A Comparative Analysis of the Parol Evidence Rule of the UCC and the Evidentiary Provisions of the CISG
Abstract
The Convention on Contracts for the International Sale of Goods (CISG) has been implemented to provide a governing platform for transactions that occur between businesses in different contracting states. However, the CISG has been known to leave some issues for discretionary analysis. In particular, Article 7(2) CISG holds that “questions concerning matters governed by this convention [but] which are not expressly settled in it are to be settled in conformity with the general principles on which this convention is based.” The UNCITRAL Digest to the CISG presents a broad range of “principles” that are considered to be within the purview of Article 7(2) CISG, such as general policies of good faith. Authors have taken advantage of this openness with respect to specific issues that are not particularly addressed by the CISG, a phenomenon that accounts for the many scholarly writings that attempt to interpret how the CISG would govern certain issues that arise before an arbitral panel.
In a similar treatment, there is no question that the drafters of the CISG have shown extreme leniency when it comes to the convention’s evidentiary requirements, something that cannot be said about the drafters of Article 2-202 of the Uniform Commercial Code (UCC). With respect to the latter instrument, proponents of the continental approach have criticized that the UCC ignores the motif of a contract and wrongly focuses only on its outcome. In other words, the argument is that a contract is not an instrument that can be interpreted by an impassionate bystander ignoring each party's understanding of the statements or conduct of the other party, but is rather a meeting of the minds that is susceptible to party expectations. In the interests of party expectations and in today’s global market, it is important for every business transaction to account for this difference. In recognition of the dichotomy between both systems, this paper undertakes a comparative analysis of the strict mandates of the UCC and the more relaxed evidentiary provisions of the CISG in the interpretation of contracts.