International Sales Contracts Research Articles

국제물품매매계약에 관한 UN협약의 적용을 위한 내적흠결과 외적흠결에 대한 판례 경향

Purpose : In international sales contracts, even though the United Nations Convention on Contracts for the International Sale of Goods (CISG) is primarily applied, issues arise when the CISG lacks specific regulations or when its substantive content is insufficient. This study examines foreign case law related to such external and internal defects within the CISG framework.
 Research design, data, methodology : In the 2021 Supreme Court decision (case number 2021다269388), the court highlighted the lower courts' failure to consider international legal elements and instead applying domestic law to international sales contracts. In this study, we analyzed foreign case law concerning the issues of applying the CISG versus domestic law, as well as external and internal defects in the context of these laws.
 Results : Through this research, we were able to review case law from various countries regarding the preferential application of the CISG in international sales contracts. Additionally, in many cases involving external and internal defects, we observed the application of domestic law in accordance with principles of private international law, or the necessity to apply other international conventions.
 Conclusions : This research underscores the importance of a deep understanding and knowledge for the appropriate application and interpretation of the CISG in international transactions. It suggests the need for an international and comprehensive approach to legal issues related to international trade in the future, emphasizing the significance of understanding the application of international law both in education and in practice.

Recognition and Enforcement of Foreign Judgments in International Sales Contracts: A Comparative Study of the Brussels I bis Regulation and the Law of Ghana

Recognition and Enforcement of Foreign Judgments in International Sales Contracts: A Comparative Study of the Brussels I bis Regulation and the Law of Ghana

Overriding Mandatory Rules Applicable to International Sales of Goods: Evidence from South Africa

In private international law of contract, the law regulating the rights and obligations of contracting parties may (whether objectively determined or chosen by the parties), in some instances, be limited by either public policy considerations or other relevant mandatory rules. In this regard, the public policy and the overriding mandatory rules of three places – that of the forum state, the applicable law (if different from the lex fori) and the law of the place of performance (or a third state with relevant connection to the contract) – have been considered by both jurists and scholars as being important. However, this article is limited to matters concerning choice of law rules on overriding mandatory provisions (but not public policy considerations). This article assesses the various private international law rules utilised by the South African courts in ascertaining which overriding mandatory provisions must apply to international contracts for the sale of goods. The aim is to adopt a general private international law of contract rule that effectively addresses the difficulty in determining the state, whose overriding mandatory provisions may legitimately claim application over certain relevant issues in international sales contracts. To this end, the article considers the general application of the overriding mandatory rules of the forum and that of the applicable law state (lex causae) to determine if these laws may legitimately by applied to contracts as it is practiced by some courts. Thereafter, the article considers the application of the overriding mandatory rules of the place of performance (locus solutionis) or other relevant third states and demonstrate that it is the overriding mandatory provisions of “a relevant state” that may legitimately derogate the application of certain provisions of the proper law of an international contract.

Drafting International Sales Contracts to Avoid Force Majeure Issues Due to Import Bans on Genetically Modified Crops

Drafting International Sales Contracts to Avoid Force Majeure Issues Due to Import Bans on Genetically Modified Crops

Interpreting merger clauses in contracts governed by the CISG: delineating the scope for the use of extrinsic evidence

Abstract Under Article 8(3) of the United Nations Convention on Contracts for the International Sale of Goods (CISG), parties’ statements, prior negotiations and other external circumstances may be used to assess the presence of subjective or objective intent that can, in turn, be used to interpret contractual terms in international sales contracts governed by the CISG. However, parties to the contract can, through the adoption of an ‘entire agreement’ or ‘merger’ clause, opt out of this rule under Article 8(3) and restrict these interpretative tools in any manner as they see fit, depending on the requirements of their contract. Since the CISG does not explicitly address merger clauses and their effects, the CISG Advisory Council, in its Opinion no. 3, has provided a test to determine how the scope of a merger clause is to be determined. However, this test presents certain conceptual and practical limitations that render it inadequate for use in international commercial contracts. This article aims to analyse this test and the methods that have been used to interpret merger clauses under other uniform legal instruments and cases in common law jurisdictions. On this basis, the article proposes a test that attempts to fully capture the conceptual intent behind including merger clauses while ensuring that the parties are in the driver’s seat while determining their scope and effect.

