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GUIDE TO ARTICLE 20

Comparison with Principles of European Contract Law (PECL)


Match-up of CISG Article 20 with PECL Article 1:304
CISG Article 20


(1) A period of time for acceptance fixed by the offeror in a telegram or a letter begins to run from the moment the telegram is handed in for dispatch or from the date shown on the letter or, if no such date is shown, from the date shown on the envelope. A period of time for acceptance fixed by the offeror by telephone, telex or other means of instantaneous communication, begins to run from the moment that the offer reaches the offeree.

(2) Official holidays or non-business days occurring during the period for acceptance are included in calculating the period. However, if a notice of acceptance cannot be delivered at the address of the offeror on the last day of the period because that day falls on an official holiday or a non-business day at the place of business of the offeror, the period is extended until the first business day which follows.

PECL Article 1:304 [Computation of Time]
(complete and revised version 1998)

(1) A period of time set by a party in a written document for the addressee to reply or take other action begins to run from the date stated as the date of the document. If no date is shown, the period begins to run from the moment the document reaches the addressee.

(2) Official holidays and official non-working days occurring during the period are included in calculating the period. However, if the last day of the period is an official holiday or official non-working day at the address of the addressee, or at the place where a prescribed act is to be performed, the period is extended until the first following working day in that place.

(3) Periods of time expressed in days, weeks, months or years shall begin at 00:00 on the next day and shall end at 24:00 on the last day of the period; but any reply that has to reach the party which set the period must arrive, or any other act which is to be done must be completed, by the normal close of business in the relevant place on the last day of the period.


Editorial remarks

Comparison between provisions of the CISG (Article 20) and the
counterpart provisions of the Principles of European Contract Law

John Felemegas [*]
November 2002

1. Period for acceptance fixed by the offeror
2. Commencement of the period

a. CISG Art. 20(1)
b. PECL Art. 1:304(1)
3. Effect of holidays and non-business days
4. Computation of period from midnight to midnight

1. Period for acceptance fixed by the offeror: CISG Art. 20 - PECL Art. 1:304

In the situation where the offeror fixes a precise date by which the offeree must accept the offer (e.g., "no later that 31 August"), there are no special problems regarding the period allowed for acceptance of the offer by the offeree. However, in the situation where the offeror merely indicates a period of time for acceptance (e.g., "fifteen days"), problems may arise as to when that period begins, due to possible uncertainty in whether the period starts to run from the time the communication was prepared by the offeror, the time it was sent, or the time it was received by the other party.

It is an important element of certainty for parties who contemplate entering into a contract that there is a clear point of time at which the period fixed by the offeror for acceptance of the offer commences.

In Part II of the Convention, entitled "Formation of the Contract", CISG Article 20 provides the rules for calculating when that period begins to run in situations where the commencement of the period of time during which an offer can be accepted by the offeree has not been expressly fixed by the offeror.[1]

PECL Article 1:304, entitled "Computation of Time", seems to have a slightly broader scope than CISG Art. 20, since the former provides the rules for computing the commencement of a period of time "set by a party in a written document for the addressee to reply or take other action," while the latter deals specifically with the "time for acceptance fixed by the offeror." Nonetheless, it is arguable that an "acceptance of an offer" is included in the scope of an addressee's "reply or [] other action", in the context of the PECL.

2. Commencement of period: CISG Art. 20(1) - PECL Art. 1:304(1)

     (a) CISG Art. 20(1)

CISG Art. 20 makes a distinction in the rules for calculating the period of time available for acceptance, depending on the means of communication of the offer used by the offeror.

(i) Non-instantaneous means of communication

CISG Art. 20(1) provides that the period of time for acceptance fixed by the offeror in a telegram "begins to run from the moment the telegram is handed in for dispatch."

