United Nations Convention on Contracts for the International Sale of Goods


United Nations Convention on Contracts for the International Sale of Goods

The United Nations Convention on Contracts for the International Sale of Goods (abbrev. CISG) [United Nations Convention on Contracts for the International Sale of Goods, Vienna, 11 April 1980, S.Treaty Document Number 98-9 (1984), UN Document Number A/CONF 97/19, 1489 UNTS 3. The full text of the CISG is available in pdf format at http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG.html at 22 December 2007.] is a treaty offering a uniform international sales law that, as of July 2008, had been ratified by 71 countries that account for a significant proportion of world trade, making it one of the most successful international uniform laws. Japan is the most recent State to have ratified the Convention.

The CISG allows exporters to avoid choice of law issues as the CISG offers ‘accepted substantive rules on which contracting parties, courts, and arbitrators may rely’. [United States Department of Commerce, ‘The U.N. Convention on Contracts for the International Sale of Goods’ http://www.osec.doc.gov/ogc/occic/cisg.htm at 22 December 2007.]

The CISG was developed by the United Nations Commission on International Trade Law (UNCITRAL) and was signed in Vienna in 1980. The CISG is sometimes referred to as the Vienna Convention (but is not to be confused with other treaties signed in Vienna). It came into force as a multilateral treaty on 1 January 1988, after being ratified by eleven countries. [Argentina, China, Egypt, France, Hungary, Italy, Lesotho, Syria, United States of America, Yugoslavia and Zambia.] CISG has been regarded as a success for UNCITRAL as the Convention has since been accepted by States from ‘every geographical region, every stage of economic development and every major legal, social and economic system’. [John Felemegas, ‘The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation (2000)’ "Pace Review of the Convention on Contracts for the International Sale of Goods (CISG)" 115.] Countries that have ratified the CISG are referred to within the treaty as 'Contracting States'. Unless excluded by the express terms of a contract, the CISG is deemed to be incorporated into (and supplant) any otherwise applicable domestic law(s) with respect to a transaction in goods between parties from different Contracting States. Of the uniform law conventions, the CISG has been described as having ‘the greatest influence on the law of worldwide trans-border commerce’. [Peter Schlechtriem, ‘Requirements of Application and Sphere of Applicability of the CISG’ (2005) 36 "Victoria University of Wellington Law Review" 781.]

The CISG has been described as a great legislative achievement [Joseph Lookofsky, ‘Loose Ends and Contorts in International Sales: Problems in the Harmonization of Private Law Rules’ (1991) 39 "American Journal of Comparative Law" 403.] and the ‘most successful international document so far’ in unified international sales law [Bruno Zeller, "CISG and the Unification of International Trade Law" (1st ed, 2007) 94.] , due in no small part to its flexibility in allowing Contracting States the option of taking exception to some specified articles. This flexibility was instrumental in convincing states with disparate legal traditions to subscribe to an otherwise uniform code. A number of countries that have signed the CISG have made declarations and reservations as to the Treaty's scope, [See list of signatories and their associated declarations and reservations at http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_status.html at 22 December 2007.] though the vast majority has chosen to acceed to the Convention without any reservations.

Countries that have ratified the CISG

As of 1 July 2008 [ The status of signatories is listed at http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_status.html at 1 January 2008 and is updated whenever the UNCITRAL Secretariat is informed of changes in status of the Convention.]
*Argentina
*Australia
*Austria
*Belarus
*Belgium
*Bosnia and Herzegovina
*Bulgaria
*Burundi
*Canada
*Chile
*China (People's Republic of)
*Colombia
*Croatia
*Cuba
*Cyprus
*Czech Republic
*Denmark
*Ecuador
*Egypt
*El Salvador
*Estonia
*Finland
*France
*Gabon
*Georgia
*Germany
*Greece
*Guinea
*Honduras
*Hungary
*Iceland
*Iraq
*Israel
*Japan
*Italy
*Korea (Republic of)
*Kyrgystan
*Latvia
*Lesotho
*Liberia
*Lithuania
*Luxembourg
*Mauritania
*Mexico
*Moldova
*Mongolia
*Montenegro
*Netherlands
*New Zealand
*Norway
*Paraguay
*Peru
*Poland
*Romania
*Russian Federation
*Saint Vincent and the Grenadines
*Serbia
*Singapore
*Slovakia
*Slovenia
*Spain
*Sweden
*Switzerland
*Syrian Arab Republic
*Macedonia (The former Yugoslav Republic of)
*Uganda
*Ukraine
*United States of America
*Uruguay
*Uzbekistan
*Zambia

Reservations

A few countries have declared important reservations. For example, in the Nordic countries, Part II is not generally applied, unless the contract expressly specifies this (reservation authorized by Article 92 CISG). Instead, local law is applied, resulting in some slight differences. For example, a Finnish seller must give a "reasonable amount of time" for a foreign buyer to consider an offer; CISG allows the seller to retract the offer before the buyer has accepted the offer. However, the Nordic Countries are currently (2008) considering to withdraw their Article 92 CISG reservation.

