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Commercial Law Term Paper


For a long time, companies from different nationalities have engaged in trading activities with each other without having any form of standardized trading policy between them. Each country had different laws, policies and institutions that were applicable in trading activities. In 1980, The United Nations engaged countries internationally to come up with policies that would bring harmonize the laws under one statutory body that would be applicable for trading parties from different states across the globe. The Convention on the International Sales of Goods also known as the Vienna Convention was consequently signed in 1980 after 12 years of drafting and came into effect in 1988. As of 2007, Bianca and Michael (1987) indicate that Nations 70 states from different legal traditions had signed up for the use of the common law. Despite this success, Bianca and Michael indicate that influential nations such as the UK, Japan and Hong Kong are not subscribed to the use of this law. The UK instead prefers to use of the legal provisions of the Sales of Goods Act 1979. This analysis shall delve into the principles of the contract formation of the Vienna convention CISG and compare it to UK’s Sales of Goods Act establishing the merits and demerits of each and where they are both best applicable.

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The provisions that are contained in the CISG were primarily guided by the fact that the UN sought to bring harmony in an environment where different legal traditions were applicable therefore the laws that were drafted were mainly guided by the civil law principles of contract law (Barry). On the other hand, the Sales of Goods Act provision takes a different approach opting to draft its provisions based on common law rules. Thus, the British laws make them more restrictive compared to those of CISG. Based on these provisions and differences in their drafting, the remedies offered under the CISG may differ to those offered under the Sales of Goods Act. Despite this difference the CISG and the British law are in harmony regarding the conformity to contract provisions. For instance, both indicate that if the contract agreement is not met, then the buyer can request for a refund “within a reasonable time.” The British law further includes provisions for damages of an extensive period which is up to six years.

Key remedies offered under the Sales of Goods Act include the repudiation of contracts. In instances where there is a monumental breach of contract, then the complainant is entitled to term the contract as repudiated and is longer obliged to honor any further performance as provided by the contract. The British law provides a distinction between conditions ad warranties in such a way that only in cases of breach of condition can one a claim of repudiation of contract but not cases of breach of warranty (Legislation.gov.uk). On the other hand, the Vienna convention does not have provisions for such distinctions. The remedy provisions for repudiation under the CISG law are only present if there is a “fundamental breach” of contract. This limits the law in cases of disputes where the scope and extents of “fundamental breach” cannot be clearly ascertained so as settle a claim or dispute between aggrieved parties.

The British law and the Vienna convention law differ in terms of the remedies offered. The CISG offers specific performance as the most preferred form of remedy. While the British law allows specific performance and compensation as forms of remedy, the Sales of Goods Act prefers compensation to specific performance. Under Article 28 of the Vienna convention, the law states that specific performance shall be awarded on grounds that the civil laws of the respective state permit the use of the law (Barry). This ensures that the existing systems of the states that are subscribed to the convention are not interfered with.

While there are these glaring differences between the CISG and the Sales of Goods Act, the Vienna convention further falls short of covering key aspects contractual law. For instance, the CISG does not contain any provisions that can be used to determine the validity of a contract. This grants the domestic states the liberty to apply their laws in determining such cases consequently nullifying the purpose and objective of the Convention which, for all intents and purposes, was meant to harmonize these laws for common interpretation, The British law on the other hand, in Part II Formation of the contract, provides a clear definition of what is stands as a valid contract.

The scope of the Vienna Convention laws is limited in terms of the provisions that it has for purchasers globally. Buyers that purchase goods for personal use are not contained within the bracket of being international per se (Bianca and Michael). The justification for this may be provided by means that the Convention does not concern itself with commercial law but contract law instead. However, in some cases, the CISG laws may be applied for consumers who buy goods from foreign countries. This creates inconsistencies as to what aspects of consumer provisions do the Convention laws cover and which ones do they not cover.

Comparing these critical aspects of contract formation between the CISG Vienna Convention and the Sales of Goods Act of the UK, it is quite evident that they contrast each other in various ways. The CISG lacks consistency to great degrees hence subjecting it to different interpretations in case of any dispute. This is quite understandable since the Convention was intent on harmonizing the legal traditions of different states under one law. The Sales of Goods Act on the other hand is more concise and definitive in the sense that it has clear provisions such as the preferred remedies and how they are applicable, repudiation of contract definition and also the distinction of what stands as a valid contract. This makes the Sales of Goods Act a well-established piece of legislation that has been in practice for decades even before the convention indicating the reasons as to why the UK was and still is reluctant to abandon it and subscribe to the Vienna convention.

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Works Cited
Barry Nicholas. “The Vienna Convention on International Sales Law.” Law Quarterly Review (1989) 201-243.
Bianca, C M, and Michael J. Bonell. Commentary on the International Sales Law: The 1980 Vienna Sales Convention. Milan: Giuffrè, 1987. Print.
Legislation.gov.uk. “Sales of Goods Act 1979.” Legislation.gov.uk, December 6, 1979, www.legislation.gov.uk/ukpga/1979/54 Accessed on April 28, 2019.

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