Uniform and Harmonized Sales Law

Excerpt from James J. Fawcett, Jonathan M.
Harris & Michael Bridge, "International

Sale of Goods in the Conflict of Laws" 0 Oxford University Press 2005. Reproduced
with their permission. See <ht-tp://www.oup.com/ukkatalogue/?ci=9780199244690>
for further data on this book.
Uniform and Harmonized Sales

Law: Choice of Law Issues
Michael Bridge
I. Introduction 16.01
1. Choice of Law and Uniform Law Distinguished 16.02
2. Features of Uniform Law 16.04
3. Harmonization of Law 16.06
4. Harmonized Law and Choice of Law 16.09
The United Nations Convention on the International Sale of Goods
1980 16.10
1. The History of the Vienna Convention 16.10
2. The Use of Choice of Law in Determining the Scope of the Vienna
Convention 16.12
The Uniform Law on the International Sale of Goods 16.12
Application of the Vienna Convention 16.16
Article 1(1)(a) and Dual Contracting State Residence 16.23
An Incomplete Rule of Private International Law? 16.24
Article 1(1)(b) and Private International Law 16.26
How the Forum Applies the Convention under Article 1(1)(b) 16.28
The Place of Business 16.32
3. The Use of Private International Law in Filling Gaps in the
Vienna Convention 16.42
General 16.42
Private International Law and Interpretation 16.45
Defining the Scope of the Convention 16.46
The Unidroit Principles of International Commercial Contracts 16.47
General Principles on which the Convention is Based 16.56
Exclusion Clauses and Penalty Clauses 16.61
Validity and Misrepresentation 16.71
Validity and Property 16.73
4. The Boundaries of Sale in the Vienna Convention 16.75
The Convention and National Law 16.76
Tort Law 16.77
Misrepresentation 16.82
The Outer Boundary of Sale 16.83
Sale Contracts Excluded from the Convention 16.84
The Definition of Sale under the Convention 16.89
Contracts Akin to Sale 16.91
Framework Contracts 16.95
5. Conflicts and Overlaps Between the Vienna Convention and the
Rome and Hague Conventions 16,96
906 Chapter 16: Uniform and Harmonized Sales Law: Choice of Law Issues
The Rome Convention 16.98
Hague Sale Convention 1955 16.114
Hague Sale Convention 1986 16.118
6. The Effect of Reservations and Declarations 16.121
General 16.121
The Article 92 Declaration 16.123
Article 28 and Specific Performance 16.142
7. Limitation Periods and International Sale 16.146
I. INTRODUCTION
16.01 The purpose of this chapter is mainly two-fold: first, to determine the
respective spheres of, on the one hand, harmonized and uniform law and,
on the other hand, the choice of law process; and second, to track the role
of choice of law rules within harmonized and uniform law. To determine
the roles of uniform law and of choice of law rules is as necessary in a
book dealing with private international law as it is to select between com-
peting laws in the choice of law process. Nevertheless, though competing
choices of national law may each repel the other, it is a fallacy to believe
that uniform substantive law and choice of law are mutually exclusive
processes, which is why a careful account has to be taken of their inter-
action. This account will be based preponderantly upon the United
Nations Convention on International Sale of Goods 1980.1
1. CHOICE OF LAW AND UNIFORM LAW DISTINGUISHED

16.02 Choice of law is a process that, amongst competing laws, permits the
selection of an applicable law to one or more issues arising under a legal
relationship. The rules applied in the choice of law process are the rules of
the legal system whose courts are seised of the matter. In that sense, choice
of law rules are part of the domestic law of the foram state whose courts
apply those rules. In consequence, choice of law rules may vary from state
to state unless and to the extent that different states by convention have
adopted uniform choice of law rules. The Hague Conference on Private
Hereinafter, Vienna Convention. It is common to abbreviate this Convention as the CISG

l
(Convention on International Sale of Goods) but the Convention exists in the six officia
languages of the UN and an abbreviation that is true to only one of those languages (English) may
be thought to be lacking in the spirit of internationalism.
I. Introduction 907
International Law has been the source of numerous multilateral con-
ventions adopted more or less by individual states? Outside the Hague
Conference, the various European Community countries have bound
themselves by multilateral treaty, the Rome Convention on the Law
Applicable to Contractual Obligations 1980, to legislate for uniform choice of
law contract rules.
The adoption of uniform choice of law rules brings about the convergence 16.03 of
different states' laws, but only up to a point. In so far as a contractual
matter, for example, might be litigated in different Member States of the
European Community, then in principle it ought not to matter whether
the matter is brought before the courts of England, Belgium, Germany or
any other Contracting State. The applicable law should be the same. If
the parties expressly choose Belgian law to be the applicable law, then the
courts of any Contracting State will apply Article 3 of the Rome Con-
vention to uphold the parties' choice. Alternatively, if the parties have not
selected an applicable law, all national courts, pursuant to Article 4, will
turn to the law of closest connection,' which is presumed to be the law of
the place where the characteristic performer is resident.'
2. FEATURES OF UNIFORM LAW
The relatively modest aims of uniform choice of law rules should be 16.04
noted. They discourage forum shopping but they do nothing to diminish
the plethora of substantive laws that might be applied to a contractual
matter, except in this respect. So far as uniformity in the choice of law
process promotes party autonomywhich is not a necessary component
of this processit encourages the development of substantive laws so
that they accommodate the commercial aspirations of contracting parties,
even as it reduces in practice the number of laws applied in the various
courts of the Contracting States, as parties tend to select the more com-
mercially friendly and predictable laws. Even so, the burden of handling
or mastering a multiplicity of laws imposes costs on business. Individual
contracting parties cannot be sure of imposing their own preferred law on
each other. Moreover, as far as sale goes, party autonomy applies only to
the contractual aspects of sale and not to its proprietary aspects.5
2 Apart from conventions attracting different numbers of Contracting States, the number of
such states required before the convention enters into force will vary from convention to
convention. The Unidroit Convention on International Financial Leasing (Ottawa 1988), for
example, came into force upon its adoption by only three states (Art 16(1)). On the other
hand, the number required for the Vienna Convention was ten states (Art 99(1)).
3 Art 4(1). See Ch 13 above. Art 4(2), 5 See Ch 18 below.
16.05 Uniform choice of law also has two significant shortcomings that it shares,
though not necessarily to the same degree; with uniform substantive law.
To the extent that interpretation of the terms of a choice of law convention
rests ultimately with the highest courts of Contracting States, as opposed
to an international commercial court of one sort or other, there is no
binding means, apart from exhortative or mandatory provisions in the
Convention, to be guided by international considerations in interpreting
the Convention, to maintain uniformity.6 The protocol to the Rome Con-
vention, if ever it comes into effect,' will resolve this problem by vesting
ultimately in the European Court of Justice the task of interpreting the
Convention. The other significant shortcoming concerns the distinction
between substantive and procedural law. Procedure is a matter for the law
of the forum, which also defines what constitutes procedure.' The extent
of uniformity in the choice of law process depends greatly upon how
extensive and how uniform are the definitions of procedure in the laws of
the various Contracting States. The prevailing trend, however, seen more
clearly in the case of uniform choice of law, is to diminish the grip of the
6 For an unfortunate recourse to national considerations in interpreting the Vienna Con-

vention, see Cour d'appel de Chambery of 25 May 1993, R. J. corn. 1995, 242, note C Witz,
where in applying Art 3(1) the court was clearly influenced by the French national di-
stinction between contracts of sale and 'contrats d'entreprise'. A correct interpretation of the
Convention, guided by international considerations, would have led to the opposite
conclusion. For an illustration of the latter approach, see Oberlandesgericht Frankfurt of
17 September 1991 (translated at www.cisglaw.pace.edu/cisg/wais/db/cases2/
910971 g 1 .html).
See the Green Paper on the Conversion of the Rome Convention of 1980 on the Law
Applicable to Contractual Obligations into a Community Instrument and Its Modernisation
(COM(2002) 654, Brussels 14 January 2003) (known and referred to hereinafter as Rome
Green Paper 2003). If the Rome Convention is superseded by a ch'bice of law regulation, as is
likely, then the ECJ will in any event be the ultimate arbiter of its meaning.
6 Subject to any convention that defines as a matter of substantive law something that
under the law of the forum would be perceived as procedure. See, e.g. Art 14 of the Rome
Convention (burden of proof). As far as the Vienna Convention goes, there is authority for
the view that it deals with issues of the burden of proof: see Bundesgerichtshof of 9 January
2002 (translated at http://cisgw3.law.pace.edu/cases/020109g1.htm1). So far as the parol
evidence rule operates as a rule of evidence in the US, American decisions to the effect that it
has no part to play in the application of the Vienna Convention support the view that the
Convention supersedes rules of domestic procedural law arrived at by way of the law of the
forum: see Mitchell Aircraft Spares v European Aircraft Service (Federal District Court (Illinois)
of 27 October 1998 at http://cisgw3.law.pace.edu/cases/981027u1.html); MCC Marble
Ceramic Center Inc v Ceramica Nuova D'Agostino (Federal Court of Appeals 11th Circuit of
29 June 1998 at http://cisgw3.1aw.pace.edu/cases/980629u1.html); Filanti v Chilewich
International Corp (Federal District Court (New York) of 14 April 1992 at http:/ /cisgw3.1aw.
pace.edu/ cases /920414u1 .html); Calzaturinifico Claudia v Olivieri Footwear (Federal District
Court (New York) of 6 April 1998 at http:/ /cisgw3.1aw.pace.edu/cases/980406u1.html). For
the view that the parol evidence rule still applies, see Beijing Metals & Minerals Import/Export
Corp v American Business Center (Federal Court of Appeals 5th Circuit of 15 June 1993 at
http: / /cisgw3.1aw.pace.edu/cases/930615ul.html). Limitation periods will be discussed
below.
I. Introduction 909
law of the forum by subjecting procedural issues to the law applicable to the
contract. If anything, the above drawbacks to uniformity in the choice of law
process are even more pronounced for uniform substantive law given the
greater ambition and expanse of uniform law.
3. HARMONIZATION OF LAW
Whereas uniformity of law strives for identicality among the laws of the 16.06
various states, the goals of harmonization are not so fine-tuned. Within
the European Community, the difference between the two processes can
be observed in the distinction between regulations, directly applicable in
identical terms in all Member States,' and directives, which are binding as
to 'the result to be achieved' but leave it to the national law how the
directive itself should be transposed into domestic legislation and are thus
to that extent tolerant of diversity. In so far as directives permit national
difference, then the selection of the applicable law by way of the choice of
law process to define the content of the law within that margin of toler-
ance remains significant.
Taking the Directive on Unfair Terms in Consumer Contracts as an 16.07
example,' the applicable law would determine the extent to which terms
on the indicative 'grey list' of unfair terms gave rise to a significant imbal-
ance in the contract in breach of good faith' and indeed would determine
the type of conduct that accorded with good faith.' A reference instead to
the law of the forum would be inconsistent with the Rome Convention
1980.14 This is preferable to leaving the issue to the law of the forum.
Similarly, to take as an example the Directive on Guarantees in Consumer
Sales,' it should be the applicable law that determines whether a
consumer buyer has elected to take the remedies transposed from the
Directive or the remedies laid down instead by national sale of goods law.
In determining the line between national and community law, it is sub-
mitted, a distinction should be drawn between, on the one hand, the
meaning of undefined concepts that determine the application of the
Art 249 of the EC Treaty. 1 Art 249 of the EC Treaty.

la Council Directive (EEC) 93/13 of 5 April 1993, transposed as the Unfair Terms in Con-
sumer Contracts Regulations 1999, SI 1999/2083.
12
reg 5(1).
Case C-478/99 Commission of the European Communities v Kingdom of Sweden [20021 ECR
1-4147, para 11: since the grey list is non-exhaustive, it may pursuant to Art 8 of the Directive be
amplified or restricted in the national laws of Member States.
14 See Ch 13. It need hardly be said that the significance of the contents on the grey list,
itself operating from within a directive, cannot be given an autonomous European

interpretation.
(EC) 1999/44 of the Parliament and the Council of 25 May 1999 (transposed into English law
by SI 2002/3045, amending the Sale of Goods Act 1979).
Directive (or rather its transposed equivalent) and the application of

discretionary standards contained within the Directive together with its
detailed implementation. For example, expressions such as 'supply of
goods' and 'supply of services' in the Distance Selling Directive' should be
given an autonomous community meaning because, if they received
divergent national interpretations, the harmonization process itself would be
undermined.
16.08 The transposition of directives can be seen as producing sectoral harmon-
ization of law within the European Community. The aspirations of the
process of harmonization relate not to the outcomes of individual cases
but rather to the attainment of certain systemic goals, such as the pro-
duction of level competitive conditions and the evolution of a generation
of consumers with the confidence to shop across national frontiers in the
European Community.' The attainment of identical outcomes in indi-
vidual cases, sought by uniform law in both its choice of law and sub-
stantive law manifestations (though the outcomes are differently defined),
is not one of the goals of this harmonization process.
4. HARMONIZED LAW AND CHOICE OF LAW

16.09 Since harmonization does not bring about identical outcomes, it follows
that the choice of law process remains an active one amongst the states
subject to that harmonized law.' Furthermore, to the extent that har-
monization sets minimum standards, as it does in the consumer arena in
the European Community, the choice of law process is further boosted
so far as consumers might be able to rely upon higher standards of pro-
tection in certain states. The choice of law issues presented by uniform
law are just conventional issues of choice of law in contract.' To the extent
that the laws of England and of Germany, for example, are similar but not
identical in the case of the Directive on Consumer Sales Guarantees 1999,2
then it will remain important to select the applicable law. It might happen
that the transposition of the Directive in England, in a way that leaves
open the remedial structure of the Sale of Goods Act 1979 alongside the
new provisions, will raise questions of election by the consumer buyer
16 (EC) 1997/7 of the Parliament and the Council of 20 May 1997 (transposed into English law
by SI 2000/2334).
17 See S Weatherill, 'Consumer Guarantees' (1994) 110 LQR 545.
1 Nevertheless, insurance contracts relating to risks within the EU Member States are
excluded from the choice of law rules in the Rome Convention: Art 1(3). On one view, this is
because the various directives had achieved substantive harmonization, but a more realistic
view is that it was expected that specific rules for insurance contracts would later be devised
(which in fact never happened).
19 See Ch 13 for choice of law in contract. 2 1999 /44
II. LIN Convention on the International Sale of Goods 1980 911
between these two remedial regimes of a kind not to be found as a result of
changes to the German Civil Code, as part of the process of adapting
German law to the sum of community law in the area of consumer pro-
tection.' Determining whether the applicable law is German or English law
might therefore be significant for the purpose of determining the remedies
left open to a consumer buyer. This question goes beyond the rules in the
Rome Convention designed to ensure that the consumer is not prejudiced
by the selection of the applicable law in the choice of law process.22
II. THE UNITED NATIONS CONVENTION ON THE

INTERNATIONAL SALE OF GOODS 198023
1. THE HISTORY OF THE VIENNA CONVENTION
The uniform law movement in sale has a documentary history going back 16.10
three-quarters of a century. The detailed history is recorded elsewhere'
but its principal milestones are as follows. Upon the foundation of the
International Institute for the Unification of Private Law in 1926,25 the
great German jurist Ernst Rabel was successful in placing the subject of a
uniform law of international law on its agenda. A first draft was prepared
in 1935 but the Second World War halted further progress. After the war,
the matter was carried forward with a series of drafts between 1958 and
1963, the process culminating in two Hague conventions of 1964 con-
taining uniform laws on the international sale of goods (LTLIS) and on
the formation of contracts for the international sale of goods (LTLF). These
attracted very little support, most of it from western Europe, largely
because of the effective absence of the United States and the developing
and socialist nations from the legislative process. The process of achieving
real uniformity was given a major boost with the establishment in
See P Schlechtriem, 'The German Act to Modernize the Law of Obligations' (Oxford
Law Forum: http:/ /ouclfluscomp.org); R Zimmermann, 'Breach of Contract and
Comparative
Remedies under the New German Law of Obligations', in Centro di studi e ricerche di diritto
comparato et stranieri: Saggi, Conferenzi e Seminari (No 48, Rome 2002).
22 See Art 5.
This will be referred to in this text as the Vienna Convention, though it is more common to
use the acronym, CISG (Convention on International Sale of Goods), the drawback to which
is that it is unique to English, which is only one of the six official languages of the UN though it
was the language of the proceedings.
sa K Sono, 'The Vienna Sale Convention: History and Perspective' in P Volken and
P Sarcevic (eds), International Sale of Goads: Dubrovnik Lectures (New York: Oceana, 1986);
Schlechtriem, 1-3.
25 eased in Rome, this is an inter-governmental organization originally set up as a League
of Nations agency.
1966 of the United Nations Commission on International Trade Law

(UNCITRAL), an act largely inspired by the desire to give birth to a new
economic order. Work on (initially) two new instruments was launched in
1968, taking as its basis the uniform laws of 1964. A draft convention was
prepared in 1978 uniting contractual formation and the substantive law of sale
of goods and the final version was adopted at a diplomatic conference in 1980,
coming into force in 1988 when the requisite number of signatures had been
obtained. The Vienna Convention 19.80 has now been adopted by many
nations, including the greater part of the world's major trading nations.'6
16.11 In view of the importance of following the legislative history of the
Vienna Convention' when interpreting its provisions, the process of
enactment set in train by the UNCITRAL should be understood. It con-
sisted first of the efforts of a Working Group meeting on nine occasions
from 1970 to 1977, which worked on the texts of ULIS and ULF to produce
drafts of 1976 and 1977." These were reviewed by the full Commission
from 1977 to 1978, unanimously approved and combined into a single
1978 draft. The third stage was the 1980 diplomatic conference in Vienna.
Its work was entrusted to two committees' meeting simultaneously, in
each of which all states attending the Conference were represented?' This
final phase culminated in a plenary meeting which adopted the present
text of the Vienna Convention.
2. THE USE OF CHOICE OF LAW IN DETERMINING THE SCOPE

OF THE VIENNA CONVENTION
The Uniform Law on the International Sale of Goods

16.12 The part played by choice of law in determining the scope of the Vienna
Convention' can be seen in its clearest light by means of a preliminary
examination of its predecessor, ULIS. ULIS has attracted strong criticism
26 The major exceptions are the UK, Japan, India and Brazil.
See the invaluable compilation by J Honnold, Documentary History of the Uniform Law for
International Sales (Deventer: Kluwer, 1989), taken from the relevant volumes of the UNCI-
TRAL Yearbooks and the Official Records of the 1980 Diplomatic Conference in Vienna. The
proceedings are also available online (www.cisg/law/pace.edu/cisg/proceedingshtml).
ss
The first was on the substantive law of sale and the second on formation of the contract.
29 The first Committee dealt with Parts I-III (Arts 1-88), while the second dealt with Part IV
(Final Provisions).
30 See Honnold, n 27 above, at 1-4.
See generally P Winship, Private International Law and the U.N. Sales Convention'
(1988) 21 Cornell Intl Lj 487; I Dore, `Choice of Law under the International Sales Conven-
tion: a US Perspective' [1983j American I of Intl Law 521; J Kimball and S Harter, `Choice of Law
Issues in Contracts for the International Sale of Goods: Getting What You Bargained for in the
United States' (1997) 1 Intl Trade LQ 28.
II. UN Convention on the International Sale of Goods 1980 913
for its so-called universalism.' It is universal in the sense that the forum
state, if a Contracting State, is bound to apply ULIS, provided that the
contract complies with the factual requirements of an international sale as
defined in ULIS, regardless of whether the parties themselves, or even one of
them, resides in a Contracting State. In consequence, a jurisdiction
agreement in a contract of sale might have the inadvertent consequence, for
parties to a contract not containing an applicable law clause, that their
relations are governed by ULIS, an instrument to which they might not have
intended to commit themselves and of whose existence they might have
been quite unaware. The parties, indeed, might reside in non-Contracting
States and have, apart from the jurisdiction agreement or the accident of
litigation in a Contracting State, no connection at all with any Contracting
State.' This state of affairs will arise if the forum state is a Contracting State
and the parties have not in their contract, by means for example of an express
applicable law clause, availed themselves of the facility granted by ULIS to
exclude some or indeed all of its provisions.' The universalist approach of
ULIS was seen by some critics as amounting to the forcing of a foreign
convention upon a non-acceding country and the conferment of benefits
upon a non-signatory. One response to this latter criticism, however, is to
treat ULIS as part of the domestic law of the incorporating state so that the
incorporating state is applying the
Convention to itself and not to other states.35
The purity of LTLIS's universalism comes at a price. The Convention 16.13
introducing ULIS' permits Contracting States to make one or more
declarations that will in varying degrees circumscribe the universalist
character of ULIS. First, they may declare that they will apply ULIS only
in those cases where the parties reside in different Contracting States?
32 For practical purposes, ULIS has very little scope for application but it would be pre-
mature to treat it as a dead letter. The UK is still a party to it (though with reservations),
likewise San Marino and Gambia. Israel denounced it with effect from 1 February 2003
consequent upon its accession to the Vienna Convention. The instrument concerning the
latter was deposited with the UN on 22 January 2002, so that Israel became a Contracting
State 12 months later (see Art 99(2) of the Vienna Convention). For jurisdiction cases where
ULIS was the applicable law, see Ch 3 above.
See Report of the Secretary-General, Pending questions with respect to the revised text of a
uniform law on the international sale of goods (UN Documents A /CN.9/100, annex In), para 10
[1975] 6 UNCITRAL Yearbook 88, 89.
34 Art 3 of ULIS permits contracting parties to exclude ULIS either entirely or partially. as See
L Reczei, 'The Area of Operation of the International Sale Conventions' (1981)
29 American j of Comparative Law 513, 515-516,
Convention Relating to a Uniform Law on the International Sale of Goods (1964).
3' Art El: `.. [A]ny State may . . . declare . . . that it will apply the Uniform Law only if
each of the parties to the contract of sale has his place of business or, if he has no place of
business, his habitual residence in the territory of a different Contracting State . .
Declarations under Art lit were made by West Germany, the UK, San Marino and the
Netherlands. See the Uniform Law on International Sales Act 1967.
16.14 Second, they may declare that they will apply ULIS only where, pursuant
to a conflicts convention dealing with the international sale of goods and
to which they have acceded or which they have ratified, they are bound to
apply ULIS.' This is primarily a reference to the 1955 Hague Sales Con-
vention; it confines the application of ULIS to those cases where the
forum's rules of private international law lead to the law of a (ULIS)
Contracting State. Third, they may declare that ULIS will apply only if the
parties choose ULIS as the applicable law.' Of the small number of states
adopting ULIS, only Israel did so without making one or more of these
three declarations.
16.15 This universalist stance of ULIS reflects (subject to permitted declarations)

its repudiation of private international law as an engine for determining
the application of the uniform law. ULIS applies to those contracts of sale
where the parties' places of business are in different states and one of the
following three requirements is satisfied: first, the goods are to be carried
from one state to another, or, at the time of conclusion of the contract, are
in the course of so being carried; second, the acts constituting offer and
acceptance are effected in different states; and third, delivery of the goods
takes effect in a state other than the one where the acts constituting the
offer and acceptance are effected.'
Application of the Vienna Convention
16.16 The scope of application of the Vienna Convention was a matter for inten
sive debate throughout the process leading to its conclusion. The basic
" Art IV: 'Any State which has previously ratified or acceded to one or more Conventions on
conflict of laws in respect of the international sale of goods may . . . declare . . . that it will apply
the Uniform Law in cases governed by one of those previous Conventions only if that
Convention itself requires the application of the Uniform Law'. Italy and Belgium made
declarations under Art IV.
39 Art V: 'Any State may . . . declare .. . that it will apply the Uniform Law only to con-
tracts in which the parties thereto have . . . chosen that Law as the law of the contract'. The UK
and Gambia made declarations under Art V. See the Uniform Law on International Sales Act 1967.
4 These tests of internationality correspond almost exactly (and depart only acci-
dentally?) from the test of an international supply contract which is exempted from the
controls on exclusion and limitation clauses in the Unfair Contract Terms Act 1977 by virtue of s
26 thereof. See Amiri Flight Authority v BAE Systems plc [2003] EWCA Civ 1447, [2003]
2 Lloyd's Rep 767, CA, where the court, reversing Tomlinson below ([2002] EWHC 2481 at (28],
[2003] 1 Lloyd's Rep 50), ruled that a minor difference in the wording of the test in the Unfair
Contract Terms Act 1977 (s 26(4)(c): 'goods to be delivered to the territory of a State other than
that within whose territory [acts amounting to offer and acceptance] were done') and ULIS
('delivered in etc') had the practical effect that a contract where formation occurred in one state
and delivery occurred in another, but without crossing national borders, was not an exempt
international sale of goods contract. See further the discussion above, paras
13.305-306. The test for the exclusion of unfair contract terms legislation from international
contracts is currently under active consideration by the Law Commission.
IL UN Convention on the International Sale of Goods 1980 915
elements of the scope provision, Article 1, were the subject of debate
and proposed amendment as late as the 1980 Diplomatic Conference. The
main features of Article 1 that differentiate it from its ULIS predecessor are
first that it eschews any factual test of internationality. Hence it con-
tains no requirements concerning the transport of goods across national
frontiers or the formation of contracts in states other than those where
delivery takes place. Furthermore, the Vienna Convention differs from
ULIS in allotting a role to the place of business of the parties in different
states and to private international law.'
According to Article 1(1) of the Vienna Convention: 16.17
This Convention applies to contracts of sale of goods between parties whose

