“LIMITATION PERIOD IN THE INTERNATIONAL SALE OF

GOODS”

А Project submitted in pаrtiаl fulfilment of the course INTERNATIONAL

TRADE LAW, 6 SEMESTER during the Аcаdemic Yeаr 2021-2022
TH

SUBMITTED BY:
MАIRА HUSSАIN
Roll No. – 1935
B.А. LL.B.(Hons.)

SUBMITTED TO:
DR. P.P. RAO
FАCULTY OF INTERNАTIONАL TRADE LАW

CHАNАKYА NАTIONАL LАW UNIVERSITY, NАYАYА NАGАR,

MEETHАPUR, PАTNА-800001
 DECLАRАTION BY THE CАNDIDАTE

I hereby declаre thаt the work reported in the B.А. LL. B (Hons.) Project Report Entitled
“LIMITATION PERIOD IN THE INTERNATIONAL SALE OF GOODS” submitted аt
Chаnаkyа Nаtionаl Lаw University, Pаtnа is аn аuthentic record of my work cаrried out under
the supervision of DR P.P. RAO. I hаve not submitted this work elsewhere for аny other
degree or diplomа. I аm fully responsible for the contents of my
Project Report.

(Signаture of the Cаndidаte)

MАIRА HUSSАIN, Chаnаkyа Nаtionаl Lаw University
 АCKNOWLEDGEMENT

Firstly, I would like to thаnk my fаculty of Jurisprudence I DR. P.P. RAO for providing me аn
opportunity to mаke my project on such аn interesting topic which is аlso а contemporаry
issue аs for now.
Secondly, I would like to thаnk аll my colleаgues аnd friends for helping me out in аrrаnging
of the аccumulаted collected study mаteriаl.
Lаstly, speciаl thаnks to my pаrents for guiding me in giving the finаl touch to this project
аnd helping me out throughout this project.
TАBLE OF CONTENTS

Tаble of Contents

1.INTRODUCTION…………………………………………………………………………..5-6

2.PRINCIPLES, ADVANTAGES, DISADVANTAGES AND CHARACTERISTICS OF

INTERNATIONAL TRADE LAW…………………………………………………………….7-8

3.EXPORT .................................................................................................................................. 9-10

4.INTERNATIONALSALE OF GOODS…………………………………………………..11-13

5.CONVENTION ON LIMITATION PERIOD…………………………………………..14-15

6 ARTICLES ON CONVENTION OF LIMITATION PERIOD ....................................... 16-20

7.CONCLUSION………………………………………………………………………………..21

8.BIBLIOGRAPHY…………………………………………………………………………….22
 1. INTRODUCTION

DEFINITION:
International trade is the exchange of capital, goods, and services across international borders or
territories because there is a need or want of goods or services. In most countries, such trade
represents a significant share of gorss domestic product. While International trade has existed
throughout history, it`s economic, social, and political importance has been on gthe rise in recent
centuries. Carrying out trade at an international level is a complex process when compared to
domestic trade. When trade takes place between two or more nations factors like currency,
government policies, economy, judicial system, laws and markets influence trade. To smoothen
the function of international trade organisation like World Trade Organisation was formed to
facilitate the growth of international trade.

International trade law includes the appropriate rules and customs for handling trade between
countries. However, it is also used in legal writings as trade between private sectors, which is not
right. This branch of law is now an independent field of study as most governments have become
part of the world trade, as members of the World Trade Organization (WTO). Since the transaction
between private sectors of different countries is an important part of the WTO activities, this latter
branch of law is now a very important part of the academic works and is under study in many
universities across the world.

INTERNATIONAL TRADE THEORY International trade theories are simply different theories
to explain international trade. Trade is the concept of exchanging goods and services between two
people or entities. International trade is then the concept of this exchange between people or entities
in two different countries.

People or entities trade because they believe that they benefit from the exchange. They may need
or want the goods or services. While at the surface, this many sound very simple, there is a great
deal of theory, policy, and business strategy that constitutes international trade.

International Trade Law is an aggregate of legal rules of “international legislation” and new lex
mercatoria, regulating relations in international trade. “International legislation” – international
treaties and acts of international intergovernmental organizations regulating relations in
international trade. lex mercatoria1 - "the law for merchants on land". Alok Narayan defines "lex
mercatoria" as "any law relating to businesses" which was criticised by Professor Julius Stone. and
lex maritime - "the law for merchants on sea. Alok in his recent article criticised this definition to
be "too narrow" and "merely-creative". Professor Dodd and Professor Malcolm Shaw of Leeds
University supported this proposition.

