The United Nations Convention on Contracts for the International Sale of Goods signed in 1980 has been proven to provide significant advantages and benefits to international business relationships. As a result, it has gained worldwide recognition and acceptance, and now the CISG governs more than seventy percent of global sales transactions (Blackwell, n.d.). However, since the CISG applies only if both parties are located in contracting states, some businesses need to decide whether they want to engage in commerce in countries that have not accepted the CISG platform.
To begin with, there are specific implications for companies that choose to operate in such countries. First, they will not be protected by this platform in case of any severe disputes and disagreements (Blackwell, n.d.). Therefore, businesses will have to find a compromise and solve their issues by themselves, which may become an extended and complicated process. Further, the CISG also has a higher threshold for contract withdrawal, which is additional protection the business gives up (Blackwell, n.d.). Finally, a company operating in countries that have not accepted the CISG platform needs to thoroughly learn its laws and be aware of any possible complications.
Nevertheless, if a country has not agreed to the CISG, it does not mean that businesses should not consider operating in it. It is recommended for companies to explore the risks of not being protected by the CISG and analyze whether these risks are less critical than those benefits they can get if they start doing business in such countries (Blackwell, n.d.). In other words, if an organization is confident that the resulting profit will be greater than any possible losses and problems, it should engage in commerce in a country that has not accepted the CISG platform. In case the country’s laws are not clear and the risks are too high, the business should avoid operating in it.
Reference
Blackwell, M. (n.d.). UNCISG-United Nations Convention on Contracts for the International Sale of Goods. BTLG. Web.