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Also available at Pace Review of the Convention on Contracts for the International Sale of Goods (CISG), Kluwer Law International (2000-2001) 9-57

Forecasting the Potential Impact of the Vienna Sales Convention
on International Sales Law in the United Kingdom

Alison E. Williams [1]

I. Introduction
II. Uniform Sales Law in the Twenty-First Century

A. The International Institute for the Unification of Private Law (UNIDROIT)
B. The Commission on European Contract Law ("Lando Commission")
C. The United Nations Commission on International Trade Law (UNCITRAL)
III. An Overview of the Development of the United Nations Convention
      on Contracts for the International Sale of Goods
A. Sources of Available Information About the CISG
B. The Style and Content of the CISG
C. The Development of the CISG in Individual Contracting States
      1. Germany
      2. Other European Countries
      3. North America
      4. The Far East
IV. The CISG and English Sales Law
A. The Sphere and Application of the CISG
      1. Geographical Sphere of Application
      2. Material Sphere of Application
             a. The definition of "goods" under the CISG
             b. The definition of a "sale" under the CISG
             c. Matters that are excluded from the application of the CISG
             d. Party Autonomy
B. Differences in Principle between the CISG and English Sales Law
      1. Drafting Techniques and Attitudes to Contract Law
      2. Documentary Sales
      3. Interpretation of the CISG
C. The Remedial Scheme under the CISG
      1. Article 25 CISG: The concept of Fundamental Breach
      2. The Primary Remedy - Specific Performance
      3. The Right to Cure
      4. Nachfrist
      5. Price Reduction
V. Other Issues
VI. Conclusion


The United Kingdom (hereinafter, UK) Government has finally signalled its commitment to ratify the United Nations 1980 Convention on Contracts for the International Sale of Goods (hereinafter "the CISG").[2] The CISG, which governs the formation of contract, and the rights and obligations of parties to an international sales contract, will be ratified in its entirety and brought into national law as soon as there is time available in the legislative programme.[3]

The time is, therefore, ripe for a fresh study of the CISG and its impact on the existing law concerning international sales. The legal community must also consider how to encourage the application of the CISG in this country and to maximize the advantages that can be gained from ratification, whilst ensuring a smooth merger of the CISG with existing sales law in the UK.

It is the author's view that adoption of this widely-accepted international convention can only improve the saleability of English law and the English Courts abroad. It is well known that the success of the Commercial Court is such that many foreign parties choose to have their disputes resolved by the Court although their case actually has no connection with the UK at all.[4] English commercial law has the reputation of being pragmatic, sensitive to the business concerns of the parties and efficient. Moreover, the expertise of the Judges in the Commercial Court and the way in which disputes are resolved is unparalleled. Adoption of the CISG will give the courts the opportunity to offer their clients an even wider range of services, and it can be expected that if the CISG is positively perceived amongst the English legal community, the English courts can go forward to make a significant contribution to interpretation of the CISG. Further, continued application of the CISG will foster understanding of its provisions and awareness of the ways in which it can reduce the problems caused by the conflict of national laws.

An extra effort is needed to emphasize these advantages to businesses and lawyers in the UK. First, as Lord Steyn noted in 1994, English lawyers, judges and politicians have a history of hostility towards multilateral Conventions which, in the last century, has already resulted in delayed ratification by the UK of a number of international treaties and Conventions which have subsequently proved to be extremely successful.[5] The CISG is no exception here: the UK will be one of the last major nations to ratify; and even now, much of our legal and business community remain skeptical. Second, the experience of lawyers in other countries shows a lack of understanding of the provisions of the CISG coupled with the attitude of "better the devil you know than the devil you don't."[6] This trend is more noticeable in some countries than others, but it seems that the CISG has made more of an impact on international sales law in Europe than in North America. Nevertheless, lawyers in the UK have a duty to be able to advise their clients on the suitability of the CISG for a particular transaction. This requires a knowledge of the substantive law contained in the CISG in addition to an understanding of how the CISG is viewed in the other countries involved in the transaction. Finally, businesses trading in goods overseas should be made aware of the ways in which their rights and obligations may change under the CISG.

This article aims to provide a concise up-to-date picture of the state of the CISG. Understanding how adoption of the CISG has progressed in other countries is crucial to the international approach that the CISG is meant to encourage. Academic commentators in the UK have, to some extent, already considered in what ways the provisions of the CISG differ from English law.[7] It is hoped that this study will stimulate further debate about the desirability of harmonised law in general and the role which the English legal system can and should play in the development of all areas of international trade law. The attitude that English lawyers and judges have towards international law is crucial to the way in which we are perceived abroad; and, in order to maintain our reputation in the field for the provision of legal services in the future, we need to encourage within our own legal community an understanding and appreciation of other legal cultures and laws. The overriding message is that the CISG does not solve all the possible problems that could arise. The ambiguity of some provisions in the CISG is such that further clarification in the contract is advisable. It is still important for parties to include choice of law and jurisdiction clauses, for example. The CISG can, however, enhance English contract law.

Section A of this article looks briefly at the background of the CISG and examines why there has been a continued effort in the last century to harmonise the law of international sales. Section B looks at the development of the CISG since it came into force. The aim is to provide a realistic up-to-date picture as to the extent to which the CISG has already influenced international sales law. This Section will also provide a guide to sources of information on the CISG including case law and academic comment. Section C introduces individual provisions of the CISG. The work in this section assumes on the part of the reader an understanding of English sales law; and for reasons of length, comment is restricted to those provisions of the CISG which differ significantly from UK law. Finally, Section D attempts an analysis of how adoption of the CISG will impact existing practice in the UK. The aim in this section is to confront some of the existing concerns raised about ratification and suggest positive steps forward for the future.

In writing this article, much reliance has been placed on commentaries on the CISG by American and German academics. The author has also read a considerable number of articles by practitioners on the impact of the CISG and has visited and spoken to a number of lawyers throughout the country who specialize in this area of the law. Where possible, case law on the CISG has been utilized to provide guidance as to interpretation, although it is often difficult to discern any uniform approaches to individual provisions. The style and content of the study should reflect the international approach that the author has tried to realize. The intention is to provide as detailed a picture as is possible when covering all aspects of the CISG in theory and in practice.


The last century has seen a huge change in the field of international trade. The development of the market economy, the growth of markets for manufactured goods and the opening up of new markets in raw products from developing countries has led to a boom in overseas trade. Newer and faster methods of communication have enabled traders to buy and sell goods at a distance more reliably, and modern technology has made it much easier to transport goods around the globe in shorter periods of time. It has become clear that in the modern world, it is no longer possible for a country to isolate itself from the international circulation of goods and persons. International trade also has important consequences for the international relations of a country, and a healthy trade balance is essential for every modern economy.[8]

As the needs of commerce have changed, so have the practices by which businessmen conduct their trade. Increased trade overseas has drawn attention to the problems that are caused by the different ways in which countries have chosen to regulate international sales. Businessmen have found that their contracts and dealings with foreign traders have been subject to different standards and usages.

This growth in international trade has led to the re-emergence of the need for the harmonization of the services that facilitate overseas trade: global monetary mechanisms, cross-border transport possibilities, and universal rules and standards which allow traders the world over to conduct business on the same terms. Businessmen themselves have sought to provide universal standards and practices in organisations such as the International Chamber of Commerce. In addition, the legal community has tried to facilitate overseas trade through efforts to harmonise national laws; thereby reducing the uncertainties and potential costs associated with transacting business under unfamiliar laws.[9]

Two major international organisations have also been established this century with the aim of breaking down legal barriers to international trade and responding to changes in trade practices -- the International Institute for the Unification of Private Law (UNIDROIT) and the United Nations Convention on International Trade Law (UNCITRAL). These organisations, established at different times, have worked towards the same goal, albeit through different techniques. The UK is a member of both organisations and has contributed significantly to their work. In addition to these two organisations, the Commission on European Contract Law is another body within Europe which has composed a text aimed at working towards the harmonization of contract law throughout the European Union.

A. The International Institute for the Unification of Private Law, (UNIDROIT)

UNIDROIT was set up in 1929 as an auxiliary organ of the League of Nations. Its primary task was to draft a uniform sales law which aimed to combat the problems of trading goods across different jurisdictions. The fruits of its efforts were the Hague Conventions of 1964.[10] These Conventions, since entering into force in 1972, have, however, failed to achieve widespread acceptance. Most notably, the US never ratified the Conventions, feeling that the Conventions failed to represent the views of many developing nations. The UK did ratify the Conventions; but only on the basis that they would apply if the parties expressly chose them as the law of the contract. Certainly it seems that these two Conventions have made no impact on international sales law in the UK. There have been no cases decided in the UK on the basis of the Conventions and there is no incentive for UK traders to alter their trading practices, as the Conventions have only been ratified by a small number of countries abroad.[11] Other works of UNIDROIT have met with greater success; most notably in the area of international trade are the Principles of International Commercial Contracts [12] published in 1994 (hereinafter "the UNIDROIT Principles"). These Principles are composed in a form similar to that of the American Restatements of Law. They do not take the form of a binding instrument and are intended to be used in a number of ways to facilitate cross-border trade. Although there have been only a handful of cases actually decided solely by reference to the UNIDROIT Principles, research has shown that the Principles are being referred to in a growing number of cases as representative of the general principles and established trade practices on which international trade is based.[13]

B. The Commission on European Contract Law (The "Lando Commission")

The Lando Commission (Commission) was founded in 1982 with funding from the European Community (EC). The work of the Commission was specifically endorsed by the European Parliament in a Resolution in 1994.[14] The founder of the Commission was Professor Ole Lando. Professor Lando serves as the present Chairman of the Commission. The ambit of the Commission was to draft a European Restatement of Contract law which was to serve as: a basis for the future codification of European contract law; a legal guide for the European Union (EU) Organs; a text to be used by member states in future codification or updates of their own law; and a text which parties could chose as the applicable law of their contracts.[15] The Principles (known as the "Lando-Principles" or the "Principles on European Contract Law") were finalized in 1998, and reflect aspects of contract law from many of the European Union's member states. They cover similar areas of law to the UNIDROIT Principles, but their scope is confined to the European Union. The material scope of the application of the Lando Principles is wider than that of the UNIDROIT Principles, as it is intended to apply to all contracts including domestic transactions and those involving consumers and merchants. Work is already underway to compile a third version of the Principles, and it is envisaged that the Principles will eventually form part of a future European Civil Code. At present, though, the principles are more of academic value as opposed to being applied in practice.[16]

