Larry_A_DiMatteo_-_International_Sales_Law_A_Global_Challenge-Cambridge_University_Press_2014

additional evidence of intent, a quantity term stating a large quantity of Chinchilla furs (einer großeren¨ Menge von Chinchilla-Fellen) would not have been sufficiently definite.

In some long-term relationships, such as supply contracts involving multiple installments, the quantity term will initially be left open. It will be filled subsequently based upon the buyers’ requirements (demand) or the sellers’ production (output). The question then arises whether the parties are bound by such a contract and at what point in time the contract is deemed to be concluded. Professor John Honnold, supported by the traveau preparatoire´, has rightly argued that such “Requirements” and “Output Contracts” are enforceable under the CISG: “Article 14(1) should not be construed to nullify these important transactions on the ground that the quantity will not be fixed until the buyer’s requirements or the seller’s output become known.”57

CISG case law has accepted that either party can determine the exact quantity at a later stage,58 and that quantity can be determined based on a customer’s needs. The latter was the case in a decision of the French Cour de Cassation involving a framework agreement (un accord de collaboration) between a Swiss seller and a French buyer of cranks for trucks over a period of eight years.59 The goods were clearly identified, but the quantity was stated to be an annual amount dependent on the requirements of the final customer:

Les quantites´ a` livrer sont determin´ees´ a` l’article 2 Volumes de livraison ainsi qu’il suit:

Au moins 20.000 unites´ sur un laps de temps de 8 annees´ appelees´ suivant les besoins de RVI.

Estimations previsionnelles:´

1991 environ 3.000 unites´ (sur toute l’annee);´

1992 environ 4.000 unites;´

1993 environ 5.000 unites;´

1994 environ 6.000 unites;´

1995 environ 6.000 unites´.

The Cour d’appel de Colmar held this to be a sufficient determination of the quantity with the following pragmatic argument:60 These terms should be read as a minimum quantity of 20,000 goods to be delivered over an eight-year period. The reference to the needs of the final customer does not relate to the volume but constitutes a simple repartition of the quantity. The French Cour de cassation confirmed that a binding

geringen Teil weiterverkaufte, ohne Vorbehalte uber¨ die Menge der ubersandten¨ Waren zu machen. Es muß daher auf Grund des spateren¨ Verhaltens der Parteien davon ausgegangen werden, daß auch die Bestellung einer ‘großeren¨ Menge von Fellen’ als hinreichend bestimmt anzusehen ist”).

57Honnold, Uniform Law, para. 137.3, at 150.

58Commercial Court of Zurich¨ (Handelsgericht des Kanton Zurich)¨ (July 10, 1996), Case No. HG 940513, available at http://www.unilex.info/case.cfm?id=381.

59French Cour de Cassation (June 30, 2004), Case No. Y 01–15.964, available at http://www.unilex.info/ case.cfm?id=981.

60Cour d’appel de Colmar (June 12, 2001), available at http://www.unilex.info/case.cfm?id=814 (“Si les mots ont un sens, la lecture – et non pas l’interpretation´ qui ne se justifie qu’en cas d’omission, d’imprecision´ ou de contradiction apparente – des termes ‘au moins 20.000 unites’´ ne renvoie pas a` un ordre ‘approximatif’ de grandeur, comme le soutient la societ´e´ B . . . France, mais bien a` un nombre minimal de 20.000 carters a` livrer sur une duree´ de 8 ans. La ref´erence´ aux ‘besoins de RVI’ ne se rapporte pas au volume des ‘livraisons’ mais constitue un simple critere` de repartition”)´ .

contract had been concluded and interpreted the parties’ statements and conduct, using the principles of Article 8 and the good faith principle, as follows:

Attendu que l’arretˆ retient, d’une part, que dans le contrat litigieux les parties sont design´ees´ comme “fabricant” et “acheteur” et d’autre part qu’y sont determin´ees´ precis´ement´ la marchandise a` fournir, les quantites´ a` livrer, la methode´ de determination´ du prix et les modalites´ de paiement; qu’interpretant´ les el´ements´ de preuve qui lui etaient´ soumis au regard des principes definis´ a` l’article 8 CVIM et notamment de celui selon lequel les contrats doivent s’interpreter´ de bonne foi, la cour d’appel a pu en deduire´ que l’accord comportait des obligations reciproques´ de livrer et d’acheter une marchandise determin´ee,´ a` un prix convenu de sorte qu’il constituait une vente.

d. Intention of the offeror to be bound (animus contrahendi)

Difficult, but important, distinctions need to be drawn between nonbinding inquiries, exchange of information, negotiations, and contractually binding statements (intention of the offeror and offeree to be bound or animus contrahendi). The demarcation line is determined by the existence of or the lack of an intention to be bound.

