E-Contracts and CISG: the offer

In the last essay, by analyzing article 11 and 13 of the CISG, we agreed that this important conventional text applies to electronic contracts, because there is no form requirement prescribed, and it is not present any requirement in terms of signature or original. These are features that well fit to contracts that use the internet as platform of communication.

Certainly, the formation of a contract is characterized by different elements that require a more specific deepining, mostly if we are dealing with an electronic one. For this reason, it is important to understand the answer given by the CISG for what concerns aspects like the offer and acceptance, the place of business, the time of dispatch and receipt (and many other aspects of the contractual performance). Let's start by taking a look at the offer.

According to art. 15, paragraph 1, <<an offer becomes effective when it reaches the offeree>> and paragraph 2 states that <<an offer, even if it is irrevocable, may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer>>. This article establishes that an offer is not effective until it reaches the offeree and may be withdrawn if the withdrawal reaches the offeree before or at the same time as the offer. In traditional means of communication this rule enables the offeror to withdraw his/her offer by faster means of communication. He/she may for example, send an offer by letter through ordinary mail and then later withdraw it by sending a fax that reaches the offeree before the letter. But when it comes for email or chats, it is very difficult to find ways of communications faster than these ones, today. Thus, a question of practical importance arises, when the offer is sent by traditional letter written on paper and sent by ordinary mail, while the withdrawal is sent electronically.

The difficulty from a conceptual point of view is that the addressee of an electronic withdrawal does not have to be physically present in the place where the message arrives. The place of the message is a functional concept rather than a physical one. The message could be located on any server in the world, including the sender's: the important question is if the addressee can retrieve it.

According to art. 16 paragraph 1, <<until a contract is concluded an offer may be revoked if the revocation reaches the offeree before he has dispatched an acceptance>>, which means that this provision enables the offeror to revoke an offer until the offeree has dispatched his acceptance. The revocation must have entered the offeree's server before the offeree has dispatched his acceptance. In fact, following the opinion of the CISG Advisory Council, in case of electronic communications the term "reaches" corresponds to the point in time when an electronic communication has entered the offeree's server. An offer may be revoked if the revocation enters the offeree's server before the offeree has dispatched an acceptance. A prerequisite is that the offeree has consented, expressly or impliedly, at receiving electronic communications of that type, in that format and to that address. At the same time, the term "dispatch" corresponds to the point in time when the acceptance has left the offeree's server. The offeror may revoke the offer by sending a revocation that enters the offeree's server before the offeree's acceptance leaves the offeree's server. A prerequisite is that the offeror has consented, expressly or impliedly, at receiving electronic communications of that type, in that format, and to that address.

Article 17 provides that <<an offer, even if it is irrevocable, is terminated when a rejection reaches the offeror>>: in this case we can affirm that, in an electronic context, the exact time of “reaches the offeror” can be determined. The offeree can no longer create a contract by dispatching an indication of assent. If the offeree changes his mind after having dispatched a rejection of the offer and wishes to conclude a contract, the indication of assent must enter the offeror's.

In the next essay, we will see how the rules coming from the CISG apply for the acceptance, and how to interpret them.

Sources: CISG Text; CISG Advisory Council opinion no.1; "Electronic Communications under the United Nations Convention on Contracts for the International Sale of Goods, CISG” by Christina Ramberg, Stockholm Institute for Scandinavian Law."The electronic Contracts Convention, the CISG, and New Sources of E-Commerce Law" by Charles H. Martin, 2008.