Cite as Bonell, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 51-64. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.
Michael Joachim Bonell
1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision
The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions.
1. History of the provision.
1.1. - Article 6 lays down one of the basic principles underlying the Convention. It says that the parties are free to exclude the application of the Convention either entirely or partially. This means that even with respect to a contract of sale in which the conditions for the applicability of the Convention as provided under Article 1 are fulfilled, the Convention applies only to the extent that no contrary intention of the parties can be established.
1.2. - This article is based on Article 3 of ULIS which provided:
During the preparation of the present Convention only a few States expressed reservations about the principle of the autonomy of the parties as such. Their concern was that, in practice, the principle could be abused by the economically stronger party imposing his own national law or contractual terms far less balanced than those contained in the Convention (see Yearbook, I (1968-1970), 168; II (1971), 43-44; III (1972), 73). A proposal to provide for some restrictions on the freedom of the parties received wider support. In particular, it was suggested that the parties, when excluding the Convention in its entirety or derogating from any of its provisions, should be required to indicate what other [page 51] law or rules should govern their contract (see Yearbook, I (1968-1970), 166, 168). The same condition had already been imposed in the 1963 Draft (Article 6), according to which:
(2) The parties may derogate in part from the provisions of the present law provided that they agree on alternative provisions, either by setting them out or by stating to what specific rules other than those of the present law they intend to refer.
However, at the 1964 Hague Conference the majority of delegations was against such a restriction (see HERBER, in DÖLLE, Einheitliches Kaufrecht, 19-20). Similarly, the prevailing view in UNCITRAL was in favour of the widest possible recognition of the parties' autonomy. The Working Group later adopted a provision which, subject to some drafting changes, corresponded to the first sentence of Article 3 of ULIS. The second sentence of that article was deleted since, according to some delegations, special reference to an «implied» exclusion might have encouraged courts to conclude, on insufficient grounds, that the Convention had been wholly excluded (see Yearbook, II (1971), 55). At the Vienna Conference a proposal to reintroduce a reference to the possibility of an «implied» exclusion or derogation was rejected for the same reasons (see Official Records, II, 249-250). Nonetheless, the majority of delegations was equally opposed to the proposal according to which a total or partial exclusion of the Convention could only be made «expressly» (see Official Records, II, 249-250).
1.3. - ULFC also contained a provision which recognized the parties' autonomy. Article 2(1) stated that:
Correspondingly, Article 2 of the Formation Draft, as approved by the Working Group (see Yearbook, VIII (1977), 88) provided that: [page 52]
(2) Unless the Convention provides otherwise, the parties may [agree to] derogate from or vary the effect of any of its provisions as may appear from the negotiations, the offer, the reply, the practices which the parties have established between themselves or usages.
In their comments on the Draft a number of States criticized this article on the ground that, contrary to Article 2 of ULFC, it suggested that an exclusion of or derogation from the uniform rules on formation could not be made unilaterally by the offeror or the offeree, but required in any event an express or implied agreement between the parties (see Yearbook, IX (1978), 130-131). Similar objections were also raised in the Commission, with the result that a new text of Article 2 was accepted, reading as follows: «The parties may exclude the application of this Convention or derogate from or vary the effect of any of its provisions». The reason given for this amendment was that «this formulation avoided the difficulty of the text adopted by the Working Group ... which required an agreement to exclude or vary the Convention prior to the conclusion of the principal contract» (see Yearbook, IX (1978), 32). As a result of the decision to integrate the Formation Draft with the Sales Draft, Article 2 of the Formation Draft was combined with Article 4 of the Sales Draft and became Article 5 of the UNCITRAL Draft Convention, the text of which is now to be found in Article 6 of the Convention.
1.4. - According to Article 6 the only provision of the Convention from which the parties cannot derogate is that contained in Article 12 (but see § 3.4., infra). As to the content of Article 12, which has to be read in conjunction with the reservation clause contained in Article 96, and the reasons for its mandatory character, see commentary on Article 12, infra.
2. Meaning and purpose of the provision.
2.1. - Article 6 refers to two cases: one in which the parties exclude the application of the Convention in its entirety; the other in which, while agreeing to have their contract governed by [page 53] the Convention, they intend to derogate from or vary the effects of some of its individual provisions. Although the two possibilities are dealt with in the same article, they should at least in theory be considered separately.
