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The Autonomous Contract

Reflecting the borderless electronic-commercial environment in contracting

1. Introduction

2. In search of autonomy

2.1 The diminishing role of States
2.2 Solutions available within national law
2.2.1 Uniform law and its limitations
2.2.2 Uniform rules and principles
2.2.3 Situation specific standard contracts
2.3 A transnational regulatory order for contracts
2.3.1 International commercial arbitration (ICA)
2.3.2 Lex Mercatoria - and its essential link to arbitration
2.3.3 Codified general contract principles as lex mercatoria
2.3.4 Protective principles as a necessary part of lex mercatoria
2.4 The autonomous contract - an a-national solution, a summary

3. The problem of predictability

3.1 Predictability at a municipal level
3.2 Uniformity at an international level
3.2.1 The UN Convention on the Law of Treaties
3.2.2 Interpretation clauses within uniform laws

4. Alternative solutions

4.1 Independent supra-national interpretation tribunals
4.2 Authoritative reviews as co-ordinating guides
4.3 Limiting of sources for interpretation
4.4 Information technology solutions - transnational harmonising information and knowledge-bases
4.5 E-contract solutions?
4.6 Education

5. Summary

6. Endnote

Endnotes

Endnotes

Metadata

SiSU Metadata, document information

Manifest

SiSU Manifest, alternative outputs etc.

The Autonomous Contract

Reflecting the borderless electronic-commercial environment in contracting

copy @ Lex Mercatoria

Endnotes

 1. Maria Livanos Cattaui, The global economy - an opportunity to be seized in Business World the Electronic magazine of the International Chamber of Commerce (Paris, July 1997) at ‹http://www.iccwbo.org/html/globalec.htm

 2. Tangential support for the simile from Hans Petter Graver, "Den juristskapte virkelightet og juristrollen" in Jussens Venner (1986) p. 314-324.

 3. René David suggests the primary constraints on development are "conservatism, routine, prejudice and inertia" cited by the UNCITRAL Secretariat, The Future Role of UNCITRAL - Promoting Wider Awareness and Acceptance of Uniform Texts , in Uniform Commercial Law in the Twenty First Century - Proceedings of the Congress of the United Nations Commission on International Trade Law (New York, 1992) pp. 249-259 on p. 252, referred to later as 25th UNCITRAL Congress . See also René David comments in International Encyclopedia of Comparative Law , Vol. II, Chap. 5 (Tübingen, 1971) pp. 24 and 25.

 4. Ronald Coase, Industrial Organization: A Proposal for Research (1972) in The Firm, The Market and the Law (Chicago, London, 1988) pp. 57-74, comp. Coase's Nobel Lecture The Institutional Structure of Production , AER 82 (1992) pp. 713-719. For a web site inspired by the work of Coase see The Center for Research on Contracts and the Structure of Enterprise at the Katz School, University of Pittsburgh ‹http://crcse.business.pitt.edu/› also the New Institutional Economics Network http://sykuta.business.pitt.edu/nie/

 5. For an introduction to the different approaches to law and economics see Nicholas Mercuro and Steven Medema, Schools of Thought in Law and Economics: A Kuhnian Competition in Robin Malloy and Christopher Brown (ed.) Law and Economics New and Critical Perspectives (New York, 1995) pp. 65-123.

 6. See Michael Trebilcock, The Limits of Freedom of Contract (Harvard, 1993).

 7. Discussed very briefly in section 2.3.4 of this paper in relation to protective principles.

 8. Which is pursued by Wisconsin University and Michigan State University. Mercuro and Medema (1995) pp. 65-123 at pp. 95-108.

 9. The concept of the autonomous contract becomes attractive when looked upon as the collective embodiment of elusive characteristics that the business community seeks upon which to base their transactions, and includes: harmonisation, transnationalism and a-nationalism for our purposes insofar as it furthers the other two objectives.

 10. An a-national uniform transnational legal framework for contracts that is independent of, but supported by governments.

 11. Though parties can "legislate" an extensively autonomous contact, they cannot "legislate" a contract that is entirely. Areas such as "validity" are defined differently within different jurisdictions, and international contracts can be subject to laws on currency control; export and import control; hazardous substances; antitrust | competition rules; anti-boycott; anti-bribery, etc. Similarly, mandatory rules on such matters as good faith, fair dealing, unconscionability, fraud, duress, extortion, interest, penalty clauses, etc. In specialised fields, such as consumer contracts, contracts with local sales representatives and specialised industries, such as banking and insurance, one also encounters national laws that parties cannot modify by their contract "legislation". See also article by Jan Ramberg Autonomy of Contract and Non-Mandatory Law in Scandinavian Studies in Law (1993) pp. 141-149.

