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A tea business in the United States must arrange for the purchase of tea abroad, and its importation into
the country. To do this, the business enters into a purchase agreement with a broker or tea producer.
While the UN Convention on Contracts for the International Sale of Goods (CISG) is meant to apply to
transactions between most countries, some contracts will opt out of the CISG. Moreover, India, for
example, is not a party to the CISG, so transactions between parties in India and the United States will
likely be governed either by the Uniform Commercial Code (UCC) or the Indian Sale of Goods Act,
1930. The UCC is the normal legal regime in the United States for contracts for the sale of goods and is
in force in such states as California and New York. Where a business is purchasing tea from sources
within the United States, one state’s version or another of the UCC will likely apply. For transactions
inside or involving England, the English Sale of Goods Act 1979 (as amended by later statutes) will likely
apply, although the Act’s effect may sometimes be modified by the English courts’ international
mercantile case law.
International transactions are quite complicated and will usually require that a business obtain reliable
legal advice in each relevant country. Lawyers and businesses involved in tea transactions need to
understand not only the UCC and CISG, but also the effect of the law of the relevant tea producing
country, such as the Sri Lanka Sale of Goods Act, Kenyan Sale of Goods Act (cap. 31) of 1981, or the
Chinese 1999 Contract Law, on their purchase contracts. Moreover, in certain countries, the local tea
act or regulations of that country’s tea board, may modify purchase contracts made directly with the tea
grower. Thus, legislation such as the Indian Tea Act 1953, Kenyan Tea Act (cap. 343) of 1961,
Tanzanian Tea Act (No. 3 of 1997), and relevant regulations, may become an issue for large-scale tea
purchases. Regardless of the laws that may influence the tea purchase contract, the importing tea
business will need to make sure that the shipment conforms to US statutes and customs and FDA
regulations relating to marking and labeling of tea and similar products.
the country. To do this, the business enters into a purchase agreement with a broker or tea producer.
While the UN Convention on Contracts for the International Sale of Goods (CISG) is meant to apply to
transactions between most countries, some contracts will opt out of the CISG. Moreover, India, for
example, is not a party to the CISG, so transactions between parties in India and the United States will
likely be governed either by the Uniform Commercial Code (UCC) or the Indian Sale of Goods Act,
1930. The UCC is the normal legal regime in the United States for contracts for the sale of goods and is
in force in such states as California and New York. Where a business is purchasing tea from sources
within the United States, one state’s version or another of the UCC will likely apply. For transactions
inside or involving England, the English Sale of Goods Act 1979 (as amended by later statutes) will likely
apply, although the Act’s effect may sometimes be modified by the English courts’ international
mercantile case law.
International transactions are quite complicated and will usually require that a business obtain reliable
legal advice in each relevant country. Lawyers and businesses involved in tea transactions need to
understand not only the UCC and CISG, but also the effect of the law of the relevant tea producing
country, such as the Sri Lanka Sale of Goods Act, Kenyan Sale of Goods Act (cap. 31) of 1981, or the
Chinese 1999 Contract Law, on their purchase contracts. Moreover, in certain countries, the local tea
act or regulations of that country’s tea board, may modify purchase contracts made directly with the tea
grower. Thus, legislation such as the Indian Tea Act 1953, Kenyan Tea Act (cap. 343) of 1961,
Tanzanian Tea Act (No. 3 of 1997), and relevant regulations, may become an issue for large-scale tea
purchases. Regardless of the laws that may influence the tea purchase contract, the importing tea
business will need to make sure that the shipment conforms to US statutes and customs and FDA
regulations relating to marking and labeling of tea and similar products.
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