FOREIGN TRADE UNIVERSITY
HO CHI MINH CITY CAMPUS

GRADUATION THESIS
Major: International Business Economics

DISPUTE SETTLEMENT
REGARDING OBLIGATIONS OF THE SELLER
IN INTERNATIONAL SALES CONTRACT
UNDER CISG 1980 AND REMARKS FOR
VIETNAMESE ENTERPRISES
Author

: Đàm Minh Hiếu

Student ID : 1201035540
Class

: K51CLC2

Supervisor : Nguyễn Tiến Hoàng (PhD.)
Code: 132

Ho Chi Minh City, May 2016


FOREIGN TRADE UNIVERSITY
HO CHI MINH CITY CAMPUS

GRADUATION THESIS
Major: International Business Economics

DISPUTE SETTLEMENT
REGARDING OBLIGATIONS OF THE SELLER
IN INTERNATIONAL SALES CONTRACT
UNDER CISG 1980 AND REMARKS FOR
VIETNAMESE ENTERPRISES
Author

: Đàm Minh Hiếu

Student ID : 1201035540
Class

: K51CLC2

Supervisor : Nguyễn Tiến Hoàng (PhD.)
Code: 132

Ho Chi Minh City, May 201


Mã KLTN: 132
TRƯỜNG ĐẠI HỌC NGOẠI THƯƠNG
CƠ SỞ II TẠI TP. HỒ CHÍ MINH

NHẬN XÉT KHÓA LUẬN TỐT NGHIỆP
Họ và tên sinh viên: ĐÀM MINH HIẾU

MSSV: 1201035540


Tên đề tài: Dispute settlement regarding obligations of the seller in international sales
contract under CISG 1980 and remarks for Vietnamese enterprises (Giải quyết tranh
chấp phát sinh liên quan đến nghĩa vụ của người bán trong hợp đồng mua bán hàng
hóa quốc tế theo CISG 1980 và bài học kinh nghiệm cho doanh nghiệp Việt Nam)
Điểm tinh thần, thái độ, chuyên cần (tối đa 1 điểm; cho điểm lẻ đến 0,1): .................
Ý kiến nhận xét (khoanh tròn lựa chọn phù hợp):
1. Sinh viên đã nghiêm túc thực hiện KLTN theo sự hướng dẫn của giảng viên.
GVHD chịu trách nhiệm về tên đề tài, mục đích, đối tượng, phạm vi & phương pháp
nghiên cứu và tên các chương, các đề mục chính (2 chữ số).
2. Sinh viên chưa thực hiện đầy đủ hướng dẫn của giảng viên. GVHD không chịu
trách nhiệm về đề tài.
3. Sinh viên không thực hiện hướng dẫn của giảng viên. GVHD không đồng ý cho
sinh viên nộp KLTN.
Tp. Hồ Chí Minh, ngày 04 tháng 05 năm 2016
Giảng viên hướng dẫn
(Ký và ghi rõ họ tên)

TS Nguyễn Tiến Hoàng

Ghi chú: Mẫu nhận xét này được đóng cùng cuốn KLTN, đặt ngay sau trang bìa phụ.
SV chuyển GVHD nhận xét và cho điểm tinh thần, thái độ, chuyên cần rồi nộp KLTN
cho BMNV.


TABLE OF CONTENT

LIST OF ABBREVIATIONS ................................................................................... i
LIST OF TABLES AND FIGURES ..................................................................... iii
INTRODUCTION .................................................................................................... 1


CHAPTER ONE: OVERVIEW ON THE CISG 1980 & THE DISPUTE
REGARDING OBLIGATIONS OF THE SELLER IN INTERNATIONAL
SALES CONTRACT ............................................................................................... 9
1.1. Overview of The United Nations Convention on Contracts for the
International Sales of Goods (CISG 1980) ............................................................. 9
1.2. Overview of obligations of the seller in international sales contract ......... 11
1.2.1. Delivery of the goods and handing over documents .............................. 13
1.2.2. Conformity of the goods ......................................................................... 17
1.2.3. Third-party claim .................................................................................... 21
1.3. Overview of dispute regarding obligations of the seller in international
sales contract ........................................................................................................... 23
1.3.1. Definition and characteristics of dispute in international sales contract 23
1.3.2. Modalities of dispute settlement in international sales contract ............. 25
1.3.3. Classification of dispute regarding obligations of the seller in
international sales contract ................................................................................ 27
1.4. The importance of analyzing and studying the dispute settlement
regarding the obligations of the seller in international sales contract under
CISG 1980 ............................................................................................................... 30
1.4.1. Literature meaning of the research ......................................................... 30
1.4.2. Practical meaning of the research ........................................................... 31

CHAPTER TWO: DISPUTE SETTLEMENT REGARDING OBLIGATIONS
OF THE SELLER IN INTERNATIONAL SALES CONTRACT UNDER
CISG 1980 AROUND THE WORLD .................................................................. 32
2.1. The application of CISG 1980 in dispute settlement ................................... 32


