(CISG) United Nations Convention on Contracts for the International Sale of Goods

Contents

United Nations Convention on Contracts for the International Sale of Goods

PREAMBLE

Part I. Sphere of application and general provisions

CHAPTER I. Sphere of application

Article ۱ – ۶

CHAPTER II.  General provisions

Article ۷ – ۱۳

Part II. Formation of the contract

Article ۱۴ – ۲۴

Part III. Sale of goods

CHAPTER I.  General provisions

Article ۲۵ – ۲۹

CHAPTER II.  Obligations of the seller

Article ۳۰

Section I.  Delivery of the goods and handing over of documents

Article ۳۱ – ۳۴

Section II. Conformity of the goods and third-party claims

Article ۳۵ – ۴۴

Section III. Remedies for breach of contract by the seller

Article ۴۵ – ۵۲

CHAPTER III. Obligations of the buyer

Article ۵۳

Section I. Payment of the price

Article ۵۴ – ۵۹

Section II. Taking delivery

Article ۶۰

Section III. Remedies for breach of contract by the buyer

Article ۶۱ – ۶۵

CHAPTER IV. Passing of risk

Article ۶۶ - ۷۰

CHAPTER V. Provisions common to the obligations of the seller and of the buyer

Section I. Anticipatory breach and instalment contracts

Article ۷۱ – ۷۳

Section II. Damages

Article ۷۴ - ۷۷

Section III. Interest

Article ۷۸

Section IV. Exemptions

Article ۷۹ - ۸۰

Section V. Effects of avoidance

Article ۸۱ - ۸۴

Section VI. Preservation of the goods

Article ۸۵ – ۸۸

Part IV. Final  provisions

Article ۸۹ - ۱۰۱

explanatory note by the UNCITRAL Secretariat on the United Nations Convention on Contracts for the International Sale of Goods

Introduction

Part one. Scope of application and general provisions

1. Scope of application
2. Party autonomy
3. Interpretation of the Convention
4. Interpretation of the contract; usages
5. Form of the contract

Part two. Formation of the contract

Part three. Sale of goods

1. Obligations of the selle
2. Obligations of the buyer
3. Remedies for breach of contract
4. Passing of risk
5. Suspension of performance and anticipatory breach
6. Exemption from liability to pay damages
7. Preservation of the goods

Part Four. Final clauses

Complementary texts

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1. United Nations Convention on Contracts for the International Sale of Goods

PREAMBLE

The States Parties to this Convention,

Bearing in mind the broad objectives in the resolutions adopted by the sixth special session of the General Assembly of the United Nations on the establishment of a New International Economic Order,

Considering that the development of international trade on the basis of equality and mutual benefit is an important element in promoting friendly relations among States,

Being of the opinion that the adoption of uniform rules which govern contracts  for  the  international  sale  of  goods  and  take  into  account  the  different social, economic and legal systems would contribute to the  removal of  legal  barriers  in  international  trade  and  promote  the  development  of  international trade,

Have agreed as follows:

Part I. Sphere of application and general provisions

CHAPTER I. SPHERE OF APPLICATION

Article 1

(۱)  This  Convention  applies  to  contracts  of  sale  of  goods  between parties whose places of business are in different States:

• when the States are Contracting States; or
• when the rules of private international law lead to the application of the law of a Contracting State.

• 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.
• 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

This Convention does not apply to sales:

• 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;
• by auction;
• on execution or otherwise by authority of law;
• of stocks, shares, investment securities, negotiable instruments or money;
• of ships, vessels, hovercraft or aircraft;   (f)  of electricity.

Article 3

• 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.
• 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.

Article 4

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:

• the  validity  of  the  contract or of any of its provisions or of any usage;
• the  effect  which  the  contract  may  have  on  the  property  in  the goods sold.

Article 5

This Convention does not apply to the liability of the seller for death or personal injury caused by the goods to any person.

Article 6

The parties may exclude the application of this Convention or, subject to article ۱۲, derogate from or vary the effect of any of its provisions.

CHAPTER II. GENERAL PROVISIONS

Article 7

• 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.
• 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.

Article 8

• 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.
• 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.
• 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.

Article 9

• 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.

Article 10

For the purposes of this Convention:

• if a party has more than one place of business, the place of  business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract;
• if  a  party  does  not  have  a  place  of  business,  reference  is  to  be made to his habitual residence.

Article 11

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 12

Any provision of article ۱۱, article ۲۹ or Part II of this Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of  business in a Contracting State which has made a declaration under article ۹۶ of this Convention. The  parties  may  not  derogate  from  or  vary  the  effect  of  this article.

Article 13

For  the  purposes  of  this  Convention  “writing”  includes  telegram  and telex.

Part II. Formation of the contract

Article 14

• 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.
• 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

• An offer becomes effective when it reaches the offeree.
• 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

• Until a contract is concluded an offer may be revoked if the  revocation reaches the offeree before he has dispatched an acceptance.
• However, an offer cannot be revoked:
• if  it  indicates,  whether  by  stating  a  fixed  time  for  acceptance  or otherwise, that it is irrevocable; or
• 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.

Article 17

An offer, even if it is irrevocable, is terminated when a rejection reaches the offeror.

Article 18

• 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.
• An  acceptance  of  an  offer  becomes  effective  at  the  moment  the indication of assent reaches the offeror. 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. An  oral  offer  must  be  accepted immediately unless the circumstances indicate otherwise.
• 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.

Article 19

• 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.
• 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.
• 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.

Article 20

• A period of time for acceptance fixed by the offeror in a telegram or a letter begins to run from the moment the telegram is handed in for  dispatch or from the date shown on the letter or, if no such date is shown, from the date  shown  on  the  envelope. A  period  of  time  for  acceptance  fixed  by  the offeror by telephone, telex or other means of instantaneous  communication, begins to run from the moment that the offer reaches the offeree.
• Official  holidays  or  non-business  days  occurring  during  the  period for acceptance are included in calculating the period. However, if a notice of acceptance cannot be delivered at the address of the offeror on the last day of the period because that day falls on an official holiday or a  non-business day at the place of business of the offeror, the period is  extended until the first business day which follows.

Article 21

• 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.
• 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.

Article 22

An acceptance may be withdrawn if the withdrawal reaches the  offeror before or at the same time as the acceptance would have become effective.

Article 23

A contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention.

Article 24

For  the  purposes  of  this  Part  of  the  Convention,  an  offer,  declaration of acceptance or any other indication of intention “reaches” the addressee when  it is made  orally to  him or  delivered  by  any other means to him  personally,  to  his  place  of  business  or  mailing  address  or,  if  he  does  not have a place of business or mailing address, to his habitual residence.

Part III. Sale of goods

CHAPTER I. GENERAL PROVISIONS

Article 25

A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.

Article 26

A declaration of avoidance of the contract is effective only if made by notice to the other party.

Article 27

Unless  otherwise  expressly  provided  in  this  Part  of  the  Convention,  if any notice, request or other communication is given or made by a party in accordance with this Part and by means appropriate in the circumstances, a delay or error in the transmission of the communication or its failure to arrive does not deprive that party of the right to rely on the communication.

Article 28

If, in accordance with the provisions of this Convention, one party is entitled to require performance of any obligation by the other party, a court is not bound to enter a judgement for specific performance unless the court would do so under its own law in respect of similar contracts of sale not governed by this Convention.

