The United Nations Convention on Contracts for the International Sale of Goods (CISG)
While we export and import all the time, we often do not realize the applicability of the U.N. Convention on Contracts for the International Sale of Goods. This Convention standardizes international sales law which is very important when dealing with businesses from other States. A sale falls under this Convention when it involves parties whose places of business are in different states (ie United States and Portugal). Another important point is that the CISG focuses on cross-border sales of goods, and not services. The Convention recognizes this distinction and for contracts for sale of goods and services, it applies special rules.
As of August 2010, the United Nations Convention on Contracts for the International Sale of Goods has been ratified by 77 States, including the United States. Most of the States that ratified it are in North America, Europe, Asia and parts of South America. Significant numbers of States in Central Asia and Africa have not ratified it. Since the Convention offers important legal protections, it is important to know to which businesses they apply by virtue of where the businesses are located.
This Convention sets uniform rules on the choice of law, formation of the contract, sale of goods, and many other provisions which enhances transparency and predictability. In many ways, the Convention is similar to the Uniform Commercial Code (UCC), except that it is international.
There are many important distinctions between CISG and UCC. They include terms of acceptance, writing requirements, and 'battle of forms.' Since the United States ratified the CISG, it takes priority over UCC under the Supremacy Clause of the U.S. Constitution.
It is important to understand various aspects of the United Nations Convention on Contracts for the International Sale of Goods when engaging in international sales, its applicability, protections, and rules. International Business Law attorneys at The Federal Practice Group are ready to provide legal management and guidance for your international transactions under CISG. This information is not legal advice and it is intended for general public information only
