Chapter 5 Sales United Nations Convention on Contracts

Chapter 5 Sales United Nations Convention on Contracts for the International Sale of Goods

Sales l Section A 1. Brief Introduction ---The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) came into force January 1, 1988. ---CISG is organized in 4 parts: PartⅠcontains the Convention’s general provisions, including rules on the scope of its applications and rules of interpretation. PartⅡgoverns the formation of contracts. PartⅢ governs the rights and obligations of buyers and sellers. PartⅣ contains provisions for the ratification and the entry into force of the Convention.

Sales l Section B Transaction Covered in CISG 1. Definition of International Sale --- A sale involving a buyer and seller with places of business in different states. 2. Explanation of International Sale --- either both of states must be contracting states or the rule of private international law must lead to the application of the law of a contracting state.

Sales 3. Goods Defined Six specific categories of sales are excluded. The excluded transactions are: (1) goods bought for personal, family or household use; (2) auction sales; and (3) sales “on execution or otherwise by authority of law. The excluded goods are: (1) stocks, shares, investment securities, negotiable instruments, or money; (2) ships, vessels, hovercraft or aircraft; and (3) electricity.

Sales l Section C Contractual Issues Excluded from the Coverage of CISG only deals with (1) the formation of the contract and (2) the remedies available to the buyer and seller. CISG specifically excludes questions about(1) the legality of the contract, (2) the competency of the parties, (3) the rights of third parties, and (4) liability for death or personal injury. Preempt

Sales l Section D Formation of the Contract The Offer 1. Offer: a proposal addressed to specific persons indicating an intention to enter into a contract under specified terms. 2. Requirements for an offer: (1) Definiteness: an offer must describe the goods with sufficient clarity that the parties know what is being offered for sale, and it must also state the quantity and price. (2) Specific Offerees

Sales 3. Effectiveness of an offer ---An offer becomes effective only after it reaches the offeree. ---Offers, including offers that promise that they are irrevocable, can be withdrawn prior to their reaching the offeree.

Sales 4. Revocation ---Offers that do not state that they are irrevocable can be revoked any time before the offeree dispaches an acceptance. 5. Firm offer ---A firm offer is enforceable if the offeror makes the offer irrevocable or if the offeree can rely on conduct that implies that the offer is firm. (CISG)

Sales 6. Withdrawal ---Because an acceptance is normally not effective until the offeror receives it, an offeree may withdraw his acceptance any time before or simultaneous with its receipt.

Sales 7. Acceptance ---Acceptance must be received by the offeror within the time period specified in the offer. ---If no time period is given, acceptance must be received within a “reasonable” time. ---As for the effectiveness of the acceptance, CISG drafters opted for the receipt theory used in civil law countries rather than dispatch or post box theory used in common law countries.

Sales Section E General Standards of Performance 1. Fundamental Breach ---A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substabtially to deprive him of what he is entitled to expect under the contract. l

Sales 2. Avoidance（撤销合同） ---Notification by a party that it is canceling a contract and returning everything already received. 3. Request for specific performance

Sales l 1. (1) Section F Seller’s Obligations Deliver the goods Place for delivery The place for delivery is the place agreed to the contract; otherwise it is (a) the first carrier’s place on business if the contract involves the carriage of goods or (b) the place where the parties knew the goods were located or were to be manufactured or produced.

Sales (2) Time for delivery The seller is to deliver the goods on the date fixed in the contract, or if no date is fixed, within the reasonable time after the conclusion of the contract. If a time period is provided, the seller may deliver at any time within that period, unless the contract expressly says that the buyer is to choose the time.

Sales 2. The turning over of document(卖方提交货物单据义务) --- At the time and place for delivery, a seller must turn over any documents relating to the goods that the contract requires. 3. Conformity of Goods（卖方品质担保义务） ---Goods are of the quantity, quality and description required by the contract. --- Goods do not conform if they are subject to third-party claims. ---Notice of defect and curing defect 4. Waiver 5. Time for Examining Goods

Sales Section G Buyer’s Obligation 1. Payment of the price Time and place for payment (a) Pay the price at the time and place designated in the contract (b )If no time is specified, the buyer is to pay when the goods or documents controlling their disposition are delivered. (c) The buyer does not have to pay until after he has had a chance to examine the goods. (d) If no place is specified, then payment will be made at the place of delivery of goods or documents or the seller’s place of business. l

Sales Taking Delivery --- A buyer is obligated to cooperate with the seller to facilitate the transfer and to actually take over the goods. l

Sales l Section H The Passing of Risk