Contracts for the international sale of goods: applicability and applications of the 1980 United Nations Sales Convention /

284 Pages·1.95 MB·English

by  Franco Ferrari.

Contracts for the International Sale of Goods
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Contracts for the International
Sale of Goods
Applicability and Applications of the 1980 United
Nations Sales Convention
Franco Ferrari
LEIDEN • BOSTON
2012
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This book is printed on acid-free paper.
Library of Congress Cataloging-in-Publication Data
Contracts for the international sale of goods : applicability and applications of the United
Nations Convention / edited by Franco Ferrari.
p. cm.
Includes index.
ISBN 978-90-04-20169-9 (hardback : alk. paper) 1. United Nations Convention on Contracts
for the International Sale of Goods (1980) 2. Export sales contracts. I. Ferrari, Franco, J.D.
K1028.3198.C656 2011
343’.0878--dc23
2011034631
ISBN 978-90-04-20169-9
ISBN 978-90-04-20170-5 (e-book)
Copyright 2012 by Koninklijke Brill NV, Leiden, The Netherlands.
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TABLE OF CONTENTS
I. Introduction ...........................................................................................1
1. Historical Remarks .........................................................................1
2. The Need for a Uniform Application of the CISG
as Justification for this Paper .........................................................8
3. The Scope of the Present Paper ...................................................23
II. The Internationality of Sales Contracts under the CISG .................31
1. Comparing the CISG and the Hague Conventions .................31
2. The Internationality of Sales Contracts under the
Hague Conventions ......................................................................36
3. The Internationality of Contracts under the CISG ..................40
4. The “Place of Business” under the CISG ...................................44
5. Multiple Places of Business .........................................................49
6. Location of the Place of Business and the Knowledge
of It .................................................................................................55
III. The CISG’s Criteria of Applicability (1(1)(a) and 1(1)(b) ) .............59
1. The CISG’s “Direct” Application pursuant to
Article 1(1)(a) ...............................................................................59
2. The CISG’s “Indirect” Application by Virtue of the
Rules of Private International Law - Article 1(1)(b) ................72
3. The Impact of the Article 95 Reservation on the
CISG’s Applicability......................................................................84
4. The Application of the CISG by Arbitral Tribunals .................92
IV. The Convention’s Substantive Sphere of Application ........................97
1. The Sales Contract ........................................................................97
2. Other Contracts Governed by the CISG .................................102
3. Contracts for the Sale of Made-to-Order Goods
and Services .................................................................................108
4. Contracts for the Sale of Labor and Services ..........................115
5. The International Sale of “Goods” ............................................121
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vi contents
V. Exclusions from the CISG’s Sphere of Application pursuant
to Article 2 ......................................................................................129
1. General Remarks .....................................................................129
2. Exclusions of Consumer Contracts: The Definition
of Consumer Contracts ..........................................................132
3. The Recognizable Purpose of the Purchase of Goods
and the Burden of Proof .........................................................137
4. Exclusions of Sales based upon the Nature of the
Goods Sold: Negotiable Instruments and Money ...............142
5. The Exclusions of Ships, Vessels, Hovercraft, Aircraft
and Electricity (Article 2(e) and (f) ) ....................................144
VI. Sphere of Application and Party Autonomy ...............................151
1. General Remarks .....................................................................151
2. Implied Exclusion of the CISG and Choice of the
Applicable Law .........................................................................159
3. Exclusion of the CISG by virtue of Standard Contract
Forms and Choice of Forum ..................................................171
4. Implicit Exclusion of the CISG and Pleadings on the
Sole Basis of Domestic Law ....................................................174
5. Express Exclusion of the CISG ..............................................176
6. Applicability of the CISG and Opting-In .............................179
VII. The Examination and Notification in Case of
Non-Conformity of the Goods ......................................................183
1. Introduction .............................................................................183
2. The “Lack of Conformity”: Article 35(1) CISG ...................186
3. The “Lack of Conformity”: Article 35(2) and (3) CISG .....193
4. The Discovery of the Defect (Article 38 CISG) ...................204
5. The Time Requirements of a Proper Notice under
Article 39 CISG ........................................................................219
6. Substantive and Form Requirements of a Proper Notice
under Article 39(1) CISG and the Cut-off Period under
Article 39(2) CISG ...................................................................231
7. The Mitigation of the Consequences of an Improper
Notice (Articles 40 and 44 CISG) ..........................................242
VIII. The Issue of the Rate of Interest on Sums in Arrears ..................249
1. The Issue of Interest Rates in General ...................................249
2. Interest Rates and Gap-Filling ...............................................258
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contents vii
3. The Rate of Interest in Scholarly Writing .............................263
4. The Issue of the Rates of Interest in Case Law .....................266
5. The Determination of the Rate of Interest on the
Basis of Domestic Law ............................................................269
IX. Conclusion .........................................................................................277
Index ..........................................................................................................279
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CHaPTER I
INTRODUCTION
1. Historical Remarks
If it is true, as has been suggested both by legal writers1 and the drafters
of international conventions,2 that the unification of the law govern­
ing transnational commerce promotes certainty3 and predictability4
1 See, for instance, John D. Gregory, The Proposed UNCITRAL Convention on
Electronic Contracts, 59 Business Lawyer 313, 317 (2003), (stating that “a convention
could contribute to the legislative arsenal of means of increasing legal certainty or
commercial predictability”); Stefan Rozmaryn, Foreword, in Unification of the
Law Governing International Sales of Goods. The Comparison and Pos­
sible  Harmonization of National and Regional Unifications VII, VIII
(J. O. Honnold ed., Paris, 1966) (stating that “[t]he reduction of divergencies between
[different] sets of norms and the harmonization of their intrinsic content could
represent a further step in the development of international economic relations”).
