Formation of International Sales Contracts under the 1980 Vienna Convention

Author(s): PETER WINSHIP

Source: The International Lawyer, Vol. 17, No. 1 (Winter 1983), pp. 1-18
Published by: American Bar Association
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 PETER WINSHIP*

Sales
Formationof International
Contractsunderthe 1980
ViennaConvention
A diplomaticconferencemetin Vienna in March-April1980 to consider
a draftconventionon thelaw governinginternational sales contracts.In its
Final Act of April 10, 1980 the conferenceadopted withoutdissenta Con-
ventionon Contractsforthe InternationalSale of Goods (CISG).1 As of
September30, 1981 one state,Lesotho, had ratifiedthe conventionand
twentyotherstates,fromall sectorsof theworldcommunity, had indicated
their intentionto do so by formallysigning it.2 Although the CISG will
only enterinto force twelve months afterthe tenth stateratifiesthe conven-
tion(CISG art.99) this initial of
expression supportsuggests thatthe CISG
will come into force in the near future.Whether or not the United States

♦Member,State Bar of Texas. AssociateProfessorof Law, SouthernMethodistUniversity;

Visiting Fellow, Trinity College, Oxford. Chair, A.B.A. Section of InternationalLaw,
Subcommitteeon InternationalSales. I am indebtedto JohnHonnold, PeterPfund,Francis
Reynolds,and Paul Rogersfordirectand indirecthelp. I am solelyresponsible,however,for
the followingtext.
'U.N. Conferenceon Contractsforthe InternationalSale of Goods, Final Act (April 10,
1980) (U.N. Doc. A/Conf.97/18),reprintedin 19 Int'l Legal Materials 668-99 (1980).
-
Subsequentcitationsto theconventionwill be givenin thefollowingform:CISG art. . For
a briefsummaryof the proceedingsat the Vienna conferencesee U.N. Chronicle 52 (June
1980).
2Theconventionwas open forsignatureuntil30 September1981. CISG art.91. The twenty
statesthat signed by this date include: Austria,Chile, Czechoslovakia, Denmark, Finland,
Federal Republicof Germany,France,GermanDemocraticRepublic,Ghana, Hungary,Italy,
theNetherlands,Norway,Peoples' Republicof China, Poland, Singapore,Sweden,theUnited
States,Venezuela, and Yugoslavia. In addition,Lesotho bothsignedand ratifiedthe conven-
tion. Letterof December 1, 1981 fromPeter H. Pfund,AssistantLegal Adviserfor Private
InternationalLaw, to the author. Althougha state must follow signaturewith ratification
beforeit will be bound,it has been suggestedthatsignatureimposesa moralobligationto seek
ratification.
Statesthatdid not sign by September30, 1981 are freeto accede to the conventionat any
time.

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2 INTERNATIONALLAWYER

ratifies theconvention Americantradersand theiradviserswill have to

its
study provisions.3
The CISG is dividedintofourparts:a generalpartdefining theconven-
tion'ssphereof applicationand providing rulesof construction; a second
part on contractformation; a third
part on thesubstantive rights obli-
and
of
gations parties to an international
salescontract;and a final partsetting
outruleson howstatesmayformally adopttheconvention and whatreser-
vationstheymaymaketoit. Amongthereservations permitted bythislast
part is therightofa stateto adopteitheror both PartsII and III (CISG art.
92).
Thisessayfocuseson thecontract formationprovisions inPartII, thetext
of whichis setout in an Appendix.Afterexamining thebackground to
theseCISG articlesthe essay illustrates the operationof Part II with
answersto a seriesofshorthypothetical questions.The concluding section
evaluatestheseprovisions in thelightofdomestic U.S. law and American
interests. The conclusion suggestedis thattheUnitedStatesshouldratify
theconvention.

I. Backgroundto the 1980 Convention

The finaltextofthe 1980convention represents

fiftyyearsof study.In
the1930slegalexperts fromwestern Europe met under theauspicesofthe
InternationalInstitute
fortheUnification ofPrivateLaw (UNIDROIT) to
draftuniform rulesforinternational
salescontracts.Workon theforma-
tionof sales contracts
beganin 1934butdrafting was suspendedduring
WorldWarII andthisaspectoftheoriginalprojectwasnottakenup again
until1956.Theproduct ofthisstudywassubmitted toa diplomaticconfer-
enceconvenedat The Haguein 1964.The conference the
accepted revised
draftof thisearlyworkas a uniform law annexedto one of twointerna-
tionalsalesconventionsadoptedbytheconference. The formation conven-
tion(ULF) requiresa stateratifying
itto incorporatetheuniform law into
itsdomestic law.4

3The UnitedStates'government signedtheconventionon the advice of the U.S. delegation

to the Vienna conferenceand afterclose consultationwiththe Secretaryof State's Advisory
Committeeon PrivateInternationalLaw and the AmericanBar Association. At its annual
meetingin August,1981 the A.B.A. House of Delegates recommendedthatthe United States
signand ratifytheconvention.At thetimethis,essay is beingwrittenthe Departmentof State
plans to forwardthe conventionto the presidentto seek Senate advice and consentin early
1983.
Even if the United States does not ratifythe conventionit will still be of interestto U.S.
traders.In exceptionalcircumstances theCISG may apply to contractsto whicha U.S. trader
is a party. See note 6 infra. Moreover,the textof the CISG is being used as a model forthe
revisionof national sales laws. Nordic countries,forexample,are revisingtheirlaw in the
lightof the CISG.
4The textof the UniformLaw on the Formationof Contractsforthe InternationalSale of
Goods is setout in 834 U.N.T.S. 169(1972),reprinted in 13 Am.J.Comp. L. 472 (1964), 3 Int'l
Legal Materials 864 (1964), 1 U.N. Register of Trade Law Texts 64 (1971). On the
background of ULF see Farnsworth,Formationof InternationalSales Contracts: Three
Attempts at Unification, 110 U. Pa. L. Rev. 305, 306-07 (1962).

