International Sales Law - Article 14 CISG
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Article 14 CISG

Q 14-1
On what basis did the court in the Geneva Pharmaceuticals case (C 14-1) hold that the offer was ‘sufficiently definite’? 
Claimant’s allegation of an industry custom, which was affirmed by one of the defendants.

Q 14-2
(a) What other instances can be held as being ‘sufficiently definite’ to constitute an offer under the CISG? 
(b) What about under Section 2-204 UCC? 
(a) Any communication, oral or written, in which the goods are identified and provision is made for determining the quantity and the price. For example, an offer for the sale of cars that mentions the brand and model, but expressly leave the ‘detailed colour and equipment to be determined at a later stage’, see CIETAC, 23 April 1997, CISG-online 1151.
(b) The parties have showed an intention to make a contract and the terms are definite enough for a remedy to be determined.

Q 14-3
An offer will not be valid by virtue of Article 14 CISG alone. What matters under domestic law will also need to be taken into consideration in determining whether or not a valid offer has been made? 
The ability to conclude a contract about the subject matter concerned; establishing the identity of the offeror, and the party to whom the offer is directed; and the long-term business relationship and practices established between the parties.

Q 14-4
(a) Upon whose understanding do you think the court placed emphasis in C 14-2 and C 14-3, respectively—that of the buyer or that of the seller? 
(b) What was the reasoning behind this? 
(c) Which principle, present in both civil and common law domestic systems, does this approach reflect?
(a) The buyer.
(b) The buyer was in the position of offeree in both these cases. It was important that the buyer understood that its acceptance would lead to the conclusion of a contract. Consequently, it was the buyer’s understanding that was relevant in determining whether an offer had been made.
(c) The protection of the offeree from unwittingly entering into a contract.

Q 14-5
(a)     Please set out all reasons for why the court found that a contract was not concluded in C14-4.
(b)     Do you agree with the court’s reasoning? Why or why not?
(a)     Because the course of dealing that had been established in the 20 prior transactions between the parties showed that the parties did not intend to be bound until they had achieved agreement on the final terms embodied in the contract documents.

Q 14-6
a)     C 14-5 does not expressly refer to Article 14 CISG but considers the CISG applicable. Identify which parts of the reasoning correspond to the requirements of Article 14 CISG.
b)     Which other provisions of the CISG play a role here in determining that the contract was validly concluded?
c)     Do you agree with the court’s reasoning? Why or why not? 
d)     What is your opinion on the different forms of correspondence used when concluding the contract?
(a)     Para. 3.4.
(b)     Articles 11, 13, 15, 18 (1), and 19(1), for the timeline and the communication methods used for contracting; Articles 53, 55, 60, and 61 for the price determination as well as the buyer’s obligation to accept the goods.

Q 14-7
(a) Compare the reasoning in C 14-6 and C 14-7. Do you agree with the decisions? 
(b) Why or why not? 

Q 14-8
Consider the reasoning in C 14-6. Would a clause whereby price will be determined at an agreed point of time in the future be sufficient to satisfy the requirements of Article 14 CISG? 
Arguably yes, because an agreed point in time in the future provides the means for determining the price. On that date, the parties will reach agreement on a price for the goods, with the consequence that the offer is sufficiently definite. In C 14-6, the tribunal, however, found that delayed delivery could impact the price, which was one of the reasons why the tribunal found that no contract was concluded.

Q 14-9
(a) Which phrase did the court cite as being ‘sufficiently certain’ in C 14-8 in holding that a valid offer had been made? 
(b) What does this case say about the relationship between Articles 14 and 55 CISG? 
(a) ‘a larger number of furs’
(b) Articles 14 and 55 operate independently of one another. In C 14-8, the contract had been concluded with ‘an at least determinable price’, with the consequence that Article 55 did not need to be examined.

Q 14-10
(a) Do you think the court made the correct judgment in C 14-9 with respect to the existence of an offer under Article 14(1) CISG? 
(b) What limitation did it place on the interpretation of Article 55 CISG?
(a) No, the parties’ intention demonstrated that they wished to conclude a contract and each offer fulfilled the requirements of Article 14(1), taking into account the billing customs for aircraft engines, whereby the engine price would have been billed to the aircraft manufacturer.
(b) Article 55 CISG can only be applied where market prices exist.

