Published by Manz, Vienna: 1986. Reproduced with their permission.

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E. Form (Articles 11, 12, 13, 29(2) and 96)

From the very beginning, one of the most controversial issues of UNCITRAL's work was whether or not ULIS Article 15 concerning freedom of form should be followed. It was pointed out even by countries not in favour of form requirements that the bureaucratic needs especially of large-scale entities (business enterprises, states, or governmental organizations, etc.) to control their transactions require written evidence and the respect of form requirements.[134] Therefore, the Draft Convention already offered a compromise whereby freedom of form was the basic rule, but a reservation clause would enable states preferring a formal writing to decide, by application of the domestic law invoked by conflict rules, the form issue for contracts concluded by parties with a place of business in one of these states.[135] This solution was maintained at the Vienna Conference.

A Dutch proposal to limit this possibility to certain types of contracts [136] was not accepted, both because it could have made it more difficult to decide whether a formal writing is required,[137] and, above all, because it might have encouraged the use of the reservation clause. Similar proposals had previously been rejected by UNCITRAL because a list of the contract types with form requirements would have had to accompany the reservation and would have made application of the Convention very difficult.[138] [page 44]

According to Article 11 sentence 1, the lack of form requirements means that "consideration" is not required. Otherwise there could be difficulties in contract modifications which favour one side.[139] Sentence 2 also overrides domestic rules of procedure which exclude parole evidence and thereby indirectly pressure the parties into using a written form. This rule applies to all legally relevant statements and communications which are or will be required for the formation of a sales contract, its modification or termination.

Even when Contracting States make use of the reservation in Article 96, domestic requirements on form are only to be regarded, despite the broad wording in Articles 12 and 96 ("or other indication of intention"), as far as they relate to the formation of the contract, its modification or consensual termination. In particular, the more precise formulation, "its modification or termination by agreement" makes it clear that a one-sided declaration to terminate a contract does not fall within the scope of the reservation and the corresponding domestic regulations on form,[140] nor does a declaration to reduce the price according to Article 50 sentence 1. In my opinion, notification of defects, the fixing of time limits, and other communications are, therefore, not subject to form requirements, even when, on the basis of the Article 96 reservation, the contract, in principle, is subject to domestic form regulations which require that such communications adhere to formal writing requirements. The Conference also passed a proposal by the Federal Republic of Germany, whereby the Article 96 reservation may also be invoked after signing the Convention. Thus, the Convention can be signed even if, at the time of the signing, it is not clear whether there are any applicable domestic requirements on form. Later withdrawal of that reservation is possible (Article 97(4) sentence 1).[141]

When the reservation is made and one party's place of business is in a reservation state, the court must determine the law applicable to form according to its private international law. If the law of a Contracting State which did not invoke the reservation provision is applicable, freedom of form according to Articles 1(l)(b) and 11 prevails. On the other hand, if the conflict rules point to a reservation state, then the domestic regulations of that state control.[142] [page 45]

Compliance with writing requirements, especially for contract modifications which often necessitate quick decision, as in construction contracts, was made easier by the acceptance of the Federal Republic of Germany's proposal [143] that a "writing" include communication by telegram or telex (Article 13). This does not mean merely that the Article 96 reservation in connection with Article 12 permits the use of telegram or telex when that use is permitted by domestic law; it means rather that domestic form requirements are always satisfied by the use of telegrams and telexes.[144] The German proposal was not meant only as a definition of the term "writing" as used in Articles 21(2) and 29(2), although the formulation of Article 13 might lead to that conclusion. Article 13 was meant to achieve a uniform objective standard for form requirements, so that parties need not comply with domestic form requirements which perhaps impose higher standards and about which it may be difficult to obtain information.[145] However, because of the awkward wording of Article 13, this interpretation is open to to criticism.

The principle of freedom of form does not prevent the parties from agreeing to a writing requirement. This follows from the basic principle of party autonomy, which applies as well to the prerequisites for the existence or termination of the obligation and is also reaffirmed in Article 29(2) sentence 1. This latter provision further makes it clear that a formal writing requirement agreed upon by the parties can only be changed or suspended by a written agreement, including telex or telegram (Article 13). The formula occasionally used by the West German courts - that a formal writing requirement agreed upon by the parties can be removed without a writing [146] - seems not to be recognized in the sphere of application of CISG.[147] On the other hand, Article 29(2) sentence 2 deals with the case where a party has relied on an oral agreement abandoning the writing requirement by [page 46] precluding the other party from asserting the requirement in such as case. In the end, the result obtained in the Federal Republic of Germany by means of "oral modifications of the writing requirement", such as when the buyer has relied on the oral promise of an authorized sales agent and is later confronted with the objection that the agreement was not in writing, will therefore be satisfactorily resolvable under CISG as well.

The parties' freedom of contract with regard to the form of their statements is, of course, subject to one limitation, namely the form requirements imposed by the domestic law invoked by conflicts rules whenever the Article 96 reservation clause is applicable (Article 12 sentence 2). In a contract with a party whose place of business is in the Soviet Union, for example, for which the form requirements of Soviet law are applicable, the parties cannot effectively agree to dispense with the form requirement if the Soviet Union claims the Article 96 reservation. [page 47]

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FOOTNOTES

* The author of this book participated at the Conference as a member of the delegation from the Federal Republic of Germany. The views expressed here are personal to the author and do not necessarily represent the position of the F.R.G. or its delegation.

