Introduction:
The United Nations Convention on Contracts is a convention that provides a text of law that is uniform for the sale of goods internationally. It was prepared by a Commission of the United Nations on International Trade Law. The diplomatic Conference adopted it in 1980. Vienna Convention deals with contracts of sale of goods that are made by parties whose businesses are located in different states and the states that are involved are not contracting states. It also deals with the contracts of the states that have rules that lead to private international law. Some states have accepted to apply the convention in the situation where businesses are located in different places and the states are contracting states. As a result of the later reason as to why states may use the convention, the states have not accepted to use it. If the parties agree they may choose the law that is applicable that may be applied by the convention and it will limit it.
In the Vienna convention, contacts for services are not the same as the contracts for sale. If a contract is made for goods that are to be manufactured or goods that are to be produced, this is termed as a contract for sale. There is an exemption to this case if the party ordering the goods supply the materials that are to be used in production or in the manufacture of goods and the supplied materials turns to be substantial. The convention applies only when preponderant part of the responsibilities does not include other services or supply of labour.
The convention deals with the contracts of goods but there are some sales contracts that are not included in the convention and they are contained in a list in the convention. The reasons for exclusion from the convention may be the nature of the goods, the nature of the sale or the purpose of the sale of the goods. Special nature of goods in some states is governed by other rules depending on different states. The convention is made up of articles, and some of the articles state the weaknesses of the convention being that the main aim of the convention is formation of contracts. The articles also insist that the Convention is restricted to oversee the duties and the rights of the seller and the buyer that arise from the contracts of sale. According to these articles, the validity of the contract and the effects of the contract to the goods and properties is not the main concern of the convention. They are also not concerned with the liabilities of the goods that are sold even if an injury or death is caused by the goods.
For the convention to unify the law that governs the international sale of goods, it is supposed to be consistent in all the legal systems of the states that are involved. The laws in the convention are easy to understand and they are clear. In case of a dispute by the parties, the courts and tribunals should promote uniformity by observing international character and the good faith in the international trade. Private international law should not be applied unless the principles of the convention are absence.
Autonomy of the parties:
For the international trade to function in an effective way there is need of guarantee of the functioning and the party autonomy principle represents an important guarantee. Party autonomy also fulfils the contract freedom principle which promotes commercial relations in international trade. Including the freedom of contract principle in the convention, it leads to the establishment of warranties which promote the free operations in the international economy. The parties who are contracting are supposed to act freely conforming to the interests of their businesses. In application of the international economic rules that are competitive, there are principles that ensure its application and establishment. In the presence of the basic principles, there is an assurance of a fair competition and the freedom of contract principle is important. Although the principle is important, it may not be enforced. If the principle is not enforced, there should be a text that is explicit and provides the parties with the freedom to choose the law that is applicable to their business. This helps the parties in defining the terms in their contracts. For the principle of the party autonomy to work, the prescriptions of the Convention are required. Some of the cases where the party autonomy cannot be applied include when mandatory rules are included in the Convention and the parties are supposed to follow the rules. In this case, the parties are supposed to define the exact terms that are to be used in the contract which conforms to the Convention provisions that corresponds with the conformity.
The definition by the parties of the law that applies to their contractual relations is not stipulated in Article 6 of the CISG and this gives room for different interpretations of the convention as in the case: Downs Investments v. Perwaja Steel. The weak party in the contract is supposed to be protected by definition of the law that is applicable. As a result of lack of definition, there are two different opinions that have evolved on whether to exclude the principle impliedly or explicitly. One group of people argue that the exclusion can only be express because it guarantees application of the CISG in a uniform way. The success of the convention can only be possible if express exclusion is used. Another argument that supports the express exclusion is based on article 7. The article includes operations that must be used by the Convention which includes gap filling mechanism and interpretations. To conform to the principles of the Convention, the operations are to be fulfilled. The principle of fairness in the convention has been used. It guarantees the equality of the parties that are contracting and protects the weaker party from the stronger party.
One of the arguments that support the implied exclusion is based on the interpretation of the article which is strict. They argue that the people who drafted the convention would have specified the exclusion method to be used if they did not want to include implied exclusion.
Role of autonomy of the parties:
The main objective of the autonomy of the parties is to help them in choosing the law that can be applied in their contractual relationship. The aim is not to exclude the Uniform law used by the convention but it is to give parties the freedom to exercise their autonomy right.
Autonomy of the parties helps the parties to decide and to know whether to wholly exclude the application of Uniform Law or to exclude part of the Uniform law in the convention. With the help of the principle of party autonomy, the parties involved in the contracts might opt to choose the applicable Law entirely and opt out of the convention. If the applicable law that is to be used is from a contacting state, the domestic law used should be specifically stated. If the applicable law is not indicated in total exclusion, the applicable law should be determined by the private international law rules.
One of the roles of the party autonomy is to help the parties who are concerned to be able to contract out of the convention it helps in expanding the framework of the uniform rules. This means that the transactions of the international sale of goods which consists a variety of products and different transactions cannot be carried out under uniform rules. Party autonomy helps in the provision of the general rules that can be used by different branches of trade. It also gives the buyers of the goods the right to reduce the prices of the goods if the quality of the goods does not conform to the agreed rules as in the case: Ginza Pte Ltd v Vista Corporation Pty Ltd 2003.
Autonomy of the parties helps them to determine the pricing structures that they are to use in their international trade. They are free to make the agreements under Article 55 of the convention. The agreements made by the parties override the contents of the article. When the parties involved cannot agree, the courts can be involved to achieve the autonomy. Case: Alain Veyron v. Ambrosio. In this case, the parties involved the court to achieve the party autonomy.
Through the autonomy of the party, the parties involved in the contract can agree to conclude the contract without referencing the price. This is possible if they reference through implied or express on how they may determine the price. The parties involved in an international sale can also agree to dispose Article 14 which is not mandatory through implied or express agreement. They may agree to conclude the contract by established practice or by trade usage.
In case of disputes concerning the prices of goods, the party autonomy helps the involved parties to determine the prices internally by negotiating. The internal determination may involve the seller of the goods. The parties may also decide to settle the cases through external negotiations which might be through a third party who is neutral. If the parties are able to determine the prices, an arbitrator or judges are not empowered by Article 55 to determine the prices. The provision is used to strengthen the party autonomy.
Conclusion:
The Vienna Convention on Contracts for the International Sale of goods is governed by rules that were drafted before 1980. It has many articles that are used in its regulation. The parties to a contract can use other laws that they agree on through the use of party autonomy in the convention. There are principles that are used to govern the Convention and one of them is contract freedom where the parties are allowed to agree on the laws they want to use in their contracts.