Larry_A_DiMatteo_-_International_Sales_Law_A_Global_Challenge-Cambridge_University_Press_2014

The common and the civil laws are based on very different histories and influences and have developed as two very distinct legal cultures each with their very own underlying philosophies, sources, methods, and ideas. It is therefore no surprise that in fora where legal harmonization is discussed, such as UNCITRAL or the European Union, much of the discussion is often centered on these differences. Although the common law–civil law divide is sometimes exaggerated, there remain real differences between the two systems.6 Any efforts at forming a harmonizing law must necessarily take note of these differences and deal with them in a manner that will transcend the divergences in the two legal systems.

The Vienna Convention for the International Sale of Goods (CISG) is one of the most successful instruments in the harmonization of international trade law with its adoption by eighty countries – and growing.7 The true measure, however, of the success of a harmonizing instrument is the extent to which it is interpreted and applied in practice. A convention cannot be regarded as a successful harmonizing instrument if its interpretation varies among member countries due to homeward trend bias (application of national legal concepts).8 The focus of this chapter is the question of whether the CISG has managed to build a bridge between the common and civil laws of sales. The first part of the discussion will be directed at highlighting the differences between the common and civil legal traditions. The next part will be devoted to identifying a number of key areas within the CISG where the common law or the civil law made a distinct contribution to the adopted rules. The final part of the discussion will be devoted to analyzing the way in which the CISG has been interpreted and applied and whether it has resulted in real harmonization in practice – that is, whether it has substantially bridged the common law–civil law divide.

II. Common Law–Civil Law Divide

The divisions and distinctions between common law and civil law are a widely held perception amongst lawyers around the world. It has long been a subject amongst comparativist scholars.9 It is a distinction that is based on the idea that certain legal systems may be grouped together as legal families based on their common history, distinctive modes of legal thinking, common legal institutions, sources of law, and ideology.10 The distinction has been useful as a starting point for lawyers wishing to conduct comparative research to obtain a sense of the nature and characteristics of different legal systems. It is inevitable that this analysis will be based on generalizations, which do not hold true in all circumstances.11

6M. Vranken, Fundamentals of European Civil Law, 2nd ed. (Annandale: Federation, 2010) para. [1002] ff.

7P. Schlechtriem and I. Schwenzer, Commentary on the UN Convention on the International Sale of Goods, 3rd ed. (ed. P. Schlechtriem and I. Schwenzer) (Oxford: Oxford University Press, 2010), 1–2.

8Franco Ferrari, “CISG Case Law: A New Challenge for Interpreters?,” 17 J. of L. & Commerce 245–61 (1999); Ryan, “The Convention on Contracts for the International Sale of Goods: Divergent Interpretations,” 4 Tul. J. Int’l & Comp. L. 99, 101 (1995). See also, J. Lookofsky, “Consequential Damages in Comparative Context,” 19 Pace Intl L. Rev. 294 (2007).

9Zweigert and Kotz,¨ Comparative Law, 63ff.; De Cruz, Comparative Law, 33; Brierley, Major Legal Systems, 11–13.

10Zweigert and Kotz,¨ Comparative Law, 68–9; De Cruz, Comparative Law, 33–4.

11Zweigert and Kotz,¨ Comparative Law, 67.

The common law–civil law paradigm is founded to a large extent on the comparativists’ research of comparative private law.12 Very different distinctions may be drawn depending on the subject matter. In the end, the distinction between legal families is only valuable if it contributes to an understanding of foreign law and foreign legal systems. Sales law, as a private law discipline, falls within the classic paradigm.13 In the following discussion, the classical approach and criteria used in distinguishing common and civil law systems will be followed.

