ATTORNEY’S GUIDE:

COMPARISON CHART
UCC AND CISG

DR. GIZEM ALPER © IICL- Institute of International Commercial Law (2021)

The purpose of this presentation is to highlight some of the main differences between the Uniform
Commercial Code Article 2 (“UCC”) and the United Nations Convention on Contracts for the
International Sale of Goods (“CISG”). An exhaustive discussion of the differences is beyond the
scope of this presentation. A comparison chart has been prepared for ease of reference. The UCC
provisions stated herein are from the UCC Model Law; it may vary slightly in each state.

Where relevant, CISG case law from the U.S. has been included; please note that case law included
herein is not an exhaustive list, it only serves as an example, and you may refer to the Pace
University Albert H. Kritzer CISG Database to further search CISG case law.

APPLICATION OF THE CISG

The UCC and CISG both govern the sale of goods. However, as per the supremacy clause of the
United States, CISG, as a self- executing multilateral international treaty, preempts UCC, when
there is an international sales contract to which CISG is applicable. CISG is applicable to a sales
contract when the parties to a contract are from different signatory countries. The CISG also
applies to an international sales contract when the private international law rules point to the laws
of a contracting country. However, as per the derogation made by the U.S. under CISG Art. 95, if
the private international law rules point to U.S. law, the CISG is not applicable. For information
on the application of the CISG, you may refer to the annotated text available at the Pace CISG
Database.

Suggested Citation: ALPER, G, Attorney’s Guide: Comparison Chart UCC and CISG, in Pace University Albert H.
Kritzer CISG Database (2021)

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 I. SPHERE OF APPLICATION

The sphere of application of the UCC and CISG vary slightly; consumer sales have been excluded
from the scope of the CISG (Art. 2). On the other hand, the UCC does not per se preclude consumer
sales; it merely does not impair the provisions of any other legal instrument governing the sale to
consumers.

UCC CISG

§ 2-102 Article 2
Unless the context otherwise requires, this This Convention does not apply to sales:
Article applies to transactions in goods; it does
not apply to any transaction which although in (a) of goods bought for personal, family or
the form of an unconditional contract to sell household use, unless the seller, at any time
or present sale is intended to operate only as a before or at the conclusion of the contract, neither
security transaction nor does this Article impair knew nor ought to have known that the goods
or repeal any statute regulating sales to were bought for any such use;
consumers, farmers or other specified classes of
buyers. (b) by auction;

(c) on execution or otherwise by authority

of law;

(d) of stocks, shares, investment securities,

negotiable instruments or money;

(e) of ships, vessels, hovercraft or aircraft;

(f) of electricity.

II. VALIDITY OF A CONTRACT

The validity of a contract is one of the issues excluded under the CISG; the CISG only governs
formation of a contract. Validity of a contract is related with enforceability; in other words, validity

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
of a contract concerns whether the contractual terms are enforceable. Nevertheless, it should be
noted that formal (writing) requirements are addressed in the CISG (see below).

Examples of validity of a contract issues are fraud, undue influence, mistake, capacity &
authorization, illegality, unconscionability and duress.

The line between the formation and validity of a contract is sometimes not clear cut. As such, at
times, courts have preferred to exclude the CISG, rather than first addressing contract formation
under the CISG, thereafter addressing validity issues under the UCC and common law contracts.
For example, see case law: Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc. (2006);
Amit Israeli v. Dott. Gallina et al. (2009).

UCC CISG

[Examples of provisions concerning validity Article 4

of contract is unconscionable contracts]
This Convention governs only the
formation of the contract of sale and the
rights and obligations of the seller and the
buyer arising from such a contract. In
particular, except as otherwise expressly
provided in this Convention, it is not
concerned with:

(a) the validity of the contract or of

any of its provisions or of any
usage;

(b) the effect which the contract may

have on the property in the goods
sold.

