– Both of those countries are parties (contracting states) to the treaty.
– The rules of private international law lead to the law of a contracting state to the treaty.
Among other things, the CISG sets out rules for contract formation and the rights and obligations of sellers and buyers of goods. The CISG only applies to sales of goods between merchants, not sales to consumers, and does not generally apply to services arrangements. Parties to a covered transaction can expressly exclude or vary the CISG’s application in the applicable contract.
To date, more than 75 countries, including Spain, have ratified the CISG. However, many adopting countries have made reservations and declarations regarding the scope of the CISG’s application as it applies to that country. Our office has a broad experience in applying this Convention, together with the Rome I European Union Regulation which is applicable for transactions between European businesses.
The Scope of Application of the Regulation on a Common European Sales Law (Opting in) and the CISG (Opting out)
The CISG will generally apply to contracts for the international sale of goods if the contracting parties, i.e. the buyer and the seller, have their places of business in different states. Even though the CISG does not provide a definition of a sales contract, a description of a sales contract can be derived from Articles. 30 and 53 CISG. Accordingly, sales contracts can be described as reciprocal contracts directed at the exchange of goods against a price. In general, the Convention only applies to contracts for the sale of movable goods. According to Article 3(1) CISG, a sales contract governed by the CISG can entail both the delivery of goods and the provision of services: contracts for the supply of goods to be manufactured or produced are to be considered as sales, unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. Furthermore, the CISG will also apply to a contract that involves both the sale of goods and the provision of services, unless the preponderant part of the obligations of the purported seller consists of the supply of labour or other services (Article 3(2) CISG).
The Convention provides that it will apply if both states where the buyer and seller have their respective places of business are Contracting States (Article 1(1)(a) CISG). Almost all EU Member States are Contracting States to the CISG, except for the United Kingdom, Ireland, Portugal and Malta. Thus, to most contracts for the sale of goods within the EU, the Convention will apply. It should be noted, however, that the Convention does not in principle apply to consumer sales (Article 2(a) CISG). The CISG will also apply when the rules of private international law lead to the application of the law of a Contracting State (Article 1(1)(b) CISG).
The contracting parties may agree to (completely or partly) exclude the application of the CISG (Article 6 CISG). The question may arise whether a choice of law clause, referring to the law of a Contracting State, implies an exclusion of the CISG. The majority view in both the legal literature and in the case law is that a choice of law clause that refers to the law of a Contracting State will lead to the application of the CISG. This may be different if the respective choice of law clause expressly refers to the application of the national law of a Contracting State. In this context, it is relevant to note that the party who claims the exclusion of the CISG will bear the burden of proof for such an interpretation.
The most frequent problems in the international sale of goods transactions
According to our experience, the problems our clients most frequently face involving international sale of goods are the following:
1. Claims for defects, usually unfounded.
2. Statute of limitations.
3. Failure to meet delivery dates.
4. Damages resulting from goods sold.
Spain has ratified the Vienna Convention for the International Sale of Goods and Spanish Courts are progressively applying this treaty, which they tried to avoid some years ago. Our office has proven track record of success with cases where the applicable law in the transaction is the Vienna Convention for the International Sale of Goods as well as on how to apply the Rome I Regulation of the European Union.
Navas & Cusí, with wide experience in legal procedures against bad banking practice, calls upon the courts of this country for the nullification of the contracts signed and the refund of the significant financial losses by investors as a result of the incorrect marketing of these products on the part of the financial institutions, in cases that have failed to comply with their legal duties of transparency and informationduring the procurement process, omitting the regulations applicable to the institutions that operate in the securities market.
What are convertible and/or exchangeable bonds?
Convertibility means the possibility of transforming one financial asset into another. Thus, a specific obligation (bond) can be converted into a share or into another type of obligation.
Convertible or exchangeable obligations enable the owner to redeem them for shares on a specified date.
Until the conversion or exchange date, the investor receives the interest through the collection of regular bond coupons. The number of shares that will be delivered for each bond or obligation and the way in which prices and dates of the exchange or conversion are determined, are specified in the Informative Leafletpublished by the issuing financial institution.
When the Exchange or conversion date arrives, the investor has two alternatives:
- Exercise the conversion option, if the price of the shares offered in exchange / conversion is less than their market price.
- Keep the obligations until the date of the following conversion option or until their maturity.