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Abstract:
The posting contains drafts excerpts from a forthcoming new (4th) edition of John Honnold's treatise Uniform Law for International Sales under the 1980 United Nations Convention. The posting is comprised of new materials proposed to be inserted in the discussion of certain rules governing the applicability of the United Nations Convention on Contracts for the International Sale of Goods (CISG). Those rules are found in Articles 1, 3 and 4 of the CISG, discussed in §§ 39-48 and 57-70 of Professor Honnold's treatise. The issues addressed in the excerpts include: the extent to which the Convention's rules of applicability respect distinctions between legally-distinct entities; the treatment of services employed in producing goods in determining, pursuant to CISG Article 3(2), whether a contract is predominantly a service transaction; whether the Convention governs claims asserted by a buyer against parties other than the buyer's direct seller, such as manufacturers and other remote distributors of the goods; and the extent to which the CISG governs the question of who bears the burden of proving the elements of its provisions.

Sales, International Sales, Sales Convention, United Nations Sales Convention, CISG, Applicability of CISG, Mixed Goods/Services Contracts, Burden of Proof, Manufacturers, Warranties

Abstract:
The posting contains drafts excerpts from a forthcoming new (4th) edition of John Honnold's treatise Uniform Law for International Sales under the 1980 United Nations Convention. The posting is comprised of new materials proposed to be inserted in the discussion of Article 79 (Exemption) of the United Nations Convention on Contracts for the International Sale of Goods. This article, discussed in §§ 423 et. seq. of Professor Honnold's treatise, is a force majeure provision providing that a party is exempt from liability for damages for a failure to perform when the requirements of the section are met. The new material included in this posting would address issues not discussed in the current version (3rd edition, 1999) of the treatise, or would amplify discussion of issues in the current edition. Those issues include: whether a seller that has delivered non-conforming goods may claim exemption under Article 79; the proper approach to situations involving an unexpected loss in the value of a return performance (frustration of purpose); whether a party to a transaction governed by the CISG can invoke domestic hardship doctrines; and whether Article 79 applies to situations involving initial impossibility (facts in existence at the time the contract is concluded).

Sales, International Sales, Sales Convention, United Nations Sales Convention, CISG, Exemption, Force Majeure, Excuse, Frustration of Purpose, Hardship, Mistake, Conformity of Goods

Abstract:
This is a draft of a paper that will appear in a forthcoming issue of the Boston University International Law Journal. This paper, which derives from comments delivered at a 2006 conference held at Istanbul (Turkey) Bilgi University, gives an overview of Part III, Chapter II, Section II of the United Nations Convention on Contracts for the International Sale of Goods (CISG). This portion of the Convention encompasses provisions addressing a number of critical issues, including the seller's obligations concerning the quality (Article 35), title (Article 41) and intellectual property aspects (Article 42) of goods sold in a transaction governed by the CISG, as well as a buyer's obligations to inspect delivered goods and to give notice of their failure to conform to those seller's obligations (Articles 38-40 and 43-44).

Included are extensive comments on three significant German cases that have applied these provisions of the Convention - the Mussels Case (decision of the Bundesgerichtshof, 8 March 1995, English translation available, the Stolen Automobile Case (decision of the Bundesgerichtshof, 11 January 2006, English translation available and the Ugandan Used Shoes Case (decision of the Landgericht Frankfurt, 11 April 2005, English translation available.

This paper concludes that the Mussels Case is a good (but not perfect) example of a court complying with the Convention's mandate to interpret the CISG from an international perspective and with the goal of maintaining international uniformity in its interpretation. The assessment of the Stolen Automobile Case in light of these factors is more mixed. The analysis of the Ugandan Used Shoes Case concludes that the court ignored those criteria, badly misinterpreted the provisions of the Convention, and perpetrated a gross miscarriage of justice.

