** Associate Professor, University of Pittsburgh School of Law. A.B. 1973,
Harvard College; A.M. 1975, Harvard University; J.D. 1981, Harvard University
School of Law.
1. U.N. Conference on Contracts for the International Sale of
Goods, Final Act (April 10, 1980), U.N. DOC. A/CONF. 97/18 reprinted
in S.Treaty Doc. No. 98-9, 98th Cong., 1st Sess. and 17
INT'L LEGAL MAT. 668 (1980) [hereinafter "CISG" or
"Convention"].
2. See Journal of Law & Commerce CISG Contracting
States and Declarations Tables, 12 J.L. & Com. 283 (1993) for an updated
list of Contracting States to the Convention.
3. Article 1(1) of the Sales Convention provides that:
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 private international law lead to the application
of the law of a Contracting State.
U.S. ratification of the Convention was accompanied by a declaration that
the U.S. would not be bound by Article 1(1)(b).
4. CISG art. 7(1). Identical language was contained in Article 6 of the 1978
Draft of the Convention, to which the following commentary was appended:
5. For a discussion concluding that, in regard to CISG, "foreign decisions
on point must be accorded considerable weight in United States courts,"
see V. Susanne Cook, Note, National rules on the law of sales of goods are subject to sharp divergences
in approach and concept. Thus, it is especially important to avoid
differing constructions of the provisions of this Convention by national
courts, each dependent upon the concepts used in the legal system of the
country of the forum. To this end, Article 6 emphasizes the importance, in
the interpretation and application of the provisions of the Convention, of
having due regard for the international charachter of the Convention and for
the need to promote uniformity.
Commentary on they Draft Convention on Contracts for the International
Sale of Goods, Prepared by the Secretariat, art. 6 para. 1, U.N. Doc.
A/Conf.97/5 (1979), reprinted in JOHN HONNOLD, DOCUMENTARY HISTORY
OF THE UNIFORM LAW FOR INTERNATIONAL SALES 404, 407-08 (1989).
6. 789 F. Supp. 1229 (S.D.N.Y. 1992), appeal dismiss[e]d, 984 F.2d 58 (2d Cir. 1993).
7. Id.
8. 330 U.N.T.S. 38 (1959), No. 4739, 21 U.S.T. 2517, T.I.A.S. No. 6997, done at
New York June 10, 1958. The Convention was implemented in the United States
through Pub. L. 91-368, 84 Stat. 692, 9 U.S.C. § 201 (1970). The
text of the Convention appears in 9 U.S.C.A. (West 1970 & Supp. 1992)
immediately following § 201.
9. In the end, the court decided that the applicable federal law - CISG - was
part of every state’s law. 789 F. Supp. at 1237 n.5. It is thus unclear
whether the decision to apply a federal rather than state law of contract
formation had any effect on the outcome of the case or even whether this
discussion is properly considered part of the holding.
10.Id. at 1237. The UNIFORM COMMERCIAL CODE, U.C.C.
§ 1-101
11. For a critique of this aspect of the court's reasoning see
infra text accompanying note 39.
12. For a more extensive treatment of this subject see John E. Murray, Jr.,
An Essay on the Formation of Contracts and Related Matters Under the
United Nations Convention on Contracts for the International Sale of
Goods, 8 J.L. & Com. 11 (1988).
13. Perhaps the most infamous example of the mirror-image rule in perverse
action is Poel v. Brunswick-Balke-Collender Co., 110 N.E. 619 (N.Y. 1915)
(holding that a response to an offer which matched the offer precisely except
for a printed clause requiring the offeror to acknowledge that the response was
not an acceptance - no contract formed). Applying the mirror-image rule to
transactions in which the parties exchanged printed forms with differing
boilerplate clauses (clauses which invariably remain unread by the recipient)
yields results with no connection to the parties' expectations or to
commercial reality. See Murray,
supra note 12, at 38-39. Even under the
mirror-image rule, however, courts retained some flexibility. For instance, a
response which merely "suggested" a different or additional term, but
did not make it a condition to the creation of a contract, could operate as an
acceptance. E.g., Rucker v. Sanders, 109 S.E. 857
(N.C. 1921).
14. Such materially altering terms will become part of the contract, however,
if the original offeror specifically assents to them.
15. E.g., C. Itoh & Co. v. Jordan Int'l
Co., 552 F.2d 1228 (1977).
16. U.C.C. § 2-207(3).
17. Murray, supra note 12, at 40-44.
18. Contrast U.C.C. § 2-207, under which the existence of a material
variant term is a response to an offer does not by itself prevent contract
formation, although materiality will prevent an additional term from
automatically becoming part of a contract between merchants under subsection
(2)(b). But see Roto-Lith, Ltd. v. F.P. Bartlett
& Co., 297 F.2d 497 (1st Cir. 1962) (holding that a response which
contained material alterations to the offer was, for that reason, not an
acceptance but a counter-offer).
