The UN Convention on Contracts for the International Sale of Goods is often reflexively deselected by companies in cross-border sales contracts. It is unknown. The entrepreneur suspects that there could be shallows lurking. The UN Convention on Contracts for the International Sale of Goods – perhaps it favours the other party? With the sales law of the German Civil Code (BGB) and the German Commercial Code (HGB), you know roughly what you are getting. You certainly do not want to accept the other party's sales law.
Unfortunately, the other party feels the same way. The other party also does not know the German sales law of BGB and HGB and would thus prefer to agree on its own sales law. It is a deadlock; neither party is willing to budge.
It was precisely this finding that was the starting point for the creation of the UN Convention on Contracts for the International Sale of Goods (= United Nations Convention on Contracts for the International Sale of Goods, CISG). A supranational law was to be created to serve as a bridge to break the deadlock. And it actually fulfills this task quite well: It is modern, well structured, quite readable even for non-lawyers (with a few drawbacks), somewhat similar to our sales law and thus overall comprehensible – and fair. It does not want to favour any party. That is why the UN Convention on Contracts for the International Sale of Goods is not fundamentally particularly buyer-friendly or seller-friendly. However, there are some features that anyone wishing to make an informed decision about whether to accept or even propose the UN Sales Convention in contract negotiations should familiarise themselves with. The following aspects appear to be particularly important:
| UN Sales Convention | Comparison to Sales Law according to BGB/HGB | Buyer-friendly? Seller-friendly? |
| The seller is also liable for damages without fault (or having to be represented) if it violates the contract, e.g. in the case of product defects. | According to BGB/HGB, the following applies: The seller is only liable for damages in the event of fault or need to be represented (there are exceptions but these do not affect the law on the sale of goods). | In this respect, the UN Sales Convention is clearly buyer-friendly. And this can result in a considerable risk for sellers, especially if they are not manufacturers but only retailers: According to the German Civil Code, a retailer is rarely liable for damages if it has delivered a defective product. According to the UN Sales Convention, on the other hand, it is common. |
| Liability for damages is limited to damages foreseeable at the time of conclusion of the contract. | This is not the case in the BGB, at least not in the same way. However, the difference is not as big as is sometimes claimed. This is because the injuring party is usually not liable for ‘completely improbable consequences of damage’. | Here one may assume a small advantage for the seller. As already said, the difference is not big. |
| There are no special standards for the sale of goods that go to a private consumer at the end of the chain (sale of consumer goods). | In the German Civil Code, on the other hand, there is the entrepreneur's recourse under Section 478 BGB and special provisions linked to it, e.g. on the reversal of the burden of proof or the statute of limitations. | The UN Sales Convention is advantageous for the seller here because the law protecting the consumer does not apply accordingly to its disadvantage. The UN Sales Convention thus interrupts the chain of entrepreneurial recourse (at least that's the prevailing opinion). |
| In the event of defectiveness of the purchased goods, the buyer can only demand a "cancellation of the contract" (equivalent to withdrawal) or a replacement delivery under particularly strict conditions, in particular if the non-fulfilment of an obligation constitutes a "material breach of contract". A strict standard is applied here! There should be no material breach of contract if the buyer cannot use the delivered product for the intended purpose but "other processing or the sale of the goods in the ordinary course of business, even if with a price reduction or (not) disproportionate effort, is possible and reasonable" (according to the Federal Court of Justice). | In principle, the buyer of a defective item can withdraw from the contract – provided that the defect has not been remedied by way of subsequent performance. Materiality is irrelevant (exception: the breach of duty is "insignificant"). | Here, the UN Sales Convention is seller-friendly. The seller is not expected to take back goods (usually abroad) so quickly. This shows the efforts of the UN Sales Convention to create a fairly balanced overall system: the seller is to be spared, especially with regard to return transport costs. In return, however, the buyer is granted a claim for damages regardless of fault (see above). Both regulations are to be seen in context. |
| The buyer must examine and complain about the incoming goods – and the complaint must be made within a "reasonable period of time". | The commercial burden of investigation and complaint according to Section 77 HGB is stricter: Investigation and complaint must be carried out "immediately" (without culpable hesitation). In case of doubt, this is a shorter deadline. | In this respect, the UN Sales Convention is clearly buyer-friendly. In practice, it is not uncommon for the deadlines set out in Section 377 HGB to be missed. This is less common in the UN Sales Convention. |
Finally, an important practical note because this often goes wrong - anyone who wants to deselect the UN Convention on Contracts for the International Sale of Goods must not only write: "German law applies". This is because the UN Convention on Contracts for the International Sale of Goods is part of German law. A clean formulation would be: "German law applies, excluding the UN Convention on Contracts for the International Sale of Goods". However, whether this is a good solution must be examined on a case-by-case basis. Important criteria for and against can be found above.
Oliver Korte
