Go to Database Directory || Go to Information on other available case data
Search the entire CISG Database (case data + other data)

2,000 cases 7,500 case annotations

Article 18. Acceptance: Time and Manner

TEXT OF ARTICLE 18

(1) 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.

(2) An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.

(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.


OUTLINE OF ISSUES

Reproduced with permission of UNCITRAL

18A Criteria for acceptance

18A1 Statement of acceptance

18A2 Other conduct indicating assent

18A21 Acts of performance

18A22 Acts of preparation for performance

18A3 Silence or inactivity insufficient

18A31 Effect of advance approval by offeror

18B Effectiveness - time limits for acceptance (art. 18(2))

18B1 Acceptance must reach offeror within time limits (see art. 24)

18B11 Delay or loss in transmission; dispatch ineffective

18B2 Time limits

18B21 Within prescribed time

18B22 Within reasonable time; circumstances of transaction

18B23 Oral offer - acceptance immediately

18B231 Exception: Circumstances indicate otherwise

18C Assent by performing an act (art. 18(3))

18C1 Circumstances authorizing:

18C11 By virtue of offer

18C12 As result of practices established between parties

18C13 As result of usage (see art. 9)

18C2 Need for knowledge by offeror, or notice by offeree

18D Other issues concerning acceptance


DESCRIPTORS

Offers ; Acceptance of offer ; Receipt rule ; Commercial letters of confirmation


CASE ANNOTATIONS: UNCITRAL DIGEST CASES PLUS ADDED CASES

UNCITRAL has identified relevant cases in Digests containing case annotations for each article of the CISG. UNCITRAL cites 28 cases in its Digest of Art. 18 case law:

Argentina         1           France          4           Netherlands           1
Australia      1           Germany       9           Spain   1
Austria      1           Hungary       1           Switzerland   2
China 1 ICC      1 United States        3
Denmark      1 Mexico      1 TOTAL:   28

Presented below is a composite list of Art. 18 cases reporting UNCITRAL Digest cases and other Art. 18 cases. All cases are listed in chronological sequence, commencing with the most recent. Asterisks identify the UNCITRAL Digest cases, commencing with the 10 May 2002 citation reported below. Cases are coded to the UNCITRAL Thesaurus.

English texts and full-text English translations of cases are provided as indicated. In most instances researchers can also access UNCITRAL abstracts and link to Unilex abstracts and full-text original-language case texts sourced from Internet websites and other data, including commentaries by scholars to the extent available.

There are scholars who believe that there are circumstances in which the UNIDROIT Principles of International Commercial Contracts may be used to interpret or supplement this Article of the CISG. See match-up of this Article with counterpart provisions of the Principles and commentary on this subject. To the extent this reasoning fits, cases on the counterpart provisions of the UNIDROIT Principles may be relevant. To the extent available, such cases may be found on the Unilex website.
 

Germany 24 July 2009 Oberlandesgericht [Appellate Court] Celle

Germany 14 January 2009 Oberlandesgericht [Appellate Court] München
 

Netherlands 5 November 2008 Rechtsbank [District Court] Arnhem (Baufix Holz- und Bauetechnik GmbH v. Eurovite Nederland)

Slovak Republic 28 October 2008 Supreme Court (Wafers case) [translation available]

Germany 27 August 2008 Oberlandesgericht [Appellate Court] Thüringer [Jena] (Laser system case)

Czech Republic 25 June 2008 Supreme Court (Manufactured paint case) 18A [translation available]

Slovak Republic 19 June 2008 Supreme Court (Health care products case) 18A3 [translation available]

United States 16 June 2008 U.S. District Court [Minnesota] (BTC-USA Corporation v. Novacare et al.)

Germany 12 June 2008 Landgericht [District Court] Landshut (Metalic slabs case) 18A [translation available]

France 27 May 2008 Cour d'appel [Appellate Court] Rennes (Brassiere cups case) [translation available]

United States 9 May 2008 U.S. District Court [Delaware] (Solae, LLC v. Hershey Canada, Inc.) 18A

Netherlands 27 February 2008 Rechtbank [District Court] Breda (Interland Chemie BV v. Tessenderlo Chemie NV)
 

Germany 20 December 2007 Oberlandesgericht [Appellate Court] Oldenburg (Industrial tools case) 18A [translation available]

Austria 18 December 2007 Oberlandesgericht [Appellate Court] Innsbruck (Steel bars case) [translation available]

Ukraine 11 December 2007 Supreme Court of Ukraine (Crucible press case) [translation available]

Italy 21 November 2007 Tribunale [District Court] Rovereto (Takap B.V. v. Europlay S.r.l.)

United States 28 September 2007 Federal District Court [Michigan] (Easom Automation Systems, Inc. v. Thyssenkrupp Fabco. Corp.) 18A

Slovak Republic 17 September 2007 Regional Court [Appellate Court] in Nitra (Round wafers case) [translation available]

Switzerland 19 June 2007 Handelsgericht [Commercial Court] Aargau (Railway rails case) [translation available]

Germany 11 June 2007 Oberlandesgericht [Appellate Court] Dresden (Airbag parts case) [translation available]

Netherlands 29 May 2007 Gerechtshof [Appellate Court] 's-Hertogenbosch 18A ; 18B ; 18C [translation available]

Switzerland 27 April 2007 Tribunal cantonal [Appellate Court] Valais (Oven case) 18A2 [translation available]

United States 31 January 2007 Federal District Court [Minnesota] (Travelers Property Casualty Company of America v. Saint-Gobain Technical Fabrics Canada Limited) 18C

Germany 17 January 2007 Oberlandesgericht [Appellate Court] Saarbrücken (Marble panel case) 18A3 [translation available]

Netherlands 17 January 2007 Rechtbank [District Court] Arnhem (Hibro Compensatoren B.V. v. Trelleborg Industri Aktiebolag) 18A [translation available]
 

Germany 5 December 2006 Landgericht [District Court] Köln (Plastic faceplates for mobile telephones case) 18A [translation available]

Germany 29 June 2006 Landgericht [District Court] Gera (Laser system case) 18A2 ; 18A3 [translation available]

Germany 26 June 2006 Oberlandesgericht [Appellate Court] Frankfurt (Printed goods case) 18A3 [translation available]

Slovak Republic 26 May 2006 Supreme Court (Wafers case) [translation available]

Germany 28 April 2006 Landgericht [District Court] Dresden (Meat case)

United States 13 April 2006 Federal District Court [State of Washington] (Barbara Berry, S.A. de C.V. v. Ken M. Spooner Farms, Inc.)

Germany 3 April 2006 Oberlandesgericht [Appellate Court] Köln (Strawberry plants case) 18A [translation available]

Czech Republic 29 March 2006 Supreme Court (Carpet case) [translation available]

Russia 7 March 2006 Arbitration Award 37/2005 [translation in process]

Slovak Republic 27 February 2006 District Court Nitra (L.-K S.r.l. v. N. S.r.l.) [translation available]
 

Switzerland 22 December 2005 Handelsgericht [Commercial Court] Zürich (Retail fashion clothes case) [translation available]

Austria 29 November 2005 Oberster Gerichtshof [Supreme Court] 18A1 [translation available]

China 9 November 2005 CIETAC Arbitration Award [CISG/2005/04] (DVD machines case) 18A [translation available]

Canada 28 October 2005 Superior Court of Justice, Ontario (Chateau des Charmes Ltd v. Sabaté USA Inc. et al.)

Canada 6 October 2005 Canadian International Trade Tribunal (Cherry Stix Ltd. v. President of the Canada Borders Service Agency)

China 15 September 2005 CIETAC Arbitration Award [CISG 2005/15] (Wool and Wooltop case) 18A [translation available]

Austria 8 August 2005 Oberlandesgericht [Appellate Court] Linz (Spacers for insulation glass case) [translation available]

Germany 3 August 2005 Landgericht [District Court] Neubrandenburg (Pitted sour cherries case) 18A [translation available]

Germany 13 April 2005 Landgericht [District Court] Bamberg (Furnishings case) 18A2 [translation available]

Switzerland 5 April 2005 Bundesgericht [Supreme Court] 18A [translation available]

Austria 23 March 2005 Oberlandesgericht [Appellate Court] Linz (Conveyor band case) 18A1 ; 18A2 ; 18A3 [translation available]

Netherlands 10 February 2005 Netherland Arbitration Institute (interim award) 18A [English text]

Spain 31 January 2005 Audiencia Provincial [Appellate Court] Cuenca (Live calves case) [translation available]

Belgium 25 January 2005 Rechtbank van Koophandel [District Court] Tongeren (Scaforn International BV & Orion Metal BVBA v. Exma CPI SA) 18A [translation available]
 

Switzerland 2 December 2004 Kantonsgericht [District Court] Zug (Dextrose case) 18A21 [translation available]

Belgium 8 November 2004 Hof van Beroep [Appellate Court] Gent 18A [translation available]

United States 28 October 2004 Federal District Court [California] (Comerica Bank v. Whitehall Specialties, Inc.) 18A3

Switzerland 11 October 2004 Kantonsgericht [Canton Court] Freiburg 18A [translation available]

China 10 October 2004 Higher People's Court [Appellate Court] of Guangdong Province (America Inland Sea Incorporated and China Jiedong County Haifu Fishery v. Jiedong County Yuequn Fishery and Yuequn Hong) 18A [translation available]

Germany 6 October 2004 Oberlandesgericht [Appellate Court] Frankfurt

Germany 27 July 2004 Landgericht [District Court] Kiel (Fat for frying case) 18A3 [translation available]

Germany 20 July 2004 Oberlandesgericht [Appellate Court] Karlsruhe (Shoes case) [translation available]

Belgium 17 May 2004 Hof van Beroep [Appellate Court] Ghent (Cooling installation case) 18A [translation available]

Switzerland 29 April 2004 Handelsgericht [Commercial Court] St. Gallen 18A21 [translation available]

Netherlands 17 March 2004 Rechtbank [District Court] Arnhem 18A3 [translation available]

Germany 30 January 2004 Oberlandesgericht [Appellate Court] Düsseldorf 18A [translation available]

Germany 8 January 2004 Landgericht [District Court] Trier 18A [translation available]
 

Switzerland 11 December 2003 Kantonsgericht [District Court] Zug [detailed abstract available]

Germany 26 November 2003 Landgericht [District Court] Hamburg (Phtalic Anhydride case) 18A [translation available]

China 17 September 2003 CIETAC Arbitration Award [CISG 2003/14] (Australia cotton case) [translation available]

France 10 September 2003 Cour d’appel [Appellate Court] Paris 18A3 [translation available]

Germany 25 July 2003 Oberlandesgericht [Appellate Court] Düsseldorf 18A [translation available]

United States 5 May 2003 U.S. Circuit Court of Appeals [9th Cir.] (Chateau des Charmes Wines v. Sabate USA) 18A3

Belgium 28 April 2003 Cour d’appel [Appellate Court] Liège 18A3 [translation available]

China 18 April 2003 CIETAC Arbitration Award [CISG 2003/05] (Desulfurization reagent case) [English text]

Belgium 19 March 2003 Rechtbank van Koophandel [District Court] Veurne
 

United States 13 December 2002 California Court of Appeal (Regency Wines, Inc. v. Champagne Montaudon)

Ukraine 25 November 2002 Arbitration Award 18A [translation available]

Germany 29 October 2002 Oberlandesgericht [Appellate Court] Schleswig-Holstein (Stallion case) 18A ; 18C [translation available]

Netherlands 16 October 2002 Gerechtshof [Appellate Court] 's-Hertogenbosch 18A

Switzerland 13 September 2002 Cour de Justice [Appellate Court] Genève 18A ; 18B [translation available]

Belgium 15 May 2002 Hof van Beroep [Appellate Court] Gent 18A [translation available]

* United States 10 May 2002 U.S. District Court [Southern Dist. NY] (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.) 18C

Austria 7 March 2002 Oberlandesgericht [Appellate Court] Graz 18A3 [translation available]
 

Germany 21 December 2001 Landgericht [District Court] Hamburg (Natural stones case) 18A [translation available]

Germany 12 November 2001 Oberlandesgericht [Appellate Court] Hamm (Memory module case) 18A [translation available]

Germany 31 October 2001 Bundesgerichtshof [Federal Supreme Court] 18D [translation available]

Netherlands 12 July 2001 Arrondissementsrechtbank [District Court] Rotterdam 18A3 [translation available]

Belgium 10 July 2001 Rechtbank van Koophandel [Commercial Court] Oudenaarde (Textile case) 18A2 [translation available]

Germany 28 June 2001 Landgericht [District Court] Trier 18A3 [translation available]
 

* Germany 30 August 2000 Oberlandesgericht [Appellate Court] Frankfurt 18A [translation available]

Austria 15 June 2000 Oberlandesgericht [Appellate Court] Graz 18A [translation available]

