REMEDIES OF THE BUYER UNDER CISG 1980 AND REMARKS FOR VIETNAMESE ENTERPRISES

FOREIGN TRADE UNIVERSITY
HO CHI MINH CITY CAMPUS
---------***---------

GRADUATION THESIS
Major: International Business Economics

REMEDIES OF THE BUYER UNDER CISG 1980 AND
REMARKS FOR VIETNAMESE ENTERPRISES

Author

:Hồ Phú Minh Quân

Student ID : 1301015393
Class

: K52CLC2 - C4

Supervisor : Nguyễn Tiến Hoàng (PhD.)

Code: C39

Ho Chi Minh City, May 2017



Mã KLTN: C39
TRƢỜNG ĐẠI HỌC NGOẠI THƢƠNG
CƠ SỞ II TẠI TP. HỒ CHÍ MINH

NHẬN XÉT KHÓA LUẬN TỐT NGHIỆP
Họ và tên sinh viên: HỒ PHÚ MINH QUÂN

MSSV: 1301015393

Tên đề tài:
Remedies of the Buyer under CISG 1980 and remarks for Vietnamese enterprises
(Chế tài thƣơng mại của Ngƣời Mua trong Công Ƣớc Viên 1980 và bài học 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 hƣớng dẫn của GVHD. GVHD
chịu trách nhiệm về tên đề tài, mục đích, đối tƣợng, phạm vi & phƣơng pháp nghiên
cứu và tên các chƣơng, các đề mục chính (3 chữ số): 0,8 - 1 điểm
2.Sinh viên đã thực hiện theo hƣớng dẫn của GVHD nhƣng chƣa đầy đủ. GVHD
chịu trách nhiệm về tên đề tài, mục đích, đối tƣợng, phạm vi & phƣơng pháp nghiên
cứu và tên các chƣơng, các đề chính (2 chữ số): 0,5 - 0,7 điểm
3.Sinh viên chƣa thực hiện đầy đủ hƣớng dẫn của giảng viên. GVHD không chịu
trách nhiệm về đề tài: 0,1 - 0,5 điểm
4.Sinh viên không thực hiện hƣớng dẫn của GVHD. GVHD không đồng ý cho sinh
viên nộp KLTN: 0 điểm
Tp.Hồ Chí Minh, ngày 05 tháng 05 năm2017
Giảng viên hướng dẫn
(Ký và ghi rõ họ tên)

TS. Nguyễn Tiến Hoàng
Ghi chú:Mẫu nhận xét này đƣợc 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 OF THE CISG 1980 AND THE REMEDIES
OF THE BUYER ..................................................................................................... 11
1.1. Overview of The United Nations Convention on Contracts for the
International Sales of Goods (CISG 1980) ............................................................11
1.1.1. Adoption and ratification........................................................................11
1.1.2. Content and structure of CISG 1980 ......................................................12
1.2. Dispute in International Sales Contracts due to Seller's breaching acts ....13
1.2.1. Obligations of the Seller in International Sales Contracts .....................13
1.2.2. Dispute regarding the Seller's obligations in International Sales
Contracts ...........................................................................................................19
1.2.3. Methods of dispute reconciliation in International Sales Contracts .......21
1.3. Remedies of the buyer in International Sales Contracts ..............................22
1.3.1. Prerequisite for the application of Buyer's remedies ..............................22
1.3.2. Buyer's remedies under CISG in International Sales Contracts .............24
1.4. The importance of researching and studying the remedies of the Buyer
under CISG 1980 .....................................................................................................31
1.4.1. From the State's perspective ...................................................................31
1.4.2. From the enterprises' perspective ...........................................................32

CHAPTER TWO: REMEDIES OF THE BUYER IN INTERNATIONAL
SALES CONTRACT UNDER CISG 1980 AROUND THE WORLD .............. 34
2.1.

Current situation of applying CISG 1980 stipulations regarding the

remedies of the Buyer in International Sales Contracts ......................................34
2.1.1. Number of dispute cases.........................................................................34
2.1.2. Content of dispute cases .........................................................................36


2.1.3. Dispute settlement method .................................................................... 37
2.2. Typical cases of applying CISG 1980 stipulations regarding the remedies
of the buyer in International Sales Contracts...................................................... 38
2.2.1. Require performance ............................................................................. 38
2.2.2. Declare contract avoided ....................................................................... 43
2.2.3. Reduce contract price ............................................................................ 48
2.3. General evaluations ......................................................................................... 52
2.3.1. High utilization of CISG 1980 in dispute settlements ........................... 52
2.3.2. Complications in using Buyer's remedies under CISG 1980 ................ 54

