Role(s) of the United Nations Convention on Contracts for the International Sale of Goods (CISG)

Running head: BUSINESS LAW
Business Law
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BUSINESS LAW
Table of Contents
Introduction................................................................................................................................3
Role(s) of the United Nations Convention on Contracts for the International Sale of Goods
(CISG)........................................................................................................................................4
Background of the United Nations Convention on Contracts for the International Sale of
Goods (CISG).............................................................................................................................7
Significance of the United Nations Convention on Contracts for the International Sale of
Goods (CISG)...........................................................................................................................10
Impacts and Consequences of the United Nations Convention on Contracts for the
International Sale of Goods (CISG).........................................................................................13
Conclusion................................................................................................................................15
References................................................................................................................................17
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Introduction
Commercial law is considered as the legal regulation, which directs the behavior of the
people, merchants and the businesses occupied in trade, commerce and sales. Business law
and Commercial law are referred as the two sectors of legal practice, where many converging
problems are addressed. Commercial law mainly addresses the sale and allocation of the
goods as well as the financing transactions. Business law has further been regulated by the
federal and state law. This commercial law is generally synchronized through Uniform
commercial code (UCC)1, which is considered as the representation of laws in terms of sales
of goods, negotiable instrument and the financial transactions. It can, in this context, be stated
that “the UCC laws were set up and are maintained by the National Conference of
Commissioners on Uniform State Laws (NCCUSL), (also known as the Uniform Law
Commission), which is a non-profit organization” 2. All the states have acquired the form of
UCC. Commercial law generally offers a number of actions for resolving a disagreement,
which largely depends on the type of the violation3.
On the other hand, the impact of The United Nations Convention 1980 on Contracts for the
International Sale of Goods (CISG) can be defined as the most victorious effort for
combining a wider area of the commercial law at international levels. The self-executing
treaty generally focuses on decreasing the obstacles in the international trade. It is relevant
for those factors, which are connected with the legal issues by creating fair rules with respect
to the rights as well as obligations prevailing amidst the parties in association with the
1 Jean Murray, ‘What is the Uniform Commercial Code?’ (The Balance, 2019)
<https://www.thebalancesmb.com/what-is-the-uniform-commercial-code-398505> accessed 30 August 2019
2 Jean Murray, ‘What is the Uniform Commercial Code?’ (The Balance, 2019)
<https://www.thebalancesmb.com/what-is-the-uniform-commercial-code-398505> accessed 30 August 2019
3 Thomson Reuters, ‘What is Business and Commercial Law?’ (hirealawyer, 2019)
<https://hirealawyer.findlaw.com/choosing-the-right-lawyer/business-and-commercial-law.html>accessed 30
August 2019
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international sales contracts4. The United Nations Convention (UNC) on the International
Sale of Goods (CISG) has obtained the international recognition by the United Nations
Commission on International Trade Law (UNCITRAL)5. Considering this segment of the
trade law, it can be inferred that “In an increasingly economically interdependent world, the
importance of an improved legal framework for the facilitation of international trade and
investment is widely acknowledged” 6. The United Nations Sales Convention is considered as
the result of an extensive process of association, whose origins comprise dealing with earlier
days of the group in terms of the association of International Trade Law. According to the
CISG, it mainly governs the contact between the two parties of the different states. These
states should follow the UNC rules and regulations. The CISG mainly aims at the obligations
and the performance of the parties in order to become a part of the civil and the common law.
The main intention of CISG is to enable a current, consistent and fair rule of the contracts in
association with the international sale of goods. This paper mainly aims at the role played by
the United Nations Convention 1980 in implementing the contracts associated with the
international sale of goods. In addition, this paper aims at reassessing the principal
substantive provisions of the Convention, thereby observing their nature, similar to or
contrasting from the UCC rule.
