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Reproduced with permission from the author and 15 Journal of Law and Commerce (1995) 1-126

excerpts from

Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing

Franco Ferrari [*]

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CISG and Party Autonomy

1. General Remarks

Notwithstanding the presence of all the requirements for the application of the Convention, the CISG does not necessarily have to apply. [586] Indeed, by virtue of Article 6 of CISG, [587] the parties may exclude the Convention's application. [588]

By providing for this possibility, the draftsmen of the Convention de quo reaffirmed one of the general principles [589] embodied in the 1964 Hague Conventions, [590] that is, the principle according to which the primary source of the rules governing international sales contracts is party autonomy. [591] Thus, the drafters clearly acknowledged the Convention's dispositive nature [592] and the "central role which party autonomy plays in international commerce and, particularly, in international sales." [593]

As far as party autonomy is concerned, [594] it must be pointed out that Article 6 of the Vienna Sales Convention refers to two different lines of cases: [595] one where the Convention's application is excluded in its entirety (by means of the application of a principle of private international law), [596] the other where the parties derogate from the substantive rules [597] of the Convention. [598] These two situations differ from each other in that the former does, according to the CISG, not encounter any restrictions, [599] whereas the latter is limited in the cases where at least one of the parties has its place of business in a Contracting State whose legislation requires a contract of sale to be concluded in or evidenced by writing and therefore has made an Article 96 reservation. [600] This reservation prevents the application of the principle of "informality," that is, the parties are not allowed to derogate from the writing requirement. [601]

2. Implied Exclusion of the CISG and Choice of the Applicable Law

Party autonomy also played a very important role under the ULIS. [602] A comparison of Article 6 CISG and its "direct predecessor," [603] Article 3 ULIS, could even lead to the conclusion that under ULIS party autonomy was more widely recognized, [604] since the ULIS expressly stated that its exclusion could also be made implicitly. [605] However, this provision was later criticized. [606] Therefore, the express reference to the possibility of an implicit exclusion was not retained by the CISG, [607] even though at the Vienna Conference a proposal to reintroduce that express reference was made. [608] However, this does not mean that under the CISG the exclusion always has to be made expressly. [609] This is evidenced, inter alia, [610] by the fact that "the majority of delegations was . . . opposed to the proposal according to which a total or partial exclusion of the Convention could only be made 'expressly.'" [611] Consequently, the lack of express reference to the possibility of an implicit exclusion must not be regarded as precluding such possibility. Rather it has a different meaning: "to discourage courts from too easily inferring an 'implied' exclusion or derogation.'' [613] Therefore, an implicit exclusion must be regarded as possible, but there must be clear indications that such an exclusion is really wanted, [614] that is, there must be a real -- as opposed to a theoretical, fictitious or hypothetical -- agreement of exclusion, [615] not unlike under the ULIS. [616]

This is not a merely theoretical problem, as evidenced by the variety of implicit exclusions used in international commerce. A typical [617] form of implicit exclusion is represented by the parties' choice of the applicable national law. [618] There is no doubt that such a choice must be considered as being an effective exclusion of the CISG, at least where the applicable law chosen by the parties is the law of a non-Contracting State. [619] This was true under the ULIS as well. [620]

The choice of the law of a Contracting State as the law to govern the contract poses more difficult problems. [621] For instance, is the Vienna Sales Convention applicable when the parties agree upon American law being the proper law of their contract? In similar situations, it has been suggested by legal writers as well as in a recent Italian arbitral award [Ad hoc Arbitral Tribunal, Florence 19 April 1994], [622] that the indication of the law of a Contracting State ought to amount to an (implicit) exclusion of the Convention's application, because otherwise the indication of the parties would have no practical meaning. [623] However, under the CISG, not unlike under the ULIS, [624] this solution is not tenable. [625] The indication of the law of a Contracting State, if made without particular reference to the domestic law of that State, [626] does not exclude the Convention's application, [627] as recently confirmed by several German court decisions [OLG Köln 22 February 1994; OLG Koblenz 17 September 1993; OLG Düsseldorf 8 January 1993]. [628] And this is true even where the law of a Contracting reservatory State is chosen as the applicable law. [629]

The application of the Convention does not make the national law irrelevant, as suggested; the indication of the law of a Contracting State must be interpreted as both making the CISG applicable (as part of the chosen law) and as determining the law applicable to the issues not governed by the Convention itself, such as the validity issues, [630] thus avoiding resort to the complex rules of private international law in order to determine the law applicable to the issues not governed by the CISG. [631]

Nevertheless, if under the 1964 Hague Conventions the parties have established practices between themselves according to which the reference to the law of a Contracting State had to be interpreted as an exclusion of the Uniform Sales Law, the parties' reference to a Contracting State of the 1980 Vienna Sales Convention can also be interpreted as an implicit exclusion of the foregoing Convention. [632]

3. Exclusion of the CISG by Virtue of Standard Contract Forms and Choice of Forum

The choice of the law of a non-Contracting State does not constitute the sole kind of implicit exclusion which can be used to bar the Convention's application. [633] Indeed, in certain situations, and this was also true under the 1964 Hague Conventions, [634] the use of standard contract forms can exclude the Convention's application, [635] as long as (a) their contents are so profoundly influenced by the rules and the concepts of a specific legal system that their use is incompatible with the rules of the Convention and implicitly manifests the parties' intention to have the contract governed by that legal system [636] and (b) their use tends at the same time to exclude the application of the CISG as a whole. [637] Where, on the contrary, standard contract forms are intended to merely regulate specific issues in contrast with the Convention, one must presume that only a partial exclusion of the CISG is wanted. [638]

