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Article 29. Modification or Termination of Contract by Agreement

TEXT OF ARTICLE 29

(1) A contract may be modified or terminated by the mere agreement of the parties.

(2) A contract in writing which contains a provision requiring any modification or termination by agreement to be in writing may not be otherwise modified or terminated by agreement. However, a party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct.


OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

29A Parties by agreement may modify or terminate the contract

29B Written contract may require writing for modification or termination

29B1 Agreement barring oral modification may not apply

29B11 Conduct on which the other party has relied (but see arts. 12 & 96)


DESCRIPTORS

Modification of contract ; Merger or integration clause


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 twelve cases in its Digest of Art. 29 case law:

Austria      3           Germany      2           Switzerland        1
Belgium 1 ICC      1 United States        2
France      1 Russian Federation      1 TOTAL:   12

Presented below is a composite list of Art. 29 cases reporting UNCITRAL Digest cases and other Art. 29 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 5 October 1999 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 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.
 

Switzerland 12 September 2008 Amtsgericht [District Court] Sursee (Second-hand tractor case)

United States 25 July 2008 U.S. District Court [Pennsylvania] (Norfolk Southern Railway Company v. Power Source Supply, Inc.)

United States 16 June 2008 U.S. District Court [Minnesota] (BTC-USA Corporation v. Novacare et al.)

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.) 29A
 

Austria 18 December 2007 Oberlandesgericht [Appellate Court] Innsbruck (Steel bars case) 29B [translation available]

American Arbitration Association 23 October 2007 [Interim Award] (Macromex Srl. v. Globex International Inc.) 29A

United States 19 July 2007 Federal Court of Appeal [3d Circuit] (Valero Marketing & Supply Company v. Greeni Trading Oy) 29A
 

United States 23 August 2006 Federal District Court [New York] (TeeVee Tunes v. Gerhard Schubert GmbH) 29B

Netherlands 15 August 2006 Gerechtshof [Appellate Court] Arnhem

Belgium 28 June 2006 Hof von Beroep [Appellate Court] Gent (Mushrooms case)

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

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

China October 2005 CIETAC Arbitration Award [CISG 2005/24] (Filling and sealing machine case) 29A [translation available]

Netherlands 31 August 2005 Gerechtshof [Appellate Court] Leeuwarden (Auto-Moto Styl S.R.O. v. Pedro Boat B.V.) [translation available]

China 27 June 2005 Shandong Higher People's Court [Appellate Court] (Norway Royal Supreme Seafoods v. China Rizhao Jixiang Ocean Food Company et al.) 29A [translation available]
 

United States 28 October 2004 Federal District Court [California] (Comerica Bank v. Whitehall Specialties, Inc.) 29A

United States 6 July 2004 U.S. District Court [Illinois] (Raw Materials Inc. v. Manfred Forberich GmbH & Co., KG)

Germany 28 May 2004 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]

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

Russia 16 February 2004 Arbitration Award 107/2002 29A ; 29B [translation available]

Switzerland 11 February 2004 Appelationshof [Appellate Court] Bern (Cable case) [translation available]
 

Germany 10 December 2003 Oberlandesgericht [Appellate Court] Karlsruhe 29A [translation available]

Switzerland 24 October 2003 Handelsgericht [Commercial Court] Zürich

Germany 15 September 2003 Oberlandesgericht [Appellate Court] Rostock [translation available]

China 8 July 2003 CIETAC Arbitration Award [CISG 2003/13] (Copper case) [translation available]

United States 5 May 2003 U.S. Circuit Court of Appeals [9th Cir.] (Chateau des Charmes Wines v. Sabate USA) 29A

China 18 April 2003 CIETAC Arbitration Award [CISG 2003/05] (Desulfurization reagent case) 29A [English text]
 

China 27 December 2002 CIETAC Arbitration Award [CISG 2002/29] (Medicine manufacturing equipment case) 29A [translation available]

China 18 December 2002 CIETAC Arbitration Award [CISG 2002/14] (Sausage casing case) 29A [translation available]

United States 13 December 2002 California Court of Appeal (Regency Wines, Inc. v. Champagne Montaudon)

Ukraine 25 November 2002 Arbitration Award 29B [translation available]

Switzerland 11 November 2002 Cour de Justice [Appellate Court] Genève (Iron concretes and steel bars case) 29A [translation available]

Belgium 15 May 2002 Hof van Beroep [Appellate Court] Gent 29A [translation available]
 

United States 17 December 2001 U.S. District Court [Michigan] (Shuttle Packaging v. Tsonakis) 29A

Netherlands 12 July 2001 Arrondissementsrechtbank [District Court] Rotterdam [translation available]
 

China 17 July 2000 Higher People's Court [Appellate Court] of He'nan Province (Minterrnet S.A. v. He'nan Local Product Import and Export Company) [translation available]

China 23 May 2000 CIETAC Arbitration Award [CISG/2000/11] (Stainless steel case) 29A [translation available]
 

* Switzerland 5 October 1999 Obergericht [Appellate Court] Basel 29A [translation available]

* Austria 29 June 1999 Oberster Gerichtshof [Supreme Court] 29A [translation available]

China 30 March 1999 CIETAC Arbitration Award [CISG/1999/16] (Flanges case) 29A [translation available]

Austria 24 February 1999 Oberlandesgericht [Appellate Court] Graz (Military weapons case) [translation added]

Switzerland 10 February 1999 Handelsgericht [Commercial Court] Zürich [translation available]

ICC February 1999 International Court of Arbitraton, Case 9474 29A [English text]
 

Mexico 30 November 1998 Compromex Arbitration award 29A [translation available]

Switzerland 30 November 1998 Handelsgericht [Commercial Court] Zürich 29A [translation available]

Switzerland 5 November 1998 Bezirksgericht [District Court] Sissach 29A [translation available]

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

* United States 6 April 1998 Federal District Court [New York] (Calzaturificio Claudia v. Olivieri Footwear)

Germany 11 March 1998 Oberlandesgericht [Appellate Court] München [translation available]

* ICC March 1998 International Court of Arbitration, Case 9117 29B [English text]

* Russia 16 February 1998 High Arbitration Court [Information Letter No. 29] 29A ; 29B
 

China 31 December 1997 CIETAC Arbitration Award [CISG/1997/37] (Lindane case) [translation available]

China 19 December 1997 CIETAC Arbitration Award [CISG/1997/36] (Steel case) 29A [translation available]

China 16 December 1997 CIETAC Arbitration Award [CISG/1997/35] (Hot-dipped galvanized steel coils case) 29B [translation available]

China 29 September 1997 CIETAC Arbitration Award [CISG/1997/28] (Aluminum oxide case) 29A [translation available]

Germany 18 September 1997 Landgericht [District Court] Hamburg

China 26 June 1997 CIETAC Arbitration Award [CISG/1997/17] (Monohydrate zinc sulphate case) 29A [translation available]

China 15 April 1997 CIETAC Arbitration Award [CISG/1997/06] (Germanium case) 29A [translation available]

Russia 25 March 1997 Presidium of Supreme Court of Russian Federation (Resolution No. 4670/96) 29A [translation available]

Switzerland 20 February 1997 Bezirksgericht [District Court] Saane [translation available]

China 1997 Shanghai Higher People's Court 29A [translation available]

Russia 1997 High Arbitration Court [Ruling No. 4, case 2]
 

China 10 May 1996 CIETAC Arbitration Award [CISG/1996/22] (Hot-rolled steel plates case) 29A [translation available]

Viet Nam 5 April 1996 People's Supreme Court [Appeal Division] Ho Chi Minh City [translation available]

Germany 3 April 1996 Bundesgerichtshof [Federal Supreme Court] [translation available]

China 29 March 1996 CIETAC Arbitration Award [CISG/1996/16] (Natural rubber case) 29A [translation available]

Germany 15 February 1996 Landgericht [District Court] Kassel [11 O 4187/95] [translation available]

Russia 15 February 1996 Arbitration Court of Moscow City

* Austria 6 February 1996 Oberster Gerichtshof [Supreme Court] [translation available]
 

Russia 1 December 1995 Arbitration award 22/1995 29A [translation available]

Austria 23 May 1995 Oberlandesgericht [Appellate Court] Linz

Germany 12 May 1995 Amtsgericht [Lower Court] Alsfeld [translation available]

* Belgium 2 May 1995 Rechtbank van Koophandel [District Court] Hasselt

Australia 28 April 1995 Federal District Court, Adelaide (Roder v. Rosedown)

* France 29 March 1995 Cour d'appel [Appellate Court] Grenoble 29A [translation available]

Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 1720/94] [translation available]
 

* United States 22 September 1994 Federal District Court [Southern Dist. NY] (Graves v. Chilewich) 29B

* Austria 15 June 1994 Vienna Arbitration award SCH-4318 [translation available]

* Germany 22 February 1994 Oberlandesgericht [Appellate Court] Köln 29A [translation available]

ICC 1994 International Court of Arbitration, Case 7331 29A [English text]
 

Germany 18 November 1993 Oberlandesgericht [Appellate Court] Düsseldorf

United States 15 June 1993 Federal Appellate Court [5th Circuit] (Beijing Metals v. American Business Center) 29A

Germany 14 May 1993 Landgericht [District Court] Aachen 29A [translation available]

Germany 12 March 1993 Oberlandesgericht [Appellate Court] Düsseldorf [translation available]

China Post-1992 CIETAC Arbitration Award [CISG/1993/14] (White cardboard scrap paper case) 29A [translation available]
 

Germany 22 May 1992 Landgericht [District Court] Mönchengladbach

Hungary 24 March 1992 Fovárosi Biróság [Metropolitan Court]
 

* Germany 26 September 1990 Landgericht [District Court] Hamburg 29A


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/29 [8 June 2004]
Reproduced with the permission of UNCITRAL

[Text of Article 29
Digest of Article 29 case law
-    Meaning and purpose of the provision
-    Modification or termination by mere agreement
-    Form agreements
-    Abuse of "no oral modification"clause]
ARTICLE 29

     (1) A contract may be modified or terminated by the mere agreement of the parties.  

     (2) A contract in writing which contains a provision requiring any modification or termination by agreement to be in writing may not be otherwise modified or terminated by agreement. However, a party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct.

DIGEST OF ARTICLE 29 CASE LAW

Meaning and purpose of the provision

1. The provision concerns the modification (which includes additions) [1] and termination of an already concluded contract through agreement of the parties. According to article 29(1), the mere consent of the parties is sufficient to effect any variation of the contract. If the parties have, however, agreed in writing on a written form for a modification or termination of their contract paragraph 2 provides that the contract then cannot be modified or terminated otherwise unless and to the extent that it would be inequitable to invoke the form requirement.

2. The provision does, and is intended to,[2] abolish the doctrine of "consideration" of the common law as far as the Convention applies.

Modification or termination by mere agreement

3. An agreement is needed in order for the parties to be able to change a contract provision or to terminate their contract. The existence of such an agreement is determined on the basis of the provisions to be found in Part II (articles 14-24) of the Convention.[3] Article 29 provides that a contract can be modified purely by the agreement of the parties. In line with article 18(1), it was stated that mere silence of one party to proposals of the other to modify does not in itself amount to acceptance,[4] however it has also been stated that there was agreement as to the termination of a contract where a buyer refused to pay due to alleged non-conformity and subsequently the seller offered to market the goods itself, an offer to which the buyer did not reply.[5] One court stated that, although on the basis of article 29 CISG a contract could be modified purely by agreement of the parties, the modification of the purchase price could not result merely from the general mood of a meeting.[6] The acceptance without comment of a bill of exchange as payment has, however, been regarded as implied consent to a postponement of the date for payment provided for in the contract until the maturity of the bill.[7]

4. The interpretation of the parties' agreement as to the modification or termination of the contract is based on the Convention's rules on construction (in particular article 8).

5. The agreement of both parties is all that is required in order to modify or terminate their contract.[8] No form requirements must be met [9] unless the reservation concerning form applies (arts. 11, 12, 96) [10] or unless the parties have agreed otherwise. When article 96 applies, modifications agreed upon only orally are invalid.[11] For all other cases it follows from article 11 as a general principle of the Convention that the parties are free to modify or terminate their contract in any form be it either in writing or orally or in any other form. Even an implied termination of the contract has been held possible;[12] furthermore, it has been held that a written contract may be orally changed.[13]

Form agreements

6. According to article 29(2), a written or oral contract may generally be modified or terminated orally or in writing. If, however, a written contract contains a provision that any modification or termination of the contract must be in writing ("no oral modification"-clause or "written modification"-clause) then the parties cannot modify or terminate the contract in a different way.[14] An oral variation would be ineffective if invoked by one party in such a case unless article 29(2)(2) were to apply.[15]

7. A so-called merger clause according to which the complete contents of prior negotiations is merged in the contract document has been treated like a "no oral modification"-clause.[16] Therefore no evidence of oral agreements prior to the written contract could be adduced in order to modify or terminate that contract.

Abuse of "no oral modification"-clause

8. Article 29(2)(2) provides that a "no oral modification"-clause cannot be invoked by a party who by its conduct aroused the impression not to rely on the clause while, and to the extent that, the other party relied upon that conduct. It was stated that the provision is an expression of the general good faith principle that governs the Convention (art. 7(1)).[17]


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 CLOUT case No. 86 [UNITED STATES Graves v. Chilewich Federal District Court [New York] 22 September 1994 available online at <http://cisgw3.law.pace.edu/cases/940922u1.html>] (see full text of the decision).

2. See Secretariat Commentary to (then) article 27 ("overcoming the common law rule that "consideration" is required") Commentary on the draft Convention on Contracts for the International Sale of Goods, A/CONF.97/5, reproduced in United Nations Conference on Contracts for the International Sale of Goods: Official Records, at p. 28, paras. 2-3.

3. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>]; to the same effect see CLOUT case No. 153 [FRANCE Cour d'appel [Appellate Court] Grenoble 29 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950329f1.html>], and CLOUT case No. 332 [SWITZERLAND Obergericht [Appellate Court] Basel-Landschaft 5 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991005s1.html>].

4. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>]; CLOUT case No. 332 [SWITZERLAND Obergericht [Appellate Court] Basel-Landschaft 5 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991005s1.html>].

5. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>].

6. CLOUT case No. 153 [FRANCE Cour d'appel [Appellate Court] Grenoble 29 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950329f1.html>].

7. 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).

8. CLOUT case No. 176 [AUSTRIA Oberster Gerichtshof [Supreme Court] 6 February 1996, available online at <http://cisgw3.law.pace.edu/cases/960206a3.html>].

9. CLOUT case No. 413 [UNITED STATES Calzaturificio Claudia v. Olivieri Footwear Federal District Court [New York] 6 April 1998 available online at <http://cisgw3.law.pace.edu/cases/980406u1.html>] (see full text of the decision); [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

10. For a similar case see [BELGIUM Rechtbank [District Court] Hasselt 2 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950502b1.html>].

11. [RUSSIA High Arbitration Court Information Letter 29 of 16 February 1998, available online at <http://cisgw3.law.pace.edu/cases/980216r1.html>] (abstract).

12. [AUSTRIA Oberster Gerichtshof [Supreme Court] 29 June 1999, available online at <http://cisgw3.law.pace.edu/cases/990629a3.html>].

13. 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).

14. [ICC Court of Arbitration, case No. 9117 of March 1998, available online at <http://cisgw3.law.pace.edu/cases/989117i1.html>].

15. CLOUT case No. 86 [UNITED STATES Graves v. Chilewich Federal District Court [New York] 22 September 1994 available online at <http://cisgw3.law.pace.edu/cases/940922u1.html>].

16. [ICC Court of Arbitration, case No. 9117 of March 1998, available online at <http://cisgw3.law.pace.edu/cases/989117i1.html>].

17. Compare also CLOUT case No. 94 [AUSTRIA Vienna Arbitration Award case No. SCH-4318 of 15 June 1994, available online at <http://cisgw3.law.pace.edu/cases/940615a4.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

[...]

c. Contract Modification

Article 29 allows contracts to be modified or terminated by the "mere agreement" of the parties. This provision reinforces the principle that no particular form is required for either modification or termination.[153] Oral terminations or modifications, however, are ineffective if the parties have previously prescribed formalities to such acts. National courts will find modifications to be invalid in at least three situations. First, when the modification does not represent "agreement" by the parties. Second, when [page 331] a writing is required because one of the parties has its place of business in a Contracting State that made a declaration pursuant to Articles 12 and 96. In such a situation Article 29 prohibits oral modifications.[154] Third, when the parties include a no oral modification clause in a written contract.

Just as intent is critical in determining the existence or scope of a contract under Article 11, so intent is important in examining the validity of a modification. Whether or not the parties have agreed on the modification is a question that incorporates the offer and acceptance rules under Articles 14, 18, and 19, as well as interpretation rules under Articles 8 and 9. A U.S. court in Chateau des Charmes Wines Ltd. v. Sabate USA Inc. found that one party's unilateral attempt to modify an agreement failed where there was no indication that the other party accepted or agreed to the new terms.[155] The parties had orally agreed to the essential terms of the contract, but a forum selection clause which was not part of the original agreement, was included in subsequent invoices.[156] According to the court, it would be illogical to make the forum selection clause contained in the invoices part of the contract.[157] The court stated that "[n]othing in the Convention suggests that the failure to object to a party's unilateral attempt to alter materially the terms of an otherwise valid agreement is an 'agreement' within the terms of Article 29."[158] The court took into account the various circumstances recommended in Article 8(3) to determine the parties' intent, but concluded that there was no evidence or conduct that indicated the party had agreed to the modifications added to the invoice.[159] Other courts have also insisted on evidence of an agreement. For example, a French court considered affidavits from the buyers' witnesses who were present at a meeting to determine whether the parties had concluded a valid price modification.[160] [page 332] Because the affidavits did not mention the seller's agreement to the price, however, the court held that "the modification of a sale price cannot result from the general environment of a meeting."[161]

Parties may avoid parol evidence difficulties such as those raised in the previous section by inserting a merger or no oral modification clause that "extinguishes any and all prior agreements and understandings not expressed in the writing."[162] Enforcing such clauses preserves the intent of the parties as well as the Convention's principle of freedom of contract. The exception to Article 29's general rule, however, is that a "party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct."[163] Several decisions indicate that national courts respect clauses that prohibit oral modifications or the use of extrinsic evidence, where there is no evidence that one party acted in a manner to induce reliance on oral modifications.[164] Nevertheless, where a no oral modification or merger clause exists, a party is allowed to establish conduct, such as a course of dealing, to override the modification clause. [165] Despite academic concerns about the difficulty of interpreting Article 29(2), cases addressing the issue have yet to surface.[166]

Article 29 allows contracts to be modified or terminated by the "mere agreement" of the parties. The Secretariat's Commentary indicates that this [page 333] provision overcomes the common law requirement of consideration.[167] At least one U.S. court as well as the Court of Arbitration of the International Chamber of Commerce have recognized that under the CISG, a contract for the sale of goods may be modified without consideration.[168] In one recent U.S. decision, however, the court approached the consideration issue as a question of contract validity, which Article 4 of the CISG specifically states is not governed by the Convention.[169] This is a questionable extension of the validity delegation under Article 4. Article 29 brings contract modification within the scope of the CISG. The specific default rules of Article 29, namely no writing or consideration requirements, preempts the more general charge that issues of validity are to be determined by national law. [page 334]

[...]


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.

[...]

153. CISG, supra note 4, at art. 29.

154. See Vestnik Vysshego Arbitrazhnogo Suda RF [Highest Court of Arbitration][Vestn. Vyssh. Arb. Suda RF], Information Letter 29, Feb. 16, 1998 (Russ.), available at <http://cisgw3.law.pace.edu/cases/980216r1.html> (modification by telephone not valid where buyer had its place of business in the Russian Federation and the former U.S.S.R. had made a declaration in accordance with Articles 12 and 96); Vestn. Vyssh. Arb. Suda RF, Res. No. 4670/96, Mar. 25, 1997 (Russ.), available at <http://cisgw3.law.pace.edu/cases/970325r2.html> (modification of terms of delivery must be in writing); Vital Berry Marketing NV v. Dira-Frost NV, AR 1894/94, Rechtbank van Koophandel, Hasselt, May 2, 1995 (Belg.) available at [<http://cisgw3.law.pace.edu/cases/950502b1.html>] (attempt to modify price not valid where seller was from Chile, a State which had made declaration under Articles 12 and 96).

155. Chateau des Charmes Wines Ltd. v. Sabate USA Inc., 328 F.3d 528, 531 (9th Cir. 2003).

156. Id. at 529.

157. Id. at 531.

158. Id.

159. Id.

160. See Société Cámara Agraria Provincial de Guipuzcoa v. André Margaron, CA Grenoble [Appeal Court][CA] 93/2821, Mar. 29, 1995 (Fr.) available at <http://cisgw3.law.pace.edu/cases/950329f1.html> [English translation by Charles Sant 'Elia].

161. Id.

162. See CISG, supra note 4, at art. 29; MCC-Marble, 144 F.3d at 1391.

163. See CISG, supra note 4, at art. 29(2). See also Graves Import Co. v. Chilewich Int'l Corp., 92 CIV. 3655 (JFK), 1994 U.S. Dist. LEXIS 13393, at *13 n.2 (S.D.N.Y. Sept. 22, 1994).

164. See Graves Import Co., 1994 U.S. Dist. LEXIS 13393 at *13; ICC Court of Arbitration -- Zurich Arbitral Awards, 9117, (Mar. 1998), available at [<http://cisgw3.law.pace.edu/cases/989117i1.html>] (arbitral tribunal compared Article 29(2) to UNIDROIT principles, Articles 2.17 and 2.18 to reach conclusion that a party could not rely on oral promises, assurances, or writings not included in the contract and that there was no reason to apply the exception clause which prevents a party from making use of the no oral modification clause if its conduct would lead the other party to rely); Cong ty Ng Nam Bee v. Cong ty Thuong mai Tay Ninh, People's Supreme Court, Appeal Division in Ho Chi Minh City, 74/VPPT, Apr. 5, 1996 (Vietnam), available at [<http://cisgw3.law.pace.edu/cases/960405v1.html>] (holding that letter of credit is a type of extrinsic evidence, inadmissible to contradict contract terms where parties had a 'four-corner clause').

165. CISG, supra note 4, at art. 29(2).

166. See generally, Robert A. Hillman, Article 29(2) of the United Nations Convention on Contracts for the International Sale of Goods: A New Effort at Clarifying the Legal Effect of "No Oral Modification" Clauses, 21 Cornell Int'l L.J. 449 (1988) (reviewing problems raised by no oral modifications and suggesting that new drafters take an approach that compromises less by either enforcing or abolishing such clauses) [available at <http://cisgw3.law.pace.edu/cisg/biblio/hillman2.html>].

167. See Secretariat Commentary to CISG art. 29, available at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-29.html>.

168. See Shuttle Packaging, 2001 U.S. Dist. LEXIS 21630, at *21 (W.D. Mich. Dec. 17, 2001) (citing Michael Van Alstine, 37 Va. J. Int'l. L. 1, n.47 (1996)); ICC Arbitration Case No. 7331 (1994) available at <http://cisgw3.law.pace.edu/cases/947331i1.html> [English text]; ICC Arbitration Case No. 9474 (Feb. 1999), available at [<http://cisgw3.law.pace.edu/cases/999474i1.html>][English text].

169. See Geneva Pharm. Tech. Corp., 201 F. Supp. 2d at 282-83 (court used New Jersey law to determine whether there was consideration). See generally, Helen Elizabeth Hartnell, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, 18 Yale J. Int'l L. 1, 45 (1993) (proposing that courts seek a middle course in approaching the validity issue, looking to domestic to determine whether an issue is one of validity but also considering the international aspect of the CISG) [available at <http://cisgw3.law.pace.edu/cisg/biblio/hartnell.html>]; Gyula Eörsi, Problems of Unifying Law on the Formation of Contracts for the International Sale of Goods, available at <http://cisgw3.law.pace.edu/cisg/text/eorsi29.html> (recognizing that lack of consideration could be a validity issue but that it is more likely that contract formation does not require consideration, a conclusion which he maintains is supported by "the fact that the question did not even surface, in connection with the 1964 Hague Convention on Formation (ULF)").

[...]

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 of International Commercial Contracts may
be used to interpret or supplement Article 29 of the CISG

Sieg Eiselen [*]
September 2002

a. Article 29 of the CISG deals with the requirements for the modification and termination of contracts. It further entrenches the principles of party autonomy, freedom of contract and freedom from formalities contained in article 11 of the CISG.[1] These principles also form the foundation of the UNIDROIT Principles of International Commercial Contracts as expressed in articles 1.1, 1.5 and 2.18 and should therefore form the governing principles in the interpretation of any contract as well as its modification or termination.[2]

b. Article 2.18 of the UNIDROIT Principles in itself sheds little light on the interpretation or augmentation of article 29 of the CISG as both articles are formulated in almost exactly the same words, with one insignificant exception. Where article 2.18 of the UNIDROIT Principles deals with the abuse of the written modification clause, it refers to the prohibition to rely on such clause to the extent that the other party has "acted in reliance" on that conduct. The CISG merely refers to the extent that the other party has "relied on that conduct." It is submitted that nothing turns on this divergence as reliance in itself implies some action or failure to act on the part of that party.

c. In interpreting the scope of article 2.18 of the UNIDROIT Principles, regard should also be had to the provisions of article 3.2 which deals with freedom of form and formalities. In the Comments it is stated that mere agreement between the parties is sufficient for the valid conclusion, modification and termination of agreements without any further requirements to be found in domestic law. Specific reference is made to the fact that the requirement of consideration, which may be applicable in common law legal systems, is excluded. This is in conformity with the approach taken in the CISG.[3]

d. The first object of both article 29 CISG and article 2.18 of the UNIDROIT Principles is to reinforce the principle that any agreed modification or termination will be valid in whatever form it is made or contained.[4] Its second object is also to eliminate an important difference in approach between civil and common law, namely clearly establishing that no consideration is necessary for any amendment to be valid.[5] However, it also entrenches the time honored principle that where parties have by agreement voluntarily restricted their ability to modify or terminate a contract by requiring formalities for such actions, that agreement will be valid and enforceable.[6]

e. The commentary to article 2.18 of the UNIDROIT Principles makes it clear that the second object of the article is to generally render oral modifications or terminations void where parties have prescribed formalities, thereby rejecting the idea that such modification or termination may be viewed as an implied abrogation of the written modification or termination clause. This approach confirms the same interpretative conclusion reached by Schlechtriem in respect of Article 29 CISG.[7]

f. Both article 29 CISG and article 2.18 of the UNIDROIT Principles seem to apply only where the modification or restriction clause is contained in a "written agreement."[8] In interpreting what constitutes a "written agreement," the UNIDROIT Principles may be helpful as article 13 CISG only extends the concept of writing to telegrams and telexes. Article 1.10 of the UNIDROIT Principles extends the meaning of written to "any mode of communication that preserves a record of the information contained therein and is capable of being reproduced in tangible form." It is generally recognized that article 13 CISG contains a gap in that it only refers to older forms of technology and does not provide for more modern forms of electronic communications such as e-mail, fax or Internet communications.[9] It is suggested that the meaning of "written" should be extended to include these forms of communications in accordance with the definition contained in article 1.10 of the UNIDROIT Principles.[10] It has the advantage of being clear, practical and technologically neutral without losing sight of the object of the written formality, namely preserving an objective reproducible record of the communication between the parties.

g. The issue of merger clauses is not dealt with in these remarks as they are more appropriately covered under article 8 CISG which deals with the interpretation and proof of agreements.[11]

h. The exception created in article 29(2) CISG is one area where the application of article 29 may lead to interpretational difficulties.[12] The rule is based on principles contained in the so-called "Mißbrauchseinwand" of German law, or the "nemo suum venire contra factum proprium" principle of Roman law, or the doctrine of waiver and estoppel of Anglo-American law.[13]

i. The illustrations contained in the Comments to article 2.18 of the UNIDROIT Principles may be helpful in the interpretation of article 29 CISG in this regard. See also the examples mentioned by Schlechtriem.[14] It may be asked, however, whether the Comments call for a further requirement not specifically contained in article 2.18 of the UNIDROIT Principles, namely that the reliance must have been reasonable under the circumstances.[15] It would seem that this requirement is justifiable viewed in the light of the principle of good faith. Where reliance was not reasonable under the circumstances, a party ought not to be allowed to use the defense contained in article 29(2).[16]

j. Neither the CISG nor the UNIDROIT Principles makes provision for the case where the parties have agreed to further formalities such as signature or witnesses for an amendment or termination.[17] It is submitted that it would be in accordance with the provisions of article 29 CISG and 2.18 of the UNIDROIT Principles that the parties be held bound to such formalities and that non-complying modifications or terminations would be void, unless the abuse exception contained in article 29(2) CISG and 2.18 of the UNIDROIT Principles should apply.[18]


FOOTNOTES

* Professor of Private Law, Faculty of Law, University of South Africa; Advocate of the High Court of South Africa.

A match-up of CISG Article 29 with the following provisions of the UNIDROIT Principles of International Commercial Contracts is available: Articles 2.17 [Merger clause], 2.18 [Written modification clause]; also with UPIC Article 3.2 [Validity of mere agreement] <http://cisgw3.law.pace.edu/cisg/principles/uni29.html>. The match-up is accompanied by Official UNIDROIT Comments on these provisions describing and illustrating the manner in which they are to be applied.

1. Ferrari F., in Schlechtriem P.H. & Bacher K., Kommentar zum einheitlichen UN Kaufrecht 3rd ed (2000 München) Art 7 Rn 48; Magnus U., in Martinek M. (ed) J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetze: Wiener UN-Kaufrecht (1999 Berlin) Art 7 Rn 42, Art 29 Rn 1, 2 & 9; Burkhart F Interpretatives Zusammenwirken von CISG und UNIDROIT Principles (2000 Baden-Baden) 194; Karollus M., in Honsell H., Kommentar zum UN Kaufrecht (1997 Berlin) Art 29 Rn 9; Witz W., Salger in Salger H.C. & Lorenz M., Internationales Einheitliches Kaufrecht (2000 Heidelberg) Art 29 Rn 8; Kritzer A.H., Guide to the Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods (1989 Deventer) 115.

2. UNIDROIT Principles Art 2.18 Comment 1; Petz T., Die UNIDROIT Prinzipien für internationale Handelsverträge (2000 Wien) 56-57; Bonell M.J., 1995 Tulane LR 1134-1135.

3. See paragraph d. below.

4. Enderlein F. & Maskow D., International Sales Law - United Nations Convention on Contracts for the International Sale of Goods (1992 New York) par 1.1 at p. 123 <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html>; Salger Art 29 Rn 13; Honsell/Karollus Art 29 Rn 1 & 8; Schlechtriem Art 29 Rn 3; Magnus Art Rn 7 & 9; and United States 22 September 1994 Federal District Court [New York] (Graves v. Chilewich) <http://cisgw3.law.pace.edu/cases/940922u1.html>. In the case Germany 22 February 1994 Oberlandesgericht [Appellate Court] Köln <http://cisgw3.law.pace.edu/cases/940222g1.html>, the court held that although a termination could not be construed from silence or inaction in itself, silence or inaction in conjunction with other factors may provide sufficient evidence of an acceptance of an offer of termination. It is suggested that this also holds true for modifications. See Switzerland 5 October 1999 Obergericht [Appellate Court] Basel <http://cisgw3.law.pace.edu/cases/991005s1.html> where the principle was discussed but the court found that on the facts an amendment had not been proven; and Belgium 17 May 2002 Hof van Beroep [Appellate Court] Gent <http://cisgw3.law.pace.edu/cases/991005s1.html> where the failure of the one party to respond to the letter of another was interpreted as constituting an acceptance of the amendment offered by the other party. On this issue, see also Enderlein & Maskow para 6.1 at p. 125.

5. Commentary of the UNCITRAL Secretariat on Article 27 of the 1978 Draft, Document A/CONF.97/5 p 27-28 as reprinted in Honnold J., Documentary History of the Uniform Law for International Sales (1989 Deventer) and at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-29.html>. See also John E. Murray, Jr., excerpt from 8 Journal of Law and Commerce (1988) 11-51 "An Essay on the Formation of Contracts and Related Matters under the United Nations Convention on Contracts for the International Sale of Goods" <http://cisgw3.law.pace.edu/cisg/text/murray29.html>). This has been confirmed in the following decisions: United States 17 December 2001 Federal District Court [Michigan] (Shuttle Packaging v. Tsonakis) <http://cisgw3.law.pace.edu/cases/011217u1.html>; ICC Arbitration Case No. 7331 of 1994 <http://cisgw3.law.pace.edu/cases/947331i1.html>.

