Extension for contract performance under the CISG 1980 and implications for Vietnamese businesses

Abstract

Being adopted in 1980 and getting effective from January 1, 1988, The United Nations Convention on Contracts for the International Sale of Goods (CISG) has become one of the most widely accepted international trade treaties. Despite its validity in Vietnam since the beginning of 2017, the Convention is still applied in a very limited way by domestic businesses. In fact, there have been a lot of sophisticated legal issues in international trade, especially in cases the parties fail to promptly or properly perform their contractual obligations or even in case of non-performance. This article is aimed to study the provisions of additional time for late performance (Nachfrist) under CISG 1980 in comparison with Vietnamese laws, and current situation of extension for contract performance under CISG 1980. The research collected, summarized, compared and analyzed data from trustworthy sources and conducted the in-depth interviews with the experienced experts in commerce, law, and dispute settlement. The results point out some similarities and differences in establishing the additional time between Vietnamese legal documents and the Convention. Furthermore, it is also showed in this article that disputes related to the Nachfrist clause are quite common and tend to decrease, but only with the participation of mainly European countries and China. In terms of content of dispute cases, the rate of disputes arising from the Seller's breach of contract is much higher than that rate from the Buyer’s. Regarding methods of dispute settlement, China has nearly always chosen arbitration while European countries have given priority to the court. From the analysis, some implications for Vietnamese businesses in the application and interpretation CISG’s provisions of contract extension were represented as solutions to help businesses improve their legal knowledge and limit risks in international commercial activities.