 12. Criteria for selection might include: familiarity; application of uniform law; neutrality; reputation; language; and convenience.

 13. Similar criteria to choice of law in addition to which include: appropriate enforcement treaties; location.

 14. E.g. Thomas Wilhelmsson, Legal Integration as Disintegration of National Law in Legal Polycentricity - Consequences of Pluralism in Law (1995) pp. 127-147 on p. 128.

 15. E.g. arbitration law (different arbitration statutes), electronic commerce (the validity of electronic documents and signatures), or sale of goods law (England and Japan do not apply the CISG ) for example. Also see comment by Charles Brower, in the arbitration panel, Are International Institutions Doing Their Job? - The American Society of International Law, Proceedings of the 90th Annual Meeting, 1996 (Washington D.C. 1996) p. 249.

 16. E.g. EC, NAFTA, ASEAN .

 17. De jure if not de facto .

 18. See William W. Park, International forum selection (Hague, 1995).

 19. Regional efforts with their frequently associated political objectives are outside the scope of this paper.

 20. See Roy Goode, Reflections on the Harmonisation of Commercial Law in Uniform Law Review (1991) pp. 54-74 for a more detailed account of the alternatives and related considerations.

 21. E.g. UN Model Law on Arbitration 1985 ; UN Model Law on Electronic Commerce 1996 .

 22. The International Institute for the Unification of Private Law, Rome, ‹http://www.agora.stm.it/unidroit/› also ‹http://itl.irv.uit.no/trade_law/papers/unidroit.html

 23. UNIDROIT Principles of International Commercial Contracts (Rome, 1994) text of the principles and accompanying commentary; Joachim Bonell, An international restatement of contract law: the UNIDROIT principles of international commercial contracts (New York, 1994); and UNIDROIT Principles for International Commercial Contracts: A New Lex Mercatoria? (Paris, 1995) referred to later as UNIDROIT Principles: A New Lex Mercatoria? The black letter text of the Principles are on the Internet at ‹http://www.agora.stm.it/unidroit/english/principles/pr-main.htms› and ‹http://itl.irv.uit.no/trade_law/doc/Unidroit.Contract.Principles.1994.html

 24. John Honnold, Goals of unification - Process and value of the unification of commercial law: lessons for the future drawn from the past 25 years (1992) in 25th UNCITRAL Congress , pp. 11-13, p. 11.

 25. United Nations Commission on International Trade Law, Vienna, ‹http://www.un.or.at/uncitral› also ‹http://itl.irv.uit.no/trade_law/papers/UNCITRAL.html

 26. United Nations Convention On Contracts For The International Sale Of Goods (1980) . See Honnold, Uniform Law for International Sales, Under the 1980 United Nations Convention (Philadelphia, 1991); Fritz Enderlein and Dietrich Maskow, International Sales Law, United Nations Convention on Contracts for the International Sale of Good... (1992); Kritzer, International Contract Manual: Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods (1994) and the CISG W3 Database , Institute of International Commercial Law, Pace University School of Law ‹http://www.cisg.law.pace.edu/› For some general links ‹http://itl.irv.uit.no/trade_law/nav/sales.html

 27. Ernst Rabel, Das Recht des Warenkaufs Bd. I&II (Berlin, 1936-1958). Two volume study on sales law.

 28. Cornell Project on Formation of Contracts 1968 - Rudolf Schlesinger, Formation of Contracts. A study of the Common Core of Legal Systems , 2 vols. (New York, London 1968). Arthur von Mehren (ed.), International Encyclopedia of Comparative Law - Konrad Zweigert, including an agenda for national reports and general reports on various issues of contract law from formation to termination. For more information see Erich Schanze, New Directions in Business Research in Børge Dahl & Ruth Nielsen (ed.), New Directions in Contract Research (Copenhagen, 1996) pp. 61-90, on p. 61.

 29. Uniform Law on the Formation of Contracts for the International Sale of Goods ( ULF ) and the Convention relating to a Uniform Law on the International Sale of Goods ( ULIS ) The Hague, 1964.

 30. László Réczei, Process and value of the unification of commercial law: lessons for the future drawn from the past 25 years (1992) in 25th UNCITRAL Congress , pp. 5-7, on p. 6.

 31. The CISG for example covers international sale of goods of specific types not those listed under Article 2; and specifically excludes its application to factors that vitiate a contract and the passing of property under Article 4.

 32. E.g. ICC's Incoterms (1990) and contract clauses on Hardship and Force Majeure , and recently completed model for various CISG transactions.

