Which international body created the Convention of contracts for the International sale of goods?

I. Introduction

For the last two decades, the United Nations Convention on Contracts for the International Sale of Goods (CISG)1 and the International Institute for the Unification of Private Law’s (Unidroit) Principles of International Commercial Contracts (PICC)2 have stood as cornerstones in the efforts to modernize and harmonize international contract law. However, at the two most recent sessions of the United Nations Commission on International Trade Law (UNCITRAL), the adequacy of the CISG and the PICC has been the subject of substantial debate, with some calling for the development of an entirely new framework to harmonize general contract law. The USA, however, believes that further modernization and harmonization of international contract law can best be achieved by continuing the use of the existing structure.

At its 2012 plenary session, UNCITRAL endorsed the PICC, commending them for their intended purposes, identifying them as complementary to the CISG, and congratulating Unidroit on preparing ‘general rules for international commercial contracts.’3 Yet, several States at the session called for consideration of a new, comprehensive codification of contract law rules and principles for business-to-business international transactions.4 The proponents of this new instrument referred to the CISG as ‘merely a sales law’ and ‘a piecemeal work, leaving important areas to the applicable domestic law.’5 The PICC were characterized as ‘a soft law instrument’ with a ‘mere opt-in scheme.’6

Other States, including the USA, expressed strong opposition to any effort to develop an entirely new framework for international contract law, given the wide acceptance of the CISG and the PICC and the unlikelihood of achieving a much-expanded new treaty on a broader range of issues. Nonetheless, the Secretariat was requested ‘to organize symposiums and other meetings … to assist the Commission in the assessment of the desirability and feasibility of future work in the field of general contract law.’7 In part to fulfil this mandate, UNCITRAL co-sponsored a symposium entitled ‘Assessing the CISG and Other International Endeavors to Unify International Contract Law’ at the Villanova University School of Law, in Villanova, USA, in January 2013, and held an expert meeting on contract law at UNCITRAL’s Regional Centre for Asia and the Pacific in February 2013.8

At its July 2013 plenary session, UNCITRAL decided, on the basis of a US proposal, to hold a colloquium in 2015 celebrating the 35th anniversary of the CISG.9 It was pointed out that since the 2005 UNCITRAL colloquium which celebrated the 25th anniversary, 17 more States had become party to the Convention, bringing the total number of parties to 80.10 It was also decided at the session that the scope of the 2015 colloquium would examine the Convention broadly, including its relationship to the PICC. States further agreed that the colloquium would address aspects of the proposal made at the 2012 session of the Commission calling for consideration of a new instrument for international contract law.11

This article focuses on the issues that should be considered at the colloquium in 2015 from the perspective of the USA. The colloquium will provide a unique opportunity to promote further global awareness of both the CISG and the PICC. It will also provide an important opportunity to highlight the complementary relationship between the binding nature of the CISG and the non-binding nature of the PICC. We do not believe that a new project on international contract law is warranted for the following reasons:

• the CISG and the PICC, working together, have been remarkably successful in addressing the needs of commercial players in international commerce;

• the negotiation and preparation of a new instrument is not feasible;

• a new instrument might have a negative impact on the adoption of the CISG and the application of the PICC;

• there are no demonstrated significant problems in the transactional community with the current structure nor a demonstrated desire for this project from those whose transactions would be governed by it; and

• there are other, more practical and efficient, ways to update and harmonize international contract law.

II. Is a new framework necessary and feasible?

This article first considers the merits of whether further legislative work should be undertaken in UNCITRAL concerning international contract law. At its July 2013 session, the Commission reviewed the general criteria for assessing whether legislative work should be undertaken ‘in light of the increasing number of topics referred to UNCITRAL for consideration’ and ‘[b]earing in mind the scarce resources … and particularly the limited conference room time available.’12 The Commission decided that work should only proceed if:

1. ‘the scope of a future text and the policy issues for deliberation were sufficiently clear’;

2. legislative development would not ‘duplicate legislative work on topics being undertaken by other international or intergovernmental bodies’;

3. ‘a legislative text on the topic would enhance modernization, harmonization or unification of the international trade law’; and

4. the topic is ‘amenable to harmonization and the consensual development of a legislative text.’13

Applying these criteria, we conclude that the case has not been made for a new instrument on general contract law.

1. The scope of a future text and the policy issues for deliberation are not sufficiently clear

As has been pointed out, the proposal in UNCITRAL does not clearly delineate the scope of a future text and the policy issues for deliberation. The proposal calls for UNCITRAL to establish ‘a new mandate for work to be undertaken’ but is couched in general terms and only requests that States ‘discuss what particular form UNCITRAL’s future work on international contract law might take.’14 Since the proposal does not specify the nature of the instrument, this article addresses the alternatives. It considers first the desirability of developing another soft law instrument on general contract law and whether this instrument would duplicate work that has already been undertaken. The article then addresses the desirability and feasibility of an alternate hard law instrument on general contract law.

2. Legislative development of a soft law text would duplicate existing work

The development of another soft law text would duplicate work that has already been undertaken. Taken together, the CISG and the PICC already provide a substantial and sufficient modern framework for the harmonization of international sales and contract law through a combination of hard law and soft law.

A. CISG

In April 1980, the CISG was adopted at a diplomatic conference convoked by the UN General Assembly, after a half-century of work in the international arena, including a decade of work in UNCITRAL.15 At the 2005 UNCITRAL colloquium celebrating the 25th anniversary of the CISG, Herbert Kronke, then Secretary-General of Unidroit, cited the Convention as probably the single most successful treaty in the history of modern transnational commercial law.16 At that time, it was recognized that together the share in cross-border trade of the then 63 contracting States to the CISG represented over two-thirds of the total volume of international trade.17 Today, with 80 contracting States, including Japan (accession in 2008) and Brazil (accession in 2013), this share likely represents a significantly greater percentage of the total volume of world trade.18

At the 2005 colloquium, it was also generally recognized that the CISG provides a neutral and modern framework for the contract of sale, which is the backbone of international trade in all countries. State parties range from the least economically developed to the most developed, and all major legal traditions of the world are represented among them. As Jernej Sekolec, then Secretary of UNCITRAL, concluded in his welcoming address, ‘[t]his makes the Convention a world sales law and the experience with the Convention guarantees that the membership of the Convention will continue to grow.’19

During the recent discussion on whether a new initiative is appropriate, there appears to be universal agreement concerning the positive effect that the CISG has had on the harmonization of international contract law. For example, at the Villanova symposium, Anna Veneziano, the deputy Secretary-General of Unidroit, aptly summarized the effect of the CISG as follows:

The Convention indeed constitutes an extraordinary achievement not only for the unprecedented width of its scope of application and the high number of States from all continents which participated in the Diplomatic Conference in Vienna, nor just for its subsequent undeniable success in terms of ratifications and its practical application. Perhaps even more significantly, it has played a major role in building a universally shared vocabulary and a common denominator of rules which have since represented the basis for any academic discourse on international contract law, as well as serving as a model for national legislation and international and supranational instruments alike. Last but not least, it has offered the opportunity to develop various methods to strive for uniformity in the interpretation by domestic courts and arbitral tribunals in different jurisdictions.20

B. PICC

In 2011, Unidroit approved a third edition of the PICC, after more than three decades of work, including the earlier preparation and approval of a first edition of the Principles in 1994 and a second edition in 2004.21 At the 2005 colloquium, Kronke addressed the complementary effect of the binding nature of the CISG and the non-binding nature of the PICC. He concluded:

What we see looking at the two instruments—the CISG as the mother of all modern conventions on the law of specific contracts and the UPICC as the (inevitably) soft-law source of modern general contract law—are neither competitors nor apples and pears. What we see is actually, and even more, potentially, a fruitful coexistence. … [T]he Unidroit Contract Principles are, obviously, complementary in that they address a wide range of topics of general contract law which neither the CISG nor any other existing or future convention devoted to a specific type of transaction would ever venture to touch upon.22

In their current form, the PICC can be used for diverse purposes. As pointed out earlier, UNCITRAL, when endorsing the PICC, ‘commend[ed] the use’ of the Principles ‘as appropriate for their intended purpose’ as set forth in the preamble.23 The preamble states that:

They shall be applied when the parties have agreed that their contract be governed by them.

They may be applied when parties have agreed that their contract be governed by general principles of law, the lex mercatoria or the like … [and] when the parties have not chosen any law to govern their contract.

They may be used to interpret or supplement international uniform law instruments … [and] to interpret or supplement domestic law.

They may serve as a model for national and international legislators.24

Today, more than 300 published decisions rendered worldwide refer to the PICC.25 As has been pointed out, ‘since most of the decisions relating to the PICC are arbitral awards which are not published, the total number of decisions referring … to the Unidroit Principles is considerably greater.’26 Veneziano rightly concludes: ‘Almost twenty years after the publication of their first edition, it is fair to say that the PICC, notwithstanding their non-binding nature—or maybe precisely as a consequence of their soft law character—have enjoyed great success when compared with other international uniform law regulations (including the ones which have binding force).’27

C. It would be unwise to duplicate work already undertaken by Unidroit

During the recent meetings, many felt that development of another soft law text like the PICC would not be desirable. For example, Pilar Perales Viscasillas stated at the Villanova symposium:

[A] model law would not be a good tool for a general contract law instrument … [since the] UPICC is already a ‘model law’ available for the states. … In regard to a possible soft law instrument, i.e., an optional instrument for the parties, the same reservations as mentioned before appl[y]: there is again an instrument that … offers the parties good solutions, i.e., the PICC. In fact, the need for another optional instrument is unconvincing given the variety of options available to businesses.28

At this same symposium, Ingeborg Schwenzer was of the view that:

If a model law may bring about some harmonization at the beginning this will soon be lost after some time. This can especially be expected in a traditional field such as contract law where firm dogmatic conceptions and convictions prevail that have been shaped over centuries and that every lawyer has internalized from the very first day of law school.29

Instead, proponents of further work generally called for a binding convention such as the CISG, except that it would apply to a wide scope of international contracts and not just to sales.30 This article evaluates the proposal on this basis in the next sections.

3. It has not been demonstrated that a new binding convention on general contract law would best enhance the modernization, harmonization, or unification of international contract law

We believe that the continued implementation of the current framework provided by the CISG and the PICC will best enhance the modernization and progressive harmonization of international contract law.31 First, premature harmonization through a new convention on international contract law might do more harm than good, given the wide diversity in State law approaches. Second, the business community does not seem to believe that a new instrument is desirable at this time. Third, the PICC are more than adequate, particularly in international commercial arbitration, to provide the basis for further harmonization of general contract law, given party autonomy to choose the governing legal principles. Fourth, the PICC might also serve as a basis for gap filling with the CISG, under among other rationales, Article 7(2) (general principles of contract law). Fifth, efforts to harmonize regional contract law do not justify a new global negotiation on international contract law. Differences in regional practices, to the extent they exist, have not been shown to create significant obstacles in a transactional context.

A. Harmonization through a new convention on international contract law might do more harm than good

Proposals for a new global commercial contract code are not new. The possible value of a new global contract code as either a non-binding or binding mandatory instrument was also considered at the 2005 UNCITRAL colloquium celebrating the 25th anniversary of the CISG. At this conference, Kronke advised against being seduced by what he termed ‘the never-subsiding charm of codes.’32 He made the plea that the focus of private international law-formulating agencies be on the effective implementation of existing instruments in the field of international contract law.33

The value of a global contract code was again discussed at the UNCITRAL Congress on Modern Law for Global Commerce in 2007. One of the themes of this Congress was whether the formulating agencies should attempt complete harmonization of international contract law or live with diversity—a mix of harmonized international rules and national law. The conference raised serious doubts as to whether the benefits of complete harmonization (including the potential for lower transaction costs and increased trade) outweighed the costs of eliminating legal diversity (including the ability of jurisdictions to compete and learn from each other).34 The conference also demonstrated that substantive harmonization depends on, at least to some degree, procedural harmonization.35

Both the CISG and the PICC reflect decisions by the international formulating agencies to proceed cautiously in harmonizing international contract law. Except for private international law commercial treaties, only rarely are international conventions developed with an opt-out clause such as Article 6 of the CISG, which promotes party autonomy and permits the parties to utilize a national system they prefer.36 The Convention provides the parties, neither of whom wants to contract under the other’s law, with a neutral set of principles, which they can adapt as necessary. The Convention also operates as a gap filler to supply terms that the parties have not negotiated.37 On the other hand, the soft law opt-in nature of the PICC allows for a step-by-step approach to general contract law harmonization that permits corrections and underscores the significance of freedom of the parties to set their own contract terms and choose the applicable law.38 Together, both operate effectively and provide for a naturally evolving harmonization through progressive interpretation that is workable and useful and, at the same time, facilitates the use of contractually incorporated rules such as those produced by the International Chamber of Commerce (ICC)39 as well as best practices.

It has not been shown that the benefits of a new international hard law instrument on general contract law, even if it were feasible, would outweigh the costs. The CISG demonstrates that the most that can be achieved in an international convention would be relative harmonization of general contract law through an opt-out procedure (as opposed to the harmonization of general contract law through an opt-in procedure currently offered by the PICC). Conversely, one of the major drawbacks to a binding convention is that it cannot be easily modified as the law evolves, unlike a soft law instrument such as the PICC.40 Given the wide diversity in approaches to general contract law, it would not be prudent to attempt to harmonize such a broad area of contract law through an international convention that tries to freeze further development. The likely result would be vacuous and therefore harmful harmonization, reducing the current benefits of regulatory competition without any real compensatory gain.

