provisions designed specifically to deal with this conflict of conventions.[38] Examples are Article 90 of the Vienna Sales Convention, Article 17 of the UNIDROIT Convention on International Leasing and Article 15 of the UNIDROIT Convention on International Factoring, all of which state that "this convention does not prevail over any international agreement which has already been or may be entered into," thus limiting the conventions' applicability [39] by displacing them in favour of other international agreements concerning matters governed by the conventions.[40] Thus, it can be stated that the aforementioned provisions deal generously with the conflict of conventions. Most recently, the authors of the UNCITRAL draft Convention on Assignment in Receivables Financing [41] initially adopted a more aggressive [page 62] approach to the conflict with other conventions: According to former draft Article 33, the future convention would prevail over any international convention or other multilateral or bilateral agreement which had been or might be entered into.[42] Fortunately, during the last session of the UNCITRAL Working Group on International Contract Practices, the provision was redrafted so that the future convention would not necessarily prevail over other conventions.[43]

It does not fall within the scope of this paper to discuss which approach is preferable. It is enough to say that -- for the sake of certainty of law -- adoption of either solution is to be preferred to silence on the part of the drafters.

What happens, however, when the conflicting conventions both contain a rule on the basis of which they "do not prevail" over other conventions? Although this is not an issue with respect to the aforementioned international uniform contract law conventions, given their different substantive spheres of application,[44] it should be noted that, in that event, general treaty law would be applicable; this means that preference should be given to the more specific convention, a solution also to be resorted to where there is a conflict between conventions none of which includes any conflict of conventions rule.

The conflict of conventions is probably the first issue to spring to mind when contemplating the consequences of the elaboration (and coming into force) of large numbers of international uniform conventions in the area of contract law. In my opinion, however, the question of the relationship between these conventions should not be confined to the antagonism arising out of the need to identify the convention which is applicable in concreto to a particular contract. There is another more positive and constructive way of looking at the large number of conventions in existence, one which it is submitted might even be instrumental to the achievement of uniformity as such and, consequently, to the goals behind the elaboration of each single convention. [page 63]

IV. A Constructive View of the Relationship Between the Vienna Sales Convention and the UNIDROIT Factoring Convention

The fact that both during the elaboration [45] and in the course of the discussion [46] of the UNIDROIT Convention on International Factoring the close link between it and the Vienna Sales Convention [47] was repeatedly referred to is evidence that the relationship between different international uniform contract law conventions can go beyond the antagonism referred to earlier.[48]

In the specific case of the Vienna Sales Convention and the UNIDROIT Factoring Convention, the former served as a model for the latter.[49] According to at least one author, the relationship goes even further, considering that he refers to the Factoring Convention as "the son of the Vienna Sales Convention."[50] This (very close) relationship should not be disregarded when dealing with the Factoring Convention since it can be rather useful.

At this point, a concrete example of the aforementioned inter-connectedness may be helpful. The Factoring Convention, of course, applies solely to "international" factoring contracts.[51] However, its internationality is not -- as one might think -- defined in relation to the factoring contract itself.[52] Unlike the Vienna Sales Convention, pursuant to which the internationality of the contracts falling within its sphere of application is based upon the parties to the contract governed by the convention having their places of business in different states,[53] the Factoring Convention does not [54] define [page 64] internationality on the basis of a subjective element,[55] that is to say, on the basis of where the parties to the (factoring) contract (i.e., factor and supplier) have their places of business. Thus, even factoring contracts concluded between parties having their places of business in one and the same state can be subject to the convention de quo,[56] provided that the "internationality" requirement as well as all the other requirements are met.

Under the Factoring Convention, the internationality of a factoring contract depends upon an objective rather than a subjective element.[57] By virtue of Article 2(1), a factoring contract is international when the receivables assigned arise from an "international" contract of sale of goods, i.e., a contract of sale between the supplier and a debtor whose places of business are in different states [58] (or if they arise from an "international" contract for the supply of services, i.e., a contract for the supply of services the parties to which have their places of business in different states). Consequently, the convention's applicability depends not so much upon the "internationality" of the factoring contract as upon the "internationality" of the receivables.[59]

From what has just been said, it is apparent that the Vienna Sales Convention and the Factoring Convention have some elements in common.[60] [page 65] Indeed, in order to be applicable, both conventions require an "international" contract for the sale of goods,[61] the "internationality" of which is defined in the same way by both.[62] This seems to lead to the conclusion that whenever the assigned receivables arise from a contract governed by the Vienna Sales Convention, the Factoring Convention's internationality criterion is met.[63] Given today's experience with the Vienna Sales Convention, this conclusion could without any doubt facilitate the application of the Factoring Convention. Whether this (apparently obvious) conclusion is correct depends, however, on whether the Factoring Convention's concepts of "sale," "goods" and "place of business" can be considered identical to those of the Vienna Sales Convention. If not, the aforementioned conclusion would be in error.

