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24th Annual Vis Moot Competition Notes

Undisputed Facts:
Wright Ltd. is the Claimant Seller, a highly specialized manufacturer of fan-blades for jet engines,
incorporated in Equatoriana (R argues this is Cs place of business.). Claimants present parent
company is Wright Holding PLC. CEO is COuntinhcuo. Mario Lee is the accountant. Amelia
Beinhorn is COO. Horace Fasttrack is Counsel (is he in house?)
SantosD KG is the Respondent Buyer, a medium sized manufacturer of jet engines, incorporated in
Mediterraneo. Respondents present parent company is SpeedRun. NO Paul Romario is the SEO.
Cyril Lynberg is the CFO. Joseph Langweiler is the attorney. Yan Malmesbury is the . Both
Claimant and Respondent used to both belong to Engineering International SA.
Arbitration Seat: Vindobona, Danubia
Arbitration Rules: CAM-CCBC
Law: UNCITRAL Model Law on International Commercial Arbitration, w/ 2006 amendments.
CISG Contracting States: Equatoriana, Mediterraneo, + Danubia.
o The general contract law of these states is a verbatim adoption of the UNIDROIT Principles
on International Commercial Contracts.
Procedural Questions
1.
Are Claimants claims admissible or have they been submitted out of time?
2.
Does the arbitral tribunal have the power to order Claimant to provide security for Respondents
costs?
3.
If so, should the arbitral tribunal order Claimant to provide security for Respondents costs?
Substantive Questions
1.
Is Claimant entitled to the additional payments from Respondent in the amount of $2,285,240 for
the blades based on the present exchange rate?
a. Claimant wants current exchange rate to apply. Respondent argues fixed exchange rate of
clamps in addendum applies to the whole contract.
2.
Is Claimant entitled to the additional payments from Respondent in the amount of $102,192.80 for
the fees deduced by the Central Bank?
Substantive Questions
Claimant Argues
Claimant is entitled to the full payment of the purchase price in accordance with Articles 62, 53,
54 CISG.
o The parties had agreed on a specific method to calculate the purchase price as set out in
Section 4 of the Development and Sales Contract of 1 August 2010. In the aircraft industry,
joint developments of parts with a certain type of risk sharing are normal. In the present
case, however, Respondent insisted on fixing a maximum price at a time when relevant
factors for determining a price, in particular the costs incurred for the production per
blade could only be estimated. Consequently, the parties agreed on a price formula which
fulfilled three objectives. First, it ensured that Respondent in the absence of unforeseen
extraordinary circumstances would not have to pay more than US$ 13,125 per blade.
Second, it ensured that below that price Claimant would at least cover its costs and make
some profit. Third, it contained an incentive for Claimant to keep the costs as low as
possible, as its profit would increase with the decreasing of the costs. A comparable
provision had already been used by the parties during their earlier co-operations when
both were still subsidiaries of Engineering International SA.
o To attain the second objective of the price calculation, it is necessary that the actual costs
are reimbursed as they are incurred. Thus, if such costs are to be converted into US$ the
current rate must be applied. By contrast Respondent, trying to take advantage of the
obvious calculation mistake in the first invoice, has based its determination of the price on
the wrong and not tenable assumption that the Parties had agreed on a fixed exchange rate
of US$ 1 = EQD 2.01. Such a fixed exchange rate was, however, only agreed for the clamps
where the influence of the exchange rate was limited due to the much lower amount. It
does not apply for the fan blades. Claimant is paying all its employees in Equatorianian
Denars (EQD) and would not have agreed to be burdened with the full exchange rate risk
for the full contract. Thus, the fixed exchange rate is limited to the items covered by the

addendum. In the meantime, the US$ has fallen in comparison to the Equatorian Denar and
the present exchange rate is US$ 1 = EQD 1.79.
Respondent as buyer has to bear any costs associated with payment of the purchase price.
o Articles 53, 54 CISG entitle Claimant as the seller to the full purchase price. This includes
any costs associated with administrative regulations. Therefore, Respondent has to bear
the levy charged by the Financial Investigation Unit for investigating the purchase price
payment for money laundering.

