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Petar Sarcevic & Paul Volken eds., International Sale of Goods: Dubrovnik Lectures, Oceana (1986), Ch. 2, 19-53. Reproduced with permission of Oceana Publications.

The Vienna Convention: Scope, Interpretation, and Gap-filling

Paul Volken
Lecturer, University of Fribourg

I.   Introduction
II.  Legal Nature of the Convention
III. Sphere of Application, in general
IV. Personal Aspect of Applicability
V.  Territorial Aspect of Applicability
      1. The basic criterion
      2. The two restrictions
      3. Federal clause and regional cooperation
VI. Temporal Aspect of Applicability
VII. Material Aspects of Applicability
      1. In general
      2. Restrictions
      3. Types of restricted sales
      4. Categories of restricted goods
VIII. Interpretation
      1. General remarks
      2. Interpretation procedure
      3. Gap-filling
      4. Statements and conduct of the parties

I. Introduction

1. This year the Vienna Convention celebrated its fifth anniversary on April 11. Although the Convention has not yet entered into force, the five-year period has been long enough to make it an "adult" in the international world of treaties. In fact, no other international legal instrument has, in such a short time, served so often as a topic of lively discussion among businessmen.[1] Thus the time has come for the Convention to enter into the ordinary academic curriculum for lawyers.

2. The present paper will deal with three aspects of the Vienna Convention. First, it will analyze the Convention's sphere of application, then turn to the rules governing its interpretation, and finally come to the procedure that should take place in cases where a legal question is governed by the Convention but, as a matter of fact, does not find a clear answer in it. [page 19]

Before concentrating on these three main topics, however, we should first take a brief look at the legal nature of the Convention and its legal rules.

II. Legal Nature of the Convention

3. The Vienna Convention consists of statutory rules on the international sale of goods, which, as a formal source of law, are contained in an international treaty. Thus, two different types of legal rules are at stake at the same time, i.e., the traditional rules on contract law and the public international rules on the law of treaties.

4. Turning first to the public international law side, we note that the modern theory on the law of treaties recognizes different groups of international treaties. One of the most generally accepted of these classifications distinguishes between contractual and law-making treaties (traits-lois, traits-contrats).[2]

The Vienna Convention belongs to the category of law-making treaties; however, even this group contains several subdivisions, one of the most generally accepted being the distinction between self-executing and non-self-executing treaties.[3]

5. Treaties which are not self-executing create rights and obligations for the Contracting States only. Individuals living in the Contracting States cannot assert any rights arising directly from the treaty itself. In order to become effective towards individuals, a non-self-executing treaty needs to be transformed into domestic statutory law. By ratifying or acceding to a [page 20] non-self-executing treaty, a Contracting State accepts the international duty to provide for the appropriate domestic legislation. As long as such implementory legislation is missing, there is no possibility for a national court to render the treaty obligations effective.[4]

6. The situation is very different if a treaty obligation is deemed to be self-executing. In such a case the legal rules arising from the treaty are open for immediate application by the national judge. And all persons living in a Contracting State are entitled to assert their rights or demand the fulfillment of another person's duty by referring directly to the legal rules of the treaty itself.[5]

7. Both self-executing and non-self-executing treaties are to be found in the fields of private international law and international commercial law. Very often, legal rules arising from treaties may be partly self-executing and partly non-self-executing.

The various ILO Conventions dealing with labor law or questions of social security are classical examples of non-self-executing treaties.[6] The GATT of October 1947, the EFTA Agreement of January 1960, and various regional or bilateral agreements with the EC are examples of treaties with a mixture of self-executing and non-self-executing rules.[7]

8. The rules of the Vienna Convention are clearly self-executing. In this respect they differ from the Hague Conventions of 1 July 1964 which, in fact, did not contain any rules on contracts. All they did was to oblige the Contracting States to incorporate the Uniform Law on [page 21] the International Sale of Goods (ULIS) or the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF) into their own domestic legislation.[8] Thus, although ULIS and ULF were in substance of an international character, as far as their form is concerned, they had to be transformed into national statutory law by each Contracting State. A similar technique has been applied by the drafters of the Geneva Conventions on bills of exchange (1930) and on checks (1931).[9]

9. However, an important caveat has to be added to all that has been said thus far about the immediate applicability of the self-executing rules of a treaty.

According to the generally accepted principles of public international law, all States are free to decide how they wish to comply with their international legal duties. Whereas some States expressly permit treaty-made rules to be immediately enforceable before their national courts, other States provide that all international texts -- whether self-executing or not -- must first be transformed into national statutory law. This often seems to be the case in Great Britain and the same is true in the Scandinavian countries.[10] The national courts of such countries will never apply treaty rules as such, but only in the form of a national statute.[11]

10. Such a difference might be of particular importance when it comes to questions concerning interpretation or gap-filling.[12] In States where the immediate applicability of self-executing, treaty-made rules is accepted, the courts will be fully aware that they are applying the legal rules of a multilateral convention, since in each [page 22] individual case of application they must refer to the Convention itself. It is not sure whether the same can be said of the court of a State where transformation is required, for in such States the national judges will only refer to the national statute and national case law.[13] As a result, differences are likely to occur in the application and interpretation of the same rules.

