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Ch.17 Conclusion and Observations

From: Damages Under the Convention on Contracts for the International Sale of Goods (3rd Edition)

Bruno Zeller

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Construction of contract — UN Sales Convention and damages

(p. 317) Chapter 17  Conclusion and Observations


17.01  This chapter draws attention to some of the more important points in the book. In particular, it shows that

  • •  the dispute resolution mechanism in the CISG is successful and leads to the success of the CISG

  • •  unification of substantive law is the easiest way to bring uniformity to a globalized world and keep the law in step with economic developments

  • •  the language of the CISG comprises ‘earthy’ words not tied to any legal doctrine

  • •  Article 74 is a wide-reaching article explaining not only the extent of damage but also how damages are to be calculated through the foreseeability rule

  • •  damages are limited and there is a duty to mitigate

  • •  exemptions owing to unforeseen circumstances are limited and the CISG has a desire to keep the contract alive as long as possible

  • •  an anticipatory breach pursuant to Articles 71 to 73 is also a unique feature of the CISG, specifically Article 71

  • •  the UNIDROIT Principles can assist in interpreting matters that are not expressly settled in the CISG

  • •  Regional harmonisation efforts are not a substitute for the CISG and can be in direct conflict with the CISG or at least a distraction from the Convention.

(p. 318) I.  Introduction

17.02  The starting point of this book was the observation that an effective dispute resolution mechanism is critical to the success of an economy.1 The problem is that solutions to dispute resolution vary between legal systems. The CISG, adopted on 11 April 1980, and sponsored by UNCITRAL, has attempted to harmonize substantive sales law. To harmonise contract law is still not attainable as seen by the failed attempts in the EU as well as regional unification efforts as described in Chapter 14, which all found no traction.

17.03  However, this unification or harmonization attempt has not been without its critics. Views were expressed that a unification attempt is both unwise and doomed to fail.2

17.04  Jurisprudence has shown that failure does not apply, even though the CISG ‘has not yet attained critical mass’.3 The mere fact that, as of 2018, eighty-five countries have acceded to the CISG shows that the instrument is worthy of inclusion into domestic law. With additional accessions, jurisprudence will grow even more significantly, and ‘as more case law and commentary … develops, courts will apply the Convention with more regularity [and] this will bring more predictability in international sales’.4 However, it has to be recognized that, despite the fact that the CISG has been successful in many areas, it has been less successful in the area of settling damages for breach of contract.5 One of the purposes of this book is to bring some certainty to the field of damages.

17.05  The CISG must be located within the context of internationalization and globalization. It is not the purpose of this book to discuss the major ideas on these two topics in detail.6 However, some general remarks are useful to understand the underlying ideas. Importantly, the concept of globalization is not to be confused with internationalization. Internationalization is understood to refer to (p. 319) cooperative activities of national actors beyond the nation-state.7 Globalization is different:

It is a multifaceted phenomenon that escapes easy definition. … It is sufficient to observe that it is in the present stage of development of the international system that globalization has been fully recognized as a specific feature of international relations, which impact the political, economic, ecological, social and cultural life of societies around the globe in an unprecedented manner.8

17.06  Whether the development of private international law is to be classed as an expression of internationalization or of globalization is not important in this context. Of importance is the recognition that globalization created a new perception of the political process in which UNCITRAL and other bodies could liberalize domestic laws and move beyond national borders. In essence, a ‘qualitative leap in the course of history’ has been observed.9 From this point of view alone, it is trite to argue that the benefits of uniform international business law are minimal.10 The ever-increasing amount of jurisprudence alone suggests that the CISG has been applied and will be applied increasingly in the future. One of the problems has been that the legal profession, as the advisors to business, have not ‘changed their ways’. However, a new generation of legal professionals well versed in international instruments is making an impact in the application of uniform instruments. This development is well advanced specifically with the increased international interest in the Willem C Vis International Commercial Arbitration Moot.

