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Reproduced with permission of the author

Survey regarding the relevance of the United Nations
Convention for the International Sale of Goods (CISG)
in legal practice and the exclusion of its application

Martin F. Koehler
October 2006

  1. Reason for the Survey
  2. Focus Group
  3. Frequency and Method of Exclusion
  4. Reasons for Exclusion
    1. Practical Viewpoints
    2. Legal Viewpoint
      1. Summary
      2. Respondents Commentaries
    3. Weighting of Practical and Legal Considerations
  5. Modification of the CISG
  6. Consequences of Hindsight
  7. Assessment
  8. Conclusion

I. REASON FOR THE SURVEY

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a unified sales law currently in force in over 60 countries of the world, including -- with the exception of the United Kingdom and Japan -- all important industrialized nations.[1] The CISG has thereby advanced to the most widespread of international conventions in the field of substantive law. Both in comparison to the preceding conventions, The Hague Conventions of 1964, one relating to a Uniform Law on the International Sale of Goods (ULIS) and the other relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods (ULFC), which were ratified by only 9 countries,[2] and to other attempts at legal unification in the field of International Sales Law,[3] the CISG -- certainly as far as the number of signatories is concerned -- has registered the most success.

The CISG is extremely significant, in particular for export oriented contracting states such as Germany: According to rough calculations, the CISG is applicable in approximately two thirds of German imports and an even larger share of German exports.[4] With the exception of the United Kingdom, Germany's ten most important trading partners are all signatories to the CISG. For this reason, the Convention is relevant even if only with respect to trade with these countries (Art. 1(1)(a) CISG). Trade with the USA for instance -- as Germany's third most important import, and second most important export, partner -- ranges at around 105,067 million and comprises (at a volume of foreign trade totaling 1,310,831.80 million ) more than 8% of German trade.[5]

And yet, even after more than 20 years since the commencement of the CISG in 1988,[6] its application is still often excluded; in spite of the fact that in the academic world -- in practical as in many legal aspects -- the belief in the advantages of the uniform law has increasingly prevailed [7] and the CISG has repeatedly been enlisted as a model for legislative projects or amendments to national sales law.[8]

The investigation of the to date to a large extent unexplored reasons for such an exclusion forms the core objective of a survey which was conducted from October 2004 until September 2005 in conjunction with a doctorial dissertation of the author and the results of which shall be presented here. The survey was conducted on behalf of the Seminar for Foreign Private Law and Conflict of Laws led by Prof. Ulrich Magnus and in cooperation with the United Nations Commission on International Trade Law (UNCITRAL). In order to arrive at comparable conclusions, the investigation took place in Germany and the USA, the latter with the kind support of Prof. Alejandro M. Garro, head of the Research Group for Foreign and Comparative Law, Law School of Columbia University (New York). The author is also indebted to Prof. Albert H. Kritzer, Pace University School of Law, N.Y., for his helpful suggestions in regard to the subject matter of this article and for the review of its final translation.

II. FOCUS GROUP

The survey is aimed at practicing jurists and was sent to lawyers and in-house jurists. The questionnaire was distributed both directly and published via various discussion forums (the American "UCCL Law Discussion List" and the German "Forum of Young Attorneys") and via e-mail distribution (those of the International Transaction Committee of the American Bar Association and the International Legal Affairs Committee of the Association of Corporate Counsel). That in this way, in the USA alone, very likely more than 3,000 practitioners were addressed, and yet only somewhat over 50 questionnaires were returned, can be seen as an early indication of the acceptance of the CISG. All the same, the following analysis could be reached based on the 81 completed questionnaires (hereafter referred to as the "respondents") -- 48 from the USA and 33 from Germany. Of these 49 were returned by law firms, 22 by company lawyers and 2 by the legal departments of public institutions; 8 respondents supplied no information regarding their status.

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Only 4% of the respondents indicated never having had any contact with the CISG. [Question 1]. 69.7% of the Germans had contact with the CISG in their day to day work; whereas in the USA it amounted to only 29.2%. A further 58.2% of the American practitioners knew of the CISG only from hearsay, from their studies, from literature or from colleagues, whereas this answer was supplied by only 27.3% in Germany.

43.2% of the respondents from both countries indicated that at least half of the business transactions dealt with by them had something to do with international sales contracts. (This applied for 30.9% in the minority of cases, for 23.5% only in occasional cases) [Question 2]. This assessment was comparable in both countries.[9]

Only five respondents had no knowledge of the field of application of the CISG (USA: 4 / Germany: 1) [Question 2]. It should not however be understood from this that the majority of the respondents were necessarily experts in CISG, as nearly two-thirds indicated that only a small number of the contracts dealt with by them, or individual cases fell within the scope of the CISG

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III. FREQUENCY AND METHOD OF EXCLUSION

Only 8 of 81 respondents (9.9%) answered that they never excluded the application of the CISG [Question 4]. In contrast, 71.6% excluded the CISG principally or preponderantly (USA: 70.8% / Germany: 72.7%).

