The Role of Good Faith in the CISG A Comparative Analysis of Two Jurisdictions: The USA and Germany

This study explores the historical significance of ‘good faith’ in the Confederation of International Sale of Goods (CISG) and its application in the United States and Germany. The concept of ‘good faith’ has been a cornerstone of international trade, and its interpretation under the CISG remains a complex and debatable issue, especially in predicting the exactness of the Convention's ‘good faith’ approach to international treaties. Good faith tends to suppose that the parties to a contract negotiate terms and perform ex pactis contracta with due probity and sincere consideration of the justified expectations of the other. The CISG is attributed to the absence of a reasonably plausible definition for the doctrine of good faith, and this absence has kept divergent notions of good faith alive under contract law. To illustrate, Germany, which has a civil law system, perceives good faith as a principal obligation to assist and maintain balance, thus with complete discretion for the courts to amend or add to equity-bound contracts. In contrast, unlike civil law, the United States common law is practice-oriented, with a tendency to emphasize the breach of contract and its practical approach defined as the ‘climate of reasonable commercial’. The differences associated with the interpretation of good faith stem from the compromises made in the drafting of the CISG, in which good faith is more of a principle for the interpretation of the Convention and not an obligation to the parties to the contract. Because of this, the different domestic approaches sown in deep roots of legal ambiguity onto international commerce, which is the exact contradiction of the CISG's intention to offer a single, harmonized legal structure for cross-border contracts. The contrast between Germany's flexible, equity-oriented approach and the more transactional and restrictive approach of the United States introduces legal uncertainty into international trade. This situation is at odds with the CISG's goal of providing a more streamlined, borderless legal framework for contracts, underscoring the urgency of the issue. The thesis strongly advocates for good faith to be considered a guiding principle within the CISG, rather than just a means of interpretation. This approach can effectively align with the Convention's intentions and, in turn, foster stronger and more reliable international commercial relations.