B. What are the needs of business?

Obviously, it is important that any new product reflects the needs of cross-border commerce; otherwise, the parties will simply choose other options as the governing law (either by opting out or in). Based on our consultations and other analysis, we have found no support for a new initiative, nor concerted views from the business community that significant transactional impediments exist that could justify such a project. In business-to-business international transactions (the focus of the proposal for additional work), it would appear that the market is operating effectively and that differences in contract law do not pose a serious obstacle to cross-border trade.

(i) Surveys

Proponents of a new contract law initiative generally assert that ‘[d]ifferent surveys conducted during the last years revealed that traders themselves conceive differences in contract law as one of the main obstacles for cross-border transactions.’41 We are not aware of any significant surveys that have been conducted on a global basis that would support such a proposition. The proponents appear to be referencing surveys conducted in the context of the European Commission’s proposal for a regional Common European Sales Law (CESL).42

While these surveys may support the view that differences in mandatory consumer protection laws pose an obstacle to cross-border business-to-consumer trade in Europe, they do not establish that differences in contract law pose a significant obstacle to cross-border business-to-business trade (the focus of the UNCITRAL proposal) across the European Union (EU), let alone outside of this region.43 Moreover, the addition of one more set of international contract rules, given the existence of party autonomy and the right to choose the applicable law and ‘rules of law’ for an international transaction, could serve to exacerbate the number of ‘differences in contract law’ by adding yet another alternative. The main problem with the current system is arguably too much choice.

Some proponents of a new initiative on contract law in UNCITRAL acknowledge that differences between contract laws in different countries do not constitute a major obstacle to cross-border business-to-business trade in Europe. For example, Pilar Perales Viscasillas and Rafael Illesca Ortiz observe that:

The differences between contract laws in different countries do not constitute a major obstacle to cross-border trade, and it is not entirely correct to state that the search for the applicable law is a barrier to trade. Although some problems might exist in certain areas of the law, most traders use standard terms drafted by their trade organizations, while others rely on the application of international instruments either by direct application or by the choice of the rules of law. This coupled with the choice of arbitration as the dominate means of commercial dispute resolution makes any variations in national contract laws less important than in the area of consumer contracts.

The need for an optional instrument [that is, the CESL] is unconvincing given the variety of options available to businesses, such as the recently updated [PICC] and the European Principles of Contract Law (PECL). Furthermore, the CISG is the applicable law in business transactions between 23 of the 27 EU states and businesses from the remaining four states are free to opt-in into the CISG.44

(ii) Views of the ICC

Our conclusion is supported by the observations of the ICC (representing the views of hundreds of thousands of member companies in over 120 countries)45 offered in the context of the European Commission’s proposal for the CESL. In July 2013, the ICC circulated a letter urging members of the European Parliament to remove business-to-business sales from the scope of the CESL.46 The letter stated:

Contrary to the assertions of the European Commission, ICC has found no evidence that companies, including small- and medium-sized enterprises (SMEs), are being hindered significantly in cross-border EU business activities as a result of the different legal systems among EU member states, provided that national legal systems have a foundation in the principle of freedom of contract. …

CESL risks increasing legal uncertainty and transaction costs. The addition of a new, optional sales law instrument risks considerably increasing legal uncertainty for companies, rather than reducing it. …

Freedom of contract should be preserved. … It is a determining principle of contract law in all European legal systems that enables businesses to conduct cross-border commercial transactions based on self-negotiated contracts or standard contracts and general terms and conditions of businesses relatively easily.47

Earlier, the ICC observed that:

[T]he [European Commission] Green Paper does not give enough weight to the UN sales convention (CISG), which should be the law governing cross-border sales both within the EU and between the EU and third countries. The convention has so far been ratified by 76 [now 80] countries around the world, among them all but four European countries. Although it is limited to business-to-business trade in movables it represents a huge step towards a global sales law. For European businesses it has meant a significant simplification of cross-border trade, both within and outside the EU. If a further level of contract law in general and sales law in particular were to be introduced in the EU, there is a risk that this would complicate rather than simplify the legal situation for European business. We also wish to point out that ratification of CISG by the remaining EU member states would be a significant step in simplification of the cross-border trade in the EU.48

The ICC also noted that: ‘[T]he Unidroit principles already provide an “optional instrument” for business-to-business contracts, and that the freedom to choose the applicable law also means that all available national laws can be seen as “optional instruments.”’49 Based on these observations, a demonstrated desire for a new initiative on contract law does not appear to exist on the part of those whose transactions would be governed by it.

(iii) US consultations

The US government has consulted extensively with key US stakeholders focused on international contract law and the sale of goods and has found no support for a new initiative on international contract law. In October 2012, the proposal in UNCITRAL was the subject of a discussion at the annual meeting of the State Department’s Advisory Committee on Private International Law (which includes academicians, practitioners, and representatives of business interests).50 At this meeting, the proposal for a new contract law text was not supported.51 Subsequently, the Executive Committee of the Uniform Law Commission (ULC)—the organization that co-developed, with the American Law Institute, the Uniform Commercial Code in the USA—adopted a resolution stating that the ULC opposes the proposal made in UNCITRAL because the project is very unlikely to be successful and because an attempt to develop the type of instrument proposed would not be a prudent use of resources.52 On this basis, it is our view that the time is not right for undertaking a new initiative on international contract law.

C. Recognition of rules of law

Proponents of a new initiative on international contract law assert that the PICC do not provide a sufficient basis for the harmonization of general contract law since ‘many courts will decline to give effect to a choice of law in favor of a soft law instrument.’53 Nonetheless, as pointed out earlier, arbitration is the predominant form of international commercial dispute resolution, and the ability of parties to refer to rules of law to govern their contract in arbitration practice is well recognized.54 For instance, ‘[t]he reference to “rules of law,” rather than merely “law,” [in Article 28(1) of the UNCITRAL Model Law on International Commercial Arbitration] has been interpreted as permitting parties to select non-national legal systems in their choice-of-law agreements.’55 Similarly, the 2010 UNCITRAL Arbitration Rules (Article 35(1)) specify that ‘[t]he arbitral tribunal shall apply the rules of law designated by the parties as applicable to the substance of the dispute.’56 Institutional arbitration rules also permit the tribunal to apply directly rules of law such as the PICC even in the absence of a choice of law. For example, Article 21(1) of the 2012 ICC Rules of Arbitration provides that ‘[t]he parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.’57

In international litigation, however, the ability of parties to refer to rules of law to govern their contracts is more limited. As the preamble to the PICC states, in international litigation:

[F]reedom of choice of the parties in designating the law governing the contract is traditionally limited to national laws. Therefore, a reference by the parties to the Principles will normally be considered to be a mere agreement to incorporate them into the contract, while the law governing the contract will still have to be determined on the basis of the private international law rules of the forum. As a result, the Principles will bind the parties only to the extent that they do not affect the rules of applicable law from which the parties may not derogate.58

In this regard, Council Regulation (EC) 593/2008 on the Law Applicable to Contractual Obligations (Rome I Regulation) permits the parties to incorporate by reference a non-State body of law into their contract, but it does not permit the parties to designate non-State rules of law to govern their contract.59 The Inter-American Convention on the Law Applicable to International Contracts (Mexico City Convention) is more permissive in recognizing the ability of the parties to select the applicable law.60

In the Hague Conference on Private International Law (Hague Conference), governments are engaged in a work in progress designed to promote party autonomy and, as part of this work, recognize and promote the use of rules of law, such as the PICC. The draft Hague Principles on Choice of Law in International Contracts (Hague Principles) endorse recognizing the choice of parties to have their contract governed by ‘rules of law that are generally accepted on an international, supranational or regional level as a neutral and balanced set of rules.’61 The definition of rules of law includes the PICC, enabling parties who so desire to have their contracts governed by the PICC.

During deliberations at a November 2012 meeting of a Special Commission of the Hague Conference concerning the Hague Principles, States recognized that in contracts between parties whose legal systems may not be fully developed, the use of rules of law may enable parties to select neutral principles, such as the PICC, rather than debate the merits of choosing the law of one State over another. In addition, reluctance to embrace this concept is more justifiable for business-to-consumer transactions (which are included within the scope of the Rome I Regulation) than business-to-business transactions (the subject of the Hague Principles) inasmuch as consumers in some jurisdictions may be considered to be more in need of help from the State to avoid unfortunate choices of one-sided ‘rules of law’ than businesses, who can be expected to take care of their own interests more effectively (and decline to agree to a disadvantageous set of rules of law, just as they would decline to agree to the disadvantageous State law).62

When completed, the Hague Principles will likely not only assist in expanding the operative effect of the designation of rules of law beyond international arbitration and into the judicial domain but also increase the use of the PICC. As Geneviève Saumier, the chair of the drafting committee at the meeting of the Hague Conference Special Commission, rightly concluded: ‘In that sense, the Hague Principles and the UPICC, in combination, may be worth more than the sum of their parts.’63

D. Gap filling: supplementing uniform law

Proponents of a new initiative on international contract law have also questioned whether the PICC can be used to interpret or supplement international uniform law instruments, including under Article 7(2) of the CISG.64 Article 7(2) provides that ‘[q]uestions 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 international law.’65 At the 2005 colloquium, Kronke explained the issue as follows:

The controversy turns on Article 7(2) CISG—and similar provisions in a number of other conventions—and the question whether ‘the general principles on which it is based’ must be construed in a narrow sense so as to refer only to general principles encapsulated in the CISG itself or, in any event, crystallized at the time when Article 7 was crafted at the 1980 Diplomatic Conference. While there continues to be authoritative support for this view the more widely held and, it is submitted, preferable opinion sees ‘the general principles’ referred to in, for example, Article 7(2) CISG as the essence of transnational contract law as it is evolving over time and across subject matters.66

He further observed:

What must be shown in the case at hand is, obviously, that the issue at stake (e.g. compensation of the other party in case of nonperformance) falls within the scope of the CISG and that the relevant provisions of the UPICC do express the ‘general’ principles on which the CISG is based.67

In 2010, Unidroit initiated a project to develop model clauses to ensure that the PICC would govern the contract, including as a means of supplementing and interpreting the CISG. With regard to the CISG, it was observed that:

[I]n actual practice both judges and arbitrators … increasingly resort to the Unidroit principles to interpret and supplement the CISG. … There are cases where recourse to the Unidroit Principles has been justified on the ground that the individual provisions of the Unidroit Principles invoked as gap-fillers could be considered as an expression of general principles underlying both the Unidroit Principles and the CISG. … On other occasions the Unidroit Principles have been applied as evidence of ‘usages widely known in international trade’ according to Article 9(2) of the CISG.68

It was further recognized, however, that the ‘[p]arties to an international sales contract governed by the CISG may wish to stipulate either in their contract or after the commencement of a court or arbitral proceedings that the CISG should be interpreted or supplemented by the Unidroit Principles’ in order to ‘ensure that judges or arbitrators, when faced with ambiguities or veritable gaps in the CISG, will primarily resort to the Unidroit Principles to settle the issues and turn to domestic law only as a last resort.’69

In May 2013, the Unidroit Governing Council approved the Model Clauses for the Use of the Unidroit Principles of International Commercial Contracts (Model Clauses), which include provisions to enable the parties to an international sales contract to stipulate in their contract that the CISG should be interpreted and supplemented by the PICC.70 Unidroit explained that ‘[b]y using this Model Clause the parties would impliedly derogate from Article 7(2) CISG [as permitted by Article 6 CISG] by indicating that gaps in the Convention are to be filled in conformity with the Unidroit Principles and as a last resource with reference to the applicable domestic law.’71 The Model Clauses are intended to further enhance the use of the CISG and the PICC by providing greater predictability and reducing transaction costs.72

At the 2013 plenary session of UNCITRAL, the relationship between the CISG and the PICC as well as the use of the Principles, including as gap fillers, was further discussed. Several States endorsed the approach taken by Unidroit in the Model Clauses concerning Article 7(2) of the CISG, since the parties would impliedly derogate from this provision as permitted by Article 6 of the CISG. It was agreed that the relationship between the CISG and the PICC would be further discussed and clarified at the 2015 colloquium celebrating the 35th anniversary of the CISG or at another event.73

E. Regional initiatives

Another justification cited by the proponents for a new convention on international contract law is that regional initiatives are being developed that would ‘lead to fragmentation’ and, as a result, ‘international contracting may become even more complicated.’74 The proponents reference in particular the Organisation pour l’Harmonisation en Afrique du Droit des Affaires’s (OHADA) Uniform Act on General Commercial Law and its draft Uniform Act on the Law of Contracts,75 the proposed CESL, and the draft Principles of Asian Contract Law (PACL).76 Nonetheless, these regional initiatives do not provide a justification for a new global contract law initiative.