 33. Such as the European Council for Europe, General Conditions for the Supply of Plant and Machinery for Export (Form No. 574) (UN - ECE, 1955); The International Federation of (independent) Consulting Engineers, FIDIC Red Book on Construction (1996); Works of the European trade association Orgalime .

 34. Such as the Grain and Feed Trade Association - GAFTA

 35. Honnold (1992) on p. 12.

 36. Honnold id. p. 13.

 37. CISG Article 78 - Interest; UNIDROIT Principles , Article 7.4.9 - "interest for failure to pay money," and Article 7.4.10 - "interest on damages."

 38. See footnote 23.

 39. The Principles of European Contract Law 1998 (publication expected in 1998). Previews of the final text of the Principles of European Contract Law are available on the Net at ‹http://www.ufsia.ac.be/~estorme/PECL.html› and ‹http://itl.irv.uit.no/trade_law/doc/EU.Contract.Principles.1997.preview.html› Also the earlier edition of the principles and accompanying commentary is published: Ole Lando and Hugh Beale (ed.) Principles of European Contract Law, Part I: Performance, Non-performance and Remedies (1995).

 40. Alexander Komarov Remarks on the Applications of the UNIDROIT Principles of International Commercial Contracts in International Commercial Arbitration (1995) in UNIDROIT Principles: A New Lex Mercatoria? pp. 157-166 on p. 157; Stewart Hancock A Uniform Commercial Code for International Sales? We Have it Now in New York State Bar Journal (January, 1995) quoting oral statement by Werner Melis to the effect that practically all international commercial disputes are settled by arbitration and not before state courts. Also see comments by Yasuhei Taniguchi, The Changing Attitude to International Commercial Dispute Settlement in Asia in Arbitration and Dispute Resolution Law Journal (London, 1997) pp. 67-77 at pp. 72-73.

 41. Dispute resolution is a service industry - with many competing arbitration entities, both institutional and freelance, it is sensitive to its market. An arbitration tribunal's mandate is determined by the "will" of the contracting parties, this extends to the methods and "law" employed by it in dispute resolution. Competition exists also on a national level as regards national arbitration laws to attract ICA, see Park (Hague, 1995).

 42. Attained through state support of the New York Convention 1958 (108 states contracting states) said to be honoured/ effective in 98 per cent of cases, see Albert Jan Van Den Berg, Some practical questions concerning the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1992) in 25th UNCITRAL Congress pp. 212-220 at p. 213. Also through the subsequent UN Model Law on Arbitration 1985 . In the important but less generic area of investment disputes were a contracting state is a party to the contract, the ICSID Arbitration Rules have even wider and further reaching effect.

 43. Such as UNCITRAL .

 44. Such as the ICC's International Court of Arbitration ; LCIA - London Court of International Arbitration ; AAA - American Arbitration Association .

 45. For a brief overview see Sir Michael Kerr, Concord and Conflict in International Arbitration , in Arbitration International (London, LCIA, 1997) Vol. 13 pp. 121-143.

 46. See Allan Redfern and Martin Hunter, Law and Practice of International Commercial Arbitration (London, 1991) pp. 47-49; and Esa Paasivirta, Participation of States in International Contracts (Helsinki, 1990).

 47. The Rt. Hon. Lord Justice Mustill, The New Lex Mercatoria: The First Twenty-five Years in Maarten Bos and Ian Brownlie, Liber Amicorum for the Rt. Hon. Lord Wilberforce, Clarendon Press (Oxford, 1987) pp.149-183.

 48. See Ole Lando, The Law Applicable to the Merits of the Dispute , in Julian Lew (ed.) Contemporary Problems in International Arbitration (1987) pp. 101-112 on p. 104.

 49. W. Laurence Craig, William W. Park, Jan Paulsson, International Chamber of Commerce Arbitration (New York, looseleaf updated, 2nd ed.) p. 640.

 50. Lando, The lex mercatoria in International Commercial Arbitration , 34 ICLQ (1985) p. 753. as cited by Komarov (1995) pp. 157-166 on p. 161.

