Go to Database Directory || Go to Bibliography

Reproduced with permission of the author

Departing from mere compromise: Reformulating the remedy of specific performance under the Convention on the International Sale of Goods (CISG) in line with the Convention's underlying goals

Admire Takawira
November 2007

Summary
Chapter 1: Introduction
1.1    Uniformity and the CISG: General background
1.2    Goals of the CISG
1.3    Uniformity and the CISG
1.4    Compromise nature of the CISG
1.5    Scope of Study
Chapter 2: Specific Performance as a Remedy
for Breach of Contract under the CISG
2.1    General
2.2    Specific performance
2.3    Limitations to specific performance through Article 28
2.4    Drafting history of Article 28
          2.4.1    Article 28 as a product of compromise
2.5    Effect of Article 28 on specific performance
          2.5.1    Judgment of specific performance
          2.5.2    Similar contracts of sale
          2.5.3    "its own law"
          2.5.4    "the court is not bound"
Chapter 3: Specific Performance under Domestic
Law and its Impact on Article 28 of the CISG
3.1    Specific performance under civil jurisdictions
3.2    Specific performance under the common law
          3.2.1    Specific performance under the domestic law of the U.S.
          3.2.2    Specific performance under the domestic law of Britain
3.3    The civil law-common law divide and Article 28 CISG
Chapter 4: A Proper Interpretation of Article 28
4.1    Interpretation in accordance with the Convention's criteria
4.2    International character of the CISG
4.3    Need to promote uniformity
4.4    Observance of good faith in international trade
4.5    Exercising Article 28 discretion in arbitration matters
Chapter 5: Conclusion
5.1    Purpose of the study
5.2    Findings
5.3    Recommendations
Bibliography

SUMMARY

This study project discusses specific performance as a remedy for contractual breach under the CISG. It traces the remedial framework of specific performance through Articles 46 and 62 which establish a clear right to performance. Such rights are limited through Article 28 which allows courts to continue to apply their domestic law in regard to CISG governed matters. The approaches of domestic courts towards specific performance are different; especially the difference between common law jurisdictions which allow specific performance in exceptional circumstances and civil law courts which generally regard specific performance as a primary remedy. Article 28 CISG was brought in as a compromise provision and thus clearly defeats the goal of uniformity.

It is suggested that in order to promote much desired uniformity, Article 28 CISG should be interpreted in accordance with the criteria provided in Article 7. Such an interpretation will acknowledge the need to promote uniformity, the international character of the CISG and the observance of good faith in international trade. These criteria will ensure a departure from the homeward trend and promote uniformity in the availability of specific performance as remedy for contractual breach. Such an interpretation will remedy the lack of uniformity brought about by the compromise nature of the Convention.

CHAPTER 1: INTRODUCTION

1.1 General Background

Nineteen years since the United Nations Convention on Contracts for the International Sale of Goods (the CISG) came into effect;[1] it still remains the greatest work in an attempt to unify international sales law.[2] Already 70 States, accounting for more than three quarters of all world trade, have ratified the Convention.[3] The success of the CISG is mainly seen in the light of the diversity and significance of the signatory states. It managed to secure ratification not only of the developed western countries and the major trading states such as the United States, China and Germany but also of the various developing and socialist states. The number of common law and civil law states which are signatories is also very impressive.[4] It has thus been considered as a triumph to have countries with such diversified legal and economic systems to agree on a single unified law.[5]

1.2 Goals of the CISG

The CISG was driven by the need to have a unified law to regulate international sales. The different laws in various legal systems were perceived as inhibiting international trade by creating uncertainty in the applicable law and resultant lack of uniformity in the outcome of litigation from jurisdiction to jurisdiction due to variations in the legal principles in place.[6] A single body of law divorced from the intricacies of domestic law was thus perceived as central in the promotion of the development of international trade.[7] Unification of sales law was thus the main goal of the CISG. This goal is also laid down in Article 7 which emphasises that in the application of the Convention due regard is to be placed on the need to promote uniformity.[8] The success of the Convention should thus be measured primarily on how its provisions have managed to promote unification by reconciling the varied legal positions of the different legal systems into a single body of law capable of uniform interpretation.

1.3 Uniformity and the CISG

If the success of the CISG in its goal of uniformity is to be measured, the concept of unification has to be clearly understood. The varied views of authors on the success of the CISG are mainly premised on how they perceive unification as opposed to harmonisation, often confusing the two.[9] Although the CISG succinctly lays down the need for uniformity in its preamble and in Article 7, it does not define what uniformity is. Article 7 merely states that there is a need to promote uniformity when the provisions of the Convention are interpreted.

Kamba views unification as signifying "the process whereby two or more different provisions or systems are supplanted by a single provision or system, creating an identity of legal provisions or systems."[10] Goldring sets the standard for uniformity quite high. He defines it as having three requirements namely: (1) the creation of a single law or text, (2) the uniform application of the given law, and (3) the production of uniform results.[11]

Goldring's definition seems to accord with the wording of the Convention; especially that of the preamble read in line with article 7, which emphasises the need to have regard to its international character and the promotion of uniformity in its application.[12] It is argued that the rationale for such wording is the promotion of uniform results in the application of the law.[13] Some scholars, however, argue that absolute uniformity among sovereign states is an impossible goal, advancing that the primary goal of the CISG should be to achieve functional uniformity.[14]

DiMatteo favours this standard of relative uniformity. He argues that "the success of the CISG should be measured using a standard of relative uniformity or a standard of the lessening of legal impediments to trade."[15] He furthermore argues that the fact that Article 7 prefaces its mandate with the words "regard is to be had", instead of using active words like "establish" or "create," show that a level of uniformity below absolute is envisaged. DiMatteo's argument based on semantics seems to be flawed. Little difference exists between the use of "regard is to be had" and the use of "establish", if one is to look at these phrases with a purposive eye. The use of "regard is to be had" as opposed to "regard may be had" shows the equally peremptory nature of the obligation which excludes any discretion, to the extent that it clearly points to the need to establish uniformity.

The other problem with DiMatteo's construction is that, once relative uniformity is accepted as the standard for measuring uniformity, it becomes difficult to measure whether it has been attained. Relativism is open to subjective construction and does not create any objective standard. The temptation of settling for relative uniformity which is easily attainable should thus be resisted. The logical conclusion will be to construe the CISG as requiring promotion of absolute uniformity. As a purportedly uniform law, absolute uniformity should be the benchmark against which the CISG is tested.[16] Yet, it is quite difficult to perceive whether such a high threshold of uniformity is attainable. In this regard Ferrari avoids the relative and absolute uniformity debate and submits that whatever the standard, lack of uniformity should not result in forum shopping.[17] Thus, to him as long as the interpretation of a provision does not encourage forum shopping, uniformity would have been achieved.

Ferrari's observation is useful as it points to a symptom of lack of uniformity, namely forum shopping. That on its own is undoubtedly useful as a measure of the extent of success in uniformity. However, the standard should again not be set so low as to confuse unification and harmonisation.

Harmonisation is a process whereby the effects of a type of a transaction in one legal system are brought as close as possible to the effects of a similar transaction under the laws of the other countries.[18] It denotes core existence. Laws may be different but if they are not directly opposed there is harmony. For instance if the civil law and common law countries settle that specific performance is to be available as a remedy for contractual breach but subject to the limitations of the domestic law of each state, that is a successful harmonisation.[19] Harmonisation therefore tolerates not only the differences between the laws to be harmonised but also differences in the application of the harmonised measures.

The difference between harmonisation and unification thus lies in the degree to which each tolerates variation. Harmonisation is flexible, only requiring a degree of similarity while unification is absolute, requiring that the substantive law of States be the same and be applied to attain uniform results.[20] The goal of the CISG is uniformity and not harmonisation and the threshold is thus high. It will be against this standard of a uniform law and achieving a uniform result that the CISG's success is to be measured.

1.4 Compromise nature of the CISG

Even though the delegates at the Vienna Conference had a common interest in the creation of a unified international sales law, they harboured different views on the form which the law had to take.[21] Each state preferred a unified law which reflected its domestic law. This selfish motivation probably lied in the natural tendency that what is familiar is probably better than that what is new and strange.[22]

There were marked differences in the approaches of various legal systems which were difficult to reconcile. Key among them were the following aspects (1) In common law systems contracts require consideration to be enforced whereas the concept is not recognised in civil law countries.[23] (2) Socialist systems generally require a contract to be in writing whereas Western systems do not require the writing requirement.[24] (3) Western legal systems allow a contract to come into existence where there is no agreement as to price, whereas in socialist countries a contract with no agreement as to price is void.[25] (4) Civil law systems are sympathetic to the issue of specific performance whereas in common law countries specific performance is available only under exceptional circumstances.[26]

Existence of these differences coupled with the interests of each state meant that reaching consensus was extremely difficult. The drafting process thus reflects compromises on important legal concepts rather than the best legal solutions. Rosett observes:[27]

"The delegates of the sixty-two participating nations did not reach consensus by a magical process. The majority, representing nations that follow the civil-law tradition, did not suddenly realize the virtues of the common-law approach to contract and commercial transactions. Nor did the representatives of states with planned socialist economies suddenly recognize the virtues of free enterprise and the private allocation of risks by contract. And the many representatives of poorer and underdeveloped nations did not come to a new appreciation of the plight of the wealthy creditors of this world. After thirty years of hard technical negotiation by experts, worldwide agreement was reached by diplomatic compromise."

