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Published in Galston & Smit ed., International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Matthew Bender (1984), Ch. 1, pages 1-1 to 1-53. Reproduction authorized by Juris Publishing.

The Scope of the Vienna Convention
on International Sales Contracts

by Peter Winship

§ 1.01 Background of the Vienna Convention
            [1] UNIDROIT Initiative in the 1930s
            [2] Revision of UNIDROIT Drafts: 1950-1963
            [3] The 1964 Hague Sales Conventions
            [4] The UNCITRAL Text: 1968-1980
            [5] Summary
§ 1.02 Sphere of Application: Articles 1-6
            [1] In General
            [2] Illustration
            [3] "Contract for the International Sale of Goods"
    [a] Is the Transaction "International"?
    [b] Is the Transaction a "Contract of Sale"?
    [c] Is the Transaction a Sale of "Goods"?
            [4] Relation of Sales Transaction to a Contracting State
    [a] Contracting States (Art. 1(1)(a))
    [b] Rules of Private International Law (Art. 1(1)(b))
    [c] Excluding Article 1(1)(b) (Art. 95)
            [5] Excluding the Convention
            [6] Issues Not Governed by the Convention
§ 1.03 Final Provisions: Articles 89-101
            [1] In General
            [2] Housekeeping Provisions
            [3] Relation of CISG to Other International Agreements
            [4] Permitted Declarations and Reservations
    [a] Adopting only Part II or Part III (Art. 92)
    [b] Federal State Clause (Art. 93)
    [c] Closely-Related Legal Systems (Art. 94)
    [d] Excluding Article 1(1)(b) (Art. 95)
    [e] Formal Requirements (Art. 96)
            [5] Rejected Proposals and Missing Provisions
§ 1.04 Conclusion
Appendix - Application of CISG Art. 1(1)(b)

On April 10, 1980 a diplomatic conference meeting in Vienna adopted the U.N. Convention on Contracts for the International Sale of Goods.[1] Once the Vienna convention (CISG) enters into force it will govern both the formation of many international sales contracts and the rights and obligations of parties to these contracts. A State which ratifies or accedes to the convention will then have at least two bodies of sales law: domestic sales law and the convention. If many States adopt the convention, however, its text will be the basis for a modern lex mercatoria which will make it less necessary to consult uncertain conflict-of-laws rules and to apply the domestic sales law of foreign States.

The 101 articles of the Vienna convention are divided into four parts. The two chapters of Part I (CISG arts. 1-13) set out the general provisions on the convention's sphere of application and rules of interpretation. Part II (CISG arts. 14-24) codifies the rules on formation of the international sales contract, while the five chapters of Part III (CISG arts. [page 1-2] 25-88) regulate the rights, obligations and remedies of the parties to these contracts. Part IV (CISG arts. 89-101) defines the relation of CISG to other international agreements, sets out the reservations States are permitted to make to the convention, and provides rules for implementing the convention.

This essay explores the scope of the Vienna convention. After an initial section which traces the evolution of the text ultimately adopted in 1980, the main body of the essay focuses on Articles 1-6 and Part IV of the convention. A concluding section then attempts to place the convention in the context of other international initiatives which deal with related aspects of international sales transactions.[2]

§ 1.01 Background of the Vienna Convention

Adoption of the 1980 Vienna convention marked the culmination of over 50 years of efforts to provide uniform legal rules governing international sales contracts. In retrospect, one can trace three stages in the development of the final text. In the 1930s legal experts from Europe, working under the auspices of the International Institute for the Unification of Private Law, prepared several draft texts which embodied a number of basic policy decisions on the scope and content of uniform sales rules that survive in the 1980 convention. A second stage, which begins after World [page 1-3] War II and ends with the adoption of uniform sales laws at a 1964 conference held at The Hague, refined the earlier texts. The final stage starts in 1968 when the newly-established U.N. Commission on International Trade Law began to study the reasons for the limited acceptance of the 1964 uniform laws and ends with the 1980 Vienna convention based upon redrafted texts prepared within the U.N. Commission.[3]

     [1] UNIDROIT Initiative in the 1930s

By tradition the origin of the Vienna convention is traced back to the April 29, 1930 decision of the International Institute for the Unification of Private Law (the "Rome Institute" or "UNIDROIT") to appoint a committee of experts to prepare a uniform international sales law.[4] The previous year Ernst Rabel, then director of the Institut für ausländisches and internationales Privatrecht in Berlin, had submitted a report to UNIDROIT which suggested both the feasibility and the desirability of a unification of substantive sales law.[5] After reviewing this report the governing body of [page 1-4] UNIDROIT appointed a committee with representatives from France, Germany, England and Scandinavia -- representatives, as one commentator noted, from the "four principal systems of law which are concerned in any scheme for unification, i.e., the Anglo-American, the Latin, the Germanic, and the Scandinavian systems."[6]

The UNIDROIT committee of experts completed a first draft of a Uniform International Law of Sales in 1935 and soon afterwards the League of Nations circulated the committee's text to governments for their comments. In their responses most governments supported the idea of unification and approved the text, although several governments did suggest that their businessmen perceived no need for the unification project. On the basis of these comments the committee prepared a second draft which became available in 1939 just as World War II made it impossible to continue collaboration.[7]

In a related development, the governing body of UNIDROIT concluded that the issue of contract formation should also be examined, in part because several of the rules [page 1-5] in the draft sales law referred to the time a contract was concluded but left this time undefined. To carry out this study the president of UNIDROIT in 1934 appointed a separate committee, with representatives from Austria, France, Great Britain, Italy, Peru and Sweden. By 1936 this committee had prepared a preliminary draft of a uniform law on international contracts made by correspondence, but World War II also halted work on this draft.[8]

Although subsequent drafts refined these preliminary texts, many of the basic decisions about the scope of rules governing international sales contracts can be traced to these early texts.[9] An early decision was made, for example, that the text should not be a collection of rules chosen eclectically from existing sales laws but should be a comprehensive new system of sales law designed to meet the practical needs of merchants. More importantly, the sales committee decided to restrict the uniform law to international sales.[10] The [page 1-6] committee concluded that to extend the uniform law to both domestic and international transactions, a technique which had been used in the 1930 and 1931 Geneva conventions on negotiable instruments, would make it more difficult for certain countries to adopt the text. In an equally important decision, the committee reaffirmed the principle of party autonomy so that even if an international sales contract fell within the scope of the uniform law parties to the contract were explicitly authorized to exclude application of the uniform law or to derogate from any of its provisions.

Even on narrower issues these earlier drafts include provisions which survive in the 1980 text.[11] It was agreed that the nationality of the parties to a sales contract should be irrelevant, as should the commercial character of the contract or the parties. Questions concerning the transfer of property in goods sold were omitted deliberately because of the great diversity of national rules on title transfer, although the draft did regulate many important issues, such as who bears the risk of loss, by divorcing these issues from property concepts. Finally, as noted above, the early draftsmen recognized the desirability of coordinating rules on the formation of contracts with substantive sales rules.

     [2] Revision of UNIDROIT Drafts: 1950-1963

In 1950 the governing body of UNIDROIT persuaded the government of the Netherlands to convoke a conference to [page 1-7] consider the draft texts. A ten-day conference was held in November 1951 immediately following the seventh session of the Hague Conference of Private International Law. With the exception of Japan, the 20 nations formally represented at the sales conference came from Western Europe. Several non-European nations, however, did send observers. The Final Act of the 1951 conference adopted the UNIDROIT sales text as the basis for further study, made some observations on the substance of the 1939 draft, and appointed a new commission of experts to prepare a revised text. The Final Act also recommended that inquiry should be made into the preparation of a text on contract formation.[12] As in the past, the special commission was comprised of experts from West European countries.

By 1956 the commission had prepared a new draft of the Uniform Sales Law which the government of the Netherlands circulated to governments and other interested international bodies for comment. On the basis of these comments the commission completed a final draft in 1963 for submission to an international conference.[13] [page 1-8]

Working separately, the governing council of UNIDROIT in 1956 began to draft rules on contract formation. The council completed a draft text in 1958 and it submitted this draft to the government of the Netherlands with the suggestion that the text also be considered at a diplomatic conference.[14]

     [3] The 1964 Hague Sales Conventions

On receiving the reports of the special commission and UNIDROIT the government of the Netherlands once again convoked an international conference to meet at The Hague. Of the 28 nations which sent delegations to the April 1964 conference most were West European, although the U.S.A. and several East European countries were officially represented at a sales conference for the first time. After three hectic weeks the conference adopted two conventions. Annexed to the first convention was a Uniform Law on the International Sale of Goods (ULIS); the second convention set out a Uniform Law on the Formation of contracts for the International Sale of Goods (ULF) in an annex.[15]

A State which becomes a party to either convention agrees (art. I) to incorporate the uniform law into its [page 1-9] domestic legislation as the legal regime governing international sales contracts. Although the uniform laws were adopted in equally authentic French and English texts a State could promulgate them in translation. To aid interpretation and encourage uniform application Professor André Tunc of Paris, who had been the principal draftsman of the sales law text, prepared an unofficial commentary which was published as part of the Official Records of the convention.[16] Anticipating possible resistance to widespread adoption of ULIS and ULF, the Final Act of the 1964 conference also included a Recommendation that if the conventions did not come into force by May 1, 1968 UNIDROIT should establish a committee to consider further action.[17]

By their terms the 1964 uniform laws govern contracts of sale between parties whose places of business are in different States if there is also a specified indication that the contract involves an international transaction (ULIS art. 1; ULF art. 1). Under these articles a contract of sale is international if the transaction involves international carriage, the acts constituting offer and acceptance are effected in different States, or if delivery of goods is to be made in a State different from the one where the contract is concluded.[18] Not surprisingly, there have been objections to the [page 1-10] resulting complexity.[19]

Far more criticism, however, has been leveled at the "excessive" sphere of application of the uniform laws. A forum in a State which has ratified or acceded to the 1964 conventions (a "Contracting State") will apply the uniform laws to all international sales transactions even when parties are from non-Contracting States and the sales transaction itself has little or no connection with the forum or other Contracting State. This result was not unintended. At the 1964 conference delegates had rejected by a split vote a proposal which would have limited application of the uniform laws to contracts between parties whose places of business were" in Contracting States.[20]

The 1964 conference did attempt to meet this criticism of excessive application by permitting a State to make one or more reservations at the time it ratifies or accedes to the convention. Article III of the sales convention, for example, permits a State to declare that it win only apply the uniform [page 1-11] law to parties from different Contracting States rather than just different States. Article IV authorizes a State to declare that it will only apply the uniform law when, by virtue of prior adherence to an international convention, the rules of private international law lead to application of the law of a Contracting State.[21] Most controversial, however, is Article V, which permits a State to declare that the uniform law will only apply when the parties to a sales contract have chosen the uniform law as the law of the contract.[22]

In defense of the uniform law Professor Tunc points out that parties are free to exclude application of the law by their contract and that most tribunals will not take jurisdiction of the dispute unless there is some substantial connection between the forum and the parties or their transaction. He also notes that there are "eccentricities and injustices inherent in any municipal system" which could affect at least one of the parties if municipal law rather than the uniform law were to apply. He also stresses the superiority of the uniform law, at least with respect to international sales. Finally, he observes that the permitted reservations allow States to limit application of the uniform law.[23]

It soon became apparent, however, that even with the authorized reservations ULIS and ULF would not be widely adopted. Not only were there complaints about the sphere of application but there was criticism of the abstractness of several key concepts and the failure to take into account the interests of many third world and socialist countries which [page 1-12] had not participated in the 1964 conference. Commentators from the United States, a country which had not participated formally in the pre-1964 drafting process, were particularly critical.[24] As a result, although by 1972 ULIS and ULF had garnered the five adoptions necessary to bring them into force,[25] the 1964 conventions have had a negligible impact on the actual conduct of international trade.