2 See, for instance, the Preamble of the UNIDROIT Convention on International
Factoring, published in 27 International Legal Materials 943 (1988); UNIDROIT
Convention on International Leasing, published in 27 International Legal
Materials 931 (1988) ).
3 In this respect see, for instance, Kurt Neuhaus and Jan Kropholler, Rechtsverein­
heitlichung ­ Rechtsverbesserung?, Rabels Zeitschrift für ausländisches und
internationales Privatrecht 77, 77 (1981); Peter H. Pfund, The 1980 U.N.
Convention on Contracts for the International Sale of Goods (CISG): Backgrounds and
Status, in 570 Practising Law Institute Corporate Law and Practice
Handbook Series 39, 51 (1987); Heidi Stanton, How to be or not to be: The United
Nations Convention on Contracts for the International Sale of Goods, 4 Cardozo
Journal of International and Comparative Law 423, 428 (1996).
4 See Charles S. Haight, Babel Afloat: Some Reflections on Uniformity in Maritime
Law, 28 Journal of Maritime Law and commerce 189, 190 (1997) (stating that
“[t]hose who strive to achieve a uniform maritime law, nationally and internationally,
seek to have the people of the maritime community ­ ship owners, cargo owners, insur­
ers, lenders, furnishers of supplies, salvors ­ “be of one language and of one speech”,
so that rights and obligations may be certain and predictable. I believe that to be a
desirable goal”); Marcus G. Larson, Applying the Uniform Sales Law to International
Software Transactions: The Use of the CISG, its Shortcomings, and a Comparative Look
at how the Proposed UCC Article 2B Would Remedy them, 5 Tulane Journal
of International and Comparative Law 445, 448 (1997) (stating that “[f]or the
international practitioner, the Vienna Convention can be a useful and reliable resource
in drafting international sales transactions because it provides for greater predictability
of the law than would the observation of the respective domestic laws of the home
countries of individual contracting parties”); Mo Zhang, Party Autonomy and Beyond
An International Perspective of Contractual Choice of Law, 20 Emory International
Law Review 511, 560 (2006).
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2 chapter i
(both appearing to be very important to the successful operation of
international commerce)5 ­ and thus, the flow of international trade ­6
then it is not surprising that efforts have long been underway to unify
the law of the contract of sale of goods,7 which is considered to be
the “mercantile contract par excellence,8 the “lifeblood of interna­
tional commerce”,9 and, therefore, “the pillar of the entire system of
commercial relations.”10 The intention was to create a uniform sales
law which would overcome the merchants’ worst enemy, i.e., national
5 Robert Bejesky, The Evolution in and International Convergence of the Doctrine of
Specific Performance in Three Types of States, 13 Indiana International and
Comparative Law Review 353, 398 (2003) (“private sector actors desire enhanced
certainty in transnational business dealings”; Joshua D.H. Karton and Lorraine de
Germiny, Has the CISG Advisory Council Come of Age?, 27 Berkeley Journal of
International Law 448, 448­449 (2009) (well­functioning commercial system
requires a high degree of legal certainty; businesses will hesitate to enter into contrac­
tual relationships if they are unable to forecast the risks associated with breakdowns in
those relationships“); John Linarelli, The Economics of Uniform Laws and Uniform
Lawmaking, 48 Wayne Law Review 1387, 1427 (2003) (“[l]aws should favor the inter­
ests of the commercial community, and what the commercial community needs is ‘cer­
tainty’ ”); Brooke Overby, Contract, in the Age of Sustainable Consumption, 27 Journal
of Corporation Law 603, 623 (2002) (according to whom “the development of inter­
national business and consumer markets creates needs for uniformity and predictabil­
ity of law”); in case law see Mitsubishi Motors Corp. v. Soler Chrysler­Plymouth, Inc., 473
U.S. 614, 639­40 (1985), where the U.S. Supreme Court expressly referred to “the need
of the international commercial system for predictability in the resolution of
disputes.”
