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Dear clients and cooperation partners,
On 9 October this year, an amendment to the law on “The United Nations Convention on Contracts for the International Sale of Goods”1 came into force. With this amendment Latvia withdraws the requirement that a contract for international sale of goods must be in writing if one contracting party has a commercial entity in Latvia. Most significantly, the amendment means that in future when commercial entities agree orally on international sale of goods it will be easier to determine the rights and obligations of the parties (for example, buyer's and seller's obligations as to delivery of goods and documents, acceptance of goods, payment of price, detection and elimination of defects, withdrawal from the contract and its consequences, moment of transfer of risk, obligation to compensate losses) because the rules of the convention will also apply to oral agreements. Previously oral agreements could be interpreted only in accordance with applicable national laws because the convention did not apply.
This is a positive move because our previous experience in the field of contract law and in resolution of disputes before the courts shows that when contracts are not duly concluded it is sometimes difficult to precisely determine the specific rights and obligations of the contracting parties.
Despite the amendment, in significant transactions we still recommend not relying on oral agreements. Instead, we advise paying special attention to due preparation of transactions and concluding them in writing. However, to those who have suffered because the agreement with the other party was reached orally, we advise considering the need to enforce the agreement irrespective of the fact that it was oral only.
1OP 2012/151.3, official gazette Latvijas Vēstnesis, 25 September 2012, No. 151 (4754)
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