1. See Richard D. Kearney, Developments In Private International Law, 81 AM. J. INT'L L. 724 (1987).

2. John Honnold, The Sales Convention: Background, Status, Application, 8 J.L. & COM. 1 ( 1988).

3. Id. Louisiana has adopted most of the UCC except for Art. 2.

4. V. Susanne Cook, Note, The Need for Uniform Interpretation of the 1980 United Nations Convention on Contracts for the International Sale of Goods, 50 U. PITT. L. REV. 197, 221 (1988).

5. Honnold, supra note 2, at 2.

6. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9 (1979).

7. Article 3(c) of the TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY, [hereinafter EEC TREATY] provides for "an internal market characterized by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital."

8. Article 220 of the EEC TREATY, as amended by Article 6(3) of the TREATY ON EUROPEAN UNION, Feb. 7, 1992 [hereinafter MAASTRICHT TREATY], provides that the Member States may enter into intergovernmental negotiations, i.e., outside the framework of the Treaty, "with a view to securing for the benefit of their nationals . . . the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and of arbitration awards." The Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 1972 J.O. (L 299) 32, reprinted in 29 I.L.M. 1417 (consolidated and updated text) [hereinafter Brussels Convention] is such an intergovernmental agreement, providing for the mutual recognition and enforcement of judgments in the areas of civil and commercial transactions between the Member States. The Brussels Convention is periodically updated, usually to reflect accession of new members, e.g., the Saint Sebastien Convention, which reflected the accession of Spain and Portugal into the EU.

9. Francis A. Gabor, Emerging Unification of Conflict of Laws Rules Applicable to the International Sale of Goods: UNCITRAL and the New Hague Conference on Private International Law, 7 NW. J. INT'L L. & BUS. 696, 698 (1986).

10. Id.

11. Cook, supra note 4, at 224.

12. United Nations Convention on Contracts for the International Sale of Goods, U.N. Doc. A/Conf.97/18, Annex I (1980) [hereinafter CISG], reprinted in UNITED NATIONS CONFERENCE ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, OFFICIAL RECORDS at 178, U.N. Doc. A/ Conf.97/19, U.N. Sales No. E.81.IV.3 (1981), and in 17 I.L.M. 668 (1980).

13. A.B.A. SEC. INTL. L. & PRAC., THE CONVENTION FOR THE INTERNATIONAL SALE OF GOODS: A HANDBOOK OF BASIC MATERIALS (Reed R. Kathrein & Daniel B. Magraw eds., 1987) [hereinafter HANDBOOK]. For more background on the origins and role of CISG, see John O. Honnold, UNIFORM LAW FOR INTERNATIONAL SALES UNDER THE 1980 UNITED NATIONS CONVENTION 47-56 (2d ed. 1991) [hereinafter UNIFORM LAW]. See also Paul Amato, Note, U.N. Convention on Contracts for the International Sale of Goods--The Open Price Term and Uniform Application: An Early Interpretation by the Hungarian Courts, 13 J.L. & COMM. 1 (1993).

14. Kearney. supra note 1, at 725.

15. The Journal of Law and Commerce has published a series of articles dealing with CISG and its application, with the goal of educating the legal community of the importance of CISG in the realm of contracts for the international sale of goods, and to further CISG's mandate of a universal interpretation. This series began with a symposium of articles in Volume 8, Issue 1, 1988, and the Journal has regularly published Recent Developments: CISG, including analyses of translated cases from foreign courts and arbitration bodies, in order to expose practitioners to the application and interpretation of CISG in foreign jurisdictions.

16. Sincere thanks to Professor Vivian Curran, University of Pittsburgh School of Law (B.A. University of Pennsylvania; Ph.D., J.D., Columbia University), for her diligent work in translating both cases for the Journal of Law and Commerce. Any reader intending to rely on these cases should consult the original texts, copies of which can be obtained from the Journal of Law and Commerce.

