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Comparison between provisions of the CISG (Art. 20) and the
counterpart provisions of the UNIDROIT Principles of International Commercial Contracts (Art. 2.8)

John Felemegas [*]
August 2004

I.    Introduction
II.   Calculating the period for acceptance fixed by offeror
III.  Commencement of the period
        (a) CISG Art. 20(1)
        (b) UNIDROIT Principles [UP] Art. 2.8(1)
IV.  Effect of holidays and non-business days: CISG Art. 20(2); UP Art. 2.8(2)
V.   Conclusion

I. Introduction

Article 18 of the Convention provides that "[a]n 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 [...]."

It is an important element of certainty for parties who contemplate entering into a contract that there is a clear point of time at which the period fixed by the offeror for acceptance of the offer commences. In the case where the offeror fixes a precise date by which the offeree must accept the offer (e.g., "no later that 31 August"), there are no special problems regarding the period allowed for acceptance of the offer by the offeree. However, in the case where the offeror merely indicates a period of time for acceptance (e.g., "ten days"), problems may arise as to when exactly that period begins, due to possible ambiguity and the uncertainty in whether the period starts to run from the time the communication was prepared by the offeror, the time it was sent, or the time it was received by the other party.

II. Calculating the period for acceptance fixed by the offeror

In Part II of the Convention, entitled "Formation of the Contract", Article 20 deals with the interpretation of the offeror's time-limits for acceptance of an offer to conclude a contract.[1] CISG Article 20 provides a mechanism [2] for calculating when that period begins to run in cases where the commencement of the period of time during which an offer can be accepted by the offeree has not been expressly fixed by the offeror.[3]

The UNIDROIT Principles in Chapter 2, entitled "Formation", include Article 2.8, entitled "Acceptance Within a Fixed Period of Time", which is a similar provision dealing with the calculation of the time for acceptance of an offer.[4]

III. Commencement of the period

     (a) CISG Art. 20(1)

CISG Art. 20 makes a distinction in the rules for calculating the period of time available for acceptance,[5] depending on the means of communication used by the offeror to communicate the offer to the offeree.

(i) Non-instantaneous means of communication

CISG Art. 20(1), sentence one, provides that the period of time for acceptance fixed by the offeror in a telegram "begins to run from the moment the telegram is handed in for dispatch."

If the period of time for acceptance is communicated to the offeree by letter, the time runs "from the date shown on the letter, or if no such date is shown, from the date shown on the envelope."[6]

In other words, the CISG adopts the moment of dispatch of the communication as being effective.[7]

(ii) Instantaneous means of communication

CISG Art. 20(1), sentence two, provides that if the period of time for acceptance is communicated by "telephone, telex or other means of instantaneous communication," the period "begins to run from the moment that the offer reaches the offeree".[8]

In such instances where instantaneous means of communication are used, the moments of dispatch and receipt of the communication occur almost simultaneously.[9]

     (b) UNIDROIT Principles Art. 2.8(1)

Art. 2.8(1) of the UNIDROIT Principles, like its counterpart provision in the CISG, makes a distinction depending on the means of communication used by the offeror to communicate the offer to the offeree. Furthermore, the Principles adopt the same rules used in the Convention.

(i) Non-instantaneous means of communication

The wording in UP Art. 2.8(1), sentence one, is identical to that used in CISG Art. 20(1), sentence 1.

As does the rule contained in CISG Art. 20(1) regarding non-instantaneous means of communication, UP Art. 2.8(1) provides that

"A period of time for acceptance fixed by the offeror in a telegram or a letter begins to run from the moment the telegram is handed in for dispatch or from the date shown on the letter or, if no such date is shown, from the date shown on the envelope."

(ii) Instantaneous means of communication

The wording in UP Art. 2.8(1), sentence two, is substantively identical to that used in CISG Art. 20(1), sentence 2.[10]

As does the rule contained in CISG Art. 20(1) regarding non-instantaneous means of communication, UP Art. 2.8(1) provides that

"A period of time for acceptance fixed by the offeror by means of instantaneous communication begins to run from the moment that offer reaches the offeree."

IV. Effect of holidays and non-business days: CISG Art. 20(2); UP Art. 2.8(2)

The counterpart provisions in CISG Art. 20(2) and in UP Art. 2.8(2) dealing with the effect of holidays and non-business days contain identical rules and are phrased in identical wording.

