International Sales Contracts

The UN Convention andRelated Transnational Law

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International Sales Contracts

The UN Convention andRelated Transnational Law

Eldon H. ReileyProfessor of Law Emeritus

University of San Francisco

Carolina Academic PressDurham, North Carolina

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Copyright © 2008Eldon H. Reiley

All rights reserved.

ISBN: 978-1-59460-478-2LCCN: 2008002580

Carolina Academic Press700 Kent Street

Durham, North Carolina 27701Telephone (919) 489-7486

Fax (919) 493-5668

www.cap-press.com

Printed in the United States of America

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This book is dedicated to the twenty-nine law students who were in my CISG class inPrague in the 2007 summer abroad program of the University of San Francisco. Thesehearty folks endured the final pre-publication version of the book. They identified hun-dreds of matters ranging from typographical errors to areas requiring clarification ordifferent emphasis. They also taught me several rules of punctuation. Much of this wasdone in small groups on hot July afternoons over countless pints of Budvar beer.

I am grateful for their help. Such remaining error as survived this process, should beblamed on Budvar.

E.H.R.May, 2008

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Summary of Contents

Preface xxiiiAcknowledgment xxvTable of References to the CISG xixChapter 1 Historical and Geographical Context of CISG 3Chapter 2 Scope of Application of CISG 25Chapter 3 Interpretation of CISG 61Chapter 4 Basic Comparative Distinctions 85Chapter 5 Contract Formation and Modification 105Chapter 6 Excuse (Exemption) and Hardship 127Chapter 7 Performance Issues: Warranty, Payment, Risk, Cure 149Chapter 8 Remedies for Breach at Common Law and Under the UCC 171Chapter 9 Remedies Under the CISG 187Chapter 10 Specific Performance 219Chapter 11 Dispute Resolution: International Arbitration 235Chapter 12 Recent Developments: Electronic Transactions,

Government Controls, Treaties 255Chapter 13 Drafting International Sales Contracts 271Summary of contract clauses by number and titles 271Appendix A United Nations Convention on Contracts for the International

Sale of Goods (Vienna, 1980) “CISG” 289Appendix B UNIDROIT Principles of International Commercial

Contracts 2004 315Appendix C Introduction to the Principles of European Contract Law 353Appendix D United Nations Convention on the Recognition and Enforcement

of Foreign Arbitral Awards (New York, 1958) 357Appendix E Convention on Choice of Court Agreements (2005) 363Appendix F UNCITRAL Conciliation Rules 375Appendix G UNCITRAL Arbitration Rules 383Appendix H United Nations Convention on the Limitation Period in the

International Sale of Goods (1974, 1980 Protocol) 397Appendix I United Nations Convention on the Use of Electronic

Communications in International Contracts (2005) 417Appendix J Convention Relating to a Uniform Law on the

International Sale of Goods (1964) and Annex — “ULIS” 427Appendix K Convention Relating to a Uniform Law on the Formation of

Contracts for the International Sale of Goods (1964) and Annex — “UFL” 451

Index 459

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Contents

Table of References to the CISG xixPreface xxiiiAcknowledgment xxvChapter 1 Historical and Geographical Context of CISG 3

§1.1 Contracting States and Treaty Acronym 3§1.2 International Treaty Process: Where do Treaties Come From? 4§1.3 Treaty Terminology 8§1.4 Historical Context of CISG 9§1.5 Reservations to CISG 11§1.6 Judicial Interpretation of CISG 12

CISG, Article 7 12§1.7 Judicial Interpretation in the United States 12§1.8 — Jurisdiction of U.S. Federal Courts in CISG Cases 13

28 U.S.C. §1331 1328 U.S.C. §1332 14Implus I.D. International. S. L. v. Psion Teklogix, Inc. 14

§1.9 Locating and Using International Authority 15§1.10 What Is International Law? 17§1.11 Discussion Problems 24

Chapter 2 Scope of Application of CISG 25§2.1 Introduction 25

Asante Technologies, Inc. v. PMC-Sierra, Inc. 26§2.2 Type of Transaction 28§2.3 — Definition of Goods in Domestic U.S. Law. 29

UCC §2-105 (original). 29UCC §2-103(k) (2003 revision). 30UCC §9-102(a)(44)(revised). 30