III. FORMAL REQUIREMENTS (WRITING REQUIREMENT)

The UCC requires any contract over $500 to be in writing. This is referred to as the statute of
frauds. On the other hand, the CISG does not require a contract to be in writing; it allows for oral
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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
contracts of any amount. There is also no formal requirement for modifications of a contract;
modifications do not necessarily have to be in writing.

UCC CISG

§ 2-201 Article 11
(1) Except as otherwise provided in this A contract of sale need not be concluded in or
section a contract for the sale of goods for the evidenced by writing and is not subject to any
price of $500 or more is not enforceable by other requirement as to form. It may be proved
way of action or defense unless there is some by any means, including witnesses.
writing sufficient to indicate that a contract for
sale has been made between the parties and
signed by the party against whom enforcement
is sought or by his authorized agent or broker.

IV. CONRACT INTERPRETATION (PAROL EVIDENCE)

The parol evidence rule determines to what extent parties may introduce into evidence of a prior
or contemporaneous agreement in order to modify, explain, or supplement a contract. The UCC,
similar to common law contracts, does not allow for the introduction of extrinsic evidence to
contradict a contract, when the contract has been completely integrated. In completely integrated
contracts, trade usage may be treated as extrinsic evidence. However, there are exceptions to the
parol evidence rule, which are primarily collateral in nature.

On the other hand, the parol evidence rule is not applicable to CISG contracts. The CISG allows
for the introduction of extrinsic evidence, such as evidence for establishing the subjective intent
of parties (CISG Art. 8(3)) or for allowing the introduction of trade usages inherent in international
trade (CISG Art. 9).

A landmark case on parol evidence is MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova
D'Agostino (1998). Also, see the recent
Transmar Commodity Group Ltd. v. Cooperativa Agraria Industrial Naranjillo Ltda. (2018) case
for an analysis comparing the parol evidence rule of New York to the CISG.

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 UCC CISG

§ 2-202 Article 8
…
Terms with respect to which the confirmatory
memoranda of the parties agree or which are (3) In determining the intent of a party or the
otherwise set forth in a writing intended by the understanding a reasonable person would have
parties as a final expression of the agreement had, due consideration is to be given to all
with respect to such terms as are included relevant circumstances of the case including
therein may not be contradicted by evidence of the negotiations, any practices which the
any prior agreement or of a contemporaneous parties have established between themselves,
oral agreement but may be explained or usages and any subsequent conduct of the
supplemented parties.

Article 9
• (a) by course of dealing or usage of
…
trade (Section 1-205) or by course of
performance (Section 2-208); and (2) The parties are considered, unless
• (b) by evidence of consistent additional otherwise agreed, to have impliedly made
terms unless the court finds the writing applicable to their contract or its formation a
to have been intended also as a usage of which the parties knew or ought to
complete and exclusive statement of have known and which in international trade is
the terms of the agreement. widely known to, and regularly observed by,
parties to contracts of the type involved in the
particular trade concerned.

V. CONTRACT FORMATION

A. OFFER

As per the CISG, an offer is made when it is “sufficiently definite” and indicates the intent of the
offeror to be bound by it (CISG Art. 14). A “sufficiently definite” offer consists of quantity and
explicit or implicit price. Nevertheless, CISG Art. 55 governs open price contracts, where a
contract has validly been formed; as such, the price is deemed to be the market price at the time
of conclusion of the contract. On the other hand, under the UCC, an offer is made by inviting
acceptance in any manner and does not necessarily have to consist of a price (UCC § 2-305). Thus,
UCC allows for open price, while the matter is not conclusively settled under the CISG. For further
scholarly discussions and foreign CISG case law, see Pace CISG Database.

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
The UCC has a firm offer rule; an offer made in writing assuring that it will be kept open is not
revocable. However, it may be revoked after the time fixed in the offer itself has passed or after a
reasonable time, which may not exceed three months. The CISG allows for revocation until
acceptance has been dispatched by the other party. An offer becomes irrevocable only if it is for a
fixed term, it has been stated as irrevocable therein or the other party has reasonably relied on it.
See case law for the interplay between reliance on irrevocable offers (CISG Art. 16) and
promissory estoppel claims: Asia Telco Technologies v. Brightstar International Corp. (2015).