19. Under U.C.C. § 2-207, in contrast, an offeror's objection to
immaterial variances in the offeree's response will not prevent the
response from "operating as an acceptance" (i.e.,
forming a contract), although if both parties are merchants the
objection will prevent the offeree's term from automatically becoming part
of their contract under § 2-207(2)(c). The approach in CISG may
allow an offeror to escape or enforce a contract at its option, thus
facilitating speculation at the offeree's expense. Murray,
supra note 12, at 42-43.
20. See Allan Farnsworth, Formation of
Contract, in INTERNATIONAL SALES: THE UNITED NATIONS
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS § 3.04,
at 3-16 (Nina M. Galston & Hans Smit eds., 1984).
21.Filanto, 789 F.Supp. at 1238.
22.See, e.g., Marlene Indus. v. Carnac Textiles,
380 N.E.2d 239 (N.Y. 1978) (addition of an arbitration clause in response to an
offer was a material alteration). The result under the U.C.C. might change if
the seller's exclusion of arbitration were considered a "different
term" not subject to § 2-207(2). See JAMES J. WHITE &
ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE section 1-3 at 31-35 (3d ed.
1988). Contra JOHN E. MURRAY, JR., MURRAY ON
CONTRACTS § 50D (3d ed. 1990).
23. The court stated:
24. Although the buyer argued that this conduct "estops [the seller] from
denying its acceptance of the contract," the court noted that "this
contention is better viewed as an acceptance by conduct argument."
Id. at 1238.
25. Id. at 1238-39.
26. 388 U.S. 395 (1967).
27. 937 F.2d 469 (9th Cir. 1991), cert. denied, 112 S. Ct.
1294 (1992).
28. 892 F.2d 1404 (9th Cir. 1990).
31. The Filanto court itself noted this point:
"Although there is as yet virtually no U.S. case law interpreting the Sale
of Goods Convention, it may safely be predicted that this will change."
Id. (citation omitted).
32. See CISG arts. 1(1)(a) and 100. CISG went into force with respect to the
United States on January 1, 1988.
33. See Journal of Law and Commerce CISG
Contracting States and Declarations Table, 12 J.L. & Com. 283 (1993) for an
updated list of Contracting States to the Convention.
34. CISG Article 6 permits the parties "to exclude the application of this
Convention or, subject to Article 12, derogate from or vary the effect of any
of its provisions." Article 12 preserves the right of ratifying countries
to require written evidence of a contract.
36. See JOHN HONNOLD, UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980 UNITED
NATIONS CONVENTION § 309-13 (copyright reprint 1987).
37. See U.C.C. § 2-716(1)
(specific performance available only if "the goods are unique or in other
proper circumstances") and U.C.C. § 2-716(3)(replevin for goods
not yet shipped available only if they have been identified to the contract and
"after reasonable effort [the buyer] is unable to effect cover for such
goods or the circumstances reasonably indicate that such effort will be
unavailing").
38. HONNOLD, supra note 36, § 195. For a
more detailed comparison of the remedies under U.C.C. Article 2 and CISG see
Harry M. Flechtner, Remedies Under the New International Sales
Convention: The Perspective From Article 2 of the U.C.C., 8
J.L. & Com. 53 (1988).
39. Filanto, 789 F. Supp. at 1237.
40. Id. at 1238 n.7.
41. See Journal of Law & Commerce CISG
Contracting States and Declaration Tables, 12 J.L. & Com. 283 (1993) for an
updated list of Contracting States to the Convention.
42. CISG art. 12 (emphasis added).
43. HONNOLD, supra note 36, § 129.
44. Id. § 110
45. RESTATEMENT (SECOND) OF CONTRACTS § 214(c) & cmt. b (1981);
MURRAY, supra note 22, § 82A.
Seealso U.C.C.
§ 2-202(a) and cmt. 2 thereto (U.C.C. parole evidence rule allows in
evidence of course of dealing or usage of trade because, "[u]nless
carefully negated they have become an element of the meaning of the words
used").
46. MURRAY, supra note 22, § 82A, B.
47. From another perspective, the parol evidence rule seems primarily a rule of
procedure - i.e., it requires the judge rather than
the jury to make the factual determination whether the parties intended to
discharge prior or contemporaneous agreements that were not included in a
writing. See id. § 82B at 376-77.
Clearly nothing in Article 8(3) or the rest of the Convention overrules this
procedural aspect of the parole evidence rule.
49. Portions of this section are taken from Ronald A. Brand,
Nonconvention Issues in the Preparation of Transnational Sales
Contracts, 8 J.L. & Com. 145, 158-64 (1988).
50. Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974).