The major question that emerges from this observation is thus, to what extent the CISG as a product of compromise has managed to sustain its goal of uniformity, or has it settled for harmonisation?

1.5 Scope of study

This study project will evaluate whether the CISG has achieved its main goal of unification in the context of the remedy of specific performance. The analysis will focus on the extent to which the Convention managed to overcome the differences in the various legal systems and effectively unify the area on the remedy of specific performance. Although the Convention provides for specific performance as a primary remedy in the case of breach of contract in articles 46 and 62, its application could be restricted by means of art 28 CISG. Article 28 was introduced as a so-called "compromise provision", for the benefit of the common law countries where a claim for specific performance is not that easily available except in very specific and extraordinary circumstances. Article 28 provides the opportunity for the forum court to apply a discretion to the extent that the claim for specific performance could be denied if that would be the case under its domestic law.

The major focus of this study will therefore be on Article 28. The aim is to analyse the extent it measures up with the goal of uniformity and how this article should be interpreted in light of the Article 7 guidelines. The criteria to interpret the Convention as noted above are laid down in Article 7. Article 7(1) provides that:

"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."

Thus, in finding the meaning of any provision in the Convention, a court should always be driven by this quest to promote unification and be guided by the international character of the Convention. The goal is an autonomous interpretation divorced from the idiosyncrasies of domestic law.

Article 7 has been hailed as probably one of the most important articles in the Convention because of its important role in guiding how the entire Convention is to be construed.[28] One of the major problems confronting a court in finding meaning to the Convention's provisions is how to safeguard the compromises which where made as concessions to signatures of some States,[29] and at the same time promote the Convention's goal of uniformity and comply with the interpretation criteria as set in article 7(1).[30] Although the travaux préparatoires are rich with an account of the various compromises which were reached, it is argued that where one interpretation accords with the compromise needs of the various States as accounted in the drafting history and the other accords with Article 7(1), the meaning conforming to Article 7(1) should be preferred.[31]

It has been observed that most of the compromises in the Convention do not resolve differences, but instead "it glosses them over or buries them in layers of rhetoric."[32] Moreover, compromises do not reflect two parties having yielded part of their positions to each other for the sake of agreement but rather two sides giving an appearance of agreement whilst in reality only legitimising the continuation of their domestic law approaches under the Convention.[33]

Giving a meaning according to compromises which are mainly restatements of domestic laws would defeat the call for autonomous interpretation. Autonomous interpretation requires that the CISG's principles be determined by reference to its own system and objectives with great care being taken to avoid the homeward trend.[34] The "homeward trend" refers to the tendency of a court to interpret an international instrument as it would a domestic statute. It furthermore refers to the tendency of a court to confine itself to its domestic understanding of concepts without looking at the practice of other jurisdictions or the special needs and objectives of an international instrument.

Thus, an interpretation complying with the individual compromise needs of States will be defeating the whole object of unification. Even where a compromise provision is present in the CISG, such as Article 28 which legitimises the continual resort to domestic law in regard to specific performance, a court still has to be guided by the autonomous nature of the CISG and the need to promote uniformity. Wherever possible, it should deviate from the demands of domestic law if they are inconsistent with the object of the Convention.[35] It is within the framework of this interpretational methodology that Article 28 will be analysed.

The aim of the study is to suggest that Article 28 should be interpreted in line with the Convention's interpretational methodology of Article 7, namely that due regard is to be placed on its international character, the need to promote uniformity in its application and the observance of good faith in international trade.[36]

Chapter Two will focus on a general background discussion of the provisions on specific performance including Article 28. Chapter Three will deal with the compromise nature of Article 28 and the influence that common law and civil law systems may have on a claim for specific performance under the CISG. Chapter Four proposes to show that there is no need to resort to domestic law but that Article 28 should be read against the background of the general goals of the Convention. Chapter Five will conclude the study by summarising the existing legal position and the approach suggested by this study.

CHAPTER 2: SPECIFIC PERFORMANCE AS A REMEDY FOR BREACH OF CONTRACT UNDER THE CISG

2.1 General

Specific performance is one of the remedies available for breach of contract under the CISG. Other remedies include claiming of damages under Article 74, avoidance of contract under Article 49 and reduction of the purchase price under Article 50. The focus of this paper will be on specific performance.

2.2 Specific performance

Under the CISG, an innocent party is entitled to compel the breaching party to fulfil his actual contractual obligation as per the contract. The CISG provides for the right of the buyer and the seller respectively to specific performance. Article 46, relating to the right of the buyer to specific performance provides as follows:

"(1) The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement.

(2) If the goods do not conform with the contract, the buyer may require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under article 39 or within a reasonable time thereafter.

(3) If the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard to all the circumstances. A request for repair must be made either in conjunction with notice given under article 39 or within a reasonable time thereafter."

The right to specific performance under Article 46(1) is only limited by resorting to an inconsistent remedy. Such an inconsistent remedy is avoidance of the contract under Article 49 or the reduction of the purchase price under Article 50.[37]

The right to claim a substitute delivery under Article 46(2) for non-conforming goods is available subject to the requirements for fundamental breach and foreseeability. Article 25 defines fundamental breach as follows:

"A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result."

A party should thus prove substantial deprivation of its expectations to be entitled to substitute goods. The requirement of foreseeability seems to be premised on avoiding undue hardship to the breaching party.

The buyer has a right to require the seller to repair under Article 46(3) unless that is unreasonable in the circumstances. Circumstances when it will be unreasonable might include a claim for repair which is technically not feasible or if the cost of repair exceeds the diminution in value caused by the defect.[38] In such circumstances the buyer would have to resort to a claim for damages under Article 74 or claim reduction of the purchase price under Article 50.

The right of the seller to require performance is provided by Article 62 which reads:

"The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement."

The wording of Articles 46 and 62 provide a clear right to performance with very few limitations. The logic behind it is to impress upon the parties the importance of their obligations. The two articles are also concessions to the civil law countries which generally have a preference for performance as opposed to damages.[39] Under Articles 46 and 62 a party can simply claim performance without showing the inadequateness of damages. The provisions are thus a restatement of the civil law position as opposed to the common law where specific performance is ordered only in exceptional circumstances.

2.3 Limits to Specific Performance through Article 28

The success of unifying the sales law in regard to specific performance through Articles 46 and 62 is surprisingly reversed by Article 28 which was undoubtedly inserted as a compromise provision. Article 28 provides that:

"If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgment for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention."

From this wording, it can be observed that the purpose of Article 28 is to preserve domestic law relating to specific performance. It excuses a court from ordering specific performance if it would not do so under domestic law in similar contracts. Bluntly speaking under Article 28 the availability of specific performance would be based on the court's domestic remedial scheme.[40] This is an unfortunate return to the homeward trend, which is a clear derogation from the object of unification as it sanctions the very problem which the Convention sought to resolve. The Convention sought to unify the law to get rid of divergent domestic legal principles, yet Article 28 allows continuation of that scheme.

It has been noted with concern that it undermines Article 46 and 62 because an aggrieved party must always fear that a court will not order performance[41] Such uncertainty is the very weakness the Convention sought to remove by establishing a single body of law. As such Article 28 is a slap in the face of the attempt to unification. The rationale behind the provision can be traced back to its drafting history.

2.4 Drafting history of Art 28

The idea of having specific performance as a primary remedy was mooted extensively at the drafting deliberations. Delegates from the civil law and socialist countries were of the view that a party to a contract should be entitled to full performance by virtue of the agreement itself and that the law should not force a non breaching party to accept anything less.[42] On the other hand, common law countries, especially the United States and the United Kingdom, argued that those legal systems that regard specific performance as an exceptional remedy should be allowed to continue to do so under the Convention.[43] It was in essence an attempt by each legal system to ensure that the Convention does not force it to depart from its own domestic law position.

2.4.1 Article 28 as a product of compromise

The initial wording of Article 28 was to the effect that a court was not bound to enter a judgment for specific performance unless it "could do so" under its own law. The effect of this wording was that it would only excuse those States which did not have a mechanism for specific performance from not ordering it.[44] This wording was clearly consistent with Articles 46 and 62 which provide a clear right to performance. However, under the lobbying of the United States and Britain, the wording was changed to "would do so" under its own law.[45] The rationale was thus to allow these common law legal systems that regard specific performance as an exceptional remedy to continue to do so under the Convention. Common law countries did not want to depart from their system where specific performance is an exceptional remedy whereas civil law systems insisted on the availability of specific performance as a primary remedy. The compromise was thus to satisfy both sides by allowing them to safeguard their domestic law relating to performance and save the negotiations from collapse over a single issue.[46] Succumbing to this change was probably the death nail in the unification of the area of specific performance.

