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Comparison between provisions of the CISG (Article 24) and the
counterpart provisions of the UNIDROIT Principles (Art. 1.9)

John Felemegas [*]
September 2004

I.    Introduction
II.   Time when communication "reaches" an addressee: CISG Art. 24; UP Art. 1.9
III.  Delivery to addressee's place of business or mailing address
IV.  Relevance to other provisions of the Convention
V.    Conclusion

I. Introduction

The CISG provisions dealing with contract formation can be found in Part II of the Convention.[1] For the purposes of contract formation, during the exchange of communications of offer and acceptance between the parties, many of the applicable CISG Articles provide that a communication becomes effective when it "reaches" the other party, i.e., the addressee.[2]

It has been correctly identified that "[p]ractical problems of proof would arise if the applicability of [those] provisions depended on evidence that a communication came to the personal attention of the addressee."[3]

In order to address such problems, CISG Art. 24 provides the elements of what constitutes an effective communication to an addressee under Part II of the Convention.[4]

The UNIDROIT Principles, like the Convention, adopt the offer and acceptance model of contract formation,[5] which contemplates the exchange of notices and other communications between the parties. In Chapter 1, entitled "General Provisions", the UP include Article 1.9, entitled "Notice", which is a provision similar to its CISG counterpart regarding the effectiveness of a notice or other communication of intention between the parties.

II. Time when a communication "reaches" the addressee: CISG Art. 24; UP Art. 1.9

Article 24 of the Convention provides that the communication of offer and acceptance, i.e., any indication of the intention of the parties in the context of contract formation under the CISG, reaches [6] the addressee "when it is delivered to him, not when it is dispatched."[7]

Consequently, an offer (Art. 15) or an acceptance (Art. 20) may be withdrawn if the withdrawal reaches the other party before or at the same time as the respective offer or acceptance that is being withdrawn.[8]

The UNIDROIT Principles, in Art. 1.9(2), also adopt the "receipt" principle to validate the effect of a notice or other communication when "it reaches the person to whom it is given." The Official Commentary on UP Article 1.9 explains that a 'notice "reaches" a person when given to that person orally or delivered at that person's place of business or mailing address.'[9]

It must be noted that the Principles apply this rule [10] to all notices,[11] whereas the wording of CISG Art. 24 apparently limits the application of the latter provision to Part II of the Convention.[12] However, this difference may not be significant.  See "IV. Relevance to other provisions of the Convention", infra.

III. Delivery to addressee's place of business or mailing address

Article 24 of the Convention makes clear that the point of time at which a communication reaches the addressee is when it is delivered "to him personally, to his place of business or mailing address."[13] [14] This would require that a delivery [15] of the communication is made – orally [16] or by other means [17] – either to an appropriate place or to an authorized employee of the addressee.[18] There are no apparent problems regarding either the geographical location [19] of such an appropriate place or an appropriately authorized agent [20] of the addressee.

As an exception applicable only in cases where the addressee has neither a place of business nor a mailing address, a communication reaches the addressee on delivery to his habitual residence.[21]

Article 1.9(3) of the Principles, like its CISG counterpart, provides that a notice "reaches" a person "when given to that person orally or delivered at that person's place of business or mailing address."

Furthermore, the Principles, like the CISG, make a distinction between oral and other communications.[22]

IV. Relevance to other provisions of the Convention

Based on a literal interpretation of the wording in Art. 24, it seems that the provision is applicable only to indications of the respective parties' intention in the context of contract formation governed by Part II of the Convention.[23] In that respect, the relevant provision may be contrasted with and distinguished from the general rule in Part III of the Convention which provides that notices and other communications are effective when they are dispatched.[24]

Several commentators have, however, observed that the provision in Art. 24 may be applied more broadly and by analogy to other communications between the parties, outside the narrow context of Part II of the Convention.

A principal commentator on the CISG, Professor Honnold states:

"The definition in Article 24 [...] of when a communication 'reaches' the addressee applies only to Part II, but there is no indication of a legislative intent to reject the approach of Article 24 in construing [...] references to the 'receipt' of communications. Indeed, the normal meaning of 'receipt' is close to that expressed in Article 24; the widespread use of the approach of Article 24 [...] seems to justify the use of this article by analogy" (references omitted).[25]

Furthermore, the case law provides some support for such an analogical application of Art. 24 to other provisions of the Convention in CISG Part III. Examining the effectiveness of communications exchanged between parties to a contract governed by the CISG, a Dutch court adopted an analogous approach to determine whether a letter -- dispatched by the German seller to the address previously provided by the Dutch buyer -- demanding payment for the goods did "reach" the addressee, even though the buyer never actually received the letter because he had moved to another address.[26]

V. Conclusion

Both Art. 1.9 of the UNIDROIT Principles and Art. 24 of the Convention define the point of time at which a communication reaches the addressee.

