International Contract Law Pt 1

CISG, Vienna Convention

United Nations Convention on Contracts for the International Sale of Goods

Number of countries applying Vienna Convention

97

Convention application

formation of contracts for the delivery of goods, rights and obligations of the seller and the buyer to each other, consequences arising from not properly carrying out contractual obligations.

Circumstances covered

• contracts dealing with the delivery of goods

• at least one of the contracting parties is connected with one of the Contracting States

Convention Sphere of Application according to Art. 1 Para. 1 CISG

contracts for the sale of goods

Convention Sphere of Application according to Art. 3 Para. 1 CISG

contracts for the supply of goods to be manufactured or produced

Definition of contracts for the sale of goods

all contracts that are primarily concerned with the delivery and transfer of ownership of goods in return for payment

Exceptions to Sphere of Application according to Art. 2 lit. b) and lit. c) CISG

goods purchased at auction, goods bought after lawful execution, or that have otherwise been levied

NOT Contracts For the Sale of Goods

• Barter and sales distribution agreements (But CISG applicable to option deals concluded within the framework of a sales distribution agreement)

• transactions concerning the transfer of rights and of real estate (BUT PC software covered)

Non-Application in Cases of Mixture of Supply of Goods according to Art. 3 Para. 1 and 2 CSG

• A manufacturing agreement, if the buyer himself makes available a substantial part of the materials for the manufacture or production of the goods in question

• if the seller has to provide additional labour or services not connected directly with the obligations associated with the delivery of the goods and outweighing delivery obligations

Further Contracts beyond CISG

• transactions involving stocks and shares, securities (i.e. financial securities), negotiable instruments or money, ships, aircraft and the supply of electricity (Art. 2 CISG)

• Consumer purchases (Art. 2 lit. a) CISG)

Applicaton to Specific Cases according to Art. 1 Para. 1 lit. a CISG

The seller and the buyer each has its place of business in a different Contracting State

Application: a company from a Non-Contracting State buys from a supplier from a Contracting State + parties have not agreed upon which law shall be used in construing the contract

Vienna Convention is applicable in accordance with Art. 1 Para. 1 lit. b) CISG in connection with Art. 4 Para. 1 lit. (a) Rome I

Art. 1 Para. 1 lit. b) CISG together with Art. 4 Para. 1 lit. (a) Rome I Regulation

Vienna Convention is applicable if the seller is based in a Contracting State

Application: a company from a Non-Contracting State buys from a supplier from a Non-Contracting State

not immediately applicable

Limitations according to Art. 92 et seq. CISG.

in circumstances where limiting conditions have been put in place by each Contracting State

Preclusion on the Sphere of Application according to Art. 6 CISG

• possibility to preclude the Vienna Convention or to modify its provisions

• Expressly or implied / BUT clear

• Being subject to the national law does not exclude CISG (Art. 3 Para. !. Rome I

• If included in general conditions of business → parties have to be notified and translated, if necessary

Inclusion on the Sphere of Application according to Art. 6 CISG

• parties can adopt the provisions of the Vienna Convention if the contract is not subject to the Vienna Convention by force of law

• lawful extent determined by private international law

Subject to Vienna Convention from POV of France and Germany

• all export business transactions

• all imports from any other Contracting State of the Vienna Convention

• those delivery of goods contracts whose parties have their habitual residences in different states and have adopted the national law of a Contracting State of the Vienna Convention.

NOT

• in the case of a purely domestic business transaction

• if the parties preclude the Vienna Convention

• if a company that is based in France (or Germany) obtains goods from a supplier whose place of business is situated in a Non-Contracting State of the Vienna Convention (e.g. India) and the contract is silent as to whether the Vienna Convention applies, then the national French (or German) law is not applicable and the sales law of the country where the supplier has its place of business (e.g. Indian law) governs the contractual relationship.