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Article 9. International Usages; Practices Established by the Parties

TEXT OF ARTICLE 9

(1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.

(2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.


OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

9A International usages: contracts or contract formation

9B Implied agreement on international usage; standards (art. 9(2))

9B1 Parties' knowledge or obligation to know

9B2 Observance by parties of the same type

9C Practices established by the parties (art. 9(1))

9C1 Frequency or regularity of prior contracts

9C2 Terms of prior contracts

9C3 Practices and settlements not embodied in contracts

9D Usages and practices: impact on provisions of Convention

9D1 Parties bound by applicable usages and practices (art. 9(1))

9D2 Usages impliedly made applicable to contract (art. 9(2))

9D21 Article 6: Parties may derogate from Convention

9E Other issues concerning usages or practices


DESCRIPTORS

Usages and practices


CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES

UNCITRAL has identified relevant cases in Digests containing case annotations for each article of the CISG. UNCITRAL cites 34 cases in its Digest of Art. 9 case law:

Argentina       2           European Court       1           Italy   1
Austria 5 Finland 1 Russian Federation        2
Belgium 3 France 2 Switzerland   2
China 1 Germany 7 United States   2
Denmark 1 ICC 4 TOTAL 34

Presented below is a composite list of Art. 9 cases reporting UNCITRAL Digest cases and other Art. 9 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 10 May 2002 citation reported below. Cases are coded to the UNCITRAL Thesaurus.

English texts and full-text English translations of cases are provided as indicated. In most instances researchers can also access from this list UNCITRAL abstracts and link to Unilex abstracts and full-text original-language case texts sourced from Internet websites and other data, including commentaries by scholars, to the extent available.

There are scholars who believe that there are circumstances in which the UNIDROIT Principles of International Commercial Contracts may be used to interpret or supplement this Article of the CISG. See match-up of this Article with counterpart provisions of the Principles and commentary on this subject. To the extent this reasoning fits, cases on the counterpart provisions of the UNIDROIT Principles may be relevant. To the extent available, such cases may be found on the Unilex website.
 

United States 15 April 2009 U.S. District Court [New Jersey] (San Lucia S.r.l. v. Import & Storage Services, LLC) 9D1
 

Italy 11 December 2008 Tribunale di Forli [District Court] (Mitias v. Solidea S.r.l.) [translation available]

Slovak Republic 12 November 2008 Supreme Court (Baked and confectionary goods case) 9C [translation available]

Australia 24 October 2008 Federal Court [South Australia District] (Hannaford v Australian Farmlink Pty Ltd)

Slovak Republic 19 June 2008 Supreme Court (Health care products case) 9B [translation available]

Germany 12 June 2008 Landgericht [District Court] Landshut (Metalic slabs case) 9D1 [translation available]

Netherlands 22 May 2008 Gerechtshof [Appellate Court] 's-Gravenhage (Tes Installatietechniek B.V. v. Miron N.V and R. Dillen N.V.)

Switzerland 19 May 2008 Cour supreme du canton [Appellate Court] Berne

United States 9 May 2008 U.S. District Court [Delaware] (Solae, LLC v. Hershey Canada, Inc.) 9C

Slovak Republic 30 April 2008 Supreme Court (Health care products case) 9C [translation available]

Australia 14 March 2008 Supreme Court of South Australia (Vetreria Etruscia S.r.l. v Kingston Estate Wines Pty Ltd)

Netherlands 27 February 2008 Rechtbank [District Court] Breda (Interland Chemie BV v. Tessenderlo Chemie NV)
 

Slovak Republic 25 October 2007 Regional Court [District Court] Zilina (Elastic fitness clothing case) 9C [translation available]

American Arbitration Association 23 October 2007 [Interim Award] (Macromex Srl. v. Globex International Inc.) 9C

Australia 12 October 2007 District Court of South Australia (Kingston Estate Wines Pty Ltd v Vetreria Etruscia S.r.l.)

Slovak Republic 18 June 2007 Regional Court Zilina (Baked and confectionary goods case) 9C [translation available]

Netherlands 29 May 2007 Gerechtshof [Appellate Court] 's-Hertogenbosch 9C [translation available]

Germany 17 January 2007 Oberlandesgericht [Appellate Court] Saarbrücken (Marble panel case) 9C [translation available]

Netherlands 17 January 2007 Rechtbank [District Court] Arnhem (Hibro Compensatoren B.V. v. Trelleborg Industri Aktiebolag) 9C [translation available]
 

France 22 December 2006 Tribunal de grande instance [District Court] Strasbourg (Cathode ray tube case) 9C [translation available]

Germany 23 October 2006 Landgericht [District Court] Bamberg (Plants case) [translation available]

United States 12 September 2006 Federal Appellate Court [11th Circuit Court of Appeals] (Treibacher Industrie, A.G. v. Allegheny Technologies, Inc.) 9B ; 9C

Germany 29 June 2006 Landgericht [District Court] Gera (Laser system case) 9C [translation available]

Belgium 24 April 2006 Hof van Beroep [Appellate Court] Antwerpen (GmbH Lothringer Gunther Grosshandelsgesellschaft für Bauelemente und Holzwerkstoffe v. NV Fepco International) 9D [translation available]

Russia 13 April 2006 Arbitration Award 105/2005 9B ; 9C [translation available]

United States 13 April 2006 Federal District Court [State of Washington] (Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.)

United States 7 February 2006 Federal District Court [Texas] (China North Chemical Industries v. Beston Chemical Corporation)

China February 2006 CIETAC Arbitration Award [CISG 2006/16] (Fluorite case) 9C [translation available]
 

Germany 21 December 2005 Oberlandesgericht [Appellate Court] Köln (Trade usage case) 9B ; 9C [translation available]

China 7 December 2005 CIETAC Arbitration Award [CISG/2005/05] (Heaters case) 9D [translation available]

Germany 6 December 2005 Oberlandesgericht [Appellate Court] Hamm (Used motorcar parts case) 9C [translation available]

Canada 28 October 2005 Superior Court of Justice, Ontario (Chateau des Charmes Ltd v. Sabaté USA Inc. et al.)

Austria 31 August 2005 Oberster Gerichtshof [Supreme Court] (Tantalum case) 9C [translation available]

Austria 8 August 2005 Oberlandesgericht [Appellate Court] Linz (Spacers for insulation glass case) [translation available]

Switzerland 5 July 2005 Obergericht [Appellate Court] Zug (Diesel oil case) [translation available]

United States 27 April 2005 U.S. District Court [Alabama] (Treibacher Industrie, A.G. v. TDY Industries, Inc.) 9A ; 9B ; 9C

Mexico 10 March 2005 Primer Tribunal Colegiado en Materia Civil del Primer Circuito [Appellate Court] (Kolmar Petrochemicals v. Idesa Petroquímica) 9A [translation available]

China 21 February 2005 CIETAC Arbitration Award [CISG 2005/14] (Equipment case) 9C [translation available]

Netherlands 10 February 2005 Netherland Arbitration Institute (interim award) 9C [English text]

Austria 1 February 2005 Oberlandesgericht [Appellate Court] Innsbruck (Powdered tantalum case) 9D2 [translation available]

Belgium 25 January 2005 Rechtbank van Koophandel [District Court] Tongeren (Scaforn International BV & Orion Metal BVBA v. Exma CPI SA) 9A ; 9C [translation available]
 

Austria 14 December 2004 Oberster Gerichtshof [Supreme Court] 9C [translation available]

China 2 December 2004 Higher People's Court [Appellate Court] of Jiangsu Province (China Changzhou Kairui Weaving and Printing Company v. Taiwan Junlong Machinery Company)

Belgium 11 October 2004 Hof van Beroep [Appellate Court] Ghent (NV Frans Bijttebier-Bouckaert v. BV Nooteboom International) 9C [translation available]

Switzerland 11 October 2004 Kantonsgericht [Canton Court] Freiburg 9C [translation available]

Germany 6 October 2004 Oberlandesgericht [Appellate Court] Frankfurt 9C [translation available]

Germany 27 July 2004 Landgericht [District Court] Kiel (Fat for frying case) 9D2 [translation available]

Austria 9 July 2004 Landesgericht [District Court] Innsbruck

Germany 1 June 2004 Landgericht [District Court] Saarbrücken (Pallets case) [translation available]

Italy 31 March 2004 Tribunale [District Court] Padova [translation available]

Belgium 24 March 2004 Rechtbank van Koophandel [Commercial Court] Brussel

Netherlands 17 March 2004 Rechtbank [District Court] Arnhem 9C [translation available]

Italy 25 February 2004 Tribunale [District Court] Padova [translation available]

Russia 16 February 2004 Arbitration Award 107/2002 9D2 [translation available]

Germany 30 January 2004 Oberlandesgericht [Appellate Court] Düsseldorf

Belgium 27 January 2004 Cour d'appel [Appellate Court] Liège (Reinfenrath Geflugel GmbH v. SA Herelixha) 9C [translation available]
 

Austria 17 December 2003 Oberster Gerichtshof [Supreme Court] 9C [translation available]

China 10 December 2003 CIETAC Arbitration Award [CISG 2003/04] (Agricultural tools dumped products case) 9C [translation available]

Switzerland 24 October 2003 Handelsgericht [Commercial Court] Zürich 9C [translation available]

France 10 September 2003 Cour d’appel [Appellate Court] Paris

Switzerland 4 August 2003 Bundesgericht [Federal Supreme Court] 9C [translation available]

Argentina 2 July 2003 Commercial Court of Original Jurisdiction, Buenos Aires (Arbatax S.A. Reorganization Proceeding) 9B [translation available]

United States 11 June 2003 U.S. Circuit Court of Appeals [5th Cir.] (BP Oil International v. Empresa Estatal Petroleos de Ecuador) 9B

Russia 6 June 2003 Arbitration Award No. 97/2002 9C [translation available]

Belgium 28 April 2003 Cour d’appel [Appellate Court] Liège 9C ; 9D [translation available]

Netherlands 23 April 2003 Gerechtshof [Appellate Court] 's-Gravenhage 9B [translation available]

Argentina April 2003 Juzgado Comercial [Commercial Court] Buenos Aires (Loma S.A. v. Cosvega SL)

Belgium 19 March 2003 Rechtbank van Koophandel [District Court] Veurne

Argentina 17 March 2003 Juzgado Comercial [Commercial Court] Buenos Aires (Wacker-Polymer Systems GmbH v. Glaube S.A. et al.)

