CISG: Analysis of the United Nations Convention on Contracts for Sale

This report provides an in-depth analysis of the United Nations Convention on Contracts for the International Sale of Goods (CISG), also known as the Vienna Convention. It examines the convention's objectives, scope, and application, highlighting its role in harmonizing international trade law. The report explores the four parts of the CISG, including general provisions, contract formation, the sale of goods, and final provisions. It discusses the convention's flexibility, acceptance by various countries, and limitations. The assignment also delves into specific aspects such as the applicability of the convention to different types of goods, the rights and obligations of buyers and sellers, and remedies for breach of contract. The report analyzes the formation of contracts under CISG, including offers, acceptances, and the implications of silence or modifications to offers. It also explores the duties of sellers regarding goods conformity, delivery, and third-party claims, as well as the responsibilities of buyers. Finally, the report examines remedies available to both buyers and sellers in the event of a breach, including damages, price adjustments, and specific performance, and discusses the concept of force majeure.

Running head: CISG
United Nations Convention on Contracts for the International Sale of Goods
Name of the Student
Name of the University
Author Note

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CISG
It has been stated by Lookofsky (1991) that the convention “arguably the greatest
legislative achievement aimed at harmonizing private international commercial law”1. A
standardized law that operates the international sales is the United Nations Convention on
Contracts for the International Sale of Goods (CISG; the Vienna Convention). There are 89
countries who have acknowledged this convention that becomes a definite proportion in trading
around the world. The development of CISG has been done by United Nation Commission on
International Trade Law (UNCITRAL)2. It got signed in Vienna in the year of 1980. It is also
referred as the Vienna Convention but it must not be referred to as the other treaties that has been
signed in Vienna. It is the most powerful and popular uniform international laws. Plain and
simple language has been used to write the convention so that the words might be avoided if they
have legal difference in some jurisdiction. There are four parts in which CISG is divided. The
first one is the area of applications and the general provisions. The second one is contract’s
formation that is given in the articles 14-24. The third article is the Sale of Goods that is given in
the Article 25-88 and the fourth one is the final provisions that have been mentioned in Article
89-101. There has been a little hesitation in respect to the convention’s success but it has also
been observed that there are a few parts where the requirement of the improvement is necessary
with respect to convention as suggested by Andersan3. To analyze the scope, acceptance and
application is the main purpose of this assignment. Another purpose is to determine that whether
1 Lookofsky, Joseph M. "Loose Ends and Contorts in International Sales: Problems in the Harmonization of Private
Law Rules." The American journal of comparative law 39.2 (1991): 403-416.
2 Dhini, Chrisstar, Novika Maharani, and Reza Amarulloh. "Harmonisasi Buku III Kitab Undang-undang Hukum
Perdata Dengan Convention on Contracts for the International Sales of Goods Dan United Nation Commission on
International Trade Law Terhadap Kontrak Dagang Internasional." Privat Law 3.2 (2015).
3 Zaheeruddin, Mohammed. "Recovery of Attorney’s Fees as damages under United Nations Convention on
Contracts for the International Sale of Goods (CISG), 1980." Imperial Journal of Interdisciplinary Research 2.7
(2016).

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CISG
this convention is the most effective treaty of international trade. Initially this assignment checks
out the objectives and aims of this convention. It is also analyzed critically the accomplishment
of convention as it has been explained initially with respect to it.
An option has been given to exporter by the convention to avoid the problems with
respect to the selection of law as there certain rules that are substantive in nature and is provided
by the convention4. It is widely accepted in the whole wide world with respect to the contracts,
courts and the contractual parties might depend on. If there is a contract formed for transaction
of goods between the parties from one state to another but only one state has ratified the
convention, then this convention is applicable until the state that has not ratified the convention
excludes this term of not ratifying the convention from the contract made between them.
Through UNCITRAL, the convention gets succeeded if every state of this world acknowledges it
be it the state with the development of economy and all the other states with legal system.
Contracting states are states that has ratified or acknowledged the convention5. This convention
is described with respect to the uniform law conventions as "the greatest influence on the law of
worldwide trans-border commerce.”An argument has been made that convention is greatest
legislative achievement and the “most successful international document so far" with respect to
the uniform law of international sales. The convention is so flexible in nature it permits the party
who have ratified the convention to get exceptions in some products or whether they want to
follow the laws that has been provided in the convention or not. The basic factor is the flexibility
of the convention in relation to the states that have acknowledged the convention must have
4Tektona, Rahmadi Indra. "PERLINDUNGAN KONSUMEN DALAM KONTRAK TRANSAKSI E-COMMERCE
BERDASARKAN HUKUM PERDAGANGAN INTERNASIONAL." JURNAL SUPREMASI 6.2 (2016): 2
5 Jain, Sankalp. "Importance & Significance of Damages as a Remedy for Breach of Contract." (2014).

