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Published by Manz, Vienna: 1986. Reproduced with their permission.

excerpt from

Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods

Univ. Prof. Dr. Peter Schlechtriem [*]

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IV. General Rules

A. Interpretation and Gap-Filling (Article 7)

ULIS Article 17 attempts to base interpretation and gap-filling on the general principles underlying the rules of ULIS. This provision is designed to safeguard unification of the law and to avoid a mixture of uniform law with domestic sales law, which otherwise would have resulted from interpretation and gap-filling. It is well known, however, that this provision has been extraordinarily controversial. Above all, many critics were not optimistic that jurists would be able to develop and apply general principles of a uniform sales law.

UNCITRAL, on the other hand, had accepted the goal of preserving and furthering uniformity and used the indication about the international character of the Convention as a floodgate against an all too broad recourse to domestic law. Furthermore, the requirements of good faith in international trade could also prevent an all too hasty resort to domestic regulations and legal custom. Therefore, because recourse to domestic law was believed to be more or less inappropriate for interpretation and gap-filling, within the area of sales law - the definition of which is, of course, a decisive preliminary question - the only remaining legal source was the substantive rules of the 1978 Draft Convention as interpreted, developed and supplemented on its own terms. Interpretation and gap-filling would therefore draw upon the basic underlying principles of the uniform law, as well as - in certain cases - upon special rules by way of extension or of analogy. The remark that Article 6 of the 1978 Draft Convention did not change the substance of the rules in Article 17 of ULIS is therefore probably accurate.[106]

During the discussion of Article 7 at the Vienna Conference, such remarks increased the opposition and resistance of those delegations which considered the interpretation and extension of CISG by reference to domestic rules to be a less serious alternative and, therefore, wanted to provide for recourse to domestic law in all cases of doubt, whether it be the law of the seller's place of business [107] or the law applicable by virtue of the rules of private international law.[108] The great majority of the delegates, on the other hand, perceived the possibility of recourse [page 37] to domestic law in such cases as undesirable. Some even proposed a return to (and an extension of) the formulation in Article 17 of ULIS.[109] Thanks to the German Democratic Republic's mediating proposal, the compromise formulated in Article 7(2) was passed.

The maxim laid down in this provision - to promote uniformity in the application [110] of the Convention when interpreting it - must also apply to the important preliminary question to paragraph (2), namely whether a certain matter falls within the scope of the Convention. Because the seller's responsibility to provide goods of the quality agreed upon in the contract is a matter within the realm of the Convention, domestic remedies, such as avoidance based on mistake about the quality of the goods, should not be available to the buyer, even though mistake is not expressly mentioned in the Convention.

In interpretation and gap-filling, Article 7 should thereby allow about the same possibilities as ULIS Article 17.[110a] The authoritative principles can be inferred from the individual rules themselves and their systematic context.[111] The last part of Article 7(2), though, closes off the path, which was sometimes considered for ULIS, of using a survey of comparative law to develop general principles that cannot be derived from the law itself and to use them to interpret the Convention.[112] Practically, though, this limitation serves only as a clarification, because, in the application of a uniform sales law, it is rarely possible to determine autonomous, fundamental principles on the basis of comparative analysis.

The reference to the observance "of good faith in international trade" in Article 7(1) indicates one of the general principles that must be regarded in interpreting and extending the uniform law. Whether or not effective international standards of good faith can actually be determined must be left to studies in comparative law. The principle has affected the formulation of a number of [page 38] provisions in CISG [113] and the leading commentary on CISG cites Articles 21(2) and 19(2) as likely "candidates" for an interpretation based on the principles of good faith.[113a]

There is naturally some cause for uncertainty when the principle of good faith, as embodied in the Convention, concerns only the interpretation of the Convention and not the conduct of the parties in the formation and performance of the contract or the interpretation of their intentions.[114] The UNCITRAL Working Group had discussed whether the principle should be generalized to include the conduct of the parties - an area where the principle has gained concrete recognition in ULIS Article 5(2). In Vienna, there was corresponding sentiment in connection with the treatment of Article 7. [115] Certain concerns which had already been expressed in the UNCITRAL Working Group, that such broadly formulated principles could be interpreted and applied in different ways, that domestic views about their content varied, and that sanctions were lacking, finally led to the withdrawal of these proposals. Nevertheless, even those who had previously opposed them indicated again and again that it would be desirable to observe the good faith principle.

The German jurist may regret this rejection of a "good faith rule" corresponding to § 242 of the German Civil Code in its present day meaning. However, the function of such a general clause can probably be fulfilled by the rule that the parties must conduct themselves according to the standard of the "reasonable person," which is expressly described in a number of provisions and, therefore, according to Article 7(2), must be regarded as a general principle of the Convention.[115a][page 39]

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FOOTNOTES

* The author of this book participated at the Conference as a member of the delegation from the Federal Republic of Germany. The views expressed here are personal to the author and do not necessarily represent the position of the F.R.G. or its delegation.

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106. Huber at 432; but see Bonell, Reflections at 5-9.

107. Bulgaria's proposal. See A/Conf. 97/C.1/L.16 (= O.R. 87). A unification of conflicts law was thereby proposed which, for some states, would have represented a violation of the Hague Convention on Private International Law for the Law Applicable to Sales Contracts of 1955. See A/Conf. 97/C.1/SR.5 at 6 § 30 (= O.R. 257) (discussion by the Swedish delegate).

108. This was argued by Czechoslovakia. See A/Conf. 97/C.1/L.15 (= O.R. 87).

109. See A/Conf. 97/C.1/L.59 (= O.R. 87) (Italian proposal); A/Conf. 97/C.1/SR.5 at 4 (= O.R. 255) (statements by Bonell (Italy) in the First Committee).

110. In the 1978 Draft Convention, the wording was still "to promote uniformity." In Vienna, "in its application" was removed from the phrase "In the interpretation of this Convention (and its application . . . )" on the basis of proposals by the U.S. (A/Conf. 97/C.1/L.5= O.R. 87) and France (A/Conf. 97/C.1/L.22= O.R. 87) and then inserted behind "uniformity" as an editorial correction. The change was not intended to imply a limitation.

110a. Feltham at 349; but see Bergsten/Miller at 5 ("The change in emphasis . . . is obvious").

111. Honnold, Commentary §§ 100, 101 (analogies should be possible); contra Réczei, Field of Application at 185. The preamble to the Convention, on the other hand, refers to the public international law obligations and goals of the signatory states and may not be used for the interpretation and gap-filling of the substantive legal provisions. But see Naon § 1.5 at 2.

112. But see Dölle (Wahl) Article 17 § 51 (concerning ULIS Article 17): "The reference to the general principles is to be understood to include all creative sources." See also id. § 75: "The judge can seek to fill gaps by examining the legal systems of the most important Contracting States to see if the case has been dealt with and decided" (translation). See Eörsi, General Provisions at 2-72 (discussing the danger of prompt recourse to domestic law when a general principle cannot be found).

113. See Secretariat's Commentary at 45 § 3 (catalogue).

113a. See Eörsi, General Provisions 2-7 ("an honourable burial").

114. As to this question and the opposition from the U.S. delegate, see Farnsworth, Problems at 18-19; see also Eörsi at 313.

115. Cf. A/Conf. 97/C.1/SR.5 at 8 et seq. (= O.R. 258).

115a. See also Eörsi, General Provisions at 2-9 (arguing that interpretation of the contract and of the Convention cannot be separated "since the Convention is also necessarily interpreted by the parties").

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