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The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation

John Felemegas, B.A., LL.B., LL.M. Ph.D
Pace University Essay [*]
February 2001

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3. THE NATURE OF THE COMMUNITY ESTABLISHED BY CISG

According to Professor Kastely, CISG is a "rhetorical text", contemplating and creating an "international rhetorical community".[136] In essence, CISG, by inviting its ratification by government leaders throughout the world, offers the world community a new, uniform language in which to conduct and discuss international trade. CISG deals with significant issues affecting international trade and offers to the members of the "community" that embrace its text a set of terms in which these issues can be discussed and deliberated upon. CISG implicitly recognises a set of roles (e.g., buyer, seller), shared expectations (e.g., the fulfilment of the respective obligations of the buyer and the seller to a contract that the CISG governs), and occasions for dispute and deliberation (e.g., where there are gaps in the law). What follows is an examination of the nature of the community that CISG attempts to establish and bind and the relationship of that community with the text of CISG.

(a) The Community and its Members

The Preamble to CISG reveals its author: "The States Parties to this Convention ... have agreed as follows ...". The text that follows this passage is framed as a statement by the States that are united as a single author of the international instrument in question. The Preamble is addressed to an audience, which is composed of all States who may consider joining the Convention and all traders, lawyers, courts, and arbiters concerned with the activity of international trade.

It has been correctly noted, however, that the line between author and audience in this text is doubly blurred.[137] At the time of the approval of the final draft of CISG, no State could yet ratify it and thus, technically, there were no States parties to the Convention; all States were among the audience. At the same time, however, the ratification process was established as a way for nations to become parties to the Convention. Thus the mechanism existed for members of the audience to join as authors of CISG's text. Kastely has argued that this blurring of author and audience is significant to the rhetorical character of the CISG, as it

"emphasises the potentially creative role for the members of the community it seeks to create. By highlighting the fluid character of the document's author and audience, the text offers to its readers the possibility of joining the community on an equal footing with other member States."[138]

Although Kastely's de-constructive linguistic analysis of the Preamble seems too technical, it highlights an important point; due to this linguistic "sleight of hand" performed by the Preamble, all the existing and potential members to the Convention are seen as equals and the "feel good" factor is firmly entrenched amongst them. The goal was to make CISG attractive to all potential signatories. With a long history of unsuccessful attempts in creating uniform international trade laws,[139] mainly because minimal membership to the drafting of such laws led to minimal membership in the community adopting them, the atmosphere created by CISG had to be one of equality and openness. Of course, CISG will ultimately be judged on the substance of its provisions and their use by the members of its community. But it is clear from the outset that CISG represents a serious, major attempt to unite international trade. Even to the last detail.

(b) The Preamble

The Preamble to the CISG also seems to describe the character of the union among the States who have authored the text with those who read it. The words of the Preamble seem to emphasise the conscious act of agreement by the member States (i.e., "The States ..., Bearing in Mind ..., Considering ..., Being of the Opinion ..., Have Agreed ...").

The wording used in the Preamble indicates that the union of nations by CISG is the result of careful consideration and express agreement. Joining the international community of CISG is - and is seen to be - a positive act by its members, thus making all member States part of a wide, thoroughly consensual and deliberative community. However, the fact that most of this is in standard treaty language clearly undercuts the strength of any proposal to attach greater meaning or importance to the CISG Preamble, which states the following:

THE STATES PARTIES TO THIS CONVENTION

BEARING IN MIND the broad objectives in the resolutions adopted in the sixth special session of the General Assembly of the United Nations on the establishment of a New International Economic Order,

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,

BEING OF THE OPINION that the adoption of uniform rules which govern contracts for the international sale of goods and take into account the different social, economic and legal systems would contribute to the removal of legal barriers in international trade and promote the development of international trade,

HAVE AGREED as follows: [...][140]

The purpose of the CISG, as set forth in this passage of the Preamble, is to contribute to a new international economic order based on harmony and equality, to promote friendly relations among the member States, and to encourage the development of international trade. The relationship among the States that have joined, or that will join, in this Convention exists not merely in the writing and reading of CISG but also in the world beyond the text, as an actual political and economic community. The international communality that characterised the drafting of CISG (although not its predecessors) is highlighted in this opening statement in order to remind all users of CISG of the benefits (psychological and material) that their membership entails despite their different social and legal domestic traditions.

On this point, Kastely argues that the community formed by the Preamble is "both consensual and motivated by self-interest", as she states that "its main focus is on the possibility of encouraging international trade, to the benefit of both industrialised and the developing nations".[141] However, there are some valid objections to this argument. Professor Winship's reading of the same text stresses the altruism implicit in it rather than any self-interest.[142] This alternative reading focuses on several new phrases found in CISG's Preamble that have also been added to the preambles of prior treaties and which respond for the first time to certain concerns of developing countries.