2.5 Effect of Article 28 on Specific Performance

The real effects of Article 28 can be understood after an analysis of key phrases, especially on how they affect the remedies provided under Article 46 and 62. The key provisions that require enquiry are "judgment of specific performance, "similar contracts of sale", "under its own law" and "the court is not bound"

2.5.1 Judgment of specific performance

Since Article 28 is primarily addressed to domestic courts, one would wonder whether a judgment of specific performance is what a domestic court refers to as such, or whether there is a definition to be attached to the phrase that is in line with its meaning under the Convention. It has been argued that the temptation to resort to domestic definitions should be resisted. The phrase should thus be interpreted to mean any action that may be brought under Articles 46 and 62. According to this interpretation a judgment of specific performance thus includes a claim for the purchase price under Article 28 and a claim by the buyer for the performance by the seller of all his obligations.[47] Such obligations include delivery of goods, if delivered goods are non-conforming; delivery of substitute goods; [48] and the right to claim repair.[49] A judgment of specific performance under the Convention is thus any order demanding performance of contractual obligations. This, therefore, means any right to performance under Articles 46 and 62 is subjected to Article 28.[50] The extent to which a party can enjoy such remedies is then purely a matter of the extent to which they are recognised under domestic law.

2.5.2 Similar contracts of sale

The binding nature of Article 28 is restricted only to those cases where a court would order specific performance in similar contracts of sale not governed by the Convention. The definition of such similar contracts is however not provided in the Convention. The question which may arise is whether these similar contracts are necessarily international sales or simply sales of a similar subject nature. Similar contracts of sale not governed by the Convention might be contracts for the sale of goods between parties whose places of business are in the same country or contracts for the sale of goods between parties in non-Contracting States.[51] A further question which might arise on the construction of similar contracts is, what features should a court look at in determining whether a contract governed by the CISG is similar to the types of contracts for which specific performance is available under domestic law.

Walt suggests that similar contracts should be limited to international sales.[52] He further suggests that such similar international sales are those where the goods are non standard or scarce in the buyer's local market.[53] Walt's definition is an attempt to ensure that any claim for specific performance under the CISG will succeed by qualifying under the exceptions under which such a remedy is available in the common law systems, for example where the goods are unique or are scarce.[54] It is thus an interpretation which encourages a uniform approach to specific performance, thus achieving the desired uniformity.

2.5.3 "its own law"

Under Article 28 a court is not bound to enter a judgment of specific performance unless it would do so under its own law. It is unclear whether this phrase refers only to the domestic contract law rules of the forum or also to the choice of law rules of private international law. If the phrase is construed to include the choice of law rules, then the issue of specific performance may be governed by a law which is inconsistent with the domestic law of the forum. The effect of that would be to resurrect difficult choice of law issues in many international disputes and make the availability of specific performance more uncertain.[55]

A closer look at the history of Article 28, however, seems to suggest that "its own law" refers to the forum court's domestic law to the exclusion of choice of law rules. Article 28 is based on a substantially similar provision in the 1964 Sales Convention. The Article 27 draft of ULIS provided that the buyer's right to specific performance depended on whether this was possible and permitted by the municipal law of the court in which the action is brought. The Special Commission that prepared the draft in responding to comments by governments emphasised that the draft referred to the lex fori.[56] The virtual identicalness of the 1964 provision and the CISG's provision indicates that the reference in Article 28 to "its own law" refers to the domestic law of the forum.[57]

Interpreting "its own law" to refer only to the domestic law of the forum also accords with the rationale of Article 28. The debate behind Article 28 centered on the need to protect those systems which did not have a mechanism to enforce orders of specific performance and secondly to allow those legal systems that regard specific performance as an exceptional remedy to continue to do so.[58] The rationale was thus to safeguard domestic law practice. It would be absurd to construe Article 28 as making it discretionary for a court to grant specific performance if it would not do so in similar domestic contracts but to require it to apply the law of some state that may require performance if choice of law rules point to application of such law. Such an interpretation would defeat the objective of Article 28; hence "its own law" should be confined to the domestic law of the forum.

2.5.4 "the court is not bound"

Article 28 is worded in a negative way, the "court is not bound". It thus leaves the domestic court with the discretion to decide whether it should grant specific performance notwithstanding the restrictive nature of its domestic law or not.[59] The real question is how is this discretion to be exercised in the wake of an international instrument such as the CISG and what principles are to guide such exercise of discretion? These questions can only be answered after first looking at the domestic law approaches of different jurisdictions. It is only after finding whether they bring divergent interpretations divorced from the purposes of the CISG that an attempt would be made to see if such divergent results can be cured through interpretation.

CHAPTER 3: SPECIFIC PERFORMANCE UNDER DOMESTIC LAW AND ITS IMPACT ON ARTICLE 28 CISG

3.1 Specific performance under civil jurisdictions

Under the civil law systems, specific performance is generally regarded as the primary remedy for breach of contract. This is primarily based on the acceptance of the doctrine of pacta sunt servanda, which embodies the importance of the bargain made by the parties. Parties are therefore expected to fulfil their obligations once a contract has been made.[60] The breaching party is not given the option of paying damages or performing. Such an option exists for the injured party to exercise. This notion is based on the good faith principle that a party should not be allowed to benefit from his own wrong doing.[61] To allow a party to buy itself out of a contract that it has violated is perceived as promoting bad faith breaches; hence the right of the innocent party to claim performance as a primary remedy. This approach is followed through out the civil law world.[62]

Under Spanish law, specific performance is the primary remedy for breach. Article 1096 of the Spanish civil code provides that "when what should be delivered is a determinate thing, the creditor ... can compel the debtor to perform the delivery ..." Under the law of Louisiana, specific performance is also considered a substantive remedy for breach of contract. Article 1986 of the Louisiana civil code provides that "the court shall grant specific performance: - if the obligee so demands, where the obligor fails to deliver a thing or perform an obligation to deliver a thing or not to do an act or to execute an instrument." Under the Louisiana code, specific performance is thus available as long as the obligee has claimed performance or delivery. It is therefore in sharp contrast to the position in common law systems where one has to first prove insufficiency of damages.

Among major trading states, China is another country where specific performance is a primary remedy. Specific performance is considered a fundamental principle of Chinese contract law.[63] In Denmark the basic remedy for a breach of contract is an order for the fulfilment of the contract except in the case of an employment contract.[64] Under French law, the civil code provides that the innocent party may either seek specific performance or have the contract resided and claim damages.[65]

In Zimbabwe, which is a hybrid of both the common law and the civil law, specific performance is available as a primary remedy for breach. The right to performance can be claimed in any case requiring performance subject to a few exceptions.[66]For example, specific performance cannot be claimed if the obligation is of a personal nature, for example enforcement of an employment contract. Specific performance can also be refused if it would cause undue hardship to the breaching party or where it will be impossible, for example claiming a thing which is no longer in existence.[67]

These exceptions are also generally accepted in most civil law systems. Thus, most civil law countries accept that performance should not be ordered for a contract of service or where it will cause undue hardship.[68] It is interesting to note that the approach of civil law countries to specific performance fits in well within the CISG's remedial framework. Articles 46 and 62 emphasise the right of the buyer and the seller respectively to specific performance. This conforms to the civil law position that specific performance should be available as a primary remedy. Article 46(3) limits the right to repair where it is unreasonable in the circumstances. This limitation accords with the civil law approach where specific performance is refused where it will cause undue hardship.

In relation to non-conforming goods, Article 46(2) provides for the right to require performance only if the non compliance amounts to fundamental breach. Since this is a lower threshold as opposed to the general right to performance in the civil law systems, civil law countries should have no problem complying with this requirement. It should also be observed that under the civil law systems, the impact of article 28 is insignificant on the right to performance under Articles 46 and 62. This is because the domestic law position is more liberal than the CISG's requirements.[69]

3.2 Specific performance under the common law

Common law systems have their own approach to the remedy of specific performance. While specific performance is a substantive right in the civil law systems, under common law the award of specific performance is discretionary. This will be highlighted with reference to the position of the United States and Britain.

3.2.1 Specific performance under the domestic law of the United States

Under American law, specific performance is not a primary remedy. It is only available at the discretion of the court in exceptional circumstances. Section 2-716(1) of the Uniform Commercial Code (UCC) provides that "a court may decree specific performance where the goods are unique or in other proper circumstances". In Madariaga v Morris, it was held that a plaintiff would have to prove that he would not be compensated adequately for his loss by the award of monetary damages.[70]

A plaintiff can thus not claim specific performance in any case without proving uniqueness or other proper circumstances. An occasion to interpret what may constitute such proper circumstances was presented in Magellan International Corporation v Salzgitter Handel GmbH. In this case it was held that it has to do with replaceability, the plaintiff need to allege difficulty of cover to state a claim for specific performance.[71] Specific performance is therefore not available for breach if the plaintiff can find other goods on the market. This is against the remedial provision under Articles 46 and 62 of the CISG where specific performance is provided as a primary remedy without having to prove inability to cover. If availability of specific performance is subjected to the limitations of domestic law under Article 28, then such a remedy would rarely be available under American law.

