The CISG applies either if the parties to a sales contract have their places of business in different Contracting States (Art 1(1)(a)) and they were aware of that at the time of conclusion of the contract (Art 1(2)), or if the rules of private international law of the forum lead to the application of the law of a Contracting State (Art 1(1)(b)).

Article 1(1) is complemented by Articles 91, 92, 94, 95, 99 and 100 CISG. Furthermore, Article 1 CISG must be read in conjunction with Articles 2 to 5.

The definition of the Convention’s applicability in Article 1(1)(a) is autonomous because this provision does not refer to any rules of private international law.

Article 99(2) defines the date from which a State becomes a Contracting State within the meaning of Article 1(1)(a). Article 100 specifies the intertemporal applicability of the CISG. Articles 92 and 93 allow a State to not be bound either with regard to certain of its territorial units (Art 93) or with regard to certain provisions of the CISG (Art 92).

(a) According to Article 1(2) CISG, the diversity of places should be apparent either (1) from the contract; (2) from any dealings between the parties; or (3) from any information disclosed by the parties that they have their places of business in different States. The requirement of ‘objective recognisability’ enhances legal certainty and predictability of the applicable law.

(b) Article 10 CISG, which deals with the question of which out of several places of business is decisive and how cases in which a party’s place of business cannot be established are dealt with.

Article 1(3) CISG states that the nationality of the parties, their civil or commercial character, as well as the civil or commercial character of the contract is not to be taken into account for determining the applicability of the Convention. Thus, Article 1(3) serves the purpose of defining ‘internationality’ and ‘commercial transaction’ for the purposes of the Convention.

The German Supreme Court argues that the obligations contained in repurchase agreements are the normal duties of buyer and seller. They are simply reversed as compared to the original sales contract (the original seller becomes the buyer under the repurchase agreement and the original buyer becomes the seller).

(a) The distribution agreement was not governed by the CISG. The court accepted the parties’ view that whether or not the CISG applied turned on whether the Distributor Agreement could be characterised as a contract for the sale of goods. This again was dependent on whether it contained definite terms for specified goods. The court stated that the only contract for a specified set of goods was the February 1996 amendment but that these goods were not the subject of the breach. Thus, the CISG did not apply.

(b) The parties had chosen the CISG as the law applicable to their agreement. The Arbitrator therefore held that, to the extent the CISG provided rules that could be applied to the termination of a distribution agreement, the CISG was the law governing the dispute at hand.

(c) If the parties have chosen the CISG as the law applicable to the distribution agreement, the CISG should apply to the extent its provisions are apt to govern the question at issue. In principle, the same holds true where the law applicable to the distribution agreement is determined objectively (absent a choice of law), even though, in such a case, the applicability test may be stricter. The question will be whether the agreement is sufficiently specific about the sales obligations of the parties, eg, by providing for warranties, the modalities of delivery and/or payment, or by specifying the determinability of the price.

Because the Convention refers to the private international law of the forum which determines whether the Convention applies or not.

Article 1(1)(b) enlarges the sphere of application of the Convention. The purpose of Article 95 is to grant Contracting States who are not willing to accept this enlargement the possibility to declare that they will not be bound by that subparagraph.

(a) The CISG did not apply through Article 1(1)(a) because the contract was concluded between the buyers who had their place of business in Contracting States (Spain and Argentina) and the seller who was located in a non-Contracting State (UK). The fact that the contract was later transferred from the seller to a third party who had its place of business in a Contracting State did not change the fact that the CISG did not apply through its Article 1(1)(a) because the decisive point in time is the moment of the conclusion of the contract.

(b) The CISG did not apply by way of Article 1(1)(b) because the claim was brought before a US District Court. The USA have made a reservation under Article 95 CISG, according to which they are not bound by Article 1(1)(b). Thus, the court did not examine further whether its conflict of laws rules would lead to the application of the law of a Contracting State.

(a) No, they litigated before the court of a State which had not yet become a Contracting State to the CISG.

(b) For Article 1(1)(a) to apply, the parties must have their place of business in a Contracting State at the moment of contract conclusion. In the case at hand, the parties had their respective places of business in Germany and Indiana, USA. At the time of the conclusion of the contract, the CISG had not yet entered into force in Germany.

(c) The conflicts rule of the forum lead to the application of the law of Indiana. The court held that, pursuant to Article 1(1)(b), the CISG was applicable as the USA were a Contracting State. A 1-1 notes that the court in C 1-5 did not respect the reservation made by the USA under Article 95. In fact, prevailing case law and legal writing hold that a state which has made a declaration under Article 95 has stated that it will not consider the CISG as the indirectly applicable law for international sales contracts. Thus, if the private international law leads to the application of the law of a reservation State, the domestic law of that State should apply rather than the CISG.

According to another view, however, the reservation under Article 95 only applies where the dispute has been brought before the court of a reservation State. In other words, the reservation under Article 95 is held to operate as a forum rule, without hindering the application of the CISG in the case where the parties do not litigate in a reservation State and the conflicts rule of the forum leads to the law of the reservation State (cf C 1-5, A 1-2).

(d) A list of the Contracting States that have made a reservation under Article 95 CISG can be found on the website of UNCITRAL: www.uncitral.org/uncitral/en/uncitral_texts/ sale_goods/1980CISG_status.html.

(a) South Africa is not a party to the CISG. The Czech Republic is a Contracting State which has made a reservation under Article 95 CISG. Thus, domestic Czech law applies rather than the CISG, which, absent a reservation, would have applied through Article 1(1)(b).

(b) The USA and Italy are both Contracting States. Thus, the CISG applies through Article 1(1)(a), notwithstanding the fact that the USA have made a reservation under Article 95 CISG.

(c) The UK has not enacted the CISG. China is a Contracting State which has made a reservation under Article 95 CISG. In casu, the constellation resembles that in C 1-5: according to the majority view (cf A 1-1), the CISG does not apply because the reservation under Article 95 is deemed to express the intention of the reservation State to never be bound to apply the CISG instead of domestic law if the dispute is not between parties from Contracting States (see Q 1-12(c)).

(d) The CISG applies pursuant to Article 1(1)(a), notwithstanding the fact that both the USA and Slovakia are reservation States under Article 95 CISG.

The PICC and the PECL are ‘general principles of law’ without being binding law. Unlike the CISG, neither the PICC nor the PECL are Conventions that can be enacted in Contracting States. They are mere private rules. Thus, they only apply if they have been chosen by the parties as the ‘law’ governing their contract (as to the extent in which the PICC/PECL may be chosen as the applicable ‘law’, see Q 1-16), or for the purpose of interpretation and gap-filling of the applicable law. As they do not qualify as binding ‘law’, they do not—and could not—provide for a unilateral conflicts rule like the one in Article 1 CISG.

The PICC define ‘international’ broadly. As long as there is a cross-border element, the international character of the contract will be admitted. The CISG is more restrictive, as the international character of the contract must emanate from the diversity of the parties’ places of business.

The question depends on the applicable choice of law rules. Many arbitration laws and arbitration rules allow for the choice of mere ‘rules of law’, such as the PICC or the PECL. However, according to most state court conflicts rules, the choice of the PICC, the PECL or other rules of law does not qualify as a ‘real’ choice of law, that is, the mandatory provisions of the otherwise applicable domestic law cannot be derogated from.

> Article 2