The counterpart provisions adopt the same "receipt" principle, make the same distinction between oral and other communications, and provide similar definitions of the relevant concepts.

Neither instrument, however, provides any further guidance on the precise time that a communication reaches the addressee effectively.[27]

The only perceptible distinction of significance between the counterpart provisions is that the Principles apply the rule in Art. 1.9 to all notices exchanged between the parties, whereas Art. 24 of the Convention appears to be limited only to communications for the purposes of CISG Part II.

There is, however, CISG jurisprudence and doctrine in support of extending by analogy the definition of when a communication "reaches" the addressee under CISG Part II to other communications between the parties, observing that the reasoning that underlies Art. 24 is equally applicable to provisions in Part III of the Convention, too.


FOOTNOTES

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

1. There are eleven provisions of the Convention dealing with contract formation; see CISG Part II, Arts. 14 – 24.

2. See CISG Art. 15(1) (offer), Art. 15(2) (withdrawal of offer), Art. 16(1) (revocation of offer), Art. 17 (rejection of offer), Art. 18(2) (acceptance), Art. 20(1) (fixed time limit for acceptance), Art. 21 (late acceptance), Art. 22 (withdrawal of acceptance).

3. Honnold J.O., Uniform Law for International Sales, Kluwer Law International, 3rd ed. (1999), at 201.

4. See 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/ziegel24.html>, Comment 1: "Art. 24 is a definition section and is a necessary complement to the Convention's adoption of the reception rule to determine the time of effectiveness of acceptances and other communications."

5. See Chapter 2 of the UNIDROIT Principles dealing with the rules of contract formation: Arts. 2.1 - 2.22.

6. 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 on the interpretation of Art. 24, the Opinion states: 'The term "reaches" corresponds to the point in time when an electronic communication has entered the addressee's server, provided that the addressee expressly or impliedly has consented to receiving electronic communications of that type, in that format, and to that address.'

7. See the Text of the Secretariat Commentary on article 22 of the 1978 Draft [draft counterpart of CISG article 20], Comment 1, available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-24.html>.  Art. 22 of the 1978 Draft and Art. 24 of the CISG are worded in almost identical terms, except for some inconsequential re-wording. See the Legislative history of CISG article 22: Match-up with 1978 Draft to assess relevance of Secretariat Commentary, available at <http://cisgw3.law.pace.edu/cisg/text/matchup/matchup-d-24.html>: "The Secretariat Commentary on 1978 Draft article 22 remains relevant to CISG article 24.  There is a drafting change (a reference to 'this Part of the Convention' rather than 'Part II of this Convention') and an added emphasis ('delivered... to him' has become 'delivered...to him personally')."

8. Secretariat Commentary, op. cit., Comment 2. "Furthermore, an offeree who learns of an offer from a third person prior to the moment it reaches him may not accept the offer until it has reached him. Of course, a person authorized by the offeror to transmit the offer is not a third person in this context." Ibid.

9. See the Official UNIDROIT Commentary on Article 1.9, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni24.html#official>, Comment 2 states: "With respect to all kinds of notices the Principles adopt the so-called 'receipt' principle, i.e. they are not effective unless and until they reach the person to whom they are given. For some communications this is expressly stated in the provisions dealing with them: see Arts. 2.3(1), 2.3(2), 2.5, 2.6(2), 2.8(1) and 2.10. The purpose of para. (2) of the present article is to indicate that the same will also be true in the absence of an express statement to this effect: see Arts. 2.9, 2.11, 3.13, 3.14, 6.1.16, 6.2.3, 7.1.5, 7.1.7, 7.2.1, 7.2.2, 7.3.2 and 7.3.4."

10. Cf. Official UNIDROIT Commentary, op. cit., Comment 3: "Dispatch principle to be expressly stipulated. The parties are of course always free expressly to stipulate the application of the dispatch principle. This may be appropriate in particular with respect to the notice a party has to give in order to preserve its rights in cases of the other party's actual or anticipated non-performance when it would not be fair to place the risk of loss, mistake or delay in the transmission of the message on the former. This is all the more true if the difficulties which may arise at international level in proving effective receipt of a notice are borne in mind."

