Notwithstanding the fact that the UN Convention on Contracts for the International Sale of Goods (CISG) has been in existence and United States has been a signatory since the 1980s, as shown by the recent cases across the country, parties to the international trade contracts (as well as many practitioners) are still not aware about CISG’s existence and its application to a potential contract dispute. This leads to unpleasant surprises during litigation or arbitration when the parties realize for the first time that their dispute is governed by the unfamiliar contract regime under CISG and not the domestic law.

CISG automatically applies to contracts for the international sale of goods between parties whose principal places of business are in different CISG countries. While nowadays most commercial transactions contain an international element, it is prudent for many in house and outside practitioners to familiarize themselves with CISG that has been ratified by 93 countries. As further discussed in this Article, CISG and its potential application should be considered at the contract drafting stage and not in the midst of a contract dispute.

Applicability of CISG to a Contract