 51. Discussions and examples of lex mercatoria are to be found in: Berthold Goldman, Frontières du droit et lex mercatoria , Archives de philosophie du droit (Paris 1964); La lex mercatoria dans les contrats et l'arbitrage internationaux: réalité et perspectives , 106 Culnet Journal du droit international (1979) p. 475; Etudes offèrtes à Berthold Goldman (Paris 1982) contributions by Battifol, Kahn, von Mehren, Rigaux, Weil; Cremades and Pehn, The New Lex Mercatoria and the Harmonisation of the Laws of International Commercial Transactions 3 Boston Univ Intl LJ 317 (1984); The applicable Law: General Principles of Law - the Lex Mercatoria in J. Lew (ed.), Contemporary Problems in International Arbitration (1986) p. 113; Lex Mercatoria in Forum Internationale, No.3 (Nov. 1983); Pierre Lalive of Switzerland, Transnational (or Truly International) Public Policy and International Arbitration ; Mustill, The New Lex Mercatoria: The First Twenty-five Years , (Oxford, 1987) pp.149-183; E. Gaillard (ed.), Transnational Rules in International Commercial Arbitration (Paris, 1993); Lando, Lex mercatoria 1985-1996 in Festskrift till Stig Strömholm , Vol. II p. 567-584 (Götenborg, 1997). Also Clive Schmitthoff, Nature and Evolution of the Transnational Law of Commercial Transactions in the Transnational law of International Commercial Transactions in Studies in Transnational Economic Law, Vol. 2 (1982) pp. 23-24. See also the UNIDROIT Principles of International Commercial Contracts 1994 and the Principles Of European Contract Law 1998. .

 52. See Himlar Raeschke-Kessler, Should an Arbitrator in an International Arbitration Procedure apply the UNIDROIT Principles? (1995) in UNIDROIT Principles: A New Lex Mercatoria? , pp. 167-177 on p. 169 "It is no secret that the prevailing opinion among jurists in some countries, like mine, is plainly adverse towards an uncodified lex mercatoria as an independent body of transnational law" and discussion by Ulrich Drobnig, The Use of the UNIDROIT Principles by National and Supranational Courts (1995) in UNIDROIT Principles: A New Lex Mercatoria? , pp. 223-229 on p. 226-227.

 53. The Inter American Convention on the Law Applicable to International Contracts 1994 invites state courts to apply lex mercatoria , Article 10. This is done in addition to the application of state law. In the absence of its selection by the parties the state with the closest ties, Article 9(1). Significantly, Article 9(2) provides that the court also take into account the general principles of international commercial law recognised by international organisations. See Lando (1997) pp. 567-584.

 54. Kazuaki Sono, The Changing Role of UNCITRAL within The Future Role of UNCITRAL (1992) in 25th UNCITRAL Congress , pp. 249-252, on p. 250. Statement made prior to the UNIDROIT Principles , a significant figure as pinning down the exact content and effect of use of lex mercatoria is far from certain.

 55. Lando (1997) p. 575. See also UNIDROIT Principles , Preamble 4 a. Also Arthur Hartkamp, The Use of UNIDROIT Principles of International Commercial Contracts by National and Supranational Courts (1995) in UNIDROIT Principles: A New Lex Mercatoria? , pp. 253-260 on p. 255, notes that "there is a growing tendency to permit them to choose 'rules of law' other than national laws on which the arbitrators may base their decisions".

 56. Innovative and new are the ("Lando" and "Bonell") codifications of contract principles "lex mercatoria" discussed in the following section. Though these may be regarded as being inspired by the US Restatement of Contract Law .

 57. As indicated e.g. by the European Arbitration Convention 1961 , UNCITRAL Arbitration Rules 1975 , UNCITRAL Model Law 1985 .

 58. Komarov (1995) on p. 163; Hans Van Houtte, The UNIDROIT Principles of International Commercial Contracts and International Commercial Arbitration: Their Reciprocal Relevance (A:1995) in UNIDROIT Principles: A New Lex Mercatoria? , pp. 181-195 on p. 183.

 59. There is no dissent on this from the correspondents of various nationalities in UNIDROIT Principles: A New Lex Mercatoria? E.g. Michael Furmston in The UNIDROIT Principles in International Commercial Arbitration (1995) in UNIDROIT Principles: A New Lex Mercatoria? , pp. 199-208 on p. 202; Raeschke-Kessler (1995) p. 170. See also UNIDROIT Principles , Preamble 4 a. See also Van Houtte (A:1995) p. 183. Apart from the UNCITRAL Model Law on International Commercial Arbitration (Article 28) specific provision permitting the selection of "rules of law" (as opposed merely to "the law") is provided in the new Arbitration Rules of both the ICC (Article 17) and LCIA (Article 22(2)), both effective from 1 January 1998.

 60. See comment by Van Houtte, International Trade Law (London, 1995) p. 28-29 and p. 399 suggests that lex mercatoria is too vague and imprecise to be "self-sufficient". See the next section of this paper on "general contract principles as lex mercatoria ."

 61. Van Houtte (London, 1995) p. 28. Given the uncertainty as to its precise scope and application he also suggests that it is safer to apply a given system of state law, Van Houtte (London, 1995) p. 412 and p. 399.

