CISG and the Turkish Law

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Contracts for the International Sale of Goods

The growth of the international trade depends on the free flow of goods and services between countries. However, different legal systems, different languages and cultures between countries can cause many problems in trade between countries. To address these issues, the United Nations Convention on Contracts for the International Sale of Goods (CISG), which was prepared by the United Nations and entered into force in 1980, is one of the most significant international conventions regulating the sale of goods between countries all around the world.

Convention Necessity

In the 1960s, international trade increased and the sale of goods between countries became a real necessity. Therefore, in 1964, the International Sale of Goods Law Commission was established by the United Nations General Assembly for the purpose of drafting contracts used in international trade. This commission played an important role in the drafting of the CISG.

International Sale of Goods

The CISG regulates contracts for the international sale of goods. However, contracts must be for the sale of goods only, services, consulting or licensing contracts are outside the scope of the CISG. Parties to contracts must also be of an international character. If the central administration of one of the parties to the contract is located in a different country, this contract falls within the scope of the CISG. However, the CISG does not contain a provision about the jurisdiction of the parties or the applicable law. The CISG briefly includes provisions on the sale, delivery, payment and breaches of contract.

The Contract Priority

CISG is a convention that regulates the content of a contract between the parties and is implemented. The articles of the CISG are applied according to the predetermined provisions between the parties to the contract. In case of any dispute between the parties, the provisions of the contract are applied first. However, when contract terms are unclear or incomplete, the CISG provisions apply in prior.

International Courts and Arbitration Boards

The CISG can also be enforced by international courts and arbitration boards. CISG is not bound by the laws of the countries of the parties. Therefore, it helps to eliminate the differences between different legal systems. CISG provides unity and standardization in trade between countries with different legal systems. Implementation of the CISG helps speed up trade, reduce costs and resolve disputes.

Global Trade

It is important to point out that, CISG also contributes to the increase of trade and the development of globalization. Therefore, many countries have adopted and are implementing the CISG. The adoption of the CISG increases confidence in trade between countries and creates a framework for resolving disputes that may arise between the trader parties.

Jurisdictions

As of today, approximately 100 countries have adopted the CISG. These include all countries that are members of the European Union, major economies such as the USA, Canada, China, Japan, Russia, Turkiye, Brazil, Mexico and South Korea. In addition, many other countries are working to adopt the CISG. Countries where the CISG is accepted are obliged to act in accordance with this agreement when selling goods internationally. The parties to the contract are obliged to sell goods and resolve disputes in accordance with the provisions of the CISG. In this manner, a standardization is achieved in trade between countries with variety of jurisdictions.

Reservations

Countries that are party to the CISG may accept it with certain reservations. These reservations allow countries to accept the CISG in whole or in part, and they usually appear.

Articles of CISG

CISG has a total of 101 articles. Some of the key provisions in the articles of the CISG as follows:

• Article 7, the clause gaps in the contract must be filled according to the intentions of the parties.
• Article 23, according to the CISG, delivery of the goods is one of the most important obligations of the contract. This clause determines where, when and under what conditions the goods will be delivered. The delivery of the goods is completed when the seller delivers the goods to the buyer and the buyer accepts the goods.
• Article 24, when the seller has to deliver the goods is determined in accordance with the business customs in the place where the contract is made or according to the type and quality of the goods, if there is no specified period between the parties.
• Article 25, the seller is obliged to ensure the conformity of the goods to the contract and the specified quality and qualifications. In addition, the goods must be properly packaged, marked and labeled according to their type and nature.
• Article 26, it determines the buyer’s obligation to accept the goods. The buyer should check that the goods comply with the contract and are delivered in good condition. The buyer must have a specific reason not to accept the goods. Among these reasons, the goods are not contracted, broken or damaged, missing, not delivered on time, etc. can take place. The buyer must make any complaints regarding the conformity of the goods within a period of time from the date of acceptance of the goods.
• Article 27, if the price of the goods is not specified in the contract, the prices paid for similar goods and services at the place where the goods are sold are taken into account. The price of the goods depends on the seller’s obligation to deliver the goods, as well as the buyer’s obligation to accept the goods.
• Article 28, if the payment method is not specified in the contract, the payment must be made to the bank account of the seller at the place of business.
• Article 30 regulates the rights of the parties. The parties have their rights arising from the contract. Among these rights, the goods are not delivered, the goods are not suitable, the goods are damaged or broken, etc. can take place. The parties have a certain period of time to use their rights and these periods should be specified in the contract.
• Article 31 regulates contractual damages. If one of the parties does not fulfill the contract, it is obliged to compensate the losses suffered by the other party. Compensation for the damage cannot exceed the price of the goods.
• Article 47, the buyer is obliged to inform the seller of his rights arising from the breach of contract. However, the buyer must wait a reasonable period of time before giving a notice giving rise to the loss of rights, if the seller is entitled to remedy the breach of contract. The buyer’s notification must be made within a period of two years from the date on which the breach of contract is or should be detected.
• Article 48, the seller is obliged to inform the buyer of his rights regarding the breach of contract. However, the seller must wait a reasonable amount of time before giving a notice giving rise to the loss of rights, if the buyer is entitled to remedy the breach of contract. The seller’s notification must be made within a period of one year from the date on which the breach of contract is or should be detected.
• Article 49, in the absence of a notification that causes loss of rights, the rights become time-barred. In general, rights expire within a period of three years, but there are some exceptions that differ from country to country.

CISG Disputes in Turkey

CISG has a very significant place in Turkish commercial law and Turkish contract law. The provisions of CISG are applied before international private law and the parties can bring their disputes before Turkish judicial authorities. istlegal Attorneys at Law provides litigation and advisory services on international contract law and CISG disputes.