3. Article 11 CISG preempts the application of form requirements for limitation and exclusion clauses provided for in the otherwise applicable law or rules of law.
3.1. Rule 3 addresses the interplay of the Convention’s fundamental principle of freedom from form requirements (Article 11 CISG) and the rules invalidating sales contracts for lack of formal requirements set out in the otherwise applicable law or rules of law.
3.2. Given the preeminent character of the principle embodied in Article 11 CISG, the consequences of non-compliance with a form requirement under the otherwise applicable law (domestic law or rules of law) will not necessarily entail the invalidity of the limitation or exclusion clause.
Form governed by Article 11 CISG
3.3 Though the wording of Article 11 CISG addresses only the formation and evidence of an international sales contract, the principle of freedom of form is applicable to all legally binding acts within the CISG, including limitation and exclusion clauses.
3.4 Rule 3 states that the formal validity of exemption and limitation clauses in CISG contracts is not governed by the provisions of the otherwise applicable law or rules of law. Rather, it acknowledges that only Article 11 CISG regulates the formal validity of international sales contracts. This provision constitutes an exception to the general rule set out in Article 4 second sentence (a), CISG according to which questions of validity are excluded from the scope of the Convention. 
3.5. Article 11 CISG expresses the principle of freedom from form requirements and liberates CISG contracts from any such requirements regarding their conclusion, subsequent modification, or termination. Thus the formal validity of CISG contracts is only subject to party autonomy, usages applicable pursuant to Article 9 CISG, and the exception contained in Article 12 CISG,  which concerns the reservation provided in Article 96 CISG. 
3.6 Moreover, the Convention does not require the contract to be evidenced by a particular form.  It follows that the formal validity of limitation and exclusion of liability clauses found in sales contracts is exclusively governed by the CISG and subject to the principle of freedom from form requirements.
3.7 Some jurisdictions have established specific formal requirements to be met by exemption or limitation clauses. However, in accordance with Rule 3 and the preemptive character of Article 11 CISG, a contract governed by the Convention must not comply with such formal requirements.
3.8 For instance, Article 1341 of the Italian Civil Code states that a limitation clause contained in standard conditions only binds the other party if, at the time of the contract conclusion, that party has expressly approved it in writing. The Italian courts have characterized it as a formal requirement, which is met when the other party undersigns the relevant deed twice.
3.9 Another example: under U.S. law, disclaiming an implied warranty may function as a limitation or exclusion clause.  Such a disclaimer seeks to limit the seller’s obligations concerning the product’s merchantability  or fitness for a particular purpose.  According to Section 2-316 of the Uniform Commercial Code the exclusion or modification of implied warranties in sales contracts (a) shall be in writing, (b) requires language mentioning “merchantability”, and (c) must show the exclusion or modification of the warranty conspicuously.  Requirements (a), (b) and (c) may be characterized, in a CISG contract, as form requirements concerning the validity of the warranty disclaimer. In accordance with this Rule and the preemptive character of Article 11 CISG, the absence of such form requirements cannot render the warranty disclaimer unenforceable. 
3.10 The Convention must be uniformly interpreted and applied as required by Article 7(1) CISG. Therefore, the principle under Article 11 CISG must not give way to domestic form requirements regarding the validity of limitation clauses. 
3.11 Courts and arbitral tribunals have consistently reaffirmed the principle of freedom from form requirements established in Article 11 CISG and its prevailing character over domestic form requirements. 
3 (a) The Convention does not preempt provisions for the protection of the obligee under the applicable law or rules of law, relying on notions such as intentional or willful breach, gross negligence, breach of an essential term, gross unfairness, unreasonableness, or unconscionability.
(b) However, in the application of these provisions, the international character of the contract and the general principles underlying the CISG are to be observed, including the principles of freedom of contract and reasonableness.
4.1 Rule 4(a) addresses the interplay of the Convention and the rules protecting the obligee contained in the otherwise applicable law or rules of law, which invalidate limitation and exclusion clauses under certain circumstances. It acknowledges the authority of such invalidating rules to govern limitation and exclusion clauses in CISG contracts.
4.2 On the other hand, Rule 4(b) addresses the application of validity tests to limitation and exclusion clauses contained in CISG contracts under the otherwise applicable law or rules of law, as envisaged by Rule 4(a). It establishes that in the application of such validity tests the general principles underlying the CISG are to be observed.
Freedom of contract and protection mechanisms
4.3 Owing to the basic principle of freedom of contract, most domestic legal systems and international instruments recognize the validity of exemption or limitation clauses and their aptitude to derogate from the default liability regime provided by law.
