To Expand or Not to Expand? That is the Question.

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The United Nations Commission on International Trade Law (UNCITRAL) enacted the United Nation’s Convention on Contracts for the International Sale of Goods (CISG) on April 11, 1980. It has since become one of the most successful private international treaties worldwide; however, a recent proposal by the Swiss made during the Forty-Fifth session of the United Nations calls the CISG  “a piecemeal work, leaving important areas to the applicable domestic law.”

Some of the areas that the Swiss are concerned about are the areas of “agency… fraud, duress, gross disparity, illegality, and control of unfair terms….” The Swiss argue that because of these gaps domestic and regional laws have stepped in to fill the cracks, which has led to confusion among practitioners and international businesses and has prevented some from even entering the international market.

In order to revive the CISG the Swiss propose to create a much more expansive binding international treaty, one that would deal with “the full array of legal issues that arise in a contractual business to business relationship.” However, there are some problems with such an ambitious undertaking.

One of these problems is finding the support for such an expansive doctrine. From the beginning, the CISG has been a document of compromise where topics that could not be decided by the majority were intentionally omitted. Now, the CISG has 79 signatories making the chances of compromise even more impossible. However, the Swiss believe it can be done.

The Swiss also fail to address how courts, tribunals, arbitrators, and practitioners have dealt with the gaps within the CISG over the decades. In the past, they have looked to other international treaties to supplement the CISG in attempts to deal with topics intentionally omitted by the drafters. One such international treaty is the International Institute for the Unification of Private Law Principles of International Commercial Contracts (UNIDROIT Principles). If we can put aside the debate on whether the UNIDROIT Principles were created with the general principles of the CISG in mind one can see that the Principles have been used in court proceedings to assist judges/ arbitrators in deciding on the CISG.

So, while there are more arguments for and against the expansion of the CISG the question remains; should we expand the CISG to deal with all aspects of an international contract or should we continue to rely on the method accepted by the international community and supplement the CISG with other international treaties? Which method would better “provide a modern, uniform and fair regime for contracts for the international sale of goods…?”

Source: UNCITRAL; Picture: Pace Law School

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