When does the Vienna Sales Convention apply?

The Vienna Sales Convention (CISG) is an international treaty from 1980 that can automatically apply to your export contract without you having agreed to it. In our practice, we see Dutch entrepreneurs who only discover that their contract falls under the CISG when a dispute arises. The rules of application are set out in Article 1 of the CISG and are simple, but the consequences are far-reaching. Those familiar with these rules can consciously choose between application or exclusion.

What is the legal problem?

Applicability of the CISG requires that formal criteria be met. Unintended application leads to unexpected rules, particularly regarding complaint periods and damages. Conversely, exclusion may be insufficiently formulated. Lack of knowledge leads to a Dutch court assessing the agreement under the CISG, whereas the entrepreneur believed they were operating under purely national law.

What does the law say?

Article 1 paragraph 1 sub a CISG: the convention applies to sales between parties in different contracting states. Article 1 paragraph 1 sub b CISG: also if international private law refers to the law of a contracting state. Some states have excluded sub b (declaration under Article 95, such as partly the US and China). For consumer sales, auctions, and financial instruments, the CISG does not apply (Article 2 CISG).

Parties may exclude application under Article 6 CISG. Under Dutch law, the CISG is part of Dutch law; A choice of law for Dutch law therefore includes CISG, unless explicitly excluded.

What risks do companies face?

Unconscious applicability leads to CISG rules instead of the Dutch Civil Code, with significantly different complaint periods and remedies. Vague exclusions are not recognized; a choice of law for Dutch law alone is insufficient. In contracts with mixed functions (purchase + services), a judge may selectively apply CISG under Section 3 of the CISG. Unexpected outcomes in arbitration or proceedings harm your position.

Practical example from our practice

We advised a Dutch seller and a Chinese buyer regarding a supply contract with a choice of law for Dutch law. The judge applied the CISG because the choice of law did not contain an explicit exclusion. The buyer lodged a complaint within the CISG time limit of Article 39 of the CISG — which the standard Dutch rules of Article 7:23 of the Dutch Civil Code would not have permitted. Upon renegotiation, we wrote: "Dutch law, excluding the Vienna Sales Convention (CISG)". Subsequent complaints were rejected under the shorter Dutch time limit.

What can you do?

Assess per contract whether the CISG applies. Make a conscious choice: retain or exclude. Exclude using clear wording ("Dutch law, excluding the Vienna Sales Convention"). Align terms and conditions with the choice. Also document the choice in general terms and conditions. Carefully assess mixed contracts for their predominant character under Article 3 of the CISG. See also our article on Excluding the Vienna Sales Convention: wise or not?