International trade involves the sale of goods and services. In this chapter we examine the international sale of goods, more particularly the contract law that applies to the transactions. Every country has its own laws governing contracts. Imagine, then, the legal complexity facing an international trader selling its goods to an overseas buyer. Does the law of the country from which the goods are sold apply to the contract, or the law of the country where they are bought, or does some other law apply? If the contract law for the international sale of goods was the same in each country, there would be less concern about which country's law applies. This was imagined in the early twentieth century when the International Institute for the Unification of Private Law (UNIDROIT) was established in 1929 as an auxiliary organ of the League of Nations. UNIDROIT's first task was to draft a uniform law for the international sale of goods.

UNIDROIT's work was interrupted by the demise of the League and the outbreak of World War II. Nevertheless, UNIDROIT was re-established in 1940 on the basis of a multilateral agreement. It is now based in Rome and exists as an independent intergovernmental organisation whose purpose is to study needs and methods for modernising, harmonising and coordinating private international law. UNIDROIT completed its sale of goods project in 1964 when it submitted a Convention for the International Sale of Goods and the Convention for a Uniform Law on the Formation of Contracts for the International Sale of Goods to a conference attended by only 28 nations.