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Reproduced with permission from 6 Temple International and Comparative Law Journal (1992) 193-215

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Effect of Choice of Law Provision

[O]ne . . . potential trap for the contract drafter occurs when both the offeror and offeree specify in their forms that the law of the contract is the law of their own jurisdiction. Article 1 of the CISG provides that it applies to parties from different States "(a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State."[165] Thus, if the parties have designated the law of a Contracting State as the law of the contract, then the CISG is applicable even though the parties do not specifically mention the CISG.[166] Notwithstanding this provision, the CISG is not mandatory and the parties may exclude its application or "derogate from or vary the effect of any of its provisions."[167] If these two provisions are read in conjunction with one another, it would seem that simply selecting the law of a Contracting State as the law of the contract would not exclude the CISG. The drafter would have to be more specific and state in his or her choice of law provision that the CISG is not to apply. Therefore, standard forms, sent by businesses located in two Contracting States that simply select the law of their own states as the law of the contract and do not specifically exclude the CISG, would arguably not be conflicting. Rather, they would be electing the CISG due to the application of Article 1.[168]

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FOOTNOTES

* Professor, College of Business and Management, University of Maryland at College Park; B.S., Juniata College; M.B.A., University of Maryland; J.D., American University.

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165. CISG, supra note 11, art. 1.

166. CISG Draft, supra note 50, art. 1, cmt. 8.

167. CISG, supra note 11, art. 6.

168. See Rendell, supra note 17, at 25. Rendell suggests the following exclusionary clause: "The parties intend to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods to this contract. Accordingly, this contract shall not be subject to the United Nations Convention on Contracts for the International Sale of Goods, but rather the contract shall be governed by and construed in accordance with the law of the State of Texas." Id.

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

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