Sustainable Development as a New Trade Usage in International Sale of Goods Contracts

Abstract

When one buys goods of a particular brand, one does not simply buy a physical object; one buys a lifestyle. When buying a car, one buys jinba ittai, (Mazda); when buying shoes, one wants to just do it, (Nike); when buying coffee, one wants it to be ‘100 percent ethically sourced’, (Starbucks). What this means is that the goods contain for the buyer an emotional dimension. This is referred to as the brand. A brand can carry with it many emotional attributes, several of which may be associated with ethical values. It is not uncommon for such values often to relate to sustainable development. To some, however, it may seem counterintuitive for global brands—and the multinational corporations behind them—and ethical values to go hand-in-hand. After all, the lack of evident interrelation between business and ethics has been famously summed up by Milton Friedman’s statement that ‘the social responsibility of business is to increase its profits’, (Friedman in New York Times (1970), [1]) or, as some paraphrase, that: ‘the business of business is business’ (Schwenzer and Leisinger in Commercial law challenges in the 21st century: Jan Hellner in Memoriam (2007), [2]). Conversely, global business pours enormous sums into creating and maintaining a brand, including associating it with such values including sustainable development (e.g., Apple). This is because having a brand, albeit costly, wields great returns (Maley in 12 Int Trade Bus Law Rev (2009), [3]); Saidov in The law of damages in international sales: the CISG and other international instruments (2008), [4]). In other words, ethical standards may have value (Schwenzer and Leisinger in Commercial law challenges in the 21st century: Jan Hellner in Memoriam (2007), [2]). This becomes also important in the context of international trade in goods. It is naturally the case that for many international sales contracts, ethical values bear little meaning for the parties (Maley in 12 Int Trade Bus Law Rev (2009), [3]). However, how goods are produced has ramifications for their value (Schwenzer and Leisinger in Commercial law challenges in the 21st century: Jan Hellner in Memoriam (2007), [2]). This therefore gives rise to the question: is, indeed, the business of business, business? This chapter examines the parties’ obligations under transactions governed by the 1980 United Nations Convention of Contracts for the International Sale of Goods. This contribution’s main argument is that sustainable development may be deemed an internationally-recognised trade standard forming part of many global brands, which is witnessed at the international level in the plethora of signatories to the United Nations Global Compact. Thus, the standards underpinning sustainability may be used to supplement the content of international sales contracts. This may be achieved through supplementing the conformity requirements that the goods must meet as enshrined in CISG Article 35 in three ways: through an implied term, through the goods’ particulars, or through their ordinary purpose. All of these conformity requirements are discussed.