European and International Law

UNIDROIT

International Institute for the Unification of Private Law.

It has been founded in 1926 and now counts 63 member-countries.

It is an independent organization, sit in Rome, with the aim

-to study needs and methods for harmonizing private law(in particular commercial law);

-to prevail(promuovere) appropriate uniform laws of private law

-to encourage the cooperation between nations.

Its function is to formulate uniform law instruments, principles and goods.

It uses international instruments: international Convention, Model laws, Principles and

contractual Guide. " 15

CISG

CISG stands for United Nation Convention on Contract for International Sale of Goods.

Initially, it has been ratified by 11 countries BUT nowadays it counts 89 countries such as

USA, Italy, Austria, France, Russia, Spain. While among those which don’t there are: UK and

Thailand.

It entered into force in 1988.

CISG structure:

101 articles divided into 4 Parts:

Convention sphere of application: internationality requirements and limitations,

I Part:

general provisions: rules about the interpretation of the convention and of the contract.

Formation of the international sale contract.

II Part: Obligations, rights and remedies: substantive rules of the international contracts,

III Part:

different remedies such as the specific performance, the damages, the avoidance of the

contract. The right of avoidance of the contract is regulated by fundamental branch.

Reservations

IV Part:

I PART:

Art.1

refers to when CISG is applicable.

- It is applicable to that is software and intellectual property(songs and movies),

sale of goods ,

immovable property are outside this convention.

- Internationality concept: CISG is applicable to contract of sale of goods, referring to giving

goods in order to receiving money, between parties whose place of business are in different

states when:

*or the States are Contracting States

this means that it’s automatically applicable when both countries are contracting states

*or the rules of (so conflict of law rules) lead to the application

private international law

of the law of a Contracting State.

As far as the place of business is concerned: it is not defined in the convention. The criteria

are the place with the closest relationship to the contract and its performance. it refers to the

place where something is manufactured or assembled NOT where the central office or its

official address.

- In case the contract will be concluded by one place of business of a party but performed by

one another in another place.

3 main positions are advocated to solve such cases:

-one in case of the duck, attributes more weight to the place of business carrying out the

performance of the contract.

-the majority view relies on the place of business responsible for the conclusion of the

contract

-gives relevance to that place of business which has the most power to exact influence upon

the contractual relationship " 16

Art.2

CISG does not apply for:

- Goods bought for family or household uses -> limitation of application of

personal use,

CISG: only commercial, industrial and professional uses. sphere of the convention de facto is

the Commercial sale.

generally, the nature of contract is not relevant for the applicability of CISG .

Personal use:

Personal use also includes consumption of the goods as transfer at a third party as a gift; t is

not restrictive to blood relative or marriage. the intention to use the good personally will be

often indicated by the very nature of the goods or from the identity of a buyer.

- Sale by auctions are usually governed by the law of the states and the parties

auction:

normally do not attach any significant to the place of business. Generally, the auction is

governed by a special law of special discipline. An auction is a public sale where the goods are

awarded to the best offer.This restriction concerns the traditional way of auction. There is no

doubt that compulsory auction such as forced sale, do not fall within the sphere of application

of CISG.

-Forced sale

-Sale adopted

of stocks, investment security, negotiable instrument and money:

to avoid conflict with mandatory rules of domestic law. All domestic and foreign means of

payment are included within the concept of money. Coins no longer in circulation could be

object of the CSIG because of their characteristics as antique.

-Ships, ships include object intended to be moved on and

vessels, hovercraft or aircraft:

under water.

-Electricity: contract for the supply of electricity often contains special conditions for which

the CISG is not suitable ->the exception cannot be transposed to the supply of gas and oil.

Art.3

put the accent on NOT services.

products/goods

-The convention will to sale of and to involving both the

apply goods mixed transactions

supply of services and goods (like sale of a machinery and installation and maintenance of

that). in the cases in which the service element doesn’t constitute the preponderant

But only

part of the contract. Hence, if the value of the service to provide is than the value of

higher

raw materials used to manufacture the product, it will be the case of a service. so this will be

the result of the comparison between the economic value of the goods on one hand and the

services on the other hand, on the basis of the price indicated in the contract.

-the convention to a contract for the

will not apply supply of goods to be

if the person who orders the goods, such as the buyer, has set supply as a

manufactured

substantial part of the necessary material .