III. Sphere of Application, in general

11. As indicated in its title, the Vienna Convention deals with contracts for the international sale of goods. It does not, however, apply to all types of international contracts of sale; the Convention restricts its sphere of application to a certain group of sales: First, the Convention covers only those contracts which have been concluded between a given group of persons; second, the rules of the Convention are limited to contracts which, on the one hand, fall within a particular territorial sphere, and, on the other hand, are concluded within a given period of time; and third, application of the rules of the Convention is limited to a specific category of sales.

The Convention's field of application is restricted by several rules, the most important of which are found in Articles 1 to 6. Four aspects have to be taken into account when defining the Convention's sphere of application, i.e., a personal, a territorial, a temporal, and a material aspect.

IV. Personal Aspect of Applicability

12. The Convention refers to a positive and a negative criterion for determining the parties [page 23] whose contracts of sale fall under the Vienna rules. According to Art. 1 para. 1, the Convention applies to sales contracts between parties whose places of business are situated in different States (positive criterion).[15] Para. 3 of the same article states that the-nationality of the parties to a contract is of no importance and that the Convention applies irrespective of the fact whether these parties are engaged in commerce or are ordinary private individuals.[16]

13. Some of the terms contained in Art. 1 need further explanation. As to the notion "State," Art. 1 para. 1 distinguishes between two possible variations: The States in which the parties' places of business are located must either both be Contracting States (lit. (a)) or at least the State whose substantive laws have to be applied under the national conflict-of-laws rules (lit.(b)). In the first case, we have a substantive definition of the Convention's sphere of application whereas the second subparagraph is known as the so-called conflictual way of defining the Convention's scope. We will return to this definition. [17]

14. In regard to the term "place of business," Art. 1 para. 2 provides that both parties, before or at the conclusion of the contract, must have been aware of the fact that their business places are situated in different States. In other words, the parties must consciously have entered into an international contract. If there is no such awareness, the Convention does not apply, and national rules, including the rules on private international law, will govern the contract.[18] [page 24]

15. In international trade, parties often create business places in different States since a locally based office tends to help promote business in the particular country.

If a party has more than one place of business, the place which has the closest relationship to the contract and its performance is to be taken into consideration. Sometimes the representative of a local business place is only entitled to prepare the conclusion of a contract, while the contract itself is accepted and signed by a member of the headquarters abroad. Such proceedings make the contract international only in cases where the other party knew or ought to have known of the real partner to the contract.[19]

The fact that one party has no business place at all is no reason to refuse application of the Convention. Art. 10 subpara. (b) refers to the habitual residence of such a party.[20]

V. Territorial Aspect of Applicability

16. The personal and territorial aspects of applicability are closely related to each other, both aspects being dealt with mainly in Art. 1 para. 1. As a basic rule, the Convention applies to sales contracts if both parties have their places of business in different States. The Convention adds two alternative restrictions to this basic criterion. The first restriction requires that both (or all) the States in which the business places are located be Contracting States (Art. 1 (1)(a)), and the second stipulates that the Convention applies only if a rule of private international law, i.e., a conflicts rule, leads to the law of a Contracting State. [page 25]

17. The way in which the Vienna Convention defines its territorial sphere of application gives rise to a series of questions related to both the basic criterion and the two restrictions.

1. The basic criterion

18. The basic criterion, according to which a sale is considered international if the parties to the contract have their places of business in different States, is too broad, yet at the same time, too restrictive.

The criterion is too broad in the sense that it considers even those sales as international in which the goods, from their fabrication to consumption, have never left the original country. Let us assume that a New York company owns pre-fabricated construction elements stored in Geneva. The New York owner sells these elements to a French company that plans to build a Hotel in Geneva. Since the parties have their places of business in different States, the Convention applies, even though the construction materials have never left Switzerland and, moreover, not even Geneva.

Why should such a sale be exempted from the rules of the Swiss Code of Obligations? Do we really need to take recourse to Art. 6 of the Convention (opting-out clause) in order to preserve the national character of a purely local transaction?

19. On the other hand, the basic criterion is also too restrictive in that it excludes all sales from the Convention between two parties which import or export goods but have their places of business in the same State. [page 26]

Let us illustrate this with another example. If a Baltimore firm that owns furniture stocked in Italy sells the furniture to a Boston firm, which, on its part, needs that type of furniture for a new sales office in Paris, the Convention will not apply. In fact, a sales contract concluded between the two US companies will not fall under the scope of the Convention even if the sales transaction includes an international shipment because the parties' places of business are located in the same country.

20. For the sake of clarity it should be emphasized that a choice between subparagraphs (a) and (b) of Art. 1 will not modify the outcome of the above cases in any way. In fact, even before the option between subparagraphs (a) and (b) can produce its effects, the Convention presupposes in both situations that the parties to the sales transaction have their places of business in different States.

However, even though the Vienna Convention does not apply to our second example, most businessmen will agree that selling goods which are stored in Italy and have to be shipped to France cannot be considered a purely domestic transaction. Thus, the case would be solved by referring to the traditional conflict-of-laws rules.[21]

21. In international transactions in nine out of ten cases the transnational character of a contract is determined by the place where either the parties to the transaction or the goods themselves are located. Nevertheless, in defining the international character of a sales transaction, the Vienna Convention refers only to the contracting parties without any reference whatsoever to the goods to be purchased. [page 27]

22. The solution provided by the Vienna Convention can be understood only if it is regarded as an overreaction provoked by Article 1 of ULIS. In fact, under ULIS -- in addition to the location of the parties' places of business (Art. 1 (1)) -- the sales contracts had to comply with one of the following international elements: Either they had to provide for international shipment of the goods (subpara. (a)), or offer and acceptance had to be effected in different States (subpara. (b)); or the conclusion and the fulfillment of the contract had to take place in different States (subpara. (c)).[22]

If ULIS might have been too ambitious on this point, the Vienna Convention's definition is clearly too one-sided. In addition to the requirement that the parties' places of business be located in different States, the Convention should have at least added, either as a variation or cumulative element, that the goods be shipped across a national border.