places of business are in different States:
(a) when the States are Contracting States; or
(b) when the rules of private international law lead to the application of the law
of a Contracting State.
A few preliminary points should be taken. First, the nationality of the 16.18
parties is explicitly disregarded for the purpose of determining the appli-
cation of the Vienna Convention."
Second, while the Convention will not as such be applied retrospectively 16.19 to
the contracting parties,' a forum may well find itself enforcing the
Convention in the case of a contract that was entered into before the
forum state itself adopted the Convention. If, for example, the United
Kingdom were to adopt the Convention in the case of a French buyer
and a German seller, its courts would apply the Convention by virtue of
Article 1(1)(a) to a contract concluded after the adoption of the Conven-
tion by Germany and France but before adoption by the United Kingdom.
Third, the test in Article 1(1) is a disjunctive one. There will be cases where 16.20
the application of either head could lead to the Vienna Convention. One
example of this is that of a German seller and a Belgian buyer where,
under the Rome Convention (the forum state being a Contracting State),
the applicable law is German law as the law of the place of business of
the characteristic performer.' Article 1(1)(b) directs the application of the
Vienna Convention. In addition, both Germany and Belgium are Con-
tracting States under the Vienna Convention, which is stated to be applic-
able under Article 1(1)(a). Of the two grounds for the application of the
" The role and scope of the place of business being in different states and of private
international law depend upon whether the Vienna Convention applies by virtue of Art
1(1)(a) or Art 1(1)(b).
42 Art 1(3). " See the discussion below, paras 16.39-41, of commencement dates.
Art 4(2), since the parties have not selected their own applicable law under Art 3.
Convention, however, the one in Article 1(1)(a), as a matter of common
understanding, is the dominant one. A measure of controversy is still
attached to the role of private international law in Article 1 (1) (b), as
witnessed by the debate surrounding its very existence and the Article 95
declaration permitting states to opt out of Article 1(1)(b).45
16.21 Fourth, Article 1(1), it should be noted, applies to states and not to legal
systems. The contract of a New York seller and a California buyer will not
fall under Article 1(1)(a). In the event that the United Kingdom becomes a
Contracting State, the same will be true for a Scots seller and an English
buyer. Suppose that a French court were to be led, by its rules of private
international law, to apply Scots law pursuant to Article 1 (1) (b) in a
dispute between a Scots whisky seller and a Japanese buyer (Japan being
a non-Contracting State). It is submitted that no distinction should be
drawn between the law in and the law of a Contracting State. The Vienna
Convention permits partial territorial application of the Convention in the
case of states with different laws applying in two or more territorial
units.' Consequently, if the United Kingdom were not to elect in favour
of severance,' by for example adopting the Convention with regard to
Scotland but not to England and Wales, it should be treated as a unified
territory for the purpose of Article 1(1)(b). Hence, in the above example,
the French court should apply the Vienna Convention in the event of the
United Kingdom becoming a Contracting State and should not declare
that Scotland is excluded from the operation of the Convention.
16.22 A final preliminary point to consider before Article 1 is examined in detail

is this. In the conventional choice of law process, it is for the parties
themselves to plead and prove foreign law. They may, quite often to
diminish legal costs and expedite proceedings, elect to have the forum
treat their case as though it were subject to the domestic law of the forum.
In this chapter, it will be argued that the Vienna Convention is in Con-
tracting States a part of the domestic law of the Contracting State. In
that state's courts, the Convention is not foreign law but rather local,
specialized law that applies in the same way as is applied any separate
Discussed below, paras 16.128-136. '6 Art 93.

47 By making a declaration under Art 93 (discussed below, para 16.125). Upon accession on
23 April 1991, Canada made such a declaration so that the Convention applied only to
Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia,
Ontario, Prince Edward Island and the Northwest Territories. At later dates, Canada had t he
Convention extended to Quebec, Saskatchewan and the Yukon Territory, as well as later to the
Territory of Nunavut, carved out of the Northwest Territories. An Art 93 reservation was initially
combined by Canada with an Art 96 reservation, so that British Columbia was excluded
from the application of Art 1(1)(b), but the declaration respecting British Columbia was later
withdrawn.
laws for commercial and consumer contracts of sale. If the Convention is
part of the forum state's domestic law in this way, and if that state sub-
scribes to the principle of jury novit curia,' then its courts will be bound to
apply the Convention even if the parties themselves do not invoke it.' It is also
arguable that the forum state as a Contracting State is bound to ensure
that its courts apply the Convention as required by Article 1. Nevertheless,
it is submitted, and in view of the long-standing freedom of litigants to ignore
applicable foreign law, Article 1 does not with sufficient clarity abridge this
freedom if it is to be applicable on its own terms. A further point is that, as
the parties are free to vary or detract from the Convention,' their conduct
in litigation might be seen as consensually varying their contract so as to
subject it to the national law that the forum would apply in default of the
Convention.' This point appears decisive: the forum state itself has no
interest in the choice of applicable law made by private contracting parties in
those cases where that state subscribes to the principle of freedom of choice
and there are no issues of public policy or mandatory principles to restrict that
choice.'
Article 1(1)(a) and Dual Contracting State Residence
Because of its disjunctive relationship to Article 1(1)(b), the dual place of 16.23
business in Contracting States provision in Article 1(1)(a) has on the face
of it no connection with rules of private international law. The Vienna
Convention therefore seems to apply as the law of the forum, but this
of course can only occur where the forum state is a Contracting State.
Contracting States are treaty-bound to see to it that their courts apply the
Vienna Convention, an obligation clearly absent where the forum state is a
non-Contracting State. Because this latter state's courts will be indifferent
to the dual place of business test in Article 1(1)(a), it follows that contracts
which might have been dealt with by the courts of a Contracting State
under Article 1(1)(a), or either under sub-paragraph (a) or (b), will often
be dealt with instead by the courts of a non-Contracting State, further to
its choice of law rules, in a way that is consistent with the application
" The court knows the law: the court seeks out the law captures the idea better, since the court
should not wait to be instructed by the parties.
See, e.g. the decision of the Tribunale Civile di Vigevano of 12 July 2000 translated at
httio:/ / cisgw3.1aw.pace.edu /cisg /wais/ db /cases2/00712i3 /Mu d.
sL Art 6.
51 A post-contractual change in the applicable law is permitted by Art 3(2) of the Rome
Convention.
In the case of those states that have made a declaration (see Art 96 of the Convention)
departing from the rule that contracts may be informally modified (see Art 29(1)), this
argument could not readily be run unless the modification were regarded as implicit in
written pleadings.
918 Chapter 16: Uniform and Harmonized Sales Law: Choice of Law Issues of the
rule in Article 1 (1) (a) by Contracting States. This is because an application
of the non-Contracting State's choice of law rules will often lead it to the
law of either the seller's or the buyer's country of business residence. For
example, the application of the characteristic performance rule in Article 4
of the Rome Convention will lead to the application of the seller's law.'
Precisely how such a reference to the seller's law then leads into the
Vienna Convention raises very similar issues to those arising when a
Contracting State applies the Vienna Convention pursuant to Article 1(1)(b)
and will be dealt with when that provision is discussed.
An Incomplete Rule of Private International Law?

16.24 It may be orthodoxy to state that the dual business rule is not a rule of
private international law, yet the proposition has been advanced that
Article 1 (1) (a) may be an incompletely formed rule of private inter-
national law binding on Contracting States. In his explanatory report
on the Hague Sales Convention 1986, Professor von Mehren writes that
Article 1(1)(a) 'can be seen as including a kind of choice-of-law rule, one
which makes the Vienna Convention as adopted and interpreted by either
the buyer's State or the seller's State applicable where both States are
Parties to the Vienna Convention'.' This notion emerged in the course of
the conference proceedings without being fully developed, so on that
account it should not be accorded a great deal of importance. Subject
to that, if Article 1(1)(a) is a choice of law rule, then it is an incomplete
one because it gives the forum no direction as to whether the applicable
law should be the seller's or the buyer's law.' As a choice of law rule,
See Art 4(2). See the decision of the Cour d'appel de Grenoble of 26 April 1995 (trans-
lated at ww-w.ciglaw.pace.edu/cisg/wais/db/cases2/950426f1.html; CLOUT Case 152),
applying the Vienna Convention pursuant to Art 1(1)(b), since the seller's place of business
was in France (a Contracting State) and the buyer resided in Portugal (a non-Contracting
State). But the court applied, not the Rome Convention, but Art 3 of the Hague Sales Con-
vention 1955 (as the French courts do) (which in most cases applies the sell er's law directly
and not as the law of the characteristic performer). Cf Schiedsgericht der Handelska.mrner
Hamburg of 21 March 1996 (translated at www.cig.law.pace.edu/cisg/wais/db/cases2/
960321g1.html; CLOUT Case 166).
54 Report on the Hague Sales Convention 1986, Proceedings of the Extraordinary Session
of October 1985, para 192. He does however go on to say that, given the part played by
Art 1(1)(a) in defining the application of the Vienna Convention, it 'seems both unnecessary
and undesirable' also to interpret it as a choice of law rule, especially when its value as such
is 'limited and problematical': ibid, at 57-59. On Art 1(1)(a) as a choice of law rule, see also
Dore, n 31 above; C Saf, 'A Study of the Interplay between the Conventions Governing the
International Sale of Goods' (www.cisg /law /p ace. edu / cisg/ text/ saf90.html).
ss If both rules of application of the Vienna Convention in Art 1 together are taken to be
choice of law provisions, then Art 1 itself is an incomplete choice of law provision in the
further sense that it gives no direction at all as to the governing law for those international
contracts of sale that fall outside Art 1. On statutes and private international law, see Dicey and
Morris, 16-26.
Article 1 (1) (a) would therefore play a different role than that played
by an internal rule of demarcation of the forum state, determining which of
two sales laws existing side-by-side in the law of the forum, the
domestic sales law or the Vienna Convention, should apply to the case in
hand.
If Article 1(1)(a) does amount to an incomplete choice of law rule, this 16.25
clearly has implications for the resolution of any conflicts between a
choice of law convention and the Vienna Convention in the case of a state
which is party to both.56 To the extent that the forum state resolves any
conflict by applying the Vienna Convention, it ought not in principle to
matter whether the Vienna Convention is applied as domestic law of the
forum state or by virtue of the forum's choice of law rules. This is because
the Vienna Convention is supposed to be uniform law whether the law
of the forum is the seller's law, the buyer's law or some third system of
law. To the extent, supposing this happens, that the Vienna Convention
acquires different settled meanings and scope in different legal systems,'
the question raised by Professor von Mehren will take on greater signifi-
cance. It may then be important to determine whether it is the Vienna
Convention of the seller's or the buyer's state that disposes of the matter.
Having raised the issue, it is perhaps unfortunate that Professor von
Mehren does not give a clear direction as to how it ought to be resolved. It
is submitted that Article 1(1)(a) should be taken at face value as directing
the application of the Vienna Convention as part of the law of the forum.
This avoids both needless complexity and any criticism of Article 1(1)(a)
as an incomplete rule, and it builds upon the express reference to private
international law in Article 1(1)(b) and the absence of any such reference
in Article 1(1)(a).
Article 1(1)(b) and Private International Law
In applying the Vienna Convention under Article 1(1)(b), the conventional 16.26
view is that the courts of the forum state are not applying their own
substantive law, at least in those cases where their choice of law rules
lead them to a substantive law other than their own. Rather, they are
applying the substantive law of the state identified by the forum's choice
of law rules. The text of Article 1(1)(b) does not say whose rules of private
international law are being applied, but practical sense and the absence of
e.g. the prohibition on renvoi in Art 15 of the Rome Convention.

56
57One area where there is a real risk of this happening is where states give varying
degrees of scope to rules of private international law (discussed below) in filling gaps in the
Vienna Convention, pursuant to Art 7(2).
any intelligible alternative mean that only the forum's own rules could be
applied.'
16.27 Some of the accidental character of the application of ULIS is evident
also in Article 1 (1) (b). Even if neither seller nor buyer is resident in a
Contracting State, the conduct of litigation in the courts of one Contract-
ing State may lead to the application of the Vienna Convention when the
different choice of law rules of another Contracting State would not have
had this consequence.' Suppose, for example, that an Australian court is
seised of a dispute between an English seller and an Indian buyer'
under a contract lacking an applicable law clause and calling for perform-
ance in Australia.' Under Article 1(1)(b), an Australian court concluding
that the applicable law is the law of the place of performance' should
have to apply the Vienna Convention.' This is because the court's choice
of law rules lead to the law of a Contracting State (Australia). If the dis-
pute were litigated instead in a Belgian court, that court applying the
characteristic performance rule in Article 4 of the Rome Convention,'
then the applicable law would be English law as the law of the seller's
residence (or place of business).
58 The application of the Vienna Convention under Art 1(1)(b) is a more complex matter in the
case of arbitration, in that the origin of the private international rules applied by the
arbitrator is no straightforward matter. The Rome Convention, for example, does not apply to
arbitration agreements (including arbitration clauses in agreements otherwise covered by the
Rome Convention) (see Art 1 (2)(d)). But that does not preclude an arbitrator from
applying choice of law rules as laid down in the Rome Convention. In the case of an arbitration
with an English seat, the arbitrator is required under English law to act in accord-
ance with s 46 of the Arbitration Act (since the notion of a delocalised arbitration is not
accepted by English law: see Dicey and Morris, para 16-030, n 1). Section 46(1) requires the
arbitrator to respect the parties' choice of applicable law. If there is no choice, the arbitrator
applies 'the law determined by the conflict of laws rules that [he] considers applicable' (s
46(3)a formula identical to Art 28(2) of the UNCITRAL Model Law on Arbitration and Art
33(2) of the UNCITRAL Arbitration Rules). The arbitrator is therefore not bound by
Rome but, though at liberty to select his own choice of law rules, should be open to the
argument that the Rome Convention is a respected and widely accepted statement of
applicable conflict rules. The arbitrator is therefore given a significant degree of freedom in
practice in moving to the application of the Vienna Convention.
Conventions on uniform choice of law will obviously diminish the likelihood of this.
60 Like the UK, India is not yet a party to the Vienna Convention.
61 Since Australia did not make a severance declaration under Art 93, the state in which the
Australian court is located and the state of performance need not be identified.
In accordance with the pre-Rome English position: see Bonython v Commonwealth of
Australia [1951] AC 201, PC.
If the forum, as is the case with Rome Convention Contracting States (Art 4 and charac-
teristic performance), applies a choice of law rule based upon the residence or place of
business of one of the contracting parties, then the same degree of accidental contact with the
Vienna Convention is absent.
On which, see Ch 13 above.
11. UN Convention on the International Sale of Goods 1980 921
How the Forum Applies the Convention under Article 1(1)(b)
An interesting question now presents itself as to how the forum arrives at 16.28 the
Vienna Convention once it is directed by its choice of law rules to
apply the law of a foreign, Contracting State. Before that question is
resolved, it should be asked how the forum arrives at the Vienna Con-
vention when its choice of law rules direct it to apply its own substantive
law. Suppose, for example, that a Belgian court, seised of a dispute
between a Belgian seller and an English buyer, applies Belgian law pur-
suant to Article 4(2) of the Rome Convention and the characteristic
performance rule.' Belgian law consists of the domestic rules of sale to be
found in the Code civil and of the international rules of sale as expressed
in the Vienna Convention. It seems clear that the forum must consider
internal Belgian rules of legal demarcation to determine which of these
two sales laws it applies to the case in hand. This choice is no different in
kind from the type of choice a court might have to make in a purely
domestic case where it has to determine whether its consumer sales law or
a commercial sales law is applicable.
Now, suppose that the Belgian court is handling a dispute between a 16.29
German seller and an English buyer and is led, again by Article 4(2) of the
Rome Convention, to the law of the seller's residence, in this case German
law. On one view, it considers the mass of German sales law and sees that
there is a sales law for domestic cases and a sales law for international
cases. It therefore does not consider German choice of law rules and .so
exercises an internal choice no different from the choice that the Belgian
forum made in the earlier example when it applied the Belgian inter-
national sales law. The forum is therefore not infringing provisions of
conflict of laws conventions that proscribe the use of renvoi.' But this
view, if it is correct, comes at a price. In treating the Vienna Convention as
part of the domestic law of the state whose law is the applicable law, it
domesticates the Vienna Convention as Belgian law, German law, New
York law and so on, which has substantial implications for the uniform
future of uniform law.
There is a way of invoking the machinery that avoids altogether the risk 16.30 that
a forum, in applying the law of another state, is reaching the Vienna
Convention by way of that state's private international law rules. A
different approach to the conventional reading of Article 1(1)(b) would
ej
Belgium is chosen instead of France in this example because a French court would
apply the Hague Sales Convention 1955 rather than the Rome Convention, whereas Belgium has
denounced the Hague Sales Convention.
" e.g. Rome Convention Art 15 (the applicable law is the law in force in the country in
question, minus its rules of private international law).
build upon the literal wording that the 'Convention applies' when the rules
of private international law 'lead to the law of a Contracting State'. The text
does not say that the Vienna Convention is applied as the law of that selected
Contracting State. On the other hand, it does not say that the rules of private
international law would 'otherwise' lead to the law of a Contracting State.
Putting aside this last linguistic point, the forum might be seen, pursuant to
the treaty commitments of the forum state, to be applying the law of the
forum which has supplanted the law that would otherwise have been
applicable by virtue of the private international law rules of the forum, these
rules having been displaced to the extent of the Vienna Convention's
coverage. This approach too would treat the Vienna Convention as part of a
domestic law, this time the domestic law of the forum. In the above
example, the Belgian court whose private inter-
national law rules led to the application of German law would desist from
applying German law at all and would instead look to its own law as
requiring the application of the Vienna Convention. As with the above
approach interpreted as avoiding the use of renvoi, this approach also
leads to the 'nationalisation' of the Vienna Convention. This alternative
approach cannot be adopted for a forum in a non-Contracting State. To the
extent that that forum's choice of law rules lead to a foreign law, it will apply
the Vienna Convention if so directed by the foreign law's rules of internal
demarcation or by its rules of private international law.
16.31 In sum, it may not matter whether, under Article 1(1)(b), the Vienna Con-
vention is applied as part of the law of the forum or pursuant to a rule of
internal demarcation of the state whose substantive law is called into
play by the forum's private international law rules. The former approach
is simplerwhich is a good reason for promoting itthough the latter
approach is somewhat more consonant with the forces of internationalism
that have arrested the homeward trend towards the law of the forum and
is more attuned to the spirit that lies behind the Vienna Convention. Yet,
on balance, the former approachbased on the notion that the forum
state is not truly engaged with the choice of law processis preferable for
the added reason that describing the application of the forum's own law
as the application of the law of the forum is subtly misleading. Different
states incorporate the provisions of multilateral conventions into their
own laws by different means. The United Kingdom makes use of imple-
menting legislation to which the terms of a treaty or at least some of them
are scheduled.' Most other states' may simply declare adherence to the
67 See, e.g. the Contracts (Applicable Law) Act 1990 to which the Rome Convention on the Law
Applicable to Contractual Obligations 1980 (discussed in Ch 13 above) is scheduled.
Adopting a monist view of public international law, as opposed to the dualist view of the
UK.
treaty by a declaration of the executive, whereupon the treaty has direct
effect. This latter style brings out vividly the point that the content of the law
of the forum is not of domestic provenance but consists of norms of public
international law, albeit norms that are superimposed upon norms, dealing
for example with civil procedure, of the law of the forum. To treat the
application of the Vienna Convention, wherever possible, as the application
of the law of the forum in this special sense does not diminish its standing as
international uniform law but rather enhances it. In the case of the
Vienna Convention, this point is further emphasized by Article 7(1), which
requires the interpretation of the Convention in an internationalist spirit.
This approach, which looks directly to the text of the multilateral
convention, has the merit of countering any 'nationaliza-
tion' of the Vienna Convention. It preserves the uniform character of the
Convention even as it is being absorbed within the legal systems of the
different Contracting States.
The Place of Business
A number of other issues arise out of the place of business test in Article 1. 16.32
First of all, the place of business of the parties in different states is to be
'disregarded' if 'this fact does not appear either from the contract or from
any dealings between, or from information disclosed, by the parties at any
time before or at the conclusion of the contract1.69 The first point to note is
that this provision applies equally to both sub-paragraphs (a) and (b) of
Article 1 (1). The second point is that the Vienna Convention does not
define 'place of business' at all. A joint Argentinian and Belgian proposal
to amend what became Article 10, which deals with the absence of a place
of business and choice between two or more places of business, was sub-
mitted to the Plenary Conference.' It sought to define 'place of business'
as 'a place where the party maintains a business organization having
power to negotiate or conclude contracts of sale or purchase in the name
of the party'.' As such, this amendment would have ruled out places
where a party's interests were looked after by an agent having only
powers of representation. The proposed amendment was voted down at
the Plenary Conference, partly because of perceived difficulties presented
by multinational corporations, partly because of a general resistance to
providing definitions in the Vienna Convention and partly because the
69 Art 1(2).
70 On 7 April 1980. See Honnold, n 27 above, at 727. It was one of the few proposed
amendments submitted to the Plenary Conference.
71 This came after the Belgian delegate had during the First Committee Deliberations
(para 66) unavailingly sought an explanation for the lack of any definition: Honnold, n 27
above, at 490.
amendment came very late in the day.' It was not just that any definition of
'place of business' was rejected. In addition, any attempt to narrow the
meaning of place of business to a fixed establishment which had con-
tract-making power was also rejected. The definition of 'place of business' is
therefore at large and capable of giving rise to disagreement. A French court
has held that a seller's liaison office through which the buyer placed its order
was not a place of business under the Vienna Convention since it lacked legal
personality.' Unless the office is just a letter box and is not involved in the
performance of the contract, this seems unduly restrictive. The Vienna
Convention does not require a place of business to have a legal personality.
16.33 The third point arises out of the somewhat loose wording of Article 1(2),
the mischief of which seems reasonably clear: the parties should not
become bound by the Vienna Convention when they are ignorant of a
basic jurisdictional requirement upon which the application of the
Convention depends, namely that their places of business are in different
states. Nevertheless, the wording of Article 1(2) raises some difficulties.
First of all, both parties, dealing with each other for the first time, may be
well aware that their places of business are in different states even if this
(perhaps unusually) is not stated in the contract and is not communicated
around the time of conclusion of the contract. Article 1(2) should not, it
is submitted, be read too literally in such a case. For example, a tribunal
should be prepared to accept knowledge of different national places of
business in those cases where this is implicit in the corporate titles of the
parties."
Only one party aware off oreign place of business

16.34 A more troublesome difficulty presents itself where only one party is
aware that the other's place of business is in a different country. For
example, a pre-contract communication from the seller may alert the
buyer to the fact that buyer and seller have their places of business in
different countries without the seller itself ever becoming aware of this
fact. This difficulty requires a close examination of the mischief behind
Article 1 (2), which above all seems to be to prevent surprise. For the
purposes of a forum's choice of law rules, knowledge of different places
of business is unlikely to play a role.' A party is not protected from the
n Decisions of the Plenary Conference, 6 April 1980, paras 65-90 (Honnold, n 27 above, at
738-740).
73 Cour d'appel de Paris (15th Division) of 22 April 1992 (Societe Fauba v Societe Fujitsu:
CLOUT Case 159; UNILEX 1996). (The UNILEX reports of international arbitral awards
(albeit few in number) are most helpful and are now available without subscription on the
intemet (www.unilex.info)). See C Witz, Recueil Dalloz Sirey 1995, Chronique 143.
74 e.g. SpA and GmbH. 75 e.g. it does not appear in the Rome Convention.
application of foreign law by ignorance, however justifiable, of the other's
place of business. In the absence of an express choice of the applicable law,
however, a forum's choice of law rules will lead to the application of
foreign law only if performance of the contract or part of it takes place
outside the forum state. And a contracting party's knowledge of the cross-
border character of the contract will itself put that party on notice of its
exposure to a foreign law. Now, it is because the application of the Vienna
Convention does not depend at all upon cross-border performance,
because for example it can apply to a contract concluded in state X where
performance takes place wholly within state X, as where goods are sold ex
warehouse with payment in the seller's currency, that the issue of
ignorance of exposure is presented and resolved in the way that it is in
Article 1(2).
What then is the effect of excluding the application of the Vienna Conven- 16.35
Lion? The forum will instead apply its choice of law rules to determine
the applicable law. Take a case where the seller's place of business is in the
forum state. It may be that the conclusion and performance of the contract
took place wholly within the forum state, in which case there will be no
choice of law process at work in any event. But if a substantial element of
performance takes place outside the forum state, the effect of excluding
the Vienna Convention may only be to apply a law other than the law of
the state where the seller's place of business is located. Where the parties
are unaware that their places of business are in different states, this
precludes the application of the whole of Article 1(1) and so blocks the
application of the Vienna Convention. This means that a court applying
its choice of law rules in search of the applicable law may not apply the
Vienna Convention even in those cases where its rules lead to the law of a
Convention state. Regardless of the way in which the Vienna Convention
might otherwise be applied by the law of the forum, the Convention, in its
own terms, denies its applicability.
In the light of the position set out above, it is not at all obvious that a 16.36
broad reading should be given to Article 1(2) so as to require both parties
to be aware of their places of business being in different states. It is
therefore submitted that, for the aware buyer and ignorant seller in the
earlier example, more particularly where a substantial element of per-
formance takes place outside the unaware seller's state, Article 1 (2)
should not be applied so as to remove the contract from the reach of the
Vienna Convention. The problem, nevertheless, is not an easy one.
Another possibility, which may be criticized for undue complexity, is to
apply the Convention when it is in the interests of the unaware party
to do so. Although it might have been difficult to draft an appropriate
provision, it would have been better explicitly to limit Article 1(2) to cases
where formation and performance of the contract took place exclusively
within one state.
Locating the place of business

16.37 The next issue is to determine the location of the parties' places of busi-
ness. This is dealt with, but only partly, in Article 10. Where a party does not
have a place of business as such, reference is made instead to his habitual
residence.' In the case of a party with more than one place of business, the
relevant place of business will be the one that has 'the closest relation to the
contract and its performance' in the light of the circum-
stances known to or contemplated by the parties before or at the time of
conclusion of the contract.' This provision departed from an earlier draft
which presumptively favoured the principal place of business,' which
was replaced by the present text drawn from the Limitations Convention.'
The issue of choosing the particular place of business of a party with more
than one place of business is of importance in two cases: first, where one of
these places of business is the same as the other con-
tracting party's place of business; and second, where one of these places of
business is located in a non-Contracting State.' Ln the first of these two
cases, the conclusion may be that the Vienna Convention is not to be
applied at all. In the second, the Vienna Convention may not be applicable
under Article 1(1)(a), though the possibility will remain of its applicability
under Article 1(1)(b).
16.38 It may not be straightforward to apply the closest connection test in

Article 10(1). If, for example, the head office of a company deals with the
conclusion of a contract but performance is rendered through a branch
office in another country, then a hard choice will have to be made as to
which of the two offices is the more closely involved. Since the Vienna
Convention is a unified text of substantive sales law and formation pro-
visions, there does not appear to be any possibility of splitting it so as to
assign Part II (Formation of the Contract) and Part III (Sale of Goods) to
different offices, which might have the result that only one of these two
parts applies to the contract in hand. Modern choice of law rules dealing
with the essential validity and performance of contracts place more
emphasis upon performance than upon formation. It may be that the same
trend will lead to the place of business for the purpose of Article 10
" Art 10(2).

