• International sale contract should include a choice of law clause- which is a clause stipulating the law applicable to the contract, such as English law.
• In the event of a dispute to agree on a clause, the forum applies its private international rules to determine the law applicable to the contract
• One way to tackle this uncertainty is to harmonize the law relating to international sales in the form of an international convention for the worldwide adoption, thus enabling the application of a uniform set of rules to such transactions.
• The convention on international sales of goods 1980 (CISG or the Vienna Convention) cameinto force in 1988 with the required 10 ratifications.
• The United Kingdom has not yet ratified the convention due to 1. Unfamiliarity with some of the concepts and rights introduced by the Vienna convention such as fundamental breach, right to cure after the time fixed for performance and the self-help remedy of reducing the price where non conforming goods are delivered.
2. Popularity of the sales of goods act 1979 in the international commercial sector as evidenced by the use of choice of English courts as a forum for dispute resolution
3. Doubts about the formation of uniformity, due to differing traditions and interpretations
4. Minimum effectiveness – most commercial traders will most likely opt out of the convention
5. Incomprehensiveness since the viennna convention does not address the issues such as the validity of the contract and passing of property.
• Most member states of the European Union are parties to the convention, so are the world’s biggest traders such as the US and China.
• The reason for the lack of interests in the ULIS and ULFIS convention is by large political, though legal uncertainties also played a role.
• The Vienna convention does not promote or adopt principles found in any one legal system in preference to another but it strives towards a compromise that would be acceptable to all regardless of their legal or economic background. ‘it is a marriage between socialist, third world, common and civil law principles.’
• Passing of property, validity of contract, product liability and consumer sales are some of the areas that have not been tackled in the Vienna convention. In these matters one must resort to the relevant domestic law applicable to the contract. Other features are party autonomy (freedom of the parties to a transaction to opt out of the convention) and use of language exhibition a pragmatism that would appeal to the mercantile community.
• In order to avoid the perceived difficulties associated with legal technical language by non-lawyers and lawyers (from different jurisdictions) alike, the provisions avoid, for the most part, technical legal jargon thus making it more accessible. Instead it speaks directly to the business community by providing the results that would meet the ordinary expectations of a business person.
• The Vienna convention is comprised of four parts: Parts 1 (Arts 1-13) on sphere of application and general provisions, part 2 (Arts 14-24) on formation of contract , Part 3 (Arts 25-88) on obligations of the seller, the buyer, remedies for the breach of contract by the seller and buyer, passing of the risk and damages, and Part 4 (articles 8 -101) on final provisions dealing with matters such as depositary, reservations and entry into force.
• Article 1 of the convention starts off by saying that it applies to ‘contract of sale goods’
• A contract of the sale of goods will come within the ambit of the Vienna convention if: the places of business are in different states (Art 1); and both these states are contracting states to the Vienna Convention (Art 1 (1)(a); and both parties know that they have place of business in different states on the basis of the contract or dealings or information disclosed (Art 1(2))
• By way of illustration, a contract