The requirement of a general intent to be bound is found in CISG Articles 14, 18, and 19 CISG. It is, however, left to the general rules on interpretation in CISG Article 8 to determine whether a contract is concluded.61 The intention must relate to the CISG essentialia negotii in order to form a binding contract. Under Article 8(3), such intent is determined with due regard to all relevant circumstances and, as stated by UNCITRAL in the commets to the 1978 UNCTRAL Draft, by the CISG rule of interpretation of the parties statement and conduct in CISG Article 8:62

“In order for the proposal for concluding a contract to constitute an offer it must indicate the intention of the offeror to be bound in case of acceptance.” Since there are no particular words, which must be used to indicate such an intention, it may sometimes require a careful examination of the “offer” in order to determine whether such an intention existed. This is particularly true if one party claims that a contract was concluded during negotiations, which were carried on over an extended period of time, and no single communication was labeled by the parties as an “offer” or as an “acceptance.” Whether there is the requisite intention to be bound in case of acceptance will be established in accordance with the rules of interpretation contained in [CISG Article 8].63

e. Revocability of offer and the precontractual relationship

Professor John Honnold discussed the issue of the effect of a “fixed time for acceptance” set by the offeror according to CISG Article 16(2)(a): “It is not easy to assess the outcome of this dispute, which may well appear to be a tempest in a teapot.” Honnold, thereby, refers to the question of whether a “fixed time for acceptance” placed in an offer sets the time period for acceptance under CISG Article 18(2) or in addition creates a presumption of irrevocability of the offer under Article 16(2)(a). The most plausible answer is that a

61See I. Schwenzer. and F. Mohs, “Old Habits Die Hard: Traditional Contract Formation in a Modern World,” 6 Internationales Handelsrecht (IHR) 240 (2006) (must indicate the intention to buy or sell the goods).

62See, e.g., German Court of Appeal decision (Landgericht Kiel) (July 27, 2004), Case No. 16 O 83/04, unpublished; see commentary by Morten M. Fogt, “Konkludente Vertragsannahme,” 361 et seq.

63UNCITRAL Commentary on the 1978 Draft Convention, Article 12 (CISG Article 14).

“fixed time of acceptance” in the offer does both. However, there are only a few cases interpreting Article 16(2)(b).64 This is surprising when one considers that Article 16(2) was a product of compromise. One explanation is that business persons in fact regard an offer with a fixed time for acceptance as irrevocable within the fixed period. Another explanation is that an offer is generally regarded in practice as freely revocable. In both scenarios no dispute on the interpretation of Article 16(2)(a) and (b) would arise. The first explanation is a more plausible one.

B. Realistic Concept of Acceptance

The CISG provides a realistic concept of acceptance, which focuses on the indication of assent. The acceptance under the CISG has a nonformalistic definition, much like the offer. Case law on the CISG Article 18(3) has stated that: “conduct is adequate acceptance . . . Pursuant to the CISG, acceptance does not require a signature or formalistic adoption of the offered terms.”65 The indication of assent (animus contrahendi) of the offeree can follow from a formal acceptance or any conduct at the time of the conclusion of the contract or subsequently.66

The legal questions raised by CISG Article 19, however, are of practical importance to modern international commerce. The provision encompasses the traditional distinction between an acceptance that mirrors the offer and an acceptance that alters the offer and prevents the formation of the contract. On the other hand, Article 19 provides for a limited rule on the binding effect of modified acceptances in cases of nonmaterial deviations from the offer coupled with a nonresponse on the part of the offeror. However, Article 19 creates more questions than answers: (1) How are alternative forms of contract formation dealt with under the CISG? (2) What is the effect of silence or passivity in business relations? (3) What is the legal effect of confirmation letters? (4) For the determination of the content, how and when are standard terms incorporated into a contract? (5) What is the legal effect of purported offers and acceptance containing conflicting standard terms (battle of the forms), which in many cases will entail material different terms? All these questions are covered within the scope of the CISG, and more specifically, Part II on formation of contract. These questions remain unsettled or are at least not expressly settled by CISG provisions.

