CISG

What it means

The CISG is the UN Convention on Contracts for the International Sale of Goods, which provides uniform rules for sales contracts between businesses in different states. Slovakia, most of the EU, the US, China and many other countries are parties.

It applies automatically when seller and buyer have their places of business in different contracting states, unless the contract expressly excludes it. For such deals it replaces the sales provisions of the Commercial Code.

It covers formation of the contract, the obligations of seller and buyer, defects, avoidance, damages and passing of risk. It does not cover consumer sales, contract validity or transfer of ownership.

How it works in practice

Many companies do not realise their contract with a foreign customer is governed by the CISG. Choosing „Slovak law“ still brings in the CISG, because it forms part of that law, unless it is expressly excluded.

On some points the CISG favours the buyer, for example on the deadline for notifying defects, which is a reasonable time but no later than two years. The contract should set deadlines clearly.

The CISG is often combined with Incoterms rules for delivery and risk. When making a choice of law and forum, parties must also decide where disputes will be heard.

What to watch out for

The phrase „Slovak law applies“ on its own does not exclude the CISG. Anyone wanting domestic rules must state expressly that the Convention does not apply.

Under the CISG it is vital to inspect goods promptly and notify defects in good time and specifically. Late or vague notice can cost the buyer its rights under liability for defects.