The Lex Mercatoria is the grouping of legal rules that guide and underlie international trade, which
acts totally independently of the positive law of states, being considered normative. Currently, the
new Lex Mercatoria has been prepared. The former Lex Mercatoria was generated in light of the
characteristic demands of the time in question, including the values, culture, and future provisions
of the time, whereas, the new one is recognized as having the responsibility of common
international trade law.

Convention on the Limitation Period in the International Sale of Goods

The Convention 2 on the Limitation Period in the International Sale of Goods (the "Limitation
Convention") is a uniform law treaty prepared by the United Nations Commission on International
Trade Law (UNCITRAL). It deals with the prescription of actions relating to contracts for the
international sale of goods due to the passage of time.

The Limitation Convention3 was originally prepared as a chapter of a broader treaty on contracts
for international sale of goods. Adopted in 1974, it was amended in 1980 to be fully aligned,
especially with respect to scope of application, to the United Nations Convention on Contracts for
the International Sale of Goods (CISG), adopted in the same year.

The limitation period is four years, starting from the date when the claim accrues (Articles 8 and
9). The limitation period stops to run when judicial or arbitral proceedings are commenced
(Articles 13 and 14).

• 1
Trans-Lex, a research and codification platform for transnational commercial law / lex mercatoria

2
Case Law on UNCITRAL Texts (CLOUT)
3
The status of signatories to the Limitation Convention is listed
at http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1974Convention_status.html, and is updated
whenever the UNCITRAL Secretariat is informed of changes in status of the Limitation Convention.
2. PRINCIPLES, ADVANTAGES, DISADVANTAGES AND
CHARACTERISTICS OF INTERNATIONAL TRADE LAW

NATIONAL TREATMENT PRINCIPLE:

Imported and locally-produced goods should be treated equally — at least after the foreign goods
have entered the market. The same should apply to foreign and domestic services, and to foreign
and local trademarks, copyrights and patents. These principles apply to trade in goods, trade in
services as well as trade related aspects of intellectual property rights.

Most Favored Nation (MFN) Principle: The MFN principles ensures that every time a WTO
Member lowers a trade barrier or opens up a market, it has to do so for the like goods or services
from all WTO Members, without regard of the Members’ economic size or level of development.
The MFN principle requires to accord to all WTO Members any advantage given to any other
country. A WTO Member could give an advantage to other WTO4 Members, without having to
accord advantage to non- Members but only WTO Members benefit from the most favorable
treatment.

ADVANTAGES OF INTERNATIONAL TRADE:

Exports create jobs and boost economic growth, as well as give domestic companies more
experience in producing for foreign markets. Over time, companies gain a competitive advantage
in global trade. Research shows that exporters are more productive than companies that focus on
domestic trade.

Imports allow foreign competition to reduce prices and expand the selection, like tropical fruits,
for consumers.

DISADVANTAGES OF INTERNATIONAL TRADE:

The only way to boost exports is to make trade easier overall. Governments do this by reducing
tariffs and other blocks to imports. That reduces jobs in domestic industries that can't compete on

4
For an introduction to the Limitation Convention see, recently, Luca G. Castellani, An Assessment of the Convention
on the Limitation Period in the International Sale of Goods Through Case Law, Villanova Law Review, vol. 58, no. 4
(2013) 645-660,.
a global scale.4 That also leads to job outsourcing, which is when companies relocate call centers,
technology offices, and manufacturing to countries with a lower cost of living.

Countries with traditional economies could lose their local farming base as developed economies
subsidize their agribusiness. Both the United States and European Union do this, which undercuts
the prices of the local farmers.

CHARACTERISTICS OF INTERNATIONAL TRADE:

A product that is transferred or sold from a party in one country to a party in another country is an
export from the originating country, and an import to the country receiving that product. Imports
and exports are accounted for in a country's current account in the balance of payments.

Trading globally may give consumers and countries the opportunity to be exposed to new markets
and products. Almost every kind of product can be found in the international market, for example:
food, clothes, spare parts, oil, jewellery, wine, stocks, currencies, and water. Services are also
traded, such as in tourism, banking, consulting, and transportation.

Increasing international trade is crucial to the continuance of globalisation. Countries would be

limited to the goods and services produced within their own borders without international trade.
International trade benefits many countries in various aspects. In the case of Vizio’s flat-panel TVs,
the manufacturing leadership has been shifting from one country to another due to global economic
growth. At first, Japan could assemble the components of this TV and sell it out to the other
countries such as US. However, recession affected Japan and South Korea took the lead in
assembling the parts of this TV. Samsung played a critical role in the selling and manufacturing of
the flat TV. Taiwan countries also took the advantage of the recession that affected South Korea
and the investors assembled electronic components of Vizio’s flat-panel TVs. At first the US
suffered from this cycle because despite inventing this business idea, other countries implemented
it in the international market. Chinese5 eventually started manufacturing flat TVs at a lower cost
compared to the previous investors. It is important to note that US benefited from the cycle because
many investors could manufacture the TV at lower cost (Kandel, Kosenko, Morck & Yafeh, 2013).

