Validity of the contract and the CISG international treaty: the lake
Validity of the contract and the Vienna Convention: laguna
Nir Bar, Attorney (Israel) and Mss Natanella Har-Sinay
[1] Introduction [2] ambiguity created by Article 4 (a) [3] The different approaches to interpret Article 4 (a) [4] The case of the CISG Article 4 (a) [5], the Israeli law on the validity of the contract [6] The Israeli authorities on the validity of the contract [7] Comparison with other legal systems [8] Conclusion
[1] Introduction:
The United Nations Convention on Contracts for International Sale of Goods (CISG) was created as an answer to the question of how to create uniform business practices of parties in different countries. Work began in the Vienna Convention in 1968 by the United Nations Commission on International Trade Law (UNCITRAL). A working group composed of representatives of countries Committee members undertook to prepare a document that "facilitate the acceptance by countries of different legal, social and economic." The project was completed in 1978 and 1980 a diplomatic conference representing 62 states have finalized the text in Vienna. On July 17, 2007, 1160-States have ratified the Convention.
The Preamble to the Convention expresses the position of the editors that "the adoption of uniform rules for the international sale of goods and take into account the different social, economic and legal to contribute to the elimination of legal barriers to international trade and promote the development of international trade. "It is with this hope that the writers have to specify the requirements for entering into a contract of sale and the rights and obligations of seller and buyer. However, despite this effect has declared that the Convention leaves rape, which is the source of conflict between the signatories.
Ambiguity [2] Established by section 4 (a):
Part I of the Vienna Convention sets out the parameters of the Convention on the application, covering topics and it is not. One such issue validity, which is excluded from the Vienna Convention in Article 4 (a):
This Convention governs only the formation the contract of sale and the rights and obligations of the seller and the buyer arising from that contract. In particular, unless expressly provided otherwise in this Agreement, is not affected by:
(A) the validity of the contract or any provision thereof or any use
From research to writing history Section 4 (a) it is clear that the exception of validity has been included to protect the interests of competition are protected by different national laws. History shows that the drafters intended Article 4 (a) to "serve as a loophole that could be extended to meet the needs of each system national law. "However, the article that was supposed to be flexible for a set of rules otherwise difficult to explain international differences led to further complications. Because section 4 does not define the validity of the task to determine when a cause of disability exists and what its implications are left the different national legal systems. Because these systems do not have any fundamental legal formula to rely on "the real reason for exclusion questions of validity of different and deeply felt national traditions, suggests that judges and referees will be tempted to apply the rules of internal validity. "For example, on the law of nations can authorize the use of parole evidence, while another can not. In light of the objectives of the Convention achieve uniform rules to promote international trade, the question is "how [do] the national legislation does not even pre-sales contracts serious international cargo [disability], the potential of the Vienna Convention to achieve its objectives? "
While it may be argued that the execution of a simple conflict of law analysis to determine the validity of state regulations / avoids the ambiguity created by Article 4 (a), a problem arises when the grounds for revocation prohibited by law from circumstances that also give rise to the resources of the Vienna Convention. For example, a state of law the absence of a national mandate vacuum price of the contract "as an agreement on price is considered one of the" essentialia "a contract of sale." Under Article 55 CISG, however, if there is no fixed price term, "the parties shall be considered … that implicitly refers to the price generally charged at the time of contract of the goods sold under comparable circumstances in the trade concerned. "So there is a consensus on the validity of certain issues, as coercion, in this case, it is clear that the issue is a valid law have to be different in the international context. This has been the subject of much debate on how to resolve the ambiguity created by Article 4 (a).
