Interpreting international contracts for sale in New Zealand

Abstract

The parol evidence rule has been described as an "embarrassment for theadministration of modern transactions". Nevertheless, in New Zealand it continues toclosely influence admissibility of evidence in disputes concerning contractualinterpretation. Together with the plain meaning rule, the parol evidence rule affordsprimacy to parties’ written agreements, often at the expense of any collateral agreementnot reflected in the written contract. However, the adoption into New Zealand law of theUnited Nations Convention on Contracts for the International Sale of Goods has largelynullified the effect of these rules on the interpretation of international sales contracts.This paper identifies the norms of interpretation contained in the CISG and contraststhese against the existing rules of contractual interpretation employed by New Zealandcourts in domestic disputes. In addition, options for contracting out of the application ofthe Convention’s interpretation provisions are canvassed and potential risks and bestpractice identified.