Furthermore, the choice of a forum as well can lead to the exclusion of the Convention's application, [639] and the same is true with reference to the choice of an arbitration tribunal, [640] provided that two requirements are met: (a) one must be able to infer from the parties' choice their clear intention to have the domestic law of the State where the forum or arbitral tribunal is located govern their contract, [641] and (b) the forum or arbitral tribunal must not be located in a Contracting State, [642] otherwise the Vienna Sales Convention is applicable. [643]

Finally, the parties can exclude the Convention's application by agreeing that specific issues of their contract be subject to specific provisions of a law different than the Uniform Sales Law, provided, however, that those issue are fundamental ones [644] and that from the subjection of those issues to a domestic sales law one can infer the parties' clear intention to have the contract governed by a law different from the uniform one, as pointed out by various court decisions rendered in respect of the Hague Conventions. [645]

It is, however, not always necessary that the parties agree upon the exclusion of the CISG for it to be inapplicable. [646] Indeed, the buyer can exclude the CISG unilaterally: by declaring that the goods are bought for personal use. According to Article 2(a) CISG, a similar statement will lead to the exclusion of the CISG's applicability.

4. Express Exclusions of the Vienna Sales Convention

In addition to problems concerning the implicit exclusion of the Vienna Sales Convention, problems can also arise with respect to its explicit exclusion. In this respect, two lines of cases have to be distinguished: the exclusion with and the exclusion without indication of the law applicable to the contract between the parties. [647]

Nulla quaestio in the case in which the Convention's application is excluded with the indication of the applicable law, an indication which can, not unlike under the Hague Conventions, [648] also be made in the course of a legal proceeding, at least where this is admissible by virtue of the applicable rules of civil procedure, [649] even though the parties will normally make their choice before the conclusion of the contract. [650] In this case, the judge has to apply the law chosen by the parties, [651] and it is this law on the basis of which he has to decide upon the validity of the choice of law, at least where the applicable rules of private international law correspond to those laid down in the 1980 Rome Convention. [652] Where the parties' choice of law is invalid, the contract should be governed by the law to be determined on the basis of the rules of private international law of the forum, [653] rather than by the Vienna Sales Convention. [654]

Quid iuris, however, in the case of an express exclusion without indication of the applicable law? [655] In this case, the preferable view, held by most legal scholars, [656] is the one according to which "if the parties merely agree that the Convention does not apply, rules of private international law would determine the applicable domestic law." [657] And whenever these rules refer to the law of a Contracting State, its domestic sales law, not the uniform one, should apply. [658]

Undoubtedly, this rule applies in the cases in which the Convention is excluded in toto. [659] However, its application to the cases in which the Convention's application is excluded only partially created disagreement among legal scholars. Some authors favor the view according to which the issues dealt with in the excluded provisions must be settled, according to Article 7(2) of the CISG, [660] in conformity with the Convention's general principles. [661] The better view seems to the contrary: the rules to substitute the excluded CISG provisions are to be determined, not unlike the case of an exclusion in toto of the Convention, by applying the rules of private international law (of the forum State) [662] -- without resorting to the general principles of the CISG -- otherwise the exclusion would have no practical meaning. Indeed, it would make little sense to substitute specific solutions provided for by the Convention and which, therefore, are necessarily in conformity with its general principles, with solutions "in conformity with the general principles on which [the Convention] is based." [663]

5. Applicability of the CISG and Opting-In

As stated, the Vienna Sales Convention expressly provides for the parties' possibility of excluding its application. [664] On the contrary, the Convention does not address the issue of whether the party may make the Convention applicable when it would otherwise not apply, [665] that is, where the prerequisites for its application are not met. [666]

This gap did not exist in the ULIS which contained a provision, Article 4, [667]that expressly provided for the parties' possibility of "opting-in." [668] However, this omission should not be interpreted as preventing the parties from being entitled to do so. [669] This is evidenced by the fact that the proposal (made by the German Democratic Republic), [670] according to which the Convention should apply even where the preconditions for its application are not met, was rejected on the sole ground that to get to the admission of such possibility, an express provision was not necessary, [671] because of the already existing principle of party autonomy. [672]

As far as the significance of the parties' "opting-in" is concerned, it must be emphasized that by virtue of the "opting-in," the Convention becomes part of the contract not unlike any other contractual clause, [673] consequently, it must be presumed, that "[t]he mandatory rules of the applicable law are . . . not affected by this [opting-in]." [674]

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Go to entire text of Ferrari commentary


FOOTNOTES

* Professor of Comparative Private Law, Katholieke Universiteit Brabant, Tilburg, the Netherlands; J.D. (Honors), University of Bologna, Italy; LL.M., University of Augsburg, Germany. Copyright, Franco Ferrari.

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586. See Ferrari, supra note 159, at 76.

587. For a detailed overview of the history of Article 6 of CISG, see Note, supra note 471, at 727-729.

588. See Article 6 CISG: "The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions."

589. See Eduard Wahl, Art. 17, in KOMMENTAR ZUM EINHEITLICHEN KAUFRECHT, supra note 166, 121 at 133-135, listing "party autonomy" among the general principles of the ULIS.

