Contracts for the International Sale of Goods - Essay Example

? “Contracts for the International Sale of Goods” United Nations Convention on Contracts for the International Sale of Goods (CISG) and the United Kingdom. The United Nations Convention on Contracts for the International Sale of Goods (CISG) is also called the Vienna Convention. This convention is to ensure that there is uniform sales law in countries. Seventy seven countries till 2010 have signed up for it and they hold a large portion of the trade in the world. This implies that it is a success worldwide in unifying sales laws. Benin also ratified to this convention, however, there are many states that still are not part of this Contract. CISG gives exporters the ‘choice of law’ avoidance of issues. There are many rules and clauses that are in CISG that exporters can rely on. Conflict of law means that the litigation case leads to conflict in laws between different jurisdiction bodies and the outcome is to use the courts of one area to enforce the law. The United Nations Commission on International Trade Law (UNICITRAL) developed this law and it was initiated in 1980. It became a multilateral treaty and it continuously accepted by many states. Countries that do ratify to this Convention are known as ‘contracting states’ and it is usually part of the law of the state or within the laws unless otherwise specified and it lies between the transaction of goods among different states under the contract or contracting states. Therefore it also facilitates trade. (Schlechtriem, 1998) A few countries that have ratified to the Convention are Argentina, Albania, Australia, Belgium, Canada, China, Colombia, Denmark, Egypt, France, Greece, Japan, Mexico, Singapore, Turkey and USA etc. However, a few countries do not follow the Convention to the book and have certain restrictions towards it. The Nordic region countries do not allow the application of part II of the clause to be applied all over, unless the contract of the transaction made is pointed out. In place of this, Nordic council applies the local law which leads to some differences from the Convention. CISG according to part II would allow the seller to withdraw the offer but before the buyer has accepted it. However, the Nordic council believes that a period of time should be given to the buyer to make a decision when an offer is made. This is a reservation of clause 94 of part II of the Contract. (Will, 1996) The major states that are absent from this Contract are India, Taiwan, Brazil, Hong Kong, South Africa as well as United Kingdom. They have not ratified to the contract. Japan made a depository and entered the Convention by 2009. However UK is still absent from the Convention because its government doesn’t view entering into this Contract as a priority for the state and the businesses have also not given support for this ratification as well. There is also a large amount of opposition from a number of organizations in UK, as well as scarce resources for the public, and a fear that London would lose out on its edge in the world with regards to litigation and arbitration. (Huber & Mullis, 2007) Why exactly does UK not want to be under this contract? The reason is that the Ministers do not feel that it is the priority of the legislation. The Government has many other issues to deal with and this Convention would just need to stand in line and wait its attention. The parliament meeting covers issues relating to the legislation of employment, energy, civil partnerships and company law, which are considered to be more important issues as compared to the issue of exporters. The country itself doesn’t seem interested in ratifying the Convention. There have been instances when the Ministers have circulated letters asking for ratification and why UK has not adhered to it. The lack of Convention isn’t having an impact on the economy of UK and so the people haven’t considered this issue important enough to respond to. Business is working smoothly and isn’t suffering so there doesn’t seem a need to ratify. When the Parliament allows this action, then UK will ratify, but currently UK doesn’t feel that it needs to raise this issue again and again. Secondly, there have not just been letters but formal procedures to ask whether the Convention should be ratified. None of them have shown such strong results. 1500 documents were sent out in 1989, and only 55 of them received a response and that too with 10 people who were neutral, 17 people who were against it and 28 people were in favor of it. In 1997, the response was even smaller but documents issues were also less. This doesn’t give a sense of urgency to pass this motion. However, it is an uncontroversial subject and technical as well, so people may or may not respond, not because they are in favor or against the issue. However, it wasn’t just the people of UK; some large organizations with power in the UK were not in favor of ratification. Shell, ICI etc. were not in favor in 1989 and in 1997 they were different organizations but of equal importance. However, there were some in favor of the process as well. These included British Airways and British Telecom but even those who seemed to be for the process in 1989 had changed their opinion in 1997. This was one other reason that further accentuated the Minister’s opinion of not considering this as an important topic. But there was some movement towards this Convention in 1997 when the Ministers gave approval to UK to move towards performance and even a draft bill was drawn up. It wasn’t to be a Government Bill but a Private Member’s Bill which meant that it was introduced by a peer or any member of the parliament who is interested in the topic. The peer who introduced the bill became ill and the issue was stopped and it remained in that stagnant position because there were also scarce resources in the department. The structure changed in 2004 and the procedure was looked at closely again. The Parliament was busy at that time and there was little chance of getting noticed if the main legislation route was undertaken. Alternative methods were still viewed and the primary route as well as the Convention was disregarded. An alternative that was discussed was the RRO, which was the Regulatory Reform Order, which focuses on the problem to either be resolved or be reduced. And the qualification of the CISG in UK would not remove nor reduce the burdens that are under the RRO. This would also only be applicable to Wales and England which would leave UK with the further decision of how to enable implementation in Northern Ireland and Scotland. RRO was therefore not the ideal path for UK and therefore they even considered primary legislation. A consultation was conducted in order to collect information and that too in an informal manner. Meetings were held, one for the