THE U.N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS, ARTICLE 7(1) – THE INTERPRETATION OF THE CONVENTION AND THE NORWEGIAN APPROACH

Abstract

The need for a uniform international sales law has become increasingly more important as the commercial market has become very complex,1 and most countries are involved in international trade to some extent. In order to obtain certainty and predictability in international trade, and thereby make sure that international transactions run as smoothly as possible, it is imperative that the different legal systems around the world are being replaced by a uniform body of law to govern the relationship between the commercial actors.2 By establishing such an uniform body of law one minimises the degree of uncertainty related to which domestic law should be applicable in case of a dispute, and uncertainty in connection with the proper application of the relevant foreign legal system.3 This was one of the reasons why the UNCITRAL initiated the establishment of the United Nations Convention on Contracts for the International Sale of Goods. In addition the drafters intended to establish a ‘New International Economic Order’4 by promoting peaceful coexistence among states5 through ‘(… ) the development of international trade on the basis of equality and mutual benefit.’6 This development would be promoted by the establishment of common rules applicable to all contracts of international sale originating in one of the Contracting States.7 Overcoming language problems and poor contract drafting was also emphasised by the drafters.8 The aim behind the Convention was therefore not to create new provisions for international sales, but to establish a uniform instrument to be applicable independent of national laws:9 “ (… ) the adoption of uniform rules which govern contracts for the international sale of goods and take into account the different social, economic and legal systems would contribute to the removal of legal barriers in international trade and promote the development of international trade.” 10 Most lawyers would probably prefer the transaction to be governed by their domestic law, but it is generally acknowledged that the CISG provides good solutions based on compromises between different legal systems around the world.11 There are still several countries that have not yet ratified the Convention, and when it comes to implementation there are two methods available to them; transformation or incorporation.12 It might be very tempting to those countries to choose to transform the Convention, since this will allow them to stick to what they are used to; they are comfortable with their domestic law, and they would prefer to implement the Convention in a way which would not disturb or be contradictory to their traditional legal system. However, such a solution is not recommendable; the Norwegian approach, which will be thoroughly analysed later in this essay,13 is an excellent example of why incorporation and not transformation would be the preferred way of implementing the Convention. I believe it is imperative that the prospective ratifying countries look at the possible consequences in relation to the method of transformation, and the Norwegian experiences, when they are going to decide how to implement the Convention. Otherwise, one might be running the risk of having even more countries with a rather ‘original’ approach to the Convention, which again would impede the achievement of the goals set out in Article 7(1). In this paper, I will first analyse Article 7(1) in order to find the correct meaning of its three requirements in relation to the interpretation of the Convention; (1) its international character, (2) the need to promote uniformity in its application, and (3) the observance of good faith in international trade. In light of this analysis I will look at the Norwegian implementation of the Convention, and especially the choice of transformation instead of incorporation, as this raises some important questions in relation to the requirements in Article 7(1). Lastly, I will address some of the material differences between the Convention and the Norwegian transformed version of the Convention, and point out some of the problems this may cause in relation to Article 7(1). I have chosen to address the specific issues relating to the Norwegian implementation in separate chapters (4 and 5) instead of analysing those problems in chapters 2 and 3. The reason for this is that most of those problematic issues actually relate to more than one of the general points in Article 7 at the same time, and my approach to these problems will therefore cause less repetition. The aspects of Article 7(1) will thus be analysed in the Norwegian context in chapters 4 and 5.