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Reproduced with permission of 17 Journal of Law and Commerce (1998) 365-379

The Neglect of CISG: A Workable Solution

John E. Murray, Jr. [*]

When the United States and ten other nations ratified the United Nations Convention on Contracts for the International Sale of Goods (CISG), it was quite legitimately characterized as a monumental achievement. As the Convention begins its second decade as the governing law for the sale of goods in a number approaching fifty nation states, one can only be cautiously pessimistic about its future. It has not lived up to the promise that was so cheerfully shared by those of us who gathered at the University of Pittsburgh School of Law for a 1988 symposium to celebrate this achievement. It is not that we were unaware of numerous pitfalls in application or uncritical of its provisions, since academic lawyers can always find something to criticize. Underlying our critical analyses, however, there was great optimism and hope. We were thrilled by the possibilities. Reflecting on the experience under CISG, we now face the reality that it suffers from neglect, as well as ignorance and even fear. Since CISG is unique, we search for successful analogues in an attempt to discover ways and means to realize the vision that was so clear ten years ago.

With regard to commercial transactions, particularly contracts for the sale of goods, it is tempting to view the United States as a laboratory. Fifty independent state legislatures each enacted the Uniform Commercial Code (U.C.C.) with the stated purpose "to make uniform the law among the various jurisdictions."[1] Other "underlying" purposes and policies of the U.C.C. were "(a) to simplify, clarify and modernize the law governing commercial transactions,"[2] and "(b) to permit the continued expansion of commercial practices through custom, usage and agreement of the parties."[3] The policies of the U.C.C. include express permission to vary its provisions by the agreement of the parties except for "the obligations of good faith, diligence, reasonableness and care. . . ."[4] Courts are directed to construe and apply the Code liberally "to promote its underlying purposes and policies."[5]

These purposes and policies have been pursued with remarkable success among fifty separate jurisdictions, as seen particularly in the central Article of the U.C.C., Article 2, which deals with contracts for the sale of goods. We have not seen variations by the parties in large numbers. Only now almost a half century after its appearance, will it be revised. Moreover, proposed revisions suggest anything but a radically new paradigm. Many deal with changes induced by technology to react effectively to "electronic contracting." Only a few sections that have proved troubling are subject to major revision.[6]

If fifty-one independent states can surrender their differences in pursuit of a highly uniform interpretation and construction of a statute governing contracts for the sale of goods, this experience may suggest a highly promising future for the CISG.[7] Any such suggestion, however, at best reveals a simplistic assumption.

From the earliest comparisons of the U.C.C. and CISG, major differences in the challenges to their uniform interpretation and construction have been clear. CISG is recorded in different official and unofficial language versions which, itself, creates a challenge that did not confront U.C.C. drafters and interpreters.[8] Apart from language problems, even before the Convention became operative, the leading American scholar responsible for the success of CISG pointed to the "special hazard" of interpreting a uniform law among a similar number of nation states. Professor John Honnold emphasized "the lack of a common heritage of judicial techniques and substantive law among the Contracting States."[9]

CISG attempts to avoid this hazard by insisting that courts surrender domestic interpretations for autonomous interpretations to promote uniformity, insure good faith and unfold the general principles of the Convention.

Article 7 begins with the directive: "In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade."[10] When a court is instructed to duly regard the "international character" of the Convention, what does that mean? Presumably it means that the court is to transcend its domestic perspective and become a different court that is no longer influenced by the law of its own nation state. As such, it can only be an aspiration. If a judge in Hungary, the United States or any other Contracting State is to see the Convention through an international lens instead of a lifetime domestic lens, we now know that the typical judge may require assistance from an international legal opthamologist.

The worthy goal of uniformity is obvious, but infinitely more difficult to achieve among as many as fifty nation states with divergent legal traditions, than among fifty United States that share the same legal tradition. The observance of "good faith" is another desideratum that rolls off the tongue, but even interpretations of the elastic good faith requirement in the U.C.C. have proven to be anything but clear, notwithstanding two statutory definitions.[11]

Article 7 of CISG further directs courts to settle matters which are not expressly settled in the Convention "in conformity with the general principles on which it is based, or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."[12]

What, precisely, are the general principles on which the Convention is based? The Convention does not say. They cannot be the general principles of any particular legal system, since the pursuit of such principles would violate the directive to transcend domestic principles. As Professor Honnold suggests, "[i]nternational unifying conventions, unlike true (civil law) codes, lack a general framework from which general principles can be derived."[13] If general principles of the Convention itself cannot be discovered, the alternative is to discover principles in conformity with the rules of private international law. Professor Honnold, however, warns that there is nothing comparable in the Convention to the U.C.C. reference to a huge body of virtually uniform domestic law that continues to apply unless displaced by particular provisions of the U.C.C. His conclusion was not optimistic: "This writer has not yet seen a clear solution to this dilemma. . . ."[14]