In an Article 19 scenario involving additional or conflicting terms, a number of matters need to be clarified: (1) the definition of material and nonmaterial terms; (2) the scope of the rule on the binding effect of a modified acceptance; (3) the related question of acceptance by silence, such as a failure to react against a commercial letter of confirmation; and (4) the general issue of the incorporation of standard forms. In the battle of the forms scenario, a number of views have been offered, including that the battle of the forms is not governed by the CISG or that it is governed but not settled by the CISG. In the latter view, the battle of the forms is either resolvable by applying the general principles of the CISG or, if not resolvable, then to be decided through private international law of the forum. Most U.S. courts apply “the last short” rule under the

64See partially Geneva Pharmaceuticals, supra note 28 (Article 16(2)(b) and reliance principle compared with common law promissory estoppel doctrine).

65Golden Valley, supra note 48, at para. C 2.

66See Articles 8(3) and 18(1) and (3).

CISG;67 German courts have generally applied the “the knock out” rule,68 reasoning that the parties intended a derogation under Article 6;69 and in some jurisdictions, such as France and the Nordic states, the result is uncertain.70 Some courts have used the Unidroit Principles of International Commercial Contracts to fill in the gaps of the CISG.71

C. Validity: External Lagunae

CISG Article 11 governs formal “validity” or formalities. The validity of substantive terms comes in three forms: the binding effect of an offer (promise); defects of consent; and the illegality, immorality, unfairness, or unreasonableness of contract terms.72 The CISG governs the first form of substantive validity by providing rules for an offer in order to be binding. On the contrary, the CISG is not concerned with the other forms of substantive validity that make a contract or a contract term voidable or void ab initio due to defects of consent, unfairness or unreasonableness, and illegality and immorality.

The question of an “apparent or objective” consent (außere¨ Konsens) between the parties is regulated by Part II. But the CISG does not provide any regulation relating to defects in apparent or objective consent and states in Article 4 that validity is a question for domestic law. Thus, defects in consent due to duress, fraud, exploitation, and mistake are outside the scope of the CISG. However, if a mistake is made concerning matters for which the CISG provides a remedy, the CISG applies. An example is a mistake concerning the characteristics or conformity of the goods, which under some domestic laws is a ground for invalidity.73

67See Norfolk Southern Railway Company v. Power Source Supplz, Inc., Case No. 07–140-JJf, 2008 U.S. Dist. LEXIS 56942 (W.D. Pa. 2008), available at http://cisgw3.law.pace.edu/cases/080725u1.html (“This battle of the forms must be resolved by reference to CISG Article 19” and coming as the result of a counteroffer as the “last shot”). Cf. P. O. Viscasillas, “Battle of Forms, Modification of Contract, Commercial Letters of Confirmation: Comparison of the United Nations Convention on the Contracts for the International Sale of Goods (CISG) with the Principles of European Contract Law (PECL),” 14 Pace Int’l L. J. 153, 156–8 (2002); “Battle of the Forms” under the 1980 United Nations Convention on Contracts for the Sale of Goods: A Comparison with Section 2–207 UCC and the Unidroit Principles,” 10 Pace Int’l L. J. 97 (1998). For the “knock out” rule still, however, cautious, see John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 4th rev. ed. (ed. Harry Flechtner) (Alphen aan den Rijn, 2009), 254.

68See BGH (January 9, 2002), available at www.unilex.

69Schlechtriem and Schroeter¨ in Schlechtriem and Schwenzer, Kommentar zum Einheitlichen UNKaufrecht, 352, Rn. 25.

70Cf. F. C. Dutilleul and P. Delebecque, Contracts civils et commerciaux, 8th ed. (Paris: Dalloz, 2007), 120, n. 116.

