A GENERAL APPROACH TO THE INTERNATIONAL SALE OF GOODS: CREATION OF A UNIFORM LAW
by Roberto Viano
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There are economic arguements which are trying to justify the need of a Uniform Law about International Sales of Goods; they come from the new organization of the production which has been called by economists “globalization of the economy” (1). The first consequence is to increase competition all around the world; then commercial exchanges are intensifying quickly and economic operators are asking for more certainty and security about international business: that situation can explain the reason of widespread good feelings about Uniform Law (2).
Legal arguments could explain why the process of law unification stopped once the international sale of goods cropped up. International sellers chose the Sale as a legal Institute for their business, because of its simplicity (which could be expressed by the Latin summarising statement “do ut des”) and an easy law means good economic effect on worldwide business. The main reason why it was not possible to state a worldwide uniform law for national sales as well, could be found in the inability of reaching a compromise: too many are the legal traditions and experiences all around the world, and each one of them has to look after national interests (3).
The work of creating a Uniform Law for the International Sale of Goods started in 1929 under pressure of a well known German jurist, Ernst Rabel. The International Institute for the Unification of Private Law (UNIDROIT) set up a Working Group with the purpose of developing a Uniform Law of the international trade. The project was finished in 1934 and a judgement by the League of Nations was asked (the former International Organization of Nations). The work carried on throught other conferences and special commissions until it was adopted on the Hague Conference on 2-25 April 1964. The results of these proceedings were collected in two Conventions: ULIS (Uniform Law on International sale of Goods) and ULFC (Uniform Law on the Formation of Contracts for the International sale of Goods).
The two Hague Conventions became a binging force from 1972, but since 1964 they have been criticized by many commentators: they have been defined as “a conflict of laws imbroglio” (4). We are going to underline the main arguments against these Conventions, in that way it is trying to explain the reason of their fauilure as international legislation:
1. article V ULIS has been harshly criticized because it is a source of the reasons why the ULIS and ULFC have not been spread. Through art. V ULIS parties have a choice to select the Uniform Law, but it considers silence as a choice not to apply the Conventions: because of this tecnichal solution it was not easy to put into work the ULIS and ULFC (5)
2. an other problem has been found in the Working Group which worked on the draft of the Hague Conventions. It has been said that member States could not rapresent worldwide interests: this is the reason, it has been argued, why only 9 States implemented the two Conventions and why, among these 9 States, only 2 were not European countries (Israel and Gambia).
A new period of work started in 1966 when the United Nations Commission on International Trade Law (UNCITRAL) has been instituted with the purpose of “promoting the progressive harmonization and unification of the law of international trade” by co-ordinating the work of organizations active in this field and encouraging co-operation among them (6). The first recognition of the UNCITRAL was the fact that the ULIS Convention did not work as it was supposed to do; then it had been tried to understand the reason of such no-ratification by States.
A starting mistake has been found: there were cultural limitations within the Working Group. The USSR has not been rapresented, the same thing happened to Latin America and to the Third World: the two Hague Convention had mainly a western background and approach.
When UNCITRAL analysed the situation of international trade law, it started a new Working Group in 1968 which had the task of modifying Hague Conventions, trying to get them widely acceptable. The UNCITRAL avoided any mistake at the start, in fact within the Working Group different legal cultures and traditions had been rapresented: 14 members, among whom only 4 members were western countries (France, USA, Norway, UK); there was deeper attention to the Socialist World and the Third World.
The outcome of this careful work between different legal background and culture (7) has been achieved in 1978: the basic idea was the intention to spread this international law all around the world, so the Working Group decided to unify substantial law and procedure about formation of contracts because this method looked like an easier way for a Uniform Law.
A troubled problem was about the relationship between private international law and uniform law of the convention. The majority of the Working Group adopted the draft which had been worked out by the sub-commissioners: “the law (i.e. CISG) shall also apply where the rules of private international law indicate that the applicable law is the law of a contracting State and the Uniform Law is applicable to the contract according to this law” (8). The minority was against any kind of links with the private international law, it was considered a better solution a clause which limits the working area of the Uniform Law: they thought the CISG should apply only if both States were members of the Convention. Otherwise any reference to private international law could be source of uncertainty, which is the worst thing that could happen to international trade law (9).
A conclusion has been reached in the Vienna Convention in 1980 which conformed the draft of the sub-Commission. In fact article 1(1)(b) adopts the reference to private international law when it has to border the binding area of the CISG (10).
An other important tool, which has been used to spread worldwidely the rules of the Vienna Convention, is article 6 CISG. It establishes the rule that CISG applies always between parties but if they state out their intention not to be bond from the CISG: the solution is rightly the opposite one which was adopted by Hague Convention (11).
According to article 99(1) CISG the Convention will enter into force on the first day of the month following the expire of twelve months after the date of deposit of the instrument of ratification. This situation was achieved on Dicember 1986: then the CISG enter into force on 1 January 1988 with very good forebodings about its worldwide implementation, as it can be shown by the interest of national legal schools,judges and lawyers.
Main bibliographical references:
F. Enderlein and D. Maskowd, International Sale Law, New York, Oceana, 1992
A.H. Kritzer, A Guide to Practical Application of the UN Convention on Contracts for the International Sale of Goods, Deventer, Kluwer, 1991
Johon O. Honnold, Uniform Law for the International Sales under the 1980 UN Convention, Deventer, 1991 (II ed.)
Bianca e Bonell, Commentary on the International sales law. The 1980 Vienna Sales Convention, Milan, Giuffrè, 1987
P. Schlechtriem, Uniform Sales Law. The UN Convention on Contract for the International Sale of Goods, in Law-Economics-International Trade, vol VI, Vienna, 1986
Main links in the WWW:
(1) Michael E. Porter, The competitive advantage, Milano, 1987
(2) P. Hirst and G. Thompson, The problem of “globalization”: international economic relations, national economic management and the formation of trading blocs in Economy and Society, vol. XXI, 4, 1992, 357-395
(3) M.J. Bonell, Introduction to the Convention in Commentary on the International Sales of Goods. The 1980 Vienna Sales Convention, Milano, 1987, 8
(4) Nadelman, The uniform law on the international sale of goods: a conflict of laws imbroglio, 74 Yale Law Journal 449, 1965: the author is saying the situation created by the ULIS and ULFC could lead to shocking results. It has been made the example of a person who sells in Canada goods to a person in the United States whose goods must be shipped to the USA; in any disputes either party can take advantage of the uniform law if its relevant provisions are more favourable to that party than the otherwise applicable law: it does not matter the fact that neither the USA nor Canada has adopted the Uniform Law. On the other side A. Tunc, The uniform law on the international sale of goods: a reply to professor Nadelman, 74 Yale Law Journal 1409, 1965: he is arguing it is very unlikely the courts will accept to decide over cases which do not have any links with the courts: unlikely an english court will judge a dispute risen between an American and a Canadian.
(5) B. Nicholas, The Vienna Convention on international sales law; 105 Law Quarterly Review 201; 1989: “The United Kingdom’s ratification was subjected to the reservation that ULIS would be appliable only to contracts in which the parties chose it as the law of the contract (...) Certainly the UK’s ratification seems to have had no practical results. There has been no reported case in the English and Scottish courts involving the Hague Uniform Laws and it is a reasonable assumption that British businessmen have had little or no recourse to them”.
(6) General Assembly Resolution 2205 (XXI) del 17 Dicembre 1966
(7) it has been considered any kind of national legal aspects, either statutes or way of thinking legal relations institutes
(8) art 2 del Report of the Working Group on the International Sale of Goods; First Session, para. 11, UN Doc A/CN.9/35, ripubblicato in 1 Y.B. UNCITRAL, 1968-70, 176-78
(9) Germany asked, without succeeding, for a delay of the implementation of art 1(1)(b) because it could rise confusion; in United Nations Conference on Contract for the International Sale of Goods, Official records, 1981, 236-37
(10) Clive M. Schmitthoff, The Law and Practive of International Trade; London,Stevens & sons, 1990, 251: he speaks about CISG of “contract in” between parties, otherwise about ULIS of “contract out”