6. Honsell/Karollus Art 29 Rn 1,9 & 11; Salger Art 29 Rn 13 & 14; Magnus Art 29 Rn 7 & 9.

7. Schlechtriem Art 29 Rn 5. See also Salger Art 29 Rn 5; Honsell/Karollus Art 29 Rn 15; Magnus Art 29 Rn 12.

8. Schlechtriem Art 29 Rn 9; Honsell/Karollus Art 29 Rn 12.

9. Eiselen S., "Electronic Commerce and the UN CISG" 1996 EDI Law Review 21 <http://cisgw3.law.pace.edu/cisg/biblio/eiselen1.html>; Schlechtriem Art 13 Rn 2; Magnus Art 29 Rn 13.

10. See Honnold, Uniform Law for International Sales Under the 1980 United Nations Convention 3rd ed. (1999 Deventer) Rn 130; Eiselen 21. For a contrary view on electronic communications, see Schlechtriem Art 13 Rn 2.

For a further relevant discussion of CISG Art. 13, see Ulrich G. Schroeter, "Editorial Remarks on the manner in which the Principles of European Contract Law may be used to interpret or supplement CISG Article 13" <http://cisgw3.law.pace.edu/cisg/text/peclcomp13.html#er>.

11. See the Editorial Remarks by Perillo J.M. on Article 8 CISG at <http://cisgw3.law.pace.edu/cisg/principles/uni8.html#edrem>.

12. See the discussion in Honsell/Karollus Rn 17-23; Robert A. Hillman, "Article 29(2) of the United Nations Convention on Contracts for the International Sale of Goods: A New Effort at Clarifying the Legal Effect of 'No Oral Modification' Clauses", 21 Cornell Int'l Law Journal (1988) 449-466 at <http://cisgw3.law.pace.edu/cisg/biblio/hillman2.html> p 458, 460 and 465. In the case law, the exception has been mentioned but denied in cases where there was a lack of any evidence showing reliance. See Belgium 2 May 1995 Rechtbank van [District Court] van koophandel Hasselt (Vital Berry Marketing v. Dira-Frost) <http://cisgw3.law.pace.edu/cases/950502b1.html>. However, in Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html>, the arbitrator did apply the exception relying on the principle of estoppel.

13. Schlechtriem Art 29 Rn 10; Honnold Rn 204 footnote 8; Salger Art 29 Rn 16; Kritzer 235; Honsell/Karollus Art 29 Rn 18 & 19; Enderlein & Maskow para 5.1 at p 125. See also Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html> para 5.4. These principles are also underpinned by the principle of bona fides contained in Art 7 CISG. In this regard, see the comments in Mexico 30 November 1998 Compromex Arbitration (Dulces Luisi v. Seoul International) <http://cisgw3.law.pace.edu/cases/981130m1.html>; and Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html>.

14. Art 29 Rn 10. See also the discussion and examples mentioned in Honnold Rn 204; Salger Art 29 Rn 16 & 18; Honsell/Karollus Art 29 Rn 18 & 19.

15. This would seem to be the scope of the decision in Germany 22 May 1992 Landgericht [District Court] Mönchengladbach <http://cisgw3.law.pace.edu/cases/920522g1.html> where the court states that when receiving a document such as an expert's opinion rendered on behalf of the other party, the latter should be held bound to that document as a declaration of will if the party receiving it should have understood it as such and in fact understood it as such, looking at it objectively.

16. Magnus Art 29 Rn 17; Honsell/Karollus Art 29 Rn 20. See also the discussion of the necessity to apply this exception with flexibility in Salger Art 29 Rn 17. See also the concept of reasonableness as a general principle of the CISG <http://cisgw3.law.pace.edu/cisg/text/reason.html>.

17. Honsell/Karollus Art 29 Rn 14.

18. Enderlein & Maskow par 3.2 at p 124; Honnold Rn 202. Note the contrary view of Honsell/Karollus Art 29 Rn 14 who argues that, unless there is a clear indication that the parties indeed insisted on stricter formalities, there should be no presumption that the parties required such strict compliance.


PECL COMPARATIVES

Case annotated remarks on the manner in which the
Principles of European Contract Law may be used
to interpret or supplement Article 29 of the CISG

Sieg Eiselen [*]
September 2002

a. Article 29 of the CISG deals with the requirements for the modification and termination of contracts. It further entrenches the principles of party autonomy, freedom of contract and freedom from formalities contained in article 11 of the CISG.[1] These principles also form the foundation of the Principles of European Contract Law ('"PECL") as expressed in articles 1:102, 2:101(2) and 2:106 and should therefore form the governing principles in the interpretation of any contract as well as its modification or termination.[2] Art 1:102 PECL however, pertinently subjects the principle of freedom of contract to the principle of good faith and fair dealing, which may not be excluded.[3]

b. The first object of article 29 CISG is to reinforce the principle that any agreed modification or termination will be valid in whatever form it is made or contained.[4] Its second object is also to eliminate an important difference in approach between civil and common law, namely clearly establishing that no consideration is necessary for any amendment to be valid.[5] However, it also entrenches the time honored principle that where parties have by agreement voluntarily restricted their ability to modify or terminate a contract by requiring formalities for such actions, that that agreement will be valid and enforceable.[6]

c. Article 2:106 PECL which deals with written modification clauses, differs somewhat from article 29 CISG in that it merely creates a presumption of invalidity where there is a clause requiring formalities for modification or termination.[7] There is, therefore, an evidentiary onus on the party who wants to rely on an oral modification or termination to prove that the parties nevertheless intended such modification or termination despite not complying with the agreed formalities. This approach, which is less strict than the approach found in the CISG, is based on the principle of good faith.[8]

d. The application of the principle of good faith may as a consequence be useful in interpreting article 29 CISG, especially in respect of the abuse exception in article 29(2). Where the reliance of a party on the written modification or termination clause would be against the dictates of good faith under the circumstances, such reliance ought not to be countenanced.[9]

e. Although the PECL does not specifically state that contracts may be informally modified or terminated, it is clear from the provisions of article 2:101(2), which entrenches the freedom of form, and article 2:106(1) that that is the actual point of departure in these principles. The CISG and the PECL therefore are based on the same principle of freedom of formalities as a starting point.

