Debates and discussion

The Vienna Convention (CISG) tries to instill in every contract a sense of morality trough the observance of good faith and fair dealing in an international transaction. “The Convention imposes a positive obligation on the parties to contract in good faith ”. “Indeed, commercial transactions must necessarily be based on mutual trust and the confidence that each party to a contract will act reasonably and honestly, as no businessperson desirous of further access to world markets can afford to behave in a disreputable and unfair manner, for this would destroy their credit-worthiness ”.

The meaning of the broad inclusion of the concept of good faith in the provisions of the Vienna Convention (CISG) is not so specified and even still subject to debates and discussion. This is caused by the diverse and conflicting legal systems, which the drafters of the Vienna Convention (CISG) are from. Nevertheless, it can be traced that indeed there are still some provision that tries to impose as an obligation good faith among the parties to an international contract of sale of goods. Good faith is an important aspect in an international contract considering the broader and large-scale scope of the international transaction.

“These contracts are often open to abuse, fraud and deception considering that the guilty parties may evade legal consequences by hiding through the ambiguities and uncertainties of the application of international law, as well as of domestic laws in relation to the former. ” Though it may not have installed the principle of good faith as a standard rule in an international transaction, the Vienna Convention (CISG) has, to a certain extent, recognized and imposed the principle of good faith in international commercial transactions.

The failure to install the doctrine of good faith can be attributed to the stance of the representatives from the common-law countries whereby they are afraid of the possible excessive application of the doctrine of good faith in international transaction. The doctrine may be applied to instances, which are already beyond its real intendment. This leads to vagueness and uncertainty as good faith “would be much too vague and its interpretation would mean ‘different things to different people in different moods at different times and in different places ”.

This simply implies that the concept of good faith, among the common-law nations is relative to the attending circumstances and nature of the parties and the transaction, and a standard rule simply is simply defeated by the nature of these transactions. The concept of good faith first appears in the provision of the Vienna Convention in its Article 7, paragraph 1. It states that:  “In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.

” The said provision was intended to mean only as an interpretative tool in the interpretation of contracts. However such inclusion of the concept of good faith indeed bolsters an impact among those who would enter into an international contract to observe good faith and fair dealings thereto. The need for the parties to observe good faith is just a necessary standard behavior that should be sustained during the formation until the consummation of the contract.

Some provisions in the Vienna Convention (CISG) maybe gleaned, expressly or impliedly, as creating a duty for the observance of good faith. Article 8, paragraph 3 states that: ) In determining the intent of a party or the understanding a reasonable person would have had, 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.

This provision dissuades parties to employ fraudulent machinations and deceptive strategies in the negotiation and formation of contract as would evade from performance of the actual obligations imposed thereto. Such end may only be carried out through the observance of good faith and honesty in the early stage of the contract.