Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Chapter C.13: CISG

Franco Ferrari

I. Background and justification for unification efforts

If it is true, as has been suggested, that the unification of the law governing transnational commerce promotes the flow of international trade through the creation of certainty and predictability, the bedrock desiderata of any commercial law, let alone one that is applicable to transnational situations, then it is unsurprising that efforts have long been underway to unify the law governing the contract for the sale of goods (→Sale contracts and sale of goods), the mercantile contract par excellence, the ‘pillar of the entire system of commercial relations’ and, thus, the ‘lifeblood of international commerce’. From the very start, those unification efforts were focused on the creation of rules regarding contracts for the sale of goods linked to more than one jurisdiction. The goal was to create a set of rules that would allow one to overcome the consequences of the coexistence of different national legal systems characterized by country-specific rules, considered to be an impediment ‘to economic relationships which p. 338constantly increase among citizens of different countries; an obstacle above all for the enterprises that are involved in international commerce and that acquire primary resources or distribute goods in different countries which all have different law’.

As far as sales law is concerned, the need to draft such an internationally uniform set of rules was recognized as early as in the 1920s, when ErnstRabel (1874–1955) suggested starting with the unification of the law of international sales of goods. Upon this suggestion, the International Institute for the Unification of Private Law, one of the international bodies promoting the unification of law, decided to undertake extensive studies in this field, which led, in 1935, to the first draft of a uniform law on the international sale of goods. After the Second World War, which had interrupted the aforementioned efforts, work resumed with a conference at The Hague in 1951. Other drafts followed, the last of which was discussed at the Diplomatic Conference held at The Hague in April 1964. The 28 participating states approved two conventions, annexed to which were the Uniform Law on the International Sale of Goods (ULIS, Convention of 1 July 1964 relating to a Uniform Law for the International Sale of Goods, 834 UNTS 107) and the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF, Convention of 1 July 1964 relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, 834 UNTS 169).

These laws were not as successful as expected; indeed, they came into force only in nine countries. This led the United Nations Commission on International Trade Law, which was formed in 1966 with the task of promoting the progressive harmonization and unification of the law of international trade, to attempt the revision of the aforementioned Uniform Laws. But when it became apparent that a revision would not be successful without substantial modifications, a working group was established with the task of drafting a new text. Several drafts were proposed, the last of which – dating back to 1978 – was the one upon which the General Assembly of the United Nations authorized the convening of a diplomatic conference, held from 10 March to 11 April 1980 in Vienna. On that occasion, the CISG, the United Nations Convention on Contracts for the International Sale of Goods, was approved (1489 UNTS 3). It came into force on 1 January 1988.

II. Overview of the substantive rules

1. General rules and formation of contract

The CISG is divided into four parts. Although most substantive rules are contained in parts II (arts 14–24) and III (arts 25–88), dedicated to the ‘Formation of the Contract’ and the ‘Sale of Goods’ respectively, some substantive rules can also be found in part I on the ‘Sphere of Application’ (albeit not in part IV, dedicated to ‘Final Provisions’). Article 8, for instance, lays down rules of interpretation to be applied to all contracts and statements subject to the CISG. Furthermore, as mentioned earlier, art 11 lays down the rule of freedom from form requirements, which also is a substantive rule, which, unless otherwise indicated in the Convention, applies to all statements, and also governs the modification or termination of contracts governed by the CISG (art 29).

As far as the rules on formation of contracts are concerned, which apply to all contractual agreements covered by the CISG, including an agreement to terminate, modify or supplement an already existing contract, they only govern the external agreement. Issues not concerning the external agreement are, but for the form issue, not governed by the CISG and must therefore be determined according to the applicable domestic law. Thus, it is unsurprising that domestic law is applicable to some issues relevant for determining whether a valid contract formation occurred. This is true, for instance, as regards the legal capacity of a person and/or capacity to contract, as well as questions concerning defects of intent, such as duress, fraud and mistake (except for issues relating to mistake as to the quality of goods and to mistake as to the other party’s capacity to perform or the other party’s solvency, which are all governed by the CISG), and questions concerning the power of representation in the case of a contract concluded by an agent. The same is true for questions concerning the effect of a violation of a statutory prohibition.