4.4 Nevertheless, domestic legal systems and international instruments include control mechanisms to invalidate exemption or limitation clauses under certain circumstances. Such legal mechanisms provide a special protection to the obligee, i.e., the party who, if not for the exemption or limitation clause, would be in a position to claim full compensation for damages caused by the obligor’s breach of contract, or exercise the remedy otherwise available. Such mechanisms also nullify exemption and limitation agreements where their application results in unfair treatment of the performing party and an evident imbalance between the parties’ respective performances.  They may vary according to their legal origin but, in general, result in unenforceability of the exemption or limitation.
4.5 As seen in the comments to Rule 2, supra, the circumstances invalidating exemption or limitation clauses can be summarized as follows:
i) Exemption or limitation clauses are always invalid where the non-performance is the result of fraudulent or willful breach on the part of the obligor.
ii) Exemption or limitation clauses are sometimes invalid where the non-performance is the result of the obligor’s grossly negligent conduct.
iii) Exemption or limitation clauses are invalid where they concern the very substance of the obligation (obligation vidée de sa substance) or concern a major obligation (Kardinalpflicht).
iv) Exemption or limitation clauses are invalid where they relate to the breach of obligations deriving from mandatory norms.
v) Exemption or limitation clauses are invalid when they are “unreasonable”. 
vi) Exemption or limitation clauses are invalid when they concern the liability for death or personal injuries.
vii) Limitation clauses are subject to the “agreed sums” legal regime in cases where they also serve as liquidated damages clauses.
ix) Exemption or limitation clauses may be restricted by the general principles of legislation concerning “unfair terms”.
x) Exemption and limitation clauses included in standard terms or in adhesion contracts may have to meet the requirements imposed by some regulations on the validity of such contracts and the clauses they contain, and be interpreted restrictively or contra preferentem. 
xi) Exemption and limitation clauses may not be invoked if it would be grossly unfair to do so, having regard to the contract.
xii) Exclusionary clauses are unenforceable if they are unconscionable. 
The perspective of the CISG
4.6. As per Article 4, second sentence (a), the CISG is not concerned with the validity of the contract.  It follows that protection mechanisms established by the otherwise applicable law or rules of law remain generally applicable to limitation clauses in contracts governed by the Convention. Thus, from the perspective of the CISG, all of these protection mechanisms affect the substantive validity of exemption and limitation of liability clauses.
4.7. What is considered to be a validity issue under the Convention is not to be decided by the otherwise applicable law or rules of law, but by the CISG itself. 
4.8. As limitation and exclusion clauses fall under the CISG scope, their uniform interpretation is required under Article 7(1) and governed by Articles 8 and 9 CISG.  Therefore, cases involving a challenge to the validity of such clauses under the otherwise applicable law or rules of law call for an interpretation in accordance with the general principles on which the CISG is based (Article 7(2)). Among such principles, the principle of reasonableness stands as the most important.
4.9. Courts have applied protection mechanisms set out in the otherwise applicable law or rules of law in favor of the obligee, thus rendering unenforceable exemption or limitation of liability clauses. 
4.10. For example, a German court applied German law to render unenforceable the exemption of liability set out in the seller’s terms and conditions drafted in Italian. It stated that the clause limited the liability to the exchange or repair of defective parts "escluso qualsiasi risarcimento di danni" ("excluding any compensation") and that the complete exclusion amounted to an inappropriate disadvantage for the plaintiff, and contradicted the legal provisions. Therefore such a term had to be considered as compulsorily invalid according to section 9 AGBG [Standard Terms of Business Act].
4.11. While validating the exclusionary clause, a U.S. court has expressly stated that the validity and enforceability of such clause were governed by domestic law rather than by the CISG.
4.12. Rule 4(b) addresses the application of validity tests to exemption and limitation of liability clauses contained in CISG contracts, under the otherwise applicable law or rules of law, as envisaged by Rule 4(a). It stresses the need to apply such validity tests in accordance with an international standard (Article 7(1) CISG) derived from the underlying principles of the CISG (Article 7(2) CISG). This guideline intends to preserve the international character of the CISG, promote uniformity in its application and foster the observance of good faith in international trade, as envisaged by Article 7(1).
4.13. As seen in the comments to Rules 2 and 4(a), national laws and international instruments take different approaches to controlling the validity of exemption and limitation clauses. Nevertheless, from a functional perspective these mechanisms generally render exemption and limitation agreements unenforceable where they: (a) exclude or restrict the obligor’s liability in cases of intentional or gross fault or gross negligence; (b) are unconscionable; (c) violate mandatory norms or the public policy of the relevant legal system; (d) exclude liability in case of a fundamental breach or breach of a fundamental term; and (e) concern the exclusion or limitation of liability for death or personal injury.