590. Despite some textual differences, Article 6 of CISG is based upon Article 3 of ULIS, as has often been pointed out; see, e.g., Michael J. Bonell, Art. 6, in COMMENTARY ON THE INTERNATIONAL SALES LAW, supra note 12, 51 at 51 (stating that Article 6 of CISG is based upon Article 3 of ULIS). Also see Rolf Herber, Art. 6, in KOMMENTAR ZUM EINHEITLICHEN UN-KAUFRECHT, supra note 48, 83 at 83 (stating the same).

Article 3 of ULIS reads as follows: "The parties to a contract of sale shall be free to exclude the application thereto of the present Law either entirely or partially. Such exclusion may be express or implied."

591. For a similar statement, see Audit, supra note 38, at 37 (stating that "the Convention makes the parties' will the primary source of the sales contract.) See also Hoyer, supra note 199, at 41 (stating the same); Magnus, supra note 156, at 101 (making a similar statement). According to Fritz Enderlein, Die Verpflichtung des Verkäufers zur Einhaltung des Lieferzeitraums und die Rechte des Käufers bei dessen Nichteinhaltung nach dem UN-Übereinkommen über Verträge über den internationalen Warenkauf, PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 313, 314 (1991), party autonomy constitutes the "main principle" of the CISG.

592. For this statement, see Carbone, supra note 32, at 78; Carbone & Luzzatto, supra note 123, at 131; Ferrari, supra note 159, at 110; Herber, supra note 590, at 84; Piltz, supra note 21, at 64; Reinhart, supra note 139, at 26; Sacerdoti, supra note 107, at 744; Volken, supra note 88, at 92; Wang, supra note 131, at 188; Claude Witz, L'exclusion de la Convention des Nations Unies sur les contrats de vente internationale de marchandises par la volonté des parties (Convention de Vienne du 11 avril 1980). RECEUIL DALLOZ-SIREY 107, 107 (1990).

Note, however, that even though the principle of party autonomy is widely accepted, there were some States which expressed reservations about it; "[t]heir concern was that, in practice, the principle could be abused by the economically stronger party imposing his own national law or contractual terms far less balanced than those contained in the Convention." Bonell, supra note 590, at 51. See also 1 UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW YEARBOOK 168 (1968-1970); 2 UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW YEARBOOK 43-44 (1971); 3 UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW YEARBOOK 73 (1973).

593. Michael J. Bonell, Art. 6, NUOVE LEGGI CIVILI COMMENTATE 16, 16 (1989).

For similar affirmations, see, e.g., Enderlein, supra note 591, at 316; Hoyer, supra note 199, at 41; Schlechtriem, supra note 187, at 21.

Note, however, that according to Enderlein & Maskow, supra note 58, at 48, the possibility, laid down in Article 6 of CISG, of excluding the Convention's application has not only been introduced in order to pay tribute to the "myth" of party autonomy as such, but also because this possibility "may facilitate the adoption of the Convention by certain States because it allows those business circles which cannot get to like it or, at least, not at once, to evade and/or grants them a longer period of adoption, thus lessening possible resistance."

594. Note, that Carbone, supra note 32, at 78, has compared the reaffirmation of party autonomy as a basic principle of the CISG to the "recognition of an exigency the satisfaction of which is necessary for the development of international commerce." See also Rovelli, supra note 146, at 102, stating that the introduction of Article 6 of CISG and, therefore, the recognition of party autonomy was a "political need."

595. For this statement, see also Bonell, supra note 590, at 53.

596. In private international law scholarship, this kind of party autonomy is generally called internationalprivatrechtliche Parteiautonomie; for the use of this expression, see, e.g., Schlechtriem, supra note 187, at 21.

597. This kind of party autonomy is called materiellrechtliche Parteiautonomie; for this expression, see, e.g., Sacerdoti, supra note 107, at 745-746, where the author criticizes, however, the distinction between materiellrechtliche and internationalprivatrechtliche Parteiautonomie.

For a reference to this case, see also Schlechtriem, supra note 92, at 35, stating that "[s]ubstantively, any rule of the Convention can be altered or rejected by the parties."

598. For the distinction of the two cases mentioned in the text, see also Bonell, supra note 593, at 17; Ferrari, supra note 159, at 111.

599. For this statement, see Hoyer, supra note 199, at 41.

600. See Article 96 CISG:

"A Contracting State whose legislation requires contracts of sale to be concluded in or evidenced by writing may at any time make a declaration in accordance with article 12 that any provision of article 11, article 29, or Part II of this Convention, that allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention to be made in any form other than in writing, does not apply where any party has his place of business in the State."

601. For this conclusion, see also Carbone, supra note 32, at 78; Sacerdoti, supra note 107, at 743-744.

602. For a similar statement, see Rolf Herber, Art. 3, in KOMMENTAR ZUM EINHEITLICHEN KAUFRECHT, supra note 166, 19 at 19; Hoyer, supra note 199, at 41.

603. Bonell, supra note 593, at 17.

604. This has already been pointed out by Carbone & Luzzatto, supra note 123, at 132.

605. See supra note 590 for the text of Article 3 ULIS.

606. See Ferrari, supra note 159, at 112.

607. See Samson, supra note 323, at 931.

608. The representatives of both England and Belgium made proposals to reintroduce a reference to the possibility of implicitly excluding the Convention's application; for a reference to these proposals, see Herber, supra note 590, at 83-84; OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 21, at 85-86 & 249-250; Schlechtriem, supra note 187, at 22 n.98.

