Session 7 - United Nation Convention on Contracts for the International Sale of Goods(CISG)

Course             : Law in International Business

Lecturer           : Dr. Shidarta, S.H., M.Hum.

Date                : 16 April 2013 (Session 7)

Topic               : United Nation Convention on Contracts for the International Sale of Goods(CISG)

Method            : F2F (Face to face)

United Nations Convention on Contracts for the International Sale of Goods (CISG) is s a treaty that is a uniform international sales law. CISG 1980 is a work of the United Nations Commission on international trade (UNCITRAL) as an effort to harmonizing trade law between countries which entered into force on 1 January 1988.

Reservations

1. Signer countries may make a reservation
2. Exclude certain parts of the convention
3. Exclude validity on one or some states ( for federal states )
4. International contract CISG allow a verbal contract ( oral contract of sale )

The purpose of CISG is preparing or promoting the adoption of new international conventions, model laws and uniform laws, and promoting the codification and wider acceptance of international trade terms, provisions, customs and practices, in cooperation with appropriate organizations operating in this field.

Validity of CISG

Requirement:

·         The parties ( the sale ) are in different countries

·         The country become a participant of CISG convention

·         In validity contract of CISG not obstructed by choice of law

Modifications in the contract

The parties can avoid modification by making the clause “Four Corner Clause”

the scope of the CISG:

·

         Based on the nature of transaction :

1.      Consumer Contract

2.      Sales by Auction

3.      On execution

·         Based on the nature of good :

1.      Sale of securities

2.      Sale of ship and planes

3.      Sale of electricity

Fundamental breach of contract

A brench of contract is fundamental if the damage it causes to the other party is so substantial that he is entitled to expect under the contract.

The requirement of the contract agreement :

-          coercion

-          Fraud

-          misguidance

-          Undue Influence

CISG Binding Power

CISG actually has no force of law, CISG’s article 95 said that “any state may declare when delivered up the instrument of ratification… that the state was not committed themselves to article 1 paragraph ( 1 ) ( b ) this convention.” Article 6 CISG allow parties override the validity of CISG either whole or in part. Thus, the parties could design a clause option of law sets law as options, a country but ignoring CISG as a whole.

Rights and Obligations of The Seller

Provisions CISG only regulate specifically about obligations of the parties as dictated in chapter II about liability the seller and chapter III in CISG that enumerates about liability buyer. In reciprocal can be inferred that an obligation the seller is the right of the buyers similarly contrarily.

Conclusion :

Through these lessons, we could understand that CISG is a work made by United Nation to harmonize law of trade between countries. We are also can know and understand the requirements, validity, scope, exception and others in CISG.

Reference :

Wikipedia

UNCITRAL Website

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