The rules are those governing the formation of contract (Arts 8 and 14 et seq CISG).

The hierarchy of norms must be derived from the principle of party autonomy, as established in Article 6 CISG. Thus the hierarchy is as follows:

(1) Individually negotiated contract clauses;

(2) Usages agreed upon by the parties or practices established between themselves (Art 9(1) CISG);

(3) Widely known and regularly observed international trade usages (Art 9(2) CISG);

(4) Provisions of the CISG.

(a) No, the usages explicitly or impliedly agreed upon by the parties may also be merely regional or local usages or usages from another trade branch.

(b) According to an international usage, to which the parties had explicitly agreed, the buyer had to inspect the goods and give notice of any non-conformities within 30 days after arrival of the goods at the port of destination. Thus, the ‘reasonable time’ for giving notice under Article 39 had been derogated from.

(c) According to C 9-2, a ‘long lasting contractual relationship’ is required and a practice applied only in two contracts between the same parties is not sufficient proof of an ‘established practice’.

(d) It considers that usages and practices could be relevant even if they take place before the conclusion of the contract, with reference to the general conditions of sale, the prior correspondence and the draft of a framework agreement.

The parties had not established any practice which would require a specific form of contract conclusion, neither was there an international usage within the meaning of Article 9(2) which would require contracts of sale in the oil industry to be in writing. Thus, the Court found that, in accordance with Articles 11, 14 et seq., the contract had been effectively concluded.

(a) No, there is no explanation why the PICC 2016 would be applicable in this case (which was governed by the CISG).

(b) ‘Hardship’ is a defence that is not provided for under the CISG. In considering that ‘hardship’ must be seen as a general principle of the CISG because ‘hardship’ can be found in the PICC, the court does not respect the limits the CISG draws with regard to defences based on unforeseeable events.

(a) No, Article 9(2) CISG only requires that the usage be widely known and regularly observed by parties in the trade branch concerned and that the parties ought to have known of the usage.

(b) Article 1.9 PICC does not refer to the fact that the parties knew or ought to have known of the usage. The usage thus becomes part of the contract by the fact that it is widely known and regularly observed between parties in international trade concerned ‘except where the application of such a usage would be unreasonable’.

Examples are as follows:

(a) In the wood industry: a usage according to which, inter alia, the buyer must give written notice of any non-conformity of the wood within 14 days after having taken delivery at the latest (cf C 9-4).

(b) In the fish industry: a usage according to which Latin terms are used for designating the fish (Danish Maritime Commercial Court (Denmark), 31 January 2002, CISG-online 679).

(c) In the steel plate industry: a usage according to which the seller must be given the opportunity to be present at the examination of the goods (Appellate Court of Helsinki (Finland), 29 January 1998, CISG-online 1302).

(d) In certain Contracting States, independent of the trade concerned: a usage according to which the parties are bound by a so-called letter of confirmation by which the terms of an orally concluded contract are confirmed but, at the same time, slightly modified, if the addressee of the letter of confirmation remains silent upon receipt.

(a) According to C 9-4, merely local usages may fulfil the requirements of Article 9(2) CISG if the parties had their place of business within the area of these usages, or if they continuously do business in this area for a considerable period of time.

(b) Yes. Article 9(2) CISG expressly states that the usage should be widely known, and regularly observed, in international trade. This will be the case if a purely national usage is of international renown, but also where it is of geographically limited importance but the parties are located within the geographical area in which the usage is known and regularly adhered to.

(a) The Zivilgericht affirms that there was such a usage within the meaning of Article 9(2) CISG because the domestic legal systems of both parties generally agree on the binding effect of a letter of confirmation.

(b) No. If the scope of the usage is geographically limited and does not reach the other party’s place of business, the usage is not a usage ‘widely known in international trade’ within the meaning of Article 9(2) CISG. Thus, the question of whether silence upon the receipt of a letter of confirmation amounts to acceptance of the terms of that letter must be solved on the basis of Articles 14 et seq. CISG. (As to the usage regarding the effect of a letter of confirmation cf. above, Q 9-7(d)).

(c) Not really. In order to know whether a usage is recognised by the majority of traders doing international business in the same field, regard must be had to the place of business of the parties and to whether usages exist at that place, including legal usages, which are usually observed in cross-border sales contracts between parties of the respective countries.