Article 29

• A contract may be modified or terminated by the mere agreement of the parties.
• A contract  in writing which  contains  a  provision requiring any modification  or  termination  by  agreement  to  be  in  writing  may  not  be  otherwise modified or terminated by agreement. However, a party may be precluded by his conduct from asserting such a provision to the extent that the other party has relied on that conduct.

  CHAPTER II. OBLIGATIONS OF THE SELLER

Article 30

The seller must deliver the goods, hand over any documents relating to them and transfer the property in the goods, as required by the contract and this Convention.

Section I. Delivery of the goods and handing over of documents

Article 31

If the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists:

• if the contract of sale involves carriage of the goods—in handing the goods over to the first carrier for transmission to the buyer;
• if, in cases not within the preceding subparagraph, the contract relates to specific goods, or unidentified goods to be drawn from a specific stock or to  be  manufactured  or  produced,  and  at  the  time  of  the  conclusion  of  the contract the parties knew that the goods were at, or were to be  manufactured or produced at, a particular place—in placing the goods at the buyer’s disposal at that place;
• in other cases—in placing the goods at the buyer’s disposal at the place where the seller had his place of business at the time of the  conclusion of the contract.

Article 32

(۱)  If  the  seller,  in  accordance  with  the  contract  or  this  Convention, hands the goods over to a carrier and if the goods are not clearly identified to  the  contract  by  markings  on  the  goods,  by  shipping  documents  or  otherwise, the seller must give the buyer notice of the consignment  specifying the goods.

 

If the seller is bound to arrange for carriage of the goods, he must make such contracts as are necessary for carriage to the place fixed by means of transportation appropriate in the circumstances and according to the usual terms for such transportation.

(۳)  If  the  seller  is  not  bound  to  effect  insurance  in  respect  of  the  carriage of the goods, he must, at the buyer’s request, provide him with all available information necessary to enable him to effect such insurance.

Article 33

The seller must deliver the goods:

(a)  if a date is fixed by or determinable from the contract, on that date;   (b)  if a period of time is fixed by or determinable from the contract, at any time within that period unless circumstances indicate that the buyer is to choose a date; or

(c)  in any other case, within a reasonable time after the conclusion of the contract.

Article 34

If the seller is bound to hand over documents relating to the goods, he must hand them over at the time and place and in the form required by the contract. If the seller has handed over documents before that time, he may, up to that time, cure any lack of conformity in the documents, if the exercise of  this  right  does  not  cause  the  buyer  unreasonable  inconvenience  or  unreasonable expense. However, the buyer retains any right to claim  damages as provided for in this Convention.

Section II.  Conformity of the goods and third-party claims

Article 35

• The  seller  must  deliver  goods  which  are  of  the  quantity,  quality and description required by the contract and which are contained or  packaged in the manner required by the contract.
• Except where the parties have agreed otherwise, the goods do not conform with the contract unless they:
• are  fit  for  the  purposes  for  which  goods  of  the  same  description would ordinarily be used;
• are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller’s skill and judgement;
• possess the qualities of goods which the seller has held out to the buyer as a sample or model;
• are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods.

(۳)  The  seller  is  not  liable  under  subparagraphs (a) to  (d) of  the  preceding paragraph for any lack of conformity of the goods if, at the time of the conclusion of the contract, the buyer knew or could not have been unaware of such lack of conformity.

Article 36

• The  seller  is  liable  in  accordance  with  the  contract  and  this  Convention for any lack of conformity which exists at the time when the risk passes to the buyer, even though the lack of conformity becomes  apparent only after that time.
• The  seller  is  also  liable  for  any  lack  of  conformity  which  occurs after  the  time  indicated  in  the  preceding  paragraph  and  which  is  due  to  a breach of any of his obligations, including a breach of any guarantee that for a period of time the goods will remain fit for their ordinary purpose or for some particular purpose or will retain specified qualities or characteristics.

Article 37

If the seller has delivered goods before the date for delivery, he may, up to that date, deliver any missing part or make up any deficiency in the quantity of the goods delivered, or deliver goods in replacement of any  non-conforming goods  delivered  or  remedy  any  lack  of  conformity  in  the  goods  delivered, provided that the exercise of this right does not cause the buyer unreasonable inconvenience or unreasonable expense. However, the buyer retains any right to claim damages as provided for in this Convention.

Article 38

(۱)  The buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances.

If the contract involves carriage of the goods, examination may be deferred until after the goods have arrived at their destination.

(۳)  If the goods are redirected in transit or redispatched by the buyer without a reasonable opportunity for examination by him and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch, examination may be deferred until after the goods have arrived at the new destination.

Article 39

• The  buyer  loses  the  right  to  rely  on  a  lack  of  conformity  of  the goods if he does not give notice to the seller specifying the nature of the lack  of  conformity  within  a  reasonable  time  after  he  has  discovered  it  or ought to have discovered it.
• In any event, the buyer loses the right to rely on a lack of  conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over  to  the  buyer,  unless  this  time  limit  is  inconsistent  with  a  contractual period of guarantee.

Article 40

The seller is not entitled to rely on the provisions of articles ۳۸ and ۳۹ if  the  lack  of  conformity  relates  to  facts  of  which  he  knew  or  could  not have been unaware and which he did not disclose to the buyer.

Article 41

The seller must deliver goods which are free from any right or claim of a third party, unless the buyer agreed to take the goods subject to that right or claim. However, if such right or claim is based on industrial property or other intellectual property, the seller’s obligation is governed by article ۴۲.

Article 42

(۱)  The  seller  must  deliver  goods  which  are  free  from  any  right  or claim  of  a  third  party  based  on  industrial  property  or  other  intellectual  property, of which at the time of the conclusion of the contract the seller knew or could not have been unaware, provided that the right or claim is based on industrial property or other intellectual property:

• under the  law  of  the State  where the  goods  will  be  resold  or  otherwise  used,  if  it  was  contemplated  by  the  parties  at  the  time  of  the conclusion of the contract that the goods would be resold or otherwise used in that State; or
• in any other case, under the law of the State where the buyer has his place of business.

(۲)  The  obligation  of  the  seller  under  the  preceding  paragraph  does not extend to cases where:

• at  the  time  of  the  conclusion  of  the  contract  the  buyer  knew  or could not have been unaware of the right or claim; or
• the right or claim results from the seller’s compliance with  technical drawings, designs, formulae or other such specifications furnished by the buyer.

Article 43

• The buyer loses the right to rely on the provisions of article ۴۱ or article ۴۲ if he does not give notice to the seller specifying the nature of the right or claim of the third party within a reasonable time after he has become aware or ought to have become aware of the right or claim.
• The seller is not entitled to rely on the provisions of the preceding paragraph if he knew of the right or claim of the third party and the nature of it.

Article 44

Notwithstanding  the  provisions  of  paragraph  (۱)  of  article  ۳۹  and  paragraph  (۱)  of  article  ۴۳,  the  buyer  may  reduce  the  price  in  accordance with  article  ۵۰  or  claim  damages,  except  for  loss  of  profit,  if  he  has  a  reasonable excuse for his failure to give the required notice.

       Section III. Remedies for breach of contract by the seller

Article 45

(۱)  If  the  seller  fails  to  perform  any  of  his  obligations  under  the  contract or this Convention, the buyer may:

(a)  exercise the rights provided in articles ۴۶ to ۵۲;     (b)  claim damages as provided in articles 74 to ۷۷.

The  buyer  is  not  deprived  of  any right  he may  have  to  claim  damages by exercising his right to other remedies.

