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Problems analysis in the negotiation and signing of the Contract
of MBI
1. Introduction to the negotiation and signing of the contract
of MBI
MBI is expanding its business quite rapidly at the time. The
subsidiary of MBI is negotiating and signing the largest contract
in its history with other three companies. The MBI subsidiary
is located in a state that is a member of the United Nations
Convention on Contracts for the International Sale of Goods.
Three other firms are going to be parties to the contract.
One is located in another state that is a member of CISG;
the other two are not. One of the latter is located in a state
which has a civil law legal system; the other in a state which
has a common law legal system.
2．Analysis of detailed problems in the negotiation and signing
of the contract of MBI
2.1 What law will govern this contract? Can the parties agree
that CISG will govern their relationship?
This contract in negotiation of MBI should be under the restriction
of CISG. According to the Article 1(1) [1], this Convention
applies to contracts of sale of goods between parties whose
places of business are in different States. This means that
if the places of business of the two parties are in different
States, the Convention would be applied to the contract. For
those that have been clearly defined as inapplicable principles,
the restriction of CISG would not be invalid.
The writer believes that all parties to the contract should
agree to be under the restriction of CISG. The contract involves
two other companies that are not member states of CISG. If
they do not agree to be under the restriction of CISG, the
implementation of the contract and the settlement of disputes
would be quite complicated and would cost a lot.
2.2 The contract involves the sale of goods (including parts
and assembled products) as well as the supply of services.
Can the CISG regulate the entire contract? If not, what parts?
According to the related regulations of CISG, only the sales
of tangible goods could be under the regulation of CISG. However,
the contract of MBI involves not only the sales of goods but
also the supply of services. Therefore, the writer believes
that CISG could not regulate the whole contract.
What CISG could regulate includes not only sales of goods
but also parts and assembled products. Supply of services
is not included.
2.3 In the vent that the parties agree that CISG will be the
governing law, what aspects of the contract will be governed,
nevertheless, by local law?
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