The United Nations International Sale Of Goods Convention On Contracts For Damage Compensation System Study

The United Nations Convention on Contracts of International Sales of Goods (Hereinafter referred to as CISG or Convention) could be considered as the law which has the most influence power in the international uniform contract law area. In the remedy system under CISG, compensation for damages is the most important liability for breach of contract. However the clauses of CISG are quite abstract, some of which is the result of compromise of many countries, especially of the merger of Civil Law system and Common Law system. So people remain doubt concerned scientific and reasonable nature articles of CISG. The specific application of the abstract articles of CISG in practice has become the research subject of scholars from various countries. For the aforesaid purpose, CISG Advisory Council and Secretariat of the United Nations Commission on International Trade Law (Hereinafter referred to as UNCITRAL) both make explanations on CISG to set a possible standard of implementation in every treaty power by offering more details about the rough provisions.However we can still find that various countries inevitably have their own special laws and practice according to the Case Law on UNCITRAL Texts. Therefore different courts or arbitration committees in different locations have different opinions on compensation for damages. This paper tries to discuss the status and trends about relevant legal issues on the basis of analysis of theory and practice of different countries. Specifically, this paper is divided into four parts as follows:Chapter 1 is relevant to the discussion of the nature of compensation for damages. The nature of compensation for damages under CISG should be compensatory, which allows compensation for damages to be used with other remedies at the same time. That's the reconcilement of the conflict between two law systems.In Chapter 2 the author analyzes the principle of compensation for damages under CISG. Article 74 stipulates the principle of full compensation. But to prevent the breach party from shouldering too heavy loads by being claimed wild compensations and to balance two parties'rights and obligations, CISG limits the compensations for damages by requiring certainty and predictability of damages. On the basis of the principle of party autonomy, two parties have freedom to set terms of the agreed compensation with attention to keep distinguished from penalty.Chapter 3 is about general rule of compensation for damages. The constitution elements of liability are the main problem of general rule of compensation for damages. CISG adopts the principle of strict liability as the common law system dose. Within the frame of CISG, responsibility of damages includes actual damages and lost profits the injured party suffered from the breach of contract. In usual claims of international trade, CISG supports the claim for opportunity loss, non-material interests'loss and the exchange rate loss. The compensation for legal fees should be subject to the domestic law.Chapter 4 focuses on the specific application of compensation for damages. CISG provides abstract and specific calculation methods after termination of contracts. During the application, we should pay due attention to the recognition criteria of declaration of avoidance of contract, reasonable replacement trade and current price. There is another important limitation on compensation for damages. That is obligation to mitigate losses. To determining the reasonableness of the measures are influenced by time and manner of mitigation.