In respect of the aspects of the formation of contract, the CISG follows the traditional scheme of contract conclusion through offer and acceptance. This does not mean, however, that other forms of getting to an agreement are excluded by the CISG. Hence, parties can get to a contract even if offer and acceptance are not clearly distinguishable, as long as there is an agreement between the parties.

p. 339As for the traditional offer and acceptance mechanism, it is dealt with in detail. Articles 14–17 set forth the contours of what constitutes an offer, while arts 18–24 deal with the acceptance and identify the moment of conclusion of the contract.

As regards the offer, it is a declaration of will addressed to one or more specific persons that is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance (art 14). This declaration, which is generally revocable, although it may also be irrevocable, either per the offer itself or per the offeree’s justified reliance (art 16), becomes effective when it reaches the offeree (art 15). And it is the offeree on whom the conclusion of the contract depends. The offeree may either reject the offer, which leads to the termination of the offer, even if it is an irrevocable one, when the rejection reaches the offeror, or accept the offer, which will lead to the conclusion of the contract.

For the acceptance to lead to the conclusion of the contract, the acceptance must generally – albeit not always, given that in limited circumstances the offeree may indicate acceptance by performing an act without the need to notify the offeror – reach the offeror (art 18), and this within a given period of time. Though sometimes argued, the acceptance, which the offeree may withdraw if the withdrawal reaches the offeror before or at the same time as the acceptance, does not, however, have to be ‘unconditional’. As can be derived from art 19(2), the acceptance can contain additional or different terms compared to those of the offer and still lead to the conclusion of the contract, provided that the additions or modifications do not materially alter the offer.

As for the moment of conclusion of the contract, it is the moment, already referred to, when the acceptance becomes effective (art 23), ie when the acceptance reaches the offeror in the ways referred to in art 24.

It is worth stressing that the question of whether standard contract terms are incorporated into a contract is also subject to the rules set forth in CISG part II. Consequently, these rules likewise govern the question of the battle of forms (to be solved on the basis of the last shot rule). In contrast, pursuant to art 4(a), domestic law is applicable to the question of whether standard contract terms that have been incorporated into a contract are valid, provided that under domestic law this issue is not to be decided on the sole basis of certain form requirements having to be met.

2. Rights and obligations of the parties

As mentioned above, the CISG does not expressly define the contracts for the sale of goods, but a definition can be derived from arts 30 and 53, setting forth the obligations of the seller and buyer respectively. As for the seller, the seller must deliver the goods, hand over any documents relating to them and transfer the property in the goods (→Property and proprietary rights), as required by the contract and the CISG. As for the delivery obligation, the CISG states that the seller must deliver the goods at the place fixed by contract or indicated by the default rules (art 31) and at the date fixed by or determinable from the contract or, absent such date, within a reasonable period after the conclusion of the contract (art 33). Furthermore, the seller must deliver goods which are of the quantity, quality and description required by the contract, and, except where the parties have agreed otherwise, which are fit for the purposes for which goods of the same description would ordinarily be used; are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract; possess the qualities of goods which the seller has held out to the buyer as a sample or model; are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods (art 35). The goods delivered by the seller must also be free from any right or claim of a third party based on industrial property or other intellectual property, of which at the time of the conclusion of the contract the seller knew or could not have been unaware, provided that the right or claim is based on industrial property or other intellectual property under the law either of the state where the goods will be resold or otherwise used, provided that certain conditions are met, or under the law of the state where the buyer has his place of business (art 42).