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To the question regarding the favored method of exclusion of the CISG [Question 5], more than half of all respondents (55.6%) answered that they mostly explicitly excluded the applicability of the CISG in their individual contracts. A further 22.2% inserted an explicit exclusion of the applicability into the general terms and conditions of their contracts with the result that a total of 77.8% preferred an explicit exclusion. Implicit exclusion plays therefore in practice only a minor role: 4.9% settled for an implicit exclusion through the selection of the national law of a non-signatory state and 3.7% through choice of forum.[10] Only 2.5% of the respondents indicated an exclusion of the CISG through other methods.

IV. REASONS FOR EXCLUSION

With respect to the possible reasons for an exclusion of the CISG, the respondents were initially questioned regarding their practical considerations and were then asked for their legal deliberations. The respondents could thereby choose from a list of possible answers and could also submit additional criteria and comments.

1. Practical Viewpoints

With regard to the practical reasons for exclusion [Question 6], by far the most often selected answer was "because the CISG is generally not very widely known." This reason was submitted by more than half of all respondents (53.1%).

A further reason for exclusion which was likewise fairly often submitted -- by every third respondent -- (38.3%) was that "there was no need for application" or that no "advantage was seen in the application of the uniform law" (35.8%).

Every fourth respondent stated as a reason for excluding the CISG that their business partners or the business partners of their respective clients could not be dissuaded from the application of national law (32.1%) because they or their companies had insufficient experience with the application of the CISG (28.4%) or because their company or the client, due to a leading position in the market, had the power to retain the application of its national law (25.9%).

Marked differences between the USA and Germany are noticeable only in so far as every third American practitioner (33.3%) indicated that he excluded the CISG because of insufficient case-law to date, whereas in Germany this answer was seldom submitted (6.1%).

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The particular importance of the degree of familiarity of the CISG is also made obvious by the fact that the respondents often repeated or underlined these points in their individual additional comments. Remarks regarding the practical reasons for an exclusion such as that "one thinks one knows the national law better" or the saying "you can't teach an old dog new tricks" enable one to see that it is not so much a matter of a general degree of recognition as it is of the individual lack of familiarity with the uniform law. Any references to a close connection to legal training or to a willingness to partake in post-university further education are few and far between (only once is it stated: "lawyers are generally trained in, and thus more comfortable with, their national law and would have a steep learning curve to buy into the CISG"). Most comments refer in the first place to "uncertainty/ ignorance among jurists in dealing with the CISG [...]" or thereto that in the case of the application of the CISG, because of their lack of knowledge thereof the "legal consequences can't be evaluated" by the respondents. A minor role is given in the comments regarding the practical reasons for exclusion to the fear that the rules of the uniform law will be unknown to the judge.

Incidentally, several American practitioners presume that the uncertainty of their jurists in dealing with the CISG concerns not only the regulations themselves, but also the relevant legal system. Because the CISG tends more to follow the principles of Civil Law than those of Common Law (i.e., law which is only to a small extent codified and to a large extent based on common or case-law), it deviates from the Uniform Commercial Code and thereby from the legal sources with which American practitioners are generally acquainted. In this connection, it must further be pointed out that dealing with foreign judgments is also considered to be unusual. The reason for this lies not only in the language difficulties but also in the differing structure of American judgments and the unusual opinions in Common Law legal circles.

It is in fact evident that lawyers as a rule, because of their preference for the application of national law, hardly put the option of the application of Uniform Law to their clients, let alone explicitly suggest it. Indeed, this presumption is confirmed by the statement of a respondent, who candidly admits: "Our preference is to attempt to have the business partner agree to apply U.S. law", although he indicates in the practical reasons for exclusion merely that he sees no practical advantages in the applicability of the CISG, and further that he considers neither national law nor the CISG legally advantageous. A similar impression is created with respect to the behavior towards contracting partners. Of those who declared that they were unable to convince the contracting partner of the applicability of the CISG, approximately every fourth (25.8%) indicated at the same time, as a reason for exclusion, that his company or his client's company, owing to its position in the market, was able to insist on retaining the application of national law. From this, it can be surmised that it is often simply assumed that the contracting partner would dissent to the application of the CISG, as particularly a company with a leading position in the market place should be capable of convincing a contracting partner of the application of a certain law.