As we complete a decade of CISG experience, the dilemma continues. Worldwide, the number of adjudications applying, interpreting and construing the Convention is small in relation to the volume of transnational contracts for the sale of goods that have occurred during this decade.[15] In particular, only three significant CISG cases come from United States courts.[16] That number would be incredible even if the Convention were limited to the United States and its NAFTA partners, Canada and Mexico, much less numerous other nation states.[17]

Beyond the small number of applications, the extant CISG case law is anything but a testament to the ability of courts to transcend their particular traditions and pursue the development of those elusive CISG general principles. One American court sees no difference between its domestic parol evidence rule and Article 8(3) of the Convention that allows a court to give due consideration to the negotiations of the parties.[18] While there is some scholarly debate as to whether Article 8(3) rejects the parol evidence rule or is confined to interpretation questions,[19] there is no doubt that CISG does not recognize the parol evidence rule as we know it.[20] Because that court viewed CISG through its domestic lens, however, it provides a distorted image.

In another case involving the extent of liability under CISG, the district court identified CISG as the governing law without citing the applicable CISG Article. Rather, the court cited two U.S. cases, one of which mentions CISG in a footnote.[21] Applying Article 74 of the Convention which limits damages to "what the breaching party foresaw or ought to have foreseen . . . in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach. . .," the court does not refer to any decision of a court from another Contracting State. Instead, it refers to the Restatement (Second) of Contracts,[22] Corbin on Contracts,[23] and precedent from its appellate court.[24]

On appeal, the Second Circuit begins its discussion of CISG with the recognition that its interpretation must be informed by its international character to promote uniformity, particularly "because there is virtually no caselaw under the Convention."[25] It then immediately disavows that principle with the incredible suggestion that "[c]aselaw interpreting analogous provisions of Article 2 of the U.C.C. may also inform a court where the language of the relevant CISG provisions track that of Article 2."[26] As authority for this startling proposition, the court cites the same footnote cited by the lower court from an 1989 opinion by the U.S. Court of International Trade that provides a peripheral mention of CISG, but cannot possibly be said to support the court's assertion.[27] Instead of relying on cases from other Contracting States that discuss Article 74, the court equates Article 74 with the revered foreseeability test of Hadley v. Baxendale [28] that has been incorporated in the Uniform Commercial Code. The court said:

"The Convention provides that a contract plaintiff may collect damages to compensate for the full loss. This includes, but is not limited to, lost profits, subject only to the familiar limitation that the breaching party must have foreseen, or should have foreseen, the loss as a probable consequence. CISG art. 74; see Hadley v. Baxendale. . . ." [29]

This is a consummate illustration of a court unwittingly seeing a provision of the Convention through a domestic lens having just insisted that it must provide an autonomous interpretation. The Article 74 foreseeability limitation is not the equivalent of the "familiar" Hadley v. Baxendale limitation that American judges and lawyers know so well. Article 74 limits consequential damage recovery to those matters which a party "knew or ought to have known as a possible consequence of the breach. . . ."[30] In the court's own words, the familiar Hadley case limits lost profits to those that the breaching party must or should have foreseen "as a probable" consequence.[31] While very similar, the two tests apply different threshold levels.[32] The Article 74 test is broader than the Hadley test. As applied to the facts of this particular case, the result would not change regardless of which test had been applied. The harm, however, is to precedent. We now have a case from a United States Court of Appeals which not only erroneously equates an important CISG principle with a sacred rule of American contract law, but suggests that this process should be pursued whenever a CISG provision "tracks" a U.C.C. provision. This is a directive to view CISG through the lens of domestic law.

There are similar examples of courts in other Contracting States who unwittingly resort to the gloss of domestic law. Confronted with an interpretation of Article 79 which excuses a party from failure to perform if he proves that failure was due to an impediment beyond his control, an Italian court draws on its domestic understanding to influence the meaning of "impediment to performance" instead of an autonomous interpretation.[33]

Beyond these clear illustrations of the failure to develop general principles through autonomous interpretation, there are other judicial failures that misapply or fail to apply certain provisions of CISG. These failures may be due to a lack of familiarity with the Convention, but they may also be due to an unconscious adherence to the domestic traditions of these courts.[34]

