(a) It governs the interpretation of a party’s statements and conduct as well as the interpretation of the contract.

(b) Article 7 CISG deals with the interpretation and gap-filling of the Convention, whereas Article 8 CISG deals with the interpretation of the parties’ statements and conduct.

(a) Article 8(1) requires that the contract or a party’s declarations and conduct be interpreted according to the subjective intent of that party, even if this intention differs from the literal wording of the declaration, or even if an objective view would lead to another understanding of the contract, declaration or conduct.

Article 8(2) is the default rule which applies if there is no sufficient evidence of any subjective intent. In such a case, the contract, declarations and conduct must be interpreted from an objective point of view, that is, in the way in which reasonable persons of the same kind as the parties would read and understand the statements in the same circumstances.

(b) Yes. Here as well, the subjective or ‘real intent’ theory is stated as the primary rule and the ‘objective theory’ as the default rule.

(a) No, the CISG does not explicitly deal with standard terms and does therefore not provide for specific rules of interpretation of standard terms either.

(b) The BGH applied the contra proferentem rule.

(c) The PICC expressly states the contra proferentem rule in Art 4.6.

Art 1602 CC differs from Art 4.6 PICC. It requires (only) the seller to clearly state what its obligations are, and if the seller’s statement is unclear, interpretation of that statement must go against the seller, regardless of whether the seller has used standard terms or not. The provision seems to apply even where it is the buyer who refers to its own general conditions.

(a) In common law legal systems.

(b) The Plain Meaning Rule prevents a court from considering evidence external to an unambiguous piece of writing, whereas the purpose of the Parol Evidence Rule is to guarantee the integrity of written contracts, and it thus prevents the courts from admit external evidence, for instance a witness, who could contradict the written agreement.

(a) The question was whether the plaintiff-appellant, MCC, could rely on the non-conformity of the goods. It was established as a fact that MCC had not complied with the time-limits provided for in clause 4 of the sales conditions. But MCC argued that the parties never intended those sales conditions (printed on the reverse of the order form) to apply to the parties’ agreements, and the evidence provided for this argument was an affidavit by MCC’s president, Mr Monzon. The first and second instance, based on the Parol Evidence Rule, did not take the affidavit into consideration, and accordingly held that MCC was bound by clause 4 of the sales conditions. MCC appealed, and the Appellate Court had to decide whether the Parol Evidence Rule could be evoked under the CISG.

(b) The court states that the Parol Evidence Rule is not a rule of evidence, and thus a procedural rule, but rather a substantive rule of law preventing the litigant from attempting to show ‘the fact itself’ which did not show in the written document. It is thus a rule of interpretation. Since the CISG governs the question of contract interpretation in its Article 8, the Parol Evidence Rule—as a domestic rule of interpretation—is superseded by Article 8 CISG.

An effective merger clause bars extrinsic evidence which could supplement or contradict the written terms. In C 8-3, the parties had included such a merger clause in their contract. The effect of the merger clause was that the respective provisions of the CISG were derogated from and all questions explicitly addressed in the contract were controlled by the latter.

A Merger Clause will be interpreted in accordance with the interpretation rules of the Convention, in order to decide the meaning the parties wanted to give to such a clause that derogates from Article 8 CISG.

(a) The first version of the PICC was drafted more than 10 years after the CISG (and have since been revised), that is, at a time where the issue of merger clauses in relation to uniform substantive law (CISG) had been identified as a question which could potentially raise problems. The PICC thus settled the question explicitly.

(b) The PICC expressly state the interpretation rule which has been developed under the CISG. That is, the merger clause as such has the effect that statements or agreements other than those embodied in the contract document containing the merger clause will be disregarded for the purpose of establishing the terms of the contract. However, in order to determine whether the parties wanted the clause to have a merger clause effect, all circumstances relevant to the case, including prior statements or agreements, are to be taken into account.