The American legal position in regard to breach of contract and damages is well captured in a dictum by Justice Holmes who observes that:

"... the duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it- - and nothing else. But this mode of looking at the matter obviously stinks in the nostrils of those who think it advantageous to get as much ethics into the law as they can."

By referring to morals, Holmes was referring to such principles as good faith which has no place in the American remedial scheme. It is argued that to adopt this approach for contracts governed by the CISG will be clearly wrong. To regard the principle of good faith as a mere ethical consideration will be wrong in the case of the CISG because good faith is one of the principles for interpreting the Convention under Article 7(1). Male fide breaches are therefore condoned under the American system as long the goods are not unique. This is in sheer contrast to the position under the civil law where specific performance is available to discourage male fide breaches.[72]

3.2.2 Specific performance under the domestic law of Britain

Under the English legal system, as in the American system, a plaintiff cannot claim specific performance as of right. Section 52 of the British Sale of Goods Act provides that: [73]

"In any action for breach of contract to deliver specific or ascertained goods the court may, if it thinks fit, on the plaintiff's application, by its judgement or decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages"

Availability of specific performance is therefore at the discretion of the court. In the exercise of this discretion, specific performance will not be granted when damages are sufficient compensation, there ought to be exceptional circumstances.[74]

Decisions by the English courts have consistently emphasised this requirement of insufficiency of damages as a pre-requisite for a claim of specific performance. In Sky Petroleum v VIP Petroleum,[75] the court emphasised the requirement of uniqueness and inadequateness of damages as a condition for specific performance. The court granted a petroleum buyer an order for specific performance because that was the only way to avoid exceptional hardship to him in a severe petroleum shortage. In Bulinke v Bede Shipping Co Ltd,[76] the court granted a decree of specific performance because the chattel was of a rare brand and of practically unique value to the buyer.

Specific performance is therefore only available for those exceptional cases of inability to cover or uniqueness. This is further demonstrated in CN Marine Inc v Stena Line.[77] Though it is common under common law systems, such as the United States to order a remedy of specific performance for the sale of ships and aircrafts because of their uniqueness,[78] in the Marine case, it was held that the buyer was not even prima facie entitled to a decree of specific delivery of the ship. It was further held that the mere inconvenience caused to him and the possibility of remote loss where not enough to justify the buyer's entitlement to specific performance. He had to prove that the particular ship was of special importance to him in that its design was particularly suited to his needs or the like.

3.3 The civil law-common law divide and Article 28 CISG

The above discussion illustrates that the approach of the civil law and common law courts to the remedy of specific performance is different. Whilst under civil law the remedy is generally available in all cases requiring performance subject to a few exceptions, common law courts take the opposite view. Damages are the primary remedy while specific performance is only available in exceptional circumstances. If Article 28 is to be construed as having been intended to allow the courts to maintain their approach in regard to specific performance then clearly no unification was achieved in this area.

Indeed some well respected commentators are of the view that Article 28 was intended to allow courts to preserve their domestic law relating to specific performance under the CISG. Honnold notes that Article 28 is meant to "restrict the availability of specific performance in both systems, common law courts will be referred to their restrictive law which may give performance as a discretionary remedy while civil law courts will be referred to their permissive law but will have Article 28 to rely on in refusing to grant performance when the burdens are too great."[79]

His observation falls nothing short of saying Article 28 was meant to remove specific performance from CISG regulation and to be bring it within the realm of respective domestic laws.

Such an interpretation seems to accord with the compromise nature of the CISG. As Schlechtriem notes:

"Right from the beginning of discussions on the Uniform Sales law, there seemed no prospect of bridging the different approaches adopted by the different legal systems. Rabel had said that the conflicting basic approaches could not be eradicated or fused ... The problem was therefore solved by means of a compromise: a court is to treat an action for specific performance as it would under its own law (lex fori). Courts of Contracting States which grant specific performance only as an exceptional remedy are not required to alter fundamental principles of their judicial procedure. It is a matter of judicial procedure and substantive law."[80]

If this be the true construction of Article 28, then as a product of compromise, it has failed to bring the desired uniformity which is the primary goal of the CISG. It also brings to waste the spirit of Articles 46 and 62 which seek to promote the general right to specific performance in all legal systems. At best, Article 28 was, as Kastely notes, "a triumph of national pride over the goals of the Convention."[81] But does this mean that the concession made through the insertion of Article 28 entirely destroyed any attempt made to establish a common approach to the availability of specific relief under the CISG?

There are divergent opinions in answer to the above question. Catalano is of the view that to perceive Article 28 as creating a civil law-common law divide is ill conceived. He argues that though theoretically there might be differences in the approaches of these courts, there is likely to be no differences in practice. He points out that parties in international trade would rarely seek the remedy of specific performance if damages are adequate. In those cases where a party would insist on specific relief, such circumstances would usually fall in the exceptional circumstances where the relief is available under common law, for instance where the goods are unique.[82]

The truth of Catalano's argument is doubtful. It fails to take into account the various reasons why a party might prefer specific performance as opposed to damages. Apart from the uniqueness of the goods, it has been observed that a party would generally prefer specific performance because damages may be difficult to quantify. Even where they are quantifiable, the actual amount may generally depend on the court's exercise of its discretion.[83] Other scholars have analysed the economic efficiency of specific performance and concluded that specific performance is the most efficient even if alternative goods might be available. They argue that damages do not fully compensate an injured party for all financial loss, delay and inconvenience caused by the breach, hence a party's preference to performance.[84]

It has to be further noted that claiming damages in some countries is simply a slap on one's own face. There are countries whose inflation rates are unprecedented as to defeat the whole object of damages. In Zimbabwe the current official rate of inflation is 7300%,[85] on the other hand the prescribed rate of interest is 30% per annum.[86] If a party sues for damages, by the time such amount is duly paid, it might be worthless. Even if judgment is given in another stable currency, because of foreign currency shortages and extreme regulation under the Exchange Control Act, the defended is unlikely to be able to comply. This picture is equally true of many other countries with unstable economies. To equate the general availability of specific performance with the exceptional availability under the common law will be thus to miss the point. There are a lot of underlying reasons for preference to performance as opposed to damages than just the issue of uniqueness of goods. One has to perceive the fate of a buyer in an isolated place in the developing world, hardly having electricity or the basic infrastructure such as roads, not to mention internet and telephone facilities. It may be extremely difficult for such a buyer to look at another market after breach, though the goods might be readily available. His primary remedy would be to seek performance.

There is thus to be a difference even in practice in the availability of specific performance between the common law and civil law countries. Catalano's argument that in practice the might be no difference is thus flawed. In this regard Ulin notes:

"It is worth noting that in the civil law countries specific performance is the routine contract remedy... This is a difficult situation to understand if there is really something to the contention that confining equitable relief to the case of unique goods corresponds to what freely contracting parties would prefer. Perhaps the tastes of contracting parties in Western Europeare vastly different from those in the common law countries, but this is very doubtful."[87]

Availability of specific performance under domestic law is not uniform, leaving each court to continue to follow the dictates of its domestic law in matters governed by the Convention will not bring uniformity and has already failed to bring uniformity, which is the main goal of the CISG.[88] It can however not be concluded that achieving uniformity in specific performance under the CISG is impossible under the present wording of Article 28. While it is true that uniformity cannot be achieved by continually subjecting availability of specific performance to the tenets, idiosyncrasies and peculiarities of domestic law. It is argued that by adopting a particular interpretational methodology, the inherent compromises might be overcome and the desired uniformity can be achieved. The next chapter is devoted to an analysis of the interpretational methodology which should be best adopted for Article 28 in a bid to achieve the Convention's set goals.

CHAPTER 4: A PROPER INTERPRETATION OF ARTICLE 28

4.1 Interpretation in line with the Convention's criteria

While most writers have rushed to simply interpret Article 28 as requiring States to do no more than apply their domestic law to specific performance under the Convention, the result of such an approach is disastrous. It will result in a plethora of divergent approaches to the availability of the remedy of specific performance. An interpretation of Article 28 which legitimises these divergent interpretations is caused by too much regard being placed on the literal reading of the text, the drafting history and the delicate compromises that were made in the drafting history.[89]

Yet, it has to be noted that the compromise character of the CISG is not a principle nor is it a criterion for the interpretation of the CISG. The criteria to be applied in the interpretation of the CISG are laid down in Article 7 of the CISG which provides that:

"(1) 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.

(2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled 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."