17.07  It can be argued that history in relation to harmonisation is repeating itself. In the eighteenth-century Lord Mansfield commented: ‘The mercantile law, in this respect is the same all over the world. For from the same premises, the same conclusions of reason and justice must universally be the same’.11 Lord Mansfield succinctly linked reason and justice to the attainment of a uniform, homogeneous law. In effect, he understood the requirements of a successful international law well ahead of its implementation. Globalization and internationalization were the catalysts that revived Lord Mansfield’s idea. The application of a unified law to cross-border transactions is economically sound and produces superior results compared with the application of domestic law.12 Even the British legal system has (p. 320) now entered into the phase of ‘Europeanization’. That said, it is also unrealistic to suggest that the CISG has been without its problems:

The likelihood of substantive uniformity of application is unrealistic, but the utter failure of the CISG as a device to remove legal impediments to international trade is equally implausible. This middle view is found in the ongoing development of CISG jurisprudence.13

Globalization requires that the CISG be interpreted and applied as an international legal instrument without recourse to domestic concepts and principles which is embedded in Article 7 of the CISG.

17.08  Ethnocentric application of the CISG is now a decreasing problem, but still a danger to a uniform application. Absolute uniformity is a goal that can, perhaps, be achieved in the future. At this stage, a realistic view must be taken, and the aspirations contained in Article 7 should be measured through a ‘relative standard of uniformity’.14 The academic community has long analysed and criticised decisions by courts and tribunals. There is evidence that courts are increasingly taking note of the reasoning of academics and a convergence on some fronts has been achieved. The application of Article 78 is an example where there is a convergence of views among the courts.15 On the other hand, as seen in Chapter 9, the debate in relation to attorneys’ fees has just begun, and the battle is far from over. The same can be said in relation to penalty clauses which has been disused in Chapter 10.

17.09  It can be argued that the pragmatic approach of applying well-reasoned international jurisprudence will eventually take hold. It can be observed that recent decisions worldwide exhibit a level of maturity and knowledge of internationality that was lacking in earlier cases. A good example is a decision handed down by the Appellate Court of Valencia.16 The Spanish court noted that a ‘different methodological approach than that of domestic law is needed to interpret the Convention [and] the only way to assure uniformity of interpretation of the Convention is to take into account that which other tribunals have held when applying the Convention’.17 Equally, the decision in RJ & AM Smallmon v Transport Sales Limited and Grant Alan Miller18 ‘ticks all the boxes’ where the court stated:

The aim of the Convention was to seek to achieve the harmonisation and unification of trade law regarding international sales of goods.(p. 321)

Counsel for [Buyers] properly acknowledged that resort to authorities dealing with domestic law is not permissible. This follows from the requirement in art 7, dealing with the interpretation of the Convention, to have regard to ‘its international character and to the need to promote uniformity in its application and the observance of good faith in international trade’. Thus the Convention is to be given an autonomous interpretation requiring the Convention to be interpreted exclusively on its own terms and applying Convention-related decisions in overseas jurisdictions.

As urged by the late Professor Peter Schlechtriem, recourse to domestic law must be avoided:

In reading and understanding the provisions, concepts and words of the Convention, recourse to the understanding of these words and the like in domestic systems, in particular the domestic legal system of the reader, must be avoided. This seems to be self-evident, but experience shows that practitioners and scholars tend to understand words and concepts of the Convention according to their familiar domestic law.

We therefore propose to consider only the international authorities and articles in interpreting art 35(2).

A further step toward that goal has already been taken by the production and publication of the CISG Advisory Council opinions (a private initiative to promote uniformity in the application of the CISG). It is interesting to note that the pessimists do not recognize that the CISG is a living, evolving law and cannot be viewed as static. In that sense, it is no different from domestic law, which constantly evolves according to the needs of the community it serves.

17.10  Another point to note is that the drafters of the CISG attempted to solve the particular problem of language by consciously ‘rooting out’ words with domestic legal connotations in favour of ‘earthy’ words that refer to physical acts and are devoid of legalistic meaning.

17.11  Interpretation of the CISG should and can be undertaken by giving each word the ordinary meaning attributable through the common English language and not meanings derived using legal concepts. The approach taken by the CISG avoids many of the complexities evidenced in domestic law.

17.12  One problem needs to be kept in mind. As Ferrari pointed out, ‘[How] does one determine which interpretation should be preferred when the CISG itself gives rise to different autonomous interpretations?’19 The problem certainly exists, but it is not as widespread as one might suspect. There are areas, such as the question of attorneys’ fees, that attract comments and have given rise to a heated debate. However, in the end the pragmatic view is taken that ‘courts are free to disregard foreign cases that demonstrate poor reasoning and fail to comply with CISG (p. 322) interpretive methodology’.20 After all, case law of the CISG is not creating a precedent, but they are highly persuasive.