Austria 27 February 2003 Oberster Gerichtshof [Supreme Court] 9B ; 9C [translation available]

Netherlands 22 January 2003 Rechtbank [District Court] Zwolle

Australia 17 January 2003 Supreme Court of Western Australia (Ginza Pte Ltd v Vista Corporation Pty Ltd) 9C

Spain 8 January 2003 Audiencia Provincial [Appellate Court] Barcelona

ICC 2003 International Court of Arbitration Case 12097 (CISG / Unidroit Principles case)
 

Russia 20 December 2002 Arbitration Court [Appellate Court] for the Volgo-Vyatsky Region 9C [translation available]

Italy 26 November 2002 Tribunale [District Court] Rimini [translation available]

Germany 25 November 2002 Oberlandesgericht [Appellate Court] Saarbrücken [translation available]

China 4 November 2002 CIETAC Arbitration Award [CISG 2002/08] (Beech log case) 9B [translation available]

Netherlands 16 October 2002 Gerechtshof [Appellate Court] 's-Hertogenbosch 9B

Netherlands 15 October 2002 Netherlands Arbitration Institute Case No. 2319 [English text]

China 9 October 2002 CIETAC Arbitration Award [CISG 2002/13] (Elevator case) 9C [translation available]

United States 21 August 2002 U.S. District Court [Southern Dist. NY] (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.) 9D1

* United States 10 May 2002 U.S. District Court [Southern Dist. NY] (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.) 9D1

Finland 12 April 2002 Hovrätt [Appellate Court] Turku 9D1 [translation available]

* United States 26 March 2002 U.S District Court [Southern Dist. NY] (St. Paul Insurance v. Neuromed) 9D2

Austria 7 March 2002 Oberlandesgericht [Appellate Court] Graz 9A [translation available]

Germany 20 February 2002 [District Court] München 9D2 [translation available]

* Belgium 18 February 2002 Rechtbank van Koophandel [District Court] Ieper 9C

Denmark 31 January 2002 Sø og Handelsretten [Maritime and Trade Court] 9D1 [translation available]
 

United States 17 December 2001 U.S. District Court [Michigan] (Shuttle Packaging v. Tsonakis) 9C

Germany 12 November 2001 Oberlandesgericht [Appellate Court] Hamm (Memory module case) 9D2 [translation available]

* Austria 22 October 2001 Oberster Gerichtshof [Supreme Court] 9E [translation available]

Belgium 3 October 2001 Rechtbank van Koophandel [District Court] Kortrijk 9C

Russia 17 September 2001 Arbitration Award No. 16/1999 9A [translation available]

United States 18 July 2001 U.S. District Court [Illinois] (Zapata v. Hearthside) 9C

Russia 30 May 2001 Arbitration Award No. 185/2000 9C [translation available]

* Belgium 25 April 2001 Rechtbank van Koophandel [District Court] Veurne 9C [translation available]

* Denmark 15 February 2001 Højesteret [Supreme Court] 9C [translation available]

Germany 14 February 2001 Oberlandesgericht [Appellate Court] Saarbrücken 9B [translation available]

Germany 31 January 2001 Landgericht [District Court] Hamburg (Frozen pork and apple blinies case) 9C [translation available]

* Belgium 29 January 2001 Rechtbank van Koophandel [District Court] Ieper
 

Finland 26 October 2000 Helsingin hoviokeus [Helsinki Court of Appeals] 9A ; 9B ; 9C ; 9D [translation available]

* Russia 6 June 2000 Arbitration award 406/1998 9B [translation available]

Belgium 13 April 2000 Rechtbank van Koophandel [District Court]

* Germany 13 April 2000 Amtsgericht [Lower Court] Duisburg 9C [translation available]

Germany 6 April 2000 Landgericht [District Court] München 9C [translation available]

Lithuania 27 March 2000 Lietuvos Apeliacinio [Appellate Court]

* Austria 21 March 2000 Oberster Gerichtshof [Supreme Court] 9D [translation available]

Russia 24 January 2000 Arbitration award 54/1999 9C [translation available]

Russia 17 January 2000 Arbitration award 28/1998 [translation available]
 

China 31 December 1999 CIETAC Arbitration Award 9A [translation available]

* France 21 October 1999 Cour d'appel [Appellate Court] Grenoble 9C [translation available]

Switzerland 5 October 1999 Obergericht [Appellate Court] Basel [translation available]

Belgium 4 October 1999 Rechtbank van Koophandel [District Court] Hasselt 9C

ICC August 1999 International Court of Arbitration, Case 9083 9D1 [translation available]

China 30 June 1999 CIETAC Arbitration Award [CISG/1999/30] (Peppermint oil case) 9A [translation available]

Russia 10 June 1999 Arbitration award 55/1998 9C [translation available]

China June 1999 PRC Arbitration award 9C [translation available]

China 21 May 1999 CIETAC Arbitration Award [CISG/1999/26] (Excavator case) 9A ; 9C [translation available]

Switzerland 8 April 1999 Handelsgericht [Commercial Court] Zürich 9C [translation available]

China 30 March 1999 CIETAC Arbitration Award [CISG/1999/16] (Flanges case) 9B [translation available]

China 30 March 1999 CIETAC Arbitration Award [CISG/1999/17] (Electric heater case) 9B [translation available]

* Germany 19 March 1999 Landgericht [District Court] Zwickau

European Court of Justice 16 March 1999 (Transporti Castelleti v. Hugo Trumpy) 9B

China 13 January 1999 CIETAC Arbitration Award [CISG/1999/05] (Latex gloves case) 9C [translation available]

ICC 1999 International Court of Arbitration, Case 9773 9D
 

Germany 29 December 1998 Hamburg Arbitration award [translation available]

China 15 December 1998 CIETAC Arbitration Award [CISG/1998/09] (Shirt case) 9A [translation available]

Germany 24 November 1998 Landgericht [District Court] Bielefeld 9C [translation available]

Switzerland 5 November 1998 Bezirksgericht [District Court] Sissach 9D [translation available]

* Austria 15 October 1998 Oberster Gerichtshof [Supreme Court] 9B ; 9D [translation available]

Germany 5 October 1998 Oberlandesgericht [Appellate Court] Hamburg 9B [translation available]

* ICC October 1998 International Court of Arbitration, Case 9333 [translation available]

Italy 7 August 1998 Corte di Cassazione [Supreme Court] 9C

* Germany 9 July 1998 Oberlandesgericht [Appellate Court] Dresden 9A ; 9C [translation available]

Russia 25 June 1998 Arbitration award 478/1996 9D2 [translation available]

United States 6 April 1998 Federal District Court [Southern Dist. NY] (Calzaturificio Claudia v. Olivieri Footwear) 9C

Austria 10 March 1998 Oberster Gerichtshof [Supreme Court] 9C [translation available]

ICC March 1998 International Court of Arbitration, Case 9117 9D1 [English text]

Spain 17 February 1998 Tribunal Supremo [Supreme Court] [3587/1996]

* Finland 29 January 1998 Helsingin hovioikeus [Appellate Court] Helsinki 9A ; 9B [translation available]

Germany 21 January 1998 Oberlandesgericht [Appellate Court] München (Insulating materials case) 9B [translation available]
 

Austria 10 December 1997 Vienna Arbitration award S 2/97 9A ; 9C [translation available]

* Switzerland 3 December 1997 Zivilgericht [District Court] Basel 9C ; 9D2 [translation available]

* ICC December 1997 International Court of Arbitration, Case 8817 9D1 [translation available]

Netherlands 7 November 1997 Hoge Raad [Supreme Court] 9C

Switzerland 26 September 1997 Handelsgericht [Commercial Court] Aargau (Cutlery case) 9C [translation available]

Germany 18 September 1997 Landgericht [District Court] Hamburg

China 5 August 1997 CIETAC Arbitration Award [CISG/1997/25] (Cold-rolled coils case) 9A [translation available]

China 31 July 1997 CIETAC Arbitration Award [CISG/1997/24] (Axle sleeves case) 9A ; 9C [translation available]

Germany 18 July 1997 Landgericht [District Court] Saarbrücken

China 25 June 1997 CIETAC Arbitration Award [CISG/1997/16] (Art paper case) 9A [translation available]

Germany 19 June 1997 Landgericht [District Court] Hamburg

* Russia 5 June 1997 Arbitration award 229/1996 9D2 [translation available]

China 7 May 1997 CIETAC Arbitration Award [CISG/1997/11] (Sanguinarine case) 9A [translation available]

Germany 17 April 1997 Landgericht [District Court] Frankenthal

China 15 April 1997 CIETAC Arbitration Award [CISG/1997/06] (Germanium case) 9A [translation available]

China 1 April 1997 CIETAC Arbitration Award [CISG/1997/02] (Fishmeal case) [translation available]

Netherlands 5 March 1997 Arrondissementsrechtbank [District Court] Zwolle 9B

Russia 21 February 1997 Arbitration award 373/1995 9C

* European Court of Justice 20 February 1997 (Mainschiffahrts-Genossenschaft v. Gravihres Rhinanes) 9D2

China 6 February 1997 CIETAC Arbitration Award [CISG/1997/38] (Silicon-carbide case) 9A [translation available]

* ICC 23 January 1997 International Court of Arbitration, Case 8611 9C [translation available]

Germany 8 January 1997 Oberlandesgericht [Appellate Court] Köln [translation available]

ICC January 1997 International Court of Arbitration, Case 8786 9C [English text]
 

Russia 25 December 1996 High Arbitration Court: Information Letter 10 9D [translation available]

China 23 December 1996 CIETAC Arbitration Award [CISG/1996/57] (Carbazole case) 9C [translation available]

China 17 December 1996 CIETAC Arbitration Award [CISG/1996/55] (Hot-rolled steel plates case) 9B [translation available]

Austria 9 December 1996 Bezirksgericht [District Court] Wels

China 17 October 1996 CIETAC Arbitration Award [CISG/1996/47] (Tinplate case) 9D [translation available]

Russia 26 September 1996 Arbitration award 433/1994 9C [translation available]

Germany 21 June 1996 Hamburg Arbitration award [translation available]

Netherlands 24 April 1996 Gerechtshof [Appellate Court] 's Hertogenbosch 9D1

Germany 17 April 1996 Landgericht [District Court] Duisburg [translation available]

Germany 28 February 1996 Landgericht [District Court] Oldenburg (Egg case) 9C [translation available]

* Austria 6 February 1996 Oberster Gerichtshof [Supreme Court] 9B ; 9D2[translation available]
 

Hungary 5 December 1995 Budapest Arbitration award Vb 94131 9C [translation available]

* Austria 9 November 1995 Oberlandesgericht [Appellate Court] Graz 9B [translation available]

Argentina 31 October 1995 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court]

* France 13 September 1995 Cour d'appel [Appellate Court] Grenoble 9C [translation available]

* Germany 5 July 1995 Oberlandesgericht [Appellate Court] Frankfurt 9B [translation available]

China 15 May 1995 CIETAC Arbitration Award [CISG/1995/09] (Copper cable case) 9B [translation available]

China 23 April 1995 CIETAC Arbitration Award [CISG/1995/07] (Australian raw wool case) 9B [translation available]

France 6 April 1995 Cour d'appel [Appellate Court] Paris 9A [translation available]

* Italy 24 March 1995 Cour di Appello [Appellate Court] Genova 9B [translation available]

China 10 March 1995 CIETAC Arbitration Award [CISG/1995/03] (Pellicle resin case) 8C [translation available]

ICC March 1995 International Court of Arbitration, Case 7645 9A ; 9B [English text]

ICC March 1995 International Court of Arbitration, Case 8213 9B [English text]

Germany 8 February 1995 Oberlandesgericht [Appellate Court] Hamm 9B [translation available]

* ICC 1995 International Court of Arbitration, Case 8324 9B ; 9D2 [translation available]
 

* Argentina 6 October 1994 Juzgado Nacional de Primera Instancia en lo Comercial [National Commercial Court of First Instance] 9D2 [translation available]

China 5 September 1994 Xiamen Intermediate People's Court Economic Chamber (Xiamen Trade v. Lian Zhong) 9D1

* Germany 6 July 1994 Landgericht [District Court] Frankfurt 9B

Netherlands 6 May 1994 Arrondissementsrechtbank [District Court] 's Hertogenbosch 9C

Argentina 18 March 1994 Juzgado Nacional de Primera Instancia en lo Comercial [National Commercial Court of First Instance]
 

China 10 July 1993 CIETAC Arbitration Award [CISG/1993/09] (Heliotropin case) 9D [translation available]

Germany 14 May 1993 Landgericht [District Court] Aachen [translation available]

Germany 8 February 1993 Landgericht [District Court] Verden

* Germany 13 January 1993 Oberlandesgericht [Appellate Court] Saarbrücken (Doors case) 9B [translation available]

ICC 1993 International Court of Arbitration, Case 6653 [translation available]
 

* Switzerland 21 December 1992 Zivilgericht [Civil Court] Basel 9C ; 9D2 [translation available]

Germany 20 November 1992 Oberlandesgericht [Appellate Court] Karlsruhe (Frozen chicken case) 9C [translation available]

Hungary 24 March 1992 Fovárosi Bíróság [Metropolitan Court] 9C

Germany 23 March 1992 Landgericht [District Court] Saarbrücken

ICC 1992 International Court of Arbitration, Case 7153 9C [translation available]
 

China 16 December 1991 CIETAC Arbitration Award [CISG/1991/05] (Cold-rolled steel plates case) 9A [translation available]

* Argentina 23 October 1991 Juzgado Nacional de Primera Instancia en lo Comercial [National Commercial Court of First Instance] 9B [translation available]

China 6 June 1991 [date claim filed] Shenzhen CIETAC Arbitration award 9A [translation available]

Argentina 20 May 1991 Juzgado Nacional de Primera Instancia en lo Comercial [National Commercial Court of First Instance] 9A [translation available]
 

* Germany 26 September 1990 Landgericht [District Court] Hamburg 9B

Austria 7 June 1990 Oberster Gerichtshof [Supreme Court] (Furniture case)
 

* China post-1989 [date claim filed] CIETAC Arbitration award (Contract #QFD890011) 9C [translation available]

ICC 1989 International Court of Arbitration, Case 5713 9B [English text]

ICC 1989 International Court of Arbitration, Case 6281


CASE DIGEST AND ANALYSIS
-   UNCITRAL's case law digest; and
-   An analysis of CISG jurisprudence

The UNCITRAL Digest of case law on the United
Nations Convention on the International Sale of Goods
[*]

A/CN.9/SER.C/DIGEST/CISG/9 [8 June 2004]
Reproduced with the permission of UNCITRAL

[Text of Article 9
Digest of Article 9 case law
-    Usages agreed to and practices established between the parties
-    Binding international trade usages (Article 9, paragraph 2)
-    Letter of confirmation, INCOTERMS and UNIDROIT Principles]
ARTICLE 9

      (1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.  

