CISG in the Nordic countries A presentation at the EL§A seminar: Contracting in Europe in Tromsoe, 6 March 2003 by Associate professor, dr.juris Petri Keskitalo The faculty of Law, University of Tromsoe

CISG in the Nordic countries 1) CISG? 3) CISG sphere of application? 4) CISG in the Nordic countries? 5) CISG rules and principles? 6) Uniform application of the CISG? 2) CISG scope of application?

1) CISG? CISG = United Nations Convention on C ontracts for the I nternational S ale of G oods (Vienna 1980) - A result of the Vienna diplomatic conference with delegates from 62 countries representing all continents of the world - As of 1 March 2003 it was ratified by 62 states - The latest member of the CISG-family is Honduras, where the CISG comes into force 1 November 2003

2) CISG scope of application? - CISG applies to international sale of goods - It does not apply to: -consumer sales -sales by auction -sales on execution or otherwise by authority of law -sales of stocks, shares, investment securities, negotiable intstruments or money -sale of ships, vessels, hovercraft or aircraft -sale of electricity - Neither does it apply to: -manufacturing contracts, where the party ordering the goods supplies a substansial part of the material -contracts, where labour or other services is the preponderant part of the obligations - It does not govern: -matters of validity, at least not as a rule -matters concerning the right to the property of the goods -product liability

3) CISG sphere of application? a) CISG applies according to PIL-statutes b) Parties have pointed out the CISG as the law of the contract c) Arbitration tribunal finds it appropriate to apply the CISG Notice that by nature the CISG does not apply to matters outside the scope of application of the CISG - automatically when both parties come from CISG-states - conditionally when one of the parties comes from a CISG-state Notice that this applies even outside the designated scope of application of the CISG!

© Pace University database on CISG & International Law: 3) CISG sphere of application? - International sales law of countries that account for over 2/3 of all world trade - Most notable exceptions: Japan United Kingdom (plus Ireland & Portugal in the EU) According to PIL-statutes

4) CISG in the Nordic countries? - The latest Nordic member of the CISG-family: 1 June 2002 Island

- Reservation against the Part II of the CISG (Formation of Contract) 4) CISG in the Nordic countries? - CISG implementation Reservation against the application of the CISG in inter-Nordic transactions Nordic mainland BUT - Norway transformed the CISG instead of incorporating it

4) CISG in the Nordic countries?Nordic mainland - Uniformity of Sales law in the Nordic mainland? - Common preparation of new Sale of Goods Acts during 1980s - Reform of FIN, NOR and SWE Sales Law in BUT - these national SGAs are not completely identical - no reform of the Danish sales law of 1906

4) CISG in the Nordic countries?Nordic import - The PIL-statutes govern the applicability of the Part II of the CISG in contracts with Nordic dimensions - Inspite of the reservation against Part II of the CISG, its alive and well in the Nordic mainland? - If the law of a CISG-state, other than a Nordic mainland-state applies, then Part II of the CISG applies to the contract!

4) CISG in the Nordic countries?Nordic export FIN - Spain? (as well as DEN/SWE - Spain) CISG but not Part II? NOR - Spain? Norwegian SGA? (due to the controversial transformation of the CISG into the Norwegian SGA) ISL - Spain? CISG?

PART I - Sphere of Application and General Provisions PART II - Formation of the Contract PART III - Sale of Goods PART IV - Final Provisions PART I - Sphere of Application and General Provisions Chapter I - Sphere of Application Chapter II - General Provisions PART II - Formation of the Contract PART III - Sale of Goods Chapter I - General Provisions Chapter II - Obligations of the Seller Section I - Delivery of the goods and handing over of documents Section II - Conformity of the goods and third party claims Section III - Remedies for breach of contract by the seller Chapter III - Obligations of the Buyer Section I - Payment of the price Section II - Taking delivery Section III - Remedies for breach of contract by the buyer Chapter IV - Passing of Risk Chapter V - Provisions Common to the Obligations of the Seller and of the Buyer Section I - Anticipatory breach and instalment contracts Section II - Damages Section III - Interest Section IV - Exemptions Section V - Effects of avoidance Section VI - Preservation of the goods PART IV - Final Provisions 5) CISG rules and principles?

Article 9 (1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves. (2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned. 5) CISG rules and principles? Hierarchy on norms in international sales law: 1. The "mandatory norms that prevail over the rules of the Convention (art. 4[a]) 2. Contract provisions (art. 6) 3. Trade usages, either expressly referred to by the parties (art. 9[l]) or found applicable by a court or arbitrator (art. 9[2]) 4. The rules of the Convention 5. The "general principles" on which the Convention is based (art. 7[l]) 6. If no such principles are identified, the non-mandatory norms of the law applicable under the conflict rules of the forum (art. 7[2])

Article 9 (1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences. (2) If the party's failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if: (a) he is exempt under the preceding paragraph; and (b) the person whom he has so engaged would be so exempt if the provisions of that paragraph were applied to him. (3) The exemption provided by this article has effect for the period during which the impediment exists. … 5) CISG rules and principles? A new type of norm based on a hybrid between culpa and strict liability Creates several spheres that need to be managed a) Internal performance management b) Contract management c) Loss management

6) Uniform application of the CISG? © Pace University database on CISG & International Law: CISG Article 7 (1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade. (2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.

6) Uniform application of the CISG? - How to secure uniformity of application in relation to the CISG? - Is it possible in practical terms? - Should not this major mistake in the Norwegian implementation of the CISG be solved ASAP? - Should contracting parties choose another law than Norwegian law as the law of the contract? - Should they at least refer to the original version of the CISG instead of the Norwegian SGA in their contract? The Norwegian dilemma: Application of the national Norwegian SGA even in international sales

6) Uniform application of the CISG? Use of IT to promote uniformity by tracking case law, commentary and literature: - The autonomous network of CISG Websites - The Pace database on CISG and International Law - The CISG-online.ch - UNILEX on CISG

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