In the changing post-World War II global economic landscape, the UN Vienna Sales Convention on Contracts for the International Sale of Goods (CISG) emerged as a project of uniform law.[i] In a transnational context, it aimed to displace the localization of the law in favor of delocalization to remove the unnecessary legal obstacles in international trade.[ii]
The unique feature of the CISG is its dual nature as a public law instrument governing private relationships. In that context, its Preamble reveals a “sweepingly to visionary and long-term goals and objectives decidedly of a public policy nature.”[iii] Revisiting the text of the CISG, especially in relation to its Preamble, reveals what Kastely referred to as “a deeply political, fundamentally rhetorical text in its aspirations.”[iv] Similarly, Felemegas stressed that there was no other option for the CISG but to be political and rhetorical; otherwise, it would not come into existence and establish compromise solutions acceptable to delegates of different socio-legal backgrounds, nor create a “textual community” and a new lingua franca of international trade.[v] The rhetorical coherence directly results from the political environment in which the CISG originated.
Rhetorical Community and the Market Supremacy
To unify law among nations, Kastely explained, means to “subject people around the world to a single set of rules and principles and to have them understand and conform to those rules and principles as they would to the laws of their own communities.”[vi] Under the auspices of UNCITRAL, the diversity and equality of participation were indispensable for the renewed uniform sales law project. The Vienna Diplomatic Conference gathered representatives of different legal regimes and socio-economic backgrounds, resulting in fractions across, at least, four lines: East – West, North – South, Civil Law – Common Law, and ULIS – CISG. A compromise was essential for the unification of international sales law; however, as Eorsi highlighted “the “willingness to compromise … is not found in equal measure in everyone”:
In some states giant corporations can persuade their business partners to accept their terms, and their business federations can influence – through the state – the delegation participating at the conference for the unification of the law. These states do not need economic compromises, not even conventions, for the unification of the law. ... Such countries are often more willing to compromise than others, partly because their big corporations retain excellent legal counsel that can cope with foreign law, if necessary. On the other hand, countries that feel driven into a corner in international trade are less willing to compromise.[vii]
D’Souza’s discussion on the relationship between the state and transnational corporations in the neo-colonial forms of governance,[viii] Pistor's reflections on the essential role of lawyers as “masters of the code”[ix], complement and further contextualise Eorsi’s reflection on the CISG negotiation and the willingness to compromise. More specifically, D’Souza’s discussion brings to focus the colonial legacy that resulted in some states “feeling driven into a corner of international trade,” while Pistor explains that the legal counsel’s role is not limited to “coping with” foreign law but mastering the choice of foreign law so that it servers the asset holders.[x]
The dominant view in the CISG scholarship, however, failed to consider the fear of international economic domination and exploitation, a continued form of colonialism and imperialism, that was present at the time of the CISG’s negotiation.[xi] The emphasis is on its commercial purpose and the dismissal of any political context. Schroeter, for example, argued that the Preamble does not reflect the underlying values of the CISG or declarations of political principles; instead, its “commercial-transactional” purposes encompass an “acceptable” and “pragmatic” set of default rules, and offer “the best solutions, and increase certainty and predictability.”[xii] Such views fall within the framework of what the Law and Political Economy scholars refer to as the autonomy of the economy or the market supremacy, i.e., “the necessary subordination of the political to the economic.” [xiii] The three theories are key in this respect: elevation of efficiency, externalities, and transaction costs (the identification and elimination of transaction costs).[xiv]
Paragraph 3 of the Preamble reflects the “substantive purpose of the CISG to reduce transaction costs by replacing divergent national law with uniform international law.”[xv] Article 6 CISG reinforces the dominance of the economic over political by allowing the actors in international trade to completly dispose of the rules of the Convention as a whole or partially. The formal equality that the CISG embraces is not sufficient to remedy the differences in bargaining power that influence if and to what extent the CISG will apply in a given transaction. In this context, the CISG emerges as another example of an international instrument that eases the expression of party autonomy and choice-of-law exercise; something Pistor persuasively argued should be made more challenging and that there should be “far fewer opportunities for asset holders to go on a legal shopping spree.”[xvi]
The market supremacy enshrined in the Preamble conflicts with the values set out in the remainder of the Preamble, specifically its Paragraphs 1 and 2. Paragraph 1 of the Preamble refers to the Declaration on the Establishment of a New International Economic Order (NIEO) of 1 May 1974 and the Programme of Action on the Establishment of a New International Economic Order of 1 May 1974. The two resolutions outline political and economic principles to eliminate the discrepancies in development between the developed economies, economies in transition, and developing economies. The NIEO reference was an effort to protect the weaker parties in international trade – “a definite trend of compassion for those who, through no fault of their own, are weaker than others.”[xvii] Therefore, paragraph 1 of the Preamble reflects political notions concerning achieving the goals of the NIEO. Travaux preparatoire shows that NIEO was not a mere passing reference in the CISG's Preamble; instead, it was present in the context of the incorporation of the good faith principle and the substantive rules on non-conformity, passing of the risk, and performance suspension.