(۳)  No period of grace may be granted to the seller by a court or arbitral tribunal when the buyer resorts to a remedy for breach of contract.

Article 46

• The buyer may require performance by the seller of his obligations unless  the  buyer  has  resorted  to  a  remedy  which  is  inconsistent  with  this requirement.
• If  the  goods  do  not  conform  with  the  contract,  the  buyer  may  require delivery of substitute goods only if the lack of conformity constitutes a fundamental breach of contract and a request for substitute goods is made either in conjunction with notice given under article ۳۹ or within a  reasonable time thereafter.
• If the goods do not conform with the contract, the buyer may  require the seller to remedy the lack of conformity by repair, unless this is  unreasonable having  regard  to  all  the  circumstances. A  request  for  repair  must  be  made either in conjunction with notice given under article ۳۹ or within a reasonable time thereafter.

Article 47

• The buyer may fix an additional period of time of reasonable length for performance by the seller of his obligations.
• Unless the buyer has received notice from the seller that he will not  perform  within  the  period  so  fixed,  the  buyer  may  not,  during  that period, resort to any remedy for breach of contract. However, the buyer is not  deprived thereby of any right he may have to claim damages for delay in performance.

Article 48

• Subject to article ۴۹, the seller may, even after the date for delivery, remedy at his own expense any failure to perform his obligations, if he can do so without unreasonable delay and without causing the buyer  unreasonable inconvenience  or  uncertainty  of  reimbursement by  the  seller  of  expenses advanced by the buyer. However, the buyer retains any right to claim  damages as provided for in this Convention.
• If  the  seller  requests  the  buyer  to  make  known  whether  he  will accept performance and the buyer does not comply with the request within a reasonable time, the seller may perform within the time indicated in his request. The buyer may not, during that period of time, resort to any remedy which is inconsistent with performance by the seller.
• A notice by the seller that he will perform within a specified period of time is assumed to include a request, under the preceding paragraph, that the buyer make known his decision.
• A request or notice by the seller under paragraph (۲) or (۳) of this article is not effective unless received by the buyer.

Article 49

(۱)  The buyer may declare the contract avoided:

• if the failure by the seller to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or
• in  case  of  non-delivery,  if  the  seller  does  not  deliver  the  goods within the additional period of time fixed by the buyer in accordance with paragraph  (۱)  of  article  ۴۷  or  declares  that  he  will  not  deliver  within  the period so fixed.

(۲)  However,  in  cases  where  the  seller  has  delivered  the  goods,  the buyer loses the right to declare the contract avoided unless he does so:

• in  respect  of  late  delivery,  within  a  reasonable  time  after  he  has become aware that delivery has been made;
• in respect of any breach other than late delivery, within a  reasonable time:

(i)       after he knew or ought to have known of the breach;

( ii)  after the expiration of any additional period of time fixed by the buyer in accordance with paragraph (۱) of article ۴۷, or after the seller has  declared  that  he  will  not  perform  his  obligations  within  such  an additional period; or

(iii)  after the expiration of any additional period of time indicated by the seller in accordance with paragraph (۲) of article ۴۸, or after the buyer has declared that he will not accept performance.

Article 50

If the goods do not conform with the contract and whether or not the price  has  already  been  paid,  the  buyer  may  reduce  the  price  in  the  same proportion as the value that the goods actually delivered had at the time of the  delivery  bears  to  the  value  that  conforming  goods  would  have  had  at that  time.  However,  if  the  seller  remedies  any  failure  to  perform  his  obligations in accordance with article ۳۷ or article ۴۸ or if the buyer refuses to  accept  performance  by  the  seller  in  accordance  with  those  articles,  the buyer may not reduce the price.

Article 51

• If the seller delivers only a part of the goods or if only a part of the goods delivered is in conformity with the contract, articles ۴۶ to ۵۰  apply  in  respect  of  the  part  which  is  missing  or  which  does  not conform.
• The buyer may declare the contract avoided in its entirety only if the failure to make delivery completely or in conformity with the contract amounts to a fundamental breach of the contract.

Article 52

• If the seller delivers the goods before the date fixed, the buyer may take delivery or refuse to take delivery.
• If the seller delivers a quantity of goods greater than that provided for in the contract, the buyer may take delivery or refuse to take delivery of the excess quantity. If the buyer takes delivery of all or part of the excess quantity, he must pay for it at the contract rate.

CHAPTER III. OBLIGATIONS OF THE BUYER

Article 53

The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.

Section I. Payment of the price

Article 54

The buyer’s obligation to pay the price includes taking such steps and complying with such formalities as may be required under the contract or any laws and regulations to enable payment to be made.

Article 55

Where a contract has been validly concluded but does not expressly or implicitly  fix  or  make  provision  for  determining  the  price,  the  parties  are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.

Article 56

If the price is fixed according to the weight of the goods, in case of doubt it is to be determined by the net weight.

Article 57

(۱)  If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller:

• at the seller’s place of business; or
• if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place.

(۲)  The  seller  must  bear  any  increase  in  the  expenses  incidental  to payment which is caused by a change in his place of business subsequent to the conclusion of the contract.

Article 58

• If  the  buyer  is  not  bound  to  pay  the  price  at  any  other  specific time, he must pay it when the seller places either the goods or documents controlling their disposition at the buyer’s disposal in accordance with the contract and this Convention. The seller may make such payment a condition for handing over the goods or documents.
• If  the  contract  involves  carriage  of  the  goods,  the  seller  may  dispatch the goods on terms whereby the goods, or documents controlling their disposition, will not be handed over to the buyer except against  payment of the price.
• The  buyer  is  not  bound  to  pay  the  price  until  he  has  had  an  opportunity  to  examine  the  goods,  unless  the  procedures  for  delivery  or payment agreed upon by the parties are inconsistent with his having such an opportunity.

Article 59

The buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or  compliance with any formality on the part of the seller.

Section II. Taking delivery

Article 60

The buyer’s obligation to take delivery consists:

(a)  in doing all the acts which could reasonably be expected of him in order to enable the seller to make delivery; and   (b)  in taking over the goods.

       Section III. Remedies for breach of contract by the buyer

Article 61

(۱)  If  the  buyer  fails  to  perform  any  of  his  obligations  under  the  contract or this Convention, the seller may:

(a)  exercise the rights provided in articles ۶۲ to ۶۵;     (b)  claim damages as provided in articles ۷۴ to ۷۷.

• The  seller  is  not  deprived  of  any  right  he  may  have  to  claim  damages by exercising his right to other remedies.
• No period of grace may be granted to the buyer by a court or  arbitral tribunal when the seller resorts to a remedy for breach of contract.

Article 62

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

Article 63

• The seller may fix an additional period of time of reasonable length for performance by the buyer of his obligations.
• Unless the seller has received notice from the buyer that he will not perform within the period so fixed, the seller may not, during that period, resort  to  any  remedy  for  breach  of  contract.  However,  the  seller  is  not  deprived thereby of any right he may have to claim damages for delay in performance.

Article 64

(۱)  The seller may declare the contract avoided:

• if the failure by the buyer to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or
• if the buyer does not, within the additional period of time fixed by the  seller  in  accordance  with  paragraph  (۱)  of  article  ۶۳,  perform  his  obligation to pay the price or take delivery of the goods, or if he declares that he will not do so within the period so fixed.

