General Principles of UN-Sales Law — part 4

Authors | Prof. Dr. iur. Ulrich Magnus

Three general principles regarding the burden of proof can be derived from the relevant provisions as a whole:

(a) Each party generally has to prove the existence of the factual prerequisites contained in the legal provision from which that party wants to derive beneficial legal consequences. [89]

(b) The party asserting an exception in her favor generally has to prove the existence of the factual prerequisites of that exception. [90]

(c) Facts lying in a party’s own sphere of responsibility and therefore better known to that party have to be proven by the party exercising control over that sphere. [91]

c) Rules not to be interpreted as general principles

(1) Interest rate. — Only a few — yet important — commentators hold that the interest rate left open in Art. 78 CISG can be derived from general principles underlying the CISG. [92] However, according to a vast majority in commentary and jurisdiction, this opinion has to be rejected. [93] The Convention itself does not contain any indication of a standard for the interest rate. In any event, a relevant national law — e.g., the law applicable at the creditor’s place of business — would have to be taken into account. In this case, however, utilization of the rules of private international law is the appropriate procedure.

(2) Seniority of payment claims. — Dutch courts have derived the general principle from the EKG that in case of doubt payments are first to be applied to interest, then to the oldest outstanding debt. [94] Yet, the CISG — like the EKG — does not contain a provision indicating this thought, even if such a regulation appears practical and may correspond to the hypothetical intention of the parties. Therefore, this seniority of payment claims cannot be regarded as a general principle. [95]

d) Analysis

On closer examination it appears that there no longer is only a small number of general principles on which a considerable majority agrees. Also, the general principles are not restricted to rules of such a general nature that we cannot expect them to be of any use for the decision-making process in specific cases. In my opinion, the determined principles do not specifically refer to sales law issues. Probably all these principles could also be included in other Conventions regarding the international unification of contracts. Even if the principles described here are based on the structures and legal concepts of the CISG, they appear to be subject to generalization and express concepts of the basics of bilateral contracts in general. Therefore, it is no coincidence that the preponderant part of these principles is to be found both in the principles of international lex mercatoria [96] as well as in the UNIDROIT principles described below.

6. The UNIDROIT-Principles

a) Origin and objective

After several years of preparation [97], UNIDROIT published „Principles of International Commercial Contracts“ in 1994. [98] The „Principles“ have been developed on a broad comparative law basis by a working group consisting of internationally renowned lawyers from the member states represented in UNIDROIT. Probably all the important legal systems were represented in that group, which was headed by the Italian Michael Joachim Bonell. [99]

The „Principles“ go a path new to international comparative legal analysis. Two points in particular have to be highlighted: First, the legal instrument used is new. The „Principles“ create neither direct substantive uniform law nor an international model law which is to be accepted or rejected in toto, but compile a set of rules which is intended to serve as a guideline for regulation and a model in three different contexts: as a model for legislation on a national and international level; as a guideline for interpretation and filling of gaps with respect to international Conventions or in case the applicable law cannot be determined; and as an aid for the parties to international commercial contracts when drafting and performing their contracts. However, the „Principles“ are legally binding only if the parties stipulated their applicability. [100]

Second, the method of developing the „Principles“ is new: The principles constitute neither a „Restatement“ of the common principles of all or only the most important legal systems nor standard industry terms. Rather, they result from the attempt to derive principles from the common features, which are reasonable from a practical and theoretical perspective, of a selected set of legal systems, i.e. the modern [101] ones, as well as from important Conventions such as the CISG and international sets of terms such as Incoterms, etc. [102]

Overall, the „Principles“ attempt to meet the criticism of international legislation to unify law described above (under 1.) and to create a more flexible, adaptable instrument than a Convention or a Model Law. [103]

b) Application of the „Principles“ as general principles within the framework of the CISG?

As discussed above, Art. 7(2) CISG allows utilization of the general principles, on which the Convention is based and which merely haven’t been expressed directly, for the purpose of filling gaps. In general, any general principles existing outside of the CISG are not to be considered. Is that also true for the „Principles“? As seen above, their authors, among other things, have designed the „Principles“ for the purpose of providing a guideline for interpretation and for filling gaps in international Conventions regarding commercial contracts. [104] To be sure, this intention alone cannot suffice. In addition, the selective approach in developing the „Principles“ may give rise to concern.

However, in my opinion the „Principles“ are nevertheless to be considered as additional general principles in the context of the CISG. The most important reason for this is that they vastly correspond both to the respective provisions of the CISG as well as to the general principles which have been derived from the CISG. [105] In light of the fact that the CISG basically was the force behind the „Principles“, this correspondence is not surprising.

Further, the approach in developing the „Principles“ appears appropriate with respect to the current state of attempts to unify law. The CISG provides a basic set of rules which has resulted from an intensive comparison of legal systems and politically supported compromises between these legal systems. Therefore, the CISG can and should constitute the basis for the creation of a general law of contracts. Its provisions are to be generalized only to supplement new issues and solutions and align these issues and solutions with the needs of the industry. The UNIDROIT working group has proceeded with this concept in mind. Thus, its results, to the extent that they formulate general principles which cannot be derived directly from the CISG, can be utilized for filling gaps in the Convention. [106]

7. Conclusion

In 1970, Kötz — in continuation of Zweigert’s [107] ideas — has requested that the general principles are applied as a substitute if the law applicable by virtue of the rules of private international law cannot be determined. [108] This „theory makes especially great demands on the judge“. [109] Yet, the [then] current state of comparative law and the increasing number of international legal transactions allowed and required „maybe not yet for the situation today, but definitely for the near future“ [110] to entrust the respective judge with the task to determine general legal principles based on a comparative legal analysis and to render his decision accordingly. A quarter-century later, the situation existing then has hardly changed. General principles derived from comparative legal analysis, according to which disputes of whatever nature can generally be settled and which — at the same time — guarantee the predictability of legal decisions, are available only to a very limited extent. [111] It already appears as a significant step forward if at least for a specialty area like the law of the international sale of goods we can determine a set of recognized general legal principles. The possibility to generalize this set of principles as well as the UNIDROIT-Principles nurture a certain optimism that in the not too far future common general legal principles at least for international commercial contracts will be developed and accepted.

