Substantive law of the Contracting State

“Whether the CISG applies to a particular transaction must first involve a determination of which countries are covered by what portions of the CISG. ” The Vienna Convention, unlike other conventions and international agreement, provide for its sphere of application or self-regulation. It specifically provides when its provisions may apply given a certain state of facts and circumstances. It does not wait for a moment parties to a contract resort to its provisions for the latter to have some force and effect.

It is its own force and effect without need of any external factors or control, but within the specified limits provided in its terms. In the wordings of the first six articles of the Vienna Convention (CISG), it basically defines when contract can be considered as “International”. The definition of the term is important as the UN-CISG involves contracts exceeding territorial boundaries of states. The subject matter of the convention being the “international” contracts, it is but proper to determine which contracts falls within the category of an international contract to be the subject of the provisions of the Convention.

It is further important to note that not all international contract fall within the purview of the UN-CISG. It has its limited application to particular international contracts. It is not a catchall, universal law governing all international contracts. Only when the meeting and compliance of certain requirements that the UN-CISG prescribes can the latter enter into the picture. Article I of the Vienna Convention provides that: (1)    “This convention applies to contracts of sale of goods between parties whose place of business are in different states –

(a)    when the States are Contracting States; or, (b)    When the rules of private international law 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. ” The UN-CISG is therefore limited in terms of its application and coverage to the Contracting States. It does not apply to non-contracting states, unless parties to a certain contract stipulate that they submit and subject themselves to the provisions of the UN-CISG.

There is no problem in the application of the latter Convention (UN-CISG) when the parties to a contract belong to the Contracting States. The UN-CISG does not derogate the applicability of conflict of law rules under the private international law. It rather provides for some leeway for its application and even preference. This situation normally occurs when one of the parties to a contract involving the international sale of goods is not a citizen of a state, which is a Contracting State.

In case only one of the parties is under the jurisdiction of a contracting state, private international law determines which law should apply under the circumstances. The said conflict situation should be resolved not only by the conflict rules of the non-contracting state, but also by the domestic conflict rules of the contracting state. It has to be noted that the Vienna Convention as earlier discussed does not deal with rules on conflict of laws, but provides for the substantive rights and obligation to the parties.

The UN-CISG in such situation will only apply in case when, after resorting to conflict of law rules of both states, the result is the application of the substantive law of the Contracting State. The courts in the said Contracting State should now apply the provision of the Vienna Convention (CISG). Vienna Conventions does not insist to have a primacy and preference over other legal system but exists in harmony with some other legal system, and only after the due determination of its applicability, can it now come to have some force and effect.