The present writer is of the opinion that it is more sound and appropriate to view the act of joining the community formed by CISG as an apt recognition of the equal status of less developed countries. There is, however, an inherent danger in analysing such admirable projects of "unification on equal terms". The wishful thinking that accompanied the lengthy preparation of CISG (and is reflected in the formal language of the Preamble) and the corresponding relief and euphoria generated after its official introduction to the world, may blind the faithful and obscure the real benefits conferred upon the developing States. There lies the danger that CISG may prove to be a symbolic gesture only, unless we are able to ascertain in real terms the benefits to be gained by the developing States from the CISG. Only the correct interpretation and uniform application of the text can safeguard the benefits conferred to both developing States and developed States by CISG's principles of equality and fairness.

It has been correctly noted that a rhetorical analysis of CISG becomes stronger when we compare its text to that of other similar documents.[143] A comparison of the documents can identify what is new, what is old and what is omitted, or added.

In accordance with United Nations practice, the Preamble provisions were prepared during the Diplomatic Conference that adopted the Convention, in Vienna. Professor Bonell has stated that the purpose of the Preamble to an international agreement is "to indicate the aim of the agreement and any specific considerations underlying it" and has concluded that the Preamble to CISG is much more developed than those of other Conventions already prepared within UNCITRAL.[144] The Preamble to the United Nations Convention on the Limitation Period in the International Sale of Goods (1975) was restricted to two clauses:

"Considering that international trade is an important factor in the promotion of friendly relations among States,

"Believing that the adoption of uniform rules governing the limitation period in the international sale of goods would facilitate the development of world trade [...]"

while the United Nations Convention on the Carriage of Goods by Sea (1978) was even more frugal:

"Having recognised the desirability of determining by agreement certain rules relating to the carriage of goods by sea [...]"

Subsequent to its drafting, the Preamble to CISG has strongly influenced the wording of the Preamble to the Convention on Agency in the International Sale of Goods (1983).

The examination of the relationship between the above Preamble provisions reveals that the references that can be found in the CISG Preamble (to "the development of international trade" as "an important element in promoting friendly relations among States" and "the adoption of uniform rules which govern contracts for the international sale of goods" as contributing to the promotion of "the development of international trade") bear striking similarities to the Preamble to the 1975 Limitation Convention.

On the issue of the similarity of the wording in the CISG Preamble with the wording of other instruments, it can be said that repetition of clauses from prior documents in the CISG Preamble raises the question of whether the repetition is a reaffirmation of the ideas and principles contained therein, or merely a stylistic formula and nothing more; the latter representing the orthodox position. The new references made in the CISG Preamble, on the other hand, obviously highlight topics on the minds of the drafters of CISG at the time of drafting.

The lack of dispute, objection or controversial debate about the Preamble has been interpreted by one academic as reflecting "the broad acceptance of the principles underlying the Preamble".[145] However, the better position on this point is that this is not necessarily so. It has been proposed that the language in paragraphs two and three of the Preamble to CISG, which is also found in prior treaties, "could reflect indifference to the use of language that has become familiar and considered innocuous".[146] The present writer also agrees that the standard form of the language used in CISG's Preamble limits any importance or intrinsic significance that can be attached to it. However, the CISG Preamble is unique in that it incorporates certain ideas that reflect the concerns of a number of States, which had not been expressed before. In particular, concerns of the third World countries, such as:

(i) the reference, in the first paragraph, to the New International Economic Order;

(ii) the development, in the second paragraph, of the corresponding provisions in the 1975 Limitation Convention (cited above) so as to refer to "equality and mutual benefit"; and

(iii) the reference, in the third paragraph, to "different social, economic and legal systems" and to "the removal of legal barriers in international trade".

The Preamble provisions in CISG are also more developed than those of the 1964 Convention Relating to a Uniform Law on the International Sale of Goods (ULIS), which speak of the States signatory to the Convention as "[d]esiring to establish a uniform law on the international sale of goods".

The importance of the wording of CISG's Preamble and the weight to be placed on it cannot be fixed precisely yet. We can get some guidance from Article 31(2) of the United Nations Convention on the Law of Treaties (1969), which specifically mentions the Preamble of a treaty as being part of the context for the purpose of the interpretation of the treaty; i.e., the Preamble can be relevant to the interpretation of a treaty. However, academic opinions differ as to the legal importance of this Preamble. Some commentators believe that the language of the Preamble, for various reasons, counts for virtually nought, while others argue that the Preamble "informs" other provisions of the Convention, most particularly Article 7.[147]

The present writer believes that the presence of a clearly marked, specially prepared interpretation section in a Convention does not justify an expansive role for its Preamble. This would entail that the value of CISG's Preamble as an interpretative tool must be diminished. The CISG represents a major development in international law, in the wider context of the history (political, as well as legislative) of the unifying efforts; its Preamble merely reflects this in formal language and structure.