The negotiation on the incorporation of the good faith principle in the CISG is an ample example of the fluidity in the East – West positions depending on their economic-political interest. The West insisted on flexibility as a guiding principle in the norm creation, which entails a degree of uncertainty in the relationship but is necessary to allow the parties to create an adaptive flexible long-term relationship. However, concerning a substantive provision on good faith, they favoured the rigidity and certainty nominally assigned to the East. Conversely, the East, which nominally took the position of rigidity and predictability necessary for the planned economy, argued that good faith was flexible and thus necessary. Within these frameworks, the debate covered a broad array of arguments in favour of substantive good faith provisions: the necessity of general clauses in international trade, the necessity of good faith clauses in contracts to protect the weaker parties in international trade, and the alignment of good faith clauses with the NIEO principles. Ultimately, however, the good faith was “exiled” to Article 7 CISG as a principle of interpretation. However, the link between the good faith principle and NIEO is often disregarded or dismissed, as discussed above, in the subjugation of political to the economic.
The North – South friction points revolved around procedure for non-conformity, the passing of risk, and suspension of performance.[xviii] Three main arguments framed these debates: first, the developing countries mainly export raw materials and agricultural products, i.e., mass products, and import technology and finished goods; second, by the awareness of their market’s underdeveloped technological and legal condition; and third, by their frequently justified mistrust of developed industrial states.”[xix] As an illustrative example, the debate concerning the notice of non-conformity illustrates these tensions. Date Bah, a representative of Ghana, indicated their concerns with the reasonable time for the notice of non-conformity, as representatives of Western European jurisdictions, such as Austria and Germany – both known for the short inspection and notification times – advocated for it. He particularly highlighted that, among other reasons, where Ghanian merchants are at a greater risk of losing all remedies available to them under Article 39 since the inspection and notice period may take time as “delivered goods remained unpacked in the harbour for more than two years or that the delivery to their final destination was frequently delayed.” In this context, introducing Article 40 CISG was seen as an important compromise, to remedy precisely the disbalance between the positions of the buyers and the sellers.
One can find traces of the very concerns expressed in North – South debates in the CISG case law. The German Supreme Court in the Used Shoes for Uganda case – among the CISG landmark cases – showcases the lack of willingness of the court to consider region-specific circumstances that affected the ability of the Ugandan buyer to examine the goods and notify of the non-conformity the German seller.[xx] As an example, the Court ruled that the buyer’s notice of non-conformity three weeks from delivery was not within a reasonable time as mandated under Article 39 CISG; it did not consider the unique circumstances of potential contributory awareness of the seller, the circumstances around customs and inspection control, and did not consider if the issue qualified under Article 40 CISG.
