An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law

In 1980, the United Nations Convention for the International Sale of Goods (CISG) came into being as an attempt to create a uniform commercial sales law. This book compares two major restatements – the UNIDROIT Principles and the Principles of European Contract Law (PECL) – with CISG articles. In this work scholars and legal practitioners from twenty countries contribute analysis on the various issues covered in the articles of the CISG, comparing them with how each issue is treated in the UNIDROIT and PECL restatements. The introductory section of the book addresses theoretical and practical issues of the appropriate interpretive methodology as mandated in CISG Article 7, and it is followed by individual analyses of the Convention’s provisions.

John Felemegas is a Senior Lecturer in Law at the Faculty of Law, University of Technology, Sydney, where he teaches International Sale of Goods and Equity & Trusts. He also conducts legal research and writing as Fellow of the Institute of International Commercial Law, Pace University School of Law in New York. His main research interest is the interpretation of the CISG, and he has published his work in the Review of the Convention on Contracts for the International Sale of Goods, the Pace International Law Review, and the Vindobona Journal of International Commercial Law and Arbitration.

An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law

Edited by
JOHN FELEMEGAS
B.A., LL.B., LL.M., Ph.D
Senior Lecturer in Law
University of Technology, Sydney

This work was produced under the auspices of the
Pace Institute of International Commercial Law

CAMBRIDGE UNIVERSITY PRESS
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© John Felemegas 2007

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First published 2007

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Library of Congress Cataloging in Publication Data

Interpretation of the United Nations Convention on Contracts for the International
Sale of Goods (1980) as Uniform Sales Law / edited by John Felemegas.
   p. cm.
Includes bibliographical references and index.
ISBN-13 978-0-521-86872-3 (hardback)
ISBN-10 0-521-86872-6 (hardback)
1. United Nations Convention on Contracts for the International
Sale of Goods (1980) 2. Export sales contracts. I. Felemegas, John, 1970–
K1028.3198.159 2006
343′.0878–dc22    2006008749

ISBN 978-0-521-86872-3 hardback

Cambridge University Press has no responsibility for
the persistence or accuracy of URLs for external or
third-party Internet Web sites referred to in this publication
and does not guarantee that any content on such
Web sites is, or will remain, accurate or appropriate.

Contents

Foreword

Eric E. Bergsten
Professor of Law, Emeritus, Pace University;
Secretary, United Nations Commission on International Trade Law, Retired.

“Over recent years, discussion has intensified on possible harmonization of substantive private law, in particular contract law.”¹

   The dream of unifying, or harmonizing, the law is an old one. For some, especially in Europe, it is a dream of a return to the golden age of a jus commun. For others a unified law is an important symbol of a unified nation.² A more immediately pragmatic dream is that the unification of commercial law will reduce the cost of transborder transactions and thereby increase international trade. Although pragmatic, such a dream is still idealistic. As stated in the Preamble to the United Nations Convention on Contracts for the International Sale of Goods (CISG),

   The States Parties to this Convention,

^***

   Considering that the development of international trade on the basis of equality and mutual benefit is an important element in promoting friendly relations among States,....

The quotation that opens this foreword is from a Communication of the European Commission and was meant to apply primarily to developments in the European Union. However, it applies equally well to developments with a universal application and particularly to the CISG. To date 67 States that conduct more than two-thirds of international trade have made the CISG positive law by becoming party to it. The CISG is directly applicable to international sales of goods in those States, unless the parties to the contract exclude its application. The Convention must be considered to be a major success in the efforts to unify an important aspect of contract law. There is, however, a significant concern. Will the courts interpret the CISG in a consistent way? Will the unification of text be undermined by a dis-unification of interpretation?

The drafters of the CISG were acutely aware of the problem. They provided in Article 7(1) that

In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.