The right of the parties to contract out of the entire Convention is an application of a generally recognized principle of private international law according to which the parties to an international contract of sale of goods are permitted to choose the applicable law. In the absence of a uniform law, the parties' choice was restricted to the existing domestic laws. Article 6 makes it clear that, notwithstanding the advent of the Convention, the parties remain free to decide what should be the proper law of their contract -- that of the Convention or that of some existing municipality.
The right of derogation raises different issues. Even where the Convention applies as the proper law of the contract, the parties, under this right, may adapt the Convention to their special needs, either by excluding some of its provisions or by agreeing on contractual terms to supplant them. Existing domestic laws grant the parties the same freedom of contract, provided they do not contravene rules of a mandatory character. The absence of similar limitations under the Convention, except in Article 12, should not come as a surprise. The Convention expressly excludes consumer purchases from its scope (see Article 2(a)) and, with respect to contracts of sale between merchants; it does not deal with questions relating to their validity nor with the effect on the property of the goods sold (see Article 4). It follows that its scope is restricted to transactions and issues which, within the various domestic laws, are traditionally governed by provisions of a non-mandatory character.
2.2. - The total or partial exclusion of the Convention by the parties may be done in different ways. The most direct and efficient way would be a special agreement between the parties before starting negotiations. In practice, however, this will rarely be the case. It is more likely that only at a later stage will one of the parties declare that he does not intend to be bound by the Convention as such or by some of its special provisions. Obviously, no problem arises if it is the offeror who takes the initiative by including in his offer an express clause to this effect [page 54] (e.g., «The Vienna Convention of 1980 on International Sales Contracts shall not apply to this Contract»). If, on the contrary, it is the offeree who first makes a similar statement, according to Article 19(1) his reply to the offeree will amount to a counter-offer, with the result that there will be no contract, unless it is accepted by the original offeror. It would make no difference if the offeree, instead of making such a statement expressly, replied to the offeror by sending him a printed «acknowledgement of order» on the back of which were reproduced his general conditions containing a provision excluding the application of the Convention. Only in one instance would the provision become part of the contract, despite the absence of an acceptance by the original offeror: i.e., if the offeree proved that the exclusion of the Convention amounted to a practice established in previous transactions between the two parties or to a usage and as such ready binding by virtue of Article 9.
2.3. - The total or partial exclusion of the Convention may also be made implicitly. It is true that, in contrast to Article 3 of ULIS, the present article does not expressly mention this possibility. However, its history clearly shows that, if any substan:tive changes from Article 3 of ULIS were intended, they were not to exclude such a possibility altogether, but rather to discourage courts from too easily inferring an «implied» exclusion or derogation (see § 1.2., supra).
2.3.1. - The criteria for deciding whether the parties have implicitly excluded the application of the Convention, are to be found in the Convention itself rather than in a particular national law (see WINSHIP, The Scope of the Vienna Convention, 35; for a similar view with respect to ULIS, see HERBER, in DÖLLE, Einheitliches Kaufrecht, 20; Supreme Court of the Federal Republic of Germany, 28 March 1979, in Uniform Law Review 1979, II, 276; for further references see REINHART, Rechtsprechung, 3). This follows from Article 7(1), according to which:
Since the question is essentially one of interpreting statements made by and other conduct of the parties, reference is mainly [page 55] to be made to Article 8 of the Convention in respect to the exclusion issue.
2.3.2. - Generally speaking, there is a clear indication of the parties' intention to exclude the application of the Convention, either entirely or partially, whenever they have chosen as the proper law of their contract the law of a non-Contracting State or agreed on contractual terms inconsistent with specific provisions of the Convention.
2.3.3. - More doubtful are cases in which the parties have chosen the law of a Contracting State or concluded their contract using standard contracts or a set of general conditions containing provisions which are clearly influenced by the principles and rules typical of the domestic law of a particular State.
When the parties agree to refer to the law of a Contracting State one cannot speak of an implied exclusion of the Convention. Once a State has ratified the Convention, the Convention becomes part of its national law as a set of special rules for international sales, in addition to its traditional law governing domestic sales. A reference made by the parties to the national law of that particular State therefore necessarily includes the uniform law also, which would be applied to their contract, unless they have clearly indicated that they intended to choose the law governing domestic sales as the proper law of their contract (for this solution with respect to ULIS, see e.g., Supreme, Court of the Federal Republic of Germany, 4 December 1985, in Juristenzeitung 1986, 347, followed by comment by REHBINDER; Court of Appeals of Amsterdam, 13 July 1978, Schip en schade 1979, 71; HERBER, in DÖLLE, Einheitliches Kaufrecht, 21). A similar view was expressed at the Vienna Conference, when a large majority of delegations rejected a proposal that a provision in the contract that the contract shall be governed by the law of the particular State, shall be deemed sufficient to exclude the application of the Convention, even where the law of that State incorporates the provisions of the Convention (see Official Records, II, 250).
On the contrary, the use of general conditions or of standard form contracts whose content is influenced by principles and rules typical of the domestic law of a particular State, is certainly [page 56] an element from which one could infer the intention of the parties to have that domestic law rather than the Convention govern their contract. Before reaching such a conclusion, however, due consideration should be given to other circumstances of the case, such as the parties' actual knowledge of the existence of the Convention, the use of the same general conditions or standard forms in previous transactions, and the choice of a forum situated in a non-Contracting State.
2.4. - Since Article 6 refers to «the parties» in the plural, it might seem that the Convention's application could be excluded or limited only by mutual agreement. As a matter of fact, this is true only with respect to an exclusion of the Convention in its entirety or a derogation from any of the provisions in Part I and Part III of the Convention. With respect to the provisions contained in Part II relating to the formation of the contract, the situation is different. Some of these provisions expressly foresee the possibility of the offeror modifying their content. Thus, Article 14(2) after laying down the general rule according to which, «[a] proposal other than one addressed to one or more specific persons is to be considered merely as an invitation to make offers ...», adds «unless the contrary is clearly indicated by the person making the proposal». Similary, Article 16(1) states that offers are as a rule revocable, but according to Article 16(2) the contrary applies if the offeror in his offer indicates -- «whether by stating a fixed time for acceptance or otherwise» -- that it is irrevocable. Further examples may be found in Article 18(2) (possibility for the offeror to fix a special time for acceptance) and in Article 18(3) (possibility for the offeror to establish that his offer may be accepted by an act, such as one relating to the dispatch of the goods or payment of price, without notice to the offeror). In addition, the offeror can modify the rule laid down in Article 18(1) by restricting the offer to acceptance made in a particular form. The offeror could also establish in derogation of Article 18(2), that the acceptance become effective when it has been dispatched.
At first blush this result may appear surprising, but at least two justifications can be advanced. First, it is the offeror who takes the initiative to conclude a contract of sale, and it is therefore only logical to allow him to determine the rules which [page 57] should govern the negotiating process. Second, should the offeree not like the particular conditions laid down by the offeror in his offer, he is always free not to accept the offer, either by expressly rejecting it or by simply remaining silent (accord HUBER, UNCITRAL-Entwurf, 427). Precisely for this latter reason the only provision from which the offeror is not entitled to derogate unilaterally is the one contained in the second sentence of Article 18(1), according to which silence on the part of the offeree does not in itself amount to acceptance.
3. Problems concerning the provision.
3.1. - A first question arising in connection with the right of the parties to exclude totally or partially the application of the Convention is whether there is any time-limit within which such an exclusion must be agreed upon. The answer must be in the negative. One might expect that, in practice, the parties would normally indicate their intention at the beginning of their negotiations, or at least before the contract is concluded. Nonetheless, there is nothing to prevent them from deciding at a later stage, even after the initiation of a legal proceeding relating to their contract, to change the nature and the content of the provisions determining their rights and duties arising from the contract of sale (for the same conclusion with respect to ULIS see Supreme Court of the Federal Republic of Germany, 26 October 1983, in Recht der Internationalen Wirtschaft, 1984, 151). It should, however, be borne in mind that any exclusion of or derogation from the Convention agreed upon after the conclusion of the contract amounts to a modification of the contract, which in some cases may require a particular form (see, e.g., the case contemplated in Article 29(2)).
3.2. - Article 6 does not say what rules should govern when the parties elect to exclude the application of the Convention totally or partially. The parties themselves may designate a particular municipal law as the proper law of their contract, or adopt contractual terms intended to replace the corresponding provisions of the Convention. But what of the cases in which the parties fail to agree on such alternative solutions? In answering [page 58] this question a distinction must be drawn between the case in which the Convention is excluded in its entirety and that in which only some of its provisions are excluded.
3.2.1. - In the first case, one must determine the national law supplanting the Convention and governing the contract of sale. This question is not covered by the Convention, and its solution in each case is to be found in the conflict-of-law rules of the forum.
