Harmonization of Private Rules Between Civil and Common Law Jurisdictions

Harmonization of Private Rules between Civil and Common Law Jurisdictions
Author(s): George A. Zaphiriou

Source: The American Journal of Comparative Law, Vol. 38, Supplement. U. S. Law in an Era of
Democratization (1990), pp. 71-97
Published by: American Society of Comparative Law
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TOPIC I.C.1
GEORGE A. ZAPHIRIOU
Harmonization of Private Rules Between Civil and

Common Law Jurisdictions
INTRODUCTION
Unification is the adoption by two or more jurisdictions of an

agreed set of rules (with few permissible variations) or a uniform
procedure. Harmonization is short of unification and only an ap-
proximation (rapprochement or Angleichung) of rules or a coordina-
tion of policies.' The distinction between "private", as used in the
title, and "public" rules varies in different systems and according to
different theories. For the purposes of this report, private rules in-
clude a reference to rules relating to contracts, torts, sale of goods,
carriage of goods by sea, arbitration, negotiable instruments, busi-
ness associations and private international law.
Unification and harmonization are pursued through similar
means: custom, trade practice, legislative acts or their equivalent,
judicial practice and the writings of legal authors.2 Unification was
achieved by two additional means: international conventions and
the preparation and adoption of a set of rules within the framework
of an organization or association. As unification and harmonization
are similar processes, they should be treated in conjunction, and
they shall be so treated in this report.
Unification and harmonization can take place within a nation,
or between states or provinces or other territorial units within a
composite nation. They can take place within a community of states
such as the European Community or within a region (e.g., the An-
dean Pact countries or the Scandinavian countries) or internation-
ally. To avoid confusion I shall refer throughout this report to
nations as countries and to states of the United States as states.
In Europe and Latin America national unification of preexisting
GEORGEA. ZAPHIRIOUis Professor of Law, George Mason University School of Law.

1. This functional use of "harmonization," "approximation" and "coordination"
avoids the complications raised by the inconsistent use of the terms in the EEC
Treaty. See EEC Treaty, Mar. 25, 1957, arts. 6, 27, 40, 41, 43, 54(3) (g), 56, 57, 63, 70,
75, 99, 100, 101, 102, 105, 111, 112, 113, 145, 220 and 235.
2. See Bodenheimer, "Doctrine as a Source of the International Unification of
Law," 34 Am. J. Comp. L. 67 (Supp. 1986).
71
72 THE AMERICAN JOURNAL OF COMPARATIVE LAW [Vol. 38
customs and written laws was achieved by the creation or reception

of civil and commercial codes.3 In the United States, several areas of
the law, such as admiralty, federal antitrust, copyright, patents and
federal taxation, were unified by federal law, both statutory and ju-
dicial. A different kind of unification was achieved by the adoption
of the Uniform Commercial Code (U.C.C.) by all the states,4 the Dis-
trict of Columbia, Guam and the Virgin Islands. The U.C.C., with
permissible variations, became part of each state's and jurisdiction's
local law. In the United States there are other uniform laws that
are prepared by the Commissioners on Uniform State Laws.5 Some
of these laws are enacted as state laws by a varying number of states
and jurisdictions. Model Laws, sometimes prepared or adopted by
the same Commissioners, serve as prototypes for selective law re-
form leading to unification or harmonization between the private
laws of the adopting states.
Unification or harmonization can be systemic, i.e., occur within
a particular system (or tradition) of law, or between two or more
systems (or traditions) of law. The Civil Law and Common Law sys-
tems were homogeneous at their inception. They were adopted later
by different territorial units, where they were subjected to the anti-
thetical processes of diversification and harmonization.
The Roman Civil Law was originally a uniform system, first of
the Republic and subsequently successively of the Roman and
Greco-Roman Empires. It was enriched by praetorian edicts, the
writings of the classical Roman jurists and systematized by the Jus-
tinian codification. After the Dark Ages, it was rediscovered and
subjected to the commentaries of the glossators and postglossators
and the communis opinio doctorum in the University of Bologna
and other European universities. Before the modern codifications,
this common body of private rules, mixed with local custom and any
written rules, governed many parts of Europe. Finally, the Civil
Law system formed the basis of the private law codifications of Eu-
rope, Latin America, Louisiana, Puerto Rico and Quebec. It was
later transplanted to many countries in Africa and Asia. Diversifica-
tion occurred by the splitting of the Civil Law system into codes and
into code-families, each code-family following predominantly the
French, German or Swiss civil Code or the Siete Partidas. More rad-
ical diversification occurred by political and socioeconomic change.
China, Soviet Russia and the Eastern European countries belong to
a socialist law group, but they have maintained, in varying degrees,
3. Deutsch, "Rechtsysteme, Rechtsvergleichung und Rechtsverheinheit-

lichung," Law In East And West 203, 210-211 (1988).
4. Louisiana did not adopt Article 2 of the UCC on sales.
5. See Handbook of the National Conference of Commissioners on Uniform
State Laws (1979).
1990] HARMONIZATION OF PRIVATE RULES 73
their Civil Law tradition, whenever compatible with the communist

system.6 Across the border systemic unification or harmonization of
private laws of civil law jurisdictions with the same socioeconomic
system, is pursued by academic legal teaching and writing, legal re-
form by statute and consistency in judicial interpretation.
The Common Law has had a shorter but uninterrupted life.
Starting in England it spread over the British Empire and Common-
wealth of nations. It was never totally codified. However, Black-
stone succinctly stated it in his Commentaries on the Laws of
England and David Dudley Field codified it, with civil law elements
and style, in his Civil Code. The Field Civil Code found its way into
the Civil Code of California.7 Even though each of the states and ju-
risdictions of the United States has its own common law, there is a
close affinity between them and an ongoing process of unification
and harmonization. It is this closeness that made possible the syn-
thesis by the American Law Institute of the Restatement of the
Law. The Restatement is comprehensive and has a considerable per-
suasive effect on the federal and state courts. The common law of
each country (e.g., Australia, England, Ghana, Ireland, New Zealand,
Singapore) or state (e.g., California or New York) or other territo-
rial unit (e.g., Ontario) is constantly updated by binding decisions of
the courts and by across the borders persuasive cross-reference to
legislation, court practice and academic writings. The Common
Law, because of its empirical development mainly by court practice,
adapted itself to the drastically changing social and economic cir-
cumstances and has maintained a surprising unity.
Besides the countries and states with a unitary system, there are
countries and states with mixed systems. Some combine a Common
Law and Civil Law tradition (e.g., the Philippine Islands, the Union
of South Africa, Sri Lanka, Louisiana and Puerto Rico). Other
countries combine a Civil Law and Islamic Law tradition (e.g. Egypt,
Iran, Iraq, Syria and Turkey). There are even more complex sys-
tems, such as that of Israel which combines Ottoman and Moslem
law, Jewish religious law and English common law and equity with
modern Israeli legislation. In most of these countries each constitu-
ent element of their law is harmonized selectively with some devel-
opment occurring in other systemically related countries. English
equity, which forms an important part of the Common Law system,
transcends national and state borders and so does shari'a, which is
Islamic divine equity.8.
6. G. Zaphiriou, European Business Law 2-6 (1970).