Upon adoption of the CISG by a State, Article 7 becomes part of the law of that State and constitutes a direction to the courts as to how to interpret the Convention. Nevertheless, it is understandable that the judges, trained in the law of their own domestic legal system, will have a home-State bias when faced with the need to interpret and apply the Convention. Furthermore, to promote uniformity in its application the judge must know how the Convention has been interpreted in the other States that have adopted it. That is not easy for obvious reasons. UNCITRAL itself has undertaken to make the interpretations of the CISG by the courts available through its CLOUT abstracts (Case Law On Uncitral Texts) and through its recently published UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods.³ A further major resource is the CISG Web site maintained at Pace Law School with its unsurpassed collection of court decisions and bibliography of books and articles on the CISG.⁴ Not to be forgotten are the other Web sites that collect and publish decisions in non-English languages.⁵

   Although these resources are of immense importance to help satisfy “the need to promote uniformity in its application,” they do not necessarily help the interpreter “regard... its international character.” The international character of the CISG calls for the interpreter to go beyond the need for uniformity in its application. It calls for an appreciation of the differences between the appropriate legal solutions to the problems arising in domestic sales of goods and international sales of goods. But where is the interpreter to look for help in fulfilling the obligation? One potential source is this book, which compares the CISG and two recently adopted texts on international contract law. One is the UNIDROIT Principles of International Contract Law. The other is the Principles of European Contract Law.

   To understand the significance of these two texts for their potential help in interpreting the CISG, it is necessary to be aware that they have taken entirely different approaches to the unification / harmonization of international contract law. The UNIDROIT Principles of International Commercial Contracts are an “international restatement of general principles of contract law.”⁶ It should be noted that, like the CISG, the UNIDROIT Principles are restricted to commercial contracts. According to the Introduction to the Principles, “[n]aturally, to the extent that the UNIDROIT Principles address issues also covered by CISG, they follow the solutions found in that Convention, with such adaptations as were considered appropriate to reflect the particular nature and scope of the Principles.”⁷ The UNIDROIT Principles are, therefore, in many respects a further development of the CISG itself. It is clear that when the Preamble provides that “[t]hey may be used to interpret or supplement international uniform law instruments,” it is primarily the CISG that was considered.⁸ Although they have no binding force unless the parties themselves refer to them in their contract, they have taken on something of a positive law nature by the number of courts and arbitral tribunals that have cited them.⁹

   The Principles of European Contract Law have an entirely different purpose. “The main purpose of the Principles is to serve as a first draft of a European Civil Code,”¹⁰ although it was also hoped that they would be referred to by arbitrators. It is certainly far from clear whether there will ever be a European Civil Code, but the Principles have indeed served as the starting point for preliminary work in that direction.¹¹ This means that the European Principles do not purport to have universal significance. Nevertheless, because the European Union comprises States with both civil law and common law legal systems, the solutions found at a pan-European level for common contract problems would also have suggestive value for interpretation of the CISG. However, two caveats must be kept in mind. First, a European Civil Code, and therefore the Principles, would apply to consumer contracts, as well as to commercial contracts. Because consumer contracts raise certain policy concerns not present in commercial contracts, the Principles must always be scrutinized carefully to see whether those concerns have affected the particular provision being considered. Second, the European Principles stand somewhere between being a self-sufficient set of contract principles for current application and a first draft of a European Civil Code. Being a first draft means that there will be changes. Indeed, the preliminary work on a European Civil Code has already produced drafts that differ in some respects from the Principles.

   The authors of the various chapters in this book comprise an outstanding list of scholars from all over the world. Many are leading authorities in their countries. Others are younger entrants into international legal scholarship. The fact that this is a collaborative effort by so many authors with widely varying legal backgrounds and experience leads to the natural fear that their contributions will suffer from an inconsistency of approach. It is to the credit of the editor and the authors that this fear is not realized. The quality of the work is consistently very high. There is little doubt that this is a book that will occupy a proud place in the growing library on the CISG. More importantly, this is a work that will serve to help lawyers, judges, and other scholars approach the interpretation of the CISG with a more international outlook than they might otherwise have had.