     [4] The UNCITRAL Text: 1968-1980

In the meantime, in 1966 the U.N. General Assembly established a Commission on International Trade Law (UNCITRAL) to promote "the progressive harmonization and unification of the law of international trade." At its first session in 1968 the Commission decided to inquire into the intention of States with respect to the 1964 Hague sales conventions. After reviewing these responses at its second session the following year the Commission appointed a Working Group of fourteen members, later increased to fifteen members, to determine whether the 1964 uniform laws could be modified to increase their acceptability or whether completely new texts should be drafted. Following an initial study the Working Group concluded that a new text, based on ULIS and ULF, should be prepared. Between 1970 and 1978 the group met seven times to consider the text [page 1-13] of a redrafted sales convention and an additional two times to prepare a text governing the formation of sales contracts. The group submitted a draft sales text to the Commission in 1977 and a draft formation text in 1978. After reviewing these drafts, the Commission decided to consolidate the texts and to recommend to the General Assembly that it convene a diplomatic conference to consider the 1978 UNCITRAL text. The General Assembly adopted this recommendation and convened a diplomatic conference in March-April, 1980 at UNCITRAL's new headquarters in Vienna. Delegations from 62 nations, representing all sectors of the world community, met at the Vienna conference. The conference adopted the UNCITRAL provisions after considerable debate but with relatively few amendments.[26]

Before examining the Vienna convention's scope provisions several differences should be noted between the format of the 1964 uniform laws and the 1980 Vienna convention. The 1980 convention consolidates the uniform laws into a single text, with the formation provisions in Part II and the substantive sales provisions in Part III. Article 96 authorizes a Contracting State to decide to adopt either or both parts but the consolidation insured coordination of language and basic concepts.[27] In a second change the 1980 convention incorporates the private law rules of the uniform laws into the convention itself. In some jurisdictions this means that there is no need for the government to seek both ratification of the convention and implementation by separate legislation.[28] An important third difference is that the [page 1-14] Vienna Convention now appears in the six authentic texts of U.N. proeedings, rather than the two authentic texts in which ULIS and ULF appeared. Finally, despite the urging of some delegations, the Vienna conference did not authorize the preparation of a commentary, official or semi-official, to explain and publicize the text in the same way that Professor Tunc's commentary explicates the 1964 Hague Conventions.[29]

     [5] Summary

Study of the evolution of the Vienna convention text suggests that the development of a drafting process which includes greater and more effective participation by representatives from different legal systems has been just as important as refinement of the text itself. Whereas the first UNIDROIT committee represented only the four principal legal systems of Western Europe, both UNCITRAL and its Working Group on Sales carefully balanced their membership to insure representation from all geographical, economic, and political sectors of the world community. Procedures for regular consultation with governments and other international organizations also developed so that there was an opportunity to comment on the text as it evolved. Broader participation is also reflected in the increased attendance at the international conferences convoked to consider the draft sales rules.[page 1-15]

Not that there have not been important developments in the text itself.[30] Compromise formulas were developed, including the redefinition of the convention's sphere of application, and new provisions added, such as provisions excluding newly-recognized consumer issues in order that these issues could be addressed in specialized conventions. Nevertheless, the content, if not the wording, of many provisions can be traced back to the earliest drafts.[page 1-16]

§ 1.02 Sphere of Application: Articles 1-6

     [1] In General

The first six articles of the 1980 Vienna convention define its sphere of application. Article 1 determines when a contract for the sale of goods is "international" and what relation the transaction must have to a State which has ratified or acceded to the convention (a "Contracting State") before the convention is applicable. Although the terms "contract of sale" and "goods" are not defined, Articles 2 and 3 state rules for specific borderline or difficult cases, while Articles 4 and 5 exclude from the convention's coverage certain issues which may arise in connection with sales transactions. Even if, however, these first five articles make the convention applicable to a given transaction Article 6 provides that the parties are free to exclude, derogate from or vary the convention's provisions with virtually no limitation.

These introductory provisions of the Vienna convention make several important changes to the corresponding articles of the 1964 uniform sales laws.[31] The most important of these changes is the rejection of the "universalist" approach of the uniform laws and its replacement with a compromise text which requires some connection between a sales transaction and a Contracting State before the 1980 Vienna convention is applicable.[32] The UNCITRAL Working Group on Sales and the Commission agreed on this compromise text after careful review of the criticisms of ULIS and the possible alternatives.[33] Although the 1980 conference [page 1-17] accepted the UNCITRAL text of Article 1 it did agree at the last minute, on the suggestion of the Czechoslovak delegation, to adopt Article 95 which allows a Contracting State to declare it will not be bound by paragraph (1)(b) of Article 1.[34]

Other changes to the 1964 uniform laws involved less debate about basic policy. The drawn-out debate within UNCITRAL about whether to discard the complex ULIS formula for determining when a transaction is international turned less on the merits of the provision than on the perceived need to have simple, clear rules for determining when the convention applies.35 There was little resistance within UNCITRAL, however, to a proposal to exclude sales to consumers.[36] Nor was there extended debate at the 1980 conference when several delegations proposed the exclusion of product liability claims for death or personal injury to any person.[37] At least one reason for the quick acceptance of the latter two provisions was the desire to avoid conflict between the convention and "mandatory" rules of national law, a concern which also led to the omission of several provisions of the uniform law which refer specifically to mandatory [page 1-18] rules.[38]

     [2] Illustration

How the provisions of Chapter 1 operate can be illustrated by considering their application to the following hypothetical fact situation.

Seller is a French manufacturer of electrical kitchen equipment; it also has an operating division in Quebec, Canada or the wholesale distribution of its products in North America. Buyer is a New York "retailer of home furnishings, including kitchen equipment. On a trip to the United States, seller's management agrees with buyer to manufacture and supply 2,000 food processors meeting buyer's specifications. The parties sign a contract document which provides for payment by letter of credit and for arbitration of disputes; the contract does not, however, include a choice-of-forum or a choice-of-law clause.

After signing the document the New York buyer asks the following four questions:

  1. How do I know whether or not my transaction is a "contract for the international sale of goods" as these terms are defined by the 1980 Vienna convention?

  2. Assuming that my transaction is a contract for the international sale of goods, what connection must my transaction have to a State which has ratified or acceded to the Vienna convention so that the convention's provisions govern my contract?

  3. If my transaction is subject to the Vienna convention and for some reason I am unhappy about this, is there anything I can do to exclude some or all of its provisions?

  4. If my sales contract is subject to the Vienna convention, [page 1-19] will the convention's provisions govern all the issues that might arise in connection with my transaction?

When considering the following analysis of these questions assume that the Vienna convention has come into force and that France has ratified it without reservation, the United States has ratified with the reservation permitted by Article 95, and that Canada has not acceded at all.

     [3] "Contract for the International Sale of Goods"

Asking whether the New York buyer's transaction is a "contract for the international sale of goods" for the purposes of the Vienna convention can be broken down into three elements: whether the transaction is international, whether it is a contract for sale, and whether it is a sale of goods. Note, however, that to conclude that the transaction is indeed a contract for the international sale of goods does not mean that the convention is necessarily applicable. At the very least, as will be discussed in connection with the buyer's second question, there must be some connection between the transaction and a State which has ratified or acceded to the convention.

[a] Is the Transaction "International"?

Article 1 provides a simple test for determining whether a transaction is international: Article 1(1) states that it must be "between parties whose places of business are in different States." The simplicity of this test stands in sharp contrast with the complex text of the 1964 uniform laws which require some additional "objective" indication that the transaction is international, such as the transnational carriage of the goods sold.[39]

In all likelihood the transaction between the New York buyer and the French seller meets the objective "internationality" test of the Vienna convention. At the time they enter into the contract the buyer has his place of business in the United States and the seller has its place of business in another country. Although the seller has multiple places of business Article l0(a) provides that the relevant place of business is the one which has "the closest relationship to the contract and its performance," which in this case is France. Even if, however, the seller plans to fulfill its contract obligations through its operating division in Quebec the parties will still have their places of business in different nation States.

Two possible questions might be raised to the answer just given. Note first that the answer assumes that at the time he entered into the contract the buyer had reason to know that the seller's manager represented a French manufacturer which had its place of business outside the United States. If, however, the buyer did not know or have reason to know that the manager represented a foreign manufacturer -- where, for example, the manager acts for an undisclosed principal -- then the convention will not apply because Article 1(2) states that under these circumstances the fact that the parties have their places of business in different States is to be disregarded and therefore the internationality test is not met. In this latter case, domestic law, including conflict of laws rules, will govern any dispute between the seller and buyer.

A second possible question is whether the manager of the seller has a place of business in the United States because he conducts negotiations and concludes contracts in New [page 1-21] York.[40] Absent some more permanent establishment in the United States the answer should be no. The term "place of business" implies some permanency and this implication is reinforced by the use in the French text of the term établissement, which has an even stronger connotation of a branch office. Interpreting the term to require some permanency should also make it easier for the parties to determine whether or not the convention applies and lead to more uniform conclusions. In any event, even if it is decided that seller has a place of business in New York one still must determine which place of business is the relevant one. Because seller's performance (manufacture, packing, and possibly delivery) will take place in France Article 10(a) suggests that the relevant place of business would still be France.

[b] Is the Transaction a "Contract of Sale"?

