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Cite as Farnsworth, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 163-174. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.

Article 18

E. Allan Farnsworth

1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision

Article 18

(1) A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. Silence or inactivity does not in itself amount to acceptance.

(2) An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.

(3) However, if by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may indicate assent by performing an act, such as one relating to the dispatch of the goods or payment of the price, without notice to the offeror, the acceptance is effective at the moment the act is performed, provided that the act is performed within the period of time laid down in the preceding paragraph.

1. History of the provision.

     1.1. - Article 18 is the first of six articles dealing with acceptance of an offer. They follow the four preceding articles dealing with the offer itself. Article 18 lays down the general rules for acceptance. Paragraph (1) is concerned with the nature and means of acceptance. Paragraph (2) is concerned with the need for communication to the offeror. Paragraph (3) makes an exception to the rule in Paragraph (2).

     1.2. - Paragraph (1) is derived from Article 6 of ULFC. The first paragraph of that article spoke of acceptance by a «declaration». It provided: [page 163]

Acceptance of an offer consists of a declaration communicated by any means whatsoever to the offeror.

Article 6(2) of ULFC allowed for acceptance by conduct. It provided:

Acceptance may also consist of the dispatch of the goods or of the price or of any other act which may be considered to be equivalent to the declaration referred to in paragraph 1 of this Article either by virtue of the offer or as a result of practices which the parties have established between themselves or usage.

The Secretariat presented to the Working Group an alternative text based on Article 6 of ULFC and discussion proceeded on the basis of the alternative text (see Yearbook, VIII (1977), 80-82). As a result of objections to the alternative text, the matter was referred by the Working Group to a Drafting Group, which recommended the deletion of Article 6 of ULFC and the substitution of a single sentence defining acceptance: «A declaration or other conduct by the offeree indicating assent to an offer is an acceptance». The Working Group accepted this (see Yearbook, VIII (1977); 83; Yearbook, IX (1978), 78).

The Working Group decided to add a new sentence providing: «Silence shall not in itself amount to acceptance» (see Yearbook, IX (1978), 78). This decision had a bearing on Article 2(2) of ULFC which provided that «a term of the offer stipulating that silence shall amount to acceptance is invalid». The Commission decided to delete this provision in view of the new second sentence of Article 18(1), «since it was generally agreed that silence in itself should not constitute acceptance; but silence could constitute acceptance if this had been previously agreed upon between the parties or resulted from prior dealings between them or from usage» (see Yearbook, IX (1978), 42; see also Yearbook, IX (1978), 32; Yearbook, VIII (1977), 131). The second sentence of Article 18(1) underwent a minor change at the Vienna Conference when it was decided to say «silence or inactivity» rather than «silence» (see Official Records, II, 280).

     1.3. - Paragraph (2) is based on Article 8(1) of ULFC, which said:

A declaration of acceptance of an offer shall have effect only if it is communicated to the offeror within the time he has fixed or, if no such [page 164] time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror, and usage. In the case of an oral offer, the acceptance shall be immediate, if the circumstances do not show that the offeree shall have time for reflection.

The Drafting Group referred to earlier (see § 1.2., supra) recast this language so that, after minor changes by the Working Group, it read:

Subject to paragraph 3 of this article, acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. It is not effective if the indication of assent does not reach the offeror within the time he has fixed or if no time is fixed within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise (see Yearbook, VIII (1977), 82-84; Yearbook, IX (1978), 78, 79).

This version became the final one with only minor drafting changes.

     1.4. - The closest counterpart to paragraph (3) is Article 6(2) of ULFC. That provision (see § 1.2., supra) stated that such acts as dispatch of the goods or the price might amount to acceptance. That provision did not, however, speak of the necessity of giving notice. It was the view of the Working Group that there should be a provision patterned after ULFC Article 6(2) to the effect that «where, by virtue of the offer or the practices established between the parties or of usage, the dispatch of the goods or of the prices or the performance of any other act would indicate assent to the offer even though no notice had been given to the offeror» (see Yearbook, IX (1978), 79). A Special Working Party was set up to prepare a draft. As a result, the Working Group approved a text that was substantially the same as that of paragraph (3) (see Yearbook, IX (1978), 79).

