International business transactions


What parties are subject to CISG?



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OUTLINE International Business Transactions
What parties are subject to CISG?

  • Art 1  sale of goods between parties whose places of business are in different states

    • when states are Contracting states, or

    • when COL rules point to application of the law of a contracting state

      • even if parties to contract are not from Contracting States  filino and Korean parties enter into contract that provides for NY law and parties go to NY court, then CISG would apply bc US is signatory, even if Philippines or Korea is signatory

      • Contracting countries are able to make reservation saying that Art. 1(1)(b) doesn’t apply

  • Where is place of business??

    • Art. 10 says place 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

    • Drafters made clear that “conclusion of the contract” means the day the contract is signed, not when performance is completed


Opting out

  • Art 6 says that parties may exclude application of CISG or, subject to Art 12, derogate from or vary the effect of any provisions

  • Just pointing to another law is not enough if that law is of Contracting state. If you want to exclude, should do so clearly.

    • Asante case (page 189)

      • Provision that agreement “shall be governed by the internal laws of the State of New York” was not enough to exclude CISG

    • BP Oil Intl case (page 190)

      • A signatory’s assent to the CISG incorporates the treaty as part of that nation’s domestic law. Where parties seek to apply a signatory’s domestic law in lieu of the CISG, they must affirmatively opt-out of the CISG

      • An affirmative opt-out requirement promotes uniformity and the observance of good faith I intl trade, two principles that guide interpretation of the CISG. Art 7(1)



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