II.  The CISG as an International Code

17.13  As stated by Kastely:

[W]ords used in one language … carry implications different from those in another. … The terms “offer” and “acceptance” provide powerful examples of this. In English these words carry a rich heritage of legal doctrine, and their equivalents in the Western European languages have similar depth. … Yet the translations of these words used in the other official versions, such as Chinese and Arabic, do not carry similar implications.21

It can be argued that there is simply no answer to the problem of words and the effect of translation on their meanings. However, this view does not offer solutions where they are needed and is overly pessimistic. It is important to realize that the CISG is an international instrument and hence must be viewed as representing a politically motivated compromise. It is not a standardization of law but a fresh attempt to create a unique code.22 Because of its choice of words, the CISG is capable of ‘moving with the times’ and can be considered ‘a law for all seasons’.

17.14  Importantly, the CISG, pursuant to Article 7(2), attempts to overcome some shortcomings or disagreements among the promoters of the convention through gap filling. Thus, courts and tribunals in the short term at least will struggle to find a common solution, and hence strict uniformity will for a time be a myth. Relative uniformity should be the aim in the short term, and increased jurisprudence will work toward narrowing the agreement gap.

III.  Breach of Contract

17.15  The CISG provides a relatively simple regime for breach of a contract. It gives an overview of remedies in Articles 45 and 61 for the buyer and the seller, respectively. The most important point is that in line with the stated principles, the CISG has avoided implementation of any function of domestic laws, whether they are civil or common laws. Thus, the principle of breach or adequate causation and the distinction between breaches of warranties and conditions are not contained within the CISG.

(p. 323) 17.16  Articles 45 and 61 point to the relevant provisions within the CISG that provide the broad remedies for the aggrieved party. Specific performance, avoidance of the contract, and substitute relief are the only categories of remedies available under the CISG. This book is concerned only with the remedy of damages, which is specifically allowed under Article 45(1)(b) in conjunction with Articles 74 to 77. In addition, the questions of anticipatory breach and the emanating remedies are also discussed in Chapter 15.

17.17  The remedial scheme is finely tuned to enable a speedy recovery or solution in case of a conflict. The whole process of the sale of goods is contingent on the efficient and speedy passage of business. For example, goods that have been delivered must be examined as quickly as possible, and any defects must be brought to the attention of the other party within a reasonable time. If that is not done, the defaulting party will lose any rights to damages or any other remedy for that matter. Article 45(3) grants no period of grace to perform. It would be inappropriate and contrary to other articles within the CISG to allow what is known in French law as délai de grâce, as international trade has to be conducted and finalized within a reasonable time. Certainty and speed are of the essence.

17.18  This is a good illustration of the fact that the CISG is not a code that can be read article by article but an integrated, living document that must be understood as a whole.

IV.  Article 74

17.19  Article 74 simply explains the extent of damages that can be claimed if a contract has been breached. In brief, the aggrieved party can claim all those losses that consist of ‘a sum equal to the loss, including loss of profit,’ which amounts to a full compensation of losses.

17.20  Again, it should be stressed that the CISG must be read within its four corners. Fault and causation are principles not contained within the CISG. These principles are found in other legal systems. This does not mean that terms such as ‘to cause’ cannot be used within the CISG. It is the principle of causation that must be rejected.

17.21  Four general points need to be kept in mind when Article 74 is applied. First, Article 74 does not specify which types of losses are included, except loss of profit; at the same time, it does not specifically exclude any types of losses either. This point was a contentious one when the matter of attorneys’ fees was discussed in Zapata.

(p. 324) 17.22  Secondly, even if goods are not fit for purpose, for example, damages can be claimed only if the aggrieved party is not in breach of any rules contained within the CISG such as giving timely notice of the defects.

17.23  Thirdly, Article 74 is in competition with any other remedies described not only in Article 45 but also in other articles throughout the convention. For example, if the aggrieved party decides to reduce the price, then it is assumed he has received what he expected under the contract.23 However, the effect of Article 45(2) cannot be ignored: The buyer is not disqualified from claiming damages if he exercises ‘his right to other remedies’.24

17.24  Fourthly, Article 74 contains a formula for calculating damages that guarantees full compensation, including in situations where the contract has been avoided. Article 74, read within the four corners of the convention, also sets the parameters within which damages must fall to claim compensation. Terms such as ‘foreseeability’ and ‘consequences of the breach’, among others, are clear indicators setting the parameters for any claim. In other words, the limitations as well as the rights are contained in Article 74.

