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GUIDE TO CISG ARTICLE 16

Secretariat Commentary (closest counterpart to an Official Commentary)


Guide to the use of this commentary

The Secretariat Commentary is on the 1978 Draft of the CISG, not the Official Text, which re-numbered most of the articles of the 1978 Draft. The Secretariat Commentary on article 14 of the 1978 Draft is quoted below with the article references contained in this commentary conformed to the numerical sequence of the Official Text, e.g., article 14 [draft counterpart of CISG article 16].

To the extent it is relevant to the Official Text, the Secretariat Commentary on the 1978 Draft is perhaps the most authoritative source one can cite. It is the closest counterpart to an Official Commentary on the CISG. A match-up of this article of the 1978 Draft with the version adopted for the Official Text is necessary to document the relevancy of the Secretariat Commentary on this article. See the match-up for this article for a validation of citations to this Secretariat Commentary. This match-up indicates that article 14 of the 1978 Draft and CISG article 16 are identical.


Text of Secretariat Commentary on article 14 of the 1978 Draft
[draft counterpart of CISG article 16]   [Revocability of offer]

PRIOR UNIFORM LAW

ULF, article 5.

COMMENTARY

1. Article 14 [draft counterpart of CISG article 16] states that offers are in general revocable and that the revocation is effective when it reaches [see footnote 1] the offeree.

2. The right of the offeror to revoke his offer terminates at the moment the contract is concluded. For the reasons explained in paragraph 4 of this commentary, this basic rule applies only in those cases in which the offeree orally accepts the offer and in those cases in which the offeree accepts the offer in conformity with article 16(3) [draft counterpart of CISG article 18(3)].

3. Under article 16(3) [draft counterpart of CISG article 18(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 without giving notice to the offeror by performing an act, such as one relating to the dispatch of the goods or payment of the price, the acceptance is effective at the moment the act is performed. Since the acceptance is effective and the contract is concluded at the moment the act is performed, the right of the offeror to revoke his offer terminates at that same moment.

4. In the typical case in which the offer is accepted by a written indication of assent, article 14(1) [draft counterpart of CISG article 16(1)] provides that the right of the offeror to revoke his offer terminates at the moment the offeree has dispatched his acceptance, and not at the moment the acceptance reaches the offeror. This rule was adopted even though article 16(2) [draft counterpart of CISG article 18(2)] provides that it is at this later moment that the acceptance is effective and the contract is therefore concluded in accordance with article 21 [draft counterpart of CISG article 23].

5. The value of a rule that a revocable offer becomes irrevocable prior to the moment at which the contract is concluded lies in the fact that it contributes to an effective compromise between the theory of general revocability of offers and the theory of general irrevocability of offers. Although all offers except those which fall within the scope of article 14(2) [draft counterpart of CISG article 16(2)] are revocable, they become irrevocable once the offeree makes his commitment by dispatching the acceptance.

Irrevocable offers, paragraph (2)(a)

6. Article 14(2)(a) [draft counterpart of CISG article 16(2)(a)] provides that an offer cannot be revoked if it indicates that it is irrevocable. It should be noted that this provision does not require a promise on the part of the offeror not to revoke his offer nor does it require any promise, act, or forbearance on the part of the offeree for the offer to become irrevocable. It reflects the judgement that in commercial relations, and particularly in international commercial relations, the offeree should be able to rely on any statement by the offeror which indicates that the offer will be open for a period of time.

7. The offer may indicate that it is irrevocable in different ways. The most obvious is that the offer may state that it is irrevocable or that it will not be revoked for a particular period of time. The offer may also indicate that it is irrevocable by stating a fixed time for acceptance.

8. Article 14(2)(b) [draft counterpart of CISG article 16(2)(b)] provides that the offerer cannot revoke his offer if it was reasonable for the offeree to rely upon the offer as being irrevocable and the offeree has acted in reliance on the offer. This would be of particular importance where the offeree would have to engage in extensive investigation to determine whether he should accept the offer. Even if the offer does not indicate that it is irrevocable, it should be irrevocable for the period of time necessary for the offeree to make his determination (OFFICIAL RECORDS, p. 22).


FOOTNOTES

1. Article 22 [draft counterpart of CISG article 24] contains a definition of the term "reaches".


Pace Law School Institute of International Commercial Law - Last updated May 8, 2007
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