V. Systematic Interpretation of International Uniform Contract Law Conventions

For any discussion of the large numbers of international uniform contract law conventions to be constructive, an affirmative answer to the foregoing question is as paramount as it is in respect of the question as to whether the possibility of considering the concepts of one convention, such as "sale," "goods," "party," "place of business," etc., identical to their counterparts referred to in another convention should always be admitted, i.e., whether this possibility goes beyond its admissibility in relation to the Vienna Sales Convention and the Factoring Convention (which cannot be doubted given the close relationship referred to earlier).[64]

This (systematic) approach would have the advantage of limiting the autonomous concepts which must be dealt with simply by obviating the need to create different autonomous concepts for each convention.[65] For example, we would only need to deal with one concept of "place of business" (apart, obviously, from the domestic concept); we would not have to create as many different concepts of "place of business" as there are international uniform [page 66] contract law conventions. The same applies to such concepts as "sale," "goods," etc., at least where the conventions themselves do not offer a different definition.

As for the admissibility of this approach, its justification lies, on the one hand, in the different conventions having the same goal and, on the other hand, in the existence of identical rules of interpretation for each convention.

As far as the first element is concerned, it is superfluous to state that -- as stated in the respective Preambles -- the goal pursued by the different international uniform contract law conventions is the promotion of international commerce through the creation of uniform substantive law texts. If the assumption behind this statement is correct, then the creation of a body of concepts to be used uniformly in interpreting the different conventions leads to even greater benefits; indeed, this would be the first step towards the creation of a single uniform contract law, i.e. a uniform law transcending the partial one created by the various (very specific) conventions. Whether this approach can be used with regard to private international law conventions or to procedural law conventions as well must be doubted, since the goals of these conventions are -- at least in part -- different. Some of the concepts employed in these conventions, such as of that "place of business," may have to be interpreted if not differently, then at least more restrictively, since an extensive interpretation may shed doubts as to the applicable law and/or the jurisdiction.

As mentioned, the approach suggested can also be justified on the ground of the conventions having (basically) identical rules of interpretation,[66] namely Article 7(1) (Vienna Sales Convention), Article 4(1) (Factoring Convention), Article 6(1) (Leasing Convention), which themselves allow -- in my opinion -- for the systematic approach here suggested.[67]

What has been said thus far evidences that this systematic approach is not only admissible, but indeed useful -- on the one hand, in promoting understanding of each convention and, on the other hand, in creating a degree of uniformity which goes beyond the oft-criticised partial uniformity in which the various conventions result. [page 67]

Such a systematic approach would be most valuable if it were to lead to the elaboration of (a body of) autonomous concepts, a kind of international vocabulary to be used, on the one hand, in interpreting the different international uniform contract law conventions and, on the other hand, in the elaboration of future conventions. For this to come about, however, we must determine what concepts need to be interpreted autonomously, since despite the wording of the provisions on interpretation to be found in the different conventions,[68] some concepts are not subject to "autonomous" interpretation."[69]

VI. Domestic Concepts and Autonomous Concepts: "Party," "Private International Law," "Place of Business," "Closest Relationship to the Contract" and "Habitual Residence"

Legal writers have often pointed out that despite the provision requiring that the conventions be interpreted autonomously, the concept of "party" referred to in international uniform contract law conventions is not an autonomous one;[70] rather, it is up to the applicable law (to be determined by means of the private international law of the forum) to determine who is party to a contract where, for instance, an agent or a commission agent are involved in its conclusion. Thus, the concept of "party" is a domestic one, although it "may seem to be [] inappropriate."[71]

What has been said with respect to the concept of "party" is true for that of "private international law" as well: [72] It is a concept to be construed in the light of domestic law, unless otherwise expressly provided for.[73] In other words, the different international uniform contract law conventions do not create an autonomous concept of "private international law" different from that of the forum. Thus, judges must decide on the basis of the domestic [page 68] conflict of laws rules whether, for instance, to acknowledge choice of law as a connecting factor and to take renvoi into consideration.

After having identified some of the concepts which cannot be part of the body of concepts the creation of which has been suggested, it may be appropriate to start identifying some that can (and should).

One such concept is that of "place of business," referred to in the different conventions for different purposes, such as that of determining internationality.[74] As a general rule,[75] it can be asserted that there is a place of business where there is a stable business organization [76] or, as stated by the German Supreme Court when dealing with the 1964 Hague Conventions, where "the centre of the business activity directed to the participation in commerce" is located,[77] which links the contracting party to the state where the business is conducted,[78] as long as the party has autonomous power.[79] That autonomous power is an element which characterizes the concept of place of business is evidenced by the fact that a recent arbitral award considered a sales contract concluded between a Chinese seller and an Austrian buyer as being international, despite the fact that the buyer had conducted the negotiations partially through its liaison office located in China: [80] a liaison office, as was also pointed out by an even more recent French Supreme Court decision [81] confirming a decision of the Cour d'appel [page 69] de Paris, [82] should not be regarded as a "place of business," since it has no distinct autonomous power. From the other element characterizing the concept de quo, i.e. the stability requirement, it follows that places of temporary sojourn cannot be considered "places of business."[83] This is why conference centres, [84] hotels [85] or rented offices at exhibitions [86] do not qualify as places of business.[87]

Another such concept is that of the place of business "which has the closest relationship to the contract and its performance,"[88] a concept which is relevant where one party has more than one place of business. How, however, should this "closest relationship" be determined? The answer to this question must always be the same, in order to conform to the aforementioned approach. Fortunately, the different conventions dealt with here all refer to the circumstances known to or contemplated by the parties at any time before (or contemporaneous to) the conclusion of the contract [89] as elements to be taken into account when determining the "closest relationship." From this wording it may be deduced that circumstances which become apparent only after the contract is concluded may not be taken into consideration.[90] Thus, it does not matter whether the places of business change after the conclusion of the [page 70] contract.[91] Where the foregoing circumstances are insufficient unequivocally to determine the relevant place of business, the "closest relationship" must be determined by resorting to the places of business involved in the conclusion of the contract,[92] since these will always be known to both parties.[93] However, where the parties know that the contract is performed at a place of business different from the one involved in the conclusion of the contract, the texts of the articles referred to [94] suggest that the relevant place of business be the one where performance takes place.[95]