7. G. Zaphiriou, "Use of Comparative Law by the Legislator," 30 Am. J. Comp.
L. 71 76-77 (Supp. 1982).
8. S. Nasr, Ideals And Realities Of Islam, 93-94, 96 (1966); "The New Civil Code
of Iraq," 22 Geo. Wash. L.R. 176, 181 (1953).
The main focus of this report will be on the unification and har-
monization of rules between civil law and common law countries.
This includes some reference to the unification and harmonization
of rules between the member-states of the European Economic
Community. The report will be divided into two parts. Part I deals
with international unification of rules relating in turn to interna-
tional sales, maritime law, arbitration, private international law in-
cluding transnational judicial cooperation, and other miscellaneous
matters. Part II deals with harmonization.
II. INTERNATIONAL UNIFICATION
A. International Sales
The unification of rules applicable to international contracts for
the sale of goods was achieved by the 1980 Convention for the Inter-
national Sale of Goods.9 This was prepared by the United Nations
Commission on International Trade Law (UNCITRAL). The U.N.
Convention was preceded by a Uniform Law on International Sales
(ULIS) and a Uniform Law on the Formation of International Sales
(ULFIS) prepared by the International Institute for the Unification
of Private Law (UNIDROIT) with headquarters in Rome Italy.
ULIS and ULFIS were incorporated into conventions signed at a
diplomatic conference at the Hague.10
The U.N. Convention was adopted by many more countries than
ULIS or ULFIS. They include countries of diverse political and eco-
nomic systems and in different stages of economic development.
The prospects are that it will be ratified or adhered to worldwide.
However, the domestic systems of these countries were not changed.
They only agreed to apply the unified rules to contracts between
parties having their places of business in different countries that
have adopted the Convention, or whenever the rules are applicable
by operation of a private international law provision." This reflects
a considerable progress from the pre-existing state of affairs in
which the contract law of a particular country or state was chosen
9. Effective as from January 1, 1988. Adopted by the United States and other
countries which include: Australia, Austria, China, Egypt, France, Finland, Hun-
gary, Italy, Lesotho, Mexico, Norway, Sweden, Syria, Yugoslavia and Zambia. See J.
Honnold, Uniform Law For The International Sales Under The 1980 United Nations
Convention (1987); Garro, "Reconciliation of Legal Traditions in the U.N. Conven-
tion on Contracts for the International Sale of Goods," 23 Int'l Lawyer 443, 444
(1989).
10. 834 U.N.T.S. 107, 169; 3 Int'l Legal Mat. 854 (1964) G. Zaphiriou, European
Business Law, 59-65 (1970). The relevant conventions were ratified by Belgium,
Gambia, F.R. of Germany, Israel, Italy, Luxembourg, the Netherlands, San Marino
and the United Kingdom.
11. U.N. Convention on Contracts for the International Sale of Goods, Apr. 11,
1980, art.1, reprinted in 19 Intl Legal Mat. 671, 672 (1980).
by the parties as the proper law of an international contract of sale.

Moreover, the synthesis of rules prevailing in civil law and common
law countries is likely to influence the convergence of laws on sale
of goods.
The U.N. Convention on Sales was complemented by the 1974
U.N. Convention on the Limitation Period in the International Sale
of Goods.12
B. Arbitration
The 1958 New York Convention on the Recognition and En-
forcement of Arbitral Awards13 illustrates an important interna-
tional unification of procedure. The implementation of the
convention achieves two objectives: 1) it imposes the enforcement
by the courts of arbitration clauses submitting disputes to arbitration
in a contracting country and 2) it simplifies and strengthens to an
extreme degree the enforcement of foreign awards. The 1958 New
York Convention was followed by the 1975 Inter-American Conven-
tion on International Commercial Arbitration which fulfills both
these objectives.14 The adoption of these conventions by countries
with different political systems and in different stages of economic
development has had a far reaching effect on worldwide trade; it
also strengthened generally the resolution of disputes by arbitration.
The unification by UNCITRAL of the rules relating to interna-
tional commercial arbitration'5 will have an additional beneficial ef-
fect on international trade. The rules are presently in use by the
arbitration tribunal that deals with the Iran-U.S.A. claims. The
American Arbitration Association enables parties to incorporate by
reference the UNCITRAL rules into their contract and to indicate
whether they wish the American Arbitration Association to act as
appointing authority and/or as administrator of the arbitration pro-
ceedings. UNCITRAL Rule 32(3) provides that parties may choose
to have awards without reasons. Allowing awards without reasons
reflects the general practice in the United States. It also reflects the
practice in connection with quality awards in the United Kingdom in
which, as a rule, no reasons are given. This led to a change of view,
held in some countries of Europe and Latin America, that an award
without reasons is contrary to international public policy.
12. 13 Intl Legal Mat. 952 (1974). See the 1980 Protocol aligning the limitation
convention with the sales convention in 19 Int'l Legal Mat. 696 (1980).
13. Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21
U.S.T. 2517, T.I.A.S. No. 6997. See 9 U.S.C.A. Sec. 201 ff. where there is a list of
countries that have adhered to the convention and their reservations.
14. See text of Convention in 14 Int'l Legal Mat. 336 (1975).
15. 15 Int'l Legal Mat. 702 (1976); Adopted by the U.N. General Assembly by
G.A. Res. 31/98 of December 15, 1976.
Of similar importance, for equivalent reasons, are the UNCI-

TRAL rules on conciliation which were also approved by the U.N.
General Assembly.16 They too can be incorporated by reference in
agreements, either as a whole or selectively. Conciliation rules are
of particular importance in investment or transfer of technology
agreements with enterprises in developing countries.
C. Maritime Law
1. Carriage of Goods by Sea
The unification of the rules that apply to the carriage of goods
by sea under bills of lading, illustrates the attainment of unification
by the operation of custom, commercial practice, the activity of pro-
fessional organizations and finally by international convention.
Some customs created in the Mediterranean and the Atlantic af-
fected worldwide carriage by sea. Commercial practice contributed
to the use of standard clauses in time and voyage charter parties and
in bills of lading. Building on these foundations and on national leg-
islation, the International Law Association and the Comite Maritime
International, in repeated sessions, attended by lawyers, underwrit-
ers, and representatives of ship owners and cargo owners drafted a
set of rules, which were adopted at a Hague meeting in 1921. They
are known as the Hague Rules of 1921. They can be incorporated, as
such, in any time or voyage charter or bill of lading by a clause
known as "clause paramount." They regulate the rights and liabili-
ties of carriers and cargo owners and provide for minimum stan-
dards that have to be observed. The Hague Rules were considered
at the Fifth Diplomatic Conference on Maritime Law held in Brus-
sels in October, 1922. This led to the International Convention for
the Unification of Certain Rules of Law Relating to Bills of Lading,
which was signed in Brussels on August 25, 1924.17 The Hague
Rules, in one form or another, have been adopted by many coun-
tries, including practically all maritime nations.
The Hague Rules were amended by the Visby Rules contained
in a Protocol signed at a Diplomatic Conference in 1968.18 The
amendments adjust monetary values contained in the Hague Rules
to meet past and future inflationary instability; and they provide for
the revolutionary technological changes of containerized trading.
An initiative to revise the Hague Rules was undertaken under
16. G.A. Res. 35/52 of December 10, 1980. Text in 20 Int'l Legal Mat. 300 (1981).
17. 120 U.N.T.S. 155. The Convention entered into force for the United States
on December 29, 1937. In the meantime the rules had been incorporated into federal
law by the Carriage of Goods by Sea Act of 1936, 46 U.S.C.A. Section 1300-1315.
18. They went into force for eleven countries in June 23, 1977. The United
Kingdom adopted them, but not yet the United States They were amended in 1979.
Zaphiriou, "Amending the Hague Rules," J. Bus. L. 12 (1971).
the auspices of the United Nations Conference for Trade and Devel-
opment (UNCTAD) and UNCITRAL. This led to the United Na-
tions Convention on the Carriage of Goods by Sea of 1978 (known as
the "Hamburg Rules").19 The Convention strengthens the rights of
cargo owners and reflects the interests of developing countries. Up
to the present time, it has met with limited success and is not yet in
force.20
2. General Average
The unification of the rules relating to general average was
achieved by the York-Antwerp Rules. The International Law Asso-
ciation adopted the rules in 1890 from a draft provided by the Brit-
ish Association of Average Adjusters. The rules were revised in
1924 and again by the Comite Maritime International in 1950 and in
1974. They are incorporated by reference in time and voyage char-
ters and in bills of lading. They provide uniform rules, regulating
contributions by ship, cargo and freight to make good voluntary sac-
rifices and general average expenditures, undertaken for the com-
mon safety. They have not been generally enacted as law and they
were not adopted by international convention, but they regulate
worldwide as a result of a standard incorporation by reference.
D. Private International Law

Private international law covers transnational jurisdiction, rec-
ognition and enforcement of civil judgments, choice of law and judi-
cial cooperation by letters rogatory and on the service of process and
the taking of evidence abroad. It also includes the unification of pri-
vate rules of substance that will eliminate the need of choice of law
rules.
1. The Principal Players

We saw two players in the transnational unification of private
rules: UNCITRAL and UNIDROIT. This section of the report in-
troduces two additional players: the Hague Conference on Private
International Law and the Organization of American States (OAS).
UNCITRAL was established by the U.N. General Assembly in
1966.21 It has a representative and largely rotating membership of
36 countries and a Secretariat at the Office of Legal Affairs of the
19. See text at 17 Int'l Legal Mat. 608 (1978).

