The United Nations Convention on Contracts for the International Sale of Goods (CISG) is a directly applicable source of law in international commercial sales contracts. This article analyses the conditions for CISG application under Turkish law, contractual exclusion mechanisms, and Turkish Court of Cassation case law.
The United Nations Convention on Contracts for the International Sale of Goods (CISG) is one of the foundational instruments of international trade law. Adopted in Vienna in 1980 and therefore also known as the "Vienna Convention," CISG provides a unified and uniform legal framework governing contracts for the sale of goods between parties established in different countries. Türkiye acceded to the CISG in 2010, and the Convention entered into force for Türkiye on 1 August 2011.
1. Conditions for CISG Application
CISG applies automatically to international contracts for the sale of goods when certain conditions are met. Under Article 1 of the Convention, CISG applies when the parties have their places of business in different Contracting States. For example, a sales contract between a Turkish exporter based in Istanbul and a German importer based in Berlin will be governed by CISG unless the parties agree otherwise. This principle of automatic application is insufficiently understood by many Turkish business professionals and lawyers, which can lead to serious legal complications in practice. CISG covers only the sale of "goods" and excludes service contracts, consumer sales, and certain categories of goods such as electricity, ships, and aircraft.
2. CISG vs. Turkish Code of Obligations: Key Differences
There are significant differences between CISG and the Turkish Code of Obligations (Law No. 6098, "TBK") in the context of international sales contracts. First, CISG imposes no formal requirements for the validity of a contract, whereas TBK may require written form in certain circumstances. Second, the notice periods for defects differ materially; under CISG, the buyer must notify the seller of any non-conformity within a reasonable time and in any event within two years of delivery. Third, the conditions for contract avoidance differ structurally; CISG employs the concept of "fundamental breach" as a prerequisite for avoidance, which differs significantly from the default regime under TBK. Ignorance of these differences can result in the loss of substantive rights for Turkish exporters and importers.
3. Contractual Exclusion (Opt-Out)
One of the most important features of CISG is that parties may exclude the Convention's application in whole or in part (CISG Article 6). This "opt-out" mechanism reflects one of CISG's fundamental principles: respect for party autonomy. Parties may exclude CISG by including clauses such as "CISG shall not apply to this contract" or "This contract shall be governed by the Turkish Code of Obligations." However, a critical practical question arises: whether a general choice-of-law clause stating merely "This contract shall be governed by Turkish law" is sufficient to exclude CISG. The prevailing view in international jurisprudence is that CISG, as part of Turkish law, is not excluded by a general choice of Turkish law — an explicit exclusion is required.
4. CISG in Turkish Court of Cassation Decisions
The Turkish Court of Cassation has rendered several decisions applying CISG since its entry into force. However, certain inconsistencies are observable in judicial practice. In some decisions, the Court correctly identifies the direct applicability of CISG, while in others, TBK provisions are applied without adequate examination of CISG's applicability conditions. This suggests that CISG has not yet been fully internalised in Turkish judicial practice. Particular attention to the differences between CISG and TBK regarding defect notification periods, contract avoidance conditions, and damages calculation is of paramount importance for consistent application.
5. Damages and Liability Under CISG
CISG's damages regime differs significantly from TBK. Under Article 74, a party in breach must compensate for the loss suffered by the other party, including loss of profit. However, damages may not exceed the loss that the breaching party foresaw or ought to have foreseen at the time of the conclusion of the contract. This "foreseeability" criterion is a CISG-specific limitation that plays a critical role in determining the scope of damages claims. Additionally, CISG expressly codifies the injured party's duty to mitigate damages. While this obligation is derived from the principle of good faith under TBK, it appears as a positive norm in CISG, with direct consequences for damages calculations.
6. International Arbitration and CISG
The application of CISG in the arbitral resolution of international commercial disputes carries particular significance. CISG is frequently applied in proceedings before ICC, ISTAC, LCIA, and other arbitral institutions. Arbitral tribunals, when interpreting CISG, take into account the Convention's international character and the need for uniform application, construing the Convention through its own autonomous concepts rather than through the lens of domestic law. This "autonomous interpretation" principle is a fundamental approach that Turkish legal practitioners must observe in CISG practice. The rich body of arbitral case law constitutes an important resource for the practical application of CISG.
7. Conclusion and Practical Recommendations
CISG is a directly effective source of law in Türkiye's international trade relations that contains significant differences from TBK. It is essential for Turkish exporters and importers to be aware of CISG's automatic application to international sales contracts; to explicitly state in the contract if they wish to exclude CISG; and to understand CISG provisions on critical issues such as defect notification periods and avoidance conditions. For legal advice on international commercial law and CISG application, please contact us at info@guzeloglu.legal.