In the first place, the CISG gives uniform regional laws precedence over the Convention. Article 94 of the CISG specifically provides that ‘Contracting States which have the same or closely related legal rules on matters governed by the Convention may at any time declare that the Convention is not to apply to contracts of sale or to their formation where the parties have their places of business in those States.’77 The Nordic States (Denmark, Finland, Iceland, Norway, and Sweden) made the declaration authorized by Article 94 in ratifying the Convention.78 As a result, for sales between the parties of those States, the CISG remains inapplicable. Additionally, Article 90 of the CISG provides that ‘[t]he Convention does not prevail over any international agreement which has already been or may be entered into and which contains provisions concerning the matters governed by this Convention, provided that the parties [to the contract] have their places of agreement in States parties to such agreement.’79

Regional harmonization may be particularly useful in regions with less developed economies and where the CISG and the PICC are used as a basis for the reform measures. For example, OHADA has its own central court and has itself enacted several uniform acts, including the Uniform Act on General Commercial Law (Acte uniforme portant sur le Droit commercial général), which was first enacted in 1997 and amended in 2010.80 The Uniform Act on General Commercial Law includes provisions on sales law that widely copy the CISG.81 Since only three out of the 17 OHADA Member States are party to the CISG, problems concerning the relationship between the CISG and the Uniform Act rarely arise. However, as has been pointed out, the relationship between the Uniform Act and the CISG is unclear where parties are located in the OHADA Member States that have also ratified the CISG (Benin, Gabon, and Guinea), since they have not made the declaration provided for in Article 94 of the CISG.82 Ulrich Magnus has suggested that if these States wish to give the regional sales law priority over the CISG, then they should consider making the declaration provided for in Article 94 of the CISG.83 It would also be beneficial for the Member States of OHADA that are not party to the CISG to consider ratification of the instrument in order to establish minimum standards for commercial transactional law outside of OHADA.84

OHADA’s proposed Uniform Act on the Law of Contracts illustrates the difficulty in attempting to harmonize international contract law through an international treaty. In 2002, OHADA requested that Unidroit assist in the preparation of a uniform contract law utilizing the PICC as a model. In 2004, an Avant-projet d’Acte uniforme sur le droit des contrats, which was prepared by a member of the Unidroit working group, was submitted to the competent organs of OHADA for consideration.85 However, some ten years later, this instrument still has not been adopted by OHADA.86 In short, OHADA’s regional work on international contract law does not provide a reason for initiating work on a new convention on international contract law in UNCITRAL.

The harmonization efforts of European contract law have focused on the ‘weaker party’ (a controversial subject), including consumers and small- and medium-sized enterprises (SMEs).87 Under the European Commission’s CESL proposal, the new set of rules would operate as an opt-in instrument that can be chosen in cross-border sales contracts between businesses and consumers, and between business and businesses where at least one of them is a SME.88 The fate of the new proposal is unclear. Some governments have disputed whether differences in contract law pose a genuine obstacle to cross-border trade for both business-to-consumer and business-to-business transactions in Europe.89 For business-to-business transactions involving a SME, some observers have questioned whether the new CESL is desirable since the main problem with the current system is too much choice.90 Others have called for the elimination of business-to-business transactions altogether from the scope of the CESL.91

In all events, the CESL does not provide a basis for a new global contract law initiative, given the different philosophy underlying the CESL and its attempt to develop special rules for the weaker party. The EU with its supranational sources of consumer law is the exception rather than the rule in international transactions, and it would be a mistake to attempt to duplicate those efforts at the international level.92 Both the CISG and PICC function in a pure business-to-business environment and assume that the parties are acting as equals. The breadth of the parties’ freedom to modify the Convention’s rules was made possible by excluding certain transactions from the scope of the CISG, including consumer transactions.93 Moreover, application of the CISG gives SMEs the opportunity to perform international trade on already established neutral grounds with already developed trade customs and without the obstacles of having to deal with a different legal system, increased costs, and a lack of information.94

With regard to the PACL, the initiative is not intended to create a regional instrument like the CESL or the OHADA draft Uniform Act on the Law of Contracts. Instead, as Shiyuan Han (one of the organizers of the initiative) explained at the Villanova symposium, the PACL ‘is a private initiative by scholars trying to harmonize rules of contract law, and the aim is to create a model law.’95 Again, it is difficult to see how the existence of the ongoing private PACL initiative would require an international negotiation on contract law in UNCITRAL.

In sum, it has not been shown that the development of a new international convention on general contract law is desirable. The CISG and the PICC address the needs in this area and have been remarkably successful. There are no demonstrated significant problems in the transactional community with the current structure nor a demonstrated desire for this project from those whose transactions would be governed by it. Moreover, both Unidroit and the Hague Conference are engaged in important work designed to enhance the effective implementation of the CISG and the PICC and the harmonization of international trade law. We believe that work utilizing the existing structure should continue and that it is adequate to deal with the evolution of commercial law standards where needed and where practicable in a global context.

4. The topic is not amenable to further harmonization and consensual development by means of an international treaty as a practical matter

Even assuming (which the US does not) that sufficient need for a new initiative on international contract law could be demonstrated, is it realistic to assume that these needs would be satisfactorily addressed in a new multilateral convention? The pitfalls of attempting traditional harmonization through international conventions have long been documented: (1) the negotiation and drafting of a treaty is a lengthy, difficult, and costly process; (2) the degree of unification may be extremely restricted and the differences may be irreconcilable due to the participation of States with different legal traditions and backgrounds; (3) the negotiating history of the PICC suggests that any new negotiating effort would be difficult at best; (4) the negotiation may be even more complicated where there is an existing instrument in the field (that is, the CISG); and (5) even if negotiations were eventually successful, the subsequent process of adopting and securing widespread ratification of any new instrument would take many years.96 In short, we do not believe that it is feasible to attempt further harmonization of such a broad area of international contract law through a new international convention.

A. Treaty negotiation: a complicated and costly process

As has been observed elsewhere, the negotiation and drafting of an international convention is a lengthy and costly process, often taking in excess of a decade. The negotiations concerning the CISG highlight the difficulty of the undertaking. The CISG negotiations, building on 40 years of work in other international organizations, still took ten years of deliberations in UNCITRAL and another five weeks for the text to be finalized and approved at the diplomatic conference held in 1980 in Vienna. As the explanatory note on the CISG prepared by the UNCITRAL Secretariat explains:

Preparation of a uniform law for the international sale of goods began in 1930 at [Unidroit] in Rome. After … the Second World War, the draft was submitted to a diplomatic conference in The Hague in 1964, which adopted two conventions, one on the international sale of goods and the other on the formation of contracts for the international sale of goods.

Almost immediately upon the adoption of the two conventions there was widespread criticism of their provisions as reflecting primarily the legal traditions and economic realities of continental Western Europe . … As a result, one of the first tasks undertaken by UNCITRAL on its organization in 1968 was to enquire of states whether or not they intended to adhere to those conventions and the reasons for their positions. In the light of the responses received, UNCITRAL decided to study the two conventions to ascertain which modifications might render them capable of wider acceptance by countries of different legal, social and economic systems. The result of this study was the adoption by diplomatic conference on 11 April 1980 of the United Nations Convention on Contracts for the International Sale of Goods, which combines the subject matter of the two prior conventions.97

If a new initiative were to be pursued now, we envisage a contentious, multi-year negotiation that would likely not bring worthwhile results, and result in excessive cost to international organizations and States. It could also detract from existing efforts to secure broader adoption of the CISG and use of the PICC.

B. The degree of unification may be extremely restricted

Additionally, because of the direct involvement of governments with different legal traditions and backgrounds, the degree of harmonization in an international convention may be restricted and differences may be irreconcilable. A new convention may reflect the lowest common denominator among existing domestic laws and produce minimum, rather than maximum, harmonization of law. Irreconcilable differences may result in unacceptable compromises.98 For example, the drafters of the CISG were confronted with widely different legal traditions, as well as different approaches to international business transactions and different policy approaches between developing and industrialized countries. Topics such as validity, mistake, and agency were left out of the CISG because they were not considered suitable for harmonization.99

One of the principal negotiators of both the CISG and the PICC, Peter Schlechtriem, described the drafting process of the CISG as follows:

Touching on the problem of drafting, … [s]ince each drafter is usually an expert only in his own legal system, it is likely that the respective domestic solutions offered by each drafter’s respective legal system are proposed and favoured, and the committees, working groups, etc., have to make a choice or to find a compromise. In addition, delegates might conceive themselves as representing certain interests, for instance, those of predominantly purchasing countries, while others are more aware of the needs of sellers. These different groups will propose conflicting viewpoints, and a choice or compromise will have to be made. …

In weighing the solutions, and especially the compromises, one has to bear in mind that the larger the number of participating states, the more numerous the compromises tend to be. They are, therefore, to a certain extent the price for a worldwide acceptance of the Uniform Law—paid of course, in advance.100

The proponents of a new initiative on international contract law draw attention to the fact that the CISG does not govern certain important areas, such as validity, but leaves them to domestic law.101 Schwenzer stated at the Villanova symposium: ‘[T]here are some fields where unification is more urgent than in others. The most important area where the gaps left by the CISG are most unfortunate, because they endanger uniformity already reached, are questions of validity.’102 Yet, questions of validity were expressly carved out in Article 4 of the CISG because there was no consensus on how to proceed. John Honnold, a key drafter of the CISG as the then Secretary of UNCITRAL, observed with respect to the scope of the Convention and issues of validity:

An airplane, it has been said, is a vehicle that almost doesn’t fly. The same could be said of international legislation; the Convention scope has been shaped by design decisions that narrow the law’s profile and lighten its load.

It would have been folly to try to overturn domestic rules prohibiting and invalidating various types of transactions and contract provisions; the Convention does not intrude on this sensitive domain.103

We see no evidence that the circumstances concerning these issues have changed. Larry Di Matteo made the following observation at the Villanova symposium, in arguing for a more comprehensive hard-soft international sales law with the CISG at its core:

Resorting to well-respected national commercial or contract laws will be necessary in some areas where national laws vary widely. This would be in the areas of defects in consent, validity, and agency contracts. In these areas, it is best to provide a number of options that the parties may select. Use of national laws, international soft laws, and trade practice materials should be reviewed in crafting optional rules that parties may select under the principle of freedom of contract.104

In short, the negotiating history of the CISG demonstrates the difficulty of the undertaking. There is no basis for assuming that the issues left out of the CISG could be renegotiated at this time.

C. Negotiating history of the PICC

Proponents of a new initiative cite the PICC as evidence that a codification of general contract law is feasible and could be accomplished within a reasonable period of time.105 In considering feasibility, it is also important to recall that at the time of the drafting of the CISG, Unidroit was simultaneously engaged in the preparation of a code on international contract law.106 Ultimately, the drafters decided to opt for a soft law instrument rather than the traditional model of a multilateral treaty. To quote Kronke:

[A]reas deeply rooted in legal and cultural tradition and everywhere moulded down to the finest details and leveled to become coherent systems resembling mathematics or philosophy, such as … general theories of contract are unlikely to lend themselves to successful harmonisation through Conventions. The Principles of International Commercial Contracts acquired their cloak because there was no hope whatsoever—as had been discussed at an earlier stage—of a Convention emerging that would contain the general part of the Unidroit Conventions dealing with contractual transactions that had entered into force over the years.107

Veneziano further explained at the Villanova symposium:

This approach was chosen for a number of different reasons. It was felt that the adoption of the CISG had represented the ‘maximum that could be achieved at the legislative level’ through inter-governmental negotiations. …

This method had the additional advantage of allowing the participants in the working group—composed of renowned international experts with different legal backgrounds and sitting in a personal capacity and not as representative of governments—more freedom in endorsing solutions which, though different from the ones present in their own legal systems, were considered to be either common practice in international transactions or, in some cases, better suited to international commercial contracts. The informal method minimized the political constraints and shifted the focus to the reasonability and economic soundness of the proposed rules. This enabled the drafters to develop over the years a wide set of rules covering virtually all issues which are traditionally ascribed to the general part of the law of contracts and obligations.108

E. Allan Farnsworth, another principal negotiator of both the CISG, as a member of the US delegation, and the PICC, as a member of the special working group, similarly highlighted the distinctions between the two negotiations:

While the setting in UNCITRAL was formal (delegates arranged behind placards with names of their countries … ), that in Unidroit was informal (with … easy give and take). While the atmosphere in UNCITRAL was political (because delegates represented governments, which [caucused] in regional blocs), that in Unidroit was apolitical (because [of the tradition of that body and because] participants appeared in their private capacity).109

Nonetheless, the negotiations of the first edition of the PICC still took 14 years to complete before being approved by Unidroit.110 In sum, the existence of the PICC does not establish that a new convention on international contract law is feasible.

D. Modifying existing instruments: How would one rework the CISG?

Development and harmonization of commercial law through the use of an international treaty may be even more complicated where there is an existing instrument such as the CISG. As has been pointed out, any new global contract law convention would inevitably have within its scope the coverage of the CISG.111 An attempt to revise the CISG might jeopardize the results that have been obtained over nearly 85 years of work in the drafting and implementation of that instrument. A global undertaking to revise and expand the CISG risks putting a stop to the wide adoption of the CISG and thus to the global harmonization of sales law.

