1. Matters Covered

In determining the matters covered by the CISG, Art. 4 serves as the starting point:

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:

(a) the validity of the contract or of any of its provisions or of any usage;

(b) the effect which the contract may have on the property in the goods sold.

 

a. Declaratory Function

The most important part of this provision is the phrase “In particular, except as otherwise expressly provided in this Convention”. This phrase clarifies that Art. 4 itself does not limit the matters covered by the CISG but merely has a declaratory function. This is also not contradicted by the use of the term “only” in the first sentences since such a reading of the provision would be plainly false: As a matter of fact, the CISG does not only govern the formation of the contract and the rights and obligations of the parties but e.g. also the interpretation of statements in Art. 8, the modification of the contract in Art. 29 or the member states’ international public law duties in Art. 89-101.

Decisive in order to determine the matters covered by the CISG is therefore not the abstract description in Art. 4 but the interpretation of its provisions. A matter is governed by the CISG if the interpretation of a provision shows that the matter is comprised by the functional aim of this provision. In contrast, the abstract categorization of issues as substantive / procedural or contractual / tort-based is of no help here since these categories are defined quite differently from jurisdiction to jurisdiction.

 

b. Examples

The following non-exhaustive list of issues located in the “borderland” of the Convention merely serves the purpose of illustrating that there is no clear line that can be drawn between those matters governed by the CISG and those that are not. Accordingly, the details are often in dispute.

  • Pre-contractual liability, information duties, mistake (governed insofar as based on characteristics of goods, not governed insofar as based on fraudulent behavior)
  • Content control of individual or standard terms (not governed, only formation governed)
  • Retention of title (only effects on the parties obligations governed, not effects on the transfer of title)
  • Set-off (not governed)
  • Right to withhold performance (governed)
  • Dispute resolution clauses (formation and interpretation governed, form and remedies not governed)
  • Assignment and assumption of debt (not governed)
  • Legal capacity and agency (not governed)
  • Direct claims of a final buyer in a chain of contracts against the manufacturer (governed if contract between manufacturer and the first buyer is governed by CISG)
  • Questions of proof (burden of proof governed, standard of proof not governed)
  • Limitation of action (not governed)

Furthermore, Art. 5 excludes matters of liability for death or personal injury:

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

In this regard two aspects are of importance: First, Art. 5 also excludes the buyer’s recourse against the seller for claims based on liability for death or personal injury of the buyer’s customers. The argument that such recourse claim is not based on liability for death or personal injury but merely a claim for financial loss of the buyer ignores the wording of Art. 5 excluding the application of the CISG in case of harm to “any person”, not just to the buyer (disputed).

Second, Art. 5 does not exclude the seller’s liability for damage to property of the buyer. The CISG governs situations the damage to the property of the buyer by the good is a typical consequence of the seller’s breach of contract. This mainly depends on the kind of good sold and the respective contractual expectations of the buyer. In contrast, where it is the result of pure chance that the property damaged is that of the buyer and not of a third party, domestic law remedies apply. 

< Previous Next >
Last modified: Thursday, 22 October 2015, 4:40 PM