Import - Export Management

CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

Nguyen Thi My Hanh

Email: ntmhanh@hcmiu.edu.vn

M.Sc
 Import - Export Management

LEARNING EXPECTATIONS

1. Apply CISG in the reality

2. Construct CISG

3. Implement & monitor activities according to CISG

M.Sc
 Import - Export Management

CONTENTS
1. Overview about CISG

2. Application of CISG

3. Major features of CISG

4. Notes on drafting contracts

5. Content of CISG
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1. Overview about CISG

Commercial Law 2005, Article 3:

Purchase and sale of goods mean commercial activities whereby the seller is obliged to
deliver goods, transfer ownership of goods to the purchaser and receive payment; the
purchaser is obliged to pay the seller, receive the goods and the ownership thereof as
agreed.

 Goods include:

 All types of movables, including those to be formed in the future;

 Things attached to land. 4

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1. Overview about CISG

Contracts for purchase and sale of goods: is an agreement between the parties, according
to which the seller has the obligation to deliver goods, transfer the ownership of the goods
to the buyer and receive payment, the buyer has the obligation to arrange payment,
receive the goods and the ownership thereof.

Contracts for the international sale of goods = Contracts for purchase & sale of goods +
international elements.

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2. Application of CISG
2.1. Article 1, Chapter I, Annex (Uniform Law on the International Sale of Goods, The
Hague, 1964): The present Law shall apply to contracts of sale of goods entered into by
parties whose places of business are in the territories of different States, in each of the
following cases:
(a) where the contract involves the sale of goods which are at the time of the conclusion of
the contract in the course of carriage or will be carried from the territory of one State to
the territory of another;
(b) where the acts constituting the offer and the acceptance have been effected in the
territories of different States;
(c) where delivery of the goods is to be made in the territory of a State other than that with
in whose territory the acts constituting the offer and the acceptance are effected.
=> The application of the present Law shall not depend on the nationality of the parties. 6
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2. Application of CISG
2.2. United Nation Convention on Contracts for the International Sales of Goods (CISG
1980), Article 1, Chapter I, Part I :

• This Convention applies to contracts of sale of goods between parties whose places of
business are in different States;

• 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.

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2. Application of CISG
2.3. Temporary Regulation on concluding foreign trade contracts (Regulation
4794/TN-XNK, issued by the Ministry of Trade on 31/7/1991), Vietnam:

• Foreign trade contracts are those with international elements;

• International elements: Traders are of different nationalities; Goods are

transported across borders; Payment currency is foreign to at least one party.

=> Nationality is one of the most important elements.

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2. Application of CISG
2.4. Commercial Law 1997

• Contracts for purchase and sale of goods with foreign traders are contracts entered into
between a Vietnamese trader and a foreign trader

- What is the crucial element?

- A contract entered into between a Chinese trader and a Vietnamese one, both
based in Vietnam?

- A contract entered between two Vietnamese traders based in different countries?

https://thuvienphapluat.vn/van-ban/thuong-mai/Luat-Thuong-mai-1997-58-L-CTN-40647.aspx

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2. Application of CISG
2.5. Commercial Law 2005 (updatest); Chapter II, Article 27.1.:
• International purchase and sale of goods shall be conducted in form of export, import, temporary import
for re-export, temporary export for re-import and transfer through border-gates.
• The movement of goods across national and/or customs borders.
• Contracts without the movement of goods across national and/or customs borders will not be
considered “contracts for the international sale of goods”;
• Commercial Law 2005 may not govern all cases. Traders may refer to Civil Code 2005 (civil relations
involving foreign elements) or other Laws;
- Real estate sold to foreigners?
- Nationality?
https://thuvienphapluat.vn/van-ban/thuong-mai/Luat-Thuong-mai-2005-36-2005-QH11-2633.aspx
https://thuvienphapluat.vn/van-ban/bat-dong-san/Luat-Nha-o-2014-259721.aspx
https://moj.gov.vn/qt/tintuc/Pages/nghien-cuu-trao-doi.aspx?ItemID=1251
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2. Application of CISG
• 90/2002/TT-BTC, on-spot export means that goods produced in Vietnam for sale to foreign
traders but delivered to other enterprises based in Vietnam and designated by foreign
traders.
• On-spot exporting enterprises mean enterprises engaged in on-spot export activities.
• On-spot importing enterprises mean enterprises that receive goods from on-spot exporting
enterprises as designated by foreign traders.
i.e. Toan Phat company in Hung Yen signs contract with Taifeng company in Taiwan. Toan Phat
company is assigned to deliver the products to Gia Loc company in Hai Duong, which does
machining for Taifeng company. Which one is on-spot exporting company? Which one is on-
spot importing company?

https://vanbanphapluat.co/90-2002-tt-btc
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CISG Definition
As a specific form of civil contracts, they are, therefore, governed by both
commercial law and civil law:

Contracts for the international sale of goods is the agreement between parties
whose places of business are in different countries or separate customs areas,
according to which the Seller (the Exporter) is obliged to deliver goods, and transfer
the ownership thereof to the Buyer (the Importer); the Buyer is obliged to receive
of the goods and the ownership thereof, and arrange payment.

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3. Major features of CISG

General features

• Principles: freedom and voluntariness (Art. 389 Civil Code 2005);

• Subjects: traders;

• Content: rights and obligations;

• Bilateral, consensual contracts, with consideration.

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3. Major features of CISG

Particular features
• Subjects: places of business in territories of different States/separate customs
areas;
• Objectives: move across State/customs border;
• Payment: foreign currency to at least 1 Party;
• Various sources of governing law:
 National law
 International will
 Commercial practice
 Legal precedent 14

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Legal validity of CISG

• Subjects: legal;
• Objects: legal;
• Form: legal
 CISG: oral, in writing or by specific acts;
 Vietnam aw: in writing or equal forms;
• Content: Legal (includes legally compulsory articles); Dependent on sources of law:
 Vietnamese Law:  International Law:
 Commercial Law 1997: 6 compulsory  CISG, Article 14: 3 articles;
articles;  CISG, Article 19: 6 articles;
 Civil Code 2005: 8 commonly used  English Law: commodity, quality, price;
articles;  French Law: commodity, price.
 Commercial Law 2005: no requirement;
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4. Notes on drafting contracts

• Content: detailed, consistent;
• Word choice: clear, precise;
• Language: official, popular
 Seller and buyer are free to choose language;
 VN customs regulations: Vietnamese or English; or certified translation from other languages;

- Copies of different languages?

- A Vietnamese company signs CISG with a Cambodian company. During negotiating & signing
contract, they use English. After signing contract, to be convenient in complementing contract, they
agree to translate the contract into Vietnamese and Laos. However, in Vietnamese and Cambodian
version, there are some inconsistent articles. What should they do?
https://www.americanbar.org/groups/gpsolo/publications/gp_solo/2011/april_may/drafting_multiple-
languagecontractswhenyouonlyspeakenglish/
• https://luatminhkhue.vn/ngon-ngu-trong-hop-dong-voi-doi-tac-nuoc-ngoai-duoc-quy-dinh-nhu-the- 16
nao.aspx
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