How to Draft an International Sales Contract (CISG-Compliant)

Table of Contents

Introduction: Why “Standard” Contracts Don’t Work Internationally

Imagine closing a deal with a buyer in another country, shipping the goods on time—only to end up in a legal battle over a missed payment, vague terms, or conflicting laws. This is not a rare scenario. In cross-border trade, assuming your usual sales agreement will hold up is one of the biggest mistakes businesses make.

This article explains why aligning your contract with the United Nations Convention on Contracts for the International Sale of Goods (CISG) is not just good practice—but often essential. Whether you’re exporting machinery from the UAE or licensing software to a European buyer, this guide will help you draft smarter, enforceable sales contracts that comply with international standards.

What Most People Get Wrong About International Sales Contracts

Many business owners, especially SMEs, believe they can use the same domestic template when doing business abroad. The logic sounds simple: “If it worked in Dubai or London, why wouldn’t it work in Milan or Shanghai?”

But international contracts are not just longer versions of domestic ones. They operate in a different legal ecosystem, with different expectations, interpretations, and default rules. The CISG applies automatically in many cross-border transactions unless you explicitly exclude it—yet most parties don’t even realize it governs their deal.

Ignoring the CISG can mean:

Your warranty terms are overridden.
Price and delivery terms are interpreted differently.
Your choice of law clause is disregarded.

Assuming local law will protect you in a global transaction is like assuming your UAE health insurance will cover you in France. It might—but only if you understand the fine print.

What Makes a Sales Contract “CISG-Compliant”?

At its core, a CISG-compliant contract respects the rules set out in the Convention. The CISG, adopted by over 95 countries, governs the formation of contracts and the rights and obligations of buyers and sellers in international goods sales.

To draft a contract under the CISG:

You must recognize that certain domestic assumptions don’t apply.
You should know which provisions are mandatory, and which you can modify.
You must use language that aligns with CISG definitions, not local jargon.

The CISG focuses on clarity, good faith, and predictable outcomes. For example, it allows for oral agreements unless excluded, and does not require a price to be fixed to form a binding contract—unlike many domestic laws.

Step-by-Step: Key Clauses That Should Align with the CISG

Here’s what you need to watch out for when drafting:

1. Scope and Applicability Clause

Clearly state whether the CISG applies—or if you’re opting out.

Example:
“This Agreement shall be governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG), except as modified herein.”

Tip: If you want to use your own governing law (e.g., UAE Civil Code or English law), you must explicitly exclude the CISG.

2. Offer and Acceptance Terms

Under the CISG, silence is not acceptance. A “counter-offer” voids the original offer.

Example:
“An offer is not binding until expressly accepted in writing, and any modification shall constitute a new offer.”

Mistake to avoid: Assuming that a “Yes, but…” response confirms the original offer.

3. Delivery and Risk Transfer

Article 31 of the CISG defines when risk transfers based on place of delivery.

Example:
“Risk shall pass to the Buyer upon delivery to the first carrier at [Port], consistent with CISG Article 67.”

Tip: Use Incoterms (e.g., FOB, CIF) but make sure they don’t contradict the CISG risk terms.

4. Payment and Late Payment Clauses

The CISG is silent on interest rates. You must specify them.

Example:
“Payments overdue by more than 15 days shall incur interest at [X]% per annum, as per CISG Article 78.”

Mistake to avoid: Assuming local interest laws will apply—they won’t automatically under the CISG.

5. Warranty, Inspection & Notice Periods

The buyer must inspect goods “within as short a period as practicable” under Article 38.

Example:
“The Buyer shall inspect the goods within 5 business days and notify the Seller of any non-conformities within 10 business days thereafter.”

Tip: Clarify your own warranty terms so they don’t get overridden by default CISG provisions.

Real-Life Example: A Machinery Supplier in Trouble

A UAE-based supplier sold manufacturing equipment to a German company. The contract was silent on governing law, assumed UAE terms, and did not exclude the CISG.

When the German buyer withheld part of the payment due to alleged defects, the supplier sued in UAE courts. But the German court had jurisdiction under the CISG, and the buyer argued the seller failed to deliver goods “fit for the purpose known to the seller”—a CISG standard.

Because the contract lacked clarity, the seller lost the case and had to refund a large sum.

The lesson? If the contract had explicitly excluded the CISG or been drafted to align with it, the outcome may have been different.

Common Counterpoint: “Can’t I Just Use My Local Lawyer?”

Of course you can. But will they flag CISG issues? Will they know that a standard “governing law” clause doesn’t automatically override CISG application? That silence is not acceptance? That “non-conforming goods” has a different threshold under CISG?

If your lawyer isn’t familiar with cross-border transactions, they may unknowingly expose you to risk. That’s why specialized knowledge matters.

Closing Thoughts: You’re Drafting for the World, Not Your Office

Drafting an international sales contract isn’t about finding a longer template. It’s about shifting your mindset from domestic safety to cross-border strategy. A CISG-compliant contract helps you speak the same legal language as your international counterpart—reducing risk and building trust.

So the next time you export, import, or sell internationally, ask yourself:

❝Is this contract clear not just to me—but enforceable anywhere it matters?❞

If the answer is “I’m not sure,” then it’s time to revisit how your agreements are structured.