4.14. Invalidation of the clause by the competent state court or arbitral tribunal is therefore the most common protection mechanism against abusive exemption or limitation of liability agreements.
Interpretation of validity tests under the CISG
4.15. Where the Convention has become applicable in a particular Contracting State, it becomes part of the law of that State. More specifically, the CISG provisions become that part of state law which governs international sales contracts. In accordance with Articles 1 through 6 CISG, issues concerning international sales contracts are then submitted to the Convention rather than to another national, foreign or international body of rules. 
4.16. Accordingly, the CISG is the prevailing governing instrument for international sales of goods in any given Contracting State. The Convention thus requires a harmonizing effort in those situations where a subsidiary set of rules is called upon to supplement the CISG regime. In other words, those rules supplementing the CISG, in spite of their different origin, must be interpreted and applied in accordance with international standards derived from the principles underlying the Convention – Article 7(1) and (2) CISG.
4.17. In particular, where the validity of a limitation or exclusion clause contained in a CISG contract is assessed against the rules of a domestic law, the standards usually employed in domestic cases must give way to international standards, developed from the underlying principles of the CISG. For example, a clause excluding the seller’s liability in case of breach of a CISG contract, found unconscionable and therefore unenforceable under Washington law, is not necessarily invalid in an international context. The validity test to be applied must correspond to an international principle established by the CISG.
4.18. Correspondingly, one or more international principles derived from the CISG must prevail over any other standard in assessing the validity of exemption or limitation clauses under domestic law notions such as intentional or willful breach, bad faith, gross fault, gross negligence, lack of proportionality, excessiveness, fundamental breach or breach of a fundamental term, unconscionability or unreasonableness. Even the more flexible notion of gross unfairness found in the UNIDROIT Principles  must be construed according to an international principle derived from the CISG.
4.19. In conclusion, it is the CISG that provides the background against which the validity of an exemption or limitation of liability clause must be assessed under the otherwise applicable law or rules of law. Thus the unfairness tainting the validity of a limitation clause must be determined in light of what is fair in international trade – and not in similar domestic transactions. The same reasoning applies to an exemption clause concerning the breach of a fundamental contract term: what exactly is a fundamental breach is to be determined in light of a principle established by the CISG.
Principles underlying the CISG
4.20. Determining the international principles derived from the CISG in cases involving the validity of exemption and limitation of clauses requires the application of interpretive standards of the Convention under Article 7(1) CISG.
4.21. First, regard is to be had to the international character of the CISG and, additionally, of the sales contract itself. The terms and concepts contained in the Convention are to be interpreted autonomously, i.e., in the context of the CISG itself and not by reference to the meaning which might traditionally be attached to them by a particular domestic law. In general, the CISG employs neutral language for which a common understanding should be ideally reached. Even in situations where the CISG has employed terms or concepts peculiar to one or more domestic legal systems (e.g., the foreseeability rule in Article 74), the concept is to be interpreted autonomously considering its function within the context of the Convention. 
4.22. Second, the terms and concepts in the CISG are not to be construed in a strict and literal sense but in light of the main purpose of the Convention, which is to provide a uniform framework for the international sale of goods. Promoting the uniform application of the CISG provisions ensures that, in practice, these provisions are interpreted and applied to the greatest possible extent in the same way by courts of different Contracting States or by arbitral tribunals.
4.23. Last, but not least, the Convention must be interpreted with a view to foster the observance of good faith in international trade (Article 7 (1) CISG). While there is no consensus as to the direct application of the good faith principle to individual CISG contracts – much to the contrary – the principle exerts at least indirect influence on the contractual relationship between the parties. 
The principle of reasonableness in the CISG
4.24. ‘Reasonableness’ is not only a general principle of the CISG but one of the most fundamental principles on which the Convention is based.
4.25. In different opinions, the CISG Advisory Council has referred to the principle of reasonableness in the context of the Convention (e.g. – Opinions No. 5, on the avoidance of the sales contract by the buyer; No. 6, on the calculation of damages under Article 74; No. 8, on the calculation of damages under Articles 75 and 76; No. 9, on the consequences of avoidance; No. 10, on agreed sums; and No. 13, on the inclusion of standard terms).
4.26. The principle of reasonableness also appears under different labels in the Convention. It is at the origin of the prohibition against abuse of rights and the prohibition against contradictory behavior (venire contra factum proprium), both stemming from Article 7 CISG.
4.27. Regarding reasonableness as a fundamental principle of the CISG and reading it into every Convention provision has been said to help tilt the scales in favor of filling the gaps in the Convention by the means of its general principles rather than using the otherwise law applicable. A tilting of scales that is required by virtue of the good faith and uniform-law mandate recited in Article 7(1) CISG.