2.1.1. Ground for application ............................................................................ 32
2.1.2. Remedies for dispute regarding obligations of the seller ....................... 33
2.2. The current situation of dispute settlement regarding obligations of the

seller in international sales contract under CISG 1980 ...................................... 40
2.2.1. Number of dispute cases applying the CISG 1980 ................................. 40
2.2.2. Content of dispute cases ......................................................................... 42
2.2.3. Dispute settlement method ..................................................................... 43
2.3. Typical cases of dispute settlement regarding obligations of the seller in
international sales contract under CISG 1980 .................................................... 44
2.3.1. Dispute settlement regarding the delivery of goods and handing over
documents .......................................................................................................... 44
2.3.2. Dispute settlement regarding the conformity of the goods .................... 48
2.3.3. Dispute settlement regarding third-party claim ...................................... 51
2.4. General evaluations ........................................................................................ 53

CHAPTER THREE: REMARKS FOR VIETNAMESE ENTERPRISES ...... 55
3.1. Forecast on the trend of dispute regarding obligations of the seller in
international sales contract in Vietnam ............................................................... 55
3.1.1. Factors affecting the trend ...................................................................... 55
3.1.2. Forecast on the trend of dispute regarding obligations of the seller ....... 57
3.2. The situation of applying CISG 1980 in international sales contract of
Vietnamese enterprises .......................................................................................... 61
3.2.1. The current situation of applying CISG 1980 in international sales
contract of Vietnamese enterprises .................................................................... 61
3.2.2. General evaluations ................................................................................ 64
3.3. Remarks for Vietnamese enterprises ............................................................ 65
3.3.1. Draft and sign international sales contracts with the highest concern .... 65
3.3.2. Raise awareness and master the laws of international sales contract and
relevant commercial laws in the world .............................................................. 69
3.3.3. Develop qualified human resources with deep understanding of legal
aspects of international sales contract ............................................................... 71



3.3.4. Carefully research the foreign markets and partners in advance ............ 74
3.3.5. Prepare carefully for efficient litigation at court and arbitration center in
case of dispute ................................................................................................... 76
3.3.6. Strictly maintain prestige and reputation with foreign partners ............. 77

CONCLUSION
REFERENCES
APPENDICES


i
LIST OF ABBREVIATIONS

Number

Abbreviations

Definition

1

AFTA

ASEAN Free Trade Area

2

APEC

Asia-Pacific Economic Cooperation


3

ASEAN

4

BTA

Bilateral Trade Agreement

5

CIF

Cost, Insurance and Freight

6

CISG

7

DNB

Dun And Bradstreet

8

FOB


Free On Board

9

HCMC

10

Incoterms

11

ISC

12

PECL

Principles of European Contract Law

13

PhD.

Doctorate Degree

14

MD.


Master’s Degree

15

PICC

Principles of International Commercial Contracts

16

MSE

Medium and Small Enterprise

17

RAM

Registered Apprentice Model

18

TPP

Trans-Pacific Partnership

19

UCC


Uniform Commercial Code

20

UCP

Association of Southeast Asian Nations

The United Convention on Contracts for the
International Sales of Goods

Ho Chi Minh City
International Commercial Terms
International Sale Contract

Uniform Customs and Practice for Documentary
Credits


ii
Convention relating to a Uniform Law on the
21

ULF

Formation of Contracts for the International Sale of
Goods
Convention relating to a Uniform Law for the


22

ULIS

23

UNCITRAL

24

UNIDROIT

25

US

26

USD

27

VCC 2005

28

VCCI

29


VCL 2005

30

VIAC

Vietnam International Arbitration Center

31

VND

Vietnam Dong

32

WTO

World Trade Organization

International Sale of Goods
United Nations Commissions on International Trade
Law
International Institute for the Unification of Private
Law
The United States of America
U.S. Dollar
Vietnam Civil Code 2005
Vietnam Chamber of Commerce and Industry
Vietnam Commercial Law 2005



iii
LIST OF TABLES AND FIGURES

Number

Names of tables and figures

Page

Figure 3.1: The number of dispute cases regarding
1

international sales contracts handled by VIAC from 2006 to

58

2015
Table 2.1: Statistics on 5 nations with the highest number of
2

dispute cases regarding obligation of the seller from 2001 to

41

2015
Table 2.2: Statistics on number of dispute cases relating to
3


each article of the seller’s delivery hand handing over

42

documents from 2011 to 2015
Table 2.3: Statistics on number of dispute cases relating to
4

each article of the conformity of the goods from 2011 to

43

2015
Table 2.4: Statistics on number of dispute cases regarding
5

obligation of the seller settled in Trial Court and Appeal

44

court from 2011 to 2015
6

7

Table 3.1 – Export of Vietnam to top 5 markets from 2011 to
2014
Table 3.2 – Import of Vietnam from top 5 markets from
2011 to 2014