§2.4 — Definition of Goods in CISG 31§2.5 — Leases of Goods 32§2.6 — Sales and Licenses of Software 32§2.7 — Mixed Transaction Contracts 34

CISG, Article 3 34§2.8 Type of Issue 35

CISG, Article 4 36CISG, Article 5 36

§2.9 — Validity 36§2.10 — Property in Goods 39§2.11 — Death or Personal Injury 40

CISG, Article 5 40

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§2.12 Location of Parties 40CISG, Article 1 41

§2.13 — CISG Applicability under Article 1(1)(a) 41§2.14 — CISG Applicability under Article 1(1)(b) 43§2.15 — Other Grounds for Applicability 49§2.16 Opting Out of the CISG 50

CISG, Article 6 50§2.17 Opting into the CISG 52

UCC §1-105(1). 53UCC §1-301 (c) and (f) (revised). 53

§2.18 Governing Law Clauses 55§2.19 Discussion Problems 56

Prime Start Ltd. v. Maher Forest Products Ltd. 57

Chapter 3 Interpretation of CISG 61§3.1 Relationship between CISG, UNIDROIT Contract Principles and

Principles of European Contract Law 621. CISG was first in time. 622. Differences in Scope of Application 623. Hard Law or Soft Law? 634. Concerns for American Lawyers 635. Use of UNIDROIT Contract Principles in Cases within CISG 65

§3.2 Interpretation: Context of the Transaction 67§3.3 Interpretation: Understanding Article 7 69

CISG, Article 7 70§3.4 Commentaries on Article 7 71§3.5 Distillation of the Commentaries 73§3.6 Illustrative Examples 75

Example 3.1 (standing timber as goods) 75Example 3.2 (addition of arbitration clause) 76Example 3.3 (addition of arbitration clause followed by performance) 76Example 3.4. (time to fix currency exchange rate) 77Schmitz-Werke GmbH & Co. v. Rockland Industries, Inc. 77Example 3.5 (attempt to recover attorney fees in U.S. court) 78Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Co., Inc., 79CISG-AC Opinion No. 6, excerpt 80Example 3.6 (limitation of damages) 81Berry v. Ken M. Spooner Farms, Inc. 81

§3.7 Of Maps and Gaps, External or Ethereal? 82§3.8 Role of Foreign Law in U.S. Courts 83§3.9 Discussion Problem 83

Chapter 4 Basic Comparative Distinctions 85§4.1 CISG and the Statue of Frauds 85

CISG, Article 11 85CISG, Article 29 85CISG, Article 96 86CISG, Article 12 86

§4.2 CISG and the Parol Evidence Rule 88

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UCC § 2-202 (Pre-2003 text). 89CISG, Article 8 89Filianto, S.p.A. v. Chilewich Int Corp. 90Beijing Metals & Minerals Imports/Export corp.

v. American Bus. Ctr. Inc. 90MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D’Agostino 90

§ 4.3 CISG and Consideration 95CISG, Article 11 96CISG, Article 29 96Geneva Pharmaceuticals Technology Corp. v. Barr Laboratories, Inc. 97UNIDROIT Contract Principles, Article 3.2 99

§ 4.4 CISG and the Perfect Tender Rule 99Prescott & Co. v. J.B. Powles & Co. 100UCC § 2-601. 100UCC § 2-508. 100UCC § 2-612. 101

§ 4.5 Discussion Problems 103

Chapter 5 Contract Formation and Modification 105§5.1 Introduction 105§5.2 Indefiniteness: Definition of Offer: Open Price Term 106

CISG, Article 14 106UCC §2-305. 106CISG, Article 55 106UNIDROIT Contract Principles, Article 5.1.7 107(Price determination) 107

§5.3 Revocation of Offers 108Restatement (Second) Contracts, §87, Option Contract 109Uniform Commercial Code, §2-205. Firm Offers 109CISG, Article 15 110CISG, Article 16 110CISG, Article 17 110

