Analysis of Issues related to the Sphere of Application of the United Nations Convention on Contracts for the International Sale of Goods (CISG)

Analysis of Issues related to the Sphere of Application of the United Nations Convention On Contracts for the International Sale of Goods (CISG)

Article 2 of the United Nations Convention on Contracts for the International Sale of Goods (Treaty / CISG), part of Chapter 1 titled Sphere of Application, contains some limitations in terms of the types of contract of sale, also article 3 regulates the nature of what type of contracts are covered by the Agreement. In the following, the concept of sale contract in the sense of CISG will be briefly discussed and the concept of goods will be explained and then the sale of which goods will not be considered within the scope of CISG will be mentioned.

1.???Sphere of Application CISG

The main problem for the solution of the disputes in international trade relations is the determination of the applicable law. Any disputes between the parties shall be resolved according to the applicable law. The law to be applied is determined according to the rules of conflict of laws of the court which will deal with the dispute. This determination may not be fully seen by the parties in advance. To solve this problem, the parties try to determine the law to be applied by selecting one of their state laws or a third state law. For the international evaluation of the dispute, there must be an element of foreignness. In order for the Convention to be referred as an international contract, it is generally sought to carry an element of foreignness in terms of person and place. Recently, international evaluation has been made through the economy.

1.1. Sales Contract Concept

There is no definition of the sale contract in CISG. In the Treaty it is only by mentioning that the sale contract is related to the supply of goods [1]?In the doctrine, the definition of the sale contract is indirectly deducted from the articles regulating the mutual acts of the parties, such as Articles 30 and 53 of the Agreement. ?Starting from the aforementioned articles, the sale contract is defined as follows: It is a contract of sale that one of the parties (the seller) is obliged to deliver the goods, give the documents related to them and take the ownership of the goods [2]and the other party is obliged to pay the agreed price and to take the goods.

?????????The Vienna Agreement on Sale does not define the concept of goods. Only in Article 2 of the Treaty - as I will explain below - specifies which goods are outside the scope of application of the Treaty.

?????????It should first be noted that the Treaty is concerned only with the sale of movables property. While this is not explicitly stated, Article 35 of the Treaty on the quality and preservation and packaging of the good, Article 46 on the replacement and repair of defective goods, Articles 67 to 69 on carriage, Article 73 on consecutive consignments, and the articles of treaty (Preservation of the goods) 85 to 88 are not eligible to regulate the sale of immovable property.[3]

Today, a subject which is particularly controversial is that the goods to be included in the application area of the Treaty should be embodied and concrete. In this sense, the question of whether the software has the quality of the goods under the Treaty comes into question. According to an opinion, even if the software does not burn to a disc or something, it should be considered as part of the Treaty[4]; Because the software is bought and sold as any tangible goods[5]. On the other hand, according to another view, no tangible property should not be considered as property under the Treaty. However, in accordance with the same opinion, if the subject matter of the contract is burned to the disc or anything else, this contract will be covered by the Treaty. [6]

1.2. Sale Contracts Not Covered by the Treaty

Article 2 of the Treaty establishes that the Treaty will not apply to the sale contracts. Here, briefly, explanations will be made on this subject.

?a) auction sales

CISG m. The Treaty does not apply to sales contracts made by auction in accordance with subparagraph (b) of 2. In the area of application of the Treaty, the reasons for the auctions to be set as an exception are that the auctions are conducted locally and rarely cross-border in the period when the Treaty was prepared. However, in the doctrine, it is now stated that this situation has changed and that the Treaty should be allowed to be applied in terms of cross-border electronic auctions. [7]On the other hand, according to another view, the choice made with the aforementioned provision of the Treaty is correct; this preference is based on the fact that the seller does not know the buyer in advance.

b) on execution or otherwise by authority of law;

The sales made through forced execution in accordance with subparagraph (c) of the same article and the sales made pursuant to other laws do not fall within the scope of application of the Treaty. Because, through forced enforcement, sales are generally subject to special and mandatory regulations and there is usually no possibility for the buyer to discuss the terms of the contract.

c) of stocks, shares, investment securities, negotiable instruments or

money;