(۲)  However,  in  cases  where  the  buyer  has  paid  the  price,  the  seller loses the right to declare the contract avoided unless he does so:

• in respect of late performance by the buyer, before the seller has become aware that performance has been rendered; or
• in respect of any breach other than late performance by the buyer, within a reasonable time:
• after the seller knew or ought to have known of the breach; or
• after the expiration of any additional period of time fixed by the seller in accordance with paragraph (۱) of article ۶۳, or after the buyer has declared that he will not perform his obligations within such an additional period.

Article 65

• If under the contract the buyer is to specify the form, measurement or other features of the goods and he fails to make such specification either on the date agreed upon or within a reasonable time after receipt of a request from the seller, the seller may, without prejudice to any other rights he may have, make the specification himself in accordance with the requirements of the buyer that may be known to him.
• If the seller makes the specification himself, he must inform the buyer of the details thereof and must fix a reasonable time within which the buyer may make a different specification. If, after receipt of such a  communication, the buyer fails to do so within the time so fixed, the  specification made by the seller is binding.

CHAPTER IV. PASSING OF RISK

Article 66

Loss of or damage to the goods after the risk has passed to the buyer does not discharge him from his obligation to pay the price, unless the loss or damage is due to an act or omission of the seller.

Article 67

• If the contract of sale involves carriage of the goods and the seller is not bound to hand them over at a particular place, the risk passes to the buyer when the goods are handed over to the first carrier for transmission to the buyer in accordance with the contract of sale. If the seller is bound to hand the goods over to a carrier at a particular place, the risk does not pass to the buyer until the goods are handed over to the carrier at that place. The  fact  that  the  seller  is  authorized  to  retain  documents  controlling  the disposition of the goods does not affect the passage of the risk.
• Nevertheless, the risk does not pass to the buyer until the goods are clearly identified to the contract, whether by markings on the goods, by shipping documents, by notice given to the buyer or otherwise.

Article 68

The risk in respect of goods sold in transit passes to the buyer from the time of the conclusion of the contract. However, if the circumstances so indicate, the risk is assumed by the buyer from the time the goods were handed over to the  carrier  who  issued  the  documents  embodying  the  contract  of  carriage.  Nevertheless, if at the time of the conclusion of the contract of sale the seller knew or ought to have known that the goods had been lost or damaged and did not disclose this to the buyer, the loss or damage is at the risk of the seller.

Article 69

• In cases not within articles ۶۷ and ۶۸, the risk passes to the buyer when he takes over the goods or, if he does not do so in due time, from the time when the goods are placed at his disposal and he commits a breach of contract by failing to take delivery.
• However, if the buyer is bound to take over the goods at a place other than a place of business of the seller, the risk passes when delivery is due  and  the  buyer  is  aware  of  the  fact  that  the  goods  are  placed  at  his  disposal at that place.
• If the contract relates to goods not then identified, the goods are considered not to be placed at the disposal of the buyer until they are clearly identified to the contract.

Article 70

If the seller has committed a fundamental breach of contract, articles ۶۷, ۶۸ and ۶۹ do not impair the remedies available to the buyer on account of the breach.

CHAPTER V. PROVISIONS COMMON TO THE OBLIGATIONS OF THE SELLER AND OF THE BUYER

Section I. Anticipatory breach and instalment contracts

Article 71

(۱)  A party may suspend the performance of his obligations if, after the conclusion of the contract, it becomes apparent that the other party will not perform a substantial part of his obligations as a result of:

• a  serious  deficiency  in  his  ability  to  perform  or  in his  creditworthiness; or
• his  conduct  in  preparing  to  perform  or  in  performing  the contract.
• If  the  seller  has  already  dispatched  the  goods  before  the  grounds described  in  the  preceding  paragraph  become  evident,  he  may  prevent  the handing over of the goods to the buyer even though the buyer holds a  document which entitles him to obtain them. The present paragraph relates only to the rights in the goods as between the buyer and the seller.
• A party suspending performance, whether before or after dispatch of the goods, must immediately give notice of the suspension to the other party and must continue with performance if the other party provides  adequate assurance of his performance.

Article 72

• If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided.
• If time allows, the party intending to declare the contract avoided must  give  reasonable  notice  to  the  other  party  in  order  to  permit  him  to provide adequate assurance of his performance.
• The requirements of the preceding paragraph do not apply if the other party has declared that he will not perform his obligations.

Article 73

• In the case of a contract for delivery of goods by instalments, if the failure of one party to perform any of his obligations in respect of any instalment constitutes a fundamental breach of contract with respect to that instalment, the other party may declare the contract avoided with respect to that instalment.
• If one party’s failure to perform any of his obligations in respect of  any  instalment  gives  the  other  party  good  grounds  to  conclude  that  a fundamental breach of contract will occur with respect to future instalments, he may declare the contract avoided for the future, provided that he does so within a reasonable time.
• A buyer who declares the contract avoided in respect of any  delivery may,  at  the  same  time,  declare  it  avoided  in  respect  of  deliveries  already made  or  of  future  deliveries  if,  by  reason  of  their  interdependence,  those deliveries could not be used for the purpose contemplated by the  parties at the time of the conclusion of the contract.

Section II. Damages

Article 74

Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of  the  breach.  Such  damages  may  not  exceed  the  loss  which  the  party  in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.

Article 75

If the contract is avoided and if, in a reasonable manner and within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods, the party claiming damages may recover the  difference  between  the  contract  price  and  the  price  in  the  substitute transaction as well as any further damages recoverable under article ۷۴.

Article 76

• If the contract is avoided and there is a current price for the goods, the  party  claiming  damages  may,  if  he  has  not  made  a  purchase  or  resale under article ۷۵, recover the difference between the price fixed by the  contract and the current price at the time of avoidance as well as any further damages recoverable  under  article  ۷۴.  If,  however,  the  party  claiming  damages  has avoided the contract after taking over the goods, the current price at the time of such taking over shall be applied instead of the current price at the time of avoidance.
• For the purposes of the preceding paragraph, the current price is the  price  prevailing  at  the  place  where  delivery  of  the  goods  should  have been  made  or,  if  there  is  no  current  price  at  that  place,  the  price  at  such other place as serves as a reasonable substitute, making due allowance for  differences in the cost of transporting the goods.

Article 77

A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If he fails to take such measures, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated.

Section III. Interest

Article 78

If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article ۷۴.

Section IV. Exemptions

Article 79

• 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.
• 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:
• he is exempt under the preceding paragraph; and
• the  person  whom  he  has  so  engaged  would  be  so  exempt  if  the provisions of that paragraph were applied to him.
• The  exemption  provided  by  this  article  has  effect  for  the  period during which the impediment exists.
• The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails  to  perform  knew  or  ought  to  have  known  of  the impediment,  he  is  liable for damages resulting from such non-receipt.
• Nothing  in  this  article prevents  either  party  from  exercising  any right other than to claim damages under this Convention.

Article 80

A party may not rely on a failure of the other party to perform, to the extent that such failure was caused by the first party’s act or omission.

Section V. Effects of avoidance

Article 81

• Avoidance of the contract releases both parties from their  obligations under  it,  subject  to  any  damages  which  may  be  due. Avoidance  does  not affect any provision of the contract for the settlement of disputes or any other provision of the contract governing the rights and obligations of the parties consequent upon the avoidance of the contract.
• A party who has performed the contract either wholly or in part may claim restitution from the other party of whatever the first party has supplied or paid under the contract. If both parties are bound to make  restitution, they must do so concurrently.