CHAPTER THREE: REMARKS FOR VIETNAMESE ENTERPRISES .......55
3.1. Forecast on the trend of disputes in International Sales Contracts due to
Seller's breaching acts in Vietnam ........................................................................ 55
3.1.1. Forecasting foundation .......................................................................... 55
3.1.2. General forecasts ................................................................................... 58
3.2. Forecast on the trend of applying CISG 1980 of Vietnamese enterprises . 62
3.2.1. Forecasting foundation .......................................................................... 62
3.2.2. General forecasts ................................................................................... 66
3.3. Remarks for Vietnamese enterprises ............................................................ 66
3.3.1. Carefully prepare and sign International Sales Contracts ..................... 66
3.3.2. Build profoundly awareness and understanding of international laws . 70
3.3.3. Carefully study the foreign markets and foreign partners in advance ... 72

3.3.4. Sustain qualified human resources with deep legal knowledge of
international sales contract .............................................................................. 74
3.3.5. Strictly maintain prestige with foreign partners .................................... 77

CONCLUSION
REFERENCES
APPENDIXES


i
LIST OF ABBREVIATIONS
Number

Abbreviations

Full words

1

AEC

ASEAN Economic Community

2

AFTA

ASEAN Free Trade Area

3

APEC

Asia-Pacific Economic Cooperation

4

ASEAN

Association of Southeast Asian Nations

5

ASEM

Asia-Europe Meeting

6

BGB

Bürgerliches Gesetzbuch (Germany Civil Code)

7

CEO

Chief Executive Officer

8

CIETAC

China International Economic and
Trade Arbitration Commission
United Nations Convention on Contracts for the

9

CISG

10

DNB

Dun & Bradstreet

11

EU

European Union

12

EUR

Euro

13

EVFTA

EU-Vietnam Free Trade Agreement

14

FOB

Free On Board

15

HCM

Ho Chi Minh

16

ICC

International Chamber of Commerce

17

PECL

Principles of European Contract Law

18

PICC

Principles of International Commercial Contracts

19

PRC

People's Republic of China

20

Q&A

Question and Answer

21

RAM

Registered Apprenticeship Model

International Sale of Goods


ii
22

TPP

Trans-Pacific Partnership

23

UCC

Uniform Commercial Code

24

UCP

Uniform Customs and Practice for Documentary Credits

25

ULF

26

ULIS

Uniform Law for the International Sale of Goods

27

UNCITRAL

United Nations Commission on International Trade Law

28

UNIDROIT

International Institute for the Unification of Private Law

29

USD

U.S. Dollar

30

VCCI

Vietnam Chamber of Commerce and Industry

31

VCL

Vietnam Commercial Law

32

VIAC

Vietnam International Arbitration Centre

33

WTO

World Trade Organization

Uniform Law on the Formation of Contracts for
International Sale of Goods


iii
LIST OF TABLES AND FIGURES
Number
1

Names of tables and figures
Figure 2.1 - Top 10 nations with the highest number of

Page
35

cases applying CISG 1980 in 2016
Figure 3.1 - Number of dispute cases regarding

2

International Sales Contracts against the total number of

58

cases handled by VIAC from 2006 to 2015
Table 2.1 - Top 5 nations with the highest number of
3

dispute cases relating to the application of the Buyer's

34

remedies from 1990 to 2016
Table 2.2 - Number of dispute cases regarding the
4

application of Buyer's remedies under Article 46, 47, 49

37

and 50 CISG
Table 2.3 - Number of dispute cases regarding the
5

application of Buyer's remedies handled by Trial Court and

38

Appeal Court from 2011 to 2015
6

7

Table 3.1 - Top 5 export markets of Vietnam from 2011 to
2016
Table 3.2 - Top 5 import markets of Vietnam from 2011 to
2016

60

61

Table 3.3 - Statistics on the number of CISG member
8

countries acting as import and export markets to Vietnam
from 2011 to 2015

65



1
INTRODUCTION
1. The necessity of the research
By reason of the globalization trend, and the rapid development of technology,
trade liberalization is transpiring worldwide, which makes international business
activities nowadays more animated than ever before. The export and import
activities, in particular, are being executed more frequently in many countries,
including Vietnam.According to the figures of the General Department of Vietnam
Customs, the volume of export and import of our nation rose to 350.74 billion USD
in 2016, which represents a 7.1% increase in comparison with that of 2015. Our
export and import volumes, which are 176.63 billion USD and 174.11 billion USD

accordingly, both experienced an increase of 9% and 5.2% respectively compared to
the same period last year. From the numbers, it is evident that on the one hand,
Vietnamese enterprises are arduously aggrandizing the export of their key
commodities to foreign markets, but on the other hand, they are still dependant
largely on importing important raw materials and equipments for the domestic
manufacturing. Therefore, all Vietnamese enterprises, whether act as buyers or
sellers in international business relationships, should acknowledge the great
significance of drafting and signing an international sales contract with foreign
counterparts to ensure and harmonize the sustainability of the transactions.
In essence, the contract for international sales provides both parties involved
with gains and benefits via each side successfully fulfilling its obligation. However,
in trading activities, the appearance of dispute is unavoidable.The conflicts can be
resulted from either side, especially from the seller's for not properly and timely
executing the contract duties.Whichever side and cause engendering the disputes,
one apparent thing is that both parties will suffer loss and damage resulting from the
incident.Considering Vietnam where the export and import activities are
energetically occurring,together with the inexperienced and untried knowledge of
the Vietnamese enterprises in global market, the number of conflicts resulting from
the seller's breach of contract is inevitably increasing, resulting in expensive and
costly lawsuit. Therefore, as a buyer, studying about the available remedies,
knowing to use which tools under which situation, is significantly important.


2
Besides, on December 18th 2015, Vietnam has acceded to the United Nations
Convention on Contracts for the International Sale of Goods (hereinafter referred to
as CISG 1980), and officially became the 84th State Party to the Convention. The
Convention serves as an equitable and modern framework in regulating the drafting
of contractsof international sale of goods, the obligations of the buyer and seller,
together with their available remedies in case of a breach of contract from the other

counterpart, and other contract-related aspects.Starting from January 1st2017, the
Convention has entered into force in Vietnam and officially became the
fundamental sources of applicable law for sales contracts between Vietnamese and
foreign traders. However, considering the practical situation of Vietnam, the
knowledge of our enterprises towards international laws, especially the CISG 1980,
is still limited.A survey conducted by VIAC suggested that 80% to 90% of our
domestic firms do not aware of or fully understand the CISG 1980.This inactive
approach of Vietnamese firms will lead to more uncertainties in doing business, and
thus create more disputes, especially those resulting from the contract breach of the
seller. Therefore, it is a must for Vietnamese enterprises to invest their time and
effort in studying and understanding the CISG 1980 as a whole, and in particular,
the remedies of the buyer provided by the Convention.
Appreciating the importance of the CISG 1980 stipulations regarding the
remedies of the buyer in reconciling the commercial disputes, together with the
theoretical basis having learned at Foreign Trade University HCM city, the author
decide to choose the topic: "Remedies of the Buyer under CISG 1980 and
remarks for Vietnamese enterprises" for this graduation thesis. The thesis will
contain detail analysis into the legal concept and practical aspect of the buyer's
remedies under CISG 1980 for dispute settlement. From the analysis, the author will
propose some remarks and lessons for Vietnamese enterprises.
2. Literature review
2.1. General content of CISG 1980
2.1.1. Overseas researches
The CISG: A New Textbook for Students and Practitioners, of Peter Huber
and Alastair Mullis, published in 2007, is an outstanding material that covers all


3
provisions of the Convention. The book provided a clear and simple exposition of
the text so that all students and practitioners alike can easily grasp the content of

CISG, from the history of the Convention, to its structure and scope of application.
The book also explained many complex trade-related issues of CISG, including the
obligations of the seller, and remedies of the buyer.
Moreover, the publication of Uniform Sales Law - The UN-Convention on
Contracts for the International Sale of Goods (1986), researched by Peter
Schlechtriem (PhD.)made an efforfully look at all stipulations of CISG under
different aspects. Among them, the content regarding the remedies for the buyer
(from Article 45 to Article 52) and the obligation of the seller (from Article 30 to
Article 44) was thoroughly examined.
2.1.2. Domestic researches
Apart from overseas papers, the research Công ước Viên năm 1980 về hợp
đồng mua bán hàng hóa quốc tế by Ms. Nguyen Thi Mai, finished in 2014, is also a
useful material for the understanding of CISG 1980. The reseach had summarized
the structure and content of CISG 1980, together with some practical influences of
the Convention application on many trade-related aspects of Vietnamese firms. At
the same time, the research has pointed out, at the macroeconomic level, the
benefits, issues and several solutions when Vietnam accedes to the Convention.
Additionally, 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 by University of Law HCM City in 2016 is another valuable and
updated scientific material relating to CISG 1980. The summary book comprises ten
different reports covering a wide range of legal issues of the Convention, written by
member of the university research team and lecturers of International Commercial
Law. Typical reports are Thực tiễn một số tranh chấp liên quan đến hàng hóa theo
quy định của CISG 1980, prepared by Ms. Nguyen Thi Thu Thao (MD.), or Một số
vấn đề về hợp đồng mua bán hàng hóa quốc tế trước cơ hội Việt Nam tham gia
Công ước Viên 1980, compiled by Mr. Nguyen Cong Phu. This summary book is
surely an informative collection of the most updated knowledge and analyses under

