Expert Insight

INTERNATIONAL SALES OF GOODS Labanees Lawyer . Dr. Talal Jaber

I – Introduction:

To make easier and more commercial to buy and sell raw materials, commodities and manufactured goods on the international scale, the idea of enacting an international treaty containing rules governing the making, interpretation and the rules governing obligations & remedies in contracts for the international sales of goods became a necessity.

            Accordingly, the United Nations Convention for the International Sales of Goods (hereinafter the CISG), known as the Vienna Convention, was prepared and enacted by the United Nations Commission for International Trade Law (UNCITRAL) on the 11th of April, 1980.

The CISG is defined as a binding agreement between the contracting countries. It establishes a set of rules governing certain aspects on the making and performance of every-day commercial contracts between sellers & buyers who have their places of business in different countries.

II – Scope of application of the CISG:

A- Domicile of the Contracting Parties:

According to its first article, the CISG will be applied once the domicile or the place of business of the contracting parties is located in two different countries. To know such a place, and in case of vagueness, the rules of Private International Law will be applied.

B- Types of contracts that are excluded:

  1. Because of the purpose of the sale: Contracts providing only services (unless they are mixed with a sales contract) and contracts concerning goods bought for personal, family or household use.

  2. Because of the nature of the sale: Sale by auction, on execution or otherwise by law.

  3. Because of the nature of the goods: stocks, shares, investment securities, negotiable instruments, money, ships, vessels, hovercrafts, aircrafts and electricity.


III – Generalities on the CISG:


A- Interpretation of the Convention:


   While applying the CISG, the international character should be observed with uniformity in its application, in addition to the observance of good faith in international trade.

Also, and in case of vacancy in the rules of the CISG, we must refer to the rules of Private international law.



B- Interpretation of the Contract:


      A valid interpretation of the contract itself should be done by referring to the norms & usages of international trade and to previous practices between the parties.


C- Form of the Contract:


            The CISG doesn’t impose any form (i.e. written) or requirement upon the formation of the contract.


IV – Formation of the Contract:



    The CISG deals only with the formation of the contract, but it doesn’t deal with the validity of the contract itself.


A- The Consent:


The offer must be addressed to one or more specific persons, and it must be sufficiently clear and definite. It must indicate the goods and, explicitly or impliedly, fix or make provisions for determining the quality and the price.


The acceptance can be expressed or implied.


The CISG takes middle position for the revocability of the offer until its final acceptance and its general revocability for a certain period of time.

In this regard, and unlike Lebanese law as stated in the Code of Obligations & Contracts, the CISG favors the theory reception in which the acceptance won’t be finale until received by the offeror.


B- The Object:


      The object wasn’t mentioned separately in the CISG. This object was mentioned in the CISG, in a special way that talks about the quality & quantity of the sold goods.


C- The Cause:


       The cause of the contract wasn’t mentioned by the CISG. It concerns the validity of the contract, and it was left for the rules of domestic law.


D- The Price:


            The price is very important, and it was subject to different rules in the CISG.


  • Article 14 of the CISG mentions that the price should be determined or able to be determined at the time of the formation of the contract.

  • Article 55 of the CISG mentions that the price should be determined or able to be determined at the time of the execution of the contract.



     Usually, jurisprudence takes into consideration both articles, but it favors the application of article 55 due to its flexibility which promotes international trade.


V – Execution of the Contract:


The execution of the contract is related to the obligations of both, the seller and the buyer.


A- Obligations of the Seller:


1- Delivery of the Goods:


  • Methods of delivery: The seller must make a proper delivery by placing the goods at the buyer's disposal or by handling over the documents.


  • Place of delivery: The delivery can be made to the first transporter at the place where they are located at the time of the formation of the contract, at the seller’s premises, or at any place mentioned in the contract.


  • Moment of delivery: The delivery should be made at the date fixed or able to be determined from the contract, within a certain period of time able to be determined from the contract or within a reasonable period of time after the formation of the contract.

2 - Conformity of the Goods and Third Party Claims:


            The seller must deliver the goods which are of the quality, quantity, and description required by the contract itself. He is responsible for all the defects upon the formation of the contract, even if they appear at a future date.

     Non-conformity could be material (as abovementioned) or legal. The latter means that the goods should be free from any right or claim of a third party.


B- Obligations of the Buyer:


1- Taking Delivery:


      The buyer should take delivery of the goods. In addition, he must do all the acts that could be reasonably expected from him to enable the seller to make a proper delivery.


2 - Payment of the Price:


  • Time of payment: The payment should be made at the date fixed by or able to be determined from the contract, without the need for any request or compliance with any formality on the part of the seller.

If no specific date is fixed, the payment must be made when the seller places the goods or the documents at the buyer’s disposal in accordance with the terms of the contract. It can be done also after the inspection of the goods.


  • Place of payment: The payment can be made at the place mentioned in the contract, at the seller’s premises, or at the place where the handling of the goods and documents takes place.


  • Money of payment: The money used in payment is the one mentioned in the contract itself or according to the place of payment.


VI – Remedies for the Breach of the Contract:


A- Remedies Imposed on the Seller:


1 - Performance of the Contract:


           The buyer may require performance by the seller for his obligations, unless the buyer has resorted to a remedy which is inconsistent with this requirement.

           The buyer may also fix an additional period of time, of reasonable length, for the performance by the seller of his obligations.


           Whenever the performance is related to a lack of conformity in the sold goods, a notice should be given to the seller within two years from the handling of the goods or according to the contract itself.


2- Payment of Damages:


           Damages for the breach of the contract by one of the parties consist of a sum of money which is equal to the loss and to the lost profit.


3- Reduction of the Price:


            If the goods do not conform to the terms of the contract, and whether or not the price has already been paid, the buyer may reduce the price in proportion to the value that the conforming goods might have had at the time of delivery.


4- Voidance of the Contract:


           A breach of the contract can be sanctioned by a unilateral resolution of the contract without a prior notice.

A declaration of voidance of the contract is effective only if made after a prior notice to the other party


B- Remedies Imposed on the Buyer:


1- Forced Execution (Performance):


The seller may require the buyer to pay the price, to take delivery or to perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement.

Also, the seller may fix an additional period of time, of reasonable length, for the performance by the buyer of his obligations.


2- Voidance of the Contract:


The seller may declare the contract void if there is a failure by the buyer to perform any of his obligations.



VII – Termination of the Contract:


            The contract for the international sales of goods is subject to the same rules of termination applied on contracts in domestic law.




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