INTERNATIONAL TRADE

International Trade

International Trade

Introduction

The contracts of sales are universally recognized as the legal mechanism for the trading of goods and help the merchants or trader avoiding the risk of long-term agreements. As consequence of the varieties of law regulating specific types of contracts in the European Communion, Principles had to be made to be applied as general rules of contract law (The Principles of European Contract of Law 1997). The Principles apply when contracting parties have agreed to incorporate them into their contracts. This paper critically compares and contrasts the CISG with the domestic Sale of Goods Act and should the UK adopt the CISG or not.

Discussion

In 1996, the United Nations named an organization, the U.N. Commission on International Trade Law or UNICITRAL, which was made up of thirty-six representatives from different countries around the world and is headquartered at the U.N. Vienna International Center in Austria to create the United Nations Convention on Contracts for the International Sale of Goods (CISG). Nevertheless it was very complicated to create this complex set of rules for so many countries of different culture, economic and political systems. The task of producing one international sales law to satisfy the needs and interest of every country was a true challenge.

It is almost impossible, in the field of international trade, to avoid problems concerning the applicability of the laws of different countries regarding the appreciation of the nature and scope of the problem and deciding which law is to apply(Bonython, 1951).

For this reason, international trade associations in traditional export commodities have been achieving harmonization of commercial terms. One of these associations is the Grain and Feed Trade Association (GAFTA) which has created a standard form contract for commodities sales



United Nations Convention on Contracts for the International Sale of Goods CISG

The CISG is a convention or agreement between nations that is binding on the legislature of a country that adopts it. Its propose is to unify the law of sales among the member states and to avoid the conflict of law between them that generates uncertainty and unpredictability. It is also very important for companies doing business around the world to know what their rights will be under a sales contract and is much simpler for us to advise clients when the law is uniform.

The Vienna Convention has already been adopted by sixty-two countries and is available in six languages (Arabic, Chinese, English, French, Russian and Spanish). Its applicability depends on three factors: 1. The contract is for the commercial sale of goods, 2. It is between parties whose places of business are in different countries and, 3. The places of business are located in countries that have ratified the convention. If either the buyers or the sellers have their place of business in more than one country, such as multinational corporations, the place of business would be the country that has the closet relation to the contract and where it will be performed. In United States of America, the District Court of ...