Following the recent approval by the National Diet of Japan, the CISG will come into force in Japan on 1 August 2009. The CISG seeks to create a uniform international law of sale of goods by providing a set of substantive rules including remedies such as damages and avoidance of the contract.
Although parties to contracts for the international sale of goods will often prefer their own national law to govern their contracts, the CISG may be useful in providing a neutral or compromise regime where agreement on a national substantive law of sale of goods is not possible. The CISG will now also automatically apply in certain circumstances to contracts involving Japanese elements (for example, where a contract between a Japanese party and a party from another contracting state to the CISG does not contain a governing law clause, or where Japanese law applies as the governing law of the contract), unless the parties have specifically excluded its application.
The CISG was relatively unknown during the first two decades of its existence and was regularly excluded from contracts by parties or their lawyers. As its profile grows, it is now featuring in increasing numbers of contracts and, consequently, contractual disputes. It does not contain dispute resolution provisions, which will be as provided for in the contract and will survive the avoidance of the contract under the CISG.