17.25  Three issues have raised some problems: first the right to interest pursuant to Article 78, secondly whether attorneys’ fees are included in the mandate of Article 74 and thirdly whether penalty clauses are included in the mandate of the CISG. As far as interest is concerned, the matter seems to be settled. There are two avenues by which sums in arrears can attract interest. First, Article 78 allows the aggrieved party as a matter of right to claim interest. The rate is determined by applying domestic law, as there is a gap that pursuant to Article 7(2) needs to be filled by domestic law. Secondly, interest can be claimed as a loss caused by the breach. In this case, only the actual loss will be reimbursed, whereas under Article 78 the possibility arises of either over- or under-compensation.

17.26  The issue of attorneys’ fees has attracted wide interest, and the matter has not yet been resolved. As seen in Chapter 9, opinions as to whether attorneys’ fees are allowed under substantive rules (Article 74) are not uniform. Some courts, notably in Zapata,25 have determined that attorneys’ fees are dealt with under domestic procedural laws, whereas the Kantonsgericht Zug argued that the fees can be claimed pursuant to Article 74.26

17.27  Admittedly, from a practical point of view, the question of attorneys’ fees will be of relevance only in the United States, where each party will have to bear its own costs. In other common law jurisdictions and most of the civil law countries, the (p. 325) loser will pay all costs. Therefore, if everything is cut back to the bare bones, the problem of attorneys’ fees hinges on whether it is a question of procedural or substantive law. Procedural law governs the awarding of costs, and so does Article 74.

17.28  Penalty clauses are still an issue which is not settled. This book has taken a novel approach and concluded that the CISG is capable of not only determining what constitutes a penalty clause, but also how it is included into its mandate.

17.29  When parties enter into a contract, all the relevant laws of a country are applicable. These include procedural as well as substantive laws, and everybody knows that. This book has argued that the substantive law that is enshrined in Article 74 trumps procedural law, and not the other way around.

17.30  As far as the burden of proof is concerned, the CISG does not provide a direct rule. However, jurisprudence and academic writing seem to be unanimous that the burden of proof is a general principle contained within the four corners of the CISG. As the Federal Supreme Court of Germany noted:

[T]he CISG regulates the burden of proof explicitly (e.g. in Art. 79(1)) or tacitly (Art. 2(a)), so that consequently, recourse to national law is blocked to that extent, and that the CISG follows the rule/exception principle.27

The rule that can be extrapolated is that ‘the party who invokes a right bears the burden of proof to the establishment of that right and, on the other hand, the other party must prove any facts that exclude the invoked claim’.28 The conclusion is that the burden of proof can shift within the dictates of a single article.29

17.31  A similar problem to ascertaining the burden of proof needs to be resolved in relation to the place and time of calculating damages. Neither the place nor the time of calculating damages is clearly fixed within Article 74. The only point of reference is in ULIS, and then only in a footnote reference. However, this question can be determined logically. Furthermore, the solution should be based on facts and not law, as in the end the facts will determine the outcome.

17.32  The place of calculating damages must be either where the damage has been suffered or where remedial action will take place. As the seller’s obligation ceased when he performed his obligation, it cannot be the place of the seller.

17.33  For example, a contract calls for FOB and the goods are to be sent to a third party, namely the customer of the buyer, whose place of business is in a third country. The seller’s obligation ceases as soon as the goods cross the ship’s rail. Obviously, the buyer will not have examined the goods, nor does he have an opportunity (p. 326) to do so. He will be notified by his customer in the third country if the goods are defective. Hence, the damages have occurred in the third country, which is where any remedial action will take place. It would be bad faith and hence a breach of Article 7 if any other place than the third country were stipulated as the appropriate place to calculate the damages. It is a logical and factually determinable solution that the place to calculate damages is the one where the damages occurred.

