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Reproduced with permission of 16 Journal of Law and Commerce (Spring 1997) 315-344

Contract Conclusion under CISG [aa]

Mª del Pilar Perales Viscasillas [a]

  1. Introduction
  2. The Classical Theories About the Time of the Contract Conclusion
    A. Declaration theory
    B. Expedition of dispatch theory
    C. Receipt theory
    D. Information theory
  3. Moment of Acceptance under Article 24
  4. General Rule of Contract Conclusion: The "Reaching" Principle
    A. Indication of assent via written statements
    B. Indication of assent via oral statements
    1. Oral statements
    2. Effectiveness of the oral statements
    C. Indication of assent via conduct
  5. The "Reaching" Principle: Some Application Problems
    A. Acceptance arrives late due to bad faith or negligent conduct by either party
    B. Acceptance never arrives due to bad faith or negligence on part of addressee
  6. Exceptions to the General Rule
  7. Counter-offer and Battle of the Forms: Special Cases of Contract Conclusion under CISG?
    A. Counter-offer
    B. Battle of the forms
  8. Performance of the Contract Absent a Clear Moment of Acceptance
  9. Place of the Performance of the Contract
  10. Some Conclusions about Spanish Domestic Law

I. INTRODUCTION

The United Nations Convention on Contracts for the International Sale of Goods, also known as the 1980 Vienna Convention (hereinafter Convention or CISG), is presently part of the domestic law of about fifty countries.[1] This wide acceptance on the part of states with different social, legal, and economic systems demonstrates the considerable success achieved by the Convention. Part II of the Convention, dedicated exclusively to the conclusion of the contract by the meeting of two will declarations (offer and acceptance), is a typical example of compromise between Civil Law and Common Law systems. The most noticeable obstacles at the time of achieving the normative unification of the Sales Convention were the technical-legal confrontation between the Common Law countries and Civil Law countries.[2] [page 315]

Both systems meet in the Convention to demonstrate the formative problems of contract conclusion in its traditional decomposition into two will declarations (offer and acceptance). They also present clear divergences that seem, at first, impossible to solve. In fact, Part II of the Convention-formation-often makes evident a compromise between states with different legal principles: the open-price contracts (articles 14(1) and 55),[3] the revocability and irrevocability of the offer (article 16);[4] the [page 316] counter-offer (article 19);[5] and the Receipt Theory as the moment in which the written will declarations, including the contract conclusion, are effective (articles 23 and 24).[6] All of these articles show a perfect balance between the different principles that inspired the legal systems. The balance does not imply that the formation rules in the Convention (or the whole text of the Convention for that matter) were created on the basis of selecting the most appropriate common rules for the different legal systems. On the contrary, the Convention has its own specific system that clearly shows in some respects a legal compromise. However, the compromise was built on the basis of providing an international commercial exchange, which remains under the influence of the developed trade practices, under the shadow of a permanent application, and within an interpretation in accordance with the principles of uniformity, internationality, and good faith. [7] [page 317]

Article 7 tries to find the exact moment in which an acceptance is effective under the rules of Part II of the Convention. One of the most arduous tasks ever encountered by the drafters of the Convention was defining the moment at which the contract is concluded. Since the beginning of the international attempt at unification of sales contract law, there have been two separate projects dealing with the substantive matters of that contract. One was dedicated to the formation of contracts, and the other was related to performance of contracts.[8] The main reason for a double unification process was the impossibility of compromising about the moment in which the contract should have been deemed concluded, particularly because a large disparity exists between the different legal systems in this matter. Nevertheless, article 12 of the 1958 Rome Draft Project (Project) [9] specified that the conclusion of the contract was the moment in which the acceptance was communicated to the offeror. Under article 10, to "communicate" meant to deliver the message at the address of the person to whom the communication is directed. The 1958 Rome Draft Project was not 100% accurate in defining the precise moment of the contract conclusion. Following the project, the drafters of the 1964 Hague Uniform Law on Formation of International Sales Contract (hereinafter ULF) [10] argued about the necessity to add an article which would [page 318] indicate the exact moment of contract conclusion. They finally achieved their objective (articles 8 and 12) by copying the articles of the Rome Draft. Contract conclusion under the Convention has not suffered many changes, but there is no doubt about the utility of Part II of the Convention dedicated to the formation of the contract.

II. THE CLASSICAL THEORIES ABOUT THE TIME OF THE CONTRACT CONCLUSION

The moment in which the contract is concluded is typically analyzed by the use of four theories; most of them are adopted by some legal systems. These theories are:

A. Declaration Theory [11]

Under the Declaration Theory, the contract is concluded when the offeree writes his acceptance. Because a communication that is not addressed to a specific addressee is considered a mere internal will declaration, this theory was not accepted in the Convention.

B. Expedition or Dispatch Theory [12]

Under the Expedition or Dispatch Theory, the contract is formed when the offeree sends his acceptance to the offeror. The consequence of this Theory is that the risk of transmission is born by the offeror.[13] The Convention adopted the Expedition Theory as an exception to the Receipt Principle [14] while the Spanish Commercial Code adopted the theory [page 319] in order to determine when contracts are formed.[15] This theory has been adopted in other countries as well.[16]

C. Receipt Theory [17]

Unlike the theories previously discussed, the Receipt Theory requires the reception of the will declaration in order for a contract to be formed. The Vienna Convention adopted the Receipt Theory as the general rule to all written will declarations and any form of communication found in Part II.[18] In Common Law systems, it is well established that the mailbox rule is not applicable when the offeree uses means of communication other than the mail or telegraph,[19] the Receipt Theory is used to determine contract formation when the offeree uses means of instantaneous communication,[20] such as the fax,[21] telex,[22] Electronic Data Interchange [23] and Electronic Mail. This theory has been adopted in other countries as well.[24] [page 320]

D. Information Theory [25]

The Information Theory is the most strict of the contract formation theories because it requires knowledge of the acceptance for a contract to be formed. The Vienna Convention adopted the Information Theory for oral contract formation.[26] In Common Law systems, an oral contract is formed when the offeror hears the acceptance.[27] The Spanish Civil Code adopts the Information Theory to fix the moment of civil contract formation.[28] The Information Theory has also been adopted in Venezuela.[29]

III. MOMENT OF ACCEPTANCE UNDER ARTICLE 24

As stated above, the Convention adopts the Receipt Theory as a general rule. Contracts are "concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention."[30] It must be noted that the Convention gives the offeree the opportunity to withdraw his declaration if the withdrawal reaches the offeror before or at the same time the acceptance would have become effective.[31]

Article 23 was drafted because several articles of Part I (General Provisions) and Part III (Sale of Goods) are related to the time of the contract conclusion.[32] Although article 23 is a central provision in Part II (Contract Formation), it should be viewed in conjunction with other provisions [page 321] that establish the precise moment in which various forms of assent take effect.

The most important provision in Part II connected to article 23 is article 18(2). The article states the general rule of contract conclusion: "An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror."[33] According to article 24, an assent 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."[34] The moment a communication "reaches" the addressee the acceptance becomes effective. In this note, all references to article 24 are in reference to contract conclusion. However, it should be noted that article 24 applies equally to all provisions under Part II of the Convention.

There are some exceptions to the Receipt-Information Theories. Some of the provisions in Part II adopt the Dispatch Principle.[35] Some of them include, inter alia : the dispatch of the acceptance through acts of performance [36] or by letter or telegram as a time limit to the general rule of revocation until the contract conclusion;[37] acceptance through acts of performance;[38] the beginning of the period of time for acceptance fixed in a letter or a telegram;[39] and late acceptance.[40]

The term "reaches" in the Convention has a similar meaning to the term "receives" in 1-201 of the Uniform Commercial Code (UCC) [41] of the United States. Likewise, in the German legal system, "receives" parallels zugehen.[42] Generally speaking, that term is similar to the Receipt Theory for written statements and the Information Theory for oral statements under the Spanish legal system.

The Convention demands a personal communication to the addressee, or the delivery of the communication to his place of business or [page 322] mailing address or, lastly, when the previous places do not exist, to his "habitual residence."[43] Therefore, if the offeror has more than one postal address, the address with the closest relationship to the contract and its performance would be the most appropriate. If the parties have not agreed on any place expressly, through usages or otherwise then Article 24 is applied and delivery to the habitual residence becomes valid. In practice, this is an infrequent occurrence.

The possibility exists that the address given by the offeror does not coincide with any of the places listed in article 24. For example, if the offeror has agreed with another company to receive his messages by fax but does not have a fax, the communication becomes effective upon receipt at the address. The message need not "reach" the offeror in order to be effective.

A communication can "reach" a party through receipt by third persons. The third person must be an authorized representative of any of the parties.[44] Convention scholars agree that problems related to sufficient representation of power in accordance with the domestic non-uniform law, which would be applied because representation is a question of validity, should be solved.[45] Lastly, a communication to a third party would [page 323] be satisfied by article 24 in the same manner as if the communication had been direct in relation to the places appropriated to receive a communication.[46]

By virtue of analogy, article 24 extends its sphere of application to some provisions that form the exceptions to the general rule to make up some of Part III of the Convention.[47] During contract performance, the risk that a communication will be delayed is governed by article 27. Any delay of communication will not deprive the sender the right to rely on the communication as if it was received. Thus, even though article 27 does not expressly state that the communications are effective from their dispatch, the result is the same because even if the communication never arrives, it is still effective.[48] Nevertheless, under some circumstances, for the sake of establishing a just balance between the parties, the communications must be received by the addressee in order to be effective.[49] The exceptions to the Receipt Theory in Part II of the Convention have the same raison d'être as the exceptions to the Dispatch Principle in Part III. These exceptions attempt to alleviate the risk of transmission of communications for the party who has complied with his obligations.

Finally, the Principles of International Commercial Contracts prepared recently by the UNIDROIT (hereinafter UNIDROIT Principles or Principles [50]), and in particular article 1.9 (Notice), follow the rule adopted by article 24 of the Convention. The Principles adopt "reaching" [page 324] as a general rule applicable to all kinds of communications.[51] Nevertheless, because article 1.9 is located in the general provisions section, the "reaching" principle applies to the formation period as well as to the period of performance of the contract. The difference between the Convention and the Principles is clear; the Principles adopt the "reaching" principle as a general rule of contract performance while the Convention adopts Dispatch Principle as a rule governing contract performance.

