Go to Database Directory || Go to Entire Honnold Text || Go to Bibliography to Honnold Text || Go to Honnold Text Schedule of Abbreviations: Judicial & Arbitral Decisions

Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 88-114. Reproduced with permission of the publisher, Kluwer Law International, The Hague.

Article 7

Interpretation of the Convention

Text of Article
A. International Character; Uniformity
      (1) The Problem of Diverse Connotations of Legal Terms
      (2) Legislative History
            (a) Domestic Law
                  (i) The Fothergill Case
            (b) Standards for Use
      (3) International Case Law and Scholarly Studies
      (4) Access to International Materials
B. Interpretation of the Convention to Promote Good Faith in International Trade
      (1) Evolution of the "Good Faith" Provision
      (2) Possible Areas for Interpretation to Promote "Good Faith"
C. Gap-filling: "General Principles" v. Domestic Law
      (1) Evolution of the Approach to Gap-filling
      (2) The Nature of "Gaps"; Solutions in Domestic Law
      (3) The Area for Gap-filling: "Matters Governed by" the Convention
            (a) Areas Excluded
      (4) General Principles on which the Convention is Based: Examples and Problems
            (a) Reliance on Representations of Other Party: Domestic Law
                  ("estoppel", etc..) v. "General Principles" of Convention
            (b) Communications
            (c) Mitigation
            (d) General Approach: Boldness v. Restraint
D. Special Role of the Sales Convention
      (1) Interpretation of the Sales Convention and the Rules on
            Interpretation of Treaties in the 1969 Vienna Convention
      (2) The Character and Texture of the Rules
      (3) Texture of the Convention and Approaches to Interpretation

§ 85 Article 7 responds to the fact that a Convention establishing uniform international law performs a unique and difficult function. Paragraph (1) emphasizes that this law must be interpreted with sensitive regard for its special character and purpose; paragraph (2) is designed to help the law adapt and grow in the light of new circumstances.

Article 7 [1]

"(1) 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.

"(2) Questions concerning matters governed by this Convention which are not expressly settled in it 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."

§86 A. International Character; Uniformity

Paragraph (1) provides that in interpreting the Convention there shall be regard for two closely-related principles—(a) the Convention’s "international [page 88] character" and (b) "the need to promote uniformity in its application." How to give life to these principles deserves close attention.

§87 (1) The Problem of Diverse Connotations of Legal Terms

We have reason to envy those who work in the physical sciences on phenomena that can be photographed and measured, while we must cope with disembodied concepts that have been shaped by diverse historical, economic and cultural conditions, and include concepts that have similar names but different meanings— des faux amis.[2]

The careful international draftsman tries to avoid abstract, disembodied concepts. For example, in the 1980 Sales Convention risk of loss passes to the buyer "when the goods are handed over to the first carrier" or (if the contract does not involve carriage) when the buyer " takes over the goods" (Arts. 67(1), 69(1))—more stable materials than ideas such as "property" or "title." The ideal is to use plain language that refers to things and events for which there are words of common content in the various languages. But this ideal is difficult to realize, and the principles of interpretation in Article 7(1) run counter to reflexes that have been deeply implanted by our education and professional life—the reading of a legal text in the light of the concepts of our domestic legal system, an approach that would violate the requirement that the Convention be interpreted with regard "to its international character."

If we are deprived of our most familiar tools, what resources remain for interpreting the Convention? This question was the subject of sixteen national reports, a general report and animated discussion at the Twelfth International Congress of Comparative Law (Australia, 1986); material developed at this Congress with respect to national and international practices will be cited frequently in this work.[3]

§88 (2) Legislative History

To read the words of the Convention with regard for their "international character" requires that they be projected against an international background. With time, a body of international experience will develop through [page 89] international case law and scholarly writing. (This prospect will be explored infra at §92.) In the meantime, the only international setting for the Convention’s words is its legislative history—its genetic background.

The family history of the Convention is rich and revealing. In preparing the Convention, UNCITRAL built on the work, spanning three decades, that produced the Hague Conventions of 1964 (ULIS and ULF). The deliberations in UNCITRAL would commence with an analysis of the handling of the problem in the 1964 Conventions. As we shall see, in many instances the Hague solution was retained; the discussions shed light on the common understanding of the Hague solution and the reasons for its retention. When the Hague approach was modified or rejected, the reasons for the change shed a revealing sidelight on the new provision. As the UNCITRAL draft developed, proposals to delete or amend were made and decided; the views that prevailed in making these decisions add depth to the international understandings that underlie the Convention’s words.

To introduce this background material, the steps in the legislative process in UNCITRAL and at the Diplomatic Conference were summarized in the Overview, Ch. 1, at §§9, 10. The Bibliographic Notes . . . introduced the legislative materials. And, in this Commentary, legislative history will be brought to bear on specific problems of interpretation.

The documents that embody this legislative history are reproduced (together with materials on other topics) in Volumes I-X of the UNCITRAL Yearbooks and in the Official Records of the 1980 Diplomatic Conference. As is common in an extended legislative process, the article-numbers of the drafts under discussion kept changing as provisions were added and deleted and as the draft’s structure was reorganized. This repeated renumbering of the articles makes it very difficult to trace the development of a provision even when all the documents are at hand. Difficulties the present writer encountered in coping with these problems made it necessary to prepare a Documentary History that reproduces and introduces the relevant documents and provides references in the documents’ margins to the final articles of the Convention for which the legislative deliberations were relevant.[4][page 90]

§89 (a) Domestic Law

In domestic law we face a conflict over the legitimacy of legislative history. In many civil law countries the use of legislative history has long been accepted.[5] Courts in the United States also freely invoke the legislative history osf domestic statutes and international Conventions. For example, a 1985 decision of the United States Supreme Court interpreting the Warsaw Convention on International Transportation by Air relied on the travaux préparatoires of the Convention and also "the weight of precedent in foreign and American courts"[6] (We shall return to the use of foreign precedent at §92, infra .)

Other legal systems—primarily those following judicial patterns established in England—have traditionally disavowed the use of such materials in statutory contraction: the meaning of legislation must be deduced solely from the words of the statue.[7] However, the "plain meaning" rule has not been applied with the rigor that the traditional formulae might suggest. English courts have long interpreted legislation in the light of "the defect or evil" which the statute was intended to remedy, and have considered reports of special commissions to identify the purpose of legislation that resulted from the commissions’ work. And a growing body of opinion holds that the "plain meaning" doctrine stultifies the handling of statutory material and should be modified or abandoned.[8]

§90 (i) The Fothergill Case

Controversy has centered on the interpretation of domestic legislation; our concern is with the interpretation of an international convention. In this setting, a slow process of development in English law took a large and decisive step in the 1980 House of Lords decision in Fothergill v. [page 91] Monarch Airlines —a case that called for the interpretation of an Act of Parliament that gave effect to the Warsaw Convention on the liability of air carriers.[9] Under that Convention, notice must be given within seven days of "damage" (avarie) but no notice need be given as to "loss" with respect to baggage. A passenger failed to give this notice of the loss of part of the contents of a bag. Kerr, J., and the Court of Appeal rejected the airline’s contention that the notice requirement applied to this claim. The House of Lords reversed. All five opinions conceded that "damage" would not normally refer to loss of part of the contents of baggage, but ruled that in this setting the word should be given a wider meaning. In reaching this conclusion, all of the opinions examined basic questions concerning the interpretation of statutes that implement international conventions; four of the five opinions concluded that consideration should be given to travaux préparatoires, and also to foreign case law and scholarly writing interpreting the Convention.[10] These opinions stressed that they could not lay down rules to govern all future problems. One question that may still be subject to further development is this: What materials may a court consider in deciding whether the language of a convention is ambiguous? In any event, it seems clear from the decision that in construing a convention, like the 1980 Sales Convention, that is finalized in several languages, the question of "clear meaning" would not be determined solely from the English text. In addition, a majority of the opinions drew attention to the rules on interpretation in the Vienna Convention on the Law of Treaties (1969).[11][page 92]

Under Article 31 of the 1969 Vienna Convention:

"1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose."