§5.4. “Mail Box Rule” 111Adams and Others against Lindsell and Another 112

§5.5 — “Mail Box Rule” and Definition of Issues 113Morrison v. Thoelke 114

§5.6 “Mirror Image Rule”: Battle of the Forms 116CISG, Article 19 118CISG, Article 9 120UNIDROIT Contract Principles, Article 2.1.19 120(Contracting under standard terms) 120UNIDROIT Contract Principles, Article 2.1.22 121(Battle of forms) 121UNIDROIT Contract Principles, Article 2.1.12 121(Writings in confirmation) 121UCC §2-207 (original). 121UCC §2-206(3) (revised). 122UCC §2-207 (revised). 122

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§5.7 Modification of Existing Contracts 122UCC §2-209. 122CISG, Article 29 123Chateau des Charmes Wines Ltd. v. Sabante USA Inc. 123Berry v. Ken M Spooner Farms, Inc. 124

§ 5.8 Discussion Problems 126

Chapter 6 Excuse (Exemption) and Hardship 127§6.1. Excuse at Common Law 127

Paradine v. Jane 128Taylor v. Caldwell 129Carroll v. Bowersock 131Albre Marble & Tile Co. v. John Bowen Co. 132

§6.2 Excuse under the UCC 134UCC §2-613. 134UCC §2-614. 134UCC §2-615. 135UCC §2-616. 135UCC §2-615. 136

§6.3 Exemption under the CISG 137CISG, Article 79 138CISG, Article 80 138Raw Materials Inc. v Manfred 140

§6.4 Hardship and Force Majeure under UNIDROIT Contract Principles 141UNIDROIT Contract Principles, Article 7.1.7 141(Force Majeure) 141UNIDROIT Contract Principles, Article 6.2.3 142(Effects of hardship) 142

§ 6.5 Relationship of UNIDROIT Contract Principles on Hardship to CISG, Art. 79 142Summary 145

§6.6 Discussion Problems 146

Chapter 7 Performance Issues: Warranty, Payment, Risk, Cure 149§7.1 Warranties of Quality and Title 149

UCC, §2-313. 150UCC, §2-714. 150CISG, Article 35 152CISG, Article 51 152

§7.2 Payment Provisions: Letters of Credit, UCP 153§7.3 Passing of Risk: Delivery, Title, Insurance, Incoterms 155§7.4 Contract Interpretation: Usage, Course of Dealing, Course

of Performance 158CISG, Article 8 159CISG, Article 9 159

§7.5 Performance Problems 160§7.6 — Future Performance Concerns 161

UCC §2-609. 161UCC §2-610. 162

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UCC §2-611. 162CISG, Article 71 163CISG, Article 72 163

§7.7 — Withholding Performance 164§7.8 — Tender and Cure 165

UCC § 2-508 (original). 165CISG, Article 37 166CISG, Article 48 166CISG, Article 47 167CISG, Article 39 167

§7.9 — Installment Contracts. 167UCC §2-612(2). 168CISG, Article 73 168

§7.10 Summary of Approach to Remedies 169

Chapter 8 Remedies for Breach at Common Law and Under the UCC 171§8.1 Severity of Breach 171§8.2 Common Law Contract Remedies 171§8.3 Judicial Limitations on Expectancy 173

Hadley v. Baxendale 175Victoria Laundry Ltd. v. Newman Industries, Ltd. 177Restatement (Second) Contracts §351 178

§8.4. Structure of Remedy Provisions in the UCC 1791. Buyers’ remedies under UCC Article 2. 179

UCC §2-711. 179UCC §2-712. 180UCC §2-713. 180UCC §2-714. 180UCC §2-715. 181UCC §2-717. 181

2. Sellers’ Remedies under UCC Article 2 181UCC §2-704. 182UCC §2-703. 182UCC §2-708. 183UCC § 2-710 (original). 184

§ 8.5 Contractual Control of Damages 184UCC § 2-718. 184UCC §2-719(3). 185

Chapter 9 Remedies Under the CISG 187§9.1 Generally 187

CISG Part III. Sale of Goods 188§9.2 Right to Avoid; Fundamental Breach; Consequences of Avoidance 189

CISG, Article 47 191CISG, Article 49 191CISG, Article 51(2) 193

§9.3 Damage-Type Remedies in CISG 193CISG Article 74 193

§9.4 — Relationship between Articles 74 and 75 and 76 194

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§9.5 — Mitigation 195CISG, Article 77 195

§9.6 — Interest 196CISG, Article 78 197CISG, Article 84 (1) 197UNIDROIT Principles, Article 7.4.9 197