Another concept to be considered part of the body of autonomous concepts the creation of which is here suggested is that of "habitual residence."[96] The Vienna Sales Convention refers to this as the element to be taken into account where the parties do not have a "place of business";[97] it [page 71] may be defined as the real place of sojourn for a long period of time.[98] Whether, however, there is a "real" place of sojourn depends upon the facts.[99]

VII. The Concepts of "Sale," "Goods" and "Personal, Household and Domestic Use"

The concept of "sale" as well should be part of the body of autonomous concepts the creation of which is here suggested. Although it is referred to by several of the aforementioned conventions,[100] it is nowhere expressly defined, not even in the Vienna Sales Convention.[101] Notwithstanding this lack of express definition, its contents may be determined by resorting, on the one hand, to the rights and obligations of the parties as they may be derived from the Vienna Sales Convention [102] and, on the other hand, to "the economic function of exchange which constitutes a valid reference in order to unify without contrasts the concept of sale, as opposed to other contractual schemes."[103] Thus, independently from the civil or commercial character of the parties or of the contract itself,[104] the sales contract can be defined as the contract by virtue of which the seller has to deliver the goods, hand over any documents relating to them and transfer the property in the goods, whereas the buyer is bound to pay the price of the goods and take delivery of them.[105] In [page 72] defining the sales contract one must, however, take into account all the provisions of the Vienna Sales Convention which help to define the autonomous concept of "sale," such as Article 3, which compares certain kinds of contract to sales contracts.[106] Indeed, the autonomous concept should be determined taking into consideration all the contracts governed by the Vienna Sales Convention, otherwise the purpose of the systematic approach would be defeated. Thus, contracts for the supply of goods to be manufactured or produced are -- within the limits provided for by Article 3(1) of the Vienna Sales Convention -- as much "sale contracts" as contracts that include the supply of labour or other services amongst the seller's obligations, to the extent that these obligations do not constitute the preponderant part of these obligations.[107] The exclusion of certain types of sale contract from the sphere of application of the Vienna Sales Convention [108] is, however, irrelevant for the autonomous definition: this exclusion does not touch upon the concept of "sale."

The concept of "goods" is one which should also be included in the list of the autonomous concepts to be used in creating the aforementioned "vocabulary." Like that of "sale," it is often referred to in the conventions,[109] but it is not defined, not even in the Vienna Sales Convention or its predecessors, the 1964 Hague Conventions. That is not to say that no autonomous concept can be elaborated. Indeed, commentators of the Vienna Sales Convention -- as well as courts applying it [110] -- have done so: "goods" in the sense of the Vienna Sales Convention -- but this was true under the 1964 Hague Conventions as well [111] -- are movable goods -- including, as recently stated by several courts, livestock, [112] -- which are corporeal, [113] independently [page 73] of the form (liquid, solid, etc.) they take.[114] Consequently, immovable property or intangible goods,[115] such as industrial property rights [116] or shares in a limited liability company,[117] are not to be considered goods in the sense of the Vienna Sales Convention nor, consequently, in the sense of the Factoring Convention and the Leasing Convention.

Another concept, used in all the conventions referred to in this paper, is that of "personal, family and household use" or "purpose."[118] This concept must be understood so as to limit the convention's substantive sphere of application to commercial contracts [119] in order to avoid a conflict between the various conventions and domestic consumer protection laws.[120] Thus, where the use (in the case of the Vienna Sales Convention) or the purpose (in the cases of the Factoring and the Leasing Conventions) are neither commercial, industrial nor professional, the conventions are not to be applied. The concept merely indicates a relationship to consumer contracts. This idea must be considered as being common to all the international uniform contract law conventions referred to in this paper. How the relationship to consumer contracts is characterised in concreto is left to each single convention. The Vienna Sales Convention, for instance, ultimately refers to contracts where the buyer is a consumer; under the Factoring Convention, on the other hand, the consumer purpose is related to the receivables. [page 74]

VIII. Existing and Future International Uniform Contract Law Conventions

In this author's opinion, the value of the approach here suggested is not limited to existing conventions. On the contrary, the approach would even be more helpful in respect of the elaboration of future conventions. If consolidated concepts were to be used -- as opposed to creating new ones -- there would be fewer problems of coordination between the different conventions. Not only that, but their interpretation and application would be easier, since it would be possible to resort to solutions adopted in the interpretation and application of conventions already in existence.

Although such an approach will not solve all the potential issues which may arise, it is nevertheless a first step in the right direction.


FOOTNOTES

* Professor of International Law, Verona University, School of Law, former Legal Officer, United Nations Office of Legal Affairs, International Trade Law Branch.