A. Characteristics of the Common Law

The development of the English Common Law is characterized to a large extent by how it developed in isolation, free from the influences that shaped the continental legal systems. To a very large measure it developed as judge-made law, with the local AngloSaxon rules being displaced by the law made by royal judges and the chancellor.14 This centrally developed common law obviated the need for a codification of the law as happened on the continent. From early on the procedures in the royal courts were centred on writs.15 A litigant was not able to bring a case unless an appropriate writ existed under which the claim could be subsumed. Thus, English law was based on procedural thinking – practitioners were thinking in terms of writs or actions rather than in terms of rights.16 The very formalistic nature of the writ system in time led to a parallel procedure being adopted by the chancellor to hear cases based on a contravention of morals and good conscience. This led to the development of a new branch of law called “equity” with its own rules and remedies, which augmented the common law.17 The law was further developed by ad hoc pieces of legislation issued by Parliament.18 In sum, the common law is characterized as judge-made law, accounting for the importance of case law, procedural law, and the stare decisis principle.19

The training of lawyers strengthened the case-based creation of law.20 During most of the history of English law, lawyers had little or no contact with academics and universities but were practically trained by other lawyers. Strongly organized professional bodies monopolized legal education. Leading lawyers were always practitioners and judges did not come from the ranks of professors or public officials. This further contributed to the fact that Roman law never obtained the influence in England that it did on the continent.21 The practitioners’ self-interests were in maintaining the common law system of which they were the experts.22 Judges were and still are appointed mainly from the ranks of leading practitioners.

12Id., 65.

13See Zweigert and Kotz¨, Comparative Law, 63ff.; Brierley, Major Legal Systems, 9ff.; De Cruz, Comparative Law, 34ff.

14Zweigert and Kotz,¨ Comparative Law, 181ff.; Brierley, Major Legal Systems, 258ff.

15Brierley, Major Legal Systems, 265; Zweigert and Kotz,¨ Comparative Law, 184ff.

16Zweigert and Kotz,¨ Comparative Law, 186; Brierley, Major Legal Systems, 271.

17Zweigert and Kotz,¨ Comparative Law, 188; Brierley, Major Legal Systems, 273ff.

18Zweigert and Kotz,¨ Comparative Law, 185; Brierley, Major Legal Systems, 279.

19De Cruz, Comparative Law, 103.

20Zweigert and Kotz,¨ Comparative Law, 191ff.; Brierley, Major Legal Systems, 286.

21Zweigert and Kotz,¨ Comparative Law, 194; Brierley, Major Legal Systems, 286.

22Zweigert and Kotz,¨ Comparative Law, 193.

The common law and equity systems, in the eighteenth and nineteenth centuries, were fused into one legal and court system, replacing the numerous independent benches within one Supreme Court of Judicature.23 The nineteenth century also saw the rise in the importance of legislation including various codifications of the common law.24 Sales law was codified with the passage of the Sale of Goods Act 1893. The twentieth century witnessed a proliferation of statutory law in England. The Sale of Goods Act of 1893 was replaced by the Sale of Goods Act 1979, which modernized the law and consolidated aspects of sale found in other statutes.25

Against this background, the techniques and methods of legal thinking developed were attuned to a precedent-based, case law system.26 Roscoe Pound described this approach as follows:27

Behind the characteristic doctrines and ideas and techniques of the common law lawyer there is a significant frame of mind. It is a frame of mind, which habitually looks at things in the concrete, not in the abstract; which puts faith in experience rather than in abstractions. It is a frame of mind which prefers to go forward cautiously on the basis of experience from this case or that case to the next, as justice in each case seems to require, instead of seeking to refer everything back to supposed universals . . . The civilian naturally reasons from principles to instances, the common lawyer from instances to principles. The civilian lawyer puts his faith in syllogisms, the common lawyer in precedents; the first silently asking himself “What should we do this time?” and the second asking aloud in the same situation, “What did we do last time?”

Although there is a lot of truth in this assessment of the differences in approach, there is a much narrower gap in the way of thinking between common and civil lawyers in the twenty-first century than this quote suggests.28 Common lawyers now generally obtain a legal education at a university before entering practice. This early training lends itself to a much more abstract approach to the law, much like that followed by their continental counterparts. Conversely, continental lawyers pay much more emphasis to case law and the practical application of the law than is often perceived. The greater contact with common lawyers and common law techniques has no doubt played a role in this process.