51. While the modern trend is to enforce choice of forum clauses generally,
"it appears that at least four states explicitly reject the modern trend
and hold all such clauses invalid per se, while the case law in several others
is unclear." Michael E. Solimine, Forum-Selection Clauses and the
Privatization of Procedure, 25 Cornell Int'l L.J. 51,
63 (1992).
52. Ch. 392, 61 Stat. (1947) (codified at 9 U.S.C. §§
1-14).
53. Scherk, 417 U.S. at 510-11,
quoting H.R. Rep. No.96, 68th Cong., 1st Sess., 1,2
(1924).
54. United States Arbitration Act, 9 U.S.C. § 2 (1947). The entire
section reads:
A written provision in any maritime transaction or a contract evidencing a
transaction involving commerce to settle by arbitration a controversy
thereafter arising out of such contract or transaction, or the refusal to
perform the whole or any part thereof, or an agreement in writing to submit
to arbitration an existing controversy arising out of such a contract,
transaction, or refusal, shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any
contract.
55. Id. §§ 3,4.
56. New York Convention, supra note 8.
57. New York Convention art. II(1) appears in 21
United States Treaties and Other International Agreements 2560 (1970). Article
II(2) defines the term "agreement to arbitrate" to include "an
arbitral clause in a contract or an arbitration agreement, signed by the
parties or contained in an exchange of letters or telegrams."
58. Id. Art. III.
59. See, e.g., Thomas E. Johnson,
International Antitrust Litigation and Arbitration Clauses,
3 J.L. & Com. 91 (1983); Francis J. Higgins et al.,
Pitfalls in International Commercial Arbitration,
35 Bus. Law 1035 (1980).
60. 473 U.S. 614 (1985).
61. Id. at 617.
62. Id. at 619.
63. Id. at 621 (quoting App. to Pet. for Cert. in
No. 83-1569, p. B9, which quoted Wilko v. Swan, 201 F. 439, 444 (2d Cir.
1953), rev'd, 346 U.S. 427 (1953)).
See American Safety Equipment Corp. v. J.P. Maguire
& Co., 392 F.2d 821 (2d Cir. 1968).
64. 473 U.S. at 629.
65. Id. at 631 (quoting Scherk v. Alberto-Culver,
417 U.S. 506, 516-17 (1974).
66. Prima Paint Corp. v. Flood & Conklin Mfg., 388 U.S. 395 (1967).
67. Id. at 404.
68. These questions were taken from a direct quote to Ledee v. Ceramiche Ragno,
684 F.2d 184, 186-187 (1st Cir. 1982), in Filanto,
789 F. Supp. at 1236.
69. Id.
70. 789 F. Supp. at 1237.
71. Id.
72. Id. at 1238-39.
73. Id. at 1239.
74. Id. (quoting Prima Paint, supra note 66, at 404, and Republic of Nicaragua v. Standard Fruit Co.,
937 F.2d 469, 476 n.9 (9th Cir. 1991), cert.
denied, 60 U.S.L.W. 3615 (1992)).
75. The choice of the term validity is perhaps unfortunate in light of the CISG
art. 4(a) rule that the Sales Convention "is not concerned with...the
validity of the contract or of any of its provisions...." The court was
appropriately dealing not with an issue of validity, but rather with the issue
of formation, which - as to the contract - is governed by Part II of the Sales
Convention.
76. 789 F. Supp. at 1239 (quoting Matterhorn v. NCR Corp., 763 F.2d 866, 871-73
(7th Cir. 1985) Posner, J.) (discussing cases), and Teledyne, Inc. v. Kone
Corp., 892 F.2d 1404, 1410 (9th Cir. 1990) (arbitration clause enforceable
despite later finding by arbitrator that contract itself was invalid)).
77. 789 F. Supp. at 1240. See supra notes 22-28 and
accompanying text.
78. Id.
79. Id.
80. Id. at 1241
81. Supra note 29 and accompanying text.
82. ICC Case No. 5713, reprinted in 15 Y.B. Comm.
Arb. 70 (1990).
83. Id. at 71.
84. Id. at 72.
85. Id.
86. See, e.g., ICC Case No. 6281,
reprinted in 15 Y.B. Comm. Arb. 96 (1990), in which
the tribunal, though basing its decision on other law, "remarked in
passing that the outcome would have been the same if [the relevant provisions
of] the Vienna Sales Convention had been considered." Id. at 100.[T]he Uniform Commercial Code . . . does not apply to this case, because the
State Department undertook to fix something that was not broken by helping
to creat the Sale of Goods Conventions which varies from the Uniform
Commercial Code in many significant ways. Instead, under this analysis,
Article 19(1) of the Sale of Goods Convention would apply. That section, as
the Commentary to the Sale of Goods Convention notes, reverses the rule of
Uniform Commercial Code § 2-207, and reverts to the common law rule. .
. . The August 7 letter, therefore, was a conteroffer. . . .
Filanto, 789 F. Supp. at 1238.