77 The existence of more than one place of business was not dealt with in ULIS.
See the 1976 Working Group Draft, Art 4(a) (Honnold, n 27 above, at, 243).
Vienna Convention on the Limitation Period in the International Sale of Goods 1974, Art
2(c),
80 See UN Secretariat Commentary on the 1978 Draft, para 3 of Commentary to Art 9
(Honnold, n 27 above, at 409).
IL UN Convention on the international Sale of Goods 1980 927
being regarded as the branch office through which performance takes
place. This weighting in favour of the branch office will nevertheless be
diminished in so far as the extent of the branch office's involvement in
performance is not known or contemplated by both parties at the contract
date.
Place of business and commencement

The place of business is also important in connection with the corn- 16.39
mencement provisions in Article 100. For the purpose of whether a state is
or is not a Contracting State under Article 1, a distinction has to be drawn
between Parts H and III of the Convention. In the case of Part II, the critical
date, according to Article 100(1), is the date when 'the proposal for con-
cluding the contract' is made. The Vienna Convention draws a distinction
between proposals for concluding contracts and offers. It defines the latter
as a subset of the former consisting of those proposals that are 'sufficiently
definite and [indicate] the intention of the offeror to be bound in case of
acceptance'. Proposals for concluding contracts, however, are not defined,
which gives rise to problems under Article 1. As tempting as the inter-
pretation may be, it would be a cavalier reading of Article 100(1) to con-
clude that it simply means offers when it refers to proposals: it would
have been easy enough to say so explicitly if that had been the intention.'
Moreover, if the Vienna Convention is to apply intelligibly to a stream of
communications in order to pinpoint offer and acceptance, and if it is not
to collide with some other law applicable to the issue of formation,' it
seems sensible to apply it only if all the relevant communications between
the parties occur after the commencement date or dates in Article 1.
If this approach is defensible, the unanswered question is, 'What is a 16.40
relevant communication for the purpose of amounting to an undefined
proposal in Article 100(1)?' Does any communication taking place
between the contracting parties, and made before the relevant com-
mencement date, have the effect of removing the ensuing contract from
the reach of the Vienna Convention? If the answer were yes, then the
sending of a manufacturer's catalogue, a fortiori if this is accompanied
by a price list, perhaps months before the purchaser places an order,
will take formation issues outside the Vienna Convention. Yet it is hard
to know where the line is to be drawn at some point in the spectrum
between proposals like the sending of the catalogue and offers unless an
impressionistic approach is taken that looks only to proposals with some
Yet Art 100, like the other provisions of Part IV of the Vienna Convention, was drafted by
the Second Committee in Vienna, a body consisting of diplomats rather than lawyers.
It is not inconceivable that the two laws might both conclude that a contract has been
validly formed but disagree about time and place, which could have various implications.
plausible claim to being treated as offers or proposals that are made in the
immediate run-up to, or are an integral part of, the conclusion of a contract
(as the putative application of Part II might show). Alternatively, one can
oppose the view expressed above, that Article 100 is not confined to offers,
and say that it is indeed confined to proposals that become offers for the
purpose of Part II, which can only be adjudicated upon as and when the
conclusion is reached that Part II is applicable. On this view, Article 100 does
not explicitly mention offers because offers are defined in Part II and
defined terms in Part II cannot be putatively mentioned to determine the
commencement date of Part II. Nothing in the docu-
mentary history of the Vienna Convention gives any guidance on this
issue. It is submitted that the best solution to what is a problem of limited
duration, given the large number of states that have already implemented the
Vienna Convention and the disappearance of ageing contracts from the
system, is to apply Part II as from the date of commencement of
negotiations in the immediate lead-in to the contract. This may not be the
easiest of tests to apply but it minimizes the risk of a depecage with Part III
of the Convention applying to the rights and duties of buyer and seller and
some other system of law dealing with formation. This type of depecage is,
admittedly, as undisruptive as any depecage can be.'
16.41 In the case of Part III, the critical date for the purpose of Article 100 is the
date of conclusion of the contract. It is therefore perfectly possible to
have a contract governed by Part III of the Vienna Convention but not by
Part II, even though no state with an Article 1 connection to the contract
has entered under Article 92 a declaration that it will not be bound by
Part II. In some cases, the effect of Article 100 will merely be to shift the
basis on which Part II of the Convention is applied. If a proposal for
concluding a contract is made at a time when the law of the buyer's place
of business has not yet acceded to the Vienna Convention, but the forum
state and the seller's state have already acceded, then Part II, inapplicable
under Article 1(1)(a), will be applicable under Article 1(1)(b), by virtue of
Ss Even here, the discord between Arts 14 (Part II) and 55 (Part III), on whether the price
needs to be fixed, may give rise to trouble. It is notorious that Art 14 requires at least the
existence of price-fixing machinery for there to be a contractual offer, whereas Art 55
assumes that a reasonable price can be implied if the contract is silent on the price. In the UN
Secretariat's Commentary on the 1978 draft (see Honnold, n 27 above, at 435), the dis -
crepancy is explained away on the ground that Art 55 (Art 52 in the draft) applies in this
respect only as to states that have not adopted Part II of the Vienna Convention (Formation), but
note that the debates and the views of various commentators (see, eg, Schlechtriem,
108-110) suggest that the discrepancy cannot so easily be resolved. Unlike a Hague Con-
ference Report, a Secretariat Commentary is adopted along with the draft as amended.
Nevertheless, whilst that Commentary is of persuasive power under Art 7(1) of the Vienna
Convention, it is submitted that, especially given its brevity, it cannot be treated as the last
word on any subject.
the forum's private international law rules, if these point to the law of the
seller's place of business as dealing with formation issues.
3. THE USE OF PRIVATE INTERNATIONAL LAW IN FILLING

GAPS IN THE VIENNA CONVENTION
General
The enactment of the UK Sale of Goods Act in 1893' had the effect of 16.42
creating boundaries between the law of sale, on the one hand, and the law
dealing with other special contracts and the general law of contract, on the
other. Various devices, nevertheless; served to efface any sharp separation
between sale and cognate areas of law. One way was to apply the Sale of
Goods Act by analogy to other types of contract.' Another was to invoke
that provision of the Sale of Goods Act that rendered the general law
applicable to contracts of sale to the extent that it was not inconsistent
with the provisions of the Act.' A third way was to monitor the applica-
tion of the Sale of Goods Act and modify the interpretation of its pro-
visions so as to keep the law of sale on track with a developing general
law of contracts' The overall effect was that the law of sale was anchored
in the general law so that it was not a matter of great moment to know
whether a particular issue in a sale of goods contract fell to be disposed of
under the Act or by reference to the general law. For that reason, too, the
inclusion to only a limited extent in the Act of doctrines such as mistake
and frustration did not cause undue tension in the law. In sum, this inter-
play between sale of goods law and the general law of contract has
deprived of significance the definition of the outer limits of the law of sale
and any need to distinguish a matter that falls beyond these outer limits
and one that falls within these limits but is not explicitly dealt with in the
Sale of Goods Act.
As uniform law, the Vienna Convention is not integrated into any corn- 16.43
plementary body of law. This means that the outer limits of its application
" Consolidated with various amendments as the Sale of Goods Act 1979, itself the subject of
later amending legislation.
Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454.
" This appears as s 62(1) of Sale of Goods Act 1979: 'The rules of the common law,
including the law merchant, except in so far as they are inconsistent with the provisions of
this Act, and in particular the rules relating to the law of principal and agent and the effect of
fraud, misrepresentation, duress or coercion, mistake, or other invalidating cause, apply to
contracts for the sale of goods'.
87 e.g. Cehave NV v Bremer Handelsgesellschaft mbH [1976] QB 44 (the introduction of
intermediate stipulation analysis to express terms in a contract of sale); Harlingdon and
Leinster Enterprises Ltd v Christopher Hull (Fine Art) Ltd [1991] 1 QB 654 (the introduction of
reliance into the description condition in s 13 of the Sale of Goods Act).
have to be defined. It also means that provision has to be made for filling
gaps in the coverage of sale by the Convention. Of prime importance is
Article 7 of the Convention. Paragraph (1) states:
In the interpretation of this Convention, regard is to be had to its interpretation and
to the need to promote uniformity in its application and the observance of good
faith in international trade.
The aim of this provision is to maintain the Vienna Convention as inter-

national uniform law and to prevent its absorption by the various
domestic laws of the Contracting States. Apart from resolving a dis-
agreement concerning the role of good faith in defining the rights and
duties of the contracting parties, the reference to good faith creates a
uniform standard for carrying on the Convention through the case law of
courts and arbitral tribunals worldwide. This, together with the explicit
reference to uniformity, is designed to prevent the Convention from being
overborne by domestic bias and therefore to deprive of as much signifi-
cance as possible the growth of a choice of law process in the application of
the Convention. Further mention is made of Article 7(1) below.'
16.44 According to Article 7(2):

Questions concerning matters governed by this Convention which are not
expressly settled in it are to be settled in conformity with the general principles on
which it is based or, in the absence of such principles, in conformity with the law
applicable by virtue of the rules of private international law.
As with Article 1(1)(b), the rules of private international law are those of the
forum state. The role allocated to private international law is thus a
secondary one, designed to be filled only in default of discovering
general principles within or about the body of the Vienna Convention
itself. The reason for subordination is obvious. Just as the defined
approach to interpretation in Article 7(1) is to frustrate the development of
an active choice of law process in determining which Contracting State's
Convention is to be applied, so too private international law is forced into
the background in Article 7(2) in aid of the same purpose.
Private International Law and Interpretation
16.45 Article 17 of ULIS, the equivalent of Article 7(2), made no reference at all
to private international law rules and quickly attracted criticism on the
ground that it was difficult or even impossible to discern general princi-
ples in a uniform law when that law had no domestic legal background.'
's See below, paras 16.52, 16.56-57, 16.61.

" First Session of the Working Group, para 57 (Honnold, n 27 above, at 20).
In the meetings of the Working Group, there was extensive discussion on the
controversial topic of whether there should be a reference to private
international law, alongside the question whether there should be a for-
mal separation of interpretation and the filling of gaps in the Conven-
tion.' Neither approach, however, had been adopted by the time of the
1977 draft.' When the 1977 draft was considered in 1978 by the full
Commission, a proposal was introduced that matters arising between the
contracting parties and not covered by the Convention ought to be deter-
mined by the law of the state of the seller's place of business. This was
rejected on the ground that a private international law rule had no part to
play in the Convention.' The 1978 draft (Article 6) contained no reference to
private international law; indeed, it did not deal with gaps in the Con-
vention at all. At the fifth meeting of the First Committee's deliberations at
the 1980 Diplomatic Conference, the Bulgarian delegation introduced a
proposal to deal with gaps with the aid of the law of the seller's place of
business, on the ground that it was a 'costly illusion to imagine that all
gaps in a legal instrument could be filled solely by means of the interpret-
ation of its own provisions'." A Czechoslovakian proposal substituted for the
seller's law the rules of private international law.' Meanwhile, the Italian
delegation preferred to fill gaps by means of the general principles contained
in the Convention.' The solution adopted was to combine the
Czechoslovakian and Italian proposals, which was accepted by a major-
ity. A provision identical to the present Article 7(2) was subsequently
presented to the Plenary Conference by the First Committee' and
adopted unanimously.' The reference to private international law in Art-
icle 7(2) was therefore the price to be paid for invoking general principles
underpinning the Vienna Convention in order to fill gaps.
Defining the Scope of the Convention
The reference to general principles in Article 7(2) brings out a point made 16.46
earlier which concerns the relationship between the UK Sale of Goods Act
90 Ultimately settled in favour of separation, in the form of the current Art 7(1), (2).
91 See the Sixth Session of the Working Group, para 54 (Honnold, n 27 above, at 245).
92 See the Report of the Committee of the Whole, paras 141-43 (Honnold, n 27 above, at
327-328).
93 ibid, para 7 (Honnold, n 27 above, at 476).
94 ibid, para 11 (J Honnold, n 27 above, at 476).
" ibid, para 16 (Honnold, n 27 above, at 476). For the text of these three proposals, see
Honnold, ibid, at 659. Though not present in the 1978 draft, this proposal can be traced back to
Rabel's 1935 draft (Art 11) which in turn was inspired by the famous Art 38 of the Statute of the
International Court of Justice at the Hague ('the general principles of law recognized by
civilised nations'), though Art 38 opens the door much wider to comparative legal analy -
sis than does the text of Art 7(2).
" Art 6(2) (Honnold, n 27 above, at 714). 97 Honnold, n 27 above, at 737.
1979 and the general law. Simply put, there is no developed body of
positive, international uniform contract law to turn to, whether to fill gaps in
the Vienna Convention or to run on from it at the margins of its applica-
tion. Defining the scope of the Convention is therefore much more
important than defining the scope of the Sale of Goods Act in English sales
law. In particular, it cannot necessarily be inferred from coverage of topics in
the Convention where the outer limits of the Convention lie; the existence
of gaps within the Convention in central areas of the sales law deprives of
any great significance the silence of the Convention on a matter that might
be seen as lying either at the outer limits of sale or beyond and within
general contract law. In addition, the explicit exclusion in Article 4 of certain
matters from the Convention, notably 'validity', invites an expansive
interpretation of the scope of the Convention, on the ground that matters for
which a strong case can be made for exclusion could have been dealt with
explicitly in the same way as validity. Furthermore, taking English law
as a comparator and looking at the coverage of contractual material in a
sale of goods book and a general contract book, it might fairly be said that
most of what is covered in a general contract text is repeated, often in lesser
detail, in a sale of goods text, which then places the material in the sale of
goods context. This is an argument for taking a very broad view of what
constitutes a sales matter for the purpose of the Vienna Convention," which
is likely to exercise some considerable appeal for international arbitrators
in particular. It would clearly diminish the scope of private international
law for dealing with general contractual matters arising in the context of sale.
The Unidroit Principles of International Commercial Contracts

16.47 The extent to which material located in the general law of contract can be
seen as replicated in the special law of sale is evident on a comparison
between the Vienna Convention and the Unidroit Principles of Inter-
national Commercial Contracts 1994,981 once the exclusion of validity
from the Vienna Convention is taken into account. The Unidroit Principles
can be seen in a number of cases as adding detail to the coverage of
matters in the Vienna Convention.' They are also a complementary
instrument given the similarity of philosophy that unites them with the
Vienna Convention. This is hardly surprising in view of the influence that
98 This is discussed further below, paras 16.83-95.

98-1 The 2004 edition of the Principles contains only minor amendments to the 1994
Principles.
" See, e.g. the provisions dealing with interest (Art 7.4.10), interpretation (Arts 4.6-7),
payment (Arts 6.1.7-10), fundamental breach (or non-performance) (Art 7.3.1) and cure (Art
7.1.4).
the Vienna Convention has exercised in the uniform law movement' and the
overlap of personalities engaged in the development of the two
instruments. Yet, it should not be forgotten that the Unidroit Principles are not
the work of UNCITRAL but rather the work of the International Insti-
tute for the Unification of Private Law, a quite separate body and not a
United Nations agency. In consequence, they cannot represent a formal
source of law for the purpose of supplementing the Vienna Convention.
Furthermore, the Principles were not published in the aftermath of a dip-
lomatic conference and have no pretensions to being the type of law laid
down in the Vienna Convention. The role of the Principles is laid down in
their Preamble. This states that they shall apply when the parties agree
that their contract will be governed by them, or by the lex mercatoria or
similar expression. The Preamble goes on to proffer the Principles as a
source of inspiration for dealing with problems in those cases where it is
impossible to discover the relevant rule of the applicable law, as a model law
for legislators and as a means of interpreting or supplementing
international uniform law instruments.
This last function contains a veiled reference to the Vienna Convention. 16.48
Nevertheless, just because it is legitimate under the Principles to supple-
ment the Vienna Convention does not mean that it is legitimate under the
Vienna Convention for it to be supplemented in this way. If the principles
are to be invoked, a route to them has to be found in the text of the Vienna
Convention. One way might be for the parties themselves to call the Unid-
roit Principles into play, either expressly or under the cover of a general
formula, such as 'general principles of law' or 'the lex mercatoria'. The
selection of the Unidroit Principles by the contracting parties will be dealt
with below. The following discussion centres on the invocation of the
Principles through the text of the Vienna Convention without reference to
party choice.
In dealing with matters governed by the Convention but not expressly 16.49
settled in it, Article 7(2) directs a reference to 'the general principles on
which [the Convention] is based'. It is uncontroversial that this permits
an inductive exercise which, taking the provisions of the Convention in
gross, generalizes from them by drawing out broad principles. A more
difficult question is whether, more accurately to what extent, an outside
enquiry is permitted to seek the sources of the Vienna Convention
with a view to determining whether these sources may provide further
inspiration not so far expressed in the written text of the Convention.
1O For its influence in recent drafts of a revised Art 2 of the Uniform Commercial Code, see
A Rosett, 1INIDROIT Principles and Harmonization of International Commercial Law: Focus
on Chapter 7' (1997) 2 Uniform L Rev (NS) 441.
16.50 If a causal relationship of influence could be demonstrated between the
Unidroit Principles and the Vienna Convention, it would be uncontro-
versial to look at the Principles when settling the content of the Vienna
Convention. But the unyielding difficulty remains that the Vienna Conven-
tion dates from 1980 and the Unidroit Principles from 1994. The special
Working Group that settled down in earnest to produce the Principles
was not constituted until 1980. While this abridges the temporal gap, it
does not eliminate it. This temporal objection to calling in the Principles
under Article 7(2) of the Vienna Convention has been dismissed as a
'rather formalistic argument',' but respect for the wording of Article 7(2)
requires it to be taken seriously. Now, if the Unidroit Principles merely
expressed existing international practice as gleaned from a comparative
survey spanning many legal systems, it would be appropriate to back-
date them to see whether, in their 'uncodified' form, they might have
influenced the Vienna Convention. In conducting such an enquiry, the
similarity of philosophy and language as between the two instruments
would surely be significant.
16.51 Nevertheless, like other bodies of a similar character,' whether or not

explicitly engaged upon a restatement exercise (which the Unidroit
Working Group was not), the temptation to opt for the better rule, rather
than merely to record an existing rule of positive law, is overpowering.
Indeed, the Introduction to the Unidroit Principles that accompanied their
publication in 1994 stated that: 'Since the Principles are intended to pro-
vide a system of rules especially tailored to the needs of international
commercial transactions, they also embody what are perceived to be the
best solutions, even if still not generally adopted'.' This point is not
however fatal to the utility of the Principles when dealing with the Vienna
Convention. The same appeal that a rule might have had for the Unidroit
Working Group may well have been experienced by national delegates
responsible for the text of the Vienna Convention. The reality, however, is
that the Unidroit Principles form a useful expedient for courts, and more
particularly for arbitrators. In the case of the latter, it is tempting to see
their unreasoned calling in of the Unidroit Principles' as the easy
expedient of tribunals who know that their awards will not be challenged
for error of law, which is not a ground for non-recognition of awards
under the New York Convention 1958.105 One ought not perhaps be too
101 MJ Bonell, 'The UNIDROIT Principles as a Means of Interpreting and Supplementing

International Law' (2002) 13 ICC Intl Court of Arbitration Bulletin (Special Supplement) 29,
33.
101 e.g. the American Law Institute and the Lando Commission on European Contract Law.
103 104 See the examples given below.
p viii (Rome: Unidroit, 1994).
The limited grounds for refusing to recognize and enforce a foreign arbitral award are set
out in Art V.
case: ar
critical if this is the bitrators do not have the resources to engage
upon a full comparative survey regardless of cost to the disputants. As the
Principles are more and more called upon by tribunals, then any contro-
versy about their legitimacy will fade away. The passage of time will
confuse cause and effect. One commentator has remarked: 'in my view the
UNIDROIT Principles may be regarded as drawing upon, explaining and
being explained by the CISG . .1.16 This tendency will increase to the extent
that the Vienna Convention is treated as a living and evolving instrument.
In that event, questions of temporal precedence between the Vienna
Convention and the Unidroit Principles will clearly diminish. The
influence of the Principles is likely to increase over time if only because,
unlike the Convention, there is no need to convene a diplomatic conference
in order to revise them.
In addition, the Principles might well be invoked under Article 7(1) by a 16.52
tribunal engaged in the task of providing an international interpretation
of the Vienna Convention. It would be systemically difficult to usher in
the Principles under Article 7(1) whilst expelling them under Article 7(2),
given that the dividing line between interpretation and the filling of
gaps is not clear-cut. Not all laws draw the same clear line as English law
does between interpretation and implied terms. The distinction between
the two emerged only with painful and protracted difficulty in the pro-
ceedings leading to the Vienna Convention. Even in English law, looser
modern standards in the interpretation of contracts erase the clarity of
that line.'7
Unidroit Principles and usage

Another way of introducing the Unidroit Principles into international 16.53
sales as governed by the Vienna Convention might be to treat them as
international trade usages. According to Article 9(2):
The parties are considered, unless otherwise agreed, to have impliedly made
applicable to their contract or its formation a usage of which the parties knew or
ought to have known and which in international trade is widely known to, and
regularly observed by, parties to contracts of the type involved in the pa rticular
trade concerned.
A number of points may be noted here. First, the Principles would be 16.54
dealt with severally under this provision and not as a package. For each
Article of the Principles, a case would have to be made that it represents
Rosen, n 100 above.