Article 7(1) sets out the general principles to be observed in the interpretation of the Convention. Article 7(2) is applicable to those matters which are provided for under the CISG but not settled in it. It follows therefore that for those matters which are provided for and are expressly settled in the Convention, their interpretation is to be confined to Article 7(1).[90] Since these principles are to be available in the interpretation of the entire Convention that also means a domestic court interpreting Article 28 must also be completely mindful of this provision. This is notwithstanding that Article 28 seems to allow such court to simply look to its domestic law for recourse.

Article 7(1) sets out three important principles to be applied in the interpretation of the CISG. They are:

1) regard to its international character;

2) the need to promote uniformity in its application; and .

3) the observance of good faith in international trade.

Through a proper application of these principles, the inconsistencies in the availability of the remedy of specific performance can be reconciled under the Convention.

4.2 International character of the CISG

Article 7(1) provides that regard "is to be had" for the international character of the CISG. This phrase is a directive providing for the interpretation methodology which ought to be followed. If the article was meant to provide a mere guideline for interpretation, it would have been coined using such words as regard "may be had". Absence of such language thus denotes the peremptory nature of the interpretation methodology provided by Article 7.

DiMatteo observes that the international character calls for an autonomous interpretation of the CISG, viewing it as an international instrument and giving it an interpretation divorced from the idiosyncrasies of domestic jurisprudence.[91]

Similar sentiments are echoed by Roth, who observes that, "autonomous interpretation requires that the CISG's principles be determined by reference to its own principles and objectives with great care being taken to avoid the homeward trend."[92]

Paying attention the international character of the Convention therefore helps a court from being caught up in the temptation of applying its national laws to matters governed by the CISG. After all it was because of the need to overcome the differences in the laws of the various legal systems that the Convention was made. In deciding whether to award specific performance or not, a court should therefore look at the remedial scheme provided in the Convention and try to promote it. Articles 46 and 62 provide for a clear right of the buyer and the seller respectively to specific performance. The court should therefore where ever possible promote this remedial scheme. That is what "regard to its international character" entails, namely promoting the goals of the Convention and ensuring an interpretation which is consistent with the other provisions of the CISG.

Although article 28 allows a court to be guided by its domestic law to decide the availability of specific performance for matters governed by the CISG, it does not prevent it from not doing so. An interpretation of Article 28 allowing a court to give effect to the right to performance recognised under Articles 46 and 62 should thus be preferred as it furthers and accords with the call for the regard to the Convention's international character.[93] The relevant part of Article 28 reads: "... a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention." There is thus clearly nothing in the article which prevents a court from ordering performance even if it would not do so in similar domestic matters.

It appears that a court can miss this mandate to have regard to the international character of the CISG by being too literalistic in its interpretation, hence failing to order specific performance when domestic law does not allow it. In the case of Magellan International Corporation v Salzgitter Handl GmbH, the Illinois Federal Court noted that, CISG article 46 permitted a buyer to require a seller to perform unless the buyer resorted to a remedy inconsistent with that requirement. It also noted that article 46 would appear to make specific performance routinely available under the CISG. The court however also noted that article 28 qualifies this right to specific performance.

While the court noted correctly that the Convention generally allows for performance, to then conclude that article 28 qualifies articles 46 and 62 was wrong. The court simply applied a wrong interpretation method not guided by the international character of the Convention. As Gebauer notes, autonomous interpretation is a principle that gives preference to a particular teleological interpretation of a legal text.[94] Such a teleological or purposive approach would in this case require an interpretation which would promote the availability of specific performance as provided in articles 46 and 62. In other words, article 28 should not qualify the other articles requiring performance but it should be given an interpretation which conforms to them. If that is not the case, then there was no reason laying down forms of specific performance which can be claimed under Article 46 and 62 if in the end the court would just look to its domestic law.

Common law countries should therefore depart from their usual practice of granting specific performance as an exceptional remedy and readily make it available for CISG governed transactions. This is because the requirement of uniqueness is a domestic standard, applying it to CISG governed transactions is a clear sign of the homeward trend. Such an approach fails to accord respect to the international character of the CISG.

4.3 Need to promote uniformity

Though the need to promote unification is one of the principles to be applied in the interpretation of the Convention, the need to promote uniformity is more than just a criterion for interpretation. Unification stands to be the main goal behind the CISG.[95] It was the need to establish a uniform body of law to govern international sales that explains the birth of the CISG. This noble goal to establish a uniform law is also set out in the preamble which provides that "... adoption of uniform rules which govern contracts for the international sale of goods and take into account the different social, economic and legal systems would contribute to the removal of legal barriers in international trade and promote the development of international trade"

Because removal of legal barriers lies in the adoption of a single body of law and consistent interpretation of such law, it stands that having regard to the need to promote uniformity is the most important principle in the interpretation of the CISG.[96] Unification is different from harmonisation, while harmonisation is a call for laws which can co-exist though they are different, unification requires that the law be the same and be applied consistently to achieve the same results.[97] Bearing this distinction is crucial in formulating the approach which a court should adopt in interpreting Article 28.

While there might be debate in the standard of uniformity which is envisaged by the CISG, with some scholars agitating for absolute,[98] and some relative uniformity.[99] No matter which standard is applied, uniformity is different from harmonisation. The call of the CISG is for regard to the need to promote uniformity in its application. It does not speak of the need for harmony. This distinction should always deter a court from adopting an interpretation which simply accords with its domestic law.

Article 28 does not compel a court to adopt an approach to specific performance which is compatible with its domestic law. It simply provides that:

"If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention."

A court is simply not forced to order specific performance if it would not do so in similar contracts under domestic law. But would the absence of force entitle a court to then resort to its domestic law? It is argued that success of Conventions need not lie much in the mandatory or compelling nature of the language used but in the courts adopting approaches furthering the spirit of the enactment. A court interpreting Article 28 and using its permissive language to endorse its domestic law should be equally weary of the fact that each domestic court would adopt such an approach. It should be cognisant of the fact that the result of such an approach would be varied judgments from State to State. Such a result would obviously defeat the call for uniformity. A court should therefore adopt an approach which furthers the goal of uniformity.

The best way to achieve this in respect of Article 28 is for the court to adopt an approach where specific performance is readily available to promote the remedy as provided under Articles 46 and 62 of the CISG.[100] Common law courts should thus make the remedy readily available as provided for under Articles 46 and 62, not to restrict the availability of the remedy to exceptional circumstances. This approach would promote uniformity as it would match the civil law practice where such a remedy is readily available as a primary remedy for breach of contract. A common law court adopting this approach should by no means feel it is exercising a discretion conferred by Article 28 in a most generous way. Instead it would be complying with the mandatory interpretation criteria as provided for in the Convention. Article 7 stipulates that regard is to be had to the need to promote uniformity. The fact that a positive duty was established by the use of regard is to be had as opposed to regard may be had shows that a court which fails to consider the need for uniformity in its interpretation would have failed in its duties.

4.4 Observance of good faith in international trade

Another requirement for the interpretation of the CISG as provided in Article 7(1) is to have regard to the observance of good faith in international trade. It is however unsettled whether good faith is merely a tool for the interpretation of the Convention or it is a principle to be applied in the conduct of the parties as well. Farnsworth outlines the history to the inclusion of the inclusion of the principle of good faith in the CISG.[101] He observes the contentious debate accompanying the provision. This was mainly between the common law systems and the civil law systems. Common law countries were against the inclusion of the duty of good faith altogether in the Convention while civil law countries insisted on the need for the observance of good faith in the conduct of the parties. The result was a compromise to include good faith as a criterion for interpretation.

The place of good faith in the Convention thus remains unclear. Though one might argue that it can be restricted to the interpretation of the Convention, the Convention cannot be interpreted in a vacuum. One would still have to look at the conduct of the parties. Most scholars now favour an expanded use of Article 7(1)'s good faith principle to the dealings between the parties. One basis for such a new approach is that the use of the reasonableness standard throughout the CISG inherently requires the application of good faith to the conduct of the parties.[102] In support of this, the Secretariat Commentary references CISG provisions that are manifestations of the requirement of the duty to observe good faith in the conduct of the parties. The commentary refers to Articles 16(2)(b), 21(2), 29(2), 37, 38,39, 40, 49(2), 64(2), 82 and Articles 85-88. The principle of good faith should thus apply to both the interpretation of the Convention and to relations between the contractual parties.

Several decided cases also now seem to accept and apply this expanded principle of good faith. A Budapest arbitration applied the Article 7(1) good faith principle as a standard to be observed by the parties. The arbitrators noted that the issuance of a bank guarantee that had already expired was contrary to the principle of good faith.[103] In SARL BRI Production "Bonoventure" v Societe Pan African Export,[104] the seller was insistent to know where the jeans were being sent. It was agreed that the jeans were to be sent to South America and Africa. However, despite assurance to the contrary the purchaser sent the jeans to Spain. The plaintiff claimed 10,000 francs as compensation for abuse of process. The court agreed and found that the buyer acted contrary to the principle of good faith in international trade pursuant to article 7(1).