f. The PECL, however, does not accord the same strong effect to oral modification clauses as the CISG as outlined in paragraph b. above. It may therefore well result in the PECL following a more lenient approach than the CISG. An informal agreement to modify or terminate a contract may therefore be interpreted as "an implied abrogation" of the clause itself in terms of the PECL, whereas this is not the case with the CISG.[10]

g. Both article 29 CISG and article 2:106 PECL seem to apply only where the modification or restriction clause is contained in a "written agreement."[11] In interpreting what constitutes a "written agreement" the PECL may be helpful as article 13 CISG only extends the concept of writing to telegrams and telexes. Article 1:301 PECL defines "written statements" as "[including] communications made by telegram, telex, telefax, and electronic mail and other means of communications capable of providing a readable record of the statement on both sides." A readable record produced by a telephone receiver which is capable of converting sound into writing is not a written statement under Article 1:301(6).[12] It is generally recognised that article 13 CISG contains a gap in that it only refers to older forms of technology and does not provide for more modern forms of electronic communications such as e-mail, fax or internet communications.[13] It is suggested that the meaning of "written" should be extended to include these forms of communications in accordance with the definition contained in article 1:301 PECL.[14] The latter has the advantage of being clear, practical and technologically neutral without losing sight of the object of the written formality, namely preserving an objective reproducible record of the communication between the parties.

h. The issue of merger clauses is not dealt with in these remarks as they are more appropriately covered under article 8 CISG which deals with the interpretation and proof of agreements.[15]

i. The exception created in article 29(2) CISG is one area where the application of article 29 may lead to interpretational difficulties.[16] The rule is based on principles contained in the so-called "Mißbrauchseinwand" of German law or the "nemo suum venire contra factum proprium" principle of Roman law or the doctrine of waiver and estoppel of Anglo-American law.[17]

j. Under article 2:106 PECL, it is required that the reliance by the party acting upon the informal modification or termination must have been reasonable. It would seem that this requirement is justifiable also in respect of the CISG viewed in the light of the principle of good faith.[18] Where reliance was not reasonable under the circumstances, a party ought not to be allowed to use the defense contained in article 29(2) CISG.[19] The requirement of reasonableness under the PECL is further refined in article 1:302 of the PECL.[20] In considering what is "reasonable", it should be asked what persons under the same circumstances and acting in good faith would have considered to be reasonable. In deciding what is "reasonable", all relevant factors should be taken into consideration, including the nature and purpose of the contract, the circumstances of the case and the usages and practices of the trade or profession.[21] These generally reflect the behavior of reasonable parties. This test could equally well be utilized in respect of the CISG.[22]

k. A further issue which crops up is whether the provisions of the exception in article 29(2) can be upheld in circumstances where writing is obligatory due to a country making a reservation in terms of article 96 of the CISG to article 12.[23] It is suggested that even in those instances oral modifications or terminations should be upheld where article 29(2) circumstances are found.[24] The decision in Belgium 2 May 1995 District Court Hasselt [25], however, seems to indicate that courts would be willing to apply the exception even in those instances.

l. Neither the CISG nor the PECL makes provision for the case where the parties have agreed to further formalities such as signature or witnesses for an amendment or termination.[26] In this respect there may be a divergence between the approach of the CISG and the PECL. It is submitted that it would be in accordance with the provisions of article 29 CISG that the parties are held bound to such formalities and that non-complying modifications or terminations would be void, unless the abuse exception contained in article 29(2) CISG should apply.[27] In filling the gap under article 2:106(1) it is submitted that in accordance with the basic premises of that article, such requirements will only constitute a presumption and will not be valid and binding per se as under the CISG. This divergence is a result of the more lenient approached followed in terms of the PECL outlined in paragraphs b. and f. above.


FOOTNOTES

* Professor of Private Law, Faculty of Law, University of South Africa; Advocate of the High Court of South Africa.

A match-up of CISG Article 29 with the following provisions of the Principles of European Contract Law is available: PECL Articles 2:105 [Merger clause], 2:106 [Written modification only]; also with PECL 2:107 [Promises binding without acceptance] <http://cisgw3.law.pace.edu/cisg/text/peclcomp29.html>. The match-ups are accompanied by:

-   Comments on these provisions authored by the European Commission describing and illustrating the manner in which they are to be applied; and
-   Notes that compare these PECL provisions with continental and common law domestic rules, doctrine and jurisprudence.

1. Ferrari F in Schlechtriem PH & Bacher K Kommentar zum einheitlichen UN Kaufrecht 3rd ed (2000 München) Art 7 Rn 48; Magnus U in Martinek M (ed) J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetze: Wiener UN-Kaufrecht (1999 Berlin) Art 7 Rn 42, Art 29 Rn 1, 2 & 9; Karollus M in Honsell H Kommentar zum UN Kaufrecht (1997 Berlin) Art 29 Rn 9; Witz W, Salger in Salger HC & Lorenz M Internationales Einheitliches Kaufrecht (2000 Heidelberg) Art 29 Rn 8; Kritzer AH Guide to the Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods (1989 Deventer) 115.

2. See Lando O & Beale H Principles of European Contract Law Parts I and II - Combined and Revised (2000 The Hague) Comments to Article 1:102; 2:101 and 2:106; Bonell MJ 1995 Tulane LR 1134-1135. See art 1:201.

3. As to the role of good faith in the CISG, see Schlechtriem/Ferrari Art 7 Rn 26. For a thorough and up to date discussion of the good faith principle in the CISG, see the Editorial Remarks to Article 7 by Magnus U at <http://cisgw3.law.pace.edu/cisg/principles/uni7.html#um>. For a contrary view on how the application of good faith in the CISG should be limited as a result of the drafting history of the CISG and the clear text of the CISG, see the Editorial Remarks on the Concept of Good Faith in the CISG and the PECL by Felemegas J at <http://cisgw3.law.pace.edu/cisg/text/peclcomp7.html#er>. See also Schlechtriem Art 29 Rn 10; Honnold Rn 204 footnote 8; Salger Art 29 Rn 16; Kritzer 235; Honsell/Karollus Art 29 Rn 18 & 19; Enderlein F. & Maskow D, International Sales Law - United Nations Convention on Contracts for the International Sale of Goods (1992 New York) <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html>, Art 7 par 5 at p 56 and Art 29 para 5.1 at p 125. See also Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html> para 5.4. These principles are underpinned by the principle of bona fides contained in Art 7 CISG. In this regard, see the comments in Mexico 30 November 1998 Compromex Arbitration (Dulces Luisi v. Seoul International) <http://cisgw3.law.pace.edu/cases/981130m1.html>; and Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html>.

4. Enderlein & Maskow par 1.1 at p. 123; Salger Art 29 Rn 13; Honsell/Karollus Art 29 Rn 1 & 8; Schlechtriem Art 29 Rn 3; Magnus Art Rn 7 & 9; and United States 22 September 1994 Federal District Court [New York] (Graves v. Chilewich) <http://cisgw3.law.pace.edu/cases/940922u1.html>. In the case Germany 22 February 1994 Oberlandesgericht [Appellate Court] Köln <http://cisgw3.law.pace.edu/cases/940222g1.html>, the court held that although a termination could not be construed from silence or inaction in itself, silence or inaction in conjunction with other factors may provide sufficient evidence of an acceptance of an offer of termination. It is suggested that this also holds true for modifications. See Switzerland 5 October 1999 Obergericht [Appellate Court] Basel <http://cisgw3.law.pace.edu/cases/991005s1.html> where the principle was discussed but the court found that on the facts an amendment had not been proven; and Belgium 17 May 2002 Hof van Beroep [Appellate Court] Gent <http://cisgw3.law.pace.edu/cases/020517b1.html> where the failure of the one party to respond to the letter of another was interpreted as constituting an acceptance of the amendment offered by the other party. On this issue, see also Enderlein & Maskow para 6.1 at p. 125.

