Contracts for International Sale of Goods and Common European Sales Law: A Comparative Analysis - Research Paper Example

Contents Introduction Contract for International Sale of Goods Common European Sales Law 5 Findings 8 Conclusion 8 References 9 Contracts for International Sale of Goods and Common European Sales Law: A Comparative Analysis Introduction The document that governs all international trade agreements is known as United Nations Convention on Contracts for International Sale of Goods1. The law is also called Vienna Convention2. The document houses a universal sales contract which has to be followed in order to do legal international trade and business3. Recently, the agreement is modified by eighty nations which have the significant volume of international trade in their hands on annual basis4. The modification occurred in 2013 and it made the featured sales law, the most commonly applied and followed uniform trade legality in the world5. Contract for International Sale of Goods Historically, the law was developed by United Nations Commission on International Trade Law and was signed at Vienna in 19806. The law was never amended until 2013 and it remained pretty much applicable in the international business even in its crude form7. The law was enforced in 1988 as an international standard for governing trade agreements across borders in 1988 and at that time, it was modified and accepted by total of eleven nations8. The law of International Sale was operationalized in order to facilitate the international traders to do business9. The law cancelled all local laws concerning sales of goods and provided the generally acceptable source of closing international deals10. The law helped the international traders by saving their time which they spent in understanding and applying local laws of sale on international transactions11. The CISG is identified as the most important and historical success of UN’s Trade Law Department12 because the contract is accepted and followed by countries located in every continent of the world13. Additionally, it is being applied as a mechanism of doing international trade by every nation regardless of its economic development stage. The agreement is also applicable in an array of social, cultural and economic conditions14. The vocabulary of the contract identifies the involved nations as contracting states15. The nations are blessed with the option to nullify some of the contract’s aspects which appear irrelevant to their legal systems. In the globalized world of commerce, the agreement is considered as one of the most significant developments of the 20th century16. The importance of CISG is backed up by its concern for making the international trade easy and simple and thusly, it made the concept of globalized business a reality in the present times. The CISG is identified as the most effective international trade instrument in the entire world. The contract is famous because it allows the contracting states to eliminate a few aspects in order to make it suitable for their individual requirements17. Some of the nations have modified the agreement but as many as fifty six of them have decided to follow the document in its original form. The Event of William C. Vis International Commercial Arbitration Moot is held in order to inform law students about CISG and the changes that took place in it18. The ceremony is organized every year after one week of Easter in Vienna. The Event is managed by the administration of Pace University. The law generally applied on the transactions which are intended to happen between two parties (contracting states) who operate in different geographical locations. The CISG’s application is also warranted when there is a significant dispute between the sale laws of the countries material to an international trade contract19. The application of the law is limited to business transactions only and personal exchanges are not governed by the law20. The interpretation of the featured law must be performed according to the universal definition of the convention. The convention is developed in order to facilitate international trade amongst nations of the world and the agreement must not be interpreted in any other way. The language of the contract must also be kept simple and traditionally21, the contracts under CISG are formed by using English as a medium of written communication. The disputes arising in international trade are resolved with the help of legal framework called private international law22. The CISG requires the parties to write the contract down to be safe but it also entertains oral and verbal agreements as legally binding23. The contracts are written down and signed in order to keep the record in virtually each and every trade transaction that occurs across borders. CISG is not a complete system for doing international trade and therefore, the parties are required to use local trade laws in order to cover the weaknesses of the most applied mechanism of international trade in the world24. The CISG requires an offer to be presented to a living person and this offer must particularly identify the offeree in order to become valid25. The CISG considers the original offer as cancelled, if the offeree changes the conditions of the initial statement whereas, the legal framework considered the roles of offerer and offeree reversed upon happening of abovementioned event26. The seller must provide the purchaser with the goods and all relevant documentation. The purchaser must also practice due diligence and ensure to look for any irregularities at the point of exchange. The system of CISG is designed and developed to help the international traders in the process of doing worldwide business. The core objective of the convention is to take the burden of following local trade laws from the shoulders of global businesses because it will delay the transactions unnecessarily27. The globalized world of commerce requires timely exchanges in order to remain in business. The tradition of outsourcing is significantly benefitted from CISG as raw materials and