Notes on the United Nations Convention on the use of Electronic Communications in International Contracts and its effects on the United Nations Convention on Contracts for the International Sale of Goods.

The territorial sphere's requirements under the two conventions are also different. While the CISG requires that both parties to an international transaction be located in Contracting States (or the applicable "rules of international private law lead to the application of the law of a Contracting State"), (60) the Convention does not have a similar requirement. Although the Working Group initially considered introducing a provision analogous to CISG article l(a) to ensure consistency between the two conventions, "as the Working Group's deliberations progressed and the impact of the [ECC] became clearer, the need for parallelism between the [ECC] and the [CISG] was questioned since it was felt that their respective scopes of application were in any event independent of each other." (61)

Article 19 is also relevant for purposes of the Convention's scope of application. It provides that, through a declaration, Contracting States may limit the application of the Convention only to those cases in which the parties are located in ECC Contracting States or when the parties have agreed to have it govern the transaction. (62)

Three possible scenarios might result from a declaration under article 19. First, if the forum State has made a declaration under article 19, the ECC will be applied to the matter regardless of rules of private international law if both States where the parties have their place of business are Contracting States to the Convention. (63) Second, if the forum State has not made such a declaration, the application of the Convention depends on three factors: (i) whether the forum State "rules of private international law point to the laws of the forum State, of another Contracting State or of a non-Contracting State;" (ii) whether the State so determined "has made a declaration pursuant to article 19" and (iii) whether "both parties have their places of business in different Contracting States." (64) If the applicable law is that of the forum State or another Contracting State that has not made an article 19 declaration, the ECC will be applied even if the parties are not located in two different Contracting States.65 If the applicable law is that of a Contracting State that has made an article 19 declaration, the Convention applies only if both parties are located in two different Contracting States. (66) If the applicable law is that of a non-Contacting State, the Convention will not be applicable. (67) Third, if the forum State is a non-Contracting State, the applicability of the Convention depends on the same three factors as under the second scenario. (68)

(4) Location of the parties CISG article 1 ECC article 6 (1) This Convention applies 1. For the purposes of this to contracts of sale of goods Convention, a party's place of between parties whose places business is presumed to be the of business are location indicated by that in different States: party, unless another party when the States are demonstrates that the party Contracting States; or making the indication does when the rules of private not have a place of business at international law lead to the that location. application of the law of a Contracting State. (69) 2. If a party has not indicated

a place of business and has CISG article 10 more than one place of

business, then the place of For purposes of this business for purposes of Convention: this Convention is that (a) if a party has more than which has the closest one place of business, the relationship to the relevant place of business is that contract, having regard to the which has the closest circumstances known to or relationship to the contract contemplated by the parties at and its performance, having any time before or at the regard to the circumstances conclusion of the contract. known to or contemplated by the parties at any time 3. If a natural person does before or at the conclusion of not have a place of business, the contract; reference is to be made to (b) if a party does not a the person's habitual place of business, reference residence. is to be made to his habitual residence. (70) 4. A location is not a place

of business merely because

that is: (a) where equipment

and technology supporting an

information system used by a

party in connection with the

formation of a contract are

located; or (b) where the

information system may be

accessed by other

parties.

5. The sole fact that a party

makes use of a domain name or

electronic mail address

connected to a specific

country does not create a

presumption that its place of

business is located in that

country. (71)

Assuming that the parties entered into a contract for the sale of goods, CISG article 1 provides that the CISG applies when the parties' places of business are located in different States. (72) How can one determine, in the context of electronic transactions, where the parties are located? The answer under the ECC can be found in article 6 which, as opposed to the CISG, (73) provides a definition of a place of business. (74) Under the Convention, a "place of business means any place where a party maintains a non-transitory establishment to pursue an economic activity other than the temporary provision of goods or services out of a specific location." (75) Some delegates suggested avoiding any definition of place of business and having the otherwise applicable domestic law define the term. The majority, however, was in favor of defining the concept of "place of business" consistent with other several ECC provisions, including those concerning the time and place of dispatch and receipt of electronic communications. (76)

The Convention does not introduce a positive duty to disclose the party's location, something that can be particularly difficult with parties having multiple potential places of business. (77) However, the Convention introduces a rebuttable presumption creating ways to determine a place of business if none is disclosed. (78) If the other party rebuts the presumption or if the party fails to state its place of business when it has more than one of them, the place of business for this party would be the one closest to the contract.

In contrast to the ECC, the CISG indicates that the place of business is the one closest relationship to "performance" of the contract which necessarily creates ambiguity in the interpretation of article 10. (79) While this ambiguous determination has not been included in ECC, the "habitual residence" determination for a natural person is part of the ECC. (80)

For purposes of determining the place of business, ECC article 6(4) also makes clear that "[a] location is not a place of business merely because that is: (a) where equipment and technology supporting an information system used by a party in connection with the formation of a contract are located; or (b) where the information system may be accessed by other parties." (81) Article 10(4) reiterates the concepts by stating that

paragraph 2 of this article [dealing with the time of receipt of an

electronic communication] applies notwithstanding that the place

where the information system supporting an electronic address is

located may be different from the place where the electronic

communication is deemed to be received under paragraph 3 [the place

where the electronic communications is deemed to be dispatched] of

this article. (82)

The issue of defining the party's location in electronic transactions is particularly important. It has been suggested, for example, with reference to the CISG, that

[i]t may be appropriate to consider taking into account the address

from which the electronic messages are sent. Where a party uses an

address linked to a specific country (such as the address ending in

".at", ".fr", ".it", etc.), one could argue that the place of

business should be located in that country. Thus, a sales contract

concluded between a party using an address ending in ".at" and one

using an address ending in ".fr" would have to be considered

international. This solution would have the advantage of

necessarily making the parties aware that the contract may not be a

domestic one. (83)