IV. GENERAL RULE OF CONTRACT CONCLUSION: THE "REACHING" PRINCIPLE

The Convention's flexible and broad definition of CISG article 24 seems to adopt the Receipt Theory as a general rule applicable to written statements and the Information system as a rule applicable to oral statements. The "reaching" principle is applied to indicate assent in the following ways:

A. Indication of Assent via Written Statements

Written declarations are most often used by the offeree to show his assent with the offer. Written statements can be made by letter, telegram, telex, fax, Electronic mail (E-mail), Electronic Data Interchange (EDI) or any other form of "writing."[52] The contract is concluded when the communication "reaches" the offeror in his place of business: by delivering the communication via messenger; by printing the fax; by leaving the letter in the mailbox; by delivering notice that a letter or telegram has arrived at the post office,[53] or by depositing the message in the electronic or informatic mailbox.[54] [page 325]

The Convention's election of the Receipt Theory to govern written statements is the most logical choice, despite several other legal systems' adoption of the Information Theory to govern written statements. Practical difficulties arise in establishing the offeror's knowledge of the communication in every case. Absent use of the Receipt Theory, the offeror may decide the time of the contract conclusion, at his convenience. Thus, any harm to the offeree caused by the offeror's ignorance of acceptance is prevented. This is inapplicable in the case of oral statements, so there is no inconvenience in adopting the Information system as the Convention does.

B. Indication of Assent via Oral Statements

1. Oral Statements

Oral statements connote those that use oral language not only in face to face negotiations, but also in communications by phone, radio, videoconference, and so on. Information communicated orally by a third person could be also considered as an oral statement.

Article 18(2) states that "an oral offer must be accepted immediately unless the circumstances indicate otherwise."[55] This article should be interpreted to mean that the offeror may allow the acceptance to be made orally, but not immediately. Also, the use in article 18(2) of the word "oral," in conjunction with article 13 rules out instantaneous written communications made by telex, fax, EDI or E-mail despite a direct and immediate exchange of will declarations.[56]

An acceptance recorded on an answering machine or on tape cannot be included in the concept of an oral communication. Although oral, they do not conform to the rule that requires the simultaneous knowledge by the offeror after the dispatch of the acceptance.[57] Therefore, these forms of communications are effective when they reach the offeror and not when they are heard.[58] [page 326]

2. Effectiveness of the Oral Statements

Article 24 states that an oral communication reaches the addressee "when it is made orally to him." This expression is broadly drafted and unclear. An oral statement passes through the same stages as a written one: offer dispatched and received, acceptance dispatched and received. However the time between the stages is shortened in such a way that they follow one another almost simultaneously. Thus, the dispatch, receipt and knowledge of the oral statements are immediate. Nevertheless, determining the time of contract conclusion differs depending on the theory adopted. The consequences of these differences can be tremendous, in the field of international trade where the risks from misunderstandings are larger especially when the parties do not use the same language. The risks may be even more hazardous when the parties are not in each other's presence but use an alternative means of oral communication.

Because the Dispatch Principle is in general excluded from the Convention, either the Receipt Theory or the Information Theory will apply to oral contracts. Article 24 appears to adopt the Information system.[59] However, the drafting history suggests otherwise; during the drafting of article 24, a proposal to adopt the Information system was rejected.[60]

This problem can be overcome because the offeror needs knowledge of the acceptance in order to declare it effective. Therefore, the offeror must hear and understand the acceptant, regardless of exact and perfect understanding of it.[61] Article 8,[62] which is cemented in reason, in addition to an understanding of the international, uniformity and good faith principles of article 7,[63] must be taken into account when determining if the parties have knowledge of the oral statements. The offeror must act with due diligence. If the offeror does not understand something and does not ask for clarification, he cannot argue lack of knowledge because he did [page 327] not act diligently. On the other hand, if, while the message is being transmitted, the telephone line is cut, the acceptance must be repeated regardless of the offeror's diligence.[64]

In conclusion, requiring knowledge of an oral statement may be defended when it is reasonable and considered in context. Both parties must be wary of correctly communicating statements. This will lead to a careful understanding of the message content of the negotiations regardless of language barriers and both parties will comprehend the importance of clear and precise communication.[65]

C. Indication of Assent via Conduct

An acceptance may occur through some kind of behavior or conduct (e.g. raising a hand or nodding one's head). Such behavior leads to an acceptance with legal effect when the offeror understands the meaning of the conduct. A broad interpretation of article 24 would allow for such situations. Conduct also includes performance (e.g. dispatch of the goods or payment of the price). The performance shall "reach" the party in order to retain legal effect.

The Receipt Theory is evident in articles 18(1) and 18(2) despite the lack of express adoption of this theory in articles 23 and 24. One German court clearly held that a contract is concluded when performance by the seller is completed without objection from the buyer.[66] Scholars have not made any special effort to clarify the differences between the indication of assent made by acts of performance under article 18(1) and acts under article 18(3). Under article 18(3), performance is protected by offer, practices and trade usages.[67] In other words, an offeree can accept an offer without expressly communicating his acceptance, because the contract is concluded when he completes performance. On the other hand, if the offeree accepts the offer through performance without the factors contemplated in article 18(3) his indication of assent must reach the offeror in order to conclude the contract.[68] In both instances, the moment of contract conclusion differs.[69] [page 328]

V. THE 'REACHING" PRINCIPLE: SOME APPLICATION PROBLEMS

The "reaching" principle as defined in the previous pages presents some problems in its application:

First, when communication is delivered to a place different from those indicated in article 24, does delivery constitute a legally effective communication? Is it appropriate to leave a letter on a door-step, slide it under the door, or leave it in some other unattended place? These forms of delivery probably do not comply with the requirements of "reaching" under article 24.[70]

When a letter is sent by registered mail, the postal carrier will give it to the addressee or an agent, and at this precise moment the acceptance complies with the criteria of article 24. If the offeror's place of business is empty, the postal carrier will leave notice of the existence of a registered letter. This notice could be regarded as "receipt" of the acceptance, even if the addressee does not know of the existence of the letter.[71]

Second, if acceptance is delivered on the last possible day after business hours, is the acceptance effective? Acceptance is effective when it is delivered. However, delivery can be proved only in limited circumstances-such as delivery by EDI, E-mail, telex or fax, which indicate the delivery time. On the other hand, if the letter is delivered after business hours, delivery still may be effective because it was delivered prior to midnight. However, such a "late" delivery may not be legally effective if delivery is considered to have occurred the following day. If the time limit period for acceptance to the first business day when the last day of the period of performance falls on an official holiday or a non-business day.[72]

Third, the use of computer disks for acceptance is problematic because the offeror might not have the appropriate machine or software [page 329] with which to access it. Schlechtriem believes that this situation must be analyzed under the good faith and reasonableness principles.[73] The use of a particular computer program or language is a substantive question. Thus, if the parties have agreed on the use of a particular electronic program, or they have established a practice between themselves concerning the form of electronic communication, then that "language" should bind them. If no express or implicit agreement exists regarding electronic communication, then the person who sends a message by disk must assure the addressee's access to its content. In one German case, the court held that the contract was not concluded because the reply to the offer was made in a language different to that established during the negotiations.[74] Similarly, another German case indicated that the contractual conditions could not be imposed on one of the parties if they have been sent in a language different from the one used during the negotiations.[75]

Finally, it is important to note that the Convention does not expressly adopt a solution for all potential conduct which tends to impede the acceptance reaching the offeror's place of business. The Convention has only dictated some objective rules about the necessary requirements to comply with the Receipt Theory. Nevertheless, some general rules can be discerned as evidenced below.

Judges in Spain have successfully relaxed the rigid information theory, adopted by the Spanish Civil Code, [76] when its application has lead to anomalous results. In several cases, the Spanish Supreme Court (Tribunal Supremo Español) discarded the Information Theory when knowledge of the acceptance was not possible due to the negligent behavior or bad faith of the addressee.[77] For instance, if the offeror gives a wrong address, does not inform the offeree of an address change, is absent, or does not want to receive the communication, the Information Theory would be discarded and the Receipt Theory would govern.

Other legal systems have also adopted similar measures to avoid unjust results as a consequence of bad faith of one of the parties. In the Common Law systems, the Mailbox or Dispatch Rule is displaced by the [page 330] Receipt Theory when the offeree has not been diligent in dispatching the acceptance (insufficient postage, unclear address, etc.) or when the manner of acceptance is incorrect.[78] The result is the same under both the common and civil law systems: the rule is discarded when the circumstances surrounding the case-usually the bad faith or negligence of one of the parties-leads to absurd results.

The basic question-whether a communication has legal effect when it arrives or is received late due to some fault of the addressee or sender?-can be easily answered. The communication's effectiveness should be considered in light of article 24, which must be interpreted under the article 7(1) good faith principle, [79] and other general principles of the Convention.[80] Two situations aid in understanding the application of these Principles:

A. Acceptance arrives late due to bad faith or negligent conduct of either party

For example, the offeror gives an incorrect address to the offeree through bad faith or negligence causing a delay in the acceptance. Consequently the offeror is able to decide contract conclusion by accepting or rejecting the late acceptance. In this hypothetical, by virtue of the good faith principle permeating CISG, the contract is concluded with the delivery of the offeree's acceptance even though it was delivered after the offer lapsed.[81]

Other general principles of CISG could also result in contract conclusion. The negligent or bad faith behavior of a party that causes delays or impedes a communication will not prevent contract conclusion.[82] If communication is sent late due to the offeree's fault, contract conclusion is impeded.[83] However, when the delay is due to problems in the transmission [page 331] of the communication contract, conclusion is valid.[84] If, on one hand, the delay attributed to the offeree impedes the contract conclusion, and on the other hand, delay due to the means of communication does not impede contract conclusion, then contract conclusion would arguably be impeded when late receipt of the acceptance is exclusively attributed to the offeror.[85]

Secondly, "detrimental reliance" or "promissory estoppel" are two General Principles of the Convention that yield similar results.[86] These principles state that contracting parties are bound by their conduct and consequently cannot argue against their conduct. Therefore, if the communication of acceptance arrives late as a consequence of the offeror's mistakes, he cannot avoid contract conclusion because of the late arrival.[87]

B. Acceptance never arrives due to bad faith or negligence on the part of the addressee

When the offeror impedes the receipt of the communication-by disconnecting the phone line or failing to up-keep the fax, etc., the offeree is unable to communicate his acceptance. Consequently, the contract is not concluded because the Receipt Theory is not fully satisfied.[88] The offeree must try to establish a new communication, and if it arrives after the lapse of the offer, it may be deemed an effective acceptance.