It should also be noted that the CISG does not include the traditional U.S. “mailbox rule”, where
an acceptance is effective upon mailing. CISG Art. 18(2) requires an acceptance assent to reach
the offeror.

UCC CISG

§ 2-205 Article 16
(1) Until a contract is concluded an offer may
An offer by a merchant to buy or sell goods in be revoked if the revocation reaches the
a signed writing which by its terms gives offeree before he has dispatched an
assurance that it will be held open is not acceptance.
revocable, for lack of consideration, during the
time stated or if no time is stated for a (2) However, an offer cannot be revoked:
reasonable time, but in no event may such
period of irrevocability exceed three months; (a) if it indicates, whether by stating a fixed
but any such term of assurance on a form time for acceptance or otherwise, that it is
supplied by the offeree must be separately irrevocable; or
signed by the offeror.
(b) if it was reasonable for the offeree to rely
on the offer as being irrevocable and the
offeree has acted in reliance on the offer.

B. ACCEPTANCE (BATTLE OF FORMS)

The UCC and the CISG tackle battle of forms somewhat differently. As per the UCC, an offer is
accepted when there is a definite expression thereof. As such, an expression of acceptance is
construed, even if there are additional or differentiating terms. Nevertheless, if an offer has been

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
made conditional upon the additional or different terms, then the said expression is considered a
counter- offer. On the other hand, additional terms that are material in nature are considered as
proposals for additions. Moreover, the courts primarily apply the “knock out rule” to
differentiating terms by eliminating contradicting terms from the contract.

The CISG adopts an approach stemming from the “mirror image rule”; as a rule, if an expression
consists of additional or differing terms, it is considered a counter- offer. However, if additional
or differing terms are not material in nature, this will be construed as an acceptance, unless the
offeror objects to it. Examples of material alterations have been set forth as a non- exhaustive list
under CISG Art. 19(3). This non- exhaustive list is rebuttable.

In practice, a matter addressed under the battle of forms provisions is the inclusion of standard
terms and conditions. It should be noted that the formation of contract provisions of the CISG may
be applicable to determine whether a contract has been formed, even if the standard terms and
conditions exclude the CISG. See case law: Turfworthy, LLC v. Dr. Karl Wetekam & Co. KG
(2014). For more on the inclusion of standard terms and conditions see CISG Advisory Council
Opinion No: 13.

See U.S. CISG case law on battle of forms: Hanwha Corporation v. Cedar Petrochemicals, Inc.
(2011); Roser Technologies v. Carl Schreiber GmbH (2013);
Allied Dynamics Corp. v. Kennametal, Inc. (2014).

UCC CISG

§ 2-207 Article 19
(1) A definite and seasonable expression of (1) A reply to an offer which purports to be an
acceptance or a written confirmation which is acceptance but contains additions, limitations
sent within a reasonable time operates as an or other modifications is a rejection of the offer
acceptance even though it states terms and constitutes a counter-offer.
additional to or different from those offered or
agreed upon, unless acceptance is expressly (2) However, a reply to an offer which purports
made conditional on assent to the additional or to be an acceptance but contains additional or
different terms. different terms which do not materially alter
the terms of the offer constitutes an
acceptance, unless the offeror, without undue
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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 (2) The additional terms are to be construed as delay, objects orally to the discrepancy or
proposals for addition to the contract. Between dispatches a notice to that effect. If he does not
merchants terms become part of the contract so object, the terms of the contract are the
unless: terms of the offer with the modifications
contained in the acceptance.
• (a) the offer expressly limits
acceptance to the terms of the offer; (3) Additional or different terms relating,
• (b) they materially alter it; or among other things, to the price, payment,
• (c) notification of objection to them quality and quantity of the goods, place and
has already been given or is given time of delivery, extent of one party's liability
within a reasonable time after notice to the other or the settlement of disputes are
of them is received. considered to alter the terms of the offer
materially.