Decisions in comparable scenarios signal that the outcomes of considering cultural and region-specific factual circumstances will lead to inconsistent results. As an example, in the Chemical Substance case,[xxi] when deciding whether a Moroccan buyer notified her German seller of the non-conformity concerning a sophisticated chemical substance, the court failed to consider whether a typical buyer in a developing country is competent to inspect sophisticated products and serve the notice required in case of defects.[xxii]
The tension that permeated the North – South debates at UNCITRAL that, at very least indirectly, raised the issue of inequalities between contracting parties. This in turn, as Kastely highlighted “provokes a discussion of how we are to understand the notion of equality among people with different resources and levels of commercial sophistication.”[xxiii]
Conclusion
Despite a few notable exceptions such as Eorsi’s and Kastely’s work, much of the scholarship on the CISG overlooks its political and economic origins, neglecting the contextual forces that shaped its compromises and provisions. Assumptions of the text's finality, political neutrality, and formal equality act as barriers to acknowledging the CISG’s creation within a specific historical and political context. The CISG scholarship fails to consider the inequality that existed during the CISG negotiations, particularly regarding trade conditions and opportunities for merchants in newly independent states due to historical colonial legacies, and related perpetuated unequal and often adversarial state relationships. This omission not only hampers knowledge production within the rhetorical community but also risks reinforcing these inequalities in the interpretation and application of the convention. To remedy this, equal attention should be given to all circumstances surrounding the CISG’s creation. Such an inclusive approach allows for a balanced consideration of its values and purpose, fully acknowledging the complexity of the socio-economic, legal, and historical context that shaped its rules.
As a starting point, the CISG community should embrace Kastely’s view of a rhetorical community. Building from there, it should recognize the inseparability of the political and economic in the making of the CISG. Consequently, that should be the beginning of a framework of a conversation on the meaning of equality between the contracting parties in the CISG. Here, it is crucial to recognize the dominance of the Western legal traditions, and the dominance of neo-liberal thinking that surrounds and permeates the interpretation and application of the CISG. Consequently, the dominant view of formal equality will face a challenge to tackle the question of if and to what extent parties should enjoy preferred treatment based on the country of their location or unique, socio-economic region-specific, or culture-specific circumstances.[xxiv]
As an example of where such rhetorical engagement with the text of the CISG could go, one can consider the standard of reasonable time in Article 39(1) Vienna Sales Convention as an example: the rich scholarly debate and the conflicting decisions revealed the tension between short or strict time and longer more flexible periods inspection and notice timeframes, until the adoption of the noble month theory. However, even the noble month approach focused almost entirely on the comparative law exercise of Western domestic law approaches to conformity, thereby excluding other systems.[xxv]
Another example concerns the concept of reasonableness, which could require further probing to question whether it in fact reflects a Western-centric standard as opposed to a flexible conceptual framework that should accommodate consideration of factors in their socio-economic and cultural diversity.[xxvi] As an example, does the reasonable person standard in Article 8 Vienna Sales Convention embed a Western-centric standard of a reasonable, sophisticated merchant, or should it be refined to incorporate the multitude of differences that exist in socio-economic, legal, and ultimately, cultural experiences and backgrounds of actors in international trade?
The rhetorical community can only achieve its purpose if it embraces discourse as its essential dynamic and reduces the assumptions about the finality of its text or the finality of its compromise. Thus, to talk about the Vienna Sales Convention as a constitutive text of a community, it is essential to revisit the question of what the meaning of equality beyond the recognition of differences in position is, end grappling with the questions and concerns of dominance.
[i] Maren Heidemann, “Object and Purpose as Interpretation Tool in International Commercial Law Conventions: How to Make the ‘Top Down Approach’ Work” in Maren Heidemann and Joseph Lee (eds.), The Future of the Commercial Contract in Scholarship and Law Reform (Springer, 2018) 408. (Heidemann described it as an example of bottom up approach, i.e., an international instrument of customary and international law that has its origins in private sources of traditional self-governance.).
