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Presentation of Prof. Mochtar Kusuma-Atmadja : Harmonization of Laws in the Region : Convention on the International Sale of Goods

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Scope

The Convention contains rules governing the formation and operation of international commercial sales contracts, including:

1. the requirements of offer and acceptance
2. obligations of the seller and buyer
3. the passing of risk, and
4. remedies for breach of contract.

It contains provisions which cater specially for international trade and it emphasizes the saving of the contract if a dispute or breach arises. It takes into account the different social, economic and legal systems of the world, and in many respects reflects existing law. The Convention does not cover passing of property, validity of contract, liability for death or personal injury and capacity to contract. These issues are left to be decided by national laws, so a choice of law clause is still required. In any case, these issues are more relevant to domestic and consumer contracts than to international commercial contracts between traders and businessmen.

The Convention does not apply to sales:

1. 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;

2. by auction;

3. on execution or otherwise by authority of law;

4. of stocks, shares, investment securities, negotiable instruments or money;

5. of ships, vessels, hovercraft or aircraft; or

6. of electricity.

Contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. This Convention does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labor or other services.

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