60

61


1
INTRODUCTION
1. The necessity of the research
In the era of globalization and trade liberalization occurring worldwide, the
international trade of goods has become a key driving force to promote Vietnamese
national economy. According to the statistics of the General Department of Vietnam
Customs, the national import and export volume reached 327.76 billion USD in
2015, increasing 10% in comparison with that of 2014. The total export volume in
2015 achieved 162.11 billion USD, 7.9% higher than that of the same period last
year. It can be seen that Vietnamese enterprises are effortfully expanding their
export of key commodities to foreign markets while they are in need of importing
raw materials, machines and equipment for their domestic production. In these
international business relationships, Vietnamese enterprise, as the seller or buyer,
must realize the importance of drafting and signing an international sales contract
with foreign partner to ensure the sustainability of the business transactions.
However, although contracts for international sales have served as a guarantee
for both parties in trading activities, the emergence of the dispute is inevitable,
typically the dispute resulting from the irresponsibility of the seller in executing his
obligations. Whether the conflicts are caused by subjective or objective reasons,
damage and loss still happen to both parties. Considering the context of Vietnam
actively stimulating export and the inexperience and ignorance of Vietnamese
enterprises in the international market, the dispute regarding the obligation of the
seller is unavoidably increasing, resulting in lawsuit and compensation.
Besides, recently, the President of Vietnam has timely recognized the
superiority of the United Nations Convention on Contracts for the International Sale

of Goods (hereinafter referred to as CISG 1980), a source of uniform law
embodying a modern approach to govern international sales contract and adjusting
about 80% of global transactions. The official documents have been signed on
November 24th, 2015 to ratify the participation of Vietnam in the Convention. CISG
1980 is expected to take effect on January 01st, 2017 and will become the primary
sources of applicable law for international sales contracts between Vietnamese and
foreign traders. Nevertheless, from the practice of business, the knowledge level of


2
Vietnamese enterprises about international commercial laws, in general, is still
limited. Domestic firms, which previously have less interest in understanding laws,
now have to get accustomed to a new law code. This state of uncertainty might lead
to more disputes arising in the upcoming period, especially dispute relating to the
obligation of the seller.
Acknowledged that these above-mentioned issues would put Vietnamese
enterprises at a disadvantage position and huge financial risks if they fail to
anticipate the risks, the author is inspired to choose the title: “Dispute settlement
regarding obligations of the seller in international sales contract under CISG
1980 and remarks for Vietnamese enterprises” for this graduation thesis. The
author will conduct the in-depth analysis into the law concepts and practical aspects
of dispute resolution on the obligation of the seller under the CISG 1980 to propose
valuable remarks for Vietnam firms.
2. Literature review
2.1. Overseas researches
On the worldwide scale, there are enormous sources of researches and papers
studying all extents of this subject. The publication Uniform Sales Law - The UNConvention on Contracts for the International Sale of Goods (1986) of Peter
Schlechtriem is an outstanding study under which all provisions of the Convention
are thoroughly and carefully elaborated in different aspects. Especially, the section
for the obligation of the seller (from Article 30 to 44) and remedies for the buyer

(Article 45 to 52) were closely examined and received many commentaries.
A Practical Guide to the CISG: Negotiations through Litigation written in 2007
is another study in which every provision of CISG is brought into light by
accurately analyzing the usage of legal phrases under each provision. The author
Allison E.Butler had identified the seller’s obligation thoroughly on its meaning,
purposes as well as the relevant problems arising from them.
The

Seller's

Obligations

Under

the

United

Nations

Convention

on Contracts for the International Sale of Goods by Peter Schlechtriem had taken a
closer look at the core subject of this research. The author had paid his attention to


3
only three responsibilities of the seller under CISG and give a clear insight into
what it means and how it applies in each circumstance.
Last but not least, Rights and Obligations of the Seller under the UN

Convention on Contracts for the International Sale of Goods by Fritz Enderlein is a
valuable publication that had studied the entire Part III, Chapter 2 of the
Convention, including the obligation of the seller and remedies available under
CISG for the buyer. Each provision is explained in the most precise and evident
way that provided a deep understanding of the subject based on its roots and history.
In sum, the statute of the obligation of the seller under CISG 1980 was highly
favored by foreign academic community. These researches are the helpful sources
of literature material to provide theoretical foundations and frameworks of seller’s
responsibility under CISG 1980. However, it can be seen that most of them lack
hands-on experience through the lenses of practical standpoints upon dispute
settlement in global commercial activities. Thus, they were unable to generalize the
situation of conflict resolution around the world, and no remark was suggested.
2.2. Domestic researches
In Vietnam, the number and quality of researches on CISG 1980 are not
intensive and bounteous in comparison with foreign countries. However, there are
several outstanding articles and documents that could be useful for studying.
The most recent scientific material is the summary book of the seminar Thực
tiễn áp dụng Công ước Viên 1980 về hợp đồng mua bán hàng hóa quốc tế – Bài học
kinh nghiệm cho Việt Nam organized on January 20th, 2016 at the University of Law
Ho Chi Minh City by the university’s scientific research group. The summary book
fully contains ten comprehensive and rigorous reports about the practical
application of fundamental institutions of CISG 1980, written by research group’s
members and lecturers of International Commercial Law. Typical reports can be
listed such as Thực tiễn một số tranh chấp liên quan đến hàng hóa theo quy định
của CISG 1980 written by Ms. Nguyen Thi Thu Thao (MD.), Một số vấn đề về hợp
đồng mua bán hàng hóa quốc tế trước cơ hội Việt Nam tham gia Công ước Viên
1980 written by Mr. Nguyen Cong Phu and Một số vấn đề về bồi thường thiệt hại
do vi phạm hợp đồng – Luật và án lệ của CISG written by Mr. Le Tan Phat (MD.).



