CISG Provisions

CISG Article 7(1)

(1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.

CISG Article 7(2)

(2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principle on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.

CISG Article 1(2)

(2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or information disclosed by, the parties at any time before or at the conclusion of the contract.

CISG Article 10(b)

(b) If a party does not have a place of business, reference is to be made to his habitual residence.

CISG Article 1(1)(b)

(b) When the rules of private international law lead to the application of the law of a Contracting State.

CISG Article 96

A Contracting State whose legislation requires contracts of sale to be concluded in or evidence by writing may at any time make a declaration in accordance with Article 12 that any provision of Article 11, Article 29, or Part II of this Convention... does not apply where any party has his place of business in that State. The U.S. has NOT done this.

CISG Article 11

A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.

CISG Article 95

Any State may declare at the time of the deposit of its instrument of ratification... that it will not be bound by Article 1(1)(b).

CISG Article 14

Article 14: Offer has 3 requirements: (1) A contract addressed to one or more specific persons; (2) An offer is sufficiently definite (indicate goods, mention of quantity or price); and (3) Indicates the intention to be bound If the three criteria above are not met, this is merely an invitation to make an offer.

CISG Article 16

Article 16: Revocation May be revoked before dispatched acceptance. But, it CANNOT be revoked if: (1) It indicates that it is irrevocable; and (2) There is Reasonable and Reliance

CISG Article 18

Article 18: Acceptance ("Assent") Silence does not in and of itself = acceptance Effective when it reaches the offeror Not effective if not reaching in time Oral Offers must be accepted immediately Past dealings can modify these rules.

CISG Article 19

Article 19: Alterations/Modifications of the Contract Different terms = rejection and counter-offer. Non-material altering is not a rejection. Acceptance of non-modified terms = acceptance Clarification of material terms is NOT a material altering.

CISG Article 15

Articles 15: Withdrawal Effective when it reaches the offeree. May be withdrawn if before or at the same time as the offer reaching the party. (This is the opposite of the mailbox rule.)

Prime Start Ltd v. Maher Forest Products Ltd.

Because not all of the parties are from countries that signed the CISG, the CISG cannot apply to this dispute, even if a traditional choice-of-law analysis leads to the application of the law of the United States.

CISG Article 10(a)

For the purposes of this Convention: (a) if a party has more than one place of business, the place of business in that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract.

Forestal Guarani S.A. v. Daros International Inc.

If one party has made an article 96 declaration, and the other has not, we must conduct a choice-of-law analysis based on private international law principles to determine which state's law governs contract formation, and then apply that law to a party's claim.

Filanto S.p.A. v. Chilewich International Corp.

In this case the "agreement in writing" requirement of the Arbitration Convention must be read in light of, and with reference to, the substantive international law of contracts embodied in the CISG.

United Technologies Int'l v. Malev Hungarian Airlines

Plaintiff provided an opportunity to choose a certain type of engine or jet engine at the time of the acceptance of its offer. Because these offers were for alternative options, there was not the requisite specific for an Offer under Article 14. Thus there was no sales contract established between the Parties.

Amco Ukrservice v. American Meter Co.

The CISG does not apply to joint venture agreements, distributorship agreements, or otherwise "framework agreements", but only sales contracts.

What parts of the contract are governed by the CISG?

The CISG governs two basis aspects of the contract: (1) Formation of the Contract; and (2) Obligations of the parties to the contract. But these can be excluded through an Article 92 declaration.

CISG Article 1(1)(a)

The Convention applies to the contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States.

CISG Article 6

The parties may exclude the application of this Convention, or subject to Article 12, derogate from or vary the effect of any of its provisions.

CISG and Market Analyses

UNCITRAL CLOUT Case 122 The agreement to prepare a market analysis is not a sale of goods within the meaning of the CISG.

CISG and Software

UNCITRAL CLOUT Case 131 The CISG applies to software

What is NOT governed by the CISG?

Validity of the contract, third-party rights, and property rights in the goods are not governed by the CISG, and must instead be governed by another substantive law. This substantive law, if not clarified in the contract, will require courts to do a choice of law analysis.

Effect of the CISG if applicable

When the CISG applies, it displaces domestic law. For the United States, the CISG often displaces the UCC in international sales contracts. The CISG is mandatory and default, but parties can choose not to apply it, but they must do it expressly. This is done via CISG Article 6.