4
many Vietnamese scholars' perspectives, contributing for the better future of
Vietnamese business environment.
2.2. Seller's obligations in international sale of goods contracts
2.2.1. Overseas researches
One specialized study concerning the seller's obligations in international
contracts is The Seller'sObligations under the United Nations Convention on
Contracts for the International Sale of Goods by Peter Schlechtriem. This research
had taken a closer and more detailed approach on the obligations and
responsibilities of the seller in cross-border transactions under CISG 1980, and
provided valuable insights about the intepretations and application of respective
articles in certain circumstances.
2.2.2. Domestic researches
In Vietnam, exhaustive studies on certain subjects alone are not very popular.
One article addressing directly to this matter is named Nghĩa vụ các bên (2012),
available at . The website was established by Mr.
Nguyen Trung Nam - Executive Director of EPLegal, and Ms. Nguyen Minh Hang
(PhD.) - Lecturer of Foreign Trade University, and focused mainly on the research
of CISG in Vietnam. The article in question supplied several legal precedents on the
subject of buyer's and seller's obligations in international sales contracts, together
with the discussion and commentation of the author on each individual case.
In addition, the latest establishment in 2016, jointly published by VIAC and
Foreign Trade University named 101 câu hỏi - đáp về Công ước của Liên Hợp
Quốc về Hợp đồng mua bán hàng hóa quốc tế (CISG) is another valuable book on
many aspects of the Convention. Specifically, Section 1 of Part 3 put a heavy
emphasis on the seller's obligations in cross-border transactions, via the format of
Q&A where many frequently asked questions are answered in a detailed and
exhaustive manner.
2.3. Buyer's remedies under CISG 1980 in international sale of goods contracts
2.3.1. Overseas researches

One of many great material sources include the paper named Buyer's remedies
under the CISG and English sales law: A comparative analysis, written by Nevi


5
Agapiou in 2016, is another eminent study where certain stipulations of CISG
regarding the buyer's remedies (especially from Article 45 to Article 52) is closely
elucidated. By comparing certain CISG provisions against established English sales
law, this paper make the Convention more comprehensive and digestible to many
lawyers and law practitioners worldwide. However, many legal cases occupied in
the paper are archaic and briefly used for illustration purpose only. No updated case
or precedent is analyzed in a detailed manner.
Remedies of the buyer under CISG, written by Gusztáv Bacher (PhD.) in 2008,
is another informative study on the core subject of this thesis. The paper analyzed
all the remedies offered to the buyer under CISG 1980 in case of breach of contract
by the seller, by interpreting relevant CISG provisions, together with discussions
about some problems of each remedy.
2.3.2. Domestic researches
As mentioned above, the publication of 101 câu hỏi - đáp về Công ước của
Liên Hợp Quốc về Hợp đồng mua bán hàng hóa quốc tế (CISG) covers a wide
range of CISG content. The subject of buyer's remedies is also incorporated within
the book, located in Section 2 of Part 3. Similar to the content of seller's contractual
obligations, the subject in question is also represented in Q&A format.
In addition, the scientific paper So sánh các quy định về trách nhiệm do vi
phạm hợp đồng trong Luật Thương mại Việt Nam 2005 và Công ước Viên 1980,
written by Ms. Phan Thi Thanh Thuy in 2014 provided valuable comparative
information between Vietnam Commercial Law 2005 and CISG 1980 on the matter
of "breach of contract". The paper was posted on the Scientific Journal of Vietnam
National University, Hanoi: School of Law, volume 30, page 50-60. The paper also
developed further comparison regarding the theories and the enforcement of buyer's

remedies between the two legal systems.
In short, studies onCISG 1980 in general, as well as materials relating to the
seller's contractual obligations, and the buyer's remedies under CISG framework in
international sale of goods receive exuberant attention from foreign scholars. These
papers and articles accommodate the author with helpful literature resources to
build a strong theoretical framework for this thesis regarding the buyer's remedies