Belgium 25 May 2000 Rechtbank van Koophandel [District Court]

Belgium 13 April 2000 Rechtbank van Koophandel [District Court]

Germany 6 April 2000 Landgericht [District Court] München 18A [translation available]

* Spain 28 January 2000 Tribunal Supremo [Supreme Court] 18A [translation available]

Hungary 2000 Legfelsobb Birosag [Supreme Court] (Mixing machine case) 18A [translation available]

ICC 2000 International Court of Arbitration, Case 10329 18A ; 18B [English text]
 

* United States 7 December 1999 Federal District Court [Illinois] (Magellan International v. Salzgitter Handel) 18A

Germany 3 December 1999 Oberlandesgericht [Appellate Court] München [translation available]

Germany 28 October 1999 Oberlandesgericht [Appellate Court] Braunschweig [translation available]

* France 21 October 1999 Cour d'appel [Appellate Court] Grenoble 18A3 [translation available]

China 30 June 1999 CIETAC Arbitration Award [CISG/1999/30] (Peppermint oil case) 18A1 ; 18A2 [translation available]

Belgium 28 April 1999 Rechtbank van Koophandel [District Court for Commercial Matters] Hasselt

Germany 27 April 1999 Oberlandesgericht [Appellate Court] Naumburg [translation available]

Germany 19 March 1999 Landgericht [District Court] Zwickau
 

Belgium 2 December 1998 Rechtbank van Koophandel [District Court] Hasselt 18A2

* Switzerland 30 November 1998 Handelsgericht [Commercial Court] Zürich [translation available]

Switzerland 5 November 1998 Bezirksgericht [District Court] Sissach 18A3 [translation available]

Germany 2 September 1998 Oberlandesgericht [Appellate Court] Celle [translation available]

* France 16 July 1998 Cour de Cassation [Supreme Court] 18A [translation available]

* Germany 9 July 1998 Oberlandesgericht [Appellate Court] Dresden 18A3 [translation available]

Austria 18 June 1998 Landesgericht [District Court] Wels

Spain 26 May 1998 Tribunal Supremo [Supreme Court] 18A

* Denmark 23 April 1998 Østre Landsret [Appellate Court] 18A3

Germany 24 March 1998 Landgericht [District Court] Berlin (Knitwear case) [translation available]

* Germany 11 March 1998 Oberlandesgericht [Appellate Court] München [translation available]

Spain 17 February 1998 Tribunal Supremo [Supreme Court] [2977/1996] 18A

Spain 17 February 1998 Tribunal Supremo [Supreme Court] [3587/1996] 18A

* France 27 January 1998 Cour de Cassation [Supreme Court] 18A3 [translation available]
 

China 15 December 1997 CIETAC Arbitration Award [CISG/1997/34] (Hot rolled coils case) 18C [translation available]

China 29 September 1997 CIETAC Arbitration Award [CISG/1997/28] (Aluminum oxide case) 18A3 [translation available]

United States 6 August 1997 Federal District Court [Southern Dist. NY] (Kahn Lucas v. Lark International) 18C

Germany 31 July 1997 Landgericht [District Court] Göttingen

Germany 19 June 1997 Landgericht [District Court] Hamburg

* Austria 18 June 1997 Oberster Gerichtshof [Supreme Court] 18A [translation available]

* Hungary 17 June 1997 Fovárosi Biróság [Metropolitan Court] Budapest

China 16 June 1997 CIETAC Arbitration Award [CISG/1997/15] (Leather case) 18A [translation available]

Netherlands 24 April 1997 Arrondissementsrechtbank [District Court] Rotterdam

European Court of Justice 20 February 1997 (Mainschiffahrts-Genossenschaft v. Gravihres Rhinanes) 18A

Switzerland 20 February 1997 Bezirksgericht [District Court] Saane [translation available]

ICC 23 January 1997 International Court of Arbitration, Case 8611 [translation available]

Russia 22 January 1997 Arbitration award 155/1996 18A [translation available]
 

China 31 December 1996 Fujian Higher People's Court (You Li v. Gold Star) 18A3 [translation available]

Netherlands 19 November 1996 Gerechtshof [Appellate Court] 's Hertogenbosch 18A

China 16 August 1996 CIETAC Arbitration Award [CISG/1996/39] (Dioctyl phthalate case) [translation available]

* Switzerland 10 July 1996 Handelsgericht [Commercial Court] Zürich 18A3 [translation available]

* Mexico 29 April 1996 Compromex Arbitration award 18A2 [translation available]

* Netherlands 24 April 1996 Gerechtshof [Appellate Court] ‘s-Hertogenbosch

Germany 28 February 1996 Landgericht [District Court] Oldenburg (Egg case) [translation available]

Germany 15 February 1996 Landgericht [District Court] Kassel [11 O 4187/95] 18A ; 18C [translation available]
 

* France 13 December 1995 Cour d'appel [Appellate Court] Paris 18B [translation available]

Austria 5 October 1995 Oberlandesgericht [Appellate Court] Linz

China 18 September 1995 Chansha Intermediate People's Court Economic Chamber (Skandinaviska v. Hunan Co) [translation available]

Germany 5 July 1995 Oberlandesgericht [Appellate Court] Frankfurt 18A [translation available]

* Germany 23 May 1995 Oberlandesgericht [Appellate Court] Frankfurt 18C [translation available]

* Australia 28 April 1995 Federal District Court, Adelaide (Roder v. Rosedown)

China 18 April 1995 CIETAC Arbitration Award [CISG/1995/06] (Clothes case) 18A2 [translation available]

* Germany 31 March 1995 Oberlandesgericht [Appellate Court] Frankfurt 18A [translation available]

Germany 8 March 1995 Oberlandesgericht [Appellate Court] München [translation available]

Russia 3 March 1995 Arbitration award 304/1993 [commentary available]

Russia 3 March 1995 Arbitration award 309/1993

ICC March 1995 International Court of Arbitration, Case 8213 18A [English text]

* Germany 8 February 1995 Oberlandesgericht [Appellate Court] München [7 U 1720/94] 18A [translation available]

Germany 8 February 1995 Landgericht [District Court] München [translation available]

Belgium 24 January 1995 Rechtbank van Koophandel [District Court] Hasselt 18A
 

Austria 8 November 1994 Landesgericht [District Court] Wels

Germany 25 August 1994 Landgericht [District Court] Düsseldorf (Fashion goods case) 18A3 [translation available]

Germany 14 July 1994 Landgericht [District Court] Kassel

* Germany 22 February 1994 Oberlandesgericht [Appellate Court] Köln 28A2 ; 18A3 [translation available]

* ICC 1994 International Court of Arbitration, Case 7844 18B1
 

Germany 1 December 1993 Landgericht [District Court] Memmingen

* Argentina 14 October 1993 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court] 18A ; 18A3 ; 18C

* China 1 April 1993 CIETAC Arbitration award [translation available]

* Germany 13 January 1993 Oberlandesgericht [Appellate Court] Saarbrücken (Doors case) 18A2 [translation available]
 

Switzerland 21 December 1992 Zivilgericht [Civil Court] Basel 18A ; 18A3 [translation available]

Germany 24 November 1992 Landgericht [District Court] Krefeld (Shoes case) [translation available]

* Germany 22 September 1992 Oberlandesgericht [Appellate Court] Hamm (Frozen bacon case) 18A1 [translation available]

* United States 14 April 1992 Federal District Court [Southern Dist. NY] (Filanto v. Chilewich) 18A ; 18A3 ; 18B1 ; 18C1

Germany 23 March 1992 Landgericht [District Court] Saarbrücken

Hungary 10 January 1992 Fovárosi Bíróság [Metropolitan Court] 18A1 ; 18B [translation available]
 

Germany 2 September 1991 Oberlandesgericht [Appellate Court] Celle

Germany 18 January 1991 Landgericht [District Court] Bielefeld
 

Germany 26 September 1990 Landgericht [District Court] Hamburg
 

ICC 1989 International Court of Arbitration, Case 5904


CASE DIGEST AND ANALYSIS
-   UNCITRAL's case law digest; and
-   An analysis of CISG jurisprudence

The UNCITRAL Digest of case law on the United
Nations Convention on the International Sale of Goods
[*]

A/CN.9/SER.C/DIGEST/CISG/18 [8 June 2004]
Reproduced with the permission of UNCITRAL

[Text of Article 18
Digest of Article 18 case law
-    Indication of assent to an offer
-    Silence or inactivity as assent to an offer
-    Effectiveness – time limits for acceptance
-    Effectiveness by performance of an act]]
ARTICLE 18

     (1) 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.  

     (2) An acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise. 

     (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.                 

DIGEST OF ARTICLE 18 CASE LAW

1. Article 18 is the first of five articles that deal with the acceptance of an offer. Paragraph (1) of article 18 addresses what constitutes the acceptance of an offer, while paragraphs (2) and (3) determine when the acceptance is effective. Article 19 qualifies article 18 by providing rules for when a purported acceptance so modifies an offer that the reply is a counter-offer.

2. Decisions have applied article 18 not only to offers to conclude a contract but also to acceptance of counter-offers,[1] proposals to modify the contract [2] and proposals to terminate the contract.[3] The provisions of article 18 have also been applied to matters not covered by the Sales Convention.[4]

Indication of assent to an offer

3. An offeree accepts an offer by a statement or other conduct indicating assent. Whether or not the statement or conduct indicates assent is subject to interpretation in accordance with the rules of paragraphs (1) and (2) of article 8.[5] All the circumstances, including negotiations prior to conclusion of the contract and the course of performance after conclusion, are to be taken into account in accordance with paragraph (3) of article 8.[6] If a statement or conduct indicating assent to an offer cannot be found there is no contract under Part II.[7]

4. Only the addressee of a proposal to conclude a contract is entitled to accept the offer.[8]

5. Whether an offeree's reply indicating assent to an offer but modifying that offer is an acceptance or a counter-offer is determined by article 19.[9] Whether a counter-offer is accepted is then determined by article 18.[10].

6. The indication of assent may be in an oral or written statement [11] or by conduct.[12] Conduct found to indicate assent include: buyer's acceptance of goods;[13] third party's taking delivery of goods;[14] issuance of letter of credit;[15] signing invoices to be sent to financial institution with request that it finance the purchase;[16] sending a reference letter to an administrative agency.[17]

Silence or inactivity as assent to an offer

7. In the absence of other evidence indicating assent to an offer, an offeree's silence or inactivity on receiving an offer does not amount to an acceptance.[18] By virtue of article 9(1), parties are bound by practices established between themselves and these practices may indicate assent to an offer notwithstanding the silence or inactivity of the addressee.[19] Parties are also bound by usages as provided in paragraphs (1) and (2) of article 9 and these usages may give effect to an offer notwithstanding the addressee's silence or inactivity.[20] One court stated that the course of dealing between the parties created a duty on a party to object promptly to an offer and the party's delay in objecting constituted acceptance of the offer.[21] A buyer's failure to exercise any remedy under the Convention in response to the seller's proposal that the buyer examine the delivered goods and resell them was construed as acceptance of an offer to terminate the contract.[22]

Effectiveness -- time limits for acceptance

8. Paragraph (2) of article 18 provides that, except in the circumstances set out in paragraph (3), an acceptance becomes effective at the moment it reaches the offeror if it does so within the time limit for acceptance. The acceptance “reaches” the offeror when article 24 is satisfied. By virtue of article 23 a contract is concluded when the acceptance becomes effective.[23]

9. To be effective, however, the acceptance must reach the offeror within the time limits set by paragraph (2) of article 18 as modified by article 21 on late acceptance. Article 20 provides rules of interpretation for determining the time limits. An offer cannot be accepted after the time limit expires unless the offeror informs the offeree without delay that the acceptance is effective.[24]

Effectiveness by performance of act

10. An acceptance is effective at the moment the offeree performs an act when the offeree is authorized to indicate its acceptance of the offer by an act by virtue of the offer or as a result of practices which the parties have established between themselves or of usage. Several decisions have cited paragraph (3) rather than paragraph (1) for the proposition that a contract may be concluded by the performance of an act by the offeree.[25]


FOOTNOTES

* The present text was prepared using the full text of the decisions cited in the Case Law on UNCITRAL Texts (CLOUT) abstracts and other citations listed in the footnotes. The abstracts are intended to serve only as summaries of the underlying decisions and may not reflect all the points made in the digest. Readers are advised to consult the full texts of the listed court and arbitral decisions rather than relying solely on the CLOUT abstracts.

[Citations to cisgw3 case presentations have been substituted [in brackets] for the case citations provided in the UNCITRAL Digest. This substitution has been made to facilitate online access to CLOUT abstracts, original texts of court and arbitral decisions, and full text English translations of these texts (available in most but not all cases). For citations UNCITRAL had used, go to <http://www.uncitral.org/english/clout/digest_cisg_e.htm>.]

