YEAR 2020 No 3
Mariana Fontes da Costa
On September 23, the Portuguese Government provided to the Secretary-General of the United Nations its instrument of accession to the United Nations Convention on Contracts for the International Sale of Goods (CISG), which is expected to enter into force in Portugal on October 1, 2021.
This is an extremely important milestone for all Portuguese entrepreneurs who develop their trade activities across national borders and an event long awaited by those who dedicate themselves to the study of international commercial law, or, more strictly, to the study of the law governing cross-border commercial relations between private economic operators.
Approved on April 11, 1980, by the United Nations Conference on Contracts for the International Sale of Goods, which took place in Vienna within the United Nations Commission on International Trade, CISG has been asserting itself, throughout its 40 years of existence, as one of the most successful international instruments for legislative harmonisation, having already been ratified by 94 States.
Among the CISG Contracting Parties, there are countries all over the globe, from all cultural, political and economic contexts and from all legal fields; hence, one of the main characteristics recognised of this instrument is that it represents a compromise between different legal systems, especially between the Roman-Germanic systems and the common law systems. CISG includes, for example, all countries in the European Union, with the exception of Ireland and Malta (and in Portugal, only in October 2021) and Brazil, where CISG entered in April 1, 2014.
According to the preamble to the Decree no. 5/2020, of 7 August (which approves CISG), the United Nations Convention on Contracts for the International Sale of Goods aims to promote security and legal predictability regarding the legal regime of international sale of goods through the removal of legal obstacles to international trade, namely in determining the applicable law.
This purpose of increasing harmonisation of the legal rules of international trade relations has been consistently promoted by the United Nations Commission on International Trade Law (UNCITRAL), by the International Institute for the Unification of Private Law (UNIDROIT) and by the Hague Conference on Private International Law (HCCH) - the “three sisters”, in terms of harmonisation of international commercial law - and arises from the realisation of the profoundly harmful impact that diverging from national legal solutions have on the internationalisation of companies (especially in the smaller ones) and in promoting cross-border commercial relations.
It is also intended to promote the adoption of uniform rules on the basis of equality and mutual benefit, mitigating possible discrimination and opportunistic behavior, harming the weaker party. Hence, one of the characteristics (critics?) pointed out to CISG is that it favours, relatively, the buyer over the seller. It is, for example, the case of article 36, paragraph 1 of the Convention (as opposed to article 914 of the Civil Code), which states that [the] seller is responsible, according to the contract and this Convention, for any lack of conformity [of the goods] that existed when the risk was transferred to the buyer, even if the lack of conformity only appears at a later time.
In favor of a serious exercise of impartiality and transparency, it must be recognised that this purpose of creating and implementing a unified and balanced legal regime to regulate the international sale of goods is hampered by the wide possibility of creating reserves that is granted to the parties, in Articles 92 to 96; as well as the limited scope of application of the Convention, as identified in Articles 2 to 5; and, above all, for the possibility of an opt-out, granted to the parties, that enters into the international sale contract, under the terms of article 6 of CISG.
However, these are compromising solutions, aimed at avoiding some of the errors that led to the failure of the 1964 Hague Conventions. Its impact, in the global context of application of the Convention, does not overshadow the role that it has been successfully playing in reducing the insecurity associated with the determination of the substantive law applicable to international sale of goods, as well as on the role of reference it has been assuming before other instruments of harmonisation of international commercial law (such as UNIDROIT), and even in the reforms of national laws in the scope of sale contracts.
CISG consists of 101 articles and it is divided into 4 parts: the first part regulates the scope of the Convention and its general provisions; the second part, which begins in article 14, regulates the formation of the contract; the third part, beginning with article 25, regulates the rights and obligations of the buyer and seller, as well as the regime of non-performance of the contract; and the last part, beginning with article 89, contains the final provisions, regulating matters such as the scope of time, reservations and other declarations of the parties and its entry into force.
Although not completely strange to a lawyer familiar with the Roman-Germanic system, the legal regime enshrined by CISG presents some significant differences compared to the Portuguese regime of buying and selling, which will require an effort of knowledge and adaptation. And if that effort may have already been imposed, sporadically, on national operators, by virtue of the spatial application rule enshrined in article 1, paragraph 1, b) of the Convention (rules of Private International Law), it is obvious that this requirement is now placed with increased urgency.
It will help in this process of familiarisation with the legal regime enshrined by CISG, which national legal operators are now asked to do, the experience of other countries, such as Brazil, and the valuable collection of consultation materials in free access in UNCITRAL website (highlighting the collection Case Law on UNCITRAL Texts). Law faculties will also play a very important role here, called for a critical and comparative training and dissemination work of a legal regime that will soon have an impact on the daily life of the Portuguese business fabric.
[Mariana Fontes da Costa, Assistant Professor at the Faculty of Law of the University of Porto and Researcher at CIJE]