[3] Different approaches to interpret Article 4 (a):
Earlier analysis ambiguity is a good first step is to review the drafting history of Article For an overview of why the item was worded as it was. History Article 4 (a) indicates that the drafters deliberately ambiguous wording of the clause. The Task Force examined the validity of the proposals of several provisions to be included in the agreement, but finally decided to incorporate. The drafting history indicates that the fear of inability to reach an agreement or a result of delays intense debate led the authors discuss the validity of postpone your vehicle for the postponement was the ambiguous wording of Section 4 (a). The drafters did not dismiss the question the validity of all, they were only "postponed to which interpretation of the Convention." However, history also reveals that the drafters of CISG does not intended to be valid except to offer carte blanche to enforce national laws and order in international transactions. For this reason, is important to create uniform guidelines on the interpretation of Article 4 (a).
The first of these guidelines have been created by the drafters of the Convention itself Vienna. Article 7 (1) of the Convention states: "In the interpretation of this Convention, shall take into account its international character and the need to promote uniformity in its application and the observance of good faith in international trade. "This article suggests that even in situations where you should apply law should be applied strictly to "allow the Convention to have the broadest application possible consistent with its goal is a unification of the rules governing the legal relationship between parties to an international sale. "In other words, the term" validity "should be defined taking account of the CIM as a whole.
Consider the nature of the Convention, commentators have proposed an analysis process to help interpretation of Article 4 (a) based on the language of the article itself. The main "problem", according to these commentators, is whether the circumstances to invoke the rule national and one of the Convention. If they do, "unless otherwise expressly provided" clause of Article 4 (a) comes into play, as the Convention provides express a rule to apply in the circumstances, the law is inapplicable. An example is the rule of the CIM on the form. Article 11 stipulates that "a contract of sale not be concluded in or evidenced by writing and is subject to any requirement of form. "Because the requirement of form expressly excluded from the Convention courts are authorized national requirements for writing. On the contrary, in matters that are not covered by the provisions of the Convention, should refer to domestic law. The questions in this category include illegality, capacity, fraud, mistake, duress, and unconscionability. These are questions are made by consensus of the different national legal systems to questions of validity. One explanation for this is that the agreement covers only rights and obligations under a contract, and issues such as fraud arising from the process of concluding the contract and not the contract itself.
This analysis relates to the exclusionary rule of the negative issues of the validity of Article 4 (a) and positive rule "unless it is expressed is one of several theories about how the exception of validity to be interpreted. Another proposed approach is to see all the national laws are considered "mandatory" in which the State is a matter of validity. This approach can be defended by critics of the "critical issue" approach, believing that "if all issues have been addressed by the Convention classified as questions of invalidity, the issue of validity does not arise "and" express "provision would be redundant. The method also would ignore the fact that several provisions of the CIM to address issues that are considered the questions of the validity of certain legal systems. On the other hand, restrictions imposed on the internal operations of international sales would impose an unfortunate, if inevitable, the conflict between philosophy of freedom of contract in general, enshrined in the Convention and a restriction of this freedom, governed by national law. "
[4] The cases on the CISG Article 4 (a):
Although there is no uniform rule on the validity of the contract, previous decisions of the courts to rule on the issue can serve as a mirror through which the perspectives of different legal systems can be observed. This court decision in a case of Austria, who was the validity of a contractual clause in particular. In this case, the German seller (applicant), submitted to the tombstones Austrian buyer (defendant), who later discovered a defect in the product. Upon discovering the default, the buyer retains his pay and sent one of the stones back for review. Although it ended with some other stones, the seller filed a lawsuit claiming that the conditions agreed by the buyer included a retention clause excluding the right buyer, even if nonconforming products. The Austrian Supreme Court ruled on the validity of non-preservation, considering that the clause is valid a matter of law. Although The Court then applied German law as an analysis of the conflict of rules, also felt that the national provisions that violate the principles that CIM based was taken into consideration. Moreover, although the Court held invalid under German law that excludes parties' right to cancel a contract, ultimately ruled that the law gives a party the right to compensation was sufficient. Therefore, the contractual clause without the lien was confirmed.
Another issue addressed by the courts is concerned, it was a 2002 case, United States. In this case, the seller New Jersey brought an action against the seller of Canada, alleging breach of contract. Among other things, the defendant claimed a lack of consideration. To meet this claim, the Court stated: "On the validity of the Vienna Convention refers to a question that the law would make the contract void, voidable or unenforceable. "The Court qualified individuals for consideration as a problem. To determine the applicable law, the court applied the conflict analysis law, and subsequently determined there was sufficient consideration under the law of New Jersey.