C. The United Nations Commission on International Trade Law, (UNCITRAL)

UNCITRAL, unlike UNIDROIT, was specifically established to deal with problems concerning international trade law. The Preamble [17] to the resolution of the United Nations General Assembly setting up the Commission emphasized the importance of international trade as a way of promoting friendly relations between states. It was further recognized that the previous efforts to reduce the legal obstacles to the flow of international trade had been hampered by insufficient co-ordination and the limited membership of the organisations involved. It was concluded that a broader participation should be secured for further progress in this area.[18]

At its inception, UNCITRAL had to decide whether to promote adoption of the Hague Conventions or compose its own legal text. A survey conducted in all member states revealed that the Hague Conventions were unlikely to be widely accepted and, consequently, a working group was established to revise the Hague Conventions and produce a text based on world-wide sponsorship and participation. The result was the United Nations Convention on the International Sale of Goods which was signed in Vienna in 1980. This CISG has since been followed by other satellite Conventions dealing with other aspects of international trade such as the transport of goods,[19] international payments,[20] electronic commerce,[21] cross border insolvency [22] and dispute resolution mechanisms.[23]

To date, fifty-eight countries have adopted the CISG.[24] As far as the UK is concerned, nine out of ten of our most important trading partners have ratified the text. On the basis of a study of the top fifty export and import markets in 1998, approximately eighty percent of our contracts for the international sale of goods will, in the future, be subject to the CISG once the UK ratifies it, unless the CISG is excluded by the parties.[25]

Therefore, in terms of ratification, the CISG can be said to be a success. A full evaluation, however, requires one to look at the situation post-ratification. It is important to consider how well the CISG has been received by practitioners and businessmen in the existing contracting states, how often in practice the CISG is excluded, and potential weaknesses and strengths of the CISG that are already identifiable as a result of the developing case law. It is also important to place the CISG in the context of other sources of international trade law so that practitioners are able to assess the alternatives for their clients. The next section of this study, therefore, looks at the state of the CISG as the UK prepares to ratify. In order to provide a critical analysis of the CISG, it will be necessary to outline the structure of the CISG and identify its aims and content.


A. Sources of Information Available About the CISG

UNCITRAL has placed much importance on promoting the CISG and encouraging all contracting states to participate in its development. The CISG is available in six official languages,[26] and there is an extensive amount of information available over the Internet as well.[27] In fact, a number of member states have constructed their own Internet databases on the CISG. These databases enable lawyers and students to access legal writings and case law on the CISG in their own language. UNCITRAL also sponsors an annual mooting competition held in Vienna where students debate a fictitious dispute based on the provisions of the CISG. In the year 2000, 79 teams from 28 countries took part in the competition.[28] This competition helps to improve understanding of the CISG amongst those who may go on to work with the CISG in practice.

Although there is no official commentary to the text of the CISG, the Official Records of the Conference are very useful as a guide to the rationale behind many of the Articles.[29] In addition there are now a number of commentaries in existence. These commentaries are an invaluable aid to interpretation of the CISG because many of them have been written by legal scholars who were involved in the composition of the CISG. Moreover, the commentaries are demonstrative of the truly international approach that is taken in the CISG.[30]

Finally, case law on the CISG is widely available via the UNCITRAL Database,[31] and the International Institute for Commercial Law at Pace University School of Law in New York has compiled a Bibliography listing all articles and books on the CISG, which is extremely useful and user friendly.[32]

B. The Style and Content of the CISG

Ensuring a uniform interpretation of the text was one of the biggest concerns during the Diplomatic Conference in 1980. For this reason, there was a conscious desire to restrict the content of the CISG to those areas on which it was possible to agree. As a result, matters such as the validity of the contract and the passing of property were not included.[33] Consideration of each individual article proceeded on the basis of compromise. The aim was not to take the best from every jurisdiction, but to develop an empirical code which, where possible, used independent terms to convey its meaning. There was a deliberate attempt not to rely on existing legal definitions which could then be subject to contradicting interpretations in different member states. Furthermore, the authors of the CISG were anxious to make the CISG readable for the business community as well as lawyers from all jurisdictions including the developing nations. The style of the CISG thus follows the chronological pattern of a contract. Part I deals with the sphere of application of the CISG. Part II deals with the formation of the contract. Part III concerns the rights and remedies of the parties. Part IV contains the final public international law provisions. Article 92 permits a contracting state to implement the CISG without Part II or Part III, although only a handful of states have exercised this option.[34]

Nevertheless, critics have complained that the CISG is not well formulated. In particular, many norms remain ambiguous and, in some cases, a general rule is set down but then qualified by such consequential exceptions that the rule itself is robbed of its value.[35] Those criticizing the CISG claim that it is, despite its claims, far too theoretical [36] and the deliberate ambiguity in some norms which was necessary to ensure agreement from all sides has left the potential for broadly differing interpretations of individual Articles.

C. The Development of the CISG in Individual Contracting States

A study of the existing case law on the CISG was carried out in 1997.[37] It revealed that although there were a few reported cases where it could be argued that questionable judgements had been returned; on the whole, the case law on the CISG was steadily developing and the signs in the majority of cases were that national courts were prepared to interpret the CISG with regard to its aims and principles and not automatically look for solutions in domestic law.[38] Nevertheless, it is only recently in two reported cases that the courts made reference to decisions rendered in other contracting states, despite great attempts by UNCITRAL to ensure that decisions on the CISG are widely accessible on the Internet.[39] There are a few signs that this situation may be changing now. In an Italian case [40] this year (2000) the judge cites approximately 50 rulings from foreign jurisdictions. This is hopeful sign for the future.[41]

1. Germany

Germany has produced the most case law on the CISG in addition to a large amount of scholarly writing on uniform sales law.[42] In contrast to the Hague Conventions, which parties were often advised to exclude in their contracts, the CISG has been widely accepted amongst the business and the legal community there. It seems that many businesses now are not only aware of the CISG but have studied its provisions in order to decide what advantages it can offer.[43] Initially, the CISG was seen to benefit smaller traders who didn't have the bargaining power to demand the application of their own law. Schlechtriem suggests that, although some Trade Associations have proposed to exclude the CISG, such plans will not last long as the desire of the courts is for the CISG to be widely applicable. Therefore, attempts to exclude the CISG in favour of domestic law would have to be expressly stated.[44] In 1994, Karollus concluded that the German courts have had no particular problems applying the CISG, especially as they had significant experience interpreting the Hague Conventions.[45] He also added that the decisions rendered revealed that the application of the CISG enables results consistent with the needs of international trade. Nevertheless this conclusion is in part due to the fact that the German courts seem to be conscious of the need to distinguish the CISG from domestic law.[46]

In fact, instead of the courts trying to interpret the CISG in light of domestic principles, the reverse appears to be true. German plans to reform the Law of Obligations as stated in the Burgerliches Gesetzbuch (BGB) [47] would bring existing law deliberately closer to the provisions of the CISG.[48] In a paper [49] presented in 1995 to the Scottish Law Commission on breach of contract and the proposed German reforms, Lorenz argued that it is not desirable to have two separate systems of sales law in a country so heavily engaged in international commerce. Furthermore, he identified a number of areas where he believed that the solutions offered by the CISG are superior to those offered by existing German law.[50]

2. Other European Countries

The Scandinavian states have all enacted new Sale of Goods Acts which are heavily based on the provisions of the CISG. In fact, Scandinavian proposals in the 1960's to reform sales law were deliberately postponed until the CISG had been adopted because the objective was to enact statutes that conformed as closely as possible.[51] In Holland, the new Dutch Burgerlik Wetboek was also influenced by the CISG. The CISG has begun to become, in the words of Honnold, a type of "lingua franca" among lawyers with different training and traditions.[52]

3. North America

The CISG has had less success in North America. As Bonell noted in 1997,[53] case law on the CISG in the United States (US) is rather limited. Bonell suggests that one of the reasons for this apparent lack of interest is the fact that in some trade sectors there is a clear desire to exclude its application altogether. This is true. The majority of the large oil and grain traders have already taken action to exclude the application of the CISG to their contracts.[54] It is, however, arguable that the CISG is not intended to apply to those type of contracts anyway. Hellner comments that the CISG is more tailored to the sale of manufactured goods,[55] and it is expected that the commodity trades will continue the application of detailed standard form contracts.

Yet leaving the commodity traders aside, why has the CISG failed so far to achieve widespread recognition in the American courts? There are a number of possible reasons. First, the CISG may not seem such a favourable alternative in light of the Uniform Commercial Code (UCC), which is itself a modern and very successful statute. Second, in many cases, the bargaining power of the US trader will be such that he can insist on the application of the UCC.[56] Third, on reading a wide range of American literature on the CISG and speaking to lawyers at a Canadian law firm, the firm view seems to be that adopting the CISG involves taking unnecessary risks. One can never be sure of how the CISG will be interpreted in court. There are no precedents to guide one, and it is difficult to advise clients of their rights and obligations under the CISG. This attitude is hard to dispel, regardless of the fact that it is in many cases based on false premises. Nor does the US have to worry to the same extent as other countries about being the odd man out -- a major consideration for many UK companies in their decision to approve adoption of the CISG.