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 Sales Contracts 3
International

AlthoughtheULF ultimately cameintoforceitwas soonapparentthat

the 1964 conventions would not be widelyadoptedand that another
attempt had to be made to preparea moreacceptabletext.Onlyseven
states(Belgium,Gambia,Italy,theNetherlands, San Marino,theUnited
Kingdom, and West Germany) have or
ratified acceded totheULF. Com-
mentators havebeenlesscritical ofthesubstance oftheULF textthanofits
attempt toextenditsapplication totransactions thatmighthaveno contact
witha ratifyingstateanditsfailure totakeintoaccounttheinterests ofnon-
Europeancountries, which were virtually
unrepresented at the1964confer-
ence. To remedy theseshortcomings thenewlyestablished U.N. Commis-
sion on International Trade Law (UNCITRAL) appointeda Working
Group in 1969 to review the 1964conventions and to preparenewtexts.
The Working Group devoted two sessionsto revisingtheULF and in 1978
it submitteda redrafted textto theCommission.Aftersomemodifications
the Commission adoptedthistextand integrated it withthesubstantive
ruleson contract and
rights obligations. The U.N. General Assemblythen
conveneda diplomatic conference inViennain 1980toconsider theUNCI-
TRAL text.The Viennaconference acceptedthisUNCITRAL draftwith
onlyrelativelyminor modifications.5

II. Formationof the InternationalSales Contract

PartII oftheCISG (Art.14-24)setsouttherulesregulating theforma-
tionof an international The firstfourarticlesof PartII
sales contract.6

5On the workof UNCITRAL and the backgroundto the UNCITRAL draftsee Honnold,
The UnitedNationsCommissionon InternationalTrade Law: Missionand Methods,27 Am. J.
Comp. L. 201 (1979); Honnold,The DraftConvention on Contractsfor theInternational Sale of
Goods: An Overview,27 Am. J.Comp. L. 223 (1979). (These articlesare partof a symposium
issue of theAmerican Journal of Comparative Law devotedto theworkof UNCITRAL).
The proceedingsof the 1978meetingof theCommissionare set out in Uncitral, Yearbook:
1978 at 31-45 (1979).
A briefsummaryand analysisof thefinaltextis foundin Note,International Trade: Uniform
Law ofSales, 22 Harv. Int'l L.J.473 (1981). ProfessorJohnHonnold,who was co-chairman
of the U.S. delegationin Vienna as well as Chiefof the U.N. InternationalTrade Law Branch
and Secretaryof UNCITRAL from1969-1974,has prepareda detailed analysisof the CISG
to be publishedin May 1982 by the Dutch publishers,Kluwer.
For analysisof the formationprovisionssee Eörsi,Problemsof Unifying Law on theForma-
tionof Contractsfor theInternational Sale of Goods,27 Am.J.Comp. L. 31 1 (1979); Lansing&
Hauserman,A Comparisonof the UniformCommercialCode to UNCITRAL's Convention on
Contracts for theInternational Sale of Goods,6 N.C. J.Int'l L. & Com. Reg. 63 (1980). Both
articlesmustbe read withcare because the numberingof the articleswas changedin the final
text.
6Unless the
partiesagree to exclude or derogatefromits provisionsthe CISG will apply to
contractsbetweentraderswho have places of businessin different statesifthesestatesare both
partiesto the 1980convention.CISG art. l(l)(a). The CISG is also applicable whenconflict-
of-lawrules("rulesof privateinternational law") lead to thelaw of a statethatis a partyto the
convention.CISG art. l(l)(b). A ratifying statemay declare thatit will not be bound by this
latterprovision.CISG art.95. At thetimeit signedtheconventionthe UnitedStates'govern-
mentannouncedits intentionto make thisdeclaration. For a studyof the convention'sscope
see Réczei,Area of Operationof theInternational Sales Conventions, 29 Am. J. Comp. L. 513
(1981).

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4 INTERNATIONALLAWYER

governthe offer.These articlesprovide for the prerequisitesof an offer

(Art. 14) and thewithdrawal,revocation,and termination of an offer(Arts.
15-17). The followingfive articles set out the correspondingrules on
acceptance. They provideforthe form an acceptancemay take (Art. 18),
the effectof an acceptancethatvaries the termsof an offer(Art. 19), the
timeallowed foracceptance(Arts.20-21), and withdrawalof an acceptance
(Art.22). Article23 statesthata contractis concludedwhenan acceptance
becomes effective, which normallywill be when a notice of acceptance
reachestheofferor.A finalprovision,Article24, defineswhena communi-
cation "reaches" a party.
A readertrainedin thecommonlaw and theUniformCommercialCode
will findsome surprisesin boththe styleand the scope of theseprovisions.
In stylethe articlesin Part II followthe civilianmodel of a comprehensive
collectionof brief,generalrules ratherthan the more detailed and convo-
luted statementsfoundin commonlaw legislation.7In scope Part II omits
severalmattersthe commonlawyerwould expectto findamong formation
rules. There is no statuteof frauds;thereis no referenceto modificationof
a contract;and thereis no requirement thattherebe considerationin order
to have an enforceablecontract. Several of these omissionsare filledby
provisionsfoundelsewherein the CISG. An articlein Part I providesthat
an enforceablesales contractmay be concluded withouta writing(CISG
art. II)8 and a provisionin Part III statesthata contractmay be modified
by agreementof thepartiesin any formunlesstheoriginalcontractrequires
themodification to be in writing(CISG art.29). The CISG, however,con-
tainsno provisionforconsideration.Of coursethiswillrarelybe a problem
in the contextof sale whereexchangeof goods formoneyis the object of
the transaction.9

Several importantlimitationson applicationof theconventionshouldbe noted. The parties

are freeto exclude applicationof the conventionor to varythe effectof any of its provisions.
CISG art. 6. Moreover,not all sales transactionsor potentialissues will be governedby the
CISG. The mostimportant exclusionsare of consumersales (CISG art.2(a)) and of claimsfor
death or personalinjurycaused by the goods to any person(CISG art. 5).
7For a commenton the civilian
styleof the formationprovisionsof ULF see Farnsworth,
supra note 4, at 310-13. ProfessorFarnsworth'scriticismof ULF forexcludingthe role of
nationallaw as a gap-filler{id at 31 1) is metby the CISG provisionthatgaps are to be filled
by generalprinciplesof theconventionand, in theirabsence,by the domesticlaw of the state
whose law would apply underthe rulesof privateinternationallaw. CISG art. 7(2).
°lne need to providetorpayment,carnage,and customstormaiitieswin normallygenerate
writtenevidenceof a contractwithoutworrying
sufficient about thetheoreticalpossibilitythat
a contractmaybe provedby any means. A trader,moreover,may insistin his offeror accept-
ance thathe will not be bound untila writtendocumentis signed. Article29 itselfprovides
thatthe concludedcontractmay requireany modificationto be in writing.
Article96 of the CISG authorizesa ratifying stateto declare thatthe convention'sarticles
whichdispensewiththe formality of a writingwill not apply when a partyhas his place of
businessin thatstate. The U.S.S.R. and severaleast European statesinsistedon the inclusion
of Article96 because theirdomesticlaw requirescontractsto be properlydocumentedforstate
planningaccountability.The United Statesdoes not plan to make a declarationpursuantto
Article96.
9For commentson theCISG and considerationsee Eorsi,
supra note 5, at 316 (possible that
lack of considerationis question of contractualValidity" and thereforeexcluded fromthe

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 InternationalSales Contracts 5

