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2012 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods

Digest of Article 16 case law [reproduced with permission of UNCITRAL] [*]

Article 16

(1) Until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance.

(2) However, an offer cannot be revoked:
(a) If it indicates, whether by stating a fixed time for acceptance or otherwise, that it is irrevocable; or
(b) If it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer.

OVERVIEW -- ARTICLE 16(1)

1. Paragraph (1) of article 16 sets out rules for the effective revocation of an offer. "Revocation" of an offer under article 16(1) is distinguished from "withdrawal" of an offer under article 15 (2): withdrawal refers to a retraction of an offer that reaches the offeree before or at the same time as the offer reaches the offeree, whereas revocation refers to a retraction of an offer that reaches the offeree after the offer has reached the offeree.[1] Until a contract is concluded, article 16(1) empowers an offeror to revoke the offer provided the revocation reaches the offeree before he has dispatched an acceptance, unless the offer cannot be revoked by virtue of article 16 (2). Under articles 18 and 23, a contract is not concluded until the offeree's indication of assent reaches the offeror (except where article 18 (3) applies); thus the rule of article 16(1) precluding revocation from the time an acceptance is dispatched may block revocation for a period before the contract is concluded. A small number of cases refer to paragraph (1) article 16 CISG.[2]

OVERVIEW -- ARTICLE 16(2)

2. Subparagraph (a) of paragraph (2) provides that an offer cannot be revoked if it indicates that it is irrevocable, whether by stating a fixed time for acceptance or otherwise. There are no reported cases applying this subparagraph.

3. Subparagraph (b) of paragraph (2) provides that an offer cannot be revoked if the offeree relied on the offer and it was reasonable for him to do so. This subparagraph has been cited as evidence of a general principle of estoppel ("venire contra factum proprium"),[3] and as a general principle applicable to revocation of a declaration of avoidance of the contract.[4] It has also been held that domestic legal rules on promissory estoppel are not pre-empted except when the Sales Convention provides the equivalent of promissory estoppel, as it does in subparagraph (b).[5]


NOTES

* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.uncitral.org/pdf/english/clout/CISG-digest-2012-e.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:

   -    To enhance access to contents by computer search engines, we present in html rather than pdf;
 
   -    To facilitate direct focus on aspects of the Digests of most immediate interest, we inserted linked tables of contents at the outset of most presentations;
 
   -    To support UNCITRAL's recommendation to read more on the cases reported in the Digests, we provide mouse-click access to (i) CLOUT abstracts published by UNCITRAL (and to UNILEX case abstracts and other case abstracts); and also (ii) to full-text English translations of cases with links to original texts of cases, where available, in [bracketed citations] that we have added to UNCITRAL's footnotes; and
 
   -    To enable researchers to themselves keep the case citations provided in the Digests constantly current, we have created a series of tandem documents, UNCITRAL Digest Cases + Added Cases. The new cases and other cases that are cited in these updates are coded in accordance with UNCITRAL's Thesaurus.

1. Article 24 defines when an offer or other expression of intention -- presumably including a withdrawal or a revocation of an offer -- "reaches" the offeree.

2. See [SLOVENIA Court in Ljubljana 9 April 2008] (holding that an attempted revocation of the offer which was received by the offeree after the acceptance was dispatched (and also after the offeree had shipped the goods) was ineffective under article 16(1)). The following decision cites article 16, but because the case did not involve irrevocability of the offer -- see paragraph 2 -- the citation effectively refers to paragraph (1) of article 16: [GERMANY Landgericht Oldenburg 28 February 1996] (citing articles 14, 15, 16, 17, 18 and 19).

3. CLOUT case No. 94 [AUSTRIA Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft-Wien 15 June 1994] (seller's continued requests for information about complaints induced buyer to believe that seller would not raise defence that notice of nonconformity was not timely).

4. CLOUT Case No. 999 [DENMARK Ad hoc Arbitral Tribunal 10 November 2000] (also citing article 7(2)).

5. CLOUT case No. 579 [UNITED STATES District Court, Southern District of New York 10 May 2002] (finding limited to scope of promissory estoppel as claimed by buyer). Confirmed by CLOUT case No. 576 [UNITED STATES District Court, Southern District of New York 21 August 2002 (Geneva Pharmaceuticals Tech. Corp. v. Barr Labs. Inc.)].


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