Interpretation of limitation and exclusion clauses under international principles
4.28. Article 7(1) CISG requires that solutions developed to fill in the gaps in the Convention be acceptable in a majority of legal systems belonging to different legal traditions. As seen in this Opinion, the law largely recognizes the parties’ ability to exclude or limit their own contractual liability by agreement. As a result, the condition set forth in Article 7(1) CISG is met. Hence, the interpretation of the protection mechanisms set forth in the otherwise applicable law or rules of law must follow a comparative law approach.
4.29. Additionally, as a fundamental principle of the CISG, reasonableness has a strong bearing on the proper interpretation of the protection mechanisms set forth in the otherwise applicable law or rules of law, which govern the substantive validity of limitation and exclusion agreements.
4.30. Since freedom of contract is recognized as a general principle of the CISG, it must be determined whether the parties’ freedom in the context of international trade provides sufficient grounds for the interpretation of validity mechanisms concerning exemption and limitation of liability clauses. Given the width of the parties’ freedom to allocate their risks and liabilities in a manner which modifies the remedies regime established in the Convention (Article 6 CISG), the interpretation of the protection mechanisms set forth in the otherwise applicable law or rules of law must follow the priority of freedom of contract.
4.31. In sum, the interpretation of the validity of protection mechanisms set forth in the otherwise applicable law or rules of law must observe the principles of reasonableness and freedom of contract underlying the CISG.
 Schlechtriem & Butler (n. 10), par. 64, p. 61.
 See Article 11 CISG and Schlechtriem/Schmidt-Kessel, Commentary (n. 10), Art. 4, para. 29 and Art. 11, par. 4; Viscasillas, Kroll, Mistelis and Viscasillas on CISG (n. 7), Art. 11, paras. 1-10; and Honnold on CISG (n. 8), Art. 11, para. 127.
 See comments and cases reported at the CISG Digest 2012 (n. 44), Art. 11, p. 73-76.
 Article 96 CISG authorizes a Contracting State whose legislation requires contracts of sale to be concluded in or evidenced by writing to make a declaration in accordance with Article 12 CISG. Article 12 states that the freedom from form requirement does not apply where any party to a sales contract has its place of business in a Contracting State which has made a declaration under Article 96. In other words, Article 96 reservation excludes the Contracting State’s obligation to apply the Convention’s freedom of form provisions. Thus, the CISG no longer governs the formal validity of the international sales contract. Currently only 8 out of the 83 CISG Contracting States have made an Article 96 reservation. These countries include: Argentina, Armenia, Belarus, Chile, Hungary, Paraguay, the Russian Federation and Ukraine. For more information on reservations under Articles 95 and 96 CISG, see the CISG-AC Opinion No. 15, Reservations under Articles 95 and 96 CISG, Rapporteur: Professor Doctor Ulrich G. Schroeter, University of Mannheim, Germany. Adopted by the CISG-AC following its 18th meeting in Beijing, China on 21 and 22 October 2013.
 See Article 11 CISG and Schlechtriem/Schmidt-Kessel, Commentary (n. 10), Art. 11, par. 4, 6, 9.
 A warranty is an assurance by a party of the existence of a fact upon which the other party may rely. The intended purpose is to relieve the party of any duty to determine facts independent from the warranty which is a part of the transaction. The seller tipically provides a warranty to the buyer. A warranty constitutes a promise to indemnify the other party if the warrantied fact proves untrue (Glower W. Jones, Warranties in International Sales: UN Convention on Contracts for the International Sale of Goods Compared to the US Uniform Commercial Code on Sales, 17 International Business Lawyer (1989) p. 497-500). The word "warranty" typically refers to the “express warranty” mentioned in the UCC, which consists of affirmative promises about the quality and features of the goods being sold. These promises also include descriptions of the goods being sold or samples shown to the buyer. In addition to express warranties, the UCC also creates a second kind of warranty, called an "implied warranty", which is effective regardless of whether or not it is specifically mentioned. The implied warranty created by the UCC ended the old rule of ‘caveat emptor’("Let the buyer beware"). The two implied warranties under the UCC are: (i) the warranty of "merchantability" of the goods being sold, and (ii) the warranty that the goods are "fit for a particular purpose." Generally, a seller who wants to disclaim UCC warranties must do so specifically. A general statement that there are "no warranties, express or implied" is usually ineffective. Just how express a disclaimer needs to be depends on the kind of warranty being disclaimed. Section 2-316(2) and (3) of the UCC articulate the requirements a seller must meet to effectively disclaim the implied warranties of merchantability and fitness for particular purpose. Subsection 2 provides, generally, that to be effective, a disclaimer must be conspicuous, and in the case of the warranty of merchantability, it must mention ‘merchantability’. Subsection 3 articulates other ways in which the implied warranties can be effectively disclaimed (i.e. – [a] through the use of language like “as is” or “with all faults” which is commonly understood to mean that the buyer assumes all risks related to the quality of the goods; [b] through the buyer’s inspection of the goods; and [c] through trade usage). The UCC also requires all disclaimers of implied warranties to be in writing. However, a warranty disclaimer hidden in the fine print of a three-page sales contract will not be enforced because the UCC also requires that a disclaimer be conspicuous. A section of a contract is conspicuous if it clearly stands out from the rest of the contract and draws the eye of the reader (e.g., bold type, different colored type, larger type, or in all capitals). For a distinction between “breach of contract” and “breach of warranties” under the UCC, see Timothy Davis, UCC Breach of Warranty and Contract Claims: Clarifying the distinction, Baylor Law Review vol. 61:3 (2009) p. 783-817. For a status of the enforceability of disclaimers of implied warranties, see Cate . Dover Corp. 790 S.W.2d 559 (1990) decided by the Texas Supreme Court, available at: http://www.leagle.com/decision/19901349790SW2d559_11296/CATE%20v.%20DOVER%20CORP.
