Entering into Contracts for the International Sale of Goods in Accordance with 1980 Vienna Convention

In modern world the trade exceeded the bounds of separate countries and gained international caliber. Alongside with marketing development and appearing of new technical tools entrepreneurial entities in Armenia gain an opportunity to enter into contracts and sell goods in foreign countries without any additional complexities. The Convention on Contracts for the International Sale of Goods was adopted in 1980 in Vienna with the aim of erasing the barriers between the parties to foreign trade transactions and resolving contradictions between the legislations of different

countries when conducting foreign trade activity. This convention operates in 62 countries. Armenia connected to Vienna Convention in 2010.

Vienna Convention establishes uniform legal regime for the contracts for the international sale of goods. And it is important due to significant differences of national legal systems of different countries. So, if the parties to the contract are from different countries, for example, Armenia and France, they may have some problems due to different demands of national legislations to the contract form. This Convention is designed to resolve such contradictions. Contracts for the international sale of goods always have foreign element, as the parties are from different countries. The subject of such a contract is an importation or an exportation of goods, and as a mean of payment is used the currency which is foreign for both parties or for at least one of them.

In accordance with Article 11, the contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses. But some countries made the declaration which says that if any party has the place of business in a Contracting party’s country, the condition that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing is not applied. Such a declaration has been made in Russia, Argentina and Belarus.

Vienna Convention may be applied to the countries which are contracting parties to this Convention. Nationality, civil or trade status of the parties is not considered when determining the applicability of this Convention. Except, the contracts for the sale of goods subject to production is deemed as sale contracts if the party didn’t take an obligation to supply the significant part of the materials required for production of such goods. Vienna Convention is not applied to the contracts does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labour or other services.

Article 2 of the Convention establishes this Convention does apply to sales:

of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use;

-by auction;

-on execution or otherwise by authority of law;

-of stocks, shares, investment securities, negotiable instruments or money;

-of ships, vessels, hovercraft or aircraft;

-of electricity.

Important to remember that Vienna Convention regulates only the conclusion of the contract as well as rights and obligations of the parties to the contract. It doesn’t apply to its validity, validity of its provisions as well as all consequences which may take place with respect to the ownership of the goods. Parties from Armenia and, for example, France are bound by customs and practice which they established for their relations. The contract is concluded by means of an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price.

Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance. However, an offer cannot be revoked if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer. An offer enters into force when it reaches the offeree. The offer, even if it is irrevocable, may be withdrawn if the ­withdrawal reaches the offeree before or at the same time as the offer. The offer in any cases is terminated when a rejection reaches the offeror. 

Necessary to know that a statement or any other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance. According to Vienna Convention, the acceptance of the offer enters into force when noted assent is received by the offeror in Armenia. The acceptance is not effective if the acceptance doesn’t reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction.

However, if, by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price, without notice to the offeror, the acceptance is effective at the moment the act is performed, provided that the act is ­performed within the period of time fixed by the parties or within a reasonable time.