Global trade relations continually pose new challenges to international law. In the event of a dispute, it is often first necessary to determine which law applies.
In a global world, international law plays a significant role. When legal disputes arise between contracting parties from different countries, private international law is crucial in determining which law is applicable to a specific legal dispute, explains the business law firm MTR Rechtsanwälte.
For cross-border contracts, the question of which national law applies arises initially. The parties have the option to agree on a choice of law when drafting the purchase contract. If such an agreement is not made, the so-called Rome I Regulation applies to contracts concluded after December 17, 2009. This applies to both contracts between EU member states and contracts with third countries.
According to Article 4 Paragraph 1 of the Rome I Regulation, the law of the country in which the seller has his principal place of business applies to contracts for the sale of movable goods. For property rights in immovable goods, the law of the country where the immovable property is located applies.
However, with international sales contracts, the question also arises as to whether the UN Sales Law (CISG) is applicable. The CISG is a United Nations convention on the international sale of goods. It may apply if the contracting parties have their business locations in different states that have ratified the agreement. More than 90 countries have signed the agreement, including the most important trading partners.
However, the UN Sales Law is not comprehensive. For instance, it does not regulate the important aspect of limitation periods in product liability. Additionally, the contracting parties can declare substantial parts of the UN Sales Law as not applicable. It is important to be cautious with such clauses. For example, if it is contractually agreed that German law is to apply, the CISG is not excluded, as it is part of national law. Therefore, the UN Sales Law must be explicitly excluded in order not to apply.
In addition, attention must be paid to whether pre-formulated terms and conditions (T&Cs) become part of the contract in the UN sales contract.
It generally remains a case-by-case question as to which legal system is applicable. Lawyers experienced in international law can provide advice.