Where the seller delivers goods that lack conformity, the buyer who does not want to lose the right to rely on the lack of conformity has the burden to give notice to the seller either specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it, and in any case at the latest within a period of two years from the p. 340date on which the goods were actually handed over to the buyer (art 39), or specifying the nature of the right or claim of the third party within a reasonable time after he has become aware or ought to have become aware of the right or claim (art 43).

As for the buyer, the buyer must obviously pay the price for the goods and take delivery of them as required by the contract and this Convention (art 53). As regards the payment obligation, unless otherwise specified, the buyer must effect the payment obligation at the seller’s place of business, or, if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place (art 57). As for when payment has to occur, it is left to the parties to determine the time of payment (art 59). Absent such determination, the buyer must pay the price when the seller places either the goods or documents controlling their disposition at the buyer’s disposal in accordance with the contract and the CISG itself. Of course, the buyer is not bound to pay the price until he has had an opportunity to examine the goods, unless the procedures for delivery or payment agreed upon by the parties are inconsistent with his having such an opportunity (art 58).

It is worth pointing out that the loss of or damage to the goods after the risk has passed to the buyer does not discharge the buyer from the payment obligation, unless the loss or damage is due to an act or omission of the seller. As for when the passing of risk to the buyer takes place, it is an issue addressed in arts 67–9, with the default rule being that ‘the risk passes to the buyer when he takes over the goods or, if he does not do so in due time, from the time when the goods are placed at his disposal and he commits a breach of contract by failing to take delivery’ (art 69).

3. Remedies

As for the →remedies that are available to the parties in case of breach of contract, the CISG formally distinguishes between those available to the buyer in case of breach by the seller (arts 45–52) and those available to the seller in case of the buyer’s breach (arts 61–5). Despite this formal distinction, and there being some party-specific remedies (such as buyer’s possibility to reduce the purchase price where the goods delivered lack conformity – art 50), there are remedies that both the aggrieved seller and the aggrieved buyer can avail themselves of. Both the aggrieved seller and the aggrieved buyer can claim →damages (irrespective of any fault on the part of the breaching party) for any kind of breach of contract. Pursuant to the CISG, these damages consist of a sum equal to the loss, including the loss of profit, suffered by the aggrieved party as a consequence of the breach. The damages an aggrieved party may seek are, however, limited to those the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which that party then knew or ought to have known, as a possible consequence of the breach of contract (art 74). Where, however, the party who failed to perform any of his obligations proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences, that party will not be liable (art 79).

While any aggrieved party may claim damages irrespective of the gravity of the breach of contract, there are certain remedies that are available to the aggrieved party only where the breach is a fundamental one (thus clearly evidencing the CISG’s underlying principle of favor contractus). Pursuant to art 46(2), for instance, for the buyer to be entitled to require delivery of substitute goods if the goods delivered do not conform with the contract, the lack of conformity has to constitute a fundamental breach of contract (art 46(2)), even though specific performance is a remedy otherwise generally available to both the aggrieved seller and the aggrieved buyer (arts 46(1) and 62). Furthermore, both the aggrieved seller and the aggrieved buyer may avoid the contract only where opposing party’s failure to perform any of his obligations under the contract or the CISG amounts to a fundamental breach of contract (arts 49(1) and 64(1)).

Whether a breach amounts to a fundamental one is to be determined on the basis of art 25, pursuant to which:

A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.

p. 341At times it may be difficult for a given party to determine whether such a fundamental breach has occurred and, consequently, whether a party can avoid the contract. To create the necessary certainty, the aggrieved party may grant the breaching party an additional period of time of reasonable length for performance by the breaching party of his obligations. If the breaching party does not, within the additional period of time granted by the aggrieved party, perform his obligations, or if that party declares that he will not do so within the period so fixed, the aggrieved party may avoid the contract, and this irrespective of whether the initial failure to perform amounted to a fundamental breach (art 49(1) and 64(1)).