6
under CISG 1980. Notwithstanding, it is evident that thestudies above put too much
emphasis on theoretical analysis and thus lack insightful experience about the
application of these remedies. Without the update on and detailed explanation of
legal cases, it was impossible to generalize the overall picture of buyer's remedies
usage worldwide. Therefore, no applicable remark was recommended.
Vietnamese scholars and researchers also showed relentless endeavor in
examining the theoretical and practical framework of CISG 1980, in order to make
its legal content more digestible to domestic enterprises. However, these studies did
not analyse the practical circumstances of domestic firms applying the Convention.
As Vietnamese firms are engaging in more trade activities with foreign counterparts,
they might get involved in new conflicting situations which requires more dedicated
studies to resolve them efficiently and effectively.
3. Objective and duties of the research
3.1. Research objective
By researching the topic of the buyer's remedies under CISG 1980, the author
aims at contributing specific remarks for Vietnamese firms to prevent disputes, or to
resolve them in an economic and effective manner if they exist. These remarks shall
be presented in Chapter 3 and include: (1)the careful preparation of signing
International Sales Contracts,(2) the build of profound understanding of
international laws, (3) the acquisition of qualified human resources with deep legal
knowledge, (4) the advance study of foreign markets and partners,and (5) the strict

maintainance of prestige with foreign partners.
3.2. Research duties
In order to achieve the above-mentioned objective, the author would like to
specify the following fundamental duties that the research intends to underscore:
 Provide basic knowledge about the CISG 1980.
 Enquire theoretical groundwork of the conflicts resulting from the seller's
breach of contract.
 Identify the grounds for application of remedial stipulations to resolve
conflicts resulting from the seller's breaching acts under CISG 1980.


7
 Analyze the current situation of applying CISG 1980, especially the buyer's
remedies in international sales contract to resolve disputes, together with detail
investigations on typical legal cases.
 Recommend some remarks for Vietnamese enterprises to avoid unnecessary
risks and conflicts in international sales contract with foreign counterparts.
4. Object and scopes of the research
4.1. Research object
The object of this research thesis is the remedies of the buyer under CISG
1980 in international sales contract.
4.2. Research scopes
Scope of content:The thesisfocuseson the buyer's remedies under CISG,
especially the threefollowing remedies: (1) Require performance (which includes
substitute delivery or repair, and fixing additional time for performance); (2)
Declare contract avoided; and (3)Reduce contract price. The buyer's right to claim
damages for breach of contract, or other buyer's remedies for endangered
contractual obligations, such as suspension of performance, are mentioned
throughout the paper for contextual intentions only. However, theseparticular
remedies, as micro sections, are excluded from the thesisnot only because of word

restrictions, but also because these remedieshad been seperately and deeply studied
in many related works.
Scope of space: The thesis researches the application of dispute remedies
usable by the buyer provided under the framework of CISG 1980 between
businessmen whose nations adopt such Convention as the applicable law. The law
cases were mostly administered by courts and arbitration centers.
Scope of time: The thesis focuses on the fundamental theory and practical
application of CISG 1980 by investigating its buyer's remedial systems based on
legal cases compiled from 1990 (the starting year of CISG's official database)up to
now. From such analysis, distinct recommendations will be suggested to support
Vietnamese firmson the path of international integration until 2020, which aligns
with Decision No.40/QD-TTg by the Prime Minister Nguyen Tan Dung in 2016


8
regarding the overall strategy for international integration through 2020, with a
vision toward 2030.
5. Research methodologies
Conforming to the purposes stated above and on the foundation of dialectical
materialism and historical materialism, the author adopts the following 04
methodologies in conducting the thesis:
 Secondary data collection: This method encompasseda sequence of tasks,
such as gathering, analyzing, making comparisons and compiling data and
information from credible sources, namely textbooks, journals, legal documents,
domestic and international researches.
 Comparative law:This method required the author to collate CISG 1980
with other national or regional legal systems, in order to detect similarities and
differences among jurisprudences on governing the same matter of the buyer's
remedies in international sales contract.
 Case study: This method involved collecting typical legal cases relating to