Article 32 adds:

"Recourse may be had to supplementary means of interpretation including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable."

Under Article 32, supplementary aids, including travaux préparatoires, may be used when the terms of the treaty are "ambiguous or obscure" or when the language "leads to a result which is manifestly absurd or unreasonable" and also "to confirm" the meaning derived from the terms of the treaty. The opinions of Lords Diplock and Scarman indicated that, apart from the rules of the Vienna Treaty, interpretative aids could be used when there was a conflict between the literal meaning of the words and the purpose of the Convention.

In view of this development, it seems unlikely that even courts influenced by English judicial tradition will hastily decide that the words of a provision of the Convention are so clear that it is improper to look at the legislative history to ascertain the purpose of the provision. Indeed, the plausibility of the "plain meaning" approach depends upon its use within the confines of a system with established patterns for the use of language, strengthened by a symbiotic relationship between the approach to drafting and to interpretation. This essential feature of the "plain meaning" tradition was stressed by Lord Diplock, who added: [page 93]

"The language of an international convention has not been chosen by an English parliamentary draftsman. It is neither couched in the conventional English legislative idiom nor designed to be construed exclusively by English judges. It is addressed to a much wider and more varied judicial audience than is an Act of Parliament that deals with purely domestic law. It should be interpreted, as Lord Wilberforce put it in James Buchanan & Co., Ltd. v. Babco Forwarding & Shipping (U. K.) Ltd. [1978] A. C. 141, 152, 'unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation'."

We shall consider, infra at §103, the difference between interpreting conventions in the field of public international law—the issue at the forefront of the 1969 Vienna Convention on the Law of Treaties—and the interpretation of rules regulating the relationship between sellers and buyers. In any event, the rule on interpretation in Article 7 of the 1980 Sales Convention avoids the vestige of the "plain meaning" rule of Article 31(1) of the 1969 Vienna Convention, just quoted, and in addition stresses the special role of the Sales Convention "to promote uniformity." Although the Warsaw Convention did not articulate this objective as a rule of interpretation, in the Fothergill case Lord Scarman made this powerful statement on interpreting a Convention to unify private law:

"Rules contained in an international convention are the outcome of an international conference; if, as in the present case, they operate within the field of private law, they will come under the consideration of foreign courts; and uniformity is the purpose to be served by most international conventions, and we know that unification of the rules relating to international air carriage is the object of the Warsaw Convention. It follows that our judges should be able to have recourse to the same aids to interpretation as their brother judges in the other contracting states. The mischief of any other view is illustrated by the instant case. To deny them this assistance would be a damaging blow to the unification of the rules which was the object of signing and then enacting the Convention. Moreover, the ability of our judges to fulfill the purpose of the enactment would be restricted, and the persuasive authority of their judgments in the jurisdictions of the other contracting states would be diminished."

§91 (b) Standards for Use.

Legislative history (like vintage wine) calls for discretion. One who offers legislative materials as a guide to interpretation should show that they reveal the prevailing understanding of the delegates.[12] Cf. the Preamble §475, infra.

Of course, a statement by one delegate does not establish a prevailing viewpoint and silence following a statement does not establish assent. A response may require consultation with ministries that is not feasible during debate on this issue; objections are often withheld because further discussion seems unproductive and time consuming.

The Fothergill decision illustrated the caution that may be needed in approaching legislative history. At the Hague conference on air carrier liability, two delegates offered an amendment that would have removed the ambiguity that led to the litigation, but withdrew their amendment stating (as the minutes showed) that this was on the understanding that the existing text had the meaning expressed in their amendment. Lord Diplock’s opinion considered this legislative background "for what it [page 94] was worth" but noted that, based on his experience in such international conferences, he did "not attach any great significance" to this statement and added, "Machiavellism is not extinct at international conferences". On the other hand, most courts in the United States give great (and sometimes uncritical) weight to legislative history—an enthusiasm that, in the interest of uniformity in construing interpretation conventions, might well take into account the greater caution observed by courts in other countries.[13] In evaluating legislative history, consideration must also be given to the resistance to change that develops as the long processes of deliberation near the end. Thus, an amendment offered to clarify the text may not be accepted because some delegates believe the meaning was already adequately expressed; others would be glad for the clarification but fear that the new language would create drafting problems that could not be solved in the brief time that remains. In short, the legislators placed great stress on the words of the Convention. The only legitimate role of legislative history is to shed light on the meaning of the final text. But it would be hasty to refuse to look at the legislative history on the ground that the "meaning" of the text is "clear"; the setting in which language is used in an essential aspect of its meaning.

Decisions on Legislative History. Inter alia: GER, OLG Frankfurt a. M., 13 U 51/92, 20 April 1994 (required quality of goods), UNILEX D. 1993-21; LG Aachen, 41 O 111/95, 20 July 1995. See: Schlechtriem, Com. (1998) 63-64.

§92 [(3)] International Case Law and Scholarly Studies

Case Law. Parties to international transactions will often have a choice among the fora of different countries. The settlement of disputes would be complicated and litigants would be encouraged to engage in forum shopping if the courts of different countries persist in divergent interpretations of the Convention. The Convention’s requirement of regard for "uniformity in its application" calls for tribunals to consider interpretations of the Convention established in other countries.[page 95]

National reporters to the 1986 International Congress on Comparative Law (§88, supra ) reported substantial reliance on foreign decisions interpreting uniform laws and international conventions.[14] Use of foreign judicial decisions in the past has been inhibited by difficulties in obtaining and evaluating this material, which may be in a language unknown to counsel and the court. Special measures to meet this problem will be discussed in §93, infra . In addition, substantial aid should be provided by international scholarly writing reporting and analyzing case-law (jurisprudence) under the Convention. The widespread interest in the Convention has already generated an extensive body of international literature; scholarly writing will be stimulated further by decisions applying this uniform law.

A majority of the opinions in the Fothergill case concluded that consideration should be given to the judicial decisions (jurisprudence) in other Contracting States. The opinions suggest that a preponderant body of binding precedent in other Contracting States would be given great weight; otherwise, foreign decisions would be considered for the persuasive force of their reasoning. Lord Diplock’s opinion drew attention to the fact that in some countries the decisions of even appellate courts were not "binding." The opinions did not consider whether attention should be given to the probability that other courts would follow such decisions—a view that would conform to Oliver Wendell Holmes’s famous dictum: "The prophesies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law."[15] Indeed, since the dramatic break with tradition of 1966, the House of Lords no longer regards that it is "bound" by its own decisions; the significant point is that the likelihood of an explicit overruling is exceedingly remote. It is true that, for historical reasons, many civil law systems hold to the theory that courts are not "bound" by precedent but students of these legal systems report that court decisions—and especially a body of case law—have predictive value that is not significantly different from that in some common-law systems. For example, Ernst Rabel has remarked that, in practice, "one [page 96] must look for the difference between the German...and American systems of precedent with a magnifying glass."[16] Lord Scarman’s opinion included this strong general conclusion: "Our courts will have to develop their jurisprudence in company with the courts of other countries from case to case, a course of action by no means unfamiliar to common law judges.’"[17]

