ANNOTATED TEXT OF CISG
Article 1

(1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States:

(a) when the States are Contracting States; or

(b) when the rules of private international law lead to the application of the law of a Contracting State.

(2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.

(3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.

Legislative history || Case law || Scholarly writings || Links to related articles || Words and phrases || CISG (full-text)

Guide to this article

• UNCITRAL outline of issues present
  
• Editorial analysis of this article with cross-references to related subjects
  
• Secretariat Commentary (closest counterpart to an Official Commentary on this article)
• Match-up of this article with the 1978 draft
(to validate Secretariat Commentary)
• Article 1(1)(a) and 1(1)(b) compared to 1955 Hague Convention, and 1980 Rome Convention counterparts

Legislative history

• Roadmap to the legislative history of this article
• Legislative history of this article: long form
• Legislative history of this article: short form
• Chronology of development of Article 1 at the 1980 Vienna Diplomatic Conference
• Summary of UNCITRAL legislative history
• Hague Convention antecedents
  • Article 1 match-up with ULIS/ULF
  • ULIS (full-text) and André Tunc Commentary on ULIS
  • ULF (full-text)
  • See also the Report of the Special U.S. Committee, dated 1 December 1964,
    explaining why the United States elected not to adopt either ULIS or ULF

Case law

• CASES INVOLVING CISG ARTICLE 1
  • Computer list of annotated cases

• For a companion report on CISG case law and other material, go to Unilex: click for description of and link to this excellent service

• See also:
  • UNCITRAL digest

  • UNCITRAL digest + added cases
  • Michael Joachim Bonell & Fabio Liguori [Italy], excerpt from The UN Convention on the International Sale of Goods: A Critical Analysis of Current International Case Law - 1997 (Part 1), Uniform Law Review (1997) 385-395

  • Martin Karollus [Austria], excerpt from Judicial Interpretation and Application of the CISG in Germany 1988-1994, Cornell Review of the Convention on Contracts for the International Sale of Goods (1995) 51-94

  • For review of arbitration case law, see: Georgios C. Petrochilos, Arbitration Conflict of Laws and the 1980 International Sales Convention [also published in (1999) Revue Hellenique de Droit International]

Scholarly writings on this article

The cisgw3 bibliography contains over 8,000 citations. It is therefore likely that, in addition to case law, you will find scholarly literature - often a wealth of such literature - on virtually every aspect of the CISG you research

• Selected monographs and anthologies
• Comments on Article 1 by Peter Winship [U.S.]: 1984 Parker School seminar of the American Association for the Comparative Study of Law: Ch. 1, pp. 20-22, 26-32, 53
• Comments on Article 1 from seminal 1986 text by Peter Schlechtriem [Germany]

• Comments on Article 1 from monograph by Jacob S. Ziegel [Canada]

• Comments on Article 1 by Erik Jayme [Germany] in 1987 Bianca-Bonell Commentary on the International Sales Law
• Comments on Article 1 by John O. Honnold [U.S.] in the 3rd ed. (1999) of the most frequently cited text on the CISG: Uniform Law for International Sales

• Comments on Article 1 in December 2000 text by Joseph Lookofsky [Denmark / U.S.]
• Commentarios al Articulo 1 sobre textos de 2001 por Pilar Perales [España]

• See also the helpful Enderlein & Maskow text (cited below under the words and phrases section of this Annotated Text material)

• Citations to materials on this article in other texts (selected texts only)

• Selected law journal articles and other commentaries
• Christophe Bernasconi, The Personal and Territorial Scope of the Vienna Convention on Contracts for the International Sale of Goods (Article 1), 46 Netherlands International Law Review (1999) 137-170

• Bojidara Borisova [Bulgaria], Geographic sphere of application of the United Nations Convention on Contracts for the International Sale of Goods (September 2002)
• Michael G. Bridge [United Kingdom], Uniform and Harmonized Sales Law: Choice of Law Issues, in: James J. Fawcett, Jonathan M. Harris & Michael Bridge, International Sale of Goods in the Conflict of Laws, Oxford University Press (2005) 908-988 [See §§ 16.16-16.41]
• Giorgio Conetti [Italy], Uniform Substantive and Conflicts Rules on the International Sale of Goods and Their Interaction, in: Sarcevic / Volken ed., International Sale of Goods: Dubrovnik Lectures, Oceana (1986) 385-399