Act [5] on Israel the validity of the contract:
Since the stated aim of the Vienna Convention is to eliminate legal obstacles to international trade, would be a logical step to look not only for international court, but also the laws of the various legal systems themselves, as the basis on which to build the uniform law as a system is the State of Israel. As the nation joined the CIM in law in 1999, has retained its own rules for contract formation, which is expressed in contract law (Part general), 1973. The topics covered by the Convention, such as offer and acceptance, are discussed as well as issues that are not valid, being larger.
Section thirty of the Act provides that contracts if the content or the contract is "illegal, immoral or contrary to public policy", there are other eighteen fourteen articles listed factors, if any, permit a contracting party to terminate the contract. error, deception, coercion, extortion. The error is defined as an error of fact or law that does not include an error "worthwhileness" of the agreement. The article also states that the error is constant for the annulment only if the contract can not be managed by correcting the error. Cheating is defined as "the concealment of certain facts that the other party in accordance with the law, custom or circumstances, be disclosed, and is grounds for termination when it led to a mistake made by the victim of the party that has entered into the contract as result of this error. restriction is nullified, if a person has a contract due to force or threats used by the other party, subject to restrictions that "a warning in good faith that the law can be exercised is not a threat." Finally, the cancellation due to extortion is allowed if a party or agent takes advantage of anxiety, inexperience or physical or mental weakness of the other party, and the terms of the contract are unreasonably favorable than usual.
[6] The Israeli authorities on the validity of the contract:
To use Israeli law as a model for the creation of a uniform law on the validity of the contract, Not only can consider the legislation, but should also look at how it was applied by the Israeli courts. In v. Elijah Ben Lulu Atrash, the applicant and the defendant reached a settlement agreement regarding a crash that injured the applicant, the agreement prohibits any future claims. The discovery of new injury, the plaintiff again filed a complaint against the defendant, who said the trial was prohibited by the original arrangement. The Supreme Court ruled that the contract is a device for spreading risk and the court should not interfere with an otherwise valid contract simply because the parties have included a certainty known at the time of writing of their agreement.
While uncertainty is not cause of invalidity, contracts based on deception were arrested by the Israeli Supreme Court is zero. For Meir Vofna c. Ogash, a couple looking to buy a house in a quiet area, the seller of a house has insisted to show buyers that the house on a Saturday, the day rest Jewish. After signing the agreement, the buyers learned that the house is near a noisy construction zone, and the Seller deliberately misled home showing the date on which no construction is complete. The court annulled the agreement.
The restriction also found that the reasons for contract cancellation. In v. Rahamim Expomedia Ltd., a joint venture at a fair tried to cancel their joint venture agreement on the basis that the defendant was forced to invest more money by threatening to terminate the project before it starts. The Israeli Supreme Court ruled that economic pressure is reason enough to cancel agreement. In Diyur Laola Ltd. Keren V., the court concludes that coercion can be found at any time before signing the contract until the actual signature, but not at any time after that.
Finally, when a woman is trying to annul her marriage contract, the Israeli court in Article 30 of the Law of Contract Israel, arguing that the court may cancel a contract that goes against the values, interests and great vital principles that the legal aims to preserve and develop.
[7] Comparison with other legal systems:
In the formulation of a uniform law on the validity of the contract, is also is important to consider how the laws of some signatory countries are interrelated. For example, the validity of those Israelis are similar to those of China. According with the Contract Law of the People's Republic of China, a contract is void if it is created by the use of fraud or coercion, has an improper purpose, is prejudicial to the interest public, or that violates laws and regulations necessary. In addition, a party has the right to ask a court to vary or revoke any contract is the result of a major misunderstanding, it was manifestly unfair both to its conclusion, or the operator has been found in an unfavorable position of a party.
