2.1 Forming International Sales Contracts

Question 1

Article 23 states

Answer 1

A contract is concluded at the moment when an acceptance of offer becomes effective in accordance with the provisions of the contract

Question 2

Art 11 (subject to art 96) states that there is no form requirements meaning that oral contracts are ______

Answer 2

Binding

Question 3

Intent is subject to interpretation under Articles 7&8 in regard to _____

Answer 3

Good faith and intent of reasonable person

Question 4

CISG does not require to important aspects of common law contracting, what are they?

Answer 4

Consideration

Intent to create a legal relationship

Question 5

Important things to remember about the CISG in regards to contracting are-

Answer 5

• pro-contractually (favor contractus)
• art 55- no provisions in contract for price then market price is used
• Reaches v Dispatched (Art 27 in Part III)
• conduct and intention
• art 9 - industry practices

Question 6

Art 14 is about the offer, it states :

Answer 6

(1) sufficiently definite

(2) unless

Question 7

What is important about art 14?

Answer 7

• definitive re GOODS (identification and quantity) and PRICE (but remember art 55)
• intention to be bound ? Arts 8, 9, 11, 6, 7 etc
• specifically addressed to an offer or OR indicates it’s a widely propositioned offer
• offer is terminated on rejection (Art 17)

Question 8

How do we read intent through Arts 8, 9, 11, 6, 7?

Answer 8

8- reasonable person
9- trade practices 
11- no form requirement
6- opting out rules
7- good faith in international nature

Question 9

What cases relate to art 14?

Answer 9

LG Z Wickau- motions of offer and acceptance

Federal Supreme Court of Switzerland- wine case, to determine intent - found there was no contract

Question 10

Art 15 refers to what?

Answer 10

Effectiveness and withdrawal

Question 11

What is Art 16 about ?

Answer 11

Revocation

Question 12

What are the issues with Art 16?

Answer 12

• mailbox rule compromise
• no revocation if offer is IRREVOCABLE
• fixing a period of time MAY indicate the offer is irrevocable - room for homeward trend
• no revocation if offeror reasonably relies on offer as irrevocable -> Arts 8&9 assist here

Question 13

What is Art 18 about ?

Answer 13

Acceptance

Question 14

What does Art 18 state?

Answer 14

• requirements for acceptance
• silence or inactivity cannot IN ITSELF be acceptance
• effectiveness of acceptance is the formation of a contract - hence the significance

Question 15

What cases relate to Art 18?

Answer 15

• radio phone : distinguishing offer and letter of intent
• synthetic window parts: standard terms discussed AFTER acceptance do not form part of it
• Argentina machines case: signing invoice to open credit is a tacit acceptance

Question 16

What does Art 19 discuss?

Answer 16

The mirror image rule

Question 17

What is the mirror image rule ?

Answer 17

Offer = acceptance = meeting of minds = consensus

Anything that isn’t acceptance of the exact offer = a counter offer!!

Question 18

Why is the mirror image rule referred to as the “imperfect mirror image”?

Answer 18

Because it is not subject to immaterial alterations

But what is considered an immaterial alteration ?

Question 19

What are considered material terms subject to Art 19 (3)?

Answer 19

Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party’s liability to the other or settlement of disputes are considered MATERIAL

Question 20

What are two cases with immaterial terms ?

Answer 20

The ‘good’
CIETAC Rapeseed drugs case: FOB contract, buyer changing age of ship and freight is irrelevant to contract

The ‘bad’
German Automobile case: Different delivery date (march to april) - not objected against ?

Question 21

So if most alterations are material :

Answer 21

Battle of forms
Boiler plate v boilerplate
Standard terms contradicting

Question 22

What is the battle of forms ?

Answer 22

When standard forms cross - three standard solutions 
- formation rules
- Knock out
- last shot 
(KO, FS/FB, LB/LS)

Question 23

What is preferred out of KO, FB/FS, LB/LS?

Answer 23

First blow - highly unusual now
Knock out - preferred in absence of intent in most commercial jurisdictions
Last shot - supported by CISG formation rules