The basic rule adopted in both the Convention and the Principles provides that official holidays and non-business days occurring during the period fixed for acceptance are included in calculating the period.[11]

Where the notice or acceptance cannot be delivered on the last day of the period fixed for acceptance-reply, because it falls on a holiday or non-business day at the place of delivery (i.e., at the place of the offeror-addressee, as the case may be),[12] both counterpart provisions grant an extension of the period until the first business day which follows.[13]

V. Conclusion

The provisions dealing with the calculation of the time fixed by the offeror for acceptance of an offer under the Convention and the UNIDROIT Principles share the same rationale (i.e., the creation of certainty for the parties contemplating entering into a contract), adopt the same solutions to the problem they address (i.e., by providing rules based first on objective evidence of dispatch, whenever such evidence is available) and they are worded in almost completely identical terms.

It is concluded that the counterpart provisions are substantively identical.[14]


FOOTNOTES

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

1. CISG Art. 20 is situated among the eleven provisions of the Convention dealing with contract formation; see CISG Part II, Arts. 14 - 24.

2. Honnold J.O., Uniform Law for International Sales, Kluwer Law International, 3rd ed. (1999), at 193-4 notes: "Article 20 is merely a guide to interpreting the offeror's statements. [...] Article 20 [...] plays the modest role of answering questions concerning the meaning of the offer when no answer is provided by the usual rules for interpreting the statements of the parties." For the Convention's rules on the interpretation of statements or other conduct of the parties, see Art. 8 of the CISG.

3. See the Text of the Secretariat Commentary on article 18 of the 1978 Draft [draft counterpart of CISG article 20], available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-20.html>. Art. 18 of the 1978 Draft and Art. 20 of the CISG are worded in almost identical terms, except for some inconsequential re-wording. 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-20.html>: "The Secretariat Commentary on 1978 Draft article 18 remains relevant to CISG article 20. An 'an' was replaced by a 'the' in paragraph (1) and paragraph (2) contains various word changes and a re-positioning. However, all are drafting modifications and none effect changes in the substantive contents of the text."

See also Enderlein and Maskow International Sales Law, Oceana Publications (1992) 102; also available online at <http://www.cisg.law.pace.edu/cisg/biblio/enderlein.html>, Art. 20, Comment 1: "The objective of this rule is for the two parties to find identical bases for the calculation of that period."

4. UP Art. 2.8 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 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/ziegel21.html>, where the author states: "[CISG Art. 20] Paragraph (1) provides some sensible rules to determine the commencement of the period of time during which an offer can be accepted and appears to be unobjectionable from a common law point of view."

6. The Secretariat Commentary on Article 18 of the 1978 Draft [draft counterpart of CISG Article 20], op. cit., explains that "[t]his order of preference was chosen for two reasons: first, the offeree may discard the envelope but he will have the letter available as the basis for calculating the end of the period during which the offer can be accepted and second, the offeror will have a copy of the letter with its date but will generally have no record of the date on the envelope. Therefore, if the date on the envelope had not been checked, the offeror could not know the termination date of the period during which the offer could be accepted." Comment 3, ibid.

7. See Enderlein and Maskow, op. cit., Comment 1, where the authors also note that "the moment of dispatch is generally easier to prove than the moment of receipt."

8. Cf . CISG Art. 24: 'For the purpose of this Part of the Convention, an offer, declaration of acceptance or any other indication of intention "reaches" the addressee when it is made orally to him or delivered by any other means to him personally, to his place of business or mailing address or, if he does not have a place of business or mailing address, to his habitual residence.'

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. 20(1), the Opinion states: "A period of time for acceptance fixed by the offeror in electronic real time communication begins to run from the moment the offer enters the offeree's server. A period of time for acceptance fixed by the offeror in e-mail communication begins to run from the time of dispatch of the e-mail communication. 'Means of instantaneous communications' includes electronic real time communication. The term 'reaches' is to be interpreted to correspond to the point in time when an electronic communication has entered the offeree's server."

9. It is considered that an offer could be made by electronic means of three different types: (1) offers in e-mail, (2) offers at passive web sites, and (3) offers at chat sites where communication occurs in real time. CISG-AC Opinion no 1, op. cit., Comment 20.2.

Note, however, that not all electronic means are regarded as "instantaneous" means of communication.

Regarding offers in e-mail, see CISG-AC Opinion no 1, Comment 20.3: "E-mail is not instantaneous communication and, with respect to dating, it is not wholly equivalent to letters sent in envelopes. CISG does not provide any interpretative help with respect to e-mails and uncertain situations must be solved by ordinary means of interpretation taking into account that the party being unilaterally bound (the offeror) normally deserves more protection. E-mails normally produce information about when they were sent and when they were received. CISG provides no direct guidance as to whether the time span starts to run from the time of sending or receiving. A period of time for acceptance fixed by the offeror in e-mail communication begins to run from the time of dispatch of the e-mail communication. This is so because this time can be easily ascertained and e-mails can be seen as functional equivalents of letters." Ibid.