the application of the buyer's remedies and their following consequences in settling
trade disputes.These cases are provided in the official database systems of CISG
() and of UNIDROIT (o). There
will be some outstanding cases being deeply analyzed using the FIRAC (Fact, Issue,
Rule, Application, and Conclusion) Model, with sufficient arguments and evidences
from both parties. At the end of each case, the author will raise some discussions
and remarks for domestic enterprises.
 In-depth interview:The author organized to consult Mr.Nguyen Trung Nam
- Executive Director of EPLegal, Mr. Nguyen Cong Phu - Deputy Chief Judge of
the Economic Court of People's Court HCM City, and Mr. Pham Van Chat (PhD.)Arbitrator at Vietnam International Arbitration Centre. All of these professional
contributions and expertise judgements helped updat the thesis with the latest
situation regarding application of buyer's remedies in international sales contract
under CISG. These insightful advice were used to recommend suggestions and
remarks for Vietnam enterprises presented in Chapter three. The experts' personal


9
information and interview scripts,together with their verifications are listed in
Appendix 1 and 2 at the end of the thesis.
6. Novelty of the research
Literature meaning of the research
Firstly, the research regarding the buyer's remedies can assist legislative
bodies in digesting the Convention in a more comprehensive manner. By fully
understanding the merits and demerits of CISG 1980, the legislative bodies can
collate them with the domestic law, with the aim of identifying and modifying the
implicit flaws which exist in the Vietnamese legal system and complicate the trade
process between domestic and foreign businesses. The transplatation of laws, which
is the amendment of domestic laws to align with the legislative system of
international treaties and conventions (in this case, it is the modification of
Vietnamese commercial law to be incompatible with the CISG 1980) is regarded as

an on-going trend globally, and is proved to be able to strengthen the legal
framework of domestic laws to fit the current fast-paced economy.
Secondly, the study helps diversify the academic sources on the topic
regarding the application of buyer's remedies under CISG 1980. As the study of the
Convention does not attract enough attention from the academic forum of Vietnam,
this study unquestionably supplies some general perspectives on the subject, which
can benefit researchers in writing more advanced papers. However, by using this
thesis as reference, the academic forum can generate deeper and more practical
studies on other related fields of the buyer's remedies under CISG 1980, from which
more remarks and lessons can be drawn to assist Vietnamese enterprises.
Practical meaning of the research
Firstly, because the concept of CISG 1980 is not popular to Vietnamese firms
as it should be, the author believes that this thesis can provide domestic companies
with higher awareness about the Convention. As the CISG 1980 has officially been
effected since the beginning of 2017 and influences significantly the majority of
international sales contracts in Vietnam, the goal to generate awareness and educate
domestic firms about the Convention will be more urgent than ever. Besides, this
study also provides Vietnamese enterprises with credible and trustworthy sources of


10
experiences and lessons in applying different remedies of the buyer to reconcile
conflicts effectively. The author believes that only by understanding thoroughly the
CISG 1980 and learning from many of its precedents and experiences that the
domestic companies can be fully confident in drafting contracts, conducting trade
with foreign partners and avoid unneccessary disputes.
Secondly, this thesis also assists arbitrators and judging bodies in shortening
the duration in handling each legal cases. This progress can be achieved by utilizing
the general remarks and findings regarding the application of buyer's remedies in
conflict settlement under the Conventionin the study. Over the long term, not only

can the dispute settlement bodies enhance their professions, but also they can, from
the experiences of processing many legal cases, detect the root causes and reality of
many commercial conflicts and apply the most effective and appropriate remedies
to reconcile the conflicts between contracting parties.
7. Structure of the research
Besides the Introduction, Conclusion, List of Abbreviations, List of Tables
and Figures, References and Appendixes, the thesis contains three main chapters:
 Chapter One: Overview of the CISG 1980 and the remedies of the buyer
 Chapter Two: Remedies of the buyer in international sales contract under
CISG 1980 around the world
 Chapter Three: Remarks for Vietnamese enterprises
The author would like to hereby express his special appreciation to all
lecturers and The Board of Management of Foreign Trade University for giving him
this invaluable opportunity to conduct this research, which allows him to enrich his
profession. A large and exuberant thank you would be to Mr. Nguyen Tien Hoang
(PhD.) - histhesis supervisor at Foreign Trade University HCM City, without whose
support and guidance, the thesis cannot be finished.
Regarless of many times of revision, the thesis might contain inevitable
mistakes due to limited time and insufficient knowledge. The thesis will be better
edited thanks to the feedback and recommendations from all lecturers and readers.
The author
Ho Phu Minh Quan


11
CHAPTER ONE: OVERVIEW OF THE CISG 1980 AND THE REMEDIES
OF THE BUYER
1.1. Overview of The United Nations Convention on Contracts for the
International Sales of Goods (CISG 1980)
1.1.1. Adoption and ratification