17.34  The timing of the calculation is not so simple, as two competing interests need to be considered. The seller and the buyer have different points of view, given that Article 74 limits damages according to the foreseeability factor. Hence, the seller will argue that the time to calculate damages is when the contract was concluded. In his consideration, the economic decision was taken at that point that it was worthwhile to conclude the contract even if something goes wrong. From the buyer’s point of view, the damages can be calculated only when remedial action takes place, such as a substitute purchase.

17.35  Article 74 assists in this matter, as the aggrieved party can claim full compensation. Full compensation can be claimed only when the actual value of damages can be calculated, which is when the remedial action has taken place. The timing again depends on the facts of the case, but the latest point is when the matter is heard either by a court or by an arbitrator.

V.  Limitation on Claims

17.36  Full compensation—that is claiming all possible damages—was never envisaged by the CISG as a realistic outcome. As with many other legal systems, it has been recognized that economic activity would be stifled if such a demand were to be placed on the sellers of goods. The CISG uses three techniques to limit damages and hence fulfil the mandate of good faith. First, the foreseeability rule will set the parameters for damages. Secondly, the buyer has a duty to mitigate damages pursuant to Article 77. Thirdly, an exemption pursuant to Article 79 exists if an impediment beyond the control of the breaching party caused the damages.

17.37  Put simply, the two concepts of non-negligence-based liability and the foreseeability principle provide the ‘fundamental pillars of the liability system of the [CISG]’.30

17.38  The foreseeability rule as contained within the CISG must not be confused with the contemplation rule—which has its foundation in common law—despite the (p. 327) fact that these principles have the same historical roots. The CISG has not based the limitations of Article 74 on a domestic rule. In keeping with the underpinning philosophical theory, the contemplation rule is based on centuries-old common legal principles. Foreseeability is a principle based on the verb ‘to foresee’ and not on the contemplation rule. Admittedly, the results could be the same; however, it is the path leading to a result that is important. As mentioned previously, what is foreseeable depends on the contractual construction, which again calls for a consideration of Articles 7, 8, and 9. The CISG must be read within the four corners.

17.39  The importance of trade usage, as explained in Article 9, cannot be underestimated. Many trades and industries have developed their own ways of doing business, and they make frequent use of INCOTERMS. In that sense, what is known in the trade plays a role in determining what was foreseeable. Foreseeability is best measured when the contract came into force. This is the time when each party had his final opportunity to measure and take into consideration the risks associated with a particular contract.

17.40  A point worth mentioning is that when a contract is breached, the plaintiff must, as far as he can, mitigate the damages that eventuate. A plaintiff cannot simply do nothing. He must actively seek to mitigate the losses; otherwise, his claim pursuant to Article 77 may fail in part or in its entirety.

VI.  Article 79: Exemption

17.41  The principle of exemption is important. However, a valid point discussed by Berger should be taken into consideration: the option to renegotiate the terms of the contract.31 Such a clause would be of value in a long-term contract or when delivery of goods in instalments is contemplated. This would allow the extension of the foreseeability rule into the future. This approach, of course, is to be used not to overcome breaches of contract but to overcome problems that alter the balance of economic benefits that the parties expected to flow from the contract. The CISG as a ‘framework law’ can accommodate such cases and ‘provides the parties with the flexibility to modify their agreement rather than to terminate their relationship’.32 After all, many long-term contracts contain force majeure or hardship clauses, and the UNIDROIT Principles provide a framework in Article 6.2(2) and (3) in which contracts can be renegotiated. Specifically, Article 6.2(3) provides:

(p. 328)

  1. (1)  In case of hardship the disadvantaged party is entitled to request renegotiations. The request shall be made without undue delay and shall indicate the grounds on which it is based.

  2. (2)  The request for renegotiation does not in itself entitle the disadvantaged party to withhold performance.

  3. (3)  Upon failure to reach agreement within a reasonable time either party may resort to the court.

  4. (4)  If the court finds hardship it may, if reasonable

    1. (a)  terminate the contract at the date and terms to be fixed, or

    2. (b)  adapt the contract with a view to restoring its equilibrium.

The problem, of course, is that the CISG does not cover this field; thus, two gaps arguably exist. The first one, as indicated above, is still argued namely that the CISG does not cover hardship, but there is a further argument that the CISG also does not cover or recognize a general principle of renegotiation of contracts. A tribunal can fill these gaps by recourse to the UNIDROIT Principles. A court, on the other hand, would have difficulty relying on the model law unless a term to that effect is included in the contract.

