The impact of the CISG on international business transactions Essay

The impact of the CISG on international business transactions - Essay Example 1.2. Thesis statement Recent years have been proved to be challenging for financial markets all over the world due to a spread in the international business transactions as well as the risks behind it. Starting from this idea, and also the past customs in international trade, this paper proposes to analyze the impact of contracts for international sale of goods (CISG) on the international business transactions. 1.2. Literature Review According to Ferrari (2009) contracts for international sale of goods was a huge success. In his paper he has argued that it is one of the greatest legislative or governmental achievements in the process of harmonizing the classified commercial law. Within a short span of time a total of 70 countries became the member of CISG. A number of eminent scholars have highlighted the importance of CISG in the international arena. In order to cite an instance according to Fletcher (2009) the Contract for International Sale of Goods is one of the most successful a ttempts to harmonize the international trade. He further quoted that CISG project was a successor of the 2 substantive international sales agreements. The agreements were ‘Uniform Law on the Formation of Contracts for the International Sale of Goods’ and ‘Uniform Law for the International Sale of Goods’. It has to perform a number of functions. Some of them are highlighted below:- It administers the international sales agreements if both the associated parties are belong from the member countries. To manage the conflicts between the member countries with respect to international trade. It also tries to safeguard the private sovereignty of the member parties. Chapter 2 Building on the CISG 2.1. International... In general United Nations Convention on Contracts for the International Sale of Goods is a necessary convention for the member countries that provide rules to administer the cross border sale of goods. It mainly seeks to lessen the problems of international trade pertaining to law. It is also a fact that whenever a cross border transaction takes place some form of disputes is bound to happen. Hence in order to reduce it and facilitate smother transaction process harmonization of international trade took place. This has also led to the formation of CSIG. It offered easier ways to carry out foreign trade when compared with the complex laws and bodies found in most of national rules and regulations. After the incorporation of CSIG the system of international trade witnessed drastically changes. There were hassle free transactions, and the process become easier. Apart from that it was also notices that the transaction cost got highly reduced thereby offer benefits to both the parties inv olved. Furthermore after its incorporation there were also large relaxations in the international trade law. Hence on the basis of the recoded data and reviewing the literatures about the United Nations Convention on Contracts for the International Sale of Goods, it can be concluded that CSIG played an extremely important role in facilitating smoother international trade. Hence it has been able to impact positively on the international business transaction.