17. Judgment of June 16, 1993 (Ytong v. Lasaosa), Cour d'Appel de Grenoble, Chambre des Urgences, No. 92/4223 (Fr.). Subsequent references to this case [hereinafter Ytong] will cite to the English translation which appears in this issue at 14 J.L. & COM. 211 (1995). Any reader who intends to rely on this case should consult the original text, a copy of which can be obtained from the Journal of Law and Commerce.

18. Case No. 7153, International Chamber of Commerce, International Court of Arbitration [hereinafter ICA Case], excerpts published in French in 4 JOURNAL DU DROIT INTERNATIONAL [J.D.I.] 1005 (1992), commented on by Dominique Hascher, 4 J.D.I. 1007 (1992) [hereinafter Hascher Commentary]. Any reader who intends to rely on this case should consult the original text.

19. In Ytong, the Court applies Article l(l)(b) in order to determine whether the contract fell within the scope of CISG, whereas the ICA applied Article l(l)(a). See 14 J.L. & COM. at 215. In seeking to locate the place of payment, the Court in Ytong uses Article 57(1)(a) whereas the ICA applies Article 57(1)(b). The reasons and results of application of these varying provisions will become apparent in the discussion infra.

20. In both cases, the tribunals apply CISG in order to fill a gap between what the contract provides for and what other bodies of private international law provide. For example, in Ytong, the Court applies Article 57 of CISG in order to determine whether Article 5(1) of the Brussels Convention could be applied to find jurisdiction in the French courts. See 14 J.L. & COM. at 214.

21. For example, French law dictates that in a civil action, the losing party is responsible for the cost of the litigations for both parties. French law also provides for a discretionary amount not covered under the normal cost of litigation. See infra note 24. In the Grenoble case, the court held Lasaosa, the losing party, to be liable for the totality of the costs, both for the litigation in the Court of First Instance, as well as the appellate litigation. See Ytong, 14 J.L. & COM. at 217. This appears to be an attempt to curb the amount of litigation and is a harsh penalty for the unsuccessful party.

22. The question of whether the contract was for the sale of goods is significant in Ytong as appellant, Lasaosa, argues alternatively that the contract was for services in the form of either a franchise, agency arrangement or distributorship. For further discussion, infra part II.B.2.

23. The following is a summary of the relevant facts from the translated case published along with this Note. Please refer to the translated case for the unabridged facts. See supra note 17.

24. Nouveau Code de procédure civile [N.C. PR. CIV.], art. 700 (Fr.) provides for an award of the amount of expenses and fees that are not covered under the regular "loser pays principle." This award is discretionary, and the judge may take into account the economic situation of the losing party when considering the amount of the award.

25. The serious dispute Lasaosa referred to was a defect in the building materials supplied by Ytong which rendered them unfit for their intended use.

26. Code Civil [C. CIV.], art. 1648 (Fr.) provides that "[a]n action resulting from defects of an anulling [sic] character must be brought by the buyer within a brief delay, according to the nature of the defects of an annulling character and the usage of the place where the sale is made."

27. Although the facts do not include details of these claims, presumably they consist of claims against Lasaosa by contractors in Catalonia as a result of the allegedly defective products from Ytong.

28. This appears to mean that when the case would be remanded to the lower court, the lower court should find the defendant, Lasaosa liable, on the basis of the Grenoble Court's reasoning.

29. See supra note 24.

30. Article 11 of CISG states that: [a] contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.

31. See infra discussion on CISG and jurisdiction at part II.B (Article 57(1)(a) as Applied by the Grenoble Court).

32. For further discussion on the Brussels Convention, see supra note 8 and accompanying text.

33. Brussels Convention, supra note 8.

34. Id. art. 2.

35. Id. art. 5(1) (emphasis added). It is interesting to note that French domestic law provides jurisdiction over any party to a contract involving a French national regardless of their nationality. French Civil Procedure Code art. 14 provides:

An Alien, even though not residing in France, may be summoned before the French courts for the fulfillment of obligations contracted by him in France with a Frenchman; he may [also] be brought before the French courts for obligations contracted by him in a foreign country toward a Frenchman.