1. CLOUT case No. 291 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 23 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950523g1.html>] (delivery of 2,700 pairs of shoes in response to order of 3,400 pairs was a counter-offer accepted by buyer when it took delivery).

2. CLOUT case No. 251 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 30 November 1998, available online at <http://cisgw3.law.pace.edu/cases/981130s1.html>] (no acceptance in communications regarding modification) (see full text of the decision); CLOUT case No. 347 [GERMANY Oberlandesgericht [Appellate Court] Dresden 9 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980709g1.html>] (proposal to modify in commercial letter of confirmation not accepted) (see full text of the decision); CLOUT case No. 193 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 10 July 1996, available online at <http://cisgw3.law.pace.edu/cases/960710s1.html>] (proposal to modify not accepted by silence of addressee); CLOUT case No. 133 [GERMANY Oberlandesgericht [Appellate Court] München 8 February 1995, available online at <http://cisgw3.law.pace.edu/cases/950208g1.html>] (proposal to modify time of delivery not accepted) (see full text of the decision); CLOUT case No. 203 [FRANCE Cour d'appel [Appellate Court] Paris 13 December 1995, available online at <http://cisgw3.law.pace.edu/cases/951213f1.html>] (proposal to modify in letter of confirmation not accepted).

3. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>] (acceptance of proposal to terminate contract); [CHINA CIETAC Arbitration Award case No. 75 of 1 April 1993; available at <http://cisgw3.law.pace.edu/cases/930401c1.html>] (acceptance of proposal to terminate).

4. CLOUT case No. 308 [AUSTRALIA Roder v. Rosedown [Federal Court] 28 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950428a2.html>] (applying art. 18 to determine whether retention of title clause accepted).

5. [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 30 August 2000, available online at <http://cisgw3.law.pace.edu/cases/000830g1.html>] (sending of promissory note interpreted as not an acceptance).

6. See, [MEXICO Compromex Arbitration Award 29 April 1996, available online at <http://cisgw3.law.pace.edu/cases/960429m1.html>] (alleged seller's letter in reply to offer, letter of credit naming it as payee, and subsequent conduct of the parties evidenced conclusion of contract); CLOUT case No. 23 [UNITED STATES Filanto v. Chilewich Federal District Court [New York] 14 April 1992 available online at <http://cisgw3.law.pace.edu/cases/920414u1.html>] (course of dealing created duty to respond to offer).

7. CLOUT case No. 173 [HUNGARY Fovárosi Biróság [Metropolitan Court] Budapest 17 June 1997, available online at <http://cisgw3.law.pace.edu/cases/970617h1.html>] (no clear agreement to extend distribution contract); CLOUT case No. 135 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 31 March 1995, available online at <http://cisgw3.law.pace.edu/cases/950331g1.html>] (correspondence did not reach agreement on quality of glass ordered).

8. CLOUT case No. 239 [AUSTRIA Oberster Gerichtshof [Supreme Court] 18 June 1997, available online at <http://cisgw3.law.pace.edu/cases/970618a3.html>] (remand to determine whether the offer was made to a mercantile agent).

9. CLOUT case No. 242 [FRANCE Cour de Cassation [Supreme Court] 16 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980716f1.html>] (reply with different jurisdiction clause a material modification under art. 19 and therefore a counter-offer); CLOUT case No. 227 [GERMANY Oberlandesgericht [Appellate Court] Hamm 22 September 1992, available online at <http://cisgw3.law.pace.edu/cases/920922g1.html>] (reply with reference to "unwrapped" bacon a counter-offer under art. 19 and not acceptance under art. 18).

10. CLOUT case No. 232 [GERMANY Oberlandesgericht [Appellate Court] München 11 March 1998, available online at <http://cisgw3.law.pace.edu/cases/980311g1.html>] (buyer, by performing contract, accepted seller's standard terms that modified buyer's offer) (see full text of the decision); CLOUT case No. 227 [GERMANY Oberlandesgericht [Appellate Court] Hamm 22 September 1992, available online at <http://cisgw3.law.pace.edu/cases/920922g1.html>] (buyer accepted counter-offer when its reply did not object to counter-offer).

11. CLOUT case No. 395 [SPAIN Tribunal Supremo [Supreme Court] 28 January 2000, available online at <http://cisgw3.law.pace.edu/cases/000128s4.html>] (faxed unconditional acceptance); CLOUT case No. 308 [AUSTRALIA Roder v. Rosedown [Federal Court] 28 April 1995, available online at <http://cisgw3.law.pace.edu/cases/950428a2.html>] (statement in offeree's letter interpreted as an acceptance) (see full text of the decision).

12. [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 30 August 2000, available online at <http://cisgw3.law.pace.edu/cases/000830g1.html>] (sending fax and promissory note could be act indicating acceptance but interpretation of documents showed no such acceptance): CLOUT case No. 291 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 23 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950523g1.html>] (seller's delivery of fewer pairs of shoes than ordered was a counter-offer accepted by buyer taking delivery).

13. CLOUT case No. 292 [GERMANY Oberlandesgericht [Appellate Court] Saarbrücken 13 January 1993, available online at <http://cisgw3.law.pace.edu/cases/930113g1.html>] (buyer's acceptance of goods indicated assent to offer, including standard terms in letter of confirmation) (see full text of the decision).

14. CLOUT case No. 193 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 10 July 1996, available online at <http://cisgw3.law.pace.edu/cases/960710s1.html>] (third party taking delivery for third party was act accepting increased quantity of goods sent by seller) (see full text of the decision).

15. CLOUT case No. 417 [UNITED STATES Magellan International v. Salzgitter Handel Federal District Court [Illinois] 7 December 1999, available online at <http://cisgw3.law.pace.edu/cases/991207u1.html>] (pleading stated cause of action by alleging facts showing parties concluded contract of sale).

16. [ARGENTINA Cámara Nacional de los Apelaciones en lo Comercial [Appellate Court] 14 October 1993, available online at <http://cisgw3.law.pace.edu/cases/931014a1.html>].

17. [UNITED STATES Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc. Federal District Court [New York] 10 May 2002, available online at <http://cisgw3.law.pace.edu/cases/020510u1.html>].

18. CLOUT case No. 309 [DENMARK Østre Landsret [Eastern Appellate Court] 23 April 1998, available online at <http://cisgw3.law.pace.edu/cases/980423d1.html>] (parties had no prior dealings); CLOUT case No. 224 [FRANCE Cour de Cassation [Supreme Court] 27 January 1998, available online at <http://cisgw3.law.pace.edu/cases/980127f1.html>] (without citation of the Sales Convention, court of cassation finds that court of appeal did not ignore rule that silence does not amount to an acceptance); CLOUT case No. 193 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 10 July 1996, available online at <http://cisgw3.law.pace.edu/cases/960710s1.html>] (no acceptance where addressee silent and no other evidence of assent).

19. CLOUT case No. 313 [FRANCE Cour d'appel [Appellate Court] Grenoble 21 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991021f1.html>] (in prior transactions seller had filled buyer's without notifying the buyer); CLOUT case No. 23 [UNITED STATES Filanto v. Chilewich Federal District Court [New York] 14 April 1992 available online at <http://cisgw3.law.pace.edu/cases/920414u1.html>] (course of dealing created duty to respond to offer).

20. [NETHERLANDS Gerechtshof [Appellate Court] 's-Hertogenbosch 24 April 1996, available online at <http://cisgw3.law.pace.edu/cases/960424n1.html>]; CLOUT case No. 347 [GERMANY Oberlandesgericht [Appellate Court] Dresden 9 July 1998, available online at <http://cisgw3.law.pace.edu/cases/980709g1.html>] (buyer who sent commercial letter of confirmation did not establish existence of international usage by which silence constitutes assent). See also Opinion of Advocate General Tesauro, EC Reports, 1997, I-911 ff. (commercial letter of confirmation enforceable notwithstanding recipient's silence if international usage established).

21. CLOUT case No. 23 [UNITED STATES Filanto v. Chilewich Federal District Court [New York] 14 April 1992 available online at <http://cisgw3.law.pace.edu/cases/920414u1.html>]. See also CLOUT case No. 313 [FRANCE Cour d'appel [Appellate Court] Grenoble 21 October 1999, available online at <http://cisgw3.law.pace.edu/cases/991021f1.html>] (seller with manufacturing samples and original material in its possession should have questioned buyer about absence of order from buyer).

22. CLOUT case No. 120 [GERMANY Oberlandesgericht [Appellate Court] Köln 22 February 1994, available online at <http://cisgw3.law.pace.edu/cases/940222g1.html>].

23. CLOUT case No. 203 [FRANCE Cour d'appel [Appellate Court] Paris 13 December 1995, available online at <http://cisgw3.law.pace.edu/cases/951213f1.html>] (contract concluded before receipt of letter of confirmation so no acceptance of the standard terms referred to in letter).

24. [ICC Court of Arbitration, case No. 7844 of 1994, available online at <http://cisgw3.law.pace.edu/cases/947844i1.html>].

25. CLOUT case No. 416 [UNITED STATES KSTP-FM v. Specialized Communications State District Court [Minnesota] 9 March 1999, available online at <http://cisgw3.law.pace.edu/cases/990309u1.html>] (if Convention applicable, party accepted by performance under art. 18(3)) (see full text of the decision); CLOUT case No. 193 [SWITZERLAND Handelsgericht [Commercial Court] Zürich 10 July 1996, available online at <http://cisgw3.law.pace.edu/cases/960710s1.html>] (third party taking delivery of greater number of goods than contracted for an acceptance under art. 18(3), but not acceptance of seller's proposal to modify price); CLOUT case No. 291 [GERMANY Oberlandesgericht [Appellate Court] Frankfurt 23 May 1995, available online at <http://cisgw3.law.pace.edu/cases/950523g1.html>] (delivery of goods an acceptance under art. 18(3) but because amount differed materially from order the acceptance is a counter-offer under art. 19).


ANALYSIS OF CISG CASE LAW

Reprinted by special permission of Northwestern University School of Law. 34 Northwestern Journal of International Law and Business (Winter 2004) 299-440.[*]

excerpt from

The Interpretive Turn in International Sales Law:
An Analysis of Fifteen Years of CISG Jurisprudence

Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene,
Virginia Maurer and Marisa Pagnattaro

[...]

3. Rules of Acceptance: Article 18

Because Article 23 states that "a contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention," ascertaining whether an offer has been accepted according to Article 18 is critical in determining the parties' contract rights and remedies. Professor Honnold emphasizes the theme of open communication that runs through Article 18.[236] Difficult issues of communication arise most frequently in cases involving when silence or inactivity may be a valid method of acceptance, when commercial letters of confirmation indicate assent, and whether standard terms included in the offer and acceptance have been fairly communicated so as to become part of the contract. [page 343]

Article 18(1) states that silence, by itself, does not constitute acceptance. However, it makes clear that silence or inactivity linked with other circumstances may be enough to indicate assent. If the parties have a practice of accepting without notice, if industry usage has developed, or if other circumstances indicate that silence is reasonable, silence or inactivity may be a valid method of acceptance.