Notwithstanding thesedifferencesin styleand scope theCISG provisions

a
constitute comprehensive codificationwhichprovidesmany of the same
answersfoundin the commonlaw and the UniformCommercialCode.10
This is illustratedby the answersset out below to questionsarisingin the
followinghypotheticalcase. Seller,a manufacturer of equipment,has his
place of businessin France. Buyer,an equipmentdealer,has his place of
businessin New York. In thefollowingquestionsBuyer(the offeror) seeks
to enterinto a contractwithSeller (the offeree)forthe purchaseof equip-
ment. Assume that the CISG is in forceand that both France and the
United Stateshave ratifiedthe 1980 convention.
Question 1- On March 1 Buyer mails a letterto Seller enclosing a
purchaseorderformforspecifiedequipmentmanufacturedby Seller. The
lettermakes specificreferenceto the price listed in Seller's catalog. Is
Buyer'scommunicationan "offer?"
Buyer'scommunicationwould constitutean offerunderboth the CISG
and domesticU.S. law. The letterand formare addressed to a specific
person,are sufficiently definite,and presumablyindicateBuyer'sintention
to be bound if Seller accepts the order(CISG art. 14(1)). They are suffi-
cientlydefinitebecause theyspecifythe goods, the quantity,and the price
{Id ). The letterand formwould also be an offerat commonlaw. Buyer
has manifestedhis willingnessto enterinto a contractwithSeller and the
termsare sufficiently certainbecause theyprovidea basis fordetermining
the existenceof a breach and forgivingan appropriateremedy(Rest. 2d
§§ 24, 29, 33; cf. U.C.C. § 2-204).
If Buyerhad not made a specificreferenceto thepricein Seller'scatalog
he could have problemsunderthe CISG in thistypeof situationwherean
orderis made withreferenceto a catalog. The CISG requiresa proposal
expresslyor implicitlyto fixor make provisionfordeterminingthe price
beforeit will be deemed an offer(CISG art. 14(1)). It is conceivablethat
Buyermightnotstatethepriceor make a specificreference to thecatalogin
the beliefthatthisreferencewould be understoodby Seller. If therehave
been priordealingsbetweenBuyerand Seller conductedin thisway or ifit
is a recognizedcustomin the tradethatthepriceis deemed to be the price

conventionby CISG art.4(a)); Lansing& Hauserman,supranote5, at 78-79 (notclear consid-

erationis an issue underthe convention).See also Date-Bah, The UnitedNationsConvention
on Contracts for theInternational
Sale of Goods,1980: Overviewand SelectiveCommentary, 11
Rev. Gh. L. 50, 59 (1979) (not oftena problemin sales contracts,which "presentclearest
paradigmof mutualityand exchange").
l0Forthe purposesof thisessay the commonlaw is assumed to be statedaccuratelyin the
Restatement (Second) of Contracts (1981). Subsequentcitationsto theRestatementand
theUniformCommercialCode will be givenin thefollowingform:Rest.2d § - ; U.C.C. § - .
For a discussionof theRestatementprovisionsby theReportersee Braucher,Offerand Accept-
ance in the Second Restatement, 74 Yale L.J. 302 (1964).
For comparativesurveysof formationprovisions¿ei R. Schlesinger, Formationof Contracts,
A StudyoftheCommonCore ofLegal Systems(1968); Cigoj,International Sales: Formationof
Contracts,23 Neth. Int'l L. Rev. 257 (1976).

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6 INTERNATIONALLAWYER

set out in a catalog11thenBuyer'sproposal "implicitly"fixesor makes pro-

visionfordetermining theprice. If,however,thereis no relevantcourseof
dealing and no usage of tradethenBuyer'sproposalwill not be character-
ized as an offerbecause the language of the CISG suggeststhatthe terms
listed (the goods, quantity,price) are necessaryin order to satisfythe
requirements As a result,if Seller deliversthe equipment
of definiteness.12
to Buyerin responseto Buyer'sopen-priceproposalany subsequentdispute
betweenthe partieswill be governedby non-CISG legal rules (e.g., the
domesticlaw of quasicontract)because therehas notbeen a completedcon-
tract.13In this situationthe CISG differsfromthe commonlaw and the
UniformCommercialCode, which are more receptiveto the open-price
contract.14
It is possible,butunlikely,thatSeller'scatalogwill be consideredan offer
undertheCISG and thecommonlaw. Buyer'scommunicationwould then
be examinedto see ifit is an acceptanceratherthanan offer.Unless Seller
"clearly"indicatesotherwise,however,a catalog circulatedto the public at
large will be construedas only an invitationto membersof the public to
make an offer(CISG art. 14(2); Rest. 2d § 29). On theotherhand,catalogs
sent to specificdealers on a mailinglist may be construedas making an
offerto each dealer. If the catalog is deemed to be an offertherewould
usually be no difficulty about the price termbecause it would be listedin
thecatalog. The catalog itself,of course,may includelanguage whichwill
disposeof thisproblem. It might,forexample,disclaimmakingan offeror
it mightmake the statedprice in the catalog subjectto subsequentunilat-
eral changesin price.

"CISG art. 9 states:

(1) The partiesare bound by any usage to whichtheyhave agreed and by any practices
whichtheyhave establishedbetweenthemselves.
(2) The partiesare considered,unlessotherwiseagreed,to have impliedlymade applica-
ble to theircontractor its formationa usage of whichthe partiesknew or ought to have
known and which in internationaltrade is widely known to, and regularlyobserved by,
partiesto contractsof the typeinvolvedin the particulartradeconcerned.
The Vienna conferenceadopted the U.S. proposal to add the phrase "or its formation"to
paragraph(2) to make clear thattradeusages applied to Part II.
nButsee Feltham,The UnitedNationsConvention on Contractsfor theInternationalSale of
Goods, [1981]J. Bus. L. 346, 351 ("It is notclear whetherthis[secondsentencein art. 14(1)] is
merelya statementof sufficient definiteproposalor a statementof
conditionsof a sufficiently
necessary conditions.'*)
13One could
argue that Seller's deliveryis itselfan offer(the implied price being that
chargedby Seller at the timeof delivery)whichis accepted by Buyertakingdeliveryof the
goods. A courtwhichdoes not findBuyer'sproposalan offer,however,is unlikelyto infera
pricewhen Seller makes no referenceto a priceat the timeof delivery.
"The numberof situationswherethe CISG will have an effectare relativelyfew. In addi-
tion to the situationillustratedby the hypotheticalproblemdiscussedin the text,the debates
withinUNCITRAL and at the Vienna conferencementionedcommoditytransactionsand
ordersof spareparts. Trade usage or courseof dealing,however,maysupplythepricetermin
thesesituations. See note 11 supra.