Footnotes

Neumayer/Ming Art. 4 page 13; Reimers-Zocher (above page 86) 138 et seq.; Staudinger(-Magnus) Art. 4 page 67.

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See the citations in page 88 above.

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Reimers-Zocher (above page 86) 146 et seq.; Staudinger(-Magnus) Art. 4 page 69.

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Honnold page 421; K.H. Neumayer, Offene Fragen zur Anwendung des Abkommens der Vereinten Nationen über den internationalen Warenkauf: RIW 1994, 99 et seq. (106).

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LG Hamburg September 26, 1990, RIW 1990, 1015; OLG Frankfurt/M. June 13, 1991, NJW 1991, 3102; January 18, 1994, NJW 1994, 1013; OLG Düsseldorf February 10, 1994, NJW-RR 1994, 506; OLG München March 2, 1994, RIW 1994, 595; ICC-Arbitral Award No. 7197/1992, Clunet 1993, 1028 with an affirmative comment by D.H.; Bianca/Bonell(-Nicholas) Art. 78 page 2.1; v. Caemmerer/Schlechtriem (-Eberstein/Bacher) Art. 78 page 26; Enderlein/Maskow/Strohbach Art. 78 page 2.2; Karollus 227; Loewe (above page 40) 95; B. Piltz, Neue Entwicklungen im UN-Kaufrecht: NJW 1994, 1101 et seq. (1105); Staudinger(-Magnus) Art. 78 page 12.

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Rb. Amsterdam March 5, 1980, in: Schlechtriem/Magnus Art. 17 No. 6; Rb. Alkmaar May 27, 1982, Art. 17 No. 4; Hof Amsterdam November 4, 1982 (both above page 17).

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See also Schlechtriem, Einheitliches Kaufrecht (above page 81) 46; v. Caemmerer/Schlechtriem(-Herber) Art. 7 page 39; Staudinger(-Magnus) Art. 7 page 55.

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See the compilation prepared by Mustill (above page 37).

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On the history see J.M. Bonell, Das UNIDROIT-Projekt für die Ausarbeitung von Regeln für internationale Handelsverträge: RabelsZ 56 (1992) 274 et seq.; J.M. Bonell, Restatement 1 et seq.

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See above page 29.

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Bonell, Das UNIDROIT-Projekt (above page 97) 277.

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See the Preamble of the „Principles“. However, the question whether this is to be interpreted as more than a reference to substantive law is problematic and depends on the general opinion on an international lex mercatoria with independent validity, which shall not be explored further in this context.

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In particular, the UCC, the Restatement (Second) of the Law of Contracts, the Nieuw Burgerlijk Wetboek of the Netherlands, the Statute regarding Foreign Trade Contracts of the People s Republic of China, the Civil Law of 1975 of Algeria, and the draft of a new Civil Law for Québec have been considered; see Bonell, Das UNIDROIT-Projekt (above page 97) 280; Bonell, Restatement 43.

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Bonell, Das UNIDROIT-Projekt (above page 97); Bonell, Restatement 43.

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Bonell, Restatement 14 et seq.

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See the Preamble: „They can be used to interpret or supplement rules of international uniform law.“

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Bonell, Restatement 47: „Only exceptionally do the UNIDROIT Principles depart from the solutions adopted in CISG.“ In addition, the few exceptions mentioned by Bonell (id.) concern more the wording than the substantive content: e.g., contrary to Art. 7 I CISG the „Principles“ explicitly provide for applicability of the good faith principle in the contractual relationship of the parties („Principles“ Art. 1.7).

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For a few examples see Bonell, Restatement 113 et seq.

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K. Zweigert [Diskussion] in: Die Anwendung ausländischen Rechts im internationalen Privatrecht, Festveranstaltung und Kolloquium anläßlich des 40jährigen Bestehens des Max-Planck-Instituts für ausländisches und internationales Privatrecht vom 6.-8. Juli 1966 in Hamburg (1968) 190 (Materialien zum ausländischen und internationalen Privatrecht, 10).

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H. Kötz, Allgemeine Rechtsgrundsätze als Ersatzrecht: RabelsZ 34 (1970) 663 et seq.

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Kötz, Allgemeine Rechtsgrundsätze (previous note) 676.

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Kötz, Allgemeine Rechtsgrundsätze (above page 108) 677.

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Kropholler (above page 80) 197 legitimately points out the uncertainty of such general legal principles. R. Schulze, Allgemeine Rechtsgrundsätze und europäisches Privatrecht: ZEuP 1 (1993) 442 et seq (467 et seq.) emphasizes that the development of general legal principles currently constitutes an important research task; see also Kötz, Gemeineuropäisches Zivilrecht, in: FS Zweigert (1981) 481 et seq. (483).

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