Article 82

• The  buyer  loses  the  right  to  declare  the  contract  avoided  or  to require the seller to deliver substitute goods if it is impossible for him to make  restitution  of  the  goods  substantially  in  the  condition  in  which  he received them.
• The preceding paragraph does not apply:
• if the impossibility of making restitution of the goods or of making restitution  of  the  goods  substantially  in  the  condition  in  which  the  buyer received them is not due to his act or omission;
• if the goods or part of the goods have perished or deteriorated as a result of the examination provided for in article ۳۸; or
• if  the  goods  or  part  of  the  goods  have  been  sold  in  the  normal course of business or have been consumed or transformed by the buyer in the course of normal use before he discovered or ought to have discovered the lack of conformity.

Article 83

A  buyer  who  has  lost  the  right  to  declare  the  contract  avoided  or  to require the seller to deliver substitute goods in accordance with article ۸۲ retains all other remedies under the contract and this Convention.

Article 84

• If the seller is bound to refund the price, he must also pay interest on it, from the date on which the price was paid.
• The buyer must account to the seller for all benefits which he has derived from the goods or part of them:

(a)  if he must make restitution of the goods or part of them; or   (b)  if  it  is  impossible  for  him  to  make  restitution  of  all  or  part  of the goods or to make restitution of all or part of the goods substantially in the condition in which he received them, but he has nevertheless  declared the contract avoided or required the seller to deliver substitute goods.

      Section VI. Preservation of the goods

Article 85

If  the  buyer  is  in  delay  in  taking  delivery  of  the  goods  or,  where  payment of the price and delivery of the goods are to be made concurrently, if  he  fails  to  pay  the  price,  and  the  seller  is  either  in  possession  of  the goods  or  otherwise  able  to  control  their  disposition,  the  seller  must  take such steps as are reasonable in the circumstances to preserve them. He is entitled to retain them until he has been reimbursed his reasonable expenses by the buyer.

Article 86

• If  the  buyer  has  received  the  goods  and  intends  to  exercise  any right under the contract or this Convention to reject them, he must take such steps to preserve them as are reasonable in the circumstances. He is entitled to retain them until he has been reimbursed his reasonable expenses by the seller.
• If goods dispatched to the buyer have been placed at his disposal at their destination and he exercises the right to reject them, he must take possession of them on behalf of the seller, provided that this can be done without  payment  of  the  price  and  without  unreasonable  inconvenience  or unreasonable expense. This provision does not apply if the seller or a person authorized  to  take  charge  of  the  goods  on  his  behalf  is  present  at  the  destination. If the buyer takes possession of the goods under this  paragraph, his rights and obligations are governed by the  preceding paragraph.

Article 87

A party who is bound to take steps to preserve the goods may deposit them  in  a  warehouse  of  a  third  person  at  the  expense  of  the  other  party provided that the expense incurred is not unreasonable.

Article 88

• A  party  who  is  bound  to  preserve  the  goods  in  accordance  with article ۸۵ or ۸۶ may sell them by any appropriate means if there has been an  unreasonable delay by the other party in taking possession of the goods or  in  taking  them  back  or  in  paying  the  price  or  the  cost  of  preservation, provided that reasonable notice of the intention to sell has been given to the other party.
• If the goods are subject to rapid deterioration or their preservation would involve  unreasonable  expense,  a  party  who  is  bound  to  preserve  the  goods  in accordance with article ۸۵ or ۸۶ must take reasonable measures to sell them. To the extent possible he must give notice to the other party of his intention to sell.
• A party selling the goods has the right to retain out of the proceeds of sale an amount equal to the reasonable expenses of preserving the goods and of selling them. He must account to the other party for the balance.

PART IV. FINAL PROVISIONS

Article 89

The  Secretary-General  of  the  United  Nations  is  hereby  designated  as the depositary for this Convention.

Article 90

This  Convention  does  not  prevail  over  any  international  agreement which has already been or may be entered into and which contains  provisions concerning the matters governed by this Convention, provided that the  parties have their places of business in States parties to such agreement.

Article 91

• This Convention is open for signature at the concluding meeting of the United Nations Conference on Contracts for the International Sale of Goods and will remain open for signature by all States at the Headquarters of the United Nations, New York until ۳۰ September ۱۹۸۱.
• This Convention is subject to ratification, acceptance or approval by the signatory States.
• This Convention is open for accession by all States which are not signatory States as from the date it is open for signature.
• Instruments of ratification, acceptance, approval and accession are to be deposited with the Secretary-General of the United Nations.

Article 92

• A Contracting State may declare at the time of signature,  ratification, acceptance, approval or accession that it will not be bound by Part II of this Convention or that it will not be bound by Part III of this Convention.
• A Contracting State which makes a declaration in accordance with the preceding paragraph in respect of Part II or Part III of this Convention is not to be considered a Contracting State within paragraph (۱) of article ۱ of this Convention in respect of matters governed by the Part to which the declaration applies.

Article 93

• If a Contracting State has two or more territorial units in which, according  to  its  constitution,  different  systems  of  law  are  applicable  in  relation to the matters dealt with in this Convention, it may, at the time of signature,  ratification,  acceptance,  approval  or  accession,  declare  that  this Convention is to extend to all its territorial units or only to one or more of them, and may amend its declaration by submitting another declaration at any time.
• These declarations are to be notified to the depositary and are to state expressly the territorial units to which the Convention extends.
• If,  by  virtue  of  a  declaration  under  this  article,  this  Convention extends to one or more but not all of the territorial units of a Contracting State, and if the place of business of a party is located in that State, this place of business, for the purposes of this Convention, is considered not to be  in  a  Contracting  State,  unless  it  is  in  a  territorial  unit  to  which  the  Convention extends.
• If a Contracting State makes no declaration under paragraph (۱) of  this  article,  the  Convention  is  to  extend  to  all  territorial  units  of  that State.

Article 94

• Two or more Contracting States which have the same or closely related  legal  rules  on  matters  governed  by  this  Convention  may  at  any time declare that the Convention is not to apply to contracts of sale or to their  formation  where  the  parties  have  their  places  of  business  in  those States. Such declarations may be made jointly or by reciprocal unilateral declarations.
• A  Contracting  State  which  has  the  same  or  closely  related  legal rules on matters governed by this Convention as one or more non- Contracting States may at any time declare that the Convention is not to apply to  contracts of sale or to their formation where the parties have their places of business in those States.
• If a State which is the object of a declaration under the preceding paragraph  subsequently  becomes  a  Contracting  State,  the  declaration  made will, as from the date on which the Convention enters into force in respect of  the  new  Contracting  State,  have  the  effect  of  a  declaration  made  under paragraph (۱), provided that the new Contracting State joins in such  declaration or makes a reciprocal unilateral declaration.

Article 95

Any State may declare at the time of the deposit of its instrument of ratification, acceptance, approval or accession that it will not be bound by subparagraph (۱)(b) of article ۱ of this Convention.

Article 96

A Contracting State whose legislation requires contracts of sale to be concluded in or evidenced by writing may at any time make a declaration in accordance with article ۱۲ that any provision of article ۱۱, article ۲۹, or Part II of this Convention, that allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention to be made in any form other than in writing, does not apply where any party has his place of business in that State.