Yet the call from academics in the US is that expertise concerning the CISG cannot now be confined to a small group of scholars and international law specialists. First, a growing body of commentary has suggested that arbitrators hearing transnational commercial disputes frequently refer to a lex mercatoria or rules of a new law merchant.[57] If this is to be relied upon, the CISG would be an obvious source of principles and practices; and therefore, even if the final decision when concluding individual contracts is that the CISG should be excluded, the attorney involved should be aware of the principles contained in the CISG in case such principles may be taken into account in any potential dispute.[58] Second, as one commentator noted "in this age of global commerce seemingly routine transactions are subject to the CISG. The general practitioner must be aware of the CISG and the significant changes it brings to sales law."[59] For example, in a 1995 dispute between a Canadian Seller and a US Buyer, the Seller came very close to losing the suit because it delayed in raising the argument that the CISG governed its transactions with the Buyer.[60] This is evidence of a lack of understanding by all parties concerned as to when the CISG applies and how it changes significant areas of sales law. Third, as mentioned above, many of the fears of US lawyers about the CISG are exaggerated.[61]

Therefore, the idea that application of the CISG leads to uncertainty does not mean that it would not, nevertheless, be the preferable choice where the trader would otherwise be faced with the application of a foreign law. Moreover, the lack of settled interpretations is not always a good reason to opt out of the CISG, where the CISG fundamentally offers the client the most favourable substantive law. For example, viewing the CISG through the eyes of a French Avocat, French sales law is particularly unfavourable to the Seller and French Sellers would therefore be well advised to opt for the CISG over their own law.[62]

4. The Far East

Based on statistics for 1998,[63] 10% of the UK's total imports came from countries in the Far East and 5% of goods exported went to countries in this region. Japan is one of the UK's top ten trading partners, and has now signalled its intention to ratify the CISG in due course.[64] Singapore is also a contracting state, as is China and the belief is that more of the Association of South East Asian Nations (ASEAN) members will soon follow suit.[65] Adoption of the CISG by countries in this trading sector is viewed as a valuable opportunity to harmonise trade law in the region, and it is hoped that the CISG will facilitate moves for trade expansion overseas. It is hoped then, that as more countries in this region conform to the CISG, the potential for British companies to build on existing markets will increase.

To conclude, it would seem that in terms of ratification, the CISG seems to enjoy widespread acceptance. Moreover, it appeals to both industrial as well as developing nations, whereas the Hague Conventions were only favourably viewed in a small handful of western economies. The success of the CISG is in part due to interest created in it by the academic community and the fact that the CISG was drawn up under the auspices of the United Nations. Nevertheless, the true measure of success is determined by looking at the extent of acceptance and use of the CISG by the commercial community. Yet, it is impossible to know how many extra transactions, if any, have been concluded on the basis that there is now a uniform law which can be applied. It is also impossible to know how many disputes have been avoided as a result of the clear provisions laid down in the CISG. Even in cases where disputes do arise, if the parties decide to go before an arbitral tribunal, then, in many cases, the results of that tribunal will remain private. This is an impediment to securing a uniform interpretation of the CISG's provisions.[66] Bearing in mind then, that studying the available case law does not enable a full analysis of the CISG's success, it does at least show how trends in application are developing. The CISG has been applied in many more cases in Europe than the US. Furthermore, most of the decisions rendered in Europe are between European states which suggests that the nations of Europe have in some ways encouraged each other to apply the CISG. This is not surprising given that great efforts have been undertaken in the European Union to increase trade amongst member states.

As far as the UK is concerned, it is the author's view that we will probably initially suffer the same problems as the Americans in implementing the CISG. English lawyers have the same belief in the superiority of their own law and in London as a centre for dispute resolution as lawyers in the US have for the UCC. Furthermore, English lawyers and businesses know that English law is highly regarded overseas. Nevertheless, the majority of our trade is with other European Union states, and we risk being isolated in Europe yet again unless we take the CISG seriously and become familiar with its application. For this reason, Section C of this study will look at the provisions of the CISG with reference to case law from other jurisdictions and significant areas of difference from English law.


A. The Sphere and Application of the CISG

1. Geographical Sphere of Application

The CISG applies to an international sale which is defined as a contract for the sale of goods "between parties whose places of business are in different states: when the states are contracting states."[67] The nationality of the parties is irrelevant; and, if one of the parties has a place of business both abroad and in the same country as the other party, the place of business for the purpose of the contract is that with the closest relation to the contract and its performance.[68] Article 1(1)(b) extends the application of the CISG further to contracts involving parties from non-contracting states when the rules of private international law lead to the application of the law of a contracting state.

Article 95, however, permits a state to ratify the CISG on the grounds that it will not be bound by Article 1(1)(b).[69] The US has made such a declaration on the grounds that the application of Article 1(1)(b) would lead to their own law being displaced more often than that of the non-contracting state.[70] The UK has, in the author's view, rightly decided not to follow this example.[71]

2. Material Sphere of Application

a. The definition of "Goods" under the CISG

Not all sales of goods are covered by the CISG. Article 2 contains six exceptions, including sales of goods bought for personal, family, or household use (i.e. consumer sales). The CISG will, however, apply to a consumer transaction if it was not discernible to the Seller, or there was no reason why it ought to have been discernible to him that the goods were intended for personal use.[72]

b. The Definition of a "sale" under the CISG [73]

The classification of a contract as a sale is similar to the substance of the contract test [74] in English law, but Nicholas argues that the CISG test leaves a lot to be settled by interpretation.[75] Therefore, to avoid uncertainty, the best move is for the parties in this situation to foresee the applicability or non-applicability of the CISG. Such would be the case for British Telecom who, in their response to the Department of Trade and Industry (DTI) Consultation Paper in 1997, noted that many of their contracts were for the supply of services and not just goods, thus making it unclear whether the CISG would apply or not.[76]

c. Matters that are excluded from the scope of application

Article 4 explains that the CISG governs only the formation of the contract of sale and the rights and obligations of the Seller and the Buyer arising from it.[77] It is expressly stated that the CISG is not concerned with the validity of the contract, or with any of the contract's provisions, or the effect which the contract may have on the passing of property, except as otherwise expressly provided for by the Convention.[78] Such matters are to be dealt with according to the applicable domestic law which is determined according to the rules of private international law. Consequently, in a case involving a retention of title clause, it was held that the CISG was applicable to determine whether the clause had actually been agreed upon by the parties, but the effect of the clause on the property was to be determined according to the law applicable by virtue of the rules of private international law.[79] Issues of validity are not, however, clear cut because there is no uniform definition as to what will be classified as an issue of validity. As Nicholas noted, what may be regarded as an issue involving the Seller's liability for defects under English law, may be seen as raising an issue of either fraud or mistake under French law.[80]

Article 5 states that the CISG does not apply to the liability of the Seller for death or personal injury to any person caused by the goods. This fails to provide a uniform solution to the problem of product liability because it is widely accepted that the CISG does, nevertheless, govern liability for consequential property damage caused by defective goods. The result is that where both damage to property and injury to persons have been caused by a defective product, the CISG may govern the damages for the first claim, but the amount of damages available as a result of personal injury will depend on the applicable domestic law.[81]

Articles 4 and 5 do not provide an exhaustive list of matters excluded from the scope of the CISG. In fact, it would be very difficult to draw up a list of such matters because in addition to matters which are expressly excluded from the ambit of the CISG, there are other matters which implicitly come within the scope of the general principles on which the CISG is based and should therefore, according to Article 7(2), be settled in accordance with the CISG without referring to domestic law. A list of such principles will only develop as the case law considers these questions. Schlechtriem has, however, already warned that the problem of deciding whether an issue comes within the general principles of the CISG or not may be a serious impediment to the development of a uniform interpretation of the provisions of the CISG.[82]

d. Party Autonomy

The parties have the general right to derogate from or modify any of the provisions in the CISG (subject to Article 12) and they may even make the decision to exclude the CISG in its entirety.[83] This need not be done explicitly.[84] One example of implicit exclusion of the CISG is the choice of the law of a non-contracting state.[85] The crucial factor is to be able to determine the will of the parties and in determining this will, Article 8 is applicable.

B. Differences in Principle Between the CISG and English Sales Law

The underlying principles of the CISG provide the most interesting area of comparison with English law. Two central themes run through the CISG and are reinforced at every level. First, the CISG aims to preserve the original agreement and intentions of the parties, even in the case of a breach, if possible (pacta sunt servanda). Second, the CISG aims to facilitate commerce by serving a gap-filling function.[86] Both of these principles should be kept in mind when reading the following subsections.

1. Drafting Techniques and Attitudes to Contract Law

One of the criticisms levelled against the CISG in the UK is that it does not match up to English standards of precision and drafting. It is a well-known characteristic of the common law that it favours concrete legal solutions to specific problems as opposed to general broad principles.[87] In contrast, the drafting style of the CISG is often open for two reasons. First, it encourages the development and application of general principles. Second, in some cases, a more concrete solution could not be agreed upon at the Diplomatic Conference. The extensive use of indefinite legal concepts and the abstract nature of many norms in the CISG does not however lie well with the expectations of the English legal community, who argue that ambiguity in legislation leads to uncertainty in the law, which is especially undesirable in the tradition of commercial law.

The drafting style of the CISG also belies a more fundamental difference with English law. The emphasis on general principles allows for a more subjective approach to the interpretation of the contract, in contrast to the objectivity of the English courts when interpreting a contract. The emphasis is on finding justice in the individual case as opposed to certainty in contracts. This is similar to the approach taken in civil law countries, where a contract is enforceable if the court can find a subjective agreement between the parties (consensus ad idem -- meeting of the minds). In order to find this subjective agreement, Article 8(3) of the CISG provides that "in determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves and any subsequent conduct of the parties."[88] This provision applies to all the actions of the parties, including subsequent conduct and their behaviour during pre-contractual negotiations.

Nevertheless English lawyers should not be too alarmed. Article 8(3) does not go so far as to create a duty of pre-contractual liability (culpa in contrahendo). Article 8(3) will only be applicable if the application of 8(1) fails to give rise to an answer.[89] Lawyers in this country therefore, should not be concerned at the idea that evidence other than that contained in the contract may be taken into account in assessing the intentions of contracting parties. It will still be the case that the written agreement will carry the most weight.

2. Documentary Sales

Article 9 deals with three situations:

Special attention must be given to this issue, as the CISG provisions which relate to documentary sales and standard form contracts in general have provided critics of the CISG with their main source of ammunition. The CISG is, in the words of one commentator, "ill-designed" for documentary sales.[91] It makes little reference to them,[92] and fails to attach the same importance to the problem of non-conforming documents as the common law.

