In order to consider risk management by contract, it is necessary to first know the "The United Nations Convention on Contracts for the International Sales of Goods (The Vienna Trading Treaty)".
The official name is "United Nations Convention on Contracts for Contracts for the International Sale of Goods (CISG)".
"United Nations Convention on Contracts for the International Sale of Goods (Vienna Trading Treaty)"
The Convention was drafted by the United Nations Commission on International Trade Law (UNCITRAL) to promote international trade, adopted at the Vienna Foreign Relations Conference in April 1980, and entered into force on January 1, 1988. As of January 2008, 70 countries have signed the convention and Japan has entered into force on August 1, 2009.
In international transactions with companies in these countries, the Vienna Trading Treaty (CISG) is considered to be basically applied unless there is a mandatory provision of domestic law or an agreement between the parties.
There are four points to keep in mind.
1. Applied automatically
If both parties are located in a Contracting State, the Vienna Trading Treaty is automatically applied.
By agreement between the parties, some or all of the CISG may not apply to the transaction.
2. Limited to corporate transactions, buying and selling goods
Not applicable to personal transactions or service offerings
3. The requirement for termination is limited to a serious breach of contract
The Japanese Civil Code can terminate a contract if there is a breach of the contract and cannot be corrected for a fixed period, but the CISG is limited to a serious breach (Fundamental breach).
4. The claim filing period is 2 years
In Japan, it is up to six months but CISG is in favour of the buyer two years after delivery. The buyer's duty to notify of non-conformance of contract goods is “within a reasonable period from the time it was discovered or should have been discovered” and is considered to be similar to “immediately after receipt” of Japan.
As a result of the CISG, the CISG will be applied to transactions that do not enter into contracts, and also to international transactions of SMEs, enabling risk management such as claim processing and debt collection based on international standards.