The CISG Preamble cannot and should not solve interpetative issues directly; it formally mentions the main principles that imbue the Convention and which are so vital to its identity and faithful application. Some of its main principles (e.g., internationality, uniformity) are also found in the interpretative provisions in Article 7(1), proving only an ideological connection between the Preamble and Article 7 CISG. However, introducing and accompanying a Convention marked by important diplomatic and textual compomises, the value of this Preamble should not be lost completely, albeit as a beacon or an outer-marker of the general direction that CISG's interpretation should follow.

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FOOTNOTES

* Based on Doctoral Thesis submitted to the University of Nottingham in June 2000, with subsequent revisions in response to Professor Kritzer's critique.

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136. See Kastely, ibid., at 585. See also, the present writer's critical treatment and reformulation of the term "rhetorical community", earlier in Chapter 2, supra.

137. See Kastely, ibid., at 585 ff.

138. Ibid., at 585-6.

139. For a more detailed discussion of this history, see Chapter 1, "Uniform International Sales Law: From Lex Mercatoria to CISG", supra.

140. The Preamble was drafted at the 1980 Conference and it was adopted without significant debate. See the Report of the Drafting Committee, U.N. Doc. A/CONF.97/17, reprinted in U.N. Conference on Contracts for the International Sale of Goods, Official Records (1981) [hereinafter,U.N.Official Records], at 154; Summary Records of the 10th Plenary Meeting, paras. 4-10, U.N. Doc. A/CONF.97/SR.10, reprinted in U.N. Official Records, at 219-220.

141. Kastely, supra note 129, at 588 et. seq.

142. See P.Winship, "Commentary on Professor Kastely's Rhetorical Analysis", 8 Northwestern J. Int'l. L. & Bus. (1988) 623-639, at 625.

143. See Winship (1988), supra note 142, at 624.

144. See Bonell (1987), supra note 79, at 23-5. The present writer has used Professor Bonell's analysis on this point extensively.

145. See Kastely, supra note 129, at 586.

146. See Winship (1988), supra note 142, at 625.

147. Support for the first view, i.e., that the Preamble may not be used for the interpretation and gap-filling of the substantive legal provisions, can be found in: P. Schlechtriem, Uniform Sales Law (Manz: Vienna 1986), 38, n.111; M.Evans, in Commentary on the International Sales Law, (Bianca &Bonell eds.), (Guiffrè: Milan 1987), where the author notes that "the character of the [CISG] is essentially technical and that rules of interpretation are already to be found in Article 7(1). In consequence, the scope for interpretation in the light of the Preamble may not be very wide"; Bonell (1987), supra note 79, at 25, who states: "the scope for interpretation in the light of the Preamble may not be very wide and it will be of interest to see how far the case law may accord its provisions the status of something more than general declarations of political principle." See also J.O. Honnold, Uniform Law for International Sales (Kluwer 1999) 541, where Prof. Honnold argues that the short preparation and consideration of its provisions deprive the Preamble of its "weight"' as an aid to the interpretation of CISG's provisions (including Art. 7) which were discussed at length in UNCITRAL and at the Diplomatic Conference.

For the exactly opposite view, see J.Lookofsky, "The 1980 United Nations Convention on Contracts for the International Sale of Goods", in: Blainpain (gen. ed.), International Encyclopaedia of Laws - Contracts (Kluwer 1993), vol. 1, para. 4, p.18. See also F.Enderlein & D.Mascow, International Sales Law (Oceana, 1992), at 19-20 who state: "It would be inappropriate to dismiss the preamble from the start as insignificant from a legal point of view. The principles it contains can be referred to in interpreting terms or rules of the Convention, such as the terms of 'good faith' (Article 7(1)) or the rather frequent and vague term 'reasonable'. It could also be used to fill gaps because those principles can be counted among, or have an influence on, the basic rules underlying the Convention Article 7(2)). The spirit of the preamble should also be taken account of when agreed texts of sales contracts are to be interpreted." For a similar view, see Horacio A. Grigera Naón, "The UN Convention on Contracts for the International Sale of Goods", in (Horn/Schmittoff eds.), The Transnational Law of International Commercial Transactions: Studies in Transnational Economic Law (Kluwer 1982) 92.

Most of the above citations can be found in a thorough Report on the legal importance of the CISG Preamble, edited by Prof. A.H.Kritzer at http://www.cisg.law.pace.edu/cisg/text/reportpre.html.

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Pace Law School Institute of International Commercial Law - Last updated March 22, 2001
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