The Cisg: When Does It Apply?

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a multilateral treaty that establishes a uniform framework for international commerce. It is a self-executing multilateral treaty between the United States and other signatories and is binding by default upon private international contracts for the sale of goods between parties whose places of business are in different states, when the states are contracting states. The CISG facilitates international trade by removing legal barriers among state parties and providing uniform rules that govern most aspects of a commercial transaction, such as contract formation, the means of delivery, parties' obligations, and remedies for breach of contract.

The CISG is considered one of the greatest achievements of the United Nations Commission on International Trade Law (UNCITRAL) and is the most successful international document in unified international sales law. As of 2023, it has been ratified by 97 countries, representing two-thirds of world trade.

The CISG is automatically incorporated into the domestic laws of contracting states and applies directly to a transaction of goods between their nationals, unless expressly excluded by the contract. Parties to a contract may exclude or vary the application of the CISG.

The CISG does not govern all aspects of sales contracts subject to its application. Matters listed in its Article 4 must be filled in by the applicable national law under due consideration of the conflict of law rules applicable at the place of jurisdiction.

The CISG does not require that a sales contract be reduced to a writing. Under the CISG, oral contracts of sale not evidenced by a document or combination of documents are enforceable.

A choice of the law of a CISG Contracting State includes the choice of the CISG. However, a choice of the law of a U.S. state, for example, could be understood as selecting the domestic sales law of the chosen state, such as New York's Uniform Commercial Code (UCC), and excluding the CISG.

The CISG may apply without a written contract. For unwritten contracts, if parties to a contract of sale do not put it in writing, the CISG will apply; however, under the CISG, a contract may fail for indefiniteness if the price is not stated or cannot be determined.

To exclude the CISG, the following clause is typically included in the governing law clause: The provisions of the United Nations Convention on the International Sale of Goods shall not apply to this Agreement.

The CISG applies to contracts of the sale of goods between parties whose places of business are in different states, when the states are contracting states

The CISG applies to contracts for the sale of goods between parties whose places of business are in different states, when the states are contracting states. This is the most common way for the CISG to apply.

The CISG is a multilateral treaty that establishes a uniform framework for international commerce. It is considered one of the greatest achievements of the United Nations Commission on International Trade Law (UNCITRAL) and is the "most successful international document" in unified international sales law. The CISG facilitates international trade by removing legal barriers among state parties (known as "Contracting States") and providing uniform rules that govern most aspects of a commercial transaction, such as contract formation, the means of delivery, parties' obligations, and remedies for breach of contract.

The CISG is intended to apply to commercial goods and products only. With some limited exceptions, it does not apply to personal, family, or household goods, nor does it apply to auctions, ships, aircraft, or intangibles and services. Importantly, parties to a contract may exclude or vary the application of the CISG.

The CISG is a self-executing multilateral treaty between the United States and other signatories and is, therefore, binding by default upon private international "contracts for the sale of goods between parties whose places of business are in different states... when the states are contracting states. The CISG forms part of the legal order of the contracting states and is the substantive law for international sales contracts.

A choice of the law of a CISG contracting state includes the choice of the CISG. The parties to a contract may agree to apply a signatory's domestic law but only by affirmatively opting out of the CISG. Therefore, a choice-of-law provision, to be effective, must not only select the law that will apply but also affirmatively state that the CISG will not apply to the contract.

The CISG may apply to contracts between domestic corporations if their relevant places of business are in different contracting states. The CISG does not apply to contracts to provide services alone. Generally, it does not apply to sales of goods bought for personal, family, or household use. For example, it would not typically apply to the sale of a camera or clothing to a foreign tourist. It does not apply to sales of ships, vessels, or aircraft or to contracts covering the sale of electricity.

The CISG will apply automatically to transactions with foreign buyers or suppliers of raw materials, commodities, and manufactured goods unless the contract says that the CISG will not apply or the parties otherwise indicate.

The CISG does not require that a sales contract be reduced to a writing. Under the CISG, oral contracts of sale not evidenced by a document or combination of documents are enforceable.

The CISG also applies if the parties are situated in different countries and the conflict of law rules lead to the application of the law of a contracting state

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a multilateral treaty that establishes a uniform framework for international commerce. It applies to contracts of the sale of goods between parties whose places of business are in different states, when the states are contracting states.