2. Meaning and purpose of the provision.

     2.1. - Paragraph (1) deals with the nature of acceptance. It provides that an acceptance of an offer must indicate assent to [page 165] the offer. Thus a mere acknowledgement of receipt of the offer or an expression of interest in it is not enough. Furthermore, since an acceptance is the final step in the making of the contract, it cannot be conditional on some further step to be taken by either the offeror or the offeree. And, at least according to traditional doctrine, the expression of assent must be one on the terms proposed by the offeror without any variation. Article 19 modifies this traditional doctrine to some extent, as the discussion of that article will show.

     2.2. - Paragraph (1) also deals with the means as well as the nature of acceptance. Usually the offeree indicates assent by means of a statement. But conduct other than a statement may also indicate assent, and paragraph (1) provides that acceptance may also be by means of such conduct. Acceptance may be by such conduct even if the offer consists of a statement, since the acceptance need not be by the same means as the offer.

Conduct amounting to acceptance most often consists of acts of performance. For example, a buyer's offer to buy goods may be accepted by the seller's shipment of the goods, and a seller's offer to sell goods may be accepted by the buyer's payment of the price. But acceptance may also consist of acts of preparation for performance, including the seller's procuring or beginning manufacture of the goods or the buyer's arranging for a letter of credit.

It is within the offeror's power to specify the means by which the buyer may accept. The offeror may, for example, insist that the acceptance be by telex or that it be handed to him personally. Whether a means of acceptance specified by the offeror is the only effective means of acceptance is a matter of interpretation of the offer. The mere fact that the offeror has used, for example, telex for the offer does not of itself mean that the same means must be used for an acceptance. The rapidity of the means by which the offer is sent, however, may have a bearing on the time within which the acceptance must be received. (see § 2.5., infra). Usages or practices may also require that a particular means of acceptance be used. An acceptance that is not effective because it is not by the proper means may be a counter-offer.

     2.3. - Conduct that takes the form of silence or inactivity poses a special problem. It is a rule in all legal systems that an [page 166] acceptance will not ordinarily be inferred from the offeree's mere silence. Paragraph (1) reflects this general rule by providing: «Silence or inactivity does not in itself amount to acceptance». Thus an offeree's mere silence in the face of an offer to sell goods is not ordinarily an acceptance because the offeror has no reason to infer from the offeree's silence that he assents to the offer. Of course, if in addition to his silence the offeree takes some affirmative act, as where a buyer exercises dominion over goods shipped to him, that act may amount to acceptance.

The offeror cannot by himself derogate from the general rule that the offeree's silence is not in itself acceptance. Thus it would not change the result if the offeror added at the end of his offer to sell goods, «I shall assume that you have accepted my offer if I do not hear from you within a week». Even if the offeree remained silent in the face of such an offer, the offeror could not treat the offer as accepted (but see § 3.2., infra).

However, Article 6 provides that the «parties may ... derogate from or vary the effect of any of [the Convention's] provisions». Thus if both the offeror and the offeree agreed that silence or inactivity would amount to acceptance, their agreement would be effective to change the general rule of Article 18(1) and make the offeree's silence amount to acceptance. For example, if a long-term franchise agreement provides that the franchisee's orders of goods shall be considered accepted if the franchisor does not reply within ten days, the franchisor's silence for ten days in the face of an offer would amount to acceptance. Furthermore, under Article 9, the parties are bound «by any usage to which they have agreed and by any practices which they have established between themselves». Therefore a usage or a practice of acceptance by silence can also derogate from the general rule. Such a practice might be found to exist where, for example, a seller has on previous occasions filled a buyer's orders without having acknowledged or accepted them, leading the buyer reasonably to assume that the future orders will be filled unless the seller explicitly rejects them (compare NOUSSIAS, Die Zugangsbedürftigkeit, 111-112, with HUBER, UNCITRAL-Entwurf, 448).