See, e.g. Investors Compensation Scheme Ltd v West Bromwich Building Society Ltd [1998] 1 WLR
896 and C Itch & Co Ltd v Cia de Navegacao Lloyd Brasilieiro (17 July 1998), aff'd [1999]
1 Lloyd's Rep 115, CA.
binding usage.' Usage, of course, as incorporated pursuant to Article 9 (2)

would be evolving usage. The dating of the Unidroit Principles 14 years
after the Vienna Convention would therefore be no objection to their
incorporation in an international sale contract. Over time, particular
provisions might acquire increasing (or diminishing) binding force in
particular contracts. Nevertheless, even though 'usage' is not defined in the
Vienna Convention, and so is not subject to the confinement of a
definition, it is a very loose treatment of the word that equates it to the
rules of law laid down in the Unidroit Principles or similar instruments. An
arbitrator's familiarity with individual rules in the Principles is not at all the
same thing as contracting parties' familiarity with trade practices.
NevertheleSs, there may well be certain Articles in the Principles that
might be regarded as eligible for treatment as usages. This is particularly
likely in the various provisions dealing with payment, notably the place,
method and currency of payment.' The same however could not be said,
for example, in the case of Article 7.3.1, no matter how useful the
additional guidance it might provide on the meaning of a fundamental
breach of contract."'
Tribunal references to Unidroit Principles

16.55 From time to time, arbitral tribunals have referred to the Unidroit Prin-
ciples when dealing with internationalsalesul but the cases in which this
has been justified under Article 7(2) of the Vienna Convention are few in
number. They have been used to supplement the content of Article 78,
which directs the award of interest in appropriate cases without specify-
ing the rate or method of calculation, whether it is simple or compound
or even when it begins to run.' The tribunals were in no doubt that the
applicable interest rate was a gap in the Vienna Convention, and not
something falling outside it. In eliciting a general principle of full com-
pensation from the Convention, a comparative reference was made to
the Unidroit Principles' without reasons being given for their citation.
The same lack of explanation emerges from other awards where recourse
1' In ICC Award No 8873, the tribunal concluded that the Unidroit rules on hardship did not
correspond to prevailing practice in international trade.
See Arts 6.1.6-10.
10 A Russian arbitral tribunal, however, applied Art 7.4.13(2) of the Unidroit Principles, in
order to reduce a penalty clause, on the ground that it was binding usage under Art 9(2) of the
Vienna Convention: award 229/1996 of 5 June 1997 (cited in Bonell, n 101 above, at 36).
111 See the discussion in Bonell ibid, at 29.
'2 International Court of Arbitration of the Federal Chamber of Commerce of Vienna:
Award Nos SCH 4318 and SCH 4366 of 15 June 1994 (cited in UNILEX as UNILEX/CISG
E.1994-13 and E.1994-14).
113 Art 74.9 (average bank short-term lending rate to prime borrowers for the currency of
payment at the place of payment).

was made to the Unidroit Principles to settle the interest rate.114 One
tribunal did however go so far as to say of the Unidroit Principles that
'they are said to reflect a world-wide consensus in most of the basic
1
matters of contract law1. 15
General Principles on which the Convention is Based
In order to determine the potential of private international law under 16.56

Article 7(2), it is first necessary to consider the potential of general
principles on which the Vienna Convention is 'based', which is a rather
ambiguous word."' These principles may be either immanent and
unstated, to be drawn out of the express provisions of the Vienna Conven-
tion itself, or else they may be external to the Convention and influential
in its drafting. They may not simply be discovered outside the Con-
vention itself pursuant to a comparative legal analysis: they have to be
principles upon which the Convention is 'based' and not merely float in
some kind of international ether alongside the Convention. In a real sense,
general principles in the Vienna Convention constitute the spirit of the
law emerging from the text of the Convention as a whole. To the extent
that they may properly be called in under Article 7(2), the Unidroit
Principles or the source of them will be the basis of the Vienna Convention
in the latter sense. Whether it is a case of invoking the Unidroit Principles,
or divining the presence of uncodified principles in the text of the Con-
vention, the exercise is an important one which is determinative of the
role that private international law is going to play. If the Convention is
to be an effective uniform law, then its application must be as wide as
possible. This means that the line between general contract and sale
should be drawn as much in favour of sale as is practicable and the
application of private international law must be kept to a minimum. This
last function depends, therefore, on an imaginative use of Article 7(2), in
harmony with the internationalist spirit of interpretation laid down
in Article 7(1).
1" ICC Award Nos 8128 (1995) and 8769 (1996) (see (1999) 10:2 Intl Court of Arbitration
Bulletin 75). In the former case, the tribunal simply states that the Unidroit Principles (as
well as the Lando Principles of European Contract Law) are general principles for the
purpose of Art 7(2). See also ICC Award No 8817 (1997) (see (1999) 10:2 Intl Court of
Arbitration Bulletin 75). The Unidroit Principles have even been used to fill gaps in ULIS and
ULF: see ICC Award No 8547 (see (2001) 12:2 Intl Court of Arbitration Bulletin 57, 58-59).
11' ICC Award No 9117 (1999) 10:2 Intl Court of Arbitration Bulletin 96, 100). The same
tribunal also applied rules of private international law to invoke the law of the RSFSR (the
Russian Federation) to fill gaps in the Vienna Convention.
116 The French version refers to general principles from which the Convention draws its
inspiration ('dont elle s'inspire'), which is a looser formula than its English equivalent.
16.57 Extracting uncodified principles from within the body of the Vienna Con-
vention117 is a highly subjective exercise and the following should there-
fore be seen only as possible examples. The Convention is underpinned
by the notion of freedom of contract (or party autonomy), as evidenced by
the lack of controls on unfair contract terms and the freedom given in
Article 6 to exclude the Convention or any of its provisions. The reference
to good faith in Article 7(1) is confined to the interpretation of the Conven-
tion and does not extend to the rights and duties of the parties under the
contract.118 Given the extensive range of Article 6 and the way it can
literally be applied on its own terms, there is no need to use it as a general
principle in the way that the next example is used. This principle concerns
the avoidance of loss or economic waste, evidenced by the provisions on
cure,' the duty to preserve undelivered or rejected goods' and the rule
of mitigation of damages.' The Convention does not state that a buyer
preserving rejected goods is bound to return them to the seller, but cir-
cumstances may well arise where this is the most efficient way to avoid
deterioration or to assist the seller to avoid market loss from rapidly
depreciating goods. An extension of the rules on the basis of the general
principle might then be justified in some instances.
16.58 It might be also permissible to invoke the principle of waste avoidance in

a bolder way to permit set-off between seller and buyer, at least where
both claims arise under the contract of sale.' Set-off is not the subject of
explicit treatment in the Vienna Convention. The standard example con-
cerns the seller bringing an action for the price and the buyer who claims
damages. In some cases, the buyer's claim will go beyond the limits of
his price revision remedy.' There might be a claim for consequential
damages caused by the seller's delay in delivering the goods or by
damage to the buyer's property caused by defective goods. The price
'I' See G Eorsi, 'General Provisions' in NM Galston and H Smit, International Sales: The
United Nations Convention on Contracts for the International Sale of Goods (Parker School of
Comparative Law, 1984); U Magnus, 'General Principles of UN-Sales Law' (1997) 3 Intl Trade and
Business L Annual 33.
its
The clarity of this division is however a matter of controversy, given the statement of the
contractual rights and duties of buyer and seller in the body of the Convention. If the court is
required under Art 7(2) to interpret provisions of the Convention conferring rights and
imposing duties on the contracting parties, this is not so different from imposing good faith
directly on the parties themselves. Indeed, some delegates took comfort from the greater
status conferred upon the good faith principle when it was translated from the parties to the
interpretation of the Convention.
119 Arts 37, 48. 12 Arts 85 et seq. 121 Art 77.
122 For support, see Magnus n 117 above, at 47.
123 In Art 50. The buyer may have suffered consequential losses or may, even if the dam -
age is direct in that the value of the goods is affected, prefer to sue for damages, which are
more favourable to him on a rising market.
revision remedy in Article 50, as limited as it is, might be seen as the germ of a
principle of self-help and expeditious procedures.' Added expense would
be generated if the buyer had to bring separate proceedings for damages.
Set-off has been dealt with under private international law rules in a number
of German cases, but at least in some of them the cross-claim has arisen
under a contract that itself is not one of sale and in some the court has
dealt with an express clause precluding set-off.' In further support of
set-off is Article 81 which, on the avoidance of a contract, requires seller
and buyer to effect restitution concurrently.
Another example of an immanent general principle may be reliance pro- 16.59

tection. Reliance is to be seen explicitly in the Convention in a number of
provisions. Article 16(2)(b) states that an offer may not be revoked after
the offeree has relied upon it. There is also Article 29(2), under which the
conduct of a party in relation to an informal modification of contract may
prevent him from asserting a contractual clause that the modification
ought to have been in writing. In addition, Article 35(2)(b) enacts the
principle of the buyer's reliance on the seller's skill and judgment. Lastly,
Article 80 prevents a party, whose act or omission was responsible for the
other's failure to perform, from relying upon that failure. Taken together,
these examples may be said to ground support for a general principle of
s
estoppel (venire contra factum proprium).126 Thi type of approach
inferring general principles from isolated examplesrequires an intel-
lectual approach rather different to that of a common lawyer, who might
consider that the limited appearance of reliance in the Convention shows
only that it was designed to have a limited role to play. The scope for
estoppel under the Convention is not as great as it is in the common law of
1' Another instance of self-help is to be found in Art 65 which permits the seller to specify the
form, measure or other features of the goods in those cases where the buyer fails to do so after a
reasonable request from the seller.
115 e.g. a framework distribution contract. On set-off, see the following: Oberlandesgericht
Hamm 9 June 1995 (translated at www.cig.law.pace.edu/cisg/wais/db/cases2/

950609gl.html; CLOUT Case 125); Hamburg Arbitral Tribunal 21 March 1996 (translated
at w-ww.cig.law.pace.edu/cisg/wais/db/cases2/960321g1.html; CLOUT Case 166);
Oberlandesgericht Munchen 11 March 1998 (translated at www.cig.law.pace.edu/cisg/
wais/db/cases2/980311g1.htm1; CLOUT Case 232); Kantonsgericht Freiburg 23 January
1998 (CLOUT Case 259); Oberlandesgericht Koblenz 17 September 1993 (translated
at ww-w.ciglaw.pace.edu/cisg/wais/db/cases2/930917g1.html; CLOUT Case 281);
Oberlandesgericht Munchen 28 January 1998 (translated at www.cig.law.pace.edu/cisg/
wais/db/cases2/980128g1.htm1; CLOUT Case 288); Oberlandesgericht Stuttgart 21 August
1995 (translated at www.ciglaw.pace .edu /cisg/ wais/db / cases2 / 950821g1 html; CLOUT
Case 289); Oberlandesgericht Celle 2 September 1998 (translated at www.cig.law.pace.edu/
cisg/wais/db/cases2/980902glItml; CLOUT Case 318).
1' More extensively, venire contra faction proprium non valet or venire contra factum proprium
nemini licet (going against one's own act), which means that a person may not invoke a right in a
way that is contrary to a position previously assumed by that person.
contract: there is no requirement of consideration to create a binding con-

tract of sale and therefore no need to circumvent an obstacle to informal
variations and changes in the modalities of performance. Nevertheless, a
seller who stands by while a buyer makes an overt mistake, concerning the
attributes of goods for which the seller has not accepted responsibility, may
well find himself liable under Article 35, which deals with quality and
fitness.'
16.60 The above technique may also be applied to problems where the Con-
vention makes some provision but it is incomplete. The principle of full
compensation for loss (subject to remoteness of damage) can be drawn out
of the Convention by way of Article 74 on the recoverability of damages.
In the same way, the principle of restitution of benefits arising under a
contract that is avoided is to be found in the provisions requiring the seller
and buyer to restore to each other the fruits of performance when the
goods and the price are returned on the avoidance of the con-
tract.' In the circumstances, a party who is bound to pay the other a sum of
money and who incurs an obligation under the Convention to pay interest
could be required, according to the circumstances, to pay a sum
representing the rate that it would have cost the obligee to borrow the
money (compensation) or the rate representing the use value of the
money in the obligor's hand (restitution) from the time the sum becomes
payable. In such a case, there is no need to turn to a national law chosen
under the forum's rules of private international law to decide when inter-
est begins to run and the principles determining selection of the interest
rate.129
Exclusion Clauses and Penalty Clauses
16.61 Having sought to draw general principles from the Vienna Convention,
let us now turn to problem areas to determine the extent to which they are
or are not subject to the Vienna Convention. The first example concerns
exclusion clauses and the second penalty clauses (which also brings in
acceleration clauses). The second example, which alone of the two also
brings in the Unidroit Principles,' bears some relation to the
In such a case, the tribunal would have to be satisfied also that the estoppel prevents the
matter from being treated as a pure question of validity, taken out of the Convention by Art 4(a).
1' Arts 81(2), 82(2)(a), 84.
129 It is nevertheless common for tribunals to refer to private international law in matters of
interest: see, e.g. ICC International Court of Arbitration Award Nos 7565 of 1994 and 7585 of
1992.
'0 The Unidroit Principles deal only with penalty clauses.
first.' Legal systems in varying degrees apply legislative controls to
exclusion clauses in commercial cases.' There is similar variety in their
approach to the more complex case of penalty clauses. Penalty clauses may
be permissible within limits' or even without them. They may be
unlawful,' in which case they might be seen as unenforceable or as void. In
view of the express exclusion of validity from the Vienna Convention, the
first question is whether this exclusion embraces the subjects of
exclusion and penalty clauses. If it does not, the second question is
whether express provision is made for them in the Convention. If the
answer to this is no, the third question is whether the Convention treats
them as part of the law of sale and subjects them to implicit coverage in the
Convention. If they are covered, the fourth question is to determine, with
the aid of internal and external guides to the filling of gaps, how exclusion
and penalty clauses are disposed of under the Convention. The fifth question,
if an answer cannot be found by means of such guides, is to determine the
applicable law under the rules of private international law of the forum.
Taking first the example of exclusion clauses, we start with the observa- 16.62 tion
that the Vienna Convention does not define validity. This lack of
definition is itself a gap in the Convention if one accepts, as one must, that
the meaning of its own concepts is the property of the Vienna Convention.
The clearest alternative to this position would be to look to the putative
applicable law to determine the meaning of validity, which of course
would lead in different cases to national definitions of varying width.
This would be a blow to uniformity and, in particular, would transgress
the requirement in Article 7(1) that the Convention be interpreted in an
internationalist manner. The best way to ensure a uniform, and therefore
an internationalist, interpretation of validity would be to seek its unstated
131 The EU Directive on Unfair Terms in Consumer Contracts is certainly capable of
embracing penalty clauses as defined in English law. See Law Commission, Unfair Terms in
Contracts (Consultation Paper No 166, 2002), para 4.141.
132 The Unfair Contract Terms Act 1977 regulates exclusion and similar clauses in com-
mercial contracts. (See further above, paras 13.301-319.) The German Civil Code (BGB) (as
revised with effect from 1 January 2002 by the Act on the Reform of the Law of Obligations
(Schuldsrechtsreformgesetz)) in 55307-10 invalidates standard business terms if in contra-
vention of good faith they place a contracting party at an unreasonable disadvantage
(see www.iuscomp.org/gla/statutes).
As in modern French law, where a second paragraph was added to Code civil, Art 1152 in
1985 (loi no 85-1097 of 11 October 1985) so that the court might reduce or increase the
penalty where this was manifestly excessive or derisory. In French law, penalty is defined in
very broad terms to embrace all agreed payments to be made or things to be transferred in the
event of non-performance of the contract: Code civil, Art 1226.
1' As they are in English law. In German law, penalty clauses in standard business te rms are
invalid: BGB (as revised) 5309(6).
meaning under Article 7(2). In so doing, it is submitted that a tribunal
should not give validity an expansive meaning, for otherwise it would
defeat the underlying purpose of the Vienna Convention as an instrument of
uniform law.
16.63 What then does Article 7(2) tell us about validity? Given the exclusion of
matters of validity from the Vienna Convention, this is a question of some
difficulty since it results in the absence of contextual assistance within
the Convention. There are no examples of validity from which one might
infer a broader definition. One cannot infer, from the absence of familiar
contract material from the Convention, such as contractual capacity, that
this material must pertain to validity. There are gaps in the Convention,
both in respect of matters covered in insufficient detail, such as interest,
and matters not covered at all. There are also matters that appear to be
covered but perhaps are not. Taking first this last possibility, controls on
the validity of exclusion clauses might intuitively seem to be a matter of
validity, but for Article 6 which gives the parties full freedom to modify or
exclude the text of the Convention itself. On one view, this incorporates
the subject of exclusion clauses within the Convention and permits the
parties full freedom to exclude. But there is another view, which prompts
the question of what it means to exclude validity. Different national laws
more or less connected to the contract of sale will have different rules
concerning the control of exclusion clauses. In so far as the subject-matter
of these rules pertains to validity, the Vienna Convention in effect is doing
two things. First, it is stipulating that it chooses not to deal with exclusion
as a matter of validity; and second, it is adopting a neutral posture with
regard to the applicable law, leaving this to the choice of law rules of the
forum.
16.64 If this second view is correct, suppose that the United Kingdom has
adopted the Vienna Convention and consider the following example. A
contract of sale between an English seller and a Belgian buyer is con-
cluded, in the course of negotiations conducted in England, for delivery at
the seller's premises. The parties have not chosen an applicable law and
proceedings subsequently take place in a Belgian forum. The contract
contains a provision excluding the seller's liability for goods that are
not reasonably fit for the buyer's purpose. The Belgian court concludes
that the contract is governed by the terms of the Vienna Convention
but the buyer contends that the seller, notwithstanding Article 6, is not at
liberty to exclude liability for fitness under Article 35. According to
the buyer, this raises a matter of validity and the issue is governed by
English law pursuant to the characteristic performance rule in Article 4
of the Rome Convention. Turning to the Unfair Contract Terms Act 1977,
the buyer contends (correctly) that the case does not come within the
disapplication provisions in section 261' since these require, inter alia,
either cross-border contract formation or delivery by means of cross-
border carriage.' At this point, the buyer runs into some difficulty. The text
of the Unfair Contract Terms Act imposes a requirement of reason-
ableness on the exclusion of liability for fitness, but it refers to fitness
under s 14 of the Sale of Goods Act 1979. The seller contends that s 14 is
inapplicable; its fitness responsibilities lie in Article 35 of the Vienna Con-
vention, which of course is not dealt with at all under the Unfair Contract
Terms Act 1977.
The seller's argument would appear to be fatal for the buyer's case. Might 16,65 the
buyer argue, however, that s 14 of the Sale of Goods Act 1979 has a
shadow existence for the purpose only of the relevant provisions of the
Unfair Contract Terms Act? Or that this Act recharacterizes the seller's
obligations under Article 35 as obligations under s 14? The answer
must clearly be no. First, since the seller's obligation under s 14 does not
match its obligation under Article 35, there must be at least the possibility
that its s 14 exposure is more extensive than its Article 35 exposure. To
apply the Sale of Goods Act along with the Vienna Convention would
give rise to a type of depecage for which there is no warrant under the
Convention. In other words, the extent of the seller's responsibility
for fitness is a matter dealt with fully by the Vienna Convention and
the parties have not sought to modify it by reference to s 14. Second, as
for going directly to the Unfair Contract Terms Act itself, there is the
insurmountable obstacle that the Act says nothing about exclusion under
the Vienna Convention.
Suppose now that the Unfair Contract Terms Act were modified so that it 16.66
explicitly extended to the seller's fitness duty, whether arising under the
Sale of Goods Act or under the Vienna Convention. Should the Belgian
court in the above example apply the Act? The question whether controls
on exclusion clauses go to validity is squarely presented. Given the very
clear language of Article 6, which states that Mlle parties may . . . dero-
gate from or vary any of [the Convention's] provisions', one has to con-
clude that the Convention means what it says. The parties have derogated
from Article 35 and their decision may not be undermined through
the validity exception in Article 4(a). The buyer is then left to fall back on
a further argument, that the principle of good faith is employed in the
135 s 27 is not relevant because it applies only where there is an express choice of law
clause.
134' s 26 of the Unfair Contract Terms Act 1977 complements the test for an international sale
in ULIS (see Amiri Flight Authority v SAE Systems plc [20033 EWCA Civ 1447, [2003]
2 Lloyd's Rep 767) (broadlybut see note 40 above) and therefore does not fit the radically
different test in the Vienna Convention.
interpretation of the Convention, so as to temper the free language of
Article 6. The existence and extent of this argument is further support for the
view that exclusion clauses are dealt with in full within the body of the
Convention. In consequence, under the five question analysis set out above,
we stop at the second question, having concluded that exclusion clauses are
dealt with expressly under the Convention.
16.67 The text of Article 6 is important too in the matter of penalty clauses.
Suppose, in our above example, that the contract had provided for
payments in the event of delay by the seller, in a way that offended the
rule against penalties in English law. The seller pleads that the clause is
a penalty and the buyer states that the clause pursuant to Article 6
derogates from Article 74 to the extent that the latter lays down the rule
that damages are recoverable in so far as they represent loss caused by the
seller's breach. Article 74 states:
Damages for breach of contract by one party consist of a sum equal to the loss . . .
suffered by the other party as a consequence of breach. Such damages may not
exceed the loss which the party in breach foresaw or ought to have foreseen at the time
of the conclusion of the contract . . . as a possible consequence of the breach of contract.
This provision, on its terms, does not apply to acceleration clauses in that
these do not deal with damages at all but, in the case of sale, only with the
collapse into one present lump sum of the buyer's price instalments, a matter
of primary performance and not secondary, or damages, perform-
ance. As for true penalty clauses, the first question is whether in the words of
Article 4 they pertain to 'the rights and obligations of the seller and the buyer'
and so fall within the scope of the Vienna Convention.' This is not the
same thing as determining whether any extant rule dealing with penalties
or liquidated damages is part of the law of sale. Since legal systems will
not draw the line between general contract law and the special contract
law of sale in identical ways, it was obviously wise to avoid any ideal
definition of the law of sale which the Vienna Convention itself could neither
confirm nor deny. The formula adopted in Article 4 is wider than any such
ideal definition; indeed, it altogether eliminates any division between
general and special contract law. In consequence, it tends to diminish the
significance of asking whether the Unidroit Principles could be invoked
in support of the Vienna Convention. An entitlement to receive and a
liability to pay a penalty clearly pertain to 'the rights and obligations of the
seller and the buyer' in that it is in their capacities as seller and buyer that
the penalty is agreed.
137 The opening flush.