3.2.2. - If on the contrary the parties derogate from only some specific provisions contained in the Convention, it may be that no dispute arises involving the matters dealt with in the excluded provisions. In that case, no alternative solution need be sought. Otherwise, the situation is to be treated as if there were a gap in the Convention from the outset. This means that Article 7 applies, with the result that the relevant issue has to be settled «in conformity with the general principles on which the Conventionis based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law» (paragraph (2)), always taking into account that, «in the interpretation of the 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» (paragraph (1)).
3.3. - Another problem not dealt with by this article concerns the validity of the parties' agreement to exclude totally or partially the application of the Convention.
Like any other contractual term, a clause stating the total or partial exclusion of the Convention has to be validly stipulated in order to become effective. Leaving aside questions qf capacity of the parties or of possible special requirements as to form -- the former because they rarely occur in international transactions, the latter because it is expressly dealt with in Articles 11 and 12 -- there are other factors which may affect the validity of such a clause. First of all, the consent of one of the parties may be vitiated by a defect such as mistake, fraud, threat or abuse of unequal bargaining power. In addition, if the parties have not only totally or partially excluded the Convention, but also agreed [page 59] on the alternative law or provisions which should apply to their contract, such an agreement may be substantially invalid. Thus, the choice of the law of State X as the proper law of the contract, instead of that of the Convention, may be invalid, because the applicable rules of private international law either exclude entirely the possibility of the parties' choosing the proper law of their contract or restrict the parties' freedom of choice. For example, the rules may demand a reasonable contact between the particular contract and the chosen law, or they may require that the choice made is bona fide. Likewise, a contractual provision which, in derogation of Article 79(1), excludes the seller's liability for non-performance even in case of gross negligence on his part, may run contrary to minimum limits of parties' liability for their failure to perform contractual obligations, as laid down by the applicable substantive law.
3.3.1. - Article 4 states that «[t]his Convention ... is not concerned with ... the validity of the contract or of any of its provisions». Accordingly the question of whether the parties have validly excluded the Convention or derogated from any of its provisions falls outside the Convention and has to be solved by reference to a particular domestic law. As a rule, the law referred to is that which in the absence of the Convention would be the law governing the contract of sale as a whole. This law determines not only whether the agreement between the parties is affected by a defect of consent, but also whether the contractual clauses in derogation of the Convention are consistent with the limit actions imposed by that law on the parties' freedom of contract. A different solution applies, however, if the parties themselves have designated the proper law of their contract. Here, the possibility to choose that particular law depends on the applicable rules of private international law. And, given the special nature of a choice-of-laws clause, it is uncertain whether the validity of the parties' consent is to be decided according to the proper law as objectively determined, the law chosen by the parties, or the substantive rules of the forum (see in this respect Article 10 of the 1985 Hague Convention on the Law Applicable to Contracts for the International Sale of Goods, according to which whenever the parties' agreement as to the applicable law is either express or clearly demonstrated by the terms of the contract and the [page 60] conduct of the parties, the existence and validity of that agreement shall be determined by the law chosen; however if one party claims that he did not consent to the choice of law he may rely on the law of the State where he has his place of residence, if in the circumstances it is not reasonable to determine that issue under the chosen law).
3.3.2. - With regard to the consequences which derive from an invalid exclusion of or derogation from the Convention a distinction has to be drawn between the case in which the agreement between the parties was affected by a defect of consent and that in which it was invalid because of its content.
In the first case there are only two alternatives. Either the defect of consent is of such a nature that the contract as a whole has to be considered invalidly concluded, or the Convention will apply as if the parties had never excluded its application or derogated from some of its specific provisions.
The situation is not so simple if both parties have correctly expressed their consent as to the total or partial exclusion of the Convention, but have agreed to substantially invalid contractual terms. In such a case their intention not to apply the Convention should be respected. Accordingly, if a choice-of-laws clause, by means of which the parties intended to exclude implicitly the Convention in its entirety, turns out to be invalid under the applicable rules of private international law, the contract should be governed by the law which, according to the same rules of private international law, would be the proper law in the absence of the choice-of-laws clause. Likewise, when the contractual terms on which the parties have agreed in derogation of some specific provisions of the Convention must be striken because of. their inconsistency with the mandatory rules of the law governing the validity of the contract, the relevant issue (e.g., the liability of the seller for his failure to perform any of his obligations) should be governed by the same domestic law rather than by the Convention.
3.4. - Only Article 12 is expressly declared by this article to be of a mandatory character (see § 1.4., supra). There are however some other provisions which by their very nature seem to be incapable of being excluded or modified by the parties. [page 61]
There are provisions, such as Article 4, whose only purpose is to exclude specific issues from the scope of the Convention. To admit the possibility of the parties excluding their application would be nonsense, since despite an agreement to this effect the Convention would remain without relevant provisions concerning the validity of the contract or the ownership of the goods sold.