      (2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.

DIGEST OF ARTICLE 9 CASE LAW

1. This provision describes the extent to which usages and practices established between the parties are binding on the parties to the contract.[1] In doing so, it makes a distinction between usages to which the parties have agreed and the practices which they have established (paragraph 1) on the one hand, and other relevant usages which bind the parties even in the absence of any agreement (paragraph 2) on the other hand.

2. Whether the usages that may bind the parties are valid, is an issue that falls outside the Convention's scope;[2] the Convention merely deals with their applicability;[3] consequently, the validity of usages is to be evaluated on the basis of the applicable domestic law.[4] Where the usages are valid, they prevail over the provisions of the Convention, independently of whether they bind the parties pursuant to article 9(1) or article 9(2).[5]

Usages agreed to and practices established between the parties

3. Pursuant to article 9(1), the parties are bound by any usage to which they have agreed. As far as this agreement is concerned, one court pointed out that it must not necessarily be made explicitly,[6] but that it can also be made implicitly.[7]

4. That court also pointed out that the usages article 9(1) refers to do not have to be usages that are internationally accepted, unlike under article 9(2); consequently, where the parties agree on local usages, these local usages bind the parties as much as international usages agreed to by them.[8] In a different case, that same court also stated that the usages the parties agree to do not have to be widely known in order to be binding pursuant to article 9(1).[9]

5. As expressly stated in article 9(1), the parties are also bound by practices established between themselves, a principle which according to one arbitral tribunal "was extended to all international commercial contracts by the UNIDROIT Principles. Principle 1.8 provides that "the parties are bound by any usage to which they have agreed and by any practices which they have established between themselves."[10]

6. As for examples of practices established between the parties are concerned, one arbitral tribunal stated for instance that "a prompt delivery of replacement parts had become normal practice as defined by article 9(1) of the [Convention]."[11] In another case,[12] a court held that since the Italian seller had been complying with the buyer's orders for months without inquiring about the buyer's solvency, when the seller decided to assign its foreign receivables by means of a factoring contract and to suspend its business relationship with the buyer, it should have taken into account the buyer's interest; as a consequence, the court found the seller liable for abrupt discontinuance of business relations between parties bound by long-standing practices. In a different case [13] (in which the conclusion of the international sales contract was in dispute), after pointing out that the seller had not proved, as it alleged, that it had not received the orders from the buyer, that same court held that the seller could not invoke the rule laid down in Art. 18 CISG (providing that silence does not in itself amount to acceptance) because, according to the practices previously established between the parties, the seller was used to performing the orders without expressly accepting them.

7. The Convention does not state when it is possible to speak of "practices established between the parties". According to some courts, for these practices to be binding on the parties pursuant to article 9(1), it is necessary that the parties' relationship lasts for some time and that it has led to the conclusion of various contracts. One court expressly emphasized this requirement, as it stated that the practice it had to decide upon "does not establish usage in the meaning of [article 9(1)], which would require a conduct regularly observed between the parties and thus requiring a certain duration and frequency [...]. Such duration and frequency does not exist where only two previous deliveries have been handled in that manner. The absolute number is too low".[14] This rationale also underlies a decision by a different court that dismissed the seller's allegation that the indication on the invoice of the seller's bank account established a practice between the parties under which the buyer was bound to pay at the seller's bank. Although the court left open the issue of whether the parties concluded one or two different contracts for the delivery of two ship cargoes, it held that under article 9(1) of the Convention two contracts were insufficient to establish a practice between the parties. According to the court, in order for a practice between the parties to be established, a long lasting contractual relationship involving more contracts of sale between the parties is required.[15] Similarly, another court stated that one prior dealing between the parties did not lead to "practices" in the sense of article 9(1).[16] According to yet another court, however, "[i]t is generally possible that intentions of one party, which are expressed in preliminary business conversations only and which are not expressly agreed upon by the parties, can become "practices" in the sense of article 9 of the Convention already at the beginning of a business relationship and thereby become part of the first contract between the parties. This, however, requires at least (article 8) that the business partner realizes from these circumstances that the other party is only willing to enter into a contract under certain conditions or in a certain form".[17]

8. As for the burden of proof, several courts stated that it is the party alleging the existence of practices established between themselves or usages agreed upon that bears it.[18]

Binding international trade usages (Article 9(2))

9. By virtue of article 9(2), even in the absence of any agreement of the parties to that effect, the parties to an international sales contract may nevertheless be bound by specific trade usages, as long as these trade usages are usages that the parties knew or ought to have known and which in international trade are widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned. One court construed article 9(2) differently, without limiting the applicable usages to the ones that meet the aforementioned requirements. According to that court, "the usages and practices of the parties or the industry are automatically incorporated into any agreement governed by the Convention, unless expressly excluded by the parties".[19]

10. In any case, usages that are binding on the parties pursuant to article 9(2) prevail over the conflicting provisions of the Convention.[20] In case of a conflict between the usages applicable by virtue of article 9(2) and clauses contained in the contract, these clauses prevail, as the primary source of the international sales subject to the Convention is party autonomy, as can also be derived from the introductory language of article 9(2).[21]

11. As mentioned above in para. 9, in order to be binding, any usage must or ought to be known by the parties, and must be widely known in the international trade and regularly observed. According to one court this does not mean that solely international usages can bind the parties. The court stated that it is also possible that, in certain circumstances, a local usage may be applicable to the contract. This is particularly the case with respect to usage applied within local commodity exchanges, fairs and warehouses, provided that such usage is regularly observed also with respect to businesses involving foreign dealers. The Court also stated that even a local usage applied only in a particular country may be applicable to a contract involving a foreign party, provided that the foreign party does business in the particular country on a regularly basis and that it has concluded several contracts of the same manner in the same particular country.[22]

12. As far as the requirement that any usage must be known or ought to be known to the parties in order to bind them is concerned, one court [23] stated that a usage can bind a party only if it either has its place of business in the geographical area where the usage is applicable, or if the party permanently deals within the area where the usage is applicable. In an earlier decision, that court had already made a similar statement:[24] according to the court, a party to an international sales contract has to be familiar only with those international trade usages that are commonly known and regularly observed by parties to contracts of that specific branch in the specific geographic area where the party in question has his or her place of business.

13. As for the burden of proof, there is no difference between these usages and the usages agreed upon by the parties or the practices established between them:[25] the party that alleges the existence of any binding usage has to prove it, at least in those legal systems that consider the issue as being one of fact.[26] Where the party that carries the burden of proof does not succeed in proving it, the usages will not be binding. In one case this led a court[27] to find that since the buyer had not proven that an international trade usage existed that says that silence to a commercial letter of confirmation is sufficient for the contract to be concluded with the content of that letter, the contract was concluded with a different contents. In another case, failure to prove an alleged usage led a court to affirm that it had no jurisdiction; which the claimant exclusively based on a trade usage which, if it existed, would have allowed the court to hear the case.[28] In yet another case,[29] a court noted that although usual requirements for the formation of a contract under the Convention could be modified by usages, a usage to conclude contracts on the basis of rules different from those to be found in articles 14 to 24 of the Convention had not been proven, consequently the court applied the formation rules of the Convention.  Another court relied on the fact that the party alleging a trade usage by virtue of which the place of performance was located in that party's country could not prove the existence of such trade usage to state that the place of performance was in the seller's country.[30] The European Court of Justice also referred to the issue of burden of proof when stated that for silence in response to a letter of confirmation to amount to acceptance of the terms contained therein "it is necessary to prove the existence of such a usage on the basis of the criteria set out" in article 9(2) of the Convention.[31]

14. Several examples of courts resorting to usages should be mentioned. In one case,[32] an arbitral tribunal held that the revision of the price is a usage regularly observed by parties to contracts of the type involved in the particular trade (of minerals) concerned. In another case,[33] a court held that the bill of exchange given by the buyer had validly modified the contract according to article 29(1) of the Convention to the effect that the date of payment of the purchase price was postponed until the date when the bill of exchange was due. In reaching this conclusion, the court took into account the existence of an international trade usage to this effect and its relevance pursuant to article 9(2) of the Convention. In yet another case,[34] a court stated that a trade usage existed in the particular trade concerned in respect of the examination of the goods sold, according to which the buyer has to give the seller an opportunity to be present while checking the goods.

15. Several courts referred to usages to solve the issue of what interest rate should be applied to late payments. One and the same court expressly referred to international trade usages on the basis of article 9(2) of the Convention to solve the issue. In one case, the court stated that payment of interest "at an internationally known and used rate such as the Prime Rate" constituted "an accepted usage in international trade, even when it is not expressly agreed between the parties".[35] In another case, that court held the same view, but in doing so it also stated that the "Convention attributes [to international trade usages] a hierarchical position higher than that of the provisions of the Convention."[36]

Letter of confirmation, INCOTERMS and UNIDROIT Principles

16. Several cases dealt with the issue of whether silence in response to a letter of confirmation signifies agreement to the terms contained in that letter of confirmation. One court [37] stated that "due to the requirement of internationality referred to in article 9(2), it is not sufficient for the recognition of a certain trade usage if it is only valid in one of the two Contracting States. Therefore, [in order to bind the parties], the rules on commercial letters of confirmation would have to be recognized in both Contracting States and it would have to be concluded that both parties knew the consequences [...]. It is not sufficient that the trade usage pertaining to commercial letters of confirmation exists only at the location of the recipient of the letter." Since, however, the law of one of the States involved did not acknowledge the contractual effects of silence in response to a letter of confirmation, the court found that the terms contained in the letter of confirmation had not become part of the contract. In doing so, the court pointed out, however, that although there was no room for rules on silence in response to a letter of confirmation, "a letter of confirmation can have considerable importance in the evaluation of the evidence". Another court,[38] after holding that the letter of confirmation "only has contractual effect in the meaning of the Convention, if this form of contract formation can be qualified as commercial practice under article 9 of the Convention", stated that a commercial usage in the sense of article 9(2) existed, since in the countries in which the parties had their places of business "the contractual effect of commercial communications of confirmation (in domestic contractual relations) is not denied" and since the "parties recognized the legal effects of such a communication and also had to take into account that they might be held to those legal effects."[39] Yet another court rejected the idea that the aforementioned rules on the effects of silence to a letter of confirmation may be relevant where the Convention is applicable.[40]

17. One court dealt with the relationship between the article 9(2) and INCOTERMS.[41] After observing that "the aim of INCOTERMS, which stands for international commercial terms, is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade" and that "these trade terms are used to allocate the costs of freight and insurance in addition to designating the point in time when the risk of loss passes to the purchaser", the court stated that INCOTERMS are incorporated into the Convention through Article 9(2)". The court further stated that pursuant to article 9(2) of the Convention, "INCOTERMS definitions should be applied to the contract despite the lack of an explicit INCOTERMS reference in the contract"; consequently, the court held that where "a contract refers to CIF-delivery, the parties refer to the INCOTERMS",[42] even where an explicit reference to the INCOTERMS is lacking. As far as the latter issue is concerned, a similar statement can be found in a different arbitral award,[43] as well as in the decision of a State court;[44] on that occasion, the court interpreted the clause FOB in the light of the INCOTERMS, although a reference to the INCOTERMS was lacking.

18. One court held that the UNIDROIT Principles on International Commercial Contracts constitute usages of the kind referred to in article 9(2) of the Convention.[45] Similarly, an arbitral tribunal stated that they echo international trade usages under article 9(2).[46]


FOOTNOTES

* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.

[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.]

1. See also United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March - 11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, 19.

2. [AUSTRIA Oberster Gerichtshof [Supreme Court] 22 October 2001, available online at <http://cisgw3.law.pace.edu/cases/011022a4.html>].

3. [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>].

4. [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>]; CLOUT case No. 240 [AUSTRIA Oberster Gerichtshof [Supreme Court] 15 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981015a3.html>] (see full text of the decision).

5. [BELGIUM Rechtbank [District Court] Ieper 18 February 2002, available online at <http://cisgw3.law.pace.edu/cases/020218b1.html>]; [BELGIUM Rechtbank [District Court] Veurne 25 April 2001, available online at <http://cisgw3.law.pace.edu/cases/010425b1.html>]; [BELGIUM Rechtbank [District Court] Ieper 29 January 2001, available online at <http://cisgw3.law.pace.edu/cases/010129b1.html>]; [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>]; [ARGENTINA Juzgado Nacional de Primera Instancia en lo Comercial No. 10 [National Commercial Court of First Instance] Buenos Aires 6 October 1994, available online at <http://cisgw3.law.pace.edu/cases/941006a1.html>.

6. For a case in which the parties expressly chose to be bound by trade usages, see [CHINA Arbitration award Contract #QFD890011, CIETAC post-1989, available online at <http://cisgw3.law.pace.edu/cases/900000c1.html>] (in the case at hand the parties chose to be bound by a FOB clause).

7. [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>].

8. Id.

9. CLOUT case No. 240 [AUSTRIA Oberster Gerichtshof [Supreme Court] 15 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981015a3.html>] (see full text of the decision).

10. [ICC Court of Arbitration, case No. 8817 of December 1997, available online at <http://cisgw3.law.pace.edu/cases/978817i1.html>].

11. [ICC Court of Arbitration, case No. 8611/HV/JK of 23 January 1997, available online at <http://cisgw3.law.pace.edu/cases/978611i1.html>].

12. CLOUT case No. 202 [FRANCE Cour d'appel [Court] Grenoble 13 September 1995, available online at <http://cisgw3.law.pace.edu/cases/950913f1.html>] (see full text of the decision).

13. CLOUT case No. 313 [FRANCE Cour d'appel [Court] Grenoble 21 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991021f1.html>] (see full text of the decision).

14. CLOUT case No. 360 [GERMANY Amtsgericht [Lower Court] Duisburg 13 April 2000, available online at <http://cisgw3.law.pace.edu/cases/000413g1.html>] (see full text of the decision).

15. CLOUT case No. 221 [SWITZERLAND Zivilgericht [Civil Court] Basel-Stadt 3 December 1997, available online at <http://cisgw3.law.pace.edu/cases/971203s2.html>] (see full text of the decision).

16. [GERMANY Landgericht [District Court] Zwickau 19 March 1999, available online at <http://cisgw3.law.pace.edu/cases/990319g1.html>].

17. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>] (see full text of the decision).

18. CLOUT case No. 360 [GERMANY Amtsgericht [Lower Court] Duisburg 13 April 2000, available online at <http://cisgw3.law.pace.edu/cases/000413g1.html>] (see full text of the decision); CLOUT case No. 347 [GERMANY Oberlandesgericht [Appellate Court] Dresden 9 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980709g1.html>].

19. [UNITED STATES Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc. Federal District Court [New York] 10 May 2002, available online at <http://cisgw3.law.pace.edu/cases/020510u1.html>].

20. [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>]; CLOUT case No. 240 [AUSTRIA Oberster Gerichtshof [Supreme Court] 15 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981015a3.html>].

21. For this solution, see CLOUT case No. 292 [GERMANY Oberlandesgericht [Appellate Court] Saarbrücken 13 January 1993, available online at <http://cisgw3.law.pace.edu/cases/930113g1.html>] (see full text of the decision).

22. CLOUT case No. 175 [AUSTRIA Oberlandesgericht [Appellate Court] Graz 9 November 1995, available online at <http://cisgw3.law.pace.edu/cases/951109a3.html>].

23. [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>].

24. CLOUT case No. 240 [AUSTRIA Oberster Gerichtshof [Supreme Court] 15 October 1998, available online at <http://cisgw3.law.pace.edu/cases/981015a3.html>] (see full text of the decision).

25. See supra paragraph 8.

26. [AUSTRIA Oberster Gerichtshof [Supreme Court] 21 March 2000, available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>]

27. See CLOUT case No. 347 [GERMANY Oberlandesgericht [Appellate Court] Dresden 9 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980709g1.html>].

28. CLOUT case No. 221 [SWITZERLAND Zivilgericht [Civil Court] Basel-Stadt 3 December 1997, available online at <http://cisgw3.law.pace.edu/cases/971203s2.html>].

29. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>] (see full text of the decision).

30. [DENMARK Højesteret [Supreme Court] 15 February 2001, available online at <http://cisgw3.law.pace.edu/cases/010215d1.html>].

31. [ EUROPEAN COURT OF JUSTICE Mainschiffahrts-Genossenschaft eb (MSG) v. Les Gravihres Rhinanes SARL 20 February 1997, available online at <http://www.cisg.law.pace.edu/cisg/wais/db/cases2/970220eu.html>].

32. [ICC Court of Arbitration case No. 8324 of 1995, available online at <http://cisgw3.law.pace.edu/cases/958324i1.html>].

33. CLOUT case No. 5 [GERMANY Landgericht [District Court] Hamburg 26 September 1990, available online at <http://cisgw3.law.pace.edu/cases/900926g1.html>] (see full text of the decision).

34. [FINLAND Helsingfors hovrätt [Appellate Court] Helsinki 29 January 1998, available online at <http://cisgw3.law.pace.edu/cases/980129f5.html>].

35. [ARGENTINA Juzgado Nacional de Primera Instancia en lo Comercial No. 10 [National Commercial Court of First Instance] Buenos Aires 23 October 1991, available online at <http://cisgw3.law.pace.edu/cases/911023a1.html>].

36. [ARGENTINA Juzgado Nacional de Primera Instancia en lo Comercial No. 10 [National Commercial Court of First Instance] Buenos Aires 6 October 1994, available online at <http://cisgw3.law.pace.edu/cases/941006a1.html>].

37. CLOUT case No. 276 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 12 Month 2000, available online at <http://cisgw3.law.pace.edu/cases/950705g1.html>].

38. CLOUT case No. 95 [SWITZERLAND Zivilgericht [Civil Court] Basel  21 December 1992, available online at <http://cisgw3.law.pace.edu/cases/921221s1.html>].

39. Id.

40. [GERMANY Landgericht [Court] Frankfurt 6 July 1994, available online at <http://cisgw3.law.pace.edu/cases/940706g1.html>].

41. [UNITED STATES St. Paul Insurance Company et al. v. Neuromed Medical Systems & Support et al. Federal District Court [New York] 26 March 2002, available online at <http://cisgw3.law.pace.edu/cases/020326u1.html>].

42. Id.

43. [RUSSIA Arbitration award No. 406/1998 6 June 2000, available online at <http://cisgw3.law.pace.edu/cases/000606r1.html>].

44. [ITALY Corte d'appello [Appellate Court] Genova 24 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950324i3.html>].

45. [RUSSIA Arbitration award No. 229/1996 of 5 June 1997, available online at <http://cisgw3.law.pace.edu/cases/970605i1.html>].

46. [ICC Court of Arbitration, case No. 9333 of October 1998, available online at <http://cisgw3.law.pace.edu/cases/989333i1.html>].


ANALYSIS OF CISG CASE LAW

Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*]

excerpt from

The Interpretive Turn in International Sales Law:
An Analysis of Fifteen Years of CISG Jurisprudence

Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene,
Virginia Maurer and Marisa Pagnattaro

[...]

3. Importance of Trade Usage in CISG Rule Application

Articles 8 and 9 recognize the importance of trade usage in the interpretation of CISG contracts. Article 8(3) notes that in determining the parties' intent, due consideration is to be given to "usage." Article 9(2) states that the parties are bound by "a usage ... which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned."[846] The role of trade usage is a general principle that affects the application of many of the CISG's provisions. For example, national courts have excused untimely notice when a defect could only have been discovered through an inspection that is not customary in the trade concerned. As previously discussed in Part III.B.3, the courts are split in their views as to the applicability of trade usage under the CISG. The conservative view holds that a trade usage must have a distinct international character to be considered while the liberal view allows for the admission of local trade usage.

An innovative trade usage to fill in a gap in the CISG is in the area of Article 84's obligation to pay interest. It states that the seller must pay interest on price refunds.[847] However, it fails to mention any buyer's obligation to pay interest for non-payment or how the interest is to be calculated. It can be argued that its statement on interest brings the issue within the scope of the CISG. An Argentine court resorted to the concept of trade usage to fill in the gaps. "[N]otwithstanding the fact that CISG contains no express provision recognizing the payment of interest [by the buyer], [i]t was considered that payment of interest was a widely known usage in international trade."[848]

In a more sweeping acceptance of international trade usage, the court in St. Paul Insurance Co. v. Neuromed Medical Systems implied INCOTERMS into the CISG through Article 9(2).[849] It correctly avoided the temptation of finding that trade terms were not within the scope of the CISG and then applied the trade terms found in the UCC.[850] Instead, the court found that many trade terms issues were within the scope of the [page 433] CISG. It based that decision on the transfer of risk provision found in Article 67(1). It then held that "INCOTERMS are incorporated into the CISG through Article 9(2)."[851] Although this was an easy decision given the universal recognition of INCOTERMS, it is still significant because it was handed down by an American court. Furthermore, the court references German law and case precedent as well as scholarly writings on the CISG.[852] More importantly, it recognized the importance of uniformity in interpreting the CISG by using the appropriate interpretive methodology. It states that "interpretations [should be] grounded in its underlying principles rather than in specific national conventions." [853] This is a clear rejection of the homeward trend bias.

The potential use and misuse of trade usage was also demonstrated in a Swiss court decision. [854] The court used Articles 9(1) (inter-party usage) and 9(2) (international trade usage) to recognize the binding nature of a written confirmation. It creatively argued that the parties "knew or ought to have known the binding nature of such confirmations under both Austrian and Swiss law."[855] The court asserted that due to that knowledge, and that there was no other practice prevailing in the particular trade, the binding nature of a confirmation was a usage under both Articles 9(1) and 9(2).[856] Although, the court was correct in recognizing the binding nature of confirmations as a general trade usage, it is a dangerous precedent to use domestic law as a vehicle in establishing an international trade usage.

The above case and a decision of an Austrian court illustrate how the problem of homeward trend can present itself in various ways.[857] These cases demonstrate that homeward trend bias can influence the recognition of trade usage. An Austrian court held that Article 9(2) "could not be interpreted as barring the application of national or local usage in interpreting a contract."[858] This is a contradiction of Article 9(2)'s requirement that any such usage be widely known in international trade. The court's decision is reconcilable with the express mandate in Article 9(2) given the court's emphasis on the fact that the seller had done business in the country of the local usage for many years and, thus, could not have been unaware of the usage. Instead of declaring national and local usages to be generally applicable, the court should have crafted an exception based [page 434] upon the facts of the case. In short, a more specific default rule would have made local usage available to the court if the adverse party knew of its existence and knew there was no conflicting international usage.

[...]


FOOTNOTES

* For a subsequent text on this subject by these authors, see Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer & Marisa Pagnattaro, "International Sales Law: A Critical Analysis of CISG Jurisprudence", Cambridge University Press (2005) 241 p.

[...]

846. CISG, supra note 4, at art. 9(2).

847. Id. at art. 84.

848. CLOUT Case No. 21, May 20, 1991, available at <http://cisgw3.law.pace.edu/cases/910520a1.html> [English translation by Alejandra Truscello]. The court cited Article 9(2) for its application of trade usage.

849. See St. Paul Ins. Co. v. Neuromed Med. Sys., No. 00 Civ. 9344(SHS), 2002 U.S. Dist. LEXIS 5096 (S.D.N.Y. Mar. 26, 2002).

850. See UCC §§ 2-319, 2-320, 2-321, 2-322, 3-223, 2-509, and 2-510.

851. St. Paul Ins. Co., 2002 U.S. Dist. LEXIS 5096, at *9.

852. Id. at *7-8.

853. Id. at *8.

854. LZG Basel-Stadt, P4 1991.238, Dec. 21, 1992 (Switz.), CLOUT Case No. 95, available at [<http://cisgw3.law.pace.edu/cases/921221s1.html>] [English translation by Yvonne P. Salmon].

855. Id.

856. Id.

857. Id. OLG Graz, 6 R 194/95, Nov. 9, 1995, supra note 567.

858. Id.

[...]

Go to complete text of Analysis of Fifteen Years of CISG Jurisprudence


CASE ANNOTATED COMPARATIVES
-  UNIDROIT Principles
-  PECL comparative

Remarks on the Manner in which the UNIDROIT Principles
May Be Used to 1nterpret or Supplement CISG Article 9

Jorge Oviedo Albán [*]
October 2004

  1. Introduction
  2. Normative value of usages and practices
  3. Distinction between usages, practices and custom
  4. International custom
       a) A usage of which the parties knew or ought to have known
       b) A usage which in international trade is widely known to, and regularly observed
            by, parties to contracts of the type involved in the particular trade concerned
  5. Conclusion

1. Introduction

Article 9 CISG is located in Chapter II, entitled "General Provisions", of the Convention. The other provisions of the Convention included in that chapter deal with general matters, such as the interpretation of the Convention (Art. 7) and the conduct of the parties (Art. 8)

Equally, in the UNIDROIT Principles of International Commercial Contracts, Art. 1.8, which has a similar structure to that of Art. 9 CISG, is located in chapter 1, entitled "General Provisions", of the UNIDROIT Principles. Included in that chapter, equally, are similar references to rules of interpretation sources.

In an introductory way, it may be said that the recognition of the normative value of international usages and practices in contracts of international trade is a characteristic common to these two instruments of international commercial law.

2. Normative Value of Usages and Practices

Art. 9, paragraph (1), of the Convention recognizes the normative value of usages, by pointing out that "[t]he parties to a contract are bound by any usage to which they have agreed and by any practices which they have established between themselves".

Furthermore, Art. 9, paragraph (2), provides that "[t]he parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned".[1]

Art. 1.8 of the UNIDROIT Principles also refers to the normative value of usages and practices:

(1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.
(2) The parties are bound by a usage that is widely known to and regularly observed in international trade by parties in the particular trade concerned except where the application of such a usage would be unreasonable.

At first, it can be considered that the counterpart provisions acknowledge the normative value of usages and practices,[2] that is to say, the parties to the contract are bound by any relevant usages and established practices. It would be convenient to clarify those respective provisions, because other provisions of the CISG (Art. 8(3)),[3] as well as provisions of the UNIDROIT Principles (Art. 4.3 (b), (e) and (f)),[4] refer to usages and practices, in an interpretive function.

Although the counterpart articles in the CISG and the UNIDROIT Principles, to which those other provisions make reference, are apparently similar - structurally as well as linguistically - reference must be made to some possible difficulties in the interpretation of Art. 9 CISG, and to the manner in which the provision in Art. 1.8 UNIDROIT Principles may be used to assist that interpretation.

3. Distinction between Usages, Practices and Custom

Both Art. 9 of the Convention and Art. 1.8 of the UNIDROIT Principles require the interpreter to establish a distinction between usages, contractual practices and customs.

The Convention's provision makes reference, on the one hand, to established practices between the parties to the contract, and, on the other hand, to trade usages, which acquire a sense of generality.

The counterpart provision in Art. 1.8 of the UNIDROIT Principles adopts an identical way to refer to practices and usages agreed upon by the parties to the contract.

Custom can be conceived as a general and obligatory behavior for a community, confirmed by public facts, uniform in substance and reiterated in a certain place. The Italian author Domenico Barbero, affirms: "Custom is a form of production of juridical norms that consists on the general, constant repetition and uniform of a certain behavior in certain circumstances".[5]

On the contrary, in usages, the characteristics of publicity and uniformity are not present as they are in custom. These are constituted as behaviors observed by people in their contracts or in the conduct of their own business in general.

The Convention, in Art. 9, and the UNIDROIT Principles, in Art. 1.8, make reference to contractual practices and conventional usages,[6] pointing out that the parties will be bound by any usage to which they have agreed and by any practices which they have established between themselves. In other words, it is a series or a sequence of previous behaviors of the parties, related in particular to transactions carried out previously between the parties, that can be always considered obligatory for the parties in future negotiations and transactions, so that they become a rule common of behavior.

In Art. 9(1) CISG and Art. 1.8(1) UNIDROIT Principles, a distinction must be maintained between conventional usages and contractual practices.[7] The usages and practices which the parties have established between themselves can be agreed expressly or tacitly,[8] Consequently, it is the series of previous behaviors of the parties, related in particular to transactions carried out previously, that for that fact of the regularity of that practice, such practices can be always considered obligatory between themselves in future negotiations.[9]

On the other hand, Art. 9(2) CISG refers to a different category that is neither the practices nor the conventional usages mentioned in Art. 9(1). The same observation may be made in relation to Art. 1.8(2) UNIDROIT Principles. Based on analysis provided below, it is submitted that where the respective provisions make reference to a usage which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned, such reference is to the general customs of international trade.

4. International Custom

In Art. 9(2), the Convention refers to international customs – i.e., objective and international usages whose validity has not been made a pact by the parties in an expressed or tacit way.[10]

Next, reference must be made to the requirements mentioned in Art. 9(2) CISG, to highlight the differences that exist between that provision and those that in turn are established in Art. 1.8 of the UNIDROIT Principles. The initial conclusion that may be reached is that the provisions in Art. 9 CISG can be used for different conceptions, while Art. 1.8 of the UNIDROIT Principles provides a wider formula, to which one may turn for assistance in interpreting and applying Art. 9(2) CISG.

In consequence, the requirements laid down in Art. 9(2) of the Convention are:

     a) A usage of which the parties knew or ought to have known

The provisions in Art. 9(2) require that the parties to the contract indeed know and understand usages which are incorporated into the contract as custom, because the obligation such usages impose is derived from the generality of such usages. Such usages constitute a custom; thus, maintaining the distinction between usages that are particular (to the parties) and conventional usages. In many fields of the international trade – such as maritime sales, insurance, financial transactions etc. – there exist certain accepted usages that are observed and applied to contracts of the type involved in the particular trade concerned such business in spite of possible ignorance of the particular merchants or of their inclusion of such usages in like contracts.[11]

It has been pointed out that Art. 9(2) of the Convention is based on two theories that recognize custom or usages in commercial contracts in the particular trade concerned.[12]

The first theory, known as a "subjective theory", comprises usages that are applicable only when the parties have had knowledge of them; in consequence, if the usages are not known by the parties, they are not applicable to the contract.[13]

In a contrary way, pursuant to the "objective theory", certain usages that might be unknown to the parties may yet be applicable to the contract.[14]

In that sense, Art. 9(2) of the Convention, through its incorporation of the two theories of influence of trade usages in commercial contracts,[15] provides that usages of which the parties had or ought to have had knowledge prevail and are, thus, applicable to the contract.

Tribunals and courts have recognized the normative value of usages of international trade. For example, the United States Court of Appeals, Fifth Circuit has considered that: "The CISG incorporates Incoterms through article 9(2), [...] Even if the usage of Incoterms is not global, the fact that they are well known in international trade means that they are incorporated through article 9(2)".[16]

The wording of the counterpart provision in Art. 1.8 of the UNIDROIT Principles provides that "[t]he parties are bound by a usage that is widely known to a regularly observed in international trade by parties in the particular trade [...]".

It is apparent that the UNIDROIT Principles do not require that the parties to the contract knew or ought to have known the applicable usage. That is because the UNIDROIT Principles adopt an approach in which usages that are widely known and observed in trade acquire juridical value independently of the degree of knowledge of the parties to the contract; due to the wide observance of such usages, knowledge of them is presumed in the participants in international trade. The objective parameter used to determine the existence of such custom or widely observed usages in the particular trade, is the fact that they are widely and regularly observed by the participants in international trade. Note, however, the important qualification contained in Art. 1.8(2) of the UNIDROIT Principles, that the application of such usage must not be unreasonable.[17]

As such, the UNIDROIT Principles, like the Convention, refer to the requirement of generality attributed to the custom, in terms of doctrine and jurisprudence, not different national regulations.

     b) A usage which in international trade is widely known to, and regularly observed by parties to contracts of the type involved in the particular trade concerned.

In this respect, it is the requirements of generality, publicity, uniformity and reiteration in the operations of international trade. As for the requirement for usages to be widely known, it is not required that they are so known in all the commercial places; rather, they may be widely known in regional or parochial operations,[18] provided they arise from transactions in international trade. That is to say, the application of usages developed or emanating from transactions in domestic trade should be rejected as irrelevant for the purposes of international trade. In principle, only usages that are observed in international trade, not domestic, should form the source of the legal effects envisaged in Art. 9 CISG.[19]

It must be noted, however, that a local usage might perhaps be applicable in some instances, provided it is linked directly to transactions in international trade.[20]

Such extension of applicable usages is, for example, contemplated in the Official Comment on Art. 1.8 of the UNIDROIT Principles.[21]

Further support for that proposition can be found in the case law. The Court of Appeal [OLG] of Graz, Austria, 9 November 1995, held that "Art. 9(2) CISG, save a limited number of exceptions, could not be interpreted as barring the application of national or local usage in interpreting a contract even though no mention of such usage was made in the contract itself. Accordingly, a seller who has been engaging in business in a country for many years and has repeatedly concluded contracts of the type involved in the particular trade concerned is obliged to take national usage into consideration".[22]

In conclusion, regarding the interpretation of Art. 9(2) of the Convention, much doctrine as well as jurisprudence point to possible applicability of local usages, but with the provisos that have been stated above. That does not, however, mean that local usages may always be applicable to contracts for the sale of goods governed by the Convention, as it will be required that the parties to the contract had or ought to have had knowledge of usages that are widely known and regularly observed in the particular trade concerned. That last characteristic can also be given to a local usage if the parties knew of it or it is widely known and observed.

Support for that proposition can be found in the decision of the Appellate Court of Frankfurt, 5 July 1995, which held that "no contract had been concluded by means of a letter of confirmation followed by silence. Although there is an established trade usage which recognizes such a conclusion of contract by silence in the jurisdiction of the recipient's place of business, due to the international character of the CISG, regard is to be given only to trade usages that are known to the law both in the jurisdiction of the offeror and in the jurisdiction of the recipient (Art. 9(2) CISG). Moreover, the legal effects of the trade usage have to be known to both parties".[23]

In the counterpart provisions of the UNIDROIT Principles, in Art. 1.8, the wording used is wider than that of Art. 9 CISG and it does not define what is a "usage" nor does it require – as the Convention does – that the usage is either known or ought to be known to the contracting parties.

It is submitted that the UNIDROIT Principles concentrate in a wider way than the CISG does on the requirement of "generality" of the custom, whereas it seems that Art. 9(2) of the Convention restricts its approach to usages known to both parties to the contract.

As for the requirement that the usage is obligatory on the parties unless the application of this use is not reasonable, it is helpful to consider the explanation and illustration contained in the Official Comment on Art. 1.8(2) of the UNIDROIT Principles:[24]

"A usage may be regularly observed by the generality of businesspeople in a particular trade sector but its application in a given case may nevertheless be unreasonable. Reasons for this may be found in the particular conditions in which one or both parties operate and/or the atypical nature of the transaction. In such cases the usage will not be applied."

