El contexto y los participantes

The common law treatment of the interpretation of intent is case law based and not readily distinguishable from rules of evidence and rules about mistake.[703] This may explain why Murray when he explained the objective vs. subjective manifestations also quotes Raffles v Wichelhaus.[704] In brief, the facts are that both parties made a mutual mistake. Cotton was to be sent by the SS Peerless from Bombay. In actual fact, there were two ships called Peerless and neither party was aware of this fact. The English court found that due to mutual mistake there was no contract, that is, existence of agreement cannot be presumed.[705] Murray notes that: "article 8 would certainly appear applicable to a 'Peerless' situation."[706]

Before analyzing the "SS Peerless" under the CISG, the principles involved must be first examined. Both examples quoted by Murray, as "any month-old student of contract law knows,"[707] fall under the principle of mistake. Mistake as discussed in Chapter 7 is a question of validity of contract and hence should be governed by article 4 and not 8. This observation is only partially correct. No doubt many common law lawyers have fallen into the trap of viewing the CISG through the lenses of municipal law. It is not a question of mistake that is of importance but the principle of intent. Mistake as such is not a principle of the CISG and, as seen in Chapter 6, is linked to article 4 if it affects only the formation of a contract. However, article 8 does not look only at the formation of a contract. The purpose of article 8 is to determine the intent of the parties. Whether the question of intent is in relation to the formation of a contract or whether it relates to terms within a contract is immaterial. The importance of article 7 is again highlighted. The first mandate of article 7 is what is described as the autonomous approach to the interpretation of the CISG. That is, interpretation is done without recourse to domestic law or principles, which can be or are sometimes functionally similar. Article 7 contains the obligation to approach the interpretation of the CISG in a "holistic way". Simply put, every interpretation must first exhaust all possibilities of applying only the CISG. Only when such an endeavor becomes impossible, that is when an external gap is discovered or proved to exist, can domestic law be applied.

In relation to the "SS Peerless", article 8(1) would need to be consulted and is the starting point for any analysis. The facts of the case indicate that each party did not know the actual or subjective intent of the other. Hence, there is no subjective intent established. If a party's subjective intention is one-sided, that is, it does not coincide with the views of the other party, the objective meaning must be elicited. Article 8(2) prescribes that the statements or conduct in question must be interpreted by the courts and tribunals, using the "reasonable person" test. In other words, hypothetical or objective intention of the parties has to be elicited by the courts.

In the "SS Peerless," the intention of the parties needed to be interpreted, as the buyer was not and could not be aware what the intent of the seller was. The question whether the intent was capable of being interpreted must be answered in the negative. Applying the "reasonable person test" would indicate that the objective intent cannot be established either. Subjective intent of each party is clear but neither party knew nor could have been aware of the intent of the other. There is simply no commonality of intent, subjectively or objectively. As the intent cannot be established, article 8 is not applicable.

The inability to establish either a subjective or objective intent would result in a failure to form a contract. In such a case, article 4 must be consulted which states that the Convention is not concerned with the validity of a

contract. Therefore, pursuant to article 7(2), municipal law must be applied.

The conclusion is if the intent is not clear, article 8 must be used to elicit such intent. If article 8 fails to do so a contract cannot be formed and article 4 applies. An examination cannot start with the common law principle of mistake in mind, as the CISG does not recognize such a principle.

If PECL is consulted it can be seen that mistake is listed under validity. Article 4:103 notes as heading; "Fundamental Mistake as to Facts or Law." The article basically declares that a party may avoid a contract for mistake but only under certain circumstances. The most obvious one is when both parties make the same mistake or when a mistake was caused by information given by the other party.[708] However a party can avoid the contract if:

"the other party knew or ought to have known of the mistake and it was contrary to good faith and fair dealing to leave the mistaken party in error" and; "had the mistaken party known the truth [it] would not have entered into the contract or would have done so only on fundamentally different terms."[709] There are some fundamental differences emerging between PECL and the CISG. This should be viewed as a reminder that the CISG must be interpreted autonomously. There have been views expressed that instruments such as PECL and PICC can be used by analogy to interpret the CISG. This discussion shows that reliance on articles outside the CISG should be rejected. In both the cases, article 8(1) could be used to determine the intent of the parties because in both situations the other party "knew or could not have been unaware what the intent was." However, PECL affords one of the parties the ability to avoid the contract. If we consider again the discussion in Chapter 6, we must add that article 4 should only be used in the case of mistake where no intent can be

established.

An examination of mistake as a principle in common law establishes that there is no general right to be released from a contract on the basis of mistake and courts are reluctant to set aside a contract merely because one or both parties made a mistake.[710]

As far as a common mistake is concerned, the matter is clear. In general terms, the parties make the same mistake - usually about the subject matter. In such a case, the contract is declared void. Under the CISG, this would be a good example where article 8 is not applicable despite the fact that both parties are fully aware of their intent. The contract cannot be performed, as it is impossible to do so. Article 4 becomes applicable and will determine that domestic law must solve the issue.

As far as mutual mistake is concerned, the matter becomes more complicated. Again it must be highlighted that the courts must establish and give effect to the intent of the parties. In mutual mistake, the parties are at cross- purposes. It appears that this area allows for a considerable scope for judicial creativity in common law. However such a statement must be tempered with the observation that the common law "objectifies intention by erecting barriers to evidence of what parties really intended as opposed to what they said or wrote."[711] It is that particular "barrier to evidence" which sets the common law apart from the CISG. Article 8(3) allows a court to take into consideration "all relevant circumstances of the case" whereas the common law is more restrictive. In Smith and Hughes[712] where the question was whether new oats or old oats were the subject of the contract; the court rejected mistake by noting:

" ... all that can be said is that the two minds were not ad idem as to the age of the oats; they certainly were ad idem as to the sale and purchase of them."[713]

The above case shows the scope for judicial creativity as a contract was declared valid despite the fact that the objective intent as to the quality of oats was never established. Under PICC or PECL, this matter could have been resolved under the contra proferentem rule unless the court through customary practices established between the parties could have established a hypothetical intention. A similar outcome could also have been achieved through article 8(3) of the CISG.

In summary, either through the CISG, PICC or PECL a greater uniformity could be achieved as the question of intention of parties is regulated. Common law deals with mistake in a "creative" way, which unfortunately could be interpreted as lacking predictability.