VI. EXCEPTIONS TO THE GENERAL RULE

As previously stated, the general rule for contract conclusion is "at [page 332] the moment when an acceptance of an offer becomes effective."[89] This note already has shown the importance of the "reaching" principle in making an acceptance effective as exemplified by articles 28 and 24. As is the case with most rules, exceptions exist.

The recognition of silence or inaction as potentially effective acceptance under article 18(1) demonstrates the unimportance of communication.[90] Although silence and inaction are not applicable to any of the other classic theories such as the Dispatch or Mail Box rules,[91] silence and inaction may effect contract conclusion under CISG. Silence and inaction, in reality stand for the concession of legal effects to an abstention of the offeree. The moment of the conclusion of the contract by silence or inaction is diverse and hangs on the factors that contribute to their legal effect.

Silence or inaction are considered effective confirmations of contract conclusion if a certain length of time has passed. The offeror is given an option to confirm a late or modified acceptance through silence or inaction, thereby concluding the contract.[92] Article 19(2) states that the offeror must object to the modified acceptance "without undue delay" or the acceptance will be effective and conclude the contract.[93] If the offeror objects after the period of time has elapsed, then the objection is invalid, and the contract is concluded according to the terms in the modified acceptance. A similar scenario presents itself in article 21(2).[94] Thus, the interpretation of "without delay" will determine the moment of contract conclusion.

A usage or practice previously established between the parties, may specify the proper manner of acceptance.[95] If the manner specified includes silence or inaction, then a time period in which an express rejection must be given would also be expressly or impliedly determined by the usage or practice. Therefore, the effectiveness of the silence or inaction will be established by the expiration of the period of time previously [page 333] agreed on.[96]

Similarly, other circumstances may lead to a "duty to speak" in the negative. The expiration of the time in which the negative reply should have reached the offeror leads the offeree to concede to the offer.[97]

A second exception to the general "reaching" rule would fall under article 18(3).[98] Article 18(3) covers the situations in which the practices already established between the parties or the usages authorize the offeree to accept by acts of performance without communicating acceptance expressly to the offeror. In this case, the contract is concluded when the offeree performs the act specified in the practice or usage.[99] Notwithstanding the clear language of article 18(3), some scholars still believe that such an acceptance needs to be expressly communicated to be effective. The vast majority of scholars follow Professor Honnold's thesis that the need to communicate the acceptance forms part of a general principle of article 18(3). Of course, if performance under the usage or practice is delivery of the goods, and if the goods are received quickly enough, then the goods may substitute as an acceptance.[100]

However, Honnold's theory may not hold water in light of the legislative history. During the Diplomatic Conference held in March 1980 in Vienna, Professor Farnsworth proposed the introduction of an obligation to give notice of performance. The proposal was withdrawn for lack of support.[101] In general, the American scholars who demand notification in the cases governed by article 18(3) follow the same school of thought adopted by their own legal system. The method of indicating assent to an offer under the Vienna Convention-acceptance by statements or by acts-correspond to the distinction between bilateral contracts and unilateral contracts (offers requiring performance for conclusion) in the common law systems. In particular, UCC 2-206(1)(a) corresponds to article 18(1) of the CISG insofar as the manner of acceptance is left up to the parties.[102] Similarly, UCC 2-206(1)(b) parallels article 18(3) of the CISG because performance is a valid manner of acceptance.[103] Nevertheless, there is a difference between UCC 2-206 and article 18 of the CISG. When the acceptance is made through performance under article 18(3) of the CISG, there is no need to communicate that acceptance; but, under the UCC, the performance must be communicated when the period of time for the delivery of the goods is lengthy.

The last exception to the Receipt Theory in the Vienna text is the one contemplated by CISG article 21(1). Article 21(1) states that the contract is concluded when the offeror dispatches a notice (Dispatch Theory) informing the offeree of the effectiveness of his late acceptance, or when he orally so informs the offeree (Information Theory).[104] Apparently, article 21(1) adopts the Dispatch Theory to regulate the conclusion of the contract.[105] However, some scholars believe that the moment of contract conclusion under those circumstances is the receipt by the offeror of the late acceptance.[106] Nevertheless, the drafting history [107] and the language [page 336] of article 21 lead to the conclusion that the acceptance is effective when the offeror dispatches the notice of confirmation.

VII. COUNTER-OFFER AND BATTLE OF THE FORMS: SPECIAL CASES OF CONTRACT CONCLUSION UNDER CISG?

Due to the complexity of article 19 and the controversy created among scholars, a detailed explanation of the moment of contract conclusion under both counter-offer and the "battle of the forms" situations is necessary.

A. Counter-offer

According to article 19(1) a reply to an offer which does not exactly match the terms of the offer is a rejection and constitutes a counter-offer.[108] This concept constitutes the traditional principle known as the "mirror image rule."[109] Article 19(2) seeks to relax the "mirror image rule" by making a reply, which contains additional or different terms that do not materially alter the offer, a valid acceptance.[110] The dividing line between a material and a non material alteration can make or break an acceptance. Despite the list of terms which are considered material to the offer the distinction is difficult to make. The list of terms in article 19(3) is not comprehensive.[111]

The policy to promote uniformity and preserve agreements should lead to a restrictive interpretation of what constitutes a material alteration. The specific terms listed in paragraph 3 of article 19 should be read [page 337] narrowly in the interest of those policies.[112]

Probably, course of dealing and trade practices referred to in article 9 of the Convention, as well as previous negotiations and other elements of intent referred to in article 8, will play an important role in the interpretation of the materiality. There are also circumstances in which article 4(a) may come into play because validity issues can arise in connection with some of the terms listed in article 19(3). For example, if arbitration is the specified method in which to resolve disputes, the validity of the arbitration clause may turn on domestic law.[113] In a similar vein, domestic laws of unconscionability may impact the validity of a limitation liability clause.[114]

Rejection of the original offer, is deemed a counter-offer, which must comply with the requirements of article 14(1) of the Convention and must be accepted by the counter-offeree. Article 14(1) demands definiteness and intent to be bound.[115] Acceptance of a counter-offer is performed by indicating assent in the same manner described above. Thus, the counter-offeree can accept by statement or conduct. Usually, a counter-offer is accepted by performance of the contract pursuant to article 18(3) of the CISG.

B. Battle of the Forms

Article 19 of the Convention is applicable when a reply contradicts the terms of an offer. However, the same cannot be said about contradictory general clauses contained in the forms exchanged between the parties. The resolution of the "battle of the forms" is one of the most controversial questions under the Convention. Extreme differences exist among commentators about how to resolve this issue. In this scenario, two questions must be answered: (1) is there a contract? and (2) if so, what are the terms of the agreement?

One school of thought argues that the battle of the forms falls outside the scope of the Convention because the question revolves around the validity of the contract, which must be decided under the relevant [page 338] domestic law pursuant to article 4(a).[116]

Alternatively, other scholars argue that the problem should be solved by applying the norms that have evolved under the Convention, but some disagreement exists as to how and which norms should be applied.[117] The following are illustrative:

Some commentators are convinced that the "battle of the forms" is a gap-filling issue governed by the Convention.[118] They argue that the solution should be found in article 7 and that priority must be given to the general principles of CISG when deciding a question that is not expressly governed by the Convention. Under this approach, applying a good faith principle can lead to a solution similar to the United States knock-out rule of 2-207(3) of the UCC,[119] the German "partiell Dissens" rule of [page 339] articles 154 and 155 of the BGB,[120] or article 2.22 of the UNIDROIT Principles.[121] All of these result in the terms of the contract being those upon which the parties substantially agree, and the non-matching terms cancel each other out. In sum, the norms developed under part III of the Convention will govern them.

A second position is that the solution may be found under specific norms of the Convention, without resorting to the general principles of the Convention found in article 7. In the typical battle of the forms scenario, this is likely to lead to the application of the last shot rule.[122] The exchange of forms is comprehensively regulated by Part II (Formation of Contracts) of the Convention. A reply to an offer in a form containing material alterations is a rejection of the offer coupled with a new offer. The new offer could be accepted in any manner provided for in article 18, including silence, inaction, or even conduct. [123] Generally the contract [page 340] is concluded when the buyer accepts delivery of the goods, and the terms of the contract will be those of the counter-offer -- the terms of the party who fires the last shot wins the battle.[124]

The analysis of the legislative history is conclusive: the battle of the forms is a problem regulated by the Vienna Convention on formation. During the last stage of the legislative process of the Convention at the Diplomatic Conference held in Vienna, the Belgian delegation proposed to add a new paragraph to article 17 of the 1978 Draft Convention.[125] The text focused on regulating the content of the contract when a "battle of the forms" existed.[126] This amendment was also rejected.[127] The delegates agreed that the proposal could not be discussed in such advanced stage of the text of the Draft Convention. Additionally, some representatives strongly opposed the amendment because it was contrary to the law of contracts and because they believed the "battle of the forms" was resolved in the Draft Convention. [128] However, the Belgian proposal does not mean, as some scholars contend, that the "battle of the forms" is a gap-filling principle for the Convention, but, on the contrary, the failure of the proposal demonstrates that article 19 already covered the "battle of the forms" dilemma.

Logically then, the Vienna drafters, searching for certainty and secure legal objectives, decided to view will declarations as an offer and an acceptance, the latter usually satisfied through performance. Performance may be executed either by the seller or the buyer. Article 19 only applies when the reply departs from the offer. Articles 14(1) and 18(1) apply otherwise. However, a majority of the situations involving an exchange of forms will look similar to the following:

(a) The form, sent as a reply to an offer, deviates slightly from the offer; article 19(2) allows the contract to be concluded, or

(b) The reply to the offer has additional or different terms that materially alter the offer's terms; the reply cannot serve as an acceptance pursuant to article 19(1), but is a rejection and counter-offer instead. As a [page 341] new offer, it must be accepted to conclude the contract, normally via performance, which under the Convention, equals acceptance.