5
• United Nations Convention on Contracts for the International Sale of Goods
3. EXPORT CONTROL
Export control6 is an area of legislation that regulates the export of goods, software and technology.
Some items could be potentially useful for purposes that are contrary the interest of the exporting
country. These items are considered to be controlled. The controlled items are prevented to some
degree from being sent to destinations where it is perceived they will be used in a harmful way.
Many governments in the world implement Export Controls.[2] Typically there will be legislation
that causes potential exporters of controlled items to make a request to a local government
department, and that department will assess the desired exports and either grant or deny licences
as appropriate.

HISTORY

Export control has been in place in the USA since the time of the American Revolution, although
the modern export control regimes can be traced back to the Trading with Enemies Act in the USA
in 1917, and the Import, Export and Customs Power (Defense) Act of UK in 1939 A significant
piece of legislation was the USA Export Control Act of 1940 which inter alia aimed to restrict
shipments of material to pre-war Japan.

PRINCIPLES

In most export control regimes, there is legislation that lists many items which are deemed
'controlled', and lists destinations to which sending items is restricted, by different degrees. The
lists of what is controlled sometimes arise from some Harmonised Regime.

Categorisation

Usually goods are subject to categorisation such as the USA's Export Control Classification
Number (ECCN) or India's SCOMET list or Japan's METI lists.

• 6
United Nations Convention on the Use of Electronic Communications in International Contracts
• International commercial law
Some items will be considered "Designed or modified for military use", some will be considered
Dual Use, and some will not be export controlled. Dual Use means that the device has both a
civilian and a military purpose.

In several jurisdictions, the classifications will consider Goods, Equipment, Materials, Software
and Technology. The last two are often considered intangible. Classifications may also be by
destination purpose, including cryptography, Laser, and torture equipment.

DESTINATION

Each exporting country will have different relationships with other countries as per International
Relations. Sometimes countries will have Trade agreements or arrangements with a group of other
countries, and this agreement means there are no licences required for certain goods. For example,
within the EU licences are not required for shipping civilian goods to other member states, however
for restricted, military goods licences are required.

For any exporting country, some destination countries may be Sanctioned, some may require
Licences, some may require record keeping (e.g. using an OGEL) and some have no restrictions.

The End User of the goods, or some 'broker' will typically be declared, and similar restrictions
apply as to countries.

Some individuals or entities may be listed, so even if the item can could normally be sent to the
country without a licence, additional restrictions apply for that individual7 or entity.

LICENCE

For any given item being exported, the categorisations will typically lead to different treatments
for a given destination, e.g. 'No Licence Required' (NLR) or 'Licence Required'.

• 7
United Nations Commission on International Trade Law
4. INTERNATIONAL SALE OF GOODS

An agreement between a seller and a buyer for the sale of goods. The contract should, at a
minimum, identify the seller and buyer, the quantity and type of product, delivery time, price and
conditions of payment. In addition, a well-constructed international sales contract will reference
the governing body of law, the forum where any disputes are to be resolved and the method of
dispute resolution, such as arbitration as opposed to litigation. For international sales of goods, the
body of law will often be the UN Convention on Contracts for the International Sale of Goods
(CISG), known as Vienna Convention. Contracts for the international sale of goods should also
indicate the terms of sale, preferably one of the 11 Incoterms. Sales contracts covering goods that
are not shipped under a negotiable marine bill of lading should also specify when (time and place)
and/or how ownership passes from seller to buyer. Often international transactions are conducted
without the benefit of an international sales contract. Instead the seller provides a quotation (often
in the form of proforma invoice) and the buyer responds with a purchase order. This may be
sufficient for repeat sales between well acquainted parties that have developed a basis of previous
dealings. However, it can lead to unanticipated problems in case of disputes. Major issues not
covered in the international sale contract and without precedence in previous dealings between the
parties will be “filled in” by the dispute resolving authority, often with surprising consequences.
See Incoterms; proforma invoice; purchase order; Vienna Convention. Model of International
Sales Contract.