Article 97

• Declarations made under this Convention at the time of signature are subject to confirmation upon ratification, acceptance or approval.
• Declarations and confirmations of declarations are to be in writing and be formally notified to the depositary.
• A declaration takes effect simultaneously with the entry into force of this Convention in respect of the State concerned. However, a declaration of which the depositary receives formal notification after such entry into force takes effect on the first day of the month following the expiration of six months after the date of its receipt by the depositary. Reciprocal unilateral declarations under  article  ۹۴  take  effect  on  the  first  day  of  the  month  following  the  expiration of six months after the receipt of the latest  declaration by the depositary.
• Any State which makes a declaration under this Convention may withdraw it at any time by a formal notification in writing addressed to the depositary. Such withdrawal is to take effect on the first day of the month following the expiration of six months after the date of the receipt of the notification by the depositary.
• A  withdrawal  of  a  declaration  made  under  article  ۹۴  renders inoperative, as from the date on which the withdrawal takes effect, any  reciprocal declaration made by another State under that article.

Article 98

No reservations are permitted except those expressly authorized in this Convention.

Article 99

• This  Convention  enters  into  force,  subject  to  the  provisions  of paragraph  (۶)  of  this  article,  on  the  first  day  of  the  month  following  the  expiration of twelve months after the date of deposit of the tenth instrument of  ratification,  acceptance,  approval  or  accession,  including  an  instrument which contains a declaration made under article ۹۲.

• When  a  State  ratifies,  accepts,  approves  or  accedes  to  this Convention after the deposit of the tenth instrument of ratification,  acceptance, approval  or  accession,  this  Convention,  with  the  exception  of  the  Part  excluded, enters into force in respect of that State, subject to the provisions of paragraph (۶) of this article, on the first day of the month following the expiration of twelve months after the date of the deposit of its instrument of ratification, acceptance, approval or accession.

• A  State  which  ratifies,  accepts,  approves  or  accedes  to  this Convention  and  is  a  party  to  either  or  both  the  Convention  relating  to  a Uniform  Law  on  the  Formation  of  Contracts  for  the  International  Sale  of Goods done at The Hague on ۱ July ۱۹۶۴ (۱۹۶۴ Hague Formation  Convention) and the Convention relating to a Uniform Law on the  International Sale of Goods done at The Hague on ۱ July ۱۹۶۴ (۱۹۶۴ Hague Sales Convention) shall at the same time denounce, as the case may be, either or both the ۱۹۶۴ Hague  Sales  Convention  and  the  ۱۹۶۴  Hague  Formation  Convention  by  notifying the Government of the Netherlands to that effect.

• A  State  party  to  the  ۱۹۶۴  Hague  Sales  Convention  which  ratifies, accepts,  approves  or  accedes  to  the  present  Convention  and  declares  or  has declared under article ۹۲ that it will not be bound by Part II of this  Convention shall at the time of ratification, acceptance, approval or accession denounce the ۱۹۶۴ Hague Sales Convention by notifying the Government of the  Netherlands to that effect.
• A  State  party  to  the  ۱۹۶۴  Hague  Formation  Convention  which ratifies, accepts, approves or accedes to the present Convention and declares or has declared under article ۹۲ that it will not be bound by Part III of this Convention shall at the time of ratification, acceptance, approval or accession denounce the ۱۹۶۴ Hague Formation Convention by notifying the  Government of the Netherlands to that effect.
• For the purpose of this article, ratifications, acceptances,  approvals and accessions in respect of this Convention by States parties to the ۱۹۶۴ Hague Formation Convention or to the ۱۹۶۴ Hague Sales Convention shall not be effective until such denunciations as may be required on the part of those States in respect of the latter two Conventions have themselves become effective. The depositary of this Convention shall consult with the  Government of the Netherlands, as the depositary of the ۱۹۶۴ Conventions, so as to ensure necessary coordination in this respect.

Article 100

• This  Convention  applies  to  the  formation  of  a  contract  only when  the  proposal  for  concluding  the  contract  is  made  on  or  after  the date when the Convention enters into force in respect of the Contracting States  referred to in subparagraph (۱)(a) or the Contracting State referred to in subparagraph (۱)(b) of article ۱.
• This  Convention  applies  only  to  contracts  concluded  on  or  after the date when the Convention enters into force in respect of the Contracting States  referred  to  in  subparagraph  (۱)(a)  or  the  Contracting  State  referred to in subparagraph (۱)(b) of article ۱.

Article 101

• A Contracting State may denounce this Convention, or Part II or Part III of the Convention, by a formal notification in writing addressed to the depositary.
• The  denunciation  takes  effect  on  the  first  day  of  the  month  following the expiration of twelve months after the notification is received by  the  depositary.  Where  a  longer  period  for  the  denunciation  to  take effect is specified in the notification, the denunciation takes effect upon the expiration of such longer period after the notification is received by the depositary.

DONE at Vienna, this day of eleventh day of April, one thousand nine hundred and eighty, in a single original, of which the Arabic, Chinese,  English, French, Russian and Spanish texts are equally authentic.

IN  WITNESS  WHEREOF  the  undersigned  plenipotentiaries,  being  duly  authorized by their respective Governments, have signed this Convention.

---

explanatory Note by the UNCItRAL Secretariat on the United Nations Convention on Contracts for the International Sale of Goods

This note has been prepared by the Secretariat of the United Nations  Commission on International Trade Law for informational purposes; it is not an official commentary on the Convention.

Introduction

1. The  United  Nations  Convention  on  Contracts  for  the  International Sale of Goods provides a uniform text of law for international sales of goods. The Convention was prepared by the United Nations Commission on  International Trade Law (UNCITRAL) and adopted by a diplomatic  conference on ۱۱ April ۱۹۸۰.
2. Preparation of a uniform law for the international sale of goods began in  ۱۹۳۰  at  the  International  Institute  for  the  Unification  of  Private  Law  (UNIDROIT) in Rome. After a long interruption in the work as a result of the Second World War, the draft was submitted to a diplomatic conference in The Hague in ۱۹۶۴, which adopted two conventions, one on the  international sale of goods and the other on the formation of contracts for the international sale of goods.
3. Almost  immediately  upon  the  adoption  of  the  two  conventions  there was widespread criticism of their provisions as reflecting primarily the legal traditions and economic realities of continental Western Europe, which was the region that had most actively contributed to their preparation. As a result, one of the first tasks undertaken by UNCITRAL on its organization in ۱۹۶۸ was  to  enquire  of  States  whether  or  not  they  intended  to  adhere  to  those conventions and the reasons for their positions. In the light of the responses received,  UNCITRAL  decided  to  study  the  two  conventions  to  ascertain which  modifications  might  render  them  capable  of  wider  acceptance  by countries of different legal, social and economic systems. The result of this study was the adoption by diplomatic conference on ۱۱ April ۱۹۸۰ of the United Nations Convention on Contracts for the International Sale of Goods, which combines the subject matter of the two prior conventions.

4. UNCITRAL’s success in preparing a Convention with wider acceptability  is  evidenced  by  the  fact  that  the  original  eleven  States  for  which  the  Convention came into force on ۱ January ۱۹۸۸ included States from every geographical region, every stage of economic development and every major legal, social and economic system. The original eleven States were:  Argentina, China, Egypt, France, Hungary, Italy, Lesotho, Syria, United States,  Yugoslavia and Zambia.
5. As of ۱ September ۲۰۱۰, ۷۶ States are parties to the Convention. The current  updated  status  of  the  Convention  is  available  on  the  UNCITRAL website. Authoritative information on the status of the Convention, as well as on related declarations, including with respect to territorial  application and succession of States, may be found on the United Nations Treaty  Collection on the Internet.^۲
6. The Convention is divided into four parts. Part One deals with the scope of  application  of  the  Convention  and  the  general  provisions.  Part  Two  contains the rules governing the formation of contracts for the international sale of goods. Part Three deals with the substantive rights and obligations of  buyer  and  seller  arising  from  the  contract.  Part  Four  contains  the  final clauses  of  the  Convention  concerning  such  matters  as  how  and  when  it comes  into  force,  the  reservations  and  declarations  that  are  permitted  and the  application  of  the  Convention  to  international  sales  where  both  States concerned have the same or similar law on the subject.