If the period of time for acceptance is communicated to the offeree by letter, the time runs "from the date shown on the letter, or if no such date is shown, from the date shown on the envelope."[2]

In other words, the CISG adopts the moment of dispatch of the communication as being effective.[3]

(ii) Instantaneous means of communication

CISG Art. 20(1) provides that if the period of time for acceptance is communicated by "telephone, telex or other means of instantaneous communication," the period "begins to run from the moment that the offer reaches the offeree".[4]

In such instances where instantaneous means of communication are used, the moments of dispatch and receipt of the communication are practically identical, as they occur almost simultaneously.

     (a) PECL Art. 1:304(1)

PECL Art. 1:304 makes no express distinction between non-instantaneous and other means of communication; rather the PECL make an implied distinction between written and oral means of communication.[5]

Similarly to the rule contained in CISG Art. 20(1) regarding non-instantaneous means of communication, PECL Art. 1:304(1) states that the relevant period of time "begins to run from the date stated as the date of the document."[6]

However, PECL Art. 1:304(1) goes further than the counterpart CISG provision by explicitly clarifying the situation where there is no date shown on the relevant document: "If no date is shown, the period begins to run from the moment the document reaches the addressee."[7]

It is submitted that despite the broader scope of the provision in PECL Art. 1:394(1), which encompasses the period for an addressee's reply or any other action, and also its lack of a distinction comparable to that contained in CISG Art. 20(1) - regarding instantaneous and other means of communication - the two counterpart provisions share the same rationale (i.e., the creation of certainty for the parties concerned [8]) and they also adopt similar solutions to the problem they address (i.e., by providing rules based first on objective evidence of dispatch, whenever such evidence is available).

3. Effect of holidays and non-business days: CISG Art. 20(2) - PECL Art. 1:304(2)

The counterpart provisions in CISG Art. 20(2) and in PECL Art. 1:304(2) contain identical rules, phrased in similar wording, providing that official holidays and non-business days occurring during the period fixed for acceptance are included in calculating the period.[9]

Where the notice or acceptance cannot be delivered on the last day of the period fixed for acceptance-reply, because it falls on a holiday or non-business day at the place of delivery (i.e., at the place of the offeror-addressee, as the case may be),[10] both counterpart provisions grant an extension of the period until the first business day which follows.[11]

4. Computation of period from midnight to midnight: PECL Art. 1:304(3)

In accordance with the 1972 European Convention on the Calculation of Time-Limits, the PECL provide that time runs from the start of the first day to midnight of the last day of the period.[12] However, the second sentence in Article 1:304(3) states that any reply that has to reach the party who set the period must arrive "by the normal close of business in the relevant place on the last day of the period."[13]

The Convention does not contain any comparable provision on the calculation of the period fixed for acceptance in terms of hours, but the PECL rule on the "normal close of business in the relevant place on the last day of the period" is not a controversial one and can also be found in other legal systems.[14]

[See also commentary by the author on this subject in: John Felemegas ed., An International Approach to the Interpretation of the United Nations Convention on Contracts for the International Sale of Goods (1980) as Uniform Sales Law, Cambridge University Press (2006) 321-324.]


FOOTNOTES

* Dr. John Felemegas is a Fellow of the Institute of International Commercial Law of the Pace University School of Law. Effective February 2003, he joins the Faculty of Law of University of Technology, Sydney.

1. Enderlein and Maskow International Sales Law (1992), also available online at <http://www.cisg.law.pace.edu/cisg/biblio/enderlein.html>, Art. 20, comment 1: "The objective of this rule is for the two parties to find identical bases for the calculation of that period."

2. The Secretariat Commentary on Article 18 of the 1978 Draft [draft counterpart of CISG Article 20] explains that "[t]his order of preference was chosen for two reasons: first, the offeree may discard the envelope but he will have the letter available as the basis for calculating the end of the period during which the offer can be accepted and second, the offeror will have a copy of the letter with its date but will generally have no record of the date on the envelope. Therefore, if the date on the envelope had not been checked, the offeror could not know the termination date of the period during which the offer could be accepted." Comment 3.

