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International Sales of

Goods Contract
What is International Sales of Goods
Contract
The Differences between International Sale of
Goods contract and their national counterpart
Issue regarding International Sales
of Good
What Will the Contracting Language
Be?
Which Law Will Govern?
How will the Payment be done?
How Will the Logistics of Transport
and Export/Import Be Handled?
Contracting Language
Usually done by English or the language
that both parties is proficient with
Sometime one of the party will insist on
using local language
Possible to have multiple language
versions of the agreement, but need to
be clear about which version is
definitive in cases of conflict or
ambiguity
Which Law Will Govern?

In International Commercial Contract, Party autonomy is the


fundamental principle
Because the Parties in different jurisdictions mean that legal
relationship is international , hence there will be International
private legal relationships.
International Private Legal relationship mean that there will use
international private law (IPL) / International Conflict of Law to
resolve disputes, and to answer specific legal questions.
IPL / Conflict of Law consist of= national law + conventions
The Convetions used in Sales of Goods is UNITED NATIONS
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS (CISG)
Applicability of CISG
Article 1
(1)This Convention applies to contracts of sale of goods between parties whose places of business are in
different States:
(a) when the States are Contracting States; or
(b) when the rules of private international law lead to the application of the law of a Contracting State.

(2) 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.

(3) 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:
(a) 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;
(b) by auction;
(c) on execution or otherwise by authority of law;
(d) of stocks, shares, investment securities, negotiable instruments or money;
(e) of ships, vessels, hovercraft or aircraft;
(f) of electricity.
What CISG Regulates
Formation (verbal offer + acceptance,
signatories may require in writing )
Sellers obligations : delivery in
conformity with contract, documents,
transfer ownership
Buyers obligations : payment price and
taking delivery
Non-performance remedies:
performance, damages, avoid
What CISG dont
Regulating Validity contract
Effect contract on ownership
Transportation
How will the payment be
done
The payment in Sale of Goods Contract can
be done in various way,below are the
example of viable method of payment:
Mail Transfer (M/T)

Telegraphic Transfer (T/T)

Demand Draft (D/D)

Letter of Credit (L/C)


How Will the Logistics of Transport and Export/Import Be
Handled?

There are many way to settle the


transport and export/import of Goods
If both parties agree they can state
that they will use INCOTERMS to
define how will the logistic of
Transport and Export/Import Be
Handled
Structure of International Sale of
Goods Contract
The structure is used in International Sale of
Goods Contract may vary, below is the example of
one of the used structure:
1. Heading (type of agreement e.g. contract for the
sale of goods )
2. Parties (This agreement is made between A and
B (Parties ))
3. Main Clause
4. Governing Law
5. Dispute Settlement Mechanism
6. Signing clause
The Main Clause
Art.1. Definition and Art. 7. Warranty
Interpretation
Art. 8. Penalty
Art. 2. Commodity
Art. 9. Insurance
- Quality of Goods
Art.10. Force
- Quantity of Good
majeure
Art. 3. Price
Art. 4. Shipment Art.11. Claim
Art. 5. Payment Art.12. Arbitration
Art. 6. Packing and Clause
marking Art.13. Other terms