International Sale Of Goods: The CISG

International Sale Of Goods: The CISG - The Sale Of Goods Act

TABLE OF CONTENTS

INTRODUCTION4

WHEN DOES THE CISG APPLY?8

THE FORMATION OF THE CONTRACT9

THE RIGHTS AND OBLIGATIONS OF THE PARTIES10

OBLIGATIONS OF THE SELLER10

OBLIGATIONS OF THE BUYER12

SPECIFIC PERFORMANCE14

AVOIDANCE15

DAMAGES16

COMMODITY TRADE -- SOME OBSERVATIONS17

COMMODITY TRADE -- A COMPARATIVE ANALYSIS23

NON-DELIVERY AND DAMAGES27

DELIVERY OF SUBSTITUTE GOODS31

UNITED NATION'S CISG33

PROBLEMS WITH CISG38

CISG CASES- COURT DECISION42

PERRY ENG P/L (REC AND MAN APPT'D) V BERNOLD AG NO. SCGRG-99-1063 [2001] SASC 15 (1 FEBRUARY 2001)43

GINZA PTE LTD V VISTA CORPORATION PTY LTD [2003] WASC 11 (17 JANUARY 2003)43

PLAYCORP PTY LTD V TAIYO KOGYO LIMITED [2003] VSC 108 (24 APRIL 2003)45

SUMMIT CHEMICALS PTY LTD -v- VETROTEX ESPANA SA [2004] WASCA 109 (27 May 2004)47

REMEDIES FOR BREACH OF CONTRACT UNDER THE CISG49

THE ECONOMIC PERSPECTIVE ON CONTRACT REMEDIES AS APPLIED TO INTERNATIONAL SALES52

SPECIFIC RELIEF UNDER THE CISG57

MONETARY RELIEF UNDER THE CISG61

CONCLUSION67

REFERENCES69

International sale of goods the CISG-The sale of goods act

INTRODUCTION

Whenever parties enter into contracts the correct choice of law is crucial. It determines the legal relationship as it is impossible for parties to negotiate every point. A contract normally merely settles the main points. Standard form contracts appear to be a solution which businesses adopt in order to define their relationships in a standard and consistent way. It follows that the standard form contract is inevitably intertwined with domestic law including the CISG which fills the gaps left by the standard form contract. Put simply, municipal law provides an 'infrastructure' for standard form contracts.

It is obvious that a party, if given the choice and being the dominant partner in the negotiations, will choose its own law. The familiarity argument is often quoted to justify such a choice. If on the other hand the two parties are evenly matched, much time and energy could be saved by simply agreeing not on a neutral law but a unified law such as the CISG. Transaction costs are kept at a low level and it has been argued that the logical extension to the CISG is also to include the UNIDROIT Principles or PECL into the contract. (Berlin, 2009, pp.125)

'The UNIDROIT Principles and the PECL encapsulate the common core of contract law principles accepted intentionally, or Europe-wide, respectively, and constitute a concise, comprehensive, and workable set of rules.'

Of special interest to this paper is whether the CISG can resolve disputes involving commodity sales. Unlike machinery and ready made consumer goods commodities are often traded while in transit and one consignment of say oil can have up to 100 sales transactions before it reaches the ultimate buyer. The question is whether the CISG takes on the mantle of a neutral law in dealing with commodity sales. It has been argued, and this is very pertinent in this case, that the most suitable law is that of a state that plays a dominant role in the particular area of trade. In this case the law on commodity markets has been dominated by English law due to the special courts set up in London to deal ...