International trade: the Vienna Sales Convention
There is constant trading between business parties. Products are bought and delivered to be used, processed or, for example, resold. More than once these trading relationships cross the border of the Netherlands or even Europe. To prevent all kinds of different legal rules from applying in these trading relationships, there is the UN Convention on the International Sales of Goods (CISG), or the Vienna Sales Convention (“the Convention”). This Convention provides rules for international sale of goods.
What does the Vienna Sales Convention regulate?
The Convention defines how a sales contract is formed and the rights and obligations of buyer and seller. According to the Convention, a commercial sales contract does not necessarily have to be concluded in writing. In addition, the Convention provides rules on what should be expected of the various parties in certain situations, such as when delivered products are defective or unsuitable.
When does the Vienna Sales Convention apply?
The Convention automatically applies to the purchase of movable property between two professional parties established in different member states. Since 85 countries, including the member states of the European Union, are parties to the Convention, there is a significant chance that the Convention will apply to a contract between a Dutch and foreign trader.
The applicability of the Vienna Sales Convention can be excluded. Parties must then explicitly exclude the applicability of the Convention (or part of its provisions) in their contract or general terms and conditions.
Differences Treaty and domestic law
Treaty rules differ from Dutch law in several respects. For example, under the Convention, the buyer can choose to claim damages immediately if the seller fails to fulfill his obligations. For a seller this can be disadvantageous compared to Dutch law, which states that in such a case the seller must first be given the opportunity to fulfill his obligations. Only then may alternative damages be claimed.
By contrast, the buyer has a so-called duty of inspection under the Treaty: the buyer must check the product after delivery within the shortest possible time. Should anything then be wrong, he must inform the seller of this within a reasonable period of time. Under our national law, the buyer does not have such an obligation to inspect, but must in principle only complain to the seller within a reasonable time after discovering a defect. The Convention thus requires a more active and investigative attitude on the part of the buyer and gives the seller more certainty that he will not be confronted with a complaint after a long time.
Finally, under the Convention, it is more difficult to dissolve a sales contract. Whereas in our national law this is in principle possible in case of a shortcoming in performance, under the Convention what matters is, among other things, whether the other party has actually suffered damage due to the shortcoming and whether this damage was foreseeable. Once the products have been delivered or the price has already been paid, dissolution is even possible only in some very specific cases.
Advice?
Would you like to receive advice on an (international) sales contract, the applicability or interpretation of the Vienna Sales Convention? Then please contact us. Jacolien Leuvenink will be happy to assist you.