Similar concerns were expressed in 2001–02 during UNCITRAL’s consideration of proposals to modify the CISG to reflect developments in the field of electronic commerce. A proposal to directly amend the CISG was rejected for several reasons, the first of which was that it could impair the ability to seek ongoing ratifications. There was a serious concern that however narrow the charge might be formulated, a number of provisions would be directly or indirectly affected and the whole fabric would be open to further amendments, without having established the need for such an expansive outcome or project. A proposal to consider a protocol to the CISG, where the scope of the work might better be contained, was dropped after a discussion of how data transactions, software, and other aspects of electronic commerce would be characterized. For example, does software constitute ‘goods’ within the meaning of the Convention and are software transactions ‘sales’ or ‘licenses’ or some mixture? The answers to these questions would to some extent determine the type of law that might be applicable and thus what was appropriately within or without the CISG. Finally, while there was some discussion of several articles of the CISG that could merit reconsideration, there was general agreement that the Convention had long since brought about a significant degree of harmonization directly and indirectly, and, absent a showing of real need to engage in such a complicated exercise, UNCITRAL should develop a stand-alone instrument.112

As a result, States developed ‘a stand-alone convention … without creating any negative interference with the well-established regime of the United Nations Convention on Contracts for the International Sale of Goods.’113 On this basis, in 2005, the UN General Assembly adopted the Convention on the Use of Electronic Communications in International Contracts as a free-standing convention.114

For similar reasons, during this same timeframe, UNCITRAL decided not to modify the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) to reflect the widening use of electronic commerce.115 Instead, UNCITRAL issued an interpretative statement to clarify the written form requirements governing arbitration agreements, arbitration proceedings, and the enforcement of awards. The history of the debate has been summarized in part by the Secretariat as follows:

The prevailing view was that, since formally amending or creating a protocol to the New York Convention was likely to exacerbate the existing lack of harmony in interpretation and that adoption of such a protocol or amendment by a number of states would take a significant number of years and, in the interim, create more uncertainty, that approach was essentially impractical. Taking the view that guidance on interpretation of article II, paragraph (2) would be useful in achieving the objective of ensuring uniform interpretation that responded to the needs of international trade, the Working Group decided that a declaration, resolution or statement addressing the interpretation of the New York Convention that would reflect a broad understanding of the form requirement could be further studied to determine the optimal approach.116

In 2006, UNCITRAL adopted a recommendation on the interpretation of the requisites for recognition and enforcement of arbitral awards under the New York Convention.117 Specifically, UNCITRAL recommended that Article II, paragraph 2, of the New York Convention, which defines ‘agreement in writing,’ be applied flexibly, ‘recognizing that the circumstances described therein are not exhaustive’ in light of arbitration agreements that are concluded entirely online.118

These same concerns exist concerning the way in which any new convention attempting to codify international contract law would interact with the CISG and whether it would reopen the entire Convention to amendments. As Henry Gabriel pointed out at the Villanova symposium, ‘[t]he particular concern is the possibility of two competing instruments—an original and a revised CISG.’119

E. Ratification process

There is also a question as to whether any new convention would achieve widespread ratification within a reasonable period of time. Even if negotiations were eventually successful, the subsequent process of adopting and securing broad ratification by States of any new convention could take many years and, meanwhile, there might be a major disruption of existing international commercial law as well as the creation of inconsistent duplicative conventions. In this regard, the CISG’s ratification rate with 80 parties over its 33-year history (an average of over 2 ratifications per year) has been remarkable. The only private international law treaty of general application with a more rapid ratification rate is the New York Convention, which was adopted in 1958 and now has 149 parties.120

Other conventions attempting to harmonize international contract law have unfortunately met with much less success. In 1974, UNCITRAL adopted the UN Convention on the Limitation Period on the International Sale of Goods (Limitation Convention) and, in 1980, aligned it with the CISG by means of an amending protocol.121 Despite the clear intent to have these two instruments operate in tandem, the amended Limitation Convention has been ratified by only 22 States, while the original text of the Limitation Convention has been ratified by 29 States.122

Unidroit and the Hague Conference have had similar experiences. As discussed earlier, the CISG was designed to supersede the two Hague Conventions of 1964, namely the Convention Relating to a Uniform Law on the International Sale of Goods and the Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, which were developed by Unidroit but did not find widespread acceptance.123 The Unidroit Convention on Agency in the International Sale of Goods attempts to reconcile the different legal approaches to agency, but it has never entered into force.124 Similarly, the 1978 Hague Convention on the Law Applicable to Agency and the 1986 Hague Convention on the Law Applicable in Contracts for the International Sale of Goods have only been ratified by four and two States respectively.125

In short, it has not been established that further improvement and harmonization of international contract law through an international convention is a desirable or feasible objective. As Peter Schlechtriem observes:

No codification is ever perfect, and every legal text, therefore needs instruments and concepts that allow adjustments, development and gap-filling to cope with issues not foreseen by its drafters. This is even more so in the case of codifications based on international conventions, for, while a domestic legislator might be willing and competent to enact necessary improvements and reforms, the chances that another United Nations conference can be convened on the CISG, that it will reach results, and that all states that have enacted the Convention will also enact reforms, is almost zero.126

III. Alternatives: what needs to be done?

One last and final question: Are there alternatives that are more practical, positive, and forward leaning? We believe such alternatives exist.

1. Promotion of texts

One of the most significant problems facing the private international formulating agencies is how to reach out and inform the world that an impressive portfolio of private international law instruments has been developed capable of enhancing international trade, including in the field of international contract law.127

A. UNCITRAL

As pointed out at the outset, UNCITRAL’s decision to hold a colloquium celebrating the upcoming 35th anniversary of the CISG in 2015 will provide a unique opportunity to further promote global awareness of the CISG, the PICC, and other instruments in the field.128 Additionally, a key function of UNCITRAL is its practice of endorsing instruments of other organizations, consistent with its primary mandate to promote coordination and cooperation in the development of international trade law.129 As discussed earlier, UNCITRAL has recently endorsed a number of significant instruments in the field of international commercial law, including the PICC, the ICC INCOTERMS 2010, and the ICC Uniform Customs and Practices for Documentary Credits.130 UNCITRAL might usefully consider endorsing two new texts in the field of international contract law. At the 2013 session of the Commission, the USA suggested that UNCITRAL endorse the Unidroit Model Clauses for use by parties of the PICC.131 Additionally, when the Hague Conference completes its work on the Hague Principles, UNCITRAL might consider endorsing this work.132

B. UNIDROIT

The Unidroit Governing Council has requested that the Secretariat continue providing the highest priority to the promotion of Unidroit instruments, including the PICC.133 The USA has encouraged Unidroit to consider additional ways to increase the visibility and usage of the PICC, including through a study of current practices regarding the use of the Principles. At the 2013 session of the Governing Counsel, the USA recommended that:

Unidroit should undertake a study to identify steps that could lead to more widespread use of the Principles. The study should include outreach to the private sector, to examine current practice regarding use of the Principles in cross-border transactions and to identify what barriers might exist to increased use. (We note that some studies on private sector usage have occurred in the past, but up-to-date information on private sector views would be valuable.) Similarly, the study should include outreach to governments—both Unidroit member states and non-member states—to ascertain the degree to which the Principles are taken into account in the context of legislative reform efforts and to identify any obstacles to increased use. … Moreover, the topic of increasing visibility and usage of the Principles could be included on the agenda of General Assembly meetings, to encourage discussion among member states regarding further steps that could be taken.134

At the 2013 plenary session of UNCITRAL, some States commented on the confusion that still exists concerning the interaction between certain private international law instruments, including the CISG and the PICC, as well as the importance for UNCITRAL, Unidroit, and the Hague Conference to cooperate in the implementation of existing texts. States welcomed the willingness expressed by the Unidroit Secretary-General to consider recommending to its Member States that they ratify the CISG.135

C. Regional efforts

Both UNCITRAL and the Hague Conference have recently established regional centres that offer a significant opportunity to promote the various private international law instruments, including those relating to international contract law.136 For example, the expert meeting on international contract law held by UNCITRAL’s Regional Center for Asia and the Pacific in February 2013 provided a valuable opportunity to not only promote the CISG and the PICC, but also to assess whether ongoing regional initiatives are suitable for integration with the CISG.137

The Republic of Korea has also engaged in important regional work with the UNCITRAL Secretariat in promoting UNCITRAL texts on enforcing contracts, including the CISG, in the context of the Asia-Pacific Economic Cooperation’s (APEC) Ease of Doing Business initiative.138 The USA hopes to be able to work with the Republic of Korea, UNCITRAL, and other member economies in these efforts in APEC, particularly in light of the decision at the 2013 plenary session of UNCITRAL to work on addressing the legal aspects of an enabling legal environment relating to the life cycle of micro-, small-, and medium-sized enterprises.139 Another significant example of a regional initiative promoting contract enforcement and the CISG is the joint project between UNCITRAL and the Deutsche Gesellschaft für Internationale Zusammenarbeit in Southeast Europe.140

2. Maintaining uniform interpretation of the CISG

The most crucial work of UNCITRAL relating to international contract law lies in its ongoing effort to maintain uniformity in interpretation and application of the CISG. In this regard, the development of the Case Law on UNCITRAL Texts (CLOUT) system141 and UNCITRAL’s Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods (CISG Digest)142 has been of immense importance.143 The process utilizes the private sector in maintaining uniformity through a network of national correspondents that generate case abstracts in the six official languages of the United Nations.144

In light of the importance of the issue, efforts by the UNCITRAL Secretariat are welcome to explore other means of promoting and maintaining uniformity in the interpretation of the CISG. The Secretariat has recently proposed the establishment of a system of national centres of expertise in the field of commercial law that go beyond the current national correspondent system of CLOUT. According to the Secretariat, the system would ‘(a) collect, analyze, and monitor national case law related to UNCITRAL texts, (b) report the findings to UNCITRAL, and (c) address the need of the judiciary to better understand the internationally prevailing application and interpretation of UNCITRAL standards and achieve effective cross-border cooperation.’145

As the Secretariat has noted, the biggest obstacle to such a proposal in UNCITRAL would be resources.146 UNCITRAL, like other elements of the United Nations, is under increasing budget pressures, as are member and observer States, including developing countries. At its 2013 session, the Commission acknowledged once again the need for further resources to sustain the CLOUT system. Thus, it is important that UNICTRAL marshal its resources effectively.147

3. Cooperation

Finally, UNCITRAL, and its sibling organizations, Unidroit and the Hague Conference, should continue to coordinate and cooperate on all matters regarding international contract law (whether legislative work or the promotion of existing instruments) in order to ensure that the organizations’ agendas remain complementary. All three organizations are overstretched and underfunded. Given these resource constraints, it remains vital for these organizations to work constructively together, particularly concerning the areas of intersection of the organizations.148

Pursuant to a US suggestion, both Unidroit and UNCITRAL have recently supported consideration of joint collaboration between the two organizations on substantive law projects.149 At the May 2013 Governing Council meeting, Unidroit endorsed the idea of substantive cooperation with UNCITRAL on future projects.150 Subsequently, at the July 2013 session of the Commission, there was broad support for the preparation of a joint report by the Secretariats of UNCITRAL and Unidroit highlighting possible joint projects that would be considered at the next plenary session of UNCITRAL in 2014.151

Unidroit and UNCITRAL might consider a joint project on long-term contracts. Unidroit is considering possible work related to the PICC for long-term contracts. At its May 2013 session, the Unidroit Governing Council authorized the Secretariat to undertake preliminary work to identify issues related to investment and other long-term contracts not adequately addressed in the 2010 edition of the PICC.152 Others have suggested that work might be undertaken in UNCITRAL on particular types of long-term contracts.153 Again, the same considerations should apply to any proposal for a new joint project: demonstration of need and feasibility, scarcity of resources, and competing priorities.154

IV. Conclusion

The CISG and the PICC continue to provide the best way forward for modernizing and progressively harmonizing international contract law. Naturally evolving harmonization through progressive interpretation and the use of existing instruments will continue to ensure that harmonization is workable and feasible. The CISG and PICC, working together, have been remarkably successful in addressing the needs of commercial players in international commerce.

We do not believe that a very broad new initiative on international contract law is needed or feasible. There are no demonstrated significant problems in the transactional community with the current structure, nor a desire for this project from those whose transitions would be governed by it. Moreover, an initiative on the scale proposed would consume considerable resources of both international organizations and States for many years, with limited likelihood of success. It could detract from existing efforts to secure broader adoption of the CISG and use of the PICC.

Most significantly, there are more practical, positive, and forward-looking alternatives that build on the existing platform of the CISG and the PICC. The colloquium in 2015 celebrating the 35th anniversary of the CISG will provide an important opportunity to further promote the CISG and the PICC. It is also essential for UNCITRAL to continue its effort to assist States in maintaining a uniform interpretation and implementation of the CISG. Finally, UNCITRAL, Unidroit, and the Hague Conference should continue to coordinate and cooperate on all matters relating to the harmonization of international contract law, including on the implementation of existing texts. The ongoing work on the Hague Principles and on the means of interpreting and supplementing uniform law constitute significant steps forward in the modernization and harmonization of international contract law.

2 International Institute for the Unification of Private Law (Unidroit), Principles of International Commercial Contracts (3rd edn, Transnational 2010) [PICC].

3 See Report of the UN Commission on International Trade Law, 45th Sess, 25 June–6 July 2012, UN Doc A/67/17, GAOR, 67th Sess, Supp No 17 (2012) para 140 [Report of the 45th Session] (endorsing the 2010 edition of the PICC). Earlier, UNCITRAL endorsed the 2004 edition of the PICC. See Report of the UN Commission on International Trade Law, 40th Sess, 25 June–12 July 2007, UN Doc A/62/17 (Part I), GAOR, 62nd Sess, Supp No 17 (2007) para 213 [Report of the 40th Session].

