From an Interpretive Tool to Substantive Law: The Apotheosis of Good Faith in CISG Jurisprudence

Abstract

This Article offers a narrow lens of analysis: it examines the essence of an interpretive provision in Article 7’s mention of “Good Faith” in the United Nations Convention on Contracts for the International Sale of Goods (“CISG” or “Convention”) and considers how that article has become glorified, ultimately rising to the deified status of substantive law by way of oftentimes creative, interpretive incorporation techniques by various domestic courts and international arbitral tribunals. Borrowing from religious terminology, court treatment of good faith over the years has resulted in the elevation and exaltation of a universal trope to a divine honor, an apotheosis. This Article argues that this elevation to an apotheosis-like status was never the original intention of the drafters of the Convention; quintessence was never contemplated. The compromise worked out at the 1980 Vienna Conference confined good faith to the interpretation of the CISG only. Good faith did not incorporate any behavioral standards by which parties’ performances under sales contracts were to be measured; it did not serve as a standard of conduct for contractual performance. There was nothing “divine” or even special about the incorporation of those words into the CISG. Good faith was to play only a modest and limited role. The plain meaning reference to it suggests it was of emblematic value, and its placement in a provision dealing with interpretation of the Convention is somewhat surprising and strange. This perplexity continues: one cannot find a definition or explanation of good faith in the CISG. It is a compromise provision that merely formulates good faith as an interpretive device only. But this is a far cry from what it has become and the heights it has climbed.
The uncertain status and function of good faith by the drafters of the Convention appears to be deliberate: They imposed on contracting parties no substantive duty to act in good faith. Further, the placement of good faith in the CISG’s general principles also suggests that the reference to it is directed to the courts rather than to contracting parties. This outlier treatment stands in stark contrast to other international instruments, such as the Principles of European Contract Law and the UNIDROIT Principles of International Commercial Contracts, both of which explicitly impose a duty of good faith on the contracting parties. Nevertheless, in CISG cases, good faith is commonly referred to in judicial decisions but in such a way as not to make it clear what good faith means or to show why there is any need to invoke it outside of its interpretive purpose.
Thus, domestic courts, international tribunals, scholars, judges and arbitrators have, at times, conflated the CISG’s interpretive provisions with its substantive ones, as this Article demonstrates with good faith. This comingling of an interpretive provision is problematic as it creates uncertainty among parties involved in international trade. The merging of different conceptions of the provision also reflects the scholarly discourse on the topic: some CISG scholars argue that the role of good faith is limited to the interpretation of the CISG only while others view good faith in the CISG as a general principle that must govern the conduct of the contracting parties. Distinctions between what is simply interpretive guidance and what is substantive law is of crucial importance to courts and tribunals in developing sound and principled jurisprudence regarding the proper application of the CISG. This Article argues that an expansive role for good faith was never contemplated by the drafters of the Convention, and a review of subsequent case law on it has neither clarified what good faith means in practice nor shown legal practitioners why it needs to be invoked when the cases can be settled by other means. The current confusion over good faith creates contractual ambiguity and this lack of clarity does not auger well for the future of the CISG as a uniform sales law in international transactions.