National courts have concluded that silence indicated acceptance when silence qua acceptance was reasonable under the circumstances. When a seller offered to terminate a contract after receiving notice of non-conformity and announced that he would resell the goods himself, the buyer's silence and failure to seek remedy for breach was an implied acceptance, according to a German court. [237] While the court recognized that silence or inactivity alone is not enough for acceptance under Article 18(1), it concluded that "together with other circumstances ... silence can indeed be important and may be interpreted as the acceptance of an offer of cancellation."[238] A French court also found that silence operated as acceptance when a buyer accepted goods without reservation.[239] The buyer subsequently sought to reject the goods, claiming that his silence about the condition of the goods did not indicate acceptance, but the court found that the non-conformity claimed by the buyer was obvious to an expert such as the buyer who had specified the modifications in the goods.[240]

Silence may also be acceptance where the parties have an established pattern or practice in their dealings. If a seller has an established practice of filling orders without expressly accepting them, then the buyer has a right to expect that its orders will be filled.[241] In the French case of Sté Calzados Magnanni v. Sarl Shoes General Int'l, the seller maintained that it had never received the orders. The French court was unconvinced and found acceptance of the orders by silence based on the practices established between the parties.[242] The circumstances that indicated acceptance by silence also included the seller's awareness of the buyer's intention to enter the footwear market. [243] A U.S. court also found that silence was acceptance when a seller did not object to an arbitration clause in a contract for a period [page 344] of five months. The court held that the prior practices of the parties placed a duty on the seller to alert the buyer of its objection to the incorporation of the clause.[244] The court supported its conclusion by citing Articles 18(1) and 18(3) of the CISG, the Restatement (Second) of Contracts, and several cases from its jurisdiction. [245]

Commercial letters of confirmation raise special issues regarding acceptance by silence.[246] In some national legal systems, most notably Germany, silence upon receipt of a commercial letter of confirmation indicates acceptance.[247] According to Professor Schlechtriem, the German rule which allows unanswered letters of confirmation to become part of the contract was expressly rejected at the Vienna Convention.[248] Consequently, Professor Schlechtriem maintains that letters of confirmation that modify or add to a contract are ineffective under the CISG, unless the sending of such letters amounts to a usage under Article 9(2).[249]

National courts have differed in how they interpret the trade usage provision regarding commercial letters of confirmation. A Swiss court found that the buyer's failure to respond to a letter of confirmation from the Austrian seller constituted acceptance according to trade usage.[250] The court stated that both parties knew or ought to have known that under both Swiss and Austrian law, silence or inactivity can be regarded as an acceptance when there is no reply to a commercial letter of confirmation.[251] Professor Schlechtriem criticized this ruling on two counts. First, the court misstated the law of Austria, where the purported rule had been rejected. Second, "the usage must apply to the parties in the particular trade, and must be observed by them," for the exception to Article 18(1) to apply.[252]

A Swiss court also found that the sender was entitled to regard silence as acceptance to a letter of confirmation even where the letter modified [page 345] payment terms.[253] The court stated that good faith is the key to determining whether a sender may assume the recipient of the confirmation letter intended to consent to the terms of the letter.[254] Although the court did not discuss prior practices or usage in this case, the recipient's conduct, accepting the first check that was attached to the letter of confirmation, was sufficient to support a conclusion that the recipient intended to be bound by the terms of the confirmation letter.[255]

Two German cases reiterated the more conservative view that trade usage must be international in order for it to be implied into a contract. In one case, the court distinguished the use of letters of confirmation in a national context from the international context.[256] A French buyer and a German seller had concluded an oral contract regarding the price of chocolates. When the buyer was silent as to the different terms in the seller's letter of confirmation, the court held that the terms of the confirmation letter were not part of the contract as such letters could not be considered part of international trade usage as required by Article 9(2). The court concluded that although the practice was well recognized in Germany, it was not so recognized in France.[257] A German court held that a buyer seeking to hold a seller to the modified price contained in a letter of confirmation did not establish that there was a usage known in international trade recognizing silence as acceptance to a commercial letter of confirmation.[258]

When a party seeks to incorporate standard terms into an offer or [page 346] acceptance, courts consider whether such terms have been fairly communicated to the other party. While the CISG does not specifically address the incorporation of standard terms, national courts generally agree that its provisions on contract formation and interpretation determine whether standard terms have been validly incorporated into the contract. An alternative view is that Article 4 makes it clear that the validity of standard terms is beyond the scope of the Convention, so that validity issues are determined by domestic law.[259] Civil law legal systems have emphasized that a party must be reasonably aware of the terms the other seeks to incorporate but how much information about standard terms must be communicated is less clear from the decisions.

In general, a party that wishes to incorporate standard terms must show good faith efforts to communicate those terms to the other party. Failure to provide standard terms in the other party's language, failure to note that standard terms are listed on the back of a form, and failure to provide the text of standard terms have lead courts to exclude such terms from the contract. In ISEA Industrie S.p.A. v. Compagnie d'Assurances,[260] a French court held that where the buyer's standard terms were printed on the back of a form and the seller had signed only the front page, the standard terms were not part of the contract. The court held that the terms of the contract had already been determined and the seller's attempt to impose additional terms was ineffective. A German court, however, held that where standard terms were printed on the back of the order form in both parties' languages and the front side of the order form specifically referred to the standard terms, the terms were validly incorporated into the contract.[261] Likewise, where an offer made reference in bold letters to particular industry standards and the seller made repeated reference to such standard throughout negotiations, the buyer was aware or should have been aware that the general conditions were part of the agreement, according to Articles 8(1) and (3).[262] [page 347]

The Federal Supreme Court of Germany addressed the issue of the type of information needed to prove intent to standard or general terms.[263] Using Articles 14 and 18, supplemented by Article 8's rules on interpretation, the court held that the seller's "Sales and Delivery Terms," which included a notice of warranty exclusion, were not part of the parties' contract. Although the contract referred to such terms, a copy of the seller's Sales and Delivery Terms was never transmitted to the buyer. The court held that "the user of general terms and conditions is required to transmit the text to the other party or make it available in another way."[264] According to the court, the burden to provide the terms was on the party wishing to insert such clauses.[265] The court emphasized the fact that parties to an international contract should not be expected to know the particular terms and conditions that might be familiar to parties that share the same national legal system and business customs.[266] Requiring one party to make general terms and conditions available to the other party, would, according to the court, promote the CISG's goals of good faith and uniformity. [267] Similarly, an Austrian court held that a seller's attempt to incorporate standard terms requiring a contract to be in writing was not valid.[268] Although the seller had proposed such terms as part of a master contract prior to a subsequent sales contract, the master contract was never concluded, so that reference to terms in that agreement could not be binding on the buyer in the subsequent contract.[269] The court recognized that contractual negotiations, prior practices and trade usages may provide evidence that the offeree was aware of the inclusion of standard terms. This transaction was the parties' first together, however, and the court found that [page 348] the offeree had no reason to be aware that the general terms were to be included in this deal.[270]

[...]


FOOTNOTES

* For a subsequent text on this subject by these authors, see Larry A. DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer & Marisa Pagnattaro, "International Sales Law: A Critical Analysis of CISG Jurisprudence", Cambridge University Press (2005) 241 p.

[...]

236. John O. Honnold, Uniform Law For International Sales § 164 at 180 (3d ed. 1999).

237. See Oberlandesgericht [Provincial Court of Appeal] [OLG] Köln 22 U 202/93, Feb. 22, 1994 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/940222g1.html> [English translation by Walter, Conston, Alexander & Green, P.C., editors: William M. Barron, Esq.; Birgit Kurtz, Esq.].

238. Id.

239. See Hughes v. Société Technocontact, Cour de Cassation [Supreme Court] [CASS.], B 95-19.448, 180 P, Jan. 27, 1998 (Fr.), available at <http://cisgw3.law.pace.edu/cases/980127f1.html> [English translation by Charles Sant 'Elia, translation edited by Kirstin Stadtländer].

240. Id.

241. See Sté Calzados Magnanni v. Sarl Shoes General Int'l, CA, 96J/00101, Oct. 21, 1999 (Fr.), available at <http://cisgw3.law.pace.edu/cases/991021f1.html> [English translation by Charles Sant 'Elia, translation edited by Kirstin Stadtländer].

242. Id.

243. Id.

244. Filanto, S.p.A. v. Chilewich Int'l Corp., 789 F. Supp. at 1240.

245. Id.

246. See generally, Maria del Pilar Perales Viscasillas, Battle of the Forms, Modification of Contract, Commercial Letters of Confirmation: Comparison of the United Nations Convention on Contracts for the International Sale of Goods (CISG) with the Principles of European Contract Law (PECL), 14 Pace Int' L. Rev. 153 (2002) (describing the variability in legal interpretations of silence) [available at <http://cisgw3.law.pace.edu/cisg/biblio/pperales.html>].

247. See Einderlein & Maskow, supra note 20, at 92; Maria del Pilar Perales Viscasillas, The Formation of Contracts and the Principles of European Contract Law, 13 Pace Int'l Rev. 371, 391 (2001) (discussing legal treatment of confirmation letters in Germany, Austria, and Switzerland. See also, UCC § 2-201 (2) (2003) (written confirmation rule).

248. See Fletchner, supra note 214, at 246-47.

249. Id.

250. See W.T. GmbH v. P, Zivilgericht [Basel Civil Court][ZG] P4 [1991]/238, Dec. 21, 1992, (Switz.) available at <http://cisgw3.law.pace.edu/cases/921221s1.html> [English translation by Yvonne P. Salmon].

251. Id.

252. See Fletchner, supra note 214.

253. See BG Sissach, A 98/126, Nov. 5, 1998 (Switz.), available at <http://cisgw3.law.pace.edu/cases/981105s1.html> [English translation by Ruth M. Janal].

254. Id.

255. Id.

256. Landgericht [District Court][LG] Frankfurt 3/13 O 3/94, Jul. 5, 1995 (F.R.G.), available at [<http://cisgw3.law.pace.edu/cases/950705g1.html>] [English translation by Dr. Peter Feuerstein, translation edited by Chantal Niggemann].

257. Id. Although the court did not view the buyer's silence regarding the letter of confirmation as acceptance, it did, nevertheless, find that the letter was evidence of the terms of the oral contract and held for the seller.

258. See OLG Dresden 7 U 720/98, Jul. 9, 1998 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/980709g1.html> [English translation by Ruth M. Janal, translation edited by Camilla Baasch Andersen]. But see OLG Saarbrücken 1 U 324/99-59, Feb. 14, 2001 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/010214g1.html> [English translation by Ruth M. Janal, translation edited by Camilla Baasch Andersen]. In this case, the court held that the CISG applied to the contract for the sale of doors and windows and applied the provisions on notice for specifying a defect, but looked to the German Civil Code regarding acceptance of terms in a letter of confirmation. The court stated, "[i]t is an accepted trade usage that a tradesperson who receives a letter of confirmation has to object to the letter's content if he does not wish to be bound by it. If he does not object, the contract is binding with the content given to it in the letter of confirmation, unless the sender of the letter has either intentionally given an incorrect account of the negotiations, or the content of the letter deviates so far from the result of the negotiations that the sender could not reasonably assume the recipient's consent. The recipient's silence causes the contract to be modified or supplemented in accordance wit the letter of confirmation." Id.

259. See Dr. Martin Schmidt-Kessel, On the Treatment of General Terms and Conditions of Business under the UN Convention on Contracts for the International Sale of Goods (CISG), available at <http://cisgw3.law.pace.edu/cases/011031g1.html> (criticizing interpretation of German Federal Supreme Court of 31 October 2001, VII ZR 60/01 in which the Supreme Court held that "the user of general terms and conditions is required to transmit the text to the other party or make it available in another way").

260. Cour d'appel [Appeal Court][C.A.] Paris 95-018179, Dec. 13, 1995 (Fr.), available at <http://cisgw3.law.pace.edu/cases/951213f1.html> [English translation by Charles Sant 'Elia]. In the same case, the court held that standard terms in a confirmation letter from the seller were not valid when the letter was sent after the contract had been performed.

261. Amtsgericht [Petty District Court][AG] Nordhorn 3 C 75/94, Jun.14, 1994 (F.R.G.), available at <http://cisgw3.law.pace.edu/cases/940614g1.html> [English translation by Ruth M. Janal].

262. [...] Tribunal [District Court] de Commerce Nivelles, [Kh] R.G. 1707/93, Sept. 19, 1995 [(Belg.)], available at <http://cisgw3.law.pace.edu/cases/950919b1.html> [English translation by Julien Soupizet, translation edited by Thalia Kruger].

263. BGH VII ZR 60/01, Oct. 31, 2001 [(F.R.G.)], available at [<http://cisgw3.law.pace.edu/cases/011031g1.html>] [English translation by William M. Barron and Birgit Kurtz, Alston & Bird LLP].

264. Id.

265. Id.

266. Id.

267. Id. Although the court relied on the CISG, it also noted that the Uniform Sales Law requires users of general terms and conditions to transmit the text or make it available in another way. The Supreme Court of Germany's decision to require the terms to be transmitted has been criticized as "contrary to commercial practice." Whether or not the terms should be incorporated in the contract should turn on whether a reasonable party was aware or could not have been unaware of the intent to include such terms. One author maintains that a general duty to transmit standard terms goes too far and is not supported by the Convention. This author fears that the development of a general duty to transmit may prevent even better known standard terms from being included, absent transmission. See Schmidt-Kessel, supra note 259 ("The development of a general duty to transmit without recognizable exceptions would have the effect that other, better known standard clauses -- such as Incoterms 2000, the several ECE-Terms, or branch-specific terms such as GAFTA 100 or the rules of the Sugar Association of London -- could not become the basis of contracts without being transmitted.").

268. OGH, SZ 10 Ob 518/95, Feb. 6, 1996, supra note 134.

269. Id.

270. Id. Another Belgian case stated that standard terms regarding contractual damages mentioned in a seller's invoice were not part of the contract because there was no evidence that the buyer had knowledge of the standard terms and so could not accept them. The written contract did not include or even mention the standard terms. See Rechtbank van Koophandel Veurne [District Court] [Kh] A/00/00665, Apr. 25, 2001 (Belg.), available at <http://cisgw3.law.pace.edu/cases/010425b1.html> [English translation by Vincent Naveaux, translation edited by Sieg Eiselen].

[...]

