Since late 2009 the Swedish government has been reconsidering its reservation to Part II of the UN Convention on Contracts for the International Sale of Goods (CISG) in light of a report by the Nordic Committee of Senior Officials for Legislative Affairs.(1) The report found that although the so-called Nordic reservation had no clear shortcomings, the relative advantages of revocation outweighed the disadvantages. Even though the report was not a formal legislative proposal, at the time of publication it seemed likely that the report would eventually form the basis of one. A recent government bill (Proposition 2010/11:97, April 28 2011) now proposes that Sweden make such a revocation.
CISG was adopted in Vienna in 1980. The convention constitutes a uniform international sales law and is applied by more than 75 countries, accounting for more than 75% of all international goods trade. It has been ratified by all EU member states except Malta, Portugal, Ireland and the United Kingdom.
Sweden, together with its Nordic neighbours Denmark, Finland and Norway, was an early adopter of the convention. However, these countries all made a reservation so as to avoid being bound by Part II of the convention, which deals with the formation of contracts. No other state made a reservation in this respect. The reservation was mainly attributed to the differing treatment of the revocation of offers in Swedish and Nordic contract law in comparison with the convention. Under the Swedish Contracts Acts, an offer cannot be revoked and a party is bound by its promise to enter into a contract. The convention, on the other hand, is based on the so-called 'contract theory', whereby a party is bound not by its promise, but rather by the contract. Consequently, under the convention, an offeror may revoke its offer provided that the offeree has not dispatched an acceptance. However, the impact of the contract theory in the convention is limited to situations in which the offer does not indicate that it is irrevocable. If the offer indicates – whether by stating a fixed time for acceptance or otherwise – that it is irrevocable, the convention rule is, in practice, identical to the Swedish and Nordic rule.
The effect of the Nordic reservation is that the convention is applied differently depending on whether an offer is made by a seller or buyer, and on whether the seller or buyer is based in a Nordic country or another contracting state.
The Nordic Committee of Senior Officials for Legislative Affairs report found that the advantages of revocation outweighed the disadvantages. The Swedish government has taken the report into consideration and reached the same conclusions. Therefore, it is proposed that a revocation be made and that subsequent changes to national law implementing CISG will follow once the revocation takes effect.
The only negative aspect of the proposal is that Nordic contract law will be applied in relation to the other Nordic countries. However, this minor inconvenience is something that the Nordic countries are likely to have live with for many years in relation to broader issues than merely that of contract formation; this development should be regarded as a full Swedish embrace of the convention's overall objectives. In this regard, the government bill comes as a welcome signal – not least to certain EU member states – that CISG is here to stay.
For further information on this topic please contact Bo Thomaeus at Gärde Wesslau Advokatbyrå by telephone (+46 8 587 240 00), fax (+46 8 587 240 01) or email ([email protected]).
(1) For more information on the report please see "Committee reconsiders Nordic reservation to Part II of CISG".