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Reproduced with the permission of Oceana Publications

excerpt from

INTERNATIONAL SALES LAW

United Nations Convention on Contracts for the International Sale of Goods

Convention on the Limitation Period in the International Sale of Goods

Commentary by
Prof. Dr. jur. Dr. sc. oec. Fritz Enderlein
Prof. Dr. jur. Dr. sc. oec. Dietrich Maskow

Oceana Publications, 1992

Article 14 [Offer]

[TEXT OF THE UNIFORM LAW]

(1) A proposal [2] for concluding a contract [3] addressed to one or more specific [4] persons constitutes an offer [1] if it is sufficiently definite and indicates the intention [5] of the offeror to be bound in case [6] of acceptance. A proposal is sufficiently definite [7] if it indicates the goods [8] and expressly or implicitly [11] fixes or makes provision [12] for determining the quantity [9] and the price [10].

(2) A proposal other than one addressed to one or more specific [4] persons is to be considered merely as an invitation to make offers, unless the contrary [13] is clearly indicated by the person making the proposal.

[WORDS AND PHRASES, CONCEPTS

1. definition of an offer
2. a proposal
3. for concluding a contract
4. offers vs. invitations to make offers
5. indicates the intention of the offeror to be bound
6. in case of acceptance
7. minimum content of the offer
8. - indicates the goods
9. - indicates the quantity
10. - indicates the price
11. expressly or implicitly fixes or makes provision for determining the quantity and the price
12. fixes or makes provision for determining the quantity and the price
13. unless the contrary is clearly indicated (impact upon intention to be bound) ]

[COMMENTARY]

[1] [definition of an offer]

An offer is defined as a proposal for the conclusion of a contract if it is addressed to one or more specific persons, expresses the intention of the offeror to be bound and contains certain minimum terms. A statement of acceptance can also be an offer if it goes beyond the terms of the offer, differs greatly from that one or is given belatedly (c. Articles 19 and 21). Any successive proposal constitutes an offer. The decisive "offer" is always the declaration which preceded final acceptance (Eörsi/BB, 136 fol). Here the CISG follows the traditional treatment of the conclusion of a contract which does not fully meet the requirements of today's world of business, especially when it comes to the conclusion of sales contracts covering major and technically complicated objects.

In many instances the question is raised, therefore, of how to deal with contracts which do not fit into the scheme of offer and acceptance (e.g. see Doralt, 60; examples are given also by Schlechtriem, 34).

[2] [a proposal]

An offer is not defined as a statement but rather as a proposal. Sometimes the dispatch of goods can constitute such a proposal. It may be recalled here that the written form is not mandatory for the conclusion of a sales contract.

[3] [for concluding a contract]

The proposal has to be aimed at concluding a contract, i.e. it should cause the conclusion of a contract merely by accepting it. Inquiries for possible deliveries or proposals for negotiations on a sale do therefore not constitute an offer.

[4] [offers vs. invitations to make offers]

Newspaper advertisements and similar acts of publicity or public tenders do not constitute an offer. Proposals addressed to the public at large are mere invitations to make offers. Even if brochures, catalogues or circulars, for instance to all mechanical engineering companies, are addressed to specific persons, there will mostly be a lack of the intention to be bound (c. note 5). If there is such intention to be bound and if circulars, or catalogues are addressed to specific persons, those acts could constitute an offer, the number of addressees being of no consequence (Eörsi/-Lausanne, 45); also Sono/Dubrovnik,119). [page 83]

[5] [indicates the intention of the offeror to be bound]

A proposal is aimed at concluding a contract only when it expresses the intention of the offeror to be bound. The offer is one of the two statements of will which lead to the conclusion of a contract. Hence the relationship under a contract is a relationship of intention. The intention to be bound is not excluded because of the fact that the contract is to be concluded under a condition. A proposal for the conclusion of a contract does not automatically contain the intention to be bound; it may also be aimed at taking up negotiations on a sale. This could be the case in particular if the proposal at first only contains the category and quantity of the goods (c. note 7). If there is the intention to be bound, lacking provisions could be complemented by jus dispositivum (Sono/Dubrovnik, 120). Some formulations in the offer might cause doubt as to the intention to be bound. In some instances the intention to be bound can be seen from the clarity with which the goods are specified (Eörsi/BB, 140). As far as the intention to be bound is the result of an error, questions of validity are touched upon which do not come under the CISG. Non-binding offers do not contain an intention to be bound.