In addition to this criticism, it is argued that the CISG does not afford adequate protection for standard forms of documentary sales and that Article 9 fails to expressly protect commonly-used standard business terms such as c.i.f. and f.o.b. terms.[93] Such terms would not qualify as international usages which are automatically applicable and, if the parties do not have an established trading relationship based on these terms, the result feared is that, unless reference is made to the INCOTERMS (which have been recognized as a trade usage in the case law,[94]) the use of such formulae in a contract may result in the CISG being applied instead of the common law (with its special recognition of the instances of c.i.f. and f.o.b. contracts).

In the author's view, however, such fears are unsubstantiated. Documentary sales are not uniquely English institutions; they are accommodated in legal systems world-wide, and Article 9(1) refers to any usage to which the parties have agreed.[95] Moreover, it is simply not logical to argue that a court would override a contract provision which differs from a provision of the CISG if there is clear evidence to show that the parties intended to derogate from the CISG. Such a derogation would surely include the use of a term such as c.i.f. or f.o.b. Finally, a number of commentators have raised the issue of unsuitability of the CISG generally to standard-form contracts such as those involving documentary sales.[96] All concede, however, that the CISG was never meant to provide for all types of contracts for every class of goods. Therefore, it is in some respects unfair to criticize the CISG. Instead, reliance should be placed on the ability of the CISG to search for the true agreement between the parties, fairly identifiable by the parties' inclusion of c.i.f. and f.o.b. terms.

3. Interpretation of the CISG

According to Article 7(1), regard is to be had to the international character of the CISG and the need to promote uniformity in its application. The CISG also promotes the concept of good faith. Strictly according to the words of the text, the principle of good faith is limited to use as a guide to interpretation of the norms of the CISG and does not seem to extend to the performance of the contract. A number of cases have, however, gone on to apply this principle to the performance of the contract.[97] Nevertheless, in the author's view, such a development is only in line with the direction in which the law in this area is developing. As Lord Steyn has recognized: "there are winds of change which may produce a climate more receptive to notions of good faith and fair dealing in England."[98]

Where issues arise concerning matters governed by the CISG which are not expressly settled in it, Article 7(2) says that such matters are "to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."[99] This may involve applying the provisions of the CISG by analogy.[100] If this fails to provide a solution, the next step according to Article 7(2) is to make reference to relevant general principles of international trade law on which the CISG is based. Finally, Article 7(2) explains that, in the absence of such general principles, the court may refer to conflict of law provisions to determine the applicable domestic law.[101]

Therefore, Article 7(2) suggests that English courts will be required, in some cases, not only to determine the spirit of the CISG by studying its provisions, but also to refer to other evidence of general principles of international trade. The UNIDROIT Principles and the European Principles of Contract law [102] have proved useful in this context on a number of occasions in other jurisdictions.[103] In addition to studying these texts, lawyers are encouraged to refer to the judgements handed down by courts in other countries.[104] It is to be hoped that English courts will be able to take a mature approach to the need to be aware of the decisions rendered in foreign courts. Mutual recognition of each others' conclusions will further mutual respect and co-operation between contracting states.[105] In fact, there is no reason to suspect that the English courts will not be able to adjust. In Fothergill v. Monarch Airlines Ltd., [106] the House of Lords concluded that in the context of an international convention, the traditional "plain meaning" approach adopted in interpretation must yield to the more flexible approach adopted by other countries which were parties to the Convention.[107]

C. The Remedial Scheme Under the CISG

Part II of the CISG contains provisions dealing with the formation of a contract. However, for reasons of length, it is only possible to examine the remedial scheme under the CISG contained in Part III. It shall suffice to say that Part II of the CISG represents a mixture of common and civil law traditions which in some cases differ from English law but often have the same outcome.

Part III has a decidedly different approach to that of English sales law. The duties of the contracting parties remain broadly similar to English law. In relation to conformity of the goods, the Seller's obligations under the CISG are remarkably similar to those under the Sale of Goods Act 1979 (hereafter "SoGA 1979").[108] However, a number of central English concepts have been abandoned, including the distinction between conditions and warranties, and the traditional reliance on damages as the primary remedy.

These differences are due to two main factors. First, the influence of the civil law has led to the incorporation of some new remedies. Second, the CISG has been specially designed for international sales. Thus, the provisions of the CISG have taken into account the fact that in many international sales, goods may well have been transported over thousands of miles, and it would be problematic if they were then rejected. Therefore, a wide range of remedies have been employed to discourage unnecessary termination of the contract. The limited recourse to "avoidance", as it is termed in the CISG for instances of a fundamental breach, is evidence of the central theme of the CISG to uphold the contract. In cases where the breach is, at least initially, not fundamental, the parties are offered the possibility of claiming damages, reducing the price for the goods, requiring repair, setting an extra time for performance or curing any defects.[109] The preference is clearly to adjust the contract to take account of new circumstances rather than encourage unnecessary avoidance. There is, however, one situation where a non-fundamental breach can nevertheless lead to avoidance of the contract.[110]

The analysis of the remedial scheme in Part III will begin with an explanation of Article 25 which defines a fundamental breach. This definition is central to the range of remedies where either party has failed to perform. Second, the remedy of Specific Performance in the CISG will be introduced. This remedy is especially important for a number of reasons. First, it is the primary contractual remedy available under the CISG. Second, application of the remedy will depend upon what state the case is being heard in. Following the introduction of these central concepts, the other remedies available under the CISG will be outlined.

Damages will not be discussed as a separate issue because the principles applicable to damages under the CISG are broadly similar to those of English law. The major difference deals with the specific situation where the contract has been avoided and the innocent Seller has resold the goods or, conversely, the innocent Buyer has made a substitute purchase. In contrast to the abstract method of the SoGA 1979, the CISG adopts a concrete approach in Article 75, the innocent Seller being entitled to recover the difference between the contract price and the price at which he actually resold. Where there is no substitute contract the innocent party is entitled to damages based on the market price although the time for assessment of that value may be different under the two regimes.

1. Article 25 CISG: The Concept of Fundamental Breach

A breach is defined in Article 25 as being fundamental if it "….results in such detriment to the other party so as substantially to deprive him of what he is entitled to expect under the contract ….".[111] Only for a breach of this serious nature does the right to avoid the contract [112] or the right to demand substitute goods in respect of the non-conformity of the goods arise,[113] unless article 49(1)(b) applies.[114] Therefore, under the CISG, every term becomes an innominate term under which breach of an obligation may only result in the right to avoid the contract if the breach is fundamental.

At this point one may be reminded of Lord Lowry's words in Bunge Corporation v. Tradax SA. [115] In assessing the need for certainty as an essential characteristic of commercial contracts, he said "…decisions would be too difficult if the term were innominate, litigation would be rife and years might elapse before the results were known."[116] Such words do not bode well for the approach taken by the CISG. The definition of a fundamental breach in Article 25 is, however, not final. The parties themselves may in any part of their contract derogate from the requirements of Article 25 in line with Article 6, and thereby set their own standards as to what will be regarded as a fundamental breach under the contract. In this respect, the parties can still define certain terms of the contract as 'conditions,' if they so require, by clearly classifying what will be regarded as a fundamental breach. The significant difference is that where the parties fail to define their terms in this fashion, then in the case of a minor breach, Article 25 will prevent avoidance.

A breach is not to be regarded as fundamental, even if it substantially deprives a party of what he is entitled to expect under the contract, if the party in breach did not foresee the breach, and a reasonable person in the same circumstances would not have foreseen such a result.[117] Schlechtriem has suggested that the time at which foreseeability is measured is at the conclusion of the contract although subsequent information may, by way of Article 8(3), be relevant.[118]

If the right to avoid the contract does arise as the result of a fundamental breach, the innocent party is under an obligation to notify the party in breach as to his decision to avoid.[119] The requirements for notice are construed strictly, and it is not clear whether an implied act of avoidance will be effective.[120] The rule here is similar to that in Lee v. York Coach and Marine.[121] Once the right has been exercised, the effect is that both parties are released from their obligations under the contract subject to any damages that may be due.[122]

2. The Primary Remedy - Specific Performance

In the words of Article 46(1), "the buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement."[123] The CISG upholds the civil law doctrine whereby the primary remedy for breach of contract is an order for specific performance. On the other hand, the position adopted in common law countries is preserved in Article 28.[124]

Therefore, it is unlikely that an English court would be compelled under the CISG to grant an order for specific performance. Nevertheless, if the case comes before a civil law court, an order for specific performance will not be excluded simply because the aggrieved party could have reasonably been expected to make a substitute contract, since this would encourage the Seller to take his contractual obligations too lightly.[125]

The wording in Article 28 is slightly ambiguous. It appears to limit its application to courts. This could have the effect that Article 28 is not applicable to international arbitral tribunals. No case has as yet considered this point, but there are arguments both for and against the application of this provision to international arbitral tribunals.[126]

3. The Right to Cure

Where a breach has occurred, the CISG encourages the Seller to keep his contractual promises by offering him the express right to cure his own mistakes.[127] In contrast to English law, this right may even be exercised after the time for performance has expired, as long as this would not cause the Buyer unreasonable inconvenience or uncertainty of reimbursement by the Seller of expenses advanced by the Buyer.[128] If the Seller wishes to exercise this right, he must request the Buyer to make known whether he will accept performance within a time specified by the Buyer. If the Buyer does not answer within a reasonable time, the Seller has the right to perform and the Buyer has an obligation to accept performance within the time indicated in the Seller's request. Nevertheless, the exercise of this right to cure is subject to the Buyer's right to avoid the contract for fundamental breach.[129] The existence of these two rights can cause friction. On the one hand, the Buyer should not lose his right to avoid the contract if a fundamental breach has occurred and this remedy will always take priority over the Seller's right to cure. In some cases, however, the fundamental nature of the breach may depend on whether the Seller could cure the breach or not, without causing the Buyer unreasonable inconvenience.[130] At the Diplomatic Conference, the example was given of a defective machine which could be repaired. The majority concluded that in this case the breach was not initially fundamental, although the right to avoid may still arise immediately if the Seller was unwilling or unable to repair.[131] Therefore, the present view is that the fundamental nature of a breach must be decided by looking, not only at the consequences of the breach for the Buyer, but also at the conduct of the Seller and his willingness and capacity to remedy the breach. However, this is not the same as saying that the Seller's right to cure will still exist where there has been a fundamental breach of contract.[132]

Finally, the right to cure also exists regarding of defective documents.[133] This is especially controversial, since Honnold argues that the language of Article 48 means that the Seller may have the right to cure defective documents even after the time for delivery.[134] As suggested above, however, there is no real fear that established trade practices such as those developed by documentary sales will not be upheld in a contract that is otherwise governed by the CISG. Moreover, this is a matter which has not yet been settled under domestic law and, on the authority of Borrowman Phillips & Co v. Free & Hollis, [135] it is arguable that the right to re-tender defective documents also exists in English law, at least up until the time for delivery has expired.