Scholarly Writing. Courts on the Continent of Europe and in the United States (inter alia) give weight to scholarly writing (doctrine) . This receptivity, at least in the United States, has responded to the wide range of materials, in addition to statutes and past decisions, that have become relevant to judicial development of the law. Although English judges have been reluctant to use scholarly writing,[18] the need for uniformity in interpreting international conventions led to a more liberal approach. In the Fothergill case all of the opinions gave careful attention (but varying weight) to scholarly writing on the Warsaw Convention. Lord Diplock’s approach was perhaps the most cautious:

"To a court interpreting the Convention subsequent commentaries can have persuasive value only: they do not come into the same authoritative category as that of the institutional writers in Scots law. It may be that greater reliance than is usual in the English courts is placed upon the writings of academic lawyers by courts of other European states where oral argument by counsel plays a relatively minor role in the decision-making process. The persuasive effect of learned commentaries, like the arguments of counsel in an English court, will depend upon the cogency of their reasoning. Those to which your Lordships have been referred contain perhaps rather more assertion than ratiocination, but for the most part support the construction favoured by your Lordships."[19]

On the other hand, the statement by Lord Scarman, quoted supra at §90, looks towards the development of a more unified international approach to the process of interpreting international conventions.[page 97]

§93 (4) Access to International Materials

UNIDROIT has performed a service to the international legal community by publishing case law interpreting important conventions that unify rules of private law.[20] At its 1988 session, UNCITRAL established procedures for gathering and disseminating decisions applying the Sales Convention and other uniform laws prepared by the Commission. Each State that is a party to the Convention is requested to designate a "national correspondent" to obtain and send to the UNCITRAL Secretariat the full text of the decisions in their original languages; the Secretariat will make these decisions accessible to any interested person.[21] (The Secretariat, on request, will send copies of the decisions on payment of the cost of this service.)

The Commission observed that the cost of translating and publishing the full texts of decisions in the six official languages of the United Nations would exceed available resources, and noted that it would be desirable for publishers in the various countries to publish the original decisions in full regardless of whether they were in one of the official languages of the United Nations. (Publishers, individually or in cooperation, may also find it practicable to publish translations of the decisions in one or more languages.)

The Commission also provided for U.N. dissemination of information about the decisions. The "national correspondents" are requested to prepare abstracts of decisions emanating from their country. These abstracts, prepared in one of the U.N. official languages, are translated by the U.N. into the other official languages and are published as part of the regular documentation of the Commission. (The volume of decisions may well call for semi-annual or quarterly interim reports; presumably arrangements can be made to transmit these reports to interested persons.) [22][page 98]

§94 B. Interpretation of the Convention to Promote Good Faith in International Trade

(1) Evolution of the "Good Faith" Provision

Paragraph (1) of Article 7 concludes with the statement that in interpreting the Convention there shall be regard for promoting "the observance of good faith in international trade"—a point that did not appear in the rules on interpretation of the other UNCITRAL Conventions. At a late stage in the preparation of the Sales Convention this language was adopted as a compromise between two divergent views: (a) Some delegates supported a general rule that, at least in the formation of the contract, the parties must observe principles of "fair dealing" and must act in "good faith"; (b) Others resisted this step on the ground that "fair dealing" and "good faith" had no fixed meaning and would lead to uncertainty.

The first important step towards a "good faith" provision was taken by the Working Group in preparing a separate Draft Convention on Formation of the Contract. Article 5 of the Draft included the following: "In the course of the formation of the contract the parties must observe the principles of fair dealing and act in good faith." In 1978 the Commission, in its final review of the draft Convention, decided that a "good faith" provision should not be confined to formation of the contract; at the same time, the Commission decided that an obligation of "good faith" should not be imposed loosely and at large, but should be restricted to a principle for interpreting the provisions of the Convention. This compromise was generally accepted and was embodied in the concluding words of Article 7(1).[23]

National legislation has imposed requirements of "good faith" that are broader than the principle of interpretation stated in Article 7(1). The (U.S.A.) Uniform Commercial Code states: "Every contract or duty within this Act imposes a duty of good faith in its performance or enforcement."[24 ][page 99]

This general requirements of "good faith" is not typical of common-law statutory drafting; the UCC at this point reveals the unstated influence of some of the civil law codes. The German Civil Code (§242) states: "The debtor is bound to effect performance according to the requirements of good faith, giving consideration to common usage." (Other examples are cited in a footnote.) And common-law jurisdictions may be increasingly receptive to such legal ideas. The Ontario Law Reform Commission, on the basis of a comparative study, concluded that a revision of the Sale of Goods Act should include a general good faith requirement.[25] As we have just seen, the Convention rejects "good faith" as a general requirement and uses "good faith" solely as a principle for interpreting the provisions of the Convention. What content should be given to "good faith" as an aid to interpretation? The Convention’s goal "to promote uniformity" should bar the use of purely local definitions and concepts in construing the international text. (See supra at §87). But this objection does not apply to "good faith" principles that reflect a consensus—a "common core" of meaning—in domestic law. One may hope that the scholarship in this area will be developed further with special reference to the application of "good faith" principles to issues that arise in international trade.[26]

§95 (2) Possible Areas for Interpretation to Promote "Good Faith"

For reasons that will be developed later, "good faith" probably would be promoted by a liberal application of provisions like Articles 19(2) and 21(2), which require a party to inform another who is known to be subject to a misapprehension. (See infra at §100) One who demands performance within an additional period (Arts. 47 & 63) may not, in good faith,[page 100] refuse to accept the performance that he requested. (See the Commentary to Art 47, infra at §291.) Delay in compelling specific performance or avoiding a contract after a market change or construing ambiguous acts as acceptance—situations that could permit a party to speculate at the other’s expense—may well be inconsistent with the Convention’s provisions governing these remedies when they are construed in the light of the principle of good faith. (See the discussion of the time for acceptance, infra at §144 and Art. 46, infra at §285.)[27] These illustrations, of course, are incomplete and tentative.

Professor Schlechtriem has suggested that "good faith in international trade" should be construed in the light of the Convention’s many references to standards of reasonableness—a standard that is so pervasive as to establish this as one of "the general principles on which [the Convention] was based".[28] What is "reasonable" can appropriately be determined by ascertaining what is normal and acceptable in the relevant trade. This approach is analogous to and is supported by Article 9, which provides that contractual obligations include "practices established by the parties and usages...in the particular trade". A similar linkage among "good faith", reasonableness and trade usage is found in (U.S.) UCC 2–103(1)(b): " ‘good faith’ in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade."

Decisions on the Obligation of "Good Faith" (Art. 7(1): ARB. Hung. C. of C., VB/94124, 17 November 1995 (expired bank g[ua]rantee was a violation of good faith). UNILEX D.1995–28.2. Cf. AUSTRALIA, CA. N.S. Wales, Renard C. v. MPW, 12 March 1992 (influence of "good faith" (CISG 7(1)) on domestic law) UNILEX D. 1992.7. See also: Klein, J., Good Faith in Int. Tr., 15 Liverpool L.R. 114–141 (1993); Schlechtriem, Com. (1998) 66–68.[page 101]

§96 C. Gap-filling: "General Principles" v. Domestic Law

(1) Evolution of the Approach to Gap-filling

Article 7 (2) addresses the following problem: A matter that is "governed by" the Convention presents a question that is not "expressly settled in it." How should such questions be decided?

Paragraph (2) was added at a late stage as a compromise between divergent views. The view that prevailed at the 1964 Sales Convention was stated as follows in Article 17 of ULIS:

"Questions concerning matters governed by the present Law which are not expressly settled therein shall be settled in conformity with the general principles on which the present Law is based."