In any case, Nordic countries (i.e. members of the Nordic Council) do not apply CISG in trade between each other, but local law.

Major absentees

Brazil, India and the United Kingdom [Lord Sainsbury, the Under Secretary of State for the Department of Trade and Industry in the House of Lords on 7 February 2005 said ‘the United Kingdom intends to ratify the convention, subject to the availability of parliamentary time’.] are the only major trading countries that have not yet ratified the CISG.

The absence of the United Kingdom, a leading jurisdiction for the choice of law in international commercial contracts, has been attributed to the government not viewing the ratification as a legislative priority, a lack of interest from business in supporting the ratification, opposition from a number of large and influential organisations, a lack of public service resources and a danger that London would lose its edge in international arbitration and litigation. [Sally Moss, ‘Why the United Kingdom Has Not Ratified the CISG’ (2005) 1 "Journal of Law and Commerce" 483.]

Japan deposited its instrument of accession with the depositary of the CISG on 1 July 2008. The Convention will thus enter into force for Japan on 1 August 2009.

Language, Structure and Content of the CISG

The CISG is written using ‘plain language that refers to things and events for which there are words of common content’. [John Honnold, "Uniform Law for International Sales under the 1980 United Nations Convention" (3rd ed. 1999) 88.] This was a conscious intent to allow national legal systems to be transcended through the use of a common legal "lingua franca" [Jan Hellner, ‘The UN Convention on International Sales of Goods - An Outsider's View’ in Erik Jayme (ed) "Ius Inter Nationes: Festschrift fur Stefan Riesenfeld" (1983) 72, 76.] and avoids the ‘words associated with specific domestic legal nuances’. [John Felemegas, ‘The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation (2000)’ "Pace Review of the Convention on Contracts for the International Sale of Goods (CISG)" 115.] Further, it facilitated the translation into six languages [Arabic, Chinese, English, French, Russian and Spanish.] so all texts are equally authentic. [Article 101.]

The CISG is divided into four parts:-

Part I

Articles 1 – 13; the sphere of application of the Convention and general provisions.

The CISG applies to contracts of sale of goods between parties whose places of business are in different States when these States are Contracting States (Article 1(1) (a)). Given the significant number of Contracting States, this is the usual path to the CISG's applicability.

The CISG also applies if the parties are situated in different countries (which need not be Contracting States) and the conflict of law rules lead to the application of the law of a Contracting State. [Article 1 (b).] For example, a contract between a Japanese trader and a Brazilian trader may contain a clause that arbitration will be in Sydney under Australian law [More correctly, the law of New South Wales as mandated in Sale of Goods (Vienna Convention) Act 1986 (NSW).] with the consequence that the CISG would apply. It should be noted that a number of States have declared they will not be bound by this condition. [Specifically, China, Germany, Czech Republic, Saint Vincent and the Grenadines, Singapore, Slovakia and United States of America. See http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1980CISG_status.html at 22 December 2007.]

The CISG is intended to apply to commercial goods and products only. With some limited exceptions, the CISG does not apply to domestic goods, nor does it apply to auctions, ships, aircraft [Article 2.] or intangibles [From Article 2 (d) and (f), intangibles such as stocks, shares, investment securities, negotiable instruments or money, and electricity.] and services. [Article 3.] The position of computer software is ‘controversial’ [Peter Schlechtriem, ‘Requirements of Application and Sphere of Applicability of the CISG’ (2005) 36 "Victoria University of Wellington Law Review" 781.] and will depend upon various conditions and situations. [Frank Diedrich, ‘Maintaining Uniformity in International Uniform Law Via Autonomous Interpretation: Software Contracts and the CISG’ (1996) 8 "Pace International Law Review" 303, 321, 322.]

Importantly, parties to a contract may exclude or vary the application of the CISG. [Articles 6, 12.] Interpretation of the CISG is to take account of the ‘international character’ of the Convention, the need for uniform application and the need for good faith in international trade. Disputes over interpretation of the CISG are to be resolved by applying the ‘general principles’ of the CISG or where there are no such principles but the matters are governed by the CISG (a gap "praeter legem") by applying the rules of private international law. [Article 7.]