It is also worth mentioning that the CISG provides for a general right to interest on sums in arrears. Pursuant to art 78, if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under the CISG’s rules on damages. As for the interest rate, it is one of the matters the CISG is not at all concerned with and, therefore, must be solved by applying the interest rate to be determined via a private international law analysis.

III. CISG and private international law

1. General remarks

The rules referred to in the previous part all relate to substantive issues. This is unsurprising, as the drafters of the CISG, but this holds true also as regards those of the 1964 Hague Uniform Sales Laws, tried to achieve certainty and predictability by creating a uniform set of purely substantive rules, with the declared intention, among others, to avoid the need to resort to private international law.

However, the approach taken by the drafters of the CISG – creating a set of uniform substantive law rules (→Uniform substantive law and private international law) – while certainly able to promote certainty and predictability in international commerce, is not the only approach that may result in predictability and certainty. The drafting of uniform rules of private international law, an approach that is even much older than the aforementioned one, also does the same. Unlike uniform substantive law, which aims at guaranteeing that all parties from countries where the uniform substantive law is in force have equal access to the substantive law solutions, uniform private international law, by making sure that courts will apply the same legal rules no matter where the parties litigate the dispute, ‘assures a business entering into a contract with a foreign enterprise that no matter what forum a dispute is brought before, the uniform choice-of-law rules will apply the same country’s substantive law’.

The foregoing difference leads some commentators to – rightly – suggest that the unification of substantive law rules is, where at all possible, preferred over the unification of private international law rules, on the grounds that uniform substantive law rules are ‘of a higher level’ or ‘superior’ vis-à-vis uniform private international law rules. From a practical point of view, this means, inter alia, that whenever the court of a contracting state to a given uniform substantive law convention has to determine the substantive rules to apply to an international contract prima facie governed by that convention, it must resort to that convention rather than to its private international law rules. This result has been justified on two grounds: first, that the rules of a uniform substantive law convention, like the CISG, are more specific insofar as their sphere of application is more limited; and further, that they lead directly to a substantive solution, while resort to private international law requires a two-step approach, that is, the identification of the applicable law and the application thereof.

It must be pointed out, however, that the prevalence of uniform substantive law vis-à-vis private international law (irrespective of whether it is uniform or not), does not necessarily lead to the conclusion, incorrectly drawn by some commentators, that resort to private international law is irreconcilable with the uniform substantive law approach. This statement, not unlike similar ones suggesting that uniform substantive law can do away with recourse to private international law, is incorrect. For certainty and predictability in international commercial transactions to be attained, it is necessary to recognize that there is an unavoidable interplay between private international law and the CISG. In other words, the coming into force of the CISG, or any other uniform substantive law convention, cannot prevent resort to private international law altogether. Surprisingly, this seems not to have been understood by →UNCITRAL, as can easily be derived from the UNCITRAL Secretariat’s Commentary on the 1978 Draft p. 342Convention on Contracts for the International Sale of Goods (UN Doc A/Conf. 97/5 (14 March 1979), in United Nations Convention on Contracts for the International Sale of Goods, Official Records, UN Doc. A/Conf. 97/19 (United Nations 1981) 14–66), according to which one of the Convention’s principal goals is to ‘reduce the necessity of resorting to rules of private international law’. There are many instances, some more obvious than others, where resort to private international law is required.

2. Express references to private international law

Even a superficial reading of the CISG shows that the CISG’s uniform substantive rules do not preclude resort to private international law: the CISG itself expressly refers in two places (namely in arts 1(1)(b) and 7(2)) to private international law. Moreover, given the contexts in which reference to private international law is made, the importance of private international law for CISG-related transactions and problems becomes evident. In effect, where a contracting state has not declared an art 95 reservation – pursuant to which it will not be bound by art 1(1)(b) – art 1(1)(b) lets even the applicability of the CISG itself depend (where the CISG is not ‘directly’ applicable due to the parties having their relevant places of business in different contracting states to the CISG (art 1(1)(a)) on a private international law analysis; art 1(1) indeed states that the CISG ‘applies to contracts of sale of goods between parties whose places of business are in different states: . . . (b) when the rules of private international law lead to the application of the law of a Contracting State’, thus unambiguously making resort to private international law necessary even for the purpose of the CISG’s own applicability (where the art 1(1)(a) requirements are not met).

