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Article 21 [Late acceptance]

(1) A late acceptance [1] is nevertheless effective as an acceptance if without delay the offeror [2] orally so informs the offeree or dispatches [3] a notice to that effect.

(2) If a letter or other writing containing a late acceptance shows that it has been sent in such circumstances that if its transmission had been normal it would have reached the offeror in due time [4], the late acceptance is effective as an acceptance unless, without delay, the offeror orally informs the offeree that he considers [5] his offer as having lapsed or dispatches a notice to that effect.

[WORDS AND PHRASES, CONCEPTS

[COMMENTARY]

[1] [cases of late acceptance]

The ruling under Article 21 covers two cases of late acceptance, i.e. an acceptance which has not reached the offeror in due time (c. Article 18, paragraph 2):

      (a) The acceptance was dispatched belatedly, either after the period fixed by the offeror has expired and the offer has therefore already lapsed (Article 17) or still during that period but using a way of communication which has precluded the offeror from being reached in due time. The offeree has to be aware at all times that he is late in his acceptance. He thus knows that his acceptance is actually a counter-offer and needs to be confirmed through an acceptance. Silence by the offeror cannot be inferred by him to be an acceptance (Article 18, paragraph 1). The situation is more difficult if the offeror has not fixed a time, the acceptance having to be made nonetheless within a reasonable period (Article 18, paragraph 2). In that case, the offeror and the offeree may well consider different periods as being reasonable. Objectively, a reasonable time may have [page 103] expired already, even though the offeree assumes that the acceptance was made in due time.

      (b) The acceptance was dispatched in time but its delivery to the offeror was delayed because of unforeseen circumstances. In this case, the offeree believes to have concluded a contract since he does not know of the delay in delivering the communication.

Both cases of late acceptance can be remedied.

[2] [up to offeror whether he considers late acceptance valid]

In both cases it is up to the offeror whether or not he considers the acceptance to be valid. If he wants a contract, in case (a) he must inform the offeree accordingly; in case (b) he may remain silent.

Should the offeror keep silent in case (a), there will be no contract. In the interest of clarity between the parties, a communication on the part of the offeror to the offeree is recommendable in any case. If the offeror wants the contract, the offeree may not invoke that he was late in accepting (Honnold, 210 fol, mentions examples which appear rather abstract because they disregard the date of delivery). This means that possibly changed circumstances, such as price developments, can only be to the advantage of the offeror, which may seem unjust because nothing is said about the causes for the delay. The acceptance, for instance, might have been dispatched only a little late and may in addition have been left at the post office for a long time. Such a case is not covered by paragraph 2.

[3] [offeree must be informed; risk of transmission borne by offeree]

If the offeree is informed accordingly, the offer, which actually should have lapsed, remains in existence and leads to the formation of a contract through late acceptance. In many legal systems there is a different solution for this case. Late acceptance is regarded as a new offer which can be accepted by the original offeror. If the latter remains silent there will, as under the CISG, be no contract. The practical difference lies in the date on which the contract is concluded; under the provisions of the CISG upon receipt of the late acceptance, otherwise when it is confirmed and/or the counter-offer is accepted.

The risk of transmission is borne by the offeree. The communication should indeed be received since it is the only way to bring about a contract and insofar constitutes the actual acceptance; otherwise, a contract might be created without the offeree knowing anything about it (Rehbinder/Freiburg, 163). In this context the wording "without delay" is not quite comprehensible since the offeror did not have to reckon with an acceptance and probably needs time for reflexion. He would have such time for reflexion if the late acceptance were treated as a counter-offer (Bydlinski/Doralt, 71). This [page 104] rule is questionable, in particular when the acceptance is declared very late and the circumstances as a whole have changed in the meantime (Rehbinder/Freiburg, 162).

It is not clear whether the late acceptance becomes effective at the moment when the offeror informs the offeree or dispatches the relevant communication or whether it becomes effective retroactively from the moment it is received. (Since the offeror needs to inform the offeree without delay, there will only be a slight difference in time. Nonetheless the question might be important whether the offeree can withdraw his acceptance. (affirmative: Honnold, 200, doubting: Farnsworth/BB, 193)). It is doubtful whether oral information will be sufficient if a reservation was made pursuant to Article 96 (c. note 3 regarding Article 18).

[4] [late acceptance in case of normal handling]

In the case of normal handling, a contract would under Article 18 have been made with timely acceptance. But what is normal handling internationally? Is a two weeks' postal handling from Italy to Germany normal, not however four weeks? The offeree relies on the conclusion of the contract and such reliance shall be protected. Hence, the offeror may remain silent if he, too, still wants the contract. Here the rare case is involved where silence leads to the making of a contract (Farnsworth/BB, 192).

The same rule is contained in 30(3) of the ICCA or 149 of the German BGB. The common law does not know such rules because according to the dispatch rule, that problem cannot arise (Honnold, 203).

[5] [option given to offeror on receipt of normal-handled communication from offeree that is late]

On the other hand, the offeror could not foresee that an acceptance would arrive even after the period for acceptance had expired. Meanwhile he may have made other arrangements or have lost his interest in the transaction. He is therefore, not obliged to be bound by the late communication, but he can inform the offeree that he regards his offer as lapsed.

[6] [offeror must inform offeree without delay]

If the offeror no longer wants a contract, he has to inform the offeree without delay that after the expiration of the period for acceptance his offer had already lapsed. "Without delay" relates to the moment of receipt of the late acceptance and not to the expiration of the period for acceptance. [page 105]

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