Outline of UNCISG

International transactions law

a. When Does it Apply?
i. Art. 1 – To contracting states OR where rules of Private International Law would lead to applying law of a contracting state. It is supplementary private law not public law.
ii. NOT Comprehensive deals with sales K’s…UNIDROIT deals with all international commercial K’s (distribution, agency, marketing, etc).
1. UNIDROIT can have legal effect when
a. parties agree expressly
b. parties agree that Lex Mercatoria (i.e. general principles should apply)
c. domestic law unable to provide a solution
iii. Hypo K between buyer and seller (A & B), both are parties to CISG
1. Axn brought in C (contracting party) CISG applies unless excluded
2. Axn brought in C (NON-contracting party) CISG probably applies because if it recognizes 1a, CISG applies. If not, and it applies A or B law, CISG applies by default (it is part of domestic law of both countries). If choice of law leads them to apply C’s domestic law, should use CISG unless pub policy reason not to. (parties have chosen their law)
b. When doesn’t it apply?
i. Goods for personal / household use
ii. Goods by auction
iii. Execution or otherwise by authority of law
iv. Stocks, shares, securities, negotiable instruments
v. Ships, vessels, aircraft
vi. Electricity
vii. Joint Venture agreements doesn’t apply to JV agreements or distributorship agreements themselves, but may apply to some of the sales contracts pursuant to JV.
viii. Art 6 parties Can choose to opt out or derogate from provisions.
c. CISG PART I – Contract Interpretation
i. Gaps can be filled without choice of law determination. GOVERNED by CISG, but CISG is silent. Example: Art 78 says if you’re not paid on time, you’re due interest. Nothing about how to calculate interest, therefore it is a GAP.
1. Art. 7 Gaps are filled in conformity w/ general CISG principles; i.e. good faith, reasonableness, primacy of the K and freedom of K, int’l K’s not subject to writing requirements, general presumption that parties have formed a binding K.
ii. Exclusions treated by direct appeal to domestic law. not governed by CISG (such as 3d party rights) so they are normally covered by substantive contract law (outside CISG)..require private international choice-of law analysist (absent a choice of law clause in K)
iii. Difference between UCC and CISG:
1. Parol Evidence Rule writing UCC §2-202 says you can’t look at oral agreements that contradicts a subsequent writing. CISG says 8(3) in interpreting the K, due consid should be given to all relevant circs.
d. Contract Formation
i. Offer Art. 14-17
1. Art 14 – Minimum req’d for offer: one or more specific persons, sufficiently def, indicates intention to be bound. Suff def: goods and expressly/implicitly has a way to determine qty and price
2. Art. 15 Offer effective when it reaches offeree.
3. Revocation of offer- this means it has reached the offeree and has become an offer, then seller wants to revoke! until K is concluded can be revoked if it reaches offeree before offeree has dispatched an acceptance…EXCEPTIONS –
a. cant be rev’d if it indicates a fixed time for acceptance that it is irrevocable
b. if offeree was reasonable to rely and he acted in reliance
c. Differences: UCC and Common law –
– Common law if no consideration, revocable
– UCC §2-205 – if you say it’s irrevocable, it can must be held open, but not for longer than 3 months. This assurance must be signed separately by offeror.
4. Termination of Offer Art 17 terminated when it reaches offeror, doesn’t matter if it was irrevocable

ii. Withdrawal Art 15(2)
1. 15(2) even if it’s irrevocable, offer can be withdrawn at any time as long as w/d reaches offeree before or at same time as offer.

iii. Acceptance Art 18-22
1. Form of acceptance 18 (1) and (2)- you need assent to the offer and communication of that assent to the offeror, talks about oral offers, time period for assent, etc. 18(3) Customary practice
2. Battle of the Forms: Mirror Image Rule 19 -reply must be mirror image, no material deviations….Examples of material: price, pay, quality, delivery, liability, dispute resolution. Can object to any terms that aren’t identical 19(2), that becomes a counteroffer, which means that no K is formed!
a. If there is a material change and other party doesn’t argue, it becomes part of the K!
b. UNIDROIT rejects the mirror image rule (is like the UCC revised) in that case there WILL be a K on the agreed terms, the additional terms that differ from original terms cancel each other out. Causes more K’s to be formed!

3. Mail Box Rule: Art 15 (1) offer effective when it reaches offeree; Art. 16 (1) offer revoked when revocation reaches offeree before offeree mails acceptance
a. Art. 17: offer terminated when rejection reaches offeror
b. Art. 18: acceptance effective when it reaches offeror
e. Performance of the Contract
i. Delivery –
ii. Conformity of Goods Art 35 buyer’s reasonable expectations of quantity, quality, fitness for a particular purpose, etc. PROBLEM 3-12 p. 229
1. Medical Marketing International v. Internazionale Medico Scientifica Srl 1999 Under article 35, not required to supply goods that conform to laws/regs in buyer’s place of business UNLESS 1)regs are the same as in seller’s state, 2) buyer informed seller of the regs, or 3) special circumstances exist through which the seller knew or should have known about the regulations.

iii. Payment
1. Excused performance Art 79 same thing with “route” changes that involve increased cost, etc Check 79 (1-4) If goods will perish, different outcome than if it’s per shoes (Tsakiroglou case)
iv. Seller’s Remedies: Art 61-65 can compel performance 62, extend time for performance, (63), sue for dams Art 74-76.

II. Commercial Terms under ICC INCOTERMS:apply only to matters concerning the duties and obligations of sellers and buyers to a K of sale relating to the delivery of tangible goods sold.
a. Four Groups of terms –
i. E terms Seller has oblig to make the goods available at seller’s premises.
ii. F terms Seller must deliver the goods to a carrier named by buyer.
iii. C terms Seller has to K for carriage w/o assuming risk of loss or additional costs past pt of shipment
iv. D terms Seller bears all costs and risks to bring the goods to the place of destination.
b. HOW THESE TRANSACTIONS WORK:
i. Seller makes product, drops them off with carrier, gets bill of lading from carrier which gets fedexed to buyer as proof that it was shipped. Seller wants payment.
ii. Documentary Sales Txn:

Author: admin

Author: admin

Mentioned in these Entries

Common law, Lex Mercatoria, Parol Evidence Rule, Private International Law.