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The Increasing Significance of the CISG

With Madagascar and Guyana, two further states have recently ratified the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), sometimes also referred to as the ‘Vienna Convention’. Madagascar and Guyana will become CISG member states with effect from 1 October 2015. The CISG has been in effect in Brazil since 1 April 2014, and will become effective in Bahrain and the Democratic Republic of Congo in the next few months.

The CISG is a uniform system of rules and regulations governing cross-border contracts for the sale of goods. In Germany it automatically applies to cross-border sales of goods - in addition to the provisions of the German Civil Code (BGB) and the German Commercial Code (HGB) – unless explicitly excluded. For a long time the applicability of the CISG was generally excluded in contracts, with its practical relevance having been correspondingly low. Recently, however, this attitude has changed, with standard / precedent contracts of many interest groups no longer generally excluding the applicability of the CISG. The reason for this change is, amongst others, that the “conventional” German law of obligations (found in the HGB and BGB) was effectively streamlined with the CISG in terms of the law of obligations reform in 2002. The most important difference between the German BGB/HGB and the CISG now is that, according to the CISG, each contracting party will be liable for damages for breach of contract irrespective of (its) fault. However, only the damage that was foreseeable at the time of the conclusion of the contract is taken into account.

A list of all CISG member states is available on the website of the United Nations Commission on International Trade Law (UNCITRAL).

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