3. Enderlein and Maskow, supra note 1, Art 20, comment 1, where the authors also note that "the moment of dispatch is generally easier to prove than the moment of receipt."

4. Cf. CISG Art. 24: "For the purpose of this Part of the Convention, an offer, declaration of acceptance or any other indication of intention "reaches" the addressee when it is made orally to him or delivered by any other means to him personally, to his place of business or mailing address or, if he does not have a place of business or mailing address, to his habitual residence."

5. PECL Art. 1:304(1) refers to the period of time "set by a party in a written document."

See also Comment and Notes to PECL Article 1:304: "If a party sets a period of time in an oral communication, whether face-to-face or by phone, and does not state from when it is to run, the natural assumption is that it runs from the moment of communication. (This would apply even to a message left on a telephone answering machine: the period will start from the moment the message is recorded.) No special rule is needed for this case. Problems arise only with communications in writing (which as defined in Article 1:301 include e-mail and similar electronic forms of communication if they are capable of leaving a written record)."

6. The Comments to PECL Art. 1:304 explain the rationale for the rule adopted in the Principles:

"In default of a stated method of computation, there might be uncertainty whether the period should start from the time the communication was prepared, the time it was sent or the time it was received.

"It is well known that delays occur not only in the actual transmission of communications such as telegrams or letters but also in the sending out of all types of communication. For example a fax may be signed on one day but the sender's office may not dispatch it until the next. This will not necessarily be apparent to the sender, who may simply be given back the original; nor to the person in the recipient's office who is charged with responding. Although fax machines record the time the message was received at the top or bottom of the page, this is very easily lost when the document is photocopied again. For this reason the Principles adopt the rule that the date shown as the date of the letter or other document should normally be treated as the starting date by whatever method the document was transmitted." Comment D.

7. Note that a similar rule is adopted by the Convention in CISG Art. 20(1) regarding instantaneous means of communication; see comments in 2. (ii), supra.

8. On the importance of certainty for both parties, see PECL Comment A. See also Enderlein and Maskow, supra note 1; J. Ziegel, Report to the Uniform Law Conference of Canada on Convention on Contracts for the International Sale of Goods, (July 1981), also available online at <http://www.cisg.law.pace.edu/cisg/text/ziegel20.html>: "[CISG Art. 20] Paragraph (1) provides some sensible rules to determine the commencement of the period of time during which an offer can be accepted and appears to be unobjectionable from a common law point of view."

9. See Enderlein and Maskow, supra note 1, comment 5, where the authors state that "[o]nly holidays or non-business days at the place of business of the offeror are being taken into consideration because those may not be known to the offeree".

10. See Enderlein and Maskow, ibid.: "If, however, the last day of the period falls on a holiday at the place of business of the offeree and the offeree is prevented from dispatching an acceptance, he has to take this into account and hand in his acceptance for dispatch earlier." Id.

11. See Ziegel supra note 8, where the author states that this rule in CISG Art. 20(2) "is a logical corollary to the reception rule for acceptances adopted in art. 18(2). Since the acceptance is not effective until it reaches the offeror some provision is necessary where the last day for acceptance is a non-business day or an official holiday at the offeror's place of business. The practical effect of art. 20(2) appears to be to extend the period for acceptance by at least one day where the notice of acceptance cannot be delivered. It may of course be longer depending on the circumstances."

See also Official Comments to PECL Article 1:304, Comment F: "The Principles follow European convention (see the 1972 Convention on the Calculation of Time-Limits, Article 5) in including official non-working days (e.g., Saturday and Sunday) and official holidays in the period, except that if the last day of a period is an official non-working day or official holiday in the relevant place (i.e. where the message is to be delivered or the action performed) the period is extended to include the next working day. If in the relevant trade there is a usage of working on what is officially a holiday, or if there is a local usage of working or not working on the relevant day, the usage will prevail, see Article 1:105." Cf. CISG Article 9, on the issue of international trade usages.