     2.4. - Paragraph (2) deals with the need for communication to the offeror. It lays down the general rule that an acceptance is [page 167] effective only when it is communicated to the offeror. This rule applies regardless of the means of acceptance -- whether by a statement or by other conduct. It will be simplest to discuss acceptance by means of a statement first.

     2.5. - Legal systems differ as to whether an acceptance by means of a statement is effective on dispatch of the statement or only on its receipt. Paragraph (2) adopts a «receipt» rule and provides that an acceptance «becomes effective at the moment the indication of assent reaches the offeror». The effect of this rule is that no contract is concluded if an acceptance is dispatched by the offeree but is lost in transmission and never reaches the offeror. Paragraph 24 gives particulars on when an acceptance «reaches» the offeror.

The Convention's use of the «receipt» rule for the situation in which an acceptance is lost in transmission is reflected in Article 23, which provides that a «contract is concluded at the moment when an acceptance of an offer becomes effective», that is, at the moment that it reaches the offeror. It is also reflected in Article 22, which provides that an «acceptance may be withdrawn if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective», that is, before or at the same time as it reached the offeror. But the Convention departs from the «receipt» rule and adopts the «dispatch» rule in one important respect. Under Article 16(1), an offer that is not irrevocable «may be revoked if the revocation reaches the offeree before he has dispatched an acceptance». Thus the Convention uses a «dispatch» rule to determine when it is too late for an offeror to revoke his offer.

     2.6. - Paragraph (2) also bears on the case of a late, as distinguished from a lost, acceptance. In keeping with its use of a «receipt» rule for the case of a lost acceptance, paragraph (2) provides that if the offeror has not fixed a time for acceptance, the acceptance must reach him «within a reasonable time» in order to be effective. In determining what is «reasonable» in this connection, «due account» is to be «taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror». Thus a telex calls for a prompter response than does a letter. [page 168]

If the offer is oral, as in a conversation face-to-face or over the telephone, a question may arise as to whether the offer survives after the conversation has ended. Paragraph (2) provides that generally it does not survive by requiring that such an offer «be accepted immediately unless the circumstances indicate otherwise».

It is, of course, always open to the offeror, whether the offer is oral or written, to fix a period after which this offer will lapse and, if he does so, that period will control. Article 20 lays down rules of interpretation to aid in determining when such a period begins to run. Article 18(2) indicates that the acceptance must «reach the offeror within the time he has fixed» in order to be effective.

If the acceptance does not reach the offeror «within the time ... fixed or, if no time is fixed, within a reasonable time», it is not effective as an acceptance. The offer has lapsed and no contract results. The late acceptance may, however, amount to a counter-offer, which can then be accepted by the original offeror. Furthermore, under Article 21(2), if the late acceptance shows that it is late because of a delay in transmission, the offeror must notify the offeror in order to avoid being bound by the late acceptance (see commentary on Article 21 infra, § 2.3.).

     2.7. - The preceding discussion has dealt with the common situation in which the acceptance is by means of a statement. The general rules of paragraph (2) also apply where the acceptance is by means of other conduct. The most important question in that connection is whether the conduct alone is effective as an acceptance or whether the offeree must in addition notify the offeror.