4. Nachfrist

In the situation, where the Buyer is not sure whether a breach committed by the Seller is to be classified as 'fundamental', he has the option of serving a notice on the Seller which sets an extra time for the performance of his obligations.[136] This concept is commonly known as a Nachfrist [137] because of its similarity to the German remedy of the same name. The concept has advantages for both the Buyer and the Seller in this situation. The Buyer gains the right to declare the contract avoided if the Seller has still failed to perform on the expiration of the nachfrist. It becomes irrelevant whether the breach is fundamental or not. It is important to note, however, that only in the context of non-delivery does the expiration of a nachfrist give rise to a right to avoid the contract. In any other situation, the setting of a nachfrist does not provide a basis for avoidance. For example, in the case of defective goods, if the contract is breached, the Buyer may compel performance and set an additional time for performance. In that time, the Buyer may resort to no other remedy for breach of contract. On the expiration of that period, the Buyer must again decide whether to avoid the contract or not, and this decision will still depend on whether the breach is fundamental. The only change in the situation is that the Buyer once again has the possibility of giving a notice of avoidance within a "reasonable time" to the Seller. The advantage for the Seller in this situation, apart from the fact that he now has more time to perform (although he may still be subject to a claim for damages in respect of any delay), is that he can rely on the fact that the Buyer is bound by that period.

The doctrine resembles the doctrines of waiver and estoppel in English law. The fact that the Buyer may not resort to any other remedy during the period of the nachfrist is equivalent to the Buyer being estopped from relying on his strict contractual rights as the result of a representation made to the Seller. In addition, both the remedy of nachfrist and the doctrine of promissory estoppel have the effect of suspending performance as opposed to extinguishing contractual rights. However, there are differences as well. Under the rule in Coombe v. Coombe,[138] promissory estoppel may be "a part of a cause of an action, but not a cause of action in itself."[139] Estoppel can only be relied upon defensively "as a shield and not as a sword." In contrast, in the case of non-delivery on the expiration of the nachfrist, if the Seller has still failed to perform, the right of the Buyer to avoid the contract will arise whether the breach is fundamental or not. The breach is "upgraded" by the expiration of the nachfrist.

5. Price Reduction

Another remedy available to the Buyer is price reduction.[140] The Buyer is entitled to reduce the price payable to the Seller. If it has already been paid, he may claim repayment on the basis of Article 50 and may also be entitled to interest on this sum under Article 78. This remedy is not available in English law although it is available in a number of European countries.[141] Price reduction is said to be advantageous because it is a self help remedy. This supposed advantage is, however, unlikely to be of much use in the majority of international sales since, in most cases, the price will have already been paid. Thus, the Buyer would have to go to court to reclaim part of the price.

The amount by which the Buyer may reduce the price is the same proportion as the value that the goods actually delivered had at the time of the delivery, in relation to the value that conforming goods would have had at that time. The time at which these values are determined is the time of delivery which will be established on the basis of the contract and Article 31. Nevertheless, as Nicholas has recognized, in the majority of situations it will still be more beneficial to rely on a claim for damages.[142]

The main situation where price reduction remains a suitable alternative is in the situation where the Seller can claim exemption from liability under Article 79. In this situation, the Buyer no longer has the right to claim damages, although Article 79(5) does not restrict the Buyer's right to exercise any other remedy. The second situation where price reduction may benefit the Buyer is where the price of the goods has fallen between the conclusion of the contract and delivery. In this case, the sum calculated under Article 50 will be higher than the difference in value between the defective and non-defective goods at the time of delivery. Finally, where the Buyer could have difficulty in calculating his damages, he may find price reduction a more practical and speedy option.[143]

When commenting on this provision, Honnold says that at the diplomatic conference, common law lawyers saw little reason to obtain this "venerable legal tool", because in the rare case where force majure excuses the Seller from performance, the question of how much the Buyer should pay could be remedied by reference to domestic rules for restitution to avoid unjust enrichment. On the other hand, in the case of an international convention, it is perhaps more suitable to provide a rule which would avoid unnecessary recourse to the disunity of domestic laws.[144]


Seeing this great cloud of witnesses, I would ask: is there not here sufficient evidence to show that the rule of international law has changed? What more is needed? Are we to wait until every other country save England recognizes the change? Ought we not to act now? Whenever a change is made, someone some time has to make the first move. One country alone may start the process. Others may follow. At first a trickle, then a stream, last a flood. England should not be left behind on the bank.[145]

This study began, not by studying the legal provisions of the CISG, but with an overview of its development in other countries. It is noticeable that this aspect of the CISG is absent from the legal writings of those who were against ratification.[146] Instead, those who prefer to rely on the superiority of English law have tried to fudge the issues involved by focusing their arguments on matters of principle as opposed to looking at the reality of the situation. In 1990, Hobhouse [147] (now Lord Hobhouse) considered the desirability of international conventions as a method to achieve harmonization.[148] He argued that the sole aim of such efforts was to produce a "stark uniformity" which was unachievable because of the prevailing differences in approach among different countries.[149] What Lord Hobhouse failed to recognize, however, was that uniformity is only an aspiration towards which the decision makers are working. Even the most fervent supporters of the CISG, such as Professor Schmitthoff, do not see the Convention as the sole tool by which uniformity is to be achieved.[150] Instead, the CISG is merely part of a process which is ultimately aimed at providing universally-recognized rules for international trade.[151] And the reality of the situation which Lord Hobhouse is trying to avoid, is that this process undoubtedly has a role to play in the global marketplace. Lord Steyn said in the House of Lords in 1994:

The international marketplace for the sale of goods has changed. For every transaction in respect of which an English trader is able to insist on English law as the applicable law, there will be one or more where the English trader has to concede the applicability of a foreign legal system. That is particularly the case with the great many foreign state trading corporations.[152]

Even in 1995, UNCITRAL suggested that over half of world trade is conducted on CISG terms.[153] Since then, the number of ratifying states has further increased;[154] and, with the ratification by Japan, the CISG will have been recognized by states in all of the world's largest trading blocs. These facts surely represent a more powerful incentive to join than to stay outside on the grounds of principle. Yet, although the UK Government has now made public the decision to ratify, until time is found in the legislative program to enact such ratification, hesitation can only be seen as yet another example of the UK adopting an isolationist attitude in defiance of what the majority of the rest of the world view as a positive development.[155] This is not only an arrogant approach to adoption, it is also dangerous in view of the influence that international trade has on the political relationship between states and the increasing interdependence of the world's major markets. This is a point that was briefly touched upon in Section A, but it must not be forgotten. Our introspection will increasingly come to damage our prospects abroad, and we risk being left out in the cold.

Nevertheless, fear of being left out was only one of the reasons in favour of ratification. There are many other advantages to be gained from our future participation. Unfortunately, there is only room in this study to consider the main advantages, and the author has chosen to raise the most contentious issues in an attempt to confront the main apprehensions about ratification of the CISG head on.

First, in contrast to the view that ratification of the CISG will affect the choice of London as a centre for dispute resolution,[156] it is submitted that acceptance of the CISG may lead to a growth in the number of parties that choose to have their dispute resolved here. This point has already been raised in the introduction, and I shall only add here that the increase in competition for work in the area of arbitration makes it all the more essential that we ensure that London can offer its clients the full range of services that they can get elsewhere; in addition to the immense and unique benefits of our law and the excellence of our judges and arbitrators that they can get nowhere else!

Second, although there was only space in Section C to highlight some of the main differences and new approaches to international trade that have been employed in the CISG, the point should also be made that there are a significant number of similarities between existing English Sales law and the CISG. The differences raised in Section C need not prove difficult. The suggested way forward for traders is adoption of the CISG in conjunction with a choice of English law and the English courts as the forum for the resolution of any disputes. The high regard in which English courts are held abroad should make this relatively easy to agree upon in most cases (as long as the cost of resolving potential disputes in London is not too high.[157]) The foreign party will have the confidence of being able to rely on a neutral law; the English party will have the benefit of being able to litigate on home territory; and London gets the business.

Third, if English law is chosen to govern those areas of the contract which are excluded from the CISG and the English courts are chosen as the forum for any disputes, the English courts will likely continue to uphold the underlying principle of certainty. And, regarding documentary sales, the judges of the commercial court will have a strong incentive to recognize trade terms such as f.o.b. and c.i.f. as overriding conflicting provisions of the CISG. This will allay yet another fear of those who have remained skeptical.

Fourth, an argument raised by those favouring the CISG is that once ratification has been finalized, the English courts will be able to contribute to the jurisprudence of the CISG and provide valuable case precedents to which courts in other countries may have regard.

Finally, mention should be given to the benefits that traders will gain from ratification of the CISG, since it is essentially on their behalf that the attempts at harmonization have been undertaken this century. In the author's view, those who stand to gain most from the implementation of the CISG are small traders. First, these businesses may often have too little bargaining power to enforce their own choice of law. Second, the CISG will avoid the problems and costs of working within an unfamiliar legal system and at the same time, the availability of the CISG as a neutral law will open up many potential markets, such as those in Eastern Europe, for UK traders.[158] International companies may have less need to sell goods abroad because they will have subsidiaries in a number of foreign countries and if one is concerned with a particular market dealing in a particular product, it may remain preferable to draw up a standard form which is tailored to the particular needs of the market. This is true in the case of the large commodity traders, and it has already been argued that the emphasis in the CISG is on the sale of manufactured goods as opposed to raw materials and commodities.[159]


This study has examined the impact of the CISG in other countries and the reasons behind its inception. Some conceptual and substantive areas of difference with English sales law have been identified, in addition to an attempt to answer the main criticisms of the CISG. It only remains to look forward to the future, and to suggest possible methods of ensuring that the UK will benefit from implementation of the CISG.

