Laws of the People's Republic of China

The Supreme People's Court

Circular of the Supreme People's Court on Transmitting Certain Issues of the MOFTEC in Connection with the Implementation of United Nations Convention on Contracts for the International Sale of Goods

Fa (Jing) Fa [1987] No. 34

December 10, 1987

All the high people's courts and the intermediate people's courts in the provinces, autonomous regions, and the municipalities directly under the Central Government, all the railway transportation intermediate courts and the maritime courts:

Whereas, United Nations Convention on Contracts for the International Sale of Goods will be effective on China as of January 1, 1988, we hereby transmit Certain Issues of the Ministry of Foreign Trade and Economic Cooperation in Connection with the Implementation of United Nations Convention on Contracts for the International Sale of Goods. Please organize relevant person to study in order to correctly implement the Convention in the work of foreign-related economic trial. Any question encountered in the implementation, please report to us in time. Appendix:Certain Issues of the Ministry of Foreign Trade and Economic Cooperation in Connection with the Implementation of United Nations Convention on Contracts for the International Sale of Goods

Wai Jing Mao Fa Zi [1987] No. 22

December 4, 1987

The departments (commissions, bureaus) of economic and trade, foreign trade bureaus (head offices) in all the provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and prefectures, all the head offices, the industry and trade companies:

Chinese government has officially approved United Nations Convention on Contracts for the International Sale of Goods (hereinafter referred to as the Convention) on December 11, 1986. Whereas, the number of the states that joined in the Convention is beyond 10 and the Convention will be effective on January 1, 1988, we hereby notify certain issues which should be paid attention to for the convenience of the foreign economic and trade companies to correctly implement the Convention as follows:

1.

So far the states which have already joined in the Convention, except China, are America, Italy, Zambia, Yugoslavia, Argentina, Hungary, Egypt, Syria, France, and Lesotho and so on. In 1986, our total amount of import and export trade with the aforementioned 10 countries has reached USD 9.23 billion, and the amount of trade contracts is tremendous. Since our government has already signed the Convention, it should assume the commitments on the implementation of the Convention. Therefore, according to the provision of Article (1) of the Convention, from January 1, 1988, the contracts for sale of goods reached between the Chinese companies and the companies in the aforementioned countries (except Hungary) will automatically apply to the provisions of the Convention and the disputes or litigations arisen should be also settled under the Convention, unless otherwise agreed. Therefore, regarding general contracts for sales of goods, the companies should consider the application of the Convention, however, the companies may also reach with the foreign companies the contract clauses which are not in accordance with the Convention or explicitly exclude the application of the Convention in the contract and make the choice of the local law of some country as the applicable law of the contract based on the nature of the transaction, the characteristics of the products, the nationality and other specific elements.

2.

The Convention only applies to the sale of goods. The Convention stipulates the range of the goods by using the means of excluding (see Article 2 and 3 of the Convention). All the goods that are not in the excluding range of Article 2 and 3 of the Convention belong to the application range of the Convention.

3.

The Convention does not stipulate all the laws which settle the disputes of the contract. Chinese trade companies should explicitly agree the issues, which the Convention does not regulate, in the contract or select the local law of some country to govern the contract based on the specific transaction circumstances.

4.

Although the agreement on trade between China and Hungary belongs to sales of goods, however, it does not apply to the Convention so far, but still apply to the "Common Conditions for the delivery of the goods" reached by China and Hungary in 1962.

5.

The Convention stipulates the procedures of the formation of the contract and the rights and obligations of the seller and buyer. Those provisions have many inconsistencies with current Chinese laws and the customary practices of the companies, which should be paid attention to by the companies.

Departments (committees, bureaus) of economic and trade of the provinces, the foreign trade head offices and the industry and trade companies should organize the leaders of foreign economic and trade to study the Convention in time. Any question existing in the study, please consult with relevant departments to solve or directly report to Department of Treaty and Law of the Ministry of Foreign Trade and Economic Cooperation.

In order to assist in the understanding of the Convention, one book, named Interpretation of United Nations Convention on Contracts for the International Sale of Goods, which will be published by Liaoning People's Publishing House can be used for reference.