11. UP Art. 1.9(4): "For the purpose of this article 'notice' includes a declaration, demand, request or any other communication of intention." Cf. CISG Art. 24: "For the purposes of this Part of the Convention, an offer, declaration or any other indication of intention ..."

12. Cf. CISG Art. 24: "For the purposes of this Part of the Convention ..." (emphasis added).

Cf. Ziegel, op. cit., Comment 2: "Where an offeror has evinced an intention that an offer must be accepted in a given way presumably, that will be sufficient to override the presumptive effect of art. 24. See [CISG] art. 6" (emphasis added). Ibid.

13. Secretariat Commentary, op. cit., Comment 3. "In such a case it will have legal effect even though some time may pass before the addressee, if the addressee is an individual, or the person responsible, if the addressee is an organization, knows of it" (emphasis added). Ibid.

14. See Schlechtriem P., Uniform Sales Law – The UN-Convention on Contracts for the International Sale of Goods, Manz, Vienna (1986) 49 n.156,  available online at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem.html>: " 'Mailing address' means the place where mail is received, such as a mail box, but not an address that has been changed - such as by a move - and not yet corrected."

15. Enderlein F. and Maskow D., International Sales Law, Oceana Publications (1992) 108, Article 24, Comment 4, available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html>: "Delivery does not mean that the addressee has taken cognizance of the statement. The communication, however, needs to have reached his area of receipt or disposal, and it needs to have been 'recognizable'. It would not be sufficient if it were left in an unattended place or on the door steps" (references omitted).

16. See Schlechtriem, op. cit., at 50: "For oral declarations, however, the theory of cognizance should apply under Article 24, i.e., the declaration must have been perceived by the addressee."

See also CISG-AC Opinion no 1, op. cit.: "The term 'orally' includes electronically transmitted sound and other communications in real time provided that the addressee expressly or impliedly has consented to receive electronic communications of that type, in that format, and to that address."

17. See Schlechtriem P., op.  cit. at 49: "Article 24, like ULF Article 12(1) and the German Civil Code, provides that a 'materialized' expression of intent has reached the addressee when it reaches his sphere of control - or, in more concrete terms, when it is delivered to him. Delivery should occur preferably in person, alternatively to the place of business or mailing address, and finally to the habitual residence. Even though the Convention, unlike ULF Article 12(2), does not specify that the declaration must have been 'intelligible' for the delivery to be effective, the requirement presumably applies to the Convention as well" (references contained therein are omitted). Cf. CISG Art. 27.

Cf. UP Art. 1.9(1): "Where a notice is required it may be given by any means appropriate to the circumstances" (emphasis added).

18. See Honnold, op. cit., at 201, where the author states: "Leaving a letter or telegram on the door-step or in some other unattended place would not constitute 'delivery' to the addressee's 'place of business'; one relying on such a communication would need to show that the letter or telegram reached the addressee or an authorized employee."

19. Secretariat Commentary, op. cit., Comment 5: "There are no geographical limitations on the place at which personal delivery can be made . . . In fact such delivery is often made directly to the addressee at some place other than his place of business. Such delivery may take place at the place of business of the other party, at the addressee's hotel, or at any other place at which the addressee may be located."

20. Secretariat Commentary, op. cit., Comment 6: "Personal delivery to an addressee which has legal personality includes personal delivery to an agent who has the requisite authority. The question as to who would be an authorized agent is left to the applicable national law." See also Enderlein and Maskow, op. cit, at 108, Comment 6: "Delivery to the addressee and deliveries to his statutory representative or agent have equal status."

21. Cf. CISG Art. 10(b) (definition of "place of business"). See also Secretariat Commentary, op. cit., Comment 4: "As with an indication of intention delivered to the addressee's place of business or mailing address, it will produce its legal effect even though the addressee may not know of its delivery."

22. See the Official Commentary on UP Art. 1.9, op. cit., Comment 4, which explains: "It is important in relation to the receipt principle to determine precisely when the communications in question 'reach' the addressee. In an attempt to define the concept, para. (3) of this article draws a distinction between oral and other communications. The former 'reach' the addressee if they are made personally to it or to another person authorized by it to receive them. The latter 'reach' the addressee as soon as they are delivered either to the addressee personally or to its place of business or mailing address. The particular communication in question need not come into the hands of the addressee. It is sufficient that it be handed over to an employee of the addressee authorized to accept it, or that it be placed in the addressee's mailbox, or received by the addressee's fax, telex or computer."

