The CISG provides two different set of rules for two different situations; first situation is where the acceptance arrives late by offer’s fault and the second situation is where the acceptance arrives late because of an irregularity in the means of communication.
By Fatma Esra Güzeloğlu & Abdülkadir Güzeloğlu
7 October 2016
The United Nations Convention on Contracts for the International Sale of Goods (“CISG”) requires an acceptance to reach the offeror within the time it has fixed or, if no time is fixed, within a reasonable time. Hence, if the offeree fails to have the acceptance reach the offeror in due time, it means the acceptance is late and hence deemed ineffective. However, Article 21 enables a contract to come into existence even if the acceptance is late.
The Article provides two different set of rules for two different situations; first situation is where the acceptance arrives late by offeree’s fault, such that the acceptance itself is sent late (either is sent after the expiration of the fixed time or sent by disregarding the time period needed for the acceptance to reach the offeror); second situation is where the acceptance arrives late because of an irregularity in the means of communication, such as a strike of postal employees.[1]
For the first situation the Convention stipulates that a contract is deemed concluded provided that the offeror orally so informs the offeree without delay or dispatches a notice to that effect. For the second situation, an acceptance is effective unless the offeror orally informs the offeree that it considers its offer as having lapsed or dispatches a notice to that effect. Therefore, if the lateness is caused by the offeree’s default, latter’s explicit affirmative notice is needed to render the acceptance effective. Upon dispatch of such notice by the offeror the contract is concluded.
On the other hand, if the lateness is caused by an irregularity in transmission without any fault of the offeree, then the acceptance, as a default rule, is effective; without any need for an additional notice on the offeror’s side. Hence the contract is concluded upon receipt of the late acceptation.
As seen, in the second situation, the diligent offeree is protected against delays caused by the intermediary by deeming the late acceptance as effective.[2] However, the offeror is also protected from being bound by an offer, which according to the latter has expired, by way of being granted the power to render such late acceptance ineffective by informing the offeree, without delay, that the offer has expired.
The Principles of International Commercial Contracts (“PICC”) also provides almost identical provision as stipulated under Article 21 of the CISG. The offeree’s right to withdraw its acceptance until which time such acceptance reaches the offeror should also be reminded given that opportunity protects the offeree from being engaged in a contract which seems no longer desirable due to the occurred changes in the lapsed time.
In parallel with the CISG, Article 5 of the Turkish Code of Obligations No:6098 (“TCO”), entails that an acceptance should reach the offeror within the time it has fixed or, if no time is fixed, within a reasonable time. Article 5(3) of the TCO underlines that if an acceptance which is “sent on time” reaches the offeree late and the offeror no longer wishes to be bound by its offer, then it should promptly inform the offeree so. Otherwise the late acceptance is considered to be effective.
Should you have further questions on contract formation under the CISG and the Turkish commercial law, please do not hesitate to contact us at info@guzeloglu.legal
[1] VISCASILLAS, M., “The Formation of Contracts and the Principles of European Contract Law”, In 13 Pace International Law Review, 2001. Retrieved in 5 October 2016 from: http://www.cisg.law.pace.edu/cisg/biblio/perales3.html
[2] MURRAY, J., “An Essay on the Formation of Contracts and Related Matters under the United Nations Convention on Contracts for the International Sale of Goods”, In 8 Journal of Law and Commerce, 1988. pp.11-51. Retrieved on 6 October 2016 from: http://www.cisg.law.pace.edu/cisg/biblio/murray.html