1、International Trade lawUnited Nations Convention on Contracts for the International Sale of GoodInternational Trade LawI.A Short History of the Drafting of CISGA.The Drafting of CISGThe Commission combined the two draft conventions into one-the United Nations Convention on Contracts for the Internat
2、ional Sale of Goods(CISG,)or popularly known as the Vienna Convention)-and submitted to the Diplomatic Conference held at Vienna.CISG came into force in 1988 with the required 10 ratifications.Since then,there has been a steady stream of ratifications.Until today,CISG is still the only one internati
3、onal convention passed by the United Nations in the field of international trade law.1.International Trade LawI.A Short History of the Drafting of CISGB.Limitations on the Application of CISG CISG Has No Provisions Allowing Adoption of the Convention Under CISG Article 6,the parties may expressly de
4、termine not to be governed by(“opt out of”)the Convention.Also,it should be noted that,although CISG Article 6 gives wide recognition to party autonomy(the ability of the parties to determine the terms of their deal),it only recognizes the ability of the parties to exclude the Convention.Namely,CISG
5、 itself has no provisions allowing adoption of the Convention through party autonomy.1.International Trade LawI.A Short History of the Drafting of CISGB.Limitations on the Application of CISG CISG Does Not Define Contract of Sale“However,under the Convention,the application to some types of transact
6、ions is problematic.Known problems include consignments,in which the buyer may return any goods which cannot be sold,barter transactions or counter trade,“in which goods are exchanged for other goods and not for money,and conditional sales,in which the seller retains title to secured payment.2.3.CIS
7、G Does Not Define Goods“In the Convention,the term goods is unclear .Article 2 only expresslyInternational Trade LawI.A Short History of the Drafting of CISGB.Limitations on the Application of CISG excludes con-tracts for the sale of commercial paper,investment securities,ships,aircraft,hovercraft a
8、nd electricity.Article 2 also expressly excludes international sales of goods to consumers,so that the Convention would not conflict with consumer protection laws,which are often mandatory law.Article5 provides that the Convention does not govern causes of action against the seller for death or pers
9、onal injury,even though arising out of sales transaction,because any provisions on such causes of action would conflict with mandatory law of many jurisdictions.3.International Trade LawI.A Short History of the Drafting of CISGB.Limitations on the Application of CISG CISG Does Not Govern the Validit
10、y“of the Contract or Its Effect on Title to the Goods Under CISG Article 4,the Convention states that it governs only the formation of the contract“and the right sand obligations of the parties to the contract.It does not govern the validity of the contract,or its effect on title to the goods,includ
11、ing presumably most rights and obligations of third parties to the contract.4.International Trade LawI.A Short History of the Drafting of CISGC.CISG Rules of Interpretation The underlying goal of CISG is the creation of a uniform body of international commercial sales law.In deciding questions gover
12、ned by the Convention,Article 7(2)directs a court to look to the following sources,in this order:(1)the Convention,(2)the general principles on which the Convention is based,and(3)the rules of private international law.1.The ConventionWhen the words of CISG itself require interpretation,Article 7(1)
13、directs a court to consider(a)the international character of the2.International Trade LawI.A Short History of the Drafting of CISGC.CISG Rules of Interpretation Convention,(b)the need to promote uniformity in the Conventions application,and(c)the observance of good faith.Article 7(1),however,does no
14、t describe the sources the Court mayor-must-use in making its interpretation.2.General Principles Two that have been suggested are(a)a party to a contract has the duty to communicate information needed by the other party,and(b)the obligation to mitigate damages resulting from a breach.3.Internationa
15、l Trade LawI.A Short History of the Drafting of CISGC.CISG Rules of Interpretation Although CISG does not give a list of general principles,it does set out the mechanism for determining them.They must be derived from particular sections within the Convention,and then extended,by analogy,to the case
16、at hand.3.Rules of Private International LawThey may be used,however,only when CISG itself does not directly settle a matter,or when the matter cannot be resolved by the application of a general prinaple derived from the Convention itself.4.International Trade LawI.A Short History of the Drafting of
17、 CISGC.CISG Rules of Interpretation Statements and Conduct of the PartiesA contract is sometimes said to be formed only when the parties have a meeting of minds or a common intent.This comes from the idea,commonly accepted in many civil law countries,that parties are bound by a contract only when th
18、ey subject their will to its terms.This theory is called subjective intent approach.5.D.Trade Usage and CISG1.Trade usages and trade terms play an important role in international trade law,and for a convention to be successful it needs to be sympathetic to them.International Trade LawI.A Short Histo
19、ry of the Drafting of CISGD.Trade Usage and CISGThe CISG recognizes both express and implied usages.Knowledge plays a vital role in incorporating usages impliedly:That is,whether the parties knew or ought to have known of the usage,that the usage is widely known in international trade,and the usage
20、is regularly observed by the parties in contracts of the type involved in the particular trade concerned.2.1.The Principle of Place of BusinessA contract for the sale of goods will come within the ambit of the CISG if:E.Sphere of Application International Trade LawI.A Short History of the Drafting o
21、f CISGE.Sphere of Application the places of business are in different states;and both these states are contracting states to the CISG and both parties know that they have places of business in different states on the basis of the contract,or dealings or information disclosed before or at the conclus