 62. Mustill (1987) pp.149-183 at pp.152-153.

 63. As applied in Deutsche Schachtbau-und Tiefbohrgesellschaft v. Ras Al Khaimah National Oil Co. [1987] 2 All ER 769. See comment by Komarov (1995) on p. 162.

 64. See for example Lando (1997) pp. 567-584.

 65. Trade usages are actual practices of the relevant business community, the existence of which must be established and if necessary proven, e.g. by expert witnesses. The trade usage is not a source of law.

 66. Mustill (1987) pp.149-183 at pp.174-177.

 67. As presented by Jarrod Wiener, The 'Transnational' Political Economy: A Framework for Analysis (1995) at ‹http://itl.irv.uit.no/trade_law/papers/The.Transnational.Political.Economy.a.Framework.for.Analysis.Jarrod.Wiener.UKC.html› For a listing of general principles to be found within the CISG , see Ulrich Magnus, Die Allgemeinen Grndsätze im UN-Kaufrecht [The General Principles of the CISG- in German] , Rabels Zeitschrift für ausländisches und internationales Privatrecht (1995) 469-494. For an english translation of this text, see ‹http://www.cisg.law.pace.edu/cisg/biblio/magnus.html› at the CISG W3 Database , Institute of International Commercial Law, Pace University School of Law.

 68. Mustill (1987) pp.149-183 at p. 173.

 69. Bonell, Various Techniques of Unification - Non-legislative means of harmonisation (1992) in 25th UNCITRAL Congress , pp. 33-40 on p. 40.

 70. Introduction of the UNIDROIT Principles of International Commercial Contracts (Rome, 1994) p. ix.

 71. Id. p. viii.

 72. As pointed out, their general nature, and the wide latitude granted arbitrators to determine the case, has led to some reservation as to the general suitability of their use, see Van Houtte, id. p. 412 and p. 399.

 73. Whether so instructed specifically by the parties, or referred to as suggested by the Preamble of the UNIDROIT Principles 1994 . Comp. Article 1.101 - Application of the Principles of the European Principles, European Principles 1998 .

 74. The most constraining suggestion being that it is only when the UNIDROIT Principles 1994 and the EU Principles 1998 converge, together with the CISG that there is a clear indication that they represent the Lex Mercatoria , see Raeschke-Kessler (1995) on p. 174.

 75. Bonell, The UNIDROIT Principles of International Commercial Contracts and the Principles of European Contract Law: Similar Rules for the Same Purpose? in UNIDROIT Uniform Law Review (Rome, 1996) pp. 229-246 at pp. 242-243; Lando (1997) pp. 567-584 where he states "The UNIDROIT Principles are for the World ... The PECL [Principles of European Contract Law] are for the European Union" on p. 572.

 76. See Amissah, On the Net and the Liberation of Information that wants to be Free in Fra institutt til fakultet, Jubileumsskrift i anledning av at IRV ved Universitetet i Tromsø feirer 10 år og er blitt til Det juridiske fakultet (Tromsø, 1996) pp. 59-76 or the same at ‹http://itl.irv.uit.no/trade_law/papers/On.the.Net.and.Information.17.02.1997.Amissah.d.html

 77. See Bonell (1996) on pp. 230-231.

 78. Bonell, The UNIDROIT principles of International commercial contracts: Why? What? How? in Børge Dahl & Ruth Nielsen (ed.), (1996) pp. 91-98 on p. 93 and in id. (1997) on p. 231, comments on sources of inspiration mentioning diverse sources including (articles combined) the United States Uniform Commercial Code and the Restatement (Second) of the law of Contracts , the drafts of the Dutch Civil Code 1992 , the Civil Code of Quebec 1994 , also the Foreign Economic Contract Law of the Peoples Republic of China 1985 , and the Algerian Civil Code of 1975 . The international instrument referred to is the CISG . Also to non-legislative instruments such as Incoterms, the UCP, FIDIC Red book, and various works by UNCITRAL .

 79. Van Houtte, The UNIDROIT Principles as a Guide to Drafting Contracts (B:1995) in UNIDROIT Principles: A New Lex Mercatoria? pp. 115-125 on p. 118.

 80. Jérôme Huet, Synthesis (1995) in UNIDROIT Principles: A New Lex Mercatoria? pp. 273-281 on p. 278 and p. 281.

 81. Supra footnote 74.

 82. J. Carver, Uniform law and its impact on business circles: the experience of the legal profession , in UNIDROIT (ed.), International Uniform Law in Practice (N.Y., 1988) p. 411. see also Bonell (1992) p. 39.