 The language of Article 35 CISG closely tracks the UCC provisions of the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. Section 2-314 of the Uniform Commercial Code (UCC) reads as follows:
“§ 2-314. Implied Warranty: Merchantability; Usage of Trade.
(1) Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.
(2) Goods to be merchantable must be at least such as
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the promise or affirmations of fact made on the container or label if any.
(3) Unless excluded or modified (Section 2-316) other implied warranties may arise from course of dealing or usage of trade.”
 Section 2-315 of the Uniform Commercial Code (UCC) reads as follows:
“§ 2-315. Implied Warranty: Fitness for Particular Purpose.
Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.”
 Section 2-316 of the American Uniform Commercial Code (UCC) reads as follows:
“§ 2-316. Exclusion or Modification of Warranties.
(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this Article on parol or extrinsic evidence (Section 2-202) negation or limitation is inoperative to the extent that such construction is unreasonable.
(2) Subject to subsection (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that "There are no warranties which extend beyond the description on the face hereof."
(3) Notwithstanding subsection (2)
(a) unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like "as is", "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty; and
(b) when the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and
(c) an implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade.
(4) Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (Sections 2-718 and 2-719).”
 Contra. In 2008 a U.S. District Court understood that “[t]he validity of the disclaimer cannot be determined by reference to the CISG itself. CISG art 4(a). It is therefore necessary to turn to the forum's choice of law rules.” The Court discussed the validity of a clause contained in a CISG contract concluded between a Canadian buyer and an American seller, which disclaimed all warranties (except that of marketable title) and liability. The clause read as follows: “THE EQUIPMENT BEING SOLD ON AN "AS, WHERE IS" BASIS AND WITH ALL FAULTS. EXCEPT AS SET FORTH HEREIN, THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE EQUIPMENT, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND EXPRESSLY DISCLAIMS LIABILITY AND SHALL NOT BE LIABLE FOR LOST PROFITS OR FOR INDIRECT, INCIDENTAL CONSEQUENTIAL OR COMMERCIAL LOSSES OF ANY KIND.”
The Court applied both Alberta and Pennsylvania laws – which, to that end, did not diverge – to consider the following elements of the disclaimer: "(1) the placement of the clause in the document; (2) the size of the disclaimer's print; and (3) whether the disclaimer was highlighted or called to the reader's attention by being in all caps ...." Id. Expressions such as "as is" or "with all faults" are approved by statute as language of exclusion. 13 Pa C.S.A. § 2316(c)(1). After examining the final, executed bills of sale, under the standards set forth above, the Court found the disclaimer to be valid. United States 25 July 2008 Federal District Court [Pennsylvania] (Norfolk Southern Railway Company v. Power Source Supply, Inc.), available at: http://cisgw3.law.pace.edu/cases/080725u1.html.
 See, for example, Lookofsky, J. The 1980 United Nations Convention on Contracts for the International Sale of Goods – Articles 11 and 12 No Writing Requirement for CISG Contract; Declaration in Derogation. In J. Herbots (ed.) R. Blanpain (gen. ed.). International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192, at <http://www.cisg.law.pace.edu/cisg/biblio/loo11.html> (accessed on 19 Jan. 2015). The author states:
“92. Some legal systems require that (certain) sales contracts be in writing. Dispensing with that kind of 'formal validity' requirement in the international sales context, Article 11 of the CISG provides as follows: (…)
 See comments and cases reported at the CISG Digest 2012 (n. 44), Art. 11, p. 73-76. See also the cases reported at UNILEX on Article 11 CISG, at: http://www.unilex.info/dynasite.cfm?dssid=2376&dsmid=13356&x=1 (access on Sept. 11, 2015).