Go to complete text of Analysis of Fifteen Years of CISG Jurisprudence


ANNOTATED COMPARATIVES
-  UNIDROIT Principles
-  PECL comparative

Commentary on the manner in which the UNIDROIT Principles
Arts. 2.6 and 2.7 may be used to interpret or supplement CISG Art. 18

Jorge Oviedo Albán [*]
February 2005

  1. Acceptance of an offer
  2. Mode of acceptance
    2.1.   Express acceptance
    2.2.   Tacit acceptance by conduct and acceptance by silence
    2.3.   Necessity of communicating acceptance
    2.4.   Moment when acceptance becomes effective
  3. Time of acceptance
    3.1.   The offeror has fixed a time for acceptance
    3.2.   The offeror has not fixed a time for acceptance
    3.3.   Oral offers
  4. Conclusions

1. Acceptance of an offer

Under the Convention and also under the UNIDROIT Principles, the contract is concluded when an offer is accepted.[1]

Art. 18(1) of the Convention defines acceptance in the following terms:

"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."

Thus, the acceptance must be in the form of an active assent to an offer.[2] Art. 2.6(1) of the UNIDROIT Principles defines acceptance in an identically worded provision:

"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."

In general, it is accepted that under both instruments the contract is perfected when the offer and the acceptance coincide. The acceptance may be given in several ways, and it does not necessarily have to consist of an expressed act of declaration of will. Both the Convention and the Principles establish that the acceptance can consist of a declaration or an act of the offeree that indicates assent.[3]

2. Mode of acceptance

      2.1 Express acceptance

The acceptance of an offer can be express or tacit. The first is expressly presented as the assent of the offeree. The second, when it is an act that constitutes acceptance, is expressed by means of acts that denote such an assent, i.e., acts of contractual execution. This form of acceptance has been called "acceptance by conduct or an act of dominion".[4]

      2.2 Tacit acceptance by conduct and acceptance by silence

In some cases, and especially in business transactions, it is not unusual to conclude a contract without the acceptance having been manifested in an express way, but rather tacitly by conduct. In such cases it might be difficult to precisely determine the moment and place of acceptance. However, based on other factors or elements present in previous orders or dealings between the parties, the legal effect of acceptance can be deduced from the surrounding circumstances in order to arrive at the desired effect that is the formation of the contract.[5]

Some legal systems are not clear as to the validity of the acceptance by silence, and neither is the doctrine unanimously accepted or recognized as a likely or effective way of acceptance. As a general rule, silence is not effective to denote the acceptance of the offer.[6] To be effective as an acceptance, silence must be accompanied by acts that allow the inference or deduction of the offeree's acceptance of the offered contract, adding as requirement that the offeree has knowledge of the offer in the terms provided by the applicable in the law. It is also necessary to mention that tacit acquiescence must be manifested in unequivocal facts of contractual execution; it cannot consist of simple manifestations of the offeree's general intention in the sense of having received the offer or merely agreeing to it. As with a proposal which constitutes an offer, the acceptance must be characterized by the presence of the intention of the relevant party to bind himself to a contractual obligation when manifesting such assent to an offer.

The above remarks point to a difference between silence, on the one hand, and acceptance by conduct,[7] on the other hand: the mere silence or inactivity of the parties is not sufficient to conclude a contract, but when it is accompanied by what are denominated unequivocal acts of contractual execution, all those acts that entail execution of the contractual benefits or preparation of the same, it is effective.[8]

The Convention requires that the acceptance of the offer be express, but it also permits acceptance by conduct. CISG Art. 18(1), first sentence, reads:

"A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance" [emphasis added].

Art. 2.6(1) of the UNIDROIT Principles, first sentence, is conceived and worded in identical manner:

"A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance" [emphasis added].

CISG Art. 18(1), second sentence, points out that silence alone does not constitute acceptance:

"Silence or inactivity does not in itself amount to acceptance"[9] [emphasis added].

Article 2.6(1) of the Principles, second sentence, reads identically:

"Silence or inactivity does not in itself amount to acceptance" [emphasis added].

It is thus clear that both under the Convention and the UNIDROIT Principles, mere silence or inaction, i.e., not accompanied by acts of contractual execution, does not have the legal effect of concluding a contract. In the first part of the counterpart provisions, it is clearly indicated that assent can be shown either by means of an express declaration of assent or by means of other conduct of the offeree indicating such, i.e., acts that can be understood as unequivocal acts of execution of the contract.[10] In the second part, however, both provisions also instruct that mere silence or inaction does not have any legal effect to conclude a contract.[11]

Under the Convention, acceptance by conduct has a contractual legal effect provided it is accompanied by acts that indicate assent. The text of CISG Art. 18(3) provides by way of example two instances that can be assumed as effective acts of contractual execution -- one relating to the dispatch of the goods by the seller and one relating to the payment of the price by the buyer. That provision may, however, fit many other instances and that can be appreciated further in other concrete cases. DÍEZ PICAZO mentions, for example, other such acts, such as the parties' acts towards the preparation of the dispatch of the goods or for the payment of the price, e.g., the opening of a documentary letter of credit.[12]

CISG Art. 18(3) clearly permits the possibility of acceptance in a tacit way: an acceptance is effective if "by virtue of the offer or as a result of practices which the parties have established between themselves or of usage,[[13]] the offeree [indicates] 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". In other words, the Convention recognizes cases in which the presence of execution acts will point out the acceptance of the offer.

The available doctrine that is relevant to those provisions of the Convention supports equally the proposition that mere silence does not constitute an acceptance. However, as pointed out above, there exist some factors in combination with which silence may constitute an effective acceptance as understood between the parties. Such factors include: legal dispositions (e.g., as set out in CISG Arts. 19(2) and 21); usages and practices[14], and the existence of a duty upon the parties to communicate (reply/answer to communications).[15] We would add to such list of factors/circumstances certain cases in which the parties have agreed to a certain mode of acceptance, either in previous dealings between themselves or in the particular contract in question -- keeping in mind that CISG Art. 6 permits the parties to "derogate from or vary the effect of any of [the Convention's] provisions",[16] thus entrenching in the Convention the principle of party autonomy and its ultimate power over (almost) any of the Convention's provisions.[17]

In a similar way to the Convention, the UNIDROIT Principles have recognized the value of acceptance by conduct, in almost identically worded counterpart provisions, see Arts. 2.6(1) and (3) of the Principles.

Art. 2.6(3) of the Principles is almost identical to its counterpart Art. 18(3) of the Convention, only the latter includes additional wording (a) to illustrate the type of acts contemplated in both counterpart provisions ("such as one relating to the dispatch of the goods or payment of the price") and (b) to clarify the timing of such an acceptance, by directly linking that issue to the provisions contained in CISG Art. 18(2).

The latter additional content of CISG Art. 18(3), compared to Art. 2.6(3) of the Principles, does not, however, weaken or undermine the thematic and substantive similarities between the counterpart instruments and their respective provisions, because Art. 2.7 of the Principles ("Time of Acceptance")[18] is substantively identical to CISG Art. 18(2).

Furthermore, the official commentary on UNIDROIT Principles Art. 2.6(3) expressly highlights the similarity in policy and content of the counterpart provisions: "This article corresponds to para. (1), (2) first part and (3) of Art.18 CISG."[19]

Thus, it can be concluded that, as in the Convention, under the Principles silence alone cannot constitute acceptance. It should be made clear when the offeror unilaterally determines, as he may, the mode of acceptance, the offeree cannot argue than an effective acceptance has taken place through the latter's silence. The official commentary on Art. 2.6 of the Principles clearly supports this interpretation.

Furthermore, in accordance with the opinion expressed by PERALES, the present author concurs that for silence to constitute an acceptance, such result could only be derived from (a) an express agreement of the parties (Art. 1.1 of the Principles), (b) usages or practices established between the parties (Art. 1.8 of the Principles), or (c) when other applicable law/principles recognize an acceptance in that form (Arts. 2.9 and 2.22 of the Principles).[20]

      2.3 Necessity of communicating acceptance

An acceptance can be communicated by different means, unless the offeror has demanded a specific formality. In cases where the offeror has used a specific medium to communicate his offer but did not request obligatory observance of the same means for the communication of the offeree's acceptance, nothing prevents the offeree from communicating an acceptance by different means.

An express acceptance can be made orally. Oral conclusion of a sales contract can be proved by a letter of confirmation sent afterwards by one party to the other.[21]

Under the Convention's regime, applying the principle of freedom from formalities in ways contemplated in CISG Art. 11,[22] a contract can be proved by many different means suitable to the offeree to communicate or prove his assent to the offer. Under the Convention, an acceptance can also be given in writing, and for such mode this expression ("writing") includes telegram and the telex, in accordance with CISG Art. 13.

The UNIDROIT Principles equally establish the principle of freedom from formalities, in Art. 1.2. [No form required]:

"Nothing in these Principles requires a contract to be concluded in or evidenced by writing. It may be proved by any means, including witnesses."

Art. 1.10 of the UNIDROIT Principles defines the word "writing" in the following way:

   -    " 'writing' means any mode of communication that preserves a record of the information contained therein and is capable of being reproduced in tangible form."

Art. 1.10 of the Principles may be used to aid the interpretation of CISG Art. 13 in a broad manner to include modern means of communication, so that the reference to "telegram" and "telex" in the test of the Convention is not understood in a restrictive way that might exclude other modern media by which a party may dispatch a communication (e.g., messages of electronic data, and in general electronic communications).[23]

      2.4 Moment when acceptance becomes effective

As with an offer, it is equally important to determine the exact moment when the acceptance becomes effective to conclude the contract. That moment will depend on the provisions/rules of the applicable legal system, which might conceivably endorse a system/theory based (a) on the offeree's dispatch of his assent or (b) on the receipt by the offeror of the offeree's assent or (c) the mere communication of the offeree's assent to the offeror.

The Convention regulates acceptance distinguishing several suppositions, in the following way: pursuant to CISG Art. 18(2), first sentence, acceptance of the offer becomes effective "at the moment when the indication of the offeree's assent reaches the offeror" [emphasis added]. The theory of receipt is, thus, adopted under the Convention's regime for contract formation.[24]

CISG Art. 18(2), in sentence two, further provides that an acceptance "is not effective if the indication of assent does not reach the offeror within the time he has fixed or, if no time is fixed, within a reasonable time, due account being taken of the circumstances of the transaction, including the rapidity of the means of communication employed by the offeror" [emphasis added].

As for offers made orally by the offeror, Art. 18(2), sentence three, provides that such offers "must be accepted immediately unless the circumstances indicate otherwise" [emphasis added].

As for the exact moment when a tacit acceptance produces the desired legal effect (i.e., to conclude a contract), it should be kept in mind that CISG Art. 18(3) is partly based on the principle that the offeror must have knowledge of the offeree's acceptance by conduct, except - and it is the exception introduced by this article -- in cases where the acceptance becomes effective either pursuant to practices established between the parties or is based on usages under which the offeree may manifest his acceptance without communicating it to the offeror. In the latter cases, it is assumed that the offeror has knowledge of the acceptance at the moment of execution of the offerees' act which configures the requisite -- and, in all respects, effective to conclude the contract -- acceptance by conduct. That is to say, the Convention permits, by virtue of established practices or usages, the possibility that the offeree indicate his assent executing 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 Art. 18(3), emphasis added]. In this case it is not necessary that the offeror receive a notification of such an executed act.

In cases, however, where the above suppositions do not apply, the offeree must communicate to the offeror the execution of the requisite act to conclude the contract, otherwise the offeror can revoke the offer pursuant to the provision in CISG Art. 16(1).

For an offer to become effective the UNIDROIT Principles, like the Convention, adopt the system of receipt, pursuant to Art. 2.6(2): "An acceptance of an offer becomes effective when the indication of assent reaches the offeror" [emphasis added]. The drafters of the Principles considered it more sensible to place on the offeree the risk of the transmission, because the offeree is the one who chooses the means of communicating his assent, and it is the offeror who is more able or better equipped to adopt the necessary measures in ensuring that the acceptance arrives at its destination.[25]

Art. 2.6(3) of the Principles, however, like the Convention, also permits the possibility that by virtue of the offer or as a result of the practices established between the parties or pursuant to applicable usages, the offeree manifest his assent by executing an act without communicating it to the offeror. In such cases, the act of acceptance produces the desired legal effect (i.e., conclusion of the contract) at the moment when the requisite act is executed,[26] without any necessity to make that known to the offeror; that is to say, by-passing the method of the declaration of assent by the offeree.

Nevertheless the above-mentioned would also fit the system/theory of information, in cases where a third party informs to the offeror of the acts that constitute acceptance of the proposal.[27]

CISG Art. 24 provides that the communication of offer and acceptance, i.e., any indication of the intention of the parties in the context of contract formation under the Convention, reaches the addressee "when it is delivered to him, not when it is dispatched."[28]

The UNIDROIT Principles, in Art. 1.9(2), also adopt the receipt principle to validate the effect of a notice or other communication when "it reaches the person to whom it is given." The Official Commentary on UP Article 1.9 explains that a "notice reaches a person when given to that person orally or delivered at that person's place of business or mailing address."[29]

Thus, it is concluded that Art. 1.9 of the UNIDROIT Principles and Art. 24 of the Convention - the counterpart provisions that define the point of time when a communication reaches the addressee -- adopt the same receipt principle, make the same distinction between oral and other communications, and provide similar definitions of the relevant concepts.[30]

3. Time of acceptance

Article 18(2) of the Convention provides that "[a]n acceptance of an offer becomes effective at the moment the indication of assent reaches the offeror. An acceptance is not effective if the indication of assent does not reach the offeror. An acceptance is not effective if the indication of assent does not reach the offeror within the time he has fixed [...]."

