United Nations Convention on Contracts for The International Sale of Goods (Cisg)
by The following article will explain the United Nations Convention on Contracts for the International Sale of Goods (CISG), as well as discuss the implications for businesses that desire to operate within the countries that have not agreed to CISG. In addition, this article will examine whether or not a business should engage in commerce in countries that have not accepted the CISG platform.
The United Nations Convention on Contracts for the International Sale of Goods (CISG) was set in place originally in 1980 to unify as many countries as possible as far as commercial law on a worldwide level. The treaty is continuously being upgraded as far as the amount of participating countries. The treaty’s main objective is to decrease the number of obstacles concerned with international trade as well as those associated with choice of law problems, and by also creating fair and substantive rules controlling the rights and duties of participating parties to international sales contracts (Flechtner, 2008). Although the convention is considered to smooth most rough spots concerning international law, it still even if all countries were signed on is not completely uniformed, as there is not a uniformed court that exists and can uniformly interpret the CISG. Another important issue is that the CISG does not require written contracts between sales and the negotiation process where language as well as the mix between high and low context communication can be seen as adding more complexity as offers may be thought to be agreed upon, but are really not (Daniel Mark Ogden, 2006).
Doing business with countries that have ratified the CISG can sometime be complicated as many of them have opted out for certain provisions, such as making it official to have written contracts. Yet, it is even more difficult if business was conducted in a country that has not yet ratified the CISG, where their local laws have precedence, unless they agreed to international law. Meaning the balls in the court of the un-ratified and where cases would normally be reviewed by and interpreted by much broader perspectives it would just be decided by the un-ratified state court. The main purpose of the treaty is to smooth out negotiations and transactions between the foreign countries involved by determining common ground within the sale (Fierman & Preston, 2010).
Whether a business should conduct transactions with a CISG un-ratified country is purely up to their discretion. As some of the CISG non-affiliates are major traders, such as Brazil, South Africa and the United Kingdom, where many of their imported and exported goods are very detrimental to other countries’ economies it would not be in the best interest to completely boycott the countries until they signed on. As there are less countries not signed on where a separate treaty or annexation should be created with the provisions stated by the currently un-ratified. If the provisions contradict or do not align with the present CISG terms, then a separate one should be designed with the future objective to merge the two, once a common ground has been met and all major traders have signed on. But for now, it would be in best interest of the ratified country trading outside the jurisdiction of the CISG to pay close attention to the non-affiliates local trade laws and even design a contract through a foreign law consultant based in said un-ratified country. Therefore, if a disagreement or problem with the negotiation or transaction would happen to occur, one would also be protected by the local law as well as the terms agreed upon within the local contract.
Daniel Mark Ogden. (2006). Legal concerns in exporting to Latin America. Retrieved July 20, 2011, from Daniel Mark Ogden Web site: http://internationaltradeattorney.com:8008/Articles/Legal%20Concerns%20in%20Exporting%20to%20Latin%20America.pdf
Fierman, J., & Preston, L. (2010, February 2). Contracts for International Sale of Goods: Now I am really confused. Retrieved July 20, 2011, from Good Company: Sheenan, Phinney, Bass, & Green Web site: http://www.sheehan.com/publications/good-company-newsletter/Contracts-for-International-Sale-of-Goods-.aspx
Flechtner, H. (2008). Audiovisual Library of International Law: aaunited Nations Convention on contracts for the international sale of goods, Vienna, 11 April 1980. Retrieved July 20, 2011, from United Nations Web site: http://untreaty.un.org/cod/avl/ha/ccisg/ccisg.html
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