The United Nations Convention on Contracts for the International Sale of Goods (CISG) has been
recognized as the most successful attempt to unify a broad area of commercial law at the
international level. The self-executing treaty aims to reduce obstacles to international trade,
particularly those associated with choice of law issues, by creating even-handed and modern
substantive rules governing the rights and obligations of parties to international sales contracts. At
the time this is written (February 2009), the CISG has attracted more than 70 Contracting States
that account for well over two thirds of international trade in goods, and that represent
extraordinary economic, geographic and cultural diversity.
The CISG 8 is a project of the United Nations Commission on International Trade Law
(UNCITRAL), which in the early 1970s undertook to create a successor to two substantive
international sales treaties – Convention relating to a Uniform Law on the Formation of Contracts
for the International Sale of Goods (ULF) and the Convention relating to a Uniform Law for the
International Sale of Goods (ULIS) – both of which were sponsored by the International Institute
for the Unification of Private Law (UNIDROIT). The goal of UNCITRAL was to create a
Convention that would attract increased participation in uniform international sales rules. The text
of the CISG was finalized and approved in the six official languages of the United Nations at the
United Nations Conference on Contracts for the International Sale of Goods, held in 1980, in
Vienna. The CISG entered into force in eleven initial Contracting9 States on 1 January 1988, and
since that time has steadily and continuously attracted a diverse group of adherents.

The CISG governs international sales contracts if (1) both parties are located in Contracting States,
or (2) private international law leads to the application of the law of a Contracting State (although,
as permitted by the CISG (article 95), several Contracting States have declared that they are not
bound by the latter ground). The autonomy of the parties to international sales contracts is a
fundamental theme of the Convention: the parties can, by agreement, derogate from virtually any
CISG rule, or can exclude the applicability of the CISG entirely in favor of other law. When the
Convention applies, it does not govern every issue that can arise from an international sales
contract: for example, issues concerning the validity of the contract or the effect of the contract on
the property in (ownership of) the goods sold are, as expressly provided in the CISG, beyond the
scope of the Convention, and are left to the law applicable by virtue of the rules of private
international law (article 4). Questions concerning matters governed by the Convention but that
are not expressly addressed therein are to be settled in conformity with the general principles of
the CISG or, in the absence of such principles, by reference to the law applicable under the rules
of private international law.

Among the many significant provisions of the CISG are those addressing the following matters:

8
Pryles, Jeff Waincymer, and Davis, Martin; International Trade Law (2004) 74.
9
Gilligan, Colin and Hird, Marin; International Marketing: Strategy and Management (1986) 99.
– Interpretation of the parties’ agreement;

– The role of practices established between the parties, and of international usages;

– The features, duration and revocability of offers;

– The manner, timing and effectiveness of acceptances of offers;

– The effect of attempts to add or change terms in an acceptance;

– Modifications to international sales contracts;

– The seller’s obligations with respect to the quality of the goods as well as the time and place for
delivery;

– The place and date for payment;

– The buyer’s obligations to take delivery, to examine delivered goods, and to give notice of any
claimed lack of conformity;

– The buyer’s remedies for breach of contract by the seller, including rights to demand delivery, to
require repair or replacement of non-conforming goods, to avoid the contract, to recover damages,
and to reduce the price for non-conforming goods;

– The seller’s remedies for breach of contract by the buyer, including rights to require the buyer
to take delivery and/or pay the price, to avoid the contract, and to recover damages;

– Passing of risk in the goods sold;

– Anticipatory breach of contract;

– Recovery of interest on sums in arrears;

– Exemption from liability for failure to perform, including force majeure;

– Obligations to preserve goods that are to be sent or returned to the other party.
The CISG10 also includes a provision eliminating written-form requirements for international sales
contracts within its scope – although the Convention authorizes Contracting States to reserve out
of this provision, and a number have done so. The CISG also includes “Final Provisions”
addressing such matters as ratification, acceptance, approval and accession; the interplay between
the CISG and other overlapping international agreements; declarations and reservations; entry-
into-force dates; and denunciation of the Convention.

Several other UNCITRAL11 projects are designed to work in tandem with the CISG. For example,
the United Nations Convention on the Limitation Period in the International Sale of Goods contains
rules governing the limitation period for claims arising under international sales contracts. The
Limitations Convention was originally promulgated in 1974, but was amended in 1980 by a
Protocol adopted by the Diplomatic Conference that approved the CISG in order to harmonize the
two Conventions. At the time this is written, the amended Limitations Convention is in force in 20
Contracting States. In 2005, the General Assembly adopted the United Nations Convention on the
Use of Electronic Communications in International Contracts to address various issues arising
when electronic communications methods are employed in connection with international contracts,
including international sales contracts. Issues addressed in the Electronic Communications
Convention include contract formation by automated communications, the time and place that
electronic communications are deemed dispatched and received, determination of the location of
parties employing electronic communications, and criteria for establishing functional equivalence
between electronic and hard copy communication and authentication. At the time this is written,
18 States have signed the Electronic Communications Convention, although it has not yet been
ratified or acceded to by any State and it has not yet entered into force.

