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Paper Topic:

Definition of damages under CISG Art 74, discuss it .


The United Nations ' Convention on Contracts for the International Sale of Goods (CISG ) has a legitimate purpose in the current era where globalization of trade is the general trend . International trade is increasing daily , yet the laws that govern trade in the various nations of the world differ as widely as those countries ' histories . In the drafting of sales contracts between or among businesses that trade internationally , there is usually little foresight given to the details regarding the damages to be paid , should one or both parties neglect to fulfil

the necessary terms of the contract . In such an event , their contract is usually found to be inadequate to guide them , and they almost inevitably turn to the provision of the law regarding such circumstances (Guide to article 74

The problem is that prior to the unveiling of the CISG at the 1980 convention , the laws governing such a dilemma on an international scale presented very little uniformity across national bs . This presented problems since international trade by definition involves more than one nation , and with a lack of uniform international trade laws came a reluctance of companies to enter the global market . However , with the advent of the CISG , which is a uniform contract law adopted by 62 countries that together account for over two-thirds of all world trade ' came a way to this uniformity (Keily , 2003

The importance of the CISG can be found in its adoption by all the major trading countries of the world , with only the exceptions of Japan and England . It has already done much toward the fulfilment of its goal of the development of uniform rules which govern contracts for the international sale of goods (UN CISG , 1980 . The CISG applies to sales situations once they involve nationals of countries that are governed by the CISG . It will generally cover sales situations under the following circumstances : A contract must exist for the sale of the goods the transaction must be between parties whose business places are in different countries and both of those countries must have opted to be governed by the CISG (Wachsmuth , 2000

A Sum Equal to Loss

Article 74 of the CISG deals with the awarding of damages to one party in the event of a sales contract 's being breached . It provides for the measurement of that award , which must be made according to certain regulations that it lays down . The text provides that the damages for any refusal or inability to comply with the terms of a contract consist of a sum equal to the loss , including loss of profit , suffered by the other party (Annotated text of CISG Article 74 . The idea behind this provision of article 74 is to make it safe for persons to enter into precarious contractual situations , knowing that should there be a breach of contract , their losses will be nullified or minimised by the payment of damages . This payment is calculated by the legislators not merely to replace what was given...

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