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contrast legal manners to accept the code and the interest uniformly6. There are majority of the
states who have accepted the convention deprived of any kind of declaration and also have
subscribed to it. But there are certain countries mostly 21 out of 89 who have asked for the
declaration.
The first article states that the convention is only applicable to those states who carries
their business in the states that have ratified with the convention is the place of the business of
parties is set up in a different state who does not belong to the convention but the convention can
be still applicable and it also states that the application of the laws of the states that have ratified
with the convention has been provided by conflict of law7. However, certain states are there who
made a statement that they will not accept those laws or bound by it. There are certain products
in which the convention can be applied are goods and commercial products. But there are certain
limitations in some products which this convention might not be applied are household goods or
family goods, ships, aircrafts, auctions, services or intangibles. There are certain situations in
which the position of the software is a bit different and analysed. The rights that have been
provided to the parties is that they can exclude the application if they want to8.
The applications of the principles is important as it needs to determine the interpretation
in cases where there is no interpretation but the issue is present in convention (a gap praeter
legem) by applying the public international law regulations.
6 Singh, L. "United Nations Convention on Contracts for the International Sale of Goods (1980)[CISG]: An
examination of the buyer's right to avoid the contract and its effect on different sectors of the (product) market."
(2014).
7 Mueller, Michael F. "International United Nations Convention on Contracts for the International Sale of Goods: A
Study and Explanation Book on the United Nations Convention on Contracts for the International Sale of Goods
(CISG)." (2016): 675-680.
8 Wu, Xiyuan. "The Mitigation Rule and Impacts of Overdue Payments in International Business." (2018).

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CISG
The major fact of the controversy is that whether there is any requirement of the written
memorial that needs to bind with the contract. The validity of the contract is not there if it is not
written in certain countries. The sale might not be signed or oral as it has been given allowance
by the CISG to do so. There are some states who needs a strict document that must be signed
otherwise they can reject the unsigned or oral contracts9. The word convention is not completed
by its definition and the gap must be filled by the application of the national laws while
considering the provisions of the conflict of law.
It has been stated in the part two of the convention, an offer must contain the description
of the price, the good and the quantity to make a contract that has to be directed to the person and
it should clear the offeror’s intention to bind legally where by terms of offer the acceptance is
made. Sometimes common law unilateral contracts do not seem to be recognised by CISG. An
indication is subjected by offeror that makes any proposal that is not directed to an individual
and treats that offer as invitation only10. The Price of the goods are totally based on “generally
charged when the contract is concluded for such goods sold under similar circumstances” has
been agreed by the parties when the determination of the implied price is done by the express
price that is not given and the implied price is not available then (Article 55). If any revocation
or withdrawal of offer has to be done then the offeree must be provided with the information of
the withdrawal before the acceptance has been prepared by him as mentioned in the convention.
Some irrevocable offers are there that cannot be withdrawn as mentioned in the convention.
9 Wu, Xiyuan. "The Mitigation Rule and Impacts of Overdue Payments in International Business." (2018).
10 Basedow, Jürgen. "International economic law and commercial contracts: promoting cross-border trade by
uniform law conventions." Uniform Law Review 23.1 (2018): 1-14.

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Under the state of silence or inactiveness an offer cannot be made or constituted. An offer can
only be made if there is positive action by the offeree11.
The attempt of CISG is to solve out the common situation in which the reply of the offer
to the offer has accepted the original or the new offer but their attempt to change the terms and
conditions. It has been said by CISG that an offer can be rejected if any change is there that
needs to be done to the original conditions and it is known as counter offer until and unless the
new terms do not alter the original terms of offer12. The conditions that changes the terms of
offer can be stated like payment, quantity, change of the price, liability of the parties, quality and
arbitration.
The convention provides the states that are ratified with it by a chance to reserve a file
that is also known as declaration as stated in the convention’s language. Further, the parties can
come out of written contract that is compulsory for the sale of goods that has been mentioned
under the article 11, 12 and 9613. The parties also have a chance to come out of application that
has been mentioned under the part 2 and 3 of convention. There are certain benefits that has been
given by the convention but a few States who has a major business in trading like India, United
Kingdom and Hong Kong have restrained themselves from becoming a part of convention. It
concludes that there are certain problems that are connected with the convention and not many
nations who are trading are willing to be the part of the convention.
11 Bahareh, Arghand, et al. "International convention to decrease conflict between energy supply and environmental
protection." Ukrainian Journal of Ecology 8.1 (2018): 608-618.
12 Bridge, Michael G. The International Sale of Goods. Oxford University Press, 2017.
13 Petrovic, Jadranka, Beatrice Hamilton, and Cindy Nguyen. "The Exclusion of the Validity of the Contract from
the CISG: Does It Still Matter?." (2017).