This provision reflects the approach established for civil law codes which were designed to displace the entire body of pre-existing law. To discourage the revival of outmoded and non-uniform rules of the ancien régime, solutions must be anchored in an article of the code—an approach that led to creative extension by analogy of the code’s provisions to meet the myriad of new problems that arose during the following centuries.[29] In common law systems abrupt legal change has usually come through narrow, specific statutes that resemble islands surrounded by an ocean of case-law. On the other hand, case-law has developed in a manner that resembles the analogic development of the civil codes: the principles on which the older cases were based are enlarged or reshaped in the course of applying them to new situations.

Even ambitious legislation like the (U.S.A.) Uniform Commercial Code is not a self-contained body of law. At the outset (§1–103) this "code" states that, unless displaced by its "particular provisions", the "principles of law and equity [a phrase understood to refer to the general body of case-law]...shall supplement its provisions". The vital role of these supplemental principles in the development of the "Code" has been documented in an impressive study of over a thousand pages.[30]It is not surprising that the "general principles" provision of ULIS 17 encountered criticism in UNCITRAL. Nor were all of the critics from common law systems; delegates from some countries with codes stemming [page 102] from civil law roots had also developed traditions that emphasized legislative detail and strict construction.

In the UNCITRAL Working Group, objections to ULIS 17 that had been voiced (unsuccessfully) at the Hague Conference were pressed with added vigor: The "general principles" on which the law was based had never been articulated; ULIS 17 injected an unacceptable degree of uncertainty. Supporters of ULIS 17 replied that filling "gaps" by turning to domestic law would involve even greater uncertainty. The rules of private international law were neither clear nor uniform; hence there would be doubt and dispute over which law was applicable. In addition, the domestic law would be foreign to one of the parties, and in most cases would be unsuited to the problems of international trade. Finally, referring gap-filling to the diverse rules of domestic law would never lead to a uniform solution, whereas recourse to the general principles of the Convention in international case law would develop common answers for the questions that arise within the scope of the law.[31] In 1970 the Working Group recommended that Article 17 of ULIS be replaced by a provision that the law shall be interpreted with regard "to its international character and the need to promote uniformity" (See Art. 7(1) supra at §85). This position was maintained throughout the balance of the proceedings in UNCITRAL. The Commission rejected further proposals to include modified versions of ULIS 17 and also rejected the counter-proposals that problems resulting from "gaps" should be decided under domestic law indicated by the rules of private international law.[32] The 1980 Conference developed a compromise that became paragraph (2) of Article 7. In response to those who feared that courts might turn too quickly to national law, the first part of paragraph (2) reproduced the "general principles" rule of ULIS 17. On the other hand, in response to those who doubted that general principles of the Convention could always be found, paragraph (2) added that "in the absence of such principles" open questions are to be settled "in conformity with the law applicable by virtue of the rules of private international law."[33][page 103]

§97 (2) The Nature of "Gaps"; Solutions in Domestic Law

The Overview (Ch. 2, §18) drew attention to the inability of any statute to address and solve all the circumstances and problems that will arise. This is especially true for the 1980 Convention since it cannot be revised frequently and must embrace the gamut of transactions and conditions that will arise in a diverse and developing international economy.

Draftsmen of national codes have recognized this problem. Portalis in his preliminary discourse on the French Civil Code observed that the legislator must take "a large view of the matter" by "principles rich in implication" rather than details. "We shall leave some gaps, and they will be filled in due course by experience. National codes are created in time; indeed, people do not really create them at all."[34] This development occurred under the French Civil Code, unaided by explicit authorization to fill gaps. Other statutes have expressly granted this authority. For example, the Uniform Commercial Code states (§1–102(1)) that it is to be "liberally construed and applied to promote its underlying purposes and policies. " Under the Austrian General Civil Code "Where a case cannot be decided either according to the literal text or the plain meaning of a statute, regard shall be had to the statutory provisions concerning similar cases and to the principles which underlie other laws regarding similar matters."[35] On the other hand, in 1978 this approach was rebuffed by the House of Lords in Buchanan & Co. v. Babco Forwarding and Shipping.[36] In the Court of Appeal, Lord Denning, in construing an act of Parliament that implemented an international convention, had concluded that the legislation was subject to a "gap," and that English courts should follow the approach of courts on the Continent, including the EEC Court of Justice, and fill the gap so as [page 104] to carry out the purpose of the legislation. A majority of the House of Lords, in affirming the decision of the Court of Appeal, commented adversely on the "gap-filling" approach. The legislation in question did not contain a provision on interpretation; a court construing the Sales Convention should be led by Article 7(2), supra, to take a broader view of the process of interpretation.

§98 (3) The Area for Gap-Filling: "Matters Governed by" the Convention

(a) Areas excluded.

Article 7(2) provides for the use of general principles of the Convention only with respect to unsolved questions "concerning matters governed by this Convention." In examining Article 4 (supra at §64), we saw that the Convention governs only some of the issues that may arise in an international sale. Thus, the Convention specifically excludes issues concerning the validity of the contract (Art. 4(a)) and the effect of the contract on the property in the goods (Art. 4(b)). Nor does the Convention govern rights based on fraud or the capacity of an agent to bind the principal—vital but complex bodies of law which this Convention could neither supplant nor restate; unification in these areas must await the completion of separate conventions. (See Art. 4, supra at §65–66.) Since these areas are not "governed" by the Convention they are beyond the reach of "gap-filling" under Article 7(2).[37]

§99 (4) General Principles on which the Convention is Based: Examples and Problems

(a) Reliance on Representations of Other Party: Domestic Law ("estoppel" etc.) v. "General Principles" of Convention.

We now face a significant problem that can best be considered in a specific factual setting.

Example 7A. In a transaction governed by the Convention, Buyer ordered Type A fiberboard from Seller. After this fiberboard had arrived but before Buyer put it to use Buyer asked Seller whether the material had been tested for resistance to fire. Seller consulted its records and, by an innocent error, transmitted to Buyer the results of tests of Type B, which was fireproof. Buyer, relying on this report, used the materials in constructing a building. Thereafter, Buyer learned of Seller’s error and had to reconstruct the building. Is Seller responsible to Buyer for the added costs? [page 105]

Since Seller’s statement occurred after the making of the contract and the delivery of the goods, it might be difficult to conclude that the seller failed to "deliver goods which are of the...quality...required by the contract" (Art. 35) or (by the same token) that the buyer’s loss was "a consequence of the breach" (Art. 74). The buyer might contend that, under Article 29, the contract had been "modified" by "agreement of the parties," but not all courts would so characterize the above exchange of communications that followed the delivery of the goods. To be sure, a court might well extend the concept of "agreement" to include a supplementary representation by the seller on which the buyer relies. But this, in substance, would be an analogical extension of Article 35 to carry out the "general principle" on which this provision was based, even though the court might not refer to Article 7(2).

In the above problem should one conclude that the seller’s responsibility for his representation about the goods was not "governed" by the Convention? In this event the tribunal must seek (via the rules of private international law) some rule of domestic law dealing with responsibility for representations. In the common-law world this might lead to the doctrine of "estoppel," which bars a person from contradicting a representation on which another person has reasonably relied. If this were a transaction within the United States, "estoppel" would be available to supplement the provisions of the Uniform Commercial Code. However, in international transactions reference to domestic law has special problems—the uncertainties of the rules of private international law, the difficulty of ascertaining foreign law and the possible incongruity between pieces of domestic law and the overall plan of the Convention.