Although there is no definition of "contract of sale" in the Vienna convention, one can reconstruct a definition from the later articles defining the obligations of the parties. Article 30 requires the seller "[to] deliver the goods, hand over any documents relating to them and transfer the property in tbe goods"; while Article 53 requires the buyer "[to] pay the price for the goods and take delivery of them. The resulting definition is not fundamentally different from that found in domestic sales laws.[41] Gifts, bailments, leases, and secured transactions are not within the scope of the convention, although its provisions might be applied to these non-sales transactions by analogy when international.[42]

The convention does provide rules, however, for certain troublesome transactions. Article 2 explicitly excludes from the scope of the convention sales to consumers, sales by auction, and sales on execution or otherwise by operation of law.[43] Exclusion is justified because these transactions are usually governed by mandatory national rules and because they rarely occur in international commerce.[44] Article 3, on the other hand, brings within the scope of the convention some transactions where goods are to be manufactured or supplied together with services. The supply of goods to be manufactured will be a sale unless the party who orders the goods supplies an "essential part" of the necessary materials for manufacture.[45] Where services and goods are supplied in the same transaction, the transaction is not a sale and therefore not covered by the convention if a "preponderant part" of the supplier's obligations relate to the rendering of services.[46]

In the hypothetical case, the transaction is probably a contract of sale. The obligations undertaken by the parties are characteristic of seller-buyer obligations. Nor is the transaction excluded from the convention by Article 2: although the New York buyer will sell to consumers, he purchased from the French seller to stock his inventory and the convention's definition of consumer purchase looks to the purpose of the buyer rather than an "inherent" characteristic of the goods.[47] It is possible to argue that because the [page 1-23] buyer is providing specifications for the food processors to be manufactured he is supplying "a substantial part of the [necessary] materials" and therefore not covered by the convention by virtue of Article 3(1). The seller, however, does not process the specifications themselves and therefore they may not be "materials." Moreover, the term "substantial part" suggests a quantitative measure and it will be difficult to determine whether the specifications are a "substantial part" of the materials unless one uses a measure which looks to value rather than quantity.

Although the original hypothetical case is probably a contract of sale, variations on the original raise difficult issues. A "consignment" arrangement under which the French supplier will take back unsold units might not be within the convention because title to the goods may not be transferred to the consignee and payment is conditional on resale. Alternatively, if the French seller retains title to secure payment of the sales price, the convention does not govern the rights and obligations arising from the security agreement but does cover the sales transaction to which the security agreement is ancillary.[48] Finally, the convention is silent on whether it covers barter transactions where part or all of the price is to be paid in something other than money, as would be the case, for example, if the New York "buyer" pays part of the agreed price for the food processors by granting the French supplier a license to manufacture processors using the buyer's specifications.[49] [page 1-24]

     [c] Is the Transaction a Sale of "Goods"?

Rather than define the term "goods"[50] the convention provides rules for borderline cases. For reasons which are not always persuasive Article 2 excludes from the convention's coverage commercial paper, investment securities, ships, aircraft, hovercraft, and electricity.[51] National sales laws do not classify these items uniformly: in many jurisdictions they may be characterized as intangibles or immovables rather than goods. Difficulty in characterizing an item, however, supports the need for a clear rule rather than a rule excluding an item. Many States also have special regulatory legislation for these items (e.g., registration of ships) but most of these regulations cover matters other than obligations arising from the sales contract. Finally, any suggestion that the problems raised by the excluded items are "unique" overlooks other items, such as oil and gas supply contracts or livestock transactions, which also raise unique problems. The ultimate explanation for the excluded items may be inertia -- most were excluded in the earliest [page 1-25] drafts -- and the Vienna conference's desire to limit further exclusions.[52]

There is little doubt that the food processors in the hypothetical case are goods. Even if they were to be installed as a "fixture" by a retail purchaser from the New York buyer the processor would be a movable at the time of the French seller-New York buyer transaction.

     [4] Relation of Sales Transaction to a Contracting State

Not all contracts for the international sale of goods will be governed by the Vienna convention because, unlike the 1964 Hague sales conventions, the 1980 convention requires a substantial relation between a transaction and a State which has ratified or acceded to the convention before its provisions govern the transaction. Article 1(1) provides the basic rule:

"This Convention applies to contracts of sale of goods between parties whose places of business are in different States:

(a) when the States are Contracting States; or

(b) when the rules of pnvate international law [i.e., conflict-of-laws rules] lead to the application of the law of a Contracting State."

This basic rule is qualified by Article 95, which permits a Contracting State to declare that it will not be bound by para. (l)(b). As noted above, the text represents a compromise between proponents and critics of the "universalist" approach of the 1964 Hague conventions.[53]

Given the number of variables -- where each party has his [page 1-26] place of business; where a forum sits; which State's laws are applicable under the rules of private international law -- there are numerous possible cases in which the question of the convention's sphere of application might arise. Fortunately, whether the convention is applicable is clear in most cases. The appendix to this essay systematically examines 54 permutations and suggests that there are only two questions which raise difficulties.

The first question is whether a State which makes a declaration under Article 95 remains a "Contracting State" under para. (l)(b) in jurisdictions where this paragraph is in effect. This question would arise in the context of a case like the following example.[54]

S and B have their places of business in States X and Y respectively. X is a Contracting State but Y is not. A dispute is brought before a forum in a Contracting State (e.g., X). If the forum's rules of private international law lead to the law of Z, a State which has made an Article 95 declaration, will the forum apply the domestic sales law of Z or the convention?

A forum in a Contracting State which has not made an Article 95 declaration is bound by para. (l)(b) to apply the convention if its conflict-of-laws rules lead to the law of a "Contracting State." It would appear that a declaring State is not a Contracting State. The Vienna conference rejected an alternative version of Article 95 proposed by Czechoslovakia which would have answered the question in the negative.[55] The reports of the conference debates suggest, [page 1-27] however, that this rejection was based more on the complexity of the last-minute proposal rather than on its content.[56] Moreover, a negative answer is consistent with the result when the forum sits in a declaring State or a non-Contracting State to consider similar cases and a uniform answer will discourage forum shopping.

A second question will arise more often: should a forum take into account the rules of private international law recognized by a Contracting State to whose laws the forum's conflicts rules would lead? The following example suggests the context in which this question might arise.[57]

S and B have their places of business in States X and Y respectively. X is a Contracting State but Y is not. A dispute is brought before a forum in a non-Contracting State. If the forum's rules of private international law lead to the law of a Contracting State (e.g., X), should the forum consider whether the conflict-of-laws rules of the Contracting State also point to the law of a Contracting State?

This question takes on importance because different jurisdictions recognize different rules of private international law, although there is growing support for conflicts rules which would make the law of the seller's place of business applicable in most cases.[58] There is a general reluctance to inquire into the conflict-of-laws rules recognized by another jurisdiction, as suggested, for example, by general disapproval of the doctrine of renvoi.[59] This reluctance is supported by the difficulty of the inquiry and the possibility of circularity of the inquiry because of the differences in conflicts rules. The drafting history also suggests that the forum should apply the convention if its own conflicts rules lead to a Contracting State.[60]

     [a] Contracting States (Art. 1(1)(a))

The hypothetical case of the French seller and the New York buyer illustrates the application of para. (l)(a). The seller and buyer are from different Contracting States. If a sales dispute is brought before a forum in France, New York, or any other Contracting State the forum will be bound by para. (l)(a) to apply the convention. Under these circumstances, it is irrelevant what State's law is applicable under the rules of private international law. Nor is it relevant that the United States is assumed to have made an Article 95 declaration.

Only if the dispute is brought before a forum in a [page 1-29] non-Contracting State, such as Canada, is the result uncertain because the forum will not be bound by treaty to apply the convention. A Canadian forum will presumable apply the law of the State to which its conflict-of-laws rules lead. Under the facts of the hypothetical case it is highly likely that the law of either France, as the place where the seller has its business, or the United States, where the contract was entered into and performed, will apply and the relevant legal rules will be those of the convention.

     [b] Rules of Private International Law (Art. 1(1)(b))

To illustrate the operation of para. (1)(b) one must vary the original hypothetical case. Assume, for example, that the United States has not ratified the Vienna convention and that a sales dispute between the parties is brought before a forum in France. The forum will not be bound by para. (1)(a) because the parties are not from different Contracting States and the forum will therefore proceed to examine its rules of private international law to determine if it is bound by para. (1)(b). These rules are readily available because France is a party to the 1955 Hague convention on conflict-of-laws rules for international sales contracts.[61[ Under the rules of the 1955 convention, the forum will look to the law of the State where the seller has its establishment if the order is received there or to the law of the State where the buyer resides if the order is given there.[62] The original [page 1-30] hypothetical has the order given to the seller's manager in New York and the French forum would not apply the convention because the rules of private international law do not lead to a Contracting State. If, however, the order was sent to France or possibly if it was subject to confirmation in France then the law of France would be applicable under the 1955 convention and the forum would be bound by para. (1)(b) to apply the convention.

Note that if the same dispute is brought before a forum sitting in New York the forum will not be bound by treaty to apply the convention, again assuming that the United States has not ratified, but the forum may do so if the New York conflicts rules make the law of France applicable.

     [c] Excluding Paragraph (l)(b) (Art. 95)

To illustrate the operation of the Article 95 declaration one must again vary the original hypothetical case. Assume that the New York buyer purchases the food processors from the seller's Canadian subsidiary, that the United States ratifies the convention with an Article 95 declaration, and that Canada is a non-Contracting State. If a sales dispute is brought before a forum in New York the forum will consult its conflict-of-laws rules; the parties are not both from Contracting States so para. (1)(a) is not relevant. If the conflicts rules lead to application of New York law the forum will apply the domestic sales law of New York, the Uniform Commercial Code, rather than the convention because the forum is not bound by para. (1)(b) following the U.S. declaration. If the United States had ratified the convention without the declaration, however, the forum would be bound by para. (1)(b) to apply the convention under the [page 1-31] same circumstances. In other words, if an Article 95 declaration is made the Uniform Commercial Code will govern international sales contracts more frequently than if the Article 95 declaration was not made.[63]

An Article 95 declaration does not, of course, guarantee that the Uniform Commercial Code will apply or that the Vienna convention will not apply. The New York forum may conclude, for example, that under its conflict-of-laws rules the domestic law of Canada, or some other non-Contracting State, governs the New York buyer-Canadian seller contract. Alternatively, the New York forum might conclude after examining the facts that the law of a Contracting State, such as France, is the applicable law and apply the convention although not bound by treaty to do so. If both parties are from Contracting States, of course, the convention will apply by virtue of Article l(l)(a) even if one or both Contracting States have made an Article 95 declaration.[64]

     [5] Excluding the Convention

Having concluded that his sales contract with the French seller is governed by the Vienna convention, the New York buyer asks if he can avoid this result. The answer is set out in Article 6:

"The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions."[65] [page 1-32]

In other words, although the buyer may not unilaterally exclude the convention after the sales contract is concluded he may agree with the seller at any time to exclude the convention or to accept terms varying the effect of the convention. If the contract has not yet been concluded the buyer may also exercise control by conditioning acceptance of his offer upon exclusion of all or part of the convention. In effect, Article 6 embodies a vigorous affirmation of the principle of party autonomy. As the Swiss government noted in its pre-conference comments on the 1978 UNCITRAL draft, "traders, who are generally wary of being subjected to unfamiliar rules, should instead feel reassured" by the non-mandatory or "enabling statute" nature of the convention.[66]

The debates at the 1980 conference confirm that Article 6 is to be taken literally and that parties may indeed derogate from or vary the effect of all the provisions of the convention other than Article 12. The conference rejected with relatively little debate a suggestion that the principle of party autonomy should be limited by a principle of good faith.[67] The conference had more difficulty, however, with the question of whether parties to a transaction excluded by Articles 2 or 3 may agree to have the convention govern their transaction.[68] Several delegations pointed out that parties might use this technique to avoid domestic consumer protection legislation or other "mandatory" national laws. Although the conference rejected an amendment which would have expressly permitted parties to derogate from Articles 2 and 3 the debate suggests that delegations could [page 1-33] not agree on how to express the limitations on party autonomy required by "mandatory" national laws. Parties should not be foreclosed, therefore, from agreeing to have the convention apply to a transaction otherwise excluded as long as the policy behind the specific exclusion is not contravened.

