Published by Manz, Vienna: 1986. Reproduced with their permission.

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B. The Offer [see also Formation of the Contract: Basic Principles and Open Questions]

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As for the revocation of an offer, the Convention distinguishes, on the one hand, between the revocation of an offer that already has reached the addressee and is therefore fully effective (Article 16), and, on the other hand, the withdrawal of an offer that has not yet reached the addressee (Article 15(2)). The possibility of withdrawing an offer until, or in any case simultaneously with, its arrival coincides with ULF Article 5(1) and § 130(1) sentence 2 of the German Civil Code.[170] The antagonism between legal systems that permit the revocation of offers for a fixed period or that have been declared irrevocable and those legal systems that prefer to bind the offeror to his offer already dominated the Hague [page 52] Conference. It erupted once again in Vienna.[171] The result was the same as the compromise already worked out by UNCITRAL, but the discussions made it clear that the various viewpoints will be reflected in divergent interpretations of the offeror's intent to be bound. In particular, a fixed time, which was understood by some delegates to be an irrebuttable presumption of an intent to be bound,[172] may be subject to different interpretations depending on the legal system in which the offeror lives.[172a]

Of course an offer can no longer be revoked once the contract has been concluded by an effective acceptance. In addition, Article 16(1), like ULF Article 5(4), makes the offer irrevocably binding from the moment the acceptance is sent. The offeror can also declare the offer to be irrevocable. He does not need to do this expressly, but rather his intent to be bound can be deduced from the circumstances relevant to the interpretation of the offer and particularly from his setting a fixed period during which the offer is open (Article 16(2)(a)).[173] Finally, the offer is binding if the offeree could reasonably rely on the irrevocability of the offer and has in fact relied on it (Article 16(2)(b)). The provision is designed to cover those cases in which not just the offer itself but rather other conduct by the offeror or the special circumstances and exigencies of the proposed transaction enable and necessitate the offeree's presumption that the offer would be valid for a certain length of time, such as when calculations or cover transactions had to be and actually were made. This rule essentially covers those situations for which ULF Article 5(2) is applicable.[174][page 53]

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FOOTNOTES

* The author of this book participated at the Conference as a member of the delegation from the Federal Republic of Germany. The views expressed here are personal to the author and do not necessarily represent the position of the F.R.G. or its delegation.

170. Unfortunately, a British proposal (A/Conf. 97/C.1/L.48) (= O.R. 94) concerning the withdrawal of a public offer found no support because of the misunderstanding that there is no such thing as a real public offer. See A/Conf. 97/C.1/SR.9 at 3 (= O.R. 278). In the end, though, one will probably have to decide the same way as suggested in that proposal: The public offer can be revoked if the revocation reaches the interested party before he has dispatched his acceptance. For a less restrictive view, see Dölle (Schlechtriem) ULF Articles 5 § 3 19 (revocation is effective if made in the same manner in which the offer was made, so long as the offer has not been accepted or the acceptance has not been dispatched).

171. See A/Conf. 97/C.1/L.48 (= O.R. 94) (British proposal); A/Conf. 97/C.1/SR.9 at 3 § 14 (= O.R. 277 et seq.) (discussion).

172. Compare A/Conf. 97/C.1/SR.9 at 3 § 15 (= O.R. 278) (Japan); id. § 35 (The Netherlands) and id. § 37 (= O.R. 279) (United Kingdom). Farnsworth confirms the danger of divergent interpretations. See Farnsworth, Formation at 3-11.

172a. See Feltham at 352.

173. In contrast to ULF Article 5(2), an offer open for a fixed period of time is not always irrevocable during that period. Instead, the fixed period serves merely as one indication of the offeror's intention.

174. Accord, Huber at 440. To some extent, this should resolve the cases which motivated the proposal by the GDR for precontractual liability (see infra at V.D.4.): Where the offeree has justifiably incurred expenses in reliance on an offer, the offer will usually be considered irrevocable. Other cases of damage caused by withdrawal from negotiations should be governed by domestic law, which may provide various remedies (e.g., precontractual liability and tort).

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