II. Party Autonomy

As in most modern contract laws, party autonomy is one of the basic principles of the CISG. Art. 6 reads:

The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions.

 

1. Opting out

Under Art. 6 the parties are free to exclude the application of the CISG, i.e. to opt out of it. Such exclusion requires an agreement between the parties. The standard for this agreement is set by the CISG itself in Art. 14-24. Under these provisions it is also possible to opt out of the CISG in standard terms.

Whether or not a choice of law clause constitutes an exclusion of the CISG is determined by interpretation according to Art. 8. The parties have to express or at least imply a clear and unequivocal intent to exclude the application of the CISG. Of course, this requires in the first place that the parties are aware that the CISG is applicable in general. Consequently, the mere fact that legal counsel for both parties submit legal arguments based on a domestic law does not constitute an implied exclusion of the CISG unless both parties are aware that the contract falls within the scope of the CISG.

Two specific scenarios deserve to be mentioned: First, the express choice of the law of a CISG member state does not constitute an exclusion of the CISG in favor of the domestic law of that state but rather includes the CISG since upon ratification it becomes an integral part of the legal system of its member states. Second, if both parties use standard terms in which they each opt for their own domestic law while excluding the CISG, an interpretation under Art. 8 does not result in the finding that the parties mutually excluded the CISG. The reason for this outcome is that it is not reasonable to assume that the parties intended to apply the domestic law determined by an objective test under the applicable private international law. Hence, there is no meeting of minds to exclude the CISG if the positive choices in favor of the respective domestic laws fail.

 

2. Derogation

Under Art. 6 the parties are free to derogate from or vary the effect of any provision of the CISG. The only limit set by the CISG is found in Art. 12 that safeguards any reservations according to Art. 96 that exclude the freedom of form principle found in Art. 11. Further limits, particularly with regard to standard terms can be found in many domestic laws.

 

3. Opting in

The CISG can even apply to contracts not within its sphere of application if the parties specifically opt for its application. This is first possible on a contractual level, by way of incorporation by reference of the CISG’s provisions. Notably, in this case the mandatory provisions of the otherwise applicable domestic law still apply and override the respective provisions of the CISG. Whether it is furthermore possible for parties to opt for the CISG as a legal system, thereby excluding the application of the mandatory provisions of the otherwise applicable law safe for the provisions that fulfill the even stricter standard of international mandatory provisions, is disputed.

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Last modified: Thursday, 22 October 2015, 4:39 PM