The importance of private international law for the CISG can also be derived from art 7(2), the CISG’s provision on gap-filling that refers to private international law as a means to determine rules on the basis of which to fill (some of) the CISG’s gaps. Aside from art 1(1)(b) and 7(b), there are other instances as well, albeit less apparent ones, when resort to private international law cannot be foregone.

Before, however, addressing those instances, it is worth pointing out that the concept of ‘private international law’ is not defined in the CISG. One has to wonder whether this means that the concept is to be interpreted, not unlike most other concepts used in the CISG, by having regard to the CISG’s ‘international character and the need to promote uniformity in its application’ – ie ‘autonomously’, that is, not in the light of domestic law – or whether the concept is one of those exceptional concepts that have to be interpreted ‘domestically’. In this author’s opinion, however, the concept at hand is one of the concepts which have to be construed in light of the applicable domestic law, as also expressly stated by various courts. The CISG ‘merely’ constitutes a substantive law convention and does not set forth any private international law rules. This leads one to conclude that where the CISG itself refers to ‘private international law’, it refers to a domestic concept of ‘private international law’; more specifically, it refers to the private international law of the forum. From what has just been said, it becomes apparent that whenever a court has to resort to private international law in the CISG context, it will have to resort to its own private international rules.

3. Limitations to the sphere of application as a reason for the need to resort to private international law

It is common knowledge that the CISG’s applicability is subject to various requirements in addition to the ones set forth in art 1(1)(a) and 1(1)(b). One such requirement is the CISG’s internationality requirement, which is set forth in art 1(1), pursuant to which the internationality depends solely on the parties having their places of business (or, where the parties do not have a place of business, their habitual residence) – at the time of the conclusion of the contract – in different states. Where this requirement is not met, or where that requirement is met but the internationality was not apparent 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 contract, the CISG will not be applicable per se, even if the contract’s performance involves different states. Rather, resort is to be had to private international law to determine which substantive law will have to be applied.

It is worth pointing out that not only is the CISG’s international sphere of application p. 343limited, but so is its substantive sphere of application, which means that where a given international contract falls outside that – limited – substantive sphere of application, resort is to be had to the private international law rules (of the forum) to determine which law applies.

As for the CISG’s substantive sphere of application, it is basically limited to contracts ‘pursuant to which one party – the seller – is bound to deliver the goods and transfer the property in the goods sold and the other party – the buyer – is obliged to pay the price and accept the goods’. While this autonomous definition, which is based upon arts 30 and 53, allows one to apply the CISG also to contracts for the delivery of goods by instalments, it does not allow one to subject distribution agreements, franchise agreements, leasing contracts, barter transactions etc to the CISG. Still, the CISG may also govern certain contracts which require further activities besides the traditional exchange of goods versus money (→Money and currency), as long, however, as that exchange remains the characterizing feature of the contract. This can clearly be derived from art 3, which extends the CISG’s applicability to the point that it may govern (within certain limits) also contracts which under some domestic legislations may be considered to be work contracts: pursuant to art 3(1), contracts for the supply of goods to be manufactured or produced are to be considered sales, provided that the party who orders the goods does not undertake to supply a substantial part of the materials necessary for such manufacture or production. According to art 3(2), the CISG may apply to contracts that include the supply of labour or other services amongst the ‘seller’s’ obligations, as long as the preponderant part of the obligations of the party who furnishes the goods does not consist in the supply of labour or other services.

