UN Convention on the Assignment of Receivables Essay

UN Convention on the Assignment of Receivables - Essay Example It, most likely, is the uniform law convention with the greatest influence on the law of worldwide trans-border commerce, and in some countries lawyers and courts are today as familiar with the Convention as they are with their domestic law - it is the lingua franca of sales. Part of the success is or might be due to the simple requirements of application of the Convention, encoded in articles 1 to 6, which have become a model followed in other international conventions or draft conventions. They are simple in their basic structure, although not without some tricky details which require explanation. These application requirements will be the topic of this short introduction to the Convention.1 Article 1(1) (a) UN law for receivables requires only that the parties have their places of business in different contracting states that is states which have enacted the Convention. With 65 contracting states, now many sales contracts of U.K traders with foreign parties (for example in Australia, Asia, the United States or Europe) are governed by the Convention. Neither the nationality of the parties nor their qualification as merchants influences the application of the Convention, although consumer purchases are almost always excluded from the Convention. The parties' places of business in different states are, in other words, decisive, so that a U.K firm, having its relevant place of business in Australia, when concluding a contract with a firm in Wellington, might find its contract governed by the UN law for receivables. Also, the contract must be a "sale of goods", which normally does not pose problems, but there are borderline cases, with which I shall deal later, and an important extension to mixed contracts under article 3(2) of the UN law for receivables. Parties in Different States The predecessors of the UN law for receivables, the so-called Hague Sales Laws of 1964 - which were ratified by only nine states - used as the main requirement for application only that the parties were residing in different states, thus making it possible that parties from different states, which had not enacted the Uniform Sales Law, might have found their contract governed by this uniform law alien to both of them and to their countries. Therefore, this imperialistic claim of the old uniform sales laws was rejected in the preparation of the UN sales law, but not entirely.2 Article 1(1)(b) states that the UN law for receivables [page 782] is applicable, if the parties are situated in different states - which need not be contracting states, if the conflict of law rules of the forum lead to the application of the law of a contracting state. Thus, if there is a contract between a Japanese and an English trader subject - on account of a clause in the contract - to