5. Commentary of the UNCITRAL Secretariat on Article 27 of the 1978 Draft, Document A/CONF.97/5 p 27-28 as reprinted in Honnold J., Documentary History of the Uniform Law for International Sales (1989 Deventer) and at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-29.html>. See also John E. Murray, Jr., excerpt from 8 Journal of Law and Commerce (1988) 11-51 "An Essay on the Formation of Contracts and Related Matters under the United Nations Convention on Contracts for the International Sale of Goods" <http://cisgw3.law.pace.edu/cisg/text/murray29.html>). This has been confirmed in the following decisions: United States 17 December 2001 Federal District Court [Michigan] (Shuttle Packaging Systems v. Tsonakis et al.) <http://cisgw3.law.pace.edu/cases/011217u1.html>; ICC Arbitration Case No. 7331 of 1994 <http://cisgw3.law.pace.edu/cases/947331i1.html>.

6. Honsell/Karollus Art 29 Rn 1,9 & 11; Salger Art 29 Rn 13 & 14; Magnus Art 29 Rn 7 & 9.

7. Lando & Beale 154-155.

8. See Comment A to PECL Article 2:106, Lando & Beale 155.

9. In this regard, see the comments in Mexico 30 November 1998 Compromex Arbitration (Dulces Luisi v. Seoul International) <http://cisgw3.law.pace.edu/cases/981130m1.html>; and Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html>. For an evaluation of some case law on good faith, see Paul J. Powers "Defining the Undefinable: Good Faith and the United Nations Convention on Contracts for the International Sale of Goods" 18 Journal of Law and Commerce (1999) 346-348 at <http://cisgw3.law.pace.edu/cisg/biblio/powers.html#inter>. In respect of the PECL on this issue, see Lando & Beale 155;

10. See Schlechtriem Art 29 Rn 5.

11. Schlechtriem Art 29 Rn 9; Honsell/Karollus Art 29 Rn 12.

12. Lando & Beale Comment to Article 1:301(6).

13. Eiselen S "Electronic Commerce and the UN CISG" 1996 EDI Law Review 21 <http://cisgw3.law.pace.edu/cisg/biblio/eiselen1.html>; Schlechtriem Art 13 Rn 2; Magnus Art 29 Rn 13.

14. See also Honnold JO Uniform Law for International Sales Under the 1980 United Nations Convention 3rd ed. (1999 Deventer) Rn 130; Eiselen 21. For a contrary view on electronic communications, see Schlechtriem Art 13 Rn 2.

For a further relevant discussion of CISG Art. 13, see Ulrich G. Schroeter, "Editorial remarks on the manner in which the PECL may be used to interpret or supplement CISG Article 13" <http://cisgw3.law.pace.edu/cisg/text/peclcomp13.html#er>.

15. See the Editorial Remarks by Stanivukovic M on Article 8 CISG and its PECL counterpart provisions < http://cisgw3.law.pace.edu/cisg/text/peclcomp8.html#er>.

16. See the discussion in Honsell/Karollus Rn 17-23; Robert A. Hillman, "Article 29(2) of the United Nations Convention on Contracts for the International Sale of Goods: A New Effort at Clarifying the Legal Effect of 'No Oral Modification' Clauses", 21 Cornell International Law Journal (1988) 449-466 at <http://cisgw3.law.pace.edu/cisg/biblio/hillman2.html> p 458, 460 and 465. In the case law the exception has been mentioned but denied in cases where there was a lack of any evidence showing reliance. See Belgium 2 May 1995 District Court Hasselt (Vital Berry Marketing v. Dira-Frost) <http://cisgw3.law.pace.edu/cases/950502b1.html>. However in Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html> the arbitrator did apply the exception relying on the principle of estoppel.

17. Schlechtriem Art 29 Rn 10; Honnold Rn 204 footnote 8; Salger Art 29 Rn 16; Kritzer 235; Honsell/Karollus Art 29 Rn 18 & 19; Enderlein & Maskow para 5.1 at p 125 See also Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html> para 5.4 These principles are also underpinned by the principle of bona fides contained in Art 7 CISG. In this regard see the comments in Mexico 30 November 1998 Compromex Arbitration (Dulces Luisi v. Seoul International) <http://cisgw3.law.pace.edu/cases/981130m1.html>; and Austria 15 June 1994 Vienna Arbitration proceeding SCH-4318 <http://cisgw3.law.pace.edu/cases/940615a4.html>.

18. This would seem to be the scope of the decision in Germany 22 May 1992 Landgericht [District Court] Mönchengladbach <http://cisgw3.law.pace.edu/cases/920522g1.html> where the court says that when someone receives a document such as an expert's opinion rendered on behalf of the other party, the latter should be held bound to that document as a declaration of will if the party receiving it should have understood it as such and in fact understood it as such looking at it objectively.

19. Magnus Art 29 Rn 17; Honsell/Karolus Art 29 Rn 20. See also the discussion of the necessity to apply this exception with flexibility in Salger Art 29 Rn 17.

20. For a discussion of the concepts of "reasonableness" and "unreasonableness" in the PECL, see Lando & Beale 126-128.

21. Lando & Beale 126.

22. In respect of the concept of reasonableness as a general principle of the CISG, see <http://cisgw3.law.pace.edu/cisg/text/reason.html>.

23. See for instance the decision in Russia 1997 High Arbitration Court [Ruling No. 4, case 2] <http://cisgw3.law.pace.edu/cases/970325r1.html>.

24. The decision in Russia 16 February 1998 High Arbitration Court: Information Letter 29 <http://cisgw3.law.pace.edu/cases/980216r1.html> deals with the general requirement without referring to the exception in Art 29(2).

25. Belgium 2 May 1995 District Court Hasselt (Vital Berry Marketing v. Dira-Frost) <http://cisgw3.law.pace.edu/cases/950502b1.html>.

26. Honsell/Karollus Art 29 Rn 14.

27. Enderlein & Maskow par 3.2 at p 124; Honnold Rn 202. Note the contrary view of Honsell/Karollus Art 29 Rn 14 who argues that unless there is a clear indication that the parties indeed insisted on stricter formalities, that there should be no presumption that the parties required such strict compliance.


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