A further practical example given for exclusion was that through the choice of national law the difficulties because of the designation of the applicable law via the rules of conflict of laws could be avoided. For whenever a choice of law is lacking and only one of the contracting partners is domiciled in a CISG signatory state, the applicability of the Art. 1(1)(b) CISG is dependant on the, often difficult to answer, question, whether the rules of Private International Law (PIL) of the forum lead to the application of the law of a signatory state. It must however be noted here that, in my opinion, this is not an argument in favor of exclusion, but merely a good reason for a definite choice of law. For, on the one hand, the CISG can be chosen as the applicable law (opting-in), whereby the reference to the PIL within the operation of Art. 1(1)(b) CISG becomes gratuitous. On the other hand, in the case of an exclusion of the Convention -- without a choice of any other law -- recourse to the rules of PIL becomes necessary in order to determine which law should be applied instead of the uniform law.

Finally, one of the respondents argued that the CISG is advantageous to developing countries. Reference to the differing strength of participation of industrial and developing countries is already known from the Hague Convention on the International Sale of Goods. With respect to The Hague Convention, the lack of participation of developing countries and any consequences for the text of the Convention resulting there from was often referred to.[11] With regard to the CISG, in the inception of which, indeed, more developing countries participated, it could not however be proved to-date that this new uniform law is more in favor of developing countries; especially as the CISG is, in essence, based on the previous convention, which was accused of just the opposite.[12]

Another interesting argument is that General Terms and Conditions of Contracts should be drawn up uniformly and without variations for domestic and foreign business deals, wherefore in this area -- if necessary through a choice of uniform law -- the application of the same non-uniform law is advisable. The idea is not so much the desire to dictate the conditions or the choice of a certain national law as an endeavor to rationalize work processes. On the other hand, another respondent argued that, both with respect to the general drafting of contracts and to the consideration or drafting of General Conditions, the inclusion of the CISG is particularly to be recommended because it is a "neutral" law. What is meant by this is that both parties to a contract of sale have a similar association with this law, or that neither party enjoys a closer relationship to his national law, so that in this way neither party is at a disadvantage. This respondent did however make the point that clients from his practice, which was often enough involved in matters regarding international sales law, were often only counseled in the case of a dispute and not at the stage of drafting the contracts, so that very often the question of the application of the uniform law, which he generally recommends, was moot.

2. Legal Viewpoint

With a view to any legal considerations regarding an exclusion, the respondents were asked whether, in their opinion, the CISG had legal advantages for their company or clients [Question 7]. The respondents were also asked to state their individual reasons for their answers.

a. Summary

Only 6 of 81 respondents (7.4%) stated that in their opinion the CISG is legally advantageous. On this point -- i.e., that the CISG is only occasionally considered a legal advantage over the respective national (non-uniform) law -- the American and German jurists were largely unanimous (for the CISG was considered legally advantageous by only 8.3% of American and 6.1% of German respondents).

Apart from this, however, considerable differences between the national groups regarding the legal considerations have come to light: The number of jurists in the USA who consider the national law an advantage (35.4%) is approximately the same as the number of those who see an advantage in neither the one law nor in the other (39.6%). In Germany, however, only every fifth (21.2%) considers the national law advantageous, while the considerable majority -- nearly two-thirds of the respondents (namely 72.7%) -- view neither of the legal systems as legally superior.

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Against the background of knowledge gained here, this national comparison might tempt one to accuse the German practitioner of a certain ignorance or indolence: precisely as in the USA, the majority of respondents in Germany have decided to modify the primarily applicable CISG. Yet in Germany such decisions are made despite the fact that, from a legal point of view, most German jurists consider neither the uniform nor the non-uniform law advantageous. Thus a large number of German jurists decide in favor of actively rejecting the primarily applicable law -- i.e., the legal "norm" without being convinced of the legal advantages of another law. Whether this contradiction is insoluble will, however, depend on the weight given below to the legal considerations as opposed to the practical reasons for exclusion.

b. Respondents' Commentaries

The respondents only occasionally specified the reasons for the indicated legal advantages or disadvantages of the CISG.[13] Although it was often indicated that whether the one law or the other was legally advantageous differed from case-to-case, the respondents' answers did not make clear whether the relevant non-uniform law was considered favorable to the buyer or to the seller. In as such, this question remains unanswered here.[14] At all events, the insight gained from the survey that the majority of the German respondents considers neither of the laws advantageous is inasmuch conclusive as that the modernization of the Law of Obligations effective as of 1 January 2002 is, in large part, oriented on the CISG and that the German Civil Code is accordingly, to a large extent, now more similar to the CISG.[15] [16] The respondents themselves pointed out several times and quite explicitly that the, from a legal viewpoint, existing differences had been minimized by the modernization of the Law of Obligations. (The similarity of German Law to the CISG was even occasionally registered by American lawyers as an advantage of the CISG over the UCC; e.g., reference was made to the "familiarity of German clients with the German legal system and the closeness of CISG to that system as opposed to the US system".) In the opinion of one respondent, it is often misjudged, that the modeling of the new German Civil Code on the tenets of the CISG means that, from a German point of view, the CISG represents a better alternative to the acceptance of a foreign law. This is particularly valid when the foreign law is that of a country in which it is difficult to attain access to the legal system.