More similar to Israeli law is the European contract law, codified in the Principles of European Contract Law 1998, Parts I and II. Under these principles, a contract may be avoided if the following conclusion was fraudulent misrepresentation, fraudulent nondisclosure, an imminent threat, one party has an excess benefit or unfair advantage. specific contractual terms may be canceled if they have not been individually negotiated and causes a significant imbalance between the rights and obligations parties.
These three systems of law are a small part of the sixty-one countries whose interests must be taken into account. Comparing the laws of the countries different signatories is a key element to ensure that the uniform law on the validity, once formulated, do not stray too the interest of each nation, and a balance meet the stated objectives of the Vienna Convention.
[8] Conclusion:
When the drafters of the Vienna Convention decided to establish a uniform, their stated objective was to promote international trade development taking into account the different legal systems of the world, social and economic development. Although Many issues have been addressed and resolved in the creation of the Vienna Convention, the question of validity has remained a hotly debated and enigmatic. Proponents may argue that the postponement of validity Contract within multiple systems allows some flexibility, but the fact remains that until there is a uniform law on the subject, different legal and political parties of different law and have no continuity in their expectations. To create a uniform law, we must examine the laws of the different states, like Israel, and find a consensus between the laws on matters such as mistake, duress, and illegality.
Until this process difficult but can be completed, practicing lawyers are left with the dilemma of how to protect their customers and markets to which they are parties, the answer is twofold. First, a prudent attorney develop an international contract should consult a lawyer from one country to the other party, to ensure the validity of the agreement in two forums. Second, and a contract concluded by the Vienna Convention is subject only to the laws of CIM, is essential to explicitly designate the choice of the right to be mentioned in If a problem arises when the CIM has no resolution (eg, the validity of the contract). If these two measures are taken, the risk of conflict between two parties on validity of contracts will be reduced. Until a uniform law or a treaty is established, it is for prosecutors to "promote the development of international trade."
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Nir Law School specializing in Commercial Law and Business and is one of the social partners "law Nir law" in Israel, Attorney Bar http://www.barlawyers.com author of other articles and published the book of Israel: "The complete guide to mortgages in Israel." This is not legal advice and not replaced. Attorney Nir Bar can be reached www.barlawyers.com
The author wishes to express its deepest greetings Mss Natanella Har-Sinai, by excellent research assistance.
Patrick C. Leyens, CIM and error: the harmonization of national legislation against the law [Challenge Interpretation error and the circumvention of Validity (2003), available at # In http://cisgw3.law.pace.edu/cisg/biblio/leyens.html.
Id
Hartnell Helen Elizabeth, waking the sleeping dog: Exception of validity of the Convention on the International Sale of Goods, 18 Yale. J. Int'l Law 1-93 (1993), available http://cisgw3.law.pace.edu/cisg/biblio/hartnell.html
Id
Ulrich Drobnig substantive validity, 40 Am J. Comp. L. 635 at 644 (1992), available at http://cisgw3.law.pace.edu/cisg/biblio/drobnig2.html.
John A. Spanogle and Peter Winship, International Sales Law: a problem based in textbooks, 131-132 (2000).
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Hartnell, supra.
Christoph R. Heiz, the validity of contracts under the Untied Nations Convention on Contracts for the International Sale of Goods, 20 Vand. J. Transnat l 'L. 639-663 (1987), available at: http://cisgw3.law.pace.edu/cisg/biblio/heiz.html.
Hartnell, supra.
Id
Id of
Id
Heiz, supra.
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Spanogle, supra.
Dr. Peter Schlechtriem, Law Uniform Sales – The UN-Convention on the International Sale of Goods (1986), available at http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem-04.html.
Heiz, supra.
Hartnell, supra.
Leyens, supra.
Hartnell, supra.
OGH, 8 Ob 22/00v, 7 September 2000.
Id
Id
Pharmaceutical Technology. Corp. v. Barr Laboratories. Inc. 201 F. Supp .2 d 236 (2002).
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Id
Article 30 of Israeli Contract (General Part) Law 1973.