Sales, International Sales, Sales Convention, CISG, Conformity of Goods, the United Nations Convention on Contracts for the International Sale of Goods

Abstract:
"Good faith" is a notoriously amorphous and variable concept. Thus it is the interpretation and application of the concept that provides the most important points of comparison for the good faith provisions of the Principles of European Contract Law ("PECL") and the Uniform Commercial Code ("UCC") . The UCC has been in force since the 1950's, and its good faith provisions have been applied in hundreds of cases. In contrast, the PECL is a new phenomenon and its good faith rules have not been applied to actual cases. The comment to PECL Article 1:201, however, includes five concrete illustrations of how the drafters conceive its good faith rule will operate, as well as other suggestions concerning the application of the good faith obligation to particular situations. This article explores how U.S. law, and the UCC good faith provision in particular, would apply to the factual examples adduced in the PECL comment. This discussion reveals mixed results. First, there exist some notable similarities in the operation of the good faith obligation under the PECL and the UCC. Second, there are some situations in which U.S. law would likely reach the same result as under the PECL by invoking doctrines other than good faith. Finally, there may be some important situations in which the outcome under U.S. law would probably diverge from that suggested by the comment to PECL Article 1:201. Although it is important to keep in mind the similarities in the good faith principles of the PECL and the UCC, it is also important to recognize that the divergent outcomes appear to reflect deep-seated differences in the legal cultures behind the two documents.

good faith, fair dealing, Principles of European Contract Law, PECL, Uniform Commercial Code, UCC, obligations, comparative law, honesty in fact, pre-contractual liability, culpa in contrahendo

Abstract:
This paper focuses on Articles 45, 46 and 28 of the CISG - provisions that, despite their importance in the substantive scheme of the Convention, have not generated a great deal of case law or controversy. Article 45, the lead provision of Section III ("Remedies for Breach of Contract by the seller") of Part III, Chapter II of the CISG, provides an overview or catalogue of an aggrieved buyer's remedies (Article 45(1)), along with a rule that coordinates buyers' remedies (Article 45(2)) and a rule of general applicability for all of the buyers' remedies (Article 45(3)). Article 46 provides for an aggrieved buyer's right to demand that the seller actually perform its obligations. Although it appears in an entirely different chapter of the CISG (Chapter I--"General Provisions"-of Part III of the Convention), Article 28 is intimately related to Article 46, because the former limits a court's obligation to enforce the rights granted under Article 46.

United Nations Convention on Contracts for the International Sale of Goods, CISG, U.N. Sales Convention, International Sales Convention, remedies, buyers' remedies, aggrieved buyer, breach of contract, seller's breaches, specific performance, damages, CISG Article 45, CISG Article 46, CISG Article 2

Abstract:
The co-authors propose awarding a Razzie' award for the worst decision on the United Nations Convention on Contracts for the International Sale of Goods ("CISG") to the U.S. (federal) district court decision in Raw Materials Inc. v. Manfred Forberich GmbH. We argue the Razzie is deserved because of the decision's bald-faced violation of the interpretational methodology required (as a matter of U.S. treaty obligations) in approaching the CISG - specifically, its use of U.S. domestic law as a guide to interpreting the Convention, in clear violation of the requirement in CISG Article 7(1) that the treaty be interpreted from an international perspective and with a view to maintaining uniform application wherever the Convention is appli8ed.

The co-authors had previously outlined certain criteria for assessing the 'precedential value' of individual CISG decisions rendered by national courts; in this piece we combine our criteria in a short-list of five points (Section 2). On that basis, we explain why we would nominate the recent Forberich decision for the dubious worse-case distinction (Section 3). We argue for the nomination despite the stiff competition at the bottom of the CISG barrel, and despite the fact that the Manfred Forberich decision is no 'shoo-in' in light of how the case might have been decided if better (more persuasive) reasoning had been applied (Section 4). Lastly, we discuss how the more serious aspects of our (tongue-in-cheek) exercise might be of relevance for legal educators and the future practice of CISG law in the courts.