Still, even the foregoing contracts are governed by the CISG only where they relate to tangible, movable goods (irrespective of whether they are new or used, animate or inanimate) – which is why, for instance, the sale of receivables is not governed by the CISG – and are not excluded pursuant to art 2 (which excludes the sale of ships, airplanes, stocks, shares, investment securities, negotiable instruments, money and electricity as well as the sale by auction and sales on execution or otherwise by authority of law) from the CISG’s sphere of application.

4. The impact of reservations on the need to have recourse to private international law

The CISG, like most other uniform substantive law conventions, allows contracting states to declare a limited number of reservations, thus providing some flexibility to a type of instrument the rigidity of which would otherwise lead some states to outright reject it. As for those reservations, they can be divided into various categories: those that have an impact on the CISG’s applicability and those that do not, but have an impact on the substance. Despite this distinction, all reservations have one thing in common: they all trigger a private international law analysis, which once again goes to show that the CISG cannot do without private international law.

As regards the first category, art 92 is to be mentioned: it allows contracting states to make a declaration pursuant to which they would not be bound by either part II or part III of the CISG, dealing with the ‘Formation of the Contract’ and ‘Sale of Goods’, the rights and obligations of the parties, respectively. As for the effect of this reservation, it is set forth in art 92: a party that has its relevant place of business in an art 92 reservation state is considered to have its place of business in a non-contracting state for the purposes of the part excluded. As mentioned, this will trigger a private international law analysis to determine which substantive rules will ultimately be applicable.

Similarly, art 93 allows a state that is divided into several territorial units in which, according to that state’s constitution, different systems of law are applicable in relation to the matters dealt with in the CISG, to make a declaration pursuant to which the CISG does not extend to all territorial units. Where a state made such a declaration and a party to a contract has its place in a territorial unit to which the CISG does not extend, that party is considered to have its place of business in a non-contracting state, thus making it impossible for the CISG to apply ‘directly’. This, in turn, triggers once again a private international law analysis which may or may not lead to the CISG’s application.

Article 94 also falls into the same category as the arts 92 and 93 reservations. Pursuant to art 94,

[t]‌wo or more Contracting States which have the same or closely related legal rules on matters governed by this Convention may at any time declare p. 344that the Convention is not to apply to contracts of sale or to their formation where the parties have their places of business in those States.

The rationale behind this provision is to make the CISG inapplicable to contractual relationships between parties that have their places of business in countries that have a sales law that is largely uniform, thus allowing regional unification efforts not to become superfluous. Consequently, the CISG will not be applicable where both parties have their relevant place of business in contracting states that made an art 94 declaration, at least not in the courts of contracting states that declared such a reservation, thus once again making it necessary to resort to the private international law rules of the forum to determine the applicable law.

Resort to private international law is also triggered by the art 96 reservation, which, however, has more substantive effects, as it has an impact on the formal validity governed by art 11 of the CISG, which sets forth the principle of freedom from form requirements. This principle does not necessarily apply where at least one of the parties to the contract governed by the CISG has its place of business in a state that has declared a reservation under art 96. In this line of cases, any provision ‘that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply’. What consequences this has on the applicable writing requirements is subject to dispute. What is undisputed, however, is the fact that a private international law analysis is required to determine whether any form requirements have to be met.

5. Limitations to the scope of application and party autonomy as reasons for resort to private international law

Even though it has been suggested that the CISG is ‘a comprehensive code governing international sales of goods’ that ‘exhaustively deals with all problems’, the CISG is neither a comprehensive code nor does it constitute an exhaustive body of rules. In other words, the CISG does not provide solutions to all matters that may originate from an international sale. From this one can easily gather how important resort to private international law is, even where the CISG is applicable. In effect, where no other uniform substantive law convention is applicable, it is through a private international law analysis that the matters that are excluded from the CISG’s limited scope of application are to be solved. These matters – at times referred to as ‘external gaps’ – must be solved in conformity with the law applicable by virtue of the rules of private international law. This approach is completely different from the one to be adopted in respect of the so-called ‘internal gaps’, ie ‘matters governed by [the CISG] which are not expressly settled in it’ (art 7(2)), which requires resort to private international law only as ultima ratio, when it is not possible to solve the matter from within the CISG, that is through recourse to the general principles upon which the CISG is based.

