CISG Legal Research Services

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The debate over the role of good faith in the CISG has continued, either as only an interpretive principle or as both an interpretative principle and an underlying general principle of the CISG so that a general duty of good faith can be imposed on the parties in performance of contractual obligations. CISG case law shows that in recent years courts and tribunals from different parts of the world have often taken a broader view reading the requirement of “observance of good faith in international trade” in Art 7(1) CISG as a conferment of substantial authority on them with respect to determining parties’ behaviour standard in performance of contractual obligations. They have clarified this “behaviour standard” question by systematically referring to the good faith principle. Probably the rationale behind their decisions is that good faith is a synonym of reasonableness. The term reasonableness is either specially mentioned or distinctly alluded in almost all CISG provisions, which connotes that parties to a CISG contract are inherently obliged to act reasonably in performing contractual obligations. It follows that, in order to fulfil this obligation to act reasonably, the parties synonymously must conduct themselves according to the standard of good faith. Thereby, good faith must also be regarded as an underlying general principle of the CISG. Hence, the argument for the possibility of imposing a general duty of good faith upon the contractual parties seems to be winning the academic debate. 

When engaging in interpretation of the CISG, the courts and tribunals are required to keep the CISG’s international character and its goal of uniformity uppermost in mind. Thus, foreign court decisions, though not binding, have a persuasive standing. If well-reasoned, they will or should be followed by other courts. Several trends of courts’ changing attitude towards a willingness to consider foreign CISG case law can be observed.  When assessing foreign court decisions, “wrongly decided” cases are rejected but different legitimate views may be taken into account. When the interpretation of a specific issue of the CISG is consolidated, any divergence from that interpretation achieved by a court must be well-reasoned. A ruling on CISG provisions coming from the highest court of a country is not necessarily a better one. Rather, a good court decision should be based on its persuasiveness, sensibility, and well-reasoning. The reasoning of courts’ opinion on CISG provisions always has more importance than their holdings, such opinion may be treated as at least probative. Thus, foreign case law containing opinion on CISG interpretation and application will be taken by courts and tribunals as having legal relevance, not just a mere information.