It is a positive sign that the government has decided to ratify the CISG in its entirety without making a declaration like the US to limit the application of the CISG to other contracting states.[160] Many of those who replied to the DTI Consultation Paper in 1997,[161] wanted to follow the line of the US.[162] However such an approach would have been problematic. It would have indicated a "half hearted" commitment [163] and suggested a lack of faith in the CISG. Instead, as the Scottish Chamber of Commerce suggested,[164] UK Exporters should have maximum exposure to the CISG so as to breed familiarity. Such a move would have also been illogical, and it is very interesting to note that legal organisations such as the Law Society and the Commercial Bar Association among others, whilst opposing ratification, agreed that if it did go ahead, no declaration should be made to limit the application of the CISG to contracts with other contracting states because the act of ratification would make the CISG a part of English law anyway.

Nevertheless, the tone of many of the comments submitted is a sign that despite the full ratification, many people will still have to be convinced of the benefits for their businesses. One reply to the consultation document even said "the Convention seems extremely bureaucratic and a barrier to normal disciplines of existing trade relationships already in force."[165] Also, a significant number of replies said that they were yet to feel the isolation expected as a result of non-ratification. Within the legal community as well, there is an air of antipathy towards the CISG. Conversations with colleagues in America confirm the attitude mentioned in Section A and having spoken to a number of commercial lawyers from firms both in the provinces and in London, the CISG seems to remain largely unknown. Is this a sign of the problems that lie ahead in making people aware of the CISG; or is it an attitude that is fueled by fear of the inadequacy of the CISG in comparison to English law, or the unqualified belief that our law is somehow superior?

Because of these problems, positive action must be taken to ensure that both the business and the legal community come to understand the CISG. At the moment, interest in the CISG is shamefully low -- it seems difficult to convince people in England of the future benefit to trade, despite the interest that is so prevalent in other European countries. Professor Andrew Burrows has suggested that the Act which will implement the CISG should clarify those points left ambiguous, such as the correct reading of Articles 14 and 55 concerning the validity of an open price contract.[166] This would, in the view of the author, be a dangerous move which could interfere with the aim of achieving a uniform interpretation of the CISG.[167] Instead, we should concentrate on building up English commentary on the provisions of the CISG in order to make people aware of the discrepancies in the text and the areas in which they should consider more detailed provisions than those offered by the CISG.

If the CISG does proves a success, it is possible that it may influence the domestic sales regime. This has already happened in Scandinavia and, in addition, the influence of the CISG on domestic sales law abroad has already been mentioned. The significance of such a move is not to be underestimated as it could affect the traditional English stance towards fundamental principles such as good faith.

It has only been possible in this study to address some issues relating to the CISG. There are many more questions to be answered, and I would like to have looked in much more detail at the applicability of individual provisions of the CISG.[168] However, in forecasting the impact of the CISG in the UK, it is not only theoretical issues that have to be considered. Attention must also be paid to the economic and political consequences of ratification. Especially in the domain of commercial law, one has to be aware of the commercial concerns of the business community and also the political impact of a healthy trading relationship with foreign countries. The courts and legislature have the role of answering to the business community and wherever possible facilitating trade as opposed to regulating it. Therefore, even if there are aspects of the CISG that remain undesirable or unclear, it must be remembered that, in many respects, the same can be said of the SOGA 1979; yet, this should not detract from the principal aim of aiding and encouraging commerce. The commercial world today bears no comparison to what it was at the turn of the last century. Businesses have recognized this, and law firms too have seen the need to provide their clients with a global service. Adoption of the CISG can only further this move and enable traders in the UK to deal with much greater security in a much wider range of markets.


1. The author is a graduate of the University of Sheffield. She currently works as a trainee solicitor with Linklaters & Alliance in London. Many Thanks to Georges Racine of McCarthy Tétrault, David Pullen of Richards Butler, Stuart Miller of Osborne Clarke, Jonathan Guest of Eversheds, Brian Burgess of Beauvoisin & Burgess, Richard Wynn Jones of Burges Salmon and Nicholas Joyce of Linklaters for their assistance and advice during the writing of this article. A special thanks to Mr. Robert Bradgate of the University of Sheffield.

2. United Nations Convention on Contracts for the International Sale of Goods, Apr. 11, 1980, S. Treaty Doc. No. 98-9 (1984), 1489 U.N.T.S. 3, reprinted in Conference on Contracts for the International Sale of Goods, 19 I.L.M. 668 (1980) [hereinafter CISG].

3. See Department of Trade and Industry, Report to the House of Commons (House of Commons Library, Great Britain, February 1999). As at the end of September 2000, the CISG is yet to be ratified. It was meant to be brought in as a private members bill, but the gentleman who was meant to introduce it very sadly died earlier on this year. No replacement date has yet been decided.

4. See Barry Nicholas, The United Kingdom and the Vienna Sales Convention: Another Case of Splendid Isolation?, available at http://www.cnr.it/CRDCS/nicholas.htm [hereinafter UK and the Vienna Sales Convention]. In at least 50% of the cases before it, one party is not British and in 30% neither is. A large amount of arbitration also takes place in London as well.

5. See Lord Steyn, A Kind of Esperanto?, in 2 The Frontiers of Liability 11-17 (P. Birks ed. 1994). Two examples mentioned by Lord Steyn are the Hague Rules and the Convention on the Enforcement of Foreign Arbitral Awards, i.e. The New York Convention 1958.

6. Richard M. Lavers, CISG: To use or not to use?, 4 Int'l Q. 31, 31 (1992).

7. See generally Barry Nicholas, The Vienna Convention on International Sales Law, 105 L. Q. Rev. 201 (1989) [hereinafter Vienna Convention on Int'l Sales]; see also generally J.D. Feltham, The United Nations Convention on Contracts for the International Sale of Goods, 1981 J. Bus. L. 346.

8. See Aleksandar Goldstain, International Contracts and Standard Form Contracts as means of escaping from the application of Municipal Law, in Unification of the Law Governing International Sales 41 (Dalloz ed., 1966).

9. See Roy M. Goode, Commercial Law in the next Millennium, The 1997 Hamlyn Lectures (1997). This provides a more detailed analysis of the development of commercial law last century.

10. Convention Relating to a Uniform Law on the International Sale of Goods, July 1, 1964, 834 U.N.T.S.107 [hereinafter ULIS]; Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, July 1, 1964, 834 U.N.T.S. 171 [hereinafter ULIF]. (These treaties are often collectively referred to as the "Hamburg Treaties").

11. Only eight nations adopted ULIS (Belgium, The Gambia, The Federal Republic of Germany, Israel, Italy, The Netherlands, San Marino, UK) and seven adopted ULIF (The same nations with the exception of Israel).

12. International Institute for the Unification of Private Law, Principles of International Commercial Contracts, Rome 1994, available at http://www.unidroit.org/english/presentation/pres.htm [hereinafter UNIDROIT Principles].

13. See generally Michael Joachim Bonell, The UNIDROIT Principles in Practice: the Experience of the First two Years, 2 Uniform L. Rev. 34-45 (1997), available at http://www.cisg.law.pace.edu/cisg/biblio/pr-exper.html.

14. See Resolutions of the European Parliament Concerning the Codification of Private Law and the Commission on European Contract law (May 6, 1994) at http://www.jus.uio.no/lm/eu.principles.lando.commission/doc.html. For the full text of this Resolution, more details about the Commission and the full text of the Principles, see id.

15. See Klaus Peter Berger, The Creeping Codification of the Lex Mercatoria 194 (1st ed. 1999).

16. See generally Michael Joachim Bonell, The UNIDROIT Principles of International Commercial Contracts and the Principles of European Contract Law: Similar Rules for the Same Purposes?, 1 Uniform L. Rev. 229-46 (1996) (for a comparison the UNIDROIT Principles and the Lando Principles); See also K. Boele-Woelki, Die Anwendung der UNIDROIT-Principles auf internationale Handelsvertraege, in Praxis des Internationalen Privat- und Verfahrensrechts 161-71 (1997).

17. See United Nations Commission on International Trade Law, UNCITRAL Principles, at Preamble, available at http://www.un.or.at/uncitral [hereinafter UNCITRAL Principles].

18. See id.

19. See generally United Nations Convention on the Carriage of Goods by Sea, G.A. Res. 48/34, 48 U.N. GAOR Supp. No. 49 at 331, U.N. Doc. A/48/49 (1993) (The Hamburg Rules); The United Nations Convention on the Liability of Operators of Transport Terminals in International Trade, April 19, 1991, reprinted in 30 I.L.M. 1503 (1991). Both are also available on the UNCITRAL website at http://www.uncitral.org/en-index.htm.

20. See, e.g., United Nations Convention on International Bills of Exchange and International Promissory Notes, U.N. Doc. A/43/820 (Nov. 21, 1988), reprinted in 28 I.L.M. 170 (1989); UNCITRAL Legal Guide on Electronic Funds Transfers; UNCITRAL Model Law on International Credit Transfers, in Report of the United Nations Commission on International Trade Law on the work of its twenty-fifth session, 4-22 May 1992, U.N. GOAR 47th sess. Supp. No. 17, U.N. Doc. A/47/17, reprinted in 32 I.L.M. 587 (1993); United Nations Convention on Independent Guarantees and Stand-By Letters of Credit, U.N. Doc. A/Res/50/48 (Jan. 26, 1996) reprinted in 35 I.L.M. 735 (1996). These documents are also available on the UNCITRAL website at http://www.uncitral.org/en-index.htm.

21. See, e.g., Recommendation on the Legal Value of Computer Records 1985; UNCITRAL Model Law on Electronic Commerce, U.N. Doc. A/5/17 reprinted in 36 I.L.M. 197 (1997). Both are available at http://www.uncitral.org/en-index.htm.

22. See, e.g., UNCITRAL Model Law on Cross Border Insolvency, U.N. Doc. A/52/17/Annex I (1997), reprinted in 36 I.L.M. 1386 (1997), available at http://www.uncitral.org/en-index.htm.