In practice this question may not arise as often as might be supposed. If the conduct consists of the buyer's payment of the price or the seller's shipment of the goods by air or by some other rapid mode of transportation, the indication of assent may in the natural course of events come to the offeror's attention within the required time. It is sufficient if the indication of assent reaches the offer by means of a notification by a third party, such as a bank or a carrier, and it is not necessary that it state explicitly that the offeree accepts as long as it is reasonably clear from the circumstances that this is so. [page 169]

Thus the question of whether the offeree must, in addition to his conduct, notify the offeror is likely to arise only if the conduct will not of itself give notice of acceptance to the offeror within a reasonable period of time. In that situation, the general rule of paragraph (2), clearly requires that the offeree notify the offeror. Thus, for example, a seller of goods, who ships the goods by ocean carrier in response to a buyer's offer, is expected to notify the buyer of his assent to the buyer's offer. If that notice reaches the buyer before the goods are shipped, the notice would itself constitute the acceptance. If the notice does not reach the buyer until after the goods are shipped, the shipment is the acceptance. In either case, the acceptance is not effective until the notice reaches the buyer.

     2.8. - A question then arises as to whether there are exceptions to the general rule of paragraph (2) that is, whether there are situations in which the offeree's conduct itself, without notice to the offeror, amounts to acceptance. There are two bases in the Convention for such exceptions: the general rule of Article 6 and the special rule of paragraph (3).

Under the general rule in Article 6, the «parties may ... derogate from or vary the effect of any of [the Convention's] provisions». Just as the parties can agree that the offeree's silence or inactivity amounts to acceptance, they can also agree that the offeree's conduct without notification amounts to acceptance (see § 2.3., supra). For example, if a long-term franchise agreement provides that the franchisee's orders of goods shall be considered accepted when the franchisor ships the goods, even if no notice is sent to the franchisee, the franchisor's shipment of the goods without more would amount to acceptance. Furthermore, as in the case of silence, usage and practices may show an agreement derogating from the provisions of the Convention.

The special rule of paragraph (3) appears to be little more than an extension of the general rule of Article 6. If the case comes under paragraph (3), «the acceptance is effective at the moment the act is performed», as long as it is performed within the time required for acceptance and no notice to the offeror is required. However, this exception applies only «if by virtue of the offer or as a result of practices which the parties have established between themselves or of usage, the offeree may [page 170] indicate assent by performing an act ... without notice to the offeror». The only significant extension beyond the general rule of Article 6 is to permit the offeror in his offer to vary the rule of paragraph (2) in this way. It is worth noting in this connection that Article 6, by itself, might not allow the offeror alone to do this, since Article 6 speaks of variation by «the parties». Compare with this situation the situation discussed in § 2.3., supra, in which the offeror attempts to make the offeror's silence amount to acceptance. In that situation, however, it was assumed that it was the offeror who claimed that a contract has resulted, whereas in this situation it is the offeree who claims that a contract has resulted (see § 3.2., infra; but see KELSO, Battle of Forms, 540-542).

     2.9. - A few illustrations will help to clarify the relationship of paragraph (2) and (3).

     Illustration 1. Buyer mailed a letter to Seller offering to buy specified goods to be shipped by air. Without notifying Buyer that he was doing so, Seller shipped the goods by air. The goods took only three days to arrive, but when the carrier notified Buyer that they had arrived, Buyer refused to take them and telephoned Seller to that effect. Buyer is bound by a contract. The carrier notified Buyer of Seller's assent within three days, a reasonable time under paragraph (2) in view of the fact that the offer itself was by mail.

     Illustration 2. The facts being otherwise as in Illustration 1, Buyer's offer was to buy goods to be shipped by sea, Seller shipped the goods by sea, and they took four weeks to arrive. Buyer is not bound by a contract. The carrier did not notify Buyer of Seller's assent within a reasonable time under paragraph (2).

3. Problems concerning the provision.

     3.1. - In view of the split among the world's legal, systems between the use of a «receipt» and a «dispatch» rule to deal with a lost acceptance, the Convention's choice of the «receipt» rule in Article 18(2) is open to question. In favour of the «dispatch» rule, it can be argued that if an acceptance is lost, it [page 171] is more reasonable to expect the offeror to be troubled and make prompt inquiry of the offeree as to why there has been no response to the offer than to expect the offeree to be troubled and make prompt inquiry of the offeror as to why there has been no response to the acceptance. If this is so, the «dispatch» rule seems fairer since it puts the burden on the offeror. In favour of the «receipt» rule, however, it can be argued that it is the offeree who can best take precautions to see that the acceptance will not be lost, and that therefore it is fairer to put the burden on the offeree.