From the foregoing, it becomes apparent how important the distinction between the various types of gaps and their identification really are. Unfortunately, however, the CISG does not set forth specific criteria on how to make the distinction. Article 4 provides, however, some help, as it contains a (non-exhaustive) list of matters with which the CISG is not concerned, namely the validity (other than the formal validity) of the contract or of any of its provisions or of any usage as well as the effect which the contract may have on the property in the goods sold. Article 5 also lists a matter with which the CISG is not concerned, namely the liability for death or personal injury caused by the goods to any person.

The aforementioned matters expressly listed as falling outside the CISG’s scope of application are not the only ones with which the CISG is not concerned. There are many other matters that fall outside the CISG’s scope of application and are left to the applicable law which, where no other uniform law convention applies, such as the UNCITRAL Convention of 14 June 1974 on the Limitation Period in the International Sale of Goods (1151 UNTS 3; 13 ILM 952), is to be determined by means of the private international law rules of the forum. Among the matters identified by courts and commentators as not being at all governed by the CISG are, among others, the validity of a choice of forum clause, the validity of a penalty clause, the validity of a settlement agreement, the assignment of receivables, the assignment of contract, statute of limitations, the issue of whether a court has jurisdiction and, generally, any other issue of procedural law, the assumption of debts, the acknowledgement of debts, third-party rights, p. 345the effects of the contract on third parties as well as the issue of whether one is jointly liable. One court ruled that the question of who has priority rights in the goods as between the seller and the third-party creditor was also beyond the scope of the CISG and had therefore to be governed by the applicable domestic law.

Whereas there is not too much dispute as to whether the foregoing matters are excluded from the CISG’s scope of application, there are matters in respect of which case-law is contradictory. This is true, to just give one example, in respect of →set-off. Although the majority of cases rightly exclude it from the matters with which the CISG is concerned, there are some instances in which courts stated that set-off was governed by the CISG provided that the receivables all arose from contracts governed by the CISG.

It must be pointed out that even where all of the CISG’s positive applicability requirements are met and the issues to be dealt with by the court are governed by the CISG, resort to private international law may still not be superfluous. This is due to art 6, which allows the parties to ‘exclude the application of this Convention or, subject to art 12, derogate from or vary the effect of any of its provisions’. By providing for this possibility, the drafters of the CISG reaffirmed the CISG’s dispositive nature and the central role which party autonomy plays in international commerce and, particularly, in international sales. Of course, where the parties exercise their power to exclude the CISG, the applicable substantive rules have to be determined by means of the applicable private international law rules.

IV. Relationships with other instruments and EU law

As the number of substantive uniform law conventions constantly increases, so does, by implication, the possibility of different instruments being applicable to one and the same situation. The drafters of the CISG, like the drafters of all recent substantive uniform law conventions, were aware of this and introduced a provision, art 90, specifically designed to deal with the conflict of conventions issue. Pursuant to that provision ‘this Convention does not prevail over any international agreement which has already 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’.

From the text of the foregoing provision, it becomes apparent how important it is to determine what constitutes an ‘international agreement’ in the sense of art 90, and whether it contains provisions concerning matters governed by the CISG.

It must be pointed out that the multi- or bilateral nature of the agreement is irrelevant for the purpose of deciding whether a given agreement prevails over the CISG or not. Both multilateral and bilateral agreements may prevail over the CISG. What is important, however, is the substantive or private international law nature of a given agreement, as only substantive law agreements will require the CISG to take a backseat. This is due to the fact that private international law agreements do not contain provisions ‘concerning the matters governed by the [CISG]’, as the CISG deals solely with substantive law matters. Private international law instruments take a different approach to creating certainty and predictability from that of the CISG.

