Ucc-Cisg

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UCC and CISG

The Uniform Commercial Code (UCC), first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.

The goal of harmonizing state law is important because of the prevalence of commercial transactions that extend beyond one state. For example, goods may be manufactured in State A, warehoused in State B, sold from State C and delivered in State D. The UCC therefore achieved the goal of substantial uniformity in commercial laws and, at the same time, allowed the states the flexibility to meet local circumstances by modifying the UCC's text as enacted in each state. The UCC deals primarily with transactions involving personal property (movable property), not real property (immovable property)

Firm offers (offers that cannot be revoked for a set time) are valid without consideration and irrevocable for time stated (or up to 3 months) and must be signed.

Offer to buy goods for “prompt shipment” invites acceptance by either prompt shipment or a prompt promise to ship. Therefore, this offer is not strictly unilateral. However, this “acceptance by performance” does not even have to be by conforming goods.

Consideration -- modifications without consideration may be acceptable in a contract for the sale of goods.

Failure to state price—in a contract for the sale of goods, the failure to state a price will NOT prevent the formation of a contract if the parties’ original intent was to form a contract. A reasonable price will be determined by the court.

Assignments -- a requirements contract can be assigned if the quantity required by the assignee is not unreasonably disproportionate to original quantity

In 1980 the United Nations Convention on Contracts for the International Sale of Goods ('the CISG') was introduced to create international certainty and uniformity in the law and to govern issues that arise in an international sale of goods transaction. This paper focuses on the international sale of commodity type goods and the ability of the CISG to govern contracts for the sale of such commodities. Commodity type goods comprise a broad range of products including grains, wheat, oil, soybeans, rice, cotton and chemicals. Commodities are characterized as being substitutable goods that are produced in bulk quantities by a large number of producers. As will be illustrated, commodity markets have many unique characteristics that distinguish the international sales of commodities from the international sale of goods intended for commercial consumption.

The natural flexibility of the CISG warrants it a suitable instrument of law to govern contracts for the international sale of commodities, particularly given the contractual freedom and precedence afforded to parties involved in a sale by Arts. 6 and 9. It is an appropriate tool for use in a commodity sales contract, especially when applied to a contract that incorporates internationally recognized trade terms or standard usages into the contract. Interestingly, although the CISG is an apt and fitting instrument of law to govern international commodity sales, it is generally excluded in standard form contracts that instead opt for English law in arbitration and as the proper law of the contract. At present the CISG does not hold the same measure of reported judgments and case law that the United Kingdom retains on commodity sales, but it is more and more frequently being referred to in arbitration cases and national decisions. The CISG is capable of being developed and extended to meet the requirements of international trade in a uniform manner that cannot be accomplished by a single domestic law.

Generally, the CISG applies only to contracts for the sale of goods between parties whose relevant places of business are in different Contracting States or when the rules of private...
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