4
This summary book is unimpeachably a reliable collection of informative and
readable works that equips readers with most updated knowledge analyzing under
the viewpoint of Vietnamese scholars for Vietnamese business environment.
The research Đề xuất Việt Nam gia nhập Công ước Viên về hợp đồng mua bán
hàng hóa quốc tế by The Committee on International Trade Policies of Vietnam
Chamber of Commerce and Industry published on June 2007 had considered the
experiences of the Contracting States when they became members of CISG.
Significantly, by analyzing the economy, legal systems and other aspects of
Vietnam, the research also pointed out many benefits for Vietnamese enterprises
and provided several solutions, which are practical and feasible for them to enhance
their activities in international sales contracts by using CISG 1980.
Besides, the website cisgvn.wordpress.com, established by Mr. Nguyen Trung
Nam (M.D.) – Chief Executive Officer of EP Legal, and Ms. Nguyen Minh Hang
(PhD.) – Lecturer of Foreign Trade University, has published several articles which
examine many aspects of CISG. The article Nghĩa vụ các bên supplied some legal
precedents on the matter of obligations of buyer and seller in international sales
contracts, together with the author’s commentation on each case.
These studies have reflected an utmost effort of Vietnamese researchers in
generalizing the basic theoretical and practical framework of CISG 1980 to apply to
Vietnamese economy. However, as Vietnamese enterprises are increasingly doing
international businesses, these works have not researched specifically for domestic
firms. Thus, they are unable to solve chronic and perennial problems in Vietnam.
3. Objective and duties of the research
3.1. Research objective
On the basis of examining the practice of dispute settlement regarding the
obligation of the seller in international sales contract under CISG 1980, the author
aims at conducting distinct remarks for Vietnamese enterprises to prevent conflicts
with foreign salesmen and strengthen their business activities.
3.2. Research duties

To accomplish this thesis, the author has defined principal tasks that would be
resolved in each chapter:


5
- Enquiring the theoretical foundations of the obligations of the seller in
international sales contract under CISG 1980, from which, elucidating specific traits
of disputes usually arising and reasoning why this matter should be acutely aware of
and actively studied by Vietnamese enterprises.
- Interpret the grounds for application of the remedial provisions regarding
disputes originated from the seller’s duties under CISG 1980.
- Identify the current situation of dispute settlement concerning the seller’s
responsibilities in international sales contract; analyze and elaborate on the typical
legal cases around the world to detect general findings worth considering.
- Inferring some remarks and recommendations for Vietnamese enterprises as
a precaution to prevent avoidable risks and unnecessary conflicts in international
sales contract with foreign salespersons.
4. Object and scopes of the research
4.1. Research object
The research object of this thesis is the dispute settlement regarding the
obligation of the seller in international sales contract under CISG 1980.
4.2. Research scopes
Scope of time: The thesis predominantly concentrates on the fundamental
theory and practical applications of CISG 1980 in settling disputes with respect to
the contractual obligation of the seller based on legal cases collected from the 1990
up to now. Thence, specific remarks and suggestions will be proposed for
Vietnam’s enterprises in the near future.
Scope of space: The thesis studies the usage of CISG 1980 in resolving typical
international disputes concerning the seller’s obligations between salesman from the
Contracting States such as Germany, Italia,... The selected legal cases were mostly

handled by courts and arbitration centers.
Scope of content: The thesis will elaborate on the regulations of CISG 1980
governing the obligation of the seller (specifically from Article 30 to Article 52).
After that, an in-depth analysis will be conducted on the application of the
Convention to three types of relevant dispute: dispute regarding the delivery of