Furthermore, for the purpose of deciding whether the CISG or an international agreement is to be resorted to in order to solve a given – substantive – matter, it is irrelevant whether the international agreement is an agreement with regional reach rather than universal reach (like the CISG). For an international agreement to prevail over the CISG by virtue of art 90, that agreement does not necessarily have to be an agreement with universal reach. Thus, by means of art 90, the CISG itself acknowledges, at least implicitly, that there is room for regional unification in respect of matters governed by the CISG. And it is this fact that has led some scholars to suggest that art 90 can be used to let EU Regulations and Directives (and, consequently, the domestic statutes implementing such EU Directives) prevail over the CISG. This does not appear to be correct; those instruments are not ‘international agreements’ for the purpose of art 90, and this despite the fact that the Regulations are self-executing in the Member States and that the Member States are obliged by treaty to implement the Directives.

What has just been said does not mean that there is no other way to let EU law prevail over the CISG. The CISG contains another provision, art 94, which allows one to state that the CISG itself justifies the undertaking of regional p. 346unification efforts, such as some of the ones undertaken by the EU. Article 94 allows contracting states to make a specific declaration rendering the CISG inapplicable to contractual relationships between parties that have their places of business in countries that have sales laws that are the same or closely related. And it is this CISG provision that is more favourable to certain regional unification efforts, such as some of the ones undertaken by the EU. This is mainly due to art 94, in contrast to art 90, not requiring that the result of regional unification efforts take the form of an international agreement. Thus, as long as two or more contracting states have the same or closely related rules on matters governed by the CISG, and they make a declaration under art 94, contracts for the sale of goods concluded between parties having their relevant places of business in those contracting states will not be governed by the CISG, but rather by those regional rules, provided that they are applicable, even if those rules do not derive from an international agreement.


  • Christophe Bernasconi, ‘The Personal and Territorial Scope of the Vienna Convention on Contracts for the International Sale of Goods (Article 1)’ (1999) 46 NILR 137;

  • Franco Ferrari, ‘La Convention de Vienne sur la vente internationale et le droit international privé’ (2006) 27 J.Dr.Int’l 27;

  • Franco Ferrari, ‘PIL and CISG: Friends or Foes?’ [2012] IHR 89;

  • Alejandro Garro and Alberto Zuppi, Compraventa Internacional de Mercaderías. La Convención de Viena de 1980 (2nd edn, Ediciones La Rocca 2012);

  • Rolf Herber, ‘Das Verhältnis des CISG zu anderen Übereinkommen und Rechtsnormen, insbesondere zum Gemeinschaftsrecht der EU’ [2004] IHR 89;

  • Ulrich Magnus (ed), CISG v. Regional Sales Law Unification with a Focus on the New Common European Sales Law (Sellier European Law Publisher 2012);

  • Ulrich Magnus, Wiener UN-Kaufrecht (Sellier/de Gruyter 2013);

  • Hermann Pünder, ‘Das Einheitliche UN-Kaufrecht – Anwendung kraft kollisionsrechtlicher Verweisung nach Art. 1 Abs. 1 lit. b UN-Kaufrecht’ [1990] RIW 869;

  • Francesca Ragno, Convenzione di Vienna e diritto europeo (CEDAM 2008);

  • Karl August von Sachsen-Gessaphe, Internationales Privatrecht und UN-Kaufrecht (2nd edn, BWV 2007);

  • Ulrich G Schroeter, UN-Kaufrecht und Europäisches Gemeinschaftsrecht: Verhältnis und Wechselwirkungen (Sellier 2005);

  • Ingeborg Schwenzer (ed), Kommentar zum Einheitlichen UN-Kaufrecht – CISG (6th edn, CH Beck 2013).