  Part  one. Scope of application and general provisions

     A. Scope of application

7. The articles on scope of application indicate both what is covered by the Convention and what is not covered. The Convention applies to contracts of sale of goods between parties whose places of business are in different States and either both of those States are Contracting States or the rules of private international law lead to the law of a Contracting State. A few States have  availed  themselves  of  the  authorization  in  article  ۹۵  to  declare  that they would apply the Convention only in the former and not in the latter of these two situations. As the Convention becomes more widely adopted, the practical  significance  of  such  a declaration will  diminish.  Finally,  the  Convention may also apply as the law applicable to the contract if so chosen by the parties. In that case, the operation of the Convention will be subject to any limits on contractual stipulations set by the otherwise applicable law.
8. The final clauses make two additional restrictions on the territorial scope of  application  that  will  be  relevant  to  a  few  States.  One  applies  only  if  a State is a party to another international agreement that contains provisions concerning matters governed by this Convention; the other permits States that have the same or similar domestic law of sales to declare that the  Convention does not apply between them.
9. Contracts of sale are distinguished from contracts for services in two respects by article ۳. A contract for the supply of goods to be manufactured or produced is considered to be a sale unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for their manufacture or production. When the preponderant part of the obligations of  the  party  who  furnishes  the  goods  consists  in  the  supply  of  labour  or other services, the Convention does not apply.
10. The Convention contains a list of types of sales that are excluded from the Convention, either because of the purpose of the sale (goods bought for personal, family or household use), the nature of the sale (sale by auction, on execution or otherwise by law) or the nature of the goods (stocks, shares, investment securities, negotiable instruments, money, ships, vessels,  hovercraft, aircraft or electricity). In many States some or all of such sales are governed by special rules reflecting their special nature.
11. Several articles make clear that the subject matter of the Convention is restricted to formation of the contract and the rights and duties of the buyer and seller arising from such a contract. In particular, the Convention is not concerned  with  the  validity  of  the  contract,  the  effect  which  the  contract may have on the property in the goods sold or the liability of the seller for death or personal injury caused by the goods to any person.

     B. Party autonomy

۱۲.  The  basic  principle  of  contractual  freedom  in  the  international  sale  of goods is recognized by the provision that permits the parties to exclude the application of this Convention or derogate from or vary the effect of any of its  provisions. This  exclusion  will  occur,  for  example,  if  parties  choose  the law of a non-contracting State or the substantive domestic law of a  contracting State as the law applicable to the contract. Derogation from the Convention will occur whenever a provision in the contract provides a  different rule from that found in the Convention.

             C. Interpretation of the Convention

۱۳.  This Convention for the unification of the law governing the  international sale of goods will better fulfil its purpose if it is interpreted in a consistent manner in all legal systems. Great care was taken in its preparation to make it  as  clear  and  easy  to  understand  as  possible.  Nevertheless,  disputes  will arise  as  to  its  meaning  and  application.  When  this  occurs,  all  parties,  including domestic courts and arbitral tribunals, are admonished to observe its international character and to promote uniformity in its application and the  observance  of  good  faith  in  international  trade.  In  particular,  when  a question concerning a matter governed by this Convention is not expressly settled  in  it,  the  question  is  to  be  settled  in  conformity  with  the  general principles on which the Convention is based. Only in the absence of such principles should the matter be settled in conformity with the law applicable by virtue of the rules of private international law.

                    D. Interpretation of the contract; usages

۱۴.  The Convention contains provisions on the manner in which statements and conduct of a party are to be interpreted in the context of the formation of the contract or its implementation. Usages agreed to by the parties,  practices they  have  established  between  themselves  and  usages  of  which  the  parties knew or ought to have known and which are widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned may all be binding on the parties to the contract of sale.

                  E.  Form of the contract

15. The Convention does not subject the contract of sale to any requirement as  to  form.  In  particular,  article  ۱۱  provides  that  no  written  agreement  is necessary for the conclusion of the contract. However, if the contract is in writing and it contains a provision requiring any modification or termination by agreement to be in writing, article ۲۹ provides that the contract may not be  otherwise  modified  or  terminated  by  agreement. The  only  exception  is that a party may be precluded by his conduct from asserting such a  provision to the extent that the other person has relied on that conduct.
16. In order to accommodate those States whose legislation requires  contracts of sale to be concluded in or evidenced by writing, article ۹۶ entitles those States to declare that neither article 11 not the exception to article 29 applies where any party to the contract has his place of business in that State.

Part  two. Formation of the contract

17. Part Two of the Convention deals with a number of questions that arise in the formation of the contract by the exchange of an offer and an  acceptance. When the formation of the contract takes place in this manner, the contract is concluded when the acceptance of the offer becomes effective.
18. In order for a proposal for concluding a contract to constitute an offer, it must be addressed to one or more specific persons and it must be  sufficiently definite. For the proposal to be sufficiently definite, it must  indicate the goods and expressly or implicitly fix or make provisions for determining the quantity and the price.
19. The  Convention  takes  a  middle  position  between  the  doctrine  of  the  revocability of the offer until acceptance and its general irrevocability for some period of time. The general rule is that an offer may be revoked. However, the revocation  must  reach  the  offeree  before  he  has  dispatched  an  acceptance. Moreover, an offer cannot be revoked if it indicates that it is irrevocable, which it may do by stating a fixed time for acceptance or  otherwise. Furthermore, an offer may not be revoked 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.
20. Acceptance of an offer may be made by means of a statement or other conduct of the offeree indicating assent to the offer that is communicated to  the  offeror.  However,  in  some  cases  the  acceptance  may  consist  of performing an act, such as dispatch of the goods or payment of the price. Such an act would normally be effective as an acceptance the moment the act was performed.

21. A frequent problem in contract formation, perhaps especially in regard to contracts of sale of goods, arises out of a reply to an offer that purports to  be  an  acceptance  but  contains  additional  or  different  terms.  Under  the Convention, if the additional or different terms do not materially alter the terms  of  the  offer,  the  reply  constitutes  an  acceptance,  unless  the  offeror without undue delay objects to those terms. If he does not object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.
22. If the additional or different terms do materially alter the terms of the contract, the reply constitutes a counter-offer that must in turn be accepted for  a contract  to  be  concluded. 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 settlement  of  disputes  are  considered  to  alter  the  terms  of  the  offer materially.

  Part  three. Sale of goods

                   A.  Obligations of the seller

23. The general obligations of the seller are to deliver the goods, hand over  any  documents  relating  to  them  and  transfer  the  property  in  the goods,  as  required  by  the  contract  and  this  Convention.  The  Convention provides  supplementary rules for use in the absence of contractual  agreement as to when, where and how the seller must perform these obligations.
24. The Convention provides a number of rules that implement the seller’s obligations in respect of the quality of the goods. In general, the seller must deliver  goods  that  are  of  the  quantity,  quality  and  description  required  by the contract and that are contained or packaged in the manner required by the contract. One set of rules of particular importance in international sales of goods involves the seller’s obligation to deliver goods that are free from any  right  or  claim  of  a  third  party,  including  rights  based  on  industrial property or other intellectual property.
25. In  connection  with  the  seller’s  obligations  in  regard  to  the  quality  of the goods, the Convention contains provisions on the buyer’s obligation to inspect the goods. He must give notice of any lack of conformity with the contract within a reasonable time after he has discovered it or ought to have discovered it, and at the latest two years from the date on which the goods were actually handed over to the buyer, unless this time limit is inconsistent with a contractual period of guarantee.

