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Reproduced with permission from 23 International Lawyer (1989) 443-483

excerpt from

Reconciliation of Legal Traditions in the U.N. Convention on Contracts for the International Sale of Goods

Alejandro M. Garro [*]

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Perfection of Sale Contracts

A classic instance of theoretical conflict between common law and civil law approaches is found in the area of formation of contracts. The classic civil law approach is that an acceptance is not effective, hence the contract is not perfected, until it reaches the offeror,[47] thus placing the risk of transmission of a written offer on the offeree. Because the offeree was the party that selected the medium of communicating the acceptance, the offeree is considered in the best position to insure against possible delays and hazards. The common law takes the opposite view, according to which a contract is completed when the offeree dispatches the acceptance.[48] Accordingly, the risk of delay or loss of the acceptance rests on the offeror, provided the offeree dispatched the acceptance by a medium expressly or impliedly authorized by the offeror.[49]

This difference of approach proved to be of minor practical consequence. According to article 18(2) of the Convention, an offer is effective when it reaches the offeror.[50] However, article 16(1) of the Convention provides for the most important consequence of the common law "mail-box rule," that is, an offer may not be revoked if the revocation reaches the offeree after it has dispatched an acceptance.[51] Thus, while receipt is crucial for the effectiveness of the offer, dispatch remains the standard to determine the timeliness of its revocation. Moreover, in one important situation the Convention does not follow the receipt theory. According to article 18(3), the acceptance is effective at the moment the offeree indicates assent by performing an act, "such as one relating to the dispatch of the goods or payment of the price." Therefore, although the Convention adopts the receipt theory for the most part, a closer look at the practical consequences of the provisions on the formation of contract reveals a well-balanced compromise between civil law and common law principles.

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* Alejandro M. Garro, Lecturer in Law, Columbia University. This paper was submitted to the 81st Annual Meeting of the American Association of Law Libraries, June 26-29, 1988.

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47. See, e.g., German Civil Code art. 130: Swiss Federal Code of Obligations art. 5; see also Mexican Civil Code for the Federal District art. 1807; Venezuelan Civil Code art. 1137.

48. At common law, the so-called "mailbox rule" which makes a written acceptance effective upon dispatch, dates back tot he beginning of the 19th century. See Adams v. Lindsell, 1 Barn & Ald. 681 (K.B. 1818). In this case, the offeror misdirected the offer, thus delaying the offeree's acceptance. After dispatch of the acceptance, but before its receipt, the offeror had sold the goods to a third party. Upon a claim for damages, the court ruled for the offeree because the mishap occurred as a result of the offeror's neglect.

49. See Rosett, supra note 25, at 283 (noting that the so-called "mailbox rule" raises the issue of consideration and the traditional Anglo-American notion that contracts are bargains, according to which a contract is perfected by the delivery of the bargained for equivalent of the promise).

50. The offer, the withdrawal of an offer, the revocation of an offer, and the acceptance by declaration all become effective only when they reach the other party. Convention, supra note 3, arts. 15, 18 22-23. Art. 24 makes clear when a declaration must be presumed to have reached the addressee. See J. Honnold, Uniform Law, supra note 13, at 186-87.

51. For a comprehensive discussion of the Convention's provisions on formation of contracts, providing examples of their practical consequences, see Winship, Formation, supra note 39, at 14.

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Pace Law School Institute of International Commercial Law - Last updated August 16, 1999

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