4 See Proposal by Switzerland on Possible Future Work by UNCITRAL in the Area of International Contract Law, UN Doc A/CN.9/758 (8 May 2012) 7–8 <http://www.uncitral.org/uncitral/commission/sessions/45th.html> accessed 15 January 2014 [Swiss Proposal]. The proposal, like Article 2 of the CISG, would exclude business-to-consumer transactions. See Ingeborg Schwenzer, ‘Who Needs a Uniform Contract Law, and Why?’ [2013] 58 Villanova Law Review 723, 729: ‘Like the CISG, the instrument on general contract law should be confined to b2b contracts without touching business-to-consumer (b2c) relationships.’ Schwenzer served as a member of the Swiss delegation to the 2012 session of the Commission and introduced the Swiss proposal. Article 2(a) of the CISG provides that the Convention does not apply to sales of goods bought for personal, family, or household purposes.

5Swiss Proposal (n 4) 3.

6 Ibid 5.

7 See Report of the 45th Session (n 3) paras 127–32 (summarizing debate).

8 See Report of the UN Commission on International Trade Law, 46th Sess, 8–26 July 2013, UN Doc A/68/17, GAOR, 68th Sess, Supp No 17 (2013) para 314 [Report of the 46th Session]. The papers relating to the Villanova symposium are published in Issue 58:4 of the Villanova Law Review. Papers relating to the UNCITRAL regional expert meetings are published in Tony Angelo, Luca Castellani and Yves-Louis Sage (eds), Contribution to the Study of International Trade Law and Alternative Dispute Resolution in the South Pacific (Comparative Law Journal of the Pacific and New Zealand Association for Comparative Law 2014).

9Report of the 46th Session (n 8) para 315.

11Report of the 46th Session (n 8) para 315.

12 Ibid paras 294, 303. At its 2011 session, the Commission agreed to reduce its entitlement to conference services to a total of 14 weeks per year ‘in view of the extraordinary constraints placed on the Commission and its secretariat to reduce regular budget expenditures during the 2012–2013 biennium.’ See Report of the UN Commission on International Trade Law, 44th Sess, 27 June – 8 July 2011, UN Doc A/66/17, GAOR, 66th Sess, Supp No 17 (2011) para 347.

13Report of the 46th Session (n 8) paras 303–4; see also ibid paras 310–32 (reporting Commission conclusions concerning ongoing and possible future legislative work).

14Swiss Proposal (n 4) 7–8.

15 See Peter Schlechtriem, Uniform Sales Law: The UN Convention on Contracts for the International Sale of Goods (Peter Doralt and Helmut H. Haschek (eds), Manzsche Verlags 1986) 17–21; John O Honnold, Uniform Law for International Sales under the 1980 United Nations Convention (Harry M Flechtner (ed), 4th edn, Kluwer Law International 2009) paras 4–10.

16 Herbert Kronke, ‘The UN Sales Convention, the Unidroit Contract Principles and the Way Beyond’ [2005] 25 Journal of Law and Commerce 451.

17 See Jernej Sekolec, ‘Welcome Address, 25 Years UN Convention on Contracts for the International Sale of Goods’ [2005] 25 Journal of Law and Commerce xv <http://www.cisg.law.pace.edu/cisg/biblio/sekolec.html> accessed 15 January 2014.

18 See United Nations Information Service, Brazil Accedes to the United Nations Convention on Contracts for the International Sale of Goods, Press Release UNIS/L/182 (5 March 2013) <http://www.unis.unvienna.org/unis/pressrels/2013/unisl182.html> accessed 15 January 2014; United Nations Information Service, Japan Accedes to United Nations Convention on Contracts for the International Sale of Goods, Press Release UNIS/L/120 (4 July 2008) <http://www.unis.unvienna.org/unis/pressrels/2008/unisl120.html> accessed 15 January 2014.

19 Sekolec (n 17) xv.

20 Anna Veneziano, ‘The Soft Law Approach to Unification of International Commercial Contract Law: Future Perspectives in Light of Unidroit’s Experience’ [2013] 58 Villanova Law Review 521, 522–3 [footnotes omitted]. Several papers presented at the 2007 UNCITRAL Congress on Modern Law for Global Commerce further highlight that parties are increasingly selecting the CISG to govern their international contracts. See, eg, Harry M Flechtner, Changing the Opt-Out Tradition in the United States, (2007) <http://www.uncitral.org/pdf/english/congress/Flechtner.pdf> accessed 15 January 2014; Eckart Brödermann, The Practice of Excluding the CISG: Time for Change? (2007) <http://www.uncitral.org/pdf/english/congress/Broedermann-rev.pdf> accessed 15 January 2014. Also of significance is the number of declarations that have been withdrawn by States, including the recent withdrawal of declarations regarding Article 92 of the CISG by Denmark, Finland and Sweden. These States all ratified the Convention subject to a declaration pursuant to Article 92 that they would not be bound by Part II (Formation). See United Nations Convention on Contracts for the International Sale of Goods: Declarations and Reservations, United Nations Treaty Collection (1 January 2014), <http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=X-10&chapter=10&lang=en#bottom> accessed 15 January 2014 [Declarations and Reservations] (reporting notification of withdrawal of declarations under Article 92 by Finland on 28 November 2011, Sweden on 25 May 2012, and Denmark on 2 July 2012). Additionally, recently China, Lithuania and Latvia have withdrawn their ‘written form’ declarations under Articles 12 and 96 of the CISG, thereby joining the vast majority of States that allow freedom of contractual form. See ibid (reporting notification of the withdrawal of the declaration by China on 16 January 2013, Lithuania on 1 November 2013 and Latvia on 13 November 2012).

21 The third edition of the PICC was officially adopted by Unidroit in May 2011. See Governing Council of Unidroit, Summary of Conclusions, 90th Sess, Rome (9-11 May 2011), para 6 <http://www.unidroit.org/english/documents/2011/cd90-conclusions-e.pdf> accessed 15 January 2014. As stated in the Preamble, ‘[t]he main objective of the third edition of the Unidroit Principles was to address additional topics … . Thus 26 new articles have been added dealing with restitution in case of failed contracts, illegality, conditions, [and] plurality of obligors and obligees’. PICC preamble.

22 Kronke (n 16) 458–9.

23 See Report of the 45th Session (n 3) para 140; Report of the 40th Session (n 3) para 213.

24 PICC (n 2) preamble.

25 For international case law and bibliography relating to the PICC, see UNILEX, On CISG and Unidroit Principles <http://www.unilex.info> accessed 15 January 2014.

26 Ibid.

27 Veneziano (n 20) 525.

28 Pilar Perales Viscasillas, ‘Applicable Law, the CISG, and the Future Convention on International Commercial Contracts’ [2013] 58 Villanova Law Review 733, 737 [footnotes omitted]. See also Venzenano (n 20) 527: ‘[I]t would appear to be unwise to duplicate efforts at a global level and start developing yet another set of non-binding rules with a potentially universal application on the same issues already addressed by the PICC.’

29 Schwenzer (n 4) 728.

30 Ibid: ‘The scope of the envisaged instrument on general contract law should be similar to the [CISG], except that it should apply to all kinds of contracts and not just to sales.’ Viscasillas (n 28) 738: ‘[I]t is probably the time to undertake a more ambitious project that should take the form of an international convention [footnote omitted].’

31 See US Proposal on UNCITRAL Future Work (n 10) 10–11.

32 Kronke (n 16) 462–3. In discussing various proposals for a global code, Kronke notes that ‘[w]hile Professor Bonell is envisaging the UPICC [PICC] assuming that function in maintaining their present status of soft law, Professor Lando insists on their being elevated to binding rules, to be mandatorily applied to non-domestic and non-inter-European transactions.’ Ibid 463. Recently, Bonell continued his dialogue with Lando, maintaining support for development of a ‘Global Commercial Code’ but only as a ‘compilation of existing uniform law instruments’ that contain ‘a reference to the [PICC] in their present non-binding form as a sort of “background law.’ See Michael Joachim Bonell and Ole Lando, ‘Future Prospects of the Unification of Contract Law in Europe and Worldwide’ [2013] Uniform Law Review 17, 21. Bonell further observed that transforming ‘the PICC into binding legislation seems hardly feasible and frankly not even necessary. … I seriously doubt that States will ever be able to agree at a worldwide level and in a binding form, on a set of principles and rules as comprehensive and, in part at least, as innovative as are the PICC’ (21–2). Bonell served as a member of the Italian delegation to the Diplomatic Conference for the adoption of the CISG in 1980 and later as the chairman of the working group for the preparation of all three editions of the PICC.

33 Kronke (n 16) 463–4.

34 The UNCITRAL Congress in 2007 included a discussion on ‘harmonization of commercial law: practical importance and economic value,’ chaired by Kazuaki Sono, the former Secretary of UNCITRAL and chairman of the Commission. Two of the participants, Gerhard Wagner and Jan Smits, emphasized the need to live with a mix of harmonized and national law and adopt a step-by-step approach to any further harmonization efforts. See Gerhard Wagner, ‘Transaction Costs, Choice of Law and Uniform Contract Law’ in UNCITRAL (ed), Modern Law for Global Commerce: Proceedings of the Congress of the United Nations Commission on International Trade Law Held on the Occasion of the Fortieth Session of the Commission (United Nations 2007) 39, 45 <http://www.uncitral.org/pdf/english/congress/09-83930_Ebook.pdf> accessed 15 January 2014: ‘If decision makers ask whether they should harmonize commercial law or continue to live with diversity—or rather, a mix of harmonized and national law—the answer must be that this depends on whether the balance of costs and benefits is positive. Although it is impossible to arrive at a definitive answer, even a sketchy analysis raises serious doubts whether the benefits will really outweigh the costs. Therefore, it is crucial to leave the parties the choice of opting out of instruments of international law to come back to the national system they prefer.’ Jan Smits, ‘Economic Arguments in the Harmonization Debate: The Practical Importance of Harmonization of Commercial Contract Law’ in UNCITRAL (ibid) 46, 52: ‘[I]t seems wrong to link an increase in international contracting to uniform law. … If one is uncertain about the effects of uniformity on international contracting, it is best to adopt a step-by-step approach. It means the time is not ripe for grand projects. Instead, one should adopt a model that allows corrections at an early stage and allows business and consumers to get acquainted with a new contract law regime. This points in the direction of drafting an optional contract code that parties can choose if they find this code suits their interests best.’ Sono further pointed out that with regard to business-to-business transactions ‘an optional contract code can and does coexist in the world already with uniform contract law’ (52).

35 See Helmut Wagner, ‘Costs of Legal Uncertainty: Is Harmonisation of Law a Good Solution?’ in UNCITRAL (n 34) 53, 60: ‘[I]t does not follow that full harmonization is necessary, because harmonization itself generates substantial costs. These include not only direct costs for developing new bureaucracies or demolishing old structures, but also costs arising from a loss of the advantages of system competition. … Correspondingly, it might be better to adopt a step-by-step approach. … [L]egal harmonization only makes sense if it is accompanied by a thorough reform of the system of civil justice and a harmonization of procedural law.’

36 See Loukas Mistelis, ‘Is Harmonisation a Necessary Evil? The Future of Harmonisation and New Sources of International Trade Law’ in Ian Fletcher, Lukas Mistelis and Marise Cremona (eds), Foundations and Perspectives of International Trade Law (Sweet and Maxwell 2001) 3, 16.

37 See Honnold (n 15) para 2: ‘In short, like most domestic sales rules applicable to commercial contracts, the Convention’s rules play a supporting role, supplying answers to problems that the parties have failed to solve by contract.’ Roy Goode, Commercial Law in the Next Millenium (Sweet and Maxwell 1998) 95: ‘What the convention does is to provide parties neither of whom wishes to contract under the other's law with a set of neutral provisions which they can adapt as necessary. The convention also fulfils a second and important function, namely as a gap-filler to supply terms which the parties have not negotiated.’

38 Mistelis (n 36) 17, 25.

39 The International Chamber of Commerce (ICC) has developed a number of standard term contractual rules that have contributed to the harmonization of international commercial law, such as the INCOTERMS and the Uniform Customs and Practices relating to Documentary Credits (UCP). UNCITRAL has endorsed both instruments concluding that they constitute ‘a valuable contribution’ to facilitating the conduct of global trade. See Report of the 45th Session (n 3) para 144 (endorsing ICC INCOTERMS 2010); Report of the UN Commission on International Trade Law, 42d Sess, 29 June –17 July 2009, UN Doc A/64/17, GAOR, 64th Sess, Supp No 17 (2009) paras 356–7 (endorsing UCP 600).

40 Mistelis (n 36) 21–2. The need and feasibility of converting the PICC into a convention on international contract law was also discussed at the UNCITRAL Congress in 2007. Bonell concluded that ‘[t]he Unidroit Principles, prepared as a soft-law instrument, have been very favourably received in practice. To transform them into binding legislation in the form of an international convention is neither feasible nor recommendable.’ Michael Joachim Bonell, ‘Towards a Legislative Codification of the Unidroit Principles?’ in UNCITRAL (n 34) 230, 239. See also note 32 in this article.

41Swiss Proposal (n 4) 2. The proponents did not identify the specific surveys they were relying upon.