20. Adopted by Barbados, Botswana, Burkina Faso, Chile, Egypt, Hungary, Leba-
non, Morocco, Nigeria, Romania, Senegal, Siera Leone, Tanzania, Tunisia and
Uganda.
21. G.A. Res. 2205 (XXI) of December 17, 1966, 272 U.N. CAOR Supp. (No. 16) at
99, U.N. Doc. A/6316 (1966).
United Nations. UNIDROIT was established as an institute in Rome

in 1926;22 its principal work consists in the unification of private
rules of substance such as ULIS and ULFIS that were discussed
above. The Hague Conference was established at the Hague in
1893;23its principal task are conventions on choice of law rules, en-
forcement of judgments and judicial cooperation.24 The United
States participated actively in the UNICITRAL from its establish-
ment in 1966, but joined the Hague Conference and UNIDROIT as
late as 1964 by authority of the United States Congress.25
OAS is a political organization, but it is also involved in the
preparation of conventions. It is within that framework that the
Convention on Inter-American Arbitration was prepared, negotiated
and ratified. OAS is interested in the unification of private law and
has organized a number of conferences on private international law
in Latin America. The first took place in Montevideo in 1889. Since
1979 Specialized Inter-American Conferences on Private Interna-
tional Law, known as CIDIP, take place every five years.
A fifth player that must be briefly mentioned is the Council of
Europe. The Council of Europe has prepared a number of European
conventions available for use by the whole of Europe less the
COMECON countries. They include a European Convention on
Compulsory Insurance Against Civil Liability Arising out of Motor
Accidents and the European Convention on Information on Foreign
Law, that were both ratified by a number of European countries.
The United States was invited to join the latter convention, but the
Department of State rightly declined, considering that information
as to foreign law should be obtained according to the particular pro-
cedure applicable to each case and not through an administrative
channel.
2. Judicial Cooperation
The two most successful efforts of the Hague Conference were

the preparation and adoption by the United States and several coun-
tries of the 1965 Convention on Service Abroad of Judicial and Ex-
22. See its Charter in International Institute for the Unification of Private Law,
Mar. 15, 1940, 15 U.S.T. 2492, T.I.A.S. 5743.
23. See the Statute of the Hague Conference on Private International Law, Oct.
9-31, 1951, 15 U.S.T. 2228, T.I.A.S. 5710, 220 U.N.T.S. 121.
24. See Collection Of Conventions (1951-1988), edited by the Permanent Bureau
of the Hague Conference (1988).
25. 22 U.S.C. Section 269 (g). See, on the participation of the U.S.: Kearny in 5
Cornell Int'l L.J. 1; Pfund, "United States Participation In International Unification
of Private Law," 19 Int'l Lawyer 505 (1985); Pfund, "International Unification of Pri-
vate Law: A Report on U.S. Participation - 1987-88,"22 Int'l Lawyer 1157 (1988).
trajudicial Documents in Civil and Commercial Matters26 and the

1970 Convention on the Taking of Evidence Abroad in Civil and
Commercial Matters.27 The two conventions provide uniform proce-
dures to be followed by the contracting countries. The Service Con-
vention requires every contracting country to appoint an appropriate
central authority to serve documents originating from another con-
tracting country. The United States appointed as appropriate au-
thority the Assistant Attorney General in charge of the Civil
Division of the Department of Justice. Some countries appointed
their Ministry of Justice or some court official. The Service Conven-
tion was interpreted in the United States as facilitating service
whenever service cannot be otherwise effected according to local
rules of civil procedure.28 The Service Convention was followed by
the 1975 Inter-American Convention on Letters Rogatory and the
1979 Additional Protocol.29 As in the case of the Hague Service Con-
vention, the Assistant Attorney General in charge of the Civil Divi-
sion of the Department of Justice was designated as the central
authority for the implementation of the Inter-American Convention.
The Hague Convention on Evidence enables litigants of con-
tracting countries to obtain evidence in other contracting countries
on matters that are civil and commercial. The convention has raised
several problems. Does "civil" include administrative matters? The
United States says "yes", other countries disagree. Does the conven-
tion cover pretrial discovery? The United states says, again, "yes,"
and the experts of other countries disagree. Can one circumvent the
convention and obtain evidence by relying on local rules of proce-
dure? Some experts thought that one cannot, but the U.S. Supreme
Court held otherwise.30 It is outside the scope of this report to ana-
lyze the conflicts in interpretation and to take sides. They are men-
tioned briefly to stress that unification is bound to give rise to
differing interpretations. It is therefore useful to provide machinery
that will monitor the differences, arrange for meetings of experts to
advise on their resolution and eventually to proceed to a revision of
the relevant convention so that ambiquities can be clarified, as far as
possible.
It is anticipated that the Hague Evidence Convention will be fol-
lowed by a review and eventual ratification by the United States of
26. 16 Int'l Legal Mat. 1339 (1977); Service Abroad of Judicial and Extrajudicial
Documents, Nov. 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638.
27. Taking of Evidence Abroad, Mar. 18, 1970, 23 U.S.T. 2555, T.I.A.S. 7444.
28. Volkswagenwerk Aktiengesellschaft v. Schlunk, 108 S.Ct. 2104, 100 L.Ed.2d
722, 56 U.S.L.W. 4595 (1988).
29. See, text of Convention in 14 Int'l Legal Mat. 339 (1975) and of the Protocol
in 18 Int'l Legal Mat. 1238 (1979). Both have been ratified by the United States.
30. Societe Nationale Industrielle Aerospatiale v. United States District Court,
107 S.Ct. 2542, 482 U.S. 522, 96 L.Ed.2d 4611 (1987).
the 1975 Inter-American Convention on the Taking of Evidence

Abroad and its 1980 Additional Protocol.31
Finally, mention must be made of the 1980 Convention on the
Civil Aspects of International Child Abduction, which was ratified
by the United States.32 The convention provides for judicial and ad-
ministrative cooperation for the return of the child to the parent or
other person having a right of custody or access and for the discre-
tionary allocation of the payment of attorneys fees, expenses and
costs. The central authority in the United States will be the U.S.
Department of State, Bureau of Consular Affairs. This convention
will be followed by an Inter-American convention on the civil as-
pects of child abduction.
3. Choice of Law and Enforcement of Judgments

From 1951 to date, about 32 conventions and protocols, dealing
with judicial cooperation, choice of law and transnational recogni-
tion and enforcement of civil judgments, were prepared and negoti-
ated within the framework of the Hague Conference. Of these, as
we saw, the United States ratified the Service Convention, the Evi-
dence Convention and the Convention on Child Abduction. It is also
a party to the 1961 Hague Convention Abolishing the Requirement
of Legalisation for Foreign Public Documents,33 which has unified
the relevant procedure in about 36 contracting countries. What will
come up soon for consideration by the legal community is the 1984
Hague Convention on the Law Applicable to Trusts and on Their
Recognition,34 to be studied in conjunction with the 1973 Convention
Providing a Uniform Law on the Form of an International Will.35
The rest of the Hague conventions have not been ratified by the
United States and are generally ineffective because of lack of the
requisite ratification.
However, these conventions represent a consensus of expert
opinion. As such they are frequently cited and analyzed in law
books and articles. Moreover, some of their provisions are adopted
by eclectic legislative reform or by incorporation in bilateral conven-
tions. Of particular importance, in the context of this report, is the
1971 Convention on the Recognition and Enforcement of Foreign
31. See the texts of the Convention in 14 Int'l Legal Mat. 328 (1975) and of the
Protocol in 24 Int'l Legal Mat. 472 (1985); Pfund, "International Unification of Pri-
vate Law: A Report on U.S. Participation 1987-88,"22 Intl Lawyer 1157, 1162 (1988).
32. 1980 Convention on Civil Aspects of International Child Abduction, March
26, 1986, F. Reg No. 58.
33. U.S.T. 883, T.I.A.S. 10072 of October 15, 1982.
34. 23 Int'l Legal Mat. 1388 (1984).
35. 12 Intl Legal Mat. 1298 (1973).
Judgments in Civil and Commercial Matters.36 There has been over