Art. 2.7 of the Principles corresponds directly to part of Art. 18(2) CISG, and it is worded in almost identical manner:

An offer must be accepted within the time the offeror has fixed or, if no time is fixed, within a reasonable time having regard to the circumstances, including the rapidity of the means of communication employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise

The two counterpart provisions make reference to the following situations:[31]

      3.1 The offeror has fixed a time for acceptance

Where the offeror has fixed a time for acceptance, both the CISG (Art. 18(2)) and the UNIDROIT Principles (Art. 2.7) require that the offer is accepted within the set time.[32] Otherwise, the purported acceptance will not produce the legal effect of contract conclusion, subject to exceptions contemplated in CISG Art. 21 and its counterpart Art. 2.9 of the UNIDROIT Principles.[33]

      3.2 The offeror has not fixed a time for acceptance

Where the offeror has not fixed a time for acceptance, both the Convention and the Principles provide that the acceptance must arrive within a reasonable time, taking into account the circumstances of the transaction, "including the rapidity of the means of communication employed by the offeror."[34]

Other circumstances that ought to be kept in mind to determine the reasonable term would be the object of the contract, the complexity of the transaction, geographical circumstances, etc.[35]

      3.3 Oral offers

In the case of oral offers, the counterpart provisions of the Convention (CISG Art. 18(2)) and the Principles (Art. 2.7) require that the same are accepted immediately.

It is also obvious that both instruments adopt the same differentiating approach to determine the duration of the offer, depending on whether the offer is in writing or oral.

4. Conclusions

Both the Convention and the UNIDROIT Principles adopt the same policy -- which is expressed in similar wording in the counterpart provisions of the two instruments -- to deal with the issue of the time and manner for indicating assent to an offer.

The counterpart provisions provide that an offer can be accepted expressly or tacitly.

Both instruments deny that silence in itself is capable of producing the legal effect of an acceptance to an offer.

An acceptance becomes effective when it reaches the offeror. Equally, an acceptance becomes effective when by virtue of usages or practices established practices between the parties, the offeree performs a relative act of execution of the contract.

If the offeror has fixed a time for acceptance of the offer, both the Convention and the Principles provide that the acceptance must take place within that time -- and where there is not time fixed for acceptance, within a reasonable time.

Both instruments also expressly provide that oral offers must be accepted immediately.

Furthermore the official commentaries on UNIDROIT Principles Arts. 2.6 and 2.7 state that these provisions correspond to CISG Art. 18.

Based on the preceding comparative analysis of the two instruments, it is submitted that the counterpart provisions and the contexts in which they are set are substantively identical. As such, the provisions of the Principles and the corresponding official comments on these provisions may arguably be used to interpret or supplement the counterpart provisions of the CISG.


FOOTNOTES

* Lawyer (J.D.), Javeriana University (Bogotá D.C. - Colombia). Specialist in Commercial Law Javeriana University. Professor of Contracts and Commercial Law at La Sabana University (Bogotá D.C. - Colombia). He has been Lecturer in Colombian and other international universities. Author of publications on International Commercial Law in Argentina, Spain, Colombia, Peru, Mexico, and the United States.

1. CISG Art. 23 provides: "A contract is concluded at the moment when an acceptance of an offer becomes effective in accordance with the provisions of this Convention."

UNIDROIT Principles Art. 2.1 provides: "A contract may be concluded either by the acceptance of the offer or by conduct of the parties that is sufficient to show agreement" [emphasis added].

For a comparative analysis of CISG Art. 18 and the counterpart provisions of another Restatement of Contract law, the Principles of European Contract Law 1998, see CARRARA, C. and KUCKENBURG, J.: "Remarks on the manner in which the Principles of European Contract Law may be used to interpret or supplement Article 18 of the CISG", available online at <http://cisgw3.law.pace.edu/cisg/text/peclcomp18.html#er>.

2. See SONO, K.: "Formation of International Contracts under the Vienna Convention: A Shift above the Comparative Law", in SARCEVIC P. and VOLKEN P. (eds.): International Sale of Goods: Dubrovnik Lectures, Oceana (1986) 111-131; also available at <http://cisgw3.law.pace.edu/cisg/biblio/sono2.html>.

3. See ENDERLEIN, F. and MASKOW, D.: "Article 18", International Sales Law, Oceana publications, (1992), also available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein.html#art18-1a>:

"The statement of acceptance does not expressly have to declare acceptance of the offer; it is necessary that assent to the offer be expressed by the offeree. The statement or conduct is interpreted pursuant to [CISG] Article 8. The statement must express assent to the offer. The mere acknowledgment of receipt of the offer is thus not sufficient, neither is an expression of interest in it."

4. CALAMARI, J.; PERILLO, J.: The Law of Contract, (1998), Hornbook Series, West Group, St. Paul Minn., p. 85.

5. See CISG Art. 9 [Usages and practices applicable to the contract].

6. SCHLECHTRIEM, P.: "Acceptance of an Offer (Articles 18-22)", in Uniform Sales Law -- The UN-Convention on Contracts for the International Sale of Goods, Manz, Vienna: 1986, also available online at <http://cisgw3.law.pace.edu/cisg/biblio/schlechtriem.html#a29>.

7. See Germany 13 January 1993 Oberlandesgericht [Appellate Court], case presentation available at <http://cisgw3.law.pace.edu/cases/930113g1.html> (the court held that a contract had been validly concluded between the parties, noting that the buyer's taking delivery of the goods constituted conduct indicating assent to the offer and amounted therefore to an implied acceptance of the standard terms contained in the letter of confirmation sent by the seller (Art. 18(1) CISG)).

8. See relevant case law:

  -    Argentina 14 October 1993 Cámara Nacional de Apelaciones en lo Comercial [Appellate Court] Inta v. Officina Meccanica), case presentation available at <http://cisgw3.law.pace.edu/cases/931014a1.html> (the court remarked that there was an implicit acceptance of the offer in that case: by countersigning the invoice forms and sending them to a financial institution, the buyer performed an act relating to the payment of price, amounting to acceptance according to Art. 18(3) CISG);
   -    France 10 September 2003 Cour d'appel [Appellate Court] Paris (Société H. H... GmbH & Co. v. SARL MG...), case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/030910f1.html> (the court held that even though acceptance may result from the behavior of the offeree, silence or inactivity does not in itself amount to acceptance).

9. See relevant case law:

   -    Switzerland 10 July 1996 Handelsgericht [Commercial Court] Zürich, case presentation available at <http://cisgw3.law.pace.edu/cases/960710s1.html> (the court stated that mere silence or inactivity does not amount to acceptance (CISG Art. 18(1) and (2)), unless other conduct of the offeree exists indicating consent or the offeree performs an act (CISG Arts 18(1) and (3));
   -    Belgium 2 December 1998 Rechtbank van Koophandel [District Court] Hasselt, case presentation available at <http://cisgw3.law.pace.edu/cases/981202b1.html> (the court remarked that CISG Art. 18 excludes acceptance of contract terms by mere silence).

10. See Official Comments on Art. 2.6 of the UNIDROIT Principles, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni18.html#official>.

Comment 1. "Indication of assent to an offer. For there to be an acceptance the offeree must in one way or another indicate 'assent' to the offer. The mere acknowledgement of receipt of the offer, or an expression of interest in it, is not sufficient. Furthermore, the assent must be unconditional, i.e. it cannot be made dependent on some further step to be taken by either the offeror [...] or the offeree [...]. Finally, the purported acceptance must contain no variation of the terms of the offer or at least none which materially alters them (see Art. 2.11)."

Comment 2. "Acceptance by conduct. Provided that the offer does not impose any particular mode of acceptance, the indication of assent may either be made by an express statement or be inferred from the conduct of the offeree. Para. (1) of this article does not specify the form such conduct should assume: most often it will consist in acts of performance, such as the payment of an advance on the price, the shipment of goods or the beginning of work at the site, etc."

11. See Official Comments on Art. 2.6 of the UNIDROIT Principles, op.cit.

Comment 3. "Silence or inactivity. By stating that '[s]ilence or inactivity does not in itself amount to acceptance', para. (1) makes it clear that as a rule mere silence or inactivity on the part of the offeree does not allow the inference that the offeree assents to the offer. The situation is different if the parties themselves agree that silence shall amount to acceptance, or if there exists a course of dealing or usage to that effect. In no event, however, is it sufficient for the offeror to state unilaterally in its offer that the offer will be deemed to have been accepted in the absence of any reply from the offeree. Since it is the offeror who takes the initiative by proposing the conclusion of the contract, the offeree is free not only to accept or not to accept the offer, but also simply to ignore it."

12. See DIEZ PICAZO, L.: La Compraventa Internacional de Mercaderías. Comentario de la Convención de Viena, Civitas, Madrid, 1998, p. 182.

See also relevant case law:
   -    Spain 26 May 1998 Tribunal Supremo [Supreme Court] (Nordgemüse Wilhelm Krogmann v. Javier Vierto), case presentation available at <http://cisgw3.law.pace.edu/cases/980526s4.html> (the court noted in obiter, making reference to Arts. 18 and 19 CISG, that the existence of certain documents presented was enough to prove the existence of the contracts because it provided evidence of the existence of typical acts of contractual execution between the parties);
   -    Spain 17 February 1998 Supreme Court, case presentation available at <http://cisgw3.law.pace.edu/cases/980217s4.html> (the court held that the documents presented in that case were proof enough of the existence of commercial relations between the parties and even of the conclusion of a contract by performing customary contractual acts (pursuant to CISG Arts. 18 and 19));
   -    United States 7 December 1999 Federal District Court [Illinois] (Magellan International v. Salzgitter Handel GmbH), case presentation available at <http://cisgw3.law.pace.edu/cases/991207u1.html> (the court held that a contract had been concluded with the buyer's acceptance of the seller's counter-offer, which could reasonably be inferred from the buyer's issuing of the letter of credit (CISG Art.18(1));
   -    United States 10 May 2002 Federal District Court [New York] (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.), case presentation available at <http://cisgw3.law.pace.edu/cases/020510u1.html> (the seller, a Canadian manufacturer of a chemical ingredient (clathrate) for use in the production of an anticoagulant medication (warfarin sodium), in 1994 supplied the buyer, a U.S. company, with samples of the ingredient and confirmed that it would support the buyer's application for approval by the Food and Drug Administration (FDA) as the supplier of the ingredient for the manufacture of the drug. In 1995, the seller issued a letter to the FDA confirming it would serve as a supplier of clathrate to the buyer. The court held that pursuant to CISG Art. 18(3) the provision of the reference letter to the FDA could qualify as an act indicating assent to a contract. Whether the seller's acts actually indicated assent to a contract would be analyzed at trial on the basis of industry custom).

13. See relevant case law:

   -    France 21 October 1999 Cour d'appel [Appellate Court] Grenoble (Calzados Magnanni v. Shoes General International), CLOUT abstract number 313:

"Although the seller denied the very existence of a contract of sale and relied on article 18(1) CISG, according to which silence or inactivity does not in itself amount to acceptance, the Court held that the contract had indeed been concluded, even in the absence of any express acceptance on the part of the seller. The Court referred to the practice of previous years, the seller having always fulfilled the French company's orders without expressing its acceptance. Moreover, the seller did not produce, in reply to the many letters of claim from the buyer, any document stating that it had not received any order. In addition, the seller was aware of the buyer's intention to penetrate the footwear market by the summer of 1995 and, even if it had not received any order, it should, after manufacturing samples and being left with the original material in its possession, have questioned the buyer as to how the absence of an order should be interpreted." See also comprehensive case presentation including English translation also available at <http://cisgw3.law.pace.edu/cases/991021f1.html>;

   -    France 27 January 1998 Cour de Cassation [Supreme Court] (Hughes v. Société Technocontact), case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/980127f1.html>.

14. See United States 14 April 1992 Federal District Court [New York] (Filanto v. Chilewich), case presentation available at <http://cisgw3.law.pace.edu/cases/920414u1.html>.

