CISGVienna Convention

1
CISG/Vienna Convention

• 57 parties as of 10 February 2000
• Australia a party
• State legislation - Sale of Goods (Vienna
  Convention) Act 1987
• Application
• Art 1(1)(a) - if international sale and both
  parties in Convention countries
• Art 1(1)(b) - if governing law that of a
  Convention country (eg, Australia)

2
CISG/Vienna Convention

• Comprehensive regulation of rights and
  obligations
• Article 6 gap-filling
• Not if expressly excluded
• Not to the extent that parties have agreed
  inconsistent terms
• Therefore not to the extent that standard trade
  terms differ (if used by parties)

3
The CISG

• Hybrid of common law and civil law concepts
• Art 7(1) regard to be had to
• its international character
• the need to promote uniformity in its
  application
• the observance of good faith in international
  trade

4
Validity exception

• Art 4 CISG does not govern the validity of the
  contract or any of its provisions
• What determines validity?
• National law?
• Transnational jurisprudence?
• Eg, what about national law saying no warranty
  clauses invalid?

5
The CISG

• Part II deals with formation
• Will usually apply unless CISG as a whole is
  intended to be excluded
• Offer and acceptance model
• Mirror image and last shot rules
• NB by no means universal in domestic laws
• No notion of consideration
• Eg, binding contract to do something youre
  already contractually obliged to do

6
Remedies under the CISG

• The pivot is not acceptance but avoidance
• Art 49(1) - buyer may avoid if fundamental breach
  by seller
• Art 64 equivalent for seller
• Art 25 - definition of fundamental breach
• Art 82(1) - no avoidance if restitution impossible

7
Avoidance

• Articles 81 to 84
• Restitution - returning goods and money
• Making available for seller to retake delivery
• Even then, buyer must preserve for seller Arts
  85 to 88
• May still seek damages
• eg, Art 45(2)

8
If no avoidance

• More ready availability of specific
  performance/repair, etc
• Articles 46 to 52 (for buyer)
• Good faith - keeping the contract alive
• Specific performance on request - Art 46
• Extension of time for performance (Nachfrist) -
  Art 47
• Seller can remedy defective performance - Art 48

9
If no avoidance (contd)

• Article 50
• Buyer may reduce price
• Like an automatic set-off/counterclaim
• Concept taken from German law
• Could/should use German cases (remember Art 7)

10
Australias choice of law rule

• Akai Pty Ltd v Peoples Insurance Co Ltd (1996)
  188 CLR 418
• Two-stage test
• Have the parties chosen (expressly or impliedly)?
• If not, law selects - closest and most real
  connection

11
Other clauses

• Force majeure clauses
• Contractual codification of civil law-like
  modification of parties obligations
• Hardship clauses
• Conceptual problems
• How hard is hard?