VII.  The UNIDROIT Principles and Regional Developments

17.42  Given the success of the UNIDROIT Principles in relation to arbitration proceedings, it is logical to investigate the usefulness of both the UNIDROIT Principles and the PECL in assisting application of the CISG. Domestic courts—and importantly in the United Kingdom, which has resisted ratifying the CISG—have tentatively taken note of the ability of the principles to assist in the interpretation of a contract. It could be argued that the textual approach embodied by the parol evidence rule has been surpassed by the contextual approach. The drafters of international instruments such as the CISG and the two sets of principles long ago realized that businesspeople do not view a contract as simply comprising negotiations condensed into writing unless they specifically say so. A contract, in the majority of cases, consists of a series of negotiations culminating in a legal relationship, and the intent of the parties as to their obligations can be ascertained only by using the contextual approach.

17.43  The same approach can be applied if the CISG is interpreted and gaps pursuant to Article 7(2) need to be filled. A contextual approach would indicate that instruments of the same parentage such as the UNIDROIT Principles and the PECL are part of the process of contextually arriving at the desired interpretation of the CISG. What adds weight to this argument is that the desire to arrive ultimately at a global contract law would be driven by the two sets of principles and the CISG.

(p. 329) 17.44  That said, the assistance of the two sets of principles must and can take place only within the confines of Article 7(2). Arguably, therefore, only where matters are governed by the convention but are not expressly settled can the two sets of principles be called on. Where the UNIDROIT Principles and the PECL have either enlarged, or added to the content of the CISG, recourse to their principles is not allowed, as Article 7(2) mandates the use of applicable law ‘by virtue of the rules of private international law,’ which is black-letter law.

17.45  Chapter 14 has also explained that a harmonisation of regional laws—basically in competition with the CISG—do not contribute to uniformity.

VIII.  Concluding Argument

17.46  This book has sought to demonstrate that two important factors need to be taken into account at a time when the pace of globalization and internationalization of trade has quickened. This is becoming more obvious with the decision of the Chinese government top forge a link with Europe via the One Belt One Road (OBOR) project which is gathering momentum and will change the way we do business dramatically.

17.47  First, an understanding of the problems of devising and implementing uniform and harmonized laws is necessary. Secondly, existing international conventions, such as the CISG, that offer practical solutions to harmonization must be recognized and adopted by the legal profession when drafting international contracts.

17.48  The emergence of trade blocs and free trade agreements has increased the need to harmonize or unify trade laws. Many attempts have been made in this area. The positive effect of attempts at unification has been a ‘legal slipstream, a draft, the effect of which is arguably larger than any [single law instrument or organization]’.33 This slipstream has not only fostered a truly international application of the CISG but also spawned soft laws such as the UNIDROIT Principles. Furthermore, unified principles have been adopted by legal systems in their modernization attempts, such as in China.

17.49  Whatever the argument, unification and internationalization have gone beyond simply being ‘in harmony’. Glenn suggested: ‘Harmony in music [and hence in law] thus presupposes and thrives on diversity, the elements of which are simultaneously cultivated and supported while being assured their place in a larger order’.34

(p. 330) 17.50  Harmony in itself means nothing, as the diversity must still be brought together into one melody. The creation and ratification of international instruments such as the CISG has achieved harmonization. It has created a different, supranational level of laws built on attempts at harmonization between individual legal systems. Systems such as the common law and the civil law have learned about each other’s disadvantages and advantages and have adapted each other’s practices. The CISG has taken this adaptation one step further and combined general legal principles into a single document with its own rhetorical community. The claiming or awarding of damages under the CISG must be understood against the backdrop of an intensive worldwide harmonization effort.

17.51  Ultimately, unification of laws will depend on internationalization and respect for other systems’ decisions. Glenn correctly observed:

The law of the European Union … represent[s] nineteenth-century thought cast forward into the twentieth and twenty-first centuries. Uniform national laws, which had replaced local customs, must in their turn be replaced by uniform European laws.35

To this we should add that the uniform European laws must be replaced by uniform international laws as trade spans international borders. The trade blocs and free trade agreements are merely points in a trend that will eventually see a worldwide uniform law for uniform activities. This book has attempted to show the differences and to highlight the common ground on which international trade can flourish and move forward in a global arena.