"Reasonableness" is an important concept in the Convention and it is regarded a general principle of the CISG. As a general principle of the Convention, reasonableness has a strong bearing on the proper interpretation of all provisions of the CISG.[25]

On the validity and proof of usages, the Convention does not contain any special disposition. Pursuant to Art. 4 of the Convention,[26] the matter of validity must be generally left to the norms of international private law. Therefore, reliance must be placed on private international law, the opinions of the Chamber of Commerce of the relevant place or the summaries of such usages made by specialized institutions.[27] If a party to the contract alleged the existence and applicability of a usage, he should bear the onus of proving it.[28]

Finally, applicable usages, practices and custom will be prevail over the provisions of the Convention [29] and over the UNIDROIT Principles [30] as implied terms of the contract, although they will be superseded by any contrary express contractual terms.

5. Conclusions

The counterpart provisions in the Convention and in the UNIDROIT Principles, dealing with conventional usages and practices established between the parties to the contract recognize the obligatory value of such norms on the parties, and unless the parties agree otherwise, such norms are presumed to have been incorporated by the parties into the contract.

Usages or customs are applied to contracts of sale, provided they fulfill the requirements that the usage is one which

(a)   is widely known in international trade, and
(b)   is regularly observed by parties to contracts of the type involved in the particular trade concerned.

The present comparative analysis of the counterpart provisions on usages identified several similarities in structure and application but also some distinctions in the wording and approach adopted in the respective instruments.


FOOTNOTES

* Lawyer (J.D.), Javeriana University (Bogotá D.C. - Colombia). Specialist in Commercial Law Javeriana University. Professor of Contracts and Commercial Law at University La Sabana (Bogotá D.C. - Colombia). He has been Lecturer in Colombian and other international universities. Author of publications on International Commercial Law in Argentina, Spain, Colombia, Peru, Mexico, and the United States.

1. Art. 9(1) and 9(2) CISG. For relevant commentary in Spanish and in English, see the following selection: OVIEDO ALBÁN, J., "El sistema de fuentes del contrato de compraventa internacional de mercaderías", in Estudios de Contratación Internacional. Régimen uniforme e internacional privado. Pontificia Universidad Javeriana, Facultad de Ciencias Jurídicas, Bogotá D.C. - Colombia, 2004, pp. 221- 304. SCHLECHTRIEM, P., Uniform Sales Law - the U.N. Convention on Contracts for the International Sale of Goods, Manz, Vienna, 1986, pp. 39 - 42. PENDON MELENDEZ, M.A., Comentario al artículo 1.8, in: Comentario a los Principios de Unidroit para los Contratos del Comercio Internacional. MORÁN BOVIO, D., (Coordinator), Thomson Aranzadi, segunda edición, Elcano Navarra, 2003, pp. 86- 93. OVIEDO ALBÁN, J., La costumbre en la compraventa internacional de mercaderías (comentarios a los artículos 8(3) y 9 de la Convención de Viena de 1980 [Custom in the International Sale of Goods (Commentary on Arts. 8.3 and 9 of the Vienna Convention of 1980)]. Revista de Derecho Internacional y del MERCOSUR. La Ley, Buenos Aires - Argentina, año 7 nº 3, 2003, pp. 17 - 37. GOLDSTAJN, A., "Usages of Trade and Other Autonomous Rules of International Trade According to the UN (1980) Sales Convention", in SARCEVIC P. & VOLKEN P., eds., International Sales of Goods: Dubrovnik Lectures, Oceana (1986) Ch. 3, 55- 110.

2. "The so called 'normative' usages were extremely controversial. According to the German understanding, their validity is not based on the parties' agreement": SCHLECHTRIEM, P., op. cit., p. 39. See GARRO, A. and ZUPPI, A., Compraventa Internacional de Mercaderías, Ediciones La Rocca, Buenos Aires, Argentina, p. 61.

3. Art. 8(3) CISG provides: "In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties."

4. Art. 4.3 of the UNIDROIT Principles, located in Chapter 5 and entitled "Interpretation" provides:

"In applying Article 4.1 [interpretation of the intention of the parties] and 4.2 [interpretation of the conduct of the parties], regard shall be had to all the circumstances, including […] (b) practices which the parties have established between themselves; […] (e) the meaning commonly given to terms and expressions in the trade concerned; (f) usages."

5. BARBERO, D., Sistema del derecho privado. I. Ediciones Jurídicas Europa América, Buenos Aires, 1967, p. 92.

6. ILLESCAS ORTIZ, R. and PERALES VISCASILLAS, M.del P., Derecho Mercantil International, El derecho uniforme, Universidad Carlos III de Madrid, Editorial Centro de Estudios Ramón Areces S.A., Madrid, 2003, p. 125. See: ICC Arbitration Award 8611/HV/JK of 23 January 1997: "Nevertheless, regarding the relationship between the parties, a prompt delivery of replacement parts had become normal practice as defined by Art. 9(1) of the CISG by which the [seller] was bound". Abstract available at Unilex Database. Case presentation and English translation available at <http://cisgw3.law.pace.edu/cases/978611i1.html>.

7. See ILLESCAS ORTIZ, R. and PERALES VISCASILLAS, op. cit. See official Comment on Art. 1.8 of the UP, available at <http://www.cisg.law.pace.edu/cisg/principles/uni9.html>. It is helpful to consider the explanation contained in the Official Comment on Art. 1.8 of the UNIDROIT Principles:

"2. Practices established between the parties

A practice established between the parties to a particular contract is automatically binding, except where the parties have expressly excluded its application. Whether a particular practice can be deemed to be "established" between the parties will naturally depend on the circumstances of the case, but behaviour on the occasion of only one previous transaction between the parties will not normally suffice".

"3. Agreed usages

By stating that the parties are bound by usages to which they have agreed, para. (1) of this article merely applies the general principle of freedom of contract laid down in Art. 1.1. Indeed, the parties may either negotiate all the terms of their contract, or for certain questions simply refer to other sources including usages. The parties may stipulate the application of any usage, including a usage developed within a trade sector to which neither party belongs, or a usage relating to a different type of contract. It is even conceivable that the parties will agree on the application of what are sometimes misleadingly called usages, i.e. a set of rules issued by a particular trade association under the title of "Usages", but which only in part reflects established general lines of conduct".

8. CARLSEN, A. "Remarks on the Manner in which the PECL may be used to Interpret or Supplement Art. 9 CISG, available online at <http://cisgw3.law.pace.edu/cisg/text/peclcomp9.html#er>. See China post-1989 CIETAC Arbitration proceedings (Contract #QFD890011), translation available online at <http://cisgw3.law.pace.edu/cases/900000c1.html>; Austria 21 March 2000 Oberster Gerichtsfhof [Supreme Court], presentation available online at <http://cisgw3.law.pace.edu/cases/000321a3.html>. Case Law on UNCITRAL Texts (CLOUT) abstract no. 425.

9. PERALES VISCASILLAS, M. del P., La formación del contrato en la compraventa internacional de mercaderías, Tirant Lo Blanch, Valencia, 1996, p. 81. "The Convention does not state when it is possible to speak of "practices established between the parties". According to some courts, for these practices to be binding on the parties pursuant to article 9(1), it is necessary that the parties' relationship lasts for some time and that it has led to the conclusion of various contracts. One court expressly emphasized this requirement, as it stated that the practice it had to decide upon "does not establish usage in the meaning of [article 9(1)], which would require a conduct regularly observed between the parties and thus requiring a certain duration and frequency [...]. Such duration and frequency does not exist where only two previous deliveries have been handled in that manner. The absolute number is too low". The UNCITRAL Digest of Case Law on the United Nations Convention on the International Sale of Goods. A/CN.9/SER.C/DIGEST/CISG/9 [8 June 2004], available online at <http://cisgw3.law.pace.edu/cisg/text/anno-art-09.html#udfn6>. See relevant case law:

    -     Germany 13 April 2000 Amtsgericht [Lower Court], case presentation and English translation available online at <http://cisgw3.law.pace.edu/cases/000413g1.html>, CLOUT abstract no. 360;
 
    -     Austria 6 February 1996 Oberster Gerichtshof [Supreme Court], case presentation and English translation at <http://cisgw3.law.pace.edu/cases/960206a3.html>, CLOUT abstract no. 176: "The parties had initially intended to enter into a "basic agreement", which would contain the general conditions of the seller and would constitute the trade usages that would govern the transactions between the parties, but could not reach an agreement. The draft of the "basic agreement" stated that all orders should be in writing. However, the seller could not prove that the "basic agreement" nor the general conditions had been made known to the buyer". In this case the Court considered that preliminary business conversations can become practices according with article 9 CISG. The court found that the parties could be bound by any trade practices or usage established between themselves (article 9(1) CISG). In such instances, article 9(1) CISG must be interpreted in the light of article 8(1) CISG to the effect that a party must have known of the intent of the other party.

10. See CALVO CARAVACA, A.L., "Comentario, Artículo 9", in DÍEZ PICAZO Y PONCE DE LEON, L., La compraventa internacional de mercaderías. Comentario de la Convención de Viena. Civitas, Madrid, 1998, p. 138.

11. See United States 10 May 2002 Federal District Court [New York] (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.), case presentation available at <http://cisgw3.law.pace.edu/cases/020510u1.html>, where the court stated, in para 25: "The usages and practices of the parties or the industry are automatically incorporated into any agreement governed by the Convention, unless expressly excluded by the parties. CISG Art. 9."

12. See CARLSEN, A., op. cit.

13. Ibid.

14. "According to the subjective theory, usages unknown to either party are not applicable. Contrary hereto is the objective theory, whereby usages are applicable if they represent a legal norm. According to the objective theory, usages unknown to both parties may be applicable to an agreement. Both theories agree that the usage must be so widespread and widely recognized that businesspersons knew or ought to have known of it." CARLSEN, op. cit.

15. See CARLSEN, op. cit.; GARRO, A., op. cit.; ZUPPI, A.L., op. cit., pp. 61-62.

16. United States 11 June 2003 Federal Appellate Court [5th Circuit] (BP Oil International v. Empresa Estatal Petroleos de Ecuador) available online at <http://cisgw3.law.pace.edu/cases/030611u1.html>, where the court held, at III. B. that "[t]he CISG incorporates Incoterms through article 9(2) [...]. Even if the usage of Incoterms is not global, the fact that they are well known in international trade means that they are incorporated through article 9(2)." The judgment, at footnote 9, also cites FOLSOM, R et al.: "Incoterms could be made an implicit term of the contract as part of international custom. Courts in France and Germany have done so, and both treaties and the UNCITRAL Secretariat describe Incoterms as a widely-observed usage for commercial terms". FOLSOM, R. GORDON, M., SPANOGLE, J. International Business Transactions, Second Edition, West Group, St. Paul Minn, 2001, p. 72.

See also United States 26 March 2002 Federal District Court [New York] (St. Paul Guardian Insurance Company et al. v. Neuromed Medical Systems & Support et al.), available online at <http://cisgw3.law.pace.edu/cases/020326u1.html>, where the court concluded that the risk of loss passed to the buyer upon delivery to the port of shipment by virtue of the CIF delivery term. The court found that the International Chamber of Commerce’s 1990 CIF Incoterm governed by virtue of article 9(2) CISG. The court also noted that German courts apply the Incoterm as a commercial practice with the force of law: CLOUT abstract no. 447, prepared by WINSHIP, P.

17. Art. 1.8(2) of the UNIDROIT Principles. See also text accompanying notes 24 and 25, infra.

18. See PERALES VISCASILLAS, M. del P., 1996, op. cit., p. 84.

19. See FOLSOM, R.; GORDON, M. W., SPANOGLE, J. A., International Business Transactions In a Nut Shell, West Group, St. Paul Minn, 2000, p. 62.