Yet, even although the respondents did not elaborate on individual legal systems and the existing differences between laws, the following definitive observation can be made: The decision reached by the majority of the respondents to the effect that the CISG is not more advantageous, at least legally, than the non-uniform law contradicts the opinion prevailing in the literature. The literature rates the unifying of Sales Law as predominantly advantageous and refers thereby too to general advantages -- i.e., the resulting legal advantages for both parties, such as the uniform text available in official translations (in six languages), the uniform standards of interpretation, a balanced distribution of risk and the creation of legal security or equality in competition, and the resulting reduced incentive for forum-shopping.[17] Consequently, only isolated comments by the respondents lead to the conclusion that the unifying process undertaken by the CISG is itself valued as a legal advantage: Thus the "unified approach" is both indicated as a general advantage of the CISG and commented on with respect to more particular passages: "Regarding inbound work, it is valuable crossing cultures, e.g., mirror-image offer and acceptance." It is further considered an advantage of the CISG that "increased legal security regarding [...] the immediate applicability by the national judge as opposed to possible difficulties in determining foreign legal norms" prevails. That the advantage of an "authoritative translation" meant that a contracting party could "read the legal elements of the contract in his language or have them explained to him by a lawyer from his own country" was mentioned or highlighted in only two cases.

A point seized on, however, was the lucidity or clarity of the CISG which is often praised in literature: The CISG is considered "simpler and more comprehensible than the new German Civil Code" by the group of German jurists. And even the American respondents consider the CISG "transparent". However, the CISG is just as often criticized for its apparent indefinite legal terminology or provisions. Thus, several German jurists consider the provisions of the German Civil Code to be "more clearly defined". Even more American respondents are of the opinion that the provisions of the CISG are "too flexible" and therefore "unpredictable", as opposed to the UCC which is "far more specific" and contains "fewer and clearer requirements".

The results thus obtained from the survey, that those effects of the legal unification which are conceived a considerable advantage in the literature, but in fact play a minor role in practice are compatible with a case study conducted more or less simultaneously by Gilles Cuniberti. In this study, 170 decisions from the USA, Germany and France, in which the CISG (initially at least) had been applied, were examined as to whether the parties were aware of the application of the Convention. The results of the study showed that in over 70% of the cases no stipulation regarding the law to be applied had been made. Cuniberti therefore concludes that the parties, as a rule, are not concerned with the law to be applied in the case of any dispute, which on the other hand raises the question whether the uniform law has any purpose.18

An interesting finding is that in many (10%) of the cases the view of the respondents that the national (non-uniform) law is better known was emphatically mentioned as an advantage over the CISG. It is, of course, debatable to what extent the familiarity of a law can be seen as an advantage, although the familiarity or remarks such as "national rules are better known -- to avoid unexpected surprises" can be entered under the heading of legal security. What is crucial about the result, however, is that these statements also emphasize the central role given in practice to familiarity in deciding on the exclusion of the Convention.

Similarly, several American respondents, on the question regarding legal considerations, referred to the importance of comprehensive case law or to an orientation on such, which had also become clear with regard to the practical reasons for exclusion. It was argued that a large number of decisions "interpreting UCC" have led to "greater certainty as to how [the law] will be applied by courts / arbitrators" or that, in comparison to the CISG, the UCC is more "developed by decisional law". Remarkable in this respect, however, is the statement of a German jurist (from an office originating in the USA and operating internationally) that, in his eyes, the CISG provides a "greater legal security to international contracts because of the existing case law in the contracting states." Elsewhere it was pointed out that, within the scope of the CISG, "significant legal problems [...] have, in the interim, been decided by the superior courts."

The legal department of a German company supplied information to the effect that, after the sale of most products, service contracts (in part within the same contract) not subject to the CISG had to be entered into. In such cases, because the application of the CISG would lead to a splitting of the contracts, exclusion of the Convention would be favorable. Derogations and overlaps could only be avoided through commensurate cross references or such. An American firm supplied similar information with respect to business with incorporeals. The CISG has a disadvantage in contracts relating to intellectual property because these rights are to be licensed and not sold and because the necessary licensing documents must be governed by contract provisions that provide meaningful ownership protection and confidentiality standards for the technology. As such provisions are only to be found in non-uniform law, considerations of practicality lead to the result that the seller -- e.g., the technology vendor -- chooses the national non-uniform law which conforms to the corresponding national licensing provisions, also taking into consideration that common law concepts of ownership of this kind of property are different from civil law.[18]

3. Weighting of Practical and Legal Considerations

In order to sound out which of the reasons for exclusion of the Convention given by the respondents could be considered crucial, the respondents were asked whether the answers to the practical reasons or those to the legal advantages were decisive for their choice of exclusion [Question 8].