 See comments to Rule 2 supra.
 See, e.g., Article 7.1.6 of the 2010 UNIDROIT Principles and the official comments and Commentary on the UNIDROIT Principles (n. 39), p. 762-764.
 Fontaine and De Ly on contract clauses (n. 2), p. 384-385. See, for example, Article 1229 of the Italian Civil Code. In some countries, the professional seller is presumed to have acted in bad faith, which affects the validity of clauses limiting liability.
 Fontaine and De Ly on contract clauses (n. 2), p. 385. While the laws of Italy, Germany and France preclude the application of the clause in case of gross negligence, the laws of Belgium and Mexico enforce such clauses even in cases of gross negligence.
 Fontaine and De Ly on contract clauses (n. 2), p. 385. In the past the English and US courts developed a criterion for the validity assessment of exemption clauses that rendered such clauses unenforceable where they compromised “the very core and essence of the contract”, which became known as “fundamental breach” or “breach of a fundamental term”. However, this validity requirement has lost its appeal more recently. On this topic, see Fernandes – Cláusulas de Exoneração e de Limitação (n. 2), p. 256-261.
 E.g., Article 1229 of the Italian Civil Code.
 Fontaine and De Ly on contract clauses (n. 2), p. 386. See, for example, Section 2-316 of the American Uniform Commercial Code, and Section 3 of the 1977 United Kingdom Unfair Contract Terms Act.
 Fontaine and De Ly on contract clauses (n. 2), p. 386. See, for example, Article 11 of the Brazilian Civil Code, Article 1474 of the Quebec Civil Code, and the 1977 United Kingdom Unfair Contract Terms Act.
 Fontaine and De Ly on contract clauses (n. 2), p. 386. Article 1152 of the French Civil Code empowers the judge not only to reduce an excessive penalty clause but also to increase one that would be manifestly insufficient to compensate for the loss.
 In this regard, see the 1977 United Kingdom Unfair Contract Terms Act.
 German law, for example, expressly prohibits standard terms excluding liability for willful intent and gross negligence, as well as liability for death or injury to body and health caused by the issuer (BGB, Section 309). For more information on the German law of standard terms, see: Zerres, Thomas. Principles of the German Law on Standard Terms of Contract, available at: http://www.jurawelt.com/sunrise/media/mediafiles/14586/German_Standard_Terms_of_Contract_Thomas_Zerres.pdf (access on 5 Sept. 2015).
 Article 7.1.6 of the 2010 UNIDROIT Principles.
 See § 2-719 of the UCC (n. 143). Under Washington law, for example, a limitation of liability clause is enforceable unless it is unconscionable. There are two types of unconscionability in contracts in Washington: (1) substantive unconscionability, involving those cases where a clause in the contract is "shocking to the conscience." and (2) procedural unconscionability, which relates to impropriety during the process of forming the contract. … With regard to "substantive unconscionability," the Washington Supreme Court stated: "As an initial matter, it is questionable whether clauses excluding consequential damages in a commercial contract can ever be substantively unconscionable." Mortenson. 140 Wn.2d at 586. The Court in Mortenson cited Tacoma Boatbuilding Co. v. Delta Fishing Co., 28 U.C.C. Rep. Serv. 26, 35 (W.D. Wash 1980) where the District Court stated in rejecting an argument that the limitation clause therein was unconscionable: ‘Comment 3 to [U.C.C.] § 2-719 generally approves consequential damage exclusions as "merely an allocation of unknown or undeterminable risks."’ Thus, the presence of latent defects in the goods cannot render these clauses unconscionable. The need for certainty in risk-allocation is especially compelling where, as here, the goods are experimental and their performance by nature less predictable.
With regard to "procedural unconscionability" in commercial transactions, the concern is that there is no "unfair surprise" to the detriment of one of the parties. Puget Sound Financial, 146 Wn.2d at 439-41. The Washington Supreme Court uses a "totality of the circumstances" approach to making the determination of procedural unconscionability. Mortenson, 140 Wn.2d at 588. There is a non-exclusive list of factors for assessing the totality of the circumstances, which include: (1) the conspicuousness of the clause in the agreement, which includes whether the important terms were "hidden in a maze of fine print"; (2) the manner in which the parties entered into the contract, which includes whether the parties had reasonable opportunity to understand the terms of the contract; (3) the custom and usage of the trade; and (4) the course of dealing between the parties. Puget Sound Financial, 146 Wn.2d at 442-44. Source: United States 13 April 2006 Federal District Court [State of Washington] (Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.), at <http://cisgw3.law.pace.edu/cases/060413u1.html>.