There is even a more fundamental challenge. If we are to have a highly effective uniform law for international contracts for the sale of goods, there is the basic challenge of ascertaining that CISG will be the governing law. The desire for enactability breeds compromise that may be excessive. CISG allows the parties to exclude its application entirely or derogate from or vary the effect of its provisions.[35] Lack of familiarity with CISG may induce lawyers to avoid it because they fear the unknown and the attendant uncertain risks. A belated discovery of CISG may be too late as in a case where the court dwelled on whether the U.C.C. statute of frauds was satisfied and refused to consider the afterthought argument that no writing was necessary because CISG applied.[36]

Substantial familiarity with the Convention may still suggest avoidance, because counsel may decide that domestic law is more desirable for a client such as a buyer in a "battle of the forms" situation, which CISG Article 19 retrogresses to a pre-U.C.C. view that typically favors the seller.[37] Even if counsel with such familiarity finds CISG provisions generally desirable, the unreliability of potential interpretations by courts of his own or other Contracting States may suggest that the safest course is to opt for domestic law. With sufficient client bargaining power, the temptation to insist upon the tried, true and familiar U.C.C. may be irresistible.

There are other pragmatic reasons for avoiding CISG. The lack of clarity in the broadly drafted provisions of the Convention may give lawyers and judges pause. Except as otherwise provided, CISG is not concerned with the validity of the contract.[38] This provision was designed to accommodate the tension between the goal of a uniform international law and "national divergences regarding sensitive issues."[39] Again, to promote enactability, the drafters sought to avoid matters of public policy that might preclude adoption by a particular Contracting State. While recognizing the pragmatic need for such a provision, the interpretation and scope of a term as broad as "validity" is problematic. Should we interpret "validity" as it would be interpreted parochially? Or, should we be true to the requirement of autonomous interpretation and insist upon an interpretation that transcends any Contracting State? Even if we choose this pristine path of autonomous interpretation, we are still left with the question of the proper meaning of "validity" in diverse situations.

For example, does it apply to issues such as duress, fraud and intentional misrepresentation? The consensus view characterizes such issues as validity questions to which CISG would not apply. But what of innocent misrepresentation and mistake? Plausible arguments can be made on either side of this question.[40] There is clear agreement that issues such as capacity and agency authority are validity issues. Although the requirement of a writing exists in many Contracting States, CISG trumps this validity issue because it "expressly" provides that no writing is necessary absent a reservation by a Contracting State.[41] Then there is the "open price term" controversy where CISG requires an offer to be "sufficiently definite" and does not appear to allow the judicial insertion of a price,[42] while Article 55 suggests that a missing price term may be supplied by inserting a price that is "generally charged at the time of the conclusion of the contract." That Article, however, applies only "[w]here a contract has been validly concluded. . . .[43] One view is that Article 55 allows a contract to be validly concluded absent any express or implicit fixing of the price. A contrary view suggests that Article 55 is not a solution since it applies only after a contract is validly concluded.[44] Beyond the popular scholarly topic of the meaning and scope of "validity," there are numerous other issues that must be resolved through an autonomous interpretation of CISG. At the moment, that goal appears more distant as it soars away at an accelerating pace.

CISG is a milestone, not, however, because it is the ultimate modern commercial code. Indeed, the Drafting Committee for the proposed revision of Article 2 of the Uniform Commercial Code rejected CISG as a model for several reasons including technological and transactional obsolescence.[45] CISG is a monumental contribution because it evidences a willingness of Nation States throughout the world to seek uniformity in a critical commercial context. The success of CISG could spawn other and more sophisticated efforts at uniformity with critically important effects well beyond international trade. At this time, the paucity of case law and the discouraging reaction of courts that have applied CISG augur a dim future for this noble effort.

Expecting courts to develop an international perspective by analyzing CISG applications around the world borders on the absurd. Even if all CISG cases were readily accessible, courts would still require considerable assistance to understand the legal traditions from which they emanate to begin the process of autonomous interpretation. Lawyers will continue to avoid CISG unless they are confident of their own sophisticated understanding of the Convention and their willingness to rely upon reasoned and fair applications. CISG could fail for the worst possible reason. It could fail because it could be ignored. It is much too important to fail. There is hope. A workable solution exists.

In 1987, Professor Michael Bonell of the University of Rome attacked the problem of avoiding divergent interpretations of CISG. He suggested that UNCITRAL should be responsible for promoting uniform interpretation and application through the creation of something akin to the Permanent Editorial Board established by the National Conference of Commissioners on Uniform State Laws for the Uniform Commercial Code.[46] Such a Board would be composed of representatives from the Contracting States, though smaller states within a particular region could appoint a common representative. Board members would be responsible for gathering judicial decisions and bibliographic material relating to the Convention from their respective countries or regions, and reporting the collected material pursuant to uniform criteria. The Board would then create a comparative analysis of that material and report periodically to UNCITRAL. Professor Bonell left for a future time the question of whether the Board should be entrusted with the additional task of rendering, in the form of non-binding advice, interpretations of the Convention.[47] That time is now.