The core principle of the common law system is the doctrine of precedents (stare decisis). According to this doctrine, courts lower down in the hierarchy are absolutely bound to the decisions of courts higher up in the hierarchy. The law of precedents also pertains to the interpretation of statutes. The decisions of the higher courts act as a unifying mechanism for resolving differences in the lower courts.29 The common lawyer must be capable of finding relevant case law, and accurately interpreting it and distinguishing cases. The importance of case law and recognizing operative facts is reflected in the reasoning provided in judicial decisions. Common law decisions are much more detailed in discussing facts than is found in civil law reports.

23Zweigert and Kotz,¨ Comparative Law, 199; Brierley, Major Legal Systems, 279ff.; De Cruz, Comparative Law, 100.

24Zweigert and Kotz,¨ Comparative Law, 200–1; Brierley, Major Legal Systems, 323.

25J.N. Adams and Hector Macqueen, Atiyah’s Sale of Goods, 12th ed. (Pearson Harlow, 2010), 3.

26Zweigert and Kotz,¨ Comparative Law, 258–9; Brierley, Major Legal Systems, 302–3.

27Roscoe Pound, “What Is Common Law?,” in The Future of the Common Law (Gloucester: Smith, 1937), 18–19.

28Zweigert and Kotz,¨ Comparative Law, 259.

29Id., 259ff.; De Cruz, Comparative Law, 103.

Judge-made law is most prevalent in the common law in the private law areas of contract, torts, and real property. However, legislation became a major source of law during the twentieth century. These statutes mostly focus on specific ad hoc problems and not the codification of entire areas of the law. The exceptions include England’s Sale of Good Act of 1893 and then again the Sale of Goods Act of 1979.30 In the United States, the law of sales has been codified in Article 2 of the Uniform Commercial Code, which is in forty-nine of the fifty states.31

There are important differences in the drafting of legislature between the common and civil law systems. In the common law systems, legislative drafting is aimed at laying down legal rules, which are as precise and detailed as possible in order to limit creative interpretation by the courts.32 It is a common conception that courts essentially have the task of finding and applying the law, not making it. In civil law systems, statutory law is written at a much larger level of abstraction, often providing legal principles rather than legal rules. Civil law courts are not seen as making law, but are seen simply applying the law as found in the codes to concrete situations. Therefore, there is a fundamental difference in the way in which common lawyers and civilian lawyers perceive legal rules.33 Common lawyers perceive legal rules as specific rules applicable to specific circumstances. Deduction from general principles is of lesser importance than it is in civil law where abstraction leads to the formulation of general principles, not to legal rules. Civilian lawyers see the high-level abstractions as the legal rule, and their application in specific instances merely as a manifestation of the rule in a specific instance.34

B. Characteristics of the Civil Law

The civil law systems of continental Europe consist of two distinctive legal traditions – the French Code Civil (Romanistic legal family) and the German Burgerliches¨ Gesetzbuch (BGB) (Germanic legal family).35 The formative influences during the eighteenth and nineteenth centuries were quite different. The Romanistic legal family was strongly influenced by the political events in France, whereas the Germanic family remained largely uninfluenced by these events. In contrast, the Germanic legal tradition was highly influenced by the Pandectists of the nineteenth century. It consisted of a formal legal technique and clear general concepts, which formed the basis of the BGB and other codifications, but had virtually no influence in the Romanistic systems.36

1. Romanistic Legal Family

The Romanistic legal family is characterized by the influence of the French Revolution, which sought to replace feudal institutions with the natural law values of private

30Adams and Macqueen, Atiyah’s Sale of Goods, 3.

31H. Gabriel, Contracts for the Sale of Goods: A Comparison of Domestic and International Law (Dobbs Ferry: Oceana, 2004), 5–7.

32Zweigert and Kotz,¨ Comparative Law, 267–8.

33Id., 258–9; Brierley, Major Legal Systems, 74–6, 302, and 303.

34Brierley, Major Legal Systems, 73ff. and 302ff.

35Zweigert and Kotz,¨ Comparative Law, 69; Brierley, Major Legal Systems, 14–15; De Cruz, Comparative Law, 33–4.

