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

2. 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

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

4. 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

5. 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

6. 85 states have signed the CISG

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

8. 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

9. 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

10. 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
Law for global Business.
Irwin, USA

11. 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
Law for global Business.
Irwin, USA

12. 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
Law for global Business.
Irwin, USA
Did the parties opt-in
to the CISG in a
choice of law clause?
YES

13. 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