1. D. Memmo, Il contratto di vendita internazionale nel diritto uniforme, Riv. trim. dir. proc. civ. 181 (1983).

2. See P.H. Pfund, Overview of the Codification Process, 15 Brook. J. Int'l L. 7 (1989). The fact that the codification process is over 100 years old is evidenced among others by the fact that the Hague Conference on Private International Law celebrated the centenary of its first session in 1993. For a discussion of the Conference's efforts towards the unification of private international law, see K. Lipstein, One Hundred Years of Hague Conferences on Private International Law, 42 Int'l & Comp. L.Q. 553 (1993); P.H. Pfund, The Hague Conference Celebrates its 100th Anniversary, 28 Tex. Int'l L.J. 531 (1993); H. Schack, Hundert Jahre Haager Konferenz für IPR, in RabelsZ 224 (1993).

3. See R. David, The International Unification of Private Law, 2/5 Intl. Encyc. Comp. L. 73 (1972).

4. See U. Blaurock, Übernationales Recht des internationalen Handels, ZEuP 252 (1993); A. Kaczorowska, International Trade Conventions and Their Effectiveness. Present and Future 1 (1995).

5. See S. Perloff, The Ties That Bind: The Limits of Autonomy and Uniformity in International Commercial Arbitration, 13 U. Pa. J. Int'l Bus. L. 323, 323-24 (1992).

6. See S. Carbone & M. Lopez de Gonzalo, Commento all'Articolo 1 della Convenzione di Vienna, Nuove Leggi 2 (1989); M.A. Glendon et al., Comparative Legal Systems in a Nutshell 23 (1982).

7. U. Blaurock, The Law of Transnational Commerce, The Unification of International Commercial Law, Tilburg Lectures 14 (F. Ferrari ed., 1998).

8. See David, supra note 3, at 37. For comments on the advantages of substantive law Conventions over private international law Conventions. This paper deals only with international uniform contract law Conventions; private international law Conventions are not addressed.

9. See R. Goode, Reflections on the Harmonisation of Commercial Law, Commercial Law and Consumer Law: Nat'l & Int'l Dimensions 3 (R. Cranston & R. Goode eds., 1993); see also P. Sarcevic, Foreword, Int'l Contracts and Conflicts of Laws VII (P. Sarcevic ed., 1990).

10. See, e.g., J.E. Joseph, Contract Formation under the United Nations Convention on Contracts for the International Sale of Goods and the Uniform Commercial Code, 3 Dick. J. Int'l L. 107 (1984) (stating that "[o]ne of the greatest impediments to the development of international trade is the plethora of national laws"). See also M. Kabik, Through the Looking-Glass: International Trade in the "Wonderland" of the United Nations Convention on Contracts for the International Sale of Goods, 9 Int'l Tax & Bus. Law 409 (1992) (stating that "[i]nternational trade has been hindered by a myriad of distinct domestic laws").

11. See J. Kropholler, Internationales Einheitsrecht 95 (1975). For a brief discussion of the advantages and disadvantages of international uniform substantive law Conventions.

12. See P. Winship, Domesticating International Commercial Law: Revising the U.C.C. in the Light of the United Nations Sales Convention, 37 Loy. L. Rev. 43, 47 (1991).

13. J. Wool, Rethinking the Notion of Uniformity in the Drafting of International Commercial Law: A Preliminary Proposal for the Development of a Policy-Based Unification Model, Unif. L. Rev. 47 (1997).

1. See Kropholler, supra note 11, at 94 (for a description of the advantages of international uniform contract law Conventions).

15. See F. Ferrari, Il factoring internazionale 7-8 (1999) (with reference to the UNIDROIT Convention on International Factoring); U. Magnus, Wiener UN-Kaufrecht (CISG) 33 (1999) (referring to the CISG); M. Torsello, I rapporti tra le parti del contratto di factoring tra disciplina uniforme e molteplicita delle fonti, Contratto e impresa 539 (1999) (referring to the UNIDROIT Convention on International Factoring).

16. An updated list of Contracting States, available at <http://www.UNIDROIT.org/english/implement/i-main.htm>.

17. See Ferrari, supra note 15, at 8; G. Tucci, Factoring, 1 I contratti del commercio, dell'industria e del mercato finanziario 527 (F. Galgano ed., 1995).

18. See G. Cian, Disciplina delle cessione dei crediti di impresa. Commento, Nuove Leggi 245 (1994). For comments on the statute referred to in the text.

19. See F. Ferrari, Der internationale Anwendungsbereich des Ottawa- Übereinkommens von 1988 über internationales Factoring, 183 et seq. RIW (1996) (a detailed discussion of the UNIDROIT Convention's concept of internationality); Ch. H usler, Die Neuregelung der internationalen Forderungsfinanzierung durch das UNIDROIT- Übereinkommen über internationales Factoring, Factoring Handbuch 271 (K.F. Hagenmüller et al. eds., 1998).

20. See Ferrari, supra note 15, at 61.

21. See generally supra note 17.

22. G. Benedetti, Commento all'Articolo 4 della Convenzione di Vienna, Nuove Leggi 9 (1989) (in respect of the Vienna Sales Convention).

23. Id.

24. See N. Boschiero, Il coordinamento delle norme in materia di vendita internazionale (1990) (An exhaustive study of the problems of coordination arising out of the entry into force of different international Conventions in the area of sales law.).

