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A Study of the Interplay between the Conventions Governing International Contracts of Sale

Analysis of the 1955 Hague Convention on the Law Applicable to Contracts of International Sales of Movable Goods; the 1980 Rome Convention on the Law Applicable to Contractual Obligations; and the 1980 United Nations Convention on Contracts for the International Sale of Goods

Carolina Saf
Queen Mary and Westfield College
September 1999


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6.5.3 The Vienna Convention

Article 11

A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirements as to form. It may be proved by any means, including witnesses.

Article 11 establishes one of the basic rules of the Convention: the theory of consensualism, i.e. that a contract is not subject to any specific formal requirements. This principle is widely accepted in the international commercial trade. Under Article 11 an international contract of sale governed by the Convention is not subjected to any requirements as to form, and consequently any such requirements under the domestic law of the Contracting States will not apply to these contracts irrespective of the nature or purpose served. In order to enhance uniformity and prevent abuse of the provision through characterisation, such a requirement should, in accordance with Article 7(1), be characterised according to its function, i.e. if non-compliance with the rule renders the contract invalid, it is a formal requirement.[364]

The provision is non-mandatory, so the parties are perfectly able to agree on their own requirements as to form, e.g. a stipulation that the acceptance should be in writing, or that the conclusion of the contract is conditioned on written confirmation. Such an agreement can be express or implied, the result of a usage or practice under Article 9, or a term in a standard contract. A unilateral demand will not be efficient, though, and an implied agreement should be a rare exception. However, in accordance with the principle of informality of transactions, such a provision for contractual formality may lose its effect due to subsequent waiver. Neither is a subsequent agreement by the parties subject to any formal requirements and it may be proved by any means.[365]

Article 12

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 writing does not apply where any party has his place of business in a Contracting State which has made a declaration under article 96 of this Convention. The parties may not derogate from or vary the effect of this article.

Article 12 accommodates the special demands of some Contracting States in regard of requirements of written form for contract of international sales for the purposes of validity, evidence and administrative control. It does not concern any requirement other than writing and its operation is confined to Articles 11, 29 and Part II of the Convention. That is to say, those provisions related to formation of the contract and its modification and termination by agreement. Any other notices provided for by the Convention are not within the scope of Article 12 and may thus be delivered by any means appropriate in the given circumstances. The provision is mandatory, i.e. the parties cannot contract out of it.[366]

It must be emphasised that Article 12 determines only the effect of a declaration made by a Contracting State under Article 96, i.e. that the principle of informality in Article 11 is not to apply. It is not concerned with the actual requirements as to form which are to be observed. The question as to which requirements, if any, are to be observed is dealt with below in the context of Article 96.

Article 96

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 that State.

In the negotiation of the Convention it was proposed that the effect of a declaration under Article 96 would be that the formal requirement of the law of the declaring Contracting State should be applied to the contract. However, this proposal was rejected, since it would make the formal requirements of that law too widely applicable.[367]

Despite this rejection, the true effect of an Article 96 declaration remains a matter of controversy. In fact, there are two school on the effect of an Article 96 reservation: the minority [368], which argues that the true effect is the preservation of the formal requirements of the declaring Contracting State, because the Convention should respect the underlying purposes of such legislation, e.g. protection against claims unsupported by a written agreement. However, where there are two competing sets of formal requirements, it is not clear whether only one should be applied exclusively, or both cumulatively.

The majority, on the other hand, argues that the issue should be solved under the conflict rules of the lex fori, because these formal requirements would otherwise not only be made internationally applicable mandatory law, but they would also exclude the conflict rules of the other Contracting States.[369] Ziegel, who belongs to neither of the schools, suggests that "obviously … a writing will be required", but is not sure of which law should be complied with, and therefore concludes that such a reservation is better avoided.[370]

Arguably, the majority view is the more appropriate one, since it better respects the sovereignty of both declaring and non-declaring Contracting States. That is to say, the principle of informality is not imposed on the declaring Contracting States, and nor is any writing requirements imposed on the non-declaring Contracting States. The issue, as prior to the Convention, is simply solved under the [traditional] conflict rules of the lex fori.