609. This conclusion, admissibility of an implicit exclusion, is favored by most legal scholars; see, e.g., Audit, supra note 38, at 38; Carbone & Luzzatto, supra note 123, at 132; Czerwenka, supra note 194, at 170; Samuel K. Date-Bah, The United Nations Convention on Contracts for the International Sale of Goods, 1980: Overview and Selective Commentary, 11 REV. GHANA L. 50, 54 (1979); Ferrari, supra note 159, at 113; Garro & Zuppi, supra note 389, at 98; Herber & Czerwenka, supra note 43, at 42; Hoyer, supra note 199, at 41; Lacasse, supra note 389, at 37; Magnus, supra note 647, at 126; Barry Nicholas, The Vienna Convention on International Sales Law, 105 LAW Q. REV. 201, 208 (1989); Reinhart, supra note 139, at 27; Richards, Note, supra note 147, at 237; Schlechtriem, supra note 187, at 21; Winship, supra note 122, at 1.35; Witz, supra note 592, at 108.

See Rosett, supra note 99, at 281, where the author criticizes the draftsmen who, although they foresaw the problems which the lack of an express reference to the possibility of implicitly excluding the Convention would cause, "chose to provide little guidance." Id.

610. In support of the thesis that maintains that the Vienna Sales Convention can also be excluded implicitly, it can be argued that the recognition of such possibility corresponds to a general trend in international conventions. Article 7(1) of the 1985 Hague Convention on the Law Applicable to Contracts for the International Sale of Goods (reprinted in 24 INT'L LEGAL MAT. 1573 (1985)), for instance, lays down the rule according to which the Convention can be implicitly excluded. The same is true as far as the 1980 EEC Convention on the Law Applicable to Contractual Obligations is concerned; for a reference to these conventions in discussing the issue de quo, see also Honnold, supra note 25, at 128.

611. Bonell, supra note 590, at 52.

For the proposal mentioned in the text, see OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 27, at 86 & 249-250.

612. However, several authors have argued that in order to be effective, the exclusion of the Convention's application must be explicit; see, e.g., Isaak Dore & James E. Defranco, A Comparison of the Non-Substantive Provisions of the UNCITRAL Convention on the International Sale of Goods and the Uniform Commercial Code, 23 HARV. INT'L L.J. 49, 53 (1982), stating that "unlike the U.C.C. . . . the Convention does not seem to recognize implied agreements which exclude the application of the Convention. The Convention may therefore govern contracts which the parties by their implied agreement might have assumed to be governed by domestic law."

For a similar conclusion, see also Dore, supra note 215, at 532; Caroline D. Klepper, The Convention for the International Sale of Goods: A Practical Guide for the State of Maryland and Its Trade Community, 15 MD. J. INT'L LAW & TRADE 235, 238 (1991); Note, supra note 471, at 728; Robert S. Rendell, The New U.N. Convention on International Sales Contracts: An Overview, 15 BROOK. J. OF INT'L LAW 23, 25 (1989).

613. Bonell, supra note 590, at 55.

For a similar justification of the lack of reference to the possibility of implicitly excluding the application of the Convention, see also OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 27, at 17 (stating that "[t]he second sentence of the ULIS, article 3, providing that 'such exclusion may be express or implied' has been eliminated lest the special reference to 'implied' exclusion might encourage courts to conclude, on insufficient grounds, that the Convention has been wholly excluded"); Schlechtriem, supra note 92, at 35 (stating that "[i]n contrast to Article 3 sentence 2 of ULIS, the Convention does not mention the possibility of an 'implied' exclusion, but this does not mean that a tacit exclusion is impossible. The intent behind deleting the word 'implied' was to prevent the courts from being too quick to impute exclusion of the Convention"). For similar statements, see also Ferrari, supra note 159, at 114-115; Magnus, supra note 156, at 104; Witz, supra note 68, at 144.

614. For a similar affirmation, see Michael J. Bonell, La nouvelle Convention des Nations-Unies sur les contrats de vente internationale de marchandises, DROIT ET PRATIQUE DU COMMERCE INTERNATIONAL 7, 13 (1981) (stating that a "tacit exception may only be admitted if there are valid indications showing the parties 'true' intention"); Enderlein & Maskow, supra note 58, at 48 (suggesting that there must be clear indications that an implicit exclusion is wanted); Rovelli, supra note 146, at 105 (stating that "of course, the determination of the applicable law can result from an implicit choice of the parties, but it must be 'certain': this means that the intention of implicitly excluding the Convention must be real, not hypothetical").

615. For a similar statement, see Honnold, supra note 25, at 128 (stating that "although an agreement to exclude the Convention need not be 'express', the agreement may only be implied from facts pointing to real -- as opposed to theoretical or fictitious -- agreement"). For similar statements, see also Magnus, supra note 156, at 105.

Note, however, that according to Note, supra note 471, at 749, the possibility of implicitly excluding the Convention's application contrasts with the need for certainty of law.

616. See BGH, December 4, 1985, published in RECHT DER INTERNATIONALEN WIRTSCHAFT 214 (1986).

617. For this evaluation, see also Magnus, supra note 156, at 105.

618. As far as the validity of the choice of law is concerned, it must be evaluated on the ground of law applicable to this issue. According to Article 2 of the 1955 Hague Convention on the Law Applicable to Contracts for the International Sale of Goods, the electio iuris is governed by the law chosen by the parties; the same is true according to Article 3(4) and 8 of the 1980 EEC Convention on the Law Applicable to Contractual Obligations. For further reference to this problem, see Ferrari, supra note 159, at 115-116.

619. For similar statements, see, e.g., Bonell, supra note 590, at 56 (stating that there is an "[implicit] indication of the parties' intention to exclude the application of the Convention, either entirely or partially, whenever they have chosen as the proper law of their contract the law of a non-Contracting State . . ."); Carbone & Luzzatto, supra note 123, at 132 (stating the same); Audit, supra note 38, at 39; Enderlein et al., supra note 48, at 58 (stating the same); Garro & Zuppi, supra note 389, at 95 (stating the same); Rudiger Holthausen, Vertraglicher Ausschluß des UN-Übereinkommens über internationale Warenkaufverträge, RECHT DER INTERNATIONALEN WIRTSCHAFT 513, 515 (1993) (stating the same); Magnus, supra note 156, at 105; Piltz, supra note 21, at 48 (stating the same); Sacerdoti, supra note 107, at 746 (stating the same).

But according to Honnold, supra note 25, at 129. "[w]hen the places of business of the seller and buyer are in different Contracting States, the applicability of the Convention mandated by Article 1(1)(a) is not undercut when the rules of private international law point to a non-Contracting State."

620. See Herber, supra note 602, at 20.

621. For an overview of this issue, see Magnus, supra note 156, at 105-106.

622. See Arbitral Award, April 19, 1994, published in DIRITTO DEL COMMERCIO INTERNAZIONALE 861 (1994).

For a comment on this award, see Jacopo Cappuccio, La deroga implicita nella Convenzione di Vienna del 1980, DIRITTO DEL COMMERCIO INTERNAZIONALE 867 (1994), agreeing with the arbitral award which excluded the applicability of the Vienna Sales Convention to a contract containing a choice of law clause which made applicable the law of a Contracting State (Italy).

623. This solution has been favored, for instance, by Franz Bydlinski, Diskussionsbeitrag, in DAS UNCITRAL-KAUFRECHT IM VERGLEICH ZUM ÖSTERRECHISCHEN RECHT, supra note 119, 48 at 48; Karollus, supra note 226, at 381; Karollus, supra note 59, at 38-39; F.A. Mann, Anmerkung zu BGH, Urteil vom 4.12.1985, JURISTENZEITUNG 647, 647 (1986); Walter A. Stoffel, Ein neues Recht des internationalen Warenkaufes in der Schweiz, SCHWEIZERISCHE JURISTENZEITUNG 169, 173 (1990); Lajos Vekas, Zum persönlichen und räumlichen Anwendungsbereich des UN-Einheitskaufrechts, RECHT DER INTERNATIONALEN WIRTSCHAFT 342, 346 (1987).

624. This view was predominant under the 1964 Hague Conventions; for a reference to this view in legal writing, see, e.g., Enderlein & Maskow, supra note 58, at 49; Herber, supra note 602, at 21; Gert Reinhart, Dix ans de jurisprudence de la République Fédérale d'Allemagne à propos de la loi uniforme sur la vente internationale d'objets mobiliers corporels, UNIFORM L. REV. 424 (1984); Witz, supra note 592, at 110.

625. This view was also expressed on the occasion of the Vienna Conference, when a large number of delegations rejected proposals by Canada and Belgium (for these proposals, see OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 27, at 250) according to which the domestic sales law, and not the Vienna Sales Convention, would have to be applied whenever the parties indicated the law of a Contracting State as the proper law for their contract.

For a reference to the rejection of the foregoing proposals as argument in favor of the view expressed in the text, see Bonell, supra note 590, at 56; Magnus, supra note 156, at 106.

626. There is no doubt that the Uniform Sales Law's application is excluded where the parties refer merely to domestic law; for a similar conclusion, see Bonell, supra note 593, at 18; Ferrari, supra note 159, at 117; Schlechtriem, supra note 92, at 35. Consequently, where the parties state, for instance, that "the contract is governed by American law as laid down in the U.C.C.," the Convention's application should be considered as being excluded.

For further examples of clauses that successfully exclude the Convention's application, see B. Blair Crawford, Drafting Considerations under the 1980 United Nations Convention on Contracts for the International Sale of Goods, 8 J.L. & COM. 187, 193 (1988); E. Allan Farnsworth, Review of Standard Forms or Terms under the Vienna Convention, 21 CORNELL INT'L L.J. 439, 442 (1988); Herber, supra note 590, at 87; Holthausen, supra note 619, at 515; David L. Perrott, The Vienna Convention 1980 on Contracts for the International Sale of Goods, INT'L CONTRACT LAW & FINANCE REV. 577, 580 (1980).