-When both the parties contribute materials: so it is necessary to make a test: the " 17

relevant test is the substantial test: 3 main factors are proposed for determining

-whether a portion of material is substantial

-the economic value (50%)

-the volume

-the importance of the respective contribution for the ended product.

Art.4

states that all issues not governed by CISG are the validity of the contract and the effect of

the same on property.

Since the CISG is not concerned with validity, all problems such as fraud, mistakes must be

resolved with domestic law.

Art.6

The article 6 refers to the hypothesis in which the parties could exclude the application of the

convention. Consents to the parties to choose the application or not of the convention.

- So the parties could contracting out the convention in whole or in part.

- In case parties doesn’t say anything it means that CISG automatically applies.

At an international level the is the

freedom of the contracting parties essential

of the relationship.

rule

Contractual Freedom: general international rule concerns the freedom of the parties.

- “Contracting out” of the CISG

- “Contracting in” of the CISG

In particular it consents to the parties to choose the application or not of the convention

BUT we have some cases in which the parties want to apply the Vienna convention even if

the place of business is in different not contracting states.

- In general we can say that when the parties make a choice concerning Austrian, French,

Italian, Spain, etc. laws, this agreement should be interpreted as a reference to domestic law

including Vienna convention.

- If the reference is made to a specific discipline, the CISG does not apply. " 18

II PART “Formation of the contract”

the 2 essential elements for the formation of the contract such as the offer and the

acceptance. The domestic law provides for different regulations about the formation of the

contract and the CISG will present a compromise among diverse domestic laws.

Art.11

States that do not need of writing in order to have a valid international sale agreement. Every

form is valid (even a phone call), it can be proved by witnesses.

Writing includes telefax and telex as art.13 says, but now every form is recognized as

valid.

Art. 14

It describe the offer and shade the lights on 2 major legal concepts:

OFFER: it’s a proposal for concluding a contract and after acceptence the contract is

- created. Also valid for e-commerce.

INVITATION TO MAKE AN OFFER: which may not be accepted and may not create a

- valid contract, one of the party may be reluctant to accept the agreement. not immediately

binding. in fact the art says that it has to be converted in an offer in order to be considered

valid by the CISG. (i.e. the sign “for sale” on a house is without price, only a phone number so it’s not an

offer but invitation to make an offer; so you need to call and ask 4 price, negotiate with the seller and the

accept)

It contains the discipline of the offer:

1. Must be addressed to a specific person(person includes individual and also legal

person )

2. Must contain the intentions to be bound,

3. Must to be sufficiently definite (such as indication of the goods,the quantity and expressly

or implicitly the price)

1.It is not relevant the name of the addressee, it must be clear, from the words of the offer,

which specific person is the addressee.

Proposals to buy or sell sent by email meet the requirements of a specific person even if it is

directed to numerous addressees

2.The second element have more subjective elements; it regards a state of mind which is

difficult to be verified

Example: some doubts can arise if offers are formulated in an interrogative form:

“I was thinking of sending you shoes” How you will react to this proposal?

This declaration is not valid as an offer, according to the CISG because it seems to be an

evaluation, a sort of survey and not a real intention to be bound immediately.

On the contrary, if the offer includes the provision of a penalty, this is sufficient to be

considered a real offer.

3.The third element of an offer creates some problems.

It requires the indications of specific and also the or

goods, quantity price a range of

(i.e.if

price the seller indicates a price between for ex. 35 and 30, this is an offer sufficiently definitive).

BUT the quantity and the price may be indicated ALSO implicitly, according to the custom

and the usages. (i.e. if a buyer proposes to buy any quantity of shoes and the seller in his reply gives some

details to identify the quantity, the offer is valid, but if the seller replies that he’s ready to sell any quantity " 19

without any specification, the offer is not valid.)

ALSO, If the offer proposes how to determine the quantity, the requirement of the art. 14 is

respected (i.e. the buyer can say “we propose to buy the quantity correspondent to 500.000 euros at the time

and place of delivery”in this case there’s an element that helps to indicate the quantity, so the offer is valid.)

Art.15

According to the art. 15 an offer becomes effective when it reaches the offeree;

-an oral offer reaches instantly the offeree,

-a written offer reaches t