The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a multilateral treaty that establishes a uniform framework for international commerce. Adopted in 1980 and in force since 1988, the CISG aims to reduce barriers to international trade by harmonizing the rules governing the formation of contracts and the rights and obligations of buyers and sellers involved in the cross-border sale of goods.

Currently ratified by over 95 countries, including major trading nations such as the United States, China, Germany, and Brazil, the CISG is one of the most successful international commercial law instruments. It serves as the de facto global standard for the international sale of goods. The official text of the Convention is available through the UNCITRAL website.

The Advantages of the CISG

  1. Uniformity Across Borders
    By providing a single legal framework, the CISG reduces legal uncertainty and transaction costs. Parties to contracts don't need to navigate the complexities of foreign legal systems when disputes arise.
  2. Neutrality
    The CISG offers a neutral set of rules, which is particularly helpful in negotiations between parties from different legal traditions. This neutrality often facilitates smoother contract formation and resolution of disputes.
  3. Party Autonomy
    Parties may opt out of the CISG entirely or modify its application to suit their specific needs (Article 6). This flexibility allows businesses to tailor contracts to their preferences.
  4. Modern, Commercially-Focused Provisions
    The CISG is grounded in the practices of international trade and avoids technical legal distinctions (like “consideration” in common law), making it more aligned with commercial realities.
  5. Judicial and Arbitral Support
    A growing body of case law and arbitral decisions helps guide interpretation, facilitated by databases such as CISG-online and the UNILEX database.

The Disadvantages of the CISG

  1. Incomplete Scope
    The CISG does not govern all aspects of international sales contracts. Issues such as validity of the contract, title transfer, and liability for death or injury are excluded (Article 4).
  2. Interpretation Challenges
    Despite its goal of uniformity, national courts sometimes interpret CISG provisions inconsistently, especially where domestic legal traditions influence decisions.
  3. Limited Awareness and Training
    Many practitioners and businesses remain unaware of the CISG or unsure of how to apply it, resulting in it being overlooked or excluded from contracts unnecessarily.
  4. Opt-Out Trends
    Some companies automatically opt out of the CISG in favor of familiar national laws, particularly in common law countries like the United States and the United Kingdom (which has not ratified the CISG).

Scope of Application of the CISG

The CISG applies under the following conditions:

  • International Transaction: The contract is between parties whose places of business are in different states.
  • Contracting States: Both parties are located in CISG Contracting States, or the rules of private international law lead to the application of the law of a CISG state (Article 1).

It applies only to contracts for the sale of goods, excluding:

  • Sales of goods for personal use
  • Auctions
  • Sales of stocks or securities
  • Ships, vessels, and aircraft
  • Electricity (Article 2)

A full list of contracting states is maintained by UNCITRAL and can be found here.

The Core of the CISG’s Provisions

The CISG is divided into four parts:

  1. Part I: Sphere of Application and General Provisions
    Establishes when the CISG applies and outlines general interpretive principles (Articles 1–13).
  2. Part II: Formation of the Contract
    Covers offers, acceptances, and other aspects of contract formation (Articles 14–24).
  3. Part III: Rights and Obligations of the Parties
    Defines seller and buyer obligations, remedies for breach of contract, and risk of loss (Articles 25–88). Notable provisions include:
    • Article 25: Fundamental breach
    • Article 49: Buyer's right to avoid the contract
    • Article 74: Damages for breach
  4. Part IV: Final Provisions
    Addresses ratification, reservations, and amendments (Articles 89–101).

The full text is accessible in the UNCITRAL CISG publication.

Conclusion

The CISG is a cornerstone of international commercial law, offering a harmonized and neutral legal framework for cross-border sale of goods. While not without limitations, its broad adoption and practical relevance make it a powerful tool for international traders and legal professionals alike. Businesses engaged in cross-border sales should be aware of the CISG’s implications and consider its application—or deliberate exclusion—in their contracts.

For those interested in further study, leading commentaries include: