Uniform Commercial Code v. The Vienna Convention on the International Sale of Goods - A Comparative Analysis
13 Pages Posted: 18 May 2013
Date Written: May 18, 2013
This paper provides a basic study as to the origins of the UCC and the CISG and a comprehensive enquiry as to how and why they differ in substance and operation. Both of these instruments have been drafted with the sole intention of uniformity in laws. However, the primary difference in the two can be seen at first glance in reference to their area of operation. The CISG is adhered to by countries constituting nearly two-thirds of world trade. That is a ‘success rate’ of 67% approximately. However this, as opposed to the area of operation of the UCC, which has been ratified in forty-nine out of fifty states in the US, give it a ‘success rate’ of 98%. The reason for this is evident in the manner in which multilateral conventions work. Such conventions are the result of negotiations between countries highly diverse in legal systems and beliefs. One major difference that usually arises in the drafting and negotiation stages of any international multilateral treaty is that of Common Law and Civil Law. In fact, as the CISG is based on the UCC, it has a civil law approach. This does not bode well for Common Law countries such as the United Kingdom and India, which are not signatories to the convention. Therefore, while the CISG may have a wider range in terms of geographical magnitude, the success rate of enactment is lower than that of the UCC due to cultural and financial diversity amongst nations, which is bound to be lower in case of states in a federal set-up, such as in the US.
Therefore, there are bound to be certain differences, both fundamental and cosmetic in their processes. The instant paper seeks to provide an understanding as to what those differences are. The paper will be aimed at answering some of the basic and complex questions relating to the UCC and the CISG, which are as follows: •What are the origins of the UCC and the CISG? •What have been the issues and problems faced by the UCC and the CISG at the stages of conceptualization, drafting, negotiation and ratification? •How does the UCC differ from the CISG in substantive law, procedure and in operation?
The arguments in favour of the UCC and the CISG are more or less the same - those relating to uniformity of laws leading to more stability and predictability in commerce. However, there remains the vital issue of ratification. There is a stark difference in the acceptance rates of the two, as will be evident in the paper. One of the main reasons given is the cultural and economic diversity that the CISG has to face. Therefore, it is hypothesised that such multilateral agreements would work best when agreed upon by smaller number of parties.
Keywords: Uniform Commercial Code, International Convention on Sale of Goods, Unification, Law, Ratification
JEL Classification: K11, K12, K33
Suggested Citation: Suggested Citation