the years a steady improvement in the recognition and enforcement
of foreign money judgments.37 The unification and harmonization in
this area was brought about by the need of constructive reciprocity,
contributing to international trade and business.
In practical terms, unobscured by pet theories, choice of law
rules were and still are widely unified or at least harmonized as far
as results are concerned. In every country of the world and in every
state of the United States, contracts are governed by the law chosen
by the parties and failing this by the lex loci contractus or the lex
loci solutionis, immovables by the lex situs and personal status by
the law of the nationality or the law of the domicile. Early unifica-
tion was due to the influence of the statuists, who, during the end of
the 16th century and the 17th century invented private international
law and emphasized the importance of comity. Their influence and
particularly that of Huber reached even the United States.38
Since then, theories as to the basis of private international law
shifted from the statutists' categorization and reference to comity to
a theory of obligation and vested right.Vested right was abandoned
to give room to the local law theory. The local law approach in-
cludes interest analysis which is the dominant theory in the United
States. There is now a tendency to synthesize Savigny's "seat of
transactions" theory with the "substantial connection" test, which
includes by necessity elements of country or state interest and of
party expectations.39 Relative uniformity of method will hopefully
revitalize the drive to unification and lead to a revision of the ex-
isting conventions on choice of law and eventually to their wide
ratification.
Uniformity has been partly fulfilled in the European Economic
Community, helped by the dynamics of integration. Two conven-
tions were ratified by the member states; one deals with jurisdiction
36. 5 Int'l Legal Mat. 636 (1966).

37. See Von Mehren & Patterson, "Enforcement of Foreign Country Judg-
ments," 104 Practicing L. Ist. 17 (1974); Joiner, "The Recognition of Foreign Country
Money Judgments by American Courts," 34 Am. J. Comp. L. 193 (Supp. 1986);
Zaphiriou, "Transnational Recognition and Enforcement of Civil Judgments," 53 No-
tre Dame L.R. 734 (1978).
38. Lorenzen, Selected Articles On The Conflict Of Laws 144 (1947); J. Story,
Commentaries On The Conflict Of Laws 1-38 (1834); G. Zaphiriou, The Transfer Of
Chattels In Private Internation Law 17 (1981).
39. Lagarde, "Le Principe de proximite dans le droit international prive con-
temporain," 1 Recueil des Cours 25-237 (1987) and book review by Zaphiriou, 36 Am
J. Comp. L. 570 (1988); "Symposium on Interest Analysis in Conflict of Laws: An
Inquiry Into Fundamentals With a Side Glance at Products Liability," 46 Ohio St.
L.J. 457-587 (1985); Zaphiriou, "Basis of the Conflict of Laws: Fairness and Effective-
ness," 10 Geo. Mason U. L. Rev. 301 (1988).
and enforcement of civil judgments40 and the other with choice of

law relating to contracts.41 The conventions have raised problems of
adjustment to the internal laws of the member states and also
problems of interpretation. But these are gradually being ironed
out.
4. Legal Guide on International Construction Contracts

UNCITRAL published a guide on rules applying to interna-
tional construction contracts.42 I mention this in a separate subsec-
tion of this report because it illustrates a distinct method of
unification. Instead of agreeing on a fixed set of rules, as in the case
of the Hague Rules or the York-Antwerp Rules, the Guide provides
suggestions. These can be used as a basis for negotiation.
International construction includes turnkey construction in de-
veloping countries. Suggested rules and guidelines prepared within
the framework of UNCITRAL inspire confidence as to impartiality
and are bound to enhance the atmosphere and progress of the nego-
tiations that precede the conclusion of the agreement.
5. Negotiable Instruments
The civil law countries and separately the common law coun-
tries achieved a systemic unification of rules relating to bills of ex-
change, promissory notes and checks.
The League of Nations Geneva Conventions Nos 3313 and 331443
unified the law relating to bills of exchange and promissory notes.
They were adopted by many countries, including most countries of
Continental Europe. The United Kingdom and many countries of
the British Commonwealth followed the British Bills of Exchange
Act of 1882.44 The British Act was used as a model, with many dif-
ferences, for the drafting of the U.S.A. Uniform Negotiable Instru-
ment Law of 1896, which has now been replaced by Article 3 of the
Uniform Commercial Code. The United States which was not a
40. 1968 Brussels Convention on Jurisdiction and Enforcement of Judgments in

Civil and Commercial Matters O.J. Eur. Comm. (No. L 388) (1982) as now amended
and ratified by all the member-states.
41. Convention on the Law Applicable to Contractual Obligations of the Euro-
pean Community, 23 O.J. Eur. Comm. (No. L 388) (1982) as now amended and rati-
fied by all the member-states.
42. Published in book form in Uncitral; Legal Guide On Drawing Up Interna-
tional Contracts For The Construction Of Industrial Works, U.N. Pub. Sales No. E.
87.V.10. (1988).
43. League of Nations Treaty Series, vol. CXLIII, 1933-34, 257, 317, 355, 407; G.
Zaphiriou, European Business Law, 66-74 (1970).
44. "The best drafted Act of Parliament ever passed," Mackinnon L.J. in Bank
Polski v. K.J. Mulder & Co. 1 K.B. 497, 500 (1942).
member of the League of Nations, did not participate in the prepara-

tion of the Geneva Conventions.
UNCITRAL is now working on a draft convention on interna-
tional bills of exchange and international promissory notes.45
III. HARMONIZATION
Part I contains an account of concrete and positive achieve-
ments in unification and indirectly harmonization. These were
achieved mainly by international conventions unifying rules relating
to international transactions or coordinating transnational judicial
and administrative cooperation. Part II is controversial and specula-
tive. It is divided into two Sections: Section A deals with limitations
hindering harmonization and Section B with prospects of
harmonization.
A. Limitations
There is some truth in a favorite English aphorism that the Ro-
man conquest of Britain left only roads and walls built by the Ro-
mans. But, what conquest did not achieve, education did. Scotsmen
educated in Continental European universities during the middle
ages, imported into Scotland the Roman uncodified law. This still
influences the law of contracts, torts, property and inheritance.
English law was to a limited extent affected by the civil law through
the practice of the admiralty and ecclesiastical courts, the writings of
Bracton during the 13th century and the exclusive teaching of Ca-
nonical and Roman Law at the Universities of Oxford and Cam-
bridge until the mid-seventeenth century. Roman Law is still
taught at the Inns of Court in London and is included in part I of
the English bar examinations.
1. Systemic Integrity
What Roman conquest did not achieve in England, other con-
quest or colonization achieved elsewhere. The British generally
respected the existing local law, but they also imported some of
their own law and practice. This led to a coexistence of civil and
common law elements. There were transplants resulting in coexis-
tence, few takeover but no mutations. For example, trust andfidei-
commissum hereditatis coexist in the law of Sri Lanka and attempts
to synthesize them in the law of South Africa have failed.46 Anglo-
American common law and Spanish civil law coexist in the Philip-
45. Report of the Secretary General, U.N. Doc. A/43/405 of June 27, 1988.
46. R. Lee, An Introduction To Roman-Dutch Law 388-90 (5th ed. 1953); Lee,
"The Roman Dutch Law, The Influence of English Law," 1 Colombo L.R. 1 (1969).
pines. On the other hand the common law swamped California and
Texas; few civil law concepts, such as the holographic will and com-
munity of property between spouses, survived. In South America
under different circumstances, the civil law in Guyana was overpow-
ered by the English common law and practice, and was mixed with a
special kind of socialism.47 In spite of the powerful influence of the
U.S. Constitution and of federal law and regulation, civil law and
common law coexist in Louisiana. The Louisiana private law of per-
sons, property, donations and successions, and of obligations (con-
tractual, quasi-contractual, delictual, and quasi-delictual) are
governed by the Louisiana Civil Code of 1808 as revised in 1825 and
1870. The existence of codified civil law bolstered even more the
resistance to inroads by mutations with the common law. The Loui-
siana Civil Code is interpreted with reference to the Code Napoleon
which forms its basis, to French treatises and to decisions of the
French courts.48 Civil law and common law coexist but they show a
reluctance to blend. Louisiana's refusal to adopt Article 2 of the
Uniform Commercial Code of Sales provides clear evidence of that
attitude. The situation seems to be identical in Canada where Que-
bec desires to maintain the "entire integrity" of the Civil Code.49
The reason for the reluctance to harmonize private law rules is
that the common law and civil law are comprehensive systems, hav-
ing demonstrated through the centuries that they can regulate pri-
vate relationships with varying efficiency. The aims that they
pursue may coincide when the socioeconomic systems of two or
more countries are the same, but the means by which these aims are
to be achieved are different. The equitable distribution of property
in case of divorce, adopted by Virginia and other states, has brought
the regime of separate marital property very close to the regime of
community property as far as results are concerned, but the method
used to arrive at these results is different. Another example of
achieving similar results by different methods is the rescission of a
sale of an immovable when sold for an inadequate consideration.
The lesion of the French Civil Code provides for the rescission of
the sale of an immovable by the vendor, when the price agreed is
less than seven tenths of the value of the immovable.50 This is fol-
lowed by the Civil Code of Louisiana, which has reduced the frac-
47. M. Shahabudeen, The Legal System Of Guyana 202-203 (1973); J. Hazard,

"Guyana's Alternative to Socialist and Capitalist Legal Models," 16 Am. J. Comp. L.
507 (1968).
48. Dainow, "Introductory Commentary to the Louisiana Civil Code," La. Civ.
Code Ann. 4-5 (West 1952); Zaphiriou, "Use of Comparative Law by the Legislator,"
30 Am. J. Comp. L. 71, 74-75 (Supp. 1982).
49. R. Cuming, Perspectives On The Harmonization Of Law In Canada 1-58
(1985).
50. Code Civil arts. 1674-1685.
tion to half the value.51 The common law has no similar provision;
inadequacy of consideration, as such, is not a ground for rescission.
However, the same result may be reached by holding that the con-
tract is unconscionable or brought about by coercion or fraud. Fur-
thermore, in case of extreme inadequacy of consideration, the court,
by using its equitable discretion will refuse to grant specific per-
formance to the purchaser.52
2. Structural Difference
Two important limitations discouraging harmonization of rules
are the different uses by civil law and common law jurisdictions of
codification and of judicial precedent. European and Latin Ameri-
can codes contain gnomic and concise provisions. They are comple-
mented and, insofar as possible, modified by statutes. The more
detailed and precise the provisions are, the more difficult it is to
change them. The detailed provisions of the German Civil Code on
delictual liability made difficult the change to stricter liability.53
The vaguer provisions of the Belgian, French, Louisiana and Quebec
Civil Codes made change easier.54 The change in the United States,
which was brought about mainly by the courts, was much easier.
Rules in a code or even in a statute commit for a long time, whereas
a common law rule can be changed or adapted to new circumstances
or to renewed public pressure. It is this desire to avoid commitment
that explains the difficulty encountered in the United States to
agree on a federal statute or to adopt a uniform statute regulating
product liability. Most codes in the United States that deal with pri-
vate law consist of a collection of statutes. On the federal level, the
United States Code comprises statutes that are grouped according to
subject matter under various titles. The Federal Tax Code is more
compact, but is complemented by a maze of regulations. The private
law of each state is partly codified in extensive codes. The Califor-
nia Civil Code is in style closest to the European codes but is in fact
a codification of the common law and can be complemented, practi-
cally amended, by court decisions.55 The Uniform Commercial Code
is likewise in part declaratory of pre-existing law and incorporates
by reference some topics of the common law and also equitable prin-
51. La. Civ. Code arts 2589-2600 (as to sales) and 2664-2666 (as to exchanges)
(West 1988).
52. Seymour v. Delancey, 6 Johnson's Ch. R. 222 (N.Y. 1822).
53. See Von Mehren & Gordley, The Civil Law System 703-780 (1977); 2 Zweigert
Kotz, An Introduction To Comparative Law 372-73 (1987).
54. Palmer, "A General Theory of the Inner Structure of Strict Liability: Com-
mon Law, Civil Law, and Comparative Law," 62 Tul. L.R. 1303, 1314 (1988).
55. Li v. Yellow Cab Co. of California, 13 Cal.3d 804, 814-15 (1975).
ciples. The reference to common law and equity makes the U.C.C.
more flexible than the European codes.
3. Difference in Method
Court decisions are an important source in any common law ju-

risdiction, whereas in civil law jurisdictions they are not. The differ-
ence has been attenuated by Lord Gardiner's L.C. declaration in
1966 that the House of Lords will not be bound by its previous deci-
sions.56 Another important factor that diminished the divergence is
that in civil law countries the consistent practice of the courts (juris-
prudence constante) has acquired an important persuasive influence
on the interpretation of the law and in filling gaps existing in the
codes and in the complementing statutes. In the United States, even
though stare decisis is the prevailing doctrine, the United States
Supreme Court and the Supreme Courts of the states have never
considered themselves bound by their previous decisions. Further-
more, frequent cross-references between federal courts and state
courts, and between federal courts of different circuits and state
courts of different states, to each other's decisions that are not bind-
ing, have introduced into the United States a system of "consistent
practice" similar to that of the civil law jurisdictions.
However, the difference in emphasis still remains. An attempt
in Louisiana to change from jurisprudence constants to stare decisis
has failed.57
Similarly there is a difference in the importance attributed to
the writings of legal authors in civil law and common law jurisdic-
tions. Here again the difference has diminished. There was a time
when the English courts referred only very rarely to living authori-
ties. In contrast, courts in the United States cite frequently the
works of academics. The "doctrine" in civil law jurisdictions is a
recognized source of the law. As was stated at the beginning of this
report, the civil law is a creation of the Roman jurists and of the Eu-
ropean universities, whereas the common law, which includes Eng-
lish equity, is the creation of the courts. It is therefore traditional
that the former should give more weight to the doctrine and the lat-
ter to judicial precedent. Furthermore, the whole texture of the
civil law is more doctrinaire than that of the common law which is
based more on "experience than logic."
56. 1 W.L.R. 1234 (1965).

57. Jagers v. Royal Indemnity Co., 276 So.2d 309 (La. 1973); A. Tate, Jr., "The
Role of the Judge in Mixed Jurisdictions: The Louisiana Experience," 20 Loyola
L.R. 231 (1974).
B. Prospects
Systemic integrity and differences in structure and method have
a negative influence on harmonization. However, as was discussed
above, the differences in structure and method are in the process of
being narrowed. This section of the report will address whether
there is any need for harmonization in specific areas of the law. The
chosen topics relate to business, as they are the most likely to be
harmonized in order to contribute to international trade. The sec-
tion addresses the need for and the prospects of harmonization. Ref-
erence to the harmonization of specific rules is by way of
illustration. A more elaborate exposition would require a special pa-
per for each topic.
1. Contracts
What is needed in connection with contracts is the unification
and harmonization of rules that relate to international trading.
This, as we saw, was accomplished to a great extent by the unifica-
tion of rules that apply to the contractual aspects of the interna-
tional sale of goods and to carriage of goods by sea. The
International Chamber of Commerce has also contributed by defin-
ing terms such as "f.o.b." and "c.i.f" and by collecting uniform cus-
toms and practices relating to commercial documentary credits.
UNIDROIT has prepared a Convention on Agency in the Interna-
tional Sale of Goods, which was adopted by a diplomatic conference
in Geneva in 1983 and was opened for accessions.58
UNCITRAL is at present working on Draft Model Rules on
Electronic Funds Transfers, which when adopted will harmonize na-
tional legislation dealing with electronic transfers of funds.59 This
coincides with work carried out in the United States on the revision
of Article 4A of the Uniform Commercial Code on fund transfers.
UNCITRAL has also completed a draft convention on the liability of
operators of transport terminals.60
In an international diplomatic conference which took place in
Ottawa, Canada in May 1988, two conventions were adopted on in-
ternational financial leasing and on international factoring, prepared
by UNIDROIT.61
It is submitted that differences between civil and common law
jurisdictions on the law of contract provide an interesting subject for
58. See text of Convention at 22 Int'l Legal Mat. 246 (1983).