Pravila Međunarodne trgovinske komore za korišćenje termina u unutrašnjoj i međunarodnoj trgovini - INCOTERMS 2020

The use of trade terms in sales contracts, especially international sales contracts, is customary and very common since it contributes to the acceleration of business transactions, concurrently increasing their certainty and predictability. The ICC Rules for the use of domestic and international trade terms -INCOTERMS 2020 have been in effective use since 1 January 2020. Their goal is to enable the development of global trade in an easier, more effective and safer manner. In this paper, the author analyses the development, importance and legal nature of INCOTERMS, with special reference to its current 2020 revision and particular focus on the seller's obligation to deliver the goods and risk transfer from the seller to the buyer.

An Examination of the Applicability and Propriety of the Vienna Convention on Contracts for the International Sale of Goods.

The unprecedented surge in international commerce created the need for a uniform law on the international sale of goods. Owing to the wide difference in various national laws governing sales transactions, the United Nations Convention on Contracts for the International Sale of Goods (CISG) was created to bridge this gap and to assist in promoting international trade. The CISG provides a set of uniform rules governing the formation, performance and remedies for breach of contracts for the international sale of goods within its scope. Its purpose is to provide a modern, uniform and fair regime for contracts for the international sale of goods thereby ensuring certainty in commercial exchanges. Particularly, the Convention applies to contracts for sale of goods between parties whose places of business are in different Contracting States, subject to the right of the parties to opt out in whole or part from the Convention. By all counts, the CISG represents the international community's most ambitious effort to promote efficiency and sustained growth of international trade. The innovations made by the CISG have been praised for decades however the loopholes inherent in the Convention have left parties to international sales contracts with so many challenges in their commercial dealings. This article attempts to examine the impact and relevance of the CISG to international sales transactions since it came into force. It examines among others, issues pertaining to the applicability of the CISG vis-a-vis its many pitfalls which constitute very serious challenges to parties whose sales negotiations fall within the purview of the Convention. This article concludes that whilst the CISG is a remarkable improvement from what used to be the status quo in international trade, it is nonetheless a vague document which did not coherently address the questions that necessitated its creation.

THE ROLE OF THE CISG IN CANADIAN CONTRACT PRACTICE: AN EMPIRICAL STUDY

In much of the legal literature, the fact that the United Nations Convention on Contracts for the International Sale of Goods (CISG) has been ratified by so many nations constitutes incontrovertible evidence of its success. This narrative fails to account, however, for the fact that private parties can choose to exclude the CISG from their international sales contracts. This Article draws upon a hand-collected dataset of contracts executed by public companies in Canada to show that these companies overwhelmingly choose to exclude the CISG from their international sales agreements. It also shows that these same companies are frequently unaware that selecting the law of a Canadian province can result in the application of the CISG and that few (if any) of these companies consciously select the CISG by selecting provincial law. While the Article turns up a few tantalizing hints that attorneys practicing in Quebec may be slightly more receptive to the CISG than attorneys practicing in the rest of Canada, the overall portrait that emerges is of a nation where this treaty is excluded by sophisticated actors in almost all cases. This finding raises important questions of whether the CISG is achieving its intended purpose of facilitating international trade.

Damages for the Cost of Repair and the Seller’s Right to Cure in International Sales Contracts

The article focuses on whether, in the case of a breach of a sales contract, the buyer can remedy the non-conformity of the goods independently and claim damages for the cost of repair without giving the seller an opportunity to cure his failure to perform. The analysis is based on the solutions adopted in the United Nations Convention on Contracts for the International Sale of Goods. The issue has recently given rise to divergent approaches in the literature. The article seeks to shed new light on the problem and offers a way of resolving the question of the interplay between the seller’s right to cure and the buyer’s right to claim damages for the cost of repair. The principal conclusion is that the buyer’s right to claim damages for the cost of repair and the seller’s right to cure do not stand on an equal footing. Rather, the seller’s right to cure has priority over the buyer’s damages claim. As long as the seller is entitled to remedy his failure to perform under the Convention, the buyer cannot cure the non-conformity independently. If he does so, he cannot claim compensation for the costs incurred as a result of the repair.