• Franco Ferrari [Italy], What Sources of Law for Contracts for the International Sale of Goods? Why One Has to Look Beyond the CISG, 25 International Review of Law and Economics (September 2005) 325-328

• Donald J. Lewis, The UN Convention for the International Sale of Goods: Implications for Hong Kong and China, in: Law Lectures for Practitioners 1988, Hong Kong Law Journal (1988) 243-253

• Roland Loewe [Austria], The Sphere of Application of the UN Sales Convention [presentation at the 1997 Willem C. Vis International Commercial Arbitration Moot on the CISG], Pace International Law Review, Vol. X (1998) 79-88

• László Réczei [Hungary], The Rules of the Convention Relating to Its Field of Application and to Its Interpretation, August 1989 Potsdam Colloquium, Oceana Publications (1980), Sections IV-IX

• László Réczei [Hungary], The Area of Operation of the International Sales Conventions, 29 American Journal of Comparative Law (1981) 513-522

• Peter Schlechtriem [Germany], excerpt from Uniform Sales Law: The Experience with Uniform Sales Laws in the Federal Republic of Germany, Juridisk Tidskrift (1991/92) 1-28

• Peter Schlechtriem [Germany], Requirements of Application and Sphere of Applicability of the CISG, Victoria University of Wellington Law Review (2005/4) 781-794

• Paul Volken [Switzerland], The Vienna Convention: Scope, Interpretation, and Gap-filling, in: Sarcevic & Volken eds., International Sale of Goods: Dubrovnik Lectures, Oceana (1986) 19-53

• Peter Winship [U.S.], excerpt from Changing Contract Practices in the Light of the United Nations Sales Convention: A Guide for Practitioners, 29 International Lawyer (1995) 525-554

• Bruno Zeller [Australia], excerpt from The CISG - Getting off the Fence, 74(9) The Law Institute Journal, Victoria (2000) 73-74

• Jacob S. Ziegel [Canada], The Scope of the Convention: Reaching Out to Article One and Beyond, 25 Journal of Law and Commerce (2005-06) 59-73

• Supplementary list of citations to Article 1 commentaries: Unilex citations*

  * Most members of the Autonomous Network of CISG Websites also offer bibliographies. Many are tailored, concentrating on commentaries by authors from or writing on CISG issues of special interest to specific countries or regions; some, e.g. CISG online are general and extensive; some, e.g., CISG-Belgium and CISG-Finland also list commentaries by individual articles of the CISG.

• To identify other relevant commentaries, go to the cisgw3 Bibliography and Bibliography Search Form [place of business, internationality and sphere of application are search form entries you may wish to consider]

  Bibliography citations on place of business

  Citations on sphere of application

  Citations on internationality

  We also encourage you to tailor your own cisgw3 bibliography search to the specific aspect of this article that you are researching.*

  * The cisgw3 bibliography contains over 500 pages of citations. Analyzing these listings can pay dividends.

Links to related articles

Attention to related articles and to the CISG in its entirety is important. This is an autonomous law, i.e., it is meant to be construed within its four corners. When considering aspects of the CISG, because this law relies heavily on general principles, one ought to look at related provisions and the CISG in its entirety.

• Go to Annotated Text of Article 10 [Definition of "place of business"]; go to Annotated Text of Article 95 [Declaration by Contracting State that it will not be bound by Article 1(1)(b)]

• Article 1 through 5 define the scope of the CISG: go to Annotated Text of Article 2 [Exclusions from Convention]; go to Annotated Text of Article 3 [Goods to be manufactured; services]; go to Annotated Text of Article 4 [Issues covered and excluded]; go to Annotated Text of Article 5 [Exclusion of liability for death or personal injury]

Words, phrases and concepts

• The Enderlein & Maskow text is a good place to commence words and phrases research. Click for their analysis of words, phrases and concepts in this article.