Is there a "general principle" underlying the Convention that would make one party responsible to the other for his representations that relate to the contract but are not explicitly a part of the agreement? As we have seen, the representation made in Example 7A may fall just outside Article 35, which defines the seller’s responsibility for quality. Is Article 35 based on a larger premise—that one party should be entitled to rely on expectations created by the other?

One must be cautious about such an extension of an article of the Convention. Article 35 refers to conformity with "the contract": Would application of the Article’s provisions outside the technical area of the "contract" violate a decision that the Convention should not touch non-contractual representations?

To answer this question, we need to examine other provisions of the Convention. For example, we find that Article 16(2)(b) protects a party who "has acted in reliance" on an offer in the reasonable belief that it was [page 106] irrevocable. Article 29(2) provides that when a contract in writing requires that any modification also be in writing, " a party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct ." And under Article 47, a buyer who (in effect) invites late performance by the other party must accept the invited performance. In sum, various provisions of the Convention are inconsistent with a technical and narrow view of "contract" and evince a broader view of the relationship between the parties to a sales transaction.

Our principal purpose here is not to solve Example 7A but to illustrate the problems and possibilities presented by Article 7(2). Further light may be cast on this article by considering whether other groups of provisions evince a "general principle."

§100 (b) Communications

A theme that underlies numerous articles of the Convention is the duty to communicate information needed by the other party—a recognition that the consummation of a sales transaction involves interrelated steps that depend on cooperation. Article 19(2) requires an offeror to draw the offeree’s attention to modifications in an offeree’s acceptance to which the offeror objects. Article 21(2) requires an offeror to inform an offeree of a delay in the transmission of an acceptance if the offeror concludes that the acceptance arrived too late. Article 26 provides that avoidance of a contract must be notified to the other party. Article 39(1) requires the buyer to notify the seller of defects in the goods so the seller can test the goods to ascertain whether they are defective and take steps to cure the defects. Under Article 48(2) the buyer must respond to an inquiry as to whether he will accept late performance. Article 65 requires a buyer to respond to a request for missing specifications for the goods. When the parties make a contract covering goods that are then in transit, under Article 68 the seller is obliged to disclose transit damage that has occurred. Communication of needed information is required if a party suspends performance because of impending failure of counterperformance (Arts. 71(3) & 72(2) or because of excuse arising from a supervening impediment (Art. 79(4)). And under Article 88(1), a party intending to resell goods of which the other party has failed to take possession must give reasonable notice of this intent.

Although numerous specific situations are covered by the above articles, it would have been difficult to anticipate and specify all of the circumstances in which communications are needed. These provisions may well evince a general principle calling for communication of information that is obviously needed by a trading partner in situations that are closely [page 107] analogous to those specified in the Convention.[38] (Provisions evincing a duty to cooperate are listed at §§323 and 342 (n.2).)

§101 (c) Mitigation

The Convention also includes several specific provisions that respond to the principle that one party should take steps to avoid deterioration of goods and thus avoid unnecessary hardship on the other party, even when that party has sent defective goods or otherwise has failed to perform the contract. Article 77 lays down the general rule that a party who relies on a breach of contract must take reasonable measures to mitigate the loss resulting from the breach. This general principle for the reduction of waste is applied in specific situations: The seller must take reasonable steps to preserve goods when the buyer is late in taking delivery (Art. 85), and the buyer has a similar duty to preserve non-conforming goods which he intends to reject (Art. 86). Situations may well arise that call for the application of the general principle that underlies these specific provisions.[39]

§102 (d) General Approach: Boldness v. Restraint

The above examples (§§99101) illustrate an approach that was designed to reconcile the two competing values embodied in Article 7(2): (1) That the Convention should be developed in the light of its "general principles" and (2) that this development would be subject to limits. This approach responds to the reference in Article 7(2) to the principles on which the Convention "is based" by requiring that general principles to deal with new situations be moored to premises that underlie specific provisions of the Convention. Thus, like the inductive approach employed in case law development, the first step is the examination of instances regulated by specific provisions of the Convention. The second step is to choose between these two conclusions: (a) The Convention deliberately rejected the extension of these specific provisions; (b) The lack of a specific provision to govern the case at hand results from a failure to anticipate and resolve this issue. If the latter alternative applies, the third step is to consider whether [page 108] the cases governed by the specific provisions of the Convention and the case at hand are so analogous that a lawmaker would not have deliberately chosen discordant results for the group of similar situations. In this event, it seems appropriate to conclude that the general principle embracing these situations is authorized by Article 7(2). In sum, the approach involves the analogical application of specific provisions of the Convention.[40]

The language of Article 7(2) reflects the decision to narrow the scope of ULIS 17 (§96, supra ) which authorized tribunals to find (or create) general principles to settle every problem that is not governed expressly by the Convention. More important, the approach illustrated above calls for the development of the Convention subject to the discipline imposed by analyzing the provision of the Convention and by examining the closeness of the analogy between the cases governed by those provisions and the case at hand.

Article 7(2) presents a delicate balance between (1) developing the Convention’s general principles and (2) recourse to domestic law—a choice that inevitably will be influenced by the traditions and mindset of the tribunal. As we have seen (§96), civil law practice is generally hospitable to the first alternative and common law to the second. Which is more compatible with the objectives of the Convention?

This writer, although nurtured in the common law, has come to believe that international unification calls for us to reexamine our traditional approach. Invoking domestic law under the Convention has more serious consequences than invoking common law principles to solve problems under a statute in a common law jurisdiction. Even in dealing with a statute designed to unify law among the states of a common-law country, references to general common-law principles do not seriously undermine the statute’s objective to achieve uniformity for the common law principles stem from common roots. Within the Commonwealth, respect for decisions in England and in other Commonwealth jurisdictions limits the degree of disharmony; in the United States a strong unifying influence is exerted by the periodic Restatements of the law.[41] This degree of unity is [page 109] not found among the domestic laws of the many States of diverse legal systems that have adopted the Convention. Nor will references to domestic law contribute to a body of international case-law under the Convention. Thus, a generous response to the invitation of Article 7(2) to develop the Convention through the "general principles on which it is based" is necessary to achieve the mandate of Article 7(1) to interpret the Convention with regard to "the need to promote uniformity in its application ."

In cases of doubt, a proposed application of a general principle may be tested against applicable trade usages (Art. 9, infra, at §112) and against contract practices and modern rules of law specially designed for international transactions. Later in this book, examples of modern contract practices serve to illustrate the Convention’s general rules on risk of loss (Art. 67) and on exemption from damages when performance is prevented by an impediment (Art. 79). In addition, the rules of interpretation of Article 7(1), supra, call for guidance based on the experience of other Contracting States.

In sum, a response to the Convention’s invitation to consider its "general principles" before turning to domestic law can minimize the confusion inherent in conflicts rules and avoid the uncritical and wooden application of scraps of domestic law that were developed without regard for the special needs of international trade. The "general principles" alternative offered by Article 7(2) can help the Convention, through international case law and scholarly writing to live as uniform law that responds to changing circumstances.[42] Other examples of this approach are given infra at §§148151, 156 (n. 5), 177, 342 (n. 2).

