Uniform Application and Interest Rates Under the 1980 Vienna Sales Convention

Uniform Application and Interest Rates Under the 1980 Vienna Sales Convention

Description

While the trend toward world-wide harmonization of trade law is one hundred years old, this tendency is still characteristic of the twentieth century. Indeed, it is in this century that “[t]he globalization of most national economies has resulted in a dramatic increase in transnational commerce” and, consequently, in the increasing necessity of a corresponding legislative policy designed to regulate such transnational commerce. The need has arisen for a body of law to govern business transactions linked to a plurality of legal systems. Since “[i]nternational trade has been hindered by a myriad of distinct domestic laws,” this body of law has had to reduce the obstacles to international trade caused by the differences in municipal laws, In other words; it had to “reduce the impact of national boundaries,” the worst enemy for the international merchants and traders. Consequently, “[e]fforts have long been underway to promote international trade by unifying and harmonizing international commercial law.” In order to achieve this goal, two techniques in particular have been adopted: the unification of rules of private international law, i.e., choice-of-law rules, and the unification or harmonization of substantive rules. “The uniform choice-of-law rules assure a party entering into a contract with a foreign enterprise that no matter which forum a dispute is brought before, the chosen country's substantive law will apply. When the substantive legal rules are made uniform, the party is assured further that courts will apply the same legal rules no matter where the parties litigate the dispute.” There has long been a disagreement among legal scholars as to which technique is preferable. But more recently, there appears to be a tendency favoring the uniform substantive rules over the uniform choice-of-law rules, even though the unification of the choice-of-law rules may prove advantageous from certain points of view. Aside from the technique chosen, the efforts toward unification have usually taken only one form: “the form of binding instruments, be it supranational legislation, international conventions or model laws,” although other forms are conceivable as well. The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) elaborated· by the United Nations Commission on International Trade Law (UNCITRAL) does not constitute an exception to the aforementioned rule. On the contrary, it is one of the most successful binding instruments drafted on an international level. In order to achieve uniformity in international trade law, however, it is not sufficient to enact uniform law conventions. “It is equally important that its provisions ... be interpreted in the same way in various countries.” Although this necessity may arise in relation to any international convention drafted by an international group of lawyers coming from different legal backgrounds, it is most accentuated in the Vienna Sales Convention, since this necessity generally arises in proportion to the number of legal systems represented by the various Contracting States. This is why the drafters of the Vienna Sales Convention introduced a provision designed to limit the perils of its diverging application. According to this provision, “in the interpretation of [the] Convention, regard is to be had to its international character and to the need to promote uniformity in its application….” The Convention also sets forth a rule to be applied in cases of gaps: “Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private inter-national law.” However, the peril of diverging applications of the Vienna Sales Convention is not totally cured by the introduction of those provisions because they do not identify a method of interpretation or gap-filling, but only a goal—the promotion of uniformity. The rule to be applied in cases of gaps, for example, does not identify any helpful criterion to determine in concreto when a gap is considered a lacuna intra legem, i.e., the matter is outside the scope of the Convention, as opposed to a lacuna praeter legem, i.e., the Convention applies to the issue but does not expressly resolve it. This problem is most important in determining the exact sphere of application of the Convention.

Source Publication

Review of the Convention on Contracts for the International Sale of Goods (CISG) 1995

Source Editors/Authors

Cornell International Law Review

Publication Date

1996

Uniform Application and Interest Rates Under the 1980 Vienna Sales Convention

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