Inclusión laboral de personas con discapacidad visual

An examination of the jurisprudence of article 4 is important to test the above conclusions. The distributorship issue has already been discussed above. Another area frequently in dispute is the question of set-off. The

interesting point to note is that courts in general tend to explain their disallowance of some set-offs with reference to article 4. The Oberlandesgericht [Appellate Court] Stuttgart [631] as well as the Amtsgericht [Lower Court] Frankfurt [632] noted that set-off was excluded due to article 4. The Oberlandesgericht [Appellate Court] München in addition held that both set-off and restitution are covered by article 4 and hence are excluded from the sphere of the CISG.[633]

a. Set-off

Set-off and restitution at first glance have nothing to do with validity of contract. It is a matter excluded by the CISG, as it is not mentioned in the Convention. Article 7(2) was correctly applied to reach the conclusion that domestic law must fill the gap.

It must be noted, however, that in the above cases domestic law was applied, which was the right decision. The problem, however. is not simply to come to the right decision but also to apply the appropriate law; in other words, application of the correct articles to reach a correct conclusion. In this sense, the above courts did make an error in their application of article 4. An examination of the jurisprudence of set-off reveals interesting decisions. In P.T. Van den Heuvel v. Santini Maglificio Sportivo de Santini P&C S.A.S,[634] the court distinguished between two types of set-off. One concerns overcharging, and the other concerns damages. In relation to a set-off for overcharging, the claim was allowed as neither party contested the value of the invoices. The court implied

that the set-off was allowable because the claims were subject to the CISG.[635] Damages due to a breach of the contract were considered to be outside the scope of the CISG and hence to be covered by domestic laws pursuant to article 7(2). However, in a later ICC Arbitration case the arbitrator held that the buyer was allowed a set-off for damages suffered due to the seller's breach of the contract pursuant to article 74.[636]

It appears that the Dutch court unlike the ICC arbitrator did not read article 74 correctly. Article 74 allows for damages due to a breach of the contract including loss of profit. Set-off therefore - as long as it pertains to damages due to a breach of contract or loss of profits - is within the scope of the CISG. A set-off due to other reasons, such as punitive damages not contained within the contract is outside the scope of the Convention. Domestic law, subject to article 7(2) must fill the gap. Some courts have misinterpreted article 4 as defining all those matters, which are not included in the CISG. These questions should be solved pursuant to article 7(2). Careful attention must be given to set-off provisions if they are in breach of a domestic law, which could make them invalid. In such a case article 4 could be used to implement domestic law. However, in the cases described above the set-off was not a question of a breach of domestic laws but rather a misinterpretation of article 4. A Swiss decision explains the issue well. The court of Freiburg stated that the only question in issue was the amount of set-off. The right of set-off was based on General Terms and Conditions and the question was whether these terms formed part of the sales contract. The court correctly noted that the question was one of validity and pursuant to article 4 was not governed by the CISG.[637] Domestic law and in this case German law had to be applied. Under German law the set-off was not excluded. The interesting part of the decision was the fact that in making its interpretation the court looked beyond one article and tried to solve the issue within the context of the CISG generally. Article 8 was consulted and it was found that if the statement made by the parties in relation to set-off corresponds with the intent of the parties then the CISG was applicable. "If the interpretation of statements made by both parties does not lead to a congruent result, the intent of the parties has to be elicited in accordance with the principles of domestic law."[638]

In conclusion, it can be said that rulings on set-off have produced the correct results but in some instances for the wrong reasons. Generally speaking, set-offs that are due to breaches of contract but not covered by article 74, have been recognized as being in contravention of article 4. All courts have recognized that gap filling pursuant to article 7(2) must be used if the matter is not governed by the CISG.

b. Other Issues

The application of article 4 shows that courts and tribunals confuse the application of article 7(2) with an application of article 4. Article 4 is not read correctly. Several issues ruled upon can be used to illustrate this point. This examination is restricted to the burden of proof, currency payments and assumption of debt. The Handelsgericht Zürich noted that the question concerning the burden of proof is not governed by the CISG.[639] This particular determination was repeated by the Bezirksgericht der Saane [640] and the Tribunale d'Appelo del Cantone del Ticino.[641]

All three courts decided basically that article 4 excludes a determination of the burden of proof however "due to its underlying systematic structure, certain principles may be inferred."[642] The three Swiss courts in the end came to the correct decision however they should have used article 7(2) to determine this issue. As the courts pointed out, burden of proof is not explicitly ruled upon within the CISG.[643]

However by applying article 7(2), a gap is discovered. The above courts expressed that a principle can be

discovered via article 35, namely that the buyer must notify defects to the seller. Therefore, the burden of proof as to defects rests with the buyer. The Bezirksgericht der Saane came to an interesting conclusion.[644] As

explained above, it ruled that the burden of proof as to the means of transportation is not settled in the CISG. Through the application of article 7(2), the court applied domestic law and as the buyer could not satisfy the burden of proof, article 32(2) was used.[645] It declares that the choice of the mode of transportation is left to the seller. This decision nearly reflects a correct application of the CISG. The only flaw is the use of article 4

declaring that the burden of proof is not settled in the CISG. The court should have bypassed article 4 and directly applied article 7(2).