Decisions on General Principles (Art. 7(2)): (1) GER. OLG Düsseldorf, 17 U 73/93, 2 July 1993 (CISG 57(1)(a): basis for principle on place for paying) UNILEX 1993–21.  (2) FR. CA Grenoble, 23 October 1996, SCEA v. Soc. Teso; general principle deduced from Art. 57 when facts were the converse of Art. 57(1)(a) (Seller rather than buyer required to pay; see Art. 57 infra), UNILEX 1996-10.  (3) SWITZ. HG Zürich, U.HG93, 9 September 1993 (B has burden to prove lack of conformity) UNILEX D. 1993-22;  (4) ARB, Austria, Wien, SCH-4318, 15 June 1994 (estoppel- venire contra factum proprium: S’s conduct led B to believe S would not rely on B’s delay in giving notice of defects (UNILEX D. 1994-13.  (5) ARB. ICC, [page 110] Paris, 8/28/1995 (general principle on interest rate, based on UNIDROIT Principles, Art. 7.4.9.).

See also: Hellner, J., Gap-filling by Analogy, in Ramberg (ed.) Festschrift: Hjerner (Stockholm, 1990) at 219-233; Rosenberg M.N., Australia Bus. L.R. 442 (1992); Callaghan, J.J., Gap-filling: Two French Decisions, 14 JLC 183–208 (1995); Koneru, P. 6 Minn. J. Global Tr. 105–152 (1997); Volken P., Dubrovnik Lectures, 19–53; See: Schlechtriem, Com. (1998) 66–68; in general (Art. 7) id., 59–68 (Huber).

§103 D. Special Role of the Sales Convention

(1) Interpretation of the Sales Convention and the Rules on Interpretation of Treaties in the 1969 Vienna Convention

Students of public international law may wonder why this discussion of the interpretation of the Sales Convention has not given more attention to the 1969 Vienna Convention on the Law of Treaties and its important rules on the interpretation of treaties.[43] To what extent are these rules applicable to the Sales Convention?

The question calls for distinctions between different types of Conventions and, more precisely, between different parts of the same Convention. The 1969 Vienna Convention is concerned with the obligations of Contracting States to each other. The 1980 Sales Convention, of course, creates such obligations among the Contracting States—primarily to give legal effect to the rules on international sales that are set forth in Part I–III of the Convention (Arts. 1–88).

The obligations of the Contracting States to each other are centered in Part IV—Final Provisions. These include: procedures for adherence; rules on reservations whereby a Contracting State may limit its obligations under the Convention; rules governing denunciation of the Convention. All of these provisions of the 1980 Sales Convention should be construed in the light of the 1969 Vienna Convention.

Most of the provisions of the Sales Convention (Arts. 1–88; Parts I–III) deal with a very different matter—the obligations not of States [page 111] but of the parties to a contract for the sale of goods. With respect to these provisions the Sales Convention states its own rules of interpretation (Art. 7, supra). Not surprisingly, these rules call for a more flexible approach than would be acceptable for rules defining the obligations of States. This flexibility is epitomized by the fact that virtually all of the provisions of Parts I–III (Arts. 1–88) yield to the contract made by the seller and buyer; in short, the heart of the Sales Convention is the contract of sale. Moreover, as we shall see, the Sales Convention provides that (unless the parties agree otherwise) contracts between sellers and buyers may be made orally (Art. 11) and are to be interpreted against a wide range of circumstances, including negotiations, past practices and trade usages (Arts. 8(3), 9(2)). In contrast, the 1969 Vienna Treaty provides that a "treaty" must be "in written form" (Art. 2–1(a)) and lays down elaborate rules on the authority to represent a State (Arts. 7–8) and on how a State may express its consent to be bound (Arts. 11–17). Consistent with this level of formality, the rules on the interpretation of treaties (Arts. 31–33) reflect the magnitude and complexity that are associated with the obligations of States. These rules are not appropriate for sales contracts and are quite different from the rules of interpretation in Article 7 of the Sales Convention.

In sum, rules of interpretation in the 1969 Vienna Treaty are pertinent to the obligations under the 1980 Sales Convention that the Contracting States undertake to each other, but are not pertinent to the rules relating to the mutual obligations of the parties to the contract of sale.[44]

§103.1 (2) The Character and Texture of the Rules

There is perhaps one principle of statutory interpretation that has general support: One must take account of the character and texture of the law. For example, a code that lays down general principles to cover a wide variety of transactions and is expected to endure, calls for an approach very different from tax laws and similar legislation that is written in great detail and is subject to frequent legislative adjustment.[page 112]

Even international conventions differ widely in their legislative texture. As we have just seen (§103), public law conventions that seek to control the conduct of governments in sensitive areas have led to stricter rules of interpretation than uniform rules for private commercial transactions. Nor are private-law conventions all cut from the same cloth. Some deal with a narrow issue (e.g., the 1958 Convention on Recognition and Enforcement of Arbitral Awards) or with a relatively narrow and specialized field (e.g., conventions on the liability of a specific type of carrier). These specialized laws may include detailed provisions that leave little room for interpretation.

What is the character of the Sales Convention? Even here we must draw distinctions for different parts of this law have different textures providing different degrees of leeway for interpretation.

Some of the more "sharp-edged" provisions deal with the Convention’s sphere of application: E.g. Articles 1(1)(a), 2 and 5 (supra §§45, 47, 4955, 7173). In this area precise drafting and strict construction are useful: doubt about the applicability of the Convention produces uncertainty as to all of the problems governed by the Convention. Comparable precision, for the same reason, characterizes Part IV, Final Provisions (Arts. 89–101) on the date of entry into force, reservations, and the like.

Most of the rest of the Convention has a very different scope and texture. The substantive sales provisions (Parts I–III, Arts. 14–88), in nine printed pages (O.R. 179–188) state principles for resolving the wide range of problems that may arise in the making and performance of sales contracts. The Contracting States vary widely, and their international trade includes transactions of almost infinite variety:—as to types of goods (ranging from raw materials to computers), arrangement for transport, payment, documentation and compliance with government requirements at point of origin and receipt, single-delivery and long-term transactions, and so on...

This does not suggest that the international sales law could or should have been drafted with greater detail; detailed rules for some situations would have created problems of classification and of doubt about the applicability of the Convention’s general principles. See §26, supra . In addition, during the life of the Convention the problems resulting from excessive detail will increase with the development of new commodities and commercial arrangements. Such a general code has a long life expectancy. Preparing the present uniform law required over a decade; substantial world-wide adoption has required a further decade. If serious problems should develop UNCITRAL could prepare a protocol of amendment [page 113] but most, if not all, of the provisions of the present uniform law probably must serve for several decades in a world of accelerating change.

§103.2 (3) Texture of the Convention and Approaches to Interpretation

The above facts do not suggest that the domestic tribunals of the world have a free hand in adjudicating cases that are subject to the Convention. Although this uniform law (like national codes that have endured) was drafted in terms of general rules, these rules embody important choices—choices that can be appreciated fully only in the setting of the legislative history in which alternatives were proposed, discussed and rejected. Fidelity to these choices is the essence of the commitment that Contracting States make to each other: We will apply these uniform rules in place of our own domestic law on the assumption that you will do the same.