20. See Austria 21 March 2000 Oberster Gerichtshof [Supreme Court], case presentation available at <http://cisgw3.law.pace.edu/cases/000321a3.html>, CLOUT abstract no. 425, prepared by NIEDERBERGER, S.: "In the sense of article 9(2) a usage is widely known and regularly observed when it is recognized by the majority of persons doing business in the same field. To be applicable such usages must be known or at least should have been known by the parties having their place of business in the area of the usages. The Supreme Court affirmed the findings of the court of first instance, noting that since the plaintiff in its acceptance of the order expressly stated the applicability of the "Tegernseer Gebräuche" and had delivered wood to the defendant before, the defendant must have known these usages". See also "Editorial remarks", excerpt from analysis of Austrian case law by Willibald Posch & Thomas Petz, "Austrian Cases on the UN Convention on Contracts for the International Sale of Goods", 6 Vindobona Journal of International Commercial Law and Arbitration (2002) 1-24, at 10: Usages and practices. "In [this] decision on the relationship of trade usages and CISG, the Austrian Supreme Court had the opportunity to decide on the merits of the case. [G]enuine domestic usages for the trade of timber, the ‘Tegernsee Usages’, were at stake. The Austrian Supreme Court held that these Bavarian usages prevailed over the provisions of CISG, since it had been established by the Court of First Instance that these usages were widely known to and regularly observed by parties in cross-border timber trade between Austria and Germany."

21. See Official Comment on Art. 1.8 of the UNIDROIT Principles, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni9.html#official>.

22. Austria 9 November 1995 Oberlandesgericht [Appellate Court] Graz, case presentation and English translation available at <http://cisgw3.law.pace.edu/cases/951109a3.html>: "In remanding the case to the court of first instance, the Court of Appeal held that article 9(2) CISG, save a limited number of exceptions, could not be interpreted as barring the application of national or local usage in interpreting a contract even though no mention of such usage was made in the contract itself. Accordingly, a seller who has been engaging in business in a county for many years and has repeatedly concluded contracts of the type involved in the particular trade concerned is obliged to take national usage into consideration". CLOUT abstract no.175.

23. Germany 5 July 1995 Oberlandesgericht [Appellate Court] Frankfurt, case presentation and English translation available at <http://cisgw3.law.pace.edu/cases/950705g1.html>.

See also PERALES VISCASILLAS, M. del P., "Tratamiento jurídico de las cartas de confirmación en la Convención de Viena de 1980 sobre Compraventa Internacional de Mercaderías", available online at <http://cisgw3.law.pace.edu/cisg/biblio/confirma.html>.

24. See Official Comment on Art. 1.8(2) of the UNIDROIT Principles, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni9.html#official>. Comment 5. The following illustration of the comment is offered, ibid.

A usage exists in a commodity trade sector according to which the purchaser may not rely on defects in the goods if they are not duly certified by an internationally recognized inspection agency. When A, a buyer, takes over the goods at the port of destination, the only internationally recognized inspection agency operating in that port is on strike and to call another from the nearest port would be excessively costly. The application of the usage in this case would be unreasonable and A may rely on the defects it has discovered even though they have not been certified by an internationally recognized inspection agency.

25. "Reasonableness" is an important concept in the Convention; "reasonableness" is specifically mentioned in numerous provisions of the CISG and it is regarded a general principle of the CISG, see KRITZER, A.H., "Overview Comments on Reasonableness – A General Principle of the CISG", available online at <http://cisgw3.law.pace.edu/cisg/text/reason.html#overv>. See Art. 7(2) CISG, which contains the built-in interpretation mechanism of the Convention; see also relevant scholarly writing on the proper interpretation of Art. 7 CISG, presentation available online at <http://cisgw3.law.pace.edu/cisg/text/e-text-07.html>.

26. See Article 4 CISG, which states: style="mso-spacerun: yes">  "[...] except as otherwise expressly provided in this Convention, [the CISG] is not concerned with: (a) the validity of the contract or of any of this provisions or of any usage [...]" (emphasis added).

27. See FERNÁNDEZ DE LA GÁNDARA, L., CALVO CARAVACA, A.- L., "El contrato de compraventa internacional de mercaderías", in Contratos Internacionales, CALVO CARAVACA, A.L.; FERNANDEZ DE LA GÁNDARA, L. (Directors), BLANCO MORALES LIMONES, P., (Coordinator), Tecnos, Madrid, 1999, pp. 187-188.

28. Germany 9 July 1998 Oberlandesgericht [Appellate Court] Dresden, case presentation and English translation available at <http://cisgw3.law.pace.edu/cases/980709g1.html>, where the court held that the buyer did not prove that there was a usage known in international trade whereupon silence to a commercial letter of confirmation amounted to consent (Article 9 CISG)". CLOUT abstract no. 347.

29. See FOLSOM, GORDON, SPANOGLE, op. cit., pp. 13-14, where the authors state: "[I]t should be noted that, although CISG gives wide recognition to "party autonomy" (the ability of the parties to determine the terms of their deal), in Article 6 it only recognizes the ability of the parties to exclude the Convention".

30. See Official Comment on Art. 1.8(2) of the UNIDROIT Principles, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni9.html#official>. Comment 6:

Both courses of dealing and usages, once they are applicable in a given case, prevail over conflicting provisions contained in the Principles. The reason for this is that they bind the parties as implied terms of the contract as a whole or of single statements or other conduct on the part of one of the parties. As such, they are superseded by any express term stipulated by the parties but, in the same way as the latter, they prevail over the Principles, the only exception being those provisions which are specifically declared to be of a mandatory character.

PECL COMPARATIVE

Remarks on the manner in which the PECL may
be used to interpret or supplement Article 9 CISG

Anja Carlsen [*]
August 2002

      1. General scheme of Article 1:105 PECL and Article 9 CISG
      2. Practices and usages
      3. Differences in the scope of Article 9 CISG and Article 1:105 PECL

(a) Theories of influence of trade usages in commercial contracts
(b) Practices and usages agreed upon by the parties
(c) Practices and usages not explicitly agreed upon by the parties
(d) Newcomers to the market
(e) Examples of other provisions in the CISG referring to usages or practices
      4. Conclusions

1. General scheme of Article 1:105 PECL and Article 9 CISG

The structure and contents of Article 1:105 PECL and Article 9 CISG are similar. The first paragraph of each article deals with the binding effect of usages and practices which are agreed upon by the parties. The second paragraph of Article 9 CISG and Article 1:105 PECL deals with the binding effect of usages not agreed upon by the parties, but which are nevertheless binding due to their general applicability [1] or because the parties implicitly have agreed upon a usage.[2]

Practices and usages will, when applicable to the contract, set aside rules of law of the CISG and provisions of the PECL, which would otherwise apply.[3] However, under the PECL, practices and usages are only applicable if they do not violate mandatory rules of the law applicable to the contract; and under the CISG, usages can be overridden in accordance with its Article 4(a) validity provision.[4]

2. Practices and usages

Neither Article 9 CISG nor Article 1:105 PECL, defines the terms "usage" and "practice." Therefore, what ultimately constitutes a usage or a practice in CISG and PECL is to be decided by national courts or by arbitral tribunals.[5]

The Secretariat Commentary [6] on Article 8 of the 1978 Draft of the CISG does not include a definition of the terms "usage" and "practice." However, the Commentary to Article 1:105 PECL defines the term "practice" as previous conduct to a particular transaction or a particular kind of transaction between the parties that may be regarded as a common understanding.[7] Furthermore, the Commentary to Article 1:105 PECL defines the term usage as a course of dealing or line of conduct, which is and for a certain period of time has been generally adopted by those engaged in the trade or in a particular trade.[8]

As the articles of CISG and PECL apply the same terms, the definition of the terms usages and practices in the Commentary to Article 1:105 PECL may aid in defining the terms practice and usage in the CISG. The definition of the terms practice and usage in the Commentary to Article 1:105 PECL is in accord with the definition of the said terms proposed by leading scholars on the CISG.[9]

3. Differences in the scope of Article 9 CISG and Article 1:105 PECL

(a) Theories of influence of trade usages in commercial contracts [10]

Article 9 CISG is based on two theories describing the influence of trade usages in commercial contracts. The first is the subjective theory whereby usages may only be applicable if the parties have agreed to them. According to the subjective theory, usages unknown to either party are not applicable. Contrary hereto is the objective theory, whereby usages are applicable if they represent a legal norm. According to the objective theory, usages unknown to both parties may be applicable to an agreement. Both theories agree that the usage must be so widespread and widely recognized that businesspersons knew or ought to have known of it.[11]

Article 9(2) CISG represents a compromise between the subjective and the objective theory.[12] During the preparation of CISG, delegates from Socialist countries and developing countries were especially opposed to accept usages based only on their objective normative power since most usages in international trade have their origin in the industrial countries of the Western world.[13]

Since the PECL is intended to be applied as general rules of contract law in the European Union,[14] these concerns were not brought up during the drafting of Article 1:105 PECL. Therefore, the PECL provisions apply the objective theory.

(b) Practices and usages agreed upon by the parties

The wording of Article 9(1) CISG and that of Article 1:105(1) PECL are identical. Both provisions deal with the usages and practices which the parties – expressly or tacitly [15] - have established between them. Such practices and usages are binding upon the parties.[16]

(c) Practices and usages not explicitly agreed upon by the parties

Contrary to Article 9(1) CISG and Article 1:105(1) PECL, there are notable differences in the wording of Article 9(2) CISG and Article 1:105(2) PECL.

According to Article 1:105(2) PECL, the parties will be bound by a usage which would be considered applicable by persons in the same situation as the parties, provided that the usage is not unreasonable and is consistent with the express terms of the agreement.

Contrary hereto, Article 9(2) CISG sets forth two requirements for a usage to be considered as having been made impliedly applicable to a given contract. Firstly, a usage only becomes binding upon the parties if the parties “knew or ought to have known” of the usage. Secondly, a usage only becomes binding to the parties if the usage "in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned."[17]

The requirement of “known or ought to have known” in Article 9(2) CISG entails that there should be an effective link between the application of the usage and the parties’ intention.[18] By contrast, pursuant to Article 1:105(2) PECL, a usage may be binding upon the parties even without such link to the parties’ intentions, provided that the usage would be considered applicable by persons in the same situation as the parties.[19]

Although these articles appear to set forth different requirements, the determining factor in Article 9(2) CISG will often be whether the usage is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.[20] As the criterion set forth in Article 9(2) CISG is similar to the wording of Article 1:105(2) PECL, Article 9(2) CISG may logically be interpreted in accordance with the criterion set forth in Article 1:105(2) PECL.

According to its wording, Article 9(2) CISG applies to international usages only [21] whereas Article 1:105 PECL applies to local, national, and international usages.[22] Although Article 9(2) CISG applies to international usages only, regional or national usages may be applicable under the CISG if the usage is regularly observed in international transactions and a large part of the foreign participants in the trade acknowledge the usage.[23] Consequently, both Article 9(2) CISG and Article 1:105 PECL can be applicable to local usages as well. Therefore, it is also logical that Article 1:105(2) PECL may be applied as an aid in determining whether a usage falls within the scope of Article 9(2) CISG.

According to Article 1:105(2) PECL, the application of a usage must not be unreasonable. Article 9(2) CISG does not expressly require the usage to be reasonable.[24] However, reasonableness is a general principle of CISG.[25] Therefore, Article 9(2) CISG can well be interpreted to require that the usage is not unreasonable, which is in accordance with the wording of Article 1:105(2) PECL.

(d) Newcomers to the market

Pursuant to both Article 9(1) CISG and Article 1:105(1) PECL, a newcomer to a market may be bound by usages applicable to the market if the parties have agreed upon them.

Pursuant to Article 1:105(2) PECL, a party entering into a new market may be bound by usages generally observed by the parties in that market and this may entail that the newcomer may be bound by local usages of the other party if the usages would be considered applicable by persons in the same situation as the parties.[26]

By contrast, as the wording of Article 9(2) CISG relies on the knowledge or the imputed knowledge of the parties in question, the wording of CISG leaves doubt as to whether newcomers in the trade or outsiders are bound by a usage of which they cannot reasonably have any knowledge.[27] If the newcomer indeed knew of the usages applicable in a new market, the parties will be bound by the said usage. However, according to Article 9(2) CISG, the usages applicable in a new market may also apply to the newcomer even if he was not aware of those usages if it can be established that the newcomer should have known them.