The majority of the respondents (59.3%) gave as answers to this question that the practical considerations mentioned by them were more relevant for exclusion. Yet when one compares the respondents from both countries, the most noticeable fact is that the legal reasons were considered far less relevant than the practical reasons (in Germany only 9.1% of the respondents considered the legal considerations crucial, in the USA even fewer (6.3%).[19]

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V. MODIFICATION OF THE CISG

The respondents were further asked to indicate whether, in those cases in which they assume the CISG applies and is not entirely excluded, they undertake any modification of the CISG (i.e., exclude, replace or vary any individual provisions or parts thereof) [Question 9].

The majority of the respondents (58.0%) denied undertaking any modifications. The number of those who generally undertook no modifications, was higher in Germany (66.7%) than in the USA (52.1%). In contrast, approximately a quarter of the respondents affirmed modifying the CISG. Thus 17.3% of all respondents indicated, partly modifying the CISG (21.2% in Germany, 14.6% in the USA); merely 9.9% of the respondents undertook a modification in the majority of cases (Germany 9.1%, USA 10.4%).

The results indicate that the American jurists, in so far as they undertake any modifications, do so not only more often but also more regularly in comparison to their German colleagues (of those who undertake modifications, 30% do so in Germany "normally" and 70% "occasionally", whereas in the USA the figures amount to 42% and 58%, respectively).

In cases where the respective respondents indicated modifications, information regarding the focal point thereof was requested (e.g., "changes to the provisions on remedies for breach of contract"). With regard to the questionnaires received from the USA, there was one focal point which was indiscernible.[20] The German respondents indicated several times (in seven cases) modifying the guarantee or liability provisions (this amounted to approximately two-thirds of those who undertook any modifications). From the answers which contained any further specifications could be established that the buyers and sellers were mostly concerned with extending or limiting liability by various ways and means.[21]

VI. CONSEQUENCES OF HINDSIGHT

At the end of the survey, the respondents were asked to indicate in how many cases in which the CISG was not excluded, the application thereof became in retrospect apparent [Question 10] and whether this knowledge had led to a change in their procedures [Question 11].

Close to three-quarters of the respondents indicated that it was never, or only rarely, that it became in retrospect apparent that the Convention was in fact applicable (54.3% answered "never" and 18.5% indicated in "isolated cases"). Merely 1.2% of the respondents answered "in fewer than 50%" of cases. Approximately 10% came to such a conclusion in at least half the cases (3.7% of the respondents in "approximately 50%" and 6.2% in "more than 50%" of the cases).

If one considers the group of respondents who conceded establishing only in retrospect the applicability of the CISG, only two-thirds of them indicated (62.1%) the said cases did in fact lead to a change in their company's procedures or with respect to consultations with their clients. These numbers hardly vary when one compares the respondents from the USA (63.7%) and from Germany (61.6%).

VII. ASSESSMENT

To begin with, it must be made clear, that the familiarity of the CISG with the respondents surveyed cannot be seen as representative of the general familiarity of the Convention. The result that 96.3% of all the respondents had had some kind of contact with the CISG, is due to the fact that the questionnaire was deliberately sent to specialists who were known, or were likely, to regularly have dealings relating to international sales law. The reason for this was to obtain as detailed as possible statements regarding exclusion of the CISG. The respondents are therefore not representative of the broad majority of jurists. Bearing this in mind, it should be neither surprising, nor considered representative that 6.2% of the respondents had no knowledge of the CISG.

As far as the general familiarity with the uniform law is concerned, reference must initially be made to the general analysis by Ulrich Magnus of The Hague Sales Convention as the Convention preceding the CISG. This analysis found that of approximately 48 companies, which were contacted via various Chambers of Industry, roughly half (23 companies) did not know the Hague Sales Convention or -- even without explicit exclusion -- did not consider it applicable.[22] Even recent surveys of special legal consumer groups lead to an assumption of a generally broad lack of knowledge of the applicability of the CISG: In a survey conducted by Michael Wallace Gordon in Florida in 1997 approximately 30% of the respondents indicated having "reasonable knowledge" of the CISG.[23] Although the 124 respondents were specialists, namely members of the Bar Section on International Law, 90% of them were of the opinion that the national sales law of Florida had prior applicability. Not surprising too is the result of a survey undertaken at Practitioner Seminars by a German seminar director, Sven Regula, which found that only 10% of German purchasing and sales personnel had any knowledge of the CISG.[24]

A comparison between the frequency of exclusion, on the one hand, and the frequency with which the respondents came into contact with the CISG, or the regularity with which the cases they dealt with had anything to do with international sales law, on the other hand, was not of any significance. It was not possible to detect a tendency to exclude the CISG more or less often depending on the regularity with which respondents dealt with such cases.