A court interpreting Article 28 should thus abide by the need to observe good faith in its expanded form which includes taking into account the conduct of the parties. Though there is no definition of good faith in the Convention, Powers defines good faith as, "an expectation and obligation to act honestly and fairly in the performance of one's contractual duties"[105] Summers suggests the best way to define good faith is to do so indirectly, by reference to bad faith.[106] Though these might be definitions born from their domestic laws, there seems to be consensus on what good faith entails generally. To this end Honnold remarks that, though the Convention's goal of uniformity bars the use of purely local definitions and concepts in construing an international text, this objection does not apply to good faith principles that reflect a consensus, a common core of meaning in domestic law.[107] These definitions applied in the case of specific performance require that parties should make every effort to perform their obligations as per the agreement in the contract. A party should avoid male fide breach or wilful failure to perform. If a court is to interpret Article 28 with the principle of good faith in mind, it should readily order performance to ensure parties fulfil their contractual obligations and the expectations of the other party.

Instead of simply endorsing its domestic law, a court should therefore by all means order specific performance to discourage male fide breaches. At the same time, the same principle can be used not to order performance when it would cause undue hardship on the breaching party.[108] A bona fide party would always act reasonably and fulfil its contractual obligations. At the same time it would expect the other party to fulfil its obligations too. A court should thus always strive to give an interpretation which accords with the contracting parties' expectations, that is to ensure fulfilment of obligations. This can be made by making specific performance readily available as a remedy. Common law courts should thus begin to discourage bad faith behaviour on CISG governed transactions by ordering specific performance readily. This way the desired uniformity can be achieved as this will bring their practice in line to the approach of civil law courts.

4.5 Exercising Article 28 Discretion in Arbitration Disputes

It has been noted above that the discretion to order specific performance embodied in Article 28 should be exercised in line with the Convention's goals and the interpretational methodology enshrined in Article 7. There is however a further unique element in international sales which should guide the court in the exercise of its discretion. Most international contracts have a dispute resolution clause, mainly in the form of an agreement to refer any disputes to arbitration. The applicable law is normally agreed by the parties. So often the arbitration is institutionalised such that the procedural rules are the institutional rules for example the ICC, LCIA or the UNICTRAL Model Law rules. The result is normally that a court is confronted only at the enforcement stage. Assuming the arbitration tribunal has ordered specific performance in pursuance of the CISG, to what extent should the court where enforcement is sought still look at its own law to decide whether to enforce such an order?

It is submitted that the reason why parties often resort to arbitration is to avoid the interference of domestic courts and the technicalities of domestic laws in the forum state.[109] The courts should therefore promote this method of dispute resolution by as far as possible enforcing the arbitral ruling notwithstanding its incompatibility with the approach of the domestic courts. This would also promote finality in litigation and course certainty in arbitration outcomes. So often the arbitration may take place in one country and then enforcement is sought in the country where the defendant has assets. The only link between that country and the arbitration will be the incidental location of the subject matter of the contract in that territory. Commenting in the approach which the court has to take in exercising its discretion over a foreign arbitration, Lord Mustil noted:

"In my opinion in deciding whether a statutory or other power is capable of being exercised by the court -- the court should bear constantly in mind that the parties are not before the court by choice, its law might be a stranger to the arbitration. In such a situation the Court should be very cautious in its approach both to the existence and to the exercise of its powers, least it cuts across the grain of the chosen curial law."[110]

A court confronted with an application for enforcement of an order for specific performance granted pursuant to the CISG should thus readily enforce such an order to respect the curial law or any other choice of law which would have been made by the parties. This would not only promote international commercial arbitration but the basic right to performance under the CISG's articles 46 and 62. It also respects the choice of law made by the parties and the concept of party autonomy also recognised in Article 6 of the CISG. If a court would decide not to enforce performance it would be usurping a function which primarily fall on the arbitration tribunal.

CHAPTER 5: CONCLUSION

5.1 Purpose of the study

The purpose of this paper was to analyse the effect of Article 28 of the CISG on the availability of the remedy of specific performance under the CISG. Further to that, to evaluate the extent to which Article 28 accords with the goals of the Convention, namely unification, and lastly, to suggest an interpretation which would be best suited to Article 28. Such an interpretation should promote the goal of uniformity and accord with the Convention's interpretation methodology as enshrined in Article 7.

5.2 Findings

The study showed that Articles 46 and 62 of the Convention establish a clear right to specific performance for both the buyer and the seller. These rights are however subjected to Article 28 which was brought in as a compromise provision. It having been necessitated by a sharp difference in the approaches of civil law and common law courts to the availability of specific performance, with neither party being prepared to yield its position to that of another. Common law courts regard specific performance as an exceptional remedy while civil law courts provide for specific performance as a primary remedy. The result was the insertion of Article 28 to allow each system to safeguard its domestic law in matters governed by the Convention in relation to specific performance.

This provision defeated the goal of uniformity. Uniformity requires a much higher level of consistence in the approach of courts to the interpretation of CISG provisions and need not be misconstrued with harmonisation which only requires co-existence. As was discussed in Chapter 3, the approaches of domestic courts to specific performance differ, depending on whether it is a common law or a civil law court that hears the matter.

5.3 Recommendations

To interpret Article 28 in a way that allows courts to safeguard their domestic law is wrong as it legitimises divergent domestic law approaches and resultantly defeats the goal of uniformity. The courts should hence exercise the discretion conferred by Article 28 to generally order specific performance. A court should base such an exercise of discretion on the general availability of specific performance under the CISG through Articles 46 and 62. The courts should also generally grant specific performance in pursuance of the interpretation criteria provided for under Article 7. Article 7 requires a court to have regard to the need to promote uniformity, to the CISG's international character and the observance of good faith in international trade.

If applied, these principles point to the need to generally provide for specific performance. The observance of good faith entails that parties are required to perform as per their agreement. It also requires that bad faith breaches should be discouraged by orders of specific performance. A party acting in good faith is always diligent to fulfil its obligations. A court should therefore do no less but force parties to fulfil their obligations. The call to take regard of the Convention's international character should deter the court from simply looking at its own domestic law's remedial scheme in deciding whether to order performance. Instead, regard should be had to the underlying principles of the CISG and other provisions, such as Articles 46 and 62 which point to a clear right to performance. The need to promote uniformity should force a court to consider the effect of its interpretation; it should always be wary of whether it would promote uniformity and consistency with the approach of other courts. The best way to do this is to avoid the intricacies of domestic law and simply give an interpretation guided by the Convention. Such an approach should result in courts generally granting performance as a remedy for breach.

The desired uniformity can thus be achieved if all courts adopt an interpretation of Article 28 which is guided by Article 7 and which promotes the object of Articles 46 and 62. The paper has shown that although uniformity in the availability of specific performance was seemingly defeated by the insertion of Article 28, unification is still possible if the courts exercise the discretion conferred upon them by Article 28 with the goal of uniformity in mind and through applying the Article 7 criteria. The need for uniformity and the criteria for interpretation provided by Article 7 require that all courts recognise the remedy of specific performance as a primary remedy for contractual breach. By so doing the desired uniformity will be attained.

The future of uniformity in the availability of specific performance thus lies with the courts. As long as they adopt the approach recommended in Chapter 4, which is guided by the interpretation methodology enshrined in Article 7, uniformity could be achieved and the problems caused by the compromise nature of Article 28 can be overcome. As Felemegas rightly observes:

"The area where the battle for the international unification will be fought and won, or lost, is the interpretation of the CISG; only if it is interpreted in a consistent manner in all the legal systems that have adopted it, will the efforts put into its drafting be worth anything."[111]


BIBLIOGRAPHY

Books

1. Atiyah The Sale of Goods 8th ed Oxford (1990).

2. Christie RH Business Law in Zimbabwe 2nd ed Juta (1999).

3. Eörsi Contracts in the Socialist Economy: General Survey in VII-5 International Encyclopaedia of Comparative Law 3 (1981).

4. Felemegas J An International Approach of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Law Cambridge (2007).

5. Goode R Transnational Commercial Law Oxford (2007)

6. Honnold J Uniform Law for International Sales Under the 1980 United Nations Convention 2nd ed Kluwer (1991).

7. Honnold J Documentary history of the uniform law for International sales: the studies, deliberations and decisions that led to the 1980 United Nations Convention with introductions and explanations Kluwer (1989).

8. Osborne P Unification or Harmonisation: A Critical Analysis of the United Nations Convention on Contracts for the International Sale of Goods LL.M Thesis, University of Hull (2006).

9. Schlechtriem P Commentary on the UN Convention on the International Sale of Goods (CISG) Oxford (2005).

10. Treitel Remedies for Breach of Contract VII -16 International Encyclopaedia of Comparative Law (1976) 16.

11. Zeller B Damages under the Convention for the International Sale of Goods Oceana Publications (2005).

Journal Articles

1. Catalano J "More Fiction than Fact: The perceived differences in the Application of Specific Performance Under the United Nations Convention on Contracts for the International Sale of Goods" (1997) 71 Tulane Law Review 1807.