VIII. PERFORMANCE OF THE CONTRACT ABSENT A CLEAR MOMENT OF ACCEPTANCE

Part II of the Convention follows the classic pattern of two will declarations, offer and acceptance, to conclude the contract. The adoption of this scheme is justified by two considerations: 1) a great majority of the legal systems have adopted this scheme and 2) the analysis is easier. Nevertheless some contracts do not follow that pattern. Two questions arise: Can a contract be concluded under the Convention without an offer and acceptance? If so, at what moment is the contract concluded?

Scholars agree on submitting every contractual formation process to the traditional pattern.[129] Thus, the fact that a contract deviates from the normal formation scheme causing conclusion without isolating an offer and an acceptance, does not change the value of the provisions in Part II of the Convention. A doctrine similar to UCC section 2-204(2) is adopted: "An agreement sufficient to constitute a contract for sale may be found though the moment of its making is undetermined."[130] Additionally the Restatement (Second) of Contracts states, "The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties."[131] The Restatement also indicates that "[a] manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined."[132] The UNIDROIT Principles dedicated to contract formation also recognizes the possibility that the contract could be concluded [page 342] through the conduct of the parties.[133]

Without an identifiable offer and acceptance, the contract is governed by article 7 of the general principles of uniformity. Determining the precise moment of contract conclusion is very difficult. Failing other conclusive proof, the contract is concluded either when sufficient agreement between the parties exists or when both parties complete performance.[134]

IX. PLACE OF THE PERFORMANCE OF THE CONTRACT

The contracts concluded between parties located in the same place do not have many problems determining the place of conclusion. However, when the parties negotiate at a distance-even when they use a means of communication that directly connects them, the place of a contract conclusion is difficult to determine.

The Vienna Convention does not address contract conclusion.[135] The questions related to the rules of private international law are traditionally outside the scope of the Convention. Nevertheless, some scholars assume that the place of contract conclusion is determined by the place where the acceptance is effective.[136] In any case, this is clearly a question that must be solved in accordance with the applicable domestic law, because neither provision nor general principle can point to the place in which the contract is concluded.[137] [page 343]

X. SOME CONCLUSIONS ABOUT SPANISH DOMESTIC LAW

The general principles of the Contract Formation of both the Spanish Civil and Commercial Code use the traditional pattern of the two will declarations-offer and acceptance. This model is also adopted by the Convention, which regulates most of the vicissitudes affecting the offer and the acceptance (e.g., withdrawal, revocation, counter-offer, and late acceptance). The Spanish norms about the contract formation do not have these types of rules except those related to the moment of contract conclusion. The Civil Code adopts the Information Theory, and the Commercial Code adopts the Dispatch Theory. However, both Codes only cover acceptances made by letter, because they were promulgated in the 19th century.[138] The Convention's entry into force in Spain has produced several consequences in Spain's domestic system:

First, the role of article 54 of the Commercial Code has changed. At present, its role is to determine the moment of the contract conclusion made by letter and between parties whose places of business are in Spain. All other Commercial contracts will follow the rules of the Convention determining the moment of contract conclusion.

Second, national contracts in Spain apply the provisions of Part II of the Convention pertaining to withdrawal, revocation, counter-offer, acceptance, late acceptance, and so on.

Both consequences are due to the silence of Spain's national Codes on every aspect of Contract Formation. Additionally, even though the Convention is strictly applied to International Sales Contracts, its regulation is not exclusive of this contract, but rather it is the common one to all kind of contracts-of sale or not, international or not. Consequently, Part II of the Convention is a body of law that inspires the formation of every contract.[139] [page 344]


FOOTNOTES

aa. Due to the unavailability of the foreign sources, the Journal of Law and Commerce is unable to verify the accuracy of the sources in this article.

a. Doctor in Law, Carlos III University, Madrid. Associate Professor, Pace University School of Law.

1. The entry into force of the 1980 Vienna Convention in Spain was on August 1, 1991. Boletin Oficial del Estado [B.O.E. 1991, 26]. The Vienna Convention is part of the domestic law of 46 countries: Argentina, Australia, Austria, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Canada, Chile, China, Croatia, Cuba, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Finland, France, Georgia, Germany, Guinea, Hungary, Iraq, Italy, Lesotho, Lithuania, Luxembourg, Mexico, Republic of Moldova, Netherlands, New Zealand, Norway, Poland, Romania, Russia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syria, Uganda, Ukraine, USA, Uzbekistan, Yugoslavia and Zambia. See Journal of Law and Commerce CISG Contracting States and Declarations Table, 16 J.L. & Com. 371 (1996). Ghana and Venezuela are signatories, but they have not decided to ratify it yet. See id.

The official text can be found at United Nations Convention on Contracts for the International Sale of Goods, U.N. Doc. A/Conf. 97/18 (1980) [hereinafter CISG or Convention]; United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records, U.N. Doc. A/Conf. 97/19 (1991) [hereinafter Official Records ]. The works that lead to the adoption of the Convention are: a) in the Official Records, where there is also a comment on each article of the 1978 Draft prepared by the UNCITRAL Secretariat, Commentary on the Draft Convention on Contracts for the International Sale of Goods, U.N. Doc. A/Conf. 97/5 (1991), and b) in the UNCITRAL Yearbooks, 10 U.N. Commission on Int'l Trade L.-Y.B. (1979), U.N. Doc. A/CN.9/SER.A/1979.

A good compilation of these texts is: John O. Honnold, Documentary History of the Uniform Law for International Sales (1989).

2. See Manuel Olivencia, La Convencion de las Naciones Unidas sobre los Contratos de Compraventa Internacional de Mercaderias: Antecedentes Historicos y Estado Actual, 201 Revista de Derecho Mercantil 394 (1992) ("Son dos tradiciones, dos culturas, que difieren en sus principios, en sus instituciones, en sus reglas e incluso en sus esquemas logicos del razonar juridico, hasta tal punto que la unificacion choca inevitablemente con las barreras de esas diferencias. Y la solucion no puede venir por la via del "legal imperialism" ni del "legal transplant," por la imposicion o el injerto de un sistema sobre otro, sino por el dialogo paciente, el espiritu de compromiso, la transaccion generosa y las formulas de equilibrio.").

3. The text of these articles is set forth below:

"A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price."

CISG, supra note 1, art. 14(1).

"Where a contract has been validly concluded but does not expressly or implicitly fix or make provision for determining the price, the parties are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned."

CISG, supra note 1, art. 55. For a more in-depth comparison of articles 14 & 55, see Ma Del Pilar Perales Viscasillas, La Formacion del Contrato en la Compraventa Internacional de Mercaderias [ Formation on Contracts in the CISG ] 315 (1996).

For price determination decisions see Obersten Gerichtshof [OGH] [Supreme Court], 2 Ob 547/93 (Aus.), abstract in Case Law on UNCITRAL Texts, U.N. Comm'n on Int'l Trade L., Case 106, at 4, U.N. Doc. A/CN.9/ SER.C/ABSTRACTS /8 (1995) [hereinafter CLOUT]; Municipal Court of Budapest, AZ 12.G.41.471/1991/21 (Hung. unpublished), abstract in CLOUT, Case 52, at 5, U.N. Doc. A/CN.9/SER.C/ABSTRACTS/3 (1994); Supreme Court of Hungary, Gf.I.31 349/1992/9 (Hung. unpublished), abstract in CLOUT, Case 53, at 2, U.N. Doc. A/CN.9/SER.C/ABSTRACTS/4 (1994), translated in Journal of Law & Commerce Case I: The Supreme Court of the Republic of Hungary, September 25, 1992, 13 J.L. & Com. 31 (1993); see also Paul Amato, Recent Developments: CISG. U.N. Convention on Contracts for the International Sale of Goods-The Open Price Term and Uniform Application: An Early Interpretation by the Hungarian Courts, 13 J.L. & Com. 1 (1993); Alexander Vida, Unwirksamkeit der Offerte wegen Unbestimmtheit nach UN-Kaufrecht, 4 IPrax 261-64 (1995); Martin Karollus, Preisbestimmtheit und Zahlungsort nach UNKR, 4 Juristische Blatter 17, 253- 56 (1995); Alexander Vida, Zur Anwendung des UN-Kaufubereinkommens in Ungarn, 4 Praxis des Internationalen Privat und Verfahrensrecht (IPrax), 263-265 (1993).

4. Article 16 states as follows:

"(1) Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance. (2) However, an offer cannot be revoked: a) if it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or b) if it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer."

CISG, supra note 1, art. 16; see also Perales Viscasillas, supra note 3, at 371.

5. Gyula Eorsi, A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods, 31 Am. J. Comp. L. 333, 342 n.34 (1983). Eorsi refers to the article 19 conflict-compromise as an East-West compromise. A sharper delineation is provided by Farnsworth, who refers to article 19 as a conflict-compromise line between traditionalists and reformers. See Cessaro Massimo Bianca & Michael-Joachim Bonell, Commentary on the International Sales Law: The 1980 Vienna Sales Convention, art. 19, at 175 (1987). Article 19(1), with its "mirror image rule," reflects the point of view of the traditionalists, while paragraph two corresponds to the reformists. However, the compromise seems to favor the traditionalists because of the introduction of article 19(3). Opinions vary as to where conflict-compromise lines exist throughout the Convention; they are said to be Civil Law-Common Law, North-South, and East-West.

6. Article 23 states as follows: "A contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention." CISG, supra note 1, art. 23.

Article 24 states as follows:

"For the purposes 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, supra note 1, art. 24.

7. Article 7 states as follows:

"(1) In the interpretation of the Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade. (2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."

CISG, supra note 1, art. 7.

In one case, the conduct of one of the parties during the performance and the conclusion of the contract was contrary to the good faith principle of article 7(1) CISG. See Cours d'appel [CA] [regional courts of appeal] Grenoble, le com., Feb. 22, 1995 (France). Besides, in a domestic contract, a court has made express reference to the good faith principle of article 7 as a precedent to the national law. See (1992) 26 N.S.W.L.R. 234.