71See, e.g., Hof’s-Hertogenbosch (October 16, 2002) Nederlands Internationaal Privaatrecht (NIPR) 2003, no. 92 (2003), available at http://www.unilex.info/case.cfm?id=960 (incorporation of general business terms); Cour de Cassation, Belgium, (June 19, 2009) in the case of Lourraine Tubes v. Scaform International BV, Case No. C.07.0289.N, available at http://www.unilex.info/case.cfm?id=1457 (hardship).

72Cf. U. Drobnig in International Sales of Goods, Dubrovnik Lectures (ed. Sarcevic and Volken) (1986), 313; Zeller, “The Black Hole,” 259.

73See Oberster Gerichtshof Austria (April 13, 2000), Case No. 2 Ob 100/00, available at http://www.unilex. info/case.cfm?id=687: “Art 45 UN-K regle die Anspruche¨ des Kaufers¨ gegen den Verkaufer¨ umfassend und

¨ ¨

abschließend. Der Ruckgriff¨ auf nationale Vorschriften sei ausgeschlossen. Uber die im Ubereinkommen geregelten Anspruche¨ hinausgehende, im nationalen Recht vorgesehene Anspruche¨ konnten¨ nicht geltend gemacht werden. Dies gelte trotz Article 4(a) UN-K auch fur¨ die Irrtumsanfechtung.”

Invalidity based on unfairness or unreasonableness is relevant in a commercial setting where the rights of one party are limited too much, such as excessive limitations in standard forms,74 “sold as is clauses,”75 or where the remedies provided for one party are overly one-sided (e.g., excessive penalty clauses). Despite the position of validity as an external gap in the CISG, account should be taken to the fundamental rights of the parties under the CISG. The Federal Supreme Court of Austria has rightly held that the question of validity – even when this is referred to domestic law – should be measured against the values and fundamental rights of the CISG (Grundwertungen des CISG).76

The question of illegality and immorality generally involves a violation of national public law77 and criminal law. For example, if one of the parties to a CISG contract is responsible for an act of corruption in connection with a contract of sale, the civil law treats the act of corruption as a breach of contract (most likely a fundamental breach under Article 25) or states that a contract influenced by corruption is invalid and unenforceable.78

IV. General Principles of Part II

This part provides a brief history of the negotiation and drafting of Part II. It concludes with a summary or template of the underlying principles that should be liberally applied in the interpretation of the formation rules found in Part II.

A. Brief Legislative History of Part II

In 1969, UNCITRAL established a Working Group on the International Sale of Goods (Working Group). Representatives from fourteen countries were given the task of

74See, e.g., the decision of the French Cour de Cassation in the case Societ´e´ DIG v. Societ´e´ Sup, available at http://www.unilex.info/case.cfm?id=1372, where the court reversed a decision of the Cour d’appel Paris (February 25, 2005, Case No. 03/21335, available at http://www.unilex.info/case.cfm?id=1095) that the seller’s liability exemption clause according to the CISG were valid between professional parties: “Attendu qu’en statuant ainsi, alors que la Convention de Vienne regit´ exclusivement la formation du contrat de vente et les droits et obligations qu’un tel contrat fait naˆıtre entre le vendeur et l’acheteur mais ne concerne pas la validite´ du contrat ni d’aucune de ses clauses, la cour d’appel a viole´ le texte susvise´.”

75See Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc. (W.D. Wash. 2006), Case No. C05– 5538FDB, available at http://www.unilex.info/case.cfm?id=1105.

76Oberster Gerichtshof Austria (September 7, 2000), Case No. 8 Ob 22/00v, available at http://www. unilex.info/case.cfm?id=473 (“Diese Regelung widerspricht auch nicht den Grundwertungen des UN-Kaufrechts; nur diesen Grundwertungen widersprechende nationale Bestimmungen konnten¨ als unzulassig¨ angesehen werden. Zu den jedenfalls zu wahrenden Grundwertungen des UN-Kaufrechts zahlt¨ u.a. das Recht zur Aufhebung des Vertrages, das der vertragstreuen Partei als ultima ratio grundsatzlich¨ erhalten bleiben muss, soweit die Gegenpartei die Ware auch nicht nach einer angemessen verlangerten¨ Frist liefert oder die Ware trotz einer Nacherfullung¨ im Wesentlichen unbrauchbar bleibt. Wird auch dieses Aufhebungsrecht eingeschrankt,¨ so muss der vertragstreuen Partei in jedem Fall ein Anspruch auf Ersatz des durch den Erfullungsmangel¨ entstandenen Schadens verbleiben”).