42 See Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law, Doc COM (2011) 635 final (11 October 2011) <http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0635:FIN:en:PDF> accessed 15 January 2014 [CESL]. At the Villanova symposium, Schwenzer cited a Clifford Chance survey as support for the proposition that differences in contract law act as a barrier to trade. See Schwenzer (n 4) 723. For the survey, see Stefan Vogenauer and Stephen Weatherill, ‘The European Community’s Competence to Pursue the Harmonisation of Contract Law: An Empirical Contribution to the Debate’ in Stefan Vogenauer and Stephen Weatherill (eds), The Harmonisation of European Contract Law: Implications for European Private Laws, Business and Legal Practice (Hart Publishing 2006) 105, 117–36. The survey does not establish that differences in contract law pose a significant obstacle to cross-border business-to-business trade. The survey involved 175 businesses across eight European countries and concludes that 51 per cent of those businesses experienced ‘some,’ and 14 per cent ‘large,’ obstacles to cross-border trade (125–6). But, according to the survey, these difficulties were not due to just differences in contract law but also to natural barriers (such as language) as well as other legal barriers such as tax law and procedural law (125–8). Additionally, the ability to make a choice of law from different contract law systems was seen as an advantage by 83 per cent of the businesses (120). Finally, the survey did not draw a distinction between business-to-business transactions (the focus of the proposal for additional work in UNCITRAL) and business-to-consumer transactions. The authors state: ‘It is also pertinent to note the questions we did not ask. … [W]e constantly referred to “cross-border transactions” without distinguishing B2B and B2C transactions’ (138) [emphasis in original].

43 See the Swedish government’s views on the Green Paper on European Contract Law (2011) 2–3 <http://ec.europa.eu/justice/news/consulting_public/0052/contributions/286_en.pdf> accessed 15 January 2014: ‘Sweden has solicited opinions on the alternatives presented in the Green Paper from, among others, business organizations representing both large and small companies. The majority of those organizations questioned the need for a European contract law instrument for commercial relations. In this connection, they have particularly highlighted freedom of contract and the importance of standard contracts and the CISG to parties in international trade. … In consumer relations it is more obvious that divergent regulations can constitute a problem in cross-border trade.’

44 Rafael Illescas Ortiz and Pilar Perales Viscasillas, ‘The Scope of the Common European Sales Law: B2B, Goods, Digital Content and Services’ (2012) 11 Journal of International Trade Law and Policy 241, 242–3 [footnote omitted]. Within the European Union, only the UK, Ireland, Portugal and Malta are not parties to the CISG.

47 Ibid.

49 Ibid 2.

50 The State Department’s Advisory Committee on Private International Law (ACPIL) holds a plenary meeting annually. See US Department of State, Private International Law <http://www.state.gov/s/l/c3452.htm> accessed 15 January 2014 (providing information regarding ACPIL, including a summary of the 11–12 October 2012 annual meeting).

51 Ibid (noting that the ‘proposal was not supported; participants questioned the need for and feasibility of such an endeavor’).

53Swiss Proposal (n 4) 5.

54 See Mistelis (n 36) 25; Permanent Bureau of the Hague Conference, Feasibility Study on the Choice of Law in International Contracts: Special Focus on International Arbitration, Preliminary Doc no 22 C (March 2007) <http://www.hcch.net/upload/wop/genaff_pd22c2007e.pdf> accessed 15 January 2014.

57 International Chamber of Commerce, Rules of Arbitration (2012) art 21(1) <http://www.iccwbo.org/Products-and-Services/Arbitration-and-ADR/Arbitration/ICC-Rules-of-Arbitration/#> accessed 15 January 2014. See also International Center for Dispute Resolution, Arbitration Rules (2009) art 28(1) <http://www.icdr.org> accessed 15 January 2014; London Court of International Arbitration, LCIA Rules (1998) art 22(3) <http://www.bu.edu/lawlibrary/PDFs/research/portals/pdfs/lcia_rules_arbitration_english.pdf> accessed 15 January 2014; Australian Center for International Commercial Arbitration, ACICA Arbitration Rules (2005) art 34.1 <http://www.acica.org.au/downloads/ACICA_Arbitration_Rules.pdf> accessed 15 January 2014; Netherlands Arbitration Institute, NAI Arbitration Rules (1998) art 46 <http://www.asser.nl/default.aspx?site_id=6&level1=14433&level2=14445> accessed 15 January 2014; Stockholm Chamber of Commerce, SCC Arbitration Rules, (2010) art 22(1) <http://www.sccinstitute.com/filearchive/3/35894/K4_Skiljedomsregler%20eng%20ARB%20TRYCK_1_100927.pdf> accessed 15 January 2014; Vienna International Arbitral Center, Rules of Arbitration and Conciliation (2013) art 27 <http://www.viac.eu/en/arbitration/arbitration-rules-vienna/93-schiedsverfahren/wiener-regeln/144-new-vienna-rules-2013#ApplicableLawAmiableCompositeur> accessed 15 January 2014; World Intellectual Property Organization, WIPO Arbitration, Mediation, and Expert Determination Rules and Clauses (2002) art 59 <http://www.wipo.int/freepublications/en/arbitration/446/wipo_pub_446.pdf> accessed 15 January 2014.

58 PICC (n 2) preamble, part 4a.

59 See Council Regulation (EC) 593/2008 on the Law Applicable to Contractual Obligations [2008] OJ L177/6 [Rome I Regulation]. Recital 13 states that the Rome I Regulation ‘does not preclude parties from incorporating by reference into their contract a non-state body of law or an international convention.’ During the negotiations that led to the Rome I Regulation, a proposal to allow parties to choose non-State norms was rejected. See Ole Lando and Peter A Nielsen, ‘The Rome I Regulation’ [December 2008] 45 Common Market Law Review 1687, 1694–8; K Boele-Woelki and Vesna Lazić, ‘Where Do We Stand on the Rome I Regulation?’ in K Boele-Woelki and F Grosheide (eds), The Future of European Contract Law (Kluwer Law International 2007) 19, section 3.4.

60 Inter-American Convention on the Law Applicable to International Contracts (17 March 1994) 33 ILM 732. The Convention states in Article 9 that ‘[i]f the parties have not selected the applicable law … [t]he Court … shall also take into account the general principles of international commercial law recognized by international organizations.’ Article 10 further recognizes that ‘principles of international commercial law as well as commercial usage and practices generally accepted shall apply in order to discharge the requirements of justice and equity in the particular case.’ The references to general principles of international commercial law include the PICC (n 2). See Maria Mercedes Albornoz, ‘Choice of Law in International Contracts in Latin American Legal Systems’ [2010] 6 Journal of Private International Law 23, 27. On a US domestic level, Comment 2 to the Uniform Commercial Code (UCC), as revised in 2001, states that ‘parties may vary the effect of [the Uniform Commercial Code’s] provisions by stating that their relationship will be governed by recognized bodies of rules or principles applicable to commercial transactions … [such as] the Unidroit Principles of International Commercial Contracts.’ UCC § 1-302 cmt 2 (2001).

61 Draft Hague Principles on the Choice of Law in International Commercial Contracts <http://www.hcch.net/upload/wop/contracts2012principles_e.pdf> accessed 15 January 2014 [Hague Principles]. At its April 2013 meeting, the Hague Council on General Affairs (the conference’s governing body) welcomed the work carried out on the Hague Principles by the Working Group on Choice of Law in International Contracts (individual experts) and by the Special Commission (government representatives) in November 2012. The Council mandated that the Working Group prepare a draft commentary, circulate it to all members and observers for comments, finalize the draft commentary in light of these comments and present a draft of the commentary and the Hague Principles to the Council for consideration. See Council on General Affairs and Policy of the Conference, Conclusions and Recommendations (9–11 April 2013) para 7 <http://www.hcch.net/upload/wop/gap2013concl_e.pdf> accessed 15 January 2014. The draft commentary is available at <http://www.hcch.net/upload/wop/princ_com.pdf> accessed 15 January 2014. See also Report of the Fourth Meeting of the Working Group on Choice of Law in International Contracts (24–6 June 2013) <http://www.hcch.net/upload/wop/contracts2013rpt4en.pdf> accessed 15 January 2014 (discussing work on the commentary).

62 As originally drafted, the Hague Principles (n 61) simply stated that ‘a reference to law includes rules of law,’ consistent with arbitration law and rules generally. During the Special Commission deliberations, the European Union proposed deletion of the provision on the grounds that there are many different forms of non-State rules of law, including international instruments such as the PICC; however, there are also rules of law developed by industries and interested parties that are not generally accepted. Many other delegations argued that deletion of the provision would be a step backwards for an instrument intended to promote party autonomy principles for future development. The USA pointed out that a distinction could be drawn between rules of law created by distinguished international organizations and industry or transaction specific rules. The compromise solution was reached in a new Article 3, which only allows parties to choose rules of law that constitute a ‘set of rules’ that are ‘generally accepted’ as ‘neutral and balanced’ such as the PICC. See Permanent Bureau, Report of the November 2012 Special Commission Meeting on the Choice of Law in International Contracts (February 2013) paras. 12–17 <http://www.hcch.net/upload/wop/contracts_rpt2012e.pdf> accessed 15 January 2014 [Report of the November 2012 Special Commission]. See also Symeon C Symeonides, ‘The Hague Principles on Choice of Law for International Contracts: Some Preliminary Comments’ [2013] 61 American Journal of Comparative Law 873 <http://comparativelaw.metapress.com/content/p58232663862g73r/fulltext.pdf> (Symeonides served as the representative of the then Presidency of the European Union Council at the Special Commission deliberations).

63 Geneviève Saumier, ‘Designating the Unidroit Principles in International Dispute Resolution’ (2012) Uniform Law Review 533, 547. Saumier served as a member of the Canadian delegation for the Hague Conference Special Commission deliberations and currently serves as a member of the Working Group on Choice of Law in International Contracts. Like Unidroit, the Special Commission determined that a soft law approach—involving principles—is preferred in developing an instrument on choice of law in international commercial contracts. See Report of the November 2012 Special Commission (n 62) paras 6–7.

64 See, eg, Viscasillas (n 28) 736: ‘There is no legitimacy behind the Unidroit Principles to be considered in all and any case as the general principles on which the CISG is based’ [footnote omitted].

65 CISG (n 1) art 7(2).

66 Kronke (n 16) 457–8 [footnotes omitted].

67 Ibid 458. See also John O Honnold, ‘Uniform Laws for International Trade: Early “Care and Feeding” for Uniform Growth’ (1995) 1 International Trade and Business Law Journal 1, 6 <http://www.cisg.law.pace.edu/cisg/biblio/honnold3.html> accessed 15 January 2014 (discussing negotiating history of CISG (n 1) art 7(2)).

68 MJ Bonell, Unidroit Rapporteur, Model Clauses for Use of the Unidroit Principles of International Commercial Contracts in Transnational Contract and Dispute Resolution Practice, Study L – MC Doc 1 Rev (2013) 14–16 <http://www.unidroit.org/english/documents/2013/study50/mc/s-50-mc-01rev-e.pdf> accessed 15 January 2014.

69 Ibid 17–18 (also citing examples where such clauses have been employed in practice).

70 Unidroit (ed), Model Clauses for the Use of the Unidroit Principles of International Commercial Contracts (2013) 20-22 (Model Clauses 4(a) and 4(b)) <http://www.unidroit.org/instruments/commercial-contracts/upicc-model-clauses> accessed 15 January 2014 [Model Clauses] (clauses where the CISG applies as a matter of domestic law governing the contract). See also ibid 16–19 (Model Clauses 3a and 3b) (clauses where the CISG applies as a result of a choice of law by the parties even though the CISG would not otherwise govern as a matter of domestic law).

71 Ibid 21.

72 Ibid. Unidroit further noted that ‘Article 7 lays down the criteria for an autonomous interpretation of the Convention, and that the “general Principles on which [the Convention] is based” referred to in Article 7(2) are as such not identical with the Unidroit Principles.’ Ibid. See also Report of the 40th Session (n 3) para 211 (observing, in endorsing the PICC, that ‘the optional use of the Principles was subordinate to the rules governing the applicability of the [CISG]’).

73Report of the 46th Session (n 8) paras 253. At the Commission session, Unidroit reported on the action taken by Unidroit with regard to the Model Clauses (n 70). Ibid para 252(a). For States supporting the action taken by Unidroit, see Statements by Kathryn Sabo, representative of Canada, Maria Chiara Malaguti, representative of Italy, and Michael Dennis, representative of the USA, all at the 46th plenary session of UNCITRAL, Speakers Log with Audio Recordings of the 46th Session, 24 July 2013, 9:32-12:30 <http://www.uncitral.org/uncitral/audio/meetings.jsp> accessed 15 January 2014. Additional work on gap filling rules is also contemplated in the forthcoming commentary to the Hague Principles. See Permanent Bureau, Consolidated Version of Preparatory Work Leading to the Draft Hague Principles on Choice of Law in International Contracts (Oct. 2012) paras. 43–44 <http://www.hcch.net/upload/wop/contracts_2012pd01e.pdf> (noting that it ‘was agreed that the role of gap-filling rules would be dealt with in the commentary’).

74 See Swiss Proposal (n 4) 7. See also CISG Advisory Council Declaration no 1, The CISG and Regional Harmonization (3 August 2012) para 4 <http://www.cisgac.com/default.php?ipkCat=128&ifkCat=217&sid=217> accessed 15 January 2014 (asserting that ‘there is a danger of which proponents of regional harmonization should be aware. It is that states may become entrenched behind regional instruments at the expense of participating in the work of increasing harmonization of global contract law that has yet to be done.’).