36. CISG art. 3(2).

37. Ytong, 14 J.L. & COM. at 213-14.

38. CISG art. 8.

39. Id. art. 8(1).

40. See Amato, supra note 13, at 25 (quoting John E. Murray, Jr., An Essay on the Formation of Contracts and Related Matters Under the United Nations Convention on Contracts for the International Sale of Goods, 8 J.L. & COM. 11, 17 (1988)).

41. CISG art. 8(2).

42. Ytong, 14 J.L. & COM. at 215.

43. The Court acknowledges that there may have been a novation between the parties for thc damages incurred for the defective goods, as Lasaosa had claimed, but rejected the claim for lack of evidence. Id. at 214. Such an agreement could have been construed as evidence of a franchise, industrial agency or international distributorship agreement. Article 8(3) of CISG provides that:

[i]n determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties. (Emphasis added).
Further, Article 9(1) provides that:

[t]he parties are bound by any usage to which they have agreed and by any other practices which they have established between themselves. (Emphasis added).

44. Cook, supra note 4, at 205.

45. Id. (citing CISG art. 1(1)(b)).

46. Gabor, supra note 9, at 700.

47. The Court does refer to the fact that CISG has been applicable in France since 1 January, 1988, but does not go further with its analysis of the application of CISG. French cases are usually published along with a commentary prepared by a legal scholar (similar to the one included with the translation of the ICA Case). These commentaries often shed more light on the reasoning of the Court. Unfortunately, as of the date of this publication, it was not possible to obtain a copy of this commentary. In any event, it is a worthwhile exercise to examine the procedure for determining whether CISG ought to be applied under Article 1(1)(a) or 1(1)(b).

48. Paul Volken, The Vienna Convention: Scope, Interpretation, and Gap-Filling, in INTERNATIONAL SALE OF GOODS: DUBROVNIK LECTURES 19, 21 (Peter Sarcevic & Paul Volken eds., 1986).

49. Id.

50. Id

51. Kearney, supra note 1, at 727.

52. Gabor, supra note 9, at 700.

53. HANDBOOK, supra note 13, at 73 (citing Letter of Submittal from George P. Shultz, Secretary of State, to Ronald Reagan, President, in his Letter of Submittal, on August 30, 1983, reprinted in S. Treaty Doc. No. 9, 98th Cong., 1st Sess. (1984)).

54. Id

55. See Journal of Law & Commerce CISG Contracting States and Declarations Table, 14 J.L. & COM. 237, 244 (1995) [hereinafter Declarations Table].

56. CISG art. 100(2).

57. See Declarations Table, supra note 55, at 244.

58. Ytong, 14 J.L. & COM. at 212.

59. See CISG art. 100(2).

60. See Declarations Table, supra note 55.

61. CISG art. 1(1)(b).

62. PARKER SCHOOL OF FOREIGN AND COMPARATIVE LAW, COLUMBIA UNIVERSITY, INTERNATIONAL SALES: THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (Nina M. Galston & Hans Smit eds., 1984), § 1.02[4][6] (citing the 1955 Hague Convention on the Law Applicable to International Sales of Goods, 510 U.N.T.S. 147 (1964)) [hereinafter Hague Convention].

63. Id. (citing Article 3 of the Hague Convention that states in relevant part:

In default of a law declared applicable by the parties . . ., a sale shall be governed by the domestic law of the country in which the vendor has his habitual residence at the time when he receives the order. If the order is received by an establishment of the vendor, the sale shall be governed by the domestic law of the country in which the establishment is situated.

Nevertheless, a sale shall be governed by the domestic law of the country in which the purchaser has his habitual residence, or in which he has the establishment that has given the order, if the order has been received in such country, whether by the vendor or by his representative, agent or commercial traveller.)

64. See discussion on self-executing treaties, supra text accompanying notes 48-50.

65. See Ytong, 14 J.L. & COM. at 213

66. See discussion on Article 95 supra text accompanying notes 51-54.

67. Leif Sevón, Obligations of the Buyer Under the UN Convention on Contracts for the International Sale of Goods, in INTERNATIONAL SALE OF GOODS: DUBROVNIK LECTURES, supra note 48, at 203, 214.

