International sales contract

Companies that sell or buy raw materials, products or intermediate products on European or other international markets, often encounter the issue of legal regulations regarding sales contracts in their business activities. Contract law varies substantially in countries, with which the company conducts business.

Companies that sell or buy raw materials, products or intermediate products on European or other international markets, often encounter the issue of legal regulations regarding sales contracts in their business activities. Contract law varies substantially in countries, with which the company conducts business.

Consequently, less or more successful attempts to unify and harmonize international trade law have been made in the past, the generally best-known attempt being the INCOTERMS rules. These are a collection of typical contractual clauses regulating the transport of goods. The INCOTERMS clauses can be included in a sales contract by the contractual parties and thus determine mutual obligations in the goods transport process, which is the subject of the sales contract. The INCOTERM rules address such questions as where the seller hands over the goods to the buyer, transfer of the risk of loss or damaging the goods, who makes the transport contract and who bears the transport costs and who carries out and pays for other services (the insurance of goods, customs clearance etc.).

At the EU level the European Commission has been searching for solutions in the form of unified regulations since 2001, nevertheless the suggestion for a Regulation on a Common European Sales Law has been published only in 2011. Not only that the regulation has not been adopted, the suggestion has even been removed end of 2014.

In the absence of other uniform rules the United Nations Convention on Contracts for the International Sales of Goods (hereinafter “the Convention” or “CISG Convention”), also called the Vienna Convention, as it was adopted in Vienna, proves useful. The Convention is, despite extensive case law of international courts and arbitration forums and the fact that 85 countries have ratified it, 24 of these being EU member states, among them Slovenia, (still) often unknown to Slovenian companies and courts.

The provisions of the CISG Convention are used directly in countries that ratified it and have priority over domestic or national legislation, but only when international sale of goods is concerned.

The Convention is only used, when the parties of the sales contract have offices, registered in different countries. If the contractual parties have their registered offices in the same country, the national law of this country applies, in the case of Slovenia the rules of the Obligations Code apply.