25. See Kropholler, supra note 11, at 170.

26. See H. Kötz, Rechtsvereinheitlichung-Nutzen, Kosten, Methoden, Ziele, RabelsZ 3 (1986).

27. See also Ferrari, supra note 15, at 12.

28. See U. Magnus, EGBGB Arts. Staudingers Komm. 3, 27-37 (1998).

29. Some Conventions are, however, clear about the exclusion of at least some matters from their substantive sphere of application. See, e.g., Art. 5 CISG (which states that it "does not apply to the liability of the seller for death or personal injury caused by the goods to any person"). See D. Kuhlen, Produkthaftung im internationalen Kaufrecht (1997) (for comments on this provision).

30. See F. Ferrari, Le taux d'intérêt applicable au montant des arriérés dans la jurisprudence concernant la CVIM, Rev. dr. aff. int. 86 et seq. (1999).

31. See R. Loewe, Internationales Kaufrecht. Wiener UN-Kaufrechtsübereinkommen vom 11. April 1980 und New Yorker Un-Verjährungsübereinkommen vom 14. Juni 1974 samt Protokoll vom 11. April 1980 mit ausführlichen Erläuterungen sowie Vergleichen und Hinweisen zum österreichischem Recht 95 (1989); U. Magnus, Währungsfragen im Einheitlichen Kaufrecht. Zugleich ein Beitrag zu seiner Lückenfüllung und Auslegung, RabelsZ 140-141 (1989); B. Piltz, Internationales Kaufrecht. Das UN-Kaufrecht (Wiener Übereinkommen von 1980) praxisorientierter Darstellung 280 (1993); P. Schlechtriem, Recent Developments in International Sales Law, Israel L. R. 324 (1983); R.H. Weber, Vertragsverletzungsfolgen: Schadenersatz, Rückabwicklung, vertragliche Gestaltungsmöglichkeiten, Wiener Kaufrecht. Der schweizerische Aussenhandel unter dem UN-Übereinkommen ber den internationalen Warenkauf 208 (E. Bucher ed., 1991).

32. See K. Neumayer, Offene Fragen zur Anwendung des Abkommens der Vereinten Nationen über den internationalen Warenkauf, RIW 106 (1994).

33. See Internationales Schiedsgericht der gewerblichen Wirtschaft in Österreich, Arbitral awards n.4318 and n.4366, RIW 590 (1995) (case law applying the full compensation principle to solve the issue of determining the rate of interest).

34. See, e.g., C. Antweiler, Beweislastverteilung im UN-Kaufrecht (1995); M. Henninger, Die Frage der Beweislast im Rahmen des UN-Kaufrechts: zugleich eine rechtsvergleichende Grundlagenstudie zur Beweislast (1995); A. Imberg, Die Verteilung der Beweislast beim Gefahrübergang nach UN-Kaufrecht (1996); R. Jung, Die Beweislastverteilung im UN-Kaufrecht (1996); B. Reimers-Zocher, Beweislastfragen im Haager und Wiener Kaufrecht (1995) (discussing the issue of the burden of proof).

35. See B. Audit, La vente internationale de marchandises 47 (1990); F. Diederich, Maintaining Uniformity in International Uniform via Autonomous Interpretation: Software Contracts and the CISG, 8 Pace Int'l L. Rev. 303 et seq. (1996); F. Ferrari, International Sale of Goods. Applicability and Applications of the United Nations Convention on Contracts for the International Sale of Goods 12 (1999); Ferrari, supra note 15, at 107 et seq. (in respect of the Factoring Convention).

36. See John O. Honnold, Uniform Law for International Sales under the United Nations Convention 88 (3d ed. 1999).

37. See Ferrari, supra note 15, at 368.

38. See F. Majoros, Konflikte zwischen Staatsverträgen auf dem Gebiete des Privatrechts, RabelsZ 84 (1982); 1 F. Majoros, Les Conventions internationales en matière de droit privé 2 et seq. (1976); Majoros, Les Conventions internationales en matière de droit privé (1980); P. Volken, Konventionskonflikte im internationalen Privatrecht (1977); Wilting, Vertragskonkurrenz im Völkerrecht (1994) (papers on conflicts of Conventions).

39. See Ferrari, supra note 15, at 369.

40. See M. Evans, Article 90, Commentary on the International Sales Law, The 1980 Vienna Sales Convention 636 (C.M. Bianca & M.J. Bonell eds., 1987) (in relation to the Vienna Sales Convention); R. Herber, Article 90, Commentary on the UN Convention on the International Sale of Goods (CISG) 689 (P. Schlechtriem ed., 1998).

41. See UNCITRAL document A/CN.9/WG.II/WP.104 (1999).

42. See UNCITRAL document, supra note 41, at 42.

43. See Report of the Working Group on International Contract Practices on the Work of Its Thirty-First Session, U.N. Doc. A/CN.9/466 (1999).

44. See B. Czerwenka, Rechtsanwendungsprobleme Im Internationalen Kaufrecht 146 (1988); M. Karollus, Der Anwendungsbereich des UN-Kaufrechts im Überblick, Jus 380 (1993).

45. See Explanatory Report on the Draft Convention on International Factoring prepared by the UNIDROIT Secretariat, in 1 Diplomatic Conference for the Adoption of the Draft UNIDROIT Conventions on International Factoring and International Financial Leasing. Acts and Proceedings 88-89 (1991).