59. Report of the Secretary-General U.N. Doc. A/CN.9/WG.IV/WP.37 of May 3,
1988.
60. U.N. Doc. A/CN. 9/298 of February 8, 1988.
61. Pfund, "International Unification of Private Law: A Report on U.S. Partici-
pation - 1987-88," 22 Int'l Lawyer 1157, 1163 (1988).
comparison and improvement by reform, but need not be harmo-

nized. I have had the opportunity to summarize elsewhere62 the
main differences between the law of contract in civil and common
law countries. They arise in connections with consideration, breach
or fault, impossibility of performance, the defense of the incomplete
contract, rescission and restitution, penalties, exculpatory clauses
and the formal request to perform. In international business, the
potential conflicts between the two systems can be minimized by
spelling out in the transnational commercial agreement the rights
and obligations of the parties and by providing agreed solutions to
future eventualities. A choice of law clause combined with a choice
of forum or arbitration clause is likely to avoid any conflict. Skillful
drafting will not be able, in some cases, to avoid provisions of inter-
national public order with which the contract is substantially con-
nected. Such matters as currency restrictions, the payment of
import duties or taxes and strategic limitations on the export of
goods and on transfer of technology, represent important national
interests and cannot be either harmonized or contracted out.
In spite of some traditional differences between civil and com-
mon law jurisdictions, some spontaneous convergence occur between
them. Civil law jurisdictions, for example, prefer to order specific
performance in the case of non-performance by the seller of goods
unless the particular goods are unavailable. On the other hand,
common law jurisdictions traditionally prefer to provide for the pay-
ment of damages. Each approach has its advantage: specific per-
formance ensures that the expectation of the parties is fully
satisfied, while damages enable the seller to exercise an option be-
tween performance and payment of damages and thereby contribute
to an efficient allocation of resources. There is something to be said
about discarding the traditional test of adequacy of legal remedy in
favor of what, under the prevailing circumstances, is the appropriate
remedy.63 The Hague Convention on ULIS did not tamper with the
difference by simply providing that this is a question of remedy to be
decided by the forum.64 The U.N. Convention on Contracts for the
International Sale of Goods leans in favor of specific performance.65
This preference may be frustrated by the forum taking the view that
this is a matter of remedy to be decided according to the law of the
forum and not the international convention.
Discarding the traditional equitable test that specific perform-
ance should be ordered when the goods are unique and the legal
remedy is inadequate, in favor of the appropriate remedy, represents
62. See G. Zaphiriou, European Business Law 43-54 (1970).
63. See G.H. Treitel, Remedies For Breach Of Contract 63-74 (1988).
64. ULIS Article vii(i); G. Zaphiriou, European Business Law 61 (1970).
65. Articles 46 and 62.
a spontaneous harmonization between the civil law and the common

law approach. It is a harmonization that is brought about by the
pursuit of a common objective. Likewise, the preference for specific
performance agrees with the policy objectives of a country with a
planned economy and state enterprises. What matters is the per-
formance of the contract rather than the payment of damages. The
law in the U.S.S.R., for example, favors specific performance.66
An attempt to harmonize the contract law of the twelve mem-
ber states of the European Community was undertaken by a group
of lawyers that formed a Commission on European Contract Law.
Their task will be to prepare a non-binding restatement of the rules
similar to the American Restatement on the Law of Contract.67 The
Commission is faced by a difficult task. The American Restatement
on the Law of Contract reflects tendencies in 49 states and the Dis-
trict of Columbia. These are all jurisdictions that have a strong com-
mon law basis. Any diverging tendencies of Louisiana and Puerto
Rico can be easily diluted. The situation in the European Commu-
nity is quite different. The ten member states that have a civil law
system belong to different code families and the two common law
countries, Ireland and the United Kingdom, have strong common
law traditions and ties.
There is a UNIDROIT project for the preparation of Consoli-
dated Principles for International Contracts.68 This is a more realis-
tic project because it relates to transnational contracts. Rather than
attempting to harmonize institutionally the domestic rules of a
number of jurisdictions, the project will synthesize rules of jurisdic-
tions that are representative of different legal and socioeconomic
systems. These rules will form part of a separate non-binding code
to be incorporated by reference in transnational contracts.
UNIDROIT can use for the project the research that was carried out
by R.B. Schlesinger, W.J. Wagner and others in connection with the
formation of contracts, 69 as well as the extensive research that was
undertaken within the framework of UNIDROIT and UNCITRAL
for the preparation of ULIS, ULFIS and the 1980 Convention for
the International Sale of Goods. The Czechoslovak International
Trade Code of 1963 in combination with recent legislation intro-
duced in Eastern Europe, the Soviet Union and the Peoples Repub-
lic of China to facilitate international trade, will be representative of
the socialist position.
66. E.A. Farnsworth & V.P. Mozolin, Contract Law In The USSR And The
United States 148, 310 (1987).
67. Lando, "European Contract Law," 31 Am. J. Comp. L. 653, 656-57 (1983).
68. UNIDROIT Study L - Doc 40 (May 1987) prepared by the UNIDROFT
Secretariat.
69. Formation Of Contracts (Gen. Ed. R.B. Schlesinger, 1968).
2. Torts
This is an area of the law in which, more than other areas, tech-
nological development and socioeconomic changes and dynamics led
to a spontaneous parallelism between civil and common law jurisdic-
tions. Parallelism is a better term than harmonization, because the
latter implies a concerted effort to harmonize in order to avoid con-
flicts or distortion of competition. The parallel changes came about
in the pursuit of common objectives. While they follow the same di-
rection, they do not necessarily coincide in time. They were effected
by the enactment of the European codes, by statutes, court decisions
and the doctrine. There are three main parallel changes: the evolu-
tion from specific delicts or torts to a general principle of delictual
or tortious liability, the change from contributory negligence to com-
parative negligence, and the movement from fault to non-fault or
strict liability.
First, the concept of special torts changed to a general concept
of tortious liability. In the common law this came about by the grad-
ual dismantling of the forms of action70 during the industrial revolu-
tion and the articulation by the courts of an expanding concept of
negligence.7' A similar evolution extending over many more centu-
ries occurred in Roman Law based systems, starting from the lex
Aquilia and other special delicts to the general provisions on delic-
tual liability of the Prussian, French, Belgian, Quebec, German,
Greek, Italian, Mexican, The (New) Netherlands and Swiss civil
codes.72
Second there has been a change form contributory negligence to
comparative negligence. The term "comparative negligence" should
now be changed to comparative responsibility in order to include the
more recently added apportionment of liability between plaintiff
and defendant in cases of strict liability.73 In the United States,
comparative negligence was first applied by federal law.74 It was fol-
lowed later by a majority of states and jurisdictions. In most cases
the change was made by legislation, but there were a few states
which switched from contributory negligence to comparative negli-
70. Even though "they still rule us from their graves," F. Maitland, Forms Of
Action 296 (1936).
71. P. Winfield, Law of Tort 404 (1950); Winfield, "The History of Negligence in
the Law of Torts," 42 L.Q.R. 184 (1926); W. Prosser & R. Keeton, On Torts 160-61
(1984); Donoghue v. Stevenson [1932] A.C. 562; J'Aire Corp. v. Gregory, 24 Cal. 3d
799, 157 Cal. Reptr. 407, 598 P.2d 60 (1979).
72. See extracts in Lawson & Markesinis, Tortious Liability For Unintentional
Harm In The Common Law And The Civil Law Vol. 2 (1982).
73. Daly v. General Motors Corp., 20 Cal.3d 725, 144 Cal.Rptr. 380, 575 P.2d 1162
(1978); Prosser & Keeton, On Torts 478 (1984).
74. Federal Employer's Liability Act, 45 U.S.C. Section 53 (promulgated in 1908);
Merchant Marine Act of 1920, 46 U.S.C. Section 688 (Jones Act).
gence by court decisions. I have dealt with this change elsewhere,75