23. See, e.g., UNCITRAL Arbitration Rules; UNCITRAL Conciliation Rules 1980, U.N.Doc. A/35/17 (1980); UNCITRAL Model Law on International Commercial Arbitration, U.N. GAOR 40th Sess., Supp. No. 17, Annex I, U.N. Doc. A/40/17/Annex I (1985), reprinted in 24 I.L.M. 1302 (1985); UNCITRAL Notes on Organizing Arbitral Proceedings ( Am. Soc. Int'l L. 1996); Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (entered into force June 7, 1959)(this convention is also frequently called the New York Convention). All documents are available at http://www.uncitral.org/en-index.htm.

24. See Appendix.

25. Office for National Statistics, Monthly Review of External Trade Statistics MM24 68 (Great Britain, March 1999) [hereinafter Monthly Review of External Trade Statistics]. For an explanation on how to exclude the CISG in practice, see id. at 14, sec. D.

26. Arabic, Chinese, English, French, Russian and Spanish.

27. This includes information in other languages as well.

28. See generally The Annual Willem C. Vis International Commercial Arbitration Moot, available at http://www.cisg.law.pace.edu/vis.html (for further details of the competition).

29. See generally Legislative History: 1980 Vienna Diplomatic Conference, available at http://www.cisg.law.pace.edu/cisg/conference.html.

30. See Peter Schlechtriem, Commentary on the UN Convention on the International Sale of Goods (CISG) (Oxford: Clarendon Press 1st ed. 1998)[hereinafter CISG Commentary].

31. Available at http://www.un.or.at/uncitral.

32. Available at http://www.cisg.law.pace.edu/cisg/biblio/biblio-eng.html.

33. See CISG, supra note 1, art. 4. Note that the text of the Convention reads that the Convention is not concerned with such matters "except as otherwise expressly provided for in this convention." Id.

34. Denmark, Finland, Norway, Sweden.

35. See, e.g., CISG, supra note 1, art. 16.

36. See generally F.M.B. Reynolds, The Vienna Sales Convention on the Sale of Goods: A Note of Caution, in 2 Frontiers of Liability, supra note 4, at 18-28.

37. See generally Michael Joachim Bonell & Fabio Liguori, The UN Convention on the International Sale of Goods: A Critical Analysis of Current International Case Law, 2 Uniform L. Rev. 385-95 (1997).

38. See generally id.

39. See Sport D'Hiver di Genevieve Culet c. Ets Louys et Fils, Tribunale civile di Cuneo (Fr.) No. 45/96 UNILEX (31 January 1996); see also Seca Gaec Des Beauches Bernard Bruno c. Societe Teso Ten Else GmBh & CokG, Cour d'Appel de Grenoble (Fr.), No. 94/3859 (Ch. Comm. 23 October 1996) available at http://witz.jura.uni-sb.de/CISG/decisions/231096v.htm.

40. See Tribunale di Vigevano (It.), No. 405 (12 July 2000).

41. One commentator has suggested that case law can only be of persuasive value anyway as opposed to forming any sort of binding precedent. There are a number of reasons for this conclusion. See Franco Ferrari, CISG Case law: A new Challenge for Interpreters?, 17 J.L. & Com. 245, 260 (1998).

42. See Bonell and Liguori, supra note 36, at 386.

43. For example, at the time of writing, the author was aware of one major gas company in Germany that was considering basing all of its future international contracts on the CISG.

44. See generally Peter Schlechtriem, Some Observations on the CISG, in 2 Frontiers of Liability, supra note 4, at 29-45.

45. See M. Karollus, Judicial interpretation and Application of the CISG in Germany 1988-1994, in 1995 Review of the Convention on Contracts for the International Sale of Goods 51, 77 (Cornell 1995), available at http://www.cisg.law.pace.edu/cisg/biblio/karollus.html (In contrast to the English courts, approximately 200 judgements on the Hague Conventions were decided in the German courts).

46. For example, in relation to acceptance of an offer, German law contains different principles regarding confirmation notices than Article 19 of the CISG. Under German law, a party may send to the other party a notice purportedly confirming the content of the contract, but which, in fact, differs from the original offer (Kaufmannisches Bestätigung). If the other party does not contest this conformation, the contract is regarded as including the content of the conformation note. The other party cannot argue that the contract is different from the conformation notice or that the contract had not been formed. Regardless of the approach taken by domestic law, however, the courts have not tried to incorporate these principles into their application of the CISG, even though it could possibly be argued that such practices are applicable as a usage under Article 9. See OLG Köln, 22 February 1994)

47. The Burgerliches Gesetzbuch (BGB) translates as German Civil Code.

48. See generally Werner Lorenz, Reform of the German Law of Breach of Contract, 1 Edinburgh L. Rev. 317 (1995).

49. See id.

50. For example, Lorenz favours the unitary concept of non-performance adopted in the CISG over the German theory which distinguishes between several categories of faulty performance. See id. at 318, 327.

51. See generally J. Hellner, The Vienna Convention and Standard Form Contracts, in Dubrovnik Lectures 335-63 (Sarcevic &Volken ed., 1986).

52. J.O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention (2nd ed. 1991).

53. Bonell & Liguori, supra note 36, at 386.

54. See GAFTA Form 100 Clause 33.

55. See Hellner, supra note 50, at 339.

56. See J.P. McMahon, When the UN Sales Convention applies and some of the reasons why it matters to you and your Clients, International Sales CLE (May 23, 1996)(Although J.P. McMahon suggests that there are many alternative sources available to the purchasers of manufactured goods and many alternative markets available to the producers of raw materials, American exporters and importers are no longer in a position to have their way with respect to choice of law and forum selection).

57. See Roy M. Goode, Usage and its Reception in Transnational Commercial Law, 46 Int'l & Comp. L. Q. 1, 6-7 (1997).

58. See International Chamber of Commerce Arbitration, Case no. 5713 (1989); see also Goode, supra note 55, at 20.

59. Harry M. Flechtner, Another CISG Case in the US courts: Pitfalls for the Practitioner and the Potential for Regionalized Interpretations, 15 J. L. & Com. 127, 138 (1995).

60. See GPL Treatment, Ltd v. Louisiana-Pacific Corp., 894 P.2d 470 (Or. Ct. App. 1995), rev granted, 898 P.2d 770 (Or. 1995). The case concerned the enforceability of a contract concluded over the telephone. Under Article 11 of the CISG, a contract of sale need not be concluded or evidenced in writing. However, under U.C.C. §2-201, the enforcement of a contract for the sale of goods at a price of over $500 is not possible unless the contract is evidenced by a writing signed by the party against whom enforcement is sought. Plaintiff-appellee attempted to prove that the contract had been in writing in order to satisfy the U.C.C. requirement and only later was reference made to the CISG.

61. Despite scholarly opinion, U.S. attorneys have suggested that the CISG is deficient in that it provides inadequate Battle of the Forms provisions, and fails to provide Statute of Frauds provisions.

62. Lavers, supra, note 5, at 32.

63. Monthly Review of External Trade Statistic, supra note 24, at 68.

64. Department of Trade and Industry, United Nations Convention on Contracts for the International Sale of Goods (The Vienna Sales Convention) A Consultation Document (Great Britain 1997) [hereinafter Vienna Convention Consultation Document].

65. Commonwealth Law Bulletin, January 1995, at 162.

66. The Arbitration Court of the ICC in Paris does in fact often release its decisions as do a number of other European Arbitral tribunals. Arbitrations in London, however, remain strictly confidential.

67. CISG, supra note 1, art. 1(1)(a).

68. See id. art. 10.

69. See id. art. 95.

70. See Vienna Convention Consultation Document, supra note 63, at 10.

71. See Infra Conclusion, for further comment on this issue.

72. See CISG, supra note 1, art. 2(a).

73. See id. at 3.

74. Robinson v. Graves, 1 K.B. 579 (C.A. 1951)

75. See Vienna Convention on Int'l Sales, supra note 6, at 207-08.

76. Letter from British Telecom to the Department of Trade and Industry ( Nov. 25, 1997).

77. See CISG, supra note 1, art. 4.

78. One of the validity issues dealt with in the Convention is the issue of form. See id. art. 11-13. See also generally Helen Elizabeth Hartnell, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, 18 Yale J. Int'l L. 1 (1993).

79. Roder Zelt-und Hallenkonstruktionen GmbH v. Rosedown Park Pty Ltd et al, (S. Australia Dist. Adelaide), (28 April 1995) 1995 F. C. R. 216 (28 April 1995).

80. See generally Vienna Convention on Int'l Sales, supra note 6.

81. Despite this assertion, in one German case, involving both claims for the death of a worker and damage to property, the court referred to the CISG to ascertain whether it had jurisdiction without making a distinction between the two claims. Oberlandesgericht Düsseldorf (F.R.G.), No. 17 U 73/193 ( 2 July 1993), in Recht der International Wirtschaft 845 (1993).

82. See CISG Commentary, supra note 29, at 6.

83. See Franco Ferrari, Art. 6, in Kommentar zum Einheitlichen UN Kaufrecht (Peter Schlechtriem ed., 2000).

84. See Landesgericht München I (F.R.G.), No. 21 O 23363/94, UNILEX (29 May 1995); Oberlandesgericht Celle (F.R.G.), No. 20 U 76/94 (24 May 1995).

85. See Oberlandesgericht Düsseldorf (F.R.G.), No. 17 U 73/193 (2 July 1993), in Recht der Internationalen Wirtschaft 845 (1993) available at http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/abstract/74.htm.

86. Thus, the provisions of the CISG are only applicable where the parties themselves have failed to come to an agreement on certain issues - this is why the CISG can either be excluded in its entirety, or individual provisions can be modified or derogated from. See CISG, supra note 1, art. 6.

87. See Interfoto Library Ltd v. Stilleto Ltd, 1 Q.B. 433, 493 (C.A. 1989) (where Lord Bingham compared the common law and civil law approaches to the concept of good faith between contracting parties. He commented that in many civil law countries there is an overriding duty imposed on the parties to act in good faith, whereas "English law has characteristically committed itself to no such overriding principle but has developed solutions in response to demonstrated problems of unfairness.")

