Vienna Convention - International Sale Of Goods PDF

[Vienna Convention -- International sale of goods] Legal nature of this instrument -- international treaty, not a piece of EU law, does not produce legal effects of EU instruments, no direct effect -- no primacy effect Monist vs dualist systems important Subjective scope of application of the con...

[Vienna Convention -- International sale of goods] Legal nature of this instrument -- international treaty, not a piece of EU law, does not produce legal effects of EU instruments, no direct effect -- no primacy effect Monist vs dualist systems important Subjective scope of application of the convention: How can we establish the applicability of the convention considering the states involved? - Answered in article 1 but handles this in a not totally straightforward way - Makes an express reference to rules of private international law dor the first time [Chapter I. Sphere of application ] **Article 1 is a formula to indefinity what law governs the relationship** Article 1 (1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States: Subjective element -- who will be subject to this convention? Parties who Linking factor is place of business, nothing to do with nationality Material element -- international sale of goods Makes reference to contract of sale of goods -- need to define this as well Parties here are a seller and a buyer because it's an international sale of goods \(a) when the States are Contracting States; or when the countries where the businesses are have entered into the Vienna convention, this convention applies when it comes to the subjective scope of application -- place of business and both states have entered into this convention, then this legal regime will rule that relationship \(b) when the rules of private international law lead to the application of the law of a Contracting State. -- parties, one or both, have their place of business in a state other than those who entered into the convention, e.g UK is not a member of convention, seller from Germany and buyer in London -- you cannot apply this part a) this because place of business of both parties does not fall within the scope, b) says if rules of private international lead to the application as the governing law of the legal system of a state of the convention, in that case, the convention still applies -- with this same example, if you reach the conclusion that according to International Private Law of the state which IS IN the Vienna convention, then it will prevail Usually contracts will not tell you one law should rule one country -- if the contract establishes it and the law belongs to a member state of the convention - Vienna (and this is an international sale of goods), then Vienna applies -- but normally this isn't explicit If law never expressly identified, then article 4 relative? Check this Even if rules of International Private law leads you to Italian Law for example, then Italian does not govern the relationship, Vienna does \*if not an international sale of goods, Vienna not applicable \(2) United Nations Convention on Contracts for the International Sale of Goods (2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract. If international dimension of the transaction never appeared as a result of the dealing of the parties, V does not apply -- need to understand to what extent the parties made explicitly the international element of their dealings, if one party is not aware, then V principle does not apply Many articles in the Vienna Convention highlight the subjective intention of the parties when making decisions \(3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention. Article 2 and 3 deal with the material dimension of the scope of application of Vienna 2- explicitly exclusions from material scope of application... [Article 2] 1. This Convention does not apply to sales: a. of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use; This rule produces a paradox, imagine buying on amazon a book from the US, does that satisfying the notion of a good? Yes, tangible and useable, but book bought for personal pleasure, therefore you would need to resort to rules of International Private law given that Vienna will not help you with that -- if seller was not aware and had no obligation to be aware, then that exception shall not apply. What if we buy 5,000 copies of this book , obvious that was not intended to be bought for personal pleasure, could be understood you are going to resell these books. Applicability of Vienna depends on the finality on which the purchase was carried out, introduces a degree of uncertainty when comes to the applicable legal regime These types of goods have particular legal regimes in the applicable states, who (states) are not always willing to withdraw their sovereignty and powers over these kinds of areas What are good for purposes of Vienna? -- International can be easily understood via article 1, (from fact that both parties have their place of business in contracting states or when rules of International Private Law lead to it, it will be triggered) but sale of GOODS? This article details what is goods - There is no definition in the treaty - For the case law to carve out what this legal concept means -- so far courts have said goods are tangible and moveable goods, e.g transfer of patent rights would fall outside the material scope of application, IP rights are not tangible, and be real state -- in the case law not embracing that things not of a real state are goods in this context [Article 3] Need a definition of sale of goods here, national jurisdiction plays no part 1. Contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods buyer undertakes to supply a substantial part of the materials necessary for such manufacture or production. This deals with notion of supply, tries to make approach to a more nuanced relation e.g supply of goods where there is not just one exchange, but multiple Contract of sales equates to supply here Convention does not apply where the party who orders the goods to be manufactured or produced -- buyer, is the one who undertakes to supply a substantial part of the materials necessary for such manufacture or production - This is because buyer is not buying goods, he is buying a service! Not a SoG but a provision of services States are unlinked here to waive their sovereignty on regulation of provision of services here 2. This Convention does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or other services. Not purely an international sale of goods -- same rationale Here, we have a negative definition of the contract, through these