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Published in J. Herbots editor / R. Blanpain general editor, International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192. Reproduced with permission of the publisher Kluwer Law International, The Hague.

[For more current case annotated texts by this author, see Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed. (2003) and Lookofsky, Understanding the CISG in the USA, 2d ed. (2004).]

excerpt from

The 1980 United Nations Convention on Contracts
for the International Sale of Goods

Joseph Lookofsky

Article 2
Sales Contracts Expressly Excluded

1. Consumer Sales

59. Article 2 of the CISG provides that the Convention does not apply to the kinds of 'sales' specified in Article 2, paragraphs (a)-(f).

Taking a closer look at the first excluded item, we note that the Convention does not apply to sales: [page 38]

'(a) 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 ...'

Many States have enacted special statutes designed to protect the rights of consumers who buy goods for 'personal, family or household use,' etc.[1] By virtue of the applicable private international law (choice-of-law) rules, such consumer-protection statutes are also likely to be applied so as to protect the interests of consumers who enter 'international' (consumer) sales contracts, e.g., when they purchase goods outside their home State, while traveling abroad or via the Internet (e-commerce).

By virtue of Article 2(a), the CISG will not displace the operation of these local consumer statutes, even when the transaction is 'international' in the Article 1 sense. Thus, if a buyer who resides in CISG State A buys goods for 'personal, family or household use' from a seller whose place of business is in CISG State B, the CISG will not apply,[2] unless such 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.[3]

1. Numerous examples are to be found in the United States, both at the State and Federal level: see, e.g. E.A. Farnsworth, Contracts (1999) §4.29. Similar examples are to be found within the context of the European Union: see, e.g. J. Lookofsky, 'The State of the Union ... in Contract and Tort', XLI American Journal of Comparative Law 89 (1993).
2. I.e. Article 1(1) notwithstanding. See, e.g., the decision of Oberster Gerichtshof, Austria, 11 February 1997, No. 10 Ob 1506/94, CLOUT Case 190, also reported in UNILEX, holding that the CISG was not applicable to sale of Lamborghini automobile purchased for buyer's personal use.
3. Regarding the burden of proof, if the buyer can establish that the goods in fact were bought with such purpose in mind, it will presumably be up to the seller (who claims the CISG should apply) to show that he was in 'good faith' (neither knew nor should have known). Regarding the possible overlap between consumer-protection laws and the CISG, see Herber, R, in Schlechtriem, P., Commentary on the UN Convention on the International Sale of Goods (CISG), p. 34 (Oxford 1998).

2. Additional Exclusions

60. In addition to the subsection (a) exclusion applicable to 'consumer sales,' subsections (b)-(f) of Article 2 provide that the Convention does not apply to sales:

'(b) by auction; (c) on execution or otherwise by authority of law; (d) of stocks, shares, investment securities, negotiable instruments or money; (e) of ships, vessels, hovercraft or aircraft; (f) of electricity.'

The exclusion of sales by auction (b) and on execution (c) are attributed to the special character of such sales and to the special nature of the applicable domestic law rules. The exclusion of stocks, shares, investment securities, negotiable instruments and money (d) was also intended to avoid conflict with mandatory rules of domestic law applicable to international securities and currency transactions. The exclusion of ships, vessels, etc. (e) is attributed to special (registration) rules often [page 39] applicable to these kinds of goods; there is, however, some disagreement as to where (or whether) to draw the line between, e.g. an excluded 'ship or 'vessel and a (smaller) 'boat'.[1] [page 40]

1. Compare Honnold J., Uniform Law for International Sales (1999) at pp. 50-51 [available at <http://www.cisg.law.pace.edu/cisg/biblio/honnold.html>] and Herber in Schlechtriem op. cit. at pp. 36-37.

Pace Law School Institute of International Commercial Law - Last updated April 1, 2005
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