Journal of Law and Commerce

Lost in Translation: Interpreting Diverging but Equally Authentic CISG Texts

Ingeborg Schwenzer, Cesar Pereira — Tue, 27 May 2025 00:00:00 -0400

There are six different authentic CISG texts, which are to be deemed equally authoritative. Despite the efforts during the diplomatic conference, the texts encompass divergencies amongst their provisions. The issue raises a question as to the uniform interpretation of the CISG. This article examines some of the specific instances of discrepancy and how to resolve them under the CISG and the Vienna Convention of the Law of Treaties. It also discusses the issue of how parties may expressly or impliedly choose under Article 6 CISG a specific authentic or nonauthentic version of the CISG to govern their contract.

Digital Goods and the CISG

Ulrich Magnus — Tue, 27 May 2025 00:00:00 -0400

The digital age requires rules for the purchase and sale of digital goods. Do the traditional sales rules—codified or judge-made—still suffice for trading such goods? Only a few years ago, in 2019, the European Union enacted special norms for these sales by two Directives, although essentially restricted to transactions between businesses and consumers.1 The Member States of the European Union (EU) had to implement the norms of the Directives. For instance, the German legislator included a considerable number of new provisions into the German Civil Code (BGB); partly they are entirely new, partly they replace or modify the formerly applicable ones. The new rules have applied since January 1, 2022. This was the mandatory date on which the new law entered into force in all Member States.

The following text pursues whether, in the international arena, the CISG is still fit for the digital age or also needs a digital refurbishment.

Costly Mistakes

Francesco G. Mazzotta — Tue, 27 May 2025 00:00:00 -0400

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Formal and Operative Rules of the CISG: Case of Article 25

Larry A. DiMatteo — Tue, 27 May 2025 00:00:00 -0400

The United Nations Convention on Contracts for the International Sale of Goods (CISG) has been the law of some countries for the better party of forty years. The case law (judicial and arbitral) has grown steadily over this time. Unfortunately, the case law is spread unevenly over its eighty-eight substantive articles. This Article will provide a framework for performing a factors analysis of one of its most important articles. CISG Article 25 sets the standard of fundamental breach for the type of breach that allows the nonbreaching party to avoid or terminate the contract. A factors analysis seeks to discover the key facts or factors that best predict a court’s (and arbitral tribunal) decision on whether or not a breach is fundamental. The difference between formal and operative law can be drawn out by such an analysis. The difference between these two perspectives or types of rules can be depicted by two questions: In reading an article or rule of the CISG, what is the plain meaning or common sense meaning of the rule (formal rule)? In its application, what factors are most predictive of the decision involving the rule’s application, irrespective of the rule’s plain meaning (operative rule)? This analysis is founded on the simple premise that certain facts or factors in particular cases predict if and how a court applies a rule of law. This Article will focus on the interface between formal law and operative facts or factors.

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

Dr. Peter J. Mazzacano — Tue, 27 May 2025 00:00:00 -0400

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.

Unified Law in a Fragmented World: CISG and Conformity in Global Production

Nevena Jevremović — Tue, 27 May 2025 00:00:00 -0400

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The Formation of the CISG Contracts (Smart Contracts and Artificial Intelligence)

Pilar Perales Viscasillas — Tue, 27 May 2025 00:00:00 -0400

The 1980 Vienna Convention on Contracts for the International Sale of Goods (CISG) is currently the law of ninety-seven countries around the world. Part II (Formation of the Contracts) deals with the conclusion of the contract by way of the meeting of minds through offer and acceptance. CISG has been able to adapt to modern electronic means of communication such as email, despite the fact that the means of communication mentioned in the CISG are the ancient telegram and telex.
When dealing with the electronic contract of sale, we are referring to those in which the offer and acceptance are made by electronic means, as derived from the rules of the offer and the acceptance under the CISG.
In short, we are thinking about computers—today also mobile phones—connected to a network (internet). From this perspective, every purchase and sale contract under the CISG is capable of being concluded by electronic means following the classic and universal parameter (we find it in all legal systems in the world) of consent through the two declarations of will that give life to the contract, the offer and the acceptance. The offer and acceptance as a mechanism well present in the life of the contract and not only in its formation since other issues such as its modification or termination are observed under those parameters.
The Vienna Convention has demonstrated its flexibility by adapting and applying without problems to electronic contracting. Technologies are evolving rapidly and we no longer question the validity of contracts concluded through electronic means but new and interesting perspectives emerge, as well as various legal problems that can be associated with the era of the digital economy, from the use of platforms as an intermediary in the contracting of goods or services—or simply as a meeting place or recreational or social exchange—when not as part of the commercial contracts themselves, the use of computer programs in the formation and performance of the contract, legal transactions on data, or the use of artificial intelligence in contracting.
From a legal perspective, the question is whether the CISG, which is a traditional instrument of contract law, is sufficient to respond to the problems posed by the digital economy, specifically in the rise of the so-called SmartCcontracts, and the use of Artificial Intelligence (AI) in the formation of the contract.

Volume 43 CISG Symposium Front Matter

George Balchunas — Tue, 27 May 2025 00:00:00 -0400

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