GENERAL SCHEME OF ARTICLE 1:105 PECL AND ARTICLE 9 CISG

The structure and contents of Article 1:105 PECL and Article 9 CISG are similar. The first paragraph of each article deals with the binding effect of usages and practices that are agreed upon by the parties. The second paragraph of Article 9 CISG and Article 1:105 PECL deals with the binding effect of usages not agreed upon by the parties, but that are nevertheless binding due to their general applicability or because the parties implicitly have agreed upon a usage.

Practices and usages will, when applicable to the contract, set aside rules of law of the CISG and provisions of the PECL that would otherwise apply. However, under the PECL, practices and usages are only applicable if they do not violate mandatory rules of the law applicable to the contract; under the CISG, usages can be overridden in accordance with its Article 4(a) validity provision.

PRACTICES AND USAGES

Neither Article 9 CISG nor Article 1:105 PECL, defines the terms “usage” and “practice.” Therefore, what ultimately constitutes a usage or a practice in CISG and PECL is to be decided by national courts or by arbitral tribunals.

The Secretariat Commentary on Article 8 of the 1978 Draft of the CISG does not include a definition of the terms “usage” and “practice.” However, the Commentary to Article 1:105 PECL defines the term “practice” as previous conduct in a particular transaction or a particular kind of transaction between the parties that may be regarded as a common understanding.