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Published by Manz, Vienna: 1986. Reproduced with their permission.

excerpt from

Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods

Univ. Prof. Dr. Peter Schlechtriem [*]


III. Sphere of Application


D. Exceptions (Article 2)

1. Consumer Contracts

The extension of the Uniform Law for International Sales to non-commercial purchases is restricted by Article 2(a). The Convention does not apply to transactions concerning goods bought for personal, family or household use, if they are recognizable as such. This rule takes into account the fact that "international" consumer purchases are infrequent, and concern mostly tourists and mail-order businesses. Moreover, this exclusion intends to ensure that domestic consumer-protection laws are not affected by the Uniform Law for International Sales;[60] Article 2(a) thereby fulfills the same function as Article 5(2) of ULIS. The exception for sellers who "neither knew nor ought to have known" that the goods were for private use is deliberately formulated in the negative in order to place the burden of proof firmly on those who claim the exception to the consumer-contracts exclusion and assert that the Convention should apply.[61] The claim will succeed when the contents of the order or the company address of the buyer suggests that the sale is of a commercial character.

Article 2(a) bears the same inadequacy as Article 5(2) of ULIS, namely that the attempt to delimit the sphere reserved for domestic consumer-protection laws did not fully succeed and, therefore, overlapping areas remain in which the Uniform Law for International Sales as well as domestic consumer-protection regulations will apply.[62] The exception to the exclusion of Article 2(a) - where the seller cannot recognize the character of the purchase - can lead to overlapping when domestic consumer-protection law does not use such a criterion.[63] Above all, domestic consumer-protection laws sometimes intervene when the goods purchased are intended for occupational or even commercial use. For example, the German "Abzahlungsgesetz" (instalment-purchase law) can apply to the purchase of an office machine by a lawyer,[64] or building materials by a contractor, or a beer delivery to a restaurant owner, if the latter two are not registered commercial parties. Where domestic consumer-protection laws void certain contract provisions, the application of the two laws can be reconciled, since, according to Article 4(a), the Convention is not concerned with the validity of the contract or with that of any of its provisions. On the other hand, the question is more difficult where certain forms are required or special legal remedies are available under domestic consumer-protection laws that favor the buyer.[65] The law of the [page 28] Contracting State must decide the priority between the Uniform Law for International Sales, which the state has adopted, on the one hand, and its domestic consumer-protection law, which the state has left in force unchanged beside CISG.[66] If domestic law allows the conflicting consumer-protection provisions to remain in force and take precedence over the application of the Uniform Law for International Sales, this must be accepted, even if it means that the state thereby violates one of the obligations it made by ratifying the Convention. In my opinion, the Uniform Law for International Sales would take precedence in the Federal Republic of Germany because it is the more recently ratified and enacted law, and it is more specialized than the domestic consumer-protection law. This conclusion can be justified, since an instalment purchaser whose place of business is in Germany, and who makes a purchase abroad without any express agreement, cannot be certain that the German instalment-purchase law will protect him.

The preconditions for the exclusion concerning "personal, family and household use" are not defined. However, this does not necessitate recourse to domestic law. Interpretation according to Article 7 of the Convention is both mandatory and possible; the purpose of Article 2(a) is to allow a broad description, based on sociological evidence, of those persons who are regarded as included in the family or household. Thus, a purchase made for a god-child or the acquisition of a car for the housekeeper would be covered.[67] A domestic law's definitional provisions on family membership should not apply.

2. Auctions; Stocks, Securities, Negotiable Instruments and Money; Ships and Aircraft; Electricity

The exclusion in Article 2(b) and (c) shows consideration for the special domestic laws governing these transactions. Since auction sales customarily are concluded immediately at the auction location, an exception in deference to any easily determined domestic law does not significantly impair the unification of law.[68] The exception for auction sales can also be justified by the fact that most jurisdictions accept the domestic law of the auction site as controlling.[69] The [page 29] exception for forced or judicial sales in Article 2(c) corresponds to Article 6(1)(d) of ULIS.

The exception for shares, investment securities, negotiable instruments, and money (Article 2(d)) can also be found in ULIS Article 5(1)(a), and takes into consideration that international securities and currency transactions are governed by their own rules and laws which are often compulsory.[70] Sales contracts which name a document as the subject of sale, because the document controls the delivery of goods, are considered to be within the sphere of application of the Uniform Law for International Sales, even though some domestic regulations would characterize these as negotiable instrument transactions.[71]

The exception for ships and aircraft in Article 2(e) of the Convention and Article 5(1)(b) in ULIS was retained, although forceful arguments for its elimination were again raised in Vienna.[72]

In ULIS the exception is restricted to registered ships or to ships that are required by law to be registered, but that restriction was dropped in the Convention because domestic registration requirements differ greatly from country to country. In the ULIS version, uncertainty about the application of the uniform sales law can also arise, such as, for example, when it has not been determined which domestic law controls the duty to register.[73] Some legal systems characterize the sale of a ship as a real-estate transaction and establish special rules not only for the transfer of title but also for the effective formation of the contract (formal requirement).[74] With the elimination of the registration criterion, it has, however, become uncertain whether and to what extent smaller boats - row boats, canoes, dinghies and yachts - belong to the subject matter excluded from the application of the Convention. The function and reason for the exception - recognition of special rules for transactions involving ships - suggest that the exception should not be extended to boats (although no distinction is feasible in regard to aircraft).[74a] Delimiting the application of this exception will of course be difficult, for example, with small fishing boats or high sea yachts. In such cases, one will consult domestic law to learn whether such boats come under the special rules applicable to ships. If they do, the sense and purpose of Article 2(e) is that the exception should then apply. In many cases, the duty to register will therefore remain an important criterion. As a whole, the rule is probably only acceptable because it increases the willingness of states to join the Convention.

