As reported in the last edition of CW News, the United States
Commission on Uniform Commercial Code has approved revisions of Article Two
(sales and contracts) and passed it on to the state legislatures for review
Meanwhile, from 1950 to 1998, worldwide exports have
more than tripled in terms of worldwide gross domestic product and overall,
total worldwide trade has increased 1,400 percent over the same time period.
Federal Reserve Chairman Alan Greenspan has commented that the accelerated
rates of economic production and communication increasingly render national
Efforts have been under way over the last 50 years to
create a uniform international system of commercial law to govern the new
global economy. During the process several laws have been created. ULIS,
Uniform Law on the International Sale of Goods and ULFIS, Uniform Law on the
Formation of Contracts for the International Sale of Goods were early
attempts at such uniform laws beginning in 1964. Because ULIS and ULFIS were
not widely adopted, The United Nations Commission on International Trade Law
(UNICITRAL) combined the text of ULIS and UFLIS, made some changes, and
formed a new treaty – the United Nations Convention on Contracts for the
International Sale of Goods (CISG). The CISG was first adopted by 42 nations
in 1980 and as of 2001 more than 60 nations have subscribed to the CISG.
Although other drafts of international contract law have been submitted, the
CISG is the only actual, operating international commercial law at this
While the CISG is the sole uniform commercial law that
is applicable on a global scale, and for all practical purposes, the first
such law in the modern-state era. A problem exists in that there is no
current uniform interpretation of CISG. This is because of two dominant,
widely practiced and different, legal systems in the world today -- Common
Law and Civil Law. It is necessary one understands the fundamental
differences between the two systems to grasp the problems facing the CISG
and any future attempts at international uniform laws.
The Common Law originated in England. It was developed
there, and then exported throughout the world as a result of British
imperialism in the days when the sun always rose and set on the Union Jack.
The English courts eventually declared the doctrine of stare decisis, as the “doctrine of precedent, under which it is
necessary for a court to follow earlier judicial decisions when the same
points arise again in litigation.” This is the defining characteristic of
the Common Law system – it is “judge-made law.” Cases are law.
Although there are statutes, legislation, in Common Law jurisdictions, these
do not generally supersede the case law.
The Common Law is the legal system practiced in England, the majority
of the United States, Canada, Australia, and most of the rest of the
English-speaking world, and in part some other nations, including India.
The Civil Law originated in the Roman Empire and was
greatly emulated by the French Civil Code also known as the “Napoleonic
Code” so named for its foremost advocate Napoleon Bonaparte.
The Civil Law code is designed to be thoroughly
comprehensive and unifying. There are courts in a Civil Law system; however,
all decisions are to be found in the code. There is no stare decisis in Civil Law jurisdictions. Thus cases are not law,
the code is the law.
The Civil Law system is practiced in nearly all corners
of the globe not previously reached by British imperialism, including most
of Continental Europe, Asia, Central America, South America and the State of
The CISG is very thin legislation. Moreover, the CISG
is silent on how the code is to be interpreted, which was designed to be a
compromise between the Common and Civil Law from which the nations came. The
courts in the various nations have recognized a solution is necessary due to
the lack of a uniform standard to follow.
Given the contrast between Civil and Common Law,
especially with regard to their treatment of cases as authority, it would
appear that any hybrid solution would be difficult to work out. Selecting
either the Common Law or Civil Law as the paradigm for a new international
commercial law makes more sense. Between these two systems, it may surprise
those of us in the Common Law world that there is much to consider in the
implementation of a Civil Law solution for any future international
commercial law system. The reasons for this opinion are as follows:
A united law is essential. Civil codes tend to be more
unifying in nature. They not only are designed to unify various sources of
law but also bring together different geographical regions under one law. An
international Civil Law commercial code would likely have the same unifying
effect on a global scale.
A Civil Law code would limit the delegation of
sovereignty of nations. Nations have an interest in seeing that any
delegation of their power to an international regime of law be limited and
defined. An international Civil Code law would accomplish this better than
common law. A code is fixed. However, under Common Law, because of stare
decisis, a nation would be indefinitely bound to whatever course the law
took in subsequent years in the form of future cases decided in foreign
nations. A Civil Law code would accomplish limited delegation of sovereignty
There has been a trend toward codification in many
areas of the law in both the United States and elsewhere. One only has to
look at the changes in the Uniform Commercial Code and the trend away from stare
decisis. The United States Supreme Court in 2003 stated, “Stare
decisis is not an inexorable command” (see Lawrence, et al. v. Texas, 539
U.S. 558). Thus, Common Law jurisdictions may be surprisingly open to a
Civil Law international system.
The global economy is growing and will continue to do
so. A legal structure is necessary in order to regulate commercial
transactions which transcend national borders that ASEAN, NAFTA and MERCOSUR
has failed to address. There is reason to consider implementing a Civil Law
code of international commercial law that would reduce obstacles to
international commerce and thereby improve international relations.
This column was written with the
assistance of Wayne Barnes, Associate Professor of Law at Texas Wesleyan in
Fort Worth, Texas.
I wish you well.
The information provided above is for
educational purposes only and not provided as legal advice. Legal advice
should be obtained from a licensed attorney in good standing with the Bar
Association and preferably Board Certified in either Creditor Rights or