§9.7 — Currency issues 198UNIDROIT Principles, Article 7.4.12 198

§9.8 — Reduction of Price by Buyer 199CISG, Article 50 199UCC §2-717. 1991. Calculation under Article 50 1992. Steps to Invoke Article 50 200

§9.9 — Contractual Control of Damage Remedies 2011. Liquidated Damages Clauses 201

UNIDROIT Contract Principles, Article 7.4.13 202(Agreed Payment for non-performance) 202

2. Clauses Limiting Remedies 202§9.10 Buyer’s Remedies for Breach by Seller 203§9.11 — Breach Due to Lack of Conformity 204§9.12 —— Definition of Conformity 204

CISG, Article 35(2) 2059.13 —— Duty to Examine and Give Notice 205

1. Time to Comply 206CISG-AC Opinion no. 2 207

2. Extent of Examination 2073. Sufficiency of Notice 2074. Consequences of Failure and Excusing Provisions, Art. 40 and 44 208

CISG, Article 40 209CISG, Article 44 209

§9.14 —— Seller’s Right to Cure Lack of Conformity 210§9.15 —— Restitution Obligation Following Avoidance 211

CISG, Article 81 (2) 211CISG, Article 82 (1) 211CISG, Article 82 (2) 212

§9.16 — Breach due to Delivery Failures 212CISG, Article 52 213

§9.17 — Breach due to Conflicting Rights of Third Parties 213CISG, Article 43 214CISG. Article 40 214

§9.18 — Roadmap (Checklist) of Buyer’s Remedies and Duties 214Roadmap of Buyer’s Remedies under CISG 216

§9.19 Seller’s Remedies for Breach by Buyer 217§9.20 Duty to Preserve the Goods 217

CISG, Article 85 217CISG, Article 86 218

Chapter 10 Specific Performance 219§10.1 Specific Performance at Common Law 219

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§10.2 Is the Irreparable Injury Rule Dead? 221§10.3 Current American Law and Specific Performance 222§10.4 UCC Article 2 and Specific Performance 223

UCC §2-709. 223UCC §2-716. 223UCC §2-716(1) (Revised) 224

§10.5 CISG and Specific Performance 224CISG, Article 46 225CISG, Article 62 225

§10.6 — The Article 28 Compromise 225CISG, Article 28 226

§10.7 —— What is Meaning of “would do so”? 226§10.8 —— What is Meaning of “a court”? 226§10.9 —— What is Meaning of “under its own law”? 227§10.10 —— What is Meaning of “similar contracts of sale”? 227§10.11 —— May Parties Waive Article 28? 228§10.12 —— How Should American Courts Apply Article 28? 228

Magellan International Corp. v. Salzgitter Handel GmbH 22910.13 — Other Limits on Right to Specific Performance Under CISG 229§10.14 —— CISG Article 77 and Specific Performance 230§10.15 —— CISG Article 79 and Specific Performance 231

CISG, Article 79 (5) 231§10.16 —— CISG Article 82 and Specific Performance 232

CISG, Article 82 232§10.17 UNIDROIT Contract Principles and Specific Performance 232

UNIDROIT Contract Principles, Article 7.2.2 233(Performance of non-monetary obligation) 233

§10.18 Discussion Problems 233

Chapter 11 Dispute Resolution: International Arbitration 235§11.1 Overview — The Treaty Background 235

New York Convention, Article II 236Choice of Court Convention Article 8 Recognition and Enforcement 237

§11.2 Overview — Ethical Obligations 237§11.3 Overview — Dispute Resolution Alternatives 238

1. Renegotiation 2382. Mediation and Conciliation 2393. Litigation in U.S. Courts 2394. Litigation in Foreign Courts 2405. Forum Selection Clauses 240

§11.4. Arbitration of Private Transnational Disputes 241§11.5 — Drafting Arbitration Clauses 243

1. Whether to Arbitrate 2442. Should Mediation/Conciliation be a Pre-condition? 2453. Scope of Issues Subject to Arbitration 2454. Institutional Supervision or Ad Hoc Arbitration? Rules of Arbitration 2465. Number, Selection and Replacement of Arbitrators 2476. Location of Arbitration 2477. Language of Arbitration 248