Formation of International Contracts and Formation of Contract in Pakistan: A Comparison.

This paper has aimed to compare the formation of international and Pakistani domestic contracts and to draw inference that when international Contracts becomes legally enforceable. International contracts are contracts which involves parties of more than one nationalities contra to domestic contracts having parties of the same nationality. Contract formation is a vital subject that have fell under the ambit of United Nations Convention on Contracts for the International Sale of Goods, 1980 (CISG). CISG Part II comprise of Section 14 to 24 (both inclusive) mainly governs the formation of the contract. One of the major barrier to develop the international trade is the glut of domestic laws; mostly international sales contracts are governed by domestic laws which are so diverse that contract obligations may become uncertain. CISG and Pakistani Law, Common Law has a number of similarities. Basic frame work of contract i.e agreement of the parties upon certain terms is same. Offer and subsequent acceptance of offer results into an agreement, agreement, if is legally enforceable becomes a contract. CISG provides more strictness than local laws. CISG, contra to domestic laws governing the subject in Pakistan, requires contracts to be specifically written, offers, if accepted shall be communicated, cannot be revoked if acceptance of offer is dispatched. Silence is specifically denied by CISG as acceptance and CISG put emphasis upon express acceptance either by words or by act performed. Common Law Rule of Mailbox, i.e acceptance is completed when letter is posted to offeror, is alien to CISG as it puts emphasis that offer is communicated whenever it reaches the offeror by the offeree. However, CISG and Domestic Law of Pakistan seems to be agreed that counter offer is not acceptance but a new offer.

The Requirements for the Inclusion of Standard Terms in International Sales Contracts

The problem dealing with the inclusion of standard terms and conditions in contracts is a problem that has engaged most legal systems. The United Nations Convention on Contracts for the International Sale of Goods, Vienna 1980 (CISG) does not expressly deal with this problem. Accordingly the solution to the issue must be found in an interpretation and application of the general principles found in articles 8, 14 and 18. One of the main objects of the CISG is the harmonisation of international trade law. It is generally recognised that in order to achieve harmonisation it is necessary that courts should interpret and apply the convention in a consistent and harmonious manner. Unfortunately a number of approaches have emerged from courts around the world in regard to the inclusion of standard terms. German courts have developed a strict approach which requires that the standard terms be made available to the addressee at the time of the conclusion of the contract. They also require that the standard terms be couched in the language of the main contract. In stark contrast an American court has used an approach which is very lax in regard to incorporation, even allowing incorporation after the conclusion of the contract. There is, however a more moderate approach set out in decisions of the Austrian Supreme Court where the court adopted an approach which is more akin to that found in most legal systems, namely that a clear incorporation clause in the contract is sufficient for the effective incorporation of standard terms. The author critically examines the case law, the various approaches and the underlying arguments on which they are based, before reaching the conclusion that the two extreme approaches should be rejected in favour of the more moderate approach. This approach is founded on a proper interpretation of the provisions of the CISG as well as being in step with international trade practice.

A Pluralist Approach to the Law of International Sales

International trade can support economic development and social upliftment. However, people are often discouraged from contracting internationally due to differences in legal systems which act as a non-tariff barrier to trade. This article focuses on the private law framework regulating international contracts of sale. During the twentieth century, the problem of diverse laws was primarily addressed by global uniform law such as the United Nations Convention on Contracts for the International Sale of Goods (CISG). However, uniform law is rarely complete and has to be supplemented by national law, trade usage or party agreement. Because of gaps that exist in the CISG the Swiss government made a proposal for a new global contract law. But is this a feasible solution to the fragmentary state of international trade law? In Europe, signs of reluctance are setting in towards further harmonisation efforts. The Proposal for a Common European Sales Law (CESL) was recently withdrawn, and now Britain has voted to leave the European Union; rumour having it that more countries might follow. The current private law framework for international sales contracts consists of a hybrid system where international, national, state and non-state law function side by side. This article submits that universalism is not per se the most efficient approach to the regulation of international sales law and that economic forces require a more varied approach for business-to-business transactions. The biggest challenge, however, would be to manage global legal pluralism. It is concluded that contractual parties, the courts and arbitral tribunals can effectively manage pluralism on a case-by-case basis. 
 

Gegenwart und Zukunft des Einheitskaufrechts

Uniform sales law forms a part of uniform private law that comprises a number of Conventions unifying either conflict-of-laws rules for sales or substantive sales law. The Hague Convention on the Law Applicable to International Sales of Goods (1955) and the Hague Uniform Sales Laws of 1964 achieved a certain legal uniformity for international sales contracts, but both were ratified by only a few Western European States. The UN (Vienna) Sales Convention of 1980 (CISG) has, in turn, developed into one of the greatest successes of uniform law-making in private law. The currently more than 80 Contracting States are proof of the fact that the CISG has been accepted by the global community of States. Its Contracting States include most major international trading nations and at the same time countries from all regions of the world. In the upcoming years, the Sales Convention's ratification by further developing States should be actively encouraged. By contrast, the extent to which the CISG has been accepted in commercial practice is very difficult to assess empirically. Much is to be said for the assumption that its contractual exclusion is significantly less common than sometimes alleged, given that the courts require a clearly expressed intention to exclude and that any exclusion needs to be agreed upon by both parties, which is often not the case. The assessment of the Sales Convention's practical importance is further complicated by its frequent application by arbitral tribunals, because the resulting arbitral awards usually remain confidential and thus inaccessible. In the future, the quest for a uniform interpretation of the Sales Convention is likely to be the most important challenge. Article 7(1) CISG provides some guidance by imposing three interpretative goals that in practice have mostly been observed. They have resulted in a generally uniform interpretation, although limited areas of non-uniformity exist. A general challenge arises from sales contracts' nature as everyday contracts in international trade, resulting in the uniform sales law's frequent application by non-specialised lawyers. It is therefore necessary to enable and assist a uniform interpretation through appropriate organisational arrangements, with a cross-border cooperation among specialised academics as the most suitable solution, designed to evaluate and assess international CISG case law and make it available to uniform law users in every country. The Sales Convention has furthermore contributed to legal uniformity through its use as a model for other international Conventions as well as for domestic and regional law reforms. By contrast, a future revision of the Convention's text seems neither desirable nor realistic, with its further development best being left to courts and legal academia. Finally, the increasing number of uniform law acts for international sales calls for a better coordination between the various law-making organisations. In particular, regional uniform law (notably EU law) should respect the existing uniform sales law by explicitly granting priority to the CISG.

Arbitration and Choice of Law in Cross-Border Transactions: A Potential Interplay?

How choice of forum and choice of law interact in cross-border transactions? Is there any connection between them that we should be aware of? How much weight is attributed to these choices and why? This article aims to provide real-world answers to these questions by presenting and analyzing the results of a Global Survey on the choice of law in international sales contracts (“the Survey”). The Survey reveals signals of interplay between arbitration and choice of law. It is suggested that, in some instances, once arbitration is chosen, the choice of law would play a rather ancillary role. The reasons for this assumption are further explored in this article.

The Withdrawal of Hungary’s Declarations under the CISG – Law and Policy

This article discusses the withdrawal by the Republic of Hungary of its two declarations under the United Nations Conventions on Contracts for the International Sale of Goods of 11 April 1980 (CISG). It provides an overview of Hungary's 'written form' reservation under Article 96 CISG as well as its more complicated interpretative declaration made with reference to Article 90 CISG, and in addition addresses the legal effects that the withdrawal of these declarations in 2015 have for international sales contracts involving parties from Hungary.

