Sunday, September 11, 2011

A few notes and thoughts on the CISG initial reading...

Right away, the author notes that the CISG governs only three areas: conclusion of the contract, obligations of the seller including the respective remedies of the buyer, and the obligations of the buyer including the respective remedies of the seller. Having not done much contract law since my traumatizing experience in the spring with Professor Kadens, I initially assumed this was enough. Eventually, I came to the realization that very important things were left out.

However, I do appreciate the CISG alot more than the other organizations which we have read about, because the convention seems to recognize the neutrality that may be attained through uniformity. CISG’s  principle of autonomous interpretation and the international character help promote this uniformity. Domestic standards of interpretation do not suffice in the international business arena, and this is awesome because it eliminates at least a little bit of variation amongst different countries.
Neverthe less, there remains the commitment to honoring the parties' intentions, as stated in Art. 8(1): Subjective meaning will be used to interpret the intention behind the statements or conduct of parties when they all intended the same meaning – subjective meeting of the minds - and when there is no other way that the parties could have understood more than one meaning.  In case these alternatives fail, Art. 8(2) gives us a familiar standard: If the first options fail, then resort to objective interpretation based on what reasonable person would’ve thought. Finally, I like the fact that negotiations and subsequent actions b parties will be considered to determine what the parties thought was the meaning of the contract. The CISG excludes parol evidence rule, which has seemed have lost its objective over time anyway. Quite frankly, I found it an archaic rule - another obstacle for attorneys to overcome.
Nevertheless, CISG has received criticism for trying to apply univormity. Particularly, it has been criticized for applying the Incoterms to contracts, but that promotes uniformity, and easier application of the law, as shown by the German courts. Furthermore, there is a reasonable approach to the desire for uniformity. The CISG does not push for any “world languages,” merely that the parties understand the language in which they read terms, particularly standard terms.
Furthermore, the CISG attempts to "fill in the gaps" and thus promote uniformity through the gap filling principles of the CISG Art. 7(2). It states that the gaps are to be filled according the CISG general principles, and if these don’t exist, according the private international law – but not domestic law. UNIDROIT Principles may be used only to support the CISG’s general principles.
However, this is precisely where I begin to see vagueness... because the principles may not be written, they may either be invented or "erased." Different rules may end up being applied to different situations.
Finally, I go back to my initial point - that which the CISG does not cover. Art. 4. CISG: "CISG governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. CISG is not concerned with the validity of the contract or of any of its provisions or of any usage. Nor is it concerned with the effect which the contract may have on the property in the goods sold." Domestic remedies are the remedies usually proscribed to those not covered by the CISG, so this leads to lack in uniformity in several areas, including important areas such as tort and contract defenses such as fraud. Indeed these are important matters that I think the CISG should address, considering how fundamental they are to contracts law.


16 comments:

Anonymous said...

"However, this is precisely where I begin to see vagueness... because the principles may not be written, they may either be invented or "erased." Different rules may end up being applied to different situations."

I agree with you that the CISG is a bit vague, but actually I think that it should be vague in order to give room for the parties and the arbitrator to have room to discuss about the dispute with broader defenses. Also, its good that its vague so that the CISG itself does not conflict with the specific articles of the other countries.

Lauren said...

I too, am happy to see that the CISG is left "open" (a more positive word than "vague") because its function is to accommodate such a wide variety of disputes and parties. I'm a bit surprised that parol evidence is done away with completely, but I suppose the point is to get all the necessary terms into the written agreement up front.

Unknown said...

The parole evidence rule and ambiguity continue to come up in almost every domestic contract arbitration or mediation I do. My attitudes about the Rule and the policies underlying it have changed some now that I am the fact finder as well as decider. More to follow.

Rhiannon Le Parmentier said...

I have always assumed that it would be sensible to draft 'entire agreement' clauses into most contracts. I am therefore surprised how often they come in your work, Karl.

Tim Roy said...

Oh I had Kadens too, back in the day! Actually I've kept in touch with her. I have fond memories - a straight-shooter!

My (probably idiosyncratic) takeaway from your post: the CISG seeks to promote uniformity across nations, and hence demands a measure of autonomy, while seeking to balance local flexibility.

