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Reproduced with the permission from 27 American Journal of Comparative Law (1979) 311-323

[This is a commentary on provisions on Formation of the contract, contained in the 1978 Draft. Except as indicated by an Editor's note added to this text, there are only minimal differences between the 1978 Draft provisions on Formation of the contract and the provisions on Formation of the contract contained in the CISG.]

excerpt from

Problems of Unifying Law on the Formation of Contracts for the International Sale of Goods

Gyula Eörsi

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Doctrine of Consideration

The Draft Convention makes no mention of the doctrine of consideration. It might be argued that problems in this area cannot arise, since "consideration" is supplied by the exchange of promises to deliver and to pay. However, this is not always the case. There may be supplementary covenants where consideration is missing. For example, in the interest of business relations the seller may promise to replace parts and components, when he is not obliged to do so under the contract or by law.

What does the silence of the Draft Convention on the issue of consideration mean? The Draft Convention expressly states (Art. 4) that ["except as otherwise expressly provided"] it "is not concerned with (a) the validity of the contract. . . ." [17] It could be argued that a challenge to enforceability of a promise for lack of consideration is an issue of "validity" and thereby remitted, under conflict rules, to the applicable national law. But it could be argued that recourse to a national law that makes promises unenforceable for lack of consideration would be inconsistent with art. 27 of the Draft Convention [became CISG art. 29] which states: "(1) A contract may be modified or abrogated by the mere agreement of the parties." Still, art. 27 [became CISG art. 29] can support two conflicting conclusions: (1) Since the article applies only to modification and abrogation, a contrario the doctrine of consideration may be applicable to the formation of the contract. (2) On the contrary, since substantially the same rules are applicable to the formation, abrogation and modification of contracts (in each case an agreement will be required) the exclusion of the requirement of consideration from abrogation and modification also extends by analogy to formation. This conclusion seems to be supported by the fact the question did not even surface, in connection with the 1964 Hague Convention on Formation (ULF).[18]

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17. It is difficult to distinguish between (1) avoidable and (2) unenforceable contracts. The first, with the aid of the substantive law, leads to the same conclusion as the second, with the aid of procedural law.

18. It is true that art. 1(9) ULF, unlike the Draft Convention, wholly excludes conflicts law; yet this exclusion is expressly limited "for the purpose of the application of the present law. . . ." Since ULF is not applicable to validity, the ULF provision excluding conflicts rules would likewise not be applicable to validity questions.

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Pace Law School Institute of International Commercial Law - Last updated August 16, 1999

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