2. The two restrictions

23. The Vienna Convention applies only if and insofar as, in addition to the basic criterion (Art. 1 (1)), one of the two requirements provided by subpara. (a) or (b) is met.

Subpara. (a) cumulates the conditions of applicability in the sense that the States in which the contracting parties' places of business are located, must, at the same time, both be Member States of the Convention. Accordingly, a sales contract between a German company and a New York-based company will not fall under the Convention unless both States, the FGR and the US, have ratified. And it goes without saying that, in case of litigation, the forum must also be [page 28] situated in a Contracting State; otherwise, the Court would not be bound to apply the rules of the Convention. Thus, in States that ratify, it appears that under such restrictive conditions the Vienna Convention will have but a very poor chance of being applied for a long time.

24. Under the criterion of subpara. (b), the Convention has a far better chance of being applied. In fact, the State of the Forum need not be a Contracting State nor do both places of business need to be situated in such States. It will be sufficient if the sales transaction is international in character (places of business in different States, Art. 1 (1), and the conflicts rules of the forum lead to the substantive law of a Member State to the Convention.[23]

Under the generally acknowledged principles of private international law, this might, in the first instance, be the law which has been expressly chosen by the parties themselves or, in the absence of such a choice, the law which has the most significant relationship to the transaction and the parties. In sales contracts this will usually be the law of the State in which the seller has his place of business, for he is the one who carries out the most characteristic performance of the transaction.[24]

Unfortunately, it seems that government officials and contract lawyers are often not very familiar with the principles of private international law. For this reason the Vienna Diplomatic Conference of 1980 accepted a reservation under Art. 95 of the Convention providing for the exclusion of subpara. (b) of Art. 1.[25] [page 29]

3. Federal clause and regional cooperation

25. Two final remarks, one on federal States and the other on regional cooperation, should serve to close this section on the territorial sphere of application.

26. There are two groups of federal Statutes to be distinguished. In the first group, the law of contracts is unified on the federal level. This is the case, e.g., in the Federal Republic of Germany, Switzerland or Yugoslavia. In the second group, the law of contracts falls within the legislative power of each federal unit. The United States,[26] Great Britain, Canada and Australia belong to this group. In this second group, ratification of the Vienna Convention presupposes implementory legislation not only on the federal level but also in each state, province or territory of the federation.

Since such a procedure is rather time-consuming, Art. 93 gives federal States the opportunity to declare, at ratification or accession, that for the time being the Convention shall apply only to some of its territorial units. This enables the Convention to be applied in those units sooner.[27]

27. The Vienna Convention aims at worldwide unification of the sales law. Such an undertaking cannot be realized without accepting numerous compromises. On the other hand, economic and legal cooperation often find a more favorable climate if they take place merely on a regional level.

Since the Vienna Convention intends to strengthen, not to paralyze closer legal cooperation, Art. 94 expressly grants each Contracting [page 30] State the freedom to participate in a more elaborated regional unification.

VI. Temporal Aspect of Applicability

28. Two questions are of particular interest in regard to the time factor: First, at which moment does the Convention become binding and when does it cease to be effective? This is the side of the problem dealing with public international law. The second question is connected much closer with the law of contracts: Which contracts and which legal questions of contract law are governed by the rules of the Convention and from what moment on do the rules apply?

29. Contrary, to the other three aspects of applicability, the rules governing the application ratione temporis are not contained in the first chapter but in the final clauses of the Convention.

Art. 99 deals with the international entry into force of the Convention itself; Art. 100 specifies from which moment on the Convention's rules apply to a given sales transaction; and Art. 101 relates to the denunciation procedure.

30. As to its international entry into force, the Convention draws a distinction between the time it initially enters into force and the time it enters into force for States whose adherence follows this date.

According to Art. 99 para. 1, the initial international entry into force presupposes ten ratifications, acceptances, approvals or accessions, and the Convention will enter into force twelve months after the deposit of the tenth such document. [page 31]

For States which ratify or adhere after that magic date, the Convention becomes binding twelve months after the deposit of the appropriate instrument.

An exception exists, however, in regard to States which are parties to ULIS or ULF. Even after the twelve-month period, the Convention shall not become binding for these States until the effects of ULIS or ULF have ceased (Art. 99(6)).[29]

31. The international entry into force is to be distinguished from the date when the Convention becomes applicable to an individual sales transaction. Art. 100 deals with this aspect.

The general rule can be stated as follows: There is no retroactivity. In particular, the Convention distinguishes between the formation and the execution of a given sales contract.

32. As to the formation of contracts, the rules of the Convention (Art. 14-24) shall apply only when the proposal for concluding the contract is made on or after the date of the Convention's international entry into force (Art. 100(1)). International entry means the date when the Convention enters into force with respect to the Contracting States where the parties to the sales transaction have their places of business.

The same rule applies to the execution of a sales contract (Art. 100(2)).

33. The effects of a denunciation of the Convention are subject to the same twelve-month period as its entry into force (Art. 101(2)).