The next question is whether penalty clauses go to the matter of validity 16.68 so
that they are taken out of the Vienna Convention by Article 4(a). Once
again, there arises the intractable difficulty of defining validity under the
Convention without any real assistance from the remaining provisions
of the Convention itself. One argument against treating penalties as per-
taining to validity is that penalty clauses are by no means universally
condemned across all legal systems. Some measure of universality, it is
submitted, should be required of a provision to pass the test of validity
since any unduly liberal definition of validity will impair the uniform
purpose of the Vienna Convention. In addition, to overcome the difficulty
of defining validity within the Convention, recourse to the Unidroit Prin-
ciples is useful for the very reason that they do cover issues of contractual
validity. First, in Chapter 3 on Validity, there is no mention of penalty
clauses, which suggests that the subject of penalties is not taken out of the
Vienna Convention. Second, there is in the section on damages, contained
in the chapter on Non-Performance, a provision to the effect that an
agreed sum can be recovered in the event of non-performance but that it
may be reduced to a reasonable amount where it is 'grossly excessive in
13
relation to the harm resulting from the non-performance'. 8 This now
leads on to how the Vienna Convention should deal with penalty clauses
in a contract of sale, in the course of which a reference to the Unidroit
Principles, if legitimate, might be useful.
Turning to Article 7(2), the general principles on which the Vienna 16.69
Convention is based must first be examined for a solution before any
recourse to the private international law rules of the forum takes place.
Although Article 74, which deals generally with damages, expresses a
compensation principle and links damages to loss caused by contractual
non-performance, from which it might therefore be inferred that a penalty
sum should not be recoverable, there are indications pointing the other
way. First, the general support for self-help in the Convention' supports
the autonomy of the parties in pre-empting a judicial resolution of the
recoverable damages by setting their own figure. Second, as Article 6 in
particular affirms, the Convention supports the freedom of the parties to
depart from any rule of the Convention establishing their rights and
obligations. This would appear to tilt the balance in favour of penalty
clauses since Article 6 should not be confined to express derogations
from the provisions of the Convention.' One possible though somewhat
weak counter-argument, nevertheless, might be that the parties should
consciously depart from the Convention to exercise their Article 6
138
Art 7.4.13.
139 See discussion above, para 16.58. 140 Discussed below, para 16.110.
entitlement, such intention being absent in many penalty clause cases. In

sum, it does not seem that there is any scope in Article 7(2) for turning to the
private international law rules of the forum to assess the lawfulness or
enforceability of a penalty clause.
16.70 With respect to case law and arbitral awards,' the response, as might
fairly be predicted for any difficult issue in a legally varied world, is
mixed and unhelpful, partly because the separation in English law of
penalties, liquidated damages clauses and limitation clauses is not uni-
versally familiar. In a number of cases, resort has been had to the rules
of private international law pursuant to Article 7(2), which supposes
that the matter is in principle subject to the Vienna Convention but that
no solution can therein be found.' In other cases, the Convention is
said not to apply" or there is simply a reference to a national law.'
Penalties have also been upheld on the simple ground that they are not
inconsistent with the Convention' or are supported by 'the international
practice stated in the Unidroit Principles of International Commercial
Contracts'.146 Provisions of the Convention have also been invoked,
though not always in a convincing way.' A clause containing a 'com-
pensation fee' expressed as a percentage of the price has also been
considered with a view to determining whether it excludes a claim for
damages under the Convention.' What is entirely lacking is any
systematic and convincing attempt to work through the principles of
the Convention and stake out its role relative to the rules of private
international law of the forum.
P Koneru, 'The International Interpretation of the UN Convention on Contracts for the

International Sale of Goods: An Approach Based on General Principles' (1997) 6 Minnesota J of
World Trade 105.
ICC Court of Arbitration (No 7197 of 1992) (http://cisgw3.1aw.pace.edu/cases/
927197i1.html); Appellate Court Arnhem (Holland) of 22 May 1995 (http://cisgw3.1aw.pa-
ce.eduicases/931230nl.htrn1), where the court found that references to Convention provi-
sions (Arts 7 (good faith), 8(3) (interpretation) and 77 (mitigation)) provided no assistance.
Oberlandesgericht Munich of 8 February 1995 (http://cisgw3.law.pace.edu/cases/
920414g1.html).
Rechtbank van Koophandel Hasselt (Belgium) of 21 January 1997 (http://cisgw3.1aw-
.pace.edu/ cases/970121b1.html).
Tribunal of International Commercial Arbitration at the Russian Federation Chamber
of Commerce (No 3 of 1996) (http://cisgw3.law.pace.eduicases/970513r1.html).
148 Tribunal of International Commercial Arbitration at the Russian Federation Chamber
of Commerce (No 229 of 1996) (http://cisgw3.1aw.pace.eduicases/970605r1.html).
147 ICC Court of Arbitration (No 8247 of June 1996) (http://cisgw3.law.pace.edu/cases/
968247i1.html), where the penalty was recoverable as a claim for the price under Art 53.
148 ICC Court of Arbitration (No 7585 of 1992) (http://cisgw3.law.pace.edu/cases/

927585i1.htrnI) (no: cf ICC Court of Arbitration (No 251 of 1993) (http://cisgw3.1aw.pa-
ce.eduicases/941123i1.html)).
Validity and Misrepresentation
A more difficult validity question concerns common law rules of innocent 16.71
misrepresentation which have no equivalent in the Vienna Convention.
Briefly, the problem is this. If the area of misrepresentation is taken out
of the Vienna Convention by Article 4(a), so as to permit national mis-
representation rules to apply to sale contracts, then there is the threat of
such rules undermining the rule of fundamental breach in Article 25,
which serves the purpose of rendering difficult the avoidance of the con-
tract for breach. This is because misrepresentation and breach are capable
of overlapping and it is relatively easy to rescind a contract for mis-
representation,' which, though different from avoidance as a means of
escaping the contract, remains nevertheless a means of escape. The same
problem of accommodating misrepresentation and sale of goods rules
is present in common law systems,' though it is not so pressing because
the doctrine of promissory conditions and the use of such conditions to
define implied terms in sale of goods legislation's' makes it significantly
easier to terminate a contract for breach under such legislation than it is to
avoid a contract for non-performance under the Vienna Convention.
In so far as any misrepresentation induces entry into a contract of sale, 16.72
then the question is whether it pertains to 'the rights and obligations of
the seller and buyer arising from such a contract'.152 It is clear that any
rights and obligations engendered by an inducing misrepresentation
do not arise from the contract as such but from the circumstances pre-
ceding that contract. Any attempt, therefore, to spell out a position in the
Vienna Convention on misrepresentation by reference to the principles
on which the Convention is based' should fail in limine. Furthermore,
a seller's duty in Article 35(1) to deliver the goods in conformity with
their 'description' is not, even when broadly understood, capable of
embracing misrepresentation since the governing description is the one
'required by the contract' and misrepresentation exists dehors the con-
tract. The best means for controlling the destructive threat of innocent
misrepresentation, so as to preserve the integrity of Convention rules
on avoidance for breach and non-performance, would be for states
adopting the Convention to restrict by legislation any liberal rules of
rescission already in existence under their domestic laws. The case of the
149 Notwithstanding (in England) the discretion given to a court or arbitrator under s 2(2) of
the Misrepresentation Act 1967 to declare a contract subsisting.
15 See, e.g. Leaf v International Galleries [1950] 2 QB 86; Riddiford v Warren (1901) 20 NZLR 572;
Watt v Westhoven [1933] VLR 458,
15' Sale of Goods Act 1979, ss 11-15. 152 Art 4. '53 Art 7(2).
154 A word that should not be given the narrow artificial meaning that it has acquired
under the English law of sale.

misrepresentation that is incorporated in the contract as, to use the
language of the Convention, a requirement of it,'55 raises a different
matter which will be dealt with in the next section. The question here is
whether a claimant should have freedom to elect between a claim under the
Convention and a claim under the applicable law dealing with an inducing
misrepresentation.
Validity and Property

16.73 Article 4(b) excludes from the scope of the Vienna Convention 'the effect
which the contract may have on the property in the goods sold'. The
Convention does not define 'the property' but it would seem that the
expression signifies ownership. The law applicable to property matters's'
would come into play to determine whether and when the property
would pass. It should however be recognized that the Convention is not
silent on property matters. First of all, it recognizes that the seller does
have a duty as a matter of contract to transfer the property in the goods to
the buyer.''' It further recognizes that that property must not be impaired
by third party rights. Hence the seller is required in stated conditions to
deliver goods 'free from any right or claim of a third party based on
industrial property or any other intellectual property'. In thus speaking
to the quality of the property transferred, the Convention is again
dealing with property as a matter of contractual obligation. Furthermore,
it seems plain that the transfer of the property does not extend to posses-
sion of the goods, notwithstanding that possession may in some systems
of law amount to a proprietary interest in goods capable of protection.'ss
The Convention does indeed deal with possession in a way that com-
promises the existence of any clear distinction between property and
contract law.ls9
16.74 The first way in which it does this is to recognize that the seller may make
it a condition of handing over the goods, or of their surrender by the
carrier, that the buyer first pay for them.' This right, which operates in
a way that is equivalent to the unpaid seller's lien in English law,161 is not
expressed to be subject to any rights that the buyer might have acquired
as owner under the relevant applicable law. Furthermore, even a seller
who makes no provision for it is recognized as having a right of stoppage
155 Art 35(1). 156 Ch 18 below. 157 Art 30.

Ise As is the case in English law: On Demand Information plc v Michael Gerson [2002] UKHL
13, [2003] 1 AC 368.
159 See Ch 18 generally on whether the law of the situs should apply to the passing of
property as between buyer and seller. See also above, paras 13.221-222.
Art 58 161 Sale of Goods Act 1979, s 41.
in transit' where it becomes apparent that the buyer will not perform a
substantial part of its obligations under the contract.' Again, this is
stated without regard to the passing of property to the buyer, to the corre-
sponding stoppage provisions in national law' or to national insolvency
law. Indeed, the Convention does not refer to the right as one of stoppage at
all, but rather treats it as a matter of suspension of the contract.' There seems
no good reason to subject the plain language of the Convention to any
unstated qualification in the cause of preserving the integrity of property
as a category distinct from contract. To this extent, the adoption by states of
the Vienna Convention modifies their private international rules in matters
relating to possessory rights over movables.
4. THE BOUNDARIES OF SALE IN THE VIENNA CONVENTION
The previous section was devoted to identifying gaps in the Vienna Con- 16.75
vention and exploring ways of filling them, one such way being resort to
the private international law rules of the forum. In this section, the focus
is on two issues. The first concerns overlap between the Convention and
certain national law subjects such as tort law and consumer protection
law. In case of conflict between the Convention and national tort law, for
example, does the Convention simply apply on its own terms or may the
relevant body of national law be applied by the forum? In answering this
question, a further question arises: are the rules of national law dealing
with overlapping or cumulative liability in tort and contract invoked to
deal with conflict between the Convention and national law? The second
issue concerns the outer boundary of sale and raises two matters, namely,
the very definition of a sale contract and the scope of certain express
exclusions from the Convention. All of these issues and questions go to
the heart of any role played by the forum's private international law rules
alongside the Convention.
The Convention and National Law
More difficult issues concerning the scope of the Vienna Convention lie in 16.76
respect of the relationship between the law of sale and the law of tortious
It is broader than the common law right in that it is not confined to the insolvency of the
buyer. Cf Sale of Goods Act 1979, s 44.
163 Art 71(1), (2).
Which might be confined to insolvency or might define transit in a narrower way than the
Convention.
Note that national legislation on stoppage constitutes an interference with the carrier's
rights and duties, whereas Art 71(2) is clearly limited to rights in the goods as between buyer and
seller. "Whether the carrier would be bound by the stop notice would therefore be a matter
for the law governing the contract of carriage.
(or delictual) liability as well as, for common law systems, equity (mis-
representation)." This is not so much a case of examining exclusions of
sale material from the Vienna Convention but rather of determining the
boundary between the Convention and a body of domestic law that has the
potentiality of undermining the uniform implementation of the
Convention. To the extent that the Convention permits the buyer of goods to
recover damages, whether direct or consequential, arising from the supply
of defective goods, in circumstances where the applicable law of tort would
likewise order an award of damages, whether on the basis of fault-based or
strict liability, then there is on the face of it no evident collision between
that applicable law and the Convention. Moreover, domestic laws that take
a stricter line than English law does on the choice between causes of action in
contract and tort see contract as the dominant category, which points to the
supremacy of the Convention over national tort law, so that in the event there
is no retrenchment in the application of the Convention on its own terms.
Tort Law
16.77 One possible point of collision between the Vienna Convention and
national tort law comes with respect to Article 39 which requires the
buyer to give a notice specifying any nonconformity in the goods within a
reasonable period after discovering it or after the time when it should
have been discovered.' A buyer who fails to comply with Article 39 is
deprived of the right to rely upon the nonconformity of the goods, with
the exception of a limited damages claim or a reduction of the price in
those cases where there was a reasonable excuse for the failure to give the
required notice.' Suppose that the buyer fails to give the necessary notice
but is able to present a claim under the applicable tort law which is not
dependent upon the giving of any notice and which indemnifies the
buyer against types of loss that are generally recoverable under the terms
of the Vienna Convention. In view of Article 5, which excludes liability
for personal injury and death from the Convention, the types of loss in
question will be property damage and financial loss, the latter of which
may not readily be recoverable in some tort law systems.
16.78 The critical issue here is whether the Vienna Convention is being under-
mined by a tort claim that outflanks the notice requirement in Article 39.
166 An American view that in surveying a broad field seems to support the coexistence of tort
and misrepresentation with the Vienna Convention is Geneva Pharmaceuticals Technology Corp v
Barr Laboratories Inc, 201 F Supp 2d 236 (2002) (USDC, NY).
'67 This latter period is defined by reference to Art 38, which calls on the buyer to examine the
oods within as short a time as is practicable in the circumstances.
68 Art 14.
Since all legal systems, more or less, have to cope with the problem of
overlapping liability in contract and tort, this must have been firmly in the
minds of the architects of the Convention. Indeed, Article 5 may be seen as an
attempt, however limited, to minimize the potential of such a conflict
involving the Convention as part of the relevant contract law. It does this by
shrinking the scope of contract law. It is submitted that it would read too
much into the Convention to go further than this and ascribe to the
Convention an intention to reach into national law and dispose of the
internal problem of contract and tort overlap, so that a buyer who is able to
assert a claim in tort ought to be allowed to do so. Still less does the
Convention suppress contract law in favour of tort. The tort claimant,
indeed, may have to prove fault and so be deprived of the benefit of strict
contractual liability.
Article 5 has an important conflict of laws dimension in that it determines 16.79
in some cases whether there is a selection to be made between a choice of
law rule in tort and the terms of the Vienna Convention. It provides that
the 'Convention does not apply to the liability of the seller for death or
personal injury caused by the goods to any person'. This provision came
in at a late stage in the drafting process, its declared purpose being to
minimize conflict between the Convention and domestic tort laws. The
provision is unfortunately worded, which can be seen from the following
example. Suppose that A sells goods to B under a transaction governed by
the Convention and B in turn onsells the goods, or new manufactured or
processed goods embodying the original goods, to C under a transaction
governed by national law. C suffers personal injuries or death as a result
of a defect in the original goods and is able to recover either damages, in
tort or for breach of contract, under national law, or the benefit of a settle-
ment. B now seeks to recover from A the sums it has had to pay to A.
Now, if the language of Article 5 is read literally, then the Convention 16.80
cannot apply, so far as A's liability in respect of C's injury is concerned,
since C is 'any person'. Nevertheless, a literal interpretation of Article 5
hardly seems to satisfy any duty resting on the tribunal under Article 7(1)
to have 'regard . . . to . . . the international character' of the Convention;
the broad drafting style of the Convention encourages a purposive
approach to its interpretation, in contrast with common law drafting styles
and techniques of interpretation.' Moreover, a literal interpretation
would lead to an untidy depecage in respect of A's claim against B, in that
a claim for the recovery of or reduction of the price would fall under the
Convention, while a claim to be indemnified in respect of B's liability to
C would have to be dealt with under a national system of tort or contract
169 See Fothergill v Monarch Airlines Ltd [1981] AC 251.

law. The principle of depecage is widely recognized' but is awkward

enough in its practical application to be avoided wherever reasonably
possible since it complicates suits and inhibits settlements. In addition, to
place too much emphasis upon the words 'any person' reduces the sig-
nificance of the words 'liability of the seller for death or personal injury'. In
the above example, B is not seeking to hold A liable for death or per-
sonal injury. Rather, B is seeking recovery for its financial loss in having to
compensate C. That is a matter which the Convention is well able to
handle,171 there being no difference between the way it would handle this
type of consequential loss claim and the way it would handle a claim
following on from damage to C's property.
16.81 There is little case law on Article 5 but a German court, in a case where an
American seller had sold a cutting machine to a German buyer, which in
turn had sold it on to a Russian sub-buyer, in whose factory the machine
caused a death and a number of personal injuries, has ruled that B's claim
is governed by the Convention.' The court did so, however, without
referring to the text of Article 5.
Misrepresentation
16.82 It was stated above that circumstances might arise in which a statement
could function under national law as a misrepresentation inducing the
making of a contract of sale and at the same time as an express term, or
requirement of the contract, under Article 35 of the Vienna Convention.
Just as Article 39 could prove a problem in handling the overlap of tort
and contract, so it has some potentiality for causing a problem at the point
of overlap between contract and inducing misrepresentation. In one
respect, the prospect of collision is greater heremisrepresentation
does not suffer the limits of tort law in dealing with financial lossbut
in a more important respect the prospect is less. This is because the
abbreviated nature of the right to rescind under national law' reduces
the risk of a buyer falling foul of Article 39 whilst retaining an active right
to rescind. To the extent that the national law confers a right to damages
for misrepresentation, then there is a very real point of collision with the
Convention. A national court may be less willing to assert the supremacy
of the contract (and the Convention with it) over a statutory action for
damages for misrepresentation than over an action in tort. Nevertheless,
17 Rome Convention, Art 3(1). 171 See Art 74.
Oberlandesgericht Dusseldorf of 2 July 1993 (translated at http://cisgw3.

law.pace.edu/cisg/wais/db/cases2/930702gl.html).
Because of the lapse of time, for example.
for the same reason as stated above in the case of tort, it is submitted that
there is no good reason for courts to shrink the application of any
domestic law of misrepresentation. There is a strong case to be made for
states acceding to the Convention to anticipate problems of this nature and
prepare their domestic laws to receive the Convention so that there is a
minimum of friction between the two.
The Outer Boundary of Sale
Not all sale contracts come under the Vienna Convention. Furthermore, 16.83 not
all contracts that contain certain essential features of the contract of
sale, involving the transfer of the property in goods in return for payment,
are regarded as sale of goods contracts under the Convention. In addition,
there are issues concerning whether the relations between the parties
are governed by one master sale of goods contract or consist of a master
contract that itself is not one of sale coupled with individual contracts of
sale executed thereunder from time to time.
Sale Contracts Excluded from the Convention
Besides not defining sale,' the Convention excludes certain types of sale 16.84
from its scope. In the case of excluded sales, recourse will have to be had
to the private international law rules of the forum to select the applicable
law. For reasons stated earlier, the scope of the exclusions has to be deter-
mined under the Convention itself. The list is to be found in Article 2:
This Convention does not apply to sales:
(a) of goods bought for personal, family or household use, unless the seller, at
any time before or at the conclusion of the contract, neither knew nor ought
to have known that the goods were bought for any such use;
(b) by auction;
(c) on execution or otherwise by authority of law;
(d) of stocks, shares, investment securities, negotiable instruments or money;
(e) of ships, vessels, hovercraft or aircraft;
(f) of electricity.
Apart from cases where the use of the goods for personal, family or 16.85
household purposes has been obvious, the Vienna Convention was
applied in one case where at first glance the goods were sold for such a
use.' The contract was for the sale of a generator by a German seller to
the Danish owner of a yacht, who needed it to operate a cooling system so
17 Discussed below, paras 16.89-90.

4
Landgericht Dusseldorf of 11 October 1995 (translated at http://cisgw3.1aw.pace.edu/
cases /951011gthiud).
that he could sail his yacht in the Caribbean. No indication was given as to
why the Convention applied in such a case. It is possible that the buyer
might have had a mixed recreational/domestic use in mind. The Con-
vention is not clear on whether the personal, family or household use has to
be the exclusive, or even the primary, use that the buyer has in mind.
Furthermore, this exception to the application of the Convention arises
only if the seller either was aware or should have been aware that the
goods were being bought for such a use.' Both cases open up the possi-
bility of a contract of sale being governed both by the Convention and also by
a national system of consumer protection law that defines 'consumer' or
related concepts in such a way that the seller's knowledge is not
relevant.' In such a case, it would seem that the national consumer pro-
tection law should apply as an overlay on the Convention, even though
there is no saving clause in the Convention for mandatory rules of the
forum state or of any other state.' If national law can apply so as to
support a buyer's tort claim when its Convention claim would fail for want
of timely notice of defect, then there is no reason why national law should
not exclude a seller's claim under the Convention.
16.86 The exclusion of auction sales, likewise sales by authority of law, has not
given rise to difficult problems in the case law.' The same can be said
for the various exclusions of documentary intangibles in Article 2(d).18
These exclusions are so specific that they prompt the question whether
the Convention should otherwise be given an expansive interpretation
so as to cover intangible property; $1 or at least documentary intangible
property, not specifically listed. The exceptions also prompt the question
1' According to the Austrian Oberstergerichthof, in a decision of 11 February 1997, the

seller seeking the application of the Convention in a case concerning the sale of a sports car has
the burden of showing that he did not know that the goods were being acquired for
personal use and could not have been expected to know this (Recueil de jurisprudence
concernant les lextes de N CNUDCI, no 90).
See Bundesgerichtshof of 31 October 2001 (translated at http: / /cisgw3.law.pace.edu/
cases/011031gl.htrn1).
For the application of mandatory rules, pursuant to the Rome Convention, to a Vienna
Convention case, see discussion below, paras 16.111-112. See further the discussion of man-
datory rules above, paras 13.274-281.
1" For an attempt by owner and auctioneer to extend the Vienna Convention to their
agency agreement, see the discussion below.
18 For a decision that the Convention does not apply to the sale of shares in an Ivory Coast
company, see Bezirksgericht der Saane (Zivilgericht) of 20 February 1997 (translated at
http: / /cis gw3.1a w.p a ce.edu / cases / 981009 sl
It is noteworthy that, in one case, the refusal to apply the Convention to a contract for
the preparation of a market study was reached, not on the ground that the contract was not
one of sale, but because (for the- purpose of Art 3(2)) the preponderant part of the analyst's
obligations consisted of labour or other services (Oberlandesgericht Cologne of 26 August
1994, translated at http: / / cisg-w3.Iaw.pace.edu/ cases /940826gl.html).
whether the Vienna Convention applies to software contracts, since any disk
incorporating the software is just the physical means of embodying
intangible matter's' In a similar vein, a law firm's opinion letter will take a
paper form, but the sending of that letter can hardly be called a supply of
goods. In considering the position of software, the preliminary question,
which seems not to have been addressed in the reported cases, is whether a
licensing agreement can be said to be one of sale at all.' So dominant is
licensing as a means of conferring rights in respect of software that the
failure of the case law to mention it gives rise to an inference that licensing has
been tacitly regarded as sale for the purpose of the Convention. This tacit
conclusion is to say the least contentious. Licensing is chosen as the
preferred medium for dissemination precisely because the licensor wishes
to retain control of the material and not to surrender its rights in the same
way as a seller of goods. Since Article 30 of the Vienna Con-
vention requires the seller to transfer its property in the goods 'as' (not 'if')
required by the contract and the Convention, it seems to follow
ineluctably that a licensing of software, whether or not a disk is trans-
ferred,' is not a sale of goods under the Convention. This point, never-
theless, has not been taken in the case law that holds software supplies to be
sales of goods covered by the Convention.'
Moreover, on the question whether software is capable of being treated as 16.87

goods under the Convention, the courts, without drawing a distinction
between the direct downloading of software and its transfer in the
medium of a disk, have treated the sale of software as a sale of goods,'
subject to an exception for the case of non-standard software bespoke for
the buyer's needs where the element of labour on the part of the supplier
is so large that the contract is excluded from the Convention.' This
division in the cases tracks the distinction in Article 3 between sale of
goods contracts and labour and materials contracts' and supports the
expansive approach, referred to above, that embraces intangible property
in the definition of goods. Given the various national backgrounds to the
182
Obviously, software can be transferred without the use of any disk at all. 1'
See further above, para 10.45, and below, paras 21.113-118.
184 But see above, para 10.45. See the cases referred to below, para 16.87.
Oberlandesgericht Koblenz of 17 September 1993 (translated at http://cisgw3.law.-
pace.edu/cases/930917gi.html); Landgericht Munchen of 8 February 1995 (translated at
http://cisgw3.1aw.pace.edu/cases/950208g4.htm1); Handelsgericht Zurich of 17 February
2000 (translated at http: / / cisgw3.1aw.pace. edu / cases /00021751.h d).
187 Handelsgericht ZUrich of 17 February 2000. See also Oberlandesgericht Cologne of 26
August 1994 (translated at http:/ /cisgw3.1aw.pace.edu /cases /940826g1.htrn1).