77See, e.g., German Federal Supreme Court (Bundesgerichtshof, BGH) (July 23, 1997), Case No. VIII ZR 134/96, available at http://www.unilex.info/case.cfm?id=259 (contract violating national unfair competition law).

78Cf. Morten M. Fogt, “Korruptionens civilretlige virkning komparativt – Om status efter Oil-for-Food, det internationale privat-, straffeog offentligretlige lovvalg samt Europa Radets˚ Civil Law Convention on Corruption, Del I og II,” 5 (4) Erhvervsjuridisk Tidsskrift 271 (2010); id., “Del III,” 6 (1) Erhvervsjuridisk Tidsskrift 1 (2011).

preparing a draft of uniform sales law rules that would be acceptable “by countries of different legal, social and economical systems.”79 The initial draft was based on the 1964 ULF, culminating in the 1976 Sales Draft Convention. At the Working Group’s seventh session (January 1976), the group requested the UNCITRAL Secretary to prepare a critical analysis of the ULF and the 1972 UNIDROIT draft law on the validity of contracts of international sale (LUV). In a 1977 report, the UNCITRAL Secretary came to two fundamental limitations of the coverage of the new uniform rules on the formation of contract. First, a suggestion not to codify every aspect of contract formation and that the new rules should be based on the ULF and limited to the areas of offer and acceptance. Second, a proposal should not include any provision on validity based on the 1972 LUV. The reasons for these two limitations are explained as follows:

Fortunately, it is not necessary to codify every aspect of the subject in a text of uniform law since there is more agreement on the practical result in various situations than there is on the theory by which that solution is attained or justified. Therefore, it may be enough to prepare a text, which offers solutions to practical problems caused by such differences in the law in various systems.

For this reason, it is suggested that the draft convention on formation of contract to be prepared by the Working Group might follow the plan of ULF in regard to its coverage. Such a draft convention would be largely limited to offer and acceptance. These matters are ones in which the differences between the various legal systems are such that practical problems are caused in international trade. Nevertheless, they are subjects in which it appears possible to formulate a generally acceptable text.

It is also suggested that the draft convention to be prepared not include any provisions in respect of validity of contract based on the [1972] LUV . . . all available evidence suggests that these problems of validity are relatively rare events in respect of contracts for the international sale of goods.80

This very brief account of part of the legislative history of CISG Part II shows that the focus was not on a broad harmonization of the “law on contract formation” but on a limited and fragmented legal regime on contract formation. Contract formation in the CISG has more the character of an annex to the more important sales law rules of the CISG. A review of the legislative history of the CISG indicates that another reason for the limitation of coverage on contract formation was a lack of time. The Working Group noted the following when adopting the agenda for the work on Part II:

In the discussion of the adoption of agenda, the Working Group noted the views of the Commission at its ninth session [1976] that “the Working Group should restrict its work to the preparation of rules on the formation of contracts for the international sale of goods so as to complete its task in the shortest possible time, but that the Working Group had discretion as to whether to include some rules in respect of the validity of such contracts.”81

79Cf. Honnold, Documentary History, 2.

80Report of the Secretary General: formation and validity of contracts for the international sale of goods (A/CN.9/128, annex II, from February 3, 1977), paras. 16–18 in Honnold, Documentary History, 256.

81Report of the Working Group on the International Sale of Goods on the work of its eighth session (New York, January 4–14, 1977) (A/CN.9/128 (February 3, 1977), para. 8 in Honnold, Documentary History, 275.

From the Working Group’s eighth session (January 1977) to its ninth session (September 1977), the work on the draft on the Formation of a Sale Contract was completed and subsequently combined with the Sales Draft Convention from 1976 into the UNCITRAL 1978 Draft that provided the foundational document for the 1980 Vienna Conference.