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8. Interim Relief 2489. Party Contact with Arbitrators 24910. Procedural Rules; Discovery 24911. Reasons for Award 24912. Confidentiality of Award 24913. Calculation of Interest 25014. Allocation of Costs 25015. Currency of Award and Conversion Rate 25116. Governing Law 251

§11.6 — Anatomy of an International Arbitration 251UNCITRAL Arbitration Rules, Article 15 252

§ 11.7 Litigation/Arbitration Compared 252

Chapter 12 Recent Developments: Electronic Transactions,Government Controls, Treaties 255

§12.1 Electronic Transactions 2551. Issues Relating to Electronic Signatures 2562. Issues Relating to Agency 2573. Issues Relating to Location of Parties 2574. Issues Relating to Place and Time of Contract 2575. Issues Relating to Consumer Contract Exclusion in CISG art. 2(a) 2586. Issues Relating to Contract Terms 258

§12.2 National Government Controls over International Sales 260§12.3 — U.S. Laws 261§12.4 — Foreign Law 264§12.5 Overview of Treaties Relevant to Transnational Sales 265

1. Limitation Convention 2652. Cape Town Convention and other Treaties Relating

to Security Interests 2663.Treaties and Laws Relating to Trans-Border Insolvency Proceedings 268

Chapter 13 Drafting International Sales Contracts 271§13.1 Introduction: To Be a Copy Cat Is a Good Thing — To an Extent 272§13.2 Clauses Discussed in Prior Chapters 273§13.3 Governing Law Clauses: Opt-In, Opt-Out and Back-Up 274§13.4 — Opting Into the CISG 276§13.5 — Opt-out of CISG 277§13.6 — Governing Law Clause in Arbitration Agreement 277§13.7 Merger Clause to Preserve Parol Evidence Rule: No Oral Modifications 278§13.8 Revocable and Irrevocable Offers 279§13.9 Force Majeure and Hardship Clauses 279§13.10 Clauses Relating to Incoterms, UCP and Usage 280§13.11 Clause Providing for Retained Security Interest to Secure

Payment Obligation 281§13.12 Clauses Relating to Remedies 283

1. Interest rate 2832. Time of Currency Conversion 2843. Exclusion of CISG Article 50 2854. Contractual Right to Require Specific Performance 285

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5. Attorney Fees 2856. Limitation of Damage Remedies 2867. Liquidated Damages 287

§13.13 Dispute Resolution Clauses 287§13.14 Signatures on Multiple Copies 288

Summary of contract clauses by number and titles 271CLAUSE 1. Recommended Governing Law Clause for contracts within

the CISG (specifying UNIDROIT Contract Principles as back-up law.) 275CLAUSE 1A. Alternative Governing Law Clause for contracts within

the CISG, specifying domestic law as back-up law. 276CLAUSE 2. “Opt-in” Clause for contracts not within the CISG specifying

UNIDROIT Contract Principles as back-up law. 276CLAUSE 2A. Alternative “Opt-in” Clause for contracts not within the

CISG specifying domestic law as back-up law. 276CLAUSE 3. Opt-out clause. 277CLAUSE 4. Governing law clause for arbitration agreement. 278CLAUSE 5. Merger clause (AC opinion no. 3). 278CLAUSE 5A. Alternative merger clause excluding negotiations,

practices and usages. 278CLAUSE 6. No oral modifications clause. 279CLAUSE 7. Irrevocable Offer with expiration date. 279CLAUSE 7A. Alternative Irrevocable Offer 279CLAUSE 8. Revocable Offer with expiration date. 279CLAUSE 9. Force Majeure. 280CLAUSE 10. Hardship 280CLAUSE 11. Incoterms. 281CLAUSE 12. UCP 281CLAUSE 13. Derogation from trade usage. 281CLAUSE 14. Retention of purchase money security interest.

Sale by foreign seller to U.S. buyer. 282CLAUSE 14A. Retention of PMSI by U.S. seller 282CLAUSE 15. Specific interest rate. 284CLAUSE 15A. Generic rate of interest. 284CLAUSE 15B. Generic rate of interest established by UNIDROIT formula. 284CLAUSE 16. Currency exchange (UNIDROIT Contract Principles) 284CLAUSE 17. Exclusion of CISG article 50. 285CLAUSE 18. Agreement for specific performance 285CLAUSE 19. Attorney fees allocated to losing party. 286CLAUSE 19A. Attorney fees borne by each party. 286CLAUSE 20. Damage exemption clause. 286CLAUSE 20A. Damage exemption clause extending definition

of conformity and time for identifying non-conformity. 286CLAUSE 21. Liquidated damages clause 287CLAUSE 22. Exclusive forum selection clause. 287CLAUSE 22A. Non-exclusive forum selection clause. 287CLAUSE 23. Signatures on counterparts. 288

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Appendix A United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) “CISG” 289

Appendix B UNIDROIT Principles of International Commercial Contracts 2004 315

Appendix C Introduction to the Principles of European Contract Law 353

Appendix D United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) 357

Appendix E Convention on Choice of Court Agreements (2005) 363

Appendix F UNCITRAL Conciliation Rules 375

Appendix G UNCITRAL Arbitration Rules 383

Appendix H United Nations Convention on the Limitation Period in the International Sale of Goods (1974, 1980 Protocol) 397

Appendix I United Nations Convention on the Use of Electronic Communications in International Contracts (2005) 417

Appendix J Convention Relating to a Uniform Law on the International Sale of Goods (1964) and Annex — “ULIS” 427

Appendix K Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods (1964) and Annex — “UFL” 451

Index 459

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Art. 1: 31, 32, 33, 41, 54, 631(1)(a): 14, 41, 42, 43, 48, 58, 59, 871(1)(b): 10, 14, 41, 43–49, 58, 59, 871(2): 42, 2571(3): 42

Art. 2: 672(a): 28, 2582(b): 282(c): 282(d): 282(e): 28, 29, 762(f): 28, 29

Art. 3: 34, 35,3(1): 34, 353(2): 34, 35

Art. 4: 35–36, 63, 143, 274, 286, 2874(a): 35–39, 81, 97, 98, 123, 1514(b): 36, 39, 153, 213

Art. 5: 36, 40, 63

Art. 6: 26, 50, 51, 53, 54, 61, 65, 67,69–75, 82, 160, 228

Art. 7: 67–737(1): 12, 32, 65, 69, 70, 71, 72, 73, 76,

82, 143, 230, 2767(2): 14, 65, 69, 70, 71, 72, 73, 76, 77,

82, 102, 143, 145,197, 202, 276

Art. 8: 74, 89, 94, 158, 1598(1): 91, 1598(2): 159

8(3): 89, 94, 104, 159

Art. 9: 120, 158, 159, 2819(2): 143, 160, 281

Art. 10: 41, 42, 56

Art. 11: 85–88, 96

Art. 12: 86, 87

Art. 13, 256

Art. 14: 106, 107, 108

Art. 15: 110, 116, 256

Art. 16: 110, 279

Art. 17: 110

Art. 18:18(2): 116

Art. 19: 118, 15119(1): 76, 11919(2): 11919(3): 119, 124

Art. 25: 65, 189–191, 264

Art. 26: 168, 189

Art. 27: 189

Art. 28: 225–229, 285

xix

Table of References to the CISG

(Primary discussions are indicated by bold face.)

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Art. 29: 85, 86, 96, 122–12629(1): 123, 12429(2): 123, 278–279

Art. 31: 213

Art. 32: 213

Art. 34: 103

Art. 35: 149, 151, 152, 204–20735(1): 204, 20535(2): 152, 204, 205

Art. 36: 151

Art. 37: 166, 192, 201, 204, 207, 208, 210

Art. 38: 205–208, 210, 213

Art. 39: 152, 205–208, 21339(1): 167

Art. 40: 205, 208–210, 213, 214

Art. 41: 151, 153, 203, 213, 214

Art. 42: 151, 214

Art. 43: 151, 153, 203, 206, 213–214

Art. 44: 205, 206, 208–210, 213

Art. 46: 169, 188, 224, 22546(1): 23046(2): 140, 152, 188, 189, 207, 225, 23046(3): 140,152, 188, 207, 225, 230