 83. Honnold, Documentary History of the Uniform Law for International Sales (1989) para. 19 on p. 256.

 84. Article 1.7, Comment 2. Also see Van Houtte (A:1995), p. 186.

 85. See Allan Farnsworth, An American View to the Principles as a Guide to Drafting Contracts in UNIDROIT Principles: A New Lex Mercatoria? pp. 85-92 on p. 87.

 86. Farnsworth id. as an example points out Article 6.1.4(2) does not reflect commercial practice.

 87. E.g. the ICC's Force Majeure and Hardship clauses .

 88. Van Houtte (A:1995), p. 185.

 89. Also consider present and future possibilities for such use of The Principles under CISG articles 8 and 9.

 90. Special principles have precedence over general ones. See Huet, Synthesis (1995) p. 277.

 91. Drobnig, id. p. 228, comment that the CISG precludes recourse to general principles of contract law in Article 7. This does not refer to the situation where parties determine that the UNIDROIT Principles should do so, see CISG Article 6.

 92. Vivien Gaymer, The UNIDROIT Principles as a Guide for Drafting Contracts: A View from an International Commercial Lawyer , in UNIDROIT Principles: A New Lex Mercatoria? pp. 97-102 on p. 100.

 93. Sono (1992) p. 250.

 94. Furmston (1995) p. 202, provides the compelling examples of two such agreements involving (i) the construction and (ii) the operation of the Channel Tunnel by Anglo-French consortiums. Both agreed upon disputes being "governed by those Principles of English and French contract law which are common and, if were no relevant common principles, by general principles of international commercial law." Dispute resolution to be by ICC arbitration in Brussels.

 95. Special problem regarding common/shared resources discussed by Garrett Hardin in Science (1968) 162 pp. 1243-1248. For short discussion and summary see Trebilcock, (1993) p. 13-15.

 96. Hugh Collins, The Law of Contract (London, 1986) p. 160; Lars Erik Taxell, Avtalsrättens normer (Turku, 1987) p. 11; cited by Wilhelmsson, Questions for a Critical Contract Law - and a Contradictory Answer: Contract as Social Cooperation in Wilhelmsson (ed.), Perspectives of Critical Contract Law (1993) pp. 9-52 on p. 20.

 97. There are other protective provisions in the form of: hardship (Chapter 6, Section 2); surprising terms (2.20); duty of confidentiality (2.16); and negotiation in bad faith (2.15). The principles also have specific provisions on: fraud (3.8); threat (3.9) gross disparity (3.10); and mistake (3.4, 3.5).

 98. Gaymer (1995) p. 97 states "I particularly noted Article 1.7, which requires each party to act in accordance with good faith and fair dealing. This is not a general principle of English contract law, nor can it be readily achieved under that law and I am interested to learn more about its perceived application and benefits." The US has come further than England with the development of the doctrine of unconscionability, and in basing the Uniform Commercial Code on the principle of good faith, which is hailed as its "single most important concept" and as "the foundation on which the [UCC] was drafted", citations to Dore and DeFranco from Albert Kritzer, International Contract Manual: Guides to Practical Applications of the CISG (looseleaf 1994) p. 74. See also the Official UCC Commentary , Section 1-203.

 99. Supra 2.3.2. in e§39.

 100. UNIDROIT Contract Principles , General provisions - Article 1.7 Each party must act in accordance with good faith and fair dealing in international trade. (2) The parties may not exclude or limit this liability. EU Contract Principles , General Obligations - Article 1.201 (ex art. 1.106) - Good faith and fair dealing: "(1) Each party must act in accordance with good faith and fair dealing. (2) The parties may not exclude or limit this duty." Good faith and fair dealing is also to be found in several national contract law systems, if not the English and "American". Generally see Lando, Each Contracting Party Must Act In Accordance with Good Faith and Fair Dealing in Festskrift til Jan Ramberg (Stockholm, 1997) pp. 345-361.

 101. Roger Brownsword, Towards a Rational Law of Contract in Wilhelmsson (ed.), Perspectives of Critical Contract Law (1993) pp. 241-272 on p. 241. Furmston (1995) on p. 201 notes: "It is recognised that even between commercial parties there may be stronger and weaker parties" in discussing Article 3.10 of the UNIDROIT Principles .

 102. Apart from the more straightforward cases of different types of misrepresentation.

 103. Trebilcock, (1993) p. 102, followed by a quotation of Milton Friedman, from Capitalism and Freedom (1962) p. 13.

 104. Trebilcock, (1993) p. 102, note quoted passage of Kim Lane Scheppele, Legal Secrets: Equality and Efficiency in the Common Law (1988) p. 25.

 105. On the loyalty principle generally see L.E. Taxell, Avtalsträtt (Stockholm, 1997). For a critical opinion on the principle of loyalty see Ernst Nordtveit, Partnerskap ved utveksling av ytingar. Realitet eller illusjon in Lov og Rett (1996) p. 337.