627. This view is shared by the majority; see, e.g., Audit, supra note 38, at 39; Bonell, supra note 590, at 56; Farnsworth, supra note 626, at 442; Ferrari, supra note 159, at 117; Herber, supra note 274, at 104; Herber & Czerwenka, supra note 43, at 44; Kritzer, supra note 56, at 100-101; Plantard, supra note 299, at 321; Schlechtriem, supra note 187, at 22; Pierre Thieffry, Les nouvelles règles de la vente internationale, DROIT ET PRATIQUE DU COMMERCE INTERNATIONAL 369, 373 (1989); Peter Winship, International Sales Contracts under the 1980 Vienna Convention, 17 UCC L.J. 55, 65 (1984).

628. See OLG Köln, February 22, 1994, published in RECHT DER INTERNATIONALEN WIRTSCHAFT 972 (1994); OLG Koblenz, September 17, 1993, reported in RECHT DER INTERNATIONALEN WIRTSCHAFT 934 (1993); OLG Düsseldorf, January 8, 1993, published in PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 412 (1993).

629. For this solution, see also Herrmann, supra note 290, at 95; Magnus, supra note 156, at 106.

Contra, in the sense that in this line of cases the CISG should not apply, Audit, supra note 38, at 39 n.3.

630. See Article 4 of the CISG,

"This Convention governs only the formation of the contract of the sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided for in this Convention, it is not concerned with:

(a) the validity of the contract or of any of its provisions or of any usage;

(b) the effect which the contract may have on the property in the goods sold."

631. For a similar conclusion in respect of the consequences of the parties' choice of the law of a Contracting State as the proper law for their contract, see Enderlein & Maskow, supra note 58, at 49, stating that

"When a state participates in the Convention, CISG can be assumed to be part of its domestic law so that additional reference to it could be considered as superfluous and, for the reference to make sense, as an exclusion of the CISG. But the application of the Convention does in no way make the application of the other parts of the national law irrelevant. . . . Therefore, it must be recommended to the parties to determine the national law that is applicable in addition to the Convention . . . so that they can avoid the uncertainties involved in determining that law, using the conflict-of-law norms."

632. For this solution, see Ferrari, supra note 159, at 118; Holthausen, supra note 619, at 516.

633. See also Magnus, supra note 156, at 105 ff.

634. For a very detailed discussion of the possibility of implicitly excluding the application of both the ULIS and ULF by, among other means, adopting standard contract forms, see, e.g., Friedrich Graf van Westphalen, Allgemeine Geschäftsbedingungen und Einheitliches Kaufgesetz (EKG), in EINHEITLICHES KAUFRECHTS UND NATIONALES OBLIGATIONENRECHT, supra note 16, 49; Rainer Hausmann, Stillschweigender Ausschluß der Einheitlichen Kaufgesetze durch allgemeine Geschäftsbedingungen, RECHT DER INTERNATIONALEN WIRTSCHAFT 186 (1977); Gert Reinhart, Erschwerter Ausschluß der Anwendung des Einheitlichen Kaufgesetzes, PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 288 (1986).

635. For a similar statement, see also Herrmann, supra note 290, at 95-96.

636. The possibility of an implicit exclusion of the Convention's application by the use of standard contract forms has also been favored by Bonell, supra note 590, at 56-57, stating that:

"the use of general conditions or of standard form contracts whose content is influenced by principles and rules typical of the domestic law of a particular State, is certainly an element from which one could infer the intention of the parties to have that domestic law rather than the Convention govern their contract. Before reaching such a conclusion, however, due consideration should be given to other circumstances of the case."

This view is shared by other authors as well; see, e.g., Audit, supra note 38, at 39; Herber, supra note 270, at 426; Schlechtriem, supra note 187, at 21.

637. See also Magnus, supra note 156, at 108, stating that standard contract forms which contrast with specific provisions of the CISG should not per se be looked upon as excluding the CISG as a whole. This was true under the Hague Conventions as well; see, for instance, OLG Hamm, May 7, 1979, reported in Schlechtriem & Magnus, supra note 168, at 141.

638. For a similar solution, see Enderlein & Maskow, supra note 58, at 49 (stating that "[o]n no account can the exclusion of the Convention be deduced merely from agreement on such terms of contract which contradict specific provisions, because deviating individual exclusions are indeed compatible with the CISG"). The view is also held by Ferrari, supra note 159, at 119; Witz, supra note 592, at 111.

639. Note to this regard that it has been asserted that "[i]f the parties have not provided otherwise, but have included a choice of forum clause, courts are inclined to rule that the choice of forum indicates a choice of that jurisdiction's substantive law." Ronald A. Brand, Nonconvention Issues in the Preparation of Transnational Sales Contracts, 8 J.L. & COM. 145, 167 (1988).

For practical applications of the aforementioned tendency, see Tzotrzis v. Monard Line A/B, [1968] W.L.R. 406, 411-412 (C.A.); Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 14 n.15 (1972).

640. For this conclusion, see Holthausen, supra note 619, at 517-518; Magnus, supra note 156, at 107.

641. Several authors have pointed out that, even though the choice of a forum or of an arbitral tribunal may indicate the parties' intention to exclude the Vienna Sales Law, that choice by itself is not sufficient to bar the Convention's application; for similar affirmations, see Herber & Czerwenka, supra note 43, at 43 (stating that an arbitration clause or the choice of a forum might indicate the parties' intention to exclude the Convention); Huber, supra note 270, at 426 (stating that the choice of an arbitral tribunal by itself does not lead to the exclusion of the Convention); Schlechtriem, supra note 92, at 35 (stating that the choice of an arbitral tribunal does not by itself imply that the parties wish to exclude the Convention's application).

