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The Modest Role of Good Faith in Uniform Sales Law

39 Pages Posted: 5 Feb 2014 Last revised: 23 May 2014

Steven D. Walt

University of Virginia School of Law

Date Written: February 1, 2014

Abstract

Most of the conventions produced by UNCITRAL since 1980 share a certain boilerplate. Included in this treaty boilerplate are provisions that require the convention’s contents to be interpreted in good faith and settled in certain cases in accordance with the convention’s underlying general principles. Courts and scholars increasingly find that these underlying principles include a requirement of good faith. The United Nations Convention on Contracts for the International Sale of Goods (CISG) has become the template for the good faith directive in UNCITRAL conventions. Focusing on the CISG, this paper argues that good faith has a limited role, both in the CISG’s content and its application by courts and arbitrators. The argument consists of three claims. First, the CISG has no principle of good faith binding on the contracting parties under Article 7(1)’s good faith directive. Second, although there is a tolerably precise general principle underlying a number of the CISG’s provisions, it is not one of good faith. The principle instead is one of contracting-cost reduction: the requirement that parties reduce the cost of concluding and performing their contract when feasible. Third, case law relying on the CISG’s good faith directive or a principle of good faith is relatively infrequent and the reliance when it occurs is suspect. Together these claims suggest that good faith, whether as part of the directive or underlying principle, has a modest role in the CISG. Parts I-III of the paper describe and defend the three claims. Part IV argues that good faith’s modest role in the CISG, although controversial, is a good idea. A conclusion describes the implications of the limited place of good faith in contract interpretation and performance in UNCITRAL’s conventions.

Suggested Citation

Walt, Steven D., The Modest Role of Good Faith in Uniform Sales Law (February 1, 2014). Virginia Public Law and Legal Theory Research Paper No. 2014-08. Available at SSRN: https://ssrn.com/abstract=2390284 or http://dx.doi.org/10.2139/ssrn.2390284

Steven D. Walt (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
804-924-7930 (Phone)
804-924-7536 (Fax)

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