2. Date-Bah "The United Nations Convention in Contracts for the International Sale of Goods,1980: Overview and Selective Commentary" 11 Rev Ghana L 50.

3. Dawson F "Specific Performance in France and Germany" (1959) 57 Michigan Law Review 495.

4. DiMatteo L "The Interpretative Turn in International Sales Law: An Analysis of Fifteen Years of CISG Jurisprudence" (Winter 2004) 34 Northwestern Journal of International Law and Business 299-440.

5. Farnsworth E "Damages and Specific Relief" (1979) 27 American Journal of Comparative Law 247.

6. Farnsworth E "The Vienna Convention: History and Scope" (1984)18 Int'l Law 17.

7. Farnsworth E "Developing International Trade" (1979) 9 California Western International Law Journal 461.

8. Ferrari F "Uniform Interpretation of the 1980 Uniform Sales Law" (1994-95) 24 Georgia Journal of International and Comparative Law 188

9. Ferrari F "International Sale Law and the Inevitability of Forum Shopping: A Comment on Tribunale Di Rimi, 26 November 2002" (2004) 23 Journal of Law and Commerce 169.

10. Flechtner H "The Several Texts of the CISG in a Decentralised System: Observations on Translations, Reservations and other Challenges to the Uniform Principle in Article 7(1)" (1998) 17 Journal of Law and Commerce 187.

11. Gebauer M "Uniform Law, General Principles and Autonomous Interpretation" (2000) Uniform Law Review 683.

12. Goldring J "Unification and Harmonisation of the Rules of Law" (1978) 9 Federal Law Review 284.

13. Herman S "Specific Performance Comparative Analysis" Issue 1 (2003) 7 Edinburgh Law Review 5.

14. Hackney P "Is the United Nations Convention on the International Sale of Goods Achieving Uniformity?" (2001) 61 La L Rev 473.

15. Honnold J "Uniform Law for International Trade: Early 'Care and Feeding' for the Uniform Growth" (1995) 1 International Trade and Business Law Journal 1.

16. Kamba W "Comparative Law" (1974) 23 International and Comparative Law Quarterly 485-501.

17. Kastely A "Unification and Community: A Rhetorical Analysis of the United Nations Sales Convention" (1988) 8 Northwestern Journal of International and Business Law 574.

18. Kastely A "The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention." (1988) 63 Washington Law Review 607.

19. Keily T "Harmonisation and the United Nations Convention on Contracts for the International Sale of Goods" Issue 2003#1 Nordic Journal of Commercial Law for the University of Turku, Finland.

20. Koneru P"The International Interpretation of the UN Convention on Contracts for the International Sale of Goods: An Interpretation Based on General Principles" (1997) 6 Minn J Global Trade 105.

21. Kritzer A "The Convention on Contracts for the International Sale of Goods: Scope Interpretation and Resources" (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 147.

22. Lando H "The Myth of specific performance in civil law countries" American Law & Economics Association Annual Meetings (2004) paper 15.

23. Linzer P "On the Amorality of Contract Remedies-Efficiency, Equity and the Second Restatement" (1981) 81 Columbia Law Review 111.

24. Mazzacano P "Canadian Jurisprudence and the Uniform Application of the UN Convention on Contracts for the International Sale of Goods." (Spring 2006) 18 Pace International Law Review, Issue No 1.

25. Powers P "Defining the Indefinable: Good Faith and the United Nations Convention on Contracts for the International Sale of Goods" (1999) 18 Journal of Law and Commerce 333.

26. Rossert A "Critical Reflections on the United Nations Convention on Contracts for the International Sale of Goods" (1988) 45 Ohio State Law Journal 265.

27. Roth M "Interpretation of the CISG According to the Principles of International Law" (1999) 4 International Trade and Business Law Annual 3.

28. Schwartz "The Case of Specific Performance" (1979) 89 Yale Law Journal 271.

29. Summers M "The General Duty of Good Faith - Its Recognition and Conceptualisation" (1982) 67 Cornell Law Review 810.

30. Walt S "For Specific Performance Under the United Nations Convention" (1991) 26 Texas International Law Journal 211.

31. Whinship P "Changing Contract Practices in the Light of the United Nations Sales Convention: A Guide to Practitioners."(1995) 29 International Lawyer 525.

32. Zwart S "The New International Law of Sales: A Marriage Between Socialist, Third World, Common Law and Civil Law Principles" (1988) North Carolina Journal of International Law and Commercial Regulation 109.

Cases

1. Bulinke v Bede Shipping Co Ltd [1927] 1 KB 649.

2. Budapest Arbitration Proceedings V694124, November 17 1995.

3. Channel Tunnel Group Ltd and Others v Balfour Beauty Construction Ltd and Others [1993] All ER 664(HL).

4. CN Marine Inc v Stena Line [1982] 2 Lloyd's Rep 336.

5. Madariaga v Morris 639 S.W.2d 709 (Tex Crt.App 1982).

6. Megallan International Corporation v Salzgitter Handel GmbH, US District Crt of Illinois, USA, 17.12.99

7. SARL BRI Production"Bonaventure" v Societe Pan African Export, Cour d'appel Gronoble, 22 February 1999, available at <http://cisgw3.law.pace.edu/cases/950222f1.html>

8. Scruttons Ltd v Midland Silicones Ltd (1969) AC 446(HL).

9. Sky Petroleum v VIP Petroleum [1974] 1 AII ER 954.

Conventions and International instruments

1. United Nations Convention on Contracts for the International Sale of Goods (1980) [CISG].

2. Unidroit Principles of International Commercial Contracts.

3. The Principles of European Contract Law.


FOOTNOTES

1. Though the necessary ratifications were secured by December 1987, the Convention came into effect on 1 January 1988.

2. Honnold "Uniform Law for International Trade: Early 'Care and Feeding' for the Uniform Growth" (1995) 1 International Trade and Business Law Journal [University of Queensland Australia] 1-10, p 3.

3. As of 3 August 2007, see <http://www.unilex.info>.

4. Osborne Unification or Harmonisation: A Critical Analysis of the United Nations Convention on Contracts for the International Sale of Goods, December 2006 thesis (University of Hull) 13.

5. Kastely "Unification and community: A Rhetorical Analysis of the United Nations Sales Convention" (1988) 8 Northwestern Journal of International and Business Law 574 575-576.

6. Kastely (1988) 8 Northwestern Journal of International and Business Law 577.

7. Goldring "Unification and Harmonisation of the Rules of Law" (1978) 9 Federal Law Review 284 288. This is also highlighted in the preamble to the CISG which provides for "... the adoption of uniform rules which govern contracts for the international sale of goods, ... would contribute to the removal of legal barriers in international trade and promote the development of international trade."

8. Article 7(1): "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."

9. Goldring (1978) 9 Federal Law Review 289.

10. Kamba "Comparative Law" (1974) 23 International and Comparative Law Quarterly 485 501.

11. (1978) 9 Federal Law Review 289.

12. See Article 7(1).

13. Scruttons Ltd. v.Midland Silicones Ltd (1962) AC 446 471 (HL) where the House of Lords stated. "It would be deplorable if the nations, after protracted negotiations, reach agreement ... and that their several courts should then disagree as to the meaning of what they appeared to agree upon."

14. Keily "Harmonisation and the United Nations Convention on Contracts for the International Sale of Goods" Nordic Journal of Commercial Law of the University of Turku, Finland, lssue 2003 # 1 p4.

15. The Interpretative Turn in International Sales Law: An Analysis of Fifteen years of CISG Jurisprudence. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440, 301.

16. Osborne Unification or Harmonisation 15.

17. Ferrari "International Sale Law and the Inevitability of Forum Shopping" (2004) 23 Journal of Law and Commerce 169 170.

18. Goldring (1978) 9 Federal Law Review 289.

19. Such is the irony of Article 28 of the CISG which purportedly sought a unification of the varied domestic laws on specific performance. As it is to be argued later, at best, the provision was a success in harmonisation but not unification.

20. Roth "Interpretation of the CISG According to the Principles of International Law" (1999) Vol IV International Trade and Business Law Annual 3.

21. Eörsi "A Proposal For The 1980 Vienna Convention On Contracts For The International Sale of Goods" (1983) 31 The American Journal of Comparative Law 333 352-355.

22. Kritzer, "The Convention on Contracts for the International Sale of Goods: Scope, Interpretation and Resources" (1995) Cornell Review of the Convention on Contracts for the International Sale of Goods 147 211.

23. Zwart "The New International Law of Sales : A Marriage Between Socialist, Third World, Common Law and Civil Law Principles" (1988) North Carolina Journal of International Law and Commercial Regulation 109 128-130.

24. Ibid.

25. Ibid.

26. Rossett "Critical Reflections on the United Nations Convention on Contracts for the International Sale of Goods" (1988) 45 Ohio State Law Journal 265 268.

