The origins of the Convention on Agency in the International Sale of Goods date back to studies initiated by UNIDROIT in 1935 which ultimately led to the publishing in 1961 of two draft Uniform laws relating respectively to agency in private law relations of an international character and to the contract of commission in the international sale or purchase of goods.

This approach was based on a distinction well-known in continental law but unfamiliar to the Common law. The first draft sought to regulate the general case where authority is granted by one person to another to act in the former’s name and on his behalf in dealing with a third party while the second, concerned with the specific case of commission agency, was intended to govern the relations which arise when a commission agent undertakes on the principal’s behalf but in his, the agent’s, name to buy from, or sell goods to, a third party. In addition, whereas the first draft covered the relations created between the principal and the third party as a result of the agent’s acts, the second was primarily concerned with the mutual rights and duties of the commission agent and his principal.

In view of the difficulties which this approach entailed for Common law countries, a committee of governmental experts convened by Unidroit to end the deadlock suggested narrowing the field in which unification should be attempted and undertook the drafting of a new Uniform law dealing with the practical aspects of agency contracts of an international character for the sale and purchase of goods. In 1972 the committee adopted the text of a draft Uniform law the aim of which was on the one hand to regulate in a single text the effects of the acts of an agent and on the other to lay down a number of rules of general application to the internal relations between the principal and the agent in the context of the international sale of goods. The draft, together with an Explanatory Report prepared by the Secretariat, was circulated among the member States of Unidroit in October 1973 and at the invitation of the Romanian Government a Diplomatic Conference for the adoption of the draft Convention was held in Bucharest from 28 May to 13 June 1979.

It soon became apparent however that the difficulties deriving from the complexity of the draft, and especially its ambitious scope of application which covered not only the “external” relations between the principal and the. third party and between the agent and the third party but also the “internal” relations between the principal and the agent, were such that it would not be possible to finalise the text of the Convention at Bucharest. The articles adopted by the Conference, which concerned essentially the questions of the scope of application of the Convention and the establishment and scope of the authority of the agent, were appended to a Final Resolutionwhich inter alia called upon Unidroit to take the necessary steps to ensure that the work begun at Bucharest be completed as soon as possible.

Following consultations with a number of experts who had been present at the Bucharest Conference with a yiew to ascertaining the principal difficulties which would be encountered at a second Conference, the Governing Council of Unidroit decided at its 59th session, held in May 1980, that it would be premature to convene such a Conference on the agency draft in 1981, given the existence of a certain number of problems which called for further consideration. In consequence it was agreed to set up a restricted group of experts representing respectively the Common law, Civil law and Socialist systems, to examine the existing texts and to make recommendations.

The findings of the group, which were brought to the attention of the Governing Council at its 60th session in April 1981, were of the utmost importance for the future Convention. The group was unanimously of the opinion that the fact that international sales contracts are often in practice concluded through agents, together with the interest shown by a number of Governments in the adoption of a convention on agency on the basis of the successive drafts prepared within Unidroit, as well as considerations of a systematic character related to recent developments in the unification of the law governing international contracts of sale, and in particular the Hague Uniform Laws of 1964 and the Vienna Sales Convention of 1980, indicated the desirability of adopting a convention on some aspects at least of the law of agency.

With regard to the work already conducted by Unidroit on the subject of agency, the group believed that considerable progress had been made in the drafts which had culminated in that approved by the committee of governmental experts in 1972 but it came to the conclusion that the option taken at the Bucharest Conference in favour of a wide scope of application of the future Convention had been based on too ambitious a conception of the draft, and in particular on too great an approximation of its scope of application to that of Article 1 of the Hague Convention of 1978 on the Law Applicable to Agencv. While such a wide scope of application might be acceptable in a convention concerned with the determination of the law applicable to agency relations, a Uniform law convention seeking to regulate many kinds of agency relationships, however remotely removed from the ultimate conclusion of an international sales contract, and in addition all aspects of the activity of such agents, was in the group’s view quite another proposition, granted not only the considerable differences existing between various legal systems in their approach to agency in general, but also the distinctions drawn under the domestic law of many States between different kinds of agency contracts and intermediaries. Such a wide-ranging scheme of unification could only be brought about, even assuming it to be possible, with great difficulty and certainly not within a realistic time-scale, whereas the elaboration of an international instrument with a narrower scope of application governing the effects of an agency situation on the relations between the principal or the agent on the one hand and the third party on the other would offer much greater prospects of success. These would be greatly increased if the scope of the prospective Convention were to be further restricted to those cases where one person is authorised to conclude, or purports to conclude, a contract for the sale of goods on behalf of another person, the principal, with a third party and, when the places of business of the principal and the third partyare situated in different States.

Although some members of the Governing Council had misgivings at the idea of restricting the scope of application of the future Convention to the so-called “external” relations between the parties, they were nevertheless prepared to follow the majority in adopting this approach on condition that this would not preclude the preparation by the Secretariat of Unidroit of a detailed study of the internal relations between the principal and the agent with a view to the possible drawing up of uniform rules in that connection.

In these circumstances the Governing Council decided that a committee of governmental experts should be convened for the revision of the agency draft on the basis of a new text to be prepared by the Secretariat, taking account principally of the decision to delete Chapter III of the former draft dealing with the relations between the principal and the agent. This committee of governmental experts. in whose work not only the member States of Unidroit but also those States which were members of the United Nations Commission on International Trade Law (UNCITRAL) but not of Unidroit were invited to participate, together with observers from the interested international organisations, met in Rome from 2 to 13 November 1981. The committee thoroughly revised the text prepared by the Secretariat and came to the conclusion that the new draft approved by it world provide a valid basis for discussion at a Diplomatic Conference for the adoption of the prospective Convention on Agency in the International Sale of Goods.

Shortly after the meeting of the committee of governmental experts the Government of Switzerland announced its willingness to host a Diplomatic Conference for the adoption of the draft Convention on Agency in the International Sale of Goods on the basis of the text drawn up by the committee of governmental experts. The Conference was duly held in Geneva from 31 January to 17 February 1983 and was attended by delegations from 49 States with, in addition, observers from nine other States and seven inter-governmental organisations.

The text of the Convention on Agency in the International Sale of Goods was adopted on February 15 1983 and opened to signatureon 17 February 1983 at the closing session of the Conference.

(Excerpt from the Explanatory Report published on this site)