 See Article 4 CISG and Schwenzer/Hachem, Commentary (n. 10), Art. 4, par. 43; Djordjevic, Kroll, Mistelis and Viscasillas on CISG (n. 7), Art. 4, para. 26 (same reasoning applies to exemption and limitation of liability clauses); and Honnold on CISG (n. 8), Art. 4, para. 64.
 Determining what are ‘validity issues’ under the Convention has been recognized as ‘complicated and uncertain’ due to the intricate language of Article 4 CISG (See, e.g. Schlechtriem & Butler (n. 10), par. 36, p. 34). According to Schwenzer/Hachem – Commentary (n. 10), Art. 4, par. 31 –, the term “validity” must be interpreted autonomously, using a functional approach in deciding from the perspective of the Convention whether it intends to govern the question in dispute. Matters of validity are those where a contract is void ab initio (e.g., “initial impossibility”) by operation of law or rendered so either retroactively by a legal act of the State or of the parties, such as rescission form mistake or ‘withdrawal’ or ‘revocation’ of consent under special provisions, or by a ‘resolutive’ condition or a denial of approval of relevant authorities. On the other hand, a novel two-step approach based instead on the requirements of internationality and uniform interpretation set out in Article 7(1) might be useful to delineate the Convention’s reach. According to this approach, a domestic law rule is displaced by the Convention if (1) it is triggered by a factual situation to which the CISG also applies (the ‘factual criterion’) and (2) it pertains to a matter that is also regulated by the CISG (the ‘legal criterion’). Only if both criteria are cumulatively fulfilled will the domestic law provision be displaced in favor of the Convention. On this novel approach, see Schroeter, U. G. The Validity of International Sales Contracts: The Irrelevance of the ‘Validity Exception’ in Article 4 Vienna Sales Convention and a Novel Approach to Determining the Convention’s Scope, in : Schwenzer, I. and Spagnolo, L. (eds.), Boundaries and Intersections: The 5th Annual MAA Schlechtriem CISG Conference, The Hague: Eleven International Publishing (2014), p. 95-117.
 Where the otherwise applicable law or rules of law provide for restrictive or contra preferentem interpretation of the exemption or limitation clause contained in standard terms, CISG-AC Opinion No. 13 on Inclusion of Standard Terms under the CISG (n. 21) must be taken into consideration.
 See CLOUT case No. 318 [Oberlandesgericht Celle, Germany, 2 September 1998] (term in seller’s general conditions limiting damages not validly incorporated into contract) (see full text of the decision); CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997] (validity of standard term excluding liability determined by domestic law, but reference in domestic law to non-mandatory rule replaced by reference to equivalent Convention provision), reported at the CISG Digest 2012 (n. 44), Art. 74, p. 346, para. 4.
 CLOUT case No. 345 [Landgericht Heilbronn, Germany, 15 September 1997] (validity of standard term excluding liability determined by domestic law, but reference in domestic law to non-mandatory rule replaced by reference to equivalent Convention provision), reported at the CISG Digest 2012 (n. 44), Art. 74, p. 346, para. 4.
 United States 13 April 2006 Federal District Court [State of Washington] (Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.), at <http://cisgw3.law.pace.edu/cases/060413u1.html>. The court stated, inter alia, that “the CISG does not govern the enforceability of the exclusionary clause pursuant to an express provision in the CISG. The CISG provides at Article 4 in pertinent part …. Whether a clause in a contract is valid and enforceable is decided under domestic law, not the CISG. … In Washington, the consistent rule has been that the exchange of purchase orders or invoices between merchants forms a written contract, and the terms contained therein are enforceable. … A limitation of liability clause is enforceable unless it is unconscionable.” See also United States 25 July 2008 Federal District Court [Pennsylvania] (Norfolk Southern Railway Company v. Power Source Supply, Inc.) (n. 65), available at: http://cisgw3.law.pace.edu/cases/080725u1.html.
 See Article 1 CISG and Schwenzer/Hachem, Commentary (n. 10), Introduction to Articles 1-6, par. 3, and Art. 1, par. 35.
 See note 80 supra. (Washington law on the validity of limitation clauses)
 See Article 7.1.6 of the UNIDROIT Principles and its official comments, para. 2.
 See Article 7(1) CISG and Schwenzer/Hachem, Commentary (n. 10), Art. 7, paras. 7-9; Viscasillas, Kroll, Mistelis and Viscasillas on CISG (n. 7), Art. 7, paras. 18-20; and Honnold on CISG (n. 8), Art. 7, paras. 85-93.
