It has been stated that the function of Private International Law is threefold. Its main function is to prescribe the conditions under which a court or agency is competent to entertain a suit or proceeding involving facts containing a foreign element. Moreover, it is also the function of the conflict of laws rules to specify the circumstances in which foreign judgment will be recognized as valid and binding in the forum.
Finally, the conflict of laws rules intends to determine for each class of cases the particular system of law by reference to which the rights of the parties must be ascertained. It is the last function that involves the fundamental problem of choice of law. For it is the primary function of Private International Law to determine which of several simultaneously valid legal systems is applicable to a given set of facts. The Rules of Private International Law, like all other rules of law, apply only to certain given facts not characterized as creating some legal relationship.
“Only a legal system can determine whether a given set of facts has produced any legal relationship or not and it is for Private International Law to choose the appropriate system by which said facts may be determined. ” The legal effects of a certain set of facts are not always determined by one single legal system. It is sometimes necessary to apply several systems, either cumulatively or alternately. Conflict of Law rules simply provide for the proper forum and national or municipal law that shall be applied in a given set of facts.
Once the forum is determined, the domestic substantive law of that state where the proper forum is laid applies. This simply means that before a party to a transaction can recover for the damages caused by a breach in the transaction, he still has to determine his rights and obligations in national law, which is yet to be determined by resorting to the private international laws of as many countries involved. This poses a serious problem in international transactions as well as in the movement of goods, not to mention the various injustices that cannot be properly remedied owing to these complexities.
The traditional system in relation to international transaction is the interplay of the conflict of law rules and the domestic legal system. “The Domestic – Conflict Model correspond to a Westphalian world view where international sales transactions were to be dealt with by domestic courts resorting to domestic conflicts rules to determine whether local or foreign domestic sales law was to be applied ”. This legal system adheres to the multifarious and diverse systems governing contracts. The said system entails high financial costs and causes the serious problem of forum shopping.
The uncertainty as to the rights and obligations of the parties to an international contract brought by cross-border differences has been aggravated. Uncertainty has become the common problem brought by the differences and diversity of substantive laws, which is not readily available among the parties. This situation has awakened the urgent need for a uniform set of rules not only for the selection of, but more particularly on the substantive rights and obligations of the parties to an international contract of sale of goods.
The United Nations Convention on Contracts for the International Sales of Goods (UN-CISG for brevity) was drafted and signed in the year 1980 in Vienna, Austria. “The Convention establishes uniform legal rules to govern the formation of international sales contracts and the rights and obligations of the buyer and seller. ” Commonly known as the “Vienna Convention” owing to the city where it was drafted, this should not however give rise to confusion as to other conventions held in the same city. In the year 1988, the CISG was regarded as a multilateral treaty binding states-signatories.
“It has been widely applied in international commercial transactions in the past twenty years” . It was on January 1, 1988 that ten major states ratified the said convention and incorporated the same as part of the law of their respective lands and as a source of substantive law. These states are called as the “Contracting Parties”. In the year 2006, seventy (70) countries had acceded and accepted the provisions of the CISG making the latter an authoritative and controlling source of substantive law in matters involving international transaction more particularly in the international sales of goods.