A treaty that may govern by default, and how to opt out of it.
Esshaki Legal Media TeamCurrent as of July 2024
Contracts for the sale of goods between parties in different treaty countries
are governed by an international convention unless the parties exclude it —
which many contracts do without realizing they had a choice, and many more fail
to do at all.
Automatic application. Where both parties have places of business in
contracting states, the convention applies of its own force. Selecting the law
of a contracting state selects the convention, not that state’s domestic sales
law, unless the clause says otherwise.
Key differences from domestic law. No writing requirement; a different
approach to the battle of the forms, where a reply with additional material
terms is a counteroffer; no parol evidence rule; a fundamental breach standard
for avoidance; a right to require performance; and a notice requirement for
non-conformity within a reasonable time with a two-year outer limit.
Excluded matters. Validity, property rights, and liability for death or
personal injury.
Exclusion clause. To opt out, state expressly that the convention does not
apply and identify the domestic law that does.
When it may be preferable. For sellers, the fundamental breach threshold for
avoidance is higher than the perfect tender rule.
Incoterms address delivery, risk and cost allocation and should be specified
with the edition year.