people of the business society and another one for the academic people and arbitrators. Arguments against the Convention were that the society wasn’t broken, so there was no need to fix it. It would also be a good aspect for the lawyers in UK but not a good deal for their clients. The number of problems and fights would increase if the Convention were to be implemented. The fear was also that London would not be able to maintain its competitive edge in the litigation and arbitration were this Convention to be implemented. The academics however, were in favor of the Convention; they believed that if the Convention was not ratified, it would actually harm London than help maintain a competitive edge over other states. Politically, the ratification seemed sound to them because the negative view about UK would be countered because over the years it had built this image that it was not willing to take part in international initiatives in trade law Thirdly, the academics believed that UK companies cannot completely falsify the Convention and its existence even if they don’t adhere to its principles. Trade between two states would lead to problems if one state was adhering to the Convention and would ask for UK to apply the principles of the Convention while trading as well. However, these meetings seemed to be unrepresentative of the view of the entire economy and thus the outcomes weren’t given the importance they should have and ceased to have their use. Further consultation is needed to improve the importance of the Convention in the Ministry and more information and better results would lead to getting it implemented. This document however, will have to show that the application will lead to benefits for the UK in terms of economy being strong and robust. Small business should also not be negatively affected by its implementation in the long run. Overall, it should make international trading easier for the UK. The differences in the Convention and UK’s law need to be identified as well in order to make sure that once the Convention has been put in place, it would actually work out in practice as well. The target market for this consultation would allow people and businessmen to consider the impact of this convention on their own businesses and the questions asked are clear. The community should also want to allow the ratification and their say is extremely important for UK because they will be the ones who will support the cause and lobby to the government to get it approved and the bill passed. The business has the responsibility to get these consultations, whether it be formal or informal and they need to make the government realize the importance of the Convention if they deem it important because they government will not take any action on its own. (DiMatteo & al, 2005) What if UK were to accept the ratification of the Convention? Many businessmen have rejected the idea of applying the CESL law or the Common European Sales Law in their business to business contracts and they believe that their business would actually benefit from the CISG which is an opinion that is worth observing and taking into account. 78 states are a part of the CISG in 2012 and many of these include many partners that UK trades with. Even within EU, only a few states like Ireland, Portugal, Malta and UK are not part of the Convention. Croatia is also a part and so once it comes in the EU it will further increase the CISG states within the EU. It is not normal that a major trading state like UK is not a part of CISG and there seems to be no rational thinking behind this decision to not ratify. It seems that the parliament doesn’t have the time to implement it and not does it have any proper information that UK needs the ratification. Sally Moss and other ministers are also not interested or driven to ratify this convention which is why it is still stuck. CISG would also actually improve the situation of businesses against the CESL especially. This is because CESL doesn’t have enough evidence for business markets and contracts as compared to CISG. CESL allows businesses to surpass protection laws about protection of consumers don’t apply in a business to business environment. Majority of businesses in Europe have similar and homogenous sales laws and this is also their global law, and therefore it is already in the form for CISG. However not all states are part of the EU and not all states in the EU are part of the CISG and therefore this remains an argument because if the rest of the states such as Ireland were to ratify to this Convention, then the problem of trade between these states could be explained better by the CISG and not the CESL. CESL is also applicable to B2B markets because it would have the backbone which would lead to easier implementation in the UK as well as amending it as well as the fact that it can be monitored closely and it can be viewed regularly as well; that is a check can be kept upon it. It is also flexible and can be adapted to the needs of customers in the changing marketplace. It can have a wider coverage than CISG and its language and terminology would be better understood and would fit right into the framework of European law. However, it would be a burden on those people who are selling goods online and two laws would have to be established in this case. These would be the laws that are applicable on both the consumer as a customer and a customer as a person who runs a small business of his own. And online, it is difficult to establish who is what kind of customer. One price exists; one type of good and one charge for delivering the goods or services. Even the dates would be the same for the two and this doesn’t make sense to divide the two by two separate laws by virtue of the aforementioned points because the objective of the government is to boost business, not stop their way. A government which supports CISG would be seen as a government that allows its state to develop to its fullest and is flexible. (Lookofsky & Bernstein, 2008) There are many points in favor of and against CISG; however, implementing it seems to be the better option. References DiMatteo, L. A. & al, e., 2005. International sales law : an analysis of CISG jurisprudence. s.l.:Cambridge University Press. Huber, P. & Mullis, A., 2007. The CISG : a new textbook for students and practitioners. s.l.:s.n. Lookofsky, J. M. & Bernstein, H., 2008. Understanding the CISG : a compact guide to the 1980 United Nations Convention on Contracts for International Sale of Goods. s.l.:s.n. Schlechtriem, P., 1998. Commentary on the UN Convention on the International Sale of Goods (CISG). s.l.:Oxford University Press. Will, M. R., 1996. International sales law under CISG : the UN Convention on Contracts for the International Sale of Goods (1980) : the first 284 or so decisions. s.l.:s.n. Read More