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Evaluating the 1980 United Nations Convention on Contracts for the International Sale of

Goods (CISG): The Greatest Legislative Achievement in Harmonizing Private

International Commercial Law?

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Abstract

The United Nations Convention on Contracts for the International Sale of Goods (CISG),

1980, marks a milestone in attempting to harmonize international commercial law to bridge the

legal complexities occurring in international trade. This Convention has been adopted by over 90

countries, which unified the sales contract laws and thus increased predictability and decreased

transaction costs. In spite of such wide recognition, it suffers from criticism because of the

inconsistent interpretation and scope it holds. It does so by discussing the contribution of the

contract as such, hence comparing it with other legal regimes and giving an assessment of its

functionality in practice. Although a pioneer, it ranks as one of the very few foundational yet

incomplete tools for global commercial law harmonization.

Introduction

The 1980 United Nations Convention on Contracts for the International Sale of Goods

has always been considered one significant milestone in so far as the codification of international

commercial law is concerned. Adopted with the purpose of setting a single legal regime for the

international sale of goods, it is designed to exclude having any recourse to the national laws of

different countries that vary in their construction (Johnson, 2022). Because of these ratifications,

this convention has been ratified by more than 90 countries to show its importance as one of the

founding tools in performing business internationally. Its attractiveness can be traced back to

possibly reduced transaction costs and increased security of firms internationally. However, it is

not an absolute efficiency, and various criticisms have noted that there are some areas of review

that they feel the law does not have a homogenous implementation and application (Rossen et

al., 2020). This essay assesses the pros against the cons of the contracts for the international sale
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of goods, considering the present global trading environment to see whether or not they can

achieve the harmonization that their supporters have suggested.

History and the Purpose

The United Nations Commission on International Trade Law (UNCITRAL) validated the

contract by enacting international legislation and thereby creating a unified legal system that

overcomes the divergence of domestic laws in international business (Malkawi, 2020). The valid

date of the contract was January 1, 1988, and it relates to the sales of goods contract between two

commercial entities of the contracting states. It establishes a uniform international standard for

contract language. In this regard, it limits the legal risks associated with cross-border sales and,

as such, offers favorable conditions under which retailers and sellers can thrive successfully

(Malkawi, 2020). Because this Convention operates on the international plane, it differs from the

other commercial law instruments oriented toward globalization in that it has a framework

designed to meet the needs of international business. This salient focus on consistency and

simplicity has assisted in making the contract the most accepted instrument for the formation of

international sales contracts.

One of the primary purposes of the contract is to minimize the use of private international

law, also referred to as conflict of laws, in relation to qualifying sales contracts by providing a

stand-alone legal framework. In the past, cross-border transactions made parties work out

disputes regarding issues in the conflict of national laws, which would take a lot of time and

money. It offers a coherent set of rules that automatically govern contracts for the sale of goods

between affairs in member countries, eliminating most of these conflicts (Karibi-Botoye et al.,

2021). This consistency does not only help reduce the cost of doing international business but

also the legal risk. Essentially, it reduces the complexity of an offer and its acceptance, lessening
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the performance risks while making business deals more efficient. This uncomplicated paradigm

alleviates the flow of trade, which is testimony to the legal non-complexity of the contract.

It has been adopted in more than ninety countries, thus proving that it is widely accepted

as the prime model in governing international sales law. Today it regulates a large amount of

international commerce, which points to its practical and necessary character. Its vast coverage is

credited for enhancing its development, leading to the establishment of case laws and

interpretations that bolster its principles (Malkawi, 2020). Through the balanced approach when

it comes to what extent local laws are to be incorporated within the contract, the act promotes

international trade. Its continued acceptance demonstrates the effectiveness of a standard legal

tool that satisfies the demands of the international economy. The journey of contracts for the

international sale of goods for more than two and a half decades and their application across the

world reaffirms their importance in facilitating international commercial law.

Successes in Harmonizing Commercial Law

Uniformity and predictability

It has done its most marvelous work by providing general principles of the formation of

contracts, duties of the buyer as well as the seller, and remedies for breach of contract. This

predictability reduces risk and allows for contingency planning, leading to less reliance on

complex domestic laws as well as fewer challenges to jurisdiction (Gojani & Curri, 2021). It has

also played a major role in providing a standard code of conduct in areas such as acceptance,

delivery, and conformity of goods that has enabled international businesses to enter into

contracts and enforce them with greater confidence.

