Contracts for the International Sale of Goods 1980 (CISG)

Commercial and trading activities have formed human’s development and our current world. Long time ago, commercial and trading activities between nations established markets, economies, currencies, maritime, financial market and the most important thing, jurisdiction. International commerce, nowadays, should be performed on a fair and unified ground for all parties. International treaties have been signed in order to minimize differences in legal thinking, support commercial activities as well as in a globalization world and one of them is CISG 1980.

Contracts for the International Sale of Goods is often called as CISG 1980. Until the end of 2015, there are 84 nations and territories which have been signed and become its members, including Vietnam. On 1^st January 2017, CISG 1980 took official effects in Vietnam and directly affect international commercial activities between Vietnamese traders and their partners from other countries. Viet An Law Firm collects and provides our Clients some basic information related to CISG 1980 as follows:

Governing scope: This convention applies to contracts for sale of goods between parties whose places of business are in different States:

• When the States are Contracting States; or
• When the rules of private international law lead to the application of the law of a Contracting State.

Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.

However, some sort of international commercial contracts are not in the governing scope of CISG 1980:

• of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use;
• by auction;
• on execution or otherwise by authority of law;
• of stocks, shares, investment securities, negotiable instruments or money;
• of ships, vessels, hovercraft or aircraft;
• of electricity.

Besides that, this Convention shall not apply to contracts for the supply of goods to be manufactured or produced in which the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production.

This Convention only governs the two following things:

• The formation of the contract of sale;
• The rights and obligations of the seller and the buyer arising from such a contract.

This Convention does not govern: The validity of the contract or of any of its provisions or of any usage; the effect which the contract may have on the property in the goods sold.

This Convention contains no bound on formality of contracts. In accordance with Article 11: “A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses”. Article 29 also allows parties to modify or terminate the contract in writing or in other forms. However, Article 12 of this Convention allows its members to declare that Article 11 shall not apply. Vietnam has declared to be free from Article 11 and Article 29. Therefore, when contracting under this Convention, parties should refer to regulations of national jurisdiction.

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If you are looking for legal advice about enterprises and investment in Vietnam, please feel free to contact Viet An Law Firm for more information!