At the request of India, hovercraft were included in the list of exceptions.[75] On the basis of the argument advanced by the Indian delegation that such craft are treated in Indian law the same as ships or aircraft, one may conclude that this [page 30] exception includes only hovercraft that can be used as boats and not other kinds of vehicles or vessels that operate on the principle of the pneumatic cushion.

Finally, by tradition, sales contracts concerning the supply of electricity are excluded from the Convention's sphere of application in Article 2(f) and of that ULIS in Article 5(1)(c). The exclusion seems to conflict with the need for consistency. However, the electricity-producing industries, which should be the only ones affected by it, elaborate their transnational agreements in such detail, that there is seldom any need to consult the applicable law.

In sum, the exceptions listed in ULIS were maintained in the Convention. Attempts to exclude other goods from the Convention's sphere of application were averted by the use of the argument that the parties always have the right to exclude the goods if they wish by choosing a different applicable law.[76] [page 31]



* The author of this book participated at the Conference as a member of the delegation from the Federal Republic of Germany. The views expressed here are personal to the author and do not necessarily represent the position of the F.R.G. or its delegation.


60. See Secretariat's Commentary at 39 § 3; Honnold at 227.

61. cf. A/Conf. 97/C.1/SR.1 at 6 et seq. (= O.R. 237).

62. It is probably not possible to find criteria for excluding the Convention that fully correspond to various cases where consumer-protection laws apply. See A/Conf. 97/C.1/SR.1 at 8 (= O.R. 239) (Finland's argument).

63. See also A/Conf. 97/C.1/SR.1 at 8 (= O.R. 239) (justified criticism expressed by Vischer (Switzerland) in Vienna). But see also Löwe, Lausanner Kolloquium at 17.

64. Judgment of May 11, 1977, BGH, 1977 NJW 1632.

65. cf. Abzahlungsgesetz §§ 1a, 1b. A Norwegian proposal would have excluded questions of avoidance in instalment sales from the sphere of application of the Convention on the grounds that special domestic laws govern this area. The opposition to the proposal was based on the fact that parties have the right to exclude the Convention. Norway withdrew its motion on the basis of an alleged understanding that an instalment contract would be interpreted as an exclusion of the Convention. See A/Conf. 97/C.1/L.14 (= O.R. 85); A/Conf. 97/8 at 15 (Norwegian motion and reasoning); A/Conf. 97/C.1/SR.3 at 6 (= O.R. 246 et seq.). In my opinion, the problem is still not resolved because the alleged understanding would open the possibility of imputing exclusion of the Convention in all cases in which the parties' agreement is based on types and terms of domestic contracts that are familiar to them.

66. As to similar conflicts in the application of ULIS arising when mandatory laws regulating the economy contradict the Convention, compare Dölle (Herber) Article 5 § 19, Article 18 § 6 with Dölle (Stoll) Article 74 § 148 et seq. The problem was recognized by UNCITRAL. See 2 UNCITRAL Y.B. 44-45, 55 (1971).

67. See also Huber at 422 ("family" and "household" serve only as examples of personal use.)

68. cf. 3 E. Rabel, Conflict of Laws 53 note 12 (1950) (regarding the application of the lex fori to "sales executed and fulfilled at once in one place").

69. See also Huber at 422 (explaining that auctions are local transactions with no significant foreign contacts.).

70. Secretariat's Commentary at 40 § 7.

71. Id. at 40 § 8.

72. See A/Conf. 97/C.1/SR.2 at 2-3 (= O.R. 240 et seq.).

73. Cf. A/Conf. 97/5 at 40 (= O.R. 36 et seq.).

74. Many opposed the provision on the grounds that special domestic rules concern only the transfer of title. See Huber at 419; Dölle (Herber) Article 5 § 9 (on ULIS); see also A/Conf.97/C.1/SR.2 at 2-3 (= O.R. 240 et seq.) (discussion).

74a. Contra Honnold, Commentary § 54 (suggesting that, since no distinctions are feasible with respect to different types of aircraft, pleasure boats should also be included).

75. See A/Conf.97/C.1/SR.2 at 3 (= O.R. 241).

76. Iraq had proposed to exclude oil contracts from the sphere of operation of the Convention because OPEC had established special contracts for the sale of oil. See A/Conf. 97/SR.6 (= O.R. 199 et seq.).


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