exceptions we can extract the type of contractual relationship that will fall within the material applicable scope [Article 4 --] describing type of contractual relationship that will fall within the scope of application of the convention Scope of application: Formation of the contract (play between offer and demand) plus rights and obligations of the contracting parties -- seller and buyer This Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract. In particular, except as otherwise expressly provided in this ­Convention, it is not concerned with: SUBJECT MATTER OF THE CONVENTION Two explicit exclusions a. the validity of the contract or of any of its provisions or of any usage; legal validity of contract and its clauses b. the effect which the contract may have on the property in the goods sold. Paradox of this article -- Vienna convention is telling us that it was say no word at all concerning the validity of the contract itself of the effect of the contract over the goods, how can that be possible if it is regulating the international sale of goods ? What is the rationale of these clauses? - Validity -- generally is the legal existence of the contract, so why would this be excluded from the convention which aims to regulate sale of goods? The elements that will determine the legal validity of a private agreement usually are related to basic features of the individual status of the parties who entered into that agreement e.g legal capacity which is extremely sensitive , it is for the law of your nationality to determine your civil capacity, different legal treatment in different jurisdictions, validity will be determined by the legal capacity of the parties entering into the contract, e.g legal validity of consent -- how can we establish on these super sensitive matters because dependent on legal conditions, therefore decided to exclude it Vienna does not rule the very existence (this is not formation etc) of the framework/contract, will fall within the capacity of another law -- maybe that of the parties - Effect contract has on goods sold -- excluded because many countries jurisdictions differ on these points -- i.e transfer of ownership, Vienna will not establishes who is the owner of the goods sold even if the sale of goods is subject to the Vienna convention [Article 5] - exclusion of scope of application This Convention does not apply to the liability of the seller for death or personal injury caused by the goods to any person. Vienna excludes this hypothesis from its legal regime Subjective/special scope of application and material objective scope of application defined in these first five Articles of the Convention Article 6-- allows the parties to the parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions. - Almost always parties will opt out from the convention! Parties to ISoG can opt out, not mandatory - However in a not sophisticated contract, they will make no statement about it and therefore by default it is applied (Vienna this is), provided that subjective and material scope of application covers the type of contract we are talking about - But article 6 made this disposable for the parties **General provisions...** [Article 7] established legal standards for the interpretation the convention itself 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. Uniform body of law that must be interpreted uniformly -- all the different stares must try to establish a uniformed interpretation the treaty Good faith -- not a common principle of law, not a concept of English law (not a formal recognition), in legal terms it has to do with foreseeability of contracts -- can be derived from our past behaviour that generates a legitimate expectation in our counterparties but also, that foreseeability of the contract can also come from the notion of an abstract diligence -- basic diligence which everyone abides to 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. The rationale behind all of these articles -- the protection of sovereignty, good faith This article is saying if there is a gap in convention and you cannot find Vienna convention to settle the issue, apply the international law rules (of the seller?) [Article 8] establishes the way we must interpret the international sale agreement -- the contract, not the convention 1. For the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what that intent was. Provided that the other part was aware of that intent or could not have been unaware of it, we must interpret manifestations from the parties according to the intent of the parties Problematic because -- e.g you have entered into agreement where seller tries to sell you all the fruit he has harvested from his fields, at the agreed day you have received 2 tonnes of strawberries, seller says I have fulfilled my obligations, and you say I will not pay because you have delivered only strawberries but you are also growing tomatoes, seller says tomato are not fruit, contract says nothing about this - Under Vienna we need to assess the scope of application of the statement according to the intent, it is possible there is a misunderstanding between both parties - Intention would not be relevant in English law, if the buyer could prove both parties knew that fruits included tomatoes, then that is the obligation of the seller -- to deliver tomatoes - If the seller can prove he only meant strawberries, this can affect his obligation 2. If the preceding paragraph is not applicable, statements made by and other conduct of a party are to be interpreted according to the ­understanding that a reasonable person of the same kind as the other party would have had in the same circumstances. Role courts should assume when interpreting the contract 3. In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties. Contract is not the only source of obligations, many others -- clear increase of degree of uncertainty when it comes to ascertaining obligations flowing from the contract Customs, practices, usages that will be binding for the parties even if they never expressly agreed on these practices -- not very relevant when coming to the main obligations of the contract as these will usually be covered by the parties, sometimes some details of contract e.g place of which the buyer/seller must fulfil their obligation is not identified in the contract, there are some provisions concerning this kind of rule in the convention, here customary rules will play a role. E.g in [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. 