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36 Cards in this Set

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CISG
U.S. federal law which governs contracts for the international sale of goods, and which pre-empts state laws like the UCC.
As federal law, which article of the UCC does the CISG preempt where applicable?
UCC Article 2
Which CISG has the United States declared that it is not bound by?
Article 1 (1)(b)
What is the practical effect of the U.S. opting out of Article 1 (1)(b)?
U.S. courts are bound to use CISG law ONLY when it applies to contracts between parties whose principle places of business are in the U.S. and other Contracting States. Otherwise, UCC likely applies.
Who was the CISG drafted by?
United Nations Commission on International Trade Law (UNCITRAL)
How does the CISG determine its applicability under Article 1?
It considers itself applicable to contracts for the sale of goods which are international and which have a minimum amount of contact with a Contracting State.
How does Article 1 define an "international" contract?
When buyer's and seller's "places of business are in different States".
How does the CISG define a "place of business" with regard to Article 1?
"Place of business" must be a permanent establishment, not things like a warehouse or the office of a seller's agent.
How does the CISG determine "a minimum amount of contact with a Contracting State" under Article 1?
1) both states are Contracting States
2) only one State is a Contracting State and private international law choice-of-law rules lead to the application of the law of the Contracting State
Which Article excludes sales to consumers from coverage under the CISG?
Article 2
Goods bought for "personal family or household use" are not covered by the CISG.
Does Article 2 exclude electronic "goods"?
The quick answer is no, but this is currently being debated. What constitutes a "good"? Is software on a CD a "good"?
Which Article excludes "services" contracts from coverage under the CISG?
Article 3
CISG does not apply when "preponderant part of obligation consists of labor or services"
What are the three types of issues expressly excluded from the CISG?
1) "validity" of the contract
2) property (or title) issues
3) liability for death or personal injury
Which Article covers supplementary principles of law, or "gap fillers".
Article 7(2) stresses that gaps should be addressed by looking to "general principles" in the Convention or in international law, not in domestic law as a default.
What are the 3 tiers of the hierarchy that Article 8 establishes regarding interpretation of contracts?
1) where the parties have common understanding of a provision, that common understanding should be used
2) If one party "knew or could have known" the other's intent, the other party's interpretation prevails
3) if parties are unaware of divergence in interpretation, "reasonable person" standard used
Which Articles cover contract formation provisions?
Articles 14-24
Does an offer need formal acceptance under the CISG for a binding contract to be formed?
No. Conduct of the parties that recognizes the establishment of an agreement is enough.
What are the 3 requirements for an "offer" under CISG Article 14?
1) Must be a "proposal for concluding a contract"
2) Must indicate "an intention to be bound in case of acceptance"
3) Must be "sufficiently definite" (description, qty, and price)
When is "withdrawl" of an offer permissible?
Only before the offer is received by the other party.
What is the cut off for attempting to "revoke" an offer?
The offerer can only attempt to revoke the offer BEFORE the other party has accepted.
How does the CISG define "acceptance"?
Either a statement or "other conduct" by an offeree "indicating assent to an offer."
Is the CISG's approach to the "battle of the forms" equivalent to the "mirror image" rule?
Not exactly. If the buyer's order acknowlegement and the seller's purchase order have "materially" different terms, this is a rejection and counter offer. If terms are not "materially" different, standard terms with common substance apply. Conflicting standard terms are excluded.
What are the basic requirements a seller must satisfy for "quality of goods" in a contract?
1) conform to contract description
2) fit for ordinary use
3) fit for any particular use made known to seller
4) conform to any goods seller has used as a sample or model
What are the Buyer's 2 primary obligations in a sale contract?
To pay the agreed price and to take delivery of the goods.
What are the general rules for Buyer's inspection and notice of defects?
Notice must be timely and notice of defects must be specific with regard to nature of the lack of conformity.
When does risk of loss pass to the Buyer under CISG?
When goods have been "handed over" by the Seller to the first carrier.
Which CISG Article deals with excused peformance?
Article 79
When is performance excused under Article 79?
When failure to perform due to an "impediment" beyond the party's control, and which the party "could not reasonably be expected to have taken into account" when the contract was made. Nonperforming party must prove that it could not avoid or overcome "impediment".
How long is performance excused due to an "impediment" under Article 79?
Only as long as the "impediment" continues. Party seeking excuse must notify other party of both impediment and of its effect on performance in timely manner.
What is the analogous UCC section to CISG Article 79?
UCC 2-615
What are the 4 types of remedies a Buyer has under CISG?
1) "avoidance" of the contract
2) price adjustment
3) an action for specific performance
4) an action for damages
What are the Seller's 5 potential remedies if the Buyer breaches under CISG?
1) suspension of performance
2) "avoidance of the contract
3) reclamation of the goods
4) an action for the price
5) an action for damages
What does "avoidance of the contract" mean to Buyers?
Method of refusing ot accept or keep defective goods or to pay for them.
What is the most common damages equation for Buyers?
1) Difference between the price of "cover" (sub goods actually purchased) and the contract price or
2) the difference between the mkt price and the contract price.
What is the most common damages equation for Sellers?
1) Difference between contract price and resale price if goods were actually resold or
2) diff between the contract price and mkt price of goods at the time of contract avoidance
What do people typically rely on to define standard commercial terms as gap-fillers for the CISG?
International Chamber of Commerce International Commercial Terms.
(ICC Incoterms)