Dealing with informational asymmetries under the proposed CESL and CISG

Abstract

PurposeThis paper aims to explore the way in which informational asymmetries between the two parties to a contract for the sale of goods are dealt with under two legal regimes designed for transnational sales contracts: the UN Convention on the International Sale of Goods (CISG) and the proposed Common European Sales Law (CESL).Design/methodology/approachHaving considered the different types of informational asymmetry that can exist in a contract of sale, the paper undertakes a doctrinal legal analysis of the relevant provisions first in the CESL and then the CISG to identify what, if anything, has been done to deal with informational asymmetries. The paper primarily exposes and analyses these rules and compares the approaches taken under both legal regimes.FindingsThe CESL has a more detailed set of rules which address informational asymmetries. This might be because the genesis and context of the CESL (being limited to the EU) might make it easier to agree on more extensive rules. However, the CESL has not yet been adopted.Practical implicationsA seller in a contract of sale governed by CESL will be subject to more detailed (and onerous) requirements when it comes to the disclosure of information.Originality/valueThis is a first attempt to compare the treatment of informational asymmetries under the CISG and CESL, and will be of interest to scholars of both transnational and EU private law.