VI. BREACH OF CONTRACT

The UCC adopts the “perfect tender” rule; the buyer is entitled to remedies if the goods are not in
conformity with the contract. The non- conformity does not need to be material in nature. On the
other hand, the CISG adopts the concept of fundamental breach; if one of the parties commits a
fundamental breach, the other party is entitled to remedies arising from the breach of contract.
Fundamental breach has been defined as a breach that “results in such detriment to the other party
as substantially to deprive him of what he is entitled to expect”. Moreover, there is a
“foreseeability” test; the breaching party is not liable if the results of the breach were not
foreseeable.

Fundamental breach is determined on a case-by-case basis, some examples are serious defects in
the goods, late delivery when “time is of essence” and payment of a small fraction of the purchase
price. An example of a recent CISG case discussing fundamental breach: Hefei Ziking Steel Pipe
Co. v. Meever & Meever & Meever United States et al. (2021)

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 UCC CISG

§ 2-601 Article 25
Subject to the provisions of this Article on A breach of contract committed by one of the
breach in installment contracts (Section 2-612) parties is fundamental if it results in such
and unless otherwise agreed under the sections detriment to the other party as substantially to
on contractual limitations of remedy deprive him of what he is entitled to expect
(Sections 2-718 and 2-719), if the goods or the under the contract, unless the party in breach
tender of delivery fail in any respect to did not foresee and a reasonable person of the
conform to the contract, the buyer may same kind in the same circumstances would
not have foreseen such a result.
• (a) reject the whole; or
• (b) accept the whole; or
• (c) accept any commercial unit or units
and reject the rest.

VII. REMEDIES

A. SPECIFIC PERFORMANCE

Specific performance is not a preferred type of remedy under traditional U.S. contract law. Parties
will not- by default- resort to specific performance as a remedy, the appropriate remedy- by default-
is monetary compensation. The UCC also adopts this approach; parties will seek specific
performance only when the goods are “unique” or the specific circumstances require so.

Unlike the UCC, specific performance is not considered a secondary remedy under the CISG. The
aggrieved party may, in principle, resort to specific performance, even if monetary compensation
would have been adequate to remedy the breach. Example of a case whereby the buyer sought
specific performance: Saint Tropez Inc. v. Ningbo Maywood Industry and Trade Co., Ltd. et al.
(2014)

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 UCC CISG

§2-716 Article 46

(A) Specific performance may be decreed (1) The buyer may require performance by the
where the goods are unique or in other proper seller of his obligations unless the buyer has
circumstances. resorted to a remedy which is inconsistent with
this requirement.

B. DAMAGES
The UCC and CISG damages provisions are similar in essence. However, the terminology used is
different. While the UCC categorizes damages as incidental and consequential damages; the CISG
focuses on the concept of “foreseeability” to recover damages. See for example: Delchi Carrier,
S.p.A. v. Rotorex Corp. (1995).

The CISG does not govern punitive damages or liquidated damages. Penalty clauses, such as
liquidated damages do not fall within the scope of the CISG, as it is a matter concerning the validity
of a contract (CISG Art. 4). See for example:
Guangxi Nanning Baiyang Food Co. Ltd. v. Long River International, Inc. (2010).

Although parties are entitled to interest under the CISG (CISG Art. 78), the interest rate is that of
the law of the forum; see for example, Guang Dong Light Headgear Factory Co., Ltd. v. ACI
International, Inc. (2008)

Another noteworthy matter is that U.S. courts have ruled that attorney fees are not recoverable as
damages under CISG Art. 74, the law of the forum is applicable to determine whether a party is
entitled to recover attorney fees. See case law on attorney fees: Zapata Hermanos Sucesores, S.A.
v. Hearthside Baking Company (2002) and Granjas Aquanova S.A. de C.V. v. House Mfg. Co
(2010).