Respondent Argues
Claimant has no claims for payment against Respondent under the contract, as Respondent has
fully performed its payment obligations.
o Under the Development and Sales Agreement and as stated in the first invoice sent with
the blades Respondent had to pay US$ 20,438,560 for the fan blades to Claimants bank
account, which Respondent did.
o Contrary to Claimants allegations Respondent did not try to take advantage of an
obvious mistake in an invoice, but paid the price it was required to pay under the
Development and Sales Agreement. The price for the fan blades is determined on the basis
of Section 4 of the Development and Sales Agreement. Claimants production costs amount
to EQD 19,586. Converted according to the fixed exchange rate governing the whole
Agreement, which is specified - or agreed between the Parties - in the Addendum to the
Agreement and adding the agreed upon profit that amount to a price of US$ 9,744.28 per
blade. The fixed rate explicitly stipulated in the Addendum was to be applied for the whole
Development and Sales Agreement and not only the Addendum as alleged by Claimant.
Claimant must bear the 0.5% levy by the Central Bank of Equatoriana for the examination of its
Financial Investigation Unit under Section 12 Regulation ML/2010C.
o It is not part of the ordinary bank charges for payments, but based on a very specific public
law regulation in Equatoriana where Claimant has its place of business. No comparable
rule exists in Mediterraneo or any other country known to Respondent. Had Respondent
been aware of the levy it would either have taken the levy into account in the price
calculations or would have insisted on the inclusion of an explicit provision into the
contract that Claimant should bear this extraordinary charge arising from circumstances
which are much more associated with Claimant than with Respondent.
o Claimant by contrast knew of the levy or at least ought to have known about it because
other engine producers informed Respondent that the levy has been charged by the Central
Bank already before on at least two occasions where payments had been made to Claimant.
In the first case, involving a payment of May 2010 by JetPropulse from Ruritania, Claimant
actually paid the levy and not the buyer JetPropulse. In general, the present situation is
comparable to the much more frequent problem in relation to the sellers obligation to
deliver goods that public law regulations at the buyers place potentially affecting the
conformity of the goods. It is now largely accepted that unless the parties have agreed
differently the public law regulations at the sellers place of business are relevant for the
conformity of delivery under Article 35 (2) CISG. The seller is not expected to know all
public law regulations at the buyers place of business unless the buyer actually informs it
about such regulations. The same consideration must be applied to the obligation to pay
the price. Thus Claimant was either under a duty to inform Respondent about the
extraordinary levy known to Claimant or to bear the costs for it.
Law Cited by the Parties
Claimant Cites
CISG Art. 54: The buyers obligation to pay the price includes taking such steps and complying
with such formalities as may be required under the contract or any laws and regulations to enable
payment to be made.
o The buyers obligation to pay requires the buyer to take steps to comply with formalities
required by the K or by law. See Art. 54.
CISG Art. 53: The buyer must pay the price for the goods and take delivery of them as required by
the contract and this Convention.
o Generally, a buyer has an absolute duty to pay the price agreed upon and take delivery of
them. However, a buyer is not bound to pay unless he has had an opportunity to examine
the goods, unless such examination is inconsistent with the K. See Art. 58(3).

CISG Art. 62: The seller may require the buyer to pay the price, take delivery or perform his other
obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement.
o Sellers Right to Require Specific Performance (Art. 62). If the buyer fails to perform his
promise to pay the price, take delivery, Art. 62 allows the seller to require that the buyer
keep her word, unless the seller has resorted to an inconsistent remedy (avoidance under
Art. 64).

