Source: http://www.cisg.law.pace.edu/cisg/biblio/ho11.html
Timestamp: 2019-04-21 11:20:19+00:00

Document:
Excerpt from John O. Honnold, Uniform Law for International Sales under the 1980 United Nations Convention, 3rd ed. (1999), pages 134-137. Reproduced with permission of the publisher, Kluwer Law International, The Hague.
A.	Domestic Rules: "Statutes of Frauds"
C.	Rejection of Part II, Formation of Contract: A Problem?
� 126 A. Domestic Rules: "Statutes of Frauds"
In 1677 the English Parliament (29 Car. II, c. 3) enacted a Statute of Frauds which required a signed writing for the enforcement of a wide variety of transactions including the sale of goods (�17)�a requirement that was embodied in the (U.K.) Sale of Goods Act (1893) (�4), was closely followed in the (U.S.A.) Uniform Sales Act (1896) (�4) and formed the basis for an elaborate statute of frauds included in the Uniform Commercial Code (�2�201).
In recent decades the tide has been running against such formal requirements. In 1954 Britain repealed this part of the Sale of Goods Act�a step that has been followed by many of the other countries that had adopted this Act.
Many civil codes imposed formal requirements for the making of contracts, but these requirements were usually made inapplicable to commercial transactions.
The 1964 Hague Conventions rejected such formal requirements, an approach that was followed in the 1980 Convention.
"A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses."
In the UNCITRAL proceedings this question arose: Would Article 11 nullify regulations that required certain contracts to be in writing in order to assist in the enforcement of exchange controls and other regulatory programs? This question is answered by the scope of the Convention as defined in Article 4: the Convention "governs only...the rights and obligations of the seller and the buyer arising from" the sales contract. (See the Commentary to Art. 4, supra at �61). Consequently, the Convention would not interfere with the imposition of sanctions for evasion or violation of a regulatory program; Article 11 merely removes any impediment to enforcement between the parties based on any domestic "requirement as to form."
A Contracting State, by a "declaration" (reservation") under Article 96, may protect its formal requirements from Article 11. See Art. 12 which follows.
Government procurement. Contracts for the purchase of supplies for a government present special problems of administration, such as the authority of government employees to create financial obligations for the public, and the possibility of favoritism, waste and fraudulent claims to public funds. As a consequence, legislation may impose special requirements for the approval, manner of execution and form for procurement contracts made by governmental units. Sales of government property, such as agricultural commodities acquired under a price support program, often pose fewer governmental problems and may be subject to fewer or no special regulations; the same may be true of contracts made by publicly owned corporations that perform functions such as the supply of electricity or transport.
A procurement contract made with a seller in the same State (the most common setting) would not meet the requirement of internationality of Article 1 (��40�43, supra). When these requirements are met, the fact that the Convention does not deal with problems of authority of an agent or other representative to bind the principal (��65�66, 98, supra) will avoid conflict with many laws on government procurement. A more difficult problem is posed by a procurement contract that would bind the government except for the requirement that it be in written form.
Article 4(a) (��61�64, supra) states that the "Convention is not concerned with: (a) the validity of the contract". The fact that a law states a formal requirement in terms of "validity" does not necessarily preserve the requirement from being overridden by Article 11; in this and many other settings achieving the Convention�s central goal of uniform application (Art. 7, ��85�87, cf. 72�73, supra) requires that the relationship between the Convention and domestic law be decided on the basis of the substance of the domestic rule rather than its form. Thus, it would be necessary to consider whether the law in question was addressed to a special problem posed by government procurement; if so, the law probably [page 136] should not be affected by Article 11. Formal requirements that are applicable only to government procurement or that are more strict than for comparable private contracts probably should be unaffected by Article 11. This conclusion would also be supported by applicability of the government�s regulations to procurement contracts made and performed abroad, and circumstances showing special needs for formal requirements in government contracting.
�127.1 C. Rejection of Part II, Formation of Contract: A Problem?
An Unnecessary Concern: In ratifying CISG, four Scandinavian States (Denmark, Finland, Norway and Sweden) exercised the privilege, provided by Article 92, not to be bound by Part II, Formation of the Contract. (These States had agreed on uniform rules for contract formation.) Article 11, above, provides that a contract of sale may be concluded without a writing or other formality�a provision dealing with contract formation. Could one imagine that, to give full effect to the rejection of Article II, Formation of Contract, Article 11 might be considered a part of Article II and therefore not applicable to the above four Scandinavian States?
1. Law Reform (Enforcement of Contracts) Act 1954 (SGA 4 had not been applicable in Scotland). See also: Sutton, Formation of Contract: Unity in International Sales of Goods, 16 U.W. Ont. L. Rev. 113, 148�150 (1977) (Art. 11 approved from Australian perspective); Ont. L. Ref. Com., I Sales 107�110. Zweigert & Kötz II (1987) 45�60 consider this development as part of a general retreat from formalism.
2. A review of the rules of many countries appears in Cigoj, International Sales, Formation of Contracts, 23 Neth. Int. L. Rev. 257, 270�272 (1976); Zweigert & Kötz II (1987), supra .
3. The Convention on the Law Applicable to International Sale of Goods (The Hague, 15 June 1955) does not apply to "the form of the contract" (�5). I Register 5. On the other hand, the Hague 1986 PIL Convention, Art. 11, states rules on which law is applicable to formal validity, subject to possible reservation under Art. 21�1(c). Under (U.S.A.) UCC 1�105, the Statute of Frauds (�2�201) is among the provisions that is applicable when the transaction bears "a reasonable relation" to the enacting State.
4. This article is the same as Art. 10 of the 1978 Draft and, in substance, is the same as ULIS 15 and ULF 3. The second sentence responds to the rule in some countries that a contract may be made without formality but must be proved by written evidence�e.g., proof by witnesses may be excluded. Zweigert & Kötz II (1987) 48�56. The legislative history of Article 11 is presented in connection with Article 12, �128�129, infra.
5. Sec. Comm. draft Art. 10, para. (2) O.R. 20, Docy. Hist. 410. See Baker, Enforcement of Contracts Violating Foreign Exchange Laws, 3 Int. Tr. L. J. 247 (1977), Giles 65.
6. General Conditions (ECE) Plant and Machinery, No. 188, �2.1 Accord: No. 188A, �2.1; No. 574, �2.1 Contra: Id. Potatoes (1980), Fresh Fruit and Vegetables (1979), Dry and Dried Fruit (1979); Art. 7 of all of these general conditions provides that the contract may be "formed orally." See also Cigoj, supra n. 2, at 272 and note 67.
7. Turpin, Public Contract, VII Int. Enc. Comp. L. Ch. 4, �43, note 250.
8. See Turpin, note 7 supra, �4.
9. J. Whelan, Federal Government contracts 39�56 (1985); Principles of Government Contract Law (Fed. Acq. Inst., Off. Mgt. & Budget, 1980); J. Zenserle & J. McHale (N.Y., Bender, 1985); UNCITRAL, Model Law on Procurement.
10. See works cited by Turpin, note 7, supra.

References: Art. 4
 Art. 12
 Art. 11
 Art. 21
 Art. 10
 Art. 10
 Art. 7