• 10
Electronic Library on International Commercial Law and the CISG Limitation Convention on the Pace
Law School CISG Database

• 11
UNCITRAL Limitation Convention page on the UNCITRAL website.
5. CONVENTION ON THE LIMITATION PERIOD IN THE
INTERNATIONAL SALE OF GOODS

Purpose

The Limitation12 Convention establishes uniform rules governing the period of time within which
a party under a contract for the international sale of goods must commence legal proceedings
against another party to assert a claim arising from the contract or relating to its breach, termination
or validity. By doing so, it brings clarity and predictability to an aspect of great importance for the
adjudication of the claim.

Why is it relevant?

Most legal systems limit or prescribe a claim from being asserted after the lapse of a specified
period of time to prevent the institution of legal proceedings at such a late date that the evidence
relating to the claim is likely to be unreliable or lost and to protect against the uncertainty that
would result if a party were to remain exposed to unasserted claims for an extensive period of time.
However, numerous disparities exist among legal systems with respect to the conceptual basis for
doing so, resulting in significant variations in the length of the limitation period and in the rules
governing the claims after that period. Those differences may create difficulties in the enforcement
of claims arising from international sales transactions. In response to those difficulties, the
Limitation Convention was prepared and adopted in 1974. The Limitation Convention was further
amended by a Protocol adopted in 1980 in order to harmonize its text with that of the United
Convention on Contracts for the International Sale of Goods (CISG), in particular, with regard to
the scope of application and admissible declarations. Indeed, the Limitation Convention may be

• 12
United Nations Status of Treaties: Convention on the Limitation Period in the International Sale of
Goods
functionally seen as a part of the CISG and, as such, considered as an important step towards a
comprehensive standardization of international sales law.

Key provisions

The Limitation Convention applies to contracts for the sale of goods between parties whose places
of business are in different States if both of those States are Contracting States or when the rules
of private international law lead to the application to the contract of sale of goods of the law of a
Contracting State. It may also apply by virtue of the parties' choice.

The limitation period is set at four years (art. 8). Subject to certain conditions, that period may be
extended to a maximum of ten years (art. 23). Furthermore, the Limitation Convention also
regulates certain questions pertaining to the effect of commencing proceedings in a Contracting
State.

The Limitation Convention further provides rules on the cessation and extension of the limitation
period. The period ceases when the claimant commences judicial or arbitral proceedings or when
it asserts claims in an existing process. If the proceedings end without a binding decision on the
merits, it is deemed that the limitation period continued to run during the proceedings. However,
if the period has expired during the proceedings or has less than one year to run, the claimant is
granted an additional year to commence new proceedings (art. 17).

No claim shall be recognized or enforced in legal proceedings commenced after the expiration of
the limitation period (art. 25(1)). Such expiration is not to be taken into consideration unless
invoked by parties to the proceedings (art. 24); however, States may lodge a declaration allowing
for courts to take into account the expiration of the limitation period on their own initiative (art.
36). Otherwise, the only exception to the rule barring recognition and enforcement occurs when
the party raises its claim as a defence to or set-off against a claim asserted by the other party (art.
25(2).
6. DIFFERENT ARTICLES ON CONVENTION ON THE
INTERNATIONAL SALE OF GOODS

Article 313 (1) This Convention shall apply only (a) if, at the time of the conclusion of the contract,
the places of business of the parties to a contract of international sale of goods are in Contracting
States; or (b) if the rules of private international law make the law of a Contracting State applicable
to the contract of sale. (2) This Convention shall not apply when the parties have expressly
excluded its application.

Article 5 This Convention shall not apply to claims based upon: (a) death of, or personal injury to,
any person; (b) nuclear damage caused by the goods sold; (c) a lien, mortgage or other security
interest in property; (d) a judgement or award made in legal proceedings; (e) a document on which
direct enforcement or execution can be obtained in accordance with the law of the place where
such enforcement or execution is sought; (f) a bill of exchange, cheque or promissory note.

Article 6 (1) This Convention shall not apply to contracts in which the preponderant part of the
obligations of the seller consists in the supply of labour or other services. (2) Contracts for the
supply of goods to be manufactured or produced shall be considered to be sales, unless the party
who orders the goods undertakes to supply a substantial part of the materials necessary for such
manufacture or production.

Article 7 In the interpretation and application of the provisions of this Convention, regard shall
be had to its international character and to the need to promote uniformity.