Apart from these, CISG m. The sale of securities and foreign exchange notes in accordance with subparagraph (d) of 2 is excluded from the scope of the Treaty. ?Therefore, the sale of negotiable instruments such as stocks, bills, bills, checks, checks - does not represent any property - they do not fall within the scope of application of the Treaty. On the other hand, it is accepted that the bills representing a commodity such as a bill of lading or commodity are covered by the Treaty. It can be said that a treaty with a non-therapeutic, historical or artistic value has become a movable commodity and entered into the area of application of the Treaty. [8]

d) ships, vessels, hovercraft or aircraft;

The Treaty shall not apply to the sale of ships, boats, air cushioned vehicles and aircraft in accordance with subparagraph (e) of the said article. The basis of this rule lies in the fact that the assessment of these vehicles as movable or immovable, whether it is necessary to be registered in a register or not from country to country. The aforementioned regulation was criticized for providing a lump sum prohibition regardless of whether the ships and aircraft were being driven by their size, tonnage, motor or wind power, whether it would be used in inland waters or offshore. , canoe, paddle-pedal boats, sports / entertainment / research or similar purposes for the use of vehicles such as gliders could be found in the application area of treaty.

e) electricity

Electricity sale contracts pursuant to subparagraph (f) 2 are also outside the scope of the Treaty. The main reason for this exception is the lack of consensus on the legal nature of electricity - particularly whether it is a material asset. The fact that the international electricity sales contracts contain very detailed provisions makes the implementation of the Treaty unnecessary and is put forward as the justification of the said provision. This provision is not widely interpreted, and it is not accepted that gas, oil and similar energy substances are outside the scope of the Treaty.

1.3. Contracts that do not fall within the scope of the agreement in terms of quality

?????????In Article 3 of CISG, two different elements have been added to the concept of sale contract which is generally accepted in national laws. These elements are to be “produced or manufactured” in paragraph 1, the goods will be produced and “the labor force or another service” in paragraph 2 is to take place together with the delivery of goods. While the sale contract which includes the provision of material and the seller's obligation to provide the workforce is considered to be within the scope of the Treaty, it is stated that if these obligations exceed the obligation of supply, the contract can no longer be considered as a sale. These two issues are discussed in two separate headings below.

a. Procurement of Ordered Goods

?????????First of all, it is clear that if the contract constituted the subject of the contract at the time of the contract, the quality of the contract is the sale contract; no contract of work. When the contract is concluded, if the contract is not available, the contract can be named as the sale of the future goods in case the production is carried out in series with the material of the contractor when the contract is considered to exist. It is claimed that the existence of the contract will be easily accepted if the contract will be constructed with the material provided by the person who ordered it and especially if the contract is not present at the time of delivery.

CISG m. 3 / f. 1 provision is as follows:?Contracts for the supply of goods to be manufactured or produced

are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. [9]

?????????As it is seen in the Treaty, the labor that the seller will spend at the production stage has not been evaluated, the weight of the material provided by the buyer is compared with the order itself.

In this arrangement, in principle, contracts for the sale of the goods to be manufactured or to be manufactured are accepted and exceptionally, if the material provided by the ordering party constitutes a substantial part of the material necessary for the production or production, it has determined that the contract which provides such an act is not within the scope of the Treaty. Indeed, if a substantial portion of the material is supplied by the buyer, the role of the party receiving the order becomes rather the installation of materials, so it is not possible to speak of a sale contract in the classic sense. The authors of the Treaty considered that the obligation of the producer in this case was to provide more workforce and in the typical sense could not be mentioned about the obligations of a seller as defined by Article 30 of the Treaty [10]

Here, it is important to determine the conditions under which the material supplied by the ordering party will form a substantial part of the material required for production or production. The Treaty remained silent in this respect. [11]

The Treaty Advisory Council (Council) states that the economic value criterion should be taken as the basis for the determination of the core criterion, and that the value of the materials is the value at the date when the contract is concluded unless otherwise stated in the contract.

In the teaching, various views have been put forward in this regard. According to an opinion, whether or not the material supplied by the ordering party is based on the percentage of the contract that is provided by the contractual subject, the voices of this opinion have also increased.?In accordance with the aforementioned opinion, it can be argued that, for example, if the value of what is provided by the buyer is more than 40% of the total value of the contract, it should not be in the area of application of the Treaty.

In accordance with another aspect, each case must be individually assessed according to the nature of each event.?In addition, the Council participates in this final view as part of the economic value criterion. However, according to the Council, it is necessary to refer to the criteria of material importance (essential) in terms of contract where it is not possible or appropriate to base the economic value criterion.