Respondent Cites
It is now largely accepted that unless the parties have agreed differently the public law
regulations at the sellers place of business are relevant for the conformity of delivery under
Article 35 (2) CISG. The seller is not expected to know all public law regulations at the buyers
place of business unless the buyer actually informs it about such regulations. The same
consideration must be applied to the obligation to pay the price. Thus CLAIMANT was either
under a duty to inform RESPONDENT about the extraordinary levy known to CLAIMANT or to
bear the costs for it.
Law I Think May Apply
1. CISG Art. 61:
a. If the buyer fails to perform any of his obligations under the contract or this Convention, the
seller may: (a) exercise the rights provided in articles 62 to 65; (b) claim damages as provided in
articles 74 to 77. (2) The seller is not deprived of any right he may have to claim damages by
exercising his right to other remedies.
2. CISG Art. 19:
a. Was there an offer/ acceptance by not objecting? Did signing the addendum by _____ create
acceptance?
3. CISG Art. 29:
a. contract may be modified by agreement.
i. Addendum with the clamps was agreed to, did that modify the initial agreement with regard
to the exchange rate to be used?
ii. If its a modification issue, it would be governed by the CISG because modification is
discussed in the CISG.
iii. 4. In addition, article 27 (1) is applicable to the question as to whether the terms in a
confirmation from or in an invoice sent by one party to the other after the conclusion of the
contract modify the contract where those terms are additional or different from the terms of
the contract as it was concluded. If it is found that the parties have agreed to the additional
or different terms, article 27 (1) provides that they become part of the contract. As to
whether the silence on the part of the recipient amounts to an agreement to the modification
of the contract, see article 16 (1) and the commentary to that article.
b.
4. Article 7 [Interpretation of Convention]
a. In the interpretation and application of the provisions of this Convention, regard is to be had to
its international character and to the need to promote uniformity and the observance of good
faith in international trade.
5. CISG Art. 8: intent
a. (1) statements made by and other conduct of a party are to be interpreted according to his intent
where the other party knew or could not have been unaware what that intent was.
b. (2) If (1) not applicable, statements made by and other conduct of a party are to be interpreted
according to the understanding that a reasonable person would have had in the same
circumstances.
c. (3) In determining the intent of a party or the understanding a reasonable person would have had
in the same circumstances, due consideration is to be given to all relevant circumstances of the
case including the negotiations, any practices which the parties have established between
themselves, usages and any subsequent conduct of the parties.
i. Was exchange rate/ bank transfer fees discussed at all during negotiations?
ii. There was a practice of not using a fixed exchange rate.
iii. Usage
iv. Subsequent conduct?
v. In determining intent, I can argue that Respondent knew or could not have been unaware
that there was no fixed exchange rate because the exchange rate for the clamps are less than
the minimum the parties agreed to!
d. Commentary

6. Article
a.
b.

c.

7. Article

i. 1. Article 7 on interpretation furnishes the rules to be followed in interpreting the meaning of


