CISG United Nations Convention on Contracts for the International Sale of Goods 1980 Satu Pitkänen 2015

CISG – ”INTERNATIONAL TRADE ACT” CISG is applied in trade in movables If both parties’ places of business are in the CISG contracting states or the applicable law is that of a CISG contracting state

Parts of the CISG: 1. Sphere of application and general provisions 2. Formation of a contract 3. Sale of goods 4. Final provisions

TRANSACTIONS COVERED IN CISG Business contracts of international sale of goods INTERNATIONAL: - the buyer and seller must have their places of business in different states and either 1) Both of the states must be contracting parties to the CISG or 2) the rules of private international law must lead to the application of a contracting state SALE The prerequisite is that - the seller passes the title to the buyer - for a price GOODS Excluded 1) goods bought for personal, family or household use 2) auction sales 3) sales on execution or otherwise by authority of law 4) stocks, shares, investment securities, negotiable instruments, money 5) ships, vessels, hovercraft or aircraft MIXED SALES: Sales where a preponderant (=more than half) part of the obligations of the seller consists of the supply of labour or other services

CISG Is applied if both parties’ places of business are in the CISG contracting states Can be opted in or out by the parties E.g. ”The parties expressly reject any application of the UN Convention on Contracts for the International Sale of Goods” Causes preemption of domestic law

85 states have signed the CISG http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_status.html

t The map is not up-to-date, only referential

ISSUES NOT COVERED IN CISG Mixed sales Transactions where the buyer supplies a substantial part of the material Validity of the contract Property in the goods sold Seller’s liability for injury caused by the goods Form of the contract INTERNATIONAL: - the buyer and seller must have their places of business in different states and either 1) Both of the states must be contracting parties to the CISG or 2) the rules of private international law must lead to the application of a contracting state SALE The prerequisite is that - the seller passes the title to the buyer - for a price GOODS Excluded 1) goods bought for personal, family or household use 2) auction sales 3) sales on execution or otherwise by authority of law 4) stocks, shares, investment securities, negotiable instruments, money 5) ships, vessels, hovercraft or aircraft MIXED SALES: Sales where a preponderant (=more than half) part of the obligations of the seller consists of the supply of labour or other services

CISG DOES NOT APPLY To sales of goods bought for personal, family or household use unless the seller neither knew nor ought to have known that the goods were bought for such use To sales by auction On execution or otherwise by authority of law Sales of stocks, shares, investment securities, negotiable instruments or money Sales of ships, vessels, hovercraft or aircraft Sales of electricity

transaction (each party’s SCOPE OF CISG Is it an International transaction (each party’s place of business is in a different country)? YES YES YES Have both countries ratified the CISG? Is the contract a sale of goods transaction? Is it a commercial (merchant- to-merchant) transaction? Did the parties opt-out of the CISG in a choice of law clause? NO YES CISG governs YES Domestic law governs Modified from: Richards, E. 1994. Law for global Business. Irwin, USA

transaction (each party’s SCOPE OF CISG Is it an International transaction (each party’s place of business is in a different country)? YES YES YES Have both countries ratified the CISG? Is the contract a sale of goods transaction? Is it a commercial (merchant- to-merchant) transaction? Did the parties opt-out of the CISG in a choice of law clause? NO YES NO Has the country with the closest connection to the contract ratified the CISG? CISG governs YES Domestic law governs NO YES Does the ratifying country exclude the CISG coverage unless both countries have ratified? Modified from: Richards, E. 1994. Law for global Business. Irwin, USA

transaction (each party’s SCOPE OF CISG Is it an International transaction (each party’s place of business is in a different country)? YES NO YES YES Have both countries ratified the CISG? Is the contract a sale of goods transaction? Is it a commercial (merchant- to-merchant) transaction? Did the parties opt-out of the CISG in a choice of law clause? NO YES NO Has the country with the closest connection to the contract ratified the CISG? NO NO CISG governs YES Domestic law governs NO NO YES Does the ratifying country exclude the CISG coverage unless both countries have ratified? YES Modified from: Richards, E. 1994. Law for global Business. Irwin, USA Did the parties opt-in to the CISG in a choice of law clause? YES

INTERPRETING CISG International character of the convention aim at uniformity Plain meaning of the language in the CISG => the legislative history must not be taken into consideration General principles E.g. the parties’ duty to communicate, duty to mitigate damages Rules of Private International Law PLAIN MEANING: The preparatory work of the legislator is ignored GENERAL PRINCIPLES: Loyalty requirement PRIVATE INTERNATIONAL LAW of the relevant country