PART I: Sale of Goods
WEEK 2: CISG - scope & interpretation
Reading: Chapter 8
1. Formation of CISG
● CISG: the most significant legal instrument operative in the field of international sales
● The Hague Convention significant drafting starting point for CISG
○ But not so successful - only 9 ratified parties
○ It was very Europe-focused
■ Did not include big developing nations, such as the US (lecture slides)
● The origin of CISG is found in the work of the United Nations Commission on
International Trade (UNCITRAL)
○ Crucial value added by UNCITRAL was the universal representation
● Now ratified by 83 states (including most major trading nations of the world)
○ US, China, Singapore, Australia, most European Nations (except UK, Ireland,
and Portugal)
The Genesis of the Convention
● The most significant legal instrument operative in the field of international sales is the
Vienna Convention on Contracts for the International Sale of Goods (CISG)
○ Most of the major trading notions have been ratified
○ Considerable influence over sales law across the world → as predecessor
Rabel and UNIDROIT
, ● The inspiration for CISG was provided by the Austrian jurist Prof Rabel
○ He began working on international uniform sales law in the late 1920s → Recht
des Warenkaufs
● His work was taken and developed by UNIDROIT
○ Was approved in 1939
○ Suspended because of WWII
○ Work was resumed and bore fruit in two Hague Conventions:
■ The Uniform Law on the International sale of goods
■ Uniform Law on the Formation of Contracts for the International Sale of
Goods
Assessment of the Hague Conventions
● Not so successful → only nine states ratified them
● But overall quite significant in the end (by Peter Schlechtriem’s opinion)
○ But the impact is mostly on Europe, elsewhere extremely muted or non-existent
● Why did the Hague Conventions fail to secure acceptance in the international
marketplace?
○ Perceived as a European project
■ The role of the states beyond the shores of Europe was very limited
■ Almost all of the ratifying states are European
○ Failed to secure participation of the developing nations of the world
○ Lack of participation resulted in a lack of ownership of the project
■ States that had not participated in the drafting felt no obligation to ratify
them
○ Conventions could be ratified on an opt-in basis
■ Even if they were ratified, they did not have the practical effect
● For example, the UK joined on opt-in basis and continued to
reference the law of the nation-state
○ Technical weaknesses in Conventions
■ Good first attempt, but not sufficiently good to persuade States to ratify
them
● The Hague Convention significant drafting start for CISG
The origin of the CISG
● The origin of CISG is to be found in the work of the United Nations Commission on
International Trade (UNCITRAL)
○ UNCITRAL was launched in 1966
● They send Hague Conventions with commentary by Prof Tunc to all governments and
invite to comment on the Conventions and indicate their attitudes toward ratifications
○ Major trading nations, such as US, Soviet Unions and China did not intend to
ratify Hague
● The crucial value added by UNCITRAL was the universal representation
● First produced draft in 1976
● Diplomatic conference in Vienna in 1980 and adopted on April 11 1980
,Entry into force
● The Convention did not come into force immediately
○ Came into force on 1 Jan 1988
○ Now ratified by 83 states (including most major trading nations of the world)
■ US, China, Singapore, Australia, most European Nations (except UK,
Ireland, and Portugal)
The Progression
● UNCITRAL was launched in 1966
○ Different from Hagues → they asked for comments from governments
■ They looked at greater consultation, universal representation
○ Major trading still did not want to ratify
● Then they begin again new drafts with grater consultation
○ First draft in 1976
○ Diplomatic conference held in Vienna
○ Convention adopted in 1980, came into force in 1988
● Some big countries are still not members, such as UK, Portugal
2. Application
The Sphere of Application
Article 1
→ sets out three important details to consider in the context of the application based on art. 1:
1. Type of contract
● Contracts of sale → no definitions for this
○ Articles 2 and 3 deal with exclusions
■ Exclude consumer contracts
○ 3(1)
○ 3(2)
● Seems to be determined on a quantitative rather than qualitative basis
○ If more goods → CISG applies
, ○ If more services than goods → not CISG
2. International requirement
● Can take on different definitions
○ Can take the place of the parties
○ Place of business (art. 1 considers this)
● Not always clear
● Why have international sales laws?
○ Sales across borders can cause a lot of problems → need for uniformity
3. Connecting factor
● Contract → contracting state
● Two limbs as connecting factors
1. Both parties are contracting states to CISG (83 states)
a. Clearly laid out in art. 1(1)(a) - Convention applies to two different
contracting states
b. Article 1(1)(a) is now predominant due to the number of party
states
2. Rules of private international law lead to the law of the contracting state
1(1)(b)
a. If private int law and forum state are non-contracting, → domestic
law
b. If based on PIL leads to forum state being a contracting state →
CISG
Types of contracts covered by the Convention
● Contracts of international sale of goods
○ No definition
○ Excludes certain contracts from its scope
■ Art. 2 and 3 exclude consumer sales from CISG
■ Art. 3(2) excludes contracts in which part of the obligation of the party
who furnishes the goods consists in the supply of labour or other services
○ Contracts for the sale of goods to be manufactured or procedures are to be
considered as contracts of sale
■ Exception if the buyer undertakes to supply a substantial part fo the
materials necessary for such manufacture or production
The internationality requirement
● International in Art. 1 refers to the place of business of the parties to the contract of sale
○ Not whether goods themselves have crossed international borders
● Why is such a focus on international and cannot just be universal?
