The Convention of International Sale of Goods, 1980 does not apply to India since it is not a signatory to the same. Therefore, by the virtue of it, the rules of this international convention, do not apply in case of a purchase or a sale agreement with an Indian entity. And thereby, the domestic laws of the country (India) will have applicability to such agreements
The Sale of Goods Act, 1930 applies in such a case and therefore, the seller as well as the purchaser would be governed by the provisions of the Act.
A. Common Features
| | Convention on Contract of International Sale of Goods (CISG, 1980) | Indian Sales of Goods Act, 1930 |
| Rights, Duties, liabilities and Obligations of Buyer and Seller | Provisions for seller are given in chapter II of the part III from articles 30 – 44. With regard to buyer, chapter III of part III from articles 53-60 is relevant. | Rights and Duties of the seller and buyer are given in chapter IV performance of contract. They are more or less same as given in the UN Convention. And further chapter V states about the rights of unpaid seller against the goods |
| Suit for Breach | In both the cases it will depend on the agreement between the parties that any dispute they refer to the court of law or the arbitration | |
| Remedies in case of Breach | In case of breach by the seller, articles 45 -52 are relevant and in case of breach by the buyer articles 61 - 65 are relevant. | Remedies in case of breach are available for the parties in chapter VI of the Act. One party can sue another for the damages in case of breach by latter. |
| Indemnity | In both the cases it shall depend on the nature of the agreement and the intention of the parties to the contract. And in case of the transaction includes transportation also | |
| Fixation of price of the goods | In both the document the, provisions for determination or fixation of price are wide in nature. Parties can fix it according to their interest and the nature of the goods in question by the contract or it may be determined in the course of dealing in future. | Sections 9 & 10 |
B. Provisions that make difference
| | CISG, 1980 | Indian sales of Goods Act, 1930 |
| Third party claim | Articles 41-44 deals with third party claim. It says that the seller must not deliver the goods over which any third party is having any right or claim. | The Indian Act, is silent about this kind of provision |
| Auction Sale | Article 2 excludes the sale by auction from the applicability of the Convention | Whereas Indian Act provides the Auction Sale in section 64. |
| Agreement | The CISG provides only general contractual terms in relation to Contract of Sale of Goods | Whereas the Act clearly gives the meaning of Contract of Sale of Goods and Agreement to Sell and the future or contingent conditions |
| Damages | Damages have been given in Articles 74-77 of the Convention which are somehow fix in nature and according to the value of the goods in question or dispute | The aggrieved party may sue for the damages and in that case the court or the tribunal shall decide the amount of damages |
| Exemption | The Convention provides exemptions in case of any circumstances beyond the parties’ control | |
C. Provisions about which both the documents are silent
The provisions about which both the documents are silent are:
- Mistake
- Misrepresentation
- Fraud
In case where Indian Law is the applicable law, the above three provisions, about which the International Convention is silent, will be dealt by the Indian Contract Act, 1872.
But if the International Convention is the Governing Law of the Agreement or Contract, the land law of the particular country will be applicable, wherein the proceedings of the court or arbitration are going to be held.
In certain cases, the applicable law shall be the law of the land according to the interest of the parties or the law of the land with that the parties and the agreement is having closest connection.
Continued in the second issue…
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