     B. Obligations of the buyer

۲۶.  The general obligations of the buyer are to pay the price for the goods and take delivery of them as required by the contract and the  Convention. The  Convention  provides  supplementary  rules  for  use  in  the  absence  of contractual agreement as to how the price is to be determined and where and when the buyer should perform his obligations to pay the price.

        C. Remedies for breach of contract

27. The remedies of the buyer for breach of contract by the seller are set forth  in  connection  with  the  obligations  of  the  seller  and  the  remedies  of the seller are set forth in connection with the obligations of the buyer. This makes it easier to use and understand the Convention.
28. The  general  pattern  of  remedies  is  the  same  in  both  cases.  If  all  the required conditions are fulfilled, the aggrieved party may require  performance of the other party’s obligations, claim damages or avoid the contract. The buyer also has the right to reduce the price where the goods delivered do not conform with the contract.
29. Among  the  more  important  limitations  on  the  right  of  an  aggrieved party to claim a remedy is the concept of fundamental breach. For a breach of contract to be fundamental, it must result in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the result was neither foreseen by the party in breach nor  foreseeable  by  a  reasonable  person  of  the  same  kind  in  the  same  circumstances. A buyer can require the delivery of substitute goods only if the goods delivered were not in conformity with the contract and the lack of conformity constituted a fundamental breach of contract. The existence of  a  fundamental  breach  is  one  of  the  two  circumstances  that  justifies  a declaration  of  avoidance  of  a  contract  by  the  aggrieved  party;  the  other circumstance  being  that,  in  the  case  of  non-delivery  of  the  goods  by  the seller or non-payment of the price or failure to take delivery by the buyer, the party in breach fails to perform within a reasonable period of time fixed by the aggrieved party.
30. Other remedies may be restricted by special circumstances. For  example, if the goods do not conform with the contract, the buyer may require the seller to remedy the lack of conformity by repair, unless this is unreasonable having regard to all the circumstances. A party cannot recover damages that he could have mitigated by taking the proper measures. A party may be exempted from paying damages by virtue of an impediment beyond his control.

D. Passing of risk

31. Determining the exact moment when the risk of loss or damage to the goods passes from the seller to the buyer is of great importance in contracts for  the  international  sale  of  goods.  Parties  may  regulate  the  issue  in  their contract either by an express provision or by the use of a trade term such as, for example, an INCOTERM. The effect of the choice of such a term would be to amend the corresponding provisions of the CISG accordingly. However, for the frequent case where the contract does not contain such a provision, the Convention sets forth a complete set of rules.
32. The two special situations contemplated by the Convention are when the contract of sale involves carriage of the goods and when the goods are sold while in transit. In all other cases the risk passes to the buyer when he takes over the goods or from the time when the goods are placed at his disposal and he commits a breach of contract by failing to take delivery, whichever comes first. In the frequent case when the contract relates to goods that are not then identified, they must be identified to the contract before they can be considered to be placed at the disposal of the buyer and the risk of their loss can be considered to have passed to him.

       E. Suspension of performance and anticipatory breach

۳۳.  The Convention contains special rules for the situation in which, prior to the date on which performance is due, it becomes apparent that one of the  parties  will  not  perform  a  substantial  part  of  his  obligations  or  will  commit a fundamental breach of contract. A distinction is drawn between those cases in which the other party may suspend his own performance of the contract but the contract remains in existence awaiting future events and those cases in which he may declare the contract avoided.

F. Exemption from liability to pay damages

۳۴.  When  a  party  fails  to  perform  any  of  his  obligations  due  to  an  impediment  beyond  his  control  that  he  could  not  reasonably  have  been  expected to take into account at the time of the conclusion of the contract and that he could not have avoided or overcome, he is exempted from the consequences of his failure to perform, including the payment of damages. This exemption may also apply if the failure is due to the failure of a third person whom he has engaged to perform the whole or a part of the contract. However, he is subject to any other remedy, including reduction of the price, if the goods were defective in some way.

G. Preservation of the goods

۳۵.  The Convention imposes on both parties the duty to preserve any goods in their possession belonging to the other party. Such a duty is of even greater importance in an international sale of goods where the other party is from a foreign country and may not have agents in the country where the goods are located.  Under  certain  circumstances  the  party  in  possession  of  the  goods may  sell  them,  or  may  even  be  required  to  sell  them. A  party  selling  the goods has the right to retain out of the proceeds of sale an amount equal to the  reasonable  expenses  of  preserving  the  goods  and  of  selling  them  and must account to the other party for the balance.

 Part Four. Final clauses

36. The final clauses contain the usual provisions relating to the SecretaryGeneral as depositary and providing that the Convention is subject to  ratification, acceptance or approval by those States that signed it by ۳۰ September ۱۹۸۱, that it is open to accession by all States that are not  signatory States and that the text is equally authentic in Arabic, Chinese, English, French, Russian and Spanish.
37. The Convention permits a certain number of declarations. Those relative to  scope  of  application  and  the  requirement  as  to  a  written  contract  have been  mentioned  above. There  is  a  special  declaration  for  States  that  have different  systems  of  law  governing  contracts  of  sale  in  different  parts  of their territory. Finally, a State may declare that it will not be bound by Part II on formation of contracts or Part III on the rights and obligations of the buyer and seller. This latter declaration was included as part of the decision to combine into one convention the subject matter of the two ۱۹۶۴ Hague Conventions.

Complementary texts

38. The United Nations Convention on Contracts for the International Sale of  Goods  is  complemented  by  the  United  Nations  Convention  on  the  Limitation Period in the International Sale of Goods, ۱۹۷۴, as amended by a Protocol in ۱۹۸۰ (the Limitation Convention). The Limitation Convention establishes uniform rules governing the period of time within which a party under  a  contract  for  the  international  sale  of  goods  must  commence  legal proceedings against another party to assert a claim arising from the contract or relating to its breach, termination or validity. The amending Protocol of ۱۹۸۰ ensures that the scope of application of the Limitation Convention is identical to the one of the United Nations Convention on Contracts for the International Sale of Goods.
39. The United Nations Convention on Contracts for the International Sale of Goods is also complemented, with respect to the use of electronic  communications, by the United Nations Convention on the Use of  Electronic Communications in International Contracts, ۲۰۰۵ (the  Electronic  Communications Convention). The Electronic Communications  Convention aims at facilitating the use of  electronic communications in international trade by assuring that contracts  concluded and other communications  exchanged electronically are as valid and enforceable as their traditional paper-based equivalents. The Electronic  Communications Convention may help to avoid misinterpretation of the CISG that might occur, for example, when a State has lodged a declaration mandating the use of the traditional written form for contracts for the international sale of goods. It may also promote the understanding that the  “communication”  and/or “writing”  under  the  CISG should be construed so as to include electronic  communications. The Electronic Communications Convention is an enabling  treaty whose effect is to remove those formal obstacles by establishing the requirements for functional equivalence between electronic and traditional written form.