For identification of pivotal issues and miscellaneous observations of the court, see analysis offered by KRITZER, A.: Editorial remarks, available at <http://cisgw3.law.pace.edu/cisg/wais/db/editorial/920414u1editorial.html>, see relevant excerpt:

"Conclusion of contract/Acceptance of offer/Silence or inactivity as acceptance/Practices of the parties. The pivotal holding of the court is as stated in UNCITRAL's abstract of the case: 'Although under Article 18(1) silence is not usually acceptance, the court finds that under Article 8(3) the course of dealing between the parties created a duty on the part of the [offeree] to object promptly and that its delay in objecting constituted acceptance of the . . . offer.'

"General principles (duty to communicate)/Good faith. Winship puts a key ruling of the court as follows: '[T]he opinion may . . . be read as saying that parties in a long-term relationship owe to each other a duty to communicate, a duty which ultimately may be derived from a duty to act in good faith' (Peter Winship, "The UN Sales Convention and the Emerging Case law", in Emptio-Venditio Internationales, Neumayer ed. (Basel 1997) 228)."

See also ENDERLEIN and MASKOW, op. cit.:

"Silence could express acceptance if usages and practices that exist between the parties (Article 9) called for expressly rejecting an offer. In the case of longstanding business relations, silence for reason of good faith (c. Article 7) may mean acceptance [...]. Through an inquiry or an invitation to submit an offer it may be communicated that one's own silence should be interpreted as acceptance [...]. The parties may also agree that for future contracts silence would amount to acceptance, e.g. in the case of continuous orders [...]. It is not clear, however, at which moment the contract is concluded in the event of agreed silence [...] probably not when the offer is received but rather after a reasonable time" [references omitted].

15. FOLSOM, R.; GORDON, M.W.; SANOGLE, J.JR.: International Business Transactions (Second edition), West Group, St. Paul, Minn. United States, (2001), p. 32.

See also KRITZER, and ENDERLEIN & MASKOW, supra note 14.

16. ADAME GODDARD, J.: El contrato de compraventa internacional, Mc Graw Hill, Mexico, (1994), p. 108.

17. CISG Art. 6 reads: "The parties may exclude the application of this Convnetion or, subject to article 12, derogate from or vary the effect of any of its provisions."

18. See Official Comment on Art. 2.7 of the UNIDROIT Principles, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni18.html#official>:

"With respect to the time within which an offer must be accepted, this article, which corresponds to the second part of para. (2) of Art. 18 CISG, distinguishes between oral and written offers. Oral offers must be accepted immediately unless the circumstances indicate otherwise. As to written offers, all depends upon whether or not the offer indicated a fixed time for acceptance: if it did, the offer must be accepted within that time, while in all other cases the indication of assent must reach the offeror 'within a reasonable time having regard to the circumstances, including the rapidity of the means of communication employed by the offeror'.

"It is important to note that the rules laid down in this article also apply to situations where, in accordance with Art. 2.6(3) [see above], the offeree may indicate assent by performing an act without notice to the offeror: in these cases it is the act of performance which has to be accomplished within the respective periods of time.

"For the determination of the precise starting point of the period of time fixed by the offeror, and the calculation of holidays occurring during that period of time, see Art. 2.8; as to cases of late acceptance and of delay in transmission, see Art. 2.9."

19. See Official Comments on Art. 2.6 of the Principles, op. cit., Comment 4.

20. PERALES VISCASILLAS, M.: Comentario a los principios de UNIDROIT para los contratos del comercio internacional. p. 118.

21. Germany 22 February 1994 Oberlandesgericht [Appellate Court] Köln, case presentation including English translation available at <http://cisgw3.law.pace.edu/cases/940222g1.html> (the court held that according to CISG Art. 18(1) silence does not in itself amount to acceptance; however silence may amount to acceptance when it is linked to other circumstances -- the court also noted that importance of commercial letters of confirmation as evidence of the formation of contract).

22. 2 CISG art. 11: "A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses."

23. For a comparative analysis of CISG Art. 13 and UNIDROIT Principles Art.1.10, see CHARTERS, A.: Editorial remarks, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni13.html#er>.

24. See the CISG-AC Opinion no 1, "Electronic Communications under CISG", 15 August 2003. Rapporteur: Professor Christina Ramberg, Gothenburg, Sweden. The CISG-AC's Opinion regarding CISG Art. 18(2) is available online at <http://www.cisg.law.pace.edu/cisg/CISG-AC-op1.html#art18-2>:

"An acceptance becomes effective when an electronic indication of assent has entered the offeror's server, provided that the offeror has consented, expressly or impliedly, to receiving electronic communications of that type, in that format, and to that address.

The term 'oral' includes electronically transmitted sound in real time and electronic communications in real time. An offer that is transmitted electronically in real time communication must be accepted immediately unless the circumstances indicate otherwise provided that the addressee consented expressly or impliedly to receiving communications of that type, in that format, and to that address."

25. See Official Comments on Art. 2.6(3) of the UNIDROIT Principles, op. cit.

Comment 4. "When acceptance becomes effective: According to para. (2) an acceptance becomes effective at the moment the indication of assent reaches the offeror (see Art. 1.9(2)). For the definition of 'reaches' see Art. 1.9(3). The reason for the adoption of the "receipt" principle in preference to the 'dispatch' principle is that the risk of transmission is better placed on the offeree than on the offeror, since it is the former who chooses the means of communication, who knows whether the chosen means of communication is subject to special risks or delay, and who is consequently best able to take measures to ensure that the acceptance reaches its destination.

"As a rule, an acceptance by means of mere conduct likewise becomes effective only when notice thereof reaches the offeror. It should be noted, however, that special notice to this effect by the offeree will be necessary only in cases where the conduct will not of itself give notice of acceptance to the offeror within a reasonable period of time.[...].

"An exception to the general rule of para. (2) is to be found in the cases envisaged in para. (3), i.e. where "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 without notice to the offeror". In such cases the acceptance is effective at the moment the act is performed, irrespective of whether or not the offeror is promptly informed thereof "[illustrations provided therein are omitted].

26. See: VÁSQUEZ LÉPINETTE, T.: Compraventa Internacional de Mercaderías, una visión jurisprudencial. Aranzadi editorial, Elcano Navarra, 2000, pp. 131.

27. See Official Comments on Art. 2.6(3) of the UNIDROIT Principles, op. cit. Comment 4.

"[...] In all other cases, e.g. where the conduct consists in the payment of the price, or the shipment of the goods by air or by some other rapid mode of transportation, the same effect may well be achieved simply by the bank or the carrier informing the offeror of the funds transfer or of the consignment of the goods."

28. See the Text of the Secretariat Commentary on article 22 of the 1978 Draft [draft counterpart of CISG article 20], Comment 1, available online at <http://cisgw3.law.pace.edu/cisg/text/secomm/secomm-24.html>. 

29. See the Official UNIDROIT Commentary on Article 1.9, available online at <http://cisgw3.law.pace.edu/cisg/principles/uni24.html#official>, Comment 2 states:

"With respect to all kinds of notices the Principles adopt the so-called 'receipt' principle, i.e. they are not effective unless and until they reach the person to whom they are given. For some communications this is expressly stated in the provisions dealing with them: see Arts. 2.3(1), 2.3(2), 2.5, 2.6(2), 2.8(1) and 2.10. The purpose of para. (2) of the present article is to indicate that the same will also be true in the absence of an express statement to this effect: see Arts. 2.9, 2.11, 3.13, 3.14, 6.1.16, 6.2.3, 7.1.5, 7.1.7, 7.2.1, 7.2.2, 7.3.2 and 7.3.4."

30. For a comparison between CISG Art. 24 and the counterpart provisions of the UNIDROIT Principles Art. 1.9, see FELEMEGAS, J.: Editorial remarks, available online at <http://cisgw3.law.pace.edu/cisg/biblio/felemegas11.html>.

31. CISG Art. 20 deals with the interpretation of the offeror's time-limits for acceptance of an offer to conclude a contract, and it provides a mechanism for calculating when that period begins to run in cases where the commencement of the period of time during which an offer can be accepted by the offeree has not been expressly fixed by the offeror. Art. 2.8 of the Principles is a similar provision dealing with the calculation of the time for acceptance of an offer. For a comparison between CISG Art. 20 and the counterpart provisions of Art. 2.8 of the Principles, see FELEMEGAS, J.: Editorial remarks, available online at <http://cisgw3.law.pace.edu/cisg/biblio/felemegas9.html>.

32. See ICC Arbitration Case No. 7844 of 1994 , case presentation available at <http://cisgw3.law.pace.edu/cases/947844i1.html> (the arbitral tribunal held that pursuant to CISG Art. 18(2) an offer cannot be accepted after the time for acceptance has expired, unless the offeror orally informs the offeree without delay that it considers the late acceptance as effective (CISG Art. 21(2)).

33. For a comparison between CISG Art. 21 of the CISG and the counterpart provisions of Art. 2.9 of the UNIDROIT Principles, see FELEMEGAS, J.: Editorial remarks, available online at <http://cisgw3.law.pace.edu/cisg/biblio/felemegas12.html>.

34. CISG Art. 18(2); UNIDROIT Principles Art. 2.7.

35. "What is reasonable always depends on the circumstances of each case". ENDERLEIN & MASKOW, op. cit., at <http://www.cisg.law.pace.edu/cisg/biblio/enderlein.html#art18-1a>.


PECL COMPARATIVE

Remarks on the manner in which the Principles of European Contract
Law may be used to interpret or supplement Article 18 of the CISG

Cecila Carrara and Joachim Kuckenburg [*]
February 2003


1. Introduction
2. Art. 18(1) CISG - Meaning of Acceptance
3. Art. 18(2) CISG - Effectiveness of Acceptance
   a) Reasonable time
   b) Oral offer
4. Art. 28(3) - Acceptance without Notification
   a) Overview
   b) Conduct vs. performing an act
   c) Acts falling under Art. 18(3) CISG
   d) Revocation of offer and withdrawal of acceptance
   e) Duty to inform?

1. Introduction

Whereas Arts. 14 to 17 CISG deal with the offer, Arts. 18 to 23 CISG deal with the acceptance. Art. 18(1) CISG defines the acceptance in general. This provision is in large part supplemented by Art. 19 CISG which deals with the substantive contents of an acceptance. By contrast, Art. 18(2) and (3) CISG is concerned with the communication of the acceptance and the conditions under which the offeree may be dispensed of such communication. It is thereby supplemented by Art. 20 CISG for computation of applicable time periods and by Art. 21 CISG with respect to late acceptances. Whereas Art. 23 CISG may be regarded as the conclusion of Part II of the CISG defining the moment when a contract is concluded, Art. 24 CISG defines for both offer and acceptance when a certain statement reaches the addressee within the meaning of the CISG.

2. Art. 18(1) CISG - Meaning of Acceptance

Art. 18(1) CISG substantially corresponds to Art. 2:204 PECL, defining in rather broad terms the meaning of acceptance, which may be express or implied by conduct. Both provisions do however clearly deny that silence or inactivity per se may constitute an acceptance. Art. 2:204 PECL thereby reconfirms the principle that in commercial dealings silence in itself does not have legal relevance.[1]

3. Art. 18(2) CISG – Effectiveness of Acceptance

      a) Reasonable time

      According to Art. 18(2) CISG, an acceptance must reach the offeror within the time open for its acceptance. This provision corresponds to Arts. 2:205(1) and (2) and 2:206(1) and (2) PECL. Both texts thereby reject the mailbox principle to establish when an acceptance becomes effective.[2] Art. 18(2) CISG provides some guidance as to how the words "reasonable time" within which an offer must be accepted should be interpreted, by referring both to the circumstances of the case and to the means of communication employed.[3] Art. 18(2) last sentence CISG provides in addition a special rule in case of oral offers, which, in general, must be accepted immediately.[4] However, the proviso "unless the circumstances indicate otherwise" shows that immediate acceptance is not a strict rule. On the contrary, the PECL contain neither exemplifications nor special rules for oral offers.[5]

      b) Oral offer

      The existence of the specific rule of Art. 18(2) last sentence CISG operates as an inversion of the burden of proof in comparison to Art. 18(2) second sentence CISG. Indeed, if the negotiations have been conducted orally and a dispute arises as to whether the offeree could only accept the offer immediately, or whether he disposed of a period for reflection, Art. 18(2) last sentence CISG places upon the offeree the burden to prove that, in the specific case, he could rely on the offer to stand for an additional period of time.[6]

4. Art. 18(3) CISG – Acceptance without Notification

      a) Overview

      Art. 18(3) CISG corresponds substantially to Arts. 2:205(3) and 2:206(3) PECL. These provisions constitute an exception to the general rule that an acceptance must reach the offeror to be effective. By merely performing an act, the offeree may render his acceptance effective, and thus conclude the contract without the acceptance reaching the offeror. These provisions raise several questions: How is the distinction drawn between the conduct indicating assent of the offeree (Art. 18(1) CISG), which must reach the offeror (Art. 18(2) 1st sentence CISG), and the act upon the mere performance of which a contract is concluded (infra 4 b))? What kind of acts qualify to fall within the realm of Art. 18(3) CISG and when precisely is the contract concluded in such cases (infra 4 c))? What happens if the offeror revokes his offer, or the offeree withdraws his acceptance, before the offeror knows about the conclusion of the contract (infra 4 d)? In case of conclusion of a contract by mere performance of an act, must the offeree notify the offeror thereof in due course (infra 4 e)?

      b) Conduct vs. performing an act?