6
goods and handing over documents; dispute regarding the conformity of the goods
and dispute regarding third-party claim.
5. Research methodologies
On the foundation of dialectical materialism and historical materialism, the
author used principally the method of analysis and synthesis of the information
collected throughout the researching process. In order to attain the best outcome for
the thesis, these following methodologies had also been applied to gather
trustworthy information and data:
- Secondary data collection: This method combined a series of works, such
as collecting, making relevant comparisons, analyzing, scrutinizing, synthesizing
information and data from reliable sources, namely textbooks, publications,
journals, legal documents, annual reports, domestic and international researches.
- Case study method: This technique involved collecting and selecting typical
and significant cases relating to the obligation of the seller from credible sources.
These

sources

mainly

are


the

official

database

system

of

CISG

() and International Institute for the Unification of
Private Law (UNIDROIT) database (o/). After being chosen,
the several outstanding cases would be examined carefully with the process as
followed reviewing the case face abstract and issue, determining the rules and
application, analysing the argument of parties and the Court, commenting on the
final judgment. Finally, the author will raise discussions, give comments and make
evaluations, which, later, can be utilized to draw out remarks for Vietnamese
enterprises.
- Comparative law method: This method undertook essential comparisons
between CISG 1980 and other national or regional legal systems to determine the
similarities and differences among jurisprudences on regulating the same issue,
which is the dispute settlement regarding the obligation of the seller in international
sales contract. Other law codes consist of Vietnam Commercial Law 2005 (VCL
2005), Uniform Commercial Code (UCC), Principles of International Commercial
Contracts (PICC), Principles of European Contract Law (PECL), Convention
relating to a Uniform Law for the International Sale of Goods (ULIS).



7
- In-depth interview method: The author managed to consult Mr. Nguyen
Cong Phu – Deputy Chief Judge of the Economic Court of People’s Court in
HCMC and Mr. Pham Van Chat (PhD.) – Arbitrator at Vietnam International
Arbitration Centre (hereinafter referred to as VICA). All of these professional
contributions and insightful advice helped with updating current reality of legal
system and dealing with practical and complex situations of the dispute settlement,
thus, brought out solutions and lessons for Vietnamese enterprises to minimize their
risks and reinforce their efficiency. The experts’ verifications and interview scripts
can be found in detail in the Appendix of this thesis.
6. Novelty of the research
The preceding research papers and articles have established a foundation on the
theory and applications of CISG 1980 by enterprises, arbitrators, courts and law
practitioners. They have specific and detailed analysis of the feature and traits of the
obligation of the seller and available remedial solutions for buyers in case of breach
of contract. They also point out some culture and problems arising in interpreting
and applying these provisions in courts and arbitration centers.
Apart from positive results above, it is crucial to acknowledge that there are still
demerits in the existing researches which should be carefully improved later.
Firstly, most studies concentrate on the interpretation of regulations of CISG and
discuss the subject matters on the theoretical grounds. This approach makes them
unable to realize the reality of utilizing CISG and resolving dispute settlement.
Secondly, these researches only argue about several aspects and issues regarding the
significant and important topics but lacks the solutions or recommendations for a
particular addressee. Thirdly, there are rarely paper or document that solely examine
Vietnamese enterprises in using CISG for international sales contracts and thus, no
general situation was summarized, and no remark was proposed in applying CISG
and dealing with dispute and conflict.
Recognizing the above achievements and drawbacks, the author will make
every effort to inherit the insights gained from the previous studies and, at the same

time, develop this thesis that can surmount the existing demerits. There will be no
replication or duplication maintained in this thesis. Also, the author can assert that


8
this Thesis is the first to thoroughly discuss the dispute settlement regarding the
obligation of the seller under CISG 1980 in both theoretical and practical
perspective. The subject will be open to explore a huge range of legal cases and
precedents together with their judgment in order to make comments and assessment
of the current dispute settlement concerning seller’s obligation. Additionally, the
author will exclusively investigate the ongoing situation of Vietnamese enterprises
in using CISG and handling conflict to make relevant remarks for them. The author
believes that this thesis will be helpful for future research projects and becomes a
useful reference for researchers, lecturers and students.
7. Structure of the research
In addition to the Introduction, Conclusion, List of Abbreviations, List of
Tables and Figures, References and Appendices, this thesis consists of three main
chapters, namely:
-

Chapter One: Overview on the CISG 1980 & the dispute regarding
obligation of the seller in international sales contract.

-

Chapter Two: Dispute settlement regarding obligation of the seller in
international sales contract under CISG 1980 around the world.

-


Chapter Three: Remarks for Vietnamese enterprises.

The author would like to express sincere appreciation to all lecturers and the
Board of Management of Foreign Trade University for enabling him this precious
opportunity to conduct this research, by which he has a valuable chance to enrich
his intellectual understanding. The grateful thanks would be to his supervisor, Mr.
Nguyen Tien Hoang (PhD.), who had encouraged and advised him in completing
this thesis.
Although this thesis had been revised for several times, there might be
inevitable mistakes due to insufficient knowledge and narrow awareness. The
author is looking forward to better improving his works thanks to feedback and
suggestions from all lecturers and readers.
The author
Dam Minh Hieu