Therefore, newcomers to a market are, also under the CISG, probably bound by usages observed in the market they enter.[28] Consequently, both Article 9 CISG and Article 1:105 PECL entail that newcomers may be bound by usages applicable in the market in question. Newcomers should therefore always make an effort to research into the applicable usages applied in a new market.

(e) Examples of other provisions in the CISG referring to usages or practices

In the CISG, several articles refer to usages and/or practices. For example, Article 8(3) states that due consideration shall be given to practices and usages when determining the intent of a party or the understanding of a reasonable person. Furthermore, Article 18(3) CISG states that an offer can be accepted by the performance of an act, if practices and usages permit that.

An indirect reference to usages and practices can be found in Article 32(2) CISG, regarding carriage of goods according to which carriage shall be made under usual terms. Finally, another indirect reference can be found in Article 35(2)(a) CISG, regarding conformity of the goods to the contract according to which the goods should be fit for normal use, unless expressly agreed otherwise.[29]

4. Conclusions

According to the CISG and the PECL, usages and practices are binding upon the parties. Apart from the wording of Article 9(2) CISG and Article 1:105(2) PECL, the two instruments have many similarities in substance as well as a common purpose.

As the wording of Article 9(1) CISG and Article 1:105(1) PECL is identical, Article 1:105(1) PECL and the Commentary to it may aid in the interpretation and application of Article 9(1) CISG.

Furthermore, although the wording of Article 9(2) CISG and Article 1:105(2) PECL are not identical, the present writer maintains that PECL could aid in the interpretation and application of Article 9(2) CISG as the criteria set forth in Article 9(2) CISG may be interpreted in accordance with the criteria set forth in Article 1:105(2) PECL.


FOOTNOTES

* The author is attorney-at-law at the Danish law firm Kromann Reumert. For further details, please see <http://www.kromannreumert.com>.

A match-up of CISG Article 9 and PECL Article 1:105 [Usages and practices] is available at <http://cisgw3.law.pace.edu/cisg/text/peclcomp9.html>. The match-up is accompanied by:

-   Comments on PECL 1:105 authored by the European Commission describing and illustrating the manner in which this provision is to be applied; and
-   Notes that compare this PECL Article with continental and common law domestic rules, doctrine and jurisprudence.

1. Cf. Article 1:105(2) PECL.

2. Cf. Article 9(2) CISG.

3. This precedence is mainly based on the autonomy of the parties pursuant to Article 6 CISG whereby the parties may opt out of the CISG or amend it to their individual needs. A contradictory usage can in that sense be seen as an adaptation of the CISG agreed between the parties, cf. Patrick X. Bout, Trade Usages: Article 9 of the Convention on Contracts for the International Sales of Goods (hereinafter "Bout"), published at <http://cisgw3.law.pace.edu/cisg/biblio/bout.html>. See also Werner Junge, in: Peter Schlechtriem ed., Commentary on UN Convention on the International Sale of Goods (CISG), 2nd edition (translated) (hereinafter "Junge"), p. 76, M.J. Bonell, in: C.M. Bianca and M.J. Bonell eds., Commentary on the International Sales Law the 1980 Vienna Sales Convention (hereinafter "Bonell"), p. 104 and F. Enderlein and D. Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods, 1992, pp. 66-67 (hereinafter "Enderlein"), available online at <http://www.cisg.law.pace.edu/cisg/biblio/enderlein-art09.html>. See also Article 9(2) ULIS where it is expressly stated that a usage will set aside the applicable law.

See relevant case law:
-  Austria 21 March 2000, Oberster Gerichtshof [Supreme Court], case presentation available in English, online at <http://cisgw3.law.pace.edu/cases/000321a3.html> (stating that genuine domestic usages for the trade prevailed over the provisions of CISG, since these usages were widely known to and regularly observed by parties in cross-border trade between Austria and Germany.)

4. Article 4(a) CISG states: "… except as otherwise expressly provided in this Convention, it is not concerned with … the validity of the contract or of any of its provisions or of any usage" [emphasis added].

5. Cf. Article 7(2) CISG and 1:106(2) PECL. See also Junge, p. 76. Furthermore, the hierarchy between practices and usages is not settled in the CISG nor the PECL, however, practices should be considered as having priority in their relationship with agreed usages, as they are generally better geared to the particularities of a concrete relationship because they are of an individual and thus more specific character, cf. Enderlein, p. 67. The hierarchy proposed by Enderlein is similar to the UCC, Section 1-204(4), whereby any course of performance shall control both course of dealing and usage of trade.

6. The Secretariat Commentary on the 1978 Draft of the CISG is the closest counterpart to an official commentary on the CISG. The Secretariat Commentary on Article 8 of the 1978 Draft is available online at <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-09.html>. The addition of the phrase "or its formation" is the only difference between Article 8 of the 1978 Draft and Article 9 CISG.

7. Cf. Ole Lando and Hugh Beale eds., Principles of European Contract Law: Parts I and II, Kluwer Law International (2000) (hereinafter "Lando and Beale"), p. 104.

8. Cf. Lando and Beale, p. 104.

9. Cf. Bonell, p.106 and 111, Junge, p. 78 and John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 2nd ed., Kluwer Law International (1991) (hereinafter "Honnold"), p. 146. Furthermore, the definition of the term usage in the Commentary to Article 1:105 PECL is in accord with the definition of said term in CISG's antecedent, Article 13 ULF, where a usage was defined as any practice or method of dealing, which reasonable persons in the same situation as the parties usually consider to be applicable to the formation of their contract.

10. For a helpful overview of the influence of trade usage in commercial contracts, see Aleksandar Goldstajn, Usages of Trade and Other Autonomous Rules of International Trade According to the UN (1980) Sales Convention, in: Sarcevic & Volken eds., International Sale of Goods: Dubrovnik Lectures, Oceana (1986) Ch. 3, 55-110, available online at <http://www.cisg.law.pace.edu/cisg/biblio/goldstajn.html>.

11. Cf. Junge, p. 76.

12. Cf. Bonell, p. 110.

13. Cf. Junge, p. 76 and Bonell, p. 105.

14. Cf. Article 1:101 PECL

15. Although not expressly stated in Article 9(1) CISG and Article 1:105(1) PECL, both expressly agreed usages and practices as well as impliedly agreed usages and practices will be binding upon the parties. This interpretation is in accordance with the antecedent to Article 9(1) CISG, Article 9(1) ULIS, where it is expressly stated that the parties are bound by usages which they expressly or impliedly have made ap-plicable to their contract and any practices established between themselves. See also Enderlein, p. 67.

16. The fact that the parties intend a usage or a practice to apply to their contract entails that there is no need to examine whether the actual sales transactions are covered by the usage or whether the requirements for the existence of a usage as described in Article 9(2) CISG or Article 1:105(2) PECL are satisfied, cf. Junge, p. 78 and Lando and Beale, p. 104. See the relevant case law:
- Netherlands 6 May 1994, Rb [District Court] 's-Hertogenbosch, case presentation available in English, online at <
http://cisgw3.law.pace.edu/cases/940506n1.html> (stating that previous place of payment was an established practice between the parties). See also Germany 24 November 1998, LG [District Court] Bielefeld, English translation available online at <http://cisgw3.law.pace.edu/cases/981124g1.html> (stating that the place of payment shall be established in conformity with the practices between the parties.) However, to the contrary, see Italy 7 August 1998, Corte Suprema di Cassazione [Supreme Court], case presentation available in English, online at <http://cisgw3.law.pace.edu/cases/980807i3.html> (stating that a mere practice between the parties, which may well depend on a tolerance on the part of the seller, is not sufficient to justify a derogation from the general rule regarding the place of payment.)
- China, CIETAC Arbitration proceeding, post-1989, English translation available online at <http://cisgw3.law.pace.edu/cases/900000c1.html> (stating that the parties adoption of a practice of confirming the sample of the goods is binding upon the parties with respect to the quality of the goods.)
- France 21 October 1999, Cour d’appel [Appellate Court] Grenoble, English translation available online at <http://cisgw3.law.pace.edu/cases/991021f1.html> (stating that a contract had been concluded, even in the absence of any express acceptance on the part of the seller, as the seller in previous years had fulfilled the buyer’s orders without expressing its acceptance.)
- Germany 13 April 2000, AG [Lower Court] Duisburg, English translation available online at <http://cisgw3.law.pace.edu/cases/000413g1.html> (stating that a party’s behavior on two prior occasions does not establish a practice between the parties.)

17. Cf. Secretariat Commentary on Article 8 of the 1978 draft (antecedent to Article 9 CISG), section 4. See the relevant case law:
- European Court of Justice 20 February 1997, case presentation available in English, online at <
http://cisgw3.law.pace.edu/cases/970220eu.html> (stating that it is not enough for a jurisdiction clause to have been concluded in a form which accords with a usage in the particular trade or commerce concerned of which the parties were or ought to have been aware; the usage must have been widely known in international trade or commerce, and regularly observed by parties to contracts of the type involved in the particular trade or commerce concerned.)
- ICC Arbitration Case No. 8324 of 1995, case presentation available online at <http://cisgw3.law.pace.edu/cases/958234i1.html> (stating that the parties are bound by usages that are regularly observed by parties to contracts of the type involved in the particular trade concerned.)

18. Cf. Junge, pp. 76-77. See the relevant case law:
- Netherlands 24 April 1996, Hof [Appellate Court] 's-Hertogenbosch, case presentation available in English, online at <
http://cisgw3.law.pace.edu/cases/960424n1.html> (stating that a party was bound by international practice, as he should have be aware of the fact that general terms and conditions are a common feature in international practice.)
- See also Switzerland 21 December 1992, ZG [Civil Court] Basel, English translation available online at <http://cisgw3.law.pace.edu/cases/921221s1.html> (stating that the parties had impliedly made that usage applicable to their contract since they knew or ought to have known the binding nature of a letter of confirmation under both Austrian and Swiss law.)

19. Cf. Lando and Beale, p. 104, Bonell, p. 109, Junge, p. 79 and Honnold, p. 148.

20. Cf. Secretariat Commentary on Article 8 of the 1978 draft (antecedent to Article 9 CISG), section 4. This interpretation of Article 9(2) CISG is also in accordance with CISG’s antecedent, Article 9(2) ULIS, stating that the parties are bound by any usages which reasonable persons in the same situation as the parties usually consider to be applicable to their contract.

21. Cf. Junge, pp. 78-79.

22. Cf. Lando and Beale, p. 104.

23. Cf. Junge, p. 79.
See the relevant case law:
- Austria 9 November 1995 OLG [Appellate Court] Graz, case presentation available in English, online at <
http://cisgw3.law.pace.edu/cases/951109a3.html> (stating that Article 9(2) CISG shall not be interpreted as barring the application of national or local usage, and a party, who has been engaging in business in a county for many years and has repeatedly concluded contracts of the type involved in the particular trade concerned, is bound by national usages.)
- Germany 5 July 1995, OLG [Appellate Court] Frankfurt, English translation available online at <http://cisgw3.law.pace.edu/cases/950705g1.html> (stating that regard is to be given only to trade usages that are known to the law in both jurisdictions of the parties)
- ICC Arbitration Case No. 5713 of 1989, case presentation available online at <http://cisgw3.law.pace.edu/cases/895713i1.html> (stating that CISG – reflecting generally accepted trade usages – may prevail over domestic law.)

24. Cf. Lando and Beale, p. 106.

25. Cf. Discussions at the 6th meeting of the First Committee at the Diplomatic Conference where a proposal to include the word “reasonable” in Article 9(2) CISG was rejected on the basis that the very existence of a usage implied recognition of its reasonableness, see <http://www.cisg.law.pace.edu/cisg/firstcommittee/Meeting6.html>, paras 58-71. See also the editorial remarks on the concept of reasonableness as a general principle of the CISG, available online at <http://www.cisg.law.pace.edu/cisg/text/reason.html>.

26. Cf. Lando and Beale, p. 105.

27. Cf. Lando and Beale, p. 105.

28. Cf. Junge, p. 79.

29. Cf. Bout.


Pace Law School Institute of International Commercial Law - Last updated September 14, 2009
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