Go to Database Directory || Go to Bibliography || Go to Entire Lookofsky Text
Published in J. Herbots editor / R. Blanpain general editor, International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192. Reproduced with permission of the publisher Kluwer Law International, The Hague.

[For more current case annotated texts by this author, see Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed. (2003) and Lookofsky, Understanding the CISG in the USA, 2d ed. (2004).]

excerpt from

The 1980 United Nations Convention on Contracts
for the International Sale of Goods

Joseph Lookofsky

Article 9
Commercial Custom and Usage

A. Express Agreement and Inter Partes Course of Dealing
B. Implied Incorporation of Commercial Usage

87. By virtue of CISG Article 9, commercial custom and usage become part of the international contract of sale. Article 9 provides as follows:

'1. The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.

2. The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.'[page 57]

A. Express Agreement and Inter Partes Course of Dealing

88. The first part of Paragraph 1 covers the seemingly rare situation where the parties have actually agreed to be bound by a given trade usage; indeed, virtually any agreement between the parties (including, of course, an express contractual provision) takes precedence over the otherwise applicable CISG supplementary rule.[1]

In addition, Paragraph 1 also regulates a more commercially significant group of cases where the parties have established a practice between themselves.[2]

1. Compare the decision of Oberster Gerichtshof, Austria, 6 February 1996, No. 100b 518/95, [reported at <http://www.cisg.law.pace.edu/cisg/text/casecit.html> and] UNILEX (buyer had no knowledge of seller's intent to conclude contract on seller's standard terms). Regarding Article 6, see supra No. 70 et seq.
2. This corresponds to what the American Uniform Commercial Code §2-205(1) calls a 'course of dealing'. The similarity between the UCC and CISG concepts is highlighed in the opinion of the U.S. District Court in Calzaturificio Claudia S.n.c. v. Olivieri Footwear Ltd., WESTLAW 16482 (S.D.N.Y 1998), also reported in UNILEX: citing CISG Article 9(1), the court held that delivery ex works did not amount to a 'course of dealing' since seller failed to submit sufficient evidence with regard to similar terms in other transactions with buyer.

B. Implied Incorporation of Commercial Usage

89. Paragraph 2 of Article 9 lays down the requirements for the implied incorporation of a given usage in the particular international trade. To be applicable, the usage must be one which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.[1]

1. See, e.g., the decision of Gerechtshof's Hertogenbosch (Netherlands), 24 April 1996 (No. 456/95/He, reported in UNILEX), holding that the buyer, an experienced businessman in the trade concerned, could not have been unaware of the widespread use of standard terms referred to by seller in its confirmation of buyer's order, nor of specific provisions on interest, which were not of such a character that buyer could not have expected them.

90. An international custom which fulfils the Article 9 criteria takes precedence over the Convention's supplementary rules, i.e., both the contract formation rules of Part II as well as the gap-filling rights and obligations as defined in Part III. Thus, whether a buyer who fails initially to discover a non-conformity can later allege breach may well depend on an established practice between the parties or a (well known) trade usage regarding the nature of a buyer's duty to inspect within the area of trade concerned (caveat emptor).[1] Trade usage may also affect, e.g. an international seller's right to claim interest for late payment at the rate specified in standard business terms.[2]

1. Regarding Article 35 see infra No. 161 et seq.
2. See, e.g., the decision of Gerechtshof's Hertogenbosch (Netherlands), 24 April 1996, No. 456/95/He, reported in UNILEX. [page 58]

Pace Law School Institute of International Commercial Law - Last updated April 1, 2005
Go to Database Directory || Go to Bibliography
Comments/Contributions