showing that the Supreme Court of California made the change by
using a retrospective and prospective comparative law analysis.76
England adopted comparative negligence in the widespread law re-
form that followed World War II.77 The civil law jurisdictions intro-
duced comparative causation or fault during the 19th century.78
Third, there has been a change from fault to non-fault or strict
liability. This started by the law relating to accidents in the work-
place. It was then gradually extended to injuries and physical dam-
age caused by railways, gas and electricity, automobiles, airplanes,
spaceships and more generally by products.79 The progression came
about in different countries at different times by the impact of in-
dustrialization, the evolution of technology and by the counter-
vailing forces of management, labor, consumers and industry.
In the United States, the evolution from negligence and breach
of warranty to strict product liability was brought about by Justice
Cardozo,80Justice Traynor,81 Dean Prosser,82 the courts and legisla-
tion.83 From the United States it was taken over by the industrial-
ized world.84 It is now established, but subjected to ex post facto
rationalization by moralists and economists, while the underlying
forces will strike the decisive balance.
Indicative of this quest for the proper allocation of resources
and of fairness is the debate that is raging in the European Commu-
nity. There, the E.C. Council issued Directive 85/374/EEC of 25 July
1985.85 Article 7(e) of the Directive provides that a producer will
not be liable, if among other non-controversial defenses, he proves:
75. G. Zaphiriou, "Use of Comparative Law by the Legislator," 30 Am. J. Comp.

L. 71, 88-90 (Supp. 1982).
76. Li v. Yellow Cab Co. of California, 13 Cal.3d 804, 532 P.2d 1126, 119 Cal. Rptr.
858 (1975), where sec. 1714 of the California Civil Code was compared with Art. 1383
of the Code Napoleon and Art. 2295 (now 2315) of the Louisiana Civil Code.
77. Law Reform (Contributory Negligence) Act, 1945.
78. Austrian Civil Code of 1811, Art. 1304; Swiss Code of Obligations of 1911 Art.
44; French law: 'faute commune" about 1879.
79. See 2 K. Zweigert & H. Kotz, An Introduction To Comparative Law 342-377
(1987).
80. MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916).
81. Escola v. Coca-Cola Bottling Co. of Fresno, Cal.2s 453, 150 P.2d 436 (1944);
Greenman v. Yuba Power Products Inc., 59 Cal.2d 57, 377 P.2d 897 (1963).
82. Prosser, "The Assault Upon the Citadel," 69 Yale L.J. 1099 (1960); Prosser,
"The Fall of the Citadel," 50 Minn. L. Rev. 791 (1966).
83. U.C.C. Sections 2-318, 2-719(3); Restatement of the Law of Torts (Second),
Section 402A non-binding but widely influential on courts and legislation; see, e.g.,
Louisiana Products Liability Act, La. R.S. 9:2800.51 (1988).
84. Palmer, "A General Theory of the Inner Structure of Strict Liability: Com-
mon Law, Civil Law and Comparative Law," 62 Tul. L.R. 1303 (1988); Schroth,
"Products Liability," 26 Am. J. Comp. L. 67 (Supp. 1978); Zaphiriou, "Use of Compar-
ative Law by the Legislator," 30 Am. J. Comp. L. 71, 91-92 (1982).
85. O.J.E.C. No L 210/29 of 7 August 1985.
"that the state of scientific and technical knowledge at the

time when he put the product into circulation was not such
as to enable the existence of the defect to be discovered."
According to Article 15(b) of the Directive, the above quoted
provision can be derogated from by a member state by legislation
providing that "the producer will be liable even if he proves that the
state of scientific and technical knowledge at the time when he put
the product into circulation was not such as to enable the existence
of a defect to be discovered."
At the end of 1988, the European Community filed an action in
the European Court of Justice against nine member states for not
enacting the imposed legislation and against two, Italy and the
United Kingdom, for implementing the directive but leaving loop-
holes. Of the twelve member states only Greece complied.
It is submitted that in the United States and in the rest of the
world the debate will mainly center as to whether the compliance by
the producer with the state of the art at the time when the design is
used or the product is produced amount to good defenses. It is on
this question that the conflict between blameworthiness versus allo-
cation of risks and costs reaches its acutest form. In addition to or-
ganized social forces, econometrics will have to determine how the
regulation of liability will affect prices and thereby trade. Thus, the
question becomes a matter of harmonization by concerted action
rather than spontaneous parallelism in order to avoid misallocation
of resources and distortion of competition. This explains the institu-
tional harmonization that is taking place in the European Commu-
nity. Up to the present time attempts in the United States to reach
agreement on federal legislation have failed. There is, however, a
Model Uniform Product Liability Act,86 available for voluntary use
by the states.
3. Business Associations
Business associations is a generic term covering agency, partner-
ships and corporations. Commercial custom and business practice
had a strong influence on all three. They were regulated by rules
that were part of the law merchant of Europe that found its way
into the commercial codes of Europe and the Americas. The law
merchant was absorbed into the common law particularly during the
18th century. As a result general partnerships (societe en nom col-
lectif, offene Handelgesellschaft), limited partnerships (societe en
commandite, Kommanditgesellschaft) and corporations in civil and
common law jurisdictions display common functional characteristics.
86. See 3 L. Frummer & M. Friedman, Products Liability Section 9.04 (1989).
Such characteristics include the unlimited liability of general part-

ners, the limited liability of limited partners, the fact that corpora-
tions have stock and issue bonds, that stock may be offered or may
not be offered to the public and that there is a type of corporation
that imposes limitations on the transfer of stock and is known as a
company with limited liability or responsibility or a private limited
company or a closed corporation. Some of the functional character-
istics have their origin in the law merchant and were made more so-
phisticated by the exigencies of business and common
microeconomic objectives. There is therefore a common core of har-
monized rules that apply to business associations.
However, there are differences from country to country, be-
cause of variations in the application of constitutional principles, the
existence or not of international treaties such as treaties of estab-
lishment, the impact of federal law or community law and diver-
gences in economic planning and administrative regulation. To
these important diversifying factors must be added a difference in
corporate philosophy between common law and civil law jurisdic-
tions: In civil law countries, partnerships were and still are legal en-
tities and corporations exist by contract and agency and not be
sovereign grant. On the other hand, in England partnerships were
treated as aggregate and in the 17th century corporations were cre-
ated as entities by a concession of the sovereign. As a result, Anglo-
American law applies the entity theory to corporations and the ag-
gregate theory to partnerships. Again, business exigencies have nar-
rowed down the practical implications of the different legal theories;
procedurally a partnership is treated as an entity in the United
Kingdom and in the United States, even though jurisprudentially it
is considered an aggregate. Nevertheless, the Uniform Partnership
Act and the Limited Partnership Act that were adopted by practi-
cally every state and jurisdictions of the United States have not been
adopted by Louisiana. Louisiana has civil law types of partnerships.
There are two important differences as to harmonization of cor-
poration law in the European Community and the United States:
first, the European Community has no community supervision over
corporations, whereas the United States has rigorous federal super-
vision carried out by the Securities Exchange Commission under
federal legislation and regulations. Second, Council Directives, har-
monizes important matters concerning partnerships and particularly
corporations by approximation of rules and coordination of policies.
In contrast, the United States lets the states compete freely as to the
terms that they afford to corporations incorporating in each state.
The United States does not care if perhaps forty percent of corpora-
tions incorporate in Delaware because costs are lower and the rules
more liberal. Competition between the states to liberalize their
rules contributes to corporate efficiency. Pervasive and across the

