International sales agreements and the Vienna Sales Convention

The Vienna Sales Convention (CISG) is an international treaty from 1980 that governs the international sale of movable goods between parties in contracting states. With over 95 contracting states, it is by far the most influential instrument in international trade. In our practice, we work with the CISG daily. Many entrepreneurs apply it unknowingly — only when a dispute arises do they discover that specific time limits, complaints, and remedies apply that deviate from Dutch Civil Code.

What is the legal problem?

The CISG applies automatically between parties from contracting states in international sales, unless expressly excluded. Many entrepreneurs are unaware of this and apply standard Dutch sales rules, while the CISG provides for specific time limits, complaints, and remedies. In the event of disputes, unfamiliarity with the convention leads to unpleasant surprises, particularly regarding complaint periods and fundamental breach.

What does the law say?

The CISG (Vienna Convention, 11 April 1980) applies to international sales of movable goods between parties from Contracting States (Article 1, paragraph 1, sub a CISG). The Netherlands, Germany, France, Belgium, Spain, China, the US, and the Russian Federation are Contracting States; the United Kingdom, India, and South Africa are not. The convention governs formation (Articles 14-24), delivery (30-34), conformity (35-44), remedies (45-52, 61-65), and damages (74-77).

Parties may exclude the convention or parts thereof under Article 6 CISG. Additionally, national rules apply to points not covered by the CISG, such as prescription (Article 7:23, paragraph 2 of the Dutch Civil Code) and transfer of ownership (Article 4, paragraph b of the CISG).

What risks do companies face?

Unconsciously applied CISG leads to unknown complaint periods and broad remedies for the counterparty. In the event of defects, buyers can claim additional damages plus a price reduction under Article 50 of the CISG. Standard Dutch general terms and conditions do not automatically supplement the CISG. Non-CISG states such as the UK, India, and Brazil follow their own rules, which weakens your starting position without a conscious choice of law.

Practical example from our practice

We represented a Dutch exporter supplying machinery to a German buyer without a choice of law and without CISG exclusion. In the event of a defect occurring after 20 months, the buyer successfully lodged a complaint under Article 39 of the CISG (within a reasonable time, at the latest two years). Our client relied on the Dutch short complaint period of Article 7:23 of the Dutch Civil Code ("within a reasonable time"). Damages amounted to €320,000. Upon renegotiation, we incorporated an explicit choice-of-law clause for Dutch law, excluding the CISG and maintaining our own 14-day complaint period.

What can you do?

Make a conscious choice: retain the CISG or exclude it. Align this with your role (buyer or seller) and the market. Adjust general terms and conditions to align with the CISG or to exclude it consciously. Be alert to complaint periods (within a reasonable time, max. two years under Article 39 of the CISG). Document choices in both the choice-of-law clause and the general terms and conditions. See also our article on When does the Vienna Sales Convention apply?