8. The move toward a uniform law in international trade began in April 1930 when the International Institute for the Unification of Private Law, or UNIDROIT (the Rome Institute), took the initiative of founding a Working Group in charge of the drafting of a uniform law on international sales. Two drafts were prepared: one about the formation of international contracts by correspondence ("Loi uniforme sur la formation des contrats internationaux par correspondance") and the other related to the performance of the contract, which was drafted on the basis of the work of Ernst Rabel, I and II Das Recht des Warenkaufs, vol. I (1936), II (1958). The importance of Rabel's work is justified because it was the basis of the deliberations during the Hague Conference of 1964. See Ernst von Caemmerer, Die Haager konferenz uber die internationale Vereinheitlichung des Kaufrechts vom 24 Rabels Zeitschrift fur Auslandisches und Internationales Privatrecht 101-02 (1965) [hereinafter RZ] ; see also Peter Schlechtriem, Einheitliches UN-Kaufrecht 1 (1981) translated in Uniform Sales Law: The UN-Convention on Contracts for the International Sale of Goods (1986). The work of UNIDROIT was interrupted due to the Second World War, but it was recommenced in 1951 at the Hague International Diplomatic Conference. A Draft Uniform Law on Formation of International Sales Contracts and a Draft Uniform Law on International Sales were published in 1959 and 1956, respectively. Finally, after three weeks of intensive work on July 1, 1964, both the Uniform Law on the International Sales (ULIS) and the Uniform Law on Formation of International Sales Contracts (ULF) were adopted. The ULIS entered into force on the Aug. 18, 1972 while the ULF was ratified just 5 days later. Today, their value is limited because the 1980 Vienna Convention has successfully replaced those texts. According to CISG article 99(3), "a State which ratifies, accepts, approves or accedes to this Convention and is a party to either or both [of the 1964 Hague Conventions] shall at the same time denounce" either or both Conventions. CISG, supra note 1, art. 99(3).

9. In 1959, a Draft Uniform Law on International Sales Contracts was published by UNIDROIT. See supra note 8.

10. See id.

11. Under the German legal system the Declaration Theory is known as the as Erklarungstheorie or Ausserungstheorie. See Katharina S. Ludwig, Der Wertragsschluss Nach UnKaufrecht Im Spannugsverhattns Von Common Law und Civil Law 49 (1994). Under the Spanish system this theory is called the teoria de la declaracion or teoria de la exteriorizacion. See Fernando Sanchez Calero, Instituciones de Derecho Mercantil Tomo II, 137 (1994).

12. In Common Law systems, the Expedition Theory is known as the mailbox or postbox rule. The mailbox rule has been in place in England since the early 1800s. See Adams v. Lindsell, 160 Eng. Rep. 250 (K.B. 1818) (mailbox rule first articulated); Dunlop v. Higgins, 9 Eng. Rep. 805 (H.L. 1848) (mailbox rule adopted); Harris's Case, 7 L.R. 7 (Ch. 1872) (mailbox rule applied); and Bryne v. Van Tienhoven, 5 L.R. 344 (C.P.D. 1880) (mailbox rule upheld). The mailbox rule has also been accepted in America. See Restatement (Second) of Contracts 63 (1981).

In the German system, the Expedition Theory is called Umbermittlungstheorie or absendetheorie. See Ludwig, supra note 11, at 51. In the Spanish system it is known as "teoria de la expedicion." See Jose Puig Brutau, 1 Fundamentos de Derecho Civil, Tomo II 193 (1994).

13. However, in Common Law systems the Dispatch Theory is not applied when the results would be absurd. To read about the English system, see Chitty on Contracts 69 (A.G. Guest ed., 26th ed. 1985). For information about the American system, see John E. Murray, Jr., Murray on Contracts 47 (3d ed. 1990).

14. The Expedition Theory was designed to protect the offeree from the offeror's revocation power and is extended to determine the moment of contract formation. Because the Convention does not protect these interests as it does not require there to be consideration in order for an offer to be irrevocable, the Expedition Theory has not been adopted as a general rule by the Convention.

15. See Codigo de Comercio [C. Com.] art. 54 (Spanish Commercial Code) ("Los contratos que se celbren por correspondencia quedaran perfeccionados desde que se conteste aceptando propuesta o las condiciones con que esta fuere modificade"); Perales Viscasillas, supra note 3, at 194.

16. These countries include: Argentina, see Codigo Civil [Cod. Civ.] art. 1154; Costa Rica, see Civil Code art. 12; Brazil, see Codigo Civil [C.C.] art. 1086 and Codigo Comercial [C. Co.] art. 127; and France, see Jean Thiefrry & Chantal Granier, La Venta Internacional 1.2, at 72 (1989).

17. The Receipt Theory is known as Zugangstheorie or Empfangstheorie in the German system, see Ludwig, supra note 11, at 47, and teoria de la recepcion in the Spanish system, see Brutau, supra note 12, at 194.

18. See CISG, supra note 1, art. 15(1).

19. See Chitty, supra note 13, 67; G.H. Trietel, The Law of Contract 25 (8th ed. 1991); Edward A. Farnsworth, Farnsworth on Contracts 3.22 (1990); 2 Samuel A. Williston on Contracts 6:34 (Richard A. Lord ed., 4th ed. 1990).

20. See Williston, supra note 19, 6:34. Professor Murray applies the "distance rule" to acceptances sent by means of instantaneous communications. Under the distance rule, the contract is formed with the dispatch of the communication. See Murray, supra note 13, 47.

21. See Parviz Owsia, Formation of Contract: A Comparative Study Under English, French, Islamic, and Iranian Law 539 (1994).

22. See id.

23. Although, EDI has not received much attention by scholars, the American Bar Association has adopted the Receipt Theory for acceptances communicated by EDI. See The American Bar Association, Model Electronic Data Interchange Agreement art. 2.1 (1989).

24. These countries include: Germany, see Burgerliches Gesetzbuch [BGB] [Civil Code] 130; Austria, see Allgemeines Burgerliches Gesetzbuch [ABGB] [Civil Code] art. 862; Greece, see art. 192 Civ. Cod. ; Italy, see Codice Civile [C.C.] art. 1335; Switzerland, see Code Civil Suisse [CC] art. 5; and France, see Thieffry & Granier, supra note 16, 1.2.

25. The Information Theory is known in the German system as Kenntnisnahmetheorie or vernhemugstheoris. See Ludwig, supra note 11, at 49. In the Spanish system, this theory is called teoria del conocimiento, teoria de la cognicion, or teoria de la informacion. See Calero, supra note 11, at 137.

26. See CISG, supra note 1, art. 18(2).

27. See Entores, Ltd. v. Miles Far East Corp. 2 Q.B. 327 (1955). See also Williston, supra note 19, 6:34; Murray, supra note 13, 47; Restatement (Second) of Contracts 64 (1981) ("Acceptance given by telephone or other medium of substantially instantaneous two-way communication is governed by the principles applicable to acceptances where the parties are in the presence of each other.").

28. See Codigo Civil [C.C.] art. 1262 ("La aception hecha por carta no obliga al que hizo oferta sino desde que llego a su conocimiento."). Although a great number of scholars apply the Information Theory to contracts formed by letter or telegram, this author believes this article is applicable to all means of communication. See Perales Viscasillas, supra note 3, at 206.

29. See art. 120.1, Venezuelan Commercial Code.

30. CISG, supra note 1, art. 23.

31. Id. art. 22.

32. See id. arts. 1(2), 10(a), 16(1), 31(b), 31(c), 33(c), 35(2)(b), 35(3), 42(1)(a), 42(2)(a), 55, 57(2), 68, 71(1), 73(3), 74, 79(1) and 100(1). See also Marc Wey, der Vertragsschluss Beim Internationalen Warenkauf Nach Uncitral-und Schweizerischem Recht, MIT Einschluss der Anwendungs-und Allgemeinen Bestimmungen des Ubereinkommens der Vereinten Nationen Uber den Internationalen Warenkauf 481 (1984).

33. CISG, supra note 1, art. 18(2).

34. Id. art. 24.

35. See supra text accompanying notes 12-16.

36. See CISG, supra note 1, art. 18(1).

37. See id. art. 16(1).

38. See id. art. 18(3).

39. See id. art. 20(1).

40. See id. art. 21(1).

41. "A person 'receives' a notice or notification when: (a) it comes to her 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 communications." U.C.C. 1-201(27) (1995).

42. See Ludwig, supra note 11, at 385; Konstantinos Noussias, die Zugangsbedurftigkeit von Mitteilungen nach den Einheitlichen Haager Kaufgesetzen und Nach Dem un-Kaufgesetz 86 (1982). Noussias points out that the Receipt Principle of article 24 of the CISG must be understood in a similar way as 130 BGB (F.R.G.).

43. CISG, supra note 1, art. 24. Article 10 also complements Article 24 when more than one place of business exists:

"For the purposes of this Convention: (a) if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract; (b) if a party do not have a place of business, reference is to be made to his habitual residence."

Id. art. 10. See also Ernst von Caemmerer & Peter Schlechtriem, Kommentar Zum Einheitlichen un-Kaufrecht: Das Ubereinkommen der Vereinten Nationen Uber Vertrage Uber den Internationalen WarenkaufCISG-Kommentar-art. 24, 9 (2d ed. 1995). But cf. Wey, supra note 32, 797, at 317.

44. See CISG, supra note 1, art. 24. The language "by any other means to him personally" can be interpreted to include a third party agent. See also Official Records, supra note 1, at 26 (adding that "the question as to who would be an authorized agent is left to the applicable national law").

L.G. Kassel, UNILEX No. 11 0 4185/95 (Feb. 15, 1996) (GE), pointed out that notice to an independent mediator about the lack of conformity was not appropriate notice under the circumstances (art. 27 CISG), and therefore the buyer bore the risk of failure to reach the seller.

45. See Noussias, supra note 42, at 86; Karl Neumayer & Catherine Ming, Convention de Vienne Sur Les Contrats de Vente Internationale de Marchandises 200 (1993); Ludwig, supra note 11, at 308; Franz Bydlinski, Das allgemeines Vertragsrecht, in Das Uncitral-Kaufrecht im Vergleich Zum Osterreichischen Recht 64 (Peter Doralt ed., 1985) [hereinafter Bydlinski]; Franz Bydlinski, Der Vertragsschluss nach der Wiener UN-Kaufrechtskonvention in Komparativer Betrachtung, 37 Archivum huridicum Cracoviense, 143-56 (1985) [hereinafter Bydlinski II]. For an impressive commentary on article 4, see Hellen E. Hartnell, Rousing the Sleeping Dog: The Validity Exception to the Convention on Contracts for the International Sale of Goods, 18 Yale J. Int'l L. 1 (1993); see also Kammergericht [KG] [District Court] Berlin 8 Recht der International Wirtschaft [RIW] (1994) 683-684 (F.R.G.), abstract in CLOUT, Case 80, at 2, U.N. Doc. A/CN.9/SER.C/ABSTRACTS/6 (1995).