A key point of controversy had to do with whether or not a contract requires a written memorial to be binding. The CISG allows for a sale to be oral or unsigned [Article 11.] but in some countries, contracts are not valid unless written. In many nations, however, oral contracts are accepted and those States had no objection to signing, so States with a strict written requirement exercised their ability to exclude those articles relating to oral contracts, enabling them to sign as well. [Specifically, Argentina, Belarus, Chile, China, Hungary, Latvia, Lithuania, Paraguay, Russian Federation and Ukraine are not bound by Article 11.]

Part II

Articles 14 – 24; formation of contract.

An offer to contract must be addressed to a person, be sufficiently definite – that is, describe the goods, quantity and price – and indicate an intention for the offeror to be bound on acceptance. [Article 14.] Note that the CISG does not appear to recognise common law unilateral contracts [See, for example, "Carlill v. Carbolic Smoke Ball Company" (1892) 2 QB 484.] but, subject to clear indication by the offeror, treats any proposal not addressed to a specific person as only an invitation to make an offer. [Article 14 (2).] Further, where there is no explicit price or procedure to implicitly determine price then the parties are assumed to have agreed upon a price based upon that ‘generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances’. [Article 55.]

Generally, an offer may be revoked provided the withdrawal reaches the offeree before or at the same time as the offer or before the offeree has sent an acceptance. [Articles 15, 16 (1).] Some offers may not be revoked, for example when the offeree reasonably relied upon the offer as being irrevocable. [Article 16 (2).] The CISG requires a positive act to indicate acceptance; silence or inactivity are not an acceptance. [Article 18.]

The CISG attempts to resolve the common situation where an offeree’s reply to an offer accepts the original offer but attempts to change the conditions. The CISG says that any change to the original conditions is a rejection of the offer – it is a counter-offer – unless the modified terms do not materially alter the terms of the offer. Changes to price, payment, quality, quantity, delivery, liability of the parties and arbitration conditions may all materially alter the terms of the offer. [Article 19.]

Part III

Articles 25 – 88; sale of goods, obligations of the seller, obligations of the buyer, passing of risk, obligations common to both buyer and seller.

The CISG defines the duty of the seller, ‘stating the obvious’ [Jacob Ziegel and Claude Samson ‘Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods’ (1981) Toronto 168-305.] , as the seller must deliver the goods, hand over any documents relating to them and transfer the property in the goods, as required by the contract. [Article 30.] Similarly, the duty of the buyer is to take all steps ‘which could reasonably be expected’ [Article 60.] to take delivery of the goods, and to pay for them. [Article 53.]

Generally, the goods must be of the quality, quantity and description required by the contract, be suitably packaged and fit for purpose. [Article 35.] The seller is obliged to deliver goods that are not subject to claims from a third party for infringement of industrial or intellectual property rights in the State where the goods are to be sold. [Articles 41, 42.] The buyer is obliged to promptly examine the goods and, subject to some qualifications, must advise the seller of any lack of conformity within ‘a reasonable time’ and no later than within two years of receipt. [Articles 38, 39, 40.]

The CISG describes when the risk passes from the seller to the buyer [Articles 66, 67, 68, 69, 70.] but it has been observed that in practice most contracts define the ‘seller's delivery obligations quite precisely by adopting an established shipment term’ [Jacob Ziegel and Claude Samson ‘Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods’ (1981) Toronto 168-305. ] such as FOB and CIF. [See International Commercial Terms (Incoterms) in External Links.]

Remedies of the buyer and seller depend upon the character of a breach of the contract. If the breach is fundamental then the other party is substantially deprived of what it expected to receive under the contract. Provided that an objective test shows that the breach could not have been foreseen [Article 25.] , then the contract may be avoided [Article 49, 64.] and the aggrieved party may claim damages. [Articles 74, 75, 76, 77.] Where part performance of a contract has occurred then the performing party may recover any payment made or good supplied [Article 81.] ; this contrasts with the common law where there is generally no right to recover a good supplied unless title has been retained or damages are inadequate, only a right to claim the value of the good. [Cf "Doulton Potteries v Bronotte" (1971) 1 NSWLR 591 for example of damages as inadequate.]

