Introduction To International Trade Law The CISG

Introduction to International Trade Law The CISG
AGENDA: Introduction to International Trade Law The CISG – General The

CISG – Some Details The CISG – Interpretation International Sales Contracts in
General Formation of Contracts The offer The acceptance
Introduction International trade law is the law that relates to the exportation of
goods or services from one country to another All companies involved in
international trade have to follow some rules in order carry out their
transactions in a organized and profitable way Why you should know about the
rules? - negotiations, contract drafting (pro-active) - solutions to an existing
problem (re-active) This module of the course aims to facilitate you with basic
knowledge of the central legal issues relating to the most important types of
international contracts and the main principles of international private and
procedural law.
Introduction Since the companies are registered in different states, therefore

they are subjects to the law of their home countries. When they decide to venture
into various international transactions, they will conclude contracts with their
parties, but, since sometimes they come from very different legal systems (ex.
Common law and Civil law countries), there was a need to unify somehow the
international trade rules Today there are some internationally recognized legal
texts (see next slide) that help the relevant courts to interpret the contracts
between the companies.
Unification of International Trade Law Intergovernmental: UNIDROIT rules

UNCITRAL – UN Commission on International Trade Law CISG, UN
Convention on the Carriage of Goods by Sea (Hamburg rules, 1978) UN
Convention on International Bills of exchange and International Promissory
Notes (1988), Arbitration Rules Regional 1: EU Sales law, (PECL), ECE 188
(Economic Commission for Europe standard rules for the Supply of Plant and
Machinery for export) Other regions, like OHADA, Pacifics/Asia, North and
South Americas Regional 2: The Nordic Countries NL 92, NLM 94
(ORGALIME S 2000, ECE 188) Non-governmental: ICC (International
Chamber of Commerce) Incoterms, ICC Model Sales Contract, ICC Arbitration
(the ICC Rules of Conciliation and Arbitration, 1998), UCC 500 (Uniform
Customs and Practice for Documentary Credits ICC Brochure nr. 500, 1993),
Model Commercial Agent Contract, Model Distributor Contract, UNCTA/ICC
Rules for a Combined Multimodal Transport
THE CISG CISG is the UN Convention on Contracts for the International Sale
of Goods CISG has the following structure:
PREAMBLE PART I. Sphere of application and general provisions

CHAPTER I. Sphere of application (Art. 1 - 6)
CHAPTER II. General provisions (Art. 7 -13) PART II. Formation of the
contract (Art. 14 - 24)
PART III. Sale of goods
CHAPTER I. General provisions (Art. 25 - 29)
CHAPTER II. Obligations of the seller (Art. 30)
Section I. Delivery of the goods and handing over of documents (Art. 31 - 34)
Section II. Conformity of the goods and third party claims (Art. 35 - 44)
Section III. Remedies for breach of contract by the seller (Art. 45 - 52)
CHAPTER III. Obligations of the buyer (Art. 53)
Section I. Payment of the price (Art. 54 - 59)
Section II. Taking delivery (Art. 60 - 65)
CHAPTER IV.
Passing of risk (Art. 66 - 70)
CHAPTER V. Provisions common to the obligations of the seller and of the

buyer
Section I. Anticipatory breach and instalment contracts (Art. 71 - 73)
Section II. Damages (Art. 74 - 77)
Section III. Interest (Art. 78)
Section IV Exemptions (Art. 79 - 80)
Section V Effects of avoidance (Art. 81 - 84)
Section VI. Preservation of the goods (Art. 85 - 88)
PART IV. Final provisions (Art. 89 – 101)

The CISG But: it does not mean that CISG governs ALL international trade:
around 90 % goes to arbitration or contracting parties agree that the Law of
England, Switzerland or New York will apply to their contract Important: CISG
is the model for other international instruments as well as for the modernisation
of domestic sales law and the EU directive on consumer guarantees PECL,
UNIDROIT Principles Nordic Sales Law Russian Federation, German BGB etc.
So: learning about the CISG, and learn about the most commonly accepted rules
on contract formation, interpretation of contracts, obligations of the parties,
remedies for breach
Some details: Article 1 “This Convention applies to contracts of sale of goods

between parties whose places of business are in different States: (a) when the
States are Contracting States; or (b) when the rules of private international law
lead to the application of the law of a Contracting State.” Comment: CISG is in
itself a private international law rule: for example the courts do not need to go
into choice of law analysis. Still, they will do this, as there are various limits or
reservations which are allowed by the CISG (Art. 92)
Some details The Convention deals only with “sale of goods” Article 2 “This
Convention does not apply to sales of goods bought for personal, family or
household use, unless the seller, at any time before or at the conclusion of the
contract, neither knew nor ought to have known that the goods were bought for
any such use; (b) by auction; (c) on execution or otherwise by authority of law;
(d) of stocks, shares, investment securities, negotiable instruments or money; (e)
of ships, vessels, hovercraft or aircraft; (f) of electricity.”
Some details Article 3 “(1) Contracts for the supply of goods to be manufactured
or produced are to be considered sales unless the party who orders the goods
undertakes to supply a substantial part of the materials necessary for such
manufacture or production. (2) This Convention does not apply to contracts in
which the preponderant part of the obligations of the party who furnishes the
goods consists in the supply of labour or other services.”
Some details Article 4 “This Convention governs only the formation of the
contract of sale and the rights and obligations of the seller and the buyer arising
from such a contract. In particular, except as otherwise expressly provided in
this Convention, it is not concerned with: the validity of the contract or of any of
its provisions or of any usage; the effect which the contract may have on the
property in the goods sold.”
Some details Article 5 “This Convention does not apply to the liability of the
seller for death or personal injury caused by the goods to any person.” Article 6
“The parties may exclude the application of this Convention or, subject to article
12, derogate from or vary the effect of any of its provisions.” Ex: “Danish law” is
a choice of CISG (but with art. 92 reservations)
Interpretation of the Convention (see also UNIDROIT Principles and PECL)