1 The associated services that accompany the supply of hardware and software can tip
the balance so that the contract is not overall one of sale of goods at all: see Handelsgericht
Zurich of 17 February 2000 (translated at www.cisg.wais.cib.cases2 /0217s1.html).
Vienna Convention and its character as a unifying device, it seems on
balance correct to extend the concept of goods to intangible property that is
not expressly excluded from the Convention. The difficulty presented
by the licensing issue, however, is by no means so easily overcome.
16.88 Article 2 also excludes the sale of 'ships,' vessels, hovercraft, or aircraft'.
ULIS contained an exception for 'any ship, vessel or aircraft, which is or
will be subject to registration'.' The reference to registration has been
dropped, which among other things means there is doubt about the
application of the Vienna Convention to small and inland boats,' though the
word 'vessels' suggests an expansive interpretation of the exclusion. The
more expansive the interpretation, however, the less rational seems the
exception. Moreover, the existence of a title register of ships hardly
amounts to any justification for excluding ships from a Convention that
does not deal with the transfer of the property in the goods. It is clearly
established, however, that spare parts for ships and aircraft, even aircraft
engines, come within the Convention.'
The Definition of Sale under the Convention
16.89 Although the Vienna Convention does not define sale, there is guidance to
be obtained from Article 30, the general provision that lays down the basic
duties of the seller. This calls on the seller to 'transfer the property in the
goods as required by the contract and this convention'. The definition of 'the
property' can only have the same meaning as under Article 4(b), which
excludes from the Convention the effect of the contract on the property in
the goods sold. When Article 4(b) was examined, it was seen that 'the
property' did not mean all property interests; the Convention did deal with
possession in a number of instances. In English law, 'the property' means
the general property in (or ownership of) goods. As undesirable as it might
be to give expressions used in the Convention the same meaning as they
might have in one or more system of national law, in this case it does seem
that 'the property' means ownership or what passes for it in national law. In
consequence, it would seem that financial and equipment leases should not be
regarded as contracts of sale of goods under the Convention. This view
depends upon legal expressions being interpreted in a legal, as opposed to a
functional or economic, sense. Even
Russian Federation arbitration proceeding (No 236/1996) of 6 April 1998 (translated at

http: / /cisgw3.1aw.pace.edu /cases /980406r1.html).
Art 5(1)(b). 191 Schlechtriem, 35-37.
in Mitchell Aircraft Spares v European Aircraft Service (Federal District Court (Illinois) of 27
October 1998, http:/ / cisgw3.1aw.pace.edu / cases /981027u1.html); Budapest Metropolitan
Court of 10 January 1992 (translated at http: / /cisgw3.1aw.pace.edu/cases/92011Ohl.html).
UN Convention on the International Sale of Goods 1980 957
though a line denoting lengthy possession and enjoyment will over the
useful life of goods eventually converge with a line denoting the same
thing with the addition of ownership, this does not sanction an inter-
pretation of 'the property' in Article 30 that catches transactions where
ownership never passes."
A more difficult question concerns hire purchase contracts where the 16.90
transfer of the property in the goods turns upon the exercise of an option
by the hirer, the hirer never coming under a contractual duty in the course
of the hire to exercise that option. In English law terms, the exercise of
the option amounts to the acceptance by the buyer of a standing and
irrevocable offer made by the seller, conditional upon payment by the
buyer of the antecedent instalments of hire. Now, expressed in these
terms, the contract of hire purchase is capable of falling under Article 30
because the 'seller's' obligation to transfer the property 'as required by the
contract' is to do so in the event of the buyer duly exercising the option.
An alternative would be that there is a contract of hire (of a particular
type) succeeded by a contract of sale sprung by the exercise of the option,
with the latter contract only governed by the Convention. This is a less
elegant solution and creates a depecage that is best avoided. The outcome
of this analysis is that financial leases stand outside the Convention but
that hire purchase comes within, which is pragmatically awkward
but unavoidable so long as the Convention hinges on legal rather than
economic definition.' The exclusion of financial leases does have the
merit of avoiding any need to draw the line between those leases that are
economically the equivalent of sale and those that are not.'
Contracts Akin to Sale
A perennial issue in the sale of goods concerns the boundary separating 16.91
sale from similar types of contract involving work and materials. In
English law, the importance in current law is not great' since by a variety
of means, case law and statutory, the law governing sale and work and
193 In support, see Resolution No. 1/03 of the Presidium of the Supreme Arbitration Court
of the Russian Federation of 28 January 2003 (translated at http://cisgw3.law.pace.edu/
cases / 030128r1.html).
199
Note however that the existence in a financial lease of an option to purchase still keeps the
lease within the scope of the Unidroit Convention on International Financial Leasing (Ottawa,
1988): see Art 1(3).
195 An issue that has bedevilled the scope of modern statutes dealing with personal
property security, notably Art 9 of the Uniform Commercial Code and its Canadian
descendants.
" But seethe discussion of the Hague Sales Conventions in Ch 15.
materials has become more or less identical.' The Vienna Convention
seeks also to draw the line between the two types of contract, though the
importance of drawing the line is greater, since there is no uniform law,
or any assurance of a domestic law similar to the Vienna Convention,
available for work and materials contracts. In the case of such contract, the
forum's rules of private international law come into play in the usual way.
16.92 According to Article 3(1), with one exception, contracts for the sale of
goods to be produced or manufactured are to be considered as contracts
of sale under the Convention. This provision has been referred to in a
number of cases in an unhelpful and unanalytical way as tribunals simply
note their entry into the provisions of the Convention. The exception con-
cerns contracts where the buyer supplies 'a substantial part' of the
materials needed for such production or manufacture. The exception
appears regrettably largethe English language exception being wider
than its French counterpart which refers to 'une part essentielle'.198 The
latter formula would permit a qualitative, rather than a mere quantitative,
assessment to be made. There is little sign, however, of this provision
causing difficulties in practice.
1 6.93 Article 3(1) is not connected to Article 3(2), which provides that the Con-
vention does not apply to contracts where 'the preponderant part' of the
obligations of the supplier of goods consists of the provision of labour or
services. The first point to note is that this services exception is more
narrowly phrased than its Article 3(1) equivalent. Second, it is not clear
what is meant by 'preponderant'. A UK proposal to limit the Article 3(2)
exception to 'the major part of value' won no support at the diplomatic
conference.' Yet, the case law on balance favours a quantitative monet-
ary evaluation of goods against services, so that if the goods are worth
more than the services then the contract comes under the Convention.200
Some cases take an impressionistic view of the importance to the contract
of the goods versus the services,' which is also a default position if there
See Bridge, The Sale of Goods, 46-49.

1" All six language versions of the Convention possess equal validity. 199
OR, 84.
See, eg, Oberlandesgerich Munich of 3 December 1999 (translated at
w-ww.cisg.wais.db.cases2/991203g1.htrn1); Cour d'appel de Grenoble of 26 April 1995
(translated at www.cisg.wais.db.cases2/950426f2.html); Russian Federation Arbitration
Proceeding 356/1999 of 30 May 2000 (translated at www.cisg.wais.db.cases2/000530r1.
html).
Landgericht Munchen of 16 November 2000 (translated at www.cisg.wais.db.cases2/
001116g1.html); Handelsgericht Zurich of 9 July 2002 (translated at www.cisg.
wais.db.cases2/020709s.1.html) (the Convention does not apply to turnkey contracts
with all of their various obligations); Richteramt Lantern des Kantons Berne (translated
at www.cisg.wais.db.cases2 /930507s1.html).
is no invoice evidence of the monetary value of the two parts of the sell-
er's performance.' The language of the Convention, however, seems more
aptly to embrace the quantitative approach, however mechanical this may
seem. Going beyond the question of preponderance is the case of a pure
service which is rendered in a recorded form so that it is inapt to speak even
of goods being supplied under the contract.'
Finally, there is a division between paragraphs (1) and (2) that deserves 16.94
further consideration and prompts an exploration of any link between the
two. Paragraph (1) contemplates a case where work and materials are
blended to produce something new. Apart from the exception relating to
the buyer's intervention, it does not appear to matter whether, in terms of
quality or quantity, the services element dominates the goods (materials)
element. On this analysis, a contract to paint the portrait of the president
of the buyer company would be a contract of sale of goods, no matter how
much time and artistry it takes. Paragraph (2), on the other hand, contem-
plates a case where services are not blended with goods, as where
machinery is supplied and then installed in the buyer's factory and main-
tained over a period. Unless the preponderance test or something like
it is imported into paragraph (1), the question of inclusion in the Con-
vention will produce anomalous comparisons of cases decided under the
separate paragraphs, but there is no textual justification for repairing the
connection between them.
Framework Contracts
Another problem arising under the Convention relates to what may be 16.95
termed framework contracts. Individual contracts of sale are often con-
cluding between contracting parties on a recurrent and unconnected
basis. Sometimes, however, they take place within the frame of a master
contract which itself may lack terms that are typical of sale contracts, such
as those relating to delivery and payment. The buyer, for example, may be
an authorized distributor in a named territory. Are framework contracts,
like distributorship agreements, contracts of sale for the purpose of the
Vienna Convention? This will depend in part upon whether individual
purchases are to be treated as instalments delivered under such contracts,
as opposed to individual contracts of sale in their own right. The better
view is that the framework contract itself is not a contract of sale under
262 Landgericht Mainz of 26 November 1998 (translated at www.cisg.wais.db.cases2/

981126g1.html).
23 Oberlandesgericht Kean of 26 August 1994 (translated at vv-ww.cisg.law.pace.edu/
wais/db/cases2/940826g1.htrn1) (delivery of scientific study).
the Convention' but that individual sales concluded thereunder are.' This
gives rise to a type of depecage in that different laws apply to closely
connected contracts that are designed to work hand in glove. As awkward as
this may be, it is hardly an unprecedented legal phenomenon. To avoid such
depecage, a different approach would treat the framework contract and the
individual sales as one whole contract, weighing the distributor-
ship obligations against the sale obligations further to the preponderance test
in Article 3(2)206 in order to determine whether the contract is on the
whole one of sale or some other contract instead. This approach, it is
submitted, is unsound in the case of distributorship. Some of the obliga-
tions of the contract, respecting for example confidentiality or the promo-
tion of products in a defined territory, are not germane to contracts of sale so
that it is impossible to conduct a balancing exercise of different and
discrepant elements to produce a complex contract that can be styled a
contract of sale. In the case of other framework contracts, of the type that
arises where the seller binds itself to sell its entire output at intervals to the
buyer, or the buyer pledges itself to purchase all of its requirements of a
particular type from a named seller, the problem of discrepant obliga-
tions does not arise. The one-contract solution appears quite feasible in
such a case. Moreover, there does not seem to be a need to resort to the test in
Article 3(2) in the case of such contracts.
5. CONFLICTS AND OVERLAPS BETWEEN THE VIENNA

CONVENTION AND THE ROME AND HAGUE CONVENTIONS
16.96 Many states are parties to both the Vienna Convention and to either
or both of the Rome Convention on the Law Applicable to Contractual
Obligations' and the Hague Convention on the Law Applicable to
International Sales of Goods 1955.208 The last of these Conventions
was designed to be superseded by a later Hague Convention that was
signed in 1986, but this 1986 Convention has not received the number of
See Helen Kaminski v Marketing Australian Products (21 July 1997, Fed Dist NY) (very
undear but semble no) (available at http://cisgw3/law.pace.eduicases/970721u1ltml);
Handelsgericht Zurich of 8 April 1999 (translated at www.cisg.wais.db.cases2/990408s1.
html).
205 See Oberlandesgericht Koblenz of 17 September 1993 (translated at http:/ /cisg,w3.
law.pace.edu/cisg/wais/db/cases2/930917g1.html), Oberlandesgericht Dusseldorf of 11 July
1996, Recht der Internationales Wirtschaft 1996, 958, Gerechtshof Amsterdam of 16 July 1992,
Nederlands International Privaat-recht 1992, no 420, Obergericht des Kantons Luzern of
8 January 1997 (see D 1998 Somm 325, observations C Witz).
206 See ICC Arbitration Case No 8817 of December 1997 (translated at
wvv-w.cisg.wais.db.cases2/978817i1.htnil), at [5].
207 On which, see Ch 13 above.
205
For the relationship between the Rome Convention and the two Hague Conventions, see
Ch 15 above.
adoptions required for entry into force. Given the adoption of the Vienna
Convention by more than 60 countries with further adherents likely in the
future, the 1986 Convention is unlikely ever to come into force, if only
because the scope that remains after uniformity for the choice of law
process is so severely reduced as a result of the large number of states
adopting the Vienna Convention.' The Hague Convention 1986, how-
ever, may be looked at to throw some light on the question of how a state's
adoption of what, on the face of it, appear to be conflicting Conventions can
be reconciled. The first point to note in the treatment of this subject is that
these Conventions do not call upon Contracting States to denounce their
obligations under one or more of the others.' Indeed, to contrary effect,
each appears to defer to the others so as to give the initial impres-
sion of desistement, with treaty commitments in aggregate withdrawing to
leave a space vacated of obligations.
First of all, the language of the provisions in these various Conventions 16.97
will be analyzed to determine how far they overlap each other. The next
question will be to see how far if at all the Conventions would lead to
different choice of law outcomes.
The Rome Convention
Article 21 of the Rome Convention provides that it 'shall not prejudice the 16.98
application of international conventions to which a Contracting State is,
or becomes, aparty'.' In other words, Article 21 announces the retire-
ment of Rome, not just as to the Contracting State's previous commit-
ments, but also as to any future commitments. It is hard to imagine a
formula broader than that set out in Article 21, which amply embraces the
Vienna Convention. Article 90 of the latter Convention states:
This Convention does not prevail over any international agreement which already has
been or may be entered into and which contains provisions concerning the matters
governed by this Convention, provided that the parties have their places of business
in States parties to such agreement.'
The appearance of a circle is thus created, as each Convention defers to the

other.
Furthermore, in the vanes and of these adopting states will be states that might,
because of their commitment to international conventions, might otherwise have been
expected to adopt the 1986 Hague Convention.
With the exception of the Hague Convention 1986 respecting its 1955 predecessor.
`1 Of the states that are parties to the Rome Convention, all of them with the exception of
Portugal, Ireland and the UK are also parties to the Vienna Convention.
212 Tihee equivalent of Art
90 in the UN Convention on the Limitation Period in the
International Sale of Goods 1974 is Art 37.
16.99 Article 90 of the Vienna Convention raises a number of points. First, so far
as the United Kingdom remains outside the Vienna Convention, it is
unlikely to experience significant difficulties with this Article' in relation
to contracts of sale."'
16.100 Second, if the Rome Convention is ever replaced by an EC Regulation

directly applicable in the Member States of the European Community,
Article 90 would seem to have no application since an EC regulation is not
as such a matter of international agreement. It would strain matters
somewhat to say that the 'agreement' referred to is the EC Treaty itself
under which the Community might adopt regulations within the sphere
of its competence, especially since Article 90 requires that 'agreement' to
contain 'provisions concerning the matters' in the Vienna Convention,
which the EC Treaty itself does not.
16.101 Third, the Rome Convention is of universal application for its Contracting
States in that it applies to all choice of law matters within its scope and is
not confined to intra-European Union conflicts. That is to say, the whole
of a Contracting State's pre-existing choice of law rules in contract, to the
extent of the coverage of the Rome Convention, are superseded by its
terms; they are not superseded merely to the extent that they might
otherwise apply to contractual relations involving parties domiciled
or resident within the European Community. Now, Article 90 defers to the
Rome Convention only so far as the parties have their places of business
in one or more States Parties to the Rome Convention, and would seem
moreover to require this of both parties to a contract of sale. This formula
falls considerably short of the full scope of the Rome Convention, which
is capable of applying where neither party has a place of business in a
Contracting State.'
216
16.102 Fourth, certain types of sale are excluded by the Vienna Convention,
whereas certain types of contract are excluded by the Rome Conven-
tion, and these contracts happen not to be types of sale contracts.
What this in effect means is that a wider variety of sale contracts can
21' Although the UK did enact ULIS by the Uniform Law on International Sales Act 1967, it is
unlikely to create practical problems. ULIS will apply if, but only if, the parties choose its
provisions as the applicable law of the contract (s 1(3)). Such a choice should anyway be
sanctioned by Art 3(1) of the Rome Convention.
sia In relation to carriage of goods, the application of the Hague-Visby Rules, which were
enacted in the UK by the Carriage of Goods by Sea Act 1971, will be preserved.
213 e.g. where non-residents of an EC State select the law of an EC State as the applicable law.
(Note that the applicable law under the Rome Convention need not be the law of a
Contracting State: Art 2.)
216 See in particular Art 2.
fall under the Rome Convention than can fall under the Vienna Con-
vention. To the extent that the former overlaps the latter, contracts in the
overlap area cannot be subject to any conflicting demands of the two
Conventions.
Fifth, the Vienna Convention defers to the Rome Convention only in 16.103
respect of 'matters governed by' the Vienna Convention.' The Rome
Convention is a uniform choice of law Convention and applies to all
contracts unless otherwise excluded, including sale of goods contracts.
The Vienna Convention is overwhelmingly a uniform substantive law
Convention which, as we have seen, incorporates a significant measure
of choice of law. Besides Article 1(1)(b), choice of law is also capable of
intruding under Article 7(2) of the Vienna Convention. It would only be in
respect of the choice of law aspects of the Vienna Convention that it
would be necessary to determine the question of primacy between the
Rome and Vienna Conventions. Apart from that, it is necessary to revisit
the basis upon which the Vienna Convention is rendered applicable in the
first instance under Article 1.
The view advanced above was that, despite Professor von Mehren's 16.104
hypothesis that the dual residence test in Article 1 (1) (a) of the Vienna
Convention could be seen as an imperfectly stated choice of law rule, it is
nothing of the sort. Rather, it is a domestic rule of the adopting state that,
in stated circumstances, a sale of goods law other than any law that would
be selected by the choice of law process will be applied to the contract at
hand. The view was also advanced above that the private international
law basis for the application of the Vienna Convention, in Article 1(1)(b),
could and should also be seen as a domestic rule of the adopting state. By
this domestic rule, a sales law, other than the law that would be selected
by the choice of law process, would be substituted for the combination
of that state's former choice of law rule and the national law to which
that rule pointed. The virtue of domesticating the Vienna Convention in
the above way is that it removes conflict between the Rome Convention
and the Vienna Convention. The argument, nevertheless, that the two
Conventions thus deal with different 'matters' is nevertheless somewhat
formalistic.
An argument against a formal interpretation of this sort comes in 16.105
Article 99. The conventions that are most likely to cover the 'same matters'
as the Vienna Convention are the two 1964 Hague Conventions laying
'7 One explanation for this formula is that it makes it clear that the Vienna Convention can
be amended by the flexible procedures laid down in the Vienna Convention on the Law of
Treaties 1969 (see Art 40(2), (3)) rather than by denunciation and readoption: see J Honnold,
Uniform Law for International Sale of Goods (3rd edn, Deventer: Kluwer, 1999) 531.
down a Uniform Law on the Formation of Contracts for the International Sale
of Goods (ULF) and a Uniform Law on the International Sale of Goods
(ULIS). Article 90 does not defer to these two uniform laws. On the
contrary, Contracting States are bound to denounce either or both of the
two 1964 Hague Conventions depending upon whether they have made an
Article 92 declaration, which permits states to opt out of the formation
provisions (Part II) or the substantive sale of goods provisions (Part III) of
the Vienna Convention. Article 99 largely eliminates the ground for
deference if Article 90 is supposed to be given the formalistic interpretation
stated above.
16.106 The removal of conflict, however, is not the entire key to rendering the
Rome and Vienna Conventions formally compatible in the courts of a
Contracting State since, if there is no operative language of deference and
if both Conventions on their terms are applicable at the same time, then
the court applying them is in an impossible position. There seem to be two
possible escape routes from this predicament. The first is to compare the
language of deference. It is, as we have seen, expressed in narrower terms
in the Vienna Convention than it is in the case of the Rome Convention. It
might therefore be concluded that the Rome Convention retreats whilst
the Vienna Convention stands its ground.
16.107 The second approach is to consider a range of cases where it might be

thought that an application of the two Conventions would lead to
different results and then to ask whether this is in fact the case.218 First,
where the Vienna Convention applies because the choice of law rules of
the forum state, a party to that Convention, lead to the law of another
Contracting State,' the outcome is exactly the same as would be arrived
at under the Rome Convention. This is regardless of how the choice of
law rules of the Rome Convention would arrive at that same outcome,
whether pursuant to an express or implied choice of law, the law of the
residence of the characteristic performer, or the law of closest connection.
If there is an express choice of the law of a Contracting State, then
the forum state will, pursuant to its Vienna Convention obligations,
apply that Convention. Pursuant to its Rome Convention obligations,
the forum state will apply the appropriate sales statute of the applicable
Where the buyer, asserting an inconsistency between the Rome and Vienna Con-
ventions, sought the Tribunal de Commerce Bruxelles to refer the matter to the ECJ, the
court, for unclear reasons, seeing no conflict, declined to make the reference: Tribunal
de Commerce Bruxelles of 5 October 1994, available in the original French at
www.law.leuven.ac.be/int/tradelaw and translated at hap://cisgw3.1awpace.edu/dsg/
wase / db / cases 2 /941005b 1 .html.
219 Art 1(1)(b).
law, designated by that law as apt for international sales of this

character,' which will be the domesticated Vienna Convention.'
Exceptionally, a conflict between the Rome and Vienna Conventions 16.108

might arise on special fads. Suppose that a German court is seised of a
dispute between a French seller and a German buyer in respect of a con-
tract for the sale of machinery concluded at a trade fair in England. The
German buyer needs the machinery for its English factory and the goods are
to be delivered there by the French seller. It is just arguable that, under the
Rome Convention, the presumption in the absence of choice in favour of the
law of the characteristic performer's place of business is ousted in favour of
the law of the country of closest connection in Article 4(5). If this were so, then
English law would apply under the Rome Convention even though, under
Article 1(1)(a) of the Vienna Convention, the latter would be applicable.
This is an unlikely type of case, for the further reason that it comes close to an
English place of business having a closer connection to the contract than the
German buyer's main place of business in Germany. In such an event, the
German buyer would be deemed to be resident in England under Article 10
of the Vienna Convention, with the result that Article 1(1)(a) would have no
application. Apart from that, and accepting this mere possibility of conflict
between the two Conventions, it is sub-
mitted that the Vienna Convention should prevail since, despite its choice of
law rules, it is overwhelmingly a substantive law instrument.
A less straightforward reconciliation of the two Conventions than 16.109
tracking their application to the same result comes in cases where the
Vienna Convention applies by virtue of the dual residence test in Article
1 (1)(a). Suppose that an Italian forum is adjudicating on a contract
concluded between a German seller and a Belgian buyer, all three states
being parties to both the Rome and the Vienna Conventions. The greater
part of the contract is to be performed in Belgium. Suppose further
that, under the Rome Convention, German law would apply by virtue of
70 See further above, paras 13.74-75.

No Rome States have made an Art 95 declaration under the Vienna Convention,
excluding Art 1(1)(b) and the private international law route unto the latter Convention. If
such a state existed (as might be the case if the UK adopted the Vienna Convention), the
Rome route into the Vienna Convention (as embedded in the substantive applicable law)
would remain available. So far as the UK remains outside the Vienna Convention, the Art 95
declaration poses problems for the maintenance of uniformity within the Rome Convention. If an
English court were led by its private international law rules to New York law, it would apply
New York substantive law. A Dutch court, on the other hand, if not recognizing the US
declaration under Art 95 (see discussion below, paras 16.128-136), would apply Art 1(1)(b) and
treat the US as a Contracting State, with the result that it would apply the Vienna
Convention. Art 18 of the Rome Convention, it should be noted, requires states to have
regard to the international character of the Convention and the desirability of achieving
uniformity in its interpretation and application.
the presumption in the absence of choice in favour of the law of the
characteristic performer's place of business,' but that Belgian law would
apply if the law of the country of closest connection were held applic-
able,' while Italian law would apply if the court were convinced that the
choice of an Italian forum amounted to an implied choice of Italian law as the
applicable law.' Whilst, without the Vienna Convention, it would be critical
for the purposes of the Rome Convention to determine which of the above
three approaches was correct, the Vienna Convention robs the selection of
any practical importance since the same Vienna Convention is found in the
domestic sale laws of all three states and is applicable to the contract of
sale in these circumstances. In such a case, the Vienna Convention
simplifies the application of the Rome Convention and is not in conflict with
it at all.
16.110 It is quite difficult to manufacture an example involving the dual resi-
dence test that displays conflict between the two Conventions. Suppose,
however, that the seller is Belgian and the buyer German but the parties
expressly select English law as the applicable law. The dispute is taken to
the courts of a state that is party to both Conventions. On the face of it,
there is a conflict if it is thought that the Rome Convention requires the
application of English law but the Vienna Convention is on its own terms
applicable. The possibility of such a conflict is raised because the United
Kingdom has not adopted the Vienna Convention, which prompts the
observation that, the more universal the Vienna Convention becomes in
the European Union, the less likelihood there is of any conflict between
the two Conventions. On closer analysis, however, the Vienna Convention
excludes itself and leaves the field to the Rome Convention. This is
because Article 6 of the Vienna Convention permits the parties to
derogate from it in whole or in part. In choosing English law as the
applicable law, it would seem that the parties have clearly demonstrated
that they do not intend their agreement to be governed by the Vienna
Convention.' A narrow view that Article 6 should be read as permitting
only an express exclusion of the Vienna Convention would have the
unacceptable consequence of placing a Rome Contracting State in an
222Art 4(2). '3 Art 4(1), (5).