75 Information concerning OHADA is available at <http://www.ohada.org> accessed 26 January 2014. See OHADA Uniform Act on General Commercial Law <http://www.ohadalegis.com/anglais/audrtcomgb1.htm> accessed 15 January 2014; OHADA Uniform Act on the Law of Contracts <http://www.unidroit.org/english/legalcooperation/OHADA%20act-e.pdf> accessed 15 January 2014. The Organisation pour l’Harmonisation en Afrique du Droit des Affairs (OHADA) was formed by an international treaty in 1993 between States of Africa’s mid-west and today has 17 Member States.

76Swiss Proposal (n 4) 5-6.

77 CISG (n 1) art 94(1). See Schlechtriem (n 15) 112 (noting that ‘[t]his reservation, which corresponds to its function in Article II of the “Convention Relating to a Uniform Law on the International Sale of Goods” of 1964, gives regional uniform laws precedence over the Convention’).

78Declarations and Reservations (n 20).

79 CISG (n 1) art 90.

80 Uniform Act on General Commercial Law (n 75).

81 Ibid. See also Ulrich Magnus, ‘Concluding Remarks’ in Ulrich Magnus (ed), CISG v Regional Sales Law Unification: With a Focus on the New Common European Sales Law (Sellier 2012) 147, 149 (noting that the Act ‘provides for rules on commercial sales which widely copy the CISG’); Swiss Proposal (n 4) 5 (observing that ‘the sales part of this act strongly relies on the CISG, although it contains certain modifications’).

82 For the parties to the CISG, see Status CISG (n 10).

83 Magnus (n 81) 149–50. Magnus further observes that the Uniform Act on General Commercial Law (n 75) would not constitute an ‘international agreement’ under Article 90 of the CISG (see note 79 and accompanying text) but, rather, constitute an enactment of a supranational organization (similar to European Union regulations). Ibid.

84 See Luca G Castellani, ‘Ensuring Harmonisation of Contract Law at Regional and Global Level: The United Nations Convention on Contracts for the International Sale of Goods and the Role of UNCITRAL’ [2008] Uniform Law Review 115, 124 <http://www.unidroit.org/english/publications/review/articles/2008-1&2/115-126.pdf> accessed 15 January 2015: ‘Bearing in mind the regional context, it is possible to envisage a two-pronged approach to trade law reform. OHADA and the other relevant regional organizations should consider endorsing and promoting universal uniform trade law texts to establish a minimum standard for regional and global trade. Then, those organizations may work on that standard to further develop texts addressing regional needs.’

86 See Marcel Fontaine, ‘Law Harmonization and Local Specificities – A Case Study: OHADA and the Law of Contracts’ [2013] Uniform Law Review 50, 64 (explaining the difficulties encountered with the proposed Uniform Act on Contract Law, including whether ‘local specificities’ should be taken into consideration when elaborating harmonized rules). Fontaine, on behalf of Unidroit, prepared the preliminary draft of the Uniform Act. See also Claire Moore Dickerson, ‘OHADA’s Proposed Uniform Act on Contract Law’ [2011] 13:3–4 European Journal of Law Reform 462 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2094568> accessed 15 January 2014 (considering the application of the draft Uniform Act in countries with a large informal sector); Swiss Proposal (n 4) 6 (acknowledging that ‘the future of this project is uncertain’).

87 See Diana Wallis, ‘The European Contract Law Project’ in UNCITRAL (n 34) 189 (observing that ‘the European Contract Law Project … has its genesis … in consumer law, not in the area of civil justice. … [I]n the area of consumer law, historically we have a large number of directives … but we have ended up with something of a mess, … different ideas that need to be reviewed and sorted out’). Wallis was the then vice-president of the European Parliament. The Swiss proposal references two earlier European initiatives, the 1995, 1999 and 2003 Principles of European Contract Law (Ole Lando and Hugh Beale (eds), Principles of European Contract Law, parts 1 and 2 (Kluwer Law International 2003) [PECL]) and the 2009 Draft Common Frame of Reference (Christian von Bar and Eric Clive (eds), Draft Common Frame of Reference: Principles, Definitions and Model Rules of European Private Law (Oxford University Press 2010) [DCFR]), commenting that both initiatives have failed to gain widespread support. See Swiss Proposal (n 4) 5: ‘Although the parties at least in arbitration may choose the PECL, there are no reported cases where this has happened. … The DCFR was … met with severe criticism not only with regard to the general idea of the project but especially with regard to drafting and style as well as specific solutions in the area of general contract and sales law.’

88 See CESL (n 42) for the text of the CESL as originally proposed. The CESL would not implicate Article 94 of the CISG, since contracting parties may opt out of the CISG under Article 6, and they would be subject to the CESL only if they opted into it.

89 Several European national parliaments have objected to the legal basis for the European Commission’s proposal for the CESL on the grounds that it does not comply with the principle of subsidiarity as provided under Article 6 of Protocol no 2 to the Treaty on European Union [1992] OJ C191. See Reasoned opinion by the Bundesrat of the Republic of Austria on the proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (1 December 2011); Reasoned opinion by the Bundestag of the Federal Republic of Germany on the proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (1 December 2011); Reasoned opinion by the House of Commons of the United Kingdom of Great Britain and Northern Ireland on the proposal for a regulation of the European Parliament and of the Council on a Common European Sales Law (14 December 2011); Reasoned opinion by the Belgian Senate on the proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (6 December 2011). For the proposed regulation to be adopted, it must be approved by both the European Parliament and the Council of Ministers, acting by qualified majority.

90 If the proposed CESL regulation becomes law, European businesses engaged in business-to-business transactions would have the choice between national non-unified law, the CISG, the PICC, the PECL, and, if one of the parties is a small- and medium-sized enterprise (SME), the CESL. See Law Commission of England and Wales and the Scottish Law Commission, An Optional Common European Sales Law: Advantages and Problems, Advice to the UK Government (2011) para 7.34 <http://lawcommission.justice.gov.uk/docs/Common_European_Sales_Law_Advice.pdf> accessed 15 January 2014: ‘[T]he main problem with the current system is that there is too much choice. The existence of two separate supranational systems of law to govern cross-border sales contracts [ie, the CISG and the CESL] may confuse businesses, and lead to more difficult negotiations.’ Ulrich Magnus, ‘CISG vs CESL’ in Magnus (n 81) 97, 123: ‘For international commercial sales there is no urgent need to enact CESL. CISG with its global range and approach is preferable.’ Bonell and Lando (n 40) 19–20 (concerning the CESL, Bonell notes the problem with too much choice as well as ‘the almost impossible task of finding out from the outset whether in a given case their partners are big enterprises or “only” SMEs’). Article 7(2) of the draft CESL defines an SME as an enterprise with fewer than 250 employees and less than €50 million annual turnover or less than €43 million annual balance sheet total.

91 See ICC Urges Members (n 46). See also Robert Koch, ‘CISG, CESL, PICC and PECL’ in Magnus (n 81) 125, 145: ‘[T]he inclusion of b2b-transactions into CESL’s scope sends the wrong signal to the business community because it produces the negative impression that the CISG has failed, which is false. To the contrary, the CISG has just begun flowering as the growing number of cases and countries ratifying the CISG shows.’ Schwenzer (n 4) 729: ‘It is not possible to juggle the needs of both—consumers and businesses—in a single instrument. The futility of such an endeavor has been demonstrated lately by the draft of a Common European Sales Law’ [footnote omitted].

92 See Ron Brand, ‘Party Autonomy and Access to Justice in the UNCITRAL Online Dispute Resolution Project’ [2012] 10 Loyola University Chicago International Law Review 11 (comparing European Union approach to consumer protection to that of the United States); Elidora Grigorova Ilieva, ‘The Proposal for a Common European Sales Law: Does the European Union Need This Optional “Common” Code?’ LLB thesis, Faculty of Law, University of Groningen, Netherlands, part VI <http://www.cisg.law.pace.edu/cisg/biblio/ilieva.html> accessed 15 January 2014 (comparing the CESL and its focus on the weaker party with the CISG, which operates in a pure business-to-business environment).

93 Honnold (n 15) para 74.

94 See Luca G Castellani, ‘Promoting the Adoption of the United Nations Convention on Contracts for the International Sale of Goods (CISG)’ [2009] 13 Vindobona Journal of International Commercial Law and Arbitration 241, 247 <http://www.cisg.law.pace.edu/cisg/biblio/castellani.html> accessed 15 January 2014 (observing that since SMEs ‘especially in developing countries, have limited access to expert legal advice when drafting their contracts and little influence on the choice of the law applicable to the contract, they would take advantage correspondingly from the application of the CISG’).

95 See Shiyuan Han, ‘Principles of Asian Contract Law: An Endeavor of Regional Harmonization of Contract Law in East Asia’ [2013] 58 Villanova Law Review 589 (discussing ongoing work). Han further notes: ‘The PACL project has not been supported or authorized by any government. It is a purely private initiative that is independent of politics’ (592).

96 Mistelis (n 36) 21–2.

97Explanatory Note by the UNCITRAL Secretariat on the United Nations Convention on Contracts for the International Sale of Goods (1989), reprinted in CISG (n 1) 33–34. For the Unidroit Hague Conventions, see Convention Relating to a Uniform Law on the International Sale of Goods [1 July 1964] 834 UNTS 107; Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods [1 July 1964] 834 UNTS 169 (both with nine parties). Both Conventions are available at <http://www.unidroit.org/news> accessed 15 January 2014.

98 Mistelis (n 36) 22.

99 The negotiating record reflects that issues of substantive validity were generally excluded from the scope of the CISG pursuant to Article 4, based primarily on a Secretariat report finding that: (1) ‘problems of validity are relatively rare events in respect of contracts for the international sale of goods’ and there was no indication ‘that differences in the laws in respect of these aspects of validity of contracts lead to significant problems in international trade’; and (2) ‘rules on duress, or similar rules on usury, unconscionable contracts, good faith in performance and the like also serve as a vehicle by which the political, social and economic philosophy of the society is made effective in respect of contracts’ and ‘[i]t is by the extensive or the restrictive interpretation of such rules that many legal systems have affected the balance between a philosophy of sanctity of contract with the security of transactions which that affords and a philosophy of protecting the weaker party to a transaction at the cost of rendering contracts less secure.’ Secretary-General, Formation and Validity of Contracts for the International Sale of Goods, UN Doc A/CN.9/128, annex II, and UN Doc A/CN.9/SER.A/1977, reprinted in UNCITRAL Yearbook, volume 8 (1977) 92–3, paras 18, 20, 26. States subsequently decided to exclude specific rules on validity for mistake because of their inconsistent treatment under various legal systems. See Report of the UNCITRAL Working Group on the International Sale of Goods on the Work of Its Ninth Session, UN Doc A/CN.9/142 and UN Doc A/CN.9/SER.A/1978 (19–30 September 1977), reprinted in UNCITRAL Yearbook, volume 9 (1978) 65–6, paras 48–69. Similarly, efforts to address issues related to agency were not successful. See, eg, Report of the Working Group on the Work of Its Sixth Session, 27 January–7 February 1975, UN Doc A/CN.9/100 and UN Doc A/CN.9/SER.A/1975, reprinted in UNCITRAL Yearbook, volume 6 (1975) 53, para 47: ‘There was opposition to a special article on agency relationships in a convention on sales and no consensus was reached on the adoption of this proposal. At the same time it was agreed to delete any reference to agency relationship in other articles of the Convention.’ The UNCITRAL Yearbooks are available at <http://www.uncitral.org/uncitral/publications/yearbook.html> accessed 15 January 2014.

100 Peter Schlechtriem, ‘From the Hague to Vienna: Progress in Unification of the Law of International Sales Contracts?’ in Nobert Horn and Clive Schmitthoff (ed), The Transnational Law of International Commercial Transactions: Studies in Transnational Economic Law, volume 2 (Kluwer-Deventer 1982) 125, 130–2 <http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem13.html> accessed 15 January 2014 [footnote omitted]. Schlechtriem served as a member of the delegation of the Federal Republic of Germany at the Vienna diplomatic conference in 1980 and then as a member of the Unidroit special working group charged with drafting the PICC.

101Swiss Proposal (n 4) 6–7.

102 Schwenzer (n 4) 729.

103 John A Honnold, ‘The Sales Convention: Background, Status Application’ [1988] 8 Journal of Law and Commerce 1, 7 <http://www.cisg.law.pace.edu/cisg/biblio/honnond-background.html> accessed 15 January 2014. Honnold further noted, citing his commentary: ‘Under Article 4, the Convention is “not concerned with: (a) the validity of the contract or any of its provisions or of any usage” ’ (n 17). See Honnold (n 15) for his commentary.

104 Larry A Di Matteo, ‘CISG as Basis of a Comprehensive International Sales Law’ [2013] 58 Villanova Law Review 691, 716–17 [footnotes omitted].

105 Schwenzer (n 4) 730–1; Swiss Proposal (n 4) 4–5.

106 See Clive M Schmitthoff, Commercial Law in a Changing Economic Climate (2nd edn, Sweet and Maxwell 1981) 26. Schmitthoff was part of a steering group established by Unidroit Governing Council in 1971 to consider the feasibility of such a project. PICC (n 2) introduction to the 1994 edition, xxii.

107 Herbert Kronke, ‘The Future of Harmonisation and Formulating Agencies: The Role of Unidroit’ in Fletcher, Mistelis and Cremona (n 36) 59, 64 [emphasis in original].

108 Veneziano (n 20) 524 [footnotes omitted]. See also Bonell (n 40) 230: ‘[S]ince the negotiations leading up to the CISG clearly demonstrated that this convention was the maximum that could be achieved at the legislative level, Unidroit decided to abandon the idea of a binding instrument and instead merely to “restate” (or where appropriate to “pre-state”) international contract law and practice.’