46. See J. Basedow, Internationales Factoring Zwischen Kollisionsrecht und UNIDROIT-Konvention, ZeuP 629 (1997).

47. Apart from the author quoted supra note 46, see also G. De Nova, Il Progetto UNIDROIT Sul Factoring Internazionale, Dir. com. int. 716 (1987).

48. See text following supra note 44.

49. Ferrari, supra note 15, at 15.

50. De Nova, supra note 47, at 716.

51. See F. Ferrari, La Sphère Internationale D'application de la Convention d'Ottawa de 1988 Sur L'affacturage International, Rev. dr. aff. int. 897 et seq. (1999).

52. This has been pointed out, among others, by B. Rebmann, Das UNIDROIT- Übereinkommen über Das Internationale Factoring, Rabelsz 603 (1989).

53. For a discussion of the internationality of contracts governed by the CISG, see, among others, F. Ferrari, L'ambito di applicazione della convenzione di Vienna sulla vendita internazionale di beni mobili, Riv. trim. civ. 907 et seq. (1994); K. Siehr, Der internationale Anwendungsbereich des UN-Kaufrecht, RabelsZ 590-591 (1988).

54. On the occasion of the 1988 Ottawa Diplomatic Conference, only the representative of the Hague Conference on Private International Law criticized the Convention's definition of "internationality" and suggested that it be defined on the basis of a subjective element comparable to that of the CISG; for this piece of information, see Rebmann, supra note 52, at 605.

55. The internationality criterion mentioned in the text has been labelled "subjective" by several authors (albeit not with reference to the Factoring Convention); see, e.g., L. Reczei, The Area of Operation of the International Sales Convention, 29 Am. J. Comp. L. 517 (1981); G. Sacerdoti, I criteri di applicazione della Convenzione di Vienna sulla vendita internazionale 734 (1990).

56. For this conclusion, see also F. Ferrari, L'ambito di applicazione internazionale della Convenzione di Ottawa sul "factoring" internazionale, Riv. trim. dir. proc. civ. 203 (1996).

57. Ferrari, supra note 51, at 899.

58. See Gargiulo/Giancoli, La cessione del credito sotto la lente UNIDROIT, Com. int. 1303 (1993); F. Munari, Il Factoring Internazionale Nella Convenzione UNIDROIT, Dir. com. int. 460 (1989).

59. For this conclusion, see B. Diehl-Leistner, Internationales Factoring. eine rechtsvergleichende Darstellung Zum Recht Der Bundesrepublik Deutschland, Frankreichs Und Der USA Unter Einschluss Der UNIDROIT-Konvention Über Das internationale Factoring 127 (1992); Ferrari, supra note 56, at 203; R. Monaco, La convenzione internazionale per i contratti di factoring, Bancaria 13 (1989); W.C. Philbrick, The Use of Factoring in International Commercial Transactions and the Need for Legal Certainty as Applied to Factoring Transactions between the United States and Japan, 99 Com. L. J. 155 (1994); K. Siehr, Unificazione internazionale del diritto dei contratti innominati, Dir. comm. internaz. 98 (1988); A. Zaccaria, Internationales Factoring nach Inkrafttreten der Konvention von Ottawa, IPRax 281 (1995).

60. See E. Calzolaio, Il factoring in Europa 134 n.26 (1997).

61. Note, however, that the Ottawa Convention can be applicable even where the receivables arise from an international contract different from a sales contract, as already pointed out in the text.

62. Indeed, both the CISG and the 1988 Ottawa Convention require that the parties to the sales contract have their places of business in different States; see Ferrari, supra note 15, at 64.

63. For this conclusion, see Ferrari, supra note 56, at 205.

64. See text accompanying note 47.

65. It may be appropriate to point out that the suggestion made in the text should operate independently from the question of whether the international uniform contract law Conventions are drafted by one and the same agency or body; contra F. Diedrich, Autonome Auslegung von internationalem Einheitsrecht 69 (1994).

66. It may be useful to point out that although both Art. 4 Factoring Convention and Art. 5 Leasing Convention are based upon Art. 7 Vienna Sales Convention, they differ from it in that they refer to the Preamble as an element to be taken into account in the interpretation; this difference is, however, merely a terminological one, not one of substance; with regard to this issue, see, e.g., Ferrari, supra note 15, at 23.

67. For a more limited use of the systematic interpretation, see Diedrich, supra note 65, at 69.

68. See text accompanying note 67.

69. For this conclusion, see also F. Ferrari, La Jurisprudence sur la CVIM: un nouveau défi pour les interprètes?, Rev. dr. aff. int. 497 (1998).

70. See, in relation to the Vienna Sales Convention, F. Ferrari, Article 1, in Kommentar zum Einheitlichen UN-Kaufrecht (P. Schlechtriem ed., 2000); in respect of the Factoring Convention, see Ferrari, supra note 15, at 67.

71. R. Herber, Article 1, in Commentary on the UN Convention on the International Sale of Goods (CISG) 25 (P. Schlechtriem ed., 1998).

72. For a more detailed discussion of this issue, see F. Ferrari, Der Begriff des 'Internationalen Privatrechts' nach Artikel 1 Abs. 1 lit. b) des UN-Kaufrechts, ZEuP 162 et seq. (1998).

73. See Ferrari, supra note 69, at 497 et seq.

74. For a reference -- in respect of the CISG -- to the importance of the concept mentioned in the text, see Kaczorowska, supra note 4, at 228 (stating that the concept of "place of business" is "the center of the CISG").