THE DURATION AND COMMENCEMENT OF THE LIMITATION

PERIOD

Article 8 The limitation period shall be four years.

13
“Article 3 (1) This Convention shall apply only if, at the time of the conclusion of the contract, the places of business
of the parties to a contract of international sale of goods are in Contracting States. (2) Unless this Convention provides
otherwise, it shall apply irrespective of the law which would otherwise be applicable by virtue of the rules of private
international law. (3) This Convention shall not apply when the parties have expressly excluded its application.”
**Text of paragraphs (a) and (e) as amended in accordance with article II of the 1980 Protocol. Paragraphs (a) and (e)
of article 4 as originally adopted in the Limitation Convention, 1974, prior to its amendment under the 1980 Protocol,
read as follows: “(a) of goods bought for personal, family or household use; (e) of ships, vessels, or aircraft;”.
 Article 9 (1) Subject to the provisions of articles 10, 11 and 12 the limitation period shall
commence on the date [on] which the claim accrues.Convention on the Limitation Period in the
International Sale of Goods 7 (2) The commencement of the limitation period shall not be
postponed by: (a) a requirement that the party be given a notice as described in paragraph 2 of
article 1, or (b) a provision in an arbitration agreement that no right shall arise until an arbitration
award has been made.

Article 10 (1) A claim arising from a breach of contract shall accrue on the date on which such
breach occurs. (2) A claim arising from a defect or other lack of conformity shall accrue on the
date on which the goods are actually handed over to, or their tender is refused by, the buyer. (3) A
claim based on fraud committed before or at the time of the conclusion of the contract or during
its performance shall accrue on the date on which the fraud was or reasonably could have been
discovered.

Article 11 If the seller has given an express undertaking relating to the goods which is stated to
have effect for a certain period of time, whether expressed in terms of a specific period of time or
otherwise, the limitation period in respect of any claim, arising from the undertaking shall
commence on the date on which the buyer notifies the seller of the fact on which the claim is based,
but not later than on the date of the expiration of the period of the undertaking.

Article 12 (1) If, in circumstances provided for by the law applicable to the contract, one party is
entitled to declare the contract terminated before the time for performance is due, and exercises
this right, the limitation period in respect of a claim based on any such circumstances shall
commence on the date on which the declaration is made to the other party. If the contract is not
declared to be terminated before performance becomes due, the limitation period shall commence
on the date on which performance is due. (2) The limitation period in respect of a claim arising out
of a breach by one party of a contract for the delivery of or payment for goods by 8 Convention14
on the Limitation Period in the International Sale of Goods instalments shall, in relation to each
separate instalment, commence on the date on which the particular breach occurs. If, under the law
applicable to the contract, one party is entitled to declare the contract terminated by reason of such

14
The status of signatories to the Limitation Convention is listed
at http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1974Convention_status.html, and is updated
whenever the UNCITRAL Secretariat is informed of changes in status of the Limitation Convention.
breach, and exercises this right, the limitation period in respect of all relevant instalments shall
commence on the date on which the declaration is made to the other party.

CESSATION AND EXTENSION OF THE LIMITATION PERIOD

Article 1315

The limitation period shall cease to run when the creditor performs any act which, under the law
of the court where the proceedings are instituted, is recognized as commencing judicial
proceedings against the debtor or as asserting his claim in such proceedings already instituted
against the debtor, for the purpose of obtaining satisfaction or recognition of his claim.

Article 14 1. Where the parties have agreed to submit to arbitration, the limitation period shall
cease to run when either party commences arbitral proceedings in the manner provided for in the
arbitration agreement or by the law applicable to such proceedings. 2. In the absence of any such
provision, arbitral proceedings shall be deemed to commence on the date on which a request that
the claim in dispute be referred to arbitration is delivered at the habitual residence or place of
business of the other party or, if he has no such residence or place of business, then at his last
known residence or place of business. Article 15* In any legal proceedings other than those
mentioned in articles 13 and 14, including legal proceedings commenced upon the occurrence of:
(a) the death or incapacity of the debtor, (b) the bankruptcy or any state of insolvency affecting the
whole of the property of the debtor, or (c) the dissolution or liquidation of a corporation, company,
partnership, association or entity when it is the debtor,

Article 15 16 of the authentic English text is reproduced as corrected in depositary notification

C.N.106.1991.Treaties-2 of 29 February 1992.Convention on the Limitation Period in the
International Sale of Goods 9 the limitation period shall cease to run when the creditor asserts his
claim in such proceedings for the purpose of obtaining satisfaction or recognition of the claim,
subject to the law governing the proceedings.