The United Nations Convention on Contracts for the International Sale of
Goods (CISG), also referred to as the Vienna Convention, is regarded as one of "the
most

successful

international

conventions

promulgated

by

the

United

Nations"(Marcia J.Staff, 2010, page 3) in harmonizing and unifying the contract law
worldwide.The utmost contribution of the Convention is the creation of equitable
and modern substantive rules regulating issues arising from international sales
contract, which minimizes considerably the number of trade-related disputes and
obstacles. However, the Convention is not the first attempt in unifying the
international contract law. Before CISG, there are two different substantive
international sales treaties from which the CISG is originated: (1) the Convention
relating to a Uniform Law on the Formation of Contracts for the International Sale
of Goods (ULF); and (2) the Convention relating to a Uniform Law for the
International Sale of Goods (ULIS). Both early treaties were signed at Hague in
1964 and came into effect since 1972.
Despite relentless efforts from UNIDROIT to promote progressive

harmonization and unification of international trade law, the creation of the two
treaties abovenot only received limited worldwide acceptance and ratification, but
also confronted serious oppositions from many nations at the time. Interestingly, the
forerunners of CISG were considered to "have no chance to succeed from the
beginning" (Bruno Zeller, 2007, page 16).Many researchers and scholars attributed
this failure to two main reasons: (i) These conventions were ratified by only 28
contracting states of Hague Conventions, among which there is no Socialism States
and one developing nation alone, and thus the two treaties were critisized for being
"weighted in favor of developed countries" (Laszlo Reczei, 1981, page 513); (ii)
The two conventions did not gain trust from developing countries and social-bloc
nations because of a number of serious deficiencies in the material stipulations


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regarding the cross-border shipments, the insensitivity to commercial practice, the
imbalance between the rights of buyers and sellers, and the scope of application. It
was said that these antecedents of CISG "aimed at regional unification rather than
global unification" (Sieg Eiselen, 1999, page335).
The United Nations, perturbed by the lack of ratifications of the two
forerunners shortly after their creation, carried out a survey to many nations, with
the aim of improving the treaties to achieve the unification of the law of
international sales. After studying the survey results, UNCITRAL initiated a project
to draft a new Convention that could reconcile the implicit problems of the two
antecedents. The official draft version, called the New York draft, wasestablished in
1978 and presented to all United Nations members for comment. In 1980, the CISG
was formed on the basis of the New York draft and the comments, and eventually
signed in Vienna (Austria). The renovating Convention gained huge support and
assistance from many countries and achieved significant results around the world.
From the initial 11 contracting states acceding to the CISG as a multilateral treaty
on January 1st 1988, the number of nations had continously been enhanced. As of

March 2017, there have been 85 nations ratifying the CISG, among them both
Socialism nations and developing countries. The Convention is regarded to
accountfor over 60% of international trade, and covering "every geographic region,
every stage of economic development and every major legal, social and economic
system" (John Felemegas, 2000).
1.1.2. Content and structure of CISG 1980
The Text of the Convention encompasses 101 Articles, compiled into four
Parts, which sufficiently covers all issues and aspects relating to contracts for
international sale of goods. Its renovating structure is epitomized as follows:
Part 1 - Sphere of application and general provisions,ranging from Article
1 to 13, deals directly with the applicability of the Convention and contains general
principles of the interpretation and formality requirements. The first part presents a
strict adherence to the promotion of uniformity and good faith in global trade.
Part 2 - Formation of the contract,comprising from Article 14 to 24,
governs legal issues regarding the contract formation. This part is divided into three


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sub-parts: (1) the first four articles mention about the offer; (2) the next five articles
deal with the acceptance; and (3) the final two articles address the time when a
contract is concluded and when a communication reaches the addressee.
Part 3 - Sale of goodsaccounting for the largest number of articles, from
Article 25 to 88, is divided into five chapters, and covers a wide range of core CISG
content, especially the obligations of buyers and sellers, together with their
respective remedies.This particular content appears to be more eminent in
comparison with other international sales laws, since it clearly reflect the intent of
creating juridical fairness for both parties engaging in a contractual relationship.
Part 4 - Final provisions, covering the last 13 Articles,encloses what can be
characterized as public international law of the CISG, including procedural rules for
entrance, reservations, effectiveness of the Convention and so on.