Although naturally delighted to hear about the abstract principle of party autonomy the New York buyer will be far more interested in the question whether the convention may be excluded by implication -- a question to which commentators have given different answers.[69] Article 3 of the 1964 uniform sales law stated that exclusion could be either expressed or implied.[70] The UNCITRAL Working Group on Sales omitted this formula without, however, requiring that exclusion be express. In its explanation of the omission the Working Group reported that some representatives were concerned that the ULIS provision "might encourage courts to conclude, on insufficient grounds, that the [convention] had been wholly excluded."[71] The Secretary-General's Commentary incorporates this concern in its gloss on the text which became Article 6.[72] Dissatisfied with the resulting ambiguity several delegations sought to clarify the matter by amendment. The 1980 conference, however, rejected not only amendments which would have required express exclusions but also amendments which stated that the convention [page 1-34] could be excluded by implication.[73] Although the conference debates are inconclusive, they do not repudiate the stated reason behind the omission of the ULIS formula. The most appropriate way to carry out the UNCITRAL policy would be to determine the intention of the parties using the detailed rules for doing so set out in Articles 8 and 9 of the Vienna convention. In other words, an express exclusion should not be required.

Obviously the New York buyer should use an express provision if he wants to exclude the convention, even if the convention may be excluded by implication. A clause stating that "[t]he parties agree to exclude application of the U.N. Convention on Contracts for the International. Sale of Goods, 1980" should be effective. Although not required to do so by the convention, the parties might also specify the national law which they want to govern their transaction. Such a clause might state: "[t]his agreement shall be governed by the domestic law of New York, including the Uniform Commercial Code as enacted in that jurisdiction."[74]

Absent an explicit exclusion some commonly-used clauses may be ambiguous. A choice-of-law clause selecting the law of France will be read in the ordinary course to refer to the convention rather than the domestic sales law of France.[75] A slightly more difficult problem is posed by a clause which [page 1-35] selects "New York law" because the parties may have used this clause on the assumption that they have selected domestic New York law as distinct from U.S. federal law, including treaty law. Following the reasoning outlined above the parties should have an opportunity to show their intent on exclusion as this intent is determined under the standards of Articles 8 and 9. The same reasoning should apply to a forum-selection clause, although it is more difficult to infer from such a clause an intent to exclude application of the convention.

     [6] Issues Not Governed by the Convention

Having concluded that the Vienna convention will apply to his contract with the French supplier, the New York buyer asks whether the convention's provisions will govern all disputes which may arise in connection with the transaction. To answer this question one turns first to Article 4, which states affirmatively that the convention "governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract." Article 4 goes on to exclude questions of validity and the effect of the contract on title to the goods, while Article 5 adds that the convention does not govern liability of the seller for death or personal injury caused by the goods. Unstated, but clear from the context, is the assumption that the convention does not cover non-sales contracts which the parties may enter into in connection with sales transactions. Thus, the convention does not govern the letter of credit arrangements or carriage and insurance contracts contemplated in the sales contract, although the convention will govern remedies for breach of terms in the sales contract which require the buyer to obtain a letter of credit or the seller to enter into a carriage contract. Nor does the convention regulate arbitration proceedings, despite [page 1-36] some discussion of dispute resolution at the 1980 conference.[75a]

In the hypothetical case there are few suggestions of issues which might test the scope of Articles 4 and 5. In the abstract, the exclusion of issues of validity is potentially the most troublesome. There is no uniformity among jurisdictions on the grounds for declaring a contract invalid and some grounds, such as "unconscionability" or "gross unfairness," may create uncertainty because of the very different conclusions different fora may reach on the same facts.[76]

The UNCITRAL Working Group on Sales did consider whether rules on validity should be included in the convention but, under pressure to complete its work, the group decided not to recommend any provisions on validity and the Commission concurred.[77] Given the issues of validity examined within UNCITRAL, Article 4(a) would appear to include at least questions of error, mistake, fraud, duress, and illegality.[78]

While the effect of the contract of sale on the property to the goods is not determined by the convention, several of its provisions will be relevant as between seller and buyer. Articles 41 and 42, for example, require the seller to deliver goods free from the claims of third parties, including claims based on industrial or intellectual property rights. In the [page 1-37] hypothetical case, the New York buyer is supplying the specifications for the food processors seller is to manufacture and the seller is therefore relieved from his obligations with respect to industrial property claims.[79]

Although the decision to exclude claims based on death or injury to persons was taken late in the evolution of the Vienna text, the decision was taken with little debate and no opposition.[80] The reasons for exclusion include the rapid and uneven development of national law regulating "product liability" and the possibility of specialized international solutions to the problem. In effect, non-convention rules will determine liability for personal injury if a defective food processor electrocutes any person, whether the person injured is the buyer himself, his employee, or a retail customer. Economic damages for delivery of the non-conforming processor, on the other hand, will be determined by the convention's normal damage rules.[81] As the conference debates make clear, damage to other property caused by the defective processor is included within economic damage and therefore covered by the convention.[82] [page 1-38]

§ 1.03 Final Provisions: Articles 89-101

     [1] In General

Although Part "IV is addressed to States" rather than direct1y to sellers and buyers, anyone advising the French seller or U.S. buyer in the hypothetical case discussed above will have to consult these provisions when determining whether the convention is applicable. The 13 articles of Part IV (CISG arts. 89-101) fall into three categories. There are housekeeping provisions, such as the designation of a depositary, and several articles which define the relation of the Vienna convention to other international agreements. A third group of articles sets out the declarations and reservations to the convention which a State may make and still be considered a Contracting State.

If Articles 89-101 are not as polished as the substantive articles in the first three parts of the convention, this may be explained by the different drafting history of the two sets of provisions. Unlike the substantive articles, the final clauses did not go through a rigorous review within UNCITRAL before being submitted to the 1980 conference. At the request of the Working Group on Sales, the Secretariat submitted draft Clauses on implementation and reservations to the 1977 session of the Commission but the session took no action.[83] Only after it had completed its review of the Working Group's reports did the Commission formally ask the Secretary-General to prepare draft clauses, with an explicit direction to provide a mechanism by which a State could ratify either or both Part II and Part III.[84] The Secretary-General's text, which was published only four months before the conference, drew upon precedents in the [page 1-39] 1964 Hague sales conventions and prior UNCITRAL conventions but it proposed many clauses in alternate form to call attention to the important policy decisions implicit in these clauses.[85] The burden of making these decisions fell upon the Second Committee of the Vienna conference and the tentative nature of the draft is suggested by the relatively large number of amendments submitted and adopted at the conference.[86]

     [2] Housekeeping Provisions

Although the convention's provisions on implementation will be of primary interest to States, several articles provide important background information for private parties. Article 89, for example, designates the Secretary-General of the United Nations as the depositary for the convention. To obtain definitive information about the status of the convention, therefore, private parties should contact the U.N. headquarters in New York.

When determining whether the convention has come into force in any particular jurisdiction U.N. officials will consult Article 99. By the general formula of Article 99 the convention enters into force initially "on the first day of the month following the expiration of twelve months after the date of deposit of the tenth instrument of ratification, acceptance, approval or accession" and as to subsequent Contracting States there is a similar one-year period before the convention becomes effective in these jurisdictions. In the transition period before the convention becomes generally effective, a party should examine Article 100 to determine whether a particular transaction will be governed by the convention. Article 100 provides that the convention will [page 1-40] apply only to offers or contracts concluded after the convention becomes effective in the relevant Contracting State or States.

     [3] Relation of CISG to Other International Agreements

Article 90 states a modest general rule defining the relation of the Vienna convention to other international agreements: "This Convention does not prevail over any international agreement which has already been or may be entered into and which contains provisions concerning the matters governed by this Convention, provided that the parties have their places of business in States parties to such agreement." The Vienna conference adopted this article with little debate, the only amendment to the draft text being the substitution of the broader term "agreement" for the term "convention." A similar provision appears in the 1974 prescription convention.

What international agreements the Vienna conference had in mind when it adopted Article 90 is not entirely clear. It does not cover, for example, the most obvious case of the relation of the Vienna convention to the 1964 Hague sales conventions because Article 99 specifically covers that relationship.[87] The Commentary to a similar article in the 1974 prescription convention suggests that Article 90 covers commodity contract terms established by international commodity organizations as well as terms adopted in regional arrangements, such as the General Conditions of Delivery of Goods adopted by the Council for Mutual Economic Assistance.[88] To these one might add conventions which focus on special problems arising in connection with sales transactions. A multilateral treaty, for example, restricting the power of a seller to disclaim or limit liability for damages [page 1-41] caused by defects in goods sold might also fall within Article 90.

A formula which works well for the narrowly-focused prescription convention, however, may not work as well for the Vienna convention. The latter convention covers a broad spectrum of sales issues and the overlap between the 1980 convention and other agreements may be subtle and difficult to identify. Where there is overlap every effort should be made to give effect to each text: Article 90 merely says the Vienna convention does not prevail over other agreements. If, for example, an international agreement overlaps with the Vienna convention but is not as detailed or covers only some aspects of the contract of sale the convention should be used to fill gaps rather than domestic law applicable under the rules of private international law.