finished goods can move in and out of various countries on a timely basis28. Common European Sales Law The Europe and rest of the world that is supposedly travelling towards adopting Americanization have a historical grudge29. The presence of rift between the two factions has resulted in creation of different laws30. The European nations do not want to do business with other realms and therefore, developed international trade laws which facilitate trade amongst European nations31. The international sales law in Europe is called A Common European Sales Law. The law is being developed by EU in order to tune the international sales law across Europe32. The scope of the legal framework is limited to help international trade amongst European nations and it also places barriers by using different languages and currencies to limit the level of trade of European nations with non-European ones33. The EU has successfully implemented common currency of euro so that the member states can fight the supremacy of dollar in the international financial and money market34. The CESL is very specific in terms of governing the transactions and it only applies to business to business and business to consumer trade and its application is not limited to international trade and therefore, it can be used to govern local trades as well35. The amendment proposed to limit the application of CESL on international trade only and its translated version can also be used to manage contracts between European and non-European nations upon mutual consent36. Conventionally, the legal framework of CISG is deployed whenever Europeans and non-Europeans do business with each other37. The CESL is not able to propose an entire way of managing the international transactions as it is incapable of guiding the parties about possible remedies of nonperformance and default38. The local laws must be consulted in order to find appropriate solutions. Based on the presence of abovementioned deficiency, the parties are suggested to select the governing law in addition to CESL. The laws of home countries are traditionally followed from where good has to be transferred. The application of CESL is totally optional and it is purely the matter of discretion for both parties until one of them spur application of law. The CESL is not approved by the Council of EU and still, it is the subject of great debate in Union. The supporters of the reform was expecting to get the new legal policy passed before 20th anniversary of Internal Market but the goal remained unattainable because the speed of suggested unlikeliest possibility of new law any time soon. The matter is however, under the consideration of the Council of Ministers. The impact of proposal on international was evaluated and it was inferred from the findings that loneliness of England will be further aggravated as it will become very difficult for European nations to do business with the country. The currency and language differences will get stronger only by passing the new trade law. The economic and political experts are viewing the new law with skepticism as it will fuel the rift between America and Europe. The passing and implementation of law will result in loneliness of EU in the international arena. The new trade possibilities will die out whereas, rest of the world consider Europeans as unwilling to do business with it. The CESL does not have any legal support and logic to it because it is based on traditional mindset of the past times when Europeans and Americans did not want to do business with each other as they allegedly made decision on the basis of hatred. The humanity is facing global problems and issues. These issues cannot be managed and fought off without pooling of resources and joining hands in order to cause collective betterment of the human race. The humanity’s betterment and future survival is heavily dependent on Europe’s ability to let go of the hate and play its much needed role in terms of making this world a better place to live. Findings The Europe and rest of the world that is supposedly travelling towards adopting Americanization have a historical grudge. The European nations do not want to do business with other realms and therefore, developed international trade laws which facilitate trade amongst European nations. The EU has successfully implemented common currency of euro so that the member states can fight the supremacy of dollar in the international financial and money market. Conventionally, the legal framework of CISG is deployed whenever Europeans and non-Europeans do business with each other. The CESL is not able to propose an entire way of managing the international transactions as it is incapable of guiding the parties about possible remedies of nonperformance and default. The local laws must be consulted in order to find appropriate solutions. The supporters of the reform was expecting to get the new legal policy passed before 20th anniversary of Internal Market but the goal remained unattainable because the speed of suggested unlikeliest possibility of new law any time soon. The currency and language differences will get stronger only by passing the new trade law. The new trade possibilities will die out whereas, rest of the world consider Europeans as unwilling to do business with it. Europeans and Americans did not want to do business with each other as they allegedly made decision on the basis of hatred. These issues cannot be managed and fought off without pooling of resources and joining hands in order to cause collective betterment of the human race. Conclusion This paper has reviewed and analyzed various historical trade laws and found that CISG was developed to allow swift cross border trade. The CESL is being developed by supporters of hate between America and Europe. The new law is not expected to be passed because it stands against everything for which the modern world stands for. The Europe and America have to work together in order to face the worldwide challenges of unemployment, recession and global warming. 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