The CISG also applies if the parties are situated in different countries (which need not be contracting states) and the conflict of law rules lead to the application of the law of a contracting state. This is the case even if the countries in which the parties are situated are not contracting states. For example, a contract between a Japanese trader and a Brazilian trader may contain a clause that arbitration will be in Sydney under Australian law, with the consequence that the CISG would apply.

However, a number of states have declared that they will not be bound by this condition. These include the United States, which has made a reservation under Article 95 of the CISG, stating that the CISG will apply only as to contracts with parties located in other CISG contracting states.

Therefore, in international contracts for the sale of goods between a US entity and an entity of a contracting state, the CISG will apply unless the contract's choice-of-law clause specifically excludes CISG terms. Conversely, in international contracts for the sale of goods between a US entity and an entity of a non-contracting state, the CISG will not apply, and the contract will be governed by the domestic law applicable according to private international law rules.

The CISG is intended to apply to commercial goods and products only

The CISG, or the United Nations Convention on Contracts for the International Sale of Goods, is a multilateral treaty that establishes a uniform framework for international commerce. It facilitates international trade by removing legal barriers among state parties and providing uniform rules that govern most aspects of a commercial transaction.

The CISG does not apply to auctions, ships, aircraft, or intangibles and services

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a multilateral treaty that establishes a uniform framework for international commerce. It facilitates international trade by removing legal barriers among state parties and providing uniform rules that govern most aspects of a commercial transaction.

The exclusion of ships and other vessels stated in Art. 2(e) CISG is based on the idea that these vehicles are usually registered. The differences between the various legal systems associated with the registration of such vehicles was the reason why the drafters of the CISG refrained from establishing a duty to register and why they excluded all vehicles potentially subject to registration from the scope of the CISG.

The CISG is intended to apply to commercial goods and products only. With some limited exceptions, it does not apply to personal, family, or household goods.

Importantly, parties to a contract may exclude or vary the application of the CISG.

Parties to a contract may exclude or vary the application of the CISG

The CISG is rooted in two earlier international sales treaties first developed in 1930 by the International Institute for the Unification of Private Law (UNIDROIT). The CISG came into force on 1 January 1988 following ratification by 11 countries. As of December 2023, it has been ratified by 97 countries, representing two-thirds of world trade.

The CISG is considered one of the greatest achievements of UNCITRAL and the "most successful international document" in unified international sales law. It is also the basis of the annual Willem C. Vis International Commercial Arbitration Moot, one of the largest and most prominent international moot court competitions in the world.

The CISG does not deprive sellers and buyers of the freedom to mould their contracts to their specifications. Generally, parties are free to modify the rules established by the Convention or to agree that the Convention is not to apply at all.

The CISG is written using "plain language that refers to things and events for which there are words of common content". This was intended to allow national legal systems to be transcended through the use of a lingua franca that would be mutually intelligible among different cultural, legal, and linguistic groups.

The CISG is divided into four parts:

• Sphere of Application and General Provisions (Articles 1–13)
• Formation of the Contract (Articles 14–24)
• Sale of Goods (Articles 25–88)
• Final Provisions (Articles 89–101)

The CISG can apply to contracts between domestic corporations if their relevant places of business are in different Contracting States. The CISG does not apply to contracts to provide services alone. It also does not apply to sales of goods bought for personal, family, or household use, nor does it apply to auctions, ships, aircraft, or intangibles and services.

The CISG may apply without a written contract. For unwritten contracts, if parties to a contract of sale do not "put it in writing", the CISG will apply. However, under the CISG, a contract may fail for indefiniteness if the price is not stated or cannot be determined.

The CISG does not require that contracts for the sale of goods be in writing. Under the CISG, oral contracts of sale not evidenced by a document or combination of documents are enforceable.

The CISG does not govern all aspects of sales contracts subject to its application. The matters listed in its Article 4 must be filled in by the applicable national law under due consideration of the conflict of law rules applicable at the place of jurisdiction.

The CISG does not address the law governing the capacity of natural persons, arbitration agreements and agreements on choice of court, companies or other collective bodies and trusts, insolvency, the proprietary effects of contracts, and the issue of whether an agent is able to bind a principal to a third party.

The CISG is not the only convention that allows parties to choose the law that will govern their contract. The Principles on Choice of Law in International Commercial Contracts, approved on 19 March 2015, also allows parties to choose the law that will govern their contract.

Frequently asked questions