any statement or other conduct of a party which falls within the scope of application of this
Convention. Interpretation of the statements or conduct of a party may be necessary to
determine whether a contract has been concluded, the meaning of the contract, or the
significance of a notice given or other act of a party in the performance of the contract or in
respect of its termination.
ii. 2. Article 7 states the rules to be applied in terms of interpreting the unilateral acts of each
party, i.e. communications in respect of the proposed contract, the offer, the acceptance,
notices, etc. Nevertheless, article 7 is equally applicable to the interpretation of "the
contract" when the contract is embodied in a single document. Analytically, this Convention
treats such an integrated contract as the manifestation of an offer and an acceptance.
Therefore, for the purpose of determining whether a contract has been concluded as well as
for the purpose of interpreting the contract, the contract is considered to be the product of
two unilateral acts.
iii. 3. Since article 7 states rules for interpreting the unilateral acts of each party, it does not
rely upon the common intent of the parties as a means of interpreting those unilateral acts.
However, article 7 (1) recognizes that the other party often knows or could not be unaware of
the intent of the party who made the statement or engaged in the conduct in question. Where
this is the case, that intent is to be ascribed to the statement or conduct.
iv. 4. Article 7 (1) cannot be applied if the party who made the statement or engaged in the
conduct had no intention on the point in question or if the other party did not know and had
no reason to know what that intent was. In such a case, article 7 (2) provides that the
statements made by and conduct of a party are to be interpreted according to the
understanding that a reasonable person would have had in the same circumstances.
9 CISG
(1) The parties are bound by any usage to which they have agreed and by any practices which
they have established between themselves.
(2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to
their contract a usage of which the parties knew or ought to have known and which in
international trade is widely known to, and regularly observed by, parties to contracts of the type
involved in the particular trade concerned.
Commentary
i. 2. By the combined effect of paragraphs (1) and (2), usages to which the parties have agreed,
are binding on them. The agreement may be express or it may be implied.
ii. 3. In order for there to be an implied agreement that a usage will be binding on the parties,
the usage must meet two conditions: it must be one "of which the parties knew or ought to
have known" and it must be one "which in international trade is widely known to, and
regularly observed by, parties to contracts of the type involved in the particular trade
concerned." The trade may be restricted to a certain product, region or set of trading
partners.
iii. 4. The determining factor whether a particular usage is to be considered as having been
impliedly made applicable to a given contract will often be whether it was "widely known to,
and regularly observed by, parties to contracts of the type involved in the particular trade
concerned." In such a case it may be held that the parties "ought to have known" of the
usage.
1. Do parties in trade of airplane parts/ manufacturers regularly apply fixed exchange rate?
2. Claimant and Respondent had a prior practice of using the exchange rate at the time of
the contract based on two other prior contracts. Is there an argument regarding Usage
by International Custom?
iv. 5. Since usages which become binding on the parties do so only because they have been
explicitly or implicitly incorporated into the contract, they will be applied rather than
conflicting provisions of this Convention on the principle of party autonomy. [Footnote 1:
Article 5.] Therefore, the provision in ULIS article 9, paragraph 2, that in the event of conflict
bet ween an applicable usage and the Uniform Law, the usages prevail un less otherwise
agreed by the parties, a provision regarded to be in conflict with the constitutional principles
of some States and against public policy in others, has been eliminated as unnecessary.
1. So we can ignore provision saying that if an issue is not addressed by convention, we go
to private international law (assuming this law is not in our favor).
2. But in CISG, we have provision regarding transaction fees needing to be paid by buyer.
12: Offer