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. Convention says sometimes we will find in certain markets usages that both parties knew or had to know and that are considered binding by parties involved in that type of contract -- opinion juris, consensus on binding nature of these usages, but both idea must be fulfilled 1. That usage exists -- usually resulting to chambers of commerce, associations of merchants who recognise the existence of this usage and confirm this in writing, and 2. You must also prove that type of usage is considered as binding by parties to that sort of contract you are entering into -- generally acceptance of the binding nature - Explained documentary credits here - Contract is not only the main source of obligations - usages can exist [Article 11] - Relating to form of contract, two legal questions 1. Form that will be needed for a condition of validity for the contract and 2. Form of the contract will just be used to prove the existence of the contract (TWO LATIN WORDS HERE TO DESCRIBE CONCEPT) - Contract is enforceable so long as it is provable (i.e oral agreement is enforceable) e.g witnesses, because form of that agreement is not requested ad valetitatum, if proven then agreement is enforceable Three options for outcome of contract from professors example: - Nothing was born to a legal world - Have purely contractual relationship - Or have something with IN REM affects whereby the ownership itself has been transferred A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses. - Article 4 says Vienna covers this, offer and acceptance is the basic element - What is an offer and acceptance? Are they rebuttable? When are they received? Does acceptance clearly equate every aspect of offers? Etc Contracts in general - they are not just paper, but a legal title which allows me to appear in court and trigger the power of the state to make someone give something that he or she promised, can force someone. [Article 14] starts with concept of offer: 1. A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price. Three elements 1. One or more specific persons 2. Must reflect intention of offeror to be bound in case of acceptance -- you are having a meal at your friends house and you forgot you had a flight, your friend offers to drive you to the airport immediately with their car, you get to the airport on time -- and said to your friend I owe you a beer. This is a promise, you and the address are both aware of the content of that promise, is this enforceable? No, because there is no intention to be obliged by that promise 3. Sufficiently definite -- lack of definition will invalidate the offer, LOOK UP DETAIL 2. A proposal other than one addressed to one or more specific ­persons is to be considered merely as an invitation to make offers, unless the contrary is clearly indicated by the person making the proposal. [Article 15] deals with effectiveness of the offer \(1) An offer becomes effective when it reaches the offeree. -- when is it deemed "reached? "This is a situation when the parties are not in the same place at the same time. Apply theory of the "sphere of control" whereby the offer reaches the offeree when the offer penetrates this sphere of control of the offeree, if the email reaches your mailbox that is enough, offer has produced full legal effects -- if for e.g you Wi-Fi is down, doesn't change this! 2. An offer, even if it is irrevocable, may be withdrawn if the ­withdrawal reaches the offeree before or at the same time as the offer. [Article 16] -- irrevocability \(1) Until a contract is concluded an offer may be revoked if the ­revocation reaches the offeree before he has dispatched an acceptance. \(2) However, an offer cannot be revoked: \(a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or \(b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer. -- not clear, relying on the subjective intention of the parties again, acting in accordance with a legitimate objective/intention [Article 17 ] An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror. [Article 18] -- acceptance of the offer 1. A statement made by or other conduct of the offeree indicating ­assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance. This does not mean silence is always not acceptance, just silence by itself mere silence will not amount to acceptance, you may be forced to speak -- i.e you must respond in 10 working days etc, you then have to speak and cannot be silence, depends what is excepted of you 2. An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. Sphere of control theory An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. If no time fixed by the offer we can always argue that the time lapsed used by the offeree used by the offer in issuing the acceptance was too much and unreasonable delay. Always need to have fixed time or there is too much uncertainty. An oral offer must be accepted immediately unless the circumstances indicate otherwise. 3. However, if, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price, without notice to the offeror, the ­acceptance is effective at the moment the act is performed, provided that the act is ­performed within the period of time laid down in the preceding paragraph. Acceptance will be embodied in the form of an act, not a verbal accusation within the time or without a reasonable delay [Article 19 ] Mirror rule -- if acceptance does not equate perfectly the offer, no acceptance. Counteroffer! Exceptions -- alterations and differences to offer do not alter materially the offer itself, in that case there is an acceptance 1. We will not have acceptance if immediately someone objects, there is not contract here 2. If silent, there is a contract, but then what is the content? Convention says it will be made of conditions established in the offer and the modifications added in the acceptance \(1) A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer. \(2) However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance. 3. Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially. Indicated fields which are automatically considered as materially altering the offer, therefore, no contract [Article 21] -- deals with late acceptance because we can establish within the offer a time limit for acceptance \(1) A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect. The offeror is interested in this case of having an effective acceptance \(2) If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without delay, the offeror orally informs the offeree that he considers his offer as having lapsed or dispatches a notice to that effect. Problems with means of communications which means the offer would've otherwise arrived (abnormalities) , then offeror can still validate it unless immediately objected it