If the seller commits to deliver an industrial installation material and establish the facility, the buyer's indication of the land to be installed is not considered within the scope of this article.

?

b) Contracts with mixed nature

The parties may sometimes foresee the provision of a workforce, such as assembly, advertising or training, as well as the delivery of the goods, or the provision of other services. In this case, if the workforce or service provided in the presence of a mixed contract constitutes the weighted part of the performance, the Treaty shall not be applying. Indeed, Article 3 (2) of the Treaty provides: 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 labor or other services. [12]

This provision of the treaty should not be understood as it is not possible to manufacture the goods on the order. In other words, the goods CISG m. 3 / f. The act of production in the sense of 1 is not considered as a labor in the sense of paragraph 2 of the same article.

c) Consumer Contracts

In accordance with the subparagraph (a) of CISG 2, the Treaty does not apply to contracts referred to as consumer contracts. Here, the purpose of the sale of goods and the parties are not looked at whether the merchant [13] In the face of the fact that many countries regulate consumer sales with special and mandatory rules, this choice of the Treaty is seen in place.?It is not just what the person buys for his own use, but also the sales contracts he makes for the goods he receives for his family and those outside his business relationship. The provisions of the Treaty shall apply to disputes arising out of the sale contracts to be purchased for an office, such as kitchen appliances, gift packages, etc.

An additional provision is stipulated in the aforesaid provision for the application of this rule, namely the adoption of a contract for the purchase of goods for personal or family needs or household needs outside the scope of the Treaty. The goods must be known or known to the seller for the specified use before or during the conclusion of the contract. If the seller lacks this information about the intended use and does not need to know the intended use, the Treaty will find the application area.[14] In a decision of the Cologne Court, it was concluded that although the buyer used the car he purchased for his personal needs, the seller knew that the buyer was trading the car and that he did not think that he bought it for personal use. That caused applying Treaty to this case.?The subsequent use of the goods purchased by the buyer does not affect the application of the provision. For example, if the buyer uses the goods that he / she buys for personal use for a commercial purpose, CISG application area will not be found.

2.???The Effects of the Parties on the Implementation of CISG

The parties may expressly agree to the application of CISG in the sales contract. In the event that the parties place a provision in the contract of sale, subject to the contract of CISG, the provisions of CISG may not apply as a country's elected law, can be applied as contractual terms of contract between parties.

????Some jurisdictions have prevented the selection of the law to be applied if a foreign element is found in the conflict. The less liberal legal systems seek to ensure that the chosen law is a law that is related to the place of contract. For this reason, the parties may choose the law of a State which implemented CISG officially.

????In accordance with the CISG article 6 the parties may exclude the application of the Treaty in whole or in part. Provision of CISG not applicable to the sale contract will be sufficient. The authority to determine whether to apply CISG as the basis of priority belongs to the parties. CISG includes guidelines for implementation in terms of location and subject. These rules serve as a reserve law rule. No provision shall be made between the parties unless otherwise stated.

3.???Jurisdiction of CISG according to place

Both the application area and the applicability requirements of the contract are arranged in CISG in article 1. CISG is directly applied if the workplaces of the parties are in the States Parties to the Treaty. Two conditions must be met for the rule of direct implementation. Both parties should have different countries where the workplaces are located, and these two countries should be CISG parties. The party requesting that the CISG not be implemented must prove that these two conditions are not exist. In addition, this binding is only for the courts of the States Parties to the Treaty. A court of country that is not a party to the Treaty does not have to implement the CISG. The workplace should be the counterpart of the sales contract obligations and should make independent decisions. Must be an organization with continuity. Temporary places without continuity are not considered workplace. This continuity should include the business relationship between the parties.[15]

Determination of whether the workplaces of the parties are in different states is determined by the situation at the time of signing the contract. The change of workplace after the contract is signed will not bind the other party in terms of the implementation of CISG. In order to prevent such confusion, the parties should clarify with the article what the workplace is in the contract.

