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GUIDE TO CISG ARTICLE 29

Secretariat Commentary (closest counterpart to an Official Commentary)


Guide to the use of this commentary

The Secretariat Commentary is on the 1978 Draft of the CISG, not the Official Text, which re-numbered most of the articles of the 1978 Draft. The Secretariat Commentary on article 27 of the 1978 Draft is quoted below with the article references contained in this commentary conformed to the numerical sequences of the Official Text, e.g., article 27 [draft counterpart of CISG article 29].

To the extent it is relevant to the Official Text, the Secretariat Commentary on the 1978 Draft is perhaps the most authoritative source one can cite. It is the closest counterpart to an Official Commentary on the CISG. A match-up of this article of the 1978 Draft with the version adopted for the Official Text is necessary to document the relevancy of the Secretariat Commentary on this article. See the match-up for this article for a validation of citations to this Secretariat Commentary. This match-up indicates that article 27 of the 1978 Draft and CISG article 29 are substantively identical.


Text of Secretariat Commentary on article 27 of the 1978 draft
[draft counterpart of CISG article 29]   [Modification or termination of contract by agreement]

PRIOR UNIFORM LAW

UNCITRAL Arbitration Rules, article 1 and 30.

COMMENTARY

1. This article governs the modification and abrogation [termination by agreement] of a contract.

[The only substantive difference between article 27 of the 1978 Draft and CISG article 29 is the CISG's substitution of the phrase "termination by agreement" for the word "abrogation". The Summary Records of Committee Meetings of the 1980 Vienna Diplomatic Conference contain the following explanation. "Mr. Medvedev (Union of Soviet Socialist Republics) said that . . . the meaning of the English word 'abrogation' . . . did not seem to be very clear and [his delegation] would like to see it clarified. Mr. Farnsworth (United States of America) said that the word 'abrogation' did not correspond to a precise legal concept in the United States. It could apply either to termination by mutual agreement or to unilateral termination. However, the term was used several times in article 27 [draft counterpart of CISG article 29] in the sense of termination by mutual agreement. It could therefore be considered to have the same meaning throughout the text of the Convention. Therefore, it would perhaps be preferable to replace it by the expression 'termination by mutual agreement', which would be less ambiguous" (OFFICIAL RECORDS, p. 272).]

General rule, paragraph (1)

2. Paragraph (1), which states the general rule that a contract may be modified or abrogated [terminated] merely by agreement of the parties, is intended to eliminate an important difference between the civil law and the common law in respect of the modification of existing contracts. In the civil law an agreement between the parties to modify the contract is effective if there is sufficient cause even if the modification relates to the obligations of only one of the parties. In the common law a modification of the obligations of only one of the parties is in principle not effective because "consideration" is lacking.

3. Many of the modifications envisaged by this provision are technical modifications in specifications, delivery dates, or the like which frequently arise in the course of performance of commercial contracts. Even if such modifications of the contract may increase the costs of one party, or decrease the value of the contract to the other, the parties may agree that there will be no change in the price. Such agreements according to article 27(1) [draft counterpart of CISG article 29(1)] are effective, thereby overcoming the common law rule that "consideration" is required.

4. In addition, article 27(1) [draft counterpart of CISG article 29(1)] is applicable to the question as to whether the terms in a confirmation from or in an invoice sent by one party to the other after the conclusion of the contract modify the contract where those terms are additional or different from the terms of the contract as it was concluded. If it is found that the parties have agreed to the additional or different terms, article 27(1) [draft counterpart of CISG article 29(1)] provides that they become part of the contract. As to whether the silence on the part of the recipient amounts to an agreement to the modification of the contract, see article 16(1) [draft counterpart of CISG article 18(1)] and the commentary to that article.

5. A proposal to modify the terms of an existing contract by including additional or different terms in a confirmation or invoice should be distinguished from a reply to an offer which purports to be an acceptance but which contains additional or different terms. This latter situation is governed by article 17 [draft counterpart of CISG article 19].

Modification or abrogation [termination by agreement] of a written contract, paragraph (2)

6. Although article 10 [draft counterpart of CISG article 11] provides that a contract of sale need not be concluded in or evidenced by writing, the parties can reintroduce such a requirement. A similar problem is the extent to which a contract which specifically excludes modification or abrogation [termination by agreement] unless in writing, can be modified or abrogated [terminated] orally.

7. In some legal systems a contract can be modified orally in spite of a provision to the contrary in the contract itself. It is possible that such a result would follow from article 10 [draft counterpart of CISG article 11] which provides that a contract governed by this Convention need not be evidenced by writing. However, article 27(2) [draft counterpart of CISG article 29(2)] provides that a written contract which excludes any modification or abrogation [termination by agreement] unless in writing cannot be otherwise modified or abrogated [terminated].

8. In some cases a party might act in such a way that it would not be appropriate to allow him to assert such a provision against the other party. Therefore, article 27(2) [draft counterpart of CISG article 29(2)]. goes on to state that to the extent the other party has relied on such conduct, the first party cannot assert the provision.

9. It should be noted that the party who wishes to assert the provision in the contract which requires any modification or abrogation [termination] to be in writing is precluded from doing so only to the extent that the other party has relied on the conduct of the first party. This may mean in a given case that the terms of the original contract may be reinstated once the first party denies the validity of the non-written modification.

Example 27A: A written contract for the sale to A over a two-year period of time of goods to be manufactured by B provided that all modification or abrogations [terminations by agreement] of the contract had to be in writing. Soon after B delivered the first shipment of goods to A, A's contracting officer told B to make a slight modification in the design of the goods. If this modification was not made, he would instruct his personnel to reject future shipment and not to pay for them. Even though B did not receive written confirmation of these instructions, he did modify the design as requested. The next five monthly deliveries were accepted by A but the sixth was rejected as not conforming to the written contract. In this case A must accept all goods manufactured according to the modified design but B must reinstate the original design for the remainder of the contract. (OFFICIAL RECORDS, pp. 27-28).


Pace Law School Institute of International Commercial Law - Last updated August 29, 2006
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