In contrast, a decision by the Kantonsgericht Wallis demonstrates an undesirable approach to the CISG.[646] The ruling hinged on the currency in which the purchase price had to be paid. Again article 4 instead of article 7(2) was applied. Rather than discovering a general principle under article 54, which deals with the buyer's obligation to pay the price, the court applied Italian law, which incidentally led to the same conclusion as under the CISG. This approach is incorrect because the court did not follow article 7(2) and searched for a gap requiring filling. Validity as described in article 4 was confused with gap filling. Decisions of this kind however are rare and do not disprove the hypothesis of this thesis.

c. Concluding the Argument

How far has the understanding of article 4 been advanced? Most importantly, the above discussion has shown again that the CISG cannot be applied article by article. Rather it should be read in context. That is, a juridically holistic approach must be taken. Article 4 has two important parts, the expressions "in particular" and "except as otherwise expressly provided in this Convention." Ferrari in his commentary on OGH, April 24, 1997 came to the same conclusion that the above expressions delineate the sphere of influence between the CISG and domestic law.[647] The same is also achieved in article 7(2). Articles 4 and 7(2) are closely linked because article 7(2) spans the interpretation and gap filling of the CISG and article 4 merely rules on issues of validity of contract. Priority must be given in any interpretation or question of delineation to article 7(2).

Article 4 has been viewed by many commentators and some courts as dealing with one aspect only namely validity. This is a very narrow view. Understood correctly, article 4 has a much wider application as it assists courts and tribunals in a determination of the scope of the CISG. In Thermo King v. Cigna Insurance Company et al.,[648] the court had to deal with the question of privity of contract in an action by a sub-purchaser against the initial seller. The court directed its attention to article 4. Pursuant to article 4, the CISG only governs rights and obligations of buyer and seller arising out of their contract. As there is no contract between the sub-purchaser and the initial seller, the CISG is not applicable. In KSTP-FM,LLC v. Specialized Communications, Inc and

Adtronics Signs, Ltd [649] the court had to rule on an application in which the plaintiff alleged that in Minnesota the UCC expressly allows certain parties the right to sue for breach of implied conditions in the absence of contractual privity. The court relied on article 4 and concluded, like the French court above, that the CISG is limited to the rights under the contract between buyer and seller. Furthermore the court held that the CISG is the supreme law of the land and hence the application of Minnesota law was barred.[650]

Courts have also taken the incorrect view and applied article 4 to "matters excluded" which is the domain of article 7(2). It can be argued that the expression "in particular" leads to such a conclusion as "it only serves to emphasize that, apart from matters listed in article 4(a) and (b), there are other matters not governed by the CISG."[651] As an example, article 5 can be cited. It excludes product liability as far as personal injury is concerned. At the same time, the other important expression "except as otherwise provided in this Convention" points to the fact that not all matters in relation to validity are excluded. Article 11, for example, lays down the principle of informality of contract, that is, contracts do not have to be evidenced in writing. Furthermore, courts have also discovered that validity issues such as in relation to quality have been dealt with in article 35 of the CISG.[652]

The concept of not allowing validity questions to be brought under article 4(a) if matters are covered by the CISG can be illustrated with an Israeli case.[653] It must be noted that the case was ruled under ULIS the forerunner of the CISG. An Israeli buyer bought steel from a German seller. The contract was improperly performed but due to lapse of time and lack of notice, as is also the case under the CISG articles 36 and 39, the buyer lost the litigation. After re-commencing action in Germany the restitutionary remedy contained in domestic law pushed aside the remedies available under the Convention. Schlechtriem commented that:

"the uniformity reached by the Convention would be in grave danger if ... national provisions could be applied [simply] because [their] application leads to invalidity or avoidance of a contract and thereby could be brought under article 4(a)."[654]

regulated by the Convention. Article 4 therefore is only available if there is a gap needing filling. That is, the Convention is silent on the matter.

Looking at the list of matters excluded from the CISG through article 4 namely: statute of limitation, set-off, agency, distributorship and frame contracts, validity of penal clauses, assignment of receivables, assumption of debts, and others, the conclusion must be drawn that the above topics do not fall under the principle of validity. Indeed agency and distributorship could be dealt with under article 3, which in brief excludes service contracts. This point can be illustrated by a decision of the Obergericht [Appellate Court] Luzern, which interpreted article 3(2) in a wider sense.[655] It noted that if other elements other than those relating to the contract of sale were preponderant then the CISG would not apply.[656] The court specifically referred to exclusive distribution or franchise contracts but noted that a single sale of goods pursuant to the franchise agreement would be governed by the CISG.[657]

The solution as indicated above is that article 7(2) must be consulted first and an examination of the CISG as a whole must be undertaken to see whether an "external gap" can be filled by the CISG or by domestic law. What then is the purpose of article 4? It can be argued that article 4 expressly "draws a line in the sand" where the CISG is not applicable. Validity of contract is excluded but "validity" requires definition and substance. By analogy with PICC and PECL, validity can be reduced to questions of illegality, immorality, mistake (in certain instances) or lack of capacity. The above court decisions demonstrate that despite the correct results, the path chosen was incorrect. Courts failed to grasp that validity of contract and not validity of issue is the key. Validity of issue is governed by article 7(2). Validity of contract is settled in article 4 only.

Returning the attention to the hypothesis, the conclusion is that courts have failed to understand the correct sphere of application of article 7(2) by taking a far too narrow view of its application. In defense of the courts and

tribunals, it must be stated that the above discussion of the black hole in the CISG leads to the extreme corners of a permissible application of it. It is understandable for courts to stay within the "comfort zone" and find the "correct outcome" before considering the "correct approach." With extending jurisprudence future decisions can be approached with a stock of knowledge and doctrine, which will support courts in pushing the "elastic corners" of the CISG.

In conclusion it can be observed that courts have not generally used domestic law in preference to the CISG and hence the hypothesis can still be supported with the proviso that a full understanding of the capacity of article 7(2) has not been achieved. However the further point must be made that uniformity pursuant to article 7(1) has been achieved through the application of article 7(2) as seen in decisions of the courts, which have tended towards a converging CISG jurisprudence.

CHAPTER 7

ARTICLE 8 - THE RELATIONS BETWEEN CONTRACTUAL PARTIES