642. For this conclusion, see Ferrari, supra note 159, at 120; Herber, supra note 590, at 87; Magnus, supra note 156, at 107.

643. For this solution see Gerhard Walter, KAUFRECHT, HANDBUCH DES SCHULDRECHTS 632 (Tübingen 1987) (stating that whenever the arbitral tribunal chosen by the parties is located in a Contracting State, the Vienna Sales Convention applies).

644. For this prerequisite, see Herber, supra note 590, at 87.

645. See, e.g., BGH, November 26, 1980, published in NEUE JURISTISCHE WOCHENSCHRIFT 1156 (1981); LG Bamberg, October 12, 1983, published in PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 266 (1984).

646. See, however, Herber, supra note 590, at 84, stating that the exclusion has to result from two manifestations of will.

647. For this distinction, see Ferrari, supra note 159, at 121.

648. Under the 1964 Hague Conventions, the indication of the applicable law could be made during the legal proceedings; for a reference to this rule in respect of ULIS and ULF, see Volker Stötter, Stillschweigender Ausschluß der Anwendbarkeit des internationalen Kaufabschlußübereinkommens und des Einheitlichten kaufgesetzes, RECHT DER INTERNATIONALEN WIRTSCHAFT 37, 38 (1980); Christoph von der Seipen, Zum Ausschluß des Einheitlichten Kaufrechts im deutschenglischen Rechtsverkehr, PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 244, 246 (1984).

For judicial applications of this principle, see, e.g., BGH, November 26, 1980, published in NEUE JURISTISCHE WOCHENSCHRIFT 1156, 1156 (1981); BGH, October 26, 1983, reproduced in RECHT DER INTERNATIONALEN WIRTSCHAFT 151 (1984).

649. In Germany, for instance, it is commonly understood that the indication of the applicable law can also be made after the legal proceeding has started; for this affirmation, see, in legal writing, Czerwenka, supra note 194, at 169-170; Holthausen, supra note 619, at 515; Ulrich Magnus, Zum räumlich-internationalen Anwendungsbereich des UN-Kaufrechts und zur Mängelruge, PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 390, 391 (1993).

Most recently, the foregoing principle was applied in OLG Düsseldorf, January 8, 1993, published in PRAXIS DES INTERNATIONALEN PRIVAT- UND VERFAHRENSRECHTS 412 (1993).

650. In this respect, it has been stated that

"[o]ne might expect that, in practice, the parties would normally indicate their intention at the beginning of their negotiations, or at least before the contract is concluded. Nonetheless, there is nothing to prevent them from deciding at a later stage, even after the initiation of a legal proceeding relating to their contract. . . . It should, however, be borne in mind that any exclusion of or derogation from the Convention agreed upon after the conclusion of the contract amounts to a modification of the contract, which in some cases may require a particular form." Bonell, supra note 590, at 58.

651. For this solution see also Sacerdoti, supra note 107, at 746.

652. Although it is common knowledge that the question of whether the parties' choice of law is valid falls outside the sphere of application of the Convention, there is uncertainty about the law on the basis of which to decide whether the parties have validly excluded the Convention, as has been pointed out, for instance, by Bonell, supra note 590, at 60-61 (stating that "given the special nature of a choice-of-laws clause, it is uncertain whether the validity of the parties' consent is to be decided according to the proper law as objectively determined, the law chosen by the parties, or the substantive rules of the forum." In this respect, "see Article 10 of the 1985 Hague Convention on the Law Applicable to Contracts for the International Sale of Goods, according to which whenever the parties' agreement as to the applicable law is either express or clearly demonstrated by the terms of the contract and the conduct of the parties, the existence and validity of that agreement shall be determined by the law chosen"). Id.

653. This solution is shared by Bonell, supra note 590, at 61; Ferrari, supra note 159, at 121.

654. See, however, Herber & Czerwenka, supra note 43, at 44 (favoring the view according to which the invalidity of the parties' choice of law leads to the application of the Vienna Sales Convention).

655. Note, that according to some authors a choice of law without indication of the applicable law was considered inadmissible; for this view, see, e.g., Rabel, supra note 164, at 53.

Contra, in the sense that this view is no longer tenable, see most recently Michael J. Bonell, UN-Kaufrecht und des Kaufrecht des Uniform Commercial Code im Vergleich, RabelS ZEITSCHRIFT FÜR AUSLÄNDISCHES UND INTERNATIONALES PRIVATRECHT 20, 28 (1994).

656. This solution has been favored, for instance, by Herber & Czerwenka, supra note 43, at 41-42; Sacerdoti, supra note 107, at 746; Schlechtriem, supra note 187, at 21.

657. Honnold, supra note 25, at 126.

For the same conclusion, see Bonell, supra note 593, at 19 (stating, however, not only that in the cases in which the parties failed to indicate the applicable law, one must determine the applicable national law by resorting to the rules of private international law, but also that those rules have to be the ones of the forum). For similar conclusions, see also Ferrari, supra note 159, at 122; Magnus, supra note 156, at 104.

658. For this solution, see also Ferrari, supra note 159, at 122; Herber, supra note 590, at 85; Karollus, supra note 59, at 38; Magnus, supra note 156, at 104; Siehr, supra note 145, at 600.