Article 7 “In the interpretation of this Convention, regard is to be had to its
international character and to the need to promote uniformity in its application
and the observance of good faith in international trade. Questions concerning
matters governed by this Convention which are not expressly settled in it are to
be settled in conformity with the general principles on which it is based or, in the
absence of such principles, in conformity with the law applicable by virtue of the
rules of private international law.” So, when the courts interpret the contracts
and the CISG, they guide after some general principles: good faith,
reasonableness, venire contra factum proprium (ex: seller has given buyer the
impression that he will not accept the buyers avoidance, but later changes
position, when buyer wants to revoke) etc.
International contracts in general Hierarchy: Contract -> Custom -> CISG This
means the contract is the underlying part of the transaction, then the usages and
customs in that particular domain/industry, then the CISG Also, parties are
allowed to derogate from the provisions of CISG as the need The rules on the
formation of the contract are subject the rules of sphere of application (1-3) and
general provision (4-13) Here, especially art. 4, 8 and 9 is of relevance as we shall
see Furthermore, we must be aware of the art. 92-reservation, Part II of the
Convention: Denmark, Finland, Norway and Sweden are not contracting parties.
Formation of contracts: the offer What is an offer? An offer is a sufficiently

definite communication from the offeror to the offeree containing an intention to
be bound (the promise). offeror offeree buyer/seller buyer/seller The contract is
made when the offer is accepted rightfully 2. May an offer be withdrawn?
Withdrawal is possible until the offer has taken effect. 3. Revocation: Revocation
is the right to revoke an effective offer.
Formation of contracts:
the acceptance 1. What is an acceptance? A contract has been formed when an

offer has been correctly accepted BUT THIS IS IMPORTANT:
2. Acceptance, counter-offer and Battle of Forms Article 19 “(1) A reply to an

offer which purports to be an acceptance but contains additions, limitations or
other modifications is a rejection of the offer and constitutes a counteroffer.”
Formation of contracts: the acceptance “(2) However, a reply to an offer which

purports to be an acceptance but contains additional or different terms which do
not materially alter the terms of the offer constitutes an acceptance, unless the
offeror, without undue delay, objects orally to the discrepancy or dispatches a
notice to that effect. If he does not so object, the terms of the contract are the
terms of the offer with the modifications contained in the acceptance.”
Formation of contracts: the acceptance “(3) Additional or different terms

relating, among other things, to the price, payment, quality and quantity of the
goods, place and time of delivery, extent of one party's liability to the other or
the settlement of disputes are considered to alter the terms of the offer
materially.”

Introduction To International Trade Law The CISG

Uploaded by

Copyright:

Available Formats

Introduction To International Trade Law The CISG

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction To International Trade Law The CISG

Uploaded by

Copyright:

Available Formats

Introduction to International Trade Law The CISG

AGENDA: Introduction to International Trade Law The CISG – General The

Introduction Since the companies are registered in different states, therefore

Unification of International Trade Law Intergovernmental: UNIDROIT rules

PREAMBLE PART I. Sphere of application and general provisions

PART III. Sale of goods

CHAPTER I. General provisions (Art. 25 - 29)

CHAPTER II. Obligations of the seller (Art. 30)

CHAPTER III. Obligations of the buyer (Art. 53)

Section I. Payment of the price (Art. 54 - 59)

Section II. Taking delivery (Art. 60 - 65)

Passing of risk (Art. 66 - 70)

CHAPTER V. Provisions common to the obligations of the seller and of the

Section I. Anticipatory breach and instalment contracts (Art. 71 - 73)

Section II. Damages (Art. 74 - 77)

Section III. Interest (Art. 78)

Section IV Exemptions (Art. 79 - 80)

Section V Effects of avoidance (Art. 81 - 84)

Section VI. Preservation of the goods (Art. 85 - 88)

PART IV. Final provisions (Art. 89 – 101)

Some details: Article 1 “This Convention applies to contracts of sale of goods

Interpretation of the Convention (see also UNIDROIT Principles and PECL)

Formation of contracts: the offer What is an offer? An offer is a sufficiently

the acceptance 1. What is an acceptance? A contract has been formed when an

2. Acceptance, counter-offer and Battle of Forms Article 19 “(1) A reply to an

Formation of contracts: the acceptance “(2) However, a reply to an offer which

Formation of contracts: the acceptance “(3) Additional or different terms

You might also like