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Comparison between provisions of the CISG regarding withdrawal of acceptance (Art. 22) and the counterpart provisions of the UNIDROIT Principles of International Commercial Contracts (Art. 2.10)

John Felemegas [*]
August 2004

I.     Introduction
II.    Permissibility of withdrawal
III.   Withdrawal must reach offeror before or at date of effectiveness
        (a) CISG Art. 22
        (b) UNIDROIT Principles [UP] Art. 2.10
IV.   Conclusion

I. Introduction

Article 18(2) of the Convention provides that "[a]n acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror [...]." Article 22 of the Convention, however, allows the possibility that an offeree may withdraw an acceptance "if the withdrawal reaches the offeror before or at the same time as the acceptance would have become effective." In other words, CISG Art. 22 provides a final time for withdrawal of an acceptance.

The UNIDROIT Principles, Article 2.10, provide a similar regime for the effective withdrawal of an acceptance.

II. Permissibility of withdrawal

In Part II of the Convention, entitled "Formation of the Contract", Article 22 deals with the withdrawal of an acceptance by an offeree.[1] As such, the Convention provides to an offeree the opportunity to permissibly withdraw an acceptance of an offer to conclude a contract.

CISG Art. 22 provides the rule on the timing for an effective withdrawal of an acceptance.[2] This provision must be analyzed in the context of the basic rule of the Convention that an acceptance cannot be withdrawn after it has become effective and it complements the rule in CISG Art. 23 that a contract is concluded "at the moment when an acceptance of an offer becomes effective."[3]

The UNIDROIT Principles in Chapter 2, entitled "Formation", include Article 2.10, entitled "Withdrawal of an Acceptance",[4] which is a similar provision dealing with the timing for an effective withdrawal of an acceptance by an offeree.

III. Withdrawal must reach offeror before or at date of effectiveness

        (a) CISG Art. 22

CISG Art. 22 provides that an offer may be withdrawn if the withdrawal reaches [5] "the offeror before or at least at the same time as the notice of acceptance".[6]

That provision reflects exactly the parallel approach adopted in the Convention, Art. 15, regarding the effectiveness of an offer.[7] Art. 15(2) provides that "[a]n offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer."

Regarding the application of the rule in Art. 22, it has been noted that, by permitting an effective withdrawal of an acceptance, it creates an opportunity for an offeree to perhaps speculate on at the expense of the offeror.[8]

That problem is likely to arise mainly where traditional means of communication have been used by the parties. For instance, an offeree who may have sent an acceptance by ordinary paper mail may later withdraw it by sending a notice of withdrawal using a faster method of transmission (e.g., fax, or other electronic methods) that reaches the offeror before the ordinary mail.[9]

        (b) UNIDROIT Principles [UP] Art. 2.10

The wording in Article 2:10 is completely identical to that used in its counterpart provision of the Convention. The UNIDROIT Principles Official Commentary on Art. 2:10 explains that the offeree may withdraw the acceptance provided that the withdrawal reaches the offeror before or at the same time as the acceptance.[10]

Furthermore, the Official UNIDROIT Comment makes clear that "while the offeror is bound by the offer and may no longer change its mind once the offeree has dispatched the acceptance (see Art. 2.4(1)), the offeree loses its freedom of choice only at a later stage, i.e. when the notice of acceptance reaches the offeror."

IV. Conclusion

The wording used in the counterpart provisions of the CISG and the UNDROIT Principles is completely identical. Furthermore, based on the similar regime for offers and acceptances and the same policy adopted in the CISG and the UNDROIT Principles to permit an effective withdrawal of an acceptance (and identical counterpart provisions dealing with the withdrawal of an offer), it can be concluded that the counterpart provisions regarding withdrawal of an acceptance are substantively identical.[11]

Thus, it is arguable that the Official UNIDROIT Comments on UP Art. 2.10, which recognize that the offeree enjoys his freedom of choice to enter a contract longer than the offeror, helps interpret the meaning of the provision contained in CISG Art. 22.


FOOTNOTES

* Doctorate in Law; Fellow, Pace Law School Institute of International Commercial Law; Lecturer, Faculty of Law, University of Technology, Sydney.

1. CISG Art. 22 is situated among the eleven provisions of the Convention dealing with contract formation; see CISG Part II, Arts. 14 – 24.

2. See the Text of the Secretariat Commentary on article 20 of the 1978 Draft [draft counterpart of CISG article 22], available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-22.html>. Art. 20 of the 1978 Draft and Art. 22 of the CISG are worded in identical terms. See the Legislative history of CISG article 20: Match-up with 1978 Draft to assess relevance of Secretariat Commentary, available at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-22.html>: "CISG article 22 and 1978 Draft article 20 are identical.  The Secretariat Commentary on 1978 Draft article 20 should therefore be relevant to the interpretation of CISG article 22." Ibid.

3. Text of the Secretariat Commentary on article 20 of the 1978 Draft [draft counterpart of CISG article 22], available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-22.html>.

See CISG Art. 23, which deals with the effect of an acceptance and the time of the conclusion of the contract.  See also CISG Art. 18(2) and 18(3) which states when an acceptance becomes effective.

CISG Art. 20 deals with the computation of time for acceptance of an offer; for a relevant discussion of that provision see Felemegas J., Editorial remarks, "Comparison between provisions of the CISG (Article 20) and the counterpart provisions of the UNIDROIT Principles of International Commercial Contracts (Art. 2.8)", available online, at <http://cisgw3.law.pace.edu/cisg/principles/uni20.html#ed>.

CISG Art. 21 deals with the effect of acceptances that arrive after the expiration of the time for acceptance; for a discussion of the comparison between provisions of the CISG regarding late acceptance (Article 21) and the counterpart provisions of the PECL (Art. 2:207), see Felemegas J., Editorial remarks, available online at <http://cisgw3.law.pace.edu/cisg/text/peclcomp21.html#er>.

4. UP Art. 2.10 is situated in Chapter 2 of the UNIDROIT Principles dealing with the rules of contractual formation; see UP Arts. 2.1 – 2.22.

5. See CISG-AC Opinion no 1, Electronic Communications under CISG, 15 August 2003. Rapporteur: Professor Christina Ramberg, Gothenburg, Sweden. The opinion is available online at <http://cisgw3.law.pace.edu/cisg/CISG-AC-op1.html>. Regarding the impact of electronic communications in the context of Art. 22, the Opinion states: 'The term "reaches" corresponds to the point in time when an electronic communication has entered the offeror's server, provided that the offeror expressly or impliedly has consented to receiving electronic messages of that type, in that format, and to that address."

6. Schlechtriem P., Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods, Manz, Vienna (1986) 54.

See also CISG-AC Opinion no 1, op. cit., Comment  22.2: 'The underlying purpose of this article is to ensure that the offeror has an opportunity to read the withdrawal if he so chooses. It is not required that the offeror actually read the withdrawal, but rather that the withdrawal becomes accessible for reading (the distinction between "reach the mind" and "reach the desk" or "reach the legal entity"). Therefore, when a withdrawal of assent has entered the offeror's sphere of control, it must be assumed to have reached the offeror."

See also Comment 22.3: 'The proposition that a withdrawal only needs to be accessible and not actually read is designed to facilitate evidence. It is possible (more or less easily, but at least conceptually) to prove when a message becomes accessible; it is very difficult to prove when someone actually addressed his mind to it.' Ibid.

7. See CISG Art. 15.

See also Honnold J.O., Uniform Law for International Sales, Kluwer Law International, 3rd ed. (1999), 199, where the author notes that Art. 22 applies to acceptances the same approach that the Convention provides for offers. Honnold states: "Indeed, these articles may constitute specific applications of a general principle that a party may withdraw or modify a communication by a second communication that overtakes the first" (further references provided therein are omitted). Ibid.

See also Ziegel J., Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods, (1981), available at <http://cisgw3.law.pace.edu/cisg/text/ziegel22.html>.

8. Farnsworth E. Allan, "Withdrawal of acceptance (Art. 22)" in Bianca C.M. and Bonell M.J. eds. Commentary on the International Sales Law, Milan: Giuffrè (1987) 196. Farnsworth contemplates that the application of Art. 22 "may result in a period during which the offeror is bound but the offeree is not, giving the offeree an opportunity to speculate on a fluctuating market. By sending an acceptance, the offeree binds the offeror, who can no longer revoke his offer under Article 16. But the offeree can still withdraw his acceptance by sending an overtaking withdrawal. Therefore he might speculate during the period when he is not bound by watching the market to see if it is to his advantage to withdraw his acceptance." For a response to that potential problem with Art. 22, see Kritzer A.H., Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, Kluwer, (1988) 191-192, where it is suggested that problem might be overcome by application of the Convention's good faith proviso (CISG Art. 7(1)).

See also Enderlein F. and Maskow D., International Sales Law, Oceana Publications (1992) 106, also available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein-art22.html>, where the authors also acknowledge the prevailing opinion that the potential problem might be overcome by the application of the rule of good faith (Art. 7(1)), but state: "It is not clear to us why the revoking of an acceptance which has not been received by the offeror constitutes a misuse which has to be fought with good faith. Unclear is also how such a misuse could be proved. Since our law is based on the assumption that an offer is generally binding, the unilateral binding of the offeror is not a problem."

9. See CISG-AC Opinion no. 1, op. cit., Comment 22.1, where it is noted: "The problem in relation to electronic means of communication is that there are rarely any practical means of faster communication than electronic messages sent by e-mail or communicated over websites or other EDI-arrangements. However, the question becomes of practical importance in situations where the acceptance is sent by traditional paper mail and the withdrawal is sent electronically." Ibid.

10. Official UNIDROIT Commentary to Principles 2.10, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni22.html#official>, where it is also noted that Art. 2.10 "lays down the same principle as that contained in Art. 2.3 concerning the withdrawal of an offer".

11. See also the Official UNIDROIT Commentary to Principles 2.10, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni22.html#official>: "This article corresponds to Art. 22 CISG."


Pace Law School Institute of International Commercial Law - Last updated September 22, 2004
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