Brazil Joins the Convention on Contracts for the International Sale of Goods (CISG). It's About Time.

Brazil business, Brasil negocio, international attorney, law firm internationalIt’s almost everyday now that I get an email or phone call from a Brazilian investor looking to do business in the U.S. (usually in Miami) or a U.S. investor looking to do business in Brazil.

It’s not exactly a surprise given the  enormous trade numbers the two countries are putting up—$100 Billion in 2011 alone.

Presently, the rules for entering into an international sales contract with a Brazil-based enterprise varies depending on the country of origin of the other party.

As one can imagine, this ad hoc approach to  contract formation creates inefficiencies and greatly increases the chances for one party to misunderstand the other.

That’s about to change ‘ because Brazil  just became the 79th State Party to join the United Nations Convention on Contracts for the International Sale of Goods (CISG). The Convention will enter into force for Brazil on April 1, 2014 (h/t the always informative International Law Prof blog).

As described by UNCITRAL:

The CISG provides an equitable and modern uniform framework for the contract of sale, which is the backbone of international trade in all countries, irrespective of their legal tradition or level of economic development. The CISG is considered to be one of the core conventions in international trade law. It 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.”

This is a step in the right direction for Brazil, which typically ranks among the most difficult countries to do business in according to the World Bank’s annual Doing Business Report.

For countries that are presently unsure of their rights and obligations when dealing with a Brazilian entity,  hang on.

2014 will soon be here.

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