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 UCC CISG

§ 2-715 Article 74
(1) Incidental damages resulting from theDamages for breach of contract by one party
seller’s breach include expenses reasonably
consist of a sum equal to the loss, including
incurred in inspection, receipt, transportation
loss of profit, suffered by the other party as a
and care and custody of goods rightfully consequence of the breach. Such damages may
rejected, any commercially reasonable not exceed the loss which the party in breach
charges, expenses or commissions in foresaw or ought to have foreseen at the time
connection with effecting cover and any other
of the conclusion of the contract, in the light of
reasonable expense incident to the delay or
the facts and matters of which he then knew or
other breach. ought to have known, as a possible
(2) Consequential damages resulting from consequence of the breach of contract.
the seller's breach include

• (a) any loss resulting from general or

particular requirements and needs of
which the seller at the time of
contracting had reason to know and
which could not reasonably be
prevented by cover or otherwise; and
• (b) injury to person or property
proximately resulting from any breach
of warranty.

C. ADDITIONAL REMEDIES UNDER CISG

The CISG consists of remedies that are not typical under U.S. law and the UCC: Unilateral price
reduction and nachfrist rule.

The buyer has a unilateral right to reduce the contract price in case of non- conformity (CISG Art.
50). Case law distinguishing CISG Art. 50 from UCC’s set- off:
Maxxsonics USA, Inc., v. Fengshun Peiying Electro Acoustic Company, Ltd. (2012)

Another remedy foreign to UCC is Nachfrist; the aggrieved party is entitled to grant the other party
additional time for performance. During this additional period, the aggrieved party may not resort
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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
to breach of contract remedies- other than damages arising from delay in performance. However,
if the other party does not perform within the additional period, the aggrieved party is entitled to
avoidance, even if the breach would not have otherwise amounted to a material breach, and as
such, avoidance would not have had been an available remedy. (CISG Arts. 47, 49, 63, 64).

UCC CISG
- Price Reduction (CISG Art. 50)
Nachfrist rule (CISG Arts. 47, 49, 63, 64)

Article 50

If the goods do not conform with the contract

and whether or not the price has already been
paid, the buyer may reduce the price in the
same proportion as the value that the goods
actually delivered had at the time of the
delivery bears to the value that conforming
goods would have had at that time. However,
if the seller remedies any failure to perform his
obligations in accordance with article 37 or
article 48 or if the buyer refuses to accept
performance by the seller in accordance with
those articles, the buyer may not reduce the
price.

Article 47

(1) The buyer may fix an additional

period of time of reasonable length for
performance by the seller of his
obligations.
172

(2) Unless the buyer has received notice

from the seller that he will not perform
within the period so fixed, the buyer may
not, during that period, resort to any
remedy for breach of contract. However,
the buyer is not deprived thereby of any
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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 right he may have to claim damages for
delay in performance.

IIX. WARRANTIES

The UCC and CISG both presume that the seller must tender the goods in conformity with the
contract. Although these provisions are in essence parallel, the terminology used is different. The
UCC covers conformity of goods under the theory of warranties. The theory of warranties is typical
to U.S. contract law, it is rooted in traditional contract and tort law. The UCC provisions governing
conformity of goods reflect this tradition. Within this framework, modification or exclusion of
warranties is also regulated and special procedures for effectuating any modification or exclusion
has been set forth in the UCC.

The CISG does not adopt the theory of warranties, as such, there is no explicit warranty clause.
Nevertheless, the CISG has a clause governing the conformity of goods; although the term
“warranty” has not been expressly used, there is an implied warranty clause requiring goods to
conform with certain quality standards. However, under the CISG, there is no specific procedure
for exclusion or modification; parties may agree otherwise without a necessity to follow a specific
procedure, including any writing requirement.

