The Status of Good Faith in the 1980 United Nations Convention on Contracts for the International Sale of Goods -A Study in the Light of Article 7

Abstract: The purpose of this essay is to analyse the status of good faith under the CISG in the light of article 7 of the Convention. The first part of this article reads: ''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.'' Emphasis added. The second part of the article embodies a gap filling statute and holds: ''Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.'' The essay is focusing on three issues. Firstly it is analysing whether the reference to good faith in article 7(1) only is relevant with reference to the interpretation of the Convention or if it applies to the conduct of the parties as well. Secondly the thesis is investigating the possibility to derive a duty to observe good faith by applying the gap-filling statute in article 7(2). Finally, if it is concluded that there is a duty to observe good faith under the CISG, the thesis will provide some guidelines of how a practitioner should apply the principle. It is concluded that the reference to good faith in article 7(1) only applies to the interpretation of the Convention. The adequate technique to impose a duty to observe good faith on the parties is instead to employ article 7(2). Courts shall, however, avoid general references to good faith in their judgements. Instead they should try to derive specific principles from the CISG's provisions by analogy. An example is the buyer's duty to undertake replacement purchases at the international market in order to mitigate damages. This specific principle exhibits important links to the concept of good faith. The derived rule displays, however, a closer relationship with specific provisions in the Convention. This reduces the risk of decisions contrary to the intention of the Convention. It also promotes a uniform application of the CISG and leads to a higher degree of predictability in international trade.