The Convention does not differentiate between the denunciation effects under public international law[30] and those with respect to a [page 32] particular sales contract. Will contracts which have been concluded under the auspices of the Convention continue to be governed by the Convention or do the individual and the international effects cease on the same date? And what about a contract under litigation? Does the judge have to continue the lawsuit as if the Convention were still in force, or does he have to change the applicable rules of law?

These questions constitute part of the general problems of inter-temporal law. But a legal text that consists of more than a hundred articles and, in view of its international bearing, needs uniform application, could easily have dedicated a small paragraph to this problem as well. In the absence of such a rule, the courts will probably take recourse to their national principles of inter-temporal law.

VII. Material Aspects of Applicability

1. In general

34. As to the material scope of application, the Vienna Convention is to apply to sales contracts as far as goods are concerned. In this respect, the Convention follows the system of ULIS. The terms "sales contract" and "goods" were not defined in ULIS, and there is no explicit definition under the Vienna Convention either.

In regard to the term "contract," implicit reference can be made to Articles 30 and 53 of the Convention. According to Art. 30, the seller must deliver the goods, hand over the documents and transfer the property in the goods. And under Art. 53 the buyer must pay the price and take delivery of the goods. [page 33]

As to the goods, the Convention applies to the sale of many different types of goods: to the sale of food, wheat, corn, coffee, to the sale of machines, cars, manufactured tools, to the sale of steel, books, records. As a rule, the Convention is not restricted to so-called commercial sales. On the other hand, in Art. 2 subpara. (a) it expressly excludes the sale of goods bought for personal, family or household use (consumer sale).[31]

2. Restrictions

35. The exclusion of consumer sales is not the only restriction provided by the Convention. In order to systematically cover all the types of restrictions, five different groups have to be singled out: There are restrictions relating to the type of sale, others to the category of goods falling under the Convention, and still others to the category of transactions; a fourth group relates to the binding effect of the Convention itself and a fifth concerns the extent to which legal questions are covered by the Convention.

After making some general remarks on groups three to five, we shall focus our comments on the restrictions relating to the type of sales and the category of goods.

36. Articles 3 and 5 contain restrictions or limitations relating to a series of transactions that are excluded from the Convention.

According to Art. 3, contracts for the supply of goods to be manufactured or produced are to be considered sales and not labor or service contracts, and as such are governed by the rules of the Convention. The situation differs, however, when the party ordering the goods furnishes [page 34] a substantial part of the work materials himself. In the latter case, the manufacturer reduces his activity to the mere lending of his personal skills or labor, and thus the element of a labor or service contract prevails (Art. 3(2)).[32]

Art. 5 excludes all questions concerning (contractual or non-contractual) product liability from the scope of the Convention.

37. Art. 4 indicates to what extent legal questions on contract law fall under the Convention. Accordingly, the Convention applies to all aspects of the formation of contracts (Art. 14-24) as well as to the rights and obligations of the seller (Art. 30) and' those of the buyer (Art. 53). On the other hand, Art. 4 expressly excludes validity problems and all questions relating to the transfer of property.[33]

38. In regard to the binding effect of the Vienna Convention and its limits, we refer to Art. 6. Under this article, which makes the Convention optional, the parties can agree that the rules of the Convention shall be excluded. The exclusion may concern the Convention as a whole or be restricted to some parts or even to only certain articles.[34] The opting-out clause is available, however, under one restriction. Under Articles 12 and 96 any Contracting State may declare that a given international sales contract must be in writing. If a State has made such a declaration, then the parties' agreement on total or partial exclusion or modification of the Convention must necessarily be in writing as well. [page 35]

3. Types of restricted sales

39. As was already mentioned, so-called consumer sales (Art. 2(a)), sales by auction (Art. 2(b)), sales on execution and sales by authority (Art. 2(c)) are excluded from the Convention's scope.

Sales on execution and by aauthority were already excluded under Art. 5 of ULIS.[35] The Vienna Convention excludes them as well along with two new items, consumer an.d auction sales.

40. The exclusion of consumer sales seems to be appropriate. In view of the fact that the national legislation of many countries has developed special rules to protect consumers, the Vienna Convention. did not want to interfere with this body of specialized rules, most of which are mandatory in character.

The reasoning for the exclusion of auction sales was similar to that which caused the drafters of ULIS to exclude sales on execution and those by authority. In all three cases, special local regulations apply.[36]

4. Categories of restricted goods

41. Most of the items mentioned in Art. 2 subparas. (d), (e), and (f) have already been excluded under Art. 5 of ULIS. The drafters of the Vienna Convention have made one change in regard to ships, vessels or aircraft. Whereas under Art. 5 subpara. (b) of ULIS the exclusion was restricted to registered ships, vessels or aircraft,[37] Art. 2 subpara. (e) of the Vienna Convention leaves aside any registration requirement. [page 36]

42. The debate that took place in Vienna shows that, in the end, lack of equal treatment by different States led to this deletion. Since the registration requirements vary substantially from State to State, it can occur that the very same type of aircraft or watercraft needs to be registered in one State but not in another.[38]

As a result, the same ship or aircraft would fall under the Convention in one State, but be excluded from the Convention in another. It goes without saying that such a divergency would hardly be in line with the goals of international unification of the sales law. And it is understandable that the idea of deleting any reference to the registration procedure was a rather tempting proposal for the Vienna drafters. However, in doing so, they tremendously broadened the exception of Art. 2 subpara. (e).

