The international sale goods contract is the backbone of international trade in all countries, irrespective of their legal tradition or level of economic development. The United Nations Convention on Contracts for the International Sale of Goods (CISG) is therefore considered one of the core international trade law conventions whose universal adoption is desirable.
An international sale of goods contract usually contains (i) the main rights and obligations of the Parties, (ii) the remedies for breach of contract by the Buyer, (iii) the remedies for breach of contract by the Seller, (iv) the general rules that apply equally to both parties. It also contains the boilerplate clauses broadly accepted in international commercial contracts.
The clauses in a common international sale of goods contract are often but not always taken from the CISG, the convention widely accepted by lawyers of different traditions and backgrounds. This convention articulates practical requirements arising from commercial practice with the general rules of the CISG.
Talking about the losses, it is worth to mention that the CISG uses the concept of lack of conformity. This concept is wider than the concept of material defects (traditionally adopted in civil law countries) and includes differences in quality, as well as differences in quantity, delivery of goods of different kinds and defects in packing.
Nevertheless, the parties of the international sale of goods contract can always exclude CISG application to the contract. Therefore, it is necessary to weight what advantages and disadvantages the CISG inclusion can provide to the contract.
It is worth mentioning that specific cases of non-conformity defined under the CISG largely correspond to how material defects are defined in civil law countries. Such cases include unsuitability of the Goods for ordinary purpose or a particular purpose, as well as non-conformity with a sample or model.
Despite the fact whether the CISG application is included in an international sale of goods contract or not, we always recommend to specify:
– the remedies of the Buyer in case of non-delivery at the agreed time;
– the remedies of the Buyer in case of non-conformity of goods;
– rules on contract avoidance due to non-performance of contractual obligations.
As was mentioned above, the parties may exclude the CISG in whole or only in part. The Parties may also agree on rules that modify, replace, or supplement those of the CISG. Also, the parties have the right to use chosen national law for the contract instead of CISG.
If you would like to receive the advices about international sale of goods or other type of contracts, please do not hesitate to reach us for the consultation.