Clayton Gillette - Sales Law, Domestic and International

ROBERT C. CLARK

Directing Editor
Distinguished Service Professor and Austin Wakeman Scott
Professor of Law and Former Dean of the Law School
Harvard University

DANIEL A. FARBER

Sho Sato Professor of Law and Director, Environmental Law Program
University of California at Berkeley

HEATHER K. GERKEN

J. Skelly Wright Professor of Law
Yale University

HERMA HILL KAY

Barbara Nachtrieb Armstrong Professor of Law and
Former Dean of the School of Law
University of California at Berkeley

HAROLD HONGJU KOH

Sterling Professor of International Law and
Former Dean of the Law School
Yale University

SAMUEL ISSACHAROFF

Bonnie and Richard Reiss Professor of Constitutional Law
New York University

SAUL LEVMORE

William B. Graham Distinguished Service Professor of Law and
Former Dean of the Law School
University of Chicago

THOMAS W. MERRILL

Charles Evans Hughes Professor of Law
Columbia University

ROBERT L. RABIN

A. Calder Mackay Professor of Law
Stanford University

CAROL M. ROSE

Gordon Bradford Tweedy Professor Emeritus of Law and Organization and
Professorial Lecturer in Law
Yale University
Lohse Chair in Water and Natural Resources
University of Arizona

THIRD EDITION

CLAYTON P. GILLETTE

Max E. Greenberg Professor of Contract Law,
NYU School of Law

STEVEN D. WALT

Percy Brown, Jr., Professor of Law,
University of Virginia School of Law

CONCEPTS AND INSIGHTS SERIES

The publisher is not engaged in rendering legal or other professional advice, and this publication is not a substitute for the advice of an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.

Concepts and Insights Series is a trademark registered in the U.S. Patent and Trademark Office.

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SDW

This book describes and analyzes the law and theory of sales under Article 2 of the Uniform Commercial Code (UCC) and under the United Nations Convention on Contracts for the International Sale of Goods (the CISG). There already exist several excellent works on these bodies of law. One might reasonably inquire what is different about this effort.

We believe that our approach adds to the existing work in two ways. First, we do not attempt to describe all the provisions under these bodies of law. Our assumption is that many of the provisions of the relevant law are self-explanatory and that restating them or citing to cases that apply them does little to provide additional understanding. We therefore concentrate on those provisions that have been most problematic and try to provide an analytical framework that students can apply even to provisions that we do not discuss explicitly. Thus, we intend to offer a theoretical treatment of Sales Law rather than merely a descriptive one.

We are admittedly normative in this approach. We ask what legal rules should be adopted and how existing rules should be interpreted and applied. Commercial law does not comprise an abstract, arbitrary set of principles. Rather, the drafter and applier of relevant rules act against some framework of what commercial law is intended to achieve. The UCC speaks of interpretive principles in very broad strokes, such as the admonition in 1-103(a)(1) to liberally construe its provisions to promote purposes and policies such as to simplify, clarify and modernize the law governing commercial transactions. Our assumption is that a more frank confrontation with the theory of commercial law is necessary. We could simplify and clarify commercial law with rules such as buyer always wins, or all disputes will be resolved by coin flips. Obviously, no one would think that such rules were preferable to a law predicated on some normative basis. But what should that normative basis be?

In this book, we analyze and critique sales law by reference to those principles that have been the subject of current debates about the proper direction of commercial law. These include such principles as allocating risks to parties in the best position to avoid them, respecting the autonomy of commercial parties, and minimizing social waste by allowing parties who value goods most highly the possibility of obtaining them. We believe that it is only through familiarity with these modes of analysis that the student of vi commercial law can make appropriate choices among competing legal rules and appropriate interpretations of existing rules. At bottom, however, our arguments are based on a belief that the primary function of commercial law is to provide a series of default rules that reflect the bargains that most knowledgeable and non-needy parties would have reached had they negotiated explicitly about the subject matter of the rule. Our position, in short, is that commercial law should do for the parties what they otherwise would have done for themselves. This position entails that commercial law should reduce the transaction costs that parties incur in making deals. Moreover, we believe that looking at commercial law through the lens of what would transpire between sophisticated commercial parties also serves the interests of those who are unsophisticated, including consumers.

The second feature of our approach that is worth emphasizing is our simultaneous treatment of international and domestic commercial law. The dramatic increase in international commerce makes this effort necessary. Improvements in transportation, communication, and payment devices have made international sales of merchandise more common, and the open world economy has made such transactions economically feasible. Increasingly, as more trading nations have ratified the CISG, it potentially governs more international sales contracts. The attorney who is unfamiliar with legal principles that apply to international transactions will be ill-prepared to face the inevitable surge in global commerce. She will be unable to advise her client knowledgeably about the clients entitlements under an existing contract or recommend the law that best serves the clients interests under a prospective contract. We therefore attempt to compare domestic commercial law principles with those generated under the CISG and to analyze the most obvious areas of difference.

We are grateful to Kevin Kordana and George Triantis for comments on earlier editions of this volume and to John Dolan for comments on Chapter 11. Our thanks to Brian Jennings and Nathan Pietila of the University of Virginia and to Anthony Mohen of NYU School of Law for research assistance related to earlier editions, and to Elena Hadjimichael for research related to this edition. We are also grateful to Abby Gillette for proofreading portions of the manuscript, and to Kathleen Carroll for proofreading portions of the manuscript and preparing it for publication. Finally, we thank our respective deans, Trevor Morrison and Paul Mahoney for the time and resources necessary to vii complete this project. Clayton Gillette especially wishes to thank the Filomen DAgostino and Max E. Greenberg Research Fund for financial support.