134. See Farnsworth at 11.

135. See A/Conf. 97/C.1/SR.8 at 7-8 §§ 43 and 47 (= O.R. 273 et seq.) (statements by Farnsworth (U.S.A.) and Date-Bah (Ghana)). It is clear that the right to declare a reservation was granted as a concession to the U.S.S.R.

136. See A/Conf. 97/C.1/L.71, 76 (= O.R. 91).

137. See A/Conf. 97/C.1/SR.8 at 4 et seq. (= O.R. 271 et seq.) (discussion).

138. See 2 UNCITRAL Y.B. 21 (1971); 3 UNCITRAL Y.B. 75 (1972). Nevertheless, the outcome is unfortunate because it would have made the decision as to whether or not to make the reservation easier for many states, such as the F.R.G., which only recognize form requirements for certain kinds of contracts. In my opinion, it is not necessary for the F.R.G. to make the reservation, since only a few types of business transactions are affected. First are the exceptional cases of international instalment transactions, see supra at III.D.1. for which a written form would be required according to the German Instalment Law (Abzahlungsgesetz) § 1(a). But in international sales contracts, the German buyer cannot count on the protection of the German instalment law anyway. A second group are the form requirements prescribed in state laws governing municipalities, etc. See Baden-Württembergische Gemeindeordnung § 54. The reasons for ensuring that these requirements are upheld are probably along the same lines as those the Soviet Union uses to defend its form requirements. Nevertheless, the F.R.G. should commit itself to adopting the Convention without the reservation. Of course, this would mean that municipalities could contravene local law by entering into valid but unwritten international sales contracts, but the municipal authority responsible for forming the contract would still be subject to internal sanctions for violating official duties since these sanctions cannot be disturbed by the Convention. Cf. Secretariat's Commentary at 51. The practical effect would probably be that in such cases, form requirements would be agreed upon and, in any case, followed. Finally there remain the cases, mentioned by Huber, of sales contracts with marketing commitments and similar agreements, which are subject to form requirements under anti-trust laws such as German Gesetz gegen Wettbewerbsbeschränkungen (GWB) § 34. See Huber at 434. The reservation clause is only available, however, as far as the domestic law contains form requirements for sales contracts. The compromise found in Articles 12 and 96 considers form requirements based on domestic law to be exceptions. See A/Conf. 97/C.1/SR.8 at 7 § 43 (= O.R. 273). In my opinion, CISG does not cover such agreements anyway, so that domestic provisions on form requirements remain undisturbed. Whether an unwritten sales contract containing marketing or licensing commitments is totally void depends on the domestic rules governing partial nullity. If those rules indicate that the sales part of an integrated contract is void as well, then it is void under Article 4(a). In German law, the basis for the judgment is, therefore, German Civil Code § 139.

139. See Eörsi at 316.

140. See A/Conf. 97/C.1/SR.8 at 5 et seq., especially §§ 26, 32, 36, and 38 (= O.R. 272 et seq.) (discussion). A proposal by the U.S.S.R. to include the avoidance of contract by one party in the reservation was unsuccessful. See A/Conf.97/C.1/L.35 (= O.R. 91) (motion); A/Conf. 97/C.1/SR.8 at 5 et seq. (= O.R. 272 et seq.) (discussion).

141. Since Article 565 of the Civil Code of the U.S.S.R. mandates application of U.S.S.R. law on form requirements in all foreign-trade transactions, it can be assumed that Russian courts, on the basis of U.S.S.R. law, will always require contracts to be written.

142. Since Article 565 of the Civil Code of the U.S.S.R. mandates application of U.S.S.R. law on form requirements in all foreign trade transactions, it can be assumed that Russian courts will always require contracts to be in writing.

143. A/Conf. 97/C.1/L.17 (= O.R. 83).

144. See A/Conf. 97/8 at 7 (position of the government of the F.R.G.). Accord Stoffel in Lausanner Kolloquium at 60. Honnold's interpretation would make Article 13 almost meaningless. See Honnold, Commentary § 130; infra, note 145. Eörsi believes that Article 13 does not require comment. See Eörsi, General Provisions at 2-34.

145. The motion to allow the telegram or telex to fulfill the writing requirement was probably accepted in Vienna without further debate because it was drafted on the model of a provision with the same wording in the UNCITRAL Convention on the Limitation Period of 1974 (Article 1(3)(g)). The Convention on the Limitation Period itself contains requirements on form, for example, in Article 20(1) (the interruption of the limitations period by a written acknowledgment) so that the provision on written form contained in the Limitations Convention only had an internal effect. CISG itself only mentions "writing" in two provisions and only requires it in Article 29(2) for modifications. The representatives from the Soviet Union agreed to the West German motion presumably because, according to an applicable Soviet law which makes a writing mandatory for foreign trade transactions, telegrams and telexes fulfill the requirement. See A/Conf. 97/C.1/SR.7 at 10 § 73 (= O.R. 269).

146. Cf. Judgment of June 2, 1976, BGH, 66 BGHZ 378.

147. An Italian proposal, corresponding to West German judicial practice, would have permitted an oral suspension of such an agreement on form. See A/Conf. 97/C.1/L.68 (= O.R. 101). A/Conf. 97/C.1/SR.13 at 8 § 56 (= O.R. 305). It was not adopted primarily because a reference to written-form clauses in standard contract terms conflicted with the unwillingness, which became apparent in connection with the "battle of the forms," to deal with problems involving standard contract terms.

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