[6] [in case of acceptance]

It is expressly stipulated here that the intention to be bound must refer to the contract to be concluded. If the offer is not accepted, there will be no binding. The intention to be bound does not refer to the offer itself. (As to the binding nature of the offer, compare Article 15 fol).

[7] [minimum content of the offer]

The minimum content should include the description of the goods as well as the quantity and the price (c. Article 55). The goods can be indicated both individually and as a category. Insufficient and not a category in this sense are collect names, e.g. woodworking machinery. It is not necessary for the offer to indicate the quality, its packaging (Article 35) as well as the place or date of delivery (Articles 31 and 33). If the offer contains relevant information, however, those are to be considered as being material (Article 19, paragraph 3).

The second sentence of paragraph 1 had been particularly disputed both during the preparation and the holding of the Vienna Conference (O.R., 92) because such "minimum terms" do not suffice in many practical cases, and a relevant proposal is then not definite enough to constitute an offer (c. note 5). One has to proceed, however, on the assumption that the offeror will not express an intention to be bound unless he himself believes that the proposed parts of the contract are sufficient. If, on the contrary, the offeree considers those parts as insufficient, he may add the relevant amendments to his statement (c. Article 19). [page 84]

[8] [ - indicates the goods]

The mere indication of the goods may not always suffice, but rather calls for a certain specification depending on the category of the goods (Eörsi/Lausanne, 46).

[9] [ - indicates the quantity]

The quantity does not have to be determined from the outset. Reference to all the requirements or total output of the goods should be acceptable (O.R., 21). Any quantity may also be offered; the determination can be done through acceptance (Eörsi/Lausanne, 46). The quantity may also be determined by naming the requirements for a certain purpose or the amount of money available for it (Eörsi/BB, 141).

[10] [ - indicates the price]

While the price belongs here to the minimum content of an offer, Article 55 concedes that a contract may also be validly concluded if the price has not been fixed expressly or implicitly and nothing has been agreed that would make provision for its determination.

Thus there is a contradiction between Articles 14 and 55, which has been duly reflected in various sources (Bydlinski/Doralt, 62 fol; Schlechtriem, 37 fol; Rehbinder/Freiburg, 158; Eörsi/BB, 141). Article 55 presupposes the existence of a valid contract which pursuant to Article 14 simply cannot exist. It seems to us that the price problem has been over-emphasized in the discussion because Article 14, in the extreme, permits that nothing be said about the price but that the possibility of determining it is implied.

The determination of the price necessarily includes the currency, whereas agreement on the terms of payment is not necessary (c. Articles 54 and 57 fol).

[11] [explicitly or implicitly fixes or makes provision for determining the quantity and the price]

This rule of implicitly agreeing on the quantity and price was very much disputed at the Vienna Conference (O.R., 275, 292) for many delegations feared a misuse by (economically more powerful) sellers. Whether or not one can proceed on an implicit agreement on quantity and price certainly depends in the first place on the intention of the parties themselves (Article 8, paragraph 1) as well as on the usage of the parties and the established practices in the relevant branches (Article 9).

[12] [fixes or makes provision for determining the quantity and price]

Quantity and price can be fixed later on the basis of objective factors (requirements, output and/or offer of the competition, stock market or market prices). It may, however, also be left to one of the parties (list price) or a third person to fix quantity and price (Schlechtriem/Doralt, 187); Schlechtriem, 37; Eörsi/Lausanne, 47). [page 85]

[13] [unless the contrary is clearly indicated (impact upon intention to be bound)]

The contrary means that the offeror wants to be bound also towards non-specific persons, e.g. in formulating ''as long as stocks last". Commercial practices may be of importance in this respect, too. [page 86]

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Pace Law School Institute of International Commercial Law - Last updated August 7, 2002
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