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Good faith in international transactions

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Conclusion

Historically, the conception of good faith has been shaped by a variety of forces — political, mercantile and religious among them. Similarly, the CISG also treats the duty of good faith in a holistic manner; rather that attempt to explicitly define the good faith obligation in isolated provisions, the drafters of the CISG marked good faith as an integral and pervasive requirement. The drafters rightly understood that unfair dealing is best recognized in specific factual scenarios; judges and arbitrators will know bad faith when they see it. Thus, the drafters designed a systematic approach to international sales transactions with the assumption that the basic obligations of good faith and fair dealing are understood by the parties. In so doing, they have provided a source of confidence to traders who, due to the nature of the modern international marketplace, must forge their agreements fax-to-fax rather than face-to-face.

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References

  1. After recounting the history of the United States Supreme Court's many failed attempts to define “obscenity,” an exasperated Stewart finally concluded, “I know it when I see it.”Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring).

  2. Common and civil law systems have adopted different approaches to the good faith obligation at the negotiation stage. Seeinfra notes 17–26.

  3. United Nations Convention on Contracts for the International Sale of Goods (CISG), U.N. Doc. A/CONF. 97/18, Annex 1 (signed by original Contracting States on 11 April 1980).

  4. J.F. O'Connor,Good Faith in International Law, Dartmouth, 1991, 5–6.

  5. Ibid. at 19.

  6. Ibid. at 20.

  7. See generally, J.F. O'Connor,Good Faith in English Law, Dartmouth, 1990, 18.

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  27. CISG,supra n.3, art. 7(1).

  28. Others, however, do maintain that Article 7(1) imposes a general good faith obligation on the parties, similar to that found in the UCC. See, e.g., Arthur Rosett, “Critical Reflections on the United Nations Convention on Contracts for the International Sale of Goods”, 45Ohio State Law Journal (1984), 265, 289.

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  37. CISG,supra n.3 art. 6.

  38. UCC 1-103 states: “The provisions of this act may be varied by agreement ... except that the obligation [] of good faith ... may not be disclaimed by agreement of the parties but the parties may determine the standards by which the performance of [the good faith] obligation [] is to be measured if such standards are not manifestly unreasonable.” UCC 1-103, inSelected Commercial Statutes (West, 1992).

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  44. “Bait and Switch” is a pejorative term to describe a marketing tactic used by unscrupulous retailers. Potential customers are drawn by advertisements of unusually low sale prices on certain items (the bait), only to be informed upon arrival that the store is “sold out” of the featured merchandise. They are then encouraged to purchase alternate merchandise (the switch).

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  50. Seeibid. at art. 63.

  51. Article 47 covers the buyer's right to allow the seller additional performance time. Article 63 parallels Article 47, setting out the seller's right to allow additional performance time to the buyer. Seeibid., art.s 47 and 63.

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  69. Ibid.

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  78. Maritime International Nominees Establishment v.Republic of Guinea, Case No ARB 84 4 (International Center for the Settlement of Investment Disputes 1988); see generally, Monroe Leigh, American Society of International Law, Case Note: “Maritime International Nominees Establishment v.Republic of Guinea”, 82American Journal of International Law (1988), 598.

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  83. United States v.Bealey, 1990 WL 138543 (Ct Int'l Trade 1990).

  84. Ibid. at *1.

  85. Ibid.

  86. Ibid. at *2.

  87. Ibid.

  88. Ibid. at *2–*3, (quoting section 164(2) of the Restatement (Second) of Contracts (1979) (citations omitted).

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  95. See Leigh,supra n.98 at 664.

  96. Article 39 of the Dutch act forbids deliberate compliance with “any measures or decisions taken by any other State, which relate to any regulations of competition, dominant positions or conduct restraining competition.” See Dutch Economic Competition Act of June 28, 1956,Staatsblad voor het Koninkrijk der Nederlanden (Official Journal) (1956), 413.

  97. See Leigh,supra n.97 at 664 n.1.

  98. Seeibid. at 664.

  99. See FRCP Rule 37, inFederal Rules of Civil Procedure and Selected Other Procedural Provisions (Foundation Press 1991).

  100. See Leigh,supra n.97 at 665.

  101. Seeibid.

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  1. John Klein
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Law Clerk, Allan Kanner & Associates, New Orleans, Louisiana. B.A., 1989, Georgetown University; J.D. candidate, 1994, Tulane Law School. For their many valuable suggestions, grateful acknowledgement is made to Chris Anderson, Carla Bachechi and Joachim Zekoll.

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Klein, J. Good faith in international transactions. Liverpool Law Rev 15, 115–141 (1993). https://doi.org/10.1007/BF01079916

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