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CISG and Distribution Agreements

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Does CISG apply to distribution agreements?

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CISG and Distribution Agreements

  1. 1. The CISG’slimitedsphere ofapplication Sales v. distributionagreements© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 0
  2. 2. Article 1(1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 1
  3. 3. FRAMEWORK AGREEMENT (itlays down the terms on whichlaterindividualcontractsof sale willbeconcluded) (services no CISG) + SALES CONTRACTS (sales CISG)© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 2
  4. 4. ROME I REGULATION (recital 17) Although franchise and distribution contracts are contracts for services, they are the subject of specific rules. art. 4 (f) a distribution contract shall be governed by the law of the country where the distributor has his habitual residence;© Roberto Luzi Crivellini. All rights reserved. 3
  5. 5. TYPICAL CONTRACTBELGIUM CZECK REP RUSSIAPANAMA GUATEMALAHONDURAS PARAGUAYPUERTO RICO OMAN TUNISIALEBANON© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 4
  6. 6. BELGIUM Act of 27 July 1961 concerning the unilateral termination of exclusive distributorship concession of an undetermined duration, as modified by the Act of 13 April 1971.© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 5
  7. 7. BELGIUMA distribution concession, pursuant tothis Act, is any agreement by which aprincipal grants to one or moredistributors the right to sell in his ownname and for his own account productsthat he himself produces or distributes© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 6
  8. 8. SPAIN Decreto Real 201/2010“The contractofconcessionof sale ordistributionis thecontractbywhichanenterpreneurcommittstobuy, at certainsconditions, products–generallybranded–fromanotherenterpreneur, CISG and Distribution agreementswhograntstohimexclusivity in acertainterritory, and toresell the productsat certainconditions, aswellas,toprovideafter sale service”© Roberto Luzi Crivellini. All rights reserved. 7
  9. 9. Applicationbyanalogyofcertainprovi sionsoflaws on commercial agencyGERMANY FRANCE AUSTRIASWITZERLAND SPAIN PORTUGAL© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 8
  10. 10. Federal District Court of Pennsylvania 29.8.2000 Althoughexclusivedistributionagreements are consideredcontractsfor the sale ofgoods under the UCC adopted in Pennsylvania …. The CISG doesnotapplytodistributorshipagreements that do not cover the sale ofspecificgoods and contain definite termsregardingquantity and price.© Roberto Luzi Crivellini. All rights reserved. 9
  11. 11. OberlandesgerichtMünchen 22.9.1995 If the distribution agreement onlyprovidesfor the supplyofproducts (and no ancillarycovenants) then CISG can beconsideredapplicable© Roberto Luzi Crivellini. All rights reserved. 10
  12. 12. Italian Cassation Court (sez. Un. 20.9.2004 n. 18902) The exclusivedistribution agreement is a frameworkcontractwhich can beimplemented in differentways… the exclusivecovenant in this case wasancillary…sincewe deal withinternationaksalesofgoods…. CISG can beapplied© Roberto Luzi Crivellini. All rights reserved. 11
  13. 13. FRAMEWORK AGREEMENT (services no CISG) + SALES CONTRACTS (sales CISG) ?© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 12
  14. 14. Concessionof sale: a distributionagreement whichhasasitsprimaryaim the commercializationof theproducts in a certainterritory,accordingto the expectationsof thegrantor…© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 13
  15. 15. …whichentails a priviledgedposition for the distributor(generallybutnotnecessarily, anexclusivity in the territory) andrequires in compensationcertaininvestments and a binding noncompete covenant (prof.FabioBortolotti)© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 14
  16. 16. SALES FRAMEWORK AGREEMENT (programofsupplies) DISTRIBUTION AGREEMENT (ancillarycovenants: exclusivity, etc.) CONCESSION OF SALE (Integration in a network - the coreof the agreement is the collaboration, organization and promotion ofsales)© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 15
  17. 17. CONCESSION / DISTRIBUTION AGREEMENT GENERAL CONDITIONS OF SALE ORDERS / CONFIRMATIONS© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 16
  18. 18. CISG applicablerules Art. 8 (interpretation) Art. 9 (tradeusages) Art. 74 (damages)© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 17
  19. 19. Opting in. Whynot? Itisnotexpresslyprovidedfor in the CISG, butitisgenerallyacceptedthat the parties are at liberty tochoosetoapply the CISG evenwhenitwouldnotbeapplicableratio nemateriae or under the “placeof business” or the international private lawrules (ICC case 11849/2003)© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 18
  20. 20. ICC RULES OF ARBITRATION Article 21: Applicable Rules of Law 
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 19
  21. 21. UNIDROIT PRINCIPLES Article 21: Applicable Rules of Law 
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 20
  22. 22. Art. 7 (2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law© Roberto Luzi Crivellini. All rights reserved. CISG and Distribution agreements 21
  23. 23. CISG and Distribution Agreements?
  24. 24. … you’d better have a good contract. Roberto Luzi Crivellini roberto.luzi@yingke.it

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