CYIL 2012

LARRY A. DĎMATTEO CYIL 3 ȍ2012Ȏ methodology, and it is only when they fail to provide a solution is there recourse to the common law. The CISG core interpretive methodology is recourse to general principles-expressed or implied. 26 It also refers to the use of trade usage, but there is an ongoing debate over whether local or merchant usage is available in the interpretation process because of the Article 9(2) mandate that the usage must be “international in character”. Another difference between U.S. and Czech law, and between the civil and common law systems in the area of commercial or contract law, is the recognition of general principles. In the common law the dominant principle is the principle of private autonomy or freedom of contract. The fairness of the contract is generally not considered to be within the authority of a court to recognize or provide a remedy. However, there has been a split between U.S. and English law in this area. The principles of good faith and fair dealing are recognized in UCC Articles 1 and 2. Article 1, Section1-203 states that: “Every contract or duty within this Act [Code] imposes an obligation of good faith in its performance or enforcement.” In Article 2 (sale of goods), good faith is described as “honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” 27 As importantly, those principles have been used by analogy and have become a part of the American common law, at least to a much greater extent than is found in English common law, which continues to reject the principle of good faith. In contrast, Czech law, as part of the Germanic civil law family, views the general or underlying principles of the Commercial Code as not only the principle of “autonomy of will”, but also the principles of “equality of the parties to commercial transactions”, and the “protection of the weaker party”. 28 The closest American law comes to recognizing these later principles is the doctrine of unconscionability (gross unfairness) which is found in Section 2-302 of the UCC and which simply states that if “a contract or any clause of the contract [is deemed to be] unconscionable at the time it was made the court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid an unconscionable result.” The problem presented by this provision is that no definition of unconscionable is given. The language of this doctrine does not make a distinction between merchant or commercial transactions (B2B) or consumer transactions (B2C). Therefore, since the UCC covers both B2B and B2C transactions, the unconscionability principle is available to the weaker party in both types of transactions. In reality, the American courts have used it solely as a consumer protection principle. The doctrine has rarely ever been used to rescue a party from an unconscionable contract in B2B transactions even when the bargaining and informational asymmetries are as great as in a B2C 26 Larry DiMatteo & André Janssen, “Interpretive uncertainties: methodological solutions for interpreting the CISG”, Dutch Journal of Commercial Law 2 (2012), 52. 27 Article 1, § 2-203(1)(b). 28 Elischer, Frinta & Pauknerová, Private Law at 88-89.

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