CISG has no comments, though the UNCITRAL Secretariat prepared a comment section in the 1978 draft of CISG which is often used by the Vienna scholars to support their opinions.[48] It is now time to create the international version of a permanent editorial board with representation from every Contracting State, not only to collect material and create a comparative analysis, but to provide interpretations and illustrations of each Article of CISG. If CISG is to succeed, particularly in terms of autonomous interpretation, if courts are to discard their domestic lenses and replace them with international lenses, if lawyers throughout the world are to pursue this critically important international initiative with trust and confidence, they require comprehensive and reliable guidance in the form of so-called "official," albeit non-binding comments, similar to the comments to the Uniform Commercial Code.

If an American lawyer had authored this suggestion, it would be subject to the fundamental criticism that it emanated from an isolated tradition. It is particularly desirable that the suggestion comes from a distinguished scholar in another Contracting State. While Professor Bonell's work producing a "restatement" of international commercial contract law in the 1994 UNIDROIT Principles of International Commercial Contracts ("PRINCIPLES") is very desirable, this effort is insufficient as a catalyst to a pervasive understanding of CISG. Our own Restatement (Second) of Contract Law was heavily influenced by the U.C.C., but it is not designed to elaborate the meaning of U.C.C. sections. Without the "official" U.C.C. comments, the Restatement would not provide sufficient support. The PRINCIPLES are not designed to interpret CISG. They are broader than CISG, they are not restricted to contracts for the sale of goods, and they address validity issues. Moreover, PRINCIPLES are heavily laden with a civil law tradition making them insufficient to provide a workable solution to the challenges of a pervasive understanding and application of CISG.

The American experience in the production and application of U.C.C. comments can be particularly helpful in the creation of CISG comments. How important have U.C.C. comments been in pursuing the underlying purposes and policies of the Code? It has been suggested that they "are by far the most useful aids to interpretation and construction" for courts who "take to the comments like a duck takes to water."[49]

The need for U.C.C. comments was clear from the earliest efforts to draft a uniform revised sales act that was later enlarged to a comprehensive uniform commercial code. Long before the first draft, the "father" of the Code, Karl Llewellyn, was emphatic in requiring a thorough commentary to aid the effective development of the U.C.C.[50] In typical Llewellyn fashion, he provided a rationale that left no doubt:

"[T]he fact is that our courts have not the time, in the disposition of single cases, to fathom the handling of a whole field by a whole uniform act or code chapter. . . . The bearing of parts of an Act or Code on one another and on the whole the courts are willing to see, glad to see; but counsel do not show that full bearing, and the [National Conference of Commissioners on Uniform State Laws] has not undertaken to show it either. The [National Conference] has instead attempted to make the particular sections do the work. And that means to cripple the long-range growth of the Act."[51]

Llewellyn was particularly influenced by Professor Williston's book on Sales Law which began with a preface in which Williston stated his intention to explain and support the provisions of the Uniform Sales Act which he drafted.[52] Llewellyn felt that,

"it is not enough that the law should be 'clear' if it is not clear to those who decide cases. It is to be remembered that the Negotiable Instruments Law was accompanied by no such inclusive commentary as accompanied the Sales Act. Thanks to Williston's commentary on the latter, it is well nigh impossible for courts to seriously misconstrue the Act; it was close to impossible to read one section without reference to other pertinent sections. Indeed, even those portions of the Act which in themselves were drafted with less adequacy had their inadequacy cured by the clear presentation in the commentary of their background and intent."[53]

Llewellyn's obsession with express statements of purpose -- the principle of "patent reason" -- was his workable solution to the challenge of uniformity in construction and interpretation. His analysis is particularly appropriate to the challenges of autonomous interpretation presented by CISG. His statement can be applied, without change, to CISG.

"Construction and application are intellectually impossible except with reference to some reason and theory of purpose and organization. Borderline, doubtful, or uncontemplated cases are inevitable. Reasonably uniform interpretation by judges of different schooling, learning and skill is tremendously furthered if the reason which guides application of the same language is the same reason in all cases. A patent reason, moreover, tremendously decreases the leeway open to the skillful advocate for persuasive distortion or misapplication of the language; it requires that any contention, to be successfully persuasive, must make some kind of sense in terms of the reason; it provides a real stimulus toward, though not an assurance of, corrective growth rather than straightjacketing of the Code by way of caselaw."[54]

U.C.C. Comments were designed at least as much if not more for the practicing bar as for judges. Llewellyn and friends were quite concerned about the ignorance of commercial law and commercial practices by the bar.[55] The Comments provide a road map to assist the lawyer to understand the underlying purposes of each section and their relation to other sections as well as the general purposes of the Code.[56]