Of existing international agreements which may overlap with the Vienna convention, the 1955 Convention on the Law Applicable to the International Sale of Goods [89] poses the most difficult problem of interpretation. At the Vienna conference the observer from the Hague Conference on Private International Law raised the issue of the relation between the two conventions.[90] Some delegations had questioned whether they would have to denounce the 1955 convention if they ratified or acceded to the 1980 convention. They pointed out that the 1964 Hague sales conventions permit a State which is a party to the 1955 convention to ratify or accede to the 1964 conventions with a reservation making ULIS and ULF applicable only when the conflict-of-laws rules of the 1955 convention lead to a State which has adopted the uniform laws. These delegations feared that the omission of a similar reservation in the 1980 convention might be read, by argument a contrario, to require denunciation of the 1955 convention. The observer from the Hague [page 1-42] Conference suggested, however, that there is no contradiction between the two conventions because Article 1 of the Vienna convention "left the question of conflict of laws open and referred expressly to the application of the rules of private international law."[91]

Notwithstanding this reassurance, there may be some cases where the two conventions lead to conflicting results. A forum sitting in a jurisdiction which has adopted both conventions may be required, for example, to apply the Vienna convention because the parties have their places of business in different Contracting States, when in the same case the conflict-of-laws rules of the 1955 convention lead to the law of a non-Contracting State. This conflict may result from differing rules on where the parties are deemed to have their places of business or special rules for particular issues. When each party has his place of business in a State which is a party to the 1955 Hague convention Article 90 would resolve this conflict by giving primacy to the 1955 text. When, however, the forum has adopted the 1955 convention but the other relevant jurisdictions have not, Article 90 suggests, by negative implication, that the Vienna convention will prevail. This result, as suggested by the remarks of the observer from the Hague Conference, probably was not intended. In any event, the revision of the 1955 convention presently underway should clarify the relation between the two conventions.[92]

     [4] Permitted Declarations and Reservations

Five articles (CISG arts. 92-96) provide for declarations or reservations to the convention which a State may make.[93] [page 1-43] Although a State may make other declarations not contemplated by the convention it may only adopt the reservations expressly authorized by the convention.[94] It was apparently assumed that there would be special provisions for federal states and for States "with the same or closely related" sales laws; the former provision being common in private international law treaties and the latter appearing in the 1964 Hague sales conventions.[95] Debates within UNCITRAL had also conceded that a State should be allowed to avoid the convention's rules permitting a contract to be proved by any means and that a State could adopt either or both Parts II and III.[96] At the Vienna conference there was strong pressure, especially from the Austrian delegation, to limit the number of authorized reservations and, with the surprising exception of the last-minute adoption of the Article 95 reservation, this pressure succeeded.

[a] Adopting only Part II or Part III (Art. 92)

Article 92 authorizes a State to ratify or accede to only Part II or Part III of the convention.[97] The provision was agreed to as the price for consolidating the formation and substantive sales texts of the 1964 uniform sales laws.[98] The [page 1-44] Scandinavian countries have indicated that they will adopt only Part III in order to preserve their own uniform laws on contract formation, which cover contracts in addition to the contract for sale.[99] Article 92 states the consequences of this declaration. If Denmark, for example, ratifies only Part III it will not be considered a Contracting State with respect to issues about the formation of an international sales contract and the rules of private international law will determine what State's laws govern the formation of the contract.

[b] Federal State Clause (Art. 93)

Article 93 sets out the rules for ratification or accession by a federal state in which the federal government has only limited constitutional authority to bind by treaty the territorial units within the federation.[100] Canada and Australia have traditionally been the countries most interested in the clause, which has not yet become boilerplate although it appears in numerous private international law conventions.[101] The Second Committee of the 1980 conference spent considerable time debating the alternative draft texts submitted by the Secretary-General.[102] The alternative adopted requires the convention to be in force in at least one territorial unit and makes clear that a contract party from a unit which has not agreed to enforce the convention will not be considered as having a place of business in a [page 1-45] Contracting State. If Canada, for example, accedes to the convention but Quebec does not approve in accordance with Canadian constitutional practice, the French company's subsidiary in Quebec in the hypothetical discussed above would not be in a Contracting State.

[c] Closely-Related Legal Systems (Art. 94)

Article 94 authorizes a State to declare that the convention will not apply to contracts between its traders and traders in a State with "the same or closely related legal rules on matters governed by [the] Convention."[103] A State may make this declaration even after it has ratified or acceded to the convention, although if the State with the closely-related rules is also a party to the convention the declaration must be joint or there must be reciprocal unilateral declarations. During the debates within UNCITRAL and at the 1980 conference delegations from the Benelux countries and Australia-New Zealand expressed interest in this provision. The potential use of this declaration, however, is not limited to these countries. In particular, the United Kingdom and Commonwealth countries which still have sales legislation modeled on the British Sale of Goods Act may conclude that this declaration will allow accession without disturbing existing expectations of their businessmen. There have even been suggestions that Canada and the United States could make such declarations.[104]

[d] Excluding Article l(l)(b) (Art. 95)

Article 95, which allows a State to declare that it will not [page 1-46] be bound by Article l(l)(b), has already been discussed. The Czechoslovak delegation proposed the article with the argument that this reservation would permit greater scope for the application of the foreign trade codes promulgated by Czechoslovakia and the German Democratic Republic.[105] As was suggested earlier, the reservation will necessarily have a broader impact if other countries, including the United States, make this declaration.

[e] Formal Requirements (Art. 96)

Article 96 permits a Contracting State to declare that it will not be bound by the convention provisions which dispense with formal requirements.[106] Commentators suggest that the U.S.S.R., which has legislation requiring contract terms to be expressed in a signed writing, was the principal supporter of this reservation.[107] The effect of an Article 96 declaration is that the convention provisions do not apply; the article does not make the declaring State's formal requirements binding on parties which trade with organizations in the declaring State. It has been suggested that the rules of private international law will determine which State's legal rules on form will apply.[108] The proposed revision of the 1955 Hague conflicts convention, however, allows a State to declare it will not be bound by the rules of private international law with respect to issues of form, which suggests that proponents of this reservation believe [page 1-47] that the formal rules of a declaring State determine whether an agreement with a trade organization in that State is enforceable.[109]

     [5] Rejected Proposals and Missing Provisions

Among the amendments to the draft final provisions which were proposed and rejected at the Vienna conference an amendment to allow a State to declare that it would apply the convention only if parties choose to "opt in" to the convention deserves special mention.[110] The effect of the amendment would have been to reproduce the reservation permitted by Article V of the 1964 Hague sales convention, although the discussion at the 1980 conference also considered reversing the "opt out" formula in Article 6 and replacing it with an "opt in" formula applicable to all contracts. In support of the amendment proposed by his delegation the Australian representative suggested the amendment would reassure businessmen in some countries and would maximize the number of States which would ratify the convention.[111] Opposition to the proposed amendment is summarized neatly in the report of the French delegate's statement: "Contracting States that were allowed to make reservations of the kind provided for in the new article would have no obligations under the Convention. If such States were among the Parties whose accession made it possible for the Convention to enter into force, the anomalous situation might arise in which the Convention would become operative with many of its original signatories not bound by its terms. The Australian proposal would upset the [page 1-48] whole process of progress toward the unification of private law."[112] At an early meeting the Second Committee rejected the proposal by a large margin (17 votes to 4) and the Australian delegation did not persist.[113]

Another provision of the 1964 convention does not appear in the 1980 text and apparently was not considered: a mechanism for review of the text after the 1980 conference. Article XIV of the Hague sales convention provided for considering proposed revisions of the uniform law. The 1978 Hamburg convention on carriage of goods by sea also includes several articles on revision and amendment of its text.[114] Even without a special provision on amendment, of course, a subsequent protocol may amend the 1980 text, a technique used at the Vienna conference to revise the 1974 prescription convention. Nevertheless, failure to develop institutions, like a permanent editorial board, which could monitor problems raised by litigation or doctrinal commentary and which could propose amendments may limit the long-run effectiveness of the 1980 convention. Perhaps UNCITRAL will take on this role. [page 1-49]

§ 1.04 Conclusion

The Vienna convention will not revolutionize international trade. By its own terms it is modest in scope: it does not require Contracting States to apply the convention to all international sales contracts; it avoids significant, difficult issues, such as questions of contract validity; and it permits parties to exclude the convention or vary the effect of its provisions with virtually no limitation. No doubt business enterprises which can agree on a known national sales law will continue to choose that law rather than an untested, multilingual convention. But if traders cannot agree on the applicable law, the convention will be a readily-available compromise which is an improvement on the uncertainty of conflict-of-laws rules and the difficulty of proving foreign law.[115] The convention's immediate impact on international trade transactions may be modest but given the tremendous volume of these transactions even a modest impact may be significant.

The Vienna convention, moreover, is only one among many initiatives to develop legal texts for international sales transactions. Within UNCITRAL itself the Commission prepared the 1974 prescription convention and more recently has drafted texts on liquidated damages and penalty clauses.[116] UNIDROIT is working on a long-term project to codify international trade law,[117] was the moving force [page 1-50] behind the 1983 agency convention,[118] and has sponsored draft texts on contract validity [119] and the rights of a bona fide purchaser of goods.[120] A Special Commission of the Hague Conference on Private International Law is now at work on revising the 1955 conflicts convention [121] and the Conference has already approved a draft text on consumer sales.[122] Equally important has been the work of the International Chamber of Commerce which in successive editions of INCOTERMS [123] has gathered and codified usage as to trade terms commonly used in international trade.

Although only one among numerous projects, the Vienna convention does have special significance. Its technology and allocation of risks will influence the drafting not only of other sales texts but also of other international trade law provisions. This influence can already be seen in the 1983 agency convention and the work of the Hague Conference's special commission on sales. Just as important is the timing of the Vienna convention. Wide-spread acceptance of the convention will be a substantial impetus for adoption of other, more specialized international trade law initiatives. The international sales contract is a basic institution, to which the specialized contracts of carriage, insurance, payment, and security are ancillary. As the legal text governing the [page 1-51] international sales contract, therefore, the Vienna convention may ultimately be the cornerstone of a revived lex mercatoria. [page 1-52]


APPENDIX

Application of CISG Art. l(l)(b) [1]

          Parties 3    
Forum : Applicable Law [2]    K-K   K-R   R-R     K-NK     R-NK     NK-NK
K : K Y Y Y[4]      Y      Y      Y
  : R Y Y Y Q[N] Q[N] Q[N]
  : NK Y Y Y      N      N      N
R : K Y Y Y Q[Y] Q[Y] Q[Y]
  : R Y Y Y      N      N      N
  : NK Y Y Y      N      N      N
NK : K Y Y Y Q[Y] Q[Y] Q[Y]
  : R Y Y Y      N      N      N
  : NK N N N      N      N      N
Key    K:       Contracting State
  R:       Contracting State which has made an Art. 95 declaration
  NK:       Non-Contranting State
  Y:       Yes, CISG is applicable
  N:       No, CISG is not applicable
  Q:       Query whether CISG is applicable

Appendix notes:

1. Assumptions: (a) CISG is inforce pursuant to Art. 99; (b) the parties have not agreed to exclude CISG.

2. This left-hand column, indicates the forum and the law applicable by virtue of the forum's private international law rules. Example: "K : K" means the forum sits in a Contracting State and the law of the Contracting State is applicable because of the forum's choice of law rules.