Art. 47: 167, 188, 190, 191, 192, 201, 211

Art. 48: 65, 166, 191, 192, 193, 201, 207,208, 210, 211

Art. 49: 166, 169, 189, 191–192, 193,201,203, 208, 211, 230

49(1)(b): 192, 203, 21349(2)(a): 192, 21349(2)(b): 192, 211

Art. 50: 152, 169, 198, 199–201, 215,230, 285

Art. 51: 152, 192, 21351(1): 20451(2): 192, 193

Art. 52: 102, 166, 169, 203, 213

Art. 55: 105, 107, 108

Art. 61: 217

Art. 62: 188, 217, 225

Art. 63: 188, 191

Art. 64: 169, 189, 203, 217

Arts. 66–70: 156

Art. 66: 156, 157

Art. 67: 157, 189

Art. 68: 157

Art. 69: 189

Art. 70: 157

Art. 71: 102, 162, 163, 164, 191

Art. 72: 162, 163, 168, 189, 19172(2): 163, 189

Art. 73: 102, 168, 173, 19373(3): 193

Art. 74: 74, 78, 79, 80, 141, 169, 178,193–195, 215, 230, 285–286

Art. 75: 169, 193, 194, 195, 211, 217

Art. 76: 169, 193, 194, 195, 211

Art. 77: 169, 195–196, 230–231, 233

Art. 78: 65, 169, 196–198, 283–284

xx TABLE OF REFERENCES TO THE CISG

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Art. 79: 137–147, 233, 28079(1): 138, 14079(2): 13979(3): 13979(4): 14079(5): 65, 137, 139, 140, 231–232,

Art. 80: 137, 138

Art. 81: 147, 163, 19381(2): 211

Art. 82: 211, 21282(1): 211, 230, 23282(2): 211, 212, 232

Art. 84: 169, 193, 19884(1): 169, 19784(2): 212

Arts. 85–88: 217

Art. 85: 217

Art. 86: 217, 218

Arts. 89 – 101: 8, 10

Art. 91:91(4): 8

Art. 92: 11

Art. 93: 11

Art. 94: 11

Art. 95: 11

Art. 96: 11, 86

Art. 98: 11

Art. 99: 899(1): 8

TABLE OF REFERENCES TO THE CISG xxi

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Preface

This book has had a long gestation period. I first taught a CISG-related course inShaghai in May 1989. (That course finished on the Friday before the weekend events inTiananmen Square — but that is another story.) The East China School of Law hadasked me to teach a course comparing the common law of contracts to the UCC. Iadded a component on the U.N. Convention on Contracts for the International Sale ofGoods to which both the U.S. and China were parties and which had taken effect a yearearlier. Over the next nineteen years the materials from that course gradually evolvedinto what is contained in the following chapters.

The present text is designed to support a 2 or 3 credit course on Sales Law applicableto transnational transactions. It also may be used as a source of materials to be drawnon to provide a CISG supplement for basic JD contract courses. However, while writing,I found that I was constantly thinking about what discussion would be most useful tothat group of young (compared to me) U.S. attorneys who had not had a course on theCISG but were confronted with international sales issues. (During its first decade, 1988-1998, the CISG was largely ignored by both U.S. courts and U.S. legal education.) Forthat group I hope this book might be useful as a research starting place. I also hope itmight encourage American attorneys to draft governing law clauses that affirm the ap-plicability of the CISG instead of drafting clauses that seek to opt-out.

The first three chapters consider the nature, function and sources of internationallaw, the scope of application of the CISG, and the highly structured rules for interpreta-tion of the CISG, including the relationship of the Convention to the UNDROIT Con-tract Principles. The fourth chapter is a celebration of the absence from the CISG ofcommon law anachronisms (namely the Statute of Frauds, Parol Evidence Rule, Con-sideration and the Perfect Tender Rule.) The focus then turns to formation (and modi-fication) excuse, and remedies including specific performance. I attempt to identify andseparate issues which are clearly determined under the CISG from those issues as towhich the outcome is not so clear. As to the latter, I attempt to present the reader withcontrasting points of view in the actual words of various international scholars.

The final chapters of this book endeavor to consider CISG transactions in the contextof a larger body of rapidly developing transnational law. This includes treaties dealingwith dispute resolution, electronic communications, limitation periods, secured trans-actions and insolvency. The complex structure of national import/export laws and reg-ulations is also noted.