While they are not part of the enacted law, they are often referred to as "official Comments." That characterization occurred in the 1950 draft but has not reappeared.[57] The 1952 version contained a section that allowed the comments to be "consulted in the construction and application of this Act but if text and comment conflict, text controls."[58] This section did not appear in the 1957 version. The stated reason was that the old Comments were outdated and it was not known when new Comments could be prepared.[59] While no reference to the Comments has reappeared in the text of the U.C.C., as two scholars recently suggested, "it would be a mistake to conclude . . . that their persuasive force has diminished."[60]

The U.C.C. Comments have been persuasive indeed. Thousands of citations attest to this fact. Yet, they are not "official," they are not part of the legislation and they are far from perfect. They are uneven, their cross references are not exhaustive and there are examples of courts insisting that the Comments are not controlling, as well as examples of courts rejecting Comments.[61] Neither have they fared all that well in the relatively few scholarly analyses of their development and application,[62] though one early critic still concludes that "[s]tudy of the comments is indispensable to knowledge of the Code,"[63] while two others recognize "that the comments are potentially the single best source for determining purposes and policies."[64]

Notwithstanding their infirmities, U.C.C. Comments are more significant than any individual scholarly treatment of the U.C.C., they are more significant than any "restatement" of the law, and they provide a relatively cohesive and uniform elaboration of purposes, policies and applications of the U.C.C. Because they accompany the official legislative product and are widely promulgated among all members of the bench and bar, they enjoy a perceived stature beyond their actual importance which aids uniformity. They provide an essential focus on uniformity that pervades the entire U.C.C.

If such comments have proven to be essential to the genuine success of a Code encompassing fifty separate jurisdictions with a common tradition, how much more essential are they to the genuine success of a Convention from a similar number of jurisdictions with divergent traditions, as well as other major complicating factors? The compilation of comments for CISG could benefit from the American experience by avoiding the deficiencies of the drafting process and assuring comprehensive participation by all Contracting States. They could be the catalyst in educating bench and bar throughout the world in pursuit of the elusive goal of autonomous interpretation and construction of the Convention. They could eliminate manufactured difficulties and become a major force in promoting familiarity and use of the Convention through a reasoned analysis of the purpose of each Article, in pursuit of the general purposes and policies of the entire Convention. They can unfold a consistent analysis that promotes the general principles of CISG. Through such comments, the general principles themselves can be made clear. With a perceived status as the consensus view on every Article and the Convention in general, as well as wide promulgation throughout the world, such "official" commentary, appearing in every version of the Convention, can be the workable solution.

One should have no illusions as to the huge challenge such an undertaking presents. When compared to the possibility of failure of one of the most important legal accomplishments of the twentieth century, however, the challenge becomes more than acceptable. We should not settle for regional uniformity. We should not settle for anything less than the vision and aspirations that guided the John Honnolds of the world in this marvelous accomplishment. The workable solution is at hand and it should be pursued with all deliberate speed.


FOOTNOTES

* President and Professor of Law, Duquesne University

1. U.C.C. § 1-102(1)(c). Louisiana, with its civil law tradition, enacted only parts of the U.C.C. (Article 1 – general provisions, Article 3 – commercial paper, Article 4 – bank deposits and collections and Article 5 – letters of credit). Article 2 which deals with sales of goods and contracts for the sale of goods was excluded along with Article 6 - bulk sales, Article 7 – bills of lading, warehouse receipts and other documents of title, Article 8 – investment securities, and Article 9 – secured transactions.

2. U.C.C. § 1-102(1)(a).

3. U.C.C. § 1-102(1)(b).

4. U.C.C. § 1-102(3).

5. U.C.C. § 1-102(1).

6. See John E. Murray, Jr., The Emerging Article 2: The Latest Iteration, 35 Duq. L. Rev. 533 (1997) (analyzing the July, 1996 discussion draft of the revision of Article 2 of the U.C.C.).

7. The United Nations Convention on Contracts for the International Sale of Goods Final Act, 1980, U.N. Doc. A/Conf. 97/18 (1980), reprinted in S. Treaty Doc. No. 98-9 (1980), and in 19 Int’l Legal Materials 668 (1980) [hereinafter CISG]. For an introduction to CISG, see John E. Murray, Jr., Murray on Contracts, Chapter 14 (3d ed. 1990).

8. Professor Harry Flechtner addressed the exacerbated problem of different language versions such as the unofficial German translation to which the German Democratic Republic, Austria and Switzerland agreed in his Address to the Third International Workshop on a Legal Expert System for CISG: Sources of Textual Non-Uniformity in the U.N. Sales Convention: The Several CISG’s (May 20, 1995).