Widespread across different systems of law

Another advantage of the contract is that it has attempted to create balance between civil

and common law systems. The provisions combine parts of both systems; thus, it remains

applicable in many jurisdictions to the greatest extent. For example, it employs the civil law’s

adaptation of positive faith (Article 7) with certain features of the common law systems’ contract

interpretation, making it global (Malkawi, 2021). This has contributed to the development of a

unified body of case law and practice, thereby enhancing the legitimacy of the contract as a

further harmonization tool.

Freedom and Choice by the Parties to a Contract

Article 6 of the contract strengthens it by stating that the parties to a contract are free to

decline or vary one or more provisions of the Convention (Malkawi, 2020). This flexibility

contributes to the autonomy of the contracting parties and enhances their use by allowing them to

adapt in a way that is most appropriate for the contract. While the contract permits contracting

parties to provide for alterations or exclusion of certain provisions, it also achieves a certain level

of uniformity while respecting businesses' desire for contractual freedom.

Development of Case Law and Precedents

It has been effective in establishing the corpus of the international case law in contract;

the national courts and the international arbitration panels have all referred to or applied the

contract. It has become rich with precedents, thus increasing the value of the contract and

improving its usefulness in practice (Malkawi, 2020). Other databases involving case law include

the Contracts for the International Sale of Goods Database from Pace Law School as well as

Unilex, which boasts of large databases of case laws (Tsorme, 2021). This has made it simpler

for legal practitioners to comprehend and also understand how the principles of the convention
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apply in relation to the contract, making it easier to support the general aim of harmonizing the

commercial law.

Challenges and limitations

Reservations and Opt-Outs

One of the flexibilities of the contract is its ability to allow parties to opt out of its

application under Article 6; these provisions often lead to parties excluding the contract. In the

present world, businesses therefore prefer arbitration or their local laws because they find certain

international rules to be inconsistent or because they are acquainted with national laws (Malkawi,

2020). Further, certain country reserves under Article 92 (e.g., the Nordic countries except Part II

concerning the formation of the contract) or Article 95 enable them to deny some of the

provisions, resulting in piecemeal implementation that hinders the idea of uniformity.

Divergent Interpretations

Despite its success in establishing a consistent legal structure, the meaning of the

provisions of the Convention differs in different legal systems. Due to this, the same provisions

may be interpreted differently by different courts, mainly because the text of the contract may be

read through domestic legal systems, undermining the contract’s originality in uniformly

accommodating the diverse national systems (Karibi-Botoye et al., 2021). For instance, cases

dealing with interpretation of the fundamental breach under Article 25 and the extension and

application of excellent faith under Article 7 may yield different results. Scott has described such

inconsistencies as undermining the role of the contract as a truly uniform’ code and as presenting

difficulties in relation to its practical application by those who are in pursuit of more certain

outcomes.

Limitations in Scope
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Notwithstanding the fact that the contract formerly regulated almost all aspects of

international sales law, it is still silent on some important matters, such as the seller’s liability for

defects in the goods sold, protection of intellectual property rights, and references to arbitration

procedures. Therefore, the parties may require legal instruments outside the contract’s ambit, and

this takes the edge off the contract's intentions as being a stand-alone legal tool (Johnson, 2022).

Due to the absence of provisions concerning these points, it can be stated that some critics are

correct that the contract provides only partial harmonization because other legal tools have to be

used in this connection.

Comparison with Other International Instruments

Comparison with the Relevant Domestic and Regional Laws

Examining a contract's impact against domestic legislation like the U.S. Uniform

Commercial Code (UCC) and European Union (EU) commercial laws is more beneficial. Where

the Contracts for the International Sale of Goods were developed to give a single standard for

international contracts, the Uniform Commercial Code (UCC) has a similar effect in the United

States of America (Johnson, 2022). One of the big advantages of the contract is its supranational

nature; it unifies a rather heterogeneous group of countries into one system. Nonetheless, it lacks

the broader authority of a code like the Uniform Commercial Code (UCC), which embraces

many more types of commercial problems than does a patchwork of legislation. It’s important to

note here that the contract was put in place mainly for international trade as opposed to domestic

trade. Hence, though it brings in about reasonable parity, it appears to lack the scope and

comprehensiveness compared to some regional laws.