12. See PECL Art. 1:304(3), first sentence; see also Comments to PECL Art. 1:304, Comment G.

13. See also Comment G: "Moreover, the relevant close of business should be the one where the party is, since the person who has been told to reply within a certain time should not be entitled to assume that this means the period calculated by his own time."

14. See Comments and Notes to PECL Article 1:304, Notes 3 and 4.


Comment and notes on PECL 1:304

Like the commentary to the UNIDROIT Principles and the U.S. Restatements, the comments to the PECL help explain the meaning of the text. The PECL notes offer an added boon to researchers. They identify civil and common law antecedents and related domestic provisions. With the permission of the Commission on European Contract Law, the comments and notes to this PECL article are presented below. The source of this material is Ole Lando & Hugh Beale eds., Principles of European Contract Law: Parts I and II, Kluwer Law International (2000) 131-134.


COMMENT AND NOTES: PECL Article 1:304: Computation of Time

(1) A period of time set by a party in a written document for the addressee to reply or take other action begins to run from the date stated as the date of the document. If no date is shown, the period begins to run from the moment the document reaches the addressee.

(2) Official holidays and official non-working days occurring during the period are included in calculating the period. However, if the last day of the period is an official holiday or official non-working day at the address of the addressee, or at the place where a prescribed act is to be performed, the period is extended until the first following working day in that place.

(3) Periods of time expressed in days, weeks, months or years shall begin at 00:00 on the next day and shall end at 24:00 on the last day of the period; but any reply that has to reach the party which set the period must arrive, or any other act which is to be done must be completed, by the normal close of business in the relevant place on the last day of the period.

Comment

A. Importance of certainty for both parties

It is important to have clear rules governing the computation of time so a party which has been told by the other that it must reply or do some other act by or within a certain time may know how long it has, but also so that the party which set the time may know whether or not the other has replied or acted within the time set.

B. Oral communications

If a party sets a period of time in an oral communication, whether face to face or by phone, and does not state from when it is to run, the natural assumption is that it runs from the moment of communication. (This would apply even to a message left on a telephone answering machine: the period will start from the moment the message is recorded.) No special rule is needed for this case. Problems arise only with communications in writing (which as defined in Article 1:301 include email and similar electronic forms of communication if they are capable of leaving a written record).

C. Express starting time prevails

If the party setting the time has stated how it is to be computed that should govern. In some situations the Principles require that it set a reasonable time. For example under Article 8:106, Notice fixing additional time for performance, para. (3), the notice must set a reasonable period of time for performance. Choosing an inappropriate method of computation might mean that the notice given is not adequate and the period will have to be extended.

D. Starting time not expressly stated

In default of a stated method of computation, there might be uncertainty whether the period should start from the time the communication was prepared, the time it was sent or the time it was received.

It is well known that delays occur not only in the actual transmission of communications such as telegrams or letters but also in the sending out of all types of communication. For example a fax may be signed on one day but the sender's office may not dispatch it until the next. This will not necessarily be apparent to the sender, who may simply be given back the original; nor to the person in the recipient's office who is charged with responding. Although fax machines record the time the message was received at the top or bottom of the page, this is very easily lost when the document is photocopied again. For this reason the Principles adopt the rule that the date shown as the date of the letter or other document should normally be treated as the starting date by whatever method the document was transmitted.

E. No date shown

With non-instantaneous communications like letters or telegrams, if the letter or telegram itself is undated, time should run from the date at which it was received, which will be all that is clear to the recipient. (With instantaneous written communications like a fax, there is little difficulty because the sending and receipt are simultaneous.) [page 132]

F. Non-working days count unless the last day of the period

The Principles follow European convention (see the 1972 Convention on the Calculation of Time-Limits, Article 5) in including official non-working days (e.g. Saturday and Sunday) and official holidays in the period, except that if the last day of a period is an official non-working day or official holiday in the relevant place (i.e. where the message is to be delivered or the action performed) the period is extended to include the next working day. If in the relevant trade there is a usage of working on what is officially a holiday, or if there is a local usage of working or not working on the relevant day, the usage will prevail, see Article 1:105.

G. Time runs from midnight to midnight

Also in accordance with the European Convention, the Principles provide that time runs from midnight to midnight.

Illustration 1: An offer dated Monday 1 April says that the offeree must let the offeror know within seven days if he wishes to accept. The seven day period starts from midnight on April 1 and ends at midnight on April 8.

However, the party which has set the period should not have to wait for a reply or other action beyond the normal working day in its business in the country. Moreover, the relevant close of business should be the one where the party is, since the person who has been told to reply within a certain time should not be entitled to assume that this means the period calculated by his own time.

Illustration 2: As in Illustration 1 but the offeror is in Paris and the offeree is in London, which is one hour behind the time in Paris. The offeree must get his reply to the offeror by the close of business in Paris, not the later close of business in London.

Notes [Match-ups with Continental and Common Law domestic rules, doctrine and jurisprudence]

1. Period runs from date of document or, if no date stated, of receipt

Some legal systems calculate time periods set in a document from the date stated in the document, rather than, for example, the date the document was received by the party who is to respond within the time stated: NORDIC Contracts Act 2(2) (offers). In most countries the question is one of interpretation and the period may run from the date of receipt if this is what is stated or seems appropriate in the circumstances (cf. the ENGLISH case of Dodds v. Walker [1981] 1 W.L.R. 1207, H.L. (by statute, tenant could apply for renewal of tenancy within 'four months of the giving of the landlord's notice' to quit: time started on receipt of notice and expired on corresponding day of fourth month after)). In GERMAN law the question is also left to general rules on interpretation, see Larenz/Wolf 28 no. 99, 101, 52 no. 1.

2. Official holidays and non-working days

Many systems also presume that official holidays and non-working days are included in the period of time: ENGLAND, see Chitty 21-019, Halsbury vol. 45, para. 1140; GERMANY, Larenz/Wolf 52 no. 10.

The rule that if the last day of the period is a holiday or non-working day, the time is extended to the next working day is also found widely: e.g. AUSTRIAN ABGB 903; BELGIAN Judicial Code art. 53; FRENCH NCPC art. 642 GERMAN BGB 193; NORDIC Instruments of Debt Act [page 133] 5 (2); PORTUGUESE CC art. 279(e), which also refers to judicial holidays. In England, however, the rule applies only to acts to be done by a court or in court; in other cases, the general rule is that the fact that the last day is a Sunday or a holiday does not extend the time, Halsbury vol. 45, para. 1138.

Article 1:304(2), first sentence, corresponds to the European Convention on Time-Limits of 16 May 1972 (Eur. T.S. No. 76), art. 5.

3. Time runs from start of next day to midnight of last day

This rule is very common: e.g. AUSTRIAN ABGB 902; BELGIAN Judicial Code art. 52(1); ENGLAND, presumption to this effect, see Chitty 21-020 and Halsbury, vol. 45, paras. 1134-1135; FINLAND, specific rule in Insurance Contracts Act of 1994, 11 (5); FRENCH NCPC arts. 641-642; GERMAN BGB 187(1) and 188(1); GREEK CC art. 241, Code of Civil Procedure art. 144(1); PORTUGUESE CC art. 279 (c). Article 1:304(3), first sentence, corresponds to the European Convention on Time-limits, art. 3(1).

4. Time ends at close of business on last day

This rule is found in some systems: e.g. BELGIAN Judicial Code art. 52(2); ENGLAND, presumption to this effect, see Chitty 21-019. In GERMAN commercial law, performance must be effected by the close of business on the last day, HGB 358. In other systems the rule would probably follow from the good faith principle, e.g. in PORTUGAL. Article 1:304(3), second sentence, corresponds to the European Convention on Time-limits, art. 3(2). [page 134]

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