CISG In Brief

Posted on 11 December 2015

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Translucent Globe on Euros

Image by © Rob Chatterson/Corbis

When I draft a cross-borders contract on sale of good, I prefer to adopt Vienna Convention on Contracts for the International Sale of Goods 1980 (CISG) as the preferred choice of law.

CISG is the result of United Nations Commission on International Trade Law (UNCITRAL) in harmonizes the law relate to international trade. It becomes binding once the country adopts it as part of the national law.

However, there are some restriction on its usage.

CISG  is  only applicable for international sale of goods, and either the applicable law adopts CISG as national law, or the parties in the contract adopt CISG as choice of law, Art 1. Thus, domestic trade is excluded from its application.

As at today, only 83 countries have ratified CISG. Please take note, some countries did exclude certain provisions in CISG as part of the national law, which is permissible by Art 95.

Therefore, if the applicable national law in the contract does not recognized CISG, then the parties need to make a specific choice of law and apply CISG.

At the same, if the parties have adopted CISG as the choice of law, they do have the option to exclude certain provision in CISG from the contract, as permissible in Art 6.

CISG only applicable to international sale of goods for commercial use. Art 2 expressly exclude the sale of goods for personal, family and household use.

Further, CISG only govern the formation of the contract, as well as the rights and obligations of the parties, per Art 4. Therefore, CISG is applicable in parallel with the national law, and national law will fill up the vacuum left by CISG.

I will discuss the salient points of CISG, in my next article.

Note: This article also published at LinkedIn.

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