 106. Ian Macneil, Barriers to the Idea of Relational Contracts , in F. Nicklisch (ed.), Der komplexe Langzeitvertrag (Heidelberg, 1987) 31-49, at 35.

 107. Stewart Macaulay, Non-Contractual Relations in Business a Preliminary Study , in American Sociological Review (1963) pp. 55-67 on p. 61.

 108. Writing on EC law Hans-W. Micklitz, Principles of Justice in Private Law within the European Union pp. 259-258 at pp. 284.290, discusses the concept of "legitimate expectations" as having the potential to cover similar ground in a more constructive manner as being as yet without national connotations it may be easier to achieve/develop an internationally uniform definition and interpretation.

 109. Wilhelmsson, Legal Polycentricity: Consequences of Pluralism in Law (1995) pp.127-147 on p. 131.

 110. Secured as required by relevant conditions precedent and contractual guarantee.

 111. Under the New York Convention 1958 , UNCITRAL Model Law on Arbitration 1985 and arbitration laws that have been influenced by it.

 112. Huet (1995) p. 278 and p. 281.

 113. For more detailed reading see Goode (1991) pp. 54-74. For an English law perspective on uniform statutes see F.A. Mann, Uniform Statutes in English Law in P.V. Baker (ed.) The Law Quarterly Review (London, 1983) Vol. 99 pp. 376-406.

 114. Lando (1987) p. 111.

 115. Ronald Dworkin, Laws Empire (Harvard, 1986); Hard Cases in Harvard Law Review (1988). For a short summary see Wayne Morrison, Jurisprudence: from the Greeks to post-modernism (London, 1997) pp. 415-448.

 116. E.g. pacta sunt servanda and the narrow clausula rebus sic stantibus .

 117. E.g. pacta sunt servanda and good faith under the UNIDROIT and EU Principles and their interpretation clauses.

 118. Honnold (1992) p. 11.

 119. In the common law system based on the earlier authoritative legal reasoning of binding precedent and persuasive authority.

 120. Word coined by John Horgan in The End of Science (London, 1996) to cover the related fields of chaos and complexity. Chaos theory is a branch of mathematics and physics. Sometimes described as the edge of chaos, what is studied here is not randomness or disorder. Chaoplexity examines non-linear systems in which simple sets of deterministic rules can lead to highly complicated (detailed) results, which cannot be predicted accurately. A good introduction to the subject chaos is provided by James Gleick, Chaos: Making a New Science (New York, 1987).

 121. Such as those provided by Dworkin in explaining the application of rules and principles (to determine judicial outcomes).

 122. Hugh Collins, European Private Law and Cultural Identity of States in European Review of Private Law 3 (1995) pp. 353 at 356, 357-58, citation used by Christian Joerges, The Process of European Integration and the 'Denationalization' of Private Law in Børge Dahl & Ruth Nielsen (ed.), (1996) pp. 73-90, p. 82.

 123. Herbert Briggs, The Law of Nations; Cases, Documents and Notes (New York, 1952) on p. 897.

 124. Lord Diplock in Fothergill v Monarch Airlines [1981], A.C. 251, 282 or see ‹http://itl.irv.uit.no/trade_law/papers/England.Fothergill.v.Monarch.Airlines.HL.1980.html#ecs85›. Also Mann (London, 1983) at p. 379.

 125. And other international organisations such as UNIDROIT - footnote added.

 126. Réczei (1992), p. 6.

 127. Examples: The United Nations Convention on Contracts for the International Sale of Goods 1980, Article 7; The UNIDROIT Principles of International Commercial Contracts 1994, Article 1.6; The Principles of European Contract Law 1998 Article 1.106; The United Nations Convention on the Carriage of Goods by Sea (The Hamburg Rules) 1978, Article 3; The United Nations Convention on the Limitation Period in the International Sale of Goods 1974 and 1978, Article 7; UN Model Law on Electronic Commerce 1996, Article 3; UNIDROIT Convention on International Factoring 1988, Article 4; UNIDROIT Convention on International Financial Leasing 1988¸ Article 6; also EC Convention on the Law Applicable to Contractual Obligations 1980, Article 18.

 128. Honnold, Uniform words and uniform applications. Uniform Words and Uniform Application: The 1980 Sales Convention and International Juridical Practice in Einheitliches Kaufrecht und nationales Obligationenrecht . Referate Diskussionen der Fachtagung. am 16/17-2-1987, hrsg. von Peter Schlechtriem (Baden-Baden, 1987) pp. 115-147.