3. The six columns on the right are classified according to where the parties to an international sales contract have their places of business. Example: "R-NK" means one party has its place of business in a Contracting State which has made an Art. 95 reservation, while the other party has its place of business in a non-Contracting State.

4. CISG applies to cases which [are presented in bold type] by virtue of Art. l(l)(a) and the forum's rules of private international law are not relevant. [page 1-53]


FOOTNOTES

1. The text of the U.N. Convention on Contracts for the International Sale of Goods is set out in Annex I to the Final Act of the Vienna conference. Final Act, A/CONF. 97/18, Annex 1 (April 10, 1980). The signing took place on April 11, 1980. The text is reprinted in the official records of the conference. United Nations Conference on Contracts for the International Sale of Goods, Official Records, A/CONF. 97/19 at 178-190 (1981) (Sales No. E.82. V.5) [hereinafter cited as "Official Records"]. The English text also may be found in Senate Treaty Doc. 98-9, 98th Cong., 1st Sess. 22-43 (1983); 19 Int'l Legal Materials 668-699 (1980).

2. Several commentators have already published studies of the scope provisions. Dore, Choice of Law under the International Sales Convention: A U.S. Perspective, 77 Am. J. Int'l .L. 521 (1983); Réczei, Area of Operation of the International Sales Conventions, 29 Am. J. Comp. L. 513 (1981); Réczei, The Rules of the Convention Relating to its Field of Application and to its Interpretation, 7 Digest of Commercial Laws 53 (March 1980); Note, Contracts for the International Sale of Goods: Applicability of the United Nations Convention, 69 Iowa L. Rev. 209 (1983). See also the relevant parts of the two book-length studies of the convention: J. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention §§ 35-84, 458-460 (1982); P. Schlechtriem, Einheitliches UN-Kaufrecht 7-22, 106-108 (1981).

3. For a general history of the CISG text, see Secretariat, Historical Introduction to the Draft Convention on Contracts for the International Sale of Goods, A/CONF.97/5 (14 March 1979), reprinted in Official Records 3-5.

4. For a list of the relevant UNIDROIT documents, see Harvard Law School Library, Index to Proceedings and Documents of the International Institute for the Unification of Private Law 1928-1965 at 5-10 (May 1967).

5. Rabel, Observations sur l'utilité d'une unification du droit de la vente au point de vue des besoins de commerce international (1929), reprinted in 22 Rabels Zeitschrift 117 (1957). The observations were accompanied by a comparative study prepared by the Berlin Institute under Professor Rabel's direction: Rapport sur le droit comparé en matière de vente (U.D.P. Etudes IV/S.d.N. 1929.C.D.1929). This study was the basis of Professor Rabel's classic comparative study of sales law, Das Recht des Warenkaufs (1936, 1957).

In the 1920s the International Law Association began work on a text to unify the conflict-of-laws rules governing sales. The Hague Conference on Private International Law took up this work in 1928 and a committee of experts was appointed to prepare a draft. In this same period, a Franco-Italian commission studied the feasibility of establishing uniform rules for the law of obligations. For a brief summary of these early attempts, see Nadelmann, The Uniform Law on the International Sale of Goods: A Conflict of Laws Imbroglio, 74 Yale L.J. 449, 450-451 (1965).

6. Gutteridge, An International Code of the Law of Sale, 14 Brit. Y.B. Int'l L. 75, 82 (1933).

7. 1935 text: Projet d'une loi internationale sur la vente (S.d.N. 1935 -- U.D.P. -- Projet I) (French and English texts); 1939 text: Projet d'une loi uniforme sur la vente internationale des objets mobiliers corporels et rapport (2e rédaction) (S.d.N.-U.D.P.-Projet 1(2)), reprinted in UNIDROIT, Unification of Law: 1948 at 101-159 (1948) (French and English texts). The government comments on the 1935 draft are reprinted in 9 Rabels Zeitschrlft 651 (1936). For a discussion of the 1935 draft, see Rabel, A Draft of an International Law of Sales, 5 U. Chi. L. Rev. 543 (1938). Professor Rabel also commented on the 1939 text in Rabel, International Sales Law, in University of Michigan Law School Summer Institute on International and Comparative Law, Lectures on the Conflict of Laws and International Contracts 34 (1951).

8. 1936 text on formation: Preliminary Draft of a Uniform Law on International Contracts made by Correspondence, reprinted in UNIDROIT, Unification of Law: 1948 at 160-167 (1948) (French and English texts). For brief summaries of the early history of the draft formation text, see Schmidt, The International Contract Law in the Context of Some of its Sources, 14 Am. J. Comp. L. 1, 1-14 (1965); Farnsworth, Formation of International Sales Contracts: Three Attempts at Unification, 110 U: Pa. L. Rev. 305, 306-307 (1962).

9. See generally the Preliminary Observation to the 1935 draft, supra note 7, at 15-22 (1935) (English edition). For the history of these early debates on scope, see Keyes, Toward a Single Law Governing the International Sale of Goods -- A Comparative Study, 42 Calif. L. Rev. 653, 661-662 (1954).

10. Commenting on the 1935 uniform law's restricted sphere of application Professor Rabel wrote "[T]he proposed international law is not meant as a substitute for the actual domestic law. The overwhelming majority of sales contracts remain under the same rules as they are at present. It intends to do no more than to take the place of the rules of the conflict of laws concerning sales and the legal norms called for by the conflict rules. The law thus to be applied now might be that of any foreign country, different in different cases, and difficult to apply. The proposed international law, on the other hand, would be uniform, kindred to the Sales Act, and at least intelligible." Rabel, A Draft of an International Law of Sales, 5 U. Chi. L. Rev. 543,544 (1938). Much later Rabel noted that he originally proposed to limit the scope of the unifornl law to international sales for tactical reasons "although all the time [he] vainly hoped to be overruled." Rabel, The Hague Conference on the Unification of Sales Law, 1 Am. J. Comp. L. 58, 60 (1952).

11. Compare generally Articles 1-8 of the 1935 draft with CISG arts. 1-6. The rules in the 1935 draft with respect to the irrelevance of both the commercial-civil distinction and the nationality of the parties are set out in Articles 3 & 8. Cf. CISG art. 1(3). On the exclusion of property questions, see Article 5; risk of loss provisions appear at Articles 103-108. Cf. CISG arts. 4(b), 66-70.

12. Actes de la conférence convoquée par Ie gouvernement royal des Pays-Bas sur un projet de convention relatif à une loi uniforme sur la vente d'objets mobiliers corporels (1952). The Final Act is published in UNIDROIT, Unification of Law: 1947-1952 at 282 (1954) (French and English texts). For a comment on the discussion of the 1939 sales text at the 1951 conference, see Rabel, The Hague Conference on the Unification of Sales Law, 1 Am. J. Comp. L. 58 (1952). See generally UNIDROIT, Unification of Law: 1948 at 20-29 (1948); UNIDROIT, Unification of Law: 19471952 at 28-35 (1954).

13. 1956 text: Draft Uniform Law on the International Sale of Goods, Text prepared by the Special Commission and Report (1956); 1963 text: Draft of a Uniform Law on the International Sale of Goods, text of the Articles modified in accordance with the propositions of the Special Commission in 1963 (1963). These texts, in both French and English, are reprinted in II Diplomatic Conference on the Unification of Law governing the International Sale of Goods, Records and Documents of the Conference at 3-78 and 213-231 (1966) [hereinafter cited as "Hague Conference Records & Documents"]. For an analysis of the 1956 text, see Honnold, A Uniform Law for International Sales, 107 U. Pa. L. Rev. 299 (1959).

14. UNIDROIT, Projet de loi uniforme sur la formation des contrats de vente internationale des objets mobiliers corporels et rapport (1959), reprinted in II Hague Conference Records & Documents 421-432.

15. The texts of the 1964 conventions and uniform laws appear in I Hague Conference Records & Documents 333-354. On coming into force in August 1972 the official texts were printed in the U.N. Treaty Series: 834 U.N.T.S. 107 (1972); 834 U.N.T.S. 169 (1972). A list of States which have adopted these conventions is set out in note 25 infra. For descriptions of the 1964 conference proceedings, see Honnold, The Uniform Law for the International Sale of Goods: The Hague Convention of 1964, 30 Law & Contemp. Probs. 326,328-332 (1965); Tunc, Les conventions de La Haye du ler juillet 1964 portant loi uniforme sur la vente internationale d'objets mobiliers corporels, 16 Rev. int'l dr. comp. 547 (1964). For a bibliography of writings on the uniform laws, see 27 Am. J. Comp. L. 345-349 (1979).

16. The commentary appears in I Hague Conference Records & Documents 357-391.

17. I Hague Conference Records & Documents 330.

18. ULIS art. 1(1) provides:

"The present Law shall apply to contracts of sale of goods entered into by parties whose places of business are in the territories of different States, in each of the following cases:
(a) where the contract involves the sale of goods which are at the time of the conclusion of the contract in the course of carriage or will be carried from the territory of one State to the territory of another;
(b) where the acts constituting the offer and the acceptance have been effected in the territories of different States;
c) where delivery of the goods is to be made in the territory of a State other than that within whose territory the acts constituting the offer and the acceptance have been effected."

19. Analysis of replies and comments by governments on the Hague Conventions of 1964: report of the Secretary-General, [1968-1970] I Y.B. UNCITRAL 167-168, A/CN.9/31, paras. 58-66.

20. For discussion of proposed amendments to the scope provision of the uniform sales law, see I Hague Conference Records & Documents 18-20, 23-24,141-148,275. The proposal to insert "Contracting" into the phrase "different States" was submitted by the delegations of the Federal Republic of Germany, the United Kingdom, and the United States. It was rejected in a plenary session by a vote of 11/11, with two abstentions. Id. at 275. Professor Nadelmann gives the following "shocking" example of how the resulting official text might operate. "[I]f a person in Canada sells goods to a person in the United States which goods must be shipped to the United States, in any subsequent disputes between the parties respecting the transaction either party can -- notwithstanding the fact that neither the United States nor Canada has adopted the Uniform Law -- take advantage of the law if its relevant provisions are more favorable to that party than the otherwise applicable law. The party merely brings suit in a 'contracting' state which will automatically apply the Uniform Law. This result may be accomplished as long as the other party happens to have assets in a 'contracting' state and presence of assets is a basis there for assumption of jurisdiction." Nadelmann, supra note 5, at 457.