22 Art 3(1): see Marubeni Hong Kong and South China Ltd v Ministry of Finance of Mongolia
[2002] 2 All ER (Comm) 873 (good arguable case for jurisdiction purposes). See also Egon
Oldendorff v Libera Corp (No 1) [1995] 2 Lloyd's Rep 64 and Egon Oldendorff v Libera Corp (No 2)
[1996] 1 Lloyd's Rep 380. See further above, paras 13.44-55.
Obviously, the applicable law clause chosen here is not as clear as an express provision that
the Vienna Convention does not apply.
intolerable dilemma.' However, if one party (at least) claims that it was
unaware that the United Kingdom had not adopted the Vienna Con-
vention, so that Article 6 had not been satisfied, then there might indeed be
a conflict between the two Conventions.'"
Article 6 of the Vienna Convention is relevant with regard to mandatory 16.111
rules, an expression that is used on six occasions in the Rome Con-
vention.' The concept of mandatory rules is not expressly defined and,
moreover, its meaning is evidently a variable one according to which of
the several references to it in the 'Convention is applicable. Article 7(1)
of the Rome Convention, for example, permits (not obliges) a court to give
effect to the mandatory rules of a country with which the 'situation is
closely connected." The difficulty of giving the expression as used in
Article 7(1) an exact meaning, as well as the discretionary basis for its
application, explains why the UK Government entered a permissible
reservation to this provision.' One definition of mandatory rules as used
in Article 7(1) would be based on the following:
. .. provisions to which a state attaches such importance that it requires them to be
applied whenever there is a connection between the legal situation and its
territory, whatever law is otherwise applicable to the contract. What is special
about the mandatory rules within the meaning of Article 7(1) is that the court
does not even apply its conflict rules to see what law would be applicable and
assess whether its content might be repugnant to the values of the forum but
automatically applies its own law.'
The problem that mandatory rules, as dealt with in Article 7(1), poses for 16.112 the
compatibility of the two Conventions is this. In view of the extensive
freedom that the Vienna Convention gives the parties to vary or derogate
from its provisionsprovisions that lay down rights and obligationsis
this freedom taken away by a Convention (the Rome Convention) that
permits deference to another country's mandatory rules? Suppose the
parties agree on performance that departs from the substantive provisions
228 See C McLachlan, 'The New Hague Sale Convention and the Limits of the Choice of Law
Process' (1986) 102 LQR 591, 612, arguing cogently that the express choice of the law of a state
that has not adopted the Vienna Convention should be recognized by the courts of Contracting
States pursuant to Art 6.
22-7 It would depend upon what the parties meant when they selected English law as the
applicable law (were they evincing an intention to have the Sale of Goods Act 1979 applied?) if
they believed that the IJK had adopted the Vienna Convention. The intention of the
ignorant party would be assessed according to the test laid down in Art 8 of the Vienna
Convention, which starts from a subjective premise but is in substance an objective test that
looks to the reasonable contracting counterparty.
228 See above, paras 13.274-281. See further Rome I Green Paper 2003 (see part 3.2.8);
Cheshire and North, 577-578.
129 Whatever that might mean. For a criticism of Art 7(1), see Cheshire and North's 584.
23 See above, para 13.281. 281 Rome I Green Paper 2003, para 3.2.8.1.
of the Vienna Convention and also infringes the relevant mandatory rules
of a closely connected state. The response is clear: Article 7(1) of the Rome
Convention only permits a court to invoke foreign mandatory rules and
does not compel it. There is no reason why a State Party to the Vienna
Convention should not sign away the freedom given by the Rome Convention
to invoke the mandatory rules of a connected state. In any case, attention
should be given to the precise meaning of Article 6. It refers only to varying or
derogating from Vienna Convention rules and does not state in unrestricted
terms, not specific to that Convention, that the seller is free to exclude all
liability for the quality and fitness of goods. Article 6 does not purport to grant
freedom with respect to rules of a different, non-
UN provenance, so there is no conflict between it and the mandatory rules of a
connected state in the first place.
16.113 Another possible source of conflict between the Vienna Convention and
the Rome Convention disappears on close analysis. Under Rome, the
forum state is permitted to apply its own public policy notions.232 This
is not a matter of obligationso there is no conflict with the Vienna Con-
ventionand in any case matters of public policy would surely amount
to matters of validity for the purpose of the Vienna Convention, such
matters being excluded from that Convention by Article 4(a). With regard
to formal validity, there is in principle no scope for conflict between the
Rome Convention and the Vienna Convention, given that the latter does
not impose any requirements of form. Nevertheless, certain difficulties
might arise as a result of the latter Convention permitting certain states to
opt out of the rule of informality: these will be discussed below' when
the relevant provision, Article 96 of the Vienna Convention, is discussed.
Hague Sales Convention 1955
16.114 The terms of Article 90 of the Vienna Convention have already been
noted. The Hague Convention on the International Sale of Goods 1955
contains no deference (or give way) clause akin to Article 90 of the Vienna
Convention or Article 21 of the Rome Convention. This opens up, initially at
least, the possibility that the Hague Sales Convention 1955 will apply in the
case of a conflict with the Vienna Convention. The first question to
address is whether the matters governed by the two Conventions are the
same, an enquiry previously conducted in relation to the Rome
Convention.' In just the same way, the response is that the Vienna Con-
vention, whilst containing some private international law material, is
232 Art 16. See above, paras 13.282-294. 3 At paras 16.137-141.

See above, para 16.103
II. LIN Convention on the International Sale of Goods 1980 969
nevertheless overwhelmingly a Convention that deals with substantive

sales law. Apart from the importation of substantive law by way of Article
7(2), the private international law content of Article 1 235 might be seen as
conditioning the application of the Vienna Convention, rather than as
being something 'governed' by the Convention.
The second question is to consider whether, on the assumption that the 16.115 two
Conventions are both applicable, they are in conflict with each other.
In just the same way as it was seen that the Rome Convention was not in
conflict with the Vienna Convention, so all that the Hague Convention
does is to furnish the rules of private international law that may or may
not in a given case lead to the application of the Vienna Convention by
way of Article 1(1)(b) of the latter. This will happen where the parties
select a law that incorporates the Vienna Convention:' the Hague
Convention 1955' recognizes the parties' choice of a governing law.' As
for the dual residence test in Article 1(1)(a), this is compatible with the
rule in the Hague Convention 1955 that, according to the circumstances,
either the law of the seller's or of the buyer's habitual residence or place
of business is the controlling law.' The scope for conflict between the
two conventions is further reduced by the exclusion from the Hague
Convention 1955 of matters of formal validity.
In one respect, however, the Hague Convention could depart from the 16.116
Vienna Convention, and that is where, under Article 4, it presumptively
applies the law of the place where the buyer conducts his examination, as
to the form of such examination and the time within which it must occur,
as well as to any notice given in consequence of such examination. Under
this same provision, the law of the place of examination will also deal
with any measures that have to be taken in the case of goods rejected by
the buyer.' The reasonable time within which an examination must be
conducted may under Article 39 of the Vienna Convention be informed
by the law of the place of examination, but the other issues covered by
Article 4 could be subject to a law that does not incorporate the Vienna
Convention, in circumstances where this Convention under its own terms
235 For the sake of completeness, one might mention again the hypothesis mentioned by
Professor von Mehren, not adopted in this text, that Art 1(1)(a) is an imperfectly expressed
choice of law rule: see above, para 16.24.
Assuming they do not by this choice impliedly intend to exclude the Vienna
Convention: see above discussion. See also para 15.30.
137 Art 5 (2). There are certain complexities arising under the Vienna Convention as a
result of the permitted declaration in Art 96 that serves to exclude the Convention rule that
contracts can be concluded and modified informally.
238 Art 2. Note that the Hague Convention 1955 proscribes renvoi in the same way as does the
Rome Convention: Arts 2-4.

2-'9 Art 3. 2u) On the meaning and scope of this provision, see above, paras 15.49-58.
would be applicable. In effect, this possibility will arise where goods are
delivered in a non-Contracting State under the Vienna Convention. If the
Vienna Convention is to prevail over the Hague Convention 1955 in this
case, it must be because the Vienna Convention defers to other con-
ventions only in respect of matters 'governed' by the Vienna Convention, an
expression that does not extend to choice of law rules. This, however, is a
strained expedient.' Furthermore, the recollection of one distinguished
delegate, that he could not in the legislative process have imagined the
assembled delegates accepting that the Hague Convention should prevail in
these circumstances,' is no substitute for reading the text of Article 90 of the
Vienna Convention and asking what else that provision could have meant.
There has to be a limit on the extent to which the interpretative process
can be stretched to avoid pitfalls arising out of the legislative process.
16.117 The final question, bound up with the previous one, is to determine the
matter of primacy between the two conventions in that narrow range of
cases where there is conflict between the two. This issue is more complex
than the equivalent issue concerning the Rome and the Vienna Conven-
tions, because there is no give way clause in the Hague Convention 1955.
Consequently, an interpretation of the Vienna Convention along the lines
that it does not truly defer to the Hague Convention, taking account of the
matters 'governed' by the former Convention, is not conclusive when
the Hague Convention on its own terms remains applicable. Reducing a
problem to minor proportions by shrinking the area of conflict does not
make it go away. In the absence of a doctrine of implied repeal, as might
be applied in the case of two conflicting statutes so that the later prevails
over the earlier, there is no machinery for reconciling a Contracting State's
conflicting engagements. One response is to say that if the State of
Plutonia engages with Urania to go to its assistance if it finds itself at war
with Cobaltia, and engages similarly to go to the assistance of Cobaltia
if it finds itself at war with Urania, then Plutonia's dilemma cannot be
resolved by legal means. A more constructive response is to build upon
the Vienna Convention as the more developed instrument. This would
involve noting that the Hague Convention 1955 is silent on the matter
and that Article 90 of the Vienna Convention on its terms does not apply
since it comes into play only where any two conventions have provisions
governing the same matter. This approach in favour of applying the
Vienna Convention is to be preferred.'
See the similar argument, based on Art 99 of the Vienna Convention, advanced above in
respect of the Rome Convention.
Honnold, n 217 above, at 535.
See Ch 15, n 21 and accompanying text.
IL LIN Convention on the International Sale of Goods 1980 971
Hague Sales Convention 1986
Unlike the Hague Convention 1955, the Hague Convention 1986,' which 16.118 is
not yet in force and which, because of the great success of the Vienna
Convention, is unlikely ever to enter into force, does contain a give way
clause and a very specific one at that. According to Article 23: 'This
Convention does not prejudice the application: (a) of the United Nations
Convention on Contracts for the International Sale of Goods . This
leaves the give way clause in Article 90 of the Vienna Convention, but it is
submitted that the latter provision has no application in any event, given
that the word 'prevail' in Article 90 supposes a conflict between the two
conventions that the language of the Hague Convention 1986 has sought
studiously to avoid.' The latter Convention has retreated, leaving the
Vienna Convention in sole occupation of any field that the two
conventions might otherwise have contested.
Notwithstanding this interpretation of Article 90, so far as conflict might 16.119
arise between the UN and Hague Conventions, the arguments rehearsed
above in relation to the Rome Convention once again come into play.'
The Vienna Convention deals overwhelmingly with substantive sales law.
Schlechtriem' indeed comments that the representatives of the Hague
Conference on Private International Law, speaking at the diplomatic con-
ference establishing the Vienna Convention, had argued that Article 90 of
this Convention was unnecessary, since that Convention contained no
private international law rules. The point may be made again that Article
1 (1) (a), despite Professor von Mehren's hypothesis that it is an imperfect
choice of law rule, should not be seen as such:' this diminishes any
Convention on the Law Applicable to International Sale of Goods. See Ch 15; see also
McLachlan n 226 above.
See also Arts 8(5) and 22(1). The latter provision provides that the Convention 'does not
prevail over any convention or international agreement which has been or may be entered into
and which contains provisions determining the law applicable to contracts of sale,
provided that such instrument applies only if the seller and the buyer have their places of
business in States Parties to that instrument'. Art 22(2) goes on to say that the Convention does
not prevent the application of international conventions to which a state is or becomes party and
which regulate choice of law in regard to particular categories of contract of sale. See further
above, paras 15.67-67.
The Hague Convention was drafted in contemplation that its provisions would com-
plement those of the Vienna Convention. One might have hoped that the details of the
relationship between the two conventions would have been worked out in more detail and
more clearly. For a view to this effect, see McLachlan, n 226 above, at 613.
48
See above, paras 16.98-113. 2 Schlechtriem, 688.
249 Especially since he rejects as `unnecessary and undesirable' the treatment of Art 1(1)(a) in
this way: Report on the Hague Sales Convention 1986, Proceedings of the Extraordinary
Session of October 1985, para 193.
possibility that both conventions retreat from a given case, thus creating a
'negative conflict.'
16.120 Apart from that, the Hague Convention 1986, like its 1955 predecessor,
supplies private international rules that can lead to the Vienna Conven-
tion by way of the latter's Article 1(1)(b). In particular, it recognizes the
parties' choice of an applicable law.' In default of choice, it applies the
law of the seller's residence' and, so far as it recognizes the Vienna
Convention as part of the law of the seller's residence in cases where that
Convention would apply on its own terms under the dual residence test
of Article 1(1)(a), it steers clear of conflict. The Hague Convention 1986
reinforces this appearance of non-conflict in other ways too. The same
definitions of goods and excluded types of sale contract are, for practical
purposes, common to the Hague Convention 1986' and the Vienna
Convention. Furthermore, an expansive number of sale issues are placed
within the province of the applicable law in the Hague Convention
1986;254 the test of an international sale in the two conventions is the
same;" and the law of the place of inspection is restricted in scope to
formal matters,' thus diminishing any real possibility of conflict with the
Vienna Convention. In one respect, however, there is considerable scope
for interplay between the provisions of the Hague Convention 1986 and
the Vienna Convention. This occurs in respect of states that have departed
from the latter Convention's eschewal of forms by making a declaration
under Article 96. This will be considered below when the Article 96
declaration is discussed.
6. THE EFFECT OF RESERVATIONS AND DECLARATIONS
General
16.121 The Vienna Convention in a number of places expressly allows states to
make 'declarations' that affect the extent to which they are bound by
specified parts of the Convention.' It also provides in Article 98 that:
'No reservations are permitted except those expressly authorized in this
Convention'. Neither expression, 'declaration' or 'reservation', is defined
in the Convention but it is noteworthy that the only place in which
the Convention uses the word 'reservation' is in Article 98 itself, which
plainly contemplates the existence of some reservations in the Conven-
250
ibid. 251 Art 7. 252 Art 8(1).
253
Arts 2-4, though the Hague Convention does apply to auction sales (Art 9).
254
Art 12. See above, paras 15.09-12.
255
See Art 1(a) of the Hague Convention 1986.
256
Art 13. Namely Arts 92-96. Art 97 makes formal provision for declarations.
tion. The UN Convention on the Law of Treaties' defines a reservation as 'a

unilateral statement, however phrased or named, made by a State, when
signing, ratifying, accepting, approving or acceding to a treaty, whereby it
purports to exclude or modify the legal effect of certain pro-
visions of the treaty in their application to that State'.259 From this it may be
inferred that what the Vienna Convention calls a declaration is a reserva-
tion for the purpose of both the Convention itself and the UN Convention on
the Law of Treaties. A declaration under the Vienna Convention is no less
'unilateral' for being a permitted option granted by the Convention itself.
The Convention on the Law of Treaties provides that a state may not, in a 16.122
case where only specified reservations are permitted, make other reserva-
tions.m Article 98 of the Vienna Convention, as seen, expresses the same
prohibition. The effect of a permissible reservation is to modify for a
Reserving State, in its relations with other States Parties to the treaty, the
provisions of the treaty to which the reservation relates.' It is not trans-
parently clear how the effect of such reservations is translated into the
private law relations of buyer and seller under the Vienna Convention,
since reservations are defined in terms of the way that treaty provisions
apply to the Reserving State.262 It is nevertheless clear that such reserva-
tions must affect the way in which the courts' of the Reserving State
enforce contracts governed by the Vienna Convention and coming before
them. Whatever the impact of the reservations, they must first be inter-
preted to see how far they are intended to go.
The Article 92 Declaration
The most radical declaration in the Vienna Convention is that contained 16.123 in
Article 92; it permits a Contracting State to declare that it is not bound
by either Part II (formation of the contract) or Part III (the substantive sale
of goods provisions) of the Convention. A number of states have made
declarations in respect of Part II but no declarations have been made in
respect of Part HI. The effect of any such declaration will be to create a gap
in the Convention, respecting the Declaring State, for the operation of
rules of private international law. The rules in question will be those of the
258 Signed at Vienna on 23 May 1969 and entering into force on 27 January 1980. Although a
large number of states have acceded to this Convention, their number represents less than half
of all nation states members of the UN. The Convention, however, is widely accepted (inparts
at least) as representing customary international law.
Art 2(1)(d). 24 Art 19(c). 261 Art 21(1)(a).
262 Art 2(1)(d) of the UN Convention on the Law of Treaties.
263 Quaere arbitrators (as opposed to the enforcement of arbitral awards through the
justice system of the reserving State) (see n 58 above)?

forum state. As a matter of treaty law, the forum state must respect the
declaration in question if it too is a Contracting state.' If the forum state is a
non-Contracting State, the effect of the declaration will be to redefine the
area of operation of the Vienna Convention so that the forum state is
deflected to another body of the Reservation State's law of sale when the
substantive law of this latter state is selected by the forum's rules of private
international law.
16.124 A further feature of the Article 92 declaration should be considered.
According to paragraph (2), a Declaring State is regarded as not being a
Contracting State for the purpose of Article 1(1) to the extent of its
declaration. So, if a Contracting State enters a declaration in respect of
Part II, then the courts of another Contracting State must respect the
declaration in the following two examples based upon the Article 92
declaration made in fact by Sweden. A Russian seller and an English
buyer conclude a contract subject to Swedish law as the applicable law.'
Under Article 1 (1) (b), Swedish law cannot be applied by the courts of a
Contracting State to contractual formation because the applicable law
under the forum's rules of private international law is not, so far as
formation goes, the law of a Contracting State. Similarly, if the seller is
Russian and the buyer is Swedish, Part II will not be applied by the courts of a
Contracting State invoking the Vienna Convention under Article 1 (1) (a)
because Sweden, for the purpose of formation issues, is not a Contracting
State under Article 1(1)(a)." To return to the first of these two examples, if
the buyer had been German instead of English, then the Convention would
2
have been applied by virtue of Article 1(1)(0 67 without reference to
Sweden.

16.125 The declaration contained in Article 93 permits Contracting States with
'two or more territorial units' subject to 'different systems of law' to
declare that the Convention will apply either to all' or some of those
Art 21(1) of the UN Convention on the Law of Treaties.

2' It is here assumed that this express choice of law is not regarded as displaying an
intention to exclude the Vienna Convention under Art 2.
266 The same two outcomes will follow from the ordinary choice of law process where the
forum is in a non-Contracting State.
267 Subject to the possible meaning of the applicable law clause as evincing an intention to
subject formation issues to Swedish domestic law.
'8 If the Contracting State makes no declaration, the Convention will apply to all of its
territorial units: Art 93(4). The equivalent of Art 93 in the UN Convention on the Limitation
Period in the International Sale of Goods 1974 is Art 31.
territorial units.269 Those different laws must coexist as a matter of the
state's constitutional law, an expression that requires some consideration in
those cases where a state has no true written constitution.' Paragraph
(3) states explicitly that a contracting party is not resident in a Convention
State if he is resident in a territorial unit to which, under the state's
declaration, the Convention does not apply. Although Article 93 does not say
so in as many words, the rules of private international law of the forum
should not lead to the law of a Contracting State under Article 1 (1) (b)
where they lead to the law of an excepted territorial unit. Article 93 appears to
be most useful in the case of federal states that have to secure the assent of
each state or province to the Convention, so as to allow adoption of the
Convention in an incremental way as individual terri-
torial units accede to the Convention at intervals.'
Another permitted declaration is to be found in Article 94, which allows 16.126 two
or more states with 'the same or closely related legal rules on matters
governed by this Convention' to declare that the Convention shall not
apply where the parties have their place of business 'in such States'.'
The declarations 'may be made jointly or by reciprocal unilateral
declarations',' so that one such state can declare and wait for as long
as is required for one or more other eligible states to declare, which can
take place after the latter state (or states) has acceded in an unreserved
way to the Convention by one of the usual means.' If the declaring states
are parties to a Convention laying down a uniform law, an alternative
269 There is no reason why an Art 93 declaration might not be combined with other
declarations. Canada initially entered before later withdrawing a declaration under Art 95 to the
effect that British Columbia only of its provinces and territories would not be bound by
Art 1(1)(a).
270
e.g. the UK, where surely the Act of Union 1707 would qualify as constitutional law.
2-71 See the experience of Canada as set out at www.uncitral.org (Status of Texts). This
point emerges from the contribution of the Australian delegate at the first meeting of the
Second Committee at the Vienna Conference, commenting on two earlier alternative drafts
of what became the current Art 93. See the Official Records of the conference (OR, 434 et seq).
2 in any two of such states if they are more than two in number. The equiva-
lent of Art 94 in the UN Convention on the Limitation Period in the International Sale of
Goods 1974 is Art 34.
273 p (1).
2, 4 Art 94(1) declarations have been made inter se by Norway, Sweden, Denmark and
Finland.
976 Chapter 16: Uniform and Harmonized Sales Law: Choice of Law issues
route to the declaration process might have been found in the give way
provision, Article 90,275 but the process in Article 94 is clearer.
16.127 The process in Article 94 is available also in respect of relations between
Contracting and non-Contracting States.' One or more Contracting
States may make (unilateral)277 declarations as regards one or more
non-Contracting States. If, for example, Australia wished to make a
declaration under Article 94(2) in respect of the United Kingdom, then the
close relationship between the law of sale in both countries ought to allow
it.' Article 94(3) makes provision for a declaration under Article 94(2)
to be converted into a declaration under Article 94(1) in the event of the
non-Contracting State becoming a Contracting State.279

16.128 Perhaps the most challenging declaration to understand is the one in
Article 95: 'Any State may declare . . . that it will not be bound by sub-
paragraph (1)(b) of article 1 of this Convention'.' To date, declarations
have been made by a number of states including China and the United
States,281 and there are indications that, if the United Kingdom were to
accede to the Convention, then it too would make a declaration.' During
the legislative process, invoking the new uniform law by means of rules
of private international law was regarded as controversial.' As seen
When Hungary acceded to the Convention it purportedly made a declaration under Art
90 to the effect that it considered the General Conditions of Delivery of Goods between
Organizations of the Member Countries of the Council for Mutual Economic Assistance
(COMECON) to be subject to Art 90 of the Convention (and thus to prevail over the Conven -
tion). No other COMECON country made a similar declaration.
276 Declarations were made by Norway, Sweden, Denmark and Finland as regards
Iceland, at a time when Iceland was a non-Contracting State.
277 The non-Contracting State cannot of course make a declaration.
276 In the case of Canada, the position is not so clear because the law of sale of the of the
province of Quebec is based upon the civil law and does not derive from the imperial Sale of
Goods Act 1893. It does not appear possible to combine a declaration under Art 94(2) with a
declaration under Art 93 (so that the Art 94(2) declaration is made in respect only of the
common law provinces and territories of Canada). The differences between English and
Scots sale of goods law, as expressed in the Sale of Goods Act 1979, are in comparison quite
minor.
279 This occurred on 12 March 2003 in the case of Iceland (as regards Norway, Sweden,
Denmark and Finland) after it had become a Contracting State.
280 See also the discussion of the impact of this reservation on the Rome Convention
above, paras 13.83-85. See further Ch 15, n 9.
281 The other states are the Czech Republic, Slovakia, Singapore and St Vincent and the
Grenadines.
282 Law Com No 250 (1997), Thirty-Second Annual Report, para 2.17 (referring to a response sent
to the Department of Trade and Industry and dated 28 November 1997). We are grateful to the
Law Commission for letting Michael Bridge see this response.
283 At the 1980 diplomatic conference, some delegates proposed the deletion of Art 1(1)(b):
Honnold, n 27 above, at 457-459.