B. General Principles

Due to the fragmented nature of Part II, supplementation of its core rules is needed to make its formation rules fully functional and responsive to international sales transactions. First, important parts of contract formation are excluded from the scope of the CISG, including alternative means of contract formation and contract validity. Both are important parts of determining whether a contract comes into existence. One area of contract formation, the traditional offer–acceptance model, is regulated under Part II, although alternative means of contract formation are bypassed in the text of the CISG. Issues of contract validity are excluded expressly according to CISG Article 4. In sum, the rules of traditional contract formation are settled in Part II, alternative means of contract formation are governed but not settled (internal lagunae), and issues of validity are not governed (external lagunae). Such a framework represents an arbitrary fragmentation of the area of contract formation.

A way to remedy the noncomprehensive character of the CISG’s formation rules is to employ a liberal interpretation methodology and to develop (implied) general principles on which the CISG is based. The gap-filling provision of CISG Article 7(2) provides the means for a liberal interpretive methodology based on implied general principles. In trying to establish underlying principles on contract formation, CISG Parts I and III should be used to help fill in the gaps in Part II.

The following is a nonexhaustive list of general underlying principles of the CISG that relate to contract formation. Some of the principles are general and some specific; some are found in express statements in the CISG, some are tacit and implied. Some of the principles are disputed and some remain uncertain regarding existence and content:

Freedom of contract or party autonomy (Articles 6, 30, 35(1), and 53).

Freedom of form (Article 11 and 29, unless reservation in Article 96).

Binding effect of a contract – pacta sunt servanda (implicitly found in Articles 45, 61, and 79).

Principle of consensus between the parties – a common animus contrahendi (Articles 14 and 18–19).

The principle that a contract can be concluded by conclusive conduct (in German “konkludentes Verhalten,” Article 18(1) and 18(3)).

The favor contractus principle in that the CISG limits the possible grounds and applies strict conditions for avoidance (Articles 25, 49, 64, 72, 73; the “cure” provisions Articles 34, 37, and 48; and the “Nachfrist” provisions, Articles 47, 63).

Intention of the parties as common or shared intention (Article 8(1) – subjective interpretation).

Reasonable businessperson standard (Article 8(2) – objective interpretation).

Receipt theory – increases party awareness that a contract has been concluded and contractual rights and obligations have been created (Article 24 and in Part III inter alia Articles 48(4), 65(2), and 79(4)).

Importance of statements and conduct before, at, and subsequent to the conclusion of a contract as an indication of parties’ intent (Article 8).

Binding effect of practices established between the parties under gentle conditions (Article 9(1)).

Binding effect of international trade usage under strict conditions (Article 9(2)).

CISG essentialia negotii limited to an indication of goods and quantity (Article 14(1)).

CISG accidentalia negotii (including the indication of price and exemplified by other contract elements in Article 19(3) and CISG default rules).

CISG naturalia negotii – the reasonable reliance and expectation principles (Articles 16(2)(b), 19(2), 21(2), and some provisions in Part III).82

CISG naturalia negotii in the sense of venire contra factum proprium (Articles 16(1)(b) and 29(2)).

CISG naturalia negotii – the duty of cooperation calling for exchange reasonable communications and exchanges of information to provide notice and avoid ambiguity, doubts, and mistakes83 (Part II and numerous provisions of Part III support of reliance and expectation principles).84

CISG naturalia negotii recognition of the principle of reasonableness (Part I, Article 8(2); Part II, Articles 16(2)(b) and 18(2); and numerous provisions of Part III).85

Principle of good faith and fair dealing as the overall CISG naturalia negotii (Articles 7(1), 29(2), 40, and 80).