If the breach is not fundamental then the contract is not avoided and remedies may be sought including claiming damages, specific performance and adjustment of price. [Articles 45, 46, 47, 48, 50, 51, 52, 61, 62, 63, 65, 74, 75, 76, 77.] Damages that may be awarded conform to the common law rules in "Hadley v Blaxendale" ["Hadley v Blaxendale" (1854) 9 Exch 341.] but it has been argued the test of foreseeability is substantially broader [Jacob Ziegel and Claude Samson ‘Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods’ (1981) Toronto 168-305.] and consequently more generous to the aggrieved party.

The CISG excuses a party from liability to a claim of damages where a failure to perform is attributable to an impediment beyond the party’s, or a third party sub-contractor’s, control that could not have been reasonably expected. [Article 79.] Such an extraneous event might elsewhere be referred to as force majeure, and frustration of the contract.

Where a seller has to refund the price paid then the seller must also pay interest to the buyer from the date of payment. [Article 84 (1).] It has been said the interest rate is based on rates current in the seller’s State ‘ [s] ince the obligation to pay interest partakes of the seller's obligation to make restitution and not of the buyer's right to claim damages’ [Commentary on the Draft Convention on Contracts for the International Sale of Goods, Prepared by the Secretariat, UN Doc. A/CONF.97/5 (1979).] , although this has been debated. [Peter Schlechtriem, "Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods" (1st ed, 1986) 99.] In a mirror of the seller’s obligations, where a buyer has to return goods the buyer is accountable for any benefits received. [Article 84 (2).]

Part IV

Articles 89 – 101; final provisions including how and when the Convention comes into force, permitted reservations and declarations, and the application of the Convention to international sales where both States concerned have the same or similar law on the subject.

The Part IV Articles, along with the Preamble, are sometime characterized as being addressed ‘primarily to States’ [Peter Winship, ‘Commentary on Professor Kastely's "Rhetorical Analysis"’ (1988) 8 "Northwestern Journal of Law & Business" 623, 628.] , not to business people attempting to use the Convention for international trade. They may, however, have a significant impact upon the CISG's practical applicability, [Ulrich G. Schroeter, 'Backbone or Backyard of the Convention? The CISG's Final Provisions', in: C.B. Andersen & U.G. Schroeter (eds.), "Sharing International Commercial Law across National Boundaries: Festschrift for Albert H. Kritzer on the Occasion of his Eightieth Birthday," London: Wildy, Simmonds & Hill (2008), 425 at 426.] thus requiring careful scrutiny when determining each particular case.

Commentary upon the Convention

Although the Convention has been accepted by a large number of States, it has been the subject of some criticism. For example, the drafting nations have been accused of being incapable of agreement on a code that ‘concisely and clearly states universal principles of sales law’ and through the Convention’s invitation to interpret taking regard of the Convention’s ‘international character’ [Article 7 (1).] gives judges the opportunity to develop ‘diverse meaning’. [Arthur Rosett, ‘CSIG laid Bare: A Lucid Guide to a Muddy Code’ (1988) 21 "Cornell International Law Journal" 575.] Put more bluntly, the CISG has been described as ‘a variety of vague standards and compromises that appear inconsistent with commercial interests’. [Clayton Gillette and Robert Scott, ‘The Political Economy of International Sales Law’ (2005) 25 "International Review of Law and Economics" 446.]

A contrary view is that the CISG is ‘written in plain business language’ which allows judges the opportunity to make the Convention workable in a range of sales situations. [Nicholas Whittington, ‘Comment on Professor Schwenzer’s Paper’ (2005) 36 "Victoria University of Wellington Law Review" 809.] It has been said ‘the drafting style is lucid and the wording simple and uncluttered by complicated subordinating clauses’, and the ‘general sense’ can be grasped on the first reading without the need to be a sales expert. [Jacob Ziegel, ‘The Future of the International Sales Convention from a Common Law Perspective’ (2000) 6 "New Zealand Business Law Quarterly" 336, 338.]