      One might be tempted to deduce from the difference in terminology used under Art. 18(3) CISG on the one hand ("performance of an act"), and Art. 18(1) CISG on the other ("conduct"), that the distinction between the two possibilities of acceptance must be made by reference to the specific behavior of the offeree. However, the distinction does not lie in the type of behavior on the part of the offeree. The conclusion of a contract without an acceptance reaching the offeror under Art. 18(3) CISG may occur only if the offeror has, or must be deemed to have, renounced to receive the acceptance of the offeree, either because his offer so provided or because this results from practices established between the parties or usages which are widely known and observed and of which the offeror could not have been unaware (Art. 9 CISG).

      c) Acts falling under Art. 18(3) CISG

      Art. 2:205(3) PECL does not qualify what kind of act is sufficient to determine the conclusion of a contract without the notification of an acceptance. Surprisingly, Art. 2:206(3) PECL speaks of an "act of performance".[7] Such qualification would limit the possible behavior of the offeree to those acts which are at least directly concerned with the performance of the contract under consideration.[8] Art. 18(3) CISG, however, gives guidance in this respect in the examples provided: the act may be "one relating to" the dispatch of the goods or the payment of the price. Art. 18(3) CISG would therefore be more restrictive than Art. 2:205(3) PECL, but broader than 2:206(3) PECL: The behaviour of the offeree does not need to be directly concerned with the performance as such of the contract, but may include preparatory acts.[9] Given such clarification under Art. 18(3) CISG, no specific inferences may be drawn from the wording used in Art. 2:206(3) PECL, also in consideration of the fact that Art. 2.6(3) UNIDROIT Principles adopts the wording "performing an act".

While Art. 2:205(3) PECL makes it clear that the specific moment in time of conclusion of the contract is that of the "beginning" of the act, Art. 18(3) CISG speaks of "the moment the act is performed." It appears that, on this particular point, the PECL provide a more detailed indication, even though this allows for a contract to be concluded upon acts which have only a remote connection to the actual performance of the corresponding contractual obligations. In situations where the acts performed are punctual, the difference in the respective wordings is not significant; however, where the acts are continuative, it is submitted that the stricter rule of Art. 18 (3) CISG is to be preferred.[10]

The act in question must manifest the offeree’s will to accept the offer. It is not readily clear whether such act must leave the sphere of control of the offeree [11] or whether purely internal dispositions (such as instructions given to in-house departments or employees) may constitute the acceptance. One may draw upon Art. 16(1) CISG,[12] since, as long as an offer may be revoked, no contract is concluded: the externalization of the accepting party’s will, under Art. 18(3) CISG, has the same rationale as the dispatch of the offeree’s acceptance referred to in Art. 16(1) CISG, i.e., the alienation of the manifestation of will. Accordingly, before this moment, the offer may be revoked and no contract has been concluded.

Dispatch of non conforming goods unquestionably amounts to acceptance,[13] unless the goods are of a different kind (aliud) than the goods requested. In such case the dispatch will amount to a new offer, except where the offeree was in error in delivering the wrong goods and in fact wanted to accept the offer.[14]

      d) Revocation of offer and withdrawal of acceptance

      Under Art. 18(3) CISG and Arts. 2:205(3) and 2:206(3) PECL it is therefore clear that the contract is concluded when the performance of the act begins. The consequences are that both the offer cannot be revoked (arg ex Art. 16(1) CISG, cf. supra 4 b) at fn. 11; for Art. 2:205(3) PECL cf. Comment para. D: the performance "is one which the offeree cannot revoke"),[15] and the acceptance not be withdrawn thereafter (Art. 22 CISG). Therefore, a seller who calls back goods in transit which he shipped in acceptance of a corresponding offer, would be in breach of contract.[16]

In addition, neither the text of Art. 18(3) CISG nor Arts. 2:205(3) and 2:206(3) PECL require the party accepting an offer by performing an act to give notice to the offeror in order to perfect the process of formation of the contract. Absence of such notice, even where it may flow from a general duty of good faith, does not have any effect on the conclusion of the contract.

      e) Duty to inform?

Nevertheless, the further question arises as to whether the accepting party has a "duty to inform" the offeror and, if so, what are the possible consequences in case of breach thereof.[17] Especially in the light of the urgency which usually characterizes cases falling under Art. 18(3) CISG, the offeror has a legitimate interest to be informed as soon as possible of the acceptance of the offeree.[18] It could be argued that if the offeror has a special interest in receiving a confirmation of acceptance, it is on him to request such confirmation from the other party. However, it is submitted that, even if there is no specific request by the offeror, the general duty of good faith and cooperation (Art. 7(1) CISG) imposes on the accepting party the burden of notifying promptly his acceptance to the offeror.[19] Such view may find further support in the wording of Art. 1:201(1) PECL [20] and Art. 1.7 of the UNIDROIT Principles [21] Accordingly, a violation of this duty would entitle the offeror to claim damages suffered as a consequence of failure of prompt notification;[22] the recognition of such a rule would effectively deter all possible attempts by the offeree to "call back" the acts performed at its own volition.


FOOTNOTES

* Avv. Cecilia Carrara is a research fellow at the CERADI - Luiss Guido Carli University in Rome AND AN Italian attorney, of counsel to the law firm MACCHI CELLERE GANGEMI; Joachim Kuckenburg, FCIArb, is a German attorney in the Paris law firm De Busschère Kuckenburg.

1. For silence upon a "commercial letter of confirmation", cf. Art. 19 and Editorial Remarks; silence may amount to acceptance as a result of unequivocal practices established among the parties, cf., eg., France, Calzados Magnanni v. Shoes General International, Cour d'appel Grenoble, (21 October 1999), available online at <http://cisgw3.law.pace.edu/cases/991021f1.html>; US, Filanto v. Chilewich, Federal District Court for the SDNY, (14 April 1992), 789 Fed. Supp 1229 (1992), available online at <http://cisgw3.law.pace.edu/cases/920414u1.html>. This is true in particular on the basis of an ongoing relationship based on a framework agreement, such as distributorship, franchise etc. The Notes to Art. 2:204 PECL state that, under various national laws, the offeree will generally be bound by his silence if the offer followed an invitation to deal by the offeree. However, this position does not convince, since it cannot be held that the issuer of the bid intends to waive his right to accept an individual offer, unless the contrary may be inferred from the terms of the bid. Even Restatement (Second) of Contracts, Section 69 "Acceptance by Silence or Exercise of Dominion" (for the full text of Section 69 cf. <http://www.law.unlv.edu/faculty/bam/k2000/r2k.html>), referred to in the Notes to Art. 2:204 PECL, para. 2, as an example does not bear out the position taken in the Notes.

2. The receipt rule has thus prevailed over the mailbox rule; the latter however keeps a certain importance in the context of Art. 16 (1) CISG, because the offeror may not revoke his offer once acceptance has been dispatched. For the special case where acceptance is effective by performing an act, refer below in the text para. 4 d).

3. With respect to the general principle of "reasonableness" under the CISG, cf. <http://cisgw3.law.pace.edu/cisg/text/reason.html>.

4. The same rule is provided under Art. 2.7 UNIDROIT-Principles.

5. The same exemplifications contained in the text of the CISG are provided however by the Comments to Art. 2:206 PECL, para. C.

61. It appears that often in case of oral negotiations specific offers and counter-offers cannot be traced back in the process of the conclusion of the contract. However, the position generally held under the CISG is that its rules on offer/acceptance also apply to cases where the formation of contracts does not occur according to this rigid scheme (cf. Schlechtriem in Schlechtriem, Commentary on the UN Convention on the International Sale of Goods, II ed. 1998, Introduction to Artt. 14-24, para. 2 et seq.) Art. 2:211 PECL further supports this position.

7. In the view of the authors this terminology, if had been used also in Art. 2:205(3) PECL, would better explain the specification provided therein, i.e., that the relevant moment in time for the conclusion of the contract is when the performance of the act "begins." Furthermore, such a rule would appropriately protect the legitimate interests of the offeror by limiting the kind of acts constituting acceptance, thereby restricting the offeree’s possibility to determine in his own discretion whether or not a contract has been concluded. This solution would contribute to enhance legal certainty. It is worth noting that the same solution is adopted under Art. 1327(1) Italian Cc whereby the contract is concluded when the performance of the obligation begins (cf. Benedetti, Il diritto commune dei contratti e degli atti unilaterali tra vivi a contenuto patrimoniale, Bracigliano, 1991, p. 119 et seq.).

8. Packing of the goods ordered might full under such notion, whereas ordering the goods from a sub-supplier or starting production of the goods will hardly qualify as an "act of performance" of the contract; it only relates to the future performance of the contract.

9. It is however generally recognized that the act must be of a certain significance, cf. Neumayer/Ming, Convention de Vienne sur les contrats de vente internationale de marchandises, Lausanne, 1993, p. 174.

10. For the reasons see fn. 6 above.

11. Enderlein/Maskow, International Sales Law, New York-London-Rome, 1992, Art. 18, no. 15, p. 96, available online at <http://cisgw3.law.pace.edu/cisg/biblio/enderlein-art18.html>.

12. Heuzé, La vente internationale de marchandises, Paris 2000, p. 171 et seq., fn. 124; Neumayer/Ming, op. cit., no. 8, p. 175.

13. This holds true also in cases of partial delivery, unless the specific circumstances of the case indicate a different solution, e.g. it can be clearly understood that the seller only wanted to accept partially the offer, thereby the partial delivery constituting a new offer, which, as such, requires the buyer’s acceptance in order for a contract to be concluded; cf for such a solution Germany, Oberlandesgericht [Appellate Court] Frankfurt/M., 23 May 1995, <http://cisgw3.law.pace.edu/cases/950523g1.html>.

14. Schlechtriem, op. cit., Art. 18, no. 7, pp. 129 - 130.

15. It has been pointed out that the solution adopted by the CISG may lead to unsatisfactory solutions under certain circumstances (among others cf. Neumayer/Ming, op. cit., p.176, Enderlein/Maskow, op. cit., p. 96). Indeed, the offeror who is unaware of the beginning of the performance may in good faith believe that he is still entitled to revoke his offer.

16. In the example proposed in the text, the buyer shall be entitled to damages for breach of contract, since the contract was already binding upon the parties as from the beginning of the performance of the act.

17. Again, Art. 1327 (2) Italian Cc explicitly regulates the issue: the accepting party is obliged to notify promptly to the offeror that performance has begun, or else the accepting party will be held liable for damages. The damages in question cover the "positive interest" and are those suffered by the offeror as a consequence of having relied on the circumstance that the offeree had not accepted the offer (cf. Bianca, Il contratto, Milano 1987, 244).

18. Indeed, the offeror has a legitimate interest to know as of when he is precluded from revoking his offer, e.g. for the purpose of entering into a more convenient deal, or as of when the passage of the risk has occurred, e.g. for the purpose of insuring the goods.

19. This position is shared by the prevailing opinion of the scholars, although the legal basis for such a duty to inform is not always specifically clarified: cf. Enderlein/Maskow, International Sale of Goods, 1992, p. 96; Neumayer/Ming, op. cit., p. 175, consider such a duty only for the case where the offeror has sent a revocation of the offer after acceptance has occurred: upon receipt of the said revocation the offeree has a duty to inform the other party, which derives from a general "loyauté commerciale"; contra, Schlechtriem, op. cit., no. 23, p. 136, according to whom an ancillary duty to inform on the part of the offeree can only arise on grounds of the practices established between the parties or of usage.

20. Cf. however the different view taken by J. Felemegas, "Comparative Editorial Remarks on the Concept of Good Faith in the CISG and the PECL", <http://www.cisg.law.pace.edu/cisg/text/peclcomp7.html#er>.

21. Supportive U. Magnus, "Comparative Editorial Remarks on the Concept of Good Faith in the CISG and the UNIDROIT-Principles", <http://www.cisg.law.pace.edu/cisg/principles/uni7.html#um>.

22. E.g., the goods in transit perish and no insurance contract has been concluded by the buyer; the delivery is delayed and the offeror, unaware of the conclusion of the contract, concludes a new contract with a third party, etc.. In the specific case considered by Neumayer/Ming, op. cit., p. 175, cf. fn. 18, these authors suggest that in case of breach of the duty to notify the offeror of the acceptance the offeree loses his right to rely upon the validity of the contract.


Pace Law School Institute of International Commercial Law - Last updated September 14, 2009
Go to Database Directory || Go to Information on other available case data
Comments/Contributions