a. 6. In order for the proposal for concluding a contract to constitute an offer it must indicate "the
intention of the offeror to be bound in case of acceptance." Since there are no particular words
which must be used to indicate such an intention, it may sometimes require a careful examination
of the "offer" in order to determine whether such an intention existed. This is particularly true if
one party claims that a contract was concluded during negotiations which were carried on over
an extended period of time, and no single communication was labelled by the parties as an "offer"
or as an "acceptance". Whether there is the requisite intention to be bound in case of acceptance
will be established in accordance with the rules of interpretation contained in article 7.
b. 9. The remaining terms of the contract resulting from the acceptance of an offer which only
indicates the goods and fixes or makes provision for determining the quantity and the price would
be supplied by usage or by the provisions in Part III on the law of sales if, for example, the
offer contained no term as to how or when the price was to be paid, article 53 (1) provides that
the buyer must pay it at the seller's place of business and article 54 (1) provides that he must pay
it when the seller places either the goods or documents controlling their disposition at the
buyer's disposal. Similarly, if no delivery term is specified, article 29 provides how and where the
goods are to be delivered and article 31 provides when they are to be delivered.
i. So were saying that for the exchange rate issue: there was no agreement of fixed exchange
rate and since CISG doesnt address the issue a usage of no fixed rate applies.
ii. Respondent had clear intent to be bound by offer, thus missing terms supplied by CISG
(intent and usage)
iii. and for the bank fees issue, the CISG applies regarding buyer paying, also party autonomy
because its in the contract that bank charges for transfer should be confirmed by buyer
asap
c. 14. Article 12 provides the same rule in respect of the price that it does in respect of quantity.
Thus, for the proposal to constitute an offer it must expressly or implicitly fix or make provision
for the price. It is not necessary that the price could be calculated at the time of the conclusion of
the contract. For example, the offer, and the resulting contract, might call for the price to be that
prevailing in a given market on the date of delivery, which date might be months or even years in
the future. In such a case the offer would expressly make provision for determining the price.
i. Here, the K made express provision for DETERMINING the price. No fixed numbers were
used for price.
d. 16. Similarly, where the buyer orders goods from a catalogue for future delivery it may be implicit
in his order and from other relevant circumstances that the buyer is offering to pay the price
currently being charged by the seller at the time of the delivery.
i. Respondent as buyer implicitly offered to pay price charged by Claimant as seller at the time
of the delivery
e. 17. In order to determine whether a proposal implicitly fixes or makes provision for determining
the price it is necessary to interpret the proposal in the light of article 7, and in particular
paragraph (3) of that article.
8. Article 19 CISG
a. (3) Additional or different terms relating, inter alia, to the price, payment, quality and quantity of
the goods, place and time of delivery, extent of one party's liability to the other or the settlement
of disputes are considered to alter the terms of the offer materially, unless the offeree by virtue of
the offer or the particular circumstances of the case has reason to believe they are acceptable to
the offeror
9. Article 57 [Place of payment]
a. (1) If the buyer is not bound to pay the price at any other particular place, he must pay it to the
seller: (a) at the seller's place of business; or (b) if the payment is to be made against the handing
over of the goods or of documents, at the place where the handing over takes place. (2) The seller
must bear any increase in the expenses incidental to payment which is caused by a change in the
place of business of the seller subsequent to the conclusion of the contract.
i. provides a rule for the place at which payment of the price is to be made. Because of the
importance of the question, the contract will usually contain specific provisions on the mode
and place of payment. Accordingly, the rule in article 53 is expressly stated to apply only if
"the buyer is not bound to pay the price at any other particular place".[Footnote 1: This
result is also reached through the operation of article 5. However, the express re-iteration of
the principle emphasizes the importance that the contract will usually attach to the place of
payment of the price.]
ii. 2. It is important that the place of payment be clearly established when the contract is for
the international sale of goods. The existence of exchange controls may make it particularly
desirable for the buyer to pay the price in his country whereas it may be of equal interest to

the seller to be paid in his own country or in a third country where he can freely use the
proceeds of the sale.
iii. 3. This Convention does not govern the extent to which exchange control regulations or other
rules of economic public order may modify the obligations of the buyer to pay the seller at a
particular time or place or by a particular means. The buyer's obligations to take the steps
which are necessary to enable the price to be paid are set forth in article 50. The extent to
which the buyer may be relieved of liability for damages for his failure to pay as agreed
because of exchange control regulations or the like is governed by article 65. [Footnote 2:
For the extent to which the seller may be relieved of the duty to deliver the goods if the
buyer does not pay as agreed, see articles 54 (1), 60, 62, 63 and 64.]
10.
[Article 62 CISG]
a. The seller may require the buyer to pay the price, take delivery or perform his other
obligations, unless the seller has resorted to a remedy which is inconsistent such
requirement.
i. 2. This article recognizes that the seller's primary concern is that the buyer pay the
price at the time it is due. Therefore, if the price is due under the terms of articles
54 and 55 and the buyer does not pay it, this article authorizes the seller to require
the buyer to pay it.