It should be noted that U.S. parties frequently include the UCC language of warranties when
drafting contracts ultimately governed by the CISG. For a case discussing the CISG in relation to
warranties, see: U.S. Nonwovens Corp. v. Pack Line Corp. and Nuspark Engineering, Inc. (2015).

On another note, the matter of privity concerning warranties is covered in the UCC; the seller will
be liable towards third parties that are not a party to the sales contract, but nonetheless are
beneficiaries. However, the matter of extending rights, including warranties to third parties is not
governed by the CISG; as per CISG Art. 4, the CISG governs relations between the seller and
buyer only. See CISG case law on privity and pre-emption (or not) of state law: Caterpillar, Inc.

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and Caterpillar Mexico, S.A. v. Usinor Industeel, Usinor Industeel (U.S.A.), Inc. and Leeco Steel
Products, Inc. (2005).

UCC CISG

§ 2-314. Implied Warranty: Article 35

Merchantability; Usage of Trade (1) The seller must deliver goods which are of
the quantity, quality and description required
by the contract and which are contained or
Unless excluded or modified (Section 2-316), packaged in the manner required by the
a warranty that the goods shall be contract.
merchantable is implied in a contract for
their sale if the seller is a merchant with (2) Except where the parties have agreed
respect to goods of that kind. otherwise, the goods do not conform with
the contract unless they:
§ 2-315. Implied Warranty: Fitness for (a) are fit for the purposes for which
Particular Purpose. goods of the same description would
Where the seller at the time of contracting has ordinarily be used;
reason to know any particular purpose for
which the goods are required and that (b) are fit for any particular purpose
the buyer is relying on the seller's skill or expressly or impliedly made known to the
judgment to select or furnish suitable goods, seller at the time of the conclusion of the
there is unless excluded or modified under the contract, except where the circumstances
next section an implied warranty that the show that the buyer did not rely, or that it
goods shall be fit for such purpose.
was unreasonable for him to rely, on the
seller's skill and judgement.

§ 2-318. Third Party Beneficiaries of

Warranties Express or Implied. (c) possess the qualities of goods which
the seller has held out to the buyer as a
[ (States to select one alternative.)]
sample or model;
Alternative A
A seller’s warranty whether express or implied (d) are contained or packaged in the
extends to any natural person who is in the
manner usual for such goods or, where
family or household of his buyer or who is a
guest in his home if it is reasonable to expect there is no such manner, in a manner
that such person may use, consume or be adequate to preserve and protect the
affected by the goods and who is injured in goods.
person by breach of the warranty. A seller may

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 not exclude or limit the operation of this
section.
Alternative B
A seller’s warranty whether express or implied
extends to any natural person who may
reasonably be expected to use, consume or be
affected by the goods and who is injured in
person by breach of the warranty. A seller may
not exclude or limit the operation of this
section.
Alternative C
A seller’s warranty whether express or
implied extends to any person who may
reasonably be expected to use, consume or be
affected by the good sand who is injured by
breach of the warranty. A seller may not
exclude or limit the operation of this section
with respect to injury to the person of an
individual to whom the warranty extends.

IX. EXCUSE FROM PERFORMANCE (FORCE MAJEURE)

The UCC and CISG both have provisions excusing performance in extenuating circumstances.
However, in principle, change of economic circumstances/ market conditions on its own is not
considered as an extenuating circumstance.

A difference between the UCC and CISG is that the UCC allows only for the seller to excuse itself
from performance, while the CISG covers both the seller and the buyer. There is also a difference
with respect to damages. The UCC is more lenient, because when the seller is excused from
performance, the seller is relieved from all liability. On the other hand, as per the CISG, if the non-
performing party is excused, the non- performing party is not liable for monetary damages;
nevertheless, the non- performing party may still be subject to other remedies (CISG Art. 79(5)),
such as reduction of price or avoidance.

