The Vienna Sales Convention
To the casual observer, it might not be obvious why the Vienna Sales Convention is relevant to banking law but I see the Financial Markets and Law Committee have said the Convention will apply to derivative contracts where there is provision for physical delivery. It could extend to cover other financial instruments falling within the category of choses in action. The Convention provides a “uniform law governing the formation of cross-border sale of goods contracts, and delimiting certain substantive rights and obligations arising”. The Convention was adopted in 1980 and came into force on 1 January 1988 but the UK is not a party. Most EU countries, the US, China, Canada, and Australia have adopted the Convention and Japan is about to ratify it. In October 2007, the FMLC set up a Working Group to investigate potential legal uncertainties for the financial markets that would arise from UK implementation of the Convention. The paper sets out the problems of legal uncertainty for financial instruments and makes a plea for express consideration to be given in legislation that implements the Vienna Convention.
