United Arab Emirates: An Overview Of The UN Convention On Contracts Part II (Provision)

Last Updated: 3 May 2018
Article by STA Law Firm
Most Read Contributor in United Arab Emirates, July 2019

With the original signatures of representatives from 62 countries,i CISG Convention entered into force in 1998—where, despite its number of signatories, it was only ratified by ten nations. Its original intent was to serve as a type of global statutory code for the sale and purchasing of goods in the international context. The Convention was attempting, initially, to eradicate and replace the laws of sale that are domestic within each government with regards to general international transactions.

The Convention amounted to include 101 Articles in the text. All major areas and issues of trade have been, supposedly, covered in order to avoid misinterpretations of the text—including the issue of having a party possibly misinterpreting the text. The formation and the performance following sales contracts have also been covered by the Convention. The text include many parts and sub-parts that, overall, are devoted to entirely different areas, including (but not limited to) the requirements for an effective acceptance of an offer, or what constitutes a fundamental breach, or the remedies that follow a breach of a contract.

Primarily, the goal was to unify international sales law.ii This was to overall enhance and improve security and certainty in international transactions while facilitating the growth and spread of international trade, adjusting for the different bargaining powers that exist amongst commercial actors.

Is the Convention successful in attaining its goals? The answer to this question is uncertain. Its asserted uniqueness has often been referred to as an indication of its current or potential success.iii The Commentary to the Convention is, however, too positive to measure exactly the effectiveness of its provisions. There are many signs and past cases of the Convention failing to properly govern over states in trade, as opposed to other international trade agreements, such as the World Trade Organization.       


In order to assess the effectiveness of the dispute prevention and settlement provisions of the CISG Convention, it is important to compare them to that of other international agreements between states. While the CISG Convention is sufficient enough to prevent and resolve disputes, perhaps it is not as successful as other agreements may be.

Prevention and Settlement Mechanisms within the CISG Convention

It is perhaps due to the generality of the existing provisions that the CISG Convention often succeeds in preventing disputes occurring between the parties. The Articles are formulated in a way to accommodate the needs of both the "seller" state and the "buyer" state entering a transaction. Before any dispute arises, states have the ability to observe the other state's behavior and act in this regard. For example, as Article 72(1) states:

'If prior to the date for performance of the contract it is clear that one of the parties will commit a fundamental breach of contract, the other party may declare the contract avoided.'

In order to prevent conflict between states, parties to a contract have the option to revoke their obligations in the event of another state's behavior indicating an upcoming breach of contract. This flexibility permits states to avoid conflict in this regard.

Still, it is understood that disputes may still arise, especially in the case of interpreting the obligations of the parties to the Convention. For example, in the Explanatory note of the CISG Convention, Part One includes a section regarding the "interpretation of the Convention":

'13. [...] Disputes will arise as to [the Convention's] meaning and application. When this occurs, all parties, including domestic courts and arbitral tribunals, are admonished to observe its international character and to promote uniformity in its application and the observance of good faith in international trade. In particular, when a question concerning a matter governed by this Convention is not expressly settled in it, the question is to be settled in conformity with the general principles on which the Convention is based. Only in the absence of such principles should the matter be settled in conformity with the law applicable by virtue of the rules of private international law.iv

The text of this section specifically details the necessary behavior of states in the case of conflict. Considerations of the law are to be applied only if there is no consensus between the parties on the interpretation of the Convention. However, it is important to note that this also applies to courts who are employed to resolve a dispute. The Convention sets forth international uniform substantive rules to be adopted by the signatory states and, in the event of a dispute, the Court must first establish whether those rules apply to the dispute before utilizing the rules of international law.v

Prevention and Settlement Mechanisms Outside of the CISG Convention

How do the aforementioned mechanisms of dispute prevention and resolution compare to other agreements of free international trade? Of course, the most famous organization aimed at easing the process of business is the World Trade Organization (the WTO), which is the successor to the General Agreement on Tariffs and Trade (the GATT). With a total of 162-member states, the probability of disputes arising within the WTO is excellent. Therefore, to avoid the interference with problems, the Organization arranged for there to exist a separate body solely aimed at resolving potential disputes. The Dispute Settle Body (the DSB)—which is provided for in the Understanding on Rule and Procedures Governing the Settlement of Disputes (the Understanding)—is set and established with the intention to administer the rules and procedures of the Understanding in different scenarios.

While the original aim of DSB to settle conflicts, there still exists provisions that are allowed to be enabled for the purpose of preventing the disputes before they even occur. The WTO, through the DSB, regularly affirms that each party is undertaking their obligations as per the Convention and the specific transaction they have entered:

'One of the main characteristics of the previous GATT and now of the WTO is the constant follow-up of the implementation of obligations and the monitoring of compliance with them. The underlying belief is that unless there is a monitoring of compliance with international commitments, those commitments will be worthless.vi

As per the above, it is understood that if the interactions between two or more parties are not supervised, the dispute will erupt due to lack of liability. There over, to prevent this, regular check-ups are to be implemented.

In cases where a dispute is brewing or has just begun, the DSB can still manage to calm it down before the same gets worse. In this stage, consultation is recommended:

'[...]. The DSU provides rules and procedures for consultations and the settlement of disputes between Members concerning their rights and obligations under WTO agreements.vii

By putting the concerned parties of a dispute in consultation, the DSB facilitates for a healthy debate to happen and the needs of both parties will be communicated and negotiated civilly. This procedure of a dispute settlement catches the seed of the problem before it grows. If the dispute is already past this stage, then there are two stages left as recommended by the DSB: "(ii) adjudication by panels and, if either party appeals a panel ruling, by the Appellate Body; and (iii) adoption of panel/appellate report(s) and implementation of the ruing which also includes the possibility of countermeasures in the event of failure by the losing party to implement the ruling."viii

Unlike those party to the CISG Convention, parties of the WTO are ensured by the WTO's presence in any transaction. The idea of constant supervision relieves parties who are unsure or insecure about relations with a specific country. Because the WTO has the ability to employ the DSB body to regulate the occurrence of disputes, it is even more so successful than the CISG Convention. The Convention, on the other hand, relies first and mostly on good faith being exercised by the Member States. But without the constant supervision that the WTO offers, parties are more likely to fall into disputes. With drastic cases, the Convention only allows for Courts to interfere. The next article on this topic will explore all the practical aspects and all the cases in relation to CISG Convention.


i John O Honnold, Uniform Law for International Sales under the 1980 United Nationals Conventions 54 (2d ed. 1991).

ii C.M. Bianca & M.J. Bonell, Commentary on the International Sales Law: The 1980 Vienna Sales Convention

iii Michael P. van Alstine, Consensus, Dissensus, and Contractual Obligation Through the Prism of Uniform International Sales Law, 37 VA. J. Int'l L. 1, 3, 6-9 (1996)

iv  CISG Convention, Section II, Part one, C.

v  UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, 2012 Edition, Part One, Ch I, p. 4

vi  MODULE VIII: Dispute Prevention and Settlement, WTO – B.

vii  Ibid, C.

viii  Ibid, D.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions