Un Vienna Convention on Contracts for the International Sale of Goods

This article briefly explains why business lawyers who may be involved in sales transactions with parties from different countries need to know and understand the United Nations Convention on Contracts for the International Sale of Goods (CISG), a treaty ratified by the United States and more than 80 other countries, including Canada, Japan, China and Cuba. The following discussion refers to a number of provisions of the CISG: each of which can be found here. Canada, China and Japan are joint trading partners with companies in the United States and Cuba may be in the near future. Understanding how and when the CISG can be avoided or maintained in the choice of law clause of a contract could make the difference between lawyers who carefully represent their clients, as the CISG differs from the Uniform Commercial Code (UCC), the law generally applied in similar transactions in most states in a number of important cases. Depending on the country, the CISG may constitute a small or significant deviation from local legislation regarding the sale of goods, thus providing significant advantages to enterprises in a Contracting State that import goods into other States that have ratified the CISG. Cedar Petrochemicals, Inc.c. Dongbu Hannong Chemical Co., Ltd., 2011 WL 4494602 (S.D.N.Y. 2011), included the sale of phenol from Dongbu Hannong Chemical Co., Ltd., a South Korean seller, to Cedar Petrochemicals, Inc., a New York buyer, and the final resale to a third party, Erista. The final agreement of the parties specified phenol, which meets a color specification of up to 10 Hazen units on the platinum-cobalt scale. The phenol corresponded to the time it was inspected in the South Korean port where the delivery was made. By the time the phenol reached Rotterdam, on its way to resale to Erista, the color had deteriorated to more than 500 Hazen units. The CISG applies only to commercial goods and products. Instead, under Article 11, treaties recalled in writing are not privileged over oral contracts.

However, a country may choose to make a declaration under article 96 CISG rejecting certain articles of the CISG, including article 11. This effectively revives the status of fraud for the purposes of this country. The most important question is what happens when a dispute arises between parties from a country with an article 96 declaration and a country without a country. This issue was discussed in Forestal Guarani S.A.c. Daros International, Inc., 613 F.3d 395 (3d Cir. 2010). Conversely, in the case of “international” contracts for the sale of goods between a United States company and a company of a non-Contracting State, which must be decided by a United States court, the CISG does not apply and the contract is subject to applicable national law under the rules of private international law. Articles 25 to 88; Sale of goods, obligations of the seller, obligations of the buyer, transfer of risk, joint obligations of the buyer and the seller. However, they can have a significant impact on the practical applicability of the United Nations Convention on Contracts for the International Sale of Goods[63] and therefore require careful consideration to determine each individual case.

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