36De Cruz, Comparative Law, 57–9, 63–4, and 82–8; Zweigert and Kotz,¨ Comparative Law, 68–9, 82–4, and 138–41.

property, freedom of contract, and family inheritance. The Code Civil is a careful blend of the historical legal influences of the Roman law and Germanic-Frankish customary law.37 Much of this law had been recorded in accordance with a royal mandate. The draftsmen of the eventual Code Civil were further influenced by a number of eminent jurists. Pothier influenced, among others, the fields contract and sales with a number of writings of extreme lucidity and conceptual accuracy.38 The law of contract and sales was based largely on Roman law and had little influence from customary law. Although initially influenced by the revolution, the revolutionary ideas lost significance as the value of historical continuity quickly regained its predominant influence.39

The Code Civil was drafted in a general style, leaving it up to the judges to apply the law in specific situations. The code remains in force, but it has been changed a great deal in its application under the influence of case law. The code provides courts with the opportunity to interpret and develop its terms, which are often inexact, incomplete, or ambiguous.40 This is very different from the level of exactness obtained in the German BGB. In the course of time, academic commentary has become an important influence on the interpretation and application of the code. This allowed courts to interpret the code creatively according to the needs of society and the requirements of a modern economy.41 The French Code was eventually implemented in Belgium, the Netherlands, and has been influential in Italy, Spain, and Portugal. During the era of colonization this influence spread to large parts of Africa. It also spread to Latin America.

Unlike the common law, there is a clear distinction between the legal profession and judicial practice. In France, the judiciary is made up of career judges who are appointed after completing a number of state examinations following their university legal education.

Courts of first instance provide findings of facts and law, whereas courts of appeal are restricted to addressing issues of law. French decisions are written in a dense fashion with only brief references or synopses of the facts.42 This makes the interpretation very difficult for non-civilian lawyers to understand. This is especially the case for decisions of the Court of Cassation.43 Even though there is no principle of stare decisis, lower courts generally follow the decisions of higher courts.44 In this way the courts have concretized the broad and general statements of the Code Civil.45 Unlike their German counterparts, French lawyers aim at clarity and brevity of expression, eloquence of style, and form, and have little time for theoretical (academic) debate.46

2. Germanic Legal Family

Modern German law began with the reception of Roman law from the mid-fifteenth century. It involved the widespread acceptance of the institutions and concepts of Roman

37De Cruz, Comparative Law, 63.

38Zweigert and Kotz,¨ Comparative Law, 79.

39Id., 87–8.

40Id., 90.

41Id., 91.

42Id., 120–2.

43Id., 124.

44De Cruz, Comparative Law, 68.

45Id., 68–9; Zweigert and Kotz,¨ Comparative Law, 91–2.

46Zweigert and Kotz,¨ Comparative Law, 129ff.; Brierley, Major Legal Systems, 31; De Cruz, Comparative Law, 81.

law as well as intensive study and systematization of the Roman law. There was no strong centralized court system as there was in England, therefore, the shortcomings of Germanic law were filled by the ready-made Roman law. Roman law was also the law of Holy Roman Empire, providing further authority for its reception. Jurists of the time were trained in the universities of Italy and, later, Germany, where Roman law was extensively taught.47

During the Enlightenment, a movement to comprehensively codify law based on human reason and natural law developed. The leading lawyers of the time developed a deductive method, deducing particular legal rules from broad principles. This rational way of thinking became the dominant mode of teaching in the universities. This method was also applied to the study of and commentary on Roman law. In this way German law became the law of professors, abstract, rigorously organized, and sometimes widely removed from the reality or the needs of the time.

The period immediately preceding the German codification of the law saw the rise and influence of the Historical School with Von Savigny as its most famous proponent. This school saw law as a historically determined product of a civilization. Ironically, instead of intensifying the study and influence of Germanic law, Von Savigny and his followers turned to ancient Roman law as captured in Justinian’s Corpus Iuris Civilis. Von Savigny believed that Roman law embodied a higher and more eternal law, which transcended local Germanic law.48 This led to the development of the Pandectist School, which aimed at a dogmatic and systematic study of Roman law. They created a clear set of concepts integrated into a systematic exposition of the law.49 The BGB grew from these forces, which ultimately determined its character as a logical and highly systematized body of rules and concepts. However, its historical-conservative roots did not embody the great social changes taking place at the time.50 Other Germanic codes of the time are somewhat different, with the Austrian code described as imbued with simple common sense and the Swiss code containing a clear and popular style.51

