In order to comply with the strict regulations requested by the different types of structure and legislation on German and European territory, companies must be aware of commercial regulations specific to their business domain.
Following the European Guidelines and the United Nations Convention on Contracts for the International Sales of Goods is one of the most relevant instruments of international trade law.
Further information on CISG: The UN Sales Convention (United Nations Convention on Contracts for the International Sale of Goods, CISG) is an international contract that governs the law applicable to international sales of goods. The ratification of the CISG is directly applicable to domestic law within the meaning of Art. 3 No. 2 EGBGB and automatically applies to all contracts for the purchase of movable property between a buyer or seller based in Germany and his contractual partner with a branch in one other of the 89 contracting states (as of 2018). Exceptionally, the CISG is not applicable to sales contracts for certain groups of goods, such as consumer goods, electricity, or ships, unless the applicability of the CISG is expressly contractually agreed by the contracting parties.
While it was still common a few years ago to almost reflexively exclude the CISG by contractual agreement, more differentiated decisions are now often made. Rightly so, because the CISG can have advantages over the HGB / BGB.
Main areas of activity in the UN Sales Convention (CISG):
- Defects and warranty in the CISG: notifications of defects, inspection and testing obligations, and notification obligations according to Articles 38 and 39 CISG;
- Liability issues: exclusions and limitations of liability in the CISG;
- Compensation: Assertion of compensation within the scope of the CISG;
The CISG from the perspective of a German legal practitioner
The regulatory system of the CISG has a structural similarity to that of the BGB / HGB. With regard to certain individual questions, however, the CISG and BGB / HGB can lead to different legal consequences.
In the past, the exclusion of the CISG was quite common. A clause such as “This contract is subject to the substantive law of the Federal Republic of Germany to the exclusion of the Vienna UN Sales Convention (CISG)” was and is always widespread in international sales contracts for the delivery of goods. This design is not always advantageous for German users of the law, regardless of whether they are acting as importers or exporters. Because if one deals more closely with the regulations and application practice of the CISG, advantages over a BGB / HGB contract statute become clear. This requires a thorough examination of the contractual and business arrangements in each individual case in advance. Practical experience shows that this effort can be worthwhile.
We are open to reviewing and advising on CISG/BGB and HGB contracts and negotiations in order to find the best suitable framework for your partnerships.