V. Usages and Practices

In international trade usages and practices can have significant impact on the parties contractual obligations. Art. 9 acknowledges this impact:

(1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.

Usages are commonly adhered to in certain areas of trade whereas practices develop particularly between the parties. Both have to exist for some time and have to be observed on a regular basis. According to Art. 9(1) practices the parties have established between themselves apply automatically. Usages on the other hand apply only if the parties agreed on their application.

Pursuant to Art. 9(2), however, the parties are deemed to have agreed to apply certain international usages:

(2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.

This provision first requires that the usage in question is known to the parties or that the parties at least ought to have known it. Second, the usage has to be widely known and regularly observed in a certain area of international trade. National, regional or local usages are not sufficient, even when they similarly exist at the places of business of both parties. The parties are of course free to opt out of the application of international usages.

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Last modified: Thursday, 22 October 2015, 4:43 PM