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 InternationalSales Contracts 7

Question 2- On March 2 Buyer sends a telegramcountermandingthe

letterof March 1. AssumingBuyer'searlierproposal was not an irrevoca-
ble offer,is Buyer'saction effective?
Under the CISG, if Buyer'stelegramreachesSellerbeforeor at thesame
timetheletterof March 1 reacheshimBuyerhas "withdrawn"theofferand
Sellercannotacceptit (CISG art. 15(2)). If thetelegramreachesSellerafter
the letterit will "revoke" the offerif Seller has not dispatchedan accept-
ance or performedan act whichis deemed an acceptance(CISG arts. 16(1)
and 18(3)). The telegramand letterwill "reach" Sellerwhenit is delivered
to himpersonally,or to his place of businessor mailingaddress(CISG art.
24).
Althoughthe common law uses the term "revocation"to cover both
"withdrawal"and "revocation"it answers question 2 in the same way.
Seller's unexercised power to accept terminateswhen Seller receives
Buyer'stelegram(Rest. 2d §§ 36(l)(c), 42, 68). If Seller has alreadyexer-
cised this power by sending a notice of acceptance or by otherwise
acceptingtheofferthenthetelegramwill arrivetoo late and wiUnotrevoke
theoffer.Sellerwill receiveBuyer'stelegramwhenhe obtainspossessionof
itpersonallyor by an agent,or whenit is "depositedin some place whichhe
has authorizedas theplace forthisor similarcommunications to be depos-
ited forhim" (Rest. 2d § 68; cf. U.C.C. § 1-201(26), (27)).
Question 3- Buyer's March 1 letterstates that his offerwill lapse on
March 15 unless he receivesSeller's notice of acceptanceby thatdate. Is
Buyer'soffer"irrevocable?"
This questionraisesa pointmuchdebatedwithinUNCITRAL and at the
Vienna conference.15The relevantCISG provisionstatesthat an offeris
irrevocable"ifit indicates,whetherby statinga fixedtimeforacceptanceor
otherwise,that it is irrevocable." (CISG art. 16(2)(a)). The conference
adoptedthistextas a compromisebetweencivillaw and commonlaw dele-
gations. The civil lawyers,familiarwithlegal systemsthatassume an offer
is irrevocableunless otherwisestated,made a concessionby agreeingto
16
adopt in the CISG thegeneralprincipleof revocability(CISG art. 16(1)).
In turn,theyurgedthecommonlawyersto agreethatwherea businessman
statesin his offera particularperiodduringwhichtheofferis open thisoffer
should be irrevocable. The common lawyersreplied that this proposal
failedto distinguishbetweena firmoffer, whichcannotbe revoked,and an
offerwhichlapses at the end of the statedtimebut can be revokedat any
time. The language adopted in the CISG is describedas a compromise
solution.17

supra note 5, at 321.

15Eörsi,
"This concessionhad alreadybeen made at the 1964conferenceat The Hague. ULF art.5.
See Lagergren,The UniformLaw on Formationof Contracts for the InternationalSale of
Goods, [1966] J. Bus. L. 22, 27-29.
17
Althoughthe point was debated at the 1980 conference,the textwhich was ultimately
incorporatedin the CISG was adopted at the 1978 UNCITRAL meeting.The argumentsof

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8 INTERNATIONALLAWYER

Perhapsthe best way to read the CISG textin the lightof thisdrafting
intentand how a reason-
historyis to stressthe importanceof the offerer's
able offereewould understandthe offer.To answerquestion3, therefore,
requiresclose scrutinyof the language of Buyer'scommunicationand the
contextin whichit is made. The questionsuggeststhatBuyer'sletteruses
the word lapse, which suggeststhat Buyer understandsthe common law
distinctionand thereforedid not intend to make an irrevocableoffer.
When interpreting Buyer'sstatement,however,we mustconsidernot only
what Buyer intendedbut also what Seller knew or should have known
about Buyer'sintent(CISG art. 8).18Course of dealing and usage of trade
will,therefore,be relevant(CISG art.9).19 If the offeree-Seller
reasonably

the different view points are summarizedas follows in the summaryof the UNCITRAL
deliberations:
135. In supportof thisproposal [thecompromisetextultimatelyadopted],it was stated
thatthe principaltestto determinethatan offercould not be revokedwas whether
the offerindicatedthatit was irrevocable.Whetherthe offerwas irrevocablecould
be determinedby the factthat it stateda fixedtime for acceptance or otherwise.
However,themerefactof statinga timeforacceptancewould notautomaticallylead
to the resultthatthe offerwas irrevocableif,underthe circumstancesof the case,
sucha resultwas notintended.In particular,itwas said, wherea merchantfromone
commonlaw countrymade an offerto a merchantfromanothercommonlaw coun-
try,thefixingof a timeforacceptancewithoutmorewould notindicatethattheoffer
was irrevocable.
136. However,therewas considerablesupportforthe view thatthe interpretation placed
on thewordsof thetextby itsproposerswas unjustified.It was consideredthatthis
textclearlyadopted the rule that,if the offerstateda fixedtime foracceptance,it
automaticallywas irrevocable.
Uncitral, Yearbook: 1978 at 41 (1979). The reportof the proceedingsconcludes laconi-
cally: "The Commissiondecided to accept the wordingof the compromiseproposal . . . ."
Id. at Darà. 137.
I8CISG art. 8 states:
(1) For thepurposesof thisConventionstatements made by and otherconductof a party
are to be interpreted accordingto his intentwherethe otherpartyknewor could not have
been unaware what thatintentwas.
(2) If theprecedingparagraphis notapplicable,statements made by and otherconductof
a partyare to be interpreted accordingto theunderstanding thata reasonablepersonof the
same kind as the otherpartywould have had in the same circumstances.
(3) In determiningthe intentof a partyor the understandingof a reasonable person
would have had, due considerationis to be givento all relevantcircumstancesof the case
includingthe negotiations,any practiceswhichthe partieshave establishedbetweenthem-
selves,usages and any subsequentconductof the parties.
19CISG art. 9. See note 11 has concluded:
supra. One commonlaw commentator
At the Plenipotentiary Conference,some of thecommonlaw delegationssuggestedthatin a
transactionbetweentradersfromcommonlaw countriesin whichtheofferor fixeda timefor
lapse of the offerand was so understoodby the offereenot to have made an irrevocable
offer, thiswould be a situationwherethestatingin an offerof a fixedtimeforitsacceptance
could not be interpreted by a reasonablecourtto mean thattheofferwas irrevocable.This
resultcould easilybe reachedby a commonlaw court;but it is to be doubtedwhethera civil
law courtwould come to thisconclusion.
Date-Ban, supra note 9, at 58. See also Feltham,supra note 12, at 352 (statementof a fixed
time"would presumablynot be so treated[as irrevocable]when a traderin one commonlaw
countrystateda fixedtimeforacceptanceto a traderin anothercommonlaw country.").But
see Eorsi, supra note 5, at 321 (CISG provisionshould be interpreted to promoteuniform
application;see CISG art.7(1)).

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 InternationalSales Contracts 9

believed the offerwas irrevocableand acted in relianceon thisbelief(art.

16(2)(b) theofferwill be deemed irrevocable(CISG art. 16(2)(b)). Presum-
ably this mightbe the case in question 3 because the offereeis a Seller
whose principalplace of businessis in a civil law jurisdiction.
Althoughthereis a greaterlikelihoodthatan offerwill be foundirrevo-
cable under the CISG than would be the case at common law (Rest. 2d
§§ 24, 42) the policy of the CISG is consistentwiththe policy of the firm
offerprovisionof the UniformCommercialCode. Section 2-205 of the
Code provides:
Anoffer bya merchant tobuyorsellgoodsin a signedwritingwhichbyitsterms
givesassurancethatit willbe heldopenis notrevocable, forlackofconsidera-
tion,duringthetimestatedorifno timeis statedfora reasonabletime,butin no
eventmaysuchperiodofirrevocability exceedthreemonths; butanysuchterm
ofassuranceon a formsuppliedbytheofferee mustbe separatelysignedbythe
offeror.
In some respectsthe Code provisionis morerestrictive thanthe CISG text.
The offermustbe made by a merchant,in a signedwriting,fora periodno
longerthan threemonths. Nevertheless,underthe factsoutlinedin ques-
tion 3, it would appear thatthe CISG and the Code would yield the same
result.
On one point tangentialto question 3 the CISG and the common law
may diverge. If theofferset out in thequestionis deemed irrevocablemay
it be withdrawn?The CISG explicitlyauthorizeswithdrawalof even an
irrevocableofferifthewithdrawalreachesSellerbeforeor at thesame time
as the offer(CISG art. 15(2)). The common law, on the otherhand, has
virtuallyno case law authorityon thispointpresumablybecause thereis a
presumptionof revocability.20What littlecase law thereis deals withthe
and deci-
special case of lettersof credit,ratherthansale of goods contracts,
sions holdingthatan irrevocableletterof creditcannotbe withdrawnmay
not be extendedto sales contracts.
Question 4- On March 8 Seller mails a letterrejectingBuyer's order.
Laterthesame day Sellerchangeshis mind. May SellerstillacceptBuyer's
offer?
UndertheCISG Sellermaychangehis mindbuthe mustact promptlyso
that his acceptance reaches Buyer beforethe letterof rejection. Buyer's
offerdoes not terminateuntil Seller's letterreaches him (CISG art. 17).
Seller'swrittenacceptancewill become effective whenit reachesBuyerand
a contractwill be concludedat thistime(CISG arts.18(2) and 23).21 If the
acceptancearrivesbeforetheletterof rejection,therefore, a contractwill be
formedand therejectionletterwill be of no effect.A prudentSellerwill,of

2O2R. Schlesinger,supra note 10, at 714-16.

21
AlthoughtheCISG does notaddresstheissueof simultaneousreceiptof a rejectionand an
acceptancepresumablythe acceptancereceivedin thesecircumstancesshould be effective by
analogyto otherCISG provisions.See CISG art. 15(2)("an offer. . . maybe withdrawnifthe
withdrawalreachestheoffereebeforeor at thesame timeas theoffer").See also CISG art.22.

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10 INTERNATIONALLAWYER

course,use telexor thetelephonefollowedby a written confirmation noting

thatthe rejectionis to be considereda nullity.
A more difficultproblem will occur if Seller is authorizedto accept
Buyer's offerby beginningperformance,as he may be by the termsof
Buyer'soffer, courseof dealingor usage of trade(CISG art. 18(3)). In this
situation Seller accepts the offerthe momenthe performsan act, such as
dispatching the equipment,which indicateshis intentionto take up the
If
offer. thisperformance occursbeforetheletterof rejectionreachesBuyer
the rejection will be irrelevant because it will arriveafterthe contractis
concluded. No prudentofferee, however,will relysolelyon thisconceptual
argument. Although the relevantCISG provisiondoes not require the
to
offeree-Seller give Buyer noticethat he has performedtheact (CISG art.
18(3)), a judge or arbitrator may construe thisprovisionin the lightof the
general good faithrequirementso as to requirenotice under the circum-
stancesoutlinedin question4.22
The commonlaw agreeswiththegeneralpropositionthatSeller'saccept-
ance will be effective ifit overtakestheletterof rejection(Rest. 2d §§ 38, 40,
68),23but thecommonlaw also providesthata rejectiondoes notterminate
an irrevocableoffer(Rest. 2d §§ 25, 37). An acceptancethatarrivesafter
the letterof rejectionwill,therefore, be effectiveif the offeris irrevocable.
On this latterpoint the common law differsfromthe CISG because the
latterprovidesexplicitlythateven an irrevocableofferis terminatedwhen
noticeof rejectionreachesan offeror (CISG art. 17).
Question 5- On March 8 Seller mails a letteracceptingBuyer'sorder.
Later the same day Seller changes his mind. May Seller still reject the
offer?
The CISG explicitlypermitsSellerto withdrawan acceptanceifthewith-
drawal reachesBuyerbeforeor at the same timeas the acceptancewould
have become effective(CISG art. 22). Where noticeshave been sent an
acceptancewill be effective when it reachesthe offeror(CISG art. 18(2)).
As in question4, however,therewill be problemsif Seller has acceptedby
beginningperformance.Conceptuallythe answeris clear: thereis no way
thata withdrawalcan reach Buyerbeforethe acceptancebecomeseffective
and Seller's rejectionwill be a repudiationof a contract. On the other
hand, if Seller has changedhis mind and has not givennoticethathe has
startedperformancea judge or arbitratormay be predisposed to find
Seller's acts sufficiently ambiguousto allow a findingthatSeller's acts do
not indicate acceptance, especially where Buyer has not relied on the
performance.

22CISG art. 7(l)("In the interpretation of this Convention, regard is to be had ... to the
need to promote ... the observance of good faith in international trade"). Note that good
faith is relevant to interpretation of the convention; there is no general obligation that the
parties carry out their obligations in good faith. Cf. U.C.C. § 1-203.
23See also Restatement 2d §40, Comment, b. Query regardmg an acceptance which
arrives simultaneously with the rejection. For similar uncertainty under the CISG see note 21
supra.

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 InternationalSales Contracts 11

Underthecommonlaw theresultwill differ dependingon whetheror not

the offerwas revocable. If the offerwas revocableSeller's acceptancewas
effectivewhenmailed and Sellercannotwithdrawit (Rest. 2d §§ 63(a), 66).
If,on the otherhand, theofferis irrevocablethe acceptanceis not effective
untilit reachestheofferor can withdrawit by a notice
and Seller,therefore,
whichovertakesthe earlierletter(Rest. 2d § 63(b)).
Question 6- On March 8 Seller begins to assemble the equipmentfor
shippingbut does not notifyBuyerthathe has acceptedBuyer'soffer.On
March 15 Buyer sends a telegramcountermanding his orderof March 1.
AssumingBuyer'soriginal offerwas revocable,is Buyer'saction effective?
UndertheCISG Buyer'snoticeof revocationwill be effective ifit reaches
Seller beforeSeller has "dispatched" an acceptance or beforeSeller has
performedan authorizedact indicatingacceptance (CISG arts. 16(1) and
18(3)). There is no questionof thedispatchof an acceptancebecause under
the factsset out in question 6 Seller has sent no notice at all to Buyer.
Where Seller is authorizedto accept by performing an act, however,the
CISG makes acceptance effectiveon performanceof the act withoutthe
need to notifytheofferor.If theacceptanceis effective thereis a completed
contractand Buyer's attemptto revoke the offerwill be too late. The
answerto question6, therefore, turnson whetherSeller'sact of assembling
the equipmentfor shipmentis sufficient to indicate acceptance. As dis-
cussed in the answerto question4, Seller may be authorizedto accept by
performing an act by virtueof Buyer'soffer, courseof dealing,or usage of
trade. Question 6 does not give sufficient information forus to draw any
conclusionson thispoint. Even ifwe assume acceptanceby performance is
authorizedit is stillnot clear thatthe assemblingof equipmentwill be a
sufficientlyclear indicationof assent. The CISG refersto "the dispatchof
thegoods" as an exampleof an appropriateact but surelya less dispositive
act may also indicateassent. An appropriatetestin thecontextof question
6 mightbe whetheran outsideobserverwould be able to tell fromSeller's
act of assemblingthe equipmentthat the equipmentis to be used to fill
Buyer'sorder.
These same issues will arise under the common law and the Uniform
CommercialCode. Both the commonlaw and the Code permitan offeree
to acceptan offerin any mannerreasonablein thecircumstances, including
the renderingof performance(Rest. 2d §§ 30, 32; U.C.C. § 2-206). Both
laws differfromthe CISG, however,in thattheyrequireSeller to ensure
that Buyer learns of the performance.If Seller does not notifyBuyer at
commonlaw Buyer'scontractualdutyis discharged,whileunderthe Code,
Buyermay treathis offeras havinglapsed beforeacceptance(Rest. 2d § 56;
U.C.C. § 2-206(2)). Under eitherlaw Buyerwill be bound fora reasonable
time and cannot revokeduringthis period. This is supplementedby the
commonlaw rulethatmerepreparationto performis notan acceptancebut
may make the offerirrevocableas an option contract(Rest. 2d §§ 87; 52,
Commentb).

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12 INTERNATIONALLAWYER

Question 7- On March 8 Seller sends a printedformacceptingBuyer's

order but adding a termthat purportsto require Buyer to arbitrateany
disputearisingout of thecontract.Buyerreceivesthisformand says noth-
ing. Do Seller and Buyerhave a contractand, iftheydo, does thecontract
include the arbitrationterm?
The general rule in the CISG is that if Seller's purportedacceptance
makes any additionor modification to Buyer'soriginaloffertheacceptance
will operateas a rejectionand counter-offer (CISG art. 19(1)). As an excep-
tionto thisgeneralprincipletheCISG incorporatesintothecontractimma-
terialalterationsset out in theacceptancebut thenumberof cases thatwill
fall withinthisexceptionis limitedby a verynarrowdefinitionofmaterial-
ity (CISG art. 19(2), (3)). Seller's arbitrationterm,for example, would
materiallyalter Buyer's offerbecause it relatesto "the settlementof dis-
putes."Underthefactssetout in question7, whereneitherSellernor Buyer
has performed, thereis no contractbecause Buyer'soriginalofferhas been
rejected, Seller's "acceptance" is a counter-offer,and Buyer's silence will
not operate as an acceptance of the counter-offer (CISG art. 18(1)). If
Buyersubsequentlyaccepts Seller's deliveryof the equipmentarguablyhis
act will operateas an acceptanceof the Seller'scounter-offer and the arbi-
trationtermwill be partof the agreement.
The common law and the UniformCommercial Code have retreated
fromthe "mirror-image"rule. If a purportedacceptance includes addi-
tional or different termsand makes the acceptance conditional on the
offeror agreeingto thesetermsthenthe acceptanceis a counter-offer (Rest.
2d § 59). Nothingin question7, however,suggeststhatacceptanceis condi-
tional. Where the acceptanceis not conditionalthe acceptanceis effective
and the additionalor different termsare to be construedas proposals for
modificationof the contract(Rest. 2d § 59, Commenta). In question 7,
therefore, thearbitration termwould be an additionaltermand would only
be part of the contractif Buyeraccepted it. Buyer'ssilence is unlikelyto
operateas an acceptanceof thearbitration term(Rest. 2d § 69). The Code
differsfromthe commonlaw by providingthatan additionaltermin the
acceptancebecomespartof thecontractbetweenmerchantsunlessit mate-
riallyalterstheoffer(U.C.C. § 2-207(2)(b)). Whetheror nota termprovid-
ing forarbitration would be a materialadditionis a much-debatedquestion
in theUnitedStatesbutmostcourtopinionshave foundit to be material.24
The Code would probablyanswerquestion7, therefore, in thesame way as
the commonlaw.
Question 8- Buyer's March 1 letterstatesthat his offerwill lapse "in
fifteendays." Buyermails the letteron March 2; it reaches Seller in due
course on March 5. Seller sends an acceptanceby telegramon March 16.
Do Seller and Buyerhave a contract?

»See, e.g., MarleneIndus. Corp. v. Camac Textiles,Inc.,45 N.Y.2d 327, 380 N.E.2d 239, 24
UCC Rep. 257 (1980).

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 InternationalSales Contracts 13

We cannot give a definitiveanswer to this question under eitherthe

CISG or thecommonlaw. On one pointthe CISG is clear wherethecom-
mon law equivocates:underthe CISG the fifteen-day period beginsto run
fromMarch 1,the date shownon theletter(CISG art.20(l)).25 Both laws,
however,providethatto be effective the acceptancemustreach the offeror
beforethe end of the period stipulatedin the offer(CISG art. 18(2)). The
difficulty in determiningwhentheperiodends lies in thecontractlanguage
("in fifteen days"). Should we countthe day of dispatch? Should we read
"in" to mean "before" (not countingthe last day) or "not more than"
(countingthe last day)? If the contractclause is interpreted to mean the
offerends on March 16, Seller's acceptancetelegrammustreach Buyeron
March 16,Le. the day it is sent,unless March 16 is an officialholidayor a
nonbusinessday at Buyer'splace of business,in whichcase it will be effec-
tive if it arrivesthe nextbusinessday (CISG art.20(2)).
If Seller's acceptanceis foundto have arrivedlate it may stillbe given
some effect.The CISG distinguishesbetweenan acceptancewhichwould
have arrivedlate in any case and an acceptancewhichthe acceptingparty
could have expectedto arriveon timebut forsome reasonbeyondhis con-
trolit arriveslate. In the formercase, Buyermay choose to treatthe late
acceptanceas an effective acceptancebut ifhe does so he mustnotifySeller
of his decision"withoutdelay" (CISG art.21(1)). In thelattercase, where
under normal conditionsthe notice of acceptance shows it would have
arrivedon time,theacceptanceis effective unlessBuyerdecides not to treat
it as an acceptanceand so notifiesSeller withoutdelay (CISG art. 21(2)).
The common law does not make this distinction.If Seller's acceptance
arrivesafterthe Buyer'sofferhas lapsed it will be treatedas a counter-offer
whichmustbe acceptedby Buyerbeforethereis a contract(Rest. 2d § 70).
Buyer'ssilencewill normallynot operateas an acceptance(Rest. 2d § 69).
Since Seller's acceptancemay be effective as an acceptancedespitevaria-
tionsin the termsof the offer(U.C.C. § 2-207(1), (2)) it is no doubt appro-
priateto give Buyer,as the originalofferor, greaterprotectionthan under
the CISG.
Although not directlyrelevant to the answer to question 8, which
assumesthatBuyer'sofferarrivedin due course,theway theCISG and the
common law deal with the delayed offerprovidesan interesting contrast
withthe delayed acceptance. The CISG does not deal specificallywiththe
problemof delay in transmissionof offers,althoughthereare such provi-
sions foracceptances(CISG art. 21(2)) and fornoticessentin accordance
withprovisionsin Part III (CISG art. 27). These latterprovisionsprotect
the partytransmitting the delayed noticeby givingat least some effectto
the notice. By analogywe mightprotectthe offeror by not givingeffectto
theofferifit arriveslaterthanthedate theofferor would expecttheofferby
its termsto lapse. An exceptionmightbe made if the offereereasonably

2iCf 2 R. Schlesinger,supra note 10, at 1499-1500.See Rest. 2d § 41(1).

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14 LAWYER
INTERNATIONAL

relieson theassumption thattheoffer (cf CISG art.16(2)(b)).

is effective
thisis thesolutionadoptedby
In effect, thecommon law (Rest.2d § 49).

III. Conclusion:The CISG and AmericanInterests

A quickreviewofthepreceding discussionwillshowtheextent to which
theCISG represents a compromise between civillawandcommonlaw con-
cepts.The CISG rejects, forexample,thecivillaw presumption thatoffers
are irrevocablein favorof thecommonlaw presumption of revocability,
buttheCISG also includesa "firm offer"exception similartothatfoundin
theUniform Commercial Code (U.C.C. § 2-205). Although an acceptance
willnotbe effective untilit reachestheofferor (thusrejecting thecommon
law "mailboxrule")theCISG doesprovideforthemostimportant effect of
thecommonlaw rule: an offeror may not revoke an offeronce an accept-
ance is dispatched (CISG arts.16(1),18(2)).
The resultof thisconceptualamalgamis thatnot all cases will be
resolvedin thesamewayundertheCISG and U.S. law.26 The probable
effectof theconvention willbe to enforcesomewhat fewer"agreements"
thanwouldbe enforcedunderdomesticlaw. The CISG, forexample,
emphasizes theneedfordefiniteness in an offerwhichmeansthatan "open
price" offerwillnot be effective(CISG art.14;cf U.C.C. § 2-305). Where
exchanged forms do not match,application oftheCISG willlead to fewer
enforceable contracts becauseitrequires theterms ofan acceptance to con-
formtothoseoftheoffer in
except narrowly defined caseswhere alterations
are notmaterial(CISG art.19;cf.U.C.C. § 2-207).
Notwithstanding thesedifferences theformation provisionsoftheCISG
arecompatible withAmerican As theanswers
interests. tothequestions set
outaboveillustrate, theCISG and U.S. law resolvemanyproblems in the
samewayand therelatively fewdifferences willnotbe significant in prac-
tice. Althoughthe CISG does not recognizean "open price"offer, for
example, course of dealing and usage of trade will frequentlysupply the
necessary detail. Moreover, to the extentthatthe CISG enforcesfewer
"agreements" thismaybe desirablewherepartiesdeal witheachotherat a
distanceand acrossnationalboundaries becauseitwillforcepartiestopro-
ducemoreevidenceofa concludedagreement. Finally,itshouldbe noted
thattheCISG formation provisions are an improvement on theexisting
stateof affairs.Conflict-of-law are
problems particularly difficultwith
respect to formation issues: the parties cannot choose applicablelaw
becausetheveryexistence of theparties'agreement is thequestionbeing
asked.27Atpresent a U.S. traderinvolvedin a disputeaboutcontract for-

26In some
respectsthe traditionalcommonlaw ruleson formationare closerin spiritto the
CISG thantheUniformCommercialCode. Commonlaw rules,such as themirror-image rule
forofferand acceptance,reflecta greateremphasison conceptualismwhich resultsin fewer
enforceablecontracts.
21See Restatement
(Second) of Conflict of Laws § 200 (1971). See also 2 E. Rabel,
The Conflict of Laws: A Comparative Study 520-28 (2d ed. U. Drobnig 1960).

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 InternationalSales Contracts 15

mationfacesthecostsof researchingand provingforeignlaw in domesticor

foreigncourts. The CISG, whichis available in an officialEnglishtextand
whichno doubt will be heavilyannotated,providesa singleacceptabletext
thatover timeshould significantly reduce thesecosts.
Studies of the CISG as a whole have also concludedthatthe 1980 con-
ventionis compatiblewithAmericaninterests.The U.S. delegationto the
Vienna conference,theSecretaryof State'sAdvisoryCommitteeon Private
InternationalLaw, and theAmericanBar Associationhave all endorsedthe
CISG and have recommendedthattheUnitedStates'government ratifythe
convention.The reportpreparedby the Section of InternationalLaw for
the A.B.A. House of Delegates states:
The U.N. Convention on ContractsfortheInternationalSale ofGoodswaspre-
paredovermanyyearswithconsiderable care,drawing on thetechnical
adviceof
expertsfromall partsof theworld.The UnitedStatesparticipated extensively
andeffectively
in thedraftingprocess.Althoughon a number ofpointsdiffering
nationallaw solutionsare replacedwithcompromise manyof the
provisions,
CISG provisionsaresimilarinapproachandcontent totheUniform Commercial
Code. The majorobjections tothe1964Hagueconventions madebytheUnited
Stateshavebeenresolvedbythe1980CISG text.The Convention willpromote
U.S. businessinterests
and the UnitedStateswill gain politicalgoodwillby
prompt signatureand ratification
oftheConvention.^
Academicanalystshave come to similarconclusions.29This essay,whichis
moremodestin scope thantheseotherstudies,suggestsmerelythatthereis
no reasonfortheUnitedStatesnotto adopt PartII whenthe UnitedStates
ratifiesthe 1980 Vienna convention.