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CISG
The part 3 of the convention States about the sale of goods as per article 25-88. It states
that the good or products must be provided according to the description and the quantity and the
quality should be as mentioned in the contract that needs to make sure that it is fit for the purpose
and must be packed accordingly. The duty of the seller has been defined by CISG and it has been
stated that the seller must deliver the products and the documents related to them as per the
requirement of the contract. Similarly, the buyer’s duty is to take the necessary steps “which
could reasonably be expected” for taking the delivery and making the payment of it14. The seller
has the duty to deliver the products which are not subjected to the claim of the third party that
limits the actions of industrial or intellectual property and the rights of the state in which the
goods or be sold. The buyer has the responsibility to examine all the products that has been
delivered to him and if there is any lack of conformity he must advise the seller within a certain
period of time which is within the 2 years of the delivery date.
It has been described by CISC that risk is passed from the person who sells goods and to
the person who buys it15. Somehow it has been seen that many contracts define the delivery
obligation of the seller show the process of adoption of established shipment term like FOB and
CIF. There are certain remedies of the buyer and the seller that totally depends on the kind of
character that has been mentioned on the breach of the contract. If the breach of the contract is
not found to be essential, the contract will not be avoided and the remedies might be sorted that
includes claiming of damages price adjustment and specific performance.
14 Loizou, Soterios. "CISG: Avoidance of Contract." (2017).
15 Gutiérrez, Laura García. "The Vienna United Nations Convention on Contracts for the International Sale of
Goods: Applicability, Gaps and Implementation." International Sale of Goods. Springer, Cham, 2017. 89-100.

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CISG
Such parties are exempted under the convention for being liable with respect to damages
were an accomplishment failure is held to have arose due to hurdles which were not within the
reasonably foreseeable control of the party16. These situations although being less important can
cause hindrance in the formation of the agreement and may be regarded as force majeure. Where
the price which has been paid by the buyer has been refunded by the seller, the seller is also
under the obligation to compensate the buyer with the interest which he or she is entitled to
receive in relation to the time for which the money of the buyer was with the seller. The rate
which is presently provided through the rules of the state of the seller would be the deemed rate
of interest in the situation17. In addition the duty of providing interest originates through the duty
of the seller to provide the compensation and they buyer cannot claim damages. However the
situation is a significant agenda of debate between the supporters and the critiques of the
convention. In situation where the buyer has to return the purchased items he is accountable for
any form of assistance which had been agreed upon according to the requirements laid down by
the seller.
The CISG has been subjected to considerable criticism for certain short comings which
the critiques have identified in the convention. Petrovic (2017) has stated the CISG to be a mere
combination of unclear standards and compromises which are not in compliance with the best
interest of the international market18. It has been argued by Basedow (2018) that the states who
had the responsibility of formulating the CISG did not have the capacity of reaching an
16 Hawkins, Jonathan S., and Jennifer L. Maffett-Nickelman. "The Rise of International Standards in the Sale of
Goods." American Bankruptcy Institute Journal 36.4 (2017): 44.
17 Abadi, Mohsen Abadi, and Alireza Azadi Kalkoshki. "Delivery of Goods on International Sales." J. Pol. & L. 10
(2017): 100.
18 Petrovic, Jadranka, Beatrice Hamilton, and Cindy Nguyen. "The Exclusion of the Validity of the Contract from
the CISG: Does It Still Matter?." (2017).

