Seongbum Lee, Considering Ethical Standards in the Interpretation of Article 35 of the United Nations Convention on Contracts for the International Sale of Goods (CISG), Korean Forum on International Trade and Business Law, Vol.33, No.2(2024.12), pp.31-62.
<Abstract>
This paper examines whether human rights issues, such as child labor exploitation in global supply chains, can impact the construction of contractual liability through the United Nations Convention on Contracts for the International Sale of Goods (CISG). As demands for corporate social responsibility (CSR) from multinational corporations increase, the lack of individualized and effective legal approaches to incorporating human rights standards remains a critical concern. Accordingly, this paper explores whether violations of ethical standards can be evaluated as a lack of conformity to contract under Article 35 of the CISG, even when these standards do not directly affect the physical condition of the goods. First, the paper examines the possibility of including ethical standards in contract terms based on Article 9 (Trade Usages) and Article 7 (Interpretation) of the CISG, in relation to constructing contractual liability. For instance, similar to the certification schemes preventing blood diamonds in diamond transactions, this study considers the feasibility of incorporating minimum ethical standards broadly applied in global supply chains into contractual terms. It also assesses whether the impact of ethical standard violations on resale potential and reputation can be reflected in the subjective and objective conformity evaluations under CISG Article 35 (1) and (2). Specifically, this study discusses whether compliance with ethical standards could fall under the quality requirement in Article 35 (1), questioning whether conformity requirements pertain solely to the physical condition of the goods. Additionally, the paper proposes remedies provided under the CISG, including substitute delivery, contract termination, and damages, with a particular focus on methods for quantifying reputational damages, customer loss, and depreciation in goods value due to ethical standard violations. This study aims to explore the possibility of providing individualized and effective remedies based on the CISG framework and considers whether such an approach could incentivize companies to uphold ethical standards within international supply chains.
<Keywords>
Supply Chain Due Diligence Act, United Nations Convention on Contracts for the International Sale of Goods (CISG), Ethical Standards, Conformity of Goods, Contractual Liability, Compensation for Damages.
Seongbum Lee, Considering Ethical Standards in the Interpretation of Article 35 of the United Nations Convention on Contracts for the International Sale of Goods (CISG), Korean Forum on International Trade and Business Law, Vol.33, No.2(2024.12), pp.31-62.
<Abstract>
This paper examines whether human rights issues, such as child labor exploitation in global supply chains, can impact the construction of contractual liability through the United Nations Convention on Contracts for the International Sale of Goods (CISG). As demands for corporate social responsibility (CSR) from multinational corporations increase, the lack of individualized and effective legal approaches to incorporating human rights standards remains a critical concern. Accordingly, this paper explores whether violations of ethical standards can be evaluated as a lack of conformity to contract under Article 35 of the CISG, even when these standards do not directly affect the physical condition of the goods. First, the paper examines the possibility of including ethical standards in contract terms based on Article 9 (Trade Usages) and Article 7 (Interpretation) of the CISG, in relation to constructing contractual liability. For instance, similar to the certification schemes preventing blood diamonds in diamond transactions, this study considers the feasibility of incorporating minimum ethical standards broadly applied in global supply chains into contractual terms. It also assesses whether the impact of ethical standard violations on resale potential and reputation can be reflected in the subjective and objective conformity evaluations under CISG Article 35 (1) and (2). Specifically, this study discusses whether compliance with ethical standards could fall under the quality requirement in Article 35 (1), questioning whether conformity requirements pertain solely to the physical condition of the goods. Additionally, the paper proposes remedies provided under the CISG, including substitute delivery, contract termination, and damages, with a particular focus on methods for quantifying reputational damages, customer loss, and depreciation in goods value due to ethical standard violations. This study aims to explore the possibility of providing individualized and effective remedies based on the CISG framework and considers whether such an approach could incentivize companies to uphold ethical standards within international supply chains.
<Keywords>
Supply Chain Due Diligence Act, United Nations Convention on Contracts for the International Sale of Goods (CISG), Ethical Standards, Conformity of Goods, Contractual Liability, Compensation for Damages.