46. See Ludwig, supra note 11, at 307. But see von Caemmerer & Schlechtriem, supra note 43, 12.

47. See Bianca & Bonell, supra note 5, 3.1, at 203-04; von Caemmerer & Schlechtriem, supra note 43, 2; Franz Enderlein et al., Internationales Kaufrecht: Kaufrechtskonvention 99 (1991); Franz Enderlein & Dietrich Maskow, International Sales Law: United Nations Convention on Contracts for the International Sale of Goods 108 (1992); John O. Honnold, Uniform Law for International Sale Under the 1980 United Nations Convention 179, at 249 (2d ed. 1991); Albert H. Kritzer, International Contract Manual Guide to Practical Applications of the United Nations Convention on Contracts for the International Sales of Goods 196 (1989); Ulrich Magnus, Die allegemeinen Grundsatze im UN-Kaufrecht, 59 RZ at 487 (1995); Elisabeth Stern, Erklarungen im UNCITRAL-Kaufrecht, in Wiener Rechtswissenschaftliche Studien, 104, at 46 (1990). But see Noussias, supra note 42, at 60.

48. See CISG, supra note 1, art. 27.

49. See id. arts. 47(2), 48(4), 63(2), 65(1) and 79(4).

50. International Institute for the Unification of Private Laws, UNIDROIT Principles International Commercial Contracts (1994) [hereinafter UNIDROIT Principles ]. UNIDROIT's first session, which began in 1974, implemented the work field, restricting it to general contractual law of sales contracts. These Principles provide a uniform law for international contracts. They derived inspiration from the Convention. Article 2 addresses the formation of international contracts and, except for some slight variations, is virtually a copy of the corresponding Convention text. See also Ma del Pilar Perales Viscasillas, UNIDROIT Principles of International Commercial Contracts: Sphere of Application and General Provisions, 13 Az. J. Int'l Comp. L. 383 (1996).

51]. UNIDROIT Principles, supra note 50, art. 1.9.

52. See CISG, supra note 1, art. 18(1); see also Rafael Illescas Ortiz, La Convencion de Viena de 1980 Sobre Compraventa Internacional de Mercaderias: Ambito de Aplicacion y Perfeccion del Contrato, 16 Derecho de los Negocios 7 (1992); Tomas Vazquez Lepinette, La Conservacion de Las Mercaderias en La Compraventa Internacional 139 (1995); Silvia Barona et al., Contratacion Internacional 252 (1994); Christopher Nicoll, E.D.I. Evidence and the Vienna Convention, 31 J. Bus. L. 21, 31 n.52 (Jan. 1995); Ludwig, supra note 11, at 350; Franco Ferrari, Vendita Internazionale di Beni Mobili, Tomo I-art. 1-13, in Commentario del Codice Civile Scialoja-Branca, Libro Quarto-Delle Obbligazioni, Titolo III, Capo I, 232-33 (1994).

53. But see von Caemmerer & Schlechtriem, supra note 43, 12; Rolf Herber & Beate Czerwenka, Internationales Kaufrecht, Kommentar Zu Dem Ubereinkommen der Vereinten Nationen Vom 11. April 1980 Uber Vertaage Uber den Internationalen Warenkauf 3, at 119 (1991).

54. See Burghard Piltz, Internationales Kaufrecht Das un-Kaufrecht (Wiener Ubereinkomnen Von 1980) in Praxiorientierter Darstellung 82 (1993).

55. CISG, supra note 1, art. 18(2).

56. See id. art. 13 ("For the purposes of this Convention 'writing' includes telegram and telex.").

57. See id. art 18(2).

58. But see von Caemmerer & Schlechtriem, supra note 43, at 8 (1st ed. 1990). Professor Schlechtriem thinks referring to the first case that it is effective when the offeror knows it, that is to say, when he hears it. Other authors believe that the contract is concluded when the message is recorded. See Neumayer & Ming, supra note 45, at 202; Bernard Audit, La Vente Internationale de Marchandises (Convention Des Nations-Unies Du 11 Avril 1980) 57 n.4 (1990). In those situations, the good faith standard of article 7 must be applied.

59. Only a few scholars (most are silent about this point) believe that when the offeror knows the acceptance, an oral contract is concluded. See Noussias, supra note 42, at 26; von Caemmerer & Schlechtriem, supra note 43, 6; and Owsia, supra note 21, at 550-51.

60. See UNCITRAL, 11th Sess. 196th mtg., 9 U.N. Commission on Int'l Trade L.-Y.B. (1978), U.N. Doc. A/CN.9/SER.A/1978, available in Honnold, supra note 1, at 371.

61. See Piltz, supra note 54, at 81 (agreeing with von Caemmerer & Schlechtriem, supra note 43, 7).

62. See Wey, supra note 32, 778, at 309; von Cammerer & Schlectriem, supra note 43, 6.

63. Article 7 plays a very important role not only as a principle of interpretation but also as a standard of conduct that can be imposed by the parties during contract formation and performance. See Pilar Perales Viscasillas, Una Aproximacion al Articulo 7 de la Convencion de Viena de 1980 Sobre Compraventa Internacional de Mercaderias. (Aplicaciones Concretas en la Parte II de la Convencion), 16 Cuadernos de Derecho y Comercio 55 (1995), available at<http://www.cisg.law.pace.edu/cisg/text/e-text-07.html> (visited July 8, 1997).

64. See von Caemmerer & Schlechtriem supra note 43, 9; Owsia, supra note 21, at 550; see also Restatement (Second) of Contracts 64 & cmt. 1 (1981) ("A makes an offer to B by telephone. The telephone connection is then broken, but B speaks an acceptance in ignorance of the break. A's failure to answer gives B reason to know of the break. There is no contract.").

65. See Ludwig, supra note 11, at 304-05; Noussias, supra note 42, at 27.

66. See Langericht [LG] [trial court] Krefeld, UNILEX, 24 Nov. 1992 (120153/91) (GE).

67. See CISG, supra note 1, art. 18(3).

68. See id. art. 18(2).

69. Article 21(2) addresses late acceptances because of transmission irregularities. See Ludwig, supra note 11, at 344; Noussias, supra note 42, at 120. But see Clement Ng'gong'ola, The Vienna Sales Convention of 1980 in the Southern African Legal Environment: Formation of a Contract of Sale, 4 Revue Africane de Droit Int'l Et Comp. 852 (1992).

70. See Honnold, supra note 47, 179, at 249 (stating that this case would not constitute "delivery" to the addressee's place of business); see also Bianca & Bonell, supra note 5, 2.4, at 203; Neumayer & Ming, supra note 45, at 200-01; von Manuel Medina de Lemus, La Venta Internacional de Mercaderias 79 (1992); von Caemmerer & Schlechtriem, supra note 43, 13 (pointing out that the interpretation of Professors Honnold and Farnsworth is against the good faith principle, and could never be deemed a valid acceptance).

71. But see von Caemmerer & Schlechtriem, note 43, 12; Herber & Czerwenka, supra note 53, 3, at 119.

72. See also Neumayer & Ming, supra note 45, at 204; von Caemmerer & Schlechtriem, supra note 43, 14; Audit, supra note 58, 60, at 56; Bydlinski, supra note 45, at 64; Wey, supra note 32, 803, at 320-21; and Noussia, supra note 42, at 85-87; Bianca & Bonell, supra note 5, 3.2, at 204. But see Ludwig, supra note 11, at 309.

73. von Caemmerer & Schlechtriem, supra note 43, 15.

74. See Oberlandesgericht [OLG] Frankfurt, Apr. 28, 1981 (5 U 119/80) (F.R.G.).

75. See Amtsgericht [AG] Kehl, 6 Oct. 1995 (3 C925/93) (F.R.G.).

76. C.C. art. 1262.2 (Spain).

77. See Tribunal Supremo [STS], Apr. 25, 1994 (R.J.); STS, May 26, 1976 (R.J.); STS, Mar. 29, 1993 (R.J.); STS, Sept. 29, 1981 (R.J.); STS, Dec. 22, 1992 (R.J.); STS, Dec. 10, 1982 (R.J.); STS, May 4, 1994 (R.J.); STS, Oct. 21, 1974 (R.J.); STS, July 4, 1980 (R.J.); STS, Nov. 13, 1992 (R.J.); STS, Dec. 22, 1992 (R.J.); STS, Feb. 14, 1995 (R.J.); STS, Feb. 21, 1994 (R.J.); STS, Apr. 24, 1995 (R.J.).

78. Restatement (Second) of Contracts 63(a), 66, 67 (1981). The English and American systems also consider the use of mail or telegraph as a reasonable form of acceptance if the offer was sent in the same manner. See Chitty, supra note 13, 66, at 55; Treitel, supra note 19, at 29; see also John D. Calamari & Joseph M. Perillo, The Law of Contracts 2-23, at 116 (3d ed. 1987); Williston, supra note 19, 6:35, at 384-85.

79. See Gyula Eörsi, General Provisions, in International Sales: The United Nations Convention on Contracts for the International Sale of Goods 2.03, at 2-8 (Nina Galston & Hans Smit eds., 1984); von Caemmerer & Schlechtriem, supra note 43, 17; Noussias, supra note 42, at 85, 87.

80. See Monique Jametti, Der Vertragsabschluss, in Das Uncitral-Kaufrecht im Vergleich zum osterreichischen Recht 55 (Peter Doralt ed., 1985).

81. See Wey, supra note 32, 805, at 321, 1156, at 465-66 (indicating that the offeror cannot benefit under such circumstances, and consequently the acceptance should conclude the contract). See also Herber & Czerwenka, supra note 53, 5, at 120.

82. See CISG, supra note 1, art. 21.

83. CISG art. 21(1) states: "A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect." Id. art. 21(1).

84. See id. art. 21(2). Article 21(2) states as follows:

"If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time, the late acceptance is effective as an acceptance unless, without delay, the offeror orally informs the offeree that he considers his offer as having lapsed or dispatches a notice to that effect." Id.