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agreement in relation to assenting to rules which unambiguously and precisely set out uniform
principles with international sale of goods19. It has been further critiqued by Loizou (2017) that the
uncertainty, flexibility and lack of precise meaning within the conventions defeats its original
purpose of implementing a universal law as the courts have been provided with significant
powers to interpret the articles without concrete guidelines being present20.
When the critiques of the CISG are compared to the supports, they are outnumbered.
According to Gutiérrez (2017) that one of the primary features of the conventions which makes it
one of the greatest legislative achievements in history is the simple and plain language which has
been used in it. The CISG does not consist of any difficult to understand sub clauses which
makes it user friendly. What the article signifies can be made out by a person upon its first
reading. There is no need of experts in relation to the interpretation of the provisions. Berlingher
(2017) has highlighted another problem in relation to the CISG which is that of its uniform
application21. The application has been identified as an issue as the courts do not readily accept
the precedents which have been set out the courts of other nations. One of the primary examples
of this criticism had been seen in a German and a French case. In Bundesgerichtshof VIII ZR
159/94 t court ruled that there is no duty on the part of the seller to ensure that the goods comply
with national standards and the courts refused to apply such principles on the French case of
Caiato Roger v La Société française de factoring international factor France (SA) (1995) 93/4126
where a contrary ruling had been made by the court. However it has been stated by Walt (2018)
19 Basedow, Jürgen. "International economic law and commercial contracts: promoting cross-border trade by
uniform law conventions." Uniform Law Review 23.1 (2018): 1-14.
20 Loizou, Soterios. "CISG: Avoidance of Contract." (2017).
21 Berlingher, Daniel. "The Effects of the International Contract for Sale of Goods." Journal of Legal Studies 19.33
(2017): 96-109.

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CISG
that even where there is a lack of consistency in relation to the decision making the facts in these
cases was significantly different form one another22.
Further arguments have been provided that the character of the CISG is rational, practice
based and flexible. It has been stated by Wu (2018) that there are no restrictions which are applied
by the CISG with respect to formation and alterations of a contract and even if such restrictions
are identified they are very limited in number23. The convention also provides the parties to
select form many options where there has been a breach of contract before the parties want to
repudiate the contract. Provisions in relation to the restriction of performance have also been
provided by the CISG as a right in the light of remedy to the party whose rights have been
violated in form of options like claiming of damages based on market value. It has been further
argued by Muñoz (2017) that functional criteria are made available by the CISG with respect to
conformity instead of formal criteria and the conventions does not consist of operations based on
“perfect tender” rules24. Loizou (2017) has stated that the interpretation of the provisions of the
CISG significantly depend upon customs. Actions are also generally manifested by these rules
rate than intention25. Although very limited in scope the CISG contains a rule known as Nachlass
rule. The CISG also comprises of a good faith condition which is generally found to have been in
most circumstances obscure and relatively restricted. There has been no precise definition which
has been provided in relation to the reasonable time which all forms of communication under the
CISC are subjected to. Thus broad discretion has been provided to the judges with respect to
22 Walt, Steven D. "Importing Uniform Sales Law into Article 2." (2018).
23 Wu, Xiyuan. "The Mitigation Rule and Impacts of Overdue Payments in International Business." (2018).
24 Muñoz, Edgardo. "PART II Remedies for Breach of a Buyers Obligation to Open a Letter of Credit in CISG
Contracts." (2017).
25 Loizou, Soterios. "CISG: Formation of International Sale of Goods Contracts." (2017).

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interpreting the provisions of reasonable time under the CISG. The court used such discretionary
powers in the case of Schmitz-WerkeGmbH & Co. v. Rockland Industries Inc26.
There have been several arguments which have been made both in favor of and against
the CISG. Taking into consideration the above analysis it can be stated that the argument
provided by Lookofsky that the CISG is “arguably the greatest legislative achievement aimed at
harmonising private international commercial law” is a bit exaggerated27. This is because
although the convention has some significantly useful provisions in relation to international trade
it also has several flaws which have been identified above by the critiques. However it can be
stated that the benefits which is provided by the conventions outweighs the detriments which the
critiques argue to be present in the convention. The CISG is a widely used platform which is
successfully utilized by the contracting states in order to address the issues which arise out of
international sale of goods. As of now there is no considerable alternative to the CISG. The
critiques who have made an arguments that the convention is vague and unclear have not
provided any alternatives to address the situations. On the other had significant evidence have
been discussed above which depicts that the convention is a major success. To conclude it can be
stated that although the convention is a major success, in the light of a few defects it has it cannot
be adjudged as the greatest legislative achievement aimed at harmonising private international
commercial law.
26 Hartwig J., Schmitz-WerkeGmbH & Co. v. Rockland Industries Inc. and the United Nations Convention on
Contracts for the International Sale of Goods (CISG):Diffidence and Developing International Legal Norms,J.L.
Com. 22 (2002-2003) 77-89
27 Lookofsky, Joseph M. "Loose Ends and Contorts in International Sales: Problems in the Harmonization of Private
Law Rules." The American journal of comparative law 39.2 (1991): 403-416.