109 E Allan Farnsworth, ‘The American Provenance of the Unidroit Principles’ [1998] 72 Tulane Law Review 1985, 1988–9 <http://www.cisg.law.pace.edu/cisg/biblio/farns2.html> accessed 15 January 2014 [footnotes omitted]. He further observed that ‘[t]he influence of the “industrialized,” the “developing” and the “socialist” countries was rarely entirely absent’ in the CISG negotiations (1986, n 7). See also Roy Goode, ‘Rule, Practice, and Pragmatism in Transnational Commercial Law’ [2005] 54 International and Comparative Law Quarterly 539, 553–4, 556 (observing that the PICC demonstrate ‘that the formulation of international rules of general law, whether relating to international trade or otherwise, is best left to scholars,’ who have ‘technical expertise and freedom from political restraints’).

110 The Unidroit special working group charged with preparing the various draft chapters of the PICC was initially constituted in 1980. See PICC (n 2) introduction to the 1994 edition, xxii.

111 See Henry Deeb Gabriel, ‘Unidroit Principles as a Source for Global Sales Law’ [2013] 58 Villanova Law Review 661, 679.

112 See Report of UNCITRAL Working Group on Electronic Commerce on Its 38th Session, UN Doc A/CN.9/484 (12–23 March 2001) paras 8, 79, 94–118. See also Gabriel (n 111) 665.

113 See Report of the UN Commission on International Trade Law, 34th Sess, 25 June – 13 July 2001, UN Doc A/56/17, GAOR, 56th Sess, Supp No 17 (2001) para 294. See also Report of UNCITRAL Working Group on Electronic Commerce on Its 40th Session, UN Doc A/CN.9/527 (14–18 October 2002) para 6.

116 See Note by the Secretariat, Draft Declaration Regarding the Interpretation of Article II, paragraph (2), and article VII, paragraph (1), of the New York Convention, UN doc A/CN.9/607 (2006) para 6 (summarizing debate in Working Group). For the initial Commission deliberations and the decision entrusting the issue to the Working Group, see Report of the UN Commission on International Trade Law, 32d Sess, 17 May – 4 June 1999), UN Doc A/54/17, GAOR, 54th Sess, Supp No 17 (1999) paras 347–50.

117 For the Commission decision, see Report of the UN Commission on International Trade Law, 39th Sess, 19 June – 7 July 2006, UN Doc A/61/17, GAOR, 61th Sess, Supp No 17 (2006) paras 177–81.

118Recommendation Regarding the Interpretation of Article II, paragraph 2 and Article VII, paragraph 1 of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (2006) <http://www.uncitral.org/uncitral/uncitral_texts/arbitration/2006recommendation.html> accessed 15 January 2014. UNCITRAL also recommended that States adopt Article 7 of the UNCITRAL Model Law on International Commercial Arbitration as revised in 2006 (n 55), which attempts to modernize the form requirement of an arbitration agreement to better conform with international practice. See Report of the 39th Session (n 117) para 181. Earlier, a provision was added to Article 20 of the Electronics Communication Convention (n 114) to allow the provisions of that instrument to be applied to the New York Convention, rather than to try to reopen the New York Convention.

119 Gabriel (n 111) 665.

121 See Convention on the Limitation Period in the International Sale of Goods (14 June 1974) 1511 UNTS 3; Protocol Amending the Convention on the Limitation Period in the International Sale of Goods (11 April 1980) 1511 UNTS 77; Convention on the Limitation Period in the International Sale of Goods, as amended by the Protocol of 11 April 1980, 1511 UNTS 99 <http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1974Convention_limitation_period.html> accessed 15 January 2014. On 1 December 1994, both the original text of the Limitation Convention and the 1980 Protocol entered into force in the USA. See Peter Winship, ‘The Convention on the Limitation Period in the International Sale of Goods: The United States Adopts UNCITRAL's Firstborn’ [1994] 28 International Law 1071 <http://cisgw3.law.pace.edu/cisg/biblio/winship4.html#3> accessed 15 January 2014.

122 See Status: Convention on the Limitation Period in the International Sale of Goods <http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1974Convention_status.html> accessed 15 January 2014. At the Villanova symposium, Luca Castellani observed that ‘the public policy concerns associated with limitation may mean that additional caution is necessary when considering supranational uniform texts in this field.’ Luca G Castellani, ‘An Assessment of the Convention on the Limitation Period in the International Sale of Goods through Case Law’ [2013] 58 Villanova Law Review 645, 655. See also UNCITRAL’s Uniform Rules on Contract Clauses for an Agreed Sum Due upon Failure of Performance (1983) <http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1983Uniform_rules.html> accessed 15 January 2014 (attempting to reconcile different legal traditions but failing to have any visible impact on international practice).

123 See note 97 in this article and accompanying text for the Hague Conventions.

124 See Convention on Agency in the International Sale of Goods (17 February 1983) 22 ILM 249 (five parties; 10 ratifications required for treaty to enter into force).

125 See Convention on the Law Applicable to Agency (14 March 1978) 16 ILM 775 (1977) (four parties); Convention on the Law Applicable to Contracts for the International Sale of Goods (22 December 1986) 24 ILM 1575 (1985) (two parties; not in force), both conventions available at <http://www.hcch.net/index_en.php?act=conventions.listing> accessed 15 January 2014.

126 Peter Schlechtriem, ‘Requirements of Application and Sphere of Applicability of the CISG’ (2005) 36 Victoria University of Wellington Law Review 781, 789 <http://www.cisg.law.pace.edu/cisg/biblio/schlechtriem9.html> accessed 15 January 2014.

127 See Hans van Loon, ‘Process and Methods of International Rule-Making Round Table’ in UNCITRAL (n 34) 19, 22.

128 As noted in notes 9–11 and accompanying text, States decided that the 2015 colloquium should look at the Convention broadly including the complementary nature of the PICC (n 2).

129 See Establishment of the United Nations Commission on International Trade Law, GA Res 2205 (XXI), UN GAOR, 21st Sess, Supp No 16, UN Doc A/6594 (17 December 1966), Sec II, para 8: ‘The Commission shall further the progressive harmonization and unification of the law of international trade by: (a) Co-ordinating the work of organizations active in this field and encouraging co-operation among them’.

130 See notes 3 and 39 in this article and accompanying text. For a comprehensive list of texts of other organizations endorsed by UNCITRAL, see Texts of Other Organizations Endorsed by UNCITRAL <http://www.uncitral.org/uncitral/en/other_organizations_texts.html> accessed 15 January 2014.

131 Model Clauses (n 70) and accompanying text.

132 Hague Principles (n 61) and accompanying text.

134 See Comments Received by the Secretariat, Agenda Item no 13, Draft Triennial Work Programme 2014–16, Annex III (April 2013) 14, 16 (USA) <http://www.unidroit.org/english/governments/councildocuments/2013session/cd92-13add-e.pdf> accessed 15 January 2014. In September 1996, Unidroit undertook a formal study, circulating a questionnaire to 1,000 individuals who had shown interest in the PICC. The responses denoted a great success. See Michael Joachim Bonell, ‘The Unidroit Principles in Practice: The Experience of the First Two Years’ [1997] Uniform Law Review 34, 38–9 <http://www.cisg.law.pace.edu/cisg/biblio/pr-exper.html> accessed 15 January 2014. See also Sarah Lake, ‘An Empirical Study of the Unidroit Principles: International and British Responses’ [2011] Uniform Law Review 669 <http://www.unidroit.org/english/publications/review/articles/2011-3/669-703-lake.pdf> accessed 15 January 2014 (providing results of a recent private informal survey of use of the PICC).

135Statement by Jose Angelo Estrella Faria, Secretary-General of Unidroit, 46th Plenary Session of UNCITRAL (24 July 2013) <http://www.uncitral.org/uncitral/audio/meetings.jsp> accessed 15 January 2014 (speakers log with audio recordings of the 46th session, 10:41-10:47). See also note 73 and accompanying text.

136 UNCITRAL has recently opened a Regional Center for Asia and the Pacific in the Republic of Korea. See United Nations Information Service, New UNCITRAL Regional Center for Asia and the Pacific Opens in Republic of Korea, Press Release UNIS/L/159 (26 January 2012) <http://www.unis.unvienna.org> accessed 15 January 2014. The Hague Conference has opened regional offices in Latin America (Argentina) and Asia Pacific (Hong Kong, China). See Hague Permanent Bureau, Report on the Activities of the New Regional Offices of Latin America and the Asia Pacific, Doc Information no 1 (March 2013).

137 See note 8 and accompanying text for the UNCITRAL regional expert meeting.

138 See UNCITRAL Secretariat, Technical Cooperation and Assistance, UN Doc A/CN.9/775 (May 2013) para 11. As noted therein, the Secretariat in coordination with the Korean Ministry of Justice has participated in the APEC Ease of Doing Business Project on enforcing contracts for SMEs. The government of Korea has held an annual conference on enforcing contracts in Seoul and sponsored several APEC seminars in member economies, including economies that are not party to the CISG.

139 See Report of the 46th Session (n 8) paras 316–22. This new work is closely related to the APEC Ease of Doing Business initiative and provides an opportunity to promote a range of UNCITRAL instruments relating to micro-, small-, and medium-sized enterprises in APEC, including the CISG. See note 94 and accompanying text.

140 UNCITRAL Secretariat (n 138) 12.

143 See, eg, Spiros V Bazinas, ‘Uniformity in the Interpretation and the Application of the CISG: The Role of CLOUT and the Digest’ in UNCITRAL (ed), Celebrating Success: 25 Years United Nations Convention on Contracts for the International Sale of Goods (Singapore International Arbitration Centre 2005) 18, 25–6 <http://www.cisg.law.pace.edu/cisg/biblio/bazinas.html> accessed 15 January 2014.

144 The CLOUT system currently has over 700 CISG cases. See Case Law on UNCITRAL Texts (n 141). The Pace CISG database is even more extensive with over 2,900 cases. See Albert H Kritzer, CISG Database, Institute of International Commercial Law <http://www.cisg.law.pace.edu> accessed 15 January 2014.

145 See Renaud Sorieul, Emma Hatcher and Cyril Emery, ‘Possible Future Work by UNCITRAL in the Field of Contract Law: Preliminary Thoughts from the Secretariat’ [2013] 58 Villanova Law Review 491, 505. The proposal was initially made in the context of the High-Level Meeting on the Rule of Law, held in September 2012 at the 67th session of the United Nations General Assembly. See Report of the 45th Session (n 3) para 220.

146 Sorieul, Hatcher and Emery (n 145) 506. Additionally, the proposal raises the issue of whether such a system would create a ‘homeward bias’ if the national centres were to communicate directly with the courts. Ibid. It should be noted that the CISG Advisory Council, a private initiative, seeks to give practical assistance to courts and tribunals through non-binding opinions on particularly important aspects of the CISG. See CISG Advisory Council <http://www.cisgac.com> accessed 15 January 2014.

147 See Report of the 46th Session (n 8) para 240: ‘The Commission, expressing its appreciation for the work of the Secretariat on the CLOUT system, noted the resource-intensive nature of the system and once again acknowledged the need for further resources to sustain it.’ UNCITRAL’s lack of resources has been long-standing. See Gerold Herrmann, ‘The Role of UNCITRAL’ in Fletcher, Mistelis and Cremona (n 36) 28, 33 (the then Secretary of UNCITRAL notes that ‘[t]he Secretariat’s lack of resources is a particularly disappointing feature here … [because] the preparation of a uniform law is an extremely expensive affair (the Sales Convention cost the United Nations alone an estimated 6 million U.S. dollars) which would mean a considerable waste if, for lack of a comparatively minute amount, the text will not be made known to the relevant people’).

148 At its 2013 session, the Commission called on Unidroit, the Hague Conference and UNCITRAL to enhance their cooperation by setting priorities based on the expertise within each body and by identifying joint projects where appropriate. Report of the 46th Session (n 8) para 308.

149US Proposal on UNCITRAL Future Work (n 10) 4–5.

150 Unidroit Governing Council, 92d Session (n 133) para 35.

151Report of the 46th Session (n 8) para 254.

153 At it 2013 session, UNCITRAL decided to undertake exploratory work on whether to update existing UNCITRAL texts on privately-financed infrastructure projects. See Report of the 46th Session (n 8) paras. 327–31. See also Viscasillas (n 28) 738 (noting that ‘a less ambitious project is also possible. UNCITRAL might focus its work on specific contracts such as international distribution contracts’). In 2007, Unidroit published a second edition of a Guide to International Master Franchise Agreements. See Unidroit Franchising Guide (2nd edn, Unidroit 2007) <http://www.unidroit.org/instruments/franchising/guide/second-edition-2007> accessed 15 January 2014.

154 See notes 12–13 and accompanying text.

Published by Oxford University Press on behalf of Unidroit 2014. This work is written by a US Government employee and is in the public domain in the US.

Published by Oxford University Press on behalf of Unidroit 2014. This work is written by a US Government employee and is in the public domain in the US.

Which international body created the CISG?

What does the UN Convention on Contracts for the International Sale of Goods provide for?

Which international body created the Convention of Contracts for the International Sale of Goods CISG )? Quizlet?

When was the United Nations Convention on Contracts for the International Sale of Goods adopted?