9. John Honnold, The United States Uniform Commercial Code: Interpretation by the Courts of the States of the Union, 181, 183, in International Uniform Law in Practice, Acts and Proceedings of the 3rd Congress on Private Law Held by the International Institute for the Unification of Private Law, UNIDROIT, Rome, September, 1987.

10. CISG, art. 7(1).

11. U.C.C. section 1-203 imposes an obligation of good faith in the performance or enforcement of every contract or duty within its provisions. Sections 1-201(19) defines "good faith" as "honesty in fact in the conduct or transaction concerned" while section 2-103(1)(b) defines "[G]ood faith in the case of a merchant [as] honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade."

12. CISG, art. 7(2).

13. See Honnold, supra note 9, at 190.

14. Id. See U.C.C. § 1-103.

15. The total number of judicial applications of CISG worldwide is difficult to determine because of the uneven reporting of cases among Contracting States. While some 200 decisions are known, some undetermined number of additional unreported cases could be added to this number. UNILEX (Transnational Juris Publications Inc.) is a computer data base compiling CISG cases. Another source is CLOUT (Case Law on Uncitral Texts) which are summaries compiled by the UN Commission on International Trade Law. See also Michael R. Will, CISG: The UN Convention on Contracts for the International Sale of Goods, International Bibliography, 1980-1995; The First 150 or So Decisions, 1988-1995 (1995).

16. Delchi Carrier SpA v. Rotorex, 71 F.3d 1024 (2d Cir. 1995); Beijing Metals & Minerals Import/Export Corp. v. American Bus. Ctr., Inc., 993 F.2d 1178 (5th Cir. 1993); Filanto SpA v. Chilewich Int’l Corp., 789 F. Supp. 1229 (S.D.N.Y. 1992).

17. A lexis search reveals that CISG is mentioned in only thirteen U.S. cases, only three of which, cited in the previous note, manifest a significant discussion of CISG. One of the thirteen is the lower court decision in the Rotorex case in note 16, Delchi Carrier, SpA v. Rotorex Corp., U.S. Dist. LEXIS 12820 (N.D.N.Y. 1994). The other nine, at best, contain incidental discussions of CISG (i.e., a court may refer to the Convention in passing or reject an argument as to its application as a procedurally defective afterthought); Attorneys Trust v. Videotape Computer Products, unpublished opinion, 9th Cir., 1996 U.S. App. LEXIS 21792 (belated atempt to insert CISG – "too little too late"); Kahn Lucas Lancaster, Inc. v. Lark Int’l Ltd., 1997 U.S. Dist. LEXIS 11916 (S.D.N.Y. 1997) (CISG mentioned in footnote); Helen Kaminski Pty. Ltd. v. Marketing Australian Prod., 1997 U.S. Dist. LEXIS 10630 (S.D.N.Y. 1997) (court refused to apply CISG to goods seller failed to ship under a distributorship agreement); Graves Import Co. v. Chilewich Int’l Corp., 1994 U.S. Dist. LEXIS 10630 (S.D.N.Y. 1997) (CISG mentioned in footnote); S.V. Braun, Inc. v. Alitalia-Linee Aeree Italiane, S.p.A., 1994 Dist. LEXIS 4114 (S.D.N.Y. 1994) (plaintiff could not claim proportionate price reduction under CISG Article 50 where it stipulated goods were conforming); Intertag Co. v. Stafford Phase Corp., 1990 U.S. Dist. LEXIS 6134 (S.D.N.Y. 1990) (CISG mentioned analogously); Orbisphere Corp. v. United States, 726 F. Supp. 1344 (U.S. Court Int’l Trade 1989) (CISG mentioned in footnote); Promaulayko v. Amtorg Trading Corp., 224 N.J. Super. 391, 540 A.2d 893 (N.J. Super. 1988) (CISG mentioned in footnote); GPL Treatment Ltd. v. Louisiana-Pacific Corp., 894 P.2d 470 (Or. Ct. App. 1995) (belated attempt to insert a CISG argument which is mentioned in a dissenting opinion footnote). Germany and Holland appear to apply CISG with the greatest frequency. One scholar attributes this phenomenon to the prior experience of courts in these countries with previous conventions dealing with uniform sales laws, such as the two Hague Conventions, as contrasted with France which has barely applied CISG and had not ratified the Hague Conventions. The same author admits, however, that Italy, which had ratified the Hague Conventions, has rarely applied CISG. Claude Witz, Les Premieres Applications Jurisprudentielles du Droit Uniforme de la Vente Internationale 18 (1995).

18. Beijing Metals & Minerals Import/Export Corp. v. American Bus. Ctr., Inc., 993 F.2d 1178 (5th Cir. 1993). CISG, art. 8(3).