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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
Another difference to note is conceptual. The UCC adopts the approach of “impracticability”;
performance must be impracticable to be excused. On the other hand, as per the CISG, an
unforeseeable “impediment” is required to excuse a party from performance. Scholars have
suggested that grounds for excuse are broader under the UCC, as opposed to the CISG. In other
words, “impracticability” is a vague and encompassing concept as opposed to “impediment”.
However, in practice the difference does not seem to be apparent, because U.S. courts have
interpreted CISG Art. 79 in light of UCC cases stating that the provisions are analogous. For
example, see: Raw Materials Inc. v. Manfred Forberich GmbH & Co. (2004). Also see the
following case where the arbitral tribunal and court applied UCC § 2-614 to hold that the
impediment could have reasonably been avoided by substitute performance and therefore, thenon-
performing party was not excused because all the requirements of CISG Art. 79 had not been met:
Macromex Srl. v. Globex International (2008).

UCC CISG

§ 2-615 Article 79
Except so far as a seller may have assumed a (1) A party is not liable for a failure to perform
greater obligation and subject to the preceding any of his obligations if he proves that the
section on substituted performance: failure was due to an impediment beyond his
control and that he could not reasonably be
• (a) Delay in delivery or non-delivery in expected to have taken the impediment into
whole or in part by a seller who account at the time of the conclusion of the
complies with paragraphs (b) and (c) is contract or to have avoided or overcome it or
not a breach of his duty under its consequences.
a contract for sale if performance as
agreed has been made impracticable by (2) If the party's failure is due to the failure by
the occurrence of a contingency the a third person whom he has engaged to
non-occurrence of which was a basic perform the whole or a part of the contract, that
assumption on which the contract was party is exempt from liability only if:
made or by compliance in good faith
with any applicable foreign or (a) he is exempt under the preceding
domestic governmental regulation or paragraph; and
order whether or not it later proves to
be invalid. (b) the person whom he has so engaged would
• (b) Where the causes mentioned in be so exempt if the provisions of that
paragraph (a) affect only a part of paragraph were applied to him.
the seller's capacity to perform, he
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DR. GIZEM ALPER © IICL- Institute of International Commercial Law
 must allocate production and deliveries (3) The exemption provided by this article has
among his customers but may at his effect for the period during which the
option include regular customers not impediment exists.
then under contract as well as his own
requirements for further manufacture. (4) The party who fails to perform must give
He may so allocate in any manner notice to the other party of the impediment and
which is fair and reasonable. its effect on his ability to perform. If the notice
• (c) The seller must notify is not received by the other party within a
the buyer seasonably that there will be reasonable time after the party who fails to
delay or non-delivery and, when perform knew or ought to have known of the
allocation is required under paragraph impediment, he is liable for damages resulting
(b), of the estimated quota thus made from such non-receipt.
available for the buyer.
(5) Nothing in this article prevents either party
from exercising any right other than to claim
damages under this Convention.

X. COMMERCIAL TRADE TERMS (INCOTERMS)

The UCC defines commercial shipment and delivery terms such as F.O.B., F.A.S. and C.I.F.; while
the CISG does not have any provision defining such terms. As such, INCOTERMS ® is the source
of definitions for commercial delivery terms in international sales contracts. U.S. courts have held
that INCOTERMS ® has been incorporated into CISG as well- known international practice
(CISG Art. 9(2)). Thus, in international sales contracts, INCOTERMS ®, rather than UCC, is used
to interpret the meanings of commercial shipment and delivery terms. See case law: China North
Chemical Industries Corporation v. Beston Chemical Corporation (2006); BP International, Ltd.
and BP Exploration & Oil, Inc. v. Empresa Estatal Petroleos de Ecuador, et al.,Empresa Estatal
Petroleos de Ecuador and Saybolt, Inc. (2003)

UCC CISG

Examples: -

§ 2-319. F.O.B. and F.A.S. [see ICC INCOTERMS ®]

§ 2-320. C.I.F. and C.F.

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