The application and interpretation of these principles determine the scope and limits of Part II and when recourse to domestic law is permitted. If the principles are narrowly construed as they apply to Part II, then uniformity of law is restricted and the divergences between national laws will continue to be barriers to international sales transactions. As an example, the rule on reasonable reliance espoused in Article 16(2)(b) could be interpreted as supporting a general reliance principle. On the other hand, as applied in

Geneva Pharmaceuticals Technology Corp. v. Barr Laboratories, Inc., et al.,86 the scope of the rule in Article 16(2)(b) is fairly limited and allows for the application of domestic principles, such as estoppel: “The question of whether it preempts a separate claim for promissory estoppel presents a closer question. Breach of contract and promissory estoppel are two sides of the same coin, and that coin is a cause of action for breach of contract.” In that case, an American buyer utilized promissory estoppel to prove that a promise on which it relied should be recognized as binding on the promisor. The court reasoned that: “[I]f the CISG had contemplated a similar ‘reliance’ principle . . . this promissory estoppel claim would be preempted. The defendants have presented no argument that the CISG does so, and therefore this particular promissory estoppel claim is not preempted.”87 However, because Article 16(2)(b) appears to employ a modified version of promissory estoppel, the CISG and not domestic law should govern a claim

82See Articles 35(2)(b), 48(2), and 65(2).

83Cf. Honnold, Uniform Law, Article 14, para 134, n. 2 (“The Convention’s numerous provisions calling for communications to enable a party to know where the other stands suggest a ‘general principle’ that a party may not take advantage of ambiguity when an inquiry could readily remove the doubt”).

84See Articles 32(2)–(3), 48(2), 60(a), and Article 65(2).

85See Articles 33(c), 34, 35(2)(b), 37, 39, 40, 43, 46(2)–(3), 47–49, 60, and 63.

86Geneva Pharmaceuticals, supra note 28.

87Id.

of promissory estoppel made to avoid the need to prove the existence of a “firm offer.” Such a claim under the CISG would not require a finding of foreseeability or detriment, as required under American common law.

If principles are too broadly construed and/or purported underlying principles are developed on a weak or absent legal basis in the CISG, then uniformity of law may be pushed too far with a possible effect of deharmonization in practice. There are, thus, likewise reasons to warn against an excessive development of underlying (implied) principles of the CISG:

My doubt does not concern the basis or most of the achieved results in general but rather the danger of overworking the tool of Article 7, section 2 CISG with a possible deharmonization effect within an instrument of unification and harmonization of Commercial Law. The outcome of this academic laboratory of “underlying principles of the CISG” which, admittedly, I gladly join can be pushed too far, yielding a result that is less predictable, certain, and that lacks the legitimacy of the contracting states. The latter concern is not crucial, but the needs of international business for legal predictability and certainty surely are. Here, I see perhaps the most critical danger for the process of unification and harmonization of International Commercial Law. Excess limiting of unification instruments beyond their original scope and wording can run counter to the expectations of the contracting states and, even more dangerously, come as a surprise to businessmen and their legal counsel. Such uncertainty can turn into major disadvantages for international commerce.88

In sum, for the gap-filling within the scope of the convention, the provision of Article 7(2) CISG demands and allows the search for “general principles on which it is based,” but Article 7(2) does not mandate the development of underlying principles of the convention based on general principles of the law of the CISG contracting states or all legal systems.

V. Conclusion: Reforming CISG Part II

The fragmented nature of Part II has created numerous external and internal “gaps.” Until these gaps are filled though liberal interpretation, analogies, and implied underlying principles, the more uncertainty and national discrepancies will appear in the case law. The line between dynamic interpretation and new law-making is unclear, but for the CISG to provide uniform formation rules, the scope of Part II will have to be interpreted as broadly as possible. This review of Part II has shown a number of things. First, the traditional contract formation regime of the CISG only satisfactorily covers a portion of international sales transactions. Because of its failure to expressly deal with alternative means of contract formation, its application to these other means of formation has been uneven and nonuniform. The fact that contract formation and interpretation are governed by the CISG and contract validity is not has led to problems of interpretation that can only be corrected by reforming Part II.

The CISG’s formation rules fail to provide coverage on numerous contract formation issues that are of practical importance to international sales transactions. Part II should be reformed to expand its scope into areas such as alternative means of contract formation

88Morten M. Fogt, “Private International Law in the Process of Harmonization of International Commercial Law: The ‘Ugly Duckling’?,” in Fogt, Uniformity and Harmonization, 57 et seq., 95.