19. Ronald A. Brand & Harry M. Fletchner, Arbitration and Contract Formation in International Trade: First Interpretations of the U.N. Sales Convention, 12 J.L. & Com. 239, 251-52 (1993).

20. In Filanto, SpA v. Chilewich Int’l Corp., 789 F. Supp. 1229, 1238 n.7 (S.D.N.Y. 1992), the opinion states, "It should be noted that . . . the Convention essentially rejects both the Statute of Frauds and the parol evidence rule."

21. The court cites Filanto, 789 F. Supp. 1229, and Orbisphere, 726 F. Supp. 1344 (the footnote reference).

22. Restatement (Second) of Contracts § 331.

23. Arthur Corbin, 5 Corbin on Contracts § 1020 (1951).

24. Merlite Indus., Inc. v. Vlassis Inserts, Inc., 12 F.3d 373, 376 (2d Cir. 1993).

25. Delchi Carrier SpA v. Rotorex Corp., 71 F.3rd 1024, 1027-1028 (2d Cir. 1995).

26. Id.

27. Orbisphere, 726 F. Supp. at 1356.

28. 156 Eng. Rep. 145 (1854).

29. Delchi Carrier SpA v. Rotorex Corp., 71 F.3d 1024, 1030 (2d Cir. 1995) (emphasis supplied).

30. CISG, art. 74.

31. See Delchi, 71 F.3d at 1030.

32. V. Susanne Cook, The U.N. Convention on Contracts for the International Sale of Goods: A Mandate to Abandon Legal Ethnocentricity, 16 J.L. & Com. 257, 260 (1997).

33. Nuova Fucinati S.P.A. v. Fondmetall Int’l A.B. (judgment of the Tribunale di Monza, Jan. 14, 1993), translated into English, 15 J.L. & Com. 153 (1995).

34. A number of such examples are found in the analyses of Witz, supra note 17.

35. CISG, art. 6.

36. In GPL Treatment, Ltd. v. Louisiana-Pacific Corp., 894 P.2d 470 (Or. Ct. App. 1995), rev. granted, 898 P.2d 770 (1995), a dissenting opinion contains a footnote referring to plaintiff’s belated argument that CISG should apply rather than the U.C.C. which would win the day for plaintiff since CISG does not require written evidence of the contract as does the U.C.C. under its Statute of Frauds in § 2-201 (Lesson, J., dissenting, 894 P.2d at 477 n.4).

37. Thus, for example, current interpretations of the U.C.C. generally favor the buyer as offeror in a "battle of the forms" situation governed by U.C.C. § 2-207. For an analysis, see John Murray, The Chaos of the Battle of the Forms, 39 Vand. L. Rev. 1307 (1986). On the other hand, Article 19 of CISG provides that additions, limitations or other modifications to an offer in a purported acceptance is a counter-offer, which reflects pre-U.C.C. domestic law that favored the seller. See Murray on Contracts, supra note 7, at § 152 A. 11.

38. CISG, art. 4(a).

39. Helen Elizabeth Hartnell, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, 18 Yale J. Int’l L. 1, 49 (1993).

40. For a discussion of this question, see id. at 72-78.

41. CISG, arts. 4(a), 12 and 96. Professor Hartnell, however, points to the concern of Professor Farnsworth that the U.C.C. § 2-205 requirement of a separate signing of a form supplied by the offeree that makes the offer firm may be characterized as a validity issue under a broad definition of validity. See Hartnell, id. at 65, citing E. Allan Farnsworth, Review of Standard Forms of Terms Under the Vienna Convention, 21 Cornell Int’l L.J. 439, 444 (1988).

42. CISG, art. 14(1).

43. CISG, art. 55.

44. This debate is reported in Murray on Contracts, supra note 7, at § 152 A.2.

45. See Richard E. Speidel, The Revision of U.C.C. Article 2, Sales in Light of the United Nations Convention on Contracts for the International Sale of Goods, 16 J. Int’l L. & Bus. 165, 171 (1995). Professor Speidel lists several other reasons: the absence of compatible background law, the fact that Article 2 is part of an integrated commercial code, the nature of the code, limitations in scope, and differences in the drafting process.

46. Michael Joachim Bonell, A Proposal for the Establishment of a "Permanent Editorial Board" for the Vienna Sales Convention, in International Uniform Law in Practice, Acts and Proceedings of the 3rd Congress on Private Law held by the International Institute for the Unification of Private Law, UNIDROIT, Rome, September, 1987, 241, 241.