9
CHAPTER ONE: OVERVIEW ON THE CISG 1980 & THE DISPUTE
REGARDING OBLIGATIONS OF THE SELLER IN INTERNATIONAL
SALES CONTRACT
1.1. Overview of The United Nations Convention on Contracts for the
International Sales of Goods (CISG 1980)
The United Nations Convention on Contracts for the International Sale of
Goods (CISG) has long been acknowledged as the most successful effort in
unifying and harmonizing international sales laws. The self-executing treaty has
contributed immeasurably in minimizing obstacles to international trade, by
forming reasonable and modern substantive rules governing issues arising from
contracts for international sales. However, this enormous accomplishment would
have never come into existence if it had not been for the predecessors of CISG. The
Convention was originated from two substantive international sales treaties

sponsored by UNIDROIT – Convention relating to a Uniform Law on the
Formation of Contracts for the International Sale of Goods (ULF) and the
Convention relating to a Uniform Law for the International Sale of Goods (ULIS),
both of which were signed at Hague in 1964 and came into effect since 1972.
Despite covering relatively all provisions regarding the formation and
performance of contract, these two creations appeared not to gain worldwide
acceptance and even encountered severe oppositions from many nations at that
time. It has been argued to have no chance to succeed from the beginning (Bruno
Zeller, 2007, page 16) since the root of this failure can be traced back to the fact that
the involvement of the Socialist States or developing countries were inconsiderable
and insignificant among 28 contracting states participated in Hague Conventions.
This leads to the subjective inferences criticizing the two conventions for being
weighted in favor of developed countries (Laszlo Reczei, 1981, page 513) and
Capitalist states as popular sellers, while the interest of developing countries and
Socialist nations, as buyers, were understated and undervalued.
In 1968, after considering the request of most countries within the United
Nations, UNCITRAL initiated an innovative project to draft a new Convention that
could solve the inherent problems of the two forerunners. As a result, the CISG was


10
formed and signed in Vienna (Austria) in 1980, with comprehensive innovations
and substantive improvement. Since then, the new Convention has ceaselessly
assisted traders from over the world in their business and earned certain
achievements. From the first 11 countries to ratify CISG as a multilateral treaty on 1
January 1988, it had steadily and continuously increased the number of countries of
adherents. As of March 2016, there are 84 States that have enacted the CISG,
including nine out of ten nations achieving the biggest export and import volume
worldwide in 2015 (Appendix 3), accounting for over two-thirds of international
trade and representing every geographic region, every stage of economic

development and every major legal, social and economic system (John Felemegas,
2000). Vietnam was the most recent state to ratify the participation plan to the
Convention, prospectively having acceded to it on January 01st, 2016.
Part of the success might be due to the ameliorative structure of Convention
which combining and reparing all the unsolved problems of the ULIS and ULF. The
Text of the Convention is presented with 101 Articles, organized into four Parts,
which standardize sufficiently all essential elements arising from contracts for
international sale of goods,. Its structure can be briefly summarized as follows:
Part 1 - Sphere of application and general provisions, comprises of the first
13 articles, stipulating clearly the applicability of the Convention and dealing with
general principles in interpretation, formality requirements and sales practices.
Noticeably, Article 7 underlines the strict adherence in interpreting the Convention,
aiming at promoting the uniformity and the good faith in global trade.
Part 2 – Formation of the contract, ranges from Article 14 to Article 24,
addressing legal matters in contract formation. This part focuses on issues emerging
from offer and acceptance, with specific regulations about definition, feature,
validity, withdrawal, and revocation. The final two articles state the time when a
contract is concluded and when an indication of intention “reaches” the addressee.
Part 3 – Sale of goods, possesses the largest number of articles (from Article
25 to Article 88). This part is logically organized into five chapters, one of which is
the core subjects of this thesis, named as Obligations of the seller. Remarkably,
there is no separate chapter for breach of contract and its applicable remedies. These


11
provisions are integrated and presented correspondingly after the lists of obligations
of each party. This arrangement proves to be preeminence over other international
sales laws since it not only eases the difficulty of lookup but also reflects the motive
of generating juridical fairness for both sides in a contractual relationship.
Part 4 – Final provisions, contains the last 13 Articles, sets out procedural

rules for nations, including the entrance process, reservations, effectiveness of CISG
and other matters regarding denunciation.
1.2. Overview of obligations of the seller in international sales contract
According to Black’s Law Dictionary (10th edition) published by West Group,
obligation is a formal and binding agreement or acknowledgement of a liability to
do a certain thing. Accordingly, international sales contract is one kind of
reciprocal legitimate agreement producing obligations binding buyer and seller in a
commercial transaction. Conventionally, the right of a party in a contract is not
explicitly established but inclusive in the duties of other party. In CISG, one finds
the rights of the buyer implied in the obligations of the seller in Articles 30-44 and
the rights of the seller implied in the obligations of the buyer in Articles 53-60”
(Fritz Enderlein, 1996, page 135). Therefore, with the purpose of smoothening the
trading process, avoiding conflicts and, mostly, ensuring the interests of parties
being fulfilled, sales laws usually concentrate on these legal responsibilities and
require the highest commitment to performance from both sides.
For PICC, the drafters do not separate the duties of each side in a contract but
neutrally demonstrates in Article 5.1.1 that the contractual obligations of the parties
may be express or implied. It means that seller might find himself binding not only
by the expressly stipulated contract clauses but also by implicit terms. The main
reason for these definition can be found in Article 1.7 of the same code, which is
each party must act in accordace with good faith and fair dealing in international
trade. Other cause might be the fact that given the nature of the purpose of the
obligation, the seller feels that these obligations went without saying, or are
included in the practices formed between the parties or prescribed by trade usages.
Similarly, the PECL also generalize joinly their contractual obligations as express
and implied responsibilities in Article 6:101 and Article 6:102.


