Introductory Elements on 1980 United Nations Convention on Contracts for the International Sales of Goods
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22 Martie 2010 |
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E. Platis, C. Bazilescu - Limited Liability Law Partnership |
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The civil or commercial relations containing an internationality element are regulated by private international rules or other conventions regulating a specific institution.
As far as the international sales of goods are concerned, the private international law rules apply whenever there is no special convention regulating the respective relation.
When referring to international sale of goods, the following three conventions should be considered, i.e. 1955 Hague Convention on the law applicable to International Sales of Goods (Hague Convention), 1980 Rome Convention on the Law Applicable to Contractual Obligations (Rome Convention) and 1980 Vienna Convention of the United Nations on Contracts for the International Sales of Good (CISG or the "Convention"). Whilst Hague and Rome conventions deal with establishing a uniform conflict law, CISG deals with establishing a uniform substantive law.
This article is intended to provide an introductory presentation of CISG. First part mentions general data on the convention and its nature, second part elaborates on the application of the convention, whilst third and fourth parts mention why someone might consider applying the convention and web-based sources useful for those working with the convention.
Relevant data. Nature of CISG.
CISG was adopted on 11 April 1980 in Vienna and entered into force on 1 January 1988. As of 18 May 2009, the United Nations reports that 74 States have adopted the CISG.
Romania has adopted CISG on 1 June 1992.
CISG is a uniform substantive law characterized by specialty and not a private international law convention. In this respect CISG:
Applies only to international sale of goods depending on the place of business of the parties;Prevails over private international law provisions, either domestic or international, such as Rome or Hague Conventions;Resolves the substantive issues directly, avoiding the double-step approach.
Application of CISG
CISG applies in case of contracts of sale of goods between parties whose places of business are in different States (a) when the states are contracting states of CISG or (b) when the rules of private international law lead to the application of the law of a contracting state of CISG.
In addition, parties shall not be regarded as having their places of business in different states whenever such fact does not appear either from the contract or from any dealings between or from information disclosed by the parties at any time before or at conclusion of the contact.
Although CISG represent substantive law and not conflict law, forum shopping is very important in establishing whether the convention applies or not.
In assessing CISG application, the following steps could be considered: dependent on the place where the procedures have been started to establish whether the forum is located in a contracting or a non-contracting state. Once it has been established that the procedures have been initiated in a contracting state, someone should reflect on whether the contract has an international or a non-international character. If it has an international character, next step would be to decide on the applicability or non-applicability of CISG judging on possible exclusions included by the parties in the contract, either express or implied, and on the substance of the contract (its object, including the type of the sold good). In relation to the application of CISG it should be noted that it is advisable, especially in contracts for sale of goods concluded with an US counterparty, to either expressly exclude within the agreement the application of CISG or, if the parties wish for CISG provisions to govern their contractual relation, to expressly stipulate its application.
CISG governs (a) the formation of contracts for the international sale of goods, (b) the obligations of the buyer and seller for the international sale of goods and (c) the remedies for breach of contract and other aspects of the contract for the international sale of goods.
CISG does not cover, amongst others, (a) the validity of the contract or (b) the effect which the contract may have on the ownership of the goods sold. In these cases, the gaps are to be filled in by domestic law determined as per private international law.
CISG applies to contracts for sale of goods, having as specific obligation, for the seller, the delivery of goods, transfer the property in the goods, and, if the case, hand over any documents relating to the goods, whilst for the buyer to pay for the goods. As example, CISG shall not apply if the value of the goods to be delivered is lower than that of the services performed, i.e. the value of the services is more than 50% of the price of the goods.
Do we want to apply CISG?
The decision to apply CISG is dependent on the position of the client, as seller or buyer.
In this respect, two main CISG provisions are to be noted:
Article 74, which limits the damages only to foreseeable ones – in which case we might consider CISG for the case when it is possible that a client seller would fail to properly fulfill its obligation to provide the goods object of the sale Article 78, pursuant to which the interest on due amounts occurs as of due date – in which case we might consider CISG for the case when it is possible that our client seller would want to receive interest as soon as the buyer fails to pay the price.
IV. Web Sources
Below we have included reference to three web sites containing relevant and useful information when working on assignments related to CISG.
As a general comment, we underline the importance of the decisions ruled by courts of law making the application of CISG. Since CISG is a uniform substantive law, it means that when ruling over a dispute in which CISG is applicable, the court of law, irrespectively of its nationality, will use the same material law. In addition, for the purpose of assuring the uniform application of CISG, the courts are under the obligation to refer and take into consideration previous decision of other courts, irrespectively of the state in which they were ruled.
Consequently, when analyzing and interpreting CISG, the jurisprudence should be regarded as an important source.
We enumerate here www.uncitral.org, www.unilex.info, and http://cisgw3.law.pace.edu.