85. But see von Caemmerer & Schlechtriem, supra note 43, 3.

86. See CISG, supra note 1, art. 16(2)(b) & 29(2).

87. When the offeree is the person who causes the delay-he must bear this risk even though article 21(1) affords the offeror the opportunity to dispatch notice accepting the acceptance. See Neumayer & Ming, supra note 45, at 201; Wey, supra note 32, 797, at 317. Eorsi suggests that when the sender knows that the addressee is absent but sends the communication anyway, the sender may have committed a violation of the good faith principle. See Eorsi, supra note 79, at 2-8. Eorsi's argument that such a violation may have occurred, however, may be countered by the fact that the offeror will lose the opportunity to conclude the contract and that no offeree will be present to accept. If, however, the offeree sends his communication knowing that the offeror is absent, the offeree will merely be complying with the requirements of the Convention relating to the "reaching" within a reasonable time.

88. But see Wey, supra note 32, 801, at 319; Neumayer & Ming, supra note 45, at 202.

89. CISG, supra note 1, art. 23.

90. The phrase "potentially effective" was chosen because silence and inaction are not dispositive. "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." CISG art. 18(1). See also Perales Viscasillas, supra note 3, at 512.

91. See supra text accompanying notes 12-17.

92. See CISG, supra note 1, arts. 19(2), 21(2).

93. See id. 19(2).

94. An acceptance, which is late because of external circumstances, will be effective "unless, without delay, the offeror orally informs the offeree that he considers his offer as having lapsed." Id. art. 21(2).

95. See id. art. 18(3).

96. See Official Records, supra note 1, at 23; see also Bianca & Bonell, supra note 5, 3.2, at 172 (They have doubts about the time in which the acceptance takes effect: the time of the end of the required period of silence or, retroactively, the time of the receipt of the offer.); Vicent Heuze, La Vente Internationale de Marchandises. Droit Uniforme 151 (1992).

In the German legal system, the silence or the inaction of the addressee of a written confirmation is deemed an acceptance. See OLGZ Hamburg, 1980 LG Karlsruhe, 1981 (7 O 530/80); LG Marburg, 1982 (4 O 22/82). The court of Basel-Stadt declared that in a conflict between an Austrian seller and a Swiss buyer, silence or inaction in response to a written confirmation after contract conclusion must be understood as a usage of trade under article 9(2). See Basel-Stadt Dec. 21, 1992 (P4 1991/238) (Switz.). On the contrary, a German court stated that in a sales contract between a German buyer and a Dutch seller there is no place under the Convention of the German doctrine about the value as an acceptance to the silence or inaction of the addressee's written confirmation, since in that case one of the parties' national Law did not recognize that doctrine.

97. See Filanto S.p.A. v. Chilewich Int'l Corp., 789 F. Supp. 1229 (S.D.N.Y. 1992); see also Ronald A. Brand & Harry M. Flechtner, Arbitration and Contract Formation in International Trade: First Interpretations of the U.N. Sales Convention, 12 J.L. & Com. 239 (1993) (commenting on Filanto and focusing on the arbitration agreement); Gary Kenji Nakata, Filanto S.p.A. v. Chilewich Int'l Corp.: Sounds of Silence Bellow Forth Under the CISG's International Battle of the Forms, 7 Transnat'l Law. 141 (1994) (comparing silence and inaction to the "battle of the forms"); Pilar Perales Viscasillas, La Perfeccion Por Silencio de la Compraventa Internacional en la Convencion de Viena de 1980, 52 Derecho de los Negocios 9 (1995). Stern & Ludwig support the same solution but extended it to every case in which silence or inaction play the role of acceptance. See Stern, supra note 47, 68, at 29; Ludwig, supra note 11, at 348.

98. Article 18(3) states as follows:

"However, if, by virtue of the offer or as a result of practice 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."

CISG, supra note 1, art. 18(3).

99. Some scholars believe that no communication is necessary under these circumstances. See Herber & Czerwenka, supra note 53, at 100 n.13; Heuze, supra note 96, at 150-51; Law Reform Commission, Report on United Nations (Vienna) Convention on Contracts for the International Sale of Goods 1980 (1992); Ludwig, supra note 11, at 321-22, 326, 348; Neumayer & Ming, supra note 45, at 172; Gyula Eorsi, Formation of Contract, in The 1980 Vienna Convention on the International Sale of Goods 50 (1985); Clark Kelso, The United Nations Convention on Contracts for the International Sales of Goods: Contracts Formation and the Battle of Forms, 21 Colum. J. Transnat'l L. 540 (1983); Burt A. Leete, Contract Formation under the United Nations Convention on Contracts for the International Sale of Goods and the Uniform Commercial Code: Pitfalls for the Unwary, 6 Temp. Int'l & Comp. L.J. 208 (1992); Stern, supra note 47, at 29 n.69, 54 n.126; Walter A. Stoffel, Formation du Contrat, in The 1980 Vienna Convention on the International Sale of Goods 68 (1985). But see James E. Joseph, Contract Formation Under the United Nations Convention on Contracts for the International Sale of Goods and the Uniform Commercial Code, 3 Dick. J. of Int'l L. 107, 130 (1984).

Some scholars believe that article 18(3) regulates the conclusion of the contract by acts of performance and not by silence or inaction in conjunction with other factors. See Carlos Esplugues, La Convencion de las Naciones Unidas Sobre los Contratos de Compraventa Internacional de Mercaderias, Hecha en Viena el 11 de abril de 1980, Revista General de Derecho 59 (1991); Muna Ndulo, The Vienna Sales Convention 1980 and the Hague Uniform Laws on International Sale of Goods 1964: A Comparative Analysis, 38 Int'l & Comp. L.Q. 1 (1989); see also LG Krefeld, UNILEX No. 12 O 153/92 (Nov. 24, 1992) (GE unpublished) (holding that a buyer accepts an offer when he receives the goods from the seller without objections).

100. See Enderlein et al., supra note 47, at 91-96 (invoking the good faith principle which would require an obligation to communicate the acceptance); Noussias, supra note 42, at 108 (favoring the need to communicate the acceptance by analogizing to article 27). Some authors reject the need to communicate acceptance but admit to the necessity of informing the offeror about the performance of the act. See Cessari Massimo Bianca, Convenzione di Vienna Sui Contratti di Vendita Internazionale di Beni Mobili 82, 90 (1992); von Caemmerer & Schlechtriem, supra note 43, 23; Eckard Rehbinder, Vertragsschlu b nach UN-Kaufrecht im Vergleich zu EAG und BGB, in Einhetliches Kaufrecht und Nationales Obligationenrecht 149, 161 (Peter Schlechtriem ed., 1987). See generally John E. Murray, Jr., An Essay on the Formation of Contracts and Related Matters Under the United Nations Convention on Contracts for the International Sale of Goods, 8 J.L. & Com. 8 (1988).

101. See Official Records, supra note 1, at 280.

102. "Unless otherwise unambiguously indicated by the language or circumstances (a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances." U.C.C. 2-206(1) (1995).

103. Section 2-206(1)(b) states as follows:

"[A]n order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment ... is offered only as an accommodation to the buyer."

U.C.C. 2-206(1)(b).

It is not strange that some scholars point out that article 18 seems to be an "American product" based on U.C.C. 2-206. See Folke Schmidt, The International Contract Law in the Context of Some of its Sources, 14 Am. J. Comp. L. 1, 35 (1965). Other commentators note that article 18 of the CISG uses the two typical methods of acceptance in the common law systems "by return promise and by performance." Kelso, supra note 99, at 539.

104. "A late acceptance is nevertheless effective as an acceptance if without delay the offeror orally so informs the offeree or dispatches a notice to that effect." CISG, supra note 1, art. 21(1).

105. See Honnold, supra note 47, at 243 n.2 (indicating this comments on the time limit to withdraw the acceptance); see also Stern, supra note 47, 96, at 43, 126, at 54. But see Bianca & Bonell, supra note 5, 2, at 191, 194.

106. Commentary by the Secretariat at the 1978 Draft Convention states: " [U]nder this paragraph [article 19] it is the late acceptance which becomes the effective acceptance as of the moment of its receipt, even though it requires a subsequent notice to validate it." Official Records, supra note 1, at 51; see Bianca, supra note 100, at 99; von Caemmerer & Schlechtriem, supra note 43; Herber & Czerwenka, supra note 53, 4, at 113, 8, at 114; Kritzer, supra note 47, at 104; Ludwig, supra note 11, at 341-42 and 405-06; Noussias, supra note 42, at 115 (comparing article 9(1) of the 1964 ULF with article 21(1) of the 1980 CISG); Piltz, supra note 54, 106, at 102; Bydlinski, supra note 45, at 71; Luis Diez-Picazo, La Formacion del Contrato, Anuario de Derecho Civil, at 30 enero-marzo 1995; Rehbinder, supra note 100, at 163; see also UNIDROIT Principles, supra note 50, art. 2.9, cmt. 2.

107. Upon redrafting the ULF (1964 CISG predecessor, see supra text accompanying notes 8 and 9), the UNCITRAL drafting group introduced the Dispatch Theory for written communication. Nevertheless, when ULF and ULIS were combined to form the 1978 Draft Project of the CISG, the Secreteriat's Commentary modified the theory: A contract would conclude upon receipt of late acceptance, despite the necessity of a subsequent communication to validate the receipt. See Official Records, supra note 1, at 25.

108. "A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer." CISG, supra note 1, art. 19(1).

109. See generally Murray, supra note 13, 48.

110. CISG, supra note 1, art. 19(2). This article states as follows:

"However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance." Id.

111. "Additional or different terms relation, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one's party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially." Id. art. 19(3).

112. See Première chambre civile [Cass. 1e civ.], Jan. 4, 1995; see also Claude Witz, Le Premier Arrêt de la Cour de Cassation Confronte à la Convention de Vienne Sur la Vente Internationale de Marchandises.-Note sous Cass. 1re civ., 4 janv.1995, 20 Recueil Dalloz Sirey, 289 (1995); LG Baden-Baden, RIW (1991), 62, abstract in CLOUT, Case 50, at 4, U.N. Doc. A/CN.9/SER.C/ABSTRACTS/3 (1994).

