International trade law
International Commercial Terms
An important part of an international contract is determining the applicable delivery terms. These delivery terms are also called International Commercial Terms, or: Incoterms in short. Incoterms are standardized international delivery terms. By declaring one of the Incoterms applicable, the parties know, among other things, who is responsible for arranging transportation, who is responsible for any import and export licenses or other customs obligations, and who bears the risk of damage to or loss of the goods in transit. Aspects such as price agreements, payment terms, warranties or the consequences of non-performance of the purchase agreement by one of the parties do not fall within the scope of Incoterms.
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International trade law
International trade law regulates the legal relations between traders. Laws and regulations lay down, among other things, the legal position of traders, how trade is conducted and how to deal with trade disputes.
The CISG is an international treaty relating to international sales contracts. The CISG applies when there is a contract for the sale of movable property between professional parties (i.e., the treaty does not cover consumer purchases) that are located in countries that are party to the treaty or if the contract contains a provision stating that the parties have opted for the law of a member country of the CISG. The CISG has been ratified by more than 85 states and is therefore readily applicable to international commercial transactions.
Suppose a Dutch company sells flowers to a German company. Both countries have ratified the CISG. This means that, if the parties have not agreed on the applicable law, the treaty applies to the sales contract. The CISG contains provisions on the formation of an international sales contract and the rights and obligations arising from that contract.
The CISG contains substantive sales law and thus sets its own rules regarding quality, payment, delivery, non-conformity of goods, dissolution of sales contracts and damages.
Although the CISG strives to be reasonable for both buyer and seller, the treaty is generally seller-friendly. In fact, many provisions in the CISG are more favorable to the seller than its equivalent under Dutch law.
The CISG is far from unknown to Wolfs Advocaten. Wolfs Advocaten will gladly advise you on (the applicability of) this treaty and its consequences.