43. In fact, if we take it literally, under the existing text any aircraft, ship or vessel would be excluded from the Convention, not just big seagoing vessels or intercontinental aircraft. At this point some difficulties may arise. What about a private pleasure yacht, a sailboat, a rowboat or a surfboard? All these are types of watercraft, but are they to be considered ships or vessels, or should they be regarded as sports articles?

44. P. Schlechtriem[39] favors a functional approach, i.e., a solution that would take into account the special requirements of a ship or aircraft register that serve as a basis for corresponding mortgages.

J. Honnold,[40] on the other hand, indicates that UNCITRAL was unable to find a workable distinction between large, mortgaged and small private [page 37] craft, and he fears that the courts might encounter the same difficulties. Accordingly, he insists that Art. 2 subpara. (e) be read without any qualifications. At least in this respect, the premises for divergency in the interpretations of civil law and common law judges seem to be inevitable.

VIII. Interpretation

1. General remarks

45. As was already mentioned,[41] the legal nature of the Convention's rules is twofold. We are dealing, on the one hand, with provisions on additional contract law, and on the other hand, the rules contained in an international treaty.

Thus, the question arises as to whether public international law rules on interpretation or those of the law of contract are to be applied. The answer to this question depends on the legal nature of the rule to be interpreted.

46. Public international law creates rights and ties among the Contracting States themselves.The Vienna Convention provides for such obligations in Part IV in the final clauses (Arts. 89-101) dealing with ratification or accession, with reservation or denunciation. These rules of the convention are without a doubt to be interpreted according to the principles of public international law, i.e., according to Articles 31-33 of the Vienna Convention on the Law of Treaties of 1969.[42]

47. All other provisions of the Vienna Sales Convention have to do with the rights and duties of the individual parties to a sales transaction. [page 38] With respect to these rules, the Convention contains its own rules on interpretation: Articles 7 and 8.

Here the Convention distinguishes between two levels of interpretation: Art. 7 concerns the interpretation of the rules of contract law contained in the Convention itself, and Art. 8 the interpretation of specific statements or the conduct of the individual parties to a transaction.

2. Interpretation procedure

48. Art. 7 para. 1 states that, in interpreting the Convention, regard shall be had 1) to the international character of the Convention and its texts, 2) to the need to promote uniform application of its rules, and 3) to the observance of good faith in international trade. Para. 2 deals with the principles which are to serve as guidelines for gap-filling.

49. Although Art. 7 para. 1 mentions the elements of interpretation and the general goal to be achieved -- i.e., promotion of uniformity in the application of the Convention -- it does not say anything about the ways and means to achieve that end.

Do national courts have to adhere to the text of the Convention, to the literal meaning of its words, or are they entitled to go a step further, to consult the preparatory work and take a look at the Convention's history and the genesis of a particular rule?

50. It is common knowledge that common law judges seem traditionally less willing to take recourse to preparatory materials or to refer to [page 39] the genesis of a statute and its rules.[43] J. Guttenridge once put it this way: "The meaning of legislation must be deduced solely from the word of the statute."

Even though, due, e.g., to the influence of the American Uniform Commercial Code, the plain-meaning rule has been softened in modern contract law of the common law countries, the rule still exists and is observed.[44]

51. European legal scholars are traditionally more accustomed to work with different elements of interpretation. The plain meaning of a text and its grammatical structure are also of great importance on the Continent; nevertheless, it seems that civil law judges are more willing to refer to the preparatory work or legal history of a text than their common law colleagues would be. And if the real meaning of a legal text still remains doubtful in spite of various interpretation theories, Continental European judges are far less scrupulous about taking a functional approach than their English or American counterparts. Thus, it appears to be inevitable that, in both civil law and common law countries, interpretations will be influenced to a certain extent by national theory. As long as the ultimate goal, i.e., uniform application of the Convention's rules remains unchallenged, such recourse does not disturb anyone. Things may change, however, if such differences lead to ambiguity or even to contradiction.

52. Differences in interpretation theories are an important threat to the uniform application of international instruments, however, not the only one. Another considerable danger arises, e.g., from inaccurate translations of texts,[45] [page 40]

An example based on personal experience may illustrate this point. After the international adoption of a new multilateral convention, the German-speaking countries usually meet in order to prepare a common German-language version of the new instrument. Since the French version always serves as the official text in Switzerland, Swiss delegates to the translation meetings must be especially careful to avoid unacceptable discrepancies between the French and the German versions.

53. With respect to the Vienna Sales Convention, the translation meeting was held in January 1982 in Bonn, and the preparatory draft of the translation was drawn up on the basis of the official English text. At the meeting, three out of four Swiss interventions were raised against deviations from the French version that were considered too far-reaching. The meeting made it clear that in most instances the deficiencies were not due to the basic German draft, but to the fact that the original English and French texts contained discrepancies. In many cases, consultation of the Spanish and Russian versions was inevitable. Thus, sincere efforts towards achieving uniform application of the Vienna Convention may require consulting its texts not only in one but in several official languages.

54. In order to achieve uniform application of the Convention, in addition to applying basically similar interpretation theories and taking other linguistic versions of the same provision into account, the courts of one country should be able to consult the judicial decisions and doctrine of another country. Achieving this aim will require considerable effort either on the part of UNCITRAL [page 41] or another appropriate international entity.[46]

Undertakings of this kind already exist. The UNIDROIT in Rome publishes a periodical survey of the cases related to the conventions on international shipment of goods; the Asser Institute in the Hague does the same in regard to the conventions of the Hague Conference; and the EEC publish a loose-leaf digest on the decisions of the Luxembourg EEC-Court.