Conclusion

The laws of states regulating the trade and obligations law contain different provisions. This is one of the most important obstacles to the development of international trade. The reason for this is the mistrust of the parties due to the fact that they do not know which legal order will be subject to the conflict between them. The authors of the agreement aimed to reduce the need to seek research and conflict of laws rules for finding the state with the most appropriate law. For this purpose, CISG is a text of laws that includes material rules specifically prepared for international sale contracts where the workplaces of the parties are in different countries. CISG has a feature that is consistent with the development of international commercial practices, which are constantly enriched by the multiplicity of the rules of material law concerning the most basic contract of trade, the increase of doctrine interpretation and judicial practices. This development will make CISG a common legal system that will grow on the basis of case law. The comprehensive case-law of the treaty, which is widely accepted and enforced throughout the world, has transformed the CISG into a dynamic text. CISG offers a uniform, impartial and easy-to-understand legal text to all parties.

Ilkin Rustamov

[1] (DUCA 1995/27, )

[2] (United Nations Convention on Contracts for the International Sale of Goods 1 January 1988)

[3] (HONNOLD 1979)

[4] (SCHLECHTRIEM 2008)

[5] (HUBER 2007)

[6] (HONNOLD 1979)

[7] (Peter SCHLECHTRIEM 2005)

[8] (Peter SCHLECHTRIEM 2005)

[9] (United Nations Convention on Contracts for the International Sale of Goods, 1 January 1988)

[10] (Bruno 2007)

[11] (NEUMAYER Karl H./ MING Catherine 1993)

[12] (United Nations Convention on Contracts for the International Sale of Goods, 1 January 1988)

[13] (HEUZé 2000)

[14] (OLG Düsseldorf 8 january 1993, https://cisgw.law.pace.edu/cases/930108gl.html.?)

[15] (TUNC 1981)

Bibliography

Bruno, ZELLER. 2007. CISG and the Unification of International Trade Law, . New York.

DUCA, Louis F. DEL DUCA/Patrick DEL. 1995/27, . Practice Under the Convention on International Sale of Goods/A Primer for Attorneys and International Traders/ Uniform Commercial Code Law Journal,. 350-351.

United Nations Convention on Contracts for the International Sale of Goods. 1 January 1988. https://www.uncitral.org/pdf/english/texts/sales/cisg/V1056997-CISG-e-book.pdf.

HEUZé, Vincent. 2000. La vente internationale de marchandises- Droit uniforme,. Paris.

HONNOLD, John. 1979. “The Draft Convention on Contracts for the International Sale of Goods: An Overview”,.

HUBER, Peter / MULLIS, Alastair,. 2007. The CISG, a new textbook for students and practitioners.

Kr?ll/Mistelis/Viscasillas, a.g.e., s. 750, a.g.e., s. 554 Djordjevi?, ve a.g.e., s. 255 Huber/Mullis. tarih yok.

NEUMAYER Karl H./ MING Catherine. 1993. Convention de Vienne sur les contrats de vente internationale de marchandises.

OLG Düsseldorf. 8 january 1993,. https://cisgw.law.pace.edu/cases/930108gl.html. .

Peter SCHLECHTRIEM. 2005. Application and Sphere of Applicability of the CISG, . Requirements of Victoria University of Wellington Law Review,.

SCHLECHTRIEM, Peter. 2008. WITZ, Claude, Convention de Vienne sur les contrats de vente internationale de marchandises, . Paris.

TUNC, André: “,. 1981. Les ventes internationales de marchandises”, Colloque de la Fondation Internationale pour l’Enseignement du Droit des Affaires, Faculté de Droit d’Aixen Provence. Paris.

VOLKEN, Paul: The Vienna Convention: Scope, Interpretation, and Gap-filling, International Sale of Goods: Dubrovnik Lectures, ed: Petar Sarcevic/Paul Volken, Oceana Publications, Oceana 1986.

WINSHIP, Peter: An Introduction to the United Nations Sales Convention, Consumer Finance Law Quarterly Report, 1989/43, <https://www.cisg.law.pace. edu/cisg/biblio/winship2.html>.).

Contents

Analysis of Issues related to the Sphere of Application of the United Nations Convention On Contracts for the International Sale of Goods (CISG) 2

1.?Sphere of Application CISG.. 3

1.1. Sales Contract Concept 4

1.2. Sale Contracts Not Covered by the Treaty. 5

1.3. Contracts that do not fall within the scope of the agreement in terms of quality. 7

2.?The Effects of the Parties on the Implementation of CISG.. 11

3.?Jurisdiction of CISG according to place. 12