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On the contrary, the Uniform Commercial Code, which have been promulgated

to harmonize the law of sales accross the United States of America, has set up
briefly in Article 440.2301 that the obligation of the seller is to transfer and deliver
in accordance with the contract. Especially, these obligations are emphasized to be
perfect tender, which means delivering goods that precisely meet the contract terms.
In the CISG 1980, the general obligations of the seller are summed up in Article
30 as deliver the goods, hand over any documents relating to them and transfer the
property in the goods, as required by the contract and this Convention. In
comparision with the above sales laws, CISG has a more particular approach to
define the legal responsibilities of the seller in international contract. It sets forth
three elements of due performance while the actual standards for each element are
explained in subsequent articles. Notably, despite ruling the transfering of property
in the goods as part of seller’s obligations, the Convention does not provide specific
regulations but leave the governance for domestic law chosen by conflict-of-law
rules. Therefore, applicable domestic law administers when the property is consider
passed or which documents may be needed for the transfer of property. Besides, the
Convention also extends the seller’s duties to conformity of the goods and thirdparty claims. Similar to the Convention, Vietnam Commercial Law 2005
categorizes the seller’s obligation into three main duties which is delivering goods
and handing over documents; conformity of the goods and third-party claims.
Although each sales law have its own definition, the essence of the seller's
obligation is specified by what the parties have agreed upon and written in the
contract. This reflects the general spirit fact that sales laws exalt the impotant of
freedom of contract in the context of a maket-oriented economic. Article 1.1 of
PICC states that the parties are free to enter into a contract and to determine its
content. The Vienna Convention specifically designs Article 6 to address this
principle, which allows both parties to exclude the application of the Convention,
derogate from or vary the effect of any of its provisions. The reiteration of freedom
of contract in sales law, therefore, lessens the value of CISG and its detail seller’s
obligations can be used only as supplementary to the contract of the party (Fritz
Enderlein, 1996, page 137).



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1.2.1. Delivery of the goods and handing over documents
Delivery is considered to be the most fundamental obligation of the seller in
international trade. The performance of the seller other than delivery represents an
attempt to fulfill this core obligation. The concept of delivery, however, is not
distinctly construed in the CISG. The Convention only describes how the seller can
perform their obligations, rather than whether delivery actually takes place. So,
delivery may involve different actions by the seller, such as transferring the goods
to a carrier or place goods at the buyer’s disposal if the buyer comes and collect the
goods. Therefore, it can be suggested that “delivery”, in a broader term, can be
expressed as any actual or physical actions to transfer the posession of goods by
handing them over or even by placing them at the buyer’s disposal. In CISG, the
seller’s obligation to deliver will be broken down to the following aspects.
1.2.1.1. Place of delivery
Place of delivery is the location where the seller is obligated to deliver the
goods to. Together with time of delivery, this element is indispensable as it not only
serves business purpose but also, under the CISG, determines the passage of risk
and conformity of the goods. In practice, the seller is bound to the location of
delivery which are mutually agreed and expressly written in the contract. The
contractual autonomy of parties always prevails the regulations of CISG. However,
if the parties have not agreed on a specific place for delivery, Article 31 of the
Convention provides three additional situations for application.
The first situation discusses the international sales contract involving carriage of
the goods. The Convention indicates that seller will fulfill his obligation to deliver
only when he hands the goods over to the first carrier for transmission to the buyer.
A typical example is a contract with FOB terms, which the seller have the
obligation to place the goods free on board the vessels acknowledged as the first
carrier of the buyer. This regulation mentions the first carrier because there are
usually several carriers involved. In any case, handing the goods over to a first

carrier means handing them over to an independent organization. If the seller
himself operates trucks, he is not the carrier. Besides, carrier is the collective term
used for different means of transportation.