21. The principal convention to which Article IV refers is the 1955 Hague Convention on the Law applicable to International Sales of Goods. 510 U.N.T.S. 147 (1964). The convention came into force on September 1, 1964. Belgium, Denmark, Finland, France, Italy, Niger, Norway, Sweden and Switzerland have ratified or acceded to the convention.

22. Article V was proposed by the delegation of the United Kingdom. I Hague Conference Records & Documents 312-314; II id. 566 (1966).

23. A. Tunc, Commentary, reprinted in I Hague Conference Records & Documents 357, 362-363. See also Tunc, The Uniform Law on the International Sale of Goods: A Reply to Professor Nadelmann, 74 Yale L. J. 1409, 1411-1413 (1965).

24. Report of the Delegation of the United States of America to the Diplomatic Conference on the Unification of Law Governing the International Sale of Goods (1964), reprinted in National Conference of Commissioners on Uniform State Law, 1964 Handbook 237-248; Berman, The Uniform Law on International Sale of Goods: A Constructive Critique, 30 Law & Contemp. Probs. 354 (1966); Nadelmann, supra note 5. But see Daw, Some Comments from the Practitioner's Point of View, 14 Am. J. Comp. L. 242 (1965); Honnold, supra note 15.

25. ULIS and ULF came into force in August 1972 when five States adhered to the 1964 conventions. Belgium, The Gambia, Federal Republic of Germany, Israel, Italy, Netherlands, San Marino, and the United Kingdom have adopted ULIS, while the same countries, with the exception of Israel, have adopted ULF.

26. For the history of the drafting within UNCITRAL, see Honnold, The Draft Convention on Contracts for the International Sale. of Goods: An Overview, 27 Am. J. Comp; L. 223 (1979). Insight into the debates at the Vienna conference is provided by Perrott, The Vienna Convention 1980 on Contracts for the International Sale of Goods, 1980 Int'l Contract -- L. & Fin. Rev. 577.

27. See Report of UNCITRAL on the work of its eleventh session, A/33/17, paras. 15-18 (1978), reprinted in [1978] IX Y.B. UNCITRAL 11, 13.

28. Very late in the day there were proposaals that the draft UNCITRAL text should be adopted as model rules rather than a convention. See Report of UNCITRAL on the work of its tenth session, A/32/17, paras. 20-32 (1977), reprinted in [1977] VIII Y.B. UNCITRAL 11, 13-15. The Sixth (Legal) Committee subsequently took up this point. See A/32/402, para. 18 (1977), reprinted in [1978] IX Y.B. UNCITRAL 3, 5.

29. See Secretariat Commentary on the Draft Convention on Contracts for the International Sale of Goods, A/CONF.97/5 (14 March 1979), reprinted in Official Records 14-66. The United States strongly urged the adoption of a commentary to accompany the final text on the ground that its explanations would prove helpful to practitioners and would facilitate ratification. A/CONF.97/8, page 26.

30. For a brief and amusing study of the evolution of the CISG text, see Eörsi, A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods, 31 Am. J. Comp. L. 333 (1983).

31. ULIS arts. 1-8; ULF arts. 1-2.

32. Compare CISG art. 1(1) with ULIS art. 1(1). The text of the latter provision is set out at note 18 supra.

33. Report of UNCITRAL on the work of its fourth session, A/8417, paras. 57-59 (1971), reprinted in [1971] II Y.B. UNCITRAL 9, 18-20; Report of UNCITRAL on the work of its third session, A/8017, paras. 22-32, 50-51 (1970), reprinted in [1968-1970] I Y.B. UNCITRAL 129, 132-136; Report of the Working Group, third session, A/CN.9/62, Annex II, paras. 1-8 (1972), reprinted in [1972] III Y.B. UNCITRAL 77,82-83; Report of the Working Group, second session, A/CN.9/52, paras. 11-42 (1971), reprinted in [1971] II Y.B. UNCITRAL 50,51-55; Report of the Working Group, first session, A/CN.9/35, paras. 10-44 & Annex III (1970), reprinted in [1968-1970] I Y.B. UNCITRAL 176, 178-181 & 198-20l.

34. The debate in the plenary session on Article 95 is set out in Official Records 229-230. For a more detailed analysis of the reasons behind the Czechoslovak amendment, see Réczei, Area of Operation of the International Sales Conventions, 29 Am. J. Comp. L. 513, 519-521 (1981).

35. Report of UNCITRAL on the work of its fourth session, A/8417, paras. 58-62 (1971), reprinted in.[1971] II Y.B. UNCITRAL 9, 18-19; Report of Working Group, second session, A/CN.9/52, paras. 14-31 (1971), reprinted in [1971] II Y.B. UNCITRAL 50, 52-54.

36. CISG art. 2(a). See Official Records 238-239.

37. CISG art. 5. See Official Records 201, 245-246.

38. See ULIS art. 4 (parties may choose to have uniform law apply subject to mandatory provisions) and art. 5(2) (uniform law subject to mandatory provisions "protecting buyer by installments).

39. See note 18 supra. In theory, under the revised text of CISG a transaction may be concluded and delivery made in a single State yet be "international" for the purposes of the convention. For example, in the hypothetical discussed in the text, the manager of the French seller may bring a sample to the U.S. and after negotiations sell the sample to some U.S. buyer. The test of "internationality" appears to be met. If the buyer does not have reason to know, however, that the seller is not a French enterprise then the convention does not apply by its own terms (CISG art. 1(2)).

40. For further analysis of a similar hypothetical case, see J. Honnold, supra note 2, at §§ 43, 124. See also Note, supra note 2, at 218-221.

41. See Uniform Commerical Code §§ 2-106, 2-301; [U.K.] Sale of Goods Act, 1979, s. 2; [French] Code Civil art. 1582. See generally Kahn, La Convention de Vienne du 11 avril 1980 sur les contrats de vente internationale de marchandises, 33 Rev. int. dr. comp. 951, 954-956 (1981).

42. Although most legal systems recognize the use of analogy in statutory construction there is no accepted practice recognizing analogy for international agreements.

43. CISG art. 2(1)-(3).

44. UNCITRAL Commentary, Art. 2, paras. 2-10, reprinted in Official Records 16.

45. CISG art. 3(1).

46. CISG art. 3(2).

47. CISG art. 2(a): "This Convention does not apply to sales: (a) of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use."

48. ULIS art. 5(2) subordinated the uniform law to mandatory national legislation protecting buyers who purchased by installment. At the 1980 conference the Norwegian delegate questioned whether the Vienna text dealt adequately with the consequences of the buyer's failure to pay all installments but, upon being reassured that the settlement of accounts of parties to these contracts would be deemed excluded from the convention by Article 6, the delegate withdrew an amendment to clarify the matter. A/CONF.97/C.1/SR.3, paras. 31-34, reprinted in Official Records 246.

49. Soon after completion of the work on the draft sales convention the UNCITRAL Secretariat studied the problem of barter and barter-like transactions. The reports of the Secretariat examine the legal nature of these transactions and conclude that they do not constitute a single legal category which could be regulated by a single unified legal structure. Report of the Secretary-General: barter or exchange in international trade, A/CN.9/159 (18 April 1979), reprinted in [1979] X Y.B. UNCITRAL 37; Note by the Secretariat: international barter or exchange, A/CN.9/149/Add.2 (12 May 1978), reprinted in [1978] IX Y.B. UNCITRAL 190-191. That these studies were undertaken suggests that the Commission did not believe barter transactions fell within the draft sales convention.

50. Although the English texts of both ULIS and CISG use the term "goods," the French text has been amended from "objets mobiliers corporels" to read "marchandises." The French commentators have not been happy with the change, suggesting that the prior term had an accepted technical meaning while the new term does not. Kahn, supra note 41, at 956; Tallon, La consécration de la notion de conformite apres La Convention des Nations-Unies, in Rechtsvergleichung, Europarecht und Staatenintegration 753, 760 n.20 (G. Lüke, G. Ress & M. Will eds. 1983).

51. CISG art. 2(4)-(6). UNCITRAL Commentary, Art. 2, paras. 7-10, reprinted in Official Records 16.

52. At the 1980 conference a proposed amendment to exclude "oil" transactions was defeated at a plenary session. A/CONF.97/SR.6, paras. 11-22, reprinted in Official Records 200-201.

53. See Section 2.1 supra.

54. These cases arise if one or both of the parties is from a non-Contracting State; if the forum before which the dispute is brought sits in a Contracting State which has not made an Article 95 declaration; and if the forum's rules of private international law lead to the application of the law of a Contracting State which has made an Article 95 declaration.

55. A/CONF.97/L.4, Alternative I, reprinted in Official Records 170. Paragraph (2) of this alternative states: "This Convention does not apply if the rules of private international law lead to the application of the law of a State making a declaration under the preceding paragraph unless places of business of the parties to the contract are in different Contracting States."

56. A/CONF.97/SR.11, paras. 78-93, reprinted in Official Records 229-230.

57. These cases arise if one or both of the parties is from a non-Contracting State; if the forum sits in a non-Contracting State or a State which has made an Article 95 declaration; and the forum's rules of private international law lead to the law of a Contracting State.

58. A Special Commission of the Hague Conference on Private International Law charged with revision of the 1955 conflicts convention, supra note 21, has recommended that the law of the State where the seller has his place of business be the applicable law in most cases where the parties have not chosen the applicable law. Draft Convention on the Law applicable to Contracts for the International Sale of Goods, art. 8 (Prelim. Doc. No.4, 18 November 1983). See also [E.E.C.] Convention on the Law Applicable to Contractual Obligations, 1980, Art. 4 (Official Journal No. L. 266, Oct. 9, 1980). Cf. Restatement (Second) of Conflict of Laws §§ 186-188, 191 (1969).

59. The Hague Conference on Private International Law texts typically refer to the municipal law of a State and explicitly exclude its rules of private international law. See, e.g., Draft Convention, supra note 58, art. 14. See also E.E.C. 1980 conflicts convention, supra note 58, Art. 15 (renvoi excluded).

60. UNCITRAL Commentary, Art. 1, para. 7, reprinted in Official Records 15. This paragraph states in part: "Even if one or both of the parties to the contract have their places of business in a State which is not a Contracting State, the Convention is not applicable if the rules of private international law of the forum lead to the application of the law of a Contracting State." (Emphasis added.) See also Report of the Working Group, first session, A/CN.9/35, Annex III, para. 8 (1970), reprinted in [1968-1970] I Y.B. UNCITRAL 176, 199.

61. See note 21 supra.

62. Article 3 of the 1955 conflicts convention states in relevant part:

"In default of a law declared applicable by the parties ..., a sale shall be governed by the domestic law of the country in which the vendor has his habitual residence at the time when he receives the order. If the order is received by an establishment of the vendor, the sale shall be governed by the domestic law of the country in which the establishment is situated.

"Nevertheless, a sale shall be governed by the domestic law of the country in which the purchaser has his habitual residence, or in which he has the establishment that has given the order, if the order has been received in such country, whether by the vendor or by his representative, agent or commercial traveller."

The English translation is taken from I Register of Texts of Conventions and Other Instruments concerning International Trade Law 5 (1971).

63. At the time it signed the convention the United States indicated it would make an Article 95 declaration. The U.S. State Department analysis of Article 95 is reported in U.S. Senate Treaty Doc. No. 98-9, 98th Cong., 1st Sess. at 21-22 (1983).

64. See also the discussion at notes 54-56 and the accompanying text (whether a State which makes a declaration under Article 95 remains a "Contracting State" under para. (l)(b) in jurisdictions where this paragraph is in effect).

65. Article 12, together with Article 96, permits a State to declare that it will not be bound by the convention's provisions dispensing with formal requirements.

66. A/CONF.97/8, Add. 2, p.7. See also the expressions of support for the principle of party autonomy expressed by delegates from Egypt, Korea and Chile. A/CONF.97/C.1/SR.4, paras. 60, 61 & 74, reprinted in Official Records 252-253.

67. A/CONF.97/C.1/SR.3, paras. 53-65, reprinted in Official Records 247-248.

68. A/CONF.97/C. 1/SR.4, paras. 58-76, reprinted in Official Records 252-253.

69. Compare J. Honnold, supra note 2, at § 76 with Bonell, Some Critical Reflections on the New UNCITRAL Draft Convention on International Sale, 1978-11 Revue de Droit Uniforme/Uniform L Rev. 2,4-5 and Dore & De Franco, A Comparison of the Non-Substantive Provisions of the UNCITRAL Convention on the International Sale of Goods and the Uniform Commercial Code, 23 Harv. Int'l L.J. 49, 53 (1982).

70. ULIS art. 3 provides: "The parties to a contract of sale shall be free to exclude the application thereto of the present Law either entirely or partially. Such exclusion may be express or implied."

71. Report of the Working Group, second session, NCN.9/52, para. 45 (1971), reprinted in [1971] II Y.B. UNCITRAL 50,55.

72. UNCITRAL Commentary, Art. 5, para. 2, reprinted in Official Records 17.

73. A/CONF.97/C.lISR.4, paras. 4-31, reprinted in Official Records 248-250.

74. See also Feltham, The United Nations Convention on Contracts for the International Sale of Goods, 1981 J. Bus. L. 346, 348-349 ("this contract shall be governed by the domestic law of England and the United Nations Convention on Contracts for the International Sale of Goods is hereby excluded."); Perrott, supra note 26, at 580 ("English law, that is, the English Sale of Goods Act 1979;" "French Law, but excluding the Vienna Convention 1980").

75. Since the rules of private international law will usually enforce the parties' choice of governing law a clause choosing French law would make the convention applicable by virtue of Article l(l)(b). See UNCITRAL Commentary; Art. 1, para. 8, reprinted in Official Records 15.

75a. A/CONF.97/SR.ll, paras. 54-68, reprinted in Official Records 228.

76. UNIDROIT Draft of a Law for the Unification of certain rules relating to validity of contracts of international sale of goods, 1972, reprinted in 1973-1 Revue de Droit Uniforme/ Uniform L. Rev. 60; see also the study prepared by Professors U. Drobnig and O. Lando for UNIDROIT: The Substantive Validity of International Contracts: Mistake, Fraud, Threat, Unequal Bargaining Power and Gross Unfairness (Study L-Doc. 20, February 1982).

77. Report of the Working Group, ninth session, A/CN.9/142, paras. 48-69, reprinted in [1978] IX Y.B. UNCITRAL 61, 65-66.

78. The Working Group used as the basis of its study the 1972 UNIDROIT Draft Law, supra note 76, and a Report of the Secretary-General which studied the UNIDROIT text. A/CN.9/128, annex II, reprinted in [1977] VIII Y.B. UNCITRAL 90.

79. CISG art. 42(2)(b).

80. A/CONF.97/C.l/SR.3. paras. 11-30. reprinted in Official Records 245-246.

81. CISG arts. 74-77.

82. A/CONF.97/C.l/SR.3. paras. 14. 18-20 & 26. reprinted in Official Records 245-246.

83. A/CN.9/135, reprinted in [1977] VIII Y.B. UNCITRAL 164; Report of UNCITRAL on the work of its tenth session, A/32117, reprinted in [1977] VIII Y.B. UNCITRAL 11.

84. Report of UNCITRAL on the work of its eleventh session, A/33/17, para. 28(2)(b), reprinted in [1978] IX Y.B. UNCITRAL 11, 14.

85. A/CONF.97/6 (31 October 1979), reprinted in Official Records 66-70.

86. By my count 29 amendments were proposed (17 written, 9 oral, and 3 working group proposals); 16 proposals were adopted, 8 rejected, 2 sent to the drafting committee, and 3 withdrawn. The percentage of amendments adopted is much higher than for the rest of the convention.

87. CISG art. 99(3)-(6).

88. A/CONF.63/17, Art. 37, paras. 1-3, reprinted in [1979] X Y.B. UNCITRAL 145, 171.

89. See note 21 supra.

90. A/CONF.97/C.2/SR.2, paras. 32-34, reprinted in Official Records 440.

91. Id., at para. 33.

92. See note 58 supra. The Draft Convention states that it "does not prejudice the application of' the Vienna convention; query whether this formula is sufficiently clear. Draft Convention, supra note 58, Art. 21(a).

93. See generally J. Honnold, supra note 2, §§ 458-460; P. Schlechtriem, supra note 2, at 106-108. See also Ziegel, The Vienna International Sales Convention, in New Dimensions in International Trade Law: A Canadian Perspective 38,51-52 (J. Ziegel & W. Graham eds. 1982).

94. CISG art. 97.

95. See, e.g., Articles II (closely related legal systems) and XIII (federal state clause) of the 1964 Hague sales convention.

96. See Report of UNCITRAL on the work of its eleventh session, A/33/17, para. 27(2)(b) (requesting Secretary-General to draft provision allowing a Contracting State to accept only part of the convention) and para. 28, Art. (X) (providing article permitting a State to declare it will not be bound by convention's provisions dispensing with formalities), reprinted in [1978] IX Y.B. UNCITRAL 11, 14 & 21.

97. The text of Article 92 is based on Article G of the Secretary-General's draft. See Official Records 69. The provision was adopted with no dissent.

98. Report of UNCITRAL on the work of its eleventh session, A/33/17, paras. 15-18, reprinted in [1978] IX Y.B. UNCITRAL 11, 13.

99. P. Schlechtriem, supra note 2, at 107.

100. The text of Article 93 is based on Article B, Alternative II of the Secretary-General's draft. See Official Records 67. This alternative is based on Article 31 of the United Nations Conference on Prescription (Limitation) in the International Sale of Goods, 1974. The rejected alternative did not require the federal government to do more than submit the convention with a favorable recommendation to the territorial units.

101. Compare Article 31 of the 1974 prescription convention with Article 11 of the Convention on the Recovery Abroad of Maintenance, 1956, 268 U.N.T.S. 3.

102. A/CONF.97/C.2/SR.1, paras. 6-24; A/CONF. 97/C.2/SR. 3, paras. 24-68. The debate is reprinted in Official Records 434-436, 445-447.

103. The text of Article 94 is based on Article C of the Secretary-General's draft. See Official Records 68. A similar provision is found in Article 34 of the 1974 prescription convention and Article 11(1) of the Hague sales conventions.

104. Ziegel, supra note 93, at 52 (notes lack of machinery to decide whether statutory innovations mean that the sales laws of the United States, the United Kingdom, and Canada are no longer closely related).

105. A/CONF.97/SR.11, paras. 78-98, reprinted in Official Records 229-230. A similar proposal had been rejected by the Second Committee. A/CONF.97/C.2/SR.2, paras. 7-18, reprinted in Official Records 439. For further discussion of the reasons for the Czechoslovak proposal, see Réczei, Area of Operation of the International Sales Conventions, 29 Am. J. Comp. L. 513, 520-521 (1981).

106. The text of Article 96 is based on Article (X) of the Secretary-General's draft. See Official Records 68. The draft was taken in turn from decisions taken within UNCITRAL. See note 96.

107. See J. Honnold, supra note 2, at § 129.

108. Id.

109. See Article 19(1)(c) of the draft text revising the 1955 Hague conflicts convention, supra note 58.

110. A/CONF.97/C.2/L.3, reprinted in Official Records 144 (Report of the Second Committee). The proposal was discussed in both the First and Second Committees. A/CONF.97/C.1/SR.3, paras. 37-52; A/CONF.97/C.2/SR.1, paras. 40-56; A/CONF.97/SR.2, paras. 4-6; reprinted in Official Records 247 & 436-439.

111. A/CONF.97/C.2/SR.1, paras. 40-41.

112. Id., at para. 53.

113. A/CONF.97/C.2/SR.2, para. 6.

114. United Nations Convention on the Carriage of Goods by Sea, 1978, Articles 32-33. See also Article 27 of the draft text revising the 1955 Hague conflicts convention, supra note 58.

115. For a vigorous defense of the convention along the lines suggested in the text, see Honnold, The New Uniform Law for International Sales and the UCC: A Comparison, 18 Int'l Law. 23 (1984). For a more muted view of the potential impact of the convention, see Hellner, The UN Convention on International Sale of Goods - An Outsider's View, in Festchrift für Stefan A. Riesenfeld 71, 73-76 (1983).

116. Uniform Rules on Contract Clauses for an Agreed Sum Due upon Failure of Performance, A/CN.9/243, Annex I (29 June 1983). These rules were adopted by UNCITRAL at its sixteenth session.

117. Progressive Codification of International Trade Law, Study L. For a summary of early UNIDROIT work on this study, see Bonell, THE UNIDROIT Initiative for the Progressive Codification of International Trade Law, 27 Int'l & Comp. L.Q. 413 (1978).

118. Convention on Agency in the International Sale of Goods, 1983. An unofficial text of this convention is printed in 22 Int'l Legal Materials 249 (1983).

119. See note 76 supra.

120. Draft Uniform Law on the Protection of the Bona Fide Purchaser of Corporeal Movables, I Unification of Law 223 (1967-1968).

121. See note 58 supra.

122. Hague Conference on Private International Law, Fourteenth Session, Final Act, at 34-35 (1980).

123. I.C.C., International Rules for the Interpretation of Trade Terms (INCOTERMS) (1980 ed.; Publication No. 350).


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