○ Usually, international sales give rise to problems which not so often in somatic
sales
● Developments within Europe
WEEK 2: CISG - scope & interpretation
Reading: Chapter 8
1. Formation of CISG
● CISG: the most significant legal instrument operative in the field of international sales
● The Hague Convention significant drafting starting point for CISG
○ But not so successful - only 9 ratified parties
○ It was very Europe-focused
■ Did not include big developing nations, such as the US (lecture slides)
● The origin of CISG is found in the work of the United Nations Commission on
International Trade (UNCITRAL)
○ Crucial value added by UNCITRAL was the universal representation
● Now ratified by 83 states (including most major trading nations of the world)
○ US, China, Singapore, Australia, most European Nations (except UK, Ireland,
and Portugal)
The Genesis of the Convention
● The most significant legal instrument operative in the field of international sales is the
Vienna Convention on Contracts for the International Sale of Goods (CISG)
○ Most of the major trading notions have been ratified
○ Considerable influence over sales law across the world → as predecessor
Rabel and UNIDROIT
, ● The inspiration for CISG was provided by the Austrian jurist Prof Rabel
○ He began working on international uniform sales law in the late 1920s → Recht
des Warenkaufs
● His work was taken and developed by UNIDROIT
○ Was approved in 1939
○ Suspended because of WWII
○ Work was resumed and bore fruit in two Hague Conventions:
■ The Uniform Law on the International sale of goods
■ Uniform Law on the Formation of Contracts for the International Sale of
Goods
Assessment of the Hague Conventions
● Not so successful → only nine states ratified them
● But overall quite significant in the end (by Peter Schlechtriem’s opinion)
○ But the impact is mostly on Europe, elsewhere extremely muted or non-existent
● Why did the Hague Conventions fail to secure acceptance in the international
marketplace?
○ Perceived as a European project
■ The role of the states beyond the shores of Europe was very limited
■ Almost all of the ratifying states are European
○ Failed to secure participation of the developing nations of the world
○ Lack of participation resulted in a lack of ownership of the project
■ States that had not participated in the drafting felt no obligation to ratify
them
○ Conventions could be ratified on an opt-in basis
■ Even if they were ratified, they did not have the practical effect
● For example, the UK joined on opt-in basis and continued to
reference the law of the nation-state
○ Technical weaknesses in Conventions
■ Good first attempt, but not sufficiently good to persuade States to ratify
them
● The Hague Convention significant drafting start for CISG
The origin of the CISG
● The origin of CISG is to be found in the work of the United Nations Commission on
International Trade (UNCITRAL)
○ UNCITRAL was launched in 1966
● They send Hague Conventions with commentary by Prof Tunc to all governments and
invite to comment on the Conventions and indicate their attitudes toward ratifications
○ Major trading nations, such as US, Soviet Unions and China did not intend to
ratify Hague
● The crucial value added by UNCITRAL was the universal representation
● First produced draft in 1976
● Diplomatic conference in Vienna in 1980 and adopted on April 11 1980
,Entry into force
● The Convention did not come into force immediately
○ Came into force on 1 Jan 1988
○ Now ratified by 83 states (including most major trading nations of the world)
■ US, China, Singapore, Australia, most European Nations (except UK,
Ireland, and Portugal)
The Progression
● UNCITRAL was launched in 1966
○ Different from Hagues → they asked for comments from governments
■ They looked at greater consultation, universal representation
○ Major trading still did not want to ratify
● Then they begin again new drafts with grater consultation
○ First draft in 1976
○ Diplomatic conference held in Vienna
○ Convention adopted in 1980, came into force in 1988
● Some big countries are still not members, such as UK, Portugal
2. Application
The Sphere of Application
Article 1
→ sets out three important details to consider in the context of the application based on art. 1:
1. Type of contract
● Contracts of sale → no definitions for this
○ Articles 2 and 3 deal with exclusions
■ Exclude consumer contracts
○ 3(1)
○ 3(2)
● Seems to be determined on a quantitative rather than qualitative basis
○ If more goods → CISG applies
, ○ If more services than goods → not CISG
2. International requirement
● Can take on different definitions
○ Can take the place of the parties
○ Place of business (art. 1 considers this)
● Not always clear
● Why have international sales laws?
○ Sales across borders can cause a lot of problems → need for uniformity
3. Connecting factor
● Contract → contracting state
● Two limbs as connecting factors
1. Both parties are contracting states to CISG (83 states)
a. Clearly laid out in art. 1(1)(a) - Convention applies to two different
contracting states
b. Article 1(1)(a) is now predominant due to the number of party
states
2. Rules of private international law lead to the law of the contracting state
1(1)(b)
a. If private int law and forum state are non-contracting, → domestic
law
b. If based on PIL leads to forum state being a contracting state →
CISG
Types of contracts covered by the Convention
● Contracts of international sale of goods
○ No definition
○ Excludes certain contracts from its scope
■ Art. 2 and 3 exclude consumer sales from CISG
■ Art. 3(2) excludes contracts in which part of the obligation of the party
who furnishes the goods consists in the supply of labour or other services
○ Contracts for the sale of goods to be manufactured or procedures are to be
considered as contracts of sale
■ Exception if the buyer undertakes to supply a substantial part fo the
materials necessary for such manufacture or production
The internationality requirement
● International in Art. 1 refers to the place of business of the parties to the contract of sale
○ Not whether goods themselves have crossed international borders
● Why is such a focus on international and cannot just be universal?
○ Usually, international sales give rise to problems which not so often in somatic
sales
● Developments within Europe
