CISG Exclusion and Legal Efficiency

Global Trade Law Series Volume 48

The rationale behind the Vienna Convention on Contracts for the International Sale of Goods (CISG) is that a uniform sales law will lead to improved efficiency of cross-border sales and promote international trade. However, although it continues to attract new Member States and now applies to more than 80% of global trade, commercial parties often exclude the CISG, questioning it as a desirable choice of law.

The book uses an impressive array of methodologies to review the aims and applicability of the CISG and examine its qualities. An analysis of available empirical evidence regarding exclusion of the CISG in practice reveals the various factors which appear to influence lawyer choices to exclude the CISG. Then, through the prisms of behavioural economics, psychology, game theory, group dynamics, and institutional behaviour, the author identifies the factors that influence the frequency of use of the CISG in practice, and critiques the normative underpinning of the CISG to test whether it is indeed presently an efficient law, what factors affect its efficiency, and whether its efficiency can be improved. Among the crucial aspects of trade that rise to salience in the course of the analysis are the following:

• maximization of net exchange gains and potential welfare gains;
• comparative efficiency of the CISG vis-à-vis English and US sales law;
• consequences of coverage by the CISG of pre-contractual liability;
• waiver of the application of the CISG during legal proceedings;
• the degree to which exclusions of the CISG are inefficient choices of law; and
• choices of law in different jurisdictions and likely future changes in choices.

By bringing together cross-disciplinary elements of empirical research, statistical analysis, economic and behavioural theory, and their doctrinal implications, this book presents a contextual and realist insight into how and why harmonized international sales law is utilized in global trade. It brings all existing empirical and anecdotal evidence together and draws significant conclusions about the present and future of CISG exclusions. Practitioners in international trade, arbitrators, government officials, and academics will all welcome its enormously useful fund of information, and lawyers interested in whether excluding or including the CISG is in their clients’ interests will here find means to improve decision making and increase their confidence in providing effective advice.