Browsing by Author "Laiso, Sami"

Despite the United Nations Convention of Contracts for the International Sale of Goods (Vienna, 1980) being enacted in 1980, it has not received a strong position in the documentary sale of commodities where English law is the chosen norm for the law applicable to contract. This is often claimed to be attributable to the uncertainty under the CISG which makes it unsuitable to govern contracts of commodities where price fluctuations and speculation call for a more strict legal environment. This study examines the compatibility of the CISG to such documentary sales by taking the passing of risk and loss as the perspective. Commodities are often transported and once a transport document fulfills certain statutory requirements, it gives its holder the right of disposal. Taking this into account, the underlying goods may be sold during transit by selling the documents. This also allows the formation of trade strings where a buyer of the documents may act as an intermediate without the intention of taking the physical delivery of the goods. This presentation outlines the documentary sales of commodities and the contractual network that is commonly established for the performance of the sale. In this regard, the presentation establishes the time for the passing of risk under the CISG, the liability regime of the carrier of the goods, the expected insurance coverage for the goods, and the involvement of banks in financing the sale. The study establishes how the CISG should be interpreted as a convention and what value should be given to foreign judgments in the pursuit of uniformity under the convention. Thereafter the discussion moves on to the use of documents in the performance of the contractual obligations of the parties and the default rules of the CISG in relation to passing of risk and their suitability in documentary sales to establish when risk passes. The discussion then moves on to see what case law under CISG has held as the correct time for the risk to pass in sales that involve carriage of goods and what has let to that outcome. The rest of the discussion moves on to present the involvement of the carrier in the transport of commodities and the liability regime that is placed on him when using bills of lading. Following the carriers liability, the presentation outlines the use of marine insurance and the required coverage of such insurance in sales of goods under the CISG. The second to last chapter outlines the use of banks in financing the sales contract and its implications to the required performance of the parties. The suitability of the CISG in documentary sales it put to a test under both the convention itself and under the reported case law. The study finds that although the default rules of the convention do not fit the purposes of documentary sales, the case law has established the right outcome for the passing of risk. However, the implications drawn from the case law suggest that under the CISG, the decision-maker is faced with a duty to search for uniformity that might undermine the intention of the parties upon concluding the contract. In several reported cases under the CISG, the court has applied Incoterms as the applicable rules to the contract between the buyer and seller even if the parties did not expressly incorporate them, but merely referred to a term that is also defined in the Incoterms. The application of Incoterms as trade usage has further consequences in relation to the required insurance coverage, which might lead to a situation in which the documents that represent the goods do not correlate with the expectations of the buyer. The study concludes that although parties may achieve a desired outcome by express contract terms, the case law under the CISG has not evolved enough to make the convention certain enough to be a desired applicable law.