Accordingly, the effect of such a declaration is that any of the enumerated provisions will not apply to contracts where at least one of the parties has her relevant place of business in a declaring Contracting State. That is to say, in these situations formal validity, or the lack of it rather, is excluded from the Convention and thus an Article 96 reservation reduces the scope of the Convention. This means that even where the law of a non-declaring Contracting State is identified as the applicable law, its domestic law, rather than the Convention rules, should be applied, i.e. the reservation is universal and should therefore be respected by any court, not just a court in a declaring Contracting State.[371]

Consequently, whether any formal requirements will be applied to the contract in question depends entirely on the applicable [domestic] law as identified by the conflict rules of the lex fori, e.g. Article 9 of the Rome Convention. This approach was also followed in a Hungarian case, where the Hungarian court held that the governing law in matters of form was German domestic law and thus the contract concluded by telephone was valid, even though Hungary is a declaring Contracting State.[372]

Schlechtriem, on the other hand, is of the opinion that where the applicable law is the law of a non-declaring Contracting State, the relevant provisions of the Convention should apply rather than its domestic rules. "Otherwise, rules as to form would be applicable which would not apply at all unless that Contracting State had made a reservation. That is not unfair towards the reservation state, since it would also have to accept freedom as to form if the forum state's conflict rules required the application of domestic `freedom of form´ rules."[373]

However, it is argued that this suggestion does not take into account that the effect of an Article 96 reservation as towards the parties to a contract is declared mandatory in Article 12. It would be both contradictory and contrary to this mandatory rule if the parties are not allowed to contract into the relevant provisions, but they will still apply indirectly where the applicable law as to form is the law of a non-declaring Contracting State. In addition, Articles 12 and 96 aim at the full exclusion of the principle of informality, whereas Article 94 only aims at a regional restriction of the application of the Convention rules in favour of a regional uniform law. Therefore, it is argued that there are no similar justifications for an exception to the universal application of an Article 96 reservation, as there are in regard of one under Article 94.[374]

A different matter is that commercial prudence dictates that where one of the parties has her relevant place of business in a declaring Contracting State, its requirements for writing should be observed, at least where it cannot be ruled out that the matter may be decided by a court in that declaring Contracting State.

Argentina, Belarus, Chile, China, Estonia, Hungary, Lithuania, the Russian Federation and Ukraine have taken the reservation under Article 96.

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FOOTNOTES

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364. Rajski, in Bianca & Bonell, pp. 121 et seq.; JT 1991/92, p.1, at p. 17; and Schlechtriem, Art. 11, paras. 3 et seq.

365. Ibid.

366. Rajski, in Bianca & Bonell, pp. 125 et seq.; and Schlechtriem, Art. 12, paras. 1 - 6.

367. Rajski, in Bianca & Bonell, pp. 127 and 658.

368. E.g. Ferrari; Reinhart; Rehbinder; Stoffel; and Medwedew / Rosenberg, cited by Schlechtriem, cited by Schlechtgriem, Art. 12, para. 2, f.n. 5. See also Honnold in his 3rd edition.

369. Rajski, in Bianca & Bonell, pp. 127 and 658; Flechtner, para. II.A.2; and Schlechtriem, Art. 12, para. 2

370. Ziegel, Article 12, para. 2.

371. Rajski, in Bianca & Bonell, pp. 127 and 659; Flechtner, para. II.A.2; Herber, in Schlechtriem, Art.96, paras. 1 et seq.; and Schlechtriem, Art. 12, paras. 1 et seq. See also supra, section 4.4.3.

372. Fovárosi Biróság [Metropolitan Court] Budapest, March 24, 1992, 12.G.41.471/1991/21.

373. Schlechtriem, Art. 12, para. 3.

374. Supra, section 4.4.3.

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Pace Law School Institute of International Commercial Law - Last updated January 18, 2000
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