1.2. Dispute in International Sales Contracts due to Seller's breaching acts
1.2.1. Obligations of the Seller in International Sales Contracts
1.2.1.1 Place and time of delivery
Place of delivery
Place of delivery is defined as the location where the seller is required to carry
the goods to. Under CISG 1980, it is used not only to serve the contractual purpose,
but also to decide the risk passage and goods confirmity. In practice, the place of
delivery is primarily identified to be the mutually agreed location in the contract.
However, if such information is not provided, Article 31 of CISG equips the
contracting parties with three additional circumstances.
Firstly, if there is no contractual provision about the exact delivery location,
the Convention regulates that the seller shall fulfill his delivery obligation when the
goods are handed "over to the first carrier for transmission to the buyer" (John
O.Honnold,2009, page 208). This first situation can only be applied with
international sales contract involving the carriage of goods. In reality, the delivery
location is primarily identified by the terms of trade contained in the contract. For
example, in a contract with FOB terms, the seller shall be deemed to have finished
its delivery duty after placing the goods free on board the vessels recognized as the
buyer's first carrier, such as a qualified freight carrier or other handling agents.


14
Secondly, when no regulations on the carriage of goods is mentioned, which
the buyer has to take the goods possession himself, the seller is obliged to place the
goods at the buyer's disposal under the two following conditions: (1) 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 specified place; and that (2)
the place is fully aware of by both parties at the time of contract conclusion
(Alastair Mullis, 2007, page 116). Placing the goods at the buyer's disposal means
that all necessary tasks for the buyer to get goods possession have been done by the

seller, and that the buyer needs not do anything other than take over the goods at the
delivery place.
Lastly, if no such location was taken into account by both parties, the seller
must place the goods at the buyer's disposal at the place of business of the seller.
The buyer is only required to come and pick the goods. In case of the seller having
more than one place of business, it is recommended to refer to Article 10.
Date of delivery
Date of delivery is also an indispensable part of the contractual obligation as it
acts as a basis upon which the buyer's payment duty arises. This element is
detailedly stipulated under Article 33, in three different situations.
Firstly, if the contract expressly stated a date that is fixed or determinable, the
seller is required to deliver the goods on that mutually agreed date. It is usually the
case that both contracting parties will set together a delivery date and clearly print it
in the contract to hedge themselves against unneccessary legal issues.
Secondly, if the contract stipulates a period of time within which the seller can
deliver, the seller is at liberty to pick the most suitable date within this period to
fulfill his delivery duty, which makes it more flexible for him to prepare the goods
and arrange for transportation. However, the buyer are granted the right to specify a
certain date for delivery under certain circumstances, such as in FOB contract,
where the buyer is obliged to charter a vessel and arrange for transportation. Under
such situation, he has to send, in due time, the shipping instructions to the seller.
The last subsection of Article 33 acts as a residuary rule. When delivery date
can not be interpreted clearly under the contract, the seller must deliver the goods


15
within a reasonable period of time after the conclusion of the contract. The
reasonableness of time depends on numerous factors, like the interests of both
parties, the nature of the goods, the average production, the delivery periods, and
also acceptable practices relating to similar cases. Nevertheless, the utmost feature

is the cooperation with good faith from both the seller and the buyer.
Documents
In International Sales Contracts, the seller is often required to supply specific
documents to the buyer, which helps to legitimate the traded goods. However, the
Convention does not regard this obligation as compulsory, unless otherwise stated
in the contract. If the seller is bound to transfer goods-related documents to the
buyer, according to Article 34, he is obliged to hand them over "at the time and
place and in the form required by the contract". These conditions can be stated in
the contract or Incoterms, and are not compelled to align with the goods delivery.
Firstly, time requirement is often expressly indicated in the contract. The
necessary documents should be tendered in sufficient time to allow the buyer to
receive the goods on the delivery day. If regulations about the time is not stated, the
documents must be sent as soon as possible after the goods have arrived.
Secondly, relating to the place, the documents should be sent to the place
regulated in the contract. Unless there is such a place, places for other purposes may
be chosen. For example, the parties can choose the place where payment is to be
made to be the destination of the documents, such as the premises of the bank in
case of documentary credit payment method.
Lastly, about the form, which is less important, it can be by the carrier, by post
or directly by the seller delivering to buyer's office.
In case of earlydelivery, Article 34 grants the seller the right to cure any lack
of conformity in the documents found by the buyer, up to the due date, provided
that the seller does not cause unreasonable inconvenience or expense to the buyer.
For example, the seller may provide additional copies of certain documents, or
replace documents in the wrong language with the correct ones.
1.2.1.2. Conformity of the goods
Criteria for goods conformity