Impact on Other Conventions and Model Laws

Subsequent to the contract, other significant legal systems have been born, including the

International Institute for the Unification of Private Law (UNIDROIT) and the Principles of

European Contract Law (PECL) (Rossen et al., 2020). These principles are not obligatory, but

they still contribute to the development of rules governing international contract law. They are

often called the means of interpretation, especially when one or another provision of the contract

needs to be explained. This indirect influence points to the fact that the contract is the key

component of the project of legal integration on the international plane. To that extent, the

contract has demonstrated a positive influence in developing equally well-coordinated

international commercial practices. It therefore has gone beyond the provisions provided for

under this act to shape other commercial law-related developments.

Counterarguments and critiques

Views of Critics

Some scholars argue that the contract fails to achieve its goal of producing consistent and

predictable results under various legal systems, based on these and related ideas. Critics of the

Convention have complained of loose implementation of the treaty by state parties due to absent

authoritative modes of interpretation or an overall court of appeal (Rossen et al., 2020). This

variation is normally a result of a clash of national legal systems, and this destroys the objectives

of the contract of establishing a unified common law. Critics argue that while the contract

promotes equality in international sales law, its practicality is undermined by the lack of a central

authority (Rossen et al., 2020). Some of them propose the creation of a global interpretative

committee to increase the role of the Convention. All these critics continue to emphasize that the

issue of global interpretation remains problematic when it comes to maintaining applicability

consistency.
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Real-world application issues

In practice, respondent concerns influence the contract in various ways, particularly in

well-established commercial jurisdictions. Most firms would rather use the home law or

arbitration rather than the contract provisions because the former is familiar and considered more

reliable (Rossen et al., 2020). That said, this preference reveals a drawback because the contract

may be deemed too dogmatic or too vague where it matters. The absence of coverage for some

concerns, like liability for defects or intellectual property, means that companies resort to other

laws than the contract. As a result, in practice, it takes a more subordinate position, and its

significance declines in some instances. Thus, it is possible to state that its practical application

is not fully consistent with theoretical tasks.

Conclusion

To measure whether or not contracts for the international sale of goods are really the

“greatest legislative achievement” in providing harmony in conflicts of contract law, it is

necessary to consider their strengths and weaknesses. It is evident that the contract has achieved

its goals of providing a globally accepted standard that is simple to use, reducing reference to

conflict of laws, and providing certainty. However, the below interpretations reflect on its small

coverage area and the above-stated inconsistent interpretations, all of which underscore the fact

that although the contract is a congress of legislative achievement, the exact solution to the

challenges of international commercial law is still far from perfect. It has contributed a lot

toward the achievement of its goals, though it is hard to quantify them as being the best. Though

future progress may be complemented by other single conventions or treaties that supersede the

present one, the principle and structure of the Convention remain as a solid footing for any future

further development of international commercial law. The role of the Convention in the process
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of the common development and harmonization of the legal systems of the participating

countries cannot be overestimated.

References

Gojani, S., & Curri, G. (2021). Contract for international sale of goods-CISG its importance and

applicability. Technium Soc. Sci. J., 21, 527. https://heinonline.org/HOL/LandingPage?

handle=hein.journals/techssj21&div=49&id=&page=

Johnson, W. P. (2022). Disclaiming Warranties That Were Never Implied: The Irrelevance of

UCC Section 2-316 for Article 35 of the CISG. Sw. J. Int'l L., 28, 685. https://cisg-

online.org/files/commentFiles/Johnson_28_SwJIntlL_2022_685.pdf

Karibi-Botoye, N., Enwukwe, N. E., & Timothy, B. B. (2021, February 6). The Passing of Risk

in the International Sale of Goods: An Appraisal of the United Nations Convention on

Contracts for the International Sale of Goods (CISG). Papers.ssrn.com.

https://ssrn.com/abstract=3851515

Malkawi, B. H. (2020). CISG: The Relation among Cure, Fundamental Breach, and Avoidance.

Journal of Law, Policy and Globalization. https://doi.org/10.7176/jlpg/93-03

Rossen, A., Pedersen, M. H., & Neumann, T. (2020). How far does the dynamic doctrine go?

Looking for the basis of precontractual liability in the CISG. NJCL, 1.

https://heinonline.org/HOL/LandingPage?handle=hein.journals/njcl2020&div=3&id=&p

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Tsorme, R. M. (2021). Ratification of the CISG: A Way Forward to Ensure Success of the

African Continental Free Trade Area (AfCFTA). Journal of Law, Policy and

Globalization. https://doi.org/10.7176/jlpg/107-01