The Appendix is very large. I thank the publisher for permitting me to include thefull text of a number of related treaties, including the twin predecessor treaties to theCISG (the ULF and the ULIS), the “New York” Arbitration Convention and the 2005Choice of Court Convention. A set of arbitration rules and conciliation rules is also in-cluded. Most importantly, the full text of the CISG is accompanied by the full text of

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the UNIDROIT Principles of International Commercial Contracts. I hope the readerwill find this mini-reference library a useful supplement to the discussions in the text.

I wish to thank the folks at Carolina Academic Press, especially Keith Sipe, KarenClayton, Reuben Ayres, Kelly Miller and Martha Hopper, for their patience and assis-tance.

Thanks also to University of San Francisco Law School Deans, Jay Folberg and JeffBrand, who supported me in developing and teaching a number of CISG relatedcourses over the long gestation period of this book. USF law reference librarians LeeRyan and John Schaffer provided significant research assistance.

Finally, I wish to acknowledge the contribution of my partner, Stefan Ziegler, whosepresence at my side for the last 15 years has, in no small measure, made the completionof this book possible.

E.H.R.May, 2008

xxiv PREFACE

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Acknowledgment

I wish to acknowledge various permissions to quote from a number of prior publica-tions. Foremost among these is Albert Kritzer, Executive Secretary of the Institute of In-ternational Commercial Law at Pace University School of Law for permission to quotefrom various articles on the Pace CISG database and, more generally, for his supervi-sion of that database. The Pace database is an enormously useful reference tool whichmakes a huge reservoir of scholarly writings and judicial opinions on the CISG freelyavailable and only a computer click away.

Additional acknowledgment is expressed to Professor Douglas Laycock of the Uni-versity of Texas with respect to his article on the Irreparable Injury Rule; ProfessorsClayton Gillette, New York University, and Steven Walt, University of Virginia, with re-spect to their book on Sales Law, Domestic and International; Charles Routh, Seattle at-torney, with respect to his comments about arbitration; and Professor Harry Flechtnerat the University of Pittsburgh, who I thank not only for permission to quote from hisarticle on the MCC-Marble case, but even more significantly for THE CISG SONG (dis-cussed on page 4 of the text). There should be more areas of law where we have some-thing to sing about!

Additional acknowledgment is express for permission to reprint:Selected sections from Restatement, Second, Contracts, copyright 1981 by the Amer-

ican Law Institute. Reprinted with permission. All rights reserved.Selected sections from Restatement, Second, Conflict of Laws, copyright 1971 by the

American Law Institute. Reprinted with permission. All rights reserved.Selected sections from Uniform Commercial Code, copyright by the American Law

Institute and the National Conference of Commissioners on Uniform State Laws. Re-produced with the permission of the Permanent Editorial Board for the Uniform Com-mercial Code. All rights reserved.

The UNIDROIT Principles of International Commercial Contracts, copyright 2004by the International Institute for the Unification of Private Law. Reprinted with permis-sion. All rights reserved.

Selected excerpts from Commentary on the UN Convention on the InternationalSale of Goods (CISG) (2005) edited by Schlechtriem & Schwenzer. By permission ofOxford University Press. This work is discussed in Chapter 1, §1.9 at pages 16 and 17.

The Hague Convention of 30 June 2005 on Choice of Court Agreements. By permis-sion of the Hague Conference on Private International Law (www.hcch.net).

United Nations Convention on the Recognition and Enforcement of Foreign ArbitralAwards (New York, 10 June 1958), and United Nations Convention on the LimitationPeriod in the International Sale of Goods (New York, 14 June 1974) together with Reso-lution 31/98 adopted by General Assembly on 15 December 1976, and United NationsConvention on the Use of Electronic Communications in International Contracts and

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UNCITRAL Conciliation Rules, and UNCITRAL Arbitration Rules. All of the foregoingby permission of United Nations Commission on International Trade Law (UNCI-TRAL).

The format of this book is such that it contains numerous references to or short quo-tations from other works. Some of these are not specifically mentioned above becausethey are included in the general permission from the Pace CISG database or because thereferences were such that it was deemed that specific copyright permissions were not re-quired. Nevertheless, the author wishes to acknowledge his indebtedness to the authorsof the vast and rich literature on International/Transnational Sales Law from which thisanalysis has benefited. My indebtedness to the thinking of others extends far beyond theworks quoted or specifically cited in the text and footnotes.

xxvi ACKNOWLEDGMENT

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