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The other two situations deal with contracts concluded without the involvement
of the carriage of goods, which is uncommon in international sales, thus, only apply
for a small minority of international sales. The seller must place the goods at the
buyer’s disposal if the contract of sale does not involve carriage of the goods and
the goods are specific goods, or unidentified goods to be drawn from a specific
stock or future goods – which are to be manufactured or produced at a particular
place that, at the time of the contract conclusion, the parties are all aware of.
Example might be a certain quantity of rocks from a quarry, a certain quantity of
wine from the next crop in a certain vineyard, and the like. In this case, both seller
and buyer must be aware of the specific place that the goods will be drawn from or
produced at. Placing the goods at the buyer's disposal means doing everything
necessary to make the goods available so that the buyer need to do no more than
take possession. This includes specification or at least precise identification of the
goods, and, in some circumstances, preparation of the goods as required, such as
packaging and notification to the buyer.
The last situation of Article 31 implies cases of delivery in which neither the
carriage of goods nor the place of goods are specified during the conclusion of the
contract. Therefore, the seller’s place of business at the time of the conclusion of the
contract are chosen. If the seller has more than one place of business, reference
must be made to Article 10.
1.2.1.2. Time of delivery
Similar to place of delivery, the time for delivery is an integral part of the
contractual obligation because the buyer’s duty of payment arises upon delivery.
Article 33 of CISG provides three circumstances regarding time of delivery.

Subsection (a) of Article 33 states that the seller must deliver the goods on a date
fixed or determinable from the contract. Usually the parties will mutually agree on
the time of delivery in their contract so there is no negative legal issue as the date is
clear and explicit. However, the delivery time can be referred from the contract if it
follows established practices or usages impliedly made applicable.
Under subsection (b), if there is an agreement on a period of time during which
delivery can be made, the seller is at liberty to choose at which date within this time


15
span he wants to deliver. For example, given that April is set to be the time of
delivery, the seller can deliver on the first of April as well as on the thirtieth.
Predetermining a period of time often gives him necessary flexibility to prepare the
goods and arrange the transport. Nevertheless, several cases give buyer the right to
choose a date of delivery, such as in FOB contract, the buyer himself has to arrange
the carriage of the goods and charters a vessel. This will be taken as an indication
that the buyer reserves the right to choose delivery date within the agreed period. In
this case, he has to send the seller the necessary shipping instructions in due time.
For all cases falling out of the above categories, subsection (c) of Article 33
declares that the seller must deliver the goods within a reasonable time after the
conclusion of the contract. This rule corresponds to the respective rules of
numerous domestic laws, typically UCC (Section 2309(1)). It is meant to apply on
case whose date cannot be ascertained due to ambiguity or absence in a contract.
The “reasonable time” varies from case to case and depends on numerous factors,
such as nature of the goods, buyer purpose of the goods, distance covered, parties
statements during negotiations, acceptable commercial conduct and practice in
relation to similar circumstances and so on. Determining reasonable time can only
be specified precisely if buyer and seller cooperate with good faith or jurisdiction
authority handle the problem. Therefore, subsection (c) is an open regulation for
courts to make verdict in cases both parties reach an impasse in a dispute.

There was a case that an Italian plaintiff sold a bulldozer to a Swiss defendant
who did not pay two remaining instalments as he accused the seller of late delivery.
Because no date had been fixed in the contract, the court applied Article 33.c of
CISG, and found that the delivery, made within two weeks after the seller had
received the first instalment, was in reasonable time. Hence, the seller was granted
with claim for payment of the two outstanding instalments.
1.2.1.3. Handing over documents
Documentation plays an essential role in international transaction since it
legitimates the goods in sales. However, the seller is not bound to hand over
documents in all cases and the Convention also does not regulate the seller to do so.
But, if the contract or Incoterm clause or usages request the seller to tender


16
documents relating to the the goods to the buyer, Article 34 of CISG states that he
must perform this duty at the time and place and in the form required by the
contract. Here, the contract is dominant in the international business relationship.
The place, time and form of tendering documents can be found in the contract or
Incoterms and are not neccessary to be accompanied with the delivery of the goods.
The time at which documentation must be handed over is frequently made the
subject of an express provision in the contract. If the seller places the goods at the
buyer’s disposal on a particular date, the necessary documents should be tendered in
sufficient time to enable the buyer to take over the goods on that date. In other cases
where specific time is not indicated, it is required to be “as soon as possible” after
the goods have been shipped.
About the place, the seller must hand the documents over at the place stated in
the contract. If there has been no specific place agreed upon, the parties may be
identify one from the circumstances, for instance by the method of payment. If
payment is to be made by documentary credit through a bank in the seller’s country,
the place of tendering is likely the premises of the bank.

The form of tendering are less likely to be concerned. However, it is important
to conform to the form since this shows goodwill of the seller in business. The form
of tendering will set forth the method of transfering documents to the buyer such as
by post, by the carrier or by directly delievering at seller’s office.
One thing should be noted is that Article 34 neither provides a definition of the
required documents. The type of documents will often be determined by the
contract, by the clause of Incoterms or by usages. This can cover documents of title
or other ancillary kinds which do not represent the goods, such as bills of lading,
warehouse receipts or other shipping documents.
The remaining of Article 34 grants that if the seller has handed over documents
before the delivery date, he have a right to cure any lack of conformity in the
documents up to that time, provided that his act does not cause the buyer
unreasonable inconvenience or expense. For instance, he might supplement
additional copies for the missing papers or exchange documents if they were in the
wrong language.