27. Rosett (1988) 45 Ohio State Law Journal 266.

28. Flechtner "The Several Texts of the CISG in a Decentralised System: Observations on Translations, Reservations and other Challenges to the Uniform Principle in Article 7(1)" (1998) 17 Journal of Law and Commerce 187 189.

29. The compromise relating to specific performance is discussed in chapter 2.

30. Ibid.

31. Gebauer "Uniform Law, General Principles and Autonomous Interpretation" (2000) Uniform Law Review 683 686.

32. Rosett (1988) 45 Ohio State Law Journal 267.

33. Such as Article 28.

34. Roth and Happ "Interpreting the CISG According to Principles of International Law" (1999) Vol. IV International Trade and Business Law Annual 1 3.

35. Date-Bah "The United Nations Convention on Contracts for the International Sale of Goods, 1980: Overview and Selective Commentary" 11 Rev. Ghana L 50 62 97.

36. See Article 7(1).

37. Kastely "The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention." (1988) 63 Washington Law Review 607 619.

38. Ibid.

39. Will "Article 46 Commentary" in Commentary on the International Sales Law; The 1980 Vienna Sale Convention 333-341.

40. Kelly "Harmonisation and the United Nations Convention for the International Sale of Goods" 2003 # 1Nordic Journal of Commercial Law.

41. Kastely (1988) 63 Washington Law Review 619.

42. Summary Records of the First Committee (18th mtg), U.N, Doc. A/CONF,97/C.1/SR.18 (1980)

43. Ibid 302.

44. Ibid.

45. Honnold Documentary History of the Uniform Law for International Sales. The Studies, Deliberations and Decisions that led to the United Nations Convention with Introductions and Explanations (1989) 188.

46. Ibid.

47. Article 46(1) is broadly referring to simply obligations without specifying. That means any contractual obligation can be enforced under Article 46.

48. Article 46(2).

49. Article 46(3).

50. Kastely (1988) 63 Washington Law Review 619.

51. Herman "Specific Performance: A Comparative Analysis" Issue 1 (2003) 7 Edinburgh Law Review 5

52. Walt "For Specific Performance Under the United Nations Convention" (1991) 26 Texas International Law Journal 21 235.

53. Ibid.

54. The approach of common law countries to specific performance is discussed in Chapter 3.

55. See Kastely note 49 supra.

56. See "Analysis of Comments and Proposals Relating to Articles 18-55 of the Uniform Law on International Sale of Goods (ULIS); Note by the Secretary-General"; U.N. Doc. A/CN.9/WG.2/WP.10- (1971) ("lex fori"), reprinted in [1972] 3 Y.B.U.N. Comm'n on Int'l Trade L. 54, 60, U.N. Doc. A/CN.9/SER.A/1972

57. Honnold Uniform Law for International Sales Under the United Nations Convention 2 ed (1991) 195.

58. See Summary Records of the First Committee (18th mtg), U.N. Doc. A/CONF,97/C.1/SR.18 (1980).

59. Date-Bah 11 Rev. Ghana L 50 97.

60. Treitel "Remedies for Breach of Contract" in VII-16 International Encyclopedia of Comparative Law (1976) 16.

61. Schwartz "The Case for Specific Performance" (1979) 89 Yale Law Journal 271 305.

62. Treitel International Encyclopedia 16.

63. Yuonki Basic Principles of The Economic Contracts Law (1985) 129, see also Article 27 of the Economic Contract Law Code.

64. Whincup Contract Law and Practice (1990) 232.

65. See Article 1425-1 of the Neuveau code de procedure civile,

66. National University of Science and Technology v Minister of Higher Education 2005 HB 307.

67. Christie Business Law in Zimbabwe 2ed Juta (1999) 125.

68. Lando & Rose "The myth of specific performance in civil law countries" American Law &Economics Association Annual Meetings (2004) paper 15.

69. Farnsworth "Damages and Specific Relief" (1979) 27 American Journal of Comparative Law 247 249.

70. 639 S.W.2d 709 (Tex.Ct.App.1982), see also Stephen Mach &Tool Inc v D & H Mach Consultants, Inc 417 NE.2D 579 (Ohio 1979).

71. US District Court of Illinois, USA 17. 12. 1999.

72. Powers "Defining the Undefinable: Good Faith and the United Nations Convention on Contracts for International Sale of Goods" (1999) 18 Journal of Law and Commerce 333 334.

73. The British Sale of Goods Act 1975, Section 52 (1).

74. Atiyah The Sale of Goods 8th ed (1990) 552-53.

75. [1974] 1 All ER 954.

76. [1927] 1 KB 649.

77. [1982] 2 Lloyd's Rep 336.

78. See generally Treitel "Specific Performance in the Sale of Goods," 1966 Business Lawyer 211.

79. Honnold Uniform Law for International Sales Under the 1980 United Nations Convention (2nd ed 1981) 274.

80. Schlechtriem Commentary on the United Nations Convention on the International Sale of Goods 2nd ed (1998) 200.

81. Kastely (1988) 63 Washington Law Review 619.

82. Catalano "More Fiction than Fact. The perceived differences in the Application of Specific Performance Under the United Nations Convention on Contracts for the International Sale of Goods" (1997) 71 Tulane Law Review 1807 1817-19.

83. Schwartz "The Case of Specific Performance" (1979) 89 Yale Law Journal 271 305.

84. Linzer "On the Amorality of Contract Remedies - Efficiency, Equity and the Second Restatement" (1981) 81 Columbia Law Review 111 125.

85. Zimbabwe Herald of 15 September 2007.

86. Money Lending and Rates of Interest Act, Chapter 14:14, section 8 thereof.

87. Ulin 361 cited by Lando and Casper in "The Myth of Specific Performance in Civil Law Countries" (2004) American Law and Economics Association Annual Meetings Paper 15 p 1.

88. See generally Kastely (1988) 63 Washington Law Review; also Koskinen, "CISG, Specific Performance and Finnish Law", Publication of the Faculty of Law, University of Turku, Private Law Publication Series B:47 (1999).

89. Honnold, Uniform Law for International Sales 163-4.

90. Flechtner "The Several Texts of the CISG in a Decentralised System: Observations on Translations, Reservations and other Challenges to the Uniformity Principle in Article 7(1)" (1998) 17 Journal of Law and Commerce 187 189.

91. DiMatteo "The Interpretive Turn in International Sales Law: An Analysis of Fifteen Years of CISG Jurisprudence (Winter 2004) 34 Northwestern Journal of International Law and Business 299 303.

92. Roth "Interpretation of the CISG According to its Principles of International Law" (1999) Vol IV International Trade and Business Law Annual 1 3.

93. Kastely "The Right to Require Performance in International Sales: Towards an International Interpretation of the Vienna Convention (1988) 63 Washington Law Review 607 625.

94. Gebauer "Uniform Law, General Principles and Autonomous Interpretation" (2000) Uniform Law Review 683 686.

95. Honnold "UN Convention on Contracts for the International Sale of Goods, (1981) 15 Journal of World Trade Law" 265 265.

96. Ferrari "International Sales Law and the Inevitability of Forum Shopping: A Comment on Tribunale Di Rimini, 26 November 2002" (2004) 23 Journal of Law and Commerce 169 170.

97. Goldring "Unification and Harmonisation of the Rules of Law" (1978) 9 Federal Law Review 284 289.

98. Goldring (1978) 9 Federal Law Review 290.

99. DiMatteo (Winter 2004) 34 Northwestern Journal of International Law and Business 301.

100. Kastely (1988) 63 Washington Law Review 623.

101. Farnsworth "The Vienna Convention: History and Scope" (1984) 18 Int'l Law 17 19.

102. Koneru "The International Interpretation of the UN Convention on Contracts for the International Sale of Goods; An Approach Based on General Principles" (1997) 6 Minn J Global Trade 105 107.

103. Budapest Arbitration Proceedings Vb 94124, November 17 1995.

104. Court d'appeal Grenoble, 22 February 1995, <http://cisgw3.law.pace.edu/cases/950222f1.html>.

105. Powers "Defining the Indefinable; Good Faith and the United Nations Convention on Contracts for the International Sale of Goods" (1999) 18 Journal of Law and Commerce 333 334.

106. Summers "The General Duty of Good Faith - Its Recognition and Conceptualisation" (1982) 67 Cornell Law Review 810 818.

107. Honnold "Uniform Law for International Sales Under the 1980 United Nations Convention" 147.

108. Kastely (1988) 63 Washington Law Review 624.

109. See Christie "Arbitration Party Autonomy and Curial intervention in international commercial arbitration" (1994) 111 SALJ 360 362.

110. Per Lord Mustill in Channel Tunnel Group Ltd and Others v Balfour Beauty Construction Ltd and Others [1993] ALL ER 664 (HL).679

111. Felemegas "The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation" (2000-2001) Pace Review of the Convention on Contracts for the International Sale of Goods 115.


Pace Law School Institute of International Commercial Law - Last updated December 14, 2007
Go to Database Directory || Go to Bibliography
Comments/Contributions