Is the CISG Benefiting Anybody?

Abstract

The Convention on Contracts for International Sale of Goods was supposed to increase legal certainty and to reduce the transaction costs of international buyers and sellers. The paper argues that none of these goals has been met. A survey of 181 court decisions and arbitral awards applying the CISG shows that the vast majority of international buyers and sellers, although they operate in an international setting, do not address the issue of the law governing their contract, irrespective of the value at stake. Although the data are not easy to interpret, it seems to follow that they are just not concerned with the legal regime governing their contracts and that they are more generally unsophisticated legally speaking. As a consequence, increasing legal certainty does not benefit them ex ante, and they do not incur the transaction costs that a harmonisation of the law of sales could save. It is true that a few of these parties do provide for the applicable law and seem to be more sophisticated. But the paper further argues that even they do not clearly benefit from the international harmonisation of the applicable law, because of its limited scope.

Keywords: Sales, International Contracts, International Commercial Law, Harmonization, Transaction Costs