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Published in J. Herbots editor / R. Blanpain general editor, International Encyclopaedia of Laws - Contracts, Suppl. 29 (December 2000) 1-192. Reproduced with permission of the publisher Kluwer Law International, The Hague.

[For more current case annotated texts by this author, see Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed. (2003) and Lookofsky, Understanding the CISG in the USA, 2d ed. (2004).]

excerpt from

The 1980 United Nations Convention on Contracts
for the International Sale of Goods

Joseph Lookofsky

Article 18
Acceptance: What constitutes; Time takes effect

I.   Acceptance: Indication of Assent
II.  Time Acceptance Takes Effect
      A. When Assent Reaches Offeror
      B. Receipt Theory
      C. Acceptance Within Time Fixed or Reasonable Time
      D. Assent by Performance of Act

I. Acceptance: Indication of Assent

112. Paragraph (1) of Article 18 tells us which kinds of statement constitute a true acceptance:

'(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'.

113. According to the rule in paragraph (1), an acceptance may consist of a statement or of other conduct, e.g., shipping goods which the buyer has offered to buy. Whatever the form, for a statement or conduct to constitute an acceptance, it must provide some indication of the offeree's assent.

On the other hand, since the CISG does not impose upon the offeree a general duty to reply, silence or inactivity does not - in itself - amount to acceptance. Therefore, the offeror cannot bind the offeree in advance merely by stating that silence will be treated as an indication of the offeree's assent. Then again, if the offeree initiates a transaction by soliciting an offer, he - the offeree - may bind himself in advance by indicating that an offer received will be deemed accepted absent contrary indication by the offeree within a specified period.[1]

1. See the decision of Cour de Cassation (France) of 27 Janury 1998 (180 P), also reported in UNILEX (applying the principle set forth in Article 18(1) in case where buyer had requested that goods purchased be modified and had accepted them without reservation). See also the decision of OLG Köln (Germany), 22 Februrary 1994 (22 U 202193), RIW 1994,972-973, also reported in UNILEX (silence, linked to other circumstances, constituted an acceptance). Regarding the decision (reported in Danish) in Ugeskrift for Retsvæsen 1998 at p. 1092 (where the offeree's silence did not constitute an acceptance), see Lookofsky, J., 'Alive and Well in Scandinavia: CISG Part II,' 18 Journal of Law & Commerce 289-299 (1999) [available at <http://www.cisg.law.pace.edu/cisg/biblio/lookofsky1.html>].

II. Time Acceptance Takes Effect

A. When Assent Reaches Offeror

114. Paragraph (2) of Article 18, which determines the point in time at which an acceptance (under the first paragraph) becomes effective, provides as follows:

'(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 [page 69] employed by the offeror. An oral offer must be accepted immediately unless the circumstances indicate otherwise.'

By virtue of the rules set forth in paragraph (2), an acceptance becomes effective upon the timely anival of the offeree's indication of assent.[1] In other words, to be effective, the acceptance must arrive, and it must arrive 'in time'.

1. As to when such a communication 'reaches' the offeror, see Article 24, discussed infra in No. 133. Once the acceptance becomes effective, a contract is formed pursuant to Article 23: see infra No. 132.

B. Receipt Theory

115. An important consequence of the 'receipt theory' of acceptance, as adopted by the CISG in Article 18(2), is that the sender of the acceptance (the offeree) must bear the risk of transmission, i.e., the risk that the acceptance may never really arrive, e.g., if the acceptance is lost in the mail. In other words, absent contrary prior agreement, the offeree's notice of acceptance must in some manner actually reach the offeror, in order to bring about the legal consequences generally associated with the acceptance of a CISG offer.

C. Acceptance Within Time Fixed or Reasonable Time

116. In accordance with the principle that the offeror is the master of the offer, the acceptance must reach the offeror within the time which the offeror has fixed.[l] If no time has been fixed, the CISG default rule is that the acceptance must reach its destination within a 'reasonable' time, taking due account of all the circumstances. Thus, an offer sent by telefax will require a more prompt reply than an offer sent by post. Absent contrary indication, an oral offer requires an 'immediate' acceptance.

1. Regarding the time at which such a period begins to run, see Article 20 and infra No. 126.

D. Assent By Performance of Act

117. As regards the time at which acceptance takes effect, paragraph (3) of Article 18 provides for cases where the offeree assents by performing an act:

'(3) ... 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.' [page 70]

In many cases, the offeror will call upon the offeree to 'indicate assent' by a statement of intention, i.e., a notification which serves as a promise by the offeree to act at some future point in time.

Sometimes, however, the offeror will request - or at least impliedly condone that the offeree accept without actually making such a statement. For example, the offeror may request or condone that the offeree accept by performing an act, e.g. shipping the goods ordered by the offeror. A similar understanding may follow from a 'course of dealing' established between the particular parties concerned or from a broader usage among merchants within the particular trade.[1]

In all such cases, assuming the act is performed within the time fixed by the offeror or within a reasonable time, the offeree's acceptance becomes effective at the moment the act is actually performed.[2] And from this it follows that the offeror cannot revoke (even an otherwise revocable offer) if the purported revocation reaches the offeree after the act requested has been performed.[3]

1. Regarding these concepts under Article 9 see supra No. 87 et seq.
2. See, e.g., the decision of OLG Frankfurt am Main, 23 May 1995 (5 U 209/94), reported in UNILEX (delivery by seller may constitute acceptance by performance).
3. This conforms with the corresponding principle laid down in Article 16(1): see supra No. 105 et seq. Regarding the non-notice situation described in Article 18(3), see Murray, J., op. cit., (No. 102), pp. 30-33. [page 71]

Pace Law School Institute of International Commercial Law - Last updated April 1, 2005
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