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Friday, October 7, 2005

Gotanda on Damages Under the CISG

John_gotanda The U.N. Convention on Contracts for the International Sale of Goods is a worthy document in many ways, but it is just a tad weak on how you’re supposed to go about calculating damages.  John Y. Gotanda (Villanova) notes that this has led to the kind of international inconsistency that CISG was supposed to help alleviate.  He offers some thoughtful suggestions in Awarding Damages under the United Nations Convention on the International Sale of Goods: A Matter of Interpretation.  Here’s the abstract:

This article seeks to further a great aspiration of international law, providing a uniform set of rules governing trade. To this end, it offers a new method of interpreting the United Nations Convention on the International Sale of Goods that would foster greater uniformity among decisions calculating damages.

Claims for damages in transnational contract disputes often involve millions of dollars. While the Convention provides for the awarding of damages, the relevant articles set forth only the most basic framework for calculating damages. To resolve unsettled issues concerning the calculation of damages, courts and tribunals have turned to domestic rules, instead of searching for an answer through interpreting the Convention itself, as mandated by Article 7(2) of the Convention.  This practice has resulted in damages awards that are inconsistent or arbitrary and ultimately undermine the purposes and usefulness of the Convention.  The article proposes that tribunals should try to fill gaps by trying to find a solution within the Convention itself, through an analogical application of specific provisions or on the basis of principles underlying the Convention as a whole, before turning to domestic law. This approach would lead to more consistent and predictable awards of damages and would ultimately further the goal of the Convention to create uniform commercial law.

[Frank Snyder]

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