Zeller, Bruno (2003) Four-Corners - the methodology for interpretation and application of the UN convention on contracts for the International Sale of Goods. Working Paper. Pace Law School, New York, USA.

Abstract

The United Nations Convention on Contracts for the International Sales of Goods (CISG) came into force in 1988 when the required number of States deposited their instruments of ratification. In 1989 the relevant Australian Parliaments introduced the CISG as the Sale of Goods (Vienna Convention) Act. Through that process the Convention became part of our domestic law. Significantly articles 7 and 8 - the interpretative articles - were incorporated into the CISG. Article 7 basically has two functions. First it assists in interpreting the Convention and secondly it defines the boundary between the application of the CISG and domestic law. Article 7(1) requires that the CISG be interpreted uniformly to promote the international character of the Convention. Recourse to domestic principles is not allowed. A new autonomous method of interpretation is developed with the aid of case law and practices. Article 7 also points to the application of good faith in international trade. Good faith as a principle is not only applied to the interpretation of the CISG as a whole but it also regulates the behavior of the parties. Article 7(2) recognizes that the CISG was never intended to be a complete statement of sales laws. The members of the diplomatic conference in Vienna could not agree on the inclusion of several important principles of contract law into the Convention such as the principle of validity. As a consequence article 7 also delineates between the application of the CISG and domestic law through the process of gap filling. This thesis develops the principles and tools needed to implement article 7(2) as gaps need to be filled in conformity with the general principles on which the CISG is based. It is also contended that restatements of contract law, such as the UNIDROIT Principles, if adopted by contractual parties will minimize references to domestic law. In response to the mandate of article 7, this thesis shows that tribunals and courts will look for a solution within the "Four Corners" of the CISG in a manner contemplated by those preparing it rather than taking recourse to domestic law. It is also argued that the failure to apply the rules contained within the "Four Corners" does not indicate an unwillingness to depart from domestic laws. Rather it reveals that a "sophisticated grasp" of the provisions of the CISG has not yet been achieved. Article 8 explains the interpretative rules regarding the relations between contractual parties. In particular the subjective as well as the objective intent of parties must be elicited in order to arrive at a correct understanding of the mutual obligations entered into by the parties. Article 8 touches on subtle and difficult issues, which are only partially solved through article 7. Some domestic doctrines such as the parol evidence rule and the rules on mistake need to be abandoned or reviewed. This thesis highlights the importance of reading the CISG within its "Four Corners" as individual articles cannot be read and interpreted in isolation. They are connected through general principles on which the CISG is based.The conclusion, supported by doctrinal writing and international jurisprudence, is that the CISG has been interpreted pursuant to the autonomous mandate and that courts in general have understood the significant differences of the CISG compared to domestic law.

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