The United Nations Convention on Contracts for the International Sale of Goods (CISG) has been in existence for over 40 years and is widely considered to be an important tool for promoting cross-border trade. However, despite its widespread adoption, some businesses choose to exclude CISG from their contracts. In this article, we explore why this is the case, and what implications it has for international trade.

The CISG was created to provide a uniform legal framework for the international sale of goods. It aims to establish a set of common rules that can be applied in the event of a dispute between parties from different countries. While the CISG is meant to be a comprehensive legal framework, covering everything from formation to performance and remedies, it does not apply to all contracts. Specifically, it only applies to contracts for the sale of goods, and not to contracts for services, intellectual property, or real estate, among others.

One reason businesses exclude the CISG from their contracts is that they may prefer to rely on their own national laws. This is particularly true for businesses from countries that have well-established and predictable legal systems. By relying on their own national laws, businesses can avoid the uncertainty and complexity of unfamiliar legal systems. Additionally, they may be more familiar with their own laws and find it easier to navigate potential disputes under those laws.

Another reason why businesses exclude CISG is that they may want to use their own standard terms and conditions. This is particularly true for businesses that operate in industries with well-established practices and norms. By using their own standard terms and conditions, they can ensure that the terms of the contract are in line with their industry practices and that their interests are protected.

Despite these reasons, excluding the CISG from a contract may have implications for international trade. For example, if both parties are from different countries that have ratified the CISG and the contract excludes it, there may be confusion and uncertainty around the applicable law in the event of a dispute. This can lead to longer and more costly legal proceedings, which can be detrimental to both parties.

Furthermore, some legal experts argue that excluding the CISG can lead to a lack of uniformity in international trade. This could potentially undermine the goal of the CISG, which is to promote uniformity and predictability in cross-border transactions.

In conclusion, the decision to exclude the CISG from a contract depends on the specific circumstances of the transaction and the preferences of the parties involved. While it may be understandable why some businesses choose to exclude the CISG, it is important to consider the potential implications for international trade. By carefully weighing the pros and cons, businesses can make an informed decision that serves their interests while also promoting a more predictable and uniform international legal framework.