23. CISG Art. 24: "For the purposes of this Part of the Convention ..." (emphasis added).

24. Part III of the Convention, entitled "Sale of Goods", comprises CISG Arts. 25 - 88. In Part III, the general rule is that a communication is effective from the time of its dispatch and the risk of non-arrival or late arrival lies with the recipient, see CISG Art. 27. Note, however, the exceptions to the dispatch rule: CISG Art. 47(2) (Buyer's receipt of notice from seller that he will not perform within the additional period fixed); Art. 48(4) (Buyer's receipt of notice from seller requesting that buyer make known whether he will accept cure after date of delivery), Art. 63(2) (Seller's receipt of notice from buyer that he will not perform within the additional period fixed), Art. 65 (Buyer's receipt of notice from seller supplying missing specifications), Art. 79(4) (Receipt of notice of impediment affecting a party's ability to perform).

25. Honnold, op. cit., at 202.

See also Farnsworth E. Allan, in Bianca C.M. and Bonell M.J. eds. Commentary on the International Sales Law, Milan: Giuffrè (1987) pp. 203-204.: "... Since Article 24 is expressly limited to 'the purposes of this Part of the Convention', it does not literally apply to [cited articles in Part III]. However, the reasoning that underlies Article 24 is equally applicable to those articles. Furthermore, the analogy between the time when a communication 'reaches' an addressee under Part II and the time when there is 'receipt' of a communication under Part III is striking. These reasons justify extension of the principle of Article 24 to Part III" (further references omitted). For a similar conclusion on point, see Enderlein and Maskow, op. cit. at 108, Art. 24, Comment 1: "The definition of 'reaches' may be applied analogously in those cases."

See also Kritzer A.H., Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, Kluwer, (1988) 196, where the author recognized that particular issue and suggested the following: "Because a communication that 'reaches' the addressee when it is delivered to his place of business or mailing address ... will have legal effect even though some time may pass before the addressee ... knows of it ... even though the addressee may not know of its delivery ... a prudent response to application of Article 24 concepts to Part III of the Convention is the use of a contract clause which identifies by position title, parties to whom notices or other communications must be addressed" (references omitted).

26. See Netherlands 5 October 1994 District Court Amsterdam (Tuzzi Trend Tex Fashion v. Keijer-Somers), available online at <http://cisgw3.law.pace.edu/cases/941005n1.html>. German law was applicable to the contract between the parties. Germany was a CISG Contracting State in 1991; therefore, the Convention applied pursuant to CISG Art. 1(1)(b). Under German law a declaration of one party is effective only when it reaches the addressee (German Civil Code, Section 130). Pursuant to Art. 24 CISG, a declaration "reaches" the addressee when it has been delivered to his place of business or mailing address. The court held that the relevant communication in question (i.e., seller's letter demanding payment for the goods) had reached the buyer.

For an editorial comment on that case, see Kritzer A.H., available online at <http://cisgw3.law.pace.edu/cases/941005n1.html#ce>: "Commenting on the effectiveness of a communication [i.e., a letter from seller to buyer, demanding payment for the goods] that was mailed  to an address previously provided by the buyer but not received by the buyer because the buyer had moved to another address; the court stated: 'It is indeed decisive that the statement is received by the other party (according to German and Dutch law). But following article 24 of the CISG . . . a statement is received by a party if it is delivered to his place of business or mailing address. Therefore the [communication] has reached [the buyer].' "

27. The precise time that a communication reaches the addressee can be relevant, see Farnsworth, op. cit.

In that respect it has been suggested that the counterpart provisions of the United States Uniform Commercial Code provide a certain type of guidance on the precise time that a communication reaches the addressee under the CISG, see Kritzer, op. cit., at 197, where reference is made to UCC Section 1-201:

(26) A person "notifies" or "gives" a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it. A person "receives" notice or notification when (a) it comes to his attention; or (b) it is duly delivered at the place of business through which the contract was made or at any other place held out by him as the place for receipt of such communication.

(27) Notice, knowledge or a notice or notification received by an organization is effective for a particular transaction from the time when it is brought to the attention of the individual conducting the transaction, and in any event from the time that it would have been brought to his attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless such communication is part of his regular duties or unless he has reason to know of the transaction and the transaction would be materially affected by the information.


Pace Law School Institute of International Commercial Law - Last updated September 24, 2004
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