borders equitable principles relating to the fiduciary relationship be-
tween officers and stockholders and increasingly between majority
stockholders and minority stockholders provide protection to the
stockholders. The Securities Exchange Commission protects the
public in sizable corporations. In closed corporations safeguards are
inserted in the commonly used stockholders' agreement. Let risk
takers take risks and risk avoiders increase the safeguards.
In the United States some harmonization is achieved between
state corporate legislation as a result of the competition and the
Model Business Corporation Act. Competition first creates dishar-
mony, but eventually leads to alignment. The Model Business Cor-
poration Act was prepared in about 1944 by members of the Chicago
Bar on the basis of the Illinois Business Corporation Act. The Illi-
nois Act was based in turn on a Uniform Business Corporation Act
that had been recommended as far back as 1928 by the National
Conference of Commissioners on Uniform State Laws and that had
influenced some important corporate law reforms. The Uniform
Business Act has been withdrawn and should not be confused with
the Model Business Corporation Act. The Model Act was taken
over by the corporate laws committee of the American Bar Associa-
tion. It has been revised from time to time within the framework of
the American Bar Association and the American Law Institute that
prepares the American Restatement of the Law. Its last revision
was in 1984. The Model Business Corporation Act is eclectically fol-
lowed by many states, including Virginia in its recent 1986 revision
of corporation law.
The European Community's harmonization of companies (which
include partnerships and corporations) is carried out under art. 100
of the EEC Treaty, which provides for the approximation of legisla-
tive and administrative rules of the member states. There is also the
specific provision of art. 54(3) (g) of the same Treaty which provides
that the E.C. Council and E.C. Commission will coordinate the safe-
guards which the national legislation of member states will apply to
members of the companies and the public.87 The harmonization is
effected by directives proposed by the E.C. Commission, discussed in
the European Parliament and issued by the E.C. Council. The direc-
tives are obligatory and the member states must comply by aligning
their national legislation and administrative regulations. The ob-
jects of company harmonization in the European Community are to
87. R. Buxbaum & K. Hopt, Legal Harmonization and the Business Enterprise
(1988); G. Zaphiriou, European Business Law, 113-14 (1970); Zaphiriou, "Approxima-
tion of Company Law in the Common Market," J. Bus. L. 280 (1968).
contribute to integration and to the free movement and right of es-

tablishment of companies.
Up to the time of writing88 the E.C. Council had issued seven
directives89 which dealt with the following matters:
First Directive90: Publicity, ostensible authority or
organs, nullity.
Second Directive9l: Deals only with stock companies
and maintenance of capital.
Third Directive92: Merger of stock companies
within a member state.
Fourth Directive93: Content and publication of
accounts and annual report.
Fifth Draft Directive94: Structure of stock companies
with employee participation
(codetermination). This is a
delicate matter debated within
the Community and the
European Parliament and this
explains the delay in issuing the
directive.
Sixth Directive95: Splitting-up of stock companies
by takeovers and reincorporation.
Seventh Directive96: Accounts of group companies.
Eighth Directive97: Admission and qualification of
auditors.
Proposed, but not yet approved directives, deal with such mat-
ters as the law relating to group companies, transnational merger,
publicity of branches, information and consulting procedures for em-
ployees of a subsidiary (known as the "Vredeling Directive" and
now virtually defunct) and the statute of the European Stock Com-
pany (a supra-national community company).
IV. CONCLUSIONS
The international unification of private rules between civil and

common law jurisdictions is achieved by agreeing on a set of rules
88. October 1, 1989.

89. See texts in CCH, 1 Common Market Reporter 1351A-1433. (1988).
90. O.J. L 65/8 OF 14 Mar. 1968.
91. O.J. L 26/1 of 30 Jan. 1977.
92. O.J. L 295/36 OF 20 Oct. 1978
93. O.J. L 222/11 of Aug. 1978.
94. CCH, 1 Common Market Reporter 1401-1409 (1988).
95. O.J. L 378/47 of 31 Dec. 1982.
96. O.J. L 193/1 of 18 Jul. 1983.
97. O.J. L 126/20 of 12 May 1983.
representing to a great extent a synthesis or compromise of civil and

common law rules. The set is then made applicable by multilateral
treaty, as in the case of international contracts for the sale of goods,
or is contractually incorporated by reference, as in the case of the
Hague Rules, the York-Antwerp Rules and the UNCITRAL rules
on international commercial arbitration. The Hague Rules also be-
came part of a multilateral treaty and were enacted by many juris-
dictions as part of their internal law for application to the
international carriage of goods by sea under bills of lading. Another
form of unification, harmonization or coordination is the unification
of procedures for judicial and administrative cooperation. This was
also achieved by multilateral conventions dealing with service
abroad of judicial and extra judicial documents in civil and commer-
cial matters, the taking of evidence abroad in civil and commercial
matters and the civil aspects of international child abduction. Con-
ventions on choice of law and on the transnational recognition and
enforcement of civil judgments have not been generally ratified and
enforced. However, they represent a consensus of experts and they
do influence the harmonization of rules of choice of law and of
transnational recognition and enforcement of civil judgments.
Principal players in international unification have been UNCI-
TRAL, UNIDROIT, the Hague Conference on Private International
Law, the Organization of American States, the Council of Europe,
the Comite Maritime International and the International Law Asso-
ciation. The United States is participating actively in all these orga-
nizations and many American lawyers are members of the
International Law Association.
Harmonization is short of unification and consists in the approx-
imation of rules and coordination of policies. Systemic harmoniza-
tion is widespread within the same civil law family or even between
different civil law families and within the Common Law. It is
achieved by legislative reform, the practice of the courts and aca-
demic teaching and writing. It is not so widespread between civil
and common law jurisdictions. The civil law and the common law
traditions and systems take pride in having successfully regulated
human relationships for many centuries and wish to preserve their
integrity. Nevertheless, harmonization is achieved in some areas of
the law mainly spontaneously, in order to attain common socioeco-
nomic objectives by the use of means and methods typical to the
civil law or the common law. Such intersystem harmonization that
prevails in the functional characteristics of agency, partnerships and
corporations was brought about by the law merchant and by the
pursuit of the common business objectives in private enterprise
systems.
The United States has a federal administrative supervision of
corporate activities, but otherwise encourages competition between

states in lowering costs and liberalizing rules relating to the incorpo-
ration and operation of corporations. In contrast, the European
Community, following the European tradition, leaves corporate su-
pervision to the courts. This lack of administrative supervision is
compensated by rigorous harmonization by directives of the private
and public rules of the corporation law of the member states, in or-
der to contribute to European integration, to ensure freedom of es-
tablishment and of movement of corporations and to protect
stockholders and the public.

Harmonization of Private Rules Between Civil and Common Law Jurisdictions

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Harmonization of Private Rules between Civil and Common Law Jurisdictions

Author(s): George A. Zaphiriou

Harmonization of Private Rules Between Civil and

Unification is the adoption by two or more jurisdictions of an

GEORGEA. ZAPHIRIOUis Professor of Law, George Mason University School of Law.

customs and written laws was achieved by the creation or reception

3. Deutsch, "Rechtsysteme, Rechtsvergleichung und Rechtsverheinheit-

their Civil Law tradition, whenever compatible with the communist

6. G. Zaphiriou, European Business Law 2-6 (1970).

II. INTERNATIONAL UNIFICATION

by the parties as the proper law of an international contract of sale.

Of similar importance, for equivalent reasons, are the UNCI-

D. Private International Law

1. The Principal Players

19. See text at 17 Int'l Legal Mat. 608 (1978).

United Nations. UNIDROIT was established as an institute in Rome

The two most successful efforts of the Hague Conference were

trajudicial Documents in Civil and Commercial Matters26 and the

the 1975 Inter-American Convention on the Taking of Evidence

3. Choice of Law and Enforcement of Judgments

Judgments in Civil and Commercial Matters.36 There has been over

36. 5 Int'l Legal Mat. 636 (1966).

and enforcement of civil judgments40 and the other with choice of

4. Legal Guide on International Construction Contracts

40. 1968 Brussels Convention on Jurisdiction and Enforcement of Judgments in

member of the League of Nations, did not participate in the prepara-

47. M. Shahabudeen, The Legal System Of Guyana 202-203 (1973); J. Hazard,

Court decisions are an important source in any common law ju-

56. 1 W.L.R. 1234 (1965).

58. See text of Convention at 22 Int'l Legal Mat. 246 (1983).

comparison and improvement by reform, but need not be harmo-

a spontaneous harmonization between the civil law and the common

gence by court decisions. I have dealt with this change elsewhere,75

75. G. Zaphiriou, "Use of Comparative Law by the Legislator," 30 Am. J. Comp.

"that the state of scientific and technical knowledge at the

Such characteristics include the unlimited liability of general part-

rules contributes to corporate efficiency. Pervasive and across the

contribute to integration and to the free movement and right of es-

The international unification of private rules between civil and

88. October 1, 1989.

representing to a great extent a synthesis or compromise of civil and

corporate activities, but otherwise encourages competition between

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