68. CISG art. 4.

69. UNIFORM LAW, supra note 13, at 417-18.

70. CISG art. 57(1)(a).

71. See Ytong, 14 J.L. & COM. at 215.

72. CISG art. 57(1)(b).

73. Brussels Convention, supra note 8, arts. 26 and 31 which read in relevant part:

Article 26 Recognition.

A judgement given in a Contracting State shall be recognized in the other Contracting States without any special procedure being required.

Article 31. Enforcement

A judgement given in a Contracting State and enforceable in that State shall be enforced in another Contracting State when, on the application of any interested party, the order for its enforcement has been issued there.

74. Article 17 of the Brussels Convention, supra note 8, allows for the prorogation of jurisdiction. It states in relevant part:

If the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or courts shall have exclusive jurisdiction (emphasis added).

75. The following is a summary of the relevant facts from the translated case published along with this Note. Please refer to the translated case for the unabridged facts.

76. The names of the parties are not provided by the Court and will be referred to hereinafter as "Seller" and "Buyer."

77. INTERNATIONAL CHAMBER OF COMMERCE RULES OF CONCILIATION AND ARBITRATION (in force from 1 January 1988) [hereinafter ICC RULES], reprinted in W. LAURENCE CRAIG ET AL., INTERNATIONAL CHAMBER OF COMMERCE ARBITRATION, app. II (2d ed. 1990). Article 4 provides the procedures for the defendant's answer to the plaintiff's request for arbitration.

78. Id. app. II, at 9.

79. The ICA does not state the content of the article on "Litigation and the Law," but only that it was insufficient to provide the ICA with the applicable law to be applied in the conflict.

80. ICC RULES, supra note 77, app. II, at 3. Art. 13(3) states:

[t]he parties shall be free to determine the law to be applied by the arbitrator to the merits of the dispute. In the absence of any indication by the parties as to the applicable law, the arbiter shall apply the law designated as the proper law by the rule of conflict which it deems appropriate.

The Commentary following the case, written by Domonique [sic] Hascher, notes that when parties to a contract have not chosen the law applicable to the controversy, arbitrators generally use three different methods to determine which law applies. See Hascher Commentary, supra note 18. The first method consists of applying cumulatively the systems of conflicts of laws of the states interested in the litigation. The second method consists of having recourse to the general principles of private international law, such as the rules contained in international conventions, e.g. CISG, and the third method consists of directly choosing trial rules, avoiding rules of a conflictualist nature. Id., citing Derains, Legitimate Expectation of the Parties and Applicable Law to the Substantive Issue in International Commercial Arbitration, TRAVAUX COMITÉ DIP, 81, 1984-1985.

81. CISG art. 53.

82. Id. art. 1(1)(a).

83. Declarations Table, supra note 55, at 237, 244.

84. See Hascher Commentary, supra note 18, at 1009.

85. See ICA Case, case No. 7153, at 1007. The Hascher Commentary notes that this conclusion is further supported by a bill addressed to the Buyer which stated that the price for the assembly of the materials was of a completely secondary order of magnitude compared to that of the purchase of the materials. See Hascher Commentary, supra note 18, at 1009.

86. CISG art. 78.

87. See Hascher Commentary, supra note 18, at 1009 (citing Derains, Intérêts Monetaires, Dommages-Intérêts Compensatoires et Dommages Punitifs Devant l'Arbitre International, Mélanges Bellet, LITEC, p. 101).

88. See Hascher Commentary, supra note 18, at 1009.

89. CISG art. 57(1)(b).

90. ICA Case, case No. 7153, at 1007.

91. See id.

92. CISG art. 9(1).

93. See ICA Case, case No. 7153, at 1007.

94. See Hascher Commentary, supra note 18, at 1009-10 (citing Derains, supra note 87).

95. See ICA Case, case No. 7153, at 1007.

96. Id. at 1010