One of the major events of 2012 concerning international trade in Brazil was the approval of the United Nations Convention on Contracts for the International Sale of Goods (“CISG”) by the Brazilian National Congress. From that moment on, the CISG only awaits the issuance of a presidential decree (expected for this year) to take effect and for its 101 articles -- dealing with issues varying from contract formation to seller's and buyer’s rights and duties and remedies -- to become applicable and govern the interpretation of several types of contracts related with the international sale and purchase of goods. In some instances, the CISG may already govern cross-boarder sale contracts entered into by Brazilian parties, whenever the applicable rule of private international law so determines. However, in the near future, several other Brazilian companies or subsidiaries engaged in sale transactions with counterparts located in major trading partners, such as China, the United States of America and other Latin American countries, will also need to draft their contracts taking into account the provisions of the CISG in order to safeguard their rights and make sure all sale duties are being complied with. The CISG sets forth that certain types of contracts fall outside of its scope, due to their purpose (goods purchased for personal use and the like), the nature of the transaction (sale by auction etc.) or the nature of the goods (shares, securities, electricity and others, though the international sale of gas is covered by said Convention). It is recommended for parties executing such agreements to seek legal advice for its adaptation to those new CISG provisions, when necessary.
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Congress approves the CISG: revisiting international sale contracts
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