Article 16 For the purposes of articles 13, 14 and 15, any act performed by way of counterclaim
shall be deemed to have been performed on the same date as the act performed in relation to the

15
*New paragraph 4, added in accordance with article III of the 1980 Protocol.
16
*Article 15 of the authentic English text is reproduced as corrected in depositary notification C.N.106.1991.Treaties-
2 of 29 February 1992.
claim against which the counterclaim is raised, provided that both the claim and the counterclaim
relate to the same contract or to several contracts concluded in the course of the same transaction.
Article 17 (1) Where a claim has been asserted in legal proceedings within the limitation period in
accordance with article 13, 14, 15 or 16, but such legal proceedings have ended without a decision
binding on the merits of the claim, the limitation period shall be deemed to have continued to run.
(2) If, at the time such legal proceedings ended, the limitation period has expired or has less than
one year to run, the creditor shall be entitled to a period of one year from the date on which the
legal proceedings ended.

Article 18 (1) Where legal proceedings have been commenced against one debtor, the limitation
period prescribed in this Convention shall cease to run against any other party jointly and severally
liable with the debtor, provided that the creditor informs such party in writing within that period
that the proceedings have been commenced. (2) Where legal proceedings have been commenced
by a subpurchaser against the buyer, the limitation period prescribed in this Convention shall cease
to run in relation to the buyer’s claim over against the seller, if the buyer informs the seller in
writing within that period that the proceedings have been commenced. (3) Where the legal
proceedings referred to in paragraphs 1 and 2 of this article have ended, the limitation period in
respect of the claim of the creditor or the buyer against the party jointly and severally liable or
against the seller shall be deemed not to have ceased running by virtue of paragraphs 1 10
Convention on the Limitation Period in the International Sale of Goods and 2 of this article, but
the creditor or the buyer shall be entitled to an additional year from the date on which the legal
proceedings ended, if at that time the limitation period had expired or had less than one year to run.

Article 19 Where the creditor performs, in the State in which the debtor has his place of business
and before the expiration of the limitation period, any act, other than the acts described in articles
13, 14, 15 and 16, which under the law of that State has the effect of recommencing a limitation
period, a new limitation period of four years shall commence on the date prescribed by that law.

Article 20 (1) Where the debtor, before the expiration of the limitation period, acknowledges in
writing his obligation to the creditor, a new limitation period of four years shall commence to run
from the date of such acknowledgement. (2) Payment of interest or partial performance of an
obligation by the debtor shall have the same effect as an acknowledgement under paragraph 1 of
this article if it can reasonably be inferred from such payment or performance that the debtor
acknowledges that obligation. Article 21 Where, as a result of a circumstance which is beyond the
control of the creditor and which he could neither avoid nor overcome, the creditor has been
prevented from causing the limitation period to cease to run, the limitation period shall be extended
so as not to expire before the expiration of one year from the date on which the relevant
circumstance ceased to exist.

MODIFICATION OF THE LIMITATION PERIOD BY THE PARTIES Article

2217 (1) The limitation period cannot be modified or affected by any declaration or agreement
between the parties, except in the cases provided for in paragraph 2 of this article. *Article 22 of
the authentic English text is reproduced as corrected in depositary notification
C.N.106.1991.Treaties-2 of 29 February 1992.Convention on the Limitation Period in the
International Sale of Goods 11 (2) The debtor may at any time during the running of the limitation
period extend the period by a declaration in writing to the creditor. This declaration may be
renewed. (3) The provisions of this article shall not affect the validity of a clause in the contract of
sale which stipulates that arbitral proceedings shall be commenced within a shorter period of
limitation than that prescribed by this Convention, provided that such clause is valid under the law
applicable to the contract of sale.

GENERAL LIMIT OF THE LIMITATION PERIOD

Article 23

Notwithstanding the provisions of this Convention, a limitation period shall in any event expire
not later than ten years from the date on which it commenced to run under articles 9, 10, 11 and 12
of this Convention.

CONSEQUENCES OF THE EXPIRATION OF THE LIMITATION PERIOD

Article 24

Expiration of the limitation period shall be taken into consideration in any legal proceedings only
if invoked by a party to such proceedings.