In the BGB, the law of sales is contained in Book II, the Law of Obligations. This book deals with obligations arising from contracts generally and then, inter alia, from sales more specifically. Freedom of contract, premised on the beliefs that parties to a contract are free and equal partners at the point of formation, is the basic classical contract paradigm. The duty to respect contractual obligations follows naturally from this premise. This basic model of contracts did not take into account the realities of unequal bargaining positions, unfair contract terms, and oppressive contracts. Specifically targeted statutes, such as labor regulations, have intervened to provide protections. In other instances, the courts have checked these abuses by systematically developing controls based on general principles, such as the good faith requirement found in §242. This section has been extensively used to adapt the rigorous rules of the law of contract and their strict application to rectify the abuse of contracts and to meet the changing social and moral attitudes of society.52

47Zweigert and Kotz,¨ Comparative Law, 133–8; Brierley, Major Legal Systems, 37–45; De Cruz, Comparative Law, 79–81.

48Zweigert and Kotz,¨ Comparative Law, 138–41; Brierley, Major Legal Systems, 43.

49Zweigert and Kotz,¨ Comparative Law, 136–7.

50Id., 143–4.

51Id., 144.

52Id., 149–50.

The BGB has strongly influenced the laws of China and Japan in modernizing their legal systems. This is also true of many Eastern European countries after the demise of communism.53

German lawyers resort first and foremost to the BGB itself, but authoritative academic commentaries have had a profound influence on the development of the law. German judges and lawyers have looked to scholarly commentaries – that reference court decisions and other scholarly writings – when interpreting and applying the BGB.54 In Germany, like France, lawyers are trained first and foremost at universities. Judges are also career judges, similar to those in France. German judges’ academic training makes them open to the use of academic writings in their decisions.

It is a common misperception that court decisions do not have an important influence in civil law legal systems. The decisions of German courts are well reported and are extensively used and discussed in academic writings. Although there is no formal stare decisis principle in operation, lower courts follow the decisions of higher courts, especially those of the Bundesgerichtshof (the highest civil court in Germany).55 German court decisions tend to be briefer than their counterparts in the common law, but are less terse and better reasoned than French court decisions. Courts will usually provide a concise synopsis of the key facts of the case before a fairly comprehensive discussion of the law. The discussion of the law will refer to academic writings as well as other court decisions.

Court decisions have had a profound influence in many areas of contract law, developing new concepts and rules for situations not properly provided for in the BGB, such as novel fact patterns or the development of new transaction types. For example, the courts developed an extensive system of controls, based on the principle of good faith, regulating the use of unfair standard contract terms. These rules were eventually codified in the Allgemeine Geschaftsbedingungen¨ Gesetz of 1977. This act has now been subsumed into the 2002 revision of BGB in §§305 to 311.56

C. Characteristics of the Common and Civil Laws of Contract

This section compares the two legal systems’ laws of contract in six areas: role of codification, principles of freedom of contract and good faith, interpretation and the use of parol evidence, consideration and the binding force of offers, and specific performance and damages.

1. Codification

In the civil law countries, the law of contract as well as the law of sales has been comprehensively codified – German BGB, French Code Civil, Dutch Burgerlijk Wetboek and the Italian Codice Civile. In the common law countries, the law of contract has generally not been codified. However, in the United States, courts will, at times, cite

53Id., 154.

54Brierley, Major Legal Systems, 86–88, 112–13; Zweigert and Kotz,¨ Comparative Law, 1.

55Brierley, Major Legal Systems, 110.

56 ¨

P. Bassenge et al., Palandt Burgerliches¨ Gesetzbuch Uberblick, 71st ed. (Munich: Beck,2012), §305 Rn 3–6; F.J. Sacker¨ and R. Rixecker, Munchener¨ Kommentar zum Burgerlichen¨ Gesetzbuch (Munich: Beck, 2007), Band 2 Vor §305 Rn 1–17.

a scholarly treatise – Restatement (Second) of the Law of Contract.57 The law of sales has been codified in England since 1893 and in the United States since the adoption of the Uniform Commercial Code in the mid-1960s. In common law countries, sales law provides specialized rules, but remains embedded within the general law of contracts. The courts look to sales law for solutions, but if no solutions are found, they resort to the general law of contracts. Dealing with a codifying text like the CISG is therefore no more foreign to a common law lawyer than it is to a civil law lawyer. In its style, however, the CISG is more closely aligned with the civil codes than common law codes.

