Is the United Nations Convention on the International Sale of Goods Achieving Uniformity?

• Author: Philip Hackney
• Pages: 474-486

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I Introduction

Many commentators are now suggesting that the Vienna Convention on the International Sale of Goods¹ (hereafter "Convention"), 10 years after it has come into force, might be failing to accomplish its task of bringing uniformity and predictability to international sales law. Some commentators argue that the Convention not only fails at its goal of bringing uniformity, but actually harms this goal.² While these commentators point out difficulties with the Convention's ability to bring predictability to international sales law, these difficulties were known when the Convention was created and, furthermore, are not fatal to the usefulness of the Convention.

In general, the Convention governs contracts for the sale of goods between parties from different countries that have signed the Convention.³ It supplants the domestic law of nations as to certain international sales in two areas: 1) the formation of sales contracts and 2) the rights and obligations of the parties to sales contracts.⁴

Drafted by the United Nations Commission on International Trade Law (UNCITRAL) the Convention was adopted by a diplomatic conference in Vienna in 1980. International groups had been trying to create a uniform law for the international sale of goods since 1930.⁵ Two previous attempts to unify international sales law were heavily influenced by the Civil Law traditions of Western Europe, to the neglect of the common law and other world legal traditions, and consequently failed to obtain worldwide approval. Therefore, UNCITRAL set out to draft a set of laws that would consider the views of a wider array of countries. The result was the Convention, which subsequently came into force for eleven countries, including the United States, on January 1, 1988. As of August 20, 1999, there were 57 signataries to the Convention, albeit some with reservations.⁶

To examine the Convention, a good starting point is jurisdiction. Whenever there is a sale of goods between two parties who have their principal place of business in Page 474 different contracting states, the Convention applies unless there is an exception.⁷ The Convention covers commercial purchases of goods, but not "goods bought for personal, family or household use."⁸ Article 4 limits the Convention's scope to the formation of the contract and the rights and obligations of the buyers and sellers. The Convention does not govern some controversial areas of the law that the UNCITRAL committee failed to agree upon, such as validity of the contract and products liability.⁹Finally, the Convention strongly recognizes the principle of freedom of contract and allows parties to contract out of any provision.¹⁰ In fact, it allows the parties to opt out of the Convention altogether.¹¹ In the United States, the Convention is a self-executing treaty; this means that any time its terms are met, the court must apply it.¹²

II The Difficulties of Achieving Uniform Private International Law

Creating uniform private international law is an attractive idea. When transacting business with someone from a foreign country, one need not be aware of all the vagaries of the foreign system, but only the one system of law that the whole world transacts business upon. This decreases the legal risk inherent in transacting business on an international scale and consequently creates more profitability in international trade.

There are, however, many obstacles to achieving this utopian notion of a singular law.¹³ Getting many nations to agree to a system of law that is foreign to Page 475 their own is difficult in the first place. In tackling this barrier one must also overcome language and cultural differences. And even if it is possible to find agreement to a uniform set of laws, one still has to determine how to maintain this uniformity in the interpretation of the law. This paper will focus on the latter difficulty.

There are different ways one can try to insure uniformity. One might use a supreme court, or some similar body, to hand down the "true" interpretation of a law. One might use a principle similar to the common law concept of stare decisis making case law binding upon future courts. The Convention, however, does not provide for any superior body to provide the "true" interpretation of its rules. There is also little interest in creating a body to review decisions under the Convention because merchants generally prefer quick, efficient settlements to their disputes; such a body would create delay.¹⁴

The Convention instead allows domestic courts and arbitrators to be the sole interpreters. It directs these interpreters, in Convention Article 7(1), to keep in mind the "international character [of the Convention], the need to promote uniformity... and the observance of good faith in international trade." This is the primary means by which the Convention seeks to ensure uniformity of interpretation. Domestic courts and arbitrators must rise to the occasion, follow the directive of Article 7(1), and interpret the Convention in a uniform manner. This means interpreting the Convention autonomously from domestic conceptions of sales law.

Early commentators were optimistic and excited about the Convention. They were excited that so many countries were able to agree on a uniform sales law and optimistic that, with this worldwide agreement, international sales law would become much more unified.¹⁵ These commentators were aware of the difficulties that lay ahead in achieving the desired uniformity, in particular the difficulty of getting national judges to interpret the Convention autonomously and not through the lense of domestic law. However, the commentators believed that, with proper care, this could be accomplished.

After ten years of case law, some commentators have grown pessimistic in their appraisal.¹⁶ Given the scarcity of case law in some jurisdictions,¹⁷ the use in some jurisdictions of domestic law to interpret the Convention,¹⁸ and a tendency in some Page 476 jurisdictions to ignore the Convention where it is applicable,¹⁹ some commentators now believe that obstacles to uniformity are greater than once thought, suggesting that the Convention might not be a success. As noted previously, there are some who claim the Convention actually harms the goal it attempts to promote-decreasing legal risk by imposing a body of law that is less specific and less defined than current domestic systems of law.²⁰ Indeed, because the Convention is new and limited as to case law or commentary, the Convention arguably brings more confusion to international sales law. In other words, the international community, by enacting the Convention, created more legal risk and more uncertainty by creating a new set of laws.

While there is perhaps some credence to the argument that the Convention creates more legal risk because it has a less defined area of case law, this objection should fade with time, as a body of case law builds around the Convention. Indeed, there are now over 400 decisions world-wide discussing the Convention. Given that case law and commentary will continue to build, the Convention may one day have as deep an analysis as any country's code of laws.

As for the commentators who are now concerned that countries will not be able to divorce their domestic ideas of sales law from their analysis of the Convention, there needs to be a reappraisal of the uniformity that we expect to achieve through the Convention.²¹ The Convention does not cover all areas of sales law and, in fact, leaves some extremely important areas of sales law, such as the validity of the contract and products liability to individual countries. It also allows a court to turn to private international law if the court is unable to find a provision or a general principle that governs a particular situation. Proceeding in this way, there is no way for the Convention to achieve perfect uniformity. Even in those areas that the Convention clearly governs, there will be differences of interpretation, just as courts within domestic systems have differences of interpretation of their "uniform law." This is not detrimental to the goal of the Convention.

The Convention provides a modern, uniform text of rules that govern international sales contracts and, in particular, allows the party's contracts and customs to rule their affairs. It provides the international legal and business community with a good text and structure that they can debate on common ground and thereby arrive at a greater level of uniformity in international sales law. However, because of the diverse group of countries that are interpreting its provisions, the Convention will not and can not bring to international sales a perfect or even a high level of uniformity. This is not to say that it will not provide a useful level of uniformity. What is needed now is patience and work towards making signatory countries' courts and lawyers aware of the Convention and its unique problems of interpretation.

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III How To Interpret The Convention To Bring About A Useful Level of Uniformity

Assuming that the Convention will not effect perfect uniformity in international sales law, how should one go about interpreting the Convention in order to obtain a useful level of uniformity? The interpretation should start with the text. But when looking to the text, the court should consider the international character of the Convention as Article 7 directs the court to do. When interpreting the Convention, courts must not only consider the difference between Common and Civil law, but they must also consider the difference between the East and the West, third-world countries and industrialized nations, and...