Here Lions Roam: CISG As the Measure of a Claim’s Value and Validity and a Debtor’s Dischargeability
34 Emory Bankruptcy Developments Journal 461 (2018)
60 Pages Posted: 22 Sep 2018 Last revised: 19 Jan 2020
Date Written: 2018
Enjoying an “uneasy coexistence,” the United Nations Convention on the International Sale of Goods (“CISG”) and the Uniform Commercial Code (“UCC”) converge in some details. Yet, regardless of their many similarities, CISG and the UCC are not wholly alike in certain key requirements and in their practical effect. Unfortunately, federal and state courts throughout the United States have only imperfectly and haphazardly heeded this basic verity. Over time, their occasional myopia has spawned an amorphous body of law characterized by more glaring omissions and errata than nuanced explication of international law’s venerable commercial code. Broad in its scope, often encompassing even upon commercial relations with meager international connections, CISG nearly seethes, as a slew of contractual rights stand endangered by the judiciary’s blithe indifference -- and await a most potent and inescapably lethal attack.
Slowly but surely, precisely due to the preeminent role of contracts in the determination of a debtor’s liabilities in cases filed under the Bankruptcy Code (“Code”), the defects so endemic in CISG’s jurisprudence have already arisen within a handful of bankruptcy courts. Some judges and less than a handful of lawyers have perceived this troubling fact; far more have barely cared or noticed. Indeed, if America’s courts fail to apply CISG with the requisite rigor and instead adhere to its mangled precedent, few debtors will be able to enjoy a secure reprieve, and countless reorganizations, both unfinished and completed, will be haunted by a terminal uncertainty. In four substantive parts, this article seeks to head off this growing danger, laying out in precise detail when and where CISG, not the UCC, should govern a bankruptcy dispute and how it does so. In the simplest terms, a forward path is charted here so as to ensure a treaty and a code can fulfill their animating purposes.
For now, this article is the very first to consider the Code’s and CISG’s relationship, a fact noted with approval in such pieces as J. Lyn Enrikin, The Death of Common Law, 42 Harvard Journal of Law & Public Policy 351 (2019).
Keywords: UCC, CISG, Bankruptcy, International Trade, Parol Evidence, Mirror Image Rule, Commercial Code, 523, Dischargeability, Value, Validity, Claim
JEL Classification: K1, K12, K19, K10, K22, K29, K30, K35, K39, K40, K41, K49
Suggested Citation: Suggested Citation