Vol 7 No 1 - Roger Williams University School of Law

sales Convention needs to be updated to take into account theelectronic formation of contracts, the question was raised as towhether its scope should be extended beyond goods toinformation—or what the report called “virtual goods.” “It isapparent that a clarification of whether the software should beconsidered as ‘goods’ in the sense of the Convention would beuseful in order to ensure uniformity.”40 Revisions could clarifythat the CISG covers all software, only software incorporated intotangible goods, or only off-the-shelf (i.e., non-custom) software.41The scope issue under the Convention involves not only theissue of what constitutes “goods” but what constitutes a “sale.”Much software is not sold but rather licensed. “The differences inthese approaches are considerable. A sales contract, for instance,frees the buyer (i.e., “user”) from restrictions as to the use of theproduct bought and, thus, clearly delineates the boundaries ofcontrol that may be exercised . . . In contrast, a license agreementallows the producer or developer of ‘virtual goods’ (or services) toexercise control over the product down through the licensingchain.”42The issues confronting UNCITRAL then included whether thescope of the CISG should be broadened to pick up softwarelicensing agreements, or whether the rules derived from the CISGshould be developed for these kinds of transactions. The WorkingGroup report to UNCITRAL, however, placed more emphasis onthe application of the CISG to contracts concluded by electronicmeans for the international sale of tangible goods “in view of theurgent need for the introduction of the legal rules that would beneeded to bring certainty and predictability to the internationalregime governing Internet-based and other electronic commercetransactions.”43 Apparently recognizing the controversysurrounding the enactment of UCITA, the report was cautious inrecommending any expansion of the CISG to non-tangible goodstransactions: “Broadening the scope of such work so as to includethe International Sale of Goods, U.N. Doc. A/CN.9/WG/IV/WP.91 (Feb. 9, 2001)[hereinafter Legal Aspects].40. Id. 24.41. Id.42. Id. 28.43. U.N. Comm’n on Int’l Trade Law, Report of the Working Group on ElectronicCommerce on the Work of Its 38th Session, U.N. Doc. A/CN.9/484, 95 (Apr. 14, 2001).The issues preliminarily identified were: offer and acceptance; receipt and dispatch;internationality of the sales transaction; and parties to the sales transaction.