55. Finally, according to Art. 7 para. 1 of the Convention, the interpretation should promote good faith in international trade.

This element is from the chapter on formation of contracts. The original idea was that in the course of dealings leading to the formation of a contract, the parties should observe the principles of fair dealing and acting in good faith. This idea was finally accepted as a general interpretation rule to be applied to the Convention as a whole. Similar rules are to be found in national legislations.[47]

As soon as the Convention enters into force, Art. 7 para. 1 will be of paramount importance, and rather soon thereafter, an ample judicial practice will be engaged in handling this rule.

3. Gap-filling

56. According to Art. 7 para. 2, a question that is governed by the Convention but does not find an express solution in it shall be settled in conformity with the general principles on which the Convention is based or, in the absence of such principles, in conformity with the law applicable by virtue of the conflict-of-laws rules. [page 42]

Depending on one's legal education, these general statements can imply rather different things as is illustrated by the following two examples.

57. In an early comment on the UNCITRAL Draft the German, scholar Ulrich Huber [48] stated:

"The question of what has to be considered as a gap under the Convention, cannot be answered on a mere rational basis. Someone who has a positive stand towards the Convention will discover but few gaps. On the other hand, if a person is skeptical about the international unification of the sales law, he will every now and then run into unsettled questions. In addition, a common law jurist, because of his legal tradition, will probably tend towards a more restrictive interpretation of the Convention and its provisions. Thus, he might more often be confronted with a gap, than would be a civil law jurist. Civil law jurists are more frequently used to work with generally framed, systematically conceived legal codes. Out of this experience, they are more readily prepared to solve unsettled questions or to fill gaps by referring to the general principles contained in the code itself."

58. On the other hand, John Honnold wrote in his book on the Vienna Sales Convention:[49]

"The invitation to seek and apply general principles of the Convention calls for caution and restraint. Before deciding a case on the basis of an [page 43] unstated 'general principle' a tribunal should answer two questions: First, is the case at hand clearly analogous to those that fall within the Convention's specific provisions? And second, would the extension of a provision by analogy conflict with another policy embodied in the Convention?"

And he continues: Like the inductive approach employed in case law development, different steps have to be taken: The first step is the examination of instances and cases expressly regulated by specific provisions of the Convention. The second step is to choose between the following conclusions: a) Did the Convention deliberately reject the extension of a specific provision?, or, b) Does the lack of a specific provision to govern a given case result from the failure of the Convention's drafters to foresee this case and resolve it? Only in this second hypothesis can the gap-filling procedure take place.

59. As the two different statements indicate, personal legal education will be of extreme importance in influencing not only the interpretation of the Convention but also the filling of gaps.

This is all the more true in view of the act that Art. 7 para. 1 invites one, in the final instance, to resort to the principles of he national law applicable by virtue of conflicts rules.

In this respect, ULIS and the Vienna Convention follow a basically different philosophy. Whereas Art. 17 of ULIS was self-contained in the sense that all interpretation and gap-filling problems had to be solved within the uniform text itself,[50] the Vienna Convention is more open and [page 44] remains accessible to solutions which allow recourse to the principles of the national law of sales.

4. Statements and conduct of the parties

60. Whereas Art. 7 deals with the interpretation of the Convention and its rules, Art. 8 applies to the interpretation of the statements and conduct of the parties.

In this sense, the rules of Art. 8 specify, e.g., whether the communications between two parties have been sufficient in form and substance so as to be considered a firm offer or create a contract. This rule initially comes from the part on formation (Art. 4 ULF).[51]

61. The eternal conflict between the subjective intent of the speaker and the real understanding of the addressee continues in connection with the interpretation of the statements or conduct of the contracting parties.

Art. 8, which had to face the conflicting interests in this field, commences with a rule on the subjective intent of the declaring party (para. 1); however, the rule requires a qualified addressee, for it presupposes that the latter knew or could not have been unaware of the speaker's intent.

In most cases it cannot be proved that one is dealing with a qualified addressee. Therefore, Art. 8 refers, in the second instance, to the standards of a reasonable person (para. 2).

62. Whether subjective intent or standards of a reasonable person, in both cases Art. 8 para. 3 indicates the elements of interpretation: Due consideration is to be given to all relevant [page 45] circumstances, to the negotiations, to the practices between the parties and to their subsequent conduct. These elements are fully in line with the traditional rules of interpretation of modern contract law.[52]


63. In spite of certain similarities between national law and the new Vienna rules or even because of these very similarities, it should be emphasized that, when it comes to the application internationally unified law, even the best legal education in a national system remains patchwork if it is not complemented by elaborate training in comparative law. A worldwide unification of the sales law cannot be realized by the mere drafting and entry into force of a multilateral Convention. What has been done thus far by UNIDROIT, UNCITRAL or the Vienna Diplomatic Conference is a necessary precondition to such unification. If, however, the unification is to come life, then important additional work will have be done by legal scholars through their writing and teaching. In fact, the uniform law of sales will not be and -- this is even more important -- will not remain uniform unless we can count on a young generation of lawyers with an adequate international legal education. [page 46]