2. Freedom of Contract

Both the common law and civil law of contracts are strongly grounded in the principles of freedom of contract and party autonomy.58 It is a principle that is also found in Article 6 of the CISG. The parties are free to structure their agreements as they see fit, only subject to the restrictions of public policy. In the common law, these restrictions are narrowly framed and applied with circumspection. The validity of contract terms falls outside the scope of the CISG and is accordingly determined by national law.59

3. Principle of Good Faith

It is characteristic of civil law systems that the negotiation, conclusion, and enforcement of contracts are subject to the principle of good faith. Although the principle is widely stated in the different codes, such as BGB §242,60 the courts have established more specific rules. It has had a pervasive influence on the law of contract.61 The incorporation of good faith as a general clause in the BGB has allowed the courts to use it as a gap-filler and in the general development of German contract law.62 It has been functional in giving new meanings to old concepts and institutions and has formed the justification for the development of new remedies.63

In the common law system, good faith has played a much more modest role. As late as 1992, Sir Roy Goode noted the difficulty English law has had in adopting a general concept of good faith.64 Section 61 of the Sale of Goods Act 1979 states: “A thing is deemed to be done in good faith within the meaning of this act when it is in fact done honestly, whether it is done negligently or not.” Thus, good faith is only required in particular situations, rather than as a general requirement for the conduct of the parties. In English law the importance of legal certainty takes precedence over the harshness a particular rule may cause in individual circumstances.65

57Zweigert and Kotz,¨ Comparative Law, 270.

58Id., 324ff.

59See Article 4.

60Section 242. Performance in good faith. An obligor has a duty to perform according to the requirements

of good faith, taking customary practice into consideration. See Bassenge et al., Palandt Burgerliches¨

¨

Gesetzbuch Uberblick, §242 Rn 1–7; Sacker¨ and Rixecker, Munchener¨ Kommentar, § Rn 1–6.

61Schlechtriem, “Good Faith in German Law and in International Uniform Laws,” in Conferenze e Seminari 10 (ed. P. Saggi) (Rome, 1992), 24, available at http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem16. html.

62Id., 24.

63Id.

64Id.

65Roy Goode, “The Concept of ‘Good Faith’ in English Law,” in Saggi, Conferenze e Seminari 10.

The position in American law is somewhat different.66 Both the UCC and the Restatement Second impose an obligation of good faith on the parties. Section 1–203 of the UCC provides that “every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement.” Likewise, Section 205 of the Restatement states that: “Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.” The duty of good faith is not extended to the negotiations stage. However, even here there are specific rules that cater for certain situations that would be dealt with under the principle of in good faith in civil law systems.67 As a result, the acceptance of good faith as a general underlying principle is more palatable and easier to deal with for American lawyers than it is for English lawyers.

4. Interpretation of Contracts and Parol Evidence

In the common law, courts apply the parol evidence rule to exclude evidence (negotiations, prior dealings, trade usage, business custom) that contradicts a written contract. The rule is based on the common law’s objective theory of contract formation and aimed at preserving the integrity of the written instrument. In general terms the law of contract is not concerned with the subjective intent of parties, but with the outward manifestation of that intent.68 Although there are exceptions to the rule,69 the common law prefers form over substance to preserve legal certainty instead of searching for the true intention of the parties.

