GENERAL INTERPRETATION AND APPLICATION: NO FORMAL REQUIREMENTS

Article 11 CISG and its counterpart PECL Article 2:101(2) are similar in substance and form. Both provisions adopt the principle of “freedom of formalities,” which upholds the validity of a contract absent writing or other formalities. Verbal and written evidence is permitted under both provisions to prove the formation of a contract.

“FORMAL REQUIREMENTS” FOR THE VALIDITY OF THE CONTRACT

No Formal Requirement for Contracts in General

Although PECL Article 2:101(2) and CISG Article 11 contain the same basic elements, implicit in Article 2:101(2) is its broad application to modification and termination by agreement as well as by unilateral promises. Article 2:101(2) also provides that parties to a contract can stipulate to preclude application of this provision; however, this option is highly unlikely, as this principle is widely accepted among the legal systems within the European community.

In contrast, Article 11 is limited to the formation of a contract; Article 29 explicitly sets forth the applicable principle in the event of modification or termination. Because of the international sphere of application and certain member states' preference for writing, Article 96 permits States that require contracts of sale to be evidenced by writing the option to declare Article 11 inapplicable.

Writing Required

In various European member states, laws mandate commercial contracts to be in writing. However, multiple exceptions are noted based in part on the various legal systems' perception of proving contracts. Hence, oral testimony is often permitted even in the absence of a written document.