CISG in Nutshell
However, additional obligations, other than those identified in Article 53, can be binding on the
buyer only to the extent that he expresses his consent to make them part of the contractual
undertakings.
the obligation to pay the purchase price is a fundamental obligation of any sales contract. Indeed,
the payment obligation is required for the very existence of a contract of sale and if payment is
entirely missing the contract is simply not a sales contract, at least under the CISG.
Irrespective of any possible additional obligations that the parties may have agreed upon in their
contract, under Article 54 CISG the buyers 223 obligation to pay the purchase price includes
taking such steps and complying with such formalities as may be required under the contract or
any laws and regulations to enable payment to be made. This provision deals with actions
preparatory to payment and treats them as an integral part of the buyers obligation to pay the
purchase price. The most relevant consequence of this solution is that the failure to perform such
preparatory actions can, in itself, be regarded as a breach of contract. Therefore, the seller can
react to such failure by resorting not only to the remedies available for anticipatory breach of
contract under Articles 71 and 72 CISG,2 but also to the general remedies for breach of contract
by the buyer set forth in Articles 61 et seq. CISG.3 Another relevant consequence of the inclusion
of preparatory actions within the framework of the buyers characteristic obligations is that the
buyer has to bear the costs implied by such activities and formalities.4 Article 54 CISG refers both
to preparatory actions and formalities required under the contract to enable payment to be made
and to those required by any laws and regulations.
However, actions that the buyer may be bound to perform can also include formalities required by
any laws and regulations. The provision at hand clearly makes reference to formalities under
relevant domestic laws and regulations, including, for instance, foreign exchange and clearing
rules.
Instead, Article 54 sets forth a substantive rule, imposing on the buyer a duty to take actions so as
to enable payment to be made, irrespective of the law under which obstacles to a smooth
performance of payment exist. Therefore, although in most cases the relevant domestic laws and
regulations that the buyer must consider are those of the buyers home country, at times the buyer
may also be required to abide by the laws and regulations of the sellers country or by those of a
third country, to the extent that they govern the payment process. Furthermore, the prerequisites
of payment that must be satisfied may include both measures of a commercial nature and
administrative measures imposed by local authorities. However, with respect to the latter
measures, the buyer may be exempt from liability under Article 79 CISG, dealing with the
prerequisites and effects of force majeure circumstances. In fact, to the extent that the formalities
imposed by the local authorities can be regarded as an impediment to payment, which is beyond
the buyers control, unforeseeable and insurmountable, the buyer may be exempted from the
liability to compensate damages for his breach of contract, although the sellers right to require
performance under Article 79(5) CISG remains unaffected.

The CISG does not provide rules dealing with the currency in which payment must be made. In
most cases, the currency will be indicated by the parties in the contract,8 either by means of a
detailed provision dealing with the currency of payment, or by means of the simple use of the
symbol (e.g., $, or ) or acronym (e.g., USD or EUR) indicating the currency next to the
sum indicating the purchase price. In some cases, however, the currency may be unspecified in
the contract and the question arises as to whether the CISG provides rules for determining the
currency. In the absence of an express rule in the Convention, the prevailing view in scholarly
writing and caselaw9 is that the matter of the currency of payment is governed by the CISG, but
not expressly settled in it. Therefore, under Article 7(2) CISG, the matter is to be settled, if
possible, in conformity with the general principles on which [the Convention] is based.10 The
relevant general principle applicable to the issue at hand can be drawn from Article 57(1)(a) CISG,
under which, unless the parties differently agree, the buyer must pay the purchase price at the
place of business of the seller.
Also the issue of the means of payment is not dealt with explicitly by the CISG. Nonetheless, there
should be no doubts that payments in cash always satisfy the requirements of the Convention.
However, also cashless payments must be deemed permissible, since they can be deemed to be
in conformity with a general usage of international trade. Therefore, international bank wire
transfers represent a valid form of payment in international sales, permissible under the CISG, the
performance of which is complete when the payment is credited to the benefit of the seller.
As a general rule, under the CISG a promisor in breach of contract is liable and must compensate
the aggrieved party for damages suffered as a result of the breach. As pointed out above, the
harshness of this general rule is somewhat mitigated by the foreseeability requirement under
Article 74, according to which only damages that were foreseeable at the time of the conclusion of
the contract must be compensated. The rationale behind this rule is that the promisor must be,
when entering the agreement, in the position to measure the risk that he is taking in order to
price the contract and possibly to buy insurance for the risk he takes. In line with this rationale,
another fundamental provision of the CISG is the one set forth in Article 79(1) CISG, according to
which [a] party is not liable for a failure to perform any of his obligations if he proves that the
failure was due to an impediment beyond his control and that he could not reasonably be expected
to have taken the impediment into account at the time of the conclusion of the contract or to have
avoided or overcome it or its consequences. Thus, according to the provision at hand and
coherently with the rationale of Article 74 CISG, the promisor cannot be held liable for non
performances that at the time of the conclusion of the contract were not foreseeable and that are
due to an unpredictable impediment,which is beyond the scope of the risk that the promisor
undertook by contract.56
Article 79 CISG exempts the party in breach from the obligation to pay damages to the extent that
that party can prove concurrently three different circumstances: first, that the reason for the
breach lies in an impediment beyond his control; second, that the impediment could not be taken
into account at the time of conclusion of the contract; and third, that the party in breach could not
reasonably be expected to avoid or overcome the impediment or its consequences.
o How can it be an impediment if it was forseeable since the parties explicitly agreed to it?
For the same reason second and third requirement fails.
o the impediment must be beyond the obligors control, unforeseeable and unavoidable.
In particular, it is relevant to notice that no exemption can be claimed with respect to the
occurrence of impediments that were within the obligors sphere of control, which may include
both what the obligor could in practice control and avoid, and what he contractually assumed as a
risk falling within his sphere of control.
o Here, Respondent explicitly contractually assumed risk of bank fees.
The external impediment must not have been foreseen or foreseeable (by the obligor, as well as by
a reasonable person in the same circumstances as the obligor) at the time of contract conclusion.
This means, among others, that the risk pertaining to the event claimed to amount to an
impediment under Article 79 cannot have been the object of any contractual agreement between
the parties, since such agreement would make it impossible to consider the event unforeseeable.
Supreme Court of Belgium reached the conclusion on the basis of the UNIDROIT Principles of
International Commercial Contracts can be resorted to in order to fill a gap left by the CISG.
However, this conclusion rests on the untenable premise that the UNIDROIT Principles can be
considered general principles upon which [the CISG] is based under the gapfilling rule set forth
in Article 7(2) CISG, whereas in these authors view the general principles referred to in that
provision must be derived from within the text of the CISG.