659. For this affirmation, see also Bonell, supra note 590, at 59.

660. See Article 7(2) CISG:

"Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."

661. For this view, see, e.g., Bonell, supra note 590, at 59; Herber, supra note 590, at 88-89; Herber & Czerwenka, supra note 43, at 42; Heuzé, supra note 177, at 83; Magnus, supra note 156, at 109.

662. The author has already expressed this view in Ferrari, supra note 159, at 122.

663. Article 7(2) CISG.

664. See supra text accompanying notes 587 & 588.

665. For a discussion of this problem, see also Audit, supra note 38, at 40; Ferrari, supra note 159, at 124-126.

666. Note, that according to Bonell, supra note 590, at 63-64, the issue of the possibility of "opting-in" arises only where State courts are involved, since generally the parties are not allowed to select by virtue of an "internazionalrechtliche" choice of law directly an international convention, instead of a particular domestic law.

"The situations may be different if the parties agree to submit the disputes arising from their contract to arbitration. Arbitrators are not necessarily bound by a particular domestic law. This is self-evident, if they are authorized by the parties to decide ex aequo et bono. . . . But even in the absence of such an authorization there is a growing tendency to permit arbitrators to base their decisions on principles and rules different from those adopted by State courts. This tendency has recently received a significant confirmation by the UNCITRAL Model Law on International Commercial Arbitration, where it is expressly stated that "[t]he arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute" (Article 28(1)). . . . Following this approach the parties to an international contract would be free to indicate in the Convention the "rules of law" according to which the arbitrators shall decide any dispute, with the result that the Convention would directly apply regardless of whether or not the positive and negative conditions for its application are fulfilled in the single case."

In this regard, see also supra, the text accompanying notes 307-319.

667. See Article 4 ULIS:

"The present law shall also apply where it has been chosen as the law of the contract by the parties, whether or not their places of business or their habitual residences are in different States and whether or not such States are Parties to the Convention dated the 1st day of July 1964 relating to a Uniform Law on the International Sale of Goods, to the extent that it does not affect the application of any mandatory provisions of the law which would have been applicable if the parties had not chosen the Uniform Law."

668. For a reference to Article 4 of ULIS in scholarly writing, see, e.g., Herber & Czerwenka, supra note 43, at 45; Honnold, supra note 25, at 129-130.

669. For the possibility of "opting-in," see also Enderlein & Maskow, supra note 58, at 51 (stating that "the Convention can be interpreted in such a way that its application . . . can be agreed. In this case the substantive and territorial, and hence personnel and time scope of application, can be extended"); Schlechtriem, supra note 92, at 36 (stating that "[n]ot only can the parties agree to reject the application of the Convention, but they can also agree to apply the Convention when the preconditions for application have not been met"); Winship, supra note 122, at 1.34 (stating that "[a]lthough the Conference rejected an amendment which would have expressly permitted parties to derogate from Articles 2 and 3 the debate suggests that delegations could not agree on how to express the limitations on party autonomy required by 'mandatory' national laws. Parties should not be foreclosed, therefore, from agreeing to have the Convention apply to a transaction otherwise excluded as long as the policy behind the specific exclusion is not contravened").

670. For this proposal, see OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 27, at 86 (reporting the proposal according to which Article 6 should have been amended as follows: "Even if this Convention is not applicable in accordance with articles 2 or 3, it shall apply if it has been validly chosen by the parties").

671. For similar reasoning, see Ferrari, supra note 159, at 125; Honnold, supra note 25, at 130; Magnus, supra note 156, at 111-112.

672. For this argument, see, e.g., the considerations of the delegate of the Republic of Korea at the Vienna Conference, reported in OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 27, at 252 (stating that "the provision proposed by the German Democratic Republic was not necessary because of the principle of the autonomy of the will of the parties. It [is] thus always possible for the parties to decide to apply the Convention, even in the cases covered by article 2 and 3").

673. For a similar statement, see Audit, supra note 38, at 40; Luzzatto, supra note 21, at 511-512.

674. Enderlein & Maskow, supra note 58, at 51.

For a similar conclusion, see Bonell, supra note 593, at 19 (stating that the result of the parties' "opting-in" "will be that the individual provisions of the Convention like any other contractual term may bind the parties only to the extent that they are not contrary to mandatory rules of the proper law of contract, i.e., the domestic law which by virtue of the rules of private international law of the forum governs the transaction in question"); Naon, supra note 147, at 101 (stating the same); Herber & Czerwenka, supra note 43, at 45 (stating the same); Honnold, supra note 25, at 134 (stating that "[r]ules of domestic law that are 'mandatory' are not disturbed when the Convention becomes applicable by virtue of an agreement by the parties"); Magnus, supra note 156, at 111; Sacerdoti, supra note 107, at 746 (stating the same).

Note, however, that a similar statement had already been made at the Vienna Conference; see, OFFICIAL RECORDS OF THE UNITED NATIONS CONFERENCE, supra note 27, at 252, reporting the Egyptian delegate's statement: "[T]he draft amendment was an attractive one but was unnecessary because of the principle of the autonomy of the will of the parties. If the latter agreed to apply the Convention, even in cases where it would normally not apply, their wish should be respected. Naturally, if the applicable law did not admit certain provisions of the Convention, that law would prevail. But it was not for the Convention to settle this question."


Pace Law School Institute of International Commercial Law - Last updated August 16, 1999
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