By Victoria Tabut LLB (Hons)
Introduction
During the last three decades international trade
has increased remarkably[1].
This is especially so in light of new emerging world markets[2].
Globalization is one of the single most important factors contributing to this
increase[3].
The formation of regional, economic and political units as well as the
abolition of regulatory constraints on trade between different countries has
facilitated international trade to a large extent[4].
Background
The Hague diplomatic conference on the unification
of the law governing the international sale of goods was held in Netherlands in
1964[5].
Due to the political situation (cold war and end of colonization in a majority
of African countries), delegations of two (2) ‘developing’ and three (3)
socialist countries attended the conference and about thirty (30) delegations
from developed countries[6].
For these States there was necessity for a set of
rules on the sale of goods, acceptable by as many States as possible, and taking
into consideration the fact that the participants in international trade were
at different levels of development[7].
This set of rules should therefore be uniform and eliminate the problem of
conflict of laws[8].
The draft submitted to The Hague conference was only based upon the laws of the
highly developed countries[9].
The majority of the delegations were not prepared to compromise; they were
satisfied seeing their domestic legislations raised to the international level[10].
There was no possibility of taking into
consideration that the mechanics of foreign trade of the majority of the States
was lagging behind those of the developed countries[11].
The delegations of the developed countries insisted upon maintaining the
usages, customs and practices established by the long experience of their
tradesmen, and disregarded the fact that neither the developing nor the
socialist States were at the level necessary for them to adhere to the
Convention[12].
The Hague Convention[13]
was hardly ratified by a majority of states[14]. The
uniform and universal regulation of the law of international sale was,
nevertheless, necessary for international trade[15]. The establishment of United Nations Commission
on International Trade Law (“UNCITRAL”) was due to the fact that The Hague
conference was not flexible enough to take into consideration the interests of
the less developed States, and was not striving for compromises but relied upon
the majority of votes[16].
The Challenges of Uniform and
Universal Regulation of the Law of International Sale of Goods
Domestic
legal systems provide rules that are divergent in substance. Where rules are
divergent, a choice between the two must be made for the purpose of formulation[17].
Legal systems frequently employ different legal
terminology, or an identical terminology shelters different meanings[18].
The concern here is whether, in formulating uniform rules, technical terms can
be borrowed from domestic legal systems without causing problems of
interpretation in other jurisdictions[19].
The language in which uniform legal texts are
drafted is almost invariably English, at least in the important preparatory
stages of the work[20].
The question to what extent the preponderant use of English has an impact upon
the conceptual formulation of rules is an intriguing one and has raised a lot
of political issues on the superiority of some states over others in
international matters of policy[21].
The Features of Uniform and
Universal Regulation of the Law of International Sale of Goods
1) Flexibility
Where maximum uniformity is important UNCITRAL
employs the international treaty or convention[22].
However, flexibility is an important aspect for a functioning international set
of rules to be sustained. A notable example of this is the 1980 United Nations
Convention on Contracts for the International Sale of Goods. The Convention
provides for flexibility in many ways[23].
One is by avoiding unnecessary detail, another is the provision that the
parties may exclude the Convention, and that the contract between the parties
prevails over inconsistent provisions of the Convention[24].
In addition, the Convention gives full effect to the practices established
between the parties and to applicable trade usages[25].
2) Modernization
Some of the widely prevailing domestic laws were
enacted with previous regimes of legislators and are rarely subjected to
revision[26].
Modem law for international trade must be based on current international
experience to gain relevance[27].
United Nations Convention on
Contracts for the International Sale of Goods (1980)[28]
The convention applies to the sale of goods specifically.
The contract of sale must be international, defined as between parties located
in different States. This refers to the location and not nationality of the
parties.. The contract must have one of two specified alternative relationships
to the Convention; either each party is located in a Contracting State to the
CISG or the rules of Private International Law leads to the application of the
law of a Contracting State.
The first part provides substantive
rules of on the goods such as delivery, price, payment conditions and
documents to be provided. The second part
governs the remedies of the seller in case of non-payment at the
agreed time, lack of conformity of goods, transfer of property and legal
effects. The third part contains the rules on avoidance of contract and
damages, avoidance procedure, effects of avoidance, as well as rules on
restitution, damages and mitigation of harms. The fourth part contains the
standard clauses. Regardless of
who drafts the contract, sellers and buyers need to be aware and thoroughly
review the most important clauses to protect their own interests.
The Harmonization of Uniform and
Universal Regulation of the Law of International Sale
One
of the functions of a sales law regime is to facilitate transactions by means
of clear and effective default rules that minimize the costs of negotiating,
drafting and executing the contract[29].