Q 14-11
(a) What principle, present in both civil and common law systems, is reflected in Article 14(2) CISG? 
(b) Does the wording of Article 14(2) CISG reflect more the common law or the civil law approach? 
(a) An offer to the world at large is not an offer to conclude a contract, but an invitatio ad offerendum, or invitation to treat.
(b) Common law.

Q 14-12
According to cases C 14-10 to C 14-13, what other provisions of the CISG should a court have reference to in determining whether standard terms have been incorporated into the contract? 
Reference should be had to Article 8, in order to determine whether such terms have been reasonably incorporated into the contract.

Q 14-13
(a) What is required of a party seeking to rely on standard terms to incorporate them into the contract? 
(b) How is this achieved?
(a) The party seeking to incorporate standard terms must make them part of the offer.
(b) The party seeking to incorporate standard terms must show that its intention to include such terms was apparent to the recipient party. Further, the other party must receive the text of the standard terms.

Q 14-14
(a) What role does the language of the standard terms play in determining whether or not they will be held to have been validly incorporated into the contract? 
(b) Do you think this is the correct approach? Why or why not?
(a) Standard terms written in a foreign language may still be validly incorporated if they are referred to in the language of the contract. Whether or not they are will depend on the individual circumstances of the case, having regard to the length, intensity and economic importance of the business relationship between the parties, as well as the use of the language in their society. If standard terms are provided in an internationally common language, knowledge is presumed unless the recipient notifies the other party of its lack of understanding.
(b) For English, this would appear to be a reasonable approach. However, if, having regard to the business relationship between the parties, it would be unreasonable to send terms in another language, even in English, they should not, without more, be deemed to have been incorporated into the contract.

Q 14-15
Do you agree that it cannot be assumed that the Internet is available anytime and from anywhere? Why or why not?
This conclusion seems odd at first sight, but on balance one perhaps cannot assume that the Internet is available everywhere in the world at any time. However, this statement is difficult to believe in most of Europe, Asia and North America.

Q 14-16
What difference would it have made to the decision if the court in C 14-13 had held that it could be assumed that the Internet is available anywhere and at any time?
It is hard to tell. On the one hand, if the court had concluded that it could be assumed that the Internet was available all the time, this would have lessened the burden on the seller to inform itself of the purchaser’s GTC. On the other hand, the court said that it was not the task of the recipient to obtain the GTC, but rather the task of the party seeking to rely on them to make them available. Consequently, the court may still have concluded that the buyer’s actions were insufficient.

Q 14-17
(a) C 14-12 to C 14-14 all stem from the same jurisdiction. Which changes over a mere five years can you identify in the jurisprudence and what can we expect from the development of case law based thereon? 
(b) Based on the current status over 10 years after C 14-12, how do you think the court would apply Article 14 now to C 14-12 to C 14-14?
(a)     The jurisprudence reflects that it is increasingly common to make terms and conditions available on one’s website and refer to them. The increased use of online means for business may impact the understanding of what has been “reasonably made available”.  In C 14-14, the court is reflecting on these developments, noting that requiring the other party to obtain the terms and conditions by itself may delay the transaction and move the onus to obtain said terms and conditions, when, as the court points out, “it is easy for the user of the clause to attach the general terms and conditions – which are generally advantageous to them – to their offer.” The court considers whether Article 7(1) CISG, i.e. good faith considerations, should be taken into account. The court discusses that the provision of general terms and conditions on the Internet is now generally considered sufficient, but also notes that direct links to said terms and conditions in the emails through which the contract is concluded, is one way to tackle the question of making said terms and conditions available.

Q 14-18
Also refer to CISG Advisory Council Opinion No. 13 (in full) and compare it with the provided case law (C 14-10 to C 14-14). What are the key takeaways for parties seeking to incorporate standard terms?
    - Consider what is a reasonable opportunity to take note of standard terms on a case-by-case basis (e.g., prior contracting, used languages), also considering good faith considerations of international trade. 
    - How easy was it for the user of the standard terms to provide them (e.g., through a link)?
    - The reference must be clear. and the terms must be understandable.
    - The content of the standard terms can impact whether they are incorporated, e.g., when they are surprising or unusual to the extent that a reasonable person would not have expected them.
    - Ambiguity can backfire on the party seeking to incorporate standard terms.
    - Negotiated terms prevail.