What stands out in the first place, when one considers the practical reasons given by the respondents for exclusion, is that the apparent unfamiliarity of the CISG constitutes by far the main reason for exclusion. The respondents' comments do not imply that those aspects which are seen in the literature as advantages of the uniform law (such as the easier and therefore less costly legal inquiries due to the availability of the CISG in the most important languages) [25] are considered a disadvantage in practice and therefore a reason for exclusion. On the other hand, the advantages underscored in the literature are not considered reason enough to abstain in practice from exclusion. The respondents also do not expound on the lesser legal certainties of the CISG, which are mentioned in other surveys as a potential disadvantage of this law.[26] [27]

The manifest relevance in the USA, compared to the German group of respondents, of the availability of comprehensive case law is basically self-evident in the face of the prevailing legal system there, which is based largely on case law. To raise this argument as a practical reason for exclusion of the CISG does not however appear convincing. In the interim, not only have many international decisions been reached regarding all the fundamental legal issues, which decisions are easily available, free of charge, via internet databases;[28] more importantly, the international case law databases mean that decisions relating to the CISG are available in the various languages of the member states, whereby a typical problem occurring in international contractual relations is reduced; the problem being that -- as long as an agreement regarding jurisdiction is lacking -- a court must determine foreign law or the relative case law -- in a language which is possibly foreign to that court.

Incidentally, neither the comparison of the frequency of exclusion between the USA and Germany, nor the reasons therefore given by the respondents of both countries, indicate that the origins or age of the provisions of the sales laws play any deciding role in the exclusion of application. The remark of a German lawyer, who previously lectured more often, but is today foremost a practitioner, to the effect that countries with mature trade laws are more inclined "to stew in their own juices" poses an interesting theory, but could not be empirically proved.

As to the assessment of the legal advantage of one law or another, a comparison of the results in Germany and the USA show a statistical significance. Both groups consider the CISG only minimally advantageous (Germany 6.1%, USA 8.3%). Yet a significantly larger number of German jurists (72.7%) indicated in comparison to their American colleagues (39.6%) that neither the CISG nor the national law is legally advantageous. A reason for this could be that the non-uniform German sales law -- The German Civil Code -- has, through the reforms to the Law of Obligations, been strongly aligned with the CISG, which fact was pointed out by the respondents several times. When one considers this result, it may seem surprising that a larger number of American practitioners consider the UCC legally advantageous than their German colleagues the German Civil Code, but at the same time the German respondents decided comparatively often in favor of exclusion of the uniform law. The reason for this cannot be that the American respondents compensate for the advantageous provisions of the UCC through legally substantive modifications of the CISG and there are therefore fewer exclusions of the convention in the USA than there otherwise would be. For the American respondents undertake such modifications no more often than their German colleagues. Of particular significance in this respect could however be that, according to the information provided by all respondents, it is only in the rarest of cases that the legal aspects are crucial to the decision in favor of an exclusion of application. This aspect is of particular importance as the responding jurists all, in the case of many even regularly, deal with the CISG, and wherefore they are aware of the legal differences and ought to be able to appraise them accordingly. The fact that this applies to a similar extent for the respondents from both nations should, after all, also be a reason therefore that a larger number of respondents in the USA consider the non-uniform law legally advantageous than is the case in Germany, and yet this legal evaluation does not result in exclusion taking place any less often in Germany. Actions on the part of the German practitioners which at first appear contradictory to the legal considerations are explained by the fact that these legal considerations are of practically no importance.

In the light of a trend towards irrelevance of the legal aspects, on the one hand, and the familiarity, or lack thereof, as the paramount reason for exclusion, on the other hand, it can be surmised that a large number of the respondents have not yet taken the trouble to compare the legal aspects of the two laws in detail. Yet even if one presumes that the jurists, despite the practical aspects which are of foremost importance to them, attach significance to the existing legal differences between the uniform law and the non-uniform national law, the increasingly lively discussion among academics at least in Germany regarding the legal advantages of the uniform law has had little or no effect in practice. For it is a fact that the majority of practitioners see no appreciable legal advantages in either the one or the other law. In particular, in no single case was any reference made to the seller-friendliness of the CISG,[29] which has been very much emphasized by academics since the reform to the Law of Obligations.

With this in mind it is understandable that the respondents undertake no legally material modifications of the provisions of the Convention in the majority of cases (whereby the 22.9% of American respondents who made no answer to the question regarding any modifications, can be counted among those who undertake no modifications). The reason for this is not only to be seen in the fact that modifications are not to be expected when -- as in the majority of cases -- the CISG is excluded anyway. It is rather to be seen in the fact that the legal reasons for exclusion are considered less relevant than the practical reasons and the latter cannot be influenced by a modification of the provisions of the uniform law. When one considers the statements of those respondents who did indicate undertaking modifications, even here, only a small percentage (4.5%) considered the legal aspects crucial. At all events, modifications to the uniform law are not undertaken in order to remove any disadvantages of one or other of the laws. For the majority of those (81.8%) who undertake modifications, are among those who consider neither the CISG nor the non-uniform law advantageous. (Which of course should not mean that modifications are not for instance undertaken to the legal advantage of any particular party and perhaps too after the fashion of non-uniform provisions.)

