When handling a commercial case between parties from different countries, it is important to consider what impact, if any, the United Nations Convention on Contracts for the International Sale of Goods (“CISG”) may have on the dispute. If it applies to a contract dispute, the CISG will supplant the Uniform Commercial Code and other state law concerning sales of goods.
The CISG is a multinational treaty that went into effect in 1988. Eighty-three countries have adopted the CISG. Unless specifically excluded, the CISG applies to sale of goods contracts between parties who reside in different countries and (i) both parties’ home states have signed on to the treaty, or (ii) the law of a treaty signatory applies. The United States is a party to the treaty, but has opted out of option (ii) above.
The CISG differs in several notable ways from Article 2 of the Uniform Commercial Code. For instance, Article 11 of the CISG states that a contract for the sale of goods does not require a writing. Article 11 reads: “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.” By contrast, the Uniform Commercial Code requires that contracts for the sale of goods valued at over $500 be evidenced by a writing. G.L. c. 106, § 2-201. In another example, the CISG’s rules on acceptance of an offer, found in Article 19, follow the common law “mirror image rule” closely, whereas the Uniform Commercial Code adopts a “battle of the forms” approach to a non-conforming acceptance of an offer. G.L. c. 106, § 2-207. These are just two of many distinctions to be drawn between the CISG and the Uniform Commercial Code.
The CISG is an important — yet often ignored — treaty. It should not be overlooked by those drafting and/or litigating contracts for the international sale of goods, as it might substantially affect buyers’ and sellers’ rights and obligations international transactions.