1. Several books and numerous articles have already been written on the Convention. (Cf. list P. Doralt, ed., Das UNCITRAL-Kaufrecht im Vergleich zum österreichischen Recht. Referate und Diskussionen des Symposiums in Baden bei Wien, 17. -19. April 1983 Bd. 1 (Wien 1985) pp. 11-14. In addition, several symposia on the International Sale of Goods have taken place in recent years, e.g.: a) Symposium of Baden bei Wien, 17-19. April 1983 (cf. P. Doralt, supra n. 1; b) Annual International Law Seminar of the Organization of American States (OAS), Rio de Janeiro, Brazil, 18-19 August 1983; c) International Conference on the Techniques of International Commerce, Abidjan, Ivory Coast, 21-23 November 1983; d) Institut suisse de droit comparé, Colloque relatif à la Convention des Nations Unies sur les contrats de vente internationale de marchandises, Lausanne, 19-20 novembre 1984 (publication en préparation); e) Asian Pacific Trade Law Seminar, Canberra, Australia, 22-27 November, 1984.

2. Ch. Rousseau, Droit international public t. I (Paris 1970), p. 68; A. Verdross/ B. Simma, Universelles Völkerrecht. Theorie und Praxis (Berlin 1981), p. 271.

3. J.P. Müller/L. Wildhaber, Praxis des Völkerrechts, 2nd ed. (Bern 1982), p. 116. A. McNair, The Law of Treaties (Oxford 1961), p. 79 et seq.

4. Müller/ Wildhaber, supra n. 3, at p. 97 et seq.; Verdross/Simma, supra n. 2, at pp. 436, 440.

5. Müller/Wildhaber, supra n. 3, at p. 116; Verdross/ Simma, supra n. 2, at p. 441.

6. Cf. Convention no. 111 of the ILO on discrimination in the field of employment and profession of 25 June 1958.

7. Cf. J.P. Müller/L. Wildhaber, supra n. 3, at pp. 118-122, and cases mentioned.

8. R. Herber, "Vorbemerkung zum Verhältnis der einheitlichen Kaufgesetze zu den Haager Uebereinkommen," in H. Dölle ed., Kommentar zum Einheitlichen Kaufrecht (München 1976) p. XXXIX. ULIS and ULF had different official dates in some Contracting States because they were signified by the date on which they became nationally effective.

9. Geneva Convention of 7 June 1930 providing a Uniform Law for Bills of Exchange and Promissory Notes, League of Nations Treaty Series 143, 259; Geneva Convention of 19 March 1931 providing a Uniform Law for Cheques, League of Nations Treaty Series 143, 357.

10. Müller/ Wildhaber, supra n. 3 at p. 97; Verdross/ Simma, supra n. 2 at pp. 436, 440.

11. As to Great Britain see, e.g., the House of Lords in Buchanan & Co. vs. Babco Forwarding and Shipping, (1978) A.C. 141; (1977) I All E.R. 518. The case involved an Act of Parliament that implemented the Geneva CMR Convention of 1956 on the liability of carriers transporting goods by road. The House of Lords refused to take into account the case law of Courts in Continental Europe, for the British implementary legislation did not contain a provision on interpretation and consideration of case law of other Contracting States.

However, the outcome was different in Fothergill vs. Monarch Airlines (1980) 2 All E.R. 696, (1980) 3 W.L.R. 209. In this case the Act of Parliament, which implemented the Warsaw Convention of 1929 (amended at the Hague in 1955) on the Liability for Carriage of Goods by Air, provided for a rule of interpretation and the Consideration of the text in a foreign (French) language.

12. Cf. infra, N. 57-59; J. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention (Deventer 1982), pp. 125-128.

13. Cf. cases mentioned in n. 11.

14. P. Volken, Konventionskonflikte im internationalen Privatrecht (Zürich 1977), pp. 238-242. .

15. Art. 1 para. 1: "This Convention applies to contracts of sale of goods between parties whose places of business are in different States."

16. The same rule can already be found in ULIS. Its Art. 1 para. 3 provides: "The application of the present Law shall not depend on the nationality of the parties." And Art. 7 of ULIS adds: "The present Law shall apply to sales regardless of the commercial or civil character of the parties or of the contracts."

17. Cf. infra n. 23, 24.

18. R. Herber, "Anwendungsbereich des UNCITRAL Kaufrechtsübereinkommens," in P. Doralt, ed. supra n. 1, at p. 34; J. Honnold, supra n. 12, at N. 12-14, 40. P. Schlechtriem, Einheitliches UN-Kaufrecht, Beiträqe zum ausländischen und internationalen Privatrecht, Bd. 46 (Tübingen 1981) pp. 9-10.

19. Same opinion J. Honnold, supra n. 12, at N. 41; P. Schlechtriem, supra n. 18, at p. 12.

20. Cf. "Commentary on the Draft Convention," prepared by the Secretariat (Doc. A/Conf. 97/5), in UN-Conference on Contracts for the International Sale of Goods; Vienna, (1984) p. 295; P. Schlechtriem, supra n. 18, at pp. 9-10. 1980; Official Records (New York 1981), p. 14 et. seq. Commentary on Art. 9, para. 7-9.

