The German Civil Code (BGB) has been getting increasingly complex for years, in part due to several EU Directives and in part due to domestic legislative changes. This development constantly creates new challenges for companies and might lead to an increased application of the “United Nations Convention on Contracts for the International Sale of Goods” (CISG).
The CISG is an international law for trading of goods, which contains its own legal system of rights and obligations for buyers and sellers. It is recognized in 97 Contracting States, includ-ing most European nations and many others like the USA, China or Japan. In theory, the CISG would apply to most cross-border commercial contracts for the sale of goods, as long as the contract is subject to the law of one of the Contracting States. In fact, many contracts exclude the application of the CISG, because companies and their legal advisors favour their familiar domestic civil codes.

Regarding the German jurisdiction, it might be worth to reconsider. The CISG is easy to un-derstand, less complex than the German Civil Code and allows greater freedom of contract.
In the past years more and more provisions have been added to the German Civil Code, e.g. provisions on the sale of consumer goods or provisions on recourse. “Recourse” means a sellers claim against his supplier. It differs partially from general warranty claims that the seller might be entitled to and only applies to contracts on certain goods, such as consumer goods or newly manufactured things.

As of January 1st 2022 the Directive (EU) 2019/770 (“Digital Content Directive”) and the Di-rective (EU) 2019/771 (“European Sales of Goods Directive”) have been implemented into domestic law. Since then, the German Civil Code also contains special provisions on the sale of digital products and the sale of goods with digital elements, each with their own pro-visions on warranty and recourse. The changes of 2022 have also abolished the fixed limita-tion period for recourse. And the changes have extended the period of shifted burden of proof, regarding defects of consumer goods, up to one year. Many of these new provisions are mandatory rules, that can not be modified by contract.

In contrast, the CISG does not differentiate between different types of products and only con-tains one set of provisions. It only stipulates general warranty rights, like claims for damages, reduction of price or declaring the contract avoided. These rights are time-barred after a peri-od of two years. Furthermore, most provisions of the CISG are default rules and subject to modification by the contracting parties. Overall the CISG is subject to less legislative change compared to the German Civil Code.

In conclusion, the CISG might be a suitable alternative for cross-border sales contracts. It enables contracting parties to agree on terms and conditions that would be invalid under domestic German law. Finally, because the CISG is recognized in many countries, it allows for the use of the same contract template for business dealings in different countries.

unyer Working Group Commercial & Trade Law
Dr Christoph von Burgsdorff
Dr Robert Burkert