Minister of State Zoltán Nemessányi delivered the following opening remark at the Conference on International Sales Contract in the 21st Century in Győr on 19 February 2015. The script of the remarks as prepared for delivery.
“I have the honour to open the conference celebrating the 35th anniversary of the Convention on Contracts for the International Sale of Goods (CISG).
There is indeed a very good reason to celebrate the CISG. 83 states are parties to the Convention from all over the world, countries of various legal traditions and very different levels of economic development. The number of States parties is still growing: 9 countries have joined the CISG since 2010. This latter fact shows that the CISG could be an attractive solution to businesses in the international commerce in the 21st century as well.
The CISG created uniform, directly applicable rules on contracts of international sale of goods introducing legal certainty in international trade law which was apparently very much appreciated. One may compare the CISG with the success of the Hague Conventions which on several occasions tried to provide purely conflicts of law rules to international sale of goods. None of these conventions could reach more than 8 states parties and the latest Hague effort in 1986 to determine the law applicable to contracts for the international sale of goods attracted only 2 ratifications from all over the world.
Another factor which shows the huge success of the CISG is that it is accepted by so many countries worldwide, with relatively small number of reservations and declarations. In this regard I may inform you that in the Ministry of Justice we are preparing the withdrawal of the Hungarian declaration requiring written form of international sales contracts. In fact, the Hungarian legal provision on mandatory written form to contracts of “foreign trade” was repealed by 1 May 2004; already before that date Hungarian court practice tried to loosen this formal requirement taking into account the flexibility of trade law. In the new Civil Code mandatory written form is only exceptionally required for certain types of contracts, but not for international sales contracts. In this context we find it reasonable to withdraw this declaration. We expect that the withdrawal would add to legal certainty to parties having their place of business in Hungary as well as to their contractual partners and the legal conditions of a contract of international sale of goods would be similar to those of internal contracts.
We should not forget that we, Hungarians have a special reason to celebrate the CISG. The famous Hungarian professor, Gyula Eörsi played a leading role in the adoption of the Convention, which is the core of international trade law. He headed the diplomatic conference adopting the CISG, and his studies, comments on the Articles are still cited by lawyers all over the world.
When we are examining the effects of the CISG on legislation and legal practice of today I shall mention our new Civil Code which came into force last year. From the sources of international law, our legislation on contracts was mostly inspired by the CISG. At this stage I cannot cite all principles and articles which were taken over from CISG, becoming part of Hungarian law. Just as examples I would refer to rules on the conformity of the goods with the contract (Article 35 – 6:123.§) or on payment for excess quantity taken by the buyer (Article 52 - 6:125.§)). However, if I should indicate which provisions of the CISG affected our new Civil Code most, which articles changed our law on contracts most significantly, I would mention the foreseeability clauses. In this context I may say that Articles 74 and 79 have become part of Hungarian law, in the context of liability for damages caused by non-performance. According to Section 6:142. of our new Civil Code - in line with paragraph 1 of Article 79 of CISG – the party breaching the contract shall be relieved of liability only if he proves that non-compliance was due to an impediment beyond his control, which could not have been foreseen at the time of the conclusion of the contract and he could not have been expected to avoid this impediment or prevent the damage. With regard to the extent of damages, there is also a foreseeability clause in our law (para 2 of Section 6:143), namely the one we know from Article 74 of CISG. Therefore consequential damages shall be paid by the party in breach only to the extent that the obligee may prove that the damages as the potential consequence of non-performance were foreseeable at the time of the conclusion of the contract. I believe these examples show how the considerations leading the legislators of CISG on fair division of risks between contractual parties still influence the legislation today.
I would also like to take this opportunity to inform you that the Ministry of Justice is taking over responsibilities from the Ministry of Foreign Affairs and Trade with regard to UNCITRAL. The Ministry of Justice will coordinate Hungarian participation in the work of UNCITRAL and will take part in working groups on arbitration, online dispute resolution and insolvency.
I very much look forward to this conference and thank the Széchenyi István University to provide a forum for discussing so interesting and complex questions - how the CISG operates in a completely different world than in 1980 and how it relates to works within the European Union. Thank you for your attention.”