  See also:

  -   goods
  -   reasonableness
  -   other words and phrases

• goods. Lookofsky urges us to define the term "goods" in a broad manner. He states:
  "[T]he term 'goods' (marchandises) is usually equated with 'things' (or -- somewhat less appropriately - 'objects'),[4] and it would seem that the subject of an international sale must be a moveable thing,[5] i.e., a thing which can be transferred (from one place to another) by a carrier or other medium, although not necessarily by a 'physical' medium. Clearly, (immovable) real property lies outside the concept of a moveable thing, just as 'know-how' and 'goodwill' have little or no link with the generally accepted notion of goods.[6]

  "Looking beyond these inherent restrictions, however, there is good reason to understand the CISG notion as broadly as possible, so as to cover all moveable -- and not just 'corporeal' -- things.[7] For this and other reasons, most commentators argue that the Convention should at least apply to sales of standard computer programs (software), even though the intangible content of a tangible (compact or floppy) disk is protected by an intangible property right.[8] Indeed, even when computer programs are sold/downloaded over the Internet (i.e., when the programs are not even embodied in a tangible medium), the CISG default rules seem well-suited to regulate the parties' obligations and remedies for breach.[9] And although some have maintained that contracts for the delivery of non-standard programs should be held to lie outside the CISG scope, [*] the arguments presented for such a distinction do not appear convincing,[10] in that the CISG expressly equates contracts for the supply of goods to be manufactured or produced with contracts for the sale of finished goods, and since the relationship between the value of the physical elements embodied in the particular good (e.g., the floppy disk which caries the program) and the value of the technology or information needed to manufacture or process the good seems irrelevant.[11] If, on the other hand, the service element in a given mixed (sales/service) transaction -- e.g., the supplier's post-delivery obligation to perform maintenance on the computer system sold under the same contract -- is found to predominate the transaction (taken as a whole), then Article 3(2) will ensure that the (whole) contract is removed from the CISG scope. …" Joseph Lookofsky, The 1980 United Nations Convention on Contracts for the International Sale of Goods, in Blanpain, R. ed., International Encyclopaedia of Laws, Kluwer Law International, Suppl. 29 (December 2000) § 58 p. 37.
  _________

  4. This is, for example, true under American and Scandinavian sales law. Re. Scandinavian law see, e.g., Lookofsky, J, Køb (Sales: Copenhagen 1996) Ch. 2.3. Compare Herber in Schlechtriem [ed., Commentary on the UN Convention on the International Sale of Goods (CISG), Oxford (1998)], p. 23 (arguing that goods should be understood as 'moveable, tangible objects', notwithstanding the fact that the French ULIS term objets mobiliers has been replaced with the term marchandises).

  5. Compare, e.g. as regards American domestic sales law, UCC § 105(1) which defines goods as 'all things … which are movable at the time of identification to the contract for sale …'

  6. See Herber in Schlechtriem, op. cit. p. 23.

  7. Accord: Herber at id. and Diedrich, F., Maintaining Uniformity in International Uniform Law Via Autonoumous Interpretation: Software Contracts and the CISG', VIII Pace U. International L. Rev. 303, 306 (1996). A similarly broad view prevails in many domestic sales systems. See, e.g. (re. The Danish Sales Act) Lookofsky, Køb (Copenhagen 1966) § 2.3 and Nørager & Theilgaard, Købeloven (Copenhagen 1993) p. 37. But compare Ferarri 'Specific Topics of the CISG,' 15 J.L. & Com. 1, 66-67 (1995), emphasizing the fact that (standard) programs are usually embodied in a corporeal medium (disks).

  8. Sales of books and compact disks are clearly governed by the CISG, even though the intangible content of the book (story) or disk (music, video image) is protected by an intangible property right. Although shares of stock and other securities are specifically excluded from the Convention scope … there is no good reason to extend these Article 2(d) exceptions by analogy. Accord Piltz, Internationales Kaufrecht, § 2 Rd. Nrn. 47-48, Herber in von Caemmerer & Schlechtriem, Kommentar, Art. 1 Rd. Nr. 21. A German court has held that a contract for the sale of standard software is governed by the CISG: see the decision of LG München, 8 February 1995, No. 8 HKO 24667/93, CLOUT Case 131, also reported in UNILEX. This view also finds support in a German case decided under German law: see BGH, 14 July 1993, MDR 1993, 950, applying German domestic sales law to a transaction involving the delivery and installation of standard computer software. American (U.C.C.) precedents on the software issue include RXX Industries, Inc. v. TEKA, 722 F.2d 543 (9th Cir. 1985) (operational software system classified as moveable goods and the essence of supplier's total obligation) and Advent Systems Ltd. v. Unisys Corp., 925 F.2d 543 (3rd Cir. 1991).