VIII. CONCLUSION

The central -- although hardly the most surprising -- finding of the empirical survey shows that the overriding reasons for an exclusion of the Convention are practical and the lack of familiarity of the convention provides by far the most important reason for exclusion. The problem of the lack of familiarity with the uniform law as a primary reason for its exclusion lies in the self-generating circulus vitiosus: The familiarity and acceptance of a law arises, in the long term, from its use and the positive experiences arising there from. If a law is not applied the chance is let slip by the practitioners to make use of, or at least experience, the advantages "preached" about the law in the literature, with the result that any incentive to apply the law fails to arise. As a result, the Convention's goal of unifying the law and the literature's much-vaunted advantages of the unified law are the victims of a certain indolence in practice. What appears at first to be a somewhat severe reproach is confirmed by a glance at the final questions of the survey. Even in those cases in which an application of the CISG became in retrospect apparent, only two-thirds of those affected (62.1%) indicated that these cases actually led to any changes in their companies' procedures or with respect to consultations with their clients. The regularly expressed opinion in the literature to the effect that "the devil you know is better than the devil you don't know"[30] has thereby been empirically proved.

It is the academics' job to resolve this divergence between theory and practice.[31] They are faced here with an enormous challenge: when even -- as in the case of the underlying survey -- specialists who deal daily with the CISG, exclude the Convention for reasons of lack of familiarity, the question arises whether, for continuing uniformity, it suffices "simply" to make the CISG familiar. And yet, particularly in Germany, it should be possible for Academia to master this task, as the differences between the CISG and the German non-uniform sales law, in force since the modernization of the Law of Obligations, are fewer than is the case in many other legal systems as for example in the USA.


FOOTNOTES

1. For current ratification standings see the listing at <http://www.uncitral.org>.

2. The Hague Conventions were ratified by Belgium, Gambia, Federal Republic of Germany, Italy, Israel, Luxembourg, the Netherlands, San Marino and the United Kingdom; for the probable reasons for the lack of acceptance of this law cf. Piltz, Internationales Kaufrecht (1993),  1 Rdn. 16; the reason the USA did not ratify these conventions can be seen in the apprehension to abandon the unification of the sales law which was achieved shortly before in the shape of the UCC, cf. v.Caemmerer, AcP 178 (1978), 121, 122.

3. Such as the attempt undertaken in Latin America within the framework of the so-called. "Proyecto de Buenos Aires" to unify the Sales Law, the results of which have never got beyond the stages of a bill.

4. Cf. Van Alstine, 146 University of Pennsylvania Law Review 1998, 687, 689; Piltz, UN-Kaufrecht (2001), note 3.

5. Standing: End of 2004; cf. in this regard the "Rangfolge der Handelspartner im Außenhandel der Bundesrepublik Deutschland" presented by the Federal Statistical Office of Germany for 2004, published on the internet site of the Federal Office under <http://www.destatis.de>.

6. The CISG was adopted on 11 April 1980 in the final ballot of the Vienna Convention and came into effect, with the attainment by the end of 1986 of the first 10 ratification charters, on 1 January 1988 in terms of Art. 99(1) CISG. The Convention has been in effect in the USA since 1 January1988, in Germany since 1 January 1991.

7. Cf. Magnus in Staudinger (2005), Intro. note 38 (in connection with note 6 et seq.); Schlechtriem in Schlechtriem/Schwenzer, Intro. III.; Daniela de Lukowicz, p. 14 et seq.; Mankoswki, RIW 2003, 2, 9 et seq.; "almost too evident" are the reasons for the efforts for the international unification of law, also in the opinion of Bonell in Bianca/Bonell, Introduction p. 3; critical, however, Cuniberti in "Is the CISG benefiting anybody", soon to be published in Vanderbild Journal of Transnational Law.

8. Cf. Magnus in Staudinger (2005), Intro. note 2; de Lukowicz, p. 15 et seq.; Schlechtriem in Schlechtriem/Schwenzer, Intro. III Bem. 4; Meyer, RabelsZ 69 (2005) 457, 460.

9. Although with respect to the USA, it is here conspicuous that of the group which regularly deals with cross border sales, only 29.0% had previously [in Question 1] indicated dealing daily with the CISG. An explanation for this can, however, be that the application of the CISG is dependent on, among other things, whether the respective business partners reside in signatory states, and the Convention is accordingly not applicable to every international contract of sale.

10. With respect to the significance of a forum selection as an implicit exclusion, it must be noted that such an exclusion, in my opinion -- although often accepted in literature as an indication for an exclusion cannot per se be seen as an expression of a definite intention of exclusion; in fact, for such a conclusion, two requirements must be met, as Ferrari in "The Draft UNCITRAL Digest and Beyond", p. 129, has asserted: The forum must not be located in a Contracting state and one must be able to infer from the parties' choice their clear intention to have the domestic law of the State where the forum is located govern their contract."

11. Cf. Piltz, Internationales Kaufrecht (1993),  1 Rdn. 16.

12. In this regard, see Mankowski, RIW 2003, 2, 9.

13. Besides the arguments presented in the main body of the text, the American respondents indicated the following as advantages or disadvantages of the non-uniform national law (UCC):

The German respondents named the following advantages of the German Civil Code / Commercial Code:

14. Cf. in this respect Piltz, IHR 2002, 6 et seq.; Schillo, IHR 2003, 257 et seq.; critical of the latter Regula/Kannowski, IHR 2004, 45 et seq.

15. See too the evaluations by Schillo, IHR 2003, 257, 268, and Regula/Kannowski, IHR 2004, 45; cf. further Magnus in Staudinger (2005), Intro. note 2, who refers to the reasons for the drafting of a modernisation of the Law of Obligations in the concluding report of the Law of Obligations commission (BT-Drucks 14/6040 S. 86), where it is stated, that the concept of the CISG should attract interest in reforming (...) and can serve as a role model for many provisions").

16. For a comparison of the most important legally substantive differences -- existing since or in spite of the Law of Obligations reform-between the German Civil Code and CISG see too Piltz, IHR 2002, 2, 6 et seq. or the synopsis by Magnus in Staudinger (2005), Intro. note 32 et seq.

17. Cf., e.g., Magnus in Staudinger (2005), Intro. note 6; Schlechtriem in Schlechtriem/Schwenzer, Intro., note 7; Corvaglia, p. 125.

18. Similar and extremely interesting -- although not directly included in the results of the survey -- is, incidentally, the contribution from a department of the UN itself. The CISG is excluded by this UN facility, because it is "not exactly" applicable to all types of contracts serviced by it -- such as in the area of IT. It must however be conceded that uniform contracts are desirable, even if not all the many countries which are possible contracting partners are signatory states of the Convention.

19. Here there are certain, although not critical differences: Whereas in the USA exactly half of the respondents declared the practical reasons for exclusion to be relevant and 25% -- i.e., every fourth respondent -- considered the legal and practical reasons for exclusion equally important, in Germany there was noticeably a higher tendency to consider the practical reasons more relevant (72.7% of respondents). Only 15.2% consider the practical and legal considerations of equal importance.

20. Modifications were indicated by the American respondents in the following areas:

21. It was noted, that buyers would attempt to define variations in the contractual specifications as a material breach of contract and to extend the liability for significant deviations, whereas the sellers would attempt to limit liability to a certain pecuniary amount despite an availability guarantee.

22. Cf. Magnus, NJW 1977, 2000, 2002.

23. Gordon, Amer. Journ. of Comp. L., Vol. 46 (1998), 361, 368; taken up in Dodge, "Teaching the CISG in Contracts", available at <http://cisgw3.law.pace.edu/cisg/biblio/dodge.html>.

24. Regula/Kanowski, IHR 2004, 45, footnote 7.

25. Mankowski, RIW 2003, 2, 9 et seqq.; Magnus in Staudinger (2005), Intro. note 6; Schlechtriem in Schelchtriem/Schwenzer, Intro. III.

26. In Meyer's survey, this was the answer most often indicated, RabelsZ 69 (2005), 457, 474.

27. The hypothesis proposed by Cuniberti, that the advantages of the uniform law underscored in the literature are not proved in practice (see footnote 7), is in so far supported by the obvious lack of practical relevance these theoretical advantages have regarding decisions to exclude the Convention; whereby it is of no consequence that Cuniberti investigates the effect of the application of the uniform law on the parties, while this survey concentrates in particular on jurists.

28. The following databases and links ought to be mentioned:

29. As in Erg. Regula/Kannowski, IHR 2004, 45, 53 et seq.; Piltz, IHR 2002, 2, 8; assertively dissenting only Schillo, IHR 2003, 257, 268.

30. See Koch, NJW, NJW 2000, 910; more critically Mankowski regarding the saying "you can't teach an old dog new tricks" already mentioned in the analysis of the survey, RIW 2003, 2, 8.

31. In this respect one can correctly characterize the "Professors' Club" as the client who can best demand or promote legal unification, according to Magnus, Article in Schwenzer, Symposium, p. 25.


Pace Law School Institute of International Commercial Law - Last updated November 3, 2006
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