 129. Under Article 7. See also footnote 126.

 130. To take account of its international nature and the need to promote uniformity in international trade.

 131. For an example based on the probable international treatment of Norway's singular and controversial transformation of the CISG see Viggo Hagstrøm, Kjøpsrettskonvensjon, Norsk Kjøpslov og Internasjonal Rettsenhet in Tidsskrift for Rettsvitenskap (1995) pp. 561-588 on p. 569 and Joseph Lookofsky, Understanding the CISG in Scandinavia (Copenhagen, 1996) on p. 5, 13, and 105. Compare Kai Krüger's argument in Komparativ rettsmetode - observasjoner vedrørende prinsipper for rettsanvendelse i Europa nord og sør - illustrert ved tilfellet Norge og Italia in Jussens Venner (1996) pp. 281-312 on p. 312.

 132. For further information on such projects and information sources, see ITL the International Trade Law Monitor by Amissah at ‹http://itl.irv.uit.no/trade_law/

 133. Coming as they do from different: states; genre of writing; sources and levels of authority.

 134. UNCITRAL Secretariat (1992) p. 253. Proposed by David (France) at the second UNCITRAL Congress and on later occasions put forward by Farnsworth (USA). For references on interpretation of the CISG by a supranational committee of experts or council of "wise men" see Bonell, Proposal for the Establishment of a Permanent Editorial Board for the Vienna Sales Convention , in International Uniform Law in Practice/Le droit uniforme international dans la pratique [Acts and Proceedings of the 3rd Congress on Private Law held by the International Institute for the Unification of Private law (Rome 7-10 September 1987)], (New York, 1988) pp. 241-244; and Drobnig, Observations in Uniform Law in Practice , supra. at p. 306.

 135. UNCITRAL Secretariat, id.

 136. UNCITRAL Secretariat, id.

 137. UNCITRAL Secretariat, id. p. 258.

 138. Sono (1992) p. 251. The suggestion by Louis Sohn found in, Uniform laws require uniform interpretation: proposals for an international tribunal to interpret uniform legal texts (1992) in 25th UNCITRAL Congress , pp. 50-54.

 139. UNCITRAL Secretariat, id.

 140. Which is not the same as to suggest that the idea would be new. As Goode points out "Truly there is nothing new under the sun. Nearly two thousand years have elapsed since Cicero proclaimed the virtues of legal harmonisation", see Goode (1991) p. 54.

 141. Robert Hillman, CISG Cross Reference and Editorial Analysis: Article 7 in CISG W3 Database , Institute of International Commercial Law, Pace University School of Law (New York, September 1997) ‹http://www.cisg.law.pace.edu/cisg/text/hillman.html

 142. It should be noted that whilst electronic media makes such a solution more practicable and attractive, the same thing is achieved through the age-old tradition of incorporation by reference.

 143. John Robert Cassidy Mahwah, An Undergraduate Course in Comparative Legal Studies in Rechtstheorie Zeitschrift für Logik, Methodenlehre Kybernetik und Soziologie des Rechts, Beiheft 12 Monistic or Pluralistic Legal Culture? Ed. Peter Sack, Carl Wellman, Mitsukunk Yasaki (Berlin, 1987) pp. 200-207 on p. 205. See also footnote 3 of this text.

 144. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards New York, 1958 , Article II. The convention is available off ITL.

 145. Noted in the European Initiative on Electronic Commerce (1997) §45. "A number of Member States' rules governing the formation and the performance of contracts are not appropriate for an electronic commerce environment and are generating uncertainties relating to the validity and enforceability of electronic contracts (for example the requirements for written documents, for hand written signatures, or the rules of evidence that do not take into account electronic documents)..." ‹http://www.cordis.lu/esprit/src/ecomcomx.htm

 146. US Framework for Global Electronic Commerce (1997) ‹http://www.whitehouse.gov/WH/New/Commerce/

 147. UNCITRAL Secretariat (1992) p. 255.

 148. Schanze (1996) p. 62.

 149. Lalive, International Arbitration - Teaching and Research in Julian Lew (ed.), Contemporary Problems in International Arbitration (1987) at p. 18, quoting statement by Goode.

 150. Regionalisation may be a step towards internationalisation, but is not the same thing, and the subsequent step does not necessarily follow.

 151. See Lalive, id. reference to Goode and the Institute of International Law, Teaching of International Law, 1987 Committee chaired by Zourek.

 152. Report of the Secretary-General of the United Nations, Progressive Development of the Law of International Trade (1966). Report prepared for the UN by C. Schmitthoff.

 153. The Institute of International Commercial Law, Pace University School of Law, is engaged in the various activities mentioned in this paragraph with regard to the CISG .


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