The role and function of trade usage in modern international sales law

Coetzee, Juana (2015-08)

CITATION: Coetzee, J. 2015. The role and function of trade usage in modern international sales law. Uniform Law Review, 20(2-3):243–270. doi:10.1093/ulr/unv011.

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Trade usage reflects consistent and uniform business practices that are regularly followed in a particular trade. Trade usage has always played an important role in international sales as is evidenced by the lex mercatoria, an a-national system of law that flourished as autonomous law in medieval times but lost its influence after the introduction of the nation state. Today, the existence of the law merchant and the role and function of mercantile custom are clouded in controversy. Regardless of that, trade usage still fulfils a normative function in contracts of sale, so much so that contractual parties are bound by trade usage even in the absence of real knowledge. But what is the rationale for this situation? And what converts a mere consistent trade practice into a binding usage? These are some of the questions that this article seeks to answer. Whether the normative function of trade usage is restricted to contract interpretation and supplementation or whether trade usage can operate independent of party agreement is not clear. The traditional position is that trade usage operates as implied terms of the contract. Lately, however, less emphasis is placed on the requirement of knowledge. International and regional uniform law projects increasingly seem to afford trade usage binding force once a usage is widely followed in international transactions in a particular trade or industry. This article analyses the role and function of trade usage in modern day international sales law with reference to the position under selected national legal systems as well as under various international and regional instruments.

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