Regarding offers in passive web sites, see Comment 20.4: "When offers are contained in web sites it is often uncertain whether they constitute offers in the legal sense. However, the web site holder may explicitly state that his offer is binding during a certain period of time. No guidance can be found in CISG where the web site holder has provided a time limit of three days without specifying from when the time limit starts to run. Uncertain situations must be solved by ordinary means of interpretation taking into account that the party being unilaterally bound (the offeror) normally deserves more protection. This opinion does not cover non-real time communication over passive websites." Ibid.

Regarding offers in real time chat sites, see Comment 20.5: "Parties may communicate over the Internet by real-time communication (this is common for chat-programs). The technique is such that if the sender writes an 'a' the letter 'a' immediately appears on the addressee's screen. The parties are both present at the same time and they may talk orally or write to each other just as if they were present in the same room or were talking over the phone. This type of communication qualifies as 'instantaneous'. CISG Art. 20(1) applies also to electronic communication in real time. If the sender sends an offer and stipulates that it is binding for two hours, the period starts to run from the point in time when the message reaches the addressee, i.e. immediately. For real-time communication it is assumed that the addressee has indicated his willingness to receive electronic messages of the relevant type." Ibid.

For further comments on the impact of electronic communications on Art. 20(1) and other provisions of the Convention, see Siegfried Eiselen, "Electronic commerce and the UN Convention on Contracts for the International Sale of Goods (CISG) 1980", 6 EDI Law Review (1999) 21-46, also available online at <http://cisgw3.law.pace.edu/cisg/biblio/eiselen1.html>.

10. The only difference in the wording of the counterpart provisions is that CISG Art. 20(1), sentence two, reads: "A period of acceptance fixed by the offeror by telephone, telex or other means of instantaneous communication [...]" (emphasis added); whereas, UP Art. 2.8(1), sentence two, reads: "A period of acceptance fixed by the offeror by means of instantaneous communication [...]". It is arguable that the additional words " telephone, telex or other ..." used in CISG Art. 20(1) do not add anything of substance to the interpretation or the application of the CISG provision that is not already covered by the more economical phraseology used in its UP counterpart.

11. See Enderlein and Maskow, op. cit., Comment 5, where the authors state that "[o]nly holidays or non-business days at the place of business of the offeror are being taken into consideration because those may not be known to the offeree".

12. See Enderlein and Maskow, ibid. : "If, however, the last day of the period falls on a holiday at the place of business of the offeree and the offeree is prevented from dispatching an acceptance, he has to take this into account and hand in his acceptance for dispatch earlier."

13. See Schlechtriem P., Uniform Sales Law - The UN-Convention on Contracts for the International Sale of Goods, Manz, Vienna (1986) 55, also available at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem-21.html>, where the author states: "Legal holidays or non-business days generally have no influence on the calculation of the deadline (Article 20(2) sentence 1). Parties in international trade cannot be expected to adjust to the various national, regional, or local holidays [...] For the offeree's reply, however, when the acceptance could not be delivered to the offeror because of a holiday, sentence 2 allows an extension of the deadline for acceptance until the first following business day. This should not make the offeror uncertain because he must reasonably take into account the possibility that the other party would not know of a holiday which prevents delivery and, therefore, would take advantage of the entire period." See also Ziegel, op. cit., who states that this rule in CISG Art. 20(2) "is a logical corollary to the reception rule for acceptances adopted in art. 18(2). Since the acceptance is not effective until it reaches the offeror some provision is necessary where the last day for acceptance is a non-business day or an official holiday at the offeror's place of business. The practical effect of art. 20(2) appears to be to extend the period for acceptance by at least one day where the notice of acceptance cannot be delivered. It may of course be longer depending on the circumstances."

Cf. CISG Article 9, on the issue of international trade usages applicable to the contract.

14. See also the Official UNIDROIT Commentary, also available online at <http://cisgw3.law.pace.edu/cisg/principles/uni20.html#official>, which states that UP Art. 2.8 "corresponds to CISG Article 20."

For a comparison between CISG Art. 20 and the counterpart provisions of the Principles of European Contract Law, see Felemegas J., at <http://cisgw3.law.pace.edu/cisg/biblio/felemegas3.html>.


Pace Law School Institute of International Commercial Law - Last updated August 2, 2004
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