4 Harry M. Flechtner, ‘The United Nations Convention On Contracts For The International Sale Of Goods’
(2009) UN 1, 1
5 International Training Centre of the ILO, ‘The United Nations Commission for International Trade Law
(UNCITRAL)’ (Turin school of Development, 2020) < https://www.itcilo.org/masters-programmes/ll-m-in-
international-trade-law/partners-and-faculty/the-united-nations-commission-for-international-trade-law-
uncitral> accessed 30 August 2019
6 International Training Centre of the ILO, ‘The United Nations Commission for International Trade Law
(UNCITRAL)’ (Turin school of Development, 2020) < https://www.itcilo.org/masters-programmes/ll-m-in-
international-trade-law/partners-and-faculty/the-united-nations-commission-for-international-trade-law-
uncitral> accessed 30 August 2019
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Role(s) of the United Nations Convention on Contracts for the International Sale of
Goods (CISG)
‘The adoption of uniform sales’ generally contributes to the falling of legal obstacles in the
international state, thereby facilitating development. The adoption of the convention
generally enables reconsidering of the domestic law and integrating a structural framework,
which enhances more favors in the provisions of international trade. On the other hand, CISG
is considered as the achievement towards the accomplishment of the international legal
consistency. The accomplishment of the convention cannot be considered as the evident point
for investigating the Common Law jurisdictions. The CISG is mostly ‘neglected’ in such
cases. The Common Law approach for the CISG is referred as below ‘enthusiastic’ in
comparison with response to the Civil Law countries. Additionally, a case on Common Law
has been emphasized internationally for depicting the breach of the method in the CISG. This
provisions leads to the contractual parties for prohibiting the CISG intentionally with respect
to the concern of “unpredictable outcomes”. The uniformity of application further enhances a
strong sense into the United Nations Convention 1980. The increasing growth in the
international trade has affected the combination of various legal behaviors basically.
Furthermore, CISG generally enables a significant effort, which enhances the advantages as
the opportunity of being acquired by the “uncertainty of an unknown domestic legal system”
7.
This CISG Convention is contributes largely in preventing and resolving the disputes. It
frequently enhances the succession in overcoming the potential disputes among the parties.
The Articles are evaluated in such a way that it accommodates the requirements of the
"seller" and the "buyer" states entering into a transaction. Thus, it can be said that the
respective states should possess the ability to observe the behavior of the other states and
7Isabel Cristina Salinas Alcaraz, ‘The United Nations convention on contracts for the international sale of goods
(cisg) and the Common Law: the challenge of interpreting Article 7’ IUSTA, 57-93, 57
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their acts. Contextually, it has been stated in Article 72(1), “If prior to the date for
performance of the contract it is clear that one of the parties will commit a fundamental
breach of contract, the other party may declare the contract avoided.”8
The case, Chicago Prime Packers, Inc. v. North am Food Trading Co., 408 F.3d 894 (7th
Cir. 2005)9 depicts the manner, in which the US court has applied and evaluated the
Convention or the Contracts for the International Sale of Goods (CISG). In the mentioned
case, it has been observed that the plaintiff was a Colorado corporation and was conducting
business in Chicago. This corporation has sold approximately 40,500 pounds of the back ribs
of the pork to the defendant Northam, which is mainly comprises the following states such as
Ontario and Canada Corporation. According to the Northam, all the ribs of the pork were
destroyed upon arrival. In this case, Northam Corporation has declined to pay for the pork
ribs. As a result, Chicago prime packers filed a case on the northern district of Illinois in the
federal district court. All the parties then agreed to the provisions, which are applied by the
CISG.
Northam stated that, the trouble should not be placed on the company, when considering the
context of uncommon goods. The court mainly focuses on the comparison between the CISG
and UCC. The court then mainly concentrates under the UCC that the buyer generally proves
the nonconformity. On the other hand, article 35 (2) of the CISG states that “goods do not
conform with the contract unless they ... [a]re fit for the purposes for which goods of the
same description would ordinarily be used”10. This was followed by the court reasoning the
case that CISG is termed as the similar thing, which applies the manner, in which one
8 Mondaq® Ltd, ‘United Arab Emirates: An Overview of the UN Convention on Contracts for the International
Sale of Goods Part II (Provision)’ (mondaq, 2019) <
http://www.mondaq.com/x/694302/international+trade+investment/An+Overview+Of+The+UN+Convention+
On+Contracts+For+The+International+Sale+Of+Goods+Part+II+Provision> accessed 30 August 2019
9 Chicago Prime Packers, Inc. v. North am Food Trading Co., 408 F.3d 894 (7th Cir. 2005)
10 Eric Misterovich, ‘What is Convention/Contracts for the International Sale of Goods (“CISG”)?’ (Revision
Legal, 2019) < https://revisionlegal.com/contracts/what-is-cisg/> accessed 30 August 2019
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