75. At this point it may be appropriate to point out that there is no general abstract definition: the "place of business" has to be defined on a case-by-case basis; for this, see G.A. Ferretti, Commento all'Articolo 10 della Convenzione di Vienna, Nuove Leggi 43 (1989) (in respect of the Vienna Sales Convention); Ferrari, supra note 15, at 70 (in respect of the Factoring Convention).

76. For a reference to the stability requirement, see, e.g., K. Bell, The Sphere of Application of the Vienna Convention on Contracts for the International Sale of Goods, 8 Pace Int'l L. Rev. 245 (1996); Carbone & Lopez de Gonzalo, supra note 6, at 5; Czerwenka, supra note 44, at 131 et seq.; P. Schlechtriem, Uniform Sales Law. The UN Convention on Contracts for the International Sale of Goods 42 (1986) stating that it can be assumed that the place of business is an establishment of some duration and with certain authorized powers.

77. BGH, 02-06-82, NJW 2731 (1982).

78. See, for this criterion F. Ferrari, La vendita internazionale. Applicabilità ed applicazioni della Convenzione di Vienna 44 (1997); Ferretti, supra note 75, at 43.

79. See also Carbone & Lopez de Gonzalo, supra note 6, at 5, arguing that even though it is necessary for there to be autonomous power, it is doubtful whether that power must relate to the possibility of concluding the contract or whether it is sufficient that it relate to the possibility of conducting the bargaining. For an author favouring the former solution, see G. Reinhart, UN-Kaufrecht 38 (1991).

80. See ICC Court of Arbitration, Arbitral Award Nr. 7531, 6 ICC ICArb. Bull. (1995) 67-68.

81. See Cour de Cassation, 04-01-95, Rec. Dalloz 289 (1995).

82. See Cour d'Appel de Paris, 22-04-92, published as an appendix in C. Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale 134 et seq. (1995).

83. For this conclusion, see also Honnold, supra note 36, at 33, stating that the concept of "place of business" "[. . .] as used in Article 1, should be construed to mean a permanent and regular place of transacting of general business, and would not include a temporary place of sojourn during ad hoc negotiations."

84. For this conclusion, see also Siehr, supra note 53, at 590 n.1.

85. See Ferrari, supra note 78, at 45.

86. See A. Rosett, Critical Reflections on the United Nations Convention on Contracts for the International Sale of Goods, 45 Ohio St. L.J. 279 (1984) stating that in order to be able to consider a place as being a "place of business," "[n]either having a hotel room or a rented office in a city nor engaging in sales transactions on repeated occasions in the nation appear to suffice."

87. For a basically similar statement, see Honnold, supra note 36, at 132, arguing that "[t]he term 'place of business' in the official French text is établissement and in the official Spanish text is establecimiento -- words that seem to be inconsistent with a temporary stopping place."

88. See Art. 10(a) Vienna Sales Convention, Art. 2(2) International Factoring Convention, Art. 3(2) International Leasing Convention.

89. See also F. Enderlein et al., Internationales Kaufrecht 74 (1991) (in respect of the Vienna Sales Convention); Ferrari, supra note 15, at 73 (in respect of the International Factoring Convention).

90. See also Ferretti, supra note 75, at 44, stating that "Article 10 does not provide for an initial time limit fixing the period of time in which the elements to be taken into account may become apparent; it provides, instead, for a deadline after the expiration of which no new elements can be considered. By doing so, [Article 10(a)] clarifies that those elements must have influenced the formation of the contract." For similar statements, see also Reinhart, supra note 79, at 38.

91. See for this conclusion, United Nations Conference on Contracts for the International Sale of Goods, Official Records: Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committees 19 (Vienna, 10 March-11 April 1980) (United Nations ed., 1981): "If it was contemplated that the seller would perform the contract at his place of business in State A, a determination that his "place of business" under Article 10(a) was in State A would not be altered by his subsequent decision to perform the contract at his place of business in State B."

92. For this solution, see also F. Enderlein & D. Maskow, International Sales Law 72 (1992); Ferrari, supra note 78, at 51; D. Martiny, Kommentar zum UN-Kaufrecht, in 7 Münchener Kommentar zum Bürgerlichen Gesetzbuch 1658 (H.-J. Sonnenberger ed., 1989); Piltz, supra note 31, at 39. Contra, suggesting that recourse be had to the place of business where the performance takes place, G. Herrmann, Anwendbarkeit des Einheitskaufrechts auf Vertrag mit Zweigniederlassung (Art. 1 Abs. 1 EKG), IPRax 214 (1983).

93. For this conclusion, see Ferrari, supra note 35, at 51.

94. See supra note 88.

95. For this conclusion, see Ferrari, supra note 35, at 52 (in respect of the Vienna Sales Convention); Ferrari, supra note 15, at 74 (in respect of the Factoring Convention).

96. The concept of "habitual residence" has often been used in private international Conventions as well; for a list of such Conventions, see, e.g., J. Rajski, Article 10, in Commentary on the International Sales Law. The 1980 Vienna Sales Convention, supra note 40, at 118 (stating that the "concept of habitual residence is used in a number of other international Conventions [. . .]. The concept of "habitual residence" was adopted in the Hague Convention on Civil Procedure of 14-11-1896. It has been introduced subsequently at a number of international Conventions in various domains of private international law, to complement or supplant the traditional connecting factor of domicile [. . .]. The essential reason for its success is attributable largely to the difficulties in any attempt to define a general concept of domicile, which varies greatly in the law of different States"). For a discussion of the concept de quo in private international law, see F.A. Mann, Der "gewöhnliche Aufenthalt" im internationalen Privatrecht, JZ 466 et seq. (1956).

