1. CISG in Legal Practice International Transactions and Arbitration
Dr. Florian Mohs, LL.M.
Pestalozzi Attorneys at Law Ltd.

2. Introduction
Litigator’s perspective: in most CISG cases, the contract in dispute contains the choice of law of a CISG contracting state without an explicit reference to the CISG
Transaction lawyer’s perspective: let us exclude the CISG, it could be applicable, and we both do not know what it is
Client’s interest: what is the advantage or disadvantage of having the CISG govern my company’s sales contracts?
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3. Litigators’ perspective
Most cases involve the choice of law of a CISG contracting state without an explicit opt-in or opt-out, e.g. «This Agreement is governed by Swiss substantive law»
In state court litigation in a CISG contracting state, it is unanimously held that a reference to the law of a contracting state does not exclude the CISG
In state court litigtion in a non-contracting state, a reference to the law of a contracting state includes the CISG as the part of the chosen law that deals with international sales contracts
In international arbitration, the situation should be the same as in state court litigation in a non-contracting state, but sometimes, given the predominance of the parties’ choice, the argument is raised whether the parties intended to have the CISG govern their contract?
In any event, the uncertainty of whether or not the CISG governs the contract in dispute adds another layer to the controversy – the determination of the law applicable to the contract
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4. Transaction lawyers’ perspective
The choice of law clause is of utmost importance, even in sophisticated contracts
The applicable law will be determined by bargaining/market power
The choice of law can be used as a bargaining chip
Choosing the client‘s domestic law is an opportunity to save costs
If the client can implement «its» domestic law into the contract and its domestic law gives primacy to the parties’ agreement (i.e. recognizes the principle of «freedom of contract»), then preference for CISG to be based on its quality as tailor-made law for international sales
The CISG can be used as an opportunity if the client‘s domestic law cannot be implemented (or only at a greater price), because the counterparty has more market power
Most importantly, the CISG is „neutral“ if both (or none of the) parties have their place of business in CISG contracting states
The CISG is easily accessible (free internet databases, English translations of foreign judgments and arbitral awards, Doctrine in English)
Choice of CISG acceptable to counterparties in different contracting states
The CISG should be either included or excluded explicitly
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5. Client’s perspective
If representing a seller, is the CISG too buyer friendly? Or if representing a buyer, is the CISG too seller friendly?
Notice of non-conformity
Strict liabilty for damages
Avoidance of contract requires fundamental breach (or non-performance within an additional period of time)
Derogation of certain articles of the CISG depending on whether client acts as seller or buyer
The CISG fits different industry sectors
The CISG fits the peculiarities of the physical trade of commodities
The CISG fits the delivery of machinery with installation and commissioning at the buyer’s facilities
The CISG can be an opportunity to save costs
Exclusion of CISG in SPAs, APAs, and licence agreements
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6. Conclusion
The CISG in its entirety is balanced, and not buyer or seller friendly
The CISG can be adopted to the advantage of the client depending on whether it acts as seller or buyer
The CISG can be adopted for use in different industry sectors
The choice of law is important, even for sophisticated agreements
The scope of the CISG is limited, but encompasses all fundamental questions of contract formation and determines the obligations and remedies of both seller and buyer
The CISG provides for a modern and reasonable system of remedies for breach of contract
Default remedies often needed in practice, considering that contracts often focus on duties / obligations
CISG (remedies) interacts well with INCOTERMS (duties)
The CISG fits different industry sectors, in particular, the physical trade of commmodities
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7. Thank you! Dr. Florian Mohs, LL.M. Partner
Pestalozzi Attorneys at Law Ltd.
Loewenstrasse 1
8001 Zurich
Switzerland
Phone:
Fax:
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