For other examples of provisions which by their very nature do not seem capable of being derogated from parties, see commentary on Article 7, infra, § 3.3., and commentary on Article 28, infra, § 3.1.
3.5. - The question of derogating from the provisions which define the scope of the Convention is quite different from that of making the Convention applicable in cases when it would otherwise not apply («opting in»). If the positive and negative conditions for the application of the Convention as defined in Articles 1 to 3 are not fulfilled, any agreement between the parties to the effect that the Convention should nevertheless govern their contract can no longer be justified on the basis of Article 6, but must be construed in the light of the relevant rules of the private international law of the forum.
3.5.1. - The situation is rather simple if the contract relates to a type of transaction or a type of commodity that is excluded from the scope of the Convention (e.g., a consumer purchase or a contract for services; a contract for the sale of ships or aircraft; see Articles 2 and 3). An express reference by the parties to the Convention must be considered as an agreement to incorporate the latter into the contract. The result will be that the individual provisions of the Convention like any other contractual term may bind the parties only to the extent that they are not contrary to mandatory rules of. the proper law of the contract, i.e., the domestic law which by virtue of the rules of the private international law of the forum governs the transaction in question (see HONNOLD, Uniform Law, 112; SCHLECHTRIEM, UN-Kaufrecht, 22; Uniform Sales Law, 36).
3.5.2. - But what is to happen if one of the positive requirements for the application of the Convention as laid down in Article 1 is missing, e.g., because the only international element of a contract of sales consists in the fact that the goods must be [page 62] delivered abroad, or because the parties have their place of business in different States none of which has ratified the Convention? It has been argued that in such cases an agreement between the parties to apply the Convention to their contract would be perfectly valid in legal systems that give full effect to the parties' choice of law, whereas difficulties may arise only where the rules of private international law of the forum require a «reasonable relationship» between the transaction and the legal system chosen by the parties (see HONNOLD, Uniform Law, 111). This opinion is questionable. The decisive question is not whether the parties enjoy an unlimited freedom of choice as to the law which should govern their contract, but whether they may select for this purpose, instead of a particular domestic law, directly an international Convention. This latter possibility is in general excluded. Indeed, even those legal systems which grant the parties the widest possible autonomy move from the assumption that the law eventually chosen as the proper law of the contract must be that of a particular State. It follows that also in the cases here under consideration a reference by the parties to the Convention will normally be construed as an agreement to incorporate the latter into the contract, while the proper law of the same contract will have to be determined separately on the basis of the rules of the private international law of the forum. If .that law happens to be the law of a Contracting State, the Convention will also be directly applicable, thus rendering superfluous its incorporation into the contract. However, if the State whose law is the proper law of the contract has not ratified the Convention, the individual provisions of the latter will bind the parties only to the extent that they do not affect rules from which the parties may not derogate (see MASKOW, in ENDERLEIN-MASKOW-STARGARDT, Kommentar, 45).
3.5.3. - The conclusions so far reached with respect to the parties' possibility of making the Convention applicable to transactions which fall outside the scope of Articles 1 to 3 are based on the conflict-of-laws rules currently adopted by State courts. The situations may be different if the parties agree to submit the disputes arising from their contract to arbitration. Arbitrators are not necessarily bound by a particular domestic law. This is self-evident, if they are authorized by the parties to [page 63] decide ex aequo et bono (see Article VII (2) of the 1961 Geneva Convention on International Commercial Arbitration; Article 28(3) of the 1985 UNCITRAL Model Law on International Commercial Arbitration). But even in the absence of such an authorization there is a growing tendency to permit arbitrators to base their decisions on principles and rules different from those adopted by State courts. This tendency has recently received a significant confirmation by the UNCITRAL Model Law on International Commercial Arbitration, where it is expressly stated that «[t]he arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute» (Article 28(1)), and that only «[f]ailing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict-of-laws rules which it considers applicable» (Article 28(2)) (emphasis added). A similar provision has already been adopted in France: see Article 1496 of the Code of Civil Procedure as introduced by Décret n. 81-500 of 12 May 1981. Following this approach the parties to an international contract would be free to indicate in the Convention the «rules of law» according to which the arbitrators shall decide any dispute, with the result that the Convention would directly apply regardless of whether or not the positive and negative conditions for its application are fulfilled in the single case.[page 64]