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THE APPLICATION OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS TO MANUFACTURING AND SUPPLY CONTRACTS FOR INTERNATIONAL CONSTRUCTION PROJECTS

International Construction Law Review

THE APPLICATION OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS TO MANUFACTURING AND SUPPLY CONTRACTS FOR INTERNATIONAL CONSTRUCTION PROJECTS Seung-Hyeon (Alex) Kim Partner in the International Arbitration and Cross-Border Litigation Practice, Bae, Kim & Lee LLC, [email protected] Mino Han Associate in the International Arbitration and Cross-Border Litigation Practice, Bae, Kim & Lee LLC, [email protected] Umaer Khalil Associate in the International Arbitration and Cross-Border Litigation Practice, Bae, Kim & Lee LLC, [email protected] ABSTRACT When drafting contracts in construction projects, parties usually do not give much thought to the applicability of the United Nations Convention on Contracts for the International Sale of Goods (the “CISG”) to their contracts. However, it is likely that numerous subcontracts in international construction projects may attract the applicability of the CISG. This can have significant implications for the operation of such contracts. The article considers a recent arbitration involving such a situation, in which the applicability of the CISG to a supply contract resulted in altering the operation of certain notice time-bar provisions, and also appeared to grant the parties the right to suspend performance where it was apparent that the opposing party would not perform a reciprocal promise. Most noticeably, where a time-bar notice provision collides with the prevention principle, the application of article 80 of the CISG may lead to an outcome different from what would occur by applying the presently prevalent common law jurisprudence on the issue. It is therefore recommended that parties to subcontracts in international construction projects carry out a thorough analysis of the possible applicability of the CISG and its impact on their contracts. I. INTRODUCTION In considering a construction project, the possible applicability of the CISG is often given limited thought. It is not unusual for parties and their counsel to expect that any contracts or subcontracts concluded towards a construction project will be governed by the law expressly designated in the Pt 3] The Application of the United Nations Convention on Contracts 353

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