It is noted that the modern institution of interest
is deeply rooted in Roman Law, where it was a sum “due
from a debtor who delayed or defaulted in repayment
of a loan. The measure of the [amount] due for the default
or delay was … the difference between the [claimant's]
current position and what it would have been had the
loan been timely and fully repaid.” In other words,
the measure of interest due for the delay or default
was id quod interest.
 In
the modern world, interest generally acts as compensation
for the loss of use of money. Interest is a sum paid
or payable as compensation for the temporary withholding
of money. The rationale for this practice was articulated
by the United States Supreme Court in 1896:
“It is a dictate of natural justice, and the
law of every civilized country, that a man is bound
in equity, not only to perform his engagements, but
also to repair all the damages that accrue naturally
from their breach … Every one who contracts
to pay money on a certain day knows that, if he fails
to fulfil his contract, he must pay the established
rate of interest as damages for his non-performance.
Hence it may correctly be said that such is the implied
contract of the parties.”
The following discussion will focus on the topic of
interest in the application of CISG. There is good reason
for this approach. First, from an economic point of
view, interest is far from minor. The importance of
this loss must not be understated. Second, a review
of CISG decisions of the last decades clearly demonstrates
that there are very few topics which have been of more
than occasional practical importance, and among these,
interest is one of the most important. Interest under
CISG, is the issue most often treated by both courts
and commentators.
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