UNIDROIT PRINCIPLES
2.1.14 (Contract with terms deliberately left open)
o If the parties intend to conclude a contract, the fact that they intentionally leave a term to
be agreed upon in further negotiations or to be determined by a third person does not
prevent a contract from coming into existence. The existence of the contract is not affected
by the fact that subsequently the parties reach no agreement on the term; or the third
person does not determine the term, provided that there is an alternative means of
rendering the term definite that is reasonable in the circumstances, having regard to the
intention of the parties.
o Official Comments
1. Contract with terms deliberately left open. A contract may be silent on one or
more issues because the parties simply did not think of them during the
negotiations. Provided that the parties have agreed on the terms essential to the
type of transaction concerned, a contract will nonetheless have been concluded and
the missing terms will be supplied on the basis of Articles 4.8 or 5.1.2 (see Comment
1 on Article 2.1.2). Quite different is the case dealt with in this Article: here the
parties intentionally leave open one or more terms because they are unable or
unwilling to determine them at the time of the conclusion of the contract, and refer
for their determination to an agreement to be made by them at a later stage, or to a
third person. This latter situation, which is especially frequent in, although not
confined to, long-term transactions, gives rise in essence to two problems: first,
whether the fact that the parties have intentionally left terms open prevents a
contract from coming into existence and second, if this is not the case, what will
happen to the contract if the parties subsequently fail to reach agreement or the
third person fails to make the determination.
2. Open terms not in themselves an impediment to valid conclusion of contract.
Paragraph (1) states that if the parties intended to conclude a contract, the fact that
they have intentionally left a term to be agreed upon in further negotiations or to be
determined by a third person does not prevent a contract from coming into
existence. In cases where it is not expressly stated, the parties intention to
conclude a contract notwithstanding the terms left open may be inferred from other
circumstances, such as the non-essential character of the terms in question, the
degree of definiteness of the agreement as a whole, the fact that the open terms
relate to items which by their very nature can be determined only at a later stage,
the fact that the agreement has already been partially executed, etc.
Here, clear intention to be bound given definiteness of agreement, essencial
character of terms, performance, signature, correspondence saying
agreement, etc.

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