H. UN Convention on the International Sale of Goods 1980 977
above, Article 1(1)(b) is best regarded as a secondary gateway into the
application of the Vienna Convention if the Convention does not already
apply, pursuant to Article 1(1)(a), by virtue of the buyer's and seller's
places of business in different Contracting States. Obviously, the more
states that accede to the Convention, the less likely it is that a forum will
have to consider Article 1(1)(b) and its own rules of private international
law. Given the success of the Convention, the Article 95 declaration
represents a dying problem.
A number of objections have been expressed to the introduction of the 16.129

Vienna Convention by means of the choice of law process provided for in
Article 1(1)(b). First, there is an element of distrust expressed of the choice
of law process. It is a common observation that courts applying foreign
law very frequently make mistakes in determining and applying it. In
some cases too the choice of law rule, especially in less sophisticated legal
systems, is difficult to discern. Against these criticisms, it may be said that
much good work has been done in the cause of concluding conventions
laying down clear and systematic choice of law rules.' Moreover, if the
choice of law process leads to a Convention State's law, the law that is
applied for the purpose of Article 1(1)(b) is the Vienna Convention and
not some obscure or misunderstood body of domestic sales law. Uniform
law is designed to deal with the problem of misapplication.
Other objections that have also been expressed to Article 1(1)(b) are that it 16.130
introduces an undesirable measure of complexity, and that it amounts
to an excessive concession on the part of Contracting States towards
non-Contracting States. Taking first the complexity argument, the rules
of private international law of the forum may lead to different laws for
different aspects of the contract that are subject to separate laws. The
forum might select one law to deal with matters of formation and another
law to deal with essential validity. The result might be that the Vienna
Convention is selected for one of these matters with the law of a non-
Contracting State for the other. A number of points can be made here.
First, the Vienna Convention is not an integral wholewith rules on
formation that are so closely interwoven with those on the substantive
law of sale that neither works properly without the otherand so on that
account ought not to be separated. In Article 92, declarations are per-
mitted so that a Contracting State can opt out of either Part II or Part III
of the Convention. Second, if a Contracting State has separate rules of
private international law for formation and the substantive law of sale,
e.g. the Rome Convention on the Law Applicable to Contractual Obligations 1980: the
Inter-American Convention on the Law Applicable to International Contracts 1994 (Mexico
City).
Article 1(1)(b) will not further complicate the matter. All that will happen
will be that the Vienna Convention will be substituted for a national law
further to one of these rules. Third, such a separation, or depecage, of
different contractual aspects is permitted under the Rome Convention
which, fourth, demonstrates a tendency to subject those different aspects to
the same applicable law.
16.131 The other main argument behind the Article 95 declaration concerns
the balance between Contracting and non-Contracting States and was
expressed by the US President in his Message to the US Senate.'
Reducing the argument to its bare essentials and assuming that an Article 1 (1)
(b) declaration were not made, if a US court were led by its rules of private
international law to the law of one of its own states, then it would be bound to
apply the Vienna Convention. If, however, those rules led to the law of a
non-Contracting State (say, Dystopia), then Dystopian law and not the
Convention would be applied_ US law in the shape of Article 2 of the
Uniform Commercial Code, in other words, would be sacrificed without a
corresponding sacrifice on the part of Dystopian
16.132 This reasoning is, to say the least, odd in that it assumes that national sales
law in the US is superior to the Convention so as to prompt the question
why did the United States accede to the Convention in the first place. In
addition, a US court might under Article 1(1)(a) apply the Convention in
circumstances where a Dystopian court, despite the residence of buyer
and seller in different Convention countries, would have applied the law
of a non-Contracting State because, for example, it was the law of the
place of performance of the contract (assuming that this is the applicable
Dystopian choice of law rule). The sacrifice argument could thus also be
made in respect of Article 1(1)(a). In addition, a US court might some-
times, where Article 1(1)(a) does not apply, be led by its rules of private
international law to the law of another Contracting State whose domestic
sales law it would have to apply because of the Article 95 declaration.
There is no question of Article 2 of the Uniform Commercial Code being
preserved in this case and no obvious reason why the Convention should
not be applied if that Contracting State has not itself made an Article 95
declaration. The case for fracturing uniformity by means of this declar-
ation is not a strong one.
16.133 In addition to the rational underpinning of Article 95, there is the dif-
ficult), of determining how far the declaration goes. The difficulty centres
mainly on the position of foreign tribunals in the event that they deal
with a case involving a US element. The following two examples can be
US Senate Treaty Doc No 98-99, 98th Cong, 1st Sess 1-18 (1983), reprinted at (1984) 22 Intl
Legal Materials 1368.
considered. First, a Belgian court is seised of a dispute between a New

York seller and an Irish buyer where the contract contains a clause selecting
Belgian law as the applicable law. The second example is a vari-
ation on the first, differing only to the extent that the contract contains a
choice of law clause in favour of New York law.'
Taking the first example, if the dispute had been litigated in the New York 16.134
courts, the Vienna Convention could not have been applied under Article
1 (1) (a), the reason being that the Irish buyer is not resident in a Con-
tracting State. In consequence, the New York court would take notice of
the Article 95 declaration of the United States and would, on the face of it
at least, apply Belgian domestic law. At this point, the question should
seriously be asked: what is the relevant Belgian domestic law for dealing
with international sales of this type? The argument was advanced at the
beginning of this chapter that, even under Article 1(1)(b), the Convention
could be regarded as having been incorporated in the domestic law of the
state whose law is applicable. If the New York court were prepared to take
this point, then it could sensibly confine the Article 95 declaration to cases
where its own law, namely, Article 2 of the Uniform Commercial Code, is
being preserved. The extent to which it can take this point, however,
might depend upon the view that a Belgian court might take when seised
of this dispute.
The attitude of the Belgian court, it is submitted, turns upon how far 16.135 the
US declaration is interpreted as going. Belgium has made no such
declaration, and the declaration made under Article 95 merely recites
that the United States shall not be bound by Article 1(1)(b). Nevertheless,
there has to be considered the extent to which, as a matter of treaty law,
non-Reserving States should respect the reservations (including the dec-
larations) of Reserving States. The Article 95 declaration is one that is
expressly provided for by the Vienna Convention, which means that it
does not require any subsequent acceptance by other Contracting
States.' The effect of that declaration is to 'modif[y] for the Reserving
State in its relations with [other parties] the provisions of the treaty to
which the reservation relates to the extent of the reservation . It
should also be remembered that a reservation (including a declaration)
'purports to exclude or to modify the legal effect of certain provisions of the
treaty in their application to that [Reserving] State' .' It is submitted that a
Belgian court applying Belgian law in a case involving a US contracting
286 In the reverse case of the Irish seller and the New York buyer, the Belgian court would by
its own private international law rules be led to Irish domestic law since Ireland is not a
Contracting State.
287 Art 20(1) of the UN Convention on the Law of Treaties 1969.
288 ibid, Art 21(1)(a). 285 ibid, Art 2(1)(d). Emphasis added.
party is not concerned with the application of the provisions of the Vienna
Convention to the United States or any of its states. The Convention is
being applied to private contracting parties and the courts of New York are
not being implicated in the application of the Convention to those parties.'
Moreover, the fact that the dispute might have led to a different result had it
been tried in the New York courts makes no difference at all to this
analysis. It should however be noted that Germany, when it acceded to
the Convention and although it did not itself make a declaration under
Article 95, nevertheless declared that it would not apply Article 1(1)(b) in
respect of any state that had made a declaration that that state would not
apply Article 1(1)(b).291 Apart from the fact that this appears to be itself an
unauthorized declaration, its meaning is unfathomable. Would a
German court placed in the position of the Belgian court refrain from
applying the Convention, on the ground that it would be applying Article
1(1)(b) in respect of the United States because one of the parties had a place of
business there?
16.136 This leaves the slightly more difficult case of the Belgian court, dealing
with a dispute between a New York seller and an Irish buyer, whose rules
of private international law lead it to New York law. What makes this case
harder is first that the question is squarely posed whether the United
States, having made an Article 95 Declaration, can be regarded as a
Contracting State for the purpose of Article 1(1)(b) and Belgian private
international law rules. On this point, it is submitted that the Belgian
court has been led to the law of a Contracting State. Unlike Article 92
declarations, Article 95 does not state that the Declaring State shall not
be regarded as a Contracting State under Article 1(1)(b): the absence of
similar wording in Article 95 is telling. But the question must still be
asked, for the purpose of treaty law, whether the action of the Belgian
court, in applying the Convention under Article 1 (1) (b), involves the
application of the Convention to the United States or any of its states. For
the reasons given above, it is submitted that the answer is no. This finally
leaves the question whether the Belgian court in applying the Convention
is purportedly applying New York law, further to its rules of priyate
international law, or is instead applying the Convention as part of its
own domestic law. Earlier in this chapter, the latter view was advanced in
relation to the process involved in Article 1(1)(b).' Consequently, the
Belgian court should simply apply the Vienna Convention: Belgium did
Nor, it is submitted, would the New York or other US courts be subject to the Con-
vention by way of Art 1(1(b) just because a foreign judgment based on the Convention was
being enforced: the enforcing court would not go behind the judgment save in the most
exceptional cases.
See www.uncitral.org (Status of Texts). 292 See above, paras 16.28-31.
not enter an Article 95 reservation and its courts should not behave as
though it had done. If, however, the former view is correct, then it has an
awkward consequence. The Belgian court, applying the provisions of the
Vienna Convention, could not be said to be applying New York law if it
applied a law (the one contained in the Convention) which is not the law
designated by New York for international sales of this type. If this is the
accurate way to depict the process, and if it does not transgress the
prohibition on renvoi in the Rome Convention,' then the Belgian court
should apply Article 2 of the Uniform Commercial Code as incorporated in
New York law. Nevertheless, the better view is that the Belgian court is
applying the Vienna Convention under Article 1(1)(b) as part of Belgian law
and not as part of New York law. Consequently, the Belgian court has no cause
to turn to Article 2 of the Uniform Commercial Code.
This leaves Article 96 of the Vienna Convention, by which a Contracting 16.137

State, whose legislation requires contracts of sale to be concluded or
evidenced in writing, may make a declaration that certain provisions of
the Convention do not apply where any party has his place of business in
that state.' The provisions in question are Article 11, the general rule
dispensing with the need for writing or written evidence in the formation
and enforcement of contracts, Article 29, which allows for contracts to be
modified or terminated informally, and the whole of Part II, which deals
with the process of contractual formation and contains rules that could
295
conflict with any national writing requirement.
There is first of all the relatively minor problem of determining which 16.138
states are entitled to make the declaration. On a literal reading, it would
be only those states that required all contracts of sale to be concluded or
evidenced in writing, which could hardly be correct in view of the com-
mon exception for small-scale transactions. At the other end of the scale,
most if not all states have legislation requiring writing for some sale
of goods transactions, even if they are only consumer transactions. The
sensible interpretation in a Convention concerned with commercial sales
is to read Article 96 as confined to states that require at least some
commercial sales to conform to a writing requirement, but the sensible
2'1' Art 15.

294 Declarations have been made by Argentina, Belarus, Chile, China, Estonia, Hungary,
Lithuania, Russia and Ukraine. This declaration, though made 'in accordance with Art 12', will
be referred to hereinafter as the Art 96 declaration. A French court has stated that
contracting parties are not free to exclude Art 12: Cour d'appel de Paris of 6 November 2001 (see
witz.jura.uni-sb.de/CISG/decisions/061101v.htxn ).
e.g. Art 18(1) in so far as it permits offers to be accepted by conduct.
conclusion is to recognize that there is no real issue here since only states with
a serious writing requirement would ever wish to make an Article 96
declaration. A further, odd feature of Article 96 is that a state requiring
writing in the formation of contracts, but not with regard to their modifi-
cation or termination, could make a declaration in respect of Article 29,
which deals only with modification and termination.
16.139 The Article 96 declaration is unclear in its effect for a number of reasons.
The consequence of the declaration is that the relevant rule of informality
'does not apply where any [sic] party has his place of business' in the
Declaring State. The purpose of Article 96 is obscure: is it designed to
protect contracting parties steeped in a culture of written contracts and
liable to be surprised by informal obligation, or does it exist for the sake
of a judicial system that is ill equipped to handle the enforcement of
unwritten contracts? Consider the following two examples. First, the
contracting parties are before a forum in a state that has made an
Article 96 declaration. Neither party, however, is resident in that state.
The Declaring State is treaty-bound to enforce an informal contract of sale
concluded between those parties, or an informal modification, and the
unease of its courts in handling informal contracts is not a relevant con-
sideration, since the Article 96 declaration does not apply in such a case. If
one or other contracting party has its place of business in another state
that has made an Article 96 declaration, the situation is no different from
the case of a forum in a state that has not made an Article 96 declaration
and will be considered below. The second example concerns a party that
has a place of business in a Declaring State and contracts with another
party, which does not have a place of business in a Contracting State,
on terms providing that the applicable law is the law of a Contracting
State that is not the Declaring State. Although the parties are commercial
entities and may by their choice have clearly evinced an intention to
avoid formal requirements imposed by the law of the Declaring State, that
state as the forum state will not enforce the contract or the modification
(as the case may be).
16.140 If a non-Declaring State is the forum state, this raises the question of
how far states should go in recognising the Article 96 declaration of
another state.296 Article 96 is not confined expressly to those cases where
proceedings under a contract of sale are brought in a state that has made
an Article 96 declaration. If the declaration were seen as expressing the
forensic and evidentiary policy of the Declaring Statewhich, as seen in
The same issue, discussed in relation to Art 95 above, of the extent to which states are
bound to recognize and give effect to the reservations of another state arises here too.
the example above, is not fully protected by the Article 96 declaration
then the non-Declaring State would be at liberty to disregard the
declaration of another state. On the other hand, it is certainly not easy to see
how the declaration pursues a policy of protecting the Declaring State's
citizens from inadvertent contractual commitment. For one thing, the
contracting party seeking to enforce the contract or its informal
modification may be a citizen of the Declaring State. Article 96 amounts to a
compromise that was necessary to prevent the Convention from running
aground during the legislative process. It is anathematic to one of the key
features of the Vienna Conventioninformalityand so should not be
expansively interpreted. It is therefore submitted that it should be confined
in its scope to actions brought in the courts of a Declaring State.
Nevertheless, as will now be seen, too much ought not to be made of the
scope of the Article 96 declaration. -
Article 96 merely disposes of a substantive rule (or rules) in the Vienna 16.141
Convention without supplying any others or the means of discovering
others. In particular, if the forum state had to obey the Article 96
declaration of another state, it is under no obligation at all to apply any
domestic writing requirement of the Declaring State to the contract?' The
way is open for the application of a private international law rule of the
forum to determine the requirements of form. As seen above, the Hague
Convention 1955 contains no rule at all for formal validity. Its 1986
successor provides that a contract is formally valid if it either satisfies the
formal requirements of the applicable law or of the law of the country
where the contract was concluded, or of the law of the country where
either party is located (in those cases where they are located in different
states).' But it then goes on to provide that a state may make a reserva-
tion' in respect of this choice of law rule for formal validity, provided
that either party has its place of business in that state. Not only is the
Reserving State exempt from applying the Convention to the formal
validity of the contract,' but the Convention itself is stated not to apply
to formal validity questions.' This is tantamount to providing that,
cf to the opposite effect, which must be wrong, the High Arbitration Court of the
Russian Federation of 16 February 1998 (translated at www.cisg.law.pace.edu/cases/
980216r1.html). A proposal to require the implementation of the Declaring State's formal
requirements was rejected: Doc A/CN.9/SR 208 (referred to in Schlechtriem, 699).
pis Art 11(1), (2).
This word, rather than declaration, is used in the Hague Convention 1986 to deal with the
same material as is dealt with by declarations in the Vienna Convention.
50 Art 21(1)(c).
3' Art 11(3). But the Convention does not in terms deal with modification and termination as
regards forms.
where either contracting party is resident in a Reserving State, no state is a

Contracting State for the purpose of formal validity. The Hague Con-
vention 1986 is therefore significantly clearer than the Vienna Convention in
showing the effect of a treaty reservation on states that have not made the
reservation.' The Rome Convention displays the same catholic view
towards the selection of the law governing the formal validity of contract,
namely, either the applicable law of the contract or the law of the country
where the contract was concluded or the law of the country where either
party was resident if they were resident in different countries.' It differs
however from the Hague Convention 1986 in that there is no permitted
reservation for formal validity. Consequently, so far as the Rome Con-
vention applies, the effect of an Article 96 declaration by a State Party to the
Vienna Convention will be minimal.
Article 28 and Specific Performance

16.142 Although Article 28 of the Vienna Convention is not as such based on a
declaration, it exhibits some of the characteristics of a declaration and so
can conveniently be dealt with here. The starting point is that the primary
remedy for non-performance in the Convention is not damages but
the requiring (or enforcement) of performance obligations. This departs
from the common law philosophy of damages as the primary remedy and
specific performance as exceptional.' One means of protecting common
law susceptibilities might have been to permit states to make a declaration
to the effect that their courts should administer the remedies in the
Convention in line with the prevailing national philosophy, but it would
have been difficult to draft a declaration that would have sufficiently fed
into the text of Part III of the Convention. There is instead Article 28 which
does not depend upon a declaration to be made and gives national courts
flexibility in administering the Convention in such a way as not to upset
the settled domestic order. The outcome of this discretion given to certain
national courts is not at all unlike the outcome of a declaration to similar
effect.
16.143 Article 28 provides that a court is 'not bound' to enter a judgment for
'specific performance', in those cases where one contracting party has the
right to require performance of the other, unless it 'would do so under its
See above, paras 15.106-108, for 'discussion of the formality provisions of the 1986
Convention and of the formalities reservation.
3' Art 9; on which, see above, paras 13.256-258.
'4 See also the discussion of Art 10(1)(c) of the Rome Convention, above, paras 13.205-
206.
own law' in respect of 'similar contracts of sale' that are not governed by
the Vienna Convention. In those cases where the court exercises the
discretion,' it is not immediately clear whether the court in departing
from uniform law simply applies the law of the forum, as proposed by an
American court,' or engages in the choice of law process. The purpose of
Article 28 being to protect the domestic curial process, it is submitted that the
right approach is to apply the law of the forum ('its own law'). The next
and related issue then is to identify 'similar contracts of sale'. It is
submitted that the forum should simply 'domesticate' the contract for
present purposes and treat it as though all parties and features were
national, rather than look for the narrower case of an international sale of
goods contract where the parties have opted out of the Convention or which
predates the Convention.'7 In the case of English law, examples of specific
performance of sale of goods contracts are few and far between, the most
likely cases involving goods such as ships and aircraft whose sales stand
outside the Vienna Convention in any event.
The final issue, and the most difficult, relates to which lawthe uniform 16.144 law
contained in the Convention or the law of the forumdefines
'specific performance'. The drafting history of the Convention' reveals
the common law impetus for Article 28. In addition, Article 28 itself is the
only place where the expression 'specific performance' is used. Elsewhere,
the Convention speaks of requiring performance, which brings out a
point that in the past has so bedeviled attempts to compare the avail-
ability of specific performance in the civil law and common law. The
more expansive availability of 'specific performance' in the civil law is to a
large extent due to the more expansive definition of what constitutes spe-
cific performance (enforced performance or direct execution or similar
expressions). For example, a buyer to whom goods are not delivered and
whose damages are measured by the cost of acquiring replacements
might be seen as enforcing the contract as in some way an 'agent' of the
seller. Or an action by the seller to recover the price of goods might also be
seen as specific performance.
The significance of defining the scope of specific performance is that, it is 16.145
submitted, contrary to the normal rule that Convention terms are defined
under the Convention in an internationalist way,' in this one case
the requirements of internationalism and uniformity point in exactly
There is only one reported case under Art 28. See CLOUT No 417 (US).
ibid: 'Simply put, (Art 283 looks to the availability of such relief under the UCC'. 3p7
306
A range of examples that would anyway lack critical mass.

308 Honnold, n 27 above, at 525-526 (First Committee). Art 7(1).
the opposite direction. It is no accident that specific performance is
mentioned only in this one place. A common law court, it is submitted, if
uneasy about the Convention's rules on the (easier) recovery of the price'
or the recovery of damages, not according to the market but instead
according to the acquisition cost of replacement goods,' is not at liberty to
revert to domestic law but must interpret 'specific performance' as it is more
narrowly understood in domestic law. Any other approach would unduly
exploit the 'quasi-declaration' in Article 28.
7. LIMITATION PERIODS AND INTERNATIONAL SALE

16.1 46 It was stated earlier in this work that the matter of burden of proof was
treated under the Rome Convention, and in case law under the Vienna
Convention as a matter of substantive rather than procedural law.' Prior
to the Foreign Limitation Periods Act 1984, limitation periods were
regarded in English law as procedural matters for the law of the forum.
However that may be, the UN Convention on the Limitation Period in
International Sale of Goods 1974 (the Limitation Convention) imposes a
uniform limitation period (four years from the date of breach)313 and
rules' operating in lieu of the choice of law process,' so that the limits
of the Convention have to be determined. The Limitation Convention
complements the Vienna Convention and indeed applies in the same
circumstances as it, namely, when the contracting parties have their
places of business in different Contracting States or in different states
where the rules of private international law of the forum lead to the law
of a Contracting State as applicable to the law of sale.' The Limitation
Convention does not direct Contracting States to treat limitations as either
a matter of substantive or procedural law, and so like the Vienna Conven-
tion displays no control over a Contracting State's choice of law process.317
The range of excluded sale of goods contracts in the Limitation Conven-
tion is the same as in the Vienna Convention;" the treatment of contracts
3' Compare s 49 of the Sale of Goods Act 1979 and Art 62.
3" Compare s 51 of the Sale of Goods Act 1979 and Art 75. 312 Art
14(1) of the Rome Convention; see above, para 13.41. 313 Arts 8,
9(1) and 10(1).
314 The content of these individual rules fall just as much outside the scope of this chapter as
do the substantive rules in the Vienna Convention itself.
3' To date, the Convention has been adopted by 24 states, of which 18 states have adopted
both the 1974 Convention and its 1980 Protocol (see Arts 43 bis and 43 ter). References to
provisions of the Convention are to the Convention as supplemented by the 1980 Protocol.
316 Arts 1 (1), 2(a) and 3. The second head
was added by the 1980 Protocol to the Convention.
317 But note that the Rome Convention, in Art 10(d), treats limitations as a matter for the
applicable law (as opposed to the law of the forum); see above, para 13.240.
3' Art 4 of the Limitation Convention; Art 2 of the Vienna Convention.
IL LIN Convention on the International Sale of Goods 1980 987
as other than sale of goods contracts because services or labour are
supplied along with the goods is the same in both instruments.' Liability in
respect of personal injuries and death is also excluded by both conven-
tions.32 The Limitation Convention also has to be interpreted in an inter-
nationalist spirit/3' but there is no provision for dealing with gaps in this
Convention corresponding to Article 7(2) of the Vienna Convention. Art-
icle 7(2) appeared late in the day and at a time when the Limitation Con-
vention had been concluded several years earlier. In any case, there is a
greater need for a provision like Article 7(2) in a convention that covers a
much broader field than limitation of actions.
The Limitation Convention permits declarations of the type that are also 16.147
allowed under the Vienna Convention, notably those concerning states
with more than one territorial law' and groups of states with closely
related laws.' As in the Vienna Convention, the stated declarations are
the only ones permitted, and reservations and declarations are assumed
to be the same thing.' There are also declarations not to be found in the
Vienna Convention. First, a state may declare that it will not apply the
Limitation Convention to actions to annul the contract.' This appears
to avoid any difficulties concerning the effect of a state's declaration
on other Contracting States since it pertains only to the way that the
forum of the Declaring State applies the uniform law. No definition
is given of 'annulment'. This expression does not appear in the Vienna
Convention, which uses 'avoidance' to signify termination for breach.
One may infer that annulment refers to the processhowever it might be
described in domestic law termsfor setting aside contracts for reasons
of invalidity. It would seem to follow that the forum state controls the
characterisation of annulment. Similarly, a declaration that affects only
the forum in the Declaring State is to be found in Article 36, by which
courts may preserve their freedom to raise the issue of limitation even if
the litigants themselves do not.'
The Limitation Convention contains a declaration provision identical to 16.148 that

found in Article 95 of the Vienna Convention,' by which the private
international law gateway into the application of the Convention is
closed.' It contains a give way provision that is identical to the one found
339 Art 3 of the Vienna Convention; Art 6 of the Limitation Convention.

320 Art 5(a) of the Limitation Convention; Art 5 of the Vienna Convention. Art 5(b) of the
Limitation Convention goes further than the Vienna Convention and excludes all nuclear
damage caused by the goods.
321
Art 7. " Art 31. 323 Art 34. Art 39. 325 Art 35.
326 The rule that it is for the litigants to raise the matter is to be found in Art 24. 327
Art 36 bis.
329 See the above discussion of Art 95 of the Vienna Convention.
in Article 90 of the Vienna Convention' and a declaration is permitted in
order that the state can redefine a contract of international sale of goods so that
it accords with the definition of international sale of goods in an existing
convention to which the Declaring State is a party.'
Art 37.
39
The declaration provision appears to be for the benefit of States Parties to one or both of the
Hague Conventions of 1964 (containing ULIS and ULF).

Uniform and Harmonized Sales Law

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Excerpt from James J. Fawcett, Jonathan M.

Harris & Michael Bridge, "International

Uniform and Harmonized Sales

1. CHOICE OF LAW AND UNIFORM LAW DISTINGUISHED

Hereinafter, Vienna Convention. It is common to abbreviate this Convention as the CISG

2. FEATURES OF UNIFORM LAW

6 For an unfortunate recourse to national considerations in interpreting the Vienna Con-

Art 249 of the EC Treaty. 1 Art 249 of the EC Treaty.

itself operating from within a directive, cannot be given an autonomous European

Directive (or rather its transposed equivalent) and the application of

4. HARMONIZED LAW AND CHOICE OF LAW

II. THE UNITED NATIONS CONVENTION ON THE

1. THE HISTORY OF THE VIENNA CONVENTION

1966 of the United Nations Commission on International Trade Law

2. THE USE OF CHOICE OF LAW IN DETERMINING THE SCOPE

The Uniform Law on the International Sale of Goods

16.15 This universalist stance of ULIS reflects (subject to permitted declarations)

Application of the Vienna Convention

According to Article 1(1) of the Vienna Convention: 16.17

This Convention applies to contracts of sale of goods between parties whose

16.22 A final preliminary point to consider before Article 1 is examined in detail

Discussed below, paras 16.128-136. '6 Art 93.

Article 1(1)(a) and Dual Contracting State Residence

An Incomplete Rule of Private International Law?

Article 1(1)(b) and Private International Law

e.g. the prohibition on renvoi in Art 15 of the Rome Convention.

How the Forum Applies the Convention under Article 1(1)(b)

The Place of Business

Only one party aware off oreign place of business

Locating the place of business

16.38 It may not be straightforward to apply the closest connection test in

" Art 10(2).

Place of business and commencement

3. THE USE OF PRIVATE INTERNATIONAL LAW IN FILLING

The aim of this provision is to maintain the Vienna Convention as inter-

16.44 According to Article 7(2):

Private International Law and Interpretation

's See below, paras 16.52, 16.56-57, 16.61.

Defining the Scope of the Convention

The Unidroit Principles of International Commercial Contracts

98 This is discussed further below, paras 16.83-95.

16.51 Nevertheless, like other bodies of a similar character,' whether or not

101 MJ Bonell, 'The UNIDROIT Principles as a Means of Interpreting and Supplementing

Unidroit Principles and usage

Rosen, n 100 above.

binding usage.' Usage, of course, as incorporated pursuant to Article 9 (2)

Tribunal references to Unidroit Principles

payment at the place of payment).

General Principles on which the Convention is Based

In order to determine the potential of private international law under 16.56

16.58 It might be also permissible to invoke the principle of waste avoidance in

Another example of an immanent general principle may be reliance pro- 16.59

Hamm 9 June 1995 (translated at www.cig.law.pace.edu/cisg/wais/db/cases2/

contract: there is no requirement of consideration to create a binding con-

Exclusion Clauses and Penalty Clauses

131 The EU Directive on Unfair Terms in Consumer Contracts is certainly capable of

137 The opening flush.

entitlement, such intention being absent in many penalty clause cases. In

P Koneru, 'The International Interpretation of the UN Convention on Contracts for the

148 ICC Court of Arbitration (No 7585 of 1992) (http://cisgw3.law.pace.edu/cases/

under the English law of sale.

Validity and Property

155 Art 35(1). 156 Ch 18 below. 157 Art 30.