ESG and Emotional Non-conformity of Goods in Contracts for International Sale of Goods

Purpose - It examines the potential applicability of the CISG to contracts involving the sale of goods with significant emotional value. And it addresses the issues on whether the delivery of non-compliant goods with ESG standards can be considered as an aspect of non-conformity under the CISG. Furthermore, it explores whether and how a corporate ESG codes of conduct can be duly incorporated into contract. Design/Methodology – In order to achieve the purposes of the study, it is based on a literature review which is related to the rules under the CISG as to the seller’s delivery of goods associated with emotions derived from the purchase of goods compliant with ESG standards. It mainly focuses on the rules of the CISG as to the incorporation of standard terms and the duty to deliver conforming goods. Findings – The main findings of this study are as follows. First, the view that it could be applicable based on CISG Art. 3(2) cannot be supported because emotions associated with the purchase of goods cannot be separated from the goods and treated as an independent part of the contractual obligations. Second, depending upon a matter of interpretation of contract one must sometimes incorporate minimum ESG standards into contract if the parties should have known or were expected to know in international trade for the type of transaction in question. Third, the aspects of conformity under the CISG include not only the physical conditions of the goods but also non-physical conditions which are related to various aspects of ESG standards. And as the minimum ESG standards increase due to the recent trend of social conscious consumerism, it is unreasonable not to hold the seller liable for the goods manufactured processed in a manner inconsistent with the standards only because they can be resold in a market which may damage fatally the buyer’s commercial reputation. Originality/value – It may offer guidance to both practicing lawyers and business professionals who are considering entering the sales market, particularly those dealing with goods produced or manufactured in accordance with ESG standards. In addition, it may render us an insight to newly developed or developing rules in this area and show us how they interact with each other.