[ii] K. Sono, “The Vienna Sales Convention: History and Perspective” in Petar Sarcevic and Paul Volken (eds.), International Sale of Goods: Dubrovnik Lectures (Oceana, 1986) 11-12.
[iii] Heidemann (n. 1), 415-416.
[iv] Amy H. Kastely, “Unification and Community: A Rhetorical Analysis of the United Nations Sales Convention Symposium: Reflections on the International Unification of Sales Law” (1988) 8 Northwestern Journal of International Law and Business 574, 577.
[v] John Felemeges, “The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation”, (2000) Pace Review of the Convention on Contracts for the International Sale of Goods (CISG).
[vi] Kastely (n. 6), 577.
[vii] Gyula Eorsi, “A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods” (1983) 31 American Journal of Comparative Law 333, 345.
[viii] Radha D’Souza, “A radical turn in International Law and Development? Corporations, capitalist states and imperial governance” (2022) 43(1) Canadian Journal of Development Studies 20.
[ix] Katarina Pistor, Code of Capital, 225 (Princeton University Press, 2019).
[x] D’Souza (n. 10), 25 – 26, 30 – 31.
[xi] Pistor (n. 11).
[xii] Ulrich Schroeter, “Has the UN Sales Convention achieved its key purpose(s)?” in Djakonghir Saidov (ed.), Research Handbook on International and Comparative Sale of Goods Law, (Edward Elgar Publishing, 2019).
[xiii] Jedediah Britton-Purdy et al., “Building a Law-and-Political-Economy Framework: Beyond the Twentieth Century Synthesis” (2020) 129 The Yale Law Journal 1784, 1794 -1800.
[xiv] Ibid.
[xv] Harry M. Flechtner, “Uniformity and Politics: Interpreting and Filling Gaps in the CISG” in Peter Mankowski and Wolfgang Wurmnest (eds.) Festschrift Für Ulrich Magnus (Sellier European Law Publishers 2014) 193, 195 (Flechtner cautions against a “uniform interpretation above all else approach as inconsistent with the underlying purpose of the Convention).
[xvi] Pistor (n. 11).
[xvii] Eorsi (n. 9), 349.
[xviii] Eorsi (n. 9), 350.
[xix] Ibid.
[xx] Case 2-26 O 264/04, Landgericht Frankfurt am Main (District Court Frankfurt am Main) [11 April 2005] (Used shoes for Uganda case).
[xxi] Appellate Court of Koblenz [11 September 1998].
[xxii] For further discussion on this specific case, see, e.g., Abdullah S. Alaoudh, “The Notice Requirement of Article 39 and Islamic Law: Developed vs. Developing Countries” (2012) 26 Arab Law Quarterly 490-491; Fatima Akaddaf, “Application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) to Arab Islamic Countries: Is the CISG Compatible with Islamic Law Principles?” (2001) 11 Pace International Law Review; Hossam A. El-Saghir, “The Interpretation of the CISG in the Arab World” in André Janssen and Olaf Meyer (eds.), CISG Methodology (Sellier: Munich, 2008).
[xxiii] Kastely (n. 6), 590.
[xxiv] Ingeborg Schwenzer and Pascal Hachem, “Preamble”, in Ingeborg Schwenzer (ed.), Schlechtriem & Schwenzer Commentary on the UN Convention on the International Sale of Goods (CISG), (OUP, 4th ed., 2016), 15.
[xxv] Ingeborg Schwenzer, “The Noble Month (Articles 38, 39 CISG) - The Story Behind the Scenery” (2005) 7 European Journal of Law Reform 353 (discussed German speaking solutions, Anglo-American solutions, and arbitral tribunals). Camilla Baasch Andersen, “Article 39 of the CISG and Its Noble Month for Notice-Giving; A (Gracefully) Ageing Doctrine?” (2012) 30 Journal of Law and Commerce 185.
[xxvi] See, for example, Alexandra Buckingham, “Considering Cultural Communities in Contract Interpretation” (2016) 9 Drexel Law Review 129.