ID Article 14 (d).
Article ID 15.
Article ID 17.
Id Article 18.
Civil Appeal 2495/95 c. Hadas Ben Lulu Elijah Atrash, the Supreme Court verdicts vol. 51 (1), page 583 (1997).
For additional verdicts for error in the contract see also: 406/82 civil appeal Nahmani V. Galor, vol supreme court verdicts. 41 (1), page 494, Civil Appeal 2444/90 Aroesti c. Kashi, the Supreme Court Verdicts vol. 48 (2), page 513, Civil Appeal 8972/00 Shlezinger c. Lebituah Hafenix HEVRA, the Supreme Court vol verdicts. 47 (4), p. 814.
Civil Appeal 373/80 Vofna Meir c. Ogash Dan, the Supreme Court Verdicts vol. 31 (2), page 215 (1981).
For additional verdicts Deception in the contract see also: Civil Appeal 494/74 Hevrat Beit Hashmonaim c. Aharoni, the Supreme Court Verdicts vol. 30 (2), page 141, Civil Appeal 838/75 Tzarfati against Spector, of the Supreme Court Verdicts vol. 32 (1), page 231, Civil Appeal 488/83 Tzan'ani c. Agmon, Supreme Court Verdicts vol. 38 (4), p. 141, Civil Appeal 373/80 Vofna Meir c. Dan Ogash, the Supreme Court Verdicts vol. 31 (2), page 215 (1981).
Civil Appeal 8 / 88 Rahamim Shaul c. Expomedia Ltd., the Supreme Court Verdicts vol. 43 (4), page 95 (1989).
Id
Civil Appeal 5493/95 Diyur Laola Ltd. V. Shoshana Keren, the Supreme Court Verdicts vol. 50 (4), page 509 (1996). This case concerns an agreement between the two neighbors to leave the building. A year after the agreement, said they were forced to sign their other neighbors.
For more verdict on the restriction of contracts see also: Civil Appeal 403/80 Sassi c. Kikaon, the Supreme Court Verdicts vol. 31 (1), page 762; v. Civil Appeal 784/81 Shaffir Martin, the Supreme Court Verdicts Vol 39 (4), page 149, Civil Appeal 4839/02 Ganz c. Katz, the Supreme Court Verdicts vol. 48 (4), page 749, Civil Appeal 1569/93 Maya v. Penford, the Supreme court verdicts Vol 48 (5), page 705, Civil Appeal 6234/00 SH.AP Ltd. v. Bank Leumi, the Supreme Court Verdicts vol. 37 (6) p. 769.
Civil Appeal 8256/99 Jane Doe v. John Doe Supreme Court ruling vol. 58 (2), page 213 (2003). See also the function of Appeal 148/77 Rot v. Yeshoofe, the Supreme Court Verdicts vol. 33 (1), page 617; calls 661/88 c. Civil Haymov Hamid, the Supreme Court Verdicts vol. 44 (1), page 75, Civil Appeal 139/87 Soolimani v. Katz, the Supreme Court Verdicts vol. 43 (4), 705 pages, the Supreme Court case 6051/95, Judge v. Beit Hadin Rekent Haartzi, Supreme Court Verdicts vol. 51 (3), page 289, Civil Appeal 695/89 v. Shilo Be'eri, the Supreme court verdicts Vol 47 (4), p. 796.
Contract Law of PRC, available at:
http://www.law-bridge.net/english/LAW/20064/0222320014345.html.
Id
Principles of European Contract Law 1998, Parts I and II, available at: http://www.jus.uio.no/lm/eu.contract.principles.1998/doc.html # 207.
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About the Author
Attorney Nir Bar specializes in corporate & Business law and is a head partner at “Nir Bar Law Firm” in Israel http://www.barlawyers.com Attorney Bar authored further articles and published the Israeli book: “The complete guide to mortgages in Israel”. The aforesaid does not constitute legal advice nor replaces it. Attorney Nir Bar may be reached at www.barlawyers.com
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