What is the role of "good faith" in the CISG?

The term “good faith” can be interpreted in several manner and it is important to understand precisely what is meant in an international business context to avoid confusion and uncertainty.

Article 7(1) of the Vienna Convention (the United National Convention on Contracts for the International Sale of Goods) incorporates the requirement of good faith as follows:

In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.

However, this above stipulation in Article 7(1) does not absolve uncertainty. Some have considered that the requirement of good faith only applies in relation to the interpretation of the Convention – an interpretation of such a requirement is understandable on first reading.[1] However, this is a very narrow interpretation and not one that some scholars say was intended by the drafters. It has been argued to this end that the requirement of good faith “cannot exist in a vacuum” and the related signatories must be required to adopt the requirement of good faith in a wider context in relation to their related actions.[2]

It has been argued that the requirement of good faith is an inherent and underlying principle of the Convention. Despite there being no express reference as to the requirement of good faith within some of the other conventions, the reading of Article 7(1) would suggest that it applies to many of the other Articles. However, some disagree with this interpretation and are against this subtle and slightly covert incorporation of the requirement of good faith a little perverse.[3]

To the contrary, iit has been argues that Article 7(1) introduced a general positive obligation of good faith to govern the conduct of parties within a contract. It has been argued by some (post-Convention) that the requirement of good faith is now a general requirement which has permeated into contracts governed by the Convention.[4] Equally, there is case law evidence that reliance has been placed on Article 7(1) beyond the application of good faith to merely interpret the Convention. The case of SARL BRI Production "Bonaventure" v. Société Pan African Export[5] is indicative of this. Here, the Court held that buyer in this particular case has conducted itself in a way that breaches its general obligation of good faith.

In summary, it would seem that there are conflicting interpretations of the role of good faith, some arguing for a wider, whilst others prefer a narrower interpretation. The courts, it would seem, have opted for the former.

[1] ICC Court of Arbitration Case No 8611 of 1997.
[2] Phanesh Koneru, ;The international interpretation of the UN Convention on Contracts for the International Sale of Goods: an approach based on general principles’ (1997) 6 Minnesota Journal of Global Trade 105.
[3] E Allen Farnsworth, “The Eason-Weinmann Colloquim on International and Comparative Law: Duties of good faith and fair dealing under the UNIDROIT Principles, relevant international conventions, and national laws” (1995) 3 Tul. J. Int'l & Comp. L. 47, 56.
[4] Bonell M.J. in Bianca CM & Bonell MJ et al, Commentary on the International Sales Law: The 1980 Vienna Sales Convention (Giuffré 1987), 87.
[5] Cour d'Appel Grenoble, 93/3275, 22 February 1995.

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