Master Thesis

to be awarded the degree

Master of Laws in South East European Law and European Integration (LL.M.)

at the Faculty of Law at the

University of Graz

The United Nations Convention on Contracts

for the International Sale of Goods in the

Courts and Arbitral Tribunals of the Successor

States of the SFRY

First Supervisor: Tratnik Matjaz, Univ.-Prof. Dr.

Second Supervisor: Lurger Brigitta, Univ.-Prof. Mag. Dr. iur. LLM (Harvard)

by

Flutra Ademi

Switzerland, August 2014

II

Statement of Authorship

I hereby certify that this Master Thesis has been composed by myself, and describes my own

work, unless otherwise acknowledged in the text. All references and verbatim extracts have

been quoted, and all sources of information have been specifically acknowledged. This

Master Thesis has not been accepted in any previous application for a degree.

Flutra Ademi

Switzerland, 20 August 2014

III

Table of contents

LIST OF ABBREVIATIONS ............................................................................................................................. V

TABLE OF CASES ........................................................................................................................................... VII

TABLE OF LEGISLATION ............................................................................................................................... X

I. INTRODUCTION ........................................................................................................................................... 1

II. THEORETICAL PART ................................................................................................................................. 4

1. THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

(CISG) ............................................................................................................................................................................... 4

1.1 Historical development.......................................................................................................................................... 5

1.2 Structure of the CISG .............................................................................................................................................. 9

1.3 Role and Meaning of the CISG ......................................................................................................................... 11

1.4 Applicability of the CISG ..................................................................................................................................... 13

2. THE CISGS IMPACT ON EX-JUGOSLAV COUNTRIES .......................................................................................... 17

2.1 Former Socialist Republic of Yugoslavia and the impact of the CISG on the successor states

............................................................................................................................................................................................... 17

2.1.1 Slovenia .................................................................................................................................................................. 20

2.1.2 Bosnia and Herzegovina ................................................................................................................................ 21

2.1.3 Croatia .................................................................................................................................................................... 22

2.1.4 Serbia and Montenegro .................................................................................................................................. 23

2.1.5 Macedonia ............................................................................................................................................................. 24

III. PRACTICAL PART ................................................................................................................................... 26

1. ELABORATION OF THE CASES PRESENTED IN THE UNCITRAL DIGEST OF CASE LAW ON THE UNITED

NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS ....................................... 26

2. APPLICATION OF THE CISG BY THE FORMER YUGOSLAV COURTS .................................................................... 26

2.1.1 Sphere of application ....................................................................................................................................... 26

2.1.1.1 Contract for sale of goods and place of business ............................................................................. 33

2.1.1.2 Exclusion of the CISG .................................................................................................................................... 34

2.1.1.3 Party autonomy .............................................................................................................................................. 37

2.1.2 General provisions ............................................................................................................................................. 41

2.1.2.1 Interpretation of the UN Convention and gap-filling ................................................................... 41

2.1.2.1.1 Interpretation of the UN Convention ................................................................................................ 41

2.1.2.1.2 Gap-filling ...................................................................................................................................................... 43

IV

2.1.2.2 Interpretation of statements and other conducts of the parties ............................................. 44

2.1.2.3 International trade usages ........................................................................................................................ 46

2.2 Formation of the contract ................................................................................................................................. 46

2.3 Sale of goods ............................................................................................................................................................ 49

2.3.1 Fundamental breach of a contract and declaration of avoidance ............................................. 49

2.3.2 Payment of the price and delivery of the goods .................................................................................. 51

2.3.3 Conformity of the goods and third party claims ................................................................................. 54

2.3.4 Avoidance .............................................................................................................................................................. 62

2.3.5 Damages ................................................................................................................................................................ 66

2.3.6 Interest ................................................................................................................................................................... 72

2.3.7 Force majeure ..................................................................................................................................................... 78

2.3.8 Preservation of the goods .............................................................................................................................. 79

IV. CONCLUSION ............................................................................................................................................. 82

BIBLIOGRAPHY .............................................................................................................................................. 88

V

List of abbreviations

Art(s) Article(s)

cf confer

cp compare

CISG United Nations Convention on Contracts for the International Sale of

Goods of 11 April 1980

CMR Convention on Contract for the International Carriage of Goods by

Road

DEM Deutsche Mark (former official currency of Germany)

doc document

d.o.o. drutvo s ogranienom odgovornou (Serbian for limited liability

company, LLC)

CLOUT Case Law on UNCITRAL Texts

ECB European Central Bank

ed(s) editor(s)

edn(s) edition(s)

eg for example

et al and others

et seq and following

etc etcetera (and so forth)

Esq esquire (title used by attorneys in the United States)

EU European Union

FTCA Foreign Trade Court of Arbitration at the Serbian Chamber of

Commerce

f(f) and the following page(s) or section(s)

GAOR General Assembly Official Records

GmBH Gesellschaft mit beschrnkter Haftung (German for limited liability

company)

i.a. inter alia, among other things

ibid ibidem, the same place

i.c. in casu

i.e. id est (that is, meaning that)

Jr. junior

VI

LIBOR London Interbank Offered Rate

LCT Serbian Law on Contracts and Torts

lit litera

n/nn footnote/footnotes

No number

OHADA Organisation pour l'Harmonisation en Afrique du Droit des Affaires

(Organisation for the Harmonization of Commer