Consistent with this basic obligation of fidelity, the Convention’s general rules for a diverse, complex and developing field should not be applied narrowly but should be given full effect to achieve their underlying purpose as shown by the structure of the Convention and its legislative history.[45] At this point several of Article 7’s rules of interpretation converge: (1) Regard for the Convention’s "international character" requires sensitive response to the purposes of the Convention in the light of its legislative history rather than the preconceptions of domestic law (§88, supra); (2) Response to "the need to promote uniformity in... application ", which (together with point (1), supra ) calls for consideration of interpretations developed in other countries through adjudication (jurisprudence) and scholarly writing (doctrine) 93 supra); (3) Regard for "the observance of good faith in international trade", a principle that in conjunction with point (1), supra and point (4), infra, can resist stultification and circumvention of the Convention’s rules (§§9495, supra); and (4) Questions not expressly settled by the Convention should be answered, when possible, "in conformity with the general principles on which it is based", an approach that reinforces regard for both the Convention’s " international character" (point (1), supra) and "the need to promote uniformity in application (point (2), supra) by minimizing recourse to divergent rules of domestic law (§102, supra).[page 114]


FOOTNOTES: Chapter on Article 7

1. Paragraph (1) of Art. 7 is substantially the same as Art. 6 of the 1978 Draft Convention. Paragraph (2) was added at the Diplomatic Conference; see infra at §96. ULIS had no provision like paragraph (1); the first part of paragraph (2) is based on ULIS 17, quoted infra at §96. Paragraph (1), except for the reference to good faith, duplicates provisions in the other UNCITRAL conventions. United Nations Convention on the Limitation Period in the International Sale of Goods (1974), Art. 7, V Yearbook 210; United Nations Convention on the Carriage of Goods by Sea (1978), Art. 3 IX Yearbook 212; 27 AJCL UNICITRAL Symposium 421.

2. Sundburg, Uniform Interpretation of Uniform Law, 10 Scan. Studies 219, 221; Giles 34. See also: Kastely, Rhetorical Analysis, 8 Nw. J. Int. L. & Bus. 574 (1988); Cook, 50 U. Pitt. L.R. I (1988).

3. See Honnold, General Report, 1986 Comp. L. Cong., reproduced in substance in Freiburg Colloq. 115–147.

4. J. Honnold, Documentary History of the Uniform Law for International Sales (Kluwer, 1989, herein, "Docy. Hist." ). A Table brings together the author’s marginal references for each article. This Table (organizing over a thousand references) is supplemented by an Index that includes references to discussions that were not confined to a single provision.

5. The widespread and important use of legislative history (travaux préparatoires, or "historical" interpretation) in civil law systems is summarized, on the basis of national reports to the XIIth International Congress of Comparative Law (1986), in Honnold, General Report, 1986 Comp. L. Cong.,Freiburg Colloq. 133. See also Schlechtriem in German National Reports, 1986 Comp. L. Cong., 140–141.

6. Air France v. Saks, 470 U.S. 392, 400–405 (1985) Cf. Chan v. Korean Air Lines, 109 S.Ct. 1676 (1989). See Patterson, 22 Stanford J. Int. L. 263, 278 (1986).

7. Strömholm, Legislative Materials and Construction of Statutes, 10 Scan. Studies 173; Gutteridge 101; R. & M. Walker, English Legal System 92–93 (1976); R. Eddey, English Legal System 113–117 (1977).

8. Graveson, C. & G., 7, 10 n. 2; The (English) Law Commission, First Annual Report 1965–1966, no. 107–112; Renton et al., The Preparation of Legislation (1975) (Cmnd 6053) 135–148. The Ontario Law Reform Commission was equally divided on this point, Ont. L. Ref. Com., I Sales 29–30.

9. [1980] 2 All E. R. 696 (H. L.), [1980] 3 W. L. R. 209. The evolution during the preceding sixty years was summarized in the opinion by Lord Roskill. An important step in this development was the opinion by Lord Denning, M. R., in James Buchanan & Co. v. Babco Forwarding and Shipping [1977] Q. B. 208, [1977] I All E. R. 518 (C. A.) affirmed on other grounds [1978] A. C 141 (H. L.). The Act of Parliament involved in the Fothergill case implemented the Warsaw Convention of 1929 as amended in 1955 at the Hague.

10. There were differences among some of these four opinions as to the use and weight to be given to these three types of interpretative aids. The fifth opinion, by Lord Fraser of Tullybelton, accepted the use in this case of scholarly writing construing the original French text of the Convention. The Convention, and the Act of Parliament implementing the Convention, provided that in the event of inconsistency between the English and French texts the original French text would prevail.

11. The Vienna Treaty of 1969, although ratified by the U. K., did not govern this case since it came into force subsequent to the Warsaw-Hague provisions that were subject to interpretation. Lord Diplock noted that the Vienna Treaty "does no more than codify the already-existing public international law." The Vienna Treaty will be in force for many States before questions of interpretation arise under the 1980 Sales Convention.

12. Sundberg, supra n. 2 at 219, 237; David, Unification §281.

13. See W. R. Bishin, The Law Finders, An Essay in Statutory Interpretation, 38 S. Cal. L. Rev. 1 (1965). Caution about the value of legislative history: Graveson, C. & G., 6; Giles 40–45. For examples of the use of preparatory materials in the United States, Italy and Switzerland, see Giles 47–48.

14. See Honnold, Gen. Rep. Comp. L. Cong., —Id. Freiburg Colloq. , 121–124. For civil law systems see, e.g., reports from Quebec, Poland Bulgaria, Netherlands (no explicit use). For Commonwealth practice see reports from Australia, Canada, New Zealand. For England see the Fothergill decision infra .

15. Holmes, The Path of the Law. 10 Harv. L. Rev. 457, 461, (1897). Lord Wilberforce’s opinion doubted the value of decisions that were not made by a State’s highest court, and also mentioned the inadequate reporting of decisions in some countries. Ways to facilitate the access to international case law and to evaluate its impact on future cases are considered infra at §93.

16. Riegert, The West German Civil Code, 45 Tul. L. Rev. 69–71 (1970); von Mehren & Gordley 1135 n. 21, 1156 n. 106 & 108 (France), 1157 n. 109 (Germany); Merryman & Clark 560–562 (Colombia), 571–587 (Mexico). For an arresting suggestion that strict adherence to precedent in England responded to the need for certainty created by the lack of a statutory framework—a need not felt in codified legal systems—see Goodhart, Precedent in English and Continental Law, 197 L. Q. Rev. 40, 61–63 (1934).

17. [1980] 2 All E. R. 696, 715. Giles at 35–40 gives examples of reliance on foreign case law in the U. S. A., U. K., Switzerland, and Germany (F. R. G.).

18. See Honnold, Gen. Rep., 1986 Comp. L. Cong.—: Freiburg Colloq. 125–127, citing report by M. Clarke. Varying degrees of flexibility were reported from other parts of the Commonwealth, especially Canada.

19. [1980] 1 All E. R. 696, 708. For the reliance on scholarly writing in other countries see Honnold, General Report, 1986 Comp. L. Cong.,—, id., Freiburg Colloq. 125–127.

20. From 1956 UNIDROIT published decisions interpreting uniform laws in its Yearbook, from 1960 in Uniform Law Cases, and from 1973 in UNIDROIT’s Uniform Law Review. On the importance of such case law see 1 Zweigert & Kötz 22. On limited access to foreign case law, see Giles 35–36.

21. The channels for gathering the decisions were examined in Honnold, Gen. Rep., Comp. L. Cong.—, id. Freiburg Colloq. 128–129.

22. UNCITRAL, Report on Twenty-First Session (1988) (A/43/17), XIX YB 15–16, Ch. X, paras. 98–109. The report also noted the difficulty and importance of obtaining arbitral awards and the necessity in some cases to use anonymous extracts. See also the Note by the Secretariat (A/CN.9/312). (A plan similar to that adopted by the Commission was developed in the first edition of this work at §93.)

23. W/G 9 paras. 70–87, IX Yearbook 66–67, Docy. Hist. 298–299; Com. I, Art. 6; SR. 5 (action and discussion at the Diplomatic Conference), O. R. 254–259 Docy. Hist. 475–480.

24. (U.S.A.) UCC §1–203. In most parts of the Code "good faith" has the limited meaning of "honesty in fact in the conduct or transaction concerned" (§1–201 (19)). However, the obligation of "good faith" that is applicable to merchants in sales transactions includes "the observance of reasonable commercial standards of fair dealing in the trade" (§2–103(1)(b)). See Farnsworth, Good Faith Performance and Commercial Reasonableness Under the UCC, 30 U. Chi. L. Rev. 666 (1963); Summers, "Good Faith" in General Contract Law and the Sales Provisions of the UCC, 54 Va. L. Rev. 195 (1968); Restatement, Second of Contracts §205.

25. Ont. L. Ref. Com. I Sales 163–171; Dawson 461, 465–466, 475–479; Kessler and Fine, Culpa in Contrahendo, Bargaining in Good Faith, and Freedom of Contract: A Comparative Study, 77 Harv. L. Rev. 401 (1964); Israeli Sales Law §6; Draft, Netherlands Civil Code, Book 6, Ch. 5, Sec. 3, Art. 1 ("Reasonableness and equity").

26. See Bonell, Some Critical Reflections on the New UNCITRAL Draft Convention, (1978) II UNIDROIT Unif. L. Rev. 2, 10. Cf. Schlesinger, The Common Core of Legal Systems, Yntema Festschrift 65; Statute of the International Court of Justice, Art. 38(1)(c): the "general principles of law recognized by civilized nations"; Cohn, 23 Int. & Comp. L. Q. 520, 521, (1974). Although ULIS did not refer to "good faith" it has been suggested that a similar concept (Treu and Glauben) was one of the "general principles" invoked by ULIS 17. Dölle, Kommentar (Wahl) Art. 17 at 55–57.

27. See also Secretariat Commentary, Art. 6. Para. 3 O. R. 18 Docy. Hist. 408.

28. Schlechtriem (1986) 39. For references to reasonableness or the reasonable person see Arts. 8(2), 16(b) (reasonable reliance), 18(2) (reasonable time), 34 (unreasonable inconvenience or expense), 38(3) (reasonable opportunity for examination), 39(1) (reasonable time, 48(1) (unreasonable delay, inconvenience or expense), 48(2) (reasonable time), 49(2) (reasonable time), 60(a) (acts reasonably expected), 63(1) (reasonable time), 72 (reasonable time for notice), 75 (reasonable time and manner), 76(2) (reasonable substitute), 79(1) (reasonable expectations), 79(4) (reasonable time), 85 (reasonable steps), 86(1) (same), 86(2) (unreasonable inconvenience or expense), 88(1) (unreasonable delay), 88(2) (unreasonable expense; reasonable measures to sell).

29. See Rabel, 1 Am. J. Comp. L. 58, 60 (1952); von Mehren & Gordley 1137 at n. 35.

30. H. Hillman, J. McDonell & S. Nickles, Common Law and Equity under the Uniform Commercial Code (1985) and supplements.

31. W/G 1 paras. 56–72, I Yearbook 181–183, Docy. Hist. 19–21; W/G 2 paras. 126–137, II Yearbook 62, Docy. Hist. 68.

32. UNCITRAL X Annex I, paras. 137–147, VIII Yearbook 34–35, Docy. Hist. 327–328.

33. O. R. 255–257, Docy. Hist. 426–428.

34. See von Mehren & Gordley 54–56. Portalis’s proposal that the Code explicitly provide for application "according to equity...," rejected in France, was adopted in Louisiana. See Stone, The So-called Unprovided-for Case, 53 Tul. L. Rev. 93, 94–95 (1978).

35. Schlesinger, Comparative Law 602. The most far-reaching provision is Art. 1 of the Swiss Civil Code: In the absence of other specified sources "the judge shall decide...according to the rule which he would establish as legislator." Id. at 603; I Zweigert & Kötz (1987) 197–182. On the pressure for analogical extension of the code that results from the theory that courts may not develop the law, see Merryman, The Italian Style III; Interpretation, 18 Stanf. L. Rev. 583 (1966). For a perspective study of the conflicting "civil law" and "common law" approaches see Nickles, Problems of Sources of Law Under the UCC, 31 Ark. L. Rev. At 16–46 (1977), 31 id. 171 and 34 id. 1 (1980).

36. [1978] A.C. 141 (H.L.) affirming on different grounds [1977] Q.B. 208 (C.A.), [1977] I All E.R. 518. The case involved an Act of Parliament that implemented the CMR Convention on the liability of carriers transporting goods by road.

37. Cf. David. Unification §368 (topic outside ULIS 2.)

38. Cf. Bateson, The Duty to Co-operate, [1960] J. Bus. L. 187. For the suggestion that cooperation was one of the "general principles" invoked by ULIS 17 see: Riese, 29 Rabels Z 1, 66 (1965); Mertens & Rehbinder Art. 54 at 13. P. 218; Cohn, 23 Int. & Comp. L. Q. 520, 527 (1974)

39. National reports to the 1986 Comparative Law Congress approved most of the above general principles and suggested, in addition, (1) Action in accordance with standards of a reasonable or businesslike person; (2) The protection of reliance and (3) Preservation of the contract. See Honnold, Gen. Rep. Comp. L. Cong.,—; Freiburg Colloq. 139–140, and German National Reports 121–149 (Schlechtriem). See also Magnus, 53 Rabel’s Z at 142 (1989) (in German).

40. Hellner, Gap-filling by Analogy, Hjerner Festschrift 219. Leading scholars of statutory interpretation in a common-law setting strongly support analogical reasoning from "instances where the statute unquestionably applies". H. Hart & A. Sacks, Legal Process (Ten. ed 1958), quoted in W. Eskridge & P. Frickey, Legislation (1988), also citing L. Fuller, 71 Harv. L. Rev. 630, 662.

41. On regard for case-law in other Commonwealth jurisdictions see Honnold, Gen. Rep., Comp. L. Cong.,—, Freiburg Colloq. 121–122. On the unifying impact of the Restatements see Honnold, The Life of the Law, Ch. 4, pp. 145–183 (1964).

42. See Graveson, C. & G. 8, quoting Scarman, J.: A code must be the exclusive law within its field or otherwise it is "in danger of failing to develop or reform"; Diamond, Codification of the Law of Contract, 31 Mod. L. Rev. 361, 384 (1968).

43. Vienna Convention on the Law of Treaties (1969), U.N. Doc.A/CONF. 39/27, p.289, reprinted in 63 Am. J. Int. L. 875. The Convention’s rules on the interpretation of treaties appear in Part III, Sec. 3; at Arts, 31–33. Art. 31 was quoted supra at §90.

44. Art. 7 of the Sales Convention embodies mutual obligations of the Contracting States as to how their tribunals will construe the Convention. Hence, the 1969 Vienna Convention would be pertinent to a question concerning the construction of Art. 7, but the 1969 Convention would not govern the interpretation of the articles dealing with the obligations of the parties to the sales contract, for these articles are to be construed according to the principles (properly construed) of Art. 7. Cf. Lord Diplock in Fothergill, [1981] A.C. 251, 282–283.

45. The importance of "purposive" or "teleological" interpretation was stressed in the reports to the Twelfth International Congress of Comparative Law (supra §87). See Honnold, Gen. Rep, Comp. L. Cong.,— id., Freiburg Colloq. 138. National Reports to I.C.L. Cong.: Schlechtriem, in German National Reports, 1986 Comp. L. Cong. 140, 142; van der Velden, in Netherlands National Reports, 1986 Comp. L., Cong. 21–45.


Pace Law School Institute of International Commercial Law - Last updated February 23, 2005
Go to Entire Honnold Text || Go to Database Directory || Go to Table of Contents to Annotated Text of CISG