97. See Art. 10(b) Vienna Sales Convention.

98. For this definition of habitual residence, see, in relation to the Vienna Sales Convention, Enderlein & Maskow, supra note 92, at 72; Ferretti, supra note 75, at 44; R. Herber & B. Czerwenka, Internationales Kaufrecht 64 (1991); Piltz, supra note 31, at 39-40.

99. It has often been pointed out that the concept of "habitual residence" relates to a situation of fact; see, e.g., Rajski, supra note 96, at 118; Reinhart, supra note 79, at 38.

100. See, apart form the provisions of the Vienna Sales Convention, Arts. 1(2)(a), 1(3), 2(1), 2(1)(b), 3(1)(b), 6(2), 6(3), 7, 8(1)(c), 9(1), 10(1), 18 and 21 International Factoring Convention.

101. Cf. Ferrari, supra note 35, at 91; P.H. Kahn, Convention de Vienne du 11 avril 1980. Caractères et domaine d'application, DPCI 387 (1989); C. Samson, La Convention des Nations Unies sur les contrats de vente internationale de marchandises, Cah. de dr. 927 (1982).

102. For this conclusion, see also Enderlein & Maskow, supra note 92, at 27; A.H. Kritzer, Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods 69 (1989).

103. Memmo, supra note 1, at 189; P. Bernardini, La compravendita internazionale, in Rapporti contrattuali nel diritto internazionale 85 (G. Mirabelli et al. eds., 1991).

104. See Art. 1(3) CISG: "Neither the nationality of the parties nor the civil or commercial character of the parties or the contract is to be taken into consideration in determining the application of this Convention."

105. For a very similar definition also based on Arts. 30 and 53, see M. Endler & J. Daub, Internationale Software überlassung und UN-Kaufrecht, Computer und Recht 601 (1993); Ferrari, supra note 78, at 94; Herber & Czerwenka, supra note 98, at 16; A. Lanciotti, Norme uniformi di conflitto e materiali nella disciplina convenzionale della compravendita 120 (1992); Piltz, supra note 31, at 23.

106. For a detailed discussion of this issue, see Ferrari, supra note 35, at 101 et seq.

107. Id. at 109 et seq.

108. See Art. 2 CISG.

109. See, apart from the many provisions of the Vienna Sales Convention which refer to it, Arts. 1(2)(a), 1(3), 2(1), 2(1)(b), 3(1)(b), 6(2), 6(3), 7, 8(1)(c), 9(1), 10(1), 10(2)(b), 18 and 21 International Factoring Convention.

110. See, most recently, Trib. Pavia, 29-12-99, Corr. giur. (2000); OLG Köln, 26-08-94, NJW Rechtsprechungs-Report 246 (1995).

111. For this conclusion, see Ferrari, supra note 35, at 114; for a detailed discussion of the concept de quo under the 1964 Hague Conventions, see R. Herber, Article 1, in Kommentar zum Einheitlichen Kaufrecht 9 (H. D lle ed., 1976).

112. See Hof Arnhem, 22-08-95, UNILEX (applying the Vienna Sales Convention to a contract for the sale of live lambs between a German seller and a Dutch buyer).

113. See, in case law, Trib. Pavia, supra note 110; in legal writing, Bernardini, supra note 103, at 85 (stating that "goods" in the sense of the CISG are only "corporeal moveable goods"); Enderlein et al., supra note 89, at 42 (stating the same); Endler & Daub, supra note 105, at 602 (stating the same); H. Hoyer, Der Anwendungsbereich des UNCITRAL-Einheitskaufrechts, Wirtschaftsrechtliche Bl tter 71 (1988) (stating the same); Samson, supra note 101, at 927.

114. Thus, it is not surprising that a recent Austrian Supreme Court decision (see OGH, 06-02-96, RW 203 et seq. (1996)) stated that the sale of propane gas was covered by the Vienna Sales Convention.

115. For this conclusion, see B. Piltz, UN-Kaufrecht, in Handbuch des Kaufvertragsrechts in den EG-Staaten einschliesslich Österreich, Schweiz und UN-Kaufrecht 10 (F. Graf von Westphalen ed., 1993).

116. See also Enderlein & Maskow, supra note 92, at 29. See also Honnold, supra note 36, at 101, asserting that "[the] conclusion that 'goods' refers to tangible, corporeal things means that sales of patent rights, copyrights, trademarks [. . .] are not governed by the Convention."

117. See Hungarian Chamber of Commerce Court of Arbitration, 20-12-93, UNILEX.

118. See Art. 2(a) Vienna Sales Convention; Art. 1(2)(a) International Factoring Convention; Art. 1(4) International Financial Leasing Convention.

119. Ferrari, supra note 35, at 124.

120. See M.T. Murphy, United Nations Convention on Contracts for the International Sale of Goods: Creating Uniformity on International Sales Law, 12 Fordham Int'l L. J. 746 (1989) (in respect of the Vienna Sales Convention).


Pace Law School Institute of International Commercial Law - Last updated February 17, 2004
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