1  J Walker, ‘The Utility of the ALI/UNIDROIT Project on Principles and Rules of Transnational Civil Procedure’ (2001) 4 Uniform Law Review 6.

2  L A DiMatteo, L Dhooge, S Greene, V Maurer, and M Pagnattaro, ‘The Interpretative Turn in International Sales Law: An Analysis of Fifteen Years of CISG Jurisprudence’ (2004) 34 Northwestern Journal of International Law and Business 299, 399.

3  ibid.

4  P Hackney, ‘Is the United Nations Convention on the Sales of Goods Achieving Uniformity?’ (2001) 61 Louisiana Law Review 486.

5  J Gotanda, ‘Using the UNIDROIT Principles to Fill Gaps in the CISG’ in D Saidov and R Cunnington (eds), Contract Damages: Domestic and International Perspectives (Hart Publishing 2008) 108.

6  Among many instructive books, consult R Gilpin, The Challenge of Global Capitalism (Princeton University Press 2000); B S Markesinis, Foreign Law and Comparative Methodology (Hart Publishing 1997); J Braithwaite and P Drahos, Global Business Regulation (Cambridge University Press 2000); C Arup, The New World Trade Organization Agreements: Globalizing Law through Services and Intellectual Property (Cambridge University Press 2000).

7  J Delbrück, ‘Structural Changes in the International System and Its Legal Order: International Law in the Era of Globalization’(2001) 1 Schweizerische Zeitschrift für Internationales und Europäisches Recht 13.

8  ibid 14. For a comprehensive analysis see D Held, A McGrew, D Goldblatt, and J Perraton, Global Transformation (Polity 1999) 1.

9  ibid 2.

10  P Stephan, ‘The Futility of Unification and Harmonisation in International Commercial Law’ (1999) 39 Virginia Journal of International Law 743.

11  Pelly v Royal Exchange Assurance Co. (1757) Burr 341, 347.

12  F Blase, ‘Leaving the Shadow for the Test of Practice: On the Future of the Principles of European Contract Law’ (1999) 3 Vindobona Journal 4.

13  DiMatteo and others (n 2) 305.

14  ibid.

15  F Mazzotta, ‘CISG Article 78: Endless Disagreement among Commentators, Much Less among the Courts’ http://cisgw3.law.pace.edu/cisg/biblio/mazzotta78.html.

16  Cherubino Valsangiacomo SA v American Juice Import, Inc., Spain, (7 June 2003) http://cisg3.law.pace.edu/cases/030607s4.html.

17  ibid; see editorial remarks by Pilar Perales.

18  New Zealand (22 July 2011) Court of Appeal of New Zealand (RJ & AM Smallmon v Transport Sales Limited and Grant Alan Miller) http://cisgw3.law.pace.edu/cases/110722n6.html.

19  F Ferrari, ‘Ten Years of the U.N. Convention: CISG Case Law—A New Challenge for Interpreters?’ (1998) 17 Journal of Law and Commerce 254.

20  DiMatteo and others (n 2) n 11.

21  A H Kastely Unification and Community Rhetorical Analysis of the United Nations Sales Convention’ (1988) 8 Northwestern Journal of International Law and Business 574.

22  DiMatteo and others (n 2) 308.

23  H Stoll, ‘Damages’ in P Schlechtriem (ed), Kommentar zum Einheitlichen UN-Kaufrecht (3rd edn, C H Beck 2000) 699.

24  CISG art 45(2).

25  Zapata, 313 F 3d 385 (7th Cir 2002).

26  12 December 2002, A3 2001 34.

27  Bundesgerichtshof, Germany (9 January 2002) http://cisgw3.law.pace.edu/cases/020109g1.html.

28  ibid.

29  DiMatteo and others (n 2) 436.

30  L Vekas, ‘The Foreseeability Doctrine in Contractual Damages’ (2002) 43(1–2) Acta Juridica Hungarica 148, 159.

31  K Berger, ‘Renegotiation and Adaptation of International Investment Contracts: The Role of Contract Drafters and Arbitrators’ (2004) 36 Vanderbilt Journal of Transnational Law 1347.

32  J Gotanda, ‘Renegotiation and Adaptation of International Investment Contracts, Revisited’ (2003) 36 Vanderbilt Journal of Transnational Law 1469.

33  Glenn above, note 15, 1793.

34  ibid 1794.

35  ibid 1792.