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Key points of the United Nations Convention on Contracts for the International Sales of Goods and Services

The international sale and purchase of goods is a constant and complex operation. in today's world. The United Nations articulated efforts to bring to life a convention between States that would build a modern, uniform and equitable system with the capacity to legally support sales contracts in order to reduce the costs and expenses related to them.

The United Nations Commission on International Trade Lawcreated by the General Assembly of the United Nations, considers that ".the contract of sale is the basis of international trade in all countries, regardless of their legal tradition or economic development."For this reason, they allege that the United Nations Sales Convention ".is one of the key instruments of international trade, which should be adopted by all countries.". 

In the article 40 years of the Vienna Convention on Contracts for the International Sale of Goods (CISG)l, the lawyer, arbitrator and professor of Maritime Law, José Antonio Pejovés, estimated that international purchases and sales with incidence of maritime transport correspond to 80% of the transactions of the international commercial activity. The text was published in the web portal Mundo Marítimo.

The United Nations Convention on Contracts for the International Sale of GoodsThe Convention was signed in Vienna on April 11, 1980, in an attempt to regulate these booming activities. Its text entered into force eight years later, in January 1988. It brings together the interests of the buyer and seller, with the intention of encouraging agreement and respect for fundamental principles during a transaction of this nature.

It had its origins in 1930 in Rome within the International Institute for the Unification of Private Law.. However, the Second World War dispersed the efforts and it was in 1964 when the proposal was presented at a diplomatic conference held in The Hague. The first eleven member countries were: Argentina, China, Egypt, France, Hungary, Italy, Lesotho, Syria, United States, Yugoslavia and Zambia.

One of the major benefits of this instrumentThe Commission of the United Nations United Nations The main feature of the Convention for International Trade Law is its direct application to the countries that have signed the Convention, without the need for the intervention of the rules of private international law. This particularity offers certainty and predictability to contracts of this type.

In fact, as the Commission has stated "The Convention provides for a set of neutral rules that can be easily accepted given its transnational nature and the existence of abundant interpretative material.".

Currently, the convention has been ratified by 94 countries worldwide. Venezuela was not part of this list, since it is only a signatory. It is for this reason that this legal mechanism has not entered into force in the national territory.

General Provisions of the International Sales Convention

The following are the keys to understanding this international legal instrument:

  • The Secretary-General of the United Nations is the depositary of the convention.
  • The Convention shall not prevail over any international agreement already concluded or to be concluded, which contains provisions relating to the matters governed by the instrument, provided that the parties maintain their agreements in States Parties.
  • States that are not parties to the Convention may accede to it as of the date it is established.
  • The text is subject to ratification, acceptance and approval by the signatory States. Instruments of ratification, acceptance, approval and accession shall be the responsibility of the Secretary-General of the United Nations.
  • The Convention was prepared by the United Nations Commission on International Trade Law.
  • The Convention defines sale and purchase as contracts for the supply of goods to be manufactured or produced, unless the party ordering them assumes the obligation to provide a substantial part of the materials necessary for such manufacture or production.
  • It governs contracts for the international sale of goods between private companies, with the exception of sales to consumers and sales of services, as well as sales of specific types of goods.
  • It applies to contracts for the sale of goods concluded between parties whose places of business are in different Contracting States or where under the rules of private international law the law of a particular Contracting State is to be applied.
  • The Convention does not apply to the sale of goods purchased for personal, family or household use, unless the seller, before concluding the contract, had no knowledge of the use of the goods purchased; nor in auctions; nor in court; nor of securities, titles or trade bills and money; nor of ships, boats and aircraft; nor of electricity.
  • It regulates the formation of the contract, the obligations and rights of sellers and buyers, the transfer of risk, breach of contract.
  • The accession of a party to the Convention has no financial implications for the Contracting States. In addition, no specific body is required for its administration at the national level and no reporting obligations are imposed.

At Alan Aldana & Abogados we have specialists in Commercial Law and in general in the corporate area, to clarify any concerns our clients may have regarding the application of the aforementioned Convention as an international legal instrument.

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