6 See, e.g., James J. Callaghan, U.N. Convention on Contracts for the International
Sale of Goods: Examining the Gap­Filling Role of CISG in Two French Decisions,
14 Journal of Law and Commerce 183, 185 (1995) (“[e]nhancing certainty in the
realm of international sales will greatly facilitate the flow of international trade
and serve the interests of all parties engaged in commerce”); Hannu Honka,
Harmonization of Contract Law Through International Trade: A Nordic Perspective, 11
Tulane European and Civil Law Forum 111, 117 (1996) (“[f]ree international
trade functions better in a legally harmonized environment than in the opposite
situation. also, harmonization of contract law is presumed to save costs as the “legal
picture” is simplified”).
7 See also Michael Kabik, Through the Looking­Glass: International Trade in the
“Wonderland” of the United Nations Convention on Contracts for the International Sale
of Goods, 9 International Tax and Business Lawyer 408, 409 (1992) (stating that
“[e]fforts have long been underway to promote international trade by unifying and
harmonizing international commercial law”).
8 Francesco Galgano, Il diritto privato fra codice e costituzione 6 (2nd ed.,
Bologna, 1980).
9 alina Kaczorowska, International Trade Conventions and Their
Effectiveness. Present and Future 14 (The Hague, 1995).
10 Daniela Memmo, Il contratto di vendita internazionale nel diritto uniforme,
Rivista trimestrale di diritto e procedura civile 180, 181 (1983).
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introduction 3
borders,11 and the differences between the national legal systems,12
which constituted (and still constitute)13 “an obstacle to economic rela­
tionships which constantly increase among citizens of different coun­
tries; an obstacle above all for the enterprises that are involved in
international commerce and that acquire primary resources or distrib­
ute goods in different countries which all have different law.”14
as far as sales law is concerned, the need to “create an internationally
uniform set of rules for cases linked to a plurality of countries”15
designed to “transcend national borders in order to maximize the uti­
lization of resources”16 and to create certainty17 was recognized as early
11 See for a similar statement, Errol P. Mendes, The U.N. Sales Convention & U.S.­
Canada Transactions; Enticing the World’s Largest Trading Bloc to Do Business under a
Global Sales Law, 8 Journal of Law and commerce 109, 112 (1988), stating that
“time has shown that in fact, national laws are the international merchants’ and traders’
worst enemy.” (footnote omitted)
12 See Fritz Enderlein and Dietrich Maskow, International Sales Law 1
(New York, 1992), stating that “[i]t is generally acknowledged that the existence of
different national legal systems impedes the development of international economic
relations with complicated problems arising from the conflict of laws”); see also Eleanor
M. Fox, Harmonization of Law and Procedures in a Globalized World: Why, What, and
How?, 60 antitrust Law Journal 593, 593 (1991­1992).
13 See Willem Calkoen, Globalization and the Future of International Practice of Law
from a European Perspective, European Journal of Law Reform 491, 492 and 498
(2000).
14 Francesco Galgano, Il diritto uniforme: la vendita internazionale, in atlante di
diritto privato comparato 245, 245 (F. Galgano et al. eds., 5th ed, Bologna, 2011).
For similar statements, see Nayiri Bogossian, A Comparative Study of Specific
Performance Provisions in the United Nations Convention on Contracts for the
International Sale of Goods, Review of the Convention on Contracts for the
International Sale of Goods (CISG) 3, 7 (1999­2000); Roy Goode, Reflections on
the Harmonization of Commercial Law, in Commercial Law and Consumer Law.
National and International Dimensions 3, 3 (R. Cranston and R. Goode eds.,
Oxford, 1993); albert H. Kritzer, The Convention on Contracts for the International Sale
of Goods: Scope, Interpretation and Resources, Review of the Convention on
Contracts for the International Sale of Goods (CISG) 147, 147 (1995); Petar
Sarcevic, Foreword, in International Contracts and Conflicts of Laws. a
Collection of Essays VII, VII (P. Sarcevic ed., London/Dordrecht/Boston, 1990);
Peter Winship, Energy Contracts and the United Nations Sales Convention, Texas
International Law Journal 365, 366 (1990).