In English law, the parol evidence rule involves a rebuttable presumption that the writing was intended to include all the terms of the contract. English courts first examine the writing to determine whether it was meant to serve as a true record of the contract. Thus, under English law, the party relying on a writing has the benefit that, when the writing appears to be complete, it is presumed to represent the complete contract, subject to the other party’s right of rebuttal.70

In U.S. law, the parol evidence rule operates in two steps. A U.S. court asks first whether the writing was “integrated,” meaning whether the writing was intended to represent the final expression of the parties’ agreement. If the writing is determined to be a complete integration, then parol evidence may not be introduced either to contradict the written terms.71

The civil law proceeds from a subjective approach to the formation of contract, searching for the true intention of the parties. There are, therefore, no formal restrictions

66E. Allan Farnsworth, “Good Faith Performance and Commercial Reasonableness Under the Uniform Commercial Code,” 30 U. Chicago L. Rev. 666, 679 (1963); Robert S. Summers, “‘Good Faith’ in General Contract Law and the Sales Provisions of the Uniform Commercial Code,” 54 Virginia L. Rev. 195, 200, 232–3 (1968); Steven Burton, “Breach of Contract and the Common Law Duty to Perform in Good Faith,” 94 Harv. L. Rev. 369, 369, 372–3 (1980); E. Allan Farnsworth, “The Concept of Good Faith in American Law,” in Saggi, Conferenze e Seminari 10.

67E. Allan Farnsworth, “Good Faith Performance and Commercial Reasonableness Under the Uniform Commercial Code,” 30 U. Chicago L. Rev. 666, 679 (1963).

68Bruno Zeller, “The Parol Evidence Rule and the CISG: A Comparative Analysis,” 36 Comparative and International L.J. of Southern Africa (2003); Investors Compensation Scheme Limited v. West Bromwich Building Society [1998] 1 WLR 896.

69Zweigert and Kotz,¨ Comparative Law, 407.

70CISG-AC Opinion No. 3, “Parol Evidence Rule, Plain Meaning Rule, Contractual Merger Clause and the CISG” (October 23, 2004) (CISG-AC Opinion No. 3), Richard Hyland, Rapporteur, available at http://www.cisgac.com/default.php?ipkCat=128&ifkCat=145&sid=145.

71Id.

on the proof that parties may put forward and the content of the contract may be proven by any means, including the testimony of witnesses relating to the prior negotiations, even if the contract has been reduced to writing.72 However, the admissibility of evidence is not without restrictions. In German law, for instance, there is a presumption that the document accurately reflects the totality of the agreement, but that presumption is rebuttable by any evidence denying the contract. Article 1341 of the French Code Civil lays down a rule similar to the parol evidence rule, but the rule is subject to many exceptions. One of the exceptions is that this rule does not apply to commercial transactions.73

5. Consideration and the Binding Force of Offers

It is a common feature of most legal systems that the contract formation process is analyzed as consisting of an offer and an acceptance. In the common law, an offer is not binding on the offeror and may be revoked at any time before acceptance by the offeree. It lapses at the time set in the offer or within a reasonable time where no time is set, or when it is revoked.74 It is therefore nonbinding and there are no consequences attached to the revocation, even at a very late stage in the proceedings and even though the offeree may have changed its position or incurred certain expenses.75

The reason for the nonbinding nature of offers is found in the doctrine of consideration, which requires that each agreement must be supported by consideration. Consideration may consist of payment in money or kind or in a returned promise. In most instances the offeree provides no counterpromise or consideration, consequently no binding agreement arises.76

In the Romanistic legal system, an offer has a stronger legal effect. Where an offer has been made, the offer needs to be respected for a reasonable period of time. Where the offer is revoked during this period, the offeror is liable for any provable damages incurred by the offeree. The liability is viewed as either arising from tort or from the breach of a preliminary contract.77

In the Germanic legal system, an offer remains binding for the period stated in the offer or where no period is stated for a reasonable period of time unless the offeror has clearly indicated that the offer is not binding.78 Any attempted revocation is simply ineffective and may be ignored by the offeree. The offeree is entitled to accept the offeror within the stated time or within a reasonable time where no time limit is stated. Acceptance within such a time results in a valid and binding contract. Where the binding nature of the offer is excluded in the offer, it is not treated as an offer but as an invitation to make an offer.79

72Zweigert and Kotz,¨ Comparative Law, 407; see also CISG-AC Opinion No. 3.

73Zweigert and Kotz,¨ Comparative Law, 369–70; 407.

74Id., 357–9.

75Id., 357–9.

76Id., 357.

77Id., 359–61.

§145 Rn 1–5 ff.; Sacker¨ and Rixecker, Munchener¨ Kommentar, §145 Rn 1–7.