28A.B.A. Sectionof International

Law, Reportto theHouse of Delegates 13-14 (April 1981).
29See
Lansing & Hauserman,supra note 5, at 80 ("In the finalanalysis,the Conventionis
not likelyto presentcomplexlegal adjustmentsforAmericanattorneysschooled in the Uni-
formCommercialCode. Indeed, many attorneyswill be pleasantlysurprisedby the relative
ease withwhichtransition betweenlegal schoolsof thoughtcan be accomplished.");Comment,
A New Uniform Lawfor theInternational Sale of Goods: Is It CompatiblewithAmericanInter-
ests?2 Nw. J.Int'l L. & Bus. 129, 177-78 ("It providessolutionsto manyof theconcernsthat
merchantsand lawyersfeelpervadethe international sale of goods. A unique opportunityto
unifyan area of law whichcontinuesto presentobstaclesto international commerceis at hand.
In lightof the substantialadvantagesprovidedby thisConvention,United Statesratification
should be giventhe mostseriousconsideration.**)

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16 INTERNATIONAL
LAWYER

Appendix
Partii
oftheContract
Formation

Article14
(1) A proposalforconcluding a contract addressedto one or morespecific per-
sonsconstitutes an offer ifitis sufficientlydefiniteandindicates theintention ofthe
offeror to be boundin case of acceptance.A proposalis sufficiently definite if it
indicatesthegoodsand expressly or implicitly fixesor makesprovision fordeter-
miningthequantity and theprice.
(2) A proposalotherthanone addressed to oneor morespecific personsis to be
considered merely as an invitation tomakeoffers, unlessthecontrary is clearlyindi-
catedbythepersonmakingtheproposal.
Article15
(1) An offer becomeseffective whenit reachestheofferee.
(2) An offer,even if it is irrevocable,maybe withdrawn ifthewithdrawal reaches
theofferee beforeor at thesametimeas theoffer.
Article16
(1) Untila contract is concludedan offermaybe revokedif the revocation
reachestheofferee beforehe has dispatched an acceptance.
(2) However, an offer cannotbe revoked;
(a) ifitindicates, whether bystatinga fixedtimeforacceptance orotherwise, that
it is irrevocable; or
(b) ifitwasreasonable fortheofferee torelyon theoffer as beingirrevocable and
theofferee has actedin relianceon theoffer.
Article17
An offer, evenif it is irrevocable, is terminated whena rejection reachesthe
offeror.
Article18
(1) A statement madebyor otherconductoftheofferee indicating assentto an
offeris an acceptance.Silenceorinactivity doesnotin itselfamountto acceptance.
(2) An acceptance ofan offer becomeseffective at themoment theindication of
assentreachestheofferor. An acceptance is noteffective iftheindication ofassent
doesnotreachtheofferor within thetimehehasfixedor,ifno timeis fixed, within a
reasonabletime,due accountbeingtakenof thecircumstances of thetransaction,
including therapidity ofthemeansofcommunication employed bytheofferor. An
oral offermust be acceptedimmediately unless the circumstances indicate
otherwise.
(3) However, if,byvirtueoftheoffer oras a resultofpractices whichtheparties
haveestablished between themselves orofusage,theofferee mayindicateassentby
performing an act,suchas one relating to thedispatch ofthegoodsor payment of
theprice,without noticetotheofferor, theacceptance is effectiveat themoment the
actis performed, providedthattheactis performed withintheperiodoftimelaid
downin thepreceding paragraph.

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 InternationalSales Contracts 17

Article19
(1) A replytoan offer whichpurports tobe an acceptance butcontains additions,
limitations or othermodifications is a rejectionof the offerand constitutes a
counter-offer.
(2) However, a replyto an offerwhichpurports to be an acceptance butcontains
additionalor different termswhichdo notmaterially alterthetermsof theoffer
constitutesan acceptance,unlesstheofferor, without unduedelay,objectsorallyto
thediscrepancy or dispatches a noticeto thateffect.If he does notso object,the
termsofthecontract arethetermsoftheoffer withthemodifications contained in
theacceptance.
(3) Additional or differenttermsrelating,amongotherthings, to theprice,pay-
ment,qualityand quantity ofthegoods,placeand timeofdelivery, extentofone
party's to theotheror thesettlement
liability ofdisputes areconsidered to alterthe
termsoftheoffer materially.
Article20
(1) A periodoftimeforacceptance fixedbytheofferor in a telegram or a letter
beginsto runfromthemoment thetelegram is handedin fordispatchor fromthe
dateshownon theletteror,ifno suchdateis shown,fromthedateshownon the
envelope.A periodoftimeforacceptance fixedbytheofferor bytelephone, telexor
othermeansofinstantaneous communication, beginsto runfromthemoment that
theoffer reachestheofferee.
(2) Officialholidaysor nonbusiness daysoccurring duringtheperiodforaccept-
ance are includedin calculating theperiod. However,if a noticeof acceptance
cannotbe deliveredat theaddress, of theofferor on thelast day of theperiod
becausethatday fallson an official holidayor a nonbusiness day at theplace of
businessof theofferor, theperiodis extendeduntilthefirstbusinessday which
follows.
Article21
(1) A lateacceptanceis nevertheless effectiveas an acceptanceifwithout delay
theofferor orallyso informs theofferee or dispatches a noticeto thateffect.
(2) Ifa letterorotherwriting containinga lateacceptance showsthatithas been
sentin suchcircumstances thatifitstransmission had beennormalit wouldhave
reachedtheofferor in due time,thelate acceptanceis effective as an acceptance
unless,without delay,theofferor orallyinforms theofferee thathe considershis
offeras havinglapsedor dispatches a noticeto thateffect.
Article22
maybe withdrawn
An acceptance ifthewithdrawal beforeor
reachestheofferor
wouldhavebecomeeffective.
at thesametimeas theacceptance
Article23
A contract whenan acceptance
is concludedat themoment becomes
ofan offer
ofthisConvention.
in accordancewiththeprovisions
effective
Article24
For thepurposesofthisPartoftheConvention, an offer,
declarationofaccept-
anceor anyotherindication "reaches"theaddresseewhenit is made
of intention
orallyto himor deliveredby anyothermeansto himpersonally, to his place of

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18 INTERNATI ONAL LAWYER

businessor mailingaddress or, if he does not have a place of businessor mailing

address,to his habitual residence.

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