11
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References
Abadi, Mohsen Abadi, and Alireza Azadi Kalkoshki. "Delivery of Goods on International Sales."
J. Pol. & L. 10 (2017): 100.
Bahareh, Arghand, et al. "International convention to decrease conflict between energy supply
and environmental protection." Ukrainian Journal of Ecology 8.1 (2018): 608-618.
Basedow, Jürgen. "International economic law and commercial contracts: promoting cross-
border trade by uniform law conventions." Uniform Law Review 23.1 (2018): 1-14
Basedow, Jürgen. "International economic law and commercial contracts: promoting cross-
border trade by uniform law conventions." Uniform Law Review 23.1 (2018): 1-14.
Berlingher, Daniel. "The Effects of the International Contract for Sale of Goods." Journal of
Legal Studies 19.33 (2017): 96-109.
Bridge, Michael G. The International Sale of Goods. Oxford University Press, 2017.
Dhini, Chrisstar, Novika Maharani, and Reza Amarulloh. "Harmonisasi Buku III Kitab Undang-
undang Hukum Perdata Dengan Convention on Contracts for the International Sales of Goods
Dan United Nation Commission on International Trade Law Terhadap Kontrak Dagang
Internasional." Privat Law 3.2 (2015).
Gutiérrez, Laura García. "The Vienna United Nations Convention on Contracts for the
International Sale of Goods: Applicability, Gaps and Implementation." International Sale of
Goods. Springer, Cham, 2017. 89-100.

12
CISG
Hartwig J., Schmitz-WerkeGmbH & Co. v. Rockland Industries Inc. and the United Nations
Convention on Contracts for the International Sale of Goods (CISG):Diffidence and Developing
International Legal Norms,J.L. Com. 22 (2002-2003) 77-89
Hawkins, Jonathan S., and Jennifer L. Maffett-Nickelman. "The Rise of International Standards
in the Sale of Goods." American Bankruptcy Institute Journal 36.4 (2017): 44.
Jain, Sankalp. "Importance & Significance of Damages as a Remedy for Breach of Contract."
(2014).
Loizou, Soterios. "CISG: Avoidance of Contract." (2017).
Loizou, Soterios. "CISG: Avoidance of Contract." (2017).
Loizou, Soterios. "CISG: Formation of International Sale of Goods Contracts." (2017).
Lookofsky, Joseph M. "Loose Ends and Contorts in International Sales: Problems in the
Harmonization of Private Law Rules." The American journal of comparative law 39.2 (1991):
403-416.
Lookofsky, Joseph M. "Loose Ends and Contorts in International Sales: Problems in the
Harmonization of Private Law Rules." The American journal of comparative law 39.2 (1991):
403-416.
Mueller, Michael F. "International United Nations Convention on Contracts for the
International Sale of Goods: A Study and Explanation Book on the United Nations Convention
on Contracts for the International Sale of Goods (CISG)." (2016): 675-680.

13
CISG
Muñoz, Edgardo. "PART II Remedies for Breach of a Buyers Obligation to Open a Letter of
Credit in CISG Contracts." (2017).
Petrovic, Jadranka, Beatrice Hamilton, and Cindy Nguyen. "The Exclusion of the Validity of the
Contract from the CISG: Does It Still Matter?." (2017).
Petrovic, Jadranka, Beatrice Hamilton, and Cindy Nguyen. "The Exclusion of the Validity of the
Contract from the CISG: Does It Still Matter?." (2017).
Singh, L. "United Nations Convention on Contracts for the International Sale of Goods (1980)
[CISG]: An examination of the buyer's right to avoid the contract and its effect on different
sectors of the (product) market." (2014).
Tektona, Rahmadi Indra. "PERLINDUNGAN KONSUMEN DALAM KONTRAK
TRANSAKSI E-COMMERCE BERDASARKAN HUKUM PERDAGANGAN
INTERNASIONAL." JURNAL SUPREMASI 6.2 (2016): 2
Walt, Steven D. "Importing Uniform Sales Law into Article 2." (2018).
Wu, Xiyuan. "The Mitigation Rule and Impacts of Overdue Payments in International Business."
(2018).
Zaheeruddin, Mohammed. "Recovery of Attorney’s Fees as damages under United Nations
Convention on Contracts for the International Sale of Goods (CISG), 1980." Imperial Journal of
Interdisciplinary Research 2.7 (2016).