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ANNOTATED TEXT OF CISG
Article 7 words and phrases

General principles of the CISG

EDITOR: Albert H. Kritzer

We introduced our discussion of general principles of the CISG with comments on rules vs. principles, and remarks on CISG general principles of party autonomy and the unity theme, and themes related to reasonableness and good faith.


Rules vs. principles

"Rules. They are precepts attaching a definite, detailed legal consequence to a definite, detailed state of facts . . . Principles. These are authoritative starting points for legal reasoning, employed continually and legitimately where cases are not covered or are not fully or obviously covered by rules in the narrower sense . . ." Rheinstein, U. Chicgo L. Rev. (1957) at 597, 600.

"General principles do not necessarily have pre-set conditions for application. Instead, they merely constitute 'rules of optimal application' which means that they may be complied with in varying degrees. The required degree of compliance depends not only on the actual but also on the legal options open to the target group. Application of general principles therefore requires a substantial process of weighing up contradictory principles and rules. General principles are therefore always subject to a continual discussion about their effectiveness and scope.

"General principles of law thus express a general truth which serves as a basic guideline for the application of the law, whereas rules are the practical formulation of the principle and, for reasons of expedience, may vary and depart, to greater or lesser extent, from the principle from which they spring. This teleological aspect reduces the level of foreseeability with respect to cases in which general principles are applied, as well as their practical workability. However, general principles of law also have the important task of explaining the function of individual legal institutions in the context of a legal system. They assist the legal institutions in that they appear not only as a (simple) group of standards and rules but as a group with meaning and therefore as a 'system'. Reference to general principles of law therefore allows for a certain degree of self-control of the decision-maker in that the solution found for an individual legal problem has to be integrated into the network of coherent general principles . . . thereby investing the courts with a kind of 'quasi-law-making power'. . .". Berger, "The Creeping Codification of the Lex Mercatoria", Kluwer (1999) 164 [citations omitted].


Party autonomy

Party autonomy -- the role of the contract made by the parties -- has been referred to not only as a general principle,[1] but as the "overriding principle" [2] and the "dominant theme of the Convention",[3] "a theme of deeper significance than may be evident at first glance".[4] Where the contract has spoken, the Convention protects arrangements of the parties. As stated by Honnold:

"The Convention does not override domestic law that outlaws certain transactions and invalidates prescribed contracts; outside this narrow area the Convention gives firm protection to the contractual arrangements made by the parties. . . . Moreover, the parties may exclude the Convention, and the terms of their contract will prevail over any inconsistent provision of the uniform law. . . . In short . . . the Convention's rules play a supporting role, supplying answers to problems that the parties have failed to solve by contract".[5]

Similarly, Sono states that "the rules contained in the Convention are only supplementary for those cases where parties did not provide otherwise in their contract".[6] And Farnsworth states that "in case of a conflict between the contract and the Convention, it is the contract -- not the Convention -- that controls."[7] In other words, all rules of the Convention -- whether recited in its specific provisions or to be deduced from its general principles -- "play a supporting role, supplying answers to problems that the parties have failed to solve by contract."[8]


FOOTNOTES

1. Secretariat Commentary, Official Records, p. 20. para. 3.

2. Secretariat Commentary, Official Records, p. 35. para. 7.

3. Legal Analysis accompanying the President's transmittal of the Convention to the United States Senate. 98th Congress, 1st Session, Senate Treaty Doc. No. 98-9 (September 21, 1983), review of Art. 6.

4. John O. Honnold, "Uniform Law for International Sales Under the 1980 United Nations Convention", 2d ed. (Klawer 1991) 47. As stated by Hyland, "In order to avoid the policy questions and to remove all state interest in the matter, problems susceptible to protective legislation have been excluded from the Convention's sphere of application -- consumer sales, rights of third parties, validity of the contract, liability for death or personal injury. . . . As a result, maximum scope has been accorded to the sales contract. Business decisions have been left to the business people. Within the scope of the Convention they are their own legislators". Richard Hyland, "Conformity of Goods to the Contract Under the United Nations Sales Convention and the Uniform Commercial Code", in: Einheitliches Kaufrecht und Nationales Obligationenrecht, Schlechtriem ed. (Baden-Baden: Nomos Verlagsgesellschaft 1987) 330.

5. Honnold, supra note 4 at 48

6. Kazuaki Sono, "Formation of International Contracts Under the Vienna Convention: A Shift Above the Comparative Law", in: International Sale of Goods [Dubrovnik Lectures], Sarcevic/Volken eds. (Oceana 1986) 14.

7. E. Allan Farnsworth, "Rights and Obligations of the Seller", in: 1980 Vienna Convention on the International Sales ofGoods" [Lausanne Colloquium] (Schulthess Polygraphischer Verlag 1985) 84. The Secretariat Commentary is to the same effect. "Since [article 6] of the Convention permits the parties to exclude its application or to derogate from or vary the effect of any of its provisions, it follows that in case of conflict between the contract and the Convention the [parties must fulfill [their] obligations as required by the contract." Official Records, p. 44.

8. John O. Honnold, supra note 4 at 48.


The unity theme

Another express principle is regard for the "international character" of the Convention and "the need to promote uniformity in its application". Article 7(1). A minimal application of this principle would seem to be that where in a given case there is a reasonable basis for resolving an issue within the confines of the Convention and a reasonable basis for resolving it by resort to the rules of private international law, a tribunal should opt for the former approach. Honnold states:

"Article 7(2), in calling for gap-filling through use of the Convention's 'general principles', avoids the intrusion of diverse rules of domestic law. A corollary is the fact that only development under the aegis of the Convention contributes to the body of international jurisprudence and doctrine. . . . For example, let us assume that a question 'governed by the Convention' but not specifically solved by its provisions is answered by recourse to private international law and the domestic law of State A. This solution will not be available when the question arises again and rules of private international law point to the domestic law of States B, C or D . . . On the other hand, recourse to 'general principles' of the Convention will contribute to international body of case law that will support the Convention's objective to unify the law."[1]

Hyland sees regard for party autonomy (cited above as "the dominant theme of the Convention") as the best means of adherence to the unity theme of the Convention. He states:

"[D]omestic sales laws are so bewilderingly varied that there can be little consistency in the interpretation of the Convention if courts impose their local views on the parties. The only potentially unifying factor is the international sales contract itself. I argue that there can be hope for uniformity only if the parties are both permitted and required to create their own obligations. Despite its appearance, this radically contractual interpretation of the Convention is not meant as a neoclassical revival of the 19th century commitment to party autonomy. It represents rather a pragmatic attempt to protect the Convention from the significant danger of divergent interpretation."[2]


FOOTNOTES

1. John O. Honnold, "Uniform Words and Uniform Application. The 1980 Sales Convention and International Juridical Practice", in: Einheitliches Kaufrecht und Nationales Obligationenrecht [hereinafter Einheitliches Kaufrecht], Schlechtriem ed. (Baden-Baden: Nomos Verlagsgesellschaft 1987) 140.

2. Richard Hyland, "Conformity of Goods to the Contract Under the United Nations Sales Convention and the Uniform Commercial Code", in: Einheitliches Kaufrecht at 305. Hyland elaborates: "By focusing attention on the sales contract rather than on legal provisions with a millenial tradition of idiosyncratic interpretation, the contract principle performs the functions required by the Convention's interpretation provision: it safeguards the Convention's international character and promotes uniformity and good faith in international trade. . . . It is worth emphasizing that the justification for the contract principle is pragmatic. The contract principle offers a potential for uniformity in a world of varied and competing policy goals in the domestic laws of sales. The argument is not intended to suggest that states are without power to impose their visions on the parties, or that party autonomy is the most desirable foundation for the law of contract. The contract principle is designed simply as an expedient to meet one of the most important goals of both the business and the legal communities, namely that like cases be treated alike." Id. at 331.


Reasonableness

Citing numerous references to reasonableness in the Convention,[1] Schlechtriem states that "the rule that the parties must conduct themselves according to the standard of the 'reasonable person' . . . must be regarded as a general principle of the Convention."[2]