Your final argument that more contract law should be included to promote the integrity of CISG and aid in uniformity, is an intriguing point. I'd like to return to the idea later in the semester, with more familiarity and comfort with these rules and their application.

J.L. said...

I had Rau, who taught us very little about what actually makes a contract, and far too much about remedies under the UCC. Thus my contracts knowledge is a bit useless here.

I think not having the parol evidence rule, while lending itself to a lot of ambiguity and dispute, makes sense here, in that parties from different backgrounds can intend far different things than they had written. Thus allowing extrinsic evidence to show the validity of one side's understanding would be fair.

Anonymous said...

I love Article 7 here. I would like to discuss it in some length tomorrow in class.

Anonymous said...

Don't get me started on Contracts professors. I can guarantee that my unnamed professor was worse than anyone else (but I'm not bitter).

Similar to previous comments, I too like the fact that the CISG is open (see my other comments as well). Without room for interpretation, the Convention would be too rigid, likely unaccepted by many countries, and virtually inapplicable to any "non-cookie cutter" dispute.

Anonymous said...

Reading your post actually made me understand the CISG better and look at it more favorably. Thank you! I had misinterpreted the term "autonomous interpretation" and actually thought it compromised uniformity, but your post clarified that and after re-reading the material, it made me realize it actually attempts to achieve quite the opposite.

Lauren said...

Linda, these are comments following your oral argument today:

Substantive: It sounded like you had a solid grasp of your argument in the very beginning. I, too, wasn't sure what I would be allowed to cover re: procedural and merit issues. This is just the first round, and I'm sure next time you will be better prepared to field questions and won't lose your pacing when interrupted. I should prepare for the same for my next rounds as well!

Stylistic: Great job in the beginning. You appeared very prepared and confident and your pacing was perfect, and that definitely helps your presentation of your client's argument. As I stated above, I think when you were interrupted threw your rhythm a bit, so your conclusion was abrupt. Perhaps rehearsing a solid conclusion to equate with your good intro would be a good idea to end things out nicely.

Anonymous said...

Linda - I have to be honest, I was paying a lot of attention to what you were saying and not how you were saying it because I wanted to try to respond to you (oops!). However, it sounded like you you had a great map of your argument set out and were right on track for a while. You did a good job focusing on the respondent's intent to arbitrate, but, as we talked about, didn't do enough emphasizing separability.

Good job overall.

Anonymous said...

Hello Linda,
I liked that you are very confident when speaking and also very easy to understand. The only problem you seemed to have during your presentation was when you were interrupted and lost your pace in the end. For the substance, I found your arguments and reasoning very clear and interesting. The mixing of procedural and merit is something that I have a lot of difficulties in too so I can totally sympathize ;)

J.L. said...

You are extremely confident and assertive. You seemed very passionate about what you were talking about and I find conviction quite persuasive. I found your hand gestures a bit distracting at times, but that didn't detract too much from your presentation or your energy.
The whole procedure/merit thing was an issue for everyone, but I was impressed that that you managed to recover and improvise after you were interrupted, even if you had to take a moment to think.

Anonymous said...

Hi Linda,

I liked your presentation as well. From the notes that I could see on your desk I could tell that you had taken a long time to prepare (and was prepared) for the oral argument. I also found that the movements from your hands were a bit distracting but they showed a lot of passion for this case, so I really don't know if it is a positive or negative thing!

I found that you pointed out the main issues related to the case (the same ones I found) and went deeper and even got some jurisprudence, which again shows that you were well prepared for the case.

A final point: you were calling the Client by its name, and I'm not sure if we can call them by their first name (die to formalities) or if we should refer them as "Claimant" and "Respondent"

Good job!

Unknown said...

For your side, you should refer to the clients by name and people by surname.

We will talk some about referring to the other side.

Anonymous said...

Hi Linda,
Sorry for the late comments on your presentation last week ... I have also been very ill since Sunday, and have recently been trying to catch up on school work. Overall, I was very impressed with your presentation. I found your demeanor extremely professional and engaging, your pace was excellent, and you sounded particularly passionate and confident (especially in the beginning). My only suggestion would be to try to improvise when being asked something you may not know about, since in advocacy, its usually better to say something than nothing at all. Fantastic job overall! :)