Contributors

Orkun Akseli has an LL.B., Dokuz Eylul University School of Law Turkey; LL.M., University of Georgia School of Law, USA; M.A., Istanbul Bilgi University School of Law, Turkey; Ph.D., University of Manchester School of Law and is an attorney-at-law and member of the Izmir and Turkish Bar Associations and a Lecturer in Law, University of Newcastle, England.

Jorge Oviedo Albán, a Lawyer (J.D.), Javeriana University (Bogotá D.C. – Colombia), is a specialist in Commercial Law at Javeriana University and a Professor of Contracts and Commercial Law at La Sabana University (Bogotá D.C. – Colombia). Professor Oviedo Albán has lectured in Colombian and other international universities and is author of publications on International Commercial Law in Argentina, Spain, Colombia, Peru, Mexico, and the United States.

Camilla Baasch Andersen is a lecturer at University of Leicester, visiting lecturer at University of London at SOAS and Queen Mary’s Centre for Commercial Law Studies, Fellow of the Institute of Commercial Law at Pace University School of Law, and assistant editor of the database at CISGW3.

Dr. Friedrich Blasé is Rechtsanwalt and Counsel at MPK – Michaelis Pfeifer König Rechtsanwälte, Frankfurt, Germany.

Bojidara Borisova received her law degree from Sofia University “St.Kl.Ohridsky,” Bulgaria, and is currently a Ph.D. candidate at the same university, working on her research project on international investment law, more particularly the right of protection of foreign investments in cases of expropriation. Since July 2003 she has been working as a part-time legal advisor at the Bulgarian Investment Agency.

Allison E. Butler received her J.D. from Loyola University School of Law, New Orleans, Louisiana, USA (Common Law Program) and her B.A. in International Relations, with honors, from the University of South Florida, Tampa, Florida, USA. She is a published author and a private practitioner in Martin County, Florida, USA.

Anja Carlsen is an attorney-at-law in Denmark.

Avv. Cecilia Carrara is a Research Fellow at the CERADI – Luiss Guido Carli University in Rome and an Italian attorney, and is counsel to the law firm Macchi Cellere Gangemi.

Andrea L. Charters is an Adjunct Professor at the Washington University School of Law, St. Louis, Missouri, USA, with a J.D. from Harvard Law School, an M.S.W. from Washington University, and an A.B. from Yale University.

Predrag N. Cvetkovic is on the Faculty of Law, Department for Trade Law at the University of Nis, Serbia. He received his LL.B. and LL.M. from the University of Nis [Dissertation title: Formation of Contracts for the International Sale of Goods]. His Ph.D. dissertation is on International Protection of Foreign Investments.

Sieg Eiselen is a Professor of Private Law on the Faculty of Law at the University of South Africa and an Advocate of the High Court of South Africa.

Hossam El-Saghir is a Professor of Law on the Faculty of Law, Menoufia University, Egypt.

John Felemegas has a Doctorate in Law, is a Fellow at the Pace Law School Institute of International Commercial Law, and is a Senior Lecturer on the Faculty of Law at the University of Technology, Sydney.

Dionysios P. Flambouras, LL.B. (Athens), LL.M. (Bristol), M. Stud. (Oxon), and Advocate of the Athens Bar, is a Solicitor in England and Wales.

Alejandro M. Garro is a Professor of Law at the Parker School of Foreign and Comparative Law, Columbia Law School, New York.

René Franz Henschel is an Assistant Professor (Law of Obligations) at the Aarhus School of Business. He expresses his sincere thanks to Associate Professor Hans Henrik Edlund, Aarhus School of Business, for reviewing an earlier version of his chapter.

Philipp Höttler, LL.M. (Queensland), is a Ph.D. candidate at the University of Cologne, Germany.

Christopher Kee is an Associate Lecturer in Law at Deakin University and a Partner with Keelins, Melbourne Australia (ckee@keelins.com).