The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice

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The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice

The United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 (CISG) incorporates the freedom of form principle, allowing the conclusion of international sales contracts as well as their later modification to be made without regard to any form. The Convention does provide, however, for the possibility of individual Contracting States declaring a reservation against this principle, the scope and effect of which are described in Articles 12 and 96 CISG. Eleven among the current Contracting States to the Convention have made such a declaration, making the reservation to the freedom of form principle the most popular among the reservations permitted under the CISG.This article addresses a number of questions and difficulties in interpretation that have arisen under Articles 12 and 96 CISG, and proposes answers and solutions. It covers inter alia the reservation's drafting history, the current reservation states including recent signs for upcoming withdrawals of reservations, the prerequisites for making a declaration under Article 96 CISG and the consequences of such prerequisites lacking in certain reservation States. In its central part, it focusses on the effects of an Article 96 CISG reservation for the Convention's practical application, introducing the distinction between the reservation's 'negative' effect (i.e. the removal of Contracting States' public international law obligation to apply the freedom of form principle) and its disputed 'positive' effect (i.e. the question whether the reservation in itself leads to the applicability of the form requirements of the reservation State - a question that should be denied). It furthermore elaborates on the determination of the law governing the formal validity of CISG contracts in accordance with rules of private international law, and on the inadmissibility of the parties excluding the 'negative' effect through party agreement (Article 12 second sentence CISG).

To Exclude, to Ignore, or to Use? Empirical Evidence on Courts’, Parties’ and Counsels’ Approach to the CISG (With Some Remarks on Professional Liability)

In discussions about the practical importance of the United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 (CISG), it has frequently been stated that parties generally or exclude the Convention. Usually, such allegations are made without any empirical support being cited. This Chapter collects and organizes the increasing empirical evidence on how the CISG is excluded, ignored or actively used in practice, thereby measuring rumors against reality. The main part of the Chapter describes the existing empirical as well as anecdotal evidence on the CISG’s role as law in practice and attempts some explanations for the evidence found. It commences by (1) summarizing past empirical research on the CISG and continues by addressing the approaches demonstrated by (2) the courts, (3) by counsel and eventually (4) by the parties to international sales contracts. The following section outlines the possible risks that legal practitioners face when they ignore the CISG, thereby potentially exposing themselves to claims for professional malpractice. The final section briefly concludes. In summary, the Chapter proves that the claim of the CISG being “generally excluded” in practice, although still often heard and read, is not supported by empirical evidence. In particular, the courts in many CISG Contracting States are increasingly adopting a positive position towards the Convention, developing what can be categorized as a pro-Convention bias. Its practical effect is that agreements between the parties to exclude the Convention under Article 6 CISG - often drafted by counsel, not the parties themselves - are subjected to strict standards, therefore frequently failing to effectively exclude the CISG’s application. The approach of buyers and sellers towards the Convention is more difficult to determine, since empirical and anecdotal evidence is hard to find. The evidence that exists indicates an openness towards the CISG, with little if any general preference for domestic sales law instead of the Convention. The most skeptical position with respect to the CISG’s application can be found among legal counsel, some of whom try to avoid the investment of time and money necessary to familiarize themselves with its rules. Ignorance of the CISG, however, is no longer an attractive option for counsel when viewed against the risk of professional liability, which by now has become very real.

Green Eggs and Ham: The Cisg, Path Dependence, and the behavioural Economics of Lawyers' choices of Law in International Sales Contracts

(2010). Green Eggs and Ham: The Cisg, Path Dependence, and the behavioural Economics of Lawyers' choices of Law in International Sales Contracts. Journal of Private International Law: Vol. 6, No. 2, pp. 417-464.

Green Eggs and Ham: The Behaviour and Economics of Lawyer's Choices of Law in International Sales Contracts

This paper analyses lawyer's choices of law in international sales contracts. It identifies key reasons for opting in or out of the CISG across different jurisdictions. The paper then examines aspects of this choice from economic and psychological perspectives: from the ability to externalize costs, the psychology of choice of law decision making by lawyers, to game theory and group behaviour theory to predict future trends in choices across jurisdictions.