15 Sergio Carbone and Marco Lopez de Gonzalo, Commento all’art. 1 della
Convenzione di Vienna, Nuove Leggi civili commentate 2, 2 (1989).
16 Memmo, supra note 10, at 181.
17 See also Iulia Dolganova and Marcelo Boff Lorenzen, A Case for Brazil’s
Adhesion to the 1980 UN Convention on Contracts for the International Sale of Goods,
13 Vindobona Journal of International Commercial Law and arbitration
351, 366 (2009); Lisa M. Ryan, The Convention on Contracts for the International Sale of
Goods: Divergent Interpretations, 4 Tulane Journal of International and
Comparative Law 99, 101 (1995).
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4 chapter i
as in the 1920s.18 Ernst Rabel suggested starting with the unification of
the law of international sales of goods.19 Upon this suggestion, the
International Institute for the Unification of Private Law (hereinafter
“UNIDROIT”),20 one of the international bodies promoting the unifi­
cation of (commercial) law,21 decided to undertake extensive studies
in this field which led, in 1935, to the first draft of a uniform law on the
international sale of goods.22 after World War II, which had inter­
rupted the aforementioned efforts,23 work resumed with a conference
18 For more detailed information on the history of the unification of international
sales law, see Matthias Brandi­Dohrn, Das UN­Kaufrecht ­ Entstehungsgeschichte und
Grundstruktur, Computer und Recht 705 (1991); allan E. Farnsworth, The Vienna
Convention: History and Scope, 18 International Lawyer 17 (1984); John O.
Honnold, Documentary History of the Uniform Law for International
Sales (1989); Timothy D. Hughes, CISG ­ History, Contract Drafting, Remedies and
Future Prospects, in Guide to the International Sale of Goods Convention
101.50 (W. a. Hancock ed., St. Paul, 1988); Kazuaki Sono, The Vienna Sales Convention:
Hostry and Perspective, in International Sale of Goods. Dubrovnik Lectures 1
(P. Sarcevic and P. Volken eds., New York, 1986) [hereinafter: International Sale of
Goods].
19 Ernst Rabel’s role in the unification of international sales law has been stressed by
several authors; see, e.g., Michael Joachim Bonell, Introduction to the Convention, in
Commentary on the International Sales Law. The Vienna Sales Convention
3, 3 (M. C. Bianca and M. J. Bonell eds., Milan, 1987); Memmo, supra note 10, at 184
note 9; Burghard Piltz, Internationales Kaufrecht 7 (Munich, 2nd ed., 2008);
Bruno Zeller, The Development of Uniform Laws – A Historical Perspective, Pace
International Law Review 163, 166 (2002).
20 The International Institute for the Unification of Private Law (UNIDROIT) was
set up in Rome in 1926 under the aegis of the League of Nations.
For an overview of the Institute’s activities, see, among others, Mario Matteucci,
Unidroit. The First fifty Years, in 1 New Directions in International Trade Law
XVII ff. (UNIDROIT ed., Rome, 1977); Riccardo Monaco, The Scientific Activity of
Unidroit, in 1 New Directions in International Trade Law XXVII (UNIDROIT
ed., Rome, 1977); J. G. Starke, The current activities of the UNIDROIT, 64 australian
Law Journal 685 (1990).
21 For an overview of the different bodies promoting the unification and hamoniza­
tion of (commercial law), see Herbert Dolzer, International Agencies for the Formulation
of Transnational Economic Law, in The Transnational Law of International
Commercial Transactions 61 (N. Horn and C. M. Schmitthoff eds., antwerp/
Boston/London/Frankfurt a.M., 1982).
22 For the text of this draft, see Projet d’une loi internationale sur la vente (S.d.N.
1935 ­ U.D.P. Projet I); for comments on this draft, see Harold C. Gutterdige, British
Yearbook of International Law 80 (1935); Ernst Rabel, Der Entwurf eines ein­
heitlichen Kaufgesetzes, Rabels Zeitschrift für ausländisches und internationa­
les Privatrecht 3 (1935); Ernst Rabel, A Draft of an International Law of Sales,
5 University of Chicago Law Review 543 (1938).
23 See Jack G. Stern, A Practitioner’s Guide to the United Nations Convention on con­
tracts for the International Sale of Goods, 16 New York University Journal of
International Law and Politics 81, 85 (1983); for more detailed historical remarks
on the early history of the unification of sales law, Peter Schlechtriem, Bemerkungen
zur Geschichte des Einheitskaufrechts, in Einheitliches Kaufrecht und nationales
Obligationenrecht 27 (P. Schlechtriem ed., Baden­Baden, 1987).
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