 According to Schwenzer/Hachem, Commentary (n. 10), Art. 7, par. 9, n. 24, “examples include the notions of ‘stocks, shares, investment securities’ and ‘ships’ in Article 2 CISG, as well as the foreseeability rule in Article 74, sentence 2 which has its role model in the English case Hadley v. Baxendale  9 Ex 341.
 See Article 7 CISG and Schwenzer/Hachem, Commentary (n. 10), Art. 7, paras. 6, 16 and 17. In favor of the direct application of the principle of good faith to the formation and performance of the contract, see Viscasillas, Kroll, Mistelis and Viscasillas on CISG (n. 7), Art. 7, paras. 24-30. As to case law, see the UNILEX database, Article 7, “good faith as a general principle of the Convention”. In particular, see the judgment where the Belgium’s Hof van Beroep in Gent considered the good faith principle in the context of the CISG to establish the binding nature of the contract. Decision of 15.05.2002 available at: http://www.unilex.info/case.cfm?id=940. See also the 2013 German Oberlandesgericht Naumburg’s decision that applied the principle of good faith under the CISG to consider that the mere reference to standard terms did not amount to their incorporation into a sales contract. It affirmed that the user was required under the principle of good faith in international trade (Art. 7(1) CISG) to submit the relevant document or make such terms accessible in another way to the recipient. Case 12 U 153/12, 13.2.2013, available at: http://www.unilex.info/case.cfm?id=1697.
 For overview comments on the principle of reasonableness and extensive doctrinal reference, see Kritzer, A. H. at <http://cisgw3.law.pace.edu/cisg/text/reason.html#view> (accessed: 15 January 2015). Among the thirty-seven CISG provisions that mention reasonableness and those others that clearly refer to it, a definition of the principle is nowhere to be found, which is why the definition in Article 1:302 PECL is said to fit the manner in which this concept is used in the CISG. The relevant PECL provision reads as follows: “Under these Principles reasonableness is to be judged by what persons acting in good faith and in the same situation as the parties would consider to be reasonable. In particular, in assessing what is reasonable the nature and purpose of the contract, the circumstances of the case and the usages and practices of the trades or professions involved should be taken into account.”
 See e.g. CISG-AC Opinion No. 5, The buyer's right to avoid the contract in case of non-conforming goods or documents 7 May 2005, Badenweiler (Germany). Rapporteur: Professor Dr. Ingeborg Schwenzer, LL.M., Professor of Private Law, University of Basel; CISG-AC Opinion No. 6, Calculation of Damages under CISG Article 74 (n. 8); CISG-AC Opinion No. 8, Calculation of Damages under CISG Articles 75 and 76. Rapporteur: Professor John Y. Gotanda, Villanova University School of Law, Villanova, Pennsylvania, USA. Adopted by the CISG-AC following its 12th meeting in Tokyo, Japan, on 15 November 2008; CISG-AC Opinion No. 9, Consequences of Avoidance of the Contract. Rapporteur: Professor Michael Bridge, London School of Economics, London, United Kingdom. Adopted by the CISG-AC following its 12th meeting in Tokyo, Japan, on 15 November 2008; CISG-AC Opinion No. 10, Agreed Sums Payable upon Breach of an Obligation in CISG Contracts (n. 27); and CISG-AC Opinion No. 13 on Inclusion of Standard Terms under the CISG (n. 21).
 See Article 7 CISG and Schwenzer/Hachem, Commentary (n. 10), Art. 7, par. 32; and Magnus, Ulrich. General Principles of UN-Sales Law, in Rabels Zeitschrift for foreign and international Private Law - Hein Kötz in honor of his 60th Birthday, Part I, volume 59 (1995) Issue 3-4 (October), Hamburg: Max-Planck-Institute for foreign and international Private Law, available online at: http://www.cisg.law.pace.edu/cisg/biblio/magnus.html (accessed on April 27, 2014).
“[T]he need to promote ... the observance of good faith in international trade" set out in Article 7(1) CISG, read in conjunction with the gap-filling rule of Article 7(2), which refers unsettled matters to the general principles on which the CISG is based, states at least a general prohibition against the abuse of rights (and a prohibition against contradictory behavior - venire contra factum proprium).
 See Kritzer, A. H. at <http://cisgw3.law.pace.edu/cisg/text/reason.html#view> (accessed: 15 January 2015).
 See Article 7 CISG and Schwenzer/Hachem, Commentary (n. 10), Art. 7, para. 8; and Viscasillas, Kroll, Mistelis and Viscasillas on CISG (n. 7), Art. 7, paras. 16-17.
 See Schlechtriem & Butler (n. 10), par. 49, p. 53.