113. See CNCom. [Court of Appeals in Commercial Matters] Oct. 14, 1993 (Arg.). But see Filanto S.p.A. v. Chilewich Int'l Corp., 789 F. Supp. 1229 (S.D.N.Y. 1992).

114. See Honnold, supra note 47; see, e.g., U.C.C. 2-302, 2-719 (1995).

115. CISG, supra note 1, art. 14(1).

116. See, e.g., Francois Dessemontet, La Convention des Nations Unies du 11 avril 1980 Sur les Contrats de Vente Internationale de Marchandises, in Les Contrats de Vente Internationale de Marchandises 47, 56 (Francois Dessemontet ed., 1991); Ulrich von Huber, Der Uncitral-Entwurf eines Ubereinkommens uber Internationale Warenkaufvertrage, 43 RZ 444 (1979); Jametti, supra note 80, at 46.

117. There are basically two points of view supporting the article 7 gap-filling thesis. The first contends that article 7 is a gap filler because the delegates to the Vienna Diplomatic Conference rejected a "Belgian proposal" that sought to adopt a solution based on the "knock out rule." See Official Records, supra note 1, 87-103, at 288-89; Jan Hellner, The Vienna Convention and Standard Form Contracts, in International Sales of Goods: Dubrovnik Lectures 342 (Petar Sarcevic & Peter Volken eds., 1986). The second point of view is that in the "battle of the forms" scenario, acceptance by conduct pursuant to article 18(3) of the CISG is not a valid way to indicate assent to an offer pursuant to terms that contradict the original offer. See Christine Moccia, The United Nations Convention on Contracts for the International Sale of Goods and the "Battle of the Forms ," 13 Fordham Int'l L.J. 667 (1989-1990); Frans van der Velden, Uniform International Sales Law and the Battle of Forms, in Unification and Comparative Law in Theory and Practice Contributions in Honour of Jean Georges Sauveplanne 233, 241-43 (1984); Francois Vergne, The "Battle of the Forms" under the 1980 United Nations Convention on Contracts for the International Sale of Goods, 33 Am. J. Comp. L. 233, 253, 255-56 (1985); cf. Honnold, supra note 47, at 170.3 (" 'Last shot' theories have been rightly criticized as casuistic and unfair. They do not reflect international consensus that justifies importing them into the Convention.").

118. See Hellner, supra note 117, at 342.

119. The U.C.C. 2-207(3) knock-out rule states that contradicting and different terms knock each other out of the contract. Therefore, the U.C.C. provisions are used to fill-in that contract gap:

"Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act."

U.C.C. 2-207(3) (1995). For a comprehensive view of U.C.C. 2-207, see Douglas G. Baird & Robert Weisberg, Rules, Standards, and the Battle of the Forms: A Reassessment of 2-207, 68 Va. L. Rev. 1217 (1982); John E. Murray, The Chaos of the "Battle of the Forms": Solutions, 39 Vand. L. Rev. 1307 (1986); see also Ending the "Battle of the Forms": A Symposium on the Revision of Section 2-207 of the Uniform Commercial Code, 49 Bus. Law. (1994).

120. German Law strictly applied 150.2 BGB (Civil Code): "Eine Annahme unter Erweiterungen, Einschrankungen oder sonstigen Anderungen gilt als Ablehnung verbunden mit einem neuen Antrage" ("An acceptance under amplifications, limitations or other alterations is deemed a refusal combined with a new offer"). There was an evolution towards more flexible standards which applied 154 and 155 BGB promoting a similar solution to that of the knock-out rule. For examples of the German solution contrasted with U.C.C. 2-207, see Daniel Ostas & Burt A. Leete, Economic Analysis of Law as a Guide to Post-Communist Legal Reforms: The Case of Hungarian Contract Law, 32 Am. Bus. L.J. 355, 375-82 (1995); Peter Schlechtriem, The Battle of the Forms Under German Law, 23 Bus. Law. 655 (1968).

121. According to the UNIDROIT Principles:

"Where both parties use standard terms and reach agreement except on those terms, a contract is concluded on the basis of the agreed terms and of any standard terms which are common in substance unless one party clearly indicates in advance, or later and without undue delay informs the other party, that it does not intend to be bound by such a contract."

UNIDROIT Principles, supra note 50, art. 2.22.

122. See Bianca & Bonell, supra note 5, at 178-79; Herber & Czerwenka, supra note 53, at 106; Karl Neumayer, Das Wiener Kaufrechts-Ubereinkommen und die Sogennante "battle of the forms," in Freiheit und Zwang: Rechtliche, Wirtschaftliche und Gesellschaftliche Aspekete 501, 524 (1989); Ugo Draetta, La Battle of Forms nella prassi del commercio internazionale, 2 Rivista di Diritto Internazionale Privato e Processuale 319, 326 (1986); Walter von Petzinger, "Battle of Forms" und Allgemeine Geschaftsbedingungen im amerikanischen Recht, RIW 679 (1988); see also Kritzer, supra note 47, at 176; Official Records, supra note 1, 15, at 24.

123. Articles 18(1) and (3) state as follows:

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

(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."

CISG, supra note 1, art. 18(1), (3).

124. Some German decisions have applied the last shot rule to a conflict between standard terms governed by the 1964 Hague Formation Convention (ULF). OLG Hamm, U, 2 (1978), 35; OLG Hamm, W, 2 (1982), 29; LG Landshut, O, H, K (1976), 135.

125. See Official Records, supra note 1.

126. "When the offeror and the offeree have expressly (or implicitly) referred in the course of negotiations to general conditions the terms of which are mutually exclusive the conflict clauses should be considered not to form an integral part of the contract." Id.

127. Official Records, supra note 1, at 87-100.

128. Id. at 90-2, at 288-89. Id. at 101-02.

129. See Honnold, supra note 47, 132.1, at 192; Ludwig, supra note 11, at 353 (speaking about the written confirmations); Medina de Lemus, supra note 70, at 72; Michael-Joachim Bonell, Formation of Contracts and Precontractual Liability under the Vienna Convention on International Sale of Goods, in Formation of Contracts and Precontractual Liability 161 (ICC 1990); Eorsi, supra note 99, at 44; Michael Esser, Commercial Letters of Confirmation in International Trade: Austrian, French, German and Swiss Law and Uniform Law under the 1980 Sales Convention, 18 Ga. J. Int'l & Comp. L. 427, 448 (1988); Nicoll, supra note 52, at 28; Rehbinder, supra note 100, at 166; and Stoffel, supra note 99 n.9, at 56. But see Eugene Bucher, Preisvereinbarung als Voraussetzung der Vertragsgultigkeit beim Kauf, in Wiener Kaufrecht. Der Schweizerische Aussenhandel Unter dem Un-Uberinkommen Uber den Internationalen Warenkauf 59 (1991); Ulrich von Huber, Der Uncitral-Entwurf eines Ubereinkommens uber Internationale Warenkaufvertrage, 43 RZ 445 (1979).

130. U.C.C. 2-204(2); see Bianca & Bonell, supra note 5, 3, at 199; John O. Honnold, International Sales Law and the Open-Price Contract, in Homenaje A Jorge Barrera Graf, tomo II, 917 (1989).

131. Restatement (Second) of Contracts 22(1) (1981).

132. Id. 22(2).

133. "A contract may be concluded either by the acceptance of an offer or by conduct of the parties that is sufficient to show agreement." UNIDROIT Principles, supra note 50, art. 2.1.

134. See LG Frankfurt a.M (3/11 0 3/91), RIW, 11 (1991), 952, abstract in CLOUT, Case 6, at 4, U.N. Doc. A/CN.9/SER.C/ABSTRACT/1 (1994) (The contract for the sale of goods between a German buyer and an Italian seller without clearly defined offer and acceptance is concluded at the last moment in which the goods are delivered. At the time, all the provisions related to contract formation in CISG applied to this contract.); see also LG Hamburg (5 0 543/88), 1 Prax, 6 (1991), 400, abstract in CLOUT, Case 5, at 4, U.N. Doc. A/CN.9/SER.C/ABSTRACTS/1 (1994).

135. See Official Records, supra note 1, at art. 21, cmt. 2 (Secretariat's Commentary on article 21 of the 1978 Draft Convention Project).

136. The Secretariat's Commentary on the 1978 Draft Convention states that the fact that article 21 (article 23 today), in conjunction with article 16 (article 18 today) fixes the moment in which the contract is concluded may be interpreted in some legal systems to be determinative of the place in which it is concluded. See Official Records, supra note 1, at 26; Enderlein et al., supra note 47, at 107 (connecting time and place of the conclusion of the contract, the place is the one determined by the reaching of the acceptance); Kritzer, supra note 47, at 194; see also Bianca, supra note 100, at 108; Jorge Adame Goddard, el Contrato de Compraventa Internacional 115 (1994); Medina de Lemus, supra note 70, at 79; Piltz, supra note 54, 51, at 86.

In some comparative legal systems the moment and place of the contract conclusion are the same. See 130 BGB (F.R.G.); C.C. art. 1326.1, 1335 (Italy).

137. During the Diplomatic Conference a proposal made by the Italian delegation that suggested the extension of its field of application to the place of performance was rejected. See Official Records, supra note 1, at 291. See also Bianca & Bonell, supra note 5, 3.3, at 200; von Caemmerer & Schlechtriem, supra note 43, at 8 (2d ed. 1995); Jorge Adame Goddard, Estudios Sobre la Compraventa Internacional de Mercaderias 108 (1991).

138. See Honnold, supra note 1, 178, at 248.

139. See Diez-Picazo, supra note 106, at 5-6; Rafael Illescas Ortiz, El Derecho Uniforme del Comercio Internacional: elementos de base, in Estudios de Derecho Mercantil en Homenaje Al Profesor Manuel Broseta Pont, tomo II, 1799 (1995).

In the contracts for goods inspection it is said that the lack of formation norms leads to the application of the Vienna Sales Contracts Formation rules: Jena Vilus, Quality and Quantity Control of Goods-Inspection Contracts in the International Sale of Goods, 1 Uniform Law Review 145 (1992). Professor Audit has pointed out that many rules of the Convention, especially those of Part II, are not exclusive for the Sales contracts and consequently could inspire the arbitrators in a large number of cases. See Bernard Audit, The Vienna Convention and the Lex Mercatoria, in Lex Mercatoria and Arbitration 144 (Thomas E. Carbonneau ed., 1990).


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