Uniform application of the CISG is problematic because of the reluctance of courts to use ‘solutions adopted on the same point by courts in other countries’ [Michael Joachim Bonell and Fabio Liguori, ‘The U.N. Convention on the International Sale of Goods: A Critical Analysis of Current International Case Law’ (1997) 2 "Revue de Droit Uniforme" 385.] , resulting in inconsistent decisions. [Article 7 (2).] For example, in a case involving the export to Germany by a Swiss company of New Zealand mussels with a level of cadmium in excess of German standards, the German Supreme Court found that it is "not" the duty of the seller to ensure that goods meet German public health regulations. [Bundesgerichtshof VIII ZR 159/94. English language abstract available at http://www.uncitral.org/clout/showDocument.do?documentUid=1326 at 22 December 2007. ). Full translation available at http://www.cisg.law.pace.edu/cases/950308g3.html#ta at 22 December 2007.] This contrasted with a later decision in which an Italian cheese exporter failed to meet French packaging regulations and the French court decided it is the duty of the seller to ensure compliance with French regulations. ["Caiato Roger v La Société française de factoring" international factor France (SA) (1995) 93/4126. English language abstract available at http://www.uncitral.org/clout/showDocument.do?documentUid=1425 at 22 December 2007. . Full translation available at http://www.cisg.law.pace.edu/cases/950913f1.html at 22 December 2007.]

These two cases were held by one commentator to be an example of contradictory jurisprudence. [Nicholas Whittington, ‘Comment on Professor Schwenzer’s Paper’ (2005) 36 "Victoria University of Wellington Law Review" 809.] While another commentator saw the cases as not contradictory as the German case could be distinguished on a number of points. [Andrea Charters, ‘Fitting the Situation: The CISG and the Regulated Market’ (2005) 4 "Washington University Global Studies Law Review" 1, 38.] It is noticeable that the French court chose not to consider the German court’s decision in its published decision. In any event, it would seem that if there is room for contrary decisions on the obligation for a seller to conform to the regulations in force in the buyer’s State and the exceptions to that obligation then the Convention should be clarified to increase certainty, particularly if the reluctance to use foreign precedent continues.

CISG advocates are also concerned that the natural inclination of judges is to interpret the CISG using the methods familiar to them from their own State [Nicholas Whittington, ‘Comment on Professor Schwenzer’s Paper’ (2005) 36 Victoria University of Wellington Law Review 809.] rather than attempting to apply the general principles of the Convention or the rules of private international law. [Article 7 (2).] This is despite the comment from one highly respected academic that ‘it should be a rare, or non-existent, case where there are no relevant general principles to which a court might have recourse’ under the CISG. [John Felemegas, ‘The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation (2000)’ "Pace Review of the Convention on Contracts for the International Sale of Goods (CISG)" 115, 276.] This concern has been supported by research of the CISG Advisory Council which has said, in the context of the interpretation of Articles 38 and 39 [Articles 38 and 39 discuss the notice to be given by the buyer to the seller of non-conforming goods.] , there is a tendency for courts to interpret the articles in the light of their own State’s law and some States have ‘struggled to apply [the articles] appropriately’. [CISG-AC Opinion No 2, Examination of the Goods and Notice of Non-Conformity - Articles 38 and 39, 7 June 2004. Rapporteur: Professor Eric Bergsten, Emeritus, Pace University New York 6, 7.] In one of a number of criticisms [See also for example, Antonin Pribetic, ‘The (CISG) Road Less Travelled: GreCon Dimter Inc. v. J.R. Normand Inc.’ (2006) 44 (1) "Canadian Business Law Journal" 92.] of Canadian court decisions to use local legislation to interpret the CISG one commentator said the CISG was designed to ‘replace existing domestic laws and case law’ and attempts to resolve gaps should not be by ‘reference to relevant provisions of [local] sales law’. [Peter Mazzacano, ‘Canadian Jurisprudence and the Uniform Application of the UN Convention on Contracts for the International Sale of Goods’ (2006) 18 (1) "Pace International Law Review" 46.]

Critics of the multiple language versions of the CISG claim it is inevitable the versions will not be totally consistent because of translation errors and the untranslatability of ‘subtle nuances’ of language. [Arthur Rossett, ‘Critical Reflections on the United Nations Convention on Contracts for the International Sale of Goods’ (1984) 45 "Ohio State Law Journal" 265, 301.] This argument, although with some validity, would not seem peculiar to the CISG but common to any and all treaties that exist in multiple languages. The "reductio ad absurdum" would seem to be that all international treaties should exist in only a single language, something which is clearly neither practical nor desirable.

Other criticisms of the Convention are that it is incomplete, there is no mechanism for updating the provisions and no international panel to resolve interpretation issues. For example, the CISG does not govern the validity of the contract, nor does it consider electronic contracts. [Jacob Ziegel, ‘The Future of the International Sales Convention from a Common Law Perspective’ (2000) 6 "New Zealand Business Law Quarterly" 336, 345.]