47. Professor Bonell went on to chair a group of distinguished commercial law scholars who produced the 1994 Principles of International Commercial Contracts under the auspices of the International Institute for the Unification of Private Law (UNIDROIT). These "Principles" are often viewed as an international "Restatement" of contract law. This "international restatement" like American restatements of the law, is aided by comments. It was designed to promote unification indirectly, without legislation. The Principles differ from CISG in not being restricted to contracts for the sale of goods, dealing with questions of validity and, to some, constituting an improvement over CISG which is not remarkable since CISG was the "godfather" of the Principles. Ulrich Magnus, Die allegemeinen Grundsatze in UN-Kauf recht, 59 Rabels Zeitschrift 492-93 (1995). See also Joseph M. Perillo, Essay: UNIDROIT Principles of International Commercial Contracts: The Black Letter Text and Review, 63 Fordham L. Rev. 281 (1994) and Michael Joachim Bonell, Unification of Law by Non-Legislative Means: The UNIDROIT Draft Principles for International Commercial Contracts, 40 Am. J. Com. L. 617 (1992).

48. See the Commentary on the Draft Convention on CISG, in United Nations Conference on Contract for the International Sale of Goods, Official Records A/CONF.97/5 at 14 (1980).

49. James J. White & Robert Summers, Uniform Commercial Code 12 (3d ed. 1988).

50.He suggested that a "condition of sound development by courts is an adequate commentary which guides to the legal material concerned as a whole." Karl N. Llewellyn, Memorandum to the Executive Committee on Scope and Program of the NCC Section of Uniform Commercial Acts: Re: Possible Uniform Commercial Code (1940), reprinted in W. Twining, Karl Llewellyn and the Realist Movement 526-27 (1973). As early as 1933, Llewellyn insisted that uniform laws should be accompanied by comments. Letter from Karl Llewellyn to John Vorhees in December, Handbook of the National Conference of Commissioners on Uniform State Laws and Proceedings 165 (1941). See Sean Michael Hannaway, The Jurisprudence and Judicial Treatment of the Comments to the Uniform Commercial Code, 75 Cornell L. Rev. 962 (1990).

51. Llewellyn, Memorandum to the Executive Committee, supra note 50, at 527.

52. Samuel Williston, The Law Governing Sales of Goods at Common Law and Under the Uniform Sales Act iii (1909).

53. Report of Committee on Amendments to Uniform Negotiable Instruments Act, in Handbook of the National Conference of Commissioners on Uniform State Law and Proceedings 144, 145 (1933).

54. Collection of Karl Llewellyn Papers, (J)(VI)(i)(e) at 5 (1994) (unpublished manuscript on file at University of Chicago Law School), quoted in William Twining, Karl Llewellyn and the Realist Movement 321-22 (1973).

55. Karl N. Llewellyn, Statement to the New York State Law Revision Commission: A Simple Case on Behalf of the Code, reprinted in Twining, supra note 54, at 536-37.

56. Karl N. Llewellyn, Why a Commercial Code, 22 Tenn. L. Rev. 779, 782 (1953).

57. See Robert H. Skilton, Some Comments on the Comments to the Uniform Commercial Code, 1966 Wis. L. Rev. 597, 606-08. Professor Skilton notes the current designation as "Official Text with Comments" which could be interpreted as "Official Text with Official Comments."

58. U.C.C. § 1-102(3)(f) (1952).

59. See Peter A. Alces & David Frisch, Commenting on "Purpose" in the Uniform Commercial Code, 58 Ohio St. L.J. 419, 438 (1997), citing American Law Institute, 1956 Recommendations of the Editorial Board of the Uniform Commercial Code 3 (1957).

60. Alces & Frisch, supra note 59.

61. See, e.g., Burk v. Emmick, 637 F.2d 1172 (8th Cir. 1980), where the court rejected a Comment to § 2-507 which suggested a ten-day limitation on the seller’s right to reclamation which the court determined was unwarranted by the statutory language. A number of courts had applied the ten-day limitation based upon the Comment. See, e.g., Szabo v. Vinton Motors, Inc., 630 F.2d 1 (1st Cir. 1980). The Comment was changed by the Permanent Editorial Board in 1990 to state: "There is no specific time limit for a cash seller to exercise the right of reclamation."

62. See Alces & Frisch, supra note 59, at 446 et seq.: Skilton, supra note 57. See also Laurens Walker, Writings on the Margin of American Law: Committee Notes, Comments and Commentary, 29 Ga. L. Rev. 993, 1007-1015 (1995).

63. Skilton, supra note 57, at 631.

64. Alces & Frisch, supra note 59, at 458. Their criticism is essentially a criticism of the system by which the comments are produced which is not as participatory or careful as it needs to be.


Pace Law School Institute of International Commercial Law - Last updated March 22, 1999
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