21. As to the relationship between substantive sales law and conflict-of-laws rules see H. Dölle, "Einheitliches Kaufgesetz und internationales Privatrecht," RabelsZ (1968) p. 438, with English summary at pp. 448-449; J. Kropholler, "Der 'Ausschluss' des internationalen Privatrechts im einheitlichen Kaufgesetz," RabelsZ (1974) p. 372 with English summary at pp. 386- 387. Are in favor of the exclusion of conflicts rules: R. Herber, supra n. 18, at pp. 36-37; J. Honnold; supra n. 12, at N. 47. Are in favor of retaining the reference to conflicts rules: The Commentary of the Secretariat, supra n. 20, at p. 15; Th. Krapp, 1 ZSR (1984) p. 295; P. Schlechtriem, supra n. 18 at pp. 9-10.

22. Art. 1 para. 1 of ULIS reads as follows:

"1. The present Law shall apply to contracts of sale of goods entered into by parties whose places of business are in the territories of different States, in each of the following cases: (a) where the contract involves the sale of goods which are at the time of the conclusion of the contract in the course of carriage or will be carried from the territory of one State to the territory of another; (b) where the acts constituting the offer and the acceptance have been effected in the territories of different States; (c) where delivery of the goods is to be made in the territory of a State other than that within whose territory the acts constituting the offer and the acceptance have been effected."

Art. II and III of the Hague Convention of 1964 relating to ULIS offer different reservations to this article.

23. In this sense the original Draft of UNCITRAL, see Commentary, supra n. 20, at p. 15.

24. The Hague Conference on Private International Law is about to renew and revise the rules on the Law Applicable to Contracts for the International Sale of Goods. An extraordinary session of the Conference is to take place at The Hague from 14 October - 2 November 1985.

According to Art. 7 para. 1 of the new Draft Convention of the Hague Conference: "A contract of sale is governed by the law chosen by the parties." And Art. 8 para. 1 adds: "To the extent that the law applicable to a contract of sale has not been chosen in accordance with Article 7, the contract is governed by the law of the state where the seller has his place of business at the time of conclusion of the contract." See Hague Conference on Private International Law -- Sales Preliminary Document No.4 of August 1984, at pp. 13, 15; and report by A.T..von Mehren, p. 28 et seq. pp. 48-58.

25. Art. 95 was adopted on 10 April 1980 at the last plenary meeting of the Vienna Conference; the proposal was put forward by the Czechoslovakian delegation, Official Records, supra, n. 20, at p. 229. An earlier proposal of M.R. Herber (FRG) which suggested deleting Art. 1 (1)(b) was fortunately rejected altogether, see Official Records, supra n. 20, at pp. 236-238.

26. See, however, the Uniform Commercial Code, which has been adopted by 51 jurisdictions.

27. See Official Records, supra n. 20, at pp. 165, 434, 435. On the other hand, such a State will appear on the list of ratifications or accessions although the Convention applies only to some of its units.

28. See Official Records, supra n. 20, at p. 436. Art. 94 was not only adopted with respect to the General Conditions of Delivery of Goods that are applicable to transactions between organizations of CMEA-Member states (in this sense J. Honnold, supra n. 12, at N. 460); Art. 94 applies also to the Benelux, the Scandinavian countries or to Australia and New Zealand.

29. Are Member States of ULIS and ULF: Belgium, Gambia, the Federal Republic of Germany, Israel [52], Italy, Luxembourg, the Netherlands, San Marino, the United Kingdom.

30. A former Contracting State ceases to be bound by the Convention.

31. Cf. J. Honnold, supra n. 12, at. N. 50; P. Schlechtriem, supra n. 19, at p. 13.

32. R. Herber, supra, n. 18, at p. 39; J. Honnold, supra n. 12, at N. 59-60.

33. R. Herber, supra, n. 18, at pp. 40-41.

34. The exclusion may also take place by an express reference to general conditions. On the other hand, the choice of a forum does not necessarily include the choice or exclusion of the Convention; J. Honnold, supra n. 12, at N. 74-84; P. Schlechtriem, supra n. 19, at pp. 21-22.

35. Art. 5 para. 2 ULIS: "The present Law shall not apply to sales: (b) by authority of law or on execution or distress.

36. See U. Huber, "Der UNCITRAL-Entwurf eines Uebereinkommens über internationale Warenkaufverträge," RabelsZ (1979) p. 422. Official Records, supra n. 20, at p. 16, para. 6.

37. Art. 5 para. 1 ULIS: "The present Law shall not apply to sales: (d) of any ship, vessel or aircraft, which is or will be subject to registration;

38. See Official Records, supra n. 20, at pp. 16, 240.

39. Supra n. 19. at p. 16.

40. Supra n. 12, at N. 54.

41. Cf. N. 3.

42. The Vienna Convention on the Law of Treaties of 1969 is reprinted in Am. J. Int. Law (1970) p. 875.

43. See supra n. 11.

44. J. Honnold, supra n. 12, at. N. 90-92.

45. See also J. Honnold, supra n. 12, at N. 90 et seq.

46. The same postulate was formulated by P. Schlechtriem, in P. Doralt, ed. supra n. 1, at p. 46.

47. See, e.g., 1-203 UCC; 242 BGB; Art. 2 ZGB.

48. Supra n. 36, at pp. 432-433.

49. Supra n. 12, at N. 102.

50. Art. 17 ULIS: "Questions concerning matters governed by the present Law which are not expressly settled therein shall be settled in conformity with the general principles on which the present law is based."

51. See Official Records, supra n. 20, at p. 18.

52. See F. Bydlinski, "Das allgemeine Vertragsrecht," in P. Doralt, ed. supra n. 1, at pp. 74-75.

Pace Law School Institute of International Commercial Law - Last updated September 4, 2002
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