UNCITRAL Digest of Article 29 case law

DIGEST OF ARTICLE 29 CASE LAW

Meaning and purpose of the provision

1. The provision concerns the modification (which includes additions) [1] and termination of an already concluded contract through agreement of the parties. According to article 29(1), the mere consent of the parties is sufficient to effect any variation of the contract. If the parties have, however, agreed in writing on a written form for a modification or termination of their contract paragraph 2 provides that the contract then cannot be modified or terminated otherwise unless and to the extent that it would be inequitable to invoke the form requirement.

2. The provision does, and is intended to,[2] abolish the doctrine of "consideration" of the common law as far as the Convention applies.

Modification or termination by mere agreement

3. An agreement is needed in order for the parties to be able to change a contract provision or to terminate their contract. The existence of such an agreement is determined on the basis of the provisions to be found in Part II (articles 14-24) of the Convention.[3] Article 29 provides that a contract can be modified purely by the agreement of the parties. In line with article 18(1), it was stated that mere silence of one party to proposals of the other to modify does not in itself amount to acceptance,[4] however it has also been stated that there was agreement as to the termination of a contract where a buyer refused to pay due to alleged non-conformity and subsequently the seller offered to market the goods itself, an offer to which the buyer did not reply.[5] One court stated that, although on the basis of article 29 CISG a contract could be modified purely by agreement of the parties, the modification of the purchase price could not result merely from the general mood of a meeting.[6] The acceptance without comment of a bill of exchange as payment has, however, been regarded as implied consent to a postponement of the date for payment provided for in the contract until the maturity of the bill.[7]

4. The interpretation of the parties' agreement as to the modification or termination of the contract is based on the Convention's rules on construction (in particular article 8).

5. The agreement of both parties is all that is required in order to modify or terminate their contract.[8] No form requirements must be met [9] unless the reservation concerning form applies (arts. 11, 12, 96) [10] or unless the parties have agreed otherwise. When article 96 applies, modifications agreed upon only orally are invalid.[11] For all other cases it follows from article 11 as a general principle of the Convention that the parties are free to modify or terminate their contract in any form be it either in writing or orally or in any other form. Even an implied termination of the contract has been held possible;[12] furthermore, it has been held that a written contract may be orally changed.[13]

Form agreements

6. According to article 29(2), a written or oral contract may generally be modified or terminated orally or in writing. If, however, a written contract contains a provision that any modification or termination of the contract must be in writing ("no oral modification"-clause or "written modification"-clause) then the parties cannot modify or terminate the contract in a different way.[14] An oral variation would be ineffective if invoked by one party in such a case unless article 29(2)(2) were to apply.[15]

7. A so-called merger clause according to which the complete contents of prior negotiations is merged in the contract document has been treated like a "no oral modification"-clause.[16] Therefore no evidence of oral agreements prior to the written contract could be adduced in order to modify or terminate that contract.

Abuse of "no oral modification"-clause

8. Article 29(2)(2) provides that a "no oral modification"-clause cannot be invoked by a party who by its conduct aroused the impression not to rely on the clause while, and to the extent that, the other party relied upon that conduct. It was stated that the provision is an expression of the general good faith principle that governs the Convention (art. 7(1)).[17]

FOOTNOTES

* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.

[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.]

1. See CLOUT case No. 86 [UNITED STATES Graves v. Chilewich Federal District Court [New York] 22 September 1994 available online at <http://cisgw3.law.pace.edu/cases/940922u1.html>] (see full text of the decision).

2. See Secretariat Commentary to (then) article 27 ("overcoming the common law rule that "consideration" is required") Commentary on the draft Convention on Contracts for the International Sale of Goods, A/CONF.97/5, reproduced in United Nations Conference on Contracts for the International Sale of Goods: Official Records, at p. 28, paras. 2-3.

3. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>]; to the same effect see CLOUT case No. 153 [FRANCE Cour d'appel [Appellate Court] Grenoble 29 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950329f1.html>], and CLOUT case No. 332 [SWITZERLAND Obergericht [Appellate Court] Basel-Landschaft 5 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991005s1.html>].

4. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>]; CLOUT case No. 332 [SWITZERLAND Obergericht [Appellate Court] Basel-Landschaft 5 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991005s1.html>].

5. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>].

6. CLOUT case No. 153 [FRANCE Cour d'appel [Appellate Court] Grenoble 29 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950329f1.html>].

7. CLOUT case No. 5 [GERMANY Landgericht [District Court] Hamburg 26 September 1990, available online at <http://cisgw3.law.pace.edu/cases/900926g1.html>] (see full text of the decision).

8. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>].

9. CLOUT case No. 413 [UNITED STATES Calzaturificio Claudia v. Olivieri Footwear Federal District Court [New York] 6 April 1998 available online at <http://cisgw3.law.pace.edu/cases/980406u1.html>] (see full text of the decision); [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

10. For a similar case see [BELGIUM Rechtbank [District Court] Hasselt 2 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950502b1.html>].

11. [RUSSIA High Arbitration Court Information Letter 29 of 16 February 1998, available online at <http://cisgw3.law.pace.edu/cases/980216r1.html>] (abstract).

12. [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

13. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>] (see full text of the decision).

14. [ICC Court of Arbitration, case No. 9117 of March 1998, available online at <http://cisgw3.law.pace.edu/cases/989117i1.html>].

15. CLOUT case No. 86 [UNITED STATES Graves v. Chilewich Federal District Court [New York] 22 September 1994 available online at <http://cisgw3.law.pace.edu/cases/940922u1.html>].

16. [ICC Court of Arbitration, case No. 9117 of March 1998, available online at <http://cisgw3.law.pace.edu/cases/989117i1.html>].

17. Compare also CLOUT case No. 94 [AUSTRIA Vienna Arbitration Award case No. SCH-4318 of 15 June 1994, available online at <http://cisgw3.law.pace.edu/cases/940615a4.html>].