88. CISG, supra note 1, art. 8(3).

89. See id. art. 8(1). "For the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what that intent was." Id.

90. See id. art. 9.

91. See Reynolds, supra note 35, at 24.

92. Id. at 24 (although in truth the same could be said of the Sale of Goods Act, 1979, available at http://www.jus.uio.no/lm/england.sale.of.goods.act.1979 [hereinafter SoGA] ).

93. Article 9(3) ULIS states: "Where expressions, provisions, or forms of contract commonly used in commercial practice are employed, they shall be interpreted according to the meaning usually given to them in the trade concerned." ULIS, supra note 9, art. 9(3).

94. One example where the INCOTERMS have been applied is a case involving a Russian and an English company. See High Arbitration Court of the Russian Federation: Information Letter 10. 25 December 1996, available at http://cisgw3.law.pace.edu/cases/961225r1.html.

95. Steyn, supra note 4, at 24.

96. See Hellner, supra note 50, at 335-63 (for a further discussion on the unsuitability of the Convention to standard form contracts).

97. See generally SARL Bri Production "Bonaventure" v. Société Pan African Export (Cour d'Appel de Grenoble, Ch. Comm.)(Fr.), No. RG 93/3275, UNILEX (22 February 1995); Arbitral Award of the Hungarian Chamber of Commerce and Industry, Court of Arbitration, No. VB/94124, UNILEX (17 November 1995); Arbitral Award of the International Arbitral tribunal of the Bundeskammer der Gewerblichen Wirtschaft (Vienna, Austr.), No. SCH - 4318, UNILEX (15 June 1994); See also Renard Constructions (ME) Ltd. v. Minister for Public Works (N.S.Wales) UNILEX (C.A. 12 March 1992).

98. See generally J. Steyn, The Role of Good Faith and Fair Dealing in Contract Law: A Hair Shirt Philosophy?, 1991 Denning L. J. 131-41.

99. CISG, supra note 1, art. 7(2).

100. See, e.g., Memorandum for Claimant University of Münster, 9, available at http://www.cisg.law.pace.edu/cisg/text/e-text-20.html (For an example involving Article 20).

101. See C.M. Bianca & Michael Joachim Bonell, Commentary on the International Sales Law: The 1980 Vienna Sales Convention Need page number (Guiffre, Milan 1987) (This interpretation of Article 7 is not, however, universally accepted. Some commentators argue that where matters are not expressly settled by the CISG reference can be made to the general principles of its trade law as opposed to looking to other texts such as the UNIDROIT Principles); See also Franco Ferrari, General Principles and International Uniform Commercial Law Conventions: A study of the 1980 Vienna Sales Convention and the 1988 UNIDROIT Conventions, 2 Uniform L. R, 451, 459 (1997); See also Albert .H. Kritzer, Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods 117 (Kluwer 1989).

102. Please see supra Sec. A.III for an introduction to the Principles on European Contract Law.

103. See Michael Joachim Bonell, The UNIDROIT Principles in Practice - the Experience of the First two Years, available at http://www.cisg.law.pace.edu/cisg/biblio/pr-exper.html.

104. Id.

105. See Flechtner, supra note 58, at 135. (Flechtner, an American commentator, suggests the development of regionalised interpretations of the CISG).

106. Fothergill v. Monarch Airlines Ltd., 3 W.L.R. 209 (H.L. 1980).

107. Id.

108. Compare CISG, supra note 1, art. 35 and SoGA, supra note 91, art. 35.

109. See CISG, supra note 1, Sec. II: Damages.

110. Please see the discussion, Infra Sec. III.4., on the concept of nachfrist for a fuller explanation of this exception.

111. CISG, supra note 1, art. 25.

112. See CISG, supra note 1, art. 49(1)(a); see also id. art. 64(1)(a).

113. See id. art. 46(2).

114. See Infra, Sec. III.4. (The Nachfrist section of this article for a further explanation of this article.)

115. 2 All E.R. 513 (H.L. 7 May 1981).

116. Id. at 545.

117. See CISG, supra note 1, art. 25.

118. See Vienna Convention on Int'l Sales, supra note 6, at 230; See also Schlechtriem, supra note 79.

119. See CISG, supra note 1, art. 26 (Ipso facto avoidance is not available under the CISG as opposed to ULIS).

120. See OLG München (F.R.G.), No. 7 U 4419/932 UNILEX (March 1994); Int'l Chamber of Commerce Arbitration Award (Paris 1995), No. 8128/1995 UNILEX (1995).

121. Lee v. York Coach and Marine, 1 R.T.R. 35 (C.A. 1977).

122. See CISG, supra note 1, art. 81(1). Avoidance of the contract does not however affect any provision of the contract for the settlement of disputes or any other provision of the contract governing the rights and obligations of the parties consequent upon avoidance of the contract.

123. See id. Such an inconsistent act could be declaring the contract void.

124. See id. art. 28. "If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention." Id.

125. Vienna Convention on Int'l Sales, supra note 6, at 236-37.

126. See CISG, supra note 1, art. 28. If the rationale of Article 28 is that a court should not be bound to do something that would contravene the legal tradition of its own lex fori then it has been suggested that this does not apply to an arbitral tribunal because an arbitral tribunal does not have a lex fori. On the other hand, although Article 28 does not expressly refer to arbitral tribunals, it could be argued that its ratio calls for an extension of its ambit to arbitral tribunals. There are a number of factors in support of this conclusion. First, as arbitral tribunals derive their jurisdiction from the domestic judiciary, this ratio applies to them as well. Second, research has indicated that more than 90% of all transnational commercial contract contain an arbitration clause. Therefore if Article 28 was not applicable to arbitral tribunals it would have very little purpose. Interestingly, this problem is not present in the UNIDROIT Principles. It is solved by article 1:10 which reads: "In these Principles - "court" includes arbitral tribunal." UNIDROIT Principles, supra note 11, art. 1:10.

127. See CISG, supra note 1, art. 37, 48.

128. See id. art. 48.

129. See id. art. 49(1).

130. In one case, the Buyer notified the Seller that the acrylic blankets that he had delivered did not conform to the contract. The Seller offered to remedy the non-conformity, but the Buyer rejected this offer and declared avoidance of the contract. Held: the Seller's offer to cure made the breach not fundamental. Oberlandesgericht Koblenz, No. 2 U31/96 (31 January 1997).

131. O.R., p.341, No: 38.

132. See CISG Commentary, supra note 29, at 408.

133. See CISG, supra note 1, art. 34.

134. See Honnold, supra note 51, at 319-22.

135. 4 Q.B. 500 (C.A. 1878).

136. See CISG, supra note 1, art. 47.

137. Literally translated "prolonged deadline."

138. Coombe v. Coombe, 2 K.B. 215, 219-20 (C.A. 1951).


140. See CISG, supra note 1, art. 50.

141. Interestingly, this remedy does not appear in the UNIDROIT Principles (PICC) although the remedy of price reduction is available in The Principles of European Contract Law (PECL), article 9.401, available at http://www.ufsia.ac.be/~estorme/PECL2en.html.

142. See Vienna Convention on Int'l Sales, supra note 6, at 240-40.

143. Bence Graphics International v. Fasson UK Ltd. 3 W.L.R. 205 (1996)(the remedy of price reduction avoids the problem of proof of loss that arose in. Bence Graphics International).

144. See Honnold, supra note 51, at 310.

145. Lord Denning in Trendtex Trading Corp v. Central Bank of Nigeria 1 Q.B. 529, 556 (C.A. 1977).

146. See Derek Wheatley, Why I oppose the wind of change, Mar. 27, 1990, The Times; see also J.S. Hobhouse, International Conventions and Commercial Law: The Pursuit of Uniformity, 106 L. Q. R. 530 (1990).

147. See Hobhouse, supra note 145,532.

148. Although his comments were undoubtedly primarily aimed at the CISG which was at that time being considered for ratification following the 1989 Department of Trade and Industry report.

149. See Hobhouse, supra note 145, at 532.

150. See generally C.M. Schmitthoff, The Codification of the Law of International Trade, 1985 J. Bus. L. 34.

151. See Flechtner, supra note 58, at 127-38.

152. Lord Steyn, Address to the House of Lords during discussion of the Sale Of Goods (Amendment) Bill (3 May 1995) H.L. Jour. 1457-59.

153. Id.

154. See Michael P. Van Alstine, Dynamic Treaty Interpretation, 146 U. Pa. L. Rev. 687, 689 (1998) (stating that the CISG has now been ratified by nations whose combined economies account for nearly two-thirds of all world trade. The statistics were drawn from statistics published by the International Monetary Fund).

155. See generally The UK and the Vienna Sales Convention, supra note 3.

156. The Law Society, 1980 Convention of Contracts for the International Sale of Goods, Comments by the Council's Law Reform Committee (April 1981).

157. It has been commented by one practitioner that the real danger threatening to reduce the amount of business coming to the UK generated by the legal community is the increasing cost of resolving disputes in London.

158. As the Appendix shows, a significant number of Eastern European states have already ratified the Convention.

159. See Hellner, supra note 50, at 339.

160. U.S. Senate Declaration pursuant to Article 95 to exclude the application of Article 1(1)(b), available at http://www.cisg.law.pace.edu/cisg/countries/cntries-United.html.

161. See generally Vienna Convention Consultation Document, supra note 24.

162. 15 out of 35 replies to the Department of Transportation 1997 Consultation Document were in favour of making a declaration under Article 95.

163. Fax from Lord Chancellors Dept. to the Department of Trade and Industry (Dec. 8, 1997).

164. Letter from the Scottish Law Commission to the Department of Trade and Industry (Nov. 4, 1997).

165. Letter from Robinson Willey to the Department of Trade and Industry (Oct. 30, 1997).

166. Letter from Andrew Burrows, Professor, to the Department of Trade and Industry (Nov. 28, 1997).

167. Moreover Article 98 says that no reservations are permitted except those expressly authorized in the Convention. See CISG, supra note 1, art. 98.

168. For example two Australian academics have considered the applicability of the CISG to sales contracts under the Futures Markets. See generally S. Fisher & M. Hains, Futures Market Law and Practice and the Vienna Sales Convention. 1993 Lloyd's Maritime and Comm. L. Q. 531-56.

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