22、ion of the contract.Generally,the following factors will have to be considered in determining the place of business on the basis of Article 10:the place where the business organization is registered,the place where important decisions regarding the organizations running are taken,the place where the
23、 transaction is to be performed,the permanency of the place,etc.1.International Trade LawI.A Short History of the Drafting of CISGE.Sphere of Application Students are required to note that CISG may apply even if the buyers and the sellers places of business are not in a contracting state.1.2.Sales a
24、nd Issues ExcludedThe following types of sales have been specifically excluded from the Convention:(1)Consumer goods sold for personal,family,or household use.(2)Goods bought at auction.(3)Stocks,securities,negotiable instruments,or money.(4)Ships,vessels,or aircraft.International Trade LawI.A Short
25、 History of the Drafting of CISGE.Sphere of Application(5)Electricity.(6)Assembly contracts for the supply of goods to be manufactured or produced wherein the buyer provides a“substantial part of the materials necessary for such manufacture or production.”(7)Contracts that are in“preponderant part”f
26、or the supply of labor or other services.(8)Liability of the seller for death or personal injury caused by the goods.(9)Contracts where the parties specifically agree to optout of the Convention or where they choose to be bound by some other law.2.International Trade LawII.Formation of the ContractA
27、.Invitation OfferAn offer is not capable of being turned into a contract by acceptance.It is used to invite others to make offer.1.1.B.The Offer An offer is a proposal by one person to another indicating an intention to enter into a contract under specified terms.In the words of the Restatement(Seco
28、nd)of Contracts&24,an offer must be a manifestation of willingness to enter into a bargain,so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.International Trade LawII.Formation of the ContractB.The OfferRequirements of Offer(1)The c
29、ontract law of most nations holds that an offer must be addressed to one or more specific persons.2)Under Article 11 of the CISG an offer must be sufficiently definite and indicate the intention of the offeror to be bound.An offer is considered sufficiently definite if it(a)cates or describes the go
30、ods.(b)expressly or implicitly specifies the quantity.and(e)expressly or specifies the price for the goods.2.The Binding of Offer3.International Trade LawII.Formation of the ContractB.The OfferArticle 14 of the CISG states:(1)Until a contract is concluded an offer may be revoked if the revocation re
31、aches the offeree before he has dispatched an acceptance;(2)However,an offer cant be revoked.(a)if it indicates,whether by stating a fixed time for acceptance or otherwise,that it is irrevocable or(b)if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has a
32、cted in reliance on the offer.3.Revocation of OfferRevocation of offer means that the offeror notifies the offeree before4.International Trade LawII.Formation of the ContractB.The Offeracceptance of the of the offer so as to be free from it.Common law countries and civil law countries differ to whet
33、her the offeror is entitled to the revocation of offer before acceptance.though those two legal families are getting more and more close.Article 16 of the CISG states:(1)Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance
34、.(2)However,an offer cannot be revoked:(a)if it indicates,whether by stating a fixed time for acceptance or otherwise,that it is irrevocable;or(b)if it was reasonable for the offeree4.International Trade LawII.Formation of the ContractB.The Offerto rely on the offer as being irrevocable and the offe
35、ree has acted in reliance on the offer.4.C.The Acceptance Requirements of Acceptance(1)An acceptance must be made by the offeree.(2)An acceptance must be made within the period of validity.(Late acceptance is a counteroffer only.）(3)An acceptance must match the terms of the offer exactly and1.Intern
36、ational Trade LawII.Formation of the ContractC.The Acceptance unequivocally.Otherwise it is considered a counteroffer and thus a rejection of the original offer.1.Time of AcceptanceUnder the common law,a contract is formed when the acceptance is dispatched by the offeree.In the case of an acceptance
37、 by letter,the time of dispatch is the time the letter is put into the hands of the postal authorities.This is known as Mailbox rule.“Under most civil law countries,the receipt theory is used.2.International Trade LawII.Formation of the ContractD.Battle of the Forms The Battle of the Forms under the
38、 Common LawIn the United States the mirror image rule has been modified by statute to deal with modern business practices and to avoid the problems.Under UCC 2-207:(1)A written confirmation which is sent within a reasonable time operates ns an acceptance even though it states terms additional to or
39、different from those in the purchase order,unless the confirmation is expressly made conditional on assent to the additional or different terms.1.International Trade LawII.Formation of the ContractD.Battle of the Forms(2)If both parties are merchants,any additional terms contained in the sellers con
40、firmation automatically become a part of the contract unless:(a)The buyers purchase order expressly limits acceptance to the terms in that order;(b)The additional terms in the confirmation materially alter the terms of the order,or (c)The buyer notifies the seller of an objection to the additional t
41、erms within a reasonable time after receiving the confirmation containing the new terms.1.International Trade LawII.Formation of the ContractD.Battle of the Forms The Battle of the Forms under the CISGThe CISG rules fall somewhere between the rules set out by the common and civil law containing new
42、terms that do not materially alter the terms of the offer becomes a part of the contract,unless the offeror promptly objects to the change .Article 2.11 of the UNIDROIT PICC states:(1)A reply to an offer which purports to be an acceptance but contains additions,limitations or other modifications is
43、a rejection of the offer and constitutes a counteroffer.(2)However,a reply to an offer which 2.International Trade LawII.Formation of the ContractD.Battle of the Forms 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 to the discrepancy.If the offeror does not object,the terms of the contract are the terms of the offer with the modifications contained in the acceptance.2.International Trade lawThanks for Watching