  [See also Schlechtriem who states: "There are certainly good reasons to enlarge the sphere of application of the Convention by understanding the concept of goods liberally not literally, but as far as I remember from the Vienna Conference, there was a strong conviction among many delegations that the sale and transfer problems of intellectual property and the like were not within the mandate of the Conference. This alone, of course, cannot answer the question whether computer software can be regarded as movables. It is a problem much dealt with in German literature … If the contract concerns so-called standard software, i.e., a program not designed especially to meet a specific customer's demands and if the program is recorded on a disk or tape, one could argue that the object of the sale falls under the Convention since it is movable and therefore 'goods'." Peter Schlechtriem, "Uniform Sales Law -- The Experience with Uniform Sales Law in the Federal Republic of Germany", in "Särtryck", Juridisk Tidskrift vid Stockholms Universitet, Årgång 3/NR 1/1991-92, pp. 7-8.]

  9. Accord: Bernstein, H. & Lookofsky, J., Understanding the CISG in Europe, § 2-5 (The Hague 1997) and [Herber in] Schlechtriem, P., Commentary on the UN Convention on the International Sale of Goods (CISG), p. 23 (Oxford 1998), both sources supporting the view that the CISG should be applied to standard and specialized software sales contracts, even if the programs are transferred electronically.

  [Cf. Schlechtriem who distinguishes between software recorded on permanent data-storage media and accessible through such media, and programs sent electronically from the manufacturer to the buyer. The latter, he states, are excluded from the Convention. Peter Schlechtriem, "Vienna Sales Convention 1980 - developed countries' perspectives", in Penna, L.R. ed., Current Developments in International Transfers of Goods and Services (6th Singapore Conference on International Business Law, September 1992), Singapore: Butterworths Asia (1994) 103-137.]

  [* Points of view include: Gupta, P.R., Einert, S.D. & Ross, D., "New Rules for International Sales of Computer Hardware and Software", 5 Computer Law (1988) 22 ("Although there is little doubt that the sale of hardware is covered by both the UCC and CISG, the coverage of software is a less certain proposition. Although the applicability of the UCC has not yet been fully resolved by United States courts, software generally has been recognized as falling within the ambit of the UCC. It seem likely that the term 'goods' as used in the CISG will be given a similarly broad interpretation."); see also Fakes, A., "The Application of the United Nations Convention on Contracts for the International Sale of Goods to Computer Software and Database Transactions, 3 Software Law Journal (1990) 582-583 ("Under Article 3(2) of the Convention, a fairly strong argument can be made that custom-made software or extensively modified pre-written programs whose creation or modifications are contracted under a separate international contract are not covered by the Convention because the 'preponderant part', if not all, of the performance would be the supply of services not goods. … On the other hand, minor alterations to pre-written programs should not be enough labor to satisfy the 'preponderant part' test. …").]

  10. Accord Diedrich, supra note 7.

  11. Accord Honnold, J. & Reitz, C., Sales Transactions: Domestic and International Law (1992) p. 10 with n.22.

  For further comments on software as goods under the CISG, see Trevor Cox, "Chaos versus uniformity: the divergent views of software in the International Community," presentation at the April 2000 seminar on the CISG in Vienna, sponsored by the International Bar Association (IBA) and the Willem C. Vis Moot Alumni Association (MAA).

  See also Sarah Green & Djakhongir Saidov, Software as Goods, Journal of Business Law (March 2007) 161-181

• reasonableness: Although not specifically mentioned in this article, reasonableness is a general principle of the CISG
  • For the definition of reasonableness recited in the Principles of European Contract Law and references to reasonableness in Continental and Common Law domestic rules, doctrine and jurisprudence, go to PECL article 1:302 and the comment and notes prepared for this provision

  • To drive home the correlation between the PECL's definition of reasonableness and the evident same meaning of this term to CISG legislators when they used the concept either specifically or as a general principle of the uniform law they drafted, see overview comments and comments that illustrate the similar manner in which this concept fits the CISG

  For a Doctoral thesis on "Reasonableness" in International Commercial Law, go to Guillaume Weiszberg, Le "Raisonnable" en Droit du Commerce International [pour le doctorat en droit de l’Université Panthéon-Assas (Paris II), 7 novembre 2003]

• "places of business" (1(1) and 1(2)). For links to significance of this phrase to many provisions of the Convention, go to Annotated Text of Article 10

• "rules of private international law" (1(1)(b)). For another use of this phrase, go to Annotated Text of Article 7 [Interpretation of Convention] (see 7(2))