One of the impacts of globalization is that it has resulted in a steady growth in the interdependency of world economies and increased the pace of international trade among countries around the world. The growing interdependency and international trade among countries call for international cooperation, the formation of international commercial contracts, as well as the resolution of inherent challenges that could potentially threaten international trade and commercial contracts. This is the basis for both the United Nations Convention on Contracts for the International Sales of Goods, popularly referred to as the UN Sales Convention and the Uniform Commercial Code. This essay paper seeks to compare and contrast the Uniform Commercial Code and the UN convention on contracts for international sales of goods (CISG).
The UN Convention on Contracts for International Sales of Goods (CISG), like the Uniform Commercial Code, governs the selling of goods in the international markets. This piece of legislation was spearheaded by the United Nations and opened for ratification by nations in 1980. According to Hancock, the legislation was effected on January 1, 1988, with the approval of only 10 countries. The convention has been described as one of the greatest intergovernmental achievements towards the unification of international commercial laws. The legislation is today a binding law in the United States, as well as most of its trading partners. Thus, the convention is a governing law concerned with all international commercial contracts on the sale of goods among businesses in countries that have ratified the convention.
The convention is an international-based analog to Article 2 of the US Uniform Commercial Code. The UN Convention on Contracts for International Sales of Goods (CISG) is an international sales legislation or act which provides substantive law on international commercial contracts for the sale of goods. The convention has three crucial procedural counterparts that deal with the conduct, as well as the enforcement of international sale contracts. These include the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, Model Law of International Commercial Arbitration of 1985, and the United Nations Commission on International Trade Law (UNCITRAL) of 1966. In the United States, the UN Convention on Contracts for International Sales of Goods (CISG) replaces Article 2 of the Uniform Commercial Code. According to Crocker, both the UN Convention on Contracts for International Sales of Goods (CISG) and the Uniform Commercial Code provide the guidelines for the formation of contracts in international sales. These laws are also similar because they both stipulate the obligations of the parties involved in the international sale of goods.
A key contrast between the Uniform Commercial Code and the UN Convention on Contracts for International Sales of Goods (CISG) is that the latter does not recognize and thus is less concerned with the Statute of Frauds. The Uniform Commercial Code recognizes the Statute of Frauds and thus emphasizes some writings to be signed by the parties enforcing the international sales contract. The Uniform Commercial Code permits certain disclaimers such as warranties. However, under the UN Convention on Contracts for International Sales of Goods (CISG) disclaimers such as those related to warranties are a completely open area. Under the UN Convention on Contracts for International Sales of Goods (CISG) unlike under the Uniform Commercial Code, any evidence beyond the written documentation is not admissible. Such evidence is generally referred to as parol evidence.
The UN Convention on Contracts for International Sales of Goods (CISG) recognizes the older rule of contracts referred to as “mirror image”. These old contract rules were in place before the establishment of the Uniform Commercial Code, and as such, were not recognized under this law. The “mirror image” rule of contracts requires that an offer for international sale must be accepted without any modification. Hancock argues that a significant contrast between the UN Convention on Contracts for International Sales of Goods (CISG) and the Uniform Commercial Code is that the former is a blend of both civil law and common law. The UN Convention on Contracts for International Sales of Goods (CISG), unlike the Uniform Commercial Code, integrates aspects of some older international legislation on international sales. These two older pieces of legislation are the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF) and the Uniform Law on the International Sale of Goods (ULIS). Lastly, when a seller in the international contract alleges “commercial impracticability”, both parties in the contract are excused under the UN Convention on Contracts for International Sales of Goods (CISG). However, under similar circumstances, the Uniform Commercial Code excuses only the seller.
In conclusion, the UN Convention on Contracts for International Sales of Goods (CISG) is part of the United States domestic law. As such, parties can opt out of it. The UN Convention on Contracts for International Sales of Goods (CISG) applies only to the seller and the buyer and not to any third parties in an international deal. The law does not concern itself with property in the goods under question or even the validity of a contract. It is for these reasons that the UN Convention on Contracts for International Sales of Goods (CISG) is not popular. On the other hand, the Uniform Commercial Code is highly popular. It takes into consideration various issues not emphasized by the UN Convention on Contracts for International Sales of Goods (CISG).
Bibliography
Crocker, David P., The Convention You’ve Never Heard of: the United Nations Convention on Contracts for International Sales of Goods, The Virtual Lawyer, 2008, Web.
Emerson, R.W., Business Law. New York, Barron’s Educational Series, Inc., 2009.
Hancock, Stewart. ‘A Uniform Commercial Code for International Sales? We Have It Now’. 67 New York State Bar Journal, vol. 36, no. 1, 1995, pp. 20-23.