In the context of international sales this basic function may be compromised by
the international character of the transaction. International private law rules
are often difficult to apply; increasing transaction costs and decreasing the
economic efficiency of the transaction[30].
To minimize the risks associated with such transactions and maximize their
efficiency, legal rules and trade practices pertaining to international sales
should be harmonized. Harmonization facilitates legal certainty and predictability,
and by making international contracting easier, prevents disputes and costly
legal actions[31].
Bibliography
1. J.
Coetzee, Incoterms As A Form Of
Standardisation In International Sales Law: An Analysis Of The Interplay
Between Mercantile Custom And Substantive Sales Law With Specific Reference To
The Passing Of Risk(2010)
2. United
Nations, Convention on Contracts for the International Sale of Goods, Vienna,
11 April 1980 (CISG)
3. J.O.
Honnold; Goals of Unification: Process
and Value of the Unification of Commercial Law: Lessons For The Future Drawn
From The Past 25 Years; Uniform Commercial Law In The Twenty-First Century Proceedings Of The Congress Of The United Nations Commission On
International Trade Law(1992)
4. L.
Reczei, Process and Value of the
Unification of Commercial Law: Lessons For The Future Drawn From The Past 25
Years; Uniform Commercial Law In
The Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[1]
J. Coetzee, Incoterms As A
Form Of Standardisation In International Sales Law: An Analysis Of The
Interplay Between Mercantile Custom And Substantive Sales Law With Specific
Reference To The Passing Of Risk(2010) P.1
[2]
Horn “Uniformity and Diversity in the Law of International Commercial
Contracts” in Horn & Schmitthoff (eds) The Transnational Law of
International Commercial Transactions II (1982) 3 4-5.
[3]
Zeller “The Development of Uniform laws – A Historical Perspective” 2002 (14) Pace
Int’l L Rev 163 167.
[4]
Ademuni-Odeki The Law of International Trade (1999) 6; Kronke “UNIDROIT
75th Anniversary Congress on Worldwide Harmonisation of Private Law and
Regional Economic Integration: Hypotheses, Certainties and Open Questions” 2003
Unif L Rev 10.
[5]
L. Reczei, Process and
Value of the Unification of Commercial Law: Lessons For The Future Drawn From
The Past 25 Years; Uniform Commercial Law In The Twenty-First Century Proceedings Of The Congress Of The United Nations Commission On
International Trade Law(1992)
[6]
Ibid
[7] L. Reczei,
Process and Value of the Unification of
Commercial Law: Lessons For The Future Drawn From The Past 25 Years;
Uniform Commercial Law In The
Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[8]
Ibid
[9]
Ibid
[10]
Ibid
[11] L. Reczei,
Process and Value of the Unification of
Commercial Law: Lessons For The Future Drawn From The Past 25 Years;
Uniform Commercial Law In The
Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[12]
Ibid
[13]
Convention Relating to a Uniform Law on the Formation of Contracts
for the International Sale of Goods, The Hague, Netherlands, 1 July 1964 (ULF);
Convention Relating to a Uniform Law on the International Sale of Goods, The
Hague, Netherlands, 1 July 1964 (ULIS).
[14]
Ibid
[15]
Ibid
[16] L. Reczei,
Process and Value of the Unification of
Commercial Law: Lessons For The Future Drawn From The Past 25 Years;
Uniform Commercial Law In The
Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[17] J.O.
Honnold; Goals of Unification:
Process and Value of the Unification of Commercial
Law: Lessons For The Future Drawn From The Past 25 Years; Uniform
Commercial Law In The
Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[18]
Ibid
[19]
Ibid
[20]
Ibid
[21]
Ibid
[22]
J.O.
Honnold; Goals of Unification:
Process and Value of the Unification of Commercial
Law: Lessons For The Future Drawn From The Past 25 Years; Uniform
Commercial Law In The
Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[23] United
Nations, Convention on Contracts for the International Sale of Goods, Vienna,
11 April 1980 (CISG)
[24]
Ibid
[25]
Ibid
[26]
J.O.
Honnold; Goals of Unification:
Process and Value of the Unification of Commercial
Law: Lessons For The Future Drawn From The Past 25 Years; Uniform
Commercial Law In The
Twenty-First Century Proceedings
Of The Congress Of The United Nations Commission On International Trade Law(1992)
[27]
Ibid
[28] United
Nations, Convention on Contracts for the International Sale of Goods, Vienna,
11 April 1980 (CISG)
[29] J.
Coetzee, Incoterms As A Form Of
Standardisation In International Sales Law: An Analysis Of The Interplay
Between Mercantile Custom And Substantive Sales Law With Specific Reference To
The Passing Of Risk(2010) P.138
[30]
Ibid
[31]
Ibid
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