International Sales, Sales Convention, United Nations Sales Convention, CISG, United Nations Convention on Contracts for the International Sale of Goods, UNCITRAL, United Nations Commission on International Trade Law, Raw Materials Inc. v. Manfred Forberich GmbH, domestic law and the CISG, Article 7

Abstract:
This paper addresses two issues concerning the scope of the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), both of which have arisen in recent decisions applying the Convention: 1) whether requirements imposed by U.S. domestic sales law on attempts to disclaim implied warranties apply to attempts to derogate from the seller‘s obligations under Arts. 35(2)(a) & (b) CISG; and 2) whether burden of proof questions that are not expressly addressed in the CISG are governed by the general principles of the CISG. The paper defends the use of the distinction between substantive and procedural law in defining the scope of the CISG with respect to burden of proof issues, and in determining the whether the Convention provides for the recovery of damages for attorneys’ fees incurred to litigate a claim under the CISG. The paper concludes by arguing that defining the limits of the Convention‘s scope is critical to its success, and to the success of future attempts to create uniform international commercial law.

Commercial Law, International Commercial Law, Sales Law, International Sales Law, United Nations Sales Convention, CISG, Sales Convention, Scope of the CISG, Burden of Proof, Warranty Disclaimers, CISG and the UCC, Interpretation of the CISG, Interpretation of Treaties, Procedure vs. Substance

Abstract:
In this work, the authors reiterate and expand on their conclusion that the question of reimbursement for attorney fees incurred in the course of litigating a claim under the United Nations Sales Convention (CISG) is beyond the scope of the CISG, and is governed by domestic law. As discussed in the paper, this conclusion is in line with a recent CISG Advisory Council Opinion (Advisory Council Opinion No. 6) dealing with the calculation of damages under Article 74 of the CISG. We argue that relegating to domestic law the question of recovering attorney fees incurred during litigation over a CISG transaction reflects the likely view of the Convention's drafters that the recovery of such fees is a procedural matter beyond the intended field of a substantive sales law treaty. The Advisory Council Opinion, while agreeing with our result, objects to and rejects that reasoning. In this paper we (again) defend that approach.

United Nations Convention on Contracts for the International Sale of Goods, CISG, U.N. Sales Convention, International Sales Convention, CISG Article 74, breach of contract, damages, consequential damages attorney fees, recovery of attorney fees, loser pays, American rule, substance-procedure

Abstract:
Working independently, the co-authors of this article each reached the conclusion that the U.S. District Court's decision concerning attorney fees in Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Co., which was later reversed by the 7th Circuit, was wrong both in result and reasoning. The District Court had held that a party who successfully asserted a claim for breach under the United Nations Convention on Contracts for the International Sale of Goods ("CISG") could recover the costs of attorneys employed in litigating the claim as damages under Article 74 of the CISG. We argue that the CISG was not intended to address the question of recovering attorney fees, most likely because the drafters of the Convention conceived of the issue as a procedural matter outside the scope of the CISG. This is understandable. For example, the 'American rule' on attorneys fees - under which the each party to litigation must bear his or her own attorney expenses, regardless of who prevails in the litigation, unless a contract provision or statute provides specifically for a different result -- is generally understood as a rule of procedure applicable as lex fori. Indeed, as a matter of international practice the rules governing the recovery of attorney fees appear to be regarded as procedural in nature, even when - as is the case in most countries outside the U.S. - they provide for a 'loser-pays' regime that departs sharply from the 'American rule' in substance. As they are understood to fall in the procedural realm, the rules governing the recovery of attorney fees are assumed to be subject to domestic lex fori and not the CISG regime. Although some non-U.S. decisions applying the CISG appear to have interpreted Art. 74 as permitting a prevailing claimant to recover attorney fees as damages, those decisions generally have not approached the issue with the international perspective demanded by Art. 7(1) of the CISG; indeed, upon closer inspection several do not even stand for the proposition that attorney fees incurred during the course of litigation were recoverable as Art. 74 damages. The small number of sometimes-ambiguous and ill-reasoned precedents favouring an award of Art. 74 damages to cover attorney fees, furthermore, fades to virtual insignificance when compared to the vast - nay, overwhelming - majority of CISG decisions in which the recovery of attorney fees has apparently been treated, without comment by the deciding tribunal, exactly as we believe it should be - as a matter governed by the domestic law of the forum.

Sales, International Sales, Vienna Sales Convention, United Nations Convention on Contracts for the International Sale of Goods, CISG, Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Co., transnational litigation, commercial arbitration, Article 74, attorney fees, American Rule, loser pays