Bertram Keller studied law and philosophy in Heidelberg, Cambridge (UK), Paris, and Vienna and is now writing a Ph.D. thesis on the theoretical foundations of contract law at Munich University.

Robert Koch is a Professor in Commercial Law, Corporate Law, and International Trade Law, Institute of Business Law at Nürtingen University (Germany).

Joachim A. Kuckenburg, FCIArb, is a German attorney in the Paris law firm De Busschère Kuckenburg.

Chengwei Liu, is LL.M. from Renmin University of China and Attorney-at-Law at Global Law Office, Beijing.

Ulrich Magnus is a Professor of Law at the University of Hamburg and Judge on the Court of Appeal of Hamburg.

Francesco G. Mazzotta is Dottore in Giurisprudenza, University of Naples “Federico II” (Italy), 1993; has his LL.M. in International and Comparative Law, University of Pittsburgh School of Law (USA), 2000; and is an Associate of the Institute of International Commercial Law of the Pace University School of Law.

Florian Mohs Dr. iur. (University of Basel); LL.M. (Victoria University of Wellington) and Postdoctoral researcher at the University of Basel, Switzerland.

Chantal Niggemann is Legal Counsel at Techem Energy Services GmbH&KG, Frankfurt and Main, Germany.

Elisabeth Opie, B.A., LL.B. (Hons), LL.M., GAICD, Senior Legal Counsel, Commonwealth Scientific and Industrial Research Organisation (Australia).

Joseph M. Perillo is Alpin J. Cameron Professor of Law, Fordham University School of Law, New York.

Jumpita Ruangvichathorn has a Doctorate in Law; is a lawyer for the Electricity Generating Authority of Thailand (EGAT); and is an Adjunct Law Lecturer, Faculty of Law, Thammasat University, Thailand.

Friederike Schäfer is a Research Assistant at the European Legal Studies Institute, University of Osnabrück, Germany.

Ulrich G. Schroeter has a Dr. iur. (Freie Universität Berlin) and is Assistant Professor at the Institute for Foreign and International Private Law, University of Freiburg (Germany).

Stephen E. Smith, Esquire, is a Senior Lecturer at Northwestern University School of Law (Chicago, Ill., USA) and the faculty advisor for their Willem C. Vis International Commercial Arbitration Moot team. Mr. Smith thanks David Tahan and Peng Zhao for their research assistance and Jennifer A. Woyan for her patient revisions and useful suggestions as to the format for his chapter.

Maja Stanivukovic is Professor of Private International Law, Novi Sad Faculty of Law, Serbia.

Jarno J. Vanto has a Master of Laws degree from the University of Turku, Finland, and an LL.M. degree from the New York University School of Law, USA. He is an attorney at the law firm of Covington & Burling, Brussels.

Dr. Andrea Vincze is a Fellow of the Institute of International Commercial Law of the Pace University School of Law and Assistant Professor at University of Miskolc Law School, Hungary. His main areas of research are International Trade Law, International Commercial Arbitration, ICSID Arbitration, and Conflict of Laws.

Pilar Perales Viscasillas has a Doctorate in Law, is a Professor of Commercial Law, University Carlos III of Madrid, and is a Spanish representative at UNCITRAL.

Colin Ying is an Associate Professor on the Faculty of Law at the University of Technology, Sydney. He has a B.A. (Manit.) and an LL.M. (London), and is a Barrister at Law of Lincoln’s Inn and the Supreme Court of New South Wales.

Jonathan Yovel has his S.J.D. (1997, Northwestern University, Chicago, Ill., USA); LL.M. with honors (1995, Northwestern University, Chicago Ill., USA); and LL.B., and B.A. (Philosophy) magna cum laude (Tel-Aviv, 1992). He is a Senior Lecturer in Law and Jurisprudence on the Faculty of Law, University of Haifa, Israel.

Bruno Zeller has a Doctorate in Law; is Senior Lecturer in Law, Victoria University Law School, Melbourne, Australia; and is Adjunct Professor of Law, Murdoch University, Perth.