     3.2. - Several problems may arise in connection with silence as acceptance. First, the provision in paragraph (1) that silence is not acceptance might give rise to difficulty in the situation discussed earlier in which the offeror added at the end of his offer to sell goods, «I shall assume that you have accepted my offer if I do not hear from you within a week» (see § 2.3., supra). It was already pointed out that the offeror could not take advantage of such a provision and treat the offeree's silence as acceptance. It is less clear what the result should be if the offeree seeks to take advantage of the provision and treat his own silence as acceptance binding the offeror. Since the Convention nowhere states that the offeror can in no circumstances make silence have the effect of acceptance (see § 1.2., supra), it should be open to a judge or arbitrator to consider whether the offeree was misled by such a provision and relied on his own silence operating as acceptance. If this is so, the offeror should be precluded from denying that the offeree's silence amounted to acceptance, even though this would result in a situation in which the offeree could hold the offeror but the offeror could not hold the offeree.

Another problem may arise when the parties have agreed that silence is acceptance. It is unclear whether, in that situation, the time of the acceptance is the time of the end of the required period of silence or, retroactively, the time of the receipt of the offer.

Yet another problem concerning silence as acceptance may arise if a party whose place of business is in a State that has preserved its domestic rules as to written form by means of a reservation under Article 96 makes a written agreement (such as that in the example of the long-term franchise agreement, in [page 172] § 2.3., supra). It is unclear whether silence would be effective in that example since it is the written agreement not a «provision ... of this Convention, that allows ... acceptance ... to be made ... other than in writing». (see HONNOLD, Uniform Law, 182).

     3.3. - A practical problem may, of course, arise under paragraph (2) if an offeror who has not fixed a time limit for acceptance is unsure whether the time within which the acceptance reached him was «reasonable». However, problems of this nature cannot be avoided in a law such as the Convention. Furthermore, the offeror can prevent the problem arising by fixing a time limit when he makes his offer. And he can cope with the problem if it arises by sending a further communication to the offeree indicating his assent to the contract. This would confirm a contract (should the time be reasonable) or would accept the offeree's counter-offer (should the time not be reasonable).

     3.4. - Two final problems arise under paragraph (3). The first concerns what language in an offer is sufficient to invoke the exception rule of paragraph (3). What words are sufficient to indicate that «the offeree may indicate assent by performing an act ... without notice to the offeror?» Commentators have suggested that such language as «ship immediately» or «rush shipment» might suffice (see Secretariat's Commentary, Official Records I, 24; see also HONNOLD, Uniform Law, 184-185, though the author goes on at 186-187 to conclude that paragraph (3) still requires that the indication of assent be communicated). It seems questionable whether such language, without more, invites the offeree to assent «without notice».

The second and related problem relates to the relationship between Article 18(3) and Article 16(2)(b) according to which an offer cannot be revoked «if it was reasonable for the offeree to rely upon the offer as being irrevocable and the offeree has acted in reliance on the offer». In some circumstances, such as those where the buyer asks for «prompt shipment», it might be reasonable for the seller to rely on the offer by shipping the goods before dispatching an indication of his assent to the buyer. This would protect the seller against a possible revocation by the buyer between the time of shipment and the time the seller could reasonably be expected to dispatch his acceptance to the buyer. [page 173] But it would not be necessary in that situation to invoke Article 18(3) (but see the different explanation of the relation of these provisions in HONNOLD, Uniform Law, 184-185; see also NOUSSIAS, Die Zugangsbedürftigkeit, 108-109). [page 174]


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