Despite the critics, a supporter has said ‘ [t] he fact that the costly ignorance of the early days, when many lawyers ignored the CISG entirely, has been replaced by too much enthusiasm that leads to … oversimplification, cannot be blamed on the CISG’. [Franco Ferrari, ‘What Sources of Law for Contracts for the International Sale of Goods? Why One Has to Look Beyond the CISG’ (2005) 25 "International Review of Law and Economics" 314, 341.]

Future Directions

Greater acceptance of the CISG will come from three directions. Firstly, it is likely that within the global legal profession, as the numbers of new lawyers educated in the CISG increases, the existing Contracting States will embrace the CISG, appropriately interpret the articles and demonstrate a greater willingness to accept precedents from other Contracting States.

Secondly, business people will increasingly pressure both lawyers and governments to make sales of goods disputes less expensive and reduce the risk of being forced to use a legal system that may be completely alien to their own. Both of these objectives can be achieved through use of the CISG. [Peter Schlechtriem, ‘Requirements of Application and Sphere of Applicability of the CISG’ (2005) 36 "Victoria University of Wellington Law Review" 781.]

Finally, UNCITRAL will need to develop a mechanism to further develop the Convention and to resolve conflicting interpretation issues. [See John Felemegas, ‘The United Nations Convention on Contracts for the International Sale of Goods: Article 7 and Uniform Interpretation (2000)’ "Pace Review of the Convention on Contracts for the International Sale of Goods (CISG)" Chapter 3 for a discussion on how this could be achieved.] This will make it more attractive to both business people and potential Contracting States.

Differences with Country Legislation Relating to the Sale of Goods

Depending on the country, the CISG can represent a small or significant departure from local legislation relating to the sale of goods, and in this can provide important benefits to companies from one contracting state that import goods into other states that have ratified the CISG.

Many countries that have signed the CISG have made declarations and reservations as to the Treaty's scope. [http://untreaty.un.org/ENGLISH/bible/englishinternetbible/partI/chapterX/treaty20.asp#participant]

Differences with United States of America Legislation

In the USA, 49 of 50 states [The exception is Louisiana.] have adopted common legislation referred to in the U.S. as the Uniform Commercial Code ("UCC"). The UCC is similar to the CISG in most ways as a means for promoting contracts for the sales of goods. The UCC departs from the CISG in some areas, such as the following areas that tend to reflect more general aspects of the U.S. legal system:

: Terms of Acceptance - Under the CISG, acceptance occurs when it is received by the offeror, a rule similar to many civil law jurisdictions which contemplate for service to be effective upon receipt; by contrast the U.S. legal system often applies the so-called "mailbox" rule by which, acceptance, like service, can occur at the time the offeree transmits it to the offeror.

: "Battle of Forms" - Under the CISG, a reply to an offer that purports to be an acceptance, but has additions, limitations, or other modifications is generally considered by the CISG to be a rejection and counteroffer. The UCC, on the other hand, tries to avoid the "battle of forms" that can result from such a rule, and allows an expression of acceptance to be operative, unless the acceptance states that it is conditioned on the offeror consenting to the additional or different terms contained in the acceptance.

: Writing Requirement - Unless otherwise specified by a ratifying state, the CISG does not require that a sales contract be reduced to a writing. Under the UCC's statute of frauds, oral contracts selling goods for a price of $500.00 or more are generally not enforceable.

Nevertheless, because the U.S. has ratified the CISG, it has the force of federal law and supersedes UCC-based state law under the Supremacy Clause. Among the U.S. reservations to the CISG is the provision that the CISG will apply only as to contracts with parties located in other CISG Contracting States, a reservation permitted by the CISG in Article 95. Therefore, in "international" contracts for the sale of goods between a U.S. entity and an entity of a Contracting State the CISG will apply unless the contract's choice of law clause specifically provides for non-CISG terms, or for the application of the law of a non-Contracting State. Conversely, in "international" contracts for the sale of goods between a U.S. entity and an entity of a non-Contracting State, to be adjudicated by a U.S. court, the CISG will not apply and the contract will be governed by the domestic law applicable according to private international law rules .

Footnotes

External links

* [http://cisgw3.law.pace.edu/cisg/text/treaty.html Text of the CISG]
* [http://www.cisg.law.pace.edu/ Pace Law School database on the CISG and International Commercial Law.]
* [http://www.ccisg.org/ Online Commentary on the CISG ccisg.org]
* [http://www.osec.doc.gov/ogc/occic/cisg.htm US Department of Commerce Commentary]
*International Commercial Terms (Incoterms)
*Uniform Commercial Code (UCC)
* [http://www.cisgsong.info CISG Song]

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