17
*Article 22 of the authentic English text is reproduced as corrected in depositary notification C.N.106.1991.Treaties-
2 of 29 February 1992.
 Article 25 (1) Subject to the provisions of paragraph 2 of this article and of article 24, no claim
shall be recognized or enforced in any legal proceedings commenced after the expiration of the
limitation period. (2) Notwithstanding the expiration of the limitation period, one party may rely
on his claim as a defence or for the purpose of set-off against a claim asserted by the other party,
provided that in the latter case this may only be done: (a) if both claims relate to the same contract
or to several contracts concluded in the course of the same transaction; or (b) if the claims could
have been set-off at any time before the expiration of the limitation period.12 Convention on the
Limitation Period in the International Sale of Goods

Article 26 Where the debtor performs his obligation after the expiration of the limitation period,
he shall not on that ground be entitled in any way to claim restitution even if he did not know at
the time when he performed his obligation that the limitation period had expired.

Article 27 The expiration of the limitation period with respect to a principal debt shall have the
same effect with respect to an obligation to pay interest on that debt.

CALCULATION OF THE PERIOD

Article 28 (1) The limitation period shall be calculated in such a way that it shall expire at the end
of the day which corresponds to the date on which the period commenced to run. If there is no such
corresponding date, the period shall expire at the end of the last day of the last month of the
limitation period. (2) The limitation period shall be calculated by reference to the date of the place
where the legal proceedings18 are instituted. Article 29 Where the last day of the limitation period
falls on an official holiday or other dies non juridicus precluding the appropriate legal action in the
jurisdiction where the creditor institutes legal proceedings or asserts a claim as envisaged in article
13, 14 or 15, the limitation period shall be extended so as not to expire until the end of the first day
following that official holiday or dies non juridicus on which such proceedings could be instituted
or on which such a claim could be asserted in that jurisdiction.

18
*New paragraph 4, added in accordance with article III of the 1980 Protocol.
7. CONCLUSION

The Limitation Convention is complemented by the United Nations Convention on Contracts for
the International Sale of Goods (the United Nations Sales Convention, also known as “CISG”).
Adopted by a diplomatic conference on 11 April 1980, the United Nations Sales Convention
establishes a comprehensive code of legal rules governing the formation of contracts for the
international sale of goods, the obligations of the buyer and seller, remedies for breach of contract
and other aspects of the contract. 28. The Limitation Convention is also complemented, with
respect to the use of electronic communications, by the United Nations Convention on the Use of
Electronic Communications in International Contracts, 2005 (the Electronic Communications
Convention). The Electronic Communications Convention aims at facilitating the use of electronic
communications in international trade by assuring that contracts concluded and other
communications exchanged electronically are as valid and enforceable as their traditional paper-
based equivalents. In particular, certain formal requirements contained in widely adopted
international trade law treaties may hinder the legal recognition of the use of electronic
communications. The Electronic Communications Convention is an enabling treaty whose effect
is to remove 3The authentic Arabic text was adopted in 1992 as communicated by depositary
notification C.N.470.1992.TREATIES-5 of 2 June 1993.26 Convention on the Limitation Period
in the International Sale of Goods those formal obstacles by establishing the requirements for
functional equivalence between electronic and written form.

Other provisions of the Convention deal with implementation of the Convention in States having
two or more territorial units where different legal systems exist. A series of provisions deals with
declarations and reservations permitted under the Convention and with procedures for making and
withdrawing them. The permitted declarations and reservations have been mentioned above; no
others may be made under the Convention. 24. The final clauses contain the usual provisions
relating to the SecretaryGeneral of the United Nations as depositary of the Convention. The
Convention Convention on the Limitation Period in the International Sale of Goods 25 is subject
to ratification by States that signed it before 31 December 1975 and for accession by States that
did not do so. The Arabic, Chinese, English, French, Russian and Spanish texts of the Convention
are equally authentic.3 25. The Secretary-General of the United Nations is also the depositary of
the 1980 Protocol amending the Convention, which is open for accession by all States. Since the
Protocol had already received the necessary number of accessions, the Convention as amended by
the Protocol entered into force on the same date as the unamended Convention on 1 August 1988.
26. A State that ratifies or accedes to the Convention after the Convention and Protocol come into
force will become a party to the unamended Convention as well unless it notifies the depositary to
the contrary. The Convention as amended will enter into force for that State on the first day of the
month following the expiration of 6 months after the date of deposit of its instrument of ratification
or accession. Accession to the Protocol by a State that is not a Contracting Party to the Convention
constitutes accession to the Convention as amended by the Protocol.

BIBLIOGRАPHY

BOOKS:

- INTERNATIONAL TRADE LAW BY INDIRA CARR.

- INTERNATIONAL TRADE LAW BY SR MYNEI.

- THE LAW AND PRACTICE OF INTERNATIONAL TRADE BY SCMITTHOFF.

WEBSITES:

- internationaltradelaw.blog

- http://www.amazon.in/international trade laws/international trade laws

https://uncitral.un.org
https://www.internationaltradelaw.org