116. The Committee considered a proposal for the deletion of article 11 and then considered a number of compromise proposals.

Deletion of article 11

117. It was proposed that article 11 be deleted as it related to matters of formation and validity of contracts which were outside the scope of the Convention. The view was expressed that such matters should be dealt with in a Convention on Formation or be left to the applicable national law. It was also pointed out that the Sales Convention should not concern itself with how the contents of the contract could be proved as this was a matter of procedure which was also outside its scope. However, the contrary view was expressed that it was crucial that the Convention gave a clear indication of how the contract and its contents can be established for otherwise many of the rights given by the Convention might be put at great risk. In this connexion, reference was made to article 36 on determination of the price. It was also pointed out that deletion of article 11 would be satisfactory only if the matter was in fact dealt with in an international Convention, ratified by the same parties as had ratified the Sales Convention, or if matters of formation were dealt with in the same Convention as matters regulating the rights and obligations of the parties to the contract. In addition, failure to provide a clear rule, whether it be a strict requirement for writing or a flexible approach, would cause great uncertainty to the parties to the contract who may have considerable difficulty in ascertaining national law requirements.

118. The Committee decided, in view of the importance of the question, to consider a number of compromise proposals and to refer these proposals to a special drafting group with the mandate to formulate an acceptable compromise proposal.

119. The representatives of Brazil, the German Democratic Republic, Nigeria, Singapore, Sweden, the Union of Soviet Socialist Republics, and the United States of America were appointed to the Special Drafting Group.

120. The Committee also requested the Special Drafting Group to consider the proposals relating to article 10(2) which required declarations of avoidance to be in writing or to be followed by written notification.

Compromise proposals

121. The Committee considered three compromise proposals.

122. It was proposed that the following be added to the existing text of article 11:

123. In support of this proposal, it was stated that it constituted a compromise in that it permitted the retention of article 11 although, in the view of several representatives, article 11 dealt with matters of formation and validity of contracts which were outside the proper scope of the Convention. However, in order to achieve a proper balance in the text it would be necessary to make an exception for cases where the legislation of any of the States in which the places of business of the parties are situated require that a contract must be concluded in "written form" which was defined to include communications by telegraph and teleprinter as well as those in handwritten or typed form.

124. However, under another view the proposal did not constitute an effective compromise because the substantive rules in article 11 would be set aside if contrary to the legislation in any of the States in which the places of business of the parties are situated even where, if the compromise proposal was not adopted, such legislation would not regulate the contract. In this respect it was stated that the proposal was less of a compromise than the original proposal to delete article 11.

125. The Committee, after deliberation, referred the proposal to the Special Drafting Group.

126. It was also proposed that the following paragraph be added to article 11:

127. In support of this proposal it was stated that the proposed provision went a considerable distance in recognizing the needs of countries which, required written form. However, it was noted that the article would introduce principles of national law into the Convention which might cause inconvenience to businessmen.

128. This proposal was also referred to the Special Drafting Group.

129. A number of representatives and observers were of the view that article 11 should be retained but that it should be made subject to reservations or declarations. It was stated that this would enable parties to know whether they must comply with national requirements relating to the form of the contract. This suggestion was also referred to the Special Drafting Group. [page 33]

130. The Special Drafting Group proposed the following text:

"Article 11

"1. A contract of sale need not be evidenced by writing and is not subject to other requirements as to form. It may be proved by means of witnesses.
"2. Paragraph 1 of this article does not apply to a contract of sale where any party has its place of business in a Contracting State which has made a declaration under article (X) of this Convention.

"Article (X)

"A Contracting State under whose legislation a contract of sale shall be concluded in or evidenced by writing may, at the time of signature, ratification or accession, make a declaration to the effect that article 11, paragraph 1, shall not apply to any sale involving a party having its place of business in a State which has made such a declaration."

131. The Committee adopted a proposal that article 11(1) should conform to article (X) by providing that a contract of sale need not be concluded in writing as well as that it need not be evidenced by writing. Several representatives opposed this proposal because it appeared to imply that the draft Convention was regulating matters concerning the formation of contracts rather than confining itself to contracts which were considered valid by the applicable law. These representatives considered that the proposal was appropriate for a Convention on Formation but not appropriate for a Convention on Sales.

132. The Committee rejected a proposal that article 11(1) be divided into two articles, one dealing with the form of contracts and the other dealing with questions of proof.

133. A representative stated that the definition of "place of business" in article 6(a) would create difficulties in practice in relation to the application of article 11 and article (X). The same representative also indicated that article (X) was based on a system of reciprocity since article 11(1) would only be excluded if both Contracting States had made declarations under article (X). In his view, a declaration by one Contracting State should be sufficient to exclude the operation of article 11(1).

Decision

134. The Committee therefore recommends that the Commission should adopt the following text:

CISG number

Art. 11

"Article 11

"(1) A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirements as to form. It may be proved by any means including witnesses.

CISG number

Art. 12

CISG number

Art. 96

"* Article (X)

"A Contracting State whose legislation requires a contract of sale to be concluded in or evidenced by writing may, at the time of signature, ratification or accession, make a declaration to the effect that article 11, paragraph (1), shall not apply to any sale involving a party having his place of business in a State which has made such a declaration." [page 34]

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