International Sale of Goods Report 2022

Running Head: INTERNATIONAL SALE OF GOODS
INTERNATIONAL SALE OF GOODS
Name of the Student
Name of the University
Author’s Note

1INTERNATIONAL SALE OF GOODS
INTRODUCTION
The United Nations Convention on Contracts for the International Sale of Goods (CISG)
or the Vienna Convention was held to codify the uniform international law for the sales. The aim
of the treaty is to promote international trade free from any disputes. It was adopted on 23 May
1969 and was brought into force on 27 January 1980.
The purpose of the report is to bring out the aim of CISG which is modern, uniform and
fair regime for contracts for international sale of goods and critically analyze it to assess whether
UK should ratify the treaty.
DIFFERENCE BETWEEN CISG AND ENGLISH LAW
According to Khandani (2004)1, CISG was established to create harmonization of law
among nations engaging in international trade however, its drafting process is more inclined
towards the civil law principles of contract law. One such principle is specific performance of the
contract which is the primary remedy offered by civil law. On the contrary, English law differs in
this aspect. The principles of English Law are based on Common Law principles wherein the
provision for specific performance of the contract is more restrictive than CISG provisions. In
other words, as per English law, specific performance is restricted to specific circumstances and
is advised that the wide application of the remedy in more situations have its own advantages
while the convention established the remedy as a right for the buyer who has been breached.
1 Khandani, Kourosh Majdzadeh. "Does the CISG, Compared to English Law, Put Too Much Emphasis on
Promoting Performance of the Contract Despite a Breach by the Seller." Manchester Rev. L. Crime & Ethics 1
(2012): 98..

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APPROACHES TO SOLVE THE DIFFERENCE
The CISG has tried to adopt conciliatory approaches to solve the differences2. Article
14(1) of the treaty laid down that the price of goods should be mentioned in case of sales of
goods to be governed by the treaty. However, the same was restricted by the addition of Article
55. Thus, to curb such situations, the CISG has adopted both civil and common law concepts in
its provisions and hence, it has resulted in inexplicit language of the convention resulting in
uncertainty.
On the contrary, there have been some successful conciliation of differences between the
legal provisions which is evident in case of specific performance. English Law permits both
specific performance and compensation as a form of remedy but compensation is more preferred
remedy. Article 28 of CISG has conciliated the differences by stating that specific performance
would be granted only if the usual laws of the country in which it is applicable, specific
performance would be granted. In other words, if applicable law is that of common law that
prefers compensation as the preferred remedy, then specific performance shall not be applicable.
WHETHER IT IS DESIRABLE TO HAVE TWO REGIMES OF LAW:
INTERNATIONAL AND DOMESTIC LAW?
When the contract is entered upon by two parties from different countries, they are
governed by the provisions of international law unless they mutually agree by the terms and
conditions of the contract to be abide by the law of one of the countries3. This is done so because
2 Loken, Keith. "A new global initiative on contract law in UNCITRAL: Right project, right forum." Vill. L. Rev. 58
(2013): 509.
3 Mulders P, 'Editorial' (2014) 4 Tijdschrift voor Urologie

3INTERNATIONAL SALE OF GOODS
the laws of two different countries may be conflicting to each other. Hence, the CISG is
incorporated as the international law, which is a fusion of the provisions of all the laws to avoid
discrepancies in the matters disputed between the parties. The domestic law governs the contract
when the parties are from the same country. However, in the international disputes, both the
countries may have different provisions and to provide the best solution, United nations is the
third party to enact a third law governing such contracts. However, the governance is not
absolute and it has been left open to the will of the parties depending upon the terms agreed by
them.
Therefore, two regimes of law is necessary to segregate the formation of contracts and
the applicability of legal provisions upon the parties from the same nation and the parties from
different nations.
LEGAL POSITION OF INCOTERMS
INCOTERMS is a set in international rules established by International Chamber of
Commerce in Paris with the objective to specify the conditions to trade in international market
along with the duties of buyers and sellers to avoid disputes. The rules are applicable only to the
tangible goods. However, the same is applied to all the services, licenses, or software within the
scope of the freedom of contract.
These rules are recognized by both international courts as well as the existing national
courts of justice4. Since they do not have any legal status, the validity of such rules are ensured
4 All Answers ltd, 'The Importance of Incoterms For International Contracts' (Lawteacher.net, August 2019)
<https://www.lawteacher.net/free-law-essays/international-law/the-importance-of-incoterms-for-international-
contracts-international-law-essay.php?vref=1> accessed 13 August 2019

4INTERNATIONAL SALE OF GOODS
by their explicit inclusion in the contract. However, the rules are silent on the matters of transfer
of ownership of property, breach of contract and remedies for such breach along with the
exceptions for liability. Therefore, there matters are governed solely by the governing law as
agreed by the parties. In addition, INCOTERMS are applicable only to the matters related to sale
of goods and not to matters of insurance, carriage, financing treaties and other commercial
transactions.
CONVENTION RATIFIED BY UK FOR SALE OF GOODS
UK has not expressly ratified the Convention on Contracts for the International Sale of
Goods or the Vienna Convention which codifies uniform regulations for the international sales
law. CISG applies to the contracts that involves parties from different states or countries. It has
currently been ratified by 79 countries however, it has also been recognized and enforced as a
legislative force in 76 countries including Turkey and France.
COMPATIBILITY WITH CISG
According to Sally Moss (2006)5, Parliament has not prioritized the introduction of
CISG. It has been explained that in case of introduction of CISG, London would lose its control
over international arbitration and litigation. However, the positive side of the CISG was argued
as rebutting the obstructive perception of UK as a reluctant participant in international trade law.
Thus, the objectives of CISG can be compared with that of the English law with respect
to the matters of international trade. Nevertheless, both the forms of legal regimes aims to
5 Sally Moss, “Why the United Kingdom Has Not Ratified the CISG”, 2006

5INTERNATIONAL SALE OF GOODS
promote international trade, but the distinction lies in the methodologies6. While English law
needs practice, with which the desired aim can be achieved, on the other hand, CISG provides
the means to achievement. The only element that can be ensured by ratification is that the CISG
and the English law may benefit from each other and achieve their common goal.
ADVANTAGES OF RATIFICATION:
Following are the advantages of ratification of CISG in UK7:
 Adoption of CISG would affect the City of London as a central forum for litigation and
arbitration.
 A political benefit of CISG adoption is that the negative perception of UK as a reluctant
participant in international trade law approached can be rebutted or proved wrong.
 Complete ignorance of CISG is not possible. If the trade and business is between the
companies where one is located in UK and the other in some place where CISG is
adopted, such party may request for the adoption of CISG in the trade terms to be
willfully consented. Hence, business purposes cannot be fulfilled without the ratification
of CISG.
6 (2019)
<https://www.academia.edu/1513223/UK_s_Ratification_of_the_CISG_An_Old_Debate_or_a_New_Hope_for_the
_Economy_of_the_UK_on_Its_Way_Out_of_the_Recession_The_Potential_Impact_of_the_CISG_on_the_UK_s_S
ME> accessed 14 August 2019
7 Moss, Sally. "The Why the United Kingdom Has Not Ratified the CISG." JL & Com. 25 (2005): 483.

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DISAVANTAGES OF RATIFICATION
Following are the disadvantages of ratification of CISG in UK8:
 The convention would result in a number of disputes due to non-clarity of legal
provisions and hence, ratification would be advantageous for the lawyers and a burden
for the clients.
 Ratification of CISG would result in London losing its control in the matters of
international arbitration and litigation.
IS IT ADVISABLE TO UK TO RATIFY CISG?
Ratification or declination of CISG is the choice of the Parliament. However, to continue
unhindered sale of goods in international market, UK must ratify the provisions of CISG, this
shall enable a hurdle-free trade with parties’ entitled to the choice of law applicable in case of
disputes and governance.
WHY NOT?
Ratification of CISG may not be advisable for the concern of the parties. The two
regimes may cause confusion among the parties and hence leading to more disputes.
CONCLUSION:
It is the will of the Parliament to ratify or decline the proposal for the adoption of CISG.
The parliament has not passed any decision rather it has chosen to ignore the proposal and let the
8See above 7.

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trade regulations be applied as unaffected. The same shall be noticed and verified when need for
the hour arises.
UNIT 3:
STEPS TAKEN IN DRAFTING AN INTERNATIONAL SALE OF
CONTRACT
Following are the steps taken for drafting an international sale contract9:
 Offer: Article 14 lays down that an offer is constituted of a proposal which is definitive of
its terms and is addressed specifically to one or more persons with an intention to be
bound by those terms in case, the same has been accepted by the other party. It should be
definitive of the quantity of goods, express quality of goods and the consideration.
However, ambiguity should be avoided with respect to the intention and the same should
be expressly conveyed to the other party.
 Revocation of an Offer: Article 16 states that until the contract has been agreed by both
the parties, it can be revocated by the offeror. However article 16(2) states that in case the
time of acceptance is fixed or if the offeror believes that the offer is irrevocable and acts
in reliance of such offer, it cannot be revoked. However, if a counter offer is made, then
the original offer is revocated under Article 19. If the offeror wishes to control the terms
of his contract, then the express terms for revocation should be laid down in the offer.
9 'Guide For Managers And Counsel: Drafting CISG Contracts And Documents' (Institute of International
Commercial Law, 2019) <https://iicl.law.pace.edu/cisg/page/guide-managers-and-counsel-drafting-cisg-contracts-
and-documents> accessed 14 August 2019

8INTERNATIONAL SALE OF GOODS
 Acceptance by performance of act: If the offeree acts as per the terms of the contract
resulting in discharging of contractual obligations, then the offer shall be deemed to have
been accepted under Article 18. The acceptance shall be effective at the moment the act
was performed.
 Notice by offeror about the efficacy of late acceptance: under CISG, offer is deemed to
be accepted the acceptance letter reaches the offeror before time. However, in case the
acceptance letter reached late, oral or written notice about the efficacy of such late order
shall prevail.
ELEMENTS OF VALID SALE CONTRACT
Following are the elements of valid sale contract:
 Offer
 Sufficient Definiteness
 Intention of the offeror to be bound by the terms of the contract if it is accepted by the
other party
 Effectiveness of the offer
 Revocation of offer
 Rejection of offer
 Acceptance
 Effectiveness of acceptance
 Counter Offer

9INTERNATIONAL SALE OF GOODS
DIFFERENCE BETWEEN CISG AND ENGLISH LAW IN APPROACH TO
DRAFTING
CISG follows the essential skeleton of the English law but it differs in certain areas to
include the provisions from other legal systems too10.
 Unitary approach is followed by CISG because in CISG there is only one category for the
breach of contracts whereas English Law lays down contract between the general breach
and special breach of warranty.
 Remedy for breach of contract as per CISG is preferred to be specific performance.
However, under English law, courts prefer compensation as the preferred remedy11.
 English law follows the common law rule which is restrictive in its principle for the
termination of contract. In other words the contrct shall be terminated only in the cases of
fundamental breach. However, in civil law or CISG, the termination of contract is more
generous than the common law rule.
INTERPRETATION OF CONTRACT UNDER CISG
While interpreting the provisions of CISG, the doctrine of good faith lays down that such
provision should be interpreted only with the good faith as intended by the makers12. The
contract formed under CISG shall be read with the intention of the enactment of CISG that the
10 Magnus, Ulrich. "The Vienna Sales Convention (CISG) between Civil and Common Law-Best of all Worlds." J.
Civ. L. Stud. 3 (2010): 67.
11 Nwafor, Ndubuisi Augustine. "Comparative and Critical Analysis of the Doctrine of Exemption/Frustration/Force
Majeure under the United Nations Convention on the Contract for International Sale of Goods, English Law and
UNIDROIT Principles." (2015).

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international trade should be promoted with reasonable commercial standards of fair dealing in
trade.
ROLE OF TRADE USAGES
Trade usages have always played a significant role in international sales by the theory of lex
mercatoria meaning a national system of law that flourished as an autonomous law and later
diminished after the introduction of nations13. Trade usages serves normative functions in
contracts of sale which may or may not be within the knowledge of the parties. It is the driving
factor that regulated the commercial transactions in a particular trade or industry.
12 Smythe, Donald J., Reasonable Standards for Contract Interpretation Under the CISG (September 26, 2016).
Cardozo Journal of International and Comparative Law (JICL), Forthcoming; California Western School of Law
Research Paper No. 17-2.
13 Coetzee, Juana. "The role and function of trade usage in modern international sales law." Uniform Law
Review 20.2-3 (2015): 243-270.

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BIBLIOGRAPHY:
Journals and Articles:
(2019)
<https://www.academia.edu/1513223/UK_s_Ratification_of_the_CISG_An_Old_Debate_or_a_
New_Hope_for_the_Economy_of_the_UK_on_Its_Way_Out_of_the_Recession_The_Potential_
Impact_of_the_CISG_on_the_UK_s_SME> accessed 14 August 2019
All Answers ltd, 'The Importance of Incoterms For International Contracts' (Lawteacher.net,
August 2019) <https://www.lawteacher.net/free-law-essays/international-law/the-importance-of-
incoterms-for-international-contracts-international-law-essay.php?vref=1> accessed 13 August
2019
Coetzee, Juana. "The role and function of trade usage in modern international sales
law." Uniform Law Review 20.2-3 (2015): 243-270.
'Guide For Managers And Counsel: Drafting CISG Contracts And Documents' (Institute of
International Commercial Law, 2019) <https://iicl.law.pace.edu/cisg/page/guide-managers-and-
counsel-drafting-cisg-contracts-and-documents> accessed 14 August 2019
Khandani, Kourosh Majdzadeh. "Does the CISG, Compared to English Law, Put Too Much
Emphasis on Promoting Performance of the Contract Despite a Breach by the
Seller." Manchester Rev. L. Crime & Ethics 1 (2012): 98..

12INTERNATIONAL SALE OF GOODS
Loken, Keith. "A new global initiative on contract law in UNCITRAL: Right project, right
forum." Vill. L. Rev. 58 (2013): 509.
Magnus, Ulrich. "The Vienna Sales Convention (CISG) between Civil and Common Law-Best
of all Worlds." J. Civ. L. Stud. 3 (2010): 67.
Moss, Sally. "The Why the United Kingdom Has Not Ratified the CISG." JL & Com. 25 (2005):
483.
Mulders P, 'Editorial' (2014) 4 Tijdschrift voor Urologie
Nwafor, Ndubuisi Augustine. "Comparative and Critical Analysis of the Doctrine of
Exemption/Frustration/Force Majeure under the United Nations Convention on the Contract for
International Sale of Goods, English Law and UNIDROIT Principles." (2015).
Sally Moss, “Why the United Kingdom Has Not Ratified the CISG”, 2006
Smythe, Donald J., Reasonable Standards for Contract Interpretation Under the CISG
(September 26, 2016). Cardozo Journal of International and Comparative Law (JICL),
Forthcoming; California Western School of Law Research Paper No. 17-2.