Legal Issues in the Application of Cisg in Online Sale (E-Commerce) Contracts

In 1980, the United Nations Convention on Contracts for the International Sale of Goods (CISG)1 was adopted, which entered into force worldwide in 1988 as a uniform law for the international sale of goods. The concept of uniformity is reflected in the preamble to the United Nations Convention on Contracts for the International Sale of Goods, according to which the Convention is intended to be the adoption of a single set of rules for contracts for the international sale of goods. This eliminates legal barriers and promotes the expansion of cross-border sales in international trade.2 Over time, the reality of international trade has improved considerably with the development of electronic means of communication. The parties have begun to conclude international sales contracts using electronic means of communication; Even in cases where the formal contract was concluded by conventional means, the parties then corresponded with each other electronically in order to settle issues such as the performance of the contract. Given the legislative history of the United Nations Convention on Contracts for the International Sale of Goods, it is conceivable that the drafters of the Convention only took into account current communication technologies existing in the 1970s. As already mentioned, the drafters of the Convention could not foresee the significant development of electronic communications technologies in contracts for the international sale that are not included in the United Nations Convention on Contracts for the International Sale of Goods. The absence of electronic commerce contracts in the Convention could be an important legal problem He explained that this case could be by far the only reported case in which Chinese courts had dealt with the interpretation of article 2 (a) of the United Nations Convention on Contracts for the International Sale of Goods. The judgment in the present case suggests that the exclusion clause from the application of the United Nations Convention on Contracts for the International Sale of Goods covers the acquisition of goods for consumption. When goods are purchased for domestic transactions for commercial purposes, the United Nations Convention on Contracts for the International Sale of Goods should continue to apply.

In March 2019, plaintiff Yang Jianbing, who operates a farm in Canada, used an instant messaging tool to communicate with sales staff of the defendant Yucheng Huayu Machinery Manufacturing Co., Ltd. (禹城华禹机械制造有限公司) in Shandong Province, China. The plaintiff then purchased farm equipment from sales personnel and asked the respondent to export the goods to Canada. The method of delivery negotiated orally between the parties was “door-to-door”, i.e. the goods had to be delivered to the claimant`s address. The trial court agreed that, since the plaintiff and the defendant had their places of business in different countries, there must be an international contract for the sale of goods; in the present case, the United Nations Convention on Contracts for the International Sale of Goods took precedence over domestic law; Given that FOB was identified in the declaration form, under FOB`s trade rules, the risk of the goods passed to the claimant when the defendant delivered the goods to the first carrier and the claimant had to pay the sea freight and bear the risk of the goods that were not cleared through customs. The plaintiff appealed, claiming that his delivery address was a home address and that he had purchased the goods for domestic use. According to article 2 (a) CISG, the Convention does not apply to “sales of goods purchased for personal, family or household use”. Therefore, the United Nations Convention on Contracts for the International Sale of Goods and the FOB are not applicable to transactions. Foreign law firms began exploring the Chinese legal market in 1992. After a 12-year period of growth that began in 2002, they have gradually declined from their 2014 peak. In 2021, based on the principle of reciprocity, the Xiamen Maritime Court decided to recognize the decision of the High Court of Singapore appointing a bankruptcy office holder.

The trial judge shares his view on the criterion of reciprocity in applications for recognition of foreign bankruptcy judgments. The strong development of communication technologies plays an important role in changing the behaviour of enterprises, which requires the development of new regulations to regulate business relations. The drafting of new legislation is much slower than the development of communication technologies. Therefore, any legislation that provides legal solutions for participation in a particular technological progress can quickly become obsolete after technological development. Given that the provisions of the United Nations Convention on Contracts for the International Sale of Goods are limited to the conclusion of contracts for the international sale of goods and that electronic commerce includes such contracts, the United Nations Convention on Contracts for the International Sale of Goods, if it could offer a practical solution for electronic commerce transactions, would constitute a remarkably uniform set of rules for cross-border e-commerce contracts for the international sale of goods.7 2 The CISG is specifically intended to fill the gaps in which situations governed by the Convention which are not expressly governed by this Convention must be dealt with in accordance with the general principles of law on which it is based.8 In the absence of this principle, disputes must be settled by applying the domestic law applicable under the conflict-of-laws rules. Therefore, matters relating to contracts relating to electronic commerce are not explicitly governed by the Convention. This paper examines whether the rules of the United Nations Convention on Contracts for the International Sale of Goods can be applied to electronic commerce transactions. On October 10, 2020, the plaintiff filed a lawsuit in the China District Court, demanding termination of the sales contract with the defendant and reimbursement of the payment of CNY 170,156 for the goods. In today`s competitive business world, the most successful multinationals sell their products through interactive websites in cyberspace to facilitate international customers. When selling online, buyers are not really concerned about the location of the site administration, but they are concerned about the receipt of goods. With regard to the scope of application of the United Nations Convention on Contracts for the International Sale of Goods to determine the location of business websites for online sales, this would be the place of The scope of the United Nations Convention on Contracts for the International Sale of Goods is governed by Part I of the Convention, which explains its scope and general provisions. The Convention provides parties to international sales contracts with sufficient certainty as to their respective legal rights and obligations.

The United Nations Convention on Contracts for the International Sale of Goods clearly excludes the sale of consumer goods and the auctioning of goods; in the course of enforcement or otherwise by law; securities; ships and aircraft; and electricity.51 On April 25, 2021, the Dezhou Intermediate People`s Court of Shandong Province in China issued its final judgment in a case in which it found that the United Nations Convention on Contracts for the International Sale of Goods applied to a Canadian farmer`s contract to purchase equipment from a Chinese supplier for commercial purposes, which did not constitute a “sale of goods for personal use, family or household use” and therefore fell within the scope of the United Nations Convention on Contracts for the International Sale of Goods. (See Yang Jianbing v. Yucheng Huayu Machinery Manufacturing Co., Ltd. (2021) Mo 14 min Zhong No. 1052 ((2021)鲁14民终1052号)) Although no convention on international electronic contracting is currently in force outside the European Union, these contracts are growing in number and importance and do not exist in a legal vacuum. The Convention on Contracts for the International Sale of Goods (CISG) has been interpreted by its Advisory Council as applying to such electronic contracts. International law, based on the general principles of good faith and equity, as well as customary international law, is an existing and future source of international electronic contracting law. The customary law of international electronic commerce derives from the general practices of companies that conclude contracts by means of electronic communications that are accepted as law, as well as from international treaties and model laws and their interpretations, which have been accepted as authoritative descriptions of such practices.

The United States will decide whether to ratify the Convention on the Use of Electronic Communications in International Treaties (CUECIC), which it proposed to the United Nations Commission on International Trade Law (UNCITRAL) and drafted and endorsed by UNCITRAL. CUECIC pushes the legitimacy and functionality of international e-commerce contracts beyond existing law. U.S. ratification decision-makers should recognize this progress, strengthen the standards of contract freedom promoted by CUECIC, and preserve the legitimacy of customary international law as a complement to the limited rules of the CUECIC treaties. The drafters of the Convention in the 1970s did not see the prospect of a strong development of electronic means of communication and their integration into international sales contracts called “electronic commerce” or “electronic commerce”.3 In fact, there are no specific provisions in the United Nations Convention on Contracts for the International Sale of Goods dealing with the issues raised in connection with contracts concluded by means of electronic communication. electronics worldwide. Currently, a large portion of international sales are done through e-commerce. It is highly unlikely that the Convention will be amended.