Download International Commercial Law * the CISG

Prof. Giorgio F. COLOMBO
Lesson n. 2
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CISG, Art. 1
◦ This Convention applies to contracts for the
sale of goods between parties whose place of
business are in different States:
(a) when the States are Contracting States
(b) when the rules of private international law
lead to the application of the law of a
Contracting State
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(1) Contract
(2) Sale
(3) Goods
(4) Parties
(5) a) different states b) private international
law
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The nationality of the parties is irrelevant
(Art. 1, (3) CISG)
The Contract must be relating to a sale of
goods
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Simple sale – «one shot»
Installment Sale – Conditional Sale?
Barter Agreements?
Commercial Leasing?
Distribution/franchise?
 Right to buy?
◦ Service?  prevalence of other elements?
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Business entities
Business entities acting outside their activity
Private party (as Seller)
State entities
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The places of business of the parties must be
in different contracting States
◦ The State must be a member of the Convention at
the time the parties enter into the contract
 Duration contracts
◦ What does place of business mean?
 Production?
 Decisional power?
 Legal entity?
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Criteria to be taken into account:
◦ Permanence/stability
 For example, a market stand in a fair is
not a place of business
◦ Autonomy from other parts of the
structure
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Art. 10 CISG
In case of more places of business, the one
which has the closest relationship to the
contract is relevant
Example
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Contract
Correspondence
Orders
Language?
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Through private international law. What does
it mean?
◦ (b) when the rules of private international law
lead to the application of the law of a
Contracting State
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When a State enters into the Convention, it
becomes the law of that State
As such, it will regulate international
contracts for the sale of goods
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Art. 95 CISG
Any State may declare at the time of the
deposit of its instrument of ratification,
acceptance, approval or accession that it will
not be bound by subparagraph (1)(b) of
article 1 of this Convention
Reservation
In this case, the CISG applies only if the other
country is a member to the CISG
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In international commercial law, party
autonomy is extremely important
Parties are generally free to choose which law
applies to the contract
However, it is important to be conscious of
the legal consequences of a choice
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A French company (purchaser) and a Japanese
company (seller) enter into a contract for the sale
of steel manufactures
Both France and Japan are parties to the CISG
The contract says: «This Contract shall be
governed by Japanese Law»
What will be the main source of rules to the
contract?
◦ A) The Japanese Civil/Commercial Code; or
◦ B) The CISG?
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Are the parties free to exclude the CISG (Art. 12)?
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An Indian company (purchaser) and an Italian
company (seller) enter into a contract for the
sale of sport cars
Italy is a party to the CISG, and made no
reservations. India is not a party to the CISG.
The contract says: «This Contract shall be
governed by Italian Law»
What will be the main source of rules to the
contract?
◦ A) The Japanese Civil Code; or
◦ B) The CISG?
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A Portoguese company (purchaser) and a Czech
company (seller) enter into a contract for the sale
of liquors
Portugal is not a member to the CISG. The Czech
Republic has made a reservation under Art. 95
The contract says «This Contract shall be
governed by Czech law»
What will be the main source of rules to the
contract?
◦ A) The Czech Civil/Commercial Code; or
◦ B) The CISG?
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An American company (purchaser) and an
Italian company (seller) enter into a contract
for the sale of ceramic tiles
Both the USA and Italy are members to the
CISG. The USA have made a reservation under
Art. 95
The Contract is silent on the applicable law
Is the CISG applicable to the Contract?
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A USA company (purchaser) and a Slovak
company (seller) enter into a contract for the
sale of furs
Both the USA and Slovakia have made a
reservation under Art. 95
The contract is silent about the applicable law
Is the CISG applicable to the Contract?
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Art. 2 CISG
This Convention does not apply to sales
◦ (a) of goods bought for personal use [...] unless the
seller neither knew or ought to have known that the
goods were bought for such use
◦ (b) by auction
◦ (c) on execution or otherwise by authority of law
◦ (d) of stocks, shares [etc.]
◦ (e) of ships, vessels, hovercraft or aircraft
◦ (f) of electricity
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The consumers were excluded for many
reasons
◦ The Convention is not aimed at regulating
consumer contracts, but business contracts
◦ National laws are specific and protective: the
Convention is based on parties’ equality
◦ National laws are often mandatory
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Exception
◦ Knew of ougth to have known
◦ Example?
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Finance, ect.
◦ Special markets
◦ Not a «good» (see next class)
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Ships, vessels, aircrafts, hovercrafts
◦ Those goods are most of the times subject to
registration in their countries and subject to special
rules (eg. flag)
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As mentioned, the CISG does not cover every
aspect of the international sale of goods
It